REG-Strategic Equity Capital Plc: Half-year Financial Report
20/02/2026 07:02
20 February 2026
Strategic Equity Capital plc (‘SEC’)
Legal Entity Identifier: 2138003R5GB8QZU2G577
Report & Financial Statements for the half-year ended 31 December 2025
FINANCIAL SUMMARY
Capital Return As at 31 December 2025 As at 30 June 2025 As at 31 December 2024 Six months % change to 31 December 2025
Net asset value (“NAV”) per Ordinary share ǂ 395.53p 392.47p 358.41p 0.8%
Ordinary share price 370.00p 363.00p 331.00p 1.9%
Comparative index* 6,260.89 6,175.33 5,863.19 1.4%
Discount of Ordinary share price to NAV 1 (6.5)% (7.5)% (7.6)%
Average discount of Ordinary share price to NAV for the period 1 (8.5)% (8.4)% (7.8)%
Total assets (£’000) 149,585 174,399 167,072 (14.2)%
Equity shareholders’ funds (£’000) 149,256 174,153 166,733 (14.3)%
Ordinary shares in issue with voting rights 37,735,567 44,373,800 46,520,577
Performance Six month period to 31 December 2025 Year ended 30 June 2025 Six month period to 31 December 2024
NAV total return for the period 1 1.8% (0.1)% (8.8)%
Share price total return for the period 1 3.1% 0.4% (8.5)%
Comparative index total return for the period * 3.1% 13.1% 5.2%
Ongoing charges - annualised 1 1.30% 1.26% 1.20%
Ongoing charges (including performance fee) - annualised 1 1.30% 1.26% 1.20%
Revenue return per Ordinary share 0.33p 5.03p 3.70p
Dividend yield 1 n/a 1.17% n/a
Proposed final dividend for the period n/a 4.25p n/a
Interim period’s Highs/Lows High Low
NAV per Ordinary share 427.67p 302.97p
Ordinary share price 390.00p 272.00p
ǂ 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 SmallCap (ex Investment Trusts) Index.
1 Alternative Performance Measure.
The Report & Financial Statements for the six months ended 31 December 2025
can be accessed via the Company’s website at:
www.strategicequitycapital.com or by
contacting the Company Secretary as below.
Copies of this announcement, annual and half-year 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
Liberum Capital 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)20 3995 6673
Charles Gorman
Adam Westall Charlotte Francis
Chairman’s Statement
I am pleased to present the Interim Report for Strategic Equity Capital plc
for the six months ended 31 December 2025.
Most notably, the period saw the conclusion of the Company’s scheduled
realisation opportunity. The Board was delighted to note that the vast
majority of shareholders (representing c. 78% of issued shares) chose to
continue their investment in the Company, a decision the Board views as a
strong endorsement of the Investment Manager’s strategy and the long-term
potential of the portfolio.
The Company’s Net Asset Value (NAV) per share (on a total return basis)
increased by 1.8% during the 6 months. Over the same period, the Company’s
share price delivered a total return of +3.1%. This compared to the FTSE Small
Cap (ex Investment Trusts) Total Return Index (“FTSE Small Cap Index”),
which also rose by 3.1%.
The period under review was characterised by continued volatility in equity
markets, particularly within UK smaller companies. While the broader
macroeconomic environment showed signs of stabilisation, sentiment towards UK
equities was heavily impacted by the protracted lead-up to the UK Autumn
Budget, which generated significant uncertainty regarding capital taxation and
the treatment of smaller listed companies.
An overview of the reporting period, portfolio activity and outlook is set out
in the Investment Manager’s Report that follows.
Performance
Market sentiment towards UK equities, and UK smaller companies specifically,
remained subdued during the period. The differential between the strong
performance of the FTSE 100 and more modest returns across smaller company
indices continued, reflecting concentrated large-cap gains alongside broader
risk aversion.
Against this backdrop, the Board continues to emphasise long-term outcomes and
intrinsic value creation. Since September 2020, when Ken Wotton was appointed
Lead Manager, the Company has delivered strong absolute returns.
NAV per share (on a total return basis) growth of 72%, and a total
share price return of 100%, both as at 31 December 2025, demonstrate a track
record of identifying businesses where value can be realised through
strategic, operational or corporate catalysts. By way of comparison, the FTSE
Small Cap (ex - Investment Trusts) Index and the Investment
Trust UK Smaller Companies sector generated total returns of 97.5% and 67.8%
respectively over the same period.
Recent corporate activity, including the takeovers of Inspired plc and Ricardo
plc at significant premia to undisturbed share prices, further demonstrates
the potential for unlocking value within the portfolio. The Manager was able
to leverage significant equity stakes (held by the Company and other funds
under management) to catalyse value realisation by way of corporate activity.
In the case of Inspired, this comprised publicly rejecting a Hostile Offer and
subsequently giving irrevocable support for a competing, Recommended Cash
Offer at a higher price. In the case of Ricardo this comprised negotiating
between an agitating third party shareholder and the Board before helping
deliver a Recommended Cash Offer with irrevocable support.
Realisation Opportunity
A key strategic priority for the Board during the period was the
implementation of the realisation opportunity whereby shareholders were given
the opportunity to tender up to 100% of their shares held, as committed to in
2022.
