Annual Financial Report

LEI: 21380048Q8UABVMAG916

MITON UK MICROCAP TRUST PLC
(the "Company")

2024 Annual Results, Dividend announcement and Notice of Annual General Meeting

Miton UK Microcap Trust plc ("MINI" or the "Trust") announces its annual results for the year ended 30 April 2024 and the publication of its annual report and accounts for the same period, which includes the notice of its 2024 Annual General Meeting.

SUMMARY OF RESULTS

	Year to 30 April 2024	Year to 30 April 2023
Total net assets attributable to equity shareholders including fair value of warrants (£000)	43,297	60,754
Statutory NAV including fair value of warrants*	56.29p	64.20p
Adjusted NAV per Ordinary Share*	55.79p	64.20p
Share price (last close)	50.50p	59.50p
Discount to Adjusted NAV*	(9.48)%	(7.32)%
Investment income	£0.9m	£0.8m
Revenue return per Ordinary Share	0.09p	0.03p
Total return per Ordinary Share including value of warrants	(9.17)р	(28.93)p
Ongoing charges#*	1.99%	1.72%
Ordinary Shares in issue	76,923,603	94,638,561

*Alternative Performance Measure ("APM"). Details provided in the Glossary of the Annual Report. The Adjusted NAV is the Statutory NAV presented in the financial statements adjusted to exclude the fair value of the warrants held by the Trust

#The ongoing charges are calculated in accordance with AIC guidelines.

CHAIRMAN'S STATEMENT

The report covers the full year to 30 April 2024, a period which was, in football parlance, a game of two halves. In the first half to end of October 2023, the Trust's Adjusted Net Asset Value ("Adjusted NAV") fell by 15.5%, from 64.20p to 54.10p. The second half saw a tentative recovery with the Adjusted NAV rising by 3.1% to 55.79p. This somewhat anaemic return was greatly outpaced by other indices, as local selling was offset hardly at all by few corporate buybacks within microcaps, and which led to UK-quoted microcap valuations declining even further. Over the period as a whole, therefore, the Trust's Adjusted NAV fell 12.9%, compared to a rise in the Deutsche Numis Smaller Companies 1000 Index of 7.2%. The vast majority of UK microcaps were already standing on unusually low valuations even prior to their share price weakness over this past year. The low average Price to Book of holdings in the portfolio highlights the value to be found in owning shares in the Trust.

Earnings and Dividends

Earnings for the year, after costs, were 0.09p per share (2023: 0.03p) on the revenue account. Earnings on the capital account consisted of a loss of 9.26p per share (2023: loss of 28.96p). Earnings on the revenue account remain depressed as microcap companies seek to retain cash rather than paying it out in dividends to shareholders. As far as setting the dividend is concerned, the Directors have always given the Manager maximum flexibility to follow which ever course is believed to lead to the best results for our shareholders. As Directors, we regard the dividend as a useful by-product of the investment process but not a target in itself. This year, your Board is recommending a final dividend of 0.09p per ordinary share, reflecting the revenue for the year. Subject to approval by shareholders at the AGM, this will be paid on 25 October 2024 to shareholders on the register on 27 September 2024.

Performance

With the dearth of buying interest in UK microcaps over the last three years, marginal sellers have dominated the direction of share prices. Every excuse in the book has been rolled out for why institutions and individuals should not buy UK equities - a close Scottish referendum, Brexit, four Prime Ministers in five years, the UK's lack of exposure to technology stocks, an egregious 0.5% stamp duty on the purchase of equities not paid by investors in other first world stock markets, the sudden imposition of an additional tax on North Sea oil producers, a major land war in Europe and the ongoing conflict in the Middle East. To add insult to injury, the investment trust sector has been discriminated against by the iniquitous double counting of fees such that wealth managers find real difficulties explaining why they should be buying closed end vehicles for their clients, given the apparently high level of fees.

