The Global Smaller
Companies Trust PLC
Annual Report and Financial Statements
for the year ended 30 April 2025
Company Number: 28264
Strategic Report
Company Overview 1
Investment Manager’s Investment Philosophy
and Process 2
Investment Case Studies 4
Financial Highlights 8
Chairman’s Statement 9
Lead Manager’s Review 14
Responsible Investment 24
Thirty Largest Holdings 28
List of Investments 30
Ten Year Record 34
Purpose, Strategy and Business Model 36
Promoting Success 39
Principal and Emerging Risks 40
Key Performance Indicators 42
Principal Policies 43
Governance Report
Directors 46
Directors’ Report 48
Chairman’s Statement on Corporate Governance 55
Applying the principles of the AIC Code 57
Report of the Audit and
Management Engagement Committee 59
Report of the Nomination Committee 63
Directors' Remuneration Report 65
Statement of Directors’ Responsibilities 68
Independent Auditor’s Report 69
Contents
Financial Report
Income Statement 75
Statement of Changes in Equity 76
Balance Sheet 77
Statement of Cash Flows 78
Notes to the Financial Statements 79
Notice of Annual General Meeting 95
Other Information
Management and Advisers 100
Additional Information for Shareholders 101
How to Invest 102
25 Year Historical Information 103
Alternative Performance Measures 105
Glossary of Terms 108
Analysis of Ordinary Shareholders 110
2025-26 Financial year events
Annual General Meeting 15 August 2025
Final dividend payable 20 August 2025
Half-yearly results announced December 2025
Interim dividend payable January 2026
Final Results for 2026 announced June 2026
Forward-looking statements
This document may contain forward-looking statements with respect to the financial condition, results of operations and business of the Company. Such statements
involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially from those expressed or
implied by forward-looking statements. The forward-looking statements are based on the Directors’ current view and on information known to them at the date of this
document. Nothing should be construed as a profit forecast.
Report and Financial Statements 2025 | 1
Overview
The Global Smaller Companies Trust PLC (the ‘Company’) was founded in 1889 with initial capital of
£1m. As at 30th April 2025, the Company had net assets with a value of £736.8m (2024: £870.1m)
and investments in more than 40 countries worldwide.
Objective
To invest in smaller companies worldwide in order to secure a high total return.
Investment team
A well resourced and experienced investment management team at Columbia Threadneedle
Investments aims to identify the best smaller company opportunities listed on global stock markets.
Investment philosophy
A long term, conservative approach to investing in good quality, growing businesses when they become
available at an attractive valuation.
A dividend hero
By investing in a portfolio of growing, high quality listed companies, the Company’s own dividend has
risen for 55 consecutive years.
The Company is suitable for retail investors in the UK, professionally advised private clients and
institutional investors who seek growth over the long term and who understand and are willing to accept
the risks, as well as the rewards, of exposure to smaller companies.
Visit our website at globalsmallercompanies.co.uk
The Company is registered in England and Wales with company registration number 28264
Legal Entity Identifier: 2138008RRULYQP8VP386
Company Overview
DIVIDEND
HERO
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chairman’s StatementOverview Auditor’s Report
2 | The Global Smaller Companies Trust PLC
Investment philosophy
A long term, conservative approach to investing in good quality, growing businesses when they
become available at an attractive valuation.
Investment Manager’s
Investment Philosophy
and Process
The attraction of
smaller companies
n
A history of delivering long term returns that
are superior to those from larger companies.
n
Not well known and starting from a small
base, this is the home of future ‘multi
baggers.’
n
A very large investment universe with
thousands of companies to choose from.
Why Columbia Threadneedle Investments
n
Large and experienced team of smaller company focussed fund managers
that are supported by globally located research analysts.
n
Well resourced, with excellent access to corporates and third party research.
n
A prudent approach that looks to generate the higher return potential that is
inherent in smaller companies, but with lower levels of risk.
n
A proven investment philosophy and process that has delivered strong long
term, risk adjusted, total returns to shareholders.
Deutsche Numis UK Smaller Companies
(excluding investment companies) Index
MSCI World Index FTSE 100 Index
2025
2000 2005 2010 2015 2020
MSCI ACWI Small Cap
Net Total Return Index
The Global Smaller
Companies Trust
-100
0
100
200
300
400
500
600
700
800
900
Historic Returns
Source: Columbia Threadneedle Investments
The Company’s Benchmark is a blend of two indices: the MSCI All Country World ex UK Small Cap Index net (80%) and the Deutsche Numis UK Smaller Companies (excluding investment companies)
Index (20%).
Report and Financial Statements 2025 | 3
Overview
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chairman’s StatementOverview Auditor’s Report
Company analysis
Idea generation
1
4
2
n
Range of valuation measures used
n
Trends in metrics important
n
Assessment of downside risk and upside
potential
n
Analysis of implied market expectations
n
Margin of safety sought
n
Understandable business model
n
Competitive advantages
n
Favourable industry structure /
conditions
n
Diversifiedcustomer/supplier/
product set
n
Pricing power / market share
growth
n
Freecashflowgeneration
n
Financial strength
n
ESG and Sustainability
n
Capable operators
n
Rational
n
Good capital allocators
n
Aligned interests
n
Prudent
n
Transparent with shareholders
Sell discipline
In the Rest of World (Asia, Latin America and some other smaller markets outside of the main
regions) component of The Global Smaller Companies Trust we use third party managed funds
to gain exposure to these markets. These funds are carefully selected and actively monitored
through a rigorous process including input from Columbia Threadneedle Investments’ multi-
manager fund selection team.
Investment Process
A better
investment
opportunity
becomes
available
Investment
thesis no longer
intact
Loss of
confidence in
the company’s
management
team
Shares reach a
full or extended
valuation
Structural
deterioration in
the quality of
the company’s
business model
Sell side
input
Regional
portfolios and
central research
analysts
Watchlist
Company
meetings
(c.1,000 pa)
3
Portfolio construction and monitoring
Attractive
Valuation
High
Quality
Business
Strong
Management
High
Quality
Business
4 | The Global Smaller Companies Trust PLC
Overview
Company Overview
Curtiss-Wright was founded in 1929 by aviation pioneers Glen Curtiss and the Wright Brothers. It develops, designs and builds highly
engineered, mission-critical components for the aerospace & defence, commercial power, process and general industrial end markets.
Products include actuation and propulsion systems, electronics, valves and pumps.
North America Case study
Curtiss-Wright
n
Shares out of favour at purchase because of supply
chain disruptions and a delay in the signing of the
US defence budget.
n
Shares were available at 14x forward earnings
compared to the long term average of 18x.
n
Technical expertise, intellectual property and close
customer collaboration has led to the production of
industry leading, proprietary products.
n
Significantcostoffailuremeansthatcustomers
rarely switch products.
n
Dominant market shares in the company’s chosen
niches.Wideprofitmargins.
n
Long term expansion in earnings from exposure
to growing markets such as defence and nuclear
power as well as deployment of capital into
accretive bolt on acquisitions.
n
Consistent operational execution.
n
History of healthy returns on capital.
n
Since purchase in 2022, trailing 12m sales have
grown 27%, EPS has climbed 52% and the shares
have moved up 145%.
Adj. Net Sales ($M)
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
20242023202220212020
+7.9% CAGR
Adj. Operating Margin
15.6%
15.8%
16.0%
16.2%
16.4%
16.6%
16.8%
17.0%
17.2%
17.4%
17.6%
20242023202220212020
+120bp
Adj. Diluted EPS
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
20242023202220212020
+13.4% CAGR
Adj. Free Cash Flow ($M)
$0
$100
$200
$300
$400
$500
20242023202220212020
110% Avg FCF Conversion
Attractive
Valuation
High
Quality
Business
Strong
Management
High
Quality
Business
Report and Financial Statements 2025 | 5
Strategic Report
Paul Young started KitWave Group in 1987 through the acquisition of a single-site confectionary wholesale business in North Shields,
UK. Over the years it has grown organically and through acquisitions. Today, in addition to confectionary, it also distributes food,
alcohol and tobacco to independent convenience stores, restaurants and leisure outlets. The business has a national footprint of 37
depots and serves 46,000 customers.
UK Case study
Kitwave Group
M&A Growt h
• 15 acquisitions in 13 years
• Acquired revenue to FY24 c.£380m
• Ave. EBITDA 5.1x (net c ash cos ts to p re-
IRFS 16 acquired EBITDA)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Nov ’12
£11m
Feb ’14
£39m
Jan ’15
£12m
Jun e ’15
£22m
Jun e ’15
£7m
Aug ’16
£5m
Nov ’16
£80m
Aug ‘19
£52m
Oct ’19
£11m
Dec ’22
£30m
Nov ’23
£10m
Group Revenue FY24:
£663.7m
Adjusted Operating
Profit FY24:
£34.0m
Sept ’11
£53m
Feb ’22
£17m
Mar ’24
£25m
Financial Year to 31st October
PH OEN IX
FINE FO ODS
LI MIT ED
Financial Year to 30
th
Apri l 18
th
mths
Group Revenue FY11:
£100m
Adjusted Operating
Profit FY11:
£1.7m
Sept ’24
£130m
Organic Growth
• Organic revenue growth FY18-FY24 of £180.1m
CAGR 6.7%
n
Shares were ‘undiscovered’ at purchase because
of a low market capitalisation and little sell-side
analyst coverage.
n
As a consequence, the stock was purchased for
6.5x forward EBITDA. This was at a deep discount
to the implied takeover valuation of larger peer
Booker Group in 2018.
n
Scale advantages: wide product selection, bulk
purchase discounts and superior technology (online
ordering, delivery route optimisation and equipment
thatenhanceswarehouseefficiency).
n
Superiorcustomerservice:highfillratesandnext
day delivery.
n
Consistent market share gains in this fragmented
industry.
n
Strongfreecashflowgeneration.
n
Long term growth in earnings from new business
wins, increased customer wallet share, acquisitions
andefficiencies.
n
Management have an outstanding reputation in
effecting this ‘low value, high frequency’ delivery
model.
n
History of shareholder value creation from previous
acquisitions.
n
Significantinsiderownership.
n
Since purchase in 2021, sales have grown 74%, EPS
has increased 275% and the shares have climbed
64% (we believe that transitory factors contributed
tolastyear’ssharepriceunderperformance).
Attractive
Valuation
High
Quality
Business
Strong
Management
High
Quality
Business
6 | The Global Smaller Companies Trust PLC
Overview
Company Overview
In 1969, the Vila, Corbera, Garrigós and Serra
families joined together to form Astral, a
manufacturer of components for swimming
pools. During the 1970’s and 1980’s, the company
expanded its operations significantly and eventually
listed as Fluidra on the Madrid stock exchange in
October 2007. Today, the company specialises in
the manufacture and marketing of equipment and
related products for both residential and commercial
swimming pools and wellness facilities. Products
include: pumps, valves, fittings, heaters and
chemicals. Fluidra has a presence in 47 countries.
Europe case study
Fluidra
n
Shares undervalued at purchase because of
sluggish construction markets.
n
Shares were purchased at 10x forward EBITDA, a
discount to global peers.
n
Strong brand, based on the development of
innovative and highly reliable products.
n
Specialist, global distribution network.
n
Large installed base that normally replaces
equipment on a like-for-like basis. This leads to
recurring revenues.
n
Disciplined oligopoly. Long history of price
increases.
n
Strongfreecashflowconversion.
n
Growth in business value from cyclical recovery
in construction markets, introduction of new
products, upgrading of an aged installed base and
acquisitions of smaller competitors.
n
Implementation of best practices has created a
trackrecordofrisingprofitability.
n
History of capital allocation that has materially
increased shareholder value.
n
Significantinsiderownership.
n
Since purchase in 2017 revenues have grown
169%, EPS has climbed 339% and the share price
has appreciated 125%.
Attractive
Valuation
High
Quality
Business
Strong
Management
High
Quality
Business
Report and Financial Statements 2025 | 7
Strategic Report
n
Shares undervalued at purchase because of worries
about the health of housing markets in Europe.
n
Shares were available at 6x forward EBITDA, well
below similar businesses listed in other regions.
n
Strong brand that is based on reliability and
endurance.
n
Benefitsofverticalintegration:
production of high-quality products at lower costs.
n
Dominant global market share in the company’s
chosen niches.
n
Rational oligopoly in Japan.
n
Prospective growth through new product
introductionsandgeographicexpansion.Profit
margin development through international facility
consolidation.
n
Strong operational execution.
n
History of industry leading returns on capital.
n
Focus on R&D.
n
Since purchase in 2023, trailing 12m sales have
grown 8%, EPS is up 37% and the shares have
climbed 97%.
Japan case study
Sanwa Holdings
Manji Takayama, established Sanwa Shutter Manufacturing
in 1956 in Amagasaki, Japan. Over the next thirty years the
company grew within Japan to become the market leader, selling
lightweight and heavy-duty shutters and doors for residential and
commercial buildings. In 1996, it acquired ODC and this secured
the company’s entry into the promising US market. Similarly, it
went into Europe in 2003 with the acquisition of Novofern. From
humble beginnings, Sanwa now manufactures in 27 locations
globally and employs almost 13,000 people.
Attractive
Valuation
High
Quality
Business
Strong
Management
High
Quality
Business
8 | The Global Smaller Companies Trust PLC
(1) See Alternative Performance Measures on pages 105 and 107.
(2) See Glossary of terms on page 108 for explanation of “Benchmark”.
(3) Total dividend comprises an interim dividend (paid on 23 January 2025) of 0.70 pence and a final dividend for 2025 of 2.30 pence (payable on 20 August 2025), subject to
shareholder approval at the AGM.
