REG-Artemis UK Future Leaders Plc: Annual Financial Report and Notice of Annual General Meeting
29/04/2025 07:02
LEI: 549300K1D1P23R8U4U50
Artemis UK Future Leaders plc
Annual Financial Report for the Year Ended 31 January 2025 and Notice of
Annual General Meeting
The following text is extracted from the Annual Financial Report of the
Company for the year ended 31 January 2025. All page numbers below refer to
the Annual Financial Report which will be made available on the Company's
website.
Investment Objective
The Company is an investment trust whose investment objective is to achieve
long-term total returns for shareholders primarily by investment in a broad
cross-section of small to medium sized UK quoted companies.
Financial Highlights
Total Return Statistics (with dividends reinvested)
Change for the year (%) 2025 2024
Net asset value (1)(2) –2.4 –4.1
Share price (1)(2) –8.0 –1.8
Benchmark Index (2)(3) +7.8 –3.3
Capital Statistics
At 31 January 2025 2024 Change
Total shareholders’ funds (£’000) 136,644 161,395 (15.3)%
Net asset value (NAV) per share 449.88p 477.12p (5.7)%
Share price (1)(2) 375.00p 424.00p (11.6)%
Discount (1) (16.6)% (11.1)%
Gearing (1):
– gross gearing 9.0% 5.4%
– net gearing 7.2% 5.4%
Maximum authorised gearing 14.6% 9.3%
For the year ended 31 January 2025 2024
Return (1) and dividend per ordinary share:
Revenue return 13.02p 13.18p
Capital return (20.54)p (34.91)p
Total return (7.52)p (21.73)p
First interim dividend 3.85p 3.85p
Second interim dividend 3.85p 3.85p
Third interim dividend 3.85p 3.85p
Final dividend 3.45p 5.41p
Total dividends 15.00p 16.96p (11.6)%
Dividend Yield (1)(4) 4.0% 4.0%
Dividend payable for the year (£’000) (4):
– from current year net revenue 4,254 4,459
– from capital reserve 437 1,278
4,691 5,737
Capital dividend as a % of year end net assets (1)(4) 0.3% 0.8%
Capital returns paid in the year:
– Special dividend 484.85p —
Capital returns payable for the year (£’000):
– Special dividend 16,401 —
Ongoing charges (1) 1.03% 1.01%
Notes:
(1) Alternative Performance Measure (APM). See Glossary of Terms and
Alternative Performance Measures on pages 65 to 68 of the financial report for
details of the explanation and reconciliations of APMs.
(2) Source: LSEG Data & Analytics.
(3) The Benchmark Index of the Company is the Deutsche Numis Smaller
Companies + AIM (excluding Investment Companies) Index with dividends
reinvested.
(4) Excludes the one-off elective special dividend (return of capital) of
484.85p paid to shareholders on 8 October 2024.
Chairman’s Statement
Dear Shareholders,
The last year, and particularly the last six months, have not been good for UK
smaller companies investment trusts and the Board has been unhappy with the
performance that has been generated from your Company’s portfolio.
The encouraging outperformance as reported in the last half-year statement did
not continue throughout the remainder of the Company’s year and it has
instead fallen behind the benchmark.
During the year, the Board was active in challenging the investment manager
about performance. However, in the summer, it reached the conclusion that your
Company could benefit from a change of management team.
In the autumn, the Board interviewed a selection of investment managers with
an objective to find one who had demonstrated an ability to manage a portfolio
of investments in UK smaller companies in difficult market conditions,
communicate with all existing shareholders and market to new retail
shareholders. They also had to be prepared to back the Company with their own
money. One manager, Artemis, stood out. In December, the Board reached an
agreement with Artemis to take over the running of your Company. The portfolio
was handed over on 10 March 2025, after our financial year end.
Looking back
Invesco performance
The NAV total return for the portfolio over the year was –2.4%, which is
an underperformance of 10.2 percentage points when compared with the benchmark
index, Deutsche Numis Smaller Companies + AIM (excluding Investment Companies)
Index which returned +7.8% on the same basis.
The manager, Invesco, highlights the reasons for this underperformance in its
report.
Return of capital by way of elective special dividend
During the year, the Company had begun to trade on a discount of over 10% and
therefore, on 22 May 2024, the Board announced a proposed elective return of
capital to be offered to all shareholders in respect of up to 10% of the
Company’s issued shares (excluding treasury shares), and at a 2.5% discount
to net asset value. A circular was published providing context and options for
shareholders. On 20 August 2024, your Board published the result of the
elective special dividend offer, which was fully taken up. The special
dividend was paid on 8 October 2024, resulting in 3,382,648 shares being
cancelled for no consideration pursuant to the reduction of capital and an
amount of £16,401,000 was paid to Shareholders who elected to receive the
special dividend.
Dividends and Dividend Policy
The Company’s regular dividend policy is to target a dividend yield of 4% of
the year-end share price, paid from income earned within the portfolio and
enhanced, as necessary, through the use of realised capital profits. In
accordance with this policy, the Company has declared and paid three interim
dividends of 3.85p which are in line with the amounts paid in 2023.
The Board has resolved that the Company will propose a final dividend payable
in June 2025 of 3.45p per share to bring the total dividends paid for the year
to 15.00p per share (2024: 16.96p). The final dividend will be payable on 12
June 2025, subject to shareholder approval, to shareholders on the register on
9 May 2025 and the shares will go ex-dividend on 8 May 2025. This represents
all of the available revenue earned by the Company’s portfolio over the
year, equating to 90.68% of the dividend payment, with the remainder being
paid from realised capital reserves.
Shareholders who hold shares on the main register and are residents of the UK,
Channel Islands or Isle of Man have the opportunity to reinvest their dividend
via the Dividend Reinvestment Plan (‘DRIP’). Shareholders will need to
submit an election by 17 May 2025. Further information can be found on the
Company’s webpage: https://www.artemisfunds.com/futureleaders
Looking forward
The Board is enthusiastic, based on current and past performance, to let
shareholders know that their Company is being managed by a top-quality
investment team at Artemis, who took over the portfolio on 10 March 2025.
Artemis UK Future Leaders plc
Your Company has been renamed as Artemis UK Future Leaders plc with a stock
exchange ticker of AFL. The new managers of your Company are Mark Niznik and
William Tamworth.
Artemis’s performance record
Mark, William and their team currently manage a UK smaller companies
open-ended unit trust which over the year to the end of January 2025 produced
positive performance of 9.1%. Over one year, three years, five and ten years,
their performance has been consistently in the first quartile of their sector.
First-class communications with shareholders and an ability to find new
investors
The Board was impressed by the ability and enthusiasm of the whole team at
Artemis and in particular felt that shareholders would benefit from their
ability to communicate with all investors, be they institutional, wealth
managers or private individuals. Over the last year, the UK smaller companies
sector saw significant net outflows, but Artemis was able to defy the trend
and attract net new money to its smaller companies fund. During the last year,
your Company has traded at a persistent discount of over 10% and one of the
Board and managers’ objectives is to reduce this so it is closer to net
asset value.
The investment managers and the Artemis team as a whole have committed to
invest a significant amount of their own money into your Company.
A reduction in the investment management fee
As part of the negotiations with Artemis, the investment management fee has
been reduced from 0.75% of gross assets (before expenses) to 0.65% per annum
on the first £50 million of the net assets (after expenses) of the Company.
The balance above £50 million will be charged at a reduced rate of 0.55% per
annum. Shareholders will therefore receive a reduced rate applied to a lower
asset value (net assets). Artemis has also agreed to a nine-month fee holiday
which will end on 10 December 2025. This fee holiday offsets the termination
fee paid to Invesco in lieu of notice plus an additional five months where no
management fees will be paid.
The main service providers to the Company have moved from The Bank of New York
Mellon, London Branch to Northern Trust and due to the re-negotiated
management fee the ongoing charges ratio of the Company is projected to fall
from 1.03% to 0.84% per annum.
How your Company is being managed
For details on the change of strategy and how your Company is being managed,
please see the Portfolio Managers’ Report.
Artemis expect that the transition of the current investment portfolio to
their own portfolio is likely to be completed in the first half of the year.
They would like to introduce some modest gearing because they believe that the
UK market is very undervalued and small companies are especially undervalued.
Currently, Artemis are seeing lots of investment opportunities in this market.
The normal operating position for gearing would be between 0 to 10% with a
hard governance limit of 15%. This is consistent with the level of gearing
employed by the previous managers.
The Company has historically made use of traditional forms of bank debt to
achieve gearing, however, currently there is no gearing in place due to
conditions in the lending market making funding more difficult and expensive
to obtain. The Board believes that the best method for gearing the company is
to use Contracts for Difference (CFDs), often referred to as Equity Swaps. The
cost of using CFDs to increase investment exposure is currently lower than the
cost of traditional borrowing, and approximately 0.45% less than the previous
facility.
Annual General Meeting
The next AGM will be held in the offices of Artemis at 12.00 noon on Thursday
5 June. The Portfolio Managers will make a short formal presentation before a
question and answer session. The presentation will be made available on the
website after the meeting for those who can’t attend.
The Board is proposing a modification to the Company’s investment policy to
enable the Manager to achieve gearing as described in the section above. A
resolution to allow for increased derivatives use for the specific purpose of
investment in CFDs for gearing, not shorting, will be included in the Notice
of the Annual General Meeting on pages 59 to 62. The Board recommend the
proposed change and believe this should be non controversial.
Outlook
The transition of your portfolio under the management of Artemis is well
underway. The recent short-term volatility we have seen, because of global
trade tensions, has provided the Portfolio Managers with a number of
opportunities during this time. Further details on the Artemis investment
outlook for UK smaller companies can be found in the Portfolio Managers’
Report on page 10.
Mark and William have previously pointed out that UK small and mid-caps are
seven years into a secular bear market (defined as an extended period in which
stock price returns are significantly below the long-term average).
Historically, buying after periods of such weak returns has resulted in strong
future returns. We all believe that when confidence in UK companies begins to
recover, then this will translate into a powerful recovery in the share prices
of UK smaller companies.
On the subject of tariffs, they note that UK investors have become all too
familiar with the concept of a ‘political risk premium’ ever since the
vote to leave the EU. In contrast, the US has been blessed by a narrative of
‘US exceptionalism’. The recent BofA Global Fund Manager Survey provided
an early indication that investors are starting to reappraise this received
wisdom with a reduction in exposure to US equities in favour of cheaper
markets such as the UK. Given the dominance of the US in global equity
weightings, it would only take a small realignment to have a meaningful impact
on UK equity valuations.
