REG-Temple Bar Investment Trust Plc: Half-year Report
20/08/2025 07:02
Temple Bar Investment Trust Plc
Temple Bar Investment Trust Plc (“Temple Bar” the “Trust” or the
“Company”) is pleased to present its unaudited half-year results for the
six months ended 30 June 2025.
This Announcement is not the Company’s Half-Year Report. It is an abridged
version of the Company’s full Half-Year Report for the six months ended 30
June 2025. The full Half-Year Report, together with a copy of this
announcement, will also shortly be available on the Company’s website:
www.templebarinvestments.co.uk where up to date information on the Company,
including daily NAV, share prices and fact sheets, can also be found. The
Company's Half-Year Report is also being published in hard copy format.
The Company's Half Year Report for the six months ended 30 June 2025 has been
submitted to the UK Listing Authority, and will shortly be available for
inspection on the National Storage Mechanism (NSM):
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
For further information please contact: Mark Pope, Frostrow Capital LLP 020
3008 4913.
Summary of Results
Six months Year to Six months
to 30 June 31 December to 30 June
2025 2024 2024
£000 £000 £000
NAV total return, with debt at fair value 1,2 14.2% 19.9% 13.1%
Share price total return 1,2 19.9% 19.1% 11.0%
FTSE All-Share Index 3 9.1% 9.5% 7.4%
Net asset value per share with debt at book value 320.6p 286.2p 275.4p
Net asset value per share with debt at fair value 1 325.4p 291.1p 280.1p
Share price 319.0p 272.0p 259.0p
Discount of share price to NAV per share with debt at fair value 1 2.0% 6.6% 7.5%
Dividends per share paid in the period 6.75p 10.75p 5.00p
Historical dividend yield 1 3.9% 4.1% 3.8%
Net gearing with debt at book value 6.6% 8.4% 8.4%
Ongoing charges 1 0.59% 0.61% 0.62%
1 Alternative Performance Measure. See glossary of terms for definition and
more information.
2 Source: Morningstar.
3 Source: Redwheel.
Temple Bar – The investment case
Temple Bar is differentiated by an investment approach that focuses on
companies whose stock market value is at a significant discount to the fair or
intrinsic value of the business. The portfolio is selected through deep
fundamental analysis by an experienced, well-resourced management team.
The Trust offers a competitive income yield and the Board and Portfolio
Manager, Redwheel, support a progressive dividend policy.
Recent returns have been strong as the undervaluation of many UK shares has
been realised either through corporate takeovers or by companies buying back
their own shares.
Despite the strong returns that the Trust has enjoyed over the last eighteen
months, Redwheel believes that the portfolio of stocks continues to look very
undervalued, and this bodes well for future returns.
Think value investing, think Temple Bar.
Chairman’s Statement
Performance
The total return of the FTSE All-Share Index was +9.1% in the half-year. I am
pleased to report that the Trust’s Net Asset Value (“NAV”) per share
total return with debt at fair value was +14.2%, and that the share price
total return was +19.9%. This reflects strong stock selection by your
Portfolio Manager in market conditions that have been supportive of their
value investing approach and a material reduction in the discount to NAV at
which the Company’s shares trade.
Performance over one and three years has also been strong, both on a relative
and absolute basis, with a NAV per share total return with debt at fair value
over the periods of +21.5% and +61.7% and a share price total return of +29.1%
and +66.1% compared to a total return from the FTSE All-Share Index of +11.6%
and +35.5%. It is also pleasing to note that the Trust ranks first in terms of
NAV total return performance in its UK Equity Income Trust peer group over
these periods. Further details regarding the Trust’s performance can be
found in the Portfolio Manager’s Report.
Discount
As at the half-year end the Trust’s share price stood at a 2.0% discount to
the NAV per share with debt at fair value compared to a discount of 6.6% at
the beginning of the period. We were again active buyers of our own shares
early in the period under review, purchasing 2,160,900 shares into Treasury in
the period at a cost of £2.2m. These buybacks address the short-term
imbalance between supply and demand for the Trust’s shares, reduce the
discount and hence share price volatility, and enhance the NAV per share for
continuing shareholders.
Since the period end, due in part to the Trust’s strong performance and also
its enhanced dividend yield, no shares have been repurchased and the Trust’s
share price has moved to a 0.4% premium to its NAV per share with debt at fair
value as at 18 August 2025. The Board will consider the issuance of new
shares, at a premium to the prevailing cum income NAV per share with debt at
fair value, if there is sufficient demand as part of its premium management
strategy.
