Stand. Life UK Small SLS Interim Management Statement

  Stand. Life UK Small (SLS) - Interim Management Statement

RNS Number : 3638R
Standard Life UK Small.Co's Tst PLC
16 November 2012


Standard Life UK Smaller Companies Trust PLC



Interim Management Statement



Three months ended 30 September 2012



To the members of Standard Life UK Smaller Companies Trust plc ('the Company')

This Interim Management Statement ('IMS') has been produced solely to  provide 
additional information  to  shareholders  as  a  body  to  meet  the  relevant 
requirements of the UK Listing Authority's Disclosure and Transparency  Rules. 
It should not be relied upon by any other party or for any other purpose.



This IMS relates to the period from  1 July to 30 September 2012 and  contains 
information that covers this period and up to the date of publication of  this 
IMS, unless otherwise specified.



Investment objective

The objective  of  the Company  is  to achieve  long  term capital  growth  by 
investment in UK quoted smaller companies.



Benchmark

Numis Smaller Companies Index (excluding Investment Companies). The benchmark
was renamed  on 11  April 2012,  having previously  been named  the RBS  Hoare 
Govett Smaller Companies Index (excluding Investment Companies).



Material events

On 1 September 2012, the Company announced its Annual Financial Report for the
year ended 30 June 2012.



As at  30 September  2012,  the Company  had  a capital  structure  comprising 
£24,935,071 nominal amount of Convertible  Unsecured Loan Stock 2018  ("CULS") 
and 64,999,905 Ordinary shares  of 25 pence each,  with voting rights.  There 
were no Ordinary shares held in treasury.



On 5 October  2012, the  Company issued 4,679  new Ordinary  shares under  its 
block listing authority granted on 28 April 2011("the April 2011 Block listing
authority) further to the conversion date of 30 September 2012 in relation  to 
the CULS.



During October and November 2012 the  Company issued a total of 1,025,000  new 
Ordinary shares under the April 2011 block listing authority.



Details of these share issues are set out in the table below.



Date of Issue NAV    No of Shares    Price
   05/10/2012    n/a           4,679  237.2542
   15/10/2012 236.66    225,000     238.25
   16/10/2012 234.65   100,000     238.25
   16/10/2012 235.85   100,000     238.25
   18/10/2012 237.96     100,000     241.00
   22/10/2012 237.46   100,000     240.00
   24/10/2012 235.45  50,000     238.00
   29/10/2012 233.76  50,000     236.25
   09/11/2012 232.74         125,000     235.50
   12/11/2012 231.89  25,000     233.25
   12/11/2012 231.64          75,000     232.25
   15/11/2012 229.73          75,000     231.50
                           1,029,679







As at the  date of this  IMS the  capital structure of  the Company  comprises 
£24,923,960 nominal amount of  CULS and 66,029,584  Ordinary shares in  issue, 
with voting rights.

All resolutions put to the  Annual General Meeting of  the Company held on  11 
October 2012, were duly passed by shareholders, including approval of a  final 
dividend of 2.10 pence per Ordinary share. The final dividend was paid on  18 
October 2012 to shareholders  on the register  as at close  of business on  21 
September 2012. The ex- dividend date was 19 September 2012.



Manager's Investment  Review  and  Outlook  for  the  three  months  ended  30 
September 2012



Market Review

UK smaller companies  made strong  gains in  the third  quarter. Markets  were 
boosted by central bank stimulus  measures. The UK economy remained  sluggish 
with data mixed.



Environment

UK smaller companies  delivered positive  returns in  each of  the last  three 
months, outperforming  their  large-cap counterparts  over  the quarter  as  a 
result.  In  the  year  to  date,  the  FTSE  SmallCap  Index  is  up  19.3%, 
significantly ahead of the FTSE 100 Index.



During the third quarter, UK equities gained confidence from stimulus  efforts 
by central banks  across the globe.  Early in the  period, risk appetite  was 
boosted by a speech from European Central Bank (ECB) President Mario Draghi in
which he stated  that the  ECB would  do 'whatever  it takes'  to support  the 
euro. The  rally was  sustained  into the  autumn,  with equities  gaining  a 
further boost from  the Federal  Reserve's announcement  of a  third round  of 
quantitative easing in September.



The domestic economy remained sluggish and continued to contract in the second
quarter of the year. However, an  initial estimate of -0.7% was  subsequently 
revised up to -0.4%. In  addition, the Jubilee in  June is estimated to  have 
had a -0.5% impact.  While economic data generally  remained weak, there  was 
some positive  news including  surprisingly  robust employment  trends.  This 
prompted optimism that  an Olympics  related boost  might ensure  a return  to 
growth in the third quarter, an expectation which was subsequently confirmed.
Elsewhere, CPI inflation continued to trend  lower, falling to 2.5% in  August 
from a peak of over 5% in September 2011. This led to growing expectations of
further stimulus measures from the Bank of England.



Performance

Performance benefited from exposure to online fashion retailer ASOS. This  is 
the Company's largest single holding and it outperformed following a  positive 
set of results which seemed to indicate that its UK business is recovering and
its international  operations  are  performing well.  Also  positive  was  the 
exposure to  investment  banker  Hargreaves  Lansdown  which  reported  strong 
trading and  appears  well  positioned  to  cope  with  the  industry  changes 
resulting from  implementation  of the  retail  distribution review  (RDR)  in 
December 2012. The holding  in EMIS, which  supplies specialised software  to 
GPs, was also  beneficial. The shares  outperformed on the  back of  earnings 
upgrades, together  with  good visibility  on  the company's  future  earnings 
streams.