I would like to thank you for your investment in the Company throughout this
difficult period of performance and I hope to be able to provide a much more
positive report to you at the end of this year.
Bridget Guerin
Chairman
28 April 2025
Portfolio Managers’ Report
Q What were the key influences on the market over the period?
A It was a positive year for UK equities, with falling inflation and three
cuts to base rates offsetting increased political uncertainty.
Labour won the general election in July, with a substantial majority of 172.
Claims of a £22 billion “black hole” in the public finances and a
downbeat assessment of the UK by the new government negatively affected both
consumer and business sentiment. The Budget in October resulted in a
significantly increased tax burden for businesses, particularly in the leisure
and retail sectors, further affecting sentiment. AIM-listed stocks were hit
hard after the inheritance tax benefit previously enjoyed by this area of the
market was halved.
The change in leadership in the US caused further uncertainty for markets,
with the incoming Trump administration signalling its intention to impose
import tariffs on a range of countries and goods.
Q How did the portfolio perform over the period?
A The NAV total return for the portfolio over the period was –2.4%, an
underperformance of 10.2 percentage points when compared with its benchmark,
the Deutsche
Numis Smaller Companies (excluding Investment Trusts) including AIM index,
which returned +7.8% on the same basis.
Q Which stocks contributed to and detracted from performance?
A Financial administration business JTC (+25%) continued its impressive
long-term record of organic growth. This was augmented with a number of
acquisitions, notably in the US, where management sees a significant growth
opportunity. Investment platform AJ Bell (+46%) benefitted from stronger stock
markets, which boosted its fee income, and recovered as fears about the impact
of new Consumer Duty regulations receded.
Keywords Studios (+46%) and Alpha Financial Markets Consulting (+36%) both
received takeover approaches from private equity.
Defence company Avon Protection (+62%) benefitted from restructuring under its
new management team. The business had previously lost it way but has
significant recovery potential if margins return to historic levels.
The biggest detractor from performance in the period was veterinarian CVS
(–41%). The shares fell following the commencement of a Competition and
Markets Authority investigation into the sector triggered by rising vet bills.
Focusrite (–62%) is a music-technology business which experienced softer
trading following a spike in demand during the pandemic. More recently, this
has been exacerbated by destocking among its retail customers.
Film and TV equipment maker Videndum (–69%) had a tough year due to the
impact of the Hollywood writers’ strike. Demand fell for an extended period,
leaving the business in a difficult financial position.
Jonathan Brown & Robin West
Portfolio Managers until 9 March 2025
Introducing your new portfolio managers Mark Niznik and William Tamworth
Mark has managed Artemis‘ ‘UK smaller companies‘ strategy since joining
the firm in 2007. He started his investment career in 1985 and has worked at
firms including Invesco Perpetual and Standard Life.
William works alongside Mark in managing Artemis’ ‘UK smaller companies’
strategy. Prior to joining Artemis in 2015, William worked at Liberum and
Citigroup where he analysed small and mid-cap companies.
Having taken over on the 10 March we are currently in the process of
repositioning the portfolio so it more closely reflects our investment
strategy. It would be unwise to give details on individual stocks until we
have finished building up and selling down our positions, but we expect to
update you in due course.
Our Approach
The aim of your Company remains to invest in smaller companies quoted on the
UK stock market. We are passionate believers in the ‘small-cap premium’.
This is the historic long-term outperformance of small caps over large caps of
between 3% and 4% a year. Our aim is to:
1. Capture this small-cap premium;
2. Add further outperformance from picking stocks that beat the small-cap
benchmark index (we have beaten this by 2% to 3% per annum over the ten years
we have been working together); and
3. Reduce the level of risk in the portfolio.
We hope to achieve the third aim – reduce the level of risk – by
constructing a portfolio of companies with diverse end markets. We also look
to avoid highly indebted companies and prefer those with market-leading
positions and attractive valuations.
A key tenet of our approach is our valuation discipline. It is easy to get
carried away with a great growth story in this area of the stock market, which
can lead to investors paying ever higher prices. In turn, this can result in
elevated investor expectations that all too frequently prove impossible for
the Company to live up to. Having a strong valuation discipline helps to
protect investors from this risk.
Another area of focus will be on company cash generation. It is relatively
easy for company management to target profits to impress investors. It is far
more difficult to alter the amount of cash they have in the bank. By focussing
on cashflow, we seek to reduce the risk of falling prey to financial
engineering or accounting scams. More often, cashflow can be an important
‘early warning’ of tougher trading – management teams will often seek to
protect earnings ahead of cashflow.
Finally, we intend to retain the long-term investment horizon of the Company.
This is a sector that – as it is currently – can remain out of favour for
a considerable period of time. But performance, when it comes, can be
substantial and rapid. This requires investor patience to maximise the full
value of the small-cap premium.
Outlook
Investor sentiment has taken a hit following increases to corporate taxes
announced in the Budget. The fear now is stagflation: no economic growth and
higher inflation as companies try to recoup additional national insurance
costs by raising prices. However, we are optimistic. Why? There are three main
reasons.
• UK consumers – Consumers are generally in good shape, with full
employment and decent wage growth fuelling increased disposable income.
Savings that were built up through Covid remain unspent, while household debt
as a proportion of income is at a 17-year low. Although we acknowledge the
risk of job losses as companies seek to recoup higher taxes by cutting costs,
this is likely to be more than offset by rising consumer spending as
confidence improves.
• Businesses – Corporate balance sheets are strong. Now the interest rate
cycle has turned, companies have the capacity to invest and the ability to
withstand a tough backdrop.
• Politics – Stability is important. The UK has a relatively centrist
government with a large majority that is likely to remain in place until 2029.
As the 2024 Budget was the last time the government can (credibly) blame the
previous one for unexpected funding gaps, the emphasis must now shift to
growth. There are already some tentative positive signs, for example with
regard to planning, potential changes to mortgages and pension reforms.
What’s been missing? Confidence: consumer confidence, business confidence
and investor confidence. But confidence can change quickly. Given the low
starting point, we don’t need a ‘good’ outlook, we just need one that is
‘less bad’ than feared. As confidence recovers, we expect increased
consumer spending, a rebound in business investment and asset managers to
start allocating money back to UK small caps. Given low valuations, we would
expect that to translate into a powerful recovery.
With regards to the recent developments around tariffs it is impossible to be
prescriptive as to the impact. For context, the fund derives the majority of
its revenues from the UK (approximately 60%) with around 15% coming from the
US. The UK is not a heavily export dependent economy and is more reliant on
services than goods. The degree to which tariffs increase uncertainty, impact
global growth and increase the chances of a UK recession, is likely to be more
important than the direct consequences of the tariffs themselves on the
portfolio (which we expect to be small). Currency movements will create
winners as well as losers. In times of higher uncertainty the portfolio should
benefit from our focus on companies with strong balance sheets. Historically
small caps have proven to be nimble and have tended to bounce back strongly
from periods of uncertainty.
Mark Niznik and William Tamworth
Portfolio Managers from 10 March 2025
Principal Risks and Uncertainties
The Directors confirm that they have carried out a robust assessment of the
emerging and principal risks facing the Company, including those that would
threaten its business model, future performance, solvency or liquidity. Most
of these risks are market related and are similar to those of other investment
trusts investing primarily in listed markets. The Audit Committee reviews the
Company’s risk control summary at each meeting, and as part of this process,
gives consideration to identify emerging risks. Emerging risks, such as
evolving cyber threat, geo-political tension and climate related risks, have
been considered during the year as part of the Directors’ assessment.
Principal Risk Description Mitigating Procedures and Controls
Market (Economic) Risk Factors such as fluctuations in stock markets, interest rates and exchange rates are not under the control of the Board or the Portfolio Managers, but may give rise to high levels of volatility in the share prices of investee companies, as well as affecting the Company’s own share price and the discount to its NAV. The risk could be triggered by unfavourable developments globally and/or in one or more regions, contemporary examples being the market uncertainty in relation to the wider political developments in Ukraine, the Middle East and the worldwide tariffs implemented by the USA. The Directors have assessed the market impact of the ongoing uncertainty from the unfavourable developments globally through regular discussions with the Portfolio Managers and the Corporate Broker. The Company’s current portfolio consists of companies
listed on the main UK equity market and those listed on AIM. To a limited extent, futures can be used to mitigate against market (economic) risk, as can the judicious holding of cash or other very liquid assets. Futures are not currently being used.
Investment Risk The Company invests in small and medium-sized companies traded on the London Stock Exchange or on AIM. By their nature, these are generally considered riskier than their larger counterparts and their share prices can be more volatile, with lower liquidity. In addition, as smaller companies may not generally have the financial strength, diversity and resources of larger companies, they may find it more difficult to overcome periods of economic slowdown or recession. The Portfolio Managers seek to mitigate risk through holding an economically diversified portfolio without concentrated macroeconomic bets. UK Smaller Companies in aggregate earn approximately 60% of their revenues from the domestic UK economy so the
portfolio will be sensitive to both the UK macro economic outlook and sentiment towards the UK. Artemis’ preference is to invest in companies with strong balance sheets and strong cash generation which should be relatively better positioned to withstand
economic shocks. We like companies with market leading positions which tend to be better able to pass through price increases to mitigate cost inflation. The portfolio is constructed without reference to the benchmark. The weighting that a stock is given
is a function of anticipated share price upside, the level of conviction and the riskiness of an investment. A single holding will typically not exceed 5% of the portfolio. The factor profile of the portfolio is also principally driven by bottom-up stock
picking although our investment risk team generates factor analysis for the investment team to review on a regular basis. Sustainability analysis is a core part of our stock analysis in both assessing the opportunities and risks facing companies over the
medium to long term. We identify key ESG metrics for each company and track the disclosure and trend of these. Disclosures by companies in the investment universe can often be poor, so this is an area we engage on. The Portfolio Managers remain cognisant
at all times of the potential liquidity of the portfolio. There can be no guarantee that the Company’s strategy and business model will be successful in achieving its investment objective. The Board monitors the performance of the Company, giving due
consideration to how the Manager has incorporated ESG considerations including climate change into their investment process. Further details can be found on pages 19 to 21. The Board also has guidelines in place to ensure that the Managers adhere to the
approved investment policy. The continuation of the Manager’s mandate is reviewed annually.
