REG - Schroder Inc Growth - Half-year Report
13/05/2026 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:20260513:nRSM0514Ea&default-theme=true
RNS Number : 0514E Schroder Income Growth Fund PLC 13 May 2026
Schroder Income Growth Fund plc
Half Year Report
Schroder Income Growth Fund plc (the "Company") hereby submits its half year
report for the six months ended 28 February 2026 as required by the Financial
Conduct Authority's Disclosure Guidance and Transparency Rule 4.2.
Ewen Cameron Watt, Chairman of the Company, commented:
"Your Board remains confident in your Investment Manager's disciplined and
selective approach, and its ability to continue to successfully fulfil your
Company's objectives over the long term."
Key highlights
* The period under review saw a strong performance from UK equities. NAV total
return for the six months to 28 February 2026 was 17.4% versus 18.9% for the
FTSE All-Share Index. This was largely driven by a small number of stocks
within the FTSE All-Share Index delivering exceptionally strong returns.
* Longer term, returns remain above the FTSE All-Share Index since Sue Noffke
assumed responsibility for the Company's portfolio in July 2011.
* Share buybacks have continued to feature prominently both within the portfolio
and across the broader UK market with 66% of companies in the portfolio
conducting buybacks during the period.
* The Company delivered an increased dividend for the 30th consecutive year and
continues to aim to retain AIC "Dividend Hero" status.
* The reduction in the investment management fee contributed
approximately 0.17p per share (based on the current weighted average number
of shares) in the first half of the financial year, with revenue earnings
per share increasing to 3.97p for the period.
The Company's half year report is 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 www.schroders.com/incomegrowth
(http://www.schroders.com/incomegrowth) .
The Company's half year report will shortly be uploaded to the Financial
Conduct Authority's National Storage Mechanism and will be available for
inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
Enquiries:
Schroder Investment Management Limited
Kirsty Preston
(Press)
020 7658 6000
Francesca Davis (Company Secretary) 020 7658
6000
Chairman's Statement
I am pleased to present the half year results of your Company for the six
months ended 28 February 2026. Following shareholder approval at the Annual
General Meeting ("AGM") in December 2025 for the continuation of your Company
for a further five years, your Board and Investment Manager look forward to
continuing to fulfil the investment objective as your Company enters its
fourth decade.
Performance
Your Company's NAV total return for the six months to 28 February 2026 was
17.4% compared to the FTSE All-Share Index of 18.9%. The share price total
return matched the FTSE All-Share Index at 18.9% with the discount to NAV
narrowing over the period from 8.2% to 7.2%. Longer term, returns remain
above the FTSE All-Share Index since Sue Noffke assumed responsibility for
your Company's portfolio in July 2011.
The period under review saw a strong performance from UK equities, despite a
subdued but relatively resilient domestic economic backdrop, with returns
driven largely by global factors. Larger, internationally exposed companies
led the market, supported by renewed investor interest in the UK against
a backdrop of valuation and concentration concerns in US equities. As
outlined in your Investment Manager's review, sector performance reflected
this dynamic, with more traditional areas of the market generally faring well,
while developments in artificial intelligence contributed to greater
divergence within technology-related businesses.
Between 28 February 2026 to 7 May 2026, the NAV and share price have delivered
total returns of -5.2% and -3.7% respectively, versus the return for the FTSE
All-Share Index of -5.0%.
Revenue and dividends
Your Company has paid first and second interim dividends for the year ending
31 August 2026 of 3.25 pence per share (2024: 3.25 pence per share).
The income from investments received by your Company during the first half of
the financial year increased by 17.5%, reflecting a 7% rise in ordinary
dividend income and a special dividend from Lancashire Holdings, with no
equivalent receipt in the prior period. As in previous years, dividend income
is more heavily weighted to the second half of your Company's financial year,
and many companies continue to consider a broader range of strategies for
returning surplus funds to shareholders, including share buybacks.
Against this backdrop, the series of changes to reduce your Company's
investment management fee, which were announced in May 2025 and which came
into effect from 1 September 2025, have a proportionately greater impact in
the first half of the year, equating to approximately 0.17 pence per share,
based on the current weighted average number of shares. The revenue earnings
per share was 3.97p for the period compared to 2.84p for the prior period.
