REG - Polar Cap Glb Health PCGH ZDP PLC - Final Results
14/01/2026 07:00
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RNS Number : 7725O Polar Capital Global Health Tst PLC 14 January 2026
POLAR CAPITAL GLOBAL HEALTHCARE TRUST PLC
Legal Entity Identifier: 549300YV7J2TWLE7PV84
AUDITED RESULTS ANNOUNCEMENT FOR THE YEAR ENDED
30 SEPTEMBER 2025
FINANCIAL HIGHLIGHTS
For the year to 30 September 2025
Performance
Net asset value per Ordinary share (total return)* -5.86%
Benchmark Index (MSCI ACWI Healthcare Index (total return in sterling with -7.81%
dividends reinvested))
Since restructuring
Net asset value per Ordinary share (total return) since restructuring *~ 81.33%
Benchmark index total return since restructuring 68.18%
Expenses 2025 2024
Ongoing charges* 0.90% 0.88%
Financials As at As at Change %
30 September 2025 30 September 2024
Total net assets £448,110,000 £479,073,000 -6.5%
Net asset value per Ordinary share 369.51p 395.05p -6.5%
Price per Ordinary share 355.00p 376.00p -5.6%
Discount per Ordinary share* 3.93% 4.82%
Net cash* (1.83%) (0.91%)
Ordinary shares in issue (excluding those held in treasury) 121,270,000 121,270,000 -
Ordinary shares held in treasury 2,879,256 2,879,256 -
Dividends
The Company has paid or declared the following dividends relating to the
financial year ended 30 September 2025:
Pay date Amount per Record Date Ex-Date Declared Date
Ordinary share
First interim: 29 August 2025 1.20p 8 August 2025 7 August 2025 10 July 2025
Second interim: 27 February 2026 1.00p 6 February 2026 5 February 2026 13 January 2026
Total (2024: 2.40p) 2.20p
* See Alternative Performance Measures provided in the Annual Report.
~ The Company's portfolio was restructured on 20 June 2017. The total return
NAV performance since restructuring is calculated by reinvesting the dividends
in the assets of the Company from the relevant payment date.
For further information please contact:
Ed Gascoigne-Pees Tracey Lago, FCG John Regnier-Wilson
Camarco Polar Capital Global Healthcare Trust Plc Polar Capital LLP
Tele. 020 3757 4984 Tele. 020 7227 2742 Tele. 020 7227 2725
STATUS OF ANNOUNCEMENT
The figures and financial information contained in this announcement are
extracted from the Audited Annual Report for the year ended 30 September
2025 and do not constitute statutory accounts for the period. The Annual
Report and Financial Statements include the Report of the Independent
Auditors which is unqualified and does not contain a statement under either
section 498(2) or Section 498(3) of the Companies Act 2006.
The Annual Report and Financial Statements for the year ended 30 September
2025 have not yet been delivered to the Registrar of Companies. The figures
and financial information for the period ended 30 September 2024 are extracted
from the published Annual Report and Financial Statements for the period ended
30 September 2024 and do not constitute the statutory accounts for that
year. The Annual Report and Financial Statements for the period ended 30
September 2024 have been delivered to the Registrar of Companies and included
the Report of the Independent Auditors which was unqualified and did not
contain a statement under either section 498(2) or Section 498(3) of the
Companies Act 2006.
The Directors' Remuneration Report and certain other helpful Shareholder
information have not been included in this announcement but forms part of
the Annual Report which will be available on the Company's website and will
be sent to Shareholders in January 2026.
CHAIR'S STATEMENT
Dear Shareholders
On behalf of the Board, I am pleased to provide to you the Company's Annual
Report for the year ended 30 September 2025.
Life of the Company / Corporate Action Tender Offer
The financial year under review marked a significant event in the Company's
life with the Board focusing on the future of the Company as it approached its
fixed end of life. Shareholders will be aware of the requirement for the
Company to propose liquidation at the first AGM to be held after 1 March 2025
(ordinarily taking place in early 2026) and the Board's intention to bring
forward proposals for a corporate reorganisation ahead of this requirement, in
2025.
Such proposals were put to Shareholders via a Circular published on 22 October
2025, following extensive consultation with Shareholders in respect of the
Company's strategy and structure going forward, and included changes to the
Company's Articles of Association to remove the fixed end of life and extend
the Company's life indefinitely. Alongside this, the Company proposed a 100%
Tender Offer providing those Shareholders who no longer wished to remain
invested an opportunity to realise their investment, in whole or in part, at
the tender price.
Despite a difficult market backdrop and challenges faced by the investment
trust sector, only 22.47% of the issued share capital was tendered, meaning
nearly 80% remained invested. The Board was pleased that proposals were passed
by over 90% of the votes cast, at a General Meeting held on 27 November 2025.
The tender price was finalised at 425.61p being the NAV per share on 27
November 2025, less costs. In total, 27,253,026 shares, representing the
22.47%, were repurchased by the Company and placed into treasury.
Subsequent to the tender offer and repurchase of the shares, the Board was
further delighted to see some immediate demand, resulting in the reissuance of
525,000 shares out of treasury from those tendered, at an average price
418.65p per share.
Performance
The Company delivered strong relative performance for the year under review
with the Net Asset Value (NAV) per share total return outperforming its
benchmark, the MSCI ACWI Healthcare Index, Total Return by 1.95%. Despite the
negative absolute performance, we believe this was a strong outcome against a
particularly challenging period for US financial markets in the second half,
combined with the continuing negative sentiment towards the healthcare sector
for most of the year.
Against the performance of the investment trust sector in general, I am
delighted to report that the Company's discount narrowed slightly during the
year, ending the financial year at 3.93%. This is likely a result of the
recent tender offer as some Shareholders awaited the chance to exit at close
to NAV. We were also pleased that at the end of November 2025, the Company
entered the FTSE 250.
Further information about the Company's portfolio performance is covered by
our portfolio managers, James Douglas and Gareth Powell, in their Manager's
Report below.
Outlook
In the early months of the current financial year, sentiment appeared to have
improved for the healthcare sector, with some outperformance against the wider
market. As seen in the Manager's report, the portfolio managers remain
encouraged by the strong fundamentals of the healthcare industry, a view
underpinned by high levels of innovation. Demand for healthcare products
remains robust, whilst other long term drivers including industry
consolidation, accelerated demand in emerging markets and the adoption of
artificial intelligence technologies all support a strong foundation to drive
much needed efficiencies and better patient outcomes.
The Board will continue to monitor performance but remains very optimistic
about the outlook for the healthcare sector and the opportunities to generate
returns for shareholders, especially with the revised structure for which
Shareholders have given their support.
Further detail is provided in the Manager's Report.
Dividends
The Company's focus continues to remain on capital growth and consequently
dividends are expected to represent a relatively small part of Shareholders'
total return. The Company has a policy to pay two small dividends per year,
but it is recognised that these will not necessarily be of equal amounts and
may be reduced.
In August 2025, the Company paid an interim dividend of 1.20p per ordinary
share. The Board has declared a further interim dividend of 1.00p per ordinary
share payable to Shareholders on the register as at 6 February 2026. This will
bring the total dividend paid for the financial year under review to 2.20p per
ordinary share, an 8.3% decrease compared to the previous financial year.
Share Capital
The Company's share capital is divided into ordinary shares of 25p nominal
value each. At the year end, there were 124,149,256 ordinary shares in issue
(2024: 124,149,256), of which 2,879,256 (2024: 2,879,256) were held in
treasury by the Company. During the year to 30 September 2025, no new shares
were issued from or bought back into treasury.
As mentioned above, in substitution of the fixed end of life, tender offer
proposals were made to Shareholders in November 2025 as a result of which, the
Company bought back 27,253,026 ordinary shares, and these were placed into
treasury. Following this tender offer buyback, the Company's issued share
capital is 124,149,256, of which 30,132,282 were held in Treasury.
Subsequent to the tender offer process, 525,000 shares were reissued from
those purchased in the tender, resulting in an issued share capital of
124,149,256 of which 29,607,282 are held in treasury at 6 January 2026, the
latest practicable date.
The Company's share price on 30 September 2025 was 355.00p (2024: 376.00p).
The Company's market capitalisation at the financial year end was £430.5m
(2024: £456.0m).
The Board
As reported in the Company's Half Year Report, a recruitment process was
undertaken during the year under review to find and appoint two new
non-executive directors to join the Board, one of whom would assume the role
of Chair of the Audit Committee and succeed Neal Ransome. The process
culminated in the appointment of two new non-executive directors; Caroline
Gulliver as Audit Committee Chair Elect with effect from 15 May 2025 and
Stacey Parrinder-Johnson as non-executive Director with effect from 1 July
2025. Neal Ransome will step down as Chair of the Audit Committee on 26
February 2026 and will be succeeded by Caroline Gulliver; Neal Ransome will
remain on the Board until November 2026 to ensure a smooth and orderly
transition.
Following this recruitment process, the Board is conscious that it does not
meet the FCA's ethnicity recommendations; however, it believes it has followed
a stringent recruitment process and appointed appropriate candidates with the
requisite skillsets required of the wider Board. The Board will consider
diversity at all stages of future recruitment to the Board and will work hard
to ensure the broadest range of candidates are found when recruiting new
directors.
Since the year-end our board apprentice, Ei-Lene Heng, has completed her time
with us. We wish Ei-Lene all the best with her future endeavours.
The Directors' biographical details are available on the Company's website and
are provided in the Annual Report.
Annual General Meeting
The Company's Annual General Meeting ("AGM") will be held at 16 Palace Street, London, SW1E 5JD at 2:00pm on Thursday, 26 February 2026. The notice of AGM has been provided to Shareholders and will also be available on the Company's website. Detailed explanations of the formal business and the resolutions to be proposed at the AGM are contained within the Shareholder Information section of the Annual Report and in the Notice of AGM. We will once again upload a copy of the Manager's Investment Presentation to the Company's website ahead of the AGM to allow broader access, and as a result will only hold the formal business meeting in person. The Managers will be available at the AGM to answer questions and meet shareholders present.
We have provided a zoom link in the Notice of AGM which will enable anyone interested to view the formal business and ask questions via the on-line chat function. All formal business resolutions will be voted on by a poll, and we therefore encourage shareholders to submit their votes ahead of the meeting by proxy card which is provided with the Notice of Meeting.
Lisa Arnold
Chair
13 January 2026
INVESTMENT MANAGER'S REPORT - FOR THE YEAR ENDED 30 SEPTEMBER 2025
Over the financial year to 30 September 2025, the Company delivered a Net
Asset Value (NAV) per share total return of -5.86%, a 1.95% outperformance of
its benchmark, the MSCI ACWI Healthcare Index, Total Return. The absolute
performance of the healthcare sector was negative, -7.81% over the reporting
period, and it underperformed the broader market, as tracked by the MSCI All
Country World Net Total Return Index, which was up 16.84% (all figures in
sterling terms).
The Company's diversification strategy, coupled with its focus on
large-capitalisation healthcare companies with robust, medium-term growth
outlooks, helps generate a risk/return profile of the underlying assets which
is favourable relative to the more volatile areas of healthcare. Further, the
broad investment remit affords the opportunity to invest in growth areas
regardless of the economic, political and regulatory environment.
Importantly, the Company can also invest in earlier-stage, more innovative and
disruptive companies that tend to be lower down the market-capitalisation and
liquidity scales. This is a key advantage of the Company's closed-end
structure. Regardless of size, subsector or geography, stock selection is
central to the investment process as we look to identify companies where there
is a disconnect between valuations and the near and medium-term growth
drivers.
Market Capitalisation i (#_edn1)
Importantly, the Company can also invest in earlier-stage, more innovative and
disruptive companies that tend to be lower down the market-capitalisation and
liquidity scales. This is a key advantage of the Company's closed-end
structure. Regardless of size, subsector or geography, stock selection is
central to the investment process as we look to identify companies where there
is a disconnect between valuations and the near and medium-term growth
drivers.
Market Capitalisation
Market Cap at 30 September 2025 30 September 2024
Mega Cap (> US$100bn) 25.9% 37.5%
Large Cap (US$10bn - US$100bn) 48.8% 38.7%
Mid Cap (US$5bn - US$10bn) 18.0% 15.3%
Small Cap (< US$5bn) 5.4% 7.5%
Cash 1.9% 1.0%
Total 100.0% 100.0%
Source: Polar Capital.
In terms of structure, the majority of the Company's assets (calculated on a
gross basis and referred to as the Growth portfolio) will be invested in
companies with a market cap of >$5bn at the time of investment, with the
balance invested in companies with a market cap <$5bn (a maximum of 20% of
gross assets and referred to as the Innovation portfolio).
At the end of the reporting period, 30 companies in the portfolio were in the
Growth portfolio (92.7% of gross assets) and 4 were in the Innovation
portfolio (5.4%).
Global equity markets were rather lacklustre during the first six months of
the Company's financial year, posting modest gains. As we entered the second
half of the financial year, there was a sharp market correction in April 2025
caused by the tariffs proposed by the US administration. Thankfully, the
correction was short-lived and the sell-off was quickly followed by a strong
recovery as the US administration walked back from its initial position. Since
then, the broader market has posted strong returns, driven by ongoing
excitement surrounding artificial intelligence (AI) and the expectation of
future Federal Reserve (Fed) interest rate cuts. This enthusiasm for AI and
the sectors exposed to the AI theme, alongside healthcare sector-specific
policy fears, have been the key drivers behind the healthcare sector's recent
relative underperformance versus the broader market.
The healthcare sector had a challenging year across almost the entire
market-cap spectrum as investors' preference was directed towards more
cyclical areas of the market. Looking at the subsectors, most posted negative
returns over the period under review, with the exception of distributors and
healthcare services given their relative immunity to macroeconomic challenges,
such as tariffs, as well as healthcare-specific challenges, namely the threat
of a less favourable drug pricing environment.
Reflecting on the Company's positive relative performance, there was strong
selection from large-cap ($10bn-100bn) and mid-cap stocks ($5bn-10bn),
partially offset by negative allocation and stock-picking from mega-caps
(>$100bn). In terms of subsectors, pharmaceuticals, healthcare services and
managed care were the biggest contributors with both allocation and selection
positive. By contrast, healthcare facilities, healthcare technology and
healthcare supplies were a drag on performance due to unfavourable stock
selection.
