Fidelity Japan Trust Plc - Half-year Report
FIDELITY
Half-Yearly Results for the six months ended
Financial Highlights:
-- During the six-months ended 30 June 2025 , Fidelity Japan Trust PLC
Contacts
For further information, please contact:
Company Secretary
0207 961 4240
Chairman’s Statement
Very sadly, this will be the final report for the
PERFORMANCE FOR HALF-YEAR TO
The main influence on the Japanese equity market in the six months to 30 June has been the impact of the US government’s somewhat erratic tariff policy on certain sectors of the Japanese economy. Initially, this caused a sharp sell-off in the market followed by a strong rebound. Over the six months to 30 June the TOPIX Index rose by 3.2% in sterling terms. This compares to a rise of 3.3% in the net asset value (NAV) of the Company and a rise in the share price of 10.6% over that same period. The rise in the share price reflects the narrowing in the discount at which the share price has traded from 13.1% at the start of the year to end at 6.9%.
Since 30 June to
STRATEGIC REVIEW
After a period of significant underperformance of the Company over three and five years and the announcement of Portfolio Manager,
A formal strategic review process was begun in anticipation of the failed continuation vote. Proposals were received from a small number of
The Company’s Board had hoped to offer a choice to shareholders, particularly those for whom the
Accordingly, the Board concluded that a choice between electing for AJOT pursuant to a scheme of reconstruction or an election for cash should be put forward to the Company’s shareholders to approve at a meeting which is likely to be held in
Shareholders will, in due course, be receiving a detailed Circular setting out the timetable, instructions and forms necessary to make your election. This will also be available on the Company’s website ( http://www.fidelity.co.uk/japan ) and sent directly to registered shareholders. If you hold your shares through an investment platform, communication regarding the proposals will come from them. We strongly recommend that you contact your financial advisor if you are in any doubt as to the decision to take. If you make no election, the default will be that you will receive shares in AJOT.
DETAILS OF AVI
AJOT is a £242m investment trust launched in
The results of this investment process have been particularly strong in recent years. The NAV performance of AJOT to end of
1 year 3 years 5 years Inception1
AJOT
NAV (in sterling terms) +25.3% +65.6% +80.5% +89.7%
MSCI Japan Small Cap Index +13.4% +30.6% +26.4% +31.6%
======== ======== ======== ========
1 Being
Covering same
period since
1 year 3 years 5 years AJOT’s inception
on 23.10.2018
FJV
NAV (in sterling terms) +4.3% +26.1% +7.0% +29.3%
TOPIX Total Return Index +6.9% +37.0% +38.9% +49.1%
======== ======== ======== ========
In addition, AJOT has a strong discount control mechanism. As well as committing to buying back shares if the discount widens beyond 5%, it also has an option for shareholders to tender up to 100% of their shares on an annual basis at a small discount to NAV.
DISCOUNT MANAGEMENT
The Board has an active approach to discount management, the primary purpose of which is to reduce discount volatility. During the six month reporting period, a total of 1,579,848 ordinary shares were repurchased for holding in
GEARING
The level of gearing began the period under review at 24.0% and since May, when the Company failed its continuation vote, has been steadily reduced to 14.0% as at 30 June. It has been reduced even further since then and was 9.5% as at
UNLISTED COMPANIES
The Company has had the authority to invest up to 20% of its assets in unlisted companies. However, the Board has limited the proportion of the portfolio held in unlisted companies to a maximum of 10% while the IPO market in
As at
On
Under the terms of the agreement with the
ONGOING CHARGES
We do not provide an annualised ongoing charges figure in the Half Year Report. However, it is worth noting that the Company’s variable management fee arrangement allows for a partial refund of charges in the event of underperformance on a rolling three-year basis. This has resulted in a credit of £223,000 in the variable element of the management fee for the six months to
MANAGEMENT OF THE COMPANY’S PORTFOLIO SINCE THE AGM
Since the AGM on
OUTLOOK FOR THE JAPANESE MARKET
The outlook for the Japanese market remains positive with increasing participation from both foreign and domestic investors. The impact of the reforms of the
RECORD OF THANKS
When we reported ahead of the previous triennial continuation vote in 2022, the Company’s NAV performance under Nicholas Price’s management was over 40% ahead of its Reference Index over both three and five years. Successful styles can change, and sometimes rapidly, in the Japanese market. As we have seen over the recent years, it is unfortunate that this style has been out of favour and that the period of underperformance has persisted for so long.
