Aberforth Smaller Companies Trust Plc - Half-year Report
Half Yearly Report for the six months to
The following is an extract from
FINANCIAL HIGHLIGHTS
Total Return Performance % Net Asset Value per Ordinary Share1,5 6.3 DNSCI (XIC) 2,5 7.0 Ordinary Share Price3,5 7.3
30 June 2025 31 December 2024 30 June 2024
Shareholders’ Funds4 £1,414m £1,397m £1,426m
Market Capitalisation £1,256m £1,232m £1,272m
Gearing5 4.7% 7.2% 6.5%
Net Asset Value per Ordinary Share4 1,731.97p 1,666.95p 1,694.73p
Ordinary Share Price5 1,538.00p 1,470.00p 1,512.00p
Ordinary Share Discount5 11.2% 11.8% 10.8%
Dividends per Ordinary Share6 14.30p 49.60p 13.60p
First interim dividend of 14.30p per share for the year ended
1 Represents net asset value return with dividends reinvested.
2 Represents the return on the DNSCI (XIC) with dividends reinvested.
3 Represents Ordinary Share price return with dividends reinvested.
4
5 Alternative Performance Measures (refer to Note 10 and the 2024 Annual Report)
6
Dividends are in respect of the six months to
INVESTMENT OBJECTIVE
The investment objective of the Company is to achieve a net asset value total return (with dividends reinvested) greater than that of the Deutsche Numis Smaller Companies Index (excluding Investment Companies) (“DNSCI (XIC)”) over the long term.
Chairman’s Statement
Review of performance
In the six months to
ASCoT’s small company benchmark is the Deutsche Numis Smaller Companies Index (excluding investment companies), which is abbreviated throughout this report as DNSCI (XIC). Its total return was +7.0% over the six months to
ASCoT’s positive total return was welcome, though it was achieved in a volatile fashion as geopolitics buffeted financial markets in the
It does seem likely that American policy has called some investors to question their exposure to US equity markets. As investment horizons broadened over recent months, interest in other stockmarkets – notably Germany’s but also the UK’s – has improved. The frustration for ASCoT is that larger
Dividends
The resilience of smaller companies can be seen in ASCoT’s income performance in the first half of 2025. The revenue return per Ordinary Share was 32.64p, which was ahead of the Managers’ estimates at the start of the year and of the 28.12p earned in the corresponding period in 2024. The year-on-year improvement is somewhat flattered by the receipt of a special dividend and by the timing of other dividends, but the outlook for the full year is nevertheless encouraging and points to growth.
The Board targets dividend increases in a full year above the year end rate of inflation, currently expected to be just over 3% in Bloomberg’s aggregation of forecasts. The Board is pleased to declare an interim dividend of 14.30p, which represents year on year growth of 5.1%.
When thinking ahead to the final dividend, the Board is cognisant of the macro economic and geopolitical uncertainties with which ASCoT’s investee companies must contend at present. We do also take comfort from ASCoT’s significant revenue reserves. At
The interim dividend will be paid on
Gearing
An important tool available to ASCoT as a closed-ended fund is the ability to gear. ASCoT has a credit facility with
The Board’s policy is to deploy gearing tactically to take advantage of periods of stress in equity markets. Consistent with this, ASCoT has been geared on four occasions in its 34 years. The current phase started amid the pandemic in early 2020 and has since enhanced ASCoT’s net asset value performance. The Board and Managers regularly review the appropriateness of gearing and judge that current smaller company valuations merit its continued deployment. At
Beyond the potential to enhance investment returns, the credit facility provides flexibility to conduct share buy-backs and allows the Managers to react nimbly to new opportunities without disturbing existing investments.
Share buy-back
The Board believes that share buy-backs are a benefit to Shareholders and are an important element of ASCoT’s investment proposition. They provide an increase in liquidity at the margin for those Shareholders looking to crystallise their investment and deliver an economic uplift for those Shareholders wishing to remain invested in the Company. In addition, consistently applied share buy-backs may bring some tension to the share price of an investment trust when the market loses sight of the net asset value.
