REG - Sherborne Inv. C Ld - Half-year Report
04/09/2025 07:00
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RNS Number : 9237X Sherborne Investors (Guernsey)C Ltd 04 September 2025
SHERBORNE
INVESTORS (GUERNSEY) C LIMITED
Interim Report and Unaudited Condensed Financial Statements
For the period from 1 January 2025 to 30 June 2025
Company Summary
The Company Sherborne Investors (Guernsey) C Limited (the "Company") is a Guernsey
domiciled limited company and its shares are admitted to trading on the London
Stock Exchange's Specialist Fund Segment ("SFS"). The Company was incorporated
on 25 May 2017. The Company commenced dealings on the SFS on 12 July 2017.
Investment Objective To realise capital growth from investment in a target company identified by
the Investment Manager, with the aim of generating a significant return of
capital for Shareholders.
Investment Policy To invest in a company which is publicly quoted which it considers to be
undervalued as a result of operational deficiencies and which it believes can
be rectified by the Investment Manager's active involvement, thereby
increasing the value of the investment. The Company will only invest in one
target company at a time.
Investment Manager Sherborne Investors Management LP (including affiliates, the "Investment
Manager") provides investment management services to SIGC LLC and other funds
in which the Company is indirectly an investor (the "Funds"). See Note 1 and
Note 9 for details of changes in the period.
Chairman's Statement
For the period ended 30 June 2025
Dear Shareholder,
I am pleased to present the Interim Report of Sherborne Investors (Guernsey) C
Limited (the "Company") for the period 1 January 2025 to 30 June 2025.
As at 30 June 2025, the net asset value ("NAV") attributable to shareholders
of the Company was £405.9 million (30 June 2024: £454.7 million and 31
December 2024: £430.3 million) or 58.0 pence per share (30 June 2024: 65.0
pence per share and 31 December 2024: 61.5 pence per share) (see Note 8). As
at 31 August 2025 the estimated (unaudited) NAV, as reported, was 58.0 pence
per share.
The Company co-invests in Navient Corporation ("Navient") with other investors
in funds managed by Sherborne Investors Management LP ("Sherborne Investors").
Sherborne Investors owns approximately 30% of Navient's outstanding shares,
making it the largest shareholder in Navient, and also owns a 30.1% interest
in the outstanding shares of the Company. The Company is pursuing its
investment strategy through its indirect shareholding in Navient.
Following Navient's AGM on 5 June 2025, Mr. Edward Bramson, a partner in
Sherborne Investors, was appointed Chairman of the board of directors of
Navient. Mr. Bramson has assisted the Navient board with the formulation and
execution of the first phase of Navient's turnaround. The first phase
consisted of three primary objectives: outsourcing of loan servicing,
divestiture of a non-core division, and reducing operating expenses. Navient
announced on 29 January 2025 that the first phase of the turnaround resulted
in the completion of the three primary objectives, including a reduction in
overhead expenses of approximately 40%. Phase two of the turnaround is
expected to be announced in the second half of 2025 and will consist of
additional cost reductions and specific growth targets, principally focusing
on Navient's Earnest business.
For further information on Navient, including its strategy and performance,
please refer to its publicly available financial statements and presentations
available at www.sec.gov (http://www.sec.gov/) or Navient's website at
www.navient.com. (http://www.navient.com/)
During H1 2025 Navient paid dividends to shareholders totalling $0.32 per
share, of which the Company received its proportionate share. The Company paid
a dividend with respect to 2024 results of 0.1 pence per share on 23 May 2025.
The present intention is to pay a further 0.1 pence per share to shareholders
following the 2025 full year results.
Also during H1 it was my sad duty to report on the death of our highly
respected and valued colleague and co-director Ian Brindle. His common sense,
shrewdness and sense of humour will always be missed. On 1 September 2025, the
Company welcomed the appointment of James Christie to the Board as a
non-executive director. We are very pleased that we are able to attract such a
highly qualified individual and look forward to working with James. Further
details regarding James' background and experience can be found on page 5.
Following the Company's AGM on 21 May 2025, the Company has begun repurchasing
shares for cancellation. As at 31 August 2025, the Company had repurchased 3
million shares for gross consideration of £1.25 million, equivalent to an
aggregate purchase price of approximately 42 pence per share. This purchase
price represents an approximate 25% discount to the prevailing NAV of the
Company and is therefore accretive to the NAV of the Company. The Company
continues to expect to allocate, in total, between £10 million and £15
million to share repurchases during the year.
The Company announced that all resolutions proposed at the 2025 AGM were
passed with the necessary majority. A small number of shareholders, however,
voted against an increase in the aggregate amount permitted to be paid to the
directors, the resolution approved by the Takeover Panel waiving the
requirement for concert parties to make a mandatory bid for the Company
resulting from share repurchases, and the authorisation to repurchase shares.
The Board has sought to engage with holders of the majority of the shares that
voted against one or more of these resolutions and will continue in such
endeavours.
The principal risks and uncertainties of the Company are in relation to
performance risk, market risk, key person risk, fraud and cybersecurity risk,
accounting, legal, and regulatory risks, and emerging risk. These are
unchanged from 31 December 2024, and further details may be found in the
Directors' Report within the Annual Report and Audited Consolidated Financial
Statements of the Company for the year ended 31 December 2024. The Directors
will continue to assess the principal risks and uncertainties relating to the
Company for the remaining six months of the year but expect these to remain
unchanged.
