abrdnuksmallercompaniesgrowthtrust.co.uk
abrdn UK Smaller
Companies Growth Trust plc
Annual Report 30 June 2024
Capturing the growth potential of UK smaller companies
For more information visit abrdnuksmallercompaniesgrowthtrust.co.uk
abrdn.com
abrdn UK Smaller Companies Growth Trust plc 117
Directors
Liz Airey (Chairman)
Ashton Bradbury
Alexa Henderson
Manju Malhotra
Tim Scholefield
Registered Office and Company Secretary
abrdn Holdings Limited
1 George Street
Edinburgh EH2 2LL
Email: CEF.CoSec@abrdn.com
Alternative Investment Fund Manager
abrdn Fund Managers Limited
1 George Street
Edinburgh EH2 2LL
Investment Manager
abrdn Investment Management Limited
1 George Street
Edinburgh EH2 2LL
Company Registration Number
SC145455 (Scotland)
Website
abrdnuksmallercompaniesgrowthtrust.co.uk
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 889 4076
Website: investorcentre.co.uk
Depositary
BNP Paribas SA, London Branch
10 Harewood Avenue
London NW1 6AA
Stockbroker
Winterflood Investment Trusts
Riverbank House
2 Swan Lane
London EC4R 3GA
Independent Auditor
KPMG LLP
319 St. Vincent Street
Glasgow G2 5AS
Legal Entity Identifier (“LEI”)
213800UUKA68SHSJBE37
Contact Addresses
abrdn UK Smaller Companies Growth Trust plc 1
“After two years of reporting
underperformance, it is with pleasure that I can
report that the past year saw a decisive return
to outperformance.”
Liz Airey, Chairman
“During the year under review, markets proved
healthier after a challenging two years. The
top-down pressure of inflation came under
control in the UK and other regions although,
relative to expectations, it is worth noting that
interest rates have remained higher for longer.”
Abby Glennie and Amanda Yeaman,
abrdn
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2 abrdn UK Smaller Companies Growth Trust plc
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION. If you are in any doubt about the
action you should take, you are recommended to seek
your own financial advice from your stockbroker, bank
manager, solicitor, accountant or other financial adviser
authorised under the Financial Services and Markets Act
2000 (as amended by the Financial Services Act 2012) if
you are in the United Kingdom or, if not, from another
appropriately authorised financial adviser.
If you have sold or otherwise transferred all your Ordinary
shares in abrdn UK Smaller Companies Growth Trust plc,
please forward this document, together with the
accompanying documents immediately to the purchaser
or transferee, or to the stockbroker, bank or agent through
whom the sale or transfer was effected for transmission to
the purchaser or transferee.
To find out more about abrdn UK Smaller Companies
Growth Trust plc, please visit:
abrdnuksmallercompaniesgrowthtrust.co.uk
Overview
Performance Highlights and Financial Calendar 3
Strategic Report
Chairman’s Statement 8
Overview of Strategy 12
Promoting the Success of the Company 20
Performance 24
Investment Manager’s Review 26
Investment Process 32
Portfolio
Ten Largest Investments 36
Investment Portfolio 37
Sector Distribution of Investments 39
Investment Portfolio by Sector 40
Market Cap Exposure 41
Investment Case Studies 42
Governance
Board of Directors 46
Directors’ Report 49
Directors’ Remuneration Report 59
Audit Committee’s Report 63
Financial Statements
Statement of Directors’ Responsibilities 68
Independent Auditor’s Report 69
Statement of Comprehensive Income 75
Statement of Financial Position 76
Statement of Changes in Equity 77
Statement of Cash Flows 78
Notes to the Financial Statements 79
Alternative Performance Measures 96
Corporate Information
Information about the Investment Manager 100
Investor Information 101
Glossary of Terms 103
Your Company’s Share Capital History 106
AIFMD Disclosures (Unaudited) 109
General
Notice of Annual General Meeting 111
Contact Addresses 117
Contents
abrdn UK Smaller Companies Growth Trust plc 3
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Net asset total return
AB
Share price total return
AB
+18.1% +21.0%
2023 –7.4% 2023 –6.8%
Total dividends per share Discount to net asset value
AB
12.00
p
12.5%
2023 11.00p 2023 14.3%
Revenue return per share Ongoing charges ratio
ABC
13.12
p
0.92%
2023 12.44p 2023 0.95%
A
Considered to be an Alternative Performance Measure. See pages 96 to 98 for more information.
B
A Key Performance Indicator (“KPI”). See page 13 for more information on the Company’s KPIs.
C
Calculated in accordance with AIC guidance issued in October 2020 to include the Company’s share of costs of holdings in investment companies on a look-through basis.
Net asset value per share Share price Dividends per share
At 30 June – pence At 30 June – pence Year ended 30 June – pence
527.7
738.0
530.4
483.0
556.2
20 21 22 23 24
482.0
698.0
453.0
414.0
486.5
20 21 22 23 24
7.70 7.70
8.10
11.00
12.00
20 21 22 23 24
Performance Hi
g
hli
g
hts and Financial Calendar
4 abrdn UK Smaller Companies Growth Trust plc
Financial Calendar
Annual General Meeting (Edinburgh)
21 November 2024
Payment of final dividend for year ending 30 June 2024
29 November 2024
Half year end
31 December 2024
Expected announcement of results for the
six months ending 31 December 2024
February 2025
Payment of interim dividend for year ending 30 June 2025
April 2025
Financial year end
30 June 2025
Expected announcement of results for year ending 30 June 2025
September 2025
Performance Hi
g
hli
g
hts and Financial Calendar
Continued
abrdn UK Smaller Companies Growth Trust plc 5
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Financial Highlights
30 June 2024 30 June 2023 % change
Capital return
Total assets (as defined on page 105) £453.1m £451.5m 0.3%
Equity shareholders’ funds £413.1m £426.6m (3.2%)
Market capitalisation
A
£361.3m £365.7m (1.2%)
Net asset value per share (as defined on page 104) 556.19p 482.95p 15.2%
Share price 486.50p 414.00p 17.5%
Discount to NAV
B
12.5% 14.3%
Net gearing
B
5.8% 2.5%
Reference index
C
5,534.18 5,199.92 6.4%
Dividends and earnings
Revenue return per share
D
13.12p 12.44p 5.5%
Total dividends per share
E
12.00p 11.00p 9.1%
Operating costs
Ongoing charges ratio
BF
0.92% 0.95%
A
Represents the number of Ordinary shares in issue in the Company multiplied by the Company’s share price.
B
Considered to be an Alternative Performance Measure, as defined on pages 96 and 97.
C
Deutsche Numis Smaller Companies plus AIM (ex investment companies) Index.
D
Measures the revenue earnings for the year divided by the weighted average number of Ordinary shares in issue (see Statement of Comprehensive Income).
E
The figures for dividend per share reflect the years in which they were earned (see note 8 on page 85).
F
Calculated in accordance with AIC guidance issued in October 2020 to include the Company’s share of costs of holdings in investment companies on a look-through basis.
6 abrdn UK Smaller Companies Growth Trust plc
Strategic
Report
The Company is an investment trust
and its Ordinary shares are listed on
the London Stock Exchange.
The Company's objective is to
achieve long-term capital growth
by investment in UK-quoted
smaller companies.
abrdn UK Smaller Companies Growth Trust plc 7
Investments in the Electronics and
Technology Hardware Equipment
sectors represent 3.7% of the portfolio.
8 abrdn UK Smaller Companies Growth Trust plc
Dear Shareholders
After two years of reporting underperformance, it is with
pleasure that I can report that the past year saw a
decisive return to outperformance, such that at our June
year end your Company had outperformed the reference
index and the wider peer group in both NAV and share
price terms over the year, albeit it is still behind on a longer
term view. I set out some detail on this below.
Performance
For the year ended 30 June 2024, the Company’s net
asset value (“NAV”) total return, calculated on the basis
that all dividends received are reinvested in additional
shares, was 18.1% (2023: -7.4%). The share price total
return, calculated on the same basis, was 21.0% (2023: -
6.8%). In addition to the absolute returns generated, both
the NAV and the share price outperformed the total return
of the Company’s reference index, the Deutsche Numis
Smaller Companies plus AIM (ex investment companies)
Index (the “reference index”), of 10.0%.
Below is an update of the graph which we included in last
year’s Annual Report. This shows the NAV total return of
the Company and the total return of the reference index
over the five years to 30 June 2024. Periods in grey
indicate when the NAV was generally outperforming the
index. While the graph shows that over the five year
period the Company is behind the reference index, it
shows that the weak performance took place in 2022 and
the first nine months of 2023, and reversed sharply after
that, narrowing the gap by the end of the period. The poor
performance in 2022 and the first part of 2023 will
continue to act as a drag on the five year performance
record, but the last nine months of the year have shown
the investment process recovering traction and positive
contributions to relative performance from both stock
selection and sector allocation.
Last year I reported on the work that the Board had done
to further understand the root causes of the
underperformance in 2022, and the conclusion we
reached that this was largely attributable to external
factors which were challenging for the Manager’s
investment style. It is pleasing to report that, not only have
conditions become more favourable, but also that the
portfolio has outperformed.
Cumulative Performance of Company and Reference Index (over 5 years)
50
75
100
125
150
175
Jun 19 Dec 19 Jun 20 Dec 20 Jun 21 Dec 21 Jun 22 Dec 22 Jun 23 Dec 23 Jun 24
AUSC (NAV TR) Reference Index (TR)
Source: Refinitiv Datastream. Data rebased to 100 at 30 June 2019
Chairman’s Statement
Total return (%)
abrdn UK Smaller Companies Growth Trust plc 9
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Earnings and Dividends
The revenue return per share (“EPS”) for the year ended
30 June 2024 was 13.12 pence (2023: 12.44 pence). The
rate of increase of 5.5% has settled down to more
reasonable and sustainable levels, following two years
where increases have averaged over 39% per annum.
This is in large part down to the recovery in the prospects
of the underlying companies, but there has also been a
contribution from the effect of share buy backs enhancing
the EPS and the NAV per share. Included in the EPS is the
enhancement to earnings of 1.21 pence per share (9.7%)
as a result of share buy backs undertaken during the year.
Recurring income is increasingly the predominant source
of dividends, with only 2.5% of total revenue (excluding
capital dividends) coming from special dividends. This can
be compared to the position 10 years ago when around
20% of the revenue generated was classified as special.
The Board is declaring a final dividend for the financial
year of 8.3 pence per share, which will take the full year
dividend to 12.0 pence per share, an increase of 9.1% on
the full year dividend paid in 2023. This will permit around
2.2 pence per share to be transferred to revenue reserves
to provide against any future shortfalls in income
generated. Subject to approval by shareholders at the
Annual General Meeting, the final dividend will be paid on
29 November 2024 to shareholders on the register on 1
November 2024, with an associated ex-dividend date of
31 October 2024.
Ongoing Charges
The ongoing charges ratio (“OCR”) for the year ended 30
June 2024 was 0.92% (2023: 0.95%). During the year, the
Company benefited from renegotiated management fee
terms that came into effect on 1 July 2023 (as set out on
page 49), including the removal of the company
secretarial fee with effect from 1 January 2024 and a
lower fee for the provision of promotional activities by
the Manager.
Discount Control and Share Buy Backs
At the year end the discount of the share price to the NAV
was 12.5% (2023: 14.3%).
Over the year, the Board bought back 14.1 million shares,
equating to 15.9% of the Company’s issued share capital,
at a total cost of £60.5 million and a weighted average
price of 427.66 pence per share. The weighted average
discount at which the shares were repurchased was
13.1%. The Board calculates that this has added 10.7
pence per share to the NAV for remaining shareholders.
The Board has remained committed to its discount target
of 8% or lower and will continue to be active in the market
when it believes it to be in the best interests of
shareholders. It is, however, slightly frustrated that the
sustained improvement in performance throughout the
year, outstripping its reference index and many of its close
peers, is not being reflected in the share price
performance relative to the NAV.
“The Board is declaring a final dividend
for the financial year of 8.3 pence per
share, which will take the full year
dividend to 12.0 pence per share, an
increase of 9.1% on the full year
dividend paid in 2023.”
The pace of buy backs meant that the Board convened a
General Meeting on 3 June 2024 at which shareholders
granted authority for the Company to buy back a further
14.99% of the issued share capital. The renewed authority
will lapse at the Annual General Meeting, at which time the
Board will seek a renewed authority.
Full details of the Board’s discount control policy can be
found on page 18 and a five-year chart of the movement
in the discount compared to the peer group and the
discount control mechanism threshold can be found on
page 25. It should be noted that the Board has
implemented its discount control policy against an
industry backdrop of widening discounts generally and it
will continue to keep the nature of the policy and its level
under review.
Since the end of the financial year, the discount of the
share price to the NAV has continued to trade between
11% and 13% while the Company's performance
continues to outperform the reference index and most of
its close peers. The Board continues to stand behind the
share price and the Company has bought back 543,624
shares since the year end at an average discount of
12.0%. The rate of buy backs has diminished, but this is
largely driven by the lower volumes traded over the
summer months.
10 abrdn UK Smaller Companies Growth Trust plc
Gearing
The Board has given the Investment Manager discretion to
vary the level of gearing between 5% net cash and 25%
net gearing (at the time of drawdown). The Company has
a £40 million revolving credit facility which matures in
November 2025. At the start of the year the Company had
drawn down £25 million of the facility and, as the
Investment Manager became more confident about the
outlook for the UK generally and smaller companies in
particular, it drew the remaining £15 million of the facility in
March. At the year end, the gross level of borrowings was
offset by cash and investments in money market funds of
£15.9 million resulting in net gearing of 5.8% (2023: 2.5%).
FRC Review of Annual Report
The Board was informed in February 2024 that the
Financial Reporting Council (the “FRC”) had undertaken a
review of the 2023 Annual Report and Accounts in
accordance with Part 2 of the FRC Corporate Reporting
Review Operating Procedures. It is the FRC’s usual practice
to carry out such reviews on the annual reports of a
selection of companies each year. The FRC advised the
Board that the review did not give rise to any questions
or queries.
Appointment of New Auditor
As explained in more detail in the Audit Committee’s
Report on page 66, during the year the Board, led by the
Audit Committee, undertook an audit tender process and,
following consideration of the tenders received, the Board
decided to appoint Johnston Carmichael LLP as the
Company’s Auditor for the year ending 30 June 2025.
KPMG LLP will therefore not be seeking re-appointment as
Auditor at the Annual General Meeting and have issued a
statutory statement pursuant to Section 519 of the
Companies Act 2006 which is included separately with the
Annual Report. A resolution to appoint Johnston
Carmichael LLP as the Company’s Auditor will be
proposed at the Annual General Meeting.
Annual General Meeting
The Company’s Annual General Meeting (“AGM”) will take
place at 12 noon on Thursday 21 November 2024 at
abrdn’s office at 1 George Street, Edinburgh EH2 2LL. The
meeting will include a presentation from the Investment
Manager and will be followed by lunch. This is a good
opportunity for shareholders to meet the Board and
Manager and we would encourage you to attend. The
Notice of the Meeting is contained on pages 111 to 116.
Shareholders will be able to submit questions in advance
of the AGM at the following email address:
uksmallercompaniesgrowth@abrdn.com. Should you be
unable to attend the AGM, the Investment Manager’s
presentation will be made available on the Company’s
website shortly after the meeting. The results of the AGM
will also be published on the Company’s website.
“The Company’s AGM will take place
at 12 noon on Thursday 21 November
2024 at 1 George Street, Edinburgh
EH2 2LL. This is a good opportunity for
shareholders to meet the Board and
Manager and we would encourage
you to attend.”
At the meeting, rather than asking shareholders to vote on
the resolutions by a show of hands, as we have done in
previous years, voting will be conducted by a poll. This
practice has increasingly been adopted by public
companies and we consider that it is now best practice in
corporate governance.
In the meantime, the Board strongly encourages all
shareholders to exercise their votes in respect of the
AGM in advance of the meeting, and to appoint the
Chairman of the meeting as their proxy, by completing
the enclosed form of proxy form. This will ensure that
your votes are registered.
Chairman’s Statement
Continued
abrdn UK Smaller Companies Growth Trust plc 11
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Outlook
This time last year, I wrote about concerns surrounding
high rates of inflation and the level of interest rates. Roll
forward 12 months and we have seen inflation fall and
market conditions for UK smaller companies improve.
Rachel Reeves, the Chancellor of the Exchequer, sees
growth as UK’s national mission, however investors are still
unsure of the actions likely from Sir Keir Starmer’s
government following the landslide victory in July. Markets
wait to see how conflicting positions on budgetary
possibilities and growth agendas are reconciled and
whether cutting costs or promoting growth will
take precedence.
At the same time, the forthcoming US Presidential
elections have been shaken up by the decision of
President Biden not to stand and to back the campaign of
his Vice President, Kamala Harris. While we should end
2024 with better visibility as to the political direction of
travel, given that over half the world’s population will not
have to visit the ballot box for a number of years, the same
cannot be said about the geopolitical landscape, with the
continuing war in Ukraine and the threat of an escalating
conflict in Gaza and the Middle East. The UK, in a global
context, looks reassuringly well positioned, given
economic data, employment rates, manageable inflation
levels, and levers on interest rates to use.
The future is by its very nature uncertain, but the Board
has been pleased by the manner in which the Investment
Manager has managed the portfolio and navigated the
challenges in the last 12 months. The focus remains on the
resilience of the companies in which the portfolio is
invested and the experience and flexibility of the
management teams to adapt their companies to the
changes to the economic environment that are occurring.
At the same time, the Investment Manager continues to
see opportunities within the universe of UK smaller
companies - there remains significant catching up to do
with respect to where smaller company valuations sit
relative to their long-term average and to large caps. As a
consequence, despite areas of uncertainty remaining as
always, there remains cause for optimism in the sector
generally and the Company specifically.
Liz Airey
Chairman
4 September 2024
12 abrdn UK Smaller Companies Growth Trust plc
Business
The Company is an investment trust and its Ordinary
shares are listed on the London Stock Exchange.
Investment Objective
The Company’s objective is to achieve long-term capital
growth by investment in UK-quoted smaller companies.
Investment Policy
The Company intends to achieve its investment objective
by investing in a diversified portfolio consisting mainly of
UK-quoted smaller companies. The portfolio will normally
comprise between 50-60 holdings representing the
Investment Manager’s highest conviction investment
ideas. In order to reduce risk in the Company without
compromising flexibility, no holding within the portfolio
should exceed 5% of total assets at the time of acquisition.
The Company may use derivatives for portfolio hedging
purposes (i.e. only for the purpose of reducing, transferring
or eliminating the investment risks in its investments in
order to protect the Company’s portfolio).
Within the Company’s Articles of Association, the
maximum level of gearing is 100% of net assets. The
Directors have set parameters of between 5% net cash
and 25% net gearing (at the time of drawdown) for the
level of gearing that can be employed in normal market
conditions. The Directors have delegated responsibility to
the Investment Manager for the operation of the gearing
level within the above parameters.
Board Investment Limits
The Directors have set additional guidelines in order to
reduce the risk borne by the portfolio:
· Companies with a market capitalisation of below
£50 million should not represent more than 5% of
total assets.
· Companies involved in “Blue Sky” products (see
definition on page 103) should not represent more than
5% of total assets.
· No more than 50% of the portfolio should be invested in
companies that are constituents of the FTSE AIM All-
Share Index.
Investment Process
The Investment Manager’s investment process combines
asset allocation, stock selection, portfolio construction, risk
management, and dealing. The investment process has
evolved out of the Investment Manager’s ‘Focus on
Change’ philosophy and is led by Quality, Growth and
Momentum. The Investment Manager’s stock selection led
investment process involves compiling a shortlist of
potential investments using a proprietary screening tool
known as “The Matrix” which reflects Quality, Growth and
Momentum based factor analysis. The final portfolio is the
result of intensive research and includes face to face
meetings with senior management of these potential
investments. This disciplined process has been
employed for many years and has delivered strong
long term performance.
Further information on the investment process is
contained on pages 32 to 34.
Reference Index
The Company’s reference index is the Deutsche
Numis Smaller Companies plus AIM (ex investment
companies) Index.
Delivering the Investment Objective
The Directors are responsible for determining the
Company’s investment objective and investment policy.
Day-to-day management of the Company’s assets has
been delegated, via the Alternative Investment Fund
Manager (the “AIFM”), to the Investment Manager.
Promoting the Success of the Company
The Board’s statement on pages 20 to 23 describes how
the Directors have discharged their duties and
responsibilities over the course of the financial year under
section 172 (1) of the Companies Act 2006 and how they
have promoted the success of the Company for the
benefit of the members as a whole.
Overview of Strate
g
y
abrdn UK Smaller Companies Growth Trust plc 13
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The Board believes that the success of the Company is best served through
the measurement of Key Performance Indicators (“KPIs”), details of which
are included below.
Key Performance Indicators (“KPIs”)
The Board assesses the performance of the Company against the range of KPIs shown below over a variety of
timeframes, but has particular focus on the long-term, which the Board considers to be at least five years.
KPI Description
Net asset value (“NAV”) total return performance The Board measures the Company’s NAV total return performance against
the total return of the reference index (the Deutsche Numis Smaller
Companies plus AIM (ex investment companies) Index) and its peer group of
investment trusts.
The figures for this year and for the past three, five and ten years are shown in
the table on page 24.
Share price total return performance The Board measures the Company’s share price total return performance
against the total return of the reference index and its peer group of
investment trusts.
The figures for this year and for the past three, five and ten years are shown in
the table on page 24.
Discount/premium to NAV The Board compares the discount or premium of the Ordinary share price to
the NAV per share to the discount of the peer group and also to the threshold
of the Company’s discount target on a rolling 12 month basis.
A summary of the discount for the past ten years is included in the table in
page 25. A chart showing the discount over five years for the Company and
the peer group, measured against the discount target level, is shown in page
25. The average discount for the year as a whole was 12.9%.
Ongoing charges The Board monitors the Company’s ongoing charges ratio against prior years
and other similar sized companies in the peer group.
A summary of the ongoing charges ratio (“OCR”) for the past ten years is
included in the table in page 25. The OCR for the year ended 30 June 2024
was 0.92% (2023: 0.95%).
14 abrdn UK Smaller Companies Growth Trust plc
Principal and Emerging Risks
and Uncertainties
The Board carries out a regular review of the risk
environment in which the Company operates, changes to
the environment and individual risks. The Board also
considers emerging risks which might affect the
Company. During the year, the most significant risks were
inflation and high interest rates and the resultant volatility
that this has created in global stock markets. In addition,
the continuing conflicts in Ukraine and the Middle East
have further increased market risk and volatility.
There are a number of other risks which, if realised, could
have a material adverse effect on the Company and its
financial condition, performance and prospects. The
Board has carried out a robust assessment of the
Company’s principal and emerging risks, which include
those that would threaten its business model, future
performance, solvency, liquidity or reputation.
The principal risks and uncertainties faced by the
Company are reviewed by the Audit Committee in the
form of a risk matrix and the Committee also gives
consideration to the emerging risks facing the Company.
The principal risks and uncertainties facing the Company
at the current time, together with a description of the
mitigating actions the Board has taken, are set out in the
table below.
In terms of its appetite for risk, the Board has identified
what it considers to be the key risks to which the Company
is exposed and seeks to take a proportionate approach to
the control of these risks. In particular, by considering the
likelihood and impact of a specific risk, if the potential
exposure is rated as Critical or Significant, the Board
ensures that significant mitigation is in place to reduce the
likelihood of occurrence whilst recognising that this may
not be possible in all cases.
The principal risks associated with an investment in the
Company’s shares are published monthly in the
Company’s factsheet and they can be found in the
pre-investment disclosure document (“PIDD”) published
by the Manager, both of which are available on the
Company’s website.
Risk Trend Mitigating Action
Strategy - the Company’s objectives or the
investment trust sector as a whole become
unattractive to investors, or the Company
becomes uncompetitive (including its size
and costs), leading to a fall in demand for the
Company’s shares.
Through regular updates from the Manager, the Board monitors the
discount/ premium at which the Company’s shares trade relative to the
NAV (further information included in “Share price” below) . It also holds an
annual strategy meeting and receives feedback from the Company’s
Stockbroker and shareholders and updates from the Manager’s investor
relations team at Board meetings.
Investment performance - the appointment or
continuing appointment of an investment
manager with inadequate resources, skills or
experience, the investment style or process
being out of favour, or the adoption of
inappropriate strategies in pursuit of the
Company’s objectives, could result in poor
investment performance, a loss of value for
shareholders and a widening discount.
The Board meets the Manager on a regular basis and keeps investment
performance under close review. Representatives of the Investment
Manager attend all Board meetings and a detailed formal appraisal of the
Manager is carried out by the Management Engagement Committee on an
annual basis.
The Board sets and monitors the investment restrictions and guidelines and
receives regular reports which include performance reporting on the
implementation of the investment policy, the investment process, ESG
matters, risk management and application of the investment guidelines.
Overview of Strate
g
y
Continued
abrdn UK Smaller Companies Growth Trust plc 15
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Risk Trend Mitigating Action
Key person risk - a change in the key
personnel involved in the investment
management of the portfolio could impact
on future investment performance and
lead to loss of investor confidence.
The Board discusses key person risk and succession planning with the
Manager on a regular basis.
The Investment Manager employs a standardised investment process
for the management of the portfolio. The well-resourced smaller
companies team has grown in size over a number of years. These factors
mitigate against the impact of the departure of any one member of the
investment team.
Biographies of the team members involved with the management of the
Company’s portfolio are included on page 100.
Share price - failure to manage the discount
effectively or an inappropriate marketing
strategy could lead to a fall in the share price
relative to the NAV per share.
The Company operates a discount control mechanism and aims to
maintain a discount level of less than 8% to the cum-income NAV under
normal market conditions. Details of the discount control mechanism are
contained on page 18. The Directors undertake a programme of inviting
major shareholders to discuss issues of governance or strategy with the
Chairman or Senior Independent Director. In addition, the Company
participates in the Manager’s investment trust promotional programme
where the Manager has an annual programme of meetings with
institutional shareholders and reports back to the Board on
these meetings.
Financial instruments - insufficient oversight or
controls over financial risks, including market
price risk, liquidity risk and credit risk could
result in losses to the Company.
As stated above, the Board sets investment guidelines and restrictions
which are reviewed regularly and the Manager reports on compliance with
them at Board meetings.
Further details of the Company’s financial instruments and risk
management are included in note 16 to the financial statements.
Financial obligations - inadequate controls
over financial record keeping and
forecasting, the setting of an inappropriate
gearing strategy or the breaching of loan
covenants could result in the Company being
unable to meet its financial obligations, losses
to the Company and impact its ability to
continue trading as a going concern.
At each Board meeting, the Board reviews management accounts and
receives a report from the Administrator, detailing any breaches in the
internal controls during the period under review. The Board sets gearing
limits and monitors the level of gearing and compliance with the main
financial covenants at Board meetings.
The Audit Committee meets representatives from the Manager’s
Compliance and Internal Audit teams on at least an annual basis and
discusses any findings and recommendations relevant to the Company.
Regulatory - failure to comply with relevant
laws and regulations could result in fines, loss
of reputation and potential loss of investment
trust status.
The Board receives updates on relevant changes in regulation from the
Manager, industry bodies and external advisers and the Board and Audit
Committee monitor compliance with regulations by review of checklists
and internal control reports from the Manager. Directors keep up to date in
a variety of ways, including attendance at training courses and seminars.
16 abrdn UK Smaller Companies Growth Trust plc
Risk Trend Mitigating Action
Operational - the Company is dependent on
third parties for the provision of all systems
and services (in particular those of the
Manager and the Depositary) and any
control failures and gaps in their systems and
services could result in a loss or damage to
the Company.
The Audit Committee reviews reports from the Manager on its internal
controls and risk management (including an annual ISAE Report) and
considers assurances from all its other significant service providers on at
least an annual basis, including on matters relating to business continuity
and cyber security. Written agreements are in place with all third party
service providers.
The Audit Committee meets representatives from the Manager’s
Compliance and Internal Audit teams on at least an annual
basis and discusses any findings and recommendations relevant to
the Company.
The Manager monitors closely the control environments and quality of
services provided by third parties, including those of the Depositary, through
service level agreements, regular meetings and key performance
indicators, and provides periodic updates to the Board on this work.
A formal appraisal of the Company’s main third party service providers
is carried out by the Management Engagement Committee on an
annual basis.
Geopolitical - the effects of geopolitical
instability or change could have an adverse
impact on stock markets and the value of the
Company’s investment portfolio.
Current geopolitical risks include the conflicts in Ukraine and the Middle East
and the actions taken by governments in relation to climate change. They
also include the impact of inflation and higher interest rates, and the
potential impact on investors of tax changes in the UK. The Investment
Manager’s focus on quality companies, the diversified nature of the
portfolio and a managed level of gearing all serve to provide a degree of
protection in times of market volatility.
Geopolitical risk is heightened due principally to the increased market risk caused by the continuing conflicts in Ukraine and the Middle
East and also the potential impact on investors of tax changes in the UK.
