REG - MonEuroSmllCosTst - Half-year Report
31/10/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251031:nRSe5686Fa&default-theme=true
RNS Number : 5686F Montanaro European Smaller C.TstPLC 31 October 2025
Montanaro European Smaller Companies Trust plc
LEI: 213800CWSC5B8BG3RS21
Unaudited Half-Yearly Report for the Six Months Ended 30 September 2025
The Board of Montanaro European Smaller Companies Trust plc (the 'Company' or
'MESCT') announces the unaudited half-yearly results of the Company for the
six months ended 30 September 2025.
Highlights
Performance
6 months 1 year 3 year 5 year 10 year MAM*
Capital Returns%²
Share price 13.5% 16.2% 56.9% 20.1% 225.9% 427.8%
Net Asset Value ('NAV') per Ordinary share** 13.1% 10.9% 47.6% 27.7% 221.3% 435.9%
Benchmark (Composite) ¹** 13.2% 13.0% 38.2% 30.6% 116.5% 222.0%
Total Returns%²
Share price 14.1% 17.1% 60.6% 24.3% 254.8% 556.4%
NAV per Ordinary share** 13.7% 11.7% 50.7% 31.8% 247.0% 551.4%
Benchmark (Composite)¹** 15.4% 15.8% 48.5% 45.7% 164.0% 368.7%
Sources: Morningstar Direct, Association of Investment Companies ('AIC'),
Montanaro Asset Management Limited ('MAM' or 'Montanaro').
As at As at 12 month As at 6 month
30 September 30 September % change 31 March % change
2025 2024 2025
(Audited)
Ordinary share price 168.5p 145.0p 16.2% 148.5p 13.5%
NAV per Ordinary share** 183.2p 165.2p 10.9% 162.0p 13.1%
Discount to NAV² (8.0)% (12.2)% (8.3)%
Net assets** (£'000s) 273,166 313,020 (12.7)% 291,508 (6.3)%
Market capitalisation** (£'000s) 251,243 274,670 (8.5)% 267,188 (6.0)%
Net gearing employed² 6.1% 1.7% 2.1%
6 months 6 months % change 12 months
ended ended ended
30 September 30 September 31 March
2025 2024 2025
(Audited)
Revenue return per Ordinary share 1.80p 1.56p 15.4% 1.50p
Dividends per Ordinary share 0.4p 0.3p 1.26p
Ongoing charges (annualised)² 1.0% 1.0% 1.0%
Portfolio turnover (annualised)** 33.0% 10.0% 14.0%
*From 5 September 2006, when MAM was appointed as Investment Manager.
**Details provided in the Glossary below.
(1)From 5 September 2006, the benchmark was the MSCI Europe SmallCap Index.
The benchmark was changed on 1 June 2009 to the MSCI Europe SmallCap (ex-UK)
Index (in sterling terms).
(2)Refer to Alternative Performance Measures below.
Chairman's Statement
Performance
In the first six months of the financial year the Net Asset Value of your
Company rose by 13.1% to 183.2p per share. In comparison the Company's
Benchmark (MSCI Europe SmallCap (ex-UK) Index) rose by 13.2%.
During the period, the share price discount to NAV narrowed from 8.3% to 8.0%.
As a result, the share price rose by 13.5%, resulting in a total return of
14.1%. The total return of the Benchmark was 15.4%.
Since Montanaro were appointed in September 2006, the annualised NAV total
return has been 10.3%, 1.9% p.a. ahead of the Company's Benchmark.
Montanaro have a long-term investment approach, exclusively focused on
investing in high quality, growing companies. Recently, style headwinds have
persisted and weighed on relative returns: for example, during this reporting
period, Quality has lagged the broader European market by more than 5%, as
investors favoured lower-quality, more cyclical names. Despite this backdrop,
the Board believes stock selection - adjusted for these style swings - remains
positive which is the key determinant of long term future success.
Earnings and Dividends
Revenue earnings per share rose to 1.80p in the period (2024: 1.56p). To
reflect the increased underlying earnings from the portfolio the Board has
declared a first interim dividend relating to the year ending 31 March 2026 of
0.35p per Ordinary share (2024: 0.3p per share). Additionally, the Board has
also declared a third interim dividend relating to the year ended 31 March
2025 of 0.05p per Ordinary share. Both dividends are payable together on 5
January 2026 to shareholders on the register on 5 December 2025.
