River UK Micro Cap outperforms benchmark despite depressed sentiment

Mon, 06th Oct 2025 13:33

(Alliance News) - River UK Micro Cap Ltd on Monday said it outperformed its benchmark in the 12 months to the end of September.

In a trading update, the London-based investment company focused on firms with market caps under GBP100 million said its net asset value per share return over the period was 22.3%, ahead of the benchmark Numis Small Cap inc AIM ex ITs index which was up 8.3%.

The company said its NAV per share at the end of Septmber was 248.90 pence.

It reiterated its "long-term commitment" to return capital to shareholders.

River UK Micro Cap said Serabi Gold made a 4.2 percentage point contribution to its performance, while Distribution Finance Capital Holdings PLC, which climbed 80% over the period, made a 3.5 percentage point contribution.

Other top contributors included ActiveOps PLC and Gear4music Holdings PLC.

"Sentiment towards UK listed small and micro cap companies remains depressed and at odds with the ongoing improvement in company fundamentals and earnings. We currently have a portfolio of companies that have, in aggregate, grown earnings rapidly over the last few years, with net cash balance sheets and substantial free cash flow generation," said Portfolio Manager George Ensor.

"The portfolio free cash flow yield is currently 7% which moves up to 8.5% when adjusted for the large discount to NAV that our shares currently trade at (17%) - a discount that is at odds with our peer group despite a track record and commitment to only retire equity. We believe we are at or close to the start of a new global cycle of outperformance for smaller companies which is an environment in which this strategy will flourish."

Shares in River UK Micro Cap were down 0.5% at 206.00p in London on Monday afternoon.

By Michael Hennessey, Alliance News reporter

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