The Lindsell Train Investment Trust plc - Annual Financial Report for the year ended 31 March 2025
Legal Entity Identifier: 213800VMBJH2TCFDZU08
(the “Company” or “LTIT”)
This announcement contains regulated information
Annual Financial Report for the year ended
Financial Highlights for the Year
Performance Comparisons 2025 2024 Net Asset Value total return per Ordinary Share*^ -2.2% +2.1% Share price total return per Ordinary Share*^ +9.0% -19.8% MSCI World Index total return (Sterling) +4.8% +22.5%UK RPI Inflation (all items) 3.2% 4.3%
*
The Net Asset Value and the share price at
^ Alternative Performance Measure (“APM”). See Glossary of Terms and Alternative Performance Measures beginning on page 113 of the Annual Report.
Source: Morningstar and Bloomberg.
Five Year Historical Record
Net revenue Dividends Net Share
available for on Ordinary Dividends Asset Value price per Gross Ordinary Shares per Ordinary per Ordinary Ordinary income Shares Cost Share Share Share To 31 March £’000 £’000 £’000 £ £ £ 2021 13,782 12,002 10,000 50.00 1,185.58 1,420.00 2022 14,784 12,729 10,600 53.00 1,113.81 1,105.00 2023 14,135 12,211 10,300 51.50 1,056.95 1,052.50 2024 12,005 10,214 10,300 51.50 1,026.43 801.00 2025 10,169 8,567 8,400 42.00 952.13 818.00
Principal Data
31 March 2025 31 March 2024 % Change
Shareholders’ funds (£’000) 190,426 205,285 -7.2%
NAV per Ordinary Share £952.13 £1,026.43 -7.2%
Discount to NAV^ 14.1% 22.0%
Share price per Ordinary Share £818.00 £801.00 +2.1%
Recommended final dividend per Ordinary £42.00 £51.50 -18.4%
Share
Dividend yield^ 5.1% 6.4%
Ongoing Charges^ 0.8% 0.8%
(Loss)/Earnings per Ordinary Share – basic £(22.80) £20.97 -208.8%
Revenue £42.83 £51.07 -16.1%
Capital £(65.63) £(30.10) -118.1%
NAV total return^† -2.2% +2.1%
Share price total return^† +9.0% -19.8%
Benchmark (MSCI World Index in Sterling)† +4.8% +22.5%
^ Alternative Performance Measure (see Glossary beginning on page 113 of the Annual Report).
† These are percentage change figures for the year to 31 March.
Please see Glossary of Terms beginning on page 113 of the Annual Report for an explanation of terms used.
Company Summary
The Company
The Company is a
Investment Objective
The objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital.
Investment Manager
Further details concerning the Agreements with the Company’s service providers can be found in Appendix 4, on page 104 of the Annual Report.
Performance and Benchmark
The performance and financial highlights are provided on pages 4 and 5 of the Annual Report.
The Company compares its performance with and calculates its performance fee relative to its benchmark, the MSCI World Index in Sterling.
Dividend
A final dividend of £42.00 per Ordinary Share (2024: a final dividend of £51.50 per Ordinary Share) is proposed for the year ended
Annual General Meeting
The notice of the Annual General Meeting, scheduled for Thursday,
Capital Structure
The Company’s capital structure comprises 200,000 Ordinary Shares of
Strategic Report
Business Review
The Directors present their Strategic Report for the Company for the year ended
Further information on how the Directors have discharged their duty under Section 172 of the Companies Act 2006 can be found on pages 21 to 23 of the Annual Report.
The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the date of this Report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
Business Model
The objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital.
The Company’s strategy is to create value for shareholders through achieving its investment objective.
As an externally managed investment company the Company has no executive directors, employees or internal operations. The Company delegates its day-to-day management to third - parties.
The Board is responsible for all aspects of the Company's affairs, including the setting of parameters for and monitoring of the investment strategy as well as the review of investment performance and policy. It also has responsibility for all strategic issues and corporate governance matters.
Reviews of the financial year and commentary on the future outlook are presented in the Chairman’s Statement on pages 6 to 9 of the Annual Report and the Manager’s Report on pages 12 to 13. The Company’s Investment Objective and Investment Policy are set out on page 3 of the Annual Report.
Investment Objective
The objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital.
Investment Policy
The Investment Policy of the Company is to invest:
(i) in a wide range of financial assets including equities, unlisted equities, bonds, funds, cash and other financial investments globally with no limitations on the markets and sectors in which investment may be made, although there is likely to be a bias towards equities and Sterling assets, consistent with a Sterling-dominated investment objective. The Directors expect that the flexibility implicit in these powers will assist in the achievement of the investment objective;
(ii) in LTL managed fund products, subject to Board approval, up to 25% of its gross assets; and
(iii) in LTL and to retain a holding, currently 23.6%, in order to benefit from the expected long term growth of the business of the Company’s Manager.
The Company does not envisage any changes to its objective, its investment policy or its management for the foreseeable future. The current composition of the portfolio as at
Diversification
The Company expects to invest in a concentrated portfolio of securities with the number of equity investments averaging fifteen companies. The Company will not make investments for the purpose of exercising control or management and will not invest in the securities of, or lend to, any one company (or other members of its group) more than 15% by value of its gross assets at the time of investment. The Company will not invest more than 15% of gross assets in other closed-ended investment funds.
Gearing
The Directors have discretion to permit borrowings up to 50% of the Net Asset Value. However, the Directors have decided that it is in the Company’s best interests not to use gearing. This is in part a reflection of the size and risk associated with the Company’s unlisted investment in LTL, but also in response to the additional administrative burden required to adhere to the full scope regime of the AIFMD.
Dividend Policy
The Directors’ policy is to pay annual dividends consistent with retaining the maximum permitted earnings in accordance with investment trust regulations, thereby building revenue reserves.
In a year when this policy would imply a reduction in the ordinary dividend the Directors may choose to maintain the dividend by increasing the percentage of revenue paid out or by drawing down on revenue reserves. Revenue reserves are currently more than twice the annual proposed 2025 ordinary dividend.
All dividends have been distributed from revenue or revenue reserves .
Chairman’s Statement
The Company’s net asset value (‘NAV’) fell from £1,026.43 per share on
It has been disappointing to report that the Company’s NAV total return has underperformed since the Company changed its benchmark to the MSCI World Index. Against this background, it is important to remember that the Investment Objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital. Since the Company’s inception in 2001 long-term NAV total returns were 12.2% per annum, well ahead of inflation of 3.5% per annum (measured by the RPI index). However since
Three of the Company’s biggest quoted equity holdings, the London Stock Exchange Group (‘LSEG’), Nintendo and RELX have driven performance over the financial year in local currency with returns of 22%, 25% and 15%, respectively. Such performance suggests that investors are beginning to recognise the success that these companies have had in exploiting technology to improve the products and services offered to their customers, in much the same way as the so
-
called “Magnificent 7”, whose share price performances have contributed so much to comparative index returns. Set against these encouraging returns was the 29% negative total return from Diageo and, even more significantly, the 16% negative total return from the holding in
As part of the Company’s ongoing efforts to engage with its shareholders, QuotedData has been appointed to undertake independent third-party research at the Company. This research offers an objective overview of the Company’s performance, strategy, and outlook. It has been made available to both current and prospective shareholders and can be accessed via the Company’s website.
LTL’s valuation reflected a continued decline in its funds under management (‘FUM’), from £15.2bn at
Although LTL’s revenues and profits have fallen in its financial year to
Whilst the co-founders,
The Valuation of
The valuation methodology remains unchanged. It is based on a percentage of LTL’s FUM, with the percentage applied adjusted to reflect the ongoing profitability of LTL. Using this methodology, the Company’s holding in LTL was valued at £50m as at
The Company’s Dividend
With dividends from LTL accounting for as much as 76% of the Company’s revenues in its financial year to
The Company’s dividend policy is to retain as much net income as allowable under
Share Split Proposal
Over the last decade the percentage of the Company’s shares held directly by retail investors, as opposed to institutional investors, has increased. The Board assumes that the number of individual holders has also increased because investment platforms have accounted for a greater proportion of the Company’s ownership. Having a share price with such a high denomination militates against shareholders attempting to invest smaller amounts in the Company. In order to improve the liquidity of the Company's shares the Board proposes to split the Company’s shares on a 100 - for - 1 basis.
Following the share split, shareholders will receive 99 additional Ordinary shares for each Ordinary Share held immediately prior to the split. The net effect is that, following the split, shareholders will have 100 times as many shares and the Company’s share price should, in theory, be 1/100th of what it was previously. The share split will affect neither the value of any shareholder’s overall investment in the Company, nor affect shareholder rights. Shareholders will have the opportunity to vote on this proposal at the forthcoming Annual General Meeting (‘AGM’), details of which can be found under Notice of Meeting, on pages 105 to 110 of the Annual Report.
Articles of Association
In preparing for the Share Split, the Board is proposing to delete Article 5 of the Existing Articles. This will involve the removal of the concept of an authorised share capital of the Company as well as the reference to the Company’s share capital of £150,000 being divided into 200,000 Ordinary Shares of 75p each.
A summary of the principal change to the Existing Articles can be found on pages 37 and 38 of the Annual Report.
Board Changes
Since the year end the Board was delighted to welcome
In anticipation of her retirement, I would like to extend our thanks to Vivien for her dedicated service. Throughout her tenure, her expertise, wealth of knowledge and insightful guidance have been invaluable to the Board. We wish Vivien all the best for the future.
The Annual General Meeting
This year’s AGM will be held at
Considerations for the Future
The unprecedented trade policies introduced by the US administration have upended the assumptions embedded in the business strategy of most global companies, as has been reflected in volatile stockmarkets. Companies will develop responses as the new landscape becomes clearer. It is worth pointing out that LTL’s investee companies sell more software or services than tradeable goods. As such, LTL’s portfolios may be better placed to avoid the full force of newly introduced tariffs. We also believe that ultimately the utility of the products or services which our investee companies produce will allow them to thrive, whatever tariff disruptions might be faced in the immediate future. Durability and resilience are characteristics that we value highly in all our companies, especially when it is found in less expected places and therefore is more likely to be mispriced. Such characteristics have arguably not been at the top of investors’ shopping lists in recent years. If markets continue to exhibit heightened volatility in these uncertain times perhaps that will change.
The performance of LTL’s investment strategies remains key to future outcomes for your Company. Although the immediate past has been challenging and the future is uncertain, the Board believes that LTL has the ability to thrive once again and add significant value to your Company’s future performance. This belief is based upon LTL’s consistent approach to investment that has added value for investors in a differentiated way over 25 years, an increasingly experienced successor line-up, together with the financial strength and flexibility referred to above.
Roger Lambert
Chairman
Portfolio Holdings at 31 March 2025
(All ordinary shares unless otherwise stated)
% of Look through
Fair value net basis % of
Holding Security £’000 assets total assets†
6,301 Lindsell Train Limited 49,608 26.1 26.1
232,900 London Stock Exchange 26,679 14.0 14.3
410,000 Nintendo 21,464 11.3 11.3
12,500,000 WS Lindsell Train North American
Equity Fund Acc* 19,959 10.5 –
363,000 RELX 14,059 7.4 7.7
198,890 Unilever 9,169 4.8 5.1
425,000 Diageo 8,560 4.5 4.7
124,365 Mondelez International Inc. 6,537 3.4 3.7
1,043,800 A.G. Barr 6,398 3.4 3.4
94,220 PayPal 4,760 2.5 2.8
195,331 Universal Music Group 4,155 2.2 2.2
73,270 Heineken 4,099 2.1 2.2
420,000 Finsbury Growth & Income Trust PLC* 3,713 1.9 –
8,430 Thermo Fisher Scientific 3,250 1.7 2.0
39,099 Laurent Perrier 3,226 1.7 1.7
Indirect Holdings – – 10.2
Total Investments 185,636 97.5 97.4
Net Current Assets 4,790 2.5 2.6
Net Assets 190,426 100.0 100.0
†
Look-through basis: Percentages held in each security is adjusted upwards by the amount of securities held by
* LTL managed funds
Leverage
We detail below the equity exposure of the Funds managed by LTL as at
Net Equity
Exposure
WS Lindsell Train North American Equity Fund Acc 99.8%
Finsbury Growth and Income Trust PLC 96.8%
Analysis of Investment Portfolio at
Breakdown by Location of Listing
(look-through basis)^
UK * 65.7%
USA 16.5%
Japan 11.6%
Europe excluding UK 6.2%
Rest of World 0.0%
Total 100.0%
Breakdown by Location of Underlying Company Revenues
(look-through basis)^USA ** 35.6%Europe excludingUK ** 23.7%UK ** 23.1% Rest of World 13.5%Japan 4.1% 100.0%
Breakdown by Sector
(look-through basis)^ Financials 47.2% Consumer Staples 22.9%Communication Services 15.8% Industrials 9.3% Information Technology 2.3% Health Care 2.1% Consumer Discretionary 0.4% 100.0%
^ Look-through basis: this adjusts the percentages held in each asset class, country or currency by the amount held by LTL managed funds. It provides shareholders with a more accurate measure of country and currency exposure by aggregating the direct holdings of the Company with the indirect holdings held by the LTL funds.
* LTL accounts for 26.1% and is not listed.
** LTL accounts for 11 percentage points of the
Manager’s Report
Of course we are disappointed with our investment performance last year and, indeed, the last few years. The reasons for the disappointing performance are easily stated. We have not had enough exposure to the US technology bull market and we have had too much in what have been in the past steadily growing consumer brand-owning companies, but whose growth since Covid has slowed. We have tried to digest these lessons and respond accordingly.
As to that, although we have added two new holdings over the last 18 months, with the most recent, Thermo Fisher Scientific, discussed below, what we have not done is make any radical changes to the portfolio. This is because we, by and large, remain confident about the investment merits of the shape of the portfolio and its constituents. But in addition, we know that any capitulation – let’s say for instance: selling, Unilever to buy Nvidia – runs the risk of transacting at the bottom and top prices respectively making things even worse for shareholders.
