REG-Artemis UK Future Leaders Plc: Interim Financial Report
15/10/2025 07:02
LEI: 549300K1D1P23R8U4U50
Artemis UK Future Leaders plc
Interim Financial Report
The following text is extracted from the Interim Financial Report of the
Company for the half year ended 31 July 2025. All page numbers below refer to
the Interim Financial Report which will be made available on the Company's
website:
www.artemisfunds.com/futureleaders
A copy of the Interim Financial Report will also be submitted to the National
Storage Mechanism and will shortly be available for inspection online at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Chairman’s Statement
Dear shareholders,
I am writing to report the results for the six months ended 31 July 2025. In
what continues to be a challenging market backdrop for UK smaller companies,
the Trust delivered a 1.1% total return on a net asset value (‘NAV’) basis
and a 4.0% total return on a share price basis, both underperforming our
benchmark, the Deutsche Numis Smaller Companies + AIM (ex-Investment
Companies) index, which returned 6.7% over the same period. We notified
Shareholders that the Managers were to be changed from Invesco to Artemis in
mid-March. This took place during this six-month reporting period. Artemis
took around two months to rebalance the portfolio, so it is too early to judge
their impact on the Portfolio’s performance.
Performance and markets
The performance reflects a period of modest recovery in UK smaller companies,
yet it was outpaced by gains in the broader market. The NAV return lagged
markedly behind that of the benchmark; and the share price return, while
stronger than NAV, still fell short.
The market environment has remained volatile, influenced by inflationary
concerns, geopolitical tensions and softness in domestic consumption. Although
pockets of opportunity have emerged, especially among high-quality,
cash-generative smaller businesses, broader sentiment to UK small companies
remains cautious.
Dividends and dividend policy
Our dividend policy remains unchanged: to distribute all available revenue
income in the form of quarterly dividends, supplemented, as necessary, by
realised capital reserves. The policy target is a 4% dividend yield (based on
the year-end share price) for the year ending 31 January 2026, subject to
normal circumstances.
For the six-month period to 31 July 2025, the Board continues to review the
balance of revenue and capital contributions to ensure sustainable
distributions. A first interim dividend for the year ending 31 January 2026 of
3.85 pence per share was paid in August. A second interim dividend of
3.85 pence per share will be paid in December. The Board remains committed to
delivering consistent quarterly payments and maintaining alignment with the
stated yield goal.
Update on the transition to Artemis
As shareholders will recall, Artemis were appointed as the Trust’s manager
in March 2025, with Mark Niznik and Will Tamworth now running the portfolio.
The handover is complete, with the portfolio now reflecting the
high-conviction approach of Artemis.
The new managers have repositioned the portfolio towards companies with robust
balance sheets, strong cashflows and long-term growth potential. At the same
time, they have been careful to manage transition costs and market impact.
While the benefits of this transition will take time to be fully reflected in
performance, the Board remains confident that the Trust is now well placed
under the stewardship of Artemis.
Outlook
The managers have been saying for some time that the UK economy is in better
shape than the headlines suggest. Their view was confirmed in mid-August on
the news that GDP growth had outpaced expectations in Q2, making the UK the
fastest growing G7 economy in the first half of the year. Meanwhile, household
debt (as a percentage of gross disposable income) is at its lowest since the
late ‘90s.
It is possible that the managers are wrong and the UK is about to enter a
recession. However, there are two other scenarios that they think are far more
likely and represent something of an each-way bet for the UK smaller companies
sector.
On the one hand, if employment holds up, consumer confidence and spending may
slowly increase. This pushes up economic growth in the UK at a time when some
commentators expect it to falter in the US. The relative valuation disparity
could prompt a modest investor switch which fuels flows into the UK. Small-cap
returns get turbo-charged as they benefit from greater domestic revenues.
On the other hand, the UK hobbles on with more of the same: a rather moribund
economy where, even though investors don’t return to UK smaller companies,
low valuations mean takeovers and share buybacks continue to drive returns.
Final thoughts
On behalf of the Board, I would like to thank shareholders for your ongoing
support during this transitionary period. We continue to believe in the
long-term potential of the Trust and are confident that the appointment of
Artemis, together with our robust dividend policy and active stewardship, will
assist in delivering sustainable returns.
We remain closely aligned with shareholder interests and committed to clear,
transparent communication. I look forward to updating you further as we move
into the second half of the year.
