REG-BlackRock Throgmorton Trust Plc: Final Results
Today 07:02
BlackRock Throgmorton Trust plc
(Legal Entity Identifier: 5493003B7ETS1JEDPF59)
Information disclosed in accordance with Article 5 Transparency Directive and
DTR 4.1
Annual Results Announcement for the year ended 30 November 2025
Performance record
As at As at
30 November 30 November
2025 2024
Net assets (£’000) 1 501,618 595,908
Net asset value per ordinary share (pence) 668.53 682.82
Ordinary share price (pence) 612.00 593.00
Benchmark Index 2 18,494.13 16,794.26
Discount to cum income net asset value 3 (8.5)% (13.2)%
========= ============
Performance (with dividends reinvested) For the year For the year
ended ended
30 November 30 November
2025 2024
Net asset value per share 3 0.7% 16.3%
Ordinary share price 3 6.5% 5.0%
Benchmark Index 2 10.1% 14.1%
Average discount to cum income net asset value for the year 3 (10.5)% (9.3)%
========= =========
Performance (with dividends reinvested) Performance Performance
for the ten years for the ten years
to 30 November to 30 November
2025 2024
Net asset value per share 3 105.1% 150.9%
Ordinary share price 3 119.8% 163.7%
Benchmark Index 2 59.6% 62.1%
========= =========
For the year For the year Change %
ended ended
30 November 30 November
2025 2024
Revenue
Net revenue profit after taxation (£’000) 13,949 17,046 (18.2)
Revenue earnings per ordinary share (pence) 4 17.70 18.54 (4.6)
Dividends per ordinary share (pence)
Interim 3.80 3.75 1.3
Second Interim 15.20 14.25 6.7
--------------- --------------- ---------------
Total dividends payable/paid 19.00 18.00 5.6
========= ========= =========
Strategic Report
Chairman’s Statement
Dear Shareholder,
Future of the Company
On 20 February this year, your Board announced that the Company had, subject
to shareholder approval, agreed a proposed combination of assets (the
“Combination”) with BlackRock Smaller Companies Trust plc (‘BRSC’). A
Circular to shareholders (the “Circular”) giving information on, and
reasons for, the Combination was sent to shareholders on 23 February to
convene the necessary general meetings to seek shareholder approval. It is
currently anticipated that the Combination will become effective around 16
April 2026.
The Combination offers a number of attractions to shareholders which are set
out below under ‘Board review and benefits of the Combination’ and in the
Circular which can be found on the Company’s website at
http://www.blackrock.com/uk/thrg .
Not only will the Combination consolidate BRSC’s position as the largest
growth-focused UK Smaller Companies trust in the investment trust sector but
it will also deliver greater scale and improved liquidity for shareholders as
well as cost efficiencies - through reduced management fees and a lower
operating charges ratio (with fixed expenses spread over a larger asset base).
The combined company will benefit from an enlarged portfolio management team
with Roland Arnold as lead portfolio manager, joined by Dan Whitestone, the
current portfolio manager of the Company, as co-manager.
Shareholders will also benefit from a value realisation opportunity at close
to NAV through the cash exit which is being offered (for up to 38% of the
Company’s issued share capital excluding treasury shares), and shareholders
that remain invested in the enlarged entity will also benefit from the
introduction of a triennial 100 per cent. conditional tender offer, linked to
performance against the benchmark.
The Combination brings together two similar investment companies with
portfolio overlap of over 75 per cent. and a deep investment heritage spanning
several decades and investment cycles. The Combined entity will provide
continuing shareholders in both companies with continued exposure to a diverse
range of high-quality, growth orientated UK Smaller Companies, with net assets
of approximately £780 million in aggregate.
Performance
Over the year ended 30 November 2025 the Company’s NAV per share increased
by 0.7% and the share price increased by 6.5%, underperforming the benchmark
return of 10.1%. Although the portfolio delivered a modest increase in
absolute terms, the underperformance compared with our benchmark was
disappointing; particularly so given our portfolio manager has reported that
many of our holdings performed strongly but this was often not reflected in
share prices.
Notwithstanding this fact, your Board believes that the Company’s current
approach remains valid, with a strong rationale for investors to seek exposure
to domestic companies with good earnings growth, resilient balance sheets and
minimal debt, of the type that your Manager invests in. It is worth noting
that over the longer term the small cap universe has delivered significant
value to investors: since 1955 the annualised returns from the Deutsche Numis
Smaller Companies index vs the Deutsche Numis Large Cap Index (all excluding
investment companies) were 14.1% and 11.2%, respectively. Compounded up over
71 years, the returns from smaller companies in particular have generated
exceptional levels of wealth for investors. Excluding taxes and trading costs,
£1 invested in the Company’s benchmark would have grown to £11,312 by the
end of 2025 compared to just £1,900 for the Deutsche Numis Large Cap index.
The Company’s longer-term performance is set out in the table below; over
the ten years ended 30 November 2025, the Company’s NAV and share price
returned +105.1% and +119.8% respectively, compared to the Benchmark Index
return of +59.6%. Further information on the Company’s performance is set
out in the Investment Manager’s Report below.
Performance record to 30 November 2025 (with dividends reinvested)
1 Year change % 3 Years change % 5 Years change % 10 Years change %
NAV per share 0.7 14.5 8.1 105.1
Share price 6.5 10.9 -0.6 119.8
Benchmark Index 10.1 18.2 21.4 59.6
Revenue return and dividends
The revenue return per share for the year amounted to 17.70 pence per share,
compared to 18.54 pence per share in the prior year. This small decrease of
4.6% is as a result of lower dividends received from portfolio companies and
lower net income from derivative positions compared to the prior year.
Notwithstanding the Combination proposals, the Company’s current dividend
policy will remain unchanged until the Combination is implemented, although
the timing of any dividend payments may vary from previous years and for the
current year the second dividend will be declared as a further interim
dividend rather than a final dividend to avoid any delay in payment to
shareholders.
The Board recognises that, although the Company’s objective is capital
growth, shareholders value consistency of dividends paid by the Company. With
this in mind, the Directors are pleased to declare a second interim dividend
in respect of the year to 30 November 2025 of 15.20 pence (2024: a final
dividend of 14.25p). This, together with the interim dividend of 3.80 pence
per share paid on 5 September 2025, gives a total dividend for the year of
19.00 pence per share, increasing the total dividend distributed to
shareholders compared to the prior financial year by 5.6%. The second interim
dividend will be paid on 2 April 2026, to shareholders who are on the
Company’s register on 13 March 2026.
Should the Combination be approved, a further dividend will also need to be
paid out in respect of earnings between 1 December 2025 and the Combination
implementation date (expected to be 16 April 2026) to ensure that the Company
is compliant with investment trust tax regulations. The Board hereby declares
a pre-liquidation dividend of 5.50p per ordinary share to be paid on 2 April
2026 to shareholders who are on the Company’s register on 13 March 2026.
Share buyback activity
Over the year to 30 November 2025, the Company’s share rating traded at an
average discount of 10.5% to NAV and ended the period at a discount of 8.5%
(2025: 13.2%). This compares with the weighted average discount of the UK
smaller companies peer group which ended the period at an average discount to
NAV of 11.9%.
During the period under review, the Company bought back a total of 12,238,500
ordinary shares for a total consideration of £70,833,000. Since 30 November
2025 and up to the latest practicable date of 25 February 2026, no shares have
been bought back into treasury. As at 25 February 2026, the Company’s shares
were trading at a discount of 9.4% versus an average discount for the rest of
the peer group of 9.2%. All shares were bought back at a discount to the
prevailing NAV and were therefore accretive to existing shareholders.
Overall, the Board believes that the share buyback activity undertaken has
been beneficial in reducing the volatility of our share rating and delivering
NAV accretion. Your Board will continue to monitor the Company’s share
rating and may deploy its powers to support it by buying back the Company’s
shares where it believes that it is in shareholders’ long-term best
interests to do so.
Board review and benefits of the Combination
In reaching its decision to propose the Combination, and as part of its
continued focus on driving long-term Shareholder value, the Board, with the
support of Stanhope Consulting, undertook an extensive sector-wide review
which included an analysis of the strategies and performance of peer group
companies and an assessment of all the options available to the Company. Based
on the results of this review and regular engagement with Shareholders, the
Board concluded that the Combination is in Shareholders’ best interests. In
reaching its conclusions the Board note a range of attractions to a
combination with BRSC, as set out below:
• Scale: The enlarged
BRSC is expected to have net assets of approximately £780 million (on the
basis of the trusts’ respective net asset values as at 16 February 2026 and
assuming full take up of both the cash option and the BRSC tender offer). This
increased scale is expected to improve secondary market liquidity for
continuing Shareholders, support the marketability of the enlarged BRSC and
provide the BRSC Board with additional flexibility in pursuing discount
control initiatives.
• Continuity:
shareholders in the enlarged BRSC will see benefits from the effective
continuity of Investment Manager and closed-ended structure. These include:
– Combined
portfolio manager expertise: Building on a combined
investment track record spanning several decades and investment cycles, the
enlarged BRSC will bring together two highly experienced, well-regarded UK
small-cap managers, Roland Arnold and Dan Whitestone, who have collaborated
for over 10 years, and will co-manage a clear and distinct investment
strategy, remaining disciplined in their investment philosophy and process
that have proven successful over the long term.
– Portfolio
of quality growth companies:
the enlarged BRSC will create a single BlackRock-managed UK smaller companies
trust, merging two diversified portfolios with approximately 75 per cent.
overlap as at 31 January 2026. The enlarged BRSC will continue to prioritise
quality growth companies driven by strong management teams, leading market
positions, pricing power, robust balance sheets, healthy margins, strong
earnings growth and high levels of cash conversion.
–
Closed-ended vehicle: the
investment trust structure will continue to allow for investment in less
liquid securities, where a longer-term investment horizon and the ability to
invest patiently is often required, and will continue to offer the ability to
smooth dividend payments over time, to use gearing and to uphold strong
governance standards through an independent board of directors.
–
Attractive dividend policy:
the enlarged BRSC’s dividend policy is expected to build on the track record
achieved by BRSC, categorised as a ‘Dividend Hero’ by the AIC as a result
of delivering annual dividend growth for more than 20 years. With effect from
1 March 2026, BRSC intends to pay dividends on a quarterly basis.
• Compelling long-term prospects:
the Board and BlackRock believe UK smaller companies have
the potential to outperform their larger counterparts over the long-term,
consistent with the 2.8 per cent. annualised outperformance over the period
December 1955 to January 2026, and believe in the enlarged BRSC’s ability to
outperform its benchmark (being the Deutsche Numis Smaller Companies plus AIM
(excluding Investment Companies) Index) over the long-term.
– Both the Company and BRSC have
outperformed the Deutsche Numis Smaller Companies plus AIM (excluding
Investment Companies) Index over the last 10 years to 31 January 2026, having
delivered NAV total returns of approximately 129 per cent. and 97 per cent.,
respectively, compared to the benchmark return of approximately 86 per cent.
– The sector has faced significant
challenges over the last few years, caused by greater outflows leading to
significant under-valuation, which has impacted short term performance.
However, UK smaller companies continue to display robust fundamentals and good
long-term growth prospects. Given investment cycle trends, the portfolio
managers are confident that there remain significant opportunities within the
asset class for the patient investor.
– The Board and BlackRock believe that
the Combination strongly positions the enlarged BRSC to capitalise on any
change in sentiment towards UK smaller companies.
• Initial cash exit opportunity:
while the Board believes the benefits and strategic rationale of the
Combination are compelling for continuing Shareholders, all Shareholders will
be offered a cash exit opportunity in connection with the scheme, subject to a
1 per cent. discount, for up to 38 per cent. of THRG’s issued share capital
(excluding shares held in treasury).
• Triennial conditional exit opportunity:
subject to completion of the Combination, the enlarged BRSC
will offer a triennial performance-related tender offer for up to 100 per
cent. of its issued share capital (excluding shares held in treasury) at a 4
per cent. discount to NAV (less costs), which will be triggered if the
enlarged BRSC underperforms its benchmark, the Deutsche Numis Smaller
Companies plus AIM (excluding Investment Companies) Index, over the relevant
performance period.
• Reduced management fees:
subject to completion of the Combination, BlackRock has agreed to a
reduction in the annual management fee payable by the enlarged BRSC to: 50 bps
on NAV up to £500 million; 47.5 bps on NAV in excess of £500 million and up
to £750 million; and 45 bps on NAV in excess of £750 million. This will be
the lowest management fee for investment companies in the AIC’s UK Smaller
Companies sector that do not have a performance fee.
• BlackRock cost contribution:
continuing shareholders will be materially, if not entirely, insulated
from the costs of the Proposals as a result of the application of the
BlackRock Cost Contribution, by way of a fee waiver equal to six months of the
reduced management fee that would otherwise be payable by the enlarged BRSC
following implementation of the Scheme based on the estimated Net Asset Value
of the enlarged BRSC as at the calculation date.
• Lower ongoing charges:
The proposals will reduce fixed costs proportionately to NAV and, in
combination with the reduced management fees, deliver a competitive OCR for
the enlarged BRSC estimated to be 0.63 per cent. (which excludes the benefit
of the BlackRock Cost Contribution) compared to BRSC’s OCR of 0.76 per cent.
and THRG’s average OCR over the last five years to 30 November 2025 of 0.82
per cent. with performance fees included. This will be the lowest OCR for
investment companies in the AIC’s UK Smaller Companies sector that do not
have a performance fee.
Timescale
The Combination will be subject to approval by shareholders of both the
Company and BRSC, in addition to regulatory and tax approvals. The Company and
BRSC have each received an irrevocable undertaking from Saba Capital
representing 17.8% of the Company’s issued share capital and 10.4% of
BRSC’s issued share capital (excluding treasury shares) and letters of
intent or indicators of support representing an additional 12% of the
Company’s issued share capital and 23.9% of BRSC issued share capital
(excluding treasury shares) in support of the Combination.
A circular setting out details of the Combination and convening General
meetings to approve the Combination, has been posted to shareholders on 23
February, and can also be found on the Company’s website at
www.blackrock.com/uk/thrg .
It is anticipated that the Combination will be implemented in
mid-April 2026, with shareholders electing for the cash exit to receive their
proceeds in approximately eight weeks. In the event of the Combination being
implemented, it is intended that Mrs Nash and Mrs Lane, each Non executive
Directors of the Company, will join the five existing BRSC Directors on the
Board of the enlarged company.
Annual General Meeting
The Company’s AGM will be held on Thursday 26, March 2026 at 10.15 a.m. or,
if later, immediately after the conclusion or adjournment of the General
Meeting of the Company to be held on the same day. In light of the Combination
proposals, the Board has also convened a separate General Meeting on this date
to approve the combination proposals and details of the notice of General
Meeting can be found in the Combination circular which is available on the
Company’s website at
www.blackrock.com/uk/thrg .
Given the timing of the general meeting at which shareholders are being asked
to vote on the Combination proposals, the Board, in conjunction with the BRSC
Board, have arranged for a video to be recorded which myself and the Chair of
BRSC, Ronald Gould, will provide an overview of the transaction, following
which the portfolio managers of the combined entity, Roland Arnold and Dan
Whitestone, will provide an update for investors on the strategy for the
combined entity on a forward looking basis. We have also
produced a Shareholder Information document which can also be found on our
website at the following link
blackrock-throgmorton-trust-plc-shareholder-information-2026.pdf
(https://www.blackrock.com/uk/literature/shareholder-letters/blackrock-throgmorton-trust-plc-shareholder-information-2026.pdf)
. In light of the recommended proposals to combine the
Company with BlackRock Smaller Companies Trust plc (as set out above) this
year’s AGM will be a short, technical meeting, required to be held in
accordance with the Companies Act 2006. As such, there
will not be the usual Manager’s presentation with refreshments following the
AGM. If you cannot attend in person we encourage you to
vote in advance by completing and returning your Form of Proxy.
Voting at the Annual General Meeting will be by way of a Poll.
The Board considers that the resolutions being proposed at the AGM are in the
best interest of the Company’s shareholders as a whole.
The Board therefore recommends unanimously to shareholders that they vote in
favour of each of the resolutions, as the Directors intend to do in respect of
their own beneficial holdings.
Outlook
Since the Company’s year end, and up to 25 February 2026, the Company’s
NAV had increased by 7.5% compared to an increase in the benchmark of 5.7%.
2025 has been a challenging year for markets in general and the UK SMID market
has not been immune with sustained outflows and economic uncertainty all
putting pressure on share prices throughout the sector, de-coupling these from
underlying company fundamentals. Notwithstanding these challenging dynamics,
your Board and Manager believe that the asset class (and the Company’s
portfolio) offers significant value for investors that are prepared to take a
longer-term view.