After paying the first interim dividend for the year ending 31 August 2026,
your Company has revenue reserves of 7.1 pence per share (based on shares
outstanding at the period end) equivalent to 48% of the dividends paid last
year. As at 28 February 2026, your Company had capital reserves of
£243,197,000 which, together with its revenue reserves, comprise your
Company's total distributable reserves. As mentioned in the annual report,
your Board's view is that all reserves generated from investment returns are
available for shareholders and to support the level of dividend you receive.
This aligns with most major investment sectors which focus on pay-outs based
on total return.
Your Board was pleased to deliver an increased dividend for the 30th
consecutive year for the year ended 31 August 2025 and continues to aim to
retain AIC "Dividend Hero" status. Your Board remains dedicated to delivering
your Company's investment objective supplemented, when necessary, by using
total distributable reserves to provide growing income for shareholders.
Board succession
As part of your Board's ongoing approach to succession planning, I will not be
standing for re‑election at your Company's 2026 AGM expected to be held in
December 2026 and will step down at the conclusion of that meeting, having
served as a Non-Executive Director for nine years.
Following a recommendation from the Nomination Committee and from which I
recused myself, your Board has agreed that Ms Victoria Muir, who has been a
Non‑Executive Director of your Company since July 2019 and Senior
Independent Director since December 2022, will succeed me as Chairman
following the conclusion of the 2026 AGM.
I am pleased to note that your Company will benefit from an orderly and
well‑planned transition, and from continuity of leadership under a successor
who knows your Company and its investment objective well.
Your Board intends to recruit and appoint an additional independent
Non-Executive Director in the second half of the calendar year. As part of
this process and the associated transition, your Board will consider the
respective chair appointments of your Company's Nomination, Remuneration, and
Management Engagement Committees.
Gearing
Your Company has in place a £30 million revolving credit facility with The
Bank of Nova Scotia, London Branch, expiring in September 2026. The average
gearing during the period was 8.4%. This made a positive contribution to
performance over the period.
Discount management
Your Board continues to manage actively the level and volatility of the share
price discount to NAV and the effectiveness of your Company's discount control
mechanisms. Your Board is prepared to act where appropriate, including
carrying out share buybacks, to help manage the discount in the interests of
shareholders and seeks to keep the discount to NAV within single digits in
normal market conditions. Your Company's discount to NAV at the period end
amounted to 7.2%.
During the six months to 28 February 2026, your Company bought back 803,214
ordinary shares, equating to 1.2% of your Company's issued share capital
(excluding treasury shares), for a sum of £2.8 million, to be held in
treasury. The average price paid per share was £3.43 and the share
repurchases contributed to approximately a 0.1% accretion in NAV.
Post period end, and as at the date of signing, your Company bought back a
further 1,035,000 ordinary shares into treasury for a sum of £3.6 million.
As at 7 May 2026, the discount to NAV was 6.1% compared to 7.2% at the end of
the period.
Schroders and Nuveen
On 12 February 2026, the Board of Schroders plc announced that they had agreed
the terms of a recommended cash acquisition by Nuveen, to combine the two
businesses. The announcement indicated that the transaction is not expected to
complete until Q4 2026.
Your Board has been informed that Nuveen's intention is to maintain continuity
across Schroders' existing investment and client-facing functions, and your
Board will closely monitor progress going forward. Further details are
available on the Schroders website:
https://www.schroders.com/en/global/individual/nuveenoffer/
(https://www.schroders.com/en/global/individual/nuveenoffer/)
ISA millionaire
Your Board was pleased to see your Company recognised on the Association of
Investment Companies' ("AIC") 2026 ISA millionaire list which comprises those
investment trusts that would have generated over £1 million had an investor
contributed their full annual ISA allowance since the inception of ISAs in
1999.
Outlook
Looking ahead, your Board is mindful that significant uncertainty remains,
particularly with respect to the conflict in Iran, which has potential
implications for inflation, interest rates and ongoing market volatility.
However, your Board shares your Investment Manager's constructive medium-term
outlook. Valuations in the UK remain supportive, and the market continues to
offer a diverse range of opportunities across sectors and structural growth
drivers. Against this backdrop, your Board remains confident in your
Investment Manager's disciplined and selective approach, and its ability to
continue to successfully fulfil your Company's objectives over the long term.
