Aberforth Smaller Companies (ASL) has emerged unscathed from the turbulent first half as its stock picks notched up a 5.5% total portfolio return to beat the 1.8% rise in the Deutsche Numis Smaller Companies index. Share buybacks of £37.1m in the six months to 30 June helped to slightly narrow the share price discount and provide a 6.5% total return to shareholders. Three bids and one takeover approach for portfolio companies also bolstered the performance and highlighted the undervaluation of UK small caps at a time when the fund managers said investors were distracted by the “supermassive black hole” of the artificial intelligence theme that chair Richard Davidson said was sucking enormous amounts of capital from the rest of the stock market. The interim dividend was raised 7% from 14.3p to 15.3p per share on the back of an encouraging rise in investment income. The board has negotiated a £250,000 annual saving for shareholders with Aberforth Partners agreeing to adjust the tiered annual management fee. ASL will now pay 0.75% on net assets up to £750m rather than £1bn with the 0.65% tier now covering a larger amount of the portfolio above that.
Matthew Read, senior analyst at QuotedData, said: “Aberforth Smaller Companies’ value approach came good during a turbulent first half, with strong stock selection and the timely use of gearing helping ASCoT outperform its benchmark by 3.7 percentage points. Despite this, it’s a familiar story for UK small-cap funds as its portfolio remains strikingly cheap – trading on just 7.3 times forecast EV/EBITA for 2026 – despite robust balance sheets, rising dividends and continued takeover interest across the sector. The 7% increase in the interim dividend, ongoing accretive buybacks and lower management fee help while investors wait, but UK smaller companies continue to struggle for investors’ attention in an AI-focussed market. However, this is precisely the sort of opportunity on which Aberforth has traditionally capitalised.”
Shaftesbury Capital (SHC), the £2.8bn West London real estate investment trust, has reported a strong first half with net tangible assets (NTA) up 3.9% to 223p per share, well above the current share price of 143.5p. Chief executive Ian Hawksworth said that despite the broader UK and global economic uncertainty, SHC’s portfolio continued to deliver “high footfall, customer sales growth, high occupancy and a strong pipeline” in the six months to 30 June. The uplift came as the company completed 226 leasing transactions that were 18% above previous passing rents and 5% ahead of estimated rental value (ERV) in December. Underlying earnings per share rose 8% from 2.2p to 2.4p to cover a 16% rise in the interim dividend, up from 1.9p to 2.2p per share.
QuotedData’s Matthew Read said: “Shaftesbury Capital’s results provide further evidence that prime West End property seems to be operating in a market of its own. Strong occupier demand, limited availability and rising customer sales have allowed the company to secure leases well ahead of previous rents, driving further growth in earnings, NTA and the dividend. The 28% gap between passing rents and ERV highlights the substantial reversion still embedded within the portfolio, while the low 16% loan to value (LTV) gives management plenty of flexibility to invest and pursue opportunities.”
Majedie Investments (MAJE), the £172m “liquid endowment” fund run by Dan Higgins at Marylebone Partners, returned 10.7% in the second quarter with the biggest contributions to performance coming from specialist funds investing in Korea, China and biotech as well as a private equity bid approach for UK-listed DCC Energy. The gain in net asset value in the three months to 30 June took the total underlying return in the first half to 15.6%, ahead of the absolute return fund’s CPI inflation plus 4% objective.
BlackRock Throgmorton (THRG) is to make a second and final cash distribution of £7.7m or 2.7p per share as part of its liquidation and merger with BlackRock Smaller Companies (BRSC) which shareholders approved in April.
European Opportunities Trust (EOT) has gained shareholder approval at a first general meeting for its liquidation and reconstruction. A second meeting will follow on 7 August to implement the wind-down and rollover into JPMorgan European Growth & Income (JEGI) or a new open-ended fund to be run by fund manager Alexander Darwall.
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