Shareholders’ Risk The value of an investment in the Company may go down as well as up and an investor may not get back the amount invested. The Board reviews regularly the Company’s investment objective and strategy to ensure that it remains relevant, as well as reviewing the composition of the shareholder register, peer group performance on both a share price and NAV basis, and the Company’s
share price discount to NAV per share. The Board and the Manager maintain an active dialogue with the aim of ensuring that the market rating of the Company’s shares reflects the underlying NAV; both share buy back and issuance facilities are in place to
help the management of this process.
Reliance on the Investment Manager and other Third-Party Service Providers The Company has no employees and the Board comprises non-executive directors only. The Company is therefore reliant upon the performance of third-party service providers for its executive function and service provisions. The Company’s operational structure means that all cyber risk (information and physical security) arises at its third-party service providers, including fraud, sabotage or crime against the Company. The Company’s operational capability relies upon the ability of its third-party service providers to continue working throughout the disruption caused by a major event such as the Covid-19 pandemic. Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company and could affect the ability of the Company to successfully pursue its investment policy. The Company’s main service providers, of which the Manager is the principal provider, are listed on page 64. The Manager may be exposed to reputational risks. In particular, the Manager may be exposed to the risk that litigation, misconduct, operational failures, negative publicity and press speculation, whether or not it is valid, will harm its reputation. Damage to the reputation of the Manager could potentially result in counterparties and third parties being unwilling to deal with the Manager and by extension the Company, which carries the Manager’s name. This could have an adverse impact on the ability of the Company to pursue its investment policy successfully. Third-party service providers are subject to ongoing monitoring by the Manager and the Board. During the year, the performance of all third-party providers was reviewed through formal and informal meetings. The Audit Committee reviews regularly the
performance and internal controls of the Manager and all third-party providers through audited service organisation control reports, together with updates on information security, the results of which are reported to the Board. The Manager’s business
continuity plans were reviewed on an ongoing basis during the year and the Directors were satisfied that robust plans and infrastructure were in place to minimise the impact on its operations so that the Company can continue to trade, meet regulatory
obligations, report and meet shareholder requirements. The Board received regular update reports from the Manager and the other third-party service providers on business continuity processes and had been provided with assurance from them all insofar as
possible that measures are in place for them to continue to provide contracted services to the Company during the year.
Regulatory Risk The Company is subject to various laws and regulations by virtue of its status as an investment trust, its listing on the London Stock Exchange and being an Alternative Investment Fund under the UK AIFMD regime. A loss of investment trust status could lead to the Company being subject to corporation tax on the chargeable capital gains arising on the sale of its investments. Other control failures, either by the Manager or any other of the Company’s service providers, could result in operational or reputational problems, erroneous disclosures or loss of assets through fraud, as well as breaches of regulations. The Manager reviews the level of compliance with tax and other financial regulatory requirements on a regular basis. The Board regularly considers all risks, the measures in place to control them and the possibility of any other risks that could arise.
During the year, the Manager’s Compliance and Internal Audit team produced annual reports for review by the Company’s Audit Committee. Further details of risks and risk management policies as they relate to the financial assets and liabilities of the
Company are detailed in note 16 of this Annual Financial Report.
Viability Statement
In accordance with provision 31 of the UK Corporate Governance Code 2018, the
Directors have assessed the prospects of the Company over a longer period than
12 months. The Company is an investment trust, a collective investment vehicle
designed and managed for long term investment. While the appropriate period
over which to assess the Company’s viability may vary from year to year, the
long term for the purpose of this viability statement is currently considered
by the Board to be at least five years, with the life of the Company not
intended to be limited to that or any other period.
The main risks to the Company’s continuation are: insufficient liquidity to
meet liabilities as they fall due; poor investment performance over an
extended period; shareholder dissatisfaction through failure to meet the
Company’s investment objective; or the investment policy not being
appropriate in prevailing market conditions. Accordingly, failure to meet the
Company’s investment objective, and contributory market and investment risks
are deemed by the Board to be principal risks of the Company and are given
particular consideration when assessing the Company’s long term viability.
Despite the current impact on global markets resulting from the ongoing
political developments in Ukraine, Israel and Palestine, and the USA, the
Directors remain confident, in light of recent changes, that the Company’s
investment strategy will continue to serve shareholders well over the longer
term.
The investment objective of the Company has been substantially unchanged for
many years. The 2015 amendment to the dividend policy gave some additional
weight to targeting increased dividend income to shareholders. This change
does not affect the total return sought or produced by the Manager but was
designed to increase returns distributed to shareholders. The Board considers
that the Company’s investment objective remains appropriate. This is
confirmed by contact with major shareholders.
Performance derives from returns for risk taken. The Report from Artemis on
page 10 sets out their current investment strategy. There has been no material
change in the Company’s investment objective, however, an amendment to the
investment policy is being proposed as detailed on page 11.
Demand for the Company’s shares and performance are not things that can be
forecast, but there are no current indications that either or both of these
may decline substantially over the next five years so as to affect the
Company’s viability.
The Company is a closed end investment trust and can pursue a long term
investment strategy and make use of gearing to enhance returns through
investment cycles without the need to maintain liquidity for investor
redemptions.
Based on the above analysis, including review of the revenue forecast for
future years along with stress testing of the portfolio liquidity and dividend
sensitivity analysis, the Directors confirm that they expect the Company will
continue to operate and meet its liabilities, as they fall due, during the
five years ending January 2030.
Investments in Order of Valuation at 31 JANUARY 2025
Ordinary shares unless stated otherwise
Market
Value % of
Company Sector £’000 Portfolio
4imprint Media 7,318 5.1
JTC Investment Banking and Brokerage Services 7,181 5.0
Alfa Financial Software Software and Computer Services 5,805 4.0
Hilton Food Food Producers 5,503 3.8
Hill & Smith Industrial Metals and Mining 5,373 3.7
AJ Bell Investment Banking and Brokerage Services 4,654 3.2
Coats General Industrials 4,498 3.1
Chemring Aerospace and Defence 4,305 3.0
Advanced Medical Solutions AIM Medical Equipment and Services 4,188 2.9
Hollywood Bowl Travel and Leisure 4,099 2.8
Top Ten Holdings 52,924 36.6
Avon Technologies
(formerly Avon Protection) Aerospace and Defence 3,445 2.4
Serco Industrial Support Services 3,351 2.3
Volution Construction and Materials 3,179 2.2
discoverIE Electronic and Electrical Equipment 2,851 2.0
Auction Technology Software and Computer Services 2,757 1.9
The Gym Travel and Leisure 2,738 1.9
Wickes Retailers 2,725 1.9
GlobalData AIM Media 2,561 1.8
Energean Oil, Gas and Coal 2,532 1.8
Genuit Construction and Materials 2,495 1.7
Top Twenty Holdings 81,558 56.5
CVS AIM Consumer Services 2,490 1.7
Mitchells & Butlers Travel and Leisure 2,487 1.7
Johnson Service AIM Industrial Support Services 2,481 1.7
Brooks Macdonald AIM Investment Banking and Brokerage Services 2,469 1.7
Aptitude Software Software and Computer Services 2,439 1.7
Marshalls Construction and Materials 2,397 1.7
Oxford Instruments Electronic and Electrical Equipment 2,381 1.7
Tatton Asset Management AIM Investment Banking and Brokerage Services 2,358 1.6
XP Power Electronic and Electrical Equipment 2,354 1.6
Kainos Software and Computer Services 2,178 1.5
Top Thirty Holdings 105,592 73.1
Young & Co’s Brewery – Non-Voting AIM Travel and Leisure 2,134 1.5
MJ Gleeson Household Goods and Home Construction 2,095 1.5
Essentra Industrial Support Services 2,082 1.4
GB Group AIM Software and Computer Services 1,957 1.4
Savills Real Estate Investment and Services 1,943 1.4
Future Media 1,939 1.3
VP Industrial Transportation 1,804 1.3
Robert Walters Industrial Support Services 1,729 1.2
Workspace Real Estate Investment Trusts 1,660 1.2
Severfield Construction and Materials 1,541 1.1
Top Forty Holdings 124,476 86.4
Midwich AIM Industrial Support Services 1,539 1.1
Dunelm Retailers 1,421 1.0
M&C Saatchi AIM Media 1,413 1.0
Jadestone Energy AIM Oil, Gas and Coal 1,408 1.0
NIOXAIM Medical Equipment and Services 1,404 1.0
Treatt Chemicals 1,266 0.9
Ricardo Construction and Materials 1,218 0.8
CLS Real Estate Investment and Services 1,148 0.8
Secure Trust Bank Banks 1,125 0.8
RWS AIM Industrial Support Services 1,098 0.8
Top Fifty Holdings 137,516 95.6
Churchill China AIM Household Goods and Home Construction 1,027 0.7
FDM Industrial Support Services 976 0.7
Next Fifteen Communications AIM Media 833 0.6
Topps Tiles Retailers 803 0.6
Videndum Industrial Engineering 724 0.5
Learning Technologies AIM Software and Computer Services 619 0.4
Focusrite AIM Leisure Goods 605 0.4
YouGov AIM Media 435 0.3
Genus Pharmaceuticals and Biotechnology 335 0.2
Thruvision AIM Electronic and Electrical Equipment 47 –
Top Sixty Holdings 143,920 100.0
Total Investments: (60) 143,920 100.0
AIM Investments quoted on AIM.
The percentage of the portfolio by value invested in AIM stocks at the year
end was 21.6% (2024: 29.9%). There were 19 AIM stocks held at the year end,
representing 31.7% of the 60 stocks (2024: 24 AIM stocks held representing
36.4% of the 66 stocks held).
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Annual Financial Report in
accordance with United Kingdom applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under the law the Directors have elected to prepare financial
statements in accordance with UK-adopted international accounting standards.
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 these financial statements, the Directors are required to:
• select suitable accounting policies in accordance with IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors and then apply them
consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
• present additional disclosures when compliance with the specific
requirements in IFRSs is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the group and
company financial position and financial performance;
• state whether UK-adopted international accounting standards have been
followed, subject to any material departures 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 the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing the Strategic Report, a Corporate Governance Statement, a
Directors’ Remuneration Report and a Directors’ Report that comply with
the law and regulations.
The Directors of the Company each confirm to the best of their knowledge,
that:
• the financial statements, prepared in accordance with UK adopted
international accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit of the Company;
• this Annual Financial 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; and
• they consider that this Annual Financial Report, taken as a whole, is
fair, balanced and understandable and provides the information necessary for
shareholders to assess the Company’s position and performance, business
model and strategy.
