Final Results

Strategic Equity Capital

16/10/2025 07:01

Strategic Equity Capital plc (‘SEC’)

 

Annual Report and Financial Statements for the year ended 30 June 2025

 

Chairman’s Statement

 

The Company’s Net Asset Value (“NAV”) per share (on a total return basis) decreased by 0.1% in the year to 30 June 2025, while the share price delivered a total return of +0.4%. This was behind the FTSE Small Cap (ex Investment Trusts) Total Return Index (“FTSE Small Cap Index”), which rose by 13.1%, and this relative underperformance reflects the Company’s significant exposure to AIM shares in the period.

 

Although near-term performance was disappointing, the longer-term record remains strong, with NAV total returns of 27.3% and 69.5% over three and five years respectively, ahead of the Investment Trust Smaller Companies sector average of 22.0% and 66.1%.

 

The first half of the financial year was particularly challenging, with market sentiment adversely affected by the UK’s Autumn Budget, which introduced changes to national insurance, minimum wage levels, and, most notably for our portfolio, a reduction in inheritance tax relief for AIM-quoted stocks. This, combined with broader geopolitical uncertainty, contributed to a general de-rating across UK smaller companies, in particular those listed on the AIM market. However, the second half of the year saw a significant recovery, in part reflecting market strength as inflation fell towards target levels and interest rate expectations moderated. It is perhaps notable that of the portfolio’s six largest detractors in the first half of the year, four of these investments were then the portfolio’s greatest contributors across the second half.

 

Whilst single periods of performance may demonstrate volatility, the merits of the Investment Manager’s investment approach are more apparent when viewed over a longer time horizon. Since September 2020 (when Ken Wotton was appointed as Lead Manager), the Company’s share price (on a total return basis) has risen 94.2%, compared to 91.6% for the FTSE Small Cap Index, demonstrating the long-term merit of our distinctive investment approach.

 

An overview of the reporting period, performance, and portfolio is discussed in detail in the Investment Manager’s Report on pages 7 to 17.

 

Realisation Opportunity

As you may be aware, on 15 September 2025, the Board announced a realisation opportunity whereby shareholders were given the opportunity to tender up to 100% of their shares held, the tender to be effected via a realisation pool mechanism. The Tender Offer was approved by shareholders at a General Meeting held on 8 October 2025 and the opportunity to tender concluded on 13 October 2025. 9,510,496 shares were tendered, being 22.0% of the shares in issue.

 

The Board is pleased that a significant majority of shareholders agree with the Directors and Investment Manager about the continuing long-term opportunities presented by Strategic Equity Capital plc.

 

Dividend

For the year ended 30 June 2025, the basic revenue return per share was 5.03p, an increase of 21.2% on last year. The portfolio’s focus on cash-generative businesses has in the past supported a growing dividend and this year is no exception, with the Board proposing a final dividend of 4.25p, an increase of 21.4% over last year. It is, however, important to note that, the Company’s primary objective remains capital growth and dividend payouts will vary over time. The dividend will be paid to shareholders on 26 November 2025 to shareholders on the register as at 24 October 2025.

 

Discount Management

The average discount to NAV of the Company’s shares during the period was 8.4%, compared to the equivalent 7.6% figure from the prior year. The discount range over the twelve months was 4.1% to 12.1%.

 

By way of longer term context, the average discount to NAV has narrowed significantly from 15.3% (between the appointment of Ken Wotton as Lead Manager in September 2020 and the announcement of discount mitigation measures in February 2022) to 8.2% (from February 2022 to June 2025), reflecting the impact of the comprehensive discount mitigation measures implemented.

 

The Board is implementing continued discount control mechanisms and a planned further realisation opportunity for the future. The Board intends to continue with the Company’s share buyback programme to manage the discount to Net Asset Value at which the Ordinary Shares may trade. From October 2025, it intends to alter its approach by making available 50% of the net gains from realised profitable transactions in each financial year to fund buybacks of Ordinary Shares, at a discount of 5% or more to NAV per Share. In addition, the Company intends to offer a further 100% realisation opportunity for Shareholders in 2030, the timing of which aligns with the Investment Manager’s investment strategy.

 

Gearing

The Company has maintained its policy of operating without a banking loan facility over the last twelve months. Currently there are no plans to utilise gearing in the portfolio although this policy is kept under regular review by the Board in conjunction with the Investment Manager.

 

Marketing

Building Awareness and Expanding the Shareholder Base

The Board and Investment Manager have continued to build momentum behind the Company’s marketing and communication efforts, with a clear focus on raising awareness of its distinctive investment approach across both retail and wholesale audiences. These efforts are central to expanding and diversifying the shareholder register.

 

Over the period, we have amplified our differentiation through a range of targeted activities. This has included:

A retail-focused advertising campaign (running from late 2024 into the third quarter of 2025);

An extensive PR and media outreach programme; and

Ongoing content creation and thought leadership.

 

The Company’s unique “private equity approach to public markets” has been consistently showcased in national and financial media, supported by strong examples of active engagement and value creation. These efforts have positioned the Investment Manager as a credible and respected voice in UK small-cap investing.

 

Shareholders and prospective investors have also been kept informed through:

Regular investment commentaries and portfolio updates;

Webinars and digital communications; and

Participation in key retail investor events.

 

We have placed particular emphasis on communicating the structural advantages of the Company’s closed-ended format – enabling a genuinely long-term, high-conviction strategy that is well-suited to the UK small-cap opportunity.

 

This integrated marketing activity has begun to yield measurable results, notably through increased ownership on major retail investment platforms. The Investment Manager’s direct engagement with retail investors has reinforced the case for both the UK equity market and the small-cap segment in particular.

 

The Board remains committed to supporting marketing and distribution as strategic levers for growth. We will continue to monitor activity closely, ensuring it remains effective, targeted, and aligned with the Company’s long-term objectives.

