REG-Aberforth Geared Value & Income Trust Plc: Half-year Financial Report
28/01/2026 07:02
Aberforth Geared Value & Income Trust plc
Interim Results for the six months to 31 December 2025
The following is an extract from the Company's second Half Yearly Report and
Financial Statements for the six months to 31 December 2025. The Half Yearly
Report is expected to be posted to shareholders by 6 February 2026.
Members of the public may obtain copies from Aberforth Partners
LLP, 14 Melville Street, Edinburgh EH3 7NS or from its website:
www.aberforth.co.uk/trusts-and-funds/aberforth-geared-value-income-trust-plc.
A copy will also shortly be available for inspection at the National Storage
Mechanism at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
FINANCIAL HIGHLIGHTS (SUMMARY)
Total returns for the six months to 31 December 2025
Total Assets 0.0%
Ordinary Share NAV -1.5%
Ordinary Share Price +2.7%
ZDP Share NAV +3.5%
ZDP Share Price +6.5%
Refer to Note 2, Alternative Performance Measures, and the Glossary
Dividend Declared
First interim dividend for the year ending 30 June 2026 of
1.56p per Ordinary Share. This is 4.0% higher than the
previous year’s 1.50p.
The first interim dividend has an ex-dividend date of 5 February 2026, record
date of 6 February 2026 and pay date of 9 March 2026.
The Company
Aberforth Geared Value & Income Trust plc (the Company or "AGVIT") is a closed
ended investment company. It has a fixed life of seven years from launch to 30
June 2031 and its shares are traded on the London Stock Exchange's Main
Market. The Company has appointed Aberforth Partners LLP as the investment
managers ("the Managers").
Investment Objective
The Company's investment objective is to provide Ordinary Shareholders with
high total returns, incorporating an attractive level of income, and to
provide ZDP Shareholders with a pre-determined Final Capital Entitlement of
160.58 pence on the Planned Winding Up Date of 30 June 2031.
CHAIRMAN’S STATEMENT
Introduction
This is the second interim report of Aberforth Geared Value & Income Trust plc
(AGVIT). It covers the six months to 31 December 2025.
The period unfolded against a backdrop of strong equity markets around the
world. Concerns about a costly trade war abated as markets drew reassurance
from a string of agreements reached by the US with its international trading
partners. Sentiment was further supported by, perhaps temporary, easing of
geopolitical risk, as efforts to resolve the conflicts in Ukraine and Gaza
continued. Elsewhere, during the period, optimism surrounding artificial
intelligence provided additional momentum to stockmarkets.
While the UK market lacks significant exposure to technology companies, the
FTSE All-Share still delivered strong returns, ending 2025 at a record high.
This performance was driven by its larger companies, which are less exposed to
concerns about UK politics and the outlook for the domestic economy than are
its smaller companies. Smaller companies have felt the weight of this
despondency more heavily. The returns of AGVIT and of its opportunity base,
the Deutsche Numis Smaller Companies Index (excluding investment companies)
(DNSCI (XIC)), have lagged the FTSE All-Share. While the stockmarket has
neglected the DNSCI (XIC)’s constituents, overseas companies and private
equity have not. Momentum in M&A transactions has been sustained with the
takeover premiums and exit multiples paid clearly demonstrating the
opportunity that AGVIT is targeting in the small cap universe.
Review of Performance
While equity returns have been positive, it has been a frustrating period for
the performance of the UK’s smaller companies and AGVIT’s portfolio. This
contrasts with the resilience of the Company’s income performance, which is
described in more detail below.
Portfolio performance
* AGVIT’s Total Asset Total Return, which measures its ungeared
portfolio performance, was zero in the six month period ending 31 December
2025.
* For reference, the DNSCI (XIC) delivered a total return of 5.3%
in the period. The FTSE All-Share index, which is dominated by the larger UK
listed companies, recorded a total return of 13.7%.
* The Managers’ Report explains how the investment environment
has affected AGVIT’s performance and examines the various factors that
influenced its return.
NAV and share price performance
* The performance of the Ordinary Shares is affected by the gearing
provided by the ZDP Shares. In the six months to 31 December 2025, the
portfolio’s capital performance was below the hurdle of the rising
entitlement of the Zero Dividend Preference Shares (ZDPs). Accordingly, the
Ordinary Share NAV Total Return was -1.5% in the six months to 31 December
2025.
* The share price discount of the Ordinary Shares to their net
asset value narrowed over the period from 16.2% at 30 June 2025 to 13.1% at 31
December 2025. This influenced the Ordinary Share Price Total Return of 2.7%.
* The ZDP Shares NAV Total Return rose at a rate consistent with
the 7.0% annual increase in their entitlement. The ZDP share price was at a
4.6% premium to NAV at 31 December 2025. The projected final cumulative cover
of the ZDP Shares was 2.0 times at 31 December 2025 and was unchanged from the
start of the reporting period.
Income performance
* The portfolio’s capital performance contrasts with a good
income experience. Even with all the worries about the performance of the UK
economy, the Company’s Investment Income from Revenue rose 4.8% in the six
months to 31 December 2025. This translates into a Revenue Return per Ordinary
Share of 3.26p.
* This was flattered somewhat by the favourable timing of some
ordinary dividends and by a special dividend, but underlying income growth
from investments was still healthy at 3.0%. This outcome was above the
Managers’ estimates at the start of the year, which underlines the
resilience of AGVIT’s investment portfolio and bodes well for capital
performance in due course.
First interim dividend
Against the backdrop of higher investment income compared with the
corresponding period in the previous year, the Board is pleased to announce a
first interim dividend of 1.56p per Ordinary Share. This is 4.0% higher than
the previous year’s 1.50p. Investors will recall that the Ordinary
Shareholders enjoy rights to all income generated by the portfolio.
The first interim dividend will be paid on 9 March 2026 to Ordinary
Shareholders on the register as at close of business on 6 February 2026.
The ex dividend date is 5 February 2026.
The Company operates a Dividend Reinvestment Plan.
Details of the plan are available from Aberforth Partners LLP or on their
website, www.aberforth.co.uk
.
Board Changes
As I indicated in my Annual Report, Jane Tufnell decided not to stand for
election as a Director at the Annual General Meeting on 28 October 2025.
Upon conclusion of the Annual General Meeting, June Jessop was appointed as an
independent non-executive Director. She has attended Board meetings since
October and is chair of the Remuneration & Nomination Committee and a member
of the Audit Committee. June has worked in the investment management industry
for over 30 years, gaining broad experience in portfolio management, client
relationship, business development and general management roles. June is also
a non-executive director with AVI Global Trust plc.
The Board also announced that Lesley Jackson became Senior Independent
Director on 28 October 2025.
Outlook
The impressive performance of the FTSE All-Share over recent months suggests
that the UK’s larger companies have overcome the “big picture” issues of
macro-economics and politics that seem still to be influencing subdued
investor sentiment towards Britain’s smaller companies. I take encouragement
from the renewed interest in larger companies, since I have observed this
filter down into the smaller company world in previous cycles.
Smaller companies are undeniably more exposed to the vagaries of the economic
cycle but they also have a record of resilience, which contrasts starkly with
the unfairly low valuations currently ascribed to them by the stockmarket. The
Managers’ Report develops on this anomaly and describes a positive outlook
for AGVIT’s investee companies through consideration of their strong balance
sheets and robust cash generation. These positive attributes come through
clearly in the Board’s regular discussions with the Managers about
individual holdings. Another external validation of the portfolio’s
fundamental strengths and attractive valuations can be seen in the sustained
high level of takeover activity within the small cap space. I expect this is
likely to continue so long as the stockmarket shuns the opportunity.
The Company’s prospects do not rely on M&A. It owns excellent businesses
that are growing their dividends. This has driven the rise in AGVIT’s first
interim dividend, which we have announced today, and in due course should
support the portfolio’s capital growth. There is also scope for capital
growth embedded in the unusually low valuations of the portfolio’s holdings,
which should close in on longer term averages over time. For the Ordinary
Shares, this progress would be magnified by the gearing from the ZDP Shares.