Share Buybacks and Treasury Shares
During the period, the Company bought back 30,819,178 Ordinary shares. As a
result the Company held 40,322,099 Ordinary shares in Treasury as at 30
September 2025. The buyback activity has helped the Trust to maintain a
single-figure discount throughout the last six months. Our stated policies on
share buybacks and share issuances are set out in the Annual Report. It is
worth noting that while this activity has raised the stated portfolio turnover
of the Company, the underlying name turnover remains low in line with
Montanaro's long-term investment approach.
Borrowings
At the end of the period, the Company had gearing, net of cash, of 6.1% (31
March 2025: 2.1%). The Company's borrowing facilities are due to mature on 13
September 2026, when they are expected to be renewed.
Regular Tenders
As previously announced on 27 March 2025, the Board has introduced
twice-yearly tender offers to provide shareholders with the opportunity to
realise part of their investment and enhance liquidity. The documentation for
the first Tender Offer was sent to shareholders on 20 October 2025.
Shares will be repurchased at a 5% discount to NAV, with each offer capped at
5% of shares in issue to balance liquidity and protect existing shareholders.
This initiative is in addition to the Company's ongoing share buyback
programme, offering shareholders increased flexibility and complementing the
Company's long-term approach to shareholder value.
Shareholders wishing to participate in the first Tender Offer should complete
and submit their Tender Form to the Company's Registrar Equiniti by 13:00 GMT
on 19 November 2025 to ensure participation in the tender.
The Board
As previously announced, I intend to retire as Chairman and from the Board on
31 December 2025. We are very fortunate that Gordon Neilly has agreed to
assume the role of Chairman. With his extensive experience of the investment
trust sector there can be no better person to lead our Company in the future.
Investor Presentation
Gordon Neilly, non-executive Director and Chairman Designate, and George
Cooke, manager of MESCT and Head of Investments at Montanaro, will provide a
live presentation relating to the publication of the Interim Results via
Investor Meet Company ("IMC") on Tuesday, 4 November 2025 at 11:00 GMT.
The presentation is open to all existing and potential shareholders of the
Company. Shareholders are invited to submit written questions via the platform
in advance of the meeting via the IMC dashboard up until 09:00 GMT on 4
November 2025 or at any time during the meeting.
Investors can sign up to IMC for free and register for the presentation via:
https://www.investormeetcompany.com/companies/montanaro-european-smaller-c-tst-plc/rns
(https://www.investormeetcompany.com/companies/montanaro-european-smaller-c-tst-plc/rns)
(https://www.investormeetcompany.com/companies/montanaro-european-smaller-c-tst-plc/rns)
Outlook
The valuation of European SmallCap continues to look cheap both relative to
its own history and to the wider European market. This is despite SmallCap
modestly outperforming LargeCap over the last one and two years. It may prove
too early to call a decisive turning point and resumption of the longer-term
historical trend of SmallCap outperformance, but the preconditions for it look
increasingly favourable.
After a relatively prolonged period in which the Company's Quality Growth
style has been out of favour, it is natural to ask when this headwind might
abate or reverse. It is impossible to say with precision, but we note that
Growth companies have now recorded their longest and deepest period of
underperformance relative to Value since before the Great Financial Crisis,
while Quality has seen similarly historic drawdowns both in Europe and wider
global markets. It is of course when assets are most out of favour that they
can represent the best long term investment opportunities.
The investment process at Montanaro continues to identify profitable, high
return businesses that are off the beaten track for most investors ("hidden
gems"). The quality of the companies in your portfolio remains as high as ever
(and the Board and manager remain mindful of the risks of style drift).
Montanaro also continues to deepen resources in support of their
long-standing, experienced research team which provides a real competitive
advantage.
It has been a privilege to serve as both a Non-Executive Director and Chairman
of your Company over the last decade, during a period of extraordinary change
for the investment trust sector. I leave it in good hands under the care of my
fellow Directors and the team at Montanaro and we can all look forward to the
future of the Company with great confidence.