Above all else, the Board would like to record their thanks to
Chairman
Portfolio Manager’s Review
MARKET REVIEW
The Japanese equity market navigated a volatile start to 2025, with a pronounced correction and a sharp recovery reflecting both external headwinds and domestic strengths. The US administration’s move to impose a 25% tariff on imported vehicles and parts, followed by a 10% universal import tariff and a specific 24% reciprocal rate targeting
At a sector level, domestic demand-oriented segments outperformed over the period, led by software & services, media & entertainment and real estate. Among key exporting industries, semiconductors outpaced the broader market. Conversely, automobiles, health care equipment and technology hardware, sectors that are susceptible to US tariffs, were among the notable laggards. In terms of style mid/small-cap growth stocks generated the strongest returns, whereas large-cap value names were relative laggards.
Domestically, Japanese companies reported a fourth consecutive year of record earnings and, while conservative guidance for fiscal 2025 reflected ongoing trade uncertainties, they continued to enhance shareholder returns. At a time of shifting allocations, particularly with regards to the US, this commitment to corporate reforms attracted renewed inflows from overseas investors, who were net buyers of Japanese stocks for three straight months to the end of
In economic news, Japan’s real GDP shrank by 0.2% annualised in the first three months of 2025, marking a first decline in four quarters. Nominal GDP grew strongly at +3.6% annualised, highlighting the impact of inflation. The main driver in Q1 was a sharp deterioration in net exports, reflecting a rebound in imports, likely due to front-loading ahead of US tariffs, and a decline in services exports (excluding inbound consumption). In contrast, business capital expenditure maintained a steady upward trend, underpinned by structural investments in technology and software as firms adapt to labour shortages and digitalisation. Private consumption remained flat, with weakness in goods spending amid rising inflation (especially foods) offsetting gains in services.
Nationwide inflation data for
PORTFOLIO REVIEW
Over the six months to
In the retail sector, the position in
Ryohin
Keikaku
, operator of the MUJI brand of
general merchandise stores, continued to outperform. Its share price has been buoyed by a sharp recovery in profitability, underpinned by growth in domestic same-store sales, the robust performance of its overseas operations (particularly in
In the transportation equipment sector,
Elsewhere, sporting equipment maker
Yonex
performed strongly, driven by sustained double-digit sales growth in key markets like
The positive performance of these and other positions was partially negated by the underperformance of Recruit Holdings . The global media and staffing company faced heightened uncertainty around the direction of US job openings and valuation compression among major technology firms adversely affected its share price. However, the increased adoption of AI-driven tools is continuing to support monetisation, despite macroeconomic headwinds.
In the precision instruments sector,
Riken
Keiki
faced higher personnel costs aimed at
strategic expansion in
Finally, shares in
MISUMI Group
, a supplier of machinery and automation parts, lost ground due to concerns about the indirect impact from US tariffs, and its apparent decision to target growth investments over buybacks. Nevertheless, we still anticipate resilient growth based on company-specific strategies, especially in
POSITIONING
As noted in our last annual report, our focus is on growth at a reasonable price and holding companies that are trading at or close to market multiples even as they offer consistent or superior medium-term growth potential. Many of the Japanese companies that we are looking at trade at a discount versus their overseas peers, and there are a lot of opportunities where improvements in corporate governance are driving higher returns on equity.
In this vein, we initiated several positions in the semiconductor space, drawing on the input from our tech analyst who has a positive view on the outlook for AI investments and related capex given broadening applications and demand. Semiconductor production equipment maker Tokyo Electron is positioned to benefit significantly from its continued market share expansion in critical semiconductor processes, driven by technological advancements. Rorze , a leading wafer handling equipment maker, is well positioned to benefit from wafer volume and process increases, as well as advanced packaging. Furthermore, a recent share buyback programme and its robust profitability metrics (over 20% return on equity) reinforce the company’s attractive valuation relative to peers.
On the other hand, we took profits in strong performers, including
Ryohin Keikaku
,
ENGAGEMENT
In the first six months of 2025, the sustainable investing team in
In terms of specific engagements with investee companies, we worked with
Riken Keiki
to reassess its capital policy following feedback from the
CONSTRUCTIVE OUTLOOK FOR
The performance of the Company has remained challenging in an environment where high interest rates have favoured value stocks, and worked against my natural tilt towards higher growth and mid/small-cap companies. The extent of recent underperformance relative to the Index remains a significant source of disappointment.