In September 2025, the Board implemented a Tender Offer and realisation pool
mechanism to provide shareholders with a NAV-based realisation opportunity. A
total of 9,510,496 Ordinary Shares were validly tendered, representing
approximately 22% of the Company’s issued share capital. The vast majority
of shareholders, representing c. 78% of issued shares, chose to remain
invested in the Continuing Pool. This high level of retention represents a
significant vote of confidence from our shareholder base in the Company’s
investment proposition and the Investment Manager’s ability to deliver
superior returns from the current valuation starting point.
Assets were allocated proportionately between the Tender Pool and the
Continuing Pool, with shareholders who tendered set to receive realisation
proceeds as underlying assets are sold. As at 19 February 2026, c. £19m of
proceeds have been returned to shareholders by way of an interim distribution,
representing c. 50% of the Tender Pool’s proportionate value as at 25
November 2025. As announced on 19 February 2026, a second interim distribution
of c. £10m will be returned to shareholders on 24 February 2026. Following
this second distribution, around 75% of the Tender Pool’s value will have
been returned to shareholders. The Board currently anticipates that the
realisation process will conclude by 31 October 2026, subject to market
conditions.
Discount and Discount Management
The Company’s shares continued to trade at a discount to Net Asset Value
during the period, reflecting broader market conditions rather than any change
in the quality or prospects of the portfolio.
The Board remains committed to disciplined discount management in the
Continuing Pool. In line with the terms set out in the Circular, 50% of net
gains from realised profitable transactions will be allocated to share
buybacks at discounts of up to 5% to NAV per share. The Board also reaffirmed
its intention to provide a further realisation opportunity in 2030, ensuring
ongoing alignment with shareholder liquidity requirements.
Risk Management
The Investment Manager continues to apply a disciplined and research-driven
approach to risk management, focusing on high-quality businesses with
resilient balance sheets, strong cash generation and defensive revenue
profiles. These attributes provide a degree of protection in uncertain
macroeconomic conditions.
The portfolio remains diversified across sectors that are less exposed to
global trade disruption and more reflective of the UK domestic economy, which
we believe supports risk-adjusted outcomes for longer-term investors.
Valuation
The Board maintains that the valuation opportunity within UK smaller companies
remains compelling. Public market valuations for UK smaller companies are at
historically depressed levels relative to both larger UK stocks and
international peers, creating a meaningful relative value opportunity.
This valuation disconnect continues to attract corporate interest,
contributing to elevated levels of takeover activity and private equity
engagement. The Board believes this dynamic will support realisation
opportunities over time and underscores the importance of patient capital in
capturing intrinsic value.
Marketing
Marketing and shareholder engagement remain strategic priorities. During the
period, the Board oversaw ongoing outreach through investor briefings,
portfolio commentary and media engagement. These activities are designed to
deepen understanding of SEC’s differentiated investment proposition and to
support demand for the Company’s shares.
Broader industry engagement continues to emphasise the structural opportunity
within UK smaller companies, particularly in light of persistent valuation
gaps and the potential for renewed investor interest in 2026.
Gearing and Cash Management
The Company has maintained its policy of operating without a banking loan
facility over the period. This policy is reviewed regularly by the Board in
conjunction with the Investment Manager to ensure it remains appropriate in
the context of market conditions and portfolio positioning.
Board Succession
As previously noted in the Company’s 2025 Annual Report, Richard Locke will
retire as a Director of the Company during the 2026 financial year, and I will
retire as a Director of the Company at the conclusion of the 2026 Annual
General Meeting.
The Board has commenced a formal process to identify suitable candidates to
fill the two non-executive director roles resulting from these Board changes.
Further announcements will be made in due course as this process progresses.
Outlook
The Board believes the outlook for UK smaller companies is increasingly
supportive in 2026. With the uncertainty of the UK Budget now behind us, we
anticipate a period of greater stability which may encourage capital to return
to the sector.
Despite ongoing negative domestic fund flows, international capital has begun
to recognise the relative value opportunity in UK small and mid-cap equities,
with even modest reallocation from markets such as the United States
potentially having a meaningful impact given current valuation spreads.
Valuation dispersion between larger UK stocks and smaller companies remains
historically wide, suggesting the potential for a relative re-rating should
broader market confidence improve. Expected interest rate reductions and a
gradual reopening of the IPO market could further support liquidity and
investor appetite within the segment.
Elevated corporate activity, including takeover and private equity interest,
continues to offer tangible catalysts for value realisation, a theme that has
been evident in recent portfolio exits. This combination of valuation support,
improving liquidity conditions and corporate engagement contributes to the
Board’s constructive medium-term view for UK smaller companies.
Accordingly, the Board remains confident that the continuing pool is well
positioned to benefit from these dynamics and that the Company’s strategy
remains appropriate for delivering attractive long-term returns for
shareholders.
The Board thanks shareholders for their continued support.
William Barlow
Chairman
19 February 2026
Investment Manager’s Report – Introduction
Why Strategic Equity Capital?
Expertise and Proven Track Record
Strategic Equity Capital benefits from the specialist expertise of fund
manager Ken Wotton and his team, who excel in identifying compelling
investment opportunities within UK smaller companies. With a demonstrable
long-term track record, the team focuses on companies that operate in sectors
or niche markets offering potential for structural growth or opportunities to
gain market share.
A Distinctive Approach
The SEC team applies Gresham House’s highly disciplined private equity
methodology in the public markets, combining constructive corporate engagement
with rigorous due diligence. This approach has proven effective in generating
strong returns. The team can invest strategically to support companies in
various ways, including:
* providing primary capital
* facilitating strategic shifts or operational improvements
* pre-IPO funding
* acting as a catalyst for mergers and acquisitions
Powerful Network
The Investment Manager’s network of advisers and connections provides
challenge, validation and insight to the investment team, which in turn drives
better decision making, stock-selection and ultimately, value to SEC
shareholders. The network and advisers can also be connected to portfolio
companies to support their growth.
