REG-TwentyFour Select Monthly Income Fund Limited: Full-Year Results for the year ended 30 September 2025
Thu 07:02
11 December 2025
Full-year results for the year ended 30 September 2025
TwentyFour Select Monthly Income Fund Limited (“SMIF” or “the
Company”), the listed, closed-ended investment company that pays a monthly
dividend to shareholders by investing in a diversified portfolio of credit
securities, is pleased to announce its full-year results for the year ended 30
September 2025. The Annual Report and Audited Financial Statements will
shortly be available via the Company's website
www.selectmonthlyincomefund.com.
Financial highlights
* NAV per Ordinary Share of 86.06p (2024: 83.70p)
* NAV return per Ordinary Share of 12.22% (2024:
22.56%)
* Total annual dividend for the year of 7.30 pence per
Ordinary Share, ahead of the 6 pence target
* Total net assets increased to £272.72m (2024:
£219.77m)
* The Company has traded at an average premium to NAV
of 2.09% during the period, in contrast to the wider investment company sector
trading at a discount
Portfolio highlights
* The portfolio continued to benefit from strategic
exposure to resilient credit sectors, namely Collateralised Loan Obligations
(“CLOs”) and subordinated financials (Additional Tier 1 bonds and
Restricted Tier 1 bonds), with the sectors returning 13.75%, 12.47% and
13.65%, respectively
* CLOs continue to benefit from the higher rate
environment whilst also gaining from the strong technical strength which
persists across the asset class
* Performance in subordinated financials was supported
by strong earnings from European banks, with resilient asset quality, elevated
net interest margins and low levels of non-performing loans
* Several other sectors also saw strong performance,
with US and European High Yield returning 13.75% and 10.03%, respectively
* The period has seen the portfolio’s highest average
credit rating since IPO with exposure to higher quality assets delivering
higher levels of income
Outlook
Despite concerns over the direction of US trade policy, fiscal spending and
some softness in the labour market, the outlook for the credit market is
positive. Corporates have maintained strong balance sheets, the banking sector
is robust and there is sustained consumer demand.
The Board believes that the Company is well placed to navigate continued
uncertainty and remains supportive of the Portfolio Manager’s strategy to
focus on investment in high quality assets that can be underwritten through
the cycle, while maintaining a strong focus on relative value.
The Portfolio Manager expects returns will come primarily from income in the
short term, driven by its favoured sectors, Financials and Asset-Backed
Securities, and supported by yields substantially above historical averages.
Given the outlook and current expectations of yields, it is possible that the
year ending 30 September 2026 may also produce an excess income amount over
the Dividend Target of 6 pence per Ordinary Share. As with this reporting
period, the Board and Portfolio Manager will consider whether the Company may
temporarily spread the excess income more evenly through the year.
Commenting on the results, Ashley Paxton, Chair, SMIF said
: “SMIF has gone from strength to strength during the year. The Company has
been one of the most prolific issuers of shares in the sector, having issued
54.315 million Ordinary Shares over the period at a 2% premium (prior to issue
costs) to the NAV at issue date, taking total Ordinary Shares in issue to
316.89 million. In contrast to the wider investment company market, which saw
many companies on the Main Market of the LSE trading at large discounts, SMIF
traded at a premium to NAV for the entirety of the year, at an average 2.09%
premium.
As the Company continues to grow, it remains focused on its objective of
delivering a stable monthly income to shareholders by maintaining a
disciplined investment approach, rotating between sectors where it sees
relative value and selectively taking advantage of market volatility, to
deliver attractive, risk-adjusted returns.”
George Curtis, Portfolio Manager, SMIF said: “Higher for
longer interest rates and robust earnings from European banks have informed
our decision to maintain the portfolio’s overweight exposure to CLOs and
subordinated finance. At the same time, all sectors held in the portfolio
contributed positively to performance, supported by strong fundamentals in the
credit sector.
However, given elevated macroeconomic risks we are not complacent, and
continue to build a portfolio of high conviction credit that we can hold
through the cycle whilst maintaining the highest average credit rating the
fund has ever had.”
ENDS
For further information please contact:
TwentyFour Select Monthly Income Fund Limited
Alistair Wilson
Tel: +44 (0)20 7015 8900
Deutsche Numis
Hugh Jonathan / George Shiel
Tel: +44 (0)20 7260 1000
JPES Partners
Charlotte Walsh / Chris Flame
Tel: +44 (0)20 7520 7620
The Company’s LEI is 549300P9Q5O2B3RDNF78.
About SMIF
SMIF is a London listed closed-ended investment company designed to take
advantage of the premium returns available from “less liquid” instruments
across the debt spectrum.
