Mid Wynd International Investment Trust Plc - Annual Financial Report
Legal Entity Identifier: 549300D32517C2M3A561
Annual Financial Results for the year ended
Financial Highlights
Returns for the year ended
Year ended Year ended 21 months ended
30 June 2025 30 June 2024 30 June 20252
Total returns
Net asset value per ordinary (5.1)% 13.9% 8.1%
share1
Share price1 (5.9)% 17.1% 7.0%
MSCI All Country World Index 7.2% 20.1% 27.9%
(GBP)
Year ended Year ended
30 June 2025 30 June 2024
Revenue and dividends
Revenue earnings per share 5.54p 8.00p
Dividends per share3 8.35p 8.00p
Ongoing charges1 0.64% 0.60%
As at 30 June 2025 As at 30 June 2024
Capital
Net asset value per share 760.96p 810.22p
Share price 742.00p 797.00p
Net cash1 1.3% 1.4%
Discount1 2.5% 1.6%
Source: Juniper, LSEG Datastream.
1 Alternative Performance Measure.
2
Performance under Lazard appointed as Investment Manager with effect from
3
A final dividend, if approved by shareholders, for the year to
Total returns to 30 June 2025 1 year 3 years2 5 years2 10 years2 Net asset value per ordinary share1 (5.1)% 14.2% 31.3% 164.5% Share price1 (5.9)% 11.3% 28.3% 152.5% MSCI All Country World Index (GBP) 7.2% 43.2% 71.0% 197.5%
Source: LSEG Datastream, total returns with dividends reinvested.
1 Alternative Performance Measure.
2
Total returns over 3, 5 and 10 years covers the period over which
Strategic Report
Chairman's Statement
This is my first report as Chairman of the Company, and it is disappointing to be reporting a significant degree of underperformance in the past year. Indeed, since Lazard, our new Investment Manager, took over management of the Trust on
Investment performance
For the year ended
Earnings and dividend
The net loss for the year ended
Since its inception in 2011, the Global Quality Growth strategy implemented by our Investment Manager has consistently produced an annual growth in investee company dividends. We would expect revenue growth such that the current use of reserves to cover the dividend should not continue for a prolonged period.
The Board is proposing a final dividend of
The Ongoing Charges Ratio (`OCR') for the year ended
Share capital and discount management
The sustained programme of buybacks undertaken by the Company since early 2023 continued throughout the year under review. The Company's policy, within normal market conditions, is to issue and repurchase shares where necessary to maintain the share price within a 2% band relative to the NAV. The Company's NAV is assessed on a real time basis when buying or selling the Company's shares using modelling that updates live prices and exchange rates to provide the most accurate valuation.
Our buybacks have been successful in maintaining a low discount to NAV for our share price. As at
During the year to
The discount control mechanism has a long history of success and shareholders regularly comment that they strongly support the Board's position on discount and premium management. To this end, to ensure that the Company maximises its ability to maintain the discount management mechanism, a General Meeting was held on
Since the year end and up until
The rate of buybacks continues to be such that in order to ensure the Company has sufficient capacity to maintain the discount control mechanism until the date of the 2025 AGM (when new allotment and buyback authorities will be sought), a further General Meeting was held on
All shares repurchased by the Company under the discount control mechanism are held in
Board succession
On
Shareholder engagement and communications
At a time when an increasing number of shareholders would like to engage with their investee companies in a wide variety of ways, the Directors have striven to improve our shareholder communication and marketing strategies. We believe that keeping existing shareholders fully informed and attracting new investors are key to the Company's long term health. Details of how the Board approaches this are available on page 42 of the Annual Financial Report. Some of the highlights in terms of developments this year include:
-- An overhaul of the Company's website
-- Contacting all registered shareholders and inviting them to sign up for
regular updates
-- Increasing the production of digital and video content
-- Presenting on a number of third party webinars and podcasts
-- Producing informative and interesting content on the Company's
investment strategy
If you have not already done so we would encourage you to sign up for updates using the QR code at the back of the Annual Financial Report, in order to benefit from ongoing improvements in this area.
The Board is always keen to hear from shareholders and, should you wish, you can contact me through
Annual General Meeting
The Board looks forward to welcoming shareholders to the AGM which will be held at 12.00 noon on
Outlook
Uncertainties and dangers abound. The geopolitical environment continues to be uncertain and shifting tariffs may cause further market dislocations. In such conditions, it is important to focus attention on the quality of the Company's investments. The Investment Manager's report summarises the characteristics of the Company's investments which give them a large degree of protection from market related headwinds, and which did indeed enable portfolio companies to grow during the last year. Whilst our portfolio companies have suffered from the style shift away from quality companies, such shifts in sentiment do not generally last for long periods. The Investment Manager's approach is designed to generate good returns for shareholders over the long term, and the Board is pleased that the Investment Manager has maintained its investment style and focus. The Company's investments are currently being held at remarkably attractive valuations, and the Board is optimistic that the coming year will bring a significant improvement in both absolute and relative performance.
The Board respects and is grateful for the considerable patience shown by shareholders.
Chairman
Investment Manager's Review
Overview
The Company's NAV fell by 5.1% and the Company's share price fell by 5.94% between
As you would imagine, we have spent considerable time trying to understand why this has happened and whether we need to refine an approach that has worked so well for us in the past. Our approach is to focus on "Quality" stocks - great companies that produce returns well above the cost of capital and therefore have the resources to reinvest in maintaining their competitive edge. This philosophy is reflected in the portfolio. The portfolio's return on capital, based on our preferred metric Cash Flow Return on Investment (CFROI), was 23.3%, more than three times the 7.4% CFROI of the MSCI All Country World Index 2 . Over the previous twelve months, portfolio earnings grew 12.0% and operating cash flow grew 15.0%. 3
Quality stocks have underperformed the market over the last year, and, unfortunately, the same applies to the stocks we held in the portfolio. Our analysis shows that, despite these companies continuing to deliver solid earnings growth over the period, these stocks have seen a meaningful derating of their valuation multiples relative to those of the market as a whole. The full analysis can be found within the Performance, Activity & Positioning section.
Be in no doubt, this is unusual. What we have just witnessed is the most significant relative derating in the valuation of these companies in at least the last 10 years. It has not been comfortable for us or our investors, but our conclusion is that high-quality stocks are now looking more attractively valued than they have been for most of the past decade. We continue to review our portfolio and ask hard questions, but our faith in Quality investing remains undimmed.
In short, we believe the current environment provides an excellent opportunity for long-term investors to invest in Quality businesses at unusually attractive valuations.
1 Past performance is not a reliable indicator of future returns.
2
As of
3
As of
Market review
Global stock markets rose over the fiscal year (
The market, as measured by the MSCI All Country World Index (`ACWI'), a broad global index, rose 7.2% in Pound sterling terms, has continued to be thematic over the last year as investor enthusiasm persisted for some artificial intelligence (`AI') related companies believed to have the potential to transform the economy. Although AI-exposed stocks came under pressure on the January news that Chinese startup
Geopolitical risks increased as the escalating war between
In the US, initial investor enthusiasm for the new administration's anticipated business-friendly policies was tempered by the country's push for higher import taxes. The early April rollout of US tariffs, including higher rates on goods from
The central banks of the
In contrast, the Bank of Japan (`BOJ') has raised interest rates to their highest level since 2008 as it is grappling with rising inflation and a fragile economy weighed down by the potential impact of US tariffs. Elsewhere in
Performance, activity and positioning
Over the course of the last 12-months
4
, the Company's net asset value (`NAV') fell by 5.1% and the share price fell by 5.9%, both in Pound sterling terms. Shares traded at a discount to the NAV during this period, ending the period at a discount of 2.5%, which compares favourably with a discount of 7.5% for the
As mentioned upfront in our Overview, our performance has been far below what we, and shareholders of Mid Wynd, would have expected, and we have spent considerable time trying to understand why this has happened and whether we need to refine an approach that has worked so well for us in the past 5 .
Our approach is to focus on "Quality" stocks - companies with strong fundamentals that can generate returns well above the cost of capital, providing them with the potential to reinvest in maintaining their competitive edge. This is reflected in the portfolio. The portfolio's return on capital, based on our preferred metric Cash Flow Return on Investment (CFROI), was 23.3%, more than three times the 7.4% CFROI of the MSCI All Country World Index 6 . Over the previous twelve months, portfolio earnings per share outgrew the MSCI ACWI. 7
The conclusion of our analysis is that overall, we appear to have been on the wrong side of changes in the multiple by the market. This derating has happened despite continued high returns on capital and strong earnings compounding by our companies, which we believe is what the market weighs over the long term. The operational performance of the companies we hold gives us the confidence to hold steadfastly to our approach, which has worked until the last few years, and we hope it will give shareholders that same confidence despite this difficult period.
By way of background to our analysis, Quality stocks on the whole have underperformed the broad market by approximately -1.8% in the second quarter, -4.0% calendar year to date, and -9.9% over the last 12-months. 8
While earnings of Quality stocks have held up reasonably well, as would be expected, their prices have declined i.e. their multiples have compressed relative to the broader market 9 .