Given the continuing mergers of wealth managers, the barriers to liquidity are now so high that in order to attract the selector's eye, investment trusts need to have market capitalisations of £1bn+. There are precious few of those around. The Association of Investment Companies (AIC) is trying to get the Financial Conduct Authority (FCA) to reverse the cost disclosure position but the latter does not appear to grasp the urgency, whilst the government seems unable to appreciate the seriousness resulting from the UK falling from its position as the premier global centre for finance. Many large companies are voting with their feet, seeking listings in the US, where valuations are far higher and the climate more benign - even the mighty Shell is contemplating such a move.

At the end of April, for example, it was reported that Coutts & Co. was cutting its UK equity allocation by almost £2bn from 33% to 2%, even below the UK's now feeble 3% weighting in global equity indices. The consequence is that UK equities are almost wholly unloved and, as at the end of April 2024, were trading on 12x forward price earnings ratio vs the world on 17x and the US on 21x, (source: Bloomberg). The Price to Book ratios are even more extreme with the UK on 1.6x, the world on 2.7x and the US on a lofty 4.4x, whilst the UK also offers a meaningfully higher dividend yield at 3.8% than both the US (1.4%) and world markets (2.1%). I thought that the nadir of selling of UK equities was reached a year ago but I was sadly mistaken; as the chart below shows the rate of selling has in fact accelerated. Capitalism abhors a vacuum and the recent high and rising level of corporate take overs of listed companies demonstrates the value to be found in the UK. Canny contrarians are buying UK equities at what appear to be knock down prices.

Prospects

The last three years have been incredibly frustrating for the management teams of numerous UK quoted companies and for our shareholders. UK microcap share prices have steadily declined, even whilst the underlying companies have often continued to deliver results in line with expectations.

Whilst this is disappointing, the Trust was set up because quoted microcaps possess extraordinary upside potential. When microcaps succeed, sometimes their share prices can appreciate very dramatically. We liken this to an option-value upside, where the term of the option is open-ended, and its cost comes almost for free, embedded within the quoted microcap share price.

Currently the media is marvelling because Nvidia has delivered an annualised return of 86% in sterling terms over the last four years. And yet, the Trust's holding in Yü Group (a microcap exemplar), has appreciated at an annualised rate over the same period of 130%. In short, Yü Group's share price has risen some 27-fold, compared with Nvidia which has risen 11-fold.

Furthermore, after Nvidia's rise, it has moved up to a high-expectation valuation (Price to Book of 51.8x), whereas Yü Group is still on a modest valuation - even now its Price to Book is only 6.2x. Thus, Yü Group still retains bags more upside potential, even in the short-term.

Microcap share prices generally have been severely repressed over the last three years, so these abnormally large upsides have been more infrequent. To catch the discerning investor's eye, small stocks have to be exceptional. Yü Group is a good example and is currently one of the multi-baggers in the Company's portfolio.

Hopefully, by the time that you read this, the green shoots in UK equities which started emerging in mid-April, will have blossomed into something more substantial. The UK is now officially out of recession and `animal spirits' are evident. After largely flatlining since 2000, the UK stock market has recently broken out on the upside. Rather similar to the Japanese stock market, we believe this is the start of a new longer-term trend. In our view, the mainstream UK stocks are now set to enter a period when they will outperform their international comparators.

But the greatest upside potential has always lain within UK-quoted microcaps - and they now are starting from shockingly low valuations. Those that succeed from here have the potential to perform so much better than large caps. The old stock exchange adage that `Elephants don't gallop' is normally the rule. If the UK stock market itself may be starting a long-term trend of outperformance, and if UK microcaps outperform the UK majors as they have done historically, then they are set to outperform international comparatives.

In conclusion, it is hard to overstate the scale of the current upside potential for the Miton UK Microcap Trust in absolute terms, as well in the context of other equities internationally.

