REG - STS Global I&G Trust - Final Results
Today 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260519:nRSS7776Ea&default-theme=true
RNS Number : 7776E STS Global Income & Growth Trust 19 May 2026
STS Global Income & Growth Trust plc
LEI: 549300UZ1Y7PPQYJGE19
Results for the year ended 31 March 2026
The Board of STS Global Income & Growth Trust plc (the 'Company') is
pleased to announce the Company's results for the year ended 31 March 2026.
Summary
· The Company's share price returned (2.5)% over the year, behind of
the return from the Lipper Global - Equity Global Income Index of 13.5%. The
net asset value total return was (4.6)%.
· The Company pays quarterly dividends to provide investors with a
regular income. The Board has announced a fourth quarterly dividend of 2.152p
per ordinary share which will be paid on 3 July 2026 to shareholders on the
register on 5 June 2026. The total dividend for the year will be 8.452p per
share, an increase of 1.0% from the prior year and 48.3% since the dividend
was rebased in 2021 and represents a yield of 3.8% on the closing share price
of 224p.
· A significant reduction in the Company's Ongoing Charges Ratio from
0.80% to 0.66% of net assets per annum, a fall of 18%.
Chair's Statement
This is my first annual report as your Chair, and I wish the circumstances
were more favourable. Over the year to 31 March 2026, your Company's share
price fell by 2.5% and the net asset value per share by 4.6%, against a return
from the Lipper Global - Equity Global Income Index of 13.5%. This represents
a material shortfall and is disappointing.
It is, however, important to distinguish between share price performance and
the underlying business performance of the companies in our portfolio. They
have continued to demonstrate strong fundamentals but have been out of favour
in a market environment that has rewarded very different characteristics.
At the same time, the Board has modestly increased the dividend for the year,
resulting in a yield of 3.8% for the year to 31 March 2026 reflecting our
continued focus on providing a yield that is appropriately positioned for the
sector.
My intention in this report is to set out what has happened this year, why the
Board believes the cause is identifiable and, more importantly, why we
continue to have conviction in the investment approach. I will also set out
the actions the Board has taken this year to protect shareholders' interests.
Performance
The past year has been characterised by market disruption - from the
announcement of the tariff programme in the US to the Iran conflict. Global
equity markets have produced strong returns, but these have been concentrated
in a relatively narrow group of sectors. Gains were focused in energy,
utilities, as well as businesses benefiting directly from the capital
expenditure boom in AI which are sectors that, for reasons of cyclicality,
capital intensity or unproven end-market economics, your Company does not own.
By contrast, many of the high-quality, cash-generative businesses that the
Company favours were marked down on fears relating to disruption from AI and
pressure on consumers. We believe this divergence reflects a combination of
short-term macroeconomic factors and evolving market narratives, rather than a
fundamental deterioration in the quality of the businesses we own. The
Managers' Review, which follows this statement, sets out in detail why we
believe the competitive advantages of these businesses remain intact.
The Board has spent considerable time during the year reviewing and
challenging the Manager's approach. We remain confident that the Company's
strategy is the right one for long-term value creation. Periods of
underperformance are an inevitable feature of any differentiated investment
approach. The Board's role is to ensure that such periods are properly
understood, that the strategy remains appropriate, and that it is being
executed with discipline. Based on our work this year, we are satisfied on all
three fronts.
In that context, it is worth reiterating why shareholders choose to invest in
STS Global Income & Growth Trust:
· The Company is designed to steadily grow your investment over time
through investment in a focused portfolio of high-quality global companies.
These are companies with strong returns on capital, resilient cash flows and
the ability to compound value.
· The Company targets a growing income stream. The Board remains
committed to providing shareholders with a dependable quarterly dividend, with
a current yield of 3.8%
· The Company seeks to defend shareholder value in an uncertain world.
The emphasis on resilient business models, strong balance sheets and
disciplined capital allocation is intended to provide a degree of downside
protection through economic cycles.
· The Company's discount control mechanism has worked as intended in a
year when many Investment Trusts have traded at wide and persistent discounts.
Together with share buybacks that have been modestly accretive to those who
have remained invested, providing a clear structural advantage.
Lowering the cost of ownership
One area where the Board has been able to take direct action this year is
cost. Ongoing charges have fallen from 0.80% to 0.66% of net assets, per
annum, a reduction of 18%. The saving reflects a combination of factors: the
lower management fee rates agreed with Troy Asset Management (moving from a
tiered structure to a flat fee of 0.40% of net assets); the negotiation of a
reduced fee with the registrar; and a continued drive from the Management
Engagement Committee to benchmark every material service contract. We believe
0.66% positions the Company competitively within its peer group and will
continue to look for further savings where they can be achieved without
compromising the quality of service to shareholders.
