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UK
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ESP
ITA
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Highlights
Decline in Adjusted NAV and Share Price: The Trust's Adjusted Net Asset Value (Adjusted NAV) fell by 7.6%, from 55.79p at the end of April 2024 to 51.44p by 31 October 2024, factoring in dividends re-invested. Additionally, the Ordinary Share price saw a decline of 11.9%, dropping from 50.50p to 44.40p during the same period.
Revenue Growth: The Trust managed to generate a profit of £48,000 during the half-year, which has been credited to its revenue reserves.
Significant Share Redemptions: The Company processed redemption requests for 40.4% of its issued share capital, amounting to 31,083,534 Ordinary Shares, which were redeemed and cancelled on 5 November 2024. Post-redemption, the issued share capital stands at 45,840,069 Ordinary Shares.
Miton UK MicroCap Trust PLC (LSE:MINI) has published its Half-Year Report for the period ending 31 October 2024, providing insight into its financial performance and strategic developments. Despite facing a decrease in asset value and share price, the Trust remains focused on its long-term objectives.
Performance Overview
For the six months ending 31 October 2024, Miton UK MicroCap Trust PLC reported a decline in both its Adjusted Net Asset Value (Adjusted NAV) and Ordinary Share price. The Adjusted NAV decreased from 55.79p to 51.44p, a drop of 7.6%, while the share price fell from 50.50p to 44.40p, reflecting a decrease of 11.9%. These changes account for dividends re-invested, underscoring the Trust’s performance amidst a challenging market environment.
The Trust attributed the decline in value to various market conditions, highlighting the volatility within the micro-cap segment in which it invests. Despite the drop in asset value, the Trust has emphasized its focus on a long-term investment strategy, aiming to navigate market fluctuations with a disciplined approach.
Financial Highlights
In terms of revenue, the Trust managed to secure a modest profit of £48,000 during the half-year period. This amount has been credited to its revenue reserves, contributing to the Trust’s financial stability despite the overall decline in value. The revenue reserves may help in future operational flexibility, especially in navigating turbulent market conditions.
Share Redemptions and Capital Adjustments
A significant development during the reporting period was the redemption of 40.4% of the Trust's issued share capital. Redemption requests for a total of 31,083,534 Ordinary Shares were received and subsequently processed, with the redeemed shares cancelled after the period ended on 5 November 2024. This reduction in the Trust's issued share capital leaves a total of 45,840,069 Ordinary Shares in circulation.
The redemptions reflect a notable shift in investor sentiment, as some shareholders chose to exit the Trust, following the period of underperformance. However, the Trust has expressed confidence in its ongoing strategy, focusing on the long-term growth potential of its investments.
Outlook
The outlook for the Trust highlights a broader market trend, where financial assets can experience prolonged periods of exceptional returns, followed by abrupt changes. A notable example is the performance of the Japanese stock market, which outperformed until the end of 1989, only to see disappointing returns for the next three decades. In a similar vein, the current performance of US large-cap equities may soon face a shift, requiring investors to look for returns from other asset classes.
Many analysts predict that the UK stock market, with its capital-intensive bias and focus on growing income, will become a key avenue for diversification. Despite recent large-scale selling of UK equities, the UK stock market has begun to align with the US indices, despite the absence of a major technology stock sector. This could signal the start of a new long-term trend of UK stock market outperformance.
If this trend materializes, UK-quoted microcaps, which have been underperforming and are currently valued at exceptionally low levels, may present significant upside potential. Historically, UK microcaps have outperformed larger UK companies, and with the UK majors poised to outperform international counterparts, a small- and micro-cap strategy could show strong growth potential.
In response to these trends, the Board of Miton UK MicroCap Trust is exploring options to offer investors the choice to roll over their holdings into one of Premier Miton’s open-ended funds or receive cash upon winding up. This strategic exploration reflects the Trust’s commitment to adapting to market dynamics and maximizing long-term value for its shareholders.
