REG - RIT Cap. Partners - Final Results
03/03/2025 07:15
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RNS Number : 9766Y RIT Capital Partners PLC 03 March 2025
RIT Capital Partners plc
("RIT" or the "Company")
3 March 2025
Results for the year ended 31 December 2024
Positive returns from all three investment pillars, with 10.3% dividend rise
planned for 2025
· The Company's Report and Accounts are available
here: http://www.rns-pdf.londonstockexchange.com/rns/9766Y_1-2025-2-28.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/9766Y_1-2025-2-28.pdf)
Highlights
· Net Asset Value (NAV) per share total return for the year of 9.4%(1)
(including dividends) (2023: 3.2%)
· Total shareholder return of 7.9% (including dividends) (2023: -9.6%)
· Net assets up 4.4% to £3.7bn (2023: £3.6bn)
· Quoted Equities contributed 6.9% to NAV, with returns of 15.8%
- Progressively increased portfolio allocation to 46.2% (31 Dec 2023: 38.4%)
- Strong performances from direct stock investments in Quality and SMID-cap
companies, and from specialist managers focusing on Japan and China
· Private Investments contributed 1.8% to NAV, with returns of 4.8% following
two years in negative territory
- Private fund investments were the biggest contributor, while direct
investments were broadly flat
- £170m of realisations, supported by improving IPO conditions and M&A
activity
- Invested in SpaceX, the private space launch and satellite communications
company
- Reduced allocation to 33.4% (2023: 35.9%), in line with target
· Uncorrelated Strategies contributed 1.3% to NAV, with returns of 4.5%
- Allocation decreased marginally to 23.8% (2023: 25.6%) with positive returns
from credit, macro and market-neutral strategies partially offset by declines
in gilts and carbon credits
· Currency detracted modestly, as sterling strengthened against other major
currencies, except the US dollar
· Our Ongoing Charges Figure, a measure of day-to-day running costs, was stable
at 0.76% for the year (2023: 0.77%)
· Discount of -24.0% at 31 December 2024, an issue facing much of the investment
trust sector. Narrowing the discount remains a key priority of the Board
· In the last 10 years, RIT has generated a NAV per share total return of
108.6%, more than doubling shareholders' capital
· Since listing in 1988, the annualised share price total return has compounded
at 10.5% per annum, and the NAV per share total return at 10.5% per annum
· £10,000 invested in RIT at listing would be worth approximately
£378,000 today(2) compared to the same amount invested in the ACWI (50% £),
which would be worth approximately £147,000
· Sir James Leigh-Pemberton has decided to retire as Chairman at the forthcoming
AGM in May due to increased demands from his wider commitments. Subject to his
re-election, the Board has nominated the Senior Independent Director, Philippe
Costeletos, to replace Sir James
Capital allocation
· 2024 marked the 11(th) successive year of dividend growth
· Bought back £80 million or 4.3 million shares, adding 0.8% to the NAV per
share return
· Planned dividend of 43p per share in 2025, a 10.3% increase on 2024, to be
paid in two equal instalments in April and October
· The Board is continuing to allocate capital to buybacks in 2025, signalling
its confidence in the NAV and overall approach
Financial summary
31 December 2024 31 December 2023 Return / Change
RIT NAV per share total return 9.4% 3.2% 6.2% pts
RIT share price total return 7.9% -9.6% 17.5% pts
NAV per share 2,614p(1) 2,426p 7.7%
Share price 1,986p 1,882p 5.5%
Premium/(discount) -24.0% -22.4% -1.6% pts
Net assets £3,731m £3,573m 4.4%
Gearing 8.9% 3.5% 5.4% pts
OCF for the year 0.76% 0.77% -0.01% pt
Total dividend in year 39.0p 38.0p 2.6%
Outlook
· While markets remain uncertain, our flexible and diversified portfolio is
designed to be resilient in any environment
· Buoyant equity markets face risks from high valuations and concentrated
technology performance, underlining the importance of a selective approach
· Private Investments are set to benefit from improved regulatory conditions,
which should support growth in M&A and IPO activity, providing
monetisation opportunities and enhancing returns
· In Uncorrelated Strategies, we see compelling opportunities in certain areas
of the market, while a more normalised interest rate environment remains
supportive
· We continue to see investment opportunities in megatrends shaping the global
economy including the diffusion of technology, medical advances increasing
longevity and quality of life, and a multi-polar world
· Our brand, in-house expertise, network of specialist managers and flexible
capital structure enable us to take advantage of these megatrends, driving
long-term returns
(1) Unchanged from the preliminary, unaudited 31 December 2024 NAV reported to
shareholders on 6 February 2025. Over the same period, the Company's two
reference indices, CPI plus 3% and the ACWI (50% £) were up 5.5% and 20.1%
respectively
(2) As at 31 December 2024
Sir James Leigh-Pemberton, Chairman of RIT Capital Partners plc, said:
"All three of our investment pillars saw positive performance, led by the
Quoted Equities portfolio which had another good year. In 2024, we carefully
reduced our exposure to Private Investments to a third of net asset value and
our emphasis on returns to shareholders continues through a progressive
dividend policy and share buybacks."
Maggie Fanari, Chief Executive Officer of J. Rothschild Capital Management,
said:
"2024 was a year of solid progress for the Company, and we enter 2025 with the
portfolio well positioned for continued growth. Our Quoted Equities pillar
delivered mid-teen returns, while in Private Investments we enhanced
performance and realisations and our SpaceX investment demonstrates our
ability to access exclusive opportunities not typically available to
individual investors. While macroeconomic uncertainties remain, we believe our
flexible and resilient portfolio is well positioned to take advantage of
global opportunities across asset classes while managing risks, and to deliver
returns in line with our long-term trend."
Annual General Meeting:
This year's Annual General Meeting will be held on Thursday, 1 May at 12:00 pm
at Spencer House, London SW1A 1NR
For more information:
J. Rothschild Capital Management (Manager):
T: 020 7647 8565
E: investorrelations@ritcap.co.uk (mailto:investorrelations@ritcap.co.uk)
Deutsche Numis (Joint broker):
David Benda / Nathan Brown
T: 020 7260 1000
JP Morgan Cazenove (Joint broker):
William Simmonds
T: 020 3493 8000
Brunswick Group LLP (Media enquiries):
Nick Cosgrove, Sofie Brewis
T: 020 7404 5959
RIT@BrunswickGroup.com (mailto:RIT@BrunswickGroup.com)
www.ritcap.com (http://www.ritcap.com)
The following is extracted from the Company's Report and Accounts
COMPANY HIGHLIGHTS
Key company data 31 December 2024 31 December 2023 Change
NAV per share 2,614p 2,426p 7.7%
Share price 1,986p 1,882p 5.5%
Premium/(discount) -24.0% -22.4% -1.6% pts
Net assets £3,731m £3,573m 4.4%
Gearing(1) 8.9% 3.5% 5.4% pts
Ongoing charges figure(1) 0.76% 0.77% -0.01% pt
Total dividend paid in year 39.0p 38.0p 2.6%
Performance history 1 Year 3 Years 5 Years 10 Years Since
inception,
1988
RIT NAV per share total return(1) 9.4% -2.1% 40.9% 108.6% 3,667%
CPI plus 3.0% per annum 5.5% 28.1% 43.9% 80.4% 678%
ACWI (50% £) 20.1% 23.7% 67.2% 169.8% 1,373%
RIT share price total return(1) 7.9% -23.4% 3.0% 70.1% 3,683%
FTSE 250 Index(2) 8.1% -3.5% 7.7% 68.1% 1,746%
(1) The Group's designated Alternative Performance Measures (APMs) are the NAV per
share total return, share price total return, gearing, and ongoing charges
figure (OCF). A description of the terms used in this RNS, including further
information on the calculation of APMs, is set out in the Glossary and APMs
section.