Or, at least that was the case until the extraordinary events of the first four months of 2025, that have triggered volatility in the NASDAQ tech-leaders and US equity assets in general. Through this period it has been reassuring to us that your portfolio of quoted investments (excluding the stake in unquoted
Not every consumer stock in the portfolio has done well in 2025. Laurent-Perrier is down 7% and Diageo 21%. These falls are explained by investor concerns that consumers will cut back on consumption of premium products, such as fine champagne and top-end spirits. It also results from this pair being, exposed to tariffs. In our opinion, these concerns are temporary and we expect the long-term trend of consumers drinking lower volumes of alcohol, and instead drinking better quality products, will reassert itself – to the benefit of both companies. Diageo has really been in the eye of the storm, because the US is such an important market for it, at nearly 50% of profits. But we think this profit share could be seen as a strategic advantage again one day. All attention is on the malign effect of tariffs, but little thought has been given, in our opinion, to the other side of President Trump’s stated policy, which is for substantial tax cuts and a strong domestic economy. A booming US economy would be a big positive for Diageo.
Meanwhile, and even more encouraging, we think, the big holdings we have in companies that offer participation in technology-led growth, which demonstrated strong performance during 2024, have also held up or appreciated in 2025 to date. This is notably true of the London Stock Exchange Group (“LSEG”), Nintendo and RELX, make up nearly 45% of the quoted portfolio. This is in part because none of the three are listed on NASDAQ and have, as a result, not been caught up in the boom there. So there has been no reason for them to fall. Yet, consider – LSEG has a promising joint venture with Microsoft, Nintendo is using the current generation of Nvidia chips in its latest console to enhance the gaming experience and RELX has been at the forefront of actually making a commercial success of Artificial Intelligence. We hope this trio still offers a lot of growth and there remains the possibility they could be “discovered” by global investors now looking outside the US for growth companies.
It is clear to all of us at LTL that we must do better for shareholders in the Company and, indeed, all our clients. We intend to do so by sticking with our preferred investment and industry ideas – companies with Data or Intellectual Property whose utility is enhanced by developments in technology, and consumer brands that remain relevant and aspirational for consumers. The portfolio is already well exposed to companies with these characteristics. Nonetheless, we hope we can do better and will make changes where we deem appropriate; for instance initiating holdings, funded by trimming existing positions. Last year we added Universal Music Group, owner of some of the world’s most valuable music copyrights. And recently Thermo Fisher Scientific (“Thermo”). The investment case for the latter is outlined below by my colleague
“Thermo is a company we have long admired, and benefits from the same industry tailwinds supporting the pharmaceutical industry (we all want to be healthy, and well-funded R&D-driven drug discovery is likely the best way to achieve this) without taking on the risk of patent approval and expiry. The largest player in global life sciences tools and diagnostics, Thermo, provides lab equipment, testing, and contracted research and manufacturing services to the pharmaceutical industry, benefiting from the inexorable rise in government and commercial healthcare spend. Historically this has seen R&D budgets expand by at least 3-5% p.a. (at worst, during the financial crisis this was flat). Whether aided by AI, or the shift to large molecule biologics (both putative disruptors to the traditional prescription pharmaceutical model discussed above), discovery, testing, and manufacture requirements grow as complexity increases, to the benefit of Thermo. With ‘trusted partner’ status (some customers spend over a billion dollars with them), regulatory support (certain patent approvals even specify the use of Thermo’s products), and a high 80%+ weighting to recurring revenues, sales are sticky, whilst double-digit margins and returns to equity are competitive and increasing with scale.
Thermo aspires to high-single-digit revenue growth (comprised of industry growth boosted by ongoing share gains, positive pricing, and bolt-on acquisitions) and mid-teens USD earnings growth (supported by c.50bps of margin expansion and buybacks). Yet, a flat share price for the past five years, as customers and shareholders alike digest the covid boom, leaves Thermo on a low-20s earnings multiple, making this, we believe, an attractive point to access the shares. Whilst the dividend yield is low, the 15% dividend per share compound growth rate over this same five-year period is impressive and a powerful underlying ingredient for the compounding we seek.”
Sometimes innovation and rapid growth are all that matter in equity markets. We are invested in some innovative companies, like Thermo; innovation can be found in some surprising places, such as Diageo’s Nitrosurge product which is helping drive growth for Guinness. But there are other times when durability and predictability become more highly prized. There are good grounds for believing that Barr’s IRN-BRU, Heineken, Cadbury and Unilever’s Dove franchise will continue to generate inflation-protected cash flow growth for many decades to come. And that such durability is rare in the corporate sector and deserves to be highly valued. Looking ahead our job is to get the balance between innovation and durability right within the portfolio and hope that will bring a return to more competitive absolute (and relative) returns for your Company.
Investment Manager
Director,
Performance
Whilst the Board is disappointed that the Company has underperformed in the short term, the Investment Manager’s report explains why the Company’s portfolio remains appropriate. The Board remains supportive of the Investment Manager’s view. Please refer to the Chairman’s Statement beginning on page 6 of the Annual Report for further information.
Whilst performance is compared with the MSCI World Index in Sterling, the Company’s portfolio is constructed and managed without reference to a stock market index. The Investment Manager selects investments based on the assessment of their long-term value, thereby seeking to achieve the investment objective of the Company.
Prospects
The Board continues to support fully the Manager’s strategy and to believe that it will deliver strong investment returns over the long term.
This is supported by the Company's performance since inception (
The Directors provide an explanation in the Viability Statement on pages 20 and 61 of the Annual Report as to how they have assessed the prospects of the Company, over what period they have done so and why they consider that period to be appropriate.
Key Performance Indicators (“KPIs”)
The Board uses certain financial and non-financial KPIs to monitor and assess the performance of the Company in achieving its strategic aims.
The Board reviews the performance of the portfolio in detail and is presented with the views of the Manager at each meeting. Information on the Company’s performance is provided in the Chairman’s Statement (beginning on page 6 of the Annual Report) and the Manager's Report (beginning on page 12 of the Annual Report). This performance is assessed against the following KPIs: Net Asset Value Total Return, Share Price Total Return and Dividend per Ordinary Share. The KPIs are unchanged from the prior year.
Net Asset Value Total Return^ and Share Price Total Return^ are compared with the benchmark and provide the key performance indicators for assessing the development and performance of the Company.
31 March 2025 31 March 2024 % Change
NAV total return^† -2.2% +2.1%
Share price total return^† +9.0% -19.8%
Benchmark (MSCI World Index in Sterling)† +4.8% +22.5%
Recommended final dividend per Ordinary £42.00 £51.50 -18.4%
Share
^ Alternative Performance Measure (see Glossary beginning on page 113 of the Annual Report).
† These are percentage change figures for the year to 31 March.
Please see Glossary of Terms beginning on page 113 of the Annual Report for an explanation of terms used.
Alternative Performance Measures (“APMs”)
The Board believes that each of the APMs, which are typically used within the Investment Trust Sector, provides additional useful information to shareholders in order to assess the Company’s performance between reporting periods and against its peer group. The measures used for the year under review have remained consistent with the prior year.
Discount/premium to NAV^
The Board regularly reviews the level of the discount/premium of the Company’s share price to the net asset value per share and considers ways in which share price performance may be enhanced, including the effectiveness of share buybacks, where appropriate. Any decision to repurchase shares is at the discretion of the Board.
Dividend Yield^
The Directors regard the Company’s dividend yield to be a key indicator of performance. The dividend yield measures the gross income receivable based on the payment of the historic dividend per share expressed as a percentage of the Company’s current share price.
Ongoing Charges^
Ongoing charges represent the costs that shareholders can reasonably expect to pay from one year to the next, under normal circumstances. The Board continues to be conscious of expenses and works hard to maintain a sensible balance between high quality service and the cost of provision.
NAV Total Return^
The Directors regard the Company’s net asset value per share total return as being the overall measure of value delivered to shareholders over the long term. The Board considers the principal comparator to be the MSCI World Index Total Return (Sterling adjusted).
Share Price Total Return^
The Directors also regard the Company’s share price total return to be a key indicator of performance. This reflects share price growth of the Company which the Board recognises is important to investors.
31 March 2025 31 March 2024
Discount to NAV 14.1% 22.0%
Dividend yield 5.1% 6.4%
Ongoing charges 0.8% 0.8%
NAV total return -2.2% +2.1%
Share price total return +9.0% -19.8%
^ Further information on each of the Alternative Performance Measures and the basis of their calculation can be found in the Glossary beginning on page 113 of the Annual Report.
Principal Risks, Emerging Risks and Risk Management
The Board is responsible for managing the risks faced by the Company. Through delegation to the Audit Committee, the Board has established procedures to manage risk, to review the Company’s internal control framework and to establish the level and nature of the principal risks the Company is prepared to accept in order to achieve its long-term strategic objective. At least once a year the Audit Committee carries out a robust assessment of the principal and emerging risks. Further information is provided in the Audit Committee Report beginning on page 59 of the Annual Report.
These principal risks and the ways they are managed or mitigated are set out below.
The Company's Approach to Risk Management
For each risk identified, during the year the Audit Committee considers both the likelihood and impact of the risk and then assigns an inherent risk score. The scoring of the risk is then reconsidered once the respective key mitigations are applied and a residual risk score is assigned.
The Board’s policy on risk management has not materially changed during the course of the reporting period and up to the year end.
Change in inherent risk assessment over the last financial year: No change, Decreased, Increased and
* New risk included during the year.
Change Principal Risks and Uncertainties Key Mitigations
The Board reviews at every Board
meeting the investment portfolio,
income forecasts and levels of
available revenue reserves prepared
Corporate Strategy by the Company Secretary.
The Board may have to reduce the Sufficient dividends are paid to
Company’s dividend. maintain investment trust status.
76% of the Company’s income is The Company has retained revenue
represented by dividends from LTL. reserves, which can be used to
If LTL’s funds under management supplement dividend payments in the
fall the Company’s dividend paying event of a short-term reduction in
potential could be negatively net revenue.
impacted.
In the event of a sustained fall in
LTL’s FUM and its dividend paid to
the Company, the Company’s dividend
would have to be adjusted downwards.
The Company’s share price may Regular consideration is given to the
differ materially from the NAV per share price premium or discount to
share resulting in the shares NAV per share and the Company has
trading at either a premium or a authority to buy back shares and hold
discount to NAV. in treasury.
The Board keeps the investment
management arrangements under
continual review. In turn, the
Manager reports on developments at
LTL, including succession and
business continuity plans. The Board
Investment Strategy and Activity meets with other members of the wider
team employed by the Manager.
The departure of a key individual
at the Manager may affect the Key-man insurance has been secured by
Company’s performance. the Company to help mitigate this
risk. The Board is also encouraged by
the continued development of the
investment management team at LTL who
are now taking on greater
responsibility at a more senior
level.
The investment strategy adopted by The Board regularly discusses with
the Manager, the high degree of the Manager the structure of the
portfolio concentration and other portfolio, including asset allocation
factors, may lead to a long-term and portfolio concentration.
investment return that is
materially lower than the Company’s The Board reviews the performance of
comparator benchmark index, and a the portfolio against the benchmark
possible failure to achieve the at every meeting.
Company’s investment objective.
The Board receives quarterly ESG
updates, which include an update on
any climate change related
engagement, from the Manager. The
Board monitors the Manager on ESG
matters to ascertain that the
portfolio companies are acting in
accordance with the Manager’s ESG
approach.
The Manager is a signatory to the UK
Stewardship Code and actively
engages with portfolio companies on
ESG matters including climate
The adverse impact of climate change change.
on the portfolio companies’
operational performance. LTL developed its own methodology to
assess the carbon impact of the
portfolio. LTL became a signatory of
Net Zero Asset Managers (“NZAM”) in
December 2021 . This reflects LTL's
enhanced efforts as a firm to
support the goal of net zero
greenhouse gas emissions by 2050.
Details of the Company’s and
Manager’s ESG policies together with
the weighted average carbon
intensity of the portfolio companies
are set out on pages 26 to 32 of the
Annual Report.
The Board holds quarterly
discussions with the Manager at each
Board meeting. Consideration is
The investment in LTL becomes an given during a strategy meeting to
even greater proportion of the the prospects of LTL and subsequent
overall value of the Company’s impact on the Company.
portfolio.
The Board receives monthly
compliance reports from the Company
Secretary which monitor compliance
with the investment restrictions.
The Board has appointed reputable
service providers who are well
experienced in the investment trust
sector. Individual Directors are
Operational well connected in the investment
market and investment company sector
Adverse reputational impact of one and thereby keep themselves
or more of the Company’s key service appraised of developments in the
providers which, by association, sector. The Manager and the Company
causes the Company reputational Secretary provide regular news
damage. updates on all matters affecting the
Company.
The Board undertakes an annual
review of the level of service
provision of the service providers.
The Manager and the Company
Secretary have in place robust
compliance and risk monitoring
programmes.
Financial
The Board receives monthly
Fraud (including unauthorised compliance reviews and quarterly
payments and cyber fraud) occurs expenses analysis.
leading to a loss.
An annual statement is obtained by
the Audit Committee from all service
providers giving representations
that there have been no instances of
fraud or bribery.
The Manager is responsible for
undertaking reviews of the
creditworthiness of the
counterparties that it uses.
All business with respect to
portfolio activity is conducted
The Company is exposed to credit through selected brokers on a
risk. delivery versus payment basis
thereby minimising exposure to
broking counterparties.
Further information on financial
instruments and risk can be found in
note 17 to the Financial Statements
beginning on page 87 of the Annual
Report.
The Directors acknowledge that
market risk is inherent in the
investment process as the Manager
maintains a concentrated portfolio
of securities. The Board has imposed
guidelines within its investment
policy to limit exposure to
individual holdings.
