RNS Announcement

The Monks Investment Trust PLC (MNKS)

Legal Entity Identifier: 213800MRI1JTUKG5AF64

Results for the year to 30 April 2025

Source: LSEG / Baillie Gifford. All figures are total return^*. See disclaimer at the end of this announcement.

  Alternative Performance Measure - see Glossary of terms and Alternative Performance Measures at the end of this announcement.

^†    Comparative index: FTSE World Index (in sterling terms).

The following is the Preliminary Results Announcement for the year to 30 April 2025 which was approved by the Board on 1 July 2025.

Chairman's statement

Performance

Global equities performed well in 2024, driven by strong corporate earnings and the Artificial Intelligence spending boom. Indeed, as recently as February of this year, Monks' NAV per share surpassed its previous high of £15, last reached in November 2021. However, a significant selloff occurred in April 2025, triggered by President Trump's 'Liberation Day' announcement of U.S. tariffs and China's retaliatory measures. Monks was heavily affected by the subsequent market sell-off, with the NAV and share price reaching their lows for the year in April 2025, shortly before the Company's year-end.

During the year to 30 April 2025, the net asset value ('NAV') total return, with borrowings calculated at fair value, was +0.1% and the share price total return was -1.5%. Over the same period, the FTSE World Index return was +5.3%. This is clearly a disappointing result, and whilst the team are now in line with the index again this calendar year, a year-end-date is a year-end-date. It is particularly disappointing for me to report this underperformance, since I step down as Chairman of Monks at the forthcoming AGM.

Capital allocation and discount

The Company's shares traded at a discount to net asset value throughout the year. The Board has been active in buying shares in the open market. Having issued shares when Monks' shares traded at a premium to net asset value, we believe that it is our obligation to be ready buyers at a discount. Buying the Company's own shares at a discount to NAV enhances NAV per share for ongoing shareholders. Buybacks also improve short-term liquidity in the Company's shares. We believe that the underlying portfolio is attractive enough for our shares to trade at close to or above NAV.

Over the course of the Company's financial year, we bought 26.5 million shares, at a cost of £321.1 million. Since we commenced this active programme in January 2022, we have bought back 65.5 million shares at a cost of £727.1 million; representing 27.7% of the Company's issued share capital as at 31 December 2021, one of the largest buybacks in the global equity sector. At the year-end, the discount was 10.1% (30 April 2024 - 8.5%).

The Board will continue its buyback policy as a key part of its overall capital allocation; we have discussed increasing the intensity of the buyback so that the shares trade at a much narrower discount. Recent events have revealed a clearer investor preference for lower and less volatile discounts. That is what you should expect to see in future at Monks. We are reluctant to have a zero discount policy, effectively giving up the advantages of not being open-ended. However, the Board believes that shareholders should expect the Company to attempt to restrict any discount, to net asset value with borrowings calculated at fair value, to mid-single digits, in normal market conditions.

Borrowings and gearing

Our investment trust structure allows gearing, which should enhance long-term returns. The Board's strategic borrowing target is 10%. It is expected that effective gearing will be maintained in the range of minus 15% to plus 15%. The Company has a mixture of long term, structural debt and shorter term, more flexible debt. The Company's revolving credit facility of £150 million with National Australia Bank Limited expired at the end of November 2024 and has been replaced by a £100 million revolving credit facility with The Royal Bank of Scotland International; £50 million is drawn under this facility. At the period end, net gearing was 8.9% and the weighted average interest rate across all borrowings was approximately 3.6%. Our decision to issue structural debt at very low rates was the right one. With the benefit of hindsight, I wish we had issued more debt at such low rates.

Management expenses

Monks remains competitive on fees and expenses: keeping fees as low as possible maximises the long-term returns to shareholders. The total ongoing charges ratio for the year to 30 April 2025 was 0.43% down marginally from 0.44% in the prior year. The current tiered management fee scale ensures that all shareholders will benefit from economies of scale as assets grow, from markets and performance

Earnings and dividend

Monks invests with the aim of maximising capital growth rather than income. All costs are charged to the Revenue Account. The Board's policy is to pay the minimum dividend required to maintain investment trust status. Retained earnings are reinvested in the portfolio. In order to build in headroom for further buybacks that would reduce the shares in issue qualifying for dividends, the Board is recommending that a single final dividend of 0.5p be paid, compared to 2.10p last year, to ensure that the amount retained for the year does not exceed that permissible. Subject to shareholder approval at the AGM, the dividend will be paid on 16 September 2025 to shareholders on the register at the close of business on 8 August 2025. The ex-dividend date will be 7 August 2025.

The Board

As previously communicated, I will retire from the Board at the conclusion of the Annual General Meeting. Randeep Grewal will succeed me as Chair of the Board, Nomination Committee and Management Engagement Committee.

The Board is cognisant of the need to ensure regular refreshment of its composition, whilst also maintaining continuity and corporate memory.  In January, Dr Dina Chaya stood down from the Board as a consequence of time commitments arising from her executive role. The Board undertook a recruitment process in the first quarter of the year and David Ballance was appointed as a Director in March. We also announced that Richard Curling would join the Board in October 2025. David and Richard will both add investment trust experience and wide investment knowledge to the Board. I think they are excellent candidates, and I know they will work hard to pursue your interests.

Annual General Meeting

The AGM will be held on Tuesday 9 September 2025 at the Royal Institution, 21 Albemarle Street, London W1S 4BS, at 11.30 am. We look forward to welcoming shareholders there.

The Board intends to hold the AGM voting on a poll, so encourages all shareholders to exercise their votes at the AGM by completing and submitting a form of proxy. We recommend that shareholders monitor the Company's website at monksinvestmenttrust.co.uk where any updates regarding the meeting will be posted. Market announcements will also be made in the event of any change to the scheduled arrangements.

