REG - Baillie Gifford UK - Baillie Gifford UK Growth Trust Annual Results
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RNS Number : 6822M Baillie Gifford UK Growth Trust PLC 13 June 2025
Baillie Gifford UK Growth Trust plc
Legal Entity Identifier: 549300XX386SYWX8XW22
Results for the year to 30 April 2025
For the year to 30 April 2025, the Company's net asset value ('NAV') total
return (capital and income) was 7.1% compared to 7.5% for the FTSE All-Share
Index total return. The share price total return for the same period was 13.6%
as the discount narrowed.
¾ It has felt like one step forward and one step back. Relative performance
was strong in the first half of the year but poor in the second half.
¾ The largest detractors to relative performance were: 4imprint, the direct
marketer of promotional merchandise, and Renishaw, a world leading engineering
company specialising in metrology. Games Workshop, a gaming company known for
its fantasy game Warhammer, and St James's Place, a UK wealth manager, were
the notable positive contributors to relative performance.
¾ The net revenue return for the year was 5.32p per share (2024: 5.68p). A
final dividend of 5.70p per share is being recommended (2024: 5.60p). This
dividend will be paid by way of a single final payment.
¾ Following on from the introduction of a conditional tender, based on
five-year performance to 30 April 2029, and additional continuation vote in
2027, in January this year the Board announced its intention of maintaining
the Company's discount in single figures in normal market conditions, building
on the initiatives to date to enhance shareholder value.
¾ Over the year a total of 17,403,697 shares, representing 11.9% of the
Company's issued share capital as at 30 April 2024, were bought back into
treasury. Since period end to 10 June 2025, a further 1,623,033 shares have
been bought back into treasury. The Company is seeking to refresh its buyback
authority at a General Meeting being convened 3 July 2025, which will be
superseded, if passed, by the buyback authority being requested as part of the
Company's Annual General Meeting business 3 September 2025;
¾ Chairman Neil Rogan commented: "The Directors are all acutely aware that
the Company remains in a recovery situation. We will continue to do all we can
to enhance shareholder returns. We know we need to demonstrate clear progress
by the time of the next continuation vote. But we also know that we are
sitting on a Company of enormous potential: The UK market as a whole is widely
regarded as unusually cheap both by comparison with its own history and with
global markets. That alone is a case for optimism. If growth stocks start to
outperform, either because they are so cheap already or because UK economic
growth accelerates from its very low current levels, then a favourable
tailwind should be felt again. And if all this coincides with investment trust
discounts reverting to normal levels, then the case for BGUK is compelling."
Total return information is sourced from Baillie Gifford/LSEG. See disclaimer
at the end of this announcement. For a definition of terms see Glossary of
Terms and Alternative Performance Measures at the end of this announcement.
Baillie Gifford UK Growth Trust plc invests to achieve capital growth
predominantly from investment in UK equities with the aim of providing a total
return in excess of the FTSE All-Share Index.
The Company is managed by Baillie Gifford & Co, an Edinburgh based fund
management group with around £209 billion under management and advice as at
10 June 2025.
Past performance is not a guide to future performance. Baillie Gifford UK
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 UK Growth Trust plc at
bgukgrowthtrust.com
(https://www.bailliegifford.com/en/uk/individual-investors/funds/baillie-gifford-uk-growth-trust/)
. 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:
Anzelm Cydzik, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Director, Four Communications
Tel: 0203 920 0555 or 07872 495396
The following is the results announcement for the year to 30 April 2025 which
was approved by the Board on 12 June 2025.
Chairman's statement
It has felt like one step forward and one step back this year. Relative
performance was strong in the first half of the year but poor in the second
half. For the full year to 30 April 2025, NAV total return was +7.1%%,
slightly behind the FTSE All-Share Index total return of +7.5%. Your share
price total return was better at +13.6% as the discount narrowed from 15.3% to
10.5%. The portfolio had been performing well until hitting an air pocket in
February/March when the uncertainty caused globally by President Trump's
tariff impositions and a simultaneous collapse in confidence in UK economic
growth hit UK equity returns and growth companies in particular. The
performance attribution numbers reveal that stock selection was the major
culprit, with 4Imprint and Renishaw the largest detractors.
Earnings and Dividend
For the year to 30 April 2025, the revenue return per share was 5.32p (2024 -
5.68p). The year‑on‑year decrease was largely as a consequence of reduced
dividends paid by 4Imprint and St James' Place and the sale of holdings in
Rio Tinto and Hargreaves Lansdown. One of the advantages of our investment
trust structure is that we can recommend a final dividend of 5.70p per share
to shareholders, payable on 12 September 2025. Accumulated Revenue Reserves
at the year end of 13.6p per share are ample to fund the difference, although
the number of shares bought back since the year-end (dividends are not paid on
shares held in Treasury) means that we are unlikely to need to dip into these
reserves this time.
