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VIew NowPast performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.
- Global equities extended their recovery from April’s sell-off. In the UK, large caps led gains while smaller companies lagged..
- ActiveOps, Microlise Group and CML Microsystems delivered strong updates and contract wins, driving significant share price gains.
- Kitwave Group and Churchill China fell sharply on weaker consumer demand in leisure and hospitality markets.
The Liontrust UK Micro Cap Fund returned 2.0%* in July. The FTSE Small Cap (excluding investment trusts) Index and the FTSE AIM All-Share Index comparator benchmarks returned -0.9% and -1.0% respectively. The average return of funds in the IA UK Smaller Companies sector, also a comparator benchmark, was -0.2%.
Global equity markets’ recovery from April’s tariff-triggered sell off continued in July. In the UK market, gains were led by the large-cap FTSE 100 (+4.3%) followed by the FTSE 250 mid-caps (+1.9%), while small caps (-0.9%) and the AIM All-Share (-1.0%) retreated slightly.
US trade policy remained a key feature for market commentators throughout the month, but while the agreement of deals with Japan and the EU helped boost sentiment, investors were largely content to set the trade tariff saga aside and focus on corporate updates.
ActiveOps (+30%) released a very upbeat set of results for the year to 31 March. The provider of data analytics tools to banking, healthcare and insurance sectors grew revenue by 14% to £30.5 million, with pre-tax profit rising 30% to £1.3 million. It secured nine new customers over the year – compared with three in the previous twelve months – and achieved a net revenue retention on its existing business of 108% in constant currency terms.
Microlise Group (+34%) rallied through the month ahead of releasing a half-year trading update in which it described “buoyant end markets, a robust pipeline and a growing order intake” and maintained its financial guidance for 2025. The provider of transport management software to fleet operators added 216 customers in the first half of the year, with churn on its existing base of only 0.5% - helping it grow revenue 13% to £44.1 million.
CML Microsystems (+27%) moved higher on news of a contract success. The developer of semiconductors for global communications markets has been awarded a 12-year supply and design contract worth over $30 million with a manufacturer of global navigation satellite system (GNSS) equipment.
EKF Diagnostics (+16%) showed more evidence that last year’s business rationalisation efforts and refocus on higher margin products are yielding results. A half-year trading update outlined an improvement in gross margins to 50% from 48% a year ago, with revenues and earnings rising 2% and 9% respectively in constant currency terms.
Delivery wholesale business Kitwave Group (-22%) had enjoyed a strong share price run after a May trading update highlighted a recovery in the foodservice division as hospitality-related revenue recovered somewhat. However, interim results warned that volumes have been weak in the destination leisure venues it serves via some of its higher margin depots. The company attributed this to fragile consumer confidence as a result of a volatile macroeconomic backdrop; while footfall is up year-on-year in these locations, consumption is down. It cut operating profit guidance for 2025 to a £38 – 45 million range, compared with average analyst forecasts of £44 million.
Hospitality market weakness has also been a headwind for Churchill China (-37%). While it too saw steady performance through to Easter, activity in May and June was well below expectations, with restaurants – particularly independents – experiencing cost pressures. Sales are lower than last year, while there has also been some downtrading to cheaper products in its range. While UK and USA sales have been robust, Churchill has experienced soft demand in its European markets, particularly Germany.
Churchill reiterated that market share has been maintained and that it views its medium-term market opportunity as unaffected but warned that this year’s revenue and profits will be significantly lower than last year.
While also acknowledging the tough environment for consumers, Cake Box (+16%) still managed to deliver good growth. The fresh cream celebration cake maker increased its franchisee store network by 26 to 251 and increased sales by 13% to £42.8 million, including 1.0% like-for-like growth at franchise stores.
Positive contributors included:
Microlise (+34%), ActiveOps (+30%), CML Microsystems (+27%), EKF Diagnostics (+16%) and Cake Box (+16%).
Negative contributors included:
Churchill China (-37%), Essensys Group (-23%), Kitwave Group (-22%), Solid State (-16%), and Intercede (-15%).
Discrete years' performance (%) to previous quarter-end**:
| Jun-25 | Jun-24 | Jun-23 | Jun-22 | Jun-21 | |
Liontrust UK Micro Cap I Acc | -5.1% | 13.6% | -3.8% | 15.9% | 59.5% | |
FTSE Small Cap ex ITs | 13.1% | 18.5% | -0.3% | -14.6% | 65.2% | |
FTSE AIM All Share | 2.8% | 3.4% | -12.5% | -29.0% | 42.5% | |
IA UK Smaller Companies | 2.6% | 14.1% | -5.5% | -22.1% | 53.1% | |
Quartile | 4 | 2 | 2 | 1 | 2 | |
*Source: Financial Express, as at 31.07.25, total return (net of fees and income reinvested), bid-to-bid, institutional class. **Source: Financial Express, as at 30.06.25, total return (net of fees and income reinvested), bid-to-bid, institutional class.
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Past performance does not predict future returns. You may get back less than you originally invested.
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