 

Board Composition

The timing of the 2025 Realisation Opportunity was taken into consideration as part of the Board’s succession planning. Richard Locke, Non Executive Deputy Chairman, was asked to remain on the Board throughout the process, given his corporate finance experience, but will retire as a director of the Company during the 2026 financial year, having been appointed as a Non-Executive Director in February 2015. I will retire as a director of the Company at the conclusion of the 2026 AGM, having been appointed as a Non Executive Director in February 2016, and subsequently as Non-Executive Chairman in November 2022. The timing of my retirement ensures that I maintain oversight, as Chairman, of the entire realisation process resulting from the September 2025 Tender Offer. The Directors intend to commence a recruitment process shortly, ahead of these retirements, to ensure the ongoing composition of the Board remains appropriate.

 

Outlook

Looking ahead, the global macroeconomic and geopolitical environment is likely to remain a source of volatility. The UK’s stretched fiscal position and uncertain growth and tax outlook are also likely to weigh on near-term sentiment. Despite this uncertain backdrop we see some tentative signals to support improving market confidence, in particular evidence of increasing global equity flows into UK equities (in contrast to the direction of travel of domestic flows); an uptick in smaller company equity issuance to fund M&A activity and other growth initiatives; and an ongoing active level of takeover activity in the UK smaller companies sector.

 

Across our portfolio, the Investment Manager has been encouraged by the positive news flow from our investee companies, the majority of which are demonstrating solid operational performance. A key theme for your Board is the significant valuation opportunity that persists in UK smaller companies. Our portfolio companies trade at a substantial discount to their larger peers, international equivalents, and, most tellingly, to the multiples being paid in private M&A transactions. This disconnect between public market valuations and intrinsic value remains a core driver of our strategy and our confidence in future returns.

 

This valuation gap is being actively recognised by corporate and private equity buyers, and we expect the recent acceleration in M&A activity to be a defining feature of the market in the year ahead. The Investment Manager’s “private equity” approach is specifically designed to identify such businesses, and we are well-positioned to see further value crystallised for shareholders through this trend.

 

Substantial Valuation Opportunity

SEC currently offers investors an attractive discount on many levels:

UK equities stand at a substantial discount to global markets, currently at levels previously seen in the 1990s;

Within the UK market, smaller capitalisation stocks trade at a notable discount to large caps;

The SEC portfolio of companies are both lower valued and have higher return on equity than average for UK small cap indices; and

Investors are today able to purchase SEC shares at a discount to NAV.

 

In addition, the valuation disconnect between UK equities and private transaction multiples remains a core theme. In conclusion, the Board remains confident in the Company’s prospects. The combination of a portfolio of high-quality, undervalued companies, a proven and disciplined investment process, and a market environment ripe for corporate activity provides a compelling backdrop. We firmly believe that the Investment Manager’s active, fundamentals-based approach is the right strategy to navigate the year ahead and to continue delivering value for our shareholders. The Board, once again, thanks you for your continued support.

 

William Barlow

Chairman

15 October 2025

 

Investment Manager’s Report for the year ended 30 June 2025

 

1)

     

Overview – FY 2024/25

 

The financial year commenced against a backdrop of seemingly benign inflation, with UK CPI standing at the Bank of England’s 2.0% target in June 2024. However, this stable macroeconomic picture was quickly overshadowed by domestic policy shifts and external pressures, creating a period of stark contrasts for UK smaller companies.

 

The first half of the financial year was dominated by the negative sentiment following the UK’s Autumn 2024 Budget. While changes to national insurance and the minimum wage raised concerns about corporate costs, it was the Government’s decision to halve the Inheritance Tax relief for AIM-listed stocks that had the most acute and immediate impact on our segment of the market. This policy change acted as a major catalyst for outflows from AIM-focused funds, creating a significant technical overhang and driving non-fundamental selling pressure across many high-quality businesses, regardless of their individual trading performance. This headwind was compounded by continued outflows from UK-focused equity funds throughout the period, as investor capital continued to rotate into US and global markets.

 

The second half of the year brought its own challenges, most notably a bout of global risk-off sentiment in early April 2025 following the US government’s “Liberation Day” tariff announcements. This triggered a sharp, broad-based equity market sell-off and a flight to safety. Despite this dislocation, we viewed the UK as a relative safe haven. The portfolio’s strategic positioning – with a bias towards services-focused businesses with primarily UK revenue exposure – provided significant insulation from direct tariff impacts and global supply chain disruptions. This defensive posture allowed us to navigate the volatility while the underlying fundamental performance of our portfolio companies remained robust.

 

Crucially, this environment of depressed valuations has served as a powerful catalyst for corporate activity. The valuation disconnect between the UK and other international markets, and particularly between public and private market valuations, became too compelling for acquirers to ignore. The second half of the financial year saw a marked acceleration in takeover activity, with both strategic and private equity buyers targeting UK smaller companies. This trend strongly validated our investment approach, which is predicated on identifying high-quality businesses whose strategic value is often mispriced by public markets.

 

Throughout this volatile year, our investment philosophy remained consistent. We continued to focus on bottom-up stock selection, seeking out opportunities where structural growth themes and company-specific self-help levers can dilute the impact of broader market fluctuations. Our strong relationships with management teams and our extensive specialist network remain critical to our process, underpinning our confidence in the portfolio’s quality and its potential to deliver significant long-term returns for shareholders.

 

2)

     

Performance – FY 2024/25

 

The Company’s NAV Total Return decreased by 0.1% over the 12-month period ended 30 June 2025, below the FTSE Small Cap Total Return Index (excluding Investment Companies), which rose by 13.1% and the AIC UK smaller companies sector which rose by 2.6%, but ahead of the AIM All-Share Index, which declined by 2.4%.

 

Key contributors to performance (contribution to return (CTR) 2024 v 2025) during the year included:

 

Costain Group

 (+423 bps CTR), the UK infrastructure engineering provider, whose shares re-rated significantly following a series of positive trading updates and, crucially, announcements of major contract wins, underpinning future revenue and profit growth.

 

Inspired

 (+207 bps CTR), the technology-enabled energy and sustainability services provider. SEC led a recapitalisation in January 2025, priced at 40p per share. Following this Inspired was subject to a competitive takeover process which culminated in a Recommended Cash Offer from US private equity firm HGGC Capital at 81p, over twice the January placing price, validating our conviction in the investment opportunity.

