REG - Shires Income PLC - Half-year Financial Report
24/11/2025 07:00
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RNS Number : 6174I Shires Income PLC 24 November 2025
SHIRES INCOME PLC
HALF YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2025
Legal Entity Identifier (LEI): 549300HVCIHNQNZAYA89
INVESTMENT OBJECTIVE
The Company's investment objective is to provide shareholders with a high
level of income, together with the potential for growth of both income and
capital from a diversified portfolio substantially invested in UK equities but
also in preference shares, convertibles and fixed income securities.
BENCHMARK
The Company's benchmark is the FTSE All-Share Index (total return).
Performance Highlights
Net asset value per Ordinary share total return(A) Share price total return(A)
Six months ended 30 September 2025 Six months ended 30 September 2025
+15.0% +12.7%
Year ended 31 March 2025 +9.4% Year ended 31 March 2025 +22.4%
Benchmark index total return Earnings per Ordinary share (revenue)
Six months ended 30 September 2025 Six months ended 30 September 2025
+11.6% 9.56p
Year ended 31 March 2025 +10.5% Six months ended 30 September 2024 8.15p
Dividend yield(A) Discount to net asset value(A)
As at 30 September 2025 As at 30 September 2025
5.6% 5.7%
As at 31 March 2025 5.8% As at 31 March 2025 3.7%
(A) Considered to be an Alternative Performance Measure.
Financial Calendar and Financial Highlights
Financial Calendar
Expected payment dates of quarterly dividends 30 January 2026
30 April 2026
31 July 2026
30 October 2026
Financial year end 31 March 2026
Expected announcement of results for year ended 31 March 2026 May 2026
Annual General Meeting July 2026
Financial Highlights
30 September 2025 31 March 2025 % change
Total assets (£'000) 136,294 125,686 +8.4
Shareholders' funds (£'000) 117,313 106,711 +9.9
Net asset value per share 295.78p 265.23p +11.5
Share price (mid-market) 279.00p 255.50p +9.2
Discount to net asset value (cum-income)(A) 5.7% 3.7%
Dividend yield(A) 5.6% 5.8%
Net gearing(A) 15.1% 16.5%
Ongoing charges ratio(A) 1.02% 1.00%
(A) Considered to be an Alternative Performance Measure.
Performance (total return)
Six months ended Year ended Three years ended Five years ended
30 September 2025 30 September 2025 30 September 2025 30 September 2025
Net asset value(A) +15.0% +17.8% +46.8% +69.5%
Share price(A) +12.7% +20.5% +45.3% +73.5%
FTSE All-Share Index +11.6% +16.2% +50.0% +84.1%
(A) Considered to be an Alternative Performance Measure..
All figures are for total return and assume reinvestment of net dividends
excluding transaction costs.
For further information, please contact:
Ben Heatley
Aberdeen
ben.heatley@aberdeenplc.com
Chairman's Statement
Highlights
- Net Asset Value ("NAV") total return of 15.0%.
- Share price total return of 12.7%.
- Dividend yield of 5.6%.
Review of the Period
I am pleased to report a period of strong performance, with the Company
continuing to deliver on its objective of providing a high level of income and
capital growth.
The Net Asset Value ("NAV") total return for the six month period to 30
September 2025 was 15.0%. This compares favourably to a wider market return of
11.6% as measured by the FTSE All-Share Index. The share price total return
was 12.7%. It is pleasing that we have seen a five year share price total
return of 73.5%, with some growth in dividends paid to shareholders, as well
as more stability in the share price over the last two years, partly achieved
by using share buyback powers.
At the start of the period, trade tariffs introduced by the US government
caused equity markets to fall but they recovered as tariffs were negotiated
and revised. However, the net result remains one of additional cost for
businesses that export to the US. Markets recovered with the prospect of
interest rate reductions and strong earnings growth globally. The UK market
performed well despite an economic backdrop that continues to be challenging,
not helped by uncertainty on UK fiscal circumstances.
The total return from the equity holdings within the portfolio was 15.6%. This
return was driven by good stock selection, with positive contributions from
several of the holdings. The total return from the distinct portfolio of
preference shares was lower, at 5.1%, but in line with expectations as these
investments have the performance attributes of fixed interest instruments. The
preference share holdings represented 17.1% of the portfolio at the end of the
period and are a differentiating factor of the Company, providing a reliable
source of income at a yield above that of the benchmark index.
A detailed review of performance and investment activity is contained in the
Investment Manager's Review.
Earnings and Dividends
The revenue earnings per share for the period were 9.56p, an increase of 17.3%
compared to the equivalent period last year. Companies within the portfolio
have continued to generate solid earnings and dividend growth. The Company
also benefited from the receipt of a special dividend relating to the tender
of one of its preference share holdings.
A first interim dividend of 3.40p per Ordinary share in respect of the year
ending 31 March 2026 was paid on 31 October 2025 (2025: first interim dividend
3.20p). The Board is declaring a second interim dividend of 3.45p per
Ordinary share, payable on 30 January 2026 to shareholders on the register at
close of business on 5 January 2026. Subject to unforeseen circumstances, it
is proposed to pay a further interim dividend of 3.45p per Ordinary share and
a final dividend of at least 5.20p per share, being the level of final
dividend paid last year. This would result in a total dividend for the year of
at least 15.50p per share which represents a dividend yield of 5.6% based on
the share price of 279p at the end of September. The aim was to pay three
interim dividends of 3.45p per share but due to an administrative oversight
the first interim dividend was announced and paid at a rate of 3.40p per share
rather than at a rate of 3.45p per share, which will be rectified in the
payment made in the final dividend.