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
For the year ended 30 September 2025
(Classified Regulated Information, under DTR 6 Annex 1 section 1.1)
CORPORATE INFORMATION
Directors Ashley Paxton (Chair) Receiving Agent Computershare Investor Services PLC
Sharon Parr (Senior Independent Director) The Pavillions
Wendy Dorey Bridgewater Road
Richard Class Bristol, BS13 8AE
Registered Office UK Legal Adviser to the Company
PO Box 255 Eversheds Sutherland (International) LLP
Trafalgar Court One Wood Street
Les Banques London, EC2V 7WS
St Peter Port
Guernsey, GY1 3QL
Portfolio Manager Guernsey Legal Adviser to the Company
TwentyFour Asset Management LLP Carey Olsen (Guernsey) LLP
8th Floor, The Monument Building Carey House
11 Monument Street Les Banques
London, EC3R 8AF St Peter Port
Guernsey, GY1 4BZ
Alternative Investment Fund Manager Independent Auditor
Waystone Management Company PricewaterhouseCoopers CI LLP
(IE) Limited 35 Shelbourne Road PO Box 321 Royal Bank Place
Ballsbridge Glategny Esplanade
Dublin 4 St Peter Port
Ireland, D04 A4EO Guernsey, GY1 4ND
Custodian, Principal Banker and Depositary Registrar
Northern Trust (Guernsey) Limited Computershare Investor Services (Guernsey)
PO Box 71 Limited
Trafalgar Court 1st Floor
Les Banques Tudor House
St Peter Port Le Bordage
Guernsey, GY1 3DA St Peter Port
Guernsey, GY1 1DB
Administrator and Company Secretary Financial Adviser and Corporate Broker
Northern Trust International Fund Administration Deutsche Bank AG (London Branch)
Services (Guernsey) Limited (trading as “Deutsche Numis“)
PO Box 255 21 Moorfields
Trafalgar Court London, EC2Y 9DB
Les Banques
St Peter Port
Guernsey, GY1 3QL
FINANCIAL HIGHLIGHTS
Net Asset Value per Ordinary Share
As at 30 September 2025 As at 30 September 2024
86.06p 83.70p
Share Price
As at 30 September 2025 As at 30 September 2024
87.80p 85.30p
Total Net Assets
As at 30 September 2025 As at 30 September 2024
£272.72 million £219.77 million
NAV Total Return per Ordinary Share
For the year ended 30 September 2025 For the year ended 30 September 2024
12.22% 22.56%
Dividends Declared per Ordinary Share
For the year ended 30 September 2025 For the year ended 30 September 2024
7.30p 7.38p
Average Premium
For the year ended 30 September 2025 For the year ended 30 September 2024
2.09% 1.44%
Ordinary Shares in Issue
As at 30 September 2025 As at 30 September 2024
316.89 million 262.57 million
Number of Positions in Portfolio
As at 30 September 2025 As at 30 September 2024
156 148
Definitions of the above measures can be found in the Glossary of Terms and
Alternative Performance Measures.
As at 3 December 2025, the premium had moved to 2.29%. The estimated Net Asset
Value (“NAV”) per Ordinary Share and share price stood
at 85.25p and 87.20p, respectively.
Results are discussed further in the Directors’ Report.
Ongoing Charges
Ongoing Charges have been calculated in accordance with the Association of
Investment Companies (the "AIC") recommended methodology. Ongoing Charges for
the year ended 30 September 2025 were 1.13% (30 September 2024: 1.21%) on an
annualised basis.
SUMMARY INFORMATION
The Company
TwentyFour Select Monthly Income Fund Limited (the “Company”) was
incorporated with limited liability in Guernsey, as a closed-ended investment
company on 12 February 2014. The Company’s Ordinary Shares were listed on
the Official List of the Financial Conduct Authority (“FCA”) and admitted
to trading on the Main Market of the London Stock Exchange (“LSE”) on 10
March 2014.
Investment Objective and Investment Policy
The Company’s investment objective is to generate attractive risk adjusted
returns, principally through income distributions.
The Company’s investment policy is to invest in a diversified portfolio of
credit securities.
The portfolio can be comprised of any category of credit security, including,
without prejudice to the generality of the foregoing, bank capital, corporate
bonds, high yield bonds, leveraged loans, payment-in-kind notes and
asset-backed securities and can include securities of a less liquid nature.
The portfolio is dynamically managed by TwentyFour Asset Management LLP
(“TwentyFour” or the “Portfolio Manager”) and, in particular, is not
subject to any geographical restrictions.
The Company maintains a portfolio diversified by issuer and comprises at least
50 credit securities. No more than 5% of the portfolio value will be invested
in any single credit security or issuer of credit securities, tested at the
time of making or adding to an investment in the relevant credit security. The
Company may hold up to 10% in cash but works on the basis of an operational
threshold of 5% and any uninvested cash, surplus capital or assets may be
invested on a temporary basis in:
* cash or cash equivalents, money market instruments,
bonds, commercial paper or other debt obligations with banks or other
counterparties having a “single A” or higher credit rating as determined
by any internationally recognised rating agency which may or may not be
registered in the EU; and
* any “government and public securities” as defined
for the purposes of the FCA Rules.
Efficient portfolio management techniques are employed by the Company, and may
include currency and interest rate hedging and the use of other derivatives to
manage key risks such as foreign exchange movements, interest rate sensitivity
and to mitigate market volatility. The Company’s currency hedging policy
will only be used for efficient portfolio management.
The Company does not employ gearing or derivatives for investment purposes.
The Company may use borrowing for short-term liquidity purposes, which could
be achieved through arranging a loan facility or other types of collateralised
borrowing instruments including repurchase transactions and stock lending. The
articles of incorporation of the Company (the “Articles”) restrict the
borrowings of the Company to 10% of the Company’s NAV at the time of
drawdown. No arrangements for borrowing are currently in place.
At launch, the Company had a target net total return on the original issue
price of between 8% and 10% per annum. This comprised a target dividend
payment of 6p per Ordinary Share per annum (“Dividend Target”) and a
target capital return of 2p-4p per annum, both based on the original issue
amount of 100p. Whilst there is no guarantee that this can or will be
achieved, the Dividend Target has consistently been met since the Company’s
launch in 2014. Refer to note 19 to the Financial Statements for details of
the Company’s dividend policy.
In accordance with the UK Listing Rules (“UKLR”), the Company can only
make a material change to its investment policy with the approval of its
Shareholders by Ordinary Resolution.
Shareholder Information
Waystone Management Company (IE) Limited (“Waystone” or the “AIFM”) is
responsible for calculating the NAV per Ordinary Share of the Company. Whilst
the AIFM has delegated this responsibility to Northern Trust International
Fund Administration Services (Guernsey) Limited (the “Administrator”),
they still perform an oversight function.
The unaudited NAV per Ordinary Share is calculated as at the close of business
on every Wednesday that is also a business day, as well as the last business
day of every month and announced by the Regulatory News Service the following
business day.