Portfolio Summary
Twenty Largest Holdings
As at 30 September 2025
Holding Country Description Value % of Net
£'000 Assets
Kitron Norway Electronics manufacturing services 14,120 5.17%
ATOSS Software Germany Workforce management software 11,441 4.19%
Plejd Sweden Smart lighting controls 10,900 3.99%
Belimo Switzerland Actuators, sensors and valves 10,873 3.98%
MTU Aero Engines Germany Aircraft engine components 10,207 3.74%
NCAB Sweden Printed circuit boards 9,655 3.53%
CTS Eventim Germany Event ticketing solutions 9,460 3.46%
Reply Italy IT consulting services 7,936 2.91%
VZ Holding Switzerland Independent wealth management 7,766 2.84%
ChemoMetec Denmark Cell counters, lab instruments 7,281 2.67%
Merlin Properties Spain Spanish commercial REIT 7,258 2.66%
Kardex Switzerland Automated storage solutions 7,220 2.64%
Sectra Sweden Medical imaging and cybersecurity 6,771 2.48%
AAK Sweden Specialty vegetable oils 6,758 2.47%
Brembo Netherlands Automotive braking systems 6,668 2.44%
Carel Italy HVAC/R controls, humidification 6,537 2.39%
Viscofan Spain Sausage casings manufacturer 6,534 2.39%
IMCD Netherlands Specialty chemical distribution 6,529 2.39%
Melexis Belgium Automotive sensors 6,449 2.36%
Tobii Dynavox Sweden Assistive communication devices 6,321 2.32%
Twenty Largest Holdings 166,684 61.02%
Geographical Analysis
As at 30 September 2025
Source: Juniper Partners Limited
Sector Analysis
As at 30 September 2025
Source: Juniper Partners Limited
Interim Management Report
The important events that have occurred during the period under review and the
key factors influencing the financial statements are set out in the Chairman's
Statement above.
Statement of Principal Risks and Uncertainties
Most of the principal risks that could threaten the Company's objective,
strategy, future returns and solvency are market related and comparable to
those of other investment trusts investing primarily in quoted securities. The
principal risks faced by the Company are investment and strategic, gearing,
financial, discount volatility, regulatory, operational, cyber security, ESG
and manager risks. These risks and the way in which they are mitigated are
described in more detail under the heading 'Principal and Emerging Risks and
Uncertainties and Risk Mitigation' within the Business Model and Strategy
section on pages 19 to 22 of the Company's Annual Report for the year ended 31
March 2025. The Company's principal risks and uncertainties have not changed
materially since the date of that report and are not expected to change
materially for the remaining six months of the Company's financial year.
Related Party Transactions
Related party transactions are disclosed in note 13 below. There have been no
material changes to the related party transactions described in the last
Annual Report.
Going Concern
The Directors are satisfied that the Company has sufficient resources to
continue in operation for the foreseeable future and for a period of at least
12 months from the date of this report. Accordingly, they continue to adopt
the going concern basis in preparing the condensed financial statements.
Directors' Responsibility Statement in respect of the Half-Yearly Report
We confirm that to the best of our knowledge:
· the condensed set of financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' and give a true and fair
view of the assets, liabilities, financial position and profit or loss of the
Company;
· the Interim Management Report includes a fair review of the
information required by the Disclosure Guidance and Transparency Rule ('DTR')
4.2.7R, being an indication of important events that have occurred during the
first six months of the financial year and their impact on the financial
statements;
· the Statement of Principal Risks and Uncertainties shown above is
a fair review of the information required by DTR 4.2.7R; and
· the Chairman's Statement, together with the condensed set of
financial statements, include a fair review of the information required by DTR
4.2.8R, being related party transactions that have taken place in the first
six months of the financial year and that have materially affected the
financial position or performance of the Company during the period, and any
changes in the related party transactions described in the last Annual Report
that could do so.
The Half-Yearly Report and Accounts were approved by the Board and the above
responsibility statement was signed on its behalf by:
R M CURLING
Chairman
30 October 2025
Condensed Income Statement (unaudited)
for the six months to 30 September 2025
Six months to Six months to Year to
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 (audited)
£'000
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments at
fair value through profit or loss - 33,015 33,015 - (50) (50) - (5,074) (5,074)
Exchange (losses)/gains - (776) (776) - 61 61 - (52) (52)
Revenue
Investment income 3 4,365 - 4,365 4,386 - 4,386 5,182 - 5,182
Total income 4,365 32,239 36,604 4,386 11 4,397 5,182 (5,126) 56
Expenditure
Management expenses 4 (385) (716) (1,101) (431) (800) (1,231) (865) (1,608) (2,473)
Other expenses (456) - (456) (370) - (370) (761) - (761)
Total expenditure (841) (716) (1,557) (801) (800) (1,601) (1,626) (1,608) (3,234)
Return before finance costs and taxation 3,524 31,523 35,047 3,556 (6,734) (3,178)
3,585 (789) 2,796
Finance costs (151) (283) (434) (85) (159) (244) (183) (340) (523)
Return before taxation 3,373 31,240 34,613 3,500 (948) 2,552 3,373 (7,074) (3,701)
Taxation (475) - (475) (547) - (547) (536) - (536)
Return after taxation 2,898 31,240 34,138 2,953 (948) 2,005 2,837 (7,074) (4,237)
Return per share 5 1.80p 19.43p 21.23p 1.56p (0.50p) 1.06p 1.50p (3.75p) (2.25p)
The total column of this statement represents the Company's Income Statement
and Statement of Comprehensive Income, prepared in accordance with UK-adopted
International Accounting Standards in conformity with the Companies Act 2006.
