GARTMORE SMALLER COMPANIES TRUST PLC
Unaudited Results for the six months to 29 February 2008
This preliminary announcement of unaudited results was approved by the Board of
Directors on 15 April 2008.
Overview
* Net Asset Value per Ordinary share (excluding revenue reserve) fell by 13.9%
over the six-month period to 29 February 2008, compared with a fall of 21.0% in
the FTSE SmallCap (excluding Investment Companies) Index.
* Mid-market price per Ordinary share fell by 18.9% from 588.5p to 477.5p.
* Net revenue after taxation increased from �39,000 to �229,000.
* Interim dividend unchanged at 1.00p per Ordinary share.
Chairman's Statement
Capital Performance
The first six months of the Company's current financial year was a difficult
and volatile period for equity markets in general and for smaller companies in
particular. The Company's portfolio was not immune to the poorly-performing
equity markets, with the Net Asset Value per Ordinary share falling by 13.9% in
capital terms, compared with a fall of 21.0% in the FTSE SmallCap (excluding
Investment Companies) Index. The Manager's favouring of micro-cap stocks helped
to mitigate the decline, with the FTSE AIM All-Share Index falling by just 8.0%
over the six-month period.
Discount and Share Buybacks
In common with other investment trusts investing in UK smaller company stocks,
the discount at which the Company's Ordinary shares trade relative to the
underlying Net Asset Value widened over the six-month period. The mid-market
price of the Ordinary shares fell by 18.9% from 588.5p to 477.5p to leave the
shares trading at a discount of 21.7%, compared with 17.0% at 31 August 2007.
Since the end of the reporting period, the Company has repurchased and
cancelled 20,000 Ordinary shares.
Revenue and Dividends
Net revenue for the period, after expenses and taxation, increased from �39,000
to �229,000, which gives a revenue return of 1.65p per Ordinary share, compared
with 0.28p for the corresponding period last year. This welcome improvement in
the revenue position is mainly attributable to increased investment income from
the underlying portfolio. Your Board has declared an unchanged interim dividend
of 1.00p per Ordinary share which will be paid on 19 May 2008 to shareholders
on the register on 25 April 2008.
InvestmentBackground
Over the six-month period, UK equity markets experienced a sharp decline, which
began soon after the start of a significant downturn in the credit cycle. A
collapse in the US sub-prime mortgages market, which impacted the asset quality
of major banks and led to restricted interbank lending, fuelled fears of
tighter credit conditions for businesses and consumers going forward and
speculation about the possibility of economic recessions in both the US and the
UK.
Signs of an abrupt slowdown in the US economy prompted the Federal Reserve Bank
to cut interest rates aggressively to 3.0% by late January. The Bank of England
responded in a less dramatic way to signs of a slowing domestic economy,
trimming interest rates by just 0.5% to 5.25%. The UK economy grew by a modest
0.6% during the final quarter of 2007.
Against this backdrop, shares in smaller companies performed very poorly. This
deterioration in sentiment towards smaller companies reflects an adverse change
in global economic expectations that contrasts starkly with the positive
progress reported by many of the companies in which the Company has invested.
Despite extensive representations by interested parties and indications of a
possible policy U-turn, the UK Chancellor of the Exchequer announced changes to
capital gains tax (CGT) in his inaugural Budget in March. From 6 April 2008, a
flat capital gains tax of 18% will replace prior arrangements under which CGT
was charged at a 10% rate on business assets (AIM stocks are treated as
business assets) after being held for two years. We see the new flat rate as a
regrettable step because it risks deterring some longer-term investor support
for smaller UK businesses at an important stage in their growth cycle. However,
given the relatively good performance of AIM stocks compared with the smaller
companies universe as a whole over the past six months, the Board is hopeful
that the compelling longer-term attractions of the AIM market will prevail.
VAT on Management Fees
In November 2007, HM Revenue & Customs (HMRC) announced its acceptance of the
judgment of the European Court of Justice that fund management services to
investment trust companies should be exempt from value-added tax. Consequently,
VAT ceased to be chargeable on management fees and this will reduce the ongoing
running costs of the Company. Gartmore has confirmed that it has lodged claims
with HMRC for the recovery of VAT paid from January 2001 and, following a
recent House of Lords ruling, is preparing claims in respect of the period from
1990 to 1996. However, the matter will take time to resolve and therefore no
provision for any repayment has been made in these accounts. Further details of
the potential recovery are provided in note 3 of the accounts and shareholders
will be kept advised of developments.