Share Issuance

As the shares did not trade at a premium to the prevailing Adjusted NAV during the year under report, there were no opportunities to issue shares. We will be seeking approval at the AGM in September 2024 to renew this useful facility. Issuing shares at a premium to Adjusted NAV is to the benefit of all shareholders as it dilutes the fixed charges which the Company bears and thus lowers the Ongoing Charges Figure ("OCF").

Share Redemption

Each year your Directors offer the facility for shareholders to redeem their holdings in part or whole, at or close to the prevailing Adjusted Net Asset Value. The Directors are offering this facility again this year and the timetable is laid out in the annual report. Should the redemption be substantial, then the Directors may take the decision to form a separate redemption pool, as we did last year, and it may take a number of weeks, if not months, to liquidate the pool carefully without disadvantaging the remaining shareholders, or indeed the exiting ones. Thanks to microcaps having been out of favour for almost three years, the Trust has suffered heavy redemptions over each of the last two years, being 13.4% in 2022 and 18.7% in 2023. We have in place an agreement with the Trust's managers, Premier Miton, that they will rebate their ongoing management fee to the extent required for the Trust to maintain an ongoing charges ratio of no more than 2%. The Trust thus has the facility to remain viable at a lower level of market capitalisation than most investors would believe possible. It is also worth noting that Premier Miton's fee is based on the Trust's market capitalisation and not its Adjusted NAV, which, when it is trading at a significant discount, is of material benefit to shareholders.

Board Refreshment

Your Directors have a policy that a non-executive Director should serve for no more than nine years, from the date of first election. A well-structured waterfall of directors' retirements is always difficult when coming after a company has been launched, as directors should retire nine years after the first election by shareholders. Davina Walter will take over from Peter Dicks as Senior Independent Director on 1 May 2024. Louise Bonham will take over from Peter on 1 September 2024 as Chair of the Audit Committee, whilst Peter will be on hand to help with the redemption process and with the interim results until he retires from the Company at the end of December 2024.

Environmental, Social and Governance (ESG) issues

Your Manager follows Premier Miton's responsible investing policy, which is to consider Environmental, Social and Governance issues and actively to engage in the investment process with investee companies, in order to deliver improved outcomes for all stakeholders and to take an active approach to voting on company resolutions at annual general meetings of investee companies. Premier Miton has been a signatory of the UN Principles for Responsible Investment since January 2020, an organisation which encourages and supports its signatories to incorporate ESG factors into investment and ownership decisions. Premier Miton also adopts a banned weapons exclusion and utilises third party data to maintain a list of such companies.

Change of Service Providers

As reported in the interim report, following due process, evidenced by extensive due diligence and interviews, on 4 March 2024, the Trust appointed subsidiaries of Northern Trust as company secretary and registered office, fund administrator and depositary, resulting in considerable savings for shareholders.

Annual General Meeting

The Annual General Meeting of the Trust will be held at 11.30am on Tuesday 24 September 2024 at the offices of Stephenson Harwood, 1 Finsbury Circus, London EC2M 7SH. Your Directors look forward to this opportunity to meet shareholders and especially retail investors, as there are few other opportunities to engage with the latter. Aside from the formal business of the AGM, Gervais Williams and Martin Turner will give a presentation on the Trust's prospects and at the end of proceedings we will be offering a sandwich lunch. We hope that as many shareholders as possible will be able to attend and would encourage those wishing to do so to register their interest via a link that will be available on the Trust's website, www.mitonukmicrocaptrust.com, in the preceding six weeks. There you will also find additional details regarding the Trust including factsheets and a range of regularly updated videos, podcasts and articles.

In conclusion, as I wrote in my last report, the Directors are grateful for your tolerance in holding the Trust's shares over what has been a fairly dismal period and we are hopeful that your patience will be amply rewarded in the not-too-distant future. Two of your Directors added materially to their holdings over the year, demonstrating their confidence in the long term prospects for the Company.