CHAIR’S STATEMENT
For the year ended 30 September 2025
As Chair to TwentyFour Select Monthly Income Fund Limited, I am delighted to
present my report on the Company’s progress for the year ended 30 September
2025. The Company continued to perform well with a NAV Total Return per
Ordinary Share for the year of 12.22% (including a dividend per Ordinary Share
of 7.30 pence, comfortably exceeding the target of 6 pence per Ordinary
Share), whilst increasing its credit quality over the year to BB (from BB- in
September 2024), the highest average credit rating since the Company’s
inception.
Market Overview
In my statement last year, I discussed how monetary policy communication has
evolved over the past few decades; from the Federal Open Market Committee's
first statement in July 1995 where Chairman Greenspan used only three
sentences to announce their latest policy decision – to today's dizzying
array of information that central banks pass on daily to investors.
This year, however, market dynamics have been driven less by monetary policy
and more by government and fiscal developments. While corporations and
households spent much of the post Global Financial Crisis (“GFC”) years
reducing their debt levels (driven by the financial sector in particular),
governments increasingly stepped in to fill the gap. This has been
turbo-charged post the pandemic, as the extraordinary levels of fiscal
stimulus deployed into the system in 2020 and 2021 have proven difficult to
unwind. Whilst central banks have been reducing the size of their balance
sheets to more appropriate levels, many developed market economies are still
running some of the largest non-recessionary deficits of all time.
All else being equal, this implies a greater supply of government bonds to the
market at a time when demand for those bonds has fundamentally shifted. For
much of the past decade, markets have benefitted from large price-insensitive
buyers of government bonds as central banks undertook large quantitative
easing programs whilst foreign central banks were accumulating dollars that
needed to be invested somewhere (mostly US Treasuries). Today, the landscape
looks very different. Central banks are engaged in quantitative tightening;
President Trump has sought to reduce trade deficits (in effect limiting the
supply of dollars to the rest of the world), and non-US central banks have
been diversifying their US Dollar holdings elsewhere.
This shift explains why government bonds, for much of the past 12 months, have
been the primary source of volatility in fixed income markets as investors
reassess the appropriate risk premium for holding longer dated paper. We saw a
multiple standard deviation move in 30-year German Bunds in March 2025
following the release of the government debt-brake (note: a positive
development for Europe) and a multiple standard deviation move in 30-year US
Treasuries in April 2025 after President Trump's tariff announcement. Similar
pressures have periodically emerged across Japanese, UK and French bonds
throughout the year.
Throughout this volatility, credit, particularly at the shorter end of the
curve, has exhibited very little volatility. Whilst leverage in the government
space has been increasing, corporates have managed to navigate the changing
interest rate environment of the last few years extraordinarily well. Leverage
is at appropriate levels, the equity cushion behind bondholders has risen,
free cash flow remains resilient, and margins in many sectors have increased.
All of this has occurred as all-in yields have risen, meaning the return per
unit of risk has improved - even as the opportunity set for funds (including
the Company) has widened.
This fundamental backdrop for credit has informed the Portfolio Manager’s
approach during the financial year. With a keen focus on combining attractive
top-down tailwinds with rigorous bottom-up analysis, the Portfolio Manager
looked to buy assets that it can comfortably underwrite through the cycle and
which provide attractive risk adjusted returns. Performance continues to be
strong and the elevated level of yield in the portfolio provides a solid
longer-term outlook for returns.
Sector Overview
The listed investment company sector has endured another difficult year. After
a decade of expansion and substantial net issuance between 2013 and 2022, the
last three years have instead been defined by contraction. Investor appetite
has remained muted across much of the sector, prompting widespread buyback
programmes, tender offers and wind-ups. Consequently, 2025 has already
surpassed 2024 as the highest year for capital returned to Shareholders in the
sector since 2000.
This shift has been driven by persistent share price discounts to NAV, even
though these discounts have narrowed somewhat from those reached in 2024. The
modest improvement appears to reflect continued buybacks and activist
intervention rather than a genuine resurgence in investor interest. At the
same time, investors’ calls for increased scale and liquidity have grown
louder, fuelling consolidation and merger activity. Activism has also become
more pronounced, with boards facing closer scrutiny of their strategic
direction, long-term viability and approach to managing discounts.
Amid these headwinds, the Company has been a notable outlier. For the entirety
of the financial year and as noted below, the Ordinary Shares have traded at a
premium to NAV, enabling the issuance of new shares to meet healthy investor
demand – an outcome that contrasts sharply with the widespread contraction
elsewhere in the sector. Although our position remains robust, the Board is
acutely aware of the challenges facing the industry and continues to monitor
the landscape carefully. We remain firmly focused on ensuring the Company is
well positioned to weather future uncertainties and to sustain its long-term
performance.
Share Activity
The Company traded at a premium to NAV for the entirety of the year, at an
average 2.09% premium (year ended 30 September 2024: 1.44%).
Due to the availability of accretive assets for purchase, and because of
shareholder demand, the Company was able to issue 54,314,866 new Ordinary
Shares during the year, at a premium of 2% (prior to issue costs) to the NAV
at issue date.
This additional share activity has been an excellent result for the Company,
making it one of the most prolific issuers in the investment company market
during the financial year.
The Company’s quarterly tender facility continues to enable liquidity for
investors and helps to act as a discount control mechanism. A total of 949,852
shares were submitted for tender in the four quarterly tender offers during
the year (404,301, 177,838, 287,307 and 80,406 shares for the quarters ended
30 September 2024, 31 December 2024, 31 March 2025 and 30 June 2025,
respectively). Of the shares tendered all were subsequently successfully
placed or purchased by the Company’s Financial Adviser and Corporate Broker,
Deutsche Numis. Post year end, a further 119,559 shares were initially
purchased by the Corporate Broker and subsequently placed with investors in
October 2025 in respect of the tender for the quarter ended 30 September 2025.
