Artemis UK Future Leaders Plc - Interim Financial Report
LEI: 549300K1D1P23R8U4U50
Interim Financial Report
The following text is extracted from the Interim Financial Report of the Company for the half year ended
www.artemisfunds.com/futureleaders
A copy of the Interim Financial Report will also be submitted to the National Storage Mechanism and will shortly be available for inspection online at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Chairman’s Statement
Dear shareholders,
I am writing to report the results for the six months ended
Performance and markets
The performance reflects a period of modest recovery in
The market environment has remained volatile, influenced by inflationary concerns, geopolitical tensions and softness in domestic consumption. Although pockets of opportunity have emerged, especially among high-quality, cash-generative smaller businesses, broader sentiment to
Dividends and dividend policy
Our dividend policy remains unchanged: to distribute all available revenue income in the form of quarterly dividends, supplemented, as necessary, by realised capital reserves. The policy target is a 4% dividend yield (based on the year-end share price) for the year ending
For the six-month period to
Update on the transition to Artemis
As shareholders will recall, Artemis were appointed as the Trust’s manager in
The new managers have repositioned the portfolio towards companies with robust balance sheets, strong cashflows and long-term growth potential. At the same time, they have been careful to manage transition costs and market impact. While the benefits of this transition will take time to be fully reflected in performance, the Board remains confident that the Trust is now well placed under the stewardship of Artemis.
Outlook
The managers have been saying for some time that the
It is possible that the managers are wrong and the
On the one hand, if employment holds up, consumer confidence and spending may slowly increase. This pushes up economic growth in the
On the other hand, the
Final thoughts
On behalf of the Board, I would like to thank shareholders for your ongoing support during this transitionary period. We continue to believe in the long-term potential of the Trust and are confident that the appointment of Artemis, together with our robust dividend policy and active stewardship, will assist in delivering sustainable returns.
We remain closely aligned with shareholder interests and committed to clear, transparent communication. I look forward to updating you further as we move into the second half of the year.
Chairman
Portfolio Managers’ report
Statement from the previous managers
Invesco Perpetual
During this period the fund managers had been instructed by the Board to administer the portfolio on a ‘care and maintenance’ basis. We were asked not to purchase any new holdings and to take instructions on sales and reductions in holdings in order to raise funds for the redemption of the debt facility. Effectively we were taking instructions from the Board and Artemis via the Board.
Portfolio managers until
Performance
Since we took charge of the trust on 7 March, NAV has risen by 6.5% compared with gains of 11.6% from its benchmark. It took us less than three months to reposition the portfolio, so it better reflects our investment philosophy. With this process now complete, we have added a small amount of gearing to the trust which we hope can be taken as a sign of confidence, as should the fact that we have bought 726,000 shares in
Negatives
GB Group , a provider of identity-verification and fraud-prevention services, was a detractor from performance. Full-year results were in line with expectations, but some analysts cut forecasts for next year (in large part due to currency movements) despite management reiterating that they expect to meet full-year expectations. We remain positive on GB Group’s medium-term prospects and felt the share price reaction was overdone. An 8% free cashflow yield looks attractive to us for what is a business with a largely recurring earnings model. We added to our holding.
Victorian Plumbing Group
also performed poorly after cutting forecasts: most of the downgrade came from new investment in the acquired MFI brand in order to enter the adjacent
Translation services provider RWS delivered a couple of negative updates. It downgraded its expectations for profit before tax due to several issues including onboarding challenges with two new customers, weakness in its life sciences division and the impact of currency movements. The shares are now trading at just 5x earnings, there are no balance sheet issues and the incoming chief executive just bought 1 million shares. However, RWS has a lot of work to do to regain investors’ confidence.
Positives
Since we took charge of the trust on 10 March, the defence stocks in our portfolio have done well, with holdings in Avon Technologies, Chemring Group and Serco Group (which generates about 40% of its revenues from this area) rising strongly.