Your Board is particularly aware of consolidation within the investment trust
industry. In this context, and as mentioned earlier in my statement, I am
grateful that 95.79% of shareholders voted to support a five-year continuation
of your Company in December 2025. Notwithstanding this support, your Board
will continue to monitor industry developments solely through the lens of
delivering shareholder value.
Ewen Cameron Watt
Chairman
12 May 2026
Investment Manager's Review
Introduction
The six months under review were a strong period for UK equities, despite
a backdrop that has remained eventful from a geopolitical and market
leadership perspective. The economic backdrop was supportive globally - modest
growth and moderating inflation giving way to expectations of further cuts in
interest rates through 2026. Market leadership was dominated by larger
companies and certain sectors, which was a global phenomenon.
Your Company delivered a NAV total return of 17.4% over the six months to
28 February 2026. This compares to the FTSE All-Share Index, which returned
18.9%. This relative underperformance was largely driven by a small number of
stocks within the FTSE All-Share Index delivering exceptionally strong
returns. The impact of this concentration was also evident across the AIC UK
Equity Income peer group, which generated an average return of 15.0%. Your
Company's performance was ahead of its peer group, achieving a second quartile
ranking.
Your Board had previously announced a series of changes to reduce fees which
came into effect from 1 September 2025. As in previous years, the first half
of your Company's financial year accounts for a smaller proportion of total
annual income, with the heavier concentration of dividends arising in the
second half. The impact of the fee reductions is thus more weighted to the
first half of the year.
Earnings per share rose 40% to 3.97p, compared with 2.84p for the equivalent
period last year. This significant increase reflects three factors. Firstly,
higher income from investments. Secondly, lower costs - the previously
announced reductions to both investment management and administration fees,
and finance costs because of lower interest rates. And thirdly, reduced number
of shares in issue, as your Company has continued to buy back its own shares
in the market.
Income
Income from investments rose 17.5% to £3.38 million. The period benefited
from a special dividend from Lancashire Holdings, the specialist insurance
group, with no equivalent receipt in the prior period. Excluding this
contribution, ordinary dividend income for your Company grew by 7% - a
reflection of the broad-based dividend progress made across the portfolio
during the period.
Several holdings delivered double-digit dividend increases. In financials,
Prudential, XPS Pensions and 3i Group all grew their dividends strongly. Among
consumer-facing companies, Hollywood Bowl, Tesco, Cranswick and Associated
British Foods achieved similar rates of growth, as did construction company
Balfour Beatty.
Elsewhere, the picture was more mixed. The environment for dividend growth at
the market level remains relatively muted, with several holdings continuing to
direct surplus capital towards other objectives. For many companies, the
preference remains for share buybacks rather than higher dividends, which
reflects persistently modest equity valuations across much of the UK market.
Others have pursued increased capital expenditure - SSE and National Grid, for
example, are both funding substantial infrastructure investment programmes,
while HSBC and Computacenter have prioritised acquisition activity.
Share buybacks have continued to feature prominently both within the portfolio
and across the broader UK market. At period end, 30 of your Company's 46
holdings - representing 66% of the portfolio - conducted buybacks during the
period, broadly in line with the position at the end of the last financial
year. At the market level, 2025 marked the fourth consecutive year in which
buybacks have exceeded £60 billion. London has become the share buyback
capital of the world with over 55% of large, listed UK companies buying back
at least 1% of their shares over the previous 12 months, a significantly
higher proportion than historically was the case, and materially higher than
other equity markets. Taking account of new listings and equity issuance from
existing listed companies, the cumulative number of shares in the UK has
shrunk by 11.5% over the past five years, more than seen in other developed
markets. All other things equal, this will have weighed on market level
dividends and dividend growth but have bolstered dividend cover at company
level, ultimately enhancing dividend sustainability.
Your Investment Manager's view is that the UK market may now have reached a
peak in terms of buyback activity. The partial re-rating of certain larger
companies has, to some extent, undermined the case for buybacks. In some
cases, we see capital being redirected towards organic investment and
acquisition opportunities. Among smaller and mid-sized companies, however,
which have not experienced the same degree of re-rating and remain relatively
lowly valued, buyback activity looks set to continue. Your Investment Manager
sees this as a source of ongoing return potential for the portfolio.
