MTU Montanaro Uk Smaller Companies Investment Trust Plc

Montanaro UK Smaller Companies Investment Trust Plc

(Incorporated in England and Wales)

Company Number: 03004101                                                                                                                                        

ISIN: GB00BZ1H9L86             

LEI: 213800UDDXXTXIF29P85

('Montanaro UK Smaller Companies Investment Trust', or the 'Company')

17 June 2024

Montanaro Uk Smaller Companies Investment trust PLC

2024 ANNUAL RESULTS ANNOUNCEMENT

and

notice of annual general meeting

Montanaro UK Smaller Companies Investment Trust PLC announces its annual results for the year ended 31 March 2024 and the publication of its annual report and accounts for the same period, which includes the notice of its 2024 annual general meeting.

HIGHLIGHTS

For the year ended 31 March 2024

Performance

Sources: Deutsche Numis, Bloomberg, Association of Investment Companies ("AIC"), Montanaro Asset Management Limited ("MAM")

¹ Details provided in Alternative Performance Measures on pages 62 to 63 of the Annual Report.

² The Benchmark is a composite index with the Deutsche Numis Smaller Companies Index (excluding investment companies) ("NSCI") used since 1 April 2013.

HOW TO INVEST

The Board has dedicated a great deal of time to make MUSCIT readily available to all investors. MUSCIT has continued to grow its presence across the UK's investment platforms. We are delighted to see a steady increase in MUSCIT's retail following.

Together with Montanaro Asset Management, we have appointed Marten & Co to provide sponsored research. The latest report published in June 2023 is available here: https://quoteddata.com/research/montanaro-uk-smaller-companies-a-coiled-spring-qd/

.

For further details about how to invest, please refer to the website: https://montanaro.co.uk/trust/montanaro-uksmaller-companies-investment-trust/

CHAIRMAN'S STATEMENT

I am pleased to present the twenty-ninth annual report of MUSCIT for the year ended 31 March 2024.

Results

In the year to 31 March 2024, the Net Asset Value ("NAV") of MUSCIT returned 8.3% (with dividends reinvested). In comparison, our benchmark, the Deutsche Numis Smaller Companies (excluding investment companies) Index (the "NSCI") gained 9.0%. During the same period, the share price of MUSCIT returned 0.7% (with dividends reinvested) as the discount widened from 8.3% to 15.1%. Compared with the NSCI including AIM, MUSCIT's NAV outperformed by c5%.

Since its inception in 1995, the Company has delivered a cumulative NAV total return of 876%, significantly outperforming the composite benchmark which delivered a return of 555%.

Dividends

The Company's investment objective has always been to generate capital growth. This remains unchanged. Dividends are now paid each quarter equivalent to 1% of the Company's NAV on the last business day of the preceding financial quarter, being the end of March, June, September and December.

During the financial year, the Company paid four quarterly dividends amounting to a total of 4.60p, equivalent to 4.4% of the share price at the start of the year and 4.6% of the share price at the end of the period. MUSCIT remains one of the highest yielding UK small cap investment trusts.

The Company holds substantial reserves which are available for distribution in future.

Discount

In common with many other investment companies, over the the last financial year, the discount of MUSCIT's share price to NAV, widened from 8.3% to 15.1%. The average discount for the year was 11.6%.

The Board and the Manager have worked hard to make MUSCIT attractive to private clients, including implementing a five-for-one share split in 2018; introducing the new dividend policy; reducing costs; and increasing the focus on marketing. These initiatives continue to bear fruit as more and more retail investors appear on the share register. This should help to reduce discount volatility in the shares of MUSCIT.

Gearing

The Board is responsible for setting the Company's gearing strategy and approves the arrangement of any gearing facilities. Montanaro Asset Management, the Company's Alternative Investment Fund Manager (the "AIFM"), is responsible for determining the net gearing level within the parameters set by the Board. The ability to issue debt to gear the portfolio is a key feature of investment trusts that we believe offers a strong competitive advantage over open-ended investment funds. Gearing can enhance investment returns to shareholders. The Board strongly encourages active use of the gearing facility by the Manager but delegates the decision about optimum levels to him.

On 17 December 2021, the borrowing facilities with ING Bank were renewed for a period of three years. The interest rate on the £20 million Fixed Rate Term Loan was reduced by approximately 0.2% p.a., which represents a welcome saving for shareholders. Similarly, the £10 million Revolving Credit Facility was renewed with a lower commitment fee.