The Company's focus is on capital growth rather than income; shareholders
should not expect a regular or steady level of income to be paid by the
Company.
Borrowings and Gearing
At present, the Company has a one-year £30 million rolling credit facility
with Royal Bank of Scotland International Limited. Drawn and invested gearing
stood at 9% and 9% of shareholders' funds as at the Company's year end
compared to 6% and 5% respectively a year earlier. Over the financial year,
invested gearing ranged between 4% and 10%.
The Board sets the gearing parameters within which the portfolio managers
operate. These are reviewed at each board meeting but are subject to drawn
gearing not representing more than 20% of shareholders' funds at time of
drawdown.
Issuance, Buybacks and Treasury
The Board is keen that the Company's shares do not trade at a double digit
discount to their NAV. Despite being more active in buying back shares over
the last year, at points the share price discount was wider than desired.
Therefore, in January, the Board announced to the market that it had
determined to use buybacks with the aim of maintaining a single digit discount
to the Company's NAV per share in normal market conditions. From 28 January
2025 to 30 April 2025, the Company's discount averaged 9.6% and has averaged
9.9% since the Company's year-end.
Over the Company's financial year, the discount averaged 13.1%, ranging
between 8.5% and 16.5%, ending the financial year at 10.5% compared to 15.3% a
year earlier. The Company bought back into treasury 17,403,697 shares,
representing 11.9% of the Company's issued share capital as at 30 April 2024.
Since the financial year end, a further 1,623,033 shares have been bought
back. The Company currently has 33,265,407 shares held in treasury.
The Company benefits from the flexibility of being able to issue new shares or
to re-issue any shares that might be held in treasury, when there is
sufficient demand, at a premium to NAV as this helps to improve trading
liquidity and reduces ongoing costs by being asset accretive. As some
shareholders will have noticed, the rate and quantum of buybacks has increased
over the course of 2025, meaning that the Company has called a General Meeting
for 3 July 2025 seeking shareholder approval to renew the buyback authority
earlier than would normally have been the case. Not doing so would likely mean
that the Company would run out of buyback authority prior to its next
scheduled renewal (subject to shareholder approval) request at the 3 September
2025 AGM. The Company will also seek to renew the annual issuance authority at
its upcoming AGM and this will supersede the authority, should it be granted,
of 3 July 2025. To avoid any dilution to existing shareholders, shares held in
treasury and any new shares would only be issued/re-issued at a premium to the
NAV per share and after associated costs.
Board Composition
As highlighted in my interim report, Ms Carolan Dobson stood down as Chairman
in August 2024, having served on the Board for nearly ten years. I would like
to reiterate my thanks to her for her contribution to the Company.
Following her retirement, Trust Associates, an external recruitment
consultant, was engaged to support the process to appoint a new board
director, resulting in the appointment of Ms Seema Paterson from 2 January
2025. Ms Paterson is a qualified chartered accountant and has notable senior
public and private company experience. Her biography, along with that of the
other directors, can be found on the Company's website bgukgrowthtrust.com
(https://www.bailliegifford.com/en/uk/individual-investors/funds/baillie-gifford-uk-growth-trust/)
.
The appointment of Ms Paterson is to be approved by shareholders at the
Company's AGM in September.
Annual General Meeting
The Company's AGM is scheduled to take place at noon, Wednesday 3 September at
1 Moorgate Place, City of London, London EC2R 6EA. Shareholders should note
that this is not the same venue as in 2024. The meeting will include a
presentation by the portfolio managers on the prospects for UK equities and
the positioning of the portfolio. They and the Board will be available to
answer any questions. Light refreshments will be available and shareholders
are welcome to bring a guest with them.
Outlook
With US policy announcements almost daily, any outlook such as this will date
quickly. So it will focus on the long term drivers for BGUK.
BGUK is a portfolio of long-term growth investments in the UK stock market.
The portfolio managers have researched the investment companies thoroughly and
have reviewed all of them in the past year to assess suitability for
retention. Measured by active risk, or deviation from the index, it is a very
active portfolio: Active share at 89.5% is very high compared to other UK
investment trust companies and OEICs. Portfolio turnover is lower than
elsewhere as the Managers' style is to take long-term conviction positions.
The portfolio managers cover the holdings in detail in their report but,
overall, the portfolio has an average PE ratio of 18.8 times for the current
year and a future 3Y projected EPS growth of 7.5%. It is unusual for a
portfolio of growth companies to trade at levels this attractive.