We see the same trend reflected in the portfolio when examining our holdings. Decomposing returns between earnings and valuation over the last year, we find that while the median 8.9% increase in earnings estimates for portfolio holdings over the last year is moderately higher than that of the MSCI ACWI (8.6%), the portfolio has derated significantly, with the median price to earnings multiple declining 8.9% vs. the ACWI's multiple expanding 5.9% 10 .
We believe part of the derating over the last year is that high-quality stocks are perceived as most at-risk from the current trade tensions between the US and its economic partners, as they are more exposed to international trade. It is true that high-quality companies on average generate more of their revenue outside their domestic market than the average listed company, so on a very simplistic read of the impact of tariffs, these moves could make sense. However, we believe there are three factors this simplistic analysis misses:
1. High-quality companies generally have strong barriers to competition and
pricing power, which will mean the burden of tariffs will fall on their
customers rather than their own margin structure.
2. They tend to have high gross margins, which means they need to increase
prices by far less to compensate for the tariff cost.
3. They are generally quite defensive and perform better than their peers in
difficult economic environments, which should be beneficial if the trade
wars lead to a broader economic slowdown.
As a reminder, Quality as a style has outperformed Value, Growth and the broad market 11 for much of the last 25 years, generating positive relative returns in over 80% of rolling 3-year periods 12 .
For long-term investors, we believe the current environment provides an excellent opportunity to invest in high-quality businesses at unusually attractive valuations. We have just witnessed the most significant relative derating in the valuation of these companies in at least the last ten years, despite the fact that they have continued to deliver strong earnings growth. This has left high-quality stocks looking more attractively valued than they have been for most of the last decade.
While Quality companies have largely been overlooked by the market over the recent past, history tells us that the environment will change, and we believe Quality will reassert as an alpha source. We remain committed to owning the highest-quality companies globally and hope to report better relative performance results going forward.
4
5
Note our investment philosophy has been validated by the work done by co-lead portfolio manager/analyst
6
As of
7
As of
8
As of
9
As of
10
For the period
Source: Lazard, Bloomberg.
11
12
As of
Key stock-level contributors to portfolio performance
The following stocks have been key contributors to the Company's absolute returns during the period covered in this report.
Five principal contributors
Company Contribution to Total Return (%) Amphenol 1.28 Dollarama 0.95Visa 0.70 Intercontinental Exchange 0.50 Taiwan Semiconductor Manufacturing (`TSMC') 0.50
Source: Lazard/FactSet.
Data in GBP and for the period from
-- Amphenol is a diversified electrical connector and sensor maker. Company
earnings have been driven by its solutions for AI datacenters, where it
provides a critical component at low cost where performance and
reliability are prioritised over price. Additionally, we are attracted
to its capital discipline in consolidating fragmented markets.
-- Dollarama,a Canadian discount retailer, has seen higher same-store sales
growth and lower logistics costs. The company enjoys a dominant market
position (its next four largest competitors have a combined store count
that is only one-third of Dollarama's) and can reinvest cash flow into
new stores and logistics efficiencies to further its competitive
position.
-- Visa,the global payments company, continues to generate a high level of
financial productivity and has experienced both purchase volume and
transaction growth. The company's brand and four-party ecosystem -
card-issuing banks, consumers, merchants and merchant acquirers - serve
as strong barriers to competition as digital payments increase.
-- Intercontinental Exchangeoffers financial exchange services, fixed
income data, and mortgage technology. The company has benefitted from
positive volume trends. The futures business is tracking well, and the
mortgage business appears set for new growth. The company's scale
creates a barrier to new entrants, and the company can reinvest into
adjacent capital light businesses.
-- Taiwan Semiconductor Manufacturingis a frontrunner in the leading-edge
semiconductor manufacturing, and the company is seeing strong demand in
highly complex chips required by AI developments. TSMC's economic moat
is driven by a virtuous flywheel in which tech leadership drives market
share gains, the subsequent scale fuels cost competitiveness and higher
cash flows, which can then be reinvested in process innovation. For
example, the company's investment in packaging technologies support
increasingly complex chip designs.
Key stock-level detractors from portfolio performance
The following stocks have been key detractors from the Company's absolute returns during the period covered in this report.
Five principal detractors
Company Contribution to Total Return (%) Apple (1.00) Adobe (0.95) Thermo Fisher Scientific (0.94) IQVIA (0.90) Alphabet (0.82)
Source: Lazard/FactSet.
Data in GBP and for the period from
-- Apple remains the world's leading smartphone vendor. It benefits from a
substantial installed base, the network effects of its iOS platform, and
a diversified and growing high-margin revenue stream of software and
services. We believe the market has overly discounted the impact of
potential tariffs or Google Search royalties.
-- Adobe, an established leader in digital transformation, should be a
winner as AI is integrated into workflows, but the market seems to be
concerned about the pace of AI-related revenues and low-end competition.
We believe Adobe will be able to benefit from its leadership in core
markets and innovation, which can drive double-digit earnings growth.
Continued growth in content creation should generate increased need for
the company's products, and Adobe's newly-introduced tiered pricing and
AI monetisation levers should start to support growth.
-- Thermo Fisher Scientific faced concerns that the new US administration's
policies could impact academic, government, and R&D spending trends,
while weaker demand in China was also a headwind. While the company
reduced guidance, it emphasised its scale enables better navigation of
these challenges and anticipates potential share gains. We hold Thermo
Fisher as the company's portfolio of research products and development
services provides a differentiated offering for customers, has
attractive secular growth and financial characteristics, and is the
market leader across very fragmented end markets.
-- IQVIA the health information technology and clinical research provider,
reporting strength in its Technology and Analytics Solutions segment,
but management issued cautious guidance amid continued delays in its R&D
Solutions segment and a challenging macro and regulatory environment. We
remain confident in IQVIA's quality and resilience, particularly in its
growing data business alongside its contract research organisation
(`CRO') operations. We continue to like IQVIA's strong financial
productivity, driven by solid revenue growth, consistent margin
expansion, shrewd capital deployment, and a capital-light business
model.
-- Investors in Google -parent Alphabet debated the increased competitive
risk and disruption to the company's core Search business as AI
assistant/ chatbot/agent capabilities increasingly overlap with search
use cases. Shares were also impacted by a negative Department of Justice
ruling, higher than expected capex, and decelerating Cloud results. We
continue to own the company as we believe in its technical expertise,
competitive attributes, and potential to deliver financial returns over
time. In our view, the company has many competitive attributes, the
primary of which is centred on scale, and a strong position in AI given
its large scale computing infrastructure, Gemini family of AI models,
engineering talent, unique data, and distribution across its at least 15
products with more than 500 million users. This creates potential upside
optionality over time and can accelerate opportunity in areas like Cloud
and Waymo.
Key sectoral and regional contributors to portfolio performance
As discussed above, our sectoral and regional exposures are driven by stock selection.
At the sectoral level, Financials and Consumer Discretionary contributed to total return. This was offset primarily by holdings in Health Care, Information Technology, and Industrials.
Sector contributions
Sector Contribution to Total Return (%) Financials 1.83 Consumer Discretionary 0.31Communication Services (0.25) Consumer Staples (0.35) Industrials (1.50) Information Technology (1.91) Health Care (2.85)
Source: Lazard/FactSet.
Data in GBP and for the period from
At the regional level, holdings in
Regional contributions
Region Contribution to Total Return (%)Emerging Markets 0.97Asia exJapan 0.22United Kingdom 0.00Japan (0.27)Europe exUK (2.30)North America (3.34)
Source: Lazard/FactSet.
Defined by country of listing.
Data in GBP and for the period from
Our investment process
The search for Compounders
In light of the commentary so far, we thought it may be helpful to remind investors of our core investment principles. We manage the Company's portfolio in accordance with our Global Quality Growth strategy, which aims to invest in businesses we consider to be "Compounders".
We define a Compounder as a company we believe is capable of generating consistently high returns on capital and reinvesting in its business to drive future growth. This process should create a virtuous "compounding cycle" of wealth creation in which investors can share.
We believe the broader market undervalues Compounders because it adheres to the economic law of competition. This prescribes that high returns on capital attract competition, squeezing market share, driving down prices and resulting in an erosion of profitability. But we see plenty of real-world examples to show the theory does not work in practice.
In our view, Compounders have sustainable advantages that help them keep competitors at bay. Although the market assumes their profitability will fade, they deliver consistently high financial productivity for longer than expected.
As a result, investors who focus more on near-term earnings multiples rather than a company's long term earning power are likely to undervalue these exceptional businesses. This means that when these Compounders "beat the fade" they tend to beat the market, too.
We prefer to own Compounders for long periods to allow the compounding cycle to drive cash flows and share prices higher. This is reflected in the strategy's turnover, which during the past five years has averaged just 10%-15% annually - an approach that has also helped keep trading costs low.
Our investment process is reinforced by empirical research covering 25 years of markets and supported by Lazard's extensive fundamental research team of over 70 global sector specialists. Drawing on this expertise, we look to build a portfolio that is broadly diversified across sectors, regions and competitive advantages and which can generate attractive total returns for investors.
Portfolio activity: our process in practice
Although the average holding period for our Global Quality Growth strategy is between 7 and 10 years, we aim to take full advantage whenever the market gives us an opportunity. The following new buys and deeper dive "Stock in Focus" illustrate how we have applied this aspect of our investment process over the past twelve months.
