REG - Dunedin Inc.Growth - Half-year Report
25/09/2025 07:00
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RNS Number : 7059A Dunedin Income Growth Inv Tst PLC 25 September 2025
DUNEDIN INCOME GROWTH INVESTMENT TRUST PLC
HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 31 JULY 2025
Legal Entity Identifier (LEI): 549300PPXLZPR5JTL763
Investment Objective
The Company's objective is to achieve growth of income and capital from a high
quality portfolio invested mainly in companies listed or quoted in the United
Kingdom or companies having significant operations and/or exposure to the
United Kingdom that meet the Company's sustainable and responsible investing
approach.
Benchmark
The Company's benchmark is the FTSE All-Share Index (total return).
Performance is measured on a net asset value total return basis over the
long-term.
Performance Highlights
Net asset value total return per Ordinary share(AB) Share price total return per Ordinary Share(A)
Six months ended 31 July 2025 +3.1% Six months ended 31 July 2025 +7.1%
Year ended 31 January 2025 +9.0% Year ended 31 January 2025 +8.4%
Revenue return per Ordinary share Dividend yield(A)
Six months ended 31 July 2025 7.82p As at 31 July 2025 4.8%
Six months ended 31 July 2024 8.92p As at 31 January 2025 5.0%
Discount to net asset value(AB) Ongoing charges ratio(A)
As at 31 July 2025 8.4% As at 31 July 2025 0.59%
As at 31 January 2025 11.6% As at 31 January 2025 0.56%
(A) Considered to be an Alternative Performance Measure.
(B) With debt at fair value (including income).
For further information, please contact:
Ben Heatley
Head of Closed End Fund Sales
Aberdeen Group plc
ben.heatley@aberdeenplc.com (mailto:ben.heatley@aberdeenplc.com)
Financial Highlights and Calendar
Financial Highlights
31 July 2025 31 January 2025 % change
Total assets (£'000)(A) 454,738 477,187 (4.7)
Equity shareholders' funds (£'000) 405,435 428,528 (5.4)
Market capitalisation (£'000) 377,647 384,605 (1.8)
Net asset value per Ordinary share 318.85p 317.55p 0.4
Net asset value per Ordinary share with debt at fair value(B) 324.28p 322.47p 0.6
Share price per Ordinary share (mid) 297.00p 285.00p 4.2
Discount to net asset value with debt at fair value(B) 8.4% 11.6%
Revenue return per Ordinary share(C) 7.82p 8.92p (12.3)
Net gearing(B) 7.1% 10.9%
Ongoing charges ratio(B) 0.59% 0.56%
(A) Defined as total assets per the Statement of Financial Position less
current liabilities (before deduction of bank loans and Loan Notes).
(B) Considered to be an Alternative Performance Measure.
(C) Figure for 31 July 2025 is for six months to that date. Figure for 31
January 2025 is for the six months to 31 July 2024.
Calendar
Expected payment dates of quarterly dividends 28 November 2025
27 February 2026
29 May 2026
28 August 2026
Financial year end 31 January 2026
Expected announcement of results March 2026
for year ended 31 January 2026
Annual General Meeting (London) May 2026
Chairman's Statement
Highlights
· Increased total dividend of at least 19.10p per share for the
year ending 31 January 2026, representing an increase of 34.5% compared to the
previous year.
· Notional dividend yield of 6.0% on NAV and a share price dividend
yield of 6.6%.
· Share price total return for the six months of 7.1%.
· NAV total return for the period of 3.1%.
· Narrowing of discount to 8.4% at the period end.
Review of the Period
A key development during the period was the announcement by the Board of a new
dividend policy, providing an increase of 34.5% in the level of dividend and a
share price dividend yield of 6.6%. Full details of the new policy are
contained in the Dividend section below. The Board has made these changes in
the expectation that they will lead, over time, to an increase in demand for
the Company's shares.
The net asset value ("NAV") total return for the six months ended 31 July 2025
was 3.1%, underperforming the return of 7.5% from the benchmark, the FTSE
All-Share Index. The share price total return for the period was 7.1%, closer
to the benchmark return, reflecting a narrowing of the discount to 8.4% at the
end of the period.
Despite a period of significant geopolitical events, most notably the
imposition of trade tariffs by the US government, the UK equity market
delivered a healthy return. It is disappointing to note, however, that the NAV
total return generated by the Company fell short of this. The majority of this
underperformance took place in the last month of the period when the portfolio
struggled to match the strong return from the market, which returned nearly
4%. A significant factor in the underperformance overall was the Investment
Manager's Quality investment style which remained out of favour with
investors, particularly in the second half of the period.
A more detailed review of performance for the period is contained within the
Investment Manager's Review.