Market background
UK equities performed strongly over the period, outperforming most other major
developed markets. Large caps outperformed mid and small caps, with the FTSE
100 Index delivering gains of 20.2%, passing through the 10,000 level for the
first time ever in the early days of 2026. The mid cap FTSE 250 Index
increased by a more modest but still impressive 11.6%. The FTSE All-Share,
your Company's benchmark rose 18.9%.
The UK economy remained subdued but relatively resilient over the period.
Market performance reflected the global nature of many UK-listed companies. A
shift in global investor preferences prompted by growing concerns around
valuation and concentration risk in US equities, particularly within the
technology sector, has seen renewed interest in other regions and areas of the
market. In this environment, sectors more closely associated with the 'old
economy', which are well represented in the UK market, returned to favour in
the period. Basic materials, utilities and healthcare were among the strongest
performers, benefiting from valuation support and the broader shift in
investor positioning.
By contrast, developments in artificial intelligence (AI) introduced greater
nuance within the technology sector. While areas such as hardware and
semiconductors continued to benefit, others - particularly parts of the
software segment - came under pressure as investors reassessed the potential
for disruption to established companies' business models. This distinction is
relevant in a UK context, where the market has limited exposure to hardware
but a greater representation of software and IT services businesses.
The global nature of these market dynamics, and the concentration of returns
within a relatively narrow group of sectors, helps to explain the dispersion
in returns across the market cap spectrum. While many of the companies most
exposed to these trends are larger and more internationally diversified,
performance has not been uniform across the large cap universe. The more
modest performance from mid and small cap stocks reflects lower exposure to
some of the more powerful secular trends, lingering concerns over the UK
economy and its fiscal position, whilst lower liquidity in this area of the
market has limited the impact of global investor flows.
Portfolio performance
Against this backdrop, your Company delivered a strong absolute return over
the period, with a number of holdings benefiting from these trends.
Rio Tinto was a positive contributor over the period, supported by its
attractive exposure to a diversified range of commodities, many of which
benefit from favourable supply-demand dynamics. With strong balance sheet
discipline, significant cash generation and leading positions in key markets
such as iron ore, copper and aluminium, the business is well positioned to
capture a range of long-term drivers, including the energy transition and data
infrastructure investment.
The company has also been involved in fresh discussions with Glencore
regarding a potential merger - a deal that has been discussed several times in
recent years. Rio Tinto walked away from the deal in February, with the
companies unable to agree key terms.
Outperformance from the mining sector reflects a broader theme of renewed
interest in businesses linked to physical assets and long-term investment.
Similarly, holdings such as SSE and Balfour Beatty performed well over the
period, reflecting their exposure to infrastructure and essential services,
with significant new projects generating attractive returns.
SSE performed well following a £2 billion capital raise to support its
investment programme. We participated in the transaction, which enables
double-digit growth in its regulated asset base through increased investment
in its electricity networks, essential for the energy transition and to meet
future demand. The successful execution of this raise helped to address market
concerns around funding and was met with a positive share price reaction.
Balfour Beatty also contributed positively, supported by a strong pipeline of
long-term infrastructure projects in the UK and the US, which provides good
visibility on future growth. In recent years, the company has built an
impressive track record of securing new business and managing the risks
inherent in delivering large and complex projects. This has underpinned
consistent operational performance and increasing returns to shareholders.
Standard Chartered was also a positive contributor over the period, benefiting
from a favourable interest rate backdrop and strong growth in its Asian wealth
management businesses. This growth reflects increasing client activity and
rising demand for investment and advisory services, with momentum in this area
a key driver of share price performance.
More broadly, however, performance across the financials sector was mixed, and
your Company's exposure here detracted from returns in aggregate. The
specialist lending company, ICG (formerly Intermediate Capital), was among the
largest detractors, with its share price coming under pressure due to concerns
about a downturn in the private credit cycle. This reflects a read across from
developments in the US on a de-rating of international peer companies. ICG's
underlying business has continued to perform well, with strong fund flows.
TP ICAP, the financial markets intermediary and data provider, was also weak
over the period. Having previously benefited from growing investor interest in
the value of its data and analytics business Parameta, the shares came under
pressure as the company stepped back from plans to spin off this division amid
more uncertain market conditions for data businesses.