Should shareholders have questions for the Board or the Managers, or any queries as to how to vote, they are welcome as always to submit them by email to  enquiries@bailliegifford.com or call 0800 917 2113. For shareholders investing through a platform, the AIC guidance on how to vote shares in advance or obtain the documentation necessary to vote in person at the AGM, may be of assistance: theaic.co.uk/how-to-vote-your-shares.

Adoption of new Articles of Association

At the AGM, to protect the interests of all shareholders, we are seeking shareholder approval to adopt new Articles of Association (the 'New Articles') in order to update the Company's current Articles of Association (the 'Existing Articles'). The proposed amendments being introduced in the New Articles will provide that a majority of the board of directors of the Company (including the Chairman of the Board) must at all times be independent (as defined by the AIC Code of Corporate Governance) and that proceedings of the Board must be conducted with a majority of independent directors present.

A copy of the New Articles, which includes the full terms of the proposed amendments to the Existing Articles, will be available at the registered office of the Company at 3 St Helen's Place, London, EC3A 6AB between the hours of 9.00 a.m. and 5.00 p.m. (Saturdays, Sundays and public holidays excepted) and on the Company's website, monksinvestmenttrust.co.uk from the date the annual report is posted to shareholders  until the close of the Annual General Meeting. The proposed New Articles will also be available for inspection at the venue of the Annual General Meeting from 15 minutes before and during the meeting and on the National Storage Mechanism located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism, from the date of the annual report is posted to shareholders.

Outlook

Recent years have been difficult for active managers as stock market returns have been driven by a small number of companies, which have represented an increasingly large proportion of global stock market indices. Monks' portfolio is intentionally diversified, with around 100 holdings. Whilst our managers have owned most of the companies that have driven stock market returns in recent years, these companies have represented a smaller proportion of Monks' portfolio than their index weightings. This is now the longest sequential period in which the S&P500 has beaten its equally-weighted version. This has made the index difficult to beat. Nevertheless, our team has made mistakes, as every team makes mistakes. I have referred in the past to the importance of refocusing on valuations; and there have (inevitably) been stock-specific errors. The Board's role is to be constructively critical, to probe more deeply when things are going well, and to be more supportive during more difficult periods.

At an AGM some years ago, a shareholder asked what the appropriate assessment period for a manager should be before reviewing them more formally. I responded that 5-year periods would be appropriate. The Board reassesses the Manager every year, in line with AIC guidelines. But the longer the period of assessment, the greater the information content. Given that we are behind the index over 5 years, you can expect the Board to be considering this issue in even greater detail. The longer period allows us to supplement the annual AIC checklist with consideration of the effect of personnel change, any process changes that have occurred during the period, and changing market dynamics.

We all share the view that there need to be a smaller number of very sizeable investment trusts in future, to reflect the changing shape of our ownership via wealth management platforms, advised, and self-administered. Monks needs to be fighting-fit as more mergers occur. I know that my colleagues will apply a great deal of effort to make sure that Monks should remain a core holding in the growth category and is in a position to be a consolidator.

KS Sternberg

Chairman

1 July 2025

Past performance is not a guide to future performance. Total return information is sourced from Baillie Gifford/LSEG. See disclaimer at the end of this announcement.

For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

Managers' review

It is tempting to believe we live in uniquely turbulent times. Yet history teaches us that every era feels unprecedented to those living through it. In living memory, we have witnessed the Berlin Wall crumble and a re-shaping of world order, ridden the dotcom rollercoaster, suffered 9/11, watched China transform from agrarian society to economic superpower, weathered the 2008 financial hurricane, navigated Brexit, endured a global pandemic, feared the return of populism and now find ourselves at the dawn of the artificial intelligence age.

We have no special insight into what President Trump might do next. The range of potential outcomes remains extraordinarily wide. Policies are announced and then rescinded almost daily. So, rather than offering predictions that will likely prove embarrassingly wrong by the time this report reaches your hands, we will share the principles that we are applying to navigate uncertainty and how these are reflected in Monks' portfolio.

Performance

The Global Alpha team has managed Monks for ten years. Over this period, the NAV total return (with debt at fair value) has been +163.3% (share price +171.6%) compared to the comparative index (FTSE World), which returned +182.0%. In the twelve months to the end of April, the portfolio underperformed the comparative index (FTSE World) by 5.2%, delivering a NAV total return of +0.1% (share price -1.5%) against the index total return of +5.3%.

Monks' share price rose steadily over the first 10 months of the financial year, continuing the strong absolute returns of the past couple of years. The Company's NAV came close to close to its all‑time high of £15 per share in February of this year.

However, the last two or so months of the year were much weaker, driven primarily by global trade tensions ignited by President Trump's 'Liberation Day'. Coupled with strong negative momentum within the US market, this led to sharp declines in American stocks (the S&P fell 20% from its peak in February to its lows in April). The US is our largest geographic allocation in absolute terms, and therefore, Monks gave up 10 months of gains to end the year flat. A second effect of President Trump's pronouncements and a lack of clarity on how the budget deficit will be brought under control has been a weaker dollar, again impacting the Company, whose shares are priced in sterling but where many of the assets are in US dollars.

Top five contributors and detractors to relative performance by stock for the year end 30 April 2025 (%)

Source: Revolution, FTSE.

All attribution figures are calculated gross of fees, relative to the Index from stock level up, based on closing prices.