The supplementary revenue return and capital return columns are both prepared
under guidance published by the AIC.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
Condensed Balance Sheet (unaudited) as at 30 September 2025
Note As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
(audited)
Non-current assets
Investments held at fair value through profit or loss 7 288,582 318,654 296,829
Current assets
Trade and other receivables 2,866 812 1,592
Cash and cash equivalents 2,380 2,804 14,816
5,246 3,616 16,408
Total assets 293,828 322,270 313,237
Current liabilities
Trade and other payables (1,484) (983) (839)
Revolving credit facility 8 (10,477) - (12,560)
Interest-bearing bank loan 8 (8,701) - -
(20,662) (983) (13,399)
Non-current liabilities
Interest-bearing bank loan 8 - (8,267) (8,330)
Total liabilities (20,662) (9,250) (21,729)
Net assets 273,166 313,020 291,508
Capital and reserves
Ordinary share capital 9 9,471 9,471 9,471
Share premium account 44,057 44,057 44,057
Capital redemption reserve 2,212 2,212 2,212
Capital reserve 211,027 251,573 230,745
Revenue reserve 6,399 5,707 5,023
Total shareholders' funds 273,166 313,020 291,508
Net asset value per share 10 183.2p 165.2p 162.0p
Condensed Statement of Changes in Equity (unaudited)
for the six months ended 30 September 2025
Share capital Share premium account Capital redemption Capital reserve Revenue reserve Total
£'000 £'000 reserve £'000 £'000 £'000
£'000
As at 1 April 2025 9,471 44,057 2,212 230,745 5,023 291,508
Return after taxation - - - 31,240 2,898 34,138
Dividends paid - - - - (1,522) (1,522)
Share buybacks - - - (50,958) - (50,958)
Balance at 30 September 2025 9,471 44,057 2,212 211,027 6,399 273,166
for the six months ended 30 September 2024
Share capital Share premium account Capital redemption Capital reserve Revenue reserve Total
£'000 £'000 reserve £'000 £'000 £'000
£'000
As at 1 April 2024 9,471 44,057 2,212 252,521 4,459 312,720
Return after taxation - - - (948) 2,953 2,005
Dividends paid - - - - (1,705) (1,705)
Balance at 30 September 2024 9,471 44,057 2,212 251,573 5,707 313,020
for the year ended 31 March 2025 (audited)
Share capital Share premium account Capital redemption Capital Reserve Revenue reserve Total
£'000 £'000 reserve £'000 £'000 £'000
£'000
As at 1 April 2024 9,471 44,057 2,212 252,521 4,459 312,720
Return after taxation - - - (7,074) 2,837 (4,237)
Dividends paid - - - - (2,273) (2,273)
Share buybacks - - - (14,702) - (14,702)
Balance at 31 March 2025 9,471 44,057 2,212 230,745 5,023 291,508
Condensed Statement of Cash Flows (unaudited)
for the six months ended 30 September 2025
Six months to Six months to Year to
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 (audited)
£'000
Net cash inflow from operating activities 42,654 5,515 20,526
Net cash outflow from financing activities (55,185) (2,792) (5,744)
(12,531) 2,723 14,782
Exchange gains/(losses) 95 (161) (208)
(Decrease)/increase in cash and cash equivalents (12,436) 2,562 14,574
Reconciliation of profit before finance costs and taxation to net cash inflow
from operating activities
Return before taxation 34,613 2,552 (3,701)
(Gains)/losses on investments held at fair value (33,015) 50 5,074
Exchange losses/(gains) 776 (61) 52
Finance costs 434 244 523
Withholding tax (475) (567) (557)
Purchases of investments (6,458) (12,113) (22,379)
Sales of investments 46,943 15,308 41,415
Changes in working capital and other non-cash items (164) 99
102
Net cash inflow from operating activities 42,654 5,515 20,526
Notes to the Accounts (unaudited)
1. The condensed unaudited financial statements have been prepared in
accordance with International Financial Reporting Standard ('IFRS') IAS 34
'Interim Financial Reporting' and the accounting policies set out in the
statutory accounts of the Company for the year ended 31 March 2025. The
condensed financial statements do not include all the information required for
a complete set of IFRS financial statements and should be read in conjunction
with the financial statements of the Company for the year ended 31 March 2025,
which were prepared in accordance with the requirements of the Companies Act
2006 and in accordance with UK-adopted international accounting standards.