Outlook
Undoubtedly the credit environment has weakened in the wake of the US sub-prime
crisis and the UK consumer appears to be facing a more difficult period.
However, recent declines in the smaller companies market have left many stocks
trading at extremely undemanding levels that fail to reflect their longer-term
growth prospects. This is so particularly among the UK's micro-cap companies, a
sector to which the Company has a significant exposure. Thus, notwithstanding
the likelihood of a challenging period in the near term, the Board believes
that the Company is well-placed to capitalise upon its disciplined investment
approach and to return to its longer-term path of delivering premium returns
for investors.
Liam Kane
Chairman
15 April 2008
Manager's Review
Portfolio Performance
Clearly, the six-month period under review was a disappointing one. Despite our
generally cautious stance, particularly with regard to companies dependent upon
discretionary consumer spending, and low exposure to financials and
housing-related stocks, there was a significant fall in the value of the
Company's investment portfolio.
Our emphasis on attractively valued micro-caps (the smallest companies in the
UK measured by market capitalisation) was a positive factor, helping the
portfolio to withstand the worst of the savage declines registered by the wider
smaller company universe. Our stock selection within both the industrials and
basic materials sectors contributed most positively to returns relative to the
FTSE Smaller Companies (excluding Investment Companies) Index, although our
aggregate holdings in the consumer services sector performed poorly.
Despite difficult market conditions, a number of the Company's investments
produced strong positive returns. Most notable among these were positions in
telecommunications messaging supplier, eServGlobal, and aircraft components
distributor, Aero Inventory. Shares in eServGlobal advanced steadily, ahead of
the company raising its revenue guidance in January and reporting a sharp rise
in first-half earnings a month later. In a statement accompanying its results,
the company reported strong demand for its charging and messaging solutions,
with many of its customers having reported record transaction volumes. The
value of our holding in Aero Inventory climbed following results issued in
early September that showed a significant increase in full-year pre-tax
profits. The company said that it would enlarge its debt facility, obviating
the need to turn to the equity market, as it seeks to expand its business.
Moreover, the company announced in November that it had won a major supply
contract with ACTS Aero Technical Support & Services of Canada worth more than
US$1 billion over 10 years. With the firm now focusing on improving its stock
handling efficiency and further contract wins likely, we believe that the
outlook for Aero Inventory remains very bright.
Conversely, investments in biopharmaceuticals company, Lipoxen, and real-time
financial solutions provider, Gresham Computing, produced the weakest
individual returns of the period. Lipoxen performed poorly after reporting
wider first-half losses, citing rises in both R&D costs and administrative
expenses. The market was in no mood to receive such news, in an environment
where biotech companies generally are out of favour due to negative cash-flows.
Positively, Lipoxen has two phase-1 trials due to complete in April, the
results of which have the potential to lift Lipoxen's rating. In addition, in
the medium-term, Lipoxen's platform technologies could prove attractive to the
pharmaceutical majors. Meanwhile, the shares of Gresham Computing
underperformed markedly as the market grew impatient for news of progress in
the take-up of its computer software solutions. A partial recovery came in
January as the company issued an upbeat outlook statement and reported a
substantial increase in contracted revenues. Towards the end of February, the
company reported a major contract win for a treasury management solution, which
is expected to be completed in 2008. Given Gresham Computing's most recent
progress and the fundamental strength of its product offerings, we consider the
fall in the company's shares over the past six months to have been excessive.
Prospects
Following recent sharp falls in the smaller companies market, takeover activity
appears to be increasing and this is a trend we expect to continue. Stock
valuations are low and a weakening currency, innovative products and strong
order books make many UK smaller companies attractive investments at current
levels. Even so, we expect to continue to pursue a relatively defensive
investment strategy in the near term. Though we continue to uncover a range of
very attractive stock-specific opportunities, particularly in the micro-cap
arena, we take the view that more challenging global credit conditions could
continue to hamper sentiment towards equities in the months ahead. In addition
to our micro-cap bias, we maintain our preference for small caps with a
relatively low exposure to the slowing consumer cycle.