Dividend
The Board has declared a fourth interim dividend of 2.152p, bringing the total
dividend for the year to 8.452p. This represents an increase of approximately
1% on the previous year's 8.368p. On the closing share price of 224p, the
dividend represents a yield of approximately 3.8%.
In determining the dividend, the Board considered both the income generated by
the portfolio during the year and the flexibility afforded by the Company's
structure as an investment trust with a portion of the distribution funded
from capital. The Board remains focused on delivering a level of income that
is appropriate for the sector and aligned with the Company's objective, while
ensuring that this approach is sustainable over the long term.
Discount Control Mechanism (DCM) and buybacks
One of the defining features of the Company is its discount control mechanism.
During the year the Company bought back 7.8 million shares at a total cost of
£18.7 million, at an average discount of 1.2% and issued 0.6 million shares
for net proceeds of £1.5m, at an average premium of 0.9%. This ensured that
shareholders were able to access liquidity at close to net asset value, even
in a period of weaker performance.
The Board considers the DCM to be an important feature of the Company. It
provides shareholders with confidence that their ability to realise their
investment is not dependent on prevailing market sentiment. In the current
environment, where discounts elsewhere in the sector have widened, that
structural advantage has become more valuable.
Gearing
The Company's three-year multi-currency revolving credit facility of £20
million (with a £5 million accordion option) expires in September 2026. The
Board intends to seek renewal of a facility in the coming months on broadly
equivalent terms, maintaining the same level of available gearing capacity.
Shareholder engagement
I would like to thank shareholders for their continued support during a
challenging year. The Board, the Manager and I have engaged with many of you
over the period, through individual and group meetings as well as our investor
seminar. We are fortunate to have a loyal, engaged and long-term shareholder
base. The quality of that dialogue, and the perspective with which
shareholders have approached a difficult year, is something we do not take for
granted.
Outlook
While the Company is managed with a long-term horizon, the Board believes it
is worth highlighting a number of themes that are likely to shape outcomes
over the coming years.
The most striking feature of markets today is the degree to which returns have
become concentrated in a small number of sectors and companies. Such periods
can persist, sometimes for longer than seems reasonable, but history suggests
they do not endure indefinitely. At the heart of this concentration sits the
AI investment cycle, where capital expenditure on infrastructure is now
running at unprecedented levels. In the Board's view the extent to which that
spending translates into durable profits remains an open question - and one
whose answer will be an important determinant of future market leadership.
A consequence of these dynamics is that valuation dispersion across markets is
unusually wide. The gap between highly valued, capital-intensive businesses
and more established, cash-generative companies is greater than it has been
for some time. This creates both risk and opportunity, and it reinforces the
importance of valuation discipline. It also reminds us why the qualities the
Manager seeks - durable competitive advantages of the kind conferred by strong
brands, network effects and high switching costs - tend to matter most when
capital becomes harder to come by. Companies with these characteristics have
historically demonstrated resilience across cycles, and the Board expects them
to become more appreciated by investors.
Underlying all of this is a more general point about capital discipline.
Periods of abundant capital are also periods in which capital is most easily
misallocated, and the Board accordingly places significant weight on the
ability of both portfolio companies and the Manager to allocate capital
effectively, with a clear focus on long-term returns.
This has been a difficult year in terms of performance, and we do not take
that lightly. The Board, however, remains confident in the Company's strategy.
Additionally, we have taken clear steps to improve cost efficiency and
continue to focus on delivering long-term value for shareholders. Finally, I
would like to thank shareholders - for your patience, your questions, and your
continued support. The Manager and I are always available to discuss any
aspect of the Company.
Sarah Harvey
18 May 2026
Managers' Review
This 12-month period began with global equity markets falling in response to
the shock of tariff announcements by President Trump and finished amidst the
uncertainty of the Iran war. Despite these events, equity returns were decent,
led by energy, utilities and materials, as well as companies benefitting from
the artificial intelligence (AI) capital expenditure boom. These are not
sectors we favour owing to their cyclicality and capital intensity, as well as
concerns relating to the sustainability of current AI spending in the absence
of a clear path to acceptable returns on the vast sums invested.
Conversely, many of the high quality and resilient sectors we favour have
suffered over this period owing to fears relating to disruption from AI,
pressure on the consumer from rising interest rates and energy costs, and some
idiosyncratic issues. Software companies such as ADP, Paychex and Amadeus
declined, as did consumer staples companies such as Diageo and Unilever. This
polarisation of performance resulted in the Trust's share price falling by
2.5% compared to the peer group return of +13.5%. This is clearly a
disappointing result, and we apologise to shareholders for the poor return.