Ashe Windham

Chairman

11 July 2024

INVESTMENT MANAGER'S REPORT

Which fund managers have day-to-day responsibility for the Trust's portfolio?

Since the launch of the Trust in April 2015, the day-to-day management of the Trust's portfolio has consistently been carried out by Gervais Williams and Martin Turner.

Gervais Williams

Gervais joined Miton in March 2011 and is Head of Equities at Premier Miton. He has been an equity fund manager since 1985, including 17 years at Gartmore. He was named Fund Manager of the Year by What Investment? In 2014. Gervais is President of the Quoted Companies Alliance and a member of the AIM Advisory Council.

Martin Turner

Martin joined Miton in May 2011. He and Gervais have had a close working relationship since 2004, with complementary expertise that led them to back a series of successful companies. Martin qualified as a Chartered Accountant with Arthur Anderson and had senior roles and extensive experience at Merrill Lynch and Collins Stewart.

What were the principal stock contributors and detractors in the portfolio over the year to April 2024?

Over the last three years, including throughout the year to April 2024, institutional investors have sought to reduce their holdings of UK equities, so that capital could be invested elsewhere. Hence, there have been persistent sellers of microcap shares that have often outnumbered the buyers, such that most microcap share prices have fallen, even when their prospects remained unchanged.

However, occasionally, the prospects of a quoted microcap improve so significantly that even though its share price might appreciate by many multiples, its valuation still remains relatively modest. With the overhang of quoted microcaps sellers, this outcome has been somewhat more frequent than usual this year. The best example in this period was Yü Group, which appreciated three-fold over the year to April 2024 and yet still stands on an overlooked valuation. Whilst the Trust's holding in Yü Group was trimmed to keep its percentage of the portfolio below 10%, it still appears to have an unusually attractive risk/reward ratio at its current share price. Serabi Gold, a gold mining company in Brazil, was somewhat similar, having appreciated by 130% over the year.

Given the generally unfavourable background, the share prices of portfolio holdings that chose to raise additional capital were often particularly weak. A good example is CyanConnode, a market leader in Indian smart meters. The Trust held this in its portfolio because the Indian government is tendering to install 250 million meters over the coming years. In November 2023, the company raised £2.5m to increase its component inventory, anticipating that this would help it to win a larger proportion of its tenders. Even though CyanConnode has continued to meet market expectations, with the additional share issuance, its share price fell 53% over the year to April 2024. Whilst corporate prospects may have been enhanced by raising additional capital, the holding was the worst detractor in terms of the Trust's Adjusted NAV return this year.

Alongside, there are always a number of portfolio holdings where prospects deteriorate, and which are therefore sold from the portfolio, typically crystalising losses. This year the most significant of these were Cap-XX, Ethernity Networks, FireAngel, Graft Polymer, MusicMagpie, Saietta and Velocys. In addition, the management team of Accrol Group recommended a takeover offer, even though it was only at a modest premium to its share price. They feared global competition setting up in the UK would degrade their profitability.

In a normal year, when buyers and sellers of microcap holdings are in balance, there will always be a number of microcap share prices that appreciate significantly. With microcap transactions being out of balance, however, these were comparatively scarce in the year under review. In addition, even microcaps that excelled did not necessarily appreciate in valuation as much as might be expected. Even so, where valuations of individual holdings moved well above others, these were sold, giving the potential to reinvest capital in other stocks standing on extremely overlooked valuations. For this reason, positions in Corero Network Securities, DX Group, Journeo, Oxford BioDyanmics, React Group and Sureserve were sold during the year.

In summary, with the persistent sellers of microcap shares over the year to April 2024, their share prices have been unusually weak even when their prospects remained unchanged. This is the principal reason why the Adjusted NAV of the Trust fell 12.9% over the year.

What are the main factors that have driven the Trust's returns since it first listed in April 2015?

