REG - Baillie Gifford Euro - BaillieGifford European Grwth Trst Half-Yr Results
15/05/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250515:nRSO7257Ia&default-theme=true
RNS Number : 7257I Baillie Gifford European Growth Tst 15 May 2025
RNS Announcement
Baillie Gifford European Growth Trust plc
Legal Entity Identifier: 213800QNN9EHZ4SC1R12
Regulated Information Classification:
Interim Financial Report Results for the six months to 31 March 2025
Baillie Gifford European Growth Trust's objective is to achieve capital growth
over the long-term from a diversified portfolio of European securities. At
31 March 2025 the Company had total assets of £378.1 million.
Baillie Gifford European Growth Trust is managed by Baillie Gifford, an
Edinburgh-based fund management group with approximately £208 billion under
management and advice as at 14 May 2025.
Baillie Gifford European Growth Trust 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 at bgeuropeangrowth.com
(https://www.bailliegifford.com/en/uk/individual-investors/funds/baillie-gifford-european-growth-trust/)
:(‡)
Past performance is not a guide to future performance. Total return
information is sourced from LSEG, Baillie Gifford and relevant underlying
index providers. See disclaimer at end of this announcement.
14 May 2025
For further information please contact:
Naomi Cherry, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Director, Four Communications
Tel: 0203 920 0555 or 07872 495396
(‡ ) 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.
The following is the unaudited Interim Financial Report for the six months to
31 March 2025 which was approved by the Board on 14 May 2025.
Chairman's Statement
Having taken over the Chair of Baillie Gifford European Growth Trust at the
AGM in February 2025, this is my first report to you as shareholders.
In November 2024, we announced a four-year conditional tender offer with a
measurement period beginning on 1 October 2024. Implicit in the announcement
of this tender was an acknowledgement that Baillie Gifford has the resources
and skills to deliver significant outperformance, as they did when the board
appointed them in 2019, but also a clear recognition by the Board and the
management group that performance relative to peers and the benchmark must be
delivered.
Performance
The net asset value per share ('NAV') total return over the first half of the
Company's financial year was -6.7% compared to a total return of 3.5% for the
FTSE Europe ex UK Index, in sterling terms. The share price total return over
the period was 1.3% and so the discount to NAV of the Company's shares
narrowed from -15.6% to -8.6%.
Since the start of the performance-triggered tender offer, the NAV total
return has been -6.7% compared to a total return of 3.5% for the FTSE Europe
ex UK Index, in sterling terms.
These continue to be difficult conditions for growth managers but our
investment team is confident that the portfolio contains companies with the
greatest potential to benefit from more favourable conditions as these
develop. Further details on performance are provided in the Managers' Report
below.
Share Buybacks
Over the course of the Company's six months to 31 March 2025, the Company
bought back 10,154,657 shares at a total cost of approximately £9.6m,
representing in the region of 2.9% of the Company's issued share capital. The
Board will continue to address the imbalance between supply and demand in the
company shares and to facilitate the management of the Company's discount. The
shares repurchased by the Company are held in Treasury and are available to be
reissued, at a premium, when market conditions allow.
Outlook
Expressing a view on the outlook for the Company must recognise the rapidly
shifting and unpredictable global trading conditions that many of the
companies we might invest in currently face. This is not an easy backdrop
against which to manage portfolios. More positively, however, as an actively
managed closed-ended fund we are well placed to both identify companies with
robust business models, and also to be nimble in the light of changing
circumstances. Further, underappreciated strengths of many of our investments
may see greater interest as investors reconsider their overall exposure to US
equity markets. We look therefore for the positive, whilst remaining vigilant
to inevitable surprises, all the while striving to deliver the performance
shareholders expect.
David Barron
Chairman
14 May 2025
Interim management report
The recent months have tested investors' resolve as President Trump's sweeping
tariffs and schizophrenic policymaking have injected unprecedented uncertainty
and volatility into global markets. Stock indices have swung wildly, bonds and
the dollar seem to have lost their traditional safe-haven status, and the very
foundations of global trade have been shaken. However, episodes of heightened
volatility - be it the dot-com bust, the Global Financial Crisis, or the
Covid-19 pandemic - have always felt unique and perilous in the moment. But
investors who stayed the course, resisting the urge to act on fear, have
historically reaped substantial rewards when markets recovered.
We must acknowledge that no-one knows what will happen from here and that the
range of outcomes feels even wider than usual. If trade and currency wars
escalate from here, things could always get worse before they get better.
