REG-BlackRock Energy and Resources Income Trust Plc: Half-year Report
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BlackRock Energy and Resources Income Trust plc
LEI: 54930040ALEAVPMMDC31
Half Yearly Financial Report for the six months ended 31 May 2025
Performance record
As at As at
31 May 30 November
2025 2024
Net assets (£’000) 1 142,334 167,327
Net asset value per ordinary share (pence) 121.81 137.66
Ordinary share price (mid-market) (pence) 111.00 121.00
Discount to net asset value 2 8.9% 12.1%
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For the six For the year
months ended ended
31 May 30 November
2025 2024
Performance 3 (with dividends reinvested)
Net asset value per share 2 -10.0% 15.3%
Ordinary share price 2 -6.5% 14.0%
Reference index 3 -9.2% 0.5%
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Since inception Since inception
to 31 May 2025 to 30 November
2024
Performance since inception 4 (with dividends reinvested)
Net asset value per share 2 224.0% 259.9%
Ordinary share price 2 197.7% 218.4%
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For the six For the six Change
months ended months ended %
31 May 31 May
2025 2024
Revenue
Net profit on ordinary activities after taxation (£’000) 2,381 2,334 2.0
Revenue earnings per ordinary share (pence) 5 2.00 1.83 9.3
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Interim dividends (pence)
1st interim 1.125 1.125 –
2nd interim 6 1.125 1.125 –
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Total dividends payable/paid 2.250 2.250 –
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1 The change in net assets reflects portfolio movements, the repurchase of
shares and dividends paid during the period.
2 Alternative Performance Measures, see Glossary within the Half Yearly
Financial Report.
3 Reference index is the blended reference index comprised of three indices
– the MSCI ACWI Select Metals & Mining Producers Ex Gold and Silver IM
(Mining), the MSCI World Energy Index (Traditional Energy) and S&P Global
Clean Energy Index (Energy Transition) with a 40:30:30 mix of the 3 indices.
Net total return indices calculate the reinvestment of dividends net of
withholding taxes.
4 The Company was launched on 13 December 2005.
5 Further details are given in the Glossary within the Half Yearly Financial
Report.
6 Paid on 14 July 2025.
Chairman’s Statement
Dear Shareholder, I am pleased to present the Company’s Half Yearly
Financial Report for the six months to 31 May 2025.
Period Highlights
- NAV underperformance of the blended reference index of
-0.8% for the six months to 31 May 2025 against a challenging market backdrop;
- Strong longer-term performance with NAV per share
outperformance of the blended reference index over 1, 3 and 5 years to 31 May
2025 of 7.4%, 14.0% and 55% respectively;
- Quarterly dividend increased by 11.1% to 1.25p per share
for the financial year to November 2025;
- New dividend policy introduced with effect from 1 December
2025, with target dividend to be the higher of the total prior year dividend
and 4% of the closing NAV at the end of the financial year; and
- Continuation vote to be held at the AGM to be held in 2026
to give all shareholders a voice in respect of the future of their investment
in the Company.
Market overview
At the start of the Company’s financial year on 1 December 2024 and through
the first half of 2025, markets were impacted by both geopolitical tensions
and the US announcements of trade tariffs on its key trading partners which
resulted in significant equity market volatility. Equity market investors
sought alternative assets such as gold and money market funds, reducing
exposure to US equities and bonds in favour of UK and European securities.
Global markets recovered towards the end of the period as negotiations between
the US and China appeared to progress more positively. Given the mix of
opportunity and risks, the Board is confident in your Company’s 3-pronged
investment strategy (Mining, Traditional Energy and Energy Transition), giving
the portfolio managers the flexibility to manoeuvre the portfolio around
volatile markets to invest in stocks where they think the best investment
opportunities can be found. The portfolio managers decreased Traditional
Energy exposure through 2024 and into 2025, to stand at 29.5% at the end of
the period, and increased the weighting in the Energy Transition sector to
29.5% at 31 May 2025. The rationale for these changes is detailed in the
Investment Managers’ Report but can be summarised as a view that oil markets
are well supplied and with the de-rating of many Energy Transition stocks
relative to the overall market, more compelling opportunities in this sector
have emerged for the first time in a number of years.
Performance
In the challenging market during the six months ended 31 May 2025, the
Company’s net asset value (NAV) per share fell by 10.0% and its share price
fell by 6.5% (both percentages in Sterling terms with dividends reinvested).
Over the last six months, the NAV performance was slightly behind the internal
reference index that the fund manager and the Board use to evaluate
performance (-9.2% on the same basis), although since the adoption of the new
reference index, NAV performance has been substantially ahead of this index,
as shown in the table below. Performance has been measured against a blended
reference index which comprised of three indices (all net, total return
indices) with a 40:30:30 mix – the MSCI ACWI Select Metals & Mining
Producers Ex Gold and Silver IM (Mining), the MSCI World Energy Index
(Traditional Energy) and S&P Global Clean Energy Index (Energy Transition).
Subsequent to the period end and as at 29 July 2025, performance has been
strong, with the NAV of the Company increasing by 11.1% from 121.81 pence per
share to 134.10 pence per share and the Company’s share price rising by
10.6% from 111.00 pence per share to 121.50 pence per share (all percentages
in Sterling terms with dividends reinvested).
Cumulative performance as at 31 May 2025
Six months 1 Year 2 Years 3 Years 5 Years Since
Change change change change change inception 1
% % % % % %
Performance to 31 May 2025
Net Asset Value (with dividends reinvested) 2 -10.0 -8.8 6.2 -2.6 125.0 224.0
Share price (with dividends reinvested) 2 -6.5 -5.1 7.4 -12.6 147.9 197.7
Reference index 3,4 -9.2 -16.2 -9.9 -16.6 70.0 N/A
Relative (underperformance)/outperformance of NAV return against the reference index -0.8 7.4 16.1 14.0 55.0 N/A
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1 The Company was launched on 13 December 2005.
2 Further details of the calculation of net total return performance net of
withholding taxes and with dividends reinvested are given in the Glossary
within the Half Yearly Financial Report.
3 Reference index is the blended reference index comprised of three indices
– the MSCI ACWI Select Metals & Mining Producers Ex Gold and Silver IM
(Mining), the MSCI World Energy Index (Traditional Energy) and S&P Global
Clean Energy Index (Energy Transition) with a 40:30:30 mix of the 3 indices.
This reference index was adopted effective from 1 June 2020.
4 Please note though, that the Company’s objectives are to achieve both an
annual dividend target and, over the long term, capital growth (see table
above). Consequently, the Board does not formally benchmark performance
against mining and energy sector indices as meeting a specific dividend target
is not within the scope of these indices. In addition, there is no publishable
index with a close match to the Energy Transition portfolio; the S&P Global
Clean Energy Index following recent changes is the best available proxy.
Source: BlackRock. Data as at 31 May 2025.
Our portfolio managers provide a detailed description of the main contributors
and detractors to performance during the period, insight into the positioning
of the portfolio and their views on the outlook for the forthcoming year in
their report below.
Revenue return and dividends
The Company’s revenue return for the six-month period was 2.00 pence per
share, an increase of 9.3% over the same period last year (1.83 pence per
share). The Board is cognisant of the importance of a reliable, steady income
to its shareholders. The Board is also mindful of the need to ensure the
dividend yield remains competitive and aligned to developments in the wider
market, noting in particular the evolution of the interest rate environment
and inflationary pressures in recent years. With this in mind, the Board is
pleased to announce that it is increasing the quarterly dividend target from
1.125 pence per share to 1.25 pence per share (an increase of 11.1%) for the
remainder of the year to 30 November 2025. Together with the two quarterly
dividends of 1.125 pence per share already paid this financial year, this new
run rate will deliver a total dividend of 4.75 pence per share in respect of
the current financial year, an increase of 5.6% compared to the previous year,
which represents a yield of 4.3% based on the share price at 31 May 2025 (3.9%
based on NAV).
In addition to the increased quarterly dividend, the Board has decided to
target a dividend in each financial year of the greater of (i) the total
dividend per share in respect of the prior year and (ii) at least 4% of NAV
per share at the end of the preceding financial year with effect from 1
December 2025 onwards (with any additional top up required to be paid at the
time of the fourth quarterly dividend as needed).
The Company will take advantage of the flexibilities, offered by its structure
as a closed-ended fund to meet this target dividend next year and beyond.
Dividends will be funded primarily from a mix of dividend income from the
portfolio and revenue reserves (the Company has substantial accumulated
revenue reserves), and this may be supported by other distributable reserves
if required.
The Company may also continue to write options to generate revenue return,
although the portfolio managers’ focus is on investing the portfolio to
generate an optimal level of total return without striving to meet an annual
income target and will only undertake option transactions to the extent that
the overall contribution is beneficial to total return.
This dividend target should not be interpreted as a profit forecast.
Gearing
The Company operates a flexible gearing policy which depends on prevailing
market conditions. It is not intended that gearing will exceed 20% of the
gross assets of the Company. The maximum gearing used during the period was
13.9%, and the level of gearing at 31 May 2025 was 8.1%. For calculations, see
the Glossary within the Half Yearly Financial Report.
Agreement with Saba Capital Management L.P.
On 22 January 2025 the Company announced that it had entered into an agreement
with Saba Capital Management L.P. (‘Saba’) pursuant to which Saba has
given a number of undertakings to the Company, including commitments not to
put forward any proposals to shareholders nor to requisition any resolution or
general meeting of the Company nor to seek to control or influence the Board
or the Company or the policies or management of the Company. More detail can
be found in the stock exchange announcement which is available at the
following link
https://www.londonstockexchange.com/news-article/BERI/agreement-with-saba/16863476.
The agreement covers the period up to the Company’s 2027 AGM (expected to be
held in March 2027). The Board is committed at all times to exercising the
best standards of corporate governance, promoting the success of the Company
and putting first the interests of shareholders as a whole, and the agreement
in no way restricts the Board’s or the Company’s independence.
AGM Resolution – votes ‘against’ in excess of 20%
At the Company’s Annual General Meeting held on 20 March 2025, resolution 2
(to approve the Directors’ Remuneration Report for the year ended 30
November 2024) received 10.6 million votes against, representing 42% of total
shares voted. The substantial majority of these votes were cast by a single
shareholder, and the Board, in conjunction with its Broker (Winterflood
Securities Limited), has discussed the reasons for the ‘against’ vote with
this shareholder. The main issues raised concerned the level and persistence
of the discount to NAV at which the Company’s shares had traded over time.
The Board highlighted its policies for managing its share rating as described
below. To the extent this policy may impact on scale, the Board has sought to
insulate shareholders from the risk of a smaller scale impacting cost by
negotiating with BlackRock a further reduction in the cap on operating costs
in 2024 from 1.25% to 1.15% of NAV.
In addition, the Board highlighted that it had regularly sought the views of
other shareholders, who have generally been supportive, and the importance of
ensuring that views of all shareholders were taken into account. It also noted
that the Company had announced on 26 February 2025 that it would offer a
continuation vote at the 2026 AGM to allow all shareholders to have a voice in
respect of the future of their investment in the Company.