As set out in last year's annual report, the focus was on three key investment
themes:
· Access and affordability: Low-cost, high-quality medicines allow
expanded access, with a new wave of biosimilars (which are generics of
biotechnology products) set to deliver much-needed savings
· Reimbursement of AI/machine learning (AI/ML)- enabled technologies:
Investment and innovation are accelerating; the next steps are broader
reimbursement and wider utilisation
· China: After a challenging period, China should now be a recovery
story driven by significant government stimuli
The themes summarised above will continue to be relevant in the current
financial year 2025/26, especially as reimbursement and access improves and
the industry invests in and adopts AI/ML-enabled technologies that could drive
greater efficiencies and better patient outcomes. In terms of emerging
markets, China remains an important source of revenues for the industry, but
healthcare services across the broader emerging market landscape could offer
more exciting, near-term investment opportunities.
We explore these themes in more detail below, in the 'Healthcare: The tide is
turning' section.
Performance review
The healthcare sector underperformed the broader market during the financial
year, with global equities staging a strong rally in the latter part of this
period, a rally which the healthcare sector lagged due to policy overhangs.
Donald Trump's presidential election victory in November 2024 initially sent
stocks higher, since his agenda had been viewed as pro-growth, promising to
cut taxes, roll out extensive deregulation measures and impose tariffs on
imports to support American businesses. The latter took centre stage in March
and April 2025, when Trump finally announced the intention to levy substantial
tariffs on most US trading partners. The market reacted with a dramatic
sell-off as investors tried to digest the consequences of this trading policy,
fearing in particular that inflation would spike and economic growth would
slow. The fall in equities, while significant, was short-lived as the tariff
rhetoric de-escalated rapidly, with the US Government either postponing the
implementation of tariffs, substantially reducing their levels, or signing
trade deals with various countries.
The strong performance of global markets that followed the brief slump was
driven by both a more resilient macroeconomic environment and also investors'
enthusiasm for a nascent AI 'super-cycle'. Not dissimilar to the previous
financial year, the market was catapulted higher by more economically
sensitive sectors, such as information technology, communication services,
financials and consumer discretionary while traditionally less risky sectors
were neglected, with healthcare the worst performer. The sector's
underperformance reflected a combination of cyclical rotation and
sector-specific challenges, which we explore in greater detail in the 'US
politics: More bark than bite?' section.
From a subsector perspective, pharmaceuticals and healthcare services were the
strongest contributors to the Company's relative performance, supported by
positive stock selection and, to a lesser extent, favourable allocation.
Managed healthcare, healthcare distributors, biotechnology and healthcare
equipment also contributed positively, mainly driven by positive stock
selection in the latter three and strong allocation within managed care.
Conversely, stock selection within healthcare technology, supplies, and life
sciences tools and services was negative, although allocation in these areas
remained positive. Disappointing selection and a modest negative allocation
effect within healthcare facilities made this subsector the largest detractor
from overall performance.
From a market-capitalisation point of view, the two opposite sides of the
spectrum had the largest negative impact to attribution: mega-cap investment
suffered from adverse stock-picking, and both allocation and selection were
negative for small-cap stocks. However, the underperformance in those
market-cap bands was offset by very strong selection in the large and mid-cap
holdings, despite a challenging allocation effect, particularly in the mid-cap
range.
On a geographical basis, Europe was the main contributor, mainly due to highly
positive stock selection. Japan and Asia ex-Japan detracted from performance
as both allocation and stock-picking were negative. Finally, unfavourable
stock selection in North America represented the largest drag on returns.
Top 10 Relative Contributors (%)
Average Active Stock Stock Total
Stock Weight Return Return Attribution
Top 10 Weight vs BM
UCB 3.73 3.41 52.34 60.15 1.71
Merus NV 1.89 1.89 87.65 95.46 1.68
Fresenius SE & Co KGaA 3.04 2.80 48.10 55.91 1.29
Sandoz Group AG 2.58 2.32 41.52 49.33 1.01
Insulet 2.51 2.26 32.08 39.89 0.97
Genmab A/S 0.94 0.76 24.77 32.58 0.91
Argenx 2.28 1.79 33.48 41.28 0.85
Uniphar 1.22 1.22 59.14 66.95 0.67
Penumbra 2.01 2.01 29.82 37.62 0.62
Stevanato Group SpA 1.72 1.72 28.20 36.01 0.60
Source: Polar Capital; September 2025
Belgian pharmaceutical company UCB saw its stock price appreciate considerably
in the past 12 months thanks to the continued impressive launch of its main
drug Bimzelx. Initially approved for psoriasis and psoriatic arthritis, the
drug's rapid uptake in the US for hidradenitis suppurativa (HS) - a painful
skin disease with limited therapeutic options - has been a major driver of
sales growth. In addition, UCB reported early and encouraging data for two
autoimmune pipeline assets and benefited from a competitor's disappointing
results for a drug that could have rivalled Bimzelx in the HS market.
Merus is a Dutch biotechnology company focusing on therapies in oncology. Its
strong share price performance reflected progress in developing its key
pipeline asset, petosemtamab, for head and neck cancer. The asset received
Breakthrough Therapy Designation from the US Food and Drug Administration
(FDA) in early 2025, with the company also releasing highly promising Phase 2
clinical data. This series of positive developments culminated in a takeover
bid from Genmab, valuing the company at approximately $8bn.
Fresenius SE is a German services company that operates two segments: Helios
(a hospital group in Europe) and Kabi (specialising in essential medicines,
including generics and biosimilars, and technologies for infusion/transfusion
and medical nutrition). The company has undergone a significant transformation
in recent years. Following the divestment of a low-growth and margin-dilutive
business and the implementation of a series of initiatives aimed at
reinvigorating the business, Fresenius SE's financial performance has
improved, with consistently strong quarterly results being testament to the
successful turnaround. Investors were also enthused by the company's
commitment to reduce leverage and the initiation of a dividend payment.
Additionally, the stock may have benefited from being considered less
vulnerable to policy-induced disruptions.
Similar to Fresenius SE, Sandoz Group, a global leader in generic and
biosimilar medicines, is deemed as fairly insulated from specific challenges
that have been weighing on other pharmaceutical shares, namely tariffs and
drug-pricing reforms. This defensive quality together with strong execution
throughout the period under review saw the stock substantially outperform the
broader healthcare sector.
Insulet is a US-based equipment manufacturer specialising in automated
insulin-delivery systems (also known as insulin pumps). Its flagship product,
the OmniPod 5, a tubeless, wearable on-body pump with a compact design, had an
exceptionally successful launch. Expansion of its indication to include Type 2
insulin-intensive patients in the US further
supported strong adoption, leading Insulet to deliver financial results well
ahead of expectations in terms of sales and margin expansion.
Bottom 10 Relative Contributors (%)
Average Active Stock Stock Total
Stock Weight Return Return Attribution
Bottom 10 Weight vs BM
AbbVie 1.46 -2.95 16.75 24.56 -1.33
Johnson & Johnson 0.00 -4.98 13.93 21.74 -1.12
Bruker Corp 1.70 1.70 -53.00 -45.19 -1.03
Vaxcyte 1.50 1.50 -68.61 -60.80 -0.92
Zealand Pharma A/S 2.46 2.41 -40.52 -32.72 -0.88
Acadia Healthcare 0.60 0.60 -61.12 -53.31 -0.82
Globus Medical 1.03 1.03 -20.29 -12.48 -0.82
Amvis Holdings 0.27 0.27 -69.85 -62.04 -0.77
Novo Nordisk A/S 4.36 1.05 -53.30 -45.49 -0.54
Medley 1.59 1.59 -38.59 -30.78 -0.53
Source: Polar Capital; September 2025
The Company held AbbVie, a US biopharmaceutical giant, for most of the first
four months of the year under review. Its negative attribution impact was
primarily a matter of timing as the position was sold shortly before the
company released a robust set of financial year (FY) 2024 results and issued
encouraging FY2025 financial guidance. AbbVie continued to execute well
thereafter and the stock appreciated significantly following the announcement
of a settlement with generic manufacturers, which effectively protects Rinvoq,
a drug for autoimmune diseases and one of its key growth drivers, from generic
competition well into the next decade.
The absence of exposure to Johnson & Johnson (J&J), a leading global
pharmaceutical and medical technology company, was a notable detractor during
the financial year. The catalyst for the stock's strong upward trajectory was
an impressive set of Q2 results: not only did J&J deliver ahead of
expectations, but it also confirmed an acceleration in growth for the second
half of 2025 and into 2026, despite facing biosimilar competition for one of
its biggest assets. Given its relatively low valuation, diversified portfolio
and resilient business model, the onset of a potential positive earnings
revision cycle led to a meaningful rerating of the stock.
Life sciences tools and services company Bruker suffered from a series of
challenges in the past 12 months. The fundamental backdrop for several of its
main markets deteriorated significantly: biopharmaceutical customers curtailed
spending amid heightened policy uncertainty; academic and government-funded
research activity was disrupted by proposed budget cuts to the National
Institutes of Health (NIH, one of the main sources of research funding in the
US); and the Chinese economy continued to struggle to regain momentum. Adding
these issues to poor commercial execution and a series of dilutive M&A
(merger and acquisition) deals weighing on the company's balance sheet meant
that Bruker's stock price more than halved during the year.
Vaxcyte is a pre-commercial biotechnology company that has a rich pipeline of
vaccine candidates, with two pneumococcal vaccines (PCV) furthest ahead in the
development stage. Despite showing good results for its 31-valent PCV
candidate in adults, the stock struggled for a few reasons. First, the
nomination of Robert F Kennedy (RFK) Jr as US Secretary of Health and Human
Services (HHS) was seen as a clear negative for vaccine stocks. Given his
public anti-vaccination views, investors feared that future approvals of
vaccines could be hampered by the new administration. Second, Vaxcyte
presented Phase 2 data for its 24-valent PCV candidate in infants, which fell
short of expectations. Finally, the company also pushed out the timeline for
the data readout for its 31-valent PCV Phase 2 trial in infants. Despite these
setbacks, there remains a substantial unmet clinical need in this area and we
believe there is still a credible development path for both of Vaxcyte's lead
assets.
Zealand Pharma, which has been a strong contributor to performance in prior
years specialises in developing peptide- based drugs focusing particularly on
metabolic disorders, underperformed during the period despite announcing a
highly favourable collaboration and licensing agreement with Roche to
co-develop and co-commercialise petrelintide (an amylin analogue for weight
loss) for a total consideration of up to $5.3bn. Several factors contributed
to the stock's weakness: profit-taking following strong performance; broad-
based weakness in early-stage and small-cap biotechnology stocks;
disappointing trial results from competitor Novo Nordisk, which combined an
amylin analogue with semaglutide; and strong competitor data (in particular
from Ely Lilly). We remain optimistic about the company's pipeline and the
overall opportunity for anti-obesity medications.
Healthcare: The tide is turning
We continue to believe the three key themes referenced earlier are important
long-term themes and will persist for some time, especially 'access and
affordability' which are essential for commercial success and societal
wellbeing. Also, the continued adoption of AI/ML-enabled technologies should
drive much-needed efficiencies and potentially yield better patient outcomes.
As mentioned previously, China remains an important long- term driver for many
healthcare subsectors, especially in the life sciences tools and services
sector, but unfortunately the near-term remains challenging, with Government
stimulus packages struggling to have a noticeably positive impact. It is the
broader emerging market landscape, however, that could be of greater interest
and significance in the near-term. More specifically, the opportunities in
terms of facilities and services are already showing outsized investment and
growth compared to relevant developed market companies in the same subsectors.
Access and affordability: Generic medicines save money
Generic drugs are highly unusual in that they are one of the few, if not the
only, part of the US healthcare system that consistently results in decreased
spending. Since 2019, the amount spent on all generic sales in the US has
declined by $6.4bn, despite increased volumes and new generic launches. With
drug pricing such an emotive topic, especially in the US, it is interesting to
note that for the past decade generics account for approximately 90% of
prescriptions filled in the US, and yet their contribution to overall costs
has declined from 27% in 2016 to 12% in 2024. In that same year, the use of
generics saved $142bn in Medicare and $62bn in Medicaid. Ongoing investment
and legislative support are critical to ensure the sustainability of the
generics industry given it is such a critical part of the healthcare
ecosystem.
Biosimilars are another important ingredient in the journey to generating much
needed savings and to improving access and affordability. It is estimated that
the total savings in the US since the first biosimilar launched in 2015 are
more than
$56bn, with approximately $20bn of savings in 2024 alone. Further, over the
next decade, 118 biologics are expected to lose patent exclusivity, presenting
a $234bn opportunity for biosimilars. The biosimilar story in Europe is not
too different, albeit the European market is more developed. As at October
2024, over 80 biosimilars have been approved by the European Medicines Agency
(EMA), generating cumulative savings of €56bn from 2014-24.
These are impressive figures yet there is much to do to ensure the value of
biosimilars reaches its full potential. A complex web of systemic barriers,
including issues related to pricing and reimbursement, legal challenges and
outdated regulatory requirements, continue to hinder the development and the
broader adoption of biosimilars once they reach the market. In the US, for
example, of the 118 biologics expected to lose patent exclusivity over the
next decade, only 12 molecules have a biosimilar in development. Looking at
the European market, between 2024 and 2030 a total of 69 biologics are
expected to lose exclusivity (LoE), which represents a two-fold increase
compared to the previous seven years. However, despite the record numbers of
upcoming biologic LoEs, at present only 29% of molecules have a biosimilar
currently in development.
What is being done to fill the biosimilar void? Legal challenges aside, there
has been a push for some time to accept analytical techniques and clinical
pharmacology to ensure the safety and efficacy of biosimilars. If widely
adopted, such a move could negate the need for expensive and time-consuming
efficacy studies, streamline regulatory processes and lower the barriers to
entry for manufacturers. All of these are potentially huge positives, not just
for the companies that develop and commercialise biosimilars, but also for the
wider adoption of low-cost medicines and the subsequent cost savings for
global healthcare systems.