Earnings
Revenue earnings per share for the period were 7.82p. This compares to 8.92p
for the first half of last year, a reduction of 12.3%. This was mostly due to
a lower level of option writing over this period compared to last year. In
pence per share terms, option writing was lower by 0.64p compared to the first
six months of last year. In addition, last year's income for the first half of
the year was boosted by the timing of dividend payments. Dividend payments by
the underlying portfolio companies have remained incrementally positive.
Dividend
As you may be aware, on 9 September, the Board announced that it will
significantly increase dividend distributions to shareholders. For the year
ending 31 January 2026, it is the Board's intention that the Company's
dividend will be increased to a minimum of 6.0% of the NAV as at 31 July 2025
(being the most recent financial quarter end), offering an attractive yield
compared to cash, the FTSE All-Share Index and peers in the UK Equity Income
sector. This amounts to a total dividend for the year of at least 19.10p per
share, an increase of 34.5% compared to the total dividend of 14.20p for the
year ended 31 January 2025. Based on the share price of 288p as at 24
September 2025, this represents a notional dividend yield of 6.6%.
Furthermore, it is the Board's intention to continue with a progressive
dividend policy with growth in absolute terms in future years from the
increased level, and building on the successful long-term track record of
dividend increases. The Company will fund the dividend cost from a combination
of revenue and capital generation thus utilising one of the key benefits of
the investment company structure.
The rationale for the change is that, over the long-term, income return
through dividends has been a significant proportion of the total return
generated by the Company, and the Board is very aware of the importance of
regular and reliable dividends to shareholders.
The Board also has observed the significant change that has taken place in the
distribution policy of the businesses in which the Company invests. This has
seen companies increasingly favour share buy backs over dividend
distributions. The net buy back yield alone on the FTSE All-Share Index at the
end of 2024 was around 2%, having been close to zero in 2014. At the same
time, the total Sterling amount of dividend payments expected to be made by UK
companies in 2025 is only marginally higher than it was a decade earlier.
Alongside this, the Board notes the substantial increase in interest rates
since late 2021 which has made holding cash a more attractive proposition than
was the case for the period following the global financial crisis. Today, cash
rates offer a premium yield comparable with the dividend yield available on
the FTSE All-Share Index (3.4%).
The Board does not expect significant changes to the investment process as a
result of the new dividend policy, with the Company continuing to focus on
high-quality companies and long-term capital and income growth, supported by a
disciplined investment approach, together with an integrated sustainability
focus. It will, however, give the Company's portfolio managers additional
flexibility to focus on delivering total returns.
A first interim dividend in respect of the year ending 31 January 2026, of
3.20p per share, was paid on 29 August 2025 and the Board has already declared
a second interim dividend of 4.25p per share, payable on 28 November 2025 to
shareholders on the register on 7 November 2025, with an ex-dividend date of 6
November 2025.
The remaining dividends for the financial year are expected to comprise a
further interim dividend of 4.25p per share payable in February 2026, and a
final dividend of at least 7.40p per share payable in May 2026. Formal
dividend announcements will be made in advance of each of these payments.
For future financial years, the Board anticipates three equal interim dividend
payments followed by a balancing final dividend.
Gearing
The Board believes that the sensible use of modest financial gearing, whilst
amplifying market movements in the short term, will enhance both capital and
income returns for shareholders over the long term. We also recognise the
benefit that having a reasonable proportion of long-term fixed rate funding
provides to managing the Revenue Account, through greater certainty over
financing costs.
The Company currently employs two sources of gearing, a £30 million loan note
which matures in 2045, and a £30 million multi-currency credit facility of
which £19.5 million was drawn at the period end.
With debt valued at par, the Company's net gearing decreased from 10.9% to
7.1% during the period, due to a higher level of cash balances being held at
the period end.
The Board believes this remains a relatively conservative level of gearing and
the undrawn part of the credit facility provides the Company with financial
flexibility should opportunities to deploy additional capital arise.
Discount and Share Buy Backs
The share price total return for the period was 7.1%, higher than the 3.1% NAV
total return, reflecting a narrowing of the discount from 11.6% as at 31
January 2025 to 8.4% at the end of the period (on a cum-income basis with
borrowings stated at fair value). The Company continued to buy back shares
during the period, with 7.8 million shares bought back at a cost of £22.7
million and an average discount to NAV of 8.8%. This provided an estimated
enhancement of 0.5% to the NAV per share with more than 70% of the buy back
activity occurring in the first three months of the period.
Board Succession
As stated in the Annual Report, we were pleased to announce the appointment of
Arun Kumar Sarwal as an independent non-executive Director and Chair of the
Audit Committee, with effect from the 1 February 2025. Both David Barron and
Jasper Judd retired from the Board at the AGM in May, at which point I
succeeded David as Chairman. We are therefore currently a Board of four
Directors.