Overview of Strate
g
y
Continued
abrdn UK Smaller Companies Growth Trust plc 17
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Promotional Activities
The Board recognises the importance of promoting the
Company to prospective investors both for improving
liquidity and enhancing the rating of the Company’s
shares. The Board believes one effective way to achieve
this is through subscription to, and participation in, the
promotional programme run by the Manager on behalf of
a number of investment trusts under its management. The
Company also supports the Manager’s investor relations
programme which involves regional roadshows,
promotional and public relations campaigns. The
Manager’s promotional and investor relations teams
report to the Board on a quarterly basis giving analysis of
the promotional activities as well as updates on the
shareholder register and any changes in the make-up of
that register.
The purpose of the promotional and investor relations
programmes is both to communicate effectively with
existing shareholders and to gain new shareholders, with
the aim of improving liquidity and enhancing the value and
rating of the Company’s shares. Communicating the long-
term attractions of the Company is key. The promotional
programme includes commissioning independent paid for
research on the Company, most recently from Edison
Investment Research Limited. A copy of the latest
research note is available from the Company's website.
The cost to the Company of participating in these
programmes is matched by the Manager through the
provision of the necessary resources to carry out the
marketing and promotional activities.
Employees and Human Rights
The Company has no employees as the Board has
delegated the day to day management and
administrative functions to the Manager. There are
therefore no disclosures to be made in respect
of employees or human rights.
Modern Slavery Act
Due to the nature of its business, being a company that
does not offer goods and services to customers, the Board
considers that the Company is not within the scope of the
Modern Slavery Act 2015 because it has no turnover. The
Company is therefore not required to make a slavery and
human trafficking statement. In any event, the Board
considers the Company’s supply chains, dealing
predominantly with professional advisers and service
providers in the financial services industry, to be low risk in
relation to this matter.
Environmental, Social and Governance
(“ESG”) Matters
The Investment Manager’s approach to ESG matters is
included on page 34. It should be noted that the Company
does not have a sustainability objective and does not
promote any sustainability characteristics.
The UK Stewardship Code and Proxy Voting
The Company supports the UK Stewardship Code, and
seeks to play its role in supporting good stewardship of the
companies in which it invests. Responsibility for actively
monitoring the activities of portfolio companies has been
delegated by the Board to the Manager which has sub-
delegated that authority to the Investment Manager.
abrdn plc is a tier 1 signatory of the UK Stewardship Code
which aims to enhance the quality of engagement by
investors with investee companies in order to improve
their socially responsible performance and the long-term
investment return to shareholders. While delivery of
stewardship activities has been delegated to the
Manager, the Board acknowledges its role in setting the
tone for the effective delivery of stewardship on the
Company’s behalf.
The Board has also given discretionary powers to the
Manager to exercise voting rights on resolutions proposed
by the investee companies within the Company’s portfolio.
The Manager reports on a quarterly basis on stewardship
(including voting) issues. Further details can be obtained
on the Manager’s website.
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any
other emissions producing sources under the Companies
Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013.
18 abrdn UK Smaller Companies Growth Trust plc
Task Force for Climate-Related financial Disclosures
(“TCFD”)
Under Listing Rule 11.4.22(R), the Company, as a closed
ended investment company, is exempt from complying
with the Task Force on Climate-related Financial
Disclosures (“TCFD”).
Whilst TCFD is currently not applicable to the Company,
the Manager has produced a product level report on the
Company in accordance with the FCA’s rules and
guidance regarding the disclosure of climate-related
financial information consistent with TCFD
Recommendations and Recommended Disclosures.
These disclosures are intended to help meet the
information needs of market participants, including
institutional clients and consumers of financial products, in
relation to the climate-related impact and risks of the
Manager’s TCFD in-scope business. The product level
report on the Company is available on its website.
Discount Control Policy
The Board operates a discount control mechanism which
targets a maximum discount of the share price to the
cum-income net asset value of 8% under normal market
conditions. In pursuit of this objective, the Board closely
monitors the level of the discount and buys back shares in
the market when it believes it is in the best interests of
shareholders as a whole to do so. At each Annual General
Meeting, the Board seeks shareholder approval to buy
back up to 14.99% of the Company’s share capital. Share
buy-backs will only be made where the Board believes it
to be in the best interests of shareholders as a whole and
the making and timing of share buy-backs will be at the
discretion of the Board.
The Board considers that, given the backdrop has
continued to be unfavourable for the UK smaller
companies sector as a whole, evidenced by outflows in
the open ended sector, it is to be expected that the
Company would face discount pressure in common with
most of the peer group. Whilst the Board takes into
account the wider investment trust sector discount levels
when implementing its discount control mechanism, it
remains committed to its long term target of 8% and will
continue to be active in the market when it believes it to be
in the best interests of shareholders.
The Company has a tender offer mechanism in place and
the Board intends to continue to seek shareholder
approval at each Annual General Meeting to enable it to
carry out tender offers on a discretionary basis in
circumstances where the Board believes that share buy-
backs are not sufficient to maintain the discount at an
appropriate level, although it expects that buy-backs
should be the primary mechanism for managing
the discount.
Viability Statement
The Board considers that the Company, which does not
have a fixed life, is a long-term investment vehicle and, for
the purposes of this statement, has decided that five years
is an appropriate period over which to consider its viability.
The Board considers that this period reflects a balance
between looking out over a long-term horizon and the
inherent uncertainties of looking out further than
five years.
Taking into account the Company’s current financial
position and the potential impact of its principal risks and
uncertainties, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due for a
period of five years from the date of this Report.
In assessing the viability of the Company over the
review period, the Directors have focused upon the
following factors:
· The principal risks and uncertainties detailed on pages
14 to 16 and the steps taken to mitigate these risks,
together with the emerging risks identified by the Board.
· The Company is invested in listed securities that are
readily-realisable in normal market conditions and there
is a spread of investments held across a diversified
range of sectors.
· The Company is closed ended in nature and therefore it
is not required to sell investments when shareholders
wish to sell their shares.
· The level of share buy backs undertaken by the
Company.
· The Company’s long-term performance record as
shown on page 24.
Overview of Strate
g
y
Continued
abrdn UK Smaller Companies Growth Trust plc 19
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
· The Company’s level of gearing. The Company had net
gearing of 5.8% as at 30 June 2024. The Company has a
£40 million unsecured loan facility agreement with The
Royal Bank of Scotland International Limited which
expires on 1 November 2025. The Board has set overall
limits for borrowing and reviews regularly the
Company’s level of gearing, cash flow projections and
compliance with banking covenants. The Board has also
performed stress testing and liquidity analysis. In the
event that the facility is not refinanced, there is
considered to be sufficient portfolio liquidity to enable
borrowings to be repaid.
· The Company has cash and money market funds which
at 30 June 2024 amounted to £15.9 million. These
balances allow the Company to meet liabilities as they
fall due.
· The level of ongoing charges.
· There are no capital commitments currently foreseen
that would alter the Board’s view.
· The robustness of the operations of the Company’s third
party service suppliers.
The Directors have also reviewed the revenue and
ongoing expenses forecasts for the coming year and
considered the Company’s Statement of Financial Position
as at 30 June 2024 which shows net current liabilities of
£23.6 million at that date, and do not consider this to be
a concern due to the liquidity of the portfolio which would
enable the Company to meet any short-term liabilities if
required.
In assessing the Company’s future viability, the Board has
assumed that shareholders will wish to continue to have
exposure to the Company’s activities in the form of a
closed ended entity and the Company will continue to
have access to sufficient capital.
In making its assessment, the Board is also aware that
there are other matters that could have an impact on the
Company’s prospects or viability in the future, including
the conflicts in Ukraine and the Middle East, economic
shocks or significant stock market volatility caused by
other factors, and changes in regulation or investor
sentiment.
Future Strategy
The Board intends to maintain the strategic direction
set out in the Strategic Report for the year ending
30 June 2025 as it believes that this is in the best
interests of shareholders.
On behalf of the Board
Liz Airey
Chairman
4 September2024
20 abrdn UK Smaller Companies Growth Trust plc
Introduction
Section 172 (1) of the Companies Act 2006 (the “Act”)
requires each Director to act in the way he/she considers,
in good faith, would be most likely to promote the success
of the Company for the benefit of its members as a whole.
The Board is required to describe to the Company’s
shareholders how the Directors have discharged their
duties and responsibilities over the course of the financial
year under that provision of the Act (the “Section 172
Statement”). This statement provides an explanation of
how the Directors have promoted the success of the
Company for the benefit of its members as a whole, taking
into account, among other things, the likely long-term
consequences of decisions, the need to foster
relationships with all stakeholders and the impact of the
Company’s operations on the environment.
The Purpose of the Company and Role
of the Board
The purpose of the Company is to act as an investment
vehicle to provide, over time, financial returns (both
income and capital) to its shareholders. Investment trusts,
such as the Company, are long-term investment vehicles
and are typically externally managed, have no
employees, and are overseen by an independent non-
executive board of directors.
The Board, which at the end of the year, comprised five
independent non-executive Directors with a broad range
of skills and experience across all major functions that
affect the Company, retains responsibility for taking all
decisions relating to the Company’s investment objective
and policy, gearing, corporate governance and strategy,
and for monitoring the performance of the Company’s
service providers.
The Board’s philosophy is that the Company should
operate in a transparent culture where all parties are
treated with respect and provided with the opportunity to
offer practical challenge and participate in positive
debate which is focused on the aim of achieving the
expectations of shareholders and other stakeholders alike.
The Board reviews the culture and manner in which the
Manager and Investment Manager operate at its
meetings and receives regular reporting and feedback
from the other key service providers. The Board is very
conscious of the ways it promotes the Company’s culture
and ensures as part of its regular oversight that the
integrity of the Company’s affairs is foremost in the way
that the activities are managed and promoted. The Board
works very closely with the Manager and Investment
Manager in reviewing how stakeholder issues are handled,
ensuring good governance and responsibility in managing
the Company’s affairs, as well as visibility and openness in
how the affairs are conducted.
The Company’s main stakeholders have been identified
as its shareholders, the Manager (and Investment
Manager), service providers, investee companies, debt
providers and, more broadly, the environment and
community at large.
How the Board Engages with Stakeholders
The Board considers its stakeholders at Board meetings
and receives feedback on the Manager’s interactions
with them.
Promotin
g
the Success of the Company
abrdn UK Smaller Companies Growth Trust plc 21
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Stakeholder How We Engage
Shareholders Shareholders are key stakeholders and the Board places great importance on
communication with them. The Board welcomes all shareholders’ views and aims to act fairly
to all shareholders. The Manager and Company’s Stockbroker regularly meet with current
and prospective shareholders to discuss performance and shareholder feedback is
discussed by the Directors at Board meetings. Directors meet shareholders at the Annual
General Meeting and the Chairman offers to meet with the Company’s larger shareholders
to discuss their views. In addition, during the year the Board held an online shareholder
presentation at which shareholders had the opportunity to ask questions of the Chairman
and Investment Manager.
The Company subscribes to the Manager’s investor relations programme in order to
maintain communication channels with the Company’s shareholder base.
Regular updates are provided to shareholders through the Annual Report, Half Yearly Report,
monthly factsheets, Company announcements, including daily net asset value
announcements, and the Company’s website.
The Company’s Annual General Meeting provides a forum, both formal and informal, for
shareholders to meet and discuss issues with the Directors and Manager. The Board
encourages shareholders to attend the Company’s Annual General Meeting and to provide
feedback on the Company.
Manager (and Investment Manager) The Investment Manager’s Review on pages 26 to 31 details the key investment decisions
taken during the year. The Investment Manager has continued to manage the portfolio and
other assets in accordance with the mandate agreed with the Company, with oversight
provided by the Board.
The Board regularly reviews the Company’s performance against its investment objective
and the Board undertakes an annual strategy review meeting to ensure that the Company
is positioned well for the future delivery of its objective for its stakeholders.
The Board receives presentations from the Investment Manager at every Board
meeting to help it to exercise effective oversight of the Investment Manager and the
Company’s strategy.
The Board, through the Management Engagement Committee, formally reviews the
performance of the Manager (and Investment Manager) at least annually. More details are
provided on page 54.
Service Providers The Board seeks to maintain constructive relationships with the Company’s service providers
either directly or through the Manager with regular communications and meetings.
The Management Engagement Committee conducts an annual review of the performance,
terms and conditions of the Company’s main service providers to ensure they are performing
in line with Board expectations, carrying out their responsibilities and providing value
for money.
22 abrdn UK Smaller Companies Growth Trust plc
Investee Companies Responsibility for monitoring the activities of portfolio companies has been delegated by the
Board to the Manager which has sub-delegated that authority to the Investment Manager.
The Board has also given discretionary powers to the Manager to exercise voting rights on
resolutions proposed by the investee companies within the Company’s portfolio. The
Manager reports on a quarterly basis on stewardship (including voting) issues.
Through engagement and exercising voting rights, the Investment Manager actively works
with companies to improve corporate standards, transparency and accountability. Further
details are provided on page 17.
The Board monitors investments made and divested and questions the rationale for
investment and voting decisions made.
Debt Providers On behalf of the Company, the Manager maintains a positive working relationship with The
Royal Bank of Scotland International Limited, the provider of the Company’s loan facility, and
provides regular updates on business activity and compliance with its loan covenants.
Environment and Community The Board and Investment Manager are committed to investing in a responsible manner and
the Investment Manager considers Environmental, Social and Governance (“ESG”) factors as
part of the investment decision-making process. Further details are provided on page 34.
Specific Examples of Stakeholder
Consideration During the Year
While the importance of giving due consideration to the
Company’s stakeholders is not a new requirement, and is
considered during every significant Board decision, the
Directors were particularly mindful of stakeholder
considerations as part of the following decisions made
during the year ended 30 June 2024. Each of these
decisions was made after taking into account the short
and long-term benefits for stakeholders.
Portfolio and Investment Performance
The Investment Manager’s Review on pages 26 to 31
details the key investment decisions taken during the year.
The overall shape and structure of the investment
portfolio is an important factor in delivering the
Company’s stated investment objective and is reviewed at
every Board meeting.
As explained in more detail on page 54, during the year
the Management Engagement Committee decided that
the continuing appointment of the Manager is in the best
interests of shareholders.
Management Fee
During the previous year, the Board considered that the
existing structure of fees paid to the Manager made the
Company insufficiently competitive relative to its closest
peers. Accordingly, the Board negotiated a lower fee
structure with the Manager which the Board considers is
more competitive when compared to the other similar
investment trusts in the sector. The new fee structure
became effective on 1 July 2023 and is set out in detail on
page 49.
Dividends
The Board is recommending payment of a final dividend
for the year of 8.3p per Ordinary share. Following payment
of the final dividend, total dividends for the year will
amount to 12.0p per Ordinary share, an increase of 9.1%
compared to the previous year. Although the Company
has a capital growth objective, the Board recognises the
importance of dividends to shareholders.
Share Buy Backs
In accordance with the discount control policy included on
page 18, during the year the Company bought back 14.1
million Ordinary shares to be held in treasury, providing an
accretion to the NAV per share and a degree of liquidity to
the market at times when the discount to the NAV per
share has widened in normal market conditions. It is the
view of the Board that this policy is in the interest of all
shareholders.
Promotin
g
the Success of the Company
Continued
abrdn UK Smaller Companies Growth Trust plc 23
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Shareholder Engagement
During the year, the Board met shareholders at the AGM.
The AGM was held in London in 2023 and will be held in
Edinburgh this year.
To encourage and promote stronger interaction and
engagement with the Company’s shareholders, the Board
also held an interactive online shareholder presentation in
May. At the presentation, shareholders received updates
from the Chairman and Investment Manager and there
was the opportunity for an interactive question and
answer session.
The Board considers that it is very important to maintain
an ongoing dialogue with shareholders to properly
understand their views and to communicate the actions of
the Board.
Consumer Duty
During the previous year, the FCA’s Consumer Duty
Regulations came into effect, introducing new rules for
FCA regulated firms which manufacture or distribute
products and services to retail customers. The Consumer
Duty rules do not apply to the Company but do apply to
the Manager.
During the year, the Board continued to review the
methodology employed by the Manager to assess value
of the Company under the Consumer Duty regulations
and will formally review the Manager's assessment of
value on an ongoing basis.
On behalf of the Board
Liz Airey
Chairman
4 September 2024
24 abrdn UK Smaller Companies Growth Trust plc
Performance (total return)
1 year return 3 years return 5 years return 10 years return
% % % %
Net asset value
AB
+18.1 –20.5 +12.3 +118.2
Share price
B
+21.0 –26.0 +8.6 +105.9
Reference Index
C
+10.0 –13.5 +17.6 +57.6
Peer Group weighted average (NAV) +16.8 –8.8 +27.4 +94.8
Peer Group weighted average (share price) +19.0 –13.1 +25.9 +104.8
A
Cum-income NAV with debt at fair value.
B
Considered to be an Alternative Performance Measure (see pages 97 and 98).
C
Deutsche Numis Smaller Companies plus AIM (ex investment companies) Index.
Source: Morningstar
Long Term Total return of NAV v Share Price v Reference Index
(rebased to 100 at 31 August 2003)
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Source: Refinitiv Datastream
Share price total return Net asset value total return Reference index total return
Performance
abrdn UK Smaller Companies Growth Trust plc 25
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Premium/(discount) of Share Price to NAV v Peer Group
Five years ended 30 June 2024
-20%
-15%
-10%
-5%
0%
5%
30/06/19 30/06/20 30/06/21 30/06/22 30/06/23 30/06/24
Source: Refinitiv Datastream
Company premium/(discount) Peer group discount Discount control mechanism threshold
Ten Year Financial Record
Year to 30 June 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Per Ordinary share (p)
Net revenue return 6.76 6.76 6.42 7.24 8.80 6.74 6.43 9.07 12.44 13.12
Ordinary dividends
paid/proposed
5.80 6.60 6.70 7.00 7.70 7.70 7.70 8.10 11.00 12.00
Net asset value
A
336.89 345.43 456.60 552.93 539.54 527.73 737.97 530.37 482.95 556.19
Share price 300.00 316.00 431.00 500.00 491.50 482.00 698.00 453.00 414.00 486.50
Discount(%)
A
10.9 8.5 5.6 9.6 8.9 8.7 5.4 14.6 14.3 12.5
Ongoing charges ratio (%)
B
1.19 1.13 1.08 1.04 0.90 0.91 0.88 0.82 0.95 0.92
Gearing ratio (%)
C
4.1 3.6 1.7 3.6 1.5 (0.34) 5.7 5.1 2.5 5.8
Shareholders’ funds (£m)
D
243 241 324 408 543 528 728 499 427 413
Revenue reserves (£m)
E
5.83 6.50 6.26 8.30 10.87 8.80 7.53 8.81 12.47 13.53
A
Calculated with debt at par value and diluted for the effect of Convertible Unsecured Loan Stock conversion from 01 July 2013 until 30 June 2017. From 30 June 2018, net asset
value is calculated with debt at par value.
B
Calculated as an average of shareholders’ funds throughout the year and in accordance with updated AIC guidance issued in October 2020, to include the Company’s share of
costs of holdings in investment companies on a look-through basis.
C
Net gearing ratio calculated as debt less cash invested in AAA-rated money market funds and short-term deposits divided by net assets at the year end.
D
Increase in 2018 included the effect of the merger with Dunedin Smaller Companies Investment Trust PLC.
E
Revenue reserves are reported prior to paying the final dividend for the year.
26 abrdn UK Smaller Companies Growth Trust plc
The net asset value (“NAV”) total return of the
Company for the year ended 30 June 2024 was
18.1%, while the share price total return was 21.0%.
By comparison, the UK smaller companies sector as
represented by the Deutsche Numis Smaller
Companies plus AIM (ex investment companies)
Index (the “reference index”) delivered a total return
of 10.0%.
Equity Markets
During the year under review, markets proved healthier
after a challenging two years. The top-down pressure of
inflation came under control in the UK and other regions
although, relative to expectations, it is worth noting that
interest rates have remained higher for longer.
The UK stock market, as represented by the FTSE All-
Share Index, performed strongly over the period, with a
total return of 13.0%. The FTSE 100 Index’s total return of
12.8% underperformed the FTSE 250 Index, the latter of
which generated a total return of 13.9%. The mid cap
universe was therefore the best performing group within
the UK, outperforming the reference index. The FTSE AIM
Index was the laggard, delivering just a 3.4% return.
Investors continued to remain cautious about the UK
economic picture, however the GDP data was somewhat
reassuring and, relative to other major economies in
Europe, the UK held up well.
The only real interruption to the performance of the UK
market was during September and October 2023.
However, the sharp rebound from the October lows has
delivered a fairly smooth positive return pathway since
then. UK consumer spending has improved given that
inflation has receded from its peak and wage growth
remains positive. However, many households continue to
have the burden of higher mortgage rates or rental costs.
The domestic labour market has remained resilient, with
employment levels high, and good job availability across a
number of sectors.
The period was dominated by the inflation and interest
rate picture, with inflation subsiding steadily over the
period, with some visible steps down in areas such as
energy prices and food. Along with other major
economies such as the US, interest rates in the UK have
remained at higher levels for longer than many
economists projected.
Geopolitical tensions remained an ongoing theme during
the period; the continuation of the war in Ukraine, the
heightened conflict in Israel since October, as well as
ongoing issues surrounding relations between China and
the West. As we move through the second half of 2024,
the outlook is impacted by the various major elections
globally, with well over half of the world’s population
expected to be going to the polls during 2024. As always,
the US Presidential Election is the highest profile and is only
two months away. However, as the voting in some
international geographies has already completed, we
have seen increased levels of uncertainty and markets
have experienced increased volatility in some regions.
“Economists and strategists have
noticeably turned more positive on
both the UK and small and mid cap
sectors. Attractive valuations have
been a key aspect of their investment
case, combined with strong resilience
in earnings across company
reporting.”
Economists and strategists have noticeably turned more
positive on both the UK and small and mid cap sectors
through the final quarter of the financial year. Attractive
valuations have been a key aspect of their investment
case, combined with strong resilience in earnings across
company reporting. It should not be forgotten that, even in
the smaller companies space, around half the revenue of
the reference index is generated overseas. With
allocations to the UK and to smaller companies having
shrunk over the years, particularly from UK pension funds,
that series of outflows has stabilised and is showing
tentative signs of reversal. With many starting positions at
all-time lows, the more positive view on the asset class
could help to drive markets higher.
Mergers and Acquisitions (“M&A”) have continued to be a
strong feature of UK markets, not just in the smaller
companies sector. As the period progressed, we saw an
increased proportion of the bids being for FTSE 250 and
FTSE 100 companies. Initially this started as a dominance
of private equity bidders but has broadened out in 2024 to
include many bids from corporate buyers. Whilst this has
created some headline concerns around shrinkage in the
UK market, we are seeing attractive premiums in these bid
Investment Mana
g
er’s Review
abrdn UK Smaller Companies Growth Trust plc 27
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
situations, delivering good returns for shareholders. The
average bid premium in UK in the first half of 2024 was
40%. There has been a lot of overseas appetite in deals,
representing about 60% in the first six months of 2024.
We have also seen an increase in IPO activity, which
over time should generate fresh companies in our
investable universe.
One final point to highlight is the increasing pressure to
introduce changes to stimulate the market, whether it be
through stamp duty changes, lower costs of listing, lighter
regulation, or more control over asset class allocations.
We are confident these voices are now being heard, but
we will have to wait and see what is implemented and the
time horizon of these policies.
Performance
Overall through the year, the net asset value (“NAV”) grew
by 18.1% on a total return basis, outperforming the
reference index total return of 10.0%.
The more stable backdrop we have been waiting for did
materialise this year and the focus of the markets
reverted to stock specifics and reporting, rather than
being dominated by top-down factors. The consistency of
outperformance has been one of the most pleasing
aspects for us, as portfolio managers, this year; the
Company outperforming the reference index in 9 of the
12 months (only July 2023, Nov 2023 and April 2024
delivering relative underperformance).
The style factors driving markets, such as either growth
stocks or value stocks being in favour, has been more
settled this period. Value outperformed growth in the first
half of the period, but value and growth both delivered
similar returns in the market in the second half. We would
characterise style factors as a slight headwind to our
strategy during the period, but neutralising as we finished
the year. Performance has predominantly been driven by
stock specifics, companies reporting strong trading and
earnings upgrades, with share prices responding
appropriately, which is a distinct improvement on the
situation over the last couple of years. Attribution and style
analysis show that the outperformance has been driven
by stock selection, rather than our style of Quality, Growth
& Momentum being in favour.
Whilst we saw four successful bids for companies in the
portfolio during the year, all at attractive premiums, this
has not been the main driver of performance. These
companies were Ergomed, Smart Metering Systems,
Mattioli Woods, and Spirent. Overall, those four
companies contributed 198 bps of relative performance
during the year.
Performance of the Company and Reference Index (Monthly)
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Jul 23 Aug 23 Sep 23 Oct 23 Nov 23 Dec 23 Jan 24 Feb 24 Mar 24 Apr 24 May 24 Jun 24
AUSC NAV Total Return Reference Index Total Return AUSC Out / (under) performance
Source: Refinitiv Datastream.
28 abrdn UK Smaller Companies Growth Trust plc
The five leading positive contributors to relative
performance during the year were as follows (the
year end portfolio weightings are included on pages
37 and 38):
· Ashtead Technology +153bps (share price performance
+104% since purchase) The company was a new
addition to the portfolio during the year and has
delivered very strong performance. The management
team has displayed a strong track record of upgrading
earnings, from both organic outperformance and
acquisitions since the IPO in late 2021. The business has
benefitted from supportive end markets in oil and gas,
and the green energy transition driving investment in
renewables. Visibility is aided by strong customer
backlogs, and we continue to see increased customer
propensity to rent. The company generates strong free
cash flow which the management team is re-investing
into the business, and balance sheet strength provides
scope for further M&A.
· Ergomed +102ps (+36%) The shares contributed to
performance following the recommended offer from
Permira, the European private equity firm, at an
attractive all-cash price of £13.50 per share.
· Diploma +98bps (+39%) features in the top 5 contributors
again this year, further highlighting its long-term track
record. The share price has been driven by ongoing
delivery of the growth strategy, with acquisitions that
position Diploma behind structurally growing end
markets, deepening penetration of its regions, and
extending product ranges.
· Cranswick +85bps (+37%) has a long track record for
delivering growth, evidenced by its 34-year unbroken
dividend growth history. Over time, the company has
broadened its core protein focus, created new
consumer categories and developed an exemplary
reputation with customers. The long-term success is
underpinned by the company's focus on achieving
"carcase value maximisation", requiring a constant
understanding of consumer trends and customer
needs, and an ability to invest to provide capacity and
maintain its industry-leading position in efficiency.
· Hilton Food Group +85bps (+44%) has redeemed itself
after being a bottom 5 contributor last year. Hilton is very
much back on track of consistency of delivering, and its
market position reaffirmed by the work it did with
customers after the inflationary challenges in 2022. Over
the past year, its organic execution has been strong, and
the shares have been buoyed by the announcement of
new customer wins, including Walmart in Canada.
The five weakest contributors to relative performance
during the year were as follows (the year end portfolio
weightings are included on pages 37 and 38):
· CVS Group -130bp (-49%) The share price was hit badly
by the Competition Markets Authority (“CMA”)
announcement of a review into the veterinary industry-
focusing on price, consumer visibility and branding. We
expect the outcomes to be manageable for CVS and
have retained the position. Whilst CVS’s Australian
business is progressing well and UK trading has been
resilient, the CMA review places a near term cap on the
share price.
· Big Technologies -115bps (-44%) Performance has
been lacklustre, with a lack of big wins and one contract
loss, impacting sentiment. Underlying growth and new
contract wins should help offset that, but nearer term
the business is in a no growth scenario. We continue to
have a holding.
· XP Power -75bps (-25%) Despite management’s
confidence that the business could trade out of a high
net debt position, XP Power then issued a profit warning.
Having had a series of disappointments, our confidence
in the management team diminished. The balance
sheet was strained and an equity issue looked
necessary. Together with earnings downgrades, the
proposition deteriorated and we exited the position.
· Team17 -72bps (-24%) The gaming industry has had a
challenging period. While demand dynamics remain
attractive, industry-wide unreleased content backlogs,
inflation in intellectual property and content costs and
competition for gaming hours have led to pressure
across the sector. With a change in management and a
longer than expected continuation of a challenging
environment, we exited the position.
· discoverIE -72bps (-20%) The shares suffered during the
period from ongoing cyclical weakness impacting
forecasts. Management has worked hard to protect
margins, through a combination of pricing resilience,
tight cost control and margin accretive M&A, but the
end market weakness has weighed on the shares, and
there has been less opportunity to acquire businesses
given the higher interest rate environment. We continue
to hold the shares, but have reduced our exposure.
Investment Mana
g
er’s Review
Continued
abrdn UK Smaller Companies Growth Trust plc 29
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Dealing and Activity
Portfolio turnover was around 28%, which is higher than
has been the case in recent years. This is reflective of
where we are in the cycle and changing fortunes of
companies. Over the year, we added 13 new positions,
and exited 18 holdings. We took part in one IPO,
Raspberry Pi.
