REG - Baillie Gifford Euro - Baillie Gifford European Growth Tst Annual Results
09/12/2025 07:00
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RNS Number : 7291K Baillie Gifford European Growth Tst 09 December 2025
RNS Announcement
Baillie Gifford European Growth Trust plc
Legal Entity Identifier: 213800QNN9EHZ4SC1R12
Results for the year to 30 September 2025
· Over the year to 30 September 2025, the Company's net asset value per
share (NAV) total return was 5.5% compared to a total return of 15.5% for the
comparative index. The share price total return for the same period was 14.5%.
· In the second half of the Company's financial year, the net asset
value total return and the share price total return were ahead of the
benchmark by 1.0 % and 1.4% respectively
· The portfolio now contains six unlisted companies accounting for
15.5% of net assets as at 30 September 2025 (2024: 6.4% in five companies)
which in aggregate contributed strongly to performance during the year;
· Over the course of the Company's financial year, the share price
tightened to an 8.6% discount to NAV compared with 15.7% at the previous
year-end. During this period, the Company bought back 27,060,412 shares at a
total cost of approximately £26.9m, representing approximately 7.7% of the
issued share capital at the start of the year.
· David Barron, Chairman of the Company said:
"The Board believes that good outcomes can be achieved by using the advantages
of the investment trust structure: gearing, a meaningful exposure to unlisted
companies and a willingness to diverge from the benchmark.
Many of the companies we own are delivering good operating performance and
excellent results, growing at attractive rates.
This gives us confidence that early signs of improvement in performance can be
continued into next year"
For a definition of terms see Glossary of terms and alternative performance
measures at the end of this announcement. Total return information is sourced
from Baillie Gifford/LSEG and relevant underlying index providers; see
disclaimer at the end of this announcement.
Baillie Gifford European Growth Trust's principal investment objective is to
achieve capital growth over the long-term from a diversified portfolio of
European securities.
The Company is managed by Baillie Gifford & Co, an Edinburgh based fund
management group with around £205 billion under management and advice as at
4 December 2025.
Past performance is not a guide to future performance. Baillie Gifford
European Growth Trust plc is a listed UK company. The value of its shares and
any income from them can fall as well as rise and investors may not get back
the amount invested. The Company is listed on the London Stock Exchange and is
not authorised or regulated by the Financial Conduct Authority. You can find
up to date performance information about Baillie Gifford European Growth Trust
plc on the Company's page of the Managers' website at bgeuropeangrowth.com
(https://bgeuropeangrowth.com/) (‡)
(‡) Neither the contents of the Managers' website nor the contents of any
website accessible from hyperlinks on the Managers' website (or any other
website) is incorporated into, or forms part of, this announcement.
For further information please contact:
Naomi Cherry, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Four Communications
Tel: 0203 920 0555 or 07872 495396
Chairman's statement
Introduction
This is the first year of reporting since the introduction of the four-year
performance-related tender offer. The broad rationale for this was set out in
last year's Annual Report by my predecessor as Chairman. The conditional
tender clearly encapsulates the Board's expectations of our Manager: we
believe in Baillie Gifford's ability to identify and build a portfolio of
companies with long-term growth potential. We recognise successful active
investment requires patience and the willingness to be different, but equally,
we recognise that all active managers have ultimately to outperform
benchmarks. Performance is discussed in greater depth below and in the
Manager's Report, however, there are signs, particularly in the second half of
the year, that performance is improving.
While broader indices have benefited from a narrow concentration of
performance in a few large companies, the Company's portfolio continues to
reflect Baillie Gifford's conviction in long-term, fundamental growth
opportunities across the continent. The Managers remain focused on investing
in exceptional businesses that can compound value over many years, even if
this approach, at times, leads to periods of underperformance. During the
year, the Board has with the Managers, looked at process around portfolio
construction and the Board is encouraged by the resilience of the portfolio
companies and by signs of improving operational performance across several
core holdings.
The Board believes that good outcomes can be achieved by using the advantages
of the investment trust structure: gearing, a meaningful exposure to unlisted
companies and a willingness to diverge from the benchmark. Our active share is
over 80% and the turnover is 22.8%. Notwithstanding the difficult performance
record of recent years, we continue to encourage the Managers to remain
consistent in their approach and to invest with conviction in companies they
believe are positioned to outperform.
Performance
The net asset value per share ('NAV') total return over the Company's
financial year was 5.5% compared to a total return of 15.5% for the FTSE
Europe ex UK Index, in sterling terms.
In the second half of the year the NAV total return was 12.6% compared to a
total return of 11.6% for the index.
The share price total return over the year was 14.5% and so the discount to
NAV of the Company's shares narrowed from 15.7% to 8.6%.
NAV Share Price Benchmark*
1 October 2024 - 31 March 2025 (6.7%) 1.3% 3.5%
1 April 2025 - 30 September 2025 12.6% 13.0% 11.6%
* The benchmark is the FTSE Europe ex UK Index, in sterling terms.
Since Baillie Gifford began managing the portfolio in November 2019, the NAV
total return has been 28.5% compared to a total return of 66.2% for the FTSE
Europe ex UK Index, in sterling terms. The share price total return has been
27.8%, with the discount widening slightly from 7.5% to 8.6%.
The Manager and the Board are focused on re-building the performance record
going forward. In 2019, following Baillie Gifford's appointment as Managers,
macro conditions were initially uniquely favourable to Baillie Gifford's
style. The subsequent macro environment presented significant challenges to
performance, amplified by certain stock-specific developments and portfolio
allocation decisions. Since 2022, the Company has been operating against a
very different market environment where the backdrop for growth companies has
been far less universally supportive.
We set out below the performance of the Company since the significant macro
shift referred to above. For the sake of clear presentation, we take these
from 1 October 2022.
NAV Share Price Benchmark*
1 October 2022 - 30 September 2023 8.3% 8.6% 20.5%
1 October 2023 - 30 September 2024 12.1% 9.3% 15.3%
1 October 2024 - 30 September 2025 5.5% 14.5% 15.5%
* The benchmark is the FTSE Europe ex UK Index, in sterling terms.
It is encouraging that performance improved in the second half of this
reporting year. In addition, as set out on page 30 of the Annual Report and
Financial Statements in the discussion on Key Performance Indicators, the
Board considers peer group comparative performance and over shorter periods,
this too is more competitive.
Private Companies
During the year, the Board has spent significant time with the Fund Managers
and Baillie Gifford's Private Companies team, in order to re-assess the
rationale for the Company to hold unquoted businesses within a largely listed
portfolio.
The Board concluded, following these most recent discussions, that limited
exposure to private companies can provide access to distinct growth
opportunities and a source of differentiated returns. Despite the significant
setback in two investments, Baillie Gifford's network, expertise and resources
position them to successfully identify, execute and manage such opportunities.
Private companies can be harder to realise and may be viewed as complex and
opaque. However, as a long-term vehicle with structural advantages, we would
not wish to exclude this area of the market if that is where the Managers
believe they can add significant value. The investment made in Tekever this
year was the first new private investment since 2023. As at the year-end,
unquoted companies represented 13.6% of the portfolio, driven in large part by
the performance of Bending Spoons, that the Managers highlight in their
report.
Earnings and Dividend
Revenue per share for the year was 0.78p (0.72p 2024) and the Board is
recommending a final dividend of 0.72p per share (0.60p 2024). Subject to
shareholder approval at the Annual General Meeting, the dividend will be paid
on 13 February 2026 to shareholders on the register on 9 January 2026.
The ex-dividend date will be 8 January 2026.
As noted in the Company's 2019 Annual Report, any dividend paid will be by way
of a final dividend and be the minimum required for the Company to maintain
its investment trust status.
Borrowings
The Company has two €30 million long-term debt facilities: the first has a
remaining duration of 15 years and is priced at a fixed rate of 1.57% and the
other has over 10 years outstanding at a fixed rate of 1.55%. The Company also
has an undrawn €30 million overdraft facility with The Northern Trust
Company, which at present is capped at €15 million following Board
agreement. At the year end, the Company had net gearing of 14.0% of
shareholders' funds.
Share Buybacks, Issuance and Discount
As well as a focus on re-building the Company's performance track record, the
Board is very aware of the rating at which the shares of the Company trade.
Over the course of the Company's financial year, the share price moved from a
15.7% discount to NAV to a 8.6% discount to NAV. During this period, the
Company bought back 27,060,412 shares at a total cost of approximately
£26.9m. This represents approximately 7.7% of the issued share capital at the
start of the year. By way of comparison, the equivalent figure last was 6.3m
shares or 1.8% of the Company's issued share capital. The shares repurchased
by the Company are held in treasury and are available to be reissued, at a
premium, when market conditions allow.
The Board will continue to operate its buyback policy whilst ensuring that the
integrity of the closed-ended structure, that we believe has significant
advantage, is preserved. The Company is capitalised at over £330m and has a
gross portfolio of over £400m. The shrinkage through buybacks does not unduly
impact our competitive expense ratio of 0.66%.
The competition for investor attention amongst funds and investment trusts has
never been greater. Investment trusts need to remain relevant. We believe by
having a distinctive investment approach and by utilising the structural
advantages of an investment trust, we can deliver the investment performance
and returns that underpin success and lead to greater demand for the Company's
shares.
The Board is of the view that the Company should retain the power to buy back
shares during the year and so, at the Annual General Meeting, is seeking to
renew the annual authority to repurchase up to 14.99% of the shares in the
Company in issue. When buying back shares, the Board does not have a formal
discount target and is prepared to buy back shares opportunistically and where
it is accretive to NAV.
The Company also has authority to issue new shares and to reissue any shares
held in treasury for cash on a non-pre-emptive basis. Shares are
issued/reissued only at a premium to net asset value, thereby enhancing net
asset value per share for existing shareholders. The Directors are, once
again, seeking 10% share issuance authority at the Annual General Meeting. As
with the buy back, this authority would expire at the conclusion of the Annual
General Meeting to be held in 2027.
Annual General Meeting
The AGM will be held at 2.00pm on 4 February 2026 at One Moorgate Place, City
of London EC2R 6EA. Please see pages 103 to 108 of the Annual Report and
Financial Statements that sets out the AGM location and directions thereto.
The Managers will make a presentation, and I look forward to meeting
shareholders who are able to attend.
To accurately reflect the views of shareholders of the Company, the Board
intends to hold the AGM voting on a poll, rather than by a show of hands. This
will ensure an exact and definitive result. The Board encourages all
shareholders to exercise their votes on the AGM resolutions by completing and
submitting the form of proxy enclosed with the Annual Report to ensure that
your votes are represented at the meeting (whether or not you intend to attend
in person). If you hold shares through a share platform or other nominee,
the Board encourages you to contact these organisations directly as soon as
possible to arrange for you to submit votes in advance of the AGM.