Dividend
The Trust’s strong revenue performance was again in evidence, with an
increase in revenue earnings per share of c.12.3% compared to the first half
of the previous financial year. This has enabled your Board to declare an
increased second interim dividend of 3.75 pence per share (2024: second
interim dividend of 2.75 pence per share). The second interim dividend will be
payable on 26 September 2025 to shareholders on the register of members on 22
August 2025. The associated ex-dividend date is 21 August 2025. This follows
the payment of a first interim dividend of 3.75 pence per share on 27 June
2025.
As explained in the Company’s most recent Annual Report and supported by
shareholders at this year’s Annual General Meeting, the Company’s dividend
has recently been altered to see the Company’s progressive revenue-covered
dividend enhanced by the payment of an additional 0.75 pence per quarter
funded from capital. This has raised the prospective dividend yield on the
Company’s shares to c. 4.4%, higher than the average dividend yield of the
FTSE All Share which at the time of writing is 3.4%.
The Board
I am delighted to report that Nick Bannerman and Wendy Colquhoun joined the
Board on 1 July 2025.
Both Nick and Wendy have deep knowledge and understanding of the investment
trust sector and have already begun to contribute significantly to the
Board’s deliberations.
Outlook
The new government has been in place in the UK for over a year and faces a
number of challenges. Domestically it has the difficult task of trying to
balance the need for public sector investment and prudent management of the
UK’s fiscal position without stifling business and consumer confidence,
while internationally it navigates continued geopolitical uncertainty
alongside apparently capricious shifts in global tariffs and trade policy.
Despite global macroeconomic uncertainty, including uneven global growth and
differing monetary policy paths, the UK market benefits from political
stability, attractive valuations, and ongoing corporate activity.
The timing and pace of interest rate cuts also remains unclear, despite
continued weakness in the UK economy and a relatively subdued level of
inflation. However, the Board believes that any concerns here are reflected in
current valuations. The Portfolio Manager continues to focus on long-term
value opportunities, and the Board remains confident that the Trust will
continue to deliver attractive returns over time.
On behalf of the Board, I thank shareholders for their continued support.
Richard Wyatt
Chairman
19 August 2025
Ten Largest Investments
As at 30 June 2025
Primary
place of Valuation % of
Company Industry Listing £’000 portfolio
Johnson Matthey Materials UK 50,016 5.2%
Aviva Financials UK 49,969 5.1%
Royal Dutch Shell Energy UK 48,286 5.0%
NN Group Financials Netherlands 46,713 4.8%
ITV Communications UK 44,728 4.6%
BT Group Communications UK 43,059 4.4%
NatWest Group Financials UK 39,379 4.1%
BP Energy UK 37,927 3.9%
Smith & Nephew Healthcare UK 34,918 3.6%
Marks & Spencer Group Consumer Staples UK 33,623 3.5%
Total Top Ten 428,618 44.2%
Portfolio Manager’s Report
“In an uncertain world, our approach is and has always been to think long
term and invest in what we believe to be fundamentally sound businesses that
for one reason or another are valued at a significant discount to their true
economic worth. This is on the basis that eventually that true economic worth
will be reflected in a higher share price.”
The start of 2025 was tumultuous in many respects, but nevertheless stock
markets were able to finish the first half of the year solidly in positive
territory. April, in particular, was marked by extreme volatility, as Donald
Trump announced his much-anticipated reciprocal tariffs. Although stock
markets had been fretting over these since the start of the year, they went
well beyond what had been expected and thereby triggered an aggressive
sell-off as investors repriced the likelihood of a US recession and the likely
knock-on effects on the global economy more generally. In the two days
following the so-called ‘Liberation Day’, US equities fell by more than
10%, marking its fifth biggest two-day decline since World War 2. This equity
market sell-off followed through into the US bond market where long-term
yields briefly surpassed 5%. Driven by fears of a bond market rout, Donald
Trump then announced a 90 day pause in the tariffs, triggering a huge rebound
in global stock markets. In just one day, the US stocks rose by almost 10%,
their best one-day performance since October 2008. The rebound continued into
May and June, enabling the US market to fully recover a more than 15% drawdown
in a record short period of time and finishing the half year at a record
level.
In June, longer-term fears around the US government deficit were further
exaggerated as the Trump administration sought to pass its tax bill through
Congress. This bill will extend the Trump tax cuts from his first term and
according to some estimates will add around US$3 trillion to US debt levels in
the coming years.