The Board considers the Company's high level of dividend to be one of its key
attractions and recognises that, in the current economic environment, there is
likely to be a continuing demand for an attractive and reliable level of
income. We have a very high proportion of our investors invested through
retail platforms and many of those will be 'tax protected' in ISAs or SIPPs.
Some will have elected for periodic saving into the shares of the Company and
some for reinvestment of dividends, both historically good ways of obtaining a
long-term return on investments made in income funds, especially if held
through ISAs.
Discount and Share Buy Backs
At the end of the period, the discount of the share price to the NAV was 5.7%,
slightly wider than the discount of 3.7% at the start of the period reflecting
an average discount of 4.4% over the period.
In accordance with the share buy-back authority provided by shareholders, the
Company bought back 569,354 Ordinary shares during the period (1.4% of the
issued share capital) at a cost of £1.5 million and this provided a small
enhancement to NAV for continuing shareholders. All shares bought back are
held in treasury. Since commencing share buy backs in March 2024, at the
date of this Report the Company has bought back an aggregate of 2.1 million
shares (5.0% of the issued share capital) and the implementation of buy backs
has had positive effect on the share price rating which had drifted at one
point to a double digit discount.
Corporate
In the last few years, the Board has worked hard with Aberdeen to try and find
ways of reducing operating costs, finding fresh demand for the Company's
shares and providing for secondary market liquidity. As a result, the
Company combined successfully with abrdn Smaller Companies Investment Trust in
December 2023, has applied share buy backs where necessary and continues to
have a largely retail held register. The market and demand background for
closed-ended funds with listed equity mandates has not been propitious. The
Board firmly believes that high income from UK listed equities can best be
provided by a closed-ended vehicle that uses gearing effectively, allocates
expenses to capital, and uses reserves to sustain and grow income, and can
avoid volatility in its share price - which is what the Board and Manager will
continue to try and provide through Shires Income.
Gearing
The Company has a £20 million loan facility of which £19 million was drawn
down at the period end. Net of cash, this represented gearing of 15.1% on 30
September, compared to 16.5% at the start of the period. The weighted average
borrowing cost at the period-end was 4.7% (31 March 2025: 4.9%) and the
gearing provided a positive contribution to performance during the period.
The Board monitors the level of gearing regularly. Strategically, we take the
view that the borrowings are notionally invested in the less volatile fixed
income part of the portfolio which generates a higher and more secure level of
income, giving the Investment Manager greater scope to invest in a range of
equity shares with lower yields and higher growth prospects. The Board
believes that this combination puts the Company in the best position to
achieve a high and potentially growing level of dividend and to deliver some
capital appreciation for shareholders - as has been the case in the past.
The Board and Manager continue to review borrowing facilities and the cost
thereof to ensure that the Company can benefit from a positive geared return
for its shareholders.
Outlook
The UK economic picture remains a challenging one, with growth limiting
factors such as the cost of servicing public debt and increasing welfare
costs. However, with the prospect of interest rates falling, there is the
potential for economic conditions to improve. As always, there is uncertainty
regarding the measures that will be introduced in the Budget on 26 November
and the impact that these will have on companies and individuals.
Notwithstanding these uncertainties and the strong portfolio returns generated
during the first half of the financial year, the Investment Manager considers
that the UK equity market continues to be attractively valued compared to
other global markets. When combined with the good earnings and dividend
potential from the companies in the portfolio, the Board is confident that the
Company is well placed to continue to deliver its investment objective in
terms of both income and capital growth.
Robin Archibald
Chairman
21 November 2025
Investment Manager's Review
Market Background
Financial markets had a positive six-month period, with equities continuing to
deliver high returns. Those returns have come despite elevated levels of
geopolitical uncertainty. At the start of the period, the US administration
introduced much higher tariffs on imports in the so called 'Liberation Day'
announcement. This rattled markets in the short term, sending global equities
down by 12% in two weeks. Since that point, there has been continued
negotiation and revision of tariff proposals, and, while the direction of
travel has been positive, the costs for importers to the US remain
significantly higher than previously with an average tariff rate of 15%. The
subsequent strength of global equities has surprised many, but the prospect of
falling interest rates globally, combined with resilient earnings growth and
lower taxation in the US, has propelled stocks to new highs. While the
large-cap US listed technology companies have continued to be strong
performers, we have seen value names globally pulled higher in the rally, and
European and UK markets have performed well.
Despite the initial expectation that tariffs would prove to be inflationary
for the US consumer, we are yet to see that impact. This has allowed the
Federal Reserve (the "Fed") to decrease interest rates modestly, with a
quarter point cut to 4.25% in September and to 4.0% in October. There is still
potential for the inflationary effect to come through, however, given the lag
before imported orders reach the consumer. Despite that, we expect continued
cuts to the Fed rate in the next year. The Bank of England has also been able
to reduce rates, with the official bank rate at 4.0%, down from 4.5% at the
end of March. Central banks in both countries continue to balance inflation
against the signs of a weakening labour market. Although unemployment has not
risen significantly, vacancies are reducing and there are signs of the market
being looser than we have seen for some time.
For the UK specifically, economic growth remains lacklustre and the current
account deficit a concern. Policies introduced in late 2024, raising employer
National Insurance contributions and the living wage, have placed a cost
burden on companies. At the same time, higher costs of debt and a failure to
reform social spending have limited headroom for the government. That has
created pressure on the Chancellor's budget in November, and the long lead
into this event has created an overhang on UK domestically focused companies.
In Europe, markets have been boosted by the relaxation of debt limits in
Germany. This has allowed a re-investment into European defence capability and
we expect fiscal policy to feed through into better corporate earnings growth.
Offsetting this, France has undergone a period of continued political
instability and a budgetary deficit even worse than that of the US or UK.
Commodities have been mixed, with a weaker oil price but strength in mined
commodities. Precious metals, most notably gold, have been strong as investors
search for stores of value. Other metals such as copper, have also moved
higher on continued demand growth and downward supply revisions.
