Aberforth Smaller Companies Trust PLC · LSE:ASL
Aberforth Smaller Companies Trust — Aberforth Geared Value & Income Trust — Investor Presentation (June 2025)
35 slides from Aberforth Smaller Companies Trust's investor presentation, June 2025
Slide 1: Presentation to AGVIT Investors
Aberforth Partners LLP Presentation to AGVIT Investors June 2025 This presentation is intended for investment professionals. It does not represent investment advice. 14 Melville Street - Edinburgh EH3 7NS Tel 0131 220 0733 enquiries@aberforth.co.uk - www.aberforth.co.uk Aberforth Partners LLP is aut
Slide 2: AGVIT financial summary
AGVIT financial summary ▪ Capital performance – a weak period since launch 31-May-25 31-Dec-24 Launch* Ordinary Share Price 83.5p 83.0p 100.0p Ordinary NAV per Share 95.6p 95.9p 98.0p Discount/(Premium) 12.6% 13.4% n/a ZDP Share Price 107.5p 106.5p 100.0p ZDP NAV per Share 105.6p 102.6p 100.0p Disco
Slide 3: Total returns to 31 May 2025
Total returns to 31 May 2025 Total Return % YTD Since Launch* FTSE All-Share 8.6 10.6 DNSCI (XIC) 3.9 7.8 AGVIT Total Assets 1.8 1.1 * one-off transaction costs excluded ▪ Ungeared portfolio performance ─ Domestic facing companies affected by the Budget ─ Overseas facing companies affected by tariff
Slide 4: Ordinary shares – attractive income
Ordinary shares – attractive income Dividend experience since launch ▪ Good recent portfolio dividend experience New payers ─ >50% of dividends better than expected As expected ▪ Forecast year Ahead ─ Portfolio yield: 5.4% Below ─ Dividend cover: 1.8x ▪ Economic uncertainty mitigated by strong balan
Slide 5: Small companies against large year-to-date
Small companies against large year-to-date ▪ The DNSCI (XIC) sharply under-performed the FTSE All-Share ─ Effects of the Budget on domestically oriented small companies ─ Large companies helped by their sector exposures, notably the banks ─ Large companies first to benefit from US reallocations? ▪ T
Slide 6: Size also affected AGVIT relative to the DNSCI (XIC)
Size also affected AGVIT relative to the DNSCI (XIC) Non FTSE 250 exposure 125 80% 120 “Smaller smalls” under-performed Relative total return performance (rebased to 100) 70% 115 “larger smalls” by 7% year-to-date 60% 110 50% 105 100 40% AGVIT has a high exposure to “smaller 95 30% small” companies
Slide 7: Winners and losers – year-to-date
Winners and losers – year-to-date 10 Best Winners Total return Contribution 10 Worst Losers Total return Contribution Rank Company (%) (bp) Rank Company (%) (bp) 1 Bakkavor Group 47 122 1 Morgan Advanced Materials -19 -70 2 Wickes Group 52 65 2 Vesuvius -11 -62 3 International Personal Finance 32 60
Slide 8: Purchases and sales – year-to-date
Purchases and sales – year-to-date Top 10 Purchases Top 10 Sales Rank Company £m Rank Company £m 2 Pets at Home Group 2.0 1 TI Fluid Systems 3.7 2 Brooks Macdonald Group 1.9 2 XPS Pensions Group 2.9 3 Bodycote 0.8 3 RHI Magnesita 1.3 4 STV Group 0.5 4 Dowlais Group 0.7 5 Ashmore Group 0.3 5 Close Br
Slide 9: Tariff uncertainty / UK opportunity
Tariff uncertainty / UK opportunity Split by revenue Portfolio DNSCI (XIC) UK 59% 51% ▪ Small companies and AGVIT: US 11% 12% ─ High exposures to the UK economy Europe 14% 16% ─ Low exposures to the US Rest of World 16% 21% ▪ Too early to be definitive about the impact of tariffs ─ Our engagement wi
Slide 10: Attractive valuations