Alternatively, the Association of Investment Companies' ('AIC') website
theaic.co.uk/how-to-vote-your-shares has information on how to vote your
shares if you hold them via one of the major platforms. The following link
will also take you through to the AIC website where there is information on
how your platform can help you attend the AGM in person
theaic.co.uk/aic/ready-to-invest/shareholdervoting/attending-an-agm.
Should shareholders have questions for the Board or the Managers or any
queries as to how to vote, they are welcome, as always, to submit them by
email to enquiries@bailliegifford.com or call 0800 917 2113.
Information on the resolutions can be found on pages 55 and 56 of the Annual
Report and Financial Statements. The Directors consider that all resolutions
to be put to shareholders are in their and the Company's best interests as a
whole and recommend that shareholders vote in their favour.
Outlook
Even though the macro backdrop against which we invest is unpredictable, we
believe the Managers are well-placed to identify dynamic, growing European
businesses that can prosper over the long-term in industries where management
can shape the destiny of the business.
Baillie Gifford's approach is avowedly long-term, patient and different from
many of the competition. With good execution, the Board believes this is a
sound basis for successful active portfolio management. During the year, the
Managers have improved the quality and breadth of the portfolio whilst
remaining consistent to this approach. Many of the companies we own are
delivering strong operating performance and excellent results, growing at
attractive rates.
This gives us confidence that early signs of performance improvement during
the second half of the year can be continued into next year.
David Barron
Chairman
8 December 2025
Source: LSEG/Baillie Gifford and relevant underlying index providers. See
disclaimer at the end of this announcement. All figures are stated on a total
return basis. Total return and discount are an alternative performance
measures - see Glossary of terms and alternative performance measures below.
Past performance is not a guide to future performance.
Managers' report
Over the past financial year, the Company's net asset value (NAV) total return
was 5.5%, compared with a 15.5% return from the FTSE Europe ex UK Index (in
sterling terms). All of the relative underperformance occurred in the first
half of the year, as discussed in the Interim Report. While this outcome was
disappointing, it was encouraging that both NAV and share price total returns
outperformed the index in the second half of the year, by 1% and 1.4%
respectively. This improvement reflects the steps taken to reposition the
portfolio and to broaden the range of growth companies we invest in. Recent
results have also benefited from improving momentum, particularly among our
private holdings such as Bending Spoons.
Although the environment has been challenging for growth investing - the
European growth index has underperformed its value counterpart for five years
- these results strengthen our conviction in the portfolio's underlying
quality and our belief that performance should continue to recover as market
conditions evolve. The macroeconomic outlook for Europe is improving, and
valuations seem to us to be very attractive. In the absence of inflation or
interest rate shocks, we would expect that the share prices of our portfolio
companies will revert to following fundamentals. We also expect that these
companies will continue to increase sales and profits faster than the average
company in Europe, giving us confidence that we are moving past the trough of
our performance cycle.
CHART 1: 5 year Cumulative Total Return
MSCI Europe ex UK Growth vs Value
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Market Environment and Positioning
If the pain trade in the US has been not owning the "Magnificent Seven" tech
companies, in Europe it has been not owning Banks, and to a lesser extent,
defence companies. Banks have benefitted from higher interest rates while
defence companies have benefitted from a renewed focus on geopolitical safety.
As domestic sectors, both have been seen as safe havens from those seeking to
avoid the uncertainty of Trump's tariffs. We do own Tekever, a Portuguese
Drone company, that should benefit from NATO's pledge to spend up to 5% of GDP
on defence and also the increasing role of unmanned systems in modern warfare.
However, we currently hold no European banks and continue to believe that, in
aggregate, the sector offers limited long-term opportunity. Many European
banks are structurally disadvantaged and trade at premium valuations that do
not, in our view, reflect their longer-term challenges.
Volatility spiked in April after President Trump announced broad new tariffs
on his wryly named 'Liberation Day'. Although the most punitive proposals were
later moderated, the episode reignited concerns about trade, inflation, and
global growth. Risk appetite cooled, corporate guidance turned cautious, and
capital flowed into the perceived safety of Europe's domestic companies.
Meanwhile, the excitement around artificial intelligence (AI) that buoyed
parts of the US market failed to generate a comparable lift in Europe.
For bottom-up growth investors, this confluence - a benchmark led by sectors
we choose not to own, cyclical softness across industry, and a market bias
toward immediate evidence - formed an unfavourable backdrop. There has been no
'Liberation Day' for European growth portfolios. Nonetheless, our philosophy
remains unchanged. We aim to back exceptional businesses with enduring
advantages and the capacity to compound value over years rather than months.
The portfolio is not managed to mirror the index. We accept that there will be
phases when other styles are rewarded. Historically, our strongest long-term
outcomes have often followed periods when we were most out of step with
prevailing fashion, precisely when patience and conviction are scarcest.
Looking ahead, we remain encouraged by the structural forces supporting
European growth. Digitalisation and AI continue to reshape industries from
media to financial services. It is no coincidence that our five largest
holdings - Bending Spoons, Prosus, Topicus.com, ASML, and Adyen - are all
technology companies that stand to benefit directly from these transformative
trends. While most businesses will gain from these advances, these firms
should see their competitive moats widen and profitability improve more than
most. The energy transition is also catalysing innovation in materials,
logistics, and industrial processes, while healthcare is being transformed by
data-rich diagnostics and targeted therapies. In private markets, a growing
cohort of founder-led European companies is building valuable franchises away
from public market scrutiny. Much of tomorrow's leadership is being forged
today, often behind closed doors, and we intend to be constructive, long-term
partners in that process. In our view, it is only a matter of time before
innovation and structural growth are rewarded again.
Performance Review
Several holdings delivered strong operational progress that translated into
meaningful valuation gains over the period. The standout performer was Bending
Spoons, our largest private holding, which generated a 258% return and now
represents approximately 10% of NAV. We also saw strong performance from other
holdings, including Spotify, Ryanair, and Prosus.
Spotlight on Bending Spoons
Highlighting the largest and best-performing company in any portfolio always
carries some risk if things don't go as expected. But we believe in being
transparent, and since we view Bending Spoons as a truly special business, we
think it is a risk worth taking. This Milan-based technology company has
become one of Europe's most accomplished software operators. Founded in 2013
by Luca Ferrari and four friends, it acquires and operates digital products,
from mobile apps and SaaS platforms to subscription tools, underpinned by a
proprietary, data-driven operating model.
The company's success rests on two interlocking pillars. The first is its
disciplined acquisition strategy. It typically makes just a few sizeable
acquisitions each year, which are integrated into a central technology stack
powered by internal AI systems that automate analytics, monetisation, and
parts of product engineering. This unlocks pricing power, and when combined
with a rigorous approach to efficiency, acquired businesses become much more
profitable with remarkable speed. These profits can then be redeployed in
further acquisitions, thus driving a flywheel.
The second pillar is its distinctive culture, defined by talent density,
radical candour, and relentless optimisation. Recruitment is exceptionally
selective: more than 600,000 applicants competed for fewer than 300 roles last
year, with only the most capable joining what Ferrari calls the "A-team". It
has become one of the most coveted destinations in European technology. The
ambition is simple and clear: to keep doing the same things, but better,
compounding their advantage year after year.
Execution has been exceptional. Returns on acquisitions have been consistently
high, reflecting both the firm's technology-enabled operating model and its
ability to attract world-class talent. Unlike conventional software roll-ups,
Bending Spoons focuses on fewer, larger acquisitions where post-transaction
transformation is meaningful. Ferrari epitomises the firm's ethos -
engineering-led, transparent, and humble - and remains aligned, along with the
other founders, with a significant stake in the business.
In our view, Bending Spoons demonstrates that Europe can build globally
relevant, highly profitable technology franchises outside public markets. It
is also important to note that our recent internal review supports our belief
that the company could be worth a lot more in the future despite its positive
contribution to returns so far.
Other Positive Contributors
Spotify, the world's largest audio‑streaming platform now serving roughly
700 million monthly users, continued to exceed expectations. Management's
focus on operational efficiency and measured price increases helped lift
margins. Even though most of us now have higher monthly subscription fees,
user churn was minimal which is a great indication of continued
willingness-to-pay. The investment case remains anchored in scale advantages,
rapid product innovation, and the optionality of new verticals within audio
and subscription services.
Ryanair also delivered an impressive year as travel demand across Europe
remained resilient. In the June quarter alone, the airline reported a net
profit of €820 million, with average fares up 21% and unit costs rising just
1%. Its enduring cost leadership, prudent capacity management, and
well‑timed fuel hedging delivered record profitability, while the balance
sheet remained rock-solid with net cash of around €2 billion. Ryanair's
operational rigour and disciplined capital allocation continue to set the
benchmark in the industry, and like Spotify, we would expect pricing to be a
key driver of increased profits from here.
Prosus, the global consumer internet investor, was another important
contributor. After years of market fixation on its Tencent stake, the
company's non-Tencent e‑commerce portfolio achieved a significant milestone
in generating positive free cash flow for the first time. Profitability
improved across online classifieds, payments, and food delivery, and new CEO
Fabricio Bloisi articulated credible medium‑term goals, including a doubling
of e‑commerce revenues by 2028. Share buybacks also continued, which are
aimed at further narrowing the discount to NAV. Tencent, the largest social
media platform in China and the largest gaming company in the world, will
still drive most of the performance from here, but it is encouraging to see
the rest of Prosus' portfolio starting to contribute positively.
These three companies have been in the portfolio since we started managing it
in 2019. While operating in very different industries, they share some common
characteristics: they are managed by extremely ambitious entrepreneurs that
have meaningful levels of ownership, they have dominant market shares, their
customers value their products and services (yes, even Ryanair!), and they are
now at the stage of being able to monetise years of investment. It has not
been plain sailing though. These companies have also suffered from periods of
share price weakness and volatility. However, by remaining patient and
focusing on their fundamentals, we've been able to benefit from improving
momentum. This is what we expect to see from many more companies in the
portfolio in the coming years.
Negative Contributors
Not all holdings advanced in tandem. Several otherwise strong businesses faced
cyclical headwinds or valuation pressures, leading to weaker share price
performance.
Hypoport, the German fintech platform for mortgage brokerage, was the largest
detractor. The domestic housing market remained subdued following the sharp
rise in interest rates and sentiment towards the sector has been
understandably cautious. While Hypoport's earnings began to recover in 2025,
its recovery was temporarily held back by lower activity at one of its
customers who had to deal with some IT issues. From here though, we expect the
housing market to rebound, and for Hypoport to continue winning market share.
IMCD, the specialty chemicals distributor, also experienced a temporary
slowdown. After years of exceptional growth, customer destocking weighed on
demand, leading to only 2% organic revenue growth in the first half of 2025
and mild margin compression. In a normal environment it should be able to grow
organically around 5% and also add the same on again from acquisitions given
its position as the natural consolidator in the industry. For this type of
growth profile, the decade-low valuation multiple strikes us as extremely good
value.