Outlook
The Board is aware that shareholders will have noted the Company's
underperformance against the benchmark index for the period, which has
extended an unwelcome recent run. However, the Directors recognise this has
been against a market backdrop which has been severely unfavourable for the
Investment Manager's distinct Quality/Growth investment style. Furthermore,
although there have been challenges with a small number of the holdings in the
portfolio, the majority are trading well and have delivered robust earnings
and share price performances in line with the Investment Manager's
expectations.
With a return to a more favourable market environment (perhaps driven by an
economy struggling to grow and the need for further interest rate cuts), and
combined with the new dividend policy, the Board expects that additional
demand for the Company's shares, especially from retail investors, can reduce
further the current discount to NAV.
Howard Williams
Chairman
24 September 2025
Interim Management Statement
Directors' Responsibility Statement
The Directors are responsible for preparing the Half Yearly Financial Report
in accordance with applicable law and regulations. The Directors confirm that
to the best of their knowledge:
- The condensed set of financial statements has been prepared in
accordance with Financial Reporting Standard 104 'Interim Financial
Reporting';
- The Interim Board Report (constituting the interim management
report) includes a fair review of the information required by DTR 4.2.7R of
the Disclosure Guidance and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
- The financial statements include a fair review of the information
required by DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first six months
of the financial year and that have materially affected the financial position
or performance of the Company during that period, and any changes in the
related party transactions described in the last Annual Report that could do
so.
Principal Risks and Uncertainties
The Board regularly reviews the principal risks and uncertainties faced by the
Company together with the mitigating actions it has established to manage the
risks. These are set out within the Strategic Report contained within the
Annual Report for the year ended 31 January 2025 and comprise the following
risk categories:
- Investment objectives
- Investment strategies
- Investment performance
- Sustainable and responsible investing criteria
- Income/dividends
- Financial/market
- Gearing
- Regulatory
- Operational (including cyber-crime)
- Geo-political
The Company's principal risks and uncertainties have not changed materially
since the date of the Annual Report and are not expected to change materially
for the remaining six months of the Company's financial year.
In addition to those principal risks and uncertainties, the Board considers
that the development of Artificial Intelligence ("AI") presents potential
risks to businesses in almost every sector. The extent of the risk presented
by AI is extremely hard to assess at this point but the Board considers that
it is an emerging risk and, together with the Manager, will monitor
developments in this area.
There are a number of other risks which, if realised, could have a material
adverse effect on the Company and its financial condition, performance and
prospects. These include a number of existing geo-political risks, including
the impact on financial markets of US tariffs. The Board is also conscious of
the effect of higher inflation on financial markets and the resultant
implications for interest rates.
Going Concern
The Company's assets consist mainly of equity shares in companies listed on
the London Stock Exchange and in most circumstances are considered to be
realisable within a short timescale. The Board has set limits for borrowing
and derivative contract positions and regularly reviews actual exposures, cash
flow projections and compliance with loan covenants. The Directors have
considered the fact that Company's investments comprise readily realisable
securities which can be sold to meet funding requirements if necessary. The
Directors have also performed stress testing on the portfolio and the loan
financial covenants.
Having taken these matters into account, the Directors believe that the
Company has adequate financial resources to continue in operational existence
for the foreseeable future and for at least twelve months from the date of
this Report. Accordingly, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
On behalf of the Board
Howard Williams
Chairman
24 September 2025
Investment Manager's Review
Performance and Market Review
Despite all of the geopolitical events in the first half of this financial
year, it is somewhat surprising that the UK equity market was able to deliver
a positive absolute return of 7.5%. Staging a strong recovery post the
'liberation day' decline, the market shrugged off a combination of highly
volatile trade negotiations, a US/Israeli attack on Iran and a challenging
domestic economic and political backdrop.
The Company's net asset value ("NAV") total return was 3.1% for the six months
to the end of July 2025. After tracking the benchmark return over the first
five months of the period, and outperforming during the market turmoil in
April, the portfolio then struggled to match the sharp market rally in July.
This led to the Company underperforming the benchmark by 4.4% for the period.
There were two main drivers of the underperformance. Firstly, and most
significantly, was the 'style' leadership within the market itself. The FTSE
All-Share Index return was heavily concentrated in a narrow selection of
large-cap stocks with Banks, Tobacco and Aerospace & Defence accounting
for over 70% of the benchmark return. Our focus on Quality and Sustainability
means we are typically underweight in sectors such as Banks. In some cases,
such as Tobacco and Aerospace & Defence, these criteria prevent us from
investing in them altogether. Rolls Royce, British American Tobacco and BAE
Systems were particularly strong performers and make up large weightings in
the index. Overall, Quality as a style lagged the market substantially, with
the MSCI UK Quality Index rising just over 1% in the six month period, thus
making it a challenging backdrop for relative performance for our strategy.
The second element that held back returns were some stock specific
underperformers. This included Novo-Nordisk which revised down its full year
growth expectations for its obesity and diabetes treatments, and the chemical
distributor Azelis which reported weaker revenue growth in its Americas
business driven by softness in various end markets. Given plenty of
alternative options offering better growth prospects, we chose to sell both
holdings.