Equally, there are some growing seeds of optimism, particularly when looking
at Europe. Its macroeconomic prospects for once look relatively good. GDP
growth still lags behind the US but the gap which has persisted for years is
narrowing, aided by fiscal stimulus in Germany targeting infrastructure, green
energy and defence. Inflation is currently under control and central banks
across the region have continued to cut interest rates. Europe's valuation
discount is also now attracting capital from investors seeking to diversify,
especially from a crowded US equity market.
None of this is within our control, so we strive to focus on what is. That is
building a diversified and underappreciated portfolio of high-quality growth
companies owned and managed by people we trust. These companies have higher
growth rates, higher levels of profitability, and lower levels of debt than
the average company in the index. We believe these fundamentals are not yet
being reflected in appropriate valuations and take comfort from the fact that
while downcycles are never enjoyable, they form the basis for a much better
future. We continue to see clear signs of inflection points across several
industries such as semiconductors, building materials, biologics
manufacturing, and see scope for continued margin expansion from the
technology platforms we invest in. The combination of structural growth, the
beginnings of a cyclical upturn, and lower valuation multiples should be a
very potent mix for future value creation.
Performance
Over the period the Company's NAV delivered a total return of -6.7% in
sterling terms, while the FTSE Europe ex-UK benchmark returned 3.5%. The
Company's share price total return was 1.3%, ending the period at 91.6p,
representing a discount of 8.6% to the net asset value per share. This
compares to a discount of 15.7% at the beginning of the period.
European equity markets have started to benefit as investors increasingly
diversify from the US and seek shelter in European domestic sectors such as
financials, telecoms and utilities. These are not typically associated with
either quality or growth and as such are areas where we have significant
underweight positions. This has hurt performance at least in the short term.
We've also found it difficult to find undervalued listed companies that
benefit from Europe's ambition to 'ReArm' and its increased defence budget.
This may change though as one of the most promising private companies we are
looking at is geared into Europe's future security.
The companies with the greatest negative contribution to performance during
the period are doing well operationally despite some shorter-term cyclical
headwinds. Hypoport, the German digital mortgage platform, is increasing its
market share even if the recovery in its underlying real estate is a bit
slower than we expected; Nexans, a manufacturer of cables for offshore wind
electrification, is growing profitably despite negative sentiment on
renewables; and Soitec, which supplies modified silicon wafers to the
tariff-hit consumer electronics and automotive markets. It still has a
dominant position - its products provide performance benefits and energy
savings and are used in every 4G and 5G smartphone in the world - and while
there is still some inventory to work through we think a cyclical rebound is
just a matter of time.
The biggest positive contributor to performance was unlisted holding Bending
Spoons. This Italian software company acquires undermonetised digital
applications, such as AI-powered photo and video editors Remini and Splice,
and productivity tool Evernote. The company then enhances these applications
while optimising their cost structures. Unlike many other unlisted companies,
Bending Spoons is very profitable, asset-light, and faces little competition.
Its increasing profits and huge pipeline of attractive assets creates a
flywheel for growth which is very exciting. Despite mixed performance from our
unlisted companies overall, we still believe in a huge opportunity to create
value, especially in companies that share similar characteristics to Bending
Spoons.
Spotify, another European tech champion, also performed well continuing its
impressive run of profitable growth and delighting its almost 700 million
customers. This has been a great example of how patience can be rewarded. Its
IPO share price in 2018 was $132 and by the end of March this year it had
risen to $550 so overall it's been a very successful business and investment.
In late 2022 however, having watched its share price plummet 80% over the
preceding year, it was certainly not comfortable holding it in the portfolio.
We stuck with it though and thanks to management executing on its strategy, it
has proven the doubters wrong. We hope and expect more companies in the
portfolio with latent value to rebound in a similar fashion.
As a service provider with pricing power, Spotify has no problems with
tariffs. This is a nice attribute to have in the current environment. The same
goes for companies like low-cost airline Ryanair, Polish discount grocer Dino
Polska, and serial software company acquirer Topcius. These are market leaders
in their respective industries and with almost all of their profits being
generated in Europe, they are also well insulated from the trade war chaos.
More generally, our portfolio exposure to sales generated in the US is 15%
compared to 22% in the index which has been a benefit since 'liberation day'
at the start of April.