However, I strongly believe that the structural changes underway in
DOMESTIC REFLATION
At the macro level,
This wage-led inflation dynamic is changing corporate behaviour: managements once rewarded for hoarding cash are now incentivised to invest in productivity-enhancing automation and software, or to return surplus capital to shareholders. Meanwhile, the BoJ projects inflation to average around 2–2.5% in the coming years, marking a definitive break from Japan’s deflationary past. This is materially positive for nominal GDP, corporate earnings and tax revenues.
CORPORATE GOVERNANCE TRANSFORMATION
The Tokyo Stock Exchange’s cost-of-capital initiative forced companies with sub-par PBRs to articulate credible plans for improvement. Japanese corporate behaviour is now changing more broadly, with a heightened focus on capital allocation and shareholder value across the market.
Against this backdrop, we are seeing a notable increase in shareholder returns. Japanese listed companies have significantly increased their share buybacks, reaching a record ¥12 trillion in the first five months of this year. Dividends are rising in parallel, resulting in a total shareholder yield of around 4%.
Beyond distributions, strategic reforms such as the unwinding of inefficient parent-subsidiary listings, reductions in strategic cross-shareholdings and greater focus on core businesses, are improving capital allocation efficiency. Such governance reforms not only enhance transparency and investor confidence but also lay the groundwork for sustainably higher RoE, a critical factor for attracting long-term investment.
INVESTOR SENTIMENT AND MARKET PARTICIPATION
From a valuation perspective,
Moreover, the case for Japanese mid/small-caps looks compelling from both a valuation and fundamental perspective. This segment of the market is trading at a steep price-to-book discount to the larger-cap indices and no longer commands the price-to-earnings (P/E) premium it enjoyed over the past decade. Furthermore, earnings forecasts into 2026 are higher for mid and small caps, which tend to be more domestic-oriented and offer resilience in the face of external macro and geopolitical uncertainties.
Broader sentiment towards Japanese equities has also improved, driven by increasing engagement from both foreign and domestic investors. We are seeing renewed buying among overseas investors, many of whom view
While external challenges remain a near-term headwind, I believe that domestic structural drivers - reflation, robust corporate governance reforms, monetary policy stability and increasing domestic investor engagement - create a constructive medium to long-term outlook for the Japanese equity market.
It has been a great privilege to manage
Portfolio Manager
Thirty
The Portfolio Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Fair Value is the realisable value of the portfolio as reported in the Balance Sheet. Where a Contract for Difference (CFD) is held, the Fair Value reflects the profit or loss on the contract since it was opened and is based on how much the share price of the underlying share has moved. Where the Company only holds shares, the Fair Value and the Portfolio Exposure will be the same.
Fair Value Portfolio Exposure
Company Sector £’000 £’000 %1
Exposures –
shares unless
otherwise stated
Ryohin Keikaku
(shares and long Retail Trade 3,454 14,406 6.1
CFD)
Recruit Holdings
(shares and long Services 6,942 10,528 4.5
CFD)
Osaka Soda Chemicals 10,292 10,292 4.4
Tokyo Electron Electric 9,446 9,446 4.0
Appliances
Hitachi Electric 8,752 8,752 3.7
Appliances
Keyence (long Electric 264 8,677 3.7
CFD) Appliances
Yonex Other Products 7,844 7,844 3.3
Rorze Machinery 7,060 7,060 3.0
MISUMI Group
(shares and long Wholesale Trade 2,500 6,925 2.9
CFD)
Riken Keiki Precision 6,887 6,887 2.9
Instruments
Disco Machinery 6,804 6,804 2.9
IHI Corporation Machinery 6,783 6,783 2.9
Mizuho Financial Banks 6,442 6,442 2.7
Group
Asoview Unlisted 6,094 6,094 2.6
Sony Group Electric 5,850 5,850 2.6
Appliances
NOF (long CFD) Chemicals 129 4,998 2.1
Credit Saison Other Financing 4,836 4,836 2.1
Business
Mitsubishi Electric
Electric (shares Appliances 157 4,522 1.9
and long CFD)
Giftee Information & 4,459 4,459 1.9
Communication
C. Uyemura Chemicals 3,870 3,870 1.6
Kosaido Holdings Other Products 3,823 3,823 1.6
Hoya Precision 3,721 3,721 1.6
Instruments
Sanrio Wholesale Trade 3,615 3,615 1.5
Raksul Information & 3,593 3,593 1.5
Communication
Suzuki Motor Transportation 3,372 3,372 1.4
Equipment
Visional Information & 3,332 3,332 1.4
Communication