The Company Secretary reports to the
The Company is exposed to market Board with respect to compliance
price risk. with investment guidelines on a
monthly basis. The Manager provides
the Board with regular updates on
market movements. No investment is
made in derivative instruments and
no currency hedging is undertaken.
Further information on financial
instruments and risk can be found in
note 17 to the Financial Statements
beginning on page 87 of the Annual
Report.
The Board monitors regulatory
changes with the assistance of the
Company Secretary, the Manager and
external professional advisers to
Accounting, Legal and Regulatory ensure compliance with applicable
laws and regulations.
The Company and/or the Directors
fail(s) to comply with its legal The Board reviews compliance reports
requirements in relation to FCA and internal control reports
dealing rules/handbook procedures, provided by its service providers,
the UK Listing Rules, the Companies as well as the Company’s Financial
Act 2006, relevant accounting Statements and revenue forecasts.
standards, the Bribery Act 2010, the
Criminal Finances Act 2017, the The Company Secretary presents a
Association of Investment Companies quarterly report on changes in the
(“AIC”) Statement of Recommended regulatory environment and how and
Practice (“SORP”), GDPR, tax when changes are to be addressed.
regulations or any other applicable
regulations. As a member of the AIC, the Board
receives regular technical updates
which highlight forthcoming
compliance obligations and
regulatory issues.
The Board monitors the regulatory
environment with the assistance of
The regulatory environment in which its Company Secretary, Manager and
the Company operates changes, external professional advisers to
affecting the Company's business ensure that the Board is aware of
model. any likely changes in the regulatory
environment and will be able to
adapt as required.
The Board approves the monthly
valuation of the Company's
Investment.
An audit of LTL’s valuation is
conducted annually by a leading
independent external audit firm.
J.P. Morgan Cazenove Ltd undertook a
review of the Company’s valuation
methodology applied to its unlisted
The Company’s valuation of its investment in LTL during 2022. The
investment in LTL is materially appropriateness of the valuation
misstated. methodology was reviewed by the
Board and J.P. Morgan Cazenove Ltd
during the year.
The Manager and the Company
Secretary report to the Board at
every meeting. An internal controls
report is produced by the Company
Secretary on an annual basis
covering controls over valuation and
release of weekly net asset value
per share.
Emerging Risks
The Audit Committee regularly reviews the risk register. Mitigations, the scoring of each risk and any emerging risks are discussed in detail as part of this process to ensure that emerging as well as known risks are identified, and, so far as practicable mitigated.
The experience and knowledge of the Directors is useful in these discussions, as are update papers and advice received from the Board's key service providers such as the Manager and the Company Secretary. In addition, the Company is a member of the AIC, which provides regular technical updates as well as drawing members' attention to forthcoming industry and/or regulatory issues and advising on compliance obligations.
Current identified emerging risks are as follows:
Emerging Risks and Uncertainties Key Mitigations
Emerging Risks The Manager monitors portfolio
construction, performance and liquidity
Geopolitical and macroeconomic to assess and manage the impact of
uncertainties and conflicts, whether increased market volatility on the
they be political, economic or listed portfolio and on the Company’s
military, introduce new risks and holding in LTL.
exacerbate existing risks. such as:
The Manager monitors the impact of the
• disruptions to supply chains, continued war in Ukraine and the effect
operations and markets for investee of sanctions against Russia ; the
companies both as a direct result of conflict in the Middle East and tensions
conflict and as result of economic between China and the West.
sanctions and the threat of trade
tariffs; The Company’s investment approach means
that it owns companies with strong brand
• prolonged inflation and elevated equity and pricing power making them
interest rates, slowing global economic more able to pass on cost increases and
growth and the fear or presence of mitigate the effects of inflation on
recession; portfolio holdings.
• increased market volatility and The Board reviews regular internal
reduced investor risk appetites; and control reports from its key service
providers that include cyber defences
• increased threat of state sponsored and other mitigants against unauthorised
cyberattacks. network access.
While presenting investment In view of the number of extraordinary
opportunities, the rapid development of and unpredictable events in recent
new technologies, such as artificial years, the Board considered that the
intelligence, may disrupt the markets likelihood of the emerging risks
and operating models of the companies identified due to geopolitical and
in which the Company invests, damaging macroeconomic conflicts had increased.
their potential investment returns.
The Audit Committee will continue to review emerging risks that arise from time to time to ensure that the implications for the Company are properly assessed and mitigating controls introduced where necessary.
Future Developments
The Board’s primary focus is on LTL’s investment approach and performance both as the Company’s Manager and as an investment. The subject is thoroughly discussed at every Board meeting.
In addition, the Company Secretary updates the Board on investor feedback, as well as wider investment company issues.
An outline of performance, investment activity and strategy, and market background during the year, as well as the outlook, is provided in the Chairman's Statement beginning on page 6 of the Annual Report and the Manager's Report beginning on page 12 of the Annual Report.
It is expected that the Company’s strategy will remain unchanged in the coming year.
Long-Term Viability Statement
The Directors have carefully assessed the Company’s financial position and prospects as well as the principal risks facing the Company and have formed a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five financial years.
To make this assessment and in reaching this conclusion, the Audit Committee has considered the Company’s financial position and its ability to liquidate its portfolio and meet its liabilities as they fall due and notes the following:
•
The Company has a liquid investment portfolio of
• Based on historic analysis, excluding the holding in the LTL fund, the Board believes that 96.2% of the current portfolio could be liquidated within 30 business days with 93.7% in five business days. There is no expectation that the nature of the investments held within the portfolio will be materially different in the future.
• With an ongoing charges ratio of 0.8%, the expenses of the Company are predictable and modest in comparison with its assets and there are no capital commitments currently foreseen which would alter that position.
• Revenue expenses of the Company are covered more than six times by investment income.
• The closed-ended nature of the Company means that, unlike an open-ended fund, it does not need to realise investments when shareholders wish to sell their shares.
• The founder directors of LTL, in which the Company holds 23.6%, have given their verbal assurance that they remain committed to LTL for at least seven years on a rolling basis.
• The Company has decided not to use gearing.
• The Company has no employees, only its non-executive Directors. Consequently it does not have any potential redundancy or other employment related liabilities or responsibilities.
The Directors, as well as considering the potential impact of the principal risks and various severe but plausible downside scenarios, have also made the following assumptions in considering the Company’s longer-term viability:
• The Board and the Investment Manager will continue to adopt a long-term view when making investments, and anticipated holding periods will be at least five years.
• Regulation will not increase to a level that makes running the Company uneconomical.
The Board’s long-term view of viability will be updated each year in the Company’s Annual Report.
Engaging with the Company’s Stakeholders
The following ‘Section 172’ disclosure, required by the Companies Act 2006 and the AIC Code, describes how the Directors have had regard to the views of the Company's stakeholders in their decision making.
The benefits of engagement How the Board, the Manager and
Stakeholder Group with the Company's the Company Secretary have
stakeholders engaged with the Company's
stakeholders
The Board and the Manager
receive shareholder feedback
directly from shareholders or
from the appointed broker.
The Board recognises the An analysis of the Company’s
importance of communication shareholder register is
with shareholders. provided to the Directors at
each Board meeting.
Investors Clear communication of the
Company’s strategy and the Shareholders have access to the
performance against the Board, directly and via the
Company’s objective can help Company Secretary, throughout
maintain demand for the the year. These communications
Company’s shares. help the Board make informed
decisions when considering how
to promote the success of the
Company for the benefit of
shareholders over the long
term.
The benefits of engagement How the Board, the Manager
Stakeholder Group with the Company's and the Company Secretary
stakeholders have engaged with the
Company's stakeholders
Key mechanisms of engagement
include:
• The Annual General
Meeting.
• The Board will explain in
its announcement of the
results of the Annual
General Meeting the actions
it intends to take to
consult shareholders in
order to understand the
reasons behind any
significant votes against.
Following the consultation,
an update will be published
no later than six months
after the Annual General
Meeting and the Annual
Report will detail the
impact the shareholder
feedback has had on any
decisions the Board has
taken and any actions or
resolutions proposed.
• The Company’s website
which hosts monthly reports
and Annual and Half-year
Reports.
• One-on-one investor
meetings as required.
• Group meetings with
professional investors as
required.
• The Board has engaged the
services of QuotedData to
undertake independent
third-party research.
The Board meets regularly
with the Company’s Manager
throughout the year both
formally at the quarterly
Board meetings and
informally as needed. The
Board and Manager
communicate regularly
outside these meetings to
ensure a collegiate
Engagement with the approach.
Company’s Manager is
necessary to evaluate its Furthermore, Michael
performance against the Lindsell is a Director of
Company’s stated strategy both the Company and of the
and to understand any risks Manager. The aim is to
or opportunities this may maintain a strong
present. relationship between the
Board and Manager when
The Board monitors the considering the interests of
Manager’s approach to the Company’s stakeholders,
environmental, social and whilst upholding the
governance (“ESG”) issues. Company’s values.
Manager
Engagement also helps The Manager’s attendance at
ensure that investment each Board meeting also
management costs are provides the opportunity for
closely monitored and the Manager and Board to
remain competitive. further reinforce their
mutual understanding of what
The Chairman’s Statement is expected from both
beginning on page 6 of the parties.
Annual Report and Appendix
4 beginning on page 104 of The Manager’s performance is
the Annual Report describe evaluated informally on a
the key decisions taken regular basis, with a formal
during the year relating to review carried out on an
LTL. annual basis by the
Management Engagement
Committee. The Investment
Management Agreement is
reviewed as part of this
process.
The Audit Committee review
the Manager's internal
controls and governance
policies on an annual basis.
The Board and the Company
Secretary engage regularly
with other service providers
both in one-to-one meetings
and via regular written
reporting. This regular
interaction provides an
environment where topics,
issues and business
development needs can be
dealt with efficiently and
collegiately.
As an externally managed The Board maintains regular
investment company, the contact with the Company’s
Company has no employees, key service providers as
customers, operations or well as carrying out a
premises. Therefore, the review of the service
Company's key stakeholders providers’ business
(other than its continuity plans and
shareholders) are additional cyber security
considered to be its provisions.
service providers.
The key service providers’
The Company contracts with performance is evaluated by
third-parties for other the Management Engagement
services including: Company Committee on an annual
Other Service Providers Secretary and basis, or more often if
Administrator, Registrar appropriate. The terms and
and Custodian. The Company conditions underlying the
ensures that the relationship between the
third-parties to whom the service providers are
services have been reviewed as part of this
outsourced complete their process. This approach is
roles in line with their taken to enhance service
service level agreements levels and strengthen
and are able to continue to relationships between the
provide these services, Company and its providers to
thereby supporting the ensure the interests of the
Company in its success and Company’s stakeholders are
ensuring compliance with best served by maintaining a
its obligations. high level of service whilst
keeping costs proportionate.
The Audit Committee met with
BDO LLP to review the audit
plan for the year, agree
their remuneration, review
the outcome of the annual
audit and to assess the
quality and effectiveness of
the audit process. Please
refer to the Audit Committee
Report beginning on page 59
of the Annual Report for
further information.
The Manager invests in a
concentrated portfolio of
durable business franchises
with the intention of
holding these positions for The Board encourages the
a considerable time. Company’s Manager to engage
with companies and in doing
The Manager engages with so expects ESG issues to be
the management of these an important consideration.
companies on a periodic
basis and reports its The Board receives an update
impressions on the on LTL's engagement
prospects of the companies activities within a
Portfolio companies to the Board. dedicated quarterly ESG
report together with
Gaining a deeper quarterly updates concerning
understanding of the the prospects of the
portfolio companies and portfolio companies.
their strategies as well as
incorporating consideration Details of LTL's approach to
of ESG factors into the responsible ownership can be
investment process assists found on pages 26 to 32 of
in understanding and the Annual Report .
mitigating risks of
investments as well as
identifying potential
opportunities.
The Board ensures The Company Secretary
Regulators compliance with rules and reports to the Board on a
regulations as relevant to monthly basis and at each
the Company. Board meeting.
KEY AREAS OF ENGAGEMENT MAIN DECISIONS AND ACTIONS TAKEN
• The Manager meets with shareholders as
required and at the Annual General
Meeting.
• Shareholders are provided with
performance updates via the Company's
website as well as the usual financial
• Ongoing dialogue with shareholders reports and monthly manager reports.
concerning the strategy of the Company,
performance and the portfolio. • The Board continued to monitor share
price movements closely and concluded
• The impact of market volatility that it was not in shareholders’ best
caused by certain geopolitical events interests to utilise the share buy-back
in the portfolio. facility.
• Share price performance and the • The Board agreed to proceed with a
Company's and wider investment trust share split of the Company’s shares
sector discounts. which will be proposed for shareholder
approval at the forthcoming Annual
General Meeting.
• Further information can be found on
pages 36, 37, 38 of the Annual Report
and within the Notice of Meeting
beginning on page 105 of the Annual
Report.
• The Board has in place a refreshment
programme which is reviewed annually by
the Nomination Committee.
• Cornforth Consulting was appointed by
the Board in January 2025 to assist with
the appointment of Sian Hansen , who
• Board Composition. became a member of the Board on 4 June
2025 and will offer herself for election
by shareholders at the forthcoming
Annual General Meeting.
• In accordance with the Board's
Succession Plan Vivien Gould will retire
at the conclusion of the forthcoming
Annual General Meeting.
LTIT’s Responsible Investment Policy
The Board believes that consideration of ESG factors is important to shareholders and other stakeholders, and has the potential to protect and enhance investment returns.
In its Responsible Engagement & Investment Policy, the Manager states that its evaluation of ESG factors is an inherent part of the investment process and best practice in this area is encouraged by the Board. These factors include, but are not limited to: “corporate strategy, operating performance, competitive positioning, governance, environmental factors (including climate change), social factors, remuneration, reputation and litigation risks, deployment of capital, regulation and any other risks or issues facing the business”.
The Board has delegated authority to the Manager to vote the shares owned by the Company that are held on its behalf by its Custodian. The Board has instructed that the Manager submits votes for such shares wherever possible and practicable. The Manager is required to refer to the Board on any matters of a contentious nature.