Relevant investments include Fresenius SE, Lonza Group, Sandoz Group, Torrent
Pharmaceuticals and Teva Pharmaceutical Industries.
Reimbursement of AI/ML-enabled technologies: Critical to broader utilisation.
In last year's annual report, we touched on the idea that AI and ML
technologies are increasingly driving productivity and efficiency across the
healthcare sector. Applications include automating hospital coding, billing
and revenue cycle management as well as reducing administrative burdens and
improving fraud detection. In diagnostics, AI/ML technologies are starting to
show measurable benefits in procedures such as colonoscopies and ultrasounds.
Programmes like the Enhanced Breast Cancer Detection (EBCD) system show how AI
can aid early cancer detection and improve outcomes, although reimbursement
restrictions are limiting access.
Encouragingly, in the past 12 months there has been tangible progress with
access to these technologies, but also some very interesting developments at
the FDA, which could accelerate review times for new therapies. In July 2025,
US-based diagnostic imaging services company RadNet announced that Regal
Medical Group, Lakeside Community Healthcare and ADOC Medical Group,
affiliates of Heritage Provider Network, one of the largest physician-owned
medical groups in Southern California, have agreed to reimburse RadNet for its
EBCD program, which will now be included as a benefit in their members' health
plans. These medical groups will provide the AI-powered breast cancer
detection service to all of their mammogram-eligible patients. This is a
significant step forward for the technology and a clear indication of traction
with commercial payers.
In June 2025, the FDA launched Elsa, a potentially game- changing generative
AI tool that is designed to help staff with tasks such as reading, writing,
summarising and analysing clinical data. Elsa is already being used to
accelerate clinical protocol reviews, scientific evaluations and safety
assessments with the goal of significantly shortening regulatory review times.
The initiative follows Commissioner Dr Martin A Makary's directive for full AI
integration across all FDA centres, reflecting the agency's broader strategy
to reduce administrative workload and improve efficiency. The launch aligns
with the FDA's growing commitment to AI adoption and signals a shift towards
embedding AI within its own operations to modernise and expedite drug and
device approvals. It is a really exciting development as the implications of
accelerated review times could be hugely significant for biopharmaceutical
companies and patients alike.
Relevant investments include RadNet.
Emerging markets: Services represent an under-appreciated opportunity
More than 80% of the world's population live in emerging markets where life
expectancy has improved from 58 to 73 years of age over the past 50 years.
This longevity is coming with increasing incidences of lifestyle diseases and
an accelerating demand for healthcare products and services. Importantly,
personal incomes are increasing, which is key to driving demand in markets
where the majority of costs are covered out-of-pocket. Access is also
improving, with governments starting to invest in infrastructure and to
provide affordable healthcare plans for their citizens.
Catalysts for change are hard to pinpoint, but the pandemic did shine a light
on the shortcomings of healthcare systems in a number of emerging markets. One
measure of inadequacy might be the average number of hospital beds per capita
which in places like India is highly inadequate. The country currently has
just 0.79 government hospital beds per 1,000 people, or 1.3 beds including
private hospitals, figures that are way below the global average of 2.7 beds
per 1,000. In response, both the government and the private sector are
investing in infrastructure and expansion programs that will fuel growth for
some time to come. The Indian government has set aside $11.4bn for healthcare
investment for 2025-26, with just over $580m earmarked for 30,000 critical
care beds and 200 cancer daycare centres. At the same time, the private sector
is also looking to add 30,000 beds over the next five years, additions that
could drive compound annual growth in the mid-teens over this period.
In terms of access, a number of schemes have been in place for some time, with
some genuine success stories that could offer a blueprint for others to
follow. Take Indonesia, for example, a country that back in 2014 faced a
critical healthcare crisis given that less than half the population was
financially protected and out-of-pocket costs were unaffordably high for many.
To address this, the government launched a national insurance scheme, Jaminan
Kesehatan Nasional (JKN), with the goal of universal healthcare coverage. The
JKN scheme saw remarkable expansion, covering over 260 million people or more
than 95% of the population, by the end of 2023. This transformed Indonesia's
healthcare landscape, reducing financial barriers to healthcare and lowering
out-of-pocket expenses. Furthermore, catastrophic health expenditure rates
dropped from 4.5% in 2017 to 2% in 2021, further easing the healthcare
financial burden on households. If more governments follow suit, then the
volume of patients that can access care will provide a very healthy growth
runway for many years to come.
Relevant investments include Apollo Hospitals Enterprise and Torrent
Pharmaceuticals.
US politics: More bark than bite?
The Trump administration's early months brought considerable uncertainty and
volatility to the broader markets, which escalated after the declaration of a
national emergency over foreign trade and the threat of a global tariff war.
Beyond trade, the administration's actions and the Department of Government
Efficiency's (DOGE) initiatives raised fears over the functioning of multiple
federal health agencies including the FDA, the NIH and the CDC (Centers for
Disease Control and Prevention). All provide vital services to the US
healthcare system, but it was uncertainty at the FDA that caused the greatest
short-term concern for the biopharmaceuticals industry. Last, but not least,
President Trump's determination to equalise global drug pricing using 'most
favoured nation' (MFN) status, coupled with the fear of tariffs, created a
significant overhang for the sector.
Thankfully, as the financial year progressed, many of the biggest fears with
regards to policy risk started to dissipate. Starting with the FDA, the agency
had approved 32 novel drugs by the end of September 2025, a figure that is
comparable to the 34 that had been approved during the first nine months of
2024. Add in the exciting AI initiatives and there is a school of thought that
this FDA is potentially more progressive and dynamic than many previous
iterations.
There was also tangible progress made on the drug pricing front. It is
bespoke, so caveats apply, but the deal that Pfizer has agreed with the US
government is clear evidence that the biopharmaceutical industry can broker
deals that protect them from worst-case scenarios. As a reminder, on 30
September 2025, Pfizer announced an agreement whereby it will provide every
State Medicaid programme access to MFN drug prices. Interestingly, the company
also agreed to a three-year grace period during which time its products will
not face tariffs, provided the company continues to invest in its US
manufacturing footprint. While not a clearing event, the update was the
catalyst for a sharp rally in biotechnology and pharmaceutical stocks, with
the market appearing to take the view that the more draconian features of the
US government's plans for the biopharmaceuticals sector can be circumnavigated
with carefully crafted agreements.
Positioning and process
The Company began the financial year with significant exposure to the
biotechnology sector alongside a positive tilt towards healthcare supplies,
facilities, technology and life sciences tools and services. The biggest
underweight was in the pharmaceuticals sector, with smaller underweights in
healthcare equipment and managed care.
As the year progressed, it became apparent that the higher levels of
healthcare utilisation that characterised much of 2023 and 2024 would be
sustainable, at least in the nearer term. Accordingly, we increased exposure
to medical equipment stocks, focusing on companies trading at reasonable
valuations that were either going through new product cycles or whose sales
growth and earnings potential were undervalued by the market. We also added
exposure to healthcare facilities and services, sectors that should benefit
from the elevated utilisation trend.
Consistent with our view that utilisation would remain above historical
averages, we maintained an underweight in managed care. The healthcare
insurance industry's earning power has been significantly dented by increased
medical costs; initially confined to Medicare, the higher cost trends have
spread to Medicaid and the subsidised commercial healthcare insurance plans
('exchanges'). The sector came under further pressure due to proposed policy
changes, ranging from the sunset of enhanced subsidies in the exchanges to
greater scrutiny of the role of pharmacy benefit managers and cuts to Medicaid
funding. As such, it remains to be seen whether the insurers will be able to
price their plans accurately to account for higher utilisation and
policy-induced disruptions, and we prefer to stay underweight in the sector
for now.
The Company's exposure to healthcare supplies decreased substantially during
the period under review. The supplies industry is dominated by dental and
ophthalmology businesses which are more sensitive to the health of the
consumer. Against a backdrop of heightened geopolitical uncertainty and a less
favourable macroeconomic outlook, global consumer confidence weakened, leading
to disappointing sales results and outlooks across several healthcare supplies
companies. Consequently, we remain underexposed to the sector.
The Company also adopted a more cautious stance on life sciences tools and
services, a subsector that has faced multiple headwinds in recent years. These
include depressed funding for emerging biotechnology companies; muted
replacement cycles for laboratory equipment; a more conservative approach to
R&D (research and development) spending among larger biopharmaceutical
firms, owing largely to policy overhangs; and weak demand from China.
Furthermore, as noted earlier, the academic and government-funded research
sector, which had proved relatively resilient, was severely impacted when the
US administration proposed cuts to the NIH budget in May. The ensuing
disruption caused temporary paralysis in research spending which only began to
ease by late summer. Although we remain confident in the long-term structural
fundamentals of the life sciences tools and services sector, we prefer to
maintain a cautious underweight positioning until there is greater visibility
and evidence of recovery.
Throughout the financial year, the Company was underweight in pharmaceuticals
relative to the benchmark and, for the most part, overweight in biotechnology.
Variations in the magnitude of these relative positions were primarily stock-
specific, with innovation and new product cycles central to portfolio
construction. While pharmaceutical companies generally exhibit mature revenue
and earnings profiles, recent breakthroughs across several therapeutic areas
have begun to reshape the investment landscape. These advances not only
address significant unmet medical needs but also create attractive commercial
opportunities, offering the potential for strong revenue and earnings growth,
even in an environment of heightened policy uncertainty.
Geographical Exposure at 30 September 2025 30 September 2024
United States 53.3% 46.2%
Denmark 13.7% 8.7%
United Kingdom 6.1% 2.5%
Switzerland 5.2% 12.6%
India 4.6% -
Belgium 3.8% 2.8%
Israel 3.3% -
Germany 2.8% 3.3%
Netherlands 2.5% 3.9%
Other net assets 1.9% 1.0%
Ireland 1.7% 3.4%
Japan 1.1% 6.1%
France - 6.0%
Sweden - 2.1%
Italy - 1.4%
Total 100.0% 100.0%
Source: Polar Capital, September 2025
Sector Exposure at 30 September 2025 30 September 2024
Pharmaceuticals 31.1% 28.0%
Healthcare Equipment 24.4% 14.3%
Biotechnology 21.1% 20.5%
Healthcare Services 5.4% 3.3%
Life Sciences Tools & Services 5.3% 10.8%
Healthcare Facilities 4.9% 3.5%
Managed Healthcare 3.1% 7.7%
Other net assets 1.9% 1.0%
Healthcare Distributors 1.7% 0.9%
Healthcare Technology 1.1% 2.3%
Healthcare Supplies - 5.4%
Metal & Glass Containers - 2.3%
Total 100.0% 100.0%
Source: Polar Capital; September 2025
From a geographical perspective, the most significant portfolio changes during
the period were a substantial reduction in the Company's European and Japanese
weightings, offset by an increased allocation to North America. In addition,
the Company narrowed its underweight position in the Asia Pacific (ex-Japan)
region by adding exposure to India. These shifts in regional positioning
primarily reflected the outcomes of bottom-up stock selection and adjustments
in subsector allocations.
The weighting in small-cap stocks (<$5bn) also declined compared with the
start of the financial year. This reduction was driven both by a preference
for selected investments within the Growth portfolio and by market cap
increases among existing holdings, with some investee companies rising above
the $5bn threshold.
While the preceding tables highlight the portfolio's subsector and
geographical exposures, it is important to reiterate that bottom-up stock
selection remains central to our investment approach. The healthcare industry
is inherently complex and dynamic, characterised by constant innovation,
frequent regulatory developments and highly variable news flow - conditions
that favour active management. Our strategy seeks to exploit dislocations
between near-term valuations and medium-term fundamentals. Proprietary idea
generation forms the foundation of our process and is complemented by external
research, with investment conviction built through direct company meetings,
participation in industry and investor conferences and regular consultations
with expert physicians and specialist advisers. The team maintains a
disciplined valuation framework, considering a comprehensive range of
financial and operational metrics, including sales and earnings revisions,
price-to-earnings ratios, enterprise values and free cashflow generation. This
rigorous, research-driven approach ensures that capital is deployed into
businesses where we see the most compelling risk-adjusted return potential
over the medium to long term.
Outlook for healthcare: At an inflection point
The past 12 months have undoubtedly been very challenging for the healthcare
sector and its investors, but there is high conviction that the ingredients
for a period of attractive absolute and relative performance are in place. The
fundamentals of the industry remain strong, driven by an innovation engine
that is bearing fruit, elevated levels of demand for products and services and
the adoption of AI-enabled technologies to drive much-needed efficiencies. Of
equal importance from an investment perspective, the gloom surrounding
healthcare policy in the US is starting to dissipate, offering welcome relief.
With regards to innovation, 2025 has seen some remarkable scientific
breakthroughs in areas of high unmet medical need such as cardiovascular
disease, oncology and rare muscular diseases. Outside therapeutics, the
medical devices industry continues to make progress with robotic surgery and
equipment designed to remove blood clots, treat hypertension and monitor
diseases such as diabetes and irregular heart rhythm. As mentioned above, the
demand to access healthcare products and services remains buoyant, especially
in emerging markets where government funding and support are offering
protection to millions of people. The healthcare sector is also benefitting
from the adoption of AI-enabled technologies designed to drive efficiencies
and, in some cases, better patient outcomes.
With policy fears in the US appearing to ease, and the key regulatory bodies
such as the FDA functioning as normal, the outlook for healthcare investing
feels much brighter now than it has for some time. With the sector at a
25-year low in terms of its S&P 500 weighting, and carrying attractive
relative valuations, the outlook for delivering positive returns for our
shareholders is extremely compelling.