 

The Property Franchise Group

 (+200 bps CTR), which continued to deliver strong performance driven by the successful integration of two strategic acquisitions in 2024, and continued robust revenue momentum in its resilient, lettings-focused franchising model.

 

XPS Pensions Group

 (+193 bps CTR), the pensions consulting and administration specialist, which delivered another year of strong earnings growth and margin expansion. XPS’ earnings growth and re-rating led to the company being included in the FTSE 250 Index during the period, unlocking a significant liquidity pool. During the period the Manager took the opportunity to take profits from the XPS shareholding.

 

Everplay Group

 (+175 bps CTR), the independent video game publisher, which saw its share price recover strongly as it delivered results demonstrating that earlier operational issues were temporary and that the longer term investment thesis remained intact.

 

Top Five Absolute Contributors to Performance

Security
Valuation
30 June
2025
£’000
Period
Contribution
to return
(basis points)
Costain Group
18,042
423
Inspired
13,732
207
The Property Franchise Group
12,921
200
XPS Pensions Group
9,166
193
Everplay Group
15,586
175

 

The main detractors over the period were:

 

Iomart Group

 (-946 bps CTR), the cloud computing and datacentre provider. The shares were impacted by downgrades relating to higher-than-expected customer churn in its legacy infrastructure segment, combined with market concerns around a potential refinancing cliff, which has subsequently been successfully resolved by a successful refinancing post-period.

 

Next 15 Group

 (-151 bps CTR), the digital marketing agency, saw its shares fall following a profit downgrade largely driven by a specific subsidiary now closed. Following a change of CEO the Manager has continued to build SEC’s stake at lower average prices.

 

Fintel

 (-120 bps CTR), which provides technology and regulatory services to financial advisers and financial product manufacturers. The shares de-rated during the period despite no negative company-specific newsflow, suffering from the broader negative sentiment directed towards AIM-quoted stocks.

 

Brooks Macdonald Group

 (-94 bps CTR), the wealth manager, which underperformed temporarily due to its decision to migrate from the AIM Market to the LSE Main Market, which led to some technical selling pressure The Manager took this opportunity to increase its stake in the business at an attractive valuation, a decision which proved profitable within the period and increasingly so post-period (as at 30 September 2025).

 

Tribal Group

 (-78 bps CTR), the education software provider, which like many other AIM stocks also saw its valuation decline despite continued operational progress and no material adverse newsflow. Positive post-period trading newsflow has seen Tribal’s shares appreciate materially post-period end (as at 30 September 2025).

 

Bottom Five Absolute Contributors to Performance

Security
Valuation
30 June
2025
£’000
Period
Contribution
to return
(basis points)
Iomart Group
4,915
(946)
Next 15 Group
6,647
(151)
Fintel
6,750
(120)
Brooks Macdonald Group
17,314
(94)
Tribal Group
3,560
(78)

 

3)

     

Portfolio Activity

 

New investments

 

We made two new investments during the period:

 

Diaceutics

, an outsourced provider of proprietary data analytics and services to the biopharmaceutical industry. It is a high-margin business which is successfully transitioning its business model from project based consultancy towards a higher-quality, contracted recurring model, a proposition which is being validated by accelerating new contract momentum.

 

Next 15 Group

, a specialist digital marketing and communications agency serving the global technology sector. The Manager has been building a stake following share price weakness due to poor sector sentiment and some short-term profit weakness which is expected to be resolved.

 

Both companies were well known to the Manager and were invested in following periods of valuation weakness that we believed were disconnected from their long-term fundamental prospects.

 

Follow-on investments

 

The Manager also took the opportunity to add to several existing holdings at attractive valuations, including Brooks Macdonald, Costain, Halfords, Inspired, Iomart, Netcall, Ricardo, Everplay and Trufin.

 

Full exits

 

Corporate activity was a key theme during the period. The Manager fully exited its position in

Alpha Financial Markets Consulting (1.5x multiple of aggregate cost)

 following its Recommended Cash Offer by Bridgepoint private equity. The full exits of Ricardo and Inspired, whilst announced during the period pursuant to their Recommended Cash Offers, are expected to complete in the second half of the 2025 calendar year.

 

4)

     

Where We Engaged

 

Engagement focus: Ricardo

 

Having engaged

previously around portfolio simplification and a strategic pivot towards higher value consultancy, we increased our engagement intensity following a surprise profit warning and material value drawdown in January 2025. We engaged with the board and its advisers on several organic and inorganic routes to value recovery, the conclusion of which was that, whilst the organic path to recovery was credible over the longer term, an inorganic path should be proactively explored to accelerate value recovery for all shareholders. In conjunction with this an activist shareholder accumulated a significant stake in the business, and was publicly agitating for board change. In parallel with our board engagement, we had constructive dialogue with this shareholder to understand their concerns and proposed remedial steps, and to allow us to make an informed decision as to the optimal route to value recovery for this Company.

 

Who we engaged with:

 Board, Advisers, Activist Shareholder

 

Outcome:

 The culmination of our collaboration with these stakeholders was a Recommended Cash Offer for Ricardo at a 69% premium to its three month volume weighted average share price, with this Company (and other equity funds managed by Gresham House) de-risking the transaction through the provision of an irrevocable undertaking to accept the Offer. The transaction has since received shareholder approval and is expected to complete in the second half of calendar year 2025, subject to typical regulatory approvals.

 

Engagement focus: Inspired

 

How we engaged:

In the latter quarter of calendar year 2024 an unfortunate combination of events (several material contracts being delayed to 2025, depressing near-term earnings, and a pre-scheduled step-down of Inspired’s net leverage covenant in the same month) led to balance sheet pressure and a material drawdown in Inspired’s share price. Recognising the pressure on Inspired’s equity value from this situation, the Manager led and provided cornerstone funding (through this Company and other equity funds under management, which in aggregate held just under 30% of Inspired’s equity) a recapitalisation of Inspired, structured as a combination of ordinary shares, warrants and convertible loan notes, with the equity priced at 40p at completion in January 2025. Over the following months Inspired received an unsolicited hostile takeover bid from the second largest shareholder, at 68.5p, which the Manager and the board publicly indicated objection to.

