As recently as the end of June Nimmo had £6.4 million invested in the firm through the fund. The manager explained that he had dumped Domino’s as it was ‘suffering delays to its German expansion’.
Instead Nimmo has been buying shares in Ocado, which was not held in the portfolio at all in June, following its July tie-up with another supermarket. ‘The announcement of its joint venture with Wm. Morrison puts the business on a sound financial footing, giving it a platform for strong growth,’ observed Nimmo.
Elsewhere in his portfolio Nimmo has initiated a position in Delcam, a provider of computer-aided design software products. ‘The business is well managed, enjoying earnings upgrades and fits the company’s investment process well,’ he said.
The trust has also bought into 4imprint, a producer of branded corporate marketing and promotional products. ‘The industry is highly fragmented and it is expected that the company will use its scale and operating leverage to acquire competitors and grow market share,’ Nimmo commented.
Nimmo’s other recent disposals are scientific equipment manufacturer Oxford Instruments ‘which is experiencing a concerning deterioration in demand’ and data centre Telecity as a result of ‘waning pricing trends’. Nimmo held £3.4 million in the company in June, and £1.7 million in Oxford.
Over the past three years the trust has returned 68% compared with 52% from the Numis Smaller Companies Index excluding Investment Companies.
Nimmo noted that the stockmarket rally this year had left many small-caps looking expensive, so he has turned to firms less dependent on the broader economy.
‘We prefer to focus on those companies in control of their own destinies,’ he stated. ‘Such businesses, particularly those demonstrating durable earnings trends and an ability to generate strong cashflows whatever the market environment, should prove more resilient in the long term.’