REG - Schroder AsianTR Inv - Half-year Report
11/09/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250911:nRSK8567Ya&default-theme=true
RNS Number : 8567Y Schroder Asian Total Retn InvCo PLC 11 September 2025
SCHRODER ASIAN TOTAL RETURN INVESTMENT COMPANY PLC
HALF YEAR REPORT 2025
Schroder Asian Total Return Investment Company plc (the "Company") hereby
submits its Half Year Report for the six months ended 30 June 2025 as required
by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule
4.2.
Key Highlights:
· During the six months to 30 June 2025, the Company's NAV total
return was -2.4%. The share price total return was -1.6%, as the discount
narrowed, reflecting improved sentiment towards Asian equities and the
Company.
· The Company has maintained a consistently strong long-term track
record, with its NAV total return outperforming the Reference Index over the
three-, five- and ten-year periods to 30 June 2025. There has also been a
notable recovery in relative performance since the end of June.
· The shares traded at an average discount of 4.1% during the
review period, remaining well within the target range. The Company is notably
overweight, relative to its Reference Index, in Australian and Singaporean
stocks, markets which offer attractive yields and, selectively, reasonable
valuations in steady growth businesses.
· The Company continues to use CFDs in addition to the loan
facility, as a flexible and more cost-effective means of borrowing.
Sarah MacAulay, Chair, Schroder Asian Total Return Investment Company plc
commented:
"The consistently strong long-term track record of the Company is notable. The
NAV total return has outperformed the Reference Index over 3, 5 and 10 years."
The Half Year Report is also being published in hard copy format and an
electronic copy of that document will shortly be available to download from
the Company's web pages at www.schroders.co.uk/satric
(http://www.schroders.co.uk/satric) .
The Company has submitted a copy of its Half Year Report to the National
Storage Mechanism and it will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Enquiries:
Schroder Investment Management Limited
Charlotte Banks / Kirsty Preston (Press) 020 7658 2106
Katherine Fyfe (Company Secretarial) 020 7658 6000
________________________________________________________________________________________________________
HALF YEAR REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2025
CHAIR'S STATEMENT
PERFORMANCE
During the six-month period ended 30 June 2025, the Company's net asset value
(NAV) produced a negative total return of -2.4%, lagging the Reference Index
(MSCI AC Asia Pacific ex-Japan), which delivered a total return of 4.3%. The
share price total return was -1.6% as the discount tightened reflecting an
improving sentiment towards both Asian equities and the Company.
Although the period under review has been challenging, the consistently strong
long-term track record of the Company is notable. The NAV total return has
outperformed the Reference Index over the three-, five- and ten-year periods
to 30 June 2025. In addition, there has been a marked recovery in relative
performance since the end of June: the NAV has increased by 10.9% while the
Reference Index has increased by 6.7% for the period 1 July 2025 to date.
Further details on performance during the period, including the impact of an
underweight allocation to Korea and stock selection in China during both
markets' strong performance, and sterling's appreciation against Asian
currencies, are provided in the Portfolio Managers' Report.
DISCOUNT MANAGEMENT
The share price traded at an average discount of 4.1% during the period under
review, well within the target range, and the Company remains one of the
highest rated trusts in its sector. The sector average discount was 10.3%
during the same period. Whilst the Company did not buy back shares during the
period to 30 June 2025, the Board continues to monitor the discount closely,
in line with the Company's target of maintaining a discount of no more than 5%
in normal market conditions.
GEARING
The Portfolio Managers continued to actively utilise gearing during the
period, as part of their wider derivative strategy. Gearing levels stood at
6.7% of total assets at the end of the period, down from 8.5% at the start.
Average net debt over the six-month period was 5.9% of NAV, with around 47% of
that debt financed through contracts for difference (CFDs). As noted in the
Annual Report, the Company has started to use CFDs in addition to the loan
facility as a flexible and more cost-effective means of borrowing.
Consequently, the Company has renewed its revolving credit facility at the
lower level of £23.5 million in July 2025, down from £50 million.
The Company's gearing has made a net positive contribution to returns over the
period and is an important differentiating feature of the investment trust
structure. Gearing should be viewed in the context of the use of derivative
hedging instruments as described in the Investment Manager's Review.
OUTLOOK
Our Portfolio Managers continue to concentrate on the Company's current
positioning in the four key investment areas in Asia. Their key overweight
(versus the Reference Index) is in the historically more defensive Australian
and Singaporean stock markets, where they find attractive yields and,
selectively, reasonable valuations for steady growth businesses. Good stock
selection across all markets will remain key, facilitated by the extensive
Asian investment experience of our two Portfolio Managers and the support from
Schroders' regional research team of 44 analysts who carry out over 2,700
company visits per year. The Board has confidence in the ability of our
Portfolio Managers to continue to find exciting investment ideas across the
region and to deliver strong long-term returns to shareholders.
SARAH MACAULAY
Chair
10 September 2025
INVESTMENT MANAGER'S REVIEW
PORTFOLIO MANAGERS' REPORT
The Company's Reference Index, the MSCI AC Asia Pacific ex Japan Index, ended
the first half of the year moderately higher, however this masks a very
volatile period for Asian stock markets. The market volatility was
particularly pronounced in April 2025 when we saw a large drop in markets
following "Liberation Day" when President Trump announced his broad-based
tariff plans. The subsequent effective reversal of much of the proposals then
led to a strong market rally. The significant appreciation of sterling masks
the fact that most Asian stock markets were materially higher over the period
in local currency and US dollar terms.