Signed on behalf of the Board of Directors
Bridget Guerin
Chairman
28 April 2025
Statement of Comprehensive Income
FOR THE YEAR ENDED 31 JANUARY
Year ended 31 January Year ended 31 January
2025 2024
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Loss on investments held at fair value 9 - (4,673) (4,673) - (11,138) (11,138)
Income 2 4,902 - 4,902 5,088 491 5,579
Investment management fees 3 (189) (1,072) (1,261) (182) (1,029) (1,211)
Other expenses 4 (370) (466) (836) (424) (3) (427)
Loss before finance costs and taxation 4,343 (6,211) (1,868) 4,482 (11,679) (7,197)
Finance costs 5 (89) (501) (590) (23) (130) (153)
Loss before taxation 4,254 (6,712) (2,458) 4,459 (11,809) (7,350)
Taxation 6 - - - - - -
Loss after taxation 4,254 (6,712) (2,458) 4,459 (11,809) (7,350)
Return per ordinary share 7 13.02p (20.54)p (7.52)p 13.18p (34.91)p (21.73)p
The total columns of this statement represent the Company’s statement of
comprehensive income, prepared in accordance with UK-adopted international
accounting standards. The loss after taxation is the total comprehensive loss.
The supplementary revenue and capital columns are both prepared in accordance
with the Statement of Recommended Practice issued by the Association of
Investment Companies. All items in the above statement derive from continuing
operations of the Company. No operations were acquired or discontinued in the
year.
Statement of Changes in Equity
Capital
Share Share Redemption Capital Revenue
Capital Premium Reserve Reserve Reserve Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
At 31 January 2023 10,642 22,366 3,386 137,004 1,517 174,915
Total comprehensive loss for the year – – – (11,809) 4,459 (7,350)
Dividends paid 8 – – – (2,048) (4,122) (6,170)
At 31 January 2024 10,642 22,366 3,386 123,147 1,854 161,395
Total comprehensive loss for the year – – – (6,712) 4,254 (2,458)
Dividends paid 8 – – – (1,278) (4,328) (5,606)
Shares bought back and held in treasury 12 – – – (286) – (286)
Special dividend paid 8,12 (677) – 677 (16,401) – (16,401)
At 31 January 2025 9,965 22,366 4,063 98,470 1,780 136,644
The accompanying accounting policies and notes are an integral part of these
financial statements.
Balance Sheet
As at As at
31 January 31 January
2025 2024
Notes £’000 £’000
Non-current assets
Investments held at fair value through profit or loss 9 143,920 169,481
Current assets
Other receivables 10 2,839 932
Cash and cash equivalents 2,472 –
5,311 932
Total assets 149,231 170,413
Current liabilities
Other payables 11 (12,587) (9,018)
(12,587) (9,018)
Total assets less current liabilities 136,644 161,395
Net assets 136,644 161,395
Capital and reserves
Share capital 12 9,965 10,642
Share premium 13 22,366 22,366
Capital redemption reserve 13 4,063 3,386
Capital reserve 13 98,470 123,147
Revenue reserve 13 1,780 1,854
Total shareholders’ funds 136,644 161,395
Net asset value per ordinary share
Basic and diluted 14 449.88p 477.12p
The financial statements were approved and authorised for issue by the Board
of Directors on 28 April 2025.
Signed on behalf of the Board of Directors
Bridget Guerin
Chairman
The accompanying accounting policies and notes are an integral part of these
financial statements.
Statement of Cash Flows
Year ended Year ended
31 January 31 January
2025 2024
£’000 £’000
Cash flow from operating activities
Loss before taxation (2,458) (7,350)
Add back finance costs 590 153
Adjustments for:
Purchase of investments (19,030) (32,646)
Sale of investments 37,995 21,263
18,965 (11,383)
Loss on investments held at fair value 4,673 11,138
Increase in receivables (32) (51)
Increase in payables 20 8
Net cash inflow/(outflow) from operating activities 21,758 (7,485)
Cash flow from financing activities
Finance cost paid (590) (153)
Dividends paid – note 8 (5,606) (6,170)
(Decrease)/increase in bank overdraft (8,753) 8,753
Bank facility drawdown 12,350 –
Shares bought back and held in treasury (286) –
Special dividend paid – note 8 (16,401) –
Net cash (outflow)/inflow from financing activities (19,286) 2,430
Net increase/(decrease) in cash and cash equivalents 2,472 (5,055)
Cash and cash equivalents at start of the year – 5,055
Cash and cash equivalents at the end of the year 2,472 –
Reconciliation of cash and cash equivalents to the Balance Sheet is as follows:
Cash held at custodian 52 –
Invesco Liquidity Funds plc – Sterling, money market fund 2,420 –
Cash and cash equivalents 2,472 –
Cash flow from operating activities includes:
Dividends received 4,825 5,523
Interest received 5 3
As the Company did not have any long term debt at both the current and prior
year ends, no reconciliation of the financial liabilities position is
presented.
Notes to the Financial Statements
1. Principal Accounting Policies
Accounting policies describe the Company’s approach to recognising and
measuring transactions during the year and the position of the Company at the
year end.
The principal accounting policies adopted in the preparation of these
financial statements together with the approach to recognition and measurement
are set out below. These policies have been consistently applied during the
current year and the preceding year, unless otherwise stated.
The financial statements have been prepared on a going concern basis on the
grounds that the Company’s investment portfolio is sufficiently liquid and
significantly exceeds all balance sheet liabilities, there are no unrecorded
commitments or contingencies. The disclosure on going concern on page 28 in
the Directors’ Report provides further detail. The Directors believe the
Company has adequate resources to continue in operational existence for the
foreseeable future and has the ability to meet its financial obligations as
and when they fall due for a period until at least 30 April 2026.
(a) Basis of Preparation
(i) Accounting Standards Applied
The financial statements have been prepared on a historical cost basis, except
for the measurement at fair value of investments which for the Company are
quoted bid prices for investments in active markets at the Balance Sheet date
and therefore reflect market participants’ view of climate change risk and
in accordance with the applicable UK-adopted international accounting
standards. The standards are those that are effective at the Company’s
financial year end.
Where presentational guidance set out in the Statement of Recommended Practice
(‘SORP’) ‘Financial Statements of Investment Trust Companies and Venture
Capital Trusts’, issued by the Association of Investment Companies in July
2022, is consistent with the requirements of UK-adopted international
accounting standards, the Directors have prepared the financial statements on
a basis compliant with the recommendations of the SORP. The supplementary
information which analyses the statement of comprehensive income between items
of a revenue and a capital nature is presented in accordance with the SORP.
The Directors have considered the impact of climate change on the value of the
listed investments that the Company holds. In the view of the Directors, as
the portfolio consists of listed equities, their market prices should reflect
the impact, if any, of climate change and accordingly no adjustment has been
made to take account of climate change in the valuation of the portfolio in
these financial statements.
(ii) Critical Accounting Estimates and Judgements
The preparation of the financial statements may require the Directors to make
estimations where uncertainty exists. It also requires the Directors to make
judgements, estimates and assumptions, in the process of applying the
accounting policies. There have been no significant judgements, estimates or
assumptions for the current or preceding year.
(b) Foreign Currency and Segmental Reporting
(i) Functional and Presentation Currency
The financial statements are presented in Sterling, which is the Company’s
functional and presentation currency and the currency in which the Company’s
share capital and expenses are denominated, as well as a majority of its
assets and liabilities.
(ii) Transactions and Balances
Foreign currency assets and liabilities are translated into Sterling at the
rates of exchange ruling at the balance sheet date. Transactions in foreign
currency, are translated into Sterling at the rates of exchange ruling on the
dates of such transactions, and profit or loss on translation is taken to
revenue or capital depending on whether it is revenue or capital in nature.
All are recognised in the statement of comprehensive income.
(iii) Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business of investing in equity and debt securities, issued by
companies operating and generating revenue mainly in the UK.
(c) Financial Instruments
(i) Recognition of Financial Assets and Financial Liabilities
The Company recognises financial assets and financial liabilities when the
Company becomes a party to the contractual provisions of the instrument. The
Company offsets financial assets and financial liabilities if the Company has
a legally enforceable right to set off the recognised amounts and interests
and intends to settle on a net basis.
(ii) Derecognition of Financial Assets
The Company derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the right to receive the
contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset
are transferred. Any interest in the transferred financial asset that is
created or retained by the Company is recognised as an asset.
(iii) Derecognition of Financial Liabilities
The Company derecognises financial liabilities when its obligations are
discharged, cancelled or expired.
(iv) Trade Date Accounting
Purchases and sales of financial assets are recognised on trade date, being
the date on which the Company commits to purchase or sell the assets.
(v) Classification of Financial Assets and Financial Liabilities
Financial assets
The Company classifies its financial assets as measured at amortised cost or
measured at fair value through profit or loss on the basis of both: the
entity’s business model for managing the financial assets; and the
contractual cash flow characteristics of the financial asset.
Financial assets measured at amortised cost include cash and debtors.
A financial asset is measured at fair value through profit or loss if its
contractual terms do not give rise to cash flows on specified dates that are
solely payments of principal and interest (‘SPPI’) on the principal amount
outstanding or it is not held within a business model whose objective is
either to collect contractual cash flows, or to both collect contractual cash
flows and sell. The Company’s equity investments are classified as fair
value through profit or loss as they do not give rise to cash flows that are
SPPI.
Financial assets held at fair value through profit or loss are initially
recognised at fair value, which is usually the transaction price and are
subsequently valued at fair value.
For investments that are actively traded in organised financial markets, fair
value is determined by reference to stock exchange quoted bid prices at the
balance sheet date.
Financial liabilities
Financial liabilities, including borrowings through the bank facility or
formerly the bank overdraft, are initially measured at fair value, net of
transaction costs and are subsequently measured at amortised cost using the
effective interest method, where applicable.
(d) Cash and Cash Equivalents
Cash and cash equivalents include any cash held at custodian and approved
depositories as well as holdings in Invesco Liquidity Funds plc – Sterling,
a triple-A rated money market fund. Cash and cash equivalents are defined as
cash itself or being readily convertible to a known amount of cash and are
subject to an insignificant risk of change in value with original maturities
of three months or less.
