River UK Micro Cap Limited

Intention with regard to Redemption Mechanism

Launch of Buyback Programme

The Board of River UK Micro Cap Limited (the "Company") announces an evolution in the Company's commitment to returning capital to shareholders, alongside the launch of a share buyback programme, both of which are aimed at addressing the prevailing discount to NAV.

Intention with regards to the redemption mechanism

Since its launch in 2014, the Company has returned more capital to shareholders (c.£77 million) than it has cumulatively raised (c.£70 million), delivering a c.12.8% IRR to 31st July 2025.

Despite a strong recovery in NAV performance over the last two years, and consistently top decile performance in the IA UK Smaller Companies sector over 12 months to end June 2025, the Board of the Company is reinforcing its commitment to shareholders, in light of the persistent discount

To reaffirm its long term confidence in the sector and the Portfolio Manager, should no capital be returned to shareholders by way of a compulsory partial capital redemption under the existing redemption mechanism ("Redemption Mechanism") before 30^th June 2028, the Board will put forward proposals to provide a full cash exit for shareholders by way of voluntary winding up of the Company or other corporate action. In order to achieve this capital redemption, the Company must deliver a net asset value ("NAV") performance of c.11.1% compounding per annum.

Prior to making this statement of intention, the Board have taken into account the views expressed by 42.4% of shareholders who are supportive of the changes the Board are announcing today.

The Redemption Mechanism periodically returns capital to shareholders, aiming to maintain the Company's NAV at approximately £100 million, in accordance with the Company's stated policy in the original prospectus. The Board considers this level of NAV optimal to fully capitalise on the underlying investment opportunity available in UK micro cap companies. All redemptions will normally be subject to a de minimis value to be returned of approximately £10 million (before costs).

The wider environment has presented challenges for UK micro cap companies, reflected in the absence of compulsory redemptions since 2021 and the persistent discount at which the Company's shares trade relative to its NAV. Despite these headwinds, the Board maintains strong conviction in the Company's investment strategy and believes that, amid signs of recovery in the UK micro cap sector, the Company is well-positioned to deliver

strong shareholder returns. This confidence was reinforced in 2024, when the Company outperformed its benchmark, returning 19.9% vs 5.0% (Numis Smaller Companies + AIM (ex ICs).

The Board believes that a 3-year timeframe is appropriate for the Company to demonstrate the efficacy of its investment strategy and the Company's capacity to generate sustained capital growth for shareholders.

"We can already see strong signals that micro caps are beginning to power up and we feel the Company is really well positioned to grow rapidly on two fronts: as UK companies positively re-rate after a period of low valuations and more certainty in the economy boosts small company growth prospects. Should theses persistent discounts and muted performance be structural - rather than cyclical - then we have implemented a safety net for investors to get out at close to net asset value. However, the Board believes strongly that the long-term future success of the Company will be cemented by delivering attractive growth and more redemptions to shareholders over the next three years," commented Board Chair, John Blowers.   

In the event that the Company has not returned a minimum of £10m of capital via its Redemption Mechanism prior to 30th June 2028, the Board will present proposals to enable a full cash exit for all shareholders.

Proposals to provide a full cash exit for shareholders by way of voluntary winding up of the Company or other corporate action would require the approval by shareholders of relevant resolutions put forward at a General Meeting of the Company.

The Board will take account of any shares bought back when determining the size of the Company in respect of the Redemption Mechanism, to avoid creating a misalignment with the use of buybacks to optimise returns per share.

Share Buybacks

The Company is pleased to announce that it has appointed Singer Capital Markets Securities Limited to manage a programme (the "Share Buyback Programme") to buy back ordinary shares of no par value ("Ordinary Shares") for up to a maximum aggregate consideration of £2.0 million and subject to Ordinary Shares being available to purchase at up to a price representing a discount of 10.0 per cent. to the most recently announced NAV per share prevailing at the time of repurchase, alongside other certain pre-set parameters.

The Share Buyback Programme will commence today and any shares repurchased pursuant to the Share Buyback Programme will count towards the Company's general buy back authority of 14.99 per cent. of the Company's issued share capital, as approved at the Company's last annual general meeting on 12 March 2025.

Under the Buyback Programme, the repurchased shares will be held in treasury at the Company's discretion for later cancellation. Shares held in treasury are not entitled to dividends and have no voting rights at the Company's general meetings.

The Company confirms that it currently has no inside information.

Further Information

John Blowers, Chairman and George Ensor, Portfolio Manager will lead a presentation and discussion on today's announcement at the Reaffirming Shareholder Value webinar, hosted by Investor Meet Company on 06 August 2025 at 3pm. Investors can sign up to Investor Meet Company for free and add to meet RIVER UK MICRO CAP LIMITED via: https://www.investormeetcompany.com/river-uk-micro-cap-limited/register-investor

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For further information please contact:

Lucy Draper [email protected] Tel: +44 7702 799 117