Source - PRN


All information is at 31 March 2018 and unaudited.
Performance at month end is calculated on a cum income basis

Net asset value 0.2 -1.6 19.3 67.0 116.0
Share price -0.6 1.9 29.7 77.8 131.2
Benchmark* -0.9 -7.0 5.0 29.9 60.3

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. From 1 December 2013 to 21 March 2018, the Company’s benchmark was the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index, which replaced the Numis Smaller Companies plus AIM (excluding Investment Companies) Index as the Company’s benchmark. The above period indices have been blended to reflect these changes.

At month end
Net asset value capital only: 547.04p
Net asset value incl. income: 550.10p
Share price 479.00p
Discount to cum income NAV 12.9%
Net yield1: 1.9%
Total Gross assets2: £402.3m
Net market exposure as a % of net asset value3: 104.5%
Ordinary shares in issue4: 73,130,326
2017 ongoing charges* (excluding performance fees5,6: 0.9%
2017 ongoing charges* ratio (including performance fees)5,6,7: 2.2%

*Ongoing Charges: The management fee rate reductions, as detailed in the notes below, will impact management fees in 2017 and onwards.   The impact of the new fee arrangements, assuming the same level of performance from the manager and assuming all other charges remain the same, would be to reduce the level of Ongoing Charges borne by the Company.

1. Calculated using the 2017 interim dividend declared on 24 July 2017 and the 2017 final dividend declared on 12 February 2018 and paid on 29 March 2018.

2. Includes current year revenue and excludes gross exposure through contracts for difference.

3. Long positions less short positions as a percentage of net asset value.

4. Excluding 7,400,000 shares held in treasury.

5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2017.

6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.

7. Effective 1st December 2017 the annual performance fee arrangements for the Company have changed.  The annual performance fee is now calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total fees (comprising the base management fee of 0.35% and a potential  performance fee of 0.90%) will therefore fall to 1.25% of average month end gross assets on a two year rolling basis (from 1.70% of average annual gross assets).

Sector Weightings % of Total Assets
Industrials 35.0
Financials 19.8
Consumer Services 15.8
Consumer Goods 7.9
Technology 6.4
Health Care 6.0
Basic Materials           4.9
Oil & Gas 1.9
Net current assets   2.3
Total 100.0

Market Exposure (Quarterly)

Long 117.3 115.3 116.9 119.6
Short 6.1 5.8 6.3 8.4
Gross exposure 123.4 121.1 123.2 128.0
Net exposure 111.2 109.5 110.6 111.2


Ten Largest Investments
Company % of Total Gross Assets
Melrose Industries 3.3
Ascential 3.1
Dechra Pharmaceuticals 3.0
Robert Walters 2.5
Ibstock 2.3
Restore 2.2
CVS Group 2.1
SSP 2.0
Fevertree Drinks 2.0
Hill & Smith 2.0

Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:

During March the Company’s NAV per share rose by 0.2% to 550.10p on a cum income basis, whilst our benchmark index fell by 0.9%; the FTSE 100 Index fell by 2.4% (all performance figures are with income reinvested and net of ongoing charges and any applicable performance fees).

Positive stock selection in both long and short positions drove outperformance over the benchmark during the month.

Against the backdrop of a falling market during the month, short positions in aggregate contributed positively to performance, however the key contributors were stock specific, with several idiosyncratic short positions delivering meaningful performance contributions. The largest contributor was from a short position in a UK wholesaler of alcoholic beverages, which in the space of a couple of weeks issued negative profit revisions, announced an unexpected tax bill to HMRC, an increase in its net debt position, a failed capital raise, before finally filing notice on its intention to appoint administrators and warning that “shareholders will receive little to no value”.

Long positions that contributed positively included Fenner, YouGov and Dechra Pharmaceuticals. Shares in Fenner rallied after the company received an all in cash bid at a circa 30% premium to the share price and YouGov’s interim results showed continued strong organic growth and improving margins with profits significantly ahead of consensus. Dechra Pharmaceuticals reported interim results for the six months to 31 December 2017 showing strong revenue growth in both Europe and North America; while management stated that current trading remains in line with expectations.

The largest detractor was 4imprint which was weak over the month, in part reflecting the company’s lowering of its gross margin guidance as they invest more in above-the-line advertising to accelerate market share gains, and also in response to a broker downgrading the shares to a Sell recommendation later in the month. We had a positive meeting with management and have maintained the position.

Activity during March included additions to Computacenter and Microgen and the purchase of a new holding in Tatton Asset Management, which helps provide IFAs (Independent Financial Advisers) with discretionary fund management services and aims to bring its services to a much wider client base. The portfolio continues to evolve post management change, where we have reduced exposure to resources, and added to some of the Company’s core ideas including Melrose Industries, Fever-Tree and Renishaw.

13 April 2018


Latest information is available by typing on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.