Despite the earlier fears that tariff induced uncertainty would undermine
confidence and result in a deterioration in the global economy, so far there
is little evidence that this is the case. Activity and employment indicators
in both the US and Europe indicate that the economy is proving to be
resilient, and that inflation remains relatively subdued.
In the UK however, the signs are more mixed, and activity seems to be cooling
somewhat following a stronger first three months. This is likely due to the
tax rises announced in last year’s budget starting to take effect. The
weakness in the economy is most obviously visible in weak employment numbers
and is likely to pave the way for more interest rate cuts later in the year.
The Trust’s portfolio performed well in the six months, delivering strong
absolute and relative returns. Performance was helped by large rises in
Johnson Matthey, the banks Barclays, NatWest, Standard Chartered and ABN Amro,
insurance companies Aviva and NN Group, electrical retailer Currys, asset
manager Aberdeen and BT Group. WPP Group detracted from the Trust’s return
in the six months.
At the time of its results in May, Johnson Matthey announced the sale of one
of its divisions and an intention to return 90% of the proceeds to
shareholders. This division accounts for just one quarter of the company’s
profits and yet the sales proceeds accounted for around two thirds of its
market value at the time of the announcement. It is perhaps unsurprising
therefore that the shares responded very favourably on the day, rising by more
than 30%. Despite this strong performance, we continue to believe that the
shares are significantly undervalued.
Barclays, Standard Chartered, NatWest Group and the Dutch bank, ABN Amro
continued to benefit from strong net interest margins and a benign loan loss
cycle. Although the shares have performed well, they continue to trade at or
around book value and a price to earnings ratio of around 10 times. Likewise,
insurers Aviva and NN Group, continue to benefit from higher interest rates
and a relatively stable operating environment. Aviva has now completed the
acquisition of fellow insurer Direct Line Group which will lead to significant
cost savings and accelerate the company’s move to higher quality more
capital light activities.
At its year end trading update, Currys said that trading conditions remained
good and that the company continued to surpass prior expectations, prompting
further upgrades to profit estimates for its new financial year. Today, the
shares are priced at roughly double the level of the bid by Elliott Capital
for the company at the beginning of last year, demonstrating that shareholders
were correct in turning down the bid as it materially undervalued the
business.
Aberdeen Group saw some evidence of a stabilisation in fund outflows from its
struggling fund management business and meanwhile its direct-to-consumer
business, Interactive Investor (II), continues to take market share in a
growing market. Although the company’s shares have performed well, we
continue to believe stock market is undervaluing II and the prospects for a
likely profit recovery in the fund management unit.
BT Group continues to roll out its fibre to the home network at an aggressive
pace, with the intention of maximising take up rates and market share at a
time when several of its competitors are struggling financially. The company
has a target to generate £3 billion of free cash flow in 2030 and so far, the
company is on track to achieve this goal. £3 billion of free cash flow would
equate to around a 15% free cash flow yield at today’s share price.
The media group, WPP warned that macroeconomic conditions have weighed on
client spending and there had been less new business than expected. Whilst it
is usual for a struggling company to place the blame on an economic downturn
for downgrades to profit expectations, there is no doubt that secular changes
brought about by the increasing use of AI are partly to blame. Given the
changing backdrop, the advertising agencies are unlikely to deliver the rates
of growth that they have done in the past, but that does not mean that the
companies cannot continue to generate a steady stream of profits. Without
wishing to downplay the challenges that the industry faces, we therefore
believe that a significant portion of WPP’s problems are self-made and
therefore can ultimately be resolved. The Trust therefore continues to hold
shares in WPP pending the arrival of a new chief executive later in the year.
The Trust established new positions in Smith & Nephew, Carrefour, Hana
Financial, Woori and added to its position in Valterra Platinum. These
purchases were funded by the sale of shares in Barrick Gold, Newmont Corp,
Forterra plc and the proceeds from Direct Line’s takeover by Aviva.
The medical devices business, Smith & Nephew, has struggled for some time,
losing market share in its key orthopaedics business and suffering from poor
levels of productivity. Consequently, the share price had been weak. The
company has recognised its failings and has put in place a plan to drive
financial improvement. If successful this will lead to higher sales growth,
productivity improvements, margin expansion and higher cash flow and
shareholder returns. In the last 18 months, there have been clear signs that
the turnaround is working, as the company has delivered strong revenue growth
and an expansion in margins. Smith & Nephew is a high-quality business with
strong market positions in relatively stable but growing end markets and yet
is modestly valued today.