Transactions
We added three new names to the portfolio and sold six. The new purchases are:
• ASM International. This is the company from which ASML was
originally spun out in 1988. It focuses on the deposition stage of
semiconductor fabrication rather than ASML's lithography which comes later in
the process. Deposition is where specialised layers of material are deposited
onto a silicon wafer, giving it new and improved properties it previously
lacked. ASMI uses two highly complex techniques to achieve this, known as
atomic layer deposition and epitaxy. In these, it has very high and increasing
market shares. These techniques are becoming increasingly valuable in the
semiconductor value chain, particularly as 3D complexity increases at the
leading edge. Because of this, and its exposure to AI and datacentre
investment, we think it will grow much faster than the industry's expected 10%
growth rate over the next five years and beyond.
• Edenred is a global leader in employee benefit and expense
management services, providing employee benefits such as meal vouchers and
fuel cards. Its edge comes from a combination of regulatory expertise,
technological leadership, scale, and dedicated focus on a niche that, while
easy to enter, has shown to be challenging to scale. We expect Edenred to
continue growing through a combination of increasing penetration with small
and medium businesses, expanding into new markets and products, and increasing
the face value of vouchers. The company's focus on execution and strategic
M&A activities further support its growth potential. Its share price has
been very weak over the past two years given regulatory concerns however we
don't think these will be material. More recently for example, there was a
suggestion that is might be displaced in Brazil (less than 10% of its meal
voucher sales) by a government-run payments platform which turned out not to
be true. The share price nevertheless fell 17% that day. Edenred is now
trading on its lowest valuation multiple since it listed in 2010 which we
think is far too pessimistic.
• While researching Lifco, one of Sweden's most successful
serial acquirers, we discovered Röko which was about to IPO. It was
co-founded by the former CEO of Lifco who had been the architect of its
success. The business model is quite simple: buy cheap and profitable niche
companies and use the cashflows they generate to buy more. This works best if
there is a lean and decentralised corporate structure, stringent acquisition
criteria, and someone in charge with a proven ability to deploy capital
effectively. Röko has all of these and is about one fifth the size of Lifco,
so acquisitions make a much bigger difference to its growth rate. We were
pleased to be able to take part in the IPO as cornerstone investors.
During the six months we also made additions to Novo Nordisk, EQT, Hypoport,
Dino Polska, LVMH, Camurus, and Royal Unibrew. These are all companies we
think have attractive long-term prospects so larger position sizes are
warranted. The share prices of Novo Nordisk and Hypoport have been
particularly weak recently, so we think this is a good time to lean in and
take advantage of short-term worries. Novo Nordisk had some mildly
disappointing data from one of its new obesity drugs while at the same time
its competitor, Eli Lilly, had some positive data from an oral version of one
its obesity drugs. While this is slightly disappointing, we don't think the
valuation is now pricing in much growth at all, nor do we think it is
recognising that Novo still has a leading position in one of the largest and
fastest growing disease areas.
To make room for these new ideas and additions we sold six companies: Dassault
Systemes, Wizz Air, Vitec, and CRISPR Therapeutics (which failed to meet our
expectations), and Mettler Toledo and Eurofins (where valuations looked
stretched). In the current environment, with so many companies trading on
relatively low valuations, there is much more competition for capital. This
means the bar for inclusion is very high and we will only buy or add to
companies in which we have very high levels of conviction.
Outlook
As was noted at the AGM earlier in the year, the Board has introduced a
performance-related tender offer that runs through to September 2028. If we do
not outperform the index on an NAV basis, shareholders will be given the
option to redeem their shares at a price close to par. Recent performance has
again fallen short of what shareholders expect, but we remain optimistic as
the portfolio continues to look cheap and dislocations in equity markets are
presenting us with a number of attractive opportunities. It's often said that
you make most of your money in a bear market, you just don't realise it at the
time. We might not technically be in a bear market just now, but it certainly
feels like it given the levels of fear and uncertainty. At times like this,
it's always worthwhile to look to the future, to think about the exposure to
structural growth in the portfolio, and the ability of most of these companies
to navigate difficult times. We might not know what Trump is going to do next,
but we continue to believe we have a collection of some of Europe's best
businesses, and that these are significantly undervalued.
Stephen Paice
Chris Davies
Baillie Gifford
14 May 2025
Baillie Gifford - valuing private companies
We aim to hold our private company investments at 'fair value' i.e. the price
that would be paid in an open-market transaction. Valuations are adjusted both
during regular valuation cycles and on an ad hoc basis in response to 'trigger
events'. Our valuation process ensures that private companies are valued in
both a fair and timely manner.
The valuation process is overseen by a valuations committee at Baillie Gifford
which takes advice from an independent third party (S&P Global). The
valuations group is independent from the investment team, with all voting
members being from different operational areas of the firm, and the investment
managers only receive final valuation notifications once they have been
applied.