We think there are reasons to question the wisdom and longevity of this
divergence. The sectors currently performing are benefitting from current
events, but we question the long-term value these businesses generate in terms
of returns on capital. As an example in the energy sector, it is sobering to
note that BP is trading at the same price level as it did in 1999 - excluding
dividends, this business has not compounded capital at all in 27 years. We see
the current weakness in our holdings as temporary and believe their underlying
quality will in time reassert itself. Their competitive advantages will prove
more resilient than currently thought, and the intensity of the AI threat may
weaken should current spending moderate.
The essence of a quality-focused investment strategy is to buy companies that
can keep competitors at bay through structural advantages that make them hard
to compete against. This enables them to maintain better economics than is
normally the case in a competitive economy. Examples include network effects
(when a product or service becomes more useful as more people use it, for
example, Amadeus), switching costs (ADP, Paychex), cost advantages (Rentokil,
which can outcompete smaller competitors through the density of their
network), intangible assets such as brands (Diageo, Reckitt Benckiser,
Unilever) or patents (Novartis, Novo Nordisk), and scale efficiencies (Sysco).
These advantages are difficult to achieve and similarly difficult to disrupt.
Software is perhaps the best current example of a misunderstood sector. It is
characterised by high margins, attractive returns on capital, and often
executes a vital function for a relatively low outlay relative to a company's
overall cost base. The sector has recently come under intense pressure owing
to the perceived threat of AI disruption. While acknowledging that AI is a
transformational technology, we believe the threat is currently being overly
discounted by investors.
Paychex and ADP, two of the companies we own, handle critical workflows
relating to payroll, tax, benefits and insurance. The software responsible
must be exactly correct every time, and meet regulatory compliance within each
jurisdiction. This results over time in a vast pool of proprietary data which
can shape an in-house AI capability. These companies are not just selling
software but regulatory compliance, trust and certainty - attributes not
lightly given up.
Amadeus, the world's leading travel technology company, benefits similarly.
Its Global Distribution System enjoys powerful network effects between
thousands of travel agents and airlines. Its Passenger Service System is the
operational core of a full-service airline, handling everything from
reservations to frequent flyer programmes. To replace this software is akin to
transplanting a nervous system whilst continuing to fly millions of passengers
- not something undertaken lightly.
Beyond individual business models, there is the overarching issue of potential
over-investment in AI infrastructure (semi-conductors, data centres,
networking and connectors and power sources). The largest technology companies
are expected to spend approximately $650bn in 2026 on build-out. Yet,
excluding the hyperscalers, the software companies underpinning this hardware
spend (e.g. OpenAI, Anthropic, DeepSeek) are generating a fraction of the
revenues needed to sustain it. The capex-to-sales ratio for this industry,
even using optimistic estimates, implies companies making large losses. This
is simply unsustainable. Either revenues and profits must become apparent
soon, or expenditure will be curtailed. The implications of such a potential
misallocation of capital cannot be overstated. Should AI spending fall, it
will likely hurt the companies that have hitherto benefitted and may well
allow software companies to recover.
While our underperformance is disappointing, it leaves the portfolio
representing excellent value. The portfolio generates a free cash flow yield
of 5.9%, a material premium to the MSCI World Index at 4.0%, despite a
significantly higher return on equity (30.3% vs 15.8%). It is impossible to
know when the contrasting fortunes of our holdings and the wider market may
change, but this combination of quality and value should be recognised in
time.
Portfolio
The top performers over the year were British American Tobacco, Rentokil,
Novartis, CME Group and Admiral Group.
British American Tobacco appreciated by 46%, as investors continued to reward
its transformation from a tobacco company into a nicotine consumer products
business. The valuation remains attractive, combined with consistent free cash
flow growth and a healthy dividend.
Rentokil also performed well; its US integration challenges following the
Terminix acquisition are now improving, with operations returning to growth
and retention metrics strengthening.
Novartis delivered a return of 26% as investors began to appreciate the
consistency of its free cash flow growth and, trading on a 6% free cash flow
yield, the shares remain good value.
CME Group benefitted from increased market volatility and the structural
growth in the use of futures and options.
Admiral Group demonstrated excellent pricing discipline during the recent
insurance cycle, taking market share from less nimble competitors. It is a
high-quality company with a respected management team and a strong record of
execution. This mix of quality, consistency, and balanced income and capital
returns make Admiral an attractive investment for the Trust.
The largest negative contributors were Paychex, Amadeus IT Group, ADP, Relx
and Novo Nordisk.
Except for Novo Nordisk, the falls were driven by investor fears about AI
disruption rather than any real deterioration in these businesses.
Paychex and ADP fell on concerns that AI could disrupt both their business
models and labour markets. We believe investors underestimate the strength of
their competitive advantages. Both companies have also proved resilient
through past recessions, enabling them to compound capital and income reliably
over time. In our view, both stocks offer good value.
