REG-Strategic Equity Capital Plc: Final Results
16/10/2025 07:02
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 NAV 1 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 * Recommended Cash Offer from WSP Inc. at a 69% premium to the 3 month volume weighted average share price
* Strong market position underpinned by significant sector expertise * 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 * H1 update demonstrated mix shift toward higher-margin consultancy in line with our thesis (16% of revenue, from 12% previously)
* Significantly better capitalised versus history, with a substantially de-risked contracting model (risk sharing and/ or transfer vs. historically fixed price contracts) * Latest order book of £5.6bn with encouraging book-to-bill ratio
* Embedded consultancy offering delivering material margin upside above and beyond project delivery * 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 * Completed the divestment of its non-core international business to Canaccord
* A consolidating market; opportunity for Brooks as both consolidator and potential target with recent takeover interest for sector peers * 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 * Rebrand from Team17 to Everplay
* Earnings significantly underpinned by back catalogue sales * Management change with Frank Sagnier (ex. Codemasters CEO) being appointed as Executive Chair
* Significant founder ownership and experienced management team * 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 * 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
* Valued at a substantial discount to comparable private market transaction multiples * Completed post period end
The Property Franchise Group Business Services 7.4% * Structurally growing UK residential lettings market * 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
* Exceptional quality of earnings due to franchisees’ bias towards lettings revenues, and TPFG’s franchise fee revenue model
* Capital light and cash generative
Netcall Technology 6.9% * Provider of AI-driven process automation and customer engagement solutions * FY25 trading update demonstrating 23% growth (10% organic)
* Structural tailwinds driving adoption of process automation, catalysed further by rising employment costs and AI technology capabilities * Strong momentum in its “Liberty Cloud” platform, driven by AI and automation demand, with Cloud ACV up 52% (26% organic)
* High levels of revenue visibility due to contracted revenues, with >100% Net Revenue Retention in FY24
Trufin Technology 6.2% * Provider of financing, payment and video game publishing software and services * H1’25 trading update demonstrating exceptionally strong performance, in particular due to its Playstack video gaming division, with 40% revenue growth year on year
* Significant latent value when appraised on a sum of the parts basis * 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 * Reported another consecutive year of double digit revenue growth
* Significant inflation pass-through ability * Completed acquisition of Polaris Actuaries & Consultants to accelerate Insurance Consulting expansion
* Highly fragmented sector with recent M&A activity, providing opportunity to XPS as a consolidator and potential target * 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 * New partnerships (including Blackrock) for its VouchedFor intermediary proposition
* Strategically valuable technology platform with opportunity to drive material growth in revenues and margins through supporting customers’ digitisation journeys * 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 Business Services Sep 2021 18,618 18,070 11.0% 8.2% 10.4%
Costain Group Industrial Goods and Services Jun 2024 11,187 18,042 11.0% 2.1% 10.4%
Brooks Macdonald Financial Services Jun 2016 18,783 17,314 10.5% 10.3% 9.9%
Everplay Group Technology Dec 2023 10,875 15,586 9.5% 6.0% 8.9%
Inspired Business Services Jul 2020 16,555 13,732 8.3% 4.1% 7.9%
The Property Franchise Group Business Services Oct 2023 7,472 12,921 7.8% 6.8% 7.4%
Netcall Technology Mar 2023 10,048 11,963 7.3% 2.2% 6.9%
Trufin Technology Jul 2023 7,805 10,753 6.5% 3.0% 6.2%
XPS Pensions Group Business Services Jul 2019 2,761 9,166 5.6% 23.8% 5.3%
Fintel Business Services Oct 2020 5,030 6,750 4.1% 9.5% 3.9%
Next 15 Group Business Services Oct 2024 9,251 6,647 4.0% – 3.8%
Diaceutics Healthcare Sep 2024 6,587 5,945 3.6% – 3.4%
Halfords Group Consumer Jun 2024 5,576 5,756 3.5% 1.0% 3.3%
Iomart Group Technology Mar 2022 24,702 4,915 3.0% 10.0% 2.8%
Tribal Group Technology Dec 2014 5,871 3,560 2.2% 4.9% 2.0%
Benchmark Healthcare Jun 2019 3,370 1,852 1.1% 3.8% 1.1%
Inspired CLN Business Services Jul 2020 1,705 1,705 1.0% – 1.0%
R&Q Insurance 1 Financial Services Jun 2022 6,816 – 0.0% 0.0% 0.0%
Inspired Warrants Business Services Jul 2020 – – 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 NAV 1 (7.5)% (7.9)%
Average discount of Ordinary share price to NAV for the year 1 (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 year 1 (0.1)% 16.6%
Share price total return for the year 1 0.4% 19.2%
Comparative index ++ total return for the year 13.1% 18.5%
Ongoing charges 1 1.26% 1.20%
Ongoing charges (including performance fee) 1 1.26% 2.03%
Revenue return per Ordinary share 5.03p 4.15p
Dividend yield 1 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) gh@kl-communications.com +44 (0)203 882 6644
Charles Gorman
Adam Westall Charlotte Francis
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.
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