Bridget Guerin
Chairman
14 October 2025
Portfolio Managers’ report
Statement from the previous managers
Invesco Perpetual UK Smaller Companies plc’s net asset value (NAV) delivered
a total return of –4.6% during the period 1 February to 9 March 2025. This
was modestly behind its Deutsche Numis Smaller Companies plus AIM (Inv-Trust)
benchmark which returned –4.4% during the same period.
During this period the fund managers had been instructed by the Board to
administer the portfolio on a ‘care and maintenance’ basis. We were asked
not to purchase any new holdings and to take instructions on sales and
reductions in holdings in order to raise funds for the redemption of the debt
facility. Effectively we were taking instructions from the Board and Artemis
via the Board.
Jonathan Brown & Robin West
Invesco Fund Managers Limited
Portfolio managers until 9 March 2025
Performance
Artemis UK Future Leaders plc’s net asset value (NAV) rose 1.1% in the six
months to the end of July 2025, compared with gains of 6.7% from its Deutsche
Numis Smaller Companies plus AIM (Inv-Trust) benchmark1.
Since we took charge of the trust on 7 March, NAV has risen by 6.5% compared
with gains of 11.6% from its benchmark. It took us less than three months to
reposition the portfolio, so it better reflects our investment philosophy.
With this process now complete, we have added a small amount of gearing to the
trust which we hope can be taken as a sign of confidence, as should the fact
that we have bought 726,000 shares in Artemis UK Future Leaders between us.
Negatives
GB Group, a provider of identity-verification and fraud-prevention services,
was a detractor from performance. Full-year results were in line with
expectations, but some analysts cut forecasts for next year (in large part due
to currency movements) despite management reiterating that they expect to meet
full-year expectations. We remain positive on GB Group’s medium-term
prospects and felt the share price reaction was overdone. An 8% free cashflow
yield looks attractive to us for what is a business with a largely recurring
earnings model. We added to our holding.
Victorian Plumbing Group also performed poorly after cutting forecasts: most
of the downgrade came from new investment in the acquired MFI brand in order
to enter the adjacent UK homewares market. The company also underestimated the
impact of depreciation following completion of its new warehouse and is yet to
see an improvement in the market backdrop. We added to our holding: the
investment in MFI represents a low-cost way of entering a new large market and
can be curtailed quickly if it is not successful.
Translation services provider RWS delivered a couple of negative updates. It
downgraded its expectations for profit before tax due to several issues
including onboarding challenges with two new customers, weakness in its life
sciences division and the impact of currency movements. The shares are now
trading at just 5x earnings, there are no balance sheet issues and the
incoming chief executive just bought 1 million shares. However, RWS has a lot
of work to do to regain investors’ confidence.
Positives
Since we took charge of the trust on 10 March, the defence stocks in our
portfolio have done well, with holdings in Avon Technologies, Chemring Group
and Serco Group (which generates about 40% of its revenues from this area)
rising strongly.
Our financial positions have fared even better. The portfolio’s best
performer during the period was Secure Trust Bank, which fell significantly in
October last year when three Court of Appeal decisions relating to motor
finance went against FirstRand Bank and Close Brothers (which we don’t own).
Aside from a potentially large compensation bill, Secure Trust Bank also
issued a profit warning driven by a slower recovery in its vehicle finance
division, after the FCA’s Borrowers in Financial Difficulty (BiFD) review
led to a temporary pause in collections and a higher default rate.
At the time, we felt that the shares offered substantial potential upside,
trading as they were at a 75% discount to book value. Since then, they have
rebounded past their October starting price with the company’s loss-making
vehicle finance book put into run-off. After the end of the reporting period,
the UK Supreme Court largely overturned the Court of Appeal’s rulings.
Pawnbroker H&T Group and foreign exchange specialist Alpha Group International
announced they were to be taken over, at premiums of 44% and 55% respectively
to their pre-offer share prices. M&A has been and is likely to remain a driver
of performance.
Another is buybacks: over the first half of the year we have seen a record
number of holdings in our open-ended fund reduce their share count. We see
this as indicative of management teams expressing the view that:
a) Their businesses have surplus capital (our median holding is forecast to
have no net debt);
b) They are confident in the outlook; and
c) Their share prices do not reflect fundamental value.