We added
Hilton Worldwide
, a global hotel company with more than 8,000 hotels and more than 1.2 million rooms in its portfolio, to the Trust holdings. The company operates across more than 20 brands, including Hilton and
We also invested in Cadence System Designs , which designs and develops solutions required for semiconductors and electronic systems. The company operates in the Electronic Design Automation (`EDA') industry, and is also expanding into electronic design automation software, intellectual property (verification IP), and emulation hardware (enables a hardware piece to act like another). The company's solutions are integrated and used in every stage of design creation, implementation, verification, analysis and signoff from chips to printed circuit boards (`PCBs') to complete electromechanical systems. Cadence's designs, in combination with advances in semiconductor technology, optimise the power consumption of electronics while enabling significant performance increases across a wide array of clients, including data science and machine learning, 5G communications, automotive, mobile, aerospace, industrial and healthcare. We believe Cadence will benefit from higher unit growth with increasing chip designs and complexity, in addition the company can sustainably grow revenues while also expanding their operating margins.
We also purchased
Diageo
, a global producer and marketer of alcoholic beverages. The company has focused its portfolio on premium spirits in recent years, with strong positions in the most attractive spirits categories (tequila and whisky). It owns leading brands in most spirits categories, such as
Stock in Focus
EssilorLuxottica (`EL') operates in the very attractive eyewear space (~25% market share). The company is the clear market leader in the manufacture of lenses, frames, and sunglasses, owns many of the biggest eyewear brands in the world, and distributes through the largest omnichannel network globally. EL also pioneers industry innovation and its impressive reinvestment allows it to create new products that have the potential to revolutionise eyewear and further reinforce barriers to competition. The company's main competitive advantages are:
-- Scale and Dominance: EL has approximately 25% market share, making it
five times larger than its next competitor. It is also the market leader
in optician equipment, the largest distributor of contact lenses, and
holds dominant market positions across the majority of eyewear
categories (Lens, Frames, and Sunglasses). This scale gives EL
significant expertise and the means for investment (e.g., marketing,
R&D, M&A ) versus smaller peers. EL is also well-diversified by
geography, channel, product category, and price segment.
-- Vertically Integrated across Value Chain: The company's business model
is vertically integrated across the entire eyewear value chain, giving
it speed, flexibility, and cost advantages. EL is also the only eyewear
player with a fully integrated supply chain across both lenses and
frames. Its supply chain dwarfs peers and is near impossible to
replicate. With over 500 prescription labs and 100 distribution centres
globally, EL generally has close proximity to its retail and wholesale
networks, allowing for faster customer service and store replenishment.
The breadth of EL's supply chain also creates more agility versus peers
(e.g., the ability to shift production during COVID lockdowns quickly).
-- Innovation and Brand: Innovation and brands are key to driving average
selling price and building barriers against lower-cost entrants in the
market. EL has more than 150 eyewear brands, including the two biggest
eyewear brands in the world (#1 Ray-Ban and #2 Oakley) and notably
Bolon, the #1 in China . EL is also the market-leading licensee for
luxury brands (e.g., Prada, Chanel) and continues to add more licenses.
The group has brand offerings across all price points, with its US
online business "Eyebuydirect.com" offering $6 glasses, which is the
lowest price in the industry and demonstrates EL's cost advantages.
EL is the innovation pioneer in the eyewear industry- with 50 R&D facilities and 13,000 patents. The company's R&D spend in lenses accounts for ~75% of the industry's total R&D, enabling EL to accelerate the cadence of product launches versus peers. Examples of innovations and growth opportunities include:
-- Nuance Audio: These light and stylish glasses include an invisible
hearing aid that amplifies sound through the frame and is controlled
through an app. Nuance Audio addresses an untapped market of consumers
with mild-to-moderate hearing loss (over 1 billion people globally).
Individuals without hearing loss have purchased these glasses for use in
loud environments, suggesting a larger market.
-- Ray-Ban Meta: Through Ray-Ban, EL has developed smart glasses in
conjunction with Meta. The glasses can receive calls, play music, take
photos/videos, and live stream to social media all within the Ray-Ban
frame. Despite a softer consumer demand environment, sales indications
are very strong. The integrations with Meta's AI assistant and personal
computing capabilities could dramatically change the addressable market.
-- EL is also developing eye tracking technology, whereby the glasses can
identify potential neurological health issues (e.g., early signs of
stroke), meaning smart eyewear could become the most effective wearable
health monitor.
Moving forward, we believe the business will grow organically, with substantial opportunities to further improve profitability. Impressive reinvestment allows EL to create new product categories (e.g., myopia management, smart glasses) that have the potential to revolutionise the eyewear industry and further reinforce barriers to competition.
Exposures by sector and region
In line with our investment process, our sectoral and regional exposures are driven by stock selection. Changes in exposure from
-- Purchases: Alphabet (Communication Services ), Apple (Information
Technology), Cadence Design Systems (Information Technology), Corpay
(Financials), Diageo (Consumer Staples), EssilorLuxottica (Health Care),
Equifax (Industrials), HealthEquity (Health Care), Hilton Worldwide
(Consumer Discretionary), and Meta Platforms (Communication Services ).
-- Sales: Alphabet (Communication Services ), BRP (Consumer Discretionary),
Danaher (Health Care), Estée Lauder (Consumer Staples), Intuit
(Information Technology), Shimano (Consumer Discretionary).
Sector exposure rose in Information Technology and Financials and fell in Communications Services and Health Care. Typically, the strategy has zero weight in Real Estate, Energy, Materials and Utilities, as companies in these sectors tend not to generate sufficient returns on capital to be considered of high quality.
Outlook 13
Looking forward, for long-term investors, we believe the current environment provides an excellent opportunity to invest in high-quality businesses at unusually attractive valuations. We have just witnessed the most significant relative derating in the valuation of these companies in at least the last 10 years, despite the fact that they have continued to deliver strong earnings growth. This has left high-quality stocks looking more attractively valued than they have been for most of the last decade.
While Quality companies have largely been overlooked by the market over the recent past, history tells us that the environment will change, and we believe Quality will reassert as an alpha source. We remain committed to investing the Company's capital in Compounder stocks and hope to report better relative performance results going forward 14 .
Our confidence stems from our long-term study of the global markets and our fundamental research capabilities, and we firmly believe that the companies we are invested in should continue to deliver solid earnings and cash flow growth. We are reminded that share prices do not always follow fundamentals over the short term. As long-term investors, we need to have the patience and fortitude to follow our conviction and stay the course through challenging periods. We believe the market will assign a higher valuation to our companies over time if they continue to demonstrate strong operating performance.
AI has been a market theme over the review period, and we certainly do not underestimate its power. While the market has thus ascribed most of AI's value to those few businesses that are building AI infrastructure, we believe in time other Company holdings poised to benefit from this transformative technology, will also benefit.
We thank you for your continued investment.
Fund Managers
13
Comments as of
14 Forecasted or estimated results do not represent a promise or guarantee of future results and are subject to change.
Portfolio of Investments as at
Investment Country Market value % of total net MSCI Sector
£'000 assets
Apple United States 14,822 4.8% Information
Technology
Taiwan Information
Semiconductor Taiwan 14,366 4.7% Technology
Manufacturing
Amphenol United States 13,226 4.3% Information
Technology
Microsoft United States 13,097 4.3% Information
Technology
Visa United States 12,811 4.2% Financials
S&P Global United States 11,093 3.6% Financials
RELX United Kingdom 10,428 3.4% Industrials
Verisk Analytics United States 9,522 3.1% Industrials
Aon United States 9,114 3.0% Financials
Dollarama Canada 9,076 3.0% Consumer
Discretionary
Intercontinental United States 8,926 2.9% Financials
Exchange
Accenture United States 8,263 2.7% Information
Technology
HDFC Bank India 8,098 2.6% Financials
Ametek United States 7,835 2.5% Financials
Hexagon Sweden 7,231 2.4% Information
Technology
Salesforce United States 7,200 2.3% Information
Technology
Zoetis United States 6,980 2.3% Health Care
Clicks Group South Africa 6,668 2.2% Consumer Staples
Wolters Kluwer Netherlands 6,619 2.2% Industrials
Cadence Design United States 6,607 2.1% Information
Systems Technology
IQVIA United States 6,024 2.0% Health Care
Thermo Fisher United States 5,903 1.9% Health Care
Scientific
Partners Group Switzerland 5,740 1.9% Financials
ASML Netherlands 5,677 1.8% Information
Technology
Coca-Cola United States 5,486 1.8% Consumer Staples
Adobe United States 5,463 1.8% Information
Technology
Keyence Japan 5,380 1.7% Information
Technology
Nordson United States 5,341 1.7% Industrials
Rockwell United States 5,275 1.7% Industrials
Automation
Universal Music Netherlands 5,173 1.7% Communication
Group Services
VAT Group Switzerland 5,083 1.7% Industrials
Booz Allen United States 5,024 1.6% Industrials
Hamilton
Tencent Hong Kong 4,979 1.6% Communication
Services
HOYA Japan 4,703 1.5% Health Care
Equifax United States 4,632 1.5% Industrials
Toei Animation Japan 4,309 1.4% Communication
Services
Corpay United States 4,179 1.4% Financials
Hilton Worldwide United States 3,208 1.0% Consumer
Discretionary
EssilorLuxottica France 3,176 1.0% Health Care
Meta Platforms United States 3,167 1.0% Communication
Services
Diaego United Kingdom 3,164 1.0% Consumer Staples
Alphabet A United States 2,981 1.0% Communication
Services
HealthEquity United States 2,919 0.9% Health Care
SMS Japan 2,510 0.8% Industrials
Nike United States 2,000 0.7% Consumer
Discretionary
Total equity 303.478 98.7%
investments (45)
Net current 4,023 1.3%
assets
Total net assets 307,501 100%
Strategy and Business Review
This Strategic Report has been prepared in accordance with the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013.
