REG - MonEuroSmllCosTst - Company update and Director dealings

Montanaro European Smaller Companies TrustAnnouncement

31/03/2026 08:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260331:nRSe6986Ya&default-theme=true

RNS Number : 6986Y  Montanaro European Smaller C.TstPLC  31 March 2026

Montanaro European Smaller Companies Trust PLC

Legal Entity Identifier: 213800CWSC5B8BG3RS21

 

Company update and Director dealings

 

The Board of Montanaro European Smaller Companies Trust plc (the "Company" or
"MESCT") is pleased to provide an update on recent portfolio developments,
corporate activity and the current investment opportunity.

 

Accelerating earnings growth

 

The ongoing reporting season has provided encouraging confirmation of the
strength and resilience of the portfolio. Despite a challenging backdrop of
rising energy prices, higher bond yields and increased geopolitical
uncertainty, a number of portfolio companies have delivered results well ahead
of expectations and upgraded their outlook.

 

Examples include:

 

·    Kitron, a Norwegian electronics manufacturing services provider,
reported record results driven by strong demand in defence and aerospace,
alongside a record order backlog providing good visibility for future
progress;

 

·  Bachem, a Swiss manufacturer of peptides used in innovative medicines,
continues to benefit from robust demand for peptide-based therapies,
delivering strong growth and profitability; and

 

·  Sectra, a Swedish provider of medical imaging and cybersecurity software
to healthcare systems, reported earnings well ahead of expectations, supported
by strong recurring revenue growth and continued margin expansion.

 

The Board and Montanaro Asset Management (the "Manager") believe these
developments are typical examples of the high quality of the businesses within
the portfolio.

 

Consensus forecasts are for c.26% overall earnings growth in 2026 and a
further c.18% in 2027.

 

Well positioned for an uncertain environment

The portfolio remains focused on companies with strong balance sheets, pricing
power and resilient and high recurring revenues. Half the companies in the
portfolio hold net cash which increases resilience in a challenging
macroeconomic environment.

Compelling valuation opportunity

After a prolonged period of underperformance by high-quality growth companies,
MESCT's underlying portfolio has seen a significant de-rating.  Valuations
are now at a significant discount both to long-term averages and relative to
larger companies.

The Board and Manager believe that this presents a compelling opportunity to
invest in a portfolio of high-quality businesses with strong long-term growth
prospects at historically attractive valuations.

Investment by both the Directors and Manager

 

The Directors and a number of senior members of the Manager, have recently
purchased a total of £456,000 in 310,848 ordinary shares in the Company:

 

Directors

Gordon Neilly, Chairman: 67,500 shares

Caroline Roxburgh, Non-Executive Director: 3,397 shares

Hillary Williams, Non-Executive Director: 6,801 shares

 

Manager

George Cooke: 16,650 shares

Cedric Durant des Aulnois: 16,500 shares

Charles Montanaro: 200,000 shares

These purchases demonstrate strong alignment between the Board, the Manager
and shareholders.

Long-term track record

MESCT's investment approach remains unchanged: a disciplined, bottom-up focus
on high-quality, growing European Smaller Companies.  We do not invest in
good businesses; we invest in great businesses.

This philosophy has delivered strong long-term performance.  Since the
Manager's appointment in 2006, the Company has delivered an NAV return of
10.1% p.a. compared with 8.8% p.a. for the benchmark.  Over the past 10
years, the portfolio has delivered a NAV return of 12.2% p.a..

Importantly, the Manager has demonstrated an ability to consistently add value
through sound stock selection over the past five and ten years despite
significant factor headwinds particularly over the last five years in favour
of Value.

Outlook

The combination of strong underlying company fundamentals, accelerating
earnings growth and attractive valuations means that MESCT will benefit from
any normalisation in market conditions.

Gordon Neilly, Chairman of MESCT, commented:

"The recent results season has reinforced our confidence in the quality and
resilience of the companies in the portfolio.  Combined with historically
attractive valuations, we believe this presents a compelling opportunity for
long-term investors.

The recent share purchases by the Board and the Manager reflect our strong
conviction in the Company's strategy and prospects."

 

 

Contacts:

 

Montanaro Asset Management

Investment Manager

020 7448 8600

 

Juniper Partners Limited

Company Secretary

0131 378 0500

 

Cavendish Capital Markets, Corporate Broker

Andrew Worne/Robert Peel

+44 (0)20 7908 6000

 

Camarco, PR Advisers

Ben Woodford/Elfie Kent/Annabel Reed

montanaro@camarco.co.uk (mailto:montanaro@camarco.co.uk)

020 3757 4980

 

Notes to Editors

 

Montanaro European Smaller Companies Trust (LSE: MTE) is a London-listed
investment trust aiming for long-term capital growth by investing in
high-quality, SmallCap companies listed in Europe, particularly within the EU,
Norway, and Switzerland.  Managed by Montanaro Asset Management, MESCT aims
to achieve capital growth by investing in small European quoted companies.
 It seeks to achieve capital growth in excess of its benchmark, the MSCI
Europe SmallCap (ex-UK) Index.

 

In February 2026, the Association of Investment Companies (AIC) listed MESCT
among 68 investment trusts that would have made investors more than £1
million if they had invested the full annual ISA allowance in the same trust
each year.  This is a reflection of the proven and consistent long-term
performance and track record of The Montanaro European Smaller Companies
Trust.

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  UPDFLFFRVSIIVIR



            Copyright 2019 Regulatory News Service, all rights reserved