Raspberry Pi makes single board computers and has sold
60 million units in just over a decade. It is a founder-run
business, having been created as part of the Raspberry Pi
Foundation (its largest shareholder prior to listing) which
focused on driving the interest of Science, Technology
Engineering and Maths (“STEM”) subjects to children. Its
products are used not just by the educational and
enthusiast markets, but across industrial applications
where they are embedded in products, such as for
operating lifts or for automating manufacturing lines in
factories. The company has significant intellectual
property (“IP”) which helps create barriers to entry, as well
as being able to deliver attractive margins whilst keeping
prices low. We believe this will be a unique listed asset
within the UK market.
Ashtead Technology is a subsea equipment rental business
within oil and gas and renewables markets globally, whilst
Hunting is an oil services business also with global
exposures. XPS Pensions,
a pensions advisory,
administrative and actuarial business, has been a strong
performer and is now one of the top holdings in the
portfolio. Premier Foods (branded food products) has
vastly improved in recent years and becoming
unshackled from its pension liabilities is investing in
proposition and brand. Johnson Service is a textile rental
business, emerging from Covid in a strong market position.
Cairn Homes, the Irish housebuilder, is operating in
healthier markets and with government support for the
industry and its business. Clarkson is a global leading
shipbroker, whilst Boku is a global mobile payment
solutions business with blue chip customers. Renew
Holdings is a provider of essential engineering services for
critical infrastructure, and Volex is a manufacturing
specialist for power products. Jet2 (the only company that
had previously been held in the portfolio) is the package
holiday business, which also sells flights only, which has
emerged from Covid with a strong balance sheet,
investing for growth, and with loyal repeat customers.
Lastly, Chemring is a market leader in countermeasures,
sensory and logistics for defence, as well as having a
strong cyber business, Roke.
Of the 18 holdings exited over the period, four were
companies which were subject to takeover activity;
Spirent (testing and solution for networks), Mattioli Woods
(financial services with focus on wealth management),
Smart Metering Systems (residential utilities metering
services, and grid battery storage), and finally Ergomed
(clinical research). Elsewhere, many of our exits were
characterised by businesses which were experiencing
cyclical slowdowns and the recovery had become
protracted and with limited visibility. These included FDM
(specialist people resource), Impax
(sustainable
investment), Marshalls (landscaping products), Focusrite
(hardware for content production), GB Group (identity
verification and fraud detection), Team 17 (video games),
Kainos (digitisation programs), Henry Boot (land and
property development), Future (specialist media
platform), Motorpoint (second hand car sales), Safestore
(self-storage), Serica (oil and gas production), XP Power
(electronics components for power products) and
Watches of Switzerland (premium watches and jewellery).
“Over the year, we added 13 new
positions, and exited 18 holdings. We
took part in one IPO.”
Notable top ups during the year include Tatton Asset
Management which has grown assets significantly, and
Alpha Group (previously called Alpha FX) where its
expansion into alternative banking solutions has been
executed well. We also topped up AJ Bell which has been
showing strong trading and growth, Volution which has
proved resilient through volatile end markets, Diploma
which has shown consistent organic and acquisitive
growth, and lastly Paragon Banking where we believe
credit quality and market position will deliver growth
through tougher macro periods.
We have reduced exposure to some companies where
they have experienced tougher periods of trading, all of
which are yet to fully recover but are investment cases we
continue to support. These include Robert Walters (global
recruitment specialist), Treatt (flavourings for beverages),
Big Technologies (electronic monitoring), Marlowe
(business support services) and Auction Technology
(platform for auction markets).
30 abrdn UK Smaller Companies Growth Trust plc
Gearing
The level of gearing (net of cash) at 30 June 2024 was
5.8% (2023: 2.5%). Given our improving outlook, we
increased the gearing during the year and are now fully
drawn on the £40 million loan facility. We continue to hold
cash in the portfolio to ensure we can participate in
market opportunities and are not liquidity constrained.
Revenue Account
Dividend income generated by the portfolio (excluding
capital receipts) decreased by 9.8% over the year, with
the main impact being the effect on the portfolio of share
buy backs undertaken during the year – dividend income
stated on a pence per share basis was marginally higher
than last year. Interest rates remaining high also meant
that the Company received £887,000 in interest income
during the year.
The dividend outlook for the Company, seen through its
income generation from the underlying holdings, has
remained strong. Both the resilience of earnings, aided by
business models and by solid trading, as well as the growth
being exhibited, has helped drive the Revenue Account
strength. The ability of companies to provide dividend
returns to shareholders has been supported by balance
sheet strength, a focus of our investment process.
Meanwhile, we also see dividend strength as a
reassurance of the confidence of underlying
management teams.
While we consider it a good discipline for an investee
company to have a policy of paying a dividend to
shareholders on a regular basis, it is not a prerequisite for
us to invest. There are currently four holdings in the
portfolio which we do not expect to be dividend payers in
the near future, currently re-investing back into their
businesses to drive growth; Auction Technology, Big
Technologies, Marlowe and Boku.
There were two revenue special dividends received during
the year; Bytes Technology and Hollywood Bowl, which in
aggregate amounted to £315,000 or 2.7% of investment
income. This is down on the 7.2% that special dividends
represented in 2023 because companies are more
confident in the outlooks and keen to invest either
organically or through bolt on acquisitions.
Outlook
We wrote last year about the overhang of the market
waiting for a recession which didn’t really materialise.
Since the market turn in October 2023, UK stock markets
have been buoyant and consistent in delivery. We believe
a driver of that turn was the awareness of how cheaply
valued UK equities were; relative to international peers,
their own history, and their earnings prospects. These
points still remain true as we go through the second half of
2024 and should continue to support rising markets. This is
further evidenced by the frequency and premium level of
bids for UK listed assets. The level of premiums that
companies are being bid for is evidence of the value
inherent in these markets, and the return of a more
positive sentiment towards UK equities that we expect to
continue. There will always be examples where
shareholders feel the premium should be higher or they
would have rather continued to be invested for the long
term, but overall it is helping to drive awareness of the
returns potential. To combat this market shrinkage we
have also seen the IPO market open up again, with the
Raspberry Pi listing (in which we took part) being heavily
oversubscribed by investors. It has been encouraging to
see such a high quality unique asset choosing to list in its
home market.
“We expect to see interest rates come
down, and history would suggest this
to be positive, not just for absolute
market levels, but in particular for
small cap relative to large cap.”
What other catalysts lie ahead for UK markets? The
domestic economic data has continued to turn more
positive, both across business and consumer aspects. We
expect to see interest rates come down, and history would
suggest this to be positive, not just for absolute market
levels, but in particular for small cap relative to large cap.
The number of elections, particularly the US Presidential
Election, might act as a short-term market overhang, but
outcome dependent this could also drive markets further
onwards once the results are known. In the UK, the new
Labour government has made a point of highlighting its
awareness of the need to stimulate the economy.
However, it is too early to predict whether the government
or any regulatory body can successfully enact meaningful
changes that will actually stimulate UK markets,
something we would very much support and have been
active in sharing views on.
Investment Mana
g
er’s Review
Continued
abrdn UK Smaller Companies Growth Trust plc 31
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Our screening tool, The Matrix, continues to perform well
and identifies companies it believes are displaying Quality,
Growth and Momentum dynamics. The Matrix will
continue to be valuable as we move through economic
cycles and by interacting daily with The Matrix, we believe
we can keep our research up to date. The market is
continuing to evidence that earnings momentum, seen
through upgrades to expectations, is a strong driver of
share price performance. There has been more of a flight
to quality this year, which aligns with our investment
process, but in particular the market is looking to avoid
poor quality exposures. Quality characteristics have
helped companies thrive in the inflationary environment,
protecting margins and investing consistently even
through quieter periods, all helping to capture market
shares. Our investment process has been running for over
25 years in UK smaller companies and is seasoned
through five economic cycles. This gives us confidence to
be able to adapt the portfolio to the prevailing economic
and market conditions. As highlighted earlier, value as a
factor is still performing well in the UK small cap market,
and The Matrix helps us evaluate where those exposures
lie; many quality growth companies show value
characteristics given market conditions in recent years.
Markets tend to anticipate improvements, and turning
points in the past have been when the outlook is often
close to being at its most pessimistic. The first half of the
period was in that category; inflation was persisting,
interest rates remained high, and the consumer squeeze
was ongoing. A combination of that environment easing
and improving, as well as the market looking towards the
future, has helped to drive this turn in markets. Smaller
companies will always be an asset class with relatively
high volatility, but we believe the current time is an
attractive entry point for new capital, where investors are
able to take a longer-term investment horizon.
Despite strong absolute and relative performance during
this reporting period, the Company’s discount to NAV
remains stubbornly wide. UK smaller companies is not
alone as an asset class in experiencing this. Whilst we have
seen a growing interest in the asset class in recent months,
we feel the inflow of money has yet to be seen. This can be
evidenced through open ended funds flow data which
remains lacklustre. Discounts are narrowed by demand,
so we would hope this can be seen during the current
2024/25 financial year given the brighter outlook.
Abby Glennie and Amanda Yeaman
abrdn
4 September 2024
32 abrdn UK Smaller Companies Growth Trust plc
abrdn UK Smaller Companies Growth
Trust plc offers an actively managed
portfolio of equity shares of smaller
and mid-sized companies listed in the
UK. Over the longer term, smaller
company returns have outstripped
those of their large-cap peers.
Management
The Company’s Manager is abrdn Fund Managers
Limited, a wholly owned subsidiary of abrdn plc. Abby
Glennie joined the Smaller Companies Team at abrdn in
2016. She was appointed as Co-Manager for the
Company in November 2020 and Lead Manager in
January 2023. Amanda Yeaman joined the team in 2019
and was appointed as Deputy Manager in January 2023.
They are both part of a team focusing on investing in
smaller and mid-sized companies.
Investment Philosophy and Process
The Board has identified that abrdn has a proven and
repeatable investment process, which has delivered
strong returns to shareholders over the last 20 years. The
investment process adheres to the abrdn Smaller
Companies’ Quality, Growth and Momentum led
philosophy. The Investment Manager aims to select lower
risk smaller companies in growing markets where
business momentum is positive, predictable and
improving. The Investment Manager has a long-term
investment horizon, aiming to maximise returns by running
winners in the long-term and moving on from holdings
when the investment case no longer stacks up. The
investment process takes into account abrdn’s
Environmental, Social and Governance principles.
The Matrix
In managing the Company’s investment portfolio, the
Quality, Growth and Momentum philosophy is enhanced
by using abrdn’s proprietary screening tool, ‘The Matrix’, to
focus research efforts and the stock selection process.
The Matrix is a quantitative screening tool assessing
potential and current investments on 12 separate proven
indicators of financial performance. It is a powerful tool in
helping the Investment Manager identify a shortlist of
investable stocks for further analysis and monitoring the
performance and prospects of the portfolio. Stocks that
are identified in this way are then subjected to further
analysis and may be selected for the portfolio following
discussions with company management.
Investment Process
abrdn UK Smaller Companies Growth Trust plc 33
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
When building a portfolio of smaller
companies, the Investment Manager
screens stocks using The Matrix and
also considers a number of qualitative
factors to help identify the best
investment opportunities.
1. Sustainable growth
Consistency of growth provides opportunities for
companies to compound growth at attractive rates,
aligning with strong earnings and dividend growth. This
also helps reduce potential volatility.
2. Quality
The strength of each company’s relationships with its
customers or clients, the existence and importance of
long-term contracts and the degree to which the
company has any element of pricing power is important
as it allows the company to pass on any cost increases
and thereby maintain margins. The Investment Manager
will typically avoid companies with high or unsustainable
levels of debt.
3. Buy for the long-term
Identify the great companies of tomorrow and then hold
them for the long-term. This reduces the financial drag of
high trading volumes.
4. Concentrate the effort
The Matrix helps identify the likely candidates for inclusion
in the portfolio and reduces the risk that effort is spent on
stocks that will not fulfil the criteria for inclusion within
the portfolio.
5. Management longevity
Founders retaining positions of authority within the
companies after flotation, along with longevity of tenure
by CEOs are a positive signal.
6. Valuation
Whilst not the primary basis of investment
recommendations, valuation is considered in all
investments and is embedded within The Matrix.
34 abrdn UK Smaller Companies Growth Trust plc
The Company does not have an
objective that promotes sustainable
characteristics. Environmental, social
and governance (“ESG”) factors are,
however, considered as part of the
Investment Manager’s process.
ESG Factors
The Investment Manager considers ESG risks and
opportunities for all of its investments and thus ESG
considerations are taken into account as part of the
investment process. The Investment Manager is of the
view that a full and thorough assessment of ESG factors,
alongside other financial and fundamental factors, allows
better investment decisions to be made.
ESG analysis is a core constituent in the “Quality” analysis
of the Investment Manager’s fundamental research.
Especially for smaller companies, both risks and
opportunities matter, and thus the research approach and
analysis takes this into account.
Through the utilisation of a third party research provider
such as MSCI and, more recently abrdn’s in-house ESG
rating tools, the Investment Manager is able to identify,
where appropriate, leaders and laggards, areas of
weakness and areas of strength. Ratings processes for
smaller companies can be less accurate given data
availability and coverage, and therefore the engagement
and fundamental research the Investment Manager and
its ESG equity analysts carry out with the investee
companies is critical in adding value and ensuring the
most important ESG risks and opportunities are
well identified.
Finally, as part of broader stewardship activities, the
Investment Manager participates actively in the voting
process of the holdings in the portfolio, in line with
best practice.
Investment Process
Continued
abrdn UK Smaller Companies Growth Trust plc 35
Portfolio
The Investment Manager has a long-
term investment horizon, aiming to
maximise returns by running winners
in the long-term and moving on from
holdings when the investment case
no longer stacks up.
Investments in the Construction and
Materials sector represent 7.1% of
the portfolio.
36 abrdn UK Smaller Companies Growth Trust plc
As at 30 June 2024
Diploma
Hill & Smith
A global business supplying specialised
technical products and services, with a
focus on three sectors; Life Sciences,
Seals and Controls.
A business involved in the design,
manufacture and supply of products for
the construction and infrastructure
industries
JTC
XPS Pensions
A global professional service business,
with a focus on fund, corporate and
private client services, including fund
administration.
A leading UK consulting and
administration business, specialising in
the pensions and insurance sectors.
Cranswick
Hilton Food
A high-quality, vertically-integrated
pork and chicken products company
operating in the UK.
Builds and operates large scale, highly
automated food processing,
manufacturing and logistics services for
leading retail and food services
customers.
Morgan Sindall
Ashtead Technology
A UK based construction and
regeneration company.
A leading provider of equipment rental
solutions, advanced underwater
technologies and support services to
the global offshore energy sector.
4imprint
Paragon Banking
A direct marketer of promotional
products, with a focus on the US.
A UK based company that provides
specialist banking services.
Ten Lar
g
est Investments
abrdn UK Smaller Companies Growth Trust plc 37
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 30 June 2024
Valuation Total Valuation
2024 portfolio 2023
Company Sector £’000 % £’000
Diploma Industrial Support Services 17,512 4.0 13,709
Hill & Smith Industrial Metals and Mining 17,190 3.9 13,317
JTC Investment Banking and Brokerage Services 17,057 3.9 14,562
XPS Pensions Investment Banking and Brokerage Services 16,383 3.8 -
Cranswick Food Producers 15,887 3.6 12,482
Hilton Food Food Producers 15,191 3.5 11,518
Morgan Sindall Construction and Materials 15,099 3.5 10,980
Ashtead Technology Oil, Gas and Coal 15,008 3.4 -
4imprint Media 14,692 3.4 18,408
Paragon Banking Finance and Credit Services 14,351 3.3 8,500
Top ten investments 158,370 36.3
Bytes Technology Software and Computer Services 13,211 3.0 15,071
Alpha Financial Markets Industrial Support Services 12,419 2.8 14,542
Gamma Communications Telecommunications Service Providers 11,531 2.6 12,015
AJ Bell Investment Banking and Brokerage Services 11,361 2.6 5,577
Hollywood Bowl Travel and Leisure 11,242 2.6 9,550
Volution Construction and Materials 10,924 2.5 6,524
Sirius Real Estate Real Estate Investment Trusts 10,837 2.5 6,384
GlobalData Media 10,286 2.4 8,998
Mortgage Advice Bureau Finance and Credit Services 10,192 2.3 7,803
Jet2 Travel and Leisure 10,091 2.3 -
Top twenty investments 270,464 61.9
Games Workshop Leisure Goods 9,265 2.1 14,771
Tatton Asset Management Investment Banking and Brokerage Services 9,232 2.1 4,000
Hunting Oil, Gas and Coal 8,691 2.0 -
Coats General Industrials 8,487 1.9 9,036
Alpha Group Investment Banking and Brokerage Services 8,076 1.9 3,799
Johnson Service Industrial Support Services 7,986 1.8 -
discoverIE Electronic and Electrical Equipment 7,791 1.8 15,023
Craneware Health Care Providers 7,466 1.7 4,510
Premier Foods Food Producers 6,982 1.6 -
Cairn Homes Household Goods and Home Construction 6,819 1.6 -
Top thirty investments 351,259 80.4
Investment Portfolio
38 abrdn UK Smaller Companies Growth Trust plc
As at 30 June 2024
Valuation Total Valuation
2024 portfolio 2023
Company Sector £’000 % £’000
Telecom Plus Telecommunications Service Providers 6,724 1.5 11,247
Next 15 Media 6,424 1.5 8,657
CVS Consumer Services 6,391 1.5 13,071
Chemring Aerospace and Defense 6,145 1.4 -
Midwich Industrial Support Services 5,665 1.3 8,420
Boku Industrial Support Services 5,200 1.2 -
Volex Electronic and Electrical Equipment 4,988 1.1 -
Clarkson Industrial Transportation 4,872 1.1 -
Liontrust Asset Management Investment Banking and Brokerage Services 4,849 1.1 3,391
Auction Technology Software and Computer Services 4,775 1.1 8,278
Top forty investments 407,292 93.2
Big Technologies Software and Computer Services 4,245 1.0 11,053
Marlowe Industrial Support Services 4,091 0.9 4,376
Treatt Chemicals 3,749 0.9 7,966
Raspberry Pi Technology Hardware and Equipment 3,610 0.8 -
Ricardo Construction and Materials 3,399 0.8 3,566
LBG Media Media 3,350 0.8 3,064
Robert Walters Industrial Support Services 3,079 0.7 5,943
YouGov Media 2,653 0.6 6,602
Renew Holdings Construction and Materials 1,221 0.3 -
Total portfolio 436,689 100.0
All investments are equity investments.
Investment Portfolio
Continued
abrdn UK Smaller Companies Growth Trust plc 39
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 30 June 2024
Portfolio weighting
2024 2023
% %
Basic Materials 4.8 4.8
Chemicals 0.9 1.8
Industrial Metals and Mining 3.9 3.0
Consumer Discretionary 18.8 23.9
Consumer Services 1.5 3.0
Household Goods and Home Construction 1.6 -
Leisure Goods 2.1 5.6
Media 8.7 11.5
Personal Goods - 1.4
Retailers - 0.2
Travel and Leisure 4.9 2.2
Consumer Staples 8.7 5.4
Food Producers 8.7 5.4
Energy 5.4 1.4
Oil, Gas and Coal 5.4 1.4
Financials 21.0 12.8
Finance and Credit Services 5.6 -
Investment Banking and Brokerage Services 15.4 12.8
Health Care 1.7 3.9
Health Care Providers 1.7 1.0
Pharmaceuticals and Biotechnology - 2.9
Industrials 27.1 23.0
Aerospace and Defense 1.4 -
Construction and Materials 7.1 6.1
Electronic and Electrical Equipment 2.9 1.4
General Industrials 1.9 2.1
Industrial Support Services 12.7 13.4
Industrial Transportation 1.1 -
Real Estate 2.5 4.3
Real Estate Investment and Services - 2.4
Real Estate Investment Trusts 2.5 1.9
Technology 5.9 15.2
Software and Computer Services 5.1 11.4
Technology Hardware and Equipment 0.8 3.8
Telecommunications 4.1 5.3
Telecommunications Service Providers 4.1 5.3
Total 100.0 100.0
Sector Distribution of Investments
40 abrdn UK Smaller Companies Growth Trust plc
Sector Allocation 2024
27.2%
21.0%
18.6%
8.7%
5.9%
5.4%
4.8%
4.2%
2.5%
1.7%
Industrials
Financials
Consumer Discretionary
Consumer Staples
Technology
Energy
Basic Materials
Telecommunications
Real Estate
Health Care
Sector Allocation 2023
24.0%
23.0%
15.0%
12.8%
5.4%
5.3%
4.8%
4.4%
3.9%
1.4%
Consumer Discretionary
Industrials
Technology
Financials
Consumer Staples
Telecommunications
Basic Materials
Real Estate
Health Care
Energy
Investment Portfolio by Sector
abrdn UK Smaller Companies Growth Trust plc 41
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Market cap exposure 2024
85.6%
4.0%
5.7%
2.3%
2.4%
Deutsche Numis Smaller Companies plus AIM
(ex investment companies)
FTSE 100*
FTSE 250*
FTSE AIM*
Other*
Market cap exposure 2023
82.7%
17.3%
Deutsche Numis Smaller Companies plus
AIM (ex investment companies)
FTSE 250*
* Consists of holdings which are not constituents of the Deutsche Numis Smaller Companies plus AIM (ex investment companies) Index.
Market Cap Exposure
42 abrdn UK Smaller Companies Growth Trust plc
XPS Pensions
The UK pensions services market is facing a period of
significant regulatory change, creating increasing
complexity for companies and pension trustees. The new
General Code of Practice and GMP (“Guaranteed
Minimum Pension”) requirements are but a few of the
regulatory factors that drive customer demand and a
potential structural shift to outsourcing of in-house
pension undertakings. XPS Pensions (“XPS”) is well
positioned to capitalise on these supportive trends. XPS’s
three core service lines, Actuarial & Consulting, Investment
& Consulting and Administration, are highly regarded by
existing customers and have resulted in high-profile
contract wins. The Investment Manager believes that XPS
has the potential to sustain high revenue growth and
expand margins over the medium term. A strong balance
sheet provides financial flexibility to broaden its service
capabilities and participate in mid-market consolidation.
The business has a high Matrix score, with a strong market
environment, attractive financials and a track record of
positive earnings momentum.
Investment Case Studies
abrdn UK Smaller Companies Growth Trust plc 43
Cairn Homes
High Matrix scoring Cairn Homes is Ireland’s largest
housebuilder and 2024 is likely to show a step-change in
growth in both revenue and profits and an industry leading
return on equity. The returns profile of Cairn's business has
transformed for two key reasons. Firstly, the Irish state has
implemented multiple policies to accelerate supply of new
housing, including supporting first-time buyers and
funding the delivery of affordable housing. Importantly,
there are growing opportunities to forward fund
developments, reducing the amount of the company’s
capital tied up in developments. Secondly, Cairn has
unlocked around a third of its balance sheet value by
delivering first revenues from its Clonburris development
last year, which is expected to underpin volumes into the
medium term. The company’s well established scale
platform has put it in an exceptionally strong position and
the demand for its new homes remains high as evidenced
by the record performance in 2023. The Investment
Manager considers that the company’s asset backed
balance sheet and mature scale platform puts it in a
uniquely strong position to deliver significant levels of
housing to both private and public markets.
44 abrdn UK Smaller Companies Growth Trust plc
Governance
Investments in the
Industrial Transportation
sector represent 1.1% of
the portfolio.
abrdn UK Smaller Companies Growth Trust plc 45
The Company is committed to high
standards of corporate governance and
applies the principles identified in the UK
Corporate Governance Code and the
AIC Code of Corporate Governance.
All Directors are considered by the Board
to be independent of the Company and
the Manager and free of any material
relationship with the Manager.
46 abrdn UK Smaller Companies Growth Trust plc
Liz Airey
Independent Non-Executive Chairman
Experience:
Liz Airey was, until March 2020, non-executive Chairman
of Jupiter Fund Management plc. She is a non-executive
director of BlackRock Frontiers Investment Trust plc and
Kirk Lovegrove & Company Limited, an advisory board
member of Ownership Capital BV and Chair of Trustees of
the Rolls-Royce UK Pension Fund. She has previously been
a non-executive director of Tate & Lyle plc, Dunedin
Enterprise Investment Trust plc, JP Morgan European
Smaller Companies Trust plc, Zetex plc and AMEC plc. In
her executive career, Liz was Finance Director of
Monument Oil and Gas plc, a post she held from 1990 until
the sale of the company to Lasmo plc in 1999.
Length of service:
5 years, appointed a Director on 21 August 2019 and
Chairman on 31 March 2020
Committee membership:
Management Engagement Committee and Nomination
Committee (Chairman)
Contribution:
The Directors have reviewed the contribution of Liz Airey
in light of her proposed re-election at the AGM and have
concluded that she has continued to chair the Board
expertly, fostering a collaborative spirit between the Board
and Manager whilst ensuring that meetings remain
focused on the key areas of stakeholder relevance. In
addition, she has provided significant insight to the Board
through her financial and corporate experience and
knowledge of the investment management sector.
Ashton Bradbury
Independent Non-Executive Director
Experience:
Ashton Bradbury has previously held roles at
Charterhouse Tilney, Hill Samuel Investment Management
and HSBC Asset Management Europe and was, until 2014,
a fund manager with Old Mutual Global Investors Limited
where he established its Small and Mid-Cap equities team.
Ashton holds a BSc in Banking and Finance from
Loughborough University of Technology.
Length of service:
6 years, appointed a Director on 2 July 2018
Committee membership:
Audit Committee, Management Engagement Committee
and Nomination Committee
Contribution:
The Board has reviewed the contribution of Ashton
Bradbury in light of his proposed re-election at the AGM
and has concluded that he continues to provide significant
investment insight to the Board and knowledge of the
asset class and investment management sector.
Board of Directors
abrdn UK Smaller Companies Growth Trust plc 47
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Alexa Henderson
Independent Non-Executive Director
Experience:
Alexa Henderson has over 30 years’ experience in finance,
accounting and audit having worked with KPMG, Arthur
Andersen and Deutsche Bank (WM Company). She is
currently Chairman of JP Morgan Japan Small Cap
Growth & Income PLC (anticipated to retire in October
2024) and a director of WAM Leaders Limited, an
Australian-listed investment company. She will be
appointed as a director of International Biotechnology
Trust plc with effect from 1 January 2025. Previous
directorships include Dunedin Smaller Companies
Investment Trust PLC, Scottish Building Society (which she
chaired for four years) and Adam & Company Group PLC.
She is a Chartered Accountant.
Length of service:
6 years, appointed a Director on 8 October 2018
Committee membership:
Audit Committee, Management Engagement Committee
and Nomination Committee
Contribution:
The Board has reviewed the contribution of Alexa
Henderson in light of her proposed re-election at the AGM
and has concluded that she continues to provide
significant financial and corporate insight to the Board and
knowledge of the investment trust sector.
Manju Malhotra
Independent Non-Executive Director
Experience:
Manju Malhotra was, until December 2023, Chief Executive
Officer of Harvey Nichols, having joined the business in
1998 and progressed through various roles including Chief
Operating Officer and CFO. Manju is also a non-executive
director of Workspace Group plc. She is a Chartered
Accountant.
Length of service:
1 year, appointed a Director on 1 May 2023
Committee membership:
Audit Committee (Chairman), Management Engagement
Committee and Nomination Committee
Contribution:
The Board has reviewed the contribution of Manju
Malhotra in light of her proposed re-election at the AGM
and has concluded that she has chaired the Audit
Committee expertly since taking on the role during the
year and continues to provide meaningful financial,
business and corporate insight to the Board.
48 abrdn UK Smaller Companies Growth Trust plc
Tim Scholefield
Senior Independent Non-Executive Director and
Chairman of the Management Engagement Committee
Experience:
Tim Scholefield was, until 2014, Head of Equities at Baring
Asset Management. He previously held roles at Royal Sun
Alliance Investments and Scottish Widows Investment
Partnership. Tim is currently Chairman of Invesco Bond
Income Plus Limited and Allianz Technology Trust PLC. He
is also a non-executive director of Jupiter Unit Trust
Managers Limited and a consultant to Gresham House
Asset Management.
Length of service:
7 years, appointed a Director on 20 February 2017
Committee membership:
Audit Committee, Management Engagement Committee
(Chairman) and Nomination Committee
Contribution:
The Board has reviewed the contribution of Tim
Scholefield in light of his proposed re-election at the AGM
and has concluded that he has continued to chair the
Management Engagement Committee expertly as well as
acting as the Senior Independent Director. He continues to
provide significant investment insight to the Board and
knowledge of the investment management and
investment trust sectors.
Board of Directors
Continued
abrdn UK Smaller Companies Growth Trust plc 49
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The Directors present their report and the audited
financial statements of the Company for the year ended
30 June 2024.
Results and Dividends
The financial statements for the year ended 30 June 2024
are contained on pages 75 to 95. An interim dividend of
3.70p per Ordinary share was paid on 12 April 2024 and
the Directors recommend a final dividend of 8.3p per
Ordinary share, payable on 29 November 2024 to
shareholders on the register on 1 November 2024. The ex-
dividend date is 31 October 2024.