Purpose
Our purpose is to increase the real wealth and prosperity of our shareholders, thus helping them meet their long-term savings needs.
Through our investment company structure, we enable shareholders, large or small, to invest in an actively-managed diversified portfolio of securities in a cost-effective way, giving them access to the growth opportunities offered by world markets.
Strategy
As stated above, the Company's purpose is to increase the real wealth and prosperity of our shareholders, thus helping them meet their long-term savings needs. To achieve this goal, the Company has adopted a number of policies which are set out below.
Objective and investment policy
The objective of the Company is to achieve capital and income growth by investing on a worldwide basis. Although the Company aims to provide dividend growth over time, its primary aim is to maximise total returns to shareholders.
The Company is prepared to move freely between different markets, sectors, industries, market capitalisations and asset classes as investment opportunities dictate. On acquisition, no holding shall exceed 15% of the portfolio. The Company will not invest more than 15% of its gross assets in
The number of individual holdings will vary over time. To ensure diversification of opportunity and management of risk, the Company is permitted by its policy to hold between 40 and 140 holdings; however, the portfolio will generally hold a portfolio of shares at the lower end of this range. The portfolio will be managed on a global basis rather than as a series of regional sub-portfolios. As at
The Board assesses investment performance with reference to the MSCI All Country World Index (GBP). However, the Directors expect the Investment Manager to pay little attention to the composition of this index when constructing the portfolio and the composition of the portfolio is likely to vary substantially from that of the index. A long-term view is taken and there may be periods when the net asset value per share declines in absolute terms and relative to the comparator index.
Business model
The Company is incorporated in
The Company has no employees and the Board, which consists solely of non-executive Directors, has delegated most of the Company's operational functions to a number of key service providers. All key service providers are appointed under rolling contracts which are periodically reviewed, at which time the appropriateness of the continuing appointment of such service providers is considered. Details of the key service providers are set out later in this Annual Financial Report.
Dividend policy
The Company's main focus is on growing shareholders' capital. It pursues a flexible dividend policy which is not solely determined by the requirements of s1158 of the Corporation Tax Act 2010 to retain no more than 15% of revenue earnings in any financial year. The Board intends to grow dividends, subject to the availability of distributable reserves. As previously communicated in the last Half-Yearly Financial Report, the Company's revenue returns are expected to be lower in the short term as a result of Lazard's investment strategy. This is focused on capital appreciation rather than income generation, driven by the investment portfolio typically reinvesting a significant portion of earnings in order to maximise growth. In future the Board intends at least to maintain the dividend, using the revenue reserve and, when required, the capital reserve, for a short period of time if necessary. This year the Company will need to utilise its accumulated revenue reserves to pay its dividend.
Gearing and leverage
The Company may use borrowings to support its investment strategy and can borrow up to 30% of its net assets. The Company had a
Although no borrowing facility is currently in place, the Company's gearing is regularly reviewed by the Board following consultation with the Investment Manager.
Leverage is defined in the Alternative Investment Fund Managers Directive (`AIFMD') as any method by which the Company can increase its exposure by borrowing cash or securities, or from leverage that is embedded in derivative positions. The Company is permitted to borrow up to 30% of its net assets (determined as 130% under the Commitment and Gross ratios). The Company is permitted to have additional leverage of up to 100% of its net assets, which results in permitted total leverage of 230% under both ratios.
Current and future developments
A summary of the Company's developments during the year ended
Culture and values
Culture
Corporate culture for an externally-managed investment trust like
Values
The Board is mindful that it is overseeing the management of a substantial investment portfolio on behalf of investors. In many cases, the investment in the Company may represent a large proportion of an individual's savings. As nearly all the Directors are invested in the Company, the Directors' interests are aligned with those of fellow shareholders in this regard.
Our approach to governing the Company is therefore underpinned by our determination to do the right thing for our shareholders. Key to this is having a constructive relationship with them, through monthly updates, half-yearly and annual financial reports, and the opportunity to meet with them at the Annual General Meeting.
We also believe in having strong relationships with our key service providers, one based on mutual trust and respect, with constructive challenge when required. Below is a summary of the Board's most important values:
-- Excellence: the Board is focused on its purpose of delivering long-term
value for all its shareholders, whether they are large or small.
Focusing on this strategic imperative and adopting best practice
wherever appropriate in all the Company's dealings are key to driving
excellence. We will always put our shareholders first and will
constantly look at how to enhance long term value, for example through
the use of gearing, share issuance, and buybacks.
-- Integrity: the Board seeks to be ethical and honest, to comply with all
laws and regulations applicable to investment companies, to avoid
conflicts of interest and to have zero tolerance to bribery and
corruption, tax evasion or other fraudulent behaviour. It expects the
same high standards to be adopted by all its service providers.
-- Accountability: the Board recognises the need to explain the Company's
performance to investors, including the upsides, the downsides and the
risks in a clear, straightforward and transparent manner. Accountability
also involves the Board challenging its key service providers to ensure
the Company continues to receive a high standard of service to drive
long term shareholder value. Each of the Directors recognises their
individual responsibility to shareholders and accordingly each of the
Directors will stand for re-election at each Annual General Meeting,
other than in instances where a Director has signalled their intention
to retire.
-- Respect: the Board is collegiate and recognises the value of the diverse
backgrounds and opinions of its Directors. It also recognises the
importance of treating shareholders and key service providers with
respect. Contact by shareholders via the Chairman's email address
cosec@junipartners.com is welcomed; the Company adheres to key service
provider terms and conditions such as prompt payment.
-- Sustainable investing, Stewardship and Environmental, Social and
Governance (`ESG') issues:the Board recognises the importance of such
matters in the generation of long term returns for shareholders.
The Investment Manager's Approach to Sustainability, Stewardship and Environmental, Social & Governance (`ESG') Matters
The Board expects Lazard to invest in companies which can provide long-term value for the Company's shareholders, without damaging either society or the environment. Set out below is a summary of how Lazard integrates sustainability and ESG considerations into its investment approach and a report of its stewardship activities.
Lazard integrates ESG considerations into the fundamental analysis conducted on every potential investee company. When evaluating potential `Compounder' companies (see definition on page 14 of the Annual Financial Report) in which to invest, Lazard is focused on how ESG opportunities and risks may affect a company's competitive advantages, the sustainability of its financial productivity, its reinvestment opportunities, and its valuation. Lazard also has access to third party data sources to augment this proprietary fundamental research.
Lazard's research suggests that Compounders tend to have attractive environmental and/or governance attributes. This has generally resulted in the portfolio having a positive sustainability profile i.e., significantly lower carbon emissions, lower carbon intensity, and lower ESG risk versus its reference comparator index, the MSCI All Country World Index. This is an outcome of stock selection, not a target objective.
Portfolio carbon emissions
The challenges around climate change are of increasing importance. The portfolio's carbon emissions have remained consistently below the comparator index, the MSCI All Country World Index.
Stewardship and investee company engagement
The Board delegates authority to Lazard to invest responsibly, engaging actively with investee companies to understand their management ethos and to seek sustainable returns.
Here are some examples of this engaging in operation during the year ended
Coca-Cola
Objective
To understand better any changes to Coca- Cola's human capital strategy since the Trump administration's executive orders, as well as its revised ESG commitments focusing on water scarcity and plastic packaging.
Background
Coca-Cola, a leading global non-alcoholic beverage company, has seen growth through innovation, marketing, and strategic refranchising. Human capital is key to product innovation, while water is a material input into the production process.
Engagement Details and Analysis
Coca Cola has identified water security and plastic packaging as priority natural capital issues. We view the company's 2030 water security strategy as best in class and its investment in recycled PET production as beneficial to both financial productivity (via cost efficiency) as well as sustainability. Following the Trump administration's executive orders, the company is also aligning its human capital strategies with legal standards and merit principles, maintaining focus on talent as crucial for success. The company demonstrates financial benefits from optimising human capital and addressing supply chain human rights issues. Female representation has increased across various levels, with significant leadership roles filled internally. Although the company has reduced external reporting on non-financial metrics, we encouraged continued disclosure of metrics critical to assessing financial productivity.
Outcome
Positive engagement reaffirming our investment thesis. Future engagements will monitor progress towards 2030 goals.
IQVIA
Objective
To discuss IQVIA's diversity in clinical trials, cybersecurity, AI applications, and governance issues.
Background
IQVIA, a contract research consultant in healthcare, speeds up the time to market for new drugs (a key bottle neck in the value chain) by enabling more efficient and effective clinical trials. Highly diverse patient databases and the ability to leverage data at scale is a key part of its economic moat.