James Douglas and Gareth Powell
Portfolio Managers of the Polar Capital Global Healthcare Trust plc
13 January 2026
1 The value of a listed company's shares owned by shareholders; market
capitalisation (cap) is the price per share multiplied by the number of shares
PORTFOLIO REVIEW
Full Investment Portfolio
As at 30 September 2025
Stock Sector Country Market Value % of total net assets
£'000
Eli Lilly Pharmaceuticals United States 31,895 7.1%
AstraZeneca Pharmaceuticals United Kingdom 27,165 6.1%
Abbott Laboratories Healthcare Equipment United States 22,202 4.9%
UCB Pharmaceuticals Belgium 17,056 3.8%
Genmab Biotechnology Denmark 16,092 3.6%
Thermo Fisher Scientific Life Sciences Tools & Services United States 15,438 3.4%
Teva Pharmaceutical Industries Pharmaceuticals Israel 14,797 3.3%
Sandoz Pharmaceuticals Switzerland 14,759 3.3%
Exact Sciences Biotechnology United States 14,147 3.2%
Edwards Lifesciences Healthcare Equipment United States 13,834 3.1%
Top 10 investments 187,385 41.8%
Centene Managed Healthcare United States 13,830 3.1%
STERIS Healthcare Equipment United States 13,815 3.1%
Penumbra Healthcare Equipment United States 12,851 2.9%
Ascendis Pharma Biotechnology Denmark 12,785 2.9%
Fresenius SE Healthcare Services Germany 12,725 2.8%
H Lundbeck Pharmaceuticals Denmark 12,561 2.8%
Encompass Health Healthcare Facilities United States 12,174 2.7%
Avidity Biosciences Biotechnology United States 11,882 2.6%
RadNet Healthcare Services United States 11,815 2.6%
DexCom Healthcare Equipment United States 11,579 2.6%
Top 20 investments 313,402 69.9%
Argenx Biotechnology Netherlands 11,269 2.5%
iRhythm Technologies Healthcare Equipment United States 11,007 2.5%
Cytokinetics Biotechnology United States 10,939 2.4%
Torrent Pharmaceuticals Pharmaceuticals India 10,744 2.4%
Novo Nordisk Pharmaceuticals Denmark 10,289 2.3%
Insulet Healthcare Equipment United States 10,211 2.3%
Apollo Hospitals Enterprise Healthcare Facilities India 10,061 2.2%
Zealand Pharma Biotechnology Denmark 9,629 2.1%
Intuitive Surgical Healthcare Equipment United States 9,038 2.1%
Lonza Life Sciences Tools & Services Switzerland 8,655 1.9%
Top 30 investments 415,244 92.6%
Vaxcyte Biotechnology United States 7,903 1.8%
Uniphar Healthcare Distributors Ireland 7,384 1.7%
Medley Healthcare Technology Japan 5,019 1.1%
NeuroPace Healthcare Equipment United States 3,885 0.9%
Total equities 439,435 98.1%
Other net assets 8,675 1.9%
Net assets 448,110 100.0%
STRATEGIC REPORT
The Strategic Report section of this Annual Report comprises the Chair's
Statement, the Investment Manager's Report, including information on the
portfolio, and this Strategic Report. This Report has been prepared to provide
information to shareholders on the Company's strategy and the potential for
this strategy to succeed, including a fair review of the Company's performance
during the year ended 30 September 2025, the position of the Company at the
year end and a description of the principal risks and uncertainties, including
both economic and business risk factors underlying any such forward-looking
information.
Business Model and Regulatory Arrangements
The Company's business model follows that of an externally managed investment
trust and its investment objective is set out below.
The Company is designated an Alternative Investment Fund ('AIF') under the
Alternative Investment Fund Management Directive ('AIFMD'). As required by the
Directive, the Company has contracted with Polar Capital LLP ('Polar Capital'
or 'Investment Manager'), which is authorised and regulated by the Financial
Conduct Authority, to act as the Alternative Investment Fund Manager ('AIFM')
and HSBC Bank Plc to act as the Depositary.
Both the AIFM and the Depositary have responsibilities under AIFMD for
ensuring that the assets of the Company are managed in accordance with the
investment policy and are held in safe custody. The Board remains responsible
for setting the investment strategy and operational guidelines as well as
meeting the requirements of the Financial Conduct Authority ('FCA') Listing
Rules and the Companies Act 2006.
The AIFMD requires certain information to be made available to investors in
AIFs before they invest and requires that material changes to this information
be disclosed in the Annual Report of each AIF. Investor Disclosure Documents,
which set out information on the Company's investment strategy and policies,
gearing, risk, liquidity, administration, management, fees, conflicts of
interest and other Shareholder information are available on the Company's
website.
There have been no material changes to the information requiring disclosure.
Any information requiring immediate disclosure pursuant to the AIFMD will be
disclosed to the London Stock Exchange. Statements from the Depositary and the
AIFM can be found on the Company's website.
Investment Objective and Policy
The Company's Investment Objective is to generate capital growth through
investments in a global portfolio of healthcare stocks.
The Company will seek to achieve its objective by investing in a diversified
global portfolio consisting primarily of listed equities. The portfolio is
diversified by geography, industry subsector and investment size, with a
multi-capitalisation approach. It is expected that the majority of assets will
remain invested in large capitalisation companies with up to 30 per cent. of
the portfolio invested in small/mid capitalisation companies with a market
capitalisation below $10 billion at the time of investment.
The portfolio will be made up of interests in up to 65 companies, with no
single investment accounting for more than 10% (or 15% in the case of an
investment in another fund managed by the Investment Manager) of the Gross
Assets at the time of investment. The Company may have a small exposure to
stocks which are neither quoted nor listed on any stock exchange but the
exposure to such stocks, in aggregate, will not exceed 5% of Gross Assets at
the time of investment. In the event that the Investment Manager launches a
dedicated healthcare innovation fund, the Company may invest in that fund,
provided that, in any event, the Company will not, without the prior consent
of the Board, acquire more than 15% of any such healthcare innovation fund's
issued share capital and provided further that such healthcare innovation fund
(if a listed closed-ended investment fund) itself has a limit of investment in
other listed closed-ended investment funds of 15 per cent. of gross assets.
Strategy and Investment Approach
The Investment Manager's investment process is primarily based on bottom-up
fundamental analysis. The Investment Manager uses a qualitative filter
consisting of key criteria to build up a watch-list of securities that is
monitored on a regular basis. Due diligence is then carried out on the
individual securities on the watch-list. Each individual holding is assessed
on its own merits in terms of risk:reward including ESG criteria. While the
Company expects normally to be fully or substantially invested, the Company
may hold cash or money market instruments pending deployment in the portfolio.
In addition, it will have the flexibility, when the Investment Manager
perceives there to be actual or expected adverse equity market conditions, to
maintain cash holdings as it deems appropriate.
Service Providers
Polar Capital has been appointed to act as the Investment Manager and AIFM as
well as to provide or procure company secretarial services, marketing and
administrative services, including accounting, portfolio valuation and trade
settlement which it has arranged to deliver through HSBC Securities Services
("HSS").
The Company also contracts directly, on terms agreed periodically, with a
number of third parties for the provision of specialist services, namely:
· Panmure Liberum as Corporate Broker;
· Herbert Smith Freehills Kramer LLP as Solicitors;
· HSBC Securities Services as Custodian and Depositary;
· Equiniti Limited as Share Registrars;
· RD:IR for Investor Relations and Shareholder Analysis;
· Camarco as PR advisors;
· PricewaterhouseCoopers LLP as Independent Auditors;
· Diligent Boardbooks Limited as Electronic Board Portal
providers (contracted indirectly through Polar Capital);
· Huguenot Limited as website designers and internet hosting
services; and
· Perivan Limited as designers and printers for shareholder
communications.
Gearing
The Company has historically utilised gearing in the form of Zero Dividend
Preference (ZDP) Shares through its subsidiary, PCGH ZDP Plc, which was
created as part of the Company's restructure in 2017 for the sole purpose of
providing a loan to the parent. The subsidiary company was incorporated with a
limited life of seven years and, following repayment of the loan by the parent
and redemption of the ZDP shares, it was placed into liquidation on 19 June
2024 in accordance with the Articles of Association. Following repayment of
this loan the Company's portfolio has remained ungeared, however, the Articles
of Association provide that the Company may borrow up to 15% of its NAV at the
time of drawdown for tactical deployment when the Board believes that gearing
will enhance returns to shareholders. Following the completion of the tender
offer, the Company intends to seek alternative forms of short-term gearing.
The Board believes that the ability to utilise gearing actively (where market
conditions are favourable), with the potential to enhance future returns, is a
key attraction of the investment trust structure.
Benchmark
The Company will measure the Investment Manager's performance against the MSCI
ACWI Healthcare Index total return, in sterling with dividends reinvested.
Although the Company has a benchmark, this is neither a target nor determinant
of investment strategy. The portfolio may diverge substantially from the
constituents of this index. The purpose of the Benchmark is to set a
reasonable measure of performance for shareholders above which the Investment
Manager earns a share for any outperformance it has delivered.
Investment Management Company and Management of The Portfolio
As the Company is an investment vehicle for shareholders, the Directors have
sought to ensure that the business of the Company is managed by a leading
specialist investment management team and that the investment strategy remains
attractive to shareholders. The Directors believe that a strong working
relationship with Polar Capital (the Investment Manager) will achieve the
optimum return for shareholders. As such, the Board and the Investment Manager
operate in a supportive, co-operative and open environment.
Under the terms of an Investment Management Agreement (IMA), Polar Capital has
sole responsibility for the discretionary management of the Company's assets
(including uninvested cash) and sole responsibility to take decisions as to
the purchase and sale of individual investments. The Investment Manager also
has responsibility for asset allocation within the limits of the investment
policy and guidelines established and regularly reviewed by the Board, all
subject to the overall control and supervision of the Board. Polar Capital
provides a team of healthcare specialists, and the portfolio is co-managed by
Mr James Douglas and Mr Gareth Powell. The Investment Manager has other
resources which support the investment team and has experience in managing and
administering other investment trust companies.
Under the terms of the IMA, the Investment Manager also provides or procures
accountancy services, company secretarial, marketing and day-to-day
administrative services, including the monitoring of third-party suppliers,
which are directly appointed by the Company. The Investment Manager has, with
the consent of the Directors, delegated the provision of certain of these
administrative functions to HSBC Securities Services and to Polar Capital
Secretarial Services Limited.
Fee Arrangements
Management Fee
Under the terms of the IMA, the Investment Manager will be entitled to a
management fee together with reimbursement of reasonable expenses incurred by
it in the performance of its duties.
Following the completion of the Tender offer and effective from 1 December
2025, the Board agreed to replace the previous management fee of the
Investment Manager, which was a flat fee of 0.75% (based on the lower of
market capitalisation and NAV) with a new tiered structure whereby a lower
initial rate of 0.70% per annum is payable on the first £500 million and a
further lowered rate of 0.65% per annum is applicable thereafter. The
management fee is payable monthly in arrears.
In accordance with the Directors' existing policy on the allocation of
expenses between income and capital, 80% of the management fee payable is
charged to capital and the remaining 20% to income.
Following the financial year end and effective from 1 October 2025, the Board
agreed to implement a change to the allocation split whereby 90% would be
charged to capital and the remaining 10% to income.
Performance Fee
Under the previous management fee arrangement, the Investment Manager could
receive a performance fee paid in cash when various performance parameters had
been met. No performance fee was accrued or is due to be paid as at the year
ended 30 September 2025 (2024: nil).
Under the new management fee arrangement, the performance fee element of the
previous fee structure has been removed following the conclusion of the Tender
Offer and with effect from 1 December 2025.
Further details on the termination arrangements are provided within the
Shareholder Information section of the Annual Report.
Performance And Key Performance Objectives
The Board appraises the performance of the Company and the Investment Manager
as the key supplier of services to the Company against key performance
indicators ('KPIs'). The objectives of the KPIs comprise both specific
financial and Shareholder related measures. These KPI's have not differed from
the prior year.
KPI CONTROL PROCESS OUTCOME
The provision of investment returns to shareholders measured by long-term NAV The Board reviews the performance of the portfolio in detail and hears the As at 30 September 2025, the total net assets of the Company amounted to
growth and relative performance against the Benchmark. views of the Investment Manager at each meeting. £448,110,000 (2024 £479,073,000).
The Board also considers the value delivered to shareholders through NAV The Company's NAV total return, over the year ended 30 September 2025, was
growth and dividends paid. -5.86% while the Benchmark Index over the same period was -7.81%. The
Company's performance is explained further in the Investment Manager's Report.
Since restructuring on 20 June 2017, the total return of the NAV was 81.33%
and the benchmark total return was 68.18%. Investment performance is explained
in the Chair's Statement and the Investment Manager's Report.
The achievement of the dividend policy. Financial forecasts are reviewed to track income and distributions. Two dividends have been paid or are payable in respect of the year ended 30
September 2025 totalling 2.20p per share (2024: two dividends totalling 2.40p
per share).
The Company's focus remains on capital growth. While the Company continues to
aim to pay two dividends per year these are expected to be a small part of a
shareholder total return.
Monitoring and reacting to issues created by the discount or premium of tthe The Board receives regular information on the composition of the share The discount of the ordinary share price to the NAV per ordinary share at the
ordinary share price to the NAV per ordinary share with the aim of reduced register including trading patterns and discount/premium levels of the year ended 30 September 2025 was 3.93% (2024: 4.82%).
discount volatility for shareholders. Company's ordinary shares. The Board discusses and authorises the issue or
buy back of shares when appropriate. The Board intends to actively utilise
buybacks to manage discount volatility and ensure, to the extent possible,
that the discount remains at an appropriately narrow level. During the year ended 30 September 2025, no new shares were issued or bought
back. Following the year end, the Company bought back 27,253,026 ordinary
The Board is aware of the vulnerability of a sector specialist investment shares into treasury as part of the tender offer to shareholders in November
trust to a change in investor sentiment to that sector. While there is no 2025.
formal discount policy the Board discusses the market factors giving rise to
any discount or premium, the long or short-term nature of those factors and
the overall benefit to shareholders of any actions. The market liquidity
is also considered when authorising the issue or buy back of shares when The number of shares in issue, as at the year end was 124,149,256 of which
appropriate market conditions prevail. 2,879,256 were held in treasury.
A daily NAV per share, calculated in accordance with the AIC guidelines, is
issued to the London Stock Exchange.