At 31 March 2024, net gearing was 2.7%, a level that the Manager considered to be appropriate in light of the macroeconomic uncertainty and volatility in financial markets.

Share Buybacks

The Board is responsible for share buybacks which are undertaken at arm's length from the Manager. These are regularly considered by the Board and implemented when considered to be in the best interest of shareholders. No shares were bought back during the period under review.

During the life of MUSCIT, the Company has bought back and cancelled 29% of the shares outstanding.

Board

The Board consists exclusively of independent non-executive Directors with a good balance of skills, experience, diversity and knowledge of the Company and its business.

On 1 January 2024, Yuuichiro Nakajima was appointed as a non-executive Director. Yuuichiro is the founder and managing director of Crimson Phoenix, a specialist cross-border M&A advisory firm, providing advice on Japan-related transactions and a range of corporate strategy initiatives from offices in Tokyo, London and Frankfurt. Yuuichiro spent 10 years with S.G. Warburg (later SBC Warburg) and four years with PricewaterhouseCoopers. For nine years until July 2023, Yuuichiro was a non-executive director of JPMorgan Japan Small Cap Growth & Income plc. We are delighted to welcome such an experienced Director to the Board and he has already made a valuable contribution.

Environmental, Social and Governance ("ESG")

The Board and Montanaro believe there is a strong correlation between how well a business fares on ESG grounds and the value it creates for its shareholders. This is why ESG considerations form an integral part of the Manager's assessment of a company's "quality" and have been fully integrated into the investment process for many years.

The depth of Montanaro's commitment to ESG is perhaps best exemplified by the fact that they are one of the few UK asset managers to be a certified B Corporation - a certification Montanaro have held since 2019. Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability to balance profit and purpose. The certification was renewed for a further three years in 2022. Montanaro's score rose from 81.8 to 105.5 (classified as "outstanding"), demonstrating their commitment to continual improvement.

Please refer to pages 6 and 7 of the Annual Report for more on ESG.

Annual General Meeting

The Company's Annual General Meeting (the "AGM") will be held on Thursday, 25 July 2024 at 12pm at the offices of Montanaro Asset Management, 53 Threadneedle Street, London EC2R 8AR. Shareholders are warmly invited to attend the AGM where, after the formal business has been concluded, there will be an opportunity to meet and ask questions of the Board and the Manager over tea and coffee.

Continuation Vote

We are pleased to report that, at the AGM held on 12 August 2021, over 99% of shareholders voted in favour of continuation of MUSCIT for a further five years. The next Continuation Vote is scheduled to be held in 2027.

Outlook

In recent years, the landscape of the UK stock market has undergone a noticeable transformation, characterised by a gradual shrinkage in its size and scope. One indicator of this trend is the dwindling number of companies quoted on the Main Market. The number of companies in MUSCIT's benchmark, the NSCI, has fallen to c.350 compared to around 1,000 at the turn of the century. The number of those companies traded on AIM has shrunk by 56% since its peak in 2007.

This is, to say the least, a very negative development for the UK as a whole. Historically, the British stock market has been renowned for its diversity and breadth, offering investors a wide array of investment opportunities across various sectors. The UK has been home to many world-leading companies with outstanding management teams and excellent corporate governance. However, the UK equity market has faced numerous challenges: relatively poor performance especially compared to the United States and some other overseas markets, multiple regulatory changes and of course Brexit. As a result, an increasing number of companies have chosen to delist, move abroad or to seek funding from private equity.

The ramifications of this trend extend beyond mere numerical decline, impacting the vibrancy and competitiveness of the UK stock market as a whole. A shrinking market not only reduces the breadth of investment opportunities available to investors but also diminishes the market's role as a catalyst for economic growth and innovation. With fewer companies listed on the stock exchange, there is a risk of reduced liquidity and market depth, potentially deterring international companies from listing in the UK. It makes international investors less interested in investing in the UK and drives our own savers to look overseas. It is a sorry state of affairs when the average UK pension fund holds less than 4% in UK equities, a far cry from 39% back in 2000.

Sadly, for years the UK has been a notable outlier in its absence of support for its domestic stock market compared to other countries with an active investment environment. China has recently been stepping in to support domestic share prices through investments from state institutions, whilst part of the resurgence in the Japanese equity market has been attributed to the Nippon ISA that has been supporting domestic retail flows. Since 2014, France has had its own version of a Stocks & Shares ISA dedicated to supporting domestic and European quoted smaller companies. Investments in these ISAs now stands at over £2 billion.

