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- Eagle Eye Solutions buoyed by positive start to enterprise software partnership.
- New management team and strategy showing evidence of progress at James Cropper
- Virgin Wines gives back some of recent gains on warning of ongoing tough trading backdrop
The Liontrust UK Micro Cap Fund returned 0.6%* in September. The FTSE Small Cap (excluding investment trusts) Index and the FTSE AIM All-Share Index comparator benchmarks returned 2.4% and 2.7% respectively. The average return of funds in the IA UK Smaller Companies sector, also a comparator benchmark, was 1.6%.
Equity market gains were aided by a US rate cut, which was increasingly priced into markets in the wake of data showing weaker than expected jobs creation. The Fed opted to cut by a quarter percentage point, its fourth cut since rates peaked in 2023, but the first in nine months. Having cut five times in the last 18 months, the Bank of England kept rates on hold in September.
Eagle Eye Solutions (+43%), the software-as-a-service (SaaS) provider to the retail and travel sectors, released full-year results reporting on a solid performance in the period to 30 June 2025, confirming the outlook for the new financial year, and including upbeat comments on the initial stages of the enterprise software partnership. Eagle Eye’s AIR platform for omnichannel personalisation of loyalty and subscription programmes will be embedded in the products of “one of the largest software providers in the world”. The initial product development milestones have been met and first customer contracts are expected towards the end of 2025.
James Cropper’s (+35%) September’s AGM statement revealed that performance in its two divisions had been slightly ahead of expectations during the 18 weeks to 2 August, with more disciplined cash management helping it reduce net debt to £10.3 million from £12.9 million at 29 March. This provided evidence to the market that the new management team and strategy were making progress.
Gear4Music (+18%) issued an AGM trading update showing strong recent sales momentum has been sustained, with revenues in the quarter to 30 June rising 27% year-on-year. The competitive landscape across UK and Europe is described as favorable, allowing it to capture market share. Nexteq’s (+18%) recent interim results showed that progress had been made from cost-cutting efforts and the company saw a rise in order intake.
Having enjoyed a strong run through the first half of 2025 – fuelled by good sales over the Christmas trading period and a new investment strategy to accelerate growth – Virgin Wines (-23%) has given back some ground following a trading update released at the end of July. Although the online direct-to-consumer wine retailer commented that financial performance in the year to 30 June 2025 was in line with market expectations – and ahead on certain profitability measures – it also reminded investors of tough trading backdrop which includes subdued consumer confidence and higher alcohol duty costs.
Essensys Group (-23%) lost ground as a trading update showed revenue and earnings on track to be slightly below market expectations. The supplier of software to landlords and workspace providers had previously communicated a revenue fall in the year to 31 July due to a higher level of customer churn; the latest statement announced revenue of the £19.2 million, down from £24.1 million in the previous year and below analyst forecasts of £20.0 million. Essensys believes it has made account management improvements which should deliver lower churn and a reduced cost base, while it views the long-term growth drivers for flexible, hybrid working as intact.
Platform law firm Keystone Law Group (+17%) announced that both rrevenue and profits were ahead of market expectations in the half-year to 31 July. Positive recruitment conditions saw Keystone receive 164 new applicants in the six months, adding 30 new principal lawyers to take the total to 472.
By contrast, animal health produce group Animalcare (-9.2%) and mobile gaming developer Gaming Realms (-11%) released interim results which fell slightly short of investors’ expectations.
Positive contributors included:
Eagle Eye Solutions (+43%), James Cropper (+35%), Gear4Music (+18%), Nexteq (+18%) and Keystone Law Group (+17%).
Negative contributors included:
Virgin Wines (-23%), Essensys Group (-23%), Arbuthnot Banking Group (+14%), Gaming Realms (-11%) and Animalcare Group (-9.2%).
Discrete years' performance (%) to previous quarter-end**:
| Sep-25 | Sep-24 | Sep-23 | Sep-22 | Sep-21 | |
Liontrust UK Micro Cap I Acc | 1.2% | 10.0% | 2.4% | -26.6% | 63.2% | |
FTSE Small Cap ex ITs | 6.4% | 22.4% | 12.7% | -24.4% | 72.4% | |
FTSE AIM All Share | 7.9% | 3.9% | -8.3% | -34.3% | 30.8% | |
IA UK Smaller Companies | 2.5% | 16.1% | 2.2% | -31.9% | 51.1% | |
Quartile | 3 | 4 | 2 | 1 | 1 | |
*Source: Financial Express, as at 30.09.25, total return (net of fees and income reinvested), bid-to-bid, institutional class. **Source: Financial Express, as at 30.09.25, total return (net of fees and income reinvested), bid-to-bid, institutional class.
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