REG-The Diverse Income Trust Plc: Half-year Financial Report
13/02/2026 07:02
THE DIVERSE INCOME TRUST PLC
HALF-YEARLY FINANCIAL REPORT
The Directors present the Half-Yearly Financial Report of the Company for the
period to 30 November 2025.
RESULTS FOR THE HALF YEAR TO 30 NOVEMBER 2025
Summary of Trust Financial Results over the half year to 30 November 2025
30 November 2025 30 November 2024 31 May 2025 Change
Revenue return per ordinary share 1 2.83p 2.63p 4.87p 7.6%
Ordinary dividends per ordinary share 2.15p 2.05p 4.50p 4.9%
NAV per ordinary share 1 113.21p 100.25p 106.69p 6.1%
Ordinary share price 104.50p 91.80p 103.00p 1.5%
Discount to NAV 1 (7.7%) (8.4%) (3.5%)
1 For an in-depth assessment of performance please refer to the
Chair's Statement on pages 2 and 3 and the Manager's Report on pages 6 to 7.
Revenue return per ordinary share, NAV per ordinary share and Discount to NAV
defined in the Glossary.
Ordinary shares in issue as at 30 November 2025: 163,570,773 (31 May 2025:
236,393,165).
CHAIR'S STATEMENT
The Company's portfolio is tilted towards opportunities amongst smaller
companies, which presented a headwind during this reporting period. Since the
period end, strong absolute and relative performance has resumed, with a NAV
total return of +10% to 4th February also ahead of the 7.5% rise in the
Deutsche Numis All Share Index.
This report covers the half year to November 2025, a period of sustained
enthusiasm (verging on exuberance) for Artificial Intelligence, both its
immediate impact on capital investment levels and its anticipated impact on
productivity in the wider global economy. As valuations have inflated for the
(principally US- based) technology leaders, investors have begun to diversify
into other sectors and geographies.
Short-term interest rates have been on a generally declining trend which has
helped to support investor confidence during a period where, outside the US,
economic growth has been lacklustre and buffeted by uncertainty over President
Trump's tariff policies.
Half-year returns
The Company's NAV total return was +8.5% over the half year, which compares
with a 12.5% total return from the Deutsche Numis All Share Index. The UK
market's returns were led by larger capitalisation stocks, with the smaller
company and alternative market sub- components delivering returns of +7.4% and
+1.4% respectively. The Company's portfolio is tilted towards opportunities
amongst smaller companies, which presented a headwind during this reporting
period. Since the period end, strong absolute performance has resumed, with a
NAV total return of +10% to 4th February, ahead of the 7.5% rise in the
Deutsche Numis All Share Index.
The Company's Revenue Earnings per Share amounted to 2.83p to the end of
November, a rise of 7.6% over the comparable figure of 2.63p last year. The
Board has already declared a first interim dividend of 1.05p per share for the
current year which, together with the second interim dividend of 1.10p
declared with these results means that shareholder dividends for the period
amount to 2.15p, vs 2.05p last year. It is anticipated that, in combination,
the four dividends for the current year will represent an increase over those
paid in the previous year.
Returns since the Trust was first listed in April 2011
Over the longer-term, since its inception in 2011, the Company has delivered a
NAV total return of +295.5%, well ahead of the +170.2% total return on the
Deutsche Numis All Share Index. Expressed at an annual rate, the Company's NAV
total return has compounded at +9.9% p.a., nearly 3% p.a. ahead of the +7.0%
p.a. return from the wider UK market.
Share Issuance and Redemptions
The Company's discount widened, from 3.5% at the end of May to 8.0% at the end
of November. Although a discount to NAV has persisted since 2019, since launch
in 2011 the trust has on average traded close to its NAV, at an average
discount of 1.8%, significantly narrower than other equity income trusts.
Since its initial launch, the Company has raised £159.8m of additional
capital, but it has now returned £223.8m to redeeming shareholders. This
includes the £79.2m capital redemption paid in November.
