TIDMMTU
RNS Number : 5166U
Montanaro UK Smlr Cos Inv Tst PLC
24 November 2023
Montanaro UK Smaller Companies Investment Trust PLC ("MUSCIT" or
the "Company")
LEI: 213800UDDXXTXIF29P85
Half-Yearly Report for the six months to 30 September 2023
MUSCIT was launched in March 1995 and is a closed-ended
investment trust with shares premium listed on the London Stock
Exchange ("LSE").
Investment Objective
MUSCIT's investment objective is capital appreciation through
investing in small quoted companies listed on the LSE or traded on
the Alternative Investment Market ("AIM") and to outperform its
benchmark, the Numis Smaller Companies Index (excluding investment
companies) ("NSCI").
No unquoted investments are permitted.
Investment Policy
The Company seeks to achieve its objective and to manage risk by
investing in a diversified portfolio of quoted UK small companies.
At the time of initial investment, a potential investee company
must be profitable and no bigger than the largest constituent of
the NSCI, which represents the smallest 10% of the UK Stock Market
by value. At the start of 2023, this was any company below GBP1.62
billion in size.
In order to manage risk, the Manager limits any one holding to a
maximum of 4% of the Company's investments at the time of initial
investment. The portfolio weighting of each investment is closely
monitored to reflect the underlying liquidity of the particular
company. The Company's AIM exposure is also closely monitored by
the Board and is limited to 40% of total investments at the time of
investment, with Board approval required for exposure above
35%.
The Manager is focused on identifying high-quality, niche
companies operating in growth markets. This typically leads the
Manager to invest in companies that enjoy high barriers to entry,
pricing power, a sustainable competitive advantage and strong
management teams. The portfolio is constructed on a "bottom-up"
basis.
The Alternative Investment Fund Manager ("AIFM"), in
consultation with the Board, is responsible for determining the
gearing levels of the Company and has determined that the Company's
borrowings should be limited to a maximum of 25% of shareholders'
funds. Gearing is used to enhance returns when the timing is
considered appropriate.
The Company will not invest more than 10%, in aggregate, of the
value of its total assets at the time of investment in other
investment trusts or investment companies admitted to the Official
List of the UK Listing Authority.
All material changes to the policy will require shareholder and
FCA approval.
Highlights
for the six months to 30 September
2023
Results
As at 30 As at 31
September March
2023 2023
(unaudited) (audited) % Change
Ordinary share price 1 100.0p 105.0p -4.8
Net asset value ("NAV") per Ordinary
share 2 110.5p 114.5p -3.5
Discount to NAV 2 9.5% 8.3%
NSCI 3 7,431.8 7,589.3 -2.1
1 LSE closing price.
2 Including accrued revenue. 3
Capital only.
As at As at
30 September 31 March
2023 2023
(unaudited) (audited) % Change
Gross assets 1 GBP204.9m GBP211.6m -3.2
Net assets GBP184.9m GBP191.6m -3.5
Market capitalisation GBP167.4m GBP175.7m -4.7
Net gearing employed 2 7.6% 4.8%
Ongoing charges 3 1.0% 0.9%
Portfolio turnover 4 20.8% 22.2%
1 Net assets, adding back borrowings.
2 Total debt, net of cash and equivalents, as a percentage of
shareholders' funds.
3 Company's expenses (excluding interest payable) expressed as a
percentage of its average daily net assets, annualised at the half
year end date.
4 Calculated using the total purchases plus the sales proceeds
divided by two as a percentage of the average total investments at
fair value during the period.
Performance
as at 30 September
2023
Total Return Percentage 6 months 1 year 3 year 5 year 10 year Since
launch
Share Price* -2.7 11.0 4.2 2.3 40.9 834.1
NAV* -3.4 8.4 -5.7 -6.6 32.5 787.1
Benchmark** 0.4 11.8 22.2 6.0 61.4 503.9
* Returns have been adjusted for dividends paid.
** The Benchmark is a composite index with the NSCI used since 1
April 2013. Sources: AIC, Morningstar Direct, Numis, Montanaro
Asset Management Limited.
Capital Structure
As at 30 September 2023 and the date of this report, the Company
had 167,379,790 Ordinary shares of 2p each in issue (none of which
were held in treasury). See note 6 for further details. Holders of
Ordinary shares have unrestricted voting rights of one vote per
share at all general meetings of the Company.
