The potential reward of investing in the best penny stocks in the UK is high. The small price tag – under £1 in the UK, or below $5 in the US – lures investors to these stocks. Even so, typically issued by companies that are unprofitable, small or new and unproven, penny stocks are a bit like lottery tickets in the stock market – risky by nature. If the company becomes successful, though, the returns could be substantial.
Microsoft, Amazon, or UK retailer ShoeZone have all once traded as penny stocks. Are you trying to spot the next penny stock that will make it big? We’ve picked six UK penny shares trading on the London Stock Exchange that have the potential to generate significant returns to those willing to take a risk.
The 6 top penny stocks to watch in the UK
Here’s a quick look at the top British penny stocks that have promising revenue and earnings growth potential:
- Serabi Gold: The London and Toronto-listed gold miner operates exclusively in Brazil. Benefitting from rising gold prices, it has been working to improve its operations, increasing production and efficiency.
- Integrated Diagnostics Holdings: Based on the Channel Island of Jersey, it provides diagnostic services, from basic tests to advanced molecular diagnostics, and sees demand growth in the Middle East and Africa.
- Luceco: The England-based supplier of lighting, wiring and charging systems for electric vehicles (EVs), and accessories for home repairs is seen improving its earnings by 10% this year, according to analysts.
- Begbies Traynor Group: Provides business rescue and recovery services in the UK, assisting businesses facing financial difficulties. It acts as liquidators to solvent and insolvent companies.
- Evoke: Formerly known as 888 Holdings Plc, the betting and gambling company rebranded into Evoke Plc last year. Its brands include William Hill, William Hill Vegas, 888casino, 888poker, 888sport, and Mr Green.
- Pensana: The miner is building the world’s first renewable-powered rare-earth metal processing facility in Saltend, Hull, UK to produce 5% of the world’s magnet metal demand. It also has a project in Angola.
Your capital is at risk.
- Show Full Guide
An in-depth look at these top-ranked UK penny stocks
To help mitigate the risk that penny stocks carry, investors need to do their due diligence and conduct thorough research of the stocks they are considering. All six of these UK penny stocks have the potential to break out due to factors that currently support their business. Plus, their share price is low by their own historical standards, making for a potentially attractive entry point.
1. Serabi Gold: Penny share with rising revenue and profit, driven by production
- Market cap: £107.82 million
The Surrey-based gold miner owns mines in Brazil and it sees record production driving revenue and profits. It runs the Palito Complex and the more recently acquired Coringa Gold Project, both located in the Tapajos region in Northern Brazil.
Despite its shares rising 150% in the past 12 months, it’s hard to say, at around £1.4 per share, that it’s overpriced, as it’s trading at about 5 times earnings.
In 2024, revenue rose 48% year over year to $94.5 million, driven by increased production and higher gold price, Serabi said. The company’s average gold price was $2,407 versus $1,945 in 2023.
Profit after tax was $27.82 million, up 179% on the year before. EPS totaled $36.73, compared to $8.68 a year earlier. The gold produced totaled 37,520 ounces last year, up from 33,153 ounces in 2023.
Serabi chair Michael Lynch-Bell told shareholders in an April statement that the growth momentum has continued into 2025 and the miner remained on track for its strategy to ramp up its annual production.
It plans to raise the run rate to 60,000 ounces per year by 2026 year-end. The company aims to produce between 44,000 and 47,000 ounces of gold this year.
Many gold mining companies, including this stock, have a higher level of risk with this stock compared to say, a utility. However, the extended rise in the price of gold has helped it lower its debt to EBITDA level significantly.
The $20.2 million in cash balance it has will help it further develop its Coringa classification plant, which is what the company sees as its next growth driver.
2. Integrated Diagnostics Holdings: Demand for tests, improved margins boost profit
- Market cap: £156.62 million
The consumer healthcare company provides high-quality medical diagnostic services with operations in Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia. Its brands, such as Al Borg, Al Mokhtabar, and Biolab, are well-established and trusted in their respective markets.
Its products include everything from blood glucose tests for diabetes to advanced molecular testing for genetic disorders. It also provides radiology services, such as X-rays and CT scans, through Al Borg Scan in Egypt and Echo-Lab in Nigeria.
IDH’s chief executive, Dr. Hend El-Sherbini, one of the few women to lead an international company in the Middle East, was named as one of the Middle East’s 100 Most Powerful Businesswomen of 2023 by Forbes Middle East.