In the last 12 months, the Board has been active in making BGUK a better
proposition for investors. Last year we introduced a 5-year performance
conditional tender offer by which shareholders, if they wish, will be able to
sell their entire holding at NAV less 2% if the NAV total return over the 5
years to 30 April 2029 does not beat the FTSE All-Share Index. This makes the
Company somewhat of an each-way bet: If performance goes well, shareholders
should be rewarded handsomely; if it does not, then they will be able to sell
their holding near to NAV. Recognising that 5 years is a long time for some
shareholders to wait, we also introduced an additional continuation vote
scheduled for September 2027.
In January this year, we announced that we would step up our buyback policy
with the intention of maintaining the discount in single figures in normal
market conditions. Since then, conditions have hardly been normal at all, but
the discount has come in, to 10.5% at the year end and to 9.9% at the time of
writing.
All this comes while the Company still benefits from low fees: the management
fee of 0.5% is low for an active portfolio and the ongoing charges ratio of
0.71% stands up well against competitor funds both closed-ended and
open-ended. The ability to gear (or borrow to enhance returns) is another
positive factor. The amounts borrowed are managed day‑to‑day by the
portfolio managers and are a good reflection of their optimism about the
underlying portfolio. Overall limits are set by the Board.
The Directors are all acutely aware that the Company remains in a recovery
situation. We will continue to do all we can to enhance shareholder returns.
We know we need to demonstrate clear progress by the time of the next
continuation vote. But we also know that we are sitting on a Company of
enormous potential: The UK market as a whole is widely regarded as unusually
cheap both by comparison with its own history and with global markets. That
alone is a case for optimism. If growth stocks start to outperform, either
because they are so cheap already or because UK economic growth accelerates
from its very low current levels, then the Baillie Gifford tailwind should be
felt again. And if all this coincides with investment trust discounts
reverting to normal levels, then the case for BGUK is compelling. Especially
given the each-way bet of the 5‑year 100% performance conditional tender
offer.
We look forward with confidence.
Update
Since 30 April to 10 June 2025, the Company's share price and NAV total return
have been 9.7% and 8.7% respectively versus 5.3% for the FTSE All‑Share
Index total return. A further 1,623,033 shares have been bought back and the
discount stands at 9.9%.
Neil Rogan
Chairman
12 June 2025
Managers' report
After an encouraging period of performance in 2024, the opening months of 2025
were characterised by significant volatility, driven by geopolitical tensions,
inflationary concerns and cautious investor sentiment. Investors, therefore,
gravitated towards defensive, value-oriented sectors, while high-growth stocks
struggled despite strong fundamentals in many cases. We are disappointed to
report that the outperformance we noted in the interim report was erased in
the second half of the Company's financial year, so that we ended marginally
behind the index for the twelve months to 30 April 2025.
At the heart of this were some of the actions and comments from President
Trump in regard to tariffs. This could be an essay in itself, but for the
purposes of this Managers' Report it's enough to say that it's difficult to
assess the long-term implications of his actions and intentions. Indeed, even
if some of his proposals are moderated or reversed, it's hard to think that
there won't be damage caused to trading relationships. In the short term it
has certainly shaken the confidence of consumers and also businesses. Delaying
investment or purchasing decisions given the uncertainty at an individual
level might appear understandable, but if aggregated and prolonged, this could
prove damaging to short-term economic prospects.
Closer to home, the new Labour Government has been unable, so far at least, to
shake off its initial faltering steps and the frankly uninspiring narrative
has been made no easier with events outside their control in the form of
increasing concerns about the health of the global economy. With the domestic
economy still unable to break out of its low growth trajectory with higher
business taxes looming, consumer confidence has remained low, with
cost-of-living pressures curbing discretionary spending. The Chancellor's
Spring Statement did emphasise fiscal restraint but also lowered the UK growth
forecast from 2% to 1%. It's important to remember that many of our businesses
are only marginally impacted by this but a fair number are seeing a tougher
demand backdrop despite their long-term strengths and growth potential.
Indeed, when discussing performance, what was striking in the period was the
range of performance of stocks within our concentrated portfolio of 37
companies (36 listed and 1 private). Normally, when performance is close to
the benchmark, one would reasonably imagine that most stocks would be grouped
in a tightish band around the index and there'd be a few outliers (good and
bad) beyond that. This wasn't the case in this period. Instead, we saw a
picture of extremes: for example the shares of the six largest holdings in the
portfolio at the year end: Games Workshop, Autotrader, Volution Group,
Experian, Wise and AJ Bell, all performed very well reflecting for the most
part good underlying operational performance in each of these very different
businesses. There were a fair few others that are smaller positions which also
saw similar positive share price performance such as Just Group, Moonpig and
Rightmove. In contrast, Howden Joinery was the only one of our top ten
holdings that underperformed. However, there were also a notable number of
other holdings in the portfolio that performed extremely poorly. It's here
that we get to the heart of the matter as it helps explain the more difficult
performance of the second half because most of these stocks were economically
sensitive businesses such as 4imprint, Inchcape, Ashtead, Renishaw, Bodycote
and Page Group. There were also some company specific problems that hurt
Diageo, Bunzl and Kainos.
