REG-Invesco Bond Income Plus Limited: Annual Financial Report
Yesterday 07:02
Invesco Bond Income Plus Limited
Annual Financial Report for year ended 31 December 2025
The following text is extracted from the Annual Financial Report of the
Company for the year ended 31 December 2025. All page numbers below refer to
the Annual Financial Report which will be made available on the Company’s
website
Highlights
• Net asset value (‘NAV’) and share price total
returns with dividends reinvested for the year of 8.7% and 8.0% respectively
(1) .
• Shares traded at a premium for majority of 2025
leading to a strong demand for shares resulting in 34.95m shares being issued,
raising gross proceeds of £60.50m.
• In addition strong issuance demand continued in 2026
with a further 20.12m shares issued, including a successful placing and retail
offer, raising £34.97m in gross proceeds.
• Dividend increased to 12.25p per share for 2025.
Dividend target of 12.25p per share unchanged for 2026.
• Dividend continues to be fully covered by current
year net revenue along with revenue reserve growth.
(1) Alternative Performance Measure (‘APM’). See
Glossary of Terms and Alternative Performance Measures on pages 78 to 81 of
the financial report for details of the explanation and reconciliations of
APMs.
Financial Information and Performance Statistics
Net asset value – total return with dividends reinvested
2025 2024
Total Return Statistics with dividends reinvested (1)(2)
Net asset value – total return with dividends reinvested 8.7% 8.5%
Share price – total return with dividends reinvested 8.0% 8.8%
Capital Statistics
At 31 December 2024 2023 change %
Net assets (£’000) 410,275 345,799 +18.6
Net asset value per ordinary share (2) 172.87p 170.87p +1.2
Share price (1) 175.00p 174.00p +0.6
Premium (2) 1.2% 1.8%
Gearing (2)
– gross gearing 9.3% 13.1%
– net gearing 2.8% 9.9%
Performance Statistics
Year Ended 31 December 2025 2024 change %
Revenue return per ordinary share 13.07p 12.08p
Capital return per ordinary share 1.08p 1.57p
Total return 14.15p 13.65p
Dividend per ordinary share for the year 12.2500p 11.6875p +4.8
Ongoing Charges Ratio (2) 0.88% 0.89%
(1) Source: LSEG Data & Analytics.
(2) Alternative Performance Measure (APM). See Glossary
of Terms and Alternative Performance Measures on pages 78 to 81 of the
financial report for details of the explanation and reconciliations of APMs.
Chairman’s Statement
High yield markets benefitted from a largely favourable macroeconomic and
political environment in 2025. Modest economic growth and subdued inflation
allowed central banks to continue to ease monetary policy and in the UK the
Bank of England reduced interest rates on four occasions while in the USA the
Federal Reserve implemented three rate cuts in 2025. In contrast to 2024
politics took more of a backseat although President Trump’s ‘Liberation
Day’ tariff announcements on 2 April 2025 did result in a bout of market
nervousness. High yield markets made good progress and credit spreads – a
key barometer of market confidence – settled around the lower end of their
historical ranges.
Performance
The Company’s NAV and share price total returns for the year were 8.7% and
8.0%, respectively. The 8.7% NAV return was higher than both the 7.4% achieved
by the ICE Bank of America Merrill Lynch European High Yield Index (‘the
Index’) and the average return of 7.3% for funds in the Investment
Association Sterling Strategic Bond Sector. The Company’s investment
performance continues to compare favourably with the Index over the longer
term. For the five and ten years to the end of 2025 the Company’s NAV total
return was 23.9% and 76.5% respectively compared to total returns of 25.4% and
68.6% for the Index.
Income Account
It is pleasing to report that we were once again able to increase the dividend
paid to shareholders. We announced a dividend for 2025 of 12.25p per share, a
4.8% increase on the 11.6875p per share for 2024. Our dividend yield of 7%
comfortably exceeded the rate of inflation and the dividend was 1.07x covered
by earnings.
The dividend was paid in four instalments, with the fourth dividend payment on
the 20 February 2026 in the form of an interim dividend. Paying the final
instalment in the form of an interim dividend means that it can be made
earlier than would be the case had we declared a final dividend since this
would require approval at the Annual General Meeting later in the year.
We expect to continue the Company’s long record of providing shareholders
with a high level of income relative to interest rates in 2026 and our
dividend target of 12.25p per share remains unchanged. The Company’s
long-term success in providing shareholders with a consistently high level of
income is the result of our Manager’s rigorous investment process and
expertise in managing high yield portfolios. Moreover, we are able to enhance
returns by making use of the powers available to us as an investment company,
for example in our use of gearing which I discuss in more detail later in this
Statement. Lastly, we retained our position as the largest company in our
Association of Investment Companies (‘AIC’) sector and our size means that
we are in a relatively good position to spread the costs of running the
Company.
Discount/Premium
The vast majority of investment trusts have traded at wide discounts to their
NAV’s since the start of 2022. Despite this backdrop, demand for the
Company’s shares remained very encouraging and our share price remained at a
healthy premium to NAV throughout 2025, ending the year at a premium of 1.2%.
Where the Board is able to reduce the gap between our share price and NAV we
will take action and in 2025 we continued to issue shares to meet the strong
demand for shares. We issued a total of 34,950,000 shares during the year and
since the start of 2026 we have issued a further
20,122,588 shares, including a successful placing of 14.37 million shares in
February.
Invesco Bond Income Plus Limited is the product of the merger in May 2021
between City Merchants High Yield Trust Limited and Invesco Enhanced Income
Limited and as we approach the fifth anniversary of the merger it is extremely
pleasing to be able to report that the Company has grown its shares in issue
by a total 40.8% in the period following the merger. New shares are issued at
a small premium to NAV which ensures that existing shareholders are not
disadvantaged while the growth in the Company also benefits shareholders by
increasing the liquidity of our shares.
Ongoing Charges
A key objective for the Board is to ensure that the costs incurred in managing
the Company are competitive and we use the Company’s ongoing charges ratio
(OCR) to measure these costs. Details of the OCR can be found on page 12 . The
OCR for the year was 0.88% compared to 0.89% in the previous year. The growth
in our shares in issue discussed in the previous paragraphs provides a further
benefit to shareholders in that it allows us to spread the Company’s fixed
costs over a larger base and hence to place downward pressure on our OCR. I am
pleased to report that our OCR remains the lowest within our AIC sector (Debt
– Loans and Bonds).
Gearing
The degree to which the portfolio is geared is determined by the Portfolio
Managers according to their assessment of the opportunities and risks within
the high yield market. The maximum amount of borrowing is 30% of total assets
and throughout the year the Company maintained a geared portfolio. As at 31
December 2025 gross gearing was 9.3% (13.1% as at the 31 December 2024). Net
gearing was 2.8% at year-end compared to 9.9% at the start of the year. Our
preferred method of gearing remains the use of repurchase agreements (‘repo
agreements’), which are described in more detail on page 12 .
The Board
In June this year I will complete nine years with the Board and consequently,
in accordance with good corporate governance practice, I will not seek
re-election at the 2026 AGM. As a result of our succession planning and
subject to regulatory approval, I am delighted to report that Mark Bridgeman
will succeed me as Chair. Mark will be appointed to the Board following the
conclusion of the 2026 AGM. Mark’s background is in investment management
and he will bring extensive financial and leadership qualities to the Board. I
have no doubt that the Company will continue to flourish under his leadership.
I would like to take this opportunity in what is my final Chairman’s
Statement to thank all colleagues past and present who have ensured that my
time with the Company has been enjoyable and rewarding.
Marketing, Investor Engagement and Communication
A primary focus for your Board, both last year and continuing into the current
year, is to raise the Company’s profile and expand the pool of investors
familiar with its investment proposition and strong track record. Ultimately,
the Board aims to grow the Company’s size, which is expected to enhance
share liquidity and reduce the ongoing charges ratio.
As part of this focus, over the last 12 months the Board has reviewed the
Company’s marketing and communications strategy and refreshed the value
proposition and agreed improvements to the Company’s dedicated page on the
Investment Manager’s website at www.invesco.co.uk/bips.
Engaging with our shareholders is of utmost importance. Over the past year,
your Investment Manager has actively sought opportunities to meet with
shareholders and prospective investors, both virtually and in person, to
discuss the Company’s strategy, performance, and outlook. We greatly value
the feedback received. Should you wish to communicate with the Board or the
Investment Manager, please reach out via email at
investmenttrusts@invesco.com.
If you have not already done so, we encourage you to sign up for
updates on the Company, its portfolio, and insights from your
Portfolio Managers. You can do this by scanning the QR
code below with your smartphone or device,
visiting the Company’s dedicated page on the Investment
Manager’s website at
https://digitalservices.invesco.com/uk/en/investment-trusts-subscriptions, or
by contacting Invesco directly at investmenttrusts@invesco.com.
AGM
The AGM will be held on 17 June 2026 at 9.30am at the Jersey offices of our
Company Secretary. Further details of the AGM arrangements can be found on
page 35.
Outlook
The immediate outlook for high yield securities is overshadowed by events in
the Middle East. On 28 February 2026 the US and Israel launched coordinated
strikes against the Iranian leadership and key strategic assets. Iran
responded with widespread missile and drone attacks and the consequent
disruption to oil supplies resulted in a surge in oil prices and a growing
risk of rising inflation.
At the time of writing it is unclear how or when the conflict will be resolved
and hence it is extremely difficult to reach any firm conclusions on the
outlook for global economy and financial markets. There is a clear risk Iran
may prevent shipping resuming through the Gulf for an extended period with the
result that inflation would be higher and economic growth lower in 2026. On
the other hand if military action is concluded and the disruption to shipping
turns out to be short lived then I would expect the global economic backdrop
in 2026 to be broadly supportive for corporate earnings, balance sheets and
credit quality.
The Company began 2026 with a relatively conservative exposure to risk
compared to its history. Net gearing is low and the
overall credit exposure is tilted towards higher quality bonds and well
diversified, giving some resilience to potential shocks. Together with this
lower-risk starting point, the Company's closed ended structure makes it well
positioned to take advantage of a sell-off when good quality bonds could be
available at deeply discounted prices, locking in returns for the future.
Furthermore, in an uncertain world a regular, dependable source of income is
key for our shareholders and despite the challenging geopolitical outlook I
have no doubt that your Company will continue to meet this requirement in
2026.
Tim Scholefield
Chairman
31 March 2026
Portfolio Managers’ Report
Q&A
Portfolio Manager
Rhys Davies, CFA, Fund Manager
Rhys is a fund manager for the Invesco Fixed Interest Europe team, based in
our Henley office.
He began his investment career with Invesco in 2002, moving to the Henley
Fixed Interest team in 2003. He became a fund manager in 2014. He manages high
yield credit portfolios.
He holds a BSc (Honours) in Management Science from the University of
Manchester Management School. He is a CFA charterholder.
Deputy Portfolio Manager
Edward Craven, FCA, Fund Manager
Edward is a fund manager for the Invesco Fixed Interest Europe team, based in
our Henley office.
He began his career with KPMG in 2003. In 2008 he moved to The Royal Bank of
Scotland, where he worked in structured finance. He joined the team at Invesco
in 2011 as a credit analyst and became a fund manager in 2020, managing
multi-asset and high yield funds.
He holds a Master’s degree in Physics from the
University of Bath. He is an FCA qualified chartered
accountant.
Q What happened in the bond markets
in 2025?
A Investment in corporate bonds in 2025 was
rewarded with a return well above cash and UK government bonds. For a third
year, high yield bonds delivered returns that were positive and higher than
investment grade. However, returns were lower than in 2023 and 2024 and there
was less incremental return for investors who chose to take more credit risk.
Total return for European High Yield was 7.4% (1) , compared
to 4.3% for cash (2) and 5% for UK gilts (3)
. The sterling investment grade market returned 7.0% (4)
. Most of this 7.4% came from income. The return from price appreciation was
relatively modest. Over the course of the year, the yield to maturity of the
high yield index fell from 6.1% to 5.8%. It peaked near 9% in 2022. The credit
spread tightened from 3.2% to 2.8%. Again, this change is relatively modest
– it was 6.8% in 2022. In 2024 the average bond price in the index rose from
92.0 to 97.8. In 2025 it rose from 97.8 to 98.6.
While the high yield market as a whole outperformed investment grade, lower
credit quality did not outperform within high yield. Spreads tightened more
for higher-quality BB than for lower-quality B rated bonds. In fact, B spreads
widened slightly. So within high yield, prudence was rewarded.
The return of 7.4% for high yield is a reminder of the potential of bonds to
deliver attractive total returns in the world of higher yields we have
inhabited since 2022.
The fundamental backdrop for the market was strong. Interest rates fell. Both
the Bank of England and the European Central Bank cut four times (a total of
1% for each). The market has priced in expectation of another one or two cuts
from the Bank of England this year. The ratio of debt to earnings and the
interest coverage ratio for European high yield companies were steady and
comfortably within the historical range (5) . Issuance of
bonds rose, but so did demand. Money has been flowing into the market steadily
for more than two years (6) .
Viewed in the context of these factors, it makes sense that indicators of the
risk premium in corporate debt, for example the iTraxx XOVER index, are at
multi-year lows. But it is worth remembering that this support has persisted,
almost unbroken, through a year of rapid and unusual political change.
Investors appear to have shown remarkable sang-froid in the face of increased
and volatile trade tariffs, military action and geopolitical volatility in the
Middle East and challenges to the post-World War II system of global
alliances.
Q How did the company perform?
A Over the 12 months to 31 December 2025 the
share price rose from 174.00p to 175.00p. With dividends reinvested, the
Company delivered a share price total return of 8.0%. The net asset value per
share total return with dividends reinvested was 8.7%.
Q What drove this return?
A Our portfolio is focused on higher yielding
bonds, but with a substantial allocation to investment grade. The starting
yield in 2025 for European high yield bonds was 6.1% and for sterling
investment bonds 5.6%. These yields provided the base for our returns, which
were then enhanced by bond and market selection, our leverage strategy and our
trading.
The parts of the portfolio which made the biggest contributions to return
were, as usual, high yield corporate bonds and subordinated financial
securities. Subordinated bank debt was one of the strongest parts of the
market. Although we have become more cautious as valuations have risen,
reducing our overall allocation, we added to positions in some high yielding,
smaller bank names. Across the corporate high yield market, we exercised
caution on valuation.
The ability to use gearing to increase income is a key feature of the
closed-ended structure of the investment trust. Gearing allows us to add
credit exposure. We use it as a tool for our general management approach –
seeking to align the level of risk with our view of the level of available
reward. As valuations have continued to rise over the last couple of years, we
have moderated the level of gearing. At the end of 2024, gross borrowing was
13.1% and net gearing was 9.9%. At the end of 2025, the equivalent numbers
were 9.3% and 2.8%. We manage our leverage in line with our view of market
value. This boosted returns in 2025.
2025 was a generally strong period for our markets, but it was not without its
moments! In particular, markets were weak in the build-up to and immediate
aftermath of the US import tariff announcements in April. This was a quite
short-lived sell-off, but we used it to add to positions, both bonds we
already held and others we had chosen not to buy on the terms on which they
were originally offered to the market. This allowed us to enhance yield and
boost our total return.
Looking at the individual securities which made the largest positive
contributions to returns, financials feature – both smaller banks we added,
such as Atom and
United Trust Bank (UTB), and names bought in April, such
as Aviva . Amongst the biggest
detractors there is less of a sector bias. Some lost value due to poorer
operational performance (for example, the transport company
Mobico Group ), others to changes in their business
environment (for example, gaming name 888.com
, hit by changes to UK gambling taxation).
One additional factor which helped our returns was the decision to slightly
increase the portfolio’s sensitivity to interest rate changes. Our modified
duration averaged 3.8 over the year, which meant that we benefitted more from
government bond yields and the falling rate environment than the general high
yield market.
Q How have you managed your asset
allocation?
A We seek to align our level and type of risk
to the reward available in the market. As credit markets rallied strongly in
2023 and 2024, we reduced our exposure to credit risk. Our allocation to high
yield rated bonds fell from 80% in late-2022 to 68% at the end of 2024.
Investment grade rose.
With the much more modest change in the level of yield in 2025, our
allocations have been more stable, high yield (bonds rated BB+ and below)
declining from 65% to 58%. Investment grade has increased more modestly from
27% to around 30%. Duration remains slightly higher than the high yield
market.
Also, with a view to aligning risk with reward in a more highly valued market,
we have reduced gross portfolio leverage from 13.1% to 9.3%.
One risk we have held a bit more of in the last couple of years is liquidity
risk. As a closed-ended vehicle, the trust does not face the redemption risk
of an open-ended fund. We therefore feel that it is more appropriate in this
portfolio to hold some bonds from smaller bond deals, where there is
consequently likely to be less market liquidity if we want to sell. We have
increased our allocations to bonds in this category over the past several
quarters, to about 7% of our portfolio. The compensation for this risk is
higher coupons.
Index Credit Default Swaps are a useful tool to manage credit risk by taking
long or short exposure to a broad range of underlying bonds, as opposed to
buying or selling individual bonds in the portfolio. We have used them over
the course of 2025 to reduce credit risk, as part of our wider strategy of
holding a more defensive portfolio in an environment of tighter credit
spreads.
Q How is Environmental, Social and
Governance (‘ESG’) integrated in the investment process?
A The portfolio is not bound by any specific
ESG criteria. However, ESG factors are important in our credit analysis and
our investment decisions.
We incorporate ESG considerations in our process when we research companies,
when we engage with companies and as part of ongoing monitoring. Our credit
analysts assign an ESG rating to issuers they cover. One of the resources we
benefit from as part of the wider Invesco team is the data and the expertise
of the Invesco ESG team. The ESG team provides a wide range of services to us,
including portfolio monitoring and meetings with managers to assess
portfolios, along with support for meetings with companies and deep knowledge
on particular ESG issues.
Our analysts have worked hard over several years to assess and monitor the ESG
factors relating to the companies they cover. In 2025, our team had 70 ESG
engagements – either meetings dedicated to ESG issues or ESG discussions
within wider meetings. These interactions tend to cover a wide range of topics
across environmental, social and governance and vary from name to name. For
example, Invesco’s recent engagement with Anglian Water focused on
environmental issues such as pollution incidents and compliance with
wastewater investigations. With Diageo, the meeting covered emissions,
biodiversity initiatives and recycling. Governance questions tend to feature
more for high yield investors than they might for others, due to the higher
proportion of privately owned companies.
Q How is the bond market looking as
we begin 2026?
A Entering 2026, we viewed the market as
well-supported but also quite fully valued. Corporate earnings were growing
and leverage and debt-affordability metrics were far from stressed levels. In
this environment, supply of bonds was high but was matched by demand as money
flowed into the asset class. We had a broadly positive macroeconomic outlook,
although perhaps not so rosy as many economic commentators.