Integrated Diagnostics performed 36.1 million tests in 2023 and operates under multiple brands. It has recently lifted its stake in Biolab KSA, buying an additional 49% for $3.2 million, improving its market share in Saudi Arabia. The move brings Integrated Diagnostics’ total ownership in the Saudi-based lab to 79%.
In 2024, Integrated Diagnostics posted revenue of EGP 5.72 billion, rising 39% year over year. It attributed this to rising test prices and higher test and patient volumes, which grew 9% and 5%, respectively, from a year earlier.
Net income rose 115% year over year to EGP 1.01 billion, including an improvement in the net profit margin to 17.6% from 11.4%.
3. Luceco: Spread of EVs, home improvements market propel revenue growth
Market cap: £239.27 million
Luceco (LON:LUCE), which makes LED lighting, wiring accessories such as switches, sockets, circuit protectors and junction boxes, and portable power products, including electric vehicle (EV) chargers, is growing its revenue by double digits and taking market share even as the wider market is shrinking.
The Telford, England-based company, which launched the EV Wall Charger 2 last year, is looking to grow its EV charger sales after purchasing Sync Energy in 2022 for £8 million. The company’s acquisitions are propelling its revenue growth.
Earlier this year, it acquired D-Line, a leading UK supplier of cable management products, for £12.4 million, with the deal expected to quickly be accretive to Luceco’s bottom line. D-Line has substantial sales in the UK and the US, and Luceco is hoping to use D-Line’s sales network to expand in those markets.
The stock is trading at around 140 pence, up 13% so far this year. It has an above-average dividend that yields around 3.38%, thanks to a 4.2% raise in its latest annual dividend to 5 pence per share. The payout ratio on the yield is only 24%, which should be easily sustainable.
Its shares are trading for around 15 times earnings despite posting strong financials for 2024. Full-year revenue rose 16% from a year earlier to £242.5 million driven by strong demand in the final quarter, Luceco said.
Adjusted EPS grew 12.6% to 12.5 pence, while adjusted operating profit gained up 20.8% on the same period a year ago to £29.0 million, thanks to improved margins.
Early trading in the first quarter “gives confidence for further growth in 2025,” the company said.
4. Evoke Plc: William Hill owner cuts costs to turn its fortunes around
Market cap: £242.46 million
Previously known as 888 Holdings Plc, the British betting and gaming firm, Evoke (LON:EVOK), which owns the William Hill, William Hill Vegas, 888casino, 888sport, 888poker, Mr Green brands, has had a sluggish start to 2025.
Revenue in the first quarter totaled £437 million, up 1%, short of the firm’s target of between 5% and 9% revenue growth this year, due to factors, such as new safer gambling measures to prevent gambling addiction, and cancelled races in January.
Reflecting the weaker-than-expected performance, the shares have slipped 11% so far this year. However, Evoke continues to expect stronger revenue growth from the second quarter. As of April, year-to-date revenue growth has been about 4%, according to a trading update.
The company is in the midst of an overhaul that CEO Per Widerström began in March 2024 to put the company on the path to profitable growth.
The measures involved rebranding the business as Evoke, the sale of some non-core units and the acquisition of Winner.ro in Romania in the fourth quarter of last year, to make inroads into a fifth core market beside the UK, Italy, Spain, and Denmark.
The Gibraltar-based bookmaker cut operating costs by a total of £45 million in 2024 and will reduce expenses by a further £15-25 million in 2025. Revenue increased 3% year over year to £1.75 billion, returning to growth for the first time in three years.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 4% to £312.5 million. “I was delighted to see the results of our transformation start to materialise during the year,” Widerström said.
The company, though, still made a loss after tax of £28.8 million compared with £39.3 million profit in 2023.
5. Begbies Traynor Group: Insolvency services in demand as businesses feel the pinch
Market cap: £154.73 million
Manchester, England-based Begbies Traynor (LON:BEG) specialises in corporate insolvency, business recovery, financial advisory, and property services.
The firm is acutely aware of the need for its services, as it publishes the Red Flag Alert Report, a quarterly financial health snapshot of British businesses. In its most recent report Begbies found that the number of businesses in ‘critical’ financial distress rose 13.1% year over year in the first quarter, with 45,416 companies affected.
Companies are bracing for the economic impact from UK tax changes and US tariffs, which “could push many over the edge,” according to Begbies.
Begbies itself, however, is in excellent financial health. In the six months ended 31 October, the first half of its financial year, revenue increased 16% year on year to £76.3 million. The firm said it was on track toward its medium-term revenue goal of £200 million.