Following Mr. Bramson's appointment as Chairman of the board of directors of
Navient, the investment in Navient is now classified as a Turnaround
Investment. Further details of related party transactions during the period
are included in Note 9 of the Condensed Financial Statements.
Board of Directors
Talmai Morgan (Chairman)
Appointed to the Board 25 May 2017
Mr Morgan has served as a non-executive director on the board of 14 publicly
listed investment companies (including 3 FTSE 250 companies) since 2005. He is
currently Chairman of Sherborne Investors (Guernsey) C Limited. From 1999 to
2004, Mr Morgan worked as a financial services regulator (Director of
Fiduciary Services and Enforcement at the Guernsey Financial Services
Commission) and was particularly involved in the activities of the Financial
Action Task Force and the Offshore Group of Banking Supervisors. Prior to
1999, Mr Morgan held positions at Barings and the Bank of Bermuda. He
qualified as a barrister in 1976 and holds an MA in Economics and Law from the
University of Cambridge.
Linda Wilding (Audit Committee Chairman)
Appointed to the Board 1 February 2023
Ms Wilding has previously served as Chair and non-executive director of
various public and private equity backed companies for over 20 years. After
gaining a PhD in Biochemistry she joined EY and trained as a Chartered
Accountant. From the late 1980s she spent over a decade at Mercury Asset
Management as a fund manager in their private equity division. She has chaired
the ESG committee at the Balanced Commercial Property Trust plc (BCPT plc).
She is also currently on the Board of Wesleyan Assurance Society, a specialist
in mutual financial services, and Odyssean Investment Trust plc, an investment
trust.
Trevor Ash (Director)
Appointed to the Board 25 May 2017
Mr Ash has been a non-executive director of a number of investment entities
since 1999, including funds managed by Rothschild, Insight, Cazenove, Merrill
Lynch and Thames River Capital. He was formerly Chairman of JPEL Private
Equity Limited. Prior to 1999, Mr Ash spent 27 years with the Rothschild Group
in various capacities, most recently as Managing Director of Rothschild Asset
Management (CI) Limited and as a non-executive director of Rothschild Asset
Management Limited in London. Mr Ash is a fellow of the Chartered Institute
for Securities & Investment.
Helen Sinclair (Director)
Appointed to the Board 1 February 2023
Ms Sinclair has a degree in Economics from Cambridge and an MBA from INSEAD
business school. She began her career in investment banking and then moved
into private equity investment at 3i. Prior to her focus on non-executive
director roles, Helen co-founded and ran Matrix Private Equity (which became
Mobeus Equity Partners LLP). Helen has a thirty-year track record as an
investor, board member and board observer in a various sectors. Helen serves
on the Boards of Octopus Future Generations VCT plc, BlackRock Smaller
Companies Trust plc, Shires Income plc and North East Finance Ltd.
James Christie (Director)
Appointed to the Board 1 September 2025
Mr Christie has an MBA from Henley Management College and is a member of the
Chartered Institute of Securities and Investment. He began his career in fund
administration and fund management, working across private and public
companies in sectors such as private equity, real estate, infrastructure,
debt, and energy. James held multiple board positions in fund management and
licensed investment companies, developing deep expertise in corporate
governance and risk management. He is currently an Executive Director at Oak
Fund Services (Guernsey) Limited, where he leads client relationships and
oversees the delivery of fund administration services.
Responsibility statement
We confirm that to the best of our knowledge:
• The condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by the
European Union;
• The interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events during the
first six months and their impact on the condensed financial statements and
description of principal risks and uncertainties for the remaining six months
of the year);
• The interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein);
• The condensed set of financial statements, which has been
prepared in accordance with the applicable set of accounting standards, gives
a true and fair view of the assets, liabilities, financial position and profit
or loss of the issuer as required by DTR 4.2.4R; and
• The condensed set of financial statements have not been subject
to an audit or review by an independent auditor.
Going Concern
The Condensed Financial Statements have been prepared on the going concern
basis. The net current asset position as at 30 June 2025 is £0.8 million. The
Directors have considered the impact to the Company, as well as to Navient
Corporation's ("Navient") and the Company's stock prices, of the current
economic environment, including the current interest rates and inflationary
environment, and have concluded that there is no impact on the going concern.
At 30 June 2025 the Company had a NAV of £405.9 million. The Company, via the
Funds, has sufficient liquid assets to meet expected costs. In the unlikely
scenario that the Company's annualized expenses were to increase 100%, the
resulting expenses would only represent approximately 0.1% of the Company's
NAV. The level of liquid assets and expenses in the underlying structure has
been considered, and the Investment Manager has the full intent and ability
for the Funds to provide the Company with funds as and if required.
After enquiring with the Investment Manager and Apex Fund and Corporate
Services (Guernsey) Limited (the "Administrator") and conducting a thorough
review of the Company's working capital and cash flow requirements, the
Directors have a reasonable expectation that the Company, via the Funds, has
adequate resources to continue in operational activities for the foreseeable
future, based on sufficient cash reserves as of 30 June 2025. The Board is
satisfied, that at the time of approving the condensed financial statement, no
material uncertainties exist that may cast significant doubt concerning the
Company's ability to continue for the foreseeable future, being 12 months
after the date of approval of the condensed financial statements.