Manager's Review
The optimism of the summer months was dashed towards the end of
the half-year period. Rising bond yields were accompanied by
similar style headwinds to those of 2022. UK SmallCap
underperformed LargeCap by c.2% in the six-month period to 30
September 2023, while SmallCap Growth extended its underperformance
vs Value by another 3% (taking the underperformance to a whopping
57% over three years). AIM, which had performed so poorly in 2022,
lost another 9% and has now underperformed Main List SmallCap for
12 consecutive quarters.
It is difficult to overemphasise how challenging the past few
years have been for our asset class. The Numis Smaller Companies
(excluding investment companies) Index has lagged the broad UK
market over the past 1, 3, 5 and 10 years. In other words, the
"SmallCap Effect", which has been a major tailwind to investors'
returns for the past 70 years, has been working in reverse for the
past decade. This is a rare event: the last time this happened was
in the late 1990s.
More recently, this underperformance has coincided with outflows
from the asset class reaching parity with that witnessed after the
Global Financial Crisis. According to the Investment Association,
cumulative outflows from UK SmallCap Funds amounted to GBP2.1
billion since January 2022, almost in line with the GBP2.3 billion
experienced in 2007-09. Several open-ended UK SmallCap Funds
decided to wind up this year while some industry veterans have
retired. In the investment trust space, wider discounts have
prompted some consolidation.
Valuations for the asset class have returned to levels last seen
during the Global Financial Crisis, which marked the start of the
recent Great Bull Market. At 13.9x, the 8-year Shiller P/E for UK
SmallCap is rapidly heading towards the all-time lows of August
1992 (10.9x), March 2003 (11.6x), February 2009 (11.8x) - which
would suggest 15% to 20% maximum downside from current levels.
While the past is of course not guaranteed to repeat, history tells
us that when valuations have previously reached current levels,
returns over the subsequent 5 years for SmallCap were between 100%
and 150%. Investors should perhaps take note.
Ironically, amidst all the doom and gloom, Smaller Companies -
quality ones in particular - have resurfaced on the radar of trade
buyers and private equity fund managers. M&A activity is
quietly making a comeback. MUSCIT lost Dechra Pharmaceuticals (at a
premium of 47%) to a bid by a consortium of investors before the
Summer and Ergomed received a bid (at a 30% premium) in September
2023. Although we never invest in a business in the hope that it
will be taken over, we would not be surprised to see more bids in
the portfolio over the coming months.
MUSCIT is home to quality companies with strong balance sheets
(54% have net cash) and a track record of solid earnings growth,
all at what we consider to be an attractive valuation. The
portfolio is currently trading on 15.6 forward earnings, below the
long-term average. Moreover, MUSCIT itself is trading on a discount
of 12.8% compared to a premium of 3% just under a year ago. If
inflation starts to recede, the potential for a significant
re-rating of both the portfolio and the share price is clearly
there.
Charles Montanaro, Montanaro Asset Management Limited
23 November 2023
Twenty
Largest
Holdings
as at 30
September
2023
% of % of
portfolio portfolio
30 September 31
Value Market cap 2023 March
Holding Sector GBP'000 GBPm 2023
------------- ------------------------ -------------------------- ------------ ------------- --------------------
4imprint Media 13,125 1,479 6.6 7.2
Games
Workshop Leisure Goods 10,570 3,476 5.3 4.8
Industrial
Support
Diploma Services 9,012 4,026 4.5 3.9
Software and
Computer
Kainos Services 8,618 1,438 4.3 3.8
Pharmaceuticals
and
Ergomed Biotechnology 8,052 685 4.0 3.1
Personal Care,
Drug and
Greggs Grocery Stores 7,956 2,503 4.0 4.5
Construction and
Marshalls Materials 7,584 639 3.8 3.5
Electronic and
Electrical
discoverIE Equipment 7,458 652 3.8 3.8
Industrial
Porvair Engineering 7,250 269 3.6 3.0
Industrial
Clarkson Transportation 6,838 839 3.4 3.9
Real Estate
Investment
Big Yellow Trusts 6,804 1,841 3.4 3.6
Industrial
Support
Boku Services 6,480 426 3.3 2.8
Financial
XPS Pensions Services 6,338 405 3.2 2.0
Cranswick Food Producers 6,216 1,914 3.1 2.6
Software and
Computer
Tracsis Services 6,000 240 3.0 3.5
Software and
Computer
Cerillion Services 5,895 386 3.0 2.6
Hilton Food Food Packaging 5,378 642 2.7 2.1
Industrial
Support
XP Power Services 5,310 466 2.7 2.0
Software and
Bytes Computer
Technology Services 4,988 1,195 2.5 -
Specialist
Sthree Recruitment 4,675 504 2.4 2.1
------------- ------------------------ -------------------------- ------------ ------------- --------------------
Twenty Largest Holdings 144,547 72.6
--------------------------------------- -------------------------- ------------ ------------- --------------------
Interim Management Report and Responsibility Statement
Interim Management Report
On 21 November 2023 the Company announced that Yuuichiro
Nakajima had been appointed to the Board, effective 1 January 2024.