Principal Activity and Status
The Company is registered as a public limited company in
Scotland under company number SC145455, is an
investment company within the meaning of Section 833 of
the Companies Act 2006 and carries on business as an
investment trust.
The Company has applied for and has been accepted as
an investment trust under Sections 1158 and 1159 of the
Corporation Tax Act 2010 and Part 2 Chapter 1 of
Statutory Instrument 2011/2999. This approval relates to
accounting periods commencing on or after 1 July 2012.
The Directors are of the opinion that the Company
has conducted its affairs so as to be able to retain
such approval.
The Company intends to manage its affairs so that its
Ordinary shares continue to be a qualifying investment for
inclusion in the stocks and shares component of an
Individual Savings Account.
Capital Structure and Voting Rights
The Company’s issued share capital at 30 June 2024
consisted of 74,270,535 (2023: 88,329,911) Ordinary
shares of 25 pence each and there were 29,893,887
(2023: 15,834,511) Ordinary shares held in treasury.
During the year, 14,059,376 Ordinary shares were bought
back into treasury.
Since the year end, the Company has bought back a
further 543,624 Ordinary shares into treasury. Accordingly,
as at the date of this Report, the Company’s issued share
capital consisted of 73,726,911 Ordinary shares of 25
pence each and 30,437,511 Ordinary shares held
in treasury.
Each ordinary shareholder is entitled to one vote on a
show of hands and, on a poll, to one vote for every
Ordinary share held.
Management Agreement
The Company has appointed abrdn Fund Managers
Limited (“aFML”), a wholly owned subsidiary of abrdn plc,
as its Alternative Investment Fund Manager (the
“Manager”). aFML has been appointed to provide
investment management, risk management,
administration and company secretarial services, and
promotional activities to the Company. The Company's
portfolio is managed by abrdn Investment Management
Limited (the “Investment Manager”) by way of a group
delegation agreement in place between it and aFML. In
addition, aFML has sub-delegated administrative and
secretarial services to abrdn Holdings Limited and
promotional activities to abrdn Investments Limited.
With effect from 1 July 2023, the management fee is
calculated quarterly in arrears at a rate of 0.75% per
annum on the first £175 million of the Company’s net
assets, 0.65% per annum on net assets above this
threshold until £550 million, and 0.55% on net assets above
this threshold.
In addition, until 31 December 2023, the Manager received
a secretarial and administration fee of £75,000 plus VAT.
From 1 January 2024, the Manager was no longer entitled
to a secretarial and administration fee.
The Manager also receives a separate fee for the
provision of promotional activities to the Company. This
fee amounted to £207,500 plus VAT for the year (2023:
£301,000 plus VAT).
Further details of the fees payable to the Manager are
shown in notes 4 and 5 to the financial statements.
The management agreement is terminable on not less
than six months’ notice. In the event of termination by the
Company on less than the agreed notice period,
compensation is payable to the Manager in lieu of the
unexpired notice period.
Directors’ Report
50 abrdn UK Smaller Companies Growth Trust plc
Directors
At the year end, there were five independent non-
executive Directors, whose biographies are shown on
pages 46 to 48. Liz Airey is the Chairman and Tim
Scholefield is the Senior Independent Director. Caroline
Ramsay retired as a Director on 23 November 2023.
All of the Directors will retire and, being eligible, will offer
themselves for re-election at the Annual General Meeting.
The Directors attended scheduled Board and Committee
meetings during the year ended 30 June 2024 as follows
(with their eligibility to attend the relevant meetings
in brackets):
Board
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Nomination
Committee
Meetings
Liz Airey 4 (4) - (-)
A
1 (1) 1 (1)
Ashton
Bradbury 4 (4) 2 (2) 1 (1) 1 (1)
Alexa
Henderson 4 (4) 2 (2) 1 (1) 1 (1)
Manju
Malhotra 4 (4) 2 (2) 1 (1) 1 (1)
Caroline
Ramsay
B
2 (2) 1 (1) - (-) - (-)
Tim
Scholefield 4 (4) 2 (2) 1 (1) 1 (1)
A
Liz Airey is not a member of the Audit Committee but attends the
meetings by invitation
B
Retired as a Director on 23 November 2023
The Board meets more frequently when business needs
require. During the year ended 30 June 2024 this included
a Board meeting to approve share buy backs and two
Board Committee meetings to approve the annual and
half yearly financial statements.
The Board believes that all the Directors seeking re-
election remain independent of the Manager and free
from any relationship which could materially interfere with
the exercise of their judgement on issues of strategy,
performance, resources and standards of conduct. The
biographies of each of the Directors are shown on pages
46 to 48, setting out their range of skills and experience as
well as length of service and their contribution to the
Board during the year. The Board believes that each
Director has the requisite high level and range of business,
investment and financial experience which enables the
Board to provide clear and effective leadership and
proper governance of the Company. Following formal
performance evaluations, each Director’s performance
continues to be effective and demonstrates commitment
to the role, and their individual performances contribute to
the long-term sustainable success of the Company. In
addition, all Directors have demonstrated that they have
sufficient time to fulfil their directorial roles with the
Company. The Board therefore recommends the
re-election of each of the Directors at the Annual
General Meeting.
External Agencies
The Board has contractually delegated to external
agencies, including the Manager and other service
providers, certain services including: the management of
the investment portfolio, the day-to-day accounting and
company secretarial requirements, the depositary
services (which include cash monitoring, the custody and
safeguarding of the Company’s financial instruments and
monitoring the Company’s compliance with investment
limits and leverage requirements) and the share
registration services. Each of these contracts was entered
into after full and proper consideration by the Board of the
quality and cost of services offered in so far as they relate
to the affairs of the Company. In addition, ad hoc reports
and information are supplied to the Board as requested.
Directors’ Report
Continued
abrdn UK Smaller Companies Growth Trust plc 51
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Board Diversity
The Board recognises the importance of having a range
of skilled and experienced individuals with the right
knowledge represented on the Board in order to allow it to
fulfil its obligations. The Board also recognises the benefits
and is supportive of the principle of diversity in its
recruitment of new Board members. The Board will not
display any bias for age, gender, race, sexual orientation,
socio-economic background, religion, ethnic or national
origins or disability in considering the appointment of its
Directors. In view of its size, the Board will continue to
ensure that all appointments are made on the basis of
merit against the specification prepared for each
appointment. In doing so, the Board will take account of
the targets set out in the FCA’s Listing Rules, which are set
out in the tables below.
The Board has resolved that the Company’s year end
date is the most appropriate date for disclosure purposes.
The following information has been provided by each
Director through the completion of questionnaires. There
have been no changes since the year end.
Board Gender as at 30 June 2024
Number of Board
members
Percentage of the
Board
Number of senior
positions on the Board
(note 3)
Number in
executive
management
Percentage
of executive
management
Men 2 40% 2
n/a
n/a
Women 3 60%
(note 1)
3
Not specified/prefer not to say - - -
Board Ethnic Background as at 30 June 2024
Number of Board
members
Percentage of the
Board
Number of senior
positions on the Board
(note 3)
Number in
executive
management
Percentage
of executive
management
White British or other White
(including minority-white groups)
4 80% 4
n/a
n/a
Asian/Asian British 1
(note 2)
20% 1
Not specified/prefer not to say - - -
Notes:
1. Meets target that at least 40% of Directors are women as set out in LR 6.6.6R (9)(a)(i)
2. Meets target that at least one Director is from a minority ethnic background as set out in LR 6.6.6R (9)(a)(iii)
3. The Company considers that the role of Chairman, Senior Independent Director (“SID”), and the chairmen of the
Audit Committee, Management Engagement Committee and Nomination Committee are senior positions.
52 abrdn UK Smaller Companies Growth Trust plc
Board’s Policy on Tenure
In normal circumstances, it is the Board’s expectation that
Directors will not serve beyond the Annual General
Meeting following the ninth anniversary of their
appointment. However, the Board takes the view that
independence of individual Directors is not necessarily
compromised by length of tenure on the Board and that
continuity and experience can add significantly to the
Board’s strength. The Board believes that
recommendation for re-election should be on an
individual basis following a rigorous review which assesses
the contribution made by the Director concerned, but also
taking into account the need for regular refreshment
and diversity.
It is the Board’s policy that the Chairman of the Board will
not normally serve as a Director beyond the Annual
General Meeting following the ninth anniversary of his or
her appointment to the Board. However, this may be
extended in certain circumstances or to facilitate effective
succession planning and the development of a diverse
Board. In such a situation the reasons for the extension will
be fully explained to shareholders and a timetable for the
departure of the Chairman clearly set out.
The Role of the Chairman and Senior
Independent Director
The Chairman is responsible for providing effective
leadership to the Board, by setting the tone of the
Company, demonstrating objective judgement and
promoting a culture of openness and debate. The
Chairman facilitates the effective contribution and
encourages active engagement by each Director. In
conjunction with the Company Secretary, the Chairman
ensures that Directors receive accurate, timely and clear
information to assist them with effective decision-making.
The Chairman acts upon the results of the Board
evaluation process by recognising strengths and
addressing any weaknesses and also ensures that the
Board engages with major shareholders and that all
Directors understand shareholder views.
The Senior Independent Director acts as a sounding board
for the Chairman and acts as an intermediary for other
Directors, when necessary. Working closely with the
Nomination Committee, the Senior Independent Director
takes responsibility for an orderly succession process for
the Chairman, and leads the annual appraisal of the
Chairman’s performance. The Senior Independent
Director is also available to shareholders to discuss any
concerns they may have.
Management of Conflicts of Interest
The Board has a procedure in place to deal with a
situation where a Director has a conflict of interest. As part
of this process, each Director prepares a list of other
positions held and all other conflict situations that may
need to be authorised either in relation to the Director
concerned or his or her connected persons. The Board
considers each Director’s situation and decides whether
to approve any conflict, taking into consideration what is in
the best interests of the Company and whether the
Director’s ability to act in accordance with his or her wider
duties is affected. Each Director is required to notify the
Company Secretary of any potential, or actual, conflict
situations that will need authorising by the Board.
Authorisations given by the Board are reviewed at each
Board meeting.
No Director has a service contract with the Company
although all Directors are issued with letters of
appointment. Other than the deeds of indemnity referred
to on page 60, there were no contracts during, or at the
end of the year, in which any Director was interested.
The Company has a policy of conducting its business in an
honest and ethical manner. The Company takes a zero-
tolerance approach to bribery and corruption and has
procedures in place that are proportionate to the
Company’s circumstances to prevent them. The Manager
also adopts a group-wide zero-tolerance approach and
has its own detailed policy and procedures in place to
prevent bribery and corruption. Copies of the Manager’s
anti-bribery and corruption policies are available on
its website.
In relation to the corporate offence of failing to prevent tax
evasion, it is the Company’s policy to conduct all business
in an honest and ethical manner. The Company takes a
zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign
country and is committed to acting professionally,
fairly and with integrity in all its business dealings
and relationships.
Directors’ Report
Continued
abrdn UK Smaller Companies Growth Trust plc 53
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Directors’ and Officers’ Liability Insurance
The Company’s Articles of Association provide for each of
the Directors to be indemnified out of the assets of the
Company against any liabilities incurred by them as a
Director of the Company in defending proceedings, or in
connection with any application to the Court in which
relief is granted. In addition, the Company has entered into
separate deeds of indemnity with each of the Directors,
reflecting the scope of the indemnity in the Articles.
Directors’ and Officers’ liability insurance cover has been
maintained throughout the financial year at the expense
of the Company.
Corporate Governance
The Company is committed to high standards of
corporate governance. The Board is accountable to the
Company’s shareholders for good governance and this
statement describes how the Company has applied the
principles identified in the UK Corporate Governance
Code as published in July 2018 (the “UK Code”), which is
available on the Financial Reporting Council’s (the “FRC”)
website: frc.org.uk.
The Board has also considered the principles and
provisions of the AIC Code of Corporate Governance as
published in February 2019 (the “AIC Code”). The AIC
Code addresses the principles and provisions set out in the
UK Code, as well as setting out additional provisions on
issues that are of specific relevance to the Company. The
AIC Code is available on the AIC’s website: theaic.co.uk. It
includes an explanation of how the AIC Code adapts the
principles and provisions set out in the UK Code to make
them relevant for investment companies.
The Board confirms that, during the year, the Company
complied with the principles and provisions of the AIC
Code and the relevant provisions of the UK Code, except
as set out below.
The UK Code includes provisions relating to:
· interaction with the workforce (provisions 2, 5 and 6);
· the role and responsibility of the chief executive
(provisions 9 and 14);
· the need for an internal audit function (provision 25);
· previous experience of the chairman of a remuneration
committee (provision 32); and
· executive directors’ remuneration (provisions 33 and
36 to 41).
The Board considers that these provisions are not relevant
to the position of the Company, being an externally
managed investment company. In particular, all of the
Company’s day-to-day management and administrative
functions are outsourced to third parties. As a result, the
Company has no executive directors, employees or
internal operations. The Company has therefore not
reported further in respect of these provisions.
The Board considers that reporting against the principles
and provisions of the AIC Code, which has been endorsed
by the FRC, provides more relevant information to
shareholders. Full details of the Company’s compliance
with the AIC Code of Corporate Governance can be
found on its website.
Matters Reserved for the Board
The Board sets the Company’s objectives and ensures
that its obligations to its shareholders are met. It has
formally adopted a schedule of matters which are
required to be brought to it for decision, thus ensuring that
it maintains full and effective control over appropriate
strategic, financial, operational and compliance issues.
These matters include:
· the maintenance of clear investment objectives and risk
management policies;
· the monitoring of the business activities of the Company
ranging from analysis of investment performance
through to review of quarterly management accounts;
· monitoring requirements such as approval of the Half-
Yearly Report and Annual Report and financial
statements and approval and recommendation of
any dividends;
· setting the range of gearing in which the Manager may
operate;
· major changes relating to the Company’s structure
including share buy-backs and share issuance;
· Board appointments and removals and the related
terms;
· authorisation of Directors’ conflicts or possible conflicts
of interest;
· terms of reference and membership of Board
Committees;
· appointment and removal of the Manager and the
terms and conditions of the Management Agreement
relating thereto; and
· London Stock Exchange/Financial Conduct Authority -
responsibility for approval of all circulars, listing
particulars and other releases concerning matters
decided by the Board.
54 abrdn UK Smaller Companies Growth Trust plc
Full and timely information is provided to the Board to
enable it to function effectively and to allow the Directors
to discharge their responsibilities.
Board Committees
The Board has appointed a number of Committees, as set
out below. Copies of their terms of reference, which
clearly define the responsibilities and duties of each
Committee, are available on the Company’s website, or
upon request from the Company. The terms of reference
of each of the Committees are reviewed and re-assessed
by the Board for their adequacy on an ongoing basis.
Audit Committee
The Audit Committee’s Report is contained on pages
63 to 66.
Management Engagement Committee
The Management Engagement Committee comprises
the full Board and is chaired by Tim Scholefield. The main
responsibilities of the Management Engagement
Committee include:
· monitoring and evaluating the performance of
the Manager;
· reviewing the Manager’s assessment of value under
Consumer Duty;
· reviewing, at least annually, the continued retention of
the Manager;
· reviewing, at least annually, the terms of appointment of
the Manager including, but not limited to, the level and
method of remuneration and the notice period of the
Manager; and
· reviewing the performance and remuneration of the
other key service providers to the Company.
Following a review of performance and the terms of
appointment of the Manager, during the year the
Management Engagement Committee recommended to
the Board that the continuing appointment of the
Manager was in the best interests of the shareholders and
the Company as a whole. In reaching this decision, the
Committee considered the Company’s performance
record and the Manager’s investment and investment
oversight processes. In addition, the Committee
considered the quality of other services provided by the
Manager, including compliance, secretarial, administrative
and promotional services, which are all required for the
effective operation and administration of the Company.
Nomination Committee
The Nomination Committee comprises the full Board and
is chaired by Liz Airey. The main responsibilities of the
Nomination Committee include:
· regularly reviewing the structure, size and composition
(including the skills, knowledge, experience, diversity and
gender) of the Board;
· undertaking succession planning, taking into account
the challenges and opportunities facing the Company
and identifying candidates to fill vacancies;
· recruiting new Directors, undertaking open advertising
or engaging external advisers to facilitate the search, as
appropriate, with a view to considering candidates from
a wide range of backgrounds, on merit, and with due
regard for the benefits of diversity on the Board, taking
care to ensure that appointees have enough time
available to devote to the position;
· ensuring that new appointees receive a formal
letter of appointment and suitable induction and
ongoing training;
· arranging for annual Board performance evaluations to
ensure that Directors are able to commit the time
required to properly discharge their duties;
· making recommendations to the Board as to the
positions of Chairman, Senior Independent Director and
Chairmen of the Nomination, Audit and Management
Engagement Committees;
· assessing, on an annual basis, the independence of
each Director;
· approving the re-election of any Director, subject to the
UK Code, the AIC Code, or the Articles of Association, at
the Annual General Meeting, having due regard to their
performance, ability to continue to contribute to the
Board in the light of the knowledge, skills and experience
required and the need for progressive refreshing of the
Board; and determining the Directors’ remuneration
policy and level of remuneration, including for
the Chairman.
During the year, the Nomination Committee undertook an
annual appraisal of the Chairman of the Board, individual
Directors and the performance of Committees and the
Board as a whole. This process involved the completion of
questionnaires by each Director and follow-on discussions
between the Chairman and each Director. The appraisal
of the Chairman was undertaken by the Senior
Independent Director. The results of the process, as well as
a review of the prior year’s action points, were discussed
by the Board. It was agreed that the previous year’s action
points had been satisfactorily carried through in the year.
Directors’ Report
Continued
abrdn UK Smaller Companies Growth Trust plc 55
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Some areas of particular focus will continue to be central
to the Board’s work, most importantly this will mean
continuing to keep the investment process under close
review as well as monitoring the risk oversight of the
investment process carried out by the Manager.
Additional matters that the Board expects to be a focus in
the year ahead include:
· reviewing the longstanding discount control mechanism
and its effectiveness given the high ongoing industry
discount levels;
· revisiting the phasing and effectiveness of the marketing
and broader promotional programme; and
· formulating a longer-term Board succession plan given
the concentration of sequential Board member
retirements in the years 2026-2028.
Following the appraisal process, the Board concluded that
it continues to operate well and effectively and is
focussing on the right issues in its work to promote the
success of the Company and that each Director makes a
significant contribution to the Board.
The Committee last conducted an independent external
Board evaluation during the year ended 30 June 2022.
Substantial Interests
Information provided to the Company by major
shareholders pursuant to the FCA’s Disclosure, Guidance
and Transparency Rules are published by the Company
via a Regulatory Information Service.
The table below sets out the interests in 3% or more of the
issued share capital of the Company, of which the Board
was aware as at 30 June 2024.
Shareholder
Number of
Ordinary shares
% held
Interactive Investor 12,166,176 16.4
Hargreaves Lansdown 8,654,658 11.6
1607 Capital Partners 6,393,397 8.6
RBC Brewin Dolphin 5,931,888 8.0
AJ Bell 3,977,428 5.4
Rathbones 2,758,626 3.7
Charles Stanley
2,284,704
3.1
The Company has not been notified of any changes to the
above holdings since the end of the year.
Going Concern
The Company’s assets consist mainly of equity shares in
companies listed on recognised stock exchanges and are
considered by the Board to be realisable within a short
timescale under normal market conditions. The Board has
set overall limits for borrowing and reviews regularly the
Company’s level of gearing, cash flow projections and
compliance with banking covenants. The Board has also
performed stress testing and liquidity analysis.
As at 30 June 2024, the Company had a £40 million
unsecured revolving credit facility with The Royal Bank
of Scotland International Limited which expires on
1 November 2025.
The Directors are mindful of the Principal Risks and
Uncertainties disclosed in the Strategic Report on pages
14 to 16 and they believe that the Company has adequate
financial resources to continue in operational existence for
a period of not less than 12 months from the date of
approval of this Report. They have arrived at this
conclusion having confirmed that the Company’s
diversified portfolio of realisable securities is sufficiently
liquid and could be used to meet short-term funding
requirements were they to arise, as well as share buy back
commitments. The Directors have also reviewed the
revenue and ongoing expenses forecasts for the coming
year and considered the Company’s Statement of
Financial Position as at 30 June 2024 which shows net
current liabilities of £23.6 million at that date, and do not
consider this to be a concern due to the liquidity of the
portfolio which would enable the Company to meet any
short term liabilities if required.
Taking all of this into account, the Directors believe that it is
appropriate to continue to adopt the going concern basis
in preparing the financial statements.
Accountability and Audit
The respective responsibilities of the Directors and the
Independent Auditor in connection with the financial
statements appear on pages 68 and 69 to 74.
The Directors who held office at the date of approval of
this Directors’ Report confirm that, so far as they are each
aware, there is no relevant audit information of which the
Company’s Auditor is unaware and each Director has
taken all the steps that they ought to have taken as a
Director to make themselves aware of any relevant audit
information and to establish that the Company’s Auditor is
aware of that information.
56 abrdn UK Smaller Companies Growth Trust plc
Independent Auditor
As explained in the Audit Committee’s Report on page 66,
following a tender process conducted during the year, the
Board decided to appoint Johnston Carmichael LLP as the
Company’s Independent Auditor, in place of KPMG LLP, for
the audit of the financial statements for the year ending
30 June 2025. The Board will therefore propose resolutions
at the Annual General Meeting to appoint Johnston
Carmichael LLP as Independent Auditor for the ensuing
year and to authorise the Directors to determine its
remuneration.
Financial Instruments
The financial risk management objectives and policies
arising from financial instruments and the exposure of
the Company to risk are disclosed in note 16 to the
financial statements.
Relations with Shareholders
The Directors place a great deal of importance on
communications with shareholders. Shareholders and
investors may obtain up to date information on the
Company through its website and from the Manager and
Company Secretary (see Contact Addresses).
abrdn Holdings Limited has been appointed Company
Secretary to the Company. Whilst abrdn Holdings Limited
is a wholly owned subsidiary of abrdn plc, there is a clear
separation of roles between the Manager and Company
Secretary with different board compositions and different
reporting lines in place. The Board notes that, in
accordance with Market Abuse Regulations, procedures
are in place to control the dissemination of information
within the abrdn plc group of companies when necessary.
Where correspondence addressed to the Board is
received there is full disclosure to the Board. This is kept
confidential if the subject matter of the correspondence
requires confidentiality.
The Board’s policy is to communicate directly with
shareholders and their representative bodies without the
involvement of the management group (including the
Company Secretary or the Manager) in situations where
direct communication is required. In addition,
representatives from the Manager meet with major
shareholders on at least an annual basis in order to
gauge their views, and report back to the Board on
these meetings.
The Company’s Annual General Meeting provides a forum
for communication primarily with private shareholders
and is attended by the Board. The Investment Manager
makes a presentation at the meeting and all shareholders
have the opportunity to put questions to both the Board
and the Manager at the meeting.
The notice of the Annual General Meeting is sent out at
least 20 working days in advance of the meeting. All
shareholders have the opportunity to put questions to the
Board and Manager at the meeting.
Additional Information
Where not provided elsewhere in the Directors’ Report, the
following provides the additional information required to
be disclosed by Part 15 of the Companies Act 2006.
There are no restrictions on the transfer of, or voting rights
attaching to, Ordinary shares in the Company other than
certain restrictions which may from time to time be
imposed by law (for example, the Market Abuse
Regulation). The Company is not aware of any
agreements between shareholders that may result in a
transfer of securities and/or voting rights.
The rules governing the appointment of Directors are set
out in the Directors’ Remuneration Report on pages 59 to
62. The Company’s Articles of Association may only be
amended by a special resolution passed at a general
meeting of shareholders.
The Company is not aware of any significant agreements
to which it is a party that take effect, alter or terminate
upon a change of control of the Company following a
takeover. Other than the management agreement with
the Manager, further details of which are set out on page
49, the Company is not aware of any contractual or other
agreements which are essential to its business which
could reasonably be expected to be disclosed in the
Directors’ Report.
Directors’ Report
Continued
abrdn UK Smaller Companies Growth Trust plc 57
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Annual General Meeting
The Notice of the Annual General Meeting (“AGM”), which
will be held at 12 noon on Thursday, 21 November 2024,
and related notes, may be found on pages 111 to 116.
Resolutions including the following business will be
proposed.
Issue of Ordinary Shares
Resolution 11, which is an ordinary resolution, will, if passed,
renew the Directors’ authority to allot new Ordinary shares
up to 10% of the issued share capital of the Company
(excluding treasury shares) as at the date of this Report.
Resolution 12, which is a special resolution, will, if passed,
renew the Directors’ existing authority to allot new
Ordinary shares or sell treasury shares for cash without
the new Ordinary shares first being offered to existing
shareholders in proportion to their existing holdings. This
will give the Directors authority to make limited allotments
or sell shares from treasury on a non pre-emptive basis of
up to 10% of the total ordinary issued share capital
(excluding treasury shares) as at the date of this Report.
The authority to issue shares on a non pre-emptive basis
includes shares held in treasury (if any) which the
Company sells or transfers, including pursuant to the
authority conferred by Resolution 11.
New Ordinary shares will only be issued at prices
representing a premium to the last published net asset
value per share.
The authorities being sought under Resolutions 11 and 12
shall expire at the conclusion of the Company’s next AGM
in 2025 or, if earlier, on the expiry of 15 months from the
date of the passing of the resolutions, unless such
authorities are renewed prior to such time. The Directors
have no current intention to exercise these authorities and
will only do so if they believe it is advantageous and in the
best interests of shareholders.
Purchase of the Company’s Ordinary Shares
At a General Meeting of the Company held on 3 June
2024, shareholders approved a special resolution to renew
the authority of the Company to make market purchases
of its Ordinary shares.
Resolution 13, which is a special resolution, seeks to renew
the Board’s authority to make market purchases of the
Company’s Ordinary shares in accordance with the
provisions contained in the Companies Act 2006 and the
FCA’s Listing Rules. Accordingly, the Company will seek
authority to purchase up to a maximum of 14.99% of the
issued share capital (excluding treasury shares) at the
date of passing of the resolution at a minimum price of 25
pence per share (being the nominal value). Under the
Listing Rules, the maximum price that may be paid on the
exercise of this authority must not exceed the higher of: (i)
105% of the average of the middle market quotations (as
derived from the Daily Official List of the London Stock
Exchange) for the shares over the five business days
immediately preceding the date of purchase; and (ii) the
higher of the last independent trade and the highest
current independent bid on the trading venue on which
the purchase is carried out.
The Board does not intend to use this authority to
purchase the Company’s Ordinary shares, unless to do so
would result in an increase in the net asset value per
Ordinary share and would be in the best interests of
shareholders. Any Ordinary shares purchased shall either
be cancelled or held in treasury. The authority being
sought shall expire at the conclusion of the AGM in 2025 or,
if earlier, on the expiry of 15 months from the date of the
passing of the resolution unless such authority is renewed
prior to such time.
The Company bought back 14,059,376 Ordinary shares
during the year ended 30 June 2024, representing 15.9%
of the opening issued share capital. These buy backs were
conducted in accordance with the Company’s discount
control policy which is included on page 18. It is the view of
the Board that this policy is in the best interests of
shareholders as a whole. The use of the share buy back
authority during the year is set out in the Chairman’s
Statement on page 9.
Tender Offers
In addition to the authority that is being sought by the
Company under Resolution 13 to purchase its own
Ordinary shares of 25 pence each, Resolution 15, which is
a special resolution, grants the Board the authority to
implement one or more tender offers and to repurchase
up to a maximum of 10% of the Company’s issued share
capital in the financial year prior to the conclusion of the
next AGM. If Resolution 15 is passed, the tender offers will
be structured by way of an on-market offer by a market-
maker and the price will be an amount equal to the
realisation value of the assets attributable to the shares
tendered, as at the latest practicable date before such
tender, less an exit charge of 2%. The shares will
subsequently be bought back by the Company from the
market-maker at the same price and cancelled or held
in treasury.
58 abrdn UK Smaller Companies Growth Trust plc
If Resolution 15 is passed, such authority will expire at the
conclusion of the Company’s AGM in 2025 or, if earlier, on
the expiry of 15 months from the date of the passing of the
resolution unless renewed prior to that date.
Any future tender offers will be conducted at the Board’s
discretion in circumstances where the Board believes that
share buy-backs are not sufficient to maintain the
discount at an appropriate level. Any tender offers will be
conducted in accordance with the FCA’s Listing Rules and
the rules of the London Stock Exchange. If the Board
decides to implement a tender offer, shareholders will be
notified prior to each tender offer of the full terms and
conditions of the tender offer and the procedure for
tendering shares.
Limit on Directors’ Fees
Resolution 14, which is an ordinary resolution, will, if
approved, increase the annual limit on aggregate
Directors' fees from £200,000 to £250,000. The proposal is
explained in more detail in the Directors' Remuneration
Report on page 59 and is permitted under the Company's
Articles of Association. If Resolution 14 is passed, the
increase in the annual limit will take effect from the
conclusion of the Annual General Meeting.