The Emerging Companies team at BlackRock seeks out quality companies with
strong market positioning and earnings growth, and the Board is confident in
the Manager, the portfolio managers and BlackRock Emerging Companies
investment team to run the Combined entity going forward to deliver the
long-term compelling opportunities that UK smaller companies can offer
investors.
JAMES WILL
Chairman
27 February 2026
Investment Manager’s Report
For the 12 months ended 30 November 2025
Market review and investment performance
What a year! This is probably the most challenging one of my career. When I
started drafting this report it struck me just how many challenges we have
faced over the course of the year. Geopolitical tensions, from Trump’s
tariff escalations and various retaliations across the globe, tech rotations,
defence spending reforms across Europe, lower inflation, and the first
meaningful signs of a global easing cycle.
In the UK, the lack of growth, persistent inflation, and increasingly
precarious fiscal position, combined with Labour’s constant U-turns, and
growing public frustration, have not been conducive to a healthy consumer
spending environment or a stimulant for businesses to invest. The chancellor
announced her long anticipated budget, and whilst there was some relief there
was no repeat of last year’s badly conceived national insurance hike, there
was precious little to be cheerful about in a further £26 billion of tax
rises. Against this backdrop, UK large caps continued to outperform small and
mid-caps, with little optimism on the horizon to turn the dire flow picture
facing the market (discussed further below).
Performance in the second half of the financial year continued to trail the
benchmark. Our NAV was up 3.0% however, this compared to our benchmark return
of 6.5%. This resulted in the Company delivering a return of 0.7% for the full
year to 30 November 2025 and underperforming the benchmark return of 10.1%.
While in absolute terms, the small positive return was an improvement on the
result reported at the interim in May, the extent of the underperformance
relative to the benchmark was disappointing and frustrating as we do not feel
this necessarily reflects the underlying performance of the holdings or
positioning of the Company through the financial year.
All readers will be well versed in the narrative coming from the US. A narrow
market, with the overall outstanding market return in recent years being
driven by a select few tech and AI related shares, namely the “Magnificent
7”. Also, although perhaps less well communicated, is the challenge for
active stock pickers to outperform a market that is so narrowly focused, which
has seen US and Global benchmarks delivering top decile performance in recent
years, far outperforming the average active manager. But this narrowness is
not just a US phenomenon. Returns in UK large caps, as well as small and mid
caps have been unusually narrow. Key features of the market during the last
financial year has been the outperformance of value versus growth, and the
underperformance of quality. Both of which have caused a significant headwind
to our quality growth focused investment philosophy. To put some of these
headwinds discussed into some context:
• 100% of the benchmark’s return over the last 12
months was generated by only 30 shares! More remarkable, when one considers
the benchmark comprises of over 1000 companies.
• Sadly, 60% of the companies in the benchmark
underperformed through the year.
• Of the top 30 shares that generated 100% of the
benchmark’s return, they include 6 companies that were bid for, 6x resource
companies, and 6x value financials. Holders should know that resources and
esoteric value financials are not in our wheelhouse, and not what shareholders
in the Company would/should expect us to have exposure to. As for the bids, we
owned one (Alpha Group) but not the others.
• Frustratingly, many of our investments have executed
well through the financial year, beating and raising for the majority; indeed
our net upgrade/downgrade ratio (number of shares in long book upgrading
versus downgrading) is almost double the average of the benchmark.
• Unfortunately, despite the positive earnings
revisions many of our shares have delivered, it has not translated into rising
share prices, so many investments have ended the year cheaper than where they
started, we think due to the persistent outflows we have witnessed.
To provide some context for the outflow environment facing the UK SMID
universe, UK small and mid-cap total AUM shrank by 14% purely from outflows in
the last 12 months, following c.7% and c.12% in the prior two years.
While there were of course the stylistic headwinds, discussed above to contend
with during the year, as is always the case, there were also some stock
specifics that detracted as well. The largest detractor during the year was
Just Group , the financial services
business which received an offer from Brookfield Wealth Solutions at a massive
75% premium. Frustratingly, this is a share that we had been both long and
short during the period. We decided to go short as we saw challenges in the
size and scale of activity within the pension buyout market and we were
concerned about the company’s ability to meet current market forecasts.
Shortly after the bid, the company issued a profit warning, with group profits
down 23%, for the exact reasons that we had grown concerned. If that wasn’t
enough, the company profit warned again in January 2026. While the thesis to
go short was right, this was scant consolation, and the bid ended up costing
c.63 bps of performance for the year.
The second biggest detractor was Breedon
which has been weak due to ongoing adverse weather in the US as well as
softer trading in UK as recovery in GB volumes seems to be being pushed out to
the right (again). While disappointing, we retain the position given
Breedon’s dominant market position in aggregates, strong pricing power and
exposure to new growth markets like the US. The shares languish on a single
digit P/E multiple and a double digit FCF yield for what we believe are
trough/near trough earnings. When volumes recover we think the recovered
earnings makes Breedon represent outstanding value, though we accept in the
very near term the outlook for the UK remains soft.
The third largest detractor, as highlighted at the half-year, was
Trainline which fell on the news that Department
for Transport will begin a consultation process on the Rail Reform Bill,
designed to establish Great British Railways (GBR) as the governing body for
passenger rail. While Trainline has a strong market position, built on its
strong technology platform, the shares are no longer in the benchmark and
therefore we exited the holding because of the increased uncertainty.
On the positive side, while clearly the overarching headwinds faced during the
year were too strong for stock specific contributors to drive a year of
outperformance, we were still able to benefit from several high-quality
businesses, that were able to deliver on their promises to investors.
The largest positive contributor was Alpha Group
, which was discussed at length in the half-year report. The company
had performed well on the back of strong results, with impressive revenue and
profit growth, underpinned by increasing regulation, digitalisation and its
scalable technology. The shares then soared after receiving a bid from US
listed Corpay, in a deal that completed in October 2025 and valued the FX
solutions provider at approximately US$2.2 billion. Shares in
Chemring have continued to deliver solid results
(beating forecasts, record results, order book etc) whilst it has also
benefitted from continued outperformance of the Aerospace & Defence sector.
While shorts in aggregate detracted due to the large premium paid for the
acquisition of Just Group, the Company was able to benefit from some stock
specific short successes, leveraging its unique toolkit to deliver a
differentiated source of alpha. Short successes during the year included a
delivery-focused pizza delivery chain ,
which has been impacted by having too many stores, too much competition and
falling store densities impacting profitability. Other notable short
contributors included a well-known pet supplies retailer
and a data analytics business
.
While the decision through the year to increase exposure to non-UK listed
shares was, in hindsight a little late than it should have been, the decision
was still a positive to alpha in the second half of the year.
Advanced Energy Industries , a precision power
solutions provider, listed in the US, which supplies solutions used in
semiconductor manufacturing and data centres, continued to report results that
were ahead of guidance, driven by increased demand for data centre solutions.
Portfolio positioning and outlook
Since reducing UK domestic exposure at the end of H1 we have made little
changes to overall fund positioning. Whilst relative performance has lagged
the benchmark, as I wrote above, many of our investments continue to execute
well with positive revisions to forecasts but just haven’t really been
rewarded for their efforts with a rising share price. Therefore, with the fund
getting cheaper, and the majority of shares executing well, we aren’t
inclined to change, nor chase esoteric value areas of the market that are
going up on re-rating and not earnings.
We have been through periods like this before and I remind myself that
upgrades don’t get de-rated forever. The Company therefore remains focused
on idiosyncratic stock positions, with differentiated propositions, where our
confidence in the underlying businesses remains as positive as ever, even if
the market has yet to reflect their prospects in the share prices. Shares like
XPS, the leading pensions administrator, operating in a market that is a
non-discretionary purchase for many pension schemes, driven by regulation and
risk aversion from trustees, and completely non-cyclical. XPS is taking market
share, winning larger contracts and demonstrating value, growing high single
digit, expanding margins and capacity and a willingness to do deals, saw a
double digit EPS upgrade and is now trading at a multi-year low valuation 15X
PE. Tatton Asset Management also de-rated by 20% despite strong upgrades and
growth, they are the market leading provider of MPS solutions to the UK wealth
management market, effectively offering a low-cost fund management solution
for IFAs who want to spend more time advising clients and less time on
investment compliance and rebalancing. This fits well into the underserved
mass affluent category and has grown to be almost 7.5x in revenue since we
backed Tatton at IPO in 2018. These are just two of many names within the
Company, where strong earnings delivery has not resulted in share price
performance we’d expect, but we remain confident that if we focus on
bottom-up fundamentals, in time, share price performance will eventually
follow.
The outlook for the UK remains challenged, with softer growth, weaker
employment and higher inflation as the effects of Labour’s tax on jobs have
now transmitted into the economy. This, coupled with a lack of confidence in
the UK equity market more broadly, has contributed to the ongoing outflows
that we are seeing from the UK market, particularly small & mid-caps, further
pressuring valuations of thinly traded shares.
We remain of the view that there is compelling value on offer in the UK small
and mid cap complex but concede there are limited positive catalysts in the
near term to stem the sector outflows. M&A activity is likely to continue at
pace as Private Equity and Corporates take advantage of this backdrop, whilst
the broader de-equitisation from company share buyback programmes continues.
Given the ongoing headwinds facing the asset class the gross remains at c.116%
and the net came down marginally to c.110%.
We thank you for your patience and your support.
DAN WHITESTONE
BlackRock Investment Management (UK) Limited
27 February 2026
Portfolio of investments
1 XPS Pensions Group (2024: n/a)
Financial Services
Market value: £18,492,000
Share of net assets: 3.7% (2024: n/a)
Pension consulting and administration business
2 Rosebank 1
(2024: 96th)
Financial Services
Market value: £15,403,000 2
Share of net assets: 3.1% (2024: 0.4%)
Industrial company with a “Buy, improve, sell” strategy
3 Boku 1
(2024: 16th)
Support Services
Market value: £15,380,000
Share of net assets: 3.1% (2024: 2.0%)
Digital payments platform
4 Morgan Sindall (2024: 15th)
Construction & Materials
Market value: £15,279,000
Share of net assets: 3.0% (2024: 2.1%)
Supplier of office fit out, construction and urban regeneration
services
5 Tatton Asset Management 1
(2024: 3rd)
Financial Services
Market value: £14,875,000
Share of net assets: 3.0% (2024: 2.8%)
Provision of discretionary fund management services to the IFA
market
6 Serco Group (2024: n/a)
Support Services
Market value: £14,676,000
Share of net assets: 2.9% (2024: n/a)
Provider of public services across health, transport, immigration,
defence, justice and citizen services
7 Great Portland Estates (2024: 8th)
Real Estate Investment Trusts
Market value: £12,889,000 2
Share of net assets: 2.6% (2024: 2.6%)
Owner of commercial real estate in central London
8 IntegraFin (2024: 2nd)
Financial Services
Market value: £12,237,000
Share of net assets: 2.4% (2024: 3.1%)
UK savings platform for financial advisors
9 Rotork (2024: 4th)
Electronic & Electrical Equipment
Market value: £10,693,000
Share of net assets: 2.1% (2024: 2.8%)
Manufacturer of industrial flow equipment
10 IG Group Holdings (2024: 29th)
Financial Services
Market value: £10,394,000
Share of net assets: 2.1% (2024: 1.3%)
Online provider of spread betting and CFD trading services
1 Traded on the Alternative Investment Market (AIM) of the London
Stock Exchange.
2 Includes long derivative positions.
Percentages shown are the share of net assets.
The market value shown is the gross exposure to the shares through equity
investments and long derivative positions. For equity investments, the market
value is the fair value of the shares. For long derivative positions, it is
the market value of the underlying shares to which the portfolio is exposed
via the contract.
Percentages in brackets represent the portfolio holding as at 30 November
2024.
# Company £’000 1 % Description
11 FRP Advisory Group PLC 2 10,073 2.0 Provider of forensics, corporate finance, debt and financial advisory services
Support Services
12 Goodwin 10,011 2.0 Mechanical and refractory engineering company
General Industrials
13 Alfa Financial Software 9,998 2.0 Provider of software to the finance industry
Software & Computer Services
14 Hochschild Mining 9,463 1.9 A precious metals mining company
Precious Metals & Mining
15 Genus 9,181 3 1.8 Animal genetics company
Pharmaceuticals & Biotechnology
16 Chemring Group 9,028 1.8 Provider of technology products and services to aerospace, defence and security markets
Aerospace & Defence
17 Plus500 Ltd 8,691 1.7 Online trading platform provider
Financial Services
18 Bellway 8,283 1.7 UK housebuilder
Household Goods & Home Construction
19 Sigmaroc 2 8,001 1.6 Buy-and-build group targeting construction materials assets in the UK and Northern Europe
Construction & Materials
20 Luceco 7,873 1.6 Supplier & manufacturer of high quality LED lighting products
Electronic & Electrical Equipment
21 Craneware 2 7,827 1.6 Provider of financial business software for US hospitals
Healthcare Equipment & Services
22 Helios Towers 7,827 1.6 Provider of telecommunications infrastructure
Telecommunications Service Providers
23 Breedon 7,632 1.5 Supplier of construction materials
Construction & Materials
24 Elementis 7,616 1.5 Speciality chemicals company
Chemicals
25 Grafton Group 7,506 1.5 Builders merchants in the UK, Ireland and Netherlands
Support Services
26 AJ Bell 7,461 1.5 UK savings platform for financial advisors & individual investors
Financial Services
27 Greencore Group 7,426 1.5 An international convenience food manufacturer
Food Producers
28 DiscoverIE 7,426 1.5 International designer, manufacturer and supplier of customised electronics
Electronic & Electrical Equipment
29 Ithaca Energy 7,285 1.5 An independent oil and gas company focused on the UK
Oil Equipment & Services North Sea
30 Computacenter 7,050 1.4 Computer services
Software & Computer Services
31 JTC plc 6,745 1.3 Provider of fund administration, company secretarial and
Support Services administration, and private wealth services
32 Cranswick 6,564 1.3 Producer of premium, fresh and added-value food products
Food Producers
33 Safestore 6,416 1.3 Provider of self-storage units
Real Estate Investment Trusts
34 Pollen Street Group 6,164 3 1.2 Alternative asset management firm focused on investments in financial and business services sectors
Investment Banking and Brokerage Services
35 Sirius Real Estate 6,142 1.2 Owner and operator of business parks, offices and industrial complexes in Germany
Real Estate Investment & Services
36 Porvair 6,092 1.2 Specialist filtration and environmental technology
Electronic & Electrical Equipment
37 Genuit 6,010 1.2 Manufacturer of plastic piping systems
Construction & Materials
38 Advanced Energy Industries 4 5,782 3 1.2 Technology company
Technology Hardware & Equipment
39 Oxford Biomedica 5,758 3 1.1 Gene cell therapy
Pharmaceuticals & Biotechnology
40 TP ICAP 5,443 1.1 Inter-dealer broker
Financial Services
41 TBC Bank Group 5,332 1.1 A bank and financial services provider in Georgia
Banks
42 Oxford Instruments 5,331 1.1 Designer and manufacturer of tools and systems for industry and research
Electronic & Electrical Equipment
43 CVS Group 2 5,303 1.1 Operator of veterinary surgeries
General Retailers
44 VSE Corporation 4 5,300 3 1.1 Provider of aftermarket distribution, and maintenance,
Aerospace & Defence repair and overhaul services to the aviation sector
45 Mitie Group PLC 5,244 1.0 UK strategic outsourcing and facilities management company
Industrial Support Services
46 Zotefoams 5,073 3 1.0 Manufacturer of polyolefin foams used in sport, construction, marine, automation, medical equipment and aerospace
Chemicals
47 OSB Group 5,055 1.0 Specialist lending business
Financial Services
48 Kier Group 4,933 1.0 UK construction, services and property group
Construction & Materials
49 SPX Technologies 4 4,854 3 1.0 Supplier of highly engineered products and technologies, including heating, ventilation and air conditioning
Electronic & Electrical Equipment
50 4imprint Group 4,844 1.0 Supplier of promotional merchandise in the US
Media
51 Hill & Smith Holdings 4,741 0.9 Supplier of infrastructure products and galvanizing services
Industrial Metals & Mining
52 Pan African Resources 2 4,696 0.9 Mining company offering sustainable gold production
Industrial Metals & Mining
53 Watches of Switzerland 4,646 0.9 Retailer of luxury watches
Personal Goods
54 Atalaya Mining Copper 4,632 0.9 Producer of copper and other critical metals that are essential for economic growth and the energy transition
Industrial Metals & Mining
55 GBG 2 4,563 0.9 Identity verification, location intelligence and fraud prevention company
Software & Computer Services
56 Telecom Plus 4,263 0.8 UK multi-utility supplier
Electricity
57 Polar Capital Holdings 2 4,204 0.8 Provider of investment management services
Financial Services
58 LPL Financial 4 4,002 3 0.8 Wealth management firm
Investment Banking and Brokerage Services
59 Bloomsbury Publishing 3,922 0.8 Independent publishing house
Media
60 Boot Barn Holdings 4 3,839 3 0.8 Lifestyle retailer
Specialty Retailers
61 Princes Group 3,839 0.8 Food and drink company
Food Producers
62 Construction Partners 4 3,642 3 0.7 Civil structure company
Construction & Materials
63 Baltic Classifieds Group 3,642 0.7 Operator of online classified businesses in the Baltics
Software & Computer Services
64 Rambus 4 3,569 3 0.7 US listed chip and silicon IP producer
Semiconductors & Semiconductor Equipment
65 Savills 3,489 0.7 Provision of specialist real estate services
Real Estate Investment & Services
66 PayPoint 3,488 3 0.7 Digital payments business
Industrial Support Services
67 Cairn Homes 4 3,450 3 0.7 Builder of community apartments and homes
Household Durables
68 Moneysupermarket.com 3,402 0.7 Provider of price comparison website specialising in financial services
Software & Computer Services
69 Lancashire Holdings 3,313 0.7 Provider of global specialty insurance and reinsurance
Non-life Insurance products
70 Lottomatica 4 3,306 3 0.7 Gaming operator
Travel & Leisure
71 Cohort Plc 2 3,288 0.7 Defence and security technology company
Aerospace & Defence
72 Costain Group PLC 3,279 0.7 Engineering and construction company
Industrial Support Services
73 Paragon Banking Group 3,244 3 0.6 A specialist banking group
Financial Services
74 Crane Co. 4 3,161 3 0.6 Industrial products company
Electronic & Electrical Equipment
75 Animalcare Group 2 3,109 0.6 Veterinary pharmaceuticals business
Pharmaceuticals & Biotechnology
76 Quilter Plc 2,945 0.6 A wealth management company
Financial Services
77 Team 17 2 2,872 0.6 UK video game developer and publisher
Leisure Goods
78 Mears Group 2,844 0.6 UK provider of housing solutions
Industrial Support Services
79 Advanced Medical Solutions 2 2,705 3 0.5 Developer and manufacturer of advanced wound care solutions
Healthcare Equipment & Services
80 Spie 4 2,625 3 0.5 Engineering, technical services and construction company
Construction & Materials
81 JFrog 4 2,586 0.5 Provider of software supply chain solutions
Software & Computer Services
82 Bodycote 2,583 0.5 Provision of thermal processing services
Industrial Engineering
83 Gooch & Housego 2 2,563 0.5 Designer and manufacturer of advanced photonic systems
Electronic & Electrical Equipment
84 Ashmore Group 2,456 0.5 Emerging market focused investment manager
Financial Services
85 Trustpilot 2,398 3 0.5 An online review platform for consumers to post reviews
Software & Computer Services about businesses and products/services
86 Jupiter Fund Management 2,380 0.5 UK fund management group, managing equity and bond investments for private and institutional investors
Investment Banking and Brokerage Services
87 Funding Circle Holdings 2,364 3 0.5 Provider of funding services to small businesses
Financial Services
88 Cerillion 2 2,339 0.5 Provider of billing, charging and customer management systems
Software & Computer Services
89 Restore 2 2,329 0.5 Records management business
Support Services
90 Crest Nicholson 2,290 3 0.5 UK housebuilder
Household Goods & Home Construction
91 Young & Co’s Brewery 2 2,251 0.4 Owner and operator of pubs mainly in the London area
Travel & Leisure
92 Trainline 2,236 0.4 Provider of online rail and train ticketing services
Travel & Leisure
93 AB Dynamics 2 2,010 0.4 Developer and supplier of specialist automotive testing systems
Industrial Engineering
94 Forterra 1,808 0.4 Manufacturer of building products
Construction & Materials
95 Central Asia Metals 2 1,792 3 0.4 Production of base metals with operations in Kazakhstan and North Macedonia
Industrial Metals & Mining
96 Dynatrace 4 1,665 3 0.3 Software intelligence platform
Software & Computer Services
97 Hilton Food Group 1,539 0.3 Provider of specialist food packaging services
Food Producers
98 GitLab 4 1,429 3 0.3 Software development company
Software & Computer Services
99 SIG 784 0.2 Supplier of building, roofing and insulation products
Industrial Support Services
Long investment positions (excluding BlackRock’s Institutional Cash Series plc - Sterling Liquidity Fund) 566,883 113.4
Short investment positions (30,552) (6.1)
1 The market value shown is the gross exposure to the
shares through equity investments and long derivative positions. For equity
investments, the market value is the fair value of the shares. For long
derivative positions, it is the market value of the underlying shares to which
the portfolio is exposed via the contract.
