Ennismore European Smaller Companies Fund

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Daily dealing UCITS and Irish Central Bank regulated open-ended investment company with Financial Conduct Authority recognition, registered in Ireland and listed on the Irish Stock Exchange. The Fund size was GBP 249m as at 30th September. Total assets under management by Ennismore Fund Management were GBP 304m. Our funds are hard closed to new investment with the number of shares in issue capped and we have a waiting list of clients that want to invest as and when capacity becomes available through redemptions. If you would like to be included on this please call Eleanor Scott on +44 (0) 20 7368 4219 or email [email protected]. Redemptions can be made through the Administrator in the usual way. The Fund is managed as an absolute return fund with the objective of generating positive returns irrespective of market conditions rather than performing relative to any benchmark index. Index data is provided in the following table as a guide to general equity market conditions.

Ennismore Fund NAV increase

The Fund’s NAV increased by 1.6% in September. Our long book contributed 3.7% and the Fund’s short exposure cost 1.4%.

The largest positive contributions came from Home Retail (0.6%), Sto and JD Sports Fashion (both 0.4%) with all three companies reporting positive trading. Xing also added another 0.4% to NAV in September.

Ennismore Fund’s significant attributions

On the short side there were two significant attributions. Dialight Plc (LON:DIA) (OTCMKTS:DIALF) contributed positively (0.4%) after another downgrade to full year guidance as a result of increased competition in the market for cellphone tower lighting in the US. The fact that this challenge has come from the firm (SPX) that was previously their distributor reflects very low barriers to entry in light fitting manufacturing which we expect to be an issue across all of Dialight’s product lines. Trading on a current year price to earnings ratio of nearly 30 times, and generating almost no cashflow, we believe the shares are significantly over-valued.

Our short position in Avanti Communications Group PLC (LON:AVN) cost the Fund 0.4%. Having issued a major profits warning in July, Avanti’s full year results contained no further negative surprises and the usual bullish management commentary.

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