Notice of Meeting
Under the Companies Act 2006, the notice period for the
holding of general meetings of the Company is 21 clear
days unless shareholders agree to a shorter notice period
and certain other conditions are met. Resolution 16, which
is a special resolution, will seek to authorise the Directors to
call general meetings of the Company (other than Annual
General Meetings) on not less than 14 clear days’ notice,
as permitted by the Companies Act 2006 as amended by
the Companies (Shareholders’ Rights) Regulations 2009.
It is currently intended that this flexibility to call general
meetings on shorter notice will only be used for non-
routine business and where it is considered to be in the
interests of all shareholders. If Resolution 16 is passed, the
authority to convene general meetings on not less than 14
clear days’ notice will remain effective until the conclusion
of the AGM in 2025.
Recommendation
The Board considers that the resolutions to be proposed
at the AGM are in the best interests of the Company and
most likely to promote the success of the Company for the
benefit of its members as a whole. Accordingly, the Board
recommends that shareholders vote in favour of the
resolutions as they intend to do in respect of their own
beneficial shareholdings, amounting to 77,136 Ordinary
shares, representing 0.10% of the Company’s issued share
capital as at the date of this Report.
By order of the Board
abrdn Holdings Limited
Company Secretary
1 George Street
Edinburgh EH2 2LL
4 September 2024
Directors’ Report
Continued
abrdn UK Smaller Companies Growth Trust plc 59
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
This Directors’ Remuneration Report comprises
three parts:
1. a Remuneration Policy which is subject to a binding
shareholder vote every three years (or sooner if varied
during this interval) – most recently voted on at the
Annual General Meeting on 23 November 2023;
2. an Implementation Report which is subject to an
advisory vote on the level of remuneration paid during
the year; and
3. an Annual Statement.
Company law requires the Company’s Independent
Auditor to audit certain of the disclosures provided in the
Directors’ Remuneration Report. Where disclosures have
been audited, they are indicated as such. The
Independent Auditor’s report is included on pages
69 to 74.
As the Company has no employees, and the Board is
comprised wholly of non-executive Directors, and given
the size and nature of the Company, the Board has not
established a separate Remuneration Committee. The
Director’s Remuneration Policy and level of Directors’
remuneration are determined by the Nomination
Committee, which is chaired by Liz Airey and comprises all
of the Directors.
The Directors’ Remuneration Policy takes into
consideration the principles of UK corporate governance
and the AIC’s recommendations regarding the application
of those principles to investment companies.
No shareholder views have been sought in setting the
remuneration policy (approved by shareholders at the
Annual General Meeting on 23 November 2023) and no
communication was received from shareholders during
the year regarding Directors’ remuneration.
Remuneration Policy
The Company’s policy is that the remuneration of the
Directors, all of whom are non-executive, should reflect
the experience of the Board as a whole and be fair and
comparable to that of other investment trusts with a
similar capital structure and similar investment objectives.
Directors are remunerated exclusively in the form of fees,
payable monthly in arrears to the Director personally.
The fees for the Directors are determined within the
limits set out in this Remuneration Policy and the
Company’s Articles of Association which currently limit the
aggregate of the fees payable to the Directors to
£200,000 per annum.
As explained in the Report of the Directors on page 58, an
ordinary resolution will be proposed at the Annual General
Meeting to seek shareholder approval to increase the
aggregate limit to £250,000 per annum. The higher limit is
being sought so as to allow for increases in Directors’
remuneration over a number of years and also for a
higher level of aggregate fees during years when new
Directors are appointed as part of the Board’s
succession planning.
It is intended that the fees payable to the Directors should
reflect their duties, responsibilities, and the value and
amount of time committed to the Company’s affairs, and
should also be sufficient to enable candidates of a high
quality to be recruited and retained. There is no
performance-related remuneration scheme and
therefore the Directors do not receive bonuses, pension
benefits, share options, long-term incentive schemes
or other benefits, and the fees are not specifically
related to the Directors’ performance, either individually
or collectively.
Appointment Terms
· The Company only intends to appoint non-executive
Directors.
· All the Directors are non-executive and are appointed
under the terms of letters of appointment.
· The terms of appointment provide that Directors should
retire and be subject to election at the first Annual
General Meeting after their appointment. The
Company’s Articles of Association require all Directors to
retire by rotation at least every three years. However,
the Board has agreed that all Directors should retire
annually and, if appropriate, seek re-election at the
AGM.
· Any Director newly appointed to the Board will receive
the fee applicable to each of the other Directors at the
time of appointment together with any other fee then
currently payable in respect of a specific role which the
new Director is to undertake for the Company. Fees are
pro-rated where a change takes place during a
financial year.
· No incentive or introductory fees will be paid to
encourage a person to become a Director.
· Directors are not eligible for bonuses, pension benefits,
share options, long-term incentive schemes or
other benefits.
· Directors are entitled to re-imbursement of out-of-
pocket expenses incurred in connection with the
performance of their duties, including travel expenses.
Directors’ Remuneration Report
60 abrdn UK Smaller Companies Growth Trust plc
· The Company indemnifies its Directors under deeds of
indemnity for all costs, charges, losses, expenses and
liabilities which may be incurred in the discharge of
duties as a Director of the Company.
Performance, Service Contracts, Compensation
and Loss of Office
· Directors’ remuneration is not subject to any
performance related fee.
· No Director has a service contract.
· The terms of appointment provide that a Director may
be removed without notice.
· There is no notice period and no provision for
compensation upon early termination of appointment,
save for any arrears of fees which may be due.
· No Director is entitled to any other monetary payment
or any assets of the Company.
Directors’ & Officers’ liability insurance cover is maintained
by the Company on behalf of the Directors.
There were no changes to the Directors’ Remuneration
Policy during the year nor are there any proposals for
changes in the foreseeable future.
Approval of Remuneration Policy and Statement of Voting
at Annual General Meeting
At the Annual General Meeting held on 23 November
2023, shareholders approved the Directors’ Remuneration
Policy. 99.0% of proxy votes were in favour of the
resolution and 1.0% were against. There were abstentions
in respect of 73,107 shares.
The Remuneration Policy is reviewed by the Nomination
Committee on an annual basis and it is the Committee’s
intention that this Remuneration Policy will apply for the
three year period ending 30 June 2026.
Implementation Report
Review of Directors’ Fees
The levels of fees at the year end are set out in the table
below. Fees are reviewed annually and, if considered
appropriate, increased accordingly.
30 June 2024
£
30 June 2023
£
Chairman 40,700 38,500
Chairman of the Audit
Committee
32,800 31,000
Senior Independent Director 29,400 27,750
Director 27,500 26,000
The Nomination Committee carried out a review of the
level of Directors’ fees during the year, which included
consideration of fees paid by comparable investment
trusts and the sector as a whole. Following this review, the
Nomination Committee concluded that fees would be
increased with effect from 1 July 2024 to £43,700 for the
Chairman, £35,200 for the Chairman of the Audit
Committee, £31,500 for the Senior Independent Director
and £29,500 for the other Directors. The Nomination
Committee was not provided with advice or services by
any person in respect of its consideration of the Directors’
remuneration.
Company Performance
The graph below shows the share price total return
(assuming all dividends are reinvested) to Ordinary
shareholders compared to the total return from the
Deutsche Numis Smaller Companies plus AIM (ex
investment companies) Index for the ten year period to
30 June 2024 (rebased to 100 at 30 June 2014). This index
was chosen for comparison purposes as it is the reference
index used for investment performance measurement
purposes.
100
150
200
250
300
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Share price total return Reference index total return
Directors’ Remuneration Report
Continued
abrdn UK Smaller Companies Growth Trust plc 61
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Statement of Voting at Annual General Meeting
At the Company’s last Annual General Meeting, held on 23
November 2023, shareholders approved the Directors’
Remuneration Report (excluding the Directors’
Remuneration Policy) in respect of the year ended 30
June 2023. 99.3% of proxy votes were in favour of the
resolution and 0.7% were against. There were abstentions
in respect of 60,124 shares.
A resolution to approve the Directors’ Remuneration
Report (excluding the Directors’ Remuneration Policy) in
respect of the year ended 30 June 2024 will be proposed
at the Annual General Meeting.
Spend on Pay
As the Company has no employees, the Directors do not
consider it appropriate to present a table comparing
remuneration paid to employees with distributions to
shareholders. The total fees paid to Directors are
shown below.
Directors’ Remuneration (audited)
The Directors who served during the year received the following emoluments in the form of fees and taxable expenses:
Year ended 30 June 2024 Year ended 30 June 2023
Fees
£
Taxable
Expenses
£
Total
£
Fees
£
Taxable
Expenses
£
Total
£
Liz Airey 40,700 451 41,151 38,500 334 38,834
Ashton Bradbury 27,500 265 27,765 26,000 1,309 27,309
Alexa Henderson 27,500 - 27,500 26,000 - 26,000
Manju Malhotra
A
30,695 491 31,186 4,333 579 4,912
Caroline Ramsay
B
13,029 387 13,416 31,000 1,339 32,339
Tim Scholefield 29,400 396 29,796 27,750 789 28,539
Total 168,824 1,990 170,814 153,583 4,350 157,933
A
Appointed a Director on 1 May 2023
B
Retired as a Director on 23 November 2023
The above amounts exclude any employers’ national insurance contributions, if applicable. All fees are at a fixed rate
and there is no variable remuneration. Fees are pro-rated where a change takes place during a financial year. There
were no payments to third parties included in the fees referred to in the table above. There are no further fees to disclose
as the Company has no employees, chief executive or executive directors.
62 abrdn UK Smaller Companies Growth Trust plc
Annual Percentage Change in Directors’ Remuneration
The table below sets out the annual percentage change in
Directors’ fees for the past five years.
Year
ended
30
June
2024
Year
ended
30
June
2023
Year
ended
30
June
2022
Year
ended
30
June
2021
Year
ended
30
June
2020
Fees
%
Fees
%
Fees
%
Fees
%
Fees
%
Liz Airey 5.7 2.9 6.9 n/a
A
n/a
Ashton
Bradbury
5.8 2.8 6.8 - 3.0
Alexa
Henderson
5.8 2.8 6.8 - n/a
Manju Malhotra 18.1
B
n/a n/a n/a n/a
Caroline
Ramsay
5.8
C
4.4
6.8
-
3.0
Tim Scholefield 5.9 2.8 7.1 - 2.9
A
Appointed as a Director on 21 August 2019 and as Chairman on 31 March 2020
B
Pro-rated from date of appointment on 1 May 2023. Appointed as Chairman of the
Audit Committee on 23 November 2023
C
Pro-rated from date of retirement on 23 November 2023
Directors’ Interests in the Company (audited)
The Directors are not required to have a shareholding in
the Company. The Directors (including their connected
persons) at 30 June 2024 and 30 June 2023 had no
interest in the share capital of the Company other than
those interests, all of which are beneficial, shown in the
following table.
30 June 2024 30 June 2023
Ordinary shares Ordinary shares
Liz Airey 50,000 50,000
Ashton Bradbury 10,000 10,000
Alexa Henderson 4,391 4,391
Manju Malhotra - -
Caroline Ramsay
A
4,545 4,545
Tim Scholefield 8,200 8,200
A
At date of retirement on 23 November 2023.
There have been no changes to the Directors’ interests in
the share capital of the Company since the year end up to
the date of approval of this Report.
Annual Statement
On behalf of the Board and in accordance with Part 2 of
Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment)
Regulations 2013, it is confirmed that the above
Remuneration Report summarises, as applicable, for the
year to 30 June 2024:
· the major decisions on Directors’ remuneration;
· any substantial changes relating to Directors’
remuneration made during the year; and
· the context in which the changes occurred and
decisions have been taken.
On behalf of the Board
Liz Airey
Chairman
4 September 2024
Directors’ Remuneration Report
Continued
abrdn UK Smaller Companies Growth Trust plc 63
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The Audit Committee presents its Report for the year
ended 30 June 2024.
Committee Composition
The Audit Committee comprises all of the non-executive
Directors other than the Chairman of the Board. The Audit
Committee is chaired by Manju Malhotra who took over
the role from Caroline Ramsay following her retirement
from the Board on 23 November 2023. Manju Malhotra is a
Chartered Accountant and has recent and relevant
financial experience. The Board is satisfied that the Audit
Committee as a whole has competence relevant to the
investment trust sector.
Functions of the Audit Committee
The principal role of the Audit Committee is to assist the
Board in relation to the reporting of financial information,
the review of financial controls and the management of
risk. The Audit Committee has defined terms of reference
which are reviewed and re-assessed for their adequacy
on at least an annual basis. Copies of the terms of
reference are published on the Company’s website and
are available from the Company on request.
The Committee’s main functions are listed below:
· to review and monitor the internal control systems and
risk management systems on which the Company is
reliant and internal audit and compliance reports
relating thereto (including review of non-financial risks)
(the Directors’ statement on the Company’s internal
controls and risk management is set out below);
· to consider whether there is a need for the Company to
have its own internal audit function;
· to monitor the integrity of the half-yearly and annual
financial statements of the Company and any formal
announcements relating to the Company’s financial
performance, by reviewing, and challenging where
necessary the actions and judgements of the Manager;
· to review, and report to the Board on, the significant
financial reporting issues and judgements made in
connection with the preparation of the Company’s
financial statements, half-yearly financial reports, and
any formal announcements relating to the Company’s
financial performance;
· to review the content of the Annual Report and advise the
Board on whether, taken as a whole, it is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position and
performance, business model and strategy;
· to meet with the Independent Auditor to review the
proposed audit programme of work and the findings of
the Independent Auditor. The Audit Committee shall
also use this as an opportunity to assess the
effectiveness of the audit process;
· to develop and implement policy on the engagement of
the Independent Auditor to supply non-audit services. All
non-audit services must be approved in advance by the
Audit Committee and will be reviewed in the light of
relevant guidance and statutory requirements
regarding the provision of non-audit services by the
external audit firm, and the need to maintain the
Auditor’s independence. There were no non-audit fees
paid to the Independent Auditor during the year under
review or during the previous year;
· to obtain and review a statement from the abrdn Group
detailing the arrangements in place within the group
whereby staff may, in confidence, escalate concerns
about possible improprieties in matters of financial
reporting or other matters;
· to make recommendations to the Board in relation to
the appointment of the Independent Auditor and to
approve the remuneration and terms of engagement of
the Independent Auditor; and
· to monitor and review the Auditor’s independence,
objectivity, effectiveness, resources and qualification,
taking into consideration relevant UK professional and
regulatory requirements;
Activities During the Year
The Audit Committee met twice during the year when,
amongst other things, it reviewed and updated the
Company’s risk matrix, with particular consideration given
to new and emerging risks. The Committee also met with
the Independent Auditor to discuss its audit strategy. At
these meetings the Committee also considered in detail
the Annual Report and the Half-Yearly Financial Report.
Representatives of the abrdn Group’s internal audit, risk
and compliance departments reported to the Audit
Committee at these meetings on matters such as internal
control systems, risk management and the conduct of the
business in the context of its regulatory environment. No
significant weaknesses in the control environment were
identified. The Committee therefore concluded that there
were no significant issues which required to be escalated
to the Board.
Audit Committee’s Report
64 abrdn UK Smaller Companies Growth Trust plc
Internal Controls and Risk Management
The Audit Committee confirms that there is an ongoing
process for identifying, evaluating and managing the
Company’s significant business and operational risks, that
has been in place for the year ended 30 June 2024 and up
to the date of approval of the Annual Report, which is
regularly reviewed by the Audit Committee and accords
with the FRC’s guidance on internal controls.
The Board has overall responsibility for ensuring that there
is a system of internal controls and risk management in
place and a process for reviewing its effectiveness. Day-
to-day measures have been delegated to the Manager
with an effective process of reporting to the Board for
supervision and control. The system of internal controls
and risk management is designed to meet the Company’s
particular needs and the risks to which it is exposed.
Accordingly, the system of internal control and risk
management is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives
and, by its nature, can only provide reasonable and not
absolute assurance against material misstatement or loss.
The design, implementation and maintenance of controls
and procedures to safeguard the assets of the Company
and to manage its affairs properly extends to operational
and compliance controls and risk management. The
Board, through the Audit Committee, has prepared its
own risk register which lists potential risks as summarised
in the Strategic Report on pages 14 to 16. The Audit
Committee considers the potential cause and possible
effect of these risks as well as reviewing the controls in
place to mitigate them.
Clear lines of accountability have been established
between the Board and the Manager. The Audit
Committee receives regular reports covering key
performance and risk indicators and considers control
and compliance issues brought to its attention. In carrying
out its review, the Audit Committee has had regard to the
activities of the abrdn Group, including its internal audit
and compliance functions.
The Audit Committee has reviewed the abrdn Group’s
process for identifying and evaluating the significant risks
faced by the Company and the policies and procedures
by which these risks are managed. The Audit Committee
has also reviewed the effectiveness of the abrdn Group’s
system of internal control as it relates to the Company,
including its annual internal controls report prepared in
accordance with the International Auditing and Assurance
Standards Board’s International Standard on Assurances
Engagements (“ISAE”) 3402, “Assurance Reports on
Controls at a Service Organization”. Any weaknesses
identified that may be relevant to the Company are
reported to the Audit Committee and timetables are
agreed for implementing improvements to systems.
The implementation of any remedial action required
is monitored and feedback provided to the
Audit Committee.
The key components designed to provide effective
internal control are outlined below:
· the Board and Manager have agreed clearly defined
investment criteria, specified levels of authority and
exposure limits. Reports on these issues, including
performance statistics and investment valuations, are
regularly submitted to the Board;
· written agreements are in place which specifically
define the roles and responsibilities of the Manager and
other third party service providers. These agreements
are reviewed periodically by the Board;
· the Manager prepares forecasts and management
accounts which allow the Board to assess the
Company’s activities and review its performance;
· as a matter of course the abrdn Group’s internal audit
and compliance departments continually review its
operations;
· bi-annually, the Audit Committee carries out an
assessment of internal controls by considering
documentation from the abrdn Group, including the
internal audit and compliance functions and reports to
the Board on its conclusions; and
· the Audit Committee receives updates from the
Manager on its reviews of the internal control reports
provided by the Depositary.
Audit Committee’s Report
Continued
abrdn UK Smaller Companies Growth Trust plc 65
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The Audit Committee has considered the need for an
internal audit function. However, the Company has no
employees and the day-to-day management of the
Company’s assets has been delegated to the abrdn
Group which has its own compliance and internal control
systems and internal audit department which provides
reports to the Audit Committee for discussion. The Audit
Committee has therefore decided to place reliance on
those systems and internal audit procedures and has
concluded that it is not necessary for the Company to
have its own internal audit function.
Financial Statements and Significant Matters
During its review of the Company’s financial statements
for the year ended 30 June 2024, the Audit Committee
considered the following significant matters, in particular
those communicated by the Independent Auditor during
its planning and reporting of the year end audit:
Valuation, Existence and Ownership of Investments
How the matter was addressed - the Company uses the
services of an independent depositary (BNP Paribas SA,
London Branch) (the “Depositary”) to hold the assets of
the Company. An annual internal control report is
received from the Depositary, providing details of its
control environment. This report is reviewed by the
Manager who provides a summary to the Audit
Committee.
The investment portfolio is reconciled regularly by the
Manager and management accounts, including a full
portfolio listing, are prepared quarterly and are
considered at Board meetings. The valuation of
investments is undertaken in accordance with the
accounting policies disclosed in note 2 b) to the financial
statements.
The Audit Committee satisfied itself that there were
no issues associated with the valuation, existence
and ownership of the investments which required to
be addressed.
Recognition of Dividend Income
How the matter was addressed - the recognition of
dividend income is undertaken in accordance with
accounting policy note 2 d) to the financial statements.
Special dividends are allocated to the capital or revenue
accounts according to the nature of the payment and the
specific circumstances. Management accounts are
reviewed by the Directors at Board meetings and
discussions take place with the Manager regarding the
allocation of any special dividends that have been
received. The Audit Committee also considered the
Independent Auditor’s work and conclusions in this area.
The Audit Committee concluded that there were no issues
associated with the recognition of dividend income which
required to be addressed.
Review of Financial Reporting
The Audit Committee, when considering the draft Annual
Report and financial statements for the year ended 30
June 2024, concluded that, taken as a whole, they are fair,
balanced and understandable and provide the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy, and that a recommendation could be made
to the Board for it to reach this conclusion. As part of its
considerations, the Audit Committee assumed that the
reader of the Annual Report and financial statements
would have a reasonable knowledge of the investment
industry in general and of investment trusts in particular.
Review of Independent Auditor
The Audit Committee has reviewed the effectiveness of
the Independent Auditor, KPMG LLP (“KPMG”), including:
· Independence - the Independent Auditor discusses with
the Audit Committee, at least annually, the steps it takes
to ensure its independence and objectivity and makes
the Audit Committee aware of any potential issues,
explaining all relevant safeguards.
· Quality of audit work - including the ability to resolve
issues in a timely manner (identified issues are
satisfactorily and promptly resolved), its
communications/presentation of outputs (the
explanation of the audit plan, any deviations from it and
the subsequent audit findings are comprehensive and
comprehensible), and working relationship with
management (the Independent Auditor has a
constructive working relationship with the Manager).
The Audit Committee also considers the findings in the
FRC’s annual quality inspection of KPMG.
66 abrdn UK Smaller Companies Growth Trust plc
· Quality of people - including continuity and succession
plans (the audit team is made up of sufficient, suitably
experienced staff with provision made for knowledge of
the investment trust sector and retention on rotation of
the audit partner).
· Fees - including current and proposed fees for
future years.
The Independent Auditor’s report is included on pages
69 to 74. Details of the amounts paid to KPMG during the
year for audit services are set out in note 5 to the
financial statements.
Tenure of the Independent Auditor
KPMG was initially appointed as the Company’s
Independent Auditor at the Annual General Meeting on 26
October 2017. In accordance with present professional
guidelines the audit partner is rotated after no more than
five years and the year ended 30 June 2024 is the second
year for which the present audit director, Hannah Walsh,
has served.
Appointment of New Auditor
In common with all UK listed companies, including
investment companies, there has been upward pressure
on audit fees over the past few years. The Audit
Committee reviewed this trend and considered the
impact to the Company of the cost of the external audit
and, following this review, the Committee decided to bring
forward the tender process which otherwise would have
taken place no later than 2027. The Committee invited a
number of audit firms to submit proposals and, following a
thorough process which involved a presentation by each
of the shortlisted firms to the Audit Committee, it was
agreed to recommend to the Board the appointment of
Johnston Carmichael LLP as the Company’s auditor for
the year ending 30 June 2025. In reaching its decision, the
Audit Committee took into account a number of factors,
including the independence, skills and experience of
Johnston Carmichael LLP, as well as the proposed level of
audit fee. The Audit Committee has not been dissatisfied
in any way with the quality of audit work undertaken by
KPMG over the past seven years but believes that this
decision is in the best interest of shareholders. As a result,
KPMG will not be seeking re-appointment as auditor and
the Board will propose resolutions at the Annual General
Meeting to appoint Johnston Carmichael LLP as Auditor
for the year ending 30 June 2025 and to authorise the
Directors to determine its remuneration.
On behalf of the Audit Committee
Manju Malhotra
Chair of the Audit Committee
4 September 2024
Audit Committee’s Report
Continued
abrdn UK Smaller Companies Growth Trust plc 67
Financial
Statements
Investments in the in the Food
Producers sector represent 8.7% of
the portfolio.
68 abrdn UK Smaller Companies Growth Trust plc
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations. Company law requires the
Directors to prepare financial statements for each
financial year. Under that law they have elected to
prepare the financial statements in accordance with UK
Accounting Standards, including FRS 102 ‘The Financial
Reporting Standard Applicable in the UK and Republic
of Ireland’ and applicable law.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for
that period.
In preparing these financial statements, the Directors are
required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and estimates that are reasonable,
relevant and prudent;
· state whether applicable UK accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial statements;
· assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern; and
· use the going concern basis of accounting unless they
either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They
are responsible for such internal control as they determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open
to them to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Statement of Corporate Governance that comply with
that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website, but not for the
content of any information included on the website that
has been prepared or issued by third parties. Legislation in
the UK governing the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
Responsibility Statement of the Directors in
Respect of the Annual Financial Report
The Directors confirm that to the best of their knowledge:
· the financial statements have been prepared in
accordance with applicable accounting standards and
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company;
· the Strategic Report and Directors’ Report include a fair
review of the development and performance of the
business and the position of the Company, together with
a description of the principal risks and uncertainties that
the Company faces; and
· the Annual Report taken as a whole, is fair, balanced and
understandable and it provides the information
necessary for shareholders to assess the Company’s
position and performance, business model and strategy.
On behalf of the Board
Liz Airey
Chairman
4 September 2024
Statement of Directors’ Responsibilities in Respect of the
Annual Report and the Financial Statements
abrdn UK Smaller Companies Growth Trust plc 69
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
1. Our Opinion is Unmodified
We have audited the financial statements of abrdn UK
Smaller Companies Growth Trust plc (the “Company”) for
the year ended 30 June 2024 which comprise the
Statement of Comprehensive Income, Statement of
Financial Position, Statement of Changes in Equity,
Statement of Cash Flows, and the related notes, including
the accounting policies in note 2.
In our opinion the financial statements:
· give a true and fair view of the state of the Company’s
affairs as at 30 June 2024 and of its profit for the year
then ended;
· have been properly prepared in accordance with UK
accounting standards, including FRS 102
The Financial
Reporting Standard applicable in the UK and Republic of
Ireland
; and
· have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities are described below. We believe
that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the Audit Committee.
We were first appointed as auditor by the shareholders on
26 October 2017. The period of total uninterrupted
engagement is for the seven financial years ended 30
June 2024. We have fulfilled our ethical responsibilities
under, and we remain independent of the Company in
accordance with, UK ethical requirements including the
FRC Ethical Standard as applied to listed public interest
entities. No non-audit services prohibited by that standard
were provided.
Overview
Materiality: financial statements as a whole
£4.55 million (2023: £4.50 million)
1% (2023: 1%) of Total Assets
Key audit matters vs 2023
Recurring risks Carrying amount of quoted investments ◄►
2. Key Audit Matters: Our Assessment of
Risks of Material Misstatement
Key audit matters are those matters that, in our
professional judgement, were of most significance in the
audit of the financial statements and include the most
significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including
those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. We
summarise below the key audit matter (unchanged from
2023), in arriving at our audit opinion above, together with
our key audit procedures to address this matter and, as
required for public interest entities, our results from those
procedures. This matter was addressed, and our results
are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial
statements as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion, and we
do not provide a separate opinion on this matter.
Independent Auditor’s Report to the Members of
abrdn UK Smaller Companies Growth Trust plc
70 abrdn UK Smaller Companies Growth Trust plc
The risk Our response
Carrying amount of quoted investments
(£436.69 million; 2023: £438.41 million)
Refer to page 65 (Audit Committee’s
Report), page 79 (accounting policy) and
page 86 (financial disclosures).
Low risk, high value
The Company’s portfolio of quoted
investments makes up 95.94% (2023:
96.47%) of the Company’s total assets (by
value) and is one of the key drivers of
results. We do not consider these
investments to be at a high risk of
significant misstatement, or to be subject
to a significant level of judgement because
they comprise liquid, quoted investments.
However, due to their materiality in the
context of the financial statements as a
whole, they are considered to be the area
which had the greatest effect on our
overall audit strategy and allocation of
resources in planning and completing
our audit.
We performed the detailed tests below
rather than seeking to rely on controls,
because the nature of the balance is
such that detailed testing is determined
to be the most effective manner of
obtaining audit evidence.
Our procedures included:
Tests of detail: Agreed the valuation of
100% of quoted investments in the
portfolio to externally quoted prices; and
Enquiry of Custodians: Agreed 100% of
investment holdings in the portfolio to
independently received third party
confirmations from the investment
custodian.
Our results: We found the carrying
amount of quoted investments to be
acceptable (2023: acceptable).
3. Our Application of Materiality and an
Overview of the Scope of our Audit
Materiality for the financial statements as a whole was set
at £4.55 million (2023: £4.50 million), determined with
reference to a benchmark of total assets, of which it
represents 1% (2023: 1%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were
performed to a lower threshold, performance materiality,
so as to reduce to an acceptable level the risk that
individually immaterial misstatements in individual
account balances add up to a material amount across the
financial statements as a whole.
Performance materiality was set at 75% (2023: 75%) of
materiality for the financial statements as a whole, which
equates to £3.41 million (2023: £3.37 million). We applied
this percentage in our determination of performance
materiality because we did not identify any factors
indicating an elevated level of risk.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding £227,000 (2023: £225,000), in addition to other
identified misstatements that warranted reporting on
qualitative grounds.
Our audit of the Company was undertaken to the
materiality and performance materiality levels specified
above and was performed by a single audit team.
The scope of the audit work performed was
predominantly substantive as we placed limited
reliance upon the Company’s internal control over
financial reporting.
