Interim Management Statement Q1 2024 - Seite 2

After two very difficult years on AIM, we are pleased to be able to finally report a period of positive performance on AIM, which rose by 5.7% in the three months to December 2023. Whilst it is early days and it is arguable that the ‘pivot rally’ went too far too fast, it is encouraging to see some early signs of a return of investor interest in small UK companies. That having been said, investor appetite is yet to trickle down to the smallest companies on AIM and the flow picture for UK equity funds remains very challenging.

Performance

In the 3 months to 31 December 2023, the unaudited NAV per share increased by 0.06 pence from 46.34 pence to 46.40 pence, with no dividends paid in the quarter, giving a total return of +0.1%.

The qualifying investments made a net loss of -0.68 pence per share whilst the non-qualifying investments made a gain of 0.51 pence per share. The adjusting balance was the net of the Marlborough Special Situations Fund, running costs and investment income.

Qualifying Investments

Shares in Zoo Digital (+62.5%, +0.32 pence per share) recovered following agreements to end the actors and screenwriters strikes that severely limited the production of new content for distribution by the streaming platforms. The supply of content to Zoo Digital for localisation was severely constrained and financial performance has remained weak with the company issuing a further downward revision to expectations for the year to 31 March 2024 post period end. Despite this, the company remains optimistic that it will return to substantial growth in its next financial year.

Shares in Learning Technology Group (+26.3%, +0.22 pence per share) started to recover as investor sentiment improved following the publication of results for the 6 months to 30 June 2023 and confirmation that the company continued to trade in line with expectations. This was followed by a full year trading update post period end in which the company confirmed it had met expectations for revenues and profits whilst materially outperforming on cash generation.

The period began with another significant downgrade to Maxcyte’s (+38.0%, +0.21 pence per share) FY23 revenue guidance, reflecting continued weakness in the US life science sector. Subsequently, the company went on to achieve notable milestones with the first regulatory approvals in the US and UK for a new gene editing therapy for sick cell disease developed by Vertex and Crispr on the company’s flow electroporation platform. The approvals triggered the payment of a large milestone and will generate future royalty payments. As a result, the company was able to upgrade FY23 guidance very substantially, reversing a significant amount of previous downgrade. Alongside this, the company announced the retirement of long-term CEO Doug Doerfler.