Gartmore Investment Limited
Manager
15 April 2008
Financial Statistics
At 29 February At 31 Change
August
2008 2007 %
Capital
Net Assets (�'000) 84,642 98,386 -14.0
Net Assets ex undistributed Revenue (� 83,909 97,431 -13.9
'000)
FTSE SmallCap (ex Investment 2907.7 3679.7 -21.0
Companies) Index
FTSE AIM All-Share Index 1020.3 1108.5 -8.0
FTSE All-Share Index 3013.0 3260.5 -7.6
Ordinary Shares
Net Asset Value 610.0p 709.1p -14.0
Mid-market Price 477.5p 588.5p -18.9
Discount 21.7% 17.0%
Six months to Six months to
29 February 2008 28 February 2007
Revenue - Ordinary Share
Net Revenue after taxation (�'000) 229 39
Revenue Return per share 1.65p 0.28p
Interim Dividend per share 1.00p 1.00p
Total Return to Equity Shareholders (�
'000)
Revenue return 229 39
Capital (loss)/return (13,522) 11,757
--_______ ______
Total (loss)/return (13,293) 11,796
====== =====
Total Return per Ordinary share
Revenue 1.65p 0.28p
Capital (97.46p) 84.74p
--_______ ______
Total (loss)/return (95.81p) 85.02p
====== =====
Dividend Calendar
Rate Announced XD Date Record Pay Date
Date
Interim 1.00p 15.4.08 23.4.08 25.4.08 19.5.08
Final October November November December
Analysis of Net Assets and Shareholders' Funds
Valuation at Net Appreciation/ Valuation at
31 August 2007 Transactions (Depreciation) 29 February
2008
�'000 % �'000 �'000 �'000 %
UK Equities
Oil & Gas 6,279 6.4 1,080 (581) 6,778 8.0
Basic Materials 9,445 9.6 (2,639) 41 6,847 8.1
Industrials 31,297 31.8 (2,954) (4,125) 24,218 28.6
Consumer Goods 5,740 5.8 (1,199) (612) 3,929 4.6
Health Care 7,886 8.0 430 (1,288) 7,028 8.3
Consumer Services 9,557 9.7 207 (2,979) 6,785 8.0
Telecommunications 367 0.4 449 (198) 618 0.7
Utilities 578 0.6 (138) 28 468 0.6
Financials 7,460 7.6 163 (651) 6,972 8.2
Technology 24,990 25.4 (1,563) (2,641) 20,786 24.6
_____ ____ _____ ______ ______ ____
Total Investments 103,599 105.3 (6,164) (13,006) 84,429 99.7
Net Current Assets/ (5,213) (5.3) 5,426 - 213 0.3
(Liabilities)
_____ ____ _____ ______ ______ ____
Net Assets 98,386 100.0 (738) (13,006) 84,642 100.0
Attributable to
Ordinary
Shareholders
===== ==== ===== ====== ===== ====
Major Sector Weightings
Valuation of FTSE FTSE
the SmallCap
Company's Index* All-Share
Investments Index
Oil & Gas 8.0 2.0 17.0
Basic Materials 8.1 3.5 11.8
Industrials 28.7 25.8 7.1
Consumer Goods 4.7 6.5 10.1
Health Care 8.3 9.6 6.3
Consumer Services 8.0 15.1 10.3
Telecommunications 0.7 1.8 6.7
Utilities 0.6 - 4.2
Financials 8.3 23.4 25.6
Technology 24.6 12.3 0.9
____ ____ ____
100.0 100.0 100.0
==== ==== ====
* Excluding investment companies
Principal Investments at 29 February 2008
Percentage
Valuation of Portfolio
Company Sector �'000 %
BATM Advanced Communications Technology Hardware & 2,787 3.3
Equipment
Management Consulting Group Support Services 2,660 3.1
Aero Inventory * Aerospace & Defence 2,576 3.1
eServGlobal * Software & Computer 2,416 2.9
Services
Brammer Support Services 2,017 2.4
Pace Micro Technology Leisure Goods 1,935 2.3
Avocet Mining Mining 1,890 2.2
Gulf Keystone Petroleum * Oil & Gas Producers 1,571 1.9
IQE * Technology Hardware & 1,307 1.5
Equipment
Elementis Chemicals 1,286 1.5
______ _____
Top Ten Investments 20,445 24.2
Redstone * Technology Hardware & 1,222 1.4
Equipment
Tricorn Group Industrial Engineering 1,140 1.4
Hunting Oil Equipment & Services 1,038 1.2
Osmetech * Pharmaceuticals & 1.034 1.2
Biotechnology
Plant Heathcare * Chemicals 1,006 1.2
Regal Petroleum * Oil & Gas Producers 976 1.2
Premium Bars & Restaurants Travel & Leisure 969 1.2