Of greater concern was the tight level of credit spreads, on a historical
basis, and the potential for these to widen in 2026.
The outbreak of military conflict in the Persian Gulf has added a great deal
of risk to the economic outlook. This has been reflected in some market
weakness, but we think there is potential for more. Disruption in energy
supplies impacts inflation directly. Expectations for interest rates have
already risen substantially. For how long the conflict persists is a crucial
unknown. It will have a bearing on the size of the inflationary impulse and on
the extent to which growth is affected as well as inflation. Credit spreads in
our market have widened in recent weeks but they are still relatively low.
We are confident that we can deliver the income needed for the trust’s
dividends while still aligning risk with reward prudently. As set out earlier
in this report, our portfolio is relatively conservative, with substantial
investment grade exposure and less leverage. This positioning was built on the
view we have had for some time – that valuations were high and the reward
for risk was not very attractive. We think it will serve us well in the higher
risk environment we now face, offering some protection. If we see further
weakness, either due to a general heightening in risk-aversion or the
deterioration of corporate fundamentals, we will be eager to assess
opportunities to add exposure to credit-worthy bonds at attractive yields.
(1) ICE BofA European Currency High Yield
Index, hedged to GBP.
(2) UK Treasury Bills 3 Months.
(3) ICE BofA UK Gilt Index.
(4) ICE BofA Sterling Corporate Index.
(5) JP Morgan, High Yield Talking Points -
High Yield Issuer Fundamentals, 20 January 2026.
(6) JP Morgan, European Credit Fund Flows, 9
January 2026.
Rhys Davies Edward Craven
Portfolio Managers
31 March 2026
Business Review
Purpose, Business Model and Strategy
Invesco Bond Income Plus Limited is a Jersey domiciled investment company
which is listed on the London Stock Exchange
The Company’s purpose is to generate returns over the long-term for its
shareholders by investing their pooled capital to achieve the Company’s
investment objective through the application of its investment policy (set out
below) and with the aim of spreading investment risk.
The strategy the Board follows to achieve the objective is to set investment
policy and risk guidelines, together with investment limits, and to monitor
how they are applied.
The business model the Company has adopted to achieve its objective is to
contract investment management and administration to appropriate external
service providers, who are subject to oversight by the Board. The principal
service providers are:
– Invesco Fund Managers Limited (the ‘Manager’) to
manage the portfolio in accordance with the Board’s strategy; and
– JTC Fund Solutions (Jersey) Limited (the ‘Company
Secretary’) to provide company secretarial, compliance and general
administration services.
In addition to the management and administrative functions of the Manager and
the Company Secretary, the Company has contractual arrangements with
Computershare Investor Services (Jersey) Limited to act as registrar and the
Bank of New York Mellon (International) Limited (‘BNYMIL’) as depositary
and custodian.
The Board has oversight of the Company’s service providers, and monitors
them on a formal and regular basis. The Board has a collegiate culture and
pursues its fiduciary responsibilities with independence, integrity and
diligence, taking advice and outside views as appropriate and constructively
challenging and interacting with service providers, including the Manager. The
portfolio managers responsible for the day-to-day management of the portfolio
are Rhys Davies, Portfolio Manager and Edward Craven, Deputy Portfolio
Manager, supported by the wider fixed interest team.
The Company is an alternative investment fund for the purposes of the
Alternative Investment Fund Managers Directive.
Investment Objective and Policy
Investment Objective
The Company’s investment objective is to seek to obtain capital growth and
high income from investment, predominantly in high-yielding fixed-interest
securities.
Investment Policy
The Company seeks to provide a high level of dividend income relative to
prevailing interest rates mainly through investment in bonds and other
fixed-interest securities. The Company also invests in equities and other
equity-like instruments consistent with the Investment Objective.
This Investment Policy should be read in conjunction with the descriptions of
Investment Style, Investment Limits, Derivatives and Currency Hedging, and
Borrowings set out below.
Investment Style
The Manager seeks to ensure that the portfolio is diversified, having regard
to the nature and type of securities (including duration, credit rating,
performance and risk measures and liquidity) and the geographic and industry
sector composition of the portfolio. The Company may hold both illiquid
securities (for example, securities where trading volumes are relatively low
and unlisted securities) and concentrated positions (for example, where a high
proportion of the Company’s total assets are comprised of a relatively small
number of investments).
Investment Limits
– the Company may invest in fixed-interest securities,
including but not restricted to preference shares, loan stocks (convertible
and redeemable), corporate bonds and government stocks, up to 100% of total
assets;
– investments in equities may be made up to an
aggregate limit of 20% of total assets;
– the aggregate value of holdings of shares and
securities in a single issuer or company, including a listed investment
company or trust, will not exceed 15% of the value of the Company’s
investments; and
– investments in unlisted investments will not exceed
10% of the Company’s total assets for individual holdings and 25% in
aggregate.
All the above limits are measured at the time a new investment is made.
Derivatives and Currency Hedging
The Company may enter into derivative transactions (including options,
futures, contracts for difference, credit derivatives and interest rate swaps)
for the purposes of efficient portfolio management. The Company will not enter
into derivative transactions for speculative purposes.
Efficient portfolio management may include reduction of risk, reduction of
cost and enhancement of capital or income through transactions designed to
hedge all or part of the portfolio, to replicate or gain synthetic exposure to
a particular investment position where this can be done more effectively or
efficiently through the use of derivatives than through investment in
securities or to transfer risk or obtain protection from a particular type of
risk which might attach to portfolio investments.
The Company may hedge against exposure to changes in currency rates to the
full extent of any such exposure.
Borrowings
The Company’s borrowing policy is determined by the Board, which has set a
maximum of 30% of the Company’s total assets. This limit may be varied from
time to time in the light of prevailing circumstances, but has not been
changed since the Company’s incorporation in its current form. The Manager
has discretion to borrow within the limit set by the Board. Any borrowings are
covered by investments in matching currencies to manage exposure to exchange
rate fluctuations.
The Board has reviewed the methods of financing available to the Company
including repo financing whereby a company participates in sale and repurchase
arrangements in connection with its portfolio. Under these arrangements, a
company sells fixed interest securities and is contractually obliged to
repurchase them at a fixed price on a fixed date, whilst retaining economic
exposure to the securities sold. The difference between the (lower) sale price
and the later purchase price is the cost (effectively interest) of the repo
financing. Our preferred method of gearing remains the use of repurchase
agreements and such repo financing agreements are in place and may be used
subject to the aggregate 30% ceiling. At the year end, the sum borrowed using
this method was £38.0 million (2024: £45.1
million). This represents gross gearing of 9.3% with cash and cash
equivalents including margin of 6.5% giving net gearing of 2.8% (2024: gross
gearing of 13.1% with cash and cash equivalents including margin of 3.2%
giving net gearing of 9.9%) (1) .
(1) Alternative Performance Measure (APM). See Glossary
of Terms and Alternative Performance Measures on pages 78 to 81 of the
financial report for details of the explanation and reconciliations of APMs.
Key Performance Indicators
The Board reviews performance by reference to a number of Key Performance
Indicators which include the following:
• Performance
• Dividends
• Premium/Discount
• Ongoing Charges Ratio
Performance
As the Company’s objective is to seek to obtain capital growth and high
income, the performance is best measured in terms of
total return. There is no single index against which the Company’s
performance may be meaningfully assessed. Therefore, the Board refers to a
variety of relevant data and this is reflected in both
the Chairman’s Statement and the Portfolio Managers’ Report on pages 6 to
10. The Manager has a long-term horizon and consequently the Board pays close
attention to returns over three and five years in its assessment of investment
performance. As explained in the Chairman’s Statement, the Board has noted
the performance in the year and is satisfied with the longer term performance
of the portfolio.
Dividends and Dividend Payment Policy
Dividends form a key component of the total return to shareholders and the
Company has adopted a dividend policy to target an annualised dividend of
12.25p per share for 2026. In the year under review all 4 interim dividends
paid to shareholders were 3.0625p totalling 12.25p. Dividends paid over the
last ten years are shown in the table on page 4.
The Board’s Dividend Payment Policy is to pay dividends on a quarterly basis
in May, August, November and February in respect of each accounting year. The
timing of these regular three-monthly payments means that shareholders do not
have an opportunity to vote on a final dividend. Recognising the importance of
shareholder engagement, and although not required by any regulation,
shareholders are given an opportunity to vote on this policy at the
forthcoming AGM.
Premium/Discount
The Board monitors the price of the Company’s shares in relation to their
net asset value and the premium/discount at which the shares trade. Powers are
taken each year to issue and buy back shares, which can assist short term
management, however the level of discount or premium is mostly a function of
investor sentiment and demand for the shares, over which the Board may have
limited influence. The ideal would be for the shares to trade close to their
net asset value. The graph on page 12 shows the premium/discount through the
year. The Company’s shares traded at a premium for the majority of the year,
with the shares only trading at a discount during certain very limited periods
of time due to market factors, but ended the year at a premium of
1.2%.
Ongoing Charges Ratio
The expenses of managing the Company are carefully monitored by the Board. The
standard measure of these is the ongoing charges ratio (OCR), which is
calculated by dividing the sum of such expenses over the course of the year,
including those charged to capital, by the average net asset value. This
ongoing charges ratio provides a guide to the effect on performance of annual
operating costs. The Company’s ongoing charges ratio for the current year
was 0.88%, compared to 0.89% for the previous year. Your Board continues to
believe that costs remain competitive compared to those of similar products.
Investment Process
At the core of the portfolio managers’ philosophy is a belief in active
investment management. They seek to invest where they see the potential for
attractive returns and to avoid risks that they do not think are well
rewarded. Fundamental principles drive a genuinely active investment approach,
with a strong emphasis on value.
The investment process comprises four key elements to deliver the information
the portfolio managers use to make their decisions:
• top down, macroeconomic analysis – examining the
factors that shape the economy;
• credit analysis using internal and external research
with a view to maximising returns from acceptable and understood credit risk
exposure;
• value assessment, considering the risk/return profile
of any bond in relation to cash, core government bonds and the rest of the
fixed interest universe; and
• risk considerations, analysing all holdings to allow
for a comprehensive understanding of risks involved to ensure diversification
of the portfolio.
The portfolio managers enter into the majority of positions with a view to
holding them until their call or maturity date and their investment process is
based on making investments where the yield to maturity or call appears to
them to be at least an adequate reward for the risk. The nature of the high
yield market and the Company’s mandate mean that there will be occasions
when the value the portfolio managers assessed in an investment is fully
realised by the market. On these occasions, they may exit the position before
maturity.
The portfolio managers believe that it is good investment practice to try and
keep the level of turnover low, whilst at the same time recognising that this
should not at any time act as a deterrent to effective portfolio management.
Turnover will generally be very low due to the long term nature of many of the
holdings, and given the closed end nature of the Company, the portfolio
managers are not presented with regular daily inflows and outflows which
require managing.
The portfolio managers also consider environmental, social and governance
(‘ESG’) factors details of which are given on pages
17 to 20.
Internal Control and Risk Management
The Directors have overall responsibility for the Company’s system of
internal controls and are responsible for reviewing the effectiveness of these
controls. This includes safeguarding of the Company’s assets. The Directors
have carried out a robust assessment of the principal and emerging risks
facing the Company, including those that would threaten its business model,
future performance, solvency and liquidity.
The Audit & Risk Committee (the ‘Committee’), on behalf of the Board, has
established an ongoing process for identifying and assessing the risks to
which the Company is exposed by reference to a risk control summary, which
maps the risks, mitigating controls in place, and monitoring and reporting of
relevant information to it. The review of the risk control summary also
incorporated a robust assessment of new and emerging risks for monitoring
purposes.
As part of the process, the Committee has identified five risk categories:
strategic; investment management; third party service providers; regulation
and corporate governance; and operational. An explanation of these categories
follows.
Strategic Risk
The Board sets the Company’s strategy, including setting its objective and
how this should be achieved. The Board assesses the performance of the Company
in the context of the market and macro conditions and gives direction to, and
monitors, the Manager’s actions, and those of other third parties, on behalf
of the Company.
Investment Management Risk
Investment management covers management of the portfolio together with cash
management, gearing and hedging, all being areas the portfolio managers can
control, and which generate the Company’s investment performance.
Third Party Service Providers Risk
The Company has no employees and its Directors are appointed on a
non-executive basis. The Company is reliant on Third Party Service Providers
(‘TPPs’) for its executive functions. The Company’s most significant
TPPs are the Manager, to which portfolio management is delegated as well as
certain administrative services including accounting and marketing and the
Company Secretary. Other significant TPPs are the depositary, custodian,
registrar, external auditor and corporate broker.
Regulation and Corporate Governance Risk
The Company is required to comply with many regulations. For the year under
review these included but were not limited to, the provisions of the Companies
(Jersey) Law 1991, the UK Listing Rules, the Alternative
Investment Fund Managers Directive, the Market Abuse Regulation, the FCA’s
Disclosure Guidance and Transparency Rules, the UK
Corporate Governance Code, the AIC Corporate Governance Code and Statement of
Recommended Practice and International Financial Reporting Standards
(‘IFRS’) Accounting Standards as adopted by the European Union.
Operational Risk
Operational risk covers the day to day operational matters mainly at the
Manager, but also at other TPPs.
A matrix of the risks, set out according to their assessed risk levels after
mitigation, enables the Directors to concentrate on those risks that are most
significant, and also forms the basis of the list of principal risks and
uncertainties on pages 14 and 15. The ratings take into account the Board’s
risk appetite and the ongoing monitoring by the Manager.
Oversight of the control environment is based on the Company’s relationship
with its TPPs, all of which have clearly defined lines of responsibility,
delegated authority, and control procedures and systems. The Company’s main
TPPs, the Manager, Fund Accounting and the Company Secretary, all have, a
‘Three Lines of Defence Model’, which is embedded into their risk
management systems.
The effectiveness of the Company’s internal control and risk management
system is reviewed at least twice a year by the Committee. The Committee
received and considered, together with representatives of the Manager, reports
in relation to operations and systems of internal controls of the Manager,
Company Secretary, accounting administrator, custodian and registrar. The
Committee also receives regular reports from the Company Secretary’s
compliance officer and the Manager’s internal audit and compliance
departments. The Committee also received a comprehensive and satisfactory
report from the depositary at the year end Committee meeting. The Company’s
risk management policies and procedures for financial instruments are set out
in note 19 on pages 63 to 70.
Due diligence is undertaken before any contracts are entered into with any
third party service provider. The Manager regularly reviews, against agreed
service standards, the performance of TPPs through formal and informal
meetings, and by reference to third party independently audited control
reports. The results of the Manager’s reviews are reported to and reviewed
by the Committee. These various reports and reviews did not identify any
significant failings or weaknesses which were relevant to the Company during
the year and up to the date of this Annual Financial Report. If any had been
identified, the required remedial action would have been taken.
Reporting to the Board at each board meeting comprises, but is not limited to:
financial reports, including any hedging and gearing; performance against
relevant indices and the Company’s peers; the portfolio managers’ review,
including of the market, the portfolio, transactions and prospects; revenue
forecasts; and investment monitoring against investment guidelines. The
portfolio managers are permitted discretion within these investment
guidelines, which are set by the Board. Compliance with the guidelines is
monitored daily by the Manager. Any proposed variation to these guidelines is
referred to the Board for consideration and approval.
The Board, through the Management Engagement Committee, formally reviews the
performance of the Manager, the Company Secretary and the other key TPPs
annually. The Board has reviewed and accepted both the Manager’s and Company
Secretary’s whistleblowing policy under which staff of both Invesco Fund
Managers Limited (‘the Manager’) and JTC Fund Solutions (Jersey) Limited
(‘the Company Secretary’) can, in confidence, raise concerns about
possible improprieties or irregularities in matters affecting the Company.
Principal Risks and Uncertainties
The Board has carried out a robust assessment of the risks facing the Company,
including those that would threaten its business model, future performance,
solvency and liquidity. As part of this process, the Board conducted a full
review of the Company’s risk control summary and considered new and emerging
risks. These are not necessarily principal risks for the Company, but may have
the potential to be in the future. In carrying out this assessment, the Board
considered the emerging risks facing the Company including geopolitical risks
and uncertainties such as the ongoing conflicts in Ukraine and the Middle
East, uncertain economic outlook, especially in Europe, USA & the UK as a
result of geo-political tensions, evolving cyber threats (including risks
associated with Artificial Intelligence) and ESG, including climate risk. The
principal risks that follow are those identified by the Board as the most
significant after consideration of mitigating factors and not intended to
cover all the risk categories as shown in the Internal Control and Risk
Management section on page 13.
Category and Principal Risk Description Mitigating Procedures and Ongoing Controls
Strategic Risk
Market and Political Risk The Company invests primarily in fixed interest securities, the majority of which are traded on global security markets. The principal risk for investors in the Company is a significant fall and/or a prolonged period of decline An explanation of market risk and how this is addressed is given in note 19.1 to the financial statements. The Portfolio Managers’ Report summarises particular macro economic factors affecting performance during the year and the portfolio managers’ views on those most relevant to the outlook for the portfolio. The Directors continue to monitor developments closely during this period of heightened uncertainty and are actively assessing any potential implications for the Company.
in these markets. This could be triggered by unfavourable developments globally and/or in one or more regions, such as the current conflicts in Ukraine and the Middle East and other geopolitical tensions and uncertainties and their impact on the global
economy. Since the end of the accounting year, conflict in the Middle East has significantly escalated with the US and Israel launching coordinated strikes against Iran. This escalation has contributed to increased market volatility and disruptions to
global energy supply routes. Market risk also arises from movements in foreign currency exchange rates and interest rates.
Regulatory or Fiscal Changes The Company is incorporated in Jersey which is a low tax jurisdiction subject to global scrutiny. Any adverse global regulatory or fiscal measures taken against such low tax jurisdictions, could negatively impact the Company. The Board receives regular reports from the Manager and Company Secretary which highlight any proposed changes to the regulatory/fiscal regimes which might impact the Company. In 2024, Jersey received a positive report from MoneyVal, the Council of Europe’s permanent monitoring body. MoneyVal concludes that Jersey’s effectiveness in preventing financial crime is among the highest level found in jurisdictions evaluated around the world. More information can be found here: https://www.gov.je/News/2024/Pages/Jersey%E2%80%99sStr engthInCombattingFinancialCrimeIsRecognised.aspx
Wide Discount leading to Shareholder Dissatisfaction The Company’s shares are subject to market movements and can trade at a premium or discount to NAV. Should the Company’s shares trade at a significant discount compared to its peers, then shareholder The Board receives regular reports from both the Manager and the Company’s corporate broker on the Company’s share price performance and level of discount (or premium), together with regular reports on marketing and meetings with shareholders and prospective investors. The Board recognises the importance of the Company’s scale in terms of the aggregate value of its shares in the market (‘market cap’) in creating liquidity and the benefit of a wide shareholder base, and seeks authority to both issue and buy back shares to assist with market volatility. The foundation to this lies in solid investment performance and an attractive level of dividend.
dissatisfaction may result if shareholders cannot realise the value of their investment close to NAV, with the ultimate risk that arbitragers join the share register.