Concordia Banks 3,283 3,283 1.4
Financial Group
Central
Automotive Wholesale Trade 3,230 3,230 1.4
Products
Tokio Marine Insurance 3,167 3,167 1.3
Holdings
Go Inc Unlisted 3,166 3,166 1.3
--------------- --------------- ---------------
Thirty largest 143,167 179,777 76.2
exposures
Other exposures 86,411 88,952 37.8
(53 holdings)
--------------- --------------- ---------------
Total Portfolio
(including long 229,578 268,729 114.0
CFDs)
========= ========= =========
Fair Value and Portfolio Exposure of Investments as at
Fair Value Portfolio Exposure
£’000 £’000 %1
Investments 228,474 228,474 96.9
Derivative instrument assets – 1,104 40,255 17.1
long CFDs
--------------- --------------- ---------------
Total Portfolio (including long 229,578 268,729 114.0
CFDs)
========= ========= =========
Shareholders’ Funds 235,761
=========
Gearing2 14.0%
=========
1 Portfolio Exposure is expressed as a percentage of Shareholders’ Funds.
2 Gearing is the amount by which the Portfolio Exposure exceeds Shareholders’ Funds expressed as a Shareholders’ Funds.
Interim Management Report
PRINCIPAL RISKS AND UNCERTAINTIES
The Board, with the assistance of the Manager (
The Board considers that the principal risks and uncertainties faced by the Company continue to fall into the following categories: geopolitical risk; investment performance and gearing risks; natural disaster risk; market, economic and currency risks; competition risks and marketplace threats; discount control and demand risks; key person risk; legislation, taxation and regulatory risks; business continuity risk; cybercrime and information security risks; and environmental, social and governance (ESG) risks. Information on each of these risks is given in the Strategic Report section of the Annual Report for the year ended
The principal risks and uncertainties remain substantially the same as those at the last year end. There continues to be geopolitical tensions and economic and market events, including continued tensions such as those between
The Board are monitoring the specific risks arising from the reconstruction of the Company, described in the Chairman’s statement above. These risks will be described in detail as part of the Shareholder Circular.
Climate change continues to be a key principal risk confronting asset managers and their investors. Globally, climate change effects are already being experienced in the form of a changing pattern of weather events. Climate change can potentially impact the operations of investee companies, their supply chains and their customers. Additional risks may also arise from increased regulations, costs and net-zero programmes which can all impact investment returns. The Board notes that the Manager has integrated ESG considerations into the Company’s investment process. The Board will continue to monitor how this may impact the Company as a risk on investment valuations and potentially affect shareholder returns.
The Board and the Manager continued to monitor the emerging risks and rewards posed by the rapid advancement of artificial intelligence (AI) and technology and how this may threaten the Company’s activities and its potential impact on the portfolio and investee companies. AI can provide asset managers with powerful tools, such as enhancing data analysis risk management, trading strategies, operational efficiency and client servicing, all of which can lead to better investment outcomes and more efficient operations. However, with these advances in computer power that will impact society, there are risks from its increasing use and manipulation with the potential to harm, including a heightened threat to cybersecurity.
Market fluctuations will impact the value of shares in the Company. Risks are mitigated by the investment trust structure of the Company which means that the Portfolio Manager is not required to trade to meet investor redemptions.
The Manager has appropriate business continuity and operational resilience plans in place to ensure the continued provision of services. This includes investment team key activities, including those of portfolio managers, analysts and trading/support functions. The Manager reviews its operational resilience strategies on an ongoing basis and continues to take all reasonable steps in meeting its regulatory obligations, assess its ability to continue operating and the steps it needs to take to serve and support its clients, including the Board.
The Company’s other third-party service providers also have similar measures in place to ensure that business disruption is kept to a minimum.
TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES
The Manager has delegated the Company’s portfolio management and company secretariat services to
GOING CONCERN STATEMENT
At the Annual General Meeting on
In anticipation of the continuation vote not passing, the Board announced on
formal proposals to be made privately to the Board. Following this, the Board has received formal written non-binding proposals from a small number of
It is expected that the Scheme will be effective no later than the end of
BY ORDER OF THE BOARD
Directors’ Responsibility Statement
The Disclosure and Transparency Rules (DTR) of the
The Directors confirm to the best of their knowledge that:
· the condensed set of Financial Statements contained within the Half-Yearly Report has been prepared in accordance with the Financial Reporting Council’s Standard FRS 104: Interim Financial Reporting; and
· the Chairman’s Statement and the Portfolio Manager’s Review and the Interim Management Report above include a fair review of the information required by DTR 4.2.7R and 4.2.8R.
In line with previous years, the Half-Yearly Report has not been audited or reviewed by the Company’s Independent Auditor.
The Half-Yearly Report was approved by the Board on
Financial Statements
Income Statement for the six months ended
Six months ended 30 June 2025 Six months ended 30 June 2024 Year ended 31 December 2024
unaudited unaudited audited
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Gains/
(losses) on – 3,402 3,402 – (14,701) (14,701) – (11,906) (11,906)
investments
Gains on
derivative – 3,263 3,263 – 5,340 5,340 – 3,028 3,028
instruments
Income 4 2,344 – 2,344 2,428 – 2,428 4,095 – 4,095
Investment
management 5 (156) (401) (557) (171) (438) (609) (330) (847) (1,177)
fees
Other (435) (4) (439) (417) (13) (430) (764) (13) (777)
expenses
Foreign
exchange – (515) (515) – (265) (265) – (233) (233)
losses
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/
(loss) on
ordinary
activities 1,753 5,745 7,498 1,840 (10,077) (8,237) 3,001 (9,971) (6,970)
before
finance
costs and
taxation
Finance 6 (35) (138) (173) (16) (63) (79) (39) (158) (197)
costs
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/
(loss) on
ordinary 1,718 5,607 7,325 1,824 (10,140) (8,316) 2,962 (10,129) (7,167)
activities
before
taxation
Taxation on
return/
(loss) on 7 (205) – (205) (218) – (218) (356) – (356)
ordinary
activities
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/
(loss) on
ordinary 1,513 5,607 7,120 1,606 (10,140) (8,534) 2,606 (10,129) (7,523)
activities
before
taxation
========= ========= ========= ========= ========= ========= ========= ========= =========
Return/
(loss) per 8 1.33p 4.91p 6.24p 1.31p (8.25p) (6.94p) 2.17p (8.43p) (6.26p)
ordinary
share
========= ========= ========= ========= ========= ========= ========= ========= =========
The Company does not have any other comprehensive income. Accordingly, the net return/(loss) on ordinary activities after taxation for the period is also the total comprehensive income for the period and no separate Statement of Comprehensive Income has been presented.
The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.
No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations.
Statement of Changes in Equity for the six months ended
Share Capital Total
Share premium redemption Other Capital Revenue shareholders’
capital account reserve reserve reserve reserve funds
Note £’000 £’000 £’000 £’000 £’000 £’000 £’000
Six months
ended 30 June
2025
(unaudited)
Total
shareholders’ 34,041 20,722 2,767 21,525 155,287 (2,929) 231,413
funds at 31
December 2024
Repurchase of
ordinary 10 – – – (908) – – (908)
shares into
Treasury
Repurchase of
ordinary 10 (264) – 264 (1,864) – – (1,864)
shares for
cancellation
Net return on
ordinary
activities – – – – (5,607) 1,513 7,120
after
taxation for
the period
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 33,777 20,722 3,031 18,753 160,894 (1,416) 235,760
funds at 30
June 2025
========= ========= ========= ========= ========= ========= =========
Six months
ended 30 June
2024
(unaudited)
Total
shareholders’ 34,041 20,722 2,767 40,382 165,416 (5,535) 257,793
funds at 31
December 2023
Repurchase of
ordinary 10 – – – (11,620) – – (11,620)
shares into
Treasury
Net
(loss)/return
on ordinary
activities – – – – (10,140) 1,606 (8,534)
after
taxation for
the period
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 34,041 20,722 2,767 28,762 155,276 (3,929) 237,639
funds at 30
June 2024
========= ========= ========= ========= ========= ========= =========