Activity
With our portfolio rebalancing now effectively complete, there was a 75%
overlap between the trust and our open-ended Artemis UK Smaller Companies Fund
as at the 31 July period end. It is now closer to 90% as at the date of
publication.
If you are wondering why 25% is different, about 10 percentage points is in
companies we own in both vehicles, but in different weights, while the other
15 percentage points is in companies we own in one and not the other (there
will always be shares entering or exiting any live portfolio, while in some
cases we have exposure to the same theme across both vehicles through
different companies).
With so many changes in the portfolio, we thought it would be more instructive
to focus on the four largest holdings – all of which are leaders in their
niches.
• Serco Group – Serco Group is the market leader in government
outsourcing. We like the visibility and inflation protection provided by its
long-term contracts. The previous management team introduced greater rigour
into the business and addressed some problematic contracts, leaving a very
cash-generative, high-return-on-capital business with a strong balance sheet.
We feel a 7% free cashflow yield is attractive.
• IntegraFin Holdings – IntegraFin Holdings is the parent company of the
retail investment platform Transact. It has recurring revenue (which
admittedly rises and falls with the market) and, unlike some of its
competitors, does not earn any interest on client funds. It makes high
margins, generates strong cashflows (we can think of few companies with a
cleaner set of accounts) and operates in a segment that is seeing structural
growth as investors migrate onto platforms. In addition, it has a very strong
balance sheet with more than £200 million net cash. With these
characteristics we see a free cashflow yield approaching 6% for next year as
attractive.
• GB Group – GB Group is a market leader in online fraud prevention and
identity verification and in many cases is embedded in its customers’ routes
to market. Although there has been a post-Covid hangover (as online activity
has reverted to more normal levels from an unsustainable position) we believe
this remains a structurally growing market. It now has a strong balance sheet
and trades on a high single-digit free cashflow yield.
• MONY Group – MONY Group, the owner of the MoneySuperMarket and
MoneySavingExpert brands, is the UK’s market-leading price-comparison
platform. While it may not be the largest in every category (for example
Compare the Market is bigger in insurance), it has the broadest offering. A
wide range of verticals increases customer touchpoints: most consumers only
buy car insurance once per year and only switch every few years. By also
offering current accounts, broadband, energy, loans, travel insurance and
other products, MONY Group interacts more frequently with visitors to its
websites. Its rewards programme, SuperSaveClub, goes further in helping to
convert a one-off transaction into a recurring revenue stream and therefore
reduces its reliance on Google or television advertising. It is this
opportunity that really excites us and is certainly not reflected in a free
cashflow yield approaching 10%.
Outlook
We continue to believe that the negative narrative that surrounds the UK
economy is not supported by the data: the fundamentals are better than widely
perceived. Consumers are relatively well positioned (with rising real incomes,
low unemployment and declining household debt); businesses have strong balance
sheets (the median company in the trust is forecast to have no net debt); and
the political backdrop is (relatively) stable. With the national insurance
increases now in the past, we are confident that the slight softening we have
already seen in the labour market will not translate into a spike in
unemployment. This view is supported by our conversations with companies. If
we are right, then we expect a gradual recovery in consumer, business and
ultimately investor confidence, resulting in a recovery in consumer spending,
business investment and UK equity allocations.
In the interim, we continue to see high levels of takeover activity – third
parties attracted to the same traits as we are, taking a more positive view on
the outlook and illustrating the degree of undervaluation of UK smaller
companies (the average takeover premium is close to 50%). We are also seeing
record levels of holdings buying back their own shares.
Mark Niznik & William Tamworth
Artemis Fund Managers Limited
Portfolio managers from 10 March 2025
14 October 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 threats, geo-political tensions and climate related risks, have
been considered during the period 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. 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 Portfolio Managers 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 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 pages 28 to 29. 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. The Manager reviews the performance of all third-party providers regularly 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 are reviewed on an ongoing basis and the Directors are satisfied that the Manager has in place robust plans and infrastructure 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 receives regular update reports from the Manager and third-party service providers on business continuity processes and has 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.
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. The
Manager’s Compliance and Internal Audit team produce annual reports for review by the Company’s Audit Committee.
In the view of the Board, these principal risks and uncertainties are as much
applicable to the remaining six months of the financial year as they were to
the six months under review.