Soitec, the French producer of engineered semiconductor substrates,
underperformed as its core markets - smartphones, automotive, and internet of
things (IoT) - softened. The company's recovery will depend on a broader
cyclical upturn, however the CEO has recently resigned and following another
profit warning, the investment case is under review.
Novo Nordisk detracted following two profit warnings, driven by supply
constraints and heightened competition from Eli Lilly's Mounjaro/Zepbound.
Margin‑dilutive exclusivity deals and leadership turnover compounded
investor unease. Yet the fundamental picture remains robust: Novo supplies
over 60% of global GLP‑1 volumes, demand is rising rapidly, and its data
continue to reinforce a clear clinical and commercial edge. The company's
significant investment programme should alleviate supply bottlenecks and
support future growth. Despite near‑term headwinds, Novo remains a
cornerstone European growth company with pricing power, strong margins, and a
long runway for expansion.
While the Company's one‑year results remain disappointing relative to the
benchmark, we are encouraged by evidence of operational progress across much
of the portfolio. The relative shortfall largely reflects our deliberate
underweight exposure to sectors - such as banks and energy - that have limited
alignment with our growth criteria. We continue to focus on building a
distinctive, long‑term portfolio of European growth businesses, guided by
fundamentals rather than fashion. The tangible improvements seen at companies
such as Spotify and Prosus provide a solid foundation for future returns.
Periods like this test conviction, but we remain steadfast in our belief that
enduring company fundamentals, not short‑term rotations, drive sustainable
shareholder value.
Portfolio Activity
Portfolio turnover remained high in the second half of the financial year as
we identified new opportunities and rebalanced towards holdings with greater
resilience and growth potential. This is most evident in our relative sector
positioning versus the index shown below. A year ago, we were nearly 9%
overweight in Industrials and 7% underweight in Health Care. Today, our
exposure to Industrials is closer to neutral, while Health Care has moved to a
2% overweight. To be clear, these changes primarily reflect where we have
found the most attractive companies trading at the most mispriced valuations.
CHART 2: Relative Sector Bets vs Index
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We initiated positions in five companies - Grupa Kęty, Amplifon, Roche,
Sandoz, and Tekever - spanning industrials, healthcare, and defence
technology. Each shares the defining characteristics we seek: underappreciated
growth, strong and improving competitive advantages, disciplined management,
and attractive entry valuations.
Grupa Kęty is a leading producer of aluminium products and packaging. The
company has demonstrated a decade‑long record of profitable growth,
delivering approximately 13% annual sales growth and 17% operating profit
growth while maintaining consistently high returns on capital. Its ongoing
reinvestment programme continues to shift the business mix toward
higher‑value segments. Grupa Kęty also pursues selective acquisitions to
enhance its capabilities. Despite these strengths, it remains
under‑researched outside its domestic market. We were able to establish a
position at what we judged to be an undemanding valuation, one that did not
fully reflect the company's quality or long‑term prospects. We believe
steady demand in construction and automotive, combined with product‑mix
improvements, will support attractive compounding returns.
Amplifon is the world's largest hearing‑care retailer, operating through
more than 10,000 points of sale. Growth has slowed in recent years due to an
unfavourable product cycle, prompting a sharp pullback in the valuation. We
viewed this as a temporary dislocation rather than structural weakness. As the
upgrade cycle resumes and the company continues to consolidate a fragmented
market, we expect both growth and margins to recover. Demographic tailwinds,
notably ageing populations and greater awareness of hearing health, underpin a
compelling long‑term demand profile. Amplifon's scale, brand strength, and
cash generation give it both the resilience and flexibility to capitalise on
these trends.
Roche is one of the world's leading global pharmaceutical companies. It
generates more than €10 billion in free cash flow annually and has been
investing consistently in an innovation‑led pipeline spanning oncology,
immunology, and other key therapeutic areas. While recent years brought
pipeline setbacks and patent expiries, we believe the outlook is improving as
the company continues to revitalise. Management has tightened research
discipline and is deploying computational AI tools more extensively in drug
discovery and development. Roche is also entering new therapeutic areas,
including obesity, hypertension and Alzheimer's, with multiple launches
expected before 2030. We see the market as undervaluing the breadth and
quality of Roche's pipeline, as well as its capital‑allocation acumen.
Sandoz, which spun-out of Novartis in 2023, is one of the world's largest
generics and biosimilars companies. The business is transitioning toward
higher-margin products, notably biosimilars, which are expected to drive most
of its future growth. A $400bn patent cliff in biologics provides a long
runway for opportunity. We believe Sandoz's pipeline, scale, and partnerships
position it well to gain share. With a low valuation multiple, it offers a
rare blend of defensiveness, cash generation, and underappreciated growth.
We participated in a funding round for Tekever, a private European
defence‑technology company specialising in AI‑enabled unmanned aerial
systems used in maritime surveillance, border security, and other
mission‑critical applications. Its technology is deployed by agencies such
as the European Maritime Safety Agency and the UK Home Office, and has been
used in active conflict zones including Ukraine. After two decades of
disciplined development, the company raised €70 million to scale production,
in a round led by Baillie Gifford alongside the NATO Innovation Fund. Rising
European defence spending and the growing strategic importance of autonomous
intelligence and surveillance systems constitute durable tailwinds. Tekever's
established customer relationships and technical maturity provide a credible
path to scaling and maintaining its very healthy level of profitability.
Sources of Funds
To fund these new investments, we sold three holdings: VNV Global, Genmab, and
Beijer Ref. Limited transparency made assessment of VNV's underlying progress
challenging, prompting a redeployment of capital into companies where we have
clearer operational insight.
We also divested Genmab, the Danish biotech. While it remains a leader in
antibody therapeutics, its revenue concentration in a few blockbuster
collaborations, notably Darzalex, presented an asymmetric risk profile given
the upcoming patent expiration. Unfortunately, its next generation Darzalex
doesn't look like it will be as successful as we originally thought. We
redeployed proceeds into Roche, which offers broader exposure to healthcare
innovation at an appealing valuation.
Finally, we exited Beijer Ref, the Swedish distributor of cooling systems.
Following several years of strong expansion and early signs of demand
recovery, the valuation had, in our view, already priced in much of the
cyclical upswing. We saw better risk‑reward potential in holdings where an
inflection in growth was less fully reflected in expectations.
Investing in Private Companies
Our private holdings, once a drag on performance, became the main driver of
returns this year, delivering an exceptional 92% gain led by Bending Spoons'
258% rise. With an average weight of 9.3%, private investments accounted for
nearly all of the Company's positive NAV movement. Since 2019, they have
generated a cumulative return of 141%, even after writing down Northvolt and
McMakler to zero, outperforming both peers and our listed portfolio. As is
typical in private markets, a few exceptional successes drive most of the
returns. Of six investments made so far, one has been outstanding, several are
progressing, and two have disappointed. This asymmetry is intrinsic to private
investing: a small number of winners can more than offset occasional losses.
At year‑end, our four private holdings - Bending Spoons (10% of NAV),
sennder (2.9%), Tekever (1.5%), and Flix (1.2%) - together represented 15.5%
of net assets. Although our mandate allows up to 20% in privates, this is a
ceiling, not a target. We invest selectively, deploying capital only where
opportunity, valuation, and risk‑adjusted return align. Lessons from earlier
experiences, particularly Northvolt, have strengthened our process. We are
much more mindful of the time it takes to generate positive cashflow and the
levels of capital intensity. Encouragingly, Bending Spoons and Tekever are
already profitable, and Flix are approaching breakeven, and they are all
relatively asset light.
Our commitment to private investing reflects a broader conviction: Europe's
most promising growth companies increasingly remain private for longer, with
value creation front‑loaded before IPO. These founder‑led, asset‑light
businesses stand apart from capital‑intensive incumbents, offering
compelling opportunity for patient investors. Our closed‑ended structure and
permanent capital allow us to embrace this long‑term horizon, free from
redemption pressures. As a crossover investor, we can hopefully identify
exceptional companies early, back them through late‑stage rounds, and
continue supporting them post‑IPO.
Outlook
The year highlighted a clear divide within the portfolio: businesses capable
of self‑generated growth through pricing power, innovation, or scale - such
as Spotify and Ryanair - versus those temporarily constrained by cyclical
headwinds in housing, industrial demand, or inventory cycles. As long‑term
investors, we view such divergences as a natural part long-term and patient
investing. By backing structural growth rather than chasing short‑term
trends, there will inevitably be periods when relative performance lags a
value‑driven benchmark.
Our focus remains firmly on fundamentals. Across much of the portfolio, we see
rising margins, robust cash generation, and evidence of market‑share gains.
These are indicators of intrinsic value creation that, over time, should
translate into stronger returns. While macroeconomic headwinds from inflation
and geopolitics persist, the outlook appears incrementally more stable. We do
not manage to macro forecasts, but we do consider scenarios carefully,
favouring companies with the capacity to adapt across them.
Our task is unchanged: to maintain a high‑quality portfolio of European
growth businesses capable of compounding over the long term. With a broader
range of less correlated growth companies, the renewed momentum in our private
portfolio, and the operational progress evident across key holdings, we
believe the Company is well positioned to deliver attractive long‑term
returns.
We thank our shareholders for their continued support and look forward to the
year ahead with both determination and optimism.
Stephen Paice
Chris Davies
Baillie Gifford
8 December 2025
For a definition of terms see Glossary of terms and alternative performance
measures below.
Past performance is not a guide to future performance.
Review of investments
The Company's ten largest investments as at 30 September 2025.
Bending Spoons
Bending Spoons is a developer and acquirer of digital consumer applications.
The company leverages its shared set of tools to use across different
applications, with the shared goal of maximising long-term value creation
while simultaneously minimising customer acquisition cost and improving the
product for consumers. Scaling its current suite of applications and
strategically acquiring new ones will be the key enabler of its continued
success.
Prosus
A global consumer technology holding company that listed in Europe in 2019.
Its biggest and most important asset is a stake in Tencent, the founder-run,
Chinese social media and gaming giant. With over 1.3bn monthly users and an
undermonetised platform, there are ample opportunities for continued
profitable growth. We think Tencent is mispriced, and as Prosus trades at a
significant discount to the value of its assets, we think it's even more
mispriced.
Topicus.com
A serial acquirer in the vertical market software space, buying niche software
companies in the highly fragmented European market. Internal cash generation
is strong thanks to the mission critical nature of the software and customer
stickiness, which leads to pricing power. This and the presence of parent
company and major shareholder Constellation Software - from which Topicus.com
was spun out in early 2021 - increase the odds of smart capital allocation and
value creation for many years to come.
ASML
Makes lithography machines vital for the manufacture of semiconductor chips.
It is a crucial enabler of Moore's Law and has an especially strong lead in
the most technologically advanced extreme ultraviolet lithography machines
where it enjoys monopoly status. Demand for smaller and more computationally
powerful chips continues to grow strongly with multiple drivers ranging from
artificial intelligence to internet of things applications. This will require
more capital expenditure from semiconductor fabs, resulting in a highly
favourable growth outlook.