Subsequent to the tender offer process, 525,000 shares were reissued from
those purchased in the tender, resulting in an issued share capital of
124,149,256 of which 29,607,282 are held in treasury at 6 January 2026, the
latest practicable date.
To qualify and continue to meet the requirements for sections 1158 and 1159 of The Board receives regular financial information which discloses the current The Company was granted investment trust status annually up to 1 October 2014
the Corporation Tax Act 2010 ('investment trust status'). and projected financial position of the Company against each of the tests set and is deemed to be granted such status for each subsequent year subject to
out in sections 1158 and 1159. the Company continuing to satisfy the conditions of section 1158 of the
Corporation Tax Act 2010 and other associated ongoing requirements.
The Directors confirm that the tests have been met in the financial year ended
30 September 2025 and believe that they will continue to be met.
To ensure the efficient operation of the Company by monitoring the services The Board considers annually the services provided by the Investment Manager, The Board has received, and considered satisfactory, the internal controls
provided by third party suppliers, including the Investment Manager, and both investment and administrative, and reviews on a cycle the provision of report of the Investment Manager and other key suppliers including the
controlling ongoing charges. services from third parties including the costs of their services. contingency arrangements to facilitate the ongoing operations of the Company
in the event of withdrawal or failure of services.
The annual operating expenses are reviewed and any non-recurring project
related expenditure approved by the Board. The ongoing charges for the year ended 30 September 2025 were 0.90%, compared
to 0.88% the previous year.
Risk Management
The Board is responsible for the management of risks faced by the Company and,
through delegation to the Audit Committee, has established procedures to
manage risk, oversee the internal control framework and determine the nature
and extent of the principal risks the Company is willing to take in order to
achieve its long-term strategic objectives.
The established risk management process the Company follows identifies and
assesses various risks, their likelihood, and possible severity of impact,
considering both internal and external controls and factors that could provide
mitigation. A post mitigation risk impact score is then determined for each
principal risk.
The Audit Committee carries out, at least annually, a robust assessment of the
principal risks and uncertainties with the assistance of the Investment
Manager, continually monitors identified risks and meets to discuss both
long-term and emerging risks outside of tthe normal cycle of Audit Committee
meetings.
During the year the Audit Committee, in conjunction with the Board and the
Investment Manager undertook a full review of the Company's Risk Map including
the mitigating factors and controls to reduce the impact of the risks. The
Committee continues to closely monitor these risks along with any other
emerging risks as they develop and implements mitigating actions as necessary.
The Committee remains mindful of the heightened geopolitical political
landscape. Geopolitical events can have a significant impact on global
financial markets, and hence on the Company's portfolio performance. Further
information on how the Committee ha assessed the Company's ability to operate
as a going concern and the Company's longer-term viability can be found in the
Report of the Audit Committee.
The key risks, which are those classified as having the highest risk impact
score post mitigation, are detailed below with a high-level summary of the
management through mitigation and status arrows to indicate any change in
assessment over the past year.
Principal Risks and Uncertainties
Portfolio Management
Description Assessment Mitigation
Investment Performance Breach of Investment policy, Investment Manager unable to deliver the Unchanged from previous year. The Board seeks to mitigate the impact of such risks through the regular
Investment Objective leading to poor performance against the benchmark or reporting and monitoring of the Company's investment performance against its
market/industry average. peer group, benchmark and other agreed indicators of relative performance.
A detailed annual review of the investment strategy is undertaken by the
Investment Manager with the Board including analysis of investment markets and
sector trends.
At each meeting the Board discusses developments in healthcare and drug
pipelines with the Investment Manager in addition to the composition
and diversification of the portfolio with sales and purchases of investments
and the degree of risk which the Investment Manager incurs to generate
investment returns. Individual investments are discussed with the Investment
Manager as well as the Investment Manager's general views on the various
investment markets and the healthcare sector in particular. Analytical
performance data and attribution analysis is presented by the Investment
Manager.
The Board is committed to a clear communication program to ensure shareholders
understand the investment strategy. This is maintained through the use of
monthly factsheets which have a market commentary from the Investment Manager
as well as portfolio data, an informative website and the annual and half year
reports.
Trading Execution of unauthorised trade/dealing error. Error or breach may cause Unchanged from previous year. Investment limits and restrictions are encoded into the dealing and operations
regulatory investigation leading to fines, reputational damage, risk to systems of the Investment Manager and various oversight functions are
investment trust status and have a detrimental impact on performance. undertaken to ensure there is early warning of any potential issue of
compliance or regulatory matters.
Discount/Premium Persistent discount in excess of Board or Shareholder acceptable Unchanged from previous year. The Board regularly considers, in comparison to the sector and peers, the
level of premium and discount of the share price to the NAV and ways to
levels. enhance Shareholder value including share issuance and buy backs.
The Board has carefully monitored the discount level and market movements and
has discussed performance with the Managers and advisers. The discount of the
Company narrowed during the year under review and as at 30 September 2025, the
discount of the ordinary share price to the NAV per ordinary share was 3.93%
(2024: 4.82%). The Chair also meets regularly with key shareholders to
understand any concerns and views. Further detail on the performance and the
impact of market movements on the Company is given in the Investment Manager's
Report.
Regulatory Risk
Description Assessment Mitigation
Non-compliance with statutes, regulations and disclosure requirements, Unchanged from previous year The Board monitors regulatory change with the assistance of the Investment
including the FCA UK listed company regime and Companies Act 2006; s1158/1159 Manager, Company Secretary and external professional suppliers and implements
of the Corporation Tax Act 2010, the Companies Act 2006 and other UK, European necessary changes should they be required.
and overseas legislation affecting UK companies
including MiFID II and the GDPR.
The Board receives regulatory reports for discussion and, if required,
considers the need for any remedial action. In addition, as an investment
company, the Company is required to comply with a framework of tax laws,
Not complying with accounting standards could result is a suspension of regulation and company law.
listing or loss of investment trust status, reputational damage and
Shareholder activism.
Further risks arise from not keeping abreast of changes in legislation and
regulations which have, in recent years, been substantial.
Economic And Market Risk
Description Assessment Mitigation
Financial loss due to unexpected natural disaster or other unpredictable event Unchanged from previous year. The Board regularly discusses global geopolitical issues and general economic
disrupting the ability to operate or significant exposure to the economic conditions and developments.
cycles of the markets in which the underlying investments conduct their
business operations as well as the economic impact on investment markets where
such investments are listed.
The impact on the portfolio from other geopolitical changes are monitored
through existing control systems. While it is difficult to quantify the impact
of such changes, it is not anticipated that they fundamentally affect the
Fluctuations in stock markets and currency exchange rates could be business of the Company and the environment in which the Company operates or
advantageous or disadvantageous to the Company and its performance. make healthcare investing any less desirable.
Disruption to trading platforms and support services. The Company through the Investment Manager, has a disaster recovery plan in
place.
Operational Risk
Description Assessment Mitigation
Service Failure Failure in services provided by the Investment Manager, Custodian, Depositary Unchanged from previous year. The Board carries out an annual review of internal control reports from
or other service providers; Accounting, Financial or Custody Errors resulting suppliers, which includes cyber protocols and disaster recovery procedures.
in regulatory investigation or financial loss, failure of trade settlement, Due diligence and service reviews are undertaken with third-party service
potential loss of Shareholder assets and investment trust status. providers including the Custodian and Depositary.
A full review of the internal control framework is carried out at least
annually. Regular reporting is received by the Investment Manager on behalf of
the Board from the Depositary on the safe custody of the Company's assets. The
Board undertakes independent reviews of the Depositary and external
Administrator services via the Investment Manager. Management accounts are
produced and reviewed monthly, statutory reporting and daily NAV calculations
are produced by the external Administrator and verified by the Investment
Manager. Accounting records are tested, and valuations verified independently
as part of the year- end financial reporting process.
Cyber Risk Cyber-attack causing disruption to, or failure of, operational and accounting Unchanged from previous year. The number, severity and success rate of cyberattacks have increased
systems and processes provided by the Investment Manager creating an considerably over recent years. However, controls are in place and the Board
unexpected event and/or adverse impact on personnel or the portfolio. proactively seeks to keep abreast of developments through updates with
representatives of the Investment Manager who undertakes meetings with
relevant service providers.
The Audit Committee once again sought assurance via the Investment Manager,
from each of the Company's service providers on the resilience of their
business continuity arrangements. These assurances and the subsequent detailed
updates that were given to the Committee provided a satisfactory level of
assurance that there had not been, and there was no anticipation of any
disruption in the ability of each service provider to fulfil their duties as
would typically be expected.
Key Person Loss of fund managers or other key management professionals. Impact on Unchanged from previous year. The strength and depth of investment team provides comfort that there is not
investor confidence leading to widening of the discount and/or poor over-reliance on one person with alternative portfolio managers available to
performance creating a period of uncertainty and potential termination of the act if needed. For each key business process roles, responsibilities and
Investment Management Agreement. reporting lines are clear and unambiguous. Key personnel are incentivised by
equity participation in the investment management company.
Shareholder Communications Failure to effectively communicate significant events to the shareholder and Increased from previous year. Polar Capital Sales Team and the Corporate Broker provide periodic reports to
investor base. Given the increased significance of shareholder communications the Board on communications with shareholders and feedback received.
during the corporate action the Board decided to increase the potential impact
to the Company of this risk until the corporate action was complete.
The Board is committed to a clear communication programme to ensure
Shareholders understand the investment strategy. This is maintained through
the use of monthly factsheets which have a market commentary from the
Investment Manager as well as portfolio data, an informative website as well
as annual and half year reports.
Contact details and how to contact the Board are provided in regulatory
announcements and the Board is present at the AGM to speak to shareholders.
Section 172 of the Companies Act 2006
The statutory duties of the Directors are listed in s171-177 of the Companies
Act 2006. The Board recognises that under s172, Directors have a duty to
promote the success of the Company for the benefit of its members (our
shareholders) as a whole and in doing so have regard to the consequences of
any decision in the long term, as well as having regard to the Company's wider
stakeholders. The fulfilment of this duty not only helps the Company achieve
its Investment Objective but ensures decisions are made in a responsible and
sustainable way for shareholders.
To ensure that the Directors are aware of, and understand, their duties, they
are provided with an induction when they first join the Board, including
details of all relevant regulatory and legal duties as a Director and continue
to receive regular and ongoing update on relevant legislative and regulatory
developments. They also have continued access to the advice and services of
the Company Secretary and, when deemed necessary, the Directors can seek
independent professional advice at the expense of the Company. The Schedule of
Matters Reserved for the Board, as well as the Terms of Reference of its
committees, are reviewed annually and further describe Directors'
responsibilities and obligations and include any statutory and regulatory
duties.
The Board seeks to understand the needs and priorities of the Company's
stakeholders and these are taken into account during discussions and as part
of the decision-making process. As an externally managed investment company,
the Company does not have any employees or customers, however, the key
stakeholders and a summary of the Board's consideration and actions where
possible in relation to each group of stakeholders are described in the table
below.
STAKEHOLDER GROUP HOW WE ENGAGE WITH THEM
SHAREHOLDERS The Directors have considered their duty to shareholders when making the
strategic decisions during the year that affect them, most notably, the
proposals made to shareholders in October 2025 in relation to the initial
tender offer and removal of the Company's fixed life in favour of five-yearly
tender offers. The Directors have also taken account of shareholders'
interests during the year when considering the continued appointment of the
Investment Manager and the recommendation that shareholders vote in favour of
the resolutions for the Company to continue and to renew the allotment and buy
back authorities at the AGM. The Directors have also engaged with and taken
account of shareholders' interests during the year.
The Company's AGM will be held at 2:00pm on Thursday 26 February 2026 at the
offices of Polar Capital, 16 Palace Street, London SW1E 5JD. The Board
recognises that the AGM is an important event for shareholders and the Company
and is keen to ensure that shareholders are able to exercise their right to
vote and participate. Any changes to these arrangements will be communicated
through the Company's website and via a Regulatory Information Service
announcement.
The Board believes that shareholder engagement remains important and is keen
that the AGM be a participative event for all. As was the case in 2025,
shareholders will once again have the opportunity to hear the Managers'
pre-recorded presentation, reviewing the Company's performance in the year and
the outlook for the next year, in advance of the AGM. The presentation will be
uploaded to the Company's website ahead of the AGM, on or before 12 February
2026. In addition, Shareholders will also be able to watch the proceedings of
the AGM live via Zoom Conference.
Details of how to access the online link are provided in the Notice of AGM.
Please note that the physical AGM will comprise the formal business and
questions only; there will be no live Managers presentation. Shareholders are
encouraged to send any questions ahead of the AGM to the Board via the Company
Secretary at cosec@polarcapital.co.uk stating the subject matter as PCGH-AGM.
The Chairs of the Board and of the Committees, along with the Managers, will
be in attendance at the AGM and will be available to respond to questions and
concerns from shareholders.
Should any significant votes be cast against a resolution, the Board will
engage with shareholders and explain in its announcement of the results of the
AGM the actions it intends to take to consult shareholders in order to
understand the reasons behind the votes against. Following the consultation,
an update will be published no later than six months after the AGM and the
Annual Report will detail the impact the Shareholder feedback has had on any
decisions the Board has taken and any actions or resolutions proposed.
Relations with shareholders
The Board and the Manager consider maintaining good communications and
engaging with shareholders through meetings and presentations a key priority.
The Board regularly considers the share register of the Company and receives
regular reports from the Manager and the Corporate Broker on meetings attended
with shareholders and any concerns that are raised in those meetings. The
Board also reviews correspondence from shareholders and may attend investor
presentations.
Shareholders are able to raise any concerns directly with the Chair of the
Board without intervention of the Manager or Company Secretary, they may do
this either in person at the AGM or at other events, or in writing either via
the registered office of the Company or to the Chair's specific email address
Chair.PCGH@polarcapital.co.uk.
Shareholders are kept informed by the publication of annual and half year
reports, monthly fact sheets, access to commentary from the Investment Manager
via the Company's website and attendance at events at which the Investment
Manager presents.