(4) Comparative figures for the years prior to 2020 have been restated due to the sub-division of each existing ordinary share of 25p into ten new ordinary shares of 2.5p each on
31 October 2019.
Financial Highlights year to 30 April 2025
Total Dividend
Dividend
(3)
of 3.00p
(2024: 2.81p), the 55th
consecutive annual
increase, up by 6.8%
(2024: up by 22.2%).
3.00p
Discount
The Company's shares
ended the year at a
discount
(1)
to NAV of
11.0% (2024: 10.0%).
-11.0%
Net Asset Value (‘NAV’) total
return
NAV with debt at fair value
(1)
total return
(1)
of -4.8% (2024:
+9.0%) versus -0.8% for the
Benchmark (2024: +11.3%).
The NAV per share with debt at fair
value fell to 167.1p from 178.1p.
-4.8%
Share price total return
Share price total return
(1)
of
-5.6% (2024: +12.7%).
The share price ended the year
at 148.6p (2024: 160.2p).
-5.6%
NAV
(1),(4)
per share at 30 April – pence
Mid-market price
(4)
per share at 30 April – pence
Source: Columbia Threadneedle Investments
0p
20p
40p
60p
80p
100p
120p
140p
160p
180p
200p
2025202420232022202120202019201820172016
0p
20p
40p
60p
80p
100p
120p
140p
160p
180p
2025202420232022202120202019201820172016
Source: Columbia Threadneedle Investments
Share price premium/(discount)
(1)
at 30 April – %
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
2025202420232022202120202019201820172016
Source: Columbia Threadneedle Investments
Dividends
(3),(4)
– pence per share
0.0p
0.5p
1.0p
1.5p
2.0p
2.5p
3.0p
2025202420232022202120202019201820172016
Source: Columbia Threadneedle Investments
Delivering high total returns over the long term
The dividend has increased every year for the past 55 years and over the last ten years is up 12.0%
compound per annum, compared with inflation (RPI) of 4.5% compound per annum.
In the last ten years the Company has turned a £1,000 investment, with dividends reinvested, into £1,718,
a compound annual share price total return of 5.6%.
Report and Financial Statements 2025 | 9
Chairman’s Statement
Dear Shareholder,
Although the past 12 months has been a challenging time for
the portfolio, I am confident that the changes made have put
your Company on a strong footing for the future. The Company’s
Net Asset Value (‘NAV’) total return (with long term borrowings at
fair value) was -4.8% in the financial year. The total return from
the Company’s Benchmark, a blend of two indices, the MSCI All
Country World ex UK Small Cap Index net (80%) and the Deutsche
Numis UK Smaller Companies (excluding investment companies)
Index (20%), was -0.8% for the year to 30 April 2025. Longer term
total returns from the NAV, Benchmark and share price are shown
in the following table, highlighting the strong returns that the asset
class has delivered to patient investors.
Financial markets continued to be affected by shifting geopolitics
during the financial year ended 30th April 2025. Persistent
inflation, wealth inequality and immigration were key issues
leading to electorates unseating incumbent parties. Furthermore,
the dramatic reorientation of American trade and foreign policy,
following the election of Donald Trump, challenged the post-World
War II international order and affects the outlook for inflation and
economic growth. The new US government’s approach to peace
negotiations between Russia and Ukraine and its proposed
territorial expansions overseas alarmed European allies. This
was compounded by the US no longer being unequivocally
committed to NATO Article 5 (collective defence). Consequently,
this prompted European governments to increase their spending
on defence in the years ahead. Despite new approaches by the US
administration, conflicts in Ukraine and the Middle East are still
ongoing. Only time will tell if President Trump’s policies will work,
“By introducing a portfolio with higher conviction, the Manager can take advantage
of the very best investment opportunities whatever is happening in the world.”
Anja Balfour, Chairman
Chairman’s Statement
Apr
24
Aug
24
Dec
24
Apr
25
2.0
3.0
4.0
1.0
8.0
5.0
0.0
US UK
Europe Japan China India
7.0
6.0
Interest rate by country (%)
Source: Columbia Threadneedle Investments
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chairman’s StatementOverview Auditor’s Report
Performance: Total returns over the long-term
1 year
%
3 years
%
5 years
%
10 years
%
25 years
%
Company NAV
total return
-4.8 0.7 48.7 93.3 608.0
Benchmark
total return
-0.8 8.1 61.4 103.6 588.5
Company
share price
total return
-5.6 -0.2 43.9 71.8 725.8
Source: Columbia Threadneedle Investments
10 | The Global Smaller Companies Trust PLC
Geographical performance (total return sterling adjusted) for the year ended 30 April 2025
-15
-12
-9
-6
-3
0
3
6
9
12
15
Rest of
World
JapanUSAEuropeUK
Source: Columbia Threadneedle Investments
Portfolio
Local smaller companies index (see Lead Manager’s Review)
-13.4%
4.0%
-1.8%
6.0%
-4.8%
-4.0%
11.0%
6.6%
-3.1%
-7.2%
-9.8%
Latin
America
Asia Pacific
ex Japan
*Performance of the Rest of World portfolio is shown here against both the Asian and Latin American smaller company indices.
raised yields on US Treasury bonds. Similarly, we saw a significant
weakening in the US Dollar against major currencies.
The US economy was, however, supported by higher asset
prices, fiscal spending and artificial intelligence-related capital
expenditure. In contrast the US housing sector was hurt by
higher interest rates. The UK economy was challenged by low
productivity growth, stubborn services inflation and higher costs
for businesses, although signs of life did appear towards the end
of the financial year. European economies continued to be divided,
with tourism-focussed countries performing well but the more
industrial driven countries challenged by elevated energy costs,
competition from China and now tariffs. However, Germany's
suspension of its "debt brake" and commitment to approximately
€900 billion in spending on defence and infrastructure could
prove to be a turning point for “The Old Continent”. Wage growth
in Japan helped domestic consumption. In addition, the lower
yen encouraged inbound tourism and the end of negative interest
rates helped the country’s financial sector.
China continued to face challenges with weak consumer
confidence, although during the year the government increased
efforts to stimulate the economy and the property market
showed signs of stabilisation. Taiwan benefitted from the ongoing
investment cycle in artificial intelligence. Growth in India, which
has been strong for some time, lost a little momentum this
year and interest rates were cut as inflation moderated. In Latin
America, stubborn inflation and concerns over the fiscal deficit
held back Brazil. On the other hand, in Argentina, sentiment
improved as President Javier Milei’s deregulation and deficit
reduction efforts bore fruit.
however, it is clear that the benefits are uncertain and the costs are
real. Recent events in Iran have further added to these difficulties.
In the UK the newly elected Labour government promised faster
economic growth. However, tight budgetary constraints soon
impacted progress on some of those initiatives, while ongoing
imbalances in the labour market led to UK inflation remaining
higher than hoped for. Populism was on the march in continental
Europe, exemplified by the far right AFD party’s unprecedented 20%
share of the vote in Germany’s general election.
For most of the financial year, major economies successfully
navigated a higher interest rate environment and appeared to be on
course for a 'soft landing.' Labour markets remained healthy with
solid wage growth. Momentum in world economic growth slowed
towards the end of the period as uncertainty over the new US
administration’s trade and foreign policy weighed on business and
consumer sentiment.
With inflation moderating across developed markets, central banks
started to ease monetary policy. The European Central Bank led in
June, followed by other major central banks, resulting in cumulative
cuts of 2.00% in the Eurozone, 1.00% in the US, and 0.75% in
the UK. Japan remained an outlier, with a long awaited return to
inflation leading to two rate hikes in the year by the Bank of Japan.
Unusually, despite most central banks lowering interest rates, 10
year government bond yields remained at elevated levels compared
to the last 15 years. This reflected investor concerns over the
future path of inflation and the size of government deficits. In the
case of the US, lower demand from foreigners and diminished
confidence in the country’s ‘safe haven’ status and governance,
Report and Financial Statements 2025 | 11
Chairman’s Statement
Performance and the Discount
The Lead Manager’s Review starting on page 14 covers the
year from a market and portfolio view in detail. The chart on the
previous page shows how our regional portfolios performed in the
year compared to their relevant local smaller company indices.
Relative to local small cap market returns, performance in the
UK and Europe was disappointing and actions which have been
taken to address this are outlined in the Lead Manager’s Review.
North America was slightly behind the regional index. In Japan,
the portfolio’s one remaining third party fund was insourced in the
financial year, resulting in this geography now being completely
managed by Columbia Threadneedle Investments’ internal
Japanese equities team. It was pleasing to see early success
from this transition with the Japanese portfolio delivering strong
outperformance in the financial year. The Rest of World, while down,
delivered relative outperformance in the period.
Over the last few years UK investment trust company discounts
have widened, given increased caution around the economic and
geopolitical outlook and the ongoing trend towards passive, index-
based global investment funds. There have been outflows from
UK based equity funds in general and smaller company funds in
particular have been hurt by this trend. Starting the financial year
at 10.0%, your Company’s discount widened slightly to 11.0%. The
wider discount meant that on a total return basis the Company’s
share price fell by 5.6% over the year.
The Board continues to believe that a consistently applied
approach to share buy-backs is in the best interests of
shareholders, providing liquidity for those in need of an exit along
with NAV accretion to remaining holders. The pace of buy-backs
was again stepped up compared to previous years with some
47.3m shares bought back, representing 9.6% of the starting
share capital (2024: 30.2m shares) repurchased across some 222
trading days, enhancing the NAV per share by 1.0% in the process.
The chart below illustrates the Company’s discount (and premium)
over the last 10 years and that of the wider investment trust sector,
providing a reminder that discounts/premiums in the investment
trust sector tend to be cyclical. The Board is fully cognisant that the
discount is currently wider than its target of 5% or less in normal
market conditions. To address this, the Company has increased
its efforts on marketing and PR, aiming to attract interest in the
shares from both existing and new investors. Share repurchasing
is another tool employed by the Company to address the discount.
The Manager has also taken measures to improve investment
performance relative to the Company’s Benchmark, these include:
changes within the investment team, a reduction in the number of
investments held by the Company, refinement of the Company’s
approach to selling investments and increased use of additional
resources within Columbia Threadneedle Investments.
Dividends
The companies in the portfolio continue to deliver healthy levels
of income as a result of their cash generative nature. Following
on from the 2.9% increase in the interim dividend, the Board has
decided to recommend the payment of a final dividend of 2.30p,
meaning the full year payment will be up by 6.8% to 3.00p. This will
be paid to shareholders on 20 August 2025 and will be the 55th
consecutive increase in the Company’s dividend.
Gearing Policy
The Board remains of the view that making use of our borrowing
powers over the long term will serve to enhance shareholder returns
as markets rise over time. The Manager is also able to make use
of the facility to take advantage of new investment opportunities
and for funding buy-backs without being forced to make immediate,
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chairman’s StatementOverview Auditor’s Report
The Global Smaller Companies Trust
(period mean)
Premium/(Discount) to NAV (%)
-25
-20
-15
-10
-5
0
5
2025
2015 2016 2017 2018 2019 2020 202320222021
UK Investment Companies (Ex 3i)
(period mean)
The Global Smaller Companies TrustUK Investment Companies (Ex 3i)
2024
10 year history of (discount)/premium compared to an index of UK Investment Companies (ex 3i) weighted by market capitalisation
Source: Columbia Threadneedle Investments
12 | The Global Smaller Companies Trust PLC
simultaneous disposals. At the end of the financial year, effective
gearing was 5.3% compared to 4.7% a year earlier, reflecting use
of cash for share buy-backs. Borrowings were made up of £35m
2.26% sterling loan notes maturing in 2039 and £16.1m of
drawings in US dollars, Yen and Euros under our revolving credit
facility. Reflecting the predominantly fixed rate nature of the debt,
our borrowing costs remain low.
Costs
Ongoing charges (excluding performance fees from collective
holdings) for the year reduced slightly over the year moving from
0.78% to 0.74%. Ongoing charges including performance fees from
collective holdings were 0.74% (2024: 0.80%). We are pleased to
report that these remain low compared to many smaller company
funds in the market.
Responsible Investment
The Company is not an investment trust with ESG or sustainable
characteristics. However, as part of its overall risk management
process, the Manager integrates the consideration of financially
material environmental, social, and governance (‘ESG’) factors into
its research and investment process and encourages stronger ESG
practices to be adopted by issuers through its engagement and
voting activities. Some examples of this are outlined in the section
on Responsible Investment on pages 24 to 27.
Board Changes
Following the Annual General Meeting on 13 August 2024, Jo Dixon
retired from the Board. Jo was Chair of the Audit and Management
Engagement Committee and Senior Independent Director and
following her retirement Nick Bannerman and Graham Oldroyd were
appointed to these roles respectively.
As reported in the Half-Year Report, as part of its succession plan,
and having followed a formal recruitment process, assisted by the
use of professional search consultants, the Board was pleased to
appoint Zoe King as a non-executive Director, with effect from
12 December 2024.
I was appointed to the Board on 1 June 2015 so have now served
for just over ten years. In accordance with the Board’s long-term
planning, I will retire following the conclusion of the forthcoming
Annual General Meeting on 15 August 2025. I am pleased
to report that the Board intends to appoint Graham Oldroyd
to succeed me as Chairman. Graham is currently the Senior
Independent Director and has in-depth investment knowledge,
expertise and experience in international investment management
as well as leadership skills and has made a significant contribution
to the Company since joining the board in October 2019. As a
consequence, Bulbul Barrett has agreed to take on the role of
Senior Independent Director, from Graham from the conclusion of
the forthcoming AGM.