The key debate for a long-term investor is whether a share price setback is
indicative of something going fundamentally wrong with the business or whether
it is a temporary or cyclical issue. In all of the above cases, we've
carefully thought about this and for the most part other than some modest
additions and trims, we've largely stuck with the same positions. This is
because we believe that these businesses have the operational and balance
sheet strength, alongside sensible management teams, to weather the storms and
come through in even better shape. For example, it will be no surprise to any
reader that the UK kitchen market has been a tough place in the last couple of
years but while its short term financial results are off their peak, Howdens
Kitchens is outperforming the kitchen market and, crucially in our view, still
investing in its manufacturing, logistics, store refurbishment and new
openings as well as launching new product ranges. In our view, this is an
example of a business having the conviction to do the right things in tough
times to position the business for an even brighter future when better times
return. In Howdens' case, it is particularly laudable as, unlike some of our
technology or 'platform' investments, it does not earn particularly high
profit margins, albeit it has the safety net of a very strong balance sheet.
In terms of trading, we made no new purchases in the second half of the
Company's year. We did decide to add to positions in Moonpig as we think the
market is still underestimating the potential of this online card retailer. We
also added to 4imprint, a direct marketer of promotional products, where the
shares have been derated on US economic fears but where we think this tougher
environment actually allows its scale and superior management to lay the
groundwork, as in previous downturns, to strengthen their growth potential
when the US economy recovers. On the other side, we sold out of the insurer
Hiscox, the miner Rio Tinto and modestly reduced positions in a few stocks
such as Relx, Games Workshop, Ashtead and Bunzl. While we have a high opinion
of the management of Hiscox, we have been disappointed by the lack of growth
in its retail business while we simply felt with Rio Tinto that the demand
backdrop looked dull.
It should be emphasised that much of this selling activity was a result of the
Company's new buyback policy that led to an acceleration of shares purchased
in the second half of the Company's year. As managers we could simply have
prorated sales across the whole portfolio but with the backing and
encouragement of the Board we have tried to apply a 'competition for capital'
mindset and decided to reduce or sell those investments either where we had a
lower degree of conviction or in cases of Relx and Games Workshop where we
retain our enthusiasm, but acknowledged the shares have performed very well
and the valuation was more demanding. In a concentrated portfolio this seemed
to us to be a more logical step than potentially reducing holdings where we
retain strong conviction. That said, at the period end we were close to the
lower end of our 35 - 65 range of companies so we can't rule out a slightly
different approach in the future.
Outlook
The last few years have vividly demonstrated that 'stuff happens' far more
frequently than any model would predict. Whatever the reasons for that, the
effect of appearing to live in a world 'permanently in fast forward' can be
dizzying, disorientating, exciting and slightly alarming at times. Trying to
unpick this, the problem is often evaluating whether current concerns are
transitory or genuinely seismic. We'd humbly posit that far more fall into the
former category than the market or commentators would have you believe.
However, it's vital also to remember that for nimble, far sighted management
teams, uncertain times can be a source of great opportunity too. For us, it
helps immeasurably having the discipline of a clear investment framework of
growth investing that allows us to keep evaluating the fundamental quality of
the portfolio and to search for new opportunities without getting sucked into
distractions. That we have continued to stick with most of the holdings over
the year is testament to a lot of time spent with businesses genuinely trying
to evaluate their prospects. While we are very aware that long term
performance needs to improve, we remain highly encouraged by the potential of
the companies in the portfolio and remain optimistic about its
future prospects.
Iain McCombie and Milena Mileva
Baillie Gifford & Co
12 June 2025
The managers' core investment principles
Investment philosophy
The following are the three core principles underpinning our investment
philosophy. We have a consistent, differentiated long-term investment
approach to managing UK equities that should stand investors in the Company
in good stead:
Growth
We search for the few companies which have the potential to grow
substantially and profitably over many years. Whilst we have no insight into
the short-term direction of a company's share price, we believe that, over the
longer term, those companies which deliver above average growth in cash flows
will be rewarded with above average share price performance and that the
power of compounding is often under-appreciated by investors. Successful
investments will benefit from a rising share price and also from income
accumulated over long periods of time.
