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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.
- Alpha Group International, Everplay and Microlise Group rose strongly on M&A activity, upgrades and robust trading updates.
- Judges Scientific and Kitwave Group declined on profit warnings and weaker demand in key markets.
The Liontrust UK Smaller Companies Fund returned 1.0%* in July. The FTSE Small Cap (excluding investment trusts) Index comparator benchmark was -0.9%, and the average fund in the IA UK Smaller Companies sector, also a comparator benchmark, returned -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.
Once again, M&A activity was a feature of the portfolio in July.
Alpha Group International (+31%) has been the subject of interest from US payments company Corpay since May, when it disclosed that it had rejected a preliminary cash proposal (of which no details were given). However, Alpha’s Board subsequently described ‘constructive’ talks with Corpay which led it to seek and an extension to the Takeover Panel’s ‘put up or shut up’ (PUSU) deadline into July.
Corpay’s subsequent 4250p a share bid came in at a 55% premium to Alpha’s undisturbed share price, valuing the group at a £1.6 billion enterprise value, and was attractive enough to gain the recommendation of its Board.
The consequence of the UK being an unloved market and small caps being even more out of favour is that UK small caps are currently one of the standout areas of value globally (click here to read our latest insights piece).
Everplay (+21%), formerly Team17, built on its strong year-to-date performance with another upgrade to profits forecasts. An interim trading update from the video game developer and publisher detailed strong trading in the first half of 2025, with new game releases performing well. While 2025 is still expected to show the usual second-half weighting to trading due to the timing of games releases, Everplay now expects to exceed market expectations.
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.
An interim trading update from Judges Scientific (-32%) warned that earnings per share in 2025 are on track to be around 15% lower than previously forecast. The scientific instruments supplier has been affected by reductions to US government research funding. In the first half of 2025, order intake was up 4% overall but down 18% in North America. While trading has been weaker than expected, it still represents recovery on the same period last year – with organic revenue up 7% following progress in other geographic regions.
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.
Positive contributors included:
Microlise Group (+34%), Alpha Group International (+31%), Everplay Group (+21%) EKF Diagnostics (+16%) and FW Thorpe (+9.2%).
Negative contributors included:
Judges Scientific (-32%), Kitwave Group (-22%), Robert Walters (-22%), YouGov (-17%) and AB Dynamics (-16%).
Discrete years' performance** (%) to previous quarter-end:
| Jun-25 | Jun-24 | Jun-23 | Jun-22 | Jun-21 |
Liontrust UK Smaller Companies I Inc | -3.0% | 11.0% | -5.3% | -18.4% | 46.7% |
FTSE Small Cap ex ITs | 13.1% | 18.5% | -0.3% | -14.6% | 65.2% |
IA UK Smaller Companies | 2.6% | 14.1% | -5.5% | -22.1% | 53.1% |
Quartile | 4 | 4 | 3 | 2 | 3 |
*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, primary class.
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Past performance does not predict future returns. You may get back less than you originally invested.
We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.
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