The table above shows the largest contributors and detractors from Monks' relative performance over the period. A cohort of our healthcare holdings was among the largest detractors from relative performance for the portfolio. President Trump's healthcare appointments and their combined pronouncements have impacted short-term sentiment in healthcare. Against this backdrop, Elevance Health and Novo Nordisk have both suffered share price falls following disappointing operational results. Elevance is the second-largest US health insurer. We believe a growing need for health insurance coverage (as the population ages and treatment becomes more expensive) provides a structural tailwind for growth in the years ahead. The recent weakness in Elevance's shares is a result of the number of government-supported Medicaid customers falling as eligibility criteria are tightened post-pandemic. This has increased the company's medical loss ratio and weighed on margins, but we believe this is temporary. Elevance's pricing power (it can reprice policies annually) should allow it to grow its margins again and deliver sustainable double‑digit earnings growth over the long term.

Novo Nordisk could become one of the scale providers of weight loss injections to a vast and undersupplied market. Its shares fell sharply in December following late-stage trial results from its latest drug, CagriSema. The results were market-leading, showing 22.5% average weight loss across the patient population, but this was lower than anticipated. We think that the market's reaction to this is overdone. Today, just over 10 million people take obesity drugs globally (only 1% of the global obese population). As supply constraints ease, we expect this number to expand significantly. As a leader in the field of diabetes and metabolic disease, we expect Novo to continue to garner a significant share of the obesity market and believe the company has an underappreciated competitive advantage in manufacturing that is difficult and costly to replicate.

Elsewhere, Block, the peer-to-peer payment platform, saw its shares fall 25% following the management team's guidance that profit growth will moderate over the next year. It continues to grow its services across both Square (payments terminal) and Cash App (consumer finance), which should build scale and increase its profitability over the long term.

In contrast to Elevance and Novo Nordisk, where we remain confident in the long-term outlook, we have sold our position in Moderna. Revenue from its Covid-19 vaccine has disappointed, whilst speed to market with its RSV (respiratory syncytial virus) vaccine was slow and allowed competitors to steal the lead. Though we continue to believe that they have a potentially exciting pipeline of drugs, our patience has been exhausted.

Most of the portfolio holdings are in good shape. Indeed, sticking within healthcare, Alnylam Pharmaceuticals (gene silencing) reached a significant milestone after positive results from its late-stage trial to treat a rare heart condition. This could multiply its addressable patient population tenfold. We took some profits on shareholders' behalf after the share price rose by 80%, but we remain excited by the company's potential to address even larger patient populations.

Top contributors in the year included emerging winners DoorDash (online food delivery) and Sea Limited (ecommerce, gaming and payments). These companies are emerging stronger in the face of a higher cost of capital, while weaker competitors fall by the wayside, and are entrenching their competitive edge over peers. For example, DoorDash has grown its market share in the US from 57% to nearly 70% over the past three years and continues to scale at pace (order numbers increased +18% to an astonishing 643 million per quarter). Excitingly, it is making impressive progress in grocery delivery and in new markets overseas. Indeed, the news of its recent purchase of Deliveroo in the UK is evidence of its growth ambitions.

Some of our largest positions have contributed strongly too, with Prosus (investment holding company) and Meta (advertising) among the most notable. Prosus - which has a 25% shareholding in Tencent, the Chinese internet giant - has seen its portfolio of internet assets deliver robust financial growth. Its recent results showed that its consolidated e-commerce operations delivered +16% revenue growth, and operating profitability 12 months earlier than targeted. Meanwhile, Meta continues to excel. AI investments have boosted advertising quality and targeting, increased user engagement and accelerated revenue growth (+19% year-on-year).

Successfully navigating uncertainty

The imposition of ever-changing global trade tariffs by the US has stoked uncertainty and the outlook for global growth. It would be easy to get drawn into the noise and speculation, but this is not in the best interests of Monks shareholders. Indeed, the economist Frank Knight made a crucial distinction between risk and uncertainty. Risk, he explained, describes situations where outcomes and probabilities can be reasonably estimated, such as the odds when tossing dice or calculating insurance premiums. Uncertainty, by contrast, applies to situations where outcomes and their probabilities cannot be reliably quantified due to insufficient historical precedent. Risk can be priced, hedged, and insured against. Uncertainty cannot.

This leads to three core principles that help to guide us in the management of the Monks' portfolio:

1.       Build Resilience

2.       Retain Perspective

3.       Remain reward-seeking

Simple to list yet challenging to execute.

Building Resilience

We recognise that global geopolitics (not just Trump's tariffs) is likely to lead to more fractious global trade and a wider range of outcomes for investors. Our focus has been on ensuring that our holdings are sufficiently adaptable and that the portfolio is positioned to win across a wide range of scenarios. Rather than attempting to predict the unpredictable, we focus on building resilience through investing in companies with robust fundamentals and a diversity of growth drivers.

The portfolio holdings are both higher growth and higher quality than the market. In aggregate, the companies are conservatively financed with very low debt compared to the index (20% net debt/equity versus 50%) yet are structurally more profitable (39% gross margins versus 29%), invest more in future growth (capex and R&D/sales 14% versus 11%), are higher returning (return on equity 19% versus 15%) and have historically grown cash profits faster than the index (free cash flow growth over the last five years 14% versus 8%).

Nature teaches us that diverse ecosystems demonstrate greater resilience than monocultures. A field of identical crops may produce impressive yields under ideal conditions, but a single blight can devastate everything. Biodiverse ecosystems, meanwhile, contain countless species with different resilience profiles. When disease strikes, some species suffer while others thrive, and the ecosystem adapts and flourishes amid change.

