Interim Management Statement
December 31 2008 - 6:10AM
UK Regulatory
GARTMORE SMALLER COMPANIES TRUST p.l.c.
Interim Management Statement
for the three months to 30 November 2008 (Unaudited)
This interim management statement has been produced to provide information to
shareholders as a body in accordance with the relevant requirements of the UK
Listing Authority's Disclosure and Transparency Rules. It should not be relied
upon by any other party or parties for any other purposes. The views,
information and data in this publication should not be deemed a financial
promotion or recommendation.
Gartmore Smaller Companies Trust p.l.c. is an investment trust company that
seeks to provide shareholders with long-term capital growth through investment
in smaller UK listed companies and unlisted companies quoted on the AIM market
of the London Stock Exchange.
The value of UK equities declined sharply over the three-month period to 30
November 2008 as investors wrestled with high levels of market volatility and
deteriorating economic fundamentals. A process of deleveraging, driven in part
by hedge funds suffering large scale redemptions, often dominated daily and
weekly share price, and stock market fluctuations. As economic concerns grew,
consumer cyclicals, industrials and businesses with an exposure to the auto
sector were particularly hard hit.
Data released during October showed that the UK economy contracted during the
third quarter for the first time since the early 1990s, and the policy
responses have been dramatic and far reaching. In the UK, the government
announced a �50 billion package designed to recapitalise the UK banking system,
which set the tone for similar measures in Europe and the US. This was followed
by dramatic monetary easing, with the Bank of England reducing Bank Rate to
3.0% in November, and by a further 1.0% to 2.0% in December, the lowest level
since 1951. Also in November, the government announced a �20 billion package of
fiscal measures aimed at lifting consumption and averting a protracted
recession. Meanwhile, President elect Obama promised similar measures but of
much greater magnitude in the US.
Against a very difficult backdrop and with investor confidence under severe
pressure, smaller companies underperformed the broader market. The FTSE Smaller
Companies (ex investment companies) Index declined by 39.4% over the period,
while the FTSE AIM All-Share Index fell by 49.8%. This compares with a lesser
decline of 24.8% from the FTSE All-Share Index. The Fund's Net Asset Value per
Ordinary share declined by 33.1% over the three-month period. A relatively
large cash position helped to limit declines against an exceptionally weak
market backdrop. However, this was partly counterbalanced by the portfolio's
relatively high exposure to AIM-listed companies, as the smallest companies
performed poorly in aggregate relative to the wider smaller companies universe.
Performance: At 3 months 1 year 3 years 5 years 10 years
30 November
2008
Net Asset Value per 366.3p -33.1% -41.1% -36.4% -13.4% +8.2%
Ordinary share *
Benchmark ** 1506.6 -39.4% -51.9% -51.5% -38.8% -25.3%
Mid-market Price per 295.25p -27.7% -43.7% -42.2% -15.5% +3.4%
Ordinary share
Discount 19%
Source for all data: Gartmore as at 30 November 2008, capital performance only
in sterling terms. From 31 December 2005 (inclusive), Net Asset Value reflects
the portfolio stated at bid prices. Performance has been calculated using
unadjusted historical published Net Asset Values which were based on mid
valuations prior to 31 December 2005. Share price quoted at mid price.
*Inclusive of current year revenue. Please note that comparative Net Asset
Values older than one year exclude undistributed revenue. ** FTSE SmallCap
(excluding Investment Companies) Index. Source: Thomson Reuters Datastream.
Ten Principal Equity Market % of Portfolio Distribution % of
Investments at Value by Broad Industrial
Total Sector at Portfolio
30 November 2008: �'000 Assets
30 November 2008:
BATM Advanced 1,993 3.9 Technology 27.0%
Communications
Management Consulting 1,820 3.5 Industrials 26.1%
Group
eServGlobal 1,027 2.0 Health Care 11.4%
Pace 973 1.9 Financials 11.0%
Aero Inventory 783 1.5 Consumer Services 10.1%
Gresham Computing 710 1.4 Oil & Gas 6.7%
Inspired Gaming 696 1.4 Basic Materials 4.3%
Gulf Keystone Petroleum 650 1.3 Consumer Goods 2.1%
Iomart Group 646 1.3 Telecommunications 1.3%
Costain 628 1.2
At 30 November 2008, the Company's portfolio comprised 144 investments.
Financial Position: (Unaudited) (Audited)
As at As at
30 November 31 August
2008 2008
�'000 �'000
Equity investments 34,491 66,339
UK Treasury stock 4% 07/03/2009 13,905 -
Other net current assets 3,111 10,115
______ ______
Net Assets attributable to Ordinary 51,507 76,454
shares
===== =====
Material Events and Transactions:
On 10 November 2008, the Board announced that it had reached agreement with
Standard Life UK Smaller Companies Trust plc in respect of a merger of the
business and assets of the Company and Standard Life UK Smaller Companies Trust
plc to be effected through a scheme of reconstruction and winding up of the
Company. Details of the recommended proposals were issued on 24 December 2008
and will be voted on by shareholders at extraordinary general meetings to be
held on 26 January 2009 and 3 February 2009.
On 12 December 2008, the Board declared a second interim dividend of 4.0 pence
per Ordinary share, which will be paid on 12 January 2009 to shareholders on
the register on 30 December 2008.
Price and Performance Information:
The Company's Ordinary shares are listed on the London Stock Exchange and the
closing mid-market price of these shares is published in the Financial Times
under `Investment Companies'. Real-time share price information is available on
09058 171 690. Calls are charged at 75p per minute from a BT landline. The cost
of calls from other telephone networks may be higher and from mobiles will be
considerably more. The Company's Net Asset Value is calculated daily and can be
viewed on the London Stock Exchange website at www.londonstockexchange.com and
via a link from the Gartmore web site at www.gartmore.co.uk.
Further information can be obtained from Gartmore as follows:
Investor helpline: 0800-289 336 (Calls are free from a BT landline)
Internet address: www.gartmore.co.uk
E-mail address: helpline@gartmore.com
Telephone calls may be recorded for monitoring and training purposes.
The Directors are not aware of any significant events or transactions which
have occurred between 30 November 2008 and the date of publication of this
statement, which have had a material impact on the financial position of the
Company. For latest performance information, please refer to the Gartmore
website, www.gartmore.co.uk. The Company's discrete area on the site can be
accessed via the "Fund range" menu or directly using
www.gartmoresmallercostrust.co.uk or www.gartmoresmallercostrust.com.
Gartmore Investment Limited
Company Secretary
31 December 2008
END
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