Cancellation of the Share Premium Account and Capital
Redemption Reserve
As I noted earlier, the pace of share buy-backs carried out by the
Company has continued to increase as part of the Board’s efforts
to moderate discount volatility and to reduce the discount to NAV
at which the Company’s shares trade. The Company has a sizeable
share premium account and capital redemption reserve, however
these two reserve accounts are non-distributable. Cancelling the
amounts standing to the credit of such reserves will provide the
Company with additional flexibility as the resultant distributable
reserves will be able to be used in future, if required, to fund share
buy-backs, dividends and other returns of capital in accordance
with applicable law. The Board is therefore seeking shareholder
authority for the cancellation of the Company’s share premium
account and capital redemption reserve at the forthcoming Annual
General Meeting.
Annual General Meeting
The Annual General Meeting will take place at Chartered
Accountants' Hall, 1 Moorgate Place, London EC2R 6EA on Friday,
15 August 2025 at 12.00 noon. We hope as many shareholders
as possible will attend. Nish Patel, the Lead Manager, will give a
review of the year together with his view on the outlook. We will
also be streaming the meeting live on the internet so that those
shareholders who cannot attend in person will be able to view
the proceedings. The live stream can be accessed by registering
here: https://www.investormeetcompany.com/the-global-
smallercompanies-trust-plc/register
Voting on all resolutions at the AGM will be conducted by way
of a poll, the results of which will be announced and posted on
the Company’s website following the meeting. You are therefore
encouraged to lodge your votes prior to the meeting by completing
your form of proxy or form of direction in accordance with the
instructions shown.
Shareholders who are unable to attend the AGM are
requested to submit any questions they may have with regard
to the resolutions proposed at the AGM or the performance
of the Company in advance of the meeting to gscagm@
columbiathreadneedle.com. Following the AGM, the Lead
Manager’s presentation will be available on the Company’s
website at globalsmallercompanies.co.uk.
Outlook
The outlook for the world economy is complicated by the presence
of numerous crosscurrents. What seems clear is that uncertainty
Report and Financial Statements 2025 | 13
Chairman’s Statement
is likely to remain high and there is a wide range of potential future
outcomes.
There are several unanswered questions on which we may have
more clarity in the coming 12 months. We don’t yet know the final
level of tariffs and what the impact of those might be on world
economic growth and inflation. In recent years vast amounts
of capital have been deployed on projects related to artificial
intelligence and it will be interesting to see if those investments
start to produce an adequate return this year. The size of fiscal
deficits has been a concern for some time now and recent rising
government bond yields suggest that the market is becoming more
sensitive to this issue. This will be something to watch closely.
Positively, as deregulation takes hold, taxes are potentially cut and
tariffs are finalised, the prospects for the US could improve. We
now seem to have some political stability in the UK and strong
consumer balance sheets, low exposure to tariffs and housing
sector reform are all supportive factors for this economy. For
Europe, rising fiscal spending and lower energy costs could also
be helpful. Implementation of some of Mario Draghi's proposals
for increased European competitiveness would be very welcome.
Our expectation is that over the longer term Japan will continue
to benefit from corporate reform and a return to inflation. Finally,
the weakening of the US Dollar is not all bad news, as this has
historically been helpful to the Emerging Markets and the Company
has good exposure to this region.
Many of the factors that kept inflation benign for several years
now appear to be reversing. Investors should take comfort that
if the environment has changed, your Company is well prepared.
Its portfolio of high quality companies have pricing power, robust
balance sheets and strong free cash flow generation. Although last
year was a difficult year, the Board is reassured that the portfolio
is well diversified by sector and geography and the Manager is
very well resourced. As illustrated in the Lead Manager’s report, by
refining the investment team approach and introducing a portfolio
with higher conviction, the Manager can take advantage of the very
best investment opportunities whatever is happening in the world.
Anja Balfour
Chairman
30 June 2025
Strategic Report Governance Report Financial Report Notice of Meeting
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Chairman’s StatementOverview Auditor’s Report
14 | The Global Smaller Companies Trust PLC
Performance
The Company’s NAV total return and share price total return
were -4.8% and -5.6% respectively in the financial year. This
compared to a -0.8% fall in the Benchmark. Disappointingly,
the NAV total return lagged the Benchmark. In line with the
investment trust sector as a whole, the discount to NAV
widened slightly over the year and this meant that the share
price total return for the year was also behind the Benchmark.
During the year, investment performance was mixed across the
regional portfolios with outperformance (against their regional
benchmarks) in Japan and the Rest of World outweighed by
underperformance in the UK, Europe and North America. The
background to this performance follows in this report. As a
consequence, the Company’s NAV total return is now behind its
Benchmark over 1, 3 and 5 years.
To help improve investment performance, over the course
of the year several changes were made to the way that the
Company’s assets are managed. The investment team was
strengthened and the previously outsourced third party
Japanese equities fund was internalised. To concentrate capital
in the best investment opportunities, the number of holdings
within the Company were reduced from 213 to 196. The team’s
approach to selling investments was refined. Finally, there
was greater utilisation of additional resources within Columbia
Threadneedle Investments such as central research analysts
and multi manager teams. We believe these enhancements
should lead to better investment performance in the future
and we will look for opportunities to make further investment
process improvements in the coming year.
It was encouraging to see performance improve as the financial
year progressed, suggesting that some of these changes are
starting to produce results: the Company’s NAV underperformed
over the first 7 months of the financial year but was ahead over
the last 5 months.
As of the end of the financial year, the Company’s NAV has
outperformed all of its AIC global smaller company investment
trust peers over 5 years. As has been the case in recent
financial years our investment income was strong, allowing
the Board to recommend an inflation-beating 6.8% increase in
the annual dividend. The Company’s dividend per share has
grown by 12.0% compounded over the last 10 years, one of
the fastest rates of growth across the investment trust market.
This reflects the financial success of the companies held in our
portfolio.
Global Financial Markets Backdrop
Equities of smaller companies fell slightly across the globe
in the financial year ended 30th April 2025, another period
Lead Manager’s Review
“We have confidence that over the coming years our diversified portfolio of higher
quality businesses is well positioned not only to grow but also to overcome
challenges that will inevitably appear, helping the Company to create additional
value for its shareholders.”
Nish Patel, Lead Manager
Currency strengthening against Sterling
Currency weakening against Sterling
Apr
24
Aug
24
Dec
24
Apr
25
95
100
105
90
110
Japanese Yen EuroUS Dollar
Currency movements relative to sterling in the year ended 30 April 2025
Source: Columbia Threadneedle Investments
Report and Financial Statements 2025 | 15
Strategic Report
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Chairman’s StatementOverview Auditor’s Report
in which market performance was concentrated in larger
companies. The smaller companies market trended upwards
for the first seven months of the financial year, helped by
better than expected earnings and optimism that the newly
elected governments of several countries would address
longstanding concerns of voters. However, the last five months
of the financial year were challenged by stubborn inflation
and what appeared to be a deceleration in economic growth.
This was exacerbated in January by the launch of DeepSeek,
a lower cost large language model developed in China that
provides genuine competition to US competitors in the area
of artificial intelligence. Tensions over tariffs started to build
from the middle of February and culminated in Donald Trump’s
announcements on ‘Liberation Day’ which sparked a period of
heightened market volatility. Towards the end of the financial
year, markets somewhat regained their footing as the US
administration backtracked on some of its rhetoric on trade.
Growth stocks once again outperformed value stocks.
Financials, telecommunications and utilities emerged as the
strongest sectors, while energy, basic materials, and healthcare
lagged. Smaller companies delivered solid earnings growth in
the year, especially in Japan and the Rest of World. However,
this was offset by a contraction in smaller company equity
market valuations.
The North American smaller companies market led the way
for most of the financial year. Market strength was supported
by good economic data and lower inflation. The Republican
Party’s victory in the presidential election offered the promise of
corporate tax cuts and deregulation, raising optimism amongst
investors. However, from the middle of February we started to
see a very clear rotation away from North America into other
markets. Ultimately, this meant the region underperformed over
the financial year.
Table of total returns (sterling)
1 year 3 years 5 years 10 years 15 years
Regional
Portfolio
Regional
Benchmark
Regional
Portfolio
Regional
Benchmark
Regional
Portfolio
Regional
Benchmark
Regional
Portfolio
Regional
Benchmark
Regional
Portfolio
Regional
Benchmark
UK -13.4% 4.0% -14.6% 8.1% 22.1% 56.1% 56.4% 60.2% 294.5% 217.6%
Europe -1.8% 6.0% 0.5% 10.7% 32.9% 58.4% 71.9% 121.9% 274.6% 233.2%
North America -4.8% -4.0% 0.6% 4.8% 58.6% 53.1% 142.1% 115.0% 345.8% 290.3%
Japan 11.0% 6.6% 33.4% 24.7% 42.8% 33.1% 91.8% 104.8% 248.7% 206.5%
Rest of World -3.1% -7.2% 5.1% 0.5% 48.4% 65.0% 60.2% 72.8% 147.2% 119.2%
The regional benchmarks used are Deutsche Numis UK Smaller Companies (excluding investment companies) Index (UK), MSCI Europe Ex UK Small Cap Index net
(Europe), MSCI North American Small Cap Index net (North America), MSCI Japan Small Cap Index net (Japan) and MSCI All Country Asia Pacific ex Japan Small Cap
Index net (Rest of World).
Source Columbia Threadneedle Investments
UK smaller companies showed signs of recovery after two
lacklustre years, rising by 4.0% in the period. This was despite
a challenging domestic economic environment, an ongoing
political transition and a potentially slower pace of monetary
policy easing compared to other major economies. The
new Labour Government's Budget in October created some
uncertainty and concerns over an increase in Capital Gains Tax,
led to pre-emptive selling of shares by UK investors. Outflows
from actively managed UK equity funds continued in the period.
Another noticeable trend in the UK stock market was weakness
in the Alternative Investment Market (AIM) with these shares
as measured by the FTSE AIM All Share Index falling in the year
by 6.8% in total return terms, mostly because of fears over the
removal of an inheritance tax exemption on these investments.
Europe staged a recovery in the financial year with its smaller
companies market rising by 6.0% with particularly strong
returns from Spanish and Italian companies as well as the
banking sector as a whole. Europe also benefitted from inflows,
as investors sought value opportunities away from expensive
US stocks.
Japanese smaller companies continued their revival and
outperformed smaller companies in other major markets in
the year. Solid earnings growth, a lower yen and a strong
showing from the communication services sector supported
the market. Changes in corporate governance continued at
smaller Japanese businesses, in many cases spurred by rising
activism. Encouragingly, the market bounced back quickly after
an unexpected interest rate hike in August triggered the largest
single-day decline since the 1987 Black Monday crash.
The Rest of World showed significant regional divergence.
Strength in China, Taiwan and Malaysia was partially offset by
weakness in India and Indonesia. Eastern Europe performed
well whilst Latin America had a more difficult year.
16 | The Global Smaller Companies Trust PLC
Despite the start of an interest rate cutting cycle, government
bond markets traded in a range and 10 year yields remained at
elevated levels relative to those seen over the last 15 years.
Credit spreads were quite narrow for most of the year but then
widened in April as uncertainty increased. On a trade weighted
basis, the US Dollar weakened over the year and other major
currencies strengthened.
Commodity markets showed mixed performance. Oil and
industrial metals declined. In contrast, it was a standout year
for gold: purchases by central banks and the safe haven status
of the yellow metal led it to appreciate by 41%.
Regional Portfolio Performance
The UK and European portfolios had a disappointing year with
returns weighed down by stock specific challenges in both
regions. For the UK there was a significant headwind from the
selling of shares by investors ahead of an increase in Capital
Gains Tax and the removal of an inheritance tax exemption on
AIM listed stocks. Frustratingly, the North American portfolio
failed to keep up with a rampant US market in October and
November as investors eagerly looked forward to a Republican
victory in the US Election. Relative performance in North
America improved in the final months of the year on the
realisation that some of the promises made during the election
campaign would be difficult to execute. Positively, our Japanese
and Rest of World portfolios had a good year helped by strong
stock selection and specifically in the case of the latter, a
narrowing in discounts in our investment trust holdings.
Summary of Performance from the Company’s
Investments
Amidst much geopolitical uncertainty gold and insurance were
two areas that were seen as safe havens and we benefitted
from our holdings in Wheaton Precious Metals (the largest
single stock holding of the Company, up 51%) and Brown &
Brown respectively. The outlook for defence related companies
changed after Russia’s invasion of Ukraine in 2022. With
Europe now looking to be self-reliant from a security standpoint
there was further improvement in the backdrop for these
companies. We have significant exposure to defence and
our investments in Curtiss-Wright, QinetiQ and Renk all
performed well in the financial year. It was very pleasing to
see our cohort of ‘compounders’ of earnings deliver another
year of progression. These are businesses that have very
strong competitive advantages and a long runway of growth
opportunities. We have high conviction that these businesses
can grow reliably over the long term and some of them have
been held by the Company for as long as 18 years. Within
this group, Encompass Health, Genpact, Auction Technology
Group and CTS Eventim all successfully executed on their
growth strategies and consequently delivered strong share
price appreciation. Seven of our companies received takeover
bids in the year. These were US waste management specialist
Stericycle and six businesses within the UK portfolio: media
company Ascential, warehouse owner Warehouse REIT, hotel
operator Dalata Hotel Group, restaurant chain Loungers,
building products company Tyman and payments network
Equals Group. The Japanese portfolio has significant exposure
to companies that are undertaking changes in corporate
governance and capital allocation. This has been a fruitful area
for us and in the period Sanwa Holdings, Tomy and Nippon
Television Holdings all benefitted from a re-rating.