Adyen
Adyen is a global payments processing business, founded and listed in the
Netherlands. It solves complexity in the payments stack, allowing merchants to
accept online and in-person payments faster and cheaper. It has grown rapidly
in recent years, securing business from major customers like Shopify and
McDonald's. We expect that growth to continue for many years to come given
that it has barely penetrated its addressable market.
Allegro.eu
Poland's dominant ecommerce platform. Online penetration of retail remains
relatively low in Poland, and we believe Allegro will gain significant share
as it continues to broaden its assortment and offers the best prices on the
market. It recently acquired Mall Group, adding countries like Czechia and
almost doubling its addressable market. Allegro's position is driven by
powerful network effects, and its ability to fight off competition has been
well-demonstrated, even against almighty Amazon.
EQT
A Sweden-based but global private equity firm. Asset allocators are dedicating
increasing portions of their portfolios to private assets. EQT is in a strong
position to capture a large share of these flows given its global platform and
impressive investment track record. Meanwhile, the company is seen as a 'good
owner', improving the firms it acquires and is therefore more likely to appear
as an acquirer of choice.
Vend Marketplaces
A collection of online classifieds marketplaces in the Nordics. Powerful
network effects have led to its marketplaces, covering jobs, real estate, used
cars and more, becoming dominant and hard to displace. This dominance should
enable Vend Marketplaces to capture an increasing proportion of the
transactions being made on its platforms, leading to growth from both pricing
and volumes over the long-term.
Roche Holding
Roche is a Swiss biopharmaceutical company. It is emerging from a period of
pipeline setbacks with a refocused and reinvigorated drug portfolio. While
consensus expectations are low, the company's deep early-stage pipeline, which
is the second largest in the industry with 36 novel molecular entities,
offers significant unappreciated upside. Flagship opportunities include
Trontinemab, Roche's next-generation Alzheimer's therapy that leverages its
proprietary BrainShuttleTM technology to cross the blood-brain barrier more
effectively than peers. If successful, this drug could capture meaningful
share in what may become a $10-20bn+ global market. Complementing its
pharmaceutical strength is a diagnostics division with global scale and a
potentially pivotal role in Alzheimer's disease diagnosis and patient triage,
an underappreciated ecosystem advantage.
Reply
Reply is an IT consultancy, well positioned to capture long-term digital
transformation trends, including cloud, IoT, and now, GenAI. Its decentralised
model comprises 200+ autonomous subsidiaries organised by domain or technology
(e.g., AWS, Azure), enabling agility and technological edge. These units
operate with real-time P&Ls and are incentivised for profitability,
fostering entrepreneurial innovation. Domain-specific expertise in GenAI is
giving Reply a first-mover edge, evident in projects with Microsoft (Copilot),
Stellantis, and Volkswagen. Reply is family-owned and operated with the
Rizzante family deeply embedded in a technology-centric culture which prizes
innovation should keep it durably successful.
One year summary
The following information illustrates how Baillie Gifford European Growth
Trust has performed over the year to 30 September 2025.
30 September 30 September
2025 2024 % change
Shareholders' funds (borrowings at book value) £353.9m £366.4m
Net gearing* 14% 13%
Net asset value per ordinary share (borrowings at book value) 109.0p 104.2p 4.6%
Net asset value per ordinary share (borrowings at fair value)* 113.3p 108.0p 4.9%
Share price 103.5p 91.0p 13.7%
FTSE Europe ex UK Index (in sterling terms) 12.0%
Ongoing charges*† 0.66% 0.65%
Discount (with borrowings at book value)* 5.0% 12.7%
Discount (with borrowings at fair value)*† 8.6% 15.7%
Revenue earnings per ordinary share 0.78p 0.72p 8.3%
Active share* 86% 88%
Dividends paid and payable in respect of the year 0.72p 0.60p 20.0%
Year to 30 September 2025 2024
Total return (%)*
Net asset value per ordinary share (borrowings at book value) 5.2% 14.5%
Net asset value per ordinary share (borrowings at fair value)† 5.5% 12.1%
Share price† 14.5% 9.3%
FTSE Europe ex UK Index (in sterling terms) 15.5% 15.3%
Year to 30 September 2025 2025 2024 2024
Year's high and low High Low High Low
Net asset value per ordinary share (borrowings at book value) 112.97p 87.71p 114.70p 83.24p
Net asset value per ordinary share (borrowings at fair value)* 117.19p 92.00p 118.28p 88.82p
Share price 108.00p 83.20p 101.00p 75.40p
Discount (borrowings at fair value)*† (6.5%) (17.2%) (10.8%) (15.8%)
Year to 30 September 2025 2024
Net return per ordinary share
Revenue return 0.78p 0.72p
Capital return 4.03p 12.35p
Total return 4.81p 13.07p
* Alternative performance measure - see Glossary of terms and alternative
performance measures below.
† Key performance indicator.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See
disclaimer at the end of this announcement.
Past performance is not a guide to future performance.
List of investments
As at 30 September 2025
Name Geography Business 2025 2025
Value % of total
£'000 assets
Bending Spoons(U) Italy Mobile application software developer 35,298 8.7
Prosus Netherlands Portfolio of online consumer companies 20,237 5.0
Topicus.com Netherlands Acquirer of vertical market software companies 17,016 4.2
ASML Netherlands Semiconductor equipment manufacturer 16,826 4.1
Adyen Netherlands Online payments platform 14,688 3.6
Allegro.eu Poland Ecommerce platform 13,263 3.3
EQT Sweden Investment firm, investing in equity, ventures, infrastructure and real estate 12,986 3.2
Vend Marketplaces Norway Media and classifieds advertising platforms 12,335 3.0
Roche Holding* Switzerland Pharmaceuticals and diagnostics company 12,333 3.0
Reply Italy IT consulting and systems integration provider 12,072 3.0
Ryanair Ireland Low-cost airline 12,025 3.0
Novo Nordisk Denmark Pharmaceutical company 10,363 2.6
Spotify Sweden Online audio streaming service 10,244 2.5
Sandoz* Sweden Generics & biosimilars pharmaceutical company 10,215 2.5
sennder(U) Germany Freight forwarder focused on road logistics 10,167 2.5
Kingspan Ireland Building materials provider 9,430 2.3
Lonza Switzerland Contract development and manufacturing organisation 9,288 2.3
DSV Denmark Freight forwarder 9,044 2.2
Royal Unibrew Denmark Alcoholic and non-alcoholic beverages 8,950 2.2
Camurus Sweden Develops and commercialises therapeutic medications 8,218 2.0
Hypoport Germany FinTech platform 7,827 1.9
EXOR Netherlands Investment company specialising in industrials 7,795 1.9
LVMH France Luxury goods 7,647 1.9
Moncler Italy Manufactures luxury apparel product 7,504 1.8
Assa Abloy Sweden Developer, designer and manufacturer in access solutions market 7,443 1.8
Dino Polska Poland Grocery store chain 6,953 1.7
ASM International Netherlands Semiconductor equipment manufacturer 6,699 1.6
Sartorius Stedim Biotech France Pharmaceutical and laboratory equipment provider 6,610 1.6
Grupa Kęty * Poland Aluminium-extrusion and architectural systems producer 6,507 1.6
Röko* Sweden Investment company acquiring niche small-to-mid businesses across multiple 6,199 1.5
industries.
Kinnevik Sweden Investment company specialising in digital consumer businesses 5,720 1.4
Nexans France Cable manufacturing company 5,609 1.4
Richemont Switzerland Owner of luxury goods companies 5,489 1.4
Tekever Holdings*(U) Portugal Manufacturer of AI-driven unmanned aerial and satellite systems for defence 5,233 1.3
and surveillance.
Epiroc Sweden Mining and infrastructure equipment provider 5,213 1.3
Atlas Copco Sweden Industrial group 5,179 1.3
Edenred* France Payments and employee-benefits platform 5,025 1.2
IMCD Netherlands Speciality chemicals distributor 4,828 1.2
Instalco Sweden Serial acquirer of technical installation businesses 4,282 1.1
Avanza Bank Sweden Online investment platform 4,208 1.0
Flix(U) Germany Long-distance bus and train provider 4,162 1.0
Amplifon* Italy Hearing-aid retail and related hearing-care services 4,153 1.0
Soitec France Manufactures engineered substrates for semiconductor wafers 3,680 1.0
Tonies Germany Musical storybox toys for children 2,375 0.6
AutoStore Norway Warehouse automation and cubic storage systems 1,817 0.5
McMakler(U) Germany Digital real estate broker - 0.0
Northvolt(U) Sweden Battery developer and manufacturer - 0.0
Total investments 403,155 99.2
Net liquid assets 3,052 0.8
Total assets 406,207 100.0
Borrowings (52,291) (13.0)
Shareholders' funds 353,916 87.0
Details of the ten largest investments are given on pages 18 to 21 of the
Annual Report and Financial Statements along with comparative valuations.
(U) Denotes unlisted investment (private company).
* New holdings bought during the year (Beijer Ref, CRISPR Therapeutics,
Dassault Systemes, Eurofins, Genmab, Mettler Toledo, Vitec Software,
VNV Global and Wizz Air Holdings were sold during the period).
Principal and emerging risks
As explained on pages 62 and 63 of the Annual Report and Financial Statements,
there is an ongoing process for identifying, evaluating and managing the risks
faced by the Company. The Directors have undertaken a robust assessment of the
principal and emerging risks facing the Company, including those that would
threaten the business model, future performance, solvency or liquidity. A
description of these risks and how they are being managed or mitigated is set
out below:
Investment What is the risk? How is it managed? Current assessment of risk
strategy risk
Pursuit of an investment strategy to fulfil the Company's objective which the To mitigate this risk, the Board regularly reviews and monitors the Company's Rating: Moderate Risk
market perceives to be unattractive or inappropriate, or the ineffective objective and investment policy and strategy, the investment portfolio and its
implementation of an attractive or appropriate strategy, may lead to reduced performance, the level of discount/premium to net asset value at which the Change: Increasing Risk
returns for shareholders and, as a result, a decreased demand for the shares trade and movements in the share register and raises any matters
Company's shares. This may lead to the Company's shares trading at a widening of concern with the Managers. This risk is considered to have increased. The market appetite for growth
discount to their net asset value. investing is considered to have deteriorated. However, the discount has
reduced from 15.7% to 8.6% during the year as the Company bought back
27,060,412 shares.
Cyber security risk What is the risk? How is it managed? Current assessment of risk
A cyber attack on Baillie Gifford's network or that of a third party service To mitigate this risk, the Audit Committee reviews Reports on Internal Rating: Moderate Risk
provider could impact the confidentiality, integrity or availability of data Controls published by Baillie Gifford and other third party service providers.
and systems. Emerging technologies, including AI and quantum computing Cyber security due diligence is performed by Baillie Gifford on third party Change: Increasing Risk
capabilities, may introduce new, and increase existing information security service providers which includes a review of crisis management and business
risks that impact operations. continuity frameworks.