Third Party Service Providers Risk
Unsatisfactory Performance by TPPs Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operations of the Company and affect its Details of how the Board monitors the services provided by the Manager and the other TPPs, and the key elements designed to provide effective internal control, are included in the internal control and risk management section on page 13.
ability to pursue successfully its investment policy and expose it to reputational risk. Disruption to the accounting, payment systems or custody records could prevent the accurate reporting and monitoring of the Company’s financial position.
Cyber Risk The Company’s operational structure means that cyber risk (information technology and physical security, including risks associated with Artificial Intelligence) predominantly arises at its TPPs. This cyber risk includes fraud, sabotage or The Audit & Risk Committee on behalf of the Board periodically reviews TPPs’ service organisation control reports and meets with representatives of the Manager’s Investment Management, Compliance, Internal Audit and Investment Trust teams as well as the Company Secretary’s senior staff and Compliance team. The Board receives periodic updates on the Manager’s and the Company Secretary’s information security arrangements. The Board monitors TPPs’ business continuity plans and testing – including their regular ‘live’ testing of workplace recovery arrangements.
crime perpetrated against the Company or any of its TPPs.
Business Continuity Risk Impact of a major event, such as Covid-19, on the operations of the service providers, including any prolonged disruption. The Manager’s and other TPPs, business continuity plans are reviewed on a regular basis and the Directors are satisfied that the Manager has in place robust plans and infrastructure to minimise the impact on its operations so that the Company can continue to trade, meet regulatory obligations, report and meet shareholder requirements. The Board receives periodic reports from the Manager and TPPs on business continuity processes and has been provided with assurance from them all insofar as possible that measures are in place for them to continue to provide contracted services to the Company.
Viability Statement
This Company is an investment company whose business consists of investing the
pooled funds of its shareholders to provide them with capital growth and a
high income over the long term, predominantly from a portfolio of high
yielding fixed income securities. Long term for this purpose is considered to
be at least five years and the Directors have assessed the Company’s
viability over that period. However, the life of the Company is not intended
to be limited to that or any other period.
The main risks to the Company’s continuation is a significant fall in
markets or a prolonged period of decline due to political uncertainty or other
macro factors outside the Company’s control. This could lead to shareholder
dissatisfaction through failure to meet the Company’s investment objective,
through poor investment performance or the investment policy not being
appropriate in prevailing market conditions, any of which could affect the
demand for and liquidity of the Company’s shares. Accordingly, market and
political/fiscal risks, are deemed by the Board to be the key principal risks
of the Company and are given particular consideration in the continuing
assessment of its long term viability.
The Company’s investment objective and policy are kept under review. The
continued relevance of the investment objective and policy are underlined by
the Company’s annual continuation vote. Last year over 99% of the votes
registered were in favour of continuation and the Board has no reason to
believe that the continuation resolution will not be passed at the forthcoming
and subsequent AGMs.
Performance derives from returns for risk taken. The Portfolio Managers’
Report on pages 9 and 10 sets out the current investment strategy of the
portfolio managers. Whilst there has been an increase in the credit quality of
the portfolio during the year, it remains the case that the portfolio
continues to contain a high level of relatively high-yielding non-investment
grade bonds and these carry a higher risk of default than investment grade
paper. This is discussed further in note 19 to the financial statements. The
Board has adopted investment limits within which the portfolio managers
operate. The Directors and the portfolio managers constantly monitor the
portfolio, its ratings and default risk. A bond rating analysis of the
portfolio at the year end is shown on page 23. Exposure is weighted towards
higher quality issuers where the risk of default is considered to be more
remote.
Performance has been strong for many years through different, and difficult,
market cycles – as shown by the ten year total return performance graph on
page 12. The investment policy has been stress tested by market events in
recent times by both global and domestic events such as the pandemic and the
conflicts in Ukraine and the Middle East. These events
affected performance, but at no time in the past did they threaten the
viability of the Company. Whilst past performance may not be indicative of
performance in the future, the investment policy has been consistent
throughout those past periods.
Performance and demand for the Company’s shares are not things that can be
forecast. Indeed, whilst recent geopolitical and macroeconomic events may
impact the Company, there are no current indications that performance or
demand for the Company’s shares may be permanently affected by such events
over the next five years so as to affect the Company’s viability.
The Company is permitted to borrow up to a maximum of 30% of the Company’s
total assets and currently has no long-term debt obligations. Current
borrowing is in the form of repo financing spread over a number of good
quality counterparties whose credit-standing is reviewed periodically by the
Manager. There is a maximum limit allowed with any one counterparty, and the
repo entered into must have a maturity tenor of three months or less. Debt
levels have been stress tested with more than adequate debt cover in place.
As described in note 19.2 to the financial statements on pages
67 to 68 liquidity risk is not viewed by the Directors as a significant
risk. The majority of the Company’s assets are readily realisable and amount
to many times the value of its short term liabilities and annual operating
costs.
Based on the above analysis, the Directors confirm that they have a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the five year
period of their assessment and the Directors consider that the Company’s
investment strategy will continue to serve shareholders well over the longer
term.
Investment Management
As noted earlier, the Manager provides investment management and certain
administrative services to the Company. The agreement is terminable by either
party giving no less than three months’ prior written
notice and subject to earlier termination without compensation in the event of
a material breach of the agreement or the insolvency of either party. The
management fee is payable quarterly in arrears and is equal to 0.1625% of the
value of the Company’s total assets under management less current
liabilities at the end of the relevant quarter. In addition, the Manager was
paid a fee of £103,000 during the year for marketing
services (2024: £103,000).
The portfolio managers responsible for the day-to-day management of the
portfolio are Rhys Davies, Portfolio Manager and Edward Craven, Deputy
Portfolio Manager.
The Manager’s Responsibilities
The Directors have delegated to the Manager the responsibility for the
investment management activities of the Company, for seeking and evaluating
investment opportunities and for analysing the accounts of investee companies.
The Manager has full discretion to manage the assets of the Company in
accordance with the Company’s stated objectives and policies as determined
from time to time by the Board and approved by shareholders. Within the
guidelines specified by the Board, the Manager has discretion to make
purchases and sales, make and withdraw cash deposits, enter into underwriting
commitments and exercise all rights over the investment portfolio. The Manager
also advises on currency exposures and borrowings.
Assessment of the Manager
The performance of the Manager is reviewed continuously by the Board and the
ongoing requirements of the Company and services received are assessed
annually with reference to key performance indicators as set out on page 12.
The Management Engagement Committee is responsible for reviewing the Manager.
Based on its recent review of activities, the Board believes that the
continuing appointment of Invesco Fund Managers Limited remains in the best
interests of the Company and its shareholders.
Financial Position
The Company’s balance sheet on page 54 shows the assets and liabilities at
the year end. The Company has repo financing agreements
in place, with an amount of £38.0 million (2024: £45.1
million) borrowed at year end, representing gross gearing of 9.3% (2024:
13.1%) and net gearing of 2.8% (2024: 9.9%), after taking cash and cash
equivalents including margin into account, as at 31
December 2025.
Performance and Future Development
The performance and future development of the Company depend on the success of
the Company’s investment strategy. A review of the
Company’s performance, market background, investment activity and strategy
during the year, together with the investment outlook are provided in the
Chairman’s Statement and Portfolio Managers’ Report on pages 6 to 10.
Annual Continuation Vote
The Articles of Association of the Company require that unless an ordinary
resolution is passed at or before the Annual General Meeting (‘AGM’) each
year releasing the Directors from the obligation to do so, the Directors shall
convene a general meeting within six months of the AGM at which a special
resolution would be proposed to wind up the Company. Having reviewed the
performance of the Company, the Directors have no reason to believe that a
resolution to release them from that obligation will not be passed at the AGM
to be held later in the year. Further details can be found in note 2 (a) (ii)
on page 56.
Substantial Holdings in the Company
The Company has been notified of the following holdings of 3% and over of the
Company’s ordinary share capital carrying unrestricted voting rights:
As at 28 February 2026 As at 31 December 2025 As at 31 December 2024
Fund Manager/Registered Holder Holding % Holding % Holding %
Hargreaves Lansdown, stockbrokers (EO) 49,293,992 19.19 44,928,699 18.96 38,088,524 18.83
Interactive Investor (EO) 36,794,502 14.33 34,140,629 14.41 25,386,222 12.55
AJ Bell, stockbrokers (EO) 24,666,816 9.60 20,817,911 8.79 14,946,175 7.39
Invesco* 17,540,155 6.83 17,540,155 7.40 17,540,155 8.67
Redmayne Bentley, stockbrokers 15,540,868 6.05 14,683,425 6.20 10,622,010 5.25
Charles Stanley 10,891,138 4.24 10,515,903 4.44 10,063,995 4.98
HSDL, stockbrokers (EO) 8,803,620 3.43 8,325,810 3.51 6,976,268 3.45
EO: Execution only.
* Held across a number of Invesco Funds. Invesco is not considered a related
party. For further information see Related Party Transactions and Transactions
with Manager note 23 on page 72.
Board’s Duty to Promote the Success of the Company
The Directors have a fiduciary duty to act, in good faith, for the benefit of
shareholders taken as a whole. In the UK, section 172 of
the Companies Act 2006 seeks to codify this duty and to widen the
responsibility to incorporate the consideration of wider relationships that
are necessary for the Company’s sustainability. Although the Company is not
incorporated in the UK, its ordinary shares are listed on the London Stock
Exchange, hence the Board deems it appropriate for the Company to report
against this UK statutory duty, being that the Directors have a duty to
promote the success of the Company, whilst also having regard to certain
broader matters, including the need to engage with employees, service
providers, customers and others, and to have regard to their interests. This
is reflected in the summary of the Board’s responsibilities on pages 38 and
39.
In fulfilling these duties, and in accordance with the Company’s nature as
an investment company with no employees and no customers in the traditional
sense, the Board’s principal concern has been, and continues to be, the
interests of the Company’s shareholders taken as a whole. Notwithstanding
this, the Board has a responsible governance culture and also has due regard
for broader matters so far as they apply. In particular, the Board engages
with the Manager and Company Secretary at every Board meeting and the
Management Engagement Committee also reviews the Company’s relationships
with these and other service providers, such as the registrar, corporate
broker, depositary and custodian, at least annually. The
assessment of the Manager consequent to these reviews is set out above.
The Company formally communicates with its shareholders at least three times a
year providing information about shareholder meetings, dividend payments and
half-yearly and annual financial results. As set out on page 34, the Company
uses a number of methods to engage with its shareholders via regular
communications such as the monthly factsheet and through investor events and
other media channels. The annual general meeting of the Company provides
shareholders with the opportunity to attend and meet with the Directors and
the Manager. The Company’s AGM will be held on 17 June 2026 at 9.30am at the
offices of JTC Fund Solutions (Jersey) Limited. Shareholders are welcome to
attend the AGM in person. Shareholders who cannot attend in person are
encouraged to submit their votes by proxy.
Board Diversity
The Company’s policy on diversity is set out on page 39, under the section
‘Nomination and Remuneration Committee’. The Board considers diversity,
including the balance of skills, knowledge, experience, gender and ethnicity
amongst other factors when reviewing its composition and appointing new
directors. The Board continues to recognise the importance of having a range
of skilled, experienced individuals with the right knowledge represented on
the Board in order to allow it to fulfil its obligations.
In view of its relatively small size, the Board will continue to ensure that
all appointments are made on the basis of merit against the specification
prepared for each appointment. In doing so, the Board will seek to meet the
targets set out in the FCA’s UK Listing Rule 6.6.6R (9)(a), which are
summarised below. In accordance with UK Listing Rule 6.6.6R (9), (10) and (11)
the Board has provided the following information in relation to its diversity
as at 31 December 2025, being the financial year-end of the Company. The
information included in the tables below has been obtained following
confirmation from the individual Directors.
Board Gender as at 31 December 2025
Number of Board members Percentage of the Board Number of senior positions on the Board Number in executive management A Percentage of executive management A
Men 2 40% 1 n/a n/a
Women 3 60% B 1 C,D n/a n/a
A the Company does not disclose the number of directors in executive
management as this is not applicable for an investment trust.
B meets the target of 40% as set out in UKLR 6.6.6R (9)(a)(i).
C the positions of Senior Independent Director and Chair of the Audit & Risk
Committee are held by the same woman (Heather MacCallum). The latter position
is not currently defined as a senior position under LR 9.8.6R (9)(a)(ii).
D meets the target of 1 as set out in UKLR 6.6.6R (9)(a)(ii).
Board Ethnic Background as at 31 December 2025
Number of Board members Percentage of the Board Number of senior positions on the Board Number in executive management A Percentage of executive management A
White British or other White (including minority-white groups) 4 80% 2 n/a n/a
Minority ethnic 1 B 20% 0 n/a n/a
A the Company does not disclose the number of directors in executive
management as this is not applicable for an investment trust.
B meets the target of 1 as set out in UKLR 6.6.6R (9)(a)(iii).
There have been no changes since the year end that have affected the
Company’s ability to meet the targets set in UKLR 6.6.6R (9)(a).
Modern Slavery Act 2015
The Company is an investment vehicle and does not provide goods or services in
the normal course of business, or 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.
Sustainability-related
Matters
In relation to the portfolio, the Company has delegated the management of the
Company’s investments to the Manager. The Manager’s approach to investment
stewardship and to the use of sustainability-related information is outlined
in its UK Stewardship Code Report, which sets out a number of principles that
are intended to be considered in the context of its responsibility to manage
investments in the financial interests of shareholders. A
greenhouse gas emissions statement is included in the Directors’ Report on
page 34.
The Manager forms part of the Invesco Ltd group, which is a signatory to, the
United Nations Principles for Responsible Investment (‘PRI’), Invesco
scored four stars for its Investment & Stewardship Policy in its most recent
PRI assessment. In addition, Invesco is an active member of the UK Sustainable
Investment and Finance Association as well as a supporter of the Task Force on
Climate-related Financial Disclosure (‘TCFD’) since 2019 and Invesco’s
latest iteration of its Global TCFD Report is available at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/ivz_global-tcfd-report.pdf.
The Manager’s investment team may take sustainability-related information
(including selected environmental, social and governance data) into account as
one input among many when evaluating investments, where relevant to the
investment thesis and the Company’s objectives. Third-party data and ratings
may inform analysis but do not determine investment decisions. Investment
professionals are supported by the Manager’s investment stewardship
function, which provides research and engagement support.
Regarding stewardship, the Board considers that the Company has a
responsibility as an investor towards ensuring that appropriate standards of
corporate governance are maintained in the companies in which it invests. To
achieve this, the Board does not seek to intervene in daily management
decisions, but aims to support high standards of governance and, where
necessary, will take the initiative to ensure those standards are met.
The Company’s stewardship functions have been delegated to the Manager. The
Manager has adopted a clear and considered policy towards its responsibility
as an investor on behalf of the Company. As part of this policy, the Manager
takes steps to satisfy itself about the extent to which the companies in which
it invests look after shareholders’ value and comply with local
recommendations and practices, such as the UK Corporate Governance Code. The
Manager is also a signatory of the Financial Reporting Council’s Stewardship
Code, which seeks to improve the quality of engagement between institutional
investors and companies to help improve long-term returns to shareholders and
the efficient exercise of governance responsibilities.
A copy of the current Manager’s UK Stewardship Code Report can be found at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/2024-uk-stewardship-code-report.pdf
How the investment team incorporates sustainable investing in its process
The Invesco Fixed Income team (‘IFI’), of which the portfolio managers are
a part, has managed ESG-aware portfolios for more than two decades and their
approach has consistently evolved. Exclusion based screening once dominated
the ESG landscape, but has since been augmented by positive selection-based
criteria for holdings as well as embedding decarbonisation objectives. This
reflects how industry dynamics have changed and how the appetite for more
sophisticated and targeted sustainability-linked outcomes has grown among
clients.
IFI believes that evaluating ESG criteria leads to better long-term
risk-adjusted returns. With this in mind, IFI looks for a combination of
materiality, momentum, and engagement.
Materiality means being clear about the ESG considerations that have the
potential to most impact an issuer’s ability to meet its debt obligations.
IFI integrate these ESG considerations into their fundamental research
processes by providing an independent assessment of each investment,
complementing third-party ESG ratings and expanding the investable universe to
include issuers that lack external coverage. IFI maintain global standards for
research and investment decision-making, allowing ESG considerations to be
applied across asset classes where appropriate and enhancing comparability
across multi-sector fixed income portfolios.
Momentum means using expert analysis to determine which issuers are outpacing
their peers in terms of making progress on ESG considerations. IFI believes
that a link may exist between positive momentum in ESG characteristics and
improving creditworthiness, which is potentially advantageous for fixed income
prices and investment returns.
Engagement means encouraging momentum by working with Invesco’s Sustainable
Investing Services team and other experts to engage with issuers to provide
our views on matters such as strategy, transparency, capital allocation and
ESG concerns. IFI view active ownership as a vital element of our fiduciary
responsibilities to clients.
The fixed income landscape is broad and varied. It encompasses government
securities issued by countries, securitised debt, loans undertaken by private
companies, and many other forms of asset. Geographical, structural, and
regulatory differences mean that data availability, ESG factors, and
management engagement levels are highly diverse.
As a result, while the underlying approach taken by IFI to ESG is consistent,
the path to arriving at an ESG-based assessment differs to account for the
constraints and challenges posed by a particular asset class. It is important
to highlight that integration is an ongoing strategic effort and these
approaches will continue to evolve.
ESG overview
Although ESG integration forms part of the investment process, the Company is
not managed to sustainable ESG objectives, constraints or outcomes.
The portfolio managers’ approach is centred on macroeconomic and corporate
credit research and focuses on fundamental valuation to support the active
management of portfolios. The Manager has always incorporated ESG analysis
into its investment research because it believes that non-financial risks can
have a material impact on credit risk and by identifying those risks, it can
improve its credit risk assessment and produce better risk-adjusted returns in
portfolios.
The core objective of the Manager’s ESG approach is to assess issuers’
performance across environmental, social and governance factors and to
determine where those risks are potentially material or mispriced.
The fixed income universe is broad and varied. Geographical, structural and
regulatory differences mean that data availability, ESG awareness and
management engagement levels can vary greatly. As a result, while the
investment team’s commitment to ESG risk assessment is constant, the path to
arriving at an ESG-based assessment necessarily differs to account for the
constraints and challenges of different circumstances.
Common Principles for ESG Research
The Invesco team’s approach to ESG is based on a belief that incorporating
material environmental, social and governance risks into a broader risk
assessment, leads to better long-term risk-adjusted returns. In order to do
this, the team considers materiality and momentum.