Patience
Great growth companies are not built in a day. We firmly believe that
investors need to be patient to fully benefit from the scale of the
potential. Our investment time horizon, therefore, spans decades rather than
quarters and our portfolio turnover is significantly below the UK industry
average. This patient, long-term approach affords a greater chance for the
superior growth and competitive traits of companies to emerge as the dominant
influence on their share prices and allows compounding to work in the
investors' favour.
Active investment management
It is our observation that too much attention is paid to the composition of
market indices and active managers should make meaningful investments in
their best ideas regardless of the weightings of the index. As a result,
shareholders should expect the composition of the portfolio to
be significantly different from the benchmark and hence the outcome in
returns (in both good and bad periods) will also be significantly different
from the benchmark. This differentiation is a necessary condition for
delivering superior returns over a long-term time horizon.
Portfolio construction flows from the investment beliefs stated above.
Baillie Gifford's stewardship principles
Baillie Gifford's overarching ethos is that we are 'Actual' investors. That
means we seek to invest for the long term. Our role as an engaged owner is
core to our mission to be effective stewards for our clients. As an active
manager, we invest in companies at different stages of their evolution across
many industries and geographies, and focus on their unique circumstances and
opportunities. Our approach favours a small number of simple principles rather
than overly prescriptive policies. This helps shape our interactions with
holdings and ensures our investment teams have the freedom and retain the
responsibility to act in clients' best interests.
Long-term value creation
We believe that companies that are run for the long term are more likely to be
better investments over our clients' time horizons. We encourage our holdings
to be ambitious, focusing on long-term value creation and capital deployment
for growth. We know events will not always run according to plan. In these
instances we expect management to act deliberately and to provide appropriate
transparency. We think helping management to resist short-term demands from
shareholders often protects returns. We regard it as our responsibility to
encourage holdings away from destructive financial engineering towards
activities that create genuine value over the long run. Our value will often
be in supporting management when others don't.
Alignment in vision and practice
Alignment is at the heart of our stewardship approach. We seek the fair and
equitable treatment of all shareholders alongside the interests of management.
While assessing alignment with management often comes down to intangible
factors and an understanding built over time, we look for clear evidence of
alignment in everything from capital allocation decisions in moments of stress
to the details of executive remuneration plans and committed share ownership.
We expect companies to deepen alignment with us, rather than weaken it, where
the opportunity presents itself.
Governance fit for purpose
Corporate governance is a combination of structures and behaviours; a careful
balance between systems, processes and people. Good governance is the
essential foundation for long-term company success. We firmly believe that
there is no single governance model that delivers the best long-term outcomes.
We therefore strive to push back against one-dimensional global governance
principles in favour of a deep understanding of each company we invest in. We
look, very simply, for structures, people and processes which we think can
maximise the likelihood of long-term success. We expect to trust the boards
and management teams of the companies we select, but demand accountability
if that trust is broken.
Sustainable business practices
A company's ability to grow and generate value for our clients relies on a
network of interdependencies between the company and the economy, society and
environment in which it operates. We expect holdings to consider how their
actions impact and rely on these relationships. We believe long-term success
depends on maintaining a social licence to operate and look for holdings to
work within the spirit and not just the letter of the laws and regulations
that govern them. Material factors should be addressed at the board level as
appropriate.