This risk is seen as increasing due to the continuation of geopolitical
tensions that could lead to more cyber attacks. Emerging technologies,
including AI, could potentially increase information security risks. In
addition, service providers operate a hybrid approach of remote and office
working, thereby increasing the potential of a cyber security threat.
Political and associated economic risk What is the risk? How is it managed? Current assessment of risk
Political change in areas in which the Company invests or may invest may have To mitigate this risk, developments are closely monitored and considered by Rating: Moderate Risk
financial consequences for the Company. the Board and are regularly discussed at Board meetings.
Change: Increasing Risk
The prospect of market volatility remains, given continuing geopolitical
instability.
Financial risk What is the risk? How is it managed? Current assessment of risk
The Company's assets consist mainly of listed securities (86.4% of the The Board has, in particular, considered the impact of heightened market Rating: Moderate Risk
investment portfolio) and its principal and emerging financial risks are volatility due to macroeconomic factors such as higher inflation and interest
therefore market related and include market risk (comprising currency risk, rates and geopolitical concerns. Change: Stable
interest rate risk and other price risk), liquidity risk and credit risk. An
explanation of those risks and how they are managed is contained in note 19 to In order to oversee this risk, the Board considers at each meeting various The prospect of market volatility remains, given continuing geopolitical
the Financial Statements on pages 95 to 101 of the Annual Report and Financial metrics including regional and industrial sector weightings, top and bottom instability.
Statements. stock contributors to performance along with sales and purchases of
investments. Individual investments are discussed with the portfolio manager
together with general views on the investment markets and sectors. A strategy
session is held annually.
Private company investment risk What is the risk? How is it managed? Current assessment of risk
Rating: Moderate Risk
The Company's liquidity risk could be increased by its investment in private To mitigate this risk, the Board considers the private company securities in Change: Stable
company securities. These assets may be more difficult to buy or sell, so the context of the overall investment strategy and provides guidance to the
changes in their prices may be greater than for listed investments and their Managers on the maximum exposure to private company securities. The investment One new private company was purchased during the period. At 30 September 2025,
valuations may be perceived to be more volatile or out of date. policy limits the amount which may be invested in private company securities private company investments comprised 13.5% of total assets.
to 20% of the total assets of the Company, measured at the time of investment.
The Managers have a robust valuation methodology, which is applied
consistently. In periods of market volatility, the Managers' Private Company
Valuations Group will perform trigger analyses initial and, if appropriate,
revalue the relevant investments. The valuations are subject to review and
challenge by the Board every six months and are subject to scrutiny annually
by the external Auditor.
Climate and governance risk What is the risk? How is it managed? Current assessment of risk
Perceived problems on environmental, social and governance ('ESG') matters in This is mitigated by the Managers' strong ESG stewardship and engagement Rating: Moderate Risk
an investee company could lead to that company's shares being less attractive policies which are available to view on the Managers' website,
to investors, adversely affecting its share price, in addition to potential bailliegifford.com/esg, and which have been reviewed and endorsed by the Change: Stable
valuation issues arising from any direct impact of the failure to address the Company, and which have been fully integrated into the investment process. Due
ESG weakness on the operations or management of the investee company (for diligence includes assessment of the risks inherent in climate change (see
example in the event of an industrial accident or spillage). Repeated failure page 64 of the Annual Report and Financial Statements).
by the Managers to identify ESG weaknesses in investee companies could lead to
the Company's own shares being less attractive to investors, adversely
affecting its own share price. The Investment Manager continues to employ strong ESG stewardship and
engagement policies.
Discount What is the risk? How is it managed? Current assessment of risk
risk
The discount/premium at which the Company's shares trade relative to its net To manage this risk, the Board monitors the level of discount/premium at Rating: Moderate Risk
asset value can change. The risk of a widening discount is that it may which the shares trade and the Company has authority to buy back its existing
undermine investor confidence in the Company. shares, when deemed by the Board to be in the best interests of the Company Change: Decreasing Risk
and its shareholders.
The Company's shares traded at an average discount of 11.7% throughout the
year and the discount at the year end was 8.6%. The Company bought back
27,060,412 ordinary shares during the year. The Board has also put in place a
performance-related tender offer as set out on page 7 of the Annual Report and
Financial Statements,
Custody and depositary What is the risk? How is it managed? Current assessment of risk
risk
Safe custody of the Company's assets may be compromised through control To mitigate this risk, the Audit Committee receives six-monthly reports from Rating: Low Risk
failures by the Depositary, including breaches of cyber security. the Depositary confirming safe custody of the Company's assets held by the
Custodian. Cash and portfolio holdings are independently reconciled to the Change: Stable
Custodian's records by the Managers who also agree uncertificated private
portfolio holdings to confirmations from investee companies. The Custodian's
audited internal controls reports are reviewed by Baillie Gifford's Business
Risk Department and a summary of the key points is reported to the Audit
Committee and any concerns investigated. In addition, the existence of assets
is subject to annual external audit. All control procedures are working effectively.
Operational risk What is the risk? How is it managed? Current assessment of risk
Failure of Baillie Gifford's systems or those of other third party service To mitigate this risk, Baillie Gifford has a comprehensive business continuity Rating: Low Risk
providers could lead to an inability to provide accurate reporting and plan which facilitates continued operation of the business in the event of a
monitoring or a misappropriation of assets. service disruption. The Audit Committee reviews Baillie Gifford's Report on Change: Stable
Internal Controls and reports by other key third party providers are reviewed
by Baillie Gifford on behalf of the Board and a summary of the key points is
reported to the Audit Committee and any concerns investigated. The other key
third party service providers have not experienced significant operational
difficulties affecting their respective services to the Company.
All control procedures are working effectively.
Leverage risk What is the risk? How is it managed? Current assessment of risk
The Company may borrow money for investment purposes (sometimes known as To mitigate this risk, all borrowings require the prior approval of the Board Rating: Low Risk
'gearing' or 'leverage'). If the investments fall in value, any borrowings and leverage levels are discussed by the Board and Managers at every meeting.
will magnify the extent of this loss. If borrowing facilities are not renewed, Covenant levels are monitored regularly. The majority of the Company's Change: Stable
the Company may have to sell investments to repay borrowings. investments are in quoted securities that are readily realisable. Further
information on leverage can be found on page 113 of the Annual Report and
Financial Statements and the Glossary of terms and alternative performance
measures below. The Company has in place long term borrowings, expiring in 2036 and 2040.
Regulatory What is the risk? How is it managed? Current assessment of risk
risk
Failure to comply with applicable legal and regulatory requirements such as To mitigate this risk, Baillie Gifford's Business Risk, Internal Audit and Rating: Low Risk
the tax rules for investment trust companies, the UK Listing Rules and the Compliance Departments provide regular reports to the Audit Committee on
Companies Act could lead to suspension of the Company's Stock Exchange Baillie Gifford's monitoring programmes. Major regulatory change could impose Change: Stable
listing, financial penalties, a qualified audit report or the Company being disproportionate compliance burdens on the Company. In such circumstances
subject to tax on capital gains. Changes to the regulatory environment could representation is made to ensure that the special circumstances of
negatively impact the Company. investment trusts are recognised. Shareholder documents and announcements,
including the Company's published Interim and Annual Report and Financial
Statements, are subject to stringent review processes and procedures are in
place to ensure adherence to the Transparency Directive and the Market Abuse All control procedures are working effectively. There have been no material
Directive with reference to inside information. regulatory changes that have impacted the Company during the year.
Emerging risks
As explained on pages 62 and 63 of the Annual Report and Financial Statements
the Board has regular discussions on principal and emerging risks, including
any risks which are not an immediate threat but could arise in the longer
term. The Board considers emerging risks at each Board meeting and discusses
any mitigations required.
Promoting the success of the Company (section 172 statement)
Under section 172 of the Companies Act 2006, the directors of a company must
act in the way they consider, in good faith, would be most likely to promote
the success of the company for the benefit of its members as a whole, and in
doing so have regard (amongst other matters and to the extent applicable) to:
a) the likely consequences of any decision in the long term, b) the interests
of the company's employees, c) the need to foster the company's business
relationships with suppliers, customers and others, d) the impact of the
company's operations on the community and the environment, e) the desirability
of the company maintaining a reputation for high standards of business
conduct, and f) the need to act fairly as between members of the company.
In this context, having regard to the Company being an externally-managed
investment company with no employees, the Board considers the Company's key
stakeholders to be: its existing and potential new shareholders; its
externally-appointed Managers and Secretaries (Baillie Gifford); other
professional service providers (corporate broker, registrar, Auditors and
depositary); lenders; wider society and the environment.
The Board considers that the interests of the Company's key stakeholders are
aligned, in terms of wishing to see the Company deliver sustainable long-term
growth, in line with the Company's stated objective and strategy, and meet the
highest standards of legal, regulatory, and commercial conduct, with the
differences between stakeholders being merely a matter of emphasis on those
elements.
The Board's methods for assessing the Company's progress in the context of its
stakeholders' interests are set out below.
Stakeholder Why we engage How we engage and what we do
Shareholder Shareholders are, collectively, the Company's owners: providing them with a The Board places great importance on communication with shareholders. The
return for their investment in accordance with the Company's investment policy Annual General Meeting provides an opportunity for the Board and Managers to
and objective is the reason for its existence. present to shareholders on the Company's performance, future plans and
prospects. It also allows shareholders the opportunity to meet with the Board
and Managers and raise questions and concerns. The Chairman and Senior
Independent Director ('SID') are available to meet with shareholders as
appropriate. The Managers meet regularly with shareholders and their
representatives, reporting their views back to the Board. Directors also
attend certain shareholder presentations, in order to gauge shareholder
sentiment first hand. Shareholders may also communicate with members of the
Board at any time by writing to them at the Company's registered office or to
the Company's broker. These communication opportunities help inform the Board
when considering how best to promote the success of the Company for the
benefit of all shareholders over the long term.
Baillie Gifford - Managers and Secretaries The Company's Board has delegated the management of the Company's portfolio, The Board seeks to engage with its Managers and Secretaries, and other service
and the administration of the Company's operations including fulfilment of providers, in a collaborative and collegiate manner, encouraging open and
regulatory and taxation reporting requirements, to Baillie Gifford. Baillie constructive discussion and debate, while also ensuring that appropriate and
Gifford is therefore responsible for the substantial activities of the Company regular challenge is brought and evaluation conducted. This approach aims to
and has the most immediate influence on its conduct towards the other enhance service levels and strengthen relationships with the Company's
stakeholders, subject to the oversight and strategic direction provided by the providers, with a view to ensuring the interests of the Company's shareholders
Board. are best served by keeping cost levels proportionate and competitive, and by
maintaining the highest standards of business conduct.