Active and Engaged
SEC maintains a highly concentrated portfolio of 15–25 UK companies,
allowing the investment team to engage actively with investee companies to
build superior shareholder value. The investment trust structure further
enables the team to take a long-term approach, focusing on high-conviction
investments.
Strong Fundamentals
The Investment Manager focuses on businesses that demonstrate fundamentally
profitable business models, strong cash generation, attractive returns on
capital and defensible market positions. Early-stage, pre-profit and highly
cyclical businesses are deliberately avoided.
Disciplined and repeatable process
The investment portfolio is constructed on a “bottom up” basis, with a
focus on individual company fundamentals and idiosyncratic components of risk
and reward, rather than “top down” thematic or macro positioning. Targeted
due diligence is conducted on the critical judgements for each investment
case, with a focus on identifying and mitigating key risk areas with a view to
downside protection. Each investment is subject to a conviction score across
six categories, upon which valuation and asymmetry of returns is overlaid.
Our Strategic Public Equity Strategy
The appointment of Gresham House as Investment Manager in May 2020, and Ken
Wotton as Lead Fund Manager in September 2020, marked a strategic refocus,
ensuring the investment strategy is rigorously applied and effectively
leverages the extensive resources of the Gresham House Strategic Equity team,
the broader group platform, and its network. This strategy is detailed in the
Company’s 2025 Annual Report.
Investment Focus
Our investment focus is to invest into high quality, publicly listed companies
which we believe can materially increase their value over the medium to long
term through strategic, operational or management change. To select suitable
investments and to assist in this process we apply our proprietary Strategic
Public Equity (“SPE”) investment strategy. This includes a much higher
level of engagement with management than most investment managers adopt and is
closer in this respect to a private equity approach to investing in public
markets companies. Our path to achieving this involves constructing a high
conviction, concentrated portfolio; focusing on quality business fundamentals;
undertaking deep due diligence including engaging our proprietary network of
experts and assessing ESG risks and opportunities through the completion of
the ESG decision tool; and maintaining active stewardship of our investments.
Through constructive, active engagement with the management teams and boards
of directors, we seek to ensure alignment with shareholder objectives and to
provide support and access to other resource and expertise to augment a
company’s value creation strategy. We are long term investors and typically
aim to hold companies for three-to-five years to back a thesis that includes
an entry and exit strategy and a clearly identified route to value creation.
We have clear parameters for what we will invest in and areas which we will
deliberately avoid.
Smaller Company Focus
We believe that UK Smaller Companies represent a structurally attractive part
of the public markets. Academic research demonstrates that smaller companies
in the UK have delivered substantial outperformance over the long term. This
is partially because there are a large number of under-researched and under
owned businesses that typically trade at a valuation discount to larger
companies and relative to their prospects. A highly selective investor with
the resources and experience to navigate successfully this part of the market
can find exceptional long-term investment opportunities.
Key Attractions of Smaller Companies:
Inefficient Markets: Smaller companies are often
under-researched, presenting opportunities for those willing to devote time
and resources.
Large Universe: Most UK-listed companies fall into the
smaller companies category, with two-thirds having a market capitalisation
below £500m, offering a wide array of opportunities.
Valuation Discounts: These discounts present attractive
entry points where the intrinsic value of a company’s long-term prospects is
undervalued.
M&A Activity: Smaller companies often offer strategic
opportunities within their niche markets and can become attractive acquisition
targets for both trade and private equity buyers.
Portfolio Construction
We maintain a concentrated portfolio of 15-25 high conviction holdings with
prospects for attractive absolute returns over our investment holding period.
The majority of portfolio value is likely to be concentrated in the top 10
holdings, with other positions representing smaller initial “toehold”
investments where we are awaiting a catalyst to increase our stake to an
influential, strategic level. Bottom up stock picking determines SEC’s
sector weightings, which are not explicitly managed relative to a target
benchmark weighting. The absence of certain sectors such as oil & gas, mining,
and banks, as well as limited exposure to overtly cyclical parts of the
market, typically result in a portfolio weighted towards businesses with
sustainable profit and cash generation characteristics. This is further
reinforced by the absence of early stage or pre-profit businesses from the
portfolio.
As a result, whilst the portfolio’s sector composition may vary between
reporting periods, over the long term it is expected to comprise primarily
technology, healthcare, business services, financials and industrials
businesses.
The underlying value drivers are typically company-specific and they exhibit
limited correlation even within the same broad sectors. The pie-chart on page
17 of the Interim Report sets out the sector exposure of the Company as at 31
December 2025. Our smaller company focus and specialist expertise leads us to
prioritise companies with a market capitalisation between £100m and £300m at
the point of investment. This focus, in combination with the size of the
Company and its concentrated portfolio approach, provides the potential to
build a strategic and influential stake in the highest conviction holdings. In
turn this provides a platform to maximise the likelihood that our constructive
active engagement approach will be effective and ultimately successfully
contribute to shareholder value creation.
Once purchased there is no upper limit restriction on the market
capitalisation of an individual investment. We may run active positions
regardless of market capitalisation provided they continue to deliver the
expected contribution to overall portfolio returns and subject to exposure
limits and portfolio construction considerations.