Despite the weaker returns relative to benchmark, at the company level there
was much to be positive about. In particular, we saw five companies deliver
very pleasing outcomes with material benefits accruing to their businesses and
their share prices. Healthcare REIT Assura attracted significant attention
following a takeover approach from both private equity and its listed peer,
Primary Health Properties ("PHP"). Asian life insurer Prudential delivered
strong financial results and accelerated new business growth, an important
step in convincing investors it can both deliver on its targets and return
significant amounts of capital. Asset manager and life insurer M&G
announced a substantial step in developing a credible growth strategy for its
investment management business with a distribution deal with Japanese insurer
Dai-icihi Life that included an agreement to build a stake of 15% in the UK
company. Animal genetics leader Genus achieved a critical milestone that
potentially creates a very significant future revenue source when it received
approval from the FDA for the development of pigs genetically edited to be
resistant to Porcine Reproductive and Respiratory Syndrome. Finally, closed
life book consolidator Chesnara announced its largest ever deal, acquiring
HSBC Life (UK) for £260 million, substantially extending the duration of its
cash flows and underpinning the dividend distribution for the long-term.
Dividend Income and Gearing
On a headline basis, revenues declined in absolute terms during the period.
This was driven by a lower level of option income, which was particularly
first-half weighted in 2024, an equity base approximately 10% smaller due to
the ongoing effect of share buybacks, and the timing of dividend receipts from
overseas companies. On an adjusted basis, we estimate that investment income
was flat to slightly up, reflecting modest underlying dividend growth from the
companies in the portfolio.
The level of borrowings remained unchanged over the period. We believe the
level of gearing remains appropriate given very attractive valuations for the
underlying investments. Net gearing was lower at the period end, but this was
due to the timing effect of several sales within the portfolio, temporarily
elevating the amount of cash on hand, which has since been reinvested.
Portfolio Activity
During the period, we initiated a position in Haleon, the leading pure-play
consumer healthcare company. It has a strong portfolio of leading brands, such
as Sensodyne and Advil across attractive segments including oral health,
respiratory health, pain relief, and vitamins. This should enable it to
deliver industry leading revenue growth whilst it has significant
opportunities to enhance its margin profile and returns to investors. We also
initiated a position in LondonMetric, a specialist real estate company focused
on attractive sub-sectors including logistics, convenience retail, healthcare,
and entertainment, and this supports a high and growing dividend distribution.
To partially fund this purchase, we reduced the holding in Assura after it
became evident that PHP would succeed in its bid for the company and further
upside appeared limited. In July, we also participated in the rights issue
by Chesnara, the consolidator of closed life insurance assets, which was
undertaken to finance the acquisition of HSBC Life (UK).
In terms of sales, we exited the position in the construction company Morgan
Sindall. The business has performed extremely strongly in recent years, but
the significant increase in the share price and the valuation multiple, meant
we saw better opportunities elsewhere. Towards the end of the period, we also
exited Novo-Nordisk and Azelis as noted above.
During the period, we topped up the holdings in Oxford Instruments and UK
housebuilder Taylor Wimpey where, despite subdued current trading conditions,
we see attractive valuations. In particular, the shares in Taylor Wimpey are
at multiples only reached at recent previous crisis points, despite a strong
balance sheet and secular demand for housing. We also added further to
existing positions in specialist insurer Hiscox, M&G and NatWest as well
as Diageo. To fund these purchases, we reduced the holdings in a number of
companies including AstraZeneca and Unilever reflecting their large absolute
size and fair valuations. We also trimmed positions on relative strength in
Telecom Plus, Genus, and Games Workshop as they performed strongly and
valuations become more stretched.
Outlook
In recent years, market conditions have not been favourable for our investment
approach and it has therefore been a frustrating period for relative
performance. However, styles go in and out of favour, and Quality as a style
has underperformed to the deepest extent and for the most extended period in
the past quarter of a century. We remain convinced, though, that a high
conviction approach focusing on quality, sustainable businesses with resilient
income streams gives the Company the potential to outperform. Over the
long-term, owning quality companies has been a winning trend, yet today the
portfolio's valuation premium to the wider market has shrunk to the lowest
level that we have seen, at just 7%, while ROE's and Operating Margins
respectively remain 60% and 25% higher and balance sheets 20% less geared than
the market. At the company level, our estimates of potential future returns
suggest a weighted average return of 11.7% for the portfolio, a premium of
400bps ahead of that delivered by the benchmark index over the past 10 years.
We see this as compelling evidence to stick with our strategy.