 

Who we engaged with:

 Board, Advisers

 

Outcome:

Shortly after the announcement of the hostile offer, Inspired’s advisors (having been appointed historically following our previous engagement around bid defence and takeover vulnerability) were able to deliver a Recommended Cash Offer for Inspired at 81p from a different counterparty, more than twice the share price at which we recapitalised Inspired in January 2025. Following the rejection of the hostile offer, this latter offer was accepted and went unconditional in August 2025.

 

5)

     

Outlook – FY 2025/26

 

Looking forward, while macroeconomic and geopolitical risks remain elevated, we are encouraged by the continued signs of recovery in the UK economy and broader market sentiment. Corporate earnings have proven resilient, takeover activity has accelerated, and early indicators suggest that IPO markets may be reopening for higher
-
quality companies.

 

The environment for M&A remains highly supportive of the Company’s strategy and positions. The significant valuation disconnect between UK public markets and private transaction multiples continues to attract interest from both corporate and private equity acquirers. We believe this trend of corporate activity will continue to be a key driver of returns, helping to crystallise the intrinsic value of our portfolio holdings which is not currently being reflected in public market prices.

 

We continue to advocate for a more supportive policy environment to revitalise UK capital markets. In our view, key reforms should include:

 

Removal of stamp duty on UK share trading;

Further simplification of UK listing rules;

Unlocking domestic pension fund capital for UK public equity investment; and

Clear confirmation of the inclusion of AIM stocks in the Mansion House Accord.

 

These reforms, combined with improving macroeconomic tailwinds, could catalyse a sustainable re-rating of the UK small cap equity segment.

 

We remain focused on our high-conviction, bottom-up stock selection, underpinned by deep fundamental research, active engagement with management teams, and a disciplined valuation framework. With a portfolio built on companies with clear structural growth drivers, high margins, and strategic relevance, we are confident in the portfolio’s positioning for the year ahead.

 

Top 10 Investee Company Review

(as at 30 June 2025)

Company
% of NAV1
Investment Thesis
Developments
Ricardo
Business Services
10.4%
Ongoing strategic transformation to refocus and prioritise the business towards higher growth, higher margin and less capital intensive activities
Strong market position underpinned by significant sector expertise
Recommended Cash Offer from WSP Inc. at a 69% premium to the 3 month volume weighted average share price
Expected completion in H2 2025
Costain
Industrial Goods & Services
10.4%
UK infrastructure delivery partner with particularly strong franchise presence across Rail and Water, which are both secular growth markets
Significantly better capitalised versus history, with a substantially de-risked contracting model (risk sharing and/ or transfer vs. historically fixed price contracts)
Embedded consultancy offering delivering material margin upside above and beyond project delivery
H1 update demonstrated mix shift toward higher-margin consultancy in line with our thesis (16% of revenue, from 12% previously)
Latest order book of £5.6bn with encouraging book-to-bill ratio
Confirmed guidance and on track for c.4.5% adjusted operating margin run-rate by end-2025
Brooks Macdonald
Financial Services
9.9%
Opportunity to leverage operational investments to grow margin and continue strong cash flow generation
A consolidating market; opportunity for Brooks as both consolidator and potential target with recent takeover interest for sector peers
Completed the divestment of its non-core international business to Canaccord
Moved from AIM to the Main Market to broaden investor access and profile
Reported best quarterly net flow performance in two years, with encouraging momentum towards a return to net positive flows
Everplay
Technology
8.9%
Leading independent video game publisher and developer
Earnings significantly underpinned by back catalogue sales
Significant founder ownership and experienced management team
Rebrand from Team17 to Everplay
Management change with Frank Sagnier (ex. Codemasters CEO) being appointed as Executive Chair
Announced an upcoming sequel to its “Hell Let Loose” game, which has generated over $100m of lifetime revenue for Everplay
Inspired
Business Services
7.9%
Leading player in a fragmented industry; significant opportunity to gain market share through client wins, proposition extension and M&A
Valued at a substantial discount to comparable private market transaction multiples
Recommended Cash Offer from HGGC Capital at a 102.5% premium to the issue price of 40p at which Inspired was recapitalised in January 2025
Completed post period end
The Property Franchise Group
Business Services
7.4%
Structurally growing UK residential lettings market
Exceptional quality of earnings due to franchisees’ bias towards lettings revenues, and TPFG’s franchise fee revenue model
Capital light and cash generative
Encouraging trading momentum with H1’25 results showing 8% like for like revenue growth, with strong performance across all divisions, and a sales pipeline 30% higher at June 2025 than December 2024
Netcall
Technology
6.9%
Provider of AI-driven process automation and customer engagement solutions
Structural tailwinds driving adoption of process automation, catalysed further by rising employment costs and AI technology capabilities
High levels of revenue visibility due to contracted revenues, with >100% Net Revenue Retention in FY24
FY25 trading update demonstrating 23% growth (10% organic)
Strong momentum in its “Liberty Cloud” platform, driven by AI and automation demand, with Cloud ACV up 52% (26% organic)
Trufin
Technology
6.2%
Provider of financing, payment and video game publishing software and services
Significant latent value when appraised on a sum of the parts basis
H1’25 trading update demonstrating exceptionally strong performance, in particular due to its Playstack video gaming division, with 40% revenue growth year on year
Full year expectations expected to be materially exceeded
Share buyback programme announced
XPS Pensions
Business Services
5.3%
Highly defensive – high degree of revenue visibility and largely non-discretionary, regulation driven client activity
Significant inflation pass-through ability
Highly fragmented sector with recent M&A activity, providing opportunity to XPS as a consolidator and potential target
Reported another consecutive year of double digit revenue growth
Completed acquisition of Polaris Actuaries & Consultants to accelerate Insurance Consulting expansion
Chair succession with Martin Sutherland announced as incoming Chair
Fintel
Business Services
3.9%
Leading UK provider of technology enabled regulatory solutions and services to IFAs, financial institutions and other intermediaries
Strategically valuable technology platform with opportunity to drive material growth in revenues and margins through supporting customers’ digitisation journeys
New partnerships (including Blackrock) for its VouchedFor intermediary proposition
Launch of Defaqto Matrix 360 market and product intelligence software with new partnerships including Zurich, RAC, Frontier, NFU Mutual and Policy Expert
Completed acquisition of fund ratings and research firm RSMR
New Simplybiz CEO appointment