Corac Group * Industrial Engineering 962 1.1
Ora Capital Partners * General Financial 927 1.1
Gresham Computing Software & Computer 891 1.1
Services
______ _____
Top Twenty Investments 30,610 36.3
Oakley Capital Investments * General Financial 885 1.1
Firestone Diamonds * Mining 878 1.0
Imprint * Support Services 874 1.0
Umeco Aerospace & Defence 861 1.0
Superscape Software & Computer 850 1.0
Services
Lipoxen * Pharmaceuticals & 839 1.0
Biotechnology
Hallin Marine Subsea Oil Equipment & Services 822 1.0
International *
Arc International Technology Hardware & 797 1.0
Equipment
Walker Greenbank * Household Goods 789 0.9
Conygar Investment Company General Financial 777 0.9
______ _____
Top Thirty Investments 38,982 46.2
Nestor Heathcare Health Care Equipment & 770 0.9
Services
Iomart Group * Software & Computer 736 0.9
Services
Software Radio Technology * Technology Hardware & 734 0.9
Equipment
Chemring Aerospace & Defence 724 0.9
Avacta Group * Pharmaceuticals & 705 0.8
Biotechnology
Trifast Industrial Engineering 689 0.8
Kewill Systems Software & Computer 687 0.8
Services
KBC Advanced Technologies * Oil Equipment & Services 678 0.8
Netcall * Software & Computer 638 0.8
Services
Heritage Underwriting Agency Nonlife Insurance 631 0.7
*
______ _____
Top Forty Investments 45,974 54.5
Costain * Construction & Materials 618 0.7
Freedom4 Communications * Fixed Line 618 0.7
Telecommunications
Holidaybreak Travel & Leisure 576 0.7
Kellan Group * Support Services 570 0.7
Genus Pharmaceuticals & 564 0.7
Biotechnology
GW Pharmaceuticals * Pharmaceuticals & 539 0.7
Biotechnology
Carclo Chemicals 533 0.6
EBT Mobile China * General Retailers 529 0.6
Manpower Software * Software & Computer 529 0.6
Services
Cape * Support Services 522 0.6
______ _____
Top Fifty Investments 51,572 61.1
Other equity investments 32,857 38.9
(140 stocks)
______ _____
Total Investment Portfolio at Fair Value 84,429 100.0
===== ====
*Quoted on the Alternative Investment Market.
Portfolio Analysis
At 29 February At 31
August
2008 2007
% %
Portfolio Distribution by Equity
Market
FTSE AIM Index 60.7 57.2
FTSE SmallCap Index 25.7 29.9
FTSE Fledgling Index 8.2 9.5
FTSE 250 Index 5.4 3.4
Portfolio Distribution by Market
Capitalisation
Less than �50m 34.9 30.0
�50-�100m 21.9 22.6
�100-�250m 28.1 31.9
�250-500m 11.7 12.8
More than �500m 3.4 2.7
Income Statement (Unaudited)
Six months to 29 February
2008
Revenue Capital Total
�'000 �'000 �'000
Losses on investments held at fair value
through profit or loss - (13,006) (13,006)
Income from investments (note2) 397 - 397
Other income (note 2) 30 30
Currency losses - - -
______ _______ _______
Return before Expenses, Finance Costs and 427 (13,006) (12,579)
Taxation
Expenses
Management fees (note 3) (55) (309) (364)
Other fees and expenses (131) (136) (267)
______ _______ _______
Return before Finance Costs and Taxation 241 (13,451) (13,210)
Finance costs
Interest payable (12) (71) (83)
______ _______ _______
Return on Ordinary Activities before 229 (13,522) (13,293)
Taxation
Taxation - - -
______ _______ _______
Return/ (Loss) to Equity Shareholders 229 (13,522) (13,293)
after Taxation
===== ====== ======
Return/ (Loss) per Ordinary share (note 4) 1.65p (97.46p) (95.81p)
===== ====== ======
Six months to 28 February
2007
Revenue Capital Total
�'000 �'000 �'000
Gains on investments held at fair value
through profit or loss - 12,411 12,411
Income from investments (note 2) 244 - 244
Other income (note 2) 10 10
Currency losses - - -
