TIDMFSC
RNS Number : 0926B
F&C U.S. Smaller Companies PLC
27 February 2014
Date: 27 February 2014
Contact: Robert Siddles
Jupiter Asset Management Limited
020 7412 0703
F&C US Smaller Companies PLC
Unaudited statement of results
for the half-year ended 31 December 2013
Summary of Unaudited Results
Attributable to equity shareholders 31 December 2013 30 June 2013 % Change
---------------------------------------------------------------------- ------------------ -------------- ----------
Net assets GBP160.94m GBP147.69m 9.0
---------------------------------------------------------------------- ------------------ -------------- ----------
Net asset value per share 669.63p 618.35p 8.3
---------------------------------------------------------------------- ------------------ -------------- ----------
Russell 2000 Index (sterling adjusted) 702.58 644.48 9.0
---------------------------------------------------------------------- ------------------ -------------- ----------
Share price 669.00p 644.00p 3.9
---------------------------------------------------------------------- ------------------ -------------- ----------
Net cash* 4.0% 4.7%
Increase in net asset value per share since inception on
8 March 1993 593.9
---------------------------------------------------------------------- ------------------ -------------- ----------
Increase since 8 March 1993 in the Russell 2000 Index (sterling
adjusted) 345.5
---------------------------------------------------------------------- ------------------ -------------- ----------
*Calculated as cash and investment debtors less overdrafts and
investment creditors at balance sheet value as a percentage of net
assets.
Chairman's Statement
I am pleased to be able to report another gain in net asset
value ("NAV") per share in the six months to 31st December
2013.
The US stock market gained strongly in the period but weakness
in the dollar reduced this significantly for sterling
investors.
Performance
The NAV per share of your Company rose 8.3% in the six month
period to 31 December 2013, compared with a gain of 9.0% in the
Company's benchmark, the sterling-adjusted Russell 2000 Index.
Although it is disappointing that NAV perfor-mance slightly
lagged that of the benchmark, the Company's conservative investment
style means that this can happen when the market rises very
rapidly, as was the case in the period. Over the long term,
however, the approach has produced good returns.
Manager
With effect from 21 February 2014 the Directors terminated the
management agreement with F&C Management Limited ("F&C")
and appointed Jupiter Asset management Limited ("Jupiter"), thereby
retaining the investment management services of Robert Siddles, who
had recently transferred his employment from F&C to Jupiter. We
will write to shareholders in April to convene a general meeting
for the purpose of seeking approval to change the Company's
name.
Savings Plan investors
Shareholders in F&C's savings plans have been sent letters
informing them of their options and details of Jupiter's own
Investment products are included in this half-year report. Jupiter
have offered, to those shareholders who elect to switch their ISA
or savings schemes to Jupiter, to meet the costs of doing so.
Market review
The Russell 2000 Index rose 19.1% in dollar terms. The dollar's
fall against sterling meant that this was reduced to 9.0% in
sterling terms, so investors suffered from the exchange rate
movement because the Company's assets are valued in sterling.
The market welcomed encouraging develop-ments from several
quarters: better US economic performance, a delay in the reduction
of quantitative easing, reduced tension in the Middle East, and a
political deal on the fiscal budget. In regard to the US economy,
after a sluggish period since mid 2012, business activity picked
up, as measured by the usually reliable Institute of Supply
Managers' Manufacturing indicator. In addition employment
conditions remained favourable according to Weekly Initial Jobless
Claims reports.
Smaller companies led the market: in dollar terms the 19.1% gain
in the Russell 2000 exceeded that of the Standard & Poors
Composite Index, which rose 15.1%; the technology-oriented NASDAQ
Composite Index, however, produced a stronger gain of 22.7%. This
outperformance by smaller companies reflects a more optimistic
assessment of the economy by investors who perceive smaller
companies as being more geared to changes in economic growth.
In the six month period all sectors of the market advanced led
by health care, materials and processing and producer durables. The
laggards were utilities, financials and consumer discretionary.
Portfolio review
There was good performance from stocks in the consumer staples
and utilities sectors. The specialised food distributor, The Chefs'
Warehouse, produced the best contribution along with the diversifed
corn-based agribusiness, The Andersons, and medical diagnostics
supplier, Alere. There was poor performance in financial services
although the largest negative contributions came from the satellite
equipment and services supplier, ViaSat, conference calling
provider, Premiere Global Services and gold miner Allied Nevada
Gold. The fund's holding of cash reduced performance by 0.9%.
New purchases were made of Covanta Holding (waste to energy) and
MSC Industrial Direct (industrial distributor) in producer
durables, Resolute Energy (oil and gas exploration and production)
in energy and Mercury Systems (defence electronics) in technology.
There were several sales of stocks where it was believed that
recovery had occurred, for example American Railcar (rail car
manufacturing) and Gulfmark Offshore (offshore supply boats) in
producer durables, Crawford & Co B (claims adjusting) in
financials, and Flowers Foods (baked goods) in consumer staples. In
addition, Allied Nevada Gold (gold miner) in materials and
processing, which had been disappointing, was sold. A substantial
reduction was made to the position in The Andersons, where the
stock had done very well.