Year ended 31
December 2024
(audited)
Total
shareholders’ 34,041 20,722 2,767 40,382 165,416 (5,535) 257,793
funds at 31
December 2023
Repurchase of
ordinary 10 – – – (18,857) – – (18,857)
shares into
Treasury
Net
(loss)/return
on ordinary
activities – – – – (10,129) 2,606 (7,523)
after
taxation for
the year
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 34,041 20,722 2,767 21,525 155,287 (2,929) 231,413
funds at 31
December 2024
========= ========= ========= ========= ========= ========= =========
Balance Sheet as at
Company Number 2885584
30.06.25 31.12.24 30.06.24
unaudited audited unaudited
Notes £’000 £’000 £’000
Fixed assets
Investments 9 228,474 228,344 236,215
--------------- --------------- ---------------
Current assets
Derivative instruments 9 1,104 1,457 814
Debtors 2,937 669 3,474
Cash collateral held with – 223 –
brokers
Cash at bank 5,889 1,897 500
--------------- --------------- ---------------
9,930 4,246 4,788
========= ========= =========
Current liabilities
Bank overdraft (7) – –
Derivative instruments 9 – (142) (74)
Other creditors (2,636) (1,035) (3,290)
--------------- --------------- ---------------
(2,643) (1,177) (3,364)
========= ========= =========
Net current assets 7,287 3,069 1,424
========= ========= =========
Net assets 235,761 231,413 237,639
========= ========= =========
Capital and reserves
Share capital 10 33,777 34,041 34,041
Share premium account 20,722 20,722 20,722
Capital redemption reserve 3,031 2,767 2,767
Other reserve 18,753 21,525 28,762
Capital reserve 160,894 155,287 155,276
Revenue reserve (1,416) (2,929) (3,929)
--------------- --------------- ---------------
Total shareholders’ funds 235,761 231,413 237,639
========= ========= =========
Net asset value per 11 207.39p 200.78p 198.79p
ordinary share
========= ========= =========
Notes to the Financial Statements
1 Principal Activity
2 Publication of Non-statutory Accounts
The Financial Statements in this Half-Yearly Report have not been audited by the Company’s Independent Auditor and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 (the Act). The financial information for the year ended
3 ACCOUNTING POLICIES
(i) Basis of Preparation
The Company has prepared its Financial Statements on a basis other than going concern and in accordance with
(ii) Non-Going Concern
At the Company’s Annual General Meeting held on
The Board had held discussions with representatives of a number of the Company’s largest shareholders and, following those discussions, in anticipation of Resolution 13 not passing, the Board announced on 17 April that it had started a formal review process to consider the future of the Company.
Subsequently, the Board announced on
4 Income
Six months Six months Year
ended ended ended
30.06.25 30.06.24 31.12.24
unaudited unaudited audited
£’000 £’000 £’000
Investment income
Overseas dividends 2,052 2,182 3,563
Derivative income
Dividends received on long CFDs 288 246 530
Other interest
Interest received on bank 4 – 2
deposits
--------------- --------------- ---------------
Total income 2,344 2,428 4,095
========= ========= =========
No special dividends have been recognised in capital during the period (six months ended
5 Investment Management Fees
Revenue Capital Total
£’000 £’000 £’000
Six months ended 30 June 2025
(unaudited)
Investment management fees – 156 624 780
base
Investment management fees – – (223) (223)
variable1
--------------- --------------- ---------------
156 401 557
========= ========= =========
Six months ended 30 June 2024
(unaudited)
Investment management fees – 171 682 853
base
Investment management fees – – (244) (244)
variable1
--------------- --------------- ---------------
171 438 609
========= ========= =========
Year ended 31 December 2024
(audited)
Investment management fees – 330 1,318 1,648
base
Investment management fees – – (471) (471)
variable1
--------------- --------------- ---------------
330 847 1,177
========= ========= =========
1 For the calculation of the variable management fee element, the Company’s NAV return was compared to the Reference Index return on a daily basis. The period used to assess the performance is on a rolling three year basis.
FII charges base investment management fees at an annual rate of 0.70% of net assets. In addition, there is a +/- 0.20% variation fee based on performance relative to the Reference Index. Fees are payable monthly in arrears and are calculated on a daily basis.
The base investment management fees have been allocated 80% to Capital reserve in accordance with the Company’s accounting policies.