1. Top ten holdings represent 77.2% of NAV

 

Portfolio as at 30 June 2025

% of invested portfolio at
% of invested portfolio at
Date of first
Cost
Valuation
30 June
30 June
% of net
Company
Sector Classification
Investment
£’000
£’000
2025
2024
assets
Ricardo
BusinessServices
Sep2021
18,618
18,070
11.0%
8.2%
10.4%
CostainGroup
Industrial
GoodsandServices
Jun2024
11,187
18,042
11.0%
2.1%
10.4%
BrooksMacdonald
FinancialServices
Jun2016
18,783
17,314
10.5%
10.3%
9.9%
EverplayGroup
Technology
Dec2023
10,875
15,586
9.5%
6.0%
8.9%
Inspired
BusinessServices
Jul2020
16,555
13,732
8.3%
4.1%
7.9%
TheProperty
FranchiseGroup
BusinessServices
Oct2023
7,472
12,921
7.8%
6.8%
7.4%
Netcall
Technology
Mar2023
10,048
11,963
7.3%
2.2%
6.9%
Trufin
Technology
Jul2023
7,805
10,753
6.5%
3.0%
6.2%
XPSPensionsGroup
BusinessServices
Jul2019
2,761
9,166
5.6%
23.8%
5.3%
Fintel
BusinessServices
Oct2020
5,030
6,750
4.1%
9.5%
3.9%
Next15 Group
BusinessServices
Oct2024
9,251
6,647
4.0%
–
3.8%
Diaceutics
Healthcare
Sep2024
6,587
5,945
3.6%
–
3.4%
HalfordsGroup
Consumer
Jun2024
5,576
5,756
3.5%
1.0%
3.3%
IomartGroup
Technology
Mar2022
24,702
4,915
3.0%
10.0%
2.8%
TribalGroup
Technology
Dec2014
5,871
3,560
2.2%
4.9%
2.0%
Benchmark
Healthcare
Jun2019
3,370
1,852
1.1%
3.8%
1.1%
InspiredCLN
BusinessServices
Jul2020
1,705
1,705
1.0%
–
1.0%
R&QInsurance1
FinancialServices
Jun2022
6,816
–
0.0%
0.0%
0.0%
InspiredWarrants
BusinessServices
Jul2020
–
–
0.0%
–
0.0%
Total investments
164,677
94.6%
Cash
9,519
5.4%
Net current liabilities
(43)
(0.0%)
Total shareholders’ funds
174,153
100.0%

 

1. In Liquidation

 

Ken Wotton

Gresham House Asset Management

15 October 2025

 

Financial Summary

 

Capital Return
As at
30 June
2025
As at
30 June
2024
% change
Net asset value (“NAV”) per Ordinary share+
392.47p
396.87p
-1.1%
Ordinary share price
363.00p
365.50p
-0.7%
Comparative index++
6,175.33
5,687.19
+8.6%
Discount of Ordinary share price to NAV1
(7.5)%
(7.9)%
Average discount of Ordinary share price to NAV for the year1
(8.4)%
(7.6)%
Total assets (£’000)
174,399
191,683
-9.0%
Equity shareholders’ funds (£’000)
174,153
189,965
-8.3%
Ordinary shares in issue with voting rights
44,373,800
47,865,450


 

 

Performance
Year ended
30 June
2025
Year ended
30 June
2024
NAV total return for the year1
(0.1)%
16.6%
Share price total return for the year1
0.4%
19.2%
Comparative index++ total return for the year
13.1%
18.5%
Ongoing charges1
1.26%
1.20%
Ongoing charges (including performance fee)1
1.26%
2.03%
Revenue return per Ordinary share
5.03p
4.15p
Dividend yield1
1.17%
0.96%
Proposed final dividend for the year
4.25p
3.50p

 

 

Year’s Highs/Lows
High
Low
NAV per Ordinary share
407.44p
302.97p
Ordinary share price
379.00p
272.00p

 

+
Net asset value or NAV, the value of total assets less current liabilities. The net asset value divided by the number of shares in issue produces the net asset value per share.

++
FTSE Small Cap (ex Investment Trusts) Index.

1
 Alternative Performance Measures. Please refer to pages 73 and 74 of the 2025 Annual Report for definitions and reconciliations of the Alternative Performance Measures to the year-end results.

 

Annual General Meeting

 

The Notice of the Annual General Meeting to be held on Wednesday, 12 November 2025 is set out on pages 76 and 78 of the Annual Report. The Annual General Meeting will be held at the offices of Panmure Liberum Limited, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY.

 

Further Information and Contact Details

 

The full Annual Report and Financial Statements can be accessed via the Company’s website at:

www.strategicequitycapital.com

 or by contacting the Company Secretary as below.

 

Copies of the announcement, annual reports, quarterly update presentations and other corporate information can be found on the Company’s website at:

www.strategicequitycapital.com

.
 