ESG analysis for corporate bonds
IFI’s credit analysts are tasked with understanding the ESG drivers for the
companies they cover and conducting ESG-based analysis along with their
fundamental financial analysis. This applies across corporate credit research
teams in North America, Europe, and Asia.
IFI’s corporate research follows the same set of standards globally,
encompassing investment grade and high yield issuers, whether an issuer is
based in a developed or an emerging market country. This approach is also
applied to short-dated securities held in IFI-managed global liquidity
products. Analysts are primarily focused on identifying risk factors that
could be financially material, and these may be common to all industry
participants or unique to a specific issuer.
The starting point for ESG assessment is at the industry level. Global sector
teams set out common ESG risk factors for each industry, and individual
analysts work within this framework on each issuer in their coverage area,
while also seeking to identify idiosyncratic ESG risks to which individual
issuers might be exposed.
IFI also use third-party research and data to provide broad market context and
transparency. These external sources supplement our proprietary research and
assist analysts in identifying areas or issues of interest where engagement
with company management is warranted. We engage directly with companies to
better understand their positions and their future intentions. IFI and
industry participants’ increased focus and engagement on ESG factors has
resulted in material improvements in ESG-related issuer reporting and
heightened management focus on governance practices.
IFI has developed its own ESG methodology and grading system to provide clear
and consistent outputs for portfolio managers. Each issuer receives a
proprietary overall ESG grade, accompanied by sub-grades covering the three
pillars of E, S and G. In addition, ESG momentum is captured through trend
assessments, which add further useful information for portfolio managers in
the same way that creditworthiness trend assessments do for fundamental credit
ratings. All ESG research is stored on the Manager’s research platform so
that portfolio managers across asset classes may easily access it.
IFI is committed to continuous innovation and improvement in its ESG corporate
research process. For example, with the increased issuance of green bonds and
growing client interest, we have recently developed specialised templates to
aid in analysing such bonds.
Within the investment team, ESG views are formed by credit analysts and feed
into their fundamental investment recommendations. Analysts work with their
colleagues at a sector level across our global platform to identify key ESG
metrics per sector to consider when analysing individual companies. This all
forms part of the toolkit which portfolio managers have at their disposal when
constructing portfolios.
IFI believes that evaluating ESG criteria leads to better long-term risk
adjusted returns. IFI follows an investment approach that integrates ESG into
the fundamental research carried out by Invesco’s credit research analysts.
Integrating ESG criteria into research provides an independent assessment of
each investment’s suitability for responsible investment strategies to
complement ratings from third party providers or indeed, expand the investable
universe for issuers not yet covered by external providers.
External ESG resources
Invesco has a range of third-party research and data available as an input to
support the analysts in their ESG risk assessment.
Examples:
• MSCI ESG Scores, industry percentiles and weights
• CDP carbon and scoring data
• Sustainalytics Risk scores and category summary data
• Global Compact compliance or violation fields (MSCI
and Sustainalytics)
• ISS Climate Solutions – Scope 1 to 3 emissions and
science-based emission targets
• Controversies – MSCI & Sustainalytics data feeds
Invesco’s Stewardship resources
Invesco’s Global Sustainable Investing Services team has resources in
research, portfolio analytics and management engagement.
Furthermore, Invesco’s own proprietary developed tool – ESGCentral –
brings together multiple external and internal datasets and maps them to
portfolios and benchmarks to provide portfolio and issuer-level sustainability
analytics and screening capabilities for strategies and clients that request
such analysis. Availability varies by dataset, license, and mandate.
In addition to portfolio views, ESGCentral can surface issuer-level analytics
linked to portfolio holdings (and, where relevant, benchmark constituents).
These issuer views provide snapshots of selected indicators, disclosures, and
controversies (with source and date), peer comparisons and point-in-time vs
historical perspectives. Issuer-level analytics are analytical reference views
to support research and stewardship workflows; they do not impose firmwide
criteria or generate compliance determinations.
While disclosure levels vary greatly by the issuer due to sector, size and
regional factors, these data analytics can provide a
comprehensive picture of each issuer’s performance.
The importance of fundamental ESG analysis
At the issuer level, data availability, disclosure rules and management
engagement levels can vary across each global sector. Raw ESG data can
sometimes present a partial or even misleading picture. When placed alongside
the fact that issuers themselves have unique features in terms of business
models, the weighting of ESG factors in each issuer assessment must be
interpreted and understood in a broader context.
In our research process, the qualitative judgement of the credit analyst is
therefore central to determining whether an ESG factor is evolving in a manner
that may compromise an issuer’s financial indicators and ultimately, its
creditworthiness.
ESG in credit selection
Once a credit analyst has undertaken their credit assessment, including that
of the materiality and momentum of ESG risks, then credit research is
presented to portfolio managers.
The portfolio managers need to assess the type and materiality of any ESG risk
and set that against the potential investment return in the context of the
Company’s objectives.
Other than the exclusions related to certain types of munitions, there are no
pre-determined rules on how securities are selected in light of any ESG risks.
Each investment case is likely to have its own unique set of risks. The
investment team’s credit selection emphasises fund manager judgement and
each case is considered on its own merits.
Engagement with issuers
Invesco engages directly with companies to better understand their positions
and their future intentions and lobby for change where Invesco believe it is
necessary. Although engagement as pure debt investors can be challenging,
Invesco’s ownership of both equity and debt can often be used to increase
our voice as a stakeholder. Engagement is carried out on a case by case basis
by relevant analysts and strategically with co-ordination through Invesco’s
Sustainable Investing Services Team.
Invesco’s Sustainable Investing Services Team is led by the Global Head of
ESG. Reporting to the Global Head of ESG is the Director of ESG Research, who
leads the ESG analyst team who in turn focus on ESG company engagement
activity. Invesco has established a global process to ensure that its
ESG-targeted engagements are a collaboration between its Sustainable Investing
Services Team and the investment teams across Invesco who may have interest in
the issuer:
i. Internal assessment and coordination: the Sustainable Investing Services
Team consults with the investment teams and reviews the ESG Engagement focus
list and decides whether to: (a) gather feedback on a topic and provide that
feedback to an issuer; (b) schedule a call with the issuer if it is deemed to
be necessary; or (c) engage directly with the issuer and serve as a liaison.
Invesco’s Sustainable Investing Services Team will arrange contact between
the relevant investment teams and issuers when and if it is deemed necessary.
Any ESG engagement meeting is added to a centralised calendar that investment
teams can access.
ii. Research and follow up: the Sustainable Investing Services
Research team conducts in-depth ESG research in preparation for these
meetings and discusses with the relevant investment teams across Invesco to
ensure that companies are questioned on the key ESG topics. The Sustainable
Investing Services Team produces an Engagement Report for these meetings which
is shared via the Bloomberg platform for all relevant investment teams to
access. Invesco is also a member of several organisations that facilitate
collective dialogue with companies and continues to assess other collective
engagements that we would like to work more closely with in the future.
ESG portfolio reviews
Dedicated ESG-focused portfolio reviews are in place to complement the
existing risk-return portfolio review process. Invesco’s Global Sustainable
Investing Services team leads each review meeting which is attended by fund
managers and credit research analysts. Portfolios are reviewed on the basis of
a wide range of ESG metrics on an absolute basis and also relative to
benchmarks where appropriate.
ESG portfolio monitoring includes measurement, based on Sustainalytics ESG
research data, of total portfolio ESG risk and identification of holdings with
the highest and lowest ESG risk. As of the end of 2025, holdings with the
highest ESG risk were concentrated in the energy sector. The holdings with the
lowest ESG risk were spread across several sectors.
Invesco also carry out Carbon Footprint Analysis of the portfolio, in absolute
terms and compared to the wider high yield market, using data from ISS Climate
Solutions.
Task Force on Climate-related Financial Disclosures (‘TCFD’)
Whilst TCFD is currently not applicable to the Company, the
Manager has produced a product level report on the Company
in accordance with the Financial Conduct Authority’s (‘FCA’) rules
and guidance regarding the disclosure of climate-related financial information
consistent with TCFD Recommendations and Recommended Disclosures. These
disclosures are intended to help meet the information needs of market
participants, including institutional clients and consumers of financial
products, in relation to the climate-related impact and risks of the
Manager’s TCFD in-scope business. The product level report on the Company is
available on the Managers’ website at www.invesco.co.uk/bips. Key elements
of the product level report include a scenario analysis of how climate change
is likely to impact the portfolio valuation under net zero 2050, delayed
transition and hothouse scenarios, and a discussion of the most significant
drivers of performance under those scenarios.
Invesco’s Group Level Task Force on Climate-Related Financial Disclosures
(‘TCFD’) is available on the Managers’ Website at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/ivz_global-tcfd-report.pdf.
In addition the Managers’ Entity Level TCFD Report is available at
https://www.invesco.com/content/dam/invesco/emea/en/pdf/IFML_and_IAML_tcfd-entity-level_report.pdf.
The reports noted above are in the process of being updated for the period to
31 December 2025 and will be made available via the respective websites by 30
June 2026.
Investments in Order of Valuation
at 31 December 2025
Market
Country of Value % of
Issuer/issue Rating(1) Industry Incorporation £’000 Portfolio
Lloyds Banking Group Financials UK
7.875% FRN Perpetual (AT1) Baa3/BBB–/BBB 7,200 1.7
8.5% Cnv FRN Perpetual (AT1) Baa3/BBB–/BBB 3,275 0.8
8.5% Cnv FRN 27 Mar 2071 (AT1) Baa3/BBB–/BBB 1,478 0.4
11,953 2.9
Nationwide Financials UK
7.875% FRN Perpetual (AT1) Baa3/NR/BBB 4,401 1.1
10.25% Perpetual (CCDS) NR/NR/NR 3,911 0.9
7.5% Cnv FRN Perpetual (AT1) Baa3/BB+/BBB 3,493 0.8
11,805 2.8
Barclays Financials UK
9.25% Cnv FRN Perpetual (AT1) Ba1/BB+/BB 5,334 1.3
FRN 14 Nov 2032 Baa1/BBB/BBB 3,825 0.9
8.5% FRN Perpetual (AT1) Ba1/BB+/BB 965 0.2
8.875% Cnv FRN Perpetual (AT1) Ba1/BB+/BB 767 0.2
10,891 2.6
Aviva Financials UK
6.875% Cnv FRN Perpetual Baa2/NR/BBB 5,782 1.4
7.75% FRN Perpetual Baa2/NR/BBB 4,739 1.1
10,521 2.5
Co-Operative Bank Financials UK
11.75% 22 May 2034 Baa2/NR/BBB 4,129 1.0
9.5% Cnv FRN 24 May 2028 (SNR) Baa2/NR/BBB 1,647 0.4
6% FRN 06 Apr 2027 (SNR) Baa2/NR/BBB 1,421 0.3
7.5% FRN 08 Jul 2026 NR/BB–/BB 1,008 0.3
8,205 2.0
Eléctricité De France Utilities France
7.375% FRN Perpetual Ba2/B+/BB 2,976 0.7
5.875% Perpetual Ba2/B+/BB 1,804 0.4
6% Perpetual Baa1/BBB/BBB 1,503 0.4
7.5% FRN Perpetual Ba2/B+/BB 951 0.2
5.625% FRN Perpetual Ba2/B+/BB 908 0.2
8,142 1.9
Thames Water Finance Utilities UK
7.75% 30 Apr 2044 Caa3/CCC/CCC 4,869 1.1
8.25% 25 Apr 2040 (SNR) Caa3/CCC/CCC 2,024 0.5
9.75% 10 Oct 2027 B2/NR/B 1,145 0.3
0% 22 Mar 2027 NR/NR/NR 63 0.0
4.625% 19 May 2026 (SNR) NR/NR/NR 20 0.0
8,121 1.9
BNP Paribas Financials France
9.25% FRN Perpetual (AT1) Ba1/BBB–/BBB 6,503 1.6
FRN Perpetual (AT1) Ba1/BBB–/BBB 1,358 0.3
7,861 1.9
OSB Financials UK
7.75% FRN Perpetual (AT1) Ba2/NR/BB 3,599 0.8
8.875% Cnv 16 Jan 2030 (SNR) Baa2/NR/BBB 1,952 0.5
Cnv FRN 27 Jul 2033 Baa3/NR/BBB 1,653 0.4
7,204 1.7
Engineering Ingegneria Informatica Technology Italy
11.125% 15 May 2028 B3/B–/B 4,150 1.0
FRN Perpetual B3/B–/B 1,951 0.5
8.625% 15 Feb 2030 (SNR) B3/B–/B 934 0.2
7,035 1.7
Market Bidco Finco Consumer Goods UK
8.75% 31 Jan 2031 (SNR) B1/B+/B 3,943 1.0
6.75% 31 Jan 2031 (SNR) B1/B+/B 3,032 0.7
6,975 1.7
Ineos Quattro Basic Materials UK
7.25% 31 Mar 2031 (SNR) B2/BB–/BB 2,999 0.7
6.75% 15 Apr 2030 (SNR) B3/BB–/BB 1,602 0.4
8.5% 15 Mar 2029 (SNR) B3/BB–/BB 1,038 0.2
7.5% 15 Apr 2029 (SNR) B2/BB–/BB 754 0.2
9.625% 15 Mar 2029 (SNR) B3/BB–/BB 309 0.1
6,702 1.6
Jerrold Finco Financials UK
7.875% 15 Apr 2030 NR/BB/BB 3,551 0.9
7.5% 15 Jun 2031 (SNR) NR/BB/BB 3,067 0.7
6,618 1.6
Techem Consumer Services Germany
FRN 15 Jul 2032 (SNR) B2/B+/B 6,592 1.6
Zopa Group Financials UK
14.4% FRN 25 Nov 2033 NR/NR/NR 4,459 1.1
12.875% FRN Perpetual (AT1) NR/NR/NR 2,120 0.5
6,579 1.6
UK Treasury Bill Government Bonds UK
0.5% 22 Oct 2061 Aa3/AA/AA 3,129 0.7
3.75% 22 Oct 2053 Aa3/AA/AA 2,356 0.6
4% 22 Oct 2063 Aa3/AA/AA 772 0.2
6,257 1.5
Natwest Financials UK
7.5% Cnv FRN Perpetual (AT1) Baa3/NR/BBB 3,665 0.9
7.625% FRN Perpetual (AT1) Baa3/NR/BBB 1,475 0.4
Cnv FRN 6 Jun 2033 Baa1/BBB+/BBB 947 0.2
6,087 1.5
Saffron Building Society Financials UK
Cnv FRN 19 Oct 2034 NR/NR/NR 5,996 1.4
Volkswagen Financial Services Consumer Goods Netherlands
5.994% FRN Perpetual Baa3/BBB–/BBB 5,867 1.4
Atom Financials UK
Cnv FRN 08 Jan 2035 NR/NR/NR 5,663 1.4
Vodafone Group Basic Materials UK
8% FRN Perpetual (SUB) Ba1/BB+/BB 5,450 1.3
888.com Consumer Services Gibraltar
10.75% 15 May 2030 (SNR) B2/B–/B 3,772 0.9
8% 30 Sep 2031 (SNR) B2/B–/B 1,560 0.4
5,332 1.3
Virgin Media O2 Telecommunications Ireland
7.875% 15 Mar 2032 NR/NR/NR 5,159 1.2
Newcastle Building Society Financials UK
12.25% Cnv FRN Perpetual NR/NR/NR 5,004 1.2
CPUK Finance Consumer Services Jersey
7.875% 28 Aug 2055 NR/B/B 2,197 0.5
6.875% 28 Aug 2032 NR/B/B 1,472 0.4
4.5% 28 Aug 2027 NR/B/B 1,176 0.3
4,845 1.2
UTB Partners Financials UK
13% FRN Perpetual (AT1) NR/NR/NR 4,472 1.1