Our financial positions have fared even better. The portfolio’s best performer during the period was
Secure Trust Bank
, which fell significantly in October last year when three
At the time, we felt that the shares offered substantial potential upside, trading as they were at a 75% discount to book value. Since then, they have rebounded past their October starting price with the company’s loss-making vehicle finance book put into run-off. After the end of the reporting period, the
Pawnbroker
Another is buybacks: over the first half of the year we have seen a record number of holdings in our open-ended fund reduce their share count. We see this as indicative of management teams expressing the view that:
a) Their businesses have surplus capital (our median holding is forecast to have no net debt);
b) They are confident in the outlook; and
c) Their share prices do not reflect fundamental value.
Activity
With our portfolio rebalancing now effectively complete, there was a 75% overlap between the trust and our open-ended
If you are wondering why 25% is different, about 10 percentage points is in companies we own in both vehicles, but in different weights, while the other 15 percentage points is in companies we own in one and not the other (there will always be shares entering or exiting any live portfolio, while in some cases we have exposure to the same theme across both vehicles through different companies).
With so many changes in the portfolio, we thought it would be more instructive to focus on the four largest holdings – all of which are leaders in their niches.
• Serco Group – Serco Group is the market leader in government outsourcing. We like the visibility and inflation protection provided by its long-term contracts. The previous management team introduced greater rigour into the business and addressed some problematic contracts, leaving a very cash-generative, high-return-on-capital business with a strong balance sheet. We feel a 7% free cashflow yield is attractive.
• IntegraFin Holdings – IntegraFin Holdings is the parent company of the retail investment platform Transact. It has recurring revenue (which admittedly rises and falls with the market) and, unlike some of its competitors, does not earn any interest on client funds. It makes high margins, generates strong cashflows (we can think of few companies with a cleaner set of accounts) and operates in a segment that is seeing structural growth as investors migrate onto platforms. In addition, it has a very strong balance sheet with more than £200 million net cash. With these characteristics we see a free cashflow yield approaching 6% for next year as attractive.
• GB Group – GB Group is a market leader in online fraud prevention and identity verification and in many cases is embedded in its customers’ routes to market. Although there has been a post-Covid hangover (as online activity has reverted to more normal levels from an unsustainable position) we believe this remains a structurally growing market. It now has a strong balance sheet and trades on a high single-digit free cashflow yield.
•
Outlook
We continue to believe that the negative narrative that surrounds the
In the interim, we continue to see high levels of takeover activity – third parties attracted to the same traits as we are, taking a more positive view on the outlook and illustrating the degree of undervaluation of
Portfolio managers from
Principal risks and uncertainties
The Directors confirm that they have carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. Most of these risks are market related and are similar to those of other investment trusts investing primarily in listed markets. The Audit Committee reviews the Company’s risk control summary at each meeting, and as part of this process, gives consideration to identify emerging risks. Emerging risks, such as evolving cyber threats, geo-political tensions and climate related risks, have been considered during the period as part of the Directors’ assessment.
Principal Risk Description Mitigating Procedures and Controls Market (Economic) Risk Factors such as fluctuations in stock The Directors have assessed the market markets, interest rates and exchange impact of the ongoing uncertainty from rates are not under the control of the the unfavourable developments globally Board or the Portfolio Managers, but through regular discussions with the may give rise to high levels of Portfolio Managers and the Corporate volatility in the share prices of Broker. The Company’s current portfolio investee companies, as well as consists of companies listed on the main affecting the Company’s own share priceUK equity market and those listed on and the discount to its NAV. The risk AIM. To a limited extent, futures can be could be triggered by unfavourable used to mitigate against market developments globally and/or in one or (economic) risk, as can the judicious more regions, contemporary examples holding of cash or other very liquid being the market uncertainty in assets. Futures are not currently being relation to the wider political used. developments inUkraine , theMiddle East and the worldwide tariffs implemented by theUSA . The Portfolio Managers seek to mitigate risk through holding an economically diversified portfolio without concentrated macroeconomic bets.UK Smaller Companies in aggregate earn approximately 60% of their revenues from the domesticUK economy so the portfolio will be sensitive to both theUK macro economic outlook and sentiment towards theUK . Artemis’ preference is to invest in companies with strong balance sheets and strong cash generation which should be relatively better positioned to withstand economic shocks. We like companies with market leading positions which tend to be better able to pass through price increases to mitigate cost inflation. The portfolio is constructed without reference to the benchmark. The weighting that a stock is given is a Investment Risk function of anticipated share price upside, the level of conviction and the The Company invests in small and riskiness of an