It is important to stress that we are not passively awaiting a shift in market
conditions. Our research team and coverage of the UK equity market goes from
strength to strength, and the pipeline of potential new investments is at
all-time highs. The key question therefore is what needs to change to catalyse
a return to quality outperformance? While timing is hard to call, we see a
combination of macro dynamics and stock specifics resulting in that change of
market leadership. Firstly, at the macro level we expect ongoing subdued
economic conditions to both lead to declining real interest rates and low
economic growth. This should support the valuation of higher quality companies
and focus investor appetite on businesses with strong structural growth
potential. Secondly, getting stock selection correct will be key, with
companies delivering consistent growth in profits, cash flow and shareholder
returns as the best way to drive share prices, The portfolio contains a
significant number of highly attractive valuation opportunities with large
latent performance potential, and we are excited about their prospects. We
believe strongly that when market conditions change, we will be in a good
position to return to outperformance.
Ben Ritchie and Rebecca Maclean
Aberdeen
24 September 2025
Investment Portfolio
At 31 July 2025
Market value Total assets
Company Sector £'000 %
TotalEnergies Oil, Gas and Coal 27,472 6.0
National Grid Gas, Water and Multi-utilities 23,307 5.1
RELX Media 22,936 5.0
NatWest Banks 21,710 4.8
Chesnara Life Insurance 21,191 4.7
Prudential Life Insurance 18,090 4.0
London Stock Exchange Finance and Credit Services 16,429 3.6
M&G Investment Banking and Brokerage Services 15,954 3.5
Haleon Pharmaceuticals and Biotechnology 14,843 3.3
Hiscox Non-life Insurance 14,610 3.2
Ten largest equity investments 196,542 43.2
Genus Pharmaceuticals and Biotechnology 14,566 3.2
Sirius Real Estate Real Estate Investment Trusts 14,343 3.2
Diageo Beverages 14,333 3.2
Sage Software and Computer Services 12,891 2.8
Convatec Medical Equipment and Services 12,059 2.7
Taylor Wimpey Household Goods and Home Construction 11,563 2.5
Games Workshop Leisure Goods 11,299 2.5
Unilever Personal Care, Drug and Grocery Stores 11,259 2.5
AstraZeneca Pharmaceuticals and Biotechnology 11,205 2.5
Gaztransport & Technigaz Oil, Gas and Coal 11,039 2.4
Twenty largest equity investments 321,099 70.6
Weir Group Industrial Engineering 10,895 2.4
Genuit Construction and Materials 10,584 2.3
ICG Investment Banking and Brokerage Services 10,381 2.3
Oxford Instruments Electronic and Electrical Equipment 10,164 2.2
Softcat Software and Computer Services 9,914 2.2
Volvo Industrial Transportation 9,833 2.2
Telecom Plus Telecommunications Service Providers 9,353 2.1
Mercedes-Benz Automobiles & Parts 8,768 1.9
LondonMetric Real Estate Investment Trusts 8,571 1.9
ASML Technology Hardware and Equipment 8,366 1.8
Thirty largest equity investments 417,928 91.9
Edenred Industrial Support Services 7,713 1.7
Assura Real Estate Investment Trusts 6,194 1.4
Total equity investments 431,835 95.0
Net current assets(A) 22,903 5.0
Total assets less current liabilities (excluding borrowings) 454,738 100.0
(A) Excluding bank loan of £19,547,000.
Condensed Statement of Comprehensive Income (unaudited)
Six months ended Six months ended
31 July 2025 31 July 2024
Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 1,225 1,225 - 23,080 23,080
Income 2 11,829 - 11,829 14,409 - 14,409
Investment management fees (326) (489) (815) (349) (523) (872)
Administrative expenses (446) - (446) (357) - (357)
Currency (losses)/gains - (623) (623) - 52 52
Net return before finance costs and tax 11,057 113 11,170 13,703 22,609 36,312
Finance costs (378) (561) (939) (411) (610) (1,021)
Return before taxation 10,679 (448) 10,231 13,292 21,999 35,291
Taxation 3 (516) - (516) (402) - (402)
Return after taxation 10,163 (448) 9,715 12,890 21,999 34,889
Return per Ordinary share (pence) 5 7.82 (0.34) 7.48 8.92 15.22 24.14
The total column of the Condensed Statement of Comprehensive Income is the
profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing
operations.
The accompanying notes are an integral part of the financial statements.
Condensed Statement of Financial Position (unaudited)
As at As at
31 July 2025 31 January 2025
Note £'000 £'000
Non-current assets
Investments at fair value through profit or loss 9 431,835 472,652
Current assets
Debtors 10,636 3,292
Cash and short-term deposits 13,980 2,329
24,616 5,621
Creditors: amounts falling due within one year
Bank loan (19,547) (18,907)
Other creditors (1,713) (1,086)
(21,260) (19,993)
Net current assets/(liabilities) 3,356 (14,372)
Total assets less current liabilities 435,191 458,280
Creditors: amounts falling due after more than one year
Loan Notes 2045 (29,756) (29,752)
Net assets 405,435 428,528
Capital and reserves
Called-up share capital 38,419 38,419
Share premium account 4,908 4,908
Capital redemption reserve 1,606 1,606
Capital reserve 6 336,772 359,775
Revenue reserve 23,730 23,820
Equity shareholders' funds 405,435 428,528
Net asset value per Ordinary share (pence) 7 318.85 317.55
The accompanying notes are an integral part of the financial statements.