6 Finance Costs
Revenue Capital Total
£’000 £’000 £’000
Six months ended 30 June 2025
(unaudited)
Interest paid on long CFDs 34 134 168
Interest paid on bank deposits 1 4 5
and collateral1
--------------- --------------- ---------------
35 138 173
========= ========= =========
Six months ended 30 June 2024
(unaudited)
Interest paid on long CFDs 15 59 74
Interest paid on bank deposits 1 4 5
and collateral1
--------------- --------------- ---------------
16 63 79
========= ========= =========
Year ended 31 December 2024
(audited)
Interest paid on long CFDs 37 150 187
Interest paid on bank deposits 2 8 10
and collateral1
--------------- --------------- ---------------
39 158 197
========= ========= =========
1 Due to negative interest rates in the prior year, the Company paid interest on its collateral and deposits.
Finance costs have been allocated 80% to Capital reserve in accordance with the Company’s accounting policies.
7 Taxation on Return/(Loss) on Ordinary Activities
Six months Six months Year
ended
ended ended 31.12.24
30.06.25 30.06.24 audited
unaudited unaudited £’000
£’000 £’000
Overseas taxation 205 218 356
========= ========= =========
8 Return/(Loss) per Ordinary Share
Six months Six months Year
ended ended ended
30.06.25 30.06.24 31.12.24
unaudited unaudited audited
Revenue return per ordinary 1.33p 1.31p 2.17p
share
Capital return/(loss) per 4.91p (8.25p) (8.43p)
ordinary share
--------------- --------------- ---------------
Total return/(loss) per ordinary 6.24p (6.94p) (6.26p)
share
========= ========= =========
The return/(loss) per ordinary share is based on the net return/(loss) on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares held outside of
£’000 £’000 £’000
Net revenue return on ordinary 1,513 1,606 2,606
activities after taxation
Net capital return/(loss) on
ordinary activities after 5,607 (10,140) (10,129)
taxation
--------------- --------------- ---------------
Net total return/(loss) on
ordinary activities after 7,120 (8,534) (7,523)
taxation
========= ========= =========
Number Number Number
Weighted average number of ordinary shares 114,031,314 122,901,516 120,169,404
held outside of Treasury during the period
========= ========= =========
9 Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of three levels, according to the relative reliability of the inputs used to estimate the fair values.
Classification Input
Level 1 Valued using quoted prices in active markets for identical
assets.
Valued by reference to inputs other than quoted prices included
Level 2 in level 1 that are observable (i.e. developed using market data)
for the asset or liability, either directly or indirectly.
Level 3 Valued by reference to valuation techniques using inputs that are
not based on observable market data.
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset. The valuation techniques used by the Company are as disclosed in the Company’s Annual Report for the year ended
Level 1 Level 2 Level 3 Total
30 June 2025 £’000 £’000 £’000 £’000
(unaudited)
Financial assets
at fair value
through profit
or loss
Investments 212,101 – 16,373 228,474
Derivative
instrument – 1,104 – 1,104
assets
--------------- --------------- --------------- ---------------
212,101 1,104 16,373 229,578
========= ========= ========= =========
Financial
liabilities at
fair value
through profit
or loss
Derivative
instrument – – – –
liabilities
========= ========= ========= =========
Level 1 Level 2 Level 3 Total
31 December 2024 £’000 £’000 £’000 £’000
(audited)
Financial assets
at fair value
through profit
or loss
Investments 213,026 – 15,318 228,344
Derivative
instrument – 1,457 – 1,457
assets
--------------- --------------- --------------- ---------------
213,026 1,457 15,318 229,801
========= ========= ========= =========
Financial
liabilities at
fair value
through profit
or loss
Derivative
instrument – (142) – (142)
liabilities
========= ========= ========= =========
Level 1 Level 2 Level 3 Total
30 June 2024 £’000 £’000 £’000 £’000
(unaudited)
Financial assets
at fair value
through profit
or loss
Investments 221,837 – 14,378 236,215
Derivative
instrument – 814 – 814
assets
--------------- --------------- --------------- ---------------
221,837 814 14,378 237,029
========= ========= ========= =========
Financial
liabilities at
fair value
through profit
or loss
Derivative
instrument – (74) – (74)
liabilities
========= ========= ========= =========
30.06.25 31.12.24 30.06.24
unaudited audited unaudited