(2 ) RIT's shares are a constituent of the FTSE 250 Index, which is not considered
a Key Performance Indicator (KPI). Before June 1998, when the total return
index was introduced, the index was measured using a capital-only version.
CHAIRMAN'S STATEMENT
Sir James Leigh-Pemberton
Introduction
2024 was a year of continuing market uncertainty, against the backdrop of
sustained hostilities in Europe and the Middle East, and significant political
change. While the US economy exhibited relatively robust growth, other Western
economies were affected by rising input costs, muted consumer demand, and
stubborn levels of unemployment; China's growth was also relatively modest
despite considerable stimulus measures. Collectively, these posed challenges
throughout the year to policy makers and investors alike.
NAV performance
In these circumstances I am pleased to report that for the year ended 31
December 2024, our NAV per share increased by 9.4% (including dividends) to
finish the year at 2,614p. All three of our investment pillars saw positive
performance, led by the Quoted Equity portfolio which had another good year.
We also saw positive returns from our Private Investments and Uncorrelated
Strategies. Further details on performance and attribution are set out later.
Our Manager, J. Rothschild Capital Management Limited (JRCM), is tasked with
managing our net asset value in line with the long-term objectives set by the
Board. Our founder, the late Lord Jacob Rothschild often noted that our
overall approach to capital growth is designed to be prudent. How this is
reflected in the portfolio can vary from year to year, but it is embedded in
everything we do - how we select or structure individual investments, how we
combine complementary investments into our diversified portfolio, and how we
use protection through hedges. RIT is not an absolute return trust, nor a
trust that is fully-invested in stocks - we sit in between, with our portfolio
constructed to generate real returns over time.
Our NAV performance was above our inflation hurdle, CPI plus 3% which measured
5.5%, and behind our equity index of the ACWI (50% £), at 20.1%. The latter
was once again dominated by the mega-cap technology stocks; by contrast, the
broader, equal-weighted ACWI returned approximately 10% for the year.
Share price performance and discount
Our shares ended the year at 1,986p per share, representing a total return to
shareholders including the dividend, of 7.9%. While this is a positive
outcome, we were nonetheless disappointed to see the discount remaining wider
than we feel is warranted at -24% at the year end. Closing the discount is a
matter of the upmost importance to all of us. Your Board and our many
colleagues in JRCM are shareholders with significant 'skin in the game'. Our
Senior Independent Director, Philippe Costeletos and I, as well as our JRCM
colleagues, have spoken with many shareholders on this topic during the year,
and we are grateful for their open and constructive feedback.
We have taken a range of actions during the year; I discuss below how we have
carefully reduced our exposure to private investments, and our continued
emphasis on returns to shareholders through dividends and buybacks. We have
also brought in a new leadership team at our Manager, and have transformed our
approach to disclosures, investor relations and communications. This is all
designed to ensure that shareholders understand as clearly as possible the
objectives the portfolio is designed to achieve, its composition, and how we
allocate our capital. It has been gratifying to receive so many positive
comments from existing and new shareholders in response.
One of the headwinds facing investment trusts over recent years has been the
confusing cost disclosures required under the EU-inherited legislation called
PRIIPs. As a public company our costs have always been disclosed throughout
this report including in our income statement. We have also shown the AIC's
recommended Ongoing Charges Figure or OCF, a measure of the day-to-day running
costs of our business (which for 2024 was 0.76% of average net assets). All
the costs associated with our business and our investments, including fees
paid to external managers, have always been reflected in our NAV and therefore
our share price. Regrettably, the PRIIPs legislation resulted in disclosures
which suggested these costs were additional to those reflected in our NAV. In
September 2024, after extensive efforts from many, the FCA and the Government
announced plans to exclude investment trusts from this legislation. This was a
welcome step enabling investment trust shares to be treated the same as other
listed companies. We are closely monitoring the proposed replacement regime
and will ensure our voice is heard in an effort to enable clear and accurate
reporting of our costs.
Capital allocation, dividends and buybacks
In our 2023 Annual Report, I set out the Board's approach to capital
allocation, both to the investment portfolio, and to returning capital to
shareholders in the form of dividends and share buybacks. I will deal with
these in turn.
Our Company's objective is to grow shareholders' wealth meaningfully over
time. To achieve this requires that sufficient capital is deployed in the
right investments, in a diversified portfolio capable of generating long-term
capital growth in a prudent, risk-managed way. Private investments have been a
part of our investment approach since the early days of what was originally
the Rothschild Investment Trust. They have been a strong generator of
long-term capital growth over the lifespan of our Company and remain an asset
class which we believe has an important role to play in our diversified
portfolio. Indeed, it was the success of this portfolio pillar which drove an
increase in its percentage of our NAV above its typical historical weighting.
Nevertheless, conscious of the broader market's concerns regarding private
investments, I set out in last year's statement our intention to reduce their
portfolio weighting to between a quarter and a third of NAV within two years.
One year on, private investments have already reduced to 33% of NAV, within
our target range. Our Manager has achieved this by restricting new investments
and capitalising on advantageous opportunities to realise assets. The
portfolio generated sizeable realisations during the year with fund inflows
exceeding capital calls, and realisations from the direct portfolio (at a
price above the previous carrying value). The net cash surplus from this
pillar helped fund our buybacks and dividends. SpaceX was a new direct private
investment in 2024, reinforcing the strength of our network.
We recognise that for many of our shareholders, our progressive approach to
dividends represents a helpful source of growing income. We paid a dividend
during 2024 of 39 pence per share, an increase of 2.6% over 2023. Reflecting
our confidence in our approach, we propose to increase the dividend for 2025
above inflation, to 43p per share (approximately £62m, an increase of 10.3%).
This will be the 12th successive year of dividend increases, and we expect to
maintain or increase the dividend, subject always to our capital preservation
needs.
The ability to utilise share buybacks to purchase our shares at a discount has
been a feature of our approach for many years, and we have deployed it at
scale since early 2023. During 2024 we invested a further £80m in buybacks,
acquiring 4.3 million shares at a discount to NAV, which added around 0.8% to
our NAV per share return. We recognise the benefits of buybacks in terms of
this NAV per share accretion - buying a portfolio that we believe in very
cheaply is an attractive investment. Furthermore, it signals our confidence in
our NAV and overall approach, and helps reduce share price volatility.
However, buybacks are also illiquid and a 'one-time' investment, which
ultimately reduces our scale. As such, we are careful to balance the
allocation of capital to buybacks depending on the level of the discount (and
how it has moved relative to the broader market) with the need to sow the
seeds for future gains. Nonetheless, we expect to continue to utilise buybacks
during 2025, and we will keep capital allocation under continuous review,
retaining the flexibility to adjust how much capital we deploy to buybacks
depending on the size of the discount.
Outlook
The global economic landscape and financial markets may continue to exhibit
resilience, but we are mindful that they also face a range of risks. These
include the stubbornness of inflationary pressures, growing levels of
government borrowing and the renewed possibility of tariffs. We have already
seen significant moves in government bond yields as these risks become more
apparent. Equity valuations feel somewhat stretched, and the US Federal
Reserve faces a delicate balance, navigating between sticky inflation and
growing concerns about economic slowing in 2025. Policy makers in governments
and central banks face a difficult balancing act between stimulating growth,
fiscal prudence and bringing inflation down to targeted levels, while
perceptions of growing wealth inequality give rise to increasing political
polarisation.