Outside of financials, a small number of consumer-facing holdings also weighed
on returns. Burberry was a detractor, reflecting volatility in sentiment
towards luxury goods brands. The sector still appears to be bottoming out,
but your Investment Manager is confident Burberry's operational recovery
remains on track, positioning it well for a recovery in demand. Meanwhile,
Whitbread came under pressure following further UK budget initiatives which
will significantly impact its cost base. An activist shareholder subsequently
emerged on the register.
Relative performance benefited from not holding several highly rated index
constituents that came under pressure as markets reassessed the implications
of AI for parts of the software and data analytics universe. There is
increasing debate around the extent to which AI could disrupt data-driven
business models that have historically delivered high margins and returns.
While much of this reflects perceived rather than realised risk at this stage,
it has led to a de-rating of several large companies not held in the
portfolio, including Experian, London Stock Exchange, Sage and Compass. RELX,
which is held in the portfolio, also de-rated for similar reasons. As
valuations have adjusted downwards, your Investment Manager has been
undertaking further work in these areas as part of our ongoing assessment of
opportunities across the market.
Gearing also continued to make a positive contribution to performance over the
period, reflecting the strength of underlying markets.
Portfolio activity
Portfolio activity increased over the period as the opportunity set evolved.
Strong performance in parts of the market allowed your Investment Manager to
take profits where valuations had become closer to our assessment of fair
value and to redeploy capital into areas offering more attractive long-term
value. Exposure to mining was increased, funded in part by reductions in
consumer-exposed stocks, banks and real estate (following a bid for your
Company's holding), alongside selective switching within consumer staples and
industrials.
Within mining, your Investment Manager added to Rio Tinto and initiated a
position in Glencore, reflecting conviction in both the outlook for key
commodities and the companies' ability to deliver attractive returns through
the cycle. A position was also initiated in Weir, which provides exposure to
mining and infrastructure investment through its equipment and services
businesses.
Your Investment Manager added to the position in RELX following detailed work
to assess the potential impact of AI on data services and software business
models. This analysis suggests that RELX's range of business analytics and
decision-making tools across its risk, legal and scientific divisions should
be relatively well insulated from disruption, with much of the perceived risk
already reflected in the share price over the past nine months. By contrast,
the position in Pearson was exited, reflecting concern that the AI risks may
not yet be fully reflected in its valuation.
Within consumer staples and healthcare, your Investment Manager initiated a
position in Reckitt Benckiser and added to positions in Haleon and
GlaxoSmithKline whilst reducing Unilever. Infant nutrition litigation concerns
have eased for Reckitt Benckiser, and the disposal of its Essential Home
business has sharpened the focus on its remaining core portfolio, which
continues to deliver strong growth, particularly in emerging markets.
Meanwhile, the position in GlaxoSmithKline was increased as greater clarity on
the US pricing environment has improved visibility, and discussions with
management have reinforced our confidence in the strength of its HIV
franchise, broader pipeline, and the attractiveness of the current valuation.
These additions were funded in part by the disposal of holdings where prior
strong share price performance has resulted in more demanding valuations. Your
Investment Manager exited the position in 3i Group on the basis that its
valuation left little room for disappointment, as seen in the market reaction
to slower French growth in the final quarter of 2025. The current valuation
implies c. 5% like-for-like growth from discount retailer Action, its largest
portfolio holding, plus significant space growth from around 400 new stores
each year. These expectations look difficult to meet, and the position was
sold.
Elsewhere, the position in Tesco was sold following a period of stronger share
price performance. Similarly, the position in Balfour Beatty was trimmed
following positive performance, and the portfolio's exposure to banks was
reduced with trims of Lloyds and Standard Chartered.
The position in Associated British Foods was also sold. Your Investment
Manager's initial investment thesis centred on the potential for value release
through a separation of its Primark and food businesses, which has not
materialised as expected. Primark had been operating without a permanent chief
executive until it confirmed an appointment in March and its like-for-like
sales have started to disappoint. Meanwhile, the challenges within the food
division have extended into its higher quality ingredients business. Following
the bid for purpose-built student property company Empiric by larger peer
Unite, your Investment Manager exited the position.
Outlook
While it is pleasing to report on a period of positive performance, it would
be inappropriate to extrapolate the strength of recent returns too readily.
Post-period end, momentum has already been tested as tensions in the Middle
East have escalated, unsettling markets and introducing a renewed source of
uncertainty around energy prices, inflation and the path of interest rates. At
the time of writing, the UK market remains in positive territory calendar year
2026, but what happens next will likely depend on how the conflict in Iran
evolves and resolves, which is inherently difficult to predict.