The Board is delighted that Yuuichiro has agreed to join the Board
and looks forward to benefitting from his extensive experience,
knowledge and recent involvement in the investment trust
sector.
The other important events that have occurred during the period
under review and the key factors influencing the financial
statements are set out in the Manager's Review above.
Statement of Principal Risks and Uncertainties:
The principal risks facing the Company are unchanged since the
date of the Annual Report and Accounts for the year ended 31 March
2023 and continue to be as set out in that report on pages 13 to 16
and pages 59 to 61. These include, but are not limited to, discount
management, poor investment performance, risk oversight, gearing,
key man risk, operational risk, cyber risk, administrator,
Environmental, Social and Governance and breach of regulation,
including the impact of pandemics and other unforeseeable events on
the Company's business operations. The principal financial risks
include, but are not limited to, market risk, market price risk,
foreign currency risk, interest rate risk, liquidity risk, credit
risk and gearing levels. 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 remaining
six months of the Company's financial year.
Related party transactions:
Related party transactions are disclosed in note 9 below. There
have been no material changes in the related party transactions
described in the last annual report.
Going concern:
As stated in note 7 to the condensed financial statements, the
Directors are satisfied that the Company has sufficient resources
to continue in operation for the foreseeable future, a period of
not less than 12 months from the date of this report. Accordingly,
they continue to adopt the going concern basis in preparing the
condensed financial statements.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
-- The condensed set of financial statements which has not been
reviewed or audited by the external Auditor, has been prepared in
accordance with Financial Reporting Standard ("FRS") 104 'Interim
Financial Reporting' and gives a true and fair view of the assets,
liabilities, financial position and profit of the Company; and
-- This Half-Yearly Report includes a fair review of the information required by:
o DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
o DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first
six months of the current financial year and that have materially
affected the financial position or performance of the Company
during that period and any changes in the related party
transactions described in the last Annual Report that could do
so.
This Half-Yearly Report was approved by the Board and the above
Responsibility Statement was signed on its behalf by:
Arthur Copple Chairman
23 November 2023
Condensed Income Statement (unaudited)
for the six months to 30 September 2023
Six months to Six months to Year to
30 September 30 September 31 March
2023 2022 2023
GBP'000 GBP'000 (audited)
GBP'000
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Losses on
investments at
fair
value
through profit or
loss - (6,033) (6,033) - (49,841) (49,841) - (29,891) (29,891)
Dividends and
interest 4,325 - 4,325 2,909 - 2,909 4,986 - 4,986
Management fee (152) (457) (609) (144) (433) (577) (287) (858) (1,145)
Other expenses (341) - (341) (304) - (304) (643) - (643)
------- ------- ------- ------- -------- ------------ -------- -------------- -----------
Return/(loss)
before finance
costs and 3,832 (6,490) (2,658) 2,461 (50,274) (47,813) 4,056 (30,749) (26,693)
taxation
Interest payable
and similar
charges (69) (206) (275) (67) (201) (268) (134) (402) (536)
------- ------- ------- ------- -------- ------------ -------- -------------- -----------
Return/(loss)
before taxation 3,763 (6,696) (2,933) 2,394 (50,475) (48,081) 3,922 (31,151) (27,229)
Taxation (note 3) - - - - - - - - -
------- ------- ------- ------- -------- ------------ -------- -------------- -----------
Net return/(loss)
after taxation 3,763 (6,696) (2,933) 2,394 (50,475) (48,081) 3,922 (31,151) (27,229)
------- ------- ------- ------- -------- ------------ -------- -------------- -----------
Return/(loss) per
Ordinary share: 2.25p (4.00p) (1.75p) 1.43p (30.16p) (28.73p) 2.34p (18.61p) (16.27p)
------- ------- ------- ------- -------- ------------ -------- -------------- -----------
The total column of this statement is the Statement of Total
Comprehensive Income of the Company prepared in accordance with
Financial Reporting Standards ("FRS 102"). The supplementary
revenue return and capital return columns are prepared in
accordance with the Statement of Recommended Practice ("AIC
SORP").