Kane Bidco Financials Jersey
7.75% 15 Jul 2031 (SNR) B1/B+/B 2,852 0.7
FRN 15 Jul 2032 (SNR) B1/B+/B 1,547 0.4
4,399 1.1
Legal & General Financials UK
5.625% FRN Perpetual Baa2/BBB/BBB 4,379 1.1
DNO ASA Oil and Gas Norway
9.25% 04 Jun 2029 (SNR) NR/NR/NR 2,510 0.6
8.5% 27 Mar 2030 (SNR) NR/NR/NR 1,684 0.4
4,194 1.0
Atos Technology France
5% Var 18 Dec 2030 (SNR) NR/CCC/CCC 2,153 0.5
9% Var 18 Dec 2029 NR/B+/B 1,996 0.5
4,149 1.0
Waga Bond Consumer Services Jersey
8.5% 15 Jun 2030 (SNR) B2/B/B 4,111 1.0
Punch Finance Consumer Services UK
7.8755% 30 Dec 2030 (SNR) B3/NR/B 4,077 1.0
Ford Motor Credit Consumer Goods USA
6.86% 05 Jun 2026 Ba1/BBB–/BBB 4,063 1.0
Lion/Polaris Consumer Goods Luxembourg
FRN 01 July 2029 (SNR) B2/B/B 4,026 1.0
Sainsbury’s Bank Financials UK
10.5% FRN 12 Mar 2033 Ba1/NR/BB 4,016 1.0
Deutsche Bank Financials Germany
FRN Perpetual (AT1) Ba2/BB/BB 3,446 0.8
8.125% Cnv FRN Perpetual (AT1) Ba2/BB/BB 568 0.1
4,014 0.9
Bertrand Franchise Consumer Goods France
FRN Perpetual (SNR) B3/B–/B 3,980 0.9
Fiber Bidco Industrials Italy
FRN 15 Jan 2030 (SNR) B3/B–/B 2,134 0.5
5.125% 30 Jan 2032 (SNR) Ba1/BB+/BB 1,773 0.4
3,907 0.9
Rino Mastrotto Consumer Goods Italy
FRN 31 Jul 2031 (SNR) B2/B/B 3,797 0.9
RL Finance Financials UK
10.125% Cnv FRN Perpetual Baa3/BBB/BBB 3,741 0.9
Haleon Health Care UK
9.5% Preference NR/NR/NR 3,654 0.9
Bayer Health Care Germany
7% FRN Perpetual (SUB) Ba1/BB+/BB 1,917 0.5
5.5% FRN Perpetual (SUB) Baa3/BB+/BB 1,713 0.4
3,630 0.9
ING Financials Netherlands
6.25% Cnv FRN 20 May 2033 Baa2/BBB+/BBB 3,604 0.9
IHO Verwaltungs Consumer Goods Germany
6.75% 15 Nov 2029 (SNR) Ba2/BB–/BB 1,929 0.5
8% 15 Nov 2032 (SNR) Ba2/BB–/BB 1,604 0.4
3,533 0.9
ASG Finance Design Consumer Services Ireland
9.75% 15 May 2029 (SNR) NR/BB–/BB 3,461 0.8
IM Group Consumer Services France
8% 01 Mar 2028 (SNR) Caa1/CCC+/CCC 3,430 0.8
Pension Insurance Financials UK
7.375% FRN Perpetual NR/NR/BBB 3,269 0.8
Telefonica Telecommunications Netherlands
FRN Perpetual Ba2/BB/BB 2,174 0.5
6.75% FRN Perpetual (SUB) Ba2/BB/BB 868 0.2
3,042 0.7
JP Morgan Chase Financials USA
FRN Perpetual (SNR) (AT1) Baa1/BBB/BBB 3,026 0.7
Maison Industrials UK
6% 31 Oct 2027 (SNR) NR/B/B 2,974 0.7
Grupo Antolin Consumer Goods Spain
10.375% 30 Jan 2030 (SNR) B3/B–/B 2,952 0.7
Teva Pharmaceutical Finance Health Care Netherlands
6.75% 01 Mar 2028 (SNR) Ba1/BB+/BB 2,315 0.6
5.125% 09 May 2029 (SNR) Ba1/BB+/BB 585 0.1
2,900 0.7
Pinewood Finance Consumer Services UK
6% 27 Mar 2030 (SNR) NR/BB+/BB 2,855 0.7
BT Telecommunications UK
8.375% FRN Perpetual Ba1/BB+/BB 2,672 0.6
ZF Group Consumer Goods Netherlands
7% 12 Jun 2030 (SNR) Ba2/BB–/BB 1,836 0.4
6.125% 13 Mar 2029 (SNR) Ba2/BB–/BB 452 0.1
7.125% 14 Apr 2030 (SNR) Ba2/BB–/BB 375 0.1
2,663 0.6
Codere New Topco Consumer Services Luxembourg
11% PIK 31 Dec 2028 NR/NR/NR 1,707 0.4
A1 Shares NR/NR/NR 639 0.1
A2 Shares NR/NR/NR 302 0.1
2,648 0.6
Allwyn Entertainment Consumer Services UK
7.875% 30 Apr 2029 (SNR) NR/BB/BB 1,780 0.4
7.25% 30 Apr 2030 NR/BB/BB 830 0.2
2,610 0.6
Flora Food Management Consumer Goods Netherlands
6.875% 02 Jul 2029 (SNR) B2/B/B 2,606 0.6
RLGH Finance Bermuda Financials Bermuda
8.25% 17 Jul 2031 Baa2/NR/BBB 2,604 0.6
CaixaBank Financials Spain
8.25% Cnv FRN Perpetual (AT1) NR/BB+/BB 2,526 0.6
Dana Financing Luxembourg Consumer Goods Luxembourg
8.5% 15 Jul 2031 (SNR) B1/BB–/BB 2,508 0.6
Société Générale Financials France
7.875% Cnv FRN Perpetual (AT1) Ba2/BB/BB 1,509 0.4
FRN Perpetual (AT1) Ba2/BB/BB 890 0.2
2,399 0.6
Voyager Parent Consumer Services USA
9.25% 01 Jul 2032 (SNR) B1/B/B 2,367 0.6
Boots Group Finco Health Care USA
7.375% 31 Aug 2032 (SNR) B1/B+/B 1,447 0.4
5.375% 31 Aug 2032 (SNR) B1/B+/B 901 0.2
2,348 0.6
Petra Diamonds Basic Materials UK
10.5% PIK 08 Mar 2026 NR/B–/B 2,289 0.6
Common Stock NR/NR/NR 55 0.0
2,344 0.6
HSBC Financials UK
FRN 13 Nov 2034 (SUB) Baa1/BBB+/BBB 1,885 0.5
5.25% 14 Mar 2044 Baa1/BBB+/BBB 444 0.1
2,329 0.6
Eutelsat Telecommunications France
9.75% 13 Apr 2029 (SNR) Ba3/NR/BB 2,304 0.6
DeepOcean Oil and Gas Jersey
6% 08 Apr 2031 (SNR) B1/BB–/BB 2,234 0.5
New Frigoglass Group Industrials Netherlands
11% PIK 27 Mar 2026 NR/NR/NR 1,145 0.3
11% 20 Apr 2028 NR/NR/NR 877 0.2
0% 27 Mar 2028 NR/NR/NR 187 0.0
Common Stock NR/NR/NR 5 0.0
2,214 0.5
Heathrow Finance Financials UK
6.625% 01 Mar 2031 (SNR) B1/NR/B 1,267 0.3
4.125% 01 Sep 2029 (SNR) B1/NR/B 938 0.2
2,205 0.5
Aston Martin Consumer Goods Jersey
10.375% 31 Mar 2029 (SNR) Caa1/CCC+/CCC 1,821 0.4
10% 31 Mar 2029 (SNR) Caa1/CCC+/CCC 346 0.1
2,167 0.5
Beazley Financials Ireland
5.875% 04 Nov 2026 NR/NR/BBB 2,147 0.5
Benteler International Consumer Goods Austria
7.25% 15 Jun 2031 (SNR) Ba3/BB–/BB 2,089 0.5
Lancashire Financials Bermuda
5.625% 18 Sep 2041 (FRN) Baa3/BBB–/BBB 2,087 0.5
MAHLE Consumer Goods Germany
7.125% 15 Jul 2032 (SNR) Ba2/BB–/BB 1,607 0.4
6.5% 02 May 2031 (SNR) Ba2/BB–/BB 453 0.1
2,060 0.5
BP Capital Financials UK
4.25% FRN Perpetual A3/BBB/A 2,037 0.5
Galaxy Bidco Financials UK
8.125% 19 Dec 2029 (SNR) B2/B/B 2,036 0.5
Forvia Consumer Goods France
8% 15 Jun 2030 (SNR) B1/BB–/BB 1,990 0.5
ContourGlobal Utilities Luxembourg
6.75% 28 Feb 2030 (SNR) NR/BB/BB 1,946 0.5
Currenta Group Basic Materials Luxembourg
5.5% 15 May 2030 (SNR) Ba3/BB–/BB 1,937 0.5
Albion Finance Consumer Services Luxembourg
7% 21 May 2030 (SNR) B1/BB–/BB 980 0.2
5.375% 21 May 2030 (SNR) B1/BB–/BB 898 0.2
1,878 0.4
Nexture Consumer Goods Italy
FRN 30 Jul 2032 (SNR) B2/B/B 1,872 0.4
Marb Bondco Consumer Services UK
3.95% 29 Jan 2031 (SNR) NR/BB+/BB 1,804 0.4
Petroleos Mexicanos Oil and Gas Mexico
9.5% 15 Sep 2027 (SNR) B1/BBB/BB 788 0.2
6.95% 28 Jan 2060 (SNR) B1/BBB/BB 548 0.1
6.75% 21 Sep 2047 (SNR) B1/BBB/BB 428 0.1
1,764 0.4
TGS ASA Oil and Gas Norway
8.5% 15 Jan 2030 (SNR) Ba3/BB–/BB 1,738 0.4
AA Bond Co Consumer Services Jersey
7.375% 31 Jul 2050 (SNR) NR/BBB/BBB 1,353 0.3
8.45% 31 Jul 2050 (SNR) NR/BBB/BBB 366 0.1
1,719 0.4
Enel Utilities Netherlands
7.75% 14 Oct 2052 (SNR) Baa1/BBB/BBB 1,716 0.4
Monitchem Basic Materials Luxembourg
8.75% 01 May 2028 (SNR) B3/B/B 1,661 0.4
Stora Enso Industrials Finland
7.25% 15 Apr 2036 Baa3/NR/BBB 1,645 0.4
Intesa Financials Italy
6.375% Cnv FRN Perpetual (AT1) Ba2/BB/BB 1,642 0.4
Telecom Italia Telecommunications Italy
7.875% 31 Jul 2028 (SNR) Ba2/BB/BB 1,053 0.3
7.721% 04 Jun 2038 (SNR) Ba2/BB/BB 537 0.1
1,590 0.4
Viridien Oil and Gas France
10% 15 Oct 2030 (SNR) B2/B/B 1,567 0.4
Genesis Energy Oil and Gas USA
8.875% 15 Apr 2030 (SNR) B3/B/B 1,563 0.4
Gatwick Airport Finance Financials UK
6% 21 Nov 2030 (SNR) Ba2/NR/BB 1,560 0.4
Morgan Stanley Financials USA
Depositary Shares (AT1) Baa3/BBB–/BBB 1,551 0.4
Quick Top Technology Sweden
FRN 21 Mar 2030 (SNR) B2/B/B 1,518 0.4
Saturn Holdings Financials UK
9% FRN 26 Feb 2036 NR/NR/NR 1,511 0.4
Preem Oil and Gas Sweden
12% 30 Jun 2027 (SNR) B2/BB–/B 1,444 0.4
Ecclesiastical Insurance Office Financials UK
8.625% Preference NR/NR/NR 1,440 0.3
Altice Telecommunications France
5.625% 15 Jun 2032 (SNR) Caa1/CCC+/CCC 958 0.2
7.25% 01 Nov 2029 (SNR) Caa1/CCC+/CCC 333 0.1
Common Stock NR/NR/NR 135 0.0
1,426 0.3
Lottomatica Consumer Services Italy
4.875% 31 Jan 2031 (SNR) Ba2/BB/BB 1,404 0.3
FR Bondco Consumer Goods France
6.875% 31 Oct 2032 (SNR) Caa1/CCC+/CCC 1,394 0.3
Vattenfall Utilities Sweden
6.875% FRN Perpetual (SUB) Baa2/BB+/BB 1,375 0.3
Coventry Building Society Financials UK
8.75% Cnv FRN Perpetual (AT1) Ba1/NR/BB 1,370 0.3
GTCR Technology Netherlands
8.5% 15 Jan 2031 (SNR) Ba3/BB/BB 1,364 0.3
Valeo Consumer Goods France
5.125% 20 May 2031 (SNR) Ba1/BB/BB 1,348 0.3
Virgin Money Financials UK
Cnv FRN 23 Aug 2029 (SNR) A3/BBB+/A 1,332 0.3
Mobico Group Consumer Services UK
4.875% 26 Sep 2031 (SNR) B2/NR/B 690 0.2
FRN Perpetual Caa1/NR/CCC 626 0.1
1,316 0.3
OEG Finance Oil and Gas UK
7.25% 27 Sep 2029 (SNR) B1/NR/B 1,307 0.3
CIRSA Finance Consumer Services Luxembourg
7.875% 31 Jul 2028 (SNR) B1/NR/B 1,282 0.3
John Lewis Consumer Services UK
4.25% 18 Dec 2034 (SNR) NR/NR/NR 1,272 0.3
Aegon Financials Bermuda
5.625% FRN Perpetual Baa3/BB+/BB 1,256 0.3
Alexandrite Lake Lux Holdings Financials Luxembourg
6.75% 30 Jul 2030 (SNR) NR/B+/B 1,254 0.3
Dynamo Consumer Goods Germany
6.25% 15 Oct 2031 (SNR) B2/B/B 1,209 0.3
Quilter Financials UK
8.625% FRN 18 Apr 2033 NR/NR/BBB 1,116 0.3
Centrica Utilities UK
7% 19 Sep 2033 (SNR) Baa2/BBB/BBB 1,108 0.3
Commerzbank Financials Germany
7.5% FRN Perpetual (AT1) Ba1/BB/BB 1,093 0.3
Bank Of Ireland Financials Ireland
7.594% FRN 06 Dec 2032 Baa1/BBB/BBB 1,046 0.2
FiberCop Technology Italy
7.721% 04 Jun 2038 (SNR) Ba1/BB+/BB 1,004 0.2
Hammerson Financials UK
5.875% 08 Oct 2036 Baa2/NR/BBB 1,000 0.2
Alpha Services & Holdings Consumer Goods Greece
11.875% Cnv FRN Perpetual (AT1) Ba3/NR/BB 970 0.2
Castello BC Bidco Consumer Services Italy
FRN 14 Nov 2031 (SNR) B2/B/B 879 0.2
Chesnara Financials UK
8.5% FRN Perpetual NR/NR/BBB 867 0.2
Germany (Federal Republic Of) Government Bonds Germany
2.5% 15 Feb 2035 NR/AAA/AAA 851 0.2
AXA Financials France
6.379% FRN Perpetual A2/BBB+/BBB 850 0.2
B&M Consumer Services Luxembourg
4% 15 Nov 2028 (SNR) Ba1/BB+/BB 833 0.2
Bausch & Lomb Consumer Services USA
FRN 15 Jan 2031 (SNR) B1/NR/B 813 0.2
National Bank Of Greece Financials Greece
Cnv FRN 28 Jun 2035 Ba1/NR/BB 777 0.2
CCO Holdings Telecommunications USA
7.375% 01 Mar 2031 (SNR) B1/BB–/BB 759 0.2
US Treasury Note Government Bonds USA
3.875% 15 Aug 2033 Aa1/AA+/AA 739 0.2
Zurich Finance Financials Ireland
5.125% FRN 23 Nov 2052 A1/A+/A 710 0.2
CNP Assurances Financials France
4.875% FRN Perpetual Baa2/BBB/BBB 693 0.2
Phoenix Financials UK
FRN Perpetual NR/NR/BBB 648 0.2
La Financière ATALIAN Consumer Services France
8.5% PIK 30 Jun 2028 Caa3/CCC+/CCC 646 0.2
PGH Capital Financials UK
5.375% 06 Jul 2027 NR/NR/BBB 624 0.1
Cerved Consumer Services Italy
FRN 15 Feb 2029 (SNR) B3/B/B 614 0.1
Nickel Industries Basic Materials Australia
9% 30 Sep 2030 (SNR) B1/NR/B 611 0.1
UBS Financials Switzerland
9.75% FRN Perpetual (AT1) NR/NR/NR 384 0.1
4.5% FRN Perpetual (AT1) NR/NR/NR 171 0.0
555 0.1
Spectrum Management Telecommunications USA
4.5% 15 Sep 2042 (SNR) Ba1/BBB–/BBB 516 0.1
RAC Bond Consumer Goods UK
FRN 04 Nov 2046 (SNR) NR/B+/B 496 0.1
Peel Land & Property Investments Financials UK
8.375% Var 30 Apr 2040 NR/BBB/BBB 494 0.1
Italy (Republic Of) Government Bonds Italy
3.65% 01 Aug 2035 Baa2/BBB/BBB 443 0.1
Spain (Kingdom Of) Government Bonds Spain
3.15% 30 Apr 2035 NR/A+/A 433 0.1
Kosmos Energy Oil and Gas USA
7.75% 01 May 2027 (SNR) Caa3/CCC+/CCC 338 0.1
Total investments held at fair value through profit or loss 420,214 100.6
Derivative Instruments – Credit Default Swaps
Market
Coupon Value % of
Company Nominal % Maturity Date £’000 Portfolio
iTraxx Europe Crossover
Series 42 5% 5 Year €6,000,000 5.00 20 Dec 2030 (1,857) (0.5)
Series 42 5% 5 Year €19,000,000 5.00 20 Dec 2030 (586) (0.1)
Total derivatives held at fair value
through profit or loss (2,443) (0.6)
Total investments and derivatives held
at fair value through profit or loss 417,771 100.0
(1) Moody’s/Standard & Poor’s (S&P)/Equivalent
average rating. Please see Credit Ratings Definitions on page 81 for further
information.
Abbreviations used in the above valuation:
Cnv: Convertible
FRN: Floating Rate Note
SNR: Senior
SUB: Subordinated Notes
PIK: Payment in Kind
Var: Variable
CCDS: Core Capital Deferred Shares
AT1: Additional Tier 1 bond
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Company’s Annual Financial
Report in accordance with applicable laws and regulations.
The Companies (Jersey) Law 1991 requires the Directors to prepare financial
statements for each financial period. Under that law the Directors have
elected to prepare the financial statements in accordance with International
Financial Reporting Accounting Standards issued by the International Financial
Reporting Standards as adopted by the European Union (‘IFRS’ Accounting
Standards as adopted by the EU). The financial statements are required by law
to 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.
International Accounting Standard 1 requires that financial statements present
fairly for each financial year the Company’s financial position, financial
performance and cash flows. This requires the faithful representation of the
effects of transactions, other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities, income and
expenses set out in the International Accounting Standards Board’s
‘Framework for the preparation and presentation of financial statements’.
In virtually all circumstances, a fair presentation will be achieved by
compliance with all applicable IFRS Accounting Standards as adopted by the EU.
In preparing these financial statements, the Directors are required to:
– properly select and apply accounting policies and
then apply them consistently;
– present information, including accounting policies,
in a manner that provides relevant, reliable, comparable and understandable
information;
– provide additional disclosures when compliance with
specific requirements in IFRS Accounting Standards are insufficient to enable
users to understand the impact of particular transactions, other events and
conditions on the entity’s financial position and financial performance; and
– make an assessment of the Company’s ability to
continue as a going concern.
The financial statements have been prepared on a going concern basis. When
considering this, the Directors took into account the annual shareholders’
continuation vote (as explained in detail on page 56) and the following: the
Company’s investment objective and risk management policies, the nature of
the portfolio and expenditure and cash flow projections. As a result, they
determined that the Company has adequate resources, an appropriate financial
structure, readily realisable fixed assets to repay current liabilities and
suitable management arrangements in place to continue in operational existence
for the foreseeable future.
The Directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and which enable them to ensure that the accounts comply with the
Companies (Jersey) Law 1991. 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.
Under applicable law and regulations, the Directors are also responsible for
preparing a Corporate Governance Statement and a Directors’ Report that
comply with that law and those regulations.
The Directors of the Company, who are listed on page 33, each confirm to the
best of their knowledge that:
– the financial statements, which have been prepared in
accordance with applicable accounting standards, give a true and fair view of
the financial position and profit or loss of the Company;
– this Annual Financial Report includes 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;
– this Annual Financial Report, taken as a whole, is
fair, balanced and understandable and provides the information necessary for
shareholders to assess the Company’s position and performance, business
model and strategy; and
– there is no relevant audit information of which the
Company’s auditor is unaware, and each Director has taken steps that they
ought to have taken as a Director to make themselves aware of any relevant
audit information and to establish that the Company’s auditor is aware of
that information.