During the financial year, there were also some company
specific challenges within the portfolio, the most notable ones
being WEX, YouGov and Next 15. These companies have
been fully reviewed and we have held our positions in WEX and
YouGov and sold Next 15. The price of oil dropped by 28% in
the period, hurting the energy sector and related businesses.
Our holdings were not immune and Kirby, Kosmos Energy
and Ashtead Technology were particularly hit by this. In the
year, markets continued to recognise the fast-growing area of
artificial intelligence, concentrating investment in this area at
the expense of other opportunities in the wider semiconductor
sector, creating downward pressure on the share prices of
semi-conductor companies not strongly associated with
artificial intelligence. This and specific trading issues such as
inventory reduction negatively impacted CDW and MaxLinear.
The automotive sector had a difficult year because of lower
demand and increased competition from China. This cyclical
weakness dragged down Stabilus and Niterra. Earnings from
our companies showed a deterioration in demand from Chinese
customers. This especially hindered life sciences equipment
manufacturer Tecan and pump producer Ebara. Trade
restrictions created additional pressure on businesses selling
to China and this affected ASM International. Companies in
the consumer staples sector such as Glanbia and Morinaga
were impacted by higher input costs. In these cases it was
whey and cocoa respectively. Over the course of the financial
year, 21% of the assets of the UK portfolio were invested in AIM
listed companies. The aforementioned selling pressure weighed
on these UK holdings, dragging down returns.
On the pages that follow there are tables outlining for each
region the largest contributors and detractors to performance
over the year and reasons for those movements.
Report and Financial Statements 2025 | 17
Strategic Report
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Chairman’s StatementOverview Auditor’s Report
North American Portfolio
Largest contributors to performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
Wheaton Precious Metals
Owner of precious metal royalty
streams.
51.7% 2.0%
Higher gold price. Long term production
guidance exceeded expectations. Announced
a royalty agreement for Montage Gold's Kone
project in Cote D'Ivoire.
Brown & Brown
Insurance broker that focuses on
small and medium sized businesses.
27.9% 1.1%
Rising insurance rates, new business wins
and stable retention led to strong organic
revenue growth in the year. Announced several
acquisitions.
Encompass Health
Provider of inpatient rehabilitative
healthcare services.
32.5% 1.0%
Strong patient volume growth. More
favourable payor mix and lower labour costs
drove margin expansion. Opening of new
locations.
Curtiss-Wright
Producer of mission-critical
components for the aerospace,
defence, general industrial and power
sectors.
27.9% 0.9%
Higher spending in the company's defence
and nuclear end markets led to healthy
revenue and earnings growth.
Genpact
A business process outsourcer that
focuses on the verticals of financial
services, consumer, healthcare,
technology and manufacturing.
55.7% 0.9%
Increased adoption of the company's
generative artificial intelligence offering.
Improved management execution resulted in
a solid contract win rate.
Largest detractors from performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
Kosmos Energy
Oil and gas exploration and
production.
-74.5% -1.2%
Lower oil price. Operational challenges in the
Jubilee Field and a delay in the start up of the
company's Tortue project created a shortfall in
production.
WEX
Payment processing services in
the areas of mobility, benefits and
corporate payments.
-42.2% -1.0%
Lower fuel price and volumes affected
profitability in the mobility business.
Corporate payments segment hindered by the
transition of a travel related customer to a
new contract.
CDW Value added reseller of technology. -37.0% -0.8%
Slowdown in spending by customers on large
projects. Increased price competition.
MaxLinear
Producer of semiconductors for
broadband communications.
-55.0% -0.7%
Weakness in spending on broadband
equipment. Industry wide inventory correction.
Kirby
Operator of tank barges that
transport refined petroleum products
and chemicals.
-17.2% -0.6%
Lower activity from petrochemical related
customers.
(1) This is the share price total return in GBP over the period that the shares were held
(2) This is the geometric total effect of holding the stock within the regional portfolio.
Source: FactSet
18 | The Global Smaller Companies Trust PLC
UK Portfolio
Largest contributors to performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
Auction Technology
Supplier of proprietary auction
platform technology for online
marketplaces.
16.8% 0.4%
Previous investments by the business to grow
revenues started to produce results. Optimism
grew over the introduction of the company's
value added services offering.
QinetiQ
Provider of services, research and
products to the defence sector.
35.2% 0.4%
Improved outlook for spending in the defence
sector. Change in capital allocation away from
acquisitions and towards share repurchases.
Loungers Operator of a chain of restaurants. 31.6% 0.3% Takeover bid from Fortress Investment Group.
Baltic Classifieds
Online classifieds platform that
serves customers in the Baltic states.
38.5% 0.3%
Concerns over the impact on the business
of the war in Ukraine abated. A healthy
market backdrop and increased customer
engagement led to strong profit growth.
Paragon Banking Group
Specialist lender that focuses on buy
to let mortgages and commercial
loans.
24.2% 0.3%
Despite a challenging environment the
company delivered good loan and profit
growth and reported low credit costs.
Optimism grew that loan volumes might soon
recover.
Largest detractors from performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
Next 15
Data-driven consultancy business
that helps its clients to develop their
brands.
-51.0% -1.3%
Weaker than expected earnings because of
softness in the company's technology and
government divisions. Contract loss from a
large client.
Ashtead Technology
Holdings
Rental and sale of equipment that is
used in oilfields.
-32.3% -1.1%
Lower oil price and uncertainty over the new
UK government’s position towards drilling in
the North Sea offset solid earnings from the
company.
YouGov
A provider of market and opinion
research, stakeholder consultation
and indices.
-66.5% -0.9%
Competition intensified in the Data Products
business. This brought prices down. Costs
for 3rd party data climbed in the Custom
Research division.
Kitwave
Distributor of confectionary, food
and drink to mostly independent
convenience stores and restaurants.
-20.1% -0.7%
AIM stock that faced selling pressure. Some
concerns over adverse weather and the cost
of the company’s growth investments.
Essentra
Supplier of specialty plastic and
fibre components to a wide range of
industries.
-47.9% -0.7%
Lower demand in Europe dampened sales
volumes and led to a profit warning.
(1) This is the share price total return in GBP over the period that the shares were held
(2) This is the geometric total effect of holding the stock within the regional portfolio.
Source: FactSet
Report and Financial Statements 2025 | 19
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Europe Portfolio
Largest contributors to performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
RENK
Producer of drive systems for military
vehicles.
85.4% 2.0%
Increased investor interest in European
defence companies following the commitment
by European countries to raise their spending
on defence.
Karnov
Provider of information systems and
software in the areas of legal, tax
accounting and EHS (environment,
health and safety).
77.0% 1.3%
Organic revenue growth accelerated and
margins widened. Successful integration of
recent acquisitions. Takeover interest from
private equity.
CTS Eventim
Distributor of tickets for live
entertainment. Organiser of tours and
events.
26.6% 0.9%
Earnings lifted by the Paris Olympics and
Paralympics. Won contracts for newly
announced music tours and corporate events.
Avanza Bank Online securities trading platform. 49.7% 0.7%
Reported strong net inflows from customers.
Higher trading activity and interest income
boosted earnings.
Nordnet
Digital platform for savings and
investments.
40.3% 0.6%
Increased client activity, shift towards higher
margin transactions on international markets.
Largest detractors from performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
ASM International
Manufacturer of machines that
process silicon wafers and
that assemble and package
semiconductors.
-28.5% -1.1%
Concerns mounted over a potential slowdown
in sales growth from China because of export
controls. Industry valuations compressed after
DeepSeek emerged.
Stabilus
Producer of gas springs and motion
control devices for automotive and
industrial markets.
-50.4% -1.0%
Automotive and industrial end markets
weakened, prompting a profit warning.
Concerns over the impact of tariffs on future
profitability.
Tecan
Developer of life sciences related
laboratory automation systems and
components.
-51.7% -1.0%
The company's Chinese business deteriorated.
Customer orders were deferred. The expected
recovery in the wider life sciences market did
not materialise.
Glanbia
Producer of dairy and performance
nutrition products.
-34.2% -0.9%
Higher whey prices and increased competition
dampened the outlook for profits for this year.
Davide Campari-Milano Owner of alcoholic spirit brands. -44.8% -0.8%
Revenue growth slowed down as industry wide
consumption trends waned.
(1) This is the share price total return in GBP over the period that the shares were held
(2) This is the geometric total effect of holding the stock within the regional portfolio.
Source: FactSet
20 | The Global Smaller Companies Trust PLC
Japan Portfolio
Largest contributors to performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
SWCC
Manufacturer and distributor of wires
and cables to telecommunications,
electronics and utility companies.
63.6% 2.2%
Strong earnings progression as a result
of wider investment in domestic power
infrastructure and sales growth from newly
introduced products.
Sanwa Holdings
Global producer of shutters and
doors for residential and commercial
buildings.
91.2% 2.2%
Higher volumes and selling prices in the
company's North American business.
Additional value creation from cost cutting
and share repurchases.
Tomy
Designer and producer of toys and
games for children.
26.3% 2.1%
New releases led to healthy earnings
growth. Increased focus by management on
shareholder returns.
Nippon Television
Holdings
Commercial television broadcaster. 50.1% 1.9%
Announcement of new strategy to simplify the
business and divest non core holdings.
PAL Group
Manufacturer and retailer of casual
apparel.
120.6% 1.4%
E-commerce sales growth accelerated,
helping the company to expand its profit
margins.
Largest detractors from performance
Company Business activity Share price
movement
(1)
Contribution to
performance
of regional
portfolio
(2)
Reasons for movement
Sojitz
Conglomerate with businesses
in several industries: automotive,
aerospace, infrastructure, healthcare,
consumer, retail, metals and
minerals.
-15.7% -1.1%
As production volumes in the metals and
minerals business declined, doubts grew over
whether the company could meet its earnings
targets.
Niterra Automotive components producer. -7.6% -0.7%
Challenged by low automotive production in
Europe and an adverse inventory adjustment.
Ebara
Manufacturer of pneumatic and
hydraulic pumps and related
equipment.
-28.0% -0.7%
Lower orders and weakened demand from
China prompted a cut to earnings forecasts.
Qol Holdings
Operator of a chain of pharmacy
stores.
-17.9% -0.6%
Higher purchasing and personnel costs
hindered profitability at the company.
Morinaga
Producer of confectionery, soft drinks
and ice cream.
-9.4% -0.5%
A higher cocoa price led to earnings that were
below expectations.
For part of the year the Company held a position in The Eastspring Investments Japan Smaller Companies Fund. This was fully divested in December 2024
and the proceeds from this sale were reinvested in the internally managed Japanese portfolio. Whilst held in the financial year, The Eastspring Investments
Japan Smaller Companies Fund delivered a return in GBP of 1.4%, making a positive relative contribution to the Company's overall Japanese portfolio.
(1) This is the share price total return in GBP over the period that the shares were held
(2) This is the geometric total effect of holding the stock within the regional portfolio.
Source: FactSet
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Rest of World Portfolio
Overview of performance from third party funds held
Fund Stated Fund Objective Return in the
period
(1)
Contribution to
performance
of regional
portfolio
(2)
Drivers of return
The Scottish Oriental
Smaller Companies Trust
To achieve long-term capital growth
by investing mainly in smaller Asian
quoted companies.
9.0% 5.1%
Strong performance from Chinese holdings
including DPC Dash (China's Domino's Pizza
franchise), Uni-President China (a producer
of instant noodles) and NetEase Cloud
Music (an online music platform). Very good
stock selection in China and India. Positive
attribution from consumer discretionary
and consumer staples sectors. Narrowing in
discount to NAV. Shares were repurchased at
a discount to NAV.
Utilico Emerging Markets
Trust
To provide a long-term total return
through a flexible investment policy
that permits the company to make
investments predominantly in
infrastructure, utility and related
sectors, primarily in emerging
markets.
0.5% 1.7%
NAV movement behind benchmark. This was
offset by narrowing in discount to NAV. Good
performance from port operators and data
centre businesses. Takeovers also helped.
Performance affected by write down of
Petalite (an unlisted investment in an electric
vehicle related business) and depreciation
of Latin American currencies against Sterling.
Shares were bought back by this investment
trust in the year.
Schroder ISF Emerging
Markets Smaller
Companies Fund
To provide capital growth in excess
of the MSCI Emerging Markets Small
Cap (Net TR) Index after fees have
been deducted over a three to five
year period by investing in equities
of small-sized companies in global
emerging market countries.
-5.8% 0.8%
Good stock picking in India and Taiwan,
particularly in the consumer discretionary
and technology sectors. Partially offset by
negative attribution from stock picks in Korea
and Poland.
PineBridge Asia ex Japan
Small Cap Equity Fund
To seek long-term capital
appreciation by investing in smaller
to medium-sized companies in the
Asian Region.
-14.3% -1.7%
Adverse stock selection in technology
sector in Taiwan due to not having enough
exposure to AI companies. Underperformance
from investment in Alchip Technologies (a
semiconductor design and manufacturing
business). Broader based underperformance
in China. Partially offset by good stock picking
in Australia and overweight positioning in
China.
Overview of Investment Activity
The Company has been building up its exposure to the
infrastructure sector for some time. In many developed
countries infrastructure is aged and in need of replacement.
Consequently, governments are increasing their spending in this
area. We augmented our position in this sector by adding Hill
and Smith and Galliford Try in the UK and SPIE and Bilfinger
in Europe. Similarly, defence companies have a good outlook
because of high threat levels and the ongoing rearmament
of Europe. In the year we added CACI, RENK and IHI to our
defence holdings. Interest rates came down in the financial
year and may fall further. Property transactions should pick
up as interest rates decline and this should help recently
purchased real estate services companies Jones Lang LaSalle
and Savills. House construction and remodelling would also
benefit from lower interest rates and we added to our holdings
in this sector through the purchase of home builders Cairn
Homes and Open House and building products specialists
(1) This is the fund total return in GBP over the period that the fund was held
(2) This is the geometric total effect of holding the fund within the regional portfolio.