Dividend Policy
On formation, the Company’s objective was to generate a return of 8-10% with
a 0.5 pence per Ordinary Share dividend payment each month, with the Board’s
intention that the balance of excess income (as defined in note 19 to the
Financial Statements) for the financial year would be paid within the final
monthly dividend.
During the year, the Directors carefully considered the Company’s projected
income for the year and their assessment of risks inherent in achieving its
target dividend payment of 6 pence per Ordinary Share per annum, against the
desire to distribute the excess income more evenly to Shareholders over the
year. Based on this analysis, the Directors estimated that dividends payable
in respect of the financial year were likely to be in excess of 6 pence per
Ordinary Share, and consequently decided it was appropriate to pay an
additional 0.25 pence per Ordinary Share, in addition to the regular monthly
targeted dividend of 0.5 pence per Ordinary Share, for the periods ended 31
March 2025 and 30 June 2025.
Additionally, the final dividend declared for September 2025 was 1.30 pence
per Ordinary Share, producing a total annual dividend declared for the
financial year of 7.30 pence per Ordinary Share. The Board believes this is an
excellent result for a period which also saw ongoing capital growth for the
Company. The Board and the Portfolio Manager are focused on the sustainability
of the Company’s dividend policy, regularly monitoring and reviewing the
position.
A Committee of the Board meets each month to approve the monthly payment of
0.5 pence per Ordinary Share (and any additional dividend amounts where
appropriate). The Portfolio Manager is confident that the current monthly
Dividend Target of 0.5 pence per Ordinary Share remains achievable in the
current yield environment.
Whilst the approach of declaring excess income for the financial year at the
October dividend meeting is entirely consistent with previous years, the
Directors are cognisant that the amounts declared in October 2025, and for the
two prior years 2024 and 2023, were notably higher than the Dividend Target.
Given the outlook and current expectations of yields, it is possible that the
year ending 30 September 2026 may also produce an excess income amount over
the Dividend Target of 6 pence per Ordinary Share. In line with this reporting
period, the Board and Portfolio Manager will continue to consider whether the
Company may temporarily spread the excess income more evenly during the
ensuing year.
Return
During the year, the NAV per Ordinary Share saw an increase from 83.70 pence
to 86.06 pence, a rise of 2.82%, with a NAV Total Return per Ordinary Share
for the year of 12.22%. This, together with the favourable net increase in
share capital as previously noted, meant the Company saw a very strong
increase in net assets from £219.77m to £272.72m over the financial year.
Outlook
There is no doubt that macro risks remain elevated, but the Company remains
well placed to navigate through a variety of different scenarios. The
Portfolio Manager believes that the underlying pillars still remain sound and
expects a pick-up in economic growth amongst developed economies next year
after a sluggish 2025.
Growth forecasts have improved significantly in Europe too, primarily as a
result of Germany's change in its fiscal stance. Europe has been defined by
sluggish growth in recent years due mainly to the core countries where Germany
in particular has suffered from weak manufacturing activity and high energy
costs post Russia's invasion of Ukraine.
In the UK, political uncertainty remains high, as it does in many developed
markets. The UK is particularly exposed to fears around the fiscal situation
given its twin deficits which makes it more dependent on global capital
markets (unlike Germany and Japan, for example, which both run positive
current accounts). The recently announced budget may have calmed some of those
fears, at least in the short-term (we would note however that much of the
fiscal consolidation is back-dated and predicated on relatively optimistic
Office for Budget Responsibility forecasts). Positively, consensus forecasts
still point to robust growth (1%+) in the UK in the coming few years, a sharp
reduction in inflation next year (from ~4% now to 2.5% by 2026), as well as a
fall in the fiscal deficit (-5.1% of Gross Domestic Product (“GDP”) in
2024 down to -3.6% of GDP by end of next year).
We expect government bond volatility to remain elevated, particularly at the
longer end of yield curves (which are more affected by influences other than
base rates), whilst we expect credit spreads to continue to be well supported
for several reasons: improving real GDP growth, stable credit metrics and
solid technical tailwinds. All-in yields remain attractive and offer good
downside protection if credit spread volatility were to pick up.
Ultimately, the Portfolio Manager will continue to diligently underwrite
credits through the cycle - not just managing the portfolio for the base case,
but also for a weaker growth scenario. The increase in the Company’s credit
quality over the period (to the highest average credit rating since the
Company’s inception) continues to strengthen its position, enabling it to
effectively navigate market volatility. The Portfolio
Manager will look to selectively take advantage of any market volatility.
Environmental, Social and Governance Approach
The Board recognises the importance of Environmental, Social and Governance
(“ESG”) factors in both investment management and
across society in general and has worked closely with the Portfolio Manager in
relation to all aspects relevant to the Company’s portfolio. Throughout the
year, the Portfolio Manager has continued to work extensively on engaging with
issuers to improve disclosures, through TwentyFour’s proprietary ESG scoring
model which includes coverage of asset-backed securities (“ABS”) specific
metrics, meaning ESG data is factored in to every level of the investment
process. The Board and the Portfolio Manager believe this proprietary ESG work
is unique in the European ABS space. The Portfolio Manager strongly believes
that ESG factors have a material impact on the creditworthiness of the
underlying assets.
Annual General Meeting
The Company’s 2025 Annual General Meeting (“AGM”) was held at the
offices of Northern Trust International Fund Administration Services
(Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey,
Channel Islands on 14 August 2025 at 12pm, with all resolutions passed.