Condensed Statement of Comprehensive Income (Unaudited)
For the period from 1 January 2025 to 30 June 2025
1 January 2025 to 1 January 2024 to 1 January 2024 to
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
Notes £ £ £ £ £ £
Income
Unrealised loss on financial assets at fair value through profit or loss 5 (22,031,328) (128,191,068)
(107,634,577)
Interest income 2,069 3,595 6,677
Total loss (22,029,259) (107,630,982) (128,184,391)
Expenses
Professional fees 219,924 108,579 213,362
Directors' fees 2, 7 104,487 97,500 208,800
Administrative fees 64,118 60,236 123,221
Other fees 92,253 87,033 173,249
Total operating expenses 480,782 352,609 718,632
Comprehensive loss (22,510,041) (107,983,591) (128,903,023)
Weighted average number of shares outstanding 4 699,408,840 700,000,000 700,000,000
Basic and diluted deficit per share 4 (3.22p) (15.43p) (18.41p)
All income and expenses are derived from continuing operations. There are no
items of other comprehensive income.
Although not required by IAS 34 - 'Interim Financial Reporting', the
comparative figures for the preceding year and the related notes have been
included on a voluntary basis.
The accompanying notes form an integral part of these Condensed Financial
Statements.
Condensed Statement of Financial Position (Unaudited)
As at 30 June 2025
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
Notes £ £ £ £ £ £
Non-Current Assets
Financial assets at fair value through profit or loss 5 405,116,929 454,130,975 429,674,484
405,116,929 454,130,975 429,674,484
Current Assets
Cash and cash equivalents 11 749,263 674,929 758,603
Prepaid expenses 55,079 48,982 13,291
804,342 723,911 771,894
Current Liabilities
Trade and other payables 6 38,058 87,944 98,868
38,058 87,944 98,868
Net Current Assets 766,284 635,967 673,026
Net Assets 405,883,213 454,766,942 430,347,510
Capital and Reserves
Called up share capital and share premium 7 687,685,147 688,939,403 688,939,403
Retained reserves (281,801,934) (234,172,461) (258,591,893)
Total Equity 405,883,213 454,766,942 430,347,510
NAV Per Share 8 58.23p 64.97p 61.47p
The Condensed Financial Statements were approved by the Board of Directors for
issue on 03 September 2025.
Although not required by IAS 34 - 'Interim Financial Reporting', the
comparative figures for the preceding year and the related notes have been
included on a voluntary basis.
The accompanying notes form an integral part of these Condensed Financial
Statements.
Condensed Statement of Changes in Equity (Unaudited)
For the period from 1 January 2025 to 30 June 2025
Share Capital Retained Reserves/
and Share (Deficit) Total
Premium Equity
Notes £ £
£
Balance at 1 January 2025 (unaudited) 688,939,403 (258,591,893) 430,347,510
Comprehensive loss - (22,510,041) (22,510,041)
Distributions 12 - (700,000) (700,000)
Share buyback 7 (1,254,256) - (1,254,256)
Balance at 30 June 2025 (unaudited) 687,685,147 (281,801,934) 405,883,213
Share Capital Retained Reserves/
and Share (Deficit) Total
Premium Equity
£ £ £
Balance at 1 January 2024 (unaudited) 688,939,403 (122,688,870) 566,250,533
Comprehensive loss - (107,983,591) (107,983,591)
Distributions 12 - (3,500,000) (3,500,000)
Balance at 30 June 2024 (unaudited) 688,939,403 234,172,461 454,766,942
Share Capital Retained Reserves/
and Share (Deficit) Total
Premium Equity
£ £ £
Balance at 1 January 2024 (Audited) 688,939,403 (122,688,870) 566,250,533
Comprehensive loss - (128,903,023) (128,903,023)
Distributions 12 - (7,000,000) (7,000,000)
Balance at 31 December 2024 (Audited) 688,939,403 (258,591,893) 430,347,510
Although not required by IAS 34 - 'Interim Financial Reporting', the
comparative figures for the preceding year and the related notes have been
included on a voluntary basis.
The accompanying notes form an integral part of these Condensed Financial
Statements.
Condensed Statement of Cash Flows (Unaudited)
For the period from 1 January 2025 to 30 June 2025
Notes 1 January 2025 to 30 June 2025 1 January 2024 to 30 June 2024
(unaudited) (unaudited) 1 January 2024 to
£ £ 31 December 2024
(Audited)
£
Cash flows from operating activities
Comprehensive loss (22,510,041) (107,983,591) (128,903,203)
Adjustments for:
Unrealised loss on financial assets at fair value through loss 5 22,031,328 107,634,577 128,191,068
Movement in prepaid (41,788) (30,267) 5,424
expenses
Movement in trade and other payables 6 (60,810) (12,383) (1,459)
Interest income (2,069) (3,595) (6,677)
Net cash flow used in operating (583,380) (395,259) (714,667)
activities
Investing activities
Distributions from 5 2,526,227 3,750,000 7,650,000
investments
Interest income 2,069 3,595 6,677
Net cash flow from investing activities 2,528,296 3,753,595 7,656,677
Financing activities
Distributions to shareholders 12 (700,000) (3,500,000) (7,000,000)
Share buyback 7 (1,254,256) - -
Net cash flow used in financing activities (1,954,256) (3,500,000) (7,000,000)
Net movement in cash and cash equivalents (9,340) (141,665) (57,990)
Opening cash and cash equivalents 758,603 816,594 816,593
Closing cash and cash equivalents 749,263 674,929 758,603
Although not required by IAS 34 - 'Interim Financial Reporting', the
comparative figures for the preceding year and the related notes have been
included on a voluntary basis.