Investment Performance
It was a strong period for the portfolio, with a NAV total return of 15.0%.
This is a strong absolute return for the six month period and compares
positively with the FTSE All-Share Index benchmark return of 11.6%. Relative
performance was driven by stock selection, most notably in the energy and
industrial sectors. The Company's exposure to preference shares and fixed
income securities detracted from returns on a relative basis, but this is as
we would expect in a strongly rising market and was more than compensated for
by the outperformance of the equity portfolio. By sector, industrials (+35%),
financials (+18%) and utilities (+13%) were notable sources of strength.
Energy (+3%), consumer discretionary (+3%) and healthcare (+2%) were
relatively weak, although no sector produced a negative return over the
period.
On an individual stock basis, there were good returns from our conviction
position in the UK construction contractors. Kier returned 79%, Balfour Beatty
52% and Morgan Sindall 38%. These companies have performed well for several
years now but remain well valued and have a robust outlook as the UK invests
in power, water and infrastructure.
The financials sector also delivered continued share price performance as
banks benefited from volume growth and yield curves which remain supportive.
OSB's shares returned 35% and Close Brothers returned 78% after the company
benefitted from a better-than-expected outcome from the FCA inquiry into
historic motor finance. Insurance companies Chesnara (+28%) and Aviva (+32%)
also performed well, as did asset manager M&G (+31%).
We had few disappointments during the period. In some cases, we have bought
into companies after a period of weakness and perhaps been a little early.
Greggs fell 11% after purchase, Victrex 11%, Midwich 10% and Pets at Home 21%.
All are companies we have added after a period of significant share price
weakness and where we see potential for a turnaround over the next
three-to-five-year period. Timing the bottom is difficult, but our view on
these companies remains that expectations are low and there is more upside
risk than downside. One benefit of a closed end structure is that we can be
patient for the turnaround.
The one genuine disappointment was Wood Group, which saw debt increase, the
announcement of an inquiry into historic accounting and the departure of its
CFO. As it stands, the company is the subject of a bid from a private peer, so
could yet deliver a positive outcome, but its shares are currently not trading
and we have prudently marked the value of the holding to zero.
Portfolio Activity
April was a quiet month for trading. The market volatility through the month
was extremely high, and changes to US policy on a daily basis caused a high
degree of variability in share prices. In this environment it is sometimes
better not to do too much - what looks like the right trade one day may turn
out to be the wrong one the next and we try and hold positions we are happy to
retain for the long term. At the start of May we sold out of Convatec. This is
a very well-run company which has performed well, but with the yield
compressed to below 2% we see other positions more suited to the goals of the
Company. The proceeds were reinvested in Informa, which is a commercial
information and exhibition business and has been a long-term compounder with a
track record of dividend growth.
Following a bid for Assura, we sold out of the position and switched into
other high conviction UK real estate holdings; SafeStore, Sirius Real Estate
and London Metric. We also sold the position in Engie after a few weeks of
holding the shares. In that time the share price had risen and we had
collected the annual dividend, so this was a chance to reallocate capital to
other ideas.
We bought back into Greggs, having sold out in June last year. Since that
time, the shares had underperformed the benchmark by approximately 40%,
creating a chance to buy back into what remains a high-quality retailer at a
more reasonable price. To fund the purchase, we sold out of Dunelm. This was
another short holding period, as its shares had delivered a 30% return since
purchase three months beforehand, and had hit our target price. We also
bought into audio-visual supplier Midwich, which has struggled cyclically but
has long term recovery potential. It is a founder-led business with a great
track record which we think will get back to growth once the cycle improves.
We sold out of the holding in 4Imprint. The shares had bounced post tariff
introduction, but it remains a cyclical business. Given the weaker outlook for
the US Dollar, the appeal of overseas earnings is also lower for now. We used
the proceeds to buy into UK retailer Pets at Home which we consider is valued
attractively given the strength of its vet business and with potential for the
retail business to improve after a more difficult period.
The tender process for the General Accident preference shares held in the
portfolio completed in June. We saw the tender price as fair, giving a 5.6%
yield at the sale price. The proceeds were primarily used to add to the
position in the Nationwide 10.25% perpetual debt, which had a yield of 7.8% at
purchase, a nice uplift to income.
Also in June, we took the decision to exit ASML for now. There is no debate
that this is one of the highest quality companies in the market, with
seemingly insurmountable barriers to competition in a structurally growing end
market. However, we saw some risk to earnings estimates in 2026/27, and with a
low dividend yield we saw other opportunities that fit the objectives of the
Company more closely. The proceeds were used to introduce Victrex, a
specialist chemical manufacturer which has faced a cyclical downturn for some
time but is starting to see signs of improvement in its higher margin
healthcare end market and recently signed a material order to supply material
for subsea piping.
At the end of July we bought back into IT distributor Bytes Technology, having
sold the position in November. The shares pulled back recently on a weaker
trading update, but we saw this as backward looking and reflecting historic
changes to partner incentive structures. The business remains well positioned
as one of the largest software sellers in the UK, with a growth end market and
strong client relations. The valuation, with a 5%+ dividend yield, offers
decent upside and it acts as a genuine diversifier in the portfolio.
Finally, we added one new holding in September, starting a position in Hilton
Food. The company supplies meat and fish to UK and international supermarkets
and has built a track record of compound growth over time as it grows in
scale, with a contract structure that protects it from pricing fluctuations.
At the start of September, the shares fell by around 20% following a profit
warning for this year, as it has had to build fish inventory due to supply
shortages. We see this as a short-term impact and a chance to acquire a
position in a good quality company with a dividend yield now over 5%. Hilton
is a company we've been watching for a while and it is a useful diversifier in
the portfolio, adding to consumer staples where it is hard to find businesses
of sufficient quality and yield to fit our requirements.