Signed on behalf of the Board of Directors
Heather MacCallum
Audit & Risk Committee Chair
31 March 2026
a. The directors have delegated responsibility for the
maintenance and integrity of the Invesco Bond Income Plus Limited website to
the Manager; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditor accept no
responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
b. Legislation in Jersey governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Statement of Comprehensive Income
Year ended Year ended
31 December 2025 31 December 2024
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Net gains on investments held at fair value
through profit or loss 11 – 3,548 3,548 – 2,093 2,093
Net gains on derivative instruments –
forward currency contracts and CDS 13 – 3,273 3,273 – 943 943
Exchange differences – (2,717) (2,717) – 1,965 1,965
Income 4 30,853 – 30,853 26,370 – 26,370
Investment management fee 5 (1,230) (1,230) (2,460) (1,090) (1,090) (2,180)
Other expenses 6 (815) (14) (829) (856) (40) (896)
Profit before finance costs and taxation 28,808 2,860 31,668 24,424 3,871 28,295
Finance costs 7 (534) (534) (1,068) (826) (826) (1,652)
Profit before taxation 28,274 2,326 30,600 23,598 3,045 26,643
Tax on ordinary activities 8 (89) – (89) (61) – (61)
Profit after taxation 28,185 2,326 30,511 23,537 3,045 26,582
Earnings per ordinary share 9 13.07p 1.08p 14.15p 12.08p 1.57p 13.65p
The total columns of this statement represent the Company’s statement of
comprehensive income, prepared in accordance with International Financial
Reporting Standards (‘IFRS’) Accounting Standards adopted by the European
Union. The profit after taxation is the total comprehensive income. The
supplementary revenue and capital columns are both prepared in accordance with
the Statement of Recommended Practice issued by the Association of Investment
Companies. All items in the above statement derive from continuing operations
of the Company. No operations were acquired or discontinued in the year.
The accompanying accounting policies and notes are an integral part of these
financial statements.
Statement of Changes in Equity
Stated Capital Revenue
Capital Reserve Reserve Total
Notes £’000 £’000 £’000 £’000
At 31 December 2023 316,793 (22,018) 9,854 304,629
Profit after taxation – 3,045 23,537 26,582
Dividends paid 10 (514) – (21,660) (22,174)
Net proceeds from issue of new shares 16 36,762 – – 36,762
At 31 December 2024 353,041 (18,973) 11,731 345,799
Profit after taxation – 2,326 28,185 30,511
Dividends paid (642) – (25,491) (26,133)
Net proceeds from issue of new shares 16 60,098 – – 60,098
At 31 December 2025 412,497 (16,647) 14,425 410,275
The accompanying accounting policies and notes are an integral part of these
financial statements.
Balance Sheet
At At
31 December 31 December
2025 2024
Notes £’000 £’000
Non-current assets
Investments held at fair value through profit or loss 11 420,214 376,963
Current assets
Other receivables 12 13,783 9,939
Derivative financial instruments – receivable 13 1,729 415
Cash and cash equivalents 21,232 8,153
36,744 18,507
Current liabilities
Other payables 14 (6,198) (1,000)
Derivative financial instruments – payable 13 (24) (2,321)
Securities sold under agreements to repurchase 15 (38,018) (45,127)
(44,240) (48,448)
Net current liabilities (7,496) (29,941)
Total assets less current liabilities 412,718 347,022
Non-current liabilities
Derivatives held at fair value through profit or loss 13 (2,443) (1,223)
Net assets 410,275 345,799
Capital and reserves
Stated capital 16 412,497 353,041
Capital reserve 17 (16,647) (18,973)
Revenue reserve 17 14,425 11,731
Total shareholders’ funds 410,275 345,799
Net asset value per ordinary share 18 172.87p 170.87p
The financial statements were approved and authorised for issue by the Board
of Directors on 31 March 2026.
Signed on behalf of the Board of Directors
Heather MacCallum
Audit & Risk Committee Chair
The accompanying accounting policies and notes are an integral part of these
financial statements.
Statement of Cash Flows
Year ended Year ended
31 December 31 December
2025 2024
£’000 £’000
Cash flow from operating activities
Profit before finance costs and taxation 31,668 28,295
Tax on overseas income (89) (61)
Adjustment for:
Purchases of investments (164,225) (139,225)
Sales of investments 129,737 99,926
(34,488) (39,299)
Decrease from securities sold under agreements to repurchase (7,109) (2,941)
Net gains through profit or loss on investments held at fair value (3,548) (2,093)
Net movement from derivative instruments – forward currency contracts and CDS (2,391) 4,519
Increase in other receivables (3,446) (1,336)
Increase in other payables 80 101
Effect of foreign exchange rate changes 545 135
Net cash outflow from operating activities (18,778) (12,680)
Cash flow from financing activities
Finance cost paid (1,167) (1,669)
Net proceeds from issue of new shares - note 16 60,103 36,856
Dividends paid – note 10 (26,133) (22,174)
Cost of shares issued – note 16 (401) (183)
Net cash inflow from financing activities 32,402 12,830
Net increase in cash and cash equivalents 13,624 150
Cash and cash equivalents at start of the year 8,153 8,138
Effect of foreign exchange rate changes (545) (135)
Cash and cash equivalents at the end of the year 21,232 8,153
Reconciliation of cash and cash equivalents to the Balance Sheet is as follows:
Cash held at custodian 5,114 7,903
Invesco Liquidity Funds plc – Sterling 16,118 250
Cash and cash equivalents 21,232 8,153
Cash flow from operating activities includes:
Dividends received 642 627
Interest received 29,073 24,984
Reconciliation of net debt
At At
1 January Cash Non-cash 31 December
2025 flows movement 2025
£’000 £’000 £’000 £’000
Cash and cash equivalents 8,153 13,624 (545) 21,232
Securities sold under agreements to repurchase (45,127) 7,109 – (38,018)
Total (36,974) 20,733 (545) (16,786)
Notes to the Financial Statements
1. Principal Activity
The Company is a closed-end investment company incorporated in Jersey and
operates under the Companies (Jersey) Law 1991. The principal activity of the
Company is investment in a diversified portfolio of high-yielding
fixed-interest securities as set out in the Company’s Investment Objective
and Policy.
2. Principal Accounting Policies
The principal accounting policies describe the Company’s approach to
recognising and measuring transactions during the year and the position of the
Company at the year end.
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been consistently
applied during the current year and preceding year, unless otherwise stated.
The financial statements have been prepared on a going concern basis as noted
below.
(a) Basis of Preparation
(i) Accounting Standards Applied
The financial statements have been prepared on a historical cost basis, except
for the measurement at fair value of investments and derivatives, and in
accordance with the applicable International Financial Reporting Standards as
adopted by the European Union (‘IFRS’ Accounting Standards as adopted by
the EU). The standards are those endorsed by the European Union and effective
at the date the financial statements were approved by the Board.
Where presentational guidance set out in the Statement of Recommended Practice
(SORP) ‘Financial Statements of Investment Trust Companies and Venture
Capital Trusts’, updated by the Association of Investment Companies in July
2022, is consistent with the requirements of IFRS Accounting Standards as
adopted by the EU, the Directors have prepared the financial statements on a
basis compliant with the recommendations of the SORP. The supplementary
information which analyses the statement of comprehensive income between items
of a revenue and a capital nature is presented in accordance with the SORP.
(ii) Going
Concern
As explained on page 16, the Company has an Annual Continuation Vote and the
Directors believe shareholders will vote for the Company to continue.
Accordingly, the Directors have determined that the financial statements
should and have been prepared on a going concern basis, which does not include
any adjustments that might arise from cessation of the Company. The Articles
of Association of the Company require that unless an ordinary resolution is
passed at or before the Annual General Meeting (‘AGM’) each year releasing
the Directors from the obligation to do so, the Directors shall convene a
general meeting within six months of the AGM at which a special resolution
would be proposed to wind up the Company. The directors plan on presenting an
ordinary resolution at the forthcoming AGM for which a 50% majority is needed
for a special resolution regarding continuance not to be
held.
If a special resolution was held regarding a continuation vote a 75% majority
of the shareholders need to vote for the Company not to continue.
Last year nearly 100% of the votes registered at the AGM were in favour of
releasing the obligation to hold a continuation vote.
Based upon the current financial performance and financial position of the
Company including the net current liability position at the balance sheet date
along with the AGM vote outcome last year and ongoing dialogue with investors,
the Directors do not have any concerns regarding the outcome of the
forthcoming ordinary resolution and hence do not consider there to be a
material uncertainty over going concern.
If a continuation vote was held and was unsuccessful, the basis of preparation
would be switched at that date to a basis other than going concern and the NAV
impacting adjustments would not be material as the majority of investments are
Level 2, based on observable market prices and
investments are classified as held at fair value through profit or loss.
(iii)
Adoption of New and Revised Standards
There were no new nor revised standards and interpretations that became
effective during the year having a significant impact on the amounts reported
in these financial statements.
During the year the following standards were issued but were not effective and
the Company has chosen not to early adopt:
• IFRS 18, ‘Presentation and Disclosure in Financial
Statements’ – effective 1 January 2027 (early adoption is permitted).
• Amendments to the Classification and Measurement of
Financial Instruments – Amendments to IFRS 9 and IFRS 7 – effective 1
January 2026.
(iv) Critical Accounting Estimates
and Judgements
The preparation of the financial statements may require the Directors to make
estimations where uncertainty exists. It also requires the Directors to
exercise judgement in the process of applying the accounting policies. The
Directors, having taken into account the factors in note 2a(ii), judge it
appropriate to continue to use the going concern basis to prepare the
financial statements given the Annual Continuation Vote.
The area requiring the most significant judgement and estimation in the
preparation of the financial statements is: accounting for the value of Level
3 investments. Further details can be found in note 20 on pages 70 and 71.
(b) Foreign Currency
(i)
Functional and Presentation Currency
The financial statements are presented in sterling, which is the Company’s
functional and presentation currency and the currency in which the Company’s
stated capital and expenses are denominated, as well as a certain proportion
of its income, assets and liabilities.
(ii) Transactions and Balances
Transactions in foreign currency, whether of a revenue or capital nature, are
translated to sterling at the rate of exchange ruling on the date of such
transactions. Foreign currency assets and liabilities are translated to
sterling at the rates of exchange ruling at the balance sheet date. Foreign
exchange gains and losses relating to non investments are presented in the
statement of comprehensive income within ‘exchange differences’. Foreign
exchange gains and losses relating to the financial assets and liabilities
carried at fair value through profit or loss are presented in the statement of
comprehensive income within ’net gains on investments held at fair value
through profit or loss’. All profits and losses, whether realised or
unrealised, are recognised in the statement of comprehensive income and are
taken to capital reserve or revenue reserve, depending on whether the gain or
loss is capital or revenue in nature.
(c) Financial Instruments
(i)
Recognition of Financial Assets and Financial Liabilities
Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the instrument. These are
offset if the Company has a legally enforceable right to set off the
recognised amounts and interests and intends to settle on a net basis.
(ii)
Derecognition of Financial Assets
Financial assets are derecognised when the contractual rights to the cash
flows from the asset expire, or it transfers the right to receive the
contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset
are transferred. Any interest in the transferred financial asset that is
created or retained by the Company is recognised as an asset.
(iii)
Derecognition of Financial Liabilities
Financial liabilities are derecognised when the Company’s obligations are
discharged, cancelled or expired.
(iv) Trade
Date Accounting
Purchases and sales of financial assets are recognised on trade date, being
the date on which the Company commits to purchase or sell the assets.
(v)
Classification of Financial Assets and Financial Liabilities
Financial assets
Investments are classified as held at fair value through profit or loss as the
investments are managed and their performance evaluated on a fair value basis
in accordance with the Company’s documented investment strategy and this is
also the basis on which information about investments is provided internally
to the Board.
Financial assets held at fair value through profit or loss are initially
recognised at fair value, which is taken to be their cost, with transaction
costs expensed in the statement of comprehensive income, and are subsequently
valued at fair value. Changes in fair value including the related foreign
exchange gains and losses are recognised in the statement of comprehensive
income under net gains and losses on investments.
For investments that are actively traded in organised financial markets, fair
value is determined by reference to stock exchange quoted bid prices at the
balance sheet date. For investments that are not actively traded or where
active stock exchange quoted bid prices are not available, fair value is
determined by reference to a variety of valuation techniques including broker
quotes and price modelling.
Financial Liabilities
Financial liabilities, including borrowings, are initially measured at fair
value, net of transaction costs and are subsequently measured at amortised
cost using the effective interest method, where applicable.
(d) Derivatives and Hedging
Derivative instruments are valued at fair value in the balance sheet. Hedge
accounting has not been adopted.
Forward currency contracts entered into for hedging purposes are valued at the
appropriate forward exchange rate ruling at the balance sheet date and any
profits and losses are recognised in the statement of comprehensive income and
taken to capital.
The treatment of the earnings from credit default swaps depends upon the
nature of the transaction. Both motives and circumstances are used to
determine whether earnings should be treated as capital or revenue. Given that
the primary rationale for holding credit default swaps is capital protection,
any gains/(losses) and premiums paid are reflected within net gain/(losses) on
derivative instruments and taken to capital. Prior to 1 January 2025 the
expense element was reflected within revenue in other expenses within the
statement of comprehensive income.
(e) Cash and Cash Equivalents
Cash and cash equivalents may comprise cash (including short term deposits
which are readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value) as well as cash equivalents, including
money market funds.
(f) Securities Sold Under Agreements
to Repurchase (‘repo financing’)
The Company participates in repo financing arrangements in connection with its
investment portfolio. Under these arrangements, the Company sells fixed
interest securities but is contractually obliged to repurchase them at a fixed
price on a fixed date. Securities which are the subject of repo
financing arrangements are included in investments in the balance sheet
at their fair value and the associated liability is recognised at amortised
cost, being the capital amounts owing under the repo financing arrangements.
The difference between sale and repurchase prices for such transactions is
reflected in the statement of comprehensive income over the lives of the
transactions, within finance costs which is allocated 50% to capital and 50%
to revenue (2024: 50% capital; 50% revenue). This accounting has been adopted
because the repurchase price results in a lender’s return for the transferee
as the Company has retained substantially all the risks and rewards of
ownership of the asset.
(g) Income Recognition
All income is recognised in the statement of comprehensive income. Interest
income arising from fixed income securities classified as fair value through
profit or loss is recognised in the statement of comprehensive income based on
the contractual interest rate. Interest income is recognised as it accrues,
using the coupon rate specified in the bond terms. Dividend income arises from
equity investments held and is recognised on the date investments are marked
‘ex-dividend’. Deposit interest is taken into account on an accruals
basis.
Special dividends are considered individually to ascertain the reason behind
the payment. This will determine whether they are treated as income or capital
in the statement of comprehensive income.
(h) Expenses and Finance Costs
All expenses are accounted for on an accruals basis and are recognised in the
statement of comprehensive income. Investment management fees and finance
costs are allocated 50% to capital and 50% to revenue (2024: 50% capital; 50%
revenue) in accordance with the Board’s expected long-term split of
earnings, in the form of capital gains and income respectively, from the
investment portfolio. Except for custodian dealing costs, all other expenses
are charged through revenue.
(i) Taxation
Overseas interest and dividends are shown gross of withholding tax and the
corresponding irrecoverable tax is shown as a charge in
the statement of comprehensive income.
(j) Dividends payable to
shareholders
Interim dividends are recognised in the period in which they are paid and are
dealt with in the statement of changes in equity.
(k) Stated Capital
Stated Capital represents the total value of shares in issue, including net
issue proceeds resulting from share issuances and if appropriate, payments as
a result of share buybacks. Stated Capital can be used for distributions under
the Companies (Jersey) Law 1991.
Because the criteria in paragraphs 16C and 16D of IAS 32 Financial
Instruments: Presentation, have been met, the stated capital of the Company is
classified as equity even though there is a continuation vote.
3. Segmental Reporting
No segmental reporting is provided as the Directors are of the opinion that
the Company is engaged in a single segment of business of
investing in debt and, to a significantly lesser extent, equity securities.
4. Income
This note shows the income generated from the portfolio (investment assets) of
the Company and income received from any other source.
2025 2024
£’000 £’000
Income from investments
UK investment income – interest 14,122 12,412
UK dividends 367 436
Overseas investment income – interest 15,806 13,067
Overseas dividends 252 182
30,547 26,097
Other income
Deposit interest 199 212
Other income 107 61
306 273
Total income 30,853 26,370
5. Investment Management Fee
This note shows the fees paid to the Manager, which are calculated quarterly
on the basis of the value of the assets being managed.
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 1,230 1,230 2,460 1,090 1,090 2,180
Details of the investment management and secretarial agreement are given on
page 35 in the Directors’ Report.
At 31 December 2025, £667,000 (2024: £562,000) was accrued in respect of the
investment management fee.
The management fee is payable quarterly in arrears and is equal to 0.1625% of
the value of the Company’s total assets under management less current
liabilities at the end of the relevant quarter.
6. Other Expenses
The other expenses of the Company are presented below; those paid to the
Directors and the auditor are separately identified.
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Directors’ remuneration(i) 182 – 182 177 – 177
Auditors’ fees(ii):
– for audit of the Company’s
annual financial statements 70 – 70 57 – 57
Other expenses(iii) 563 14 577 622 40 662
815 14 829 856 40 896
(i) The maximum Directors’ fees authorised by the
Articles of Association are £250,000 (2024: £250,000) per annum. The
Directors’ Remuneration Report on page 43, provides further information on
Directors’ fees.
(ii) Auditor’s fees include out of pocket expenses.
There was a £6,500 additional fee in relation to Level 3 investments incurred
in respect of the year to 31 December 2024 audit, paid in the year to 31
December 2025.
(iii) Other expenses include:
• custodian transaction charges of £3,000 (2024:
£4,000). These are charged to capital.
• legal and administrative fees of £11,000 related to
the adoption of updated Articles of Association (2024: £36,000 share
placing). These were charged to capital.
• amounts due to JTC Fund Solutions (Jersey) Limited
who acted as Administrator and Company Secretary to the Company under an
agreement starting from 10 December 2019. The fee paid for company secretarial
and administration services in the current year was £143,000 (2024:
£139,000).
• A fee of £103,000 was paid to the Manager for
marketing services on behalf of the Company (2024: £103,000).
• A premium of £38,000 was paid from revenue, during
the year to 31 December 2024, on credit default swaps. From 1 January 2025
onwards premiums paid are reflected in capital within net gains on derivative
instruments. Further details are shown in note 2(d) and note 13
7. Finance Costs
Finance costs arise on any borrowing the Company has and comprises of interest
due under repo financing, being the Company's preferred method of borrowing.
2025 2024
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Interest due under repo financing 534 534 1,068 826 826 1,652
534 534 1,068 826 826 1,652
The Company has repo financing arrangements in place which were used during
the year. For repos that are denominated in currencies where the interest rate
is negative, the interest is receivable and has been netted against repo
interest payable within finance costs, as they relate to borrowing costs.
8 Taxation
As a Jersey investment company no tax is payable on capital gains and, as the
Company principally invests in assets which do not result in a revenue tax,
the only overseas tax arises on assets domiciled in countries with which
Jersey has no double-taxation treaty.
2025 2024
£’000 £’000
Overseas taxation 89 61
The Company is subject to Jersey income tax at the rate of 0% (2024: 0%). The
overseas tax charge consists of irrecoverable withholding tax suffered.
9. Earnings per Ordinary Share
Earnings per ordinary share is the amount of gain generated for the financial
year divided by the weighted average number of ordinary shares in issue.
The basic revenue, capital and total earnings per ordinary share is based on
each of the earnings on ordinary activities after taxation and on 215,592,679
(2024: 194,765,138) ordinary shares, being the weighted average number of
ordinary shares in issue throughout the year.