investment. A single medium-sized companies traded on the holding will typically not exceed 5% ofLondon Stock Exchange or on AIM. By the portfolio. The factor profile of the their nature, these are generally portfolio is also principally driven by considered riskier than their larger bottom-up stock picking although our counterparts and their share prices can investment risk team generates factor be more volatile, with lower liquidity. analysis for the investment team to In addition, as smaller companies may review on a regular basis. not generally have the financial strength, diversity and resources of Sustainability analysis is a core part larger companies, they may find it more of our stock analysis in both assessing difficult to overcome periods of the opportunities and risks facing economic slowdown or recession. companies over the medium to long term. We identify key ESG metrics for each company and track the disclosure and trend of these. Disclosures by companies in the investment universe can often be poor, so this is an area we engage on. The Portfolio Managers remain cognisant at all times of the potential liquidity of the portfolio. There can be no guarantee that the Company’s strategy and business model will be successful in achieving its investment objective. The Board monitors the performance of the Company, giving due consideration to how the Manager has incorporated ESG considerations including climate change into their investment process. The Board also has guidelines in place to ensure that the Managers adhere to the approved investment policy. The continuation of the Manager’s mandate is reviewed annually. The Board reviews regularly the Company’s investment objective and strategy to ensure that it remains relevant, as well as reviewing the Shareholders’ Risk composition of the shareholder register, peer group performance on both a share The value of an investment in the price and NAV basis, and the Company’s Company may go down as well as up and share price discount to NAV per share. an investor may not get back the amount The Board and the Portfolio Managers invested. maintain an active dialogue with the aim of ensuring that the market rating of the Company’s shares reflects the underlying NAV; both share buy back and issuance facilities are in place to help the management of this process. Reliance on the Manager and other Third-Party Service Providers The Company has no employees and the Board comprises non-executive directors only. The Company is therefore reliant upon the performance of third-party service providers for its executive Third-party service providers are function and service provisions. The subject to ongoing monitoring by the Company’s operational structure means Manager and the Board. that all cyber risk (information and physical security) arises at its The Manager reviews the performance of third-party service providers, all third-party providers regularly including fraud, sabotage or crime through formal and informal meetings. against the Company. The Company’s operational capability relies upon the The Audit Committee reviews regularly ability of its third-party service the performance and internal controls of providers to continue working the Manager and all third-party throughout the disruption caused by a providers through audited service major event such as the Covid-19 organisation control reports together pandemic. Failure by any service with updates on information security, provider to carry out its obligations the results of which are reported to the to the Company in accordance with the Board. terms of its appointment could have a materially detrimental impact on the The Manager’s business continuity plans operation of the Company and could are reviewed on an ongoing basis and the affect the ability of the Company to Directors are satisfied that the Manager successfully pursue its investment has in place robust plans and policy. The Company’s main service infrastructure to minimise the impact on providers, of which the Manager is the its operations so that the Company can principal provider, are listed on pages continue to trade, meet regulatory 28 to 29. obligations, report and meet shareholder requirements. The Board receives regular The Manager may be exposed to update reports from the Manager and reputational risks. In particular, the third-party service providers on Manager may be exposed to the risk that business continuity processes and has litigation, misconduct, operational been provided with assurance from them failures, negative publicity and press all insofar as possible that measures speculation, whether or not it is are in place for them to continue to valid, will harm its reputation. Damage provide contracted services to the to the reputation of the Manager could Company. potentially result in counterparties and third parties being unwilling to deal with the Manager and by extension the Company, which carries the Manager’s name. This could have an adverse impact on the ability of the Company to pursue its investment policy successfully. Regulatory Risk The Company is subject to various laws and regulations by virtue of its status as an investment trust, its listing on The Manager reviews the level of theLondon Stock Exchange and being an compliance with tax and other financialAlternative Investment Fund under the regulatory requirements on a regularUK AIFMD regime. A loss of investment basis. The Board regularly considers all trust status could lead to the Company risks, the measures in place to control being subject to corporation tax on the them and the possibility of any other chargeable capital gains arising on the risks that could arise. The Manager’s sale of its investments. Other control Compliance and Internal Audit team failures, either by the Manager or any produce annual reports for review by the other of the Company’s service Company’s Audit Committee. providers, could result in operational or reputational problems, erroneous disclosures or loss of assets through fraud, as well as breaches of regulations.