Total Assets
£455.15 million (2023: £454.47
million)
Materiality
£4.55 million
(2023: £4.50 million)
£4.55 million
Whole financial
statements materiality
(2023: £4.50 million)
£3.41 million
Whole financial
statements performance
materiality
(2023: £3.37 million)
£227,000
Misstatements reported to
the Audit Committee
(2023: £225,000)
Independent Auditor’s Report to the Members of
abrdn UK Smaller Companies Growth Trust plc
Continued
Total Assets Materialit
y
abrdn UK Smaller Companies Growth Trust plc 71
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
4. Going Concern
The Directors have prepared the financial statements on
the going concern basis as they do not intend to liquidate
the Company or to cease its operations, and as they have
concluded that the Company’s financial position means
that this is realistic. They have also concluded that there
are no material uncertainties that could have cast
significant doubt over its ability to continue as a going
concern for at least a year from the date of approval of
the financial statements (the “going concern period”).
We used our knowledge of the Company, its industry, and
the general economic environment to identify the
inherent risks to its business model and analysed how
those risks might affect the Company’s financial
resources or ability to continue operations over the going
concern period. The risks that we considered most likely to
adversely affect the Company’s available financial
resources and its ability to operate over this period were:
· the impact of a significant reduction in the valuation of
investments and implications for the Company’s debt
covenants;
· the liquidity of the investment portfolio and its ability to
meet the liabilities of the Company as and when they fall
due; and
· the operational resilience of key service organisations.
We considered whether these risks could plausibly affect
the liquidity or covenant compliance in the going concern
period by assessing the degree of downside assumption
that, individually and collectively, could result in a liquidity
issue, taking into account the Company’s current and
projected cash and liquid investment position (and the
results of a reverse stress test).
We considered whether the going concern disclosure in
note 2 a) to the financial statements gives a full and
accurate description of the Directors’ assessment of going
concern, including the identified risks and related
sensitivities.
Our conclusions based on this work:
· we consider that the Directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate;
· we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the
Company's ability to continue as a going concern for the
going concern period;
· we have nothing material to add or draw attention to in
relation to the Directors’ statement in note 2 a) to the
financial statements on the use of the going concern
basis of accounting with no material uncertainties that
may cast significant doubt over the Company’s use of
that basis for the going concern period, and we found
the going concern disclosure in note 2 a) to be
acceptable; and
· the related statement under the Listing Rules set out on
page 55 is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or
conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the above
conclusions are not a guarantee that the Company will
continue in operation.
5. Fraud and Breaches of Laws and
Regulations - Ability to Detect
Identifying and Responding to Risks of Material
Misstatement due to Fraud
To identify risks of material misstatement due to fraud
(“fraud risks”) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or
provide an opportunity to commit fraud. Our risk
assessment procedures included:
· enquiring of Directors as to the Company’s high-level
policies and procedures to prevent and detect fraud, as
well as whether they have knowledge of any actual,
suspected or alleged fraud;
· assessing the segregation of duties in place between
the Directors, the Administrator and the Investment
Manager; and
· reading Board and Audit Committee minutes.
We communicated identified fraud risks throughout the
audit team and remained alert to any indications of fraud
throughout the audit.
72 abrdn UK Smaller Companies Growth Trust plc
As required by auditing standards, we perform
procedures to address the risk of management override
of controls, in particular the risk that management may be
in a position to make inappropriate accounting entries. On
this audit we do not believe there is a fraud risk related to
revenue recognition because the revenue is non-
judgemental and straightforward, with limited opportunity
for manipulation. We did not identify any significant
unusual transactions or additional fraud risks.
We evaluated the design and implementation of the
relevant controls over journal entries and other
adjustments and made inquiries of the Administrator as to
whether they were aware of any inappropriate or unusual
activity relating to the processing of journal entries and
other adjustments.
Based on the results of our risk assessment procedures
and our understanding of the journal entries process,
including the segregation of duties between the Directors
and the Administrator, we did not identify any high-risk
journal entries or other adjustments. We substantively
tested all material post-closing entries and, to incorporate
an element of unpredictability, a haphazard selection of
other entries by examining supporting documentation.
Identifying and Responding to Risks of Material
Misstatement due to Non-compliance with Laws and
Regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and
sector experience and through discussion with the
Directors, the Investment Manager and the Administrator
(as required by auditing standards) and discussed with
the Directors the policies and procedures regarding
compliance with laws and regulations. As the Company is
regulated, our assessment of risks involved gaining an
understanding of the control environment including
the entity’s procedures for complying with
regulatory requirements.
We communicated identified laws and regulations
throughout our team and remained alert to any
indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the
financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that
directly affect the financial statements including financial
reporting legislation (including related companies
legislation), distributable profits legislation, and its
qualification as an Investment Trust under UK taxation
legislation, any breach of which could lead to the
Company losing various deductions and exemptions from
UK corporation tax, and we assessed the extent of
compliance with these laws and regulations as part of our
procedures on the related financial statement items.
Further, we assessed the legality of the distributions made
by the Company in the period based on comparing the
dividends paid to the distributable reserves prior to each
distribution, including consideration of accounts filed
during the year.
Secondly, the Company is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in
the financial statements, for instance through the
imposition of fines or litigation. We identified the following
areas as those most likely to have such an effect: money
laundering, data protection, bribery and corruption
legislation and certain aspects of company legislation
recognising the financial and regulated nature of the
Company’s activities and its legal form. Auditing standards
limit the required audit procedures to identify non-
compliance with these laws and regulations to enquiry of
the Directors and the Administrator and inspection of
regulatory and legal correspondence, if any. Therefore, if
a breach of operational regulations is not disclosed to us
or evident from relevant correspondence, an audit will not
detect that breach.
Context of the Ability of the Audit to Detect Fraud or
Breaches of Law or Regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our
audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and
regulations is from the events and transactions reflected
in the financial statements, the less likely the inherently
limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher risk
of non-detection of fraud, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and
cannot be expected to detect non-compliance with all
laws and regulations.
Independent Auditor’s Report to the Members of
abrdn UK Smaller Companies Growth Trust plc
Continued
Independent Auditor’s Report to the Members of
abrdn UK Smaller Companies Growth Trust plc
abrdn UK Smaller Companies Growth Trust plc 73
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
6. We Have Nothing to Report on the Other
Information in the Annual Report
The Directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do
not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial
statements audit work, the information therein is
materially misstated or inconsistent with the financial
statements or our audit knowledge. Based solely on that
work we have not identified material misstatements in the
other information.
Strategic Report and Directors’ Report
Based solely on our work on the other information:
· we have not identified material misstatements in the
Strategic Report and the Directors’ Report;
· in our opinion the information given in those reports for
the financial year is consistent with the financial
statements; and
· in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ Remuneration Report
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Disclosures of Emerging and Principal Risks and Longer-
Term Viability
We are required to perform procedures to identify
whether there is a material inconsistency between the
Directors’ disclosures in respect of emerging and principal
risks and the viability statement, and the financial
statements and our audit knowledge.
Based on those procedures, we have nothing material to
add or draw attention to in relation to:
· the Directors’ confirmation within the viability statement
on pages 18 and 19 that they have carried out a robust
assessment of the emerging and principal risks facing
the Company, including those that would threaten its
business model, future performance, solvency
and liquidity;
· the principal risks and uncertainties disclosures
describing these risks and how emerging risks are
identified and explaining how they are being managed
and mitigated; and
· the Directors’ explanation in the viability statement of
how they have assessed the prospects of the Company,
over what period they have done so and why they
considered that period to be appropriate, and their
statement as to whether they have a reasonable
expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over
the period of their assessment, including any related
disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Viability Statement set
out on pages 18 to 19 under the Listing Rules. Based on the
above procedures, we have concluded that the above
disclosures are materially consistent with the financial
statements and our audit knowledge.
Our work is limited to assessing these matters in the
context of only the knowledge acquired during our
financial statements audit. As we cannot predict all future
events or conditions and as subsequent events may result
in outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the
absence of anything to report on these statements is not a
guarantee as to the Company’s longer-term viability.
Corporate Governance Disclosures
We are required to perform procedures to identify
whether there is a material inconsistency between the
Directors’ corporate governance disclosures and the
financial statements and our audit knowledge.
Based on those procedures, we have concluded that each
of the following is materially consistent with the financial
statements and our audit knowledge:
· the Directors’ statement that they consider that the
Annual Report and financial statements taken as a
whole is fair, balanced and understandable, and
provides the information necessary for shareholders to
assess the Company’s position and performance,
business model and strategy;
· the section of the Annual Report describing the work of
the Audit Committee, including the significant issues that
the Audit Committee considered in relation to the
financial statements, and how these issues were
addressed; and
74 abrdn UK Smaller Companies Growth Trust plc
· the section of the Annual Report that describes the
review of the effectiveness of the Company’s risk
management and internal control systems.
We are required to review the part of the Corporate
Governance Statement relating to the Company’s
compliance with the provisions of the UK Corporate
Governance Code specified by the Listing Rules for
our review.
We have nothing to report in this respect.
7. We Have Nothing to Report on the Other
Matters on Which we are Required to Report
by Exception
Under the Companies Act 2006, we are required to report
to you if, in our opinion:
· adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
· the financial statements and the part of the Directors’
Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
· certain disclosures of Directors’ remuneration specified
by law are not made; or
· we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
8. Respective Responsibilities
Directors’ Responsibilities
As explained more fully in their statement set out on page
68, the Directors are responsible for: the preparation of the
financial statements including being satisfied that they
give a true and fair view; such internal control as they
determine is necessary to enable the preparation of
financial statements that are free from material
misstatement, whether due to fraud or error; assessing the
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern; and using the going concern basis of accounting
unless they either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to
do so.
Auditor’s Responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of the
financial statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
9. The Purpose of Our Audit Work and to
Whom we Owe our Responsibilities
This report is made solely to the Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s members, as a body, for our audit
work, for this report, or for the opinions we have formed.
Hannah Walsh (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
4 September 2024
Continued
Independent Auditor’s Report to the Members of
abrdn UK Smaller Companies Growth Trust plc
abrdn UK Smaller Companies Growth Trust plc 75
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Year ended 30 June 2024 Year ended 30 June 2023
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Net gains/(losses) on investments held at fair value 10 – 48,116 48,116 – (46,435) (46,435)
Income 3 12,727 1,474 14,201 13,649 – 13,649
Investment management fee 4 (704) (2,113) (2,817) (848) (2,542) (3,390)
Other administrative expenses 5 (876) – (876) (1,115) – (1,115)
Net return before finance costs and taxation 11,147 47,477 58,624 11,686 (48,977) (37,291)
Finance costs 6 (557) (1,533) (2,090) (315) (945) (1,260)
Return before taxation 10,590 45,944 56,534 11,371 (49,922) (38,551)
Taxation 7 – – – – – –
Return after taxation 10,590 45,944 56,534 11,371 (49,922) (38,551)
Return per Ordinary share (pence) 9 13.12 56.90 70.02 12.44 (54.63) (42.19)
The total column of this statement represents the profit and loss account of the Company. The ‘Revenue’ and ‘Capital’ columns
represent supplementary information prepared under guidance issued by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.
Statement of Comprehensive Income
76 abrdn UK Smaller Companies Growth Trust plc
As at As at
30 June 2024 30 June 2023
Notes £’000 £’000
Non-current assets
Investments held at fair value through profit or loss 10 436,689 438,408
Current assets
Debtors 11 2,541 1,637
Investments in AAA-rated money market funds 15,627 14,129
Cash and short term deposits 293 294
18,461 16,060
Current liabilities
Creditors: other amounts falling due within one year 12 (2,097) (2,943)
Bank loan 12 (39,964) (24,938)
(42,061) (27,881)
Net current liabilities (23,600) (11,821)
Total assets less current liabilities 413,089 426,587
Net assets 413,089 426,587
Capital and reserves
Called-up share capital 13 26,041 26,041
Share premium account 170,146 170,146
Capital reserve 14 203,375 217,927
Revenue reserve 13,527 12,473
Equity shareholders’ funds 413,089 426,587
Net asset value per Ordinary share (pence) 15 556.19 482.95
The financial statements on pages 75 to 95 were approved by the Board of Directors on 4 September 2024 and were signed on its
behalf by:
Liz Airey
Chairman
The accompanying notes are an integral part of the financial statements.
Statement of Financial Position
abrdn UK Smaller Companies Growth Trust plc 77
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
For the year ended 30 June 2024
Share
Share premium Capital Revenue
capital account reserve reserve Total
£’000 £’000 £’000 £’000 £’000
Balance at 30 June 2023 26,041 170,146 217,927 12,473 426,587
Return after taxation – – 45,944 10,590 56,534
Buyback of Ordinary shares into Treasury (see note 13) – – (60,496) – (60,496)
Dividends paid (see note 8) – – – (9,536) (9,536)
Balance at 30 June 2024 26,041 170,146 203,375 13,527 413,089
For the year ended 30 June 2023
Share
Share premium Capital Revenue
capital account reserve reserve Total
£’000 £’000 £’000 £’000 £’000
Balance at 30 June 2022 26,041 170,146 293,616 8,808 498,611
Return after taxation – – (49,922) 11,371 (38,551)
Buyback of Ordinary shares into Treasury (see note 13) – – (25,767) – (25,767)
Dividends paid (see note 8) – – – (7,706) (7,706)
Balance at 30 June 2023 26,041 170,146 217,927 12,473 426,587
The capital reserve at 30 June 2024 is split between realised of £110,364,000 and unrealised of £93,011,000 (30 June 2023 – realised
£169,058,000 and unrealised £48,869,000).
The Company’s reserves available to be distributed by way of dividends or buybacks which includes the revenue reserve and the
realised element of the capital reserve amount to £123,891,000 (30 June 2023 – £181,531,000).
The accompanying notes are an integral part of the financial statements.
Statement of Chan
g
es in Equity
78 abrdn UK Smaller Companies Growth Trust plc
Year ended Year ended
30 June 2024 30 June 2023
£’000 £’000
Operating activities
Net return before taxation 56,534 (38,551)
Adjustment for:
(Gains)/losses on investments (48,116) 46,435
(Increase)/decrease in accrued dividend income (912) 772
Finance costs 2,090 1,260
(Increase)/decrease in other debtors (2) 3
Decrease in other creditors (1,063) (304)
Net cash inflow from operating activities 8,531 9,615
Investing activities
Purchases of investments (116,814) (83,777)
Sales of investments 166,628 122,718
Purchases of AAA-rated money market funds (120,148) (91,974)
Sales of AAA-rated money market funds 118,650 92,259
Net cash inflow from investing activities 48,316 39,226
Financing activities
Bank and loan interest paid (1,862) (1,193)
Repurchase of Ordinary shares into Treasury (60,450) (25,230)
Repayment of loan – (15,000)
Drawdown of loan 15,000 –
Equity dividends paid (9,536) (7,706)
Net cash outflow from financing activities (56,848) (49,129)
Decrease in cash (1) (288)
Analysis of changes in cash during the year
Opening balance 294 582
Decrease in cash as above (1) (288)
Closing balance 293 294
The accompanying notes are an integral part of the financial statements.
Statement of Cash Flows
abrdn UK Smaller Companies Growth Trust plc 79
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
1. Principal activity
The Company is a closed-end investment company, registered in Scotland No SC145455, with its Ordinary shares being listed
on the London Stock Exchange.
2. Accounting policies
a) Basis of accounting and going concern. The financial statements have been prepared in accordance with Financial
Reporting Standard 102 and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust
Companies and Venture Capital Trusts’ issued in July 2022. They have also been prepared on the assumption that
approval as an investment trust will continue to be granted.
The Company’s assets consist mainly of equity shares in companies listed on recognised stock exchanges and are
considered by the Board to be realisable within a short timescale under normal market conditions. The Board has set
overall limits for borrowing and reviews regularly the Company’s level of gearing, cash flow projections and compliance
with banking covenants. The Board has also performed stress testing and liquidity analysis.
As at 30 June 2024, the Company had fully drawn down from a £40 million unsecured revolving credit facility with The
Royal Bank of Scotland International Limited which expires on 1 November 2025.
The Directors are mindful of the Principal Risks and Uncertainties disclosed in the Strategic Report on pages 14 to 16 and
they believe that the Company has adequate financial resources to continue in operational existence for a period of not
less than 12 months from the date of approval of this Report. They have arrived at this conclusion having confirmed that
the Company’s diversified portfolio of realisable securities is sufficiently liquid and could be used to meet short-term
funding requirements were they to arise. The Directors have also reviewed the revenue and ongoing expenses forecasts
for the coming year and considered the Company’s Statement of Financial Position as at 30 June 2024 which shows net
current liabilities of £23.6 million at that date, and do not consider this to be a concern due to the liquidity of the portfolio
which would enable the Company to meet any short term liabilities if required.
Taking all of this into account, the Directors believe that it is appropriate to continue to adopt the going concern basis in
preparing the financial statements.
The accounting policies applied are unchanged from the prior year and have been applied consistently.
b) Investments. Investments have been designated upon initial recognition as fair value through profit or loss in accordance
with IAS 39. As permitted by FRS 102, the Company has elected to apply the recognition and measurement provisions of
IAS 39 Financial Instruments. This is done because all investments are considered to form part of a group of financial
assets which is evaluated on a fair value basis, in accordance with the Company’s documented investment strategy, and
information about the grouping is provided internally on that basis.
Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms
require delivery to be made within the timeframe established by the market concerned, and are measured initially at fair
value. Subsequent to initial recognition, investments are valued at fair value. For listed investments, this is deemed to be
bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock
Exchange electronic trading service covering most of the market including all the FTSE All-Share and the most liquid AIM
constituents.
Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the
Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
Notes to the Financial Statements
For the year ended 30 June 2024
80 abrdn UK Smaller Companies Growth Trust plc
c) AAA-rated money market funds. The AAA money market funds are used by the Company to provide additional short
term liquidity. Due to their short term nature, they are recognised in the Financial Statements as a current asset and are
included at fair value through profit and loss.
d) Income. Income from equity investments (other than special dividends), including taxes deducted at source, is included in
revenue by reference to the date on which the investment is quoted ex-dividend. Special dividends are credited to
revenue or capital in the Statement of Comprehensive Income, according to the circumstances of the underlying
payment. Foreign income is converted at the exchange rate applicable at the time of receipt. Interest receivable on
short-term deposits and money market funds is accounted for on an accruals basis under the effective interest method.
e) Expenses and interest payable. Expenses are accounted for on an accruals basis. Expenses are charged to the capital
column of the Statement of Comprehensive Income when they are incurred in connection with the maintenance or
enhancement of the value of investments. In this respect, the investment management fee and relevant finance costs
are allocated 25% to revenue and 75% to the capital columns of the Statement of Comprehensive Income in line with the
Board’s expectation of returns from the Company’s investments over the long term in the form of revenue and capital
respectively (see notes 4 and 6).
Transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the
Statement of Comprehensive Income.
f) Dividends payable. Dividends are recognised in the period in which they are paid.
g) Nature and purpose of reserves
Called-up share capital. The Ordinary share capital on the Statement of Financial Position relates to the number of shares
in issue and in treasury. Only when the shares are cancelled, either from treasury or directly, is a transfer made to the
capital redemption reserve. This reserve is not distributable.
Share premium account. The balance classified as share premium includes the premium above nominal value from the
proceeds on issue of any equity share capital comprising Ordinary shares of 25p. This reserve is not distributable.
Capital reserve. Gains or losses on disposal of investments and changes in fair values of investments are transferred to
the capital reserve. The capital element of the management fee and relevant finance costs are charged to this reserve.
Any associated tax relief is also credited to this reserve. The part of this reserve represented by realised capital gains is
available for distribution by way of share buybacks and dividends.
Revenue reserve. Income and expenses which are recognised in the revenue column of the Statement of
Comprehensive Income are transferred to the revenue reserve. The revenue reserve is available for distribution including
by way of dividend.
Notes to the Financial Statements
Continued
abrdn UK Smaller Companies Growth Trust plc 81
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
h) Taxation. Tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on
taxable profit for the period. Taxable profit differs from profit before tax as reported in the Statement of Comprehensive
Income because it excludes items of income or expenses that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the year end date.
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the year end
date where transactions or events that result in an obligation to pay more or a right to pay less tax in future have
occurred at the year end date measured on an undiscounted basis and based on enacted tax rates. This is subject to
deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from
which the future reversal of the underlying timing differences can be deducted. Timing differences are differences
arising between the Company’s taxable profits and its results as stated in the Financial Statements which are capable of
reversal in one or more subsequent periods.
Owing to the Company’s status as an investment trust company, and the intention to continue meeting the conditions
required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains
and losses arising on the revaluation or disposal of investments.
i) Foreign currency. Non-monetary assets and liabilities denominated in foreign currency carried at fair value through profit
or loss are converted into Sterling at the rate of exchange ruling at the year end date. Transactions during the year
involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Any gain or loss arising
from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the
Statement of Comprehensive Income.
j) Judgements and key sources of estimation uncertainty. Disclosure is required of judgements and estimates made by
management in applying the accounting policies that have a significant effect on the Financial Statements. There are no
significant estimates or judgements which impact these Financial Statements.
k) Cash and cash equivalents. Cash comprises bank balances and cash held by the Company. Cash equivalents are short-
term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
l) Bank borrowing. Interest bearing bank loans and overdrafts are recorded initially at fair value, being the proceeds
received, net of direct issue costs. They are subsequently measured at amortised cost. Finance charges, including
premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the
Statement of Comprehensive Income under the effective interest method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they arise.
m) Treasury shares. When the Company purchases its Ordinary shares to be held in treasury, the amount of the
consideration paid, which includes directly attributable costs, is net of any tax effect, and is recognised as a deduction
from the capital reserve. When these shares are sold subsequently, the amount received is recognised as an increase in
equity, and any resulting surplus on the transaction is transferred to the share premium account and any resulting deficit
is transferred from the capital reserve.
82 abrdn UK Smaller Companies Growth Trust plc
3. Income
2024 2023
£’000 £’000
Income from investments
UK dividend income 10,363 10,706
Property income distributions 274 431
Overseas dividend income 888 1,043
Special dividends 315 943
Special dividends – capital 1,474 –
13,314 13,123
Other income
Interest from AAA-rated money market funds 873 516
Bank interest 14 10
Total income 14,201 13,649
4. Investment management fee
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 704 2,113 2,817 848 2,542 3,390
The balance due to abrdn Fund Managers Limited (“aFML”) at the year end in respect of investment management fees was
£715,000 (2023 – £1,667,000). For further details see the Directors’ Report on page 49 and note 20 on page 95.
Notes to the Financial Statements
Continued
abrdn UK Smaller Companies Growth Trust plc 83
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
5. Administrative expenses (inclusive of VAT)
2024 2023
£’000 £’000
Secretarial fees
A
45 90
Promotional activities
A
249 362
Directors’ fees 169 154
Auditor’s remuneration:
– fees payable to the Company’s Independent Auditor for the audit of the
annual accounts (excluding VAT)
71 60
– VAT on audit fees 12 12
Registrar’s fees 29 27
Professional fees 48 89
Custody fees 29 28
Depositary fees 49 56
Other expenses 175 237
876 1,115
A
During the year the Company had an agreement with aFML for the provision of secretarial services and promotional activities. It was agreed between the Company
and the Manager that payments under this agreement in relation to secretarial fees would cease with effect from 1 January 2024. Secretarial fees payable during the
year, inclusive of VAT, were £45,000 (2023 – £90,000) and the amount due to aFML at the year end was £nil (2023 – £90,000). Costs relating to promotional activities
during the year, inclusive of VAT, were £249,000 (2023 – £362,000) and the amount due to aFML at the year end was £119,000 (2023 – £132,000).
6. Finance costs
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Bank loan interest 535 1,466 2,001 282 846 1,128
Non-utilisation fees 15 47 62 25 76 101
Amortisation of loan arrangement expenses 7 20 27 8 23 31
557 1,533 2,090 315 945 1,260
84 abrdn UK Smaller Companies Growth Trust plc
7. Taxation
(a) Analysis of charge for year
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Tax charge – – – – – –
Given the Company’s continued investment trust status and there being no taxable income generated from its
operations, no tax has been paid in the year (2023 – same).
(b) Provision for deferred taxation. At 30 June 2024, the Company had unutilised management expenses and loan
relationship losses of £84,965,000 (2023 – £80,344,000). A deferred tax asset has not been recognised on the unutilised
management expenses and loan relationship losses as it is unlikely there will be suitable future taxable profits against
which these tax losses could be deducted. Therefore, it is unlikely that the Company will generate future taxable revenue
that would enable the existing tax losses to be utilised.
(c) Factors affecting the tax charge for the year. The tax charge for the year is lower (2023 – higher) than the standard rate
of UK corporation tax for the period of 25% (2023 – 20.5%). The differences are explained in the following table:
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net return before taxation 10,590 45,944 56,534 11,371 (49,922) (38,551)
Corporation tax at an effective rate of 25%
(2023 – 20.5%)
2,648 11,486 14,134 2,331 (10,234) (7,903)
Effects of:
Non-taxable UK dividend income (2,806) (368) (3,174) (2,388) – (2,388)
Non-taxable overseas dividend income (86) – (86) (214) – (214)
Management expenses and loan
relationship losses not utilised
244 911 1,155 271 715 986
Non-taxable (gains)/losses on investments – (12,029) (12,029) – 9,519 9,519
Total tax charge – – – – – –
Notes to the Financial Statements
Continued
abrdn UK Smaller Companies Growth Trust plc 85
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8. Dividends
2024 2023
£’000 £’000
Amounts recognised as distributions to equity holders in the period:
2023 final dividend of 8.00p per share (2022 – 5.40p) paid on 30 November 2023 6,711 5,000
2024 interim dividend of 3.70p per share (2023 – 3.00p) paid on 12 April 2024 2,825 2,706
9,536 7,706
The proposed 2024 final dividend is subject to approval by shareholders at the Annual General Meeting and has not been
included as a liability in these financial statements.
Set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the
requirements of Section 1158–1159 of the Corporation Taxes Act 2010 are considered. The net revenue available for
distribution by way of dividend for the year is £10,590,000 (2023 – £11,371,000).
2024 2023
£’000 £’000
Interim dividend 2024 of 3.70p per share (2023 – 3.00p) paid on 12 April 2024 2,825 2,706
Proposed final dividend 2024 of 8.30p per share (2023 – 8.00p) payable on 29
November 2024
6,119 6,907
8,944 9,613
The amount payable for the proposed final dividend is based on the Ordinary shares in issue as the date of approval of this
Report, 4 September 2024, which satisfies the requirement of Section 1159 of the Corporation Tax Act 2010.
9. Return per Ordinary share
2024 2023
p £000 p £000
Basic
Revenue return 13.12 10,590 12.44 11,371
Capital return 56.90 45,944 (54.63) (49,922)
Total return 70.02 56,534 (42.19) (38,551)
Weighted average number of Ordinary shares in issue 80,738,502 91,387,673
86 abrdn UK Smaller Companies Growth Trust plc
10. Investments held at fair value through profit or loss
2024 2023
£’000 £’000
Opening book cost 389,539 429,395
Opening investment holdings gains 48,869 94,742
Opening fair value 438,408 524,137
Additions at cost 116,783 83,423
Disposals – proceeds (166,618) (122,717)
Gains/(losses) 48,116 (46,435)
Closing fair value 436,689 438,408
2024 2023
£’000 £’000
Closing book cost 343,678 389,539
Closing investment holding gains 93,011 48,869
Closing fair value 436,689 438,408
All investments are in equity shares listed on the London Stock Exchange.
The Company received £168,618,000 (2023 – £122,717,000) from investments sold in the period. The book cost of these
investments when they were purchased was £162,644,000 (2023 – £123,279,000). These investments have been revalued over
time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
Transaction costs. During the year, expenses were incurred in acquiring or disposing of investments classified as fair value
through profit or loss. These have been expensed through capital and are included within net gains/(losses) on investments
held at fair value in the Statement of Comprehensive Income. The total costs were as follows:
2024 2023
£’000 £’000
Purchases 314 235
Sales 44 94
358 329
Notes to the Financial Statements
Continued
abrdn UK Smaller Companies Growth Trust plc 87
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
11. Debtors
2024 2023
£’000 £’000
Amounts due from brokers – 10
Dividends receivable 2,520 1,608
Other debtors 21 19
2,541 1,637
12. Creditors: amounts falling due within one year
2024 2023
£’000 £’000
Amounts payable to brokers – 31
Amounts payable in relation to share buybacks 583 537
Interest payable 427 225
Investment management fee payable 715 1,667
Sundry creditors 372 483
2,097 2,943
2024 2023
Bank loan £’000 £’000
Bank loan 40,000 25,000
Unamortised loan arrangement expenses (36) (62)
39,964 24,938
On 2 November 2022, the Company entered into a three year revolving credit facility of £40 million (the “RCF”) with The Royal
Bank of Scotland International Limited, which will expire on 1 November 2025. The RCF has a further uncommitted accordion
provision allowing the Company to request and increase, subject to lender’s approval, of up to an additional £25 million. At 30
June 2024, £40 million was drawn down under the RCF at an interest rate of 6.50%.
The RCF is shown in the Statement of Financial Position net of unamortised expenses of £36,000 (30 June 2023 –
Term Loan – £62,000).