(e) Income
All dividends are taken into account on the date investments are marked
ex-dividend; other income from investments is taken into account on an
accruals basis. Where the Company elects to receive scrip dividends (i.e. in
the form of additional shares rather than cash), the equivalent of the cash
dividend foregone is recognised as income in the revenue account and any
excess in value of the shares received over the amount of the cash divided
recognised in capital. Deposit interest is taken into account on an accruals
basis. Special dividends representing a return of capital are allocated to
capital in the statement of comprehensive income and then taken to capital
reserves. Dividends will generally be recognised as revenue however all
special dividends will be reviewed, with consideration given to the facts and
circumstances of each case, including the reasons for the underlying
distribution, before a decision over whether allocation is to revenue or
capital is made.
(f) Expenses and Finance Costs
All expenses and finance costs are accounted for in the statement of
comprehensive income on an accruals basis.
The investment management fee and finance costs (including those related to
the bank facility or formerly the bank overdraft) are allocated 85% to capital
and 15% to revenue. This is in accordance with the Board’s expected long
term split of returns, in the form of capital gains and income respectively,
from the portfolio.
Investment transaction costs such as brokerage commission and stamp duty are
recognised in capital in the statement of comprehensive income. Expenses
incurred as a result of the special elective dividend and change of investment
manager have been recognised as capital in the statement of comprehensive
income. All other expenses are allocated to revenue in the statement of
comprehensive income.
(g) Taxation
Tax represents the sum of tax payable, withholding tax suffered and deferred
tax. Tax is charged or credited in the statement of comprehensive income. Any
tax payable is based on taxable profit for the year, however, as expenses
exceed taxable income no corporation tax is due. The Company’s liability for
current tax is calculated using tax rates that have been enacted or
substantially enacted by the balance sheet date.
Deferred taxation is recognised in respect of all temporary differences that
have originated but not reversed at the balance sheet date, where transactions
or events that result in an obligation to pay more tax in the future or right
to pay less tax in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is considered
probable that there will be suitable profits from which the future reversal of
the temporary differences can be deducted. Deferred tax assets and liabilities
are measured at the tax rates expected to apply in the period when the
liability is settled or the asset realised.
Investment trusts which have approval under Section 1158 of the Corporation
Tax Act 2010 are not liable for taxation on capital gains.
(h) Dividends
Dividends are not accrued in the financial statements, unless there is an
obligation to pay the dividends at the balance sheet date. Proposed final
dividends are recognised in the financial year in which they are approved by
the shareholders.
2. Income
This note shows the income generated from the portfolio (investment assets) of
the Company and income received from any other source.
2025 2024
£’000 £’000
Income from investments:
UK dividends 4,533 4,443
UK special dividends 262 511
Overseas dividends 102 131
Deposit interest 5 3
Total income 4,902 5,088
No special dividends have been recognised in capital during the year (2024:
£491,000).
Overseas dividends include dividends received on UK listed investments where
the investee company is domiciled outside of the UK.
3. Investment Management Fee
This note shows the fees due to the Manager. These are made up of the
management fee calculated and paid monthly and, for the previous year. This
fee is based on the value of the assets being managed.
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 189 1,072 1,261 182 1,029 1,211
Details of the investment management and secretarial agreement are given on
page 29 in the Directors’ Report.
At 31 January 2025, £93,000 (2024: £106,000) was accrued in respect of the
investment management fee.
4. Other Expenses
The other expenses of the Company are presented below; those paid to the
Directors and auditor are separately identified.
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Directors’ remuneration (i) 132 – 132 125 – 125
Auditor’s fees (ii) :
– for audit of the Company’s
annual financial statements 51 – 51 49 – 49
Other expenses (iii) 187 466 653 250 3 253
370 466 836 424 3 427
(i) The Director’s Remuneration Report provides further information on
Directors’ fees.
(ii) Auditor’s fees include expenses but excludes VAT. The VAT is included
in other expenses.
(iii) Other expenses include:
• £12,500 (2024: £11,800) of employer’s National Insurance payable on
Directors’ remuneration. As at 31 January 2025, the amounts outstanding on
employer’s National Insurance on Directors’ remuneration was £1,100
(2024: £1,000), the amounts outstanding for Directors’ fee was £11,200
(2024: £10,400).
• custodian transaction charges of £1,700 (2024: £3,100). These are
charged to capital.
• broker, registrar, legal and print costs in connection with the special
dividend of £422,800 (2024: nil). These were charged to capital.
• legal costs in connection with the change of Investment Manager £42,000
(2024: nil). These were charged to capital.
5. Finance Costs
Finance costs arise on any borrowing facilities the Company has.
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Bank facility fee 1 7 8 – – –
Bank overdraft facility fee – – – 1 6 7
Interest on bank facility 51 286 337 – – –
Overdraft interest 37 208 245 22 124 146
89 501 590 23 130 153
6. Taxation
As an investment trust the Company pays no tax on capital gains and, as the
Company invested principally in UK equities, it has little overseas tax. In
addition, no deferred tax is required to provide for tax that is expected to
arise in the future due to differences in accounting and tax bases.
(a) Tax charge
2025 2024
£’000 £’000
Overseas taxation – –
(b) Reconciliation of tax charge
2025 2024
£’000 £’000
Loss before taxation (2,458) (7,350)
Theoretical tax at the current UK Corporation Tax rate of 25% (2024: 24.03%) (615) (1,766)
Effects of:
– Non-taxable UK dividends (1,102) (1,036)
– Non-taxable UK special dividends (65) (241)
– Non-taxable overseas dividends (24) (24)
– Non-taxable loss on investments 1,168 2,676
– Excess of allowable expenses over taxable income 521 390
– Disallowable expenses 117 1
Tax charge for the year – –
(c) Factors that may affect future tax changes
The Company has cumulative excess management expenses of £48,030,000 (2024:
£45,945,000) that are available to offset future taxable revenue.
A deferred tax asset of £12,007,000 (2024: £11,486,000) at 25% (2024: 25%)
has not been recognised in respect of these expenses since the Directors
believe that there will be no taxable profits in the future against which the
deferred tax assets can be offset.
The Finance Act 2021 increases the UK Corporation Tax rate from 19% to 25%
effective 1 April 2023. The Act received Royal Assent on 10 June 2021.
Deferred tax assets and liabilities on balance sheets prepared after the
enactment of the new tax rate must therefore be re-measured accordingly, so as
a result the deferred tax asset has been calculated at 25%.
7. Return per Ordinary Share
Return per ordinary share is the amount of gain or loss generated for the
financial year divided by the weighted average number of ordinary shares in
issue.
2025 2024
Revenue Capital Total Revenue Capital Total
Return £’000 4,254 (6,712) (2,458) 4,459 (11,809) (7,350)
Return per ordinary share 13.02p (20.54)p (7.52)p 13.18p (34.91)p (21.73)p
The returns per ordinary share are based on the weighted average number of
shares in issue during the year of 32,686,825 (2024: 33,826,929).
8. Dividends on Ordinary Shares
The Company paid four dividends in the year – three interims and a final.
The final dividend shown below is based on shares in issue at the record date
or, if the record date has not been reached, on shares in issue on the date
the balance sheet is signed. The third interim and final dividends are paid
after the balance sheet date.
2025 2024
Pence £’000 Pence £’000
Dividends paid from revenue in the year:
Third interim (prior year) 3.85 1,302 3.75 1,269
Final (prior year) 1.63 553 0.74 249
First interim 3.85 1,302 3.85 1,302
Second interim 3.85 1,171 3.85 1,302
Total dividends paid from revenue 13.18 4,328 12.19 4,122
Dividends paid from capital in the year:
Final (prior year) 3.78 1,278 6.05 2,048
Total dividends paid from capital 3.78 1,278 6.05 2,048
Total dividends paid in the year 16.96 5,606 18.24 6,170
2025 2024
Pence £’000 Pence £’000
Dividends payable in respect of the year:
First interim 3.85 1,302 3.85 1,302
Second interim 3.85 1,171 3.85 1,302
Third interim 3.85 1,170 3.85 1,302
Final 3.45 1,048 5.41 1,831
15.00 4,691 16.96 5,737
The third interim dividend of 3.85p per share, in respect of the year ended 31
January 2025, was paid to shareholders on 7 March 2025. The Company’s
dividend policy was changed in 2015 so that dividends will be paid firstly
from current year revenue and any revenue reserves available, and thereafter
from capital reserves. The amount payable in respect of the year is shown
below:
2025 2024
£’000 £’000
Dividends in respect of the year:
– from revenue reserve 4,254 4,459
– from capital reserve 437 1,278
4,691 5,737
Dividend payable from the capital reserve of £437,000 (2024: capital reserve
of £1,278,000) as a percentage of year end net assets of £136,644,000 (2024:
£161,395,000) is 0.3% (2024: 0.8%). The Company has £112,136,000 (2024:
£128,237,000) of realised distributable capital reserves at the year end.
2025 2024
Pence £’000 Pence £’000
Capital returns paid in the year:
Special Dividend 484.85 16,401 – –
484.85 16,401 – –
A return of capital was offered to Shareholders during the year ended 31
January 2025, in respect of up to 10% of the Company’s issued shares
(excluding treasury shares). The return of capital was proposed by way of an
elective special dividend, where all shareholders had an opportunity to elect
in respect of each share held. The value of the special dividend of 484.85p
was an amount per share which represented 97.5% of the published unaudited NAV
per share of 497.29p as at the net asset value certification date (being 6.00
p.m. on 17 September 2024). The special dividend was paid on 8 October 2024,
resulting in 3,382,648 shares being cancelled for no consideration pursuant to
the reduction of capital and an amount of £16,401,000 was paid to
Shareholders who elected to receive the special dividend.
9. Investments Held at Fair Value Through Profit and Loss
The portfolio is made up of investments which are listed or traded on a
primary stock exchange or AIM. Profit and losses in the year include:
• realised, usually arising when investments are sold; and
• unrealised, being the difference from cost on those investments still
held at the year end.
2025 2024
£’000 £’000
Investments listed on a primary stock exchange 112,854 118,717
AIM quoted investments 31,066 50,764
143,920 169,481
Opening valuation 169,481 172,643
Movements in year:
Purchases at cost 18,982 29,720
Sales proceeds (39,870) (21,744)
Loss on investments in the year (4,673) (11,138)
Closing valuation 143,920 169,481
Closing book cost 157,586 174,572
Closing investment unrealised loss (13,666) (5,091)
Closing valuation 143,920 169,481
The transaction costs amount to £68,000 (2024: £90,000) on purchases and
£20,000 (2024: £12,000) for sales. These amounts are included in determining
the loss on investments held at fair value as disclosed in the Statement of
Comprehensive Income.