 

For further information, please contact:

 

Strategic Equity Capital plc
William Barlow (Chairman)
(via Juniper Partners)
+44 (0)131 378 0500
Panmure Liberum Limited (Corporate Broker)
Chris Clarke
Darren Vickers
+44 (0)20 3100 2000
Juniper Partners Limited (Company Secretary)
Steven Davidson
+44 (0)131 378 0500
KL Communications (PR Adviser)
Charles Gorman
Adam Westall
Charlotte Francis
gh@kl-communications.com
+44 (0)203 882 6644

 

 

Financial Statements

 

Statement of Comprehensive Income

Year ended 30 June 2025
Year ended 30 June 2024
Revenue
Capital
Revenue
Capital
return
return
Total
Total
return
Total
£'000
£'000
£'000
£'000
£'000
£'000
Investments
(Losses)/gains on investments held at fair value through profit or loss
-
(4,998)
(4,998)
-
24,099
24,099
-
(4,998)
(4,998)
-
24,099
24,099
Income
Dividends
4,405
-
4,405
3,997
2,111
6,108
Interest
51
-
51
55
-
55
Total income
4,456
-
4,456
4,025
2,111
6,163
Expenses
Investment Manager’s base fee
(1,256)
-
(1,256)
(1,270)
-
(1,270)
Investment Manager’s performance fee
-
-
-
-
(1,409)
(1,409)
Other expenses
(870)
-
(870)
(756)
-
(756)
Total expenses
(2,126)
-
(2,126)
(2,026)
(1,409)
(3,435)
Net return before taxation
2,330
(4,998)
(2,668)
2,026
24,801
26,827
Taxation
-
-
-
-
-
-
Net return and total comprehensive income for the year
2,330
(4,998)
(2,668)
2,026
24,801
26,827
pence
pence
pence
pence
pence
pence
Return per Ordinary share
5.03
(10.78)
(5.75)
4.15
50.84
54.99

 

The total column of this statement represents the Statement of Comprehensive Income prepared in accordance with IFRS. The supplementary revenue and capital return columns are both prepared under guidance published by the AIC. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

 

Statement of Changes in Equity

For the year ended
30 June 2025
Share capital
Share premium
account
Special
reserve
Capital reserve
Capital redemption reserve
Revenue reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
1 July 2024
6,353
11,300
-
165,489
2,897
3,926
189,965
Net return and total comprehensive income for the year
-
-
-
(4,998)
-
2330
(2,668)
Dividends paid
-
-
-
-
-
(1,649)
(1,649)
Share buybacks
-
-
-
(11,495)
-
-
(11,495)
30 June 2025
6,353
11,300
-
148,996
2,897
4,607
174,153
For the year ended
30 June 2024
Share capital
Share premium
account
Special
reserve
Capital reserve
Capital redemption reserve
Revenue reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
1 July 2023
6,353
11,300
3,590
142,952
2,897
3,131
170,223
Net return and total comprehensive income for the year
-
-
-
24,801
-
2,026
26,827
Dividends paid
-
-
-
-
-
(1,231)
(1,231)
Share buybacks
-
-
(3,590)
(2,264)
-
-
(5,854)
30 June 2024
6,353
11,300
-
165,489
2,897
3,926
189,965

 

All profits are attributable to the equity owners of the Company and there are no minority interests.

 

Balance Sheet

 

As at
30 June 2025
As at
30 June 2024
£'000
£'000
Non-current assets
Investments held at fair value though profit or loss
164,677
182,364
Current assets
Trade and other receivables
203
166
Cash and cash equivalents
9,519
9,153
9,722
9,319
Total assets
174,399
191,683
Current liabilities
Trade and other payables
(246)
(1,718)
Net assets
174,153
189,965
Capital and reserves
Share capital
6,353
6,353
Share premium account
11,300
11,300
Capital reserve
148,996
165,489
Capital redemption reserve
2,897
2,897
Revenue reserve
4,607
3,926
Total shareholders’ equity
174,153
189,965
pence
pence
Net asset value per share
392.47
396.87
number
number
Ordinary shares in issue
44,373,800
47,865,450

 

The financial statements were approved by the Board of Directors of Strategic Equity Capital on 15 October 2025.

 

They were signed on its behalf by

 

William Barlow

Chairman

 

15 October 2025

 

Company Number: 05448627

 

Statement of

Cash Flows

 

Year Ended 30 June
Year Ended 30 June
2025
2024
£’000
£’000
Operating activities
Net return before taxation
(2,668)
26,827
Adjustment for losses/(gains) on investments
4,998
(24,099)
Operating cash flows before movements in working capital
2,330
2,728
(Increase)/decrease in receivables
(37)
102
(Decrease)/increase in payables
(1,416)
1,134
Purchases of portfolio investments
(55,361)
(67,433)
Sales of portfolio investments
67,994
78,465
Net cash flow from operating activities
13,510
14,996
Financing activities
Equity dividend paid
(1,649)
(1,231)
Shares bought back in the year
(11,495)
(5,854)
Net cash flow from financing activities
(13,144)
(7,085)
Increase in cash and cash equivalents for the year
366
7,911
Cash and cash equivalents at the start of year
9,153
1,242
Cash and cash equivalents at 30 June
9,519
9,153

 

 

Emerging and Principal Risks

 

The Board believes that the overriding risks to shareholders are events and developments which can affect the general level of share prices, including, for instance, inflation or deflation, economic recessions and movements in interest rates and currencies which are outside of the control of the Board.

 

The Board believes that geopolitical developments, including the imposition of US tariffs and ongoing conflicts in Ukraine and the Middle East continue to pose risks to global economic growth and investors’ risk appetites and consequently can impact the valuation of companies in the portfolio. There is also an increasing awareness of the challenges and emerging risks posed by climate change as well as the impact and pace of technological developments, including Artificial Intelligence, on the companies in the investment universe.

 

The principal ongoing risks and uncertainties currently faced by the Company, which may vary in significance from time to time, are set out on pages 20 to 22 of the 2025 Annual Report, together with the controls and actions taken to mitigate those risks.

 

The Directors continue to work with the agents and advisers to the Company to try and manage the risks, including emerging risks. The central aims remain to preserve value in the Company’s portfolio and liquidity in the Company’s shares. The Directors aim to ensure that the Company maintains its investment strategy, has operational resilience, meets its regulatory requirements as an investment trust (and in particular in the provision of regular information to the market) and tries to navigate the financial and economic circumstances in these very uncertain times.

 

Responsibility statement of the Directors in respect of the Annual Financial Report

 

We confirm that to the best of our knowledge:

 

the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that it faces.

 

We consider the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.

 

Going Concern

 

In assessing the Company’s ability to continue as a going concern the Directors have also considered the Company’s investment objective, detailed on the inside front cover, risk management policies, detailed on pages 20 to 22 of the 2025 Annual Report, capital management (see note 17 to the financial statements in the 2025 Annual Report), the nature of its portfolio and expenditure projections and believe that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and for at least 12 months from the date of this Report. In addition, the Board has had regard to the Company’s investment performance (see page 3 of the 2025 Annual Report) and the price at which the Company’s shares trade relative to their NAV (see page 3 of the 2025 Annual Report).