All revenue and capital items in the above statement derive from
continuing operations.
There are no items of other comprehensive income and therefore
the net return after taxation is also the total comprehensive
income for the period. No operations were acquired or discontinued
in the period.
Condensed
Statement of
Changes
in Equity
for the six
months to 30
September
2023
Called-up Share Capital Distributable Total equity
share premium redemption Special Capital revenue shareholders'
capital account reserve reserve* reserve** reserve** funds
6 months to 30 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
September 2023
(unaudited)
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
As at 31 March
2023 3,348 19,307 1,362 4,642 162,418 572 191,649
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
Total
comprehensive
income:
Fair value
movement of
investments - - - - (6,033) - (6,033)
Costs
allocated to
capital - - - - (663) - (663)
Net revenue
for the
period - - - - - 3,763 3,763
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
- - - - (6,696) 3,763 (2,933)
Dividends paid
in the period
(note
4) - - - - (1,353) (2,463) (3,816)
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
As at 30
September
2023 3,348 19,307 1,362 4,642 154,369 1,872 184,900
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
6 months to
30 September
2022
(unaudited)
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
As at 31 March
2022 3,348 19,307 1,362 4,642 197,758 378 226,795
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
Total
comprehensive
income:
Fair value
movement of
investments - - - - (49,841) - (49,841)
Costs
allocated to
capital - - - - (634) - (634)
Net revenue
for the
period - - - - - 2,394 2,394
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
- - - - (50,475) 2,394 (48,081)
Dividends paid
in the period - - - - (2,408) (1,793) (4,201)
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
As at 30
September
2022 3,348 19,307 1,362 4,642 144,875 979 174,513
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
Year to 31
March 2023
(audited)
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
As at 31 March
2022 3,348 19,307 1,362 4,642 197,758 378 226,795
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
Total
comprehensive
income:
Fair value
movement of
investments - - - - (29,891) - (29,891)
Costs
allocated to
capital - - - - (1,260) - (1,260)
Net revenue
for the year - - - - - 3,922 3,922
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
- - - - (31,151) 3,922 (27,229)
Dividends paid
in the year
(note
4) - - - - (4,189) (3,728) (7,917)
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
As at 31 March
2023 3,348 19,307 1,362 4,642 162,418 572 191,649
---------------- --------- -------------- ------------------- --------------- -------------- ------------- ------------------
* The special reserve is used for the repurchase of the
Company's own shares.
** These reserves are distributable, excluding any unrealised
capital reserve.