2. Earnings for the first six months should not be taken as a
guide to the results for the full year.
3. Income for the period is derived from:
Six months to Six months to Year to
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 (audited)
£'000
Overseas dividend income 4,335 4,353 5,102
Exchange losses (6) (6) (4)
Other income 36 39 84
Total 4,365 4,386 5,182
4. Management fee
As set out in the Company's Annual Report, the management fee is linked to the
size of the Company, as follows:
· 0.825% p.a. of the amount of the Company's market
capitalisation up to £500 million;
· 0.70% p.a. of the amount of the Company's market
capitalisation between
£500 million and £750 million; and
· 0.65% p.a. of the amount of the Company's market
capitalisation above £750 million.
The management fee is payable quarterly in arrears.
5. Return per share
Earnings per share is based on a weighted average of 160,779,892 Ordinary
shares in issue during the period (year ended 31 March 2025: 188,678,279 and
six months ended 30 September 2024: 189,427,600), excluding those shares
bought back and held in treasury.
6. Dividends
The Board has declared a first interim dividend relating to the year ending 31
March 2026 of 0.35p per Ordinary share (2024: 0.3p per share). Additionally,
the Board has also declared a third interim dividend relating to the year
ended 31 March 2025 of 0.05p per Ordinary share. Both dividends are payable on
5 January 2026 to shareholders on the register on 5 December 2025. In
accordance with IFRS, these dividends have not been recognised in these
financial statements.
A second interim dividend relating to the year ended 31 March 2025 of 0.96p
per Ordinary share was paid during the six months to 30 September 2025 and
amounted to £1,522,000.
7. Investments at fair value through profit or loss
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
(audited)
Opening book cost 195,905 193,353 193,353
Holding gains 100,924 128,323 128,323
Opening fair value 296,829 321,676 321,676
Purchases at cost 6,881 12,333 22,379
Sales - proceeds (48,143) (15,305) (42,152)
Gains/(losses) on investments 33,015 (50) (5,074)
Closing fair value 288,582 318,654 296,829
Closing book cost 186,310 195,943 195,905
Holding gains 102,272 122,711 100,924
Closing valuation 288,582 318,654 296,829
8. Borrowings
Revolving credit facility
Six months to Six months to Year to
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
(audited)
Opening balance 12,560 856 856
Repaid loan (8,507) (859) (859)
Draw down loan 5,903 - 12,539
Foreign currency exchange gain 521 24
3
Closing balance 10,477 - 12,560
The Company has a three-year secured revolving credit
facility with ING Bank N.V. ('ING') which will mature on 13 September 2026.
Drawdowns from the facility are charged at margin over the relevant EURIBOR
rate. As at 30 September 2025, €12.5 million (£10,477,000) of the facility
was drawn (30 September 2024: nil, 31 March 2025: €15 million
(£12,560,000), at a rate of 3.68%.
Interest bearing bank loans
Six months to Six months to Year to
30 September 30 September 31 March 2025
2025 2024 (audited)
£'000 £'000 £'000
Opening balance 8,330 8,473 8,473
Amortisation of set-up costs 15 16 33
Non-cash foreign currency movements 356 (222) (176)
Closing balance 8,701 8,267 8,330
The Company has a €10 million three year secured loan at a fixed rate of
5.105% per annum with ING Bank N.V. ('ING'). This loan will mature on 13
September 2026.
The carrying value of the balances above approximates to fair value.
9. Share capital
30 September 2025 31 March 2025
(unaudited) (audited)
Number of shares £'000 Number of shares £'000
Ordinary shares of 5p
Ordinary shares in issue at the beginning of the period 179,924,679 8,996 189,427,600 9,471
Ordinary shares bought back to treasury during the period (30,819,178) (1,541) (9,502,921) (475)
Ordinary shares in issue at the end of the period 149,105,501 7,455 179,924,679 8,996
Treasury shares (Ordinary shares 5p)
Treasury shares in issue at the beginning of the year 9,502,921 475 - -
Ordinary shares bought back to treasury during the year 30,819,178 1,541 9,502,921 475
Treasury shares in issue at the end of the year 40,322,099 2,016 9,502,921 475
Total Ordinary shares in issue and in treasury at the end of the year 189,427,600 9,471 189,427,600 9,471
10. Net Asset Value per Ordinary Share
The NAV per Ordinary Share was based on 149,105,501 Ordinary shares in issue
at the end of the period (31 March 2025: 179,924,679 and 30 September 2024:
189,427,600), excluding those shares bought back and held in treasury. As at
30 September 2025, there were 40,322,099 Ordinary shares held in treasury (31
March 2025: 9,502,921 and 30 September 2024: nil).