Source: FactSet
22 | The Global Smaller Companies Trust PLC
Wienerberger and Nichias. After a long inventory correction,
another cyclical industry that we think is early in its recovery is
semiconductors and electronic components; in North America
we purchased Advanced Energy Industries and increased our
holding in MaxLinear. One of the Republican Party’s priorities
is deregulation. The outlook for returns and M&A activity in the
banking sector improved following the US election and so we
added to our holdings in United Bankshares and Prosperity
Bancshares. We are always looking to enlarge our stable of
‘compounders’ and in the last 12 months we invested in five
businesses that we think will reliably grow their intrinsic values
in the coming years: CCC Intelligent Solutions (a US vertical
software business), SharkNinja (a US producer of household
appliances), Moonpig Group (the UK’s leading online greeting
card and gifting platform), DO & Co (a global catering business
headquartered in Austria) and Gaztransport Et Technigaz
(a French business that produces containment systems for
liquefied natural gas).
Our process for selling investments is outlined in the
investment philosophy and process section of the annual
report on page 3. In keeping with that process we did reduce
or fully divest a number of holdings in the year. In the US we
thought that the investment thesis was no longer intact for
fuel distributor World Kinect and crop protection specialist
American Vanguard. Similarly, in Europe, the investment case
was no longer valid for brewer Royal Unibrew, alcoholic spirits
producer Remy Cointreau and oilfield services company TGS.
In Japan flow control equipment producer Ebara and radiation
equipment specialist Rigaku Holdings were also jettisoned.
There were four companies that were sold because the quality
of their business models deteriorated to an extent that they
were no longer investable for the Company. These were: SSR
Mining, Dine Brands Global, Watches of Switzerland and
Schoeller-Bleckmann Oilfield Equipment. There were also many
instances of profit taking or complete sales once a company’s
share price reached our estimate of intrinsic value. These
included: Cognyte Software, Kirby, Eagle Materials, Wheaton
Precious Metals, Accelleron Industries, Tomy, Hosiden and
SWCC. In a similar vein, the aforementioned takeover bids were
also monetised. For three companies we took the opportunity
to switch into a better quality or a more attractively valued
alternative. In the telecommunications industry we switched
from Viavi Solutions to Amdocs. In defence we swapped
QinetiQ for Chemring and in UK banks OSB Group was sold to
fund the purchase of Paragon Banking Group.
Asset Allocation Changes
Asset allocation for the Company is largely the end result of
our bottom-up stock selection and reflects where we are finding
attractive investment opportunities. The Company’s absolute
and relative weightings in North America, Japan and the Rest
of World rose in the financial year, whilst its exposures to the
UK and Europe fell. As of the end of the financial year we were
overweight to Japan and Europe and underweight to North
America, the UK and the Rest of World. Corporate reform is
leading to an improvement in the quality of many businesses
in Japan, whilst European growth may finally be picking up. We
think this is still not fully reflected in company valuations in
these geographies. In contrast, trade tensions may dampen
the outlook for earnings from companies in North America
and parts of the Rest of World. Our largest sector allocation
is to industrials which is the home of not only manufacturers
but also commercial services businesses and transportation
companies. In the year purchases of new holdings in defence
and infrastructure related businesses increased our weighting
North America 43.5% (40.8%)
UK 19.6% (24.7%)
Rest of World 14.9% (13.5%)
Japan 11.9% (9.5%)
Europe 10.1% (11.5%)
Geographical distribution of the investment portfolio
as at 30 April 2025
Source: Columbia Threadneedle Investments
The percentages in brackets are as at 30 April 2024
Industrials 29.7% (25.3%)
Collective investments 15.0% (18.5%)
Consumer discretionary 13.2% (11.7%)
Financials 11.1% (10.5%)
Technology 9.0% (9.3%)
Real estate 6.8% (4.7%)
Healthcare 5.4% (6.5%)
Consumer staples 3.8% (4.1%)
Basic materials 3.7% (4.4%)
Energy 2.1% (3.8%)
Utilities 0.2% (0.4%)
Telecommunications 0.0% (0.8%)
Source: Columbia Threadneedle Investments
The percentages in brackets are as at 30 April 2024
Industrial classification of the investment portfolio
as at 30 April 2025
Report and Financial Statements 2025 | 23
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Strategic Report
in this sector. The addition of home builders and property
services companies increased our exposure to the consumer
discretionary and real estate sectors respectively. With the sale
of the Eastspring Investments Japan Smaller Companies fund,
collective investments as a group fell to 15.0% of the portfolio
from 18.5%. The fall in the oil price led to a decline in the
Company’s weighting in the energy sector. Profits were taken in
basic materials.
Outlook
Looking ahead, financial markets face a complex set of
opportunities and challenges. It seems likely that market
volatility will be higher than in recent years, potentially
exacerbated by the increasingly short-term nature of most
market participants. This could provide a better investing
environment for long term, active managers such as ourselves.
For over a decade the US has been a popular destination
for global capital and this has helped to lift equity market
valuations there. With lower confidence in ‘US exceptionalism’,
it would be only natural to see those historic flows of capital
reverse given the more attractive valuations and improving
relative growth prospects in other parts of the World.
Given the likelihood of higher inflation in the US because of
tariffs, the Federal Reserve may be somewhat limited in what it
can do to support economic growth. Other central banks across
the World may have more leeway to cut interest rates, providing
support to their economies and equity markets.
We are optimistic that this broadening of investment across
equity markets will also include smaller companies, which have
been shunned in recent years. With lower relative valuations
and greater sensitivity to economic growth and falling interest
rates, the outlook for smaller companies seems brighter,
especially for those outside of the US.
Over the years our aim has been to offer you the faster growth
potential that is inherent in smaller companies, but with lower
levels of risk. We have reduced risk by focussing on higher
quality companies that can withstand the typical challenges
that smaller companies face. We have also invested in these
businesses when they have been available at a discount to
what we think they are intrinsically worth, in order to limit
our downside if we are wrong in our analysis. In a somewhat
uncertain environment we are convinced that this selectivity
and focus on risk and capital preservation will be as important
as ever.
We have confidence that over the coming years our diversified
portfolio of higher quality businesses is well positioned to not
only grow but also overcome challenges that will inevitably
appear, helping the Company to create additional value for its
shareholders.
Nish Patel
Lead Manager
30 June 2025
24 | The Global Smaller Companies Trust PLC
Responsible Investment
The Company is not an investment trust with ESG or sustainable
characteristics. However, as part of its overall risk management
process, the Manager integrates the consideration of financially
material environmental, social, and governance (‘ESG’) factors into
its research and investment process and encourages stronger ESG
practices to be adopted by issuers through its engagement and
voting activities. We believe investing responsibly is fundamental
to long-term wealth creation.
Our Approach
We believe that good financial outcomes are more likely to
be achieved if the Manager fully understands the risks and
opportunities that relate to the markets in which the Company
invests.
The Manager believes the consideration of financially material ESG
factors can provide an important perspective to its investment
research. Companies demonstrating a resilient business model,
organisational stability, and the ability to evolve are best placed
to deliver long-term value, support economic growth, and serve
broader prosperity. Financially material ESG factors are therefore
integrated into the Manager’s investment process.
There are two strands to the Board’s approach to responsible
investment:
• The Company’s own responsibilities on matters such as
governance; and
• ESG integration, engagement and proxy voting made on its
behalf by its Manager.
The Company’s compliance with the AIC Code of Corporate
Governance is detailed in the Corporate Governance Statement
on pages 55 to 56. In addition, the Principal Policies statement
on pages 43 to 45 notes the Company’s policies towards board
diversity and inclusion, integrity and business ethics, and the
Modern Slavery Act 2015.
Active Ownership
The Manager engages with the management of investee
companies on ESG factors that could have a material impact on
their businesses and, where necessary, encourages improvement
in management practices that it believes could help drive financial
returns for clients.
The Manager’s active ownership activities are supported by
policies on corporate governance, proxy voting, engagement
and investment strategy-specific policies, as well as respective
addendums on how to manage potential conflicts of interest.
These documents support and inform the Manager’s engagement
and voting activities on behalf of its clients and are available on its
website.
The Manager’s Corporate Governance Guidelines set out its
expectations of the management of investee companies in terms
of good corporate governance. This includes the affirmation of
responsibility for reviewing internal ethics policies and maintaining
a code of conduct reflecting corporate values and promotion of
ethical business practices. Codes of conduct should address
business-critical compliance issues including anti-corruption
practices. The Manager is a founding signatory to the United
Nations Principles for Responsible Investment (‘UNPRI’) under
which signatories contribute to the development of a more
sustainable global financial system. As a signatory the Manager
aims to incorporate the consideration of financially material ESG
factors into its investment processes.
ESG and the Investment Process
The Manager has tools which use data from many sources to
enhance and inform the integration of ESG considerations into
investment research, portfolio construction and risk monitoring.
Key tools include:
• ESG materiality ratings;
• Sustainable Development Goals (‘SDG’) mapping tool;
• Net Zero Framework;
• Good governance model;
• Exclusions framework; and
• Controversy rating.
Responsible Investment
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These tools mark a starting point for the Manager’s ESG
assessment. The Fund Manager works with the sustainable
research analysts to ensure that those performing the work on
individual investment opportunities for the Company are well
informed in what to look for in relation to the ESG aspects of their
analysis. Specialism within the global sustainable research team
allows the fund managers to liaise with those who understand the
key ESG issues relating to a particular sector.
During the year ended 30 April 2025, the Manager's Responsible Investment (‘RI’) team engaged with the management of 19
companies in the Company's portfolio, across 7 countries. The most common topics for discussion were corporate governance and
climate change.
Engagement
Corporate Governance 43.0%
Climate Change 35.7%
Environmental Stewardship 7.1%
Human Rights 7.1%
Labour Standards 7.1%
Engagement examples in the year:
Engagement
Genuit Group
Issue: Climate Change
SDG target: 13.2 Integrate climate change plans into policies and strategies
Genuit Group is a UK supplier and manufacturer of water, climate, and ventilation products for the built environment. The company has a focus on sustainability
across its climate, water and building solutions units. The Manager's RI team met with the company CEO and CFO to discuss Genuit's decarbonisation strategy
and market opportunities.
The UK’s Future Homes Standard (‘FHS’) is a government policy aiming to improve energy efficiency and carbon reduction practices in construction, with
expected implementation from 2025. The company sees these standards and climate impacts as secular growth drivers, particularly in water management
solutions, driven by the Asset Management Period 8 (‘AMP8’) investment framework. The framework will see billions allocated to water infrastructure, with
significant funds earmarked for reducing harm from storm overflows in the UK.
In anticipation of increasing carbon costs, Genuit have already reduced raw material emissions through, for example, procurement, and believe they are ahead
of peers in this area. The company’s environmental product declarations demonstrate a commitment to transparency and also allow clients to evidence lower
carbon attributes.
The company view themselves as structurally exposed to both climate adaptation and decarbonisation trends. We agree with this assessment, forming part of our
investment case.
Strategic Report
26 | The Global Smaller Companies Trust PLC
Gunma Bank
Issue: Corporate Governance
SDG target: 10.2 Empower and promote inclusivity for all
Gunma Bank is a Japan-based regional bank, providing traditional banking and leasing services. The Manager's RI team met with their investor relations team to
gain a better understanding of their current governance structures and capital allocation strategy.
The company detailed both its current capital management strategy and areas of future focus. The Manager's RI team was pleased to see plans to continue to
reduce cross-shareholdings by 2027 and, overall, was impressed with how it manages its capital efficiently.
On governance, the Manager's RI team noted board gender diversity opportunities. The company highlighted it has been difficult to recruit women and
understands both investors and the Tokyo Stock Exchange would like to see increased board gender diversity, and this continues to be an area of focus for them.
The company has done excellent work increasing participation by women in the workforce, including establishing an employee relations group for women and
increasing the number of women in management year over year for several years.
Finally, on executive compensation, the Manager's RI team was pleased at the level of detail the company provided on the evaluation process, which included
multiple meetings of the voluntary compensation committee, peer benchmarking, and inclusion of SDG indicators. The Manager's RI team found the engagement
helpful and the company's disclosures and practices to be market leading.
Healthcare Realty Trust
Issue: Climate Change, Labour Standards
SDG target: 13.2 Integrate climate change plans into policies and strategies
Healthcare Realty Trust is a US real estate investment trust (‘REIT’) that owns and operates medical outpatient buildings primarily located around hospital
campuses. The Manager's RI team met with the company’s VP of Investor Relations and their Director of Corporate Responsibility to discuss Healthcare Realty's
ESG programme.
The Manager's RI team reviewed Healthcare Realty’s materiality assessment, conducted during 2023. The biggest surprise to the company was the lower
importance that external stakeholders placed on green certifications given its importance to the company’s line of credit. The number one priority for most
tenants is energy efficiency given this enables cost savings.
Healthcare Realty’s climate strategy is focused on scope 1&2 emissions and lags some peers. A new target was set for the group aiming for a 30% reduction by
2032. The Manager's RI team encouraged improvement of disclosures around the target roadmap with quantification of identified decarbonisation levers using
bottom-up modelling.
