JPMorgan UK Small Cap underperforms benchmark but outlook optimistic

JPMorgan UK Small Cap Growth & Income PLC on Friday said UK smaller companies remain attractively valued as net asset value rose, but return was beaten by the benchmark.

The London-based trust aiming to achieve capital growth from UK-listed smaller companies said net asset value per share rose 2.9% to 373.1 pence as at July 31, from 362.6p a year prior.

NAV total return was 7.2% in the financial year ended July 31, underperforming against its benchmark, the Deutsche Numis Smaller Companies plus AIM index, which had a return of 9.8%.

JUGI said: "The company's underperformance relative to the benchmark was primarily driven by less favourable sector allocation, most notably by the portfolio's relative underweight position in the strongly performing basic materials sector."

The firm added that a "major" detractor was its holding in Cerillion PLC, a London-based provider of software and billing systems to major telecommunications companies. Cerillion "was severely derated by the market on concerns about the timing of the largest ever contract it had announced. While these fears did not materialise, the company has since warned of delayed and deferred orders from other customers. However, we remain holders," JUGI said.

Cerillion in January had announced its largest ever contract, with Oman's Telecommunications, the country's first telecommunications services provider also known as Omantel.

Under the £42.5 million contract with Omantel, Cerillion hosts and manages services over a five-year subscription term.

Cerillion's technology and services supports Omantel's mobile, fixed-line and broadband services.

Meanwhile, JUGI on Friday said that returns were supported by positive stock selection with notable contribution from a number of holdings and and generally positive performance across the portfolio.

JUGI paid a total dividend per share of 14.52p for financial 2026, down 3.5% from 15.04p.

Chair Katrina Hart said: "UK smaller companies remain attractively valued and offer a compelling opportunity set. While near-term uncertainty persists at a market level, the company's active approach, strong long-term track record, and disciplined capital management leave it well positioned to deliver attractive capital growth and a reliable income stream for shareholders."

JUGI shares were 1.5% higher at 352.33 pence each on Friday just before noon in London.

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