This principle shapes our portfolio construction for Monks. We remain deliberately pragmatic about growth sources, organising our holdings into three profiles: stalwart, rapid and cyclical growth. These are described below. In short, the stalwarts are the wealth compounders. They are often franchise businesses that metronomically increase earnings over decades and provide portfolio ballast. The rapid growth stocks typically harness technological innovation to disrupt industries and grow rapidly. Our cyclical growth stocks are more economically sensitive businesses whose growth arrives unevenly; the opportunity here lies in finding management teams that invest counter-cyclically, turning market fluctuations into long-term advantages. This broad and pragmatic approach to growth gives us degrees of freedom to adapt to changing conditions, seize emerging opportunities, and shift emphasis as market cycles evolve.

In this context, position sizing across the portfolio matters too. We invest over 40% of the portfolio by weight in the top 15 holdings (between 2-4% per holding), where we believe the likelihood of generating at least a doubling in return over the next five years is highest. These are typically (but not always) in large, established companies where the path to growth is clearest. However, we recognise the asymmetries that equity investing offers and embrace this by managing a basket of smaller, 'incubator' positions (<0.5%), where the path to growth is less clear but potentially highly rewarding for shareholders. We currently have investments in 40 companies that make up around 15% of the portfolio. The portfolio effect is that Monks' shareholders are not overly exposed to the fortunes of one company, but instead a diverse range of holdings (103 holdings as at 30 April 2025), which should be appealing to investors at a time of heightened uncertainty.

Indeed, over the past year, we have sought to maintain sufficient balance across our growth profiles and position sizes. We have recycled capital from some of our strongest performing (mainly US) holdings like Netflix (entertainment streaming), The Trade Desk (programmatic advertising), Dutch Bros (coffee) and Shopify (ecommerce). This has been deployed into a wide range of attractively valued growth opportunities that broaden the base of growth across the portfolio. Examples of newly established holdings include the likes of growth stalwart, Paycom (payroll and HR software) and cyclical stocks, FTAI Aviation (aero engine maintenance and renewal) and WillScot (temporary construction site office and storage solutions).

Retaining Perspective

Stock markets behave strangely. They overreact to headline news while simultaneously underreacting to slower, more consequential trends. The pressure to react to a dramatic headline, to do something, can be overwhelming. Instead, we concentrate on enduring, structural trends like long-term opportunities in artificial intelligence (AI) or the penetration of electric and autonomous vehicles. These shifts will outlast political cycles and understanding which structural shifts will endure represents our most important task.

Around 25% of Monks is invested in companies that power, build or benefit from AI. The bedrock of our exposure includes significant positions in NVIDIA in Graphics Processing Unit design, Microsoft in enterprise software, and Meta in social media and advertising. We have deliberately broadened and deepened the portfolio's exposure to companies across the AI value chain. In the past year, this includes purchases of semiconductor holdings like Disco Corporation (dicing, grinding and polishing equipment for semiconductor wafers) and Kokusai Electric (atomic layer deposition machinery to enable the manufacture of leading-edge semiconductors). In both cases, the likelihood of greater chip demand from AI will be a helpful tailwind for growth. Elsewhere, we have been seeking out the early adopters in the enterprise application space. This has drawn us to the enterprise management software company Salesforce. It is now positioning itself to capitalise on the growing AI market through its new offering, Agentforce. It allows customers to delegate tasks to autonomous AI agents that are designed to handle tasks such as data analysis, planning, and execution, thereby enhancing productivity and efficiency. This represents a potentially valuable shift in Salesforce's business model and pricing strategy, which could see growth accelerate in the years ahead.

We have significantly less of the portfolio invested directly in the growth of electric and autonomous vehicles (c. 3.5%), but the direction of travel is clear. We have long-standing holdings in the likes of CATL, the Chinese battery manufacturer, Mobileye in driver safety and assistance software and Li Auto in Chinese EV manufacturing. We have discussed several opportunities over recent months, alighting on the purchase of a new holding in Uber Technologies, the pioneering ride-hailing platform that connects drivers and passengers through its mobile app. Uber's competitive edge lies in its strong brand recognition, price competitiveness, scale advantage, and powerful network effects. There remain countless opportunities to increase penetration and to expand into new geographies and adjacent businesses. With a vast addressable market, estimated at $3-5 trillion in mobility alone, Uber is well-positioned to capitalise on the ongoing transformation of the transportation industry, supported by its strong consumer relationships and operational expertise. While the market appears to underappreciate Uber's longevity and robustness, we believe the company has the potential to transform urban mobility and dominate the autonomous vehicle (AV) future.

Remaining reward-seeking

The fundamental principles of investing sound disarmingly simple: buy low, sell high. But adhering to these principles amid market turbulence is difficult. By building resilience and maintaining perspective, we create the mental space to remain reward-seeking. Indeed, we have been actively upgrading the portfolio. Over the past year, our valuation premium to the market (on a forward Price/Earnings basis) has decreased from over 20% to just 7%, while our three-year forecast earnings growth remains a healthy 45% premium to the market (12.5% p.a. versus 8.6% p.a.). We are turning volatility into opportunity.

Volatility has allowed us to purchase shares in companies that we have admired for some time, too. This was the case for Nu Holdings, the owner of Nubank, a founder-run digital bank primarily operating in Brazil, Mexico and Colombia. Its shares fell from $16 to $11 in January, which represented an attractive entry point. The company has attracted over half of Brazil's adult population, mainly through organic customer acquisition and its well-regarded reputation. This demonstrates a strong product-market fit replicated across an increasingly broad product portfolio, different market segments and multiple geographies. It leverages its digital business model with an 85% cost advantage over incumbent banks to undercut fees while offering a superior customer experience, commanding one of the highest net promoter scores of any consumer company worldwide.

Gearing and buybacks

The board and manager believe in the importance of utilising gearing and managing the current discount to best protect existing shareholders. Turning long-term performance around remains the strongest lever to do this. Our confidence in the outlook for the portfolio is reflected in an increase to our geared position, which now stands at 8.9% on an invested basis (it was 6.8% a year ago). Our largest capital allocation made over the past year was the £321m to purchase our own shares at an average discount of 10%.