Amadeus, as stated above, is deeply integrated into the global travel
industry's operations and would be difficult to displace, which in our view
makes it relatively resilient to AI-related disruption. The recent weakness in
the shares likely reflects the pressures facing the airline industry because
of the conflict in Iran rather than any change in the company's fundamentals.
We view this as temporary and continue to see long-term growth in global
travel as an attractive driver for Amadeus.
Relx provides specialist data and analytics to professionals in law,
healthcare and financial services. We believe AI will strengthen rather than
weaken its position in these demanding, accuracy-critical industries.
Novo Nordisk is different - its shares fell following genuine setbacks,
including a disappointing drug trial and it lost US market share to Eli Lilly.
However, at 78% below peak and trading on ten times earnings, we believe the
selloff is vastly overdone for a company at the forefront of treating obesity
and diabetes.
We established four new investments during the year.
Nike was purchased during the Liberation Day sell-off. The company has
suffered from well-documented strategic missteps under prior management, but
new CEO Elliott Hill is executing a credible turnaround - rebalancing
channels, restoring bold marketing, and reconnecting with sport. The core
brand remains intact. The shares are still down over 70% from peak.
Sysco, the dominant US food distributor, was initiated as consumer weakness in
the restaurant sector drove the valuation to attractive levels. The recently
announced acquisition of Restaurant Depot is strategically sound but adds
leverage; we are evaluating.
IG Group is a business we have owned before, exiting previously over capital
allocation concerns. New CEO Breon Corcoran has refocused the business
effectively, and despite strong performance since October 2023, the shares
remain compelling.
Novo Nordisk was our most recent addition. The shares trade at 10x forward
earnings despite the company's strong position in GLP-1 weight loss drugs and
global diabetes. The oral formulation of Wegovy launched in January 2026 at
$149/month, and with a net cash balance sheet and an active buyback underway,
we see a high-quality franchise at a compelling valuation.
Outlook
Markets are navigating an unusually complex environment. The US and Israeli
military engagement with Iran has disrupted shipping through the Strait of
Hormuz, triggering an oil price spike that has materially shifted the
inflation and interest rate outlook. Where markets had previously anticipated
several rate cuts, expectations have now narrowed considerably. History is
clear: sustained elevated oil prices ultimately compress demand and act as a
tax on growth. We believe the oil spike will prove relatively short-lived,
either because of an end to hostilities or an economic slowdown, though
significant damage can be inflicted in the interim.
We would caution against viewing current events in isolation. This crisis is
unfolding against the backdrop of a profound structural shift in the global
economy. The post-Cold War dividend of globalisation, cheap labour, low
inflation and US-guaranteed security is unwinding. In its place, we see a
world that is more fragmented, more inflationary, and requiring substantial
investment in defence and supply chain resilience, at a time when government
balance sheets are already stretched. US Treasury yields rose during the Iran
crisis rather than falling - a notable departure from historical behaviour -
while the dollar's safe-haven premium has diminished. We interpret this as
evidence that the US is losing its position as the favoured destination for
global capital.
Alongside geopolitical turbulence, we believe the AI capital expenditure cycle
is showing signs of strain. The hyperscalers have seen free cash flow decline
sharply as debt-financed infrastructure spending accelerates, while large
language models are proliferating and, in our view, may become commoditised.
Should AI-related capital expenditure slow, the reversal could weigh
meaningfully on markets significantly supported by this theme. US equity
valuations remain a further concern - the Shiller PE ratio stood at 37.2x at
end of March 2026, while market capitalisation relative to GDP reached 2.18x,
levels historically associated with disappointing long-term returns.
Recent portfolio performance has lagged the peer group, reflecting structural
underweights to energy, near-term weakness in consumer staples, and AI-related
tailwinds to IT hardware companies and headwinds to some software holdings. We
view these as transitory pressures rather than a permanent feature of markets.
We retain high conviction in the quality and compounding capacity of our
underlying businesses. The portfolio trades on a 5.9% free cash flow yield,
attractive in absolute terms and relative to the broader market, and we
believe it is well positioned to demonstrate resilience should the risks
outlined above crystallise.
James Harries and Tomasz Boniek
18 May 2026
For further information contact:
Troy Asset Management
Investment Manager
Tel: 0207 499 4030
Juniper Partners Limited
Company Secretary
Tel: 0131 378 0500
Responsibility statement
The directors confirm that to the best of their knowledge:
· the financial statements, prepared in accordance with United
Kingdom Generally Accepted Accounting Practice, including FRS 102 'The
Financial Reporting Standard applicable in the UK and Republic of Ireland',
give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Company;
· the annual report, including the strategic report, includes a fair
review of the development and performance of the business and the position of
the Company, together with a description of the principal and emerging risks
and uncertainties that it faces; and
· the annual report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the Company's performance, business model and strategy.