Condensed Balance Sheet As at 30 As at 30 As at 31
(unaudited) September September March
as at 30 September 2023
2023 2022 2023
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
------------------------------ ----------------------------- ------------------------------ -----------------------
Fixed assets
Investments at fair value
(note
5) 199,033 182,557 200,777
------------------------------ ----------------------------- ------------------------------ -----------------------
Current assets
Debtors 520 348 352
Cash at bank 5,902 11,906 10,856
------------------------------ ----------------------------- ------------------------------ -----------------------
6,422 12,254 11,208
------------------------------ ----------------------------- ------------------------------ -----------------------
Creditors: amounts falling
due
within one year
Other creditors (555) (298) (336)
------------------------------ ----------------------------- ------------------------------ -----------------------
(555) (298) (336)
------------------------------ ----------------------------- ------------------------------ -----------------------
Net current assets 5,867 11,956 10,872
------------------------------ ----------------------------- ------------------------------ -----------------------
Total assets less current
liabilities 204,900 194,513 211,649
------------------------------ ----------------------------- ------------------------------ -----------------------
Creditors: amounts falling
due
after more than one year
Fixed rate term loan (20,000) (20,000) (20,000)
------------------------------ ----------------------------- ------------------------------ -----------------------
Net assets 184,900 174,513 191,649
------------------------------ ----------------------------- ------------------------------ -----------------------
Share capital and reserves
Called-up share capital 3,348 3,348 3,348
Share premium account 19,307 19,307 19,307
Capital redemption reserve 1,362 1,362 1,362
Special reserve 4,642 4,642 4,642
Capital reserve 154,369 144,875 162,418
Distributable revenue
reserve 1,872 979 572
------------------------------ ----------------------------- ------------------------------ -----------------------
Total equity shareholders'
funds 184,900 174,513 191,649
------------------------------ ----------------------------- ------------------------------ -----------------------
Net asset value per
Ordinary
share 110.47p 104.26p 114.50p
------------------------------ ----------------------------- ------------------------------ -----------------------
Number of Ordinary shares in
issue 167,379,790 167,379,790 167,379,790
------------------------------ ----------------------------- ------------------------------ -----------------------
Notes to the Financial Statements
As at 30 September 2023
1 Financial Information
The condensed financial statements for the six months ended 30
September 2023 comprise the statements together with the related
notes. The Company has adopted FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' in its
annual financial statements and the AIC SORP issued in November
2014 and updated in June 2022. The condensed financial statements
for the six months to 30 September 2023 have been prepared in
accordance with FRS 104 Interim Financial Reporting. The financial
statements have been prepared on the basis of the same accounting
policies as set out in the Company's Annual Report and Accounts for
the year ended 31 March 2023.
Following the adoption of FRS 102, the Company elected not to
present the statement of cash flows per section 7.1.A.
The financial information contained in this Half-Yearly Report
does not constitute full statutory accounts as defined in section
434 of the Companies Act 2006. The financial information for the
six months to 30 September 2023 and 30 September 2022 has not been
audited or reviewed by the Company's Auditor pursuant to the
Auditing Practices Board guidance on such reviews.
The information for the year ended 31 March 2023 has been
extracted from the latest published Annual Report and Accounts,
which have been filed with the Registrar of Companies. The Report
of the Auditors on those financial statements was unqualified and
did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
2 Management Expenses and Finance Costs
Management fees and finance costs are allocated 75% to the
capital reserve and 25% to the revenue account. Costs arising on
early settlement of debt are allocated 100% to capital, in
accordance with the requirements of the AIC SORP. All other
expenses are allocated in full to the revenue account on an
accruals basis.
3 Tax Credit/Charge on Ordinary Activities
The tax charge for the six months to 30 September 2023 comprises
irrecoverable withholding tax suffered of GBPnil (six months to 30
September 2022: GBPnil; year to 31 March 2023: GBPnil).
The corporation tax charge is based on an estimated effective
tax rate of 0% as investment gains are exempt from tax owing to the
Company's status as an investment trust and there is expected to be
an excess of management expenses over taxable income.
4 Dividends 6 months to Year to
30 September 31 March
2023 2023
GBP'000 GBP'000
(unaudited) (audited)
In respect of the previous period:
Paid
2022 fourth quarter dividend of 1.36p per
Ordinary share - 2,276
2023 fourth quarter dividend of 1.15p per
Ordinary share 1,925 -
------------------------------------------- -------------- ----------------
In respect of the period under review:
Paid
2023 first quarter dividend of 1.15p per
Ordinary share - 1,925
2023 second quarter dividend of 1.04p per
Ordinary share - 1,741
2023 third quarter dividend of 1.18p per
Ordinary share - 1,975
2024 first quarter dividend of 1.13p per
Ordinary share 1,891 -
------------------------------------------- -------------- ----------------
3,816 7,917
Declared
2023 fourth quarter dividend of 1.15p per
Ordinary share - 1,925
2024 second quarter dividend of 1.10p per
Ordinary share 1,841 -
------------------------------------------- -------------- ----------------
The quarters referred to in the table above relate to the
Company's financial year, which ends on 31 March.