The Manager’s
LTL became a signatory of Net Zero Asset Managers Initiative in
Modern Slavery Act
The Company does not provide goods or services in the normal course of business, and as a financial investment vehicle, does not have customers. Therefore, the Directors do not consider that the Company is required to make a statement under the Modern Slavery Act 2015 in relation to slavery or human trafficking. The Company’s suppliers are typically professional advisers and the Company’s supply chains are considered to be low risk in this regard.
The Board has made due diligence enquiries of the service providers that process the Company’s shareholder data to ensure the Company’s compliance with the
Common Reporting Standard ("CRS")
CRS is a global standard for the automatic exchange of information commissioned by the
The Registrar, MUFG Corporate Markets has been engaged to collate such information and file the reports with HMRC on behalf of the Company.
The Company notes the TCFD recommendations on climate related financial disclosures. The Company is an investment company and, as such, it is exempt from the
The Company’s TCFD Product Report can be found on the Company's website together with a link to the Investment Manager’s TCFD Entity Report.
Global Greenhouse Gas Emissions
The Company is an investment trust, with neither employees nor premises, nor has it any financial or operational control of the assets which it owns. It has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Reports and Directors’ Reports) Regulations 2013 or the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, including those within the Company’s underlying investment portfolio.
The Company consumed less than 40,000 kWh of energy during the year in respect of which the Directors’ Report is prepared and therefore is exempt from the disclosures required under the Streamlined Energy and Carbon Reporting criteria.
The Board is aware of the continued emphasis on ESG matters in recent years. The Manager engages with all the companies in the portfolio to understand their ESG approach and has developed its own methodology to assess the carbon impact of the portfolio.
LTL’s Approach to Responsible Ownership
ESG integration
Seeking Sustainability
As a long-term investor,
To that end LTL’s initial analysis and ongoing company engagement strategy seeks to incorporate all sustainability factors that they believe will affect the company’s ability to deliver long-term value to shareholders. Such factors may include but are not limited to; environmental (including climate change), social and employee matters (including turnover and culture) and governance factors (including remuneration and capital allocation), cyber resilience, responsible data utilisation, respect for human rights, anti-corruption and anti-bribery, and any other risks or issues facing the business and its reputation. This work is catalogued in a proprietary database of risk factors in order to centralise and codify the team’s views, as well as to prioritise LTL’s ongoing research and engagement work and is cross-referenced with the SASB Materiality Map©.
If, as a result of this assessment, LTL believes that an ESG factor is likely to materially impact a company’s long-term business prospects (either positively or negatively) then this will be reflected in the long-term growth rate that is applied in the investment team’s valuation of that company, which alongside the team’s more qualitative research will influence any final portfolio decisions (for example, whether LTL starts a new position or sell out of an existing holding).
Positive/Negative Screening
As a product of LTL’s investment philosophy, it does not invest in the following industries:
– capital intensive industries (energy, commodities or mining) or any companies involved in the extraction and production of coal, oil or natural gas; and
– industries that LTL judges to be sufficiently detrimental to society that they may be exposed to burdensome regulation or litigation that could impinge on financial returns (e.g. tobacco, gambling or arms manufacturers).
Similarly, LTL’s investment approach has steered
Climate Change
The risks associated with climate change represent a great issue of our era and the transition to a low-carbon economy will affect all businesses, irrespective of their size, sector or geographic location. Therefore, no company’s revenues are immune and the assessment of such risks must be considered within any effective investment approach, particularly one like LTL’s that seeks to protect its clients’ capital for decades to come.
As a relatively small company with a single office location and less than 30 employees, LTL’s climate exposure comes predominantly from the investment portfolios that it manages on behalf of its clients. LTL recognises the systemic risk posed by climate change and the potential financial impacts associated with a transition to a low-carbon economy.
To help address this, LTL became a signatory of the Net Zero Asset Managers (NZAM) initiative in
emissions by 2050 or sooner. In line with this ambition, LTL published a 2030 interim target which was approved by the IIGCC. LTL selected to use the Paris Aligned Investment Initiative Net Zero Investment Framework (NZIF) target setting approach. Of the four specific targets recommended by NZIF, LTL believed it most appropriate to adopt a portfolio coverage target, given the strategic nature of its investment approach and the well below average carbon footprints of its portfolios. LTL has targeted 55% of its asset-weighted committed 1 assets to be considered Aligned 2 by 2030, as set out by the PAII Net Zero Investment Framework. This represents a circa 50% improvement from its baseline of 36% of assets being Aligned as of 2022, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement in the IPCC special report on global warming of 1.5°C.
LTL also supports the recommendations of the
Further, using Morningstar’s carbon metrics calculations, LTL notes that LTIT’s listed equity holdings have a significantly lower weighted average carbon intensity than its comparable benchmark.
1 Committed assets are currently 94% of LTL’s total AUM. The assets that were excluded relate to segregated clients that either declined to have their assets included at this time or did not respond by the required deadline. There is scope to increase the level of committed assets over time.
2 Aligned status, as set out by the PAII Net Zero Framework, has prescribed requirements of the portfolio companies, including; 1) Setting short and medium term emission reduction targets, 2) Monitoring emission intensity performance relative to those targets, and 3) Disclosure of scope 1, 2 and 3 emissions. For higher impact sectors, further criteria are required to be categorised as Aligned.
Stewardship
Engagement
Engaging with and monitoring investee companies on matters relating to stewardship has always been an essential element of LTL’s investment strategy. Its long-term approach generally leads it to be supportive of company management. However, where LTL disagrees with a company’s actions, it will try to influence management on specific matters or policies if LTL believe it is in the best interests of its clients. Constructive dialogue has more often than not resulted in satisfactory outcomes, thus limiting the need for escalation. However, where this is not the case, LTL will consider escalating its engagement and stewardship activities.
During the year, on a look-through basis (i.e. including positions held by LTL managed funds owned by the Company), LTL engaged with 31 companies held within the Company’s portfolio on a wide range of environmental, societal and governance related issues, as detailed in the chart below. Moreover, to ensure that the 2030 net zero interim target remains achievable, LTL continues to engage proactively with the management of companies it holds across its portfolios, the aim being to understand each company’s individual goals and, where appropriate, to provide the team’s thoughts on their road maps, with the overall ambition of reaching an absolute reduction in global carbon emissions. Using the data gathered annually, LTL has been able to identify which portfolio companies should be prioritised for engagement on their progress.
Key Engagement Case Studies
Company name: Unilever
Sector: Consumer Franchises
Engagement topics: Capital Allocation and Strategy
Date of engagements:
Engagement format: Calls
Reason for Engagement: Ongoing engagement regarding Unilever’s capital allocation and strategy.
During Q3 2024, following news that Unilever will spin off its ice cream business, we renewed our engagement with CFO,
Next steps: The engagement regarding Unilever’s capital allocation and strategy has been productive and insightful. But as with all our companies we will continue to monitor progress closely and engage with management on aspects of their corporate strategy on an ongoing basis.
Company name: Mondelez
Sector: Consumer Franchises
Engagement topic: Human Rights / Modern Slavery
Date of engagement:
Engagement format: Call
Reason for Engagement: Discussion of two shareholder resolutions
We have engaged regularly with Mondelez on the matter of Modern Slavery, as well as shareholder pressure to create an Independent Chair role.
On the latter, in general we have a preference for the Chair to be independent and hence we abstained on this resolution. Our reticence to vote against, reflects on our understanding that management view the existing set-up as appropriate for their business, a position with which we have sympathy.
With regards to modern slavery, our engagement during the second quarter also centred on a shareholder proposal requesting that the company adopt and report on targets to eliminate child labour in its cocoa supply chain by 2025. Having sought further clarification from Mondelez, as per last year, we voted against this resolution on the basis that the company has provided significant disclosure in this regard and our belief that the target is unrealistic.
Next steps: Engagement complete.
Company name: Sage
Sector: Information Technology
Engagement topic: Modern Slavery
Date of engagement:
June and
Engagement format: In person and call
Reason for Engagement: Modern Slavery score
We engaged with the management of Sage during
Following publication of CCLA’s 2024 Modern Slavery
Next steps: This engagement is ongoing.
Company name: Burberry
Sector: Consumer Discretionary
Engagement topic: Strategy, Personnel
Date of engagement:
July and
Engagement format: Calls
Reason for Engagement: To understand the future direction of the company
2024 was a challenging year for Burberry. To recap, the company has parted with its chief executive,
In response to what we and Burberry hope will be a period of temporary constraint, the company has embarked on an aggressive cost-saving plan and has pre-emptively chosen to pass the dividend, saving itself c.£220m pa. The CFO speaks confidently about containing leverage at c2.0x EBITDA this year and has raised £300m of liquidity via a bond issue, dated 2030 and with a far from “junk bond” coupon of 5.75% - signalling that bond investors aren’t anticipating a liquidity crisis. Current, much reduced, profit forecasts suggest Burberry’s interest cover will be 4x for 2024/5 assuming this year is the low point in its fortunes. We would of course prefer Burberry to have zero debt, but a closer inspection of the 2.0x figure reveals that its net debt figure includes lease liabilities – which in fact make up the bulk of the total debt, with financial leverage a minimal amount. We have done a lot of work on this and believe that lease liabilities pose a smaller threat than ‘true’ financial leverage: Burberry’s leases are generally of good quality, meaning that in most cases finding a replacement tenant and exiting the lease would be possible, if such a thing needed to happen. That said, we continue to monitor debt levels closely.
The question now is whether the brand has been irreversibly tarnished by the recent mismanagement. We don’t think so. We retain the view that we have invested our clients’ capital in an enduring and unique brand, that has generated attractive financial returns in the past and can do so again. Accordingly we have not sold. Instead, since early 2024 we have worked to protect the value of the investment by engaging with the board and its corporate advisers. We encouraged the early passing of the dividend, in order to protect the balance sheet and, we hope, avoid a dilutive new capital raise. We have also forcibly pointed out that there has been a lack of substantive luxury experience amongst Burberry’s non-executive directors and perhaps missteps might have been avoided with such luxury experience on the board. We believe there will be further changes to the membership of the board.
Our Q3 2024 meeting with new CEO
Next steps: This engagement is ongoing.
Proxy Voting
The primary voting policy of LTL is to protect or enhance the economic value of its investments on behalf of its clients. LTL has appointed Glass Lewis to aid the administration of proxy voting and provide additional support in this area. However, the Manager maintains decision making responsibility based on its detailed knowledge of the investee companies. It is LTL’s policy to exercise all voting rights which have been delegated to LTL by its clients.
Voting record:
Management Shareholder Total
Proposals Proposals Proposals
With Management 237 5 242
Against Management 2 0 2
Abstain 1 1 2
Totals 240 6 246
Source: Glass Lewis.
Votes against management and abstentions have typically been in the low single-digit range. The main reason for this is that LTL’s long-term approach to investment generally leads it to be supportive of company management and, where required, LTL will try to influence management through its engagement activities. Given LTL often builds up large, long-term stakes in the businesses in which it invests, LTL finds that management is open to (and very often encourages) engagement with LTL. Furthermore, it is LTL’s aim to be invested in ‘exceptional’ companies with strong corporate governance and hence it ought to be rare that LTL finds itself in a position where it is voting against management.
In the majority of cases where LTL has voted against management it has been on matters relating to remuneration. Where LTL does not believe that a company’s compensation policy is aligned with the long-term best interests of the shareholders it will write to management to inform them of LTL’s intention to vote against such policies.
Integrity and Business Ethics
The Company is committed to carrying out business in an honest and fair manner. The Board has adopted a zero tolerance approach to instances of bribery and corruption. Accordingly, it expressly prohibits any Director or associated persons when acting on behalf of the Company from accepting, soliciting, paying, offering or promising to pay or authorise any payment, public or private, in the
The Board applies the same standards to its service providers in their activities for the Company. A copy of the Company’s Anti Bribery and Corruption Policy can be found in the Board and Policies section of the Company's website. The policy is reviewed annually by the Audit Committee.
In response to the implementation of the Criminal Finances Act 2017, the Board adopted a zero - tolerance approach to the criminal facilitation of tax evasion. A copy of the Company’s policy on preventing the facilitation of tax evasion can be found in the Board and Policies section of the Company's website. The policy is reviewed annually by the Audit Committee.
The Company’s culture is driven by its values of integrity, knowledge and frank and courteous conduct. It focusses on achieving returns for shareholders in line with the Company’s Investment Objective, as set out on page 3 of the Annual Report. In carrying out its activities, the Company aims to conduct itself responsibly, ethically and fairly, including in relation to social and human rights issues. As an investment company with limited internal resource, the Company has little direct impact on the environment. The Company believes that high standards of ESG make good business sense and have the potential to protect and enhance investment returns. Consequently, the Manager’s investment criteria ensure that ESG and ethical issues are taken into account and best practice is encouraged. The Board's expectations are that its principal service providers have appropriate governance policies in place.
By order of the Board
Chairman
Extract of the Directors Report
Share Split
The price of the Company’s existing Ordinary Shares of 75p each (“Existing Ordinary Shares”) since its inception, has experienced significant growth, reflecting the Company’s investment strategy and market conditions. As at
Following the Share Split, each shareholder will hold 100 New Ordinary Shares for each Existing Ordinary Share they held immediately prior to the Share Split. Whilst the Share Split will increase the number of Ordinary Shares the Company has in issue, upon the Share Split becoming effective the net asset value, share price and dividend per share can be expected to become one-hundredth of their respective values immediately preceding the Share Split. A holding of New Ordinary Shares following the Share Split will represent the same proportion of the issued Ordinary Share capital of the Company as the corresponding holding of Existing Ordinary Shares immediately prior to the Share Split. The Share Split will not affect, therefore, the overall value of a shareholder’s holding in the Company. By way of example, taking the net asset value as at
The New Ordinary Shares will rank pari passu with each other and will carry the same rights and be subject to the same restrictions as the Existing Ordinary Shares, including the same rights to participate in dividends paid by the Company. Communication preferences and mandates and other instructions for the payment of dividends in paper form or via CREST will, unless and until revised, continue to apply to the New Ordinary Shares.