Another structural advantage offered by AGVIT is its fixed life, which
addresses the share price’s discount to net asset value by giving the
opportunity to realise value at close to net asset value on planned
winding-up.
The Board and Managers, who have continued to add to their personal
shareholdings, therefore believe that AGVIT’s portfolio and capital
structure can deliver on the investment objective for the benefit of both
classes of shareholder over the Company's life.
Finally, my fellow directors and I welcome the views of shareholders and are
available should you wish to discuss these with us. My email address is noted
below. Once again, thank you for your support.
Angus Gordon Lennox
Chairman
27 January 2026
Angus.GordonLennox@aberforth.co.uk
MANAGERS’ REPORT
Performance
In the six months to 31 December 2025, AGVIT’s total assets total return was
0.0%. The total assets total return measures the performance of the investment
portfolio and is unaffected by AGVIT’s gearing. It is therefore comparable
with the 5.3% total return of the investment universe of small UK quoted
companies, as measured by the DNSCI (XIC). Larger UK quoted companies
performed more strongly, with the FTSE All-Share achieving a return of 13.7%
in the six month period.
Investment background
The valuations of small UK quoted companies have faced two challenges over
recent months. One is more relevant to those companies that earn their profits
within the UK economy, the other to those companies reliant on overseas
markets.
* The former group, the domestics, comprises consumer-oriented
companies, such as retailers, leisure businesses and media companies. It
accounts for around 53% of the revenues of DNSCI (XIC) constituents. These
companies were most severely affected by Brexit and by lockdown during the
pandemic. They operated resiliently in the face of these challenges but were
confronted in 2025 by intensifying concerns about the UK government’s fiscal
situation. The Chancellor has struggled to achieve convincing fiscal headroom
as she contends with her own fiscal rules, manifesto commitments and the
internal politics of the Labour Party. The predicament was encapsulated by the
gyrations in gilt yields through 2025 and by the rising cost of government
debt here in comparison with the rest of the world: ten year gilt yields
started 2025 in line with those in the US but ended the year 31 basis points
higher. The UK private sector, already wary after the 2024 Budget, was
naturally cautious ahead of the 2025 Budget. It is likely that economic
activity suffered as, in a classic Ricardian fashion, households and
businesses held back on spending and investment. This was to the disadvantage
of the domestically oriented companies.
* The overseas facing companies tend to be industrial businesses
and account for the other 47% of the DNSCI (XIC)’s total revenues. They were
less affected by the pandemic and their profitability even benefited from the
EU referendum as sterling weakened in its aftermath. The disruption of supply
chains in the wake of the pandemic, along with the conflicts in Ukraine and
Gaza, were unhelpful, but these companies tended to enjoy good trading
conditions in recent years. That changed in April 2025 with Donald Trump’s
tariff announcements. Their longer lasting effects on global trade and broad
economic activity are as yet uncertain, but it is clear that businesses have
incurred near term headwinds in the form of higher costs and working capital
requirements. Consequently, the valuations of overseas facing companies within
the DNSCI (XIC) have also come under pressure.
These twin pressures have hampered the valuation of smaller companies,
particularly those whose profits are perceived to be more sensitive to broader
economic activity. This has affected AGVIT’s performance since many of the
most attractively valued smaller companies today are in the more economically
sensitive sectors of the stockmarket. Indeed, the market's near term fears of
cyclicality can often be what presents the Managers with investment
opportunity as they take a longer term view of a business's underlying
qualities and profit potential.
In recent years, gloom about the UK's politics and economics affected
sentiment towards the UK stockmarket in general, with the valuations of both
small and large companies below their long term averages. That started to
change in 2025. The very strong total returns from large companies took their
valuations above the long term average, even as smaller companies continued to
languish. A common explanation for this performance divergence rests in the
different sector profiles of the large and small company universes. Among the
stronger performers in the FTSE All-Share in 2025 were the banks, defence,
mining, telecoms and life assurance, which are all sectors with a lower
representation in the DNSCI (XIC). However, this explanation struggles when
the banks are considered further. Most of the banks are heavily reliant on the
domestic UK economy. They are literally geared into the health of British
businesses and households, the same sort of exposure that many smaller
companies have.
Smaller companies are being penalised for their very size and relative
illiquidity, rather than for fundamental reasons. This suspicion is backed up
by analysis of the dividend characteristics of the DNSCI (XIC) and the FTSE
All Share. For the first time since the global financial crisis, the dividend
yield of the DNSCI (XIC) is higher than the FTSE All-Share’s. This is
despite small companies’ average dividend cover being above that of large
companies and despite small companies’ balance sheets being stronger than
those of large companies. Moreover, dividend growth of the DNSCI (XIC) has
remained superior to that of the FTSE All-Share. Since 2015 – the year
before the EU referendum and therefore a fair starting point – small company
dividend growth has been 63%, whereas large company dividend growth has been
29%. Since 2019 – the year before the pandemic – small companies have
grown their dividends by 23%, whereas large companies have seen their
aggregate dividends decline by 6%.
The superior dividend growth from smaller companies is evident in almost all
time periods and supports the growing dividends paid by AGVIT. These dividends
also benefit from how the Managers invest AGVIT’s capital. An important
facet of the process is the “value roll”, in which capital is rotated from
companies with low upside to the Managers’ target prices into companies with
high upsides. This rotation implies that capital is moved from companies with
low dividend yields into those with high dividend yields, a dynamic that
enhances the income earned by the portfolio over time.
Influences on performance and portfolio characteristics
In the six months to 31 December 2025, AGVIT's total assets total return was
0.0%. The DNSCI (XIC)’s was 5.3%. The following
paragraphs provide context and explanation for the portfolio’s performance
over the six months, as well as setting out aspects of the portfolio’s
positioning that are likely to influence future performance.
Portfolio characteristics 31 December 2025 31 December 2024
AGVIT DNSCI (XIC) AGVIT DNSCI (XIC)
Number of companies 66 352 69 350
Weighted average market capitalisation £691m £1,225m £659m £1,019m
Weighting in “smaller small” companies* 42% 17% 44% 21%
Weighting in companies with net cash*** 47% 26% 31% 30%
Portfolio turnover over 12 months 27% - ** -
Price earnings (PE) ratio (historical) 10.6x 13.8x 9.6x 13.0x
Dividend yield (historical) 5.7% 3.4% 5.6% 3.4%
Dividend cover (historical) 1.6x 2.1x 1.9x 2.2x
*Members of the DNSCI (XIC) that are not also members of the FTSE 250; ** Not
available owing to launch date; ***Tracked Universe
Economic cyclicality
As described above, AGVIT’s returns have been influenced by concerns about
economic activity both domestically and overseas. Many of the most
attractively valued companies within the DNSCI (XIC) at present are perceived
as sensitive to the economic cycle. The Managers are prepared to look beyond
these near term concerns, putting more store in the resilience of business
models, records of profit progress from cycle to cycle and strength of balance
sheets. Such bouts of concern are not unusual in Aberforth’s 35 years.
Economic cyclicality has hampered recent performance, but it is the
Managers’ experience that the stockmarket tends to under-estimate the
resilience of smaller companies and thus creates the conditions for a strong
recovery in due course.
Value style
The Managers follow a value investment philosophy. They calculate target
valuations for existing and potential investments. These are influenced by
fundamental analysis of the companies, judgement informed by experience, and
reference to other relevant valuations in equity markets or corporate
activity. Growth of profits is an important component of target valuations,
but the Managers find that stockmarket valuations are often too generous in
their assumptions of the sustainability and pace of growth.