 

The Directors performed an assessment of the Company’s ability to meet its liabilities as they fall due. In performing this assessment, the Directors took into consideration:

 

cash and cash equivalents balances and, from a liquidity perspective, the portfolio of readily realisable securities which can be used to meet short-term funding commitments;

the ability of the Company to meet all of its liabilities and ongoing expenses from its assets;

revenue and operating cost forecasts for the forthcoming year;

the ability of third-party service providers to continue to provide services;

potential downside scenarios including stress testing the Company’s portfolio for a 25% fall in the value of the investment portfolio; a 50% fall in dividend income and a buyback of 5% of the Company’s ordinary share capital, the impact of which would leave the Company with a positive cash position; and

The outcome of the Tender Offer announced on 15 October 2025 (please refer to page 5 of the 2025 Annual Report for further details).

 

Related party transactions and transactions with the Investment Manager

 

Fees paid to Directors are disclosed in the Directors‘ Remuneration Report on page
 
43 of the 2025 Annual Report. Full details of Directors‘ interests are set out on page
 
43 of the 2025 Annual Report.

 

The amounts payable to the Investment Manager, which is not considered to be a related party, are disclosed in notes 3 and 4 on pages
 
59 and 60 of the 2025 Annual Report. The amount due to the Investment Manager for management fees at 30
 
June 2025 was £105,000 (2024: £116,000). The amount due to the Investment Manager for performance fees at 30
 
June 2025 was £nil (2024: £1,409,000).

 

The Investment Manager, directly and indirectly through its in-house funds, has continued to purchase shares in the Company.

 

Notes

 

1.1

  

Corporate information

 

Strategic Equity Capital plc is a public limited company incorporated and domiciled in the United Kingdom and registered in England and Wales under the Companies Act 2006 whose shares are publicly traded. The Company is an investment company as defined by Section 833 of the Companies Act 2006.

 

The Company carries on business as an investment trust within the meaning of Sections 1158/1159 of the UK Corporation Tax Act 2010.

 

The financial statements of Strategic Equity Capital plc for the year ended 30 June 2025 were authorised for issue in accordance with a resolution of the Directors on 15 October 2025.

 

1.2 Basis of preparation and statement of compliance

 

The financial statements of the Company have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006, as applicable to companies reporting under those standards. Where presentational guidance set out in the Statement of Recommended Practice (“SORP”) for investment trusts issued by the AIC in July 2022 is consistent with the requirements of IFRS, the Directors have sought to prepare financial statements on a basis compliant with the recommendations of the SORP.
 

 

The financial statements of the Company have been prepared on a going concern basis.

 

The Directors performed an assessment of the Company’s ability to meet its liabilities as they fall due. In performing this assessment, the Directors took into consideration:

 

cash and cash equivalents balances and the portfolio of readily realisable securities which can be used to meet short term funding commitments;

the ability of the Company to meet all of its liabilities and ongoing expenses from its assets;

revenue and operating cost forecasts for the forthcoming year;

the ability of third-party service providers to continue to provide services;

potential downside scenarios including stress testing the Company’s portfolio for a 25% fall in the value of the investment portfolio; a 50% fall in dividend income and a buyback of 5% of the Company’s Ordinary share capital, the impact of which would leave the Company with a positive cash position; and

The outcome of the Tender Offer announced on 15 October 2025.

 

Based on this assessment, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements, and therefore have prepared the financial statements on a going concern basis.

 

2. Income

Year ended 30 June 2025
Year ended 30 June 2024
Revenue
Capital
Revenue
Capital
return
return
Total
return
return
Total
£'000
£'000
£'000
£'000
£'000
£'000
Income from investments
UK dividend income
4,405
-
4,405
3,997
2,111
6,108
4,405
-
4,405
3,997
2,111
6,108
Other operating income
Liquidity interest
51
-
51
55
-
55
4,456
-
4,456
4,052
2,111
6,163

 

3. Investment Manager’s base fee

Year ended 30 June 2025
Year ended 30 June 2024
Revenue
Capital
Revenue
Capital
return
return
Total
return
return
Total
£'000
£'000
£'000
£'000
£'000
£'000
Management fee
1,256
-
1,256
1,270
-
1,270
1,256
-
1,256
1,270
-
1,270

 

A basic management fee was payable to the Investment Manager at an annual rate of 0.75% of the NAV of the Company. The basic management fee accrues daily and is payable quarterly in arrears. The Investment Manager is also entitled to a performance fee, details of which are given in the Report of the Directors on page
 
31 of the 2025 Annual Report.

 

4. Investment Manager’s performance fee

Year ended 30 June 2025
Year ended 30 June 2024
Revenue
Capital
Revenue
Capital
return
return
Total
return
return
Total
£'000
£'000
£'000
£'000
£'000
£'000
Performance fee
-
-
-
-
1,409
1,409
-
-
-
-
1,409
1,409

 

Details of the Performance fee calculation are noted in the Report of the Directors on page 31 of the 2025 Annual Report.

 

5. Other expenses

Year ended 30 June 2025
Year ended 30 June 2024
Revenue
Capital
Revenue
Capital
return
return
Total
return
return
Total
£'000
£'000
£'000
£'000
£'000
£'000
Secretarial services
183
-
183
181
-
181
Auditor’s remuneration for:
Audit services*
42
-
42
39
-
39
Directors’ Remuneration
171
-
171
175
-
175
Other expenses
474
-
474
361
-
361
870
-
870
756
-
756

 

All expenses include VAT where applicable, apart from audit services which is shown net.