Management of share rating
The Directors recognise the importance to investors that the Company’s share
price should not trade at a significant premium or discount to NAV, and
therefore, in normal market conditions, may use share repurchases, sales of
shares from treasury and share issues to ensure that the share price does not
differ excessively from the underlying NAV.
Discounts across the closed-end funds sector remained wide over the period
under review, driven by ongoing uncertainty around interest rates, cost
inflation and global economic growth. Against this challenging backdrop, the
Company’s shares started the six months under review trading at a discount
of 12.1% and ended the period at 8.9%, which compared to a closed-end fund
sector average (excluding 3i Group) of 14.0% and an average for the AIC
Commodities and Natural resources peer group of 10.2% at 31 May 2025. The
Board stepped in actively to manage the discount, buying back 4,708,000 shares
in the period under review at a cost of £5,497,000 and at an average discount
of 9.7%. This discount management activity has continued since the period end,
and up to 29 July 2025, the Company repurchased 1,875,000 ordinary shares for
a net consideration of £2,161,000 at an average discount of 9.4%. As at 29
July 2025 the Company’s shares were trading at a discount of 9.4%. The
Board’s objectives in exercising the buy back are to seek to minimise share
price volatility and encourage the Company’s share price to trade within as
tight a range as possible, taking into account the various factors described
above. The Board seeks to balance this aim, and to control discount
volatility, against its desire to avoid excessive buybacks which impact the
size of the Company and hence the liquidity of its shares and the Ongoing
Charges Ratio. However, despite consistent and targeted action in support of
the share rating, it was disappointing to see the discount remain wide during
the period. The Board recognises that shareholders experience the share price
performance of the Company and, in conjunction with our Broker and the
Manager, keep the share rating under continuous review seeking to understand
and address the drivers of the discount.
There are of course several factors which influence the level of
premium/discount at which a Company’s shares trade in the market, many of
which are outside of the Board’s direct scope of control or influence. It is
important to view the Company’s share rating in the wider market context,
noting that the Investment Trust sector average discount at 29 July 2025 had
widened to 13.3% compared to 12.1% at the year ended 30 November 2024.
Overall, we believe the share buyback activity undertaken has been beneficial
in reducing the volatility of our share rating and delivering a NAV accretion
of £583,000 (0.5 pence per share) during the period.
Market outlook and portfolio positioning
Increased power demand from artificial intelligence (AI) applications are
likely to spur increased demand on electricity grids and the materials and
fuels that power them. Therefore, the flexibility of the Company’s
investment mandate with the ability to shift exposure between Mining,
Traditional Energy and Energy Transition sectors, means that it is uniquely
positioned to serve investors as these sectors evolve. The Board considers
that all three sectors have an important role to play as the energy system
continues its transition to a lower carbon economy; the Mining sector provides
the material supply chain for low carbon technologies from steel for wind
turbines to lithium for electric cars; traditional energy is needed to support
base load energy to continue to power economies during the transition; and the
path to a lower carbon economy is expected to disrupt many industries and
business models with scope for the Company to invest directly in opportunities
in the Energy Transition space. In April 2025, Spain and Portugal experienced
a prolonged electricity blackout, as large parts of the power grid went
offline, whilst in the UK, a fire at one of the sub-stations serving London
Heathrow Airport led to a power outage. California has experienced rolling
power blackouts in the past, most notably during a heatwave in August 2020,
due to a combination of high demand and insufficient power supply. These
events are underpinning a need for substantial investment in aged European
(and US) power and grid infrastructure, providing exciting growth
opportunities to investors.
As the global economy navigates a complex landscape of geopolitical
uncertainty, the focus of the portfolio is on the long-term demand drivers,
such as green infrastructure, AI-driven data centres, and demographic shifts
in emerging markets, alongside constrained supply. Mining and traditional
energy equities are currently trading at attractive valuations relative to
other sectors and to their own history, while Energy transition offers growth
possibilities and more now more reasonable valuations. The Board is confident
that the Company remains well-placed to benefit from these key investment
trends over the long term.
ADRIAN BROWN
Chairman
1 August 2025
Investment Managers’ Report
Market overview
The first six months of 2025 saw global stock markets experience notable
volatility and the Company’s net asset value per share (NAV) delivering a
negative return, where the Traditional Energy and Mining sectors of the
Company lagged the modest fall in broader markets. This experience was in
contrast to the US mega cap-led rising market trend during the prior
twelve-month period.
Trade policy and geopolitical factors were key drivers of market volatility
and of investor sentiment throughout the period. The new US administration
imposed higher tariffs on imports from China and implemented a series of trade
tariffs on Canada and Mexico, before a widespread announcement of tariffs on
imports from European and Asian countries on 2 April 2025. However, initial
market falls were quickly reversed following a 90-day tariff implementation
delay announced on 9 April 2025.
The US House of Representatives and the Senate passed the ‘One Big Beautiful
Bill Act’ which would potentially increase the size of primary fiscal
deficit, adding to the US debt and interest obligations. Longer-dated US
Treasury yields rose immediately following the development, whilst the US
Dollar index moved substantially lower. The draft bill contained a number of
changes and reductions to the clean energy related incentives within the
Inflation Reduction Act, but importantly, continued to support utility-scale
solar build out in the US. This was in line with our view that the US will
pursue an “all of the above” approach to building energy supply, given the
expected increase in electricity demand over the coming years.
Increased geopolitical tensions between the US and Iran continued as well as
frictions emerging between the US and Russia, with a lack of apparent progress
towards a ceasefire in Ukraine. Germany’s government passed a €500 billion
package boosting defence and infrastructure spending, €100 billion of which
will be guaranteed for green projects. This follows a similar announcement in
February of the EU’s Clean Industrial Deal, which mobilised €100 billion
to support EU-made clean manufacturing and a focus on the decarbonisation of
industrial sectors.
Technology related uncertainty was also evident. Chinese artificial
intelligence (AI) group DeepSeek’s latest AI model, which aimed to rival
technology developed by OpenAI, Meta and Google, claimed to have trained and
developed the model at a fraction of the cost and computing power. Broadly
supportive quarterly earnings results from the US mega technology companies
together with confirmation of continued large-scale AI investment provided
reassurance in the AI theme. A number of the hyperscalers (large cloud service
providers with the IT architecture to scale up to meet significant increases
in demand) are halting data centre plans and there are mounting environmental
issues globally (Ireland, Chile, Uruguay, etc.). A rotation in stock market
performance favouring European equities was also evident, in contrast to the
strong outperformance of the US stock market, relative to European indices in
2024.
Commodity 31 May 30 November % change H1 2025 on
2025 2024 H1 2024
Average Price %
Change 1
Base Metals (US$/tonne)
Aluminium 2,438 2,577 -5.4% 9.7%
Copper 9,548 8,892 7.4% 4.2%
Lead 1,934 2,048 -5.6% -6.7%
Nickel 15,041 15,671 -4.0% -10.9%
Tin 30,328 28,695 5.7% 12.3%
Zinc 2,597 3,109 -16.5% 8.1%
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Precious Metals (US$/ounce)
Gold 3,285.3 2,659.5 23.5% 44.2%
Silver 33.1 30.1 10.0% 31.2%
Platinum 1,071.0 940.0 13.9% 3.9%
Palladium 964.0 983.0 -1.9% -13.5%
--------------- --------------- --------------- ---------------
Energy
Oil (West Texas Intermediate) (US$/barrel) 61.5 68.3 -10.0% -13.4%
Oil (Brent) (US$/barrel) 64.3 74.2 -13.3% -14.3%
Natural Gas (US$/Metric Million British Thermal Unit) 2.9 3.4 -15.6% 53.8%
--------------- --------------- --------------- ---------------
Bulk Commodities (US$/tonne)
Iron ore 97.5 106.0 -8.0% -16.3%
Coking coal 145.5 205.0 -29.0% -37.7%
Thermal coal 100.8 141.5 -28.8% -18.3%
--------------- --------------- --------------- ---------------
Reference Equity Indices
MSCI ACWI 2 Select Metals & Mining Producers Ex Gold and Silver IMI Net Index (£) 1,474.4 1,666.1 -11.5% -11.6%
MSCI 3 World Energy Index (£) 580.3 669.3 -13.3% -0.2%
S&P Clean Energy Index (£) 669.6 686.5 -2.5% -17.4%
MSCI ACWI Select Metals & Mining Producers Ex Gold and Silver IMI Net Index (US$) 1,221.1 1,300.6 -6.1% -10.4%
MSCI World Energy Index (US$) 470.4 511.3 -8.0% 1.1%
S&P Clean Energy Index (US$) 1,174.4 1,132.2 3.7% -16.3%
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Source: LSEG Datastream, June 2025.
1 Average of 1/12/2023-31/05/2024 to 1/12/2024-31/05/2025.
2 Morgan Stanley Capital International All Country Weighted Index.
3 Morgan Stanley Capital International.
Investment performance & portfolio activity
The Company’s portfolio delivered an NAV return of -10.0% (in Sterling terms
net of withholding taxes and with dividends reinvested) for the period, which
was a slight underperformance of the -9.2% return for the reference index.
In all of the three major sectors, the portfolio investments saw negative
absolute returns, although the energy transition sector saw the least negative
performance. Our slight underweight to the energy transition sector on average
for the first half was therefore a modest detractor from performance. The
underperformance was also driven by negative stock selection in the
conventional energy sector where a couple of our natural gas services
companies, Kodiak Gas Services and Archrock, both saw their share prices pull
back sharply as net margins came in lower than expected on cost inflation.
Partially offsetting these detractors was some positive stock selection in
mining. This was driven by a modest allocation to some gold companies during
the first half (with the rapidly rising gold price driving earnings and free
cashflow expectations higher through the period) and also a holding in a
European cement company that performed well on the back of the infrastructure
stimulus plans announced by the German government.
It was a tough period overall for commodities both on the energy and mining
side with prices for most commodities (precious metals aside) falling during
the half year. This was despite meaningful weakness in the US dollar, which is
more typically associated with a more positive environment for commodities –
this reflects just how weak the macro demand environment was with the
uncertainties caused by the ongoing tariff uncertainties, although these
uncertainties seem to have eased somewhat, as a number of countries strike
tariff deals ahead of the August deadline.
Market volatility, in addition to fundamental stock decisions, contributed to
allocation moves throughout the period. From a top-down perspective, during
the first six months we reduced overall exposure to Traditional Energy, given
expectations of a well-supplied market through 2025 and in the absence of
supply disruption, an expectation that oil prices may trade in the
US$50-70/barrel range. Within our Energy Transition holdings, exposure was
reduced through January and February across electrification, energy efficiency
and renewables, before leaning back into these areas on emerging clarity of US
energy policy (see Figure 2 within the Half Yearly Financial Report).
Within the three sectors we made notable changes to the high-level fund
allocation split, to the sub-sectors and to the bottom-up stock specific
exposures.
In the Energy Transition sector, we increased exposure to beneficiaries of
investment in electrification and in selected renewables. We reduced exposure
to industrial energy efficiency companies perceived to be at risk from
decisions to delay investment though a period of tariff uncertainty.
