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RNS Number : 5178F  Edinburgh Investment Trust PLC  22 May 2026

Edinburgh Investment Trust (EDIN)

22/05/2026

Results analysis from Kepler Trust Intelligence

Edinburgh Investment Trust (EDIN) released annual results for the year to
31/03/2026, reporting NAV and share price total returns of 7.2% and 8.5%,
compared to the FTSE All-Share's 21.5% return. Short-term underperformance has
hit the trust's previously strong five-year numbers. However, over the six
years since the appointment of the Liontrust management team, EDIN remains
ahead, delivering annualised NAV and share price total returns of 13.9% and
15.0%, respectively, compared to the index's 13.6%. The total dividend for the
year has grown 11.! (subject to approval) and the board is also tweaking the
timing of EDIN's dividends For the 2027 financial year and beyond, this means
shareholders will receive four equally-spaced dividends, closing the current
four-month gap between the final dividend and the first dividend of a new
financial year, a change the board believes will be more appealing to
investors.

Kepler View

Edinburgh Investment Trust's (EDIN) full year results tell two distinct
stories, and it's worth separating them. The trust has two core objectives: to
grow the dividend ahead of UK inflation, and to outpace the total return of
the FTSE All-Share Index. On the first, it is delivering convincingly. The
full-year dividend of 32p per share, subject to shareholder approval,
represents growth of 11.1%, comfortably outpacing UK inflation at 3.3%, with
revenue earnings per share growing 6.3% to 26.6p. Whilst this does not fully
cover the dividend, with the 5.4p gap funded from capital, the direction of
travel is positive. Additionally, EDIN's dividend is supported from healthy
revenue reserves, covering c. 1.1× the last annual dividend, and a larger
distributable capital reserve. At a current yield of 4.1%, a premium to both
its peer group average and the broader UK market, and with portfolio dividend
growth expected to remain in the mid-to-high single digits, the income case is
compelling, in our view.

On the second objective, however, the trust has fallen short. Underperformance
over the year has stemmed largely from a few specific factors: a
quality-growth bias in a year when value, banks and defence dominated,
compounded by a sharp sentiment-driven derating of holdings the market
labelled AI losers, with Rightmove, AutoTrader and Baltic Classifieds most
visibly impacted. Manager Imran Sattar disputes that characterisation, arguing
these dominant, cash-generative marketplace businesses have deep economic
moats that AI is far more likely to enhance over the long-run, rather than
disrupt.

During the reported period, Imran has not stood still, taking advantage of
market volatility by adding to de-rated data and analytics names he believes
are, in contrast to the market, longer-term AI winners like Softcat, LSEG and
RELX. He's also topped up existing, quality compounders experiencing cyclical
weakness including Renishaw and Oxford Instruments whilst also initiating
recovery plays in deeply depressed UK construction stocks such as Ibstock. The
portfolio is nudging toward better style balance without abandoning its
quality-growth roots, something we view as a considered evolution rather than
a reactive one, and a reminder of how active management should respond as
markets and opportunities shift.

Looking ahead, the backdrop remains challenging. Geopolitical tensions
persist, complicating both inflation and interest rate outlooks, with rate
cuts that looked likely now firmly off the table. For a trust with a
quality-growth bias, higher-for-longer rates are a direct headwind,
compressing valuations on longer-duration assets whilst simultaneously
supporting the broader financials sector, where EDIN remains underweight. It's
also worth acknowledging that if value and capital-intensive sectors continue
to lead, or AI sentiment toward capital-light businesses remains negative, the
performance headwinds could persist. That said, at a discount of 8.2%, in line
with its five-year average, investors are not being asked to pay a premium for
that uncertainty. For those willing to take the longer view, a growing income
stream ahead of inflation paired with a repositioned portfolio of
high-quality, cash-generative businesses that could pick up quickly if
sentiment turns, makes a compelling case.

CLICK HERE TO READ THE FULL REPORT
(https://www.trustintelligence.co.uk/investor/articles/news-investor-results-analysis-edinburgh-investment-trust-retail-may-2026?utm_source=RNS&utm_medium=news)

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(http://www.trustintelligence.co.uk/investor?utm_source=RNS&utm_medium=news)
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