10. Dividends on Ordinary Shares
Dividends are usually paid from the income less expenses. Dividends are paid
as an amount per ordinary share held.
The fourth interim dividend shown below is based on shares in issue at the
record date or, if the record date has not been reached, on shares in issue on
the date the balance sheet is signed. The fourth interim dividend was paid
after the balance sheet date.
2025 2024
Pence £’000 Pence £’000
Dividends paid and recognised in the year:
Fourth interim 3.0625 6,206 2.8750 5,212
First interim 3.0625 6,294 2.8750 5,554
Second interim 3.0625 6,677 2.8750 5,625
Third interim 3.0625 6,956 2.8750 5,783
12.2500 26,133 11.5000 22,174
Dividends paid in respect of the year have been charged to revenue except for
£642,000 (2024: £514,000) which was charged to stated capital. This amount
is equivalent to the cumulative income accrued on the new shares issued in the
year. When new shares are issued there is an element of income accrued in the
issuance price paid, with proceeds fully taken to capital. As a result, the
accrued income element is then used as part of dividend payments from stated
capital. This has the effect of reducing the amount of revenue used for
dividend payments.
2025 2024
Pence £’000 Pence £’000
Dividends payable in respect of the year:
First interim 3.0625 6,294 2.8750 5,554
Second interim 3.0625 6,677 2.8750 5,625
Third interim 3.0625 6,956 2.8750 5,783
Fourth interim 3.0625 7,372 3.0625 6,206
12.2500 27,299 11.6875 23,168
The fourth interim dividend for 2025 was paid on 20 February 2026 to
shareholders on the register on 16 January 2026.
11. Investments Held at Fair Value
Through Profit and Loss
The portfolio is principally made up of investments which are listed and
traded on regulated stock exchanges. Profits and losses are either:
• realised, usually arising when
investments are sold; or
• unrealised, being the difference
from cost of those investments still held at the year end.
(a) Analysis of investment profits
in the year.
2025 2024
£’000 £’000
Opening book cost 386,556 352,292
Opening investment holding losses (9,593) (16,759)
Opening valuation 376,963 335,533
Movements in year:
Purchases at cost 169,440 139,225
Sales – proceeds (129,737) (99,888)
Net gains on investments held at fair value through profit or loss 3,548 2,093
Closing valuation 420,214 376,963
Closing book cost 423,811 386,556
Closing investment holding losses (3,597) (9,593)
Closing valuation 420,214 376,963
The Company received £129,737,000 (2024: £99,888,000) from investments sold
in the year. The book cost of these investments when they were purchased was
£131,942,000 (2024: £104,961,000) realising a loss of £2,205,000 (2024:
£5,073,000). These investments have been revalued over time and until they
were sold any unrealised profits/losses were included in the fair value of the
investments.
(b)
Registration of investments
The investments of the Company are registered in the name of the
Company or in the name of nominees and held to the account of the Company.
(c)
Securities sold under agreements to repurchase
Included in the valuation above are securities under agreements to
repurchase which had a market value of £44,796,000 (2024: £51,461,000).
Included within current liabilities are Securities sold under agreements to
repurchase £38,018,000 (2024: £45,127,000), further details are shown in
note 15.
12. Other Receivables
Other receivables are amounts which are due to the Company, such as income
which has been earned (accrued) but not yet received and monies due from
brokers for investments sold.
2025 2024
£’000 £’000
Margin held at brokers 5,141 2,783
Proceeds due from issue of new shares 658 260
Prepayments and accrued income 7,984 6,896
13,783 9,939
13. Derivative Financial Instruments
Derivative financial instruments are financial instruments that derive their
value from the performance of another item, such as an asset or exchange
rates. They are used to manage the risk associated with fluctuations in the
value of certain assets and liabilities. The Company can use derivatives to
manage its exposure to fluctuations in foreign exchange rates or to mitigate
credit risk.
Derivative financial instruments comprise forward currency contracts and
credit default swaps.
2025 2024
Net derivative financial instruments £’000 £’000
Forward currency contracts:
Forward currency contracts – receivable 1,729 415
Forward currency contracts – payable (24) (2,321)
1,705 (1,906)
2025 2024
£’000 £’000
Credit default swaps (‘CDS’):
Opening net CDS liabilities held at fair value as shown in balance sheet (1,223) –
Movements in year :
Purchases at cost (4,539) (1,356)
Sales - proceeds 3,494 –
Net realised gains relating to underlying price movements 112 –
Net change in unrealised (losses)/gains relating to underlying price movements (283) 156
Add: Prior year notional interest arising on derivatives 23 –
Less : Notional interest arising on derivatives (27) (23)
Closing net CDS liabilities held at fair value as shown in balance sheet (2,443) (1,223)
Net gains on derivative instruments – forward currency contracts and CDS
consists of:
2025 2024
£’000 £’000
Movement in derivative holding gains – forward currency contracts 3,611 (3,296)
Net realised gains on derivative instruments - CDS 112 –
Movement in derivative holding gains – CDS (283) 156
Premium paid - CDS(i) (917) –
Net realised gains on derivative instruments – forward currency contracts 750 4,083
Net gains on derivative instruments – forward currency contracts and CDS 3,273 943
(i) Premiums paid on CDS are reflected within net gains
on derivative instruments and taken to capital. Prior to 1 January 2025 the
expense element was reflected within revenue in note 6.
14. Other Payables
Other payables are amounts which must be paid by the Company, and include
amounts owed to suppliers, such as the Manager and auditor, and any amounts
due to brokers for the purchase of investments.
2025 2024
£’000 £’000
Amounts due to brokers 5,215 –
Amounts payable relating to issue of new shares 3 1
Accruals 980 999
6,198 1,000
15. Securities sold under agreements
to repurchase
2025 2024
£’000 £’000
Securities sold under agreements to repurchase 38,018 45,127
During the year, the Company entered into repo financing arrangements whereby
securities are sold under agreements to repurchase. Included within
Investments Held at Fair Value Through Profit and Loss (note 11) are
securities under agreements to repurchase which had a market value of
£44,796,000 (2024: £51,461,000). Further details are shown in note 2(f) and
note 19.3.
16. Stated Capital
The stated capital represents the total number of shares in issue and their
attributed value. Stated capital can be used for distributions under Jersey
Law.
2025 2024
Number £’000 Number £’000
Allotted ordinary shares of no par value:
Brought forward 202,379,323 353,041 180,702,596 316,793
Net issue proceeds 34,950,000 60,098 21,676,727 36,762
Dividends paid from stated capital – (642) – (514)
237,329,323 412,497 202,379,323 353,041
At 31 December 2025, the Company’s stated capital consisted of 237,329,323
ordinary shares of no par value, allotted and fully paid.
For the year to 31 December 2025, 34,950,000 (2024: 21,676,727) new ordinary
shares were issued to the Company’s corporate broker, Winterflood Securities
Limited, for onward transmission to their clients. These shares were issued in
tranches of various quantities throughout the year to satisfy secondary market
demand. The gross issue proceeds were £60,502,000 (2024: £36,946,000), at an
average price of 173.11p (2024: 170.44p), and the net proceeds after issue
costs were £60,098,000 (2024: £36,762,000). The net proceeds included an
aggregate amount of £232,000 (2024: £18,000) which arose from the income
accrued component of the net asset value at the date of issue of the new
shares.
Subsequent to the year end and up to 27 March 2026 (being the latest
practicable date prior to the publication of this report) 20,122,588 ordinary
shares were issued at an average price of 173.78p.
Because the criteria in paragraphs 16C and 16D of IAS 32 Financial
Instruments: Presentation, have been met, the stated capital of the Company is
classified as equity even though there is a continuation vote.
17. Reserves
This note explains the different reserves attributable to shareholders. The
aggregate of the reserves and stated capital (see previous note) make up total
shareholders’ funds.
The capital reserve includes unrealised net gains and losses on investments
held at fair value through profit and loss, being the difference between cost
and market value at the balance sheet date, as well as gains and losses on
disposal of investments held at fair value through profit and loss. In
addition, costs allocated to capital are recognised in the capital reserve.
The revenue reserve shows the net revenue after payment of any dividend from
the reserve. Both the capital and revenue reserves are distributable.
18. Net Asset Value per Ordinary
Share
The Company’s total net assets (total assets less total liabilities) are
often termed shareholders’ funds and are converted into net asset value per
ordinary share by dividing by the number of shares in issue.
The net asset value per share and the net asset values attributable at the
year end were as follows:
Net asset value Net assets
per ordinary share attributable
2025 2024 2025 2024
Pence Pence £’000 £’000
Ordinary shares 172.87 170.87 410,275 345,799
Net asset value per ordinary share is based on net assets at the year end and
on 237,329,323 (2024: 202,379,323) ordinary shares, being the number of
ordinary shares in issue (excluding treasury) at the year end.
19. Risk Management: Financial
Assets and Liabilities
Financial instruments comprise the Company’s investment portfolio and
derivative financial instruments (for the latter see note 13) as well as any
cash, borrowings (i.e. securities sold under agreements to repurchase
otherwise known as ‘repo financing’), other receivables and other
payables. The following note explains the risks that affect the Company’s
financial instruments and looks at the Company’s exposure to these various
risks.
Risk Management Policies and Procedures
The Business Review details the Company’s approach to investment management
risks on page 13 and the accounting policies in note 2
explain the Company’s valuation basis for investments and currency.
As an investment company, the Company invests in loan stocks, corporate bonds,
government stocks, preference shares and equities which are held for the
long-term in order to achieve the Company’s Investment Objective in
accordance with its Investment Policy. In pursuing these, the Company is
exposed to a variety of risks that could result in either a reduction in the
Company’s net assets or a reduction in the profits available for payment as
dividends.
The Company’s principal financial instruments at risk comprise its
investment portfolio. Other financial instruments at risk include cash and
cash equivalents, borrowings (including repo financing), other receivables and
other payables that arise directly from the Company’s operations.
The Company may enter into derivative transactions, including credit default
swaps, for efficient portfolio management. Derivative instruments can be
highly volatile and expose investors to a high risk of loss. Where used to
hedge risk there is a risk that the return on a derivative does not exactly
correlate to the returns on the underlying investment, obligation or market
sector being hedged against. If there is an imperfect correlation, the Company
may be exposed to greater loss than if the derivative had not been entered
into. During the year the only derivatives entered into were forward currency
contracts and credit default swaps. As at the year end, credit default swaps
with a market value of £(2,443,000) were held by the Company (2024:
£(1,223,000)).
These risks and the Directors’ approach to managing them are set out below,
and have not changed from those applied in the comparative year.
Risk management is an integral part of the investment management process. The
Manager controls risk by ensuring that the Company’s portfolio is
appropriately diversified and the portfolio managers actively monitor both the
ratings and liquidity of the fixed-interest securities taking into account the
Company’s financing requirements. In-depth and continual analysis of market
and security fundamentals give the portfolio managers the best possible
understanding of the risks associated with a particular security. The
portfolio managers assess the exposure to market risk when making each
investment decision, and monitor the overall level of market risk on the whole
of the portfolio on an ongoing basis.
High-yield fixed-interest securities are subject to a variety of risks,
including credit risk (note 19.3).
The day to day management of the investment activities, borrowings and hedging
of the Company has been delegated to the Manager, and is the responsibility of
the portfolio managers to whom the Board has given discretion to operate
within set guidelines. Any proposed variation outside those guidelines is
referred to the Board and the guidelines themselves are reviewed at every
board meeting.
19.1 Market Risk
Market risk arises from changes in the fair value or future cash flows of a
financial instrument. Market risk comprises three types of risk: currency risk
(note 19.1.1), interest rate risk (note 19.1.2) and other price risk (note
19.1.3).
19.1.1
Currency Risk
The Company has assets, liabilities and income which are denominated in
currencies other than sterling and movements in exchange rates will affect the
sterling value of those items.
Management of the Currency Risk
The Board meets at least quarterly to assess risk and review investment
performance. The portfolio managers monitor the Company’s exposure to
foreign currencies on a daily basis and exposure is
reviewed by Directors at each Board meeting. The Company may use forward
currency contracts to mitigate currency risk. In addition, non-sterling credit
default swaps will either mitigate or increase currency risk depending on
whether the Company has sold or bought the credit default swap as well as
exchange movements. Repo financing is matched to the currency of the
underlying assets, which minimises currency risk on the movement of exchange
rates affecting the underlying investments. Non-sterling investments that are
not pledged under repo financing can be hedged using forward currency
contracts. All borrowings and derivative contracts are limited to currencies
and amounts commensurate with asset exposure to those currencies.
Income denominated in foreign currencies is converted to sterling on receipt.
The Company does not use financial instruments to mitigate the currency
exposure in the period between the time that income is included in the
financial statements and its receipt.
Currency Exposure
The following table shows the fair values of the Company’s monetary items
that have foreign currency exposure at 31 December. Where
the Company’s investments (which are not monetary items) are priced in a
foreign currency, they have been included separately in the analysis to show
the overall level of exposure.
US
Euro Dollar
£’000 £’000
31 December 2025
Investments at fair value through profit or loss that are monetary items
(fixed and floating interest) 128,645 66,355
Forward currency contracts (92,958) (69,411)
Other receivables (due from brokers and dividends) 5,828 1,494
Cash and cash equivalents 2,081 715
Derivative liabilities held at fair value through profit or loss (2,443) –
Other payables (due to brokers and accruals) (133) –
Securities sold under agreement to repurchase (34,939) –
Foreign currency exposure on net monetary items 6,081 (847)
Investments at fair value through profit or loss (preference shares and equities) 1,060 1,551
Total net foreign currency 7,141 704
US
Euro Dollar
£’000 £’000
31 December 2024
Investments at fair value through profit or loss that are monetary items
(fixed and floating interest) 90,634 82,395
Forward currency contracts (40,357) (78,983)
Other receivables (due from brokers and dividends) 3,606 1,406
Cash and cash equivalents 5,623 1,147
Derivative liabilities held at fair value through profit or loss (1,223) –
Other payables (due to brokers and accruals) (243) –
Securities sold under agreement to repurchase (45,127) –
Foreign currency exposure on net monetary items 12,913 5,965
Investments at fair value through profit or loss (preference shares and equities) 2,795 1,678
Total net foreign currency 15,708 7,643
The above may not be representative of the exposure to risk during the year
reported because the levels of monetary foreign currency exposure may change
significantly throughout the year.
Currency Sensitivity
The effect on the Statement of Comprehensive Income and the net asset value
that changes in exchange rates have on the Company’s financial assets and
liabilities is based on the following currencies. These changes have been
calculated by reference to the volatility of exchange rates during the period
using the standard deviation of currency fluctuations against the mean.
2025 2024
£/Euro ±1.9% ±1.2%
£/US Dollar ±3.0% ±1.7%
The following sensitivity analysis is based on the Company’s monetary
foreign currency financial instruments held at the balance sheet date, taking
account of any forward foreign exchange contracts that offset the effects of
changes in currency exchange rates, and the income receivable in foreign
currency in the year.
If sterling had strengthened by the changes in exchange rates shown above,
this would have had the following effect:
US
Euro Dollar
£’000 £’000
2025
Effect on Statement of Comprehensive Income – profit/(loss) after taxation
Revenue loss (198) (170)
Capital loss (22) 12
Total loss after taxation for the year (220) (158)
Effect on net asset value –0.1% 0.0%
If sterling had weakened by the same amounts, the effect would have been the
converse.
US
Euro Dollar
£’000 £’000
2024
Effect on Statement of Comprehensive Income – profit/(loss) after taxation
Revenue loss (89) (103)
Capital loss (140) (104)
Total loss after taxation for the year (229) (207)
Effect on net asset value –0.1% –0.1%
If sterling had weakened by the same amounts, the effect would have been the
converse.
In the opinion of the Directors, the above sensitivity analysis is not
representative of the year as a whole, since the level of exposure changes
frequently as part of the currency risk management process of the Company.
19.1.2
Interest Rate Risk
The Company is exposed to interest rate risk in a number of ways. Movements in
interest rates may affect the fair value of fixed-interest rate securities,
income receivable on cash deposits and floating rate securities, and interest
payable on variable rate borrowings, including repo financing. Interest rate
risk is related above all to long-term financial instruments.
Whilst a significant proportion of the portfolio at both current and prior
financial year ends contains securities designated as floating rate, many of
these securities include a fixed interest rate period resulting in a more
predictable income stream than their technical designation would suggest.
Management of Interest Rate Risk
The possible effects on fair value and cash flows that could arise as a result
of changes in interest rates are taken into account as part of the portfolio
management and borrowings processes of the Manager. The Board reviews on a
regular basis the investment portfolio and borrowings. This encompasses the
valuation of fixed-interest and floating rate securities.
When the Company has cash balances, they are held in variable rate bank
accounts yielding rates of interest dependent on the base rate of the
Custodian, the Bank of New York Mellon (International) Limited. Holdings in
Invesco Liquidity Funds plc – Sterling are subject to interest rate changes.
The Company has available repo financing arrangements it can use to finance
investment activity, details of which are shown in notes 7 and 15. The Company
uses these at levels approved and monitored by the Board.
Interest Rate Exposure
The following table shows the Company’s exposure to interest rate risk at
the balance sheet date arising from its monetary financial assets and
liabilities.
Within More than
one year one year Total
£’000 £’000 £’000
2025
Exposure to floating interest rates:
Investments held at fair value through profit or loss 1,008 202,375 203,383
Cash and cash equivalents(i) 21,232 – 21,232
Margin held at brokers (including collateral pledged on CDS) 5,141 – 5,141
27,381 202,375 229,756
Exposure to fixed interest rates:
Investments held at fair value through profit or loss 7,375 201,675 209,050
Derivatives held at fair value through profit or loss – (2,443) (2,443)
Securities sold under agreements to repurchase (38,018) – (38,018)
(30,643) 199,232 168,589
Net exposure to interest rates (3,262) 401,607 398,345
Within More than
one year one year Total
£’000 £’000 £’000
2024
Exposure to floating interest rates:
Investments held at fair value through profit or loss – 164,673 164,673
Cash and cash equivalents(i) 8,153 – 8,153
Margin held at brokers (including collateral pledged on CDS) 2,783 – 2,783
10,936 164,673 175,609
Exposure to fixed interest rates:
Investments held at fair value through profit or loss 1,509 199,749 201,258
Derivatives held at fair value through profit or loss – (1,223) (1,223)
Securities sold under agreements to repurchase (45,127) – (45,127)
(43,618) 198,526 154,908
Net exposure to interest rates (32,682) 363,199 330,517
(i) Includes £16,118,000 (2024: £250,000) held in
Invesco Liquidity Fund plc - Sterling.
The nominal interest rates on the investments at fair value through profit or
loss are shown in the portfolio list on pages 24 to 31.
