We didn’t initiate in any new companies this quarter, however we did continue to build up positions in our top picks: We added to Bloomsbury Publishing, which continues to reap the benefits of the highly successful Harry Potter: Illustrated Editions, and Sarah J. Maas’s ‘romantasy’ novel series,  A Court of Thorns and Roses. We also topped up our defence names, Chemring and James Fisher, on the back of a wider sell off in the sector, and added to Rosebank Industries, a manufacturing and engineering holding company with a ‘buy, improve, sell’ strategy. An encouraging call last month with Helios Towers, who run mobile telecom towers in Africa and the Middle East, increased our conviction in the holding and we duly added to our position.   

On the flipside, several companies who have fallen short of our standards have been cut from the fund. We swiftly exited our position in Ashtead Technology following a profit warning due to weaker offshore energy markets and reduced customer activity. Shares have since rallied following an opportunistic takeover rumour from the US private equity firm, Ember Infrastructure Management, which the Board has urged investors to reject. We sold Craneware, the healthcare analytics business, due to our concerns that AI advances may erode their competitive advantage over time. They have subsequently come out with a profit warning. Finally, we sold our position in Trainline when an investigation was launched by the UK Competition and Markets Authority on the integrity of Trainline’s booking fees. While no findings have been made, we felt this was an additional risk to a business already under pressure from regulations, government inconsistency, and competition from Uber’s new train ticket arm.

Our top performer this quarter was Greggs, with shares +26% following excellent Q3 results in August. Could this be the start of a comeback for Britain’s favourite sausage roll business? New product launches, accelerated sales, and upgraded profit expectations have put Greggs back in favour after a tough couple of years. They also announced the appointment of Ben Waldron as CFO, who previously ran the American fresh food supplier, Bakkavor.  

We’ve also seen a great quarter for 4imprint, the personalised stationary company, with shares +23% after management’s FY guidance exceeded market expectations. Our marketing software business, DotDigital, came out with encouraging results in July, propelling shares +18%. The UK housebuilder Bellway benefitted from improved sentiment in the UK housing market and saw shares pick up by +16%. 

Despite strong underlying trading, Games Workshop is -17% for the quarter, mainly due to a valuation derating after a strong first half to the year for the owners of the Warhammer minifigures. Similarly, Raspberry Pi, the circuit board manufacturing company, dropped -17%, despite reporting record revenues and demand in August. They are nonetheless still +127% YTD and bring an excellent semiconductor angle to the fund. Judges Scientific came out with disappointing results last month due to continued delays in China and reduced US research funding. 
 

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note that the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.