Constructive Active Engagement Approach
SEC strives to build consensus with stakeholders, aiming to unlock shareholder
value and create stronger businesses in the long term. Our objective is to
foster a constructive dialogue with management, positioning the Gresham House
Asset Management (‘GHAM’) team and its network as trusted advisers. With a
highly focused portfolio, SEC’s management team can develop a deep
understanding of its portfolio companies and their potential.
Where appropriate the GHAM team is able to leverage its combined interest in
an SEC portfolio company, where additional shareholdings are held within other
GHAM - managed investment vehicles, in order to maximise its
engagement efficacy with the portfolio company.
The team engages with company management and boards in several areas,
including:
* Strategy: Ensuring that
business strategy and operations align with long-term value creation and focus
on building strategic value within a company’s market.
* Corporate Activity: Supporting
acquisition and divestment activities through advice, network introductions,
and cornerstone capital.
* Capital Allocation: Optimising
capital allocation by prioritising the highest return and value-added
projects.
* Board Composition: Ensuring
boards are appropriately balanced and introducing high-quality candidates as
needed.
* Management Incentivisation:
Aligning management incentives with long-term shareholder value.
* ESG: Leveraging Gresham
House’s sustainable investing framework to identify, understand, and monitor
key ESG risks and opportunities, with a particular focus on corporate
governance.
* Investor Relations: Assisting
management teams in refining their equity story and targeting investor
relations activities to ensure market understanding and value creation.
Engagement is typically undertaken privately, leveraging the resources of the
Gresham House group. We also seek to introduce portfolio companies to our
network, supporting initiatives to create shareholder value. In summary, we
follow a practice of constructive corporate engagement, working
collaboratively with management teams and like - minded
co-investors to enhance shareholder value.
Investment Manager’s Report for the half-year ended 31 December 2025
1) Overview – H2 2025
The six months to 31 December 2025 were characterised by continued volatility
across global equity markets, with UK smaller companies remaining under
pressure despite improving underlying economic fundamentals. Investor
sentiment towards UK equities remained subdued, reflecting persistent domestic
fund outflows, geopolitical uncertainty and the ongoing dominance of US equity
market performance.
A dominant theme during the period was the domestic political environment. The
protracted lead-up to the 2025 Autumn Budget created a vacuum of uncertainty
that weighed heavily on risk appetite. Speculation regarding tax policy
changes specifically impacted asset allocation decisions (through, for
example, SIPP withdrawals), causing a hiatus in investment decision-making and
exacerbating liquidity challenges in the sector. While the final Budget
announcement provided clarity, the months of speculation delayed the recovery
in sentiment that fundamental data otherwise supported.
Despite this backdrop, operational performance across the Company’s
portfolio was generally resilient. The majority of portfolio companies
continued to trade in line with, or ahead of, management expectations,
supported by strong balance sheets, recurring revenues and defensible market
positions.
Importantly, depressed public market valuations continued to act as a catalyst
for corporate activity, reinforcing the relevance of the Company’s private
equity-style investment approach.
2) Performance – H2 2025
The Company’s Net Asset Value (NAV) per share (on a total return basis)
increased by 1.8% during the 6
months. Over the same period, the Company’s share price delivered a total
return of +3.1% . This compared to the
FTSE Small Cap (ex Investment Trusts) Total Return Index (“FTSE Small Cap
Index”), which also rose by 3.1% .
Performance during the period was driven primarily by stock-specific factors
rather than broader market movements. Corporate activity was a notable
contributor, with realisations validating underlying investment theses.
Elsewhere, share price movements reflected a combination of company-specific
developments and broader market sentiment towards UK smaller companies,
particularly during the pre-Budget volatility.
Key contributors to performance during the year included:
* TruFin (+210 bps contribution to return “CTR”)*
, following multiple forecast upgrades due to the continued
strong performance of its Playstack division.
* Next 15 Group (+131 bps CTR) ,
after its interim results showed trading in line with full-year expectations
supported by disciplined cost management and portfolio simplification, and the
company completed the sale of non-core assets such as the Beyond unit,
reinforcing strategic focus and strengthening operational momentum.
* Tribal Group (+119 bps CTR) ,
following a trading update that reaffirmed the Group was on track to deliver
full-year revenue in line with expectations, adjusted EBITDA ahead of
consensus and the move to a net cash position.
The main detractors over the period were:
* Iomart Group (-154 bps CTR) ,
reflecting a continuation of revenue pressure in its legacy self-managed
infrastructure division, which had led to a profit downgrade in the period.
* Fintel (-78 bps CTR) , despite
encouraging business momentum (in particular SaaS revenue growth).
* Spire Healthcare Group (-72 bps CTR)
, following a downgrade to 2026 profit expectations due to heightened
uncertainty around the volume of NHS commissioning and below-inflation tariff
increases proposed by NHS England.
* CTR (Contribution To Return) for an investment in the Company’s portfolio
is the daily total return multiplied by the daily weight, compounded over the
reporting period.
3) Portfolio Activity
New investments
We made three new investments during the period:
* ActiveOps , a leading enterprise
software provider specialising in back-office management which is led by a
high-quality Executive Chair, operating in a structurally expanding market
with a dominant position, and benefitting from attractive SaaS financial
characteristics, including c.90% recurring revenue, double-digit organic
growth, and strong cash flow generation.
