REG - Murray Intnl Trust - Annual Financial Report
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RNS Number : 2091V Murray International Trust PLC 04 March 2026
MURRAY INTERNATIONAL TRUST PLC
Legal Entity Identifier (LEI): 549300BP77JO5Y8LM553
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2025
- During the period the Company delivered a NAV total return of +21.9% and a
share price total return of +36.0%, this compares to a +4.2% rise in the
Retail Price Index and a +12.6% increase in the Benchmark
- The Discount narrowed steadily and closed completely by December 2025, with
the share price finishing the year at a 3.0% premium (2024: 7.5% discount)
- The portfolio's truly global and diverse composition was the primary driver of
returns, demonstrating resilience during the volatile first half of the year,
and keeping pace as markets rallied to new highs in the second half
- Companies outside the US delivered notably strong results, and significant
exposures in Latin America and Asia contributed meaningfully to performance
- The strongest contributors spanned a wide range of geographies and industries,
this breadth highlights the value of the portfolio's balanced and diversified
positioning. Examples include:
-Taiwan Semiconductor Manufacturing Company (full year revenue rose 31.6% to
NT$3.81 trillion, a record high)
-Singapore Telecommunications (9% increase in underlying net profit to S$2.47
billion)
- Broadcom (consolidated revenue reached a record US$64 billion),
- Philip Morris International (reduced-risk and smoke-free products, which now
represent approximately 40% of revenues) and
- British American Tobacco (savings expected to exceed £1.2 billion by
year-end)
- In 2025 healthcare and alcohol producers were among the weakest performers
(Merck, Bristol Myers Squibb, Diageo, Pernod Ricard)
- The Board is recommending a final dividend of 4.6 pence per Ordinary share
(2024 4.3 pence per share). This proposed final dividend, together with the
interim dividends already paid, brings the total dividend for the year to 12.8
pence per share (2024: 11.8 pence per share), an increase of over 5%
- The Company is recognised as an AIC 'Dividend Hero' with 21 consecutive years
of dividend increases
Virginia Holmes, the Company's Chair, commented:
By almost any metric, this has been a strong year for your Company which has
delivered robust absolute and relative performance. The Net Asset Value
('NAV') total return was 21.9%, while the share price total return was 36.0%,
compared with a Benchmark total return of 12.6%.
Highlights
Net asset value total return(AB) - 2025 Share price total return(AB) - 2025
+21.9% +36.0%
2024 +8.1% 2024 +4.5%
Retail Price Index(B) - 2025 Benchmark total return(BC) - 2025
4.2% +12.6%
2024 3.5% 2024 +19.8%
Revenue return per share(B) - 2025 Dividends per share(BE) - 2025
13.9p 12.4p
2024 11.6p 2024 11.8p
Premium/(discount) to net asset value(AD) - 2025 Dividend yield(AD) - 2025
3.0% 3.7%
2024 -7.5% 2024 4.6%
Net gearing(AD) - 2025 Ongoing charges ratio(AD) - 2025
4.4% 0.50%
2024 6.1% 2024 0.52%
(A) Alternative Performance Measure (see pages 117 to 119 of the published
Annual Report and financial statements for the year ended 31 December 2025).
(B) For the year to 31 December.
(C) From 1 July 2025 the MSCI ACWI High Dividend Yield Index was adopted as
the Company's Benchmark Index. Longer term performance is measured against a
blend of the Benchmark Index combined with the former composite benchmark (40%
of the FTSE World UK Index and 60% of the FTSE World ex-UK Index) for periods
up to 27 April 2020 and the former reference index (FTSE All World TR Index)
between 28 April 2020 and 30 June 2025.
(D) As at 31 December.
(E) Dividends declared for the year to which they relate and assuming
shareholder approval of final dividend.
Dividends
Rate Ex-dividend date Record date Payment date
1st interim 2.6p 3 July 2025 4 July 2025 15 August 2025
2nd interim 2.6p 2 October 2025 3 October 2025 18 November 2025
3rd interim 2.6p 2 January 2026 5 January 2026 17 February 2026
Proposed final 4.6p 9 April 2026 10 April 2026 18 May 2026
Total dividends 12.4p
Shareholder Engagement
Online Investor Webinar
9 April 2026
Annual General Meeting
23 April 2026
Half Yearly Results
August 2026
Annual Results
March 2027
Financial Highlights
31 December 2025 31 December 2024 % change
Total assets(A) £2,030.9m £1,788.8m +13.5
Net assets £1,921.0m £1,678.8m +14.4
Market capitalisation £1,977.3m £1,553.1m +27.3
Net Asset Value per Ordinary share 325.4p 278.4p +16.9
Share price per Ordinary share (mid market) 335.0p 257.5p +30.1
Premium/(discount) to Net Asset Value per Ordinary share(B) 3.0% -7.5%
Net gearing(B) 4.4% 6.1%
Revenue return per share 13.9p 11.6p +19.8
Dividends per share(C) 12.4p 11.8p +5.1
Dividend cover (including proposed final dividend)(B) 1.12x 0.98x
Dividend yield(B) 3.7% 4.6%
Revenue reserves(D) £85.4m £74.2m
Ongoing charges ratio(B) 0.50% 0.52%
(A) See definition on page 129 of the published Annual Report and financial
statements for the year ended 31 December 2025.
(B) Considered to be an Alternative Performance Measure as defined on pages
117 and 118 of the published Annual Report and financial statements for the
year ended 31 December 2025.
(C) The figure for dividends per share reflects the years to which their
declaration relates (see note 8 on page 98 of the published Annual Report and
financial statements for the year ended 31 December 2025) and assuming
approval of the final dividend of 4.6p (2024 - final dividend of 4.6p).
(D) The revenue reserve figure does not take account of the third interim and
final dividends amounting to £15,347,000 and £27,222,000 respectively (2024
- third interim dividend of £15,078,000 and final dividend of £25,590,000).
STRATEGIC REPORT
Chair's Statement
I am pleased to present this Annual Report for the year ended 31 December
2025.
By almost any metric, this has been a strong year for your Company which has
delivered robust absolute and relative performance. The Net Asset Value
('NAV') total return was 21.9%, while the share price total return was 36.0%,
compared with a Benchmark total return of 12.6%. Revenue generated by the
Company's portfolio was also up significantly on last year.
Background
Global capital markets in 2025 were shaped by a familiar mix of corporate
fundamentals, macroeconomic dynamics, monetary policy shifts, geopolitical
tensions, technological innovation, and shifting investor sentiment.
Equity markets began the year with strong momentum buoyed by President Trump's
return to office in the US and expectations of tax cuts and deregulation
there. While optimism initially drove gains across risk orientated stocks,
confidence faded quickly. The sharp "Liberation Day" sell-off in April marked
a turning point, triggered by renewed tariff uncertainty, mounting fiscal
concerns, tensions between the US administration and the Federal Reserve, and
a series of unpredictable policy announcements.
Geopolitical developments added further complexity. The conflict between
Russia and Ukraine continued, and tensions in the Middle East escalated during
the spring, culminating in a brief direct confrontation between Israel and
Iran. Markets initially reacted defensively, but a swift ceasefire helped
stabilise sentiment.
Despite the noisy market environment, market weakness was relatively short
lived. Towards the end of May, risk appetites recovered as global trade
tensions eased following a surprise US-China truce, a framework trade
agreement with the United Kingdom, and additional bilateral deals elsewhere.
Equity markets rebounded strongly, with major indices reaching new all-time
highs. Technology and artificial intelligence (AI)-related stocks led the
rally, particularly in US and Asian markets, while gains broadened across
sectors. Inflation trends moderated in several developed economies and
financial conditions remained generally stable.
By year-end, markets had navigated political uncertainty, geopolitical shocks,
and sharp swings in sentiment, ultimately delivering solid outcomes for
investors in global equities.
Performance
Against this volatile background, I am pleased to report that the Company's
net asset value per share posted a total return (i.e. with dividends
reinvested) of 21.9%, and the share price delivered a total return of 36.0%.
This compares favourably with the UK Retail Price Index (RPI) increase of 4.2%
and the total return of 12.6% from the Company's new Benchmark (see below).
Further detail on portfolio performance, including significant contributors
and detractors, can be found in the Investment Manager's Review.
MSCI ACWI High Dividend Yield Index
As I reported at the Half Year, during early 2025, the Board reviewed the
appropriateness of using the FTSE All-World Index as the Company's "Reference
Index". As a result of this review, the Board concluded that it would be more
helpful for shareholders if the index against which the portfolio's
performance is measured was more reflective of the Company's investment style.
The Board therefore determined that with effect from 1 July 2025, the previous
reference index should be changed and the MSCI ACWI High Dividend Yield Index
adopted in its place as the Company's Benchmark Index from that date. Longer
term performance is measured against a blend of the Benchmark Index combined
with the former composite benchmark (40% of the FTSE World UK Index and 60% of
the FTSE World ex-UK Index) for periods up to 27 April 2020 and the former
reference index (FTSE All World TR Index) between 28 April 2020 and 30 June
2025.
Dividends
Revenue return per share for the year (after tax and expenses) amounted to
13.9 pence per share, compared with 11.6 pence for the previous financial
year. This increase primarily reflects the growth in portfolio revenue to
£95.9m (2024: £84.2m). Three interim dividends of 2.6 pence per share (2024:
2.5 pence per share), were declared during the year. The Board is recommending
a final dividend of 4.6 pence per Ordinary share (2024: 4.3 pence per
share). This proposed final dividend, together with the interim dividends
already paid, brings the total dividend for the year to 12.4 pence per share
(2024: 11.8 pence per share), an increase of 5.1%. If approved at the Annual
General Meeting on 23 April 2026, this final dividend will be paid on 18 May
2026 to shareholders on the register as at 10 April 2026 (ex-dividend date 9
April 2026).
The dividend will be fully funded from revenue received during the year, which
represents dividend cover of 1.12x (2024: 0.98x), and a significant sum of
£11.2m will also be added to the Company's revenue reserves. As a
long-established investment trust, the Company has the benefit of over £85.4
million of distributable revenue reserves on its balance sheet at 31 December
2025 which have been accumulated over many years from realised earnings.
These reserves are available to support dividend distributions where the Board
considers this to be appropriate. This means that, in some years, revenues
will be added to reserves while in others an amount may be taken from reserves
to supplement revenue earned during that year. Over time, the Company will
aim to pay out what the underlying portfolio earns in sterling terms. The
Board intends to maintain the Company's progressive dividend policy.
With a globally diversified portfolio focused on delivering attractive and
growing income backed by underlying profits from strong businesses, as well as
growing capital, Murray International continues to demonstrate the resilience
and reliability that we believe income-focused investors value, reinforced by
its ongoing recognition as an AIC 'Dividend Hero' with 21 consecutive years of
dividend increases.
Management of Discount and Share Capital
For much of the year, the Company's shares traded at a discount to the NAV, in
line with the broader investment trust sector. The Board is pleased to report
that this discount narrowed steadily and had closed completely by December
2025, with the share price finishing the year at a 3.0% premium (2024: 7.5%
discount).
When the shares traded at a discount, the Company acted to reduce volatility
and enhance the NAV for ongoing shareholders, buying back 12.9m Ordinary
shares (2024: 17.7m Ordinary shares) at a total cost of £35.1m (2024:
£54.1m). These shares were purchased at a weighted average discount of 7.9%
and represented 2.1% of the Company's issued share capital at the start of the
year (2024: 2.8%). This activity increased the NAV per share by 0.16%.
Consistent with its disciplined, long-term approach, the Board remains
committed to managing temporary supply-demand imbalances in order to reduce
volatility around the discount or premium to NAV, in the interests of all
shareholders.
Since the year-end, the Company has sold over 1.5m shares from Treasury at a
premium to NAV. No shares have been purchased for Treasury. At close of
business on 2 March 2026, the latest practicable date prior to publication of
this Annual Report, the NAV (including income) per share was 357.9 pence and
the share price was 362.5 pence, equating to a premium of 1.3% per Ordinary
share.
As in previous years, resolutions to renew the authority to buy back shares
(at a discount to the NAV) and to issue or sell shares from Treasury (at a
premium to the NAV) will be proposed at the Annual General Meeting ('AGM') on
23 April 2026, and shareholders are encouraged to support these proposals.
Gearing
Total borrowings at year-end were unchanged at £110m (2024: £110m),
comprising unsecured fixed rate sterling loan notes, not repayable until 2031
at the earliest. This represents net gearing (calculated by dividing the total
borrowings less cash by shareholders' funds) of 4.4% (2024: 6.1%). The
weighted cost of borrowing is 2.56%. The Board monitors borrowing costs and
will only consider increasing gearing when it is considered commercially
attractive to do so.
Ongoing Charges Ratio ("OCR")
The Board remains focused on delivering value to shareholders through
disciplined cost control. The OCR for 2025 was 0.50% (2024: 0.52%), remaining
one of the lowest in the AIC Global Equity Income sector.
Board of Directors
Following the retirement of Mrs Alexandra Mackesy at the April 2025 AGM, the
Directors were pleased to welcome Mr Jeroen Huysinga as an independent
Non-Executive Director on 1 May 2025. Jeroen brings over 20 years of global
equity and investment trust experience, including as Managing Director, Global
Equities at JP Morgan Asset Management.
Online Investor Presentation and AGM
Following the success of previous events, and with 280 investors joining in
2025, the Board will host another online investor presentation at 11.00 a.m.
on Thursday 9 April 2026, ahead of and in addition to the in-person AGM. The
online presentation will include updates from me, as Chair, and the investment
management team, followed by a live question and answer session.
Full details on how to join the online event can be found on the Company's
website at murray-intl.co.uk. For those unable to join, a full recording will
be made available on the Company's website shortly afterwards.
I would encourage all shareholders to submit proxy votes ahead of the AGM,
whether or not they plan to attend in person. Shareholders on the main
register can do this by completing and returning the proxy form which has been
sent to them. Shareholders holding on a platform via a nominee may find
further guidance via the AIC at theaic.co.uk/how-to-vote-your-shares.
The AGM will take place at 12:30 p.m. on 23 April 2026, at Wallacespace
Spitalfields, 15 Artillery Lane, London E1 7HA and will be followed by a
buffet lunch and an opportunity to meet the Board and the investment
management team.
Questions for either event can be submitted via murray-intl@aberdeenplc.com,
and shareholders are welcome to email me directly at
VirginiaHolmes.Chair@aberdeenplc.com.
Outlook
Looking ahead to 2026, the global investment landscape is likely to continue
reflecting the shift toward a more fragmented, multipolar world. Periods of
volatility are inevitable, but history shows that patient, long-term investors
can continue to find opportunities.
Global growth is expected to continue, though unevenly, constrained by tighter
financial conditions and geopolitical uncertainty. Monetary policy in
developed markets is likely to remain relatively restrictive compared with the
post financial crisis era, even as headline inflation continues to moderate.
Central banks are expected to move cautiously, prioritising credibility and
financial stability over short-term growth, for the time being. In addition,
investor sentiment towards emerging markets appears to be improving, where
central banks potentially have more room to cut rates and where earnings
growth and relative valuations remain attractive.
Corporate profitability remains broadly positive, although performance may
vary significantly across geographies and industries.
Against this backdrop, we believe that a disciplined, diversified, and truly
global income-focused strategy, remains well positioned to support long-term
wealth creation for shareholders. These principles are at the core of our
Manager's distinctive approach.
Virginia Holmes
Chair
3 March 2026
Investment Manager's Review
Summary
2025 was a year of stark contrasts for global markets, revealing both
vulnerability to sudden shocks and an underlying resilience amid persistent
volatility. Investors contended with political upheaval, economic uncertainty,
and ongoing geopolitical tensions, all of which weighed on confidence across
asset classes. The year opened on a strong footing, supported by optimism
following President Trump's return to office in the US, including expectations
of tax reform and deregulation. However, sentiment deteriorated rapidly.
April's "Liberation Day" proved a decisive inflection point, with markets
unsettled by tariff threats, fiscal instability, strained relations with the
Federal Reserve, and inconsistent policy signals from Washington.
Efforts to advance peace in conflict regions, including Russia/Ukraine and the
Middle East, offered little respite. Although the market backdrop was
volatile, the period of weakness proved brief. By the end of May, sentiment
improved, following a surprise trade détente between the US and China,
alongside broader framework agreements that eased fears of a deeper global
trade rupture. This shift supported a summer rally, with equities reaching new
highs, particularly in the US and Asia.
Volatility resurfaced in the second half of the year as inflationary pressures
persisted, labour market uncertainty re-emerged, and fiscal and political
concerns intensified. Yet markets proved resilient. Strong corporate earnings,
accelerating AI adoption, and robust consumer demand helped global equities
finish the year near record levels.
Against this backdrop, the benefits of the Company's globally diversified
approach remained clear, underpinned by its focus on attractive income and
long-term capital growth.
Performance
Performance over the full financial year was strong. The Company's NAV total
return was 21.9%, outperforming the Benchmark, which returned 12.6%. This also
represented real growth ahead of the UK Retail Price Index ("RPI") rate of
4.2%, aligning with one of the Company's investment objectives and key
performance indicators.
In 2025, the portfolio's truly global and diverse composition was the primary
driver of returns. Companies outside the US, spanning a broad range of
sectors, delivered notably strong results. Significant exposures in Latin
America and Asia contributed meaningfully, as did allocations to
Telecommunications, Financials, Industrials, Materials and Utilities.
Importantly, the portfolio demonstrated resilience during the volatile first
half of the year and then kept pace as markets rallied to new highs in the
second half.
The attribution analysis overleaf outlines the factors influencing portfolio
performance. In summary, of the 8.5% of performance relative to the Benchmark
(before expenses), asset allocation added 5.6% and stock selection added 2.7%.
Structural effects, relating to the fixed income portfolio, cash, foreign
exchange and gearing net of borrowing costs, added a further 0.5% of relative
performance.