In the Traditional Energy sector, we added exposure to integrated oil
companies, which included several new purchases. These purchases were funded
by exiting a number of exploration & production companies and US focused
oilfield services companies.
Within Mining, we added to iron ore exposure given the relative valuations and
initiated exposure to European cement production companies.
Income
The Company paid a total of 2.250p in dividends for the first six months of
the year, split between the two quarterly payments. From a dividend
perspective, the additions to Vale within Mining, to power utilities SSE and
Centrica within Energy Transition and to the large integrated oil companies
within Traditional Energy were supportive for income generation. Commodity
price movements and therefore implications for earnings of the commodity
producers were mixed during the period, with strength in the copper price and
weakness in iron ore and oil prices.
We have previously noted that Sterling has strengthened versus the US Dollar
and this trend has continued throughout the first six months of 2025. This
will act as a headwind for the Company’s income generation in Sterling terms
as most of the dividends from the underlying portfolio companies are paid in
US Dollars.
Gearing was reduced through the middle of the reporting period due to trade
tensions giving rise to an uncertain outlook for economic growth.
Traditional Energy
Market expectations for oil prices over the coming quarters have moved lower
following the fall in the oil price towards US$60/barrel and the imposition of
import tariffs by the US. In the absence of disruption to supply, oil prices
moved lower through the reporting period, with Brent and WTI Crude ending at
US$64/barrel and US$61/barrel, respectively.
The fall in the oil price led Traditional Energy stocks lower and the
Company’s holdings in Exxon Mobil, Archrock, Kodiak Gas Services and the
pipeline group Targa Resources were among the largest detractors from returns.
On the other hand, services company Gaztransport & Technigaz rose strongly
following full-year results that reported a jump in revenues and earnings. The
company supplies the essential liners for liquefied natural gas (LNG) tankers
and reported a strong order book.
We made a number of changes in our Traditional Energy holdings during the
period. We increased exposure to the larger integrated oil companies via
additions to Exxon Mobil, Shell and a new purchase in TotalEnergies. Exposure
to exploration & production (E&P) companies was significantly reduced as these
companies typically display a higher volatility to the moves in the oil price.
We exited E&P companies where revenues may be more vulnerable to lower oil
prices and US onshore oilfield services companies, where drilling activity may
slow, impacting on revenues. We exited E&P companies Arc Resources,
ConocoPhillips, Kosmos Energy and Diamondback Energy and oil services
companies Archrock and Kodiak Gas Services.
Oil and Petroleum Exporting Countries (OPEC) have exercised supply discipline
in recent years in an effort to manage and support the oil price. However,
there has been a change in their behaviour with OPEC announcements of
intention to add back production to the market – to no longer cede market
share to US shale producers. In a market that is already well-supplied with
oil, this action has contributed to the downward move in oil prices. Whilst
geopolitical risk appears elevated, particularly in the Middle East, the
reduced reliance on imported oil by the US, coupled with increased reliance by
China on oil imports, suggests a changed dynamic when compared with past
events and that any spike in the oil price may be expected to fade, given the
current well-supplied oil market. Movements in the oil price following
Israel’s targeted attacks on Iran’s nuclear facilities in early June, have
followed a similar path to the oil price reaction to the drone attacks on
Saudi Arabian oil processing facilities in September 2019. There was no
notable impact on oil supply following the 2019 attacks and the market quickly
faded the initial spike in the oil price.
The Company is positioned for an energy market that appears well-supplied with
oil through 2025, with new oil production growth expected to match or exceed
oil demand growth. We therefore see oil prices trending lower through 2025.
This view underpins a preference for defensive exposure within integrated oil
companies and to E&P companies. We have exposure to the integrated oil
companies as we view them having stronger balance sheets, cost structures and
are able to generate sufficient cash flows at lower oil prices to continue to
pay dividends and share buybacks and invest in production. Within the E&P
sub-sector we have lower exposure, focused on international oil and gas
producers as we view them having lower production costs, which we expect to
prove more resilient through a lower oil price environment.
The Company has exposure to US pipeline energy distribution companies that we
expect will benefit from strong natural gas volumes and to internationally
focused oilfield services companies, typically involved in longer-life
projects, where we expect capital expenditure budgets are likely to be
maintained.
We believe electricity demand in the US and Europe will increase and drive
investment into power and energy related infrastructure, including natural
gas. We expect Europe’s demand for natural gas imports in the form of LNG to
increase, as it replaces Russian sourced natural gas. These views underpin
exposure to US pipeline distribution companies that we see as beneficiaries of
higher natural gas and LNG volumes and related energy infrastructure
investment.
Energy Transition
Since the US presidential election, Energy Transition companies have seen
considerable dispersion and volatility in returns. The sector continued to see
a de-rating in valuations throughout December and January before an initial
recovery in returns, led by select US renewables companies following expected
changes to US energy policy that were less bad than many feared.
Suppliers of power grid equipment performed strongly during the period and the
Company’s holdings in GE Vernova and Siemens Energy rose 40% and 70%,
respectively. Both companies reported results that showed an increase in order
backlog and profit margin expansion. Power utilities were also beneficiaries
of this market trend with National Grid delivering a positive return. The
Company benefited from participation in a private placing in Belgian-listed
utility company, Elia Group, as part of its €2.2bn funding package to
support grid investment plans. The placing strengthened the company balance
sheet, removing a key risk for the shares, which subsequently rose strongly.
Exposure to industrial energy efficiency companies detracted from returns as
companies perceived to have greater economic sensitivity fell on the tariff
related uncertainty. Specialist air compression equipment supplier
Ingersoll-Rand and electric motors manufacturer Regal Rexnord were among the
key detractors during the period.
We made a number of changes in positioning within the Energy Transition sector
throughout the period, partly due to dispersion in returns from the companies
and partly due to greater conviction in the outlook with greater clarity
around US energy policy. Exposure to industrial companies Trane Technologies
and Ingersoll-Rand was reduced and we exited utilities Nextera Energy and
Constellation Energy, following a positive re-rating of the shares. These
sales funded new positions in UK utility SSE, US utility groups CenterPoint
Energy and NiSource and an increase in exposure to US solar panel
manufacturer, First Solar. Towards the end of the period, we initiated a
position in UK based Centrica, where we see potential for a medium term
re-rating as the company repositions its business towards more stable cash
flow generating businesses.
The US has a fundamental and pressing need for electricity, which we expect to
be fulfilled from an “all of the above” approach to power generation. The
changes to US energy policy contained within the “One Big Beautiful Bill
Act” continued to support domestic supply chains and utility-scale solar.
Whilst US and European energy policies are especially supportive for the
build-out of fast-deployable solar and onshore wind power, we see investment
opportunities longer-term from increased investment across natural gas and
nuclear, but primarily around power grid investment, with the amount of
expected growth showing in Figure 5 within the Half Yearly Financial Report.
There is increased talk of a nuclear renaissance, it should be noted that
there is a considerable time-to-build any form of new nuclear facilities and
very limited number of facilities that may be restarted such as with the US
Three Mile Island power station, expected to return on line in 2028. For the
coming decade, we therefore expect a continuation of the increased build out
of utility scale solar in the US and Europe, supported by wind power and
natural gas.
In April, Spain and Portugal experienced a prolonged electricity blackout, as
large parts of the power grid went offline, whilst in the UK, a fire in one of
the sub-stations serving London Heathrow Airport led to a power outage.
California has experienced rolling power blackouts in the past, most notably
during a heatwave in August 2020, due to a combination of high demand and
insufficient power supply. These events are underpinning a need for investment
in aging European (and US) electricity and grid infrastructure, where analysis
has shown that around half of the infrastructure may be over 20 years old (see
Figure 6 within the Half Yearly Financial Report). In the UK, the average age
of electricity transformers may be over 60 years old1. These events suggest
added importance to increased investments in UK, European and US power grid
infrastructure.
The valuation of a number of energy transition companies remains attractive,
in our view, with negative market sentiment over the past 18 months towards
such companies, having led to valuation multiples moving lower. It is
noteworthy that private equity, which typically have longer investment time
horizons, has been taking advantage by buying publicly listed renewables
assets.
Mining
Mining companies came under pressure in the first six months of the year with
US tariff uncertainty, which impacted investor expectations around potential
for retaliation, increased domestic commodity prices and near-term commodity
demand.
A fall in the iron ore price impacted the Company’s holdings in Vale and
Anglo American, which detracted from returns during the period. Battery metals
were weak impacting on Company’s positions in Albemarle and Lifezone Metals.
The 23% rise in the gold price was positive for gold and silver royalty
company Wheaton Precious Metals and gold producer Kinross Gold.
As the outlook for bulk commodities has become more benign, we have broadened
investment beyond those areas, such as with the purchase of cement group
Heidelberg Materials which rose strongly. The outlook for European cement
production is supported by the coming implementation of the Carbon Border
Adjustment Mechanism (CBAM), but the recent catalyst to performance has come
from Germany’s €500billion commitment on infrastructure investment over
the next ten years. Infrastructure investment required for the build-out of AI
data centres and grid infrastructure may also be underestimated by the market.
During the period, relative valuation led us to increase exposure to Vale and
Freeport-McMoRan and initiate a position in platinum group metals producer
Valterra Platinum, a spin-off from Anglo American.
Historically, mined commodities were linked to the pace of property
development in China, given the need for steel and copper in their
construction. This historic relationship no longer appears to hold true, with
the rapid increase in production of clean technologies that are materials
intensive. This can be seen in Figure 7 within the Half Yearly Financial
Report with China’s floor space under construction remaining weak, yet steel
demand remaining robust. The charts within the Half Yearly Financial Report
depicting the extraordinary growth in China’s monthly renewable energy
capacity and in electric vehicle (EV) sales helps to explain how China’s
relationship with raw materials is evolving.
Mined raw materials are necessary to produce many of the new technologies and
to enable the energy transition — these materials include lithium, cobalt,
nickel, rare earth elements, copper, and graphite. They enable the production
of batteries for EVs, magnets for wind turbines, silicon for solar panels, and
wiring for grid infrastructure. Demand is rising as electrification expands,
with energy technologies driving the majority of growth across many of these
materials.
The supply of critical materials faces a number of potential risks, which are
important considerations for companies and countries. Mining and refining are
highly concentrated, mostly in China, which refines 70–95% of many
energy-related critical raw materials1. Any disruption to supply may have
significant implications for the cost and production of new technologies that
rely on these materials. Companies producing these materials may be well
placed to benefit from efforts to build supply chain resiliency.
Data centres, required to train large AI models and for inferencing the
rapidly increasing use of these models, consume large amounts of power to run
and cool. The hyperscalers are committing to significant expansion of these
data centres, as shown in Figure 8 within the Half Yearly Financial Report.
This investment is materials intensive, something that is often overlooked,
with metals such as copper being critical in the data centres themselves as
well as for the grid connections and extra power generation that will be
required.
The shift towards electrification, now additionally boosted by AI investment,
coupled with a relatively constrained supply backdrop underpins our
medium-term positive view on copper. In order to form an investment opinion,
we seek to understand the strategy of the companies in which we invest and
their operations. For a mining company, there is no substitute for going to
their site to gain a clearer understanding of the potential from the asset.