Accordingly, the Board and Managers are keen that ASCoT continues to buy back shares. In the first half of 2025 2,205,500 shares were bought back and cancelled, up from 275,000 in the corresponding period last year. The 2,205,500 shares were bought back at an average discount to net asset value of 11.4% and the consideration was £31.3m.
Abnormal market circumstances may influence the pace, but ASCoT can fund buy-backs over time through cash generated from the natural turnover of the portfolio. This is consistent with the Managers’ value investment philosophy and has been supported by the high level of M&A activity in recent years. Additional flexibility is provided by the facility with the
Annual General Meeting (AGM)
All resolutions at the AGM held on
Conclusion
Much has changed in a mere six months. The US has gone from a beacon of stability in the real and financial worlds to a source of uncertainty. Confidence to invest has been undermined and I fear that we will see the ramifications of this in weaker growth later this year. The economic heft of the US means that activity in other countries is also at risk, especially in view of the continuing tariff negotiations. However, change also brings opportunity. The strong performances of the German and
It is frustrating that this interest in
Considering the proven resilience of smaller companies, the low valuations of ASCoT’s portfolio look very attractive. This is a view corroborated by rational players such as private equity and larger companies, mostly based overseas, who are taking advantage of depressed sentiment through takeovers. ASCoT has benefited from this unusually high rate of M&A activity: recommended bids for six of its holdings were received in 2024, with another four so far in 2025. This seems likely to continue while stockmarket valuations remain unreasonably low. Whether by this or some other means as yet unknown, the Board remains optimistic that today’s valuations can rise to their historical averages and contribute to good returns from ASCoT’s portfolio.
When it considers ASCoT’s offering to Shareholders, the Board recognises that portfolio performance, while likely to be the main influence on returns, is not the only influence. Dividend growth and share buy-backs also play a role and ASCoT is well placed for both. Revenue reserves are strong and give the Board confidence in its ambition to keep dividends growing above the rate of inflation. Meanwhile, the discount of the share price to the net asset value allows further buy-backs of shares on terms that enhance returns to Shareholders.
My fellow Directors and I always welcome the views of Shareholders on ASCoT’s capital allocation or any other topic. Please contact me at my e-mail address, which is noted below.
Chairman
richard.davidson@aberforth.co.uk
Managers’ Report
Introduction
Over the six months to
Larger companies started the year very strongly compared with smaller companies. Indeed, the first three months of 2025 were the second worst calendar quarter for the DNSCI (XIC) relative to the FTSE All-Share in ASCoT’s 35 year history. However, the gap between the two indices narrowed through the second quarter as the attractive valuations of smaller companies were exposed by further M&A activity.
Investment background
The positive returns from equities, in the
Centre stage has been
If there was a silver lining to the “Liberation Day”, it was to jolt other countries out of their complacent reliance on US leadership.
Tariffs imposed by the US have a limited direct effect on small
The exposure of small
Analysis of performance and portfolio characteristics
ASCoT’s net asset value total return in the six months to
Forthesixmonthsended30June2025 Basispoints Attributabletotheportfolioofinvestments,basedonmidprices (71) (after transaction costs of 6 basis points) Movement in mid to bid price spread 21 Cash/gearing (16) Purchase of ordinary shares 29 Management fee (34) Other expenses (7) Totalattributionbasedonbidprices (78)
Note: 100 basis points = 1%. Total Attribution is the difference between the total return of the NAV and the Benchmark Index (i.e. NAV = 6.25%; Benchmark Index = 7.03%; difference is -0.78% being 78 basis points).
The next table sets out a series of characteristics of both the portfolio and the DNSCI (XIC). The paragraphs that follow provide context and explanation for these characteristics and for ASCoT’s performance in the first half of 2025.
30 June 2025 30 June 2024
Portfolio characteristics
ASCoT DNSCI (XIC) ASCoT DNSCI (XIC)
Number of companies 79 343 77 339
Weighted average market capitalisation £586m £1,132m £624m £986m
Weighting in “smaller small” companies* 52% 20% 56% 27%
Portfolio turnover over prior 12 months 19% n/a 19% n/a
Active share 78% n/a 73% n/a
Price earnings (PE) ratio (historical) 10.1x 14.9x 10.2x 13.5x
Dividend yield (historical) 4.0% 3.4% 3.8% 3.4%
Dividend cover (historical) 2.5x 2.0x 2.6x 2.2x
*“Smaller small” companies are members of the DNSCI (XIC) that are not also members of the
Size
Size exposure was an important influence on ASCoT’s returns in the first half of 2025. There are two aspects to this.