To gauge the style effect on AGVIT’s performance, the Managers use analysis
by the London Business School (LBS). This defines value narrowly in terms of
low price to book ratios, rather than in the broader fashion undertaken by the
Managers. Therefore, while useful, the LBS approach is an imperfect measure of
style effects, particularly over short periods. The LBS analysis suggests that
value stocks within the DNSCI (XIC) under-performed the index as a whole in
the six months to 31 December 2025 and so style effects would have been
negative for AGVIT’s performance.
Size, within the DNSCI (XIC)
The DNSCI (XIC) includes all main listed stocks in the UK with market
capitalisations below c.£2.5bn. It therefore has an extensive overlap with
the FTSE 250 and includes many mid caps, which the Managers refer to as
“larger small” companies. However, AGVIT has a relatively high exposure to
the DNSCI (XIC)’s “smaller small” companies, in common with the
Managers’ other portfolios. This positioning reflects the more attractive
valuations available down the market capitalisation scale, which are
demonstrated in the Valuations section later in this report. Analysis by LBS
shows that the return from “smaller small” companies exceeded that from
“larger small” companies in the six months and so AGVIT benefited from its
size positioning.
Corporate activity
The pattern is a familiar one of recent years – a lot of takeovers targeting
small UK quoted companies, a lot of buy-backs and few IPOs.
On M&A, the recommended takeovers of two companies in the DNSCI (XIC) were
announced and completed in the six months to 31 December 2025. On top of
those, there were offers outstanding for another ten companies at the period
end. Of these twelve deals, the bidders were most often trade buyers, with
private equity houses less active. The bidders were overwhelmingly from
overseas, attracted by the presently low stockmarket valuations of small UK
quoted companies. The average premium of the bid price to the undisturbed
share price before announcement of the deal was 41%, which is above the longer
term average premium for control of 25-30%. AGVIT had investments in five of
the twelve takeover targets. Three of the five deals were announced before 30
June 2025 and so the takeover premiums benefited performance in the previous
financial year. M&A was therefore only a modest boost to returns in the six
months to 31 December 2025.
Takeovers can be an effective means by which the value in AGVIT’s portfolio
is realised. However, there is an important caveat. The low valuations of
smaller companies mean that takeovers may be proposed on unattractive terms
and that investors’ interests might be better served by rejecting the
takeover approach. The risk is exacerbated by boards and some shareholders
yielding too quickly to takeover interest, no doubt succumbing to the gloomy
sentiment towards the UK. The Managers attempt to mitigate the risk by
engaging with boards to support their independence if the terms of a bid are
unattractive or to improve the terms. This engagement is helped by the often
significant stakes that AGVIT and Aberforth’s other clients hold in investee
companies. At 31 December 2025, 11% of AGVIT’s portfolio was invested in
companies that had attracted takeover interest over the previous 18 months,
but where the approaches had not developed into formal bids. In several of
these situations, the Managers were consulted by the boards of the target
companies and, if the standalone option promised superior returns, supported
their independence.
The depressed valuations of small UK quoted companies mean that the IPO market
remains subdued. There were just two floatations of a reasonable size and
eligible for the DNSCI (XIC) in 2025. The Managers view this dearth of
activity as a temporary phenomenon and a function of prevailing valuations.
Recent regulatory change, to the listing rules and prospectus regime, are
likely to encourage IPOs once the valuation basis of the small UK quoted
companies recovers.
While the DNSCI (XIC) has not been refreshed by IPOs, it is experiencing an
influx of companies that are choosing to move from AIM to the Main Market.
AGVIT does not invest in AIM quoted companies except in limited circumstances.
These include when an AIM company makes a public announcement of its intention
to move to the Main List. Over the past 18 months, 15 AIM quoted companies
announced an intention to relist. Of these, six completed the process in 2025
and were included in the DNSCI (XIC) on its annual rebalancing on 1 January
2026. Of the 15 companies, AGVIT has invested in two. These businesses were
subject to the Managers’ usual investment process of research and
engagement. Their valuations were attractive and consistent with the existing
portfolio’s.
Income
The UK’s economic and political uncertainties contributed to a lacklustre
capital performance in the six months to 31 December 2025, but the dividend
performance from small UK quoted companies remained resilient. AGVIT’s
income experience is shown in the following table, which splits the
portfolio’s 66 holdings into categories determined by the most recent
dividend action.
Nil Payer Cutter Unchanged Payer Increased Payer
6 8 22 30
The drag on AGVIT’s income from the 8 cutters was out-weighed by the 30
companies that increased their dividends and by the receipt of one special
dividend. This good dividend experience drove an increase in AGVIT’s
Investment Income over the six months to 31 December 2025, which allowed the
Board to increase the first interim dividend by 4.0%.
The average historical dividend yield of AGVIT’s holdings at 31 December
2025 was 5.7%, which compares with 3.4% for the DNSCI (XIC). The portfolio’s
average dividend cover was 1.6x, against 2.1x of the DNSCI (XIC). The dividend
cover reflects the impact of macro economic uncertainty on profits, together
with the higher dividends as companies looked through the near term
uncertainty and took confidence from strong balance sheets. The Managers’
forecasts suggest that dividend cover will rise in 2026 and 2027.
Significant stakes
Engagement with the boards of investee companies has always been a crucial
component of the Managers’ investment process. It is particularly relevant
at present in view of the high rate of takeover activity among smaller
companies and of the recent regulatory changes to the listing rules and
prospectus regime. The latter are intended to make the UK stockmarket a more
attractive place to list, but they come at a cost by undermining governance
protections for investors in UK listed companies.
The Managers’ scope to engage effectively is supported by their ability to
take significant stakes of up to 25% in issued share capital across their
client base. At 31 December 2025, AGVIT had five holdings in which
Aberforth’s clients had a stake of more than 20% and 20 holdings in which
the stake exceeded 10%. The 20 holdings had a combined portfolio weight of
21%.
Significant stakes bring increased influence but come with a downside in the
form of illiquidity – reducing these positions by selling into the
stockmarket can be difficult. However, there are compensating factors. First,
the increased influence, coupled with patience and support, has contributed to
improved investment outcomes – significant stakes have enhanced the
performance of the Managers’ portfolios over time. Second, illiquidity has
been manageable. Exiting significant stakes has been facilitated by M&A or by
renewed investor appetite as prospects for the business improve. Third,
AGVIT’s closed-end structure is ideally suited to holding significant stakes
– patient support from investors is often required as boards work to improve
business performance. The Managers are confident that their approach to
engagement and ability to take significant stakes have enhanced their
clients’ returns over time and will continue to do so.
Balance sheets
The following table sets out the balance sheet profile of AGVIT’s portfolio
and of the Managers’ Tracked Universe. This subset of
the DNSCI (XIC) represents 99% by value of the index as a whole and is made up
of the 246 companies that the Managers follow closely.
Weight in companies with: Net cash Net debt/EBITDA < 2x Net debt/EBITDA > 2x Other*
Portfolio 2025 47% 37% 14% 2%
Tracked Universe 2025 26% 43% 24% 7%
*includes loss-makers and lenders.
Balance sheets remain robust both within the portfolio and among small caps in
general. Compared with a year ago, the portfolio’s exposure to companies
with stronger balance sheets has risen: the weighting in companies with net
cash and leverage below two times was 82% at the end of 2024 and 84% at the
end of 2025. This shift reflects both the cash generation of the investee
companies and portfolio activity. The stockmarket’s lack of interest in
smaller companies means that stronger balance sheets are not being reflected
in higher valuations. This lack of discernment has brought more companies into
the Managers’ valuation range and has contributed to the higher exposure to
companies with strong balance sheets.