The accompanying notes form an integral part of these Condensed Financial
Statements.
Notes to the Condensed Financial Statements
For the period from 1 January 2025 to 30 June 2025
1. Summary of significant accounting policies
Reporting entity
Sherborne Investors (Guernsey) C Limited (the "Company") is a closed-ended
investment company with limited liability formed under the Companies
(Guernsey) Law, 2008 (as amended). The Company was incorporated and registered
in Guernsey on 25 May 2017. The Company's registered office is 1 Royal Plaza,
Royal Avenue, St Peter Port, Guernsey, Channel Islands, GY1 2HL.
The Company commenced dealings on the London Stock Exchange's Specialist Fund
Segment on 12 July 2017.
Basis of preparation
The Company's Condensed Unaudited Financial Statements have been prepared in
accordance with IFRS Accounting Standards ("IFRS"), Standard 34, 'Interim
Financial Reporting' ("IAS 34") as adopted by the European Union, which
comprise standards and interpretations approved by the International
Accounting Standards Board ("IASB") and International Accounting Standards and
Standing Interpretations Committee, Interpretations approved by the
International Accounting Standards Committee that remain in effect, together
with applicable legal and regulatory requirements of Guernsey law.
The Directors of the Company have taken the exemption in Section 244 of the
Companies (Guernsey) Law, 2008 (as amended) and have therefore elected to only
prepare standalone Financial Statements for the period.
Going concern
The Condensed Financial Statements have been prepared on the going concern
basis. The net current asset position as at 30 June 2025 is £0.8 million. The
Directors have considered the impact to the Company, as well as to Navient
Corporation's ("Navient") and the Company's stock prices, of the current
economic environment, including the current interest rates and inflationary
environment, and have concluded that there is no impact on the going concern.
At 30 June 2025 the Company had a NAV of £405.9 million. The Company, via the
Funds, has sufficient liquid assets to meet expected costs. In the unlikely
scenario that the Company's annualized expenses were to increase 100%, the
resulting expenses would only represent approximately 0.1% of the Company's
NAV. The level of liquid assets and expenses in the underlying structure has
been considered, and the Investment Manager has the full intent and ability
for the Funds to provide the Company with funds as and if required.
After enquiring with the Investment Manager and Apex Fund and Corporate
Services (Guernsey) Limited (the "Administrator") and conducting a thorough
review of the Company's working capital and cash flow requirements, the
Directors have a reasonable expectation that the Company, via the Funds, has
adequate resources to continue in operational activities for the foreseeable
future, based on sufficient cash reserves as of 30 June 2025. The Board is
satisfied, that at the time of approving the condensed financial statement, no
material uncertainties exist that may cast significant doubt concerning the
Company's ability to continue for the foreseeable future, being 12 months
after the date of approval of the condensed financial statements.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the Company's Condensed Financial Statements requires
management to make estimates and assumptions that affect the reported amounts
of assets, liabilities and contingencies at the date of the Company's
Condensed Financial Statements and income and expenses during the reported
period. Actual results could differ from those estimated.
i) Critical accounting judgement: Consolidation of entities
As described further in Note 5, as at 30 June 2025 and 30 June 2024 the
Company holds a non-controlling investment in SIGC LLC. While the Company
holds a majority interest in SIGC LLC and holds access to the rewards and
benefits, it does not exercise control over the day-to-day operations, nor
does it have the ability to remove the controlling party, Sherborne Investors
Master GP, LLC. As such, SIGC LLC is not consolidated but held and measured at
fair value through profit or loss in accordance with IFRS 9 'Financial
Instruments'. Fair value is measured in accordance with IFRS 13 'Fair Value
Measurement'.
ii) Source of estimation uncertainty: Financial assets at fair value through
profit or loss
The Company holds these investments solely for ownership purposes and does not
exercise control or have a significant influence over these investments.
Contractual cashflows are recognised upon realisation of the investment.
Consequently, it has elected to value using fair value through profit and loss
("FVTPL"). Fair value is based on the net asset value of the investment, with
the main contribution to the NAV being the quoted closing price of the STC as
at 30 June 2025, together with incentive fee and cash balances. Please see
Note 5 for further details.
Adoption of new and revised standards
(i) New standards adopted as at 1 January 2025:
The following standards are effective for the first time for the financial
period beginning 1 January 2025 and are relevant to the Company's operations:
· Amendments to IAS 21 - Lack of Exchangeability
The above standard has been adopted and did not have a material impact on the
financial statements.
(ii) Standards, amendments and interpretations early adopted by the Company:
There were no standards, amendments and interpretations early adopted by the
Company.
(iii) Standards, amendments and interpretations in issue but not yet
effective:
· Amendments to IFRS 18 - Presentation and Disclosure in Financial
Statements.