The weighted average effective interest rate on these investments is 7.9%
(2024: 7.6%). The weighted average effective interest rate on cash and cash
equivalents is 3.21% (2024: 4.07%).
Interest Rate Sensitivity
The following table illustrates the sensitivity of the profit or loss after
taxation for the year to a 3.25% (2024: 3.25%) increase in interest rates in
regard to the Company’s financial assets and financial liabilities. As
future changes cannot be estimated with any degree of certainty, the
sensitivity analysis is based on the Company’s financial instruments held at
the balance sheet date, with all other variables held constant.
2025 2024
£’000 £’000
Effect on Statement of Comprehensive Income – profit after taxation
Revenue profit 857 355
Capital loss (52,169) (47,570)
Total loss after taxation for the year (51,312) (47,215)
Effect on NAV per ordinary share (25.4)p (23.3p)
If interest rates had decreased by 3.25% (2024: 3.25%), this would have had an
equal and opposite effect.
The above exposure and sensitivity analysis are not representative of the year
as a whole, since the level of exposure changes frequently as borrowings,
which are predominantly from repo financing arrangements, can vary throughout
the year.
19.1.3 Other
Price Risk
Other price risk includes changes in market prices, other than those arising
from currency risk or interest rate risk, which may affect the value of the
investment portfolio, whether by factors specific to an individual investment
or its issuer, or by factors affecting the wider market.
Management of Other Price Risk
It is the portfolio managers’ responsibility to manage the portfolio and
borrowings in accordance with the investment objective and policy, and in
accordance with the investment policy guidelines set by the Board. The Board
manages the market price risks inherent in the investment portfolio by meeting
regularly to monitor on a formal basis compliance with these. The Board also
reviews investment performance. Because the Company’s portfolio is the
result of the portfolio managers’ investment process, performance may not
closely correlate with the markets in which the Company invests.
The Company’s exposure to other changes in market prices at 31 December on
its investments is shown in the fair value hierarchy table on pages 70 and 71.
Concentration of Exposure to Other Price Risks
The Company’s investment portfolio is not concentrated in any single country
of domicile, however, it is recognised that an investment’s country of
domicile or listing does not necessarily equate to its exposure to the
economic conditions in that country.
Other Price Risk Sensitivity
Excluding fixed interest securities and convertibles, at the year end the
Company held other investments of £7,781,000 (2024: £11,032,000). The effect
of a 10% increase or decrease in the fair values of these investments
(including any exposure through derivatives) on the profit after taxation for
the year is £778,000 (2024: £1,103,000). This level of change is considered
to be reasonably possible based on the observation of market conditions during
the financial year.
19.2 Liquidity Risk
This is the risk that the Company may encounter difficulty in meeting its
obligations associated with financial liabilities i.e. when realising assets
or raising/replacing repo financing to meet financial commitments. A lack of
liquidity in the portfolio may make it difficult for the Company to realise
assets at or near their purported value in the event of a forced sale.
Management of Liquidity Risk
Liquidity risk is not viewed by the Directors as a significant risk because
the majority of the Company’s assets comprise readily realisable securities,
although a lack of liquidity in non-investment grade securities may make it
difficult to rebalance the Company’s investment portfolio as and when the
portfolio managers believe it would be advantageous to do so. On a daily basis
the portfolio managers ascertain the Company’s cash and borrowing
requirements by reviewing future cash flows arising from purchases and sales
of investments, interest and dividend receipts, expenses and dividend
payments, and available financing (including repo financing).
Liquidity Risk Exposure
The contractual maturities of the financial liabilities at 31 December, based
on the earliest date on which payment can be required, was as follows:
2025 2024
Less than More Less than More
three than one three than one
months year Total months year Total
£’000 £’000 £’000 £’000 £’000 £’000
Amounts due to brokers (note 14) 5,215 – 5,215 – – –
Accruals and amounts payable relating to
issue of new shares (note 14) 983 – 983 1,000 – 1,000
Derivative financial instruments – payable
(note 13) 24 2,443 2,467 2,321 1,223 3,544
Securities sold under agreements to
repurchase (note 15) 38,018 – 38,018 45,127 – 45,127
44,240 2,443 46,683 48,448 1,223 49,671
19.3 Credit Risk
Credit risk is the risk that the failure of the counterparty to a transaction
to discharge its obligation under that transaction could result in a loss to
the Company. The Company’s principal credit risk is the risk of default on
the non-investment grade debt. The Company’s other main credit risk arises
from the repo financing arrangements whereby, if a counterparty failed to sell
the required assets to the Company on the repurchase date, the Company would
be left with the claim against the defaulting counterparty for the stock and,
if applicable, any margin held by the counterparty and not returned.
At the year end 57.7% (2024: 64.5%) of the Company’s portfolio consisted of
non-investment grade securities. To the extent that the Company invests in
non-investment grade securities, the Company may realise a higher current
yield than the yield offered by investment grade securities. On the other
hand, investments in such securities involve a greater volatility of price and
a greater risk of default by the issuers of such securities, with consequent
loss of interest payments and principal. Non-investment grade securities are
likely to be subject to greater uncertainties from exposure to adverse
conditions and will be speculative with respect to an issuer’s capacity to
meet interest payments and repay principal in accordance with its obligations.
Investment grade and non-investment grade securities totalled 87.7% (2024:
91.2%) of the portfolio at the year end. Adverse changes in the financial
position of an issuer of such high-yield fixed-interest securities or in
general economic conditions may impair the ability of the issuer to make
payments of principal and/or interest or may cause the liquidation or
insolvency of an issuer.
The portfolio may be adversely affected if the Company’s custodian suffers
insolvency or other financial difficulties. The appointment of a depositary
has substantially lessened this risk. The Board reviews the custodian’s
annual controls report and the Manager’s management of the relationship with
the custodian.
Management of and Exposure to Credit Risk
Almost all of the Company’s assets are subject to credit risk. Where the
portfolio managers make an investment in a bond, corporate or otherwise, the
credit rating of the issuer is also considered when assessing the risk of
defaults. Investments in bonds are across a variety of industrial sectors and
geographical markets to avoid concentration of credit risk. Counterparties for
derivative transactions are also a source of credit risk. Transactions
involving derivatives are entered into only with banks whose credit ratings
are taken into account to minimise default risk. The credit ratings of the
derivatives counterparties range from Aa3 through to Baa1. In addition, the
Company may use credit default swaps to offset the credit risk of the
portfolio. At the year end, credit default swaps with a market value of
£(2,443,000) were held by the Company (2024: £(1,223,000)).
Details of the Company’s investments, including their credit ratings, are
shown below. Credit risk for transactions involving derivatives and equity
investments is minimised as the Company only uses approved counterparties.
2025 2024
% of Cumulative % of Cumulative
Rating Portfolio Total % Portfolio Total %
Investment Grade:
AAA 0.2 0.2 – –
AA+ 0.2 0.4 0.2 0.2
AA 1.5 1.9 2.6 2.8
A+ 0.3 2.2 0.2 3.0
A – 2.2 0.1 3.1
BBB+ 2.2 4.4 0.6 3.7
BBB 17.4 21.8 19.0 22.7
BBB– 8.2 30.0 4.0 26.7
Non-investment Grade:
BB+ 9.1 39.1 7.5 34.2
BB 10.4 49.5 15.4 49.6
BB– 8.7 58.2 13.6 63.2
B+ 7.4 65.6 5.5 68.7
B 12.0 77.6 14.1 82.8
B– 5.7 83.3 4.9 87.7
CCC+ 2.2 85.5 0.7 88.4
CCC 2.2 87.7 0.7 89.1
CC – 87.7 2.1 91.2
NR (including equity and CDS) 12.3 100.0 8.8 100.0
100.0 100.0
Summary of Analysis
Investment Grade 30.0 26.7
Non-investment Grade 57.7 64.5
NR (including equity and CDS) 12.3 8.8
Total 100.0 100.0
NR: not rated.
The Company manages the credit risk inherent in repo financing by only dealing
with good quality counterparties whose credit-standing is reviewed
periodically by the Manager. There is a maximum limit
allowed with any one counterparty, and the repo entered into must have a
maturity tenor of three months or less. The Company has exposure to credit
risk on securities pledged under repo financing held, with 4 counterparties,
as follows (2024: 3 counterparties):
2025 2024
Market Market
value of Net value of Net
Amounts securities credit Amounts securities credit
borrowed pledged exposure borrowed pledged exposure
under under to under under to
repo repo counter repo repo counter
financing financing party financing financing party
Counterparty Rating Location £’000 £’000 £’000 £’000 £’000 £’000
Barclays A1/A+ UK 3,573 4,201 628 – – –
BNP UK A1/A+ UK 21,678 25,393 3,715 35,991 40,440 4,449
Morgan Stanley A1/A- UK 6,444 7,576 1,132 4,852 5,977 1,125
HSBC A1/A+ UK 6,323 7,626 1,303 4,284 5,044 760
38,018 44,796 6,778 45,127 51,461 6,334
Net credit exposure as % of net assets 1.7% 1.8
2025 2024
Receivable/ Cash collateral Receivable/ Cash collateral
Counterparty (payable) for pledged/ Counterparty (payable) for pledged/
country of derivatives (received) country of derivatives (received)
Name of counterparty incorporation £’000 £’000 incorporation £’000 £’000
Bank Of America United States (2,443) 3,289 United States (1,223) 2,021
Cash balances are held with approved deposit takers only and are limited to a
maximum of 4% of the Company’s net asset value with any one deposit taker.
Balances held with Invesco Liquidity Funds plc, a triple-A rated money market
fund, are limited to a maximum of 10% of the Company’s net asset value. At
the balance sheet date the Company had £5.11 million (2024: £7.90
million) held at the custodian and £16.12 million held in Invesco
Liquidity Funds plc – Sterling (2024: £0.25 million).
There are no financial assets that are past due or impaired at the year end
(2024: none).
Fair Values of Financial Assets and Financial
Liabilities
Financial assets are either carried in the balance sheet at their fair value
(investments and derivatives), or the balance sheet amount is a reasonable
approximation of fair value (due from brokers, dividends receivable, accrued
income, due to brokers, accruals and cash).
Financial liabilities are carried at amortised cost except for derivatives,
which as stated above are carried at fair value.
20. Classification Under Fair Value
Hierarchy
The valuation techniques used by the Company are explained in the accounting
policies note 2(c). The table that follows sets out the fair value of the
financial instruments. The three levels set out in IFRS 7
hierarchy follow:
Level 1 – The unadjusted quoted price 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 (i.e. developed using market data) for the asset or liability,
either directly or indirectly.
Level 3 – Inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
Categorisation within the hierarchy is determined on the basis of the lowest
level input that is significant to the fair value measurement of each relevant
asset/liability.
Normally investments would be valued using stock market active prices, with
investments disclosed as Level 1 and this is the case for the quoted equity
investments that the Company holds. However, the majority of the Company’s
investments are non-equity investments. Evaluated prices from a third party
pricing vendor are used to price these securities, together with a price
comparison made to secondary and tertiary evaluated third party sources.
Evaluated prices are in turn based on a variety of sources including broker
quotes and benchmarks. As a result, the Company’s non-equity investments
have been shown as Level 2 – recognising that the fair
values of these investments are not as visible as quoted equity investments
and their higher inherent pricing risk. However, this does not mean that the
fair values shown in the portfolio valuation are not achievable at point of
sale.
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
2025
Financial assets designated at fair value
through profit or loss:
Quoted Investments:
– Fixed interest securities (i) – 338,116 1,332 339,448
– Convertibles – 64,695 – 64,695
– Government – 8,290 – 8,290
– Preference 2,991 – 3,654 6,645
– Equities 55 135 946 1,136
Derivative financial instruments:
– Currency hedges – 1,705 – 1,705
– Credit default swaps – (2,443) – (2,443)
Total for financial assets 3,046 410,498 5,932 419,476
A reconciliation of the fair value of Level 3 is set out below.
2025
£’000
Opening fair value 7,420
Transfers from Level 2 to Level 3 (ii) 5
Purchases at cost 308
Sales
– proceeds (629)
– net realised losses (1,433)
Movement in holding gains/(losses) 261
Closing fair value of Level 3 5,932
(i) Fixed interest securities include both fixed and
floating rate securities. The directors consider the floating rate securities
held by the Company to be fixed in nature due to their characteristics,
including a predictable income stream.
(ii) Frigoglass Common Stock was reclassified from Level
2 to Level 3 of the fair value hierarchy during the year. The transfer
reflects reduced market observability of key valuation inputs, resulting in
the fair value measurement now relying on significant unobservable inputs.
Level 3 investments are investments for which inputs are unobservable (i.e.
for which market data is unavailable). The Level 3 investments in the
portfolio and their respective values at the year end were Haleon 9.5%
Preference £3,654,000 (2024: £3,661,000), Frigoglass 11% PIK 27 Mar 2026
£1,145,000 (2024: £969,000), Frigoglass 0% 27 Mar 2028 £187,000 (2024:
£nil), Frigoglass Common Stock £5,000 (2024: £5,000 shown as Level 2),
Codere A1 Shares £639,000 (2024: £2,132,000) and Codere A2 Shares £302,000
(2024: £658,000). Haleon 9.5% Preference price is based on a single private
indicative broker quote with no publicly observable market price available,
therefore as the price is unobservable this investment has been classified as
Level 3. Frigoglass 11% PIK 27 Mar 2026, Frigoglass 0% 27 Mar 2028: judgement
involved assessing the seniority of this security (regarded as “Super
Senior” in relation to the other Frigoglass traded debt securities) which
would be a key consideration should the company fail, with a resultant higher
price level compared to comparable Frigoglass traded debt securities, further
justified by its short-term maturity. The Codere A1 and A2 securities, which
were taken on as part of a second restructuring where the Portfolio Manager
agreed to participate in short-term financing, are priced based on private
indicative broker quotes as no publicly observable market price is currently
available for these securities. Given the restricted nature of these quotes,
being generally unobservable, that trading may not be visible due to trading
taking place on the OTC market, a cautious judgement was applied, taking the
lowest bid quote available.
Any non-actively traded investments are reviewed relative to appropriate
supporting evidence. The Board reviews detailed portfolio valuations on a
regular basis throughout the year and receives confirmation from the Manager
that the pricing basis is appropriate and in line with relevant accounting
standards as adopted by the Company.
The categorisation of an investment within the hierarchy is based upon the
pricing transparency of the investment and does not necessarily correspond to
the Directors’ perceived risk of that investment.
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
2024
Financial assets designated at fair value
through profit or loss:
Quoted Investments:
– Fixed interest securities (i) – 289,607 969 290,576
– Convertibles – 64,897 – 64,897
– Government – 10,458 – 10,458
– Preference 4,513 – 3,661 8,174
– Equities 63 5 2,790 2,858
Derivative financial instruments:
– Currency hedges – (1,906) – (1,906)
– Credit default swaps – (1,223) – (1,223)
Total for financial assets 4,576 361,838 7,420 373,834
A reconciliation of the fair value of Level 3 is set out below.
2024
£’000
Opening fair value –
Securities resulting from restructure 6,913
Purchases at cost 3,694
Movement in holding gains/(losses) (3,187)
Closing fair value of Level 3 7,420
(i) Fixed interest securities include both fixed and
floating rate securities. The directors consider the floating rate securities
held by the Company to be fixed in nature due to their characteristics,
including a predictable income stream.
21. Capital Management
The Company’s capital, or equity, is represented by its net assets which are
managed to achieve the Company’s investment objective set out on page 11.
The main risks to the Company’s investments are shown in the Business Review
under the ‘Principal and Emerging Risks and Uncertainties’ section on
pages 14 and 15. These also explain that the Company is able to gear and that
gearing will amplify the effect on equity of changes in the value of the
portfolio.
The Board can also manage the capital structure directly since it has taken
the powers, which it is seeking to renew, to issue and buy-back shares and it
also determines dividend payments.
The Board regularly monitors the level of borrowing used by the Company and
has imposed limits within which borrowings should be managed.
Total equity at 31 December 2025, the composition of which is shown on the
balance sheet on page 54, was £410,275,000 (2024: £345,799,000).
22. Contingencies, Guarantees and
Financial Commitments
Liabilities the Company is committed to honour but which are dependent on a
future circumstance or event occurring would be disclosed in this note if any
existed.
There were no contingencies, guarantees or other financial commitments of the
Company as at 31 December 2025 (2024: nil).
23. Related Party Transactions and
Transactions with Manager
A related party is a company or individual who has direct or indirect control
or who has significant influence over the Company.
Under IFRS Accounting Standards as adopted by the EU, the Company has
identified the Directors and their dependents as related parties. Directors
fees paid have been disclosed in the Directors’ Remuneration Report on pages
43 and 44 with additional disclosure in note 6. Full details of Directors’
interests are set out in the Directors’ Remuneration Report on page 44. No
other related parties have been identified.
Invesco Fund Managers Limited and Invesco Asset Management Limited, both of
which are wholly owned subsidiaries of Invesco Limited, provided investment
management and administration services to the Company. Invesco Limited or its
subsidiaries are not considered related parties as they do not have direct or
indirect control nor significant influence over the Company. Details of the
services and fees are disclosed in the Business Review and management fees
payable are shown in note 5.
24. Post Balance Sheet Events
Any significant events that occurred after the end of the reporting period but
before the signing of the balance sheet will be shown here.
There was a successful placing and Winterflood Retail Access Platform
(‘WRAP’) retail offer, announced on 29 January 2026
raising total proceeds (net of commission) of £24,780,000. The Company has
issued a total of 14,372,588 new ordinary shares of no par value in the
capital of the Company at a price of 173.28p per New Share, representing a
0.75% premium to the cum-income NAV per Share as at 10 February 2026, being
the last published NAV per Share prior to the close of the Placing and the
WRAP Retail Offer. 7,710,707 New Shares were issued pursuant to the Placing
and 6,661,881 New Shares were issued pursuant to the WRAP Retail Offer.
This annual financial report announcement is not the Company’s statutory
accounts. The statutory accounts for the
period ended 31 December 2025 have been audited and approved but are not yet
filed. They received an audit report which is
unqualified and does not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying the report.
The audited annual financial report will be posted to shareholders shortly.
Copies may be obtained during normal business
hours from the Company’s Registered Office, JTC Fund Solutions (Jersey)
Limited, PO Box 1075, 28 Esplanade, St Helier, Jersey JE4 2QP or the
Manager’s website via the directory found at the following link:
www.invesco.co.uk/bips. The Annual
General Meeting of the Company will be held at 9.30am on 17 June 2026 at the
Company’s Registered Office.
A copy of the annual financial report will be
submitted shortly to the National Storage Mechanism ("NSM") and will be
available for inspection at the NSM, which is situated at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
.
Claire Brazenall
JTC Fund Solutions (Jersey) Limited
Company Secretary
Telephone: 01534 700000
31 March 2026
LEI: 549300JLX6ELWUZXCX14
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