Share issuance and discount
The price of the shares increased 3.9% to 669.0p over the
period. The discount to NAV per share was 0.1% at the end of the
period compared to a premium of 4.1% at 30 June 2013. As at 24
February 2014, the discount was 4.5%.
The Company did not buy back any shares, reflecting a share
price premium to the NAV for much of the period. Instead the
Company used its authority to issue 150,000 new shares to meet
demand from the market, bringing the total shares in issue to
24,034,135. This issuance raised GBP989,375 and the average premium
to NAV of the shares issued was 1.2%: each issue of shares during
the period was at a premium.
The Board will continue to apply its long standing policy of
buying back shares at appropriate times with a view to limiting the
discount in the longer term to around 10%.
Outlook
Whereas economic activity seems to be on an improving trend, the
stock market will need to adjust to a reduction of quantitative
easing in the coming year.
The Company takes a risk averse approach to investment which
should benefit shareholders over time.
Gordon Grender
27 February 2014
Directors' Statement of Principal Risks and Uncertainties
The Company's assets consist mainly of listed equities and its
principal risks are therefore market related.
Other key risks faced by the Company relate to investment
strategy, currency, gearing, investment management resources,
regulation, financial control and counterparties (including
custodian default). These risks, and the way in which they are
managed, are described in more detail under the heading "Principal
risks and their management" within the Directors' Report and
Business Review contained within the Company's annual report for
the year ended 30 June 2013. The Company's principal risks and
uncertainties have not changed materially since the date of that
report and are not expected to change materially for the remainder
of the Company's financial year.
Directors' Statement of Responsibilities in Respect of the
Financial Statements
In accordance with Chapter 4 of the Disclosure and Transparency
Rules the Directors confirm, in respect of the report and accounts
for the half-year ended 31 December 2013 of which this statement is
an extract, 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 return of the Company;
-- the 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 Risks and Uncertainties
shown above is a fair review of the principal risks and
uncertainties for the remainder of the financial year;
-- with effect from 21 February 2014, the Company has appointed
Jupiter Asset Management (Jupiter) as its Manager. Details of the
fee arrangements with Jupiter, and termination arrangements with
the previous Manager, F&C Management Limited, are set out in
the notes on the Accounts. Except for the above there has been no
change in related party relationships and no significant changes to
related party transactions since 30 June 2013; and
-- in light of the controls and monitoring processes that are in
place, the Company has adequate resources and arrangements to
continue operating within its stated objective and policy for the
foreseeable future. Accordingly, the accounts continue to be drawn
up on the basis that the Company is a going concern.
Signed on behalf of the Board
Gordon Grender
Chairman
27 February 2014
Unaudited Condensed Income Statement
for the half-year ended 31 December 2013 2012
Revenue Capital Total Revenue Capital Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------------------ --------- --------- --------- --------- --------- ---------
Gains on investments - 13,355 13,355 - 9,473 9,473
Foreign exchange losses (1) (677) (678) (1) (166) (167)
Income 404 - 404 548 - 548
Management fee (621) - (621) (431) (58) (489)
Other expenses (135) (2) (137) (171) (2) (173)
------------------------------------------------ --------- --------- --------- --------- --------- ---------
Net return on ordinary activities before
taxation (353) 12,676 12,323 (55) 9,247 9,192
Taxation on ordinary activities (60) - (60) (82) - (82)
------------------------------------------------ --------- --------- --------- --------- --------- ---------
Net return attributable to equity shareholders (413) 12,676 12,263 (137) 9,247 9,110
------------------------------------------------ --------- --------- --------- --------- --------- ---------
Return per share - pence (1.73) 53.01 51.28 (0.63) 42.68 42.05
------------------------------------------------ --------- --------- --------- --------- --------- ---------
The total column is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from
continuing operations.
A statement of total recognised gains and losses is not required
as all gains and losses of the Company have been reflected in the
above statement.