In the view of the Board, these principal risks and uncertainties are as much applicable to the remaining six months of the financial year as they were to the six months under review.
Portfolio of investments
At
Market Value Portfolio
Exposure*
Company Sector £’000 £'000 %
Serco Group Industrial Support Services 4,508 4,508 3.1
IntegraFin Holdings Investment Banking and 2,494 4,103^ 2.8
Brokerage Services
GB Groupᴬᴵᴹ Software and Computer Services 3,139 3,813^ 2.6
MONY Group Software and Computer Services 3,458 3,781^ 2.6
Brooks Macdonald Group Investment Banking and 3,629 3,629 2.5
Brokerage Services
Mears Group Industrial Support Services 3,485 3,485 2.4
Moonpig Group Retailers 3,141 3,475^ 2.4
Chemring Group Aerospace and Defence 3,421 3,421 2.3
Avon Technologies Aerospace and Defence 3,352 3,352 2.3
Secure Trust Bank Banks 3,263 3,263 2.2
NCC Group Software and Computer Services 2,167 3,231^ 2.2
Gamma Communications Telecommunications Service 2,473 3,143^ 2.2
Providers
Wilmington Media 2,200 3,043^ 2.1
Coats Group General Industrials 2,972 2,972 2.0
Telecom Plus Electricity 2,411 2,931^ 2.0
Dunelm Group Retailers 2,912 2,912 2.0
Hilton Food Group Food Producers 2,904 2,904 2.0
Morgan Sindall Group Construction and Materials 2,877 2,877 2.0
Hollywood Bowl Group Travel and Leisure 2,155 2,834^ 2.0
Future Media 1,323 2,784^ 1.9
Alpha Group Investment Banking and 2,717 2,717 1.9
International Brokerage Services
JTC Investment Banking and 1,986 2,684^ 1.8
Brokerage Services
Wickes Group Retailers 2,536 2,536 1.7
J D Wetherspoon Travel and Leisure 2,529 2,529 1.7
Norcros Construction and Materials 1,592 2,473^ 1.7
Victorian Plumbing Retailers 2,429 2,429 1.7
GroupAIM
On the Beach Group Travel and Leisure 2,361 2,361 1.6
RestoreAIM Industrial Support Services 2,338 2,338 1.6
Young & Co’s Brewery – Travel and Leisure 2,306 2,306 1.6
Non-VotingAIM
Halfords Group Retailers 2,228 2,228 1.5
GlobalDataAIM Industrial Support Services 2,198 2,198 1.5
DFS Furniture Retailers 2,194 2,194 1.5
Next 15 GroupAIM Media 2,185 2,185 1.5
Henry Boot Real Estate Investment and 1,473 2,157^ 1.5
Services
Tatton Asset Investment Banking and 2,133 2,133 1.5
ManagementAIM Brokerage Services
4Imprint Group Media 2,114 2,114 1.5
SSP Group Travel and Leisure 2,104 2,104 1.4
Oxford Instruments Electronic and Electrical 2,064 2,064 1.4
Equipment
Kainos Group Software and Computer Services 1,970 1,970 1.3
Johnson Service Group Industrial Support Services 1,955 1,955 1.3
MJ Gleeson Household Goods and Home 1,892 1,892 1.3
Construction
Harworth Group Real Estate Investment and 441 1,878^ 1.3
Services
Accesso Technology Software and Computer Services 1,871 1,871 1.3
GroupAIM
NetcallAIM Software and Computer Services 1,806 1,806 1.2
Energean Oil, Gas and Coal 1,783 1,783 1.2
RWSAIM Industrial Support Services 1,750 1,750 1.2
YouGovAIM Media 1,698 1,698 1.2
NIOX GroupAIM Medical Equipment and Services 1,660 1,660 1.1
Auction Technology Software and Computer Services 1,621 1,621 1.1
Group
TT Electronics Technology Hardware and 1,543 1,543 1.1
Equipment
LBG MediaAIM Media 1,537 1,537 1.1
M&C SaatchiAIM Media 1,428 1,428 1.0
Workspace Group Real Estate Investment Trusts 1,405 1,405 1.0
Morgan Advanced Electronic and Electrical 1,376 1,376 0.9
Materials Equipment
Videndum Industrial Engineering 1,371 1,371 0.9
Severfield Construction and Materials 1,369 1,369 0.9
Keller Group Construction and Materials 1,259 1,259 0.9