Investment Income
The revenue earnings per share for the period were 9.56p, which compares to
8.15p for the equivalent period last year. Over the period, the portfolio
continued to deliver income growth and the Company also benefited from the
receipt of a special dividend relating to the tender of the General Accident
preference shares. Although there has been a continued trend for companies to
allocate more capital to share buybacks over dividend growth in recent years,
there is still strong dividend growth available from companies with growing
cashflows. A mild headwind to income generation over the period was the weaker
US Dollar, given a number of companies pay dividends denominated in Dollars.
Outlook
On a global basis, our outlook is for a continued 'late-cycle' macro
environment, in which the US economy is slowing but avoids recession, policy
rates are cut and the Federal Reserve resumes easing, a slowing nominal growth
environment in China but with ongoing policy support and the increasing
emergence of 'AI winners' in its corporate sector, and an ongoing interest
rate cutting cycle across many emerging markets as the focus shifts from
containing inflation to supporting growth.
Certainly, there are considerable economic and geopolitical risks around these
expectations. The deterioration in the US labour market could morph into a
broader downturn and recession amid 'stall speed' dynamics, although a
mini-cyclical pickup now that peak tariff uncertainty appears to have passed
is also possible. Political interference at the Fed could de-anchor inflation
expectations and eventually trigger a bond market rout. Alternatively,
AI-driven productivity growth could see a sustained supply-side expansion in
coming years. This creates a supportive environment for continued strength in
equities, but the risk-reward is more balanced than for some time. High
valuations and an extreme level of concentration, most notably in the US
equity market, mean that any downturn could be meaningful.
In the UK, government finances remain a concern, with low productivity and
increasing fiscal burden limiting growth. The increased cost of debt and lack
of reform to social spending means the ability of the government to change the
path is limited. However, this picture can change quickly in our view. Slowing
inflation into the year-end would give the Bank of England clearance to reduce
interest rates more rapidly than expected. This would have the double impact
of both stimulating growth but also reducing government borrowing costs. We
should not rule out an economic picture that looks more optimistic in six
months' time.
We see significant sources of value in the UK equity market. It remains well
valued compared to other global markets, and although it lacks a significant
technology sector that does not mean there is no growth from a wide range of
high quality companies. Distribution yields are also highly attractive, with
the combination of dividends and buybacks at the highest level amongst all
major markets. Those distributions also look safe, with payout ratios still
well below pre-Covid levels.
Our aim is to identify those companies with long term potential which are
currently undervalued by the market. The current degree of scepticism of UK
mid-cap and domestically focussed companies means that this is a particularly
rich hunting ground and we retain a high level of optimism for future returns.
Iain Pyle
Aberdeen
21 November 2025
Interim Management Statement
Directors' Responsibility Statement
The Directors are responsible for preparing the Half Yearly Financial Report
in accordance with applicable law and regulations. The Directors confirm that
to the best of
their knowledge:
- the condensed set of financial statements within the Half Yearly
Financial Report has been prepared in accordance with IAS 34 'Interim
Financial Reporting'; and
- the Interim Board Report (constituting the Interim Management
Report) includes a fair review of the information required by rules 4.2.7R of
the Disclosure Guidance and Transparency Rules (being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements
and a description of the principal risks and uncertainties for the remaining
six months of the financial year) and 4.2.8R (being related party transactions
that have taken place during the first six months of the financial year and
that have materially affected the financial position of the Company during
that period; and any changes in the related party transactions described in
the last Annual Report that could so do).
Principal and Emerging Risks and Uncertainties
The Board regularly reviews the principal and emerging risks and uncertainties
faced by the Company together with the mitigating actions it has established
to manage the risks. These are set out within the Strategic Report contained
within the Annual Report for the year ended 31 March 2025 and comprise the
following risk headings:
- Strategic objectives and investment policy
- Investment performance
- Failure to maintain, and grow the dividend over the longer
term
- Share price and shareholder relations
- Gearing
- Accounting and financial reporting
- Regulatory
- Operational
- The Board
- Exogenous risks such as health, social, financial, economic,
climate and geo-political
In addition to these risks, various global conflicts and other geo-political
tensions continue to present exogenous risks as does the recent introduction
of trade tariffs and the impact that has on global trade and financial
markets. The impending UK Budget, fiscal constraints and elevated global
market valuations, with high levels of concentration, also provide
uncertainties for a UK equity investment company.
In all other respects, the Company's principal and emerging risks and
uncertainties have not changed materially since the date of the Annual Report
and are not expected to change materially for the remaining six months of the
Company's financial year.
Going Concern
The Company's assets consist mainly of equity shares in companies listed on
the London Stock Exchange. The Board has performed stress testing and
liquidity analysis on the portfolio and considers that, in the absence of
unforeseen circumstances, the majority of the Company's investments are
realisable within a relatively short timescale.
The Board has set limits for borrowing and regularly reviews actual exposures,
cash flow projections and compliance with banking covenants, including the
headroom available. The Company has a £20 million loan facility which is due
to mature in April 2027. £9 million of this amount is drawn down on a
short-term basis through a revolving credit facility and can be repaid without
incurring any financial penalties.
Having taken these factors into account, the Directors believe that the
Company has adequate resources to continue in operational existence for the
foreseeable future and has the ability to meet its financial obligations as
they fall due for the period to 30 November 2026, which is at least twelve
months from the date of approval of this Report. For these reasons, they
continue to adopt the going concern basis of accounting in preparing the
financial statements.