Since 2012, the Company has offered shareholders an annual option to redeem up
to 100% of their shares at either the prevailing net asset value at the
redemption point, or (if a redemption pool is created) the realised value of
the assets attributable to the redeeming shares). During the first decade of
its life, redemptions were minimal but the past three years have seen
significant redemptions, most recently (in 2025) amounting to 30.8% of the
outstanding shares in 2025.
As a result, the size of the Company has reduced substantially. So, whilst the
facility has provided liquidity for those wishing to sell their shares, this
has had an impact on remaining shareholders' ability to deal in size in the
market. Consequently, the Board has taken time to consider whether alternative
routes to limiting the discount would work more effectively. In debating these
issues, the Board is cognisant that removing the redemption facility without
replacing it with something of equivalent value or effectiveness would be
inappropriate and Boards elsewhere have been criticised when established
mechanisms have seen changes detrimental to shareholders' interests.
Proposed change in share redemption and discount management
With this in mind, the Board has considered a range of options, which have
been discussed with key institutional shareholders, that would enable
shareholders to remain exposed to the Company's current investment strategy.
The strategy has outperformed the UK equity market since the Company's
inception in 2011 and is well-positioned to benefit from more positive
investor attitudes towards the UK equity market, particularly the many
overlooked and lowly valued opportunities in the smaller company universe.
The possibilities include replacing the annual redemption with an active share
buyback policy defending a narrow level of discount throughout the year,
coupled with providing regular opportunities for shareholders to vote on
whether they wish the Company to continue. Noting the indications of support
from leading shareholders for the strategy, discussion has also focused on
removing the discount risk altogether by offering shareholders the opportunity
to switch to an open-ended fund managed according to the same strategy by the
same investment team. A further announcement will be made in due
course.
Board succession
As noted in the May 2025 Annual Report, Calum Thomson will, all else being
equal, be standing down at the 2026 AGM, having served nine years with
distinction as a Director and Chairman of the Audit Committee. Ahead of the
AGM, the Company will conduct a formal search process to recruit a successor,
as required.
Twelve month total returns of the Trust and various Deutsche Numis indices
%
NAV Total Return 8.5
Deutsche Numis All Share Index 12.5
Deutsche Numis Small Cap Index ex ICs* 7.4
Deutsche Numis Alternative Markets Index ex ICs* 1.4
* Investment Companies
Source: Morningstar
Prospects
Although confidence has waned in the UK government and its willingness to
address structural issues in government spending programmes, the UK economy
has broadly marked time in 2025, despite the impact of the 2024 tax increases.
Prospects for 2026 are likely to be helped by the lagged effect of interest
rate cuts made during 2025 and by the structuring of the 2025 Budget measures,
which front-loaded government spending increases, while deferring the
balancing tax increases needed to maintain market confidence to the end of the
decade.
The US is also expected to have relatively loose fiscal policy in 2026, with
mooted tax rebates for consumers as the Republicans seek to stimulate the
economy ahead of the mid-term elections in November. The effect of looser
monetary policy measures is also a tailwind, even if there is a risk of a
later reversal, if the economy (already growing healthily) overheats.
As noted earlier and in recent reports, the UK market has been sidelined in
investors' preferences for many years. This has been disproportionate to the
operational performance of UK quoted companies. As a result, on a number of
key measures, the UK equity market has become lowly rated relative to
international comparators. Despite the "Magnificent 7" US technology leaders
dominating the headlines, in 2025 the UK market outperformed both the "Mag 7"
and the US market in sterling terms, evidence that investors may be developing
vertigo at some US valuations, leading them to seek better value elsewhere.
Within the UK market, many smaller companies have suffered more severe
derating due to their invisibility to larger institutional investors. With UK
valuations looking attractive relative to other regions, with the regulatory
discussion shifting towards encouraging investment in the UK market and with
UK and global interest rates on a declining trend, the prospective risk-reward
from UK equities looks better than for some years, particularly the neglected
second liners and smaller companies. Our Managers are exceptionally positive
on the outlook for the portfolio, as discussed in their report.
Andrew Bell
Chair
12 February 2026
INVESTMENT MANAGER'S REPORT
The day-to-day fund managers with the responsibility for the makeup of the
Trust's portfolio.