Within Asia, there was a marked divergence in performance across both
countries and sectors. The smaller Association of Southeast Asian Nations
(ASEAN) stock markets were flat or down over the period, with Indonesia and
Thailand both falling sharply as rising political uncertainty is increasingly
weighing on business and consumer confidence. In India, the market edged up in
local currency terms as positive domestic investor flows continued to provide
support despite downgrades to earnings forecasts from the perennially bullish
Indian stockbroking community. The Australian and Singapore stock markets both
posted moderate gains, with bank stocks driving gains in Australia as
investors looked for higher yielding names. Taiwanese stocks were volatile
over the period. The stock market is heavily weighted in export and technology
related stocks so was hit hard in the April trade/tariff related sell off. In
June 2025, better news on artificial intelligence (AI) related capital
expenditure then led to a rebound meaning the market ended the period flat.
The best performing stock markets over the period were Korea and China. The
Korean stock market rose 27% in the first half, with the bulk of the gains
coming following the election of Lee Jae Myung on 3 June 2025. New President
Lee immediately announced plans to try to boost consumer wealth and confidence
by targeting the stock market via a Japanese style "Value-up" programme. This
has created a rather speculative fervour amongst both domestic and foreign
investors. Defence stocks and heavy industrial stocks in Korea also performed
well on the back of hopes of new order wins as Europe looks to rearm.
The Chinese stock market also did well over the period but this masks some
divergent trends. Internet stocks like Alibaba, JD.COM and Meituan all jumped
in February on AI-related fervour following the release by DeepSeek of its
open-source low-cost large language model (LLM). The stocks then gave up most
of their gains in June 2025 following the announcement of a large-scale price
war in food delivery and quick commerce. Meanwhile many domestic stocks
continued to suffer as weak consumption and deflationary forces mean many are
effectively running hard to stay flat. The big outperformers over the period
paradoxically were the financial stocks. We say paradoxically as rising
corporate losses and deflation are normally a poor backdrop for financials,
however with Chinese long bond yields collapsing to 1.6% a dash for yield by
domestic funds in China meant high yielding stocks like banks performed
strongly. In the second section on positioning, we discuss why we think this
strategy is questionable.
In relative performance terms, it was a disappointing period for the Company
with the NAV producing a total return of -2.4% over the period, lagging the
Reference Index which rose to 4.3%. In absolute terms, the c.10% appreciation
in sterling over the period against local currencies held back returns. The
relative underperformance however primarily came from two areas - firstly the
Company's large underweight position in the Korean stock market and secondly
from stock selection in China. We go on to discuss the reasons for this and
the Company's current positioning in the section below.
FIRST HALF OF 2025 PERFORMANCE AND CURRENT POSITIONING
Looking at Korea first, the Company has very limited stock exposure in Korea
so with the market outperforming the negative impact on the Company's relative
performance has primarily been an issue of asset allocation (i.e. not owning
the domestic part of the market at all) rather than stock selection. The
Korean market has done well this year primarily on "Value-up" hopes, which
reached new levels following the election of the new President. Your Portfolio
Managers spent some time discussing Korea over the period and whether "this
time is different". Your Portfolio Managers have heard the Korean reform story
multiple times over the last 30 years and each time our hopes have been
dashed. Having looked at President Lee's actual policies and his background as
a left-wing populist, we decided that whilst some of the announced measures
were positive, they were not significant enough to change our overall caution
on many Korean stocks. Why is this?
The domestic stocks are likely to be held back by an economy that faces
several significant headwinds, whether it is high levels of consumer debt, a
demographic time bomb, or huge gender inequality which means half of the
shrinking workforce is unable to contribute fully to the economy (see charts
in the Half Year Report).
The structural challenges faced by the economy mean that Korean gross domestic
product (GDP) growth is sluggish and, in our view, likely to remain so, unless
the government adopts markedly different policies to encourage greater female
participation in the workforce and significant immigration - neither of which
we see as likely. The sluggish domestic economy can be seen in weak retail
sales figures and advertising spend (shrinking); we thus struggle to see why
chasing internet stocks, e-commerce or retail names in Korea makes long-term
sense, particularly at current valuation levels.
The sluggish domestic economy also leaves us cautious on the Korean banking
sector where, after strong moves in the sector, we now see downside risks. As
Chart 3 in the Half Year Report shows, net interest margins (NIM) remain low
for the sector reflecting low loan demand and strong competition. Banks
however have maintained their return on assets (RoA) by cutting non-performing
loan (NPL) coverage in the face of rising bad debts. This, combined with hopes
of "Value-up", has led to a rerating of the banks. We would concede that
Korean banks have improved their payout ratios and stopped undertaking
mispriced mergers and acquisitions (M&A) so the rerating from historic low
levels (which we missed) is justified. However, we are cautious on prospective
returns from Korean banks because they remain low RoA and low growth and
therefore the dividends look potentially unsustainable.
Within the Korean stock market, there are some good export related stocks,
including industry leaders like SK Hynix, Hanwha Aerospace, Hyundai HD
Electric and Samsung Biologics but a significant part of the market faces the
threat of irrational competition from aggressive and increasingly competitive
Chinese companies, whether this is the auto names (Hyundai, Kia), electronics
sector (Samsung Electronics, LG), steel sector (Posco) or battery sector
(LGES, Samsung SDI).
The structural challenges faced by many Korean companies such as a sluggish
domestic economy, the threat of aggressive Chinese competition and poor
corporate governance, are the reasons why the stock market has historically
traded at low multiples. Value-up programmes should in theory improve
corporate governance but as Chart 4 in the Half Year Report shows, the reason
the stock market was out of favour was the low and falling return on equity
(RoE). Post the current rebound, the market is now anticipating a significant
improvement in return on equity. For many stocks, we think the risks of
disappointment are now high as the reasons for low returns are not just about
poor governance.