Engagement Details and Analysis
Diversity action plans for clinical trials are becoming the expectation, and due to ties to clinical outcomes are viewed as separate from the current administration's push to remove Diversity, Equity & Inclusion (`DEI'). We view it positively that IQVIA's use of diversity action plans is outstripping industry growth, driven in part by large pharma and full CRO customers who could enact the plans themselves but are looking to outsource. In addition, the company appears to be managing cybersecurity well; incremental improvements are being made to strengthen security for new direct-to-patient offerings. We see this as critical given the vast amount of sensitive data that the company manages. IQVIA did not provide many specific details on oversight actions being taken to manage AI risks, but we see no reason to view IQVIA as poorly positioned. Commentary on director time commitments and the existing special meeting threshold, two focuses of this year's AGM, were clear, but we found the company's answers on compensation to be lacking.
Outcome and future milestones
Overall, we are satisfied that IQVIA is managing its ESG-related risks well and that their strategy is supportive of our investment thesis. We plan to closely monitor the executive compensation portion of this year's AGM.
Voting
The Board gives discretion to Lazard to exercise the Company's voting rights. Lazard exercises the Company's voting rights in respect of investee companies with the aim of maximising sustainable shareholder value as a long-term investor and voting in the best interests of the Company's shareholders. Lazard undertakes regular due diligence with investee company managements on matters such as strategy, operational performance, capital allocation, and material sustainability considerations. Lazard is a signatory to the
The proxy voting instructions given by Lazard on behalf of the Company between
Lazard voting on behalf of Mid Wynd
Instruction Percentage For 80% Against 11% Abstain 1% Did not vote* 8%
* The Investment Manager's policy is to always maintain liquidity in their portfolio, therefore where a company prevents trading during their AGM, the Investment Manager will not vote.
Details of votes Against
______________________________________________________________________________ |Instruction|Percentage|Reason | |___________|__________|_______________________________________________________| |Against |69% |Oppose director re-elections and other director related| | | |reasons | |___________|__________|_______________________________________________________| |Against |19% |Other - including capitalisation, routine business and | | | |take-over related | |___________|__________|_______________________________________________________| |Against |12% |Environmental and social reasons | |___________|__________|_______________________________________________________|
Industry and social responsibility initiatives
Further information on the industry-wide collaborations Lazard participates in and the social responsibility initiatives it engages with can be found on the
(https://www.lazardassetmanagement.com/gl/ sustainable-investment) .
Engagement Period: Q1 2025
All opinions expressed herein are as of the published date. For illustrative purposes only.
Key Performance Indicators (`KPIs')
The performance of the Company is reviewed regularly by the Board and it uses a number of KPIs to assess the Company's success in meeting its objective. The KPIs which have been established for this purpose are set out below:
-- Net asset value performance compared to the MSCI All Country World Index
(GBP)
The Board monitors the performance of the net asset value per share against that of the MSCI All Country World Index (GBP).
-- Share price performance
The Board monitors the performance of the share price of the Company to ensure that it reflects the performance of the net asset value.
Discrete annual total returns
Year ended
Net asset value Share price MSCI All Country World Index (GBP)
30 June
2021 24.3% 27.3% 24.6%
2022 (7.5)% (9.5)% (4.2)%
2023 5.6% 1.0% 11.3%
2024 13.9% 17.1% 20.1%
2025 (5.1)% (5.9)% 7.2%
Source: LSEG Datastream.
Further details of the 2025 returns can be found within the Chairman's Statement and Investment Manager's Review contained in the Annual Financial Report for year ended
-- Share price (discount)/premium to net asset value
The Board recognises that it is in the interests of shareholders to maintain a share price as close as possible to the net asset value (`NAV') per share. The policy of the Board is to limit the discount or premium to a maximum of 2 per cent of NAV in normal circumstances. The Company may issue shares at such times as demand is not being met by liquidity in the market and buy back shares when there is excess supply. This policy has proved consistently effective in generating value within the Company and helping to manage market liquidity. The Company's shares were trading at a discount of 2.5% to NAV at the year end. At all times the Company sought to manage the discount within the target parameters and achieved an average discount of 2% over the year. While the Company declares its NAV daily, markets are open almost twenty four hours per day and this accounts for the wider range in premium and discount in 2025 shown on the following chart. During the year the Company did not issue any shares and bought back 9,465,000 shares (representing 19.0% of the issued share capital (excluding
The Company held a further General Meeting on
Although the Company incurs modest costs for operating the policy and when renewing shareholder authority, issuance at a premium and buying back at a discount under the policy more than compensates and is consistently accretive to NAV.
-- Ongoing charges
The Board is mindful of the ongoing costs to shareholders of running the Company and monitors operating expenses on a regular basis. The Company's ongoing charges ratio as at
-- Dividend per share
In addition to seeking capital growth, the Board also continues to pursue its flexible dividend policy. It monitors the revenue returns generated by the Company during the year, its revenue reserves and expected future revenue and then determines the dividends to be paid. Revenue earnings during the year decreased by 31% compared to the prior financial year. As explained previously, the appointment of Lazard has led to a change in investment approach and lower dividend income from our investee companies. These companies reinvest a greater proportion of their cashflow back into their businesses where they expect to generate high internal rates of return, thereby increasing their capital value and future profits and dividends. The majority of Mid Wynd's revenues are earned in foreign currencies and changes in exchange rates can impact the sterling value of the Company's earnings. Subject to approval of the final dividend by shareholders, a total dividend of
Dividends paid in respect of the year ended
Principal Risks and Risk Management
The Board has carried out a robust assessment of the principal and emerging risks facing the Company. Following consideration of the principal risks, the Board has concluded that there are no emerging risks facing the Company that should be added to the principal risks set out below.
The Board has developed a risk map which sets out the principal risks faced by the Company and the controls established to mitigate these risks. This is an ongoing process and the risk map, including any emerging risks, is formally reviewed at least every six months. The Board pays particular attention to those risks that might threaten the long-term performance or viability of the Company. Further information on the Company's risk management process is set out in the corporate governance section on pages 42 and 43 of the Annual Financial Report.
A summary of the key areas of risk, their movement during the year and their mitigation is set out below:
Movement Principal risk Mitigation/control
Strategic risks
The investment objective and policy
of the Company is set by the Board
and is subject to ongoing review
and monitoring in conjunction with
the Investment Manager.
The Company's investments are
selected on their individual merits
and the performance of the
portfolio may not track the wider
Investment strategy market (represented by the MSCI All
Country World Index). The Board
No change The management of the portfolio of believes this approach will
the Company may not achieve its continue to generate good long-term
investment objective and policy. returns for shareholders. Risk is
diversified through a broad range
of investments being held. The
Investment Manager has a proven
track record of managing the Global
Quality Growth strategy which the
Company's portfolio is managed in
accordance with. The Board
discusses the investment portfolio
and its performance with the
Investment Manager at each Board
meeting.
Market risks
Market prices
The Company invests in a portfolio The Board considers that the risk
of international quoted equities. of market volatility is mitigated
The prices of equity investments by the longer-term nature of the
may be volatile and are affected investment objective and the
by a wide variety of factors many Company's closed-ended structure,
of which can be unforeseen and are and that such investments should be
outwith the control of the a source of positive returns for
investee company or the Investment shareholders over the long-term.
Manager. These price movements
could result in significant losses Risks are diversified through
for the Company. having a range of investments in
the portfolio with exposure to
Current events such as the ongoing various geographies and sectors.
wars in Ukraine and the Middle
East have negatively impacted The Investment Manager has a proven
economic growth and may negatively track record and reports regularly
affect investment values leading to the Board on market
to the inability to buy, sell or developments. At each Board meeting
value assets at a competitive the Investment Manager is asked to
price, thus having an adverse provide explanations for the
effect on the Company's results. performance of the portfolio and
the rationale for any changes in
The Company's functional currency equity investments, sectors and
and that in which it reports its geographies. Any use of derivatives
results is Sterling. However, the to manage market risks requires
No change majority of the Company's assets, Board approval.
liabilities and income are
denominated in currencies other The Board and its Investment
than Sterling. Consequently, Manager have regular discussions to
movements in exchange rates will assess the likely impact of
affect the Sterling value of those inflation rates on global
assets. The country in which a economies, corporate profitability
portfolio company is listed is and asset prices.
furthermore not necessarily where
it earns its profits and movements The Board have assessed the Trust's
in exchange rates on overseas exposure to currency rates during
earnings may have a more the year to 30 June 2025 , and
significant impact upon a discussed the advantages and
portfolio company's valuation than disadvantages of introducing
a simple translation of that currency hedging. This is reviewed
company's share price into by the Board on a periodic basis.
Sterling. The Company does not
generally hedge its currency The Investment Manager takes
exposures and changes in exchange material ESG risks into account
rates may lead to a reduction in when making investment decisions,
the Company's NAV. as such risks can affect the
prospects of a business. The
Climate change, and the politics Company invests in a broad
around climate change, could portfolio of businesses with
impair the operations of operations spread geographically,
individual investee companies, which should limit the impact of
potential investee companies, climate change events.
their supply chains and their
customers.
