3 UK Growth Stocks with Global Revenues

Worried about the negative effect of Brexit on domestically focused smaller companies? Standard Life's Harry Nimmo picks three small caps with a global reach

Emma Wall 27 September, 2016 | 11:11AM
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Emma Wall: Hello, and welcome to Morningstar. I'm Emma Wall and I'm joined today by Harry Nimmo, Manager of the Standard Life Investments UK Smaller Companies Fund, to give his three stock picks.

Hi, Harry.

Harry Nimmo: Hi.

Wall: So what's the first company you'd like to highlight today?

Nimmo: Well, it's Joules Group. Joules (JOUL), it's a household name or increasingly becoming it. It's kind of a countrified brand. It's now growing on to the high streets and they just opened their largest shop ever in Edinburgh it happens and they've got a very strong program up to Christmas of new store openings. They are one of the retail brands that postdates the internet. So they understand the internet and they have at least 25% to 30% of their sales from online.

There are couple of things. One, it's still run by its founder. Or rather the founder is still on the bow. He is actually Chief Brand Manager these days. His name is Tom Joule. And he developed the brand originally and he has built a very good team around him at Market Harborough. They do everything there, all the design and distribution. So, it's growing substantially in the U.K. but also it's made breakthroughs abroad, particularly in North America with good deals with Dillards and Nordstrom.

They call it their Trojan Horse. Their Wellington Boot product is what they tend to sell first abroad, so innovative and unusual. And then can follow it up with further sales. Children's wear, they are also particularly strong and it's a very strong, a British brand, British quality brand that is becoming international and that's a very powerful message.

Wall: What's the second stock today?

Nimmo: Second stock is Fevertree (FEVR), Fevertree Drinks PLC to give it its proper title. It's mixer drinks. We've all heard of the premiumization of spirits drinking and this isn't just a U.K. phenomenon. It's around the world. Individuals want originality, choice and provenance and they are certainly getting it in gin, whisky, all the spirits. But the mixers came later and Fevertree was able to develop this very strongly. In Britain gin and tonic, their tonic, has provenance.

They don't add saccharin to the regular tonic like another major brands do. Everything is ethically sourced and it's a high quality, a great taste. Absolutely what you'd want to put in your premium gin. They have grown internationally and this is the exciting part. About two-thirds of the sales are outside the U.K., both in Europe and also very powerful in the United States right now. They've got a long way to go. This business is really only just beginning.

Wall: What's the third and final stock?

Nimmo: The third and final stock is accesso (ACSO), maybe not a name you've heard of. But if you go to visitor attractions, theme parks and the like, you might be interacting with accesso. It's the mobile phone connection with the visitor attraction manager. They will organize your day. They will sell you tickets. They will give you discounts on food.

They will put you in the queue, so you know when to turn up and not at all wait around like the old days of visitor attractions. They deal with theme parks all around the world. They do skiing, they do football clubs and they are really gaining traction. Recently they got a major contract with Merlin who are the second largest visitor attraction companies in the world. There's lots to come in this company. It's very exciting.

Wall: Harry, thank you very much.

Nimmo: Thank you.

Wall: This is Emma Wall for Morningstar. Thank you for watching.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
accesso Technology Group PLC710.00 GBX1.43
Fevertree Drinks PLC973.53 GBX-0.41

About Author

Emma Wall  is former Senior International Editor for Morningstar

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