China/Hong Kong was actually a positive contributor to the Company's
performance in the second quarter, however a very difficult first quarter
performance in China/Hong Kong meant it remained the biggest negative overall
contributor to the Company's performance in the first half of 2025. The big
issue for performance is that the Chinese market currently appears to be in a
barbell when it comes to investment flows. What do we mean by this? The main
Chinese stock market for overseas investors consists of China stocks listed in
Hong Kong (the vast bulk of MSCI China). Increasingly as the Southbound
Connect flows grow (mainland investors buying Hong Kong listed China stocks)
the Chinese market has become dominated by mainland investors. The barbell
reflects two types of mainland investors, firstly ones who need high dividend
yields (mainland insurers buying as government bond yields are now negligible
in China) and secondly, more retail orientated investors who prefer themes and
momentum (over worrying about matters like long-term sustainable returns).
This barbell approach has proved painful for your Portfolio Managers as we
tend to focus on the middle of the barbell i.e. none of the stocks mentioned
above.
The first part of the barbell has been the most painful and perplexing for
your Portfolio Managers. One of the best performing parts of the Chinese
market year to date has been the financials. In particular the banks, which
have outperformed despite chronic deflation, anaemic loan growth and worsening
signs of asset quality as the property sector continues to fall and more
companies fall into losses due to chronic overcapacity.
Despite very clear evidence of widespread stress (remember every Chinese
property company has defaulted on their offshore debt and no Chinese property
company has defaulted on their onshore debt), banks continue to declare
falling NPLs which is the only way they can maintain flat profits (all state
banks effectively announce the same profitability numbers each year). This is
clearly unsustainable longer-term, making this a sector we would continue to
avoid.
The other end of the barbell (the thematic stocks) we will admit has also been
frustrating and one where, on reflection, your Portfolio Managers could
perhaps have done better or at least been more open to ideas. The stocks we
are referring to have now effectively been named as "new consumption" stocks
by Chinese stockbrokers. These are stocks considered "in vogue" or "on trend"
with the constantly and rapidly changing Chinese consumer. If you get these
right, you can make a lot of money as demonstrated by Chart 8 in the Half Year
Report which shows the performance of some of the new consumption names in the
second quarter.
The problem your Portfolio Managers have had is trying to analyse the likely
longevity of these new brands in a world of key opinion leaders (KOLs) and the
"next best thing". It is extremely hard to believe that Pop Mart's Labubu
dolls, that have currently gone viral, will be popular (or perhaps even
remembered) in three years' time. At least on the flip side, the Company has
avoided the "old China" consumer stocks like beer, dairy, baijiu, traditional
luxury brands and mainstream cosmetics all of which have done poorly. This is
a difficult sector. Once a stock loses momentum, as it is often bought on a
thematic, it can fall precipitously. Your Portfolio Managers in truth are not
in a position to predict which Chinese brands are going to go viral next (nor
is anyone!). Rather than chasing these often short-lived themes, our focus
remains very much on cutting through the hype and investing in the strongest
franchises with defensible moats and long-term growth runways, guided by the
insights of our research analyst team on the ground.
The other sector in China which has contributed to underperformance is the
electric vehicle (EV) makers, with Xiaomi and BYD being two of the biggest
drags on performance in the first half of the year. In this space we are more
confident our long-term structurally cautious stance will prove correct.
Xiaomi was the biggest negative in the second quarter. For readers not
familiar with Xiaomi, it is historically a nimble, innovative designer of
lower-end Android phones and consumer electronic products like food mixers and
robot vacuum cleaners. Pretty much overnight (well in January 2024) Xiaomi
launched its first car from nowhere, causing the stock to shoot up.
What does this tell us? If a consumer electronics company like Xiaomi can
launch a credible and popular car quickly, with no accumulated knowledge of
the auto industry, we think this tells us the barriers to entry for launching
an EV are now low. Most parts are off-the-shelf, whether it's Contemporary
Amperex Technology batteries, inverters and motors from Inovance, lighting
systems from Xingyu, electronics from Desay. What Xiaomi did cleverly was make
the car attractive, hype up its software and branding and thus create a viral,
"halo" effect - perhaps much like the "new consumption" stocks above. The
problem is like any stock (or person) that ever had a "halo", it rarely lasts.
The second problem in the EV space is of course the endless automobile
overcapacity in China where, despite strong sales due to ongoing subsidies,
capacity utilisation is estimated by Bloomberg to be running around 60%. We
think intense competition, combined with an already well penetrated market,
will lead to earnings disappointments in the sector. As Chart 9 in the Half
Year Report perhaps highlights, these are products like Android phones that
are increasingly difficult to differentiate (the price being determined by
features rather than necessarily branding). We have minimal auto exposure in
the Company outside our investment in battery maker Contemporary Amperex
Technology, which we view as a long-term winner given its strong intellectual
property (IP).
So, in conclusion we have missed some opportunities in China and accept we
need to be razor focused on trends on the ground if we are to invest in
domestic names (and also to ensure current holdings are still resonating with
fickle consumers). We remain comfortable with the key stocks we own in the
social media and gaming sectors, and also comfortable with our travel-related
names, albeit watching carefully that the current price war in instant
shopping and food delivery (subsidies now effectively meaning you can have a
free bubble tea) doesn't spread to other verticals.