Principal risks and uncertainties
The Company's business model is longstanding and resilient to most of the
short-term uncertainties that it faces, which the Board believes are
effectively mitigated by its internal controls and the oversight of the
Manager, as described in the table below. The principal and emerging risks and
uncertainties are therefore largely longer term and driven by the inherent
uncertainties of investing in global equity markets.
The Board believes that it is able to respond to these longer-term risks and
uncertainties with effective mitigation so that both the potential impact and
the likelihood of these seriously affecting shareholders' interests are
materially reduced.
Operational and management risks along with a review of potential emerging
risks, are regularly monitored at Board meetings and the Board's planned
mitigation measures for the principal and emerging risks are described in the
table below. As part of its annual strategy meeting, the Board carries out a
robust assessment of the principal and emerging risks facing the Company,
including those that would threaten its business model, future performance,
solvency or liquidity.
The Board maintains a risk register and also carries out a detailed risk
analysis as part of its annual strategy meeting. The Board has identified the
following principal and emerging risks to the Company:
Principal risks Mitigation and management
Investment strategy and objectives - Pursuing The Board formally reviews the Company's objective and strategy on an annual
basis, or more regularly if appropriate. The Board also receives updates at
an investment strategy to fulfil the Company's each Board meeting from the Manager with regards to the portfolio and its
performance; receives broker updates on the market; and is updated on the
objective which the market perceives to be make-up and movements in the shareholder register. In addition, the Company
operates a discount control mechanism; the marketing and distribution activity
unattractive or inappropriate may lead to is actively reviewed; and the Board and Manager proactively engage with
shareholders on an ongoing basis.
reduced returns for shareholders and, as a
result, the Company may become unattractive
to investors, leading to decreased demand for
its shares and a widening discount.
Investment management - If the longer-term performance of the investment The Board manages the risk of investment underperformance by relying on the
portfolio does not deliver income and capital returns in line with the Manager's stock selection skills within a framework of diversification and
investment objective and/ or consistently underperforms market expectations, other investment restrictions and guidelines.
the Company may become unattractive to investors.
The Board monitors the implementation and results of the investment process
with the Manager (who attends all Board meetings) and reviews data that shows
statistical measures of the Company's risk profile. Should investment
underperformance be sustained despite the mitigation measures taken by the
Manager, the Board would assess the cause and be able to take appropriate
action to manage this risk.
Macro-economic and market risk - The Company's portfolio is invested in listed The Board receives regular updates on the Company's portfolio and the
equities and is therefore exposed to events or developments which can affect investment environment in which the Manager is operating. An explanation of
the general level of share prices, including inflation or deflation, economic the different components of market risk and how they are individually managed
recessions and movement in interest rates and currencies which could cause is contained in note 18 to the financial statements on pages 60 to 63.
losses within the portfolio and increasing finance and operational costs of
the Company.
Gearing and leverage risk - The Company may borrow money for investment The Company's gearing is maintained at a conservative and manageable level.
purposes. While this has the potential to enhance investment returns in rising All borrowing facilities require prior approval of the Board and actual
markets, in falling markets the impact could be detrimental to performance. If borrowing levels are discussed by the Board and Manager at every meeting.
borrowing facilities are not renewed, the Company may have to sell investments Details of the Company's current borrowings and unused facilities can be found
to repay borrowings. in note 12 to the financial statements on page 58. The Company's investments
are in quoted securities that are readily realisable and the Board regularly
reviews the liquidity level of the portfolio in order to assess how quickly,
if necessary, the borrowings could be repaid. The Board, through the Company
Secretary, maintains an open and constructive dialogue with the Company's
lenders to ensure that any renewal of the facilities is co-ordinated well in
advance of the expiration of any existing facilities.
Discount risk - The discount/premium at which the Company's shares trade The Company operates a discount control mechanism which aims to ensure, in
relative to its net asset value can fluctuate. The risk of a widening discount normal market conditions, the Company's shares trade, on a consistent basis,
is that it may undermine investor confidence in the Company. at or very close to net asset value. The Board reviews the operation of the
discount control mechanism at each Board meeting and maintains a regular
dialogue with Juniper Partners (which implements the policy on behalf of the
Board) in respect of any issues or buybacks under the policy.
Operational risk - The Company is dependent on third parties for the provision The Board carries out an annual evaluation of its service providers and gives
of all services and systems. Any fraud, control failures, cyber threats, regular feedback to the Manager and Company Secretary through the Management
business continuity issues at, or poor service from, these third parties could Engagement Committee. The Board receives and reviews control reports from all
result in financial loss or reputational damage to the Company. service providers where appropriate. Periodically, the Board requests
representatives from third party service providers to attend Board meetings to
give the Board the opportunity to discuss the controls that are in place
directly with the third-party providers.