Attribution Analysis as at 31 December 2025
Company Benchmark(A) Contribution from:
Asset Stock
Weight Return Weight Return Allocation Selection Total
% % % % % % %
Africa & Middle East - - 3.1 19.3 -0.1 - -0.1
Asia Pacific ex Japan 23.7 31.8 12.6 18.2 0.7 2.7 3.4
Europe ex UK 26.1 21.7 19.7 29.3 1.7 -1.5 0.1
Japan - - 7.5 20.8 -0.5 - -0.5
Latin America 8.0 36.0 0.9 48.6 2.0 -0.7 1.3
North America 32.0 16.9 51.1 7.0 1.4 2.9 4.3
UK 10.2 11.2 5.1 17.8 0.4 -0.5 -0.1
Gross equity portfolio return 100.0 22.2 100.0 12.6 5.6 2.7 8.5
Fixed Interest -0.4
Gearing, cash and foreign exchange 0.9
Gross portfolio return 22.7
Management fees and administrative expenses -0.6
Tax charge -0.4
Technical differences 0.2
Total return 21.9 12.6
(A) From 1 July 2025 the MSCI ACWI High Dividend Yield Index was adopted as
the Company's Benchmark Index. Longer term performance is measured against a
blend of the Benchmark Index combined with the former composite benchmark (40%
of the FTSE World UK Index and 60% of the FTSE World ex-UK Index) for periods
up to 27 April 2020 and the former reference index (FTSE All World TR Index)
between 28 April 2020 and 30 June 2025.
Notes to Performance Analysis
Asset Allocation effect - measures the impact of over or underweighting each
asset category, relative to the benchmark weights.
Stock Selection effect - measures the effect of security selection within each
category.
Technical differences - the impact of different return calculation methods
used for NAV and portfolio performance
Source: Aberdeen Group plc. Figures may appear not to add up due to rounding.
Stocks adding to performance in 2025
The strongest contributors spanned a wide range of geographies and industries,
including an Asian technology company, a communications services firm, a US
technology business and two international consumer staples companies. This
breadth highlights the value of the portfolio's balanced and diversified
positioning.
Taiwan Semiconductor Manufacturing Company ("TSMC") TSMC, the world's largest
contract chipmaker, specialises in cutting-edge semiconductor fabrication
across advanced process nodes, producing smaller, faster, and more
power‑efficient chips. The company, which has been held for over twenty
years, delivered exceptional performance in 2025, driven primarily by surging
demand for artificial intelligence and high-performance computing. Full-year
revenue rose 31.6% to NT$3.81 trillion - a record high.
As impressive as TSMC's fundamentals remain, we have been mindful of how
strongly the shares have performed. We have used this strength to manage the
overall position, trimming both TSMC and other holdings that have been buoyed
by the AI‑related rally, ensuring the portfolio maintains balanced exposure.
Singapore Telecommunications ("Singtel")
Singtel is one of Asia's leading communications technology groups, providing
fixed and mobile services, broadband, TV and digital solutions. Together with
its regional associates - Airtel (India), AIS (Thailand), Globe (Philippines),
Optus (Australia), and Telkomsel (Indonesia) - it serves more than 780 million
customers across 20 countries in Asia, Australia, and Africa.
Share price strength in 2025 was underpinned by robust financial results,
strategic capital management, and continued growth in digital infrastructure.
The company delivered a 9% increase in underlying net profit to
S$2.47 billion, supported by strong contributions from Optus, NCS (IT
services), and regional associates such as Airtel and AIS. Singtel also
exceeded its asset recycling target, raising it from S$6 billion to
S$9 billion, and launched a S$2 billion share buyback programme,
reinforcing investor confidence.
Singtel continued to advance its strategic shift toward high-growth digital
segments, expanding its Nxera data centres across Asia and rolling out
innovative 5G+ network-slicing capabilities, further strengthening its
competitive position.
Broadcom
Broadcom delivered exceptional performance in 2025, driven primarily by the
explosive growth in AI-related semiconductor solutions and ongoing momentum
across its software portfolio. Consolidated revenue reached a record US$64
billion, with AI revenues alone rising 65% to US$20 billion. This was fuelled
by strong demand for custom AI accelerators (ASICs) and advanced AI networking
products, including the Tomahawk 5 and Jericho4 Ethernet switches.
The Infrastructure Software segment also made a significant contribution, with
revenue increasing 26% to US$27 billion, supported by strong adoption of
VMware Cloud Foundation (VCF). Throughout the year, Broadcom benefited from
expanding hyperscaler demand, securing major new customers for its custom
chips and winning large scale orders tied to leading AI platforms.
As with TSMC, we used periods of share price strength to reduce the overall
position, ensuring disciplined portfolio balance.
Philip Morris International
Philip Morris International remained the portfolio's single largest holding at
the half year and retained that position at the end of the full year. The
company continues to be a formidable business, generating strong earnings
growth and substantial free cash flows as it leverages its traditional tobacco
operations to support its transition into reduced-risk and smoke-free
products, which now represent approximately 40% of revenues. Its defensive and
steadily growing earnings stream proved particularly attractive in an
environment unsettled by tariff‑related market volatility earlier in the
year.
Given the strength of the share price, we continued to trim the position
marginally during the period, recycling capital into other holdings that have
been less strong performers but remain fundamentally appealing. While we
remain confident in the investment outlook for Philip Morris, we are mindful
of the growth expectations embedded in its Zyn product (tobacco‑free oral
pouches). As such, the company is unlikely to receive additional capital at
this stage, following its very strong performance over the last twelve months.
British American Tobacco (BAT)
BAT delivered a notably strong performance in 2025, a year characterised by
strategic execution following several years of significant investment. Revenue
rose around 2% on a constant currency basis, slightly ahead of expectations. A
key highlight was the US business, which returned to both revenue and profit
growth for the first time since 2022, supported by stabilising combustible
market share and the withdrawal of the proposed menthol ban.
BAT's smokeless portfolio continued to scale, reaching 18.2% of Group revenue.
Nicotine pouches, particularly the Velo brand, were standout performers,
growing more than 40% in the first half. Strong cash conversion, above 95%,
enabled the company to expand its 2025 share buyback to £1.1 billion.
Meanwhile, productivity initiatives remained firmly on track, with savings
expected to exceed £1.2 billion by year-end, helping to offset inflationary
pressures.
Stocks detracting from performance in 2025
Given the year's volatility and the portfolio's diversified positioning, it is
inevitable that not all holdings delivered positive returns. What matters is
whether periods of weakness challenge the underlying investment thesis or
instead create opportunities to add capital at more attractive valuations. In
2025, a clearer pattern emerged: healthcare and alcohol producers were among
the weakest performers.
Diageo
Diageo's share price struggled in 2025 as a combination of macroeconomic,
category specific, and operational headwinds weighed on performance. Weak
consumer confidence in key markets, particularly the US and China, was a
significant drag, with stretched household budgets and cautious spending
reducing demand for premium spirits. In the US, competitive pressures in
tequila, ongoing destocking, and tough comparisons following prior restocking
of brands such as Don Julio added further strain. These challenges were
compounded by broader premium-spirits weakness linked to the cost of living
backdrop, shifting consumer behaviour, and concerns that weight loss drugs may
dampen alcohol consumption.
Rising inflation and geopolitical uncertainty contributed to a global slowdown
in spirits demand, prompting Diageo to withdraw its medium-term organic growth
guidance amid an uncertain recovery trajectory. Tariff related pressures in
2025 added to difficulties, increasing costs and weighing on sentiment as US
trade tensions escalated. Currency volatility, elevated inventories, and
leadership instability following CEO changes also acted as headwinds.
Despite these challenges, we believe the business continues to exhibit the
core characteristics underpinning the investment thesis. We see long-term
opportunity in the global scotch whisky market, particularly in the US and
China, and continue to value Diageo's broad geographic footprint and the
strength of its brand portfolio. We also believe the company is well placed to
innovate in response to shifting consumer tastes, particularly through low-
and no-alcohol offerings and ready-to-drink formats. While performance has
been disappointing and frustrating to date, we have used share price weakness
to add selectively to the position, as we believe current levels offer
long-term value.
Pernod Ricard
Pernod Ricard faced a challenging 2025, affected by many of the same pressures
that weighed on Diageo. Organic net sales declined for the fiscal year, driven
by pronounced weakness in the US, China, and Global Travel Retail - three of
its four strategic "must win" markets. In the US, softer spirits demand and
ongoing distributor inventory adjustments held back performance, while
persistent US tariffs under the current administration risked costing the
Group €35 million. China proved an even larger drag: sales fell 21% amid
weak demand for Scotch and the effective suspension of Martell shipments in
the second half.
Despite these headwinds, Pernod Ricard maintained strong cost discipline,
expanding organic operating margins and advancing its long term €1 billion
efficiency programme. As with Diageo, we do not believe Pernod Ricard's
investment thesis is broken. We have therefore added to the position during
periods of share price weakness, where we see long-term value emerging despite
near-term pressures.
Bristol Myers Squibb
Bristol Myers Squibb faced significant challenges in 2025, as accelerating
erosion from non-branded generic competition and continued US regulatory and
pricing uncertainty weighed heavily on sentiment. The primary pressure point
was the decline of the Legacy Portfolio: cancer therapies such as Revlimid,
Pomalyst, Sprycel, and Abraxane experienced ongoing volume and pricing
headwinds.
We used the weakness in Bristol Myers Squibb's share price to add to the
position, as the company's Growth Portfolio continued to expand. Key products
including Opdivo, Reblozyl, Camzyos, Breyanzi and the newly approved
schizophrenia medication, Cobenfy, delivered encouraging growth. While these
gains were not yet sufficient to offset the mounting losses from legacy
products or the regulatory headwinds faced during the year, they provide a
credible path toward mitigating patent expiries and rebuilding momentum as the
company transitions beyond its ageing oncology blockbusters.
TELUS
TELUS experienced notable share price weakness throughout 2025, emerging as
one of the clear laggards within the Canadian telecom sector, particularly in
the final third of the year. The primary concern for investors was the
company's elevated payout ratio, which suggested that its long-standing
dividend-growth commitments were becoming increasingly difficult to sustain.
By late 2025, it appeared increasingly likely that dividend outflows could
exceed 100% of free cash flow towards the end of the decade, raising questions
about whether further dividend increases (or even the dividend itself) would
remain financially prudent in the coming years.
At the same time, TELUS faced pressures from rising capital intensity and
heightened competition, continued investment in fibre and 5G networks, and
slower-than-expected returns from its sizeable expansion into TELUS
International. While yield and income remain central to the company's
investment objectives, we place strong emphasis on ensuring that dividends
from portfolio holdings are both sustainable and capable of growing over time.
As our confidence in TELUS' ability to meet this standard diminished, we made
the decision to exit the holding towards the end of the year.
Merck
Merck's share price was weak in 2025, weighed down by disappointing guidance,
product specific setbacks, and mounting pricing and regulatory uncertainty
more broadly across the sector. In early February, the company issued weaker
than expected guidance for 2025, projecting revenue of
US$64.1-US$65.6 billion, meaningfully below the US$67.36 billion consensus
estimate. This guidance surprise triggered an intraday decline of more than
10% - one of the steepest single day drops for Merck in nearly two decades.
Operationally, Merck faced significant product level pressures. Gardasil sales
fell 17% due to weaker demand in China, and the company paused shipments to
the region until mid-2025, further dampening forward revenue expectations.
Market sentiment was also dominated by concerns surrounding the upcoming
patent expiry of Keytruda in 2028, prompting investors to question the
company's medium term growth trajectory.
We added to the position during the year, as we believe Merck's longer-term
valuation case remains compelling. The company is leveraging reformulations to
extend the runway for Keytruda, including the rollout of a more convenient
subcutaneous injection. It is also actively diversifying its revenue base,
supported by strategic pipeline expansion and acquisitions such as Verona
Pharma. Additionally, Merck continues to invest heavily in new product
launches, underpinned by a multiyear US$3 billion cost optimisation
programme designed to redirect resources into higher growth areas.
The top five and bottom five stock contributors are detailed below:
Top Five Stock Contributors %* Bottom Five Stock Contributors %*
TSMC 0.73 Diageo -0.63
Singapore Telecommunications 0.71 Pernod Ricard -0.55
Philip Morris 0.69 Bristol Myers Squibb -0.31
Broadcom 0.60 TELUS -0.31
British American Tobacco 0.59 Merck -0.28
* % relates to the percentage contribution to return relative to the Benchmark
Income Generation
Despite equity market volatility, income generation remained strong. Portfolio
income increased by over £11.7 million, or 13.9%, to £95.9 million. This
robust income profile is fully aligned with the Company's long-standing
commitment to delivering attractive, growing dividends for investors.
Of the 54 income-generating holdings, 42 raised their dividends. Notable
contributors included TSMC, Telkom Indonesia, Siemens, Broadcom, Telefónica
Brazil, Vale, DBS Group, Hong Kong Exchanges & Clearing, Intesa Sanpaolo,
Banorte and OCBC, all of which delivered double-digit dividend increases.
Airport operator Grupo ASUR was the standout, with a 281% increase driven by
special dividends. This reflected the return of excess balance-sheet cash.
However, the magnitude of this distribution is unlikely to be repeatable in
future years.
Ten holdings reduced dividends, largely in line with expectations.
Commodity-exposed names such as BHP, Rio Tinto and Woodside Energy cut payouts
from the prior year, consistent with our forecasts. China Resources Land,
Infosys and Taylor Wimpey reduced dividends by 8%, 9% and 3%, respectively.
Walmart de México increased its regular dividend, but reduced the scale of
its typical special distribution, resulting in a 22% decline in its combined
payout. This outcome was anticipated given the weaker macroeconomic backdrop
in Mexico, where GDP growth has been slowing. Mercedes-Benz Group also reduced
its dividend by 19% amid tariff-related uncertainty. GlobalWafers cut its
payout by 42% after our exit from the stock, as the business navigates subdued
demand for non-AI semiconductor materials and an ambitious overseas investment
programme. CME Group postponed its annual variable dividend into 2026,
aligning it with its first-quarter payment schedule.
We remain acutely aware of the impact currency movements can have on income
when investing globally with an unhedged portfolio, where over 90% of assets
are denominated in currencies other than Sterling. Currency posed a sizeable
headwind in 2024, when Sterling strengthened against most global currencies.
In 2025, the picture was more balanced. While the Pound continued to
appreciate against the Indian Rupee, Indonesian Rupiah, and US Dollar, it
weakened against the Euro, Swedish Krona, Mexican Peso, Swiss Franc, Danish
Krone and Brazilian Real, leading to a more neutral overall impact on income.
Changes to the Portfolio
Turnover was 18.7% (2024: 13%) of gross assets, slightly higher than in prior
years, reflecting market volatility and valuation-driven adjustments. We
trimmed several strong performers including TSMC, Broadcom, Philip Morris,
Enbridge, Siemens and Zurich Insurance Group, and added to holdings where
share-price weakness created attractive opportunities, such as Medtronic,
Merck, Bristol Myers, Pernod Ricard and Diageo.
As noted in the interim report, we exited Atlas Copco due to valuation
concerns, and divested Chilean lithium producer SQM and Taiwanese
semiconductor silicon producer Global Wafers owing to anticipated dividend
declines. Proceeds were redeployed into new positions in Rio Tinto, Italian
financial services company Intesa Sanpaolo, and Indian IT services group
Infosys. We also exited Banco Bradesco in Brazil and China Resources Land into
share-price strength earlier in the year. In the second half, we executed a
switch between two Singaporean financial stocks. We sold Oversea-Chinese
Banking Corporation (OCBC) and initiated a position in DBS Group. The catalyst
was the decline in short-term rates in both the Hong Kong and Singapore
dollars during early- to mid-2025. OCBC has greater exposure to floating-rate
loans in Hong Kong dollars, and we believed consensus expectations for its net
interest income and margins were overly optimistic. DBS, by contrast, appeared
less rate-sensitive due to its hedging practices and offered more diversified
earnings, including a stronger wealth management franchise. The other major
disposal in the second half was Canadian telecom company TELUS, as concerns
mounted about an increasingly competitive environment and the sustainability
of its dividend growth potential.
A new addition in the second half was Finnish-listed KONE, a global leader in
the escalator and elevator industry. The company is seeing strong momentum in
its services and modernisation business, supported by digital and AI-enabled
predictive maintenance. With elevators and lifts difficult to replace once
installed, KONE benefits from a long runway of higher-margin service work as
the global installed base ages. The business is geographically diversified and
offers a 2.9% yield backed by strong cash generation - an attractive
proposition for a high-quality industrials business capable of generating
returns on invested capital of around 28%. Spanish‑listed Inditex was
another new purchase. Owner of brands such as Zara, Pull&Bear, Massimo
Dutti, Bershka and Stradivarius, Inditex remains one of the most consistent
operators in the global retail sector-a notoriously difficult industry. Its
hybrid sourcing model, with roughly half of garments made in Spain, Portugal,
Morocco and Turkey, enables rapid response to fashion trends and reduces
inventory risk. High‑volume basics are sourced from Asia, and the company
continues to lead in technologies for inventory optimisation, logistics and
customer experience. With net cash on its balance sheet and strong
free‑cash‑flow generation, Inditex supports a 2.4% dividend yield-modest
but up 37% over five years. By funding new positions through reductions in
lower‑yielding holdings such as TSMC and Broadcom, the portfolio benefits
from disciplined trimming of strong performers, the introduction of
high‑quality businesses, and a stronger income profile.