The strength of balance sheets raises the question of how capital should be
deployed. This is a frequent topic of engagement for the Managers with the
boards of AGVIT’s investee companies. The highest priority should be organic
investment to maintain the viability of a business and allow it to grow. This
is especially pertinent at present since it seems that the economic and
political uncertainty has discouraged companies from larger capital
expenditure projects. After organic investment, a coherent and appropriate
dividend policy is essential, optimally one that allows ordinary dividends to
grow in real terms through economic cycles. After that, acquisitions may be
considered, but these should be assessed against the benchmark of lower risk
special dividends or share buy-backs. Many small companies bought back shares
in 2025, including 26 companies within AGVIT’s portfolio.
Value roll and portfolio turnover
The main influence on AGVIT’s portfolio turnover in any period is usually
the stockmarket’s appetite for small UK quoted companies. If prices and
valuations are rising, the upsides to the Managers’ target prices are likely
to be narrowing. All else being equal, this would encourage the rotation of
AGVIT’s capital from companies with lower upsides to those with higher.
Portfolio turnover is defined as the lower of purchases and sales divided by
the average portfolio value. Over the 12 months to 31 December 2025, turnover
was 27% and was influenced by the period’s significant takeover activity.
Valuations
Recent Managers’ Reports have described how AGVIT is subject to a triple
valuation discount. This referred to AGVIT’s portfolio being on lower
valuations than small UK quoted companies, which were on lower valuations than
UK large companies, which were on lower valuations than world equities. The
table below updates the analysis.
Price earnings (PE) ratio: 35 year average 31 December 2023 31 December 2024 31 December 2025
World equities* 16.0x 16.0x 17.0x 18.1x
FTSE All-Share 15.3x 10.3x 14.6x 17.6x
Smaller companies** 13.5x 10.3x 11.9x 12.2x
Aberforth/AGVIT portfolio 12.0x*** 7.9x*** 9.6x 10.6x
* Source: Bloomberg; Panmure Liberum
** DNSCI (XIC) to 2013 then Tracked Universe
*** Data for Aberforth’s longest standing client
Twelve months on, the triple discount remains in place, and yet there has been
movement. The historical PEs of all four groups have risen, but the most
significant move over the past twelve months has been among large UK
companies. The PE of the FTSE All-Share has jumped from 14.6x to 17.6x and now
sits above its long term average of 15.3x. Meanwhile, the PE of smaller
companies, and of AGVIT’s portfolio in particular, remain below the long
term averages. As noted in the opening section of this report, it is unclear
at the fundamental level why the valuation gap between small and large
companies should have opened up to this degree. In view of the fundamental
qualities of smaller companies – stronger balance sheets and higher growth
– their lower valuations offer the opportunity of stronger future share
price returns.
The following table turns to forward looking valuations. It uses the
Managers’ favoured valuation metric, EV/EBITA (enterprise value to earnings
before interest, tax and amortisation). Ratios are set out for the portfolio,
the Tracked Universe and certain subdivisions of the Tracked Universe. The
profits underlying the ratios are based on the Managers’ forecasts for each
company that they track. The bullet points following the table summarise its
main messages.
EV/EBITA 2024 2025 2026
AGVIT’s portfolio 7.8x 8.0x 7.3x
Tracked Universe (246 stocks) 11.2x 11.1x 9.7x
- 34 growth stocks 19.8x 17.5x 15.5x
- 212 other stocks 10.5x 10.5x 9.1x
- 113 stocks > 60% revenue within UK 11.5x 11.2x 10.1x
- 113 stocks > 60% revenue overseas 10.8x 10.7x 9.2x
- 110 stocks > £600m market cap 12.0x 11.8x 10.4x
- 136 stocks < £600m market cap 9.0x 9.0x 7.8x
* AGVIT’s EV/EBITA ratio is higher for 2025 than for 2024, which
implies that profits earned by portfolio companies fell slightly in 2025. This
is consistent with the slowdown in activity through the second half of the
year as concern about the Budget grew. The decline in the ratio in 2026
compared with 2025 suggests that, based on the Managers’ bottom-up
estimates, profits will increase again in 2026.
* The average EV/EBITA multiples of the portfolio are lower than
those of the Tracked Universe. This has been a consistent feature over the
years of portfolio’s run by the Managers and is consistent with their value
investment style.
* The portfolio’s 8.0x EV/EBITA ratio for 2025 is much lower than
the average multiple of 14.7x at which takeover offers for DNSCI (XIC)
constituents have been made in the past four years.
* Each year, the Managers identify a cohort of growth stocks within
the DNSCI (XIC). The 34 growth stocks for 2026 are on much higher multiples
than both the portfolio and the rest of the Tracked Universe.
* The “smaller small” companies within the DNSCI (XIC) remain
more attractively valued than the “larger smalls”. This explains why
AGVIT’s portfolio has a relatively high exposure to the “smaller
smalls”.
* For more of the period since the EU referendum, overseas facing
companies have enjoyed higher valuations than have their peers that are more
reliant on the UK’s domestic economy. The gap between the two narrowed in
2025 as sentiment towards the overseas cohort was affected by the tariffs.
Outlook & Conclusion
The tariff announcements in April convulsed stockmarkets. The full effects on
global trade and economic activity are still unclear, particularly when the
status of some of the tariffs remains subject to legal challenge. What is
clear is that companies, both in AGVIT’s portfolio and more widely, are
incurring extra cost when exporting to the US. This is another factor in the
broad theme of deglobalisation, which has developed since the pandemic as
geopolitical tensions have intensified. The implication for AGVIT is a more
uncertain outlook for its cohort of investee companies that generate their
revenues outside the UK.
Despite the tariff shock, equity valuations have recovered well from the April
nadir. Returns have been particularly good for the group of companies seen to
be benefiting from AI. As 2025 ended, the hopes and valuations for the AI
leaders were very high, but some caution is merited. The business models of
the US technology giants are no longer capital light since AI development
necessitates significant investment in computing power and infrastructure.
More broadly, the US economy is becoming increasingly reliant on AI, with
growth driven by the investment boom and with buoyant equity prices supporting
the wealth effect. Furthermore, it is not clear what the returns on the
investment will prove to be or who will emerge the eventual winners of the AI
arms race, as the US technology giants compete with each other and with
Chinese rivals. In the meantime, the effects of AI on companies more broadly
are as yet unclear. Some business models will be challenged and it is
important for the Managers to consider where these threats lie. On the other
hand, it is also important to consider the productivity gains that AI
promises. Despite what the relative valuations might suggest, the upside from
AI investment is unlikely to be confined to the companies currently deploying
the capital – it is plausible that AGVIT’s portfolio holdings can also
benefit.
The more significant near term influence on the fortunes of small UK quoted
companies is likely to be the direction of the UK economy. The immediate
challenges are the government’s fiscal position and a set of policies that
are likely to increase costs and the regulatory burden on the private sector.
These problems are well known and have contributed to the gloom surrounding
the valuations of small UK quoted companies. However, there are other more
positive dynamics at work, which tend to be overlooked at present and which
suggest that the often hysterical talk about the UK is overdone.
* The private sector in the UK has deleveraged meaningfully over
two decades – the ratio of private non financial debt to GDP is back to the
levels last seen in 2000. Financial risk today is therefore reduced and there
is the potential to re-leverage in the future. While many companies are
choosing to deploy surplus capital on share buy-backs at present, a pick-up in
investment would be good for growth of profits and the economy in general.
* The recent Budget,
while unhelpfully
late in the
year, was not
as threatening to
economic activity as
feared. The Chancellor
tested her fiscal
rules by deferring
most tax
increases until later
in the parliament.
This pragmatism gives
the economy breathing
space, especially
as government spending
does increase in
the near term.
One can debate
the merits of
such policies, but
at the margin
they bode well
for economic activity.
* Inflation in the UK remains stickier than elsewhere but does seem
to be on a downward path. This has given the Bank of England scope to reduce
interest rates, which again should be supportive of near term economic
activity.
So there is good reason to believe that the UK economy may turn out to be
better, or at least less bad, than commonly perceived. This would be
significant for the valuations of small UK quoted companies, especially the
more economically sensitive businesses since so little is expected of them.