The Company, through the sales and marketing efforts of the Investment
Manager, encourages retail investment platforms to engage with underlying
shareholders in relation to Company communications and enable those
shareholders to cast their votes on Shareholder resolutions; the Company
however has no responsibility over such platforms. Shareholders who hold
shares via an online stockbroker or platform are encouraged to exercise their
vote through their respective platforms and where possible attend the AGM.
Further information on how to vote through the platforms can be found on the
AIC's website (www.theaic.co.uk) and in the Shareholder information section of
the Annual Report.
The Company has also made arrangements with its registrar for shareholders,
who own their shares directly rather than through a nominee or share scheme,
to view their account online at www.shareview.co.uk. Other services are also
available via this service.
Outcomes and strategic decisions during the year
Corporate Action
Ahead of the corporate action including the subsequent tender offer and
removal of fixed life put to Shareholders, the Chair and Corporate Broker
sought Shareholder views including any concerns in respect of the Company's
strategy and structure going forward. No adverse comments were received and
shareholders were predominantly in favour of the Company continuing in its
current form. The proposals put to Shareholders were approved by
representation of over 60% of the total issued share capital and over 90% of
the votes cast at the General Meeting on 27 November 2025.
Fees
As mentioned previously, the Board undertook a review of the Investment
Management fees at the time of the corporate action to ensure that the Company
continues to provide value for Shareholders and remains competitive, whilst
also reflecting the quality and experience of the Investment Manager's
specialist healthcare team and the business infrastructure that supports them.
Further details on the changes to the fee structure effective from 1 December
2025 are provided above in the Strategic Report.
AGM
To enable more shareholders the opportunity to hear the Investment Manager's
AGM presentation, the Board has once again opted to pre-record and upload this
to the website ahead of the voting deadline and in-person formal business AGM.
In addition, shareholders will also have the opportunity to watch the
proceedings of the AGM live via Zoom Conference. Details of how to access the
online link are provided in the Notice of AGM.
INVESTMENT MANAGER Through the Board meeting cycle, regular updates and the work of the
Management Engagement Committee reviewing the services of the Investment
Manager annually, the Board is able to safeguard Shareholder interests by:
· Ensuring excessive risk is not undertaken in the pursuit of investment
performance;
· Ensuring adherence to the Investment Management Policy and reviewing
the agreed management fees;
· Ensuring compliance with statutory legal requirements, regulations
and other advisory guidance such as consumer duty and aspects of operational
resilience; and
· Reviewing the Investment Manager's decision making and consistency in
investment process.
Maintaining a close and constructive working relationship with the Manager is
crucial as the Board and the Investment Manager both aim to continue to
achieve consistent, long-term returns in line with the Investment Objective.
The culture which the Board maintains to ensure this involves encouraging open
discussion with the Investment Manager; recognising that the interests of
shareholders and the Investment Manager are aligned, providing constructive
challenge and making Directors' experience available to support the Investment
Manager. This culture is aligned with the collegiate and meritocratic culture
which Polar Capital has developed and maintains.
Outcomes and strategic decisions during the year
ESG
The Board regularly engages with the Investment Manager and healthcare team to
understand the impact of developments within the ESG landscape and any impact
to the team's investment approach or the wider Polar business.
Management
The Management Engagement Committee has recommended and the Board has approved
the continued appointment of the Investment Manager on the terms set out
within the Investment Management Agreement.
The proposals put forward in October 2025, to continue the Company and remove
the fixed life element, were made with and in support of the Investment
Manager continuing to manage the assets of the Company.
INVESTEE COMPANIES The Board has instructed the Investment Manager to take into account the
published corporate governance policies of the companies in which it invests.
The Board has also considered the Investment Manager's Stewardship Code and
Proxy Voting Policy. The Voting Policy is for the Investment Manager to vote
at all general meetings of companies in favour of resolutions proposed by the
management where it believes that the proposals are in the interests of
shareholders. However, in exceptional cases, where the Investment Manager
believes that a resolution would be detrimental to the interests of
shareholders or the financial performance of the Company, appropriate
notification will be given and abstentions or a vote against will be lodged.
The Investment Manager reports to the Board, when requested, on the
application of the Stewardship Code and Voting Policy. The Investment
Manager's Stewardship Code and Voting Policy can be found on the Investment
Manager's website in the Corporate Governance section
(www.polarcapital.co.uk). Further information on how the Investment Manager
considers ESG in its engagement with investee companies can be found in the
ESG report within the Annual Report and Accounts.
The Investment Manager has voted at 42 company meetings over the year ended 30
September 2025, with 35% of meetings having at least one against, withheld or
abstain vote.
Outcomes and strategic decisions during the year
The Board receives information on the ratings of investee companies and is
able to use this as a tool to inform discussions with the Manager during Board
meetings.
SERVICE PROVIDERS The Board (through the Company Secretary) engages with the Company's other
service providers through the annual cycle of reporting and due diligence
meetings or site visits. This engagement is completed with the aim of having
effective oversight of delegated services, seeking to improve the processes
for the benefit of the Company and to understand the needs and views of the
Company's service providers, as stakeholders in the Company.
Further information on the Board's engagement with service providers is
included in the Corporate Governance Statement and the Report of the Audit
Committee in the Annual Report and Accounts. During the year under review, due
diligence meetings have been undertaken by the Investment Manager and where
possible, service providers have joined meetings to present their reports
directly to the Board or the Audit Committee as appropriate.
Outcomes and strategic decisions during the year
The reviews of the Company's service providers have been positive and the
Directors believe their continued appointment is in the best interests of the
Company. The accounting and administration services of HSBC Securities
Services (HSS) are contracted through Polar Capital and provided to the
Company under the terms of the IMA. The Board continues to monitor service
levels and due diligence reviews conducted by the Company Secretary and is
satisfied that the service received continues to be of a high standard.
PROXY ADVISORS The support of proxy adviser agencies is important to the Directors, as the
Company seeks to retain a reputation for high standards of corporate
governance, which the Directors believe contributes to the long-term
sustainable success of the Company. The Directors consider the recommendations
of these various proxy voting agencies when contemplating decisions that will
affect shareholders and also when reporting to shareholders through the Half
Year and Annual Reports.
Recognising the principles of stewardship, as promoted by the UK Stewardship
Code, the Board welcomes engagement with all of its investors. The Board
recognises that the views, questions from, and recommendations of many
institutional investors and proxy adviser agencies provide a valuable feedback
mechanism and play a part in highlighting evolving shareholders' expectations
and concerns.
Outcomes and strategic decisions during the year
During the year, the Chair, the Company's Broker and members of Polar Sales
team have engaged with the stewardship teams of some larger investors to
understand and address their expectations in terms of the Company's potential
fixed life, structure and ongoing appetite for a similar vehicle in the
future. Prior to AGMs, the Company also engages with proxy agencies to fact
check their advisory reports and clarify any areas or topics contained within
the report. This ensures that whilst the proxy advisory reports provided to
shareholders are objective and independent, the Company's actions and
intentions are represented as clearly as possible to assist with shareholders'
decision making when considering the resolutions proposed at the AGM.
AIC The Company is a member of the AIC and has supported lobbying activities.
Representatives of the Manager sit on a variety of forums run by the AIC which
aids development and understanding of new policies and procedures. The
Directors may cast votes in the AIC Board Elections each year and regularly
attend AIC events.
This year, the Board supported the AIC's 'My share, my vote' campaign and
encouraged Shareholders to do the same by signing the petition on the AIC's
website. The AIC was lobbying government to make a change in company law to
require nominees, which include retail platforms, to automatically and without
charge pass on voting rights and information to the underlying Shareholders
which at present is optional. We support this action as we believe shareholder
engagement is highly desirable.
Approved by the Board on 13 January 2026
By order of the Board
TRACEY LAGO, FCG
Polar Capital Secretarial Services Limited
Company Secretary
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have prepared the Company's
Financial Statements in accordance with the UK-adopted International
Accounting Standards (UK-adopted IAS) and applicable law. Additionally, the
Financial Conduct Authority's Disclosure Guidance and Transparency Rules
require the directors to prepare the Financial Statements in accordance with
UK-adopted IAS.
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 of the Company for that
period. In preparing the Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· state whether they have been prepared in accordance with
UK-adopted IAS, subject to any material departures
disclosed and explained in the Financial Statements;
· make judgements and accounting estimates that are reasonable and
prudent; and
· prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the
Company will continue in business.
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 and the Directors'
Remuneration Report comply with the Companies Act 2006. They are responsible
for such internal controls as they determine necessary to enable the
preparation of Financial Statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the Company
and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration
Report and Corporate Governance Statement that comply with that law and those
regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors' Confirmations
The Directors consider that 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 Company's position and performance,
business model and strategy.
Each of the directors, whose names and functions are listed in the Strategic
Report confirm that, to the best of their knowledge:
· the Company Financial Statements, which have been prepared in
accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit/loss of
the company;
· the Strategic Report includes a fair review of the development
and performance of the business and the position of the Company, together with
a description of the principal risks and uncertainties that it faces;
In the case of each Director in office at the date the Directors' Report is
approved:
· so far as the director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
· they have 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 auditors are aware of that information.
Lisa Arnold
Chair
13 January 2026
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2025
Note
Year ended Yea
30 September 2025 r
end
ed
30
Sep
tem
ber
202
4
Revenue return Capital Total Revenue return Capital Total
return
return
£'000
return £'000
return
£'000
£'000
£'000 £'000
(Losses)/gains on investments held at fair value 5 - (26,558) (26,558) - 63,240 63,240
Investment income 3 3,388 - 3,388 5,369 - 5,369
Other operating income 4 83 - 83 122 - 122
Other currency (losses)/gains 6 - (390) (390) - 281 281
Total (expense)/income 3,471 (26,948) (23,477) 5,491 63,521 69,012
Expenses
Investment management fee 7 (631) (2,522) (3,153) (687) (2,747) (3,434)
Other administrative expenses 8 (855) (8) (863) (833) (100) (933)
Total expenses (1,486) (2,530) (4,016) (1,520) (2,847) (4,367)
(Loss)/profit before finance costs and tax 1,985 (29,478) (27,493) 3,971 60,674 64,645
Finance costs 9 (7) (26) (33) (14) (882) (896)
(Loss)/profit before tax 1,978 (29,504) (27,526) 3,957 59,792 63,749
Tax 10 (424) (103) (527) (708) (240) (948)
Net (loss)/profit for the year and total comprehensive (expense)/income 1,554 (29,607) (28,053) 3,249 59,552 62,801
(Losses)/earnings per ordinary share (pence) 12 1.28 (24.41) (23.13) 2.68 49.11 51.79
The total column of this statement represents Company's Statement of
Comprehensive Income, prepared in accordance with UK‑adopted International
Accounting Standards.
The revenue return and capital return columns are supplementary to this and
are prepared under guidance published by the Association of Investment
Companies.
The Company does not have any other income or expense that is not included in
net loss for the year. The net loss for the year disclosed above represents
the Company's total comprehensive expense.
There are no dilutive securities and therefore the Earnings per Share and the
Diluted Earnings per share are the
same.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
The notes to follow form part of these financial
statements.
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2025
Note Year ended 30 September 2025
Called up share capital Capital redemption reserve Share premium reserve Special distributable reserve Capital reserves Revenue reserve Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Total equity at 1 October 2024 31,037 6,575 80,685 3,672 354,300 2,804 479,073
Total comprehensive
(expense)/income:
(Loss)/profit for the year ended 30 September 2025 - - - - (29,607) 1,554 (28,053)
Transactions with owners, recorded directly to equity:
Equity dividends paid 11 - - - - - (2,910) (2,910)
Total equity at 31,037 6,575 80,685 3,672 324,693 1,448 448,110
30 September 2025
Note Year ended 30 September 2024
Called up share capital Capital redemption reserve Share premium reserve Special distributable reserve Capital reserves Revenue reserve Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Total equity at 1 October 2023 31,037 6,575 80,685 3,672 294,748 2,465 419,182
Total comprehensive income:
Profit for the year ended 30 September 2024 - - - - 59,552 3,249 62,801
Transactions with owners, recorded directly to equity:
Equity dividends paid 11 - - - - - (2,910) (2,910)
Total equity at 31,037 6,575 80,685 3,672 354,300 2,804 479,073
30 September 2024
The notes to follow form part of these financial
statements.
BALANCE SHEET
As at 30 September 2025
Notes
30 September 2025 30 September 2024
£'000 £'000
Non-current assets
Investments held at fair value 13 439,435 474,136
Current assets
Cash and cash equivalents 16 17,035 9,552
Overseas tax recoverable 952 842
Receivables 84 180
18,071 10,574
Total assets 457,506 484,710
Current liabilities
Payables (9,293) (5,263)
Bank overdraft 16 (1) (374)
(9,294) (5,637)
Non-current liabilities
Indian capital gains tax provision (102) -
Total liabilities (9,396) (5,637)
Net assets 448,110 479,073
Equity attributable to equity Shareholders
Called up share capital 14 31,037 31,037
Share premium reserve 80,685 80,685
Capital Redemption reserve 6,575 6,575
Special distributable reserve 3,672 3,672
Capital reserves 324,693 354,300
Revenue reserve 1,448 2,804
Total equity 448,110 479,073
Net asset value per Ordinary share (pence) 15 369.51 395.05
The Financial Statements were approved and authorised for issue by the Board
of Directors on 13 January 2026 and signed on its behalf by
Lisa Arnold
Chair
The notes below form part of these Financial Statements.
Registered number 7251471
CASH FLOW STATEMENT
For the year ended 30 September 2025
Note Year ended Year ended
30 September 2025 30 September 2024
£'000 £'000
Cash flows from operating activities
(Loss)/profit before finance costs and tax (27,493) 64,645
Adjustment for non-cash items:
(Losses)/gains on investments held at fair value through profit or loss 26,558 (63,240)
Adjusted (loss)/profit before tax (935) 1,405
Adjustments for: (485,249) (688,173)
Purchases of investments, including transaction costs 497,444 737,080
Sales of investments, including transaction costs 96 325
Decrease in receivables (22) (266)
Decrease in payables (1) (494)
Indian capital gains tax (534) (872)
Overseas tax deducted at source
Net cash generated from operating activities 10,799 49,005
Cash flows from financing activities
Redemption of ZDP shareholders - (39,515)
Interest paid (33) (68)
Equity dividends paid 11 (2,910) (2,910)
Net cash used in financing activities (2,943) (42,493)
Net increase in cash and cash equivalents 7,856 6,512
Cash and cash equivalents at the beginning of the year 9,178 2,666
Cash and cash equivalents at the end of the year 16 17,034 9,178
The notes below form part of these Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 September 2025
1. General Information
The Financial Statements for the year ended 30 September 2025 comprise the
Financial Statements of the Company.