Attractive valuations Number of EV/EBITA 2024 2025 2026 stocks AGVIT 67 8.0x 7.7x 6.7x Tracked Universe 232 10.9x 10.1x 8.9x "Smaller small" companies* 132 8.8x 8.2x 7.0x "Larger small" companies** 100 11.7x 10.9x 9.7x Stocks > 60% revenue generated UK*** 107 11.4x 10.6x 9.5x Stocks > 60% revenue ge
Slide 11: How to make money from the portfolio
How to make money from the portfolio Demand Recovery Discount to Book Growth and Value Controversy / Opportunity Portfolio weight 25% Portfolio weight 24% Portfolio weight 40% Portfolio weight 10% Number of stocks 16 Number of stocks 19 Number of stocks 21 Number of stocks 11 Total Return YTD +5.9%
Slide 12: The importance of engagement
The importance of engagement ▪ Aberforth’s approach to stewardship suited to current market conditions ─ Willingness to take large and influential stakes ─ Discreet engagement, honed over three decades ─ Supportive and long term, subject to our valuation discipline ▪ Significant stakes give influenc
Slide 13: M&A continues to expose the low valuations
M&A continues to expose the low valuations Completed or new offers within the DNSCI (XIC) since 31/12/2021 120% Seraphine Group (206%) Pendragon Wincanton Micro Focus 100% John Menzies Spirent Communications RPS Group Kin and Carta 80% Innovaderma Devro Restaurant Group Offer price premium Hyve Grou
Slide 14: The triple discount – still there
The triple discount – still there Historical PEs PE relatives 17.4 World 15.8 1. The UK vs. RoW 34Y average 0.96 16.1 Today 0.92 UK 15.3 2. Small caps vs. UK 34Y average 0.89 Small cap* 13.5 Today 0.76 12.2 *London Business School series till 2013, then Tracked Universe 3. Aberforth vs. Small caps 3
Slide 15: Starting valuations matter
Starting valuations matter ASCoT's starting historical PE against subsequent 5 year NAV total return CAGR, from 31 March 1991 30% 25% 20% 5 year CAGR (%) 15% ASCoT 5 year trailing CAGR 10% to 31 Mar 2025 5% AGVIT P/E at 31 May 2025: 10.3x 0% -5% 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x 13.0x 14.0x
Slide 16: Illustrative returns
Illustrative returns Ordinary shares ZDP shares Redemption yields: Redemption yields: (p.a. returns to 30 June 2031) Capital Terminal Dividend growth p.a. growth p.a. NAV 0.0% 2.5% 5.0% 7.0% +10% Now 6.82% 107.5p to 160.58p at 30 June 2031 (10.0)% 5.5p (17.4)% (16.0)% (14.5)% (13.2)% (11.3)% (5.0)%
Slide 17: Conclusion
Conclusion ▪ Tariff uncertainty lingers ─ Confidence that small companies will again prove their resilience ─ Portfolio exposure to first order effects is relatively low ▪ Much of the risk already reflected in valuations ─ Upside from the portfolio very attractive ─ Structural gearing provided by th
Slide 18: Appendix
Appendix Aberforth Partners LLP 17
Slide 19: Aberforth Partners
Aberforth Partners ▪ Partnership owned entirely by six working partners ▪ Consistent approach over 34 years ─ Value investment ─ Small UK quoted companies ─ Collegiate investment process backed up by engagement ▪ Focus on existing clients ─ Assets under management: £2bn at 31 May 2025 across four cl
Slide 20: Top 20 holdings
Top 20 holdings Total Rank Company Activity portfolio (%) 1 Vesuvius Metal flow engineering 3.8 2 Bakkavor Group Food manufacturer 3.4 3 Rathbones Group Wealth Management 2.8 4 Smiths News Newspaper distribution 2.7 5 MONY Group Price comparison websites 2.7 6 Quilter Wealth Management 2.5 7 FirstGr
Slide 21: Sector exposure
Sector exposure DNSCI (XIC) AGVIT Relative Sector Significant holdings (>1.5% portfolio weight) weight weight weight Technology 6.8% 6.0% -0.8% NCC Group, MONY Group Telecommunications 1.5% 0.0% -1.5% Health Care 3.4% 0.0% -3.4% International Personal Finance, Sabre Insurance Group, Financials 17.6%