Other
The Board remains focused on delivering value for Shareholders. During the
year, this included a close review of all aspects of the Company’s
operations to ensure that the cost base continues to support long-term
performance, and following constructive engagement with our service providers,
we secured a reduction in administration fees during the year. This, together
with economies of scale associated with the growth of the Company, has meant
Ongoing Charges fell for the year ended 30 September 2025 to 1.13% (year ended
30 September 2024: 1.21%).
It is pleasing to note that the Company’s shareholder base continues to
diversify with an increase in retail investors investing via platforms. The
Board continues to focus on engagement across the shareholder base. In
particular:
* We are pleased to continue to work with the Portfolio
Manager to maintain and further develop the standalone ‘microsite’ for the
Company, www.selectmonthlyincomefund.com, giving retail investors access to a
customised website with key content and fund information. We look forward to
providing further content and insight in the future.
* In December 2024 and June 2025, in conjunction with
the publication of the Company’s 2024 Annual Financial Statements and 2025
Unaudited Condensed Interim Financial Statements respectively, George Curtis
and I were delighted to present a summary of the Company’s key results via
the Investor Meet Company Limited platform. This opportunity to engage
directly with investors through the presentation and the Q&A section has been
a positive step forward for investor communication for the Company. A further
presentation is scheduled for 11 December 2025 to present our results for the
year ended 30 September 2025.
We were delighted that the performance of the Company was formally recognised
and was awarded “Fund of the Year (Sub $1bn)” at the Alternative Credit
Investor Awards in London on 19 November 2025.
As Portfolio Manager, TwentyFour continues to provide excellent thought
leadership through various industry commentary, blogs, podcasts and webinar
presentations. The Board continues to engage closely with the Portfolio
Manager and the key advisers to the Company, including via the Company’s
annual strategy day held on 18 November 2025 in London.
On behalf of the Board, I would like to thank all Shareholders for their
continued support.
Ashley Paxton
Chair
10 December 2025
PORTFOLIO MANAGER’S REPORT
For the year ended 30 September 2025
In our capacity as Portfolio Manager to the TwentyFour Select Monthly Income
Fund Limited, we are pleased to present our report on the Company’s progress
for the financial year ended 30 September 2025.
Market Environment
The first quarter of the Company’s financial year opened with heightened
uncertainty, as investors digested the outcome of the US Presidential election
and the associated “Red Sweep” scenario for the incoming President Trump.
Fixed income markets experienced sharp volatility, with 10-year Treasury
yields rising approximately 80 basis points (“bps”) over the quarter as
the market priced out interest rate cuts amid concerns over renewed
inflationary pressures and potential fiscal stimulus. The US labour market,
however, proved resilient, with nonfarm payroll numbers consistently beating
market estimates and the unemployment rate remaining broadly stable at 4.2%,
allaying fears of a sharp economic slowdown. By the end of the first quarter,
headline and core Consumer Price Index (“CPI”) prints in the US came in at
+2.7% and +3.3% respectively, with the three-month annualised pace of core CPI
ticking up to +3.7%, fuelling concerns over sticky inflation. The Federal
Reserve (“Fed”) cut rates by 25 bps at each of the two meetings during the
quarter, building on their 50 bps cut in September 2024, but signalled a
slower pace of easing than the market had expected in December 2024, with dot
plots indicating just 50 bps of cuts for 2025.
In Europe, weak growth and slowing inflation characterised the first quarter
of the financial year. The European Central Bank (“ECB”) also cut rates by
25 bps at each meeting, leaving the deposit rate at 3% by the end of December
2024, whilst growth and inflation projections were downgraded for FY25 and
FY26. Political developments in France added further volatility, as a
successful no-confidence motion ousted Prime Minister Michel Barnier’s
government. The UK saw rising domestic inflation, with headline CPI reaching
+2.6% and core inflation +3.5% by year end, alongside stagnant GDP growth of
0% in the third quarter. UK Gilts experienced periods of significant
volatility throughout the first quarter, particularly following Chancellor
Rachel Reeves’ controversial Autumn Budget announcements.
The beginning of 2025 was defined by shifting central bank expectations,
political uncertainty, and mixed economic data. Hawkish Fed rhetoric in
January 2025 triggered a sell-off in Treasuries, while Gilts initially
weakened on sticky inflation before stabilising on softer CPI prints. Europe
showed steadier performance, underpinned by resilient Purchasing Managers'
Index data and non-disruptive ECB meetings. February 2025 saw a turn in
sentiment as weaker US economic data prompted a risk-off rally, a move that
extended through March 2025 after the formal announcement of US tariffs and
retaliatory measures from trading partners, raising stagflation risks and
prompting widening spreads in High Yield and US Investment Grade credit.
European bond markets saw an aggressive move wider at the end of the second
quarter after the announcement by Germany of the removal of the debt brake -
whilst it was expected to significantly boost growth in Germany in the coming
years, it would also lead to larger than expected issuance of German Bunds.
April 2025 opened with renewed volatility after the US announced a set of
punitive tariffs on its trading partners, driving credit spreads wider and
equities sharply lower. As the quarter developed however, tariff reprieves
were formally announced, helping trade tensions to ease, risk assets to rally,
and credit spreads to tighten once again. Investors were also encouraged by
the continued strength in risk markets, supported by better-than-expected
macroeconomic data, robust corporate earnings, and the persistence of a strong
technical throughout the fixed income spectrum. Sovereign bonds came under
pressure from fiscal concerns, including Moody’s downgrade of the US’
remaining AAA rating, pushing long-end Treasury yields higher. By the end of
the quarter, however, geopolitical tensions in the Middle East caused
short-lived spikes in oil prices and volatility, but risk markets remained
resilient, with strong primary issuance in European High Yield, Investment
Grade, and Financials markets underscoring robust demand. Market expectations
for earlier Fed rate cuts also supported risk appetite.