The Company relies on the services
of the Company Secretary and
Investment Manager to monitor
ongoing compliance with relevant
regulations, accounting standards
and legislation. The Company
Secretary and Investment Manager
also appraise the Board of any
prospective changes to the legal
Legal and regulatory risk and regulatory framework so that
any requisite actions can be
Changes to the requirements of the planned.
framework of regulation and
legislation (including rules The Board receives quarterly
relating to listed closed-end compliance reports from the
investment companies), within Investment Manager, the Alternative
which the Company operates, could Investment Fund Manager (`AIFM'),
No change have a material adverse effect on Company Secretary and
the ability of the Company to Administrator, and the Depositary
carry on its business and maintain confirming compliance with
its listing. A change in the tax regulations. These reports also
rules applicable to investment highlight any matter that the
trusts, such as the introduction relevant compliance team feel
of capital gains tax, could affect should be brought to the Board's
the viability of investment attention.
trusts.
The Company is a member of the
Association of Investment Companies
(the `AIC'). The AIC monitors
regulatory change on behalf of its
members and keeps the investment
trust sector informed on this.
Furthermore, the AIC promotes
investment trust interests in any
consultations on proposed
regulatory change.
Operational risks
Reliance on third-party service
providers
The Company has no employees and
all of the Directors have been
appointed on a non-executive
basis; all operations are
outsourced to third-party service Experienced third-party service
providers. Failure by any service providers are employed by the
provider to carry out its Company under appropriate terms and
obligations to the Company in conditions and with agreed service
No change accordance with the terms of its level specifications. The Board
appointment, to protect against receives regular reports from its
breaches of the Company's legal service providers and reviews the
and regulatory obligations such as performance of its key service
data protection or to perform its providers at least annually.
obligations to the Company at all
as a result of insolvency, fraud,
breaches of cybersecurity,
failures in business continuity
plans or other causes, could have
a material adverse effect on the
Company's operations.
Reliance on key personnel
The Lazard investment team is led
The Company's portfolio is managed by two key individuals, the global
by the Investment Manager and in equity fund managers, each of whom
particular the fund management has worked for Lazard for many
No change team which has direct years and has a successful track
responsibility for portfolio record. The fund managers are
selection. Any change in relation supported by a wider investment
to the investment executives may team.
adversely affect the performance
of the Company.
Further information on risks and the management of them are set out in note 20 of the notes to the financial statements on pages 69 to 72 of the Annual Financial Report.
Viability Statement
In accordance with the
In reviewing the Company's viability, the Board considered the Company's business model, the principal risks and uncertainties, including geopolitical risks, volatility of inflation and interest rates and the ensuing market volatility as well as climate change risks. The Company invests in listed securities and has a liquid portfolio.
The Board further considered the continued operation of the Company's buyback programme, as a discount control mechanism, in its viability assessment. It is assumed by the Board that the liquid nature of the portfolio means that investments can be sold as necessary to fund share buybacks.
In considering the Company's prospects over the next five years, the Directors have assumed that Lazard will, on behalf of the Company, continue to follow the Company's investment objective, that the Company's performance will continue to be attractive to shareholders, and that the Company will continue to meet the requirements to retain its status as an investment trust.
The Company is authorised to trade as an investment company and has the associated tax benefits. Any change to the Company's tax arrangements could affect the Company's viability as an effective investment vehicle.
The Board considered a five year forecast and a number of stress test scenarios in connection with a sustained fall in markets. The Board also considered the Company's ongoing income and expenses, the buyback programme and the liquidity of the Company's portfolio to ensure that the Company will be able to meet its liabilities as they fall due.
The conclusion of this review is that the Board has 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 years.
Duty to Promote the Success of the Company
How the Directors discharge their duties under s172 of the Companies Act
Under section 172 of the Companies Act 2006, the Directors have a duty to act in good faith and to promote the success of the Company for the benefit of its shareholders as a whole, and in doing so have regard to:
a) the likely consequences of any decision in the long-term;
b) the interests of the company's employees;
c) the need to foster the company's business relationships with suppliers, customers and others;
d) the impact of the company's operations on the community and the environment;
e) the desirability of the company maintaining a reputation for high standards of business conduct; and
f) the need to act fairly as between members of the company.
As an externally managed investment trust, the Company has no employees or physical assets. Our shareholders, our investee companies, our key external service provider, the Investment Manager, and other professional service providers, such as the AIFM, Company Secretary and Administrator, Depositary, Registrar, Auditor, Corporate Broker, Tax Adviser and any lenders are all considered to fall within the scope of section 172.
Whilst certain responsibilities are delegated, the Board retains responsibility for promoting the success of the Company; the Directors' responsibilities are set out in the schedule of matters reserved for the Board and the terms of reference of its committees, all of which are reviewed regularly by the Board.
The Company's culture and values, as described on page 21 of the Annual Financial Report, have been established by the Board to manage its key business relationships. The Company's approach on anti-bribery and prevention of tax evasion can be found on page 42 of the Annual Financial Report and on the Company's website at midwynd.com.
Engagement with key stakeholders
Stakeholders Benefits of engagement How the Company engages
with Stakeholders
To achieve its objective
of promoting the success
of the Company, for the
benefit of the
shareholders, the Board
approaches engagement from
two angles - how the Board
communicates its strategy
and performance to
shareholders and potential
investors and how it
addresses feedback/
communications received
from shareholders and
potential investors.
Engagement with
shareholders and potential
investors is both by the
Board and the Company's
Investment Manager.
Through the publication of
the annual financial
reports, the half-yearly
reports, monthly
factsheets, RNS
announcements and updates
to the Company's website,
shareholders are kept
informed of developments
in Company strategy as
well as Company
performance and portfolio
activities. The Board has
also engaged Kepler
Intelligence to publish
regular updates on
different aspects of the
investment strategy and
Kepler report back to the
Board with readership
statistics and engagement.
The Investment Manager
The Board is responsible presents at conferences
for promoting the success and webinars throughout
of the Company for the the year. The Annual
benefit of the General Meeting presents a
shareholders, taken as a further opportunity for
whole, having regard to shareholders to meet the
the matters listed above Board and Investment
and its stakeholders. Manager in person.
Communicating with During the year ended 30
shareholders and potential June 2025, the Company
Shareholders and potential investors is essential to contacted all registered
investors ensure the Board is fully shareholders to encourage
aware of shareholder them to sign up for
requirements so that it updates on the Trust via
can respond to evolving the Company's website.
shareholder needs. It is Potential investors can
also important that the also subscribe in the same
Company communicates its way. This allows the
strategy and performance Company to engage directly
regularly and effectively with shareholders and
to shareholders to ensure potential investors and
there continues to be share updates on the
demand for the Company's investment strategy and
shares. forthcoming shareholder
events like webinars and
podcasts.
The Board receives regular
feedback on shareholder
meetings from the
Company's broker, the
Investment Manager and,
where appropriate, the
Chairman. Any
communications from
shareholders and potential
investors are reviewed and
discussed by the Board at
Board meetings to ensure
that shareholder views are
taken into consideration
as part of any decisions
taken.
Shareholders and potential
investors are encouraged
to raise questions and
communicate with the
Chairman and the
Investment Manager either
through the Company's
website or by attending
and asking questions at
the AGM.
The Board considers
communication with
shareholders and potential
investors an important
function and Directors are
always available to
respond to shareholder
queries. For further
information see `Relations
with shareholders' on page
42 of the Annual Financial
Report.
The Board, with the
support of its Management
Engagement with the Engagement Committee,
Company's Investment regularly reviews the
Manager is necessary to: performance of the
Investment Manager to
-- evaluate its ensure that services
performance provided to the Company
against the are managed efficiently
Company's stated and effectively for the
investment benefit of the Company's
objective and to shareholders.
understand any
risks or The Board meets formally
opportunities this with the Investment
may present; Manager at quarterly Board
-- ensure the meetings. The Investment
Investment Manager Manager presents a review
operates within of the quarter and any
parameters set by pertinent information on
the Board; the portfolio and its
-- ensure the Board transactions. Informal
understands key calls and ad hoc meetings
Investment Manager performance issues may also occur throughout
to inform strategy the year, especially at
and enable good times of heightened market
communication with volatility.
shareholders;
-- provide the Board The Board reviews and
with assurances discusses plans for the
that the future marketing, strategy
Investment and development of the
Manager's internal Company with the
controls are Investment Manager.
operating
effectively; and Reports on the internal
-- ensure the controls operated by the
Investment Investment Manager to
Manager's approach safeguard the Company's
to the management assets and to ensure
of environmental, transactions are
social and materially correct are
governance (`ESG') received from the
issues accords Investment Manager and
with the Board's reviewed by the Board and
values. Audit Committee as
appropriate.
As an investment company,
all services are
outsourced to third-party
service providers.
In addition to investment
management, other
outsourced services The AIFM, Company
include the AIFM, Company Secretary and
Secretary and Administrator have
Administrator, the frequent interaction with
Depositary, the Broker, the key service providers
the Registrar, the and their performance is
Company's Tax Adviser, the continually monitored
Auditor and any lender throughout the year.
when applicable.
The Management Engagement
The Company has detailed Committee annually reviews
the parameters within the performance of key
which authority has been service providers, along
delegated and set service with their fee levels, and
Other third-party service levels to monitor service provides recommendations
providers provider performance. to the Board as required.