Accounting, legal and regulatory -In order to continue to qualify as an The Board considers that, given the regular oversight of this risk carried out
investment trust, the Company must comply with the requirements of section by the Company Secretary and reviewed by the Board, the likelihood of this
1158 of the Corporation Tax Act 2010. Breaches of the UK Listing Rules, the risk occurring is minimal. The Audit and Risk Committee regularly reviews the
Companies Act or other regulations with which the Company is required to eligibility conditions and the Company's compliance against each, including
comply, could lead to a number of detrimental outcomes. the minimum dividend requirements and shareholder composition for close
company status.
The Board receives reports from the Manager and Juniper Partners in its
capacity as AIFM and Company Secretary to enable it to ensure compliance with
all applicable rules.
Environmental, social and governance ('ESG') risk - There is increasing The investment process is focused on ESG issues and, as set out on pages 12
awareness of the challenges and emerging risks posed by climate change and the and 13 of the annual report, this includes an assessment of the potential
importance and impact of other ESG issues. impact of climate change. Overall the specific potential effects of climate
change are difficult, if not impossible to predict and the Board and Manager
continue to monitor material physical and transition risks and opportunities
as part of the investment process.
Geopolitical risk - The impact of geopolitical events could result in losses Geopolitical risks have always been an input into the investment process. The
to the Company. ongoing conflicts in Ukraine and the Middle East have affected global trade
and contributed to volatility in asset prices. The Board seeks to mitigate
this risk through maintaining a broadly diversified global equity portfolio
with appropriate asset and geographical exposure. The Board and the Manager
continue to monitor the ongoing heightened geopolitical risk and are in
regular communication on emerging matters which may impact on the portfolio.
Following the ongoing assessment of the principal and emerging risks facing
the Company, and its current position, the Board is confident that the Company
will be able to continue in operation and that the processes of internal
control that the Company has adopted and oversight by the Manager and the
Company Secretary continues to be effective.
Going Concern
The Company's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chairman's
statement, Manager's review, Strategic report and the Report of the directors
in the annual report.
The Company has a three-year multi-currency revolving credit facility for £20
million, with an additional £5 million accordion option, which expires in
September 2026. As at 31 March 2026 £15.1 million had been drawn under this
facility in the following currencies: £1.5 million, €4.5 million and
US$12.75 million. The Company has adequate financial resources in the form of
readily realisable listed securities and as a result the directors assess that
the Company is able to continue in operational existence without the
facilities.
In accordance with the 2019 AIC Code of Corporate Governance, the directors
have undertaken a rigorous review of the Company's ability to continue as a
going concern. The Company's assets consist of a diverse portfolio of listed
equity shares which, in most circumstances, are realisable within a very short
timescale. The directors are mindful of the principal and emerging risks and
uncertainties disclosed on pages 16 to 18 of the annual report and also
considered the potential impact of increased tariffs. They have reviewed
revenue forecasts (adjusted for various sensitivities) and they believe that
the Company has adequate financial resources and a suitably liquid investment
portfolio to continue its operational existence for the foreseeable future,
and at least 12 months from the date the financial statements are authorised
for issue.
The Statement of comprehensive income, Statement of financial position,
Statement of changes in equity and Statement of cash flow follow.
Statement of comprehensive income
Year to 31 March 2026 Year to 31 March 2025
Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000
Net (losses)/gains on investments - (18,572) (18,572) - 22,547 22,547
Net currency (losses)/gains (3) 83 80 (10) 275 265
Income 9,792 494 10,286 10,796 - 10,796
Investment management fee (470) (872) (1,342) (397) (738) (1,135)
Other (683) - (683) (710) - (710)
expenses
Net return before finance costs and
taxation 8,636 (18,867) (10,231) 9,679 22,084 31,763
Finance (289) (536) (825) (347) (644) (991)
costs
Net return on ordinary activities before
taxation 8,347 (19,403) (11,056) 9,332 21,440 30,772
Taxation on ordinary activities (728) - (728) (672) - (672)
Net return attributable to ordinary
shareholders 7,619 (19,403) (11,784) 8,660 21,440 30,100
Net return per ordinary
share 6.49p (16.52)p (10.03)p 6.74p 16.68p 23.42p
The total columns of this statement are the profit and loss accounts of the
Company.
The revenue and capital items are presented in accordance with the Association
of Investment Companies ('AIC') Statement of Recommended Practice (SORP 2022).
All revenue and capital items in the above statement derive from continuing
operations.
The Company does not have any other comprehensive income and hence net return
attributable to ordinary shareholders, as disclosed above, is the same as the
Company's total comprehensive income.