Portfolio companies As all of the Company's operations are conducted by third party professional The Board is cognisant of the need to consider the impact of the Company's
providers, it is the companies held in its investment portfolio which have the investment strategy and policy on wider society and the environment. The Board
primary real-world impact in terms of social and environmental change, both considers that its oversight of environmental, social and governance ('ESG')
positively and negatively, as well as generating, through their commercial matters is an important part of its responsibility to all stakeholders. The
success, the investment growth sought by the Company's shareholders. The Board's review of the Managers includes an assessment of their ESG approach
investee companies have an interest in understanding their shareholders' and its application in making investment decisions. The Board regularly
investment rationale in order to assure themselves that long-term business reviews Governance Engagement reports, which document the Managers'
strategies will be supported. interactions with investee companies on ESG matters (see pages 42 to 44 of the
Annual Report and Financial Statements).
Brokers The Company's brokers provide an interface between the Company's Board and its The Company's brokers regularly attend Board meetings, and provide reports to
institutional shareholders. those meetings, in order to keep the Board apprised of shareholder and wider
market sentiment regarding the Company. They also arrange forums for
shareholders to meet the Chairman, or other Directors, outwith the normal
general meeting cycle.
Registrars The Company's registrars provide an interface with those shareholders who hold The Company Secretaries liaise with the registrars to ensure the frequency and
the Company's shares directly. accuracy of communications to shareholders is appropriate, and monitor
shareholder correspondence to ensure that the level of service provided by the
registrars is acceptable. The Manager's risk function reviews the registrars'
internal controls report and reports on the outcome of this review to the
Audit Committee.
Auditor The Company's Auditor has a responsibility to provide an opinion on whether The Company's Auditor meets with the Audit Committee, in the absence of the
the Company's Financial Statements as a whole are free from material Managers where deemed necessary, and the Managers undertake to provide all
misstatement, as set out in more detail in the Auditor's Report to the members information requested by the Auditor in connection with the Company's annual
on page 75 of the Annual Report and Financial Statements. audit promptly and to ensure that it is complete and accurate in
all respects.
Depositary and Custodian The Depositary is responsible for the safekeeping of the Company's financial The Depositary provides the Audit Committee with a report on its monitoring
instruments, as set out in more detail on page 54 of the Annual Report and activities. The Board and Managers seek to engage with the Depositary and
Financial Statements. Custodian in a collaborative and collegiate manner, encouraging open and
constructive discussion and debate, while also ensuring that appropriate and
regular challenge is brought and evaluation conducted. This approach aims to
enhance service levels and strengthen relationships with the Company's
providers, with a view to ensuring the interests of the Company's shareholders
are best served by keeping cost levels proportionate and competitive, and by
maintaining the highest standards of business conduct.
Lenders Lenders such as holders of debt instruments (debentures, bonds and private The Company's legal advisers review all legal agreements in connection with
placement loan notes) and banks providing fixed or revolving credit facilities the Company's debt arrangements and advise the Board on the appropriateness of
or overdrafts provide the Company's gearing and have an interest in the the terms and covenants therein. The Managers and Secretaries ensure that the
Company's ongoing financial health and viability. frequency and accuracy of reporting on, for example, covenant certification,
is appropriate and that correspondence from the lenders receives a prompt
response.
AIC/industry peers The Association of Investment Companies (AIC) and the Company's investment The Company is a member of the AIC, and the Directors and/or the Managers and
trust industry peers have an interest in the Company's conduct and Secretaries (as appropriate) participate in technical reviews, requests for
performance, as adverse market sentiment towards one investment trust can feedback on proposed legislation or regulatory developments, corporate
affect attitudes towards the wider industry. governance discussions and/or training.
Investment platforms Investment platforms provide an interface with shareholders who invest in the The Managers liaise with the various investment platforms on strategies for
Company indirectly. improving communications with the Company's shareholders who hold their shares
via these platforms. Up-to-date information about the Company, including
monthly commentary, recent portfolio information, performance figures and an
annual timetable of key dates is published on the Company's website, for the
ease of reference of such shareholders.
Wider society and the environment No entity, corporate or otherwise, can exist without having an influence on The Board and Managers' interactions with the various stakeholders as noted
the society in which it operates or utilising the planet's resources. Through above form the principal forms of direct engagement with wider society and in
its third-party relationships, as noted above, the Company seeks to be a respect of the environment (commercial, financial, and in terms of planetary
positive influence and, in circumstances where that is not possible, to health and resources).
mitigate its negative impacts insofar as is possible.
The Board recognises the importance of maintaining the interests of the
Company and its stakeholders, in aggregate, firmly front of mind in its key
decision making and Baillie Gifford & Co Limited, the Company Secretaries,
are at all times available to the Board to ensure that suitable consideration
is given to the range of factors to which the Directors should have regard. In
addition to ensuring that the Company's stated investment objective was being
pursued, key decisions and actions during the year which have required the
Directors to have regard to applicable section 172 factors include:
• The Board's decision to declare a final dividend of 0.60p
per ordinary share for the year end 30 September 2024, the minimum required
for the Company to maintain its investment trust status;
• The buy back of 27,060,412 shares at a discount enhancing
the NAV for continuing shareholders;
• As noted in the Audit Committee Report on page 65 of the
Annual Report and Financial Statements, two Audit Committees during the period
were devoted to a review of the valuation of the Company's private companies.
In addition, the Board provided challenge during the year to the Managers
regarding the rationale for the Company to hold private companies, their
approach to investing in private companies and the valuation methodologies
applied; and
• The Board conducted meetings with shareholders during the
year to seek their feedback and understand their views. During the year the
Company hosted an Annual General Meeting providing shareholders with the
opportunity to engage directly with the Board and the Managers. A Q&A
session was held allowing shareholders to raise questions and receive detailed
responses. The Board encourages shareholders to attend the Annual General
Meeting in February 2026 (see the Notice of AGM on pages 103 to 108 of the
Annual Report and Financial Statements). The Board continues to utilise
digital platforms, including the Company website to disseminate timely
information and updates. The Board remains committed to maintaining regular,
open and transparent communication with all shareholders.
Employees, human rights and community issues
The Board recognises the requirement to provide information about employees,
human rights and community issues. As the Company has no employees, all its
Directors are non-executive and all its functions are outsourced, there are no
disclosures to be made in respect of employees, human rights and community
issues.
Gender representation
At 30 September 2025, the Board comprises four Directors, two male and two
female. The Company has no employees. The Board's policy on diversity is set
out on pages 61 and 62 of the Annual Report and Financial Statements.
Environmental, social and governance policy
Details of the Company's policy on socially responsible investment can be
found under Corporate governance and stewardship on page 64 of the Annual
Report and Financial Statements.
The Company considers that it does not fall within the scope of the Modern
Slavery Act 2015 and it is not, therefore, obliged to make a slavery and
human trafficking statement. In any event, the Company considers its supply
chains to be of low risk as its suppliers are typically professional advisers.
A statement by the Managers under the Act has been published on the Managers'
website at bailliegifford.com.
The Strategic report, which includes pages 7 to 48 of the Annual Report and
Financial Statements, was approved by the Board of Directors and signed on its
behalf on 8 December 2025.
David Barron
Chairman
Statement of Directors' responsibilities
in respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law they have elected to prepare the Financial
Statements in accordance with applicable law and United Kingdom Accounting
Standards, comprising Financial Reporting Standard 102 'The Financial
Reporting Standard Applicable in the UK and Republic of Ireland' (FRS 102).
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 its profit or loss for that year. In preparing
these Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable United Kingdom Accounting
Standards, comprising FRS 102, have been followed, subject to any material
departures disclosed and explained in the Financial Statements;
• make judgements and accounting estimates that are
reasonable and prudent; 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 financialposition of the Company and
enable them to ensure that the Financial Statements and the Directors'
remuneration report comply with the Companies Act 2006. They are responsible
for such internal control as they determine is necessary to enable the
preparation of Financial Statements that are free from material misstatement,
whether due to fraud or error, and are also responsible for safeguarding the
assets of the Company and to prevent and detect fraud and other
irregularities.
Under applicable laws and regulations, the Directors are also responsible for
preparing a Strategic report, Directors' report, Directors' remuneration
report and Corporate governance statement that complies with those laws and
regulations.
In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the
Financial Statements will form part of the annual financial report prepared
using the single electronic reporting format under the TD ESEF Regulation. The
Auditor's report on these Financial Statements provides no assurance over the
ESEF format.
The Directors are responsible for ensuring that the Annual Report and
Financial Statements are made available on a website. Financial Statements are
published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of Financial
Statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company's page of the Managers' website is
the responsibility of the Directors. The Directors' responsibility also
extends to the ongoing integrity of the Financial Statements contained
therein. The Directors have delegated responsibility to the Managers for the
maintenance and integrity of the Company's page of the Managers' website.
Responsibility Statement of the Directors in respect of the Annual Financial Report
We confirm that, to the best of our knowledge:
• the Financial Statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and net return of the Company;
• the Strategic Report includes a fair review of the
development and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties it faces;
and
• the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company's position and performance,
business model and strategy.
On behalf of the Board
David Barron
8 December 2025
Income statement
For the year ended 30 September
Notes 2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments 9 - 18,082 18,082 - 43,968 43,968
Currency gains/(losses) 14 46 (2,251) (2,205) (51) 2,073 2,022
Income 2 4,063 - 4,063 4,013 - 4,013
Investment management fee 3 (355) (1,421) (1,776) (370) (1,477) (1,847)
Other administrative expenses 4 (626) - (626) (630) - (630)
Net return before finance costs and taxation 3,128 14,410 17,538 2,962 44,564 47,526
Finance costs of borrowings 5 (161) (643) (804) (160) (640) (800)
Net return before taxation 2,967 13,767 16,734 2,802 43,924 46,726
Tax on ordinary activities 6 (305) - (305) (255) - (255)
Net return after taxation 2,662 13,767 16,429 2,547 43,924 46,471
Net return per ordinary share 7 0.78p 4.03p 4.81p 0.72p 12.35p 13.07p
The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and capital return columns are prepared
under guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing
operations.
A Statement of Comprehensive Income is not required as all gains and losses of
the Company have been reflected in the above statement.
The accompanying notes are an integral part of the Financial Statements.
Balance sheet
As at 30 September As at 30 September
Notes 2025 2025 2024 2024
£'000 £'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 9 403,155 413,975
Current assets
Debtors 10 3,545 1,331
Cash at bank 19 2,807 1,856
6,352 3,187
Creditors
Amounts falling due within one year 11 (3,300) (887)
Net current assets 3,052 2,300
Total assets less current liabilities 406,207 416,275
Creditors
Amounts falling due after more than one year 12 (52,291) (49,844)
Net assets 353,916 366,431
Capital and reserves
Share capital 13 10,061 10,061
Share premium account 14 125,050 125,050
Capital redemption reserve 14 8,750 8,750
Capital reserve 14 201,053 214,138
Revenue reserve 14 9,002 8,432
Shareholders' funds 353,916 366,431
Net asset value per ordinary share* (borrowings at book value) 15 109.0p 104.2p
Net asset value per ordinary share* (borrowings at fair value) 113.3p 108.0p
The Financial Statements of Baillie Gifford European Growth Trust plc (Company
registration number 1055384) were approved and authorised for issue by the
Board and were signed on 8 December 2025.