11. Fair Value Hierarchy
The Company measures fair values using the following fair value hierarchy that
reflects the significance of the inputs used in making the measurements.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant assets as follows:
· Level 1 - valued using quoted prices unadjusted in active markets
for identical assets or liabilities.
· Level 2 - valued by reference to valuation techniques using
observable inputs for the asset or liability other than quoted prices included
within Level 1.
· Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data for the asset or
liability.
The tables below set out fair value measurements of financial instruments as
at the period end, by the level in the fair value hierarchy into which the
fair value measurement is categorised.
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
30 September 2025
Investments 288,582 - - 288,582
30 September 2024
Investments 318,654 - - 318,654
31 March 2025 (audited)
Investments 296,829 - - 296,829
There were no transfers between levels during the period ended 30 September
2025 (year ended 31 March 2025 and period ended 30 September 2024: None).
Other aspects of the Company's financial risk management objectives and
policies are consistent with those disclosed in the financial statements, as
at and for the year ended, 31 March 2025.
12. Rates of exchange (to sterling)
30 September 30 September 31 March
2025 2024 2025
(audited)
Danish Krone 8.55 8.95 8.90
Euro 1.15 1.20 1.19
Norwegian Krone 13.42 14.10 13.56
Swedish Krona 12.65 13.58 12.96
Swiss Franc 1.07 1.13 1.14
13. Related parties
The following are considered related parties: the Board of Directors and the
Manager. The Directors of the Company received fees for their services and
dividends from their shareholdings in the Company as outlined below.
The amount charged by the Manager during the period was £1,101,000 (six
months to 30 September 2024: £1,231,000; year to 31 March 2025: £2,473,000).
At 30 September 2025, the amount due to the Manager, included in creditors,
was £543,000. The existence of an independent Board of Directors demonstrates
that the Company is free to pursue its own financial and operating policies
and therefore, under the AIC SORP, the Manager is not considered to be a
related party.
Directors' emoluments
At 30 September 2025, the Board consisted of four non-executive Directors. All
Directors are considered to be independent of the Manager. None of the
Directors has a service contract with the Company. The Chairman receives an
annual fee of £43,000, the Chair of the Audit Committee receives an annual
fee of £37,500 and non-executive Directors receive £31,000 per annum.
At 30 September 2025, the amount outstanding in respect of Directors' fees was
£nil (31 March 2025: £nil).
At 30 September 2025, the interests of the Directors in the Ordinary shares of
the Company were as follows:
30 September 2025 31 March 2025
No. of shares No. of shares
R M Curling 150,000 150,000
C A Roxburgh 70,498 70,169
G Neilly 62,701 62,701
H Williams 6,255 -
No changes occurred in the Directors' interests between 30 September 2025 and
the date of this report.
14. Statutory accounts
These are not statutory accounts in terms of Section 434 of the Companies Act
2006 and have not been audited or reviewed by the Company's Auditor. The
information for the year ended 31 March 2025 has been extracted from the
latest published financial statements and which have been filed with the
Registrar of Companies. The Auditor's report on those accounts was not
qualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report and did not
contain statements under section 498 (2) or (3) of the Companies Act 2006. No
statutory accounts in respect of any period after 31 March 2025 have been
reported on by the Company's Auditor or delivered to the Registrar of
Companies.
Alternative Performance Measures ("APMs")
The Company uses the following APMs:
Share Price and NAV Returns
Capital Return measures the effect of any rise or fall in the share price or
NAV, excluding any dividends paid.
Total Return measures the effect of any rise or fall in the share price or
NAV, plus dividends paid which are reinvested at the prevailing NAV or share
price on the ex- dividend date.