First, small
•
The DNSCI (XIC) and FTSE All-Share have different geographical exposures. Larger companies are much less reliant than smaller companies on the domestic
•
The DNSCI (XIC) and FTSE All-Share have different sector exposures. Two sectors –
• If the tariff uncertainty has prompted asset allocators to reduce US exposure and increase weightings in other markets, it is plausible that larger companies will have benefited earlier than have smaller companies.
Second, size was a significant influence within the DNSCI (XIC). In the first half of 2025, it was a case of the smaller the company, the poorer the share price performance. The Managers analyse this effect by splitting the portfolio and DNSCI (XIC) into “larger small” companies (those that are also members of the
The sector and geographical profiles of “smaller small” and “larger small” companies are similar and so cannot explain the divergent performance of the two cohorts. The more important influence was the risk aversion in equity markets leading up to and in the aftermath of the tariff announcements. In these circumstances, investors were reluctant to embrace the greater illiquidity of “smaller smalls”, leading to additional pressure on their share prices. As the stockmarket’s mood improved through May and June, it is notable that the relative performance of “smaller smalls” picked up.
The reason for the Managers’ current preference for “smaller small” over “larger small” companies is twofold. First, there is little fundamental difference between the two cohorts – geographical exposures, sector exposures, balance sheet strength, profit growth, return on equity, etc. Second, there is a significant valuation difference – the 2025 EV/EBITA for “smaller smalls” in the DNSCI (XIC) is 8.9x, which is 20% lower than the 11.1x for the “larger smalls”. These attributes matter – notwithstanding the experience so far in 2025, “smaller smalls” have out-performed “larger smalls” over the past five years.
Style
The Managers invest ASCoT’s assets in accordance with their value investment philosophy. Consequently, ASCoT’s investment returns are influenced by the stockmarket’s preference for more expensively priced growth stocks or more modestly rated value stocks. To understand style effects within the DNSCI (XIC), the Managers use analysis by
Balance Sheets
The following table sets out the balance sheet profile of ASCoT’s portfolio and of the Managers’ Tracked Universe. This subset of the DNSCI (XIC) represents 98% by value of the index as a whole and is made up of the 230 companies that the Managers follow closely.
Netdebt/EBITDA Netdebt/EBITDA
Weight in companies with: Netcash Other*
<2x >2x
Tracked Universe 2025 30% 43% 21% 6%
Portfolio: 2025 32% 51% 12% 5%
– Portfolio “smaller smalls” 34% 47% 13% 5%
– Portfolio “larger smalls” 30% 55% 10% 5%
*Includes loss-makers and lenders
The balance sheet profile of the portfolio and the Tracked Universe are similarly robust. Around one third of each is represented by companies with net cash on their balance sheets. The more highly leveraged companies tend to be those with asset backing, such as pub businesses and property companies. The final two lines of the table show that there is no meaningful difference between the balance sheet profiles of “smaller small” and “larger small” companies. The lower valuations of the former cohort are not justified by weaker balance sheets.
Strong balance sheets are supporting dividend growth, as the next section explains, and a continued high rate of share buy-backs. In the first half of 2025, 21 of ASCoT’s 79 investee companies bought back shares, taking advantage of the attractive stockmarket valuations of their equity. The economic logic of buy-backs at such valuations is compelling as long as they do not deprive underlying businesses of capital needed for the maintenance of assets and prudent growth.
Income
While ASCoT’s capital performance through the first half of 2025 was volatile, it made steady progress in income terms. Revenue earned from dividends paid by investee companies rose at double digit rates. The table below categorises ASCoT’s 79 holdings at
NilPayer Cutter UnchangedPayer IncreasedPayer New/Returner 16 11 19 30 3
ASCoT’s positive income experience was driven by the 30 Increased Payers and three New / Returners. These out-weighed the drag from the 11 companies that reduced their most recent dividends. Of the 16 Nil Payers, the Managers expect five to resume dividend payments over the next two years.