We revalue the private holdings on a three-month rolling cycle, with one-third
of the holdings reassessed each month. During stable market conditions, and
assuming all else is equal, each investment would be valued four times in a
twelve-month period. Regarding the Trust's private portfolio, the prices are
also reviewed twice per year by the respective investment trust boards.
Beyond the regular cycle, the valuations group also monitors the portfolio for
certain 'trigger events'. These may include: changes in fundamentals; a
takeover approach; an intention to carry out an initial public offering,
company news which is identified by the valuation team or by the portfolio
managers; or meaningful changes to the valuation of comparable public
companies. Any ad hoc change to the fair valuation of any holding is
implemented swiftly and reflected in the next published net asset value. There
is no delay. The valuations group also monitors relevant market benchmarks on
a weekly basis and updates valuations in a manner consistent with our external
valuer's (S&P Global) most recent valuation report where appropriate.
The Independent Auditor's Report included in the 2024 Annual Report explains
the procedures carried out by the external auditor on the private companies
(unquoted investments) as part of their audit.
List of investments
as at 31 March 2025
Name Geography Business 2025 2025
Value % of total
£'000 assets (*)
Topicus.com Netherlands Acquirer of vertical market software companies 22,859 6.0
DSV Denmark Freight forwarder 19,716 5.2
Bending Spoons (‡) Italy Mobile application software developer 17,153 4.5
Adyen Netherlands Online payments platform 15,411 4.1
Prosus Netherlands Portfolio of online consumer companies 13,785 3.6
Novo Nordisk Denmark Pharmaceutical company specialising in diabetes and obesity 13,508 3.6
Reply Italy IT consulting and systems integration provider 13,484 3.6
ASML Netherlands Semiconductor equipment manufacturer 12,806 3.4
Allegro.eu Poland Ecommerce platform 12,422 3.3
EQT Sweden Private equity company 11,892 3.1
Kingspan Ireland Building materials provider 11,448 3.0
Spotify Sweden Online audio streaming service 10,961 2.9
Ryanair Ireland Low-cost airline 10,911 2.9
EXOR Netherlands Investment company specialising in industrials 10,348 2.7
Schibsted Norway Media and classifieds advertising platforms 10,239 2.7
Atlas Copco Sweden Provider of compressors and other industrial equipment 10,234 2.7
Royal Unibrew Denmark Alcoholic and non-alcoholic beverages 9,733 2.6
Lonza Switzerland Contract development and manufacturing organisation 9,707 2.6
Hypoport Germany Online platform for mortgage brokers 9,649 2.6
IMCD Netherlands Speciality chemicals distributor 9,558 2.5
Nexans France Cable manufacturing company 9,054 2.4
sennder (‡) Germany Freight forwarder focused on road logistics 8,216 2.2
Moncler Italy Manufactures luxury apparel products 8,160 2.2
LVMH France Luxury goods company 8,049 2.1
Dino Polska Poland Discount grocery store chain 6,996 1.8
Camurus Sweden Pharmaceutical company specialising in long-acting medicines 6,696 1.8
Sartorius Stedim Biotech France Pharmaceutical and laboratory equipment provider 6,678 1.8
Assa Abloy Sweden Developer, designer and manufacturer in access solutions market 6,665 1.8
Richemont Switzerland Owner of luxury goods companies 6,565 1.7
Edenred(†) France Provider of employee benefits solutions 6,080 1.6
Röko(†) Sweden Investment company 6,025 1.6
Epiroc Sweden Mining and infrastructure equipment provider 5,053 1.3
Instalco Sweden Serial acquirer of technical installation businesses 5,033 1.3
Soitec France Manufactures engineered substrates for semiconductor wafers 4,485 1.2
Avanza Bank Sweden Online investment platform 4,299 1.1
Flix (‡) Germany Long-distance bus and train provider 4,052 1.1
Kinnevik Sweden Investment company specialising in digital consumer businesses 3,636 1.0
Tonies Germany Musical storybox toys for children 3,590 0.9
ASM International(†) Netherlands Semiconductor equipment manufacturer 2,877 0.8
Genmab Denmark Antibody based drug development 2,871 0.8
VNV Global Sweden Investment company specialising in early-stage technologies 2,331 0.6
AutoStore Norway Warehouse automation and cubic storage systems 1,820 0.5
Beijer Ref Sweden Wholesaler of cooling technology 1,498 0.4
McMakler (‡) Germany Digital real estate broker - -
Northvolt (‡) Sweden Battery developer and manufacturer - -
Total investments 376,553 99.6
Net liquid assets 1,531 0.4
Total assets 378,084 100.0
Borrowings (50,136) (13.3)
Shareholders' funds 327,948 86.7
(‡) Denotes private company investment.