Engagement is important to As and when appropriate,
ensure that: third party providers
present to the Board.
-- all service
providers are Annual assurance reports
delivering are received to assist the
services in review of the internal
accordance with control environments of
their service the AIFM, Company
level agreements; Secretary and
-- any operational Administrator and the
issues are Depositary and Registrar.
discussed with the
Board; and
-- the Board receives
appropriate
assurances that
the providers'
internal controls
are operating
effectively.
The Company's success
relies on its choice of
investments and the The Board sets the
performance of those investment objective and
investments. discusses stock selection
and asset allocation with
Engagement by the the Investment Manager at
Investment Manager with each Board meeting. The
the investee companies has Board also receives
two principal aims: reports from the
Investment Manager on
-- to aid the engagement with investee
Investment Manager companies.
to understand
investee The Investment Manager
companies, the engages with the investee
risks and companies on an on-going
Investee companies opportunities basis.
associated with
them and the The Board discusses with
factors which Lazard Asset Management
drive their how Environmental, Social
performance so as and Governance (`ESG')
to make better factors are taken into
investment account when selecting and
decisions: and retaining investments for
-- to drive positive the Company. The Board
change in investee recognises the importance
companies through of ESG in the investment
active process.
stewardship. The
aim of such Lazard Asset Management
engagement is to endorses the UK
improve Stewardship Code.
performance and
hence shareholder
returns.
Board discussions and decisions
Key discussions and decisions made by the Board since the last Annual Financial
Report:
Topic Background & discussion Decision
It was decided this
strategy was working as
required and the Board
continued to give
authority as required. The
Company has been
particularly active,
during this period, to
ensure that the Company's
shares trade at a narrow
The Board discussed the discount to NAV,
on-going strategy of share benefiting existing
issuance and buyback to shareholders. To ensure
assist in controlling the the Company had sufficient
share premium/discount to shareholder authority to
NAV for the benefit of continue to operate the
Share issuance and buyback existing shareholders. discount control mechanism
and share premium (which seeks to maintain a
cancellation The Board discussed the share price within 2% of
cancellation of the full the Company's NAV), and
share premium account and reduce discount
the creation of a special volatility, the Board
reserve to be used, for resolved to seek
example, to carry out additional authority from
further buybacks and/or shareholders to continue
pay dividends. to buy back the Company's
shares at two General
Meetings. The resolutions
were approved at both
General Meetings by
majorities of over 91.1%.
The resolution to cancel
the full share premium
account was approved by
99.9% of shareholders.
It was decided to contact
all registered
The Board discussed the shareholders to allow the
benefits of contacting all Company to engage directly
registered shareholders to with shareholders and
Shareholder engagement encourage them to sign up potential investors and
for updates on the Trust share updates on the
via the Company's website. investment strategy and
forthcoming shareholder
events like webinars and
podcasts.
The Board held regular
discussions with the
Marketing and Distribution
The Board discussed the teams at Lazard and has
marketing and distribution requested regular updates
of the Company to ensure from the Company's Broker
that this continues to on the activities being
Marketing and Distribution align with the management undertaken. Various
strategy adopted and initiatives were completed
appeals to a wider during the year to June
shareholder base. 2025 in respect of these
areas, including the
launch of a new website
and branding for the
Company.
Having considered the
option to use gearing the
Board decided that there
was no requirement in the
The Board discussed the short-term. The future use
Gearing current policy and whether of gearing by the Company
gearing should be employed will be kept under review
by the Company. by the Board, recognising
that the benefit to
shareholders needs to
outweigh the associated
costs.
A specialist headhunter
was engaged during the
previous year with the
remit of seeking
candidates from a broad
range of diverse
Director succession The Board discussed backgrounds whose skillset
succession of Directors. would complement existing
Board members. Following
completion of this
process, the Board
appointed Anulika Malomo
to the Board effective
from 24 October 2024.
Directors & diversity
The Directors of the Company and their biographical details are set out on pages 35 and 36 of the Annual Financial Report.
No Director has a contract of service with the Company.
All of the Directors are considered to be independent in character and judgement and, in the opinion of the Board, there are no relationships or conflicts of interest which are likely to affect the judgement of any Director.
The Board supports the recommendations of the Hampton-Alexander Review on gender diversity and the Parker Review on ethnic representation on Boards.
The Directors consider diversity, including balance of skills, knowledge, gender, social and ethnic backgrounds, cognitive and personal strengths and experience, amongst other factors when reviewing the composition of the Board.
The current Directors have a range of relevant business, financial and asset management skills and experience. The Directors believe that ensuring that the Board and its Committees are comprised of the best combination of individuals to promote the success of the Company for shareholders over the long term is the priority. However, it is conscious of the diversity targets set out in the FCA Listing Rules and the AIC Code in appointing appropriately diverse, independent non-executive directors who set the operational and moral standards of the Company and aims to have an appropriate level of diversity on the Board.
In accordance with Listing Rule 9.8.6R (9), (10) and (11) the Board has provided the following information in relation to its diversity as at
Number of Number of Number in Percentage of
Board Percentage of senior executive executive
members the Board positions on management3 management3
the Board
Men 3 60% 21 N/A N/A
Women 2 40% 12 N/A N/A
Not
specified/prefer 0 0% 0 N/A N/A
not to say
1
2
3 Not applicable as the Company does not have an executive management team.
__________________________________________________________________________________ | |Number | |Number of| |Percentage | | |of |Percentage|senior |Number in |of | | |Board |of the |positions|executive |executive | | |members|Board |on the |management2|management2| | | | |Board | | | |_____________________________|_______|__________|_________|___________|___________| |White British or other White |4 |80% |31 |N/A |N/A | |_____________________________|_______|__________|_________|___________|___________| |Mixed/Multiple ethnic groups |0 |0% |0 |N/A |N/A | |_____________________________|_______|__________|_________|___________|___________| |Asian/Asian British |0 |0% |0 |N/A |N/A | |_____________________________|_______|__________|_________|___________|___________| |Black/African/Caribbean/Black|1 |20% |0 |N/A |N/A | |British | | | | | | |_____________________________|_______|__________|_________|___________|___________| |Other ethnic group, including|0 |0% |0 |N/A |N/A | |Arab | | | | | | |_____________________________|_______|__________|_________|___________|___________| |Not specified/prefer not to |- |- |- |N/A |N/A | |say | | | | | | |_____________________________|_______|__________|_________|___________|___________|
1 The Chairman of the Board and Senior Independent Director are senior positions as defined by the Listing Rules. Although the Chairman of the Audit Committee is not a senior position as defined by the Listing Rules, in the absence of executive roles, the Company considers this role to be a senior position.
2 Not applicable as the Company does not have an executive management team.
Modern Slavery Act 2015
The Company does not fall within the scope of the Modern Slavery Act 2015 as its turnover is less than £36m. Therefore, no slavery and human trafficking statement is included in the Annual Financial Report.
For and on behalf of the Board,
Chairman
Statement of Directors' Responsibilities in respect of the Annual Financial Report and the Financial Statements
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Financial 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 have elected to prepare the financial statements in accordance with
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 each of the financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been followed,
subject to any material departures being disclosed and explained in the
financial statements; and
-- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
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 enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, a Directors' Report and Corporate Governance Statement, and a Directors' Remuneration Report that complies with that law and those regulations.
The financial statements are published on our website, midwynd.com, maintained by the Company's Investment Manager. Responsibility for the maintenance and integrity of the corporate and financial information relating to the Company on this website has been delegated to the Investment Manager by the Directors. Legislation in the
We confirm that to the best of our knowledge:
(a)
the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities and financial position of the Company as at
(b) in the opinion of the Directors, the Annual Financial Report taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's position and performance, business model and strategy; and
(c) the Strategic Report includes a fair 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.
For and on behalf of the Board,
Chairman
Financial Statements
Statement of Comprehensive Income
For the year ended 30 June
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments
held at fair value through - (20,732) (20,732) - 49,019 49,019
profit or loss
Currency (losses)/gains - (69) (69) - 61 61
Income 3,763 - 3,763 5,650 110 5,760
Investment management fee (147) (1,327) (1,474) (134) (1,207) (1,341)
Other expenses (619) (257) (876) (665) (218) (883)
Net (loss)/return before 2,997 (22,385) (19,388) 4,851 47,765 52,616
finance costs and taxation
Finance costs of borrowings - - - (2) (21) (23)
Net (loss)/return on ordinary 2,997 (22,385) (19,388) 4,849 47,744 52,593
activities before taxation
Taxation on ordinary (478) 71 (407) (448) (71) (519)
activities
Net (loss)/return on ordinary 2,519 (22,314) (19,795) 4,401 47,673 52,074
activities after taxation
Net (loss)/return per ordinary 5.54p (49.08)p (43.54)p 8.00p 86.66p 94.66p
share
The total column of this statement is the profit and loss account of the Company.
All revenue and capital items in this statement derive from continuing operations.
The net return for the year disclosed above represents the Company's total comprehensive income.