*No non-audit fees were incurred during the year

 

6. Taxation

Year ended 30 June 2025
Year ended 30 June 2024
Revenue
Capital
Revenue
Capital
return
return
Total
return
return
Total
£'000
£'000
£'000
£'000
£'000
£'000
Corporation tax at 25.00% (2024: 25.00%)
-
-
-
-
-
-
-
-
-
-
-
-

 

As at 30 June 2025 the total taxation charge in the Company’s revenue account is lower than the standard rate of corporation tax in the UK. The differences are explained below:

 

Year ended 30 June 2025
Year ended 30 June 2024
Revenue
Capital
Revenue
Capital
return
return
Total
return
return
Total
£'000
£'000
£'000
£'000
£'000
£'000
Net return on ordinary activities before taxation
2,330
(4,998)
(2,668)
2,026
24,801
26,827
Theoretical tax at UK corporation tax rate of 25.00% (2024: 25.00%)
583
(1,250)
(667)
507
6,200
6,707
Effects of:
- UK dividends that are not taxable
(1,100)
-
(1,100)
(999)
-
(999)
- Unrelieved expenses
517
-
517
492
352
844
- Non-taxable investment losses/(gains)
-
1,250
1,250
-
(6,552)
(6,552)
-
-
-
-
-
-

 

Factors that may affect future tax charges

 

At 30 June 2025, the Company had no unprovided deferred tax liabilities (2024: £nil). At that date, based on current estimates and including the accumulation of net allowable losses, the Company had unrelieved losses of £36,013,000 (2024: £35,348,000) that are available to offset future taxable revenue. A deferred tax asset of £9,003,000 (2024: £8,837,000) has not been recognised because the Company is not expected to generate sufficient taxable income in future periods in excess of the available deductible expenses and accordingly, the Company is unlikely to be able to reduce future tax liabilities through the use of existing surplus losses. The potential deferred tax asset has been calculated using a corporation tax rate of 25% (2024: 25%).

 

7. Dividends

 

Under the requirements of Sections 1158/1159 of the Corporation Tax Act 2010 no more than 15% of total income may be retained by the Company. These requirements are considered on the basis of dividends declared in respect of the financial year as shown below.

 

30 June
30 June
2025
2024
£'000
£'000
Final dividend proposed of 4.25p (2024: 3.50p) per share
1,836
1,649


 

The following dividends were declared and paid by the Company in the financial year:

 

30 June
30 June
2025
2024
£'000
£'000
Final dividend: 3.50p per share (2024: 2.50p)
1,649
1,231

 

Dividends have been solely paid out of the Revenue reserve.

 

8. Return per Ordinary share

Year ended 30 June 2025
Year ended 30 June 2024
Net
Weighted average
Per
Net
Weighted average
Per
return
number of
share
return
number of
share
£’000
Ordinary shares
pence
£’000
Ordinary shares
pence
Total
Return per share
(2,668)
46,346,499
(5.75)
26,827
48,778,400
54.99
Revenue
Return per share
2,330
46,346,499
5.03
2,026
48,778,400
4.15
Capital
Return per share
(4,998)
46,346,499
(10.78)
24,801
48,778,400
50.84

 

9. Investments

 

30 June 2025
£’000
30 June 2024
£’000
Investment portfolio summary
Quoted investments at fair value through profit or loss
164,677
182,364
164,677
182,364

 

Under IFRS 13, the Company is required to classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in measuring the fair value of each asset. The fair value hierarchy has the following levels:

 

Investments whose values are based on quoted market prices in active markets are classified within level 1 and include active quoted equities.

 

The definition of level 1 inputs refers to ‘active markets’, which is a market in which transactions take place with sufficient frequency and volume for pricing information to be provided on an ongoing basis. Due to the liquidity levels of the markets in which the Company trades, whether transactions take place with sufficient frequency and volume is a matter of judgement, and depends on the specific facts and circumstances. The Investment Manager has analysed trading volumes and frequency of the Company’s portfolio and has determined these investments as level 1 of the hierarchy.

 

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. As level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

 

Level 3 instruments include private equity, as observable prices are not available for these securities the Company has used valuation techniques to derive the fair value. In respect of unquoted instruments, or where the market for a financial instrument is not active, fair value is established by using recognised valuation methodologies, in accordance with IPEV Valuation Guidelines.

 

The level in the fair value hierarchy within which the fair value measurement is categorised is determined on the basis of the lowest level input that is significant to the fair value of the investment.

 

The following table analyses within the fair value hierarchy the Company’s financial assets and liabilities (by class) measured at fair value at 30 June 2025.

 

Financial instruments at fair value through profit or loss

 

Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
30 June 2025
Equity investments
162,972
1,705
-
164,677
Liquidity funds
-
1
-
1
Total
162,972
1,706
-
164,678
30 June 2024
Equity investments
178,480
3,884
-
182,364
Liquidity funds
-
1
-
1
Total
178,480
3,885
-
182,365

 

Listed investments included in Level 2 are deemed to be less liquid than Level 1. An investment is categorised as illiquid when historic trading data indicates it would take more than 250 days to liquidate. The fair value of these investments has been determined by reference to their quoted prices at the reporting date.

 

10. Nominal Share capital

Number
£’000
Allotted, called up and fully paid Ordinary shares of 10p each:
Ordinary shares in circulation at 30 June 2024
63,529,206
6,353
Shares held in Treasury at 30 June 2024
15,663,756
1,566
Ordinary shares in issue per Balance Sheet at 30 June 2024
47,865,450
4,787
Shares bought back to be held in Treasury
(3,491,650)
(349)
Ordinary shares in issue per Balance Sheet at 30 June 2025
44,373,800
4,438
Shares held in Treasury at 30 June 2025
19,155,406
1,915
Ordinary shares in circulation at 30 June 2025
63,529,206
6,353

 

Other Information

 

These are not statutory accounts in terms of Section 434 of the Companies Act 2006.
 
Full audited accounts for the year to 30 June 2025 will be sent to shareholders in October 2025 and will be available for inspection at 1 Finsbury Circus, London EC2M 7SH, the registered office of the Company.

 

The full annual report and accounts will be available on the Company’s website

www.strategicequitycapital.com

 and have been submitted to the National Storage Mechanism ("NSM") and will shortly be available for inspection at:
 

https://data.fca.org.uk/#/nsm/nationalstoragemechanism

.

 

The audited accounts for the year ended 30 June 2025 will be lodged with the Registrar of Companies.