At
Corporate Activity
The Managers are frequently asked what the catalyst will be for a re-rating of small
As long as valuations across small companies remain so attractive, it is likely that takeovers will continue. There is the opportunity for those invested in the asset class to enjoy good investment returns by harvesting takeover premiums as they await a broader re-rating.
The downside of takeovers could be a shrinking of the Managers’ investment universe. However, there are reasons to believe that the opportunity set will remain broad.
•
First, last year’s changes to the Listing Rules should improve the attractiveness of the
• Second, ten AIM companies have recently moved or announced an intention to move to the Main List. This makes them eligible investments for ASCoT. The Managers have already started a holding in one of the ten and are scrutinising others. The relisting trend is influenced by the new Listing Rules, which level the governance playing field between AIM and the Main List, and by the tax changes announced in the October Budget.
•
Third, the definition of the DNSCI (XIC) – the bottom 10% by value of the total
Engagement
Since ASCoT’s inception in 1990, an integral part of Aberforth’s investment process has been engagement with the boards of the investee companies. The approach to engagement is purposeful, discreet and constructive. Its aim is to improve investment outcomes for Aberforth’s clients and investors. The Managers may engage on any topic that they perceive to be affecting the valuation of a company. Their ability to engage is improved by the large stakes – up to 25% of issued share capital – that Aberforth’s clients can collectively take in investee companies.
As highlighted last year, the high rate of takeover activity means that M&A terms are a frequent topic of engagement. The Managers often seek to improve terms or, if these are unattractive, to work with the boards of investee companies to discourage takeover interest. The Managers wrote to investee companies in 2024 to reinforce their expectations of boards when they receive a takeover approach.
Another reason for engagement in 2025 stems from the new Listing Rules, which were introduced last year. One of the changes removes the need for a shareholder vote to approve significant transactions. The purpose was to increase the attractiveness of the
ASCoT’s gearing
ASCoT employs gearing tactically to take advantage of periods of stress in economies and financial markets. It is currently geared for the fourth time in its history, having drawn on its borrowing facility amid the pandemic in early 2020. Since then, gearing has enhanced ASCoT’s returns. The valuations of small
Active share
Active share is a measure of how different a portfolio is from an index. The higher a portfolio’s active share, the higher its chance of performing differently from the index, for better or worse. The Managers target an active share ratio of at least 70% for ASCoT’s portfolio compared with the DNSCI (XIC). At
Value roll and portfolio turnover
The main influence on ASCoT’s portfolio turnover in any period is usually the stockmarket’s appetite for small
Portfolio turnover is defined as the lower of purchases and sales divided by the average portfolio value. ASCoT’s long term average rate of turnover is 33%. In the twelve months to
Valuations
Price earnings (PE) ratio: 35 year average At31 December 2024 At30 June 2025 World equities* 15.8x 17.7x 18.0x FTSE All-Share 15.3x 14.6x 16.2x Smaller companies** 13.5x 11.9x 12.5x ASCoT’s portfolio 12.0x 9.6x 10.1x
* Source: Bloomberg; Panmure Liberum ** DNSCI (XIC) to 2013 then Tracked Universe
As the table above shows, ASCoT’s portfolio continues to benefit from the triple valuation discount that was described in last year’s reports – ASCoT’s portfolio PE is below that of smaller companies, which is below that of large
The next table turns to forward valuations and uses the Managers’ favoured metric, EV/EBITA (enterprise value to earnings before interest, tax and amortisation). Ratios are set out for the portfolio, the Tracked Universe and certain subdivisions of the Tracked Universe. The profits underlying the ratios are based on the Managers’ forecasts for each company that they track. The bullet points following the table summarise its main messages.
EV/EBITA 2024 2025 2026 ASCoT’s portfolio (79 stocks) 8.0x 7.9x 6.7x Tracked Universe (230 stocks) 11.2x 10.5x 9.3x - Growth stocks 16.0x 15.1x 13.6x - Other stocks 10.6x 9.9x 8.7x - Overseas facing stocks 10.2x 9.8x 8.3x - Domestic facing stocks 12.0x 11.1x 10.0x - “Smaller small” stocks 9.3x 8.9x 7.6x - “Larger small” stocks 11.9x 11.1x 9.9x
-- The ratios are lower for 2025 than for 2024. The Managers anticipate
modest profit growth in 2025, as lower interest rates and real wage
growth still seem likely to offset the increased uncertainty related to
trade wars and the Budget.