· Amendments to IFRS 9 and IFRS 7 - Classification and measurement
of financial instruments
Unless stated otherwise, the Directors do not consider the adoption of any new
and revised accounting standards and interpretations to have a material impact
as the new standards or amendments do not have a significant impact to the
company except for IFRS 18 - Presentation and Disclosure in Financial
Statements which will be applied from its mandatory effective date of 1
January 2027. Since retrospective application is required, the comparative
information for the financial year ending 31 December 2026 will be restated
accordingly.
a. Functional currency
The Condensed Financial Statements are presented in Pound Sterling ("£"),
which is the Company's functional and presentational currency. Items included
in the Financial Statements of the Company are incurred in Pound Sterling.
Foreign currency transactions are translated into the functional currency of
the Company using the exchange rates prevailing at the dates of the
transactions (spot exchange rate). Foreign exchange gains and losses resulting
from the settlement of such transactions and from the remeasurement of
monetary items denominated in foreign currency at period-end exchange rates
are recognised in profit or loss.
b. Financial assets at fair value through profit or loss
Financial assets, as defined by IFRS 9, are assets that represent a
contractual right to receive cash or another financial asset from another
entity.
Financial asset is recognised in its statement of financial position when it
becomes party to the contractual provisions of the instrument. At initial
recognition, the Company measures a financial asset at its fair value.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred.
Financial assets, other than those designated and effective as hedging
instruments, are classified into one of the following categories:
• amortised cost
• fair value through profit or loss (FVTPL), or
• fair value through other comprehensive income (FVOCI).
Financial assets held within a different business model other than 'hold to
collect' or 'hold to collect and sell' are categorised at FVTPL. Further,
irrespective of the business model used, financial assets whose contractual
cash flows are not solely payments of principal and interest are accounted for
at FVTPL.
Assets in this category are measured at fair value with gains or losses
recognised in profit or loss. The fair values of financial assets in this
category are determined by reference to active market transactions or using a
valuation technique where no active market exists.
Investments are designated at fair value through profit or loss in accordance
with IFRS 9 'Financial instruments', as the Company's business model is to
invest in financial assets and to generate profit from their total return in
the form of interest and changes in fair value. Please refer to note 1 under
critical accounting judgements and key sources of estimation uncertainty.
In determining fair value in accordance with IFRS 13 'Fair Value Measurement'
("IFRS 13"), investments measured and reported at fair value are classified
and disclosed in one of the following categories within the fair value
hierarchy:
Level I - An unadjusted quoted price for identical assets and liabilities in
an active market provides the most reliable evidence of fair value and is used
to measure fair value whenever available. As required by IFRS 13, the Company
will not adjust the quoted price for these investments, even in situations
where it holds a large position, and a sale could reasonably impact the quoted
price.
Level II - Inputs are other than unadjusted quoted prices in active markets,
which are either directly or indirectly observable as of the reporting date,
and fair value is determined using models or other valuation methodologies.
Level III - Inputs are unobservable for the investment and include situations
where there is little, if any, market activity for the investment. The inputs
into the determination of fair value require significant management judgement
or estimation.
The Company's investment is classified as a Level 3 investment within the fair
value hierarchy. Refer to Note 5 for the further details. On disposal of
shares, cost of investments is allocated on a first in, first out basis.
c. Revenue recognition
Investment income and interest receivable from short-term deposits are
recognised on an accruals basis. Where receipt of investment income is not
likely until the maturity or realisation of an investment then the investment
income is accounted for as an increase in the fair value of the investment.
d. Expenses
All expenses are accounted for on an accrual basis. Expenses are charged
through the Condensed Statement of Comprehensive Income in the period in which
they occur.
e. Prepaid expenses and trade receivables
Trade and other receivables are initially recognised at fair value and
subsequently, re-measured at amortised cost using the effective interest
method. A provision for an expected credit loss on trade receivables is
established when there is objective evidence the Company will not be able to
collect all amounts due according to the original terms of the receivables.
The Company only holds trade receivables with no financing component, and
which have maturities of less than 12 months at amortised cost and has
therefore applied the simplified approach to expected credit loss. In
accordance with IFRS 9, the Company also incorporates forward-looking
information into the determination of expected credit losses.
f. Cash and cash equivalents
Cash and cash equivalents comprise cash, call and current balances with banks
and similar institutions, which are readily convertible to known amounts of
cash and which are subject to insignificant risk of changes in value. This
definition is also used for the Statement of Cash Flows. The carrying amount
of these assets approximate their fair value, unless otherwise stated.
g. Trade and other payables
Trade and other payables are initially recognised at fair value and
subsequently, re-measured at amortised cost using the effective interest
method.
h. Financial instruments
Financial assets and liabilities are recognised in the Company's Condensed
Statement of Financial Position when the Company becomes a party to the
contractual provisions of the instrument.
2. Comprehensive income/(loss)
Ongoing charges are recurring expenses which are likely to recur in the
foreseeable future and are related to the operation of the Company. They
exclude costs for acquiring or disposing of investments, financing charges,
and investment gains/losses. The charges are based on annual costs, serving as
an estimate of future expenses.
