Smaller companies can play a valuable role in investors’ portfolios. They enhance diversification and typically have higher growth potential compared to large caps. Young, nimble companies are often at the foothills of their growth trajectory. And small caps tend to have more room for expansion compared to their large cap brethren.
Generally speaking, they are more agile, less burdened by bureaucracy, and more innovative, allowing them to adapt quickly and drive growth through new technologies or products.
Prime targets
Smaller firms receive less coverage from sell-side analysts, which means diligent investors prepared to do their homework can find undervalued gems within the small cap ranks.
Furthermore, the stockmarket’s smaller fry are frequently prime targets for premium-priced takeovers by bigger businesses.
In this article, Sharesify shines the spotlight on five UK-listed smaller companies with the ability to grow into much bigger businesses over time.
Fevara
Ticker: FVA
Share price: 140p
Market cap: £72.8 million
Livestock supplements specialist Fevara (FVA) is a UK-listed small cap with significant overseas growth potential. Sharesify’s interest in the stock was piqued by the company’s recent entry into Brazil, the world’s largest beef cattle market, which has provided a platform for tasty long-term growth.
For the uninitiated, Fevara serves farmers in the UK, Ireland, US, Germany, Canada and New Zealand with high-quality feed blocks and feed supplements. Its unique products can be used in all weather conditions to improve the health, performance and profitability of livestock.
Tasty fundamentals
Fundamentals in the global livestock sector remain very strong, driven by high demand for animal protein. Guided by CEO Josh Hoopes, who used to run Associated British Foods’ (ABF) AB Agri business, the £72.8 million cap has entered Brazil through two recent acquisitions.
Brazil’s cattle population of around 230 million compares with roughly 90 million in each of the US and UK/Europe.
| Year to August | Revenue (£m) | Pre-tax profit (£m) | EPS (p) | DPS (p) |
| 2025 (A) | 78.8 | 4.2 | 4.4 | 2.4 |
| 2026 (F) | 85.4 | 5.5 | 8.9 | 2.5 |
| 2027 (F) | 93.5 | 6.4 | 10.3 | 2.8 |
Source: Edison Investment Research
Brazil surpassed the US as the largest beef producer in 2025. And Hoopes tells Sharesify that the Brazilian market today has many of the characteristics of the US market 20 to 30 years ago, with growing demand for more effective supplementation to improve yields, beef quality and labour efficiency.
Beefy ambitions
The ambitious Hoopes has set out medium-term ambitions for Fevara to generate at least £120 million in revenue, £15 million in EBITDA and a return on capital employed (ROCE) of 20%.
Recent H1 results revealed flat continuing revenue of £50.6 million, although adjusted pre-tax profit fattened up 18.8% to £7 million. Research house Edison forecasts pre-tax profits of £5.5 million and earnings per share of 8.9p for FY26, rising to £6.4 million and 10.3p in FY27.
Based on the latter estimates, Fevara trades on around 13.5 times next year’s forecast earnings, which is undemanding given the group’s long-term, international growth potential.
Applied Nutrition
Ticker: APN
Share price: 214p
Market cap: £537.5 million
International growth possibilities abound at sports nutrition, health and wellness brand Applied Nutrition (APN). Founded by CEO Thomas Ryder, the £537.5 million cap’s products range from protein powders to supplements and are targeted at elite athletes, gym goers and health-conscious consumers alike.
Applied Nutrition remains a small player in a global sports nutrition, health and wellness market projected to grow to £279 billion by the end of 2028 according to Euromonitor. That means its growth opportunity is nothing short of vast.
Playing to win
New product development and investment in marketing are helping Applied Nutrition to win market share with retailers. And the Liverpool-based firm is expanding its distribution across Europe, Latin America and Asia, although it has seen some reduction in volumes in the Middle East due to the Iran conflict.
| Year to July | Revenue (£m) | Pre-tax profit (£m) | EPS (p) |
| 2026 (F) | 140.3 | 38.5 | 11.4 |
| 2027 (F) | 155.7 | 42.6 | 12.6 |
| 2028 (F) | 172.9 | 47.8 | 14.1 |
Source: Cavendish
The company is a holding in the Aberdeen UK Smaller Companies Growth Trust (AUSC), whose managers Abby Glennie and Amanda Yeaman are excited by the potential.
Reassuringly diversified
‘Applied Nutrition is very geographically diversified,’ Glennie informs Sharesify. ‘And Latin America for instance is one really big growth area for the company. The sell-through of its products is also really good. One of the things Appie Nutrition is really good at is new product development.’
Yeaman stresses that the business model is ‘vertically integrated and very responsive as a result’. Cavendish has a 285p price target for Applied Nutrition, implying almost 35% upside at current levels. For FY26, the broker forecasts a rise in pre-tax profits to £38.5 million (2025: £30.2 million), building to £42.6 million and £47.8 million in FY27 and FY28 respectively.
Nichols
Ticker: NICL
Share price: 914p
Market cap: £350.3 million
A downwards share price drift over the past year at Nichols (NICL) has created a compelling entry point for growth and income investors alike. Founded in 1908, Nichols has grown from a local business into an international soft drinks group, bringing iconic brands such as Vimto, ICEE and Sunkist to a wide range of consumers.