______ _______ _______
Return before Expenses, Finance Costs and 254 12,411 12,665
Taxation
Expenses
Management fees (note 3) (67) (378) (445)
Other fees and expenses (140) (233) (373)
______ _______ _______
Return before Finance Costs and Taxation 47 11,800 11,847
Finance costs
Interest payable (8) (43) (51)
______ _______ _______
Return on Ordinary Activities before 39 11,757 11,796
Taxation
Taxation - - -
______ _______ _______
Return to Equity Shareholders after 39 11,757 11,796
Taxation
===== ====== ======
Return per Ordinary share (note 4) 0.28p 84.74p 85.02p
===== ====== ======
Year to 31 August 2007
Revenue Capital Total
�'000 �'000 �'000
Gains on investments held at fair value
through profit or loss - 14,467 14,467
Income from investments (note 2) 862 - 862
Other income (note 2) 16 - 16
Currency losses - (1) (1)
______ _______ _______
Return before Expenses, Finance Costs and 878 14,466 15,344
Taxation
Expenses
Management fees (note 3) (141) (799) (940)
Other fees and expenses (287) (492) (779)
______ _______ _______
Return before Finance Costs and Taxation 450 13,175 13,625
Finance costs
Interest payable (32) (175) (207)
______ _______ _______
Return on Ordinary Activities before 418 13,000 13,418
Taxation
Taxation - - -
______ _______ _______
Return to Equity Shareholders after 418 13,000 13,418
Taxation
===== ====== ======
Return per Ordinary share (note 4) 3.01p 93.69p 96.70p
===== ====== ======
The Total column represents the Profit and Loss Account of the Company.
The revenue and capital items derive from continuing activities.
A Statement of Total Recognised Gains and Losses has not been presented as all
gains and losses are recognised in the Income Statement.
No operations were acquired or discontinued during the period.
Reconciliation of Movements in Shareholders' Funds (Unaudited)
Six months to 29 February 2008
Capital Capital Capital
Share redemption reserve reserve Revenue
capital reserve realised unrealised Reserve Total
*
�'000 �'000 �'000 �'000 �'000 �'000
At 31 August 2007 3,469 506 91,061 2,395 955 98,386
Net capital return/
(loss) from
ordinary activities - - 1,059 (14,581) - (13,522)
Net revenue return
from
ordinary activities - - - - 229 229
Equity dividend paid - - - - (451) (451)
_____ _____ ______ ______ _____ ______
At 29 February 2008 3,469 506 92,120 (12,186) 733 84,642
===== ==== ===== ===== ==== =====
Six months to 28 February 2007
Capital Capital Capital
Share redemption reserve reserve Revenue
capital reserve realised unrealised Reserve Total
*
�'000 �'000 �'000 �'000 �'000 �'000
At 31 August 2006 3,469 506 79,733 723 1,265 85,696
Net capital return from
ordinary activities - - 4,732 7,025 - 11,757
Net revenue return from
ordinary activities - - - - 39 39
Equity dividend paid - - - - (589) (589)
______ _____ ______ ______ _____ ______
At 28 February 2007 3,469 506 84,465 7,748 715 96,903
===== ==== ===== ===== ==== =====
Year to 31 August 2007
Capital Capital Capital
Share redemption reserve reserve Revenue
capital reserve realised unrealised Reserve Total
*
�'000 �'000 �'000 �'000 �'000 �'000
At 31 August 2006 3,469 506 79,733 723 1,265 85,696
Net capital return from
ordinary activities - - 11,328 1,672 - 13,000
Net revenue return from
ordinary activities - - - - 418 418
Equity dividends paid - - - - (728) (728)
______ _____ ______ ______ _____ ______
At 31 August 2007 3,469 506 91,061 2,395 955 98,386
===== ==== ===== ===== ==== =====
* The revenue reserve represents the amount of the Company's reserves
distributable by way of dividend.