The final quarter saw further resilience in risk assets despite ongoing
geopolitical and economic uncertainty. Equity markets reached record highs
several times during this period, underpinned by improved clarity on US
tariffs and fiscal policy, though sticky inflation, hawkish ECB commentary and
inflationary concerns in Japan contributed to sovereign bond sell-offs. August
2025 saw a softening in US labour market data, with payroll growth revised
downwards, prompting expectations of a near-term Fed rate cut. Jerome
Powell’s dovish Jackson Hole speech further reinforced the likelihood of
additional easing, contributing to fresh Treasury volatility. US inflation
remained above target, sustaining upward pressure on yields, while the ECB and
Bank of England (“BoE”) held base rates steady. Credit markets remained
robust, with European High Yield and financials grinding tighter and the
Contingent Convertible (“CoCo”) index reaching record tight spreads,
supported by strong fundamentals.
Portfolio Performance
The total return of the Company’s NAV per Ordinary Share was 12.22% over the
financial year, with all sectors contributing positively to performance. The
portfolio continued to benefit from strategic exposure to resilient credit
sectors, namely Collateralised Loan Obligations (“CLOs”) and subordinated
financials (Additional Tier 1 bonds (“AT1s”) and Restricted Tier 1 bonds),
with the sectors returning 13.75%, 12.47% and 13.65%, respectively. Being
floating rate instruments, CLOs continue to benefit from the higher rate
environment whilst also profiting from the strong technical which persists
across the asset class. Performance in subordinated financials was supported
by strong earnings from European banks, with resilient asset quality, elevated
net interest margins and low levels of non-performing loans.
Several other sectors also saw strong performance, including US and European
High Yield at 13.75% and 10.03%, respectively. These sectors were generally
supported by a highly constructive backdrop for credit - solid and stable
fundamentals, an improving growth backdrop, particularly as we moved through
the latter stages of the year, and a very strong technical picture.
Portfolio Strategy
We take a “bottom-up” approach to credit investing for the Company,
finding value in the markets through rigorous fundamental analysis and a
cross-sector approach to relative value. The Company remained overweight in
two sectors in particular, namely subordinated financials and CLOs. Whilst
analysing names on a bond-by-bond basis, these sectors in particular offer
compelling “top-down” risk reward too.
The credit quality of the portfolio improved over the year reaching its
highest level to date. The normalisation of interest rates in Europe over the
past few years has driven all-in yields across credit markets higher, a trend
that has allowed us to improve credit quality within the portfolio without
sacrificing future returns (in fact the average yield on the Company is well
above the average since inception).
CLOs have benefitted from elevated central bank base rates due to their
floating rate structure, alongside a relatively benign default environment.
Spread levels in the CLO sector remain attractive compared with the broader
high yield market, while the significant carry continues to support strong
returns. The financials sector also remains one of the more compelling
risk-reward opportunities in global credit. European banks have strengthened
considerably over the past decade and continue to outperform market
expectations across most key metrics, including asset quality, net interest
margins and non-performing loan ratios. The underlying credit quality of
European insurers has also continued to support the Company’s allocation to
the sector. The CoCo index reached record-tight spread levels by the end of
the period, reflecting the ongoing resilience and appeal of the sector amid an
improving fundamental backdrop, whilst all-in yields remain elevated relative
to history and other areas of the credit market.
We are happy to hold an overweight allocation in these sectors given the
elevated risk adjusted returns and attractive fundamental profiles.
Portfolio & Market Outlook
Markets remain sensitive to developments on three key fronts: the direction of
US trade policy, the pace of economic growth amongst developed markets, and
the path of central bank policy. While resilient economic data and reassuring
commentary from policymakers continue to underpin the view that a severe
economic downturn will be avoided, the potential for renewed volatility
persists. The pace and scale of interest rate cuts in the medium term by the
Fed remains uncertain and markets continue to consider the state of the labour
market and rate of inflation as key factors driving the Fed’s
decision-making in both the short- and medium-term, with economic data
releases being closely scrutinised.
At the same time, structural factors provide a stabilising influence. The
continued resilience of corporate balance sheets, robust banking sector
fundamentals, and sustained consumer demand serve as important buffers against
economic shocks. Nonetheless, markets are likely to remain reactive to any
shifts in policy expectations or signs of slowing growth, underscoring the
need for vigilance as investors navigate an environment that, while generally
constructive, is still susceptible to periods of volatility.
We see total returns will be driven primarily by carry for the remainder of
2025, particularly from our favoured sectors: Financials (from Senior bonds to
AT1s) and Asset-Backed Securities (“ABS”) (CLOs and Residential Mortgage
Backed Securities (“RMBS”)). We will remain vigilant for any signs of
worsening credit fundamentals or increasing defaults and will continue to
focus on high quality credits that can be underwritten through the cycle,
whilst maintaining a strong focus on relative value. Yields in fixed income
remain substantially higher than historical averages, which should reward
investors whilst offering strong downside breakeven protection. In this
environment, with attractive yields relative to history on offer, disciplined
carry strategies remain compelling and credit is expected to outperform.
Environment, Social & Governance
At TwentyFour, ESG analysis is integral to our primary goal
of delivering capital preservation and performance. Our research and our
experience as a specialist fixed income manager tells us ESG factors can have
a measurable impact on asset values, and we believe their influence is only
likely to grow in the future. Our ESG methodology is embedded within our
regular investment process for the Company, and we believe this approach helps
us target the maximum risk adjusted returns while promoting better societal
outcomes. An active sense check is applied at every step of our process, which
enables us to independently scrutinise the data given by bond issuers and our
external data provider. Our methodology is specifically tailored to the
demands of fixed income, with an additional focus given to more nuanced
factors such as momentum (transition), controversies and engagement.
Within the ESG integration framework, the promotion of sustainability
characteristics amongst the issuers that we invest in is initially considered
through our proprietary scoring model within our proprietary relative value
system, Observatory. We currently utilise the Asset4 ESG database from LSEG
Data & Analytics (formerly Refinitiv), which gathers scores across a broad
range of environmental and social parameters (such as emissions, resource use,
workforce, human rights, community etc.) which then feeds into Observatory. At
the top level, we believe that this framework facilitates a consistent basis
for analysis. The system allows the portfolio management (“PM”) team to
develop an understanding of the environmental and social characteristics of
the issuers within the database. Within the database, we are easily able to
challenge and overwrite the score given by LSEG Data & Analytics and reward
companies with improving ESG metrics or punish those with decreasing ESG
metrics. For those holdings that do not have a score from Asset4, our PM team
will independently review the holdings and provide their own score based on
similar characteristics. The ABS portfolio management team have created their
own system based on the same metrics.