(*) For a definition of terms see Glossary of terms and Alternative
Performance Measures at the end of this announcement.
(†) New holding bought during the period (CRISPR Therapeutics,
Dassault Systèmes, Eurofins, Mettler-Toledo, Vitec Software and Wizz Air were
sold during the period).
Income statement (unaudited)
For the six months For the six months For the year ended
ended 31 March 2025
ended 31 March 2024
30 September 2024 (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments - (26,119) (26,119) - 73,204 73,204 - 43,968 43,968
Currency (losses)/gains (2) (192) (194) (17) 793 776 (51) 2,073 2,022
Income 1,188 - 1,188 1,172 - 1,172 4,013 - 4,013
Investment management fee 3 (169) (672) (841) (188) (752) (940) (370) (1,477) (1,847)
Other administrative expenses (316) - (316) (312) - (312) (630) - (630)
Net return before finance costs and taxation 701 (26,983) (26,282) 655 73,245 73,900 2,962 44,564 47,526
Finance costs of borrowings 4 (78) (314) (392) (81) (325) (406) (160) (640) (800)
Net return before taxation 623 (27,297) (26,674) 574 72,920 73,494 2,802 43,924 46,726
Tax (93) - (93) (88) - (88) (255) - (255)
Net return after taxation 530 (27,297) (26,767) 486 72,920 73,406 2,547 43,924 46,471
Net return per ordinary share 5 0.15p (7.84p) (7.69p) 0.14p 20.41p 20.55p 0.72p 12.35p 13.07p
Dividends paid and payable per share 6 Nil Nil 0.60p
The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and capital columns are prepared under
guidance published by the Association of Investment Companies.
All revenue and capital items in the above statements 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 below are an integral part of the Financial Statements.
Balance Sheet (unaudited)
Notes At 31 March At September
2025 2024
£'000 (audited)
£'000
Fixed assets
Investments held at fair value through profit or loss 7 376,553 413,975
Current assets
Debtors 1,468 1,331
Cash at bank 1,377 1,856
2,845 3,187
Creditors
Amounts falling due within one year (1,314) (887)
Net current assets 1,531 2,300
Total assets less current liabilities 378,084 416,275
Creditors
Amounts falling due after more than one year 8 (50,136) (49,844)
Net assets 327,948 366,431
Capital and reserves
Share capital 10,061 10,061
Share premium account 125,050 125,050
Capital redemption reserve 8,750 8,750
Capital reserve 177,217 214,138
Revenue reserve 6,870 8,432
Shareholders' funds 327,948 366,431
Net asset value per ordinary share 96.0p 104.2p
(borrowings at book value)(*)
Net asset value per ordinary share 100.2p 108.0p
(borrowings at fair value)(*)
Ordinary shares in issue 9 341,628,622 351,783,279
(*) See Glossary of terms and Alternative Performance Measures on pages at the
end of this announcement.
Statement of changes in equity (unaudited)
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve (*) reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds 10,061 125,050 8,750 214,138 8,432 366,431
at 1 October 2024
Net return after taxation - - - (27,297) 530 (26,767)
Shares bought back into treasury - - - (9,624) - (9,624)
Dividends paid 6 - - - - (2,092) (2,092)
Shareholders' funds at 31 March 2025 10,061 125,050 8,750 177,217 6,870 327,948
For the six months ended 31 March 2025
(*) The capital reserve balance at 31 March 2025 includes investment
holding gains on investments of £21,483,000 (31 March 2024 - gains of
£64,208,000).