Balance Sheet (Unaudited)
At At At
29 February 28 31 August
February
2008 2007 2006
�'000 �'000 �'000
Non-current Assets
Listed investments held at fair value 101,742 101,742 89,195
through profit or loss (note 5)
_______ _______ _______
Current Assets
Debtors - amounts receivable within one year 58 58 499
Cash at bank 674 674 126
_______ _______ _______
732 732 625
Current Liabilities
Creditors - amounts payable within one year (1,071) (1,071) (824)
Bank loan (4,500) (4,500) (3,300)
_______ _______ _______
Net Current Liabilities (4,839) (4,839) (3,499)
_______ _______ _______
Net Assets 96,903 96,903 85,696
====== ====== ======
Capital and Reserves
Called-up share capital (note 7) 3,469 3,469 3,469
Capital redemption reserve 506 506 506
Capital reserve: realised 84,465 84,465 79,733
Capital reserve: unrealised 7,748 7,748 723
Revenue reserve 715 715 1,265
_______ _______ _______
Equity Shareholders' Funds 96,903 96,903 85,696
====== ====== ======
Net asset value per Ordinary share (note 6) 698.4p 698.4p 617.6p
===== ===== =====
Directors' Responsibility Statement
The Directors of the Company each confirm that to the best of their knowledge:
* this condensed set of financial statements has been prepared in accordance
with the Statement on Half-Yearly Financial Reports issued by the UK
Accounting Standards Board; and
* the Chairman's Statement and Manager's Review herein include a fair review
of the information required by the UKLA Disclosure and Transparency Rules
DTR 4.2.7R and DTR 4.2.8R.
Cash Flow Statement (Unaudited)
Six months Six months Year to
to to
29 February 28 February 31 August
2008 2007 2007
�'000 �'000 �'000
Revenue Activities
Dividends and interest received from 435 337 920
investments
Interest received on deposits 23 5 11
Underwriting commission received 7 5 5
Expenses paid, allocated to revenue (235) (237) (443)
_______ _______ _______
Net cash inflow from revenue activities 230 110 493
_______ _______ _______
Servicing of Finance
Interest paid, allocated to revenue (13) (8) (31)
_______ _______ _______
Investment Activities
Acquisitions of investments (21,621) (36,807) (81,777)
Disposals of investments 26,819 37,011 81,619
Expenses and interest paid, allocated to (502) (369) (908)
capital
_______ _______ _______
4,696 (165) (1,066)
_______ _______ _______
Equity Dividends Paid
Ordinary shares (451) (589) (728)
_______ _______ _______
Cash inflow/(outflow) before financing 4,462 (652) (1,332)
Financing
Loan (repayment)/drawdown (4,450) 1,200 1,400
_______ _______ _______
Net Cash Inflow (notes 9 & 10) 12 548 68
====== ====== ======
Notes to the Accounts
1. Accounting Policies
The accounts have been prepared on a going concern basis in accordance with UK
Generally Accepted Accounting Practice and the Statement of Recommended
Practice for "Financial Statements of Investment Trust Companies" issued by The
Association of Investment Companies in January 2003 (revised December 2005).
The financial information for each of the six-month periods ended 29 February
2008 and 28 February 2007 comprises non-statutory accounts within the meaning
of Section 435 of the Companies Act 2006. The financial information for the
year ended 31 August 2007 has been extracted from published accounts that have
been delivered to the Registrar of Companies and on which the report of the
auditors was unqualified. The interim accounts have been prepared on the same
basis as the annual accounts.
The Company's accounting policies have not varied from those described in the
Report and Accounts for the year to 31 August 2007.
2. Income
Six months to Six months Year to
to
29 February 28 February 31 August
2008 2007 2007
�'000 �'000 �'000
Income from UK listed
investments:
Franked dividends 358 242 844
Unfranked dividends 39 2 21
Interest on fixed income - - (3)
securities
______ ______ ______
397 244 862
===== ===== =====
Other income:
Interest on deposits 23 5 11
Underwriting commission 7 5 5
______ ______ ______
30 10 16
===== ===== =====
3. Management Fees
Six months to Six months Year to
to
29 February 28 February 31 August
2008 2007 2007
�'000 �'000 �'000
Management fees 364 379 800
Value-added tax - 66 140
______ ______ ______
364 445 940
===== ===== =====
Allocated to revenue 55 67 141
Allocated to capital 309 378 799
______ ______ ______
364 445 940
===== ===== =====
Management fees are allocated 85% to Capital reserve: realised and 15% to
Revenue account.
In November 2007, HM Revenue & Customs (HMRC) confirmed that the provision of
fund management services to investment trusts is exempt from VAT. From that
time, the Company ceased to be charged VAT on management fees. The Manager has
confirmed that it has lodged claims with HMRC to recover VAT paid from January
2001 and, following a further HMRC brief in February 2008, is also preparing a
claim in respect of the period from 1990 to 1996.
