RCS - Schroder UK Mid - Results analysis from Kepler Trust Intelligence

Schroder UK Mid Cap FundAnnouncement

28/11/2025 09:30

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RNS Number : 4501J  Schroder UK Mid Cap Fund PLC  28 November 2025

Schroder UK Mid Cap (SCP)

28/11/2025

Results analysis from Kepler Trust Intelligence

Schroders UK Mid Cap (SCP) has released its results for the financial year
ending 30/09/2025. Over the year, the trust delivered a 10.8% NAV total return
(TR), versus its benchmark, the FTSE 250 ex-Investment Trusts Index, which
returned 6.7%. Over the same period, SCP delivered a share price TR of 18%.

The portfolio's allocation to the industrial sector was the largest
contributor to performance over the financial year, driven notably by the
overweight position in the aerospace and defence sub-sector. At the stock
level, Chemring, Babcock International and QinetiQ were also important
contributors to performance.

The trust's discount narrowed from 12.3% to 7.0% over the year. The board
repurchased 269,000 shares during the period, equivalent to c. 0.8% of the
shares in issue at the start of the financial year. Since the end of SCP's
financial year, the board has repurchased c. 1.2% of the shares in issue, with
the discount currently standing at 7.6% (as at 26/11/2025).

The proposed final dividend of 16.1p, combined with the interim dividend of
6.3p, brings the full-year dividend to 22.4p. This represents a c. 4.2%
increase year-on-year and would mark a fifth consecutive year of dividend
growth and results in a prospective yield of c. 3.3%. With revenue return per
share of 25.03p - a c. 22% year-on-year increase - the dividend is fully
covered.

Harry Morley, the new chair of the board, said: "Looking ahead, the board
remains confident in the long-term opportunity presented by UK mid-caps. This
part of the market continues to offer a compelling blend of structural growth
potential, corporate resilience and valuation support."

Kepler View

Schroder UK Mid Cap (SCP) has returned to outperformance in its latest annual
results. Managers Jean Roche and Andy Brough have successfully captured the
resurgence in defence-related stocks, with names such as Chemring, Babcock
International, and QinetiQ among the largest contributors to the trust's
outperformance. The managers have maintained their overweight exposure to the
aerospace and defence sector, albeit at a more modest level, viewing it as a
way to gain exposure to advanced technology and innovation with less valuation
risk than many technology sub-sectors. We think this industry is well
positioned for long-term structural growth, as European nations have committed
to increased defence spending since the outbreak of the war in Ukraine in
2022.

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