The principal activity of the Company is that of an investment trust company
within the meaning of Section 1158/1159 of the Corporation Tax Act 2010 and
its investment approach is detailed in the Strategic Report.
The Company's presentational currency is pounds sterling (rounded to the
nearest £'000). Pounds sterling is also the functional currency of the
Company, because it is the currency which is most relevant to the majority of
the Company's shareholders and creditors and the currency in which the
majority of the Company's operating expenses are paid.
2. Accounting Policies
The material accounting policy information and other explanatory information
which have been applied consistently for all years presented are set out
below:
(a) Basis of Preparation
The Company's Financial Statements have been prepared and approved by the
Directors in accordance with UK-adopted International Accounting Standards
("UK-adopted IAS") and with the requirements of the Companies Act 2006.
The Financial Statements have been prepared on a going concern basis under the
historical cost convention, as modified by the revaluation of investments and
derivative financial instruments at fair value through profit or loss.
Where presentational guidance set out in the Statement of Recommended Practice
(SORP) for investment trusts issued by the Association of Investment Companies
(AIC) in July 2022 is consistent with the requirements of UK-adopted IAS, the
Directors have sought to prepare the Financial Statements on a basis compliant
with the recommendations of the SORP.
The financial position of the Company as at 30 September 2025 is shown in the
balance sheet in the Annual Report and Accounts. As at 30 September 2025 the
Company's total assets exceeded its total liabilities by a multiple of over
48. The assets of the Company consist mainly of securities that are held in
accordance with the Company's Investment Policy, as set out in the Annual
Report and Accounts and these securities are readily realisable. The Directors
have considered a detailed assessment of the Company's ability to meet their
liabilities as they fall due. The assessment took account of the Company's
current financial position, it's cash flows and its liquidity position. In
light of that assessment, the Directors consider that the Company has adequate
financial resources to enable them to continue in operational existence for a
period of 12 months from the approval of these financial statements.
Accordingly, the Directors believe that it is appropriate to continue to adopt
the going concern basis in preparing the Company's Financial Statements.
(b) Presentation of the Statement of Comprehensive Income
In order to better reflect the activities of an investment trust company and
in accordance with the guidance set out by the AIC, supplementary information
which analyses the Statement of Comprehensive Income between items of a
revenue and capital nature has been presented alongside the Statement of
Comprehensive Income. The results presented in the revenue return column is
the measure the Directors believe appropriate in assessing the Company's
compliance with certain requirements set out in section 1158 of the
Corporation Tax Act 2010.
(c) Income
Dividends receivable from equity shares are recognised and taken to the
revenue return column of the Statement of Comprehensive Income on an
ex-dividend basis.
Special dividends are recognised on an ex-dividend basis and may be considered
to be either revenue or capital items. The facts and circumstances are
considered on a case by case basis before a conclusion on appropriate
allocation is reached.
Where the Company has received dividends in the form of additional shares
rather than in cash, the amount of the cash dividend foregone is recognised in
the revenue return column of the Statement of Comprehensive Income. Any excess
in value of shares received over the amount of the cash dividend foregone is
recognised in the capital return column of the Statement of Comprehensive
Income.
(d) Expenses
All expenses, including the investment management fee, are accounted for on an
accruals basis and are recognised when they fall due.
All expenses have been presented as revenue items except as follows:
Expenses are charged to the capital column of the Statement of Comprehensive
Income where a connection with the maintenance or enhancement of the value of
investments can be demonstrated. In this respect the investment management
fees have been charged to the Statement of Comprehensive Income in line with
the Board's expected long-term split of returns, in the form of capital gains
and income from the Company's portfolio. As a result 20% of the investment
management fees are charged to revenue and 80% charged to capital in the
Statement of Comprehensive Income.
Finance costs
Overdraft interest costs are allocated 20% to revenue and 80% to capital in
line with the Board's expected long-term split of revenue and capital return
from the Company's investment portfolio.
Share issue costs
Costs incurred directly in relation to the issue of shares in the subsidiary
were borne by the Company and taken 100% to capital. Share issue costs
relating to Ordinary share issues by the Company are taken 100% to the share
premium account.
Zero Dividend Preference (ZDP) shares
Shares issued by the subsidiary were treated as a liability and were shown in
the Balance Sheet at their redemption value at the Balance Sheet date. The
appropriations in respect of the ZDP shares necessary to increase the
subsidiary's liabilities to the redemption values were allocated to capital
in the Statement of Comprehensive Income. The ZDP shares were fully repaid and
redeemed on 19 June 2024.
(e) Taxation
The tax expense represents the sum of the overseas withholding tax deducted
from investment income, tax currently payable and deferred tax.
The tax currently payable is based on the taxable profits for the year ended
30 September 2025. Taxable profit differs from net profit 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 have been enacted or
substantively enacted at the balance sheet date.
In line with the recommendations of the SORP, the allocation method used to
calculate tax relief on expenses presented against capital returns in the
supplementary information in the Statement of Comprehensive Income is the
"marginal basis". Under this basis, if taxable income is capable of being
offset entirely by expenses presented in the revenue return column of the
Statement of Comprehensive Income, then no tax relief is transferred to the
capital return column.
Deferred tax is the tax expected to be payable or recoverable on temporary
differences between the carrying amounts of assets and liabilities in the
Financial Statements and the corresponding tax bases used in the computation
of taxable profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised.
Investment trusts which have approval as such under section 1158 of the
Corporation Tax Act 2010 are not liable for taxation on capital gains.
The Company is liable to Indian capital gains tax under Section 115 AD of the
Indian Income Tax Act 1961. The Indian capital gains tax provision represents
an estimate of the amount of tax payable by the Company. Tax amounts payable
may differ from this provision depending on when the Company disposes of its
investments. The current provision for Indian capital gains tax is calculated
based on the long term (securities held more than one year) or short term
(securities held less than one year) nature of the investments and the
applicable tax rate at the year end. Currently, the short-term tax rate is 20%
and the long-term tax rate is 12.5%. The estimated tax charge is subject to
regular review including a consideration of the likely period of ownership,
tax rates and market valuation movements. The provision at the year end is
recognised in the Balance Sheet and the year-on-year movement in the provision
is recognised in the Statement of Comprehensive Income.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised based on tax
rates that have been enacted or substantively enacted at the balance sheet
date.
Deferred tax is charged or credited in the Statement of Comprehensive Income,
except when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
(f) Investments Held at Fair Value Through Profit or Loss
When a purchase or sale is made under contract, the terms of which require
delivery within the timeframe of the relevant market the investments concerned
are recognised or derecognised on the trade date and are initially measured at
fair value.
On initial recognition the Company has designated all of its investments as
held at fair value through profit or loss as defined by UK-adopted IAS. All
investments are measured at subsequent reporting dates at fair value, which is
either the bid price or the last traded price, depending on the convention of
the exchange on which the investment is quoted.
All investments, classified as fair value through profit or loss, are further
categorised into the following fair value hierarchy:
Level 1: Unadjusted prices quoted in active markets for identical assets and
liabilities.
Level 2: Having inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: Having inputs for the asset or liability that are not based on
observable market data.
Changes in fair value of all investments held at fair value and realised gains
and losses on disposal are recognised in the capital return column of the
Statement of Comprehensive Income.
In the event a security held within the portfolio is suspended then judgement
is applied in the valuation of that security.
(g) Receivables
Receivables are initially recognised at fair value and subsequently measured
at amortised cost. Receivables do not carry any interest and are short-term in
nature and are accordingly stated at their nominal value (amortised cost) as
reduced by appropriate allowances for estimated irrecoverable amounts.
(h) Cash and Cash Equivalents
Cash comprises cash on hand, demand deposits and overdrafts. Cash equivalents
are short-term, maturity of three months or less, highly liquid investments
that are readily convertible to known amounts of cash.
(i) Dividends Payable
Dividends payable to shareholders are recognised in the financial statements
when they are paid.
(j) Payables
Other payables are not interest-bearing and are initially valued at fair value
and subsequently stated at their nominal value (amortised cost).
(k) Foreign Currency Translation
Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling on the date of each transaction. Monetary assets, monetary
liabilities and equity investments in foreign currencies at the balance sheet
date are translated into sterling at the rates of exchange ruling on that
date. Realised profits or losses on exchange, together with differences
arising on the translation of foreign currency assets or liabilities, are
taken to the capital return column of the Statement of Comprehensive Income.
Foreign exchange gains and losses arising on investments held at fair value
are included within changes in fair value.
(l) Capital Reserves
Capital reserve arising on investments sold includes:
· gains/losses on disposal of investments
· exchange differences on currency balances
· the costs of own shares bought back.
· transfer to subsidiary in relation to ZDP funding requirement
· other capital charges and credits charged to this account in
accordance with the accounting policies above.
Capital reserve arising on investments held includes:
· increases and decreases in the valuation of investments held at
the balance sheet date.
All of the above are accounted for in the Statement of Comprehensive Income.
When making a distribution to shareholders, the Directors determine the
profits available for distribution by reference to the 'Guidance on realised
and distributable profits under the Companies Act 2006' issued by the
Institute of Chartered Accountants of England & Wales and the Institute of
Chartered Accountants of Scotland in April 2017. The availability of
distributable reserves in the Company is dependent on those dividends meeting
the definition of qualifying consideration within the guidance and on the
available cash resources of the Company and other accessible sources of funds.
The distributable reserves are therefore subject to any future restrictions or
limitations at the time such distribution is made.
(m) Repurchase of Ordinary Shares (Including Those Held in Treasury)
The costs of repurchasing Ordinary shares including related stamp duty and
transaction costs are taken directly to equity and reported through the
Statement of Changes in Equity. Share repurchase transactions are accounted
for on a trade date basis.
The nominal value of Ordinary share capital repurchased and cancelled is
transferred out of called up share capital and into the capital redemption
reserve.
Where shares are repurchased and held in treasury, the transfer to capital
redemption reserve is made if and when such shares are subsequently
cancelled.
(n) Segmental Reporting
Under IFRS 8, 'Operating Segments', operating segments are considered to be
the components of an entity about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. The chief
operating decision maker has been identified as the Investment Manager (with
oversight from the board).
The Directors are of the opinion that the Company has only one operating
segment and as such no distinct segmental reporting
is required.
(o) Key Estimates and judgements
Estimates and assumptions used in preparing the Financial Statements are
reviewed on an ongoing basis and are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances. The results of these estimates and assumptions form the basis
of making judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. The Company does not consider that
there have been any significant estimates or judgements in the current
financial year.
(p) New and revised accounting Standards
There were no new UK-adopted IAS or amendments to UK-adopted IAS applicable to
the current year which had any significant impact on the Company's Financial
Statements.
i) The following new or amended standards became effective for the current
annual reporting period and the adoption of the standards and interpretations
have not had a material impact on the Financial Statements of the Company.
Standards & Interpretations Effective for periods commencing on or after
Amendments to IAS 1 Presentation of Financial Statements The amendments clarify that only covenants with which an entity must comply 1 January 2024
on or before the reporting date will affect a liability's classification as
- Non-current liabilities with Covenants current or non-current and the disclosure requirement in the financial
statements for the risk that non-current liabilities with covenant could
- Deferral of Effective Date Amendment (published 15 July 2020) become repayable within twelve months.
Classification of Liabilities as Current or
Non-Current (Amendments to IAS 1)
(publicised 23 January 2020)
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) The amendments address the disclosure requirements to enhance the transparency 1 January 2024
of supplier finance arrangements and their effects on a company's liabilities,
cash flows and exposure to liquidity risk.
ii) At the date of authorisation of the Company's Financial Statements, the
following relevant standards that potentially
impact the Company are in issue but are not yet effective and have not been
applied in the Financial Statements:
Standards & Interpretations Effective for periods commencing on or after
Lack of Exchangeability (Amendments to IAS 21) The amendments specify how to assess whether a currency is exchangeable and 1 January 2025
how to determine a spot exchange rate if it is not.
Annual Improvements to IFRS The amendments clarify the requirements for: 1 January 2026
Accounting Standards-Volume 11
Hedge accounting by a first-time adopter (IFRS 1 First-time Adoption of
International Financial Reporting Standards); Gain or loss on derecognition
(IFRS 7 Financial Instruments: Disclosures); Transaction price (IFRS 9
Financial Instruments); Derecognition of lease liabilities (IFRS 9);
Determination of a 'de facto agent' (IFRS 10 Consolidated Financial
Statements) and Cost method (IAS 7 Statement of Cash Flows).
Amendments to IFRS 9 and IFRS 7- Amendments to the Classification and The amendments address two of the issues identified during the 1 January 2026
Measurement of Financial Instruments post-implementation review of IFRS 9, being the derecognition of a financial
liability settled through electronic transfer and the classification of
financial assets, it also introduces new and amended disclosure
requirements.
The Directors expect that the adoption of the standards listed above will have
either no impact or that any impact will not be material on the Financial
Statements of the Company in future periods.
3. Investment
Income
Year ended Year ended
30 September 30 September
2025 2024
£'000 £'000
Revenue:
UK Dividend income 316 306
Overseas Dividend income 3,072 5,063
Total investment income allocated to revenue 3,388 5,369
All investment income is derived from listed
investments.