The food retailer, Carrefour, has seen weakness in its share price as profit
margins in France have come under some pressure although there are now signs
that the competitive environment has now steadied. The company has set itself
targets for 2026 which if met would place the company on a price earnings
ratio of around seven times.
Hana Financial and Woori are both Korean banks which enjoy steady loan growth
in a growing economy, are efficiently run and have strong capital ratios. Both
undertake prudent lending policies and offer attractive shareholder returns
and yet they also are valued at historical price earnings ratios of around
seven times and large discounts to net asset value.
The Trust received shares in Valterra Platinum as a result of the Anglo
American spin out of the majority of its shares in Anglo Platinum. The
demerger of Anglo Platinum was one of the undertakings given at the time of
BHP’s failed bid for Anglo American in the spring of 2024. We subsequently
added to the position in the recognition that platinum prices have been weak
for some time, new investment in the industry has been low and metal
stockpiles have been run down. Although this is a volatile business and it
therefore accounts for a small percentage of the Trust’s assets, the
platinum demand supply dynamic looks attractive at the current time, and this
could lead to stronger platinum prices and improved profits over time.
Interestingly, platinum prices have already risen by more than 30% since the
time of the demerger at the beginning of June.
As always, the economic outlook is uncertain. We do not know the effect that
the Trump tariffs will have on economic growth and corporate profitability. In
addition, the recently passed tax bill may or may not result in a
significantly higher level of US borrowing and this may or may not, in turn,
result in higher interest rates in the coming years. In China meanwhile,
growth is weak, and it is difficult to know how successful the authorities
will be in their efforts to stimulate the economy. In Europe, Germany has
announced a large stimulus plan in the hope of increasing its rate of economic
growth, albeit with a higher level of government borrowing. In the UK
meanwhile, the newish Government is struggling to balance the books in the way
that it had hoped.
In an uncertain world, our approach is and has always been to think long term
and invest in what we believe to be fundamentally sound businesses that for
one reason or another are valued at a significant discount to their true
economic worth. This is on the basis that eventually that true economic worth
will be reflected in a higher share price. In essence, this approach attempts
to take advantage of the short termism and behavioural inconsistencies of
other investors and has successfully resulted in significant excess returns
for our clients over a long period of time. One must never forget of course
that there is no investment approach that will outperform the stock market in
each and every year, and that there will inevitably be bumps in the road.
However, with this at the forefront of our minds, we feel confident that
through the disciplined application of a proven value investing strategy, the
Trust can continue to create long-term value for its shareholders.
Ian Lance and Nick Purves
RWC Asset Management LLP
19 August 2025
Interim Management Report
The important events that have occurred during the period under review, the
key factors influencing the financial statements and the principal risks and
uncertainties for the remaining six months of the financial year are set out
in the Chairman’s Statement and the Portfolio Manager’s Report.
The principal risks facing the Company are unchanged, and are not expected to
change materially in the remaining six months of the financial year, since
the date of the Annual Report and Financial Statements for the year ended
31 December 2024 and continue to be as set out in that report on pages 35 to
37 and note 20 to the financial statements beginning on page 87.
Risks faced by the Company include, but are not limited to: investment
strategy risk, loss of investment team or portfolio manager, income risk –
dividend, share price risk, reliance on the Portfolio Manager and other
service providers, compliance with laws and regulations, cyber security, and
global risks (e.g. climate risk, geopolitical and macro risks), market price
risk, interest rate risk, liquidity risk, credit risk and currency risk.
The Board has in place a robust process to identify, assess and monitor the
principal risks and uncertainties and also to identify and evaluate newly
emerging risks. The Board, through the Audit and Risk Committee, regularly
reviews all risks to the Company, including emerging risks, which are
identified by a variety of means, including advice from the Company’s
professional advisors, the Association of Investment Companies (the
“AIC”), and Directors’ knowledge of markets, changes and events. No new
or emerging risks have been identified.
Related Party Transactions
During the first six months of the current financial year, no transactions
with related parties have taken place which have materially affected the
financial position or the performance of the Company.