A further lower-yielding addition was US based home improvement retailer
Lowe's. Accessing US consumer exposure within an income‑oriented mandate can
be challenging, but we believe Lowe's is well positioned for meaningful
earnings growth as the home‑improvement cycle strengthens, supported by
easing mortgage rates and a rising stock of ageing US homes. The company has
been narrowing the margin gap with its main competitor, Home Depot, through
digital transformation, supply-chain optimisation and a focus on the "Pro
customer" segment, where margins tend to be more resilient. While Lowe's
higher exposure to DIY customers introduces some volatility, it also increases
sensitivity to improving housing turnover. Its US$1.325 billion acquisition
of Artisan Design Group provides a strategic foothold in the homebuilder
market - an area where it historically lacked scale. Aside from Verizon, the
portfolio has little direct exposure to the US consumer. Reducing Broadcom to
initiate a 1.7%‑yielding position in Lowe's improved diversification and
enhanced portfolio yield.
We introduced Veolia Environnement, the French multinational and global leader
in water, waste and energy management. Around 60% of its revenue comes from
Europe, with significant operations in the US and Australia. Veolia's
businesses sit at the intersection of major long‑term structural themes:
rising demand for water-scarcity solutions, expansion of circular‑economy
hazardous‑waste treatment, and growth in energy‑transition services such
as bioenergy and efficiency technologies. With contract renewal rates above
90%, we believe Veolia offers defensive characteristics and strong long-term
visibility.
Finally, in keeping with the strategy of the last few years, we continued to
reduce the fixed income exposure. While having the flexibility to use the
asset class to deliver the investment objective is useful, it can bring
additional complexity. In the first half, we sold Indonesian and Dominican
Republic government bonds, reallocating capital into Mercedes-Benz Group and
Intesa Sanpaolo, both offering higher yields. In the second half, we exited
Pemex bonds, the Mexican state-owned petroleum company, using proceeds for a
new holding in Grupo Financiero Banorte, one of Mexico's largest financial
institutions. This switch improved yield potential and offered attractive
prospects for capital appreciation, supported by Banorte's strong
profitability, capitalisation and asset quality.
These adjustments help maintain a distinctive, globally diversified portfolio
with strong income characteristics.
Summary of Investment Changes During the Year
Valuation Appreciation/ Valuation
31 December 2024 (depreciation) Transactions 31 December 2025
£'000 % £'000 £'000 £'000 %
Equities
UK 128,125 7.2 8,791 44,330 181,246 9.1
Europe ex UK 405,457 23.0 61,599 56,331 523,387 26.3
North America 565,927 32.1 74,686 (17,846) 622,767 31.2
Asia Pacific ex Japan 412,778 23.4 101,154 (54,126) 459,806 23.1
Latin America 142,483 8.1 25,187 (11,964) 155,706 7.8
1,654,770 93.8 271,417 16,725 1,942,912 97.5
Preference shares
UK 6,907 0.4 (236) (2,821) 3,850 0.2
6,907 0.4 (236) (2,821) 3,850 0.2
Bonds
Europe ex UK 1,703 0.1 (9) (1,694) - -
Asia Pacific ex Japan 43,237 2.4 (3,321) (27,467) 12,449 0.6
Latin America 43,342 2.5 2,697 (29,557) 16,482 0.8
Africa & Middle East 15,035 0.8 2,253 231 17,519 0.9
103,317 5.8 1,620 (58,487) 46,450 2.3
Total Investments 1,764,994 100.0 272,801 (44,583) 1,993,212 100.0
Outlook
We expect the challenging backdrop to persist, characterised by economic
uncertainty, elevated geopolitical tensions and conflicts. Market performance
broadened out towards the end of the year, particularly in the US. However,
the significant driver of expected earnings growth remains concentrated in US
mega-cap technology stocks, which increases vulnerability to sector-specific
shocks or a slowdown, should broader market participation fail to materialise.
Although trade-related concerns have eased somewhat, the situation in the
Middle East and tensions in regions such as Eastern Europe and between East
and West more broadly, continue to present meaningful risks.
The Federal Reserve has initiated rate cuts, but policymakers remain divided
on the appropriate path forward. Investors are watching closely for any signs
of pressure on the Fed's independence, particularly if inflation or labour
market tightness were to re-emerge. Historically, rate cuts in a
non-recessionary environment (as we are in today), have tended to be
constructive for equities, reducing borrowing costs and supporting growth and
cyclical sectors. However, the current environment is complicated by the risk
that markets interpret rate reductions as politically motivated, which could
blunt their impact and make monetary policy a less effective tool than in the
past. At the same time, many companies continue to hold strong cash positions
and manageable leverage, providing flexibility to navigate a slower growth
backdrop. Corporate earnings also remain resilient across many sectors,
reinforcing the value of maintaining a selective approach.
Artificial Intelligence continues to be the defining theme of the current
market cycle, driving extraordinary gains and reshaping corporate investment
priorities. While its long-term transformative potential is clear, the rally
remains highly concentrated, leaving investors to balance powerful structural
tailwinds against the risk of speculative excess. Valuations appear to be
supported by current growth expectations, but the pace of investment and
earnings expansion will inevitably slow at some point. We remain exposed to
the AI theme on your behalf, while remaining mindful of the scale of that
exposure following recent strong performance. If AI is to be as seismic and
transformative as many expect, history reminds us that no major technological
revolution has unfolded seamlessly or without periods of dislocation elsewhere
in the economy-or without interruptions in monetisation for the companies
involved.
It is natural to look back to the late stages of the 1999 Tech Bubble and draw
parallels around market concentration and elevated multiples, and to caution
against justifying valuations with the phrase "this time is different." Yet we
must also recognise that when markets become concentrated and expectations run
high, the margin for error narrows and gravity becomes a powerful force.
Selectivity will remain critical. Our focus will continue to be on quality,
diversification and disciplined risk management as markets navigate these
conflicting signals. While recent performance has been encouraging, the
broader backdrop is likely to remain noisy.
We will continue to concentrate on the factors we can control - challenging
portfolio holdings, scrutinising positioning, maintaining a long-term
perspective and using bouts of market weakness to strengthen alignment with
our investment objective. Our aim remains unchanged: to deliver attractive,
growing income alongside long-term capital growth, supporting shareholders'
wealth creation over time.
Martin Connaghan, Senior Investment Director Samantha Fitzpatrick, Senior Investment Director
Joined Aberdeen in 1998 and has been involved in the management of global Joined Aberdeen in 1998 and has been involved in the management of global
equity portfolios for over 20 years and directly involved with managing the equity portfolios for over 20 years and directly involved with managing the
Company since 2017 Company since 2019
abrdn Investments Limited
3 March 2026
The Manager's Investment Process
Core Investment Beliefs
As an active equity investor, the Investment Manager's approach to equity
investing is underpinned by three core investment beliefs:
- Fundamental research is the key to delivering insights that can be used to
exploit situations where the Investment Manager believes the market is not
correctly valuing a company and so identify the best investment opportunities.
Such market inefficiencies can arise from mispricing, information asymmetry or
behavioural biases amongst investors who often have very different investment
time horizons.
- By including constructive engagement and environmental, social and
governance (ESG) considerations at the heart of its company research, the
Investment Manager believes that risks can be mitigated, and returns for
clients enhanced, as companies with robust ESG practices tend to enjoy
long-term financial benefits.
- That disciplined, active investment with the aim of using stock specific
insights to build high conviction portfolios and provide access to the
Investment Manager's best investment ideas can deliver superior outcomes for
clients.
Idea Generation
The Company's portfolio managers are Martin Connaghan and Samantha
Fitzpatrick, who form part of Aberdeen's equity division. When searching for
investments for the Company's portfolio, the portfolio managers benefit from
insights and ideas from the Investment Manager's c.110-strong active equity
division, which is spread over 12 cities across the globe. Cross-asset class
and macro-economic insights are also gained from conversations held between
the portfolio managers and other teams such as Credit, Real Estate and the
Aberdeen Research Institute. Analyst recommendations on every stock under
coverage are quantitively measured, recognising that company insights are a
critical component of alpha generation in portfolios over time.
The Investment Manager's reputation as a responsible long-term investor means
the investment management team has first-rate access to the companies under
research. Through structured meetings and regular conversations, the
Investment Manager gathers insights from both executive management teams and
non-executive directors.
Research
The Investment Manager has developed a proprietary research platform used by
all its equity, credit and ESG teams, giving instant access to research
globally. The research is focused on four key areas:
Foundations - the Investment Manager analyses how a company makes money, the
attractiveness and characteristics of its industry, and the strength and
sustainability of the economic competitive advantage or 'moat'. This includes
a thorough evaluation of the company's ESG risks and opportunities.
Face-to-face meetings help confirm the Investment Manager's understanding and
challenge the key elements of a company's fundamentals including:
- The evolution and growth of the business.
- The sustainable competitive advantage.
- Management's track record of execution and managing risk.
- The balance sheet and financials.
- ESG risks and opportunities.
Dynamics - shorter and longer-term business dynamics are one of the critical
determinants of a company's corporate value over time. In addition, the
Investment Manager looks for changes in the factors driving the market price
of a stock, identifying the drivers that the broader market may not be pricing
in. Understanding the dynamics behind these drivers allows the Investment
Manager to focus on the factors that will drive shareholder returns from a
particular stock.
Financials and Valuation - the Investment Manager examines the strengths and
weaknesses of a company's financials, including a detailed analysis of the
balance sheet, cash flow and accounting practices, the market's perception of
the company's future prospects and value, and its own forecasts of future
financials and how the stock should be priced. This includes significant focus
on the dividend paying capability of each business and the potential for
dividend growth.
Investment Insight and Risk - the Investment Manager articulates its
investment thesis, explaining how it views a stock differently from the market
consensus and how it expects to crystallise value from the holding over time,
while also flagging any key risks.
Peer Review
Having a common investment language internally facilitates effective
communication and comparison of investment ideas through peer review which is
a critical part of the investment process. All investment ideas are subject to
rigorous peer review, both at regular meetings and on an ad-hoc basis.
Martin Connaghan and Samantha Fitzpatrick form part of a dedicated equity
income group consisting of senior team members with clear accountability for
various income strategies. This group debates stock holdings, portfolio
structure and risk profiles.
Portfolio Construction/Risk Controls
The Company's portfolio is built from the bottom up by Martin Connaghan and
Samantha Fitzpatrick, who prioritise high conviction stock ideas, once they
have been debated, in a risk aware framework. The portfolio risk tolerance is
derived from the Company's investment objective and required outcomes.
As an active equity investor, the Investment Manager has adopted a disciplined
portfolio construction process which takes appropriate and intentional risk to
drive returns. Risk systems monitor and analyse risk exposures across multiple
perspectives breaking down the risk within the portfolio by industry and
country factors, by currency and macro factors, and by other fundamental
factors (quality, momentum, etc). Consideration of risk starts at the stock
level with rigorous company research helping the management team to avoid
stock specific errors. Martin Connaghan and Samantha Fitzpatrick ensure that
any sector or country risk is appropriately sized and managed relative to the
overall objectives of Company. Portfolios built by the Investment Manager's
management teams are formally reviewed on a regular basis with the Investment
Manager's Global Head of Equities and its Investment Governance and Risk
teams. This oversight monitors portfolio risk and oversees operational risk to
ensure client objectives are met.
Integrated ESG and Climate Change Analysis
Whilst ESG factors are not the overriding criteria in relation to the
investment decisions taken by the management team for the Company, significant
attention is given to ESG and climate related factors throughout the
investment process. By embedding ESG analysis into the active equity
investment process, the Investment Manager aims to enhance potential value for
shareholders, reducing risk and investing in companies that can contribute
positively to the world. In the Investment Manager's view, companies that
successfully manage climate change risks will perform better in the long term.
It is important that the Investment Manager assesses the financial
implications of material climate change risks across all asset classes,
including real assets, to make portfolios more resilient to climate risk.
Further details of the Manager's embedded ESG process are contained on pages
121 and 122 of the published Annual Report and financial statements for the
year ended 31 December 2025.
abrdn Investments Limited
3 March 2026
Key Performance Indicators (KPIs)
The Board uses a number of financial and operating performance measures to
assess the Company's success in achieving its investment objective and to
determine the progress of the Company in pursuing its investment policy. The
Board has identified the Company's main KPIs (refer to Glossary on pages 127
to 129 of the published Annual Report and financial statements for the year
ended 31 December 2025 for definitions) which it considers at each Board
meeting. These KPIs are as follows:
KPI Description
Dividend Absolute Growth: The Board's aim is to seek to increase the Company's revenues
over time in order to maintain an above average dividend yield. The Board
measures average yield against the rate of RPI and against other investment
options including the average of the Peer Group (the AIC Global Equity Income
sector excluding market capitalisations below £100m). Dividends paid over the
past 10 years are set out on page 37 of the published Annual Report and
financial statements for the year ended 31 December 2025 together with a chart
showing the Peer Group and Benchmark long-term yields. There is also a graph
showing dividend growth compared to inflation on page 36 of the published
Annual Report and financial statements for the year ended 31 December 2025.
Relative Yield: The Board also monitors the yield level against the Benchmark
Index, the rate of RPI and other investment trusts' yields within the
Company's Peer Group over a range of time periods, taking into consideration
the differing investment policies and objectives employed by those companies.
NAV Performance Absolute Performance: The Board considers the Company's NAV total return
figures to be the best indicators of performance over time, and these are the
main indicators of performance used by the Board.
Relative Performance: The Board also measures NAV total return performance
against the Benchmark.
A graph showing the NAV and Benchmark total returns is shown on page 36 of the
published Annual Report and financial statements for the year ended 31
December 2025.
Share Price Performance Absolute Performance: The Board monitors the share price absolute return over
time.
Relative Performance: The Board also monitors the price at which the Company's
shares trade relative to the Benchmark on a total return basis over time and a
graph showing absolute and relative share price performance is shown on page
36 of the published Annual Report and financial statements for the year ended
31 December 2025. In addition, there is further commentary on the performance
in the Chair's Statement and Investment Manager's Review.
Share Price Discount/Premium to NAV The discount/premium relative to the NAV per share represented by the share
price is closely monitored by the Board. The objective is to avoid large
fluctuations in the discount/premium by the use of share buybacks and the
issuance of new shares or the sale of Treasury shares, subject to market
conditions. A graph showing the share price premium/(discount) relative to
the NAV and investment trust sector (excluding VCTs) is shown on page 36 of
the published Annual Report and financial statements for the year ended 31
December 2025.
Gearing The Board's aim is to ensure that gearing as a percentage of NAV
(shareholders' funds) is kept within the Board's guidelines issued to the
Manager as disclosed on page 38 of the published Annual Report and financial
statements for the year ended 31 December 2025.
Ongoing Charges Ratio (OCR) Absolute Performance: The Board monitors the level and longer-term trend of
the Company's OCR in absolute terms.
Relative Performance: The Board also monitors the level and relative trend of
the OCR versus the Company's Peer Group, taking into consideration the
differing investment policies and objectives employed by those companies.
A key element of the OCR is the management fee which is reviewed regularly to
ensure that it remains competitive against the Peer Group. Details of the
annual OCR trend are disclosed on page 35 of the published Annual Report and
financial statements for the year ended 31 December 2025 and there is a chart
showing published OCR data for the Peer Group on page 37 of the published
Annual Report and financial statements for the year ended 31 December 2025.
Performance Track Record
Total Return
% Return 1 year 3 year 5 year 10 year
Share price(AB) +36.0 +43.7 +85.8 +219.3
Net asset value per Ordinary share(A) +21.9 +43.1 +77.7 +199.7
UK RPI +4.2 +13.3 +38.3 +56.8
Benchmark(C) +12.6 +56.1 +73.7 +241.7
(A) Considered to be an Alternative Performance Measure (see page 119 of the
published Annual Report and financial statements for the year ended 31
December 2025 for more details).
(B) Mid to mid.
(C) From 1 July 2025 the MSCI ACWI High Dividend Yield Index was adopted as
the Company's Benchmark Index. Longer term performance is measured against a
blend of the Benchmark Index combined with the former composite benchmark (40%
of the FTSE World UK Index and 60% of the FTSE World ex-UK Index) for periods
up to 27 April 2020 and the former reference index (FTSE All World TR Index)
between 28 April 2020 and 30 June 2025.
Source: Aberdeen Group plc, Morningstar & Lipper
Ten Year Financial Record
Year end (A) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total revenue (£'000) 77,333 79,471 77,105 82,417 68,918 78,737 88,745 88,833 84,216 95,942
Per Ordinary share (p):
Net asset value 227.1 250.3 221.6 238.0 227.6 248.1 258.7 268.8 278.4 325.4
Share price 237.6 253.6 226.4 252.0 226.0 231.2 266.8 258.0 257.5 335.0
Net revenue return(B) 10.2 10.4 9.9 10.8 9.3 10.3 12.0 12.1 11.6 13.9
Dividends(C) 9.5 10.0 10.3 10.7 10.9 11.0 11.2 11.5 11.8 12.4
Dividend cover 1.08x 1.04x 0.96x 1.01x 0.86x 0.94x 1.07x 1.05x 0.98x 1.12x
Revenue reserves (£'000) 70,963 75,252 73,563 75,747 66,764 62,967 69,239 75,132 74,182 85,398
Shareholders' funds (£'bn) 1.448 1.599 1.42 1.539 1.462 1.561 1.617 1.669 1.679 1.921
Ongoing charges ratio(%)(D) 0.68 0.64 0.69 0.65 0.68 0.59 0.52 0.53 0.52 0.50
(A) Figures for 2016-2022 have been restated to reflect the 5:1 sub-division
on 24 April 2023.
(B) Net revenue return per Ordinary share has been based on the average
Ordinary share capital during each year (see note 9 o).
(C) The figure for dividends per share reflects the years to which their
declaration relates and not the years they were paid.
(D) Considered to be an Alternative Performance Measure as defined on page 118
of the published Annual Report and financial statements for the year ended 31
December 2025.
Investment Objective and Investment Policy
Investment trusts, such as the Company, are long-term investment vehicles.