Statement of financial position
As at 31 March 2026 As at 31 March 2025
£000 £000 £000 £000
Non-current assets
Investments held at fair value through profit or loss 265,617 308,024
Current assets
Trade and other receivables 1,263 1,283
Cash and cash equivalents 3,274 1,471
4,537 2,754
Current liabilities
Bank loans (15,076) (15,138)
Trade payables (631) (1,095)
Total current liabilities (15,707) (16,233)
Net current liabilities (11,170) (13,479)
Total net assets 254,447 294,545
Capital and reserves
Called up share capital 1,752 1,752
Capital redemption reserve 78 78
Share premium account 148,506 148,245
Special distributable reserve - 1,163
Capital reserve 101,386 137,983
Revenue reserve 2,725 5,324
Total shareholders' funds 254,447 294,545
Net asset value per ordinary share 223.18p 243.10p
Statement of changes in equity
Called up share Capital redemption Share premium account Special distributable
For the year ended capital reserve reserve* Capital reserve* Revenue reserve* Total
31 March 2026 £000 £000 £000 £000 £000 £000 £000
As at 1 April 2025 1,752 78 148,245 1,163 137,983 5,324 294,545
Net return
attributable to
shareholders - - - - (19,403) 7,619 (11,784)
Shares issued from
treasury - - 261 1,264 - - 1,525
Shares bought back
into treasury - - - (2,427) (16,275) - (18,702)
Dividends paid - - - - (919) (10,218) (11,137)
As at 31 March 2026 1,752 78 148,506 - 101,386 2,725 254,447
For the year ended Total
Called up share Capital redemption reserve Share premium account Special distributable
capital reserve* Capital Revenue
reserve* reserve*
31 March 2025 £000 £000 £000 £000 £000 £000 £000
As at 1 April 2024 1,752 78 148,249 45,033 116,543 2,698 314,353
Net return
attributable to
shareholders - - - - 21,440 8,660 30,100
Costs in relation to
the issue of shares - - (4) - - - (4)
Shares bought back
into treasury - - - (43,870) - - (43,870)
Dividends paid - - - - - (6,034) (6,034)
As at 31 March 2025 1,752 78 148,245 1,163 137,983 5,324 294,545
* These reserves are distributable with the exception of the unrealised
portion of the capital reserve, which is non-distributable.
Statement of cash flow
Year ended 31 March 2026 Year ended 31 March 2025
£000 £000
Cash flows from operating activities
Net return on ordinary activities before taxation (11,056) 30,772
Adjustment to profit for non-cash items:
Losses/(gains) on investments 18,572 (22,547)
Finance costs 825 991
Exchange movement on bank borrowings (62) (311)
Dividend income (10,255) (10,765)
Deposit interest (31) (31)
Adjustments for working capital and other movements:
Decrease/(increase) in receivables 59 (7)
(Decrease)/increase in payables (319) 398
Purchase of investments* (71,517) (107,343)
Sales of investments* 95,171 146,467
Adjustments for cash items:
Dividend income received 10,600 10,677
Deposit interest received 32 31
Cash from operations 32,019 48,332
Overseas withholding tax (954) (758)
Net cash flows from operating activities 31,065 47,574
Cash flows from financing activities
Repurchase of shares (18,832) (43,961)
Issue of ordinary share capital 1,525 222
Equity dividends paid (11,137) (7,770)
Interest paid on borrowings (818) (971)
Net cash flows from financing activities (29,262) (52,480)
Net increase/(decrease) in cash and cash equivalents 1,803 (4,906)
Cash and cash equivalents at the start of the year 1,471 6,377
Cash and cash equivalents at the end of the year 3,274 1,471
(*) Receipts from the sale of, and payments to acquire, investment securities
have been classified as components of cash flows from operating activities
because they form part of the Company's dealing operations.
Notes:
1. Significant accounting policies
The financial statements are prepared in accordance with the Companies Act
2006, United Kingdom Generally Accepted Accounting Practice (Accounting
Standards 'UK GAAP') including Financial Reporting Standard (FRS) 102 'The
Financial Reporting Standard applicable in the UK and Republic of Ireland' and
the Statement of Recommended Practice 'Financial Statements of Investment
Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the
Association of Investment Companies in July 2022. All of the Company's
operations are of a continuing nature.
The financial statements have been prepared on a going concern basis under the
historical cost convention, as modified by the revaluation of investments held
at fair value through profit or loss. In preparing these financial statements
the directors have considered the impact of climate change on the value of the
listed investments that the Company holds. As the portfolio consists of listed
equities, which are valued using quoted bid prices for investments in an
active market, the fair value reflects the market participants' view of
climate change risk.
The Company's assets consist of a diverse portfolio of listed equity shares
which, in most circumstances, are realisable within a very short timescale.
The directors have reviewed revenue forecasts and they believe that the
Company has adequate financial resources to continue its operational existence
for the foreseeable future, and at least 12 months from the date the financial
statements are authorised for issue.
The principal accounting policies are set out in Note 1 to the annual report.