Earlier this year, our team member visited BHP’s Escondida copper mine in
Chile to better understand how BHP’s investment plans translate on the
ground and to form a view on how effective they may be.
The Company maintains modest exposure to gold producers. Gold and silver have
important industrial uses but are viewed as safe-haven assets during times of
uncertainty and for this reason they are not core to the Company’s mining
exposure, but we retain investment flexibility. Non-Western central banks,
particularly China, have been increasing their gold purchases in this period
of elevated geopolitical risk, which has supported the gold price and earnings
for gold producers and royalty companies, which can be seen in Figure 9 within
the Half Yearly Financial Report.
As the global economy navigates a complex landscape of geopolitical
uncertainty, within our mining exposure, we focus on the long-term demand
drivers – such as green infrastructure, AI-driven data centres, and
demographic shifts in emerging markets, alongside constrained supply. We view
mining equities as trading at attractive valuations relative to other sectors
and historical values, in current markets.
Market outlook and portfolio positioning
What sets AI apart from past technological shifts is its potential to mimic,
or even enhance, human intelligence. BlackRock’s Investment Institute
(“BII”) noted that AI could reshape the economy, accelerating scientific
breakthroughs and creating entirely new industries. A transition to an
AI-driven cloud and accelerated computing, will require significant build out
of physical supporting infrastructure, including data centres, all of which
require critical raw materials and electricity to power.
We expect power demand to accelerate, driven by AI, heating/ventilation/air
conditioning, electric vehicles and reshoring production. This demand is
colliding with a grid infrastructure that may be ill-equipped to scale
quickly. Energy policy has also shifted post the Ukraine conflict, to energy
security, emphasizing domestic supply and reliability. We see recent
clarification of US energy policy as a catalyst to unlocking value across
parts of the energy sector. We see a resultant ramp up in power demand being
met by a prolonged level of electricity and grid investment not seen for
decades, to be met by renewables and battery storage build out and also from
natural gas and nuclear over the longer term.
Looking forward we see confirmation of US energy policy as an important
catalyst for the renewable energy industry in the US. Whilst not our base
case, the risk of an escalation in events in the Middle East remains a
consideration for energy markets in particular, with about 20% of the global
oil supply sailing from the region. Market expectations appear for trade
related uncertainty to subside as we move through the year, but with a number
of key trade deals still to be finalised, the risk of further volatility
certainly remains.
1 Source: Harper Macleod, June 2024.
Tom Holl and Mark Hume
BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED
1 August 2025
Distribution of investments as at 31 May 2025
Asset allocation – Geography
Global¹ 50.7%
United States 19.7%
United Kingdom 6.3%
Canada 6.2%
Brazil 6.0%
Germany 3.1%
Italy 2.5%
Australia 2.4%
South Africa 1.2%
Africa 1.0%
Ireland 0.6%
Latin America² 0.3%
1 Global relates to companies having businesses and operations in multiple
countries and territories.
2 Latin America represents Argentina.
Source: BlackRock.
Asset allocation – Commodity/sub-sectors
Mining 41.0%
Traditional Energy 29.5%
Energy Transition 29.5%
Energy Transition (29.5%)
Electrification 9.6%
Energy Efficiency 7.2%
Renewables 7.1%
Storage 5.1%
Transport 0.5%
Traditional Energy (29.5%)
Integrated 11.9%
Exploration & Production 7.8%
Oil Services 6.3%
Distribution 3.5%
Mining (41.0%)
Diversified 21.4%
Copper 6.1%
Gold 3.3%
Industrial Minerals 2.7%
Aluminium 2.6%
Steel 1.6%
Platinum Group Metals 1.2%
Uranium 1.2%
Nickel 0.9%
Source: BlackRock.
Ten largest investments
Together, the Company’s ten largest investments represent 39.2% of the
Company’s portfolio as at 31 May 2025 (30 November 2024: 32.5%).
1 ▲ Vale (2024: 8th)
Diversified mining group
Market value: £9,142,000
Share of investments: 6.0%1 (2024: 2.8%)
One of the largest mining groups in the world, with operations in 30
countries. Vale is the world’s largest producer of iron ore and iron ore
pellets, and the world’s largest producer of nickel. The group also produces
manganese ore, ferroalloys, metallurgical and thermal coal, copper, platinum
group metals, gold, silver, cobalt, potash, phosphates and other fertiliser
nutrients.
2 ▼ Anglo American (2024: 1st)
Diversified mining group
Market value: £8,305,000
Share of investments: 5.4% (2024: 4.6%)
A global mining group. The group’s mining portfolio includes bulk
commodities including iron ore, manganese, metallurgical coal, base metals
including copper and nickel and precious metals and minerals such as platinum
and diamonds. Anglo American has mining operations globally, with significant
assets in Africa and South America.
3 ▲ Exxon Mobil (2024: 12th)
Integrated oil group
Market value: £7,633,000
Share of investments: 5.0% (2024: 2.5%)
An American multinational oil and gas corporation. They continue to evolve to
meet growing global demand for oil, natural gas and refined products and plan
to play a role in the energy transition.
4 ▼ Rio Tinto (2024: 2nd)
Diversified mining group
Market value: £7,299,000
Share of investments: 4.8% (2024: 4.5%)
One of the world’s leading mining companies. The group’s primary product
is iron ore, but it also produces aluminium, copper, diamonds, gold,
industrial minerals and energy products.
5 ▼ Shell (2024: 4th)
Integrated oil group
Market value: £6,091,000
Share of investments: 4.0% (2024: 2.9%)
One of the largest integrated energy companies globally with five main
operating segments: Integrated Gas, Upstream, Marketing, Chemicals and
Products, and Renewables and Energy Solutions. The company has a high quality,
gas/liquified natural gas (LNG) weighted portfolio.
6 ▲ NiSource (2024: n/a)
Oil services
Market value: £5,065,000
Share of investments: 3.3% (2024: n/a)
One of the largest fully regulated utility companies in the United States,
serving approximately 3.3 million natural gas customers and 500,000 electric
customers across six states.
7 ▲ Abaxx Technologies (2024: 30th)
Diversified mining group
Market value: £4,492,000
Share of investments: 2.9%2 (2024: 1.3%)
A financial software and market infrastructure company focused on developing
technology for global commodity exchanges and digital marketplaces, which owns
and operates Abaxx Exchange and Abaxx Clearing.
8 ▲ Elia Group (2024: n/a)
Storage
Market value: £4,064,000
Share of investments: 2.6% (2024: n/a)
A transmission system operator, primarily active in Belgium and Germany,
responsible for transmitting electricity from producers to consumers. They own
and operate high-voltage electricity grids and facilitate the import and
export of electricity between countries.
9 ▼ Hydro (2024: 6th)
Aluminium mining
Market value: £4,024,000
Share of investments: 2.6% (2024: 2.9%)
A Norwegian aluminium and renewable energy company that has 33,000 employees
in more than 140 locations and 40 countries.
10 ▲ SSE (2024: 46th)
Renewables
Market value: £3,931,000
Share of investments: 2.6% (2024: 0.9%)
A leading energy company in the UK and Ireland, focused on electricity
networks and renewable energy generation and is a major player in onshore and
offshore wind, hydro power, and electricity transmission and distribution
networks.
1 1.2% relates to interest in Vale shareholder debentures.
2 1.5% relates to interest in fixed income investments which is unlisted and
held at fair value.
All percentages reflect the value of the holding as a percentage of total
investments.
Arrows indicate the change in relative ranking of the position in the
portfolio compared to its ranking as at 30 November 2024.
Percentages in brackets represent the value of the holding as at 30 November
2024.
Investments as at 31 May 2025
Main Market % of
geographic value investments
exposure £’000
Mining
Diversified
Vale Brazil 7,312 } 6.0
Vale Debentures 1 Brazil 1,830
Anglo American Global 8,305 5.4
Rio Tinto Global 7,299 4.8
Abaxx Technologies 7.0% 21/03/2028 – convertible debentures 2 Global 2,335 } 2.9
Abaxx Technologies Global 2,157
Teck Resources Global 2,345 1.5
BHP Global 1,291 0.8
--------------- ---------------
32,874 21.4
========= =========
Copper
First Quantum Minerals Global 2,325 } 2.0
First Quantum Minerals 6.875% 15/10/2027 4 Global 726
Freeport-McMoRan United States 2,054 1.3
Metals Acquisition Australia 1,312 0.9
Foran Mining Canada 1,096 0.7
Ivanhoe Electric United States 744 0.5
Develop Global Australia 661 0.4
Ngex Minerals Latin America 496 0.3
--------------- ---------------
9,414 6.1
========= =========
Gold
Wheaton Precious Metals Global 2,077 1.4
Allied Gold Corporation 8.75% 07/09/2028 – bonds 4 Africa 1,569 1.0
Kinross Gold Global 1,312 0.9
--------------- ---------------
4,958 3.3
========= =========
Industrial Minerals
Heidelberg Materials Global 1,448 0.9
Lynas Corporation Australia 995 0.6
Nutrien United States 940 0.6
Albemarle Global 918 0.6
--------------- ---------------
4,301 2.7
========= =========
Aluminium
Hydro Global 4,024 2.6
--------------- ---------------
4,024 2.6
========= =========
Steel
ArcelorMittal Global 2,507 1.6
--------------- ---------------
2,507 1.6
========= =========
Platinum Group Metals
Anglo American Platinum South Africa 1,830 1.2
--------------- ---------------
1,830 1.2
========= =========
Uranium
Cameco Canada 1,740 1.2
--------------- ---------------
1,740 1.2
========= =========
Nickel
Nickel Mines Australia 749 0.5
Lifezone Metals Global 666 0.4
--------------- ---------------
1,415 0.9
========= =========
Total Mining 63,063 41.0
========= =========
Traditional Energy
Integrated
Exxon Mobil Global 7,633 5.0
Shell Global 6,091 4.0
TotalEnergies Global 3,083 2.0
Suncor Energy Canada 1,372 0.9
Gazprom 3 Russian Federation – –
--------------- ---------------
18,179 11.9
========= =========
Exploration & Production
Hess Global 2,959 1.9
Canadian Natural Resources Canada 2,360 1.5
Permian Resources United States 2,080 1.4
EQT Corporation United States 1,614 1.0
EOG Resources United States 1,575 1.0
Tourmaline Oil Canada 1,492 1.0
--------------- ---------------
12,080 7.8
========= =========
Oil Services
NiSource United States 5,065 3.3
TechnipFMC Global 2,965 1.9
Gaztransport & Technigaz Global 1,685 1.1
--------------- ---------------
9,715 6.3
========= =========
Distribution
Cheniere Energy United States 2,380 1.5
Targa Resources United States 1,697 1.1
TC Energy Canada 1,389 0.9
--------------- ---------------
5,466 3.5
========= =========
Total Traditional Energy 45,440 29.5
========= =========
Energy Transition
Electrification
Centrica United Kingdom 3,694 2.4
Centerpoint Energy United States 3,654 2.4
EDP Renováveis Global 2,826 1.8
National Grid United Kingdom 2,041 1.3
Vistra United States 953 0.6
Talen Energy United States 891 0.6
Howmet Aerospace United States 718 0.5
--------------- ---------------
14,777 9.6
========= =========
Energy Efficiency
Schneider Electric Global 3,075 2.0
Trane Technologies United States 2,850 1.9
Ingersoll-Rand United States 2,134 1.4
Analog Devices Global 1,423 0.9
Kingspan Group Ireland 917 0.6
Vertiv Holdings Global 724 0.5
Owens Corning Put Option 18/07/2025 United States (202) (0.1)
--------------- ---------------
10,921 7.2
========= =========
Renewables
SSE United Kingdom 3,931 2.6
First Solar Global 3,773 2.4
Siemens Energy Global 2,143 1.4
GE Vernova United States 1,064 0.7
--------------- ---------------
10,911 7.1
========= =========
Storage
Elia Group Germany 4,064 2.6
Prysmian Spa Italy 3,788 2.5
--------------- ---------------
7,852 5.1
========= =========
Transport
Infineon Technologies Germany 706 0.5
--------------- ---------------
706 0.5
========= =========
Total Energy Transition 45,167 29.5
--------------- ---------------
Total Portfolio 153,670 100.0
========= =========
Comprising:
Equity and debt investments 153,872 100.1
Derivative financial instruments – written options (202) (0.1)
--------------- ---------------
153,670 100.0
========= =========
1 The investment in the Vale debentures is illiquid and has been valued using
secondary market pricing information provided by the Brazilian Financial and
Capital Markets Association (ANBIMA).