Going Concern
The Directors believe, having considered the Company’s investment objective,
risk management policies, capital management policies and procedures, and the
nature of the portfolio and the expenditure projections, that the Company has
adequate resources, an appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the foreseeable
future, and more specifically, that there are no material uncertainties
relating to the Company that would prevent its ability to continue in such
operational existence for at least 12 months from the date of the approval of
this half-year financial report. For these reasons, they consider there is
reasonable evidence to continue to adopt the going concern basis in preparing
the financial statements.
The Directors confirm to the best of their knowledge that:
· the condensed set of financial statements contained within this Half-Year
Report has been prepared in accordance with Accounting Standard (“IAS”)
34, ‘Interim Financial Reporting’, as adopted in the UK, and gives a true
and fair view of the assets, liabilities, financial position and return of the
Company; and,
· the Half-Year Report includes a fair review of the information required by
4.2.7R and 4.2.8R of the UK Listing Authority Disclosure Guidance and
Transparency Rules.
In order to provide these confirmations, and in preparing these financial
statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether applicable IFRS have been followed, subject to any material
departures disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business; and the
Directors confirm that they have done so.
The Half-Year Report was approved by the Board on 19 August 2025 and the above
responsibility statement was signed on its behalf by:
Richard Wyatt
Chairman
Statement of Comprehensive Income
For the six months ended 30 June 2025 (unaudited)
30 June 2025 (unaudited) 30 June 2024 (unaudited) Year ended 31 December 2024 (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Total Income 6 26,410 – 26,410 23,886 – 23,886 38,981 – 38,981
Profit on investments 5 – 96,651 96,651 – 73,724 73,724 – 110,111 110,111
Currency exchange losses – (354) (354) – (120) (120) – (128) (128)
Total income 26,410 96,297 122,707 23,886 73,604 97,490 38,981 109,983 148,964
Expenses
Portfolio Management fees (618) (927) (1,545) (548) (822) (1,370) (1,128) (1,691) (2,819)
Other expenses (743) (912) (1,655) (708) (365) (1,073) (1,419) (885) (2,304)
Profit before finance costs and tax 25,049 94,458 119,507 22,630 72,417 95,047 36,434 107,407 143,841
Finance costs (559) (838) (1,397) (562) (843) (1,405) (1,123) (1,684) (2,807)
Profit before tax 24,490 93,620 118,110 22,068 71,574 93,642 35,311 105,723 141,034
Tax (1,059) – (1,059) (1,061) – (1,061) (1,488) – (1,488)
Profit for the period 23,431 93,620 117,051 21,007 71,574 92,581 33,823 105,723 139,546
Earnings per share 8.2p 32.9p 41.1p 7.3p 24.9p 32.2p 11.8p 36.8p 48.6p
The total column of this statement represents the Statement of Comprehensive
Income, prepared in accordance with IFRS. The supplementary revenue and
capital columns are both prepared under guidance published by the AIC.
All items in the above statement derive from continuing operations.
Statement of Changes in Equity
For the six months ended 30 June 2025 (unaudited)
Ordinary Share
share premium Capital Retained Total
capital account reserves earnings equity
Notes £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2025 16,719 96,040 688,309 15,657 816,725
Profit for the period – – 93,620 23,431 117,051
Cost of shares bought back for treasury – – (2,170) – (2,170)
Dividends paid to equity shareholders 7 – – – (19,211) (19,211)
Balance at 30 June 2025 16,719 96,040 779,759 19,877 912,395
Balance at 1 January 2024 16,719 96,040 595,294 12,651 720,704
Profit for the period – – 71,574 21,007 92,581
Cost of shares bought back for treasury – – (9,707) – (9,707)
Dividends paid to equity shareholders 7 – – – (14,375) (14,375)
Balance at 30 June 2024 16,719 96,040 657,161 19,283 789,203
Statement of Financial Position
As at 30 June 2025 (unaudited)
30 June 2025 31 December 30 June 2024
(unaudited) 2024 (audited) (unaudited)
Notes £’000 £’000 £’000
Non-current assets
Investments 5 969,154 880,603 848,880
Current assets
Investments 5 – 4,202 4,202
Cash and cash equivalents 14,218 6,354 8,508
Receivables 6,943 2,059 5,989
Total assets 990,315 893,218 867,579
Current liabilities
Payables (3,121) (1,712) (3,614)
Total assets less current liabilities 987,194 891,506 894,965
Non-current liabilities
Interest bearing borrowings 8 (74,799) (74,781) (74,762)
Net assets 912,395 816,725 789,203
Equity attributable to equity holders
Ordinary share capital 9 16,719 16,719 16,719
Share premium 96,040 96,040 96,040
Capital reserves 779,759 688,309 657,161
Revenue reserves 19,877 15,657 19,283
Total equity attributable to equity holders 912,395 816,725 789,203
NAV per share 10 320.6p 286.2p 275.4p
NAV per share with debt at fair value 1 10 325.4p 291.1p 280.1p
1 Alternative Performance Measure – See glossary of terms for definition
and more information.