For the six months ended 31 March 2024
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve (*) reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds 10,061 125,050 8,750 176,215 7,314 327,390
at 1 October 2023
Net return after taxation - - - 72,920 486 73,406
Shares bought back into treasury - - - (2,102) - (2,102)
Dividends paid 6 - - - - (1,430) (1,430)
Shareholders' funds at 31 March 2024 10,061 125,050 8,750 247,033 6,370 397,264
Cash flow statement (unaudited)
For the six months to 31 March
2025 2024
£'000 £'000
Cash flows from operating activities
Net return before taxation (26,674) 73,494
Adjustments to reconcile company profit before tax to net cash flow from
operating activities
Net losses/(gains) on investments 26,119 (73,204)
Currency losses/(gains) 192 (793)
Finance costs of borrowings 392 406
Other capital movements
Changes in debtors and creditors (291) 25
Taxation
Overseas withholding tax suffered (93) (88)
Overseas withholding tax reclaims received 91 51
Cash from operations(*) (264) (109)
Interest paid (390) (406)
Net cash outflow from operating activities (654) (515)
Cash flows from investing activities
Acquisitions of investments (55,130) (37,179)
Disposals of investments 66,679 45,004
Net cash inflow from investing activities 11,549 7,825
Cash flows from financing activities
Shares bought back (9,380) (2,002)
Equity dividends paid (2,092) (1,430)
Net cash outflow from financing activities (11,472) (3,432)
(Decrease)/increase in cash and cash equivalents (577) 3,878
Exchange movements 98 42
Cash and cash equivalents at start of period 1,856 907
Cash and cash equivalents at end of period(†) 1,377 4,827
(*) Cash from operations includes dividends received in the period of
£1,200,000 (31 March 2024 - £1,084,000) and deposit interest received of
£19,000 (31 March 2024 - £26,000).
(†) Cash and cash equivalents represent cash at bank and short-term
money market deposits repayable on demand.
Notes to the Financial Statements
1. Principal accounting policies
The condensed Financial Statements for the six months to 31 March 2025
comprise the statements set out above together with the related notes below.
They have been prepared in accordance with FRS 104 'Interim Financial
Reporting' and the AIC's Statement of Recommended Practice issued in November
2014 and updated in October 2019, April 2021 and July 2022 with consequential
amendments and have not been audited or reviewed by the Auditor pursuant to
the Auditing Practices Board Guidance 'Review of Interim Financial
Information'. The Financial Statements for the six months to 31 March 2025
have been prepared on the basis of the same accounting policies as set out in
the Company's Annual Report and Financial Statements at 30 September 2024.
Going concern
The Directors have considered the nature of the Company's principal risks and
uncertainties, as set out below and the ongoing impact of geopolitical and
macroeconomic challenges. In addition, the Company's investment objective and
policy, assets and liabilities and projected income and expenditure, together
with the dividend policy have been taken into consideration and it is the
Directors' opinion that the Company has adequate resources to continue in
operational existence for the foreseeable future. The Company's assets, the
majority of which are investments in quoted securities which are readily
realisable, exceed its liabilities significantly. All borrowings require the
prior approval of the Board and gearing levels are reviewed by the Board on a
regular basis. The Directors consider it appropriate to adopt the going
concern basis of accounting in preparing these Financial Statements and
confirm that they are not aware of any material uncertainties which may affect
the Company's ability to continue to do so over a period of at least twelve
months from the date of approval of these Financial Statements.
2. Financial information
The financial information contained within this Interim Financial Report does
not constitute statutory accounts as defined in sections 434 to 436 of the
Companies Act 2006. The financial information for the year ended 30 September
2024 has been extracted from the statutory accounts which have been filed with
the Registrar of Companies. The Auditor's Report on those accounts was not
qualified, did not include a reference to any matters to which the Auditor
drew attention by way of emphasis without qualifying their report, and did not
contain a statement under sections 498(2) or (3) of the Companies Act 2006.
3. Investment management
Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford
& Co, was appointed by the Company as its Alternative Investment Fund
Manager (AIFM) and Company Secretary on 29 November 2019. The investment
management function has been delegated to Baillie Gifford & Co. The
management agreement can be terminated on three months' notice. 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. Finance costs
Six months to 31 March 2025
Revenue Capital Total
£'000 £'000 £'000
Loan notes interest 77 312 389
Overdraft arrangement fee 1 2 3
78 314 392
Year to 30 September 2024 (audited)
Revenue Capital Total
£'000 £'000 £'000
Loan notes interest 159 638 797
Overdraft arrangement fee 1 2 3
160 640 800
Six months to 31 March 2024
Revenue Capital Total
£'000 £'000 £'000
Loan notes interest 81 323 404
Overdraft arrangement fee - 2 2
81 325 406
5. Net return per ordinary share
Six months to Six months to Year to
31 March 2025 31 March 2024 30 September 2024
£'000 £'000 (audited)
£'000
Revenue return after taxation 530 486 2,547
Capital return after taxation (27,297) 72,920 43,924
Total net return (26,767) 73,406 46,471
Net return per ordinary share
Revenue return after taxation 0.15p 0.14p 0.72p
Capital return after taxation (7.84p) 20.41p 12.35p
Total net return per ordinary share (7.69p) 20.55p 13.07p
Weighted average number of ordinary shares in issue 348,221,661 357,267,626 355,716,719
Net return per ordinary share is based on the above totals of revenue and
capital and the weighted average number of ordinary shares in issue during
each period.
