Aberforth Smaller Companies Trust PLC · LSE:ASL
Aberforth Smaller Companies Trust — Shareholder Meeting (March 2023)
21 slides from Aberforth Smaller Companies Trust's shareholder meeting presentation, Mar 2, 2023
Slide 1: AGM Investor Presentation March 2023
Aberforth Partners LLP Aberforth Smaller Companies Trust plc (“ASCoT”) AGM Investor Presentation March 2023 14 Melville Street - Edinburgh EH3 7NS Tel 0131 220 0733 - Fax 0131 220 0735 enquiries@aberforth.co.uk - www.aberforth.co.uk Aberforth Partners LLP is authorised and regulated by the Financial
Slide 2: 2022 financial highlights
2022 financial highlights Net Asset Value Total Return -10.4% NSCI (XIC) Total Return -17.9% Ordinary Share Price Total Return -7.3% Total dividends of 47.3p Clients ─ Ordinary dividend of 39.0p (+10.8% year-on-year) ─ Special dividend of 8.3p Aberforth Partners LLP For more details see www.
Slide 3: ASCoT's record of dividend growth
ASCoT’s record of dividend growth ASCoT dividend per share (p) 50 ASCoT’s dividend per share record 45 - Inception to 2022 +7% p.a. 8.30 - Financial crisis to 2022 +5% p.a. 40 39.0 7.75 35 4.00 6.70 35.2 33.3 Dividend (p) 30 32.0 2.75 30.3 2.75 28.8 25 27.4 26.0 24.8 23.5 20 22.3 20.8 19.0 19.0 19.0
Slide 4: 2022 context
2022 context A challenging year for stockmarkets ─ The war in Ukraine exacerbated supply chain and inflationary pressures ─ The risk of a recession increased following central bank tightening ─ The plight of the UK was further complicated by political upheaval The portfolio was not immune but ou
Slide 5: A busy year for M&A
A busy year for M&A M&A activity in the NSCI (XIC) 30 25 27 20 19 18 5 15 17 14 10 12 12 12 14 5 5 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Deals completed Offers 31 Dec 22 Nineteen M&A deals announced within the NSCI (XIC) in 2022 Six of the portfolio’s holdings received takeover bid
Slide 6: Value was a relative tailwind in 2022
Value was a relative tailwind in 2022 Value component of NSCI (XIC) against NSCI (XIC) 19% 870 17% 15% 670 13% 11% Value component of NSCI (XIC) vs NSCI (XIC) 9% 470 7% 5% 3% 270 1% -1% 70 -3% -5% -7% -130 May-67 May-76 May-85 May-94 May-03 May-12 May-21 Feb-65 Feb-74 Feb-83 Feb-92 Feb-01 Feb-10 Feb
Slide 7: Opportunity from aversion to UK equities
Opportunity from aversion to UK equities Mismanagement of common issues rendered the UK a special situation ─ A large open economy with laws and a governance regime supporting asset ownership ─ The UK’s debt to GDP ratio is lower than that of most major economies ─ A free floating currency can tak
Slide 8: Portfolio's historical PE remains unusually low
Portfolio’s historical PE remains unusually low Absolute historical PE: Aberforth portfolio 20x 18x 16x +1 Standard deviation 14x PE x 12x 10x -1 Standard deviation 8x 6x 4x ASCoT PE Historical price-to-earnings (PE) multiple at 31 December of 8.1x The potential effect of recession ─ Earnings de
Slide 9: Outlook
Outlook Portfolio – well positioned ─ Balance sheets are unusually strong and valuations are attractive ─ Plentiful opportunities for the value investor, particularly in the UK ASCoT – advantages of its closed end structure and ability to gear ─ Tactical gearing remains in place ─ The Board reta
Slide 10: Top 20 holdings
Top 20 holdings Total Rank Company Activity portfolio (%) 1 FirstGroup Bus & rail operator 3.3 2 Redde Northgate Van rental 3.2 3 Wilmington Business publishing & training 2.8 4 Morgan Advanced Materials Manufacture of carbon & ceramic materials 2.8 5 Centamin Gold miner 2.5 6 Rathbones Group Privat
Slide 11: Appendix
Appendix Aberforth Partners LLP 10
Slide 12: Aberforth Partners
Aberforth Partners A consistent investment approach deployed by a well resourced team ─ Small UK quoted companies with a value investment philosophy ─ Fundamental analysis backed up by stewardship and engagement Prioritising our existing clients ─ Ceiling on the business: 1.5% of the NSCI (XIC)’
Slide 13: ASCoT is differentiated by its value style
ASCoT is differentiated by its value style The pricing basis of financial markets has changed as interest rates rise ─ But style positioning among peers has changed little *Aberforth Investment Trusts Mid Cap ITs Unit Trusts Size ASCoT* Style Aberforth Partners LLP *Aberforth “Standard Value” port
Slide 14: ESG integration
ESG integration 1. Early adopters of the FRC Stewardship Code 2020 ─ Confirmed again as a signatory in 2022 2. We launched our enhanced ESG database module in 2022 3. Our framework analyses company specific risks and opportunities against a sector determined risk score ─ Environmental: Climate chang
Slide 15: Glossary – Aberforth Funds
Glossary – Aberforth Funds Aberforth’s investment philosophy and putting it into practice is explained further at www.aberforth.co.uk/about-Aberforth/ Aberforth Standard Value refers to The Aberforth Smaller Companies Trust plc, Aberforth’s longest standing client. Accumulation Units: units no
Slide 16: Glossary – Aberforth Funds
Glossary – Aberforth Funds NSCI (XIC): The Numis Smaller Companies Index (excluding Investment Companies). PE: The price-earnings ratio (P/E ratio). Redemption Yield (Ordinary Share) is the annualised rate at which projected future income and capital cash flows (based on assumed future capital
Slide 17: Important information
Important information Aberforth Partners LLP 16
Slide 18: Important information
Important information Throughout this presentation references to: SMALL COMPANIES mean constituents of the Numis Smaller Companies Index (Excluding Investment Companies) which are referred to as “NSCI (XIC)”; LARGE COMPANIES mean constituents of the FTSE All-Share Index which are referred to as “F
Slide 19: Important information
Important information The information contained in this presentation does not constitute an offer of, or an invitation to apply for, securities in any jurisdiction where such an offer or invitation is unlawful or in which the person making such offer is not qualified to do so or to whom it is unla
Slide 20: Risk warnings
Risk warnings Capital may be at risk as the value of investments may go down as well as up and is not guaranteed; therefore investors may not get back the amount originally invested. Past performance is not a guide to future performance, nor a reliable indicator of future results or performance.
Slide 21: Risk warnings
Risk warnings An investment trust may only pay dividends to the extent that it has distributable profits available for that purpose. A reduction in the income from an investment trust's portfolio could adversely affect the yield, if any, on its shares. Investment trusts may borrow money in order
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