-- The average EV/EBITA multiples of the portfolio are lower than those of
the Tracked Universe. This reflects the Managers’ value investment style
and the influence of the more highly valued growth stocks on the Tracked
Universe’s multiples.
-- The valuation of overseas facing companies (those with more than 60% of
revenues outside the UK ) is lower than that of domestic facing companies
(those with more than 60% of revenues in the UK ). For much of the last
ten years, the reverse has been the case. Owing to the EU referendum and
the pandemic, domestically oriented companies have tended to trade on
lower multiples. However, tariff risk, which is more threatening to
overseas facing businesses, has narrowed the gap and broadened the
opportunity base for the value investor.
-- As noted in the section above on size, the “smaller small” companies
within the DNSCI (XIC) remain more attractively valued than do the
“larger smalls”.
-- Takeovers over the past twelve months were struck on average on a
multiple of 16.2. This compares with the portfolio’s 2025 EV/EBITA of
7.9x.
Outlook and conclusion
Six months ago, American exceptionalism was celebrated and gauged by the success of the US stockmarket. Today, the investment outlook has been complicated by Donald Trump’s convulsive second presidency and its challenge to some of the assumptions that have long underpinned the financial world. Dollar weakness may well be welcomed by the Trump administration and has been seen before, but the present bout is accompanied by debate about whether the dollar risks losing the exorbitant privilege of reserve currency status. There is also debate about the risk-free nature of US government debt, as fiscal spending looks set to rise under the “One Big Beautiful Bill Act” and as foreign governments, disconcerted by the tariffs, question the wisdom of parking their reserves in treasuries. Even the US stockmarket has lost some of its lustre. The potential impact of the tariffs on the profits of US businesses has seen European equities outshine their US counterparts so far in 2025. The uncertainty emanating from the US complicates investment decisions, whether for businesses considering capital projects or fund managers selecting stocks.
The
Against this backdrop,
An important aspect of the recent performance of smaller companies is that it is not driven by fundamental factors. Dividend growth is a useful gauge of fundamental progress since there is a long history of data and it cannot diverge meaningfully from profit growth over time. Using the most recent
Judging by the valuations, the stockmarket is uninterested in the resilience and superior growth of smaller companies. Rather, it seems distracted by their relative illiquidity and volatility, but this obsession risks missing the point of investment in the asset class. The small company premium – i.e. the long term out-performance by smaller companies against larger companies – is inextricably tied up with a willingness to take on liquidity and volatility risk. Those able and willing to commit their capital to smaller companies are rewarded over time for taking on that risk.
ASCoT is well placed to take advantage of the present situation. Its valuation advantage is even greater than that of smaller companies, as previously demonstrated in this report. Its dividend record demonstrates that it benefits from the superior dividend growth available from the asset class. Its closed-ended structure means that it can commit to investment in the attractively valued “smaller small” companies, without the concern of a demand for liquidity. Its diversified portfolio reduces the volatility risk of an individual small cap stock and spreads it over 79 holdings. Furthermore, its tactical gearing and share buy-backs can enhance portfolio returns and reward shareholders who commit their capital to ASCoT.
None of these points means that ASCoT is impervious to today’s macro-economic and geopolitical threats, or indeed those to come. They do, however, improve the likelihood of a good investment experience over time, particularly when other companies, overseas investors and private equity are already taking advantage of the valuations on offer among small
Managers
INTERIM MANAGEMENT REPORT
A review of the half year and the outlook for the Company can be found in the Chairman’s Statement and the Managers’ Report.
Risks and Uncertainties
The Directors have a process for identifying, evaluating and managing the principal and emerging risks faced by the Company. The Board believes that the Company has a relatively low risk profile in the context of the investment trust industry. This belief arises from the fact that the Company has a simple capital structure; invests only in small
The principal risks faced by the Company relate to investment strategy/performance, market risk, share price discount, gearing, reputational risk and regulatory risk. An explanation of these risks and how they are managed can be found in the Strategic Report contained within the 2024 Annual Report. These principal risks and uncertainties continue to apply as disclosed in the 2024 Annual Report and as updated by the Managers' Report in these interim statements.