The terms of the RCF contain covenants that the Consolidated Net Tangible Assets as defined in the agreement must not be
less than £200 million, the percentage of borrowings against the Adjusted Portfolio Value as defined in the agreement shall not
exceed 30%, and the portfolio contains a minimum of thirty eligible investments (investments made in accordance with the
Company’s investment policy). The Company complied with all covenants throughout the year.
88 abrdn UK Smaller Companies Growth Trust plc
13. Called-up share capital
2024 2023
Number £’000 Number £’000
Authorised 150,000,000 37,500 150,000,000 37,500
Issued and fully paid:
Ordinary shares of 25p each 74,270,535 18,568 88,329,911 22,082
Held in treasury: 29,893,887 7,473 15,834,511 3,959
104,164,422 26,041 104,164,422 26,041
Ordinary shares Treasury shares Total
Number Number Number
Opening balance 88,329,911 15,834,511 104,164,422
Share buybacks (14,059,376) 14,059,376 -
Closing balance 74,270,535 29,893,887 104,164,422
During the year the Company repurchased 14,059,376 (2023 - 5,682,136) Ordinary shares to treasury at a cost of £60,496,000
(2023 - £25,767,000).
14. Capital reserve
2024 2023
£’000 £’000
Opening balance 217,927 293,616
Unrealised gains/(losses) on investment holdings 44,142 (45,873)
Gains/(loss) on realisation of investments at fair value 3,974 (562)
UK dividend income – capital 1,474 –
Management fee charged to capital (2,113) (2,542)
Finance costs charged to capital (1,533) (945)
Buyback of Ordinary shares into treasury (60,496) (25,767)
Closing balance 203,375 217,927
The capital reserve includes investment holding gains amounting to £93,011,000 (2023 – gains of £48,869,000) as disclosed in
note 10 on page 86.
Notes to the Financial Statements
Continued
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15. Net asset value per share
Total shareholders’ funds have been calculated in accordance with the provisions of applicable accounting standards. The
analysis of total shareholders’ funds on the face of the Statement of Financial Position reflects the rights, under the Articles of
Association, of the Ordinary shareholders on a return of assets.
2024 2023
Net assets attributable (£’000) 413,089 426,587
Number of Ordinary shares in issue at year end
A
74,270,535 88,329,911
Net asset value per share 556.19p 482.95p
A
Excluding shares held in treasury.
16. Financial instruments
The Company’s financial instruments comprise securities and other investments, cash balances, loans and debtors and
creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and
debtors for accrued income. The Company also has the ability to enter into derivative transactions for the purpose of
managing currency and market risks arising from the Company’s activities. No such transactions took place during the year.
The main risks the Company faces from its financial instruments are i) market price risk (comprising interest rate risk, currency
risk and other price risk), ii) liquidity risk and iii) credit risk. There was no material currency risk to the Company for the period
given its investing and financing activities are in the UK.
The Board regularly reviews and agrees policies for managing each of these risks. The Manager’s policies for managing these
risks are summarised below and have been applied throughout the year.
i) Market price risk. The fair value or future cash flows of a financial instrument held by the Company may fluctuate
because of changes in market prices. This market risk comprises three elements – interest rate risk, currency risk and
other price risk.
Interest rate risk
Interest rate movements may affect:
- the level of income receivable on cash deposits and money market funds;
- interest payable on the Company’s variable rate borrowings.
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into
account when making investment and borrowing decisions.
As at 30 June 2024, the Company had drawn down £40 million (2023 – £25 million) from the £40 million revolving credit
facility with The Royal Bank of Scotland International Limited.
90 abrdn UK Smaller Companies Growth Trust plc
Interest risk profile. The interest rate risk profile of the portfolio of financial assets and liabilities at the year end date
was as follows:
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
As at 30 June 2024 Years % £’000 £’000
Asset
s
Investments in AAA-rated money market funds - 5.33 - 15,627
Cash deposits - 3.70 - 293
Total assets - - - 15,920
Liabilitie
s
Bank loan 0.09 6.49 40,000 -
Total liabilities - - 40,000 -
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
As at 30 June 2023 Years % £’000 £’000
Asset
s
Investments in AAA-rated money market funds – 4.92 – 14,129
Cash deposits – 3.93 – 294
Total assets – – – 14,423
Liabilitie
s
Bank loan 0.09 5.48 25,000 –
Total liabilities – – 25,000 –
The weighted average interest rate is based on the current yield of each asset, weighted by its market value.
The floating rate assets consist of investments in AAA-rated money market funds and cash deposits on call earning
interest at prevailing market rates.
All financial liabilities are measured at amortised cost.
Interest rate sensitivity. The sensitivity analyses below have been determined based on the exposure to interest rates at
the year end date and with the stipulated change taking place at the beginning of the financial year and held constant
throughout the reporting period in the case of instruments that have floating rates.
Notes to the Financial Statements
Continued
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If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Company’s result
for the year ended 30 June 2024 and net assets would increase/decrease by £159,000 (2023 – increase/decrease by
£144,000). This is mainly attributable to the Company’s exposure to interest rates on its floating rate cash balances and
money market funds.
Other price risk. Other price risks (ie changes in market prices other than those arising from interest rate or currency risk)
may affect the value of the quoted investments.
It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from
factors specific to a particular sector. The allocation of assets and the stock selection process, as detailed on pages 32 to
34, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the
Board, which meets regularly in order to review investment strategy. The investments held by the Company are mainly
listed on the London Stock Exchange.
Other price risk sensitivity. If market prices at the year end date had been 10% higher or lower while all other variables
remained constant, the return attributable to Ordinary Shareholders for the year ended 30 June 2024 would have
increased/decreased by £43,669,000 (2023 – increase/decrease of £43,841,000). This is based on the Company’s equity
portfolio held at each year end.
ii) Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities.
Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily realisable securities and
AAA-rated money market funds, which can be sold to meet funding commitments if necessary. Subject to compliance
with the terms of the revolving credit facility, including relevant covenant compliance, the Company has the ability to
make future loan drawdowns during the period until the expiry of the facility on 1 November 2025.The maturity of the
Company’s existing borrowings is set out in the credit risk profile section of this note.
Due between
Expected Due within 3 months Due after
cash flows 3 months and 1 year 1 year
As at 30 June 2024 £’000 £’000 £’000 £’000
Bank loan 40,235 40,235 – –
Due between
Expected Due within 3 months Due after
cash flows 3 months and 1 year 1 year
As at 30 June 2023 £’000 £’000 £’000 £’000
Bank loan 25,124 25,124 – –
92 abrdn UK Smaller Companies Growth Trust plc
iii) Credit risk. This is failure of the counter party to a transaction to discharge its obligations under that transaction that could
result in the Company suffering a loss.
The risk is not significant, and is managed as follows:
– investment transactions are carried out with a number of brokers, whose credit-standing is reviewed periodically by the
investment manager, and limits are set on the amount that may be due from any one broker;
– the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed
trade reports on a monthly basis. In addition, both stock and cash reconciliations to the Custodians’ records are performed
on a daily basis to ensure discrepancies are investigated on a timely basis.
– cash is held only with reputable banks with high quality external credit enhancements.
None of the Company’s financial assets are secured by collateral or other credit enhancements.
Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure
to credit risk at 30 June was as follows:
2024 2023
Statement of Maximum Statement of Maximum
Financial Position exposure Financial Position exposure
Current assets £’000 £’000 £’000 £’000
Debtors – – 10 10
Investments in AAA-rated money markets funds 15,627 15,627 14,129 14,129
Cash and short term deposits 293 293 294 294
15,920 15,920 14,433 14,433
None of the Company’s financial assets is past due or impaired.
Notes to the Financial Statements
Continued
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17. Analysis of changes in net debt
At Non-cash At
30 June 2023 Cash flows movements 30 June 2024
£’000 £’000 £’000 £’000
Cash and cash equivalents 294 (1) - 293
Investments in AAA-rated money market funds 14,129 1,498 - 15,627
Debt due in less than one year (24,938) (15,000) (26) (39,964)
(10,515) (13,503) (26) (24,044)
At Non-cash At
30 June 2022 Cash flows movements 30 June 2023
£’000 £’000 £’000 £’000
Cash and cash equivalents 582 (288) - 294
Investments in AAA-rated money market funds 14,414 (285) - 14,129
Debt due in less than one year (39,988) 15,080 (30) (24,938)
(24,992) 14,507 (30) (10,515)
A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences
from the above analysis.
18. Capital management
The investment objective of the Company is to achieve long term capital growth by investment in UK quoted smaller
companies.
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to
Shareholders through the optimisation of the debt and equity balance.
The Company’s capital comprises the following:
2024 2023
£’000 £’000
Equity
Equity share capital 26,041 26,041
Reserves 387,048 400,546
Liabilities
Bank loan 39,964 24,938
453,053 451,525
94 abrdn UK Smaller Companies Growth Trust plc
The Company’s net gearing comprises the following:
2024 2023
£’000 £’000
Bank loans (39,964) (24,938)
Cash and investments in AAA-rated money market funds 15,920 14,423
Amounts due from brokers – 10
Amounts payable to brokers – (31)
Net gearing (borrowings less cash and money market fund investments) (24,044) (10,536)
Net assets 413,089 426,587
Net gearing (%) 5.8 2.5
The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes:
– the planned level of gearing which takes account of the Investment Manager’s views on the market;
– the level of equity shares;
– the extent to which revenue in excess of that which is required to be distributed should be retained.
The Company’s objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
The Company does not have any externally imposed capital requirements.
19. Fair value hierarchy
FRS 102 requires an entity to classify fair value measurement using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy has the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the
measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the
asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
All of the Company’s investments are in quoted equities (2023 - same) that are actively traded on recognised stock exchanges,
with their fair value being determined by reference to their quoted bid prices at the reporting date. The total value of the
investments (2024 - £436,689,000; 2023 - £438,408,000) have therefore been deemed as Level 1.
The investment in AAA rated money market funds of £15,627,000 (2023 - £14,129,000 ) is considered to be Level 2 under the fair
value hierarchy of FRS 102 due to not trading in an active market.
The fair value of the £40 million revolving credit facility loan as at the 30 June 2024 is £40,000,000, due to it being short-term in
nature, with a par value per Statement of Financial Position of £39,964,000. Under the fair value hierarchy in accordance with
FRS 102, these borrowings can be classified at Level 2.
Notes to the Financial Statements
Continued
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20. Transactions with the Manager
The Company has an agreement with abrdn Fund Managers Limited for the provision of management services. The
management fee is calculated and payable quarterly in arrears at a rate of 0.75% per annum on the first £175 million of net
assets, 0.65% per annum on net assets between £175 million and £550 million and 0.55% on net assets above £550 million.
The Company also has an agreement with aFML for the provision of secretarial services and promotional activities. It was
agreed between the Company and the Manager that payments under this agreement for secretarial services would cease
with effect from 1 January 2024.
21. Related party transactions
The Directors of the Company received fees for their services. Further details are provided in the Directors’ Remuneration
Report on page 61. The Directors’ shareholdings are detailed on page 62.
22. Subsequent events
Subsequent to the year end, a further 543,624 Ordinary shares were repurchased to treasury at a cost of £2,783,000.
96 abrdn UK Smaller Companies Growth Trust plc
Alternative performance measures (“APMs”) are numerical measures of the Company’s current, historical or future performance,
financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The
Company’s applicable financial framework includes FRS 102 and the AIC SORP.
The Directors assess the Company’s performance against a range of criteria which are viewed as particularly relevant for closed-end
investment companies. Where the calculation of an APM is not detailed within the financial statements, an explanation of the
methodology employed is provided below:
Discount
A discount is the percentage by which the market price is lower than the Net Asset Value (“NAV”) per share.
30 June 2024 30 June 2023
Share price 486.50p 414.00p
Net Asset Value per share 556.19p 482.95p
Discount 12.5% 14.3%
Net gearing
Net gearing measures the total borrowings less cash and cash equivalents divided by shareholders’ funds, expressed as a percentage.
Under AIC reporting guidance cash and cash equivalents includes amounts due from and to brokers at the period end as well as cash
and short-term deposits.
30 June 2024 30 June 2023
£’000 £’000
Total borrowings
A
(39,964) (24,938)
Cash and short term deposits 293 294
Investments in AAA-rated money market funds 15,627 14,129
Amounts due from brokers – 10
Amounts payable to brokers – (31)
Total cash and money market fund investments
B
15,920 14,402
Net gearing (borrowings less cash and money market fund investments)
C=A+B
(24,044) (10,536)
Shareholders’ funds
D
413,089 426,587
Net gearing
C/D
5.8% 2.5%
Alternative Performance Measures
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Ongoing charges ratio
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC, which is defined as the total of
investment management fees and recurring administrative expenses and expressed as a percentage of the average of published
daily net asset values throughout the year.
30 June 2024 30 June 2023
£’000 £’000
Investment management fee
A
2,817 3,390
Administrative expenses
B
876 1,115
Less: non-recurring charges
C
(5) (40)
Ongoing charges 3,688 4,465
Average daily net assets 402,438 471,984
Ongoing charges ratio (excluding look-through costs) 0.92% 0.95%
Look-through costs
D
– –
Ongoing charges ratio (including look-through costs) 0.92% 0.95%
A
See note 4 on page 82.
B
See note 5 on page 83.
C
Comprises professional fees not expected to recur.
D
Calculated in accordance with AIC guidance issued in October 2020 to include the Company’s share of costs of holdings in investment companies on a look-through basis.
The ongoing charges ratio differs from the other ongoing costs figure reported in the Company’s Key Information Document
calculated in line with the PRIIPs regulations, which includes the ongoing charges ratio and the financing and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price have performed over a period of time in percentage terms,
taking into account both capital returns and dividends paid to shareholders. NAV total return assumes reinvesting the net dividend
paid by the Company back into the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend.
Share price total return assumes reinvesting the net dividend back into the share price of the Company on the date on which that
dividend goes ex-dividend.
NAV total return
Year ended 30 June 2024 2024 2023
Opening NAV 482.95p 530.37p
Closing NAV 556.19p 482.95p
Increase/(decrease) in NAV 73.24p –47.42p
% Increase/(decrease) in NAV 15.2% –8.9%
Uplift from reinvestment of dividends
A
2.9% 1.5%
NAV total return increase/(decrease) 18.1% –7.4%
A
The uplift from reinvestment of dividends assumes that the dividends of 8.0p in November 2023 and 3.7p in April 2024 (5.4p and 3.0p in 2022/23) paid by the Company were
reinvested in the NAV of the Company on the ex-dividend date.
98 abrdn UK Smaller Companies Growth Trust plc
Share price total return
Year ended 30 June 2024 2024 2023
Opening share price 414.00p 453.00p
Closing share price 486.50p 414.00p
Increase/decrease in share price 72.50p –39.00p
% Increase/(decrease) in share price 17.5% –8.6%
Uplift from reinvestment of dividends
A
3.5% 1.8%
Share price total return increase/(decrease) 21.0% –6.8%
A
The uplift from reinvestment of dividends assumes that the dividends of 8.0p in November 2023 and 3.7p in April 2024 (5.4p and 3.0p in 2022/23) paid by the Company were
reinvested in the shares of the Company on the ex-dividend date.
Alternative Performance Measures
Continued
abrdn UK Smaller Companies Growth Trust plc 99
Corporate
Information
The Company was
incorporated in 1993 and
has been managed by
abrdn since August 2003.
Investments in the Home
Construction sector represent
1.6% of the portfolio.
100 abrdn UK Smaller Companies Growth Trust plc
abrdn
The Company’s Investment Manager is abrdn Investment
Management Limited which is a wholly-owned subsidiary
of abrdn plc. The group’s assets under management and
administration were £505.9 billion as at 30 June 2024,
managed for a range of clients including 14 UK-listed
closed end investment companies.
The Investment Team Senior Managers
Abby Glennie
Deputy Head, Smaller Companies
Lead Manager of the Company
Abby Glennie is Deputy Head of the Smaller Companies
Team at abrdn having been appointed to this role in
March 2020. She is lead manager of the UK small and mid-
cap funds. She was appointed as Co-Manager of the
Company in November 2020 and Lead Manager in
January 2023.
Abby joined abrdn in February 2013 as a member of the
UK Equity Team, before transferring to the Smaller
Companies Team in January 2016. Prior to this she worked
at Kames Capital (previously Aegon Asset Management)
as a Graduate Trainee Investment Manager.
Abby has an MA (First Class Hons) degree in Economics
and Finance from the University of Aberdeen and is a CFA.
Amanda Yeaman
Investment Director, Smaller Companies
Deputy Manager of the Company
Amanda Yeaman is an Investment Director in the Smaller
Companies Team at abrdn, providing research support,
predominantly for the UK Smaller Companies strategy
within abrdn, but also to the wider Smaller Companies
Team. She was appointed as Deputy Manager of the
Company in January 2023.
Amanda joined abrdn in 2019 from Investec, where she
was a small and mid-cap equity sales specialist.
Amanda has an MA (Hons) degree in Economics and
Accountancy from the University of Edinburgh and
has the IMC.
Information about the Investment Mana
g
er
abrdn UK Smaller Companies Growth Trust plc 101
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Alternative Investment Fund Managers
Directive (“AIFMD”) and Pre-Investment
Disclosure Document (“PIDD”)
The Company has appointed abrdn Fund Managers
Limited as its Alternative Investment Fund Manager and
BNP Paribas SA, London Branch as its Depositary under
the AIFMD.
The AIFMD requires abrdn Fund Managers Limited, as the
Company’s AIFM, to make available to investors certain
information prior to such investors’ investment in the
Company. Details of the leverage and risk policies which
the Company is required to have in place under the AIFMD
are published in the Company’s PIDD which can be found
on its website: abrdnuksmallercompaniesgrowthtrust.co.uk.
The periodic disclosures required to be made by the AIFM
under the AIFMD are set out on page 109.
Investor Warning: Be alert to share fraud
and boiler room scams
abrdn has been contacted by investors informing it that it
has received telephone calls and emails from people who
have offered to buy their investment company shares,
purporting to work for abrdn or for third party firms. abrdn
has also been notified of emails claiming that certain
investment companies under its management have
issued claims in the courts against individuals. These may
be scams which attempt to gain your personal
information with which to commit identity fraud or could
be ‘boiler room’ scams where a payment from you is
required to release the supposed payment for your
shares. These callers/senders do not work for abrdn and
any third party making such offers/claims has no link
with abrdn.
abrdn does not ‘cold-call’ investors in this way. If you have
any doubt over the veracity of a caller, do not offer any
personal information and end the call.
The Financial Conduct Authority provides advice with
respect to share fraud and boiler room scams at:
fca.org.uk/consumers/scams.
Shareholder Enquiries
For queries regarding shareholdings, lost certificates,
dividend payments, registered details and related
matters, shareholders holding their shares directly in the
Company are advised to contact the Registrar (see
Contact Addresses). Changes of address must be notified
to the Registrar in writing.
Any general queries about the Company should be
directed to the Company Secretary in writing (see
Contact Addresses) or by email to:
CEF.CoSec@abrdn.com.
Closure of the abrdn Investment Trust
Savings Plans (the “Plans”)
In June 2023, abrdn notified investors in the abrdn
Investment Trust ISA, Share Plan and Investment Plan for
Children that these plans would be closing in December
2023. All investors with a holding or cash balance at that
time transferred to interactive investor (“ii”). ii
communicated with investors in November to set up
account security to ensure that investors could continue to
access their holdings via ii following the closure of the
Plans.
Please contact ii for any ongoing support with your
account on 0345 646 1366, or +44 113 346 2309 if you are
calling from outside the UK. Lines are open 8.00am to
5.00pm Monday to Friday. Alternatively, you can access
the ii website at: www.ii.co.uk/abrdn-welcome.
How to Invest
Investors can buy and sell shares in the Company directly
through a stockbroker or indirectly through a lawyer,
accountant or other professional adviser.
Alternatively, for private investors, there are a number of
online dealing platforms that offer share dealing, ISAs and
other means to invest in the Company. Real-time
execution-only stockbroking services allow you to trade
online, manage your portfolio and buy UK listed shares.
These sites do not give advice. Some comparison websites
also look at dealing rates and terms.
Discretionary Private Client Stockbrokers
If you have a large sum to invest, you may wish to contact
a discretionary private client stockbroker. They can
manage your entire portfolio of shares and will advise you
on your investments. To find a private client stockbroker
visit The Personal Investment Management and Financial
Advice Association at: pimfa.co.uk.
Investor Information
102 abrdn UK Smaller Companies Growth Trust plc
Financial Advisers
To find an adviser who recommends on investment trusts,
visit: unbiased.co.uk.
Regulation of Stockbrokers
Before approaching a stockbroker, always check that
they are regulated by the Financial Conduct Authority at:
fca.org.uk/firms/financial-services-register.
How to Attend and Vote at Company
Meetings
Investors who hold their shares through a platform or
share plan provider (for example Hargreaves Lansdown,
Interactive Investor or AJ Bell) and would like to attend and
vote at Company meetings (including AGMs) should
contact their platform or share plan provider directly to
make arrangements.
Investors who hold their shares through platforms and
have their shares held through platform nominees, may
not necessarily receive notification of general meetings
and are advised to keep themselves informed of
Company business by referring to the Company’s
website. Where voting is required, and the Board
encourages shareholders to vote at all general meetings
of the Company, shareholders with their holdings in
nominees will need to instruct the nominee to vote on their
behalf and should do so in good time before the meetings.
Keeping You Informed
Information about the Company can be found on its
website: abrdnuksmallercompaniesgrowthtrust.co.uk,
including share price and performance data as well as
London Stock Exchange announcements, current and
historic Annual and Half-Yearly Reports, and the latest
monthly factsheet on the Company issued by the
Manager. Investors can receive updates via email by
registering on the home page of the Company’s website.
The Company’s Ordinary share price appears under the
heading ‘Investment Companies’ in the Financial Times.
Details are also available at: invtrusts.co.uk.
Twitter:
@abrdnTrusts
LinkedIn:
abrdn Investment Trusts
Key Information Document (“KID”)
The KID relating to the Company and published by the
Manager can be found on the Company’s website.
Suitable for Retail/NMPI Status
The Company’s shares are intended for investors,
primarily in the UK, including retail investors, professionally-
advised private clients and institutional investors who are
seeking long-term capital growth by investment in UK-
quoted smaller companies, and who understand and are
willing to accept the risks of exposure to equities.
Investors should consider consulting a financial adviser
who specialises in advising on the acquisition of shares
and other securities before acquiring shares. Investors
should be capable of evaluating the risks and merits of
such an investment and should have sufficient resources
to bear any loss that may result.
The Company currently conducts its affairs so that its
securities can be recommended by a financial adviser to
ordinary retail investors in accordance with the Financial
Conduct Authority’s rules in relation to non-mainstream
pooled investments (“NMPIs”) and intends to continue to
do so for the foreseeable future. The Company’s securities
are excluded from the Financial Conduct Authority’s
restrictions which apply to NMPIs because they are
securities issued by an investment trust.
Note
Please remember that past performance is not a guide to
the future. Stock market and currency movements may
cause the value of shares and the income from them to
fall as well as rise and investors may not get back the
amount they originally invested.
As with all equity investments, the value of investment trust
shares purchased will immediately be reduced by the
difference between the buying and selling prices of the
shares, known as the market maker’s spread.
Investors should further bear in mind that the value of
any tax relief will depend on the individual circumstances
of the investor and that tax rates and reliefs, as well as
the tax treatment of ISAs, may be changed by
future legislation.
The information on pages 101 to 102 has been approved
for the purposes of Section 21 of the Financial Services
and Markets Act 2000 (as amended by the Financial
Services Act 2012) by abrdn Investments Limited which is
authorised and regulated by the Financial Conduct
Authority in the United Kingdom.
Investor Information
Continued
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abrdn Group or abrdn
The abrdn plc group of companies.
AIC
The Association of Investment Companies.
AIFMD
The UK version of the Alternative Investment Fund
Managers Directive and all implementing and delegating
legislation thereunder, as it forms part of UK law following
the UK’s departure from the EU. The AIFMD was originally
European legislation which created a European-wide
framework for regulating managers of ‘alternative
investment funds’ (“AIFs”). It is designed to regulate any
fund which is not a UCITS fund and which is managed
and/or marketed in the EU (and, now separately, the UK).
The Company has been designated as an AIF.
Alternative Performance Measures or APMs
Numerical measures of the Company’s current, historical
or future performance, financial position, other than the
financial measures defined or specified in the applicable
financial framework. The Company’s applicable financial
framework includes FRS102 and the AIC SORP.
Blue Sky Company
A company without a proven business track record as
defined by revenues and profitability, where the value of
the company is based on an idea without a tangible
operating model to back it up. Most often these are found
in the technology, biotech or resources sectors.
Capital Return per Share
The realised and unrealised gains and losses of the
investment portfolio net of costs, interest and tax of the
Company that have been allocated to capital, divided by
the weighted average number of shares in issue during
the year.
Closed-End Fund
A collective investment scheme which has a fixed number
of shares which are not redeemable from the fund itself.
Unlike open-ended funds, new shares/units are not
created by managers to meet demand from investors;
instead, shares are purchased (or sold) only in the market.
Closed-end funds are normally listed on a recognised
stock exchange, such as the London Stock Exchange, and
shares can be bought and sold on that exchange.
Depositary
A depositary is responsible for cash monitoring, the
custody and safeguarding of the Company’s financial
instruments and monitoring the Company’s compliance
with investment limits and leverage requirements. The
Company’s Depositary is BNP Paribas SA, London Branch.
Discount
The amount by which the market price per share of an
Investment Trust is lower than the Net Asset Value per
share. The discount is normally expressed as a
percentage of the Net Asset Value per share.
Dividend Cover
Revenue return per share divided by dividends per share
expressed as a ratio.
Dividend per Share
The total of all dividends paid by the Company over the
year on a per share basis.
Dividend Yield
The annual Dividend per Share expressed as a
percentage of the share price.
Earnings per Share or EPS
The net income after tax of the Company divided by the
weighted average number of shares in issue during the
year. In an Investment Trust this is made up of the sum of
the Revenue EPS and Capital EPS.
FCA
Financial Conduct Authority.
Gearing or Net Gearing
Net gearing is calculated by dividing total borrowings less
cash and cash equivalents by Shareholders’ Funds,
expressed as a percentage.
Index
A market index calculates the average performance of its
constituents, normally on a weighted basis. It provides a
means against which the performance of individual
instruments can be assessed.
Glossary of Terms
104 abrdn UK Smaller Companies Growth Trust plc
Investment Manager
abrdn Investment Management Limited is a subsidiary of
abrdn plc and acts as the Company’s investment
manager. It is authorised and regulated by the FCA.
Investment Trust
A type of Closed-End Fund which invests in other
securities, allowing shareholders to share the risks, and
returns, of collective investment.
Key Information Document or KID
The UK version of the Packaged Retail and Insurance-
based Investment Products (“PRIIPS”) Regulation (as it
forms part of UK law following the UK’s departure from the
EU) requires the Manager, as the Company’s PRIIP
‘manufacturer’, to prepare a Key Information Document
(“KID”) in respect of the Company. This KID must be made
available by the Manager to retail investors prior to them
making any investment decision and is available via the
Company’s website. The Company is not responsible for
the information contained in the KID and investors should
note that the procedures for calculating the risks, costs
and potential returns are prescribed by law. The figures in
the KID may not reflect the expected returns for the
Company and anticipated performance.
Leverage
For the purposes of the AIFMD, leverage is any method
which increases the Company’s exposure, including the
borrowing of cash and the use of derivatives. It is
expressed as a ratio between the Company’s exposure
and its Net Asset Value and can be calculated on a gross
and a commitment method. Under the gross method,
exposure represents the sum of the Company’s positions
after the deduction of sterling cash balances, without
taking into account any hedging and netting
arrangements. Under the commitment method, exposure
is calculated without the deduction of sterling cash
balances and after certain hedging and netting positions
are offset against each other.
Manager, AIFM or aFML
abrdn Fund Managers Limited is a subsidiary of abrdn plc
and acts as the Company’s Alternative Investment Fund
Manager. It is authorised and regulated by the FCA.
Market Capitalisation
The latest price of an Ordinary share multiplied by the
number of shares in issue.
Net Asset Value, NAV or Shareholders’ Funds
The value of total assets less liabilities. Liabilities for this
purpose include current and long-term liabilities. The Net
Asset Value divided by the number of shares in issue
produces the Net Asset Value per Ordinary share.
Ongoing Charges
Ratio of total expenses as a percentage of average daily
Shareholders’ Funds calculated as per the AIC’s industry
standard method.
Pre-Investment Disclosure Document
(“PIDD”)
The AIFM and the Company are required to make certain
disclosures available to investors in accordance with the
AIFMD. Those disclosures that are required to be made
pre-investment are included within a PIDD, which can be
found on the Company’s website.
Premium
The amount by which the market price per share of an
Investment Trust exceeds the Net Asset Value per share.
The premium is normally expressed as a percentage of
the Net Asset Value per share.
Price/Earnings Ratio
This is calculated by dividing the market price per share by
the Earnings per Share. The calculation assumes no
change in earnings but in practice the multiple reflects the
stock market’s view of a company’s prospects and profit
growth potential.