The revaluation of larger companies in recent months – particularly the
banks – shows what is possible when sentiment turns. The opportunity is
encapsulated by small companies’ low valuations and high resilience.
Self-help, strong balance sheets and free cash generation are supporting
dividend growth and share buy-backs as we await improved trading conditions.
The attractiveness of this combination is being recognised by more than the
Managers. The elevated rate of M&A activity shows that other companies and
private equity, particularly from overseas, understand the value on offer
among the constituents of the DNSCI (XIC). At the same time, traditional
holders of UK equities, such as insurance companies and larger asset managers,
are being replaced on share registers by other sorts of investor. These are
typically smaller institutions or individuals, often again from overseas, who
share the Managers’ contrarian approach to investment and, amid a broad
opportunity set, have identified the value on offer among small UK quoted
companies.
The Managers' value investment philosophy, understanding of the investee
companies and active engagement are well suited to the current opportunity in
small UK quoted companies. Historically, these attributes have contributed to
superior returns for other funds run by Aberforth. The Managers are therefore
optimistic about the future performance of AGVIT's portfolio, particularly in
view of the attractiveness of investee companies' valuations at the present
time.
This optimism is further supported by AGVIT’s structural advantages. The
gearing from the ZDP Shares can enhance the investment performance of the
portfolio. It can also benefit growth in the dividends paid to AGVIT’s
Ordinary Shareholders. The underlying resilience of the investee companies
suggests that dividends can continue to grow. Finally, the closed-end nature
of an investment trust affords the Managers a longer term investment horizon,
allowing them to take advantage of concerns about illiquidity, to engage
constructively and to support investee companies. The aim here, as always, is
the improvement of investment returns for Shareholders.
Aberforth Partners LLP
Managers
27 January 2026
FINANCIAL HIGHLIGHTS
TOTAL RETURN PERFORMANCE
Period to 31 December 2025
Ordinary Share ZDP Share
Total Assets 1 NAV 2 Share Price 3 NAV 4 Share Price 5
------------ ------------ ------------ ------------ ------------
Six months 0.0% -1.5% 2.7% 3.5% 6.5%
Twelve months 5.0% 4.0% 5.4% 7.0% 8.0%
Since Inception (including launch costs) 18 2.6% -0.3% -12.5% 10.7% 15.0%
Since Launch (excluding launch costs) 18 4.3% 1.8% -12.5% 10.7% 15.0%
The ZDP Share NAV total return is on an Articles basis (see Glossary).
ORDINARY SHARE
Net Asset Value per Share Share Price Discount/ (Premium) 6,7 ZDP:Equity Gearing Ratio 9
Capital ------------ ----------- ------------ ------------
31 December 2025 93.8p 81.5p 13.1% 43.9%
30 June 2025 99.6p 83.5p 16.2% 40.0%
31 December 2024 95.9p 83.0p 13.4% 40.1%
At inception an Ordinary Share had a NAV of 100p and a ZDP:Equity Gearing
Ratio of 37.5%.
Revenue Return per Share Ordinary Dividends per Share Special Dividends per Share Retained Revenue Reserves per Share 16
Revenue ------------ ----------- ------------ ------------
Six months to 31 December 2025 3.26p 1.56p - 2.70p
Six months to 31 December 2024 3.24p 1.50p - 1.74p
Year to 30 June 2025 6.85p 5.00p 0.85p 1.00p
ZERO DIVIDEND PREFERENCE SHARE (ZDP SHARE)
Net Asset Value per Share Share Price Discount / (Premium) Return per Share Projected Final Cumulative Cover 13 Gross Redemption Yield 15
----------- ---------- ------------ ----------- ------------ ------------
31 December 2025 109.9p 115.0p (4.6)% 3.8p 2.0x 6.3%
30 June 2025 106.2p 108.0p (1.7)% 7.1p 2.0x 6.8%
31 December 2024 102.6p 106.5p (3.8)% 3.5p 2.0x 6.5%
At inception a ZDP Share had a NAV of 100p, a Projected Final Cumulative Cover
of 2.0x, and a Redemption Yield of 7.0%.
HURDLE RATES 10
Ordinary Shares Annualised Hurdle Rates to return ZDP Shares Annualised Hurdle Rates to return
100p Share Price Zero Value 160.58p Zero Value
---------- ------------ ------------ ------------ ------------
At 31 December 2025 4.3% 2.0% -12.5% -12.5% -61.4%
30 June 2025 3.6% 1.7% -11.8% -11.8% -58.3%
Inception 18 3.0% 3.0% -10.3% -10.3% -52.9%
REDEMPTION YIELDS & TERMINAL NAVs
(ORDINARY
SHARES) AS AT 31 DECEMBER 2025
Capital Growth (per annum) Annualised Redemption Yields 14 Dividend Growth (per annum)
-20.0% -10.0% +0.0% +10.0% +20.0% Terminal NAV 17
------------ ----------- ------------ ------------ ------------ ------------ ------------
-20.0% -42.4% -34.2% -25.7% -17.1% -8.4% 0.0p
-10.0% -24.9% -21.3% -16.6% -10.8% -4.0% 10.3p
+0.0% -0.1% 1.5% 3.7% 6.6% 10.4% 66.5p
+10.0% 15.3% 16.5% 18.0% 20.0% 22.7% 154.7p
+20.0% 28.5% 29.4% 30.6% 32.1% 34.2% 287.7p
The valuation statistics in the tables above are projected, illustrative and
do not represent profit forecasts. There is no guarantee these returns will be
achieved.
1-18 Refer to Note 2, Alternative Performance Measures, Glossary and
the Company’s Annual Report for the period ended 30 June 2025.
UK GAAP measures include Net Asset Value and Net Asset Value (ZDP), Revenue
Return per Share and Return Per Share as defined in the Glossary.
INTERIM MANAGEMENT REPORT
A review of the half year and the outlook for the Company can be found in the
Chairman’s Statement and the Managers’ Report.
Risks and Uncertainties
The Directors have a process for identifying, evaluating and managing the
principal and emerging risks faced by the Company. This process was in
operation during the six months to 31 December 2025 and continues in place up
to the date of this report. The Company's capital structure is such that the
underlying value of assets attributable to the Ordinary Shares is geared by
the rising capital entitlements of the ZDP Shares and accordingly the Ordinary
Shares should be regarded as carrying above average risk. The Company also has
a £2 million overdraft facility, which when utilised increases the level of
gearing. Mitigating factors in the Company's risk profile include its
relatively simple capital structure, its diversified portfolio of small UK
quoted companies, and outsourcing all of its main operational activities to
recognised, well established firms.
The principal risks faced by the Company relate to: significant fall in
capital performance; market risk factors affecting portfolio management and/or
investment performance; political and taxation changes outwith the Company's
control; structural conflicts of interest between the objectives of the
Ordinary and ZDP Shareholders; significant fall in revenue generation from the
portfolio; significant loss of investment management personnel; failure to
meet the continuing obligations associated with regulatory risks; and cyber
risk. An explanation of these risks and how they are managed can be found in
the Strategic Report contained within the 2025 Annual Report. These principal
risks and uncertainties continue to apply as disclosed in the 2025 Annual
Report and as updated by the Managers' Report in these interim statements.
Going Concern
The Audit Committee
has undertaken and
documented an assessment
of whether it is
appropriate for the
Company to adopt the going concern basis of accounting. This
assessment was for the period of at least 12 months from
the date of approval of the financial statements. The Committee reported the
results of its assessment to the Board.