That said, there are also reasons for optimism. In the US, strong consumer
demand, full employment and fiscal stimulus continue to drive robust economic
growth, while the trend of inflation has been downward. Corporate earnings
continue to be strong, and innovation, particularly technology-led, has the
potential to drive further productivity gains. Within the private equity
market, we have also seen an increasing number of successful IPOs and a
recovery in M&A transactions, providing a more fertile ground for exits.
In this environment, asset allocation and investment selection become
increasingly important; we will continue to approach our portfolio composition
with care, while acknowledging that such market complexities provide
attractive opportunities for our diversified and unconstrained approach.
Governance and employees
We are committed to retaining an experienced Board, sufficiently diverse in
all respects to foster high quality debate, oversight, and decision making.
Our Board currently has a 50:50 gender split, and with two Directors from a
minority ethnic background. I am pleased therefore that we comply with the
recommendations of the FTSE Women Leaders Review, the Parker Review and the
FCA UK Listing Rules in terms of Board composition. In October 2024, we
welcomed Helena Coles as a new non-executive Director. Helena's significant
experience in global public equities and the listed investment trust sector
complements the skill set of the Board, and she has already made valuable
contributions as a Director and as a member of the Audit and Risk
Committee.
During 2024, we maintained our focus on ESG and we continue to recognise the
importance of communicating how we are integrating ESG into our strategy and
decision making. You will see our first report regarding the Task Force on
Climate-related Financial Disclosures in our Sustainability Report.
Finally, I have taken the very difficult decision, as a result of the
increased demands from my wider commitments, not to stand for re-election as a
Director. I will therefore retire as the Chairman of your Company at the
forthcoming AGM in May. Subject to his re-election, the Board has nominated
our Senior Independent Director, Philippe Costeletos, to replace me as
Chairman. As part of our succession planning, Philippe and I discussed this
proposed change with many of our largest shareholders, and we are most
grateful for their support. I am delighted that Philippe is succeeding me and
I am sure that his exceptional skills, experience and good judgement will
continue to serve the Company well in the years to come.
Succeeding Lord Rothschild as your Chairman has been an honour and a
privilege, and I want to thank both my Board colleagues for their dedication,
support and wise counsel over the years, and likewise colleagues at our
subsidiaries, our Manager, JRCM and our property and events business, Spencer
House Limited, for their hard work, energy and professionalism. Maggie Fanari
has been in her new role as CEO of JRCM since March 2024, and the Board is
pleased with the scope and pace of the progress that she and her team have
already made this year. I have every confidence that the culture of
performance and collaboration which is the hallmark of RIT, will continue and
will be enhanced under our Company's new leadership team, and I look forward
to retaining a close interest in progress as a long-term shareholder.
I would also like to thank you, our shareholders, for your loyalty and your
constructive feedback. Regular interactions with shareholders from all
backgrounds have been a highlight of my tenure, and I wish you all the very
best for the future.
Sir James Leigh-Pemberton
Chairman
28 February 2025
CEO Letter
Dear Shareholder,
2024 was a year of solid progress for the Company, and we enter 2025 well
positioned for growth. We see exciting prospects ahead for the portfolio, and
I am delighted to have this opportunity to update you on these along with
developments over the last 12 months.
Strategy and performance
Our goal is to help you accumulate wealth over time by building a portfolio
offering growth, resilience and diversification with lower risk than equity
markets. By leveraging our brand, internal expertise and specialist managers,
we offer access to exclusive opportunities not typically available to
individual investors, a recent example being SpaceX, the private space launch
and satellite communications company.
In 2024, we delivered a net asset value (NAV) per share total return of 9.4%,
with positive performance across all three pillars. Our annualised return
since inception is 10.5%, underscoring our commitment to delivering healthy
returns for our shareholders over the long term.
We increased our allocation to Quoted Equities, ending the year at 46.2% of
NAV, and generated mid-teen returns. This pillar benefited from our selection
of quality and small-to-mid cap stocks, along with a strong performance from
managers investing in China and Japan.
Our Private Investments portfolio produced positive returns following two
years in negative territory. During the year, we decreased the book to around
a third of NAV (33.4% from 35.9% at the end of 2023). We achieved this largely
through distributions and realisations, which in aggregate were above previous
carrying values.
Our Uncorrelated Strategies play an important role in diversifying the
portfolio, with steady contributions during the year.
Increased transparency and engagement
The exclusion of investment trusts from PRIIPs legislation in 2024 marked
significant progress, aligning our reporting with other listed companies. Our
Ongoing Charges Figure (OCF), a measure of day-to-day running costs, was 0.76%
(2023: 0.77%).
We have strengthened investor communication by hiring the consultancy Cadarn
Capital, relaunching our website, increasing disclosure in our monthly
factsheet and engaging actively with retail investment platforms, media and
other stakeholders.
Investor communication is a two-way process, and I want to thank you for your
invaluable feedback since I became CEO. A key theme has been the share price
discount to NAV, a sector-wide issue. We firmly believe that this
significantly undervalues our portfolio and addressing it is a key priority.
Colleagues at JRCM have interests in approximately £25 million RIT shares at
the year end, reinforcing the close alignment with shareholders.
Alongside enhancing our performance, we are taking action by increasing our
transparency and investor engagement. Our ongoing share buyback programme also
aims to enhance shareholder value by delivering NAV per share accretion.
Outlook
Markets in 2025 offer challenges and opportunities, with the US economy
expected to outpace the eurozone, inflation likely to continue to stabilise
and the uncertain impact of new import tariffs. Buoyant equity markets face
risks from high valuations and concentrated technology performance,
underlining the importance of a selective approach. Meanwhile, private
investments are set to benefit from improved regulatory conditions, supporting
growth in M&A and IPO activity, while certain credit markets and
market-neutral strategies remain attractive.
Against this backdrop, we are building on our foundation for sustainable
growth. We continue to see significant opportunities in megatrends that are
shaping the global economy. These include the diffusion of technology, with AI
and digital transformation extending well beyond traditional tech sectors,
medical advances increasing longevity and quality of life, and a multi-polar
world, with shifting economic power reshaping supply chains and investment
flows.
Our specialist partners provide privileged access to opportunities across
public and private markets, while our flexible capital structure enables us to
deploy capital swiftly where we see compelling returns. We are focused on
delivering long-term capital appreciation and attractive risk-adjusted returns
for shareholders, building a dynamic and resilient portfolio for the years
ahead.
Thank you for your continued engagement and support.
Yours sincerely,
Maggie Fanari
Chief Executive Officer, J. Rothschild Capital Management Limited
MANAGER'S REPORT - EXTRACTS
Performance Highlights
Our NAV per share total return for the year was 9.4% with positive returns
across all three investment pillars. Our annualised return since inception is
10.5%, underscoring our commitment to delivering consistent returns for our
shareholders over the long term.
Compared to our two reference hurdles, the portfolio outperformed CPI plus 3%,
which was up 5.5%, and lagged the fully-invested equity index, ACWI (50% £),
which was up 20.1%. The market saw continued narrowness, with over 60% of
ACWI's returns generated by the top 10 US technology stocks.
Portfolio overview
Within our portfolio we were pleased to see mid-teen returns in our Quoted
Equities pillar, a good contributor despite the narrowness in equity markets,
positive returns from our Private Investments and steady performance from
Uncorrelated Strategies. These positive contributions were generated by a
diverse set of return drivers:
• The Quoted Equities pillar contributed 6.9% to our NAV, a return of 15.8%. Our
stock selection contributed 2.9%, led by our exposures to quality and
small-to-medium-sized companies (SMID-cap). Our quoted equity funds
contributed 4.0%, with strong performance from our managers across our Japan
and China themes.