Beyond this short-term uncertainty, the UK market continues to offer
attractive valuations, both in absolute terms and relative to many other
regions, while also providing a differentiated sector mix and broad exposure
to global rather than purely domestic drivers.
These characteristics have been beneficial during the period under review and,
in your Investment Manager's view, remain an important support for longer-term
returns. Many of the UK's largest companies have delivered strong share price
performance despite - perhaps even because of - their old economy roots. This
has come through multiple expansion from very low levels of valuations and, in
most cases, solid operational delivery of earnings growth, dividends and share
buybacks, which look set to continue. Healthcare businesses should benefit
from improved policy clarity and attractive product pipelines, banks are
supported by more normal interest rates and, in some cases, growing wealth
management activity in Asia and the UK, and mining companies are aided by
favourable supply-demand dynamics and exposure to several of the enduring
drivers of global growth and energy transition.
These larger, internationally diversified companies have, thus far, been the
primary beneficiaries of renewed global interest in the UK stock market. There
are also opportunities further down the market cap spectrum, where the
portfolio has attractive exposure. Small and mid-sized businesses are
currently trading at a meaningful discount to their larger peers and their
longer-term history, which is unusual given their historically stronger growth
profile. While this part of the market has lagged in recent years, the
valuation gap now appears unusually wide and could provide scope for outsized
returns in the years ahead.
Against this backdrop, your Investment Manager remains focused on building
a carefully constructed portfolio of attractively valued companies, drawing
on a wide range of opportunities across the market. It believes the UK market
continues to offer a selectively compelling combination of valuation support,
income and long-term total return potential.
Past Performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up
and investors may not get back the amount originally invested. Exchange rate
changes may cause the value of investments to fall as well as rise. For
illustrative purposes only and not a recommendation to buy or sell shares or
sectors.
Schroder Investment Management Limited
12 May 2026
Interim Management Report
Principal risks and uncertainties
The principal risks and uncertainties with the Company's business fall into
the following risk categories: strategic; investment management; economic and
market; custody; gearing; accounting, legal and regulatory; service provider;
cyber; and ESG and climate change. A detailed explanation of the risks and
uncertainties in each of these categories can be found on pages 32 to 35 of
the Company's published annual report and financial statements for the year
ended 31 August 2025.
The Company's principal risks and uncertainties have not materially changed
during the six months ended 28 February 2026.
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 36 of
the published annual report and financial statements for the year ended 31
August 2025, the Directors consider it appropriate to adopt the going concern
basis in preparing the 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 28 February 2026.
Directors' responsibility statement
In respect of the half year report for the six months ended 28 February 2026,
the Directors confirm that, to the best of their knowledge:
- the condensed set of Financial Statements contained within
have been prepared in accordance with the 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 Companies and Venture Capital Trusts"
issued in July 2022 and give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Company as at 28 February 2026,
as required by the Disclosure Guidance and Transparency Rule 4.2.4R; and
- the half year report includes a fair review of the
information as required by the Disclosure Guidance and Transparency
Rules 4.2.7R and 4.2.8R.
The half year report has not been audited or reviewed by the Company's
Auditor.