2 Investment is unlisted and is held at fair value.
3 The investment in Gazprom has been valued at a nominal value of RUB0.01 as
secondary listings of the depositary receipts on Russian companies have been
suspended from trading.
4 Bonds are illiquid and held at broker prices
All investments are ordinary shares unless otherwise stated. The total number
of holdings (including options) at 31 May 2025 was 67 (30 November 2024: 74).
There was one open option as at 31 May 2025 (30 November 2024: one).
The equity and fixed income investment total of £153,872,000 (30 November
2024: £189,752,000) above before the deduction of the negative option
valuation of £202,000 (30 November 2024: £51,000) represents the Group’s
total investments held at fair value as reflected in the Consolidated
Statement of Financial Position. The table above excludes cash and gearing;
the level of the Group’s gearing may be determined with reference to the
bank overdraft of £13,181,000 (30 November 2024: £25,944,000) and cash and
cash equivalents of £nil (30 November 2024: £3,714,000) that are also
disclosed in the Consolidated Statement of Financial Position. Details of the
AIC methodology for calculating gearing are given in the Glossary within the
Half Yearly Financial Report.
As at 31 May 2025, the Company did not hold any equity interests comprising
more than 3% of any company’s share capital.
Interim Management Report and Responsibility Statement
The Chairman’s Statement and the Investment Managers’ Report within the
Half Yearly Financial Report give details of the important events which have
occurred during the period and their impact on the financial statements.
Principal risks and uncertainties
The principal risks faced by the Company can be divided into various areas as
follows:
- Investment performance;
- Income/dividend;
- Gearing;
- Legal and regulatory compliance;
- Operational;
- Market; and
- Financial.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 30
November 2024. A detailed explanation can be found in the Strategic Report on
pages 40 to 44 and in note 17 on pages 111 to 123 of the Annual Report and
Financial Statements which are available on the Company’s website at
http://www.blackrock.com/uk/beri.
The Board and the Investment Manager continue to monitor investment
performance in line with the Company’s investment objectives, and the
operations of the Company and the publication of net asset values are
continuing.
In the view of the Board, there have not been any changes to the fundamental
nature of the principal risks and uncertainties since the previous report and
these are equally applicable to the remaining six months of the financial year
as they were to the six months under review.
Going concern
The Board is mindful of the risk that unforeseen or unprecedented events
including (but not limited to) heightened geopolitical tensions such as the
wars in Ukraine and Middle East, their longer-term effects on the global
economy, high inflation and the current cost of living crisis could have a
significant impact on global markets.
Notwithstanding this significant degree of uncertainty, the Directors, having
considered the nature and liquidity of the portfolio, the Company’s
investment objective, the Company’s projected income and expenditure, the
continuation vote proposals coming up at the forthcoming Annual General
Meeting in March 2026 and the Company’s substantial distributable reserves,
are satisfied that the Company has adequate resources to continue in
operational existence for the foreseeable future and is financially sound.
The Company has a portfolio of investments which are considered to be readily
realisable and is able to meet all of its liabilities from its assets and
income generated from these assets. Borrowings under the overdraft facility
shall be lower of £40.0 million or 20% of the Company’s net assets
(calculated at the time of draw down) and this covenant was complied with
during the period. Up to 30 November 2024, ongoing charges (excluding finance
costs, direct transaction costs, custody transaction charges, VAT recovered,
taxation, prior year expenses written back and certain non recurring charges)
have been capped by the Manager at 1.25% of average daily net assets and were
1.20% of average daily net assets for the year ended 30 November 2024. From 1
December 2024, the cap reduced to 1.15% per annum of average
daily net assets.
The Board has considered the Company’s more recent performance, its
discount, the make up of the share register, and the unique and attractive
nature of its offering. Following due consideration, it has determined, to the
best of its ability given it is a future event, that the forthcoming
continuation vote does not represent a material uncertainty as it pertains to
the going concern assessment.
Based on the above, the Board is satisfied that it is appropriate to continue
to adopt the going concern basis in preparing the financial statements.
Related party disclosure and transactions with the Investment Manager
BlackRock Fund Managers Limited (BFM) is the Company’s Alternative
Investment Fund Manager (AIFM) and has, with the Company’s consent,
delegated certain portfolio and risk management services, and other ancillary
services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Both BFM
and BIM (UK) are regarded as related parties under the Listing Rules. Details
of the management fee payable are set out in note 4 below and note 14 below of
the financial statements. The related party transactions with the Directors
are set out in note 13 below.
Directors’ responsibility statement
The Disclosure Guidance and Transparency Rules (DTR) of the UK Listing
Authority require the Directors to confirm their responsibilities in relation
to the preparation and publication of the Interim Management Report and
Financial Statements.
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within the Half Yearly
Financial Report has been prepared in accordance with International Accounting
Standard 34 Interim Financial Reporting; and
- the Interim Management Report together with the Chairman’s Statement and
Investment Managers’ Report include a fair review of the information
required by 4.2.7R and 4.2.8R of the FCA’s Disclosure Guidance and
Transparency Rules.
This Half Yearly Financial Report has not been audited or reviewed by the
Company’s Auditor.
The Half Yearly Financial Report was approved by the Board on 1 August 2025
and the above responsibility statement was signed on its behalf by the
Chairman.
Adrian Brown
FOR AND ON BEHALF OF THE BOARD
1 August 2025
Consolidated Statement of Comprehensive Income for the six months ended 31 May
2025
Six months ended Six months ended Year ended
31 May 2025 31 May 2024 30 November 2024
(unaudited) (unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Income from investments held at fair value through profit or loss 3 2,626 – 2,626 2,700 – 2,700 4,951 – 4,951
Other income 3 491 – 491 428 – 428 1,200 – 1,200
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total income 3,117 – 3,117 3,128 – 3,128 6,151 – 6,151
========= ========= ========= ========= ========= ========= ========= ========= =========
Net (loss)/profit on investments and derivatives held at fair value through profit or loss – (18,639) (18,639) – 19,011 19,011 – 18,986 18,986
Net profit/(loss) on foreign exchange – 134 134 – (1) (1) – 25 25
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 3,117 (18,505) (15,388) 3,128 19,010 22,138 6,151 19,011 25,162
========= ========= ========= ========= ========= ========= ========= ========= =========
Expenses
Investment management fees 4 (161) (487) (648) (181) (543) (724) (356) (1,069) (1,425)
Other operating expenses 5 (219) (3) (222) (240) (4) (244) (511) (9) (520)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total operating expenses (380) (490) (870) (421) (547) (968) (867) (1,078) (1,945)
========= ========= ========= ========= ========= ========= ========= ========= =========
Net profit/(loss) on ordinary activities before finance costs and taxation 2,737 (18,995) (16,258) 2,707 18,463 21,170 5,284 17,933 23,217
Finance costs (82) (247) (329) (128) (385) (513) (230) (690) (920)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) on ordinary activities before taxation 2,655 (19,242) (16,587) 2,579 18,078 20,657 5,054 17,243 22,297
Taxation (charge)/credit (274) 59 (215) (245) 34 (211) (513) 128 (385)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) on ordinary activities after taxation 2,381 (19,183) (16,802) 2,334 18,112 20,446 4,541 17,371 21,912
========= ========= ========= ========= ========= ========= ========= ========= =========
Earnings/(loss) per ordinary share (pence) 7 2.00 (16.10) (14.10) 1.83 14.17 16.00 3.63 13.87 17.50
========= ========= ========= ========= ========= ========= ========= ========= =========
The total columns of this statement represent the Group’s Statement of
Comprehensive Income, prepared in accordance with UK–adopted International
Accounting Standards (IAS). The supplementary revenue and capital accounts are
both prepared under guidance published by the Association of Investment
Companies (AIC). All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period. All
income is attributable to the equity holders of the Group.
The Group does not have any other comprehensive income/(loss) (31 May 2024:
£nil; 30 November 2024: £nil). The net profit/(loss) for the period
disclosed above represents the Group’s total comprehensive income/(loss).
Consolidated Statement of Changes in Equity for the six months ended 31 May
2025
Notes Called Share Special Capital Revenue Total
up share premium reserve reserves reserve £’000
capital account £’000 £’000 £’000
£’000 £’000
For the six months ended 31 May 2025 (unaudited)
At 30 November 2024 1,356 69,980 54,812 36,031 5,148 167,327
Total comprehensive (loss)/income:
Net (loss)/profit for the period – – – (19,183) 2,381 (16,802)
Transaction with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – (5,460) – – (5,460)
Share repurchase costs – – (37) – – (37)
Dividends paid 1 6 – – – – (2,694) (2,694)
--------------- --------------- --------------- --------------- --------------- ---------------
At 31 May 2025 1,356 69,980 49,315 16,848 4,835 142,334
========= ========= ========= ========= ========= =========
For the six months ended 31 May 2024 (unaudited)
At 30 November 2023 1,356 69,980 66,100 18,660 6,266 162,362
Total comprehensive income
Net profit for the period – – – 18,112 2,334 20,446
Transaction with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – (7,631) – – (7,631)
Share repurchase costs – – (53) – – (53)
Dividends paid 2 6 – – – – (2,891) (2,891)
--------------- --------------- --------------- --------------- --------------- ---------------
At 31 May 2024 1,356 69,980 58,416 36,772 5,709 172,233
========= ========= ========= ========= ========= =========
For the year ended 30 November 2024 (audited)
At 30 November 2023 1,356 69,980 66,100 18,660 6,266 162,362
Total comprehensive income
Net profit for the year – – – 17,371 4,541 21,912
Transaction with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – (11,208) – – (11,208)
Share repurchase costs – – (80) – – (80)
Dividends paid 3 – – – – (5,659) (5,659)
--------------- --------------- --------------- --------------- --------------- ---------------
At 30 November 2024 1,356 69,980 54,812 36,031 5,148 167,327
========= ========= ========= ========= ========= =========
1 4th interim dividend of 1.125p per share for the year ended 30 November
2024, declared on 28 November 2024 and paid on 7 January 2025 and 1st interim
dividend of 1.125p per share for the year ending 30 November 2025, declared on
20 March 2025 and paid on 25 April 2025.
2 4th interim dividend of 1.125p per share for the year ended 30 November
2023, declared on 7 December 2023 and paid on 12 January 2024 and 1st interim
dividend of 1.125p per share for the year ended 30 November 2024, declared on
15 March 2024 and paid on 26 April 2024.
3 4th interim dividend of 1.125p per share for the year ended 30 November
2023, declared on 7 December 2023 and paid on 12 January 2024; 1st interim
dividend of 1.125p per share for the year ended 30 November 2024, declared on
15 March 2024 and paid on 26 April 2024; 2nd interim dividend of 1.125p per
share for the year ended 30 November 2024, declared on 4 June 2024 and paid on
15 July 2024 and 3rd interim dividend of 1.125p per share for the year ended
30 November 2024, declared on 18 September 2024 and paid on 28 October 2024.
For information on the Company’s distributable reserves, please refer to
note 11 below.