2 Traded on the Alternative Investment Market (AIM) of
the London Stock Exchange.
3 Includes long derivative positions.
4 Holdings listed on exchanges outside of the UK.
Percentages shown are the share of net assets.
At 30 November 2025, the Company held equity interests in two companies
comprising more than 3% of a company’s share capital as follows: Luceco
(3.6%) and Tatton Asset Management (3.5%).
Fair value and gross market exposure of investments
as at 30 November 2025
Fair value 1 Gross market exposure 2,3 Gross market exposure as a
% of net assets 2
£’000 £’000 2025 2024
Long equity investment positions (excluding BlackRock’s Institutional Cash Series plc - Sterling Liquid Environmentally Aware Fund) 474,824 474,824 94.6 93.6
Long derivative positions (1,038) 92,059 18.4 18.4
Subtotal of long investment positions 473,786 566,883 113.0 112.0
Short investment positions (232) (30,552) (6.1) (3.4)
Subtotal of long and short investment positions 473,554 536,331 106.9 108.6
Cash and cash equivalents 27,683 (35,094) (7.0) (7.3)
Other net current assets/(liabilities) 381 381 0.1 (1.3)
--------------- --------------- --------------- ---------------
Net assets 501,618 501,618 100.0 100.0
========= ========= ========= =========
The Company was geared through the use of long and short derivative positions.
Gross and net gearing as at 30 November 2025 were 119.1% and 106.9%
respectively (2024: 115.4% and 108.6% respectively). Gross and net gearing are
Alternative Performance Measures, see Glossary contained within the Annual
Report and Financial Statements.
1 Fair value is determined as follows:
– Long equity investment positions are
valued at bid prices where available, otherwise at latest market traded quoted
prices.
– The exposure to securities held through
long derivative positions directly in the market would have amounted to
£93,097,000 at the time of purchase, and subsequent movement in market prices
have resulted in unrealised losses on the long derivative positions of
£1,038,000 resulting in the value of the total long derivative market
exposure to the underlying securities decreasing to £92,059,000 as at 30
November 2025. If the long positions had been closed on 30 November 2025, this
would have resulted in a loss of £1,038,000 for the Company.
– The notional exposure of selling the
securities gained via the short derivative positions would have been
£30,320,000 at the time of entering into the contract, and subsequent
movement in market prices have resulted in unrealised losses on the short
derivative positions of £232,000 resulting in the value of the total short
derivative market exposure of these investments decreasing to £30,552,000 at
30 November 2025. If the short positions had been closed on 30 November 2025,
this would have resulted in a loss of £232,000 for the Company.
2 Gross market exposure for equity investments is the
same as fair value; bid prices are used where available and, if unavailable,
latest market traded quoted prices are used. For both long and short
derivative positions, the gross market exposure is the market value of the
underlying shares to which the portfolio is exposed via the contract.
3 The gross market exposure column for cash and cash
equivalents has been adjusted to assume the Company traded direct holdings,
rather than exposure being gained through long and short derivative positions.
Distribution of investments
as at 30 November 2025
Sector % of % of % of
long portfolio short portfolio net portfolio
Oil, Gas & Coal 0.0 (0.3) (0.3)
Oil Equipment & Services 1.4 0.0 1.4
--------------- --------------- ---------------
Oil & Gas 1.4 (0.3) 1.1
Chemicals 2.4 0.0 2.4
Construction & Materials 9.3 (0.1) 9.2
Industrial Metals & Mining 2.9 0.0 2.9
Precious Metals & Mining 1.8 0.0 1.8
--------------- --------------- ---------------
Basic Materials 16.4 (0.1) 16.3
Aerospace & Defence 3.3 (0.3) 3.0
General Industrials 1.9 0.0 1.9
Electronic & Electrical Equipment 8.9 0.0 8.9
Industrial Engineering 0.9 0.0 0.9
Industrial Support Services 2.9 0.0 2.9
Support Services 10.6 0.0 10.6
--------------- --------------- ---------------
Industrials 28.5 (0.3) 28.2
Beverages 0.0 0.0 0.0
Food Producers 3.6 (0.2) 3.4
Leisure Goods 0.5 0.0 0.5
Personal Goods 0.9 0.0 0.9
--------------- --------------- ---------------
Consumer Staples 5.0 (0.2) 4.8
Healthcare Equipment & Services 2.0 0.0 2.0
Pharmaceuticals & Biotechnology 3.3 0.0 3.3
--------------- --------------- ---------------
Health Care 5.3 0.0 5.3
Food & Drug Retailers 0.0 (0.4) (0.4)
General Retailers 1.0 (0.2) 0.8
Household Goods & Home Construction 2.0 0.0 2.0
Household Durables 0.6 (0.3) 0.3
Media 1.6 (0.2) 1.4
Specialty Retailers 0.7 (0.4) 0.3
Travel & Leisure 1.5 (0.5) 1.0
--------------- --------------- ---------------
Consumer Discretionary 7.4 (2.0) 5.4
Banks 1.0 0.0 1.0
Financial Services 21.1 (2.3) 18.8
Investment Banking and Brokerage Services 2.3 0.0 2.3
Non-life Insurance 0.6 0.0 0.6
--------------- --------------- ---------------
Financials 25.0 (2.3) 22.7
Real Estate Investment & Services 1.8 0.0 1.8
Real Estate Investment Trusts 3.6 0.0 3.6
--------------- --------------- ---------------
Real Estate 5.4 0.0 5.4
Technology Hardware & Equipment 1.1 0.0 1.1
Semiconductors & Semiconductor Equipment 0.7 0.0 0.7
Software & Computer Services 7.2 (0.5) 6.7
--------------- --------------- ---------------
Technology 9.0 (0.5) 8.5
Telecommunications Service Providers 1.5 0.0 1.5
--------------- --------------- ---------------
Telecommunications 1.5 0.0 1.5
Electricity 0.8 0.0 0.8
--------------- --------------- ---------------
Utilities 0.8 0.0 0.8
Total Investments 105.7 (5.7) 100.0
========= ========= =========
The above percentages are calculated on the net portfolio as at 30 November
2025. The net portfolio is calculated as long equity and derivative positions,
less short derivative positions as at 30 November 2025.
Analysis of the portfolio
Market capitalisation as at 30 November 2025
Long positions 1 % of net portfolio Short positions % of net portfolio
£10bn+ 1.1% 0.0%
£5bn – £10bn 4.5% 0.0%
£2.5bn – £5bn 15.7% -0.6%
£2bn – £2.5bn 12.7% -0.6%
£1.5bn – £2bn 8.3% -0.7%
£1bn – £1.5bn 24.3% -0.6%
£500m – £1bn 23.3% -0.7%
£0m – £500m 15.9% -2.6%
1 The above investments may comprise exposures to long equity and
long derivative positions.
Source: BlackRock
Position size as at 30 November 2025
Market value Long positions 1 Short positions
£15m – £20m 4 0
£10m – £15m 8 -1
£5m – £10m 35 0
£2.5m – £5m 36 0
£0m – £2.5m 16 -14
1 The above investments may comprise exposures to long equity and
long derivative positions.
Source: BlackRock.
Portfolio holdings within Key Benchmark Indices
Gross Basis 1 Net Basis 2
FTSE 250 54.8% 50.6%
FTSE AIM 19.4% 21.2%
FTSE Small Cap 12.7% 14.2%
Other 13.1% 14.0%
Portfolio holdings within Benchmark Index (the Deutsche Numis Smaller
Companies plus AIM (excluding Investment companies) Index)
Gross Basis 1 Net Basis 2
Within Benchmark 87.3% 83.3%
(2024: 82.5%) (2024: 78.3%)
Off-Benchmark 12.7% 16.7%
(2024: 17.5%) (2024: 21.7%)
Source: BlackRock.
1 Long exposure plus short exposure as a percentage of the portfolio
in aggregate excluding investment in BlackRock’s Institutional Cash Series
plc – Sterling Liquid Environmentally Aware Fund.
2 Long exposure less short exposure as a percentage of the portfolio
excluding investment in BlackRock’s Institutional Cash Series plc –
Sterling Liquid Environmentally Aware Fund.
Business review
Future of the Company
Shareholders' attention is drawn to the Proposal for the combination with
BlackRock Smaller Companies Trust plc detailed under the 'Future of the
Company' and 'Board review and benefits of the Combination’ sections of the
Chairman's Statement above.
Principal activities
The Company is a public company limited by shares which carries on business as
an investment trust and its principal activity is portfolio investment.
Objective
The Company’s objective is to provide shareholders with long-term capital
growth and an attractive total return through investment primarily in UK
smaller and mid-capitalisation companies traded on the London Stock Exchange.
Strategy, business model, investment policy and investment process
The Company invests in accordance with the objective given above. The Board is
collectively responsible to shareholders for the long-term success of the
Company and is its governing body. There is a clear division of responsibility
between the Board and the Manager, BlackRock Fund Managers Limited (BFM).
Matters for the Board include setting the Company’s strategy, including its
investment objective and policy, setting limits on gearing (both bank
borrowings and the effect of derivatives), capital structure, governance, and
appointing and monitoring of performance of service providers, including the
Manager.
The Company’s business model follows that of an externally managed
investment trust; therefore the Company does not have any employees and
outsources its activities to third party service providers, including the
Manager who is the principal service provider.
The management of the investment portfolio and the administration of the
Company have been contractually delegated to BFM. The Manager, operating under
guidelines determined by the Board, has direct responsibility for the
decisions relating to the day-to-day running of the Company and is accountable
to the Board for the investment, financial and operating performance of the
Company.
Other service providers include the Depositary and the Fund Accountant, The
Bank of New York Mellon (International) Limited, and the Registrar,
Computershare Investor Services PLC. Details of the contractual terms with
third party service providers are set out in the Directors’ Report.
Combination with BlackRock Smaller Companies Trust plc
On 20 February 2026 the Company announced that it had agreed terms
with the board of BlackRock Smaller Companies Trust plc (‘BRSC’) in
respect of a proposed combination of the assets of the Company with those of
BRSC. Subject to shareholder approval at General Meeting
to be held on 26 March 2026 and 16 April 2026, this will be effected by way of
a scheme of reconstruction and winding up of BlackRock Throgmorton Trust plc
under section 110 of the Insolvency Act 1986 (the ‘Scheme’) and the
associated transfer of the majority of the cash, assets and undertaking of
BlackRock Throgmorton Trust plc to BRSC in exchange for the issue of new
Ordinary shares in BRSC to those BlackRock Throgmorton Trust shareholders who
elected to roll over. BRSC shareholders will also be
voting on this combination at a General Meeting to be held on 30 March 2026.
More information in respect of the transaction can be
found in the Circular and Notice of Meeting at the following link:
blackrock-throgmorton-trust-plc-circular.pdf
(https://www.blackrock.com/uk/literature/shareholder-letters/blackrock-throgmorton-trust-plc-circular.pdf)
.
Investment Policy
The Company’s performance is measured against the Deutsche Numis Smaller
Companies plus AIM (excluding Investment Companies) Index (the Benchmark
Index). The Investment Manager, BlackRock Investment Management (UK) Limited
(BIM (UK)), may invest in companies outside the Benchmark Index without
restriction, subject to the following limits.
The Company may hold up to 15% of its gross assets, at the time of
acquisition, in securities of companies which are listed or traded on a stock
exchange outside the UK.
In addition to the normal long only portfolio, the Company will likely hold a
mixture of long and short contracts for difference (CFDs) and/or comparable
equity derivatives that would result in a typical net market exposure of
between 100% and 115%. In extremis, the Company could deploy the full 30% of
permissible leverage into short CFDs and/or comparable equity derivatives,
thereby reducing its overall net market exposure to 70%.
The Company may also invest up to 2.5% of its net assets (measured at the time
of investment) in unquoted securities, including securities issued by
companies incorporated outside the United Kingdom. However, the Company may
invest more than 2.5%, but no more than 3.75%, of its net assets (both
measured at the time of investment), in unquoted securities in circumstances
where such investment is in an existing investee company and, in the
Investment Manager’s opinion, a failure of the Company to make such
investment would have a material adverse effect on the value of the
Company’s investment in such investee company.
In addition, the Company is permitted to employ leverage up to 30% of net
assets, which it does primarily through the use of CFDs and/or comparable
equity derivatives, rather than bank borrowings, therefore enabling the
Company to have a maximum net market exposure of 130%.