David Barron
Chairman
Statement of changes in equity
For the year ended 30 September 2025
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 October 2024 10,061 125,050 8,750 214,138 8,432 366,431
Dividends paid during the year 8 - - - - (2,092) (2,092)
Shares bought back into treasury 13 - - - (26,852) - (26,852)
Net return after taxation 14 - - - 13,767 2,662 16,429
Shareholders' funds at 10,061 125,050 8,750 201,053 9,002 353,916
30 September 2025
For the year ended 30 September 2024
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 October 2023 10,061 125,050 8,750 176,215 7,314 327,390
Dividends paid during the year 8 - - - - (1,429) (1,429)
Shares bought back into treasury 13 - - - (6,001) - (6,001)
Net return after taxation 14 - - - 43,924 2,547 46,471
Shareholders' funds at 10,061 125,050 8,750 214,138 8,432 366,431
30 September 2024
Cash flow statement
For the year ended 30 September
Notes 2025 2025 2024 2024
£'000 £'000 £'000 £'000
Cash flows from operating activities
Net return before taxation 16,734 46,726
Adjustments to reconcile company profit before tax to net cash flow from
operating activities
Net gains on investments (18,082) (43,968)
Currency losses/(gains) 2,251 (2,073)
Finance costs of borrowings 804 800
Other capital movements
Changes in debtors* (318) (149)
Changes in creditors* - 73
Taxation
Overseas withholding tax suffered (305) (255)
Overseas withholding tax reclaims received 268 240
Cash from operations(†) 1,352 1,394
Interest paid (788) (804)
Net cash inflow from operating activities 564 590
Cash flows from investing activities
Acquisitions of investments(#) (95,425) (82,256)
Disposals of investments(#) 124,261 90,091
Net cash inflow from investing activities 28,836 7,835
Cash flows from financing activities
Shares bought back into treasury (26,548) (5,998)
Equity dividends paid (2,092) (1,429)
Net cash outflow from financing activities (28,640) (7,427)
Increase in cash at bank 760 998
Exchange movements 191 (49)
Cash at bank at start of period 1,856 907
Cash at bank at end of period 2,807 1,856
* Change in debtors is made up of changes in accrued income, prepaid
expenses and taxation recoverable (excluding overseas withholding tax received
in the year) - see note 10. Change in creditors is made up of changes in other
creditors and accruals - see note 11.
† Cash from operations includes dividends received of £3,925,000 (2024
- £3,760,000) and interest received of £22,000 (2024 - £75,000).
# Acquisitions of investments is made up of the current year purchases at
cost (see note 9), plus opening purchases for subsequent settlement, less
closing purchases for subsequent settlement (see note 11). Disposals of
investments is made up of the current year sales proceeds (see note 9), plus
opening investment sales awaiting settlement, less closing investment sales
awaiting settlement (see note 10). The notes are included in the Annual Report
and Financial Statements.
Notes to the Financial Statements
1. The Financial Statements for the year to 30 September 2025
have been prepared in accordance with FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' on the basis of the
accounting policies set out below which are consistent with those applied for
the year ended 30 September 2024.
2. Income
2025 2024
£'000 £'000
Income from investments
Overseas dividends 4,018 3,818
Overseas interest 23 120
Other income
Interest 22 75
Total income 4,063 4,013
3. Investment management fee
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 355 1,421 1,776 370 1,477 1,847
Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford
& Co, was appointed as the Company's Alternative Investment Fund Manager
('AIFM') and Company Secretaries on 29 November 2019. Baillie Gifford &
Co Limited has delegated portfolio management services to Baillie Gifford
& Co. Dealing activity and transaction reporting has been further
sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia
(Hong Kong) Limited.
The Investment Management Agreement between the AIFM and the Company sets out
the matters over which the Managers have authority in accordance with the
policies and directions of, and subject to restrictions imposed by, the Board.
The Investment Management Agreement is terminable on not less than three
months' notice or on shorter notice in certain circumstances. Compensation
would only be payable if termination occurred prior to the expiry of the
notice period. The annual management fee is 0.55% of the lower of (i) the
Company's market capitalisation and (ii) the Company's net asset value (which
shall include income), in either case up to £500 million, and 0.50% of the
amount of the lower of the Company's market capitalisation or net asset value
above £500 million, calculated and payable quarterly.
4. Net return per ordinary share
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
Net return per ordinary share 0.78p 4.03p 4.81p 0.72p 12.35p 13.07p
Revenue return per ordinary share is based on the net revenue return after
taxation of £2,662,000 (2024 - £2,547,000), and on 341,427,285 (2024 -
355,716,719) ordinary shares, being the weighted average number of ordinary
shares in issue during each year.
Capital return per ordinary share is based on the net capital gain for the
financial year of £13,767,000 (2024 - £43,924,000), and on 341,427,285 (2024
- 355,716,719) ordinary shares, being the weighted average number of ordinary
shares in issue during each year.
There are no dilutive or potentially dilutive shares in issue.
5. Ordinary dividends
2025 2024 2025 2024
£'000 £'000
Amounts recognised as distributions in the period:
Previous year's final (paid 14 February 2025) 0.60p 0.40p 2,092 1,429
Also set out below are the total dividends paid and proposed in respect of the
financial year, which is the basis on which the requirements of section 1158
of the Corporation Tax Act 2010 are considered. The revenue available for
distribution by way of dividend for the year is £2,662,000 (2024 -
£2,547,000).
2025 2024 2025 2024
£'000 £'000
Dividends paid and proposed in the period:
Proposed final dividend per ordinary share (payable 13 February 2026) 0.72 0.60p 2,338 2,111
6. Investments
As at 30 September 2025 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Securities
Listed equities 348,295 - - 348,295
Unlisted equities - - 54,860 54,860
Total financial asset investments 348,295 - 54,860 403,155
As at 30 September 2024 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Securities
Listed equities 390,500 - - 390,500
Unlisted equities - - 23,475 23,475
Total financial asset investments 390,500 - 23,475 413,975
Investments in securities are financial assets designated at fair value
through profit or loss on initial recognition. In accordance with FRS 102 the
tables above provide an analysis of these investments based on the fair value
hierarchy described below which reflects the reliability and significance of
the information used to measure their fair value.
Fair value hierarchy
The levels are determined by the lowest (that is the least reliable or least
independently observable) level of input that is significant to the fair value
measurement for the individual investment in its entirety as follows:
Level 1 - using unadjusted quoted prices for identical instruments in an
active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is
unavailable).
The valuation techniques used by the Company are explained in the accounting
policies on pages 86 and 87 of the Annual Report and Financial Statements. A
sensitivity analysis by valuation technique of the unlisted securities is on
pages 98 to 100 of the Annual Report and Financial Statements. 7.
Creditors - amounts falling due after more than one year
2025 2024
£'000 £'000
Unsecured loan notes:
€30m 1.55% 24 June 2036 26,162 24,938
€30m 1.57% 8 December 2040 26,129 24,906
52,291 49,844
The Company has €30 million of long-term, fixed rate, senior, unsecured
privately placed loan notes, with a fixed coupon of 1.57% to be repaid on 8
December 2040 and a further €30 million of long-term, fixed rate, senior,
unsecured privately placed loan notes with a fixed coupon of 1.55% to be
repaid on 24 June 2036.
The main covenants which are tested monthly are: (i) Net tangible assets shall
not fall below £200,000,000. (ii) Total borrowings shall not exceed 30% of
the Company's adjusted assets (as defined by the loan agreement). (iii) The
Company's number of holdings shall not fall below 30.
8. Share capital
2025 2025 2024 2024
Number £'000 Number £'000
Allotted, called up and fully paid ordinary shares of 2.5p each 324,722,867 8,118 351,783,279 8,795
Treasury shares of 2.5p each 77,720,823 1,943 50,660,411 1,266
Total 402,443,690 10,061 402,443,690 10,061
The Company's shareholder authority permits it to hold shares bought back in
treasury. Under such authority, treasury shares may be subsequently either
sold for cash (at a premium to net asset value per ordinary share) or
cancelled. At 30 September 2025 the Company had authority to buy back
29,030,386 ordinary shares. During the year to 30 September 2025 no ordinary
shares (2024 - nil) were bought back for cancellation and 27,060,412 (2024 -
6,365,921) ordinary shares were bought back into treasury at a cost of
£26,852,000 (2024 - £6,001,000). Under the provisions of the Company's
Articles of Association share buy-backs are funded from the capital reserve.
The Company has authority to allot shares under section 551 of the Companies
Act 2006. The Board has authorised use of this authority to issue new shares
at a premium to net asset value per share in order to enhance the net asset
value per share for existing shareholders and improve the liquidity of the
Company's shares. During the year to 30 September 2025 no shares were issued
(in the year to 30 September 2024 - no shares were issued).
9. Analysis of change in net debt
1 October Cash flows Other non-cash Exchange 30 September
2024 £'000 changes movement 2025
£'000 £'000 £'000 £'000
Cash at bank 1,856 760 - 191 2,807
Loans due in more than one year (49,844) - (5) (2,442) (52,291)
(47,988) 760 (5) (2,251) (49,484)
10. Transactions with related parties and the managers and secretaries
The Directors' fees for the year and interests in the
Company's shares at the end of the year are detailed in the Directors'
Remuneration Report on pages 70 and 71 of the Annual Report and Financial
Statements. The Directors' Fees are included in note 4 on page 89 of the
Annual Report and Financial Statements. No Director has a contract of service
with the Company. During the years reported, no Director was interested in
any contract or other matter requiring disclosure under section 412 of the
Companies Act 2006.
The Management fee due to Baillie Gifford & Co Limited
is set out in note 3 on page 89 of the Annual Report and Financial Statements.
and the amount accrued at 30 September 2025 is set out in note 11 on page 93
of the Annual Report and Financial Statements. Details of the Investment
Management Agreement are set out on page 53 of the Annual Report and Financial
Statements.
The Company is part of a marketing programme which includes
all the investment trusts managed by the Manager. The Company's marketing
contribution, recharged by the Manager, was £100,000 (2024 - £95,000) as
disclosed in note 4.
11. The financial information set out above does not constitute the
Company's statutory accounts for the year ended 30 September 2025 or the year
ended 30 September 2025 but is derived from those accounts. Statutory accounts
for the period to 30September 2024 have been delivered to the Registrar of
Companies, and those for the year to 30 September 2025 will be delivered in
due course. The auditor has reported on those accounts; the reports were (i)
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying report and (iii)
did not contain a statement under section 498 (2) or (3) of the Companies Act
2006.