Consolidated Statement of Financial Position as at 31 May 2025
Notes 31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Non current assets
Investments held at fair value through profit or loss 12 153,872 188,694 189,752
Current assets
Other receivables 1,444 484 436
Current tax asset 205 195 193
Cash collateral pledged with brokers 801 343 591
Cash and cash equivalents – cash at bank – 73 3,714
--------------- --------------- ---------------
Total current assets 2,450 1,095 4,934
========= ========= =========
Total assets 156,322 189,789 194,686
========= ========= =========
Current liabilities
Other payables (605) (2,338) (1,364)
Derivative financial liabilities held at fair value through profit or loss 12 (202) (5) (51)
Cash and cash equivalents – bank overdraft 9 (13,181) (15,213) (25,944)
--------------- --------------- ---------------
Total current liabilities (13,988) (17,556) (27,359)
========= ========= =========
Net assets 142,334 172,233 167,327
========= ========= =========
Equity attributable to equity holders
Called up share capital 10 1,356 1,356 1,356
Share premium account 11 69,980 69,980 69,980
Special reserve 11 49,315 58,416 54,812
Capital reserves 11 16,848 36,772 36,031
Revenue reserve 11 4,835 5,709 5,148
--------------- --------------- ---------------
Total equity 142,334 172,233 167,327
========= ========= =========
Net asset value per ordinary share (pence) 8 121.81 138.24 137.66
========= ========= =========
Consolidated Cash Flow Statement for the six months ended 31 May 2025
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Operating activities:
Net (loss)/profit on ordinary activities before taxation 1 (16,587) 20,657 22,297
Add back finance costs 329 513 920
Net loss/(profit) on investments and derivatives held at fair value through profit or loss (including transaction costs) 18,639 (19,011) (18,986)
Net (profit)/loss on foreign exchange (134) 1 (25)
Sales of investments held at fair value through profit or loss 108,596 61,484 123,914
Purchases of investments held at fair value through profit or loss (91,204) (56,512) (119,979)
(Increase)/decrease in other receivables (32) 204 182
(Decrease)/increase in other payables (759) 253 (55)
Increase in amounts due from brokers (976) (70) –
Increase/(decrease) in amounts due to brokers – 23 (569)
Net movement in cash collateral held with brokers (210) 1,195 947
--------------- --------------- ---------------
Net cash inflow from operating activities before taxation 17,662 8,737 8,646
========= ========= =========
Taxation on investment income included within gross income (227) (276) (448)
--------------- --------------- ---------------
Net cash inflow from operating activities 17,435 8,461 8,198
========= ========= =========
Financing activities
Interest paid (329) (513) (920)
Shares repurchased into treasury (5,460) (7,557) (11,208)
Share repurchase costs (37) (53) (80)
Dividends paid (2,694) (2,891) (5,659)
--------------- --------------- ---------------
Net cash outflow from financing activities (8,520) (11,014) (17,867)
========= ========= =========
Increase/(decrease) in cash and cash equivalents 8,915 (2,553) (9,669)
Effect of foreign exchange rate changes 134 (1) 25
--------------- --------------- ---------------
Change in cash and cash equivalents 9,049 (2,554) (9,644)
Cash and cash equivalents at start of period/year (22,230) (12,586) (12,586)
--------------- --------------- ---------------
Cash and cash equivalents at end of period/year (13,181) (15,140) (22,230)
========= ========= =========
Comprised of:
Cash at bank – 73 3,714
Bank overdraft (13,181) (15,213) (25,944)
--------------- --------------- ---------------
(13,181) (15,140) (22,230)
========= ========= =========
1 Dividends and interest received in cash during the year amounted to
£2,106,000 and £230,000 (six months ended 31 May 2024: £2,374,000 and
£287,000; year ended 30 November 2024: £4,080,000 and £436,000).
Notes to the financial statements for the six months ended 31 May 2025
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of Section 1158 of the Corporation Tax Act 2010.
The principal activity of the subsidiary, BlackRock Energy and Resources
Securities Income Company Limited, is investment dealing and options writing.
2. Basis of preparation
The half yearly financial statements for the period ended 31 May 2025 have
been prepared in accordance with the Disclosure Guidance and Transparency
Rules sourcebook of the Financial Conduct Authority and with the UK-adopted
International Accounting Standard 34 (IAS 34), Interim Financial Reporting.
The half yearly financial statements should be read in conjunction with the
Group’s Annual Report and Financial Statements for the year ended 30
November 2024, which have been prepared in accordance with UK-adopted
International Accounting Standards (IAS).
Insofar as the Statement of Recommended Practice (SORP) for investment trust
companies and venture capital trusts, issued by the Association of Investment
Companies (AIC) in October 2019 and updated in July 2022, is compatible with
UK-adopted IAS, the financial statements have been prepared in accordance with
guidance set out in the SORP.
The Directors, having considered the nature and liquidity of the portfolio,
the Company’s investment objective, the continuation vote proposals coming
up at the forthcoming Annual General Meeting in March 2026 and the Company’s
projected income and expenditure, are satisfied that the Company has adequate
resources to continue in operational existence for the foreseeable future for
the period to 31 May 2026, being a period of at least twelve months from the
date of approval of the financial statements, and therefore consider the going
concern assumption to be appropriate.
Adoption of new and amended International Accounting Standards and
interpretations:
IAS 1 – Classification of liabilities as current or non current (effective 1
January 2024). The IASB has amended IAS 1 Presentation of Financial Statements
to clarify its requirement for the presentation of liabilities depending on
the rights that exist at the end of the reporting period. The amendment
requires liabilities to be classified as non current if the entity has a
substantive right to defer settlement for at least 12 months at the end of the
reporting period. The amendment no longer refers to unconditional rights.
IAS 1 – Non current liabilities with covenants (effective 1 January 2024).
The IASB has amended IAS 1 Presentation of Financial Statements to introduce
additional disclosures for liabilities with covenants within 12 months of the
reporting period. The additional disclosures include the nature of covenants,
when the entity is required to comply with covenants, the carrying amount of
related liabilities and circumstances that may indicate that the entity will
have difficulty complying with the covenants.
The amendment of these standards did not have any significant impact on the
Company.
Relevant International Accounting Standards that have yet to be adopted:
IAS 21 – Lack of exchangeability (effective 1 January 2025). The IASB issued
amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to
specify how an entity should assess whether a currency is exchangeable and how
it should determine a spot exchange rate when exchangeability is lacking. The
amendments also require disclosure of information that enables users of its
financial statements to understand how the currency not being exchangeable
into the other currency affects, or is expected to affect, the entity’s
financial performance, financial position and cash flows.
IFRS 18 – Presentation and disclosure in financial statements (effective 1
January 2027). The IASB issued IFRS 18, which replaces IAS 1 Presentation of
Financial Statements. IFRS 18 introduces new requirements for presentation
within the statement of profit or loss, including specified totals and
subtotals. Furthermore, entities are required to classify all income and
expenses within the statement of profit or loss into one of five categories:
operating, investing, financing, income taxes and discontinued operations,
whereof the first three are new. It also requires disclosure of newly defined
management defined performance measures, subtotals of income and expenses, and
includes new requirements for aggregation and disaggregation of financial
information based on the identified ‘roles’ of the primary financial
statements and the notes.
None of the standards that have been issued, but are not yet effective, are
expected to have a material impact on the Company.
3. Income
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Investment income:
UK dividends 625 654 1,184
UK stock dividends – – 128
Fixed income 295 332 505
Overseas dividends 1,539 1,560 2,835
Overseas special dividends 167 154 299
--------------- --------------- ---------------
Total investment income 2,626 2,700 4,951
========= ========= =========
Other income:
Bank interest 6 2 4
Interest on collateral received 8 8 32
Option premium income 477 418 1,164
--------------- --------------- ---------------
Total other income 491 428 1,200
========= ========= =========
Total 3,117 3,128 6,151
========= ========= =========
During the period, the Group received option premium income in cash totalling
£477,000 (six months ended 31 May 2024: £418,000; year ended 30 November
2024: £1,164,000) for writing covered call and put options for the purposes
of revenue generation.
Option premium income is amortised evenly over the life of the option contract
and accordingly, during the period, option premiums of £477,000 (six months
ended 31 May 2024: £418,000; year ended 30 November 2024: £1,164,000) were
amortised to revenue.
At 31 May 2025, there was one open position (31 May 2024: one; 30 November
2024: one) with an associated liability of £202,000 (31 May 2024: £5,000; 30
November 2024: £51,000).
Dividends and interest received in cash during the period amounted to
£2,106,000 and £230,000 (six months ended 31 May 2024: £2,374,000 and
£287,000; year ended 30 November 2024: £4,080,000 and £436,000).
No special dividends have been recognised in capital during the period (six
months ended 31 May 2024: £nil; year ended 30 November 2024: £nil).
4. Investment management fee
Six months ended Six months ended Year ended
31 May 2025 31 May 2024 30 November 2024
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 163 489 652 181 543 724 356 1,069 1,425
Investment management fee rebate (2) (2) (4) – – – – – –
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 161 487 648 181 543 724 356 1,069 1,425
========= ========= ========= ========= ========= ========= ========= ========= =========
The investment management fee is levied at 0.80% of gross assets per annum.
Gross assets for the purposes of calculating the management fee equate to the
value of the portfolio’s gross assets held on the relevant date as valued on
the basis of applicable accounting policies, less the value of any investments
in in-house funds.
The fee is allocated 25% to the revenue account and 75% to the capital account
of the Consolidated Statement of Comprehensive Income. There is no additional
fee for company secretarial and administration services.
The Company is entitled to a rebate from the investment management fee charged
by the Manager in the event the Company’s ongoing charges exceed the cap. Up
to 30 November 2024, the cap was 1.25% per annum of average daily net assets.
From 1 December 2024, the cap was reduced to 1.15% per annum of average daily
net assets.