The Manager's RI team also raised the integration of culture following Healthcare Realty’s 2022 merger with Healthcare Trust of America. This has been a focus
area for company management with executive level involvement. The staff turnover rate, however, had been dropped as a metric as the company are having
internal conversations around whether this is the right measure. The Manager's RI team encouraged the company to report this number as it is something
investors track. The Manager's RI team also encouraged sharing the outcomes of the employee engagement survey which is being conducting for the first time.
As noted previously, the Manager’s Corporate Governance
Guidelines set out expectations of the boards of investee
companies in terms of good corporate governance. The Board
expects to be informed by the Manager of any sensitive voting
issues involving the Company’s investments and receives an
annual record of votes against, or abstentions on, management
resolutions at investee annual meetings. In the absence of
explicit instructions from the Board, the Manager is empowered to
exercise discretion in the use of the Company’s voting rights and
votes on all investee company resolutions.
The Manager is a signatory to the UK Stewardship Code. Its
statement of compliance can be found on the Manager’s website
at www.columbiathreadneedle.com.
We expect the Company’s shares to be voted on all holdings where
possible. During the year, the Manager voted at 211 meetings of
investee companies held in the Company's portfolio.
The Manager did not support management's recommendations on
at least one resolution at approximately 33% of all meetings. With
respect to all items voted, the Manager supported over 95% of all
management resolutions.
One of the most contentious voting issues remained
compensation. Either by voting against or abstaining, the
Manager did not support approximately 9% of all management
resolutions relating to pay, often due to either poor disclosure or a
misalignment of pay with long-term performance.
Voting on portfolio investments
Report and Financial Statements 2025 | 27
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Chairman’s StatementOverview Auditor’s Report
Climate change
The Manager recognises the importance of managing financially
material climate-related risks and opportunities effectively in its
investment and stewardship processes. The energy transition,
driven by government policies and technological advancements,
creates both opportunities and risks for investee companies.
Sustainability Research analysts work with the wider fundamental
research team to embed these opportunities and risks into the
Manager’s investment process. As potential real-world impacts of
climate change become more apparent, attention is being directed
to the physical risks and the need to appraise the resilience of
issuers to these risks.
In June 2024, the Manager published its updated Climate Report.
The report, which is available on the Manager’s website, details
how the Manager manages climate-related risks and opportunities,
in line with the recommendations of the Taskforce on Climate-
related Financial Disclosures (‘TCFD’).
In accordance with the regulations set by the Financial Conduct
Authority, the Manager has published disclosure specific to
the Company’s portfolio. This provides data on the portfolio’s
carbon footprint and the largest individual contributors to the
carbon footprint by individual issuer and sector, in addition to
its weighted average carbon intensity (‘WACI’). This is available
on the Document Library page of the Company’s website at
globalsmallercompanies.co.uk
For the sixth year, we are disclosing, as best we can, the portfolio
weighted carbon intensity
(1)
of the Company's investments, in
line with the recommendations of the TCFD. This is based on the
greenhouse gas emissions produced by each investee company,
per US$1m of revenue, and aggregated for the Company as
a whole. We aim to use the information for analysis and for
benchmark comparisons, but do not set targets based on it. There
are constraints on the analysis of the carbon intensity of the total
portfolio as data sources can be limited, especially for smaller
companies.
Coverage continues to improve, and this year data was available
for 97% of the combined UK, European and North American
portfolios by weight. The WACI for these combined portfolios
was 145.85 against the combined relevant benchmarks' carbon
intensity of 120.69. This represents a 9.7% reduction in WACI
for the combined portfolio over the last 12 months. The higher
WACI for the combined portfolio relative to the benchmark
was principally due to significant allocations to materials firms
Martin Marietta Materials and Eagle Materials in the North
American portfolio, and Buzzi in the European portfolio. These are
currently high emitters but reflect a long-term focus on transition
opportunities within the materials and building supplies industry.
Over the year, exposure to materials has however come down.
To remain consistent with previous disclosure we continue to
report on carbon intensity at a regional level. For UK, European
and North American regions at the end of April 2025, the carbon
intensity of the holdings was 48% less, 70% more and 31% more
respectively against the relevant benchmark. (This compares to
27% less, 48% less and 80% more respectively as at 30 April
2024).
The variation across regions is influenced by the nature of the
holdings and sector positioning. The pattern of these intensity
results has shifted relative to those calculated last year. The
Company's UK and North American portfolios have reduced their
emissions intensity in comparison to the local small cap indices.
However, the European portfolio's carbon intensity score has
moved from below its benchmark to significantly higher than the
benchmark over the last 12 months, mainly due to the addition of
Italian cement manufacturer Buzzi SpA to the portfolio.
While operating in a high emissions sector, Buzzi is targeting net
zero by 2050 and has recently reconfirmed a B score from CDP.
This climate score (within a range of A-D) is based on disclosure
completeness, awareness and management of environmental
issues, and progress on environmental stewardship. A focus on
transition opportunities within the materials and building supplies
industry is also reflected in our engagements with companies such
as Genuit Group, described above.
We are pleased to see again improved coverage of smaller
companies in this year's carbon intensity analysis. However,
we are mindful that the data does not provide a full picture of
climate risks as it does not capture the innovation that companies
may be undertaking to find solutions and to enhance their
future emissions. Due to the company specific complexities of
understanding individual company emissions profiles, engagement
is a key pillar of Columbia Threadneedle's approach.
(1) Carbon intensity – this is measured in tons of CO2 equivalent (i.e. including the basket of six Kyoto gases) of Scope 1 and 2 emissions, divided by $1million of sales at a
company level. This is aggregated to portfolio level using a weighted average (by holding).
28 | The Global Smaller Companies Trust PLC
Thirty Largest Holdings
30 April
2025
30 April
2024
% of total
investments
Value
£m
1 4
The Scottish Oriental Smaller Companies Trust Rest of World
Investment company providing exposure to Asian smaller companies.
4.5 34.8
2 3
Schroder ISF Global Emerging Markets Smaller Companies Fund Rest of World
Fund providing exposure to Emerging Markets smaller companies.
3.9 30.5
3 2
Pinebridge Asia ex Japan Small Cap Fund Rest of World
Fund providing exposure to Asian smaller companies.
3.7 28.6
4 5
Utilico Emerging Markets Trust Rest of World
Investment company focusing on utility and infrastructure companies in emerging markets.
2.8 21.9
5 10
Wheaton Precious Metals Canada
A precious metals streaming company.
2.1 16.5
6 12
Brown & Brown United States
Insurance broker, now the fifth largest global independent company in the market.
1.8 13.5
7 6
Eagle Materials United States
A US producer of construction materials, including cement, aggregates, concrete, gypsum wallboard and recycled
paperboard.
1.7 13.2
8 18
Encompass Health United States
Leading US provider of post acute care in facility and home based settings.
1.7 13.0
9 13
Curtiss-Wright United States
Producer of mission critical components, serving the aerospace, defence and power industries in particular.
1.6 12.6
10 7
Kirby United States
Operator of a fleet of inland barges in the US, also a provider of repair services to marine and other end markets.
1.6 12.3
11 8
The Ensign Group United States
Operator of skilled nursing facilities, rehabilitative care facilities, also provides home health and assisted living
services mainly for post-acute care.
1.5 11.9
12 9
Graphic Packaging United States
A vertically integrated producer of printed paperboard cartons for food and beverage products.
1.5 11.6
13 15
Martin Marietta Materials United States
Aggregates and cement producer that serves the construction industry.
1.4 11.2
14 17
WSP Global Canada
Canadian based but a leading global engineering consultancy business.
1.4 10.9
15 47
Genpact United States
IT services outsourcing business operating across a number of industries.
1.2 9.5
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30 April
2025
30 April
2024
% of total
investments
Value
£m
16 11
LKQ Corp United States
A distributor of alternative car parts.
1.2 8.9
17 23
Essential Properties Realty Trust United States
US based real estate company focused on service sector based tenants.
1.1 8.6
18 22
Amdocs United States
Outsourced IT services provider to telecommunications sector.
1.1 8.6
19 14
Boot Barn Holdings United States
US retailer of western and work wear.
1.0 7.9
20 43
United Bankshares United States
A West Virginia based bank that lends to small and medium sized businesses.
0.9 7.2
21 38
Prosperity Bancshares United States
USA based regional bank that focuses on commercial lending.
0.9 7.1
22 27
Bristow United States
Provider of helicopter services for global energy and air sea rescue markets.
0.9 7.0
23 16
Avnet United States
Distributor of computer products, semiconductors and electronic components.
0.9 7.0
24 32
Grand Canyon Education United States
Education services provider serving US universities and colleges.
0.9 6.6
25 34
Healthcare Realty Trust United States
USA based real estate company focused on the healthcare sector.
0.9 6.5
26 26
Webster Financial United States
A Connecticut, USA based mid sized bank that focuses on commercial lending.
0.8 6.5
27 21
CDW United States
Information technology products and services provider.
0.8 6.2
28 24
Molina Healthcare United States
This is a managed care business providing health insurance in the US under government programmes.
0.8 6.2
29 30
Hayward Holdings United States
Producer of residential swimming pool related equipment, systems and components.
0.8 6.0
30 44
Nomad Foods United States
A producer of branded frozen foods.
0.8 5.9
The value of the thirty largest equity holdings represents 46.2% (£358.2m) (30 April 2024: 46.9% (£426.4m)) of the Company’s total
investments.
30 | The Global Smaller Companies Trust PLC
List of Investments
30 April 2025
Quoted investments Holding
Value
£’000s
UNITED KINGDOM
1Spatial 2,479,321 1,140
4Imprint Group 30,221 1,028
Alphawave 1,761,324 2,228
Auction Technology 672,452 3,907
Bodycote 345,738 1,645
Boku 1,065,202 1,704
Breedon Group 592,608 2,552
Bridgepoint 713,865 1,909
Bytes Technology 524,239 2,655
Chemring 797,715 3,179
Clarkson 66,080 2,171
CLS Holdings 1,918,094 1,212
Crest Nicholson 1,387,670 2,492
Dalata Hotel Group 544,816 2,292
Discoverie 442,842 2,511
Eleco 818,185 957
Elementis 2,451,532 3,069
Enquest 7,590,936 1,040
Essentra 1,326,736 1,194
Everplay Group 986,261 2,633
FD Technologies 198,101 3,534
FirstGroup 1,374,469 2,367
Foresight Group Holdings 720,727 2,670
Future 222,382 1,564
Galliford Try 948,132 3,683
Genuit 784,235 2,984
Globaldata 1,176,871 2,089
Halfords Group 974,281 1,506
Helical 489,064 1,056
Hill & Smith 160,883 2,877
Hilton Food Group 284,863 2,532
Hollywood Bowl Group 821,291 2,398
James Fisher and Sons 500,019 1,510
Jet2 plc 156,487 2,476
JTC 351,523 2,928
Kainos Group 280,708 2,052
Kitwave 1,053,888 3,130
30 April 2025
Quoted investments Holding
Value
£’000s
Knights Group 1,497,882 2,000
LSL Property Services 862,525 2,415
Marlowe 503,845 1,713
Marshalls 1,194,623 3,351
Mitie 478,496 690
Molten Ventures 653,808 1,735
Moonpig 1,751,504 4,020
Morgan Sindall Group 5,505 194
Mortgage Advice Bureau 109,479 885
Optima Health 793,239 1,460
Oxford Biomedica 765,425 2,208
Oxford Instruments 142,521 2,337
Paragon Banking Group 588,693 4,960
PayPoint 522,650 3,523
Pets At Home 1,463,171 3,459
Rank Group 1,794,186 1,525
Rathbones Group 194,193 3,049
Reach 2,475,504 1,879
Savills 301,108 2,791
Senior 1,292,146 1,788
Shaftesbury Capital 2,353,873 3,192
SSP Group 1,537,814 2,276
The Gym Group 1,335,576 1,931
Treatt 456,283 1,164
Trifast 2,446,612 1,625
WAG Payment Solutions 3,468,053 2,046
Wilmington 638,470 2,292
Workspace Group 909,806 4,040
Xaar 1,381,341 1,409
XP Power 155,319 1,087
YouGov 716,566 2,046
TOTAL UNITED KINGDOM 151,964
EUROPE
AUSTRIA
Do & Co 5,715 677
Wienerberger 60,675 1,595
Total Austria 2,272
BELGIUM
Report and Financial Statements 2025 | 31
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Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chairman’s StatementOverview Auditor’s Report
30 April 2025
Quoted investments Holding
Value
£’000s
Azelis 29,105 337
Elia 15,740 1,277
Total Belgium 1,614
DENMARK
Ringkjoebing Landbobank 27,040 3,873