In normal circumstances the Company will likely hold a mixture of long and
short CFDs and/or comparable equity derivatives that would result in a typical
net market exposure of between 100% and 115% 1 .
Portfolio risk will be mitigated by investment in a diversified portfolio of
holdings. No more than 5% of the Company’s gross assets, at the time of
acquisition, may be invested in any one single holding, excluding holdings in
cash or money market funds, where up to 10% of the Company’s gross assets
may be held. The Company may also invest in collective investment vehicles.
However, the Company will not invest more than 10% of its gross assets, at the
time of the acquisition, in other listed closed-ended investment funds, unless
such companies have a stated investment policy not to invest more than 15% of
their gross assets in other listed closed-ended investment funds, in which
case the limit is 15% of gross assets.
The Board’s policy is that net gearing, borrowings less cash, should not
exceed 20% of gross assets. The Company expects to employ any leverage
primarily through its use of CFDs and/or comparable equity derivatives.
No material change will be made to the investment objective and policy without
shareholder approval.
Shareholders should note that as part of the proposed merger with BlackRock
Smaller Companies Trust plc, a new investment policy will be adopted by the
ongoing enlarged entity. Further details are given in
Part 4 of the BRSC circular which can be found at
https://www.blackrock.com/uk/literature/shareholder-letters/blackrock-smaller-companies-trust-plc-shareholder-circular-2026.pdf
.
1 The AIC measures gearing at gross level, rather than net market
exposure level (i.e. gearing is calculated as borrowings + long CFDs and/or
comparable equity derivatives + short CFDs and/or comparable equity
derivatives) and therefore the published gearing figures will be higher than
the typical net market exposure of between 100% and 115%.
Investment process
A unique feature of the Company is that it has the ability to go both long and
short up to approximately 30% of the Company’s net assets. While the UK
Smaller Companies sector has generated positive returns over the long term,
there can be significant volatility. Such an environment provides an
attractive opportunity to add value via both long and short positions which
can exploit share price moves whether up or down. As the maximum short
portfolio exposure through derivatives is 30% of net assets, the Company will
at all times retain an exposure to the market. In the course of their research
the investment management team comes across companies which they judge are
likely to underperform; the ability to take short positions therefore enhances
the opportunity to make money for shareholders. This is not possible in a
conventional or long only portfolio.
Idea generation can come from anywhere, though the primary focus is on meeting
companies, speaking to management teams, and seeking to gain an in-depth
understanding of the business and the industry in which they operate. This is
the greatest source of idea generation. Our portfolio manager focuses on
identifying strong management teams with clarity of strategic vision, in
growing markets with attractive industry dynamics, where they have a leading
market position supported by a differentiated product offering, giving them
pricing power and strong margins. These characteristics are then combined with
strong financial structures. We seek to avoid indebted companies, therefore we
look for companies that have strong balance sheets, and importantly those with
high levels of cash conversion, where cash can be reinvested back into the
business at a high rate of return. From here our manager constructs a
diversified portfolio of high quality, growth companies, while also
identifying stock specific shorting opportunities in companies that do not
meet the above criteria. These are often in industries under significant
pressure or companies with weak financial structures (i.e. too much debt and
not enough cash flow).
When markets are expected to rise in the medium term, the long/short strategy
is used to generate additional market exposure through ensuring that the long
exposure exceeds the short exposure in a range between 0% to 15% of the net
assets of the Company. Rising or ‘bull’ markets have historically (in the
UK) persisted for longer than falling or ‘bear’ markets. A typical net
market exposure might therefore be between 100% and 115%. This is lower than
the ‘gross exposure’, which is the combination of the long equity
positions, plus the net of long and short derivative positions expressed as a
percentage of net assets.
Performance
The Investment Manager’s report above includes a review of the main
developments during the year, together with information on investment activity
within the Company’s portfolio.
Results and dividends
The results for the Company are set out in the Statement of Comprehensive
Income below. The total loss for the year, after taxation, was £9,045,000
(2024: profit of £86,322,000) of which the net revenue profit amounted to
£13,949,000 (2024: profit of £17,046,000) and the net capital loss amounted
to £22,994,000 (2024: profit of £69,276,000).
Details of the dividends declared in respect of the year are set out in the
Chairman’s Statement above.
Key performance indicators
At each Board meeting, the Directors consider a number of performance measures
to assess the Company’s success in achieving its objectives. The key
performance indicators (KPIs) used to measure the progress and performance of
the Company over time, and which are comparable to those reported by other
investment trusts, are set out in the table below. These KPIs fall within the
definition of ‘Alternative Performance Measures’ (APMs) under guidance
issued by the European Securities and Markets Authority (ESMA), and additional
information explaining how these are calculated is set out in the Glossary
contained within the Annual Report and Financial Statements.
The Board monitors the KPIs at each meeting. Additionally, it regularly
reviews a number of indices and ratios to understand the impact on the
Company’s relative performance of the various components such as asset
allocation and stock selection. This includes an assessment of the Company’s
performance and ongoing charges against its peer group of investment trusts
with similar investment objectives.
Year ended 30 November 2025 Year ended 30 November 2024
Net asset value total return 1,2 0.7% 16.3%
Share price total return 1,2 6.5% 5.0%
Benchmark Index total return 3 10.1% 14.1%
Discount to cum income net asset value 2 8.5% 13.2%
Revenue return per share 17.70p 18.54p
Ongoing charges 2,4 0.63% 0.56%
Ongoing charges including performance fees 2,5 0.51% 0.82%
1 This measures the Company’s share price and NAV total
return, which assumes dividends paid by the Company have been reinvested.
2 Alternative Performance Measures, see Glossary
contained within the Annual Report and Financial Statements.
3 The Company’s Benchmark Index is the Deutsche Numis
Smaller Companies plus AIM (excluding Investment Companies) Index.
4 Ongoing charges represent the management fee and all
other operating expenses, excluding the performance fee, finance costs, direct
transaction costs, custody transaction charges, VAT recovered, taxation, prior
year expenses written back and certain non-recurring items as a % of average
daily net assets.
5 Ongoing charges represent the management fee,
performance fee and all other operating expenses, excluding finance costs,
direct transaction costs, custody transaction charges, VAT recovered,
taxation, prior year expenses written back and certain non-recurring items as
a % of average daily net assets. Further information on the management fees
paid by the Company can be found in Note 4 to the financial statements below.
Share price discount/premium
The Directors recognise that it is in the long-term interests of shareholders
that the Company’s shares do not trade at an excessive discount or premium
to their prevailing NAV for any material length of time. In the year under
review the discount to NAV of the ordinary shares on a cum income basis has
ranged between a discount of 8.1% and 13.6%, with the average being a discount
of 10.5%. The shares ended the year at a discount of 8.5% on a cum income
basis. As at 25 February 2026 the discount was 9.4%.
Following the financial year end, the Board convened a General Meeting of its
shareholders on 17 February 2025. The purpose of the meeting was to seek to
renew the power taken at the last AGM to buy back up to 14.99% of the
Company’s shares.
As it does each year, the Board will also be seeking to renew the authority
from shareholders at the AGM to issue new shares (or to reissue shares held in
treasury) and to buy back shares. Further information on these powers and the
Board's policy in this respect can also be found in the Chairman’s Statement
above.
Principal risks
As required by the UK Code of Corporate Governance, the Board has in place a
robust, ongoing process to identify, assess and monitor the principal and
emerging risks of the Company, including those that they consider would
threaten its business model, future performance, solvency or liquidity.
Emerging risks are considered by the Board as they come into view and are
incorporated into the Company’s risk register where applicable.
Additionally, the Manager considers emerging risks in numerous forums and the
Risk and Quantitative Analysis team produces an annual risk survey. Any
material risks of relevance to the Company identified through the annual risk
survey will be communicated to the Board.
A core element of this process is the Company’s risk register, which
identifies the risks facing the Company and the likelihood and potential
impact of each risk, together with the controls established for mitigation. A
residual risk rating is calculated for each risk, which allows the effect of
any mitigating procedures to be reflected in the register. The current risk
register includes a range of risks spread between investment performance risk,
income/dividend risk, legal & regulatory risk, counterparty risk, operational
risk, market risk, political risk and financial risk.
The risk register, its method of preparation and the operation of key controls
in the Manager’s and third party service providers’ systems of internal
control are reviewed on a regular basis by the Audit Committee. In order to
gain a more comprehensive understanding of the Manager’s and other third
party service providers’ risk management processes and how these apply to
the Company’s business, the Audit Committee periodically receives
presentations from BlackRock’s Internal Audit and Risk & Quantitative
Analysis teams. Where produced, the Audit Committee also reviews summaries of
the Service Organisation Control (SOC1) reports from the Company’s service
providers.
The Board has undertaken a robust assessment of both the principal and
emerging risks facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity. For instance, the
risk that unforeseen or unprecedented events (including heightened
geo-political tensions, a global pandemic, hyperinflation, stagflation, a
liquidity event or significant changes in technology and the evolution of
artificial intelligence (AI)) may have a significant negative impact on global
markets (notably through increased commodity and labour price volatility,
driving inflation and impacting global trade) and consequently a negative
impact on the Company’s NAV, performance and discount. The Board has taken
into consideration the risks posed to the Company by these events and
incorporated them into the Company’s risk register.
Emerging risks are considered by the Board as they come into view and are
incorporated into the existing review of the Company’s risk register.
Additionally, the Manager considers emerging risks in numerous forums and the
Risk and Quantitative Analysis team produces an annual risk survey. Any
material risks of relevance to the Company identified through the annual risk
survey will be communicated to the Board.
Emerging risks that have been considered by the Board over the year include
the impact of escalating geo - political conflict,
technological advances and issues around shareholder voting against a backdrop
of heightened activism across the UK investment companies sector.
The key emerging risks identified are as follows:
Geo-political risk: Escalating geo-political tensions (including, but not
limited to tensions in the Middle East and the ongoing war in Ukraine, or
deteriorating relations between China and the US/other countries) have a
significant negative impact on global markets, with an increasing use of
tariffs and domestic regulations making global trade more complex and driving
economic fragmentation.
Artificial Intelligence (‘AI’): Advances in computing power means that AI
has become a powerful tool that will impact a huge range of areas and with a
wide range of applications that have the potential to dislocate established
business models and disrupt labour markets, creating uncertainty in corporate
valuations. The significant energy required to power this technological
revolution will create further pressure on environmental resources and carbon
emissions.
Shareholder voting: There has been an increase in activist activity across the
UK closed end funds sector, with general meetings being requisitioned on a
number of UK investment trusts to change the composition of the board, and
potentially the manager and investment policy. Some investors may find it
difficult to vote at general meetings, and against this backdrop of heightened
activity there is a risk that low voting turnout at AGMs and GMs may result
either in changes being made that are not in all shareholders’ best
interests or in the failure to implement changes that are in the best
interests of shareholders.
The Board will continue to assess these risks on an ongoing basis. In relation
to the UK Code, the Board is confident that the procedures that the Company
has put in place are sufficient to ensure that the necessary monitoring of
risks and controls has been carried out throughout the reporting period.
Notwithstanding the outcome of the Board's strategic review as described in
the Chairman's Statement, the principal risks and uncertainties faced by the
Company during the financial year, together with the potential effects,
controls and mitigating factors, are set out below.
Investment performance
Principal risk
The Board is responsible for:
• setting the investment policy to
fulfil the Company’s objectives; and
• monitoring the performance of the
Company’s Investment Manager and the strategy adopted.
An inappropriate policy or strategy may lead to:
• poor performance compared to the
Company’s Benchmark Index, peer group or shareholder expectations;
• reduced demand for the Company’s
shares;
• a widening discount to NAV;
• a reduction or permanent loss of
capital; and
• dissatisfied shareholders and
reputational damage.
Mitigation/Control
To manage these risks the Board:
• regularly reviews the Company’s
investment mandate and long-term strategy;
• has set, and regularly reviews, the
investment guidelines and has put in place appropriate limits on levels of
gearing and the use of derivatives;
• receives from the Investment Manager
a regular explanation of stock selection decisions, portfolio gearing and any
changes in gearing and the rationale for the composition of the investment
portfolio;
• receives from the Investment Manager
regular reporting on the portfolio’s exposure through derivatives, including
the extent to which the portfolio is geared in this manner and the value of
any short positions;
• monitors the maintenance of an
adequate spread of investments in order to minimise the risks associated with
particular sectors, based on the diversification requirements inherent in the
Company’s investment policy;
• considers the risk of incapacitation
of the portfolio manager or his departure from the Manager;
• monitors the share price discount or
premium to NAV; and
• undertook a strategic review in the
year with the support of the external firm, Stanhope Consulting, This review
resulted in the announcement on 20 February 2026 of proposals for a
combination with BRSC expected to result in a larger vehicle with improved
liquidity and lower operating charges.
Market risk
Principal risk
Market risk arises from changes to the prices of the Company’s investments.
It represents the potential loss the Company might suffer through holding
investments and derivatives. Market risk includes the potential impact of
events which are outside the scope of the Company’s control including
heightened geo-political tensions as set out above, which may have a
significant negative impact on global markets and consequently a negative
impact on the Company’s NAV, performance and discount. Companies operating
within the sectors in which the Company invests may be impacted by new
legislation governing climate change and environmental issues, which may have
a negative impact on their valuation and share price.
Mitigation/Control
The Board carefully considers the diversification of the portfolio, asset
allocation, stock selection, unquoted investments and levels of gearing on a
regular basis and has set investment restrictions and guidelines which are
monitored and reported on by the Investment Manager. The Board monitors the
implementation and results of the investment process with the Investment
Manager, and key market risk factors are discussed.
The Board also recognises the benefits of a closed-end fund structure in
extremely volatile markets. Unlike open-ended counterparts, closed-end funds
are not obliged to sell down portfolio holdings at low valuations to meet
liquidity requirements for redemptions. Although the Board has taken
shareholder authority to buy back shares to manage the discount, it retains
the discretion to decide whether to implement buy backs and the timing and
degree to which this is done. During times of elevated volatility and market
stress, this discretion and the ability of a closed-end fund structure to
remain invested for the longer term potentially enables the Investment Manager
to adhere to disciplined fundamental analysis from a bottom-up perspective and
be ready to respond to dislocations in the market as opportunities present
themselves.
Income/dividend risk
Principal risk
The amount of dividends and future dividend growth will depend on the
performance of the Company’s underlying portfolio holdings. Changes in the
composition of the portfolio and any change in the tax treatment of the
dividends or interest received by the Company may reduce the level of
dividends received by shareholders.
Mitigation/Control
The Board monitors this risk through the receipt of detailed income forecasts
and considers the level of income at each meeting. The Company also has a
revenue reserve and powers to pay dividends from capital which could
potentially be used to support the Company’s dividend if required.
Financial risk
Principal risk
The Company’s investment activities expose it to a variety of financial
risks that include market risk, foreign currency risk, counterparty risk and
interest rate risk. At 30 November 2025, the Company had approximately 22.6%
of its gross asset value invested in AIM traded equity securities and 9.5% of
its gross assets in international markets, and, by the very nature of its
investment objective, largely invests in smaller companies. Liquidity in these
securities can from time to time become constrained, making these investments
difficult to realise at or near published prices.
Mitigation/Control
The Company is not materially exposed to foreign currency and interest rate
risk. For mitigation of market risk, see above. There are also risks linked to
the Company’s use of derivative transactions including long and short
investment positions. Details are disclosed in note 11 contained within the
Annual Report and Financial Statements, together with a summary of the
policies for managing and controlling these risks in note 16 (contained within
the Annual Report and Financial Statements).
Operational risk
Principal risk
In common with most other investment trust companies, the Company has no
employees. The Company therefore relies upon the services provided by
BlackRock (the Manager and AIFM) and The Bank of New York Mellon
(International) Limited (the Depositary and Fund Accountant) who maintain the
Company’s accounting records.
Failure by any service provider to carry out its obligations to the Company
could have a material adverse effect on the Company’s performance.
Disruption to the accounting, payment systems or custody records, as a result
of a cyber-attack or otherwise, could impact the monitoring and reporting of
the Company’s financial position.
The security of the Company’s assets, dealing procedures, accounting records
and maintenance of regulatory and legal requirements, depend on the effective
operation of these systems.
Mitigation/Control
The Board reviews the overall performance of the Manager, Investment Manager
and all other third party service providers and compliance with the investment
management agreement on a regular basis.
The Fund Accountant’s and the Manager’s internal control processes are
regularly tested and monitored throughout the year and are evidenced through
their Service Organisation Control (SOC 1) reports, which are subject to
review by an Independent Service Assurance Auditor. The SOC 1 reports provide
assurance in respect of the effective operation of internal controls.