Typically, investment trusts are externally managed, have no employees, and
are overseen by an independent non-executive board of directors. Your
Company's Board of Directors sets the investment mandate, monitors the
performance of all service providers (including the Manager) and is
responsible for reviewing strategy on a regular basis. All of this is done
with the aim of preserving and enhancing shareholder value over the longer
term.
New Benchmark Index
As reported at the Half Year, the Board reviewed the appropriateness of using
the FTSE All-World Index as the Company's "Reference Index". As a result of
this review, the Board concluded that it would be more helpful for
shareholders if the index against which the portfolio's performance is
measured was more reflective of the Company's investment style. The Board
therefore determined that with effect from 1 July 2025, the previous reference
index should be changed and the MSCI ACWI High Dividend Yield Index adopted in
its place as the Company's Benchmark Index from that date
Longer term performance is measured against a blend of the Benchmark Index
combined with the former composite benchmark (40% of the FTSE World UK Index
and 60% of the FTSE World ex-UK Index) for periods up to 27 April 2020 and the
former reference index (FTSE All World TR Index) between 28 April 2020 and 30
June 2025.
Investment Objective
The aim of the Company is to achieve an above average dividend yield, with
long-term growth in dividends and capital ahead of inflation, by investing
principally in global equities.
Investment Policy
There are a number of elements set out in the investment policy delegated to
the Manager which are set out below:
Asset Allocation
The Company's assets are currently invested in a diversified portfolio of
international equities and fixed income securities spread across a range of
industries and economies. The Company's investment policy is flexible and it
may, from time to time, hold other securities including (but not limited to)
index-linked securities, convertible securities, preference shares, unlisted
securities, depositary receipts and other equity-related securities. The
Company may invest in derivatives for the purposes of efficient portfolio
management in the furtherance of its investment objective.
The Company's investment policy does not impose any geographical, sectoral or
industrial constraints upon the Manager. The Board has set guidelines which
the Manager is required to work within. It is the investment policy of the
Company to invest no more than 15% of its gross assets in other listed
investment companies (including listed investment trusts), at the time of
purchase. The Company currently does not have any investments in other
investment companies. The Manager is authorised to enter into stocklending
contracts and the Company undertakes limited stocklending activity.
Risk Diversification
The Manager actively monitors the Company's portfolio and attempts to mitigate
risk primarily through diversification. The Company is permitted to invest up
to 15% of its investments by value in any single holding (at the time of
purchase) although, typically, individual investments do not exceed 5% of the
total portfolio.
Gearing
The Board considers that returns to shareholders can be enhanced by the
judicious use of borrowing. The Board is responsible for the level of gearing
in the Company and reviews the position on a regular basis. Any borrowing,
except for short-term liquidity purposes, is used for investment purposes or
to fund the purchase of the Company's own shares.
Total gearing will not in normal circumstances exceed 30% of net assets with
cash deposits netted against the level of borrowings. At the year end, there
was net gearing of 4.4% (calculated in accordance with Association of
Investment Companies guidance). Particular care is taken to ensure that any
bank covenants permit maximum flexibility in investment policy.
Changes to Investment Policy
Any material change to the investment policy will require the approval of the
shareholders by way of an ordinary resolution at a general meeting.
Ten Largest Investments
As at 31 December 2025
Philip Morris International Grupo Asur
Holding: 3.3% Holding: 3.1%
Philip Morris International is one of the world's leading global tobacco Grupo ASUR, operates airports in Mexico, and other Central and Latin American
companies. It manufactures and sells leading recognisable brands such as countries. The company holds long-term concessions to manage airports in
Marlboro, Parliament and Virginia Slims. Smoke-free products now account for leading tourist resorts and major cities.
c.40% of sales and include heat-not-burn, vapour and oral nicotine products.
AbbVie CME Group
Holding: 3.0% Holding: 3.0%
AbbVie is a global pharmaceutical company, producing a broad range of drugs CME Group is the world's leading derivatives marketplace, operating major
for use in speciality therapeutic areas such as immunology, chronic kidney exchanges including the Chicago Mercantile Exchange, Chicago Board of Trade
disease, oncology and neuroscience. and the New York Mercantile Exchange. It offers futures and options across
interest rates, equity indices, foreign exchange and commodities.
DBS Merck & Co
Holding: 2.9% Holding: 2.7%
DBS Group is a Singapore-based financial services group and one of Asia's Merck & Co is a global pharmaceutical company. The company develops
largest banks. It operates across a wide global network with a strong focus on prescription medicines, vaccines, biologic therapies and animal health
Asia and major international finance centres. products. Key therapeutic strengths include oncology, vaccines, infectious
diseases and immunology.
Cisco Systems Johnson & Johnson
Holding: 2.7% Holding: 2.6%
Cisco Systems is a technology company specialising in networking equipment, Johnson & Johnson is a global healthcare company operating across
cybersecurity solutions, collaboration tools, and cloud infrastructure. Its Innovative Medicine and MedTech. Its pharmaceutical division focuses on
portfolio includes switching and routing hardware, security platforms, oncology, immunology, neuroscience, cardiopulmonary and other high need
wireless networking, and the Webex collaboration suite. Cisco serves therapeutic areas. Its MedTech division provides medical devices for surgery,
enterprises, governments, and service providers worldwide. orthopaedics, cardiovascular care and vision.
Zurich Insurance Singapore Telecommunications
Holding: 2.6% Holding: 2.6%
Zurich Insurance Group offers a wide range of insurance products and services, Singtel is Asia's leading communications technology group. It provides mobile,
including general insurance, life insurance, and asset management services. It broadband, fixed line, digital TV and ICT (information and communication
serves individuals, as well as large and small businesses, in over 200 technology) services across Singapore, Australia and other regional markets.
countries worldwide. It also delivers enterprise ICT, cybersecurity and digital services across 20+
countries.
List of Investments
Valuation Total Valuation
2025 assets(A) 2024(B)
Company Country £'000 % £'000
Philip Morris International US 66,794 3.3 67,244
Grupo Asur Mexico 62,025 3.1 53,274
AbbVie US 61,497 3.0 51,389
CME Group US 60,908 3.0 55,628
DBS Singapore 58,649 2.9 -
Merck & Co US 54,785 2.7 35,748
Cisco Systems US 54,126 2.7 44,647
Johnson & Johnson US 53,851 2.6 33,836
Zurich Insurance Switzerland 53,652 2.6 47,454
Singapore Telecommunications Singapore 52,609 2.6 36,054
Top ten investments 578,896 28.5
Taiwan Semiconductor Manufacturing Taiwan 51,181 2.5 73,309
TotalEnergies France 48,531 2.4 44,109
Coca-Cola US 46,785 2.3 25,610
Enbridge Canada 46,574 2.3 50,758
British American Tobacco UK 46,310 2.3 31,669
Samsung Electronics Korea 45,454 2.2 29,696
Enel Italy 45,153 2.2 33,187
Hong Kong Exchanges Hong Kong 43,973 2.2 34,242
Mercedes-Benz Germany 42,108 2.1 26,585
Hon Hai Precision Industry Taiwan 39,728 1.9 32,714
Top twenty investments 1,034,693 50.9
Verizon Communications US 38,779 1.9 40,902
Unilever(C) UK & Netherlands 38,021 1.9 36,302
Tryg Denmark 38,002 1.9 32,776
Medtronic US 37,863 1.9 17,542
Bristol-Myers Squibb US 36,099 1.8 29,370
Broadcom Corporation US 36,013 1.8 72,177
Sanofi France 34,670 1.7 27,016
Intesa Sanpaolo Italy 33,605 1.7 -
Danone France 33,521 1.6 26,763
Shell UK 33,422 1.6 33,674
Top thirty investments 1,394,688 68.7
BHP Group Australia 31,626 1.6 27,328
Infosys India 31,392 1.5 -
Ping An Insurance China 31,115 1.5 23,667
Telenor Norway 30,276 1.5 17,174
SCB X Thailand 29,522 1.5 24,660
Siemens Germany 29,216 1.4 39,020
Diageo UK 28,863 1.4 25,370
Walmart de Mexico Mexico 28,724 1.4 26,132
Pernod-Ricard France 28,715 1.4 28,799
Lowe's Companies US 28,693 1.4 -
Top forty investments 1,692,830 83.3
KONE Finland 26,492 1.3 -
Industria de Diseno Textil Spain 26,073 1.3 -
Vale do Rio Doce Brazil 25,773 1.3 18,857
Taylor Wimpey UK 25,585 1.3 18,315
Rio Tinto UK 25,470 1.2 -
Telkom Indonesia Indonesia 24,825 1.2 16,133
Telefonica Brasil Brazil 20,033 1.0 13,685
Woodside Energy Australia 19,732 1.0 17,012
Veolia Environnement France 19,450 1.0 -
Grupo Financiero Banorte Mexico 19,151 0.9 -
Top fifty investments 1,925,414 94.8
Republic of South Africa 7% 28/02/31(D) South Africa 17,519 0.9 15,035
BE Semiconductor Netherlands 17,498 0.8 49,223
United Mexican States 5.75% 05/03/26(D) Mexico 16,482 0.8 14,653
HDFC Bank 7.95% 21/09/26(D) India 6,234 0.3 6,983
Power Finance Corp 7.63% 14/08/26(D) India 6,215 0.3 6,973
Santander 10.375% Non Cum Pref(D) UK 3,850 0.2 3,547
Total investments 1,993,212 98.1
Net current assets(A) 37,688 1.9
Total assets(E) 2,030,900 100.0
(A) Excluding bank loan.
(B) The 2024 column denotes the Company's holding at 31 December 2024.
(C) The 2025 holding comprises UK and Netherlands securities, split
£21,596,000 (2024 - £19,097,000) and £16,425,000 (2024 - £17,205,000)
respectively.
(D) Quoted preference share or bond.
(E) See definition on page 129 of the published Annual Report and financial
statements for the year ended 31 December 2025.
Summary of Net Assets
Valuation Valuation
31 December 2025 31 December 2024
£'000 % £'000 %
Equities 1,942,912 101.1 1,654,770 98.6
Preference shares 3,850 0.2 6,907 0.4
Bonds 46,450 2.4 103,317 6.1
Total investments 1,993,212 103.7 1,764,994 105.1
Net current assets(A) 37,688 2.0 23,771 1.4
Total assets(B) 2,030,900 105.7 1,788,765 106.5
Borrowings(C) (109,926) (5.7) (109,916) (6.5)
Net assets 1,920,974 100.0 1,678,849 100.0
(A) Excluding bank loan.
(B) See definition on page 129 of the published Annual Report and financial
statements for the year ended 31 December 2025.
(C) See note 13 on page 102 of the published Annual Report and financial
statements for the year ended 31 December 2025.
Directors' Report
The Directors present their report and the audited financial statements for
the year ended 31 December 2025.
Results and Dividends
Details of the Company's results and proposed dividend are shown on pages 6
and 7 of the published Annual Report and financial statements for the year
ended 31 December 2025.
Investment Trust Status
The Company is registered as a public limited company (registered in Scotland
No. SC006705) and has been accepted by HM Revenue & Customs as an
investment trust subject to the Company continuing to meet the relevant
eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the
ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for
all financial years commencing on or after 1 January 2012. The Directors are
of the opinion that the Company has conducted its affairs for the year ended
31 December 2025 so as to enable it to comply with the ongoing requirements
for investment trust status.
The Role of the Chair and Senior Independent Director
The Chair of the Company is responsible for providing effective leadership to
the Board, by setting the tone of the Company, demonstrating objective
judgement and promoting an embedded culture of openness and debate. The Chair
facilitates the effective contribution, and encourages active engagement, by
each Director. In conjunction with the Company Secretary, the Chair ensures
that Directors receive accurate, timely and clear information to assist them
with effective decision-making. The Chair leads the review of the performance
of the Board and individual Directors and acts upon the results of the review
process by recognising strengths and addressing any weaknesses. The Chair also
engages with major shareholders and ensures that all Directors understand
shareholder views.
The Senior Independent Director acts as a sounding board for the Chair and
acts as an intermediary for other Directors, when necessary. Working closely
with the Nomination Committee, the Senior Independent Director takes
responsibility for an orderly succession process for the Chair and leads the
annual appraisal of the Chair's performance. The Senior Independent Director
is also available to shareholders to discuss any concerns they may have.
Following the retirement of Mrs Mackesy on 24 April 2025, Ms Colquhoun was
appointed Senior Independent Director.
Management of Conflicts of Interest
No Director has a service contract with the Company although Directors are
issued with letters of appointment. The Directors' interests in contractual
arrangements with the Company are as shown in note 21 to the financial
statements and the Directors' Remuneration Report. No Directors had any other
interest in contracts with the Company during the period or subsequently.
The Board has a procedure in place to deal with a situation where a Director
has a conflict of interest, as required by the Companies Act 2006. As part of
this process, the Directors are required to disclose other positions held and
all other conflict situations that may need to be authorised either in
relation to the Director concerned or his or her connected persons. The Board
considers each Director's situation and decides whether to approve any
conflict, taking into consideration what is in the best interests of the
Company and whether the Director's ability to act in accordance with their
wider duties is affected. Each Director is required to notify the Company
Secretary of any potential or actual conflict situations that will need
authorising by the Board. Authorisations given by the Board are reviewed at
each Board meeting. All proposed significant external appointments are also
required to be approved, in advance, by the Chair and then communicated to
other Directors for information.
The Company has a policy of conducting its business in an honest and ethical
manner. The Company takes a zero-tolerance approach to bribery and corruption
and has procedures in place that are proportionate to the Company's
circumstances to prevent them. The Manager also adopts a group-wide zero
tolerance approach and has its own detailed policy and procedures in place to
prevent bribery and corruption. Copies of the Manager's anti-bribery and
corruption policies are available on
its website.
In relation to the corporate offence of failing to prevent tax evasion, it is
the Company's policy to conduct all business in an honest and ethical manner.
The Company takes a zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign country and is committed
to acting professionally, fairly and with integrity in all its business
dealings
and relationships.
Corporate Governance
The Corporate Governance Statement forms part of the Directors' Report. The
Company is committed to high standards of corporate governance. The Board is
accountable to the Company's shareholders for good governance, and this
statement describes how the Company has applied the principles identified in
the UK Corporate Governance Code as published in January 2024 (the "UK Code"),
which is available on the Financial Reporting Council's (the "FRC") website:
frc.org.uk.
The Board has also considered the principles and provisions of the AIC Code of
Corporate Governance as published in August 2024 (the "AIC Code"). It
includes an explanation of how the AIC Code adapts the Principles and
Provisions set out in the UK Corporate Governance Code (the UK Code) to make
them relevant for investment companies. The AIC Code is available on the AIC's
website: theaic.co.uk.
The Board considers that reporting against the principles and provisions of
the AIC Code, which has been endorsed by the Financial Reporting Council,
provides more relevant information to shareholders.
The Board confirms that, during the year, the Company complied with the
principles and provisions of the AIC Code and the relevant provisions of the
UK Code, except as set out overleaf.
The UK Code includes provisions relating to:
- interaction with the workforce (provisions 2, 5 and 6);
- the role and responsibility of the chief executive (provisions 9 and 14);
- previous experience of the chair of a remuneration committee (provision
32); and
- executive directors' remuneration (provisions 33 and 36 to 40).
The Board considers that these provisions are not relevant to the position of
the Company, being an externally managed investment company. In particular,
all of the Company's day-to-day management and administrative functions are
outsourced to third parties. As a result, the Company has no executive
directors, employees or internal operations. The Company has therefore not
reported further in respect of these provisions.
The full text of the Company's Corporate Governance Statement can be found on
the Company's website, murray-intl.co.uk. The Board is cognisant of the
updated provisions in the UK Code (provision 29) and the AIC Code (provision
34), which are effective for accounting periods beginning on or after 1
January 2026. These provisions relate to the reporting on the Board's
monitoring and review of the Company's internal control framework and a
declaration by the Board of the effectiveness of the material controls at the
balance sheet date. It is the Board's intention that the Company will comply
with these updated provisions and include the required disclosures in the
Annual Report for the year ending 31 December 2026.
The table below details Directors' attendance at scheduled Board and Committee
meetings held during the year ended 31 December 2025 (with eligibility to
attend the relevant meeting in brackets). In addition, there were a number of
other ad hoc Board meetings held during the year.
Scheduled Audit Nom. MEC Rem.
Board & Risk Com Com Com
V. Holmes (A) 6 (6) 3 (3) 1 (1) 1 (1) 1 (1)
C. Binyon 6 (6) 3 (3) 1 (1) 1 (1) 1 (1)
W. Colquhoun 6 (6) 3 (3) 0 (1) 1 (1) 1 (1)
G. Eckersley 6 (6) 3 (3) 1 (1) 1 (1) 1 (1)
J. Huysinga (B) 4 (4) 2 (2) 0 (0) 0 (0) 1 (1)
A. Mackesy (C) 2 (2) 1 (1) 1 (1) 1 (1) 0 (0)
N. Melhuish 6 (6) 3 (3) 1 (1) 1 (1) 1 (1)
(A) Ms Holmes attended Audit and Risk Committee meetings during the year by
invitation
(B) Mr Huysinga was appointed to the Board on 1 May 2025
(C) Mrs Mackesy retired from the Board on 24 April 2025
Board Committees
Terms of Reference
The terms of reference of all the Board Committees may be found on the
Company's website murray-intl.co.uk and copies are available from the Company
Secretary upon request. The terms of reference are reviewed and re-assessed by
the Board for their adequacy on an annual basis.
Audit and Risk Committee
The Report of the Audit and Risk Committee is on pages 73 and 74 of the
published Annual Report and financial statements for the year ended 31
December 2025.