Ewen Cameron Watt
Chairman
For and on behalf of the Board
12 May 2026
Statement of Comprehensive Income
for the six months ended 28 February 2026 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six months For the six months For the year
ended 28 February ended 28 February ended 31 August
2026 2026 2026 2025 2025 2025 2025 2025 2025
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments held at fair value through profit or loss - 38,086 38,086 - 5,098 5,098 - 13,373 13,373
Net foreign currency losses - (37) (37) - - - - (12) (12)
Income from investments 3,383 - 3,383 2,878 - 2,878 10,332 - 10,332
Other interest receivable and similar income 16 - 16 - - - 92 - 92
Gross return 3,399 38,049 41,448 2,878 5,098 7,976 10,424 13,361 23,785
Management fee (181) (271) (452) (227) (341) (568) (460) (691) (1,151)
Administrative expenses (267) - (267) (329) - (329) (611) - (611)
Net return before finance costs and taxation 2,951 37,778 40,729 2,322 4,757 7,079 9,353 12,670 22,023
Finance costs (226) (339) (565) (350) (524) (874) (643) (965) (1,608)
Net return before taxation 2,725 37,439 40,164 1,972 4,233 6,205 8,710 11,705 20,415
Taxation 3 (31) - (31) - - - (45) - (45)
Net return after taxation 2,694 37,439 40,133 1,972 4,233 6,205 8,665 11,705 20,370
Return per share (pence) 4 3.97 55.23 59.20 2.84 6.10 8.94 12.55 16.96 29.51
The "Total" columns 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 Association of Investment
Companies. The Company has no other items of other comprehensive income, and
therefore the net return after taxation is also the total comprehensive income
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 28 February 2026 (unaudited)
Called-up Capital Warrant Share
share Share redemption exercise purchase Capital Revenue
capital premium reserve reserve reserve reserves reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 August 2025 6,946 9,449 2,011 1,596 30,522 178,049 7,673 236,246
Repurchase of ordinary
shares into treasury - - - - (2,813) - - (2,813)
Net return after taxation - - - - - 37,439 2,694 40,133
Dividend paid in the period 5 - - - - - - (5,568) (5,568)
At 28 February 2026 6,946 9,449 2,011 1,596 27,709 215,488 4,799 267,998
for the six months ended 28 February 2025
(unaudited)
Called-up Capital Warrant Share
share Share redemption exercise purchase Capital Revenue
capital premium reserve reserve reserve reserves reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 August 2024 6,946 9,449 2,011 1,596 34,834 166,344 10,381 231,561
Repurchase of ordinary
shares into treasury - - - - (615) - - (615)
Net return after taxation - - - - - 4,233 1,972 6,205
Dividend paid in the period 5 - - - - - - (6,907) (6,907)
At 28 February 2025 6,946 9,449 2,011 1,596 34,219 170,577 5,446 230,244
for the year ended 31 August 2025 (audited)
Called-up Capital Warrant Share
share Share redemption exercise purchase Capital Revenue
capital premium reserve reserve reserve reserves reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 August 2024 6,946 9,449 2,011 1,596 34,834 166,344 10,381 231,561
Repurchase of ordinary shares
into treasury - - - - (4,312) - - (4,312)
Net return after taxation - - - - - 11,705 8,665 20,370
Dividend paid in the period 5 - - - - - - (11,373) (11,373)
At 31 August 2025 6,946 9,449 2,011 1,596 30,522 178,049 7,673 236,246
Statement of Financial Position
as at 28 February 2026 (unaudited)
(Unaudited) (Unaudited) (Audited)
28 February 28 February 31 August
2026 2025 2025
Note £'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 289,051 258,324 259,636
Current assets
Debtors 5,399 633 1,658
Cash and cash equivalents 3,391 1,773 1,520
8,790 2,406 3,178
Current liabilities
Creditors: amounts falling due within one year 6 (29,843) (26,568) (30,486)
Net current liabilities (21,053) (28,080) (23,390)
Total assets less current liabilities 267,998 230,244 236,246
Net assets 267,998 230,244 236,246
Capital and reserves
Called-up share capital 7 6,946 6,946 6,946
Share premium 9,449 9,449 9,449
Capital redemption reserve 2,011 2,011 2,011
Warrant exercise reserve 1,596 1,596 1,596
Share purchase reserve 27,709 34,219 30,522
Capital reserves 215,488 170,577 178,049
Revenue reserve 4,799 5,446 7,673
Total equity shareholders' funds 267,998 230,244 236,246
Net asset value per share (pence) 8 398.71 332.65 347.32
Registered in England and Wales as a public company limited by shares
Company registration number: 03008494
Notes to the Financial Statements
For the six months ended 28 February 2026
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 auditor.
The figures and financial information for the year ended 31 August 2025 are
extracted from the latest published financial statements of the Company and do
not constitute statutory accounts 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 financial statements are consistent
with those applied in the financial statements for the year ended 31 August
2025.
3. Taxation
The Company's effective corporation tax rate is nil, as deductible expenses
exceed taxable income. Taxation on ordinary activities comprises irrecoverable
overseas withholding tax.
