abrdn UK Smaller Companies Growth Trust PLC’s chairman Liz Airley didn’t mince words in today’s underwhelming annual report for the UK-quoted smaller companies investment vehicle.
Airley said she was “disappointed to be reporting to shareholders that in the year just ended, the company has extended its period of underperformance against its benchmark on both a net asset value and share price basis”.
She continued: “We are very aware that the effect of this underperformance, over one, three and five years, is that anyone who made their initial investment in the company in the last five years will most likely have seen a reduction in the value of their investment.
“This is clearly an uncomfortable position for shareholders, and also for those of us who are responsible for the portfolio and the company.”
The board announced a reduction in management fees, calling the existing fee structure “insufficiently competitive relative to its closest peers”.
Fees on the first £175 million of net assets were dropped from 0.85% to 0.75%.
The company's net assets total return and share price total return saw a decline, with figures of -7.4% and -6.8% respectively, continuing the trend from a challenging 2022.
This underperformed the reference index (being the Numis Smaller Companies plus AIM Index)’s total return of -2.8%.
However, there were positive indicators as well. The revenue return per share for the year was 12.44p, marking a 37.2% increase from the 9.07p reported in 2022.
Additionally, total dividends per share rose by 35.8% to 11.00p from the previous year's 8.10p. The discount to the net asset value also showed a slight improvement, tightening to 14.3% from 14.6% in 2022.
In terms of portfolio performance, the top contributors to the trust's relative performance included 4imprint, Games Workshop, Diploma, Kainos, and discoverIE.
These equities showcased strong growth, with 4imprint leading the pack with a 106% increase in shares. On the other hand, the equities that detracted the most from performance were Focusrite, Hilton Food, Future, Mortgage Advice Bureau, and Marshalls.
These companies faced challenges ranging from supply chain issues to reduced consumer spending and market uncertainties.