Management Engagement Committee ("MEC")
The MEC comprises all of the Directors and is chaired by Ms Colquhoun. The
Committee reviews the performance of the Manager and its compliance with the
terms of the management and secretarial agreement. The terms and conditions of
the Manager's appointment, including an evaluation of fees, are reviewed by
the Committee on an annual basis. The Committee believes that the continuing
appointment of the Manager on the terms that have been agreed is in the
interests of shareholders as a whole. The Committee is also responsible for
the oversight and annual review of all other key service provider
relationships.
Nomination Committee
All appointments to the Board of Directors are considered by the Nomination
Committee which comprises the entire Board and is chaired by Ms Holmes. The
Board's overriding priority in appointing new Directors to the Board is to
identify the candidate with the best range of skills and experience to
complement existing Directors. Given the global investment remit of the
Company, the Board also recognises the benefits of diversity and its policy on
diversity is referred to in the Strategic Report on page 40 of the published
Annual Report and financial statements for the year ended 31 December 2025.
When Board positions become available as a result of retirement or
resignation, the Company ensures that a diverse group of candidates is
considered.
The Board's policy on tenure is that continuity and experience are considered
to add significantly to the strength of the Board. The Board also takes the
view that independence is not necessarily compromised by length of tenure on
the Board. However, in compliance with the provisions of the AIC Code, it is
expected that Directors will serve in accordance with the time limits laid
down by the AIC Code. It is the policy of the Board that the Chair of the
Company should retire once he or she has served as a Director for nine years
in line with current best practice of the Financial Reporting Council.
However, there could be circumstances where it might be appropriate to ask a
Chair or another Director to stay on for a limited period and in this case the
reasons for the extension would be fully explained to shareholders and a
timetable for the departure of the relevant individual clearly set out.
As part of the succession planning in advance of Mrs Mackesy's scheduled
retirement as a Director in April 2025, the Board conducted a search for a new
independent non-executive Director using the services of an independent
external recruitment consultant that has no other connections or conflicts
with the Company. This process culminated in the appointment of Mr Huysinga
as a Director of the Company with effect from 1 May 2025.
The Committee has put in place the necessary procedures to conduct, on an
annual basis, an appraisal of the Chair of the Board, Directors' individual
self-evaluation and a performance evaluation of the Board as a whole. An
external evaluation has been undertaken in respect of the year ended 31
December 2025 using the services of an independent evaluation consultant.
The detailed findings were then considered by the Board and the Chair
discussed the responses individually with each Director and the Senior
Independent Director provided appraisal feedback to the Chair.
In accordance with Provision 23 of the AIC's Code of Corporate Governance
which recommends that all directors of investment companies should be subject
to annual re-election by shareholders, all the members of the Board will
retire at the forthcoming Annual General Meeting and, with the exception of Mr
Huysinga who offers himself for election, having been appointed to the Board
during the year, each Director will offer themselves for re-election. The
Committee has reviewed each of the proposed reappointments and concluded that
each of the Directors has the requisite high level and range of business and
financial experience and recommends their re-election at the forthcoming
AGM. Details of the contributions provided by each Director during the year
are disclosed on pages 58 to 60 of the published Annual Report and financial
statements for the year ended 31 December 2025.
Remuneration Committee
The level of fees payable to Directors is considered by the Remuneration
Committee which comprises the entire Board excluding the Chair who attends by
invitation, and which is chaired by Mr Melhuish.
The Company's remuneration policy is to set remuneration at a level to attract
individuals of a calibre appropriate to the Company's future development.
Further information on remuneration is disclosed in the Directors'
Remuneration Report on pages 69 to 72 of the published Annual Report and
financial statements for the year ended 31 December 2025.
Going Concern
The Directors have undertaken a robust review of the Company's viability
including scenario and sensitivity analysis (refer to statement on page 48 of
the published Annual Report and financial statements for the year ended 31
December 2025) and ability to continue as a going concern and consider that
there are no material uncertainties. The Company's assets consist of a diverse
portfolio of listed equity shares and bonds. The equities and a majority of
the bond portfolio are, in most circumstances, realisable within a very short
timescale and the Company itself has a strong balance sheet with considerable
levels of distributable reserves.
The Directors are mindful of the principal and emerging risks and
uncertainties disclosed on pages 45 to 47 of the published Annual Report and
financial statements for the year ended 31 December 2025 and have reviewed
forecasts detailing revenue and liabilities. The Directors believe that the
Company has adequate financial resources to continue its operational existence
for 12 months from the date of this Annual Report. Accordingly, the Directors
continue to adopt the going concern basis in preparing these financial
statements.
Accountability and Audit
Each Director confirms that, so far as he or she is aware, there is no
relevant audit information of which the Company's auditor is unaware, and he
or she has taken all the steps that they ought to have taken as a Director in
order to make themselves aware of any relevant audit information and to
establish that the Company's auditor is aware of that information.
Independent Auditor
BDO LLP was appointed independent auditor to the Company with effect from the
AGM on 27 April 2020. BDO LLP has expressed its willingness to continue to be
the Company's independent auditor and a Resolution to re-appoint BDO LLP as
the Company's auditor will be put to the forthcoming AGM, along with a
separate Resolution to authorise the Directors to fix the auditor's
remuneration.
Internal Controls and Risk Management
Details of the financial risk management policies and objectives relative to
the use of financial instruments by the Company including information on
exposure to price risk, credit risk, liquidity risk and cash flow risk are set
out in note 18 to the financial statements. The Board of Directors is
ultimately responsible for the Company's system of internal control and for
reviewing its effectiveness. Following the Financial Reporting Council's
publication of "Guidance on Risk Management, Internal Controls and Related
Financial and Business Reporting" (the "FRC Guidance"), the Directors confirm
that there is an ongoing process for identifying, evaluating and managing the
significant risks faced by the Company. This process has been in place for the
full year under review and up to the date of approval of the financial
statements, and this process is regularly reviewed by the Board and accords
with the relevant sections of the FRC Guidance.
The Board has reviewed the effectiveness of the system of internal control
and, in particular, it has reviewed the process for identifying and evaluating
the significant risks faced by the Company and the policies and procedures by
which these risks are managed.
The Directors have delegated the investment management of the Company's assets
to aFML within overall guidelines and this embraces implementation of the
system of internal control, including financial, operational and compliance
controls and risk management. Internal control systems are monitored and
supported by aFML's internal audit function which undertakes periodic
examination of business processes, including compliance with the terms of the
management agreement, and ensures that recommendations to improve controls are
implemented.
Risks are identified and documented through a risk management framework by
each function within the Manager's activities. Risk is considered in the
context of the FRC Guidance and includes financial, regulatory, market,
operational and reputational risk. This helps the Manager's internal audit
risk assessment model to identify those functions for review. Any relevant
weaknesses identified through internal audit's review are reported to the
Board and timetables are agreed for implementing improvements to systems,
processes and controls. The implementation of any remedial action required is
monitored and feedback provided to the Board.
The key components designed to provide effective internal control for the year
under review and up to the date of this Report are outlined below:
- the Manager prepares forecasts and management accounts which allow the
Board to assess the Company's activities and review its investment
performance;
- the Board and Manager have agreed clearly defined investment criteria;
- there are specified levels of authority and exposure limits. Reports on
these issues, including performance statistics and investment valuations, are
regularly submitted to the Board. The Manager's investment process and
financial analysis of the companies concerned include detailed appraisal and
due diligence;
- as a matter of course, the internal audit and compliance departments of
aFML continually review the Manager's operations;
- written agreements are in place which specifically define the roles and
responsibilities of the Manager and other third-party service providers and
monitoring reports are received from these providers when required;
- the Board has considered the need for an internal audit function but,
because of the compliance and internal control systems in place at the
Manager, has decided to place reliance on the Manager's systems and internal
audit procedures; and
- twice a year, at its Board meetings, the Board carries out an assessment
of the effectiveness of internal controls and risk management by considering
documentation from the Manager, including its internal audit and compliance
functions and taking account of events since the relevant period end.
In addition, the Manager operates a 'three lines of defence' model over its
activities with the Aberdeen business units responsible for adhering to
applicable rules and regulations; the compliance team is then responsible for
checking that the rules are being followed and then internal audit is
responsible for independently reviewing these arrangements.
The Manager ensures that clearly documented contractual arrangements exist in
respect of any activities that have been delegated to external professional
organisations. The Board meets annually with representatives from BNY Mellon
and reviews a control report covering the activities of the depositary and
custodian.
Representatives from the Internal Audit Department of the Manager report six
monthly to the Audit and Risk Committee of the Company and have direct access
to the Directors at any time.
The Board has reviewed the effectiveness of the Manager's system of internal
control including its annual internal controls report prepared in accordance
with the International Auditing and Assurance Standards Board's International
Standard on Assurances Engagements ("ISAE") 3402, "Assurance Reports on
Controls at a Service Organisation" for the period to 30 September 2025
together with bridging letter support to 31 December 2025. The Board has also
reviewed the Manager's process for identifying and evaluating the significant
risks faced by the Company and the policies and procedures by which these
risks are managed. The internal control systems are designed to meet the
Company's particular needs and the risks to which it is exposed. Accordingly,
the internal control systems are designed to manage rather than eliminate the
risk of failure to achieve business objectives and, by their nature, can
provide reasonable but not absolute assurance against material misstatement or
loss.
Future Developments
A detailed outlook for the Company including any likely future developments is
provided in the Chair's Statement on page 13 of the published Annual Report
and financial statements for the year ended 31 December 2025.
There have been no post balance sheet events to report.
Substantial Interests
The Board is aware of the following shareholders that owned 3% or more of the
issued Ordinary share capital of the Company at 31 December 2025:
Shareholder No. of Ordinary shares held % held
Interactive Investor (A) 100,442,015 17.0
Hargreaves Lansdown (A) 77,703,376 13.2
Rathbones 59,780,228 10.1
Charles Stanley 32,958,837 5.6
Evelyn Partners 31,009,944 5.3
AJ Bell 28,184,863 4.8
HSDL (A) 18,192,320 3.0
(A) Non-beneficial interest
There have been no significant changes notified in respect of the Substantial
Interests between 31 December 2025 and 3 March 2026.
The UK Stewardship Code and Proxy Voting
Responsibility for actively monitoring the activities of portfolio companies
has been delegated by the Board to the AIFM which has sub-delegated that
authority to the Manager.
The Manager is a tier 1 signatory of the UK Stewardship Code which aims to
enhance the quality of engagement by investors with investee companies in
order to improve their socially responsible performance and the long-term
investment return to shareholders.
Business of the Annual General Meeting
Issue of Shares
Pursuant to the Companies Act 2006 (the "Act"), the Directors may not allot
shares unless so authorised by the shareholders. Resolution 13 in the Notice
of Annual General Meeting which will be proposed as an Ordinary Resolution
will, if passed, give the Directors the necessary authority to allot Ordinary
shares up to an aggregate nominal amount of £2,958,919 (equivalent to
59,178,387 Ordinary shares of 5p or 10% of the Company's existing issued share
capital at 3 March 2026, the latest practicable date prior to the publication
of this Annual Report). Such authority will expire on the date of the 2027
Annual General Meeting or on 30 June 2027, whichever is earlier. The
Directors currently intend to seek renewal of this authority at the next
Annual General Meeting and at each subsequent Annual General Meeting.
When shares are to be allotted for cash, Section 561 of the Act provides that
existing shareholders have pre-emption rights and that the new shares must be
offered first to such shareholders in proportion to their existing holding of
Ordinary shares. However, shareholders can, by special resolution, disapply
these pre-emption rights and authorise the Directors to allot shares otherwise
than by a pro rata issue to existing shareholders. Accordingly, Special
Resolution 14 will, if passed, give the Directors power to allot equity
securities for cash up to an aggregate nominal amount of £2,958,919
(equivalent to 59,178,387 Ordinary shares of 5p or 10% of the Company's
existing issued share capital at 3 March 2026, the latest practicable date
prior to the publication of this Annual Report), as if Section 561 of the Act
does not apply. This is the same nominal amount of share capital which the
Directors are seeking authority to allot pursuant to Resolution 13. This
authority will also expire on the date of the 2027 Annual General Meeting or
on 30 June 2027, whichever is earlier. This authority will not be used in
connection with a rights issue by the Company.
The Directors intend to use the authority given by Resolutions 13 and 14 to
allot shares on a non-pre-emptive basis only in circumstances where this will
be clearly beneficial to shareholders as a whole. Accordingly, issues will
only be made where shares can be issued at a premium of 0.5% or more to NAV,
meaning that there should never be any NAV dilution for existing
shareholders. The issue proceeds will be available for investment in line
with the Company's investment policy. No issue of shares will be made which
would effectively alter the control of the Company without the prior approval
of shareholders in general meeting. Resolution 14 will also disapply
pre-emption rights on the sale of Ordinary shares from Treasury. Once again,
pre-emption rights would only be disapplied where the Treasury shares are sold
at a premium to NAV of not less than 0.5%.
Share Buybacks
At the Annual General Meeting held on 24 April 2025, shareholders approved the
renewal of the authority permitting the Company to make market purchases of
its Ordinary shares. This renewed authority will expire at the conclusion of
the upcoming Annual General Meeting. Accordingly, the Directors propose to
seek shareholder approval at the Annual General Meeting to renew this
authority for another year.
The principal aim of a share buyback facility is to enhance shareholder value
by acquiring shares at a discount to NAV, as and when the Directors consider
this to be appropriate. The purchase of shares, when they are trading at a
discount to NAV per share, should result in an increase in the NAV per share
for the remaining shareholders. This authority, if conferred, will only be
exercised if to do so would result in an increase in the NAV per share for the
remaining shareholders and if it is in the best interests of shareholders
generally. Any purchase of shares will be made within guidelines established
from time to time by the Board.
Under the FCA's Listing Rules, the maximum price that may be paid on the
exercise of this authority must not be more than the higher of (i) an amount
equal to 105% of the average of the middle market quotations for a share taken
from the London Stock Exchange Daily Official List for the five business days
immediately preceding the day on which the share is purchased; and (ii) the
higher of the last independent trade and the current highest independent bid
on the trading venue where the purchase is carried out. The minimum price
which may be paid is the nominal value of the share. It is currently proposed
that any purchase of shares by the Company will be made from the capital
reserve of the Company. The purchase price will normally be paid out of the
cash balances held by the Company from time to time.
Special Resolution 15 will permit the Company to buy back shares and any
shares bought back by the Company may be cancelled or held as Treasury shares.
The benefit of holding Treasury shares is that such shares may be resold. This
should give the Company greater flexibility in managing its share capital and
improve liquidity in its shares. The Company would only sell Treasury shares
at a premium to NAV. When shares are held in Treasury, all voting rights are
suspended and no distribution (either by way of dividend or by way of a
winding up) is permitted in respect of such Treasury shares. If the Directors
believe that there is no likelihood of re-selling shares that are bought back,
such shares would instead be cancelled. During the year to 31 December 2025
the Directors successfully used the share buyback authority to acquire
12,876,886 shares for Treasury.
Special Resolution 15 in the Notice of Annual General Meeting will renew the
authority to purchase in the market a maximum of 14.99% of shares in issue at
the date of the Annual General Meeting (amounting to 88,708,403 Ordinary
shares of 5p as at 3 March 2026). Such authority will expire on the date of
the 2027 Annual General Meeting or on 30 June 2027, whichever is earlier. This
means in effect that the authority will have to be renewed at the next Annual
General Meeting to allow the Directors to continue to buy back shares, or
earlier if the authority has been exhausted.
Recommendation
The Directors consider that all the resolutions to be proposed at the Annual
General Meeting are in the best interests of the shareholders taken as a whole
and recommend that all shareholders vote in favour of the resolutions, as the
Directors intend to in respect of their own beneficial holdings of Ordinary
shares amounting in aggregate to 72,487 shares, representing approximately
0.01% of the Company's issued share capital as at 3 March 2026.
By order of the Board of Murray International Trust PLC
abrdn Holdings Limited
Secretary
1 George Street, Edinburgh EH2 2LL
3 March 2026
Statement of Directors' Responsibilities
Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice, the requirements of the Companies Act 2006 and applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law)
including FRS 102 'The Financial Reporting Standard applicable in the UK and
Republic of Ireland'. Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or loss for the
Company for that period.
In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained in the financial
statements;
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business; and
- prepare a director's report, a strategic report and director's
remuneration report which comply with the requirements of the Companies Act
2006.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities. In accordance with their responsibilities, the
Directors confirm that, to the best of their knowledge, the Annual Report and
financial statements, taken as a whole, is fair, balanced, and understandable
and provides the information necessary for shareholders to assess the
position, performance, business model and strategy.
Website Publication
The Directors are responsible for ensuring the Annual Report and the financial
statements are made available on a website. Financial statements are
published on murray-intl.co.uk, the Company's website, in accordance with
legislation in the United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company's website is the
responsibility of the Directors. The Directors' responsibility also extends
to the ongoing integrity of the financial statements contained therein.
Directors' Responsibilities Pursuant to DTR4
The Directors confirm to the best of their knowledge:
- The financial statements have been prepared in accordance with the
applicable accounting standards and give a true and fair view of the assets,
liabilities, financial position and profit of the Company; and
- The Annual Report includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description of the principal risks and uncertainties that they
face.
For Murray International Trust PLC
Virginia Holmes
Chair
3 March 2026
Statement of Comprehensive Income
Year ended 31 December 2025 Year ended 31 December 2024
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments 10 - 272,801 272,801 - 63,053 63,053
Income 3 95,942 399 96,341 84,216 301 84,517
Investment management fees 4 (2,203) (5,139) (7,342) (2,137) (4,985) (7,122)
Currency losses - (164) (164) - (1,273) (1,273)
Administrative expenses 5 (1,658) (34) (1,692) (1,738) (59) (1,797)
Net return before finance costs and taxation 92,081 267,863 359,944 80,341 57,037 137,378
Finance costs 6 (849) (1,980) (2,829) (928) (2,165) (3,093)
Return before taxation 91,232 265,883 357,115 79,413 54,872 134,285
Taxation 7 (8,640) 100 (8,540) (8,438) 860 (7,578)
Return attributable to equity shareholders 82,592 265,983 348,575 70,975 55,732 126,707
Return per Ordinary share (pence) 9 13.9 44.8 58.7 11.6 9.1 20.7
The "Total" column of this statement represents the profit and loss account of
the Company. There is no other comprehensive income and therefore the return
after taxation is also the total comprehensive income for the year. The
'Revenue' and 'Capital' columns represent supplementary information prepared
under guidance issued by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations.