4. Return per share
(Unaudited) (Unaudited)
Six months Six months (Audited)
ended ended Year ended
28 February 28 February 31 August
2026 2025 2025
£'000 £'000 £'000
Revenue return 2,694 1,972 8,665
Capital return 37,439 4,233 11,705
Total return 40,133 6,205 20,370
Weighted average number of shares in issue during the period 67,787,304 69,396,551 69,031,408
Revenue return per share (pence) 3.97 2.84 12.55
Capital return per share (pence) 55.23 6.10 16.96
Total return per share (pence) 59.20 8.94 29.51
5. Dividends paid
(Unaudited) (Unaudited)
Six months Six months (Audited)
ended ended Year ended
28 February 28 February 31 August
2026 2025 2025
£'000 £'000 £'000
2025 fourth interim dividend of 4.95p (2024: 6.7p) 3,366 4,651 4,651
First interim dividend of 3.25p (2025: 3.25p) 2,202 2,256 2,256
Second interim dividend (2025: 3.25p) - - 2,238
Third interim dividend of (2025: 3.25p) - - 2,228
5,568 6,907 11,373
The 2025 fourth interim dividend was lower than previous interim dividends as
a result of dividend smoothing earlier in the financial year. A second interim
dividend of 3.25p (2025: 3.25p) per share, amounting to £2,258,000 (2025:
£2,238,000) has been paid on the 30 April 2026 in respect of the year-ending
31 August 2026.
6. Creditors: amounts falling due within one year
(Unaudited) (Unaudited)
Six months Six months (Audited)
ended ended Year ended
28 February 28 February 31 August
2026 2025 2025
£'000 £'000 £'000
Bank loan 26,000 30,000 26,000
Repurchases of the Company's own shares awaiting settlement 358 - 104
Other creditors and accruals 3,485 486 464
29,843 30,486 26,568
The bank loan comprises £26.0 million drawn down on the Company's secured
revolving credit facility with The Bank of Nova Scotia, London Branch.
7. Called-up share capital
(Unaudited) (Unaudited)
Six months Six months (Audited)
ended ended Year ended
28 February 28 February 31 August
2026 2025 2025
£'000 £'000 £'000
Ordinary Shares of 10p each, allotted, called up and fully paid:
Ordinary shares in issue:
Opening balance of 68,019,152 (year ended 31 August 2025: 69,425,343 and 6,801 6,942 6,942
period ended 28 February 2025: 69,425,343) ordinary shares of 10p each
Repurchase of 803,214 (year ended 31 August 2025: 1,406,191 and period ended (80) (21) (141)
28 February 2025: 211,100) shares held in treasury
Closing balance of 67,215,938 (year ended 31 August 2025: 68,019,152 and 6,721 6,921 6,801
period ended 28 February 2025: 69,214,243) shares in issue, excluding shares
held in treasury
Shares held in treasury 2,247,405 (year ended 31 August 2025: 1,444,191 and 225 25 145
period ended 28 February 2025: 249,100)
Closing balance of 69,463,343 (year ended 31 August 2025: 69,463,343 and 6,946 6,946 6,946
period ended 28 February 2025: 69,463,343) shares in issue
8. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
28 February 28 February 31 August 2025
2026 2025
£'000 £'000 £'000
Net assets attributable to shareholders (£'000) 267,998 230,244 236,246
Shares in issue at the period end 67,215,938 69,214,243 68,019,152
Net asset value per share (pence) 398.71 332.65 347.32
9. Financial instruments measured at fair value
The Company's financial instruments that are held at fair value comprise its
investment portfolio. At 28 February 2026, all investments in the Company's
portfolio were categorised as Level 1 in accordance with the criteria set out
in paragraph 34.22 (amended) of FRS 102. Accordingly, all investments are
valued using unadjusted quoted prices in active markets for identical assets
(31 August 2025 and 28 February 2025: the same basis applied).
10. Events after the interim period that have not been reflected in the
financial statements for the interim period
The Directors have evaluated the period since the interim date and have not
noted any other events which have not been reflected in the financial
statements.
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 QLLFFQELZBBF
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Schroder Income Growth Fund
See all newsREG - Schroder Inc Growth - Portfolio Update
AnnouncementREG - Schroder Inc Growth - Net Asset Value(s)
AnnouncementREG - Schroder Inc Growth - Transaction in Own Shares
AnnouncementREG - Schroder Inc Growth - Net Asset Value(s)
AnnouncementREG - Schroder Inc Growth - Net Asset Value(s)
Announcement