These 3 under-the-radar UK shares are rallying

Unlike Rolls-Royce and Nvidia, not every rallying stock makes headlines. While the FTSE 100 hovers near record highs, several smaller UK shares have been quietly outperforming in recent months. 

Here are three lesser-known British companies that have delivered impressive returns yet remain largely overlooked by most investors. They may not have made headlines lately but their price performance and solid fundamentals make them worth considering.

Chemring Group

With a £1.5bn market-cap, Chemring Group‘s (LSE: CHG) no penny stock but still pales in comparison to other major UK defence contractors. Yet shares in the group are up almost 70% so far this year, making it one of the best performers on the FTSE 250. As geopolitical tensions escalate, demand for the company’s electronic warfare counter measures and threat detection systems has soared.

The firm’s strong order book and healthy balance sheet are helping fuel consistent growth.

But following the share price surge, Chemring now trades on a price-to-earnings (P/E) ratio of 35, suggesting slight overvaluation, limiting growth potential. Fortunately, it has a modest but well-covered dividend yield and eight years of continuous growth. 

The main risk is its reliance on government contracts and global defence spending. Any budget policy changes in this respect could hurt profits. Yes, the best gains may already be priced in, but the company’s strategy and execution remain impressive.

Rank Group

Shares in Rank Group (LSE: RNK), the operator of Mecca Bingo and Grosvenor Casinos, have rebounded sharply, rising 52% so far in 2025. After years of pandemic-related setbacks and rising costs, the business is finally showing signs of recovery.

The company recently reported better-than-expected results, helped by improving footfall and a higher per-customer spend.

Despite the recent rally, it still trades with a P/E growth (PEG) ratio of just 0.15, indicating that the share price has yet to catch up with projected earnings growth. A leaner cost base and strong brand recognition are key factors supporting a multi-year recovery thesis. 

However, with the UK economy still on a questionable trajectory, the business remains at risk from another economic slowdown. If consumer spending tightens again, it could stall the recovery.

For now however, the momentum appears firmly on its side.

Picton Property Income

Property-related stocks haven’t had the best luck over the past couple of years, but one small-cap that’s soared this month is Picton Property Income (LSE: PCTN).

The shares are up 31% this year, soaring 13% just last month as investor confidence returns to the UK commercial property market. This is particularly visible in business-related areas like warehousing and industrial lets.

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With a P/E ratio of 12 and a 4.7% dividend yield, the stock looks attractive for value and income. Preliminary results last month revealed new lettings are coming in around 6% ahead of estimated rental values (ERV), and annual rental growth up by between 4% to 6%

Of course, interest rate sensitivity remains a risk for all REITs. Any sharp reversal in inflation trends or central bank policy could hit valuations. But with inflation appearing to cool and rates expected to fall later this year, the backdrop could continue to favour well-run property trusts like Picton Property.