4. Other Operating Income
Year ended Year ended
30 September 30 September
2025 2024
£'000 £'000
Bank interest 83 122
Total other operating income 83 122
5. (Losses)/Gains on Investments Held at Fair Value
Year ended Year ended
30 September 30 September
2025 2024
£'000 £'000
Net (losses)/gains on disposal of investments at historic cost (21,971) 48,604
Less fair value adjustments in earlier years (10,665) (10,156)
(Losses)/gains based on carrying value at previous balance sheet date (32,636) 38,448
Valuation gains on investments held during the year 6,078 24,792
(26,558) 63,240
6. Other Currency (Losses)/Gains
Year ended Year ended
30 September 30 September
2025 2024
£'000 £'000
Exchange (losses)/gains on currency balances (390) 281
7. Investment Management Fee
Year ended Year ended
30 September 30 September
2025 2024
£'000 £'000
Management fee
- charged to revenue 631 687
- charged to capital 2,522 2,747
Investment management fee payable to Polar Capital LLP 3,153 3,434
Investment Management fees are allocated 20% to revenue and 80% to capital.
Details of the fee arrangements are given in the Strategic Report in the
Annual Report.
8. Other Administrative Expenses (including VAT where appropriate)
Year ended Year ended
30 September 30 September
2025 2024
£'000 £'000
Directors' fees and expenses(1) 146 150
Directors' NIC 16 16
Auditors' remuneration: For audit of the Company Financial Statements 60 55
Depositary fee 27 29
Registrar fee 35 39
Custody and other bank charges 45 65
UKLA and LSE listing fees 56 53
Legal & professional fee(2) 23 7
AIC fees 22 21
Directors' and officers liability insurance 21 20
Corporate brokers fee 25 25
Marketing expenses(3) 110 111
Shareholder communications 24 24
HSBC administration fee 194 215
Other expenses(4) 51 3
Total other administrative expenses allocated to revenue 855 833
Costs related to redemption of ZDP shares and liquidation of PCGH ZDP plc 8 100
subsidiary
Total other administrative expenses 863 933
1 Full disclosure is given in the Directors' Remuneration Report in the Annual
Report.
2 Includes Herbert Smith fee for professional and legal advice.
3 Includes bespoke marketing budget of £50,000 (2024: £50,000) and third
party fees of £30,000 (2024: £30,000).
4 Includes NED recruitment fees
Ongoing charges represent the total expenses of the fund, excluding finance
costs and tax, expressed as a percentage of the average daily net asset value,
in accordance with AIC guidance issued in May 2012.
The ongoing charges ratio for the year ended 30 September 2025 was 0.90%
(2024: 0.88%). See Alternative Performance Measures in the Annual Report.
9. Finance Costs
Year ended 30 September 2025 Year ended 30 September 2024
Revenue return Capital return Total return Revenue return Capital return Total return
£'000 £'000 £'000 £'000 £'000 £'000
Interest on overdrafts 7 26 33 14 54 68
Appropriation to ZDP shares - - - - 828 828
Total finance costs 7 26 33 14 882 896
10. Taxation
Year ended Year ended
30 September 2025
30 September 2024
Revenue return Capital Total return Revenue return Capital return Total return
£'000 return £'000 £'000 £'000 £'000
£'000
a) Analysis of tax charge for the year:
Overseas tax 424 - 424 708 - 708
Indian capital gains tax - 103 103 - 240 240
Total tax for the year (see note 10b) 424 103 527 708 240 948
b) Factors affecting tax charge for the year:
The charge for the year can be reconciled to the profit per the Statement of
Comprehensive Income as follows:
30 September 2025 30 September 2024
Revenue return Capital Total return Revenue return Capital return Total return
£'000 return £'000 £'000 £'000 £'000
£'000
(Loss)/profit before tax 1,978 (29,504) (27,526) 3,957 59,792 63,749
Tax at the UK corporation tax rate of 25% (2024: 25%) 495 (7,376) (6,881) 989 14,948 15,937
Tax effect of non-taxable dividends (847) - (847) (1,342) - (1,342)
Losses/(gains) on investments that are not taxable - 6,737 6,737 - (15,879) (15,879)
Non taxable expenses not utilised in the year 352 637 989 353 699 1,052
Overseas tax suffered 424 - 424 708 - 708
Indian capital gains tax - 103 103 - 240 240
Expenses not allowable - 2 2 - 232 232
Total tax for the year (see note 10a) 424 103 527 708 240 948
c) Factors that may affect future tax charges:
The Company has an unrecognised deferred tax asset of £9,353,000 (2024:
£8,364,000). The deferred tax asset is based on the current corporation tax
rate of 25% (2024: 25%)
It is unlikely that the Company will generate sufficient taxable profits in
the future to utilise these expenses and deficits and therefore no deferred
tax asset has been recognised.
Due to the Company's tax status as an investment trust and the intention to
continue meeting the conditions required to obtain approval of such status in
the foreseeable future, the Company has not provided tax on any capital gains
arising on the revaluation or disposal of investments held by the Company.
The Company is liable to Indian capital gains tax under Section 115 AD of the
Indian Income Tax Act 1961. A tax provision on Indian capital gains is
calculated based on the long term (securities held more than one year) or
short term (securities held less than one year) nature of the investments and
the applicable tax rate at the year end. The current rates of short-term tax
rates are 20% and the long term tax rates are 12.5% respectively. At the year
ended 30 September 2025, the Company has a deferred tax liability of £102,000
(2024: £nil) on capital gains which may arise if Indian investments are
sold.
11. Amounts Recognised as Distributions to Ordinary Shareholders in the
Year
Dividends paid in the year ended 30 September 2025
Payment date No of shares Pence per share Year ended
30 September 2025
£'000
28 February 2025 121,270,000 1.20p 1,455
29 August 2025 121,270,000 1.20p 1,455
2,910
The revenue available for distribution by way of dividend for the year is
£1,554,000 (2024: £3,249,000).
The total dividends payable in respect of the financial year ended 30
September 2025 which is the basis on which the
requirements of Section 1158 Corporation Tax Act 2010 are considered, is set
out below:
Payment date No of shares Pence per share Year ended
30 September 2025
£'000
29 August 2025 121,270,000 1.20p 1,455
27 February 2026 94,116,974* 1.00p 941
2,396
*Based on the latest practicable date, 6 January 2026
Dividends paid in the year ended 30 September 2024
Payment date No of shares Pence per share Year ended
30 September 2024
£'000
29 February 2024 121,270,000 1.20p 1,455
30 August 2024 121,270,000 1.20p 1,455
2,910
The total dividends payable in respect of the financial year ended 30
September 2024, which is the basis on which the requirements of Section 1158
Corporation Tax Act 2010 are considered, is set out below:
Payment date No of shares Pence per share Year ended
30 September 2024
£'000
30 August 2024 121,270,000 1.20p 1,455
28 February 2025 121,270,000 1.20p 1,455
2,910
All dividends are paid as interim dividends, and all have been charged to
revenue, where necessary utilising the revenue reserves.
The dividends paid in February each year relate to a dividend declared in
respect of the previous financial year but paid in the current accounting
year.
12. (Losses)/Earnings per Ordinary Share
Year ended Year ended
30 September 2025 30 September 2024
Revenue return Capital return Total return Revenue return Capital return Total return
The calculation of basic(losses)/ earnings per share is based
on the following data:
Net (loss)/profit for the year (£'000) 1,554 (29,607) (28,053) 3,249 59,552 62,801
Weighted average Ordinary 121,270,000 121,270,000 121,270,000 121,270,000 121,270,000 121,270,000
shares in issue during the year
Basic - Ordinary shares (pence) 1.28 (24.41) (23.13) 2.68 49.11 51.79
As at 30 September 2025 there were no potentially dilutive shares in issue.
13. Investments held at fair value
a) Investments held at far value through profit or loss
30 September 2025 30 September 2024
£'000 £'000
Opening book cost 440,211 438,965
Opening investment holding gains 33,925 19,290
Opening fair value 474,136 458,255
Analysis of transactions made during the year
Purchases at cost 489,301 689,721
Sales proceeds received (497,444) (737,080)
(Losses)/Gains on investments held at fair value (26,558) 63,240
Closing fair value 439,435 474,136
Closing book cost 410,097 440,211
Closing investment holding gains 29,338 33,925
Closing fair value 439,435 474,136
The Company received £497,444,000 (2024: £737,080,000) from disposal of
investments in the year. The book cost of these investments when they were
purchased were £519,415,000 (2024: £688,475,000). 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.
The following transaction costs, including stamp duty and broker commissions
were incurred during the year:
30 September 30 September
2025 2024
£'000 £'000
On acquisition 442 540
On disposal 237 383
679 923
b) Fair value hierarchy
30 September 30 September
2025 2024
£'000 £'000
Level 1 assets 439,435 474,136
Valuation at the end of the year 439,435 474,136
All Level 1 assets are traded on a recognised Stock Exchange.
c) Subsidiary undertaking
Company and business Country of registration, incorporation and operation Number and class of shares held by the Company Holding
PCGH ZDP Plc England and Wales 50,000 Ordinary shares of £1 100%
Following the full repayment of the ZDP shareholders on 19 June 2024, the
subsidiary was placed into liquidation.
14. Called up Share Capital
i. Ordinary shares - Allotted, Called up and Fully paid:
30 September 30 September
2025 2024
£'000 £'000
Ordinary shares of nominal value 25p each:
Opening balance of 121,270,000 (2024: 121,270,000) Ordinary shares in issue 30,317 30,317
121,270,000 (2024: 121,270,000) Ordinary shares in issue 30,317 30,317
2,879,256 (2024: 2,879,256) Ordinary shares, held in treasury 720 720
Total of 124,149,256 (2024: 124,149,256) shares 31,037 31,037
No Ordinary shares were repurchased or issued during the year
(2024: nil).
The Ordinary shares held in treasury have no voting rights and
are not entitled to dividends.
ii. Subsidiary Company (For Information Purposes)
ZDP shares - Allotted, Called up and Fully paid: 30 September 30 September
2025 2024
£'000 £'000
ZDP shares of nominal value 1p each: - 32,128
Opening balance of nil ZDP shares (2024: 32,128,437)
Redemption of nil ZDP shares (2024: 32,128,437) ZDP shares - (32,128)
Allotted, Called up and Fully paid: nil (2024: nil) ZDP shares of 1p - -
At 30 September - -
The ZDP shares were fully repaid and redeemed on 19 of June 2024 in the amount
of £39,515,000 and the subsidiary was subsequently placed into liquidation.
15. Net Asset Value Per Ordinarily Share
Ordinary shares 30 September 30 September
2025 2024
Net assets attributable to Ordinary Shareholders (£'000) 448,110 479,073
Ordinary shares in issue at end of year 121,270,000 121,270,000
Net asset value per Ordinary share (pence) 369.51 395.05
As at 30 September 2025 there were no potentially dilutive shares in issue.
16. Cash and Cash Equivalents
30 September 30 September
2025 2024
£'000 £'000
Cash at bank 17,035 9,552
Bank Overdraft (1) (374)
Cash and cash equivalents 17,034 9,178
17. Transactions with the Investment Manager and Related Party
Transactions
(a) Transactions with the Manager
Under the terms of an agreement dated 26 May 2010 the Company has appointed
Polar Capital LLP ("Polar Capital") to provide investment management,
accounting, secretarial and administrative services. Details of the fee
arrangement for these services are given in the Strategic Report. The total
fees, paid under this agreement to Polar Capital in respect of the year ended
30 September 2025 were £3,153,000 (2024: £3,434,000) of which £262,000
(2024: £288,000) was outstanding at the year-end.
(b) Related party transactions
The Company has no employees and therefore no key management personnel other
than the Directors. The Company has paid £146,000 (2024: £150,000) to the
Directors and the Remuneration Report including Directors' shareholdings and
movements within the year is set out on in the Annual Report.
Refer to note 13(c) for details of the subsidiary undertaking.
18. Post Balance Sheet
Events
Per the Articles of Association (prior to 27 November 2025), the Company was
required to propose a special resolution for the winding-up of the Company at
the first AGM after 1 March 2025 unless alternative reconstruction proposals
were approved by the shareholders prior to that date. Accordingly, in
substitution of the fixed life, Shareholders who did not wish to continue
their investment in the Company, were offered the opportunity to tender their
shares at the prevailing NAV per ordinary share less costs and other
appropriate adjustments. On 26 November 2025, the Company announced to the
market that the total number of shares tendered was 27,253,026 with a total of
£115,991,604 being paid out to Shareholders based on a tender price of
425.61p. Following the tender offer, the total number of ordinary shares in
issue was 94,016,974 and 30,132,282 shares were held in treasury.
Subsequent to the tender offer process, 525,000 shares were reissued from
those purchased in the tender, resulting in an issued share capital of
124,149,256 of which 29,607,282 are held in treasury.
There are no other significant events that have occurred after the end of the
reporting period to the date of this report which require disclosure.
AGM
The Annual Report and separate Notice for the Annual General Meeting will be
posted to Shareholders in January 2026 and is available from the Company
Secretary at the Company's Registered Office, (16 Palace Street London SW1E
5JD) or from the Company's website. The AGM will be held at the Company's
Registered Office at 2:00pm on 26 February 2026.
FORWARD LOOKING STATEMENTS
Certain statements included in this Annual Report and Financial Statements
contain forward-looking information concerning the Company's strategy,
operations, financial performance or condition, outlook, growth opportunities
or circumstances in the countries, sectors or markets in which the Company
operates.
By their nature, forward-looking statements involve uncertainty because they
depend on future circumstances, and relate to events, not all of which are
within the Company's control or can be predicted by the Company.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct.
Actual results could differ materially from those set out in the
forward-looking statements. For a detailed analysis of the factors that may
affect our business, financial performance or results of operations, we urge
you to look at the principal risks and uncertainties included in the Strategic
Report Section the Annual Report and Financial Statements.
No part of this Annual Report constitutes, or shall be taken to constitute, an
invitation or inducement to invest in Polar Capital Global Healthcare Trust
plc or any other entity and must not be relied upon in any way in connection
with an investment decision. The Company undertakes no obligation to update
any forward-looking statements.
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the company's website (or any other website) is
incorporated into, or forms part of, this announcement.
-END-
i (#_ednref1) The value of a listed company's shares owned by shareholders;
market capitalisation (cap) is the price per share multiplied by the number of
shares.
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