On behalf of the Board
Robin Archibald
Chairman
21 November 2025
Investment Portfolio - Equities
As at 30 September 2025
Market Total
value portfolio
£'000 %
Shell 4,265 3.2
Morgan Sindall 4,218 3.1
AstraZeneca 3,931 2.9
HSBC 3,863 2.9
Chesnara 3,841 2.9
Balfour Beatty 3,295 2.4
National Grid 3,194 2.4
Diversified Energy 3,167 2.3
M&G 3,051 2.3
Sirius Real Estate 2,995 2.2
Ten largest investments 35,820 26.6
Kier 2,937 2.2
Rio Tinto 2,920 2.2
Imperial Brands 2,867 2.1
Lloyds Banking 2,860 2.1
SSE 2,750 2.0
Telecom Plus 2,739 2.0
Energean 2,528 1.9
Safestore 2,489 1.9
Barclays 2,477 1.9
Anglo American 2,342 1.7
Twenty largest investments 62,729 46.6
Standard Chartered 2,322 1.7
Taylor Wimpey 2,319 1.7
Reckitt Benckiser Group 2,293 1.7
Intermediate Capital 2,290 1.7
Intesa Sanpaolo 2,078 1.6
Ashmore 2,019 1.5
Inchcape 1,981 1.5
Melrose Industries 1,887 1.4
Drax 1,797 1.3
Aviva 1,796 1.3
Thirty largest investments 83,511 62.0
Conduit Holdings 1,764 1.3
Hunting 1,725 1.3
LondonMetric 1,720 1.3
Serica Energy 1,692 1.2
MONY Group 1,684 1.2
Victrex 1,669 1.2
Hilton Food 1,610 1.2
ME Group 1,453 1.1
OSB 1,423 1.1
Greggs 1,345 1.0
Forty largest investments 99,596 73.9
Bytes Technology 1,285 1.0
Hollywood Bowl 1,284 0.9
Bodycote 1,282 0.9
Pets at Home 1,214 0.9
Informa 1,168 0.9
Midwich 1,163 0.9
IP Group 1,100 0.8
RS 1,048 0.8
Gaztransport Et Technigaz 1,039 0.8
Close Brothers 852 0.6
Fifty largest investments 111,031 82.4
Smurfit Westrock 697 0.5
Wood Group (A) - 0.0
Total equity investments 111,728 82.9
(A) Shares are temporarily suspended on the London Stock Exchange effective 1
May 2025.
Investment Portfolio - Other Investments
As at 30 September 2025
Market Total
value portfolio
£'000 %
Preference shares and Fixed Interest investments(A)
Ecclesiastical Insurance Office 8.625% 6,510 4.8
Nationwide 10.25% 5,966 4.4
Santander 10.375% 4,906 3.7
Standard Chartered 8.25% 3,485 2.6
Lloyds Bank 11.75% 1,052 0.8
R.E.A Holdings 9% 798 0.6
Standard Chartered 7.375% 290 0.2
Total preference shares and fixed interest investments 23,007 17.1
Total equity investments 111,728 82.9
Total investments 134,735 100.0
(A) None of the preference shares and fixed interest investments listed above
have a fixed redemption date.
Distribution of Assets and Liabilities
Valuation at Movement during the period Valuation at
31 March 2025 Purchases Sales Gains 30 September 2025
£'000 % £'000 £'000 £'000 £'000 %
Listed investments
Equities 99,870 93.6 20,446 (20,718) 12,130 111,728 95.2
Preference shares and Fixed Interest investments 23,473 22.0 1,037 (1,560) 57 23,007 19.6
Total investments 123,343 115.6 21,483 (22,278) 12,187 134,735 114.8
Current assets 2,980 2.8 2,200 1.9
Current liabilities (637) (0.6) (641) (0.5)
Non-current liabilities (18,975) (17.8) (18,981) (16.2)
Net assets 106,711 100.0 117,313 100.0
Net asset value per Ordinary share 265.23p 295.78p
Condensed Statement of Comprehensive Income
30 September 2025 30 September 2024 31 March 2025
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments at fair value - 12,187 12,187 - 4,253 4,253 - 4,472 4,472
Currency gains/(losses) - 8 8 - (18) (18) - (5) (5)
Investment income
Dividend income 4,359 - 4,359 3,911 - 3,911 7,165 - 7,165
Interest income 2 - 2 8 - 8 8 - 8
Other income 37 - 37 92 - 92 92 - 92
Money market interest 16 - 16 14 - 14 31 - 31
4,414 12,195 16,609 4,025 4,235 8,260 7,296 4,467 11,763
Expenses
Management fee (140) (210) (350) (124) (187) (311) (261) (392) (653)
Administrative expenses (235) - (235) (232) - (232) (428) (19) (447)
Finance costs (189) (283) (472) (206) (308) (514) (402) (603) (1,005)
(564) (493) (1,057) (562) (495) (1,057) (1,091) (1,014) (2,105)
Profit before taxation 3,850 11,702 15,552 3,463 3,740 7,203 6,205 3,453 9,658
Taxation 2 (42) - (42) (92) (19) (111) (108) - (108)
Profit attributable to equity holders 3,808 11,702 15,510 3,371 3,721 7,092 6,097 3,453 9,550
Earnings per Ordinary share (pence) 4 9.56 29.38 38.94 8.15 8.99 17.14 14.80 8.38 23.18
The Company does not have any income or expense that is not included in the
profit for the period, and therefore the profit for the period is also the
"Total comprehensive income for the period", as defined in IAS 1 (revised).
The total column of this statement represents the Statement of Comprehensive
Income of the Company, prepared in accordance with UK adopted International
Accounting Standards. The revenue and capital columns are supplementary to
this and are prepared under guidance published by the Association of
Investment Companies.
All items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.