A final comment on positioning in the Company as we enter the second half of
the year. Chart 10 in the Half Year Report shows the Company's current
positioning in the four key investment areas in Asia. The Company for reasons
explained above, is lowly weighted in Korea, we still have c.25% in Hong
Kong/China albeit this is materially below the Reference Index. The key
overweight (versus the Reference Index) is in the historically more defensive
Australian and Singapore stockmarkets where we find attractive yields and,
selectively, reasonable valuations for steady growth businesses. On the
hedging side, the short-term models remain neutral to positive on markets,
whereas the longer-term models based on valuations are decidedly more cautious
on prospective returns on India and China in particular. The Company has a
small position in puts in India, and we will look for opportunities to buy
puts on China and India if pricing moves to more attractive levels.
ROBIN PARBROOK AND LEE KING FUEI
Portfolio Managers
SCHRODER INVESTMENT MANAGEMENT LIMITED
10 September 2025
INVESTMENT PORTFOLIO
AS AT 30 JUNE 2025
Fair Portfolio Portfolio
Value
Exposure
Exposure
£'000
£'000
%(1)
Taiwan
TSMC 57,991 57,991 12.0
MediaTek 13,583 13,583 2.8
Chroma ATE 10,170 10,170 2.1
ASE Technology 9,278 9,278 1.9
Nien Made Enterprise 5,446 5,446 1.1
Voltronic Power Technology 5,294 5,294 1.1
Eclat Textile 2,950 2,950 0.6
Merida Industry 2,264 2,264 0.5
--------------- --------------- ---------------
Total Taiwan 106,976 106,976 22.1
========= ========= =========
Mainland China
Tencent(3) 31,170 31,170 6.5
NetEase(3) 9,765 9,765 2.0
Trip.com(3) 8,358 8,358 1.7
Contemporary Amperex Technology 7,978 7,978 1.6
Tencent Music Entertainment (ADR)(4) (CFD) 305 6,688 1.4
Meituan Dianping(3) 4,790 4,790 1.0
Wuxi Biologics(3) 4,657 4,657 1.0
Huazhu Group (ADR)(4) 4,554 4,554 0.9
--------------- --------------- ---------------
Total Mainland China 71,577 77,960 16.1
========= ========= =========
Australia
ResMed 10,881 10,881 2.2
Brambles 9,932 9,932 2.1
Aristocrat Leisure 9,317 9,317 1.9
CSL 7,792 7,792 1.6
Medibank Private 7,312 7,312 1.6
Cochlear 6,616 6,616 1.4
BHP Billiton(2) 5,878 5,878 1.2
Orica 5,827 5,827 1.2
Seek 5,418 5,418 1.1
Bluescope Steel 3,550 3,550 0.7
Dyno Nobel 3,102 3,102 0.6
--------------- --------------- ---------------
Total Australia 75,625 75,625 15.6
========= ========= =========
India
HDFC Bank 14,817 14,817 3.1
ICICI Bank 12,666 12,666 2.6
Bharat Electronics 8,165 8,165 1.7
Apollo Hospitals Enterprise 7,323 7,323 1.5
InterGlobe Aviation 6,670 6,670 1.4
MakeMyTrip(4) 6,024 6,024 1.2
Five Star Business Finance 5,255 5,255 1.1
Le Travenues Technology 4,458 4,458 0.9
Astra Microwave Products 3,899 3,899 0.8
PB Fintech 3,348 3,348 0.7
--------------- --------------- ---------------
Total India 72,625 72,625 15.0
========= ========= =========
Singapore
DBS Group 15,896 15,896 3.3
Singapore Exchange 9,959 9,959 2.1
United Overseas Bank 6,384 6,384 1.3
Sheng Siong 5,301 5,301 1.1
Sea (ADR)(4) 5,086 5,086 1.1
Grab(4) 3,342 3,342 0.6
--------------- --------------- ---------------
Total Singapore 45,968 45,968 9.5
========= ========= =========
Hong Kong (SAR)
AIA 14,473 14,473 2.9
Swire Pacific 9,489 9,489 2.0
Techtronic Industries 8,038 8,038 1.7
Galaxy Entertainment 5,413 5,413 1.1
--------------- --------------- ---------------
Total Hong Kong (SAR) 37,413 37,413 7.7
========= ========= =========
Philippines
International Container Terminal Services 11,011 11,011 2.3
Century Pacific Food 6,796 6,796 1.4
BDO Unibank 6,058 6,058 1.2
--------------- --------------- ---------------
Total Philippines 23,865 23,865 4.9
========= ========= =========
South Korea
Samsung Electronics 7,943 7,943 1.7
SK Hynix 5,050 5,050 1.0
--------------- --------------- ---------------
Total South Korea 12,993 12,993 2.7
========= ========= =========
Indonesia
Sumber Alfaria Trijaya Tbk PT 5,740 5,740 1.2
Bank Mandiri 4,808 4,808 1.0
--------------- --------------- ---------------
Total Indonesia 10,548 10,548 2.2
========= ========= =========
Vietnam
FPT 6,362 6,362 1.3
Gemadept 3,297 3,297 0.7
--------------- --------------- ---------------
Total Vietnam 9,659 9,659 2.0
========= ========= =========
Thailand
Bangkok Dusit Medical Services 5,418 5,418 1.1
--------------- --------------- ---------------
Total Thailand 5,418 5,418 1.1
========= ========= =========
United Kingdom
Rio Tinto (CFD) 6 5,102 1.1
--------------- --------------- ---------------
Total United Kingdom 6 5,102 1.1
========= ========= =========
Total Investments (including CFDs)(5) 472,673 484,152 100.0
========= ========= =========
Derivative Financial Instruments
Index Put Options
NIFTYM Put Option 24800 July 25 56
---------------
Total Index Put Options(6) 56
=========
Forward Currency Contract(7) (363)
========= ========= =========
Total Investments and Derivative Financial Instruments - Portfolio Exposure 484,152 100.0
========= ========= =========
Total Investments and Derivative Financial Instruments - Fair Value 472,366
=========
Investments are classified by the Manager in the region or country of their
main business operations or listing. The portfolio exposure indicates the
impact on market price movements resulting from the ownership of shares and
derivative instruments.