The accompanying notes are an integral part of these financial statements.
Statement of Financial Position
As at As at
31 December 2025 31 December 2024
Notes £'000 £'000
Fixed assets
Investments at fair value through profit or loss 10 1,993,212 1,764,994
Current assets
Prepayments and accrued income 11 6,415 7,591
Other debtors 11 10,663 10,577
Cash at bank and in hand 24,966 8,732
42,044 26,900
Creditors: amounts falling due within one year
Other creditors 12 (4,356) (3,129)
(4,356) (3,129)
Net current assets 37,688 23,771
Total assets less current liabilities 2,030,900 1,788,765
Creditors: amounts falling due after more than one year
Loan Notes 12,13 (109,926) (109,916)
Net assets 1,920,974 1,678,849
Capital and reserves
Called-up share capital 14 32,353 32,353
Share premium account 363,461 363,461
Capital redemption reserve 8,230 8,230
Capital reserve 15 1,431,532 1,200,623
Revenue reserve 85,398 74,182
Equity shareholders' funds 1,920,974 1,678,849
Net asset value per Ordinary share (pence) 16 325.4p 278.4p
The financial statements were approved and authorised for issue by the Board
of Directors on 3 March 2026 and were signed on its behalf by:
Virginia Holmes
Director
Company Number: SC006705
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Equity
For the year ended 31 December 2025
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2024 32,353 363,461 8,230 1,200,623 74,182 1,678,849
Return after taxation - - - 265,983 82,592 348,575
Dividends paid 8 - - - - (71,376) (71,376)
Buy back of shares to Treasury 14 - - - (35,074) - (35,074)
Balance at 31 December 2025 32,353 363,461 8,230 1,431,532 85,398 1,920,974
For the year ended 31 December 2024
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2023 32,353 363,461 8,230 1,189,686 75,132 1,668,862
Return after taxation - - - 55,732 70,975 126,707
Dividends paid 8 - - - - (71,925) (71,925)
Buy back of shares to Treasury 14 - - - (44,795) - (44,795)
Balance at 31 December 2024 32,353 363,461 8,230 1,200,623 74,182 1,678,849
The capital reserve at 31 December 2025 is split between realised gains of
£945,567,000 and unrealised gains of £485,965,000 (31 December 2024 -
realised gains of £841,238,000 and unrealised gains of £359,385,000).
The Company's reserves available to be distributed by way of dividends or
buybacks which includes the revenue reserve and the realised element of the
capital reserve amount to £1,030,965,000 (31 December 2024 - £915,420,000).
The accompanying notes are an integral part of these financial statements.
Statement of Cash Flows
Year ended Year ended
31 December 2025 31 December 2024
Notes £'000 £'000
Net return before finance costs and taxation 359,944 137,378
Increase/(decrease) in accrued expenses 1,873 (459)
Overseas withholding tax (8,866) (7,881)
Decrease in accrued income 3,116 150
Interest paid (2,818) (3,161)
Gains on investments (272,801) (63,053)
Overseas dividends - capital (399) (301)
Currency losses on foreign currency cash 13 6
Decrease/(increase) in other debtors 14 (40)
Return of capital included in investment income 399 301
Net cash inflow from operating activities 80,475 62,940
Investing activities
Purchases of investments (388,710) (227,021)
Sales of investments 431,579 313,188
Net cash from investing activities 42,869 86,167
Financing activities
Equity dividends paid 8 (71,376) (71,925)
Ordinary shares bought back to Treasury 14 (35,721) (44,322)
Loan repayment - (30,000)
Net cash used in financing activities (107,097) (146,247)
Increase in cash and cash equivalents 16,247 2,860
Analysis of changes in cash and cash equivalents during the year
Opening balance 8,732 5,878
Effect of foreign exchange rate movements on cash held (13) (6)
Increase in cash as above 16,247 2,860
Closing cash and cash equivalents 24,966 8,732
Represented by:
Cash at bank and in hand 24,966 8,732
The accompanying notes are an integral part of these financial statements.
Notes to the Financial Statements
For the year ended 31 December 2025
1. Principal activity
The Company is a closed-end investment company, registered in Scotland No
SC006705, with its Ordinary shares being listed in the premium segment market
of the London Stock Exchange.
2. Accounting policies
(a) Basis of preparation. The financial statements have been prepared in
accordance with Financial Reporting Standard 102 and with the AIC's Statement
of Recommended Practice 'Financial Statements of Investment Trust Companies
and Venture Capital Trusts' ("AIC SORP") issued in July 2022. The financial
statements are prepared in sterling which is the functional currency of the
Company and rounded to the nearest £'000. They have also been prepared on the
assumption that approval as an investment trust will continue to be granted.
The Directors have undertaken a robust review of the Company's viability
including scenario and sensitivity analysis (refer to statement on page 48 of
the published Annual Report and financial statements for the year ended 31
December 2025) and ability to continue as a going concern and consider that
there are no material uncertainties. The Company's assets consist of a diverse
portfolio of listed equity shares and bonds. The equities and a majority of
the bond portfolio are, in most circumstances, realisable within a very short
timescale and the Company itself has a strong balance sheet with considerable
levels of distributable reserves.
The Directors are mindful of the principal risks and uncertainties disclosed
on pages 46 and 47 of the published Annual Report and financial statements for
the year ended 31 December 2025 and have reviewed forecasts detailing revenue
and liabilities. The Directors believe that the Company has adequate financial
resources to continue its operational existence for the foreseeable future and
meet its liabilities as they fall due for a period of at least twelve months
from the date of this Annual Report. Accordingly, the Directors continue to
adopt the going concern basis in preparing these financial statements.
Significant accounting judgements, estimates and assumptions. The preparation
of financial statements requires the use of certain significant accounting
judgements, estimates and assumptions which requires management to exercise
its judgement in the process of applying the accounting policies and are
continually evaluated. The areas requiring most significant judgement and
assumption in the financial statements are: the determination of the fair
value hierarchy classification of quoted preference shares and bonds valued at
£50,300,000 (2024 - £110,224,000) which have been assessed as being Level 2
as they are not considered to trade in active markets; and also the
determination of whether special dividends received are considered to be
revenue or capital in nature on a case by case basis. The Directors do not
consider there to be any significant accounting estimates applied that have a
significant risk of resulting in a material adjustment to the carrying amount
of assets and liabilities within the next financial year.
(b) Income. Dividends receivable on equity shares are treated as revenue for the
year on an ex-dividend basis. Where no ex-dividend date is available dividends
are recognised on their due date. Provision is made for any dividends not
expected to be received. Special dividends are credited to capital or revenue,
according to their circumstances including the payee's source of funding and
their intention for investing.
In some jurisdictions, investment income and capital gains are subject to
withholding tax deducted at the source of the income. The Company presents the
withholding tax separately from the gross investment income in the Statement
of Comprehensive Income under taxation.
The fixed returns on debt securities are recognised on a time apportionment
basis so as to reflect the effective yield on the debt securities.
Interest receivable from cash at bank and in hand is accrued to the end of the
year.
(c) Expenses. All expenses are accounted for on an accruals basis and are charged
to the Statement of Comprehensive Income. Expenses are charged against revenue
except as follows:
- transaction costs on the acquisition or disposal of investments are charged
against capital in the Statement of Comprehensive Income; and
- expenses are treated as a capital item in the Statement of Comprehensive
Income and ultimately recognised in the capital reserve where a connection
with the maintenance or enhancement of the value of the investments can be
demonstrated. In this respect the investment management fee has been allocated
30% to revenue and 70% to the capital reserve to reflect the Board's expected
long-term split of returns in the form of revenue and capital gains
respectively.
(d) Taxation. The tax expense represents the sum of tax currently payable and
deferred tax. Any tax payable is based on the taxable profit for the year.
Taxable profit differs from net return as reported in the Statement of
Comprehensive Income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Company's liability for current tax is
calculated using tax rates that were applicable at the Statement of Financial
Position date.
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the Statement of Financial Position date, where
transactions or events that result in an obligation to pay more tax in the
future or right to pay less tax in the future have occurred at the Statement
of Financial Position date. This is subject to deferred tax assets only being
recognised if it is considered more likely than not that there will be
suitable profits from which the future reversal of the underlying timing
differences can be deducted. Timing differences are differences arising
between the Company's taxable profits and its results as stated in the
financial statements which are capable of reversal in one or more subsequent
periods. Deferred tax is measured on a non-discounted basis at the tax rates
that are expected to apply in the periods in which timing differences are
expected to reverse, based on tax rates and laws enacted or substantively
enacted at the Statement of Financial Position date.
Due to the Company's status as an investment trust company and the intention
to continue meeting the conditions required to obtain approval in the
foreseeable future, the Company has not provided deferred tax on any capital
gains and losses arising on the revaluation or disposal of investments.
The tax effect of different items of income/gain and expenditure/loss is
allocated between capital and revenue within the Statement of Comprehensive
Income on the same basis as the particular item to which it relates using the
Company's effective rate of tax for the year, based on the marginal basis.
(e) Investments. As permitted under FRS 102, the Company has chosen to apply the
recognition and measurement provisions of IAS 39 Financial Instruments:
Recognition and Measurement and investments have been designated upon initial
recognition at fair value through profit or loss. This is done because all
investments are considered to form part of a group of financial assets which
is evaluated on a fair value basis, in accordance with the Company's
documented investment strategy, and information about the grouping is provided
internally on that basis.
Investments are recognised and de-recognised at trade date where a purchase or
sale is under a contract whose terms require delivery within the timeframe
established by the market concerned, and are measured at fair value. For
listed investments, the valuation of investments at the year end is deemed to
be bid market prices or closing prices on recognised stock exchanges.
Gains and losses arising from changes in fair value are treated in net profit
or loss for the period as a capital item in the Statement of Comprehensive
Income and are ultimately recognised in the capital reserve.
(f) Cash and cash equivalents. Cash comprises cash at bank and in hand and may
include demand deposits. Cash equivalents may include short-term, highly
liquid investments, that are readily convertible to known amounts of cash and
that are subject to an insignificant risk of change in value.
(g) Short-term debtors and creditors. Both short-term debtors and creditors are
measured at amortised cost and not subject to interest charges.
(h) Borrowings. Borrowings, which comprise interest bearing bank loans and
unsecured loan notes are recognised initially at the fair value of the
consideration received, net of any issue expenses, and subsequently at
amortised cost using the effective interest method. The finance costs of such
borrowings are accounted for on an accruals basis using the effective interest
rate method and are charged 30% to revenue and 70% to capital in the Statement
of Comprehensive Income reflecting the Board's expected long-term split of
returns in the form of revenue and capital gains respectively.
(i) Nature and purpose of reserves
Called-up share capital. The Ordinary share capital on the Statement of
Financial Position relates to the number of shares in issue. This reserve is
not distributable.
Share premium account. The balance classified as share premium includes the
premium above nominal value from the proceeds on issue of any equity share
capital comprising Ordinary shares of 5p and the proceeds of sales of shares
held in Treasury in excess of the weighted average purchase price paid by the
Company to repurchase the shares. This reserve is not distributable.
Capital redemption reserve. The capital redemption reserve arose when Ordinary
shares were cancelled, at which point an amount equal to the par value of the
Ordinary share capital was transferred from the share capital account to the
capital redemption reserve. This reserve is not distributable.
Capital reserve. This reserve reflects any gains or losses on investments
realised in the period along with any movement in the fair value of
investments held that have been recognised in the Statement of Comprehensive
Income. These include gains and losses from foreign currency exchange
differences. Additionally, expenses, including finance costs, are charged to
this reserve in accordance with (c) and (h) above. This reserve is
distributable for the purpose of funding share buybacks and paying dividends
to the extent that gains are deemed realised.
When the Company purchases its Ordinary shares to be held in Treasury, the
amount of the consideration paid, which includes directly attributable costs,
is recognised as a deduction from the capital reserve.
Revenue reserve. This reserve reflects all income and costs which are
recognised in the revenue column of the Statement of Comprehensive Income. The
revenue reserve represents the amount of the Company's reserves distributable
by way of dividend.
(j) Foreign currency. Assets and liabilities in foreign currencies are translated
at the rates of exchange ruling on the Statement of Financial Position date.
Transactions involving foreign currencies are converted at the rate ruling on
the date of the transaction. The financial statements are presented in
sterling, which is the Company's functional and presentation currency. The
Company's performance is evaluated and its liquidity is managed in sterling.
Therefore sterling is considered as the currency that most fairly represents
the economic effects of the underlying transactions, events and conditions.
Gains and losses on dividends receivable are recognised in the Statement of
Comprehensive Income and are reflected in the revenue reserve. Gains and
losses on the realisation of foreign currencies are recognised in the
Statement of Comprehensive Income and are then transferred to the capital
reserve.
(k) Segmental reporting. The Directors are of the opinion that the Company is
engaged in a single segment of business activity, being investment business.
Consequently, no business segmental analysis is provided.
(l) Dividends payable. Dividends payable to equity shareholders are recognised in
the financial statements when they have been approved by shareholders and
become a liability of the Company. Interim dividends are recognised in the
financial statements in the period in which they are paid.
3. Income
2025 2024
£'000 £'000
Income from investments (all listed)
UK dividend income 12,699 8,111
Overseas dividends 76,955 66,625
Overseas dividends - capital 399 301
Overseas interest 5,884 8,260
95,937 83,297
Other income
Deposit interest 20 92
Stock lending income 312 638
Interest on tax reclaim 16 1
Other income(A) 56 489
Total income 96,341 84,517
(A) Comprises a voting fee received in relation to the cancellation of General
Accident 7.875% Cum Irr Pref of £56,000 (2024 - a compensation payment from
Aberdeen of £489,000 in respect of Swiss withholding tax reclaims, which fell
outside the time period allowed for submission).
4. Investment management fees
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fees 2,203 5,139 7,342 2,137 4,985 7,122
The Company has an agreement with abrdn Fund Managers Limited ("aFML") for the
provision of investment management, secretarial, accounting and administration
and promotional activity services.
The management fee is charged on net assets averaged over the six previous
quarters at a rate of 0.5% per annum up to £500 million and 0.4% per annum
thereafter. A fee of 1.5% per annum is chargeable on the value of any unlisted
investments. The investment management fee is chargeable 30% against revenue
and 70% against realised capital reserves. During the year £7,342,000 (2024 -
£7,122,000) of investment management fees was payable to the Manager, with a
balance of £3,713,000 (2024 - £1,796,000) being due at the year end.
No fees are charged in the case of investments managed or advised by the
Aberdeen Group. The management agreement may be terminated by either party on
the expiry of six months' written notice. On termination the Manager is
entitled to receive fees which would otherwise have been due up to that date.
5. Administrative expenses
2025 2024
£'000 £'000
Promotional activities(A) 325 400
Registrars' fees 50 50
Directors' remuneration 231 220
Bank charges and custody fees 427 523
Depositary fees 161 156
Stock exchange fees 157 143
Printing and postage 36 4
Auditor's fees for:
- Statutory Audit 53 49
Other expenses - capital 34 59
Other expenses 218 193
1,692 1,797
(A) In 2025 £277,000 (2024 - £400,000) was payable to aFML to cover
promotional activities during the year. At the year end £69,000 (2024 -
£100,000) was due to aFML.
6. Finance costs
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Bank loans and overdraft interest - - - 79 185 264
Interest on Loan Notes 846 1,973 2,819 844 1,970 2,814
Amortisation of Loan Notes issue expenses 3 7 10 5 10 15
849 1,980 2,829 928 2,165 3,093
7. Taxation
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(a) Total tax charge
Analysis for the year
Marginal tax relief 607 (607) - 922 (922) -
Overseas tax suffered 10,638 507 11,145 9,584 62 9,646
Overseas tax reclaimable (2,605) - (2,605) (2,068) - (2,068)
Total tax charge for the year 8,640 (100) 8,540 8,438 (860) 7,578
(b) Factors affecting the tax charge for the year. The UK corporation tax rate is
25% (2024 - 25%). The tax assessed for the year is lower than the
corporation tax rate. The differences are explained below:
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Return before taxation 91,232 265,883 357,115 79,413 54,872 134,285
Return multiplied by the standard rate of corporation tax of 25% (2024 - 25%) 22,808 66,471 89,279 19,853 13,718 33,571
Effects of:
Non taxable UK dividend income (2,738) (100) (2,838) (2,028) (75) (2,103)
Gains on investments not taxable - (68,200) (68,200) - (15,763) (15,763)
Currency losses not taxable - 41 41 - 318 318
Non taxable overseas dividends (19,046) - (19,046) (16,090) - (16,090)
Overseas tax suffered 10,638 507 11,145 9,584 62 9,646
Overseas tax reclaimable (2,605) - (2,605) (2,068) - (2,068)
Tax effect of expensed double taxation relief (104) - (104) (204) - (204)
Marginal tax relief 607 (607) - 922 (922) -
Expenses not deductible for tax purposes (920) 1,788 868 (1,531) 1,802 271
Total tax charge for the year 8,640 (100) 8,540 8,438 (860) 7,578
The Company has not provided for deferred tax on chargeable gains or losses
arising on the revaluation or disposal of investments as it is exempt from
corporation tax on these items because of its status as an investment trust
company.