Condensed Statement of Changes in Equity (unaudited)
Six months ended 31 July 2025
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 January 2025 38,419 4,908 1,606 359,775 23,820 428,528
Return after taxation - - - (448) 10,163 9,715
Purchase of own shares for treasury - - - (22,555) - (22,555)
Dividends paid 4 - - - - (10,253) (10,253)
Balance at 31 July 2025 38,419 4,908 1,606 336,772 23,730 405,435
Six months ended 31 July 2024
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 January 2024 38,419 4,908 1,606 376,996 23,886 445,815
Return after taxation - - - 21,999 12,890 34,889
Purchase of own shares for treasury - - - (9,602) - (9,602)
Dividends paid 4 - - - - (10,673) (10,673)
Balance at 31 July 2024 38,419 4,908 1,606 389,393 26,103 460,429
The Revenue reserve and the part of the Capital reserve represented by
realised capital gains represent the amount of the Company's reserves
distributable by way of dividend and share buybacks.
The accompanying notes are an integral part of the financial statements.
Condensed Statement of Cash Flows (unaudited)
Six months ended Six months ended
31 July 2025 31 July 2024
£'000 £'000
Operating activities
Net return before finance costs and taxation 11,170 36,312
Adjustments for:
Gains on investments (1,225) (23,080)
Currency losses/(gains) 623 (52)
(Increase)/decrease in accrued dividend income (283) 722
Stock dividends included in dividend income (813) (915)
Increase in other debtors excluding tax (134) (157)
Increase in other creditors 764 128
Net tax paid (750) (698)
Net cash inflow from operating activities 9,352 12,260
Investing activities
Purchases of investments (47,288) (73,396)
Sales of investments 83,450 68,604
Net cash from/(used in) investing activities 36,162 (4,792)
Financing activities
Interest paid (957) (1,007)
Dividends paid (10,253) (10,673)
Buyback of Ordinary shares for treasury (22,670) (9,597)
Drawdown of loan - 5,733
Net cash used in financing activities (33,880) (15,544)
Increase/(decrease) in cash and cash equivalents 11,634 (8,076)
Analysis of changes in cash and cash equivalents during the period
Opening balance 2,329 12,868
Effect of exchange rate fluctuations on cash held 17 52
Increase/(decrease) in cash as above 11,634 (8,076)
Closing balance 13,980 4,844
The accompanying notes are an integral part of the financial statements.
Notes to the Financial Statements (unaudited)
For the six months ended 31 July 2025
1. Accounting policies
Basis of preparation. The condensed financial statements have been prepared in
accordance with Financial Reporting Standard 104 'Interim Financial Reporting'
and with the Statement of Recommended Practice for 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts', issued in July 2022.
They have also been prepared on a going concern basis and on the assumption
that status as an investment trust will be maintained.
The half yearly financial statements have been prepared using the same
accounting policies and methods of computation as the preceding annual
financial statements (year ended 31 January 2025), which were prepared in
accordance with Financial Reporting Standard 102.
2. Income
Six months ended Six months ended
31 July 2025 31 July 2024
£'000 £'000
Income from investments
UK dividend income 6,639 6,832
Overseas dividends 3,851 5,137
Stock dividends 813 915
11,303 12,884
Other income
Income on derivatives 514 1,497
Interest income 12 28
526 1,525
Total income 11,829 14,409
3. Taxation
The taxation charge for the period, and the comparative period, represents
withholding tax suffered on overseas dividend income.
4. Ordinary dividends on equity shares
Six months ended Six months ended
31 July 2025 31 July 2024
£'000 £'000
Third interim dividend 2025 of 3.20p (2024 - 3.20p) 4,309 4,677
Final dividend 2025 of 4.60p (2024 - 4.15p) 5,944 5,996
10,253 10,673
A first interim dividend in respect of the year ending 31 January 2026 of
3.20p per Ordinary share (2025 - 3.20p) was paid on 29 August 2025 to
shareholders on the register on 8 August 2025. The ex-dividend date was 7
August 2025.
5. Returns per share
Six months ended Six months ended
31 July 2025 31 July 2024
p p
Revenue return 7.82 8.92
Capital return (0.34) 15.22
Total return 7.48 24.14
The returns per share are based on the following:
Six months ended Six months ended
31 July 2025 31 July 2024
£'000 £'000
Revenue return 10,163 12,890
Capital return (448) 21,999
Total return 9,715 34,889
Weighted average number of Ordinary shares 129,905,893 144,501,086
6. Capital reserves
The capital reserve reflected in the Condensed Statement of Financial Position
at 31 July 2025 includes gains of £62,448,000 (31 January 2025 - gains of
75,196,000) which relate to the revaluation of investments held at the
reporting date.