• Private Investments contributed 1.8% to performance, a 4.8% return. While the
private direct investments were near flat, the funds saw a 6.8% return. We saw
realisations across both parts of the portfolio, resulting in net
distributions from private investments.
• The Uncorrelated Strategies pillar contributed 1.3%, a 4.5% return, led by our
exposures to absolute return and credit funds, with modest offsets from gilts
and carbon credits.
In addition to this positive performance across our investment pillars, the
NAV per share return benefitted from accretion from buybacks, partially offset
by the impact of currency translation on our global portfolio, and costs
(including interest paid on our borrowings).
Asset allocation, returns and contribution
Asset category 2023 2024 2024 2024
% NAV(1)
% NAV(1)
Return(2)
% Contribution
Quoted Equities(3) 38.4% 46.2% 15.8% 6.9%
Private Investments(3) 35.9% 33.4% 4.8% 1.8%
Uncorrelated Strategies 25.6% 23.8% 4.5% 1.3%
Currency 0.9% -1.1% n/a -0.3%
Total investments 100.8% 102.3% n/a 9.7%
Liquidity, borrowings and other(4) -0.8% -2.3% n/a -0.3%
Total 100.0% 100.0% 9.4% 9.4%
(1) The % NAV reflects the market value of the positions (excluding notional
exposure from derivatives).
(2) Returns are estimated, local currency returns, taking into account
derivatives.
(3) Included in the NAV is an adjustment of £159m/4.3% to reallocate quoted
positions held within private funds (2023: £90m/2.5%). The
return/contribution from these positions is in Private Investments.
(4) Including interest, expenses, and accretion benefit of 0.8% from share
buybacks (2023: 1.2%).
Outlook
We are positioned for growth in 2025 focused on navigating change and seizing
opportunities.
As we enter 2025, we do so with a greater sense of confidence in the global
economy. Consumers and businesses have demonstrated resilience in adapting to
higher interest rates, and central banks - including the Federal Reserve -
have now begun to shift toward monetary easing, albeit at a more measured pace
than initially anticipated.
At the same time, structural shifts such as US trade policies and constraints
on immigration in developed markets are creating a negative supply shock,
weighing on global growth while adding inflationary pressures. This dynamic
introduces the possibility that the Federal Reserve may adjust its course on
the easing cycle, introducing additional complexity into market expectations.
Equity markets have delivered two consecutive years of strong returns, leading
to elevated valuations and a highly concentrated performance, driven largely
by a handful of dominant technology stocks. The consensus around "American
exceptionalism" is now well-established, making equities more vulnerable to
shifts in sentiment. Against this backdrop, the flexibility in our approach
will be invaluable in navigating the year ahead.
Despite these macroeconomic and also geopolitical uncertainties, we continue
to identify high-conviction investment opportunities that offer attractive
entry points. Our investment strategy remains anchored in transformative
megatrends that are shaping the global economy. The diffusion of technology
continues at pace, with AI and digital transformation extending well beyond
traditional tech sectors. In healthcare, advances in biotechnology and medical
innovation are increasing both longevity and quality of life, creating
long-term opportunities in this space. Meanwhile, the world is becoming
increasingly multi-polar, with shifting economic power reshaping supply chains
and investment flows. These themes remain central to our portfolio
positioning.
We expect Private Investments to benefit from the momentum seen in the final
quarter of last year. A more favourable regulatory environment should support
an acceleration in M&A and IPO activity, providing monetisation
opportunities for the more mature parts of our portfolio. In Quoted Equities,
we remain committed to investing alongside exceptional managers in our core
themes, such as Japan and Healthcare, while also identifying undervalued
companies with high barriers to entry across the large and mid-cap space.
There are signs that market leadership may broaden, which should favour our
approach and create opportunities for stock selection.
In Uncorrelated Strategies, we see compelling opportunities in certain areas
of the credit market, particularly where companies without access to financing
markets offer attractive yields with a low probability of permanent capital
impairment. At the same time, a more normalised interest rate environment
remains supportive of our macro and equity market-neutral managers.
Our ability to execute on these opportunities is underpinned by the structural
advantages of RIT's investment approach. Our access to deep, long-term
specialist partnerships provides privileged entry into investment
opportunities across public and private markets. Our flexible capital
structure enables us to move swiftly, deploying capital where we see the most
compelling returns. At the same time, we remain disciplined in our portfolio
construction, integrating our investment pillars with rigorous risk management
to ensure a diversified and resilient portfolio.
Through this approach, we remain focused on delivering long-term capital
appreciation and attractive risk-adjusted returns for shareholders. By
positioning ourselves to thrive in uncertainty, we continue to capture value
in an evolving investment landscape, building a portfolio that is both dynamic
and durable for the years ahead.
J. Rothschild Capital Management Limited
PRINCIPAL RISKS - EXTRACT
Risk management and internal control
The principal risks facing RIT are both financial and operational. The ongoing
process for managing the risks, and setting the overall risk appetite and risk
parameters, is the responsibility of the Board and the Audit and Risk
Committee. The risk evaluation is based on an assessment of the principal and
emerging risks facing the Group, and their mitigating actions. The Manager is
responsible for the implementation and day-to-day management of risk and the
system of internal controls throughout the Group.
The Board sets the portfolio risk parameters within which JRCM operates. This
involves an assessment of the nature and level of risk within the portfolio
using qualitative and quantitative methods.
The Board is ultimately responsible for the Group's system of internal
controls, and has delegated the supervision of the internal control system to
the Audit and Risk Committee. Such systems are designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and, as such,
can provide only reasonable and not absolute assurance against any material
misstatement or loss.
As an investment company, RIT is exposed to financial risks inherent in its
portfolio, which are primarily market-related and common to any portfolio with
significant exposure to equities and other financial assets. The ongoing
portfolio and risk management includes an assessment of the macroeconomic and
geopolitical factors that can influence market risk, as well as consideration
of investment-specific risk factors.
Your Company's broad and flexible investment mandate allows the Manager to
take a relatively unconstrained approach to asset allocation and utilise
whatever action is considered appropriate in mitigating any attendant risks to
the portfolio.
With a high degree of volatility in markets and continued geopolitical
tensions, risk management remains critical. The portfolio risk management
approach undertaken by the Manager, and considered regularly by the Board, is
designed to produce a healthy risk-adjusted return over the long term, through
careful portfolio construction, security selection and the considered use of
hedging.
As an investment business, the vast majority of the day-to-day activities
involve the measurement, evaluation and management of risk and reward. With a
corporate objective which includes an element of capital preservation, the
culture and practice of seeking to protect the NAV from undue participation in
down markets through the cycles is well established. However, it is important
to recognise that a carefully designed risk management and internal control
system can only aim to reduce the probability or mitigate the impact; it
cannot remove the risk. With a global investment portfolio having meaningful
exposure to equities, rather than a pure absolute return mandate, RIT's NAV
will not be immune to either falling markets and/or volatility in currency
markets. Equally, with a diversified set of individual and typically
uncorrelated, high return-seeking drivers, the portfolio could encounter
occasions when the level of volatility results in negative alpha in the short
term.
As a permanent capital vehicle, and unlike open-ended funds, we do not need to
manage the portfolio to meet redemptions. With sizeable assets relative to our
modest borrowings and ongoing liabilities, as confirmed later in this section,
we do not consider the Company's viability or going concern to represent
principal risks. Nevertheless, and in particular at times of market stress,
the Manager utilises a detailed, day-to-day liquidity risk management
framework to help effectively manage the balance sheet, ensuring sufficient
liquidity to meet portfolio needs.