This represents 12.4% of the Company's opening share count, added approximately 1.1% to the NAV per share and represents a sustained commitment to buybacks, which began in January 2022.

Outlook

The core approach to managing Monks remains consistent. We select stocks based on their fundamental attractions; we seek to invest in a diversified collection of companies that can deliver superior levels of earnings growth; and we strive to allow compounding to work its magic by being patient. We overlay these principles - building resilience, retaining perspective and remaining reward-seeking - to deliver Monk's shareholders a portfolio that is robust, has many drivers of future returns and will outpace the market in its delivery of earnings growth. Indeed, the portfolio's fundamentals point to a platform from which we can be confident Monks will deliver strong relative returns in the years ahead. Returning to Frank Knight's wisdom about uncertainty, he argued that true profits-what he called entrepreneurial returns- arise precisely from bearing uncertainty rather than merely quantifiable risk. The willingness to operate thoughtfully under conditions of genuine uncertainty creates the opportunity for extraordinary reward.

In these uncertain times, we remain grateful for your continued trust.

Spencer Adair

Malcolm MacColl

Helen Xiong

Baillie Gifford & Co

1 July 2025

The Managers' core investment beliefs

We believe the following features of Monks provide a sustainable basis for adding value for shareholders.

Active management

•         We invest in attractive companies using a 'bottom-up' investment process.

•         High active share^* provides the potential for adding value.

•         We look broadly for growth, spanning regions and sectors deliberately seeking opportunities where we think growth is least recognised.

•         As the portfolio is very different from the index, we expect portfolio returns to diverge - sometimes substantially and often for prolonged periods.

Committed growth investors

•         In the long run, share prices follow fundamentals; growth drives returns.

•         We aim to produce a portfolio of stocks with above average growth, this in turn underpins the ability of Monks to add value.

•         We have a differentiated approach to growth, focusing on the type of growth that we expect a company to deliver. All holdings fall into one of three growth categories, as set out below.

•         The use of these three growth categories ensures a diversity of growth drivers within a disciplined framework.

Long-term perspective

•         Long-term holdings mean that company fundamentals are given time to drive returns.

•         We prefer companies that are managed with a long-term mindset, rather than those that prioritise the management of market expectations.

•         We believe our approach helps us focus on what is important during the inevitable periods of underperformance.

•         Short-term portfolio results are random.

•         As longer-term shareholders we are able to have greater influence on environmental, social and governance matters.

Dedicated team with clear decision-making process

•         Senior and experienced team drawing on the full resources of Baillie Gifford.

•         Alignment of interests - the investment team responsible for Monks all own shares in the Company.

Portfolio construction

•         Investments are held in three broad holding sizes, as set out below.

•         This allows us to back our judgement in those stocks for which we have greater conviction, and to embrace the asymmetry of returns through 'incubator' positions in higher risk/return stocks.

•         'Asymmetry of returns' - some of our smaller positions will struggle and their share prices will fall; those that are successful may rise many fold. The latter should outweigh the former.

Low cost

•         Investors should not be penalised by high management fees.

•         Low turnover and trading costs benefit shareholders.

^*    For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

Investment portfolio by growth category^*

as at 30 April 2025

^*    For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

^§    Denotes unlisted/private company investment.

^‡    Denotes suspended investment.

^†    New purchase during the period.

Portfolio positioning

as at 30 April 2025^*†

Although the Managers' approach to stock picking is resolutely 'bottom-up' in nature it is essential to understand the risks of each investment and, in turn, where there may be concentrations of exposures. The charts below outline some key exposures of the portfolio at the Company's year end.

Geographical

Sectoral

^*    Expressed as a percentage of total assets.

^†    For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

Past performance is not a guide to future performance.

List of investments

as at 30 April 2025

^*    For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

^§    Denotes unlisted/private company investment.

^    Denotes suspended investment.

^†    New purchase during the period.
Complete sales during the period were: Ashstead Group, BIG Technologies, Pernod Ricard, Adevinta Asa, Schibsted, Adobe Systems, Advanced Micro Devices, Albemarle, Alibaba, Analog Devices, Certara, Chewy, HDFC, Hoshizaki Corp, Lemonade, Moderna, Norwegian Cruise Line, Pool Corporation, Sands China, Shiseido, SiteOne Landscape Supply, Staar Surgical, Sysmex, Tesla, Woodside Energy Group.

^#    The Schiehallion Fund is managed by Baillie Gifford. The Company's holding in The Schiehallion Fund is excluded from its assets when calculating the management fee. See note 3 to the Financial Statements.

^‡    Includes holdings in preference shares, ordinary shares and contingent value rights (CVR).

Baillie Gifford - valuing private companies

We aim to hold our private company investments at 'fair value' i.e. the price that would be paid in an open-market transaction. Valuations are adjusted both during regular valuation cycles and on an ad hoc basis in response to 'trigger events'. Our valuation process ensures that private companies are valued in both a fair and timely manner.

The valuation process is overseen by a valuations committee at Baillie Gifford which takes advice from an independent third party (S&P Global). The portfolio managers feed into the process, but the valuations committee owns the process and the portfolio managers only receive final valuation notifications once they have been applied.

We revalue the private holdings on a three-month rolling cycle, with one-third of the holdings reassessed each month. For investment trusts, the prices are also reviewed twice per year by the respective investment trust boards and are subject to the scrutiny of external auditors in the annual audit process.