7. Net asset value
Equity shareholders' funds have been calculated in accordance with the
provisions of Financial Reporting Standard 102. The analysis of equity
shareholders' funds on the face of the Condensed Statement of Financial
Position does not reflect the rights under the Articles of Association of the
Ordinary shareholders on a return of assets. These rights are reflected in the
net asset value and the net asset value per share attributable to Ordinary
shareholders at the period end, adjusted to reflect the deduction of the Loan
Notes at par. A reconciliation between the two sets of figures is as follows:
31 July 2025 31 January 2025
Net assets attributable (£'000) 405,435 428,528
Number of Ordinary shares in issue at the period end(A) 127,153,759 134,949,033
Net asset value per Ordinary share 318.85p 317.55p
(A) Excluding shares held in treasury
31 July 2025 31 January 2025
Adjusted net assets £'000 £'000
Net assets attributable (as above) 405,435 428,528
Unamortised Loan Notes issue expenses (244) (248)
Adjusted net assets attributable 405,191 428,280
Number of Ordinary shares in issue at the period end(A) 127,153,759 134,949,033
Adjusted net asset value per Ordinary share 318.66p 317.36p
(A) Excluding shares held in treasury.
31 July 2025 31 January 2025
Net assets - debt at fair value £'000 £'000
Net assets attributable 405,435 428,528
Amortised cost Loan Notes 29,756 29,752
Market value Loan Notes (22,862) (23,114)
Net assets attributable 412,329 435,166
Number of Ordinary shares in issue at the period end(A) 127,153,759 134,949,033
Net asset value per Ordinary share - debt at fair value 324.28p 322.47p
(A) Excluding shares held in treasury.
8. Transaction costs
During the period expenses were incurred in acquiring or disposing of
investments classified as fair value through profit or loss. These have been
expensed through capital and are included within gains/(losses) on investments
in the Condensed Statement of Comprehensive Income. The total costs were as
follows:
Six months ended Six months ended
31 July 2025 31 July 2024
£'000 £'000
Purchases 237 246
Sales 41 42
278 288
9. Fair value hierarchy
FRS 102 requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or
liabilities that the entity can access at the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are
observable (ie developed using market data) for the asset or liability, either
directly or indirectly.
Level 3: inputs are unobservable (ie for which market data is unavailable) for
the asset or liability.
The financial assets and liabilities measured at fair value in the Condensed
Statement of Financial Position are grouped into the fair value hierarchy at
the reporting date as follows:
Level 1 Level 2 Level 3 Total
As at 31 July 2025 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted equities a) 431,835 - - 431,835
Total 431,835 - - 431,835
Level 1 Level 2 Level 3 Total
As at 31 January 2025 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted equities a) 472,652 - - 472,652
Total 472,652 - - 472,652
a) Quoted equities. The fair value of the Company's investments in quoted
equities has been determined by reference to their quoted bid prices at the
reporting date. Quoted equities included in Fair Value Level 1 are actively
traded on recognised stock exchanges.
10. Analysis of changes in net debt
At Currency Non-cash At
31 January 2025 differences Cash flows movements 31 July 2025
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 2,329 17 11,634 - 13,980
Debt due within one year (18,907) (640) - - (19,547)
Debt due after more than one year (29,752) - - (4) (29,756)
(46,330) (623) 11,634 (4) (35,323)
At Currency Non-cash At
31 January 2024 differences Cash flows movements 31 July 2024
Analysis of changes in net debt £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 12,868 52 (8,076) - 4,844
Debt due within one year (13,307) (47) (5,686) - (19,040)
Debt due after more than one year (29,745) - - (4) (29,749)
(30,184) 5 (13,762) (4) (43,945)
A statement reconciling the movement in net funds to the net cash flow has not
been presented as there are no differences from the above analysis.
11. Transactions with the Manager
The Company has an agreement with abrdn Fund Managers Limited (the "Manager")
for the provision of investment management, secretarial, accounting and
administration and promotional activity services.
The management fee is calculated and charged, on a monthly basis, at 0.45% per
annum on the first £225 million, 0.35% per annum on the next £200 million
and 0.25% per annum on amounts over £425 million of the net assets of the
Company, with debt at par and excluding commonly managed funds. The management
fee is chargeable 40% to revenue and 60% to capital. During the period
£815,000 (31 July 2024 - £872,000) of investment management fees were
payable to the Manager, with a balance of £272,000 (31 July 2024 - £292,000)
being due at the period end. There were no commonly managed funds held in the
portfolio during the six months to 31 July 2025 (2024 - none).