* Watkin Jones , a specialist
property development and management business focussed on the UK build-to-rent
and purpose-built student accommodation sectors. Watkin Jones deploys a
capital-light forward funding model, is well capitalised with a strong net
cash balance sheet, and is already benefitting from the gradual recovery in
development activity and the growth in its non-cyclical refurbishment and
property management offerings. The business trades at a substantial discount
to net tangible asset value and, the Manager believes, has the potential to
re-rate materially from its current Enterprise Value multiple.
* Spire Healthcare , the UK’s
largest private hospital group by revenue, which operates in a structurally
attractive UK private healthcare market, is executing on a clear strategy to
grow profit per theatre, is cutting costs materially to expand operating
margins, and is building a scaled primary care business to drive referral
income into the higher margin hospital business. Spire trades at a substantial
discount to the freehold value of its property portfolio, the value of which
could be catalysed by an ongoing Strategic Review process.
Follow-on investments
During the period, the Investment Manager made selective follow-on investments
into existing holdings where share price weakness was assessed to be
disconnected from long-term fundamentals, including Diaceutics, Costain Group,
Brooks Macdonald, Fintel and XPS Pensions Group.
Full exits
Corporate activity continued to provide opportunities to crystallise value.
We made three full exits during the period:
* Benchmark Holding s, pursuant to
a Tender Offer return of proceeds following the disposal of its Genetics
division at a 48% premium to the ex-cash equity value of the company.
* Inspired , following an all-cash
Recommended Takeover by HGGC, a US mid-market private equity firm, at 81p per
share, a c. 33% premium to the undisturbed share price and a c. 103% premium
to the 40p equity recapitalisation led by the Manager in January 2025.
* Ricardo , following the agreed
all-cash Recommended Takeover by WSP Global at a c. 70% premium versus the
90-day volume-weighted average price.
These exits followed periods of active engagement and strategic progress,
validating the Investment Manager’s assessment of intrinsic value.
4) Tender Offer and
Realisation
A significant corporate development during the period was the completion of
the Tender Offer announced in September 2025, following shareholder approval.
A total of 9,510,496 Ordinary Shares were validly tendered, representing
approximately 22% of the Company’s issued share capital. Crucially, with 78%
of shares electing to remain invested, the Continuing Pool exceeded the
minimum size condition required to continue operating under the Company’s
existing investment policy, providing a stable capital base for future growth.
Assets were allocated pro rata between the Continuing Pool and the Tender
Pool. The Tender Pool is being managed with the objective of realising assets
in an orderly and value-maximising manner, balancing liquidity considerations
with the preservation of intrinsic value.
Shareholders who tendered will receive returns of capital as assets within the
Tender Pool are realised. The Investment Manager and the Board currently
expect the realisation process to conclude by 31 October 2026, subject to
market conditions.
The Continuing Pool retains a concentrated portfolio aligned with the
Company’s long-term investment strategy, alongside a clear framework for
capital returns through ongoing discount management.
Top Five Absolute Contributors to Performance
Security Valuation 31 December 2025 £’000 Period Contribution to return (basis points)
Trufin 14,461 210
Next 15 Group 7,867 131
Tribal Group 8,086 119
Costain Group 14,944 113
Active Ops 7,824 95
Bottom Five Absolute Contributors to Performance
Security Valuation 31 December 2025 £’000 Period Contribution to return (basis points)
Iomart Group 4,386 (154)
Fintel 6,779 (78)
Spire Healthcare Group 2,064 (72)
Ricardo - (36)
Netcall 11,438 (31)
5) Outlook – FY 2025/26
Looking ahead, while macroeconomic and geopolitical risks remain elevated, we
believe the outlook for UK smaller companies is increasingly constructive.
Valuation dispersion between UK equities and global peers remains historically
wide, and within the UK market, smaller companies continue to trade at a
substantial discount to larger capitalisation stocks and private market
transaction multiples. We believe this valuation gap is unsustainable over the
medium term.
As highlighted in broader public equity outlook work, several potential
catalysts could support improved returns in 2026, including easing monetary
policy, stabilising inflation, improving liquidity conditions and a gradual
reopening of equity capital markets. Furthermore, with the uncertainties of
the 2025 Budget now resolved, we expect corporate confidence to return,
allowing management teams to refocus on growth and capital allocation rather
than regulatory preservation. Even modest capital reallocation into UK
equities could have a meaningful impact on valuations given the prolonged
period of under-ownership.
Corporate activity remains a key theme. Strategic and private equity buyers
continue to recognise the value opportunity in UK smaller companies, providing
tangible routes to value realisation that do not rely on public market
re-rating.
Importantly, the Company’s investment cases do not depend on a broad market
recovery. The portfolio is constructed around company-specific value creation,
supported by strong fundamentals, clear strategic drivers and active
engagement. Any improvement in market sentiment represents upside optionality
rather than a prerequisite for attractive returns.
The Investment Manager remains focused on executing its high-conviction,
bottom-up strategy and believes the Continuing Pool is well positioned to
deliver attractive long - term returns for shareholders.
Top 10 Investee Company Review
(as at 31 December 2025)
Company Investment Thesis Developments
Costain Gorup * UK infrastructure delivery partner with particularly strong franchise presence across Rail and Water (secular growth markets). * Continued orderbook momentum, particularly winning AMP8 framework agreements in the Water sector.
* Significantly better capitalised versus history, with a substantially de-risked contracting model. * H1 results demonstrated the successful mix-shift toward higher-margin consultancy revenue.
* Embedded consultancy offering delivering material margin upside above and beyond project delivery. * Maintained strong net cash position, supporting the reinstatement of dividends.
