John Moore

The firm’s analysis shows that shares in Scottish companies listed on the FTSE and AIM underperformed against the indexes in the first six months of 2019.

It found that Scottish organisations listed on the main market ended June 2019 +9.50 per cent higher than they started the year, compared to +10.39 per cent across the FTSE All Share.

AIM-listed companies in Scotland were down -7.19 per cent on average, drifting from the AIM All Share index’s +7.07 per cent gain over six months by a considerable margin.

Only four Scottish-based constituents of the FTSE ended the first six months of 2019 lower: STV (-1.98 per cent), Stagecoach (-4.23 per cent), Wood (-10.71 per cent) and John Menzies (-11.33 per cent). The biggest gainers over the same period were packaging firm Macfarlane Group (+33.99 per cent), sausage skin maker Devro (+29.21 per cent), engineering firm Weir Group (+19.14 per cent), and Irn-Bru producer AG Barr (+17.49 per cent).

Scotland’s AIM constituents were dragged down by troubles at fashion retailer Quiz, which lost -46.03 per cent of its value since the turn of the year. The only company’s stock to fall further was IDE Group, which lost -61.95 per cent before its shares were suspended on July 1st.

Among the top Scottish performers on AIM was surveillance systems designer Indigovision, with its shares up +50.87 per cent from the beginning of 2019. Nucleus Financial, the fintech company, and patent attorneys Murgitroyd gained +38.66 per cent and +35.33 per cent respectively.

John Moore, senior investment manager at Brewin Dolphin, said: “The first half of the year highlights that many of Scotland’s AIM-listed companies are going through growing pains. That’s not the end of the world – to help the businesses with real potential break through, investors need to be patient. Rather than being reactive to short-term influences, it underlines why you need to stick with investments for the long-term.

“Sigma Capital and Craneware are good examples of this. While their share prices haven’t done well since the turn of the year, they’ve identified long-term opportunities that, if their respective markets can become more established, could prove very fruitful. Most analysts agree the private rented sector will grow significantly over five to ten years. Likewise, making the US healthcare sector more efficient has seldom been more needed. But neither of these things will happen immediately and, in the meantime, the companies will be buffeted about by the wind.

“While Scotland’s more established businesses haven’t quite kept up with the wider index, they are still in relatively positive territory. The likes of AG Barr and Devro are well rooted in their markets and are cash-generative companies with strong supply chains – they can exert a certain amount of control and take steps to help themselves. Macfarlane Group is another instance of a company taking steps to help itself in a changing industry by making a series of acquisitions.”