Jadestone EnergyAIM Oil, Gas and Coal 1,160 1,160 0.8
CLS Real Estate Investment and 1,065 1,065 0.7
Services
Warpaint LondonAIM Personal Goods 1,064 1,064 0.7
SIG Industrial Support Services 1,046 1,046 0.7
Beeks Financial Cloud
GroupAIM Software and Computer Services 1,017 1,017 0.7
Victrex Chemicals 842 842 0.6
FDM Group Industrial Support Services 506 506 0.3
Total Investments: 64 (31 134,206 146,083 100.0
January 2025: 60)
Ordinary shares unless stated otherwise.
* The Portfolio Exposure indicates the impact on market price movements resulting from the ownership of shares and derivative instruments. The Market Value represents the fair value of the portfolio, which is reflected on the Condensed Balance Sheet. In the case of holding a Contract for Difference (CFD), the Market Value reflects the profit or loss generated by the contract since its inception, based on the movement of the underlying share price. CFDs provide investors with the benefits and risks of owning a security without actually owning it. There is no delivery of physical goods or securities, which means that CFDs are generally regarded as an easier method of settlement because losses and gains are paid in cash. CFDs are disclosed in Derivative assets/liabilities at market value in the Condensed Balance Sheet on page 19. However, when the Company solely holds shares, both the Market Value and the Portfolio Exposure align.
AIM Investments quoted on AIM.
^ Includes CFD position.
Governance
Going Concern
The financial statements have been prepared on a going concern basis. The Directors, having considered the nature and liquidity of the portfolio, the Company’s investment objective and the Company’s projected income and expenditure, are satisfied that the Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of approval of the financial statements.
The Board is therefore satisfied that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. The Company has a portfolio of investments which are considered to be readily realisable and is able to meet all of its liabilities from its assets and income generated from them. Ongoing charges are around 0.84% of net assets.
Related Party Transactions and Transactions with the Manager
Note 19 of the Company’s 2025 Annual Financial Report gives details of related party transactions and transactions with the Manager. This report is available on the Company’s section of the Manager’s website at www.artemisfunds.com/futureleaders.
Directors’ Responsibility Statement in respect of the preparation of the Half-Yearly Financial Report
The Directors are responsible for preparing the Half-Yearly Financial Report using accounting policies consistent with applicable law and International Financial Reporting Standards.
The Directors confirm that to the best of their knowledge:
–
the condensed set of financial statements contained within the Half-Yearly Financial Report has been prepared in accordance with the
– the interim management report, together with the Chairman’s Statement and Portfolio Managers’ Report, includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA’s Disclosure Guidance and Transparency Rules; and
– the interim management report includes a fair review of the information required on related party transactions.
The Half-Yearly Financial Report has not been audited or reviewed by the Company’s auditor.
Signed on behalf of the Board of Directors.