Portfolio of investments
At 31 July 2025
Market Value Portfolio Exposure*
Company Sector £’000 £'000 %
Serco Group Industrial Support Services 4,508 4,508 3.1
IntegraFin Holdings Investment Banking and Brokerage Services 2,494 4,103^ 2.8
GB Groupᴬᴵᴹ Software and Computer Services 3,139 3,813^ 2.6
MONY Group Software and Computer Services 3,458 3,781^ 2.6
Brooks Macdonald Group Investment Banking and Brokerage Services 3,629 3,629 2.5
Mears Group Industrial Support Services 3,485 3,485 2.4
Moonpig Group Retailers 3,141 3,475^ 2.4
Chemring Group Aerospace and Defence 3,421 3,421 2.3
Avon Technologies Aerospace and Defence 3,352 3,352 2.3
Secure Trust Bank Banks 3,263 3,263 2.2
NCC Group Software and Computer Services 2,167 3,231^ 2.2
Gamma Communications Telecommunications Service Providers 2,473 3,143^ 2.2
Wilmington Media 2,200 3,043^ 2.1
Coats Group General Industrials 2,972 2,972 2.0
Telecom Plus Electricity 2,411 2,931^ 2.0
Dunelm Group Retailers 2,912 2,912 2.0
Hilton Food Group Food Producers 2,904 2,904 2.0
Morgan Sindall Group Construction and Materials 2,877 2,877 2.0
Hollywood Bowl Group Travel and Leisure 2,155 2,834^ 2.0
Future Media 1,323 2,784^ 1.9
Alpha Group International Investment Banking and Brokerage Services 2,717 2,717 1.9
JTC Investment Banking and Brokerage Services 1,986 2,684^ 1.8
Wickes Group Retailers 2,536 2,536 1.7
J D Wetherspoon Travel and Leisure 2,529 2,529 1.7
Norcros Construction and Materials 1,592 2,473^ 1.7
Victorian Plumbing Group AIM Retailers 2,429 2,429 1.7
On the Beach Group Travel and Leisure 2,361 2,361 1.6
Restore AIM Industrial Support Services 2,338 2,338 1.6
Young & Co’s Brewery – Non-Voting AIM Travel and Leisure 2,306 2,306 1.6
Halfords Group Retailers 2,228 2,228 1.5
GlobalData AIM Industrial Support Services 2,198 2,198 1.5
DFS Furniture Retailers 2,194 2,194 1.5
Next 15 Group AIM Media 2,185 2,185 1.5
Henry Boot Real Estate Investment and Services 1,473 2,157^ 1.5
Tatton Asset Management AIM Investment Banking and Brokerage Services 2,133 2,133 1.5
4Imprint Group Media 2,114 2,114 1.5
SSP Group Travel and Leisure 2,104 2,104 1.4
Oxford Instruments Electronic and Electrical Equipment 2,064 2,064 1.4
Kainos Group Software and Computer Services 1,970 1,970 1.3
Johnson Service Group Industrial Support Services 1,955 1,955 1.3
MJ Gleeson Household Goods and Home Construction 1,892 1,892 1.3
Harworth Group Real Estate Investment and Services 441 1,878^ 1.3
Accesso Technology Group AIM Software and Computer Services 1,871 1,871 1.3
Netcall AIM Software and Computer Services 1,806 1,806 1.2
Energean Oil, Gas and Coal 1,783 1,783 1.2
RWS AIM Industrial Support Services 1,750 1,750 1.2
YouGov AIM Media 1,698 1,698 1.2
NIOX Group AIM Medical Equipment and Services 1,660 1,660 1.1
Auction Technology Group Software and Computer Services 1,621 1,621 1.1
TT Electronics Technology Hardware and Equipment 1,543 1,543 1.1
LBG Media AIM Media 1,537 1,537 1.1
M&C Saatchi AIM Media 1,428 1,428 1.0
Workspace Group Real Estate Investment Trusts 1,405 1,405 1.0
Morgan Advanced Materials Electronic and Electrical Equipment 1,376 1,376 0.9
Videndum Industrial Engineering 1,371 1,371 0.9
Severfield Construction and Materials 1,369 1,369 0.9
Keller Group Construction and Materials 1,259 1,259 0.9
Jadestone Energy AIM Oil, Gas and Coal 1,160 1,160 0.8
CLS Real Estate Investment and Services 1,065 1,065 0.7
Warpaint London AIM Personal Goods 1,064 1,064 0.7
SIG Industrial Support Services 1,046 1,046 0.7
Beeks Financial Cloud
Group AIM Software and Computer Services 1,017 1,017 0.7
Victrex Chemicals 842 842 0.6
FDM Group Industrial Support Services 506 506 0.3
Total Investments: 64 (31 January 2025: 60) 134,206 146,083 100.0
Ordinary shares unless stated otherwise.
