|
Artemis UK Future Leaders PLC reported a decreased net asset value on Wednesday, but committed to maintaining a stable interim dividend. The London-based fund, which targets long-term total return investments in small to medium-sized UK listed companies, reported an NAV per share of 443.50 pence as of July 31, down from 449.88p at January 31. Shares in Artemis UK Future were 1.4% higher at 368.95p each on Wednesday afternoon in London. The company delivered a plus 1.1% total return for the six months ended July 31. Its benchmark, the Deutsche Numis Smaller Companies + AIM (ex-Investment Companies) index, returned plus 6.7%. Artemis reiterated last week’s declaration of a 3.85p per share second interim dividend, unchanged from both the previous year and the first quarter. Detractors from its portfolio in the first half included GB Group, after ‘some analysts cut forecasts’ despite full-year results meeting expectations, and Victorian Plumbing, which ‘also performed poorly after cutting forecasts’. Artemis noted that defence companies ‘have done well, with holdings in Avon Technologies, Chemring Group and Serco Group (which generates about 40% of its revenues from this area) rising strongly’. Moreover, its financial investees ‘fared even better’ with Secure Trust Bank being the best performer as it rebounded after losses related to UK motor finance. ‘The performance reflects a period of modest recovery in UK smaller companies, yet it was outpaced by gains in the broader market....The market environment has remained volatile, influenced by inflationary concerns, geopolitical tensions and softness in domestic consumption,’ Chair Bridget Guer said. ‘Although pockets of opportunity have emerged, especially among high-quality, cash-generative smaller businesses, broader sentiment to UK small companies remains cautious.’ Looking ahead, however, she commented: ‘The managers have been saying for some time that the UK economy is in better shape than the headlines suggest. Their view was confirmed in mid-August on the news that GDP growth had outpaced expectations in Q2...It is possible that the managers are wrong and the UK is about to enter a recession. However, there are two other scenarios that they think are far more likely and represent something of an each-way bet for the UK smaller companies sector. ‘On the one hand, if employment holds up, consumer confidence and spending may slowly increase. This pushes up economic growth in the UK at a time when some commentators expect it to falter in the US. The relative valuation disparity could prompt a modest investor switch which fuels flows into the UK. Small-cap returns get turbo-charged as they benefit from greater domestic revenues.’ The other potential outcome, she said, is that ‘the UK hobbles on with more of the same: a rather moribund economy where, even though investors don’t return to UK smaller companies, low valuations mean takeovers and share buybacks continue to drive returns.’ Copyright 2025 Alliance News Ltd. All Rights Reserved.
|