Fair value represents the true value of the portfolio, which is reflected on
the balance sheet. In the case of holding a CFD, the fair value reflects the
profit or loss generated by the CFD since its inception, based on the movement
of the underlying share price. However, when the Company solely holds shares,
both the fair value and the portfolio exposure align.
Highlighted stocks in the Half Year Report are the twenty largest investments,
which by value account for 58.5% (30 June 2024: 58.7% and 31 December 2024:
55.5%).
1 Portfolio exposure is expressed as a percentage of total investments
and financial derivative instruments.
2 Listed in the UK.
3 Listed in Hong Kong (SAR).
4 Listed in the USA.
5 Comprises the following:
Fair Portfolio
Value
Exposure
£'000
£'000
Equities 462,722 462,722
American Depositary Receipts (ADR) 9,640 9,640
Contract For Differences (CFD) 311 11,790
--------------- ---------------
Total Investments (including CFDs) 472,673 484,152
========= =========
6 The options give downside protection to 0.56% total investments.
7 Comprises a single contract to purchase USD27.46 million for CNH200
million, for settlement on 16 July 2025. The contract is valued at fair value,
being the cost of closing out the contract at the balance sheet date.
INTERIM MANAGEMENT STATEMENT
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties associated with the Company's business
fall into the following categories: macro factors, including the
geopolitical/economic environment and climate change; investment objective and
promotion; investment strategy and performance; key person; ESG
considerations; gearing/liquidity; compliance with regulations; oversight of
service providers; information technology resilience and security; and
financial. The Board also considers the development of artificial intelligence
to be an emerging risk. A detailed explanation of the risks and uncertainties
in each of these categories can be found on pages 52 to 55 of the Company's
published Annual Report and Financial Statements for the year ended 31
December 2024.
In the view of the Board, the Company's principal risks and uncertainties have
not changed during the six months ended 30 June 2025. However, the Board
considers that the severity of some of the risks has increased. While
assessing the financial statements, the Board undertook a review of the
principal and emerging risks and noted that, following the election of
President Trump, geopolitical risk has increased. Most notably due to the
unfolding global trade wars arising from the evolving tariff regime
implemented by the Trump administration and subsequent uncertainties around
its execution. These matters will be closely monitored and reported on in the
next Annual Report, as appropriate.
GOING CONCERN
Having assessed the principal risks and uncertainties, and the other matters
discussed in connection with the viability statement as set out on page 56 of
the published Annual Report for the year ended 31 December 2024, the Directors
consider it appropriate to adopt the going concern basis in preparing these
financial statements.
RELATED PARTY TRANSACTIONS
There have been no transactions with related parties that have materially
affected the financial position or the performance of the Company during the
six months ended 30 June 2025.
DIRECTORS' RESPONSIBILITY STATEMENT
In respect of the Half Year Report for the six months ended 30 June 2025, we
confirm that, to the best of our knowledge:
- this condensed set of financial statements has been prepared in
accordance with United Kingdom Generally Accepted Accounting Practice,
specifically adhering to Financial Reporting Standard 104 "Interim Financial
Reporting" and the Statement of Recommended Practice, "Financial Statements of
Investment Companies and Venture Capital Trusts" issued in July 2022. It
provides a true and fair view of the assets, liabilities, financial position
and profit and loss of the Company as at 30 June 2025, as required by the
Disclosure Guidance and Transparency Rule 4.2.4R; and
- the Half Year Report includes a fair review of the information
concerning related party transactions as required by Disclosure Guidance and
Transparency Rule 4.2.8R.
The Half Year Report has not been reviewed or audited by the Company's
auditor.
The Half Year Report for the six months ended 30 June 2025 was approved by the
Board and the above Responsibility Statement has been signed on its behalf.