The following comments do not constitute tax advice. They are intended only as a general guide based on
The Share Split should not itself give rise to any liability to
The Share Split requires the approval of shareholders and, accordingly, resolution 13 seeks such approval. The Share Split is conditional on the New Ordinary Shares being admitted to the Official List of the
The New Ordinary Shares may be held in certificated or uncertificated form. Following the Share Split becoming effective, share certificates in respect of the Existing Ordinary Shares will cease to be valid and will be cancelled. New certificates in respect of the New Ordinary Shares will be issued to those shareholders who hold their Existing Ordinary Shares in certificated form and are expected to be dispatched by
Articles of Association removal of restriction on authorised share capital
The Existing Articles were adopted in
In preparing for the Share Split, the Board is proposing to delete Article 5 of the Existing Articles. This will involve the removal of the concept of an authorised share capital of the Company as well as the reference to the Company’s share capital of £150,000 being divided into 200,000 Ordinary Shares of 75p each. This amendment is required as following the Share Split the ordinary shares will have a nominal value of 0.75p (not 75p). In addition, the Directors believe that it is in the best interest of the Company and the Shareholders for the concept of authorised share capital to be removed in the Amended Articles as this would afford the Company greater flexibility.
This summary is intended only to highlight the principal amendments which the Directors consider are likely to be of interest to Shareholders. It is not intended to be exhaustive and should not be relied upon to identify all amendments or issues which may be of interest to Shareholders. Therefore, this summary is not a substitute for Shareholders’ reviewing the full terms of the Amended Articles for themselves.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law, the Directors are required to prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the
Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent; and
• state whether they have been prepared in accordance with applicable United Kingdom Accounting Standards, comprising FRS 102, subject to any material departures disclosed and explained in the Financial Statements;
• prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
• prepare a Directors’ Report, a Strategic Report and Directors’ Remuneration Report which comply with the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to ensure that the Financial Statements comply with the Companies Act 2006.
The Directors are also responsible for safeguarding the assets of the Company and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the Annual Report and Financial Statements, taken as a whole, are fair, balanced, and understandable and provide the information necessary for Shareholders to assess the Company's position, performance, business model and strategy.
Website Publication
The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website.
Financial statements are published on the Company’s website in accordance with legislation in the
The Directors’ responsibility also extends to the ongoing integrity of the Financial Statements contained therein.
Responsibility Statement of the Directors in respect of the Annual Report
Each of the Directors, whose names and functions are listed in the ‘Board of Directors’ section on pages 33 and 34 of the Annual Report, confirms that, to the best of their knowledge:
•
the Company's Financial Statements, have been prepared in accordance with United Kingdom Accounting Standards and give a true and fair view of the assets, liabilities, financial position of the Company for the year ended
• the Annual Report includes a review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
The Directors consider the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy.
On behalf of the Board
Chairman
Note to those who access this document by electronic means:
The Annual Report for the year ended
Financial Statements
Income Statement for the year ended
2025 2024
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Losses on investments 10 – (13,121) (13,121) – (6,014) (6,014)
held at fair value
Exchange losses on – (5) (5) – (4) (4)
currency balances
Income 2 10,169 – 10,169 12,005 – 12,005
Investment management 3 (819) – (819) (976) – (976)
fees
Other expenses 4 (695) – (695) (715) (1) (716)
Net return/(loss) 8,655 (13,126) (4,471) 10,314 (6,019) 4,295
before taxation
Taxation 7 (88) – (88) (100) – (100)
Return/(loss) after
taxation for the 8,567 (13,126) (4,559) 10,214 (6,019) 4,195
financial year
Return/(loss) per 9 £42.83 £(65.63) £(22.80) £51.07 £(30.10) £20.97
Ordinary Share
All revenue and capital items in the above statement derive from continuing operations.
The total columns of this statement represent the profit and loss account of the Company. The revenue and capital return columns are supplementary to this and are prepared under the guidance published by the
The Company does not have any other recognised gains or losses. The net loss for the year disclosed above represents the Company’s total comprehensive income.
No operations were acquired or discontinued during the year.
The notes on pages 77 to 92 of the Annual Report form part of these Financial Statements.
Statement of Changes in Equity for the year ended
Share Special Capital Revenue
capital reserve reserve reserve Total
2025 2025 2025 2025 2025
£’000 £’000 £’000 £’000 £’000
At 1 April 2024 150 19,850 161,981 23,304 205,285
(Loss)/return for the financial year – – (13,126) 8,567 (4,559)
Dividends paid for the year ended 31 – – – (10,300) (10,300)
March 2024 (see note 8)
At 31 March 2025 150 19,850 148,855 21,571 190,426
For the year ended
Share Special Capital Revenue
capital reserve reserve reserve Total
2024 2024 2024 2024 2024
£’000 £’000 £’000 £’000 £’000
At 1 April 2023 150 19,850 168,000 23,390 211,930
(Loss)/return for the financial year – – (6,019) 10,214 4,195
Dividends paid for the year ended
31 March 2023 (see note 8) – – – (10,300) (10,300)
At 31 March 2024 150 19,850 161,981 23,304 205,285
The notes on pages 77 to 92 of the Annual Report form part of these Financial Statements.
Statement of Financial Position at
2025 2024
Notes £’000 £’000 £’000 £’000
Fixed assets
Investments held at fair value
through profit or loss 10 185,636 199,082
Current assets
Other receivables 11 417 478
Cash at bank 4,582 6,028
4,999 6,506
Creditors: amounts falling due within one
year
Other payables 12 (209) (303)
Net current assets 4,790 6,203
Net assets 190,426 205,285
Called up share capital 13 150 150
Special reserve 14 19,850 19,850
Capital reserve 14 148,855 161,981
Revenue reserve 21,571 23,304
Equity Shareholders' funds 190,426 205,285
Net asset value per Ordinary Share 15 £952.13 £1,026.43
The Financial Statements on pages 73 to 92 of the Annual Report were approved by the Board on
Chairman
Registered in
The notes on pages 77 to 92 of the Annual Report form part of these Financial Statements.
Statement of Cash Flows for the year ended
2025 2024
Notes £’000 £’000
Operating Activities
Net cash inflow from operating activities 16 8,534 10,294
Investing activities
Purchase of investments held at fair value (5,134) (2,845)
Sale of investments held at fair value 5,459 873
Net cash inflow/(outflow) from investing activities 325 (1,972)
Financing activities
Equity dividends paid 8 (10,300) (10,300)
Net cash outflow from financing activities (10,300) (10,300)
Decrease in cash and cash equivalents (1,441) (1,978)
Cash and cash equivalents at beginning of year* 6,028 8,010
Loss on exchange movements* (5) (4)
Cash and cash equivalents at end of year* 4,582 6,028
Cash flows from operating activities includes dividend income received of £9,841,000 (2024: £11,809,000) and deposit interest of £138,000 (2024: £190,000).
* Comprises solely cash held at bank.
The notes on pages 77 to 92 of the Annual Report form part of these Financial Statements.
Notes to the Financial Statements
1 Accounting policies
A summary of the principal accounting policies, all of which have been applied consistently throughout the year, is set out below:
(a) Basis of accounting
The Financial Statements of the Company have been prepared under the historical cost convention modified to include the revaluation of fixed assets in accordance with
Going concern
The Financial Statements have been prepared on the going concern basis.
The Directors have a reasonable expectation, after considering a schedule of the Company’s current financial resources and liabilities, that the Company has adequate resources to continue in existence for at least 12 months from the approval of the Financial Statements; and that it is appropriate to prepare the Financial Statements on a going concern basis.
The Company does not have a fixed life.
As at
It is estimated that 64.1% of the investment portfolio, (93.7% of the portfolio, excluding the holding in LTL), could be liquidated within five business days based on 20% of the 90 days’ average trading volumes obtained from Bloomberg.
(b) Reporting currency
The Financial Statements are presented in Sterling which is the functional currency of the Company because it is the currency of the primary economic environment in which the Company operates.
(c) Dividends
Under Section 32 of FRS 102, final dividends should not be accrued in the Financial Statements unless they have been approved by shareholders before the balance sheet date.
Dividends payable to shareholders are recognised in the Statement of Changes in Equity when they have been approved by shareholders and have become a liability of the Company. Interim dividends are recognised in the Financial Statements in the period in which they are paid.
(d) Valuation of fixed asset investments
The Company’s investments are classified as held at fair value through profit or loss in accordance with Section 11 and 12 of FRS 102 and are managed and evaluated on a fair value basis in accordance with its investment strategy.
When a purchase or sale is made under a contract, the terms of which require delivery within the time frame of the relevant market, the investments concerned are recognised or derecognised on the trade date.
Listed investments are held through profit or loss and accordingly are valued at fair value, deemed to be bid or last market prices depending on the convention of the exchange on which they are listed. As the Company’s business is investing in financial assets with a view to profiting from their total return in the form of interest, dividends or increases in fair value quoted, investments are held through profit or loss on initial recognition at fair value. The Company manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about the Company is provided internally on this basis to the Board.
The unlisted investment in LTL is valued by the Directors at fair value using a valuation methodology adopted by the Board. The formula is monitored by the Board to ensure its ongoing appropriateness. At the most recent update in 2025 the Board sought external advice to verify its approach. Please refer to note 1(j) for further information.
The investment in LTL (representing 23.6% of the Manager) is held as part of the investment portfolio. Accordingly, the shares are accounted for and disclosed in the same way as other investments in the portfolio. The valuation of the investment (see note 17) on pages 87 to 91 of the Annual Report is calculated at the end of each month on the basis of fair value as determined by the Directors of the Company. The valuation process in effect from
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:
-- Level 1 – The unadjusted quoted price in an active market for identical
assets or liabilities that the entity can access at the measurement
date.
-- Level 2 – Inputs other than quoted prices included within Level 1 that
are observable (i.e. developed using market data) for the asset or
liability, either directly or indirectly.
-- Level 3 – Inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
(e) Income
Dividends are credited to the revenue column of the Income Statement on an ex-dividend basis. Where an ex-dividend date is not available, dividends are recognised when the Company’s right to receive payment is established. The fixed return on a debt security is recognised on a time apportionment basis so as to reflect the effective interest rate on the debt security. Bank and deposit interest is accounted for on an accruals basis.
(f) Expenses
All expenses are accounted for on an accruals basis. Finance costs are accounted for on an accruals basis using the effective interest rate method. Expenses are charged through the revenue column of the Income Statement except as follows:
-- expenses which are incidental to the acquisition or disposal of an
investment are charged to the capital column of the Income Statement;
-- expenses are charged to the realised capital reserve, via the capital
column of the Income Statement, where a connection with the maintenance
or enhancement of the value of the investments can be demonstrated;
-- the non-allocation approach has been taken and charged 100% of the
management fees to revenue; and
-- performance fees payable to the Manager are charged 100% to capital.
(g) Taxation
Deferred taxation is provided on all differences which have originated but not reversed by the balance sheet date, calculated at the rate at which it is anticipated the timing differences will reverse. Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be taxable profits in the future against which the deferred tax asset can be recovered.
In line with recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented in the capital column of the Income Statement is the marginal basis. Under this basis if taxable income is capable of being offset entirely by expenses presented in the revenue column of the Income Statement then no tax relief is transferred to the capital column.
(h) Foreign currency
Transactions denominated in foreign currencies are recorded in the local currency at the actual exchange rates as at the date of the transaction. Assets and liabilities denominated in foreign currencies at the year end are reported at the rate of exchange prevailing at the year end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the capital or revenue column of the Income Statement depending on whether the gain or loss is of a capital or revenue nature.
(i) Capital reserve
The following are taken to this reserve:
-- gains or losses on the disposal of investments;
-- exchange differences of a capital nature;
-- expenses, together with the related taxation effect, allocated to this
reserve in accordance with the above policies; and
-- investment holding gains or losses, being the increase or decrease in
the valuation of investments held at the year end.
Revenue reserve
The revenue reserve reflects all income and expenditure which are recognised in the revenue column of the income statement and may be distributable by way of dividend.
Special reserve
The special reserve arose following Court approval in
In accordance with the Company’s Articles of Association, the capital reserve and special reserve may not be distributed by way of a dividend but may be utilised for the purposes of share buybacks. The Company may only distribute by way of dividend accumulated revenue profits within the revenue reserve.
(j) Significant judgments and estimates
The key significant estimate to report is the valuation of the investment in LTL where material judgments are made. Please refer to notes 1(d) and 17 for details of how this holding is valued.
Other than this, in the course of preparing the Financial Statements, no material judgments have been made in the process of applying the Company’s accounting policies, except those that involve estimations.
2 Income
2025 2024
£’000 £’000
Income from investments
Overseas dividends 881 862
UK dividends
– Lindsell Train Limited 7,717 9,410
– Other UK dividends 1,433 1,543
10,031 11,815
Other income
Deposit Interest 138 190
138 190
Total income comprises:
Dividends 10,031 11,815
Interest 138 190
10,169 12,005
3 Management fees
2025 2024
£’000 £’000
Investment management fee 957 1,099
Rebate of investment management fee (see below) (138) (123)
Total management fee 819 976
In accordance with the Investment Management Agreement dated
A performance fee is payable at the rate of 10 per cent of the value of any positive relative performance versus the Benchmark (the MSCI World Index Total Return (Sterling adjusted)), in a financial year. Relative performance is measured by taking the lower of the NAV or Average Market Price, taking into account dividends, at the end of each financial year and comparing the percentage annual change with the total return of the Benchmark. A performance fee will only be paid out if the annual change is both above the Benchmark and is a positive figure. Relative performance will be carried forward in years where the Manager is not eligible for a performance fee based on these two criteria. The Company has twelve month performance periods, ending on 31 March in each year. The performance fee is payable in arrears in respect of each performance period.