As highlighted in previous annual reports, the best performing part of the UK stock market since 1955 (the start of the relevant data series) has been the microcap sector.

When the investment universe is narrowed further, solely to include microcaps standing on undemanding valuations (typically determined by low Price to Book ratios), the scale of their outperformance is even more marked. With this background in mind, the Trust's portfolio principally invests in UK-quoted microcaps standing on what we consider to be overlooked valuations at the time of purchase. When these microcaps succeed, their share prices can appreciate by many multiples of the purchase price.

The globalisation trend was already declining when the Trust was set up in April 2015, and we anticipated that it would gradually fade. Whilst economic trends have indeed evolved as expected, governments and central banks have been fearful of unwinding the debt burden, so have adopted unconventional policies to keep the prior stock market status quo in place. This has led to perverse outcomes. Whereas the smaller company effect is near-ubiquitous, recent policy gymnastics have boosted megacap outperformance dramatically. Although this pattern is likely to prove unsustainable over time, it has had the unwelcome side effect of making market conditions for quoted microcaps increasingly hostile since the Trust's listing in April 2015.

Over recent years, the cost of raising additional microcap capital has typically become far more onerous, as investors have become increasingly cautious about committing additional capital to assets that continue to underperform. Thus, quoted microcaps seeking to raise additional capital have either contemplated issuing new shares at a discount to their subnormal valuations or chosen to live without additional capital. While issuing additional capital typically enhances prospects, many microcaps have preferred to grow at a slower pace over recent years rather than issue heavily dilutive new capital. Microcaps that have run out of cash meanwhile have often been obliged to raise new capital irrespective of its dilutive effect. In these cases, the prospective returns for existing shareholders will have been downgraded, other than for those that invested additional capital and therefore maintained their percentage ownership.

For these reasons, over the nine years since issue, the share prices of many UK-quoted microcaps in the Trust's portfolio have suffered a valuation headwind, even amongst those that were successful. Those that disappointed have typically delivered poorer returns than normal.

In spite of these severe microcap headwinds, the Adjusted NAV of the Trust has nevertheless modestly risen since inception in April 2015, and outperformed the return of the Deutsche Numis Alternative Markets Index. Whilst the portfolio does include a list of holdings that have delivered poor returns, there are many others that have generated excellent returns despite the adverse microcap conditions. Further up the market capitalisation scale, conditions have typically been less hostile, which explains why the returns of the comparative indices are generally better than that of the Trust's Adjusted NAV total return. In addition, the returns of larger market capitalisations stocks by definition have larger index weightings, and hence skew the overall return of the comparative indices further upwards when they outperform.

Total returns of the Trust and various comparative indices since launch in April 2015

	%
Deutsche Numis All Share Index	60.8
Deutsche Numis Smaller Companies Index	45.4
Deutsche Numis SC 1000 Index	55.3
Deutsche Numis Alternative Markets Index	12.0
MINI adjusted NAV	16.2

Source: Morningstar

In the light of the substantial decline in the Trust's Adjusted NAV over the last three years, have its longer-term prospects deteriorated?

The period of globalisation can be characterised as favouring `bigness', which may explain why the US stock market has greatly outpaced others over recent decades. During globalisation, the valuations of other exchanges such as the UK have trailed behind the US comparatives. This position is even more extreme within UK-quoted microcaps, where over the last three years valuations have fallen to what we consider to be absurdly low levels.

Over the last decade or so however, the electorate has come to distrust the compromises that come with globalisation. This was evident as long ago as 2016 with the Brexit and Trump votes. Thereafter, the logistics nightmares of the pandemic have made the compromises that come with globalisation all the more prominent, and electoral pressure for change has become more persistent.