The amount of rebate accrued for the six months ended 31 May 2025 amounted to
£4,000 (six months ended 31 May 2024: £nil; year ended 30 November 2024:
£nil). The rebate, if any, is offset against management fees and is allocated
between revenue and capital in the ratio of total ongoing charges (as defined
on page 142 of the Annual Report and Financial Statements for the year ended
30 November 2024) allocated between revenue and capital during the period.
5. Other operating expenses
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Allocated to revenue:
Custody fee 3 4 7
Auditor’s remuneration – audit services 1 26 28 51
Registrars’ fee 19 17 32
Directors’ emoluments 69 75 143
Broker fees 5 13 25
Depositary fees 7 8 16
Marketing fees 15 15 80
Printing and postage fees 20 21 40
Legal and professional fees 12 12 24
Bank charges 10 7 14
Stock exchange listings fees 5 5 11
Other administration costs 28 35 68
--------------- --------------- ---------------
Total revenue expenses 219 240 511
========= ========= =========
Allocated to capital:
Custody transaction charges 2 3 4 9
--------------- --------------- ---------------
Total 222 244 520
========= ========= =========
1 No non-audit services were provided by the Company’s auditors in the six
months ended 31 May 2025 (six months ended 31 May 2024: none; year ended 30
November 2024: none).
2 For the six months ended 31 May 2025, expenses of £3,000 (six months ended
31 May 2024: £4,000; year ended 30 November 2024: £9,000) were charged to
the capital account of the Statement of Comprehensive Income.
The transaction costs incurred on the acquisition of investments amounted to
£113,000 for the six months ended 31 May 2025 (six months ended 31 May 2024:
£99,000; year ended 30 November 2024: £150,000). Costs relating to the
disposal of investments amounted to £26,000 for the six months ended 31 May
2025 (six months ended 31 May 2024: £21,000; year ended 30 November 2024:
£43,000). All transaction costs have been included within Net (losses)/gains
on investments and derivatives held at fair value through profit or loss in
the capital reserves.
6. Finance costs
Six months ended Six months ended Year ended
31 May 2025 31 May 2024 30 November 2024
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Interest payable – bank overdraft 82 247 329 128 385 513 230 690 920
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 82 247 329 128 385 513 230 690 920
========= ========= ========= ========= ========= ========= ========= ========= =========
Finance costs for the Company are charged 25% to the revenue account and 75%
to the capital account of the Consolidated Statement of Comprehensive Income.
Finance costs incurred by the subsidiary company are charged 100% to the
revenue account of the Consolidated Statement of Comprehensive Income.
7. Dividends
The Board’s current dividend target is to declare quarterly dividends of
1.125 pence per share in the year to 30 November 2025, making a total of at
least 4.500 pence per share for the year as a whole.
A first interim dividend for the year ending 30 November 2025 of £1,329,000
(1.125 pence per share) was paid on 25 April 2025 to shareholders on the
register on 27 March 2025.
The Directors have declared a second interim dividend for the year ending 30
November 2025 of 1.125 pence per share. The total cost of the dividend was
£1,308,000 and was paid on 14 July 2025 to shareholders on the Company’s
register on 13 June 2025. This dividend has not been accrued in the financial
statements for the six months ended 31 May 2025, as under IAS, interim
dividends are not recognised until paid. Dividends are debited directly to
reserves.
The third and fourth interim dividends will be declared in September 2025 and
December 2025 respectively.
Dividends on equity shares paid during the period were:
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
2nd interim dividend of 1.125p per share for the year ended 30 November 2024 (2023: 1.100p) – – 1,396
3rd interim dividend of 1.125p per share for the year ended 30 November 2024 (2023: 1.100p) – – 1,373
4th interim dividend of 1.125p per share for the year ended 30 November 2024 (2023: 1.125p) 1,365 1,468 1,468
1st interim dividend of 1.125p per share for the year ending 30 November 2025 (2024: 1.125p) 1,329 1,423 1,422
--------------- --------------- ---------------
Accounted for in the financial statements 2,694 2,891 5,659
========= ========= =========
8. Earnings and net asset value per ordinary share
Revenue, capital (loss)/earnings and net asset value per ordinary share are
shown below and have been calculated using the following:
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
Net revenue profit attributable to ordinary shareholders (£’000) 2,381 2,334 4,541
Net capital (loss)/profit attributable to ordinary shareholders (£’000) (19,183) 18,112 17,371
--------------- --------------- ---------------
Total (loss)/profit attributable to ordinary shareholders (£’000) (16,802) 20,446 21,912
========= ========= =========
Total shareholders’ funds (£'000) 142,334 172,233 167,327
========= ========= =========
The weighted average number of ordinary shares in issue during the period on which the earnings per ordinary share was calculated was: 119,126,516 127,790,523 125,204,148
The actual number of ordinary shares in issue at the end of the period on which the net asset value per ordinary share was calculated was: 116,844,497 124,586,194 121,552,497
Calculated on weighted average number of ordinary shares
Revenue earnings per share (pence) – basic and diluted 2.00 1.83 3.63
Capital (loss)/earnings per share (pence) – basic and diluted (16.10) 14.17 13.87
--------------- --------------- ---------------
Total (loss)/earnings per share (pence) – basic and diluted (14.10) 16.00 17.50
========= ========= =========
As at As at As at
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
Net asset value per share (pence) 121.81 138.24 137.66
Ordinary share price (pence) 111.00 121.50 121.00
========= ========= =========
There were no dilutive securities at the period end (31 May 2024: nil; 30
November 2024: nil).
9. Reconciliation of liabilities arising from financing activities
Six months Six months Year ended
ended 31 May ended 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Debt arising from financing activities at beginning of the period/year
Bank overdraft 25,944 17,862 17,862
Cash flows:
Movement in overdraft (12,763) (2,649) 8,082
Debt arising from financing activities at end of the period/year
Bank overdraft 13,181 15,213 25,944
========= ========= =========
The Group has an overdraft facility of the lower of £40 million or 20% of the
Group’s net assets (31 May 2024 and 30 November 2024: lower of £40 million
or 20% of the Group’s net assets) which is updated and renewed on an annual
basis. The overdraft facility is provided by The Bank of New York Mellon
(International) Limited. The interest rate on the overdraft facility is
Sterling Overnight Interbank Average (SONIA) plus 0.90% (31 May 2024: SONIA
plus 0.90%; 31 December 2024: SONIA plus 0.90%).
10. Called up share capital
Ordinary Treasury Total Nominal
shares shares shares value
number number number £’000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 1 pence each:
At 30 November 2023 (audited) 131,386,194 4,200,000 135,586,194 1,356
Ordinary shares repurchased into treasury (6,800,000) 6,800,000 – –
At 31 May 2024 (unaudited) 124,586,194 11,000,000 135,586,194 1,356
Ordinary shares repurchased into treasury (3,033,697) 3,033,697 – –
At 30 November 2024 (audited) 121,552,497 14,033,697 135,586,194 1,356
Ordinary shares repurchased into treasury (4,708,000) 4,708,000 – –
--------------- --------------- --------------- ---------------
At 31 May 2025 (unaudited) 116,844,497 18,741,697 135,586,194 1,356
========= ========= ========= =========
During the period ended 31 May 2025, 4,708,000 shares were repurchased into
treasury (six months ended 31 May 2024: 6,800,000; year ended 30 November
2024: 9,833,697) for a net consideration after costs of £5,497,000 (six
months ended 31 May 2024: £7,684,000; year ended 30 November 2024:
£11,288,000).
Since 31 May 2025 and as at 29 July 2025, the Company has bought back
1,875,000 shares for costs of £2,161,000.
11. Reserves
The share premium account of £69,980,000 (31 May 2024: £69,980,000; 30
November 2024: £69,980,000) is not a distributable reserve under the
Companies Act 2006. In accordance with ICAEW Technical Release 02/17BL on
Guidance on Realised and Distributable Profits under the Companies Act 2006,
the special reserve of £49,315,000 (31 May 2024: £58,416,000; 30 November
2024: £54,812,000), capital reserve of £17,803,000 (31 May 2024:
£39,226,000; 30 November 2024: £36,986,000) and revenue reserve of
£3,880,000 (31 May 2024: £3,255,000; 30 November 2024: £4,193,000) of the
Parent Company may be used as distributable reserves for all purposes and, in
particular, the repurchase by the Parent Company of its ordinary shares and
for payments such as dividends. In accordance with the Company’s Articles of
Association, the special reserve, capital reserves and revenue reserve may be
distributed by way of dividend. The Parent Company’s gain on the capital
reserve arising on the revaluation of investments of £1,791,000 (31 May 2024:
£32,843,000; 30 November 2024: £27,046,000) is subject to fair value
movements and may not be readily realisable at short notice, as such it may
not be entirely distributable. The investments are subject to financial risks,
as such capital reserves (arising on investments sold) and the revenue reserve
may not be entirely distributable if a loss occurred during the realisation of
these investments. The reserves of the subsidiary company are not
distributable until distributed as a dividend to the Parent Company.
As at 31 May 2025, the Parent Company’s distributable reserves (excluding
capital reserves on the revaluation of investments) amounted to £69,207,000
(31 May 2024: £68,054,000; 30 November 2024: £69,900,000).
12. Financial risks and valuation of financial instruments
The Company’s investment activities expose it to the various types of risk
which are associated with the financial instruments and markets in which it
invests. The risks are substantially consistent with those disclosed in the
previous annual financial statements with the exception of those outlined
below.
Market risk arising from price risk
Price risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices (other than
those arising from interest rate risk or currency risk) whether those changes
are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting similar financial instruments traded in the
market. Local, regional or global events such as war, acts of terrorism, the
spread of infectious illness or other public health issues, recessions,
climate change or other events could have a significant impact on the Group
and the market price of its investments and could result in increased premiums
or discounts to the Company’s net asset value.
Valuation of financial instruments
Financial assets and financial liabilities are either carried in the
Consolidated Statement of Financial Position at their fair value (investments
and derivatives) or at an amount which is a reasonable approximation of fair
value (due from brokers, dividends and interest receivable, due to brokers,
accruals, cash at bank and bank overdrafts). IFRS 13 requires the Group to
classify fair value measurements using a fair value hierarchy that reflects
the significance of inputs used in making the measurements. The valuation
techniques used by the Group are explained in the accounting policies note
2(h) as set out on page 101 of the Group’s Annual Report and Financial
Statements for the year ended 30 November 2024.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset.
The fair value hierarchy has the following levels:
Level 1 – Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted
prices are readily available from an exchange, dealer, broker, industry group,
pricing service or regulatory agency and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. The Group
does not adjust the quoted price for these instruments.
Level 2 – Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for similar
instruments in markets that are considered less than active, or other
valuation techniques where all significant inputs are directly or indirectly
observable from market data.
Valuation techniques used for non-standardised financial instruments such as
options, currency swaps and other over-the-counter derivatives include the use
of comparable recent arm’s length transactions, reference to other
instruments that are substantially the same, discounted cash flow analysis,
option pricing models and other valuation techniques commonly used by market
participants making the maximum use of market inputs and relying as little as
possible on entity specific inputs.
