F&C ASSET MANAGEMENT
F&C Global Smaller Companies PLC ('the Company') has benefited from a period of solid stock selection, it announced in its interim results today, for the six months to 31 October 2014. The net asset value (NAV) per share delivered a total return over the six months of 5% and the share price rose by 4.9%. The Company outperformed its benchmark, a blended index of the returns from the MSCI All Country World ex UK Small Cap Index (70%) and Numis UK Smaller Companies (excluding investment companies) Index (30%), which produced a total return of 3.1% over the period.
The Company beat the local small cap indices in the UK, Europe, Japan and Rest of World portfolios, with the UK and European portfolios benefiting from corporate activity. In the UK, six holdings received takeover offers from peers and the performance of a number of recently acquired stocks was encouraging, including Restore, the records management company, and the IPOs of Clipper Logistics, an online business fulfillment company, and OneSavings Bank, which serves the non-standard mortgage and buy to let lending markets. In Europe, three stocks were bid for including Orange's agreed takeover of Jazztel, a private equity bid for Exact, the Dutch based software provider, and offers for Nutreco, an animal nutrition and fish feed business.
The overweight stance in Japan also benefited performance with the Company's Japanese portfolio delivering a return of 15.9% in sterling terms, bouncing back from the weakness in the prior year. Fund holdings targeting Asian small caps were added to during the six months as valuations appeared attractive relative to other developed markets.
With income from the investment portfolio remaining solid, the Board has decided to pay an interim dividend of 2.65p per share, up 6.0% on the prior year's interim payment.
Commenting on the outlook for global smaller companies, Peter Ewins, fund manager of the Company, said:
"Financial markets have been more volatile of late as US quantitative easing has ended, while geopolitical tensions remain elevated. More helpfully, the threat of rising interest rates seems to have abated a little for now, especially given the marked weakness in the oil price. We remain of the view that our investment portfolio contains many companies with the inherent ability to become much larger businesses in the future."
The Company's £10m 11.5% debenture will be repaid at the end of 2014. In July, shareholders approved the issue of £40m of five year dated 3.5% Convertible Unsecured Loan Stock (CULS) to keep in place structural gearing at a fixed and lower cost. The cash proceeds from the CULS issue were rapidly deployed int o topping up holdings across the investment portfolio. The Company ended the period with effective gearing of
8.5%.
NAV total return of 5%, ahead of the benchmark return of 3.1%
Share price rose by 4.9%
Interim dividend of 2.65p per share to be paid on 30 January 2015
Performance driven by positive stock selection with the best returns coming in Japan
About F&C Global Smaller Companies: F&C Global Smaller Companies is the largest investment trust to offer investor access to a broadly spread global smaller companies portfolio.
The portfolio consists of individual smaller company investments within the US, UK and European markets, and fund holdings targeting smaller companies in Japan, Asia, Latin America and other smaller territories.
ENDSThe full results statement is attached.
Press enquiries: Richard Janes Director, Communications Richard.janes@fandc.comTel: +44 (0) 20 7011 4298 FTI Consulting fandc.sc@fticonsulting.comTel: +44 (0) 20 3727 1888 About F&C Investments
F&C is focused exclusively on managing money for its clients. It manages assets for a combination of insurance clients, institutional investors, intermediaries and private individuals. F&C invests across all major asset classes - equities, fixed income and property - and has specialist expertise in asset allocation, alternative investments, liability driven investments, multi-manager, private equity funds and Environmental Social and Governance (ESG) Investing. The F&C Group includes F&C REIT, a global real estate asset manager.
F&C has a strong footprint in the U.K. and the rest of Europe with assets under management of approximately £83 billion as at 30 June 2014. F&C has a rich heritage that dates back almost 150 years and can be traced back to the founding in 1868 of the Foreign & Colonial Investment Trust.
F&C is part of Bank of Montreal (BMO) Global Asset Management, a global investment manager with more than US$280 billion in assets under management as of 31 July 2014. BMO Global Asset Management is a part of BMO Financial Group (NYSE:BMO), a fully diversified financial services organisation with US$531 billion total assets and more than 45,000 employees as of April 30, 2014.
Disclaimer
Past performance should not be seen as an indication of future performance. The value of investments and income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested. The information, opinions estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time. F&C Group Companies may from time to time deal in investments mentioned herein on behalf of their clients. The source of information in all graphs is F&C unless otherwise stated. F&C Management Limited is authorised and regulated by the Financial Conduct Authority FRN: 119230 F&C Management Limited is a member of the F&C Group. The F&C Group is wholly owned by BMO Global Asset Management (Europe) Limited, which is itself a wholly owned subsidiary of the Bank of Montreal. F&C, the F&C logo, REO and the 'reo' logo are registered trademarks of F&C Asset Management plc. F&C Investments and the F&C Investments logo are trademarks of F&C Management Limited. © Copyright F&C Management Limited 2014. All Rights Reserved. Neither this document nor any part of it may be reproduced by any party whether by photocopying or storing in any medium by electronic means or otherwise without the prior approval of F&C Management Limited.
F&C Management Ltd accepts no liability in respect of the information or any views expressed herein which may be subject to change without notice at any time.
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