The claims process is likely to be protracted and HMRC has yet to provide
details of the mechanism for processing claims. Until this mechanism is
published and uncertainties concerning the potential repayment are resolved
there will be no recognition of an asset in the accounts. However, the Company
currently estimates that it may in due course recover between �500,000 and �
600,000 in respect of the period from January 2001 and in the region of �
300,000 in respect of the period from 1990 to 1996. Any recovery of VAT will be
allocated between capital and revenue in the Income Statement on the same basis
as the original fee was expensed.
4. Total Return per Ordinary Share
Six months Six months Year to
to to
29 February 28 February 31 August
2008 2007 2007
�'000 �'000 �'000
Revenue return 229 39 800
Capital (loss)/return (13,522) 11,757 140
______ ______ ______
Total (loss)/return (13,293) 11,796 940
===== ===== =====
Weighted average number of shares 13,875,000 13,875,000 13,875,000
in issue
======== ======== =======
Revenue return per Ordinary share 1.65p 0.28p 3.01p
Capital (loss)/return per (97.46p) 84.74p 93.69p
Ordinary share
______ ______ ______
Total (loss)/return per Ordinary (95.81p) 85.02p 96.70p
share
===== ===== =====
5. Investments
At At At
29 28 February 31 August
February
2008 2007 2007
�'000 �'000 �'000
Analysis of investments by place of
listing:
London Stock Exchange 33,167 43,548 44,361
Alternative Investment Market 51,262 58,194 59,238
______ ______ ______
Valuation of Investments 84,429 101,742 103,599
===== ===== =====
6. Net Asset Value
At At At
29 February 28 February 31 August
2008 2007 2007
Net Assets attributable to Ordinary �84,642,000 �96,903,000 �98,386,000
shareholders
Ordinary shares in issue 13,875,000 13,875,000 13,875,000
Net Asset Value per Ordinary share 610.0p 698.4p 709.1p
7. Issued Share Capital
The Company's authorised share capital comprises 20,500,000 Ordinary shares of
25p each.
Since 29 February 2008, the Company has repurchased 20,000 Ordinary shares for
cancellation which has reduced the number of Ordinary shares in issue from
13,875,000 to 13,855,000.
8. Interim Dividend on Ordinary Shares
The interim dividend of 1.00p per Ordinary share will be paid on 19 May 2008 to
shareholders on the register on 25 April 2008. The cost of the interim
dividend, based on 13,855,000 Ordinary shares in issue, is �138,550.
9. Reconciliation of Net Cash Flow to Movement in Net Cash/(Debt)
Six months Six months Year to
to to
29 February 28 February 31 August
2008 2007 2007
�'000 �'000 �'000
Net cash inflow 12 548 68
Decrease/(increase) in borrowings 4,450 (1,200) (1,400)
______ ______ ______
Change in net cash balances 4,462 (652) (1,332)
resulting from cash flows
Net debt brought forward (4,507) (3,174) (3,174)
Currency losses - - (1)
______ ______ ______
Net debt balance carried forward (45) (3,826) (4,507)
===== ===== =====
10. Reconciliation of Net Cash Flow to Movement in Net Cash/(Debt)
At At At
29 February 28 February 31 August
2008 2007 2007
�'000 �'000 �'000
Cash at bank 205 674 193
Bank loan (250) (4,500) (4,700)
______ ______ ______
(45) (3,826) (4,507)
===== ===== =====
The Company
Directors
Liam Kane (Chairman of the Board)
Carol Ferguson (Senior Independent Director)
Lynn Ruddick (Chairman of the Audit Committee)
Robin Baillie
Peter Rice
Investment Objective
The Company seeks long-term capital growth through investment in smaller UK
listed companies and unlisted companies quoted on the Alternative Investment
Market.
Investment Policy
Asset Allocation:
The Company invests in smaller UK listed companies and unlisted companies
quoted on the Alternative Investment Market with growth potential. The majority
of investments will be equities, although other forms of equity-related
securities, including warrants and convertibles, may also be held. Cash and
derivative instruments (such as futures and options) may be used for efficient
portfolio management and as part of investment strategy, subject to the prior
consent of the Board.
Risk Diversification:
Portfolio risk is managed by investing in a diversified spread of investments.
