Aberforth Smaller Companies Trust PLC · LSE:ASL
Aberforth Smaller Companies Trust — Aberforth Split Level Income Trust — Shareholder Meeting (October 2023)
18 slides from Aberforth Smaller Companies Trust's shareholder meeting presentation, Oct 30, 2023
Slide 1: Aberforth Split Level Income Trust plc Annual General Meeting
Aberforth Partners LLP Aberforth Split Level Income Trust plc (“ASLIT”) Annual General Meeting 30 October 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 Financ
Slide 2: Financial highlights of year to 30 June 2023
Financial highlights of year to 30 June 2023 Net Asset Value Total Return +12.2% NSCI (XIC) Total Return +4.4% Ordinary Share Price Total Return +20.0% ─ Discount to NAV narrowed to 6.7% over the financial year Total dividends of 5.00p per Ordinary Share (+10% year-on-year) ─ An interim divi
Slide 3: Background
Background Confidence in the UK remains low ─ Well-aired political and economic challenges Growing concerns of recession ─ Elevated geopolitical tensions and persistent inflation ─ Central banks responding through tightening monetary conditions The frequency of weak trading updates continues t
Slide 4: Valuation update
Valuation update UK valuations – PE relative The UK 1.05 1.00 – widely shunned +1 Standard 0.95 deviation 0.90 PE relative 0.85 0.80 -1 Standard deviation 0.75 0.70 0.65 0.60 UK market v Rest of the World (source: Panmure Gordon) 20x Absolute historical PE: Aberforth portfolio Aberforth historic
Slide 5: Corporate activity
Corporate activity Acquirers continue to take advantage of UK valuations ─ Given starting valuations, the typical control premium may not suffice ─ Aberforth is engaging to help prevent opportunistic bids M&A activity in the NSCI (XIC) 30 2023 NSCI (XIC) ASLIT 25 27 Deals completed 9 4 20 Offers (
Slide 6: Resilient dividends
Resilient dividends 40 Portfolio categorised by holding's most recent dividend action 35 30 Number of companies 25 20 35 15 10 13 5 9 5 1 0 Cutters Nil payers No changers Increasers Returners Evidence of dividend cuts but overall picture positive ─ Supported by strong balance sheets ─ Revenue rese
Slide 7: Top holdings
Top 20 holdings Total Rank Company Activity portfolio (%) 1 Vesuvius Metal flow engineering 3.4 2 Rathbones Group Private client fund manager 3.3 3 Redde Northgate Van rental 3.2 4 Wilmington Business publishing & training 3.1 5 Wincanton Logistics 3.0 6 FirstGroup Bus & rail operator 3.0 7 Morgan A
Slide 8: Aberforth's differentiation
Aberforth’s differentiation ASLIT Investment Size Trusts Mid Cap ITs Unit Trusts ASLIT Style Aberforth Partners LLP Source: Aberforth Partners LLP; Morningstar. Data available as at 9 October 2023. 7
Slide 9: Conclusion
Conclusion Aberforth – a consistent approach to value investing for over 30 years UK – a fascinating two-way opportunity ─ Signs that the credibility gap – and valuation discount – can narrow ─ If not, there is a takeover premium to be harvested Portfolio – differentiated by value style, proce
Slide 10: ASLIT valuation statistics as at 30 September 2023
ASLIT valuation statistics as at 30 September 2023 Ordinary shares ZDP shares Redemption yields: Redemption yields: (p.a. returns to 30 June 2024) Capital Terminal Dividend growth p.a. growth p.a. NAV -10.0% -5.0% +0% +5% +10% Now 8.70% 119.5p to 127.25p at 30 June 2024 -10.0% 61.9p -6.2% -5.8% -5.3
Slide 11: 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 12: Glossary – Aberforth Funds
Glossary – Aberforth Funds IRRs: Internal Rate of Return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. Issue refers to the issue of units by the Trustee. Leverage is a measurement of the use of debt. LTCM: Long Term Capital Management. I
Slide 13: Glossary – Aberforth Funds
Glossary – Aberforth Funds Terminal NAV (Ordinary Share) is the projected NAV per Ordinary Share at the planned winding-up date at a stated rate of capital growth in the company’s investment portfolio after taking into account the final capital entitlement of the ZDP Shares, future estimated costs
Slide 14: Important information
Important information Aberforth Partners LLP 13
Slide 15: 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 16: 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 17: 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 18: 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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