The Company received £39,870,000 (2024: £21,744,000) from investments sold
in the year. The book cost of these investments when they were purchased was
£35,968,000 (2024: £24,989,000) realising a gain of £3,902,000 (2024: loss
of £3,245,000). These investments have been revalued over time and until they
were sold any unrealised profits/losses were included in the fair value of the
investments.
10. Other Receivables
Other receivables are amounts which are due to the Company, such as monies due
from brokers for investments sold and income which has been earned (accrued)
but not yet received.
2025 2024
£’000 £’000
Amounts due from brokers 2,404 529
Overseas withholding tax recoverable – 30
Income tax recoverable – 4
Prepayments and accrued income 435 369
2,839 932
11. Other Payables
Other payables are amounts which must be paid by the Company, and include any
amounts due to brokers for the purchase of investments, interest in respect of
the bank facility or amounts owed to suppliers (accruals), such as the Manager
and auditor.
The bank facility provided a specific amount of capital, up to £20 million,
over a specified period of time (two years). Unlike a term loan, the revolving
nature of the bank facility allowed the Company to drawdown, repay and re-draw
loans.
2025 2024
£’000 £’000
Amounts due to brokers – 48
Bank facility 12,350 –
Bank overdraft – 8,753
Accruals 237 217
12,587 9,018
During the year to 31 January 2025 the Company’s £15 million overdraft
facility was replaced with a new uncommitted £20 million sterling two year
revolving credit facility (the 'bank facility') with The Bank of New York
Mellon. Interest on the bank facility was payable based on the Adjusted
Reference Rate (principally SONIA in respect of loans drawn) plus a facility
fee of 0.05% per annum on the total amount of the facility. The bank facility
covenants were based on the lower of 30% of net asset value and £20 million
and required total assets to not fall below £50 million. Subsequent to the
year end, the bank facility was fully re-paid with effect 26 February 2025 and
the facility withdrawn.
12. Share Capital
Share capital represents the total number of shares in issue, including shares
held in treasury.
(a) Allotted, called-up and fully paid
2025 2024
Number £’000 Number £’000
Allotted, called-up and fully paid
Ordinary shares of 20p each 30,373,362 6,075 33,826,929 6,765
Treasury shares of 20p each 19,453,074 3,890 19,382,155 3,877
49,826,436 9,965 53,209,084 10,642
(b) Share movements
2025 2024
Ordinary shares Treasury shares Ordinary shares Treasury shares
Number of shares of 20p each at start of year 33,826,929 19,382,155 33,826,929 19,382,155
Special dividend paid (3,382,648) – – –
Shares bought back and held in treasury (70,919) 70,919 – –
Carried forward 30,373,362 19,453,074 33,826,929 19,382,155
During the year to 31 January 2025, the Company bought back into treasury,
70,919 (2024: none) ordinary shares at a total cost of £286,000 (2024: nil).
3,382,648 shares were cancelled as part of the Special Dividend paid 8 October
2024. No shares have been bought back into treasury since 31 January 2025.
13. Reserves
This note explains the different reserves attributable to shareholders. The
aggregate of the reserves and share capital (see previous note) make up total
shareholders’ funds.
The share premium arises whenever shares are issued at a price above the
nominal value plus any issue costs. The capital redemption reserve maintains
the equity share capital and arises from the nominal value of shares
repurchased and cancelled. The share premium and capital redemption reserve
are non-distributable.
Capital investment gains and losses are shown in note 9, and form part of the
capital reserve. The revenue reserve shows the net revenue retained after
payment of dividends. The capital (to the extent that it constitutes realised
profits) and revenue reserves are distributable by way of dividend. In
addition, the capital reserve is also distributable by way of share buy backs.
14. Net Asset Value per Ordinary Share
The Company’s total net assets (total assets less total liabilities) are
often termed shareholders’ funds and are converted into net asset value per
ordinary share by dividing by the number of shares in issue.
The net asset value per share and the net asset values attributable at the
year end were as follows:
Net asset value Net assets
per ordinary share attributable
2025 2024 2025 2024
Pence Pence £’000 £’000
Ordinary shares 449.88 477.12 136,644 161,395
Net asset value per ordinary share is based on net assets at the year end and
on 30,373,362 (2024: 33,826,929) ordinary shares, being the number of ordinary
shares in issue (excluding treasury) at the year end.
15. Risk Management, Financial Assets and Liabilities
Financial instruments comprise the Company’s investment portfolio as well as
any cash, borrowings, other receivables and other payables.
Financial Instruments
The Company’s financial instruments comprise its investment portfolio (as
shown on pages 22 and 23), cash, borrowings, other receivables and other
payables that arise directly from its operations such as sales and purchases
awaiting settlement and accrued income. The accounting policies in note 1
include criteria for the recognition and the basis of measurement applied for
financial instruments. Note 1 also includes the basis on which income and
expenses arising from financial assets and liabilities are recognised and
measured.
Risk Management Policies and Procedures
The Directors have delegated to the Manager the responsibility for the
day-to-day investment activities of the Company as more fully described in the
Directors’ Report.
As an investment trust the Company invests in equities and other investments
for the long-term, so as to meet its investment policy (incorporating the
Company’s investment objective). In pursuing its investment objective, the
Company is exposed to a variety of risks that could result in either a
reduction in the Company’s net assets or a reduction of the profits
available for dividends. Those related to financial instruments include market
risk, liquidity risk and credit risk.
The main risk that the Company faces arising from its financial instruments is
market risk – this risk is reviewed in detail below. Since the Company
invests mainly in UK equities traded on the London Stock Exchange, liquidity
risk and credit risk are not significant. Liquidity risk is minimised as the
majority of the Company’s investments comprise a diversified portfolio of
readily realisable securities which can be sold to meet funding commitments as
necessary. In addition, a bank facility (formerly overdraft facility) provided
short-term funding flexibility.
Credit risk encompasses the failure by counterparties to deliver securities
which the Company has paid for, or to pay for securities which the Company has
delivered, and cash balances. Counterparty risk is minimised by using only
approved counterparties. The Company’s ability to operate in the short-term
may be adversely affected if the Company’s custodian suffers insolvency or
other financial difficulties. The appointment of a depositary has
substantially lessened this risk. The Board reviews the custodian’s annual
controls report and the Manager’s management of the relationship with the
custodian. This was The Bank of New York Mellon (International) Limited, an
A-1+ rated financial institution, until 9 March 2025. From 10 March 2025 the
custodian was changed to Northern Trust Investor Services Limited, a similarly
rated institution. Cash balances are limited to a maximum of 2.5% of net
assets with any one deposit taker, with only approved deposit takers being
used. A maximum of 4.0% of net assets with The Bank of New York Mellon
(International) Limited and a maximum of 7.5% of net assets for holdings in
the Invesco Liquidity Funds plc – Sterling, a triple-A rated money market
fund, were allowed during the period to 9 March 2025. Post transition, a
maximum of 4.0% of net assets is allowed to be placed with Northern Trust
Investor Services Limited with a further 10% maximum allowed to be invested in
the Northern Trust Global Funds plc - Sterling money market fund.
Market Risk
The fair value or future cash flows of a financial instrument may fluctuate
because of changes in market prices. This market risk comprises three elements
– currency risk, interest rate risk and other price risk. The Company’s
Manager assesses the Company’s exposure when making each investment
decision, and monitors the overall level of market risk on the whole of the
investment portfolio on an ongoing basis. The Board meets at least quarterly
to assess risk and review investment performance. The Company may utilise
hedging instruments to manage market risk. Gearing is used to enhance returns,
however, this will also increase the Company’s exposure to market risk and
volatility.
1. Currency Risk
The exposure to currency risk is considered minor as the Company’s financial
instruments are mainly denominated in Sterling. At the current and preceding
year end, the Company held no foreign currency investments or cash, although
a small amount of dividend income was received in foreign currency.
During this and the previous year, the Company did not use forward currency
contracts to mitigate currency risk.
2. Interest Rate Risk
Interest rate movements will affect the level of income receivable on cash
deposits and the interest payable on variable rate borrowings. When the
Company has cash balances, they are held in variable rate bank accounts
yielding rates of interest dependent on the base rate of the Custodians, The
Bank of New York Mellon (International) Limited (until 9 March 2025) and
Northern Trust Investor Services Limited (from 10 March 2025). Additionally,
holdings in Invesco Liquidity Funds plc – Sterling and Northern Trust Global
Funds plc - Sterling are both subject to interest rate changes.
The Company had an uncommitted bank facility up to a maximum of 30% of the net
asset value of the Company or £20 million (2024: uncommitted bank overdraft
facility up to a maximum of 30% of the net asset value of the Company or £15
million), whichever was the lower; the interest rate was charged at a margin
over the Bank of England base rate. The Company used the facility when
required, at levels that were approved and monitored by the Board.
At the year end £12.4 million of the bank facility was drawn down (2024:
£8.8 million overdraft facility drawn). Based on the maximum amount that can
be drawn down at the year end under the bank facility of £20 million (2024:
overdraft facility of £15 million), the effect of a +/– 3.25%
(2024: +/– 3.25%) in the interest rate would result in an increase or
decrease to the Company’s statement of comprehensive income of £650,000
(2024: £488,000). Subsequent to the year end, the bank facility was fully
re-paid with effect 26 February 2025 and the facility withdrawn.
The Company’s portfolio is not directly exposed to interest rate risk.
3. Other Price Risk
Other price risks (i.e. the risk of changes in market prices, other than those
arising from interest rates or currency) may affect the value of the
investments.
Management of Other Price Risk
The Directors manage the market price risks inherent in the investment
portfolio by meeting regularly to monitor on a formal basis the Manager’s
compliance with the Company’s stated objectives and policies and to review
investment performance.
The Company’s portfolio is the result of the Manager’s investment process
and as a result is not correlated with the Company’s benchmark or the
markets in which the Company invests. Therefore, the value of the portfolio
will not move in line with the market but will move as a result of the
performance of the company shares within the portfolio.
If the value of the portfolio fell by 10% at the balance sheet date, the loss
after tax for the year would increase by £14 million (2024: loss after tax
for the year would increase by £16 million). Conversely, if the value of the
portfolio rose by 10%, the loss after tax would decrease (2024: loss after tax
would decrease) by the same amount.
Concentration of exposure to market price risk
There is a concentration of exposure to the UK, though it should be noted that
the Company’s investments may not be entirely exposed to economic conditions
in the UK, as many UK listed companies do much of their business overseas.