Share Price Return calculations as at 30 September 2025
Share price as at 30 September 2025 168.5 (a)
Share price as at 31 March 2025 148.5 (b)
Share price Capital Return 13.5% ((a-b)/b)
Impact of dividends reinvested 0.6% (Note 1)
Share Price Total Return 14.1%
Note 1 - Share Price impact of dividends reinvested
Dividend PPS Dividend XD date Share price at dividend XD date Impact of dividend reinvested
(a) (b) (a)/(b)
Second interim dividend 0.96 26 June 2025 171.5 0.6%
NAV Return calculations as at 30 September 2025
NAV per share as at 30 September 2025 183.2 (a)
NAV per share as at 31 March 2025 162.0 (b)
NAV Capital Return 13.1% ((a-b)/b)
Impact of dividends reinvested 0.6% (Note 1)
NAV Total Return 13.7%
Note 1 - NAV impact of dividends reinvested
Dividend PPS Dividend XD date NAV at dividend XD date Impact of dividend reinvested
(a) (b) (a)/(b)
Second interim dividend 0.96 26 June 2025 184.1 0.6%
Discount or Premium to NAV
If the share is less than its NAV per share, the shares are trading at a
discount. If the share price is greater than the NAV per share, the shares are
trading at a premium.
As at 30 September 2025, the NAV per share was 183.2p and the share price was
168.5p. The discount is therefore calculated at 8.0%.
Net gearing employed
Unlike open-ended investment companies, investment trusts have the ability to
borrow to invest. This term is used to describe the level of borrowings that
an investment trust has undertaken and is stated as a percentage of
shareholders' funds. The higher the level of borrowings, the higher the
gearing ratio.
Net gearing is calculated as total debt, net of cash and cash equivalents, as
a percentage of the total shareholders' funds.
As at 30 September 2025, interest bearing bank loans were £19,178,000, cash
and cash equivalents were £2,380,000 and net assets were £273,166,000. As at
30 September 2025, net gearing employed was therefore equal to 6.1%.
Ongoing charges (expressed as a percentage)
Ongoing charges are the Company's revenue and capital expenses (excluding
finance costs and certain non-recurring items) expressed as a percentage of
the average daily net assets of the Company during the period.
Ongoing charges calculation
Six months to Six months to Year to
30 September 30 September 31 March
2025 2024 2024
£'000 £'000 £'000
(audited)
Total expenditure (a) 1,531¹ 1,601 3,234
Average daily net assets (b) 292,144 307,401 308,082
Ongoing charges (c = a/b)² (c) 1.0% 1.0% 1.0%
¹ This figure has been adjusted to ensure that one-off expenses incurred in
the six months to 30 September 2025 are not annualised.
² 30 September 2025 and 30 September 2024 figures annualised for comparison
(c = (a/b) x 2).
Glossary of terms
AIFMD
Alternative Investment Fund Managers Directive. Issued by the European
Parliament in 2012 and 2013, the Directive requires that all investment
vehicles in the European Union, including investment trusts, must, with effect
from 22 July 2014, appoint a Depositary and an AIFM. The board of directors of
an investment trust, nevertheless, remains fully responsible for all aspects
of the Company's strategy, operations and compliance with regulations.
AIC
The Association of Investment Companies is the trade body for Closed-end
Investment Companies (www.theaic.co.uk).
Benchmark
This is a measure against which an investment trust's performance is compared.
The benchmark of the Company is the MSCI Europe SmallCap (ex-UK) Index (in
sterling terms). The index averages the performance of a defined selection of
companies listed in European smaller company stock markets and gives an
indication of how those markets have performed in any period.
Closed-end Investment Company
A company, including an investment trust, with a fixed issued ordinary share
capital which is traded on an exchange at a price not necessarily related to
the NAV of the company and where shares can only be issued or bought back by
the company in certain circumstances. This contrasts with an open-ended
investment company, which has units not traded on an exchange but issued or
bought back from investors at a price directly related to the NAV.
Custodian
A specialised financial institution responsible for safeguarding, worldwide,
the listed securities and certain cash assets of the Company, as well as the
income arising therefrom, through provision of custodial, settlement and
associated services. The Company's Custodian is Bank of New York Mellon SA/NV
(London branch).
Depositary
Under the AIFMD, the Company must appoint a Depositary, whose duties in
respect of investments, cash and similar assets include: safekeeping;
verification of ownership and valuation; and cash monitoring. The Depositary
has strict liability for loss of any investments or other assets where it has
safekeeping duties. The Depositary's oversight duties include, but are not
limited to, oversight of share buybacks, dividend payments and adherence to
investment limits. The Company's Depositary is The Bank of New York Mellon
(International) Limited.
Dividend
The income from an investment. Some investment trusts pay dividends on a
quarterly or monthly basis. The Company currently pays dividends twice a year.
Gearing
Gearing is calculated as total liabilities less current assets divided by net
assets.
International Accounting Standards
UK-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006.
Investment Manager
The Company's Investment Manager is Montanaro Asset Management Limited.