We were pleased to hear the Chancellor of the Exchequer recently announced plans to introduce a UK ISA. Although this initiative alone is unlikely to revive the UK equity market, it is nonetheless a step in the right direction. The possible re-bundling of research and broker commissions - currently disallowed under the MiFID II regime - could also help encourage retail investors back into the market. There are other avenues to explore in future such as: incentivising companies to list and remain listed by reviewing tax incentives and simplifying listing rules; abolishing Stamp Duty; and addressing the implications for the smaller end of the market of the ever-growing consolidation amongst wealth managers.

There is a silver lining, however. Today's challenging environment presents a compelling opportunity for long-term investors to capitalise on favourable valuations for UK smaller companies. The Board was pleased to see Montanaro Asset Management recently take advantage of this opportunity to increase its own stake in the Company.

ARTHUR COPPLE

Chairman

14 June 2024

Manager's Report

The Attractions of Quoted UK Smaller Companies ('SmallCap')

The key attraction of investing in SmallCap is their long-term record of delivering higher returns to investors than large companies. In the UK, over the last 69 years, this has amounted to an average of 3.1% per annum ("the SmallCap Effect"). £1 invested in UK large companies in 1955 would now be worth £1,357 whereas the same £1 invested in SmallCap would now be worth £9,171 - almost seven times more.

The market for SmallCap is inefficient. While some large companies are analysed by more than 50 brokers, many smaller companies have little or no such coverage. We believe that this makes it easier for those with a high level of internal resources to identify attractive, undervalued and overlooked investment opportunities. This in turn makes it possible to deliver long-term performance over and above that of the benchmark.

Montanaro Asset Management

Montanaro was established in 1991. We have one of the largest and most experienced specialist teams in the UK dedicated exclusively to researching and investing in quoted smaller companies. Our team of thirty-nine includes twelve nationalities and eighteen Analysts and Portfolio Managers, which gives us the breadth of resources to conduct thorough in-house research.

At 31 March 2024, we were looking after around £3.3 billion of client assets.

Investment Philosophy and Approach

We specialise in researching and investing in quoted small companies.

We have a disciplined, two-stage investment process. Firstly, we identify "good businesses" within our investable universe. In the second stage, we determine the intrinsic value of each company to ensure they will make a "good investment" (the two are not always the same).

When we consider that we have identified a good company, it must pass our stringent Quality and Ethical, Social and Governance ("ESG") Checklists and be approved by our Investment Committee before it can be added to our "Approved List". ESG has been integrated in our disciplined investment process for almost two decades. Only the most attractive companies make it on to the Approved List and it is from these that we construct your Portfolio.

Our in-house team of Analysts, who are sector specialists, is one of the largest specialist teams in the country. Utilising their industry knowledge and a range of proprietary screens, they are continually searching for new ideas. With around 1,500 quoted companies in the UK to choose from, we are spoiled for choice.

We look for high quality companies in markets that are growing. They must be profitable; have good and experienced management; deliver sustainably high returns on capital employed; enjoy high and ideally growing profit margins reflecting pricing power and a strong market position; and provide goods and services that are in demand and likely to remain so. We like focused companies that are wellestablished with a long history so that we can see how they perform over different cycles. Ideally, they should deliver selffunded organic growth rather than rely on acquisitions and stick to their core areas of expertise.

Conversely, we avoid those with stretched balance sheets; poor free cash flow generation; incomprehensible or heavily adjusted accounts; unproven or unreliable management; or those which face structurally challenged business models with stiff competition.

We believe that a deep understanding of a company's business model and the way it is managed are essential. We meet or speak to our investee companies on a regular basis, typically after they announce their semi-annual or annual figures. Site visits are particularly useful. They allow us to meet management in situ when they can give us more time and we can talk to more people. Investing in small companies is all about meeting the executive team. It is a privilege for us and where we can add most value.

Management's past track record is examined in detail as we seek to understand their goals and aspirations. In smaller companies, the decisions of the entrepreneurial management can make or break a company (which is why meeting them is so important). We look closely at the board structure; consider the level of insider ownership; and carefully examine remuneration and corporate governance policies.