In addition, our ESG integration model incorporates more nuanced factors such
as engagements, controversies, and momentum, which are effective ways to
promote environmental and social characteristics. For instance, through our
engagement approach we are able to develop an in-depth understanding of the
environmental and social characteristics of each issuer. We feel that this is
a crucial element in identifying environmental and social characteristics as
we recognise the limitations of the third-party data that we use and that some
scores may not truly reflect potential ESG risks that are associated with
certain companies in which we invest. Further to this, our engagements also
facilitate momentum opportunities (whether a company is on an improving ESG
trend). Through this, the PM team can assess and reward companies who evidence
a clear plan and demonstrable execution in improving environmental and social
characteristics within their own practices and ultimately achieving their
goals.
TwentyFour is a prominent investor in European ABS markets, including on
behalf of the Company. From our experience, the specialist structures and
complexity associated with this asset class makes ESG data gathering more
challenging compared to more mainstream bond markets. Nevertheless, we have
worked hard with issuers on closing this data gap and have also extended our
Observatory model to cover ABS-specific metrics.
We believe this proprietary ESG work is unique in the European ABS space, and
it is well-regarded among our clients and other market participants. We have
continued to engage with lenders on Scope 3 financed emissions in RMBS and ABS
deals.
Within CLOs, investor demand for ESG integration has increased significantly
over the past year resulting in most CLO managers increasing exclusions at
portfolio level and within disclosures. We have also worked on several
initiatives on the CLO side through the European Leveraged Finance Association
(“ELFA”), with initiatives including a paper outlining guidance for CLO
managers on carbon and climate disclosures. We have focused particularly on
new CLO deals for the Company with positive and negative screening managed by
CLO managers with strong ESG credentials.
TwentyFour’s ESG Committee oversees all of our ESG and Sustainable
activities. The Committee features members from all functions of the business,
including several partners, and is co-chaired by members of our Executive
Committee. As a signatory to the UK Stewardship Code and the United Nations’
Principles for Responsible Investment, we are committed to educating investors
about our process and giving transparency on our engagements with firms on ESG
issues.
TwentyFour Asset Management LLP
10 December 2025
TOP TWENTY HOLDINGS
As at 30 September 2025
Credit Percentage of
Security Nominal/ Security Fair Value * Net Asset Value
Shares Sector # £ %
VSK Holdings '4 C7-1' VAR 500,000 ABS 4,822,798 1.77
Barclays F2V perp 4,050,000 Financial - Banks 4,303,400 1.58
Nationwide Building Society 10.25 29/06/2049 32,960 Financial - Banks 4,284,348 1.57
Banco de Sabadell 6.5% perp 4,400,000 Financial - Banks 4,061,662 1.49
Natwest Group plc F2V perp 4,000,000 Financial - Banks 4,037,149 1.48
UniCredit SPA 6.5% 4,200,000 Financial - Banks 3,901,937 1.43
Banco Santander F2V perp 4,400,000 Financial - Banks 3,637,224 1.33
Rothesay Life 6.875 31/12/2049 3,542,000 Financial - Insurance 3,632,504 1.33
Nationwide Building Society F2V perp 3,400,000 Financial - Banks 3,526,351 1.29
Intesa Sanpaolo F2V perp 3,700,000 Financial - Banks 3,511,193 1.29
Arbour CLO II FRN 15/04/2034 4,000,000 ABS 3,486,881 1.28
Pension Insurance Corporation, 7.375% perp 3,300,000 Financial - Insurance 3,395,667 1.25
AIB Group plc F2V 3,800,000 Financial - Banks 3,392,644 1.24
Bracken MidCo1 6.75% PIK 1/11/2027 3,225,000 High Yield - European 3,226,583 1.18
Bank of Ireland Group 6.12% perp 3,600,000 Financial - Banks 3,214,984 1.18
Santander UK plc 10.375% 2,000,000 Financial - Banks 3,179,652 1.17
Kommunalkredit Austria F2V perp 3,600,000 Financial - Banks 3,134,452 1.15
North Westerly 'X E' FRN 3,500,000 ABS 3,101,835 1.14
Avoca Clo XIII FRN 15/04/2034 3,500,000 ABS 3,073,343 1.13
ABANCA Corporación Bancaria S.A. 6,125% 3,400,000 Financial - Banks 2,984,958 1.09
Total 71,909,565 26.37
* Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.
# Asset-backed securities (“ABS”). All other securities are
Corporate Bonds.
The full portfolio listing of bonds and ABS as at 30 September 2025 can be
obtained from the Administrator on request.
BOARD MEMBERS
Biographical details of the Directors as at date of signing are as follows:
Ashley Paxton - (Non-executive Director and Chair of the Board)
Mr Paxton was appointed as a Director to the Company on 1 November 2021 and
became its Chair on 11 August 2023. Mr Paxton spent the majority of his career
with KPMG having retired as partner and its Channel Islands Head of Advisory
in 2019. Ashley currently holds a number of non-executive directorships across
the financial services sector including a number of companies listed on the
London Stock Exchange. He also plays an important role in the local third
sector. A resident of Guernsey, Ashley is a Fellow of the Institute for
Chartered Accountants in England & Wales and holds an Economics degree from
the University of Warwick.