Gervais Williams
Gervais joined Miton in March 2011 and is now Head of Equities in Premier
Miton. He has been an equity fund manager since 1985, including 17 years at
Gartmore. He was named Fund Manager of the Year by What Investment? in 2014.
Gervais is also the President of the Quoted Companies Alliance and a member of
the AIM Advisory Council.
Martin Turner
Martin joined Miton in May 2011. Martin and Gervais have had a close working
relationship since 2004, with complementary expertise that led them to back a
series of successful companies. Martin qualified as a Chartered Accountant
with Arthur Anderson and had senior roles and extensive experience at Merrill
Lynch and Collins Stewart.
Market trends over the past decade
During the past decade, globalisation has driven exceptional growth in the US
technology majors, and in doing so has reshaped investor behaviour.
Globalisation has enhanced the growth of the large US technology majors known
as the Magnificent Seven or "Mag7". Over the past decade, this group has
collectively delivered a total return of 27 times in sterling terms, compared
to around 3 times from mainstream global stock market indices.
Investors have significantly increased their exposure to the Mag7, withdrawing
capital from most other listed stocks worldwide.
These persistent outflows have had an impact on valuations, depressing share
prices and amplifying underperformance.
Many mature companies, predominantly large caps generating surplus cashflow,
have mitigated the impact of persistent capital withdrawals through share
repurchases.
Less mature, smaller companies that are building future market positions lack
the surplus cashflow to buy back their shares, with the result that persistent
institutional selling has significantly depressed their share prices.
As a result, US technology valuations now appear very demanding, whereas many
UK quoted smallcaps are currently trading at historically modest valuations.
Recent market trends
As political attitudes move from globalisation to nationalism, we anticipate
that asset market gyrations will become more volatile.
Prior to the start of the period under review, in April, global stock markets
suffered a sharp drawdown.
This was followed by a strong recovery in the Mag7, which rose 31.7% in
sterling terms over the ensuing six months to 30 November, outpacing most
other comparatives.
However, rising nationalist uncertainty has prompted many investors to begin
to diversify away from the risk of excessive market concentration by
allocating to equity income strategies.
As a result, over the first 11 months of 2025, the Deutsche Numis Large Cap
Index rose by 23.2%, compared to a sterling return from the Mag7 of 17.3% over
the same period.
We find it instructive that during previous periods of political and economic
instability, the equity income bias of the UK stock market has led it to
outperform the US indices, a pattern which we expect to re-emerge.
Changes to the portfolio
Over the half year we undertook some significant changes to the portfolio to
reflect evolving market conditions.
Strong returns in gold mining stocks led us to take profits in Pan African
Resources and Thor Exploration, while the Greatland Gold holding was sold in
full.
The portfolio has retained a large weighting to mining, however, with the
purchase of additional copper mining holdings such as ACG Metals.
Profits were taken on several of the Trust's Financials Sector holdings. We
sold out of investment manager Aberdeen Group, Conduit Holdings (reinsurance),
FRP Advisory (financial advisory services), Phoenix (life assurance) and XPS
Pensions, together with residual positions in H&T (Pawnbrokers) and Just Group
(pensions and annuities) after they agreed premium takeovers.
It is unusual for the Trust to invest outside the UK, but during the period we
introduced two new European listed stocks. Norwegian oil & gas company
BlueNord and French energy conglomerate Engie were selected because, in our
view, their valuations are even more out of line with their fundamentals than
their UK equivalents.
Finally, property companies Land Securities and Primary Healthcare Properties,
and water and waste services supplier Pennon are sizeable new holdings that we
have bought for the portfolio.
Changes to portfolio industry sector weightings
The Financials sector weighting has been the largest portfolio weighting for
many years, as it includes several subsectors with prospects that in our view
are not closely correlated with one another.
Nonetheless, we reduced its weighting from 42.0% to 30.6% over the half year.
This was principally the result of profit taking on a number of holdings that
had outperformed, with their valuations rising towards fair value in our view.
The reduction in the Financials sector weighting was reallocated primarily to
the Materials, Real Estate, Energy, and Utilities sectors, each of which
increased by between 2.5% and 3.5%.
The Trust's portfolio is now more diversified than previously, which reflects
our view that a world dominated by nationalist politics is more uncertain.