Once a company has been added to the Portfolio, our Analysts conduct ongoing reviews. We will sell a holding if we believe that the company's underlying quality is deteriorating or if there has been a fundamental change to the investment case or management. We will get things wrong and make mistakes, but we try to learn from them.

In summary, we invest in well managed, focused, high quality, growing companies bought at sensible valuations. We keep turnover and transaction costs low and follow our companies closely over many years. We would rather pay more for a higher quality, more predictable company that can be valued with greater certainty.

ESG

Montanaro became a certified B Corporation in 2019, placing sustainability at its core. This was achieved by meeting verified standards of social and environmental performance, transparency and accountability. It is regarded as one of the toughest sustainability standards to achieve globally. Montanaro recertified for "B Corp" status in 2022 and achieved a score of 105.5, well above the 81.8 originally achieved in 2019 and an achievement of which we are proud.

In 2021, Montanaro was the only UK investment boutique to be invited to join the Glasgow Financial Alliance for Net Zero ("GFANZ") taskforce, chaired by former Bank of England Governor, Mark Carney.

In 2023, we announced our commitment to becoming carbon negative and removing 100% of our historical emissions by 2030. We have partnered with Klimate, a Danish carbon removal specialist. Together, we are building an innovative portfolio of carbon removal projects to achieve our targets. This includes projects such as direct air capture; deep storage bio-oil; ocean kelp; and restorative tree-planting. All will be independently verified to ensure their integrity. We believe that we are the first asset manager in the world to have publicly stated such ambitious goals. We try to be pioneers and to lead by example.

Montanaro's long track record of sustainable investing has always been reflected in the way the Portfolio has been managed. Ethical restrictions mean that we do not invest in companies that generate a significant proportion of sales from products with negative societal impact such as tobacco.

The analysis of ESG factors has long formed part of our definition of a company's "Quality". The analysis of such information allows us to better understand the risks and opportunities that our companies may be exposed to, from factors such as climate change and supply chain challenges. We continue to participate in collaborative engagements. We joined the Farm Animal Investment Risk and Return ("FAIRR") initiative engagement with Cranswick to discuss labour rights. Through discussions with the CFO, we established that the majority of its workforce is directly employed and labour metrics are reported to the Board on a monthly basis, with follow-up reports on actions taken to mitigate problems. We will continue to monitor labour practices at the company but are satisfied with the policies, approach and transparency.

We are pleased that MUSCIT was awarded an 'AA' rating for its ESG credentials by MSCI, the second-best rating out of a possible seven.

In March 2022, Montanaro won "the Best Small & Mid-Cap Sustainable Investment Boutique" award from Ethical Finance. This recognised Montanaro's continuing commitment to sustainable investing within its own business, across the investment industry and in our investment process. We were delighted to receive this award once again in 2024.

Examples of recent investee company engagement

During the year, we continued our ongoing engagement on sustainability with Tristel, the leader in antiseptic wipes used in hospitals. One area in particular that we brought up was the use of plastics in the company's clinical wipes and whether the company could consider recyclable substitutes. We were pleased to hear that Tristel is now working towards fully recyclable packaging, although regulatory requirements still necessitate some plastic use in clinical wipes. Tristel is also putting pressure on suppliers to develop eco-friendly alternatives, indicating a broader shift towards sustainability.

For the past few years, we have also been engaging with Marshalls, the leader in paving slabs and landscaping products, on their net zero carbon initiatives including the development of products aligned with a circular economy. Over the past twelve months, Marshalls has demonstrated significant progress in permanent carbon removal in the manufacturing process of its concrete products. They have also developed a comprehensive climate strategy that includes both mitigation and adaptation efforts, positioning them as leaders in sustainable practices.

We engaged with Diploma, the global supplier of consumable products in seals, controls and healthcare. This was by means of a shareholder consultation on the new remuneration policy, focused in particular on the proposed salary increases for the CEO and CFO. Despite some concerns about the frequency of changes to the remuneration arrangements, we believe that the proposed policy is fair in light of the positive strategic acquisitions made by the company. We voted in favour of the resolution at the AGM, recognizing the critical role of the executive team in Diploma's success.

Finally, we have been pleased with the progress made by Greggs, the restaurant chain best known for its sausage rolls, with respect to their "Greggs Pledge" towards social responsibility. The company has achieved a 10% reduction in food waste through partnerships with the app Too Good to Go, charities and outlet stores in deprived areas. In addition, Greggs has been accredited by the UK's National Equality Standard for their Diversity, Equity and Inclusion policies, which include training for ex-offenders and a charity partnership aiding employment for people with Down's syndrome. Separately, we continue to monitor Greggs' progress on nutrition as part of our membership in the ShareAction Healthy Markets Initiative.

