Aberdeen Smaller Companies High Income has announced results for the year ended 31 December 2014. The total return on net assets for the period was -2.1% which compares favourably to the return on the FTSE Smaller companies Index of -2.7%. However the return to shareholders was -14.9%, reflecting a widening of ASCH’s discount from 5.7% to 18.2%. The dividend was increased from 6.25p to 6.45p.
The fund has two £5m tranches of debt that mature later this year. the Board says they are thinking about fixing the interest rate on at least part of this debt.
The manager’s statement says the performance of the preference share portfolio was in the main driven by Aviva and General Accident. The consumer sector which includes Restaurant Group, Fuller Smith and Turner and Greggs posted strong share price returns. More widely, recruitment consultant Robert Walters saw both temporary and permanent jobs markets in the UK continuing to recover. This confidence coupled with the help-to-buy scheme fed into the housing market with Bellway seeing another strong year of volume and price growth. They say Europe was difficult but RPC and Acal prospered through a combination of taking share, acquisitions and in the case of Acal moving up the value-add chain in support of customers. Stocks exposed to emerging markets have also had a tough year, hindered further by the collapse of currencies. They say XP Power has delivered some steady growth against this backdrop but Oxford Instruments has been impacted by a slowdown in their core research and development markets and in China. Interserve has seen competitive pressures in the Middle East, Fenner in Australia and Aveva in Brazil and Korea.
ASCH : Aberdeen Smaller Cos High income hit by widening discount