The Annual Report and Financial Statements is published on
the Company website bgeuropeangrowth.com(‡). The audited Annual Report and
Financial Statements will be posted to shareholders during December 2025
(including the Notice of AGM and voting instructions) and will be delivered to
the Registrar of Companies in due course. 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.
‡ Neither the contents of the Company website nor the contents of any
website accessible from hyperlinks on the Company website (or any other
website) is incorporated into, or forms part of, this announcement.
None of the views expressed in this document should be construed as advice to
buy or sell a particular investment.
Glossary of terms and alternative performance measures ('APM')
An alternative performance measure ('APM') is a financial measure of
historical or future financial performance, financial position, or cash flows,
other than a financial measure defined or specified in the applicable
financial reporting framework. The APMs noted below are commonly used measures
within the investment trust industry and serve to improve comparability
between investment trusts.
Total assets
This is the Company's definition of Adjusted Total Assets, being the total
value of all assets less current liabilities, before deduction of all
borrowings.
Shareholders' funds
Shareholders' funds is the value of all assets held less all liabilities, with
borrowings deducted at book value.
Net asset value
Net Asset Value is the value of total assets less liabilities with borrowings
deducted at either book value or fair value as described below. The net asset
value per share (NAV) is calculated by dividing this amount by the number of
ordinary shares in issue (excluding treasury shares).
Net asset value (borrowings at fair value) (APM)
Borrowings are valued at an estimate of market worth. The fair value of the
Company's loan notes is set out in note 19 on page 101 of the Annual Report
and Financial Statements.
A reconciliation from shareholders' funds (borrowings at book value) to net
asset value after deducting borrowings at fair value is provided below.
2025 2025 2024 2024
£'000 per share £'000 per share
Shareholders' funds (borrowings at book value) 353,916 109.0p 366,431 104.2p
Add: book value of borrowings 52,291 16.1p 49,844 14.2p
Less: fair value of borrowings (38,445) (11.8p) (36,425) (10.4p)
Net asset value (borrowings at fair value) 367,762 113.3p 379,850 108.0p
The per share figures above are based on 324,722,867 (2024 - 351,783,279)
ordinary shares of 2.5p, being the number of ordinary shares in issue at the
year end.
Net liquid assets
Net liquid assets comprise current assets less current liabilities, excluding
borrowings.
Discount/premium (APM)
As stockmarkets and share prices vary, an investment trust's share price is
rarely the same as its NAV. When the share price is lower than the NAV it is
said to be trading at a discount. The size of the discount is calculated by
subtracting the NAV from the share price and is usually expressed as a
percentage of the NAV. If the share price is higher than the NAV, it is said
to be trading at a premium.
2025 2025 2024 2024
NAV (book) NAV (fair) NAV (book) NAV (fair)
Closing NAV 109.0p 113.3p 104.2p 108.0p
Closing share price 103.5p 103.5p 91.0p 91.0p
Discount 5.0% 8.6% 12.7% 15.7%
Total return (APM)
The total return is the return to shareholders after reinvesting the net
dividend on the date that the share price goes ex-dividend.
2025 2025 2025 2024 2024 2024
NAV (fair) NAV (book) Share price NAV (fair) NAV (book) Share price
Closing NAV/share price (a) 113.3p 109.0p 103.5p 108.0p 104.2p 91.0p
Dividend adjustment factor* (b) 1.0058 1.0058 1.0068 1.0039 1.0040 1.0045
Adjusted closing NAV/share price (c) = (a) x (b) 113.9p 109.6p 104.2p 108.4p 104.6p 91.4p
Opening NAV/share price (d) 108.0p 104.2p 91.0p 96.7p 91.4p 83.6p
Total return (c) ÷ (d) -1 5.5% 5.2% 14.5% 12.1% 14.5% 9.3%
* The dividend adjustment factor is calculated on the assumption that the
final dividend of 0.6p (2024 - dividends of 0.4) paid by the Company during
the year were reinvested into shares of the Company at the cum income
NAV/share price, as appropriate, at the ex-dividend date.
The NAV (fair) total return for the period since Baillie Gifford began
managing the portfolio in November 2019 can be calculated using the
methodology shown in the table above and an opening NAV of 93.7p, a dividend
adjustment factor of 1.0615 and a closing NAV of 108.0p.
Ongoing charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a
percentage of the average net asset value with borrowings at fair value. The
ongoing charges have been calculated on the basis prescribed by the
Association of Investment Companies.
A reconciliation from the expenses detailed in the Income Statement on page 82
of the Annual Report and Financial Statements. is provided below.
2025 2024
Investment management fee £1,776,000 £1,847,000
Other administrative expenses £626,000 £630,000
Total expenses (a) £2,402,000 £2,477,000
Average net asset value (with borrowings deducted at fair value) (b) £366,441,000 £383,617,000
Ongoing charges ((a) ÷ (b) expressed as a percentage) 0.66% 0.65%
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an
investment trust can borrow money to invest in additional investments for its
portfolio. The effect of the borrowing on shareholders' funds is called
'gearing'. If the Company's assets grow, shareholders' funds grow
proportionately more because the debt remains the same. But if the value of
the Company's assets falls, the situation is reversed. Gearing can therefore
enhance performance in rising markets but can adversely impact performance in
falling markets.
Net Gearing is the Company's borrowings adjusted for cash at hand expressed as
a percentage of shareholders' funds.
Gross gearing is the Company's borrowings expressed as a percentage of
shareholders' funds.
2025 2024
£'000 £'000
Borrowings (at book value) (a) 52,291 49,844
Less: cash at hand (2,807) (1,856)
Adjusted borrowings (b) 49,484 47,988
Shareholders' funds (c) 353,916 366,431
Gross gearing ((a) ÷ (c) expressed as a percentage) 14.8% 13.6%
Net gearing ((b) ÷ (c) expressed as a percentage) 14.0% 13.1%
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers (AIFM)
Regulations, leverage is any method which increases the Company's exposure,
including the borrowing of cash and the use of derivatives. It is expressed as
a ratio between the Company's exposure and its net asset value and can be
calculated on a gross and a commitment method. Under the gross method,
exposure represents the sum of the Company's positions after the deduction of
sterling cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of sterling cash balances and after certain hedging and netting
positions are offset against each other.
Active share (APM)
Active share, a measure of how actively a portfolio is managed, is the
percentage of the portfolio that differs from its comparative index. It is
calculated by deducting from 100 the percentage of the portfolio that overlaps
with the comparative index. An active share of 100 indicates no overlap with
the index and an active share of zero indicates a portfolio that tracks the
index.
Automatic exchange of information
In order to fulfil its obligations under UK tax legislation relating to the
automatic exchange of information, the Company is required to collect and
report certain information about certain shareholders.
The legislation requires investment trust companies to provide personal
information to HMRC on certain investors who purchase shares in investment
trusts. As an affected company, Baillie Gifford European Growth Trust will
have to provide information annually to the local tax authority on the tax
residencies of a number of non-UK based certificated shareholders and
corporate entities.
Shareholders, excluding those whose shares are held in CREST, who come on to
the share register will be sent a certification form for the purposes of
collecting this information.
For further information, please see HMRC's Quick Guide: Automatic Exchange of
Information - information for account holders
gov.uk/government/publications/exchange-of-information-account-holders.
Third party data provider disclaimer
No third party data provider ('Provider') makes any warranty, express or
implied, as to the accuracy, completeness or timeliness of the data contained
herewith nor as to the results to be obtained by recipients of the data.
No Provider shall in any way be liable to any recipient of the data for any
inaccuracies, errors or omissions in the index data included in this document,
regardless of cause, or for any damages (whether direct or indirect) resulting
therefrom. No Provider has any obligation to update, modify or amend the data
or to otherwise notify a recipient thereof in the event that any matter stated
herein changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have any liability
whatsoever to you, whether in contract (including under an indemnity), in tort
(including negligence), under a warranty, under statute or otherwise, in
respect of any loss or damage suffered by you as a result of or in connection
with any opinions, recommendations, forecasts, judgements, or any other
conclusions, or any course of action determined, by you or any third party,
whether or not based on the content, information or materials contained
herein.
FTSE Index data
Source: London Stock Exchange Group plc and its group undertakings
(collectively, the 'LSE Group'). ©LSE Group 2025. FTSE Russell is a trading
name of certain of the LSE Group companies. 'FTSE®' 'Russell®', 'FTSE
Russell®, are trade marks of the relevant LSE Group companies and are used by
any other LSE Group company under license. All rights in the FTSE Russell
indices or data vest in the relevant LSE Group company which owns the index or
the data. Neither LSE Group nor its licensors accept any liability for any
errors or omissions in the indices or data and no party may rely on any
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the content of this communication.
Sustainable Finance Disclosure Regulation ('SFDR') (unaudited)
The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a
direct impact in the UK due to Brexit, however, it applies to third-country
products marketed in the EU. As Baillie Gifford European Growth Trust is
marketed in the EU by the AIFM, Baillie Gifford & Co Limited, via the
National Private Placement Regime ('NPPR') the following disclosures have been
provided to comply with the high-level requirements of SFDR.
The AIFM has adopted Baillie Gifford & Co's ESG Principles and Guidelines
as its policy on integration of sustainability risks in investment decisions.
Baillie Gifford & Co believes that a company cannot be financially
sustainable in the long run if its approach to business is fundamentally out
of line with changing societal expectations. It defines 'sustainability' as a
deliberately broad concept which encapsulates a company's purpose, values,
business model, culture, and operating practices.
Baillie Gifford & Co's approach to investment is based on identifying and
holding high quality growth businesses that enjoy sustainable competitive
advantages in their marketplace. To do this it looks beyond current financial
performance, undertaking proprietary research to build up an in-depth
knowledge of an individual company and a view on its long-term prospects. This
includes the consideration of sustainability factors (environmental, social
and/or governance matters) which it believes will positively or negatively
influence the financial returns of an investment.
The likely impact on the return of the portfolio from a potential or actual
material decline in the value of investment due to the occurrence of an
environmental, social or governance event or condition will vary and will
depend on several factors including but not limited to the type, extent,
complexity and duration of an event or condition, prevailing market conditions
and existence of any mitigating factors. Whilst consideration is given to
sustainability matters, there are no restrictions on the investment universe
of the Company, unless otherwise stated within in its Investment Objective
& Policy. Baillie Gifford & Co can invest in any companies it believes
could create beneficial long‑term returns for investors. However, this might
result in investments being made in companies that ultimately cause a negative
outcome for the environment or society. More detail on the Manager's approach
to sustainability can be found in the ESG Principles and Guidelines document,
available publicly on the Baillie Gifford website bailliegifford.com and by
scanning the QR code below. The underlying investments do not take into
account the EU criteria for environmentally sustainable economic activities
established under the EU Taxonomy Regulation.
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. END FR TPBLTMTBMBJA
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