Trufin * Provider of financing, payment and video game publishing software and services. * Multiple forecast upgrades driven by exceptional performance in the Playstack division.
* Significant latent value when appraised on a sum-of-the-parts basis. * Successful launches of Balatro and Abiotic Factor drove revenue significantly ahead of market expectations.
Brooks Macdonald * UK focused wealth management platform; structural growth given continuing transition to self-investment. * Completed the disposal of its non-core international division, simplifying the group structure.
* Opportunity to leverage operational investments to grow margin and continue strong cash flow generation. * Completed migration from AIM to the Main Market to broaden investor access.
* A consolidating market; opportunity for Brooks as both consolidator and potential target. * First net organic inflow period in 3 years (Q4 Calendar Year 2025).
Everplay Group * Independent video game publisher and developer. * Reported interim results demonstrating growth in back catalogue revenue, helping offset softer new release schedules across the broader industry.
* Earnings significantly underpinned by back catalogue sales (e.g. Worms franchise).
* Significant founder ownership and experienced management team.
Netcall * Provider of AI-driven process automation and customer engagement solutions. * FY25 trading update demonstrated double-digit organic growth driven by Cloud ACV.
* Structural tailwinds driving adoption of process automation and “Liberty Cloud” platform. * Increasing adoption of AI capabilities within the Liberty platform by existing customer base.
* High levels of revenue visibility due to contracted revenues and >100% Net Revenue Retention.
Diaceutics * Commercialisation data and service provider for the global pharmaceutical industry. * Reported >20% organic revenue growth and EBITDA ahead of expectations for 2025.
* High quality, recurring revenue model based on proprietary data and platform technology. * Continued contract wins with top-tier global pharma clients, with 18 of the top 20 global pharma companies now clients.
* Structural growth in precision medicine requires better diagnostic testing, directly benefiting Diaceutics.
The Property Franchise Group * Structurally growing UK residential lettings market leader. * Analyst upgrades through 2025, reflecting growth in management service fees and demonstrating resilience against a stagnant sales market.
* Exceptional quality of earnings due to franchisees’ bias towards lettings revenues and management service fees.
* Capital light and highly cash generative model supporting progressive dividends.
XPS Pensions Group * Leading ‘challenger’ brand in the pensions consulting and administration market. * Delivered strong interim results with c.13% year-on-year revenue growth.
* Highly defensive with high degree of revenue visibility and inflation pass-through ability. * Continued demand for advisory services driven by gilt volatility and “McCloud Remedy” regulations.
* Beneficiary of regulatory change and increased demand for advisory services. * Strong cash generation supporting both organic investment and dividends.
Tribal Group * Global provider of student information systems to the education sector. * Double digit ARR growth in FY25 and Adjusted EBITDA ahead of consensus, driving a share price re-rating.
* Transitioned business model to Software as a Service (“SaaS”), improving quality of earnings vs. history. * Substantially improved net cash position reduces balance sheet risk.
* Significant medium-term growth tailwind as legacy contracts roll off.
Next 15 Group * Tech-enabled growth consultancy with a focus on data and digital marketing. * Completed the sale of non-core assets (including the Beyond unit), reinforcing strategic focus on high-growth segments.
* Trades at a significant valuation discount relative to its earnings growth and cash generation profile. * Disciplined cost management has protected margins during a period of slower client spend.
* Potential value realisation from portfolio divestment.
Portfolio as at 31 December 2025
Company Sector Classification Date of first investment Cost £’000 Valuation £’000 % of invested portfolio at 31 December 2025 % of invested portfolio at 30 June 2025 % of net assets
Costain Group Industrial Goods & Services Jun 2024 8,664 14,944 10.5% 11.0% 10.0%
TruFin Technology Jul 2023 7,805 14,461 10.2% 6.5% 9.7%
Brooks Macdonald Financial Services Jun 2016 16,327 14,068 9.9% 10.5% 9.4%
Everplay Group Technology Dec 2023 8,481 12,888 9.1% 9.5% 8.6%
Netcall Technology Mar 2023 10,298 11,438 8.1% 7.3% 7.7%
Diaceutics Healthcare Sep 2024 11,088 10,520 7.4% 3.6% 7.0%
The Property Franchise Group Business Services Oct 2023 6,141 9,886 7.0% 7.8% 6.6%
XPS Pensions Group Business Services Jul 2019 3,305 8,087 5.7% 5.6% 5.4%
Tribal Group Technology Dec 2014 8,260 8,086 5.7% 2.2% 5.4%
Next 15 Group Business Services Oct 2024 8,218 7,867 5.5% 4.0% 5.3%
ActiveOps Technology Jul 2025 6,428 7,824 5.5% – 5.2%
Fintel Business Services Oct 2020 6,448 6,779 4.8% 4.1% 4.5%
Watkin Jones Industrial Goods & Services Aug 2025 4,251 4,466 3.1% – 3.0%
Iomart Group Technology Mar 2022 26,451 4,386 3.1% 3.0% 3.0%
Halfords Group Consumer Jun 2024 4,533 4,251 3.0% 3.5% 2.8%
Spire Healthcare Group Healthcare Sep 2025 2,964 2,064 1.5% – 1.5%
R&Q Insurance* Financial Services Jun 2022 6,816 – 0.0% 0.0% 0.0%
Total investments 142,015 95.1%
Cash 7,358 4.9%
Net current liabilities (117) 0.0%
Total shareholders' funds 149,256 100.0%
* in liquidation
Ken Wotton
Gresham House Asset Management
19 February 2026
Statement of Directors’ Responsibilities, Going Concern, Principal Risks and
Uncertainties
Statement of Directors’ Responsibilities
The Directors confirm that to the best of their knowledge:
* the condensed set of financial statements contained within the
Half-Yearly Report has been prepared in accordance with IAS 34, ‘Interim
Financial Reporting’, and give a true and fair view of the assets,
liabilities, financial position and profit of the Company as required by
Disclosure Guidance and Transparency Rules (“DTR”) 4.2.4R;
* the Half-Yearly Report includes a fair review of the information
required by:
(a) DTR 4.2.7 of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8 of the Disclosure Guidance and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the Company during that period; and any changes in
the related party transactions described in the last Annual Report that could
do so.