Beyond globalisation, policies such as reshoring manufacturing, which tend to boost inflation, are expected to lead to a much more challenging economic outlook. Interestingly, we believe changes like this favour companies funded with risk capital, such as those listed on stock markets, over those principally funded by debt, like private equities. Quoted companies generating cash surpluses (such as those that dominate the UK mainstream stock market) now have the potential to outperform greatly. In this context, we are not surprised that this is the moment when the mainstream UK stock market has broken out of its trading range on the upside. This is all the more significant given that it has done so at a time when numerous local investors have been aggressively reducing their UK equity weightings. Breakouts such as that of the UK tend to bring in new participants from overseas, boosting the outperformance trend further. As local selling moderates and in time ceases, we anticipate the new UK outperformance trend will accelerate further and become persistent.

Furthermore, we also anticipate that market trends will start to favour small cap stocks over large ones, in which the UK exchange is better represented than most other markets. Hence, far from being worried about the Trust's prospects deteriorating after its recent underperformance, we believe its upside potential is now even greater than before, and more immediate. In part, this is due to UK-quoted microcaps standing on absurdly low valuations, but also because we anticipate that the current political and geopolitical trends will favour UK-quoted equities, and most particularly UK-quoted microcaps in future.

Will institutional investors ever return to the UK quoted microcap investment universe?

Inflationary pressures were benign during the period of globalisation, and asset valuations in general rose considerably. In addition, the opening up of international trade also enhanced world growth, so most businesses expanded. Overall, the returns of many assets have been unusually strong during globalisation.

As the favourable pattern persisted over decades, stock market returns were routinely well above inflation, and additional returns from smallcap portfolios became apparently optional for institutions. Indeed, institutions progressively favoured concentrating capital in large and megacap equities because they came with abundant market liquidity. Hence, although quoted smallcaps may have outperformed the majors during globalisation, the commercial returns from all sorts of mainstream assets were so copious that most institutional investors steadily reduced their smallcap participation. The adverse pattern has been most pronounced within the UK-quoted microcap investment universe, where the vast majority of capital is now provided by private investors. Amongst institutional investors, even those with dedicated UK smallcap strategies now routinely disregard quoted companies below a minimum market capitalisation, say, of £150m.

Recent elections have led to a Balkanisation of international relationships, and globalisation is now in retreat. There are fewer opportunities to sell goods across all international geographies, which constrains opportunity for many global businesses. Furthermore, the reshoring of manufactured goods, and greater immigration controls add to inflationary pressures, and hence are also expected to reduce asset valuations. The return on mainstream stock markets by implication may be much poorer in the future. Given that many quoted megacaps are currently standing on incredibly high valuations, many stock markets around the world may fail to deliver a commercial return for many years.

Even if UK-quoted microcaps were to start outperforming very substantially over the coming quarters, we doubt that institutions would immediately crowd into them. However, if the mainstream indices were to fail to deliver a commercial return for a long period, in time we do expect institutional capital to be reallocated into areas that are outperforming.

Number of quoted companies in the UK below and above £150m market capitalisation

	No of Companies
<£150m	538	Combined market capitalisation £14bn
>£150m	468	Combined market capitalisation £2,296bn

Source: Premier Miton

The smallcap investment universe is typically defined as comprising the bottom ten percent of market capitalisations of the overall stock market, so an allocation from the large cap ninety percent, into the smallcap ten percent tends to amplify its performance. Furthermore, as microcaps are typically defined as being the bottom two percent, an allocation from the large and smallcap ninety-eight percent into the microcap two percent can be expected to have an even greater amplification impact on performance. Alongside, as UK mainstream companies have fallen to undemanding valuations during globalisation, and UK-quoted microcaps have fallen to absurdly low valuations, the new outperformance trends have the potential to persist in scale for years.