Going Concern
The Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. The Directors' assessment included consideration of the triennial continuation vote; the next vote will take place at the
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge:
(i) the condensed set of financial statements has been prepared in accordance with Financial Reporting Standard 104 “Interim Financial Reporting”.
(ii) the Half Yearly Report includes a fair review of information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events during the first six months of the year and their impact on the financial statements together with a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being disclosure of related party transactions and changes therein.
(iii) the Half Yearly Report, taken as whole, is fair, balanced and understandable and provides information necessary for Shareholders to assess the Company’s performance, objective and strategy.
On behalf of the Board
INCOME STATEMENT (unaudited)
For the six months ended
Revenue Capital Total
£’000 £’000 £’000
Realised net gains on sales - 57,056 57,056
Movement in fair value - (651) (651)
_______ _______ _______
Net gains on investments - 56,405 56,405
Investment income 30,034 - 30,034
Other income 47 - 47
Investment management fee (Note 2) (1,789) (2,981) (4,770)
Portfolio transaction costs - (894) (894)
Other expenses (473) - (473)
_______ _______ _______
Net return before finance costs and tax 27,819 52,530 80,349
Finance costs (Note 2) (1,028) (1,714) (2,742)
_______ _______ _______
Return on ordinary activities before tax 26,791 50,816 77,607
Tax on ordinary activities - - -
_______ _______ _______
Return attributable to equity shareholders 26,791 50,816 77,607
_______ _______ _______
Returns per Ordinary Share (Note 4) 32.64p 61.92p 94.56p
Dividends
On
For the six months ended
Revenue Capital Total
£’000 £’000 £’000
Realised net gains on sales - 73,968 73,968
Movement in fair value - 72,570 72,570
_______ _______ _______
Net gains on investments - 146,538 146,538
Investment income 27,050 - 27,050
Other income 57 - 57
Investment management fee (Note 2) (1,770) (2,950) (4,720)
Portfolio transaction costs - (1,102) (1,102)
Other expenses (427) - (427)
_______ _______ _______
Net return before finance costs and tax 24,910 142,486 167,396
Finance costs (Note 2) (1,239) (2,066) (3,305)
_______ _______ _______
Return on ordinary activities before tax 23,671 140,420 164,091
Tax on ordinary activities - - -
_______ _______ _______
Return attributable to equity shareholders 23,671 140,420 164,091
_______ _______ _______
Returns per Ordinary Share (Note 4) 28.12p 166.78p 194.90p
For the year ended
Revenue Capital Total
£’000 £’000 £’000
Realised net gains on sales - 114,531 114,531
Movement in fair value - 1,833 1,833
_______ _______ _______
Net gains on investments - 116,364 116,364
Investment income 54,506 - 54,506
Other income 118 - 118
Investment management fee (Note 2) (3,708) (6,180) (9,888)
Portfolio transaction costs - (2,179) (2,179)
Other expenses (858) - (858)
_______ _______ _______
Net return before finance costs and tax 50,058 108,005 158,063
Finance costs (Note 2) (2,427) (4,045) (6,472)
_______ _______ _______
Return on ordinary activities before tax 47,631 103,960 151,591
Tax on ordinary activities - - -
_______ _______ _______
Return attributable to equity shareholders 47,631 103,960 151,591
_______ _______ _______
Returns per Ordinary Share (Note 4) 56.59p 123.50p 180.09p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
(unaudited)
For the six months ended
Capital
Share capital Special Capital Revenue Total
redemption reserve1 reserve1 reserve
£’000 reserve £’000
£’000 £’000 £’000
£’000
Balance as at
31 December 838 150 30,469 1,262,006 103,854 1,397,317
2024
Return on
ordinary - - - 50,816 26,791 77,607
activities
after tax
Equity - - - - (29,960) (29,960)
dividends paid
Purchase of
Ordinary (22) 22 (30,469) (873) - (31,342)
Shares
_______ _______ _______ ________ _______ ________
Balance as at 816 172 - 1,311,949 100,685 1,413,622
30 June 2025
_______ _______ _______ ________ _______ ________
1 see Note 8.