This Half-Yearly Report was approved by the Board of Directors on 19 February
2026 and the above responsibility statement was signed on its behalf by
William Barlow, Chairman.
Going Concern
The Company has adequate financial resources to meet its investment
commitments and, and as a consequence, the Directors believe that the Company
is well placed to manage its business risks. After making appropriate
enquiries and due consideration of the Company’s cash balances and the
liquidity of the Company’s investment portfolio, the Directors have a
reasonable expectation that the Company has adequate available financial
resources to continue in operational existence for the foreseeable future and
accordingly have concluded that it is appropriate to continue to adopt the
going concern basis in preparing the Half-Yearly Report, consistent with
previous periods.
Principal Risks and Uncertainties
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 principal risks and uncertainties are set out on pages 20 to 22 of the
Annual Report for the year ended 30 June 2025, which is available at
www.strategicequitycapital.com
.
The Company’s principal risks and uncertainties have not changed since the
date of the Annual Report and are not expected to change for the remaining six
months of the Company’s financial year.
Statement of Comprehensive Income
for the six month period to 31 December 2025
Six month period ended 31 December 2025 unaudited Year ended 30 June 2025 audited Six month period to 31 December 2024 unaudited
Revenue return £'000 Capital return £'000 Total £'000 Revenue return £’000 Capital return £’000 Total £’000 Revenue return £'000 Capital return £'000 Total £'000
Investments
Gains/(losses) on investments held at fair value through profit or loss - 3,336 3,336 - (4,998) (4,998) - (18,649) (18,649)
- 3,336 3,336 - (4,998) (4,998) - (18,649) (18,649)
Income
Dividends 1,900 - 1,900 4,405 - 4,405 2,822 - 2,822
Interest 147 - 147 51 - 51 39 - 39
Total income 2,047 - 2,047 4,456 - 4,456 2,861 - 2,861
Expenses
Investment Manager’s fee (660) - (660) (1,256) - (1,256) (669) - (669)
Other expenses (1,246) - (1,246) (870) - (870) (447) - (447)
Total expenses (1,906) - (1,906) (2,126) - (2,126) (1,116) - (1,116)
Net return before taxation 141 3,336 3,477 2,330 (4,998) (2,668) 1,745 (18,649) (16,904)
Taxation - - - - - - - - -
Net return and total comprehensive income for the period 141 3,336 3,477 2,330 (4,998) (2,668) 1,745 (18,649) (16,904)
pence pence pence pence pence pence pence pence pence
Return per Ordinary share 0.33 7.87 8.20 5.03 (10.78) (5.75) 3.70 (39.49) (35.79)
The total column of this statement represents the Statement of Comprehensive
Income. 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 in the period.
The notes form an integral part of these Half-Yearly financial statements.
Statement of Changes in Equity
for the six month period to 31 December 2025
Share capital £'000 Share premium account £'000 Capital reserve £'000 Capital redemption reserve £’000 Revenue reserve £'000 Total £'000
For the six month period to 31 December 2025 unaudited
1 July 2025 6,353 11,300 148,996 2,897 4,607 174,153
Net return and total comprehensive income for the period - - 3,336 - 141 3,477
Dividends paid - - - - (1,830) (1,830)
Share buy-backs (476) - (26,544) 476 - (26,544)
31 December 2025 5,877 11,300 125,788 3,373 2,918 149,256
For the year to 30 June 2025 audited
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) - 2,330 (2,668)
Dividends paid - - - - (1,649) (1,649)
Share buy-backs - - (11,495) - - (11,495)
30 June 2025 6,353 11,300 148,996 2,897 4,607 174,153
For the six month period to 31 December 2024 unaudited
1 July 2024 6,353 11,300 165,489 2,897 3,926 189,965
Net return and total comprehensive income for the period - - (18,649) - 1,745 (16,904)
Dividends paid - - - - (1,648) (1,648)
Share buy-backs - - (4,680) - - (4,680)
31 December 2024 6,353 11,300 142,160 2,897 4,023 166,733
The notes form an integral part of these Half-Yearly financial statements.
Balance Sheet
as at 31 December 2025
As at 31 December 2025 unaudited £'000 As at 30 June 2025 audited £'000 As at 31 December 2024 unaudited £'000
Non-current assets
Investments held at fair value through profit or loss 142,015 164,677 164,396
Current assets
Trade and other receivables 212 203 312
Cash and cash equivalents 7,358 9,519 2,364
7,570 9,722 2,676
Total assets 149,585 174,399 167,072
Current liabilities
Trade and other payables (329) (246) (339)
Net assets 149,256 174,153 166,733
Capital and reserves
Share capital 5,877 6,353 6,353
Share premium account 11,300 11,300 11,300
Capital reserve 125,788 148,996 142,160
Capital redemption reserve 3,373 2,897 2,897
Revenue reserve 2,918 4,607 4,023
Total shareholders’ equity 149,256 174,153 166,733
pence pence pence
Net asset value per share 395.53 392.47 358.41
number number number
Ordinary shares in issue 37,735,567 44,373,800 46,520,577
The notes form an integral part of these Half-Yearly financial statements.