For all these reasons, we expect UK-quoted microcaps to outperform greatly global large and megacaps, in a new trend that is boosted further by institutional capital being allocated increasingly further down the market capitalisation range. Even a tiny incremental allocation of institutional capital would have a major impact on UK-quoted microcap returns. And as the cost of microcap capital becomes less onerous, we foresee they will enhance their returns yet further through share issuance. Over time, the more that quoted microcaps outperform, the greater will be the willingness of institutional capital to participate. We anticipate something of a virtuous spiral from here, with additional institutional capital allocations being matched by an accelerating pattern of UK-quoted microcap outperformance in a new trend that could last for decades!

What are the prospects for the Trust?

In the sections above, we outline why we believe the current political and geopolitical trends are now set to favour quoted equities and specifically UK-quoted equities from here. In addition, we also outline why we believe market trends will now start to favour smallness over bigness. When these factors are set in the context of UK-quoted microcaps that are currently standing on unusually low valuations, the reasoning for being upbeat about the Trust's prospects should be obvious.

Even after setting out these arguments however, we believe that the full upside potential of the Trust's strategy is still not fully captured. The issue is that investors' expectations are currently framed in the context of a stock market that has become increasingly hostile towards UK-quoted microcaps. Investors may gauge the ultimate upside potential of the Trust with reference to the return from a holding such as Yü Group, whose share price has appreciated 21-fold between first purchase in May/June 2020 and the end of April 2024. This is twice as fast as that of Nvidia for example (by far the best performing US-listed member of the Magnificent Seven over that period) and hence may be assumed to represent a UK-quoted microcap at its best.

And yet, when UK-quoted microcap market conditions are less hostile, microcaps like Yü Group may have even greater upside potential. To repeat, many UK-quoted microcaps currently stand on very overlooked valuations. So, even after Yü Group's astronomical returns, for example, its Price to Book ratio is still only 6.2x, whereas that of Nvidia is over 50x (even though it has delivered lesser, though still stellar, returns). In short, without wishing to debate the relative investment merits of Yü Group versus Nvidia, we believe that if Yü Group's share price were to rise to a valuation that fairly reflects its prospects, it would offer plenty of upside potential from here. As it is, following its recent deal with Shell, Yü Group no longer needs to commit tens of millions of pounds in cash collateral when it hedges the energy price for its customers. With Yü Group's collateral constraints now lifted, it can now take the brakes off its full growth potential and hence a potential valuation that fairly reflects its prospects may now be even greater than it was a few months ago.

The bottom line is that when UK-quoted market conditions become less hostile, we anticipate that the Trust's returns have considerable potential. There was a glimpse of its scale when, over only a fourteen-month period, the Trust's Adjusted NAV rose from 37.28p on 19 March 2020 to 107.5p on 10 May 2021.

Now that the mainstream UK stock market has broken out of its historic trading range on the upside, we believe that local market conditions are improving. Stock market breakouts tend to bring in new participants from overseas, boosting the outperformance trend further and help it become embedded. When institutional capital starts to be allocated further down the market capitalisation range, market conditions within UK-quoted microcaps will normalise again and investors should start to recognise the full potential of the Trust's strategy. The key point is that even tiny increments of institutional capital have the potential to make a giant difference to UK-quoted microcaps market conditions, and hence the scale of their return potential.

In summary, the Trust's strategy seeks to pick out stocks that have the potential to appreciate by many multiples of the original share price, and in our view the prospects for the Trust's UK-quoted microcap strategy are now the best they have been for over thirty years. Enough said.