List of investments as at 30 April 2025
Name Business Fair value % of total
£'000 assets
Consumer discretionary
Games Workshop Toy manufacturer and retailer 21,376 7.5
Howden Joinery Manufacturer and distributor of kitchens to trade customers 11,061 3.9
Moonpig Online greetings card and gifting platform 9,836 3.5
4imprint Direct marketer of promotional merchandise 7,444 2.6
Inchcape Car wholesaler and retailer 6,579 2.3
Burberry Luxury goods retailer 2,891 1.0
59,187 20.8
Consumer staples
Diageo International drinks company 5,948 2.1
Applied Nutrition Producer of premium nutrition supplements 1,104 0.4
7,052 2.5
Financials
AJ Bell UK wealth manager 12,445 4.4
Just Group Provider of retirement income products and services 11,010 3.9
St. James's Place UK wealth manager 10,070 3.5
Legal & General Insurance and investment management company 9,143 3.2
Prudential International life insurer 7,300 2.6
Lancashire Holdings General insurance 6,804 2.4
IntegraFin Provides platform services to financial clients 5,970 2.1
Molten Ventures Technology focused venture capital firm 3,456 1.2
66,198 23.3
Healthcare
Genus World leading animal genetics company 7,365 2.6
Creo Medical Designer and manufacturer of medical equipment 449 0.2
Oxford Nanopore Novel DNA sequencing technology 368 0.1
8,182 2.9
Industrials
Volution Group Supplier of ventilation products 18,177 6.4
Experian Global provider of credit data and analytics 15,255 5.4
Wise Online platform to send and receive money 13,331 4.7
Halma Specialist engineer 8,840 3.1
Ashtead Construction equipment rental company 5,759 2.0
Renishaw World leading metrology company 5,716 2.0
Bunzl Distributor of consumable products 5,475 1.9
Bodycote Heat treatment and materials testing 4,425 1.6
PageGroup Recruitment consultancy 2,937 1.0
FDM Group Provider of professional services focusing on information technology 1,757 0.6
81,672 28.7
Real estate
Rightmove UK's leading online property portal 7,846 2.7
Helical Property developer 3,920 1.4
11,766 4.1
Technology
Auto Trader Group Advertising portal for second hand cars in the UK 18,103 6.4
Softcat IT reseller and infrastructure solutions provider 10,352 3.6
Kainos Group IT services and implementer 6,679 2.3
RELX Professional publications and information provider 6,448 2.3
Wayve Technologies Ltd Series B Pref.(U) Developer of full autonomous driving systems 3,757 1.3
First Derivatives IT consultant and software developer 3,561 1.3
48,900 17.2
Total Equities 282,957 99.5
Net Liquid Assets 1,480 0.5
Total Assets 284,437 100.0
(U) Denotes unlisted (private company) investment.
Income statement
For the year ended 30 April 2025 (with comparatives for the year ended 30
April 2024)
Notes 2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments 9 - 11,412 11,412 - (6,288) (6,288)
Currency losses - (48) (48) - (93) (93)
Income 2 8,893 - 8,893 9,787 - 9,787
Investment management fee 3 (433) (1,010) (1,443) (421) (982) (1,403)
Other administrative expenses 4 (598) - (598) (568) - (568)
Net return before finance costs and taxation 7,862 10,354 18,216 8,798 (7,363) 1,435
Finance costs of borrowings 5 (394) (919) (1,313) (314) (732) (1,046)
Net return on ordinary activities before taxation 7,468 9,435 16,903 8,484 (8,095) 389
Tax on ordinary activities 6 - - - - - -
Net return of ordinary activities after taxation 7,468 9,435 16,903 8,484 (8,095) 389
Net return per ordinary share 7 5.32p 6.72p 12.04p 5.68p (5.42p) 0.26p
Dividends declared in respect of the financial year ended 30 April 2025 amount
to 5.70p (2024 - 5.60p). Further information on dividend distributions can be
found in note 8 below.
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 below are an integral part of the Financial Statements.
Balance sheet
As at 30 April 2025 (with comparatives as at 30 April 2024)
Notes 2025 2025 2024 2024
£'000 £'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 9 282,957 296,590
Current assets
Debtors 10 1,776 2,242
Cash and cash equivalents 18 823 1,917
2,599 4,159
Creditors
Amounts falling due within one year 11 (25,469) (17,596)
Net current liabilities (22,870) (13,437)
Net assets 260,087 283,153
Capital and reserves
Share capital 12 40,229 40,229
Share premium account 13 11,664 11,664
Capital redemption reserve 13 19,759 19,759
Warrant exercise reserve 13 417 417
Share purchase reserve 13 17,522 49,380
Capital reserve 13 152,943 143,508
Revenue reserve 13 17,553 18,196
Shareholders' funds 260,087 283,153
Net asset value per ordinary share* 14 201.2p 193.0p
* See Glossary of Terms and Alternative Performance Measures at
the end of this announcement.
The accompanying notes below are an integral part of the Financial Statements.
Statement of changes in equity
For the year ended 30 April 2025
Notes Share Share Capital Warrant Share Capital Revenue Shareholders'
capital premium redemption exercise purchase reserve reserve funds
£'000 account reserve reserve reserve £'000 £'000 £'000
£'000 £'000 £'000 £'000
Shareholders' funds at 1 May 2024 40,229 11,664 19,759 417 49,380 143,508 18,196 283,153
Ordinary shares bought back into treasury 12 - - - - (31,858) - - (31,858)
Dividends paid during the year 8 - - - - - - (8,111) (8,111)
Net return on ordinary activities after taxation 7 - - - - - 9,435 7,468 16,903
Shareholders' funds at 30 April 2025 40,229 11,664 19,759 417 17,522 152,943 17,553 260,087
For the year ended 30 April 2024
Notes Share Share Capital Warrant Share Capital Revenue Shareholders'
capital premium redemption exercise purchase reserve reserve funds
£'000 account reserve reserve reserve £'000 £'000 £'000
£'000 £'000 £'000 £'000
Shareholders' funds at 1 May 2023 40,229 11,664 19,759 417 55,628 151,603 15,122 294,422
Ordinary shares bought back into treasury 12 - - - - (6,248) - - (6,248)
Dividends paid during the year 8 - - - - - - (5,410) (5,410)
Net return on ordinary activities after taxation 7 - - - - - (8,095) 8,484 389
Shareholders' funds at 30 April 2024 40,229 11,664 19,759 417 49,380 143,508 18,196 283,153
The accompanying notes below are an integral part of the Financial Statements.