For the year ended
Capital
Share capital Special Capital Revenue Total
redemption reserve reserve reserve
£’000 reserve £’000
£’000 £’000 £’000
£’000
Balance as at
31 December 844 144 38,840 1,158,046 99,353 1,297,227
2023
Return on
ordinary - - - 103,960 47,631 151,591
activities
after tax
Equity - - - - (43,130) (43,130)
dividends paid
Purchase of
Ordinary (6) 6 (8,371) - - (8,371)
Shares
_______ _______ _______ ________ _______ ________
Balance as at
31 December 838 150 30,469 1,262,006 103,854 1,397,317
2024
_______ _______ _______ ________ _______ ________
For the six months ended
Capital
Share capital Special Capital Revenue Total
redemption reserve reserve reserve
£’000 reserve £’000
£’000 £’000 £’000
£’000
Balance as at
31 December 844 144 38,840 1,158,046 99,353 1,297,227
2023
Return on
ordinary - - - 140,420 23,671 164,091
activities
after tax
Equity - - - - (31,686) (31,686)
dividends paid
Purchase of
Ordinary (3) 3 (3,695) - - (3,695)
Shares
_______ _______ _______ ________ _______ ________
Balance as at 841 147 35,145 1,298,466 91,338 1,425,937
30 June 2024
_______ _______ _______ ________ _______ ________
BALANCE SHEET
(unaudited)
As at
30 June 31 December 30 June
2025 2024 2024
£’000 £’000 £’000
Fixed assets
Investments at fair value through profit or loss 1,479,851 1,497,304 1,519,222
(Note 5)
________ ________ ________
Current assets
Investment income receivable 3,410 2,794 2,086
Amounts due from brokers 4,764 - 894
Other debtors 104 80 93
Cash at bank 4,719 1,349 5,691
________ ________ ________
12,997 4,223 8,764
________ ________ ________
Creditors(amounts falling due within one year)
Amounts due to brokers (4,746) (34) (3,892)
Bank debt facility (Note 2) (73,940) - -
Other creditors (540) (268) (282)
________ ________ ________
(79,226) (302) (4,174)
________ ________ ________
Net current (liabilities)/assets (66,229) 3,921 4,590
________ ________ ________
1,413,622 1,501,225 1,523,812
Total assets less current liabilities
________ ________ ________
Creditors(amounts falling due after more than
one year)
Bank debt facility (Note 2) - (103,908) (97,875)
________ ________ ________
TOTAL NET ASSETS 1,413,622 1,397,317 1,425,937
________ ________ ________
CAPITAL AND RESERVES: EQUITY INTERESTS
Share Capital
Ordinary Shares 816 838 841
Reserves
Capital redemption reserve 172 150 147
Special reserve (Note 8) - 30,469 35,145
Capital reserve (Note 8) 1,311,949 1,262,006 1,298,466
Revenue reserve 100,685 103,854 91,338
________ ________ ________
TOTAL SHAREHOLDERS’ FUNDS 1,413,622 1,397,317 1,425,937
________ ________ ________
Net Asset Value per share (Note 6) 1,731.97p 1,666.95p 1,694.73p
CASH FLOW STATEMENT
(unaudited)
For the six months ended
Six months ended Six months ended Year ended
30 June 2025 30 June 2024 31 December 2024
£’000 £’000 £’000
Net cash inflow from 24,451 22,441 43,673
operating activities
Investing activities
Purchases of investments (112,510) (163,680) (307,701)
Sales of investments 185,422 156,872 288,596
_______ _______ _______
Cash inflow/(outflow) from 72,912 (6,808) (19,105)
investing activities
Financing activities
Purchases of Ordinary Shares (31,342) (3,695) (8,371)
Equity dividends paid (29,960) (31,686) (43,130)
Interest and fees paid (2,691) (3,295) (6,452)
Gross drawdowns of bank debt 45,000 56,000 79,000
facilities (before any costs)
Gross repayments of bank debt (75,000) (30,000) (47,000)
facilities (before any costs)
_______ _______ _______
Cash (outflow) from financing (93,993) (12,676) (25,953)
activities
Change in cash during the 3,370 2,957 (1,385)
period
_______ _______ _______
Cash at the start of the 1,349 2,734 2,734
period
Cash at the end of the period 4,719 5,691 1,349
_______ _______ _______
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Standards
The financial statements have been prepared on a going concern basis and in accordance with the Financial Reporting Standard 104 and the AIC’s Statement of Recommended Practice “Financial Statements of
2. Investment Management Fee and Bank Borrowings
The Managers,
The investment management fee and finance costs of bank borrowings have been allocated 62.5% to capital reserve and 37.5% to revenue reserve, in line with the Board’s expected long term split of returns, in the form of capital gains and income respectively, from the investment portfolio of the Company.