Statement of Cash Flows
For the six months ended 30 June 2025 (unaudited)
Year ended
31 December
30 June 2025 30 June 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Cash flows from operating activities
Profit before tax 118,110 93,642 141,034
Adjustments for:
Gains on investments (96,651) (73,724) (110,111)
Finance costs 1,397 1,405 2,807
Dividend income (26,366) (23,663) (38,635)
Interest income (44) (223) (346)
Dividends received 22,602 22,005 38,999
Interest received 113 387 516
(Increase)/decrease in receivables (206) 293 407
Increase/(decrease) in payables 142 (658) (652)
Overseas withholding tax suffered (1,059) (1,061) (1,488)
Net cash flows from operating activities 18,038 18,403 32,531
Cash flows from investing activities
Purchases of investments (218,316) (47,238) (108,442)
Sales of investments 230,909 58,567 124,317
Net cash flows from investing activities 12,593 11,329 15,875
Cash flows from financing activities
Equity dividends paid (19,211) (14,375) (30,817)
Interest paid on borrowings (1,386) (1,386) (2,772)
Shares bought back for treasury (2,170) (9,738) (12,738)
Net cash flows used in financing activities (22,767) (25,499) (46,321)
Net increase/(decrease) in cash and cash equivalents 7,864 4,233 (2,079)
Cash and cash equivalents at the start of the period 6,354 4,275 4,275
Cash and cash equivalents at the end of the period 14,218 8,508 6,354
Notes to the Financial Statements
1. Significant Accounting Policies
1.a General information
Temple Bar Investment Trust Plc is a company limited by shares, incorporated
and domiciled in the UK. Its registered office and principal place of business
is at 25 Southampton Buildings, London WC2A 1AL, UK. Its shares are listed on
the London Stock Exchange.
These condensed interim financial statements were approved for issue on 19
August 2025. These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2024 were approved by
the Board of Directors on 20 March 2025 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
These financial statements have not been audited.
1.b Basis of Preparation
This condensed consolidated interim financial report for the half-year
reporting period ended 30 June 2025 has been prepared in accordance with the
Disclosure Guidance and Transparency Rules of the Financial Conduct Authority
and Accounting Standard IAS 34, ‘Interim Financial Reporting’, as adopted
in the UK.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.
2. Going Concern
The Directors have made an assessment of the Company’s ability to continue
as a going concern and are satisfied that the Company has adequate resources
to continue in operational existence for 12 months from the date when these
financial statements were approved.
In making this assessment, the Directors have considered a wide variety of
emerging and current risks to the Company, as well as mitigation strategies
that are in place. The Directors are not aware of any material uncertainties
that may cast significant doubt on the Company’s ability to continue as a
going concern, having taken into account the liquidity of the Company’s
investment portfolio and the Company’s financial position in respect of its
cash flows and borrowing facilities. Therefore, the financial statements have
been prepared on a going concern basis.
3. Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Company’s financial statements requires the Directors
to make judgements, estimates and assumptions that affect the reported amounts
recognised in the financial statements and disclosure of contingent
liabilities. However, uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying
amount of the asset or liability affected in future periods. The area
requiring the most significant judgment is recognition and classification of
unusual or special dividends received as either revenue or capital in nature.
The estimates and underlying assumptions are reviewed on an ongoing basis.
4. Segmental Reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business being investment business.
5. Investment at Fair Value Through Profit and Loss:
(a) Investment portfolio summary
Six months ended 30 June 2025 (unaudited)
Quoted Debt
equities securities Total
£’000 £’000 £’000
Opening cost at the beginning of the period 764,961 4,203 769,164
Opening unrealised appreciation/(depreciation) at the beginning of the period 115,642 (1) 115,641
Opening fair value at the beginning of the period 880,603 4,202 884,805
Purchases at cost 219,590 – 219,590
Sales - proceeds (227,689) (4,203) (231,892)
Realised gain/(loss) on sale of investments 47,992 – 47,992
Change in unrealised appreciation 48,658 1 48,659
Closing fair value at the end of the period 969,154 – 969,154
Closing cost at end of the period 804,854 – 804,854
Closing unrealised appreciation at the end of the period 164,300 – 164,300
Closing fair value at the end of the period 969,154 – 969,154
(b) Fair value of financial instruments
IFRS 13 requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following classifications:
Level 1 – valued using quoted prices in active markets for identical
investments.