Cash flow statement
For the year ended 30 April 2025 (with comparatives for the year ended 30
April 2024)
Notes 2025 2025 2024 2024
£'000 £'000 £'000 £'000
Cash flows from operating activities
Net return on ordinary activities before taxation 16,903 389
Adjustments to reconcile company profit before tax to net cash flow from
operating activities
Net (gains)/losses on investments 9 (11,412) 6,288
Currency losses 48 93
Finance costs of borrowings 1,313 1,046
Other capital movements
Changes in debtors (126) (171)
Changes in creditors (96) 31
Cash from operations* 6,630 7,676
Interest paid (1,284) (897)
Net cash inflow from operating activities 5,346 6,779
Cash flows from investing activities
Acquisitions of investments (7,944) (24,185)
Disposals of investments 33,581 23,251
Net cash inflow/(outflow) from investing activities 25,637 (934)
Cash flows from financing activities
Bank loan drawn down 8,000 1,900
Equity dividends paid 5 (8,111) (5,410)
Ordinary shares bought back into treasury and stamp duty thereon 12 (31,918) (5,837)
Net cash outflow from financing activities (32,029) (9,347)
(Decrease) in cash and cash equivalents (1,046) (3,502)
Exchange movements (48) (93)
Cash and cash equivalents at start of year 15 1,917 5,512
Cash and cash equivalents at end of year† 15 823 1,917
* Cash from operations includes dividends received of £8,693,000 (2024 -
£9,539,000) and £82,000 deposit interest (2024 - £82,000).
† Cash and cash equivalents represents cash at bank and short-term
deposits repayable on demand.
The accompanying notes below are an integral part of the Financial Statements.
Notes to the Financial Statements
1. The Financial Statements for the year to 30 April 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 in the Annual Report and Financial Statements which are
consistent with those applied for the year ended 30 April 2024.
2. Income
2025 2024
£'000 £'000
Income from investments
UK dividends 8,811 9,705
Other income
Deposit interest 82 82
Total 8,893 9,787
income
Special dividends received in the year amounted to
£1,303,000 (2024 - £1,491,000) with £1,303,000 (2024 - £1,491,000)
classified to revenue and nil (2024 - nil) classified to capital.
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 433 1,010 1,443 421 982 1,403
Baillie Gifford & Co Limited, a wholly owned subsidiary
of Baillie Gifford & Co, has been appointed as the Company's Alternative
Investment Fund Manager ('AIFM') and Company Secretary. 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 by
the Managers on not less than six months' notice or on shorter notice in
certain circumstances. With effect from 6 June 2024, the Investment Management
Agreement is terminable by the Company on not less than three months' notice
or on shorter notice in certain circumstances. Prior to this, the Investment
Management Agreement was terminable by the Company on not less than six
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 0.5% of net assets, 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 5.32p 6.72p 12.04p 5.68p (5.42p) 0.26p
Revenue return per ordinary share is based on the net
revenue return on ordinary activities after taxation of £7,468,000 (2024 -
£8,484,000), and on 140,340,918 (2024 - 149,401,543) 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 £9,435,000 (2024 - net capital loss of
£8,095,000), and on 140,340,918 (2024 - 149,401,543) 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 year:
Previous year's final dividend (paid 13 September 2024) 5.60p 3.60p 8,111 5,410
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
£7,468,000 (2024 - £8,484,000).
2025 2024 2025 2024
£'000 £'000
Dividends paid and payable in respect of the year:
Proposed final dividend (payable 12 September 2025) 5.70p 5.60p 7,369 8,214
If approved, the final dividend of 5.70p will be paid on 12
September 2025 to all shareholders on the register at the close of business on
15 August 2025. The ex-dividend date is 14 August 2025.
6. At 30 April 2025, the Company had a one year £30 million
unsecured revolving credit loan facility with The Royal Bank of Scotland
International Limited which expires in July 2025. At 30 April 2025,
£24,350,000 was drawn down under this facility. At 30 April 2024,
£16,350,000 was drawn down under a one year £30 million unsecured revolving
credit loan facility with The Royal Bank of Scotland International Limited
which expired in July 2024.