The Company’s financial instruments held in custody are subject to a strict
liability regime and in the event of a loss of such financial instruments held
in custody, the Depositary must return assets of an identical type or the
corresponding amount, unless able to demonstrate that the loss was a result of
an event beyond its reasonable control.
The Board considers succession arrangements for key employees of the Manager
and the Board also considers the business continuity arrangements of the
Company’s key service providers on an ongoing basis and reviews these as
part of its review of the Company’s risk register.
The Board also receives regular updates from BlackRock’s internal audit
function and the Company’s Audit Committee Chairman attends an annual
briefing from the head of BlackRock’s internal audit function once a year.
This is supplemented by a written report which describes the progress made
against the current internal audit plan, any issues identified and the plan
for the forthcoming year.
Legal and regulatory risk
Principal risk
The Company has been approved by HM Revenue & Customs as an investment trust,
subject to continuing to meet the relevant eligibility conditions, and
operates as an investment trust in accordance with Chapter 4 of Part 24 of the
Corporation Tax Act 2010. As such, the Company is exempt from capital gains
tax on the profits realised from the sale of its investments.
Any breach of the relevant eligibility conditions could lead to the Company
losing its investment trust status and being subject to corporation tax on
capital gains realised within the Company’s portfolio. In such event the
investment returns of the Company may be adversely affected. Any serious
breach could result in the Company and/or the Directors being fined or the
subject of criminal proceedings or the suspension of the Company’s shares
which would in turn lead to a breach of the Corporation Tax Act 2010.
Mitigation/Control
The Investment Manager monitors investment movements, the level of forecast
income and expenditure and the amount of proposed dividends, if any, to ensure
that the provisions of Chapter 4 of Part 24 of the Corporation Tax Act 2010
are not breached, and the results are reported to the Board at each meeting.
Following authorisation under the Alternative Investment Fund Managers’
Directive as retained and onshored in the UK (AIFMD), the Company and its
appointed Alternative Investment Fund Manager (AIFM) are subject to the risks
that the requirements of the AIFMD are not correctly complied with. The Board
and the AIFM also monitor changes in government policy and legislation which
may have an impact on the Company.
Compliance with the accounting standards applicable to quoted companies and
those applicable to investment trusts are also regularly monitored to ensure
compliance.
Counterparty
Principal risk
The potential loss that the Company could incur if a counterparty is unable
(or unwilling) to perform on its commitments. The risk that a bank the Company
has deposits with will fail and the Company will not recover monies deposited
with such bank.
The Company’s investment policy also permits the use of both exchange-traded
and over-the-counter derivatives (including contracts for difference).
Mitigation/Control
Due diligence is undertaken before contracts are entered into and exposures
are diversified across a number of counterparties. The Board reviews the
controls put in place by the Investment Manager to monitor and to minimise
counterparty exposure, which include intra-day monitoring of exposures to
ensure that these are within set limits.
The Depositary is liable for restitution for the loss of financial instruments
held in custody, unless it is able to demonstrate that the loss was due to an
event beyond its reasonable control.
The creditworthiness of financial institutions is assessed by BlackRock’s
Portfolio Management Group (“PMG”) Fundamental Fixed Income Credit
Research Team prior to entering into any banking arrangements. The Company has
restricted the amount of cash which may be held with any one financial
institution, and cash balances are monitored daily and any significant surplus
cash is invested substantially in BlackRock’s UCITS compliant Cash Fund to
diversify risk.
Viability statement
The Directors have assessed the prospects of the Company over a longer period
than the 12 months referred to by the “Going Concern” guidelines.
It is proposed that the Company combines with BRSC to consolidate the
latter’s position as the largest growth focused UK Smaller Companies trust
in the investment trust sector. The combination, if approved at the general
meetings by the shareholders of both companies, will be effected by way of
reconstruction and winding up of the Company under section 110 of the
Insolvency Act 1986 (the “Scheme”) and the associated transfer of part of
the assets and undertaking of the Company to BRSC in exchange for the issue of
new ordinary shares in BRSC. The outcome of the general meetings to make the
Scheme effective represents a material uncertainty which may cast significant
doubt on the Company’s ability to continue as a going concern.
Notwithstanding this material uncertainty, the Board has concluded that it
remains appropriate to continue to prepare the financial statements on a going
concern basis. In reaching this conclusion, the Board has come to the view
that, as the Scheme is contingent on shareholder approval and the Company is
considered solvent in all other regards, there is no requirement for the
Company to be liquidated and thus going concern remains the most appropriate
basis for preparation. In reaching this conclusion, the Board has also given
due consideration to the risks associated with the Proposal.
Notwithstanding this material uncertainty, for the purpose of this viability
statement, the Board conducted this review for the period up to the AGM in
2031, being a five-year period from the date that this Annual Report will be
approved by shareholders. This is generally the investment holding period
investors consider while investing in the smaller companies’ sector. The
Board is cognisant of the uncertainty surrounding the potential duration of
the Russia/Ukraine conflict and the hostilities in the Middle East, the
imposition of tariffs and their impact on the global economy, and the
prospects for the Company’s portfolio holdings. In making its assessment the
Board has also considered the following factors:
• the Company’s principal risks as set out above;
• the impact of a significant fall in UK equity markets
on the value of the Company’s investment portfolio in the light of the
heightened volatility resulting from the ongoing Russia/Ukraine conflict, the
hostilities in the Middle East, the imposition of tariffs and any potential
impact on the global economy, and the path of inflation and interest rates in
the UK;
• the ongoing relevance of the Company’s investment
objective; and
• the level of demand for the Company’s shares.
The Directors have also considered the Company’s revenue and expense
forecasts and the fact that expenses and liabilities are relatively stable.
The Company also has a portfolio of investments which provides a level of cash
receipts in the form of dividends and which are considered to be relatively
realisable if required.
The Directors reviewed the assumptions and considerations underpinning the
Company’s existing going concern assertion (please see the disclosure in the
Directors’ Report contained within the Annual Report and Financial
Statements), which are based on:
• processes for monitoring costs;
• key financial ratios;
• evaluation of risk management and controls;
• compliance with the investment objective;
• the Company’s ability to meet its liabilities as
they fall due;
• portfolio risk profile;
• share price discount to NAV;
• gearing;
• counterparty exposure and liquidity risk;
• the operational resilience of the Company and its key
service providers and their ability to continue to provide a good level of
service for the foreseeable future; and
• the effectiveness of business continuity plans in
place for the Company and key service providers.
The Company has a relatively liquid portfolio and largely fixed overheads
(excluding any applicable performance fees) which comprise a very small
percentage of net assets 0.63% excluding performance fees, 0.51% including
performance fees in 2025. The effective performance fee cap in the event that
the NAV return exceeds the Benchmark Index return over the performance period
is circa 0.90% of the average gross assets over the two years and the
applicable percentage to be applied to the outperformance of the NAV total
return over the Benchmark Index return is 15%. In addition, the maximum cap on
total management and performance fees is 1.25% of average gross assets
(measured over a rolling two - year period). Therefore, the
Board has concluded that the Company would be able to meet its ongoing
operating costs as they fall due.
The Directors have also considered the impact of potential changes in law,
regulation and taxation and the matter of foreign exchange risk. They have
determined that although there are a number of potential risks associated with
the legal, fiscal and regulatory landscape they do not believe that this
represents a material threat to the Company’s strategy and business model,
nor do they believe that the Investment Manager will be materially impeded in
achieving the Company’s investment objective.
Based on the results of their analysis, the Directors have a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the period of their assessment.
Section 172 statement: promoting the success of BlackRock Throgmorton Trust
plc
The Companies (Miscellaneous Reporting) Regulations 2018 require directors to
explain more fully how they have discharged their duties under Section 172(1)
of the Companies Act 2006 in promoting the success of their companies for the
benefit of members as a whole. This enhanced disclosure covers how the Board
has engaged with and understands the views of stakeholders and how
stakeholders’ needs have been taken into account, the outcome of this
engagement and the impact that it has had on the Board’s decisions.
As the Company is an externally managed investment company and does not have
any employees or customers, the Board considers the main stakeholders in the
Company to be the shareholders and the key service providers (being the
Manager and Investment Manager, the Custodian, Depositary, Registrar and
Broker). The reasons for this determination, and the Board’s overarching
approach to engagement, are set out below:
Stakeholders
Shareholders
Continued shareholder support and engagement are critical to the continued
existence of the Company and the successful delivery of its long-term
strategy. The Board is focused on fostering good working relationships with
shareholders and on understanding the views of shareholders in order to
incorporate them into the Board’s strategy and objectives in delivering long
- term growth and income.
In turn, portfolio holdings are ultimately shareholders’ assets, and the
Board recognises the importance of good stewardship and communication with
investee companies in meeting the Company’s investment objective and
strategy.
Manager and Investment Manager
The Board’s main working relationship is with the Manager, who is
responsible for the Company’s portfolio management (including asset
allocation, stock and sector selection) and risk management, as well as
ancillary functions such as administration, secretarial, accounting and
marketing services. The Manager has sub-delegated portfolio management to the
Investment Manager. Successful management of shareholders’ assets by the
Investment Manager is critical for the Company to successfully deliver its
investment strategy and meet its objective. The Company is also reliant on the
Manager as AIFM to provide support in meeting relevant regulatory obligations
under the AIFMD and other relevant legislation.
Following proposals announced on 20 February 2026 for the reconstruction and
voluntary winding-up of the Company, the Company has given notice to terminate
the IMA with immediate effect from the date that an effective resolution for
the winding-up of the Company is passed and the Manager has agreed to such
termination.
Other key service providers
In order for the Company to function as an investment trust with a listing on
the premium segment of the official list of the FCA and trade on the London
Stock Exchange’s (LSE) main market for listed securities, the Board relies
on a diverse range of advisors for support in meeting relevant obligations and
safeguarding the Company’s assets. For this reason, the Board considers the
Company’s Custodian, Depositary, Registrar and Broker to be stakeholders.
The Board, either directly or through the Manager, maintains regular contact
with its key external providers and receives regular reporting from them
through the Board and Committee meetings, as well as outside of the regular
meeting cycle.
A summary of the key areas of engagement undertaken by the Board with its key
stakeholders in the year under review and how Directors have acted upon this
to promote the long-term success of the Company are set out below.
Investment mandate and objective
Issue
The Board is committed to promoting the role and success of the Company in
delivering on its investment mandate to shareholders over the long-term. The
Board also has responsibility to shareholders to ensure that the Company’s
portfolio of assets is invested in line with the stated investment objective
and in a way that ensures an appropriate balance between spread of risk and
portfolio returns.
Engagement
The Board works closely with the Investment Manager throughout the year in
further developing our investment strategy and underlying policies, not simply
for the purpose of achieving the Company’s investment objective but in the
interests of shareholders and future investors.
The Board is kept advised in respect of the Manager’s consideration of ESG
factors as part of the investment process; a summary of BlackRock’s approach
to ESG matters is set out within the Annual Report and Financial Statements.
During the year, the Board’s remained focused on the performance of the
Manager in achieving the Company's investment objective within an appropriate
risk framework. A significant amount of time was
expended in the process of reviewing strategic options for the Company,
agreeing heads of terms for combining with BRSC and drafting the requisite
documentation.
In particular, a number of key activities and decisions have been taken by the
Board during the year, as set out below:
• The Board appointed Stanhope
Consulting to assist in an extensive sector-wide review which included an
analysis of the strategies and performance of peer group companies and an
assessment of all the options available to the Company.
• The Board met with a number of key
shareholders representing 43% of the register in total to understand their
requirements and obtain feedback.
Impact
Details regarding the Company’s NAV and share price performance can be found
in the Chairman’s Statement above and in the Strategic Report contained
within the Annual Report and Financial Statements.
The portfolio activities undertaken by the Manager can be found in the
Investment Manager’s Report above.
Based on the results of the review and engagement with Shareholders, the Board
concluded that the Combination would be in Shareholders’ best interests, and
on 20 February published a circular and notices of general meetings (to be
held on 26 March 2026 and 16 April 2026) to approve the transaction.
In reaching its conclusions the Board notes that there are a
range of attractions to a combination with BRSC, including larger scale,
greater liquidity, a more competitive management fee structure (without the
performance fee) and operating charges (as compared to the Company’s average
operating charges with performance fees included over the past 5 years).
Management of the share rating
Issue
The Board believes that the best way of addressing the discount over the
longer term is to continue to generate good performance and to create demand
for the Company’s shares in the secondary market through broadening
awareness of the Company’s unique structure. The Board believes that it is
in shareholders’ interests that the share price does not trade at an
excessive premium or discount to NAV. Therefore, where deemed to be in
shareholders’ long-term interests, it may exercise its powers to issue
shares or buy back shares with the objective of ensuring that an excessive
premium or discount does not arise.
Engagement
The Manager reports total return performance statistics to the Board on a
regular basis, along with the portfolio yield and the impact of dividends paid
on brought forward distributable reserves.
The Board reviews the Company’s discount/premium to NAV on a regular basis
and holds regular discussions with the Manager and the Company’s broker
regarding the discount/premium level.
The Board believes that the best way of maintaining the share rating at an
optimal level over the long-term is to create demand for the shares in the
secondary market. To this end the Investment Manager is devoting considerable
effort to broadening the awareness of the Company, particularly to wealth
managers and to the wider retail shareholder market.
The Manager provides the Board with feedback and key performance statistics
regarding the success of the Company’s marketing initiatives.
As noted above, the Board appointed Stanhope Consulting to assist in an
extensive sector-wide review which included an analysis of the strategies and
performance of peer group companies and an assessment of all the options
available to the Company, and met with a number of key shareholders
representing 43% of the register in total to understand their requirements and
obtain feedback. A significant amount of time was expended in the process of
reviewing strategic options for the Company, agreeing heads of terms for
combining with BRSC and drafting the requisite documentation.
Impact
The average discount for the year to 30 November 2025 was 10.5%. During the
year the Company’s share price has traded between a discount of 8.1% and
13.6%.
The Board anticipates that the Combination, if approved, will bring a range of
benefits for shareholders that elect to roll their shares into BlackRock
Smaller Companies Trust plc, including larger scale, greater liquidity, a more
competitive management fee structure and lower operating charges. This in turn
should help to support demand for the shares and help them trade at closer to
NAV.
Service levels of third party providers
Issue
The Board acknowledges the importance of ensuring that the Company’s
principal suppliers are providing a suitable level of service including: the
Manager in respect of investment performance and delivering on the Company’s
investment mandate; the Depositary in respect of its duties towards
safeguarding the Company’s assets; the Registrar in its maintenance of the
Company’s share register and dealing with investor queries and the
Company’s Brokers in respect of the provision of advice and acting as a
market maker for the Company’s shares.
Engagement
The Manager reports to the Board on the Company’s performance on a regular
basis. The Board carries out a robust annual evaluation of the Manager’s
performance, their commitment and available resources.
The Board performs an annual review of the service levels of all third party
service providers and concludes on their suitability to continue in their
role.
The Board has received updates in respect of business continuity planning from
the Company’s Manager, Depositary, Fund Administrator, Brokers, Registrar
and Printers, and is confident that arrangements are in place to ensure that a
good level of service will continue to be provided.
Impact
Performance evaluations were performed on a timely basis and the Board
concluded that all third party service providers, including the Manager,
Depositary and Fund Administrator were operating effectively and providing a
good level of service.
Board composition
Issue
The Board is committed to ensuring that its own composition brings an
appropriate balance of knowledge, experience and skills, and that it is
compliant with best corporate governance practice under the UK Corporate
Governance Code, including guidance on tenure and the composition of the
Board’s committees.
Engagement
During the year the Board undertook a review of succession planning
arrangements and identified the need for action to ensure that the composition
of the Board remained appropriate and that there was an ongoing process of
refreshment, bringing in new ideas and different perspectives. The Board,
through its Nomination Committee, agreed the selection criteria and the method
of selection, recruitment and appointment. Board diversity, including factors
such as age, ethnicity, and gender, was taken into account when establishing
the criteria.
All Directors are subject to a formal evaluation process on an annual basis
(more details and the conclusions in respect of the 2025 evaluation process
are given within the Annual Report and Financial Statements). All Directors
stand for re-election by shareholders annually. Shareholders may attend the
AGM and raise any queries in respect of Board composition or individual
Directors in person or may contact the Company Secretary or the Chairman using
the details provided within the Annual Report and Financial Statements if they
wish to raise any issues.
Impact
The Directors are not aware of any issues that have been raised directly by
shareholders in respect of Board composition in 2025. Details for the proxy
voting results in favour and against individual Directors’ re-election at
the 2025 AGM are given on the Company’s website at
www.blackrock.com/uk/thrg .
It is intended that, following completion of the Scheme, Angela Lane and
Louise Nash will be appointed as non-executive Directors of the ongoing
enlarged BRSC. It is anticipated that the Board of the ongoing entity will be
compliant with the gender and diversity recommendations of the Parker Review.