Operational and other risks include those related to the legal environment,
regulation, taxation, cyber security, climate and other areas where internal
or external factors could result in financial or reputational loss. These are
also managed by JRCM with regular reporting to, and review by, the Audit and
Risk Committee and the Board.
Principal risks
The Board has carried out a robust assessment of the emerging and principal
risks facing the Company, with input from the Audit and Risk Committee, as
well as the Manager.
Following this assessment, the Board has concluded that there are no material
emerging risks, and the principal risks are described below:
Risk Mitigation
Investment strategy risk
As an investment company, a key risk is that the investment strategy, guided
by the Investment Policy: The Board is responsible for monitoring the investment strategy to ensure it
is consistent with the Investment Policy and appropriate to deliver
"To invest in a widely diversified, international portfolio across a range of performance in line with the Corporate Objective. The Directors receive a
asset classes, both quoted and unquoted; to allocate part of the portfolio to detailed monthly report from the Manager to enable them to monitor investment
exceptional managers in order to ensure access to the best external talent performance, attribution, and exposure. They also receive a comprehensive
available." investment report from the Manager in advance of the quarterly Board meetings.
does not deliver the Corporate Objective:
The overall risk appetite is set by the Board, with portfolio risk managed by
JRCM within prescribed limits. This involves careful assessment of the nature
"To deliver long-term capital growth, while preserving shareholders' capital; and level of risk within the portfolio using qualitative and quantitative
to invest without the constraints of a formal benchmark, but to deliver for methods.
shareholders increases in capital value in excess of the relevant indices over
time."
The JRCM Investment Committee meets regularly to review overall investment
performance, portfolio exposure and significant new investments.
Discount risk
Investment trust shares trade at a price which can be at a discount or premium
relative to their net asset value. If trading at a discount, there is a risk To manage this risk, and to reduce the volatility for shareholders, the Board
that a widening of the discount may result in shareholders achieving a return monitors the level of discount/premium at which the shares trade and the Group
which does not reflect the underlying investment performance of the Company. has authority to buy back its existing shares when deemed to be in the best
interest of the Company and its shareholders. Buying back shares at a discount
signals the Board's confidence in the overall approach and the NAV to
shareholders, and is accretive to the NAV per share return.
In addition, the Group is continuing to invest in developing its investor
relations activity and overall approach to communications to help ensure that
shareholders have the best understanding of the strategy and approach to
investing.
Market risk
Price risk The Group has a widely diversified investment portfolio which significantly
RIT invests in a number of asset categories including stocks, equity funds, reduces the exposure to individual asset price risk. Detailed portfolio
private investments, absolute return and credit, real assets, government bonds valuations and exposure analysis are prepared regularly and form the basis for
and derivatives. The portfolio is therefore exposed to the risk that the fair the ongoing risk management and investment decisions. In addition, regular
value of these investments will fluctuate because of changes in market prices. scenario analysis is undertaken to assess likely downside risks and
sensitivity to broad market changes, as well as assessing the underlying
Currency risk correlations amongst the separate asset classes.
Consistent with the Investment Policy, the Group invests globally in assets
denominated in currencies other than sterling as well as adjusting currency
exposure to either seek to hedge and/or enhance returns. This approach exposes
the portfolio to currency risk as a result of changes in exchange rates. Currency exposure is managed via an overlay strategy, typically using a
combination of currency forwards and/or options to adjust the natural currency
Interest rate risk of the investments in order to achieve a desired net exposure. The geographic
In addition, the Group is exposed to the direct and indirect impact of changes revenue breakdown for stocks as well as correlations with other asset classes
in interest rates. are also considered as part of our hedging strategy.
Each of the above market risk categories can be influenced by changes in Exposure management is undertaken with a variety of techniques including using
geopolitical risk. equity index and interest rate futures and options to hedge or to increase
equity and interest rate exposure depending on overall macroeconomic and
market views.
Liquidity risk
Liquidity risk is the risk that the Group will have difficulty in meeting its
obligations in respect of financial liabilities as they fall due. The Group manages its liquid resources to ensure sufficient cash is available
to meet its expected needs. It monitors the level of short-term funding and
balances the need for access to such funding and liquidity, with the long-term
funding needs of the Group, and the desire to achieve investment returns.
The Group has significant investments in and commitments to direct private Covenants embedded within the banking facilities and long-term notes are
investments and funds which are inherently illiquid. In addition, the Group monitored on an ongoing basis for compliance, and form part of the regular
holds investments with other third-party organisations which may require stress tests.
notice periods in order to be realised. Capital commitments could, in theory,
be drawn with minimal notice. In addition, the Group may be required to In addition, existing cash reserves, as well as the significant liquidity that
provide additional margin to support derivative financial instruments. could be realised from the sale or redemption of portfolio investments and
undrawn, committed borrowings, could all be utilised to meet short-term
funding requirements if necessary. As a closed-ended company, there is no
requirement to maintain liquidity to service investor redemptions. The
Depositary, BNP Paribas S.A, London Branch (BNP) has separate responsibilities
in monitoring the Company's cash flow.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument held by
the Group will fail to meet an obligation which could result in a loss to the
Group.
The majority of the exposure to credit risk within the absolute return and
Certain investments held within the absolute return and credit portfolio are credit portfolio is indirect exposure as a result of positions held within
exposed to credit risk, including in relation to underlying positions held by funds managed externally. These are typically diversified portfolios monitored
funds. by the third-party managers themselves, as well as through JRCM's ongoing
portfolio management oversight.
Substantially all of the listed portfolio investments capable of being held in
safe custody, are held by BNP as custodian and depositary. Bankruptcy or
insolvency of BNP may cause the Group's rights with respect to securities held
by BNP to be delayed. Listed transactions are settled on a delivery versus payment basis using a
wide pool of brokers. Cash holdings and margin balances are also divided
between a number of different financial institutions, whose credit ratings are
regularly monitored.
Unrealised profit on derivative financial instruments held by counterparties
is potentially exposed to credit risk in the event of the insolvency of a
broker counterparty.
All assets held directly by the custodian are in fully segregated client
accounts. Other than where local market regulations do not permit it, these
accounts are designated in RIT's name. The custodian's most recent credit
rating was A+ from Standard & Poor's (S&P).
Key person dependency
In common with other investment trusts, investment decisions are the
responsibility of a small number of key individuals within the Manager. If for This risk is closely monitored by the Board, through its oversight of the
any reason the services of these individuals were to become unavailable, there Manager's incentive schemes (on which it has received external advice) as well
could be a significant impact on our business. as the succession plans for key individuals. The potential impact is also
reduced by an experienced Board of Directors, with distinguished backgrounds
in financial services and business.
Climate-related risk
Ongoing climate changes may impact either our own business, the external
managers with whom we invest, and/ or the underlying portfolio investments. We do not consider climate-related risks to have material, specific impacts on
For our own business this could result in increased costs of complying with our own asset management businesses as distinct from the investment portfolio.
new regulations and/or changes to the way we operate. Portfolio companies Our Manager continues to monitor, and minimise, the climate-related impacts of
could see demand pressures, an increased cost of capital, tighter regulation our internal operations; we offset the carbon emissions of this business -
or increased taxation, all impacting profitability. categorised as Scope 1 and Scope 2 emissions by the Greenhouse Gas (GHG)
Protocol - through participation in an accredited scheme and we are taking
steps to further develop our understanding of our indirect emissions impact
(categorised as Scope 3 emissions), including from our investment portfolio.