Level 2 – valued using other significant observable inputs (including quoted
prices for similar investments, interest rates, prepayments, credit risk,
etc). There are no level 2 financial assets.
Level 3 – valued using significant unobservable inputs (including the
Company’s own assumptions in determining the fair value of investments).
There are no level 3 financial assets.
All of the Company’s investments are in quoted securities actively traded on
recognised stock exchanges, with their fair value being determined by
reference to their quoted bid prices at the reporting date and have therefore
been determined as Level 1.
There were no transfers between levels in the period and as such no
reconciliation between levels has been presented.
30 June 31 December 30 June
2025 2024 2024
Level 1 Level 1 Level 1
As at £’000 £’000 £’000
Financial assets
Quoted equities 969,154 880,603 848,880
Debt securities – 4,203 4,202
Total investments 969,154 884,805 853,082
6. Income
Six months ended Six months ended Year ended
30 June 2025 (unaudited) 30 June 2024 (unaudited) 31 December 2024 (unaudited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Investment Income
UK dividends 16,189 – 16,189 14,051 – 14,051 24,718 – 24,718
Overseas dividends 10,177 – 10,177 9,612 – 9,612 13,917 – 13,917
Interest on fixed income securities 36 – 36 133 – 133 297 – 297
26,402 – 26,402 23,796 – 23,796 36,932 – 38,932
Other Income
Deposit interest 8 – 8 90 – 90 49 – 49
Total Income 26,410 – 26,410 23,886 – 23,886 38,981 – 38,981
7. Dividends
The fourth interim dividend relating to the year ended 31 December 2024 of
3.00 pence per ordinary share was paid during the six months ended 30 June
2025.
A first interim dividend relating to the year ending 31 December 2025 of 3.75
pence per share was paid on 27 June 2025.
A second interim dividend of 3.75 pence per share will be paid on 26 September
2025 to shareholders registered on 22 August 2025. In accordance with IFRS,
this dividend has not been recognised in these financial statements. The
ex-dividend date for this payment is 21 August 2025.
8. Interest-bearing borrowings
The Company’s financial instruments, are included in the Statement of
Financial Position at fair value or amortised cost, which is an approximation
of fair value, with the exception of interest-bearing borrowings which are
shown at book value.
The interest-bearing borrowings do not have prices quoted on an active market
but their fair values, as shown in the below table, are based on observable
inputs. As such they have been classified as Level 2 instruments in line with
prior periods.
30 June 2025 31 December 2024 30 June 2024
Carrying Fair Carrying Fair Carrying Fair
value value value value value value
£’000 £’000 £’000 £’000 £’000 £’000
Interest-bearing borrowings
4.05%
03/09/2028
Private Placement Loan 49,898 47,692 49,882 46,830 49,865 46,800
2.99%
24/10/2047
Private Placement Loan 24,901 13,529 24,899 13,912 24,897 14,722
Total 74,799 61,221 74,781 60,742 74,762 61,522
9. Share Capital
30 June 31 December 30 June
2025 2024 2024
Number Number Number
As at 1 January 285,395,624 290,612,881 290,612,881
Purchase of shares into treasury (791,246) (5,217,257) (4,096,723)
As at period end:
– In circulation 284,604,378 285,395,624 286,516,158
– In Treasury 49,759,447 48,968,201 47,847,667
– Listed 334,363,825 334,363,825 334,363,825
Nominal Value of 5p ordinary shares 16,719 16,719 16,719
During the period, the Company bought back ordinary shares at a cost of
£2,170,000 (Year ended 31 December 2024: £63,535,000; Six months ended 30
June 2024: £9,707,000).
10. Net asset value (“NAV”) per share
The NAV per share is based on the net assets attributable to the equity
shareholders of £912,395,000 (31 December 2024: £816,725,000; 30 June 2024:
£789,203,000) and 284,604,378 (31 December 2024: 285,395,624; 30 June 2024:
286,516,158) shares being the number of shares in issue at the period end.