Beyond the regular cycle, the valuations team also monitors the portfolio for certain 'trigger events'. These may include: changes in fundamentals; a takeover approach; an intention to carry out an IPO; or changes to the valuation of comparable public companies. The valuations team also monitors relevant market indices on a weekly basis and updates valuations in a manner consistent with our external valuer's (S&P Global) most recent valuation report where appropriate. When market volatility is particularly pronounced the team do these checks daily. Any ad hoc change to the fair valuation of any holding is implemented swiftly and reflected in the next published net asset value.

In addition to the 3.1% of the portfolio holdings in direct private company investments, 2.7% of the portfolio is in The Schiehallion Fund, a closed ended investment company investing predominantly in private companies, which is valued at its publicly available market price.

Income statement

For the year ended 30 April

The total column of this Statement represents the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance issued by the Association of Investment Companies.

All revenue and capital items in this Statement derive from continuing operations.

A Statement of Comprehensive Income is not required as the Company does not have any other comprehensive income and the net return on ordinary activities after taxation is both the profit and total comprehensive income for the year.

Balance sheet

Statement of changes in equity

For the year ended 30 April 2025

For the year ended 30 April 2024

*      The Capital Reserve balance at 30 April 2025 includes holding gains on investments of £651,128,000 (30 April 2024 - gains of £1,003,962,000).

Cash flow statement

For the year ended 30 April

^*    Cash from operations includes dividends received of £24,140,000 (2024 - £29,805,000) and interest received of £1,257,000 (2024 - £1,669,000).

The accompanying notes below are an integral part of the Financial Statements.

Notes to the Financial Statements

1.       The Financial Statements for the year to 30 April 2025 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' on the basis of the accounting policies set out below which are unchanged from the prior year and have been applied consistently. The updates to FRS 102, applicable for financial years starting on or after 1 January 2025, are not expected to impact the policies below or the financial statements prepared in accordance with them.

2.       Income

Special dividend entitlements arising in the year amounted to £459,000 (2024 - £1,069,000).

3.       Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed as the Company's Alternative Investment Fund Manager (AIFM) and Company Secretary. Baillie Gifford & Co Limited has delegated portfolio management services to Baillie Gifford & Co. Dealing activity and transaction reporting have been further sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited. The annual management fee payable to Baillie Gifford & Co Limited is 0.45% on the first £750 million of total assets, 0.33% on the next £1 billion of total assets and 0.30% on the remaining total assets. For fee purposes, total assets is defined as the total value of all assets held less all liabilities (other than any liability in the form of debt intended for investment purposes) and excludes the value of the Company's holding in The Schiehallion Fund, a closed-ended investment company managed by Baillie Gifford & Co. The Company does not currently hold any other collective investment vehicles managed by Baillie Gifford & Co. Where the Company holds investments in open-ended collective investment vehicles managed by Baillie Gifford, such as OEICs, Monks' share of any fees charged within that vehicle will be rebated to the Company. All debt drawn down during the periods under review is intended for investment purposes.

4.       Net return per ordinary share

Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £3,516,000 (2024 - £8,241,000) and on 201,138,932 (2024 - 224,114,021) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

Capital return per ordinary share is based on the net capital loss for the financial year of £20,271,000 (2024 - gain of £390,111,000) and on 201,138,932 (2024 - 224,114,021) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

There are no dilutive or potentially dilutive shares in issue.

5.       Ordinary dividends

Set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £3,516,000 (2024 - £8,241,000).

If approved, the recommended final dividend on the ordinary shares will be paid on 16 September 2025 to shareholders on the register at the close of business on 8 August 2025. The ex-dividend date is 7 August 2025. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 26 August 2025.

6.Fixed assets - investments

Investments in securities are financial assets held at fair value through profit or loss. In accordance with Financial Reporting Standard 102, the tables above provide an analysis of these investments based on the fair value hierarchy described below, which reflects the reliability and significance of the information used to measure their fair value.

Level 2 investments comprise the Company's holding in The Schiehallion Fund. The suspended investment in Sberbank of Russia has been valued at nil.

Fair value hierarchy

The fair value hierarchy used to analyse the basis on which the fair values of financial instruments held at fair value through the profit and loss account are measured is described below. Fair value measurements are categorised on the basis of the lowest level input that is significant to the fair value measurement.

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).

Private Company Investments

Private company investments are valued at fair value by the Directors following a detailed review and appropriate challenge of the valuations proposed by the Managers. The Managers' private company investment policy applies techniques consistent with the International Private Equity and Venture Capital Valuation Guidelines 2022 ('IPEV'). The techniques applied are predominantly market-based approaches. The market-based approaches available under IPEV are set out below and are followed by an explanation of how they are applied to the Company's private company portfolio:

¾  Multiples;

¾  Industry Valuation Benchmarks; and

¾  Available Market Prices.

The nature of the private company portfolio currently will influence the valuation technique applied. The valuation approach recognises that, as stated in the IPEV Guidelines, the price of a recent investment, if resulting from an orderly transaction, generally represents fair value as at the transaction date and may be an appropriate starting point for estimating fair value at subsequent measurement dates. However, consideration is given to the facts and circumstances as at the subsequent measurement date, including changes in the market or performance of the investee company. Milestone analysis is used where appropriate to incorporate the operational progress of the investee company into the valuation. Additionally, the background to the transaction must be considered. As a result, various multiples-based techniques are employed to assess the valuations particularly in those companies with established revenues. Discounted cashflows are used where appropriate. An absence of relevant industry peers may preclude the application of the Industry Valuation Benchmarks technique and an absence of observable prices may preclude the Available Market Prices approach. All valuations are cross-checked for reasonableness by employing relevant alternative techniques.

The private company investments are valued according to a three monthly cycle of measurement dates. The fair value of the private company investments will be reviewed before the next scheduled three-monthly measurement date on the following occasions:

¾  at the year end and half year end of the Company; and

¾  where there is an indication of a change in fair value as defined in the IPEV guidelines (commonly referred to as 'trigger' events).