Our ability to make climate-change disclosures may be impacted by our We have worked with an external advisor to help us disclose emissions data for
investment approach if the external fund managers with whom we invest do not our directly held quoted equities portfolio in our first TCFD Report (see the
provide the desired information. Company's Report and Accounts).
More frequent extreme weather could disrupt businesses, travel, global supply JRCM is a signatory to the UN PRI, and the Board has worked with our Manager
chains and profitability. to develop JRCM's Responsible Investment Framework & Policy, which
incorporates environmental factors into our investment approach. This allows
us to consider the potential wider impacts of climate change risks to our
investments.
We monitor developments in regulation and disclosures and seek as far as
possible to prepare for future changes.
The Group's adoption of fair value in relation to its investments means that
the climate-related risks recognised by market participants are incorporated
in the valuations.
Legal and regulatory risk
As an investment trust, RIT's operations are subject to wide-ranging laws and
regulations including in relation to the FCA UK Listing Rules and Disclosure, The Operational Risk Committee of JRCM provides oversight of all legal,
Guidance and Transparency Rules of the FCA's Primary Markets function, the regulatory and other operational risks across the Group. This Committee
Companies Act 2006, corporate governance codes, as well as continued reports key findings to the JRCM Executive Committee and the Audit and Risk
compliance with relevant tax legislation, including ongoing compliance with Committee.
the rules for investment trusts. JRCM is authorised and regulated by the FCA
and acts as Alternative Investment Fund Manager.
JRCM employs a general counsel and a compliance officer as well as other
personnel with experience of legal, regulatory, disclosure and taxation
The financial services sector continues to experience regulatory change at matters. In addition, specialist external advisers are, if required, engaged
national and international levels, including in relation to climate change. to supplement internal resources in relation to complex, sensitive or emerging
Failure to act in accordance with these laws and regulations could result in matters.
fines, censure or other losses including taxation or reputational loss.
Co-investments and other arrangements with related parties may result in
conflicts of interest.
Where necessary, co-investments and other transactions are subject to review
by the Conflicts Committee.
Operational risk
Operational risks are those arising from inadequate or failed processes,
people and systems or other external factors. Systems and control procedures are the subject of continued development and
regular review including by internal audit. During the year the Audit and Risk
Committee reviewed, and satisfied itself with, the Manager's approach to Group
tax compliance, accounting for share-based payment awards and accounting
Key operational risks include reliance on third-party managers and suppliers, journals supporting the financial statements.
dealing errors, processing failures, pricing or valuation errors, fraud and
reliability of core systems.
Processes are in place to ensure the recruitment and ongoing training of
appropriately skilled staff within key operational functions. Suitable
remuneration policies are in place to encourage staff retention and the
delivery of the Group's objectives over the medium term. Independent pricing
sources are used where available, and performance is subject to regular
monitoring. In relation to more subjective areas such as private investments
and property, the valuations are estimated by experienced staff and specialist
external managers and valuers using industry standard approaches, with the
final decisions taken by the independent Valuation Committee, and subject to
external audit as part of the year-end financial statements.
A business continuity and disaster recovery plan is maintained and includes
the ability to use a combination of an offsite facility and cloud resources to
mirror our production systems in the event of any business disruption. This
was satisfactorily tested during the year.
Cyber security risk
RIT is dependent on technology to support key business functions and the
safeguarding of sensitive information. As a result, RIT is exposed to the Cyber security continues to receive an enhanced focus, with policies, systems
increasingly sophisticated nature of cyber attacks, and given the growth in AI and processes designed to combat the ongoing risk developments in this area.
and the ability to utilise this for attempts at fraud and data breaches. Such processes are kept under regular review including multi-factor
authorisation, ensuring effective firewalls, internet and email gateway
security and anti-virus software.
RIT is therefore at risk of potential loss or harm as a result of significant This is complemented with staff awareness programmes (including periodic
disruption to information technology systems, including from a potential cyber mock-phishing exercises) which monitor and test both the robustness of our
attack, which may result in financial losses, the inability to perform systems as well as the effectiveness of our staff at identifying potential
business-critical functions, loss or theft of confidential data, and resulting risks. We also test our IT business continuity plan at least once every year.
legal or reputational damage.
The process for assessing, identifying and managing cybersecurity risks is
managed on a day-to-day basis by the Manager's IT team and overseen by the
JRCM Operational Risk Committee. Any material risks are reported to the Audit
and Risk Committee.
The Manager maintains the 'Cyber Essentials Plus' security certification, the
highest level of certification offered by the National Cyber Security Centre,
the UK Government's technical authority for cyber threats. This review is
performed on an annual basis, the most recent completed in December 2024.
Additionally, the Group has specific insurance in place to cover information
security and cyber risks. The Manager periodically also engages external
consultants to assess the robustness of its IT systems.
Corporate Governance Report - Extract
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report and Accounts in
accordance with applicable United Kingdom law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the Group
and Parent Company financial statements in accordance with UK adopted
international accounting standards (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 Group and
the Parent Company and of the profit or loss of the Group and the Parent
Company for that period.
In preparing these financial statements the Directors are required to:
• select suitable accounting policies in accordance with IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors and then apply them
consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information;
• provide additional disclosures when compliance with the specific requirements
in UK adopted IAS is insufficient to enable users to understand the impact of
particular transactions, other events
and conditions on the Group and Parent Company financial position and
financial performance;
• in respect of the Group financial statements, state whether UK adopted IAS
have been followed, subject to any material departures disclosed and explained
in the financial statements;
• in respect of the Parent Company financial statements, state whether UK
adopted IAS have been followed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Parent Company and the Group will continue
in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Parent Company's and Group's transactions
and disclose with reasonable accuracy at any time the financial position of
the Parent Company and the Group and enable them to ensure that the Parent
Company and the Group financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Group and Parent
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a 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 Parent Company's
website.
The Directors confirm, to the best of their knowledge:
• that the consolidated financial statements, prepared in accordance with UK
adopted IAS, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Parent Company and undertakings included in
the consolidation taken as a whole;
• that the Annual Report, including the Strategic Report, includes a fair review
of the development and performance of the business and the position of the
Parent Company and undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties
that they face; and
• that they consider the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Parent Company's position, performance, business
model and strategy.
FINANCIAL STATEMENTS - EXTRACTS
Consolidated income statement
Year ended 31 December 2024 2023
£ million Revenue Capital Total Revenue Capital Total
Investment income 29.1 - 29.1 29.3 - 29.3
Other income 0.3 - 0.3 3.2 - 3.2
Gains/(losses) on fair value investments - 345.9 345.9 - 109.9 109.9
Gains/(losses) on monetary items and borrowings - 1.6 1.6 - 0.8 0.8
29.4 347.5 376.9 32.5 110.7 143.2
Expenses
Operating expenses (31.9) (6.6) (38.5) (28.5) (14.2) (42.7)
Profit/(loss) before finance costs and taxation (2.5) 340.9 338.4 4.0 96.5 100.5
Finance costs (6.7) (26.7) (33.4) (6.9) (27.5) (34.4)
Profit/(loss) before taxation (9.2) 314.2 305.0 (2.9) 69.0 66.1
Taxation - - - - - -
Profit/(loss) for the year (9.2) 314.2 305.0 (2.9) 69.0 66.1
Earnings/(loss) per ordinary share - basic (6.4p) 217.6p 211.2p (1.9p) 46.1p 44.2p
Earnings/(loss) per ordinary share - diluted (6.3p) 216.5p 210.2p (1.9p) 45.7p 43.8p
The total column of this statement represents the Group's consolidated income
statement, prepared in accordance with UK adopted international accounting
standards (UK adopted IAS). The supplementary revenue and capital columns are
both prepared under guidance published by the Association of Investment
Companies (AIC). All items in the above statement derive from continuing
operations.