The comprehensive income/(loss) has been arrived at after charging:
1 January 2025 to 30 June 2025 1 January 2024 to 30 June 2024 1 January 2024 to 31 December 2024
£ £ £
Directors' fees 104,487 97,500 208,800
Auditor's remuneration - Audit 50,353 55,000 90,000
3. Tax on ordinary activities
The Company has been granted exemption from income tax in Guernsey under the
Income Tax (Exempt Bodies) (Bailiwick of Guernsey) Ordinance 1989 and is
liable to pay an annual fee (currently £1,600 per company) under the
provisions of the Ordinance. As such it will not be liable to income tax in
Guernsey other than on Guernsey source income (excluding deposit interest on
funds deposited with a Guernsey bank). No withholding tax is applicable to
distributions to Shareholders by the Company.
Income which is wholly derived from the business operations conducted on
behalf of the investments made in, persons or companies who are not resident
in Guernsey will not be regarded as Guernsey source income. Such income will
not therefore be liable to Guernsey tax in the hands of non-Guernsey resident
limited partners.
The Funds may be liable to pay withholding tax on behalf of non‐US persons,
such as the Company, on dividend income from US sources, such as Navient. The
maximum statutory withholding tax rate is 30%.
4. Earnings per share
The calculation of basic and diluted earnings per share is based on the return
on ordinary activities and on there being 699,408,840 (30 June 2024:
700,000,000 and 31 December 2024: 700,000,000) weighted average number of
shares in issue during the period.
The earnings per share for the period attributable to equity shareholders
ended 30 June 2025 amounted to a deficit of 3.22 pence per share (period ended
30 June 2024: a deficit of 15.43 pence per share and year ended 31 December
2024: a deficit of 18.41 pence per share).
Date Shares Days at full share count Days post Buyback Weighted Average Shares
30 June 2025 697,000,000 142 39 699,408,840
31 December 2024 700,000,000 365 - 700,000,000
5. Financial assets at fair value through profit or loss
As at 30 June 2025 As at 30 June As at 31 December 2024
2024
£ £ £
Opening fair value 429,674,484 565,515,552 565,515,552
Distributions from investments (2,526,227) (3,750,000) (7,650,000)
Unrealised loss on financial assets at fair value through profit or loss (22,031,328) (107,634,577) (128,191,068)
Closing fair value 405,116,929 454,130,975 429,674,484
The following tables summarise by level within the fair value hierarchy the
Company's financial assets and liabilities at fair value as follows:
Level I Level II Level III Total
30 June 2025 £ £ £ £
Financial assets at fair value through profit and loss - - 405,116,929 405,116,929
30 June 2024 £ £ £ £
Financial assets at fair value through profit and loss - - 454,130,975 454,130,975
31 December 2024 £ £ £ £
Financial assets at fair value through profit and loss - - 429,674,484 429,674,484
As at 30 June 2025, the Company's investment consists solely of a
non-controlling investment in SIGC LLC which was organised to invest in the
STC. With SIGC LLC's balance sheet being measured at fair value, the NAV of
SIGC LLC provides the best estimate of fair value for the Company's investment
in SIGC LLC.
As at 30 June 2025 SIGC LLC's investment, via an intermediary, consists of a
non-controlling investment in each of Sherborne Strategic Fund F, LLC, which
holds common stock of Navient, and Sherborne Strategic Fund G, LLC, which
holds common stock of the Company.
The Investment Manager continually evaluates the optimal allocation of
ownership of shares in Navient versus those of the Company. The Investment
Manager may from time to time buy or sell shares in Navient and the Company to
adjust the allocation. Some of the factors in the allocation decision include
the relative liquidity of the shares of Navient and the Company, the discount
to net asset value at which the Company's share trade and various tactical
considerations, and general market conditions. Furthermore, the Level III
investments disclosed in the financial statement are solely comprised of the
Company's non-controlling investment in SIGC LLC. The value of those
investments equated to the Company's maximum exposure to loss from SIGC LLC.
Capital distributions made during the period ended 30 June 2025 were made to
fund the Company's dividend payment and share buybacks. Capital distributions
made during the year ended 31 December 2024 and period ended 30 June 2024 were
made to fund the Company's dividend payment.
The key unobservable inputs in the valuation of the Level III investment is
the value of SIGC LLC's indirect non-controlling interests in the underlying
intermediaries which is impacted by the share price of Navient and the
Company.
6. Trade and other payables
As at 30 June 2025 As at 30 June 2024 As at 31 December 2024
£ £ £
Professional fees payable 5,825 30,569 33,843
Administration fees payable - 30,025 30,025
Audit fees payable 32,233 27,350 35,000
Total 38,058 87,944 98,868
7. Share capital and share premium
As at 30 June 2025 As at 30 June 2024 As at 31 December 2024
Authorised share capital No. No. No.
Ordinary Shares of no par value Unlimited Unlimited Unlimited
Issued and fully paid No. No. No.
Ordinary Shares of no par value 697,000,000 700,000,000 700,000,000
As at 30 June 2025 As at 30 June 2024 As at 31 December 2024
Share premium account £ £ £
Share premium account upon issue 698,745,744 700,000,000 700,000,000
Less: Costs of issue (11,060,597) (11,060,597) (11,060,597)
Closing balance 687,685,147 688,939,403 688,939,403
Share Buyback
Date Number of shares repurchase Price per Share (£) Total Consideration - incl. costs (£)
23 May 2025 2,000,000 0.42 840,842
02 June 2025 1,000,000 0.41 413,415
The repurchase was carried out under the authority granted by the Board at the
meeting held on 23 May 2025, allowing the buyback of up to 104,930,000 shares
within the limit of 14.99% of the issued share capital prior to the 2026 AGM.