Shareholders
Issue
Continued shareholder support and engagement are critical to the continued
existence of the Company and the successful delivery of its long-term
strategy.
The dividend is funded out of current year revenue and, where deemed
appropriate, may be supported from revenue reserves if current year revenue is
insufficient. The Company does not have a policy of seeking income, however,
the portfolio has, to date, continued to deliver a level of income such that
the Board is able to pay an attractive dividend.
Engagement
The Board is committed to maintaining open channels of communication and to
engaging with shareholders and welcomes and encourages attendance and
participation from shareholders at its Annual General Meetings. Shareholders
therefore have the opportunity to meet the Directors and Investment Manager
and to address questions to them directly. The Chairman and Senior Independent
Director also meet directly with shareholders providing a forum for canvassing
their views and enabling the Board to be aware of any issues of concern.
As noted above, the Board appointed Stanhope Consulting to assist in an
extensive sector-wide review which included an analysis of the strategies and
performance of peer group companies and an assessment of all the options
available to the Company, and met with a number of key shareholders
representing 43.5% of the register in total to understand their requirements
and obtain feedback. The outcome of these discussions was that the majority of
shareholders indicated support for a combination with BlackRock Smaller
Companies Trust on the basis set out in the Circular published on 20 February
2026. The Board also made available an information document to help
shareholders understand the transaction and how to vote and participate.
The Annual Report and Half Yearly Financial Report are available on the
BlackRock website and are also circulated to shareholders either in printed
copy or via electronic communications. In addition, regular updates on
performance, monthly factsheets, the daily NAV and other information are also
published on the website at
www.blackrock.com/uk/thrg .
The Board also works closely with the Manager to develop the Company’s
marketing strategy, with the aim of ensuring effective communication with
shareholders in respect of the investment mandate and objective. Unlike
trading companies, shareholder meetings usually take the form of a meeting
with the Investment Manager as opposed to members of the Board. As well as
attending regular investor meetings the Investment Manager holds regular
discussions with wealth management desks and offices to build on the case for,
and understanding of, long-term investment opportunities in the UK smaller
companies’ sector.
However, the Board is ultimately responsible for communication with
shareholders and all substantive matters arising from such communication are
referred to the Board.
The Manager also coordinates public relations activity, including meetings
between the Investment Manager and relevant industry publications to set out
their vision for the portfolio strategy and outlook for the UK equity market.
The Manager releases the daily NAV and monthly portfolio updates to the market
to ensure that investors are kept up to date in respect of performance and
other portfolio developments and maintains a website on behalf of the Company
that contains relevant information in respect of the Company’s investment
mandate and objective. If shareholders wish to raise issues or concerns with
the Board, they are welcome to do so at any time.
The Chairman is available to meet directly with shareholders periodically to
understand their views on governance and the Company’s performance where
they wish to do so. He may be contacted via the Company Secretary whose
details are provided within the Annual Report and Financial Statements.
Impact
The feedback from shareholders in respect of the proposal to combine with
BlackRock Smaller Companies Trust plc resulted in the publication of a
circular on 20 February 2026 and notice of a general meeting to approve this
combination. The Board anticipates that the Combination,
if approved, will bring a range of benefits for shareholders. These include
the ability to realise cash at close to NAV (for up to 38% of issued share
capital). Shareholders that choose to roll into the ongoing and enlarged BRSC
will benefit from larger scale, greater liquidity, a more competitive
management fee structure and lower operating charges.
Feedback from all substantive meetings between the Investment Manager and
shareholders will be shared with the Board. The Directors will also receive
updates from the Company’s broker on any feedback from shareholders, as well
as share trading activity, share price performance and an update from the
Investment Manager.
The Investment Manager attended professional investor meetings and held
discussions with a range of different wealth management desks and offices in
respect of the Company during the year under review. Investors were also
impressed with the wide pool of resource available through BlackRock’s
Emerging Companies team, and the rigorous ‘bottom-up’ investment approach.
Responsible Investing
Issue
Consideration of material Environmental, Social and Governance (ESG)
information and sustainability risks are considered when making investment
decisions. Sustainability-related risks, including climate-related risks, are
becoming a defining factor in companies’ long-term prospects across the
investment spectrum, with significant and lasting implications for economic
growth and prosperity.
BlackRock’s reporting and disclosures
In terms of its own reporting, BlackRock believes that the Sustainability
Accounting Standards Board provides a clear set of standards for reporting
sustainability information across a wide range of issues, from labour
practices to data privacy to business ethics. For evaluating and reporting
climate-related risks, as well as the related governance issues that are
essential to managing them, the Task Force on Climate-related Financial
Disclosures (TCFD) provides a valuable framework. BlackRock recognises that
reporting to these standards requires significant time, analysis, and effort.
BlackRock’s 2024 TCFD report can be found at
www.blackrock.com/corporate/literature/continuous-disclosure-and-important-information/climate-report-blkinc.pdf
.
Future prospects
The Board’s main focus is on the achievement of capital growth and the
future of the Company is dependent upon the success of the investment
strategy. The outlook for the Company is discussed in the Chairman’s
Statement and in the Investment Manager’s Report above.
Social, community and human rights issues
As an investment trust, the Company has no direct social or community
responsibilities. However, the Company believes that it is in shareholders’
interests to consider human rights issues, and environmental, social and
governance factors when selecting and retaining investments. Details of the
Company’s approach to socially responsible investment is set out above and
contained within the Annual Report and Financial Statements.
Modern Slavery Act
As an investment vehicle the Company does not provide goods or services in the
normal course of business and does not have customers. Accordingly, the
Directors consider that the Company is not required to make any slavery or
human trafficking statement under the Modern Slavery Act 2015. The Board
considers the Company’s supply chain, dealing predominantly with
professional advisers and service providers in the financial services
industry, to be low risk in relation to this matter.
Directors, gender representation and employees
The Directors of the Company on 30 November 2025, all of whom held office
throughout the year, are set out within the Annual Report and Financial
Statements. The Board recognises the importance of having a range of
experienced Directors who, both individually and collectively, possess a
suitable balance of skills, knowledge, independence and diversity to enable it
to fulfil its obligations. As at 30 November 2025, the Board consisted of two
men and three women, resulting in 60% female representation. The Company has
no employees, and all of its Directors are non-executive. Therefore, there are
no disclosures to be made in respect of employees.
The Chairman’s Statement and the Investment Manager’s Report above form
part of this Strategic Report.
The Strategic Report was approved by the Board at its meeting on 27 February
2026.
By order of the Board
Kevin Mayger
for and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
27 February 2026
Related party and transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and
administration services to the Company under a contract which is terminable on
six months’ notice. BFM 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)). Further details of
the investment management contract are disclosed in the Directors’ Report
contained within the Annual Report and Financial Statements.
The investment management fee due for the year ended 30 November 2025 amounted
to £2,179,000 (2024: £2,575,000). At the year end, £545,000 (2024:
£1,906,000) was outstanding in respect of management fees.
The performance fee payable for the year ended 30 November 2025 amounted to
£nil (2024: £2,982,000). The accrual of £625,000 which was accrued in the
prior year and related to two-year period ended 30 November 2025 has been
written back due to the reduction in outperformance for the period (2024:
accrual of £3,607,000) and is calculated as follows:
• For the annualised rolling two-year performance
period to 30 November 2025, the Company has underperformed the benchmark by
5.2% as at 30 November 2025. As a result, an amount of £625,000 has been
written back from the performance fee accrued in the prior period.
• For the annualised rolling two-year performance
period to 30 November 2026, the Company has underperformed the benchmark by
5.3% as at 30 November 2025. No performance fee relating to this performance
period has been accrued at the date of this report.
In addition to the above services, BIM (UK) has provided marketing services.
The total fees paid or payable for these services for the year ended 30
November 2025 amounted to £159,000 excluding VAT (2024: £175,000). Marketing
fees of £124,000 (2024: £124,000) were outstanding at the year end.
The Company has an investment in the BlackRock Institutional Cash Series plc -
Sterling Liquid Environmentally Aware Fund of £26,793,000 (2024:
£43,477,000) which for the year ended 30 November 2025 and 30 November 2024
has been presented in the financial statements as a cash equivalent.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware USA.
As at 30 November 2025, the Board consisted of five non-executive Directors,
all of whom were considered to be independent by the Board*. None of the
Directors has a service contract with the Company. For the year ended 30
November 2025, the Chairman received an annual fee of £50,250, the Chairman
of the Audit and Management Engagement Committee received an annual fee of
£40,000, the Senior Independent Director received an
annual fee of £36,100 and each other Director received an annual fee of
£34,100. With effect from 1 December 2025 the Chairman
will receive an annual fee of £52,500, the Chairman of the Audit and
Management Engagement Committee will receive an annual fee of £41,800, the
Senior Independent Director will receive an annual fee of £37,700 and each
other Director will receive an annual fee of £35,600.
As at 30 November 2025, all members of the Board held shares in the Company.
James Will held 10,000 ordinary shares, Louise Nash held 5,500 ordinary
shares, Angela Lane held 11,899 ordinary shares, Nigel Burton held 17,583
ordinary shares and Merryn Somerset Webb held 3,954 ordinary shares.
All of the holdings of the Directors are beneficial. Since the year end there
have been no further changes to the Directors’ share interests.
Statement of Directors’ responsibilities in respect of the Annual Report and
Financial Statements
The Directors are responsible for preparing the Annual Report and Financial
Statements, (including the Directors’ Remuneration Report) in accordance
with applicable United Kingdom law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors are required to prepare the
financial statements in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006. Under company law
the Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing these Financial Statements, the Directors are required to:
• present fairly the financial position, financial
performance and cash flows of the Company;
• select suitable accounting policies in accordance
with IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and
Errors’ and then apply them consistently;
• present information, including accounting policies,
in a manner that provides relevant, reliable, comparable and understandable
information;
• make judgements and estimates that are reasonable and
prudent;
• state whether the Financial Statements have
been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, subject to any
material departures disclosed and explained in the Financial Statements;
• provide additional disclosures when compliance with
the specific requirements in international accounting standards in conformity
with the requirements of the Companies Act 2006, is insufficient to enable
users to understand the impact of particular transactions, other events and
conditions on the Company’s financial position and financial performance;
and
• prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities. The Directors are also responsible for
preparing the Strategic Report, the Directors’ Report, the Directors’
Remuneration Report and the Corporate Governance Statement in accordance with
the Companies Act 2006 and applicable regulations, including the requirements
of the Listing Rules and the Disclosure Guidance and Transparency Rules. The
Directors have delegated responsibility to the Investment Manager and the AIFM
for the maintenance and integrity of the Company’s corporate and financial
information included on BlackRock’s website. Legislation in the United
Kingdom governing the preparation and dissemination of Financial Statements
may differ from legislation in other jurisdictions.
Each of the Directors, whose names are listed within the Annual Report and
Financial Statements, confirms to the best of his or her knowledge that:
• the Financial Statements, which have been prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006, give a true and fair view of the
assets, liabilities, financial position and net loss of the Company; and
• the Annual Report and Financial Statements include a
fair review of the development and performance of the business and the
position of the Company, together with a description of the principal risks
and uncertainties that it faces.
The 2018 UK Corporate Governance Code also requires Directors to ensure that
the Annual Report and Financial Statements are fair, balanced and
understandable. In order to reach a conclusion on this matter, the Board has
requested that the Audit Committee advise on whether it considers that the
Annual Report and Financial Statements fulfil these requirements. The process
by which the Committee has reached these conclusions is set out in the Audit
Committee’s report contained within the Annual Report and Financial
Statements. As a result, the Board has concluded that the Annual Report and
Financial Statements for the year ended 30 November 2025, taken as a whole,
are fair, balanced and understandable and provided the information necessary
for shareholders to assess the Company’s position, performance, business
model and strategy.
For and on behalf of the Board
JAMES WILL
Chairman
27 February 2026
Statement of Comprehensive Income
for the year ended 30 November 2025
2025 2024
Notes Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Income from investments held at fair value through profit or loss 3 13,762 18 13,780 16,070 518 16,588
Net income from derivatives 3 252 – 252 1,024 – 1,024
Other income 3 1,571 – 1,571 1,569 – 1,569
========= ========= ========= ========= ========= =========
Total income 15,585 18 15,603 18,663 518 19,181
========= ========= ========= ========= ========= =========
Net (loss)/profit on investments held at fair value through profit or loss – (11,294) (11,294) – 59,598 59,598
Net profit/(loss) on foreign exchange – 13 13 – (61) (61)
Net (loss)/profit from derivatives – (10,644) (10,644) – 12,839 12,839
========= ========= ========= ========= ========= =========
Total 15,585 (21,907) (6,322) 18,663 72,894 91,557
========= ========= ========= ========= ========= =========
Expenses
Investment management and performance fees 4 (544) (1,010) (1,554) (644) (3,524) (4,168)
Other operating expenses 5 (1,001) (26) (1,027) (922) (21) (943)
========= ========= ========= ========= ========= =========
Total operating expenses (1,545) (1,036) (2,581) (1,566) (3,545) (5,111)
========= ========= ========= ========= ========= =========
Net profit/(loss) before finance costs and taxation 14,040 (22,943) (8,903) 17,097 69,349 86,446
Finance costs (17) (51) (68) (24) (73) (97)
========= ========= ========= ========= ========= =========
Net profit/(loss) before taxation 14,023 (22,994) (8,971) 17,073 69,276 86,349
========= ========= ========= ========= ========= =========
Taxation charge (74) – (74) (27) – (27)
========= ========= ========= ========= ========= =========
Net profit/(loss) for the year 13,949 (22,994) (9,045) 17,046 69,276 86,322
========= ========= ========= ========= ========= =========
Earnings/(loss) per ordinary share (pence) 7 17.70 (29.18) (11.48) 18.54 75.37 93.91
========= ========= ========= ========= ========= =========
The total columns of this statement represent the Company’s Statement of
Comprehensive Income, prepared in accordance with UK-adopted International
Accounting Standards (IASs). 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 year. All
income is attributable to the equity holders of the Company.
The Company does not have any other comprehensive income/(loss) (2024: £nil).
The net profit/(loss) for the year disclosed above represents the Company’s
total comprehensive income/(loss).
Statement of Changes in Equity
for the year ended 30 November 2025
Notes Called up share capital Share premium account Capital redemption reserve Special reserve Capital reserves Revenue reserve Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
For the year ended 30 November 2025
At 30 November 2024 5,160 242,122 11,905 – 316,033 20,688 595,908
Total comprehensive (loss)/income:
Net (loss)/profit for the year – – – – (22,994) 13,949 (9,045)
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury 8,9 – – – (14,145) (56,321) – (70,466)
Share repurchase costs 8,9 – – – – (367) – (367)
Cancellation of share premium 1 – (242,122) – 242,122 – – –
Dividends paid 2 6 – – – – – (14,412) (14,412)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 November 2025 5,160 – 11,905 227,977 236,351 20,225 501,618
========= ========= ========= ========= ========= ========= =========
For the year ended 30 November 2024
At 30 November 2023 5,160 242,122 11,905 3,231 295,624 17,883 575,925
Total comprehensive income:
Net profit for the year – – – – 69,276 17,046 86,322
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury 8,9 – – – (3,213) (48,620) – (51,833)
Share repurchase costs 8,9 – – – (18) (247) – (265)
Dividends paid 3 6 – – – – – (14,241) (14,241)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 November 2024 5,160 242,122 11,905 – 316,033 20,688 595,908
========= ========= ========= ========= ========= ========= =========
1 The Company’s share premium account was cancelled
pursuant to shareholders’ approval of a special resolution at the
Company’s Annual General Meeting on 25 March 2025 and Court approval on 29
April 2025. The share premium account which totalled £242,122,000 at the time
of cancellation was transferred to a special reserve. This action was taken,
in part, to increase the Company’s distributable reserves, thereby providing
a greater ability to pay dividends and repurchase shares.
2 Final dividend of 14.25p per share for the year ended
30 November 2024, declared on 20 February 2025 and paid on 11 April 2025 and
interim dividend of 3.80p per share for the year ended 30 November 2025,
declared on 1 August 2025 and paid on 5 September 2025.
3 Final dividend of 11.45p per share for the year ended
30 November 2023, declared on 2 February 2024 and paid on 28 March 2024 and
interim dividend of 3.75p per share for the year ended 30 November 2024,
declared on 24 July 2024 and paid on 27 August 2024.
For information on the Company’s distributable reserves please refer to note
15 contained within the Annual Report and Financial Statements.