Consolidated statement of comprehensive income
Year ended 31 December 2024 2023
£ million Revenue Capital Total Revenue Capital Total
Profit/(loss) for the year (9.2) 314.2 305.0 (2.9) 69.0 66.1
Revaluation gain/(loss) on property, plant and equipment - 0.3 0.3 - 0.9 0.9
Actuarial gain/(loss) in defined benefit pension plan 0.3 - 0.3 (0.4) - (0.4)
Deferred tax (charge)/credit allocated to actuarial gain/(loss) (0.1) - (0.1) 0.2 - 0.2
Total comprehensive income/(expense) for the year (9.0) 314.5 305.5 (3.1) 69.9 66.8
Other comprehensive income items are never reclassified to profit or loss.
Consolidated Balance Sheet
At 31 December
£ million 2024 2023
Non-current assets
Investments held at fair value 3,792.1 3,499.4
Investment property 32.7 34.1
Property, plant and equipment 21.7 21.6
Retirement benefit asset 0.2 0.1
Derivative financial instruments 53.7 5.9
3,900.4 3,561.1
Current assets
Derivative financial instruments 38.5 65.4
Other receivables 123.1 71.2
Amounts owed by group undertakings - 0.1
Cash at bank 189.4 204.3
351.0 341.0
Total assets 4,251.4 3,902.1
Current liabilities
Borrowings (160.2) (142.9)
Derivative financial instruments (69.8) (2.8)
Other payables (77.5) (39.2)
Amounts owed to group undertakings (16.3) (0.1)
(323.8) (185.0)
Net current assets/(liabilities) 27.2 156.0
Total assets less current liabilities 3,927.6 3,717.1
Non-current liabilities
Borrowings (173.7) (137.9)
Derivative financial instruments (17.5) (0.0)
Deferred tax liability (0.1) (0.0)
Provisions (3.0) (3.0)
Lease liability (2.1) (2.9)
(196.4) (143.8)
Net assets 3,731.2 3,573.3
Equity attributable to owners of the Company
Share capital 156.8 156.8
Share premium 45.7 45.7
Capital redemption reserve 36.3 36.3
Own shares reserve (25.3) (36.7)
Capital reserve 3,548.3 3,393.1
Revenue reserve (41.2) (32.2)
Revaluation reserve 10.6 10.3
Total equity 3,731.2 3,573.3
Net asset value per ordinary share - basic 2,627p 2,449p
Net asset value per ordinary share - diluted 2,614p 2,426p
The financial statements were approved by the Board and authorised for issue
on 28 February 2025.
Consolidated Statement of Changes in Equity
Share capital Share premium Capital Own Capital reserve Revenue reserve Revaluation reserve Total equity
Redemption reserve Shares reserve
£ million
Balance at 1 January 2023 156.8 45.7 36.3 (46.3) 3,548.9 (29.1) 9.4 3,721.7
Profit/(loss) for the year - - - - 69.0 (2.9) - 66.1
Revaluation gain/(loss) on property, plant and equipment - - - - - - 0.9 0.9
Actuarial gain/(loss) in defined benefit plan - - - - - (0.4) - (0.4)
Deferred tax (charge)/credit allocated to actuarial gain/(loss) - - - - - 0.2 - 0.2
Total comprehensive income/(expense) for the year - - - - 69.0 (3.1) 0.9 66.8
Dividends paid - - - - (56.7) - - (56.7)
Purchase of treasury shares - - - - (163.1) - - (163.1)
Movement in own shares reserve - - - 9.6 - - - 9.6
Movement in share-based payments - - - - (5.0) - - (5.0)
Balance at 31 December 2023 156.8 45.7 36.3 (36.7) 3,393.1 (32.2) 10.3 3,573.3
Balance at 1 January 2024 156.8 45.7 36.3 (36.7) 3,393.1 (32.2) 10.3 3,573.3
Profit/(loss) for the year - - - - 314.2 (9.2) - 305.0
Revaluation gain/(loss) on property, plant and equipment - - - - - - 0.3 0.3
Actuarial gain/(loss) in defined benefit plan - - - - - 0.3 - 0.3
Deferred tax (charge)/credit allocated to actuarial gain/(loss) -
- - - - (0.1) - (0.1)
Total comprehensive income/(expense) for the year -
- - - 314.2 (9.0) 0.3 305.5
Dividends paid - - - - (56.5) - - (56.5)
Purchase of treasury shares - - - - (80.4) - - (80.4)
Movement in own shares reserve - - - 11.4 - - - 11.4
Movement in share-based payments - - - - (22.1) - - (22.1)
Balance at 31 December 2024 156.8 45.7 36.3 (25.3) 3,548.3 (41.2) 10.6 3,731.2
Consolidated Cash Flow Statement
Year ended 31 December Consolidated cash flow
£ million 2024 2023
Cash flows from operating activities:
Cash inflow/(outflow) before taxation and interest 123.2 328.6
Interest paid (33.4) (34.4)
Net cash inflow/(outflow) from operating activities 89.8 294.2
Cash flows from investing activities:
Sale/(purchase) of property, plant and equipment (0.1) (0.3)
Investments in subsidiary undertakings - -
Divestments from subsidiary undertakings - -
Net cash inflow/(outflow) from investing activities (0.1) (0.3)
Cash flows from financing activities:
Repayment of borrowings (288.8) (699.9)
Drawing of borrowings 339.7 618.6
Purchase of ordinary shares by EBT(1) (13.7) (9.8)
Purchase of ordinary shares into treasury (80.4) (163.1)
Dividends paid (56.5) (56.7)
Net cash inflow/(outflow) from financing activities (99.7) (310.9)
Increase/(decrease) in cash in the year (10.0) (17.0)
Cash at the start of the year 204.3 218.0
Effect of foreign exchange rate changes on cash (4.9) 3.3
Cash at the year end 189.4 204.3
(1 ) Shares are disclosed in the own shares reserve on the consolidated balance
sheet.
( )
NOTES TO THE FINANCIAL STATEMENTS - EXTRACTS
Earnings per ordinary share - basic and diluted
The basic earnings per ordinary share for 2024 is based on the profit of
£305.0 million (2023: £66.1 million) and the weighted average number of
ordinary shares in issue during the period of 144.4 million (2023: 149.5
million). The weighted average number of shares is adjusted for shares held in
the EBT and in treasury in accordance with IAS 33 - Earnings per share.
£ million 2024 2023
Net revenue profit/(loss) (9.2) (2.9)
Net capital profit/(loss) 314.2 69.0
Total profit/(loss) for the year 305.0 66.1
Weighted average (million) 2024 2023
Number of shares in issue 156.8 156.8
Shares held in EBT (1.2) (1.8)
Shares held in treasury (11.2) (5.5)
Basic shares 144.4 149.5
pence 2024 2023
Revenue earnings/(loss) per ordinary share - basic (6.4) (1.9)
Capital earnings/(loss) per ordinary share - basic 217.6 46.1
Total earnings per share - basic 211.2 44.2
The diluted earnings per ordinary share for the period is based on the basic
shares (above) adjusted for the effect of share-based payments awards for the
period.