These policies have been applied consistently throughout the current and prior
year.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. There are no critical
accounting estimates or judgements.
Functional currency - the Company is required to determine a functional
currency, being the currency in which the Company predominately operates. The
Board has determined that sterling is the Company's functional currency, which
is also the currency in which these financial statements are prepared. This is
also the currency in which all expenses and dividends are paid in.
2. Returns and net asset value
Year to 31 March 2026 Year to 31 March 2025
Revenue return (£000) 7,619 8,660
Capital return (£000) (19,403) 21,440
Total (£000) (11,784) 30,100
Weighted average number of ordinary shares in issue 117,443,275 128,565,700
Revenue return per ordinary share 6.49p 6.74p
Capital return per ordinary share (16.52)p 16.68p
Total return per ordinary share (10.03)p 23.42p
Net asset value per share
Net assets attributable to shareholders (£000) 254,447 294,545
Number of shares in issue at the year end 114,010,415 121,161,415
Net asset value per share 223.18p 243.10p
3. Dividends
Year to 31 March 2026 Year to 31 March 2025
£000 £000
First interim dividend of 2.10p for the year ended 31 March 2026 (2025: 2,458 2,029
1.586p)
Second interim dividend of 2.10p for the year ended 31 March 2026 (2025: 2,435 1,973
1.586p)
Third interim dividend of 2.10p for the year ended 31 March 2026 (2025: 2,394 1,920
1.586p)
Proposed fourth interim dividend of 2.152p for the year ended 31 March 2026 2,417 4,337
(2025: 3.61p)
9,704 10,259
The distributable reserves as at 31 March 2026 are £100,934,000, of this
£4,811,000 will be used to fund the third and fourth interim dividends. The
amount reflected above for the cost of the proposed fourth interim dividend
for 2026 is based on 112,300,415 ordinary shares, being the number of ordinary
shares in issue excluding those held in treasury at the date of this report.
The articles of association of the Company permit dividends to be paid out of
capital.
4. Investments at fair value
Under FRS 102 'The Financial Reporting Standard applicable in the UK and
Republic of Ireland', an entity is required to classify fair value
measurements using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy shall
have the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayments, credit risk, etc); or
Level 3: significant unobservable inputs (including the Company's own
assumptions in determining the fair value of investments). The financial
assets measured at fair value through profit or loss are grouped into the fair
value hierarchy as follows:
Level 1 Level 2 Level 3 Total
At 31 March 2026 £000 £000 £000 £000
Financial assets at fair value through profit or loss
Quoted equities 265,617 - - 265,617
Net fair value 265,617 - - 265,617
Level 1 Level 2 Level 3 Total
At 31 March 2025 £000 £000 £000 £000
Financial assets at fair value through profit or loss
Quoted equities 308,024 - - 308,024
Net fair value 308,024 - - 308,024
5. Share capital
There were 7,776,000 shares bought back during the year to 31 March 2026 at a
cost of £18,702,000 (2025: 19,356,000 shares at a cost of £43,870,000).
625,000 shares were issued from treasury in the year for net proceeds of
£1,525,000 (2025: no shares were issued). The share premium represents the
surplus amount over the nominal value of the issued share capital, net of any
related issuance costs.
6. Related party transactions
With the exception of the management and secretarial fees, directors' fees and
directors' shareholdings (disclosed on page 35 of the annual report), there
have been no related party transactions during the year, or in the prior year.
The management fee payable in respect of the year ended 31 March 2026 was
£1,342,000 (2025: £1,135,000), of which £351,000 (2025: £694,000) was
outstanding at the year-end. The secretarial and directors' fees payable in
respect of the year ended 31 March 2026 are detailed in note 4. The amount
outstanding at the year end for secretarial fees and directors' fees was
£6,000 (2025: £6,000) and £nil (2025: £nil) respectively.
7. Further information
These are not statutory accounts in terms of Section 434 of the Companies Act
2006. Full audited accounts for the year to 31 March 2026 will be sent to
shareholders in May 2026 and will be available for inspection at 28 Walker
Street, Edinburgh EH3 7HR, the registered office of the Company. The full
annual report and accounts will be available on the Company's website
www.stsplc.co.uk (http://www.stsplc.co.uk) . A copy will also shortly be
available for inspection at the National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
The audited accounts for the year ended 31 March 2026 will be lodged with the
Registrar of Companies.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SFIFLAEMSEDI
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Sts Global Income & Growth Trust
See all newsREG - STS Global I&G Trust - Net Asset Value(s)
AnnouncementREG - STS Global I&G Trust - Final Results
AnnouncementREG - STS Global I&G Trust - Dividend Declaration
AnnouncementREG - STS Global I&G Trust - Transaction in Own Shares
AnnouncementREG - STS Global I&G Trust - Net Asset Value(s)
Announcement