^*    Includes holdings in ordinary shares, preference shares and contingent value rights.

The Company received proceeds of £979,184,000 (2024 - £579,807,000) from investments sold during the year. The book cost of these investments when they were purchased was £644,704,000 (2024 - £533,762,000). These investments have been revalued over time and, until they were sold, any unrealised gains/losses were included in the fair value of the investments. Transaction costs of £433,000 (2024 - £272,000) and £407,000 (2024 - £281,000) were suffered on purchases and sales respectively.

Significant Holdings Disclosure Requirements - Companies Act 2006

The following is provided in accordance with the disclosure requirements of the Companies Act 2006 in relation to investments which amount to 20% or more of the nominal value of any class of shares in an undertaking.

During the year the Company had a holding in class A shares of Silk Invest Private Equity Fund S.A. SICAR, compartment 'Silk Invest Africa Food Fund' which is incorporated in Luxembourg. At 30 April Monks holding was:

7.       Creditors - amounts falling due within one year

None of the above creditors are financial liabilities held at fair value through profit or loss. Included in other creditors is £2,212,000 (2024 - £2,464,000) in respect of the investment management fee.

Borrowing facilities

At 30 April 2025 the Company had a 3 year £100 million unsecured floating rate revolving facility with Royal Bank of Scotland International Limited, which expires on 28 November 2027.

At 30 April 2025 drawings were as follows:

-      The Royal Bank of Scotland International Limited: £50 million at an interest rate of 1.6% over SONIA, maturing in May 2025 (2024 - National Australia Bank Limited: £50 million at an interest rate of 1.4% over SONIA, maturing in October 2024).

The main covenants relating to the above loans are that total borrowings shall not exceed 30% of the Company's adjusted net asset value and the Company's minimum adjusted net asset value shall be £650 million.

There were no breaches of loan covenants during the year to 30 April 2025 (2024 - none).

Creditors - amounts falling due after more than one year

Unsecured loan notes

The unsecured loan notes are stated at the cumulative amount of net proceeds after issue expenses. The cumulative effect is to reduce the carrying amount of borrowings by £132,000 (2024 - £137,000).

Provision for tax liability

The tax liability provision at 30 April 2025 of £748,000 (30 April 2024 - £1,896,000) relates to a potential liability for Indian capital gains tax that may arise on the Company's Indian investments should they be sold in the future, based on the net unrealised taxable capital gains at the period end and on enacted Indian tax rates. The amount of any future tax amounts payable may differ from this provision, depending on the value and timing of any future sales of such investments and future Indian tax rates.

8.       Share capital

The Company's authority permits it to hold shares bought back 'in treasury'. Such treasury shares may be subsequently either sold for cash (at, or at a premium to, net asset value per ordinary share) or cancelled. In the year to 30 April 2025, 26,508,000 shares with a nominal value of £1,325,000 were bought back at a total cost of £319,669,000 to be held in treasury (2024 - 16,666,000 ordinary shares with a nominal value of £833,000 were bought back at a total cost of £172,887,000 and held in treasury). No shares were issued from treasury during the year and at 30 April 2025 65,548,794 (2024 - 39,040,794) shares were held in treasury. At 30 April 2025 the Company had authority to buy back 12,871,293 ordinary shares and to allot or sell from treasury 21,061,566 ordinary shares without application of pre-emption rights. Under the provisions of the Company's Articles of Association share buy-backs are funded from the capital reserve. In the period 1 May 2025 to 26 June 2025 the Company bought back a further 2,647,000 shares with a nominal value of £132,000 at a total cost of £33,076,000 to be held in treasury. At 26 June 2025 68,195,794 shares were held in treasury and the Company had authority remaining to buy back a further 10,224,293 ordinary shares.

9.       The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 April 2025 or 2024 but is derived from those accounts. Statutory accounts for 2024 have been delivered to the Registrar of Companies and those for 2025 will be delivered in due course. The auditor has reported on these accounts; the reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

10.     Transactions with Related Parties and the Managers and Secretaries

No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006.

Details of the management fee arrangements are included in note 3 above.

11.     The Annual Report and Financial Statements will be available on the Managers' website monksinvestmenttrust.co.uk^‡ on or around 21 July 2025

^‡    Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

Past performance is not a guide to future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares.

Glossary of terms and Alternative Performance Measures ('APM')

An Alternative Performance Measure is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework.

Total assets

This is the Company's definition of adjusted total assets, being the total value of all assets held less all liabilities (other than liabilities in the form of borrowings).

Shareholders' funds

Shareholders' funds is the value of all assets held less all liabilities, with borrowings deducted at book cost.

Net liquid assets

This is the Company's definition of net liquid assets, comprising current assets less current liabilities (excluding borrowings) and provisions.

Active share (APM)

Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

Unlisted, unquoted and private company investments

'Unlisted', 'unquoted' and 'private company' investments are investments in securities not traded on a recognised exchange.

Net Asset Value (APM)

Net Asset Value (NAV) is the value of all assets held less all liabilities, with borrowings deducted at either par value or fair value as described below. Per share amounts are calculated by dividing the relevant figure by the number of ordinary shares in issue.

Net Asset Value (borrowings at par value) (APM)

Borrowings are valued at nominal par value. A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at par value is provided below.

The per share figures above are based on 187,622,666 (2024 - 214,130,666) ordinary shares of 5p, being the number of ordinary shares in issue at the year end excluding treasury shares.

Net Asset Value (borrowings at fair value) (APM)

Borrowings are valued at an estimate of market worth. The fair values of the loan notes are calculated using a comparable debt approach, by reference to a basket of corporate debt. The fair value of the Company's short term bank borrowings is equivalent to its book value.