The management agreement may be terminated by either party on not less than
six months' written notice. On termination by the Company on less than the
agreed notice period the Manager would be entitled to receive fees which would
otherwise have been due up to that date.
The Manager also receives a separate promotional activities fee which is based
on a current annual amount of £223,000 payable quarterly in arrears. During
the period £114,000 (31 July 2024 - £100,000) of fees were payable to the
Manager, with a balance of £75,000 (31 July 2024 - £17,000) being due at the
period end.
12. Segmental information
The Company is engaged in a single segment of business, which is to invest
mainly in equity securities. All of the Company's activities are interrelated,
and each activity is dependent on the others. Accordingly, all significant
operating decisions are based on the Company as one segment.
13. Half Yearly Financial Report
The financial information contained in this Half Yearly Financial Report does
not constitute statutory accounts as defined in Sections 434 - 436 of the
Companies Act 2006. The financial information for the six months ended 31 July
2025 and 31 July 2024 has not been audited.
The information for the year ended 31 January 2025 has been extracted from the
latest published audited financial statements which have been filed with the
Registrar of Companies. The report of the auditor on those accounts contained
no qualification or statement under Section 498 of the Companies Act 2006.
14. Approval
This Half Yearly Financial Report was approved by the Board on 24 September
2025.
Alternative Performance Measures ("APMs")
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash flows,
other than financial measures defined or specified in the applicable financial
framework. The Company's applicable financial framework includes FRS 102 and
the AIC SORP. The Directors assess the Company's performance against a range
of criteria which are viewed as particularly relevant for closed-end
investment companies.
Discount to net asset value per share with debt at fair value
The discount is the amount by which the share price is lower than the net
asset value per share with debt at fair value, expressed as a percentage of
the net asset value with debt at fair value.
31 July 2025 31 January 2025
Share price (p) a 297.00p 285.00p
NAV per Ordinary share (p) b 324.28p 322.47p
Discount (a-b)/a 8.4% 11.6%
Dividend yield
Dividend yield is calculated using the Company's historic annual dividend per
Ordinary share divided by the share price, expressed as a percentage.
31 July 2025 31 January 2025
Annual dividend per Ordinary share (p) a 14.20p 14.20p
Share price (p) b 297.00p 285.00p
Dividend yield a/b 4.8% 5.0%
Net gearing
Net gearing measures total borrowings less cash and cash equivalents divided
by shareholders' funds, expressed as a percentage. Under AIC reporting
guidance cash and cash equivalents includes net amounts due to and from
brokers at the period end as well as cash and short term deposits.
31 July 2025 31 January 2025
Borrowings (£'000) a 49,303 48,659
Cash (£'000) b 13,980 2,329
Amounts due to brokers (£'000) c 255 368
Amounts due from brokers (£'000) d 6,854 -
Shareholders' funds (£'000) e 405,435 428,528
Net gearing (a-b+c-d)/e 7.1% 10.9%
Ongoing charges
The ongoing charges ratio has been calculated based on the total of investment
management fees and administrative expenses less non-recurring charges and
expressed as a percentage of the average daily net asset values with debt at
fair value published throughout the year. The ratio for 31 July 2025 is based
on forecast ongoing charges for the year ending 31 January 2026.
31 July 2025 31 January 2025
Investment management fees (£'000) a 1,619 1,727
Administrative expenses (£'000) b 817 898
Less: non-recurring charges (£'000) c (13) (104)
Ongoing charges (£'000) 2,423 2,521
Average net assets (£'000) d 413,351 446,732
Ongoing charges ratio (a+b+c)/d 0.59% 0.56%
The ongoing charges ratio provided in the Company's Key Information Document
is calculated in line with the PRIIPs regulations, which includes financing
and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price has
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. Share price and NAV total
returns are monitored against open-ended and closed-ended competitors, and the
Reference Index, respectively.
Share
Six months ended 31 July 2025 NAV Price
Opening at 1 February 2025 a 322.5p 285.0p
Closing at 31 July 2025 b 324.3p 297.0p
Price movements c=(b/a)-1 +0.6% +4.2%
Dividend re-investment(A) d +2.5% +2.9%
Total return c+d +3.1% +7.1%
Share
Year ended 31 January 2025 NAV Price
Opening at 1 February 2024 a 309.0p 276.0p
Closing at 31 January 2025 b 322.5p 285.0p
Price movements c=(b/a)-1 +4.4% +3.3%
Dividend re-investment(A) d 4.6% 5.1%
Total return c+d +9.0% +8.4%
(A) NAV total return involves investing the net dividend in the NAV of the
Company with debt at fair value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net dividend in
the share price of the Company on the date on which that dividend goes
ex-dividend.
By order of the Board
abrdn Holdings Limited
Company Secretary
24 September 2025
Please note that past performance is not necessarily a guide to the future and
the value of investments and the income from them may fall as well as rise.
Investors may not get back the amount they originally invested
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