Condensed Balance Sheet
As at As at As at
30 September 2025 30 September 2024 31 March 2025
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Non-current assets
Equities 111,728 101,815 99,870
Preference shares and Fixed Interest investments 23,007 25,237 23,473
Securities at fair value 134,735 127,052 123,343
Current assets
Accrued income and prepayments 952 1,230 1,658
Cash and cash equivalents 1,248 901 1,322
2,200 2,131 2,980
Creditors: amounts falling due within one year
Trade and other payables (641) (475) (637)
(641) (475) (637)
Net current assets 1,559 1,656 2,343
Total assets less current liabilities 136,294 128,708 125,686
Non-current liabilities
Revolving credit facility(A) (9,000) (9,000) (9,000)
Loan due in more than one year (9,981) (9,969) (9,975)
Net assets 117,313 109,739 106,711
Share capital and reserves
Called-up share capital 6 21,166 21,166 21,166
Special reserve 1 49,952 49,952 49,952
Capital reserve 7 38,217 31,172 28,055
Revenue reserve 7,978 7,449 7,538
Equity shareholders' funds 117,313 109,739 106,711
Net asset value per Ordinary share (pence) 5 295.78 265.14 265.23
(A) The prior interim balance for the revolving credit facility has been
reclassified from current to non-current liabilities.
The accompanying notes are an integral part of the financial statements.
Condensed Statement of Changes in Equity
Six months ended 30 September 2025 (unaudited)
Share
Share premium Special Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
As at 31 March 2025 21,166 - 49,952 28,055 7,538 106,711
Repurchase of Ordinary shares into treasury - - - (1,540) - (1,540)
Profit for the period - - - 11,702 3,808 15,510
Equity dividends - - - - (3,368) (3,368)
As at 30 September 2025 21,166 - 49,952 38,217 7,978 117,313
Six months ended 30 September 2024 (unaudited)
Share
Share premium Special Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
As at 31 March 2024 21,166 49,952 - 27,451 7,388 105,957
Cancellation of share premium account (note 1) - (49,952) 49,952 - - -
Profit for the period - - - 3,721 3,371 7,092
Equity dividends - - - - (3,310) (3,310)
As at 30 September 2024 21,166 - 49,952 31,172 7,449 109,739
Year ended 31 March 2025 (audited)
Share
Share premium Special Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
As at 31 March 2024 21,166 49,952 - 27,451 7,388 105,957
Repurchase of Ordinary shares into treasury - - - (2,849) (2,849)
Cancellation of share premium account (note 1) - (49,952) 49,952 - - -
Profit for the period - - - 3,453 6,097 9,550
Equity dividends - - - - (5,947) (5,947)
As at 31 March 2025 21,166 - 49,952 28,055 7,538 106,711
The capital reserve at 30 September 2025 is split between realised gains of
£23,824,000 and unrealised gains of £14,393,000 (30 September 2024: realised
gains of £28,291,000 and unrealised gains of £2,881,000; 31 March 2025:
realised gains of £24,383,000 and unrealised gains of £3,672,000).
The Company's reserves available to be distributed by way of dividends or
buybacks include the special reserve, the revenue reserve and the realised
element of the capital reserve amounting to £81,754,000 (30 September 2024 -
£85,692,000; 31 March 2025 - £81,873,000).
Condensed Cash Flow Statement
Six months ended Six months ended Year ended
30 September 2025 30 September 2024 31 March 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net cash inflow from operating activities
Dividend income received 5,091 4,461 7,183
Interest received from money market funds 16 14 31
Bank interest received (8) 8 8
Management fee paid (341) (266) (439)
Other cash expenses (214) (278) (483)
Cash generated from operations 4,544 3,939 6,300
Interest paid (466) (516) (1,008)
Overseas tax paid (51) (102) (119)
Net cash inflow from operating activities 4,027 3,321 5,173
Cash flows from investing activities
Purchases of investments (21,483) (33,346) (58,872)
Sales of investments 22,278 32,579 62,170
Net cash inflow/(outflow) from investing activities 795 (767) 3,298
Cash flows from financing activities
Equity dividends paid (3,368) (3,310) (5,947)
Repurchase of Ordinary shares into treasury (1,540) - (2,872)
Net cash outflow from financing activities (4,908) (3,310) (8,819)
Net decrease in cash and cash equivalents (86) (756) (348)
Reconciliation of net cash flow to movements in cash and cash equivalents
Decrease in cash and cash equivalents as above (82) (756) (348)
Net cash and cash equivalents at start of period 1,322 1,675 1,675
Effect of foreign exchange rate changes 8 (18) (5)
Cash and cash equivalents at end of period 1,248 901 1,322
Notes to the Financial Statements
For the six months ended 30 September 2025
1. Accounting policies - Basis of accounting
The condensed interim financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) 34 'Interim Financial
Reporting', as adopted by the International Accounting Standards Board (IASB),
and interpretations issued by the International Financial Reporting
Interpretations Committee of the IASB (IFRIC). They have also been prepared
using the same accounting policies applied for the year ended 31 March 2024
financial statements, which were prepared in accordance with International
Financial Reporting Standards (IFRS) and received an unqualified audit report.
The financial statements have been prepared on a going concern basis. In
accordance with the Financial Reporting Council's guidance on 'Going Concern
and Liquidity Risk', the Directors have undertaken a review of the Company's
assets which primarily consist of a diverse portfolio of listed equity shares
and in most circumstances, are realisable within a very short timescale.
During the year to 31 March 2025, the Company cancelled its share premium
account and transferred the proceeds to a newly created special reserve, which
is distributable in nature.
2. Taxation
The taxation charge for the period represents withholding tax suffered on
overseas dividend income.
3. Dividends
The following table shows the revenue for each period less the dividends
declared in respect of the financial period to which they relate.