There are no dilutive or potentially dilutive shares in issue.
6. Dividends
Six months to Six months to
31 March 2025 31 March 2024
£'000 £'000
Amounts recognised as distributions in the period: 2,092 1,430
Final dividend 0.60p (2024 - 0.40p), paid 14 February 2025
Dividends proposed in the period: - -
Interim dividend - nil (2024 - nil)
No interim dividend has been declared in respect of the current period.
7. Fair value hierarchy
The Company's investments are financial assets held at fair value through
profit or loss. The fair value hierarchy used to analyse the basis on which
the fair values of financial instruments held at fair value through the profit
or loss account are measured is described below. Fair value measurements are
categorised on the basis of the lowest level input that is significant to the
fair value measurement.
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).
An analysis of the Company's financial asset investments based on the fair
value hierarchy described above is shown below.
As at 31 March 2025 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities 347,132 - - 347,132
Unlisted equities - - 29,421 29,421
Total financial asset investments 347,132 - 29,421 376,553
As at 30 September 2024 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities 390,500 - - 390,500
Unlisted equities - - 23,475 23,475
Total financial asset investments 390,500 - 23,475 413,975
Unlisted investments are valued at fair value by the Directors following a
detailed review and appropriate challenge of the valuations proposed by the
Managers. The Managers' unlisted valuation policy applies methodologies
consistent with the International Private Equity and Venture Capital Valuation
Guidelines ('IPEV'). These methodologies can be categorised as follows: (a)
market approach (multiples, industry valuation benchmarks and available market
prices); (b) income approach (discounted cash flows); and (c) replacement cost
approach (net assets). The Company's holdings in unlisted investments are
categorised as Level 3 as unobservable data is a significant input to their
fair value measurements.
8. Financial liabilities
The Company has a €30 million overdraft credit facility with The Northern
Trust Company for the purpose of pursuing its investment objective. At 31
March 2025, nil had been drawn down under the facility (31 March 2024 - nil,
30 September 2024 - nil). Interest is charged at 1.25% above the European
Central Bank Main Refinancing Rate. On 8 December 2020 the Company issued
€30 million of long-term, fixed rate, senior, unsecured privately placed
notes ('loan notes'), with a fixed coupon of 1.57% to be repaid on 8 December
2040 and on 24 June 2021 issued a further €30 million of loan notes with a
fixed coupon of 1.55% to be repaid on 24 June 2036. At 31 March 2025 the book
value of the loan notes amounted to £50,136,000 (31 March 2024 -
£51,212,000, 30 September 2024 - £49,844,000). The fair value of the loan
notes at 31 March 2025 was £35,735,000 (31 March 2024 - £36,422,000, 30
September 2024 - £36,425,000).
9. Share capital
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 in order to enhance the net asset value per
share for existing shareholders and improve the liquidity of the Company's
shares. In the six months to 31 March 2025 no ordinary shares were issued (in
the year to 30 September 2024 no ordinary shares were issued).
The Company also has authority to buy back shares. In the six months to 31
March 2025 no ordinary shares were bought back for cancellation and 10,154,657
ordinary shares were bought back into treasury at a cost of £9,624,000 (in
the year to 30 September 2024 no ordinary shares were bought back for
cancellation and 6,365,921 ordinary shares were bought back into treasury at a
cost of £6,001,000).
Between 1 April 2025 and 13 May 2025, no shares were issued and 2,950,000
shares were bought back into treasury.
10. Related Party Transactions
There have been no transactions with related parties during the first six
months of the current financial year that have materially affected the
financial position or the performance of the Company during that period and
there have been no changes in the related party transactions described in the
last Annual Report and Financial Statements that could have had such an effect
on the Company during that period.
None of the views expressed in this document should be construed as advice to
buy or sell a particular investment.
Principal risks and uncertainties
The principal risks facing the Company are financial risk, investment strategy
risk, political and associated economic risk, discount risk, regulatory risk,
custody and depositary risk, operational risk, leverage risk, climate and
governance risk and cyber security risk. An explanation of these risks and how
they are managed is set out on pages 30 to 34 of the Company's Annual Report
and Financial Statements for the year to 30 September 2024 which is available
on the Company's website: bgeuropeangrowth.com. The principal risks and
uncertainties have not changed since the date of the Annual Report.