SARAH MACAULAY
Chair
FOR AND ON BEHALF OF THE BOARD
10 September 2025
INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2025 (UNAUDITED)
Note (Unaudited) (Unaudited) (Audited)
For the six months
For the six months
For the year
ended 30 June 2025
ended 30 June 2024
ended 31 December 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
(Losses)/gains on investments held at fair value through profit or loss - (18,911) (18,911) - 41,602 41,602 - 53,179 53,179
Net gains/(losses) on derivative contracts - 2,162 2,162 - (672) (672) - 1,338 1,338
Net foreign currency gains/(losses) - 1,186 1,186 - (307) (307) - (596) (596)
Income from investments 6,727 - 6,727 6,785 128 6,913 12,281 128 12,409
Other interest receivable and similar income 60 - 60 96 - 96 106 - 106
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Gross return/(loss) 6,787 (15,563) (8,776) 6,881 40,751 47,632 12,387 54,049 66,436
========= ========= ========= ========= ========= ========= ========= ========= =========
Management fee (364) (1,091) (1,455) (392) (1,177) (1,569) (794) (2,382) (3,176)
Performance fee - - - - - - - (2,767) (2,767)
Administrative expenses (423) - (423) (472) - (472) (1,025) - (1,025)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) before finance costs and taxation 6,000 (16,654) (10,654) 6,017 39,574 45,591 10,568 48,900 59,468
========= ========= ========= ========= ========= ========= ========= ========= =========
Finance costs (213) (638) (851) (248) (744) (992) (494) (1,482) (1,976)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) before taxation 5,787 (17,292) (11,505) 5,769 38,830 44,599 10,074 47,418 57,492
========= ========= ========= ========= ========= ========= ========= ========= =========
Taxation 3 (549) (878) (1,427) (562) (280) (842) (910) (961) (1,871)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) after taxation 5,238 (18,170) (12,932) 5,207 38,550 43,757 9,164 46,457 55,621
========= ========= ========= ========= ========= ========= ========= ========= =========
Return/(loss) per share (pence) 4 5.60 (19.43) (13.83) 5.41 40.07 45.48 9.61 48.71 58.32
========= ========= ========= ========= ========= ========= ========= ========= =========
The "Total" column of this statement is the profit and loss account of the
Company. The "Revenue" and "Capital" columns represent supplementary
information prepared under guidance issued by the The Association of
Investment Companies. The Company has no other items of other comprehensive
income, and therefore the net return/(loss) after taxation is also the total
comprehensive income/ (loss) for the period.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2025 (UNAUDITED)
Called-up Capital
share
Share
redemption
Special
Capital
Revenue
capital
premium
reserve
reserve
reserve
reserve
Total
Note
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 31 December 2024 5,456 114,656 11,646 29,182 292,247 22,889 476,076
Net (loss)/return after taxation - - - - (18,170) 5,238 (12,932)
Dividend paid in the period 5 - - - - - (10,755) (10,755)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 June 2025 5,456 114,656 11,646 29,182 274,077 17,372 452,389
========= ========= ========= ========= ========= ========= =========
FOR THE SIX MONTHS ENDED 30 JUNE 2024 (UNAUDITED)
Called-up Capital
share
Share
redemption
Special
Capital
Revenue
capital
premium
reserve
reserve
reserve
reserve
Total
Note
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 31 December 2023 5,456 114,656 11,646 29,182 262,783 24,761 448,484
Repurchase of the Company's own shares into treasury - - - - (7,855) - (7,855)
Net return after taxation - - - - 38,550 5,207 43,757
Dividend paid in the period 5 - - - - - (11,036) (11,036)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 June 2024 5,456 114,656 11,646 29,182 293,478 18,932 473,350
========= ========= ========= ========= ========= ========= =========
FOR THE YEAR ENDED 31 DECEMBER 2024 (UNAUDITED)
Called-up Capital
share
Share
redemption
Special
Capital
Revenue
capital
premium
reserve
reserve
reserve
reserve
Total
Note
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 31 December 2023 5,456 114,656 11,646 29,182 262,783 24,761 448,484
Repurchase of the Company's own shares into treasury - - - - (16,993) - (16,993)
Net return after taxation - - - - 46,457 9,164 55,621
Dividend paid in the year 5 - - - - - (11,036) (11,036)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2024 5,456 114,656 11,646 29,182 292,247 22,889 476,076
========= ========= ========= ========= ========= ========= =========
STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2025 (UNAUDITED)
(Unaudited) (Unaudited) (Audited)
30 June
30 June
31 December
2025
2024
2024
Note
£'000
£'000
£'000
Fixed assets
Investments held at fair value through profit or loss 472,362 504,943 506,932
Current assets
Debtors 1,683 1,103 303
Cash and cash equivalents 1,021 464 1,743
Derivative financial instruments held at fair value through profit or loss 367 1,378 993
-------------- -------------- --------------
3,071 2,945 3,039
========= ========= =========
Current liabilities
Creditors: amounts falling due within one year 6 (20,443) (33,667) (32,344)
Derivative financial instruments held at fair value through profit or loss (363) - -
(20,806) (33,667) (32,344)
-------------- -------------- --------------
Net current liabilities (17,735) (30,722) (29,305)
-------------- -------------- --------------
Total assets less current liabilities 454,627 474,221 477,627
========= ========= =========
Non current liabilities
========= ========= =========
Deferred taxation (2,238) (871) (1,551)
-------------- -------------- --------------
Net assets 452,389 473,350 476,076
========= ========= =========
Capital and reserves
Called-up share capital 7 5,456 5,456 5,456
Share premium 114,656 114,656 114,656
Capital redemption reserve 11,646 11,646 11,646
Special reserve 29,182 29,182 29,182
Capital reserve 274,077 293,478 292,247
Revenue reserve 17,372 18,932 22,889
-------------- -------------- --------------
Total equity shareholders' funds 452,389 473,350 476,076
========= ========= =========
Net asset value per share (pence) 8 483.71 495.91 509.04
========= ========= =========
Registered in England and Wales
Company registration number: 02153093
CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2025 (UNAUDITED)
(Unaudited) (Unaudited) (Audited)
for the six
for the six
For the
months ended
months ended
year ended
30 June
30 June
31 December
2025
2024
2024
Note
£'000
£'000
£'000
Net cash inflow from operating activities 9 815 3,579 7,409
Investing activities
Purchase of investments (82,418) (38,077) (106,492)
Sales of investments 96,477 60,856 137,445
Net cash flows on derivative instruments 2,898 (1,872) 1,520
--------------- --------------- ---------------
Net cash inflow from investing activities 16,957 20,907 32,473
--------------- --------------- ---------------
Net cash inflow before financing 17,772 24,486 39,882
--------------- --------------- ---------------
Financing activities
======== ======== ========
Dividends paid (10,755) (11,036) (11,036)
Interest paid (897) (1,073) (2,090)
Bank loans repayment (9,715) (15,485) (15,484)
Repurchase of the Company's own shares into treasury (259) (7,857) (16,736)
--------------- --------------- ---------------
Net cash outflow from financing activities (21,626) (35,451) (45,346)
--------------- --------------- ---------------
Net cash outflow in the period (3,854) (10,965) (5,464)
--------------- --------------- ---------------
Cash and cash equivalents at the beginning of the period (3,031) 2,527 2,527
======== ======== ========
Change in cash and cash equivalents (3,854) (10,965) (5,464)
Exchange movements (364) (11) (94)
--------------- --------------- ---------------
Cash and cash equivalents at the end of the period (7,249) (8,449) (3,031)
========= ========= =========
Represented by:
Cash at bank and derivative clearing houses 1,021 464 1,743
Overdraft at bank and derivative clearing houses (8,270) (8,913) (4,774)
Cash and cash equivalents at the end of the year (7,249) (8,449) (3,031)
========= ========= =========
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2025
1. FINANCIAL STATEMENTS
The information contained within the financial statements in this Half Year
Report has not been audited or reviewed by the Company's independent auditor.