Fair Values of Financial Assets and Financial Liabilities
The financial assets and financial liabilities are either carried in the
balance sheet at their fair value (investments), or the balance sheet amount
is a reasonable approximation of fair value (due from brokers, dividends
receivable, accrued income, due to brokers, accruals, cash at bank and
borrowings).
Fair Value Hierarchy Disclosures
All of the Company’s investments are in the Level 1 category as set out in
IFRS 13, the three levels of which follow:
Level 1 – The unadjusted quoted price in an active market for identical
assets or liabilities that the entity can access at the measurement date.
Level 2 – Inputs other than quoted prices included within Level 1 that are
observable (i.e. developed using market data) for the asset or liability,
either directly or indirectly.
Level 3 – Inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of each
relevant asset/liability.
16. Maturity Analysis of Contractual Liability Cash Flows
The contractual liabilities of the Company are shown in note 11 and comprise
amounts due to brokers and accruals. All are paid under contractual terms. The
bank facility (formerly bank overdraft) was repayable upon demand. For amounts
due to brokers, this will generally be the purchase date of the investment
plus two business days; accruals would generally be due within three months.
17. Capital Management
The Company’s capital, or equity, is represented by its net assets which are
managed to achieve the Company’s investment objective set out on page 11.
The main risks to the Company’s investments are shown in the Strategic
Report under the ‘Principal Risks and Uncertainties’ section on pages 12
to 14. These also explain that the Company is able to gear and that gearing
will amplify the effect on equity of changes in the value of the portfolio.
The Board can also manage the capital structure directly since it determines
dividend payments and has taken the powers, which it is seeking to renew, to
buy-back shares, either for cancellation or to be held in treasury, and to
issue new shares or sell shares held in treasury.
The Company is subject to externally imposed capital requirements with respect
to the obligation and ability to pay dividends by s1158 Corporation Tax Act
2010 and by the Companies Act 2006, respectively, and with respect to the
availability of the bank facility (formerly bank overdraft facility) and by
the terms imposed by the lender. The Board regularly monitors, and has
complied with, the externally imposed capital requirements. This is unchanged
from the prior year.
Total equity at 31 January 2025, the composition of which is shown on the
Balance Sheet on page 47, was £136,644,000 (2024: £161,395,000).
18. Contingencies, Guarantees and Financial Commitments
Liabilities the Company is committed to honour but which are dependent on a
future circumstance or event occurring would be disclosed in this note if any
existed.
There were no contingencies, guarantees or other financial commitments of the
Company as at 31 January 2025 (2024: nil).
19. Related Party Transactions and Transactions with Manager
A related party is a company or individual who has direct or indirect control
or who has significant influence over the Company.
Under UK-adopted international accounting standards the Company has identified
the Directors as related parties. The Directors’ remuneration and interests
have been disclosed on page 37 with additional disclosure in note 4. No other
related parties have been identified.
Details of the Manager’s services and fees are disclosed in the Directors’
Report on page 29 and in note 3.
20. Post Balance Sheet Events
On 10 March 2025, Artemis Fund Managers Limited (“Artemis”) was appointed
as the Company’s Investment Manager and AIFM. The following changes have
also taken effect:
– the Company’s name changed to Artemis UK Future Leaders plc on 12 March
2025;
– the Company’s registered office has changed to 50 Bank Street, Canary
Wharf, London E14 5NT;
– the Company’s fund administration service provider has changed to The
Northern Trust Company;
– the Company’s custody and depositary service provider has changed to
Northern Trust Investor Services Limited;
– the Company’s corporate secretary has changed to Northern Trust
Secretarial Services (UK) Limited;
– the Company’s website changed to
https://www.artemisfunds.com/futureleaders
On 26 February 2025 the bank facility was fully re-paid and the facility
withdrawn.
2025 Financial Information
The figures and financial information for the year ended 31 January 2025 are
extracted from the Company's annual financial statements for that year and do
not constitute statutory accounts. The Company's annual financial statements
for the year to 31 January 2025 have been audited but have not yet been
delivered to the Registrar of Companies. The Auditor's report on the 2025
annual financial statements was unqualified, did not include a reference to
any matter to which the Auditor drew attention without qualifying the report,
and did not contain any statements under Section 498 of the Companies Act
2006.
2024 Financial Information
The figures and financial information for the year ended 31 January 2024 are
compiled from an extract of the published accounts for that year and do not
constitute statutory accounts. Those accounts have been delivered to the
Registrar of Companies and included the report of the Auditor which was
unqualified and did not contain a statement under Sections 498(2) or 498(3) of
the Companies Act 2006.
Annual Financial Report
The audited 2025 annual financial report will be available to shareholders,
and will be delivered to the Registrar of Companies, shortly. Copies may be
obtained during normal business hours from Artemis Fund Managers Limited,
Cassini House, 57 St James’s Street, London SW1A 1LD and via the Company’s
website: www.artemisfunds.com/futureleaders
A copy of the annual financial report will be submitted shortly to the
National Storage Mechanism ("NSM") and will be available for inspection at the
NSM, which is situated
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Notice of Annual General Meeting
THIS NOTICE OF ANNUAL GENERAL MEETING IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION. If you are in any doubt as to what action to take, you should
consult your stockbroker, solicitor, accountant or other appropriate
independent professional adviser authorised under the Financial Services and
Markets Act 2000. If you have sold or otherwise transferred all your shares in
Artemis UK Future Leaders plc, please forward this document and the
accompanying Form of Proxy to the person through whom the sale or transfer was
effected, for transmission to the purchaser or transferee.
NOTICE IS GIVEN that the Annual General Meeting (‘AGM’) of Artemis UK
Future Leaders plc will be held at the offices of Artemis Fund Managers
Limited at Cassini House, 57 St James’s Street, London SW1A 1LD at 12.00
noon on 5 June 2025 for the following purposes:
Ordinary Business
1. To receive and consider the Annual Financial Report for the year ended 31
January 2025.
2. To approve the Directors’ Remuneration Policy.
3. To approve the Annual Statement and Report on Remuneration for the year
ended 31 January 2025.
4. To approve the final dividend of 3.45p for the year ended 31 January 2025.
5. To re-elect Bridget Guerin as a Director of the Company.
6. To re-elect Graham Paterson as a Director of the Company.
7. To re-elect Mike Prentis as a Director of the Company.
8. To re-elect Simon Longfellow as a Director of the Company.
9. To re-appoint the auditor, Ernst & Young LLP.
10. To authorise the Audit Committee to determine the auditor’s
remuneration.
11. To approve the Investment Policy of the Company.
Special Business
To consider and, if thought fit, to pass the following resolutions of which
resolution 12 will be proposed as an ordinary resolution and resolutions 13 to
15 as special resolutions:
Authority to Allot Shares
12. That:
the Directors be generally and unconditionally authorised in accordance with
Section 551 of the Companies Act 2006 as amended from time to time prior to
the date of the passing of this resolution (the ‘Act’) to exercise all
powers of the Company to allot shares and grant rights to subscribe for, or
convert any securities into, shares up to an aggregate nominal amount (within
the meaning of Sections 551(3) and (6) of the Act) of £607,467, this being
10% of the Company’s issued ordinary share capital (excluding Treasury
Shares) as at 25 April 2025, such authority to expire at the conclusion of
the next AGM of the Company or the date 15 months after the passing of this
resolution, whichever is the earlier unless the authority is renewed or
revoked at any other general meeting prior to such time, but so that this
authority shall allow the Company to make offers or agreements before the
expiry of this authority which would or might require shares to be allotted,
or rights to be granted, after such expiry as if the authority conferred by
this resolution had not expired.
Disapplication of Pre-emption Rights
13. That:
the Directors be and are hereby empowered, in accordance with Sections 570 and
573 of the Act to allot equity securities (within the meaning of Section 560
(1), (2) and (3) of the Act) for cash, either pursuant to the authority given
by resolution 12 set out above or (if such allotment constitutes the sale of
relevant shares which, immediately before the sale, were held by the Company
as treasury shares) otherwise, as if Section 561 of the Act did not apply to
any such allotment, provided that this power shall be limited:
(a) to the allotment of equity securities in connection with a rights issue
in favour of all holders of a class of equity securities where the equity
securities attributable respectively to the interests of all holders of
securities of such class are either proportionate (as nearly as may be) to the
respective numbers of relevant equity securities held by them or are otherwise
allotted in accordance with the rights attaching to such equity securities
(subject in either case to such exclusions or other arrangements as the
Directors may deem necessary or expedient in relation to fractional
entitlements or legal or practical problems under the laws of, or the
requirements of, any regulatory body or any stock exchange in any territory or
otherwise);
(b) to the allotment (otherwise than pursuant to a rights issue) of equity
securities up to an aggregate nominal amount of £607,467, this being 10% of
the Company’s issued ordinary share capital (excluding Treasury Shares) as
at 25 April 2025; and
(c) to the allotment of equity securities at a price not less than the net
asset value per share (as determined by the Directors), and this power shall
expire at the conclusion of the next AGM of the Company or the date 15 months
after the passing of this resolution, whichever is the earlier unless the
authority is renewed or revoked at any other general meeting prior to such
time, but so that this power shall allow the Company to make offers or
agreements before the expiry of this power which would or might require equity
securities to be allotted after such expiry as if the power conferred by this
resolution had not expired; and so that words and expressions defined in or
for the purposes of Part 17 of the Act shall bear the same meanings in this
resolution.
Authority to Make Market Purchases of Shares
14. That:
the Company be generally and subject as hereinafter appears unconditionally
authorised in accordance with Section 701 of the Act to make market purchases
(within the meaning of Section 693(4) of the Act) of its issued ordinary
shares of 20p each in the capital of the Company (‘Shares’).
PROVIDED ALWAYS THAT:
(a) the maximum number of Shares hereby authorised to be purchased shall be
14.99% of the Company’s issued ordinary shares (excluding Treasury Shares),
this being 4,552,967 as at 25 April 2025;
(b) the minimum price which may be paid for a Share shall be 20p;
(c) the maximum price which may be paid for a Share must not be more than the
higher of: (i) 5% above the average of the mid-market values of the Shares
for the five business days before the purchase is made; and (ii) the higher of
the price of the last independent trade in the Shares and the highest then
current independent bid for the Shares on the London Stock Exchange;
(d) any purchase of Shares will be made in the market for cash at prices
below the prevailing net asset value per Share (as determined by the
Directors);
(e) the authority hereby conferred shall expire at the conclusion of the next
AGM of the Company or the date 15 months after the passing of this resolution,
whichever is the earlier, unless the authority is renewed or revoked at any
other general meeting prior to such time;
(f) the Company may make a contract to purchase Shares under the authority
hereby conferred prior to the expiry of such authority which will be executed
wholly or partly after the expiration of such authority and may make a
purchase of Shares pursuant to any such contract; and
(g) any Shares so purchased shall be cancelled or, if the Directors so
determine and subject to the provisions of Sections 724 to 731 of the Act and
any applicable regulations of the United Kingdom Listing Authority, be held
(or otherwise dealt with in accordance with Section 727 or 729 of the Act) as
treasury shares.