The performance fee payable to the Manager for the year to
For the avoidance of double charging management fees, the Manager has agreed to rebate any periodic management fee that it receives from the Company by the amount of fees receivable by it from LTL managed fund products and other fund products held by the Company where LTL is the Manager. The amounts rebated on the Investment Management fee are shown above, of which £121,781 (2024: £107,585) relates to the Company’s investment in
4 Other expenses
2025 2024
£’000 £’000
Directors’ emoluments 166 178
Company Secretarial and Administration fee 186 192
Auditor’s remuneration*† 60 55
Tax compliance fee 4 4
Safe custody fees 20 19
Printing fees 36 36
Registrars’ fees 35 32
Listing fees 14 13
Legal fees 11 7
Employer’s National Insurance 12 11
Directors’ liability insurance 13 13
Key man insurance 20 45
Director recruitment costs 10 25
Sundry 90 76
VAT irrecoverable 18 9
695 715
Capital charges – 1
695 716
* Excluding VAT.
† Remuneration for the audit of the Financial Statements of the Company.
5 Directors’ emoluments
These are reflected in the table below:
2025 2024
£’000 £’000
Directors’ fees 166 178
Since
There were no pension contributions paid or payable.
6 Disclosure of interests
As at
LTL is also the Portfolio Manager of Finsbury Growth & Income Trust PLC in which the Company has an investment of 420,000 shares with a fair value of £3,713,000 (2024: £3,612,000) at a cost of £759,000 (2024: £759,000) (see page 10 of the Annual Report).
LTL’s appointment as Manager to the Company is subject to termination by either party on twelve months’ notice.
7 Taxation
The tax charge on the loss on ordinary activities for the year was as follows:
2025 2024
Revenue Capital Total RevenueCapital Total
£’000 £’000 £’000 £’000 £’000 £’000
UK corporation tax – – – – – –
Overseas tax 104 – 104 114 – 114
Overseas tax recoverable (16) – (16) (14) – (14)
Tax charge per accounts 88 – 88 100 – 100
The current taxation charge for the year is different from the standard rate of corporation tax in the
2025 2024
£’000 £’000
Net (loss)/gain on ordinary activities before taxation (4,471) 4,295
Theoretical tax at UK Corporation tax rate of 25% (2024: 25%) (1,118) 1,074
Effects of:
– UK dividends which are not taxable (2,287) (2,738)
– Overseas dividends which are not taxable (220) (215)
– Non-taxable loss on investments 3,280 1,504
– Current year excess expenses 345 375
– Overseas tax suffered 104 114
– Overseas tax recoverable (16) (14)
Actual current tax charge 88 100
As an
Factors that may affect future tax charges
As at
8 Dividends paid and payable
2025 2024
£’000 £’000
Final dividend for the year ended 31 March 2024 of £51.50 per 10,300 10,300
Ordinary share (2023: £51.50 per Ordinary Share)
The total dividend forming the basis of Sections 1158 and 1159 of the Corporation Tax Act 2010 payable in respect of the financial year is set out below:
2025 2024
£’000 £’000
FinaI dividend for the year ended 31 March 2025 of £42.00 per 8,400 10,300
Ordinary share (2024: £51.50 per Ordinary Share)
9 Return/(loss) per Ordinary Share
2025 2024
Total (loss)/return per Ordinary share
Total (loss)/return £(4,559,000) £4,195,000
Weighted average number of Ordinary Shares in issue 200,000 200,000
during the year
Total (loss)/return per Ordinary share £(22.80) £20.97
The total (loss)/return per Ordinary share shown above can be further analysed between revenue and capital, as below:
2025 2024
Revenue return per Ordinary Share
Revenue return £8,567,000 £10,214,000
Weighted average number of Ordinary Shares in issue 200,000 200,000
during the year
Revenue return per Ordinary Share £42.83 £51.07
Capital loss per Ordinary Share
Total return £(13,126,000) £(6,019,000)
Weighted average number of Ordinary Shares in issue 200,000 200,000
during the year
Capital loss per Ordinary Share £(65.63) £(30.10)
10 Investments held at fair value through profit or loss
2025 2024
£’000 £’000
Investments listed on a recognised investment exchange 116,070 110,456
Unlisted investment and Fund 69,566 88,626
Valuation at year end 185,636 199,082
Opening book cost 45,428 42,591
Opening investment holding gains 153,654 160,537
Opening Fair Value 199,082 203,128
Movements in the year:
Purchases at cost 5,134 2,845
Sales – proceeds (5,459) (877)
Losses on investments (13,121) (6,014)
Closing Fair Value 185,636 199,082
Closing book cost 48,943 45,428
Closing investment holding gains 136,693 153,654
Closing Fair Value 185,636 199,082
Realised gains on investments 3,839 869
Decrease in investment holding gains for the year (16,960) (6,883)
Losses on investments held at fair value (13,121) (6,014)
The Company received proceeds of £5,459,000 (2024: £877,000) from investments sold in the year. The book cost of these investments when they were purchased was £1,620,000 (2024: £7,729). 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.
Investment transaction costs on purchases and sales of investments during the year to
Significant holdings
Included in the above are the following investments in which the Company has an interest exceeding 10% of the nominal value of the shares of that class in the investee company as at 31
Investments Country of registration Class of % of
or incorporation capital class held
Lindsell Train England Ordinary Shares of £100 23.6%
Limited*
* As at
See note relating to the 2025 and 2024 results under the tables in Appendix 1 on pages 98 and 99 of the Annual Report.
LTL is a related undertaking of the Company. LTL’s registered office address is 66
LTL has been accounted for as an investment in accordance with the accounting policy in note 1(d).
The Company has arrangements in place with the Manager to avoid double charging of fees and expenses on investments made in other LTL managed funds (see note 3).
11 Other receivables
2025 2024
£’000 £’000
Amounts due from brokers – 5
VAT recoverable 8 27
Prepayments and accrued income 409 446
417 478
12 Other payables
2025 2024
£’000 £’000
Accruals and deferred income 209 303
13 Share capital
2025 2024
No. of shares No. of shares
000’s £’000 000’s £’000
Allotted and fully paid:
Ordinary Shares of 75p each 200 150 200 150
There has been no change in the capital structure during the year to
14 Reserves
Capital reserve
The capital reserve includes investment holding gains of £136,693,000 (2024: £153,654,000).
Revenue reserve
The revenue reserve reflects all income and expenditure which are recognised in the revenue column of the income statement. This reserve is distributable by way of dividend.
Special reserve
The special reserve arose following Court approval in
In accordance with the Company’s Articles of Association the capital reserve and special reserve may not be distributed by way of a dividend but may be utilised for the purposes of share buybacks. The Company may only distribute by way of dividend accumulated revenue profits within the revenue reserve.
The
15 Net Asset Value per share
The Net Asset Value per Ordinary Share and the Net Asset Value at the year end calculated in accordance with the Articles of Association were as follows:
Net Asset Value Net Asset Value per share attributable attributable 2025 2024 2025 2024 £ £ £’000 £’000 952.13 1,026.43 190,426 205,285
The movements during the year of the assets attributable to the Ordinary Shares were as follows:
2025 2024
Ordinary Ordinary
Shares Shares
£’000 £’000
Total Net Assets attributable at beginning of year 205,285 211,390
Total recognised (loss)/profit for the year (4,559) 4,195
Dividends paid during the year (10,300) (10,300)
Total Net Assets attributable at the end of year 190,426 205,285
The Net Asset Value per Ordinary Share is based on net assets of £190,426,000 (2024: £205,285,000) and on 200,000 Ordinary Shares (2024: 200,000), being the number of Ordinary Shares in issue at the year end.
16 Statement of Cash Flows
(a) Reconciliation of operating return to net cash inflow from operating activities
2025 2024
£’000 £’000
Net (loss)/return before finance costs and taxation (4,471) 4,295
Losses on investments held at fair value 13,121 6,014
Loss on exchange movements 5 4
Decrease in other receivables 19 32
Decrease/(increase) in accrued income 41 (15)
(Decrease)/increase in other payables (93) 64
Taxation on investment income (88) (100)
Net cash inflow from operating activities 8,534 10,294
(b) Analysis of cash flows
At At
1 April Exchange 31 March
2024 Cash Flow Movement 2025
£’000 £’000 £’000 £’000
Cash at bank 6,028 (1,441) (5) 4,582
Total 6,028 (1,441) (5) 4,582
At At
1 April Exchange 31 March
2023 Cash Flow Movement 2024
£’000 £’000 £’000 £’000
Cash at bank 8,010 (1,978) (4) 6,028
Total 8,010 (1,978) (4) 6,028
17 Financial instruments and capital disclosures
Risk management policies and procedures:
The investment objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital. In pursuit of this objective, the Company may be exposed to various forms of risk, as described below.
The Board sets out its principal risks on pages 16 to 20 of the Annual Report and its investment policy including its policy on gearing (bank borrowing), diversification and dividends on page 3 of the Annual Report.
The Board and its Manager consider and review the number of risks inherent with managing the Company’s assets which are detailed below:
Market risk
The Company’s portfolio is exposed to fluctuations in market prices in the regions in which it invests. Market-wide uncertainties which have caused increased volatility these include the continued uncertainty created by the increase in global inflation and rising interest rates, international trade tariffs, together with the consequences of the wars in
At
Market price risk comprises three elements – foreign currency risk, interest rate risk and other price risk.
Foreign currency risk
Foreign currency exposure as at
US$ Euro JPY Total
£’000 £’000 £’000 £’000
Short-term debtors 41 39 155 235
Foreign currency exposure on net monetary items 41 39 155 235
Investments (equities and funds) held at fair value 34,506* 11,481 21,464 47,492
Foreign currency exposure 34,547 11,520 21,619 47,727
* This includes the holding in
Foreign currency exposure as at
US$ Euro JPY Total
£’000 £’000 £’000 £’000
Short-term debtors 49 23 210 282
Foreign currency exposure on net monetary items 49 23 210 282
Investments held at fair value through
profit or loss that are equities 33,061* 12,492 17,574 63,127
Foreign currency exposure 33,110 12,515 17,784 63,409
* This includes the holding in
Over the year Sterling strengthened against the US Dollar by 2.18% (2024: strengthened by 2.2%), strengthened against the Euro by 2.15% (2024: strengthened by 2.9%) and strengthened against the Japanese Yen by 0.96% (2024: strengthened by 16.6%).
A 5.0% decline or rise of Sterling against foreign currency denominated (i.e. non Sterling) assets held at the year end would have increased/decreased the Net Asset Value by £2,386,000 or 1.25% of Net Asset Value (2024: £3,170,000 or 1.5% of Net Asset Value).
Interest rate risk
There is no direct exposure to interest rate risk.
Other price risk
Other price risk may affect the value of the quoted investments.
If the fair value of the Company’s investments at the Statement of Financial Position date increased or decreased by 10%, whilst all other variables remained constant, the capital return and net assets attributable to shareholders as at
Liquidity risk
Liquidity risk is not considered significant under normal market conditions in relation to the Company’s investments which are listed on recognised stock exchanges and are, for the most part, readily realisable securities which can be easily sold to meet funding commitments if necessary. The Company’s unlisted investment in LTL is not readily realisable.
As at
Credit risk
Cash at bank and other debtors of the Company at the year end as shown on the Statement of Financial Position was £4,999,000 (2024: £6,506,000).
Counterparty risk
As cash placed at the Bank is deposited in its capacity as a banker not as a trustee, in line with usual banking practice, such cash is not held in accordance with the Financial Conduct Authority’s client money rules.
Fair values of financial assets and financial liabilities
The tables below set out fair value measurements of financial instruments as at the year end, by the level in the fair value hierarchy into which the fair value measurement is categorised.
Financial assets/liabilities at fair value through profit or loss
Level 1 Level 2 Level 3 Total
At 31 March 2025 £’000 £’000 £’000 £’000
Investments 116,069 19,959 49,608 185,636
116,069 19,959 49,608 185,636
Level 1 Level 2 Level 3 Total
At 31 March 2024 £’000 £’000 £’000 £’000
Investments 110,456 19,624 69,002 199,082
110,456 19,624 69,002 199,082
Note: Within the above tables, the entirety of level 1 comprises all the Company’s equity investments, level 2 represents the investment in
The valuation techniques used by the Company are explained on pages 5 to 7 of the Annal Report.
LTL Valuation Methodology
The current methodology was adopted and applied to monthly valuations of the Company from
The methodology has a single component based on a percentage of LTL’s funds under management (‘FUM’), with the percentage applied being reviewed monthly and adjusted to reflect the ongoing profitability of LTL. At the end of each month the ratio of LTL’s notional annualised net profits 1 to LTL’s FUM is calculated and, depending on its result, the percentage of FUM is adjusted according to the table below.
_____________________________________________________________________________ |Notional annualised net profits1/FUM (%)|Valuation of LTL – Percentage of FUM| |________________________________________|____________________________________| |0.15 – 0.16 |1.70% | |________________________________________|____________________________________| |0.16 – 0.17 |1.75% | |________________________________________|____________________________________| |0.17 – 0.18 |1.80% | |________________________________________|____________________________________| |0.18 – 0.19 |1.85% | |________________________________________|____________________________________| |0.19 – 0.20 |1.90% | |________________________________________|____________________________________| |0.20 – 0.21 |1.95% | |________________________________________|____________________________________| |0.21 – 0.22 |2.00% | |________________________________________|____________________________________|
1 LTL’s notional net profits are calculated by applying a fee rate (averaged over the last six months) to the most recent end-month FUM to produce annualised fee revenues excluding performance fees. Notional staff costs of 45% of revenues, annualised fixed costs and tax are deducted from revenues to then produce notional annualised net profits.
For instance at
The valuation of the investment in LTL continues to be reviewed at the end of each month by the Company’s Directors, with the methodology reviewed by the Board at its quarterly meetings.