Gervais Williams and Martin Turner

11 July 2024

PORTFOLIO INFORMATION

As at 30 April 2024

Rank	Company	Sector & main activity	Valuation  £'000	% of net assets
1	Yü Group	Utilities	3,967	9.2
2	MTI Wireless Edge	Telecommunications	1,267	2.9
3	TruFin	Financials	1,238	2.9
4	Serabi Gold	Basic Materials	1,023	2.3
5	CyanConnode Holdings (including warrants)	Telecommunications	889	2.0
6	Zephyr Energy (including warrants)	Energy	859	2.0
7	Supreme	Consumer Staples	834	1.9
8	Braemar	Industrials	774	1.8
9	Concurrent Technologies	Technology	743	1.7
10	UP Global Sourcing Holdings	Consumer Discretionary	732	1.7
Top 10 investments			12,326	28.4
11	Frontier IP Group	Industrials	705	1.6
12	Ingenta	Technology	694	1.6
13	Zoo Digital Group	Technology	691	1.6
14	STM Group	Financials	659	1.5
15	Zinc Media Group	Consumer Discretionary	645	1.5
16	Beeks Financial Cloud	Technology	645	1.5
17	Amaroq Minerals	Basic Materials	645	1.5
18	Andrada Mining	Basic Materials	620	1.4
19	Marwyn Value Investors	Financials	600	1.4
20	Capital	Basic Materials	596	1.4
Top 20 investments			18,826	43.4
21	Savannah Resources	Basic Materials	591	1.4
22	Record Financial Group	Financials	570	1.3
23	Elemental Altus Royalties	Basic Materials	508	1.2
24	Xeros Technology	Industrials	507	1.2
25	CT Automotive Group	Consumer Discretionary	506	1.2
26	Zotefoams	Basic Materials	476	1.1
27	Van Elle Holdings	Industrials	476	1.1
28	Mercia Asset Management	Financials	467	1.1
29	Enteq Technologies	Energy	465	1.1
30	Feedback	Health Care	465	1.1
Top 30 investments			23,857	55.2
Balance held in equity investments (including warrants)			17,435	40.3
Total equity investments			41,292	95.5
Listed Put Option
	UKX - June 2024 5,900 Put		2	0.0
Other net current assets			2,003	4.5
Net assets			43,297	100.0

* Source: Refinitiv. Based on historical yields and therefore not representative of future yields. Includes special dividends where known.

Portfolio as at 30 April 2024

Portfolio exposure by sector (%)	£43.30 million
Basic Materials	17.4
Technology	15.6
Financial Services	12.5
Industrials	10.2
Utilities	10.0
Energy	9.1
Consumer Discretionary	6.1
Telecommunications	5.9
Cash and cash equivalents	4.5
Health Care	4.0
Consumer Staples	2.8
Real Estate	1.9

Actual annual income by sector (%)	£0.64 million
Financial Services	32.9
Industrials	16.2
Telecommunications	10.2
Basic Materials	9.1
Consumer Discretionary	7.2
Technology	5.6
Real Estate	4.8
Energy	4.6
Consumer Staples	4.3
Utilities	3.8
Health Care	1.3

Net asset by asset allocation (%)	£43.30 million
AIM/AQUIS Exchanges	78.7
Main Market	15.6
Cash and cash equivalents	4.5
International Equities	1.2
FTSE 100 Option	0.0

Source: Refinitiv.

DIVIDEND RECOMMENDATION

The Directors have recommended the payment of a final dividend in respect of the year of 0.09 pence per Ordinary Share, payable on 25 October 2024 to shareholders who appear on the register on 27 September 2024. The ex-dividend date will be 26 September 2024.

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the ninth annual general meeting of Miton UK MicroCap Trust plc (the "Company") will be held on 24 September 2024 at 11.30 am at the offices of Stephenson Harwood LLP. The Notice of AGM can be found within the full Annual Report and Accounts.

FURTHER INFORMATION

Miton UK MicroCap Trust plc's Annual Report and Accounts for the year ended 30 April 2024 (which includes the notice of meeting for the Company's AGM) will be available today on https://www.mitonukmicrocaptrust.com/documents/.

It will also be submitted shortly in full unedited text to the Financial Conduct Authority's National Storage Mechanism and will be 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.

Enquiries:

Miton UK MicroCap Trust plc  

Gervais Williams, Martin Turner, Claire Long Tel: [phone]  

Peel Hunt LLP (Broker) 

Liz Yong, Huw Jeremy    Tel: [phone]

---

---