Chairman
Condensed statement of comprehensive income
Six months ended Six months ended
31 July 2025 31 July 2024
(unaudited) (unaudited)
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
(Loss)/profit on investments – (498) (498) – 20,361 20,361
held at fair value
Income 2 2,381 – 2,381 2,855 – 2,855
Net gains on derivatives – 255 255 – – –
Investment management fee 3 (15) (359) (374) (98) (553) (651)
Other expenses (263) (1) (264) (238) (150) (388)
Profit/(loss) before finance 2,103 (603) 1,500 2,519 19,658 22,177
costs and taxation
Finance costs 3 (7) (44) (51) (41) (236) (277)
Profit/(loss) before taxation 2,096 (647) 1,449 2,478 19,422 21,900
Taxation 4 – – – – – –
Profit/(loss) after taxation 2,096 (647) 1,449 2,478 19,422 21,900
Return/(loss) per ordinary 6.90p (2.13)p 4.77p 7.33p 57.41p 64.74p
share
Weighted average number of
ordinary shares in issue during 30,373,362 33,826,929
the period
The total columns of this statement represent the Company’s statement of comprehensive income, prepared in accordance with
Condensed statement of changes in equity
Six months ended 31 July 2025 (unaudited)
Capital
Share Share redemption Capital Revenue
capital premium reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
At 31 January 2025 9,965 22,366 4,063 98,470 1,780 136,644
Total comprehensive – – – (647) 2,096 1,449
(loss)/income for the period
Dividends declared and paid – – – (1,607) (1,780) (3,387)
At 31 July 2025 9,965 22,366 4,063 96,216 2,096 134,706
Six months ended 31 July 2024 (unaudited)
Capital
Share Share redemption Capital Revenue
capital premium reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
At 31 January 2024 10,642 22,366 3,386 123,147 1,854 161,395
Total comprehensive income – – – 19,422 2,478 21,900
for the period
Dividends paid – – – (1,278) (1,854) (3,132)
At 31 July 2024 10,642 22,366 3,386 141,291 2,478 180,163
Condensed balance sheet
31
31 January
July
2025 2025
Notes £’000 £’000
Non-current assets
Investments held at fair value through profit or 134,163 143,920
loss
Current assets
Amounts due from brokers 1,427 2,404
Prepayments and accrued income 512 435
Cash and cash equivalents 94 2,472
Variation margin receivable 210 –
Derivative assets 168 –
2,411 5,311
Total assets 136,574 149,231
Current liabilities
Amounts due to brokers (225) –
Bank facility – (12,350)
Accruals (139) (237)
Dividends payable (1,169) –
Collateral pledged (210) –
Derivative liabilities (125) –
(1,868) (12,587)
Total assets less current liabilities 134,706 136,644
Net assets 134,706 136,644
Capital and reserves
Share capital 9,965 9,965
Share premium 22,366 22,366
Capital redemption reserve 4,063 4,063
Capital reserve 96,216 98,470
Revenue reserve 2,096 1,780
Total shareholders’ funds 134,706 136,644
Net asset value per ordinary share 443.50p 449.88p
Number of ordinary shares in issue at the period end 6 30,373,362 30,373,362
Chairman
Condensed statement of cash flows
Six months Six months
ended ended
31 July 31 July
2025 2024
Notes £’000 £’000
Cash flow from operating activities
Profit/(loss) before taxation 1,449 21,900
Finance costs 51 277
Adjustments for:
Purchases of investments (72,708) (15,495)
Sales of investments 83,169 17,427
Purchases of derivatives (43) –
10,418 1,932
Loss/(profit) on investments held at fair value 498 (20,361)
(Increase)/decrease in receivables (77) 46
(Decrease)/increase in payables (98) 186
Net cash inflow from operating activities 12,241 3,980
Cash flow from financing activities
Finance cost paid (51) (277)
Bank overdraft repayment – (8,753)
Bank facility (repayment)/drawdown (12,350) 8,200
Dividends paid 5 (2,218) (3,132)
Net cash outflow from financing activities (14,619) (3,962)
Net (decrease)/increase in cash and cash equivalents (2,378) 18
Cash and cash equivalents at start of the period 2,472 –
Cash and cash equivalents at the end of the period 94 18
Reconciliation of cash and cash equivalents to the
Balance Sheet is as follows:
Cash held at custodian 94 18
Cash and cash equivalents 94 18
Cash flow from operating activities includes:
Dividends received 2,242 2,868
Interest received 2 –
As the Company did not have any long term debt at both the current and prior period ends, no reconciliation of the financial liabilities is presented.