The Company has not recognised a deferred tax asset (2024 - same). At the year
end, the Company has, for taxation purposes only, accumulated unrelieved
management expenses and loan relationship deficits of £4,487,000 (2024 -
£1,014,000). A deferred tax asset at the standard rate of corporation of 25%
(2024 - 25%) of £1,122,000 (2024 - £254,000) has not been recognised and
these expenses will only be utilised if the Company has profits chargeable to
corporation tax in the future. It is considered highly unlikely that the
Company will generate such profits and therefore no deferred tax asset has
been recognised.
8. Ordinary dividends on equity shares
2025 2024
£'000 £'000
Amounts recognised as distributions paid during the year:
Third interim for 2024 of 2.5p (2023 - 2.4p) 15,078 14,898
Final dividend for 2024 of 4.3p (2023 - 4.3p) 25,505 26,400
First interim for 2025 of 2.6p (2024 - 2.5p) 15,407 15,337
Second interim for 2025 of 2.6p (2024 - 2.5p) 15,382 15,288
Underpayment of dividends in prior year 4 2
71,376 71,925
A third interim dividend was declared on 4 December 2025 with an ex date of 2
January 2026. This dividend of 2.6p was paid on 17 February 2026 and has not
been included as a liability in these financial statements. The proposed final
dividend for 2025 is subject to approval by shareholders at the Annual General
Meeting and has not been included as a liability in these financial
statements.
Set out below are the total dividends paid and proposed in respect of the
financial year, which is the basis on which the requirements of Sections
1158-1159 of the Corporation Tax Act 2010 are considered. The revenue
available for distribution by way of dividend for the year is £82,592,000
(2024 - £70,975,000).
2025 2024
£'000 £'000
Three interim dividends for 2025 of 2.6p (2024 - 2.5p) 46,136 45,706
Proposed final dividend for 2025 of 4.6p (2024 - 4.3p) 27,222 25,590
73,358 71,296
The amount reflected above for the cost of the proposed final dividend for
2025 is based on 591,783,877 Ordinary shares, being the number of Ordinary
shares in issue excluding those held in Treasury at the date of this Report.
9. Return per Ordinary share
2025 2024
£'000 p £'000 p
Returns are based on the following figures:
Revenue return 82,592 13.9 70,975 11.6
Capital return 265,983 44.8 55,732 9.1
Total return 348,575 58.7 126,707 20.7
Weighted average number of Ordinary shares 593,153,296 613,268,463
10. Investments at fair value through profit or loss
2025 2024
£'000 £'000
Opening book cost 1,405,609 1,331,325
Opening investment holdings gains 359,385 456,538
Opening fair value 1,764,994 1,787,863
Analysis of transactions made during the year
Purchases at cost 388,710 227,021
Sales proceeds received (431,579) (313,188)
Gains on investments 272,801 63,053
Accretion of fixed income book cost(A) (1,714) 245
Closing fair value 1,993,212 1,764,994
(A) In accordance with the AIC SORP guidance
Closing book cost 1,507,247 1,405,609
Closing investment gains 485,965 359,385
Closing fair value 1,993,212 1,764,994
The Company received £431,579,000 (2024 - £313,188,000) from investments
sold in the period. The book cost of these investments when they were
purchased was £285,358,000 (2024 - £152,982,000). These investments have
been revalued over time and until they were sold any unrealised gains/losses
were included in the fair value of the investments.
2025 2024
The portfolio valuation £'000 £'000
Listed on stock exchanges:
United Kingdom:
- equities 181,246 94,451
- preference shares 3,850 6,907
Overseas:
- equities 1,761,666 1,560,319
- fixed income 46,450 103,317
Total 1,993,212 1,764,994
Transaction costs. During the year expenses were incurred in acquiring or
disposing of investments classified as fair value through profit or loss.
These have been expensed through capital and are included within gains on
investments in the Statement of Comprehensive Income. The total costs were as
follows:
2025 2024
£'000 £'000
Purchases 747 408
Sales 384 346
1,131 754
The above transaction costs are calculated in line with the AIC SORP. The
transaction costs in the Company's Key Information Document are calculated on
a different basis and in line with the PRIIPs regulations.
2025 2024
Stock Lending £'000 £'000
Aggregate value of securities on loan at the year end 31,862 46,790
Maximum aggregate value of securities on loan during the year 98,202 98,370
Fee income from stock lending 312 638
Stock lending is the temporary transfer of securities by a lender to a
borrower, with an agreement by the borrower to return equivalent securities to
the lender at an agreed date. Fee income is received for making the
investments available to the borrower. The principal risks and rewards of
holding the investments, namely the market movements in share prices and
dividend income, are retained by the Company. In all cases the securities lent
continue to be recognised on the Statement of Financial Position.
All stocks lent under these arrangements are fully secured by collateral. The
value of the collateral held at 31 December 2025 was £33,495,000 (2024 -
£49,245,000).
11. Debtors: amounts falling due within one year
2025 2024
£'000 £'000
Overseas withholding tax 10,630 10,523
Prepayments 54 47
Other debtors 33 54
Accrued income 6,361 7,544
17,078 18,168
None of the above amounts is overdue or impaired.
12. Creditors
2025 2024
£'000 £'000
Amounts falling due within one year:
Amounts due to brokers - 647
Investment management fees 3,713 1,796
Administrative expenses 351 395
Interest on bank loans and loan notes 292 291
4,356 3,129
2025 2024
£'000 £'000
Amounts falling due after more than one year:
Loan notes (note 13) 109,926 109,916
109,926 109,916
All financial liabilities are measured at amortised cost.
13. Borrowings
2025 2024
£'000 £'000
Unsecured loan notes repayable in more than five years:
- £50,000,000 at 2.24% - 13 May 2031 49,945 49,936
- £60,000,000 at 2.83% - 31 May 2037 59,981 59,980
109,926 109,916
The terms of these loan notes permit early repayment at the borrower's option
which may give rise to additional amounts being either payable or repayable in
respect of fluctuations in interest rates since drawdown. Since the Directors
currently have no intention of repaying the loan notes early, then no such
charges are included in the cash flows used to determine their effective
interest rate.
At 31 December 2025, the Company had utilised £110 million of its £200
million Shelf Facility. Under the terms of the Loan Note Agreement Shelf
Facility, dated May 2021, up to an additional £90 million has also been made
available for drawdown by the Company for a five year period, expiring in May
2026. Financial covenants contained within the loan note agreement provide,
inter alia, that borrowings shall at no time exceed 35% of net assets, that
the Company must hold 40 investments or more and that the net assets must
exceed £650 million. At 31 December 2025 the Company held 57 investments, net
assets were £1,920,974,000 and borrowings were 5.7% thereof. The Company has
complied with all financial covenants throughout the year.
14. Share capital
2025 2024
Number £'000 Number £'000
Allotted, called up and fully paid Ordinary shares of 5p
Balance brought forward 603,129,219 30,156 620,866,332 31,043
Ordinary shares bought back to Treasury in the year (12,876,886) (644) (17,737,113) (887)
Balance carried forward 590,252,333 29,512 603,129,219 30,156
Treasury shares:
Balance brought forward 43,930,796 2,197 26,193,683 1,310
Ordinary shares bought back to Treasury in the year 12,876,886 644 17,737,113 887
Balance carried forward 56,807,682 2,841 43,930,796 2,197
At 31 December 2025, shares held in Treasury represented 8.8% (2024 - 6.8%) of
the Company's total issued share capital.
During the year 12,876,886 Ordinary shares were bought back to Treasury at an
average price of 272.88p representing 2.0% of the Company's total issued share
capital (2024 - 17,737,113 at an average price of 250.15p representing 2.7% of
the Company's total issued share capital) at a total cost of £35,074,000
(2024 - £44,795,000) net of expenses. Subsequent to the year 1,531,544
Ordinary shares have been sold from Treasury for proceeds of £5,526,000.
On a winding up of the Company, any surplus assets available after payment of
all debts and satisfaction of all liabilities of the Company shall be applied
in repaying the Ordinary shareholders the amounts paid up on such shares. Any
surplus shall be divided among the holders of Ordinary shares according to the
amount paid up on such shares respectively.
Voting rights. In accordance with the Articles of Association of the Company,
on a show of hands, every member (or duly appointed proxy) present at a
general meeting of the Company has one vote; and, on a poll, every member
present in person or by proxy shall have one vote for every 5p nominal amount
of Ordinary shares held.
15. Capital reserve
2025 2024
£'000 £'000
At 1 January 1,200,623 1,189,686
Movement in fair value gains 272,801 63,053
Overseas dividends capital 399 301
Capital expenses (including taxation) (7,053) (6,349)
Buy back of shares to Treasury (35,074) (44,795)
Currency losses (164) (1,273)
At 31 December 1,431,532 1,200,623
Included in the total above are investment holdings gains at the year end of
£485,965,000 (2024 - £359,385,000), which is not considered distributable.
16. Net asset value per share
The net asset value per share and the net asset value attributable to the
Ordinary shares at the year end, calculated in accordance with the Articles of
Association and FRS 102, were as follows:
As at As at
31 December 2025 31 December 2024
Attributable net assets (£'000) 1,920,974 1,678,849
Number of Ordinary shares in issue (excluding Treasury) 590,252,333 603,129,219
Net asset value per share (pence) 325.4 278.4
17. Analysis of changes in net debt
At Effects of At
31 December Currency Cash Non-cash 31 December
2024 differences flows movements(A) 2025
£'000 £'000 £'000 £'000 £'000
Cash at bank and in hand 8,732 (13) 16,247 - 24,966
Debt due after more than one year (109,916) - - (10) (109,926)
(101,184) (13) 16,247 (10) (84,960)
At Effects of At
31 December Currency Cash Non-cash 31 December
2023 differences flows movements(A) 2024
£'000 £'000 £'000 £'000 £'000
Cash at bank and in hand 5,878 (6) 2,860 - 8,732
Debt due within one year (29,996) - 30,000 (4) -
Debt due after more than one year (109,905) - - (11) (109,916)
(134,023) (6) 32,860 (15) (101,184)
(A) Figures reflect a movement in maturity dates and amortisation of finance
costs.
A statement reconciling the movement in net funds to the net cash flow has not
been presented as there are no differences from the above analysis.
18. Financial instruments and risk management
The Company's investment activities expose it to various types of financial
risk associated with the financial instruments and markets in which it
invests. The Company's financial instruments comprise listed equities and debt
securities, cash balances, loans and debtors and creditors that arise directly
from its operations; for example, in respect of sales and purchases awaiting
settlement, and debtors for accrued income. The Company may enter into
derivative transactions for the purpose of managing market risks arising from
the Company's activities in the form of swap contracts, forward foreign
currency contracts, futures and options.
The Board has delegated the risk management function to abrdn Fund Managers
Limited ("aFML") under the terms of its management agreement with aFML
(further details of which are included in the Directors' Report). The Board
regularly reviews and agrees policies for managing each of the key financial
risks identified with the Manager. The types of risk and the Manager's
approach to the management of each type of risk, are summarised below. Such
approach has been applied throughout the year and has not changed since the
previous accounting period. The numerical disclosures exclude short-term
debtors and creditors.
Risk management framework. The directors of aFML collectively assume
responsibility for aFML's obligations under the AIFMD including reviewing
investment performance and monitoring the Company's risk profile during the
year.
aFML is a fully integrated member of the Aberdeen Group plc ("the Group"),
which provides a variety of services and support to aFML in the conduct of its
business activities, including in the oversight of the risk management
framework for the Company. The AIFM has delegated the day to day
administration of the investment policy to abrdn Investments Limited, which is
responsible for ensuring that the Company is managed within the terms of its
investment guidelines and the limits set out in its pre-investment disclosures
to investors (details of which can be found on the Company's website). The
AIFM has retained responsibility for monitoring and oversight of investment
performance, product risk and regulatory and operational risk for the Company.
The Manager conducts its risk oversight function through the operation of the
Group's risk management processes and systems which are embedded within the
Group's operations. The Group's Risk Division supports management in the
identification and mitigation of risks and provides independent monitoring of
the business. The Division includes Compliance, Business Risk, Market Risk,
Risk Management and Legal. The team is headed up by the Group's Chief Risk
Officer, who reports to the Chief Executive Officer of the Group. The Risk
Division achieves its objective through embedding the Risk Management
Framework throughout the organisation using the Group's operational risk
management system ("SHIELD").
The Group's Internal Audit Department is independent of the Risk Division and
reports directly to the Group's Chief Executive Officer and to the Audit
Committee of the Group's Board of Directors. The Internal Audit Department is
responsible for providing an independent assessment of the Group's control
environment.
The Group's corporate governance structure is supported by several committees
to assist the board of directors of Aberdeen plc, its subsidiaries and the
Company to fulfil their roles and responsibilities. The Group's Risk Division
is represented on all committees, with the exception of those committees that
deal with investment recommendations. The specific goals and guidelines on the
functioning of those committees are described on the committees' terms of
reference.
Risk management. The main risks the Company faces from its financial
instruments are (i) market risk (comprising interest rate risk, foreign
currency risk and price risk), (ii) liquidity risk and (iii) credit risk.
(i) Market risk. The fair value and future cash flows of a financial instrument
held by the Company may fluctuate because of changes in market prices. This
market risk comprises three elements - interest rate risk, foreign currency
risk and price risk.
(i)(a) Interest rate risk. Interest rate risk is the risk that interest rate
movements will affect:
- the fair value of the investments in fixed interest rate securities; and
- the level of income receivable on cash deposits.
Management of the 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
when making investment and borrowing decisions.
The Board reviews the values of the fixed interest rate securities on a
regular basis.
The Board imposes borrowing limits to ensure gearing levels are appropriate to
market conditions and reviews these on a regular basis. Borrowings comprise
fixed rate facilities, which are used to finance opportunities at low rates.
Current bank covenant guidelines are detailed in note 13 on page 102 of the
published Annual Report and financial statements for the year ended 31
December 2025.
Interest rate risk profile. The interest rate risk profile of the portfolio of
financial assets and liabilities at the Statement of Financial Position date
was as follows:
Weighted
average
period for Weighted Non-
which average Fixed Floating interest
rate is fixed interest rate rate rate bearing
At 31 December 2025 Years % £'000 £'000 £'000
Assets
Sterling - - 3,850 24,708 212,872
US Dollar - - - 5 667,453
Indian Rupee 0.67 7.79 12,449 - 31,392
Indonesian Rupiah - - - - 24,825
Mexican Peso 0.18 5.75 16,482 - 109,900
South African Rand 5.16 7.00 17,519 - -
Other - - - 253 896,470
Total assets 50,300 24,966 1,942,912
Liabilities
Loan Notes 8.67 2.56 (109,926) - -
Total liabilities (109,926) - -
Weighted
average
period for Weighted Non-
which average Fixed Floating interest
rate is fixed interest rate rate rate bearing
At 31 December 2024 Years % £'000 £'000 £'000
Assets
Sterling - - 6,907 8,321 155,453
US Dollar 20.98 6.53 28,689 371 566,866
Indian Rupee 1.67 7.79 13,956 40 -
Indonesian Rupiah 5.49 7.49 29,281 - 16,133
Mexican Peso 1.18 5.75 14,653 - 79,406
South African Rand 6.16 7.00 15,035 - -
Turkish Lira 0.19 8.00 1,703 - -
Other - - - - 836,912
Total assets 110,224 8,732 1,654,770
Liabilities
Loan Notes 9.67 2.56 (109,916) - -
Total liabilities (109,916) - -
The weighted average interest rate is based on the current yield of each
asset, weighted by its market value. The weighted average interest rate on
bank loans and loan notes are based on the interest rate payable, weighted by
the total value of the bank loans and loan notes. The maturity dates of the
Company's loan notes are shown in note 13 to the financial statements.
The fixed rate assets represents quoted preference shares and bonds.
The floating rate assets consist of cash deposits on call earning interest at
prevailing market rates.
The non-interest bearing assets represent the equity element of the portfolio.
Short-term debtors and creditors have been excluded from the above tables as
they are not considered to be exposed to interest rate risk.
Interest rate sensitivity. The sensitivity analyses below have been determined
based on the exposure to interest rates for non-derivative instruments at the
Statement of Financial Position date and the stipulated change taking place at
the beginning of the financial year and held constant throughout the reporting
period in the case of instruments that have floating rates.
If interest rates had been 100 basis points higher or lower (based on the
current parameter used by the Manager's Investment Risk Department on risk
assessment) and all other variables were held constant, the Company's
revenue return for the year ended 31 December 2025 would increase/decrease by
£250,000 (2024 - increase/decrease by £87,000). This is mainly attributable
to the Company's exposure to interest rates on its floating rate cash
balances. These figures have been calculated based on cash positions at each
year end.
The capital return would decrease/increase by £1,408,000 (2024 -
increase/decrease by £3,825,000) using VaR ("Value at Risk") analysis based
on 100 observations of weekly VaR computations of fixed interest portfolio
positions at each year end.
(i)(b) Foreign currency risk. A significant proportion of the Company's investment
portfolio is invested overseas whose values are subject to fluctuation due to
changes in foreign exchange rates. In addition, the impact of changes in
foreign exchange rates upon the profits of investment holdings can result,
indirectly, in changes in their valuations. Consequently the Statement of
Financial Position can be affected by movements in exchange rates.
Management of the risk. It is not the Company's policy to hedge this risk on a
continuing basis but the Company may, from time to time, match specific
overseas investment with foreign currency borrowings. The Manager seeks, when
deemed appropriate, to manage exposure to currency movements on borrowings by
using forward foreign currency contracts as a hedge against potential foreign
currency movements. At 31 December 2025 the Company did not have any forward
foreign currency contracts (2024 - none).
The revenue account is subject to currency fluctuation arising on overseas
income. The Company does not hedge this currency risk.