Responsibility statement
We confirm that to the best of our knowledge:
a) the condensed set of Financial Statements has been prepared in
accordance with FRS 104 'Interim Financial Reporting';
b) the Interim Management Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule 4.2.7R
(indication of important events during the first six months, their impact on
the Financial Statements and a description of the principal risks and
uncertainties for the remaining six months of the year); and
c) the Interim Financial Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule 4.2.8R
(disclosure of related party transactions and changes therein).
By order of the Board
David Barron
Chairman
14 May 2025
Glossary of terms and Alternative Performance Measures ('APM')
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 and net asset value
Also described as shareholders' funds, net asset value ('NAV') is the value of
all assets held less all liabilities (including borrowings). The NAV per share
is calculated by dividing this amount by the number of ordinary shares in
issue (excluding shares held in treasury).
Net asset value (borrowings at book value)
Borrowings are valued at nominal book value (book cost).
Net asset value (borrowings at fair value) (APM)
Borrowings are valued at an estimate of their market worth.
Net asset value (reconciliation of NAV at book value to NAV at fair value)
31 March 31 March
2025 2024
Net asset value per ordinary share (borrowings at book value) 96.0p 111.6p
Shareholders' funds (borrowings at book value) £327,948,000 £397,264,000
Add: book value of borrowings £50,136,000 £51,212,000
Less: fair value of borrowings £35,735,000 £36,422,000
Shareholders' funds (borrowings at fair value) £342,349,000 £412,054,000
Number of shares in issue 341,628,622 355,865,033
Net asset value per ordinary share (borrowings at fair value) 100.2p 115.8p
Net liquid assets
Net liquid assets comprise current assets less current liabilities, excluding
borrowings.
(Discount)/premium (APM)
As stock markets and share prices vary, an investment trust's share price is
rarely the same as its NAV per share. When the share price is lower than the
NAV per share it is said to be trading at a discount. The size of the discount
is calculated by subtracting the share price from the NAV per share and is
usually expressed as a percentage of the NAV per share. If the share price is
higher than the NAV per share, it is said to be trading at a premium.
As at As at As at As at
31 March 31 March 30 September 30 September
2025 2025 2024 2024
(Book) (Fair) (audited) (audited)
(Book) (Fair)
Net asset value per ordinary share (a) 96.0p 100.2p 104.2p 108.0p
Share price (b) 91.6p 91.6p 91.0p 91.0p
Discount ((b) - (a)) ÷ (a) 4.6% 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.
As at As at As at As at
31 March 31 March 30 September 30 September
2025 2025 2024 2024
NAV (Fair) Share price NAV (Fair) Share price
Closing NAV per share/share price (a) 100.2p 91.6p 108.0p 91.0p
Dividend adjustment factor(*) (b) 1.0056 1.0064 1.0039 1.0045
Adjusted closing NAV per share/share price (c) = (a) x (b) 100.8p 92.2p 108.4p 91.4p
Opening NAV per share/share price (d) 108.0p 91.0p 96.7p 83.6p
Total return (c) ÷ (d) -1 (6.7%) 1.3% 12.1% 9.3%
(*) The dividend adjustment factor is calculated on the assumption that
the final dividend of 0.6p (31 September 2023 - 0.4p) paid by the Company
during the period was reinvested into shares of the Company at the cum income
NAV per share/share price, as appropriate, at the ex-dividend date.
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 the shareholders' assets is called
'gearing'. If the Company's assets grow, the shareholders' assets 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. Gross gearing is the Company's borrowings expressed as a
percentage of shareholders' funds. Gearing represents borrowings less cash and
cash equivalents expressed as a percentage of shareholders' funds.
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.
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
indexes 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 indexes or data and no party may rely on any
indexes or data contained in this communication. No further distribution of
data from the LSE Group is permitted without the relevant LSE Group company's
express written consent. The LSE Group does not promote, sponsor or endorse
the content of this communication.
- Ends -
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR AIMRTMTTBBRARecent news on Baillie Gifford European Growth Trust
See all newsREG - Baillie Gifford Euro - Net Asset Value(s)
AnnouncementREG - Baillie Gifford Euro - Transaction in Own Shares
AnnouncementREG - Baillie Gifford Euro - Net Asset Value(s)
AnnouncementREG - Baillie Gifford Euro - Transaction in Own Shares
AnnouncementREG - Baillie Gifford Euro - Net Asset Value(s)
Announcement