Adjusted profit before tax, the company’s preferred profit measure, climbed to £11.5 million from £9.9 million in the same year-earlier period. The figure has increased six-fold since 2014, the firm said. Adjusted diluted EPS rose to 5.1 pence from 4.6 pence a year earlier.
The shares have risen 6% in the past six months and Begbies said it was confident of delivering full-year results in line with current market expectations for adjusted profit before tax of between £23.0 million and £24.3 million.
Begbies Traynor stock may attract income investors as its latest increase of its interim dividend by 8% to 1.4 pence marked its seventh consecutive year of dividend increases.
6. Pensana: Seeks to supply 5% of global magnet metal demand used in EVs
Market cap: £114.83 million
As a pre-revenue firm building up its operations in an exciting field, Pensana (LON:PRE) remains a speculative, albeit promising penny stock. Its share price has risen nearly 60% this year.
Pensana is producing magnet metals to use in electric vehicles (EVs) and offshore wind turbines. Rare-earth metals have strategic importance in the shift to green technologies. Developed nations aim to reduce their reliance on China for sourcing and refining these key minerals.
The firm is developing a renewable-powered rare earth refinery in Slatend, near Hull in England, and has a large rare-earth deposit project in Angola, the Longonjo neodymium and praseodymium (NdPr) project.
The main construction work at the mine began in May, after securing financing worth around $268 million earlier this year. The site is projected to start generating revenue in late 2026 and has a mine life of more than 20 years.
Initial production from the mine will be 20,000 tonnes of a highly marketable clean mixed rare earth carbonate. It plans to increase that to 40,000 tonnes per year, representing around 5% of the world’s production for permanent magnets for electric vehicles and wind turbines.
Net loss for the six months ended 31 Dec. was $2.9 million, narrowing from a $3.5 million net loss the year before. The company has no revenue, but administration expenses decreased 26% year over year to $2.5 million.
Comparing the top penny stocks in the UK
The six penny shares that we’ve picked and their year-to-date performance at a glance:
| Ticker on LSE | Company | Performance YTD | Price to earnings (P/E) ratio |
| SRB | Serabi Gold | +138.89% | 5.24 |
| IDHC | Integrated Diagnostics Holdings | -0.12% | 9.31 |
| LUCE | Luceco | +19.54% | 15.42 |
| EVOK | Evoke | -9.02% | -1.27 |
| BEG | Begbies Traynor Group | + 0.41% | 48.54 |
| PRE | Pensana | +56.47% | – |
What are penny stocks?
Penny stocks are shares of public companies, usually small-cap stocks, that trade for a low price per share. Typically, this is less than $5 per share, though the exact definition can vary by market. They can appear attractive to inexperienced investors because of their low price tag, but penny stocks are also associated with a greater degree of risk than the stocks of more established companies.
While we’ve focused on penny stocks that trade on the London Stock Exchange, many penny stocks trade on smaller exchanges, or outside an exchange, on the over-the-counter (OTC) market. OTC stocks aren’t subject to the same listing requirements as exchange-traded stocks, which can mean there’s less information about such companies.
Even with the penny stocks on the LSE, there is generally less coverage on the stocks by the media or analysts. Therefore, investors need to do more of their homework before plunging into buying penny stocks.
It’s also important to realise that penny stocks, because of their low share prices, can be more volatile than other stocks. The prices of their shares can swing a great deal in a short period of time. While that can create an opportunity for investors, it can also mean big losses in some cases.
Many successful companies once traded at very low prices, but eventually found their true level. The trick with finding good penny stocks is spotting companies that are improving revenue and if not in the black, at least showing a path toward being profitable. Investors must bear in mind, though, that penny stocks carry high risk and only those with significant tolerance for risk should touch them.
Pros and cons of investing in UK penny stocks
Here are some of the pros of investing in penny stocks:
Accessibility: Their low share prices make them affordable for beginner investors, allowing for diversification with a smaller investment.
High-Potential Returns: The potential for explosive growth is a major draw. Small companies on the brink of success or larger companies undergoing a turnaround can experience significant stock price increases.
Undervalued Gems: Sometimes, promising companies with bright futures fly under the radar, trading as penny stocks before gaining wider recognition.
Hedging Potential: Penny stocks in specific sectors can act as a hedge against broader market declines, such as natural resources stocks during a tech downturn.
There are, however, considerable risks in investing in penny stocks:
Extreme Volatility: Penny stocks are notorious for their wild price swings, making it difficult to predict their future value and increasing the risk of substantial losses.
Fraudulent Schemes: These stocks are often targets for pump-and-dump schemes, where fraudsters manipulate prices to profit at the expense of unsuspecting investors.