The Company’s business activities, capital structure, planned life and
borrowing facility, together with the factors likely to affect its development
and performance, are set out in the 2025 Annual Report. In addition, the 2025
Annual Report includes the Company’s objectives, policies and processes for
managing its capital, its financial risk, details of its financial instruments
and its exposures to credit risk and liquidity risk. The Company’s assets
comprise mainly readily realisable equity securities, which, if necessary, can
be sold to meet any funding requirements, though short-term funding
flexibility can typically be achieved through the use of the bank overdraft
facility. The Directors are satisfied that the Company has adequate financial
resources to enable it to meet its day-to-day working capital requirements and
continue to adopt the going concern basis in preparing the financial
statements.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge:
(i) the condensed set of financial statements has been
prepared in accordance with Financial Reporting Standard 104 “Interim
Financial Reporting” and gives a true and fair view of
the state of affairs of the Company and of the assets, liabilities, financial
position and net return of AGVIT, as at 31 December 2025, as required by DTR
4.2.4R of the Disclosure Guidance and Transparency Rules.
(ii) the Half Yearly Report includes a fair review of
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events during the period to 31 December 2025 and their
impact on the financial statements together with a description of the
principal risks and uncertainties for the remaining six months of the year;
and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
disclosure of related party transactions and changes therein.
(iii) the Half Yearly Report, taken as a whole, is fair,
balanced and understandable and provides information necessary for
Shareholders to assess the Company’s performance, objective and strategy.
On behalf of the Board
Angus Gordon Lennox
Chairman
27 January 2026
The Income Statement, Reconciliation of Movements in Shareholders’ Funds,
Balance Sheet and Cash Flow Statement are set out below:-
INCOME STATEMENT
For the six months to 31 December 2025
(unaudited)
Revenue Capital Total
£’000 £’000 £’000
Realised net gains on sales - 3,151 3,151
Movement in fair value - (6,428) (6,428)
-------- -------- --------
Net losses on investments - (3,277) (3,277)
Investment income 3,859 247 4,106
Other income 18 - 18
Investment management fee (Note 3) (166) (387) (553)
Portfolio transaction costs - (106) (106)
Other expenses (209) - (209)
-------- -------- --------
Net return before finance costs and tax 3,502 (3,523) (21)
Finance costs:
Appropriation to ZDP Shares (Note 8) - (1,517) (1,517)
Interest expense and overdraft fee (1) (4) (5)
-------- -------- --------
Return on ordinary activities before tax 3,501 (5,044) (1,543)
Tax on ordinary activities - - -
-------- -------- --------
Return attributable to equity shareholders 3,501 (5,044) (1,543)
====== ======= =======
Returns per Ordinary Share (Note 5) 3.26p (4.70)p (1.44)p
On 27 January 2026, the Board declared a first interim dividend for the period
ending 30 June 2026 of 1.56p per Ordinary Share (2025 – 1.50p), which will
be paid on 9 March 2026.
INCOME STATEMENT
For the period 29 March 2024 to 31 December 2024
(unaudited)
Revenue Capital Total
£’000 £’000 £’000
Realised net gains on sales - 1,342 1,342
Movement in fair value - (6,043) (6,043)
-------- -------- --------
Net losses on investments - (4,701) (4,701)
Investment income 3,683 - 3,683
Other income 148 - 148
Investment management fee (Note 3) (165) (386) (551)
Portfolio transaction costs 1 - (776) (776)
Other expenses (183) - (183)
-------- -------- --------
Net return before finance costs and tax 3,483 (5,863) (2,380)
Finance costs:
Appropriation to ZDP Shares (Note 8) - (1,418) (1,418)
Interest expense and overdraft fee (1) (3) (4)
-------- -------- --------
Return on ordinary activities before tax 3,482 (7,284) (3,802)
Tax on ordinary activities (6) - (6)
-------- -------- --------
Return attributable to equity shareholders 3,476 (7,284) (3,808)
====== ======= =======
Returns per Ordinary Share (Note 5) 3.24p (6.79)p (3.55)p
1 Portfolio transaction costs in the period to 31 December 2024
includes £602,000 in respect of stamp duty incurred on the transfer of
securities to AGVIT on its launch. See the Company’s 2025 Annual Report for
more information.
INCOME STATEMENT
For the period 29 March 2024 to 30 June 2025
(audited)
Revenue Capital Total
£’000 £’000 £’000
Realised net gains on sales - 2,742 2,742
Movement in fair value - (3,804) (3,804)
-------- -------- --------
Net losses on investments - (1,062) (1,062)
Investment income 7,879 - 7,879
Other income 174 - 174
Investment management fee (Note 3) (320) (746) (1,066)
Portfolio transaction costs 1 - (847) (847)
Other expenses (369) - (369)
-------- -------- --------
Net return before finance costs and tax 7,364 (2,655) 4,709
Finance costs:
Appropriation to ZDP Shares (Note 8) - (2,859) (2,859)
Interest expense and overdraft fee (1) (4) (5)
-------- -------- --------
Return on ordinary activities before tax 7,363 (5,518) 1,845
Tax on ordinary activities (6) - (6)
-------- -------- --------
Return attributable to equity shareholders 7,357 (5,518) 1,839
====== ======= =======
Returns per Ordinary Share (Note 5) 6.85p (5.14)p 1.71p
1 Portfolio transaction costs in the period to 30 June 2025 includes
£602,000 in respect of stamp duty incurred on the transfer of securities to
AGVIT on its launch. See the Company’s 2025 Annual Report for more
information.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
For the six months to 31 December 2025
(unaudited)
Share Share Special Capital Revenue
capital Premium reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
Balance as at 30 June 2025 1,073 - 105,621 (5,518) 5,747 106,923
Return on ordinary activities after tax - - - (5,044) 3,501 (1,543)
Equity dividends paid (Note 4) - - - - (4,669) (4,669)
-------- -------- -------- -------- -------- --------
Balance as at 31 December 2025 1,073 - 105,621 (10,562) 4,579 100,711
====== ====== ====== ====== ====== ======
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
For the period 29 March 2024 to 30 June 2025
(audited)
Share Share Special Capital Revenue
capital Premium reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
Balance as at 29 March 2024 - - - - - -
Return on ordinary activities after tax - - - (5,518) 7,357 1,839
Equity dividends paid (Note 4) - - - - (1,610) (1,610)
Issue of Ordinary Shares 1,073 106,258 - - - 107,331
Ordinary Share issue costs - (592) - - - (592)
Share Premium cancellation - (105,621) 105,621 - - -
Cost of Share Premium cancellation - (45) - - - (45)
Issue of Redeemable Shares 50 - - - - 50
Redemption of Redeemable Shares (50) - - - - (50)
-------- -------- -------- -------- -------- --------
Balance as at 30 June 2025 1,073 - 105,621 (5,518) 5,747 106,923
====== ====== ====== ====== ====== ======
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
For the period 29 March 2024 to 31 December 2024
(unaudited)
Share Share Special Capital Revenue
capital Premium reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
Balance as at 29 March 2024 - - - - - -
Return on ordinary activities after tax - - - (7,284) 3,476 (3,808)
Equity dividends paid (Note 4) - - - - - -
Issue of Ordinary Shares 1,073 106,258 - - - 107,331
Ordinary Share issue costs - (592) - - - (592)
Share Premium cancellation - (105,616) 105,616 - - -
Cost of Share Premium cancellation - (50) - - - (50)
Issue of Redeemable Shares 50 - - - - 50
Redemption of Redeemable Shares (50) - - - - (50)
-------- -------- -------- -------- -------- --------
Balance as at 31 December 2024 1,073 - 105,616 (7,284) 3,476 102,881
====== ====== ====== ====== ====== ======
BALANCE SHEET
As at 31 December 2025
( unaudited )
Fixed assets 31 December 2025 £’000 30 June 2025 £’000 31 December 2024 £’000
