QuotedData’s morning briefing 10 March 2025 – MTU, INV, IPU/AFL, SOHO

In QuotedData’s morning briefing 10 March 2025:

• Montanaro UK Smaller Companies (MTU) has published a circular seeking to renew the trust’s repurchase authority (for up to 21,640,007 ordinary shares, or, if fewer, that number of ordinary shares which is equal to 14.99% of MTU’s issued ordinary share capital (excluding treasury shares) at the date of the General Meeting), which includes a notice of a general meeting on 31 March 2025 at MTU’s manager’s offices. [QD comment MR: This follows MTU’s announcement on 5 March 2025 of a £20m buyback for 12% of its issued share capital, which will have used up the majority of its existing authority (click here to read more about that). In light of the recent large repurchase, we think that renewing the repurchase authority makes sense as it will allow the company to continue to manage its discount with repurchases that are NAV accretive for remaining shareholders.]
• The Investment company (INV) is finally implementing a five-for-one share split that its shareholders approved at the fund’s AGM on 31 October 2024. The purpose of the share split is “to facilitate investment by investors with smaller investment amounts and to enhance the share liquidity and marketability”. The share split is expected to become effective on 13 March 2025, with dealings in the new shares commencing at 8am that day. [QD comment MR: Whilst a share split can be beneficial in improving liquidity in the way described, we think that a share price of £3.43 at the time of writing is not a significant obstacle. The bigger issue is the fund’s £6.3m market cap. At this size, there is a very limited audience it can appeal to. To remedy this, it needs to grow and to do that it needs to eliminate its c 11% discount first. However, it cannot do this through repurchases which would just shrink the fund further. We respect the team behind INV’s resilience and hope they can find a way to grow but it’s not an easy puzzle to solve.]
• Invesco Perpetual UK Smaller Companies (IPU) says that Artemis Fund Managers has now been formally appointed as its investment manager. Following this, an application is being made to change the company’s name to Artemis UK Future Leaders Plc and the trust’s ticker will change to AFL once the name change becomes effective. Fund administration, company secretary and custody and depositary services are shifting to Northern Trust and the address of the trust’s registered office will also change to reflect this. The company’s website will also change to: www.artemisfunds.com/futureleaders.
• Social Housing REIT (SOHO) has provided an update on My Space Housing Solutions. It says that the company voluntary arrangement (CVA) proposal of My Space was approved by a creditor vote on 7 March 2025. SOHO’s investment manager Atrato Partners negotiated an option agreement with My Space ahead of the CVA process that allows SOHO to transfer all My Space leases within a 12-month period following the completion of the CVA challenge period. SOHO says that Atrato is already in advanced discussions with alternative Approved Providers and will confirm details of the proposed transfers in due course. Atrato is also actively working with My Space to ensure there is no disruption to residents during this period.