The main covenant relating to the above loan is that total
borrowings shall not exceed 30% of adjusted portfolio value. There were no
breaches of loan covenants during the year.
7. Transaction costs of £32,000 (2024 - £118,000) and £11,000
(2024 - £9,000) were suffered on purchases and sales respectively.
8. 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 the Company's Annual General Meeting held on
4 September 2024 the Company was granted authority to buy back 21,590,578
ordinary shares. During the financial year to 30 April 2025, 17,403,697 shares
were bought back into treasury at a total cost of £31,858,000 (2024 -
3,841,977 shares were bought back into treasury at a total cost of
£6,248,000).
In the year to 30 April 2025, no shares were sold from
treasury (2024 - no shares were sold from treasury). At 30 April 2025 the
Company had authority to issue or sell from treasury 14,604,350 ordinary
shares.
9. The financial information set out above does not constitute the
Company's statutory accounts for the year ended 30 April 2025 or 2024. The
financial information for 2024 is derived from the statutory accounts for 2024
which have been delivered to the Registrar of Companies. The Auditor has
reported on the 2024 accounts, their report was (i) unqualified, (ii) did not
include a reference to any matters to which the Auditor drew attention by way
of emphasis without qualifying their report; and (iii) did not contain a
statement under section 498(2) or (3) to 497 of the Companies Act 2006.
10. The Annual Report and Financial Statements will be available on
the Company's website bgukgrowthtrust.com on or around 3 July 2025. None of
the views expressed in this document should be construed as advise 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 held less all liabilities (other than liabilities in the
form of borrowings).
Net Asset Value
Net Asset Value ('NAV') is the value of total assets less liabilities
(including borrowings). The NAV per share is calculated by dividing this
amount by the number of ordinary shares in issue (excluding treasury shares).
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. 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.
2025 2024
Closing NAV per share 201.2p 193.0p
Closing share price 180.0p 163.5p
Discount (10.5%) (15.3%)
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 2024 2024
NAV share price NAV share price
Closing NAV per share/share price (a) 201.2p 180.0p 193.0p 163.5p
Dividend adjustment factor* (b) 1.0275 1.0317 1.0197 1.0226
Adjusted closing NAV per share/share price (c = a x b) 206.7p 185.7p 196.8p 167.2p
Opening NAV per share/share price (d) 193.0p 163.5p 195.6p 168.0p
Total return (c ÷ d)-1 7.1% 13.6% 0.6% (0.5%)
* The dividend adjustment factor is calculated on the assumption that the
dividend of 5.60p (2024 - 3.60p) paid by the Company during the year were
reinvested into shares of the Company at the cum income NAV per share/share
price, as appropriate, at the ex-dividend date.
Ongoing charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a
percentage of the average net asset 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 above is
provided below.
2025 2024
Investment management fee £1,442,000 £1,403,000
Other administrative expenses £598,000 £568,000
Total expenses (a) £2,040,000 £1,971,000
Average net asset value (b) £287,088,000 £280,829,000
Ongoing charges ((a) ÷ (b) expressed as a percentage) 0.71% 0.70%
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.
Invested gearing is the Company's borrowings adjusted for cash and cash
equivalents expressed as a percentage of shareholders' funds.
2025 2024
Borrowings £24,350,000 £16,350,000
Less: cash and cash equivalents (£823,000) (£1,917,000)
Adjusted borrowings £23,527,000 £14,433,000
Shareholders' funds £260,087,000 £283,153,000
Invested gearing 9% 5%
Drawn gearing is the Company's borrowings expressed as a percentage of
shareholders' funds.
2025 2024
Borrowings £24,350,000 £16,350,000
Shareholders' funds £260,087,000 £283,153,000
Drawn gearing 9% 6%
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. The Company's maximum and actual
leverage as at the year end are set out on page 99 Annual Report and Financial
Statements.
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.
Unlisted (Private) Company
An unlisted (private) company means a company whose shares are not available
to the general public for trading and not listed on a stock exchange.
Sustainable Finance Disclosure Regulation ('SFDR')
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 UK Growth Trust plc 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 stewardship 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
stewardship principles and guidelines document, available publicly on the
Baillie Gifford website bailliegifford.com.
The underlying investments do not take into account the EU criteria for
environmentally sustainable economic activities established under the EU
Taxonomy Regulation.
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 will require investment trust companies to provide personal
information to HMRC on certain investors who purchase shares in investment
trusts. As an affected company, Baillie Gifford UK Growth Trust plc 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.
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