The Trust's returns
As noted above, the substantial outperformance of Mag7 stocks over the last 10
years has resulted in quoted smallcaps share prices becoming unusually
depressed due to the withdrawal of global capital.
Many smallcap holdings in the Trust's portfolio have underperformed mainstream
stocks for some years, including over the period under review, but their weak
returns are not generally related to disappointing trading, and many have
continued to demonstrate future confidence by regularly increasing their
dividends.
Given the multicap nature of the Trust's strategy, at 8.5% its NAV total
return reflects a mix of the Deutsche Numis All Share Index total return of
12.6% and the Deutsche Numis Smaller Companies Plus AIM Index return of 6.5%.
This return was similar to the Peer Group, the UK Equity Income sector, which
returned 8.0% over the six-month period. The Peer Group by contrast
principally invests in large cap stocks.
In isolation, the Trust's returns over the six months to November may raise
questions as to whether the strategy has continued to add value. When the half
year outcome is set in the context of the longer-term trends however, we
believe the position is clearer.
While the dividends paid by the UK stock market as a whole fell during Covid
and are only just returning to 2016 levels, the Trust's revenue per share has
grown progressively since the Covid setback and is now well above its previous
2019 peak, meaning that its ordinary dividends have increased every year since
issue.
Furthermore, since the half year end, the Trust's NAV has continued to
appreciate significantly and now exceeds its previous 2021 peak.
Both factors provide strong evidence that the strategy has continued to be
successful, despite the abnormal UK-quoted smallcap share price weakness since
2021 caused by heavy OEIC redemptions. As a result, the Trust remains one of
the best performing UK equity income trusts since its launch in April 2011,
producing a NAV total return of 295.5% which compares favourably with a 235.3%
return from the Peer Group.
What were the principal contributors and detractors to the Trust's performance
during the 2025 financial year?
Largest 5 contributors to performance %
Pan African Resources 2.97
Secure Trust Bank 1.01
Galliford Try Holdings 0.92
Hunting 0.58
Concurrant Technologies 0.57
Largest 5 detractors from performance %
Paypoint (0.65)
Kenmare Resources (0.56)
B&M European Value Retail (0.41)
ME Group International (0.34)
Bioventix (0.29)
Source: Premier Miton
Outlook
One of the features of the exceptional returns generated by the Mag7 is that
many global investors are currently tolerating large stock specific and
industry sector correlation risks.
As other parts of the global markets start to outperform, we believe these
risks will come to be seen as unacceptable.
In the meantime, equity income stocks, including many in the UK, are starting
to outperform the Mag7.
When UK OEIC redemption flows ease, we anticipate that UK equity income share
prices will outperform international comparatives by much larger margins.
As nationalism prevails, economic setbacks may create acquisition
opportunities for cashflow-rich companies, as seen with HSBC's purchase of SVB
UK, which appeared to add £billions to its market capitalisation.
In addition, the increasing dominance of passive investing strategies enhances
the potential for adding value through stock selection in our view.
In our view, UK smallcaps and the broader market are poised for a prolonged
period of outperformance. If we are able to add value through stock selection
as we have done in the past, then that will further enhance the Trust's
returns. In combination we believe the prospects for the Trust's strategy are
the best they have been for decades.