LTL Valuation per share using differing valuation scenarios
The two tables below show the impact on the LTL valuation if:
(i)
in Table 1 a different % was applied to
(ii)
in Table 2 different Price / Earnings (‘P/E’) ratios were applied to LTL’s
Table 1 – varying the % of FUM
LTL FUM Valuation as at 31 March 2025 Valuation per share (£’000) % of FUM (£’000) (£) 11,345,602 0.50% 56,728 2,127.83 11,345,602 0.75% 85,092 3,191.75 11,345,602 1.00% 113,456 4,255.66 11,345,602 1.25% 141,820 5,319.58 11,345,602 1.50% 170,184 6,383.50 11,345,602 1.75% 198,548 7,447.41 11,345,602 1.85% 209,894 7,872.98 11,345,602 2.00% 226,912 8,511.33 11,345,602 2.25% 255,276 9,575.25 11,345,602 2.50% 283,640 10,639.16 11,345,602 2.75% 312,004 11,703.08 11,345,602 3.00% 340,368 12,766.99 11,345,602 3.25% 368,732 13,830.91
Table 2 – varying the P/E ratio
LTL notional net profits Valuation as at 31 March 2025 Valuation per share (£’000) P/E ratio (£’000) (£) 20,680 6.00 124,079 4,654.13 20,680 7.00 144,759 5,429.81 20,680 8.00 165,439 6,205.50 20,680 9.00 186,118 6,981.19 20,680 9.86 203,987 7,651.44 20,680 10.15 209,894 7,872.98 20,680 11.00 227,478 8,532.56 20,680 12.00 248,158 9,308.25 20,680 13.00 268,838 10,083.94 20,680 14.00 289,518 10,859.63 20,680 15.00 310,197 11,635.31
LTL Valuation per share using differing valuation scenarios 31 March 2024
The two tables below show the impact on the LTL valuation if:
(i)
in Table 1 a different % was applied to
(ii)
in Table 2 different Price / Earnings (‘P/E’) ratios were applied to LTL’s
Table 1 – varying the % of FUM
LTL FUM Valuation Valuation as at 31 March 2024 per share (£’000) % of FUM (£’000) (£) 15,180,432 1.00% 151,804 5,694.09 15,180,432 1.25% 189,755 7,117.61 15,180,432 1.50% 227,706 8,541.13 15,180,432 1.75% 265,658 9,964.65 15,180,432 1.90% 288,428 10,818.76 15,180,432 2.00% 303,609 11,388.17 15,180,432 2.25% 341,560 12,811.69 15,180,432 2.50% 379,511 14,235.21 15,180,432 2.75% 417,462 15,658.73
Table 2 – varying the P/E ratio
LTL notional net profits Valuation Valuation as at 31 March 2024 per share (£’000) P/E ratio (£’000) (£) 29,240 7.00 204,682 7,677.48 29,240 8.00 233,922 8,774.27 29,240 9.00 263,162 9,871.05 29,240 9.86 288,428 10,818.76 29,240 10.00 292,402 10,967.84 29,240 11.00 321,643 12,064.62 29,240 12.00 350,883 13,161.40
There were no transfers between levels for financial assets and financial liabilities during the year recorded at fair value as at
Level 3 Financial assets at fair value through profit or loss at 31 March
2025 2024
£’000 £’000
Opening fair value 69,002 85,220
Purchases at cost – –
Sales proceeds (662) (846)
Realised gains on investments 662 846
Decrease in investment holding gains for the year (19,394) (16,218)
Closing fair value 49,608 69,002
Capital management policies and procedures
The Company’s capital management objectives are:
• to ensure that it will be able to continue as a going concern; and
• to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital through an appropriate balance of equity capital and debt. The Directors have discretion to permit borrowings up to 50% of the Net Asset Value. However, the Directors have decided it is in the best interests of the Company not to use gearing.
The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis.
The Company’s objectives, policies and processes for managing capital are unchanged from last year.
The Company is subject to externally imposed capital requirements:
• as a public company, the Company has a minimum share capital of £50,000; and
•
in order to be able to pay dividends out of profits available for distribution, the Company has to be able to meet one of the two capital restriction tests imposed on investment companies by
These requirements are unchanged since last year and the Company has complied with them at all times.
At the next Annual General Meeting the Company intends to renew its authority to repurchase shares at a discount to Net Asset Value.
18 Guarantees, financial commitments and contingent liabilities
There were no financial commitments or contingent liabilities outstanding at the year end (2024: None).
19 Ongoing charges (APM)
2025 2024
£’000 % £’000 %
Total operating expenses 1,514 0.8 1,692 0.8
Total operating expenses are included after a management fee waiver of £138,000 (2024: £123,000) (see note 3).
The above total expense ratios are based on the average Shareholders’ Funds of £197,043,000 (2024: £203,091,000) calculated at the end of each week during the year.
It should be noted that administrative expenses borne by the LTL managed funds are excluded from the above.
See Glossary on page 113 of the Annual Report for other cost disclosures.
20 Related party disclosures
LTL acts as Investment Manager of the Company. The amounts paid to the Investment Manager are disclosed in note 3 and further details of the relationship between the Company and the Investment Manager are set out in note 6. Full details of Directors’ interests are set out on page 54 of the Annual Report.
On
21 Subsequent events
There are no significant events that have occurred after the end of the reporting period to the date of this report which require disclosure.
Appendices (unaudited)
DISCLAIMER
The information contained in these Appendices has not been audited by the Auditor and does not form part of the financial statements. The appendices are for information purposes and should not be regarded as any offer or solicitation of an offer to buy or sell shares in the Company.
Appendix 1 Annual Review of
Background
LTL was established in 2000 by
People
LTL’s board of directors consisted of the two founders
LTL’s executive staff (27) increased by two from the year prior. All staff are based in the
Business
LTL’s strategy is to build excellent long-term performance records for its funds in a way that is consistent with its investment principles and that meet the aims of its clients. Long-term performance is detailed below. Success in achieving satisfactory investment performance should allow the company to expand its FUM in its four key product areas:
To achieve this growth in a manageable way, LTL looks to direct new business flows into LT badged pooled funds and to limit the number of separately managed accounts. The open-ended pooled funds represented 60% of FUM at end of January, down from 62% the year before. The fall resulted from a greater proportion of net outflows emanating from open-ended pooled products. Additionally, LTL managed 11 separate client relationships, five fewer than a year ago. The largest pooled fund (the
In the year to
All four strategies generated positive absolute returns over the twelve months, however each underperformed relative to their corresponding benchmarks. LTL’s process is simple and remains the same as it always has been, with LTL seeking to find long-lasting franchises with deep moats and the ability to reinvest at high rates of return for extended periods of time, and then hold onto them for the long term. Recognising the concentrated nature of its portfolios, and with very low annual turnover, this inevitably means that at any given time there will be a vast number of names that LTL do not own, amongst which there are bound to be some exceptional performers. The unusual feature is that the influence of some of these ‘un-owned’ names have continued to reach new extremes, and their omission is therefore felt more keenly.
To illustrate this point, LTL conducted an analysis of the decomposition of the return drivers of its Global Equity strategy and its benchmark, the MSCI World Index. Over the past three years the strategy has experienced a headwind from valuation multiple (P/E) contraction, while the Index has benefitted from valuation multiple expansion. Encouragingly the overall operating performance of the companies within the strategy, measured by earnings per share growth, has remained consistent with expectations and better than that of the Index, and yet the impact of the internal compounding has been tempered by the opposing comparative valuation compression.
However, this current phenomenon has not changed how LTL invests. It remains focused on optimising the bottom-up credentials of its highly concentrated, idiosyncratic portfolios, and LTL do not believe that paying any extra attention to the index will result in a higher likelihood of outperformance (if anything, one might expect the opposite).
Reflecting on the long term, LTL’s investment approach has shown it can generate excess returns, as shown in the table below, though given the high active share of its strategies, there will inevitably be periods of strong underperformance and outperformance.
To 31 January 2025 Relative Return Inception date Benchmark UK Equity Fund (GBP) +3.6% p.a. July 2006 FTSE All Share Global Equity Fund (GBP) +0.8% p.a. March 2011MSCI World Japanese Equity Fund (Yen) -0.2% p.a. January 2004 TOPIX North American Equity Fund -6.2% p.a. April 2020 MSCI North (GBP) America
Returns based on NAV. WS Lindsell Train
The Marketing and Client Services team is in contact with institutional clients both directly and through investment consultants, primarily in the
Financials
In the year to
LTL intends to distribute to shareholders dividends equivalent to 80% of its net profits in respect of each accounting year-end, subject to retaining sufficient working, fixed and regulatory capital to enable it to continue its business in a prudent manner. Total dividends paid in the year to 31
At
The Future
LTL believes it has plenty of headroom to grow its FUM, with a continued focus on its stable of pooled funds. LTL’s investment approach is applied uniformly across all its products and remains differentiated and appealing to a wide range of clients. A crucial part of that appeal is the ability for LTL to demonstrate investment results that meet clients’ objectives. Over most of LTL’s history this has been achieved, but recently the investment approach has faced several difficult years. Most clients will tolerate short periods of underperformance, especially in a strategy that is so concentrated and committed to its constituent companies. However, it is not surprising, following five years of cumulative underperformance, that the company is seeing net outflows as clients are attracted to other investment approaches that may have exhibited better short-term investment results.
LTL is confident that by remaining committed to its differentiated investment approach that targets companies earning higher returns on capital than average, and with the support of a stable and dedicated team, and a still competitive longer-term performance track record, it can stay positive about its future. But it is fully aware that there are risks ahead which could have a material impact on the value of LTL and its dividend paying potential. These risks include increasing pressure on the active management industry; continued pressures on global equity markets from inflation, higher interest rates and conflict; the added uncertainties caused by the imposition of tariffs by the US administration; and, the underperformance from LTL’s strategies. Perhaps the greatest risk in relation to LTL’s reputation however remains the withdrawal of either of the founders. They are currently aged 66 and 65, in good health and remain strongly committed to LTL. They are supported by increasingly mature and experienced investment professionals, currently numbering four, all of whom are taking on more responsibility and contributing more to investment decisions as their careers progress with the company. The clearer articulation of the firm’s succession planning and the accelerated transfer of ownership of LTL shares to key individuals should also help mitigate the risk if either founder withdraws.
Data to
Funds Under Management*
FUM by Strategy
Jan 2025 Jan 2024
£m £m
UK 5,154 6,729
Global 7,496 8,956
Japan 58 154
North America 44 37
Total 12,752 15,876
Largest Client Accounts
Jan 2025
Jan 2024
% of FUM % of FUM
Largest Pooled Fund Asset 32% 29%
Largest Segregated Account 12% 11%
* LTL’s year end figures are based on published financial statements.
Lindsell Train Fund Performance
1 Year 3 Year 5 Years 10 Years
Annualised data to 31 January 2025 % % % %
GBP UK Equity Fund (Accumulation) 9.1 4.3 3.6 7.2
FTSE All Share 17.1 7.9 6.6 6.5
GBP Global Equity Fund (B share) 15.3 7.8 6.2 12.1
MSCI World 24.4 12.4 13.4 12.6
JPY Japanese Equity Fund (A share) 1.7 5.5 1.7 6.9
TOPIX 11.9 16.6 13.3 9.5
GBP North American Equity Fund
(Accumulation) 16.1 8.8
MSCI North American 29.1 13.9
Source: Morningstar Direct
Note: all figures above show total returns.
Financials*
Jan 2025 Jan 2024 %
Profit & Loss £’000 £’000 Change
Fee Revenue
Investment Management fee 69,109 86,146 -20%
Performance Fee 0 0
Total Revenue 69,109 86,146 -20%
Staff Remuneration** (20,774) (25,864) -20%
Fixed Overheads (5,011) (4,578) 9%
Exchange gains/(loss) 15 (676)
Operating Profit 43,339 55,028 -21%
Gains on fixed asset investment 1,232 713
Gains on current asset investments 3,625 2,020
Interest receivable and similar income 1,028 998
Profit before tax 49,224 58,759 -16%
Tax on profit (12,322) (14,162)
Net Profit 36,902 44,597 -17%
Dividends (32,259) (38,967)
Retained profit 4,643 5,630
Balance Sheet
Fixed Assets 21 51
Investments 8,904 7,672
Current Assets (inc cash at bank and
investment in Gilts & Bonds) 112,683 118,354
Liabilities (13,446) (22,558)
Net Assets 108,162 103,519
Capital & Reserves
Called up Share Capital 267 267
Share Premium*** 57 57
Share Discount*** (494) (494)
Profit & Loss Account 108,332 103,689
Shareholders' Funds 108,162 103,519
* LTL’s year end figures are based on published financial statements.
** Staff costs include permanent staff remuneration, social security, temporary apprentice levy, introduction fees and other staff related costs. No more than 25% of fees (other than from LTIT) can be paid as permanent staff remuneration.
*** The Share Premium and Share Discount account for the difference in the cost and resale of shares that were held in
Five Year History*
Jan 2025 Jan 2024 Jan 2023 Jan 2022 Jan 2021
Operating Profit Margin 63% 64% 69% 65% 65%
Earnings per share (£) 1,384 1,673 2,038 2,463 2,340
Dividends per share (£) 1,210 1,462 1,841 1,994 1,817
Total Staff Cost as % of Fee 30% 30% 30% 32% 30%
Revenue
Opening FUM (£m) 15,876 18,626 21,215 22,802 21,450
Changes in FUM (£m) (3,124) (2,751) (2,589) (1,587) 1,352
– of market movement 1,713 657 338 331 1,200
– of net new fund (4,837) (3,408) (2,927) (1,918) 152
(outflows)/inflows
Closing FUM (£m) 12,752 15,875 18,626 21,215 22,802
LT Open ended funds as % of total 60% 62% 65% 70% 73%
* LTL’s year end figures are based on published financial statements.