Statement of Financial Position
as at 30 November 2025
2025 2024
Notes £’000 £’000
Non current assets
Investments held at fair value through profit or loss 474,824 557,602
========= =========
Current assets
Other receivables 2,182 1,536
Derivative financial assets held at fair value through profit or loss 10 28 2,173
Current taxation asset 187 400
Cash collateral pledged with brokers 10 3,200 700
Cash and cash equivalents – cash at bank 10 890 412
Cash and cash equivalents - Cash Fund 1 10 26,793 43,477
--------------- ---------------
Total current assets 33,280 48,698
========= =========
Total assets 508,104 606,300
========= =========
Current liabilities
Other payables (3,598) (8,262)
Derivative financial liabilities held at fair value through profit or loss 10 (1,298) (360)
Liability for cash collateral received 10 (1,590) (1,770)
--------------- ---------------
Total current liabilities (6,486) (10,392)
========= =========
Net assets 501,618 595,908
========= =========
Equity
Called up share capital 8 5,160 5,160
Share premium account 9 – 242,122
Capital redemption reserve 9 11,905 11,905
Special reserve 9 227,977 –
Capital reserves 9 236,351 316,033
Revenue reserve 9 20,225 20,688
--------------- ---------------
Total shareholders’ funds 501,618 595,908
========= =========
Net asset value per ordinary share (pence) 7 668.53 682.82
========= =========
1 Cash Fund represents funds held on deposit
with the BlackRock Institutional Cash Series plc – Sterling Liquid
Environmentally Aware Fund.
Cash Flow Statement
for the year ended 30 November 2025
2025 2024
£’000 £’000
Operating activities
Net (loss)/profit before taxation 1 (8,971) 86,349
Changes in working capital items:
(Increase)/decrease in other receivables (327) 63
(Decrease)/increase in other payables (5,007) 1,499
(Increase)/decrease in amounts due from brokers (319) 681
Increase/(decrease) in amounts due to brokers 343 (734)
Other adjustments:
Finance costs 68 97
Net loss/(profit) on investments held at fair value through profit or loss 11,294 (59,598)
Net loss/(profit) from derivatives 10,644 (12,839)
Financing costs on derivatives (2,516) (3,230)
Net (profit)/loss on foreign exchange (13) 61
Sales of investments held at fair value through profit or loss 361,139 310,643
Purchases of investments held at fair value through profit or loss (289,655) (251,053)
Net (payments)/receipts on closure of derivatives (5,045) 13,505
Net movement in cash collateral held with brokers (2,680) 1,225
--------------- ---------------
Net cash inflow from operating activities before taxation 68,955 86,669
========= =========
Taxation received/(paid) 139 (62)
--------------- ---------------
Net cash inflow from operating activities 69,094 86,607
========= =========
Financing activities
Interest paid (68) (97)
Ordinary shares repurchased into treasury (70,833) (52,341)
Dividends paid (14,412) (14,241)
--------------- ---------------
Net cash outflow from financing activities (85,313) (66,679)
========= =========
(Decrease)/increase in cash and cash equivalents (16,219) 19,928
Effect of foreign exchange rate changes 13 (61)
========= =========
Change in cash and cash equivalents (16,206) 19,867
Cash and cash equivalents at start of year 43,889 24,022
--------------- ---------------
Cash and cash equivalents at end of year 27,683 43,889
========= =========
Comprised of:
Cash at bank 890 412
Cash Fund 2 26,793 43,477
--------------- ---------------
27,683 43,889
========= =========
1 Dividends and interest received in cash during the year
amounted to £13,057,000 and £1,675,000 respectively (2024: £15,643,000 and
£1,459,000).
2 Cash Fund represents funds held on deposit with the
BlackRock Institutional Cash Series plc – Sterling Liquid Environmentally
Aware Fund.
Notes to the Financial Statements
for the year ended 30 November 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.
2. Accounting policies
The principal accounting policies adopted by the Company have been applied
consistently, other than where new policies have been adopted and are set out
below.
(a) Basis of
preparation
The financial statements have been prepared under the historic cost convention
modified by the revaluation of certain financial assets and financial
liabilities held at fair value through profit or loss and in accordance with
UK-adopted International Accounting Standards (IAS), with future changes being
subject to endorsement by the UK Endorsement Board and with the requirements
of the Companies Act 2006 as applicable to companies reporting under those
standards. All of the Company’s operations are of a continuing nature.
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
the guidance set out in the SORP.
It is proposed that the Company combines with BlackRock Smaller Companies
Trust plc (BRSC) to consolidate the latter company’s position as the largest
growth focused UK Smaller Companies trust in the investment trust sector. The
combination, if approved at the general meetings by the shareholders of both
the Company and BRSC, will be effected by way of reconstruction and winding up
of the Company under section 110 of the Insolvency Act 1986 (the “Scheme”)
and the associated transfer of part of the assets and undertaking of the
Company to BRSC in exchange for the issue of new ordinary shares in BRSC. The
outcome of the general meetings to make the Scheme effective cannot be
reasonably predicted. This represents a material uncertainty which may cast
significant doubt on the Company’s ability to continue as a going concern.
Notwithstanding this material uncertainty, the Board has concluded that it
remains appropriate to continue to prepare the financial statements on a going
concern basis. In reaching this conclusion, the Board has come to the view
that, as the Scheme is contingent on shareholder approval and the Company is
considered solvent in all other regards, there is no requirement for the
Company to be liquidated and thus going concern remains the most appropriate
basis for preparation. In reaching this conclusion, the Board has also given
due consideration to the risks associated with the Proposal.
The financial statements do not include liquidation expenses and related
adjustments that would result if the company were unable to continue as a
going concern.
The Directors have considered the impact of climate change on the value of the
investments included in the Financial Statements and have concluded that there
was no further impact of climate change to be considered as the investments
are valued based on market pricing as required by IFRS 13.
None of the Company’s other assets and liabilities were considered to be
potentially impacted by climate change. The Company’s Financial Statements
are presented in Sterling, which is the functional currency of the Company and
the currency of the primary economic environment in which the Company
operates. All values are rounded to the nearest thousand pounds (£’000)
except where otherwise indicated.
Adoption of new and amended International Accounting Standards and
interpretations:
IAS 1 – Classification of liabilities as current or non current and non
current liabilities with covenants (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. The IASB has also
introduced 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 this standard did not have any significant impact on the
Company.
IAS 21 - Lack of exchangeability (effective 1 January 2025 - early adopted
from 1 October 2024). 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.
The amendment of this standard did not have any significant impact on the
Company’s operations as IAS 21 better reflects the practical considerations
of establishing fair values for the Company’s foreign currency assets.
Relevant International Accounting Standards that have yet to be adopted:
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.
The amendment of this standard is expected to have an impact on the disclosure
and presentation of the Statement of Comprehensive Income but will not have
any impact on the accounting or financial results.
(b) Presentation of the Statement of Comprehensive Income
In order to better reflect the activities of an investment trust company and
in accordance with guidance issued by the AIC, supplementary information which
analyses the Statement of Comprehensive Income between items of a revenue and
a capital nature has been presented alongside the Statement of Comprehensive
Income.
(c) Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business being investment business.
(d) Income
Dividends receivable on equity shares are recognised as revenue for the year
on an ex-dividend basis. Where no ex-dividend date is available, dividends
receivable on or before the year end are treated as revenue for the year.
Provision is made for any dividends not expected to be received. Special
dividends, if any, are treated as a capital or a revenue receipt depending on
the facts or circumstances of each particular case. The return on a debt
security is recognised on a time apportionment basis so as to reflect the
effective yield on the debt security.
Deposit interest receivable is accounted for on an accruals basis. Interest
income from the Cash Fund is accounted for on an accruals basis.
Where the Company has elected to receive its dividends in the form of
additional shares rather than in cash, the cash equivalent of the dividend is
recognised as income. Any excess in the value of the shares received over the
amount of the cash dividend is recognised in capital.
(e) Expenses
All expenses, including finance costs, are accounted for on an accruals basis.
Expenses have been charged wholly to the revenue column of the Statement of
Comprehensive Income, except as follows:
• expenses which are incidental to the acquisition or
sale of an investment are charged to the capital column of the Statement of
Comprehensive Income. Details of transaction costs on the purchases and sales
of investments are disclosed within note 10 to the Financial Statements
contained within the Annual Report and Financial Statements;
• expenses are treated as capital where a connection
with the maintenance or enhancement of the value of the investments can be
demonstrated;
• the investment management fee and finance costs have
been allocated 25% to the revenue account and 75% to the capital account
column of the Statement of Comprehensive Income in line with the Board’s
expected long term split of returns, in the form of capital gains and income,
respectively, from the investment portfolio; and
• performance fees are allocated 100% to the capital
column of the Statement of Comprehensive Income as fees are generated in
connection with enhancing the value of the investment portfolio.
(f) Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on the taxable profit for the year.
Taxable profit differs from net profit as reported in the Statement of
Comprehensive Income because it excludes items of income or expenses that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Company’s liability for current tax is
calculated using tax rates that were applicable at the balance sheet date.
Where expenses are allocated between capital and revenue accounts, any tax
relief in respect of expenses is allocated between capital and revenue returns
on the marginal basis using the Company’s effective rate of corporation tax
for the accounting period.
Deferred taxation is recognised in respect of all temporary differences that
have originated but not reversed at the financial reporting date, where
transactions or events that result in an obligation to pay more taxation in
the future or right to pay less taxation in the future have occurred at the
financial reporting date. This is subject to deferred taxation assets only
being recognised if it is considered more likely than not that there will be
suitable profits from which the future reversal of the temporary differences
can be deducted. Deferred taxation assets and liabilities are measured at the
rates applicable to the legal jurisdictions in which they arise.
(g) Investments held at fair value through profit or loss
In accordance with IFRS 9, the Company classifies its investments at initial
recognition as held at fair value through profit or loss and are managed and
evaluated on a fair value basis in accordance with its investment strategy and
business model.
All investments are measured initially and subsequently at fair value through
profit or loss. Purchases of investments are recognised on a trade date basis.
Sales of investments are recognised at the trade date of the disposal.
The fair value of the financial investments is based on their quoted bid price
at the financial reporting date, without deduction for the estimated selling
costs. This policy applies to all current and non-current asset investments
held by the Company.
Changes in the value of investments held at fair value through profit or loss
and gains and losses on disposal are recognised in the Statement of
Comprehensive Income as “Net profit/(loss) on investments held at fair value
through profit or loss”. Also included within the heading are transaction
costs in relation to the purchase or sale of investments.
For all financial instruments not traded in an active market, the fair value
is determined by using various valuation techniques. Valuation techniques
include market approach (i.e., using recent arm’s length market transactions
adjusted as necessary and reference to the current market value of another
instrument that is substantially the same) and the income approach (e.g.,
discounted cash flow analysis and option pricing models making use of
available and supportable market data where possible). See note 2(o) below.
(h) Derivatives
The Company can hold long and short positions in contracts for difference
(CFDs) and index futures which are held at fair value based on the bid prices
of the underlying securities in respect of long positions and the offer prices
of the underlying securities in respect of short positions.
Profits and losses on derivative transactions are recognised in the Statement
of Comprehensive Income. They are shown in the capital column of the Statement
of Comprehensive Income if they are of a capital nature and are shown in the
revenue column of the Statement of Comprehensive Income if they are of a
revenue nature. To the extent that any profits or losses are of a mixed
revenue and capital nature, they are apportioned between revenue and capital
accordingly. Derivative assets and derivative liabilities that are subject to
netting arrangements are offset in the Statement of Financial Position.
(i) Other receivables and other payables
Other receivables and other payables do not carry any interest and are short
term in nature and are accordingly stated on an amortised cost basis.
(j) Dividends payable
Under IAS, final dividends should not be accrued in the Financial Statements
unless they have been approved by shareholders before the financial reporting
date. Interim dividends should not be recognised in the Financial Statements
unless they have been paid.
Dividends payable to equity shareholders are recognised in the Statement of
Changes in Equity.
(k) Foreign currency translation
Transactions involving foreign currencies are converted at the rate ruling at
the date of the transaction. Foreign currency monetary assets and liabilities
and non-monetary assets held at fair value are translated into Sterling at the
rate ruling on the financial reporting date. Foreign exchange differences
arising on translation are recognised in the Statement of Comprehensive Income
as a revenue or capital item depending on the income or expense to which they
relate. For investment transactions and investments held at the year end,
denominated in a foreign currency, the resulting gains or losses are included
in the gain on investments held at fair value through profit or loss in the
Statement of Comprehensive Income.
(l) Cash and cash equivalents
Cash comprises cash in hand and on demand deposits. Cash equivalents are short
term, highly liquid investments that are readily convertible to known amounts
of cash and that are subject to an insignificant risk of changes in value.
The investment in the Cash Fund is managed as part of the Company’s cash and
cash equivalents as defined under IAS 7 and is presented as a cash equivalent
in the Financial Statements.
(m) Bank borrowings
Bank overdrafts are recorded as the proceeds received. Finance charges,
including any premium payable on settlement or redemption and direct issue
costs, are accounted for on an accruals basis in the Statement of
Comprehensive Income using the effective interest rate method and are added to
the carrying amount of the instruments to the extent that they are not settled
in the period in which they arise.
(n)
Share repurchases, share reissues and new share issues
Shares repurchased and subsequently cancelled – share capital is reduced by
the nominal value of the shares repurchased, and the capital redemption
reserve is correspondingly increased in accordance with Section 733 of the
Companies Act 2006. The full cost of the repurchase is charged to the special
reserve.
Shares repurchased and held in treasury – the full cost of the repurchase is
charged to the special reserve.
Where treasury shares are subsequently re-issued:
• amounts received to the extent of the repurchase
price are credited to the special reserve; and
• any surplus received in excess of the repurchase
price is taken to the share premium account.
Where new shares are issued, the par value is taken to called up share capital
and amounts received to the extent of any surplus received in excess of the
par value are taken to the share premium account.
Share issue costs are charged to the share premium account. Costs on share
reissues are charged to the special reserve and capital reserves.
(o) Critical accounting estimates and judgements
The Directors of the Company make estimates and assumptions concerning the
future. The resulting accounting estimates and assumptions will, by
definition, seldom equal the related actual results. Estimates and judgements
are regularly evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances. The Directors do not believe that any
accounting judgements or estimates have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities within
the next financial year. There are no critical accounting estimates or
judgements .
3. Income
2025 2024
£’000 £’000
Investment income:
UK dividends 10,414 12,887
UK special dividends 592 575
UK property income distributions 298 803
Dividends from UK REITs 1 538 169
Overseas dividends 1,058 1,346
Overseas special dividends 605 –
Overseas property income distributions – 118
Dividends from overseas REITs 1 257 172
--------------- ---------------
Total investment income 2 13,762 16,070
========= =========
Net income from derivatives 252 1,024
========= =========
Total income from derivatives 252 1,024
========= =========
Other income:
Deposit interest 10 14
Interest from Cash Fund 1,489 1,530
Collateral interest 72 25
--------------- ---------------
Total other income 1,571 1,569
========= =========
Total income 15,585 18,663
========= =========
1 REITs – real estate investment trusts.
2 UK and overseas dividends are presented based on the
country of domicile of the respective underlying portfolio company.
Special dividends of £18,000 have been recognised in capital during the year
(2024: £518,000).
4. Investment management and performance fees
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 544 1,635 2,179 644 1,931 2,575
Performance fee (write back)/expense – (625) (625) – 1,593 1,593
--------------- --------------- --------------- --------------- --------------- ---------------
Total 544 1,010 1,554 644 3,524 4,168
========= ========= ========= ========= ========= =========
Investment management fee
The investment management fee is calculated at the rate of 0.35% per annum on
month end Gross Assets. For the purposes of this note, Gross Assets are
defined as the value of the portfolio of the Company, including uninvested
cash, with the portfolio valuation based on value at risk (with value at risk
being the gross asset value of the long-only portfolio plus the gross value of
the underlying equities, long and short, to which the Company is exposed
through derivatives including CFDs and index futures). The investment
management fee is charged 25% to the revenue account and 75% to the capital
account of the Statement of Comprehensive Income. There is no additional fee
for company secretarial and administration services.
Performance fee
The performance fee is calculated at the rate of 15% of the outperformance of
the Company. For the purpose of this note, outperformance is defined as the
amount by which the annualised percentage Net Asset Value total return of the
Company arithmetically exceeds the annualised percentage return of the
Benchmark Index, measured over a rolling two-year performance period. This
rate is applied to the average Gross Assets, in that rolling two-year
performance period. Outperformance is the amount by which the Net Asset Value
total return arithmetically exceeds the Benchmark Index total return.
There is a cap on the annual total management and performance fees of 1.25%
per financial year of the average Gross Assets over the rolling two-year
performance period (the “Cap” or “Capped Amount”) which has the effect
of capping the annual performance fees at circa 0.9% of average Gross Assets
and which means that the performance fee from any performance period will not
exceed 0.9% of average Gross Assets for the relevant performance period.
The performance fee is calculated daily for the rolling two-year performance
period ending 30 November 2025 and the rolling two-year performance period
ending 30 November 2026, and accruals are made in the NAV subject to the Cap.