Notes to the condensed financial statements
1. Basis of preparation
The condensed financial statements have been prepared using the same accounting policies as those adopted in the Company’s 2025 Annual Financial Report*. They have been prepared on an historical cost basis, in accordance with the applicable
*The Company utilises Contracts for Difference (CFDs), often referred to as Equity Swaps for the purposes of gearing, with the following accounting policy.
Derivatives
The contracts for difference (‘CFD’) held in the portfolio are valued based on the price of the underlying security or index which they are purchased to reflect. The nature and intended use of these derivatives is to synthetically allow the Company to go long or short on an underlying asset without the need to trade the physical securities. They are valued based on the quoted bid price of the underlying security when held long. There are revenue and capital returns to be derived from these instruments. Dividends on contracts for difference are recognised as revenue for long positions and as an expense for short positions when the securities are quoted ex-dividend. Cash held at CFD brokers as margin is reflected separately within cash and cash equivalents balances. Interest on margin accounts held with brokers is included in the revenue return. All other gains/losses and cash flows from derivatives are included in the capital return.
2. Income
Six
Six months
months
ended ended
31 July 31 July
2025 2024
£’000 £’000
Income from investments:
UK dividends
– ordinary 2,102 2,643
– special 183 150
– property income distribution 110 –
Overseas dividends 17 62
2,333 2,855
Other income:
Deposit interest 2 –
Derivative income 21 –
Liquidity fund income 25 –
2,381 2,855
No special dividends have been recognised in capital during the period (
Overseas dividends include dividends received on
3. Management fee and finance costs
The investment management fee and finance costs are allocated 15% to revenue and 85% to capital.
A base management fee is payable monthly in arrears under the new agreement with Artemis. The fee is calculated at a rate of 0.65% per annum on the first £50 million of the Company’s net assets, and 0.55% per annum on net assets above £50 million (
As part of the transition, Artemis has agreed to a nine-month fee holiday, covering the period from 7 March to
4. Taxation and Investment Trust Status
No tax liability arises on capital gains because the Company has been accepted by HMRC as an approved investment trust and it is the intention of the Directors to conduct the affairs of the Company so that it continues to satisfy the conditions for this approval.
5. Dividends paid on ordinary shares
Six months Six months
ended
ended
31 July 31 July
2025 2024
Rate £’000 Rate £’000
Dividends paid during the period:
Third interim (prior year) 3.85p 1,170 3.85p 1,302
Final (prior year) 3.45p 1,048 5.41p 1,830
Total dividends paid 7.30p 2,218 9.26p 3,132
Dividends payable in respect of the year:
First interim 3.85p 1,169 – –
Total dividends declared and paid 11.15p 3,387 9.26p 3,132
The first interim dividend of 3.85p per ordinary share (
A second interim dividend of 3.85p (2024: 3.85p) has been declared and will be paid on
6. Share capital, including movements
Share capital represents the total number of shares in issue, including treasury shares.
31 July 31
January
2025 2025
Share capital:
Ordinary shares of 20p each (£’000) 6,075 6,075
Treasury shares of 20p each (£’000) 3,890 3,890
9,965 9,965
Number of ordinary shares in issue: 30,373,362 30,373,362
Number of shares held in treasury: 19,453,074 19,453,074
Total 49,826,436 49,826,436
7. Classification under 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.
Level 1 – investments with quoted prices in an active market;
Level 2 – investments whose fair value are based directly on observable current market prices or are indirectly derived from market prices; and
Level 3 – investments whose fair value are determined using a valuation technique based on assumptions that are not supported by observable current market prices or 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 each relevant asset/liability.
31 July 2025 31 January 2025
Asset Liabilities Asset Liabilities
£’000 £’000 £’000 £’000
Level 1 134,163 – 143,920 –
Level 2 168 (125) – –
134,331 (125) 143,920 –
8. Status of Half-Yearly Financial Report
The financial information contained in this Half-Yearly Financial Report, which has not been reviewed or audited by an independent auditor, does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The financial information for the half years ended
Company Secretary
Company Secretarial Contact: artemisukfutureleaders@ntrs.com