Unaudited Condensed Reconciliation of Movements in Shareholders'
Funds
Called-up
Share Non- Capital Total
share premium distributable redemption Capital Revenue shareholders'
Half-year ended capital account reserve reserve reserves reserve funds
31 December 2013 GBP'000s GBP'000s GBP'000 GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------- ---------- --------- -------------- ----------- --------- --------- --------------
Balance at 30 June 2013 5,971 18,598 841 8,175 116,793 (2,690) 147,688
Movements during the
half-year ended
31 December 2013
Shares issued by the
Company 38 951 - - - - 989
Net return attributable to
equity shareholders - - - - 12,676 (413) 12,263
---------------------------- ---------- --------- -------------- ----------- --------- --------- --------------
Balance at 31 December 2013 6,009 19,549 841 8,175 129,469 (3,103) 160,940
---------------------------- ---------- --------- -------------- ----------- --------- --------- --------------
Half-year ended
31 December 2012
------------------------------ ------ ------ ---- ------ -------- -------- --------
Balance at 30 June 2012 5,298 4,660 841 8,175 82,418 (2,144) 99,248
Movements during the
half-year ended
31 December 2012
Shares issued by the Company 261 4,917 - - - - 5,178
Net return attributable to
equity shareholders - - - - 9,247 (137) 9,110
------------------------------ ------ ------ ---- ------ -------- -------- --------
Balance at 31 December 2012 5,559 9,577 841 8,175 91,665 (2,281) 113,536
------------------------------ ------ ------ ---- ------ -------- -------- --------
Year ended 30 June 2013
------------------------------------ ------ ------- ---- ------ --------- -------- ---------
Balance at 30 June 2012 5,298 4,660 841 8,175 82,418 (2,144) 99,248
Movements during the year
ended 30 June 2013
Shares issued by the Company 673 13,938 - - - - 14,611
Net return attributable to equity
shareholders - - - - 34,375 (546) 33,829
------------------------------------ ------ ------- ---- ------ --------- -------- ---------
Balance at 30 June 2013 5,971 18,598 841 8,175 116,793 (2,690) 147,688
------------------------------------ ------ ------- ---- ------ --------- -------- ---------
Unaudited Condensed Balance Sheet
31 Dec 2013 31 Dec 2012 30 June 2013
GBP'000s GBP'000s GBP'000s
------------------------------------------------ ------------- ------------- --------------
Fixed assets
Listed investments 154,719 111,786 141,061
------------------------------------------------ ------------- ------------- --------------
Current assets
Debtors 113 47 793
Cash at bank and short-term deposits 6,463 2,068 6,773
------------------------------------------------ ------------- ------------- --------------
6,576 2,115 7,566
Creditors: amounts falling due within one year (355) (365) (939)
------------------------------------------------ ------------- ------------- --------------
Net current assets 6,221 1,750 6,627
------------------------------------------------ ------------- ------------- --------------
Net assets 160,940 113,536 147,688
------------------------------------------------ ------------- ------------- --------------
Capital and reserves
Called-up share capital 6,009 5,559 5,971
Share premium account 19,549 9,577 18,598
Non-distributable reserve 841 841 841
Capital redemption reserve 8,175 8,175 8,175
Capital reserves 129,469 91,665 116,793
Revenue reserve (3,103) (2,281) (2,690)
------------------------------------------------ ------------- ------------- --------------
Total shareholders' funds 160,940 113,536 147,688
------------------------------------------------ ------------- ------------- --------------
Net asset value per share - pence 669.63 510.57 618.35
------------------------------------------------ ------------- ------------- --------------
Unaudited Condensed Cash Flow Statement
Half-year ended Half-year ended
31 Dec 2013 31 Dec 2012
GBP'000s GBP'000s
---------------------------------------------------------- ---------------- ----------------
Net cash outflow from operating activities (466) (72)
Net cash outflow from financial investment (154) (8,546)
Net cash outflow before use of liquid resources
and financing (620) (8,618)
Issue of ordinary shares 989 5,178
---------------------------------------------------------- ---------------- ----------------
Increase/(decrease) in cash and short-term deposits 369 (3,440)
---------------------------------------------------------- ---------------- ----------------
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash and short-term deposits 369 (3,440)
Foreign exchange movement (679) (167)
---------------------------------------------------------- ---------------- ----------------
Movement in net funds (310) (3,607)
Net funds at the beginning of the period 6,773 5,675
---------------------------------------------------------- ---------------- ----------------
Net funds at the end of the period 6,463 2,068
---------------------------------------------------------- ---------------- ----------------
Represented by:
Cash at bank and short-term deposits 6,463 2,068
---------------------------------------------------------- ---------------- ----------------
Notes
1 Accounting policies
These financial statements have been prepared on the basis of
the accounting policies set out in the Company's financial
statements at 30 June 2013. These accounting policies are expected
to be followed throughout the year ending 30 June 2014.
2 Dividend
The Directors do not propose to pay an interim dividend.
3 Return per share
Return per share attributable to shareholders reflects the
overall performance of the Company in the period. Net revenue
recognised in the first six months is not indicative of the total
likely to be received in the full accounting year.
Half-year ended Half-year ended
31 Dec 2013 31 Dec 2012
GBP'000s GBP'000s
-------------------------------------------- ---------------- ----------------
Revenue return (413) (137)
Capital return 12,676 9,247
-------------------------------------------- ---------------- ----------------
Total return 12,263 9,110
-------------------------------------------- ---------------- ----------------
Weighted average number of shares in issue 23,914,162 21,665,695
-------------------------------------------- ---------------- ----------------
4 Results
The results for the half-year ended 31 December 2013 and 31
December 2012, which have not been audited or reviewed by auditors
pursuant to the Auditing Practices Board guidance on the 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 June 2013; the
independent auditors' report thereon was unqualified and did not
contain a statement under Section 498 of the Companies Act 2006.
The abridged financial statements shown above for the year ended 30
June 2013 are an extract from those accounts.
5 Report and accounts
The report and accounts for the half-year ended 31 December 2013
will be posted to shareholders and made available on the website
www.jupiteronline.com shortly. Copies may also be obtained from the
Company's registered office, 1 Grosvenor Place, London, SW1X
7JJ.
By order of the Board
Jupiter Asset Management Limited, Secretary
1 Grosvenor Place, London, SW1X 7JJ
27 February 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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