All shares purchased during the period have been cancelled. The issued share
capital has decreased from 700,000,000 to 697,000,000 shares, reducing equity
accordingly. The buyback's impact on key financial metrics, including earnings
per share and net asset value per share, has been reflected accordingly.
8. Net asset value per share
No. of Shares Pence per Share
30 June 2025 697,000,000 58.23
30 June 2024 700,000,000 64.97
31 December 2024 700,000,000 63.30
9. Related party transactions
The Investment Manager of SIGC LLC is entitled to receive from SIGC LLC, a
monthly management fee equal to one-twelfth of 1% of the net asset value of
SIGC LLC, less cash and cash equivalents and certain other adjustments. During
the period ended 30 June 2025, management fees of £2,066,668 were paid by
SIGC LLC (period ended 30 June 2024: £2,599,794 and year ended 31 December
2024: £4,950,867). No balance was outstanding at 30 June 2025 (period ended
30 June 2024: £Nil and year ended 31 December 2024: £Nil).
Sherborne Investors LP, the Special Member of SIGC LLC, is entitled to receive
an incentive allocation once aggregate distributions to members of SIGC LLC,
of which one is the Company, exceed a certain level of capital contributions
to SIGC LLC, excluding amounts contributed attributable to management fees.
For Turnaround Investments, the incentive allocation is computed as 10% of the
distributions to all members in excess of 110%, increasing to 20% of the
distributions to all members in excess of 150% and increasing to 25% of the
distributions to all members in excess of 200% of capital contributions,
excluding amounts contributed attributable to management fees. An investment
is considered a Turnaround Investment when a member of the Managing Member is
appointed chairman of, or accepts an executive role at, the STC.
If, after acquiring a shareholding, the share price of the STC rises to a
level at which further investment and the effort of a Turnaround is, in the
Investment Manager's opinion, no longer justified or otherwise no longer
presents a viable Turnaround opportunity, the Funds intend to sell (and
distribute the proceeds to the Company) or distribute in kind the holding to
the Ordinary Members (in each case after deductions for any costs and expenses
and subject to applicable law and regulation), rather than seeking to join the
Board of Directors or otherwise engage with the STC (a "Stake Building
Investment").
For Stake Building Investments the incentive allocation is computed at 20% of
the net returns on the investment of the Funds, applicable until its
dissolution. This allocation is payable after each member in the Funds had
been distributed to it, an amount equal to its aggregate capital contribution
to the Funds in respect to the Stake Building Investment (excluding any
capital contributions attributable to management fees). The Special Member
could waive or defer all or any part of any incentive allocation otherwise
due.
At 30 June 2025, the incentive allocation at SIGC LLC has been computed based
on a Turnaround Investment basis, following Edward Bramson, a Partner in the
Managing Member, being appointed Chairman of the board of directors of
Navient, and amounted to £ Nil (30 June 2024: £ Nil and 31 December 2024: £
Nil).
Through June 2024, the Company paid each Director, except for the Chairman, an
annual fee of £35,000. The Chairman of the Audit Committee received an extra
£5,000 annually, while the Chairman's fee was established at £50,000 per
year. As of July 1, 2024, there was approximately a 14% increase in director
remuneration, leading to a revised Director fee of £40,000 per annum and a
Chairman fee of £57,000 per annum. Furthermore, the fee for the Chairman of
the Audit Committee was adjusted to £45,600 per annum.
Individually and collectively, the Directors of the Company hold no shares of
the Company as at 30 June 2025 (30 June 2024: Nil and 31 December 2024: Nil).
Sherborne Investors GP, LLC has granted to the Company a non-exclusive licence
to use the name "Sherborne Investors" in the UK and the Channel Islands in the
corporate name of the Company and in connection with the conduct of the
Company's business affairs. The Company may not sub-licence or assign its
rights under the Trademark Licence Agreement. Sherborne Investors GP, LLC
receives a fee of £70,000 per annum for the use of the licenced name.
10. Financial risk factors
The Company's investment objective is to realise capital growth from
investment in the STC, identified by the Investment Manager, with the aim of
generating significant capital return for Shareholders. Consistent with that
objective, the Company's financial instruments mainly comprise an investment
in a STC. In addition, the Company holds cash and cash
equivalents as well as having trade and other receivables and trade and other
payables that arise directly from its operations.
Liquidity risk
The Company's cash and cash equivalents are placed in demand deposits with a
range of financial institutions. The listed investment in the STC could be
partially redeemed relatively quickly (within 3 months) should the Company
need to meet obligations or ongoing expenses as and when they fall due.