Slide 22: Balance sheets – smaller smalls and larger smalls
Balance sheets – smaller smalls and larger smalls 2024 Net debt/EBITDA of the Portfolio by size 60% 50% 40% 30% 20% 10% 0% Net cash Net debt/EBITDA < 2x Net debt/EBITDA > 2x Other* Portfolio Smaller smalls Portfolio Larger smalls *loss-makers and lenders ▪ Similar balance sheet strength Aberforth Pa
Slide 23: How to make money from the portfolio (detail)
How to make money from the portfolio (detail) Demand Recovery 25% Discount to Book 24% Growth and Value 40% Controversy / Opportunity 10% Total Return +5.9% Total Return +7.2% Total Return +6.2% Total Return -4.9% Upside 56% Upside 59% Upside 64% Upside 79% EV/EBITA 2026 7.0x EV/EBITA 2026 7.6x EV/E
Slide 24: Value style and size
Value style and size Value component of DNSCI (XIC) against DNSCI (XIC) Value style 19% 870 ▪ Value premium within the DNSCI (XIC) since 17% 770 15% ─ The index’s inception in 1955 +3.2% p.a. Value component of DNSCI (XIC) vs DNSCI (XIC) 670 13% 11% ─ Aberforth’s inception in 1990 +2.0% p.a. 570 9%
Slide 25: Aberforth’s differentiation
Aberforth’s differentiation ASCoT & AFUND AGVIT Size Investment Trusts Mid Cap ITs Unit Trusts AGVIT ASCoT & AFUND Style Aberforth Partners LLP Source: Aberforth Partners LLP; Morningstar. Data available as at 5 June 2025. 24
Slide 26: 2025 growth stocks
2025 growth stocks Aberforth Growth stocks at 31 December 2024 4imprint Group Integrafin Holdings AJ Bell JTC Alfa Financial Software Holdings Kainos Group Alphawave IP Group Moonpig Group AO World Oxford Biomedica Applied Nutrition Oxford Instruments ASOS Oxford Nanopore Technologies Aston Martin L
Slide 27: Investment managers
Investment managers SAMUEL G FORD MEng Sam joined Aberforth in August 2019 and became a Partner in May 2021. As a fund manager on M&G Investments’ equity income team for the previous 5 years, he managed UK equity portfolios for a range of clients. Prior to that he was an investment manager with Alli
Slide 28: 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 29: Glossary – Aberforth Funds
Glossary – Aberforth Funds ▪ IPO: Initial Public Offering. ▪ 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:
Slide 30: Glossary – Aberforth Funds
Glossary – Aberforth Funds ▪ SONIA: Sterling Overnight Index Average is a measure of the rate at which interest is paid on sterling short-term wholesale funds in circumstances where credit, liquidity and other risks are minimal. ▪ TCFD: Task Force on Climate-Related Disclosures. ▪ Terminal NAV (Ordi
Slide 31: Important information
Important information Aberforth Partners LLP 30
Slide 32: Important information
Important information ▪ Throughout this presentation references to: SMALL COMPANIES mean constituents of the Deutsche Numis Smaller Companies Index (Excluding Investment Companies) which are referred to as “DNSCI (XIC)”; LARGE COMPANIES mean constituents of the FTSE All-Share Index which are referre
Slide 33: Important information
Important information ▪ This presentation is intended only for persons who satisfy the requirements of Article 19 (Investment Professionals) and Article 49 (High Net Worth Companies etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and may not be copied or passed
Slide 34: 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 35: 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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