Investments at fair value through profit or loss (Note 6) 143,515 147,998 143,332
-------- -------- --------
Current assets
Debtors 726 716 550
Cash at bank 783 1,049 400
-------- -------- --------
1,509 1,765 950
-------- -------- --------
Creditors (amounts falling due within one year)
Other creditors (65) (109) (111)
-------- -------- --------
(65) (109) (111)
-------- -------- --------
Net current assets 1,444 1,656 839
-------- -------- --------
Total assets less current liabilities 144,959 149,654 144,171
Creditors (amounts falling due after more than one year) ZDP Shares (Note 8) (44,248) (42,731) (41,290)
-------- -------- --------
TOTAL NET ASSETS 100,711 106,923 102,881
====== ====== ======
CAPITAL AND RESERVES: EQUITY INTERESTS
Share Capital: Ordinary Shares (Note 9) 1,073 1,073 1,073
Reserves:
Special reserve 105,621 105,621 105,616
Capital reserve (10,562) (5,518) (7,284)
Revenue reserve 4,579 5,747 3,476
-------- -------- --------
TOTAL SHAREHOLDERS’ FUNDS 100,711 106,923 102,881
====== ====== ======
Net Asset Value per Ordinary Share (Note 7) 93.83p 99.62p 95.85p
Net Asset Value per ZDP Share (Note 7) 109.94p 106.17p 102.59p
Approved and authorised
for issue by the
Board of Directors
on 27 January
2026 and signed
on its behalf by:
Angus Gordon Lennox
Chairman
CASH FLOW STATEMENT
For the six months ended 31 December 2025
( unaudited )
Six months to 31 December 2025 £’000 29 March 2024 to 31 December 2024 £’000 29 March 2024 to 30 June 2025 £’000
Net cash inflow from operating activities 3,334 2,603 5,979
Investing activities
Purchases of investments (19,464) (23,426) (33,742)
Sales of investments 20,538 7,363 16,608
-------- -------- --------
Cash inflow/(outflow) from investing activities 1,074 (16,063) (17,134)
-------- -------- --------
Financing activities
Proceeds from issue of Ordinary Shares - 2,651 2,651
Proceeds from issue of ZDP Shares - 12,182 12,182
Share issue costs paid - (969) (969)
Share premium cancellation costs paid - - (45)
Equity dividends paid (4,669) - (1,610)
Interest and fees paid (5) (4) (5)
-------- -------- --------
Cash (outflow)/inflow from financing activities (4,674) 13,860 12,204
-------- -------- --------
Change in cash during the period (266) 400 1,049
-------- -------- --------
Cash at the start of the period 1,049 - -
Cash at the end of the period 783 400 1,049
-------- -------- --------
SUMMARY NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Policies
The financial statements have been prepared on a going concern basis and in
accordance with the Financial Reporting Standard 104 and the AIC’s Statement
of Recommended Practice “Financial Statements of Investment Trust Companies
and Venture Capital Trusts”. The total column of the Income Statement is the
profit and loss account of the Company. All revenue and capital items in the
Income Statement are derived from continuing operations. No operations were
acquired or discontinued in the period. The accounting policies used for the
period ended 30 June 2025 have been applied and are set out in the 2025 Annual
Report. The Company was incorporated on 29 March 2024. Its first interim
reporting period was from 29 March 2024 to 31 December 2024. The Company’s
first full reporting period was from 29 March 2024 to 30 June 2025. These are
shown in the comparative figures.
2. ALTERNATIVE PERFORMANCE MEASURES
Alternative Performance Measures (APMs) are measures that are not defined
under the requirements of FRS 102. The Company believes that APMs, referred to
within “Financial Highlights”, provide Shareholders with important
information on the Company. These APMs are also a component of the internal
management reporting to the Board. A glossary of the APMs can be found below
and on pages 25 and 26 of the half year report.
3. INVESTMENT MANAGEMENT FEE
The Managers, Aberforth Partners LLP, receive an annual management fee,
payable quarterly in advance, equal to 0.75% of the Company's Total Assets.
The investment management fee is allocated 70% to capital and 30% to revenue.
4. DIVIDENDS
Six months to 31 December 2025 £’000 29 March 2024 to 31 December 2024 £’000 29 March 2024 to 30 June 2025 £’000
Amounts recognised as distributions to equity holders: In respect of the period to 30 June 2025:
First interim dividend of 1.50p (paid on 10 March 2025) - 1,610
Second interim dividend of 3.50p (paid on 28 August 2025) 3,757 - -
Special dividend of 0.85p (paid on 28 August 2025) 912 - -
-------- -------- --------
Total 4,669 - 1,610
-------- -------- --------
The first interim dividend for the year ending 30 June 2026 of 1.56p (2025:
1.50p) per Ordinary Share will be paid on 9 March 2026 to holders of Ordinary
Shares on the register on 6 February 2026. The ex dividend date is 5 February
2026. The first interim dividend has not been recorded in the financial
statements as at 31 December 2025.
Deducting the first interim dividend from the Company's revenue reserves at 31
December 2025 leaves revenue reserves of 2.70p per Ordinary Share.
5. RETURNS PER SHARE
Period ended: Six months to 31 December 2025 £’000 29 March 2024 to 31 December 2024 £’000 29 March 2024 to 30 June 2025 £’000
Net return £(1,543,000) £(3,808,000) £1,839,000
Weighted average Ordinary Shares in issue 107,331,000 107,331,000 107,331,000
-------- -------- --------
Return per Ordinary Share (1.44)p (3.55)p 1.71p
-------- -------- --------
Appropriation to ZDP Shares £1,517,000 £1,418,000 £2,859,000
Weighted average ZDP Shares in issue 40,249,000 40,249,0000 40,249,000
-------- -------- --------
Return per ZDP Share 3.77p 3.52p 7.10p
-------- -------- --------
6. INVESTMENTS AT FAIR VALUE
In accordance with FRS 102 and FRS 104, fair value measurements have been
classified using the fair value hierarchy.
Level 1 - using unadjusted quoted prices for identical instruments in an
active market.
Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable based on market data.
Level 3 - using inputs that are unobservable for which market data is
unavailable.
All investments are held at fair value through profit or loss. As at the
reporting dates all investments are traded on a recognised stock exchange and
have been classified as Level 1.
7. NET ASSET VALUE (“NAV”) PER SHARE
The Net Assets and the Net Asset Value per Share attributable to the Ordinary
Shares and ZDP Shares as at 31 December 2025 are as follows.
Ordinary Shares ZDP Shares Total Assets
Net assets attributable £100,711,000 £44,248,000 £144,959,000
Number of Shares 107,331,000 40,249,000 147,580,000
------------ ------------ ------------
Net Asset Value per Share (a) 93.83p 109.94p 98.22p
Dividend reinvestment factor 8 (b) 1.062892 - 1.044065
------------ ------------ ------------
NAV per Share on a total return basis at 31 December 2025 (c) = (a) x (b) 99.73p 109.94p 102.55p
NAV per Share on a total return basis at 30 June 2025 (d) 101.27p 106.17p 102.58p
------------ ------------ ------------
Total Return performance (c) ÷ (d) - 1 -1.5% 3.5% 0.0%
------------ ------------ ------------
8. ZERO DIVIDEND PREFERENCE SHARES
Period ended: 31 December 2025 £’000 30 June 2025 £’000 31 December 2024 £’000
Opening Balance 42,731 - -
Issue of ZDP Shares - 40,249 40,249
Capitalisation of issue costs of ZDP Shares - (377) (377)
Issue costs amortised during the period 23 43 22
Capital growth of ZDP Shares 1,494 2,816 1,396
------------ ------------ ------------
Closing Balance 44,248 42,731 41,290
------------ ------------ ------------
9. SHARE CAPITAL
31 December 2025
Shares £’000
Issued
Ordinary Shares of 1p each 107,331,000 1,073
ZDP Shares of 1p each 40,249,000 402
------------ ------------
Total issued and allotted 147,580,000 1,475
------------ ------------
There have been no changes in the issued share capital since the launch of the
Company on 1 July 2024. For further information on the launch and issue of
shares, refer to the Company's 2025 Annual Report.
10. Related Party Transactions
Under UK accounting standards, the Directors have been identified as related
parties and their fees and interests are disclosed in the 2025 Annual Report.