The following table details the liquidity analysis for financial liabilities
at the date of the Condensed Statement of Financial Position:
As at 30 June 2025 Less than 3 months 3 - 12 months Total
£ £ £
Trade and other payables - 38,058 38,058
- 38,058 38,058
As at 30 June 2024 Less than 3 months 3 - 12 months Total
£ £ £
Trade and other payables - 87,944 87,944
- 87,944 87,944
As at 31 December 2024 Less than 3 months 3 - 12 months Total
£ £ £
Trade and other payables - 98,868 98,868
- 98,868 98,868
Credit risk
The Company is exposed to credit risk in respect of its cash and cash
equivalents, arising from possible default of the relevant counterparty, with
a maximum exposure equal to the carrying value of those assets. The credit
risk on liquid funds is mitigated through the Company depositing cash and cash
equivalents across several banks. The Company does not adopt a write-off
policy for credit risk.
The Bank of New York Mellon currently has a stand-alone credit rating of AA-
with Standard & Poor's (31 December 2024: A with Standard & Poor's),
Royal Bank of Scotland International has a stand-alone credit rating of AA-
with Standard & Poor's (31 December 2024: A with Standard & Poor's)
whilst Barclays Bank PLC has a standalone credit rating of A+ with Standard
& Poor's (31 December 2024: A- with Standard & Poor's). The Company
considers these ratings to be acceptable.
Market price risk
Market price risk arises as a result of the Company's exposure to the future
values of the share price of the STC including the share price of Navient and
the Company. It represents the potential loss that the Company may suffer
through investing in the STC.
The sensitivity analysis below has been determined based on the exposure to
investment funds at the reporting date. The 10% reasonably possible price
movement for investment funds is based on the Investment Manager's best
estimates. The sensitivity rate for these investments of 10% is regarded as
reasonable, as in the Investment Manager's view there continues to be
potential for market volatility in the coming year.
As at 30 June 2025, the share price of Navient and the Company were 14.10 US
dollars per share and 41.90 pence per share, respectively, which produced the
Company's NAV of £405.9 million. At 30 June 2025 a 10% increase/decrease in
the share prices of Navient and the Company would increase/decrease the
Company's NAV by approximately £39.1 million.
Foreign exchange risk
Foreign currency risk arises as the value of future transactions, recognised
monetary assets and monetary liabilities denominated in other currencies
fluctuate due to changes in foreign exchange rates. The Investment Manager
monitors the Company's monetary and non-monetary foreign exchange exposure on
a regular basis. The Company has limited direct foreign exchange risk
exposure. SIGC LLC's investment in the US based STC during the year exposes
SIGC LLC to foreign currency risk, however, as a Company this is considered as
part of market price risk.
Interest rate risk
The Company is subject to risks associated with changes in interest rates in
respect of interest earned on its cash and cash equivalents. The Company seeks
to mitigate this risk by monitoring the placement of cash balances on an
on-going basis in order to maximise the interest rates obtained.
As at 30 June 2025
1 month to 3 months to Non- interest bearing Total
3 months 1 year
£ £ £ £
Assets
Cash and cash equivalents 749,263 - - 749,263
Total Assets 749,263 - - 749,263
As at 30 June 2024
1 month to 3 months to Non- interest bearing Total
3 months 1 year
£ £ £ £
Assets
Cash and cash equivalents 674,929 - - 674,929
Total Assets 674,929 - - 674,929
As at 31 December 2024
1 month to 3 months to Non- interest bearing Total
3 months 1 year
£ £ £ £
Assets
Cash and cash equivalents 758,603 - - 758,603
Total Assets 758,603 - - 758,603
As at 30 June 2025, the total interest sensitivity gap for interest bearing
items was a surplus of £749,263 (30 June 2024: surplus of £674,929 and 31
December 2024: surplus of £758,603).
As at 30 June 2025, interest rates reported by the Bank of England were 4.25%
(30 June 2024: 5.25% and 31 December 2024: 4.75%) which would equate to net
income of £31,844 (period ended 30 June 2024: £35,434 and year ended 31
December 2024: £36,034) per annum if interest bearing assets and liabilities
remained constant. If interest rates were to fluctuate by 100 basis points
(period ended 30 June 2024: 100 basis points and year ended 31 December 2024:
100 basis points), this would have a positive or negative effect of £7,492
(period ended 30 June 2024 a positive or negative effect of £6,749 and year
ended 31 December 2024: a positive or negative effect of £7,586) on the
Company's annual income.
Capital risk management
The capital of the Company is represented by proceeds raised from the issue of
Ordinary Shares. The Directors' objective when managing capital is to
safeguard the Company's ability to continue as a going concern in order to
provide returns for shareholders, provide benefits for other stakeholders and
to maintain a strong capital base to support the development of the investment
activities of the Company. As at 30 June 2025, the Company is not subject to
any external
capital requirement.
The Directors believe that at the date of the Condensed Statement of Financial
Position there were no other material risks associated with the management of
the Company's capital.
11. Dividends and Distributions
During the period ended 30 June 2025 the Company paid a dividend of 0.1 pence
per share as follows: 0.1 pence per share, or £700,000 was paid, on 23 May
2025 to shareholders on the register at 02 May 2025. During the year ended 31
December 2024, the Company paid a dividend of 1.0 pence per share as follows:
0.5 pence per share, or £3.5 million was paid, on 31 May 2024 to shareholders
on the register at 10 May 2024 and 0.5 pence per share, or £3.5million, was
paid on 4 October 2024 to shareholders on the register at 13 September 2024.
12. Subsequent events
There were no other material subsequent events that require disclosure in the
condensed financial statements.
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