Level 3 Investments (unlisted) £’000 £’000 £’000
Asoview 6,094 6,114 5,423
GO Inc 3,166 2,905 2,586
Moneytree 2,018 1,042 1,063
Studyplus 1,942 1,960 1,974
iYell 1,740 1,652 1,589
Spiber 843 1,014 1,034
Yoriso 570 631 709
--------------- --------------- ---------------
16,373 15,318 14,378
========= ========= =========
10 Share Capital
30 June 2025 31 December 2024 30 June 2024
unaudited audited unaudited
Nominal Nominal Nominal
Number of value Number of value Number of value
shares £’000 shares £’000 shares £’000
Issued,
allotted and
fully paid
Ordinary
shares of 25
pence each
held outside
of Treasury
Beginning of 115,257,714 28,814 126,086,249 31,521 126,086,249 31,521
the period
Ordinary
shares
repurchased (525,744) (131) (10,828,535) (2,707) (6,545,426) (1,636)
into
Treasury
Ordinary
shares
repurchased (1,054,104) (264) – – – –
for
cancellation
--------------- --------------- --------------- --------------- --------------- ---------------
End of the 113,677,866 28,419 115,257,714 28,814 119,540,823 29,885
period
========= ========= ========= ========= ========= =========
Ordinary
shares of 25
pence each
held in
Treasury1
Beginning of 20,903,981 5,227 10,075,446 2,520 10,075,446 2,520
the period
Ordinary
shares
repurchased 525,744 131 10,828,535 2,707 6,545,426 1,636
into
Treasury
--------------- --------------- --------------- --------------- --------------- ---------------
End of the 21,429,725 5,358 20,903,981 5,227 16,620,872 4,156
period
========= ========= ========= ========= ========= =========
Total share 33,777 34,041 34,041
capital
========= ========= =========
1
Ordinary shares held in
The Company repurchased 525,744 ordinary shares for the six months to
The Company also repurchased 1,054,104 ordinary shares for the six months to
11 Net Asset Value per Ordinary Share
The calculation of the net asset value per ordinary share is based on the total shareholders’ funds divided by the number of ordinary shares held outside of
30.06.25 31.12.24 30.06.24
unaudited audited unaudited
Total shareholders’ funds £235,761,000 £231,413,000 £237,639,000
Ordinary shares held outside of Treasury 113,677,866 115,257,714 119,540,823
at the period end
Net asset value per ordinary share 207.39p 200.78p 198.79p
========= ========= =========
It is the Company’s policy that shares held in
12 Transactions with the Manager and Related Parties
During the period, the Company had the following transactions payable to FII.
Six months Six months Year
ended
ended ended 31.12.24
30.06.25 30.06.24 audited
unaudited unaudited £’000
£’000 £’000
Portfolio management services 557 609 1,177
Secretarial and administration fees 25 25 50
Marketing services 147 93 175
========= ========= =========
At the Balance Sheet date, the following balances payable to FII were accrued and included in other creditors:
Six months Year Six months
ended
ended 31.12.24 ended
30.06.25 audited 30.06.24
unaudited £’000 unaudited
£’000 £’000
Portfolio management services 98 97 97
Secretarial and administration fees 25 13 13
Marketing services 13 87 63
========= ========= =========
As at
The annual fee structure from
1 January
2025
£
Chairman 44,250
Senior Independent Director 34,000
Chairman of the Audit Committee 37,000
Director 31,500
=========
As at
Six months
ended
30.06.25
unaudited
David Barron 19,366
Myra Chan –
Seiichi Fukuyama 11,000
David Graham 78,489
Sarah MacAulay 228,340
=========
13 POST BALANCE SHEET EVENTS
As mentioned in the Chairman’s Statement, on
Following the recent announcement of the proposed combination with AJOT, the approximate costs associated with the transaction have been determined. The Board estimates the fixed advisory costs and expenses in respect of the recent review process and the Scheme will be no greater than approximately £800,000 including VAT. These costs will be borne by the Company. This estimate excludes the liquidator's retention, any portfolio realisation costs, and the termination costs.
The financial information contained in this Half-Yearly Results Announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended
The information for the year ended
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
A copy of the Half-Yearly Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM
The Half-Yearly Report will also be available on the Company's website at www.fidelity.co.uk/japan where up to date information on the Company, including daily NAV and share prices, factsheets and other information can also be found.