* The Portfolio Exposure indicates the impact on market price movements
resulting from the ownership of shares and derivative instruments. The Market
Value represents the fair value of the portfolio, which is reflected on the
Condensed Balance Sheet. In the case of holding a Contract for Difference
(CFD), the Market Value reflects the profit or loss generated by the contract
since its inception, based on the movement of the underlying share price. CFDs
provide investors with the benefits and risks of owning a security without
actually owning it. There is no delivery of physical goods or securities,
which means that CFDs are generally regarded as an easier method of settlement
because losses and gains are paid in cash. CFDs are disclosed in Derivative
assets/liabilities at market value in the Condensed Balance Sheet on page 19.
However, when the Company solely holds shares, both the Market Value and the
Portfolio Exposure align.
AIM Investments quoted on AIM.
^ Includes CFD position.
Governance
Going Concern
The financial statements have been prepared on a going concern basis. The
Directors, having considered the nature and liquidity of the portfolio, the
Company’s investment objective and the Company’s projected income and
expenditure, are satisfied that the Company has adequate resources to continue
in operational existence for a period of at least twelve months from the date
of approval of the financial statements.
The Board is therefore satisfied that it is appropriate to continue to adopt
the going concern basis in preparing the financial statements. The Company has
a portfolio of investments which are considered to be readily realisable and
is able to meet all of its liabilities from its assets and income generated
from them. Ongoing charges are around 0.84% of net assets.
Related Party Transactions and Transactions with the Manager
Note 19 of the Company’s 2025 Annual Financial Report gives details of
related party transactions and transactions with the Manager. This report is
available on the Company’s section of the Manager’s website at
www.artemisfunds.com/futureleaders.
Directors’ Responsibility Statement in respect of the preparation of the
Half-Yearly Financial Report
The Directors are responsible for preparing the Half-Yearly Financial Report
using accounting policies consistent with applicable law and International
Financial Reporting Standards.
The Directors confirm that to the best of their knowledge:
– the condensed set of financial statements contained within the
Half-Yearly Financial Report has been prepared in accordance with the
UK-adopted International Accounting Standard 34 ‘Interim Financial
Reporting’;
– the interim management report, together with the Chairman’s Statement
and Portfolio Managers’ Report, includes a fair review of the information
required by 4.2.7R and 4.2.8R of the FCA’s Disclosure Guidance and
Transparency Rules; and
– the interim management report includes a fair review of the information
required on related party transactions.
The Half-Yearly Financial Report has not been audited or reviewed by the
Company’s auditor.
Signed on behalf of the Board of Directors.
Bridget Guerin
Chairman
14 October 2025
Condensed statement of comprehensive income
Six months ended Six months ended
31 July 2025 31 July 2024
(unaudited) (unaudited)
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
(Loss)/profit on investments held at fair value – (498) (498) – 20,361 20,361
Income 2 2,381 – 2,381 2,855 – 2,855
Net gains on derivatives – 255 255 – – –
Investment management fee 3 (15) (359) (374) (98) (553) (651)
Other expenses (263) (1) (264) (238) (150) (388)
Profit/(loss) before finance costs and taxation 2,103 (603) 1,500 2,519 19,658 22,177
Finance costs 3 (7) (44) (51) (41) (236) (277)
Profit/(loss) before taxation 2,096 (647) 1,449 2,478 19,422 21,900
Taxation 4 – – – – – –
Profit/(loss) after taxation 2,096 (647) 1,449 2,478 19,422 21,900
Return/(loss) per ordinary share 6.90p (2.13)p 4.77p 7.33p 57.41p 64.74p
Weighted average number of ordinary shares in issue during the period 30,373,362 33,826,929
The total columns of this statement represent the Company’s statement of
comprehensive income, prepared in accordance with UK-adopted international
accounting standards. The profit/(loss) after taxation is the total
comprehensive income/(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 period.