A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at fair value is provided below.

 The per share figures above are based on 187,622,666 (2024 - 214,130,666) ordinary shares of 5p, being the number of ordinary shares in issue at the period end excluding treasury shares.

Discount/premium (APM)

As stock markets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the NAV per share from the share price and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, this situation is called a premium.

Total return (APM)

The total return is the return to shareholders after reinvesting the dividend on the date that the share price goes ex-dividend, as detailed below.

^*    The dividend adjustment factor is calculated on the assumption that the dividend of 2.10p (2024 - 3.15p) paid by the Company during the year was reinvested into shares of the Company at the cum income NAV/share price, as appropriate, at the ex-dividend date.

Ongoing charges (APM)

The total expenses (excluding dealing and borrowing costs) incurred by the Company as a percentage of the daily average net asset value (with borrowings at fair value), as detailed below.

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets. The level of gearing can be adjusted through the use of derivatives which affect the sensitivity of the value of the portfolio to changes in the level of markets.

Gross gearing, also referred to as potential gearing, is the Company's borrowings expressed as a percentage of shareholders' funds (a ÷ c in the table below).

Net gearing, also referred to as invested or equity gearing, is borrowings at book value less cash and cash equivalents (any certificates of deposit are not deducted) and brokers' balances expressed as a percentage of shareholders' funds (b ÷ c in the table below).^*

Effective gearing, as defined by the Board and Managers of Monks, is the Company's borrowings at par less cash, brokers' balances and investment grade bonds maturing within one year, expressed as a percentage of shareholders' funds^*.

^*    As adjusted to take into account the gearing impact of any derivative holdings.

Leverage (APM)

For the purposes of the Alternative Investment Fund Managers (AIFM) Regulations leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

Compound annual return (APM)

The compound annual return converts the return over a period of longer than one year to a constant annual rate of return applied to the compounded value at the start of each year.

Treasury shares

The Company has the authority to make market purchases of its ordinary shares for retention as treasury shares for future reissue, resale, transfer, or for cancellation. Treasury shares do not receive distributions and the Company is not entitled to exercise the voting rights attaching to them.

Turnover (APM)

Turnover is a measure of portfolio change or trading activity. Monthly turnover is calculated as the minimum of purchases and sales in a month, divided by the average market value of the fund. Monthly numbers are added together to get the rolling 12 month turnover data.

Contingent value rights

'CVR' after an instrument name indicates a security, usually arising from a corporate action such as a takeover or merger, which represents a right to receive potential future value, should the continuing company achieve certain milestones. The Illumina CVR was received on Illumina's takeover of the Company's private company investment in GRAIL and the Abiomed CVR arose on Johnson & Johnson's takeover of Abiomed. In both cases the milestones relate to the performance of the technologies acquired through those takeovers. Any values attributed to these holdings reflect both the amount of the future value potentially receivable and the probability of the milestones being met within the time frames in the CVR agreement.

Attribution

Attribution is the analysis of the effect of investment management decisions on the performance of portfolio. Attribution can be conducted at different levels depending on the product, these includes region, country, sector and stock analysis. Attribution can be relative to an index or absolute.

Third party data provider disclaimer

No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data.

No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom.

No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate. Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.

FTSE Index Data

London Stock Exchange Group plc and its group undertakings (collectively, the 'LSE Group'). © LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies. 'FTSE®' 'Russell®', 'FTSE Russell®', is/are a trade mark(s) of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication.

No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

Sustainable Finance Disclosure Regulation ('SFDR')

The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a direct impact in the UK due to Brexit, however, it applies to third-country products marketed in the EU. As The Monks Investment Trust PLC is marketed in the EU by the AIFM, Baillie Gifford & Co Limited, via the National Private Placement Regime ('NPPR') the following disclosures have been provided to comply with the high-level requirements of SFDR.

The AIFM has adopted Baillie Gifford & Co's stewardship principles and guidelines as its policy on integration of sustainability risks in investment decisions.

Baillie Gifford & Co believes that a company cannot be financially sustainable in the long run if its approach to business is fundamentally out of line with changing societal expectations. It defines 'sustainability' as a deliberately broad concept which encapsulates a company's purpose, values, business model, culture, and operating practices.

Baillie Gifford & Co's approach to investment is based on identifying and holding high quality growth businesses that enjoy sustainable competitive advantages in their marketplace. To do this it looks beyond current financial performance, undertaking proprietary research to build up an in-depth knowledge of an individual company and a view on its long-term prospects. This includes the consideration of sustainability factors (environmental, social and/or governance matters) which it believes will positively or negatively influence the financial returns of an investment.

The likely impact on the return of the portfolio from a potential or actual material decline in the value of investment due to the occurrence of an environmental, social or governance event or condition will vary and will depend on several factors including but not limited to the type, extent, complexity and duration of an event or condition, prevailing market conditions and existence of any mitigating factors.

Whilst consideration is given to sustainability matters, there are no restrictions on the investment universe of the Company, unless otherwise stated within in its investment objective & policy. Baillie Gifford & Co can invest in any companies it believes could create beneficial long-term returns for investors. However, this might result in investments being made in companies that ultimately cause a negative outcome for the environment or society.

More detail on the Manager's approach to sustainability can be found in the stewardship principles and guidelines document, available publicly on the Baillie Gifford website bailliegifford.com and by scanning the QR code below.

The underlying investments do not take into account the EU criteria for environmentally sustainable economic activities established under the EU Taxonomy Regulation.

1 July 2025

For further information please contact:

Jonathan Atkins, Four Communications

Tel: 0203 920 0555 or 07872 495396