Weighted average (million) 2024 2023
Basic shares 144.4 149.5
Effect of share-based payment awards 0.7 1.4
Diluted shares 145.1 150.9
pence 2024 2023
Revenue earnings/(loss) per ordinary share - diluted (6.3) (1.9)
Capital earnings/(loss) per ordinary share - diluted 216.5 45.7
Total earnings per ordinary share - diluted 210.2 43.8
Net asset value per ordinary share - basic and diluted
Net asset value per ordinary share is based on the following data:
31 December 2024 2023
Net assets (£ million) 3,731.2 3,573.3
Number of shares in issue (million) 156.8 156.8
Shares held in EBT (million) (1.1) (1.6)
Shares held in treasury (million) (13.6) (9.3)
Basic shares (million) 142.1 145.9
Effect of share-based payment awards (million) 0.7 1.4
Diluted shares (million) 142.8 147.3
2024 2023
31 December pence pence
Net asset value per ordinary share - basic 2,627 2,449
Net asset value per ordinary share - diluted 2,614 2,426
Dividends
2024 2023 2024 2023
Pence per Pence per £ million £ million
share share
Dividends paid in year 39.0 38.0 56.5 56.7
The above amounts were paid as distributions to equity holders of the Company
in the relevant year from accumulated capital profits.
Dividends are not paid on shares held in treasury and the EBT waives its
rights to all dividends.
On 4 March 2024 the Board declared a first interim dividend of 19.5 pence per
share in respect of the year ended 31 December 2024 that was paid on 26 April
2024. A second interim dividend of 19.5 pence per share was declared by the
Board on 31 July 2024 and paid on 25 October 2024.
The Board declares the payment of a first interim dividend of 21.5 pence per
share in respect of the year ending 31 December 2025. This will be paid on 25
April 2025 to shareholders on the register on 4 April 2025, and funded from
the accumulated capital profits.
Glossary and Alternative Performance Measures
Glossary
Within the Annual Report and Accounts, we publish certain financial measures
common to investment trusts. Where relevant, these are prepared in accordance
with guidance from the AIC, and this glossary provides additional information
in relation to them.
Alternative performance measures (APMs): APMs are numerical measures of the
Company's current, historical or future financial performance, financial
position or cash flows, other than financial measures defined or specified in
the Company's applicable financial framework - namely UK adopted IAS and the
AIC SORP. They are denoted with an * in this section.
CPI: The CPI refers to the United Kingdom Consumer Price Index as calculated
by the Office for National Statistics and published monthly. It is the UK
Government's target measure of inflation and, from 1 January 2023, is used as
a measure of inflation in one of the Company's KPIs, CPI plus 3.0% per annum.
Gearing*: Gearing is a measure of the level of debt deployed within the
portfolio. The ratio is calculated in accordance with AIC guidance as total
assets, net of cash, divided by net assets and expressed as a 'net'
percentage, e.g. 110% would be shown as 10%.
£ million 2024 2023
Total assets 4,251.4 3,902.1
Less: cash (189.4) (204.3)
Sub total(a) 4,062.0 3,697.8
Net assets(b) 3,731.2 3,573.3
Gearing(a/b) 8.9% 3.5%
Leverage: Leverage, as defined by the UK Alternative Investment Fund Managers
Directive (AIFMD), is any method which increases the exposure of the
portfolio, whether through borrowings or leverage embedded in derivative
positions or by any other means.
ACWI (50% £): The MSCI All Country World Index is a total return, market
capitalisation-weighted equity index covering major developed and emerging
markets. Described in the Company's Report and Accounts as ACWI (50% £), this
is one of the Company's KPIs or reference hurdles and, since its introduction
in 2013, has incorporated a 50% sterling measure. This is calculated using 50%
of the ACWI measured in sterling and therefore exposed to translation risk
from the underlying foreign currencies. The remaining 50% uses a
sterling-hedged ACWI from 1 January 2015 (from when this is readily
available). This incorporates hedging costs, which the portfolio also incurs,
to protect against currency risk and is an investable index. Prior to this
date it uses the index measured in local currencies. Before December 1998,
when total return indices were introduced, the index is measured using a
capital-only version.
Net asset value (NAV) per share: The NAV per share is calculated by dividing
the total value of all the assets of the trust less its liabilities (net
assets) by the number of shares outstanding. Unless otherwise stated, this
refers to the diluted NAV per share, with debt held at fair value.
NAV total return*: The NAV total return for a period represents the change in
NAV per share, adjusted to reflect dividends paid during the period. The
calculation assumes that dividends are reinvested in the NAV at the month end
following the NAV going ex-dividend. The NAV per share at 31 December 2024 was
2,614 pence, an increase of 188 pence, or 7.7%, from 2,426 pence at the
previous year end. As dividends totalling 39 pence per share were paid during
the year, the effect of reinvesting the dividends in the NAV is 1.7%, which
results in a NAV total return of 9.4%. The since inception return is
calculated using the NAV per share at 2 August 1988.
Net quoted equity exposure: This is the estimated level of exposure that the
trust has to listed equity markets. It includes the assets held in the quoted
equity category of the portfolio adjusted for the notional exposure from
quoted equity derivatives, as well as estimated cash balances held by
externally-managed funds, estimated exposure levels from hedge fund managers,
and an estimate of quoted equities held in private investment funds.
Notional: In relation to derivatives, this represents the estimated exposure
that is equivalent to holding the same underlying position through a cash
security.
Ongoing charges figure (OCF)*: As a self-managed investment trust with
operating subsidiaries, the calculation of the Company's OCF requires
adjustments to the total operating expenses. In accordance with AIC guidance,
the main adjustments are to remove non-recurring costs as well as direct
performance-related compensation from JRCM, as this is analogous to a
performance fee for an externally-managed trust.
£ million 2024 2023
Operating expenses 38.5 42.7
Adjustments (10.4) (15.0)
Ongoing charges(a) 28.1 27.7
Average net assets(b) 3,688 3,614
OCF(a/b) 0.76% 0.77%
Premium/discount: The premium or discount (or rating) is calculated by taking
the closing share price on 31 December 2024 and dividing it by the NAV per
share at 31 December 2024, expressed as a net percentage. If the share price
is above/below the NAV per share, the shares are said to be trading at a
premium/discount.
31 December 2024 31 December 2023
pence
Share price(a) 1,986 1,882
Diluted NAV per share(b) 2,614 2,426
Premium/(discount)(((a/b)-1)) (24.0%) (22.4%)
Share price total return or total shareholder return (TSR)*: The TSR for a
period represents the change in the share price adjusted to reflect dividends
reinvested on the ex-dividend date. Similar to calculating a NAV total return,
the calculation assumes the dividends are notionally reinvested at the daily
closing share price following the shares going ex-dividend. The share price on
31 December 2024 closed at 1,986 pence, an increase of 104 pence, or 5.5%,
from 1,882 pence at the previous year end. Dividends totalling 39 pence per
share were paid during the year, and the effect of reinvesting the dividends
in the share price is 2.4%, which results in a TSR of 7.9%. The TSR is one of
the Company's KPIs. The since inception return is calculated using the closing
share price on 2 August 1988.
Basis of presentation
The financial information for the year ended 31 December 2024 has been
extracted from the statutory accounts for that year. The auditor's report on
these accounts is unqualified and does not contain a statement under either
Section 498(2) or (3) of the Companies Act 2006. The statutory accounts will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
The financial information for the year ended 31 December 2023 has been
extracted from the statutory accounts for that year which have been delivered
to the Registrar of Companies. The auditor's report on these accounts is
unqualified and does not contain a statement under either Section 498(2) or
(3) of the Companies Act 2006.
Report and Accounts
The full statutory accounts are available to be viewed or downloaded from the
Company's website at www.ritcap.com (www.ritcap.com) . Neither the contents of
the Company's website nor the contents of any website accessible from the
Company's website (or any other website) is incorporated into, or forms part
of, this announcement.
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