Six months ended Six months ended Year ended
30 September 2025 30 September 2024 31 March 2025
£'000 £'000 £'000
Revenue 3,808 3,371 6,097
Dividends declared (2,716)(A) (2,648)(B) (5,947)(C)
1,092 723 150
(A) Dividends declared relate to first two interim dividends (3.40p and 3.45p)
in respect of the financial year 2025/26.
(B) Dividends declared relate to first two interim dividends (3.20p each) in
respect of the financial year 2024/25.
(C) Dividends declared relate to three interim dividends (9.60p each) and the
final dividend (5.20p) in respect of the financial year 2024/25.
4. Earnings per Ordinary share
Six months ended Six months ended Year ended
30 September 2025 30 September 2024 31 March 2025
£'000 £'000 £'000
Returns are based on the following figures:
Revenue return 3,808 3,371 6,097
Capital return 11,702 3,721 3,453
Total return 15,510 7,092 9,550
Weighted average number of Ordinary shares in issue 39,829,099 41,369,542 41,196,795
5. Net asset value per Ordinary share
The net asset value per Ordinary share and the net asset values attributable
to Ordinary shareholders at the period end were as follows:
As at As at As at
30 September 2025 30 September 2024 31 March 2025
(unaudited) (unaudited) (audited)
Net assets per Condensed Balance Sheet (£'000) 117,313 109,739 106,711
3.5% Cumulative Preference shares of £1 each (£'000) (50) (50) (50)
Attributable net assets (£'000) 117,263 109,689 106,661
Number of Ordinary shares in issue 39,645,242 41,369,542 40,214,596
Net asset value per Ordinary share (p) 295.78 265.14 265.23
The Company has a policy of calculating the net asset value per Ordinary share
based on net assets less an amount due to holders of 3.5% Cumulative
Preference shares of £1 each equating to £1 per share (£50,000), divided by
the number of Ordinary shares in issue.
6. Called up share capital
30 September 2025 30 September 2024 31 March 2025
Number £'000 Number £'000 Number £'000
Allotted, called up and fully paid Ordinary shares of 50 pence each:
Balance brought forward 40,214,596 20,107 41,369,542 20,684 41,369,542 20,684
Ordinary shares bought back (569,354) (285) - - (1,154,946) (577)
Balance carried forward 39,645,242 19,822 41,369,542 20,684 40,214,596 20,107
Treasury shares:
Balance brought forward 2,018,478 1,009 863,532 432 863,532 432
Ordinary shares bought back to treasury 569,354 285 - - 1,154,946 577
Balance carried forward 2,587,832 1,294 863,532 432 2,018,478 1,009
Allotted, called up and fully paid 3.5% Cumulative Preference shares of £1
each
Balance brought forward and carried forward 50,000 50 50,000 50 50,000 50
21,166 21,166 21,166
During the six months ended 30 September 2025, 569,354 (six months ended 30
September 2024 - nil; year ended 31 March 2025 - 1,154,946) Ordinary shares
were bought back to treasury .
7. Capital reserve
The capital reserve reflected in the Condensed Balance Sheet at 30 September
2025 includes £14,393,000 (September 2024 £2,881,000; 31 March 2025
£3,672,000) which relate to the revaluation of investments held at the
reporting date. The balance relates to realised gains of £23,824,000 (30
September 2024 - £28,291,000; 31 March 2025 - £24,383,000).
8. Analysis of changes in financial liabilities
Six months ended Six months ended Year ended
30 September 2025 30 September 2024 31 March 2025
£'000 £'000 £'000
Opening balance at 1 April (18,975) (18,963) (18,963)
Other movements(A) (6) (6) (12)
Closing balance (18,981) (18,969) (18,975)
(A) The other movements represent the amortisation of the loan arrangement
fees.
On 3 May 2022, the Company entered into a five year £20 million loan facility
with The Royal Bank of Scotland International Limited, London Branch. £10
million of the loan facility has been drawn down and fixed at an all-in
interest rate of 3.903% until 30 April 2027. £9 million of the facility has
been drawn down on a short-term basis at an all-in interest rate of 5.62%,
maturing 20 October 2025.
9. Transactions with the Manager
The Company has an agreement with abrdn Fund Managers Limited ("aFML") for the
provision of management, secretarial, accounting and administration services
and for the carrying out of promotional activities in relation to the Company.
The management fee is based on 0.45% per annum up to £100 million and 0.40%
per annum over £100 million, by reference to the net assets of the Company
and including any borrowings up to a maximum of £30 million, and excluding
commonly managed funds, calculated monthly and paid quarterly. In addition, a
further fee of £120,000 per annum is charged for other services provided
under the terms of the management agreement. The fees are allocated 40% to
revenue and 60% to capital (31 March 2024 - 50% to revenue and 50% to
capital). The agreement is terminable on not less than six months' notice. For
the period 1 December 2023 to 30 May 2024, there was a management fee waiver
in place as a result of the transaction with abrdn Smaller Companies Income
Trust plc ("ASCI"). For this period the fee was calculated at 0.29% per annum
of net assets up to £100 million and 0.26% per annum of net assets over this
threshold. After this waiver period ended the fee returned to the existing fee
rates. Should the Company terminate the management agreement within three
years of the date of the transaction with ASCI (ie before 1 December 2026),
then the Company undertakes to repay all or a proportion of the management
fees waived by the Manager based on the time elapsed since completion of the
transaction.
The total of the fees paid and payable during the period to 30 September 2025
was £350,000 (30 September 2024 - £311,000; 31 March 2025 - £653,000) and
the balance due to aFML at the period end was £350,000. (30 September 2024 -
£173,000; 31 March 2025 - £341,000).
The management agreement with aFML also provides for the provision of
promotional activities, which aFML has delegated to abrdn Investments Limited.