The figures and financial information for the year ended 31 December 2024 are
extracted from the latest published financial statements of the Company and do
not constitute statutory financial statements for that year. Those financial
statements have been delivered to the Registrar of Companies and included the
report of the auditor which was unqualified and did not contain a statement
under either section 498(2) or 498(3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared in accordance with United Kingdom
Generally Accepted Accounting Practice, in particular with Financial Reporting
Standard 104 "Interim Financial Reporting" and with the Statement of
Recommended Practice "Financial Statements of Investment Trust Companies and
Venture Capital Trusts" issued by The Association of Investment Companies in
July 2022.
All of the Company's operations are of a continuing nature.
The accounting policies applied to these accounts are consistent with those
applied in the financial statements for the year ended 31 December 2024, with
the exception of the loan non-utilisation fees which have been reallocated
from expenses to finance costs. As the figure is immaterial, the prior periods
have not been restated.
3. TAXATION
(Unaudited) (Unaudited) (Audited)
Six months ended
Six months ended
Year ended
30 June 2025
30 June 2024
31 December 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Irrecoverable overseas tax 549 - 549 562 - 562 910 - 910
Overseas capital gains tax - 878 878 - 280 280 - 961 961
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Taxation for the year 549 878 1,427 562 280 842 910 961 1,871
========= ========= ========= ========= ========= ========= ========= ========= =========
The Company's effective corporation tax rate is nil, as deductible expenses
exceed taxable income.
The overseas capital gains tax relates to the deferred tax liability on
unrealised gains on Indian investments held at the period end.
4. (LOSS)/RETURN PER SHARE
(Unaudited) (Unaudited) (Audited)
Six months
Six months
Year ended
ended 30 June
ended 30 June
31 December
2025
2024
2024
£'000
£'000
£'000
Revenue return 5,238 5,207 9,164
Capital return (18,170) 38,550 46,457
--------------- --------------- ---------------
Total (loss)/return (12,932) 43,757 55,621
========= ========= =========
Weighted average number of shares in issue during the period 93,524,454 96,204,894 95,376,796
Revenue return per share (pence) 5.60 5.41 9.61
--------------- --------------- ---------------
Capital return per share (pence) (19.43) 40.07 48.71
--------------- --------------- ---------------
Total (loss)/return per share (pence) (13.83) 45.48 58.32
========= ========= =========
5. DIVIDEND PAID
(Unaudited) (Unaudited) (Audited)
Six months
Six months
Year ended
ended 30 June
ended 30 June
31 December
2025
2024
2024
£'000
£'000
£'000
--------------- --------------- ---------------
2024 dividend paid of 11.5p (2023: 11.5p) 10,755 11,036 11,036
========= ========= =========
No interim dividend has been declared in respect of the six months ended 30
June 2025 (2024: nil).
6. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
(Unaudited) (Unaudited) (Audited)
Six months
Six months
Year ended
ended 30 June
ended 30 June
31 December
2025
2024
2024
£'000
£'000
£'000
Bank loan 11,092 22,150 22,357
Bank overdraft 8,066 8,913 4,534
Amounts held at derivative clearing houses and brokers 204 - 240
Derivative financial instruments held at fair value through profit or loss - - - 254
CFD liabilities
Securities purchased awaiting settlement - 1,414 -
Amounts payable on settlement of derivatives - - 743
Repurchase of ordinary shares into treasury awaiting settlement - - 255
Other creditors and accruals 1,081 1,190 3,961
--------------- -------------- --------------
20,443 33,667 32,344
========= ========= =========
The Directors consider that the carrying amount of creditors falling due
within one year approximates to their fair value.
The bank loan comprises of USD15.2 million drawn down on the Company's £23.5
million, 364 day multicurrency credit facility with The Bank of Nova Scotia,
London Branch, expiring July 2026. The facility is secured and subject to
covenants and restrictions which are customary for a facility of this nature,
all of which have been complied with during the period. The facility is
reviewed annually, at which point the Directors can decide to restate and
renew the facility for a further year.