Condensed statement of changes in equity
Six months ended 31 July 2025 (unaudited)
Capital
Share Share redemption Capital Revenue
capital premium reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
At 31 January 2025 9,965 22,366 4,063 98,470 1,780 136,644
Total comprehensive (loss)/income for the period – – – (647) 2,096 1,449
Dividends declared and paid – – – (1,607) (1,780) (3,387)
At 31 July 2025 9,965 22,366 4,063 96,216 2,096 134,706
Six months ended 31 July 2024 (unaudited)
Capital
Share Share redemption Capital Revenue
capital premium reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
At 31 January 2024 10,642 22,366 3,386 123,147 1,854 161,395
Total comprehensive income for the period – – – 19,422 2,478 21,900
Dividends paid – – – (1,278) (1,854) (3,132)
At 31 July 2024 10,642 22,366 3,386 141,291 2,478 180,163
Condensed balance sheet
31 July 31 January
2025 2025
Notes £’000 £’000
Non-current assets
Investments held at fair value through profit or loss 134,163 143,920
Current assets
Amounts due from brokers 1,427 2,404
Prepayments and accrued income 512 435
Cash and cash equivalents 94 2,472
Variation margin receivable 210 –
Derivative assets 168 –
2,411 5,311
Total assets 136,574 149,231
Current liabilities
Amounts due to brokers (225) –
Bank facility – (12,350)
Accruals (139) (237)
Dividends payable (1,169) –
Collateral pledged (210) –
Derivative liabilities (125) –
(1,868) (12,587)
Total assets less current liabilities 134,706 136,644
Net assets 134,706 136,644
Capital and reserves
Share capital 9,965 9,965
Share premium 22,366 22,366
Capital redemption reserve 4,063 4,063
Capital reserve 96,216 98,470
Revenue reserve 2,096 1,780
Total shareholders’ funds 134,706 136,644
Net asset value per ordinary share 443.50p 449.88p
Number of ordinary shares in issue at the period end 6 30,373,362 30,373,362
Bridget Guerin
Chairman
14 October 2025
Condensed statement of cash flows
Six months Six months
ended ended
31 July 31 July
2025 2024
Notes £’000 £’000
Cash flow from operating activities
Profit/(loss) before taxation 1,449 21,900
Finance costs 51 277
Adjustments for:
Purchases of investments (72,708) (15,495)
Sales of investments 83,169 17,427
Purchases of derivatives (43) –
10,418 1,932
Loss/(profit) on investments held at fair value 498 (20,361)
(Increase)/decrease in receivables (77) 46
(Decrease)/increase in payables (98) 186
Net cash inflow from operating activities 12,241 3,980
Cash flow from financing activities
Finance cost paid (51) (277)
Bank overdraft repayment – (8,753)
Bank facility (repayment)/drawdown (12,350) 8,200
Dividends paid 5 (2,218) (3,132)
Net cash outflow from financing activities (14,619) (3,962)
Net (decrease)/increase in cash and cash equivalents (2,378) 18
Cash and cash equivalents at start of the period 2,472 –
Cash and cash equivalents at the end of the period 94 18
Reconciliation of cash and cash equivalents to the
Balance Sheet is as follows:
Cash held at custodian 94 18
Cash and cash equivalents 94 18
Cash flow from operating activities includes:
Dividends received 2,242 2,868
Interest received 2 –
As the Company did not have any long term debt at both the current and prior
period ends, no reconciliation of the financial liabilities is presented.
Notes to the condensed financial statements
1. Basis of preparation
The condensed financial statements have been prepared using the same
accounting policies as those adopted in the Company’s 2025 Annual Financial
Report*. They have been prepared on an historical cost basis, in accordance
with the applicable UK-adopted international accounting standards and, where
possible, in accordance with the Statement of Recommended Practice for
Financial Statements of Investment Trust Companies and Venture Capital Trusts,
updated by the Association of Investment Companies in July 2022 (‘AIC
SORP’).
*The Company utilises Contracts for Difference (CFDs), often referred to as
Equity Swaps for the purposes of gearing, with the following accounting
policy.
Derivatives
The contracts for difference (‘CFD’) held in the portfolio are valued
based on the price of the underlying security or index which they are
purchased to reflect. The nature and intended use of these derivatives is to
synthetically allow the Company to go long or short on an underlying asset
without the need to trade the physical securities. They are valued based on
the quoted bid price of the underlying security when held long. There are
revenue and capital returns to be derived from these instruments. Dividends on
contracts for difference are recognised as revenue for long positions and as
an expense for short positions when the securities are quoted ex-dividend.
