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The Company currently conducts its affairs so that securities issued by Dunedin Smaller Companies Investment Trust PLC can be recommended by financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream Pooled investment products (NMPIs) and intends 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 an investment trust.
At close 22-Apr-2014Ord
|Net Dividend Yield||2.40%|
* Debt at market value
** Debt at par
Source: Morningstar, NAV = Net Asset Value, excluding income.
The value of investments and the income from them may go down as well as up and investors may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Please refer to the Key Facts documents contained in the ISA/Share Plan Brochure & Application form for general and specific investment risks attaching to the individual trusts.Read the detailed Risk Warning
Past performance is not a guide to future results.
See latest monthly factsheet below for performance history.
40 Princes Street,
Registered in Scotland as an Investment Company Number 14692
The objective of Dunedin Smaller Companies Investment Trust PLC is to achieve long term growth from a portfolio of smaller companies in the United Kingdom.
In this webcast Ed Beal gives an update on a wide range of subjects including performance, a sector breakdown, the twenty largest investments and an outlook for the Trust.
After a weak start to the year, markets rebounded during February with the FTSE All-Share delivering a total return of 5.2%. Smaller companies lagged this, showing gains of 2.9%. Recovery in developed markets continued with the US posting a fourth quarter GDP reading of 2.4%. Although this was a marked slowdown from the 3.2% witnessed in the previous quarter it still suggested an economy that was settling into a period of reasonable growth. Inflation continued to fall in the UK, declining to 1.9%. This was the first time that it had been below the Bank of England’s upper target since late 2009. One of the stand out features of a month that saw such strong gains was the weakness of the banks with many of them recording disappointing results.
During the month we introduced Manx Telecom. The business has a dominant position as the supplier of fixed and mobile communication services on the Isle of Man. The company also has two areas of growth in the form of data centres on the island and off island services. To our mind it is the relative dullness of the business that is attractive. With such a limited size of opportunity, competition is unlikely to be tempted to attack their core market. This means that the business is a generator of stable cash flows that find their way back to investors in the form of a 6.1% yield whilst also having the resources to fund its growth aspirations. The holding was financed through the top-slice of companies whose shares had performed strongly, these included Wilmington, RPC, XP power and John Menzies.
We have commented for some time that companies will need to deliver on earnings expectations if the current relatively high valuation multiples are to be justified. We are now in the midst of reporting season and by and large, in the context of the holdings in the portfolio this is happening. However, sterling has strengthened against many other currencies and the impact of this is being felt in analysts’ forecasts. One of the attractions of smaller company investing is that these businesses have become increasingly internationalised. Indeed we estimate that around 55% of the revenues generated by our holdings come from overseas. This of course means that FX impacts are no longer the preserve of large cap companies. 2013 results have not been materially impacted due to the timing of currency moves but if rates stay where they are 2014 will experience a much bigger impact. Consequently profit forecasts are typically being downgraded, even though underlying trading is broadly fine. One measure of this is the revisions monitor which for the FTSE SmallCap Index currently stands at 45%. That means that more than half of all analysts’ adjustments to profit forecasts are downwards. Investors are being quite forgiving of these cuts but it does mean that multiples are expanding further. We remain focused on identifying businesses that we believe have sufficiently strong business models to deliver growth in profits over the medium term.
Source: Monthly Factsheet Aberdeen Asset Managers Limited