Over-the-counter derivative option contracts have been classified as Level 2
investments as their valuation has been based on market observable inputs
represented by the underlying quoted securities to which these contracts
expose the Group.
Level 3 – Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes
inputs not based on market data and these inputs could have a significant
impact on the instrument’s valuation.
This category also includes instruments that are valued based on quoted prices
for similar instruments where significant entity determined adjustments or
assumptions are required to reflect differences between the instruments and
instruments for which there is no active market. The Investment Manager
considers observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary and
provided by independent sources that are actively involved in the relevant
market.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement. If a fair value
measurement uses observable inputs that require significant adjustment based
on unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability including an assessment of the relevant risks including but not
limited to credit risk, market risk, liquidity risk, business risk and
sustainability risk. The determination of what constitutes ‘observable’
inputs requires significant judgement by the Investment Manager and these
risks are adequately captured in the assumptions and inputs used in
measurement of Level 3 assets or liabilities.
Fair values of financial assets and financial liabilities
The table below sets out fair value measurements using the IFRS 13 fair value
hierarchy.
Financial assets/(liabilities) at fair value through profit or loss at 31 May 2025 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 146,746 666 – 147,412
Fixed income investments – 4,125 2,335 6,460
Liabilities:
Derivative financial instruments – written options (202) – – (202)
--------------- --------------- --------------- ---------------
Total 146,544 4,791 2,335 153,670
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss at 31 May 2024 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 186,532 – – 186,532
Fixed income investments – 2,162 – 2,162
Liabilities:
Derivative financial instruments – written options (5) – – (5)
--------------- --------------- --------------- ---------------
Total 186,527 2,162 – 188,689
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss at 30 November 2024 (audited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 184,586 – – 184,586
Fixed income investments – 5,166 – 5,166
Liabilities:
Derivative financial instruments – written options (51) – – (51)
--------------- --------------- --------------- ---------------
Total 184,535 5,166 – 189,701
========= ========= ========= =========
The investment in Vale debentures has been classified as Level 2 in the tables
above for all periods as these are priced using secondary market pricing
information provided by the Brazilian Financial and Capital Markets
Association (ANBIMA).
A reconciliation of fair value measurement in Level 3 is set out below.
Level 3 financial assets fair value through profit or loss
Six months Six months Year ended
ended ended 30 November
31 May 31 May 2024
2025 2024 £’000
£’000 £’000
Opening fair value – – –
Additions at cost 2,190 – –
Total profit or loss included in net profit/(loss) on investments in the Consolidated Statement of Comprehensive Income - assets held at the end of the period/year: 145 – –
--------------- --------------- ---------------
Closing balance 2,335 – –
========= ========= =========
The Level 3 valuation process and techniques used are explained in the
accounting policies in note 2(h) on page 101 of the Company’s Annual Report
and Financial Statements for the year ended 30 November 2024.
The Level 3 investments as at 31 May 2025 in the table that follows relate to
the investment in convertible debentures of Abaxx Technologies. In accordance
with IFRS 13, this investment is categorised as Level 3.
In arriving at the fair value of this investment, the key inputs are the
underlying yield to maturity and volatility in the listed equity stock price.
The Level 3 valuation process and techniques used by the Company are explained
in the accounting policies in notes 2(h) and 2(p) of the Company’s Annual
Report and Financial Statements for the year ended 30 November 2024.
Quantitative information of significant unobservable inputs – Level 3 –
Group and Company
The significant unobservable inputs used in the fair value measurement
categorised within Level 3 of the fair value hierarchy, together with an
estimated quantitative sensitivity analysis, as at 31 May 2025 is shown below.
As at Valuation Unobservable Range of Reasonable Impact on
31 May technique input weighted possible fair value
2025 average shift¹ +/-
£’000 inputs
Abaxx Technologies convertible debentures 2,335 Hybrid of Yield to 16.58% – 17.58% 0.50% £21,000
yield to maturity
maturity and Volatility in 45%-55% 5.00% £60,000
embedded listed equity
conversion stock price
option value
Gazprom equity shares – Listing
suspended
– valued at
nominal RUB
0.01
--------------- --------------- --------------- --------------- --------------- ---------------
Total 2,335
========= ========= ========= ========= ========= =========
As at Valuation Unobservable Range of Reasonable Impact on
31 May technique input weighted possible fair value
2024 average shift¹ +/-
£’000 inputs
Gazprom equity shares – Listing
suspended
– valued at
nominal RUB
0.01
--------------- --------------- --------------- --------------- --------------- ---------------
Total –
========= ========= ========= ========= ========= =========
As at Valuation Unobservable Range of Reasonable Impact on
30 November technique input weighted possible fair value
2024 average shift¹ +/-
£’000 inputs
Gazprom equity shares – Listing
suspended
– valued at
nominal RUB
0.01
--------------- --------------- --------------- --------------- --------------- ---------------
Total –
========= ========= ========= ========= ========= =========
1 The sensitivity analysis refers to a percentage amount added or deducted
from the input and the effect this has on the fair value.
The sensitivity impact on fair value is calculated based on the sensitivity
estimates based on range of weighted average inputs. Significant
increases/(decreases) in unobservable inputs in isolation would result in a
significantly higher/(lower) fair value measurement. Generally, a change in
the assumption made for the estimated value is accompanied by a directionally
similar change in the unobservable inputs.
As at 31 May 2025, the investment in Gazprom has been valued at a nominal
value of RUB0.01 (31 May 2024: RUB0.01; 30 November 2024: RUB0.01) due to lack
of access to the Moscow Stock Exchange as a result of sanctions against Russia
following the invasion of Ukraine. Following the suspension of the secondary
listings of depositary receipts of Russian companies, the investment in
Gazprom ADRs was transferred from Level 1 to Level 3. Towards the year ended
30 November 2023, the ADRs in Gazprom were converted into equity shares of
Gazprom. As at the period-end, this investment is considered a Level 3
financial asset.
For exchange listed equity investments, the quoted price is the bid price.
Substantially, all investments are valued based on unadjusted quoted market
prices. Where such quoted prices are readily available in an active market,
such prices are not required to be assessed or adjusted for any business
risks, including climate change risk, in accordance with the fair value
related requirements of the Company’s financial reporting framework.
The Company may invest no more than 10% of its net asset value in investments
held through Stock Connect as set out on page 122 of the Group’s Annual
Report and Financial Statements for the year ended 30 November 2024.
13. Related party disclosure
Directors’ emoluments
The Board consists of four non-executive Directors, all of whom are considered
to be independent of the Manager by the Board. None of the Directors has a
service contract with the Company. The Chairman receives an annual fee of
£43,500, the Chairman of the Audit and Management Engagement Committee
receives an annual fee of £36,000, the Senior Independent Director receives
an annual fee of £32,000 and each of the other Directors receives an annual
fee of £31,000.
As at 31 May 2025, an amount of £12,000 (31 May 2024: £11,000; 30 November
2024: £12,000) was outstanding in respect of Directors’ fees.
At the period end, interests of the Directors in the ordinary shares of the
Company are as set out below:
31 May 31 May 30 November
2025 2024 2024
Mr Adrian Brown (Chairman) 35,000 35,000 35,000
Mr Andrew Robson 35,000 35,000 35,000
Mrs Anne Marie Cannon 15,000 15,000 15,000
Mrs Carole Ferguson 14,505 14,505 14,505
========= ========= =========
Since the period end and up to the date of this report there have been no
changes in Directors’ holdings.
Significant Holdings
The following investors are:
a. funds managed by the BlackRock Group or are affiliates of BlackRock, Inc.
(Related BlackRock Funds); or
b. investors (other than those listed in (a) above) who held more than 20% of
the voting shares in issue in the Company and are as a result, considered to
be related parties to the Company (Significant Investors).
Total % of shares Total % of shares Number of
held by Related held by Significant Investors Significant Investors
BlackRock Funds who are not affiliates of who are not affiliates of
BlackRock Group or BlackRock Group or
BlackRock, Inc. BlackRock, Inc.
As at 31 May 2025 0.70 n/a n/a
As at 30 November 2024 0.70 n/a n/a
As at 31 May 2024 0.75 n/a n/a
========= ========= =========
14. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administrative
services to the Group under a contract which is terminable on six months’
notice. BFM has (with the Group’s consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock
Investment Management (UK) Limited (BIM (UK)). Further details of the
investment management contract are disclosed on page 55 of the Directors’
Report in the Company’s Annual Report and Financial Statements for the year
ended 30 November 2024.
The investment management fee due for the six months ended 31 May 2025
amounted to £652,000 (six months ended 31 May 2024: £724,000; year ended 30
November 2024: £1,425,000). At the period end £303,000 was outstanding in
respect of these fees (31 May 2024: £1,088,000; 30 November 2024:
£1,072,000).
The Company is entitled to a rebate from the investment management fee charged
by the Manager in the event the Company’s ongoing charges exceed the cap. Up
to 30 November 2024, the cap was 1.25% per annum of average daily net assets.
From 1 December 2024, the cap was reduced to 1.15% per annum of average daily
net assets. The amount of rebate accrued to 31 May 2025 amounted to £4,000
(31 May 2024: £nil; 30 November 2024: £nil). Any final rebate for the year
ending 30 November 2025 will not crystallise and fall due until the
calculation date of 30 November 2025.
In addition to the above services, BIM (UK) has provided the Group with
marketing services. The total fees paid or payable for these services for the
period ended 31 May 2025 amounted to £15,000 excluding VAT (six months ended
31 May 2024: £15,000; year ended 30 November 2024: £80,000). Marketing fees
of £43,000 (31 May 2024: £121,000; 30 November 2024: £28,000) were
outstanding at 31 May 2025.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
15. Capital commitments and contingent liabilities
The Group had no capital commitments at 31 May 2025 (31 May 2024: none; 30
November 2024: none). There were no contingent liabilities at 31 May 2025 (31
May 2024: none; 30 November 2024: none).
16. Publication of non-statutory accounts
The financial information contained in this Half Yearly Financial Report does
not constitute statutory accounts as defined in Section 435 of the Companies
Act 2006. The financial information for the six months ended 31 May 2025 and
31 May 2024 has not been reviewed or audited by the auditor.
The information for the year ended 30 November 2024 has been extracted from
the latest published audited financial statements, which have been filed with
the Registrar of Companies unless otherwise stated. The report of the Auditors
on those accounts contained no qualification or statement under Sections
498(2) or 498(3) of the Companies Act 2006.
17. Annual results
The Board expects to announce the annual results for the year ending 30
November 2025 in January 2026.
Copies of the annual results announcement can be obtained from the Secretary
on 020 7743 3000 or at cosec@blackrock.com. The Annual Report and Financial
Statements should be available at the beginning of February 2026, with the
Annual General Meeting being held in March 2026.
For further information please contact:
Sarah Beynsberger, Director Investment Trusts - 020 7743 3000
Tom Holl/Mark Hume, Fund Managers - 020 7743 3000
Press enquires:
Lansons Communications – Tel: 020 7294 3689
E-mail: BlackRockInvestmentTrusts@lansons.com
1 August 2025
BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
London EC2N 2DL
END
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