Showing resilience
Despite the impact of rising inflation on the consumer, this resilient, cash generative drinks business has made a ‘positive start’ to 2026. Sharesify sees scope for sustained growth in Nichols’ UK packaged division, driven by new product innovation and market share gains.
And we are excited by the long-run growth potential of the AIM-traded firm’s international packaged arm in particular. Strong growth is being served up in West Africa, where a new concentrate model is bringing production closer to the end consumer and enriching Nichols’ margins.
A popular drink around Ramadan, Vimto is a big seller in the Middle East as well as Africa. Consumers also have a thirst for the brand in Malaysia, where Vimto cordial is now available in over 3,000 stores. And Nichols’ core brand still has growth potential in Europe and North America.
| FY25 – Geographic revenue split | (%) |
| UK | 75 |
| Africa | 13 |
| Middle East | 7 |
| Rest of World | 5 |
Source: Nichols, 2025 annual report
Understandably, Nichols continues to monitor developments arising from the Middle East conflict, which management concedes could lead to volatility in supply chains and key input costs.
As CEO Andrew Milne pointed out on 21 April: ‘Whilst the Middle East conflict has had a limited impact on performance to date, we are taking proactive steps to manage potential disruption, with contingency plans in place to mitigate any associated commodity cost inflation. Our distribution routes do not have direct exposure to the most affected shipping corridors in the region.’
Fortress balance sheet
Newton-le-Willows-based Nichols is blessed with a fortress balance sheet, which supports investment in organic growth and mergers and acquisitions, as well as the company’s progressive ordinary dividend and periodic special payouts.
According to Stockopedia data, Nichols shares are currently trading on a prospective price-to-earnings ratio of around 13.5 times for FY26 falling to 12.5 times based on FY27 estimates. This rating represents a big discount to the firm’s own recent history.
Disclaimer: James Crux has a personal investment in Nichols.
System1 Group (SYS1)
Ticker: SYS1
Share price: 288p
Market cap: £36 million
In most polls, the most memorable advert of the last 20 years is Cadbury’s ‘gorilla’ advert. In it, a man in a gorilla suit played the drums to Phil Collins’ ‘In The Air Tonight’ for 90 seconds. There was no mention of chocolate, or even of Cadbury’s.
The reason the advert was so successful, according to System1 CEO James Gregory, is because viewers felt an emotional connection. It worked for adults and children, it evoked a degree of nostalgia, and it went viral on YouTube within days.
Emotional connections
It also boosted Cadbury’s sales in the weeks after it first aired, generating three times the normal return on investment. Yet it almost didn’t make it onto tv, because executives at Cadbury Schweppes didn’t ‘get’ it.
This is where AIM-listed System1 (SYS1) comes in. Using behavioural science and the world’s largest database of emotional norms, the firm helps companies tap into consumers’ emotions to predict and improve the impact of adverts. Even when – or especially when – the execs themselves don’t ‘get’ it.
The company’s success means it works with 48 of the world’s top 100 brands by media spend. It doesn’t rest on its laurels, however, as it continues to win new clients and add new offerings.
| FY26 Actual | FY27 Estimate | |
| Revenue (£m) | 37 | 38.8 |
| Adjusted EBITDA (£m) | 3.6 | 5.7 |
Source: Canaccord Genuity, Singer Capital Markets
That capacity to innovate and grow was severely tested last year. When Tariff Day was announced, big brands simply stopped spending on advertising because they couldn’t calculate its effectiveness.
Spending gradually returned, but at a lower level, yet System1 was able to report flat revenue for the year to March 2026. For the year to March 2027, analysts have penciled in a slight increase in spending, but we believe the firm is on a sharp upward trajectory.
Eagle Eye Solutions
Ticker: EYE
Share price: 400p
Market cap: £119.5 million
The ecommerce market is estimated to be worth close to $4 trillion this year and could reach $5 trillion by 2030, according to Statista. There will be over four billion users by 2030, with an average spend topping $1,000/year.
The question for companies is how do they reach this ever-growing audience effectively? It’s a running joke among marketing directors that half of their advertising works, they just don’t know which half.
Outstanding results
AIM-listed Eagle Eye Solutions (EYE) offers to solve that problem. The firm provides companies with personalised, AI and data-driven real-time engagement with their customers, with outstanding results.
Leading the business is Tim Mason, former deputy CEO of Tesco (TSCO) and the man who introduced the Clubcard.
| FY26 Estimate | FY27 Estimate | |
| Revenue (£m) | 45.9 | 54.6 |
| Pre-tax profit (£m) | 0.8 | 4.4 |
Source: Shore Capital
Clients include the major UK supermarket chains, John Lewis, Pets At Home (PETS), IKEA, Virgin Media and Pizza Express to name a few. Other clients include French hypermarket giants Auchan and Carrefour, and US chains Rite Aid and Staples.
Recurring success
In the half-year to December 2025, Eagle Eye posted a 29% increase in annual recurring revenue to £42.2 million. New revenue during the half was more than in the whole of the previous financial year.
Rather than seeing AI as a challenge, Eagle Eye has turned it to advantage generating an average one billion promotions per month. In 2025, its AI-based personalised offers created an estimated £750 million of incremental sales for its UK and European clients.
The firm has signed a ‘transformational’ OEM agreement where clients use their own front end but the architecture is all Eagle Eye. Mason expects ‘material’ revenue generation in FY27 and further growth in FY28 as more clients sign up.
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