During the first six months of the current financial year, there have been no
transactions with related parties that have materially affected the financial
position or performance of the Company.
11. Further Information
The foregoing do not constitute statutory accounts of the Company (as defined
in section 434(4) of the Companies Act 2006). The financial information for
the period ended 30 June 2025 has been extracted from the statutory accounts,
which have been filed with the Registrar of Companies. The Auditor issued an
unqualified opinion on those accounts and did not make any statements under
section 498(2) or (3) of the Companies Act 2006. All information shown for the
period to 31 December 2025 is unaudited.
Certain statements in this report are forward looking. By their nature,
forward looking statements involve a number of risks, uncertainties or
assumptions that could cause actual results or events to differ materially
from those expressed or implied by those statements. Forward looking
statements regarding past trends or activities should not be taken as
representation that such trends or activities will continue in the future.
Accordingly, undue reliance should not be placed on forward looking
statements.
Glossary of UK GAAP Measures
Net Asset Value, also described as Shareholders’ Funds,
is the value of total assets less all liabilities. The Net Asset Value or NAV
per Ordinary Share is calculated by dividing this amount by the total number
of Ordinary Shares in issue.
Net Asset Value (ZDP Share) is the value of the
entitlement to the ZDP Shareholders. The Net Asset Value or NAV per ZDP Share
is calculated by dividing this amount by the total number of ZDP Shares in
issue.
Return per Share is the return in the period attributable
to the Ordinary Shares or to the ZDP Shares .
Revenue Return per Share is the revenue earned in the
period divided by the weighted average number of Ordinary Shares in Issue.
Glossary of Alternative Performance Measures
1. Total Assets Total Return
- represents the return of the combined funds of the Ordinary
Shareholders and ZDP Shareholders assuming that dividends paid to Ordinary
Shareholders were reinvested at the NAV per Ordinary Share at the close of
business on the day the Ordinary Shares were quoted ex dividend. Total Assets
less current liabilities as at 31 December 2025 was £144,959,000 and the
total number of shares in issue (Ordinary Shares plus ZDP Shares) was
147,580,000 producing a Total Assets per Share of 98.22p. Multiplying by the
dividend reinvestment factor of 1.044065 results in a Total Assets per Share
on a Total Return basis of 102.55p. The Total Assets Total Return for the six
months to 31 December 2025 was 0.0%, being the sum of the Total Assets per
Share at the end of the period, multiplied by the relevant dividend
reinvestment factor divided by the Total Assets per Share calculated on a
total return basis at the start of the period, expressed as a percentage (see
note 7).
2. Ordinary Share NAV Total Return
– represents the theoretical return on the NAV per Ordinary
Share, assuming that dividends paid to Shareholders were reinvested at the NAV
per Ordinary Share at the close of business on the day the shares were quoted
ex dividend. The NAV per Ordinary Share as at 31 December 2025 was 93.83p and
the dividend reinvestment factor was 1.062892. The Ordinary Share NAV Total
Return for the six months to 31 December 2025 was
-1.5%, being the Ordinary Share NAV at the end of the period, multiplied
by the relevant dividend reinvestment factor divided by the Ordinary Share NAV
calculated on a total return basis at the start of the period, expressed as a
percentage (see note 7).
3. Ordinary Share Price Total Return – represents the
theoretical return to an Ordinary Shareholder, on a closing market price
basis, assuming that all dividends received were reinvested, without
transaction costs, into the Ordinary Shares of the Company at the close of
business on the day the shares were quoted ex dividend. The Ordinary Share
price as at 31 December 2025 was 81.5p and the dividend reinvestment factor
was 1.073422. The Ordinary Share Price Total Return in the six months to 31
December 2025 was 2.7%, being the Ordinary Share price at the end of the
period, multiplied by the relevant dividend reinvestment factor divided by the
Ordinary Share price calculated on a total return basis at the start of the
period, expressed as a percentage.
4. ZDP Share NAV Total Return – represents the return on
the entitlement value of a ZDP Share. The ZDP Share NAV, on an Accounts basis,
at 31 December 2025 was 109.94p. The Accounts basis capitalises the expenses
associated with the issue of the ZDP Shares and amortises them over the
expected life of the ZDP Shares. The ZDP Share NAV, on an Articles basis, at
31 December 2025 was 110.71p. The ZDP Share NAV Total Return in the six months
to 31 December 2025 on an Articles basis was 3.5%, equivalent to six months
worth, calculated on a daily basis, of the annual gross redemption yield at
issue of 7.0% (see Notes 7 and 8).
5. ZDP Share Price Total Return – represents the return
to a ZDP Shareholder, on a closing market price basis. The ZDP Share price as
at 31 December 2025 was 115.0p. The ZDP Share Price Total Return for the six
months ended 31 December 2025 was therefore 6.5%, being the ZDP Share price at
the end of the period divided by the ZDP Share price at the start of the
period.
6. Discount is the amount by which the stockmarket price
per Share is lower than the NAV per Share. The discount is normally expressed
as a percentage of the NAV per Share.
7. Premium is the amount by with the stockmarket price per
Share exceeds the NAV per Share. The premium is normally expressed as a
percentage of the NAV per Share.
Other Glossary Terms
8. Dividend Reinvestment Factor is used to calculate total
return performance by including the effect of dividends from the Company. It
is calculated on the assumption that dividends paid by the Company were
reinvested into Ordinary Shares of the Company at the NAV per Ordinary Share
or the share price, as appropriate, on the day the Ordinary Shares were quoted
ex dividend. See note 7.
9. ZDP:Equity Gearing Ratio is calculated by dividing the
asset value attributable to the ZDP Shares by the asset value attributable to
the Ordinary Shares.
10. Hurdle Rate is the rate of capital growth per annum in
the Company’s investment portfolio to return a stated amount per Share at
the planned winding-up date.
11. Ongoing Charges represents the percentage per annum of
investment management fees and other operating expenses to the average
published Ordinary Shareholders’ NAV over the period.
12. Portfolio Turnover is calculated by summing the lesser
of purchases and sales over the relevant period divided by the average
portfolio value for that period.
13. Projected Final Cumulative Cover is the ratio of the
total assets of the Company, as at the calculation date, to the sum of the
assets required to pay the final capital entitlement of 160.58p per ZDP Share
on the planned winding-up date, future estimated investment management fees
charged to capital, and estimated winding-up costs.
14. Redemption Yield (Ordinary Share) is the annualised
rate at which projected future income and capital cash flows (based on assumed
future capital/dividend growth rates) are discounted to produce an amount
equal to the share price at the date of calculation.
15. Redemption Yield (ZDP Share) is the annualised rate at
which the planned future payment of capital is discounted to produce an amount
equal to the share price at the date of calculation.
16. Retained Revenue Reserves per Share is a cumulative
figure of revenue earned but not distributed and is calculated after
accounting for dividends from the Company, including those not yet recognised
in the financial statements.
17. Terminal NAV (Ordinary Share) is the projected NAV per
Ordinary Share at the planned winding-up date at a stated rate of capital
growth in the Company’s investment portfolio after taking into account the
final capital entitlement of the ZDP Shares, future estimated costs charged to
capital, and estimated winding-up costs.
18. Key dates
Company Incorporation Date – 29 March 2024
Inception Date – 28 June 2024. When reporting
performance, "since inception" refers to periods since 28 June 2024 and
reflects the impact of certain one off costs associated with the launch of the
Company.
Launch/Listing Date – is 1 July 2024. When
reporting performance, "since launch" refers to periods since 1 July 2024 and
excludes the one off costs associated with the launch of the Company.
Planned Winding-Up Date – 30 June 2031
CONTACT:
Euan Macdonald/Peter Shaw, Aberforth Partners LLP, 0131 220 0733
Aberforth Partners LLP, Secretaries
ANNOUNCEMENT ENDS
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