Statement of Financial Position
As at 30 June
2025 2024
£'000 £'000
Non-current assets
Investments held at fair value through profits or loss 303,478 398,094
Current assets
Debtors 660 1,950
Cash and cash equivalents 4,068 5,742
4,728 7,692
Creditors
Amounts falling due within one year (705) (1,692)
Net current assets 4,023 6,000
Total net assets 307,501 404,094
Capital and reserves
Called up share capital 3,320 3,320
Capital redemption reserve 16 16
Share premium 242,115 242,115
Capital reserve 57,234 152,673
Revenue reserve 4,816 5,970
Shareholders' funds 307,501 404,094
Net asset value per ordinary share 760.96p 810.22p
These financial statements were approved by the Board of Directors and signed on its behalf on
Chairman
Statement of Changes in Equity
For the year ended30 June 2025 Share Capital Share Capital redemption Revenue Shareholders' capital premium reserve1,2 reserve2 funds reserve £'000 £'000 £'000 £'000 £'000 £'000 Shareholders' funds at 1 July 3,320 16 242,115 152,673 5,970 404,094 2024 Net loss on ordinary - - - (22,314) 2,519 (19,795) activities after taxation Repurchase of shares into - - - (73,125) - (73,125) Treasury Dividends paid - - - - (3,673) (3,673) Shareholders' funds at 30 3,320 16 242,115 57,234 4,816 307,501 June 2025 For the year ended 30 June 2024 Share Capital Share Capital redemption Revenue Shareholders' capital premium reserve1,2 reserve2 funds reserve £'000 £'000 £'000 £'000 £'000 £'000 Shareholders' funds at 1 July 3,320 16 242,115 196,730 6,845 449,026 2023 Net return on ordinary - - - 47,673 4,401 52,074 activities after taxation Repurchase of shares into - - - (91,730) - (91,730) Treasury Dividends paid - - - - (5,276) (5,276) Shareholders' funds at 30 3,320 16 242,115 152,673 5,970 404,094 June 2024
1
Capital reserve as at
2 The Company may pay dividends from both the capital reserve and the revenue reserve.
Statement of Cash Flows
For the year ended 30 June
2025 2025 2024 2024
£'000 £'000 £'000 £'000
Net cash outflow from operations before (3,193) (2,649)
dividends and interest
Dividends received from investments 3,748 5,672
Interest received 21 133
Interest paid - (23)
3,769 5,782
Net cash inflow from operating activities 576 3,133
Cash flow from investment activities
Purchase of investments (68,655) (375,073)
Sale of investments 143,623 463,853
Realised currency (losses)/gains (65) 65
Net cash generated from investing 74,903 88,845
activities
Cash flow from financing activities
Repurchase of shares to Treasury, net of (73,474) (93,200)
costs
Dividends paid (3,673) (5,276)
Net cash outflow from financing activities (77,147) (98,476)
Net decrease in cash and cash equivalents (1,668) (6,498)
Cash and cash equivalents at start of the 5,742 12,243
year
Decrease in cash in the year (1,668) (6,498)
Currency losses on cash and cash (6) (3)
equivalents
Cash and cash equivalents at end of the 4,068 5,742
year
Notes to the Financial Statements
1. Accounting policies
The financial statements are prepared on a going concern basis under the historical cost convention modified to include the revaluation of investments.
The financial statements have been prepared in accordance with the Companies Act 2006, applicable
In order to better reflect the activities of the Company and in accordance with guidance issued by the AIC, supplementary information which analyses the profit and loss account between items of a revenue and capital nature has been presented in the Statement of Comprehensive Income.
Financial assets and financial liabilities are recognised in the Company's Statement of Financial Position when it becomes a party to the contractual provisions of the instrument.
No significant estimates or judgements have been made in the preparation of the financial statements.
The Directors consider the Company's functional currency to be Sterling as the Company's shareholders are predominantly based in the
1. Income
2025 2024
£'000 £'000
Income from investments
Overseas dividends 3,583 5,030
UK dividends 159 597
3,742 5,627
Other income
Bank interest 21 133
Total income 3,763 5,760
Total income comprises:
Dividends and UK interest from financial assets designated at fair 3,742 5,627
value through profit or loss
Other income 21 133
Total income 3,763 5,760
1. Dividends paid and proposed
2025 2024
2025 2024
£'000 £'000
Amounts recognised as distributions in the year:
Previous year's final dividend 4.15p 3.95p 1,960 2,253
Previous year's special dividend - 1.70p - 969
First interim dividend 3.85p 3.85p 1,713 2,054
Total dividend 8.00p 9.50p 3,673 5,276
Set out below are the total dividends paid and payable in respect of the
financial year. The revenue available for distribution by way of dividend
for the year is £2,519,000 (2024: £4,401,000).
2025 2024
2025 2024
£'000 £'000
Dividends paid and payable in respect of the year:
First interim dividend 3.85p 3.85p 1,713 2,054
Proposed final dividend 4.50p 4.15p 1,654 1,960
Total dividend 8.35p 8.00p 3,367 4,014
1. Net return per ordinary share
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
Net return on ordinary 5.54p (49.08)p (43.54)p 8.00p 86.66p 94.66p
activities after taxation
Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation for the financial year of £2,519,000 (2024: £4,401,000) and on 45,463,998 (2024: 55,010,567) ordinary shares, being the weighted average number of ordinary shares in issue (excluding
Capital return per ordinary share is based on the net capital loss on ordinary activities after taxation for the financial year of £22,314,000 (2024: gain £47,673,000) and on 45,463,998 (2024: 55,010,567) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
1. Non-current assets - investments held at fair value through profit or loss
Investments in securities are financial assets designated at fair value through profit or loss on initial recognition in accordance with FRS 102. The following tables provide an analysis of these investments based on the fair value hierarchy as described below which reflects the reliability and significance of the information used to measure their fair value.
The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:
Level 1 - investments using unadjusted quoted prices for identical instruments in an active market;
Level 2 - investments whose fair value is based on inputs other than quoted prices that are either directly or indirectly observable;
Level 3 - investments whose fair value is based on inputs that are unobservable (i.e. for which market data is unavailable).
Year ended 30 June 2025 Year ended 30 June 2024 £'000
£'000
Quoted (Level 1) 303,478 398,094
Total financial asset 303,478 398,094
investments
Year ended 30 June 2025 Year ended 30 June 2024 £'000
£'000
Opening book cost 346,596 398,145
Fair value adjustment 51,498 40,793
Opening valuation 398,094 438,938
Purchases as cost 68,543 375,186
Disposals - proceeds (142,427) (465,049)
(Losses)/gains on (20,732) 49,019
investments
Closing valuation 303,478 398,094
Closing book cost 279,290 346,596
Fair value adjustment 24,188 51,498
303,478 398,094
The purchases and sales proceeds figures above include transaction costs of £46,000 on purchases (2024: £80,000) and £32,000 on sales (2024: £117,000), making a total of £78,000 (2024: £197,000).
The Company received £142,427,000 (2024: £465,049,000) from investments sold in the year. The book cost of these investments when they were purchased was £135,849,000 (2024: £426,735,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
All investments are considered level 1. There have been no transfers between levels during the year.
1. Net asset value per ordinary share
The net asset value per ordinary share and the net assets attributable to the ordinary shareholders at the year end were as follows:
2025 2025 2024 2024
Net asset value per Net assets Net asset value per Net assets
share share
£'000 £'000
Ordinary shares 760.96p 307,501 810.22p 404,094
During the year the movements in the assets attributable to the ordinary
shares were as follows:
2025 2024
£'000 £'000
Total net assets as 1 July 404,094 449,026
Total recognised (losses)/gains for the year (19,795) 52,074
Repurchase of shares into Treasury (73,125) (91,730)
Dividends paid (3,673) (5,276)
Total net assets at 30 June 307,501 404,094
Net asset value per ordinary share is based on net assets as shown above and on 40,409,356 (2024: 49,874,356) ordinary shares, being the number of ordinary shares in issue at the year end.
1. Reconciliation of net return before finance costs and taxation to cash
generated from operations before dividends and interest
2025 2024
£'000 £'000
Net return before finance costs and taxation (19,388) 52,616
Losses/(gains) on investments held at fair value through 20,732 (49,019)
profit or loss
Currency losses/(gains) 69 (61)
Decrease/(increase) in accrued income and other debtors 94 (79)
Dividend income (3,748) (5,672)
Interest received (21) (133)
(Decrease)/increase in creditors (524) 218
Overseas tax suffered (407) (792)
Corporation tax refunded - 273
Net cash outflow operations before dividends and interest (3,193) (2,649)
1. Transactions with the Investment Manager and related parties
The investment management fees payable to Lazard and the Company's former investment manager, Artemis are disclosed in the Statement of Comprehensive Income on page 57 of the Annual Financial Report. The amount outstanding to Lazard at
Fees payable during the year to the Directors and their interests in shares of the Company are considered to be related party transactions and are disclosed within the Directors' Remuneration Report on pages 44 to 46 of the Annual Financial Report.
1. Annual Financial Report
This Annual Financial Report announcement does not constitute the Company's statutory accounts for the years ended
The audited Annual Financial Report for the year ended
The Annual General Meeting of the Company will be held on Thursday
For further information, please contact:
Juniper
Company Secretary
Email: cosec@junipartners.com
Enquiries: 0131 378 0500