Total Denmark 3,873
FINLAND
Konecranes 52,695 2,637
Total Finland 2,637
FRANCE
Elis 190,310 3,651
Gaztransport et Technigaz 17,596 2,141
Nexans 26,358 2,158
Planisware 54,615 1,109
SPIE 74,415 2,712
Total France 11,771
GERMANY
Bilfinger 29,781 1,883
CTS Eventim 42,751 3,751
RENK 85,024 3,808
Total Germany 9,442
IRELAND
Bank of Ireland Group 413,496 3,630
Cairn Homes 500,275 824
Glanbia 99,860 969
Total Ireland 5,423
ITALY
Buzzi 54,878 2,145
De' Longhi 49,191 1,135
Intercos 77,906 878
Reply 6,415 854
Total Italy 5,012
NETHERLANDS
ASM International 2,352 847
BE Semiconductor Industries 9,292 745
CTP 66,211 923
IMCD Group 15,659 1,557
Total Netherlands 4,072
30 April 2025
Quoted investments Holding
Value
£’000s
NORWAY
Storebrand 395,114 3,543
Tomra Systems 98,775 1,159
Total Norway 4,702
SPAIN
Fluidra 69,778 1,206
Vidrala 42,408 3,454
Viscofan 41,152 2,227
Total Spain 6,887
SWEDEN
Avanza Bank Holdings 121,008 3,003
Engcon 117,315 850
Karnov Group 401,194 2,812
Nordnet 139,152 2,739
The Thule Group 38,974 669
Total Sweden 10,073
SWITZERLAND
Accelleron Industries 44,152 1,776
Belimo 1,728 1,097
Galencia 11,013 866
Inficon Holding 10,087 800
Kardex Holding 10,337 1,935
Siegfried Holding 21,150 1,888
SIG Group 112,513 1,629
Total Switzerland 9,991
TOTAL EUROPE 77,769
NORTH AMERICA
CANADA
WSP Global 82,916 10,931
Wheaton Precious Metals 264,001 16,506
Total Canada 27,437
UNITED STATES
Advanced Energy Industries 45,630 3,327
Amdocs 130,037 8,615
Ashland 49,338 2,008
Avnet 198,046 6,960
Boot Barn Holdings 101,139 7,890
Bristow 324,381 7,038
32 | The Global Smaller Companies Trust PLC
30 April 2025
Quoted investments Holding
Value
£’000s
Brown & Brown 163,062 13,498
CACI 10,803 3,700
CCC Intelligent Holdings 568,710 3,943
CDW 51,363 6,170
Curtiss-Wright 48,663 12,552
Eagle Materials 77,836 13,185
Encompass Health 148,030 12,972
Essential Properties Realty 358,333 8,620
FB Financial 128,936 4,105
Frontdoor 137,772 4,233
Genpact 252,537 9,495
GrafTech International 2,185,348 1,033
Grand Canyon Education 49,296 6,575
Graphic Packaging 611,486 11,569
GXO Logistics 171,126 4,640
Hayward Holdings 604,165 6,029
Healthcare Realty Trust 563,497 6,543
Jefferies Financial 158,384 5,538
Jones Lang Lasalle 31,796 5,406
Kirby 170,230 12,264
Kosmos Energy 1,389,696 1,581
LKQ Corp 310,973 8,894
Martin Marietta Materials 28,459 11,148
MaxLinear 366,385 2,732
Molina Healthcare 25,154 6,153
MSC Industrial Direct 88,157 5,045
Nomad Foods 396,853 5,936
Parsons 66,979 3,351
Plymounth Industrial REIT 423,753 4,714
PRA 300,374 4,113
Prosperity Bancshares 140,406 7,131
Quidelortho 65,738 1,368
SharkNinja 66,460 4,001
Skechers 93,772 3,368
Spectrum Brands 110,159 5,202
Standex International 41,528 4,390
The Ensign Group 123,570 11,921
U.S. Physical Therapy 78,942 4,203
United Bankshares 280,853 7,206
Vail Resorts 22,378 2,329
30 April 2025
Quoted investments Holding
Value
£’000s
Vitesse Energy 299,842 4,588
Webster Financial 184,765 6,530
WEX 57,864 5,657
Total United States
309,469
TOTAL NORTH AMERICA
336,906
JAPAN
Amada 415,000 3,104
Amano 171,000 3,734
ANYCOLOR 88,300 1,710
Azbil 225,700 1,458
Daiwabo Holdings 187,300 2,368
Fujikura Composites 75,500 524
Gunma Bank 278,500 1,728
IHI 51,800 3,030
Kakaku 104,000 1,380
Kinden 177,000 3,440
Kokuyo 296,600 4,554
Maeda Kosen 93,900 1,005
Mitsubishi Logistics 703,500 3,626
Morinaga & Co 275,400 3,679
Nichias 165,100 4,139
Nifco 80,700 1,492
Nippon TV 297,100 5,124
Nishi Nippon Financial Holdings 392,900 4,279
Niterra 201,200 4,678
Nomura Real Estate Holdings 1,167,400 5,188
NSD 201,200 3,545
Open House Group 105,800 3,506
PAL 122,500 2,553
Raito Kogyo 86,800 1,210
Sangetsu 70,400 1,069
Sankyo 378,500 4,311
Sanwa Holdings 174,200 4,281
SWCC 26,500 900
Toho Holdings 190,800 4,675
Tosei 258,500 3,244
WingArc1st 135,600 2,690
TOTAL JAPAN
92,224
REST OF WORLD
Pinebridge Asia ex Japan Small Cap Fund 49,809 28,625
Report and Financial Statements 2025 | 33
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Other Information
Chairman’s StatementOverview Auditor’s Report
Strategic Report
30 April 2025
Quoted investments Holding
Value
£’000s
Schroder ISF Global Emerging Markets Smaller
Companies Fund
215,140 30,497
The Scottish Oriental Smaller Companies Trust 12,092,930 34,828
Utilico Emerging Markets Trust 10,101,596 21,920
TOTAL REST OF WORLD 115,870
TOTAL INVESTMENTS 774,733
The number of investments in the portfolio is 196 (2024:213).
34 | The Global Smaller Companies Trust PLC
All Company data are based on assets, liabilities, earnings and expenses as reported in accordance with the Company’s
accounting policies and are unaudited but derived from the audited Financial Statements or specified third-party data providers.
Assets
at 30 April
£’000s 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Net assets (before debt) 555,092 591,602 767,979 872,704 904,220 761,515 1,051,029 1,000,086 911,462 921,525 787,865
Loans – – – 24,000 34,052 35,000 43,521 54,782 52,027 51,463 51,050
Convertible Unsecured Loan Stock 38,129 38,410 34,697 21,873 15,549 – – – – – –
Net assets 516,963 553,192 733,282 826,831 854,619 726,515 1,007,508 945,304 859,435 870,062 736,815
NAV per share
(i)
at 30 April
pence 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
NAV with debt at par per share
(i)
97.3 99.8 128.3 138.4 141.7 120.3 175.0 172.0 163.7 175.9 164.7
NAV with debt at fair value per share n/a n/a n/a n/a n/a 119.7 174.9 172.8 165.7 178.1 167.1
NAV (diluted) per share
(i)
97.0 99.5 126.4 136.9 140.6 n/a n/a n/a n/a n/a n/a
NAV total return % – 5 years 48.7
NAV total return % – 10 years 93.3
Share Price
at 30 April
pence 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Mid-market price per share
(i)
98.0 100.1 127.3 137.5 134.6 111.0 168.6 156.2 144.6 160.2 148.6
Share price high
(i)
102.5 102.4 129.9 141.5 149.5 150.0 168.6 177.0 162.2 160.8 171.6
Share price low
(i)
78.5 85.9 94.7 126.5 122.0 78.8 104.2 142.6 122.4 129.0 136.6
Share price total return % – 5 years 43.9
Share price total return % – 10 years 71.8
Revenue return after tax
for the year ended 30 April
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Available for ordinary shares – £’000s 5,659 6,452 7,839 9,448 10,623 10,493 7,416 10,241 12,620 14,560 13,343
Return per share
(i) (iii)
1.09p* 1.18p* 1.38p* 1.59p* 1.76p* 1.73p 1.26p 1.82p 2.34p 2.84p 2.84p
Dividends per share
(i)
0.965p 1.070p 1.225p 1.440p 1.650p 1.700p 1.750p 1.840p 2.300p 2.810p 3.000p
(ii)
* diluted
(i) Comparative figures for the years prior to 2020 have been restated due to the sub-division of each existing ordinary share of 25p into ten new ordinary shares of 2.5p each on
31 October 2019.
(ii) Subject to approval of the final dividend of 2.30p at the 2025 AGM.
(iii) Calculated based on the weighted average number of shares in issue during the year.
Ten Year Record (unaudited)
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Other Information
Chairman’s StatementOverview Auditor’s Report
Performance
(rebased to 100 at 30 April 2015)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
NAV per share 100 102.6* 130.3* 141.1* 144.9* 123.4** 180.3** 178.1** 170.8** 183.6 ** 172.3**
Mid-market price per share 100 102.1 129.9 140.3 137.3 113.3 172.0 159.4 147.6 163.5 151.6
Revenue return per share 100 108.3 126.6 145.9 161.5 158.7 115.6 167.0 214.7 260.6 260.6
Dividends per share 100 110.9 126.9 149.2 171.0 176.2 181.3 190.7 238.3 291.2 310.9
(1)
RPI 100 101.3 104.9 108.4 111.7 113.4 116.7 129.7 144.5 149.2 155.9
* diluted
** NAV with debt at fair value
(1)
Subject to approval of the final dividend of 2.30p at the 2025 AGM.
Costs of running the Company (ongoing charges/TER)
for the year ended 30 April
Expressed as a percentage of average net assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Ongoing charges
excluding performance fees 0.79% 0.85% 0.84% 0.83% 0.79% 0.75% 0.78% 0.75% 0.79% 0.78% 0.74%
including performance fees 1.08% 0.85% 0.86% 0.83% 0.79% 0.75% 0.78% 0.75% 0.79% 0.80% 0.74%
Total expense ratio
excluding performance fees 0.53% 0.51% 0.62% 0.60% 0.59% 0.59% 0.58% 0.58% 0.60% 0.61% 0.62%
including performance fees 0.74% 0.76% 0.62% 0.60% 0.59% 0.59% 0.58% 0.58% 0.60% 0.61% 0.62%
Gearing
at 30 April 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Effective gearing 4.8% 4.7% 3.4% 5.1% 4.6% (0.6%) 3.8% 4.6% 5.2% 4.7% 5.3%
Fully invested gearing 7.4% 6.9% 4.7% 5.6% 5.8% 4.8% 4.3% 5.8% 6.1% 5.9% 6.9%
Note: definitions of Alternative Performance Measures and a Glossary of Terms are provided on pages 105 to 110.
Strategic Report
36 | The Global Smaller Companies Trust PLC
Purpose, Values and Culture
Our purpose is to provide an investment vehicle which meets the
needs of investors, whether large or small, who seek long-term
investment returns from global smaller companies in an accessible,
cost effective way. Our investment objective is to invest in smaller
companies worldwide in order to secure a high total return.
To ensure that the Company’s purpose, values, strategy and
culture are aligned, the Board comprises Directors with a breadth
of relevant skills and experience acting with professional integrity
who contribute in an open boardroom culture that both supports
and challenges the Manager and its other third party suppliers.
Investment and Business Strategy
Our investment strategy is designed to produce outperformance
of the Benchmark and increases in dividends over the longer
term. Our appointed manager, Columbia Threadneedle Investment
Business Limited (the ‘Manager’) selects well-managed publicly
listed smaller companies with growth potential and, at initiation,
market capitalisations that are equal to or lower than the market
capitalisation of the largest regional small cap benchmark
constituent according to the latest available benchmark data.
Existing holdings can still be held and added to after they exceed
this level, however within each regional portfolio, our current
guideline to the Manager for the total percentage weight by value
of companies with a market capitalisation above this level is
capped at 30% of the value of that regional portfolio.
Business Model
The Directors have a duty to promote the success of the Company.
As an investment company with no employees, we believe that
the best way to do this and to achieve our objective is to have an
effective and strong working relationship with the Manager. Within
policies set and overseen by the Board of Directors, our Manager
has been given overall responsibility for the management of the
Company’s assets, including asset allocation, gearing, stock and
sector selection as well as risk management. The Board remains
responsible for the matters listed on page 57.
Our Manager’s focus is on individual company opportunities.
Exposure to the different geographic markets is adjusted within
specific ranges in light of the attraction of local valuations and
the outlook for currencies, but stock selection is generally the
main driver of the Company’s overall returns. Further information
regarding the Manager's Investment Philosophy and Process are
outlined on pages 2 to 7 and a full list of investments appears on
pages 30 to 33.
Furthermore, as a listed closed-end investment company we are
not constrained by asset sales to meet redemptions and therefore
the Company is particularly well suited to long-term investment in
smaller, less liquid companies. Our share capital structure gives
us the flexibility to take a longer term view and stay invested while
taking advantage of volatile market conditions. Having the ability to
borrow to invest gives us a significant advantage over a number of
other investment fund structures.
Alignment of Values and Culture
It is important that the values, expectations and aspirations of
those charged with managing the assets align with those of our
own. The Board considered the Manager’s culture and shared
values as part of the annual assessment of its performance
and in determining whether its re-appointment is in the interests
of shareholders. As a founder signatory to the United Nations
Principles for Responsible Investment (‘UNPRI’), Columbia
Threadneedle Investments continues to perform well in the 2024
UNPRI assessment and compared to peers for key areas of its
responsible investment approach and active ownership in listed
equities. The Manager has a culture of diversity, collaboration and
inclusion, anchored by shared values in keeping with the Board’s
own expectations and beliefs.
Responsible Investment
The direct impact of the Company’s activities on the community or
environment is minimal as it has no employees, premises, physical
assets or operations, either as a producer or a provider of goods
or services, while its shareholders are effectively its customers.
Consequently, it does not directly generate any greenhouse gas
or other emissions or pollution. The Company’s indirect impact
occurs through the investments that it makes and this is mitigated
by the Manager's Responsible Investment approach as explained
on pages 24 to 27.
Purpose, Strategy and Business Model
Report and Financial Statements 2025 | 37
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Other Information
Chairman’s StatementOverview Auditor’s Report
Manager Evaluation
Investment performance and responsible ownership are
fundamental to delivering the investment objective for our
shareholders and, therefore, an important responsibility of the
Directors is exercising a robust annual evaluation of our Manager’s
performance capabilities and resources. This is an essential
element in the mitigation of risk, as outlined under Principal and
Emerging Risks on page 40, and the strong governance that is
carried out by the Board of Directors, all of whom are independent
and non-executive.