5 Fair Value Hierarchy
For investments actively traded in organised financial markets,
fair value is generally determined by reference to quoted market
bid prices or closing prices for SETS (LSE's electronic trading
service) stocks sourced from the LSE on the balance sheet date,
without adjustment for transaction costs necessary to realise the
asset.
In accordance with FRS 102, the Company must disclose the fair
value hierarchy of financial instruments. The fair value hierarchy
consists of the following three levels:
-- level 1 - The unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the
measurement date;
-- level 2 - Inputs other than quoted prices included within
level 1 that are observable (i.e. developed using market data) for
the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
-- level 3 - Inputs are unobservable (i.e. for which market data
is unavailable) for the asset or liability.
The table below sets out fair value measurements of financial
assets in accordance with the FRS 102 fair value hierarchy
system:
30 September 2023 31 March 2023
(unaudited) (audited)
Level 1 Level Total Level 1 Level Total
2 2
---------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- ------- ------- ------- ------- -------
Equity investments 199,033 - 199,033 200,777 - 200,777
--------------------- ------- ------- ------- ------- ------- -------
199,033 - 199,033 200,777 - 200,777
--------------------- ------- ------- ------- ------- ------- -------
There were no level 2 or 3 investments held during the
period.
6 Share Capital
30 September 2023 31 March 2023
(unaudited) (audited)
Number of Number of
shares GBP'000 shares GBP'000
Allotted, called-up and fully
paid:
Ordinary shares of 2p each (31
March 2023: 2p each)
Balance at beginning of period 167,379,790 3,348 167,379,790 3,348
---------------------------------- ----------------- ------- --------------- -------
Balance at end of period 167,379,790 3,348 167,379,790 3,348
---------------------------------- ----------------- ------- --------------- -------
7 Going Concern
The Company has adequate financial resources to meet its
investment commitments and its day to day working capital
requirements, and as a consequence, the Directors believe that the
Company is well placed to manage its business risks. After making
appropriate enquiries and due consideration of the Company's cash
balances, the liquidity of the Company's investment portfolio and
the cost base of the Company, the Directors have a reasonable
expectation that the Company has adequate available financial
resources to continue in operational existence for the foreseeable
future and accordingly have concluded that it is appropriate to
continue to adopt the going concern basis in preparing the
Half-Yearly Report, consistent with previous years.
8 Segmental Reporting
The Company has one reportable segment, being investing
primarily in a portfolio of quoted UK small companies.
9 Related Party Transactions
Under the Listing Rules, the Manager is regarded as a related
party and deemed to be Key Management Personnel of the Company. The
relationship between the Company, its Directors and the Manager is
disclosed in the Directors' Report in the Annual Report and
Accounts for the year ended 31 March 2023.
The amount charged by the Manager during the period was
GBP609,000 (six months to 30 September 2022:
GBP577,000; year to 31 March 2023: GBP1,145,000). At 30
September 2023, the amount due to the Manager, included in
creditors, was GBP260,000. The management fee is 0.50% per annum of
the gross assets of the Company, plus GBP50,000 per annum in
respect of acting as the AIFM.
Directors' Emoluments
At 30 September 2023, the Board consisted of three Non-Executive
Directors. All Directors are considered to be independent of the
Manager. None of the Directors has a service contract with the
Company. The Chairman receives an annual fee of GBP41,500, the
Chairman of the Audit and Management Engagement Committee receives
an annual fee of GBP33,500 and all other Non-Executive Directors
receive GBP28,500 per annum.
At 30 September 2023, the amount outstanding in respect of
Directors' fees was GBP949 (31 March 2023:
GBPnil).
At 30 September 2023, the interests of the Directors in the
ordinary shares of the Company were as follows:
As at As at As at
------------------
23 November 2023 30 September 2023 31 March 2023
------------------
No. of shares No. of shares No. of shares
------------------ ---------------- ----------------- -------------
Arthur Copple 1 225,000 175,000 125,000
Catriona Hoare 9,039 9,039 9,039
Barbara Powley 2 12,875 12,719 12,449
------------------ ---------------- ----------------- -------------
1 Includes 25,000 shares held by Mrs Copple.
2 A further 156 shares were acquired by Barbara Powley on 10
November 2023 as a result of dividend reinvestment.