Prior Charges
The name given to all borrowings including debentures,
loans and overdrafts that are to be used for investment
purposes, reciprocal foreign currency loans, currency
facilities to the extent that they are drawn down, index-
linked securities, and all types of preference or preferred
capital, irrespective of the time until repayment.
Record Date
The date when an investor needs to be holding a share in
order to qualify for a forthcoming dividend.
Revenue Return Per Share
The net income from dividends and interest received,
after costs, interest and tax allocated to revenue, divided
by the weighted average number of shares in issue during
the year.
Glossary of Terms
Continued
abrdn UK Smaller Companies Growth Trust plc 105
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Total Assets
Total assets less current liabilities (before deducting Prior
Charges as defined above), as per the Statement of
Financial Position.
Total Return
The theoretical return including reinvesting each dividend
in additional shares in the Company on the day that the
shares go ex-dividend. The NAV Total Return involves
investing the same net dividend in the NAV of the
Company on the ex-dividend date.
106 abrdn UK Smaller Companies Growth Trust plc
Issued Share Capital at 30 June 2024
74,270,535 Ordinary shares of 25p (104,164,422 including treasury shares)
Treasury Shares at 30 June 2024
29,893,887 Ordinary shares
Share Capital History
Year ended 30 June 1994 The Company’s authorised share capital on incorporation was £15,000,000, divided into 60,000,000
Ordinary shares of 25p each. On 19 August 1993, 50,000,000 Ordinary shares (with one Warrant
attached for every five Ordinary shares) were issued at £1 each. On 25 March 1994, the authorised
share capital of the Company was increased to £75,000,000 by the creation of 50,000,000 limited
Conversion (“C”) shares of £1 each and 40,000,000 Ordinary shares of 25p each. On 28 March 1994, a
further 21,428,000 ‘C’ shares were issued at £1 each, at par. On 7 June 1994, the C shares of £1 each
were converted into Ordinary shares, resulting in the issue of 19,436,770 Ordinary shares (with one
Warrant for every five Ordinary shares).
Year ended 30 June 2007 32,629,217 Ordinary shares purchased for cancellation and 117,791 Warrants cancelled following the
tender offer which was approved by shareholders on 9 November 2006.
2,194,000 Ordinary shares purchased for cancellation.
Year ended 30 June 2008 559,175 Ordinary shares purchased to hold in treasury.
Year ended 30 June 2009 On 4 February 2009, as part of the merger with Gartmore Smaller Companies Trust plc (“Gartmore”),
31,189,825 Conversion (“C”) shares issued to former Gartmore shareholders. On 14 April 2009,
27,545,948 of the C shares were converted into 26,273,612 Ordinary shares. On 11 June 2009, the
remaining 3,643,877 C shares were converted into 3,687,639 Ordinary shares.
1,164,545 Warrants exercised as a result of the last exercise date of 30 September 2008, which resulted in
the issue of the same number of new Ordinary shares. 1,732,965 Warrants lapsed without value.
Year ended 30 June 2011 3,670,243 Ordinary shares purchased to hold in treasury, 4,229,418 Ordinary shares sold from
treasury and 825,000 new Ordinary shares issued.
£25 million nominal of 3.5% Convertible Unsecured Loan Stock 2018 (“CULS”) issued.
Year ended 30 June 2012 425,000 new Ordinary shares issued.
22,003 new Ordinary shares issued as a result of the first conversion of CULS as at 30 September 2011. 5,346
new Ordinary shares issued as a result of the second conversion of CULS as at 31 March 2012.
Year ended 30 June 2013 1,650,000 new Ordinary shares issued.
4,679 new Ordinary shares issued as a result of the third conversion of CULS as at 30 September 2012.
11,404 new Ordinary shares issued as a result of the fourth conversion of CULS as at 31 March 2013.
Year ended 30 June 2014 2,900,000 new Ordinary shares issued.
1,038,382 new Ordinary shares issued as a result of the fifth conversion of CULS as at 30 September
2013. 779,216 new Ordinary shares issued as a result of the sixth conversion of CULS as at 31 March
2014.
Year ended 30 June 2015 2,307,155 Ordinary shares purchased to hold in treasury.
243,589 new Ordinary shares issued as a result of the seventh conversion of CULS as at 30 September
2014. 98,580 Ordinary shares issued from treasury as a result of the eighth conversion of CULS as at
31 March 2015.
Your Company’s Share Capital History
abrdn UK Smaller Companies Growth Trust plc 107
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Year ended 30 June 2016 3,470,930 Ordinary shares purchased to hold in treasury following the tender offer which completed
on 28 July 2015.
669,513 Ordinary shares issued from treasury as a result of the ninth conversion of CULS as at
30 September 2015. 803,871 Ordinary shares issued from treasury as a result of the tenth conversion
of CULS as at 31 March 2016.
Year ended 30 June 2017 443,818 Ordinary shares purchased to hold in treasury.
378,514 Ordinary shares issued from treasury as a result of the eleventh conversion of CULS as at 30
September 2016. 895,583 Ordinary shares issued from treasury as a result of the twelfth conversion of
CULS as at 31 March 2017.
Year ended 30 June 2018 927,892 Ordinary shares issued from treasury as a result of the thirteenth conversion of CULS as at 30
September 2017. 4,658,405 new Ordinary Shares issued as a result of the final conversion of CULS as
at 31 March 2018.
Year ended 30 June 2019 27,878,842 new Ordinary shares issued as a result of the merger with Dunedin Smaller Companies
Investment Trust PLC which completed on 8 October 2018.
1,131,061 Ordinary shares purchased to hold in treasury.
Year ended 30 June 2020 520,213 Ordinary shares purchased to hold in treasury.
Year ended 30 June 2021 1,382,632 Ordinary shares purchased to hold in treasury.
Year ended 30 June 2022 4,670,519 Ordinary shares purchased to hold in treasury.
Year ended 30 June 2023 5,682,136 Ordinary shares purchased to hold in treasury.
Year ended 30 June 2024 14,059,376 Ordinary shares purchased to hold in treasury.
108 abrdn UK Smaller Companies Growth Trust plc
Share Capital History
Year
ended
30 June
Ordinary
shares
bought
back for
cancellation
Ordinary
shares
bought
back into
treasury
Ordinary
shares
issued
from
treasury
Ordinary
shares
issued
Ordinary
shares
in issue
(excluding
treasury
shares)
Convertible
Unsecured
Loan Stock
issued (£)
Convertible
Unsecured
Loan Stock
exercised (£)
Convertible
Unsecured
Loan Stock
total (£)
Warrants
exercised
Warrants
bought
back
Warrants
lapsed
Total
Warrants
In issue
1994 - - - - 69,436,770 - - - - - - 13,886,996
1995 - - - - 69,525,796 - - - 89,026 - - 13,797,970
1996 - - - - 69,527,676 - - - 1,880 - - 13,796,090
1997 - - - - 69,528,656 - - - 980 1,592,201 - 12,202,909
1998 - - - - 69,529,717 - - - 1,061 6,075,144 - 6,126,704
1999 - - - - 69,530,267 - - - 550 1,350,000 - 4,776,154
2000 - - - - 69,543,990 - - - 13,723 1,671,143 - 3,091,288
2001 - - - - 69,601,685 - - - 57,695 - - 3,033,593
2002 2,200,000 - - - 67,403,646 - - - 1,961 - - 3,031,632
2003 - - - - 67,403,646 - - - - - - 3,031,632
2004 - - - - 67,403,646 - - - - - - 3,031,632
2005 - - - - 67,404,646 - - - 1,000 - - 3,030,632
2006 - - - - 67,404,746 - - - 100 - - 3,030,532
2007 34,823,217 - - - 32,583,790 - - - 2,261 117,791 - 2,910,480
2008 - 559,175 - - 32,037,585 - - - 12,970 - - 2,897,510
2009 - - - 29,961,251 63,163,381 - - - 1,164,545 - 1,732,965 -
2010 - - - - 63,163,381 - - - - - - -
2011 - 3,670,243 4,229,418 825,000 64,547,556 25,000,000 - 25,000,000 - - - -
2012 - - - 452,349 64,999,905 - 64,929 24,935,071 - - - -
2013 - - - 1,666,083 66,665,988 - 38,184 24,896,887 - - - -
2014 - - - 4,717,598 71,383,586 - 4,312,437 20,584,450 - - - -
2015 - 2,307,155 98,580 243,589 69,418,600 - 811,868 19,772,582 - - - -
2016 - 3,470,930 1,473,384 - 67,421,054 - 3,495,770 16,276,812 - - - -
2017 - 443,818 1,274,097 - 68,251,333 - 3,022,923 13,253,889 - - - -
2018 - - 927,892 4,658,405 73,837,630 - 13,253,889 - - - - -
2019 - 1,131,061 - 27,878,842 100,585,411 - - - - - - -
2020 - 520,213 - - 100,065,198 - - - - - - -
2021 - 1,382,632 - - 98,682,566 - - - - - - -
2022 - 4,670,519 - - 94,012,047 - - - - - - -
2023 - 5,682,136 - - 88,329,911 - - - - - - -
2024 - 14,059,376 - - 74,270,535 - - - - - - -
Your Company’s Share Capital History
Continued
abrdn UK Smaller Companies Growth Trust plc 109
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
abrdn Fund Managers Limited and the Company are required to make certain disclosures available to investors in
accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). Those disclosures that are required to
be made pre-investment are included within a pre-investment disclosure document (“PIDD”) which can be found on the
Company’s website.
There have been no material changes to the disclosures contained within the PIDD since its most recent update
in August 2023.
The periodic disclosures as required under the AIFMD to investors are made below:
· information on the investment strategy, geographic and sector investment focus and principal stock exposures is
included in the Strategic Report;
· none of the Company’s assets are subject to special arrangements arising from their illiquid nature;
· the Strategic Report, note 16 to the financial statements and the PIDD together set out the risk profile and risk
management systems in place. There have been no changes to the risk management systems in place in the period
under review and no breaches of any of the risk limits set, with no breach expected;
· there are no new arrangements for managing the liquidity of the Company or any material changes to the liquidity
management systems and procedures employed by aFML; and
· all authorised Alternative Investment Fund Managers are required to comply with the AIFMD Remuneration Code. In
accordance with the Remuneration Code, the AIFM’s remuneration policy is available from the Company Secretary,
abrdn Holdings Limited, on request, and the remuneration disclosures in respect of the AIFM’s reporting period for the
year ended 31 December 2023 are available on the Company’s website.
Leverage
The table below sets out the current maximum permitted limit and actual level of leverage for the Company:
Gross Method Commitment Method
Maximum level of leverage 3.00:1 2.00:1
Actual level at 30 June 2024 1.15:1 1.19:1
There have been no breaches of the maximum level during the period and no changes to the maximum level of
leverage employed by the Company. There have been no changes to the circumstances in which the Company
may be required to post assets as collateral and no guarantees granted under the leveraging arrangement. Changes
to the information contained either within this Annual Report or the PIDD in relation to any special arrangements in
place, the maximum level of leverage which aFML may employ on behalf of the Company, the right of use of collateral
or any guarantee granted under any leveraging arrangement, or any change to the position in relation to any discharge
of liability by the Depositary will be notified via a regulatory news service without undue delay in accordance with
the AIFMD.
The information on this page has been approved for the purposes of Section 21 of the Financial Services and Markets Act
2000 (as amended by the Financial Services Act 2012) by abrdn Fund Managers Limited which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom.
AIFMD Disclosures
(
Unaudited
)
110 abrdn UK Smaller Companies Growth Trust plc
General
The Annual General Meeting will be
held at 1 George Street, Edinburgh
EH2 2LL on Thursday 21 November
2024 at 12 noon.
abrdn UK Smaller Companies Growth Trust plc 111
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
NOTICE IS HEREBY GIVEN that the Annual General Meeting of abrdn UK Smaller Companies Growth Trust plc will be held
at 1 George Street, Edinburgh EH2 2LL on Thursday 21 November 2024 at 12 noon for the following purposes:
Ordinary Business
As ordinary business, to consider and, if thought fit, pass the following resolutions, in the case of Resolutions 1 to 11
inclusive, as ordinary resolutions and, in the case of Resolutions 12 and 13, as special resolutions:
1. To receive and adopt the Directors’ Report and audited financial statements of the Company for the financial year
ended 30 June 2024, together with the Independent Auditor’s report thereon.
2. To receive and approve the Directors’ Remuneration Report for the financial year ended 30 June 2024 which
appears on pages 59 to 62 of the Annual Report and Accounts for the financial year ended 30 June 2024 (other
than the Directors’ Remuneration Policy which appears on pages 59 to 60 of the Annual Report and Accounts).
3. To approve a final dividend for the financial year ended 30 June 2024 of 8.3 pence per Ordinary share.
4. To re-elect Manju Malhotra as a Director of the Company.
5. To re-elect Ashton Bradbury as a Director of the Company.
6. To re-elect Alexa Henderson as a Director of the Company.
7. To re-elect Tim Scholefield as a Director of the Company.
8. To re-elect Liz Airey as a Director of the Company.
9. To appoint Johnston Carmichael LLP as Independent Auditor of the Company to hold office from the conclusion of
the Annual General Meeting until the conclusion of the next Annual General Meeting at which accounts are laid
before the Company.
10. To authorise the Directors to fix the remuneration of the Independent Auditor for the financial year to 30 June 2025.
11. Authority to allot shares
That, in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the
passing of this resolution, the Directors of the Company be and they are hereby generally and unconditionally
authorised in accordance with Section 551 of the Companies Act 2006 (the “Act”) to exercise all the powers of the
Company to allot shares in the Company and to grant rights to subscribe for or to convert any security into shares
in the Company (“Rights”) provided that such authority shall be limited to the allotment of shares and the grant of
Rights in respect of shares with an aggregate nominal value of up to £1,843,172 (representing 10% of the
Company’s total issued share capital (excluding treasury shares) as at 4 September 2024), generally from time to
time on such terms as the Directors may determine, such authority to expire at the conclusion of the next Annual
General Meeting of the Company held after the passing of this resolution or on the expiry of 15 months from the
date of passing of this resolution, whichever is the earlier, unless previously revoked, varied, extended or renewed by
the Company in a general meeting, save that the Company may at any time prior to the expiry of this authority
make an offer or enter into an agreement which would or might require shares to be allotted or Rights to be
granted after the expiry of such authority and the Directors shall be entitled to allot shares or grant Rights in
pursuance of such an offer or agreement as if such authority had not expired.
Notice of Annual General Meetin
g
112 abrdn UK Smaller Companies Growth Trust plc
12. Disapplication of pre-emption rights
That, subject to the passing of Resolution 11 set out in the notice of the 2024 annual general meeting (Resolution 11),
and in substitution for any existing power but without prejudice to the exercise of any such power prior to the passing
of this resolution, the Directors of the Company be and they are hereby generally and unconditionally empowered
pursuant to sections 570 and 573 of the Companies Act 2006 (the “Act”), to allot, or make offers or agreements to
allot, equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority conferred by
Resolution 11, and/or by way of a sale of treasury shares for cash, as if section 561(1) of the Act did not apply to any
such allotment or sale, provided that this power:
a) expires at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution
or on the expiry of 15 months from the date of passing of this resolution, whichever is the earlier, unless previously
revoked, varied, extended or renewed by the Company in a general meeting save that the Company may, at
any time prior to the expiry of this authority, make an offer or enter into an agreement which would or might
require equity securities to be allotted or sold out of treasury after such expiry and the Directors may allot or sell
out of treasury equity securities in pursuance of any such offer or agreement as if the power conferred hereby
had not expired; and
b) shall be limited to the allotment of equity securities and the sale of treasury shares up to an aggregate nominal
amount of £1,843,172 (representing 10% of the Company’s total issued share capital (excluding treasury
shares) as at 4 September 2024).
This power shall apply in relation to the sale of equity securities for cash out of treasury as if in the opening paragraph
of this resolution the words “subject to the passing of Resolution 11 set out in the notice of the 2024 annual general
meeting (Resolution 11), and” were omitted.
13. Authority to make market purchases of shares
That, in substitution for any existing power but without prejudice to the exercise of any such power prior to the
passing of this resolution, the Company be and is hereby generally and, subject as hereinafter appears,
unconditionally authorised in accordance with Section 701 of the Companies Act 2006 (the “Act”) to make market
purchases (within the meaning of Section 693(4) of the Act) of Ordinary shares of 25p each in the capital of the
Company (the “Shares”) on such terms and in such manner as the directors of the Company may from time to time
determine (either for cancellation or for retention as treasury shares for future reissue, resale, transfer or
cancellation) provided always that:
a) the maximum aggregate number of Shares hereby authorised to be purchased is 11,051,664, or, if less, the
number representing 14.99% of the issued ordinary share capital of the Company (excluding treasury shares)
immediately prior to the passing of this resolution;
b) the minimum price (exclusive of expenses) which may be paid for each Share purchased pursuant to this
authority shall be 25p (being the nominal value of a share);
c) the maximum price (exclusive of expenses) which may be paid for a Share purchased pursuant to this authority
is the higher of (i) 105% of the average of the middle market quotations (as derived from the Daily Official List of
the London Stock Exchange) for a Share over the five business days immediately preceding the date of
purchase and (ii) the higher of the last independent trade of a Share and the highest current independent bid for
such a Share on the London Stock Exchange at the time the purchase is carried out; and
d) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the
Company after the passing of this resolution or on the expiry of 15 months from the date of passing of this
resolution, whichever is earlier, unless previously revoked, varied, extended or renewed by the Company in a
general meeting, save that the Company may, at any time prior to the expiry of this authority, enter into a
contract to purchase Shares under such authority which will or might be completed or executed wholly or partly
after the expiration of such authority and may make a purchase of Shares pursuant to any such contract.
Notice of Annual General Meetin
g
Continued
abrdn UK Smaller Companies Growth Trust plc 113
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Special Business
As special business, to consider and, if thought fit, pass Resolution 14 as an ordinary resolution and Resolutions 15 and 16
as special resolutions:
14. Directors’ fees
That the Company be authorised to increase the Directors’ aggregate annual remuneration cap contained in Article
19.1 of the Articles of Association of the Company from £200,000 to £250,000, such increase to take effect from the
conclusion of the Annual General Meeting.
15. Tender offers
That, in addition to the authority given to the Company to purchase its own Ordinary shares of 25p each (the
“Shares”) pursuant to Resolution 13 set out above and in accordance with the terms and conditions of the tender
offer(s) which may be set out in the circular to be sent electronically or, if requested in hard copy form to
shareholders, the Company be and is hereby authorised for the purpose of Section 701 of the Companies Act 2006
(the “Act”) to make market purchases (within the meaning of Section 693(4) of the Act) of its issued Shares either for
cancellation or for retention as treasury shares for future reissue, resale or transfer provided that:
a) the maximum number of Shares hereby authorised to be purchased pursuant to one or more tender offer(s) is
7,372,691, or, if less, the number representing 10% of the issued ordinary share capital of the Company
(excluding treasury shares) as at the date of the passing of this resolution;
b) the price which shall be paid for a Share pursuant to any such tender offer made by the Company under the
authority conferred hereby shall be an amount equal to 98% of realisation value of all the assets attributable to
the Shares tendered as at the latest practicable time before such tender offer; and
c) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the
Company after the passing of this resolution or on the expiry of 15 months from the date of passing of this
resolution, whichever is earlier, unless previously revoked, varied, extended or renewed by the Company in a
general meeting save that the Company may, prior to such expiry, enter into a contract to purchase Shares
which will or may be completed or executed wholly or partly after the expiration of such authority and may
make a purchase of Shares pursuant to any such contract.
16. Notice of general meeting
That a general meeting (other than an Annual General Meeting) of the Company may be called on not less than 14
clear days’ notice, provided that this authority shall expire at the conclusion of the next Annual General Meeting of
the Company.
By order of the Board
abrdn Holdings Limited
Company Secretary
1 George Street
Edinburgh EH2 2LL
4 September 2024
Registered Office
1 George Street
Edinburgh EH2 2LL
114 abrdn UK Smaller Companies Growth Trust plc
Notes
i. A shareholder entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend, speak
and vote instead of him/her or on his/her behalf at the meeting. A proxy need not be a shareholder. The shareholder
may appoint more than one proxy, provided that each proxy is appointed to attend, speak and vote in respect of a
different share or shares. If you wish your proxy to speak on your behalf at the meeting, you will need to appoint your
own choice of proxy (not the chairman of the meeting) and give instructions directly to them. Appointing a proxy will
not prevent a shareholder from attending in person and voting at the meeting. A proxy form which may be used to
make such appointment and give proxy instructions accompanies this notice. If you do not have a proxy form and
believe that you should, or if you would like to appoint more than one proxy, please contact the Company’s Registrar,
Computershare Investor Services PLC on 0370 889 4076. In the case of joint holders, the vote of the first named in the
register of members of the Company who tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of other joint holders.
ii. To be valid, the appointment of a proxy, and the original or duly certified copy of the power of attorney or other
authority, if any, under which it is signed or authenticated, should be sent to the Company’s Registrar,
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY so as to arrive not less than
48 hours (excluding non-working days) before the time fixed for the meeting.
iii. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those
shareholders registered in the register of members of the Company at close of business on 19 November 2024 (or, if
the meeting is adjourned, 48 hours (excluding non-working days) before the time fixed for the adjourned meeting)
shall be entitled to attend or vote at the meeting in respect of the number of Ordinary shares registered in their
name at that time. In each case, changes to entries on the register of members of the Company after that time shall
be disregarded in determining the rights of any person to attend or vote at the meeting.
iv. Any shareholder holding 3% or more of the total voting rights of the Company who appoints a person other than the
chairman of the meeting as his or her proxy will need to ensure that both he or she and his/her proxy(ies) comply
with their respective disclosure obligations under the FCA’s Disclosure Guidance and Transparency Rules.
v. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service
may do so for the meeting and any adjournment(s) thereof by utilising the procedures described in the CREST
Manual and/or by logging in to the website www.euroclear. com/CREST. CREST personal members or other CREST
sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to
their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
vi. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST
Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & International Limited’s (“EUI”)
specifications and must contain the information required for such instructions, as described in the CREST Manual.
The message must be transmitted so as to be received by the issuer’s agent (ID number 3RA50) by 12 noon on 19
November 2024 (or, if the meeting is adjourned, 48 hours (excluding non-working days) before the time fixed for the
adjourned meeting). For this purpose, the time of receipt will be taken to be the time (as determined by the
timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve
the message by enquiry to CREST in the manner prescribed by CREST.
vii. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does
not make available special procedures in CREST for any particular messages. Normal system timings and limitations
will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a
voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as
shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system
and timings.
Notice of Annual General Meetin
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Continued
abrdn UK Smaller Companies Growth Trust plc 115
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
viii. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of
the Uncertificated Securities Regulations 2001.
ix. A person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder
by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for
the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may,
under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
The statements of the rights of members in relation to the appointment of proxies in notes i and ii above do not apply
to a Nominated Person. The rights described in those Notes can only be exercised by registered members of
the Company.
x. The terms of appointment of the Directors of the Company are available for inspection on any day (except
Saturdays, Sundays and bank holidays) from the date of this notice until the date of the meeting during usual
business hours at the registered office of the Company and will, on the date of the meeting, be available for
inspection at the venue of the meeting from 15 minutes before the meeting until the conclusion of the meeting.
xi. Shareholders are advised that, unless otherwise stated, any telephone number, website or email address which may
be set out in this notice of Annual General Meeting or in any related documents (including the proxy form or form of
direction) is not to be used for the purposes of serving information or documents on, or otherwise communicating
with, the Company for any purposes other than those expressly stated.
xii. Following the meeting, the results of the voting at the meeting and the numbers of proxy votes cast for and against
and the number of votes actively withheld in respect of each of the resolutions will be announced via a Regulatory
Information Service and placed on the Company’s website: www.abrdnuksmallercompaniesgrowthtrust.co.uk
xiii. It is possible that, pursuant to requests made by members of the Company under Section 527 of the Companies Act
2006, the Company may be required to publish on a website a statement setting out any matter relating to: (i) the
audit of the Company’s accounts (including the Independent Auditor’s report and the conduct of the audit) that are
to be laid before the meeting: or (ii) any circumstances connected with an auditor of the Company ceasing to hold
office since the previous meeting at which annual accounts and reports were laid in accordance with Section 437 of
the Companies Act 2006. The Company will be required to do so once it has received such requests either from
members representing at least 5% of the voting rights of the Company or from at least 100 members who have a
relevant right to vote and hold shares in the Company on which there has been paid up an average sum per
member of at least £100. Such requests must be made in writing and must state the member’s full name and
address and be sent to the Company’s registered office. The Company may not require the members requesting
any such website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006.
xiv. As at 6.00pm on 4 September 2024 (being the last practicable date prior to publication of this notice) the Company’s
issued share capital comprised 73,726,911 Ordinary shares of 25p each and 30,437,511 Ordinary shares held in
treasury. Each Ordinary share (other than any Ordinary shares held in treasury) carries the right to one vote at a
general meeting of the Company. Accordingly, the total number of voting rights in the Company as at 4 September
2024 was 73,726,911.
xv. If you wish to attend the meeting in person, there will be a Members’ register for you to sign on arrival.
xvi. Under section 319A of the Companies Act 2006, the Company must answer any question relating to the business
being dealt with at the meeting put by a member attending the meeting unless:
a) answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of
confidential information;
b) the answer has already been given on a website in the form of an answer to a question; or
c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
xvii. Information regarding the Annual General Meeting, including information required by Section 311A of the
Companies Act 2006, is available from the Company’s website: www.abrdnuksmallercompaniesgrowthtrust.co.uk
116 abrdn UK Smaller Companies Growth Trust plc
xviii. Under section 338 of the Companies Act 2006, a member or members meeting the qualification criteria set out at
note xix below, may, subject to certain conditions, require the Company to circulate to members notice of a
resolution which may properly be moved and is intended to be moved at that meeting. The conditions are that: (i)
the resolution must not, if passed, be ineffective (whether by reason of inconsistency with any enactment or the
Company’s constitution or otherwise); (ii) the resolution must not be defamatory of any person, frivolous or
vexatious; and (iii) the request: (a) may be in hard copy form or in electronic form; (b) must identify the resolution of
which notice is to be given by either setting out the resolution in full or, if supporting a resolution sent by another
member, clearly identifying the resolution which is being supported; (c) must be authenticated by the person or
persons making it; and (d) must be received by the Company not later than six weeks before the meeting to which
the requests relate.
xix. Under section 338A of the Companies Act 2006, a member or members meeting the qualification criteria set out at
note xix below, may, subject to certain conditions, require the Company to include in the business to be dealt with at
the meeting a matter (other than a proposed resolution) which may properly be included in the business (a matter
of business). The conditions are that: (i) the matter of business must not be defamatory of any person, frivolous or
vexatious; and (ii) the request: (a) may be in hard copy form or in electronic form; (b) must identify the matter of
business by either setting it out in full or, if supporting a statement sent by another member, clearly identify the
matter of business which is being supported; (c) must be accompanied by a statement setting out the grounds for
the request; (d) must be authenticated by the person or persons making it; and (e) must be received by the
Company not later than six weeks before the meeting to which the requests relate.
xx. In order to be able to exercise the members’ right to require: (i) circulation of a resolution to be proposed at the
meeting (see note xvii); or (ii) a matter of business to be dealt with at the meeting (see note xviii), the relevant
request must be made by: (a) a member or members having a right to vote at the meeting and holding at least 5%
of total voting rights of the Company; or (b) at least 100 members having a right to vote at the meeting and holding
shares in the Company on which there has been paid up an average sum, per member, of at least £100.
Notice of Annual General Meetin
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Continued
abrdnuksmallercompaniesgrowthtrust.co.uk
abrdn UK Smaller
Companies Growth Trust plc
Annual Report 30 June 2024
Capturing the growth potential of UK smaller companies
For more information visit abrdnuksmallercompaniesgrowthtrust.co.uk
abrdn.com
abrdn UK Smaller Companies Growth Trust plc 117
Directors
Liz Airey (Chairman)
Ashton Bradbury
Alexa Henderson
Manju Malhotra
Tim Scholefield
Registered Office and Company Secretary
abrdn Holdings Limited
1 George Street
Edinburgh EH2 2LL
Email: CEF.CoSec@abrdn.com
Alternative Investment Fund Manager
abrdn Fund Managers Limited
1 George Street
Edinburgh EH2 2LL
Investment Manager
abrdn Investment Management Limited
1 George Street
Edinburgh EH2 2LL
Company Registration Number
SC145455 (Scotland)
Website
abrdnuksmallercompaniesgrowthtrust.co.uk
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 889 4076
Website: investorcentre.co.uk
Depositary
BNP Paribas SA, London Branch
10 Harewood Avenue
London NW1 6AA
Stockbroker
Winterflood Investment Trusts
Riverbank House
2 Swan Lane
London EC4R 3GA
Independent Auditor
KPMG LLP
319 St. Vincent Street
Glasgow G2 5AS
Legal Entity Identifier (“LEI”)
213800UUKA68SHSJBE37
Contact Addresses