The total fees paid and payable in relation to promotional activities were
£30,000 (30 September 2024 - £27,000 31 March 2025 - £55,000) and the
balance due to aFML at the period end was £30,000 (30 September 2024 -
£13,000; 31 March 2025 - £15,000).
10. Segmental information
For management purposes, the Company is organised into one main operating
segment, which invests in equity securities and debt instruments. All of the
Company's activities are interrelated, and each activity is dependent on the
others. Accordingly, all significant operating decisions are based upon
analysis of the Company as one segment. The financial results from this
segment are equivalent to the financial statements of the Company as a whole.
11. Fair value hierarchy
IFRS 13 'Fair Value Measurement' requires an entity to classify fair value
measurements using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy has the
following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the assets or liability, either directly (ie as prices) or
indirectly (ie derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The financial assets and liabilities measured at fair value in the Condensed
Balance Sheet are grouped into the fair value hierarchy as follows:
Level 1 Level 2 Level 3 Total
At 30 September 2025 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted investments a) 134,735 - - 134,735
Net fair value 134,735 - - 134,735
Level 1 Level 2 Level 3 Total
At 30 September 2024 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted investments a) 127,052 - - 127,052
Net fair value 127,052 - - 127,052
Level 1 Level 2 Level 3 Total
At 31 March 2025 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted investments a) 123,343 - - 123,343
Net fair value 123,343 - - 123,343
a) Quoted investments. The fair value of the Company's quoted investments has
been determined by reference to their quoted bid prices at the reporting date.
Quoted investments included in Fair Value Level 1 are actively traded on
recognised stock exchanges.
12. The financial information contained in this Half Yearly Financial Report does
not constitute statutory accounts as defined in Sections 434 - 436 of the
Companies Act 2006. The financial information for the six months ended 30
September 2025 and 30 September 2024 has not been reviewed or audited by the
Company's independent auditor.
The information for the year ended 31 March 2025 has been extracted from the
latest published audited financial statements which have been filed with the
Registrar of Companies. The report of the independent auditor on those
accounts contained no qualification or statement under Section 498 (2), (3) or
(4) of the Companies Act 2006.
13. This Half Yearly Financial Report was approved by the Board on 21 November
2025.
Alternative Performance Measures
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash flows,
other than financial measures defined or specified in the applicable financial
framework. The Company's applicable financial framework includes IAS and the
AIC SORP. The Directors assess the Company's performance against a range of
criteria which are viewed as particularly relevant for closed-end investment
companies.
Discount to net asset value per Ordinary share
The difference between the share price and the net asset value per Ordinary
share expressed as a percentage of the net asset value per Ordinary share.
30 September 2025 31 March 2025
NAV per Ordinary share (p) a 295.78 265.23
Share price (p) b 279.00 255.50
Discount (a-b)/a 5.7% 3.7%
Dividend yield
The annual dividend divided by the share price, expressed as a percentage.
30 September 2025(A) 31 March 2025
Annual dividend per Ordinary share (p) a 15.50 14.80
Share price (p) b 279.00 255.50
Dividend yield a/b 5.6% 5.8%
(A) The annual dividend yield is based on the first interim dividend of 3.40p,
second and third interim dividends of 3.45p each and last year's final
dividend of 5.20p. The final dividend for the year ending 31 March 2026 will
be decided after the financial year end, following a review of the Company's
earnings for the full year and outlook for the following year.
Net gearing
Net gearing measures total borrowings less cash and cash equivalents divided
by shareholders' funds, expressed as a percentage. Under AIC reporting
guidance, cash and cash equivalents includes net amounts due to and from
brokers at the period end as well as cash and short term deposits.
30 September 2025 31 March 2025
Borrowings (£'000) a 18,981 18,975
Cash (£'000) b 1,248 1,322
Amounts due to brokers (£'000) c - -
Amounts due from brokers (£'000) d - -
Shareholders' funds (£'000) e 117,313 106,711
Net gearing (a-b+c-d)/e 15.1% 16.5%
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of investment management fees and
administrative expenses and expressed as a percentage of the average daily net
asset values published throughout the year. The ratio for 30 September 2025 is
based on forecast ongoing charges for the year ending 31 March 2026.
30 September 2025 31 March 2025
Investment management fees (£'000) 708 653
Administrative expenses (£'000) 468 447
Less: non-recurring charges(A)(£'000) (8) (6)
Ongoing charges (£'000) 1,168 1,094
Average net assets (£'000) 114,831 109,660
Ongoing charges ratio 1.02% 1.00%
(A) Comprises professional fees (31 March 2025 - promotional activities) not
expected to recur.
Total return
NAV and share price total returns show how the NAV and share price has
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. Share price and NAV total
returns are monitored against open-ended and closed-ended competitors, and the
Benchmark, respectively.
Share
Six months ended 30 September 2025 NAV Price
Opening at 1 April 2025 a 265.23p 255.50p
Closing at 30 September 2025 b 295.78p 279.00p
Price movements c=(b/a)-1 11.5% 9.2%
Dividend reinvestment(A) d 3.5% 3.5%
Total return c+d 15.0% 12.7%
Share
Year ended 31 March 2025 NAV Price
Opening at 1 April 2024 a 256.00p 222.00p
Closing at 31 March 2025 b 265.23p 255.50p
Price movements c=(b/a)-1 3.6% 15.1%
Dividend reinvestment(A) d 5.8% 7.3%
Total return c+d 9.4% 22.4%
(A) NAV total return involves investing the net dividend in the NAV of the
Company with debt at fair value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net dividend in
the share price of the Company on the date on which that dividend goes
ex-dividend.
Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as
rise. Investors may not get back the amount they originally invested
By order of the Board
abrdn Holdings Limited
Company Secretary
21 November 2025
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be) incorporated into, or forms (or is deemed to form) part of this
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