Montanaro UK Smaller Companies Investment Trust PLC Registered
in England and Wales No. 3004101
An investment company as defined under section 833 of the
Companies Act 2006
Directors
Arthur Copple (Chairman) Catriona Hoare
Barbara Powley (Chairman of the Audit & Management
Engagement Committee and Senior Independent Director)
Principal Advisers
AIFM and Investment Manager
MONTANARO ASSET MANAGEMENT LIMITED
53 Threadneedle Street London EC2R 8AR www.montanaro.co.uk
enquiries@montanaro.co.uk
Depositary
THE BANK OF NEW YORK MELLON (INTERNATIONAL) LIMITED
160 Queen Victoria Street London EC4V 4LA
Company Secretary and Administrator
JUNIPER PARTNERS LIMITED
28 Walker Street Edinburgh EH3 7HR Tel: 0131 378 0500
Cosec@junipartners.com
Custodian
BANK OF NEW YORK MELLON SA/NV
160 Queen Victoria Street London EC4V 4LA
Registered Office
53 Threadneedle Street
London EC2R 8AR
Banker
ING BANK N.V
60 London Wall London EC2M 5TQ
Registrar
LINK GROUP
Central Square,
29 Wellington Street Leeds LS1 4DL
Auditor
BDO LLP
55 Baker Street London W1U 7EU
Broker
CAVENDISH
One Bartholomew Close London EC1A 7BL
Lawyers
GOWLING WLG
4 More London Riverside London SE1 2AU
Sources of Further Information
Information on the Company, including this Half-Yearly Report is
available on the Company's website:
https://montanaro.co.uk/trust/montanaro-uk-smaller-companies-investment-trust/
Key Dates
February, May, August and November Quarterly dividends payable
31 March Company year end
----------------------------
June Annual results
----------------------------
July Annual General Meeting
----------------------------
November Half-yearly results
----------------------------
Frequency of NAV Publication
The Company's NAV is released to the LSE on a daily basis.
ISA Status
The Company's shares are fully eligible for inclusion in
ISAs.
AIC
The Company is a member of the AIC.
NMPI Status
The Company currently conducts its affairs so that the shares it
issues can be recommended by financial advisers to retail investors
in accordance with the FCA's rules in relation to non-mainstream
investment products. It is intended to continue to do so for the
foreseeable future. The Company's securities are excluded from the
FCA's restrictions which apply to non-mainstream investment
products because they are securities in a UK listed investment
trust.
Registrar enquiries
The register for the Ordinary Shares is maintained by Link
Group. In the event of queries regarding your holding, please
contact the registrar. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. We are open
between 09:00 - 17:30, Monday to Friday excluding public holidays
in England and Wales or alternatively at
shareholderenquiries@linkgroup.co.uk .
Changes of name must be notified in writing to the registrar,
whose address is: Link Group, Shareholder Services Department, The
Registry, 10th Floor, Central Square, 29 Wellington Street, Leeds
LS1 4DL. A change of address can be updated online via
www.signalshares.com .
Warning to Shareholders - Beware of Share Fraud
Fraudsters use persuasive and high-pressure tactics to lure
investors into scams. They may offer to sell shares that turn out
to be worthless or non-existent, or to buy shares at an inflated
price in return for an upfront payment. Investment scams are often
sophisticated and difficult to spot.
How to avoid investment scams:
-- Reject unexpected offers: Scammers usually cold call, but
contact can also come by email, post, word of mouth or at a
seminar. If you've been offered an investment out of the blue,
chances are it's a high risk investment or a scam.
-- Check the FCA Warning List: Use the FCA Warning List to check
the risks of a potential investment - you can also search to see if
the fi rm is known to be operating without FCA authorisation.
-- Get impartial advice: Get impartial advice before investing -
don't use an adviser from the fi rm that contacted you.
You can report a firm or scam to the Financial Conduct Authority
on 0800 111 6768 or through www.fca.org.uk/scamsmart
If you've lost money in a scam, contact Action Fraud on 0300 123
2040 or www.actionfraud.police.uk
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on this announcement (or
any other website) is incorporated into, or forms part of, this
announcement.
For further information, please contact: Montanaro Asset
Management Limited Tel: 020 7448 8600
enquiries@montanaro.co.uk
This information is provided by RNS, the news service of the
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END
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November 24, 2023 02:00 ET (07:00 GMT)
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