Statement of Cash Flows
for the six month period to 31 December 2025
Six month period to 31 December 2025 unaudited £'000 Year ended 30 June 2025 audited £’000 Six month period to 31 December 2024 unaudited £'000
Operating activities
Net return before taxation 3,477 (2,668) (16,904)
Adjustment for (gains)/losses on investments (3,336) 4,998 18,649
Operating cash flows before movements in working capital 141 2,330 1,745
Increase in receivables (9) (37) (139)
Increase/(decrease) in payables 61 (1,416) (1,323)
Purchases of portfolio investments (66,525) (55,361) (42,205)
Sales of portfolio investments 92,545 67,994 41,461
Net cash flow from operating activities 26,213 13,510 (461)
Financing activities
Equity dividends paid (1,830) (1,649) (1,648)
Shares bought back in the period (26,544)* (11,495) (4,680)
Net cash flow from financing activities (28,374) (13,144) (6,328)
(Decrease)/increase in cash and cash equivalents for the period (2,161) 366 (6,789)
Cash and cash equivalents at start of period 9,519 9,153 9,153
Cash and cash equivalents at period end 7,358 9,519 2,364
The notes form an integral part of these Half-Yearly financial statements.
* Includes £19.3 million in relation to the Tender Offer.
Notes to the Financial Statements
1.1 Corporate information
Strategic Equity Capital plc is a public limited company incorporated and
domiciled in the United Kingdom, 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 Corporation Tax Act 2010.
1.2 Basis of preparation/statement of compliance
The Half-Yearly financial statements of the Company have been prepared on a
going concern basis and in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006. They do not
include all the information required for a full report and financial
statements and should be read in conjunction with the report and financial
statements of the Company for the year ended 30 June 2025, which have been
prepared in accordance with IFRS. Where presentational guidance set out in the
Statement of Recommended Practice (“SORP”) for investment trust companies
and venture capital trusts issued by the AIC 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 condensed Half-Yearly financial statements do not comprise statutory
accounts within the meaning of Section 434 of the Companies Act 2006. The
financial statements for the six month periods to 31 December 2025 and 31
December 2024 have not been either audited or reviewed by the Company’s
Auditor. Information for the year ended 30 June 2025 has been extracted from
the latest published Annual Report and financial statements, which have been
filed with the Registrar of Companies. The report of the Auditor on those
financial statements was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under Section 498 of the Companies
Act 2006.
Convention
The financial statements are presented in Sterling, being the currency of the
Primary Economic Environment in which the Company operates, rounded to the
nearest thousand.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, being investment business.
1.3 Accounting policies
The accounting policies, presentation and method of computation used in these
condensed financial statements are consistent with those used in the
preparation of the financial statements for the year ended 30 June 2025.
1.4 New standards and interpretations not applied
Implementation of changes and accounting standards in the financial periods,
as outlined in the financial statements for the year ended 30 June 2025, had
no significant effect on the accounting or reporting of the Company.
2. Income
Six month period to 31 December 2025 unaudited Year ended 30 June 2025 audited Six month period to 31 December 2024 unaudited
£'000 £'000 £'000
Income from investments
UK dividend income 1,900 4,405 2,822
Other operating income
Liquidity interest and other income 147 51 39
Total income 2,047 4,456 2,861
3. Other expenses
Six month period to 31 December 2025 unaudited Year ended 30 June 2025 audited Six month period to 31 December 2024 unaudited
£'000 £'000 £'000
Secretarial services 91 183 92
Auditor’s remuneration for:
Audit services 22 42 20
Directors’ remuneration 86 171 86
Other expenses* 1,047 474 249
1,246 870 447
* Other expenses include £655,000 of costs in relation to the 2025 Tender
Offer.
4. Dividend
The Company paid a final dividend of 4.25p in respect of the year ended 30
June 2025 (30 June 2024: 3.50p) per Ordinary share on 43,080,800 (30 June
2024: 47,080,561) shares, amounting to £1,830,000 (30 June 2024:
£1,649,000). The dividend was paid on 26 November 2025 to Shareholders on the
register as at 24 October 2025. In line with previous years, the Board does
not intend to propose an interim dividend.
5. Return per Ordinary share
Six month period to 31 December 2025 Year ended 30 June 2025 Six month period to 31 December 2024
Revenue return pence Capital return pence Total pence Revenue return pence Capital return pence Total pence Revenue return pence Capital return pence Total pence
Return per Ordinary share 0.33 7.87 8.20 5.03 (10.78) (5.75) 3.70 (39.49) (35.79)
Returns per Ordinary share are calculated based on 42,364,104 (30 June 2025:
46,346,499 and 31 December 2024: 47,224,964) being the weighted average number
of Ordinary shares, excluding shares held in treasury, in issue throughout the
period.
The Half Yearly Report will be posted to shareholders shortly. The Report will
also be available for download from the following website:
www.strategicequitycapital.com or
on request from the Company Secretary.
National Storage Mechanism
A copy of the Half Yearly Report will be submitted shortly to the National
Storage Mechanism and will be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of this announcement.
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