Key detractors from performance included luxury handbag brand Mulberry,  which 
lagged as a result of signs that trading may be moderating. This appeared  to 
exacerbate concerns about  the outlook  for luxury brands  following a  profit 
warning from  rival  Burberry. The  Company's  exposure to  property  website 
Rightmove was a  further negative.  It suffered  in an  environment in  which 
investors favouring  more 'risk  on'  stocks failed  to reward  the  company's 
relative resilience. In a similar vein, Abcam, the market leader in the  sale 
of antibodies for the life science  industry, lagged because of its  perceived 
defensive characteristics.



Activity

Key purchases  during the  quarter  included adding  to  the holding  in  high 
quality mass affluent clothing brand Ted Baker which is continuing to grow its
UK business and to expand internationally. The Company also bought additional
shares in payment services company PayPoint, which processes bills and general
payments for customers without bank accounts. The company is trading well and
diversifying into  the  payments  via  mobile  phone  business.  Shares  were 
purchased in  polyurethane  flooring  manufacturer James  Halstead,  which  we 
regard as a world leading business underpinned by its strong exports.



The Company's holding in  copper producer First  Quantum Minerals was  reduced 
given evidence of slowing demand from China for a range of commodity  metals. 
The Company also took  profits on some of  its shares in industrial  equipment 
manufacturer Spirax-Sarco.



Outlook

The present macroeconomic backdrop remains challenging. Ongoing  difficulties 
in the Euro-zone, sluggish economic growth in Europe, and the possibility of a
slowdown in the  US and  Far East,  all give cause  for concern.  We do  not, 
however, think that  this will  be sufficient to  derail the  market which  we 
expect to make modest progress  over the course of  the year. We continue  to 
favour growth-oriented, quality companies with strong earnings momentum.



(Source: Standard Life Investments)



Largest Ten holdings and Changes in Period



            Ranking as                    Market Value at 30
                    at                             September
 Ranking as
         at    30 June                                  2012
                                                             Total Investments
30 Sep 2012       2012 Investment                        (£)               (%)
          1          3 ASOS                        8,463,811               5.2
          2          2 Paddy Power                 7,948,673               4.8
          3          1 Telecom Plus                7,220,958               4.4
          4          4 Abcam                       6,837,986               4.2
          5          5 Rightmove                   6,585,600               4.0
          6          6 Hargreaves                  6,285,000               3.8
                       Lansdown
          7         11 EMIS                        5,944,917               3.6
          8          7 Telecity                    5,518,519               3.4
          9         10 Domino's Pizza              5,047,447               3.1
         10         17 Aveva                       4,710,178               2.9
                                                                          39.4



Net assets breakdown as at 30 September 2012

                         %
Consumer Services      29.9
Industrials            24.4
Information Technology 18.0
Consumer Goods         10.7
Health Care             8.6
Financials              7.6
Telecommunications      4.8
Basic Materials         3.7
Oil & Gas               1.8
Net Borrowings         (9.5)
Total                  100.0







General description of Company's financial  position and performance as at  30 
September 2012

Trust Managers                                                          Standard Life
                                                                        Investments
                                                                        (Since
                                                                        01/09/2003)
Market Capitalisation                                                   £147.5m
Gross Assets                                                            £172.7m
Ordinary Share Price                                                    227.0p
Ordinary Share Net Asset Value                                          229.4p*
(Discount)/Premium of Ordinary Share Price to Net Asset Value           (1.0)%

                                                                       

 3.2% (Source:
12 Month High                                                           DataStream)

 (9.5)%
12 Month Low                                                         (Source:
                                                                        Datastream)
Yield (net) - (note: level of yield changes on a daily basis)           1.4%
Current equity  gearing (note:  level  of gearing  changes on  a  daily 9.5%
basis)
3.5% Convertible Unsecured Loan Stock 2018 Conversion Price             237.2542p
3.5% Convertible Unsecured Loan Stock 2018 Price                        107.0p
CULS Conversion and Interest Payment Dates                              31 March  and 
                                                                        30 September
Trust Annual Management Fee                                             0.85%      of 
                                                                        Gross Assets
Dividends Semi Annually                                                 April/October



* Capital Only Net Asset Value



Source: Standard Life Investments.



















Performance

                               Q3 2012 1 year 2 years 3 years 4 years 5 years

                                   (%)    (%)     (%)     (%)     (%)     (%)
Share price                       11.8   14.6    29.5    94.8   127.0    92.0
Net asset value                    6.1   15.1    25.6    73.0    88.1    65.6
NSCI (ex Investment Companies)     8.7   20.1    16.8    32.0    62.4    10.0





Source: Thomson  Datastream, capital  returns. The  percentage growth  figures 
above are calculated over periods to 30 September 2012 on a mid to mid basis.



For the Manager's  current Investment Review  & Outlook, please  refer to  the 
latest Trust Quarterly Update which is available via the Company's web-page at
www.standardlifeinvestments.com/its



Please note that past performance is not necessarily a guide to the future and
that the value of  investments and the  income from them may  fall as well  as 
rise. Investors may not get back the amount they originally invested.





For Standard Life UK Smaller Companies Trust plc

Maven Capital Partners UK LLP, Secretaries



16 November 2012



                     This information is provided by RNS
           The company news service from the London Stock Exchange

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IMSGGGQWGUPPGCQ -0- Nov/16/2012 14:38 GMT