Gervais Williams and Martin Turner
12 February 2026
PORTFOLIO INFORMATION
as at 30 November 2025
Rank Company Sector & main activity Valuation £000 % of net assets Yield * %
1 Galliford Try Industrials 6,006 3.3 3.0
2 Concurrent Technologies** Technology 5,457 2.9 0.5
3 CMC Markets Financials 5,042 2.7 4.8
4 TP ICAP Financials 4,856 2.6 2.0
5 Yu Group** Utilities 4,376 2.4 1.5
6 PayPoint Industrials 4,348 2.3 5.8
7 NewRiver REIT Real Estate 3,842 2.1 4.8
8 AVIVA Financials 3,765 2.0 2.0
9 Rio Tinto Basic Materials 3,566 1.9 2.0
10 ACG Metals Basic Materials 3,460 1.9 -
Top 10 investments 44,718 24.1
11 Ithaca Energy Energy 3,138 1.7 12.1
12 TruFin** Financials 3,132 1.7 -
13 Plus500 Financials 3,131 1.7 2.3
14 Pan African Resources Basic Materials 3,063 1.7 1.8
15 Sabre Insurance Financials 3,055 1.6 5.3
16 Diversified Energy Energy 3,053 1.6 1.8
17 BT Telecommunications 3,040 1.6 3.2
18 Hunting Energy 3,039 1.6 1.3
19 Primary Health Properties Real Estate 2,925 1.6 -
20 Bluenord ASA Energy 2,902 1.6 -
Top 20 investments 75,196 40.5
21 AO World Consumer Discretionary 2,902 1.6 -
22 Atalaya Mining Basic Materials 2,892 1.6 0.8
23 Zotefoams Basic Materials 2,835 1.5 1.2
24 M&G Financials 2,809 1.5 2.5
25 MAN Financials 2,706 1.5 2.0
26 Personal Group** Financials 2,700 1.5 5.0
27 Legal & General Financials 2,687 1.5 2.5
28 Sainsbury (J) Consumer Staples 2,657 1.4 4.3
29 National Grid Utilities 2,508 1.4 1.4
30 Tesco Consumer Staples 2,485 1.3 1.1
Top 30 investments 102,377 55.3
31 Victorian Plumbing** Consumer Discretionary 2,468 1.3 1.0
32 Secure Trust Bank Financials 2,465 1.3 1.2
33 Engie Utilities 2,332 1.3 -
34 Pennon Utilities 2,311 1.2 -
35 ME Group international Consumer Discretionary 2,271 1.2 2.4
36 Norcros Industrials 2,232 1.2 3.6
37 Kenmare Resources Basic Materials 2,193 1.2 2.8
38 Vodafone Telecommunications 2,040 1.1 4.2
39 Greencoat UK Wind Financials 2,036 1.1 5.8
40 Energean Energy 1,993 1.1 4.7
Top 40 investments 124,718 67.3
Balance held in 62 equity investments 56,044 30.3
Total investment portfolio 180,762 97.6
Other net current assets 4,424 2.4
Net assets 185,186 100.0
* Based on historical yields and therefore not representative of future
yields. Includes special dividends where applicable. Yield is calculated based
on the total dividend rate earned for the period 1 June to 30 November 2025,
expressed as a percentage of the security's base price as at 30 November 2025.
** AIM/AQUIS listed.
Portfolio as at 30 November 2025
Portfolio exposure by sector (%) - £180.8 million
Financials 30.6
Basic Materials 13.2
Energy 11.0
Industrials 10.4
Consumer Discretionary 8.1
Utilities 6.9
Real Estate 5.3
Consumer Staples 5.1
Technology 5.1
Telecommunications 3.0
Health Care 1.3
100.0
Actual income by sector (%) - £5.8 million
Financials 40.4
Industrials 13.5
Energy 12.6
Technology 7.6
Real Estate 5.2
Basic Materials 5.2
Consumer Staples 4.5
Consumer Discretionary 4.1
Telecommunications 3.8
Utilities 1.8
Health Care 1.3
100.0
FURTHER INFORMATION
The Diverse Income Trust plc's Half-Yearly Financial Report of the Company for
the period to 30 November 2025 will be available today on
www.diverseincometrust.com.
It will also be submitted shortly in full unedited text to the Financial
Conduct Authority's National Storage Mechanism and will be available for
inspection at
data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) in
accordance with DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure
Guidance and Transparency Rules.
ENDS
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of this announcement.
LEI: 2138005QFXYHJM551U45
Copyright (c) 2026 PR Newswire Association,LLC. All Rights ReservedRecent news on Diverse Income Trust
See all newsREG-The Diverse Income Trust Plc: Net Asset Value(s)
AnnouncementREG-The Diverse Income Trust Plc: Net Asset Value(s)
AnnouncementREG-The Diverse Income Trust Plc: Net Asset Value(s)
AnnouncementREG-The Diverse Income Trust Plc: Net Asset Value(s)
AnnouncementREG-The Diverse Income Trust Plc: Net Asset Value(s)
Announcement