The Company has a three year unsecured £130m Facility Agreement with
3. Dividends
Six months ended Six months ended Year ended
30 June 2025 30 June 2024 31 December 2024
£’000 £’000 £’000
Amounts recognised as
distributions to eligible
equity holders in the period:
Final dividend of 28.55p for
the year ended 31 December - 24,091 24,091
2023
Special dividend of 9.00p for
the year ended 31 December - 7,595 7,595
2023
Interim dividend of 13.60p
for the year ended 31 - - 11,444
December 2024
Final dividend of 30.00p for
the year ended 31 December 24,967 - -
2024
Special dividend of 6.00p for
the year ended 31 December 4,993 - -
2024
______ ______ ______
29,960 31,686 43,130
______ ______ ______
The interim dividend for the year ending
4. Returns per Ordinary Share
The returns per Ordinary Share are based on the following.
30 June 30 June
31 December 2024
2025 2024
Returns attributable to Ordinary £77,607,000 £164,091,000 £151,591,000
Shareholders
Weighted average number of shares in 84,175,009
issue during the period 82,068,645 84,192,569
Return per Ordinary Share 94.56p 194.90p 180.09p
5. Investments at fair value
In accordance with FRS 102 and FRS 104, fair value measurements have been classified using the fair value hierarchy:
Level 1 - using unadjusted quoted prices for identical instruments in an active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is unavailable).
Investments held at fair value through profit or loss
Level 1 Level 2 Level 3 Total
As at 30 June 2025 £'000 £'000 £'000 £'000
Listed equities 1,479,851 - - 1,479,851
Unlisted equities - - - -
________ ________ ________ ________
Total financial asset investments 1,479,851 - - 1,479,851
________ ________ ________ ________
At
6. Net Asset Value per Ordinary Share
The net assets and the net asset value per share attributable to the Ordinary Shares at each period end are calculated in accordance with their entitlements in the Articles of Association and were as follows.
30 June 30 June
31 December 2024
2025 2024
Net assets attributable £1,413,622,000 £1,397,317,000 £1,425,937,000
Ordinary Shares in issue at end 81,619,105 83,824,605 84,139,605
of period
Net Asset Value per Ordinary 1,731.97p 1,666.95p 1,694.73p
Share
7. Share Capital
During the period, the Company bought back and cancelled 2,205,500 shares (2024: 275,000) at a cost of £31,342,000 (2024: £3,695,000). During the period 1 July to
8. Special and Capital Reserves
During the period, the Special Reserve, which was used to account for the cost of purchasing Ordinary Shares, was exhausted. Following this, the Capital Reserve represented by realised capital profits, is being used.
9. Related party transactions
There have been no transactions with related parties during the first six months of the current financial year that have materially affected the financial position or the performance of the Company. Under
10. Alternative Performance Measures
Alternative Performance Measures ("APMs") are measures that are not defined by FRS 102 and FRS 104. The Company believes that APMs, referred to within ‘Financial Highlights’ and in the Half Yearly Report, provide Shareholders with important information on the Company and are appropriate for an investment trust. These APMs are also a component of reporting to the Board. A glossary of APMs can be found in the 2024 Annual Report.
11. Further Information
The foregoing do not constitute statutory accounts of the Company (as defined in section 434(3) of the Companies Act 2006). The financial information for the year ended
Certain statements in this report are forward looking. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Accordingly, undue reliance should not be placed on forward looking statements.
Copies of the Half Yearly Report will be sent to shareholders and will be available shortly from
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
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