Currency risk exposure. Currency risk exposure (excluding fixed interest
securities) by currency of denomination:
31 December 2025 31 December 2024
UK and UK and
overseas Net Total overseas Net Total
equity monetary currency equity monetary currency
investments assets(A) exposure investments assets(A) exposure
£'000 £'000 £'000 £'000 £'000 £'000
US Dollar 667,453 5 667,458 566,866 371 567,237
Euro 401,457 - 401,457 291,907 - 291,907
Singapore Dollar 111,258 - 111,258 94,630 - 94,630
Mexican Peso 109,900 - 109,900 79,406 - 79,406
Taiwan Dollar 90,909 - 90,909 129,221 - 129,221
Hong Kong Dollar 75,088 - 75,088 74,098 - 74,098
Swiss Franc 53,652 - 53,652 47,454 - 47,454
Canadian Dollar 46,574 (7) 46,567 91,834 - 91,834
Danish Krone 38,002 260 38,262 32,776 - 32,776
Indian Rupee 31,392 - 31,392 - 40 40
Norwegian Krone 30,276 - 30,276 17,174 - 17,174
Thailand Baht 29,522 - 29,522 24,660 - 24,660
Indonesian Rupiah 24,825 - 24,825 16,133 - 16,133
Australian Dollar 19,732 - 19,732 17,012 - 17,012
Swedish Krone - - - 16,146 - 16,146
1,730,040 258 1,730,298 1,499,317 411 1,499,728
Sterling 212,872 (85,218) 127,654 155,453 (101,595) 53,858
Total 1,942,912 (84,960) 1,857,952 1,654,770 (101,184) 1,553,586
(A) Reflects cash, short-term deposits and bank borrowings.
The asset allocation between specific markets can vary from time to time based
on the Manager's opinion of the attractiveness of the individual markets.
Foreign currency sensitivity. The following table details the Company's
sensitivity to a 10% decrease (in the context of a 10% increase the figures
below should all be read as negative) in sterling against the major foreign
currencies in which the Company has exposure (based on exposure >5% of
total exposure). The sensitivity analysis includes foreign currency
denominated monetary items and adjusts their translation at the year end for a
10% change in foreign currency rates, being a reasonable range of fluctuations
for the period.
2025 2024
Capital(A) Capital(A)
£'000 £'000
US Dollar 66,746 56,724
Euro 40,146 29,191
Singapore Dollar 11,126 9,463
Mexican Peso 10,990 7,941
Taiwan Dollar - 12,922
Canadian Dollar - 9,183
Total 129,008 125,424
(A) Represents equity exposures to the relevant currencies.
(i)(c) Price risk. Other price risks (ie changes in market prices other than those
arising from interest rate or currency risk) may affect the value of the
quoted investments. The Company's stated objective is to achieve an above
average dividend yield, with long-term growth in dividends and capital ahead
of inflation by investing principally in global equities.
Management of the risk. It is the Board's policy to hold an appropriate spread
of investments in the portfolio in order to reduce the risk arising from
factors specific to a particular country or sector. The allocation of assets
to international markets and the stock selection process, as detailed on pages
24 to 26 of the published Annual Report and financial statements for the year
ended 31 December 2025, both act to reduce market risk. The Manager actively
monitors market prices throughout the year and reports to the Board, which
meets regularly in order to review investment strategy. The investments held
by the Company are listed on various stock exchanges worldwide.
Price risk sensitivity. If market prices at the Statement of Financial
Position date had been 10% higher or lower, which is a reasonable range of
annual price fluctuations, while all other variables remained constant, the
return attributable to Ordinary shareholders for the year ended 31 December
2025 would have increased/decreased by £194,291,000 (2024 - increase/decrease
of £165,477,000) and equity would have increased/decreased by the same
amount.
(ii) Liquidity risk. This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities as they fall due in
line with the maturity profile analysed below.
Within Within Within Within Within More than
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total
At 31 December 2025 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loan Notes - - - - - 110,000 110,000
Interest cash flows on Loan Notes 2,818 2,818 2,818 2,818 2,818 11,597 25,687
Cash flows on other creditors 4,064 - - - - - 4,064
6,882 2,818 2,818 2,818 2,818 121,597 139,751
Within Within Within Within Within More than
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total
At 31 December 2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loan Notes - - - - - 110,000 110,000
Interest cash flows on Loan Notes 2,818 2,818 2,818 2,818 2,818 14,415 28,505
Cash flows on other creditors 2,838 - - - - - 2,838
5,656 2,818 2,818 2,818 2,818 124,415 141,343
Management of the risk. Liquidity risk is not considered to be significant as
the Company's assets comprise mainly readily realisable securities, which can
be sold to meet funding commitments if necessary. Short-term flexibility is
achieved through the use of loan and overdraft facilities (note 13).
(iii) Credit risk. This is failure of the counterparty to a transaction to discharge
its obligations under that transaction that could result in the Company
suffering a loss.
Management of the risk
- where the Manager makes an investment in a bond, corporate or otherwise, the
credit ratings of the issuer are taken into account so as to manage the risk
to the Company of default;
- investments in quoted bonds are made across a variety of industry sectors
and geographic markets so as to avoid concentrations of credit risk;
- transactions involving derivatives are entered into only with investment
banks, the credit rating of which is taken into account so as to minimise the
risk to the Company of default;
- investment transactions are carried out with a number of brokers, whose
credit-standing is reviewed periodically by the Manager, and limits are set on
the amount that may be due from any one broker;
- the risk of counterparty exposure due to failed trades causing a loss to the
Company is mitigated by the daily review of failed trade reports. In addition,
both stock and cash reconciliations to the custodian's records are performed
daily to ensure discrepancies are investigated in a timely manner. The
Manager's Compliance department carries out periodic reviews of the
custodian's operations and reports its finding to the Manager's Risk
Management Committee;
- cash is held only with reputable banks with acceptable credit quality. It is
the Manager's policy to trade only with A- and above (Long-term rated) and
A-1/P-1 (Short-term rated) counterparties.
Credit risk exposure. In summary, compared to the amounts in the Statement of
Financial Position, the maximum exposure to credit risk at 31 December 2025
and 31 December 2024 was as follows:
2025 2024
Balance Maximum Balance Maximum
Sheet exposure Sheet exposure
£'000 £'000 £'000 £'000
Non-current assets
Quoted preference shares and bonds at fair value through profit or loss 50,300 50,300 110,224 110,224
Current assets
Other debtors 33 33 54 54
Accrued income 6,361 6,361 7,544 7,544
Cash and short-term deposits 24,966 24,966 8,732 8,732
81,660 81,660 126,554 126,554
None of the Company's financial assets is secured by collateral or other
credit enhancements.
Credit ratings. The table below provides a credit rating profile using Moodys
credit ratings for the quoted preference shares and bonds at 31 December 2025
and 31 December 2024:
2025 2024
£'000 £'000
Ba1 3,850 3,547
Ba2 17,519 15,035
Baa2 16,482 43,934
Ba3 - 11,755
B3 - 16,934
Non-rated 12,449 19,019
50,300 110,224
Whilst a substantial proportion of the fixed interest portfolio does not have
a rating provided by Moodys, the Manager undertakes an ongoing review of their
suitability for inclusion within the portfolio as set out in "Investment
Process" on pages 24 to 26 of the published Annual Report and financial
statements for the year ended 31 December 2025. At 31 December 2025 Moodys
credit ratings agency did not provide a rating for Indian bonds (2024 - Indian
bonds, Turkish bonds and Irredeemable preference shares) held by the Company
and were accordingly categorised as non-rated in the table above. (2024 -
Fitch credit ratings agency did provide a BB- rating for Turkish bonds with a
value of £1,703,000).
Fair values of financial assets and financial liabilities. The fair value of
borrowings has been calculated at £88,581,000 as at 31 December 2025 (2024 -
£85,097,000) compared to a carrying amount in the financial statements of
£109,926,000 (2024 - £109,916,000) (note 13). The fair value of each loan is
determined by aggregating the expected future cash flows for that loan
discounted at a rate comprising the borrower's margin plus an average of
market rates applicable to loans of a similar period of time and currency. The
carrying value of all other assets and liabilities is an approximation of fair
value.
19. Fair value hierarchy
FRS 102 requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy shall have the following
classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or
liabilities that the entity can access at the measurement date.
Level 2: inputs other than quoted prices included in Level 1 that are
observable (ie developed using market data) for the asset or liability, either
directly or indirectly.
Level 3: inputs are unobservable (ie for which market data is unavailable) for
the asset or liability.
The financial assets and liabilities measured at fair value in the Statement
of Financial Position are grouped into the fair value hierarchy at the
reporting date as follows:
Level 1 Level 2 Level 3 Total
As at 31 December 2025 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted equities a) 1,942,912 - - 1,942,912
Quoted preference shares b) - 3,850 - 3,850
Quoted bonds b) - 46,450 - 46,450
Total 1,942,912 50,300 - 1,993,212
Level 1 Level 2 Level 3 Total
As at 31 December 2024 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted equities a) 1,654,770 - - 1,654,770
Quoted preference shares b) - 6,907 - 6,907
Quoted bonds b) - 103,317 - 103,317
Total 1,654,770 110,224 - 1,764,994
a) Quoted equities. The fair value of the Company's investments in quoted
equities has been determined by reference to their quoted bid prices at the
reporting date. Quoted equities included in Fair Value Level 1 are actively
traded on recognised stock exchanges.
b) Quoted preference shares and bonds. The fair value of the Company's
investments in quoted preference shares and bonds has been determined by
reference to their quoted bid prices at the reporting date. Investments
categorised as Level 2 are not considered to trade in active markets.
20. Capital management policies and procedures
The investment objective of the Company is to achieve an above average
dividend yield, with long-term growth in dividends and capital ahead of
inflation by investing principally in global equities.
The capital of the Company consists of bank borrowings and equity, comprising
issued capital, reserves and retained earnings. The Company manages its
capital to ensure that it will be able to continue as a going concern while
maximising the return to shareholders through the optimisation of the debt and
equity balance.
The Board monitors and reviews the broad structure of the Company's capital on
an ongoing basis. This review includes:
- the planned level of gearing which takes into account the Investment
Manager's views on the market;
- the level of equity shares in issue; and
- the extent to which revenue in excess of that which is required to be
distributed should be retained.
The Company's objectives, policies and processes for managing capital are
unchanged from the preceding accounting period.
Details of the Company's gearing facilities and financial covenants are
detailed in note 13 of the financial statements. The Company does not have any
other externally imposed capital requirements.
21. Related party transactions
Directors' fees and interests. Fees payable during the year to the Directors
and their interests in shares of the Company are disclosed within the
Directors' Remuneration Report on pages 71 and 72 of the published Annual
Report and financial statements for the year ended 31 December 2025.
In the opinion of the Directors on the basis of shareholdings advised to them,
the Company has no immediate or ultimate controlling party.
22. Transactions with the Manager
The Company has agreements with aFML for the provision of management,
accounting and administration services and promotional activities. Details of
transactions during the year and balances outstanding at the year end are
disclosed in notes 4 and 5.
The Annual Financial Report Announcement is not the Company's statutory
accounts. The above results for the year ended 31 December 2025 are an
abridged version of the Company's full Annual Report and financial statements,
which have been approved and audited with an unqualified report. The 2024 and
2025 statutory accounts received unqualified reports from the Company's
auditors and did not include any reference to matters to which the auditor
drew attention by way of emphasis without qualifying the reports, and did not
contain a statement under s.498 of the Companies Act 2006. The financial
information for 2024 is derived from the statutory accounts for 2025 which
have been delivered to the Registrar of Companies. The 2025 financial
statements will be filed with the Registrar of Companies in due course.
The Annual Report will be posted to shareholders in March 2026 and additional
copies will be available from the registered office of the Company and on the
Company's website, murray-intl.co.uk*
Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as
rise and may be affected by exchange rate movements. Investors may not get
back the amount they originally invested.
*Neither the content of the Company's website nor the content of any website
accessible from hyperlinks on the Company's website (or any other website) is
(or is deemed to be) incorporated into, or forms (or is deemed to form) part
of this announcement.
For Murray International Trust PLC
abrdn Holdings Limited, Company Secretary
3 March 2026
Securities Financing Transactions Disclosure (unaudited)
The Company engages in Securities Financing Transactions (SFTs) (as defined in
Article 3 of Regulation (EU) 2015/2365, SFTs include repurchase transactions,
securities or commodities lending and securities or commodities borrowing,
buy-sell back transactions or sell-buy back transactions and margin lending
transactions). In accordance with Article 13 of the Regulation, the Fund's
involvement in and exposures related to securities lending for the accounting
period are detailed below:
% of % of
Absolute value of assets engaged in SFTs £'000 lendable assets net assets
31 December 2025
Securities lending 31,862 1.60 1.66
31 December 2024
Securities lending 46,790 2.65 2.79
Top ten collateral issuers and collateral received
Based on market value of collateral received. For all issuers, only equity
securities with a main market listing were lent and the custodian was BNY
Mellon.
2025 £'000 2024 £'000
UK Treasury 33,495 US Treasury 48,615
Government of Australia 630
33,495 49,245
2025 2024
Proportion held Proportion held
Market value in segregated Market value in segregated
of collateral held accounts of collateral held accounts
Collateral held per custodian £'000 % £'000 %
BNY Mellon 33,495 100 49,245 100
One custodian is used to hold the collateral, which is in a segregated
account.
Market value
of collateral received
2025 2024
Collateral analysed by currency £'000 £'000
Sterling 33,495 -
US Dollar - 48,615
Australian Dollar - 630
Total collateral received 33,495 49,245
Market value Countries of
Securities lending of securities lending counterparty Settlement
Top Ten Counterparties per type of SFT(A) £'000 establishment and clearing
31 December 2025
BNP Paribas 31,862 France Tri-party
Total market value of securities lending 31,862
31 December 2024
Goldman Sachs 46,263 US Tri-party
UBS 527 Switzerland Tri-party
Total market value of securities lending 46,790
(A) All counterparties are shown
Maturity Tenor of SFTs (remaining period to maturity)
31 December 2025
Securities lending
The lending and collateral transactions are on an open basis and can be
recalled on demand. As at 31 December 2025 there was one security on loan (31
December 2024 - three).
The Company does not engage in any re-use of collateral.
2025 2024
Return and cost per type of SFT £'000 % £'000 %
Securities lending
Gross return 367 115 751 115
Direct operational costs (securities lending agent costs)(B) (55) (15) (113) (15)
Total costs (55) (15) (113) (15)
Net return 312 100 638 100
(B) The unrounded direct operational costs and fees incurred for securities
lending for the 12 months to 31 December 2025 is £55,115 (2024 - £112,471).
Alternative Performance Measures
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash flows,
other than financial measures defined or specified in the applicable financial
framework. The Company's applicable financial framework includes FRS 102 and
the AIC SORP. The Directors assess the Company's performance against a range
of criteria which are viewed as particularly relevant for closed-end
investment companies.
Premium/(discount) to net asset value per Ordinary share
The discount is the amount by which the share price is higher or lower than
the net asset value per share at the year end, expressed as a percentage of
the net asset value.
2025 2024
NAV per Ordinary share (p) a 325.4 278.4
Share price (p) b 335.0 257.5
Premium/(discount) (b-a)/a 3.0% -7.5%
Dividend cover
Dividend cover measures the revenue return per share divided by total
dividends per share, expressed as a ratio.
2025 2024
Revenue return per share (p) a 13.9 11.6
Dividends per share (p) b 12.4 11.8
Dividend cover a/b 1.12x 0.98x
Dividend yield
The annual dividend per Ordinary share divided by the share price at the year
end, expressed as a percentage.
2025 2024
Dividends per share (p) a 12.4 11.8
Share price (p) b 335.0 257.5
Dividend yield a/b 3.7% 4.6%
Net gearing
Net gearing measures the total borrowings less cash and cash equivalents
divided by NAV, expressed as a percentage. Under AIC reporting guidance cash
and cash equivalents includes amounts due to and from brokers at the year end
as well as cash and cash equivalents.
2025 2024
Borrowings (£'000) a 109,926 109,916
Cash (£'000) b 24,966 8,732
Amounts due to brokers (£'000) c - 647
Shareholders' funds (£'000) d 1,920,974 1,678,849
Net gearing (a-b+c)/d 4.4% 6.1%
Ongoing charges ratio (OCR)
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of investment management fees and recurring
administrative expenses, expressed as a percentage of the average daily net
asset values with debt at fair value published throughout the year.
2025 2024
Investment management fees (£'000) 7,342 7,122
Administrative expenses (£'000) 1,692 1,798
Less: non-recurring charges(A) (£'000) (74) (106)
Ongoing charges (£'000) 8,960 8,814
Average net assets (£'000) 1,782,658 1,694,445
Ongoing charges ratio 0.50% 0.52%
(A) Professional services comprising new Director recruitment costs, legal and
advisory fees and costs deducted from return of capital proceeds considered
unlikely to recur.
The ongoing charges ratio above differs from that provided in the Company's
Key Information Document.
Total return
NAV and share price total returns show how the NAV and share price have
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. Share price and NAV
returns are monitored against the Benchmark.
Share
Year ended 31 December 2025 NAV Price
Opening at 1 January 2025 a 278.4p 257.5p
Closing at 31 December 2025 b 325.4p 335.0p
Price movements c=(b/a)-1 16.9% 30.1%
Dividend reinvestment(A) d 5.0% 5.9%
Total return c+d +21.9% +36.0%
Share
Year ended 31 December 2024 NAV Price
Opening at 1 January 2024 a 268.8p 258.0p
Closing at 31 December 2024 b 278.4p 257.5p
Price movements c=(b/a)-1 3.6% -0.2%
Dividend reinvestment(A) d 4.5% 4.7%
Total return c+d +8.1% +4.5%
(A) NAV total return involves investing the net dividend in the NAV of the
Company with debt at par value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net dividend in
the share price of the Company on the date on which that dividend goes
ex-dividend.
abrdn Holdings Limited
Company Secretary
3 March 2026
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