The Company's Articles provide that at least 60% by value of the portfolio must
be comprised of holdings which do not individually exceed 3% of the value of
Total Assets and that no holdings, on acquisition, shall exceed 8% of the value
of Total Assets. However, this limitation does not apply to gilts or, in
limited circumstances, investment company holdings. The Company will not invest
more than 15% of its total assets in other listed investment companies
(including investment trusts).
Gearing:
The Company has the power to borrow money ("gearing") and does so at times when
the Manager is confident that market conditions and opportunities exist to
enhance investment returns. The Manager has discretion to borrow within limits
and conditions set by the Board from time to time.
Benchmark Index
For the purpose of tracking the Manager's performance, movements in the
Company's net asset value are compared with the FTSE SmallCap (excluding
investment companies) Index. The portfolio is comprised principally of
investments listed on the main market, forming part of the FTSE SmallCap Index,
the FTSE Fledgling Index or the FTSE 250 Index, and of unlisted investments
quoted on the Alternative Investment Market. In view of this broad spread of
investments, the Board considers that there is no single optimal benchmark of
the Company's performance. The Company sources index and price data from
Thomson Financial Datastream.
Capital Structure
The Company is an investment trust company with an issued share capital at 29
February 2008 comprising 13,875,000 Ordinary shares of 25p each.
Manager and Secretary
Gartmore Investment Limited, a subsidiary of Gartmore Investment Management
Limited, acts as the Company's Investment Manager and Corporate Secretary.
Gartmore Investment Limited is authorised and regulated by the Financial
Services Authority.
The day-to-day management of the Company's investment portfolio is undertaken
by Rob Giles.
Shareholder Information
Price and Performance Information
The Company's Ordinary shares are listed on the London Stock Exchange and the
closing mid-market price is published in the Daily Telegraph, The Times and the
Financial Times under `Investment Companies'.
Real-time share price information is available on 0906-843 0000 (select option
2 and then enter company code 3192). Calls are charged at 60p per minute on a
per second basis from a BT landline. Charges from other telephone networks,
especially mobile networks, may vary.
The Company's Net Asset Value is calculated daily and can be viewed on the
London Stock Exchange website: www.londonstockexchange.com. Further information
can be obtained from Gartmore as follows:
Free investor helpline: 0800-289 336
Internet address: www.gartmore.co.uk
E-mail address: helpline@gartmore.com
Internet
Information on the Company is available on the Gartmore website,
www.gartmore.co.uk. The Company's discrete area on the site can be accessed via
the "Fund range" menu or directly using www.gartmoresmallercostrust.co.uk or
www.gartmoresmallercostrust.com. This information includes the latest annual
and interim reports, fact sheets and corporate governance documents such as
committee terms of reference that can be downloaded, together with access to
the latest regulatory news announcements and net asset values.
Share Register Enquiries
The Company's Registrars, Equiniti Limited, maintain the share register. In the
event of queries regarding your holding, please contact the Registrars on
0871-384 2453. Calls are charged at 8p per minute from a BT landline. Charges
from other telephone networks, especially mobile networks, may vary.
Alternatively, there is now a range of shareholder information available
online. You can check your holding and find practical help on transferring
shares or updating your details at www.shareview.co.uk. Changes of name or
address must be notified in writing to Equiniti Limited, Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA.
Payment of Dividends
Cash dividends will be sent by cheque to the first-named shareholder on the
Register at their registered address, together with a tax voucher. At
shareholders' request, dividends may instead be paid direct into the
shareholders' bank account through the Bankers' Automated Clearing System
(BACS). This may be arranged by contacting the Company's Registrars.
The Association of Investment Companies
The Company is a member of The Association of Investment Companies, which
produces monthly publications of detailed information on the majority of
investment trusts. This information is also available on the Association's
website, www.theaic.co.uk. The Association of Investment Companies can be
contacted by telephone on 020-7282 5555, or by post to 9th floor, 24 Chiswell
Street, London EC1Y 4YY.
Interim Report and Accounts
The interim report and accounts for the six months to 29 February 2008 will be
posted to shareholders shortly. Copies will also be available from the
Company's registered office at Gartmore House, 8 Fenchurch Place, London EC3M
4PB and for download from www.gartmore.co.uk.
Gartmore Investment Limited
Company Secretary
15 April 2008
END
Grafico Azioni Gartmore Smaller Cos (LSE:GSM)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Gartmore Smaller Cos (LSE:GSM)
Storico
Da Gen 2024 a Gen 2025