Period of Notice Required for General Meetings
15. THAT the period of notice required for general meetings of the Company
(other than AGMs) shall be not less than 14 clear days.
Dated this 28 April 2025
By order of the Board
Northern Trust Secretarial Services (UK) Limited
Corporate Company Secretary
Glossary of Terms and Alternative Performance Measures
Alternative Performance Measure (‘APM’)
An APM is a measure of performance or financial position that is not defined
in applicable accounting standards and cannot be directly derived from the
financial statements. The calculations shown in the corresponding tables are
for the year ended 31 January 2025 and 2024. The APMs listed here are widely
used in reporting within the investment company sector and consequently aid
comparability.
Benchmark (or Benchmark Index)
A market index, which averages the performance of companies in any sector,
giving a good indication of any rises or falls in the market. The benchmark
used in these accounts is the Deutsche Numis Smaller Companies + AIM
(excluding Investment Companies) Index, with dividends reinvested.
Capital dividend as a percentage of year end net assets (APM)
The percentage of year end net assets represented by a payment from revenue
reserves and capital reserves to fund the annual dividend payable in respect
of the year.
2025 (1) 2024
£’000 £’000
Dividends paid from capital in respect of the year:
First interim – –
Second interim – –
Third interim – –
Final 437 1,278
a 437 1,278
Net Assets b 136,644 161,395
Capital dividend as a percentage of year end net assets c = a/b 0.3% 0.8%
(1) Excludes the one-off elective special dividend (return of capital) of
484.85p paid to shareholders on 8 October 2024.
(Discount)/Premium (APM)
Discount is a measure of the amount by which the mid-market price of an
investment company share is lower than the underlying net asset value
(‘NAV’) of that share. Conversely, premium is a measure of the amount by
which the mid-market price of an investment company share is higher than the
underlying net asset value of that share. In this Annual Financial Report the
discount is expressed as a percentage of the net asset value per share and is
calculated according to the formula set out below. If the shares are trading
at a premium the result of the below calculation will be positive and if they
are trading at a discount it will be negative.
Share price a Net asset value per share (note 14) b 2025 375.00p 449.88p 2024 424.00p 477.12p
Discount c = (a–b)/b (16.6)% (11.1)%
Dividend Yield (APM)
The annual dividend payable expressed as a percentage of the year end share
price.
Dividends per share payable in respect of the year (note 8) a Share price b 2025 (1) 15.00p 375.00p 2024 16.96p 424.00p
Dividend Yield c = a/b 4.0% 4.0%
(1) Excludes the one-off elective special dividend (return of capital) of
484.85p paid to shareholders on 8 October 2024.
Gearing (APM)
The gearing percentage reflects the amount of borrowings that a company has
invested. This figure indicates the extra amount by which net assets, or
shareholders’ funds, would move if the value of a company’s investments
were to rise or fall. A positive percentage indicates the extent to which net
assets are geared; a nil gearing percentage, or ‘nil’, shows a company is
ungeared. A negative percentage indicates that a company is not fully invested
and is holding net cash as described below.
There are several methods of calculating gearing and the following has been
used in this report:
Gross Gearing (APM)
This reflects the amount of gross borrowings in use by a company and takes no
account of any cash balances. It is based on gross borrowings as a percentage
of net assets. As at 31 January 2025 the Company had gross borrowings of
£12,350,000 (2024: £8,753,000).
2025 2024
£’000 £’000
Bank facility 12,350 –
Bank overdraft facility – 8,753
Gross borrowings a 12,350 8,753
Net asset value b 136,644 161,395
Gross gearing c = a/b 9.0% 5.4%
Net Gearing or Net Cash (APM)
Net gearing reflects the amount of net borrowings invested, i.e. borrowings
less cash and cash equivalents (incl. investments in money market funds). It
is based on net borrowings as a percentage of net assets. Net cash reflects
the net exposure to cash and cash equivalents, as a percentage of net assets,
after any offset against total borrowings.
2025 2024
£’000 £’000
Bank facility 12,350 –
Bank overdraft facility – 8,753
Less: cash and cash equivalents (2,472) –
Net borrowings a 9,878 8,753
Net asset value b 136,644 161,395
Net gearing c = a/b 7.2% 5.4%
Maximum Authorised Gearing
This reflects the maximum authorised borrowings of a company taking into
account both any gearing limits laid down in the investment policy and the
maximum borrowings laid down in covenants under any borrowing facility and is
calculated as follows:
2025 2024
£’000 £’000
Maximum authorised borrowings as laid down in:
Investment policy:
– lower of 30% of net asset value; and a = 30% x e 40,993 48,419
– £25 million b 25,000 25,000
Bank facility covenants: lower of 30% of net asset value
and £20 million c 20,000 15,000
(31 January 2024: bank overdraft facility covenants:
lower of 30% of net asset value and £15 million)
Maximum authorised borrowings (d = lower of a, b and c) d 20,000 15,000
Net asset value e 136,644 161,395
Maximum authorised gearing f = d/e 14.6% 9.3%
Leverage
Leverage, for the purposes of the Alternative Investment Fund Managers
Directive (‘AIFMD’), is not synonymous with gearing as defined above. In
addition to borrowings, it encompasses anything that increases the Company’s
exposure, including foreign currency and exposure gained through derivatives.
Leverage expresses the Company’s exposure as a ratio of the Company’s net
asset value. Accordingly, if a Company’s exposure was equal to its net
assets it would have leverage of 100%. Two methods of calculating such
exposure are set out in the AIFMD, gross and commitment. Under the gross
method, exposure represents the aggregate of all the Company’s exposures
other than cash balances held in base currency and without any offsetting. The
commitment method takes into account hedging and other netting arrangements
designed to limit risk, offsetting them against the underlying exposure (see
page 69 for further detail on leverage at year end).
Market Capitalisation
Is calculated by multiplying the stockmarket price of an ordinary share by the
number of ordinary shares in issue.
Net Asset Value (‘NAV’)
Also described as shareholders’ funds, the NAV is the value of total assets
less liabilities. Liabilities for this purpose include current and long-term
liabilities. The NAV per share is calculated by dividing the net asset value
by the number of ordinary shares in issue (excluding shares held in treasury).
For accounting purposes assets are valued at fair (usually market) value and
liabilities are valued at amortised cost (their repayment – often nominal
– value).
Ongoing Charges Ratio (APM)
The ongoing administrative costs of operating the Company are encapsulated in
the ongoing charges ratio, which is calculated in accordance with guidance
issued by the AIC. The calculation incorporates charges allocated to capital
in the financial statements as well as those allocated to revenue, but
excludes non-recurring costs, transaction costs of investments, finance costs,
taxation, and the costs of buying back or issuing shares. The ongoing charges
ratio is the aggregate of these costs expressed as a percentage of the daily
average net asset value reported in the year.
2025 2024
£’000 £’000
Investment management fee 1,261 1,211
Other expenses 836 427
Less: costs in relation to custody dealing charges
and one-off legal and professional costs (466) (35)
Total recurring expenses a 1,631 1,603
Average daily net assets b 158,051 158,683
Ongoing charges ratio % c = a/b 1.03% 1.01%
Return
The return generated in a period from the investments including the increase
and decrease in the value of investments over time and the income received.
Total Return
Total return is the theoretical return to shareholders that measures the
combined effect of any dividends paid together with the rise or fall in the
share price or NAV. In this Annual Financial Report these return figures have
been sourced from LSEG Data & Analytics who calculate returns on an industry
comparative basis. The figures calculated below are one year total returns,
however the same calculation would be used for three, five and ten year total
returns where quoted in this report, taking the respective NAVs and Share
Prices period for the opening and closing periods and adding the impact of
dividend reinvestments for the relevant periods.
Net Asset Value Total Return (APM)
Total return on net asset value per share, assuming dividends paid by the
Company were reinvested into the shares of the Company at the NAV per share at
the time the shares were quoted ex-dividend.
Share Price Total Return (APM)
Total return to shareholders, on a mid-market price basis, assuming all
dividends received were reinvested, without transaction costs, into the shares
of the Company at the time the shares were quoted ex-dividend.
Net Asset Share
2025 Value Price
As at 31 January 2025 449.88p 375.00p
As at 31 January 2024 477.12p 424.00p
Change in year a –5.7% –11.6%
Impact of dividend reinvestments (1) b 3.3% 3.6%
Total return for the year c = a+b –2.4% –8.0%
Net Asset Share
2024 Value Price
As at 31 January 2024 As at 31 January 2023 477.12p 517.09p 424.00p 451.00p
Change in year a –7.7% –6.0%
Impact of dividend reinvestments (1) b 3.6% 4.2%
Total return for the year c = a+b –4.1% –1.8%
(1) Total dividends paid during the year of 16.96p (2024: 18.24p) reinvested
at the NAV or share price on the ex-dividend date. NAV or share price falls
subsequent to the reinvestment date consequently further reduce the returns,
vice versa if the NAV or share price rises.
Benchmark
Total return on the benchmark is on a mid-market value basis, assuming all
dividends received were reinvested, without transaction costs, into the shares
of the underlying companies at the time the shares were quoted ex-dividend.
Volatility
Volatility refers to the amount of uncertainty or risk about the size of
changes in a security’s value. It is a statistical measure of the dispersion
of returns for a given security or market index measured by using the standard
deviation or variance of returns from that same security or market index.
Commonly, the higher the volatility, the riskier the security.
Copyright (c) 2025 PR Newswire Association,LLC. All Rights ReservedRecent news on Artemis UK Future Leaders
See all newsREG-Artemis UK Future Leaders Plc: Net Asset Value(s)
AnnouncementREG-Artemis UK Future Leaders Plc: PDMR Shareholding
AnnouncementREG-Artemis UK Future Leaders Plc: PDMR Shareholding
AnnouncementREG-Artemis UK Future Leaders Plc: Net Asset Value(s)
AnnouncementREG-Artemis UK Future Leaders Plc: PDMR Shareholding
Announcement