Investment Trust
A closed-end investment company which satisfies the requirements of Section
1158 of the Corporation Tax Act 2010. Companies which meet these criteria are
exempt from having to pay tax on the capital gains they realise from sales of
the investments within their portfolios.
Leverage
As defined under the AIFMD rules, Leverage is any method by which the exposure
of an AIF is increased through borrowing of cash or securities or leverage
embedded in derivative positions. Leverage is broadly equivalent to Gearing,
but is expressed as a ratio between the assets (excluding borrowings) and the
net assets (after taking account of borrowings). Under the gross method,
exposure represents the sum of the Company's positions after deduction of cash
and cash equivalents, without taking account of any hedging or netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of cash and cash equivalents and after certain hedging and netting
positions are offset against each other.
Marked to Market
Accounting for the fair value of an asset or liability that can change over
time and reflects its current market value rather than its book cost.
Market Capitalisation
The stock market value of a company as determined by multiplying the number of
shares in issue, excluding those shares held in treasury, by the market price
of the shares.
Net Asset Value ("NAV") per Ordinary Share
This is calculated as the net assets of an investment trust divided by the
number of shares in issue, excluding those shares held in treasury.
Net Assets (or Shareholders' Funds)
This is calculated as the value of the investments and other assets of an
investment trust, plus cash and debtors, less borrowings and any other
creditors. It represents the underlying value of an investment trust at a
point in time.
Net Gearing
Net Gearing is calculated as total debt, net of cash and cash equivalents, as
a percentage of the total shareholders' funds.
Ordinary Shares
The main type of equity capital issued by conventional investment trusts.
Shareholders are entitled to their share of both income, in the form of
dividends paid by the investment trust, and any capital growth. The Company
has only Ordinary shares in issue.
Portfolio Turnover
Calculated using total sales proceeds as a percentage of the average monthly
net assets during the period, annualised.
Related Party Transactions
Under the UK Listing Rules, the Manager is regarded as a related party of the
Company.
Share Price
The value of a share at a point in time as quoted on a stock exchange. The
shares of the Company are quoted on the Main Market of the London Stock
Exchange.
SORP
Statement of Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" issued by the AIC.
Total Assets
This is calculated as the value of the investment and other assets of an
investment trust, plus cash and debtors.
Montanaro European Smaller Companies Trust plc
Registered in Scotland No. SC074677
An investment company as defined under section 833 of the Companies Act 2006
Directors Registered Office
R M Curling (Chairman) 28 Walker Street
G Neilly Edinburgh EH3 7HR
C A Roxburgh
H Williams
Principal Advisers
AIFM and Investment Manager Depositary
Montanaro Asset Management Limited The Bank of New York Mellon (International) Limited
53 Threadneedle Street One Canada Square
London EC2R 8AR London E14 5AL
Tel: 020 7448 8600
enquiries@montanaro.co.uk (mailto:enquiries@montanaro.co.uk)
www.montanaro.co.uk (http://www.montanaro.co.uk/)
Company Secretary and Administrator Custodian
Juniper Partners Limited Bank of New York Mellon SA/NV
28 Walker Street, One Canada Square
Edinburgh EH3 7HR London E14 5AL
Tel: 0131 378 0500
Contact: cosec@junipartners.com
Auditor Registrar
PricewaterhouseCoopers LLP Equiniti Limited
Atria One Aspect House,
144 Morrison Street Spencer Road, Lancing
Edinburgh EH3 8EX West Sussex BN99 6DA
Stockbroker Registrar's Shareholder Helpline
Cavendish Tel: 0371 384 2030*
One Bartholomew Close
London EC1A 7BL *Lines are open 8.30am to 5.30pm, Monday to Friday, excluding UK public
holidays
Sources of Further Information
Information on the Company, including this Half-Yearly Report is available on
the Company's website: https://montanaro.co.uk/trust/montanaro-
(https://montanaro.co.uk/trust/montanaro-) european-smaller-companies-trust/
(https://montanaro.co.uk/trust/montanaro-european-smaller-companies-trust/)
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FDAFMSEISELS
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Montanaro European Smaller Companies Trust
See all newsREG - MonEuroSmllCosTst - Transaction in Own Shares
AnnouncementREG - MonEuroSmllCosTst - Net Asset Value(s)
AnnouncementREG - MonEuroSmllCosTst - Transaction in Own Shares
AnnouncementREG - MonEuroSmllCosTst - Net Asset Value(s)
AnnouncementREG - MonEuroSmllCosTst - Total Voting Rights
Announcement