Cash held at CFD brokers as margin is reflected separately within cash and
cash equivalents balances. Interest on margin accounts held with brokers is
included in the revenue return. All other gains/losses and cash flows from
derivatives are included in the capital return.
2. Income
Six months Six months
ended ended
31 July 31 July
2025 2024
£’000 £’000
Income from investments:
UK dividends
– ordinary 2,102 2,643
– special 183 150
– property income distribution 110 –
Overseas dividends 17 62
2,333 2,855
Other income:
Deposit interest 2 –
Derivative income 21 –
Liquidity fund income 25 –
2,381 2,855
No special dividends have been recognised in capital during the period (31
July 2024: £nil).
Overseas dividends include dividends received on UK listed investments where
the investee company is domiciled outside of the UK.
3. Management fee and finance costs
The investment management fee and finance costs are allocated 15% to revenue
and 85% to capital.
A base management fee is payable monthly in arrears under the new agreement
with Artemis. The fee is calculated at a rate of 0.65% per annum on the first
£50 million of the Company’s net assets, and 0.55% per annum on net assets
above £50 million (31 July 2024: 0.75% per annum on gross assets).
As part of the transition, Artemis has agreed to a nine-month fee holiday,
covering the period from 7 March to 7 December 2025. The fee holiday fully
offsets the termination fee paid to Invesco, and in addition means that the
Company benefits from paying no management fee for the period 21 June to 7
December 2025.
4. Taxation and Investment Trust Status
No tax liability arises on capital gains because the Company has been accepted
by HMRC as an approved investment trust and it is the intention of the
Directors to conduct the affairs of the Company so that it continues to
satisfy the conditions for this approval.
5. Dividends paid on ordinary shares
Six months ended Six months ended
31 July 2025 31 July 2024
Rate £’000 Rate £’000
Dividends paid during the period:
Third interim (prior year) 3.85p 1,170 3.85p 1,302
Final (prior year) 3.45p 1,048 5.41p 1,830
Total dividends paid 7.30p 2,218 9.26p 3,132
Dividends payable in respect of the year:
First interim 3.85p 1,169 – –
Total dividends declared and paid 11.15p 3,387 9.26p 3,132
The first interim dividend of 3.85p per ordinary share (31 July 2024: 3.85p)
is payable on 29 August 2025 to shareholders on the register on 1 August 2025.
A second interim dividend of 3.85p (2024: 3.85p) has been declared and will be
paid on 5 December 2025 to ordinary shareholders on the register on 7 November
2025.
6. Share capital, including movements
Share capital represents the total number of shares in issue, including
treasury shares.
31 July 31 January
2025 2025
Share capital:
Ordinary shares of 20p each (£’000) 6,075 6,075
Treasury shares of 20p each (£’000) 3,890 3,890
9,965 9,965
Number of ordinary shares in issue: 30,373,362 30,373,362
Number of shares held in treasury: 19,453,074 19,453,074
Total 49,826,436 49,826,436
7. Classification under fair value hierarchy
The Company is required to disclose the fair value hierarchy that classifies
its financial instruments measured at fair value at one of three levels,
according to the relative reliability of the inputs used to estimate the fair
values.
Level 1 – investments with quoted prices in an active market;
Level 2 – investments whose fair value are based directly on observable
current market prices or are indirectly derived from market prices; and
Level 3 – investments whose fair value are determined using a valuation
technique based on assumptions that are not supported by observable current
market prices or are not based on observable market data.
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.
31 July 2025 31 January 2025
Asset Liabilities Asset Liabilities
£’000 £’000 £’000 £’000
Level 1 134,163 – 143,920 –
Level 2 168 (125) – –
134,331 (125) 143,920 –
8. Status of Half-Yearly Financial Report
The financial information contained in this Half-Yearly Financial Report,
which has not been reviewed or audited by an independent auditor, does not
constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. The financial information for the half years ended 31 July
2024 and 31 July 2025 has not been audited. The figures and financial
information for the year ended 31 January 2025 are extracted and abridged from
the latest audited accounts and do not constitute the statutory accounts for
that year. Those accounts have been delivered to the Registrar of Companies
and included the Independent Auditor’s Report, which was unqualified.
Company Secretary
Northern Trust Secretarial Services (UK) Limited
Company Secretarial Contact: artemisukfutureleaders@ntrs.com
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