The performance fee is payable on 30 November each year in relation to the
rolling two-year performance period ending on that date. The accrual is
calculated applying the following assumptions:
• The Benchmark Index remains unchanged;
• The Net Asset Value total return performs in line
with the Benchmark Index total return for the remainder of the respective
rolling two-year performance periods ending 30 November 2025 and 30 November
2026; and
• The future value of Gross Assets for performance fee
purposes is the same at the balance sheet date.
The amount of outperformance on which a performance fee has not been paid in a
financial year due to the application of the Cap will be carried forward to
offset against future shortfall returns. As at 1 December 2025, the carried
forward unpaid net underperformance was 0.4% (1 December 2024: net
outperformance available to offset against future shortfall returns of 4.8%).
On the first day of the financial year, due to the application of the Cap in
the prior financial year, any performance fee for the ongoing rolling two-year
performance period not yet recognised is accrued in the daily NAV released to
the London Stock Exchange on that day.
Performance fees have been wholly allocated to the capital account of the
Statement of Comprehensive Income as the performance has been predominantly
generated through capital returns from the investment portfolio. The
performance fee accrual at 30 November 2024 of £3,607,000 for the rolling
two-year periods included an amount of £2,982,000 crystallised for the period
ended 30 November 2024 and £625,000 accrued for the period ended 30 November
2025. As at 30 November 2025, the accrual of £625,000 has been written back
due to a reduction in outperformance for the period ended 30 November 2025
(2024: accrual of £3,607,000) and is calculated as follows:
• For the annualised rolling two-year performance
period to 30 November 2025, the Company has underperformed the benchmark by
5.2% as at 30 November 2025. As a result, an amount of £625,000 has been
written back from the amount of performance fee accrued in the prior period.
• For the annualised rolling two-year performance
period to 30 November 2026, the Company has underperformed the benchmark by
5.3% as at 30 November 2025. No performance fee relating to this performance
period has been accrued at the date of this report.
Termination of the Investment Management Agreement
Following proposals announced on 20 February 2026 for the reconstruction and
voluntary winding-up of the Company, the Company has given notice to terminate
the IMA with immediate effect from the date that an effective resolution for
the winding-up of the Company is passed and the Manager has agreed to such
termination. The base management fee shall immediately
cease to accrue as from the date on which the Winding-Up Resolution is passed,
no Performance Fee shall become payable on the passing of the Winding-Up
Resolution. The Manager has waived any further
entitlement to any management fee or reimbursement of expenses under the IMA
from the date of the Winding-Up Resolution.
5. Other operating expenses
2025 2024
£’000 £’000
Allocated to revenue:
Custody fee 6 7
Auditor’s remuneration 1 69 70
Registrar’s fee 57 44
Directors’ emoluments 2 202 211
Broker fees 61 48
Depositary fees 59 70
Marketing fees 159 175
FCA fees 32 29
Printing and postage fees 75 55
Directors’ search fees – 51
Directors’ evaluation fees – 30
AIC fees 24 22
Stock exchange listing fees 37 36
Write back of prior year expenses 3 (23) (27)
Other administrative costs 243 101
--------------- ---------------
Total revenue expenses 1,001 922
========= =========
Allocated to capital:
Custody transaction charges 4 26 21
--------------- ---------------
Total capital expenses 26 21
========= =========
Total 1,027 943
========= =========
2025 2024
Ongoing charges (excluding performance fees) 5 0.63% 0.56%
Ongoing charges (including performance fees) 6 0.51% 0.82%
========= =========
1 No non-audit services were provided by the Company’s
auditors.
2 Further information on Directors’ emoluments can be
found in the Directors’ Remuneration Report contained within the Annual
Report and Financial Statements. The Company has no employees.
3 Relates to printing and postage fees and other
administrative costs written back during the year (2024: Directors’
recruitment fees, miscellaneous fees and postage fees).
4 For the year ended 30 November 2025, expenses of
£26,000 (2024: £21,000) were charged to the capital account of the Statement
of Comprehensive Income. These relate to transaction costs charged by the
Custodian on sale and purchase trades.
5 The Company’s ongoing charges calculated as a
percentage of average daily net assets and using the management fee and all
other operating expenses, excluding performance fees, finance costs, direct
transaction costs, custody transaction charges, VAT recovered, taxation, prior
year expenses written back and certain non-recurring items. Alternative
Performance Measure, see Glossary contained within the Annual Report and
Financial Statements.
6 The Company’s ongoing charges calculated as
a percentage of average daily net assets and using the management fee and all
other operating expenses, including performance fees, finance costs, direct
transaction costs, custody transaction charges, VAT recovered, taxation, prior
year expenses written back and certain non-recurring items. Alternative
Performance Measure, see Glossary contained within the Annual Report and
Financial Statements.
6. Dividends
2025 2024
Dividends paid on equity shares: Record date Payment date £’000 £’000
Final dividend of 14.25p per share for the year ended 30 November 2024 (2023: 11.45p) 28 February 2025 11 April 2025 11,514 10,841
Interim dividend of 3.80p per share for the year ended 30 November 2025 (2024: 3.75p) 15 August 2025 5 September 2025 2,898 3,400
--------------- ---------------
Accounted for in the financial statements 14,412 14,241
========= =========
The total dividends payable in respect of the year ended 30 November 2025
which form the basis of Section 1158 of the Corporation Tax Act 2010 and
Section 833 of the Companies Act 2006, and the amounts proposed, meet the
relevant requirements as set out in this legislation.
2025 2024
Dividends paid or declared on equity shares: £’000 £’000
Interim dividend of 3.80p per share for the year ended 30 November 2025 (2024: 3.75p) 2,898 3,400
Second interim dividend of 15.20p per share for the year ended 30 November 2025 1 (2024: 14.25p) 11,405 11,603
--------------- ---------------
Total for the year 14,303 15,003
========= =========
1 Based on 75,033,364 ordinary shares in issue on 25
February 2026.
7. Earnings/(loss) and net asset value per ordinary share
Revenue, capital earnings/(loss) and net asset value per ordinary share are
shown below and have been calculated using the following:
Year ended Year ended
30 November 2025 30 November 2024
Net revenue profit attributable to ordinary shareholders (£’000) 13,949 17,046
Net capital (loss)/profit attributable to ordinary shareholders (£’000) (22,994) 69,276
--------------- ---------------
Total (loss)/profit attributable to ordinary shareholders (£’000) (9,045) 86,322
========= =========
Equity shareholders’ funds (£’000) 501,618 595,908
========= =========
The weighted average number of ordinary shares in issue during the year on which the earnings per ordinary share was calculated was: 78,793,175 91,924,583
The actual number of ordinary shares in issue at the end of the year on which the net asset value per ordinary share was calculated was: 75,033,364 87,271,864
Earnings/(loss) per ordinary share
Revenue earnings per share (pence) – basic and diluted 17.70 18.54
Capital (loss)/earnings per share (pence) - basic and diluted (29.18) 75.37
--------------- ---------------
Total (loss)/earnings per share (pence) - basic and diluted (11.48) 93.91
--------------- ---------------
As at As at
30 November 2025 30 November 2024
Net asset value per ordinary share (pence) 668.53 682.82
Ordinary share price (pence) 612.00 593.00
========= =========
There were no dilutive securities at the year end.
8. Called up share capital
Ordinary shares in issue Treasury shares Total Nominal
shares value
number number number £’000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 5 pence each
At 30 November 2023 95,872,161 7,337,703 103,209,864 5,160
Ordinary shares bought back into treasury (8,600,297) 8,600,297 – –
At 30 November 2024 87,271,864 15,938,000 103,209,864 5,160
Ordinary shares bought back into treasury (12,238,500) 12,238,500 – –
--------------- --------------- --------------- ---------------
At 30 November 2025 75,033,364 28,176,500 103,209,864 5,160
========= ========= ========= =========
During the year ended 30 November 2025, the Company bought back 12,238,500
shares into treasury (2024: 8,600,297) for a total consideration of
£70,833,000 (2024: £52,098,000) including costs.
Since 30 November 2025 and up to 25 February 2026, no shares have been bought
back into treasury.
The ordinary shares give shareholders voting rights, the entitlement to all of
the capital growth in the Company’s assets and to all income from the
Company that is resolved to be distributed.
9. Reserves
Distributable reserves
Share premium account Capital Special reserve Capital reserve arising on investments sold Capital Revenue reserve
redemption reserve
reserve arising on
revaluation
of
investments
held
£’000 £’000 £’000 £’000 £’000 £’000
At 30 November 2023 242,122 11,905 3,231 322,729 (27,105) 17,883
Movement during the year:
Total comprehensive income:
Net profit for the year – – – 895 68,381 17,046
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – (3,213) (48,620) – –
Share repurchase costs – – (18) (247) – –
Dividends paid – – – – – (14,241)
--------------- --------------- --------------- --------------- --------------- ---------------
At 30 November 2024 242,122 11,905 – 274,757 41,276 20,688
========= ========= ========= ========= ========= =========
Movement during the year:
Total comprehensive (loss)/income:
Net (loss)/profit for the year – – – (29,808) 6,814 13,949
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – (14,145) (56,321) – –
Share repurchase costs – – – (367) – –
Cancellation of share premium (242,122) – 242,122 – – –
Dividends paid – – – – – (14,412)
--------------- --------------- --------------- --------------- --------------- ---------------
At 30 November 2025 – 11,905 227,977 188,261 48,090 20,225
========= ========= ========= ========= ========= =========
The share premium account and capital redemption reserve of £nil and
£11,905,000 (2024: £242,122,000 and £11,905,000) are not distributable
reserves 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 and
capital reserve may be used as distributable reserves for all purposes and, in
particular, the repurchase by the Company of its ordinary shares and for
payments such as dividends. In accordance with the Company’s Articles of
Association, the special reserve of £227,977,000 (2024: £nil), capital
reserves of £236,351,000 (2024: £316,033,000) and the revenue reserve of
£20,225,000 (2024: £20,688,000) may be distributed by way of dividend. At 30
November 2025, the gain on capital reserve arising on the revaluation of
investments of £48,090,000 (2024: £41,276,000) is subject to fair value
movements and may not be readily realisable at short notice, as such any gains
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.
As at 30 November 2025, the Company’s distributable reserves excluding
capital reserves on the revaluation of investments amounted to £436,463,000
(2024: £295,445,000).
The Company’s share premium account was cancelled pursuant to
shareholders’ approval of a special resolution at the Company’s Annual
General Meeting on 25 March 2025 and Court approval on 29 April 2025. The
share premium account which totalled £242,122,000 at the time of cancellation
was transferred to a special reserve. This action was taken, in part, to
increase the Company’s distributable reserves, thereby
providing a greater ability to pay dividends and repurchase shares.
10. Valuation of financial instruments
Financial assets and financial liabilities are either carried in the 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 Company 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
Company are explained in the accounting policies note 2(g) to the Financial
Statements above.
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 or liability.
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
Company 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.
As at the year end the long and short derivative positions were valued using
the underlying equity bid price (offer price in respect of short positions)
and the contract price at the inception of the trade or at the trade reset
date. There have been no changes to the valuation technique since the previous
year or as at the date of this report.
Contracts for difference have been classified as Level 2 investments as their
valuation has been based on market observable inputs represented by the market
prices of the underlying quoted securities to which these contracts expose the
Company.
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 30 November 2025 Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 474,824 – – 474,824
Contracts for difference – 28 – 28
Liabilities:
Contracts for difference – (1,105) – (1,105)
Index future (193) – – (193)
--------------- --------------- --------------- ---------------
Total 474,631 (1,077) – 473,554
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss at 30 November 2024 Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 557,602 – – 557,602
Contracts for difference – 2,173 – 2,173
Liabilities:
Contracts for difference – (72) – (72)
Index future (288) – – (288)
--------------- --------------- --------------- ---------------
Total 557,314 2,101 – 559,415
========= ========= ========= =========
There were no transfers between levels for financial assets and financial
liabilities during the year recorded at fair value as at 30 November 2025 and
30 November 2024. The Company did not hold any Level 3 securities throughout
the financial year or as at 30 November 2025 (2024: nil).
For exchange listed equity investments, the quoted price is the bid price.
Contracts for difference are valued based on the bid price of the underlying
quoted securities that the contracts relate to. 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 price related risks, including climate risk, in
accordance with the fair value related requirements of the Company’s
financial reporting framework.
11. Related party disclosure
Directors’ emoluments
At the date of this report, the Board consists of six non-executive Directors,
all of whom are considered to be independent of the Manager by the Board.
Disclosures of the Directors’ interests in the ordinary shares of the
Company and fees and expenses payable to the Directors are set out in the
Directors’ Remuneration Report contained within the Annual Report and
Financial Statements. At 30 November 2025, £16,000 (2024: £16,000) was
outstanding in respect of Directors’ fees.
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 held by Related BlackRock Funds Total % of shares held by Number of Significant
Significant Investors who Investors who are not
are not affiliates of affiliates of
BlackRock Group or BlackRock Group or
BlackRock, Inc. BlackRock, Inc.
As at 30 November 2025 1.2 n/a n/a
As at 30 November 2024 1.2 n/a n/a
========= ========= =========
12. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months’
notice. BFM 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)). Further details of the
investment management contract are disclosed in the Directors’ Report
contained within the Annual Report and Financial Statements.
The investment management fee due for the year ended 30 November 2025 amounted
to £2,179,000 (2024: £2,575,000). At the year end, £545,000 (2024:
£1,906,000) was outstanding in respect of management fees.
The performance fee payable for the year ended 30 November 2025 amounted to
£nil (2024: £2,982,000). The accrual of £625,000 which was accrued in the
prior year and related to two-year period ended 30 November 2025 has been
written back due to the reduction in outperformance for the period (2024:
accrual of £3,607,000) and is calculated as follows:
• For the annualised rolling two-year performance
period to 30 November 2025, the Company has underperformed the benchmark by
5.2% as at 30 November 2025. As a result, an amount of £625,000 has been
written back from the performance fee accrued in the prior period.
• For the annualised rolling two-year performance
period to 30 November 2026, the Company has underperformed the benchmark by
5.3% as at 30 November 2025. No performance fee relating to this performance
period has been accrued at the date of this report.
In addition to the above services, BIM (UK) has provided marketing services.
The total fees paid or payable for these services for the year ended 30
November 2025 amounted to £159,000 excluding VAT (2024: £175,000). Marketing
fees of £124,000 (2024: £124,000) were outstanding at the year end.
The Company has an investment in the BlackRock Institutional Cash Series plc -
Sterling Liquid Environmentally Aware Fund of £26,793,000 (2024:
£43,477,000) which for the year ended 30 November 2025 and 30 November 2024
has been presented in the financial statements as a cash equivalent.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware USA.
13. Contingent liabilities
There were no contingent liabilities at 30 November 2025 (2024: none).
14. Subsequent events
Subsequent to the year end, the Company has proposed combining with BlackRock
Smaller Companies Trust plc. For further details please refer to Note 2(a).
15. Publication of non-statutory accounts
The financial information contained in this announcement does not
constitute statutory accounts as defined in the Companies Act 2006.
The Annual Report and Financial Statements for the year ended 30
November 2025 will be filed with the Registrar of Companies after the Annual
General Meeting.
The figures set out above have been reported upon by the auditor, whose report
for the year ended 30 November 2025 contains no qualification or statement
under section 498(2) or (3) of the Companies Act 2006.
The comparative figures are extracts from the audited financial statements of
BlackRock Throgmorton Trust plc for the year ended 30 November 2024, which
have been filed with the Registrar of Companies. The
report of the auditor on those financial statements contained no qualification
or statement under Section 498 of the Companies Act.
16. Annual report
Copies of the Annual Report and Financial Statements will be sent to
members shortly and will be available from the registered office, c/o The
Company Secretary, BlackRock Throgmorton Trust plc, 12 Throgmorton Avenue,
London EC2N 2DL.
17. Annual general meeting
The Annual General Meeting of the Company will be held at 12
Throgmorton Avenue, London EC2N 2DL on Thursday, 26 March 2026 at 10:15 a.m.
ENDS
The Annual Report will also be available on the BlackRock website at
blackrock.com/uk/thrg. Neither the contents of the
Manager’s website nor the contents of any website accessible from hyperlinks
on the Manager’s website (or any other website) is incorporated into, or
forms part of, this announcement.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Sarah Beynsberger, Director, Closed End Funds, BlackRock Investment Management
(UK) Limited
Tel: 020 7743 3000
Press Enquiries:
Ed Hooper, Lansons Communications – Tel:
0207 294 3616
E-mail: edh@lansons.com
;
BlackRockInvestmentTrusts@lansons.com
27 February 2026
12 Throgmorton Avenue
London EC2N 2DL
Release (https://mb.cision.com/Main/22398/4314144/3957888.pdf)
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