The NAV per share with debt at fair value is based on the net assets
attributable to the equity shareholders, adjusted for the difference between
the debt at carrying value and fair value as shown in note 8, and the number
of shares in issue at the period end. Adjusting for debt at fair value
resulted in an increase in net assets of £13,578,000 or 4.8 pence per share
(31 December 2024: increase of £14,039,000 or 4.9 pence per share; 30 June
2024: increase of £13,240,000 or 4.6 pence per share).
Glossary of Terms
AIC
The Association of Investment Companies.
Benchmark
A comparative performance index.
Discount or Premium of Share Price to NAV per Share*
A description of the difference between the share price and the net asset
value per share. The size of the discount or premium is calculated by
subtracting the share price from the net asset value per share and is usually
expressed as a percentage (%) of the net asset value per share. If the share
price is higher than the net asset value per share the result is a premium. If
the share price is lower than the net asset value per share, the shares are
trading at a discount.
Fixed Interest
Fixed-interest securities, also known as bonds, are loans usually taken out by
a government or company which normally pay a fixed rate of interest over a
given time period, at the end of which the loan is repaid.
FTSE All-Share Index
A comparative index that tracks the market price of the UK’s leading
companies listed on the London Stock Exchange. Covering around 600 companies,
including investment trusts, the name FTSE is taken from the Financial Times
and the London Stock Exchange, who are its joint owners.
FTSE 350 Index
A comparative index that tracks the market price of the UK’s 350 largest
companies, by market value, listed on the London Stock Exchange.
Liquidity
The ease with which an asset can be purchased or sold at a reasonable price
for cash.
Market Capitalisation
The total value of a company’s equity, calculated by the number of shares
multiplied by their market price.
NAV (‘Net Asset Value’) per Share
The value of total assets less liabilities, with debenture and loan stocks at
book value. Book value is the amount borrowed less the current loan
arrangement fee debtor. The net asset value per share is calculated by
dividing this amount by the number of ordinary shares outstanding.
NAV per Share with Debt at Fair Value
The value of total assets less liabilities, with debentures and loan stocks at
fair value. The net asset value per share is calculated by dividing this
amount by the number of ordinary shares outstanding.
Ongoing Charges*
Ongoing charges are calculated on an annualised basis. This figure excludes
any portfolio transaction costs and financing costs. It may vary from period
to period. The calculation below is in line with AIC guidelines.
Six months to
30 June 2025
£000
Investment management fee 1,545
Administrative expenses 1,027
Less: non-recurring expenses (23)
Total 2,549
Average total net asset value throughout the period 861,344
Ongoing charges 0.59%
* Alternative Performance Measure.
Net asset value (NAV) per Share Total Return with Debt at Fair Value*
The theoretical total return on shareholders’ funds per share, reflecting
the change in NAV with debt at fair value assuming that dividends paid to
shareholders were reinvested at NAV with debt at fair value at the time the
shares were quoted ex-dividend. A way of measuring investment management
performance of investment trusts which is not affected by movements in
discounts/ premiums.
Six months to
30 June 2025
(p)
Opening NAV with debt at fair value 291.1
Increase in NAV 41.2
Less dividends paid (6.75)
Adjustment for movement in fair value of debt (0.2)
Closing NAV with debt at fair value 325.4
% increase in NAV with debt at fair value 11.8%
% Impact of reinvesting dividends 2.4%
NAV per share % total return with debt at fair value 14.2%
Share Price Total Return*
Return to the investor on mid-market prices assuming that all dividends paid
were reinvested at the share price at the time the shares were quoted
ex-dividend.
Six months to
30 June 2025
(p)
Opening share price 272.0
Increase in share price 53.8
Less: dividends paid (6.75)
Closing share price 319.0
% increase in share price 17.3%
% Impact of reinvesting dividends 2.6%
Share price total return 19.9%
Value Investing
An investment strategy that aims to identify under-valued yet good quality
companies with strong cash flows and robust balance sheets, putting an
emphasis on financial strength.
Historical Dividend Yield*
A measure of the income return earned on an investment. In the case of a share
the yield expresses the annual dividend payment as the percentage of the
market price of the share.
Prospective Dividend Yield*
The expected annual dividend expressed as a percentage of the current share
price. It is calculated using the forecast dividends for the current financial
year and the latest share price.
* Alternative Performance Measure.
For and on behalf of
Frostrow Capital LLP, Secretary
19 August 2025
- ENDS -
Neither the contents of the Company’s website nor the contents of any
website accessible from hyperlinks on this announcement (or any other website)
is incorporated into, or forms part of, this announcement.
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