Limited Information: Penny stocks are often issued by small companies with limited public information, making it challenging to conduct thorough research.
Financial Instability: Many penny stocks represent companies with a limited track record or ongoing financial struggles, increasing the risk of failure.
How to invest in penny stocks in the UK?
First, check to see if your brokerage account will allow you to trade in penny stocks. Some brokers put limits on penny stocks or charge extra fees for penny share trades. Make sure the stock is registered with the proper regulators to avoid unregistered scams.
As with any stock, but even more so with penny shares, you need to do your own research. Look at a company’s earnings reports going back a few years. Make sure the company is on solid financial footing and appears to be headed in the right direction.
Be especially cautious at first. It’s tempting to buy large blocks of shares of penny stocks because they’re inexpensive, but it makes sense to proceed slowly with smaller buys at first because of the volatility around penny stocks – even if you’re seeking Buy-now UK stocks.
Do I need to pay tax on penny stocks in the UK?
Generally yes. Consult a tax professional regarding your specific situation. There are two types of taxes affecting penny stocks in the UK, Capital Gains Tax (CGT) and Stamp Duty Reserve Tax (SDRT).
The CGT applies to profits made when selling stocks outside of tax-efficient accounts like ISAs or SIPPs. The amount of tax owed depends on your income tax bracket.
The SDRT is a 0.5% tax paid when buying UK-listed stocks, which is not applicable for most overseas shares or exchange-traded funds (ETFs).
Tax-efficient accounts like ISAs and SIPPs shelter your investments from taxes like CGT. However, SDRT might still apply to non-UK holdings within these accounts.
There are plenty of hydrogen stocks in the UK, but not many of them have a clear path to profitability. We focused on UK-listed hydrogen companies trading at accessible price points, ensuring they were part of the London Stock Exchange. Additionally, we looked for companies with a market capitalisation of no more than £300 million.
We also selected some more established companies in the midst of a potential turnaround such as Evoke. The thinking was that these had more managerial experience and more economic wherewithal to return to profitability.
Lastly, we included one promising startup, rare-earth exploration company Pensana as its products, used in EVs and offshore wind turbines, are expected to be in demand as countries strive to achieve zero net emissions goals.
Here’s what steps we took to find the best penny shares to buy:
Used a stock screener to find low-priced stocks: A stock screener can help investors find stocks below £1 and then can be used to compare those stocks to others in their industries. There are also stock predictor services that can help you find quality stocks under £1.
We focused on growth: Penny stocks usually are smaller, newer companies with higher volatility and risk compared to larger, more established stocks. We looked for penny stocks that were not new and were larger companies that are showing growth. If they were new, we looked for stocks that would benefit from growing trends.
We looked for companies with a competitive advantage: We sought companies with a unique business model or competitive advantage that sets them apart from competitors. This could be a proprietary technology, a strong market position, or a unique customer base. Luceco is in this category as it is a supplier of companies making electric vehicles.
We did our homework: We examined the companies’ earnings reports to assess their financial health, profitability and debt levels. We also looked at valuation ratios, such as price-to-earnings (P/E) that might show if a stock is undervalued compared to its peers.
Best place to buy UK penny stocks CFDs in 2025
FP Markets is a global broker offering forex and CFD trading on UK penny stocks, currencies, indices, metals, and cryptos. The platform is regulated by top authorities like ASIC and CySEC. With low fees at 0.1% commission per side, FP Markets offers affordable trading.
Traders can get up to 1:5 leverage, though beginners in certain regions may have lower maximum leverage due to regulations.
FP Markets supports popular platforms like MetaTrader 4, MetaTrader 5, cTrader, and even TradingView for charting. Beginners can also practice with a free demo account. You can also access FP Markets through their mobile app and WebTrader service.
Customer service is available 24/7 in multiple languages, and the deposit and withdrawal options include credit cards, e-wallets, and bank transfers – making it a convenient choice for investors seeking exposure to UK dividend stocks while enjoying flexibility and support.
Penny stock FAQs
What is the best penny stock to buy right now?
Are penny stocks a popular investment?
What’s the best UK penny stock to buy under £1?
What’s the hottest penny stock right now?
What’s the cheapest penny stock to buy?
Where do UK penny stocks trade??
References
- Integrated Diagnostics Holdings 2024 full-year report
- Serabi Gold earnings report
- Luceco full-year results for 2024
- Evoke Q1 trading update
- Begbies Traynor Group first-half earnings
- Pensana starts construction at Angolan NdPr project
Disclaimers:
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