7. CALLED-UP SHARE CAPITAL
Changes in called-up share capital during the period were as follows:
Ordinary shares of 5p each, allotted, called-up and fully paid (Unaudited) (Unaudited) (Audited)
Six months
Six months
Year ended
ended 30 June
ended 30 June
31 December
2025
2024
2024
£'000
£'000
£'000
Opening balance of shares in issue of 5p each, excluding shares held in 4,676 4,862 4,862
treasury
Repurchase of shares into treasury - (89) (186)
--------------- --------------- ---------------
Subtotal of shares of 5p each, excluding shares held in treasury 4,676 4,773 4,676
========= ========= =========
Shares held in treasury 780 683 780
--------------- --------------- ---------------
Closing balance, of shares of 5p each, including shares held in treasury 5,456 5,456 5,456
========= ========= =========
Changes in the number of shares in issue during the period were as follows:
(Unaudited) (Unaudited) (Audited)
Six months
Six months
Year ended
ended 30 June
ended 30 June
31 December
2025
2024
2024
Ordinary shares of 5p each, allotted, called-up and fully paid
Opening balance of shares in issue, excluding shares held in treasury 93,524,454 97,234,120 97,234,120
Repurchase of shares into treasury - (1,783,206) (3,709,666)
-------------- -------------- --------------
Closing balance of shares in issue, excluding shares held in treasury 93,524,454 95,450,914 93,524,454
========= ========= =========
Closing balance of shares held in treasury 15,590,197 13,663,737 15,590,197
-------------- -------------- --------------
Closing balance of shares in issue, including shares held in treasury 109,114,651 109,114,651 109,114,651
========= ========= =========
8. NET ASSET VALUE PER SHARE
(Unaudited) (Unaudited) (Audited)
30 June
30 June
31 December
2025
2024
2024
Total equity shareholders' funds (£'000) 452,389 473,350 476,076
Shares in issue at the period end, excluding shares held in treasury 93,524,454 95,450,914 93,524,454
-------------- -------------- --------------
Net asset value per share (pence) 483.71 495.91 509.04
========= ========= =========
9. RECONCILIATION OF TOTAL RETURN ON ORDINARY ACTIVITIES BEFORE FINANCE COSTS
AND TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES
(Unaudited) (Unaudited) (Audited)
Six months
Six months
Year ended
ended 30 June
ended 30 June
31 December
2025
2024
2024
£'000
£'000
£'000
Total (loss)/return before finance costs and taxation (10,654) 45,591 59,468
Less capital loss/(returns) before finance costs and taxation 16,654 (39,574) (48,900)
(Increase)/decrease in prepayments and accrued income (529) (814) 82
(Increase)/decrease in other debtors (6) 11 4
(Decrease)/increase in other creditors (2,831) (107) 2,694
Special dividend allocated to capital - 128 128
Less stock and accumulation dividends (41) - -
Management fee allocated to capital (1,091) (1,177) (2,382)
Performance fee allocated to capital - - (2,767)
Overseas withholding tax deducted at source (687) (479) (918)
--------------- --------------- ---------------
Net cash inflow from operating activities 815 3,579 7,409
========= ========= =========
10. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE
The Company's financial instruments within the scope of FRS 102 that are held
at fair value include its investment portfolio and derivative financial
instruments.
FRS 102 requires that these financial instruments are categorised into a
hierarchy consisting of the following three levels below:
Level 1 - valued using unadjusted quoted prices in active markets for
identical assets.
Level 2 - valued using observable inputs other than quoted prices included
within Level 1.
Level 3 - valued using inputs that are unobservable.
The following table sets out the fair value measurements using the FRS102
hierarchy above:
30 June 2025 (unaudited)
Level 1 Level 2 Level 3 Total
£'000
£'000
£'000
£'000
Financial instruments held at fair value through profit or loss
Equity investments 472,362 - - 472,362
Derivative financial instruments - contracts for difference - CFD assets - 311 - 311
Derivative financial instruments - index put options 56 - - 56
Derivative financial instruments - forward currency contracts - (363) - (363)
--------------- --------------- --------------- ---------------
Total 472,418 (52) - 472,366
========= ========= ========= =========
30 June 2024 (unaudited)
Level 1 Level 2 Level 3 Total
£'000
£'000
£'000
£'000
Financial instruments held at fair value through profit or loss
Equity investments 504,943 - - 504,943
Derivative financial instruments - index put options 870 - - 870
--------------- --------------- --------------- ---------------
Total 505,813 - - 505,813
========= ========= ========= =========
31 December 2024 (audited)
Level 1 Level 2 Level 3 Total
£'000
£'000
£'000
£'000
Financial instruments held at fair value through profit or loss
Equity investments 506,932 - - 506,932
Derivative financial instruments - contracts for difference - CFD assets - 30 - 30
Derivative financial instruments - contracts for difference - CFD liabilities - (254) - (254)
Derivative financial instruments - index put options 505 - - 505
Derivative financial instruments - forward currency contracts - 458 - 458
--------------- --------------- --------------- ---------------
Total 507,437 234 - 507,671
========= ========= ========= =========
11. EVENTS AFTER THE REPORTING PERIOD
The Directors have evaluated the period since the half year date and have not
noted any significant events requiring disclosure after the end of the
reporting period to the date of this Half Year Report.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BLGDCXXBDGUGRecent news on Schroder Asian Total Return Investment
See all newsREG - Schroder AsianTR Inv - Net Asset Value(s)
AnnouncementREG - Schroder AsianTR Inv - Net Asset Value(s)
AnnouncementREG - Schroder AsianTR Inv - Net Asset Value(s)
AnnouncementREG - Schroder AsianTR Inv - Net Asset Value(s)
AnnouncementREG - Schroder AsianTR Inv - Net Asset Value(s)
Announcement