The Portfolio

At 31 March 2024, the Portfolio consisted of 35, high conviction investments of which the top ten holdings represented 46% of the portfolio by value. MUSCIT held 11 companies traded on AIM, representing 21% of the Portfolio by value. Sector distribution within the Portfolio is driven by stock selection. Although weightings relative to the market are monitored, overweight and underweight positions are held based on where the greatest value and upside are perceived to be.

Gearing

The Board is responsible for setting the Company's gearing strategy and approves the arrangement of any gearing facilities. The AIFM is responsible for determining the net gearing level within the parameters set by the Board. At 31 March 2024, gearing stood at 2.7%.

Performance Review

The NAV returned 8.3% (with dividends reinvested) over the year, less than 1% behind the Benchmark. However, compared to the Deutsche Numis Smaller Companies Index (including AIM), MUSCIT outperformed by more than 5%. The discount widened from 8.3% to 15.1% in line with a general widening of discounts in the sector. Since its launch in March 1995, MUSCIT has delivered NAV returns of 8.2% p.a. (including dividends reinvested) and outperformed the benchmark by 1.5% p.a.

Performance Attribution

The largest positive contributors over the period were:

XPS Pensions, leading pension fund consultants and administrators, reported record growth and new clients, winning several awards. The mini budget from Liz Truss in September 2022 caused a dramatic sell-off in gilts, sparking a liability driven investment (LDI) crisis as pension funds were forced to liquidate assets. Demand for their services and advice unsurprisingly increased as a result.

4imprint supplies promotional merchandise - the place to go to if you want, for example, a pen or laptop bag with your company logo on it. During the year, it announced several upgrades to forecasts and ended the year announcing record sales. The share price has risen by 31% over the past twelve months (to March 31st).

Dechra Pharmaceuticals offers pharmaceutical products and services to vets. A long-standing investment mentioned in last year's annual report, it has been acquired by EQT. We are sorry to see it go and feel it makes for a good case study, please see above.

There will always be some investments that do not go as expected. The largest negative contributors over the period were:

Kainos provides IT services primarily to the UK Government to deliver digital transformation programmes. Examples include DVLA, where you can now view driving license records online; updating the MOT system with a new online service; and the Register to Vote on-line system. The other strand to Kainos' business is its partnership with Workday Inc, a $70bn market cap. US-listed software company that provides a cloud-based software system for Finance and HR to large enterprises. With a forthcoming change in Government, investors seem concerned that fewer contracts will be awarded.

Watches of Switzerland, the international retailer of luxury Swiss watches such as Rolex, faced two unexpected disappointments in the year. In August, Rolex bought Bucherer, their distributor in Switzerland. Overnight, Rolex became a competitor for the first time as well as a key supplier, raising questions about Watches of Switzerland's long-term strategy. In addition, this year they surprised investors by announcing a poor Christmas selling season (the UK accounts for over half of sales).

XP Power is one of the world's leading providers of power converter solutions that ensure critical electrical and electronic equipment is powered safely and reliably. There are three divisions: "Industrial Technology" includes analytical instrumentation, testing, industrial printing, smart manufacturing, warehousing and robotics; "Healthcare" includes end products going to patient monitoring and diagnostics, clinical labs, surgical robotics; and "SemiConductors", which can be highly cyclical. The normally defensive Healthcare division saw weak demand due to customer destocking. In addition to a profit warning, the company announced a fund raising of over £40 million to reduce gearing in which MUSCIT participated.

Case Study - Dechra Pharmaceuticals ("Dechra")

Dechra resulted from a management buy-out from Lloyds Chemist in 1997 when they spun-off their veterinary business. Floated in September 2000 at £1.20p per share, it had a market capitalisation of £60 million and was too small for many of the larger financial institutions. It was perfect for MUSCIT. According to the first annual report, in September 2002 we held a stake of 5.3% and were the fourth largest institutional investor.

In November 2001, Ian Page was appointed Chief Executive having started his career as a van driver. Sadly, the Chairman Peter Redfern, who guided Dechra through the MBO to flotation, died in January 2002. I have long argued that investing in SmallCap is all about getting to know the people who manage the businesses. It is an honour and a privilege that Ian and his colleagues have given so much of their time to meeting us to share their ambitions and plans for Dechra. For our part, in a small way, we may have helped by supporting Ian in acquisitions and possibly at times in advice.