The process for the evaluation of our Manager for the year under
review and the basis on which the re-appointment decision was
made are set out on page 52. The management fee is based on
the value of the Company’s net assets, thus aligning the Manager’s
interests with those of shareholders.
Managing Risks and Opportunities
We seek to make good use of our corporate structure and the
investment opportunities that produce a high total return for our
shareholders over the longer term. Like all businesses, these
opportunities do not come without risks and so the performance
of our Manager is monitored at each Board meeting on a number
of levels. In addition to managing the investments, the ancillary
functions of administration, company secretarial, accounting and
marketing services are all carried out by the Manager. It reports
on the investment portfolio; the wider portfolio structure; risks;
compliance with borrowing covenants; income, dividend and
expense forecasts; errors; internal control procedures; marketing;
shareholder and other stakeholder issues, including the Company’s
share price discount or premium to NAV; and accounting and
regulatory updates.
Shareholders can assess the Company's financial performance
from the Key Performance Indicators that are set out on page
42 and, on page 40, see what the Directors consider to be
the Principal and Emerging Risks that it faces. The risk of not
achieving the Company’s objective of delivering a high total return
for our shareholders over the longer term, or of consistently under-
performing its Benchmark or competitors, may arise from any or
all of poor stock selection, inappropriate asset allocation, weak
market conditions, badly timed use of gearing, poor cost control,
loss of assets and service provider governance issues.
In addition to monitoring our Manager’s performance, capabilities,
available resources and its systems and controls, the Directors
also review the services provided by other principal suppliers.
These include the Custodian and Depositary in their duties
towards the safeguarding of the assets.
The principal policies that support our investment and business
strategy are set out on pages 43 to 45, whilst the Lead Manager’s
Review of activity in the year can be found on page 14. In the
light of the Company’s strategy, investment processes and control
environment (relating to both the oversight of its service providers
and the effectiveness of the risk mitigation activities), we have set
out on page 41 our reasonable expectation that the Company will
continue in operation for at least the next five years.
Lead Manager and the Management of the Assets
With effect from 1 May 2024, Nish Patel has been the Lead
Manager on behalf of our Manager, responsible for the allocation
of the assets on a regional basis and for the construction of
the investment portfolio including the selection of any smaller
company investment funds utilised. Nish Patel had worked closely
with Peter Ewins, the previous Lead Manager, for a long period
of time, managing assets for the Company for more than 15
years. Our Manager has a team of smaller company investment
managers that support the Lead Manager in the selection of
stocks for the North American, UK, European and Japanese stock
markets. The Lead Manager is also assisted by other colleagues
within the management company in relation to the selection of
managed funds used to gain exposure to other global markets.
Marketing
With a large proportion of our shareholders being retail investors
and savings or execution-only platforms representing a significant
and growing element of our shareholder base, we remain focused
on the optimal communication of the Company’s investment
proposition. This year, we have continued to work with the
Manager to enhance the public profile of the Company across
different media channels. This has included a PR campaign with
an external consultancy firm, greater use of video content on the
Company’s website, alongside several podcasts and webinars. The
use of webinars in particular allows direct interaction with engaged
retail investors and the Investor Meets Company platform was
again used in the year for this purpose. Columbia Threadneedle
Investments has continued to actively market its range of
investment trusts during the year and the Manager has also been
on a number of regional roadshows to meet wealth managers,
both existing and potential new holders.
Key Stakeholders
The Company fosters good working relationships with its key
stakeholders, such as the Manager, shareholders and other
key service providers, including the Custodian, Depositary and
Registrar. Our lenders are also important stakeholders whom we
keep informed through our monthly covenant compliance reporting
in the first instance. None of the financial covenants has been
Strategic Report
38 | The Global Smaller Companies Trust PLC
threatened and we had no issues over liquidity or cause to engage
with the lenders in this regard during the year.
Whilst we hold our Manager to account for the management of our
assets, we also recognise that relationship as being fundamental
from a stakeholder perspective and as a working partnership in
forming and developing our strategy. Our own engagement with
our Manager is continuous, particularly through our regular Board
meetings and, not least, the annual meeting that we dedicate
to the review of strategic matters. The debate at our strategy
meeting in February included a review of the areas critical to the
future success of the Company including investment strategy
and marketing. The relationships that our Manager has with the
companies in which we invest are of key importance and we
outline our approach on pages 2 to 7.
Albeit not in the traditional sense, we see our shareholders
as clients who we hope will stay with us and reap the benefits
of investing over the longer term. Many of our underlying
shareholders are young and hold their shares through their
parents in the Manager's savings plans and the Child Trust Fund
and Junior ISA accounts. The Child Trust Funds have now begun
to mature, meaning that, as each child turns 18, they have full
control over their holdings. As these accounts reach maturity, our
focus is on keeping as many of these young investors with us as
possible. The Manager writes to parents ahead of their account
maturity dates explaining the options and opportunities available
to them. Once 18, the young investor receives communications on
options available to them, and then quarterly, reminded with their
valuation statement.
With regard to our shareholders more generally, we engage by
reporting our activities and performance through the publication of
our half-year and annual reports. Most shareholders and savings
plan investors prefer not to receive such detailed information.
To avoid them losing this essential line of communication, we
instead make available a short notification summary covering the
main highlights of our half-year and annual results. Shareholders
and savings plan investors can access the full information on
our website as shown on page 1. Through our Manager, we also
ensure that savings plan investors are able to participate at
shareholder meetings in addition to those members who hold
their shares directly on the main shareholder register. Details
of the proxy voting results on each resolution are published on
the Company's website where there is also a link to the daily
publication of our NAV and our monthly factsheet.
The Manager seeks to foster good relations with wealth managers
and underlying investors in promoting the Company’s investment
proposition and over the year a number of meetings, both virtual
and in-person, were held with existing and prospective investors.
These meetings are reported on regularly to the Board. The
Chairman and Senior Independent Director are always available to
meet with major shareholders.
Report and Financial Statements 2025 | 39
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Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chairman’s StatementOverview Auditor’s Report
Promoting Success
Section 172 Statement
Section 172(1) of the Companies Act 2006 (‘Section 172’)
requires that a Director must act in the way that they consider, in
good faith, would be most likely to promote the success of the
Company for the benefit of its members (i.e. shareholders) as
a whole and, in doing so, have regard (amongst other matters)
to the likely consequences of any decision in the long-term; the
interests of the Company’s shareholders; the need to foster the
Company’s business relationships with suppliers, customers
and others; the impact of the Company’s operations on the
community and the environment; the desirability of the Company
maintaining a reputation for high standards of business conduct;
and the need to act fairly as between members of the Company.
The Directors have continued to act to promote the success of
the Company for the benefit of its shareholders as a whole and in
so doing, they have had regard to the matters set out in Section
172. This includes the likely consequences of their decisions
in the longer term and how they have taken wider stakeholders’
needs into account.
As noted on page 36, we have no employees, premises, assets
or operations. Details of our key stakeholders are noted on pages
37 and 38. Our main working relationship is with the Manager.
Recognising that sustainability is fundamental to achieving
longer term success, we have continued to work closely with
our Manager to develop further our investment strategy and
underlying policies. This is not simply to achieve the Company’s
investment objective but to make sure it is done in an effective,
responsible and sustainable way in the interests of shareholders,
future investors and society at large. The portfolio activities
undertaken by our Manager and the impact of decisions taken
are set out in the Lead Manager’s Review on pages 14 to 23. On
pages 24 to 27 we have again reported on our approach towards
responsible investment. We are very supportive of the Manager’s
approach, which includes engagement with the management of
investee companies and the consideration of financially material
ESG factors.
We use gearing to enhance returns, but this will have a negative
impact at times of market shocks. We maintained a moderate
level of gearing throughout the year. At the end of the year we
had drawn down €6.8m, ¥557.5m and $9.8m (in total, the
equivalent of £16.1m) of our £35m multi-currency revolving credit
facility. The blended rate on this facility and the £35m private
placement notes 2039 is 2.7%, which leaves us well placed to
enhance investment returns over the long term and build on our
performance record.
One of our Key Performance Indicators is dividend growth. This
year the total annual dividend will be up by 6.8% which extends
our record to 55 years of consecutive annual increases.
We bought back 47.3m shares in the year at an average discount
to NAV of 10.3%. We would only re-issue shares from treasury
if the share price is at a premium to NAV. This policy is not
only accretive to the NAV per share, it also helps moderate the
absolute level and volatility of the discount or premium and
provides liquidity in the shares.
As long-term investors we always look to the future and to
the success of the Company in that context. We believe that
the Company provides a clear investment choice, not only
for investors large or small but also for those starting their
investment journey. We continue to promote the Company
through marketing and work towards the optimal delivery of the
Company’s investment proposition and to promote the success
of the Company for the benefit of all shareholders, stakeholders
and, through its valuable role as an investment vehicle, the
community at large.
40 | The Global Smaller Companies Trust PLC
The Board has carried out a robust review and assessment of
the Company’s principal and emerging risks and the uncertainties
that could threaten its future success. This includes near-term
risks such as those posed by geopolitical uncertainty and longer-
term risks, such as climate change. The consequences for the
Company's strategy, business model, liquidity, future prospects
and long term viability form an integral part of this review.
The Board’s processes for monitoring the principal risks and
identifying emerging risks are set out on page 60 and in note 23
to the financial statements. Any emerging risks that are identified
Principal Risks Mitigation by strategy Actions taken on Principal Risks in the year
Service providers and systems security – Errors, fraud or control
failures at service providers or loss of data through business
continuity failure or cyber attacks could damage reputation
or investors’ interests or result in loss. Cyber risks remain
heightened.
The ancillary functions of administration, company secretarial,
accounting and marketing services are all carried out by the
Manager. Custody and depositary services are provided by third
party suppliers.
The Board reviews and monitors the services provided and the
effectiveness of service providers’ processes through the review
of internal controls reports and internal efficiency KPIs.
The Audit and Management Engagement Committee and the Board have regularly reviewed
the Company’s risk management framework with the assistance of the Manager. Regular
control reports are provided by the Manager which cover risk, compliance and oversight of
its own third-party service providers, including IT security and cyber-threats. Reports from
the Depositary, which is liable for the loss of any of the Company’s securities and cash
held in custody unless resulting from an external event beyond its reasonable control,
were reviewed. The Board is satisfied that the continuity arrangements of all key suppliers
continued to work well and as such, this risk is unchanged.
Investment performance – Inappropriate business strategy or
policy, or ineffective implementation, could result in poor returns
for shareholders. Failure to access the targeted market or meet
investor needs or expectations, including Responsible Investment
and climate change in particular, leading to significant pressure
on the share price. Political risk factors could also impact
performance as could market shocks such as those experienced in
relation to Covid-19 and US trade tariffs.
Under our Business Model, a manager is appointed with the
capability and resources to manage the Company’s assets, asset
allocation, gearing, stock and sector selection and risk. The
individual regional investment portfolios are managed to provide in
combination a well-diversified, lower volatility and lower risk overall
portfolio structure. The Board holds a separate strategy meeting
each year and considers investment policy review reports from the
Manager at each Board meeting.
The performance of the Company relative to its Benchmark,
its peers and inflation is a KPI measured by the Board on an
ongoing basis and is reported on page 42.
Columbia Threadneedle Investments has been retained as Manager and continues to
deliver on the Company’s objective over the medium and long term, notwithstanding the
more difficult investment environment over the past year. At each meeting of the Board, the
Directors consider and discuss the Company's investment performance with Nish Patel,
the Lead Manager, and also meet with the Managers of the regional portfolios during the
year. Marketing and investor relations campaigns continued throughout the year, including
presentations by the Lead Manager to wealth managers, private clients and institutions
across the country. Detailed reports provided by the Lead Manager have been reviewed
by the Board at each of its meetings. Continuing income generation from the investment
portfolio over the year and the healthy level of distributable reserves has resulted in the
dividend for the year increasing by 6.8%. In overall terms, this risk is considered increased.
Discount/premium – A significant share price discount or premium
to the Company’s NAV per share, or related volatility, could lead
to high levels of uncertainty or speculation and the potential to
reduce investor confidence. Increased uncertainty in markets due
to an event such as Covid-19 could lead to falls and volatility in the
Company’s NAV.
The Board has established share buy-back and share issue
policies, together with a dividend policy, which aim to moderate the
level and volatility of the share price discount or premium to the
NAV per share and it seeks shareholder approval each year for the
necessary powers to implement those policies.
The discount/premium to NAV at which the Company's shares
trade is a KPI measured by the Board on an ongoing basis and is
reported on page 42.
Despite actively buying in shares on a regular, ongoing basis in order to address the
imbalance between the supply and demand of the Company's shares, the discount has
remained wider than desired. During the course of the year, the Manager has continued to
increase marketing activity over a number of channels and has enhanced the messaging
around the core investment proposition. This activity aims to stimulate demand for the
Company’s shares from existing and new investors. Given the continued higher prevailing
discount level the risk is considered to have remained heightened during the year.
and that are considered to be of significance are included on the
Company’s risk assessment together with any mitigations. These
principal and emerging risks are reviewed regularly by the Audit
and Management Engagement Committee and by the Board.
During the year, such risks included ongoing macroeconomic and
geopolitical concerns and the impact on financial markets of US
trade tariffs. The principal risks are largely unchanged from those
reported in the prior year. Those identified as most relevant to
the assessment of the Company’s future prospects and viability
were those relating to inappropriate business strategy, potential
Principal and Emerging Risks
Unchanged throughout the year.
Increase in risk during the year.
Unchanged throughout the year but
this risk has remained heightened.