Jan 2025 Jan 2024 Jan 2023 Jan 2022 Jan 2021
Client Relationships
– Pooled funds 5 5 5 5 4
– Separate accounts 11 16 17 18 17
Ownership
Jan 2025 Jan 2024 Jan 2023
Michael Lindsell and spouse 9,510 9,578 9,650
Nick Train and spouse 9,510 9,578 9,650
The Lindsell Train Investment Trust plc 6,333 6,378 6,450
Other Directors/employees 1,307 1,126 893
26,660 26,660 26,643
Treasury Shares 0 0 17
26,660 26,660 26,660
Board of Directors as at
Rory Landman Independent Non-Executive
Julian Bartlett Independent Non -Executive
Jane Orr Non-Executive
Michael Lindsell Chief Executive Officer & Portfolio Manager
Nick Train Chairman & Portfolio Manager
Michael Lim Director, IT & Company Secretarial
Joss Saunders Director, Chief Operating Officer
James Bullock Director, Portfolio Manager
Jessica Cameron Director, Head of Marketing & Client Services
Employees
Jan 2025 Jan 2024
Investment Team (including three Portfolio Managers) 6 6
Client Servicing and Marketing 8 7
Operations and Administration 12 10
Fixed Term Contractors 1 2
Total Employees 27 25
Non-Executive directors 3 3
Total Headcount 30 28
LTIT Directors' valuation of LTL
31 Mar 2025 31 Mar 2024
Notional annualised net profits (A)* (£'000) 20,680 29,240
Funds under Management less LTIT holdings (B) (£'000) 11,345,602 15,180,432
Normalised notional net profits as % of FUM A/B = (C) 0.182% 0.193%
% of FUM (D) (see table below to view % corresponding to 1.85% 1.90%
C)
Valuation (E) i.e. B x D (£'000) 209,894 288,428
Number of shares (F) 26,660 26,660
Valuation per share in LTL i.e. E / F 7,872.98 10,818.76
* Notional annualised net profits are made up of:
– annualised fee revenue, based on 6-mth average fee rate applied to most recent month-end unaudited AUM
– annualised fee revenue excludes performance fees
– annualised interest income, based on 3-mth average
– notional staff costs of 45% of annualised fee revenue
– annualised operating costs (excluding staff costs), based on 3-mth normalised average
– tax deducted at 25% of profits before tax
_____________________________________________________________________________ |Notional annualised net profits*/FUM (%)|Valuation of LTL - Percentage of FUM| |________________________________________|____________________________________| |0.15 to 0.16 |1.70% | |________________________________________|____________________________________| |0.16 to 0.17 |1.75% | |________________________________________|____________________________________| |0.17 to 0.18 |1.80% | |________________________________________|____________________________________| |0.18 to 0.19 |1.85% | |________________________________________|____________________________________| |0.19 to 0.20 |1.90% | |________________________________________|____________________________________| |0.20 to 0.21 |1.95% | |________________________________________|____________________________________| |0.21 to 0.22 |2.00% | |________________________________________|____________________________________|
LTL’s Salary and Bonus Cap
LTL’s salary and bonus expenses are capped at 25% of fees (other than those earned from the
The Board has long recognised that it is important that LTL has the ability to sufficiently reward potential successors, or, if it became necessary to replace the founders, to recruit suitable outside talent. As a consequence, since 2007 the Board has judged it necessary to apply a higher notional salary cost of 45% of revenues in calculating LTL’s net profits when determining the valuation of LTL.
To put this in context, LTL’s total salary and bonus expenses (including employer national insurance payments) have averaged 36% of revenues since 2001. Currently a peer group of quoted fund managers exhibits an average remuneration costs to revenue of 41%, with the salary to revenue of peers with FUM equivalent to LTL is slightly higher at 43%. The Board therefore believes that a notional salary to revenue ratio of 45% makes sufficient allowance for the eventualities described above.
Whilst the 25% salary and bonus cap remain in place for now, both the LTL and LTIT Boards recognise that it may be necessary to review this limit in the future.
LTL valuation methodology
During the reporting year 2022, the Board appointed
In adopting the new methodology the Board seeks to capture the changing economics and prospects for LTL’s business. It is designed to be as transparent as possible so that shareholders can themselves calculate how any change to the inputs would affect the resultant valuation.
The new methodology is simpler as it has a single component based on a percentage of LTL’s FUM (as opposed to two components in the old methodology, see below), with the percentage applied being reviewed monthly and adjusted to reflect the ongoing profitability of LTL. After the end of each month the ratio of LTL’s notional annualised net profits* to LTL’s FUM is calculated and, depending on its result, the percentage of FUM is adjusted according to the table on page 98 of the Annual Report.
The Board determined that a change from the old methodology was necessary as in the years preceding 2022, the valuation difference between its two components used previously had widened considerably. This reflected the effect of the operating leverage in LTL’s business as its FUM increased.
The old methodology was a simple average of two components:
1.5% of LTL’s most recent FUM; and LTL’s net profits (adjusted for a notional increase in staff costs to 45% of revenues excluding performance fees) calculated with reference to LTL’s most recent end month’s FUM, divided by the annual average redemption yield on the longest dated
In making this change, the Board noted that the new methodology correlated closely to the result of the old one (when the average of the two components in the old methodology is expressed as a percentage of FUM) both on the date of change (
In summary, it is the Board’s view that the new methodology simplifies the valuation of LTL whilst capturing the changing operating leverage of the business and is also historically consistent with results from the old one.
* LTL’s notional net profits are calculated by applying a fee rate (averaged over the last six months) to the most recent end-month FUM to produce annualised fee revenues excluding performance fees. Notional staff costs of 45% of revenues, annualised fixed costs and tax are deducted from revenues to then produce notional annualised net profits.
Appendices (unaudited)
Appendix 2
(All ordinary shares unless otherwise stated)
Fair Value % of
Holding Security £'000 total assets
11,200 Visa 3,040 7.7
1,877 Fair Isaac 2,680 6.8
11,600 American Express 2,419 6.1
5,900 S&P Global 2,323 5.9
18,225 Alphabet 2,182 5.5
18,100 TKO Group 2,144 5.4
19,200 Oracle 2,080 5.3
10,300 Equifax 1,942 4.9
24,910 Walt Disney 1,904 4.8
3,800 Intuit 1,807 4.6
8,600 CME Group 1,767 4.5
7,300 Verisk Analytics 1,683 4.3
20,100 Colgate-Palmolive 1,460 3.7
10,800 PepsiCo 1,255 3.2
3,110 Thermo Fisher Scientific 1,199 3.0
21,100 Coca-Cola 1,171 3.0
21,350 Mondelez International 1,122 2.8
3,560 Adobe 1,058 2.7
20,440 PayPal 1,033 2.6
20,400 Nike 1,004 2.5
12,000 T Rowe Price 854 2.2
14,425 Estee Lauder 738 1.9
26,601 Brown-Forman 690 1.8
5,100 Hershey 675 1.7
12,150 Canadian Pacific 661 1.7
3,300 Madison Square Garden Sports 498 1.3
Total Investments 39,388 99.8
Net Current Assets 93 0.2
Net Assets 39,481 100.0
Breakdown by Sector
Financials 29.0%
Information Technology 19.3%
Consumer Staples 18.0%
Communication Services 17.0%
Industrials 10.9%
Health Care 3.0%
Consumer Discretionary 2.5%
Cash & Equivalents 0.2%
100.0%
Glossary of Terms and Alternative Performance Measures (“APM”) (unaudited)
AIC
Alternative Investment Fund Managers Directive (“AIFMD”)
The Alternative Investment Fund Managers Directive (the “Directive”) is a European Union Directive that entered into force on
Alternative Performance Measure (“APM”)
An alternative performance measure is a financial measure of historical or future financial performance, financial position or cash flow that is not prescribed by the relevant accounting standards. The Company’s APMs are the discount and premium, dividend yield, share price and NAV total return and ongoing charges as defined within this Glossary. The Directors believe that these measures enhance the comparability of information between reporting periods and aid investors in understanding the Company’s performance. The measures used for the year under review have remained consistent with the prior year.
Benchmark
With effect from
Prior to
Discount and premium (APM)
If the share price of an investment trust is higher than the Net Asset Value (NAV) per share, the shares are trading at a premium to NAV. In this circumstance the price that an investor pays or receives for a share would be more than the value attributable to it by reference to the underlying assets. The premium is the difference between the share price (based on share prices) and the NAV, expressed as a percentage of the NAV.
A discount occurs when the share price is below the NAV. Investors would therefore be paying less than the value attributable to the shares by reference to the underlying assets.
A premium or discount is generally the consequence of supply and demand for the shares on the stock market.
The discount or premium is calculated by dividing the difference between the share price and the NAV by the NAV.
As at As at
31 March 31 March
2025 2024
£ £
Share Price 818.00 801.00
Net Asset Value per Share 952.13 1,026.43
Discount to Net Asset Value per Share 14.1% 22.0%
Dividend yield (APM)
A financial ratio that indicates how much a company pays out in dividends each year relative to its share price. Dividend yield is represented as a percentage and can be calculated by dividing the value of dividends paid in a given year per share held by the share price.
The figures disclosed on pages 5, 14 and 15 of the Annual Report have been calculated as shown below:
2025 2024
Total Dividends declared per Ordinary Share (a) £42.00 £51.50
Closing price per Ordinary Share on 31 March (b) £818.00 £801.00
Dividend Yield (a) ÷ (b) 5.1% 6.4%
ESG
Environmental, social and governance.
Leverage
The AIFMD leverage definition is slightly different from the Association of Investment Companies’ method of calculating gearing and is defined as follows: any method by which the AIFM increases the exposure of an AIF it manages whether through borrowing of cash or securities, or leverage embedded in derivative positions.
For the purposes of the AIFMD, 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.
The MSCI requires the Company to include the following statement in the Annual Report.
MSCI World Index total return in Sterling (the Company's comparator Benchmark)
The MSCI information (relating to the Benchmark) may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any
Net Asset Value (“NAV”) per Ordinary Share
The NAV per Ordinary Share is Shareholders’ funds expressed as an amount per individual share. Equity Shareholders’ funds are the total value of all the Company’s assets, at current market value, having deducted all current and long-term liabilities and any provision for liabilities and charges.
The NAV per Ordinary Share of the Company is announced to the market weekly. The figures disclosed on pages 5, 14 and 15 of the Annual Report have been calculated as shown below:
2025 2024
‘000 ‘000
Net Asset Value (a) £190,426 £205,285
Ordinary Shares in issue (b) 200 200
Net Asset Value per Ordinary Share (a) ÷ (b) £952.13 £1,206.43
Ongoing charges (APM)
Ongoing charges are expenses of a type that are likely to recur in the foreseeable future, whether charged to capital or revenue, and which relate to the operation of the Company as an investment trust, excluding the costs of acquisition or disposal of investments, financing costs and gains or losses arising on investments. Ongoing charges are based on costs incurred in the year as being the best estimate of future costs and include the annual management charge but not the performance fee. The calculation methodology is set out by the
The figures disclosed on pages 5 and 15 of the Annual Report have been calculated as shown below:
2025 2024
£'000 £'000
Total operating expenses (a) 1,514 1,692
Average Net Asset Value (b) 197,043 203,091
Ongoing Charges excluding synthetic costs (a) ÷ (b) 0.8% 0.8%
Ongoing Charges including the charges of the underlying funds
0.9% 0.9%
(WS Lindsell Train North American Fund ) synthetic costs
Revenue return per Share
The revenue return per share is the revenue return profit for the year divided by the weighted average number of ordinary shares in issue during the year.
SASB
The
SASB Materiality Map©
The Materiality Map was developed by the SASB. It ranks issues by industry based on two types of evidence: evidence that investors in the industry are interested in the issue, and evidence that the issue has the ability to impact companies within the industry.
Share price and NAV total return (APM)
These are the returns on the share price and NAV respectively taking into account both the rise and fall of share prices and valuations and the dividends paid to Shareholders.
Any dividends received by a Shareholder are assumed to have been reinvested in either additional shares (for share price total return) or the Company’s assets (for NAV total return).
The share price and NAV total return are calculated as the returns to Shareholders after reinvesting the net dividend in additional shares on the date that the share price goes ex-dividend.
The figures disclosed on pages 5, 14 and 15 of the Annual Report have been calculated at shown below:
Year Ended 31 March 2025
LTIT NAV LTIT Share Price
NAV/Share Price at 31 March 2025 a £952.13 £818.00
Dividend Adjustment Factor* b 1.239 1.067
Adjusted closing NAV/Share Price c = a x b £1,179.89 £873.09
NAV/Share Price at 31 March 2024 d £1,206.43 £801.00
Total return ((c/d)-1)) x100 (2.2)% 9.0%
* The dividend adjustment factor is calculated on the assumption that the dividends of £51.50 paid by the Company during the year were reinvested into shares or assets of the Company at the cum income NAV per share/share price, as appropriate, at the ex-dividend date.
LTL total return performance
The total return performance for LTL is calculated as the return after receiving but not reinvesting dividends received over the year.
The figure disclosed on page 5 of the Annual Report has been calculated as shown below:
LTL valuation
Valuation at 31 March 2024 a £10,819
Valuation at 31 March 2025 b £7,893
Dividends paid during the year c £1,210
Total return {((b-a)+c)/a}x100 -15.9%
TCFD
Treasury Shares
Shares previously issued by a company that have been bought back from Shareholders to be held by the company for potential sale or cancellation at a later date. Such shares are not capable of being voted and carry no rights to dividends.
2025 Accounts
The figures and financial information for 2025
are extracted from the Annual Report and financial statements for the year ended
2024 Accounts
The figures and financial information for 2024 are extracted from the published Annual Report and financial statements for the period ended 31 March 2024 and do not constitute the statutory accounts for that year. The Annual Report and financial statements have been delivered to the Registrar of Companies and included the Report of the Independent Auditor which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.
Annual report and financial statements
Copies of the Annual Report and financial statements will be posted to shareholders
in mid
The Company's Annual
Report for the period ended
The Annual General Meeting will be
held on Thursday,
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
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For further information please contact
Company Secretary
For and on behalf of
020 3170 8732