Ian and his team grew Dechra from a small company with sales of less than £150 million to an international veterinary pharmaceuticals company with sales of more than £750 million and almost 2,500 employees in 26 countries. They now offer a wide range of products and services to vets: 75% to dogs and cats; pigs and cows 11%; horses 7% and pet foods 5%. Dechra is ranked seventh in the world.

EQT made a bid on 23 June 2023 for £4.46 billion or £38.75 per share, a premium of around 45% and a multiple of 26x EBITDA (earnings before interest, taxes, depreciation, and amortisation). The take-over was completed on 16 January 2024.

If ever you wanted to find a reason for investing in SmallCap, Dechra is it. A small company with little research coverage at first, it was too small for major institutional investors. For many years it was largely unknown, an "undiscovered gem". With an outstanding management team, it became a global market leader and a FTSE-100 company. This is why investing in SmallCap is so exciting.

From the flotation in September 2000 to 12 April 2023, the FTSE-100 rose by 177% and the FTSE-250 by 425%. Dechra has delivered total shareholder returns of 3,471%. Thank you, Ian.

Outlook

The supply chain challenges of recent times appear to be normalising and companies are returning to their past ordering and stock patterns. The period of building up raw materials and finished goods "just in case" appears to be over as companies are coming to the end of a programme of destocking.

Nonetheless, it has been a difficult period for SmallCap.

SmallCap has outperformed LargeCap in every decade after the Second World War with just one exception: the 1990s, which saw five crises over five years including LTCM, the Asian Crisis and a recession. In times of crisis, investors tend to sell SmallCap and seek refuge in cash and liquidity. Although it is still early days in this decade, already we have seen a pandemic and the Ukraine war with all its ramifications.

Assuming there are no more black swan events or geo-political crises, we may be entering a more "normal" period when SmallCap typically does well. If inflation and interest rates continue to fall, investor confidence should return. The big lesson of March 2003 and March 2009 is that sentiment is remarkably fickle and can improve both dramatically and quickly. It is important to be invested before the recovery.

It is customary to write that we look forward to the "future with confidence". Actions speak louder than words: Montanaro Asset Management recently increased its investment in MUSCIT to over 6%, making us one of the larger investors.

CHARLES MONTANARO

14 June 2024

Top 20 Holdings

Twenty Largest Holdings as at 31 March 2024

1.        4imprint - a supplier of promotional merchandise.

2.        Big Yellow - a REIT focused on the self-storage market.

3.        Games Workshop - the largest hobby miniatures company in the world and the owner of the Warhammer brand.

4.        Clarkson - a leading shipping brokerage business.

5.        Marshalls - the UK's leading provider of landscaping products.

6.        discoverIE - a designer and manufacturer of components for electronic applications.

7.        Greggs - the bakery chain.

8.        Cranswick - the leading UK supplier of fresh pork meat products.

9.        XPS Pensions - a leading pensions consulting and administration business fully focused on UK pension schemes.

10.     Porvair - a specialist in industrial filtration and environmental technology.

11.     Kainos - a software developer headquartered in Belfast that specialises in digital transformation.

12.     LondonMetric Property - a REIT involved primarily in the logistics, healthcare and leisure sectors.

13.     Tracsis - a provider of software and consulting services to UK rail and transportation markets.

14.     Bytes Technology - a reseller of computer software in the UK.

15.     Hilton Food - a leading food packing business.

16.     Genuit - a manufacturer of plastic piping systems.

17.     Boku - a mobile payments company.

18.     XP Power - a provider of power solutions.

19.     Globaldata - a data analytics and consulting company.

20.     SThree - a staffing company specialising in life sciences, technology, engineering and data analytics.

All investments are in Ordinary shares.

As at 31 March 2024, the Company did not hold any equity interests comprising more than 3% of any company's share capital.

FURTHER INFORMATION

Montanaro UK Smaller Companies Investment Trust PLC's annual report and accounts for the year ended 31 March 2024 (which includes the notice of meeting for the Company's AGM) will be available today on https://montanaro.co.uk/trust/montanaro-uk-smaller-companies-investment-trust/

It has also been submitted in full unedited text to the Financial Conduct Authority's National Storage Mechanism and is available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism in accordance with DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.