Sharon Parr - (Non-executive Director and Chair of the Audit Committee and
Senior Independent Director)
Ms Parr was appointed as a Director to the Company on 1 November 2022 and
became Chair of the Audit Committee on 11 August 2023 and Senior Independent
Director on 1 April 2025. Ms Parr has over 35 years in the finance industry
and spent a significant portion of her professional career with Deloitte and
Touche in a number of different countries. After a number of years in the
audit department, on relocating to Guernsey in 1999 she transferred to their
fiduciary and fund management business and, after completing a management
buyout and subsequently selling to Barclays Wealth in 2007, she ultimately
retired from her role there as Global Head of Wealth Structuring in 2011. Ms
Parr holds a number of non-executive directorships across the financial
services sector including in other listed funds. Ms Parr is a Fellow of the
Institute of Chartered Accountants in England and Wales and a member of the
Society of Trust and Estate Practitioners.
Wendy Dorey – (Non-executive Director and Chair of the Management Engagement
Committee)
Ms Dorey was appointed as a Director to the Company and Chair of the
Management Engagement Committee on 1 February 2023. Ms Dorey has over 25
years’ experience in the financial services industry, working for a number
of leading asset managers including Robert Fleming & Co., Friends Ivory & Sime
Inc, M&G Securities Limited and BNY Mellon Corporation. She started her career
in investment marketing and distribution, winning a number of awards for her
campaigns to direct investors and the Intermediary market. She was latterly
head of business strategy and planning for M&G, where she led a number of
corporate restructuring projects and product development initiatives. Since
becoming a resident of Guernsey, Ms Dorey has taken on a portfolio of
executive and non-executive roles. This includes being a Director of an
investment consulting firm and holding non-executive directorships in a
leading Wealth Management firm and an AIM-listed fund. She was also appointed
as a Commissioner for the Guernsey Financial Services Commission (GFSC) from
2015 to November 2024. Ms Dorey is a Fellow of the Institute of Directors and
qualified as a Chartered Director in 2020. She was, until May 2023, the Chair
of the Guernsey Branch of the Institute of Directors.
Richard Class – (Non-executive Director and Chair of the Remuneration and
Nomination Committee)
Mr Class was appointed as a Director to the Company on 1 November 2023 and
became Chair of the Remuneration and Nomination Committee on 1 April 2025. Mr
Class’ career spans more than thirty years in the financial services sector.
During more than a decade at Morgan Stanley, he was Managing Director and Head
of EMEA Business Development for Fixed Income, and a portfolio manager for
fixed income portfolios with assets totalling €7 billion. Prior to that, he
worked for nine years at BG Consulting Group Limited, a financial services
training company and was an executive member of the BG Consulting Group
Limited board for his last three years at the company. He began his career as
a fixed income derivatives trader in interest rate and FX products at Rabobank
and Morgan Grenfell. He is currently a senior advisor to OptimX, which helps
clients to reduce the costs of using financial markets, and is also a senior
mentor to junior and senior professionals in the financial services industry.
Mr Class has a Mathematics degree from Oxford University and is a resident of
the United Kingdom.
DISCLOSURE OF DIRECTORSHIPS IN PUBLIC COMPANIES LISTED ON RECOGNISED STOCK
EXCHANGES
The following summarises the Directors’ directorships in other public listed
companies:
Company Name Stock Exchange
Ashley Paxton
Downing Renewables & Infrastructure Trust plc (until 4 November 2025) London
Ikigai Ventures Limited London
JZ Capital Partners Limited London
Sharon Parr
JZ Capital Partners Limited London
Wendy Dorey
Weiss Korea Opportunity Fund Limited London
Richard Class
None
STRATEGIC REPORT
For the year ended 30 September 2025
The Directors submit to the Shareholders their Strategic Report for the year
ended 30 September 2025.
Business Model and Strategy
The Company is a closed-ended investment company, incorporated with limited
liability in Guernsey. The Company has been granted exemption from income tax
within Guernsey and it is the intention of the Board to continue to operate
the Company so that each year this tax-exempt status is maintained.
Investment objective and policy
The Company’s investment objective and policy is set out in the Summary
Information section.
Income
The Board has the intention to distribute an amount at least equal to the
value of the Company’s excess income (as defined in note 19 to the Financial
Statements) arising each financial year to the holders of Ordinary Shares.
There is however no guarantee that the Dividend Target of 6.0p per Ordinary
Share for each financial year will be met or that the Company will make any
distributions at all.
The dividends declared per Ordinary Share for the year ended 30 September 2025
totalled 7.30p (30 September 2024: 7.38p). Based on current expectations of
yields, it is possible that the year ending 30 September 2026 may also produce
an excess income amount over 6.0p per Ordinary Share and so, as with this
reporting period, the Board and Portfolio Manager will consider whether the
Company may spread the excess income more evenly through the year.
Long-term growth in capital value
The asset value of the Company’s portfolio is heavily influenced by external
macro-economic factors. The Board regularly discusses the portfolio with the
Portfolio Manager. Additional details are covered in the Chair’s Statement
and Portfolio Manager’s Report.
Business Environment
The Company’s risk exposure and the effectiveness of its risk management and
internal control systems are contained within the Company’s risk matrix,
which is reviewed regularly by the Audit and Risk Committee and at least
annually by the Board. The Board is satisfied that it has carried out a robust
assessment of its principal risks and uncertainties.
Principal Risks and Uncertainties
Market risk
The Company invests in credit securities which are subject to market risk,
including the potential for both losses and gains from price risk,
reinvestment risk, interest rate risk, and foreign currency risk.
These are discussed in detail in note 16 to the Financial Statements.
The underlying investments comprised in the portfolio are subject to price
risk. The Company is therefore at risk that market events may affect
performance and in particular may affect the value of the Company’s
investments which are valued on a mark to market and mark to model basis.
Price risk is risk associated with changes in market prices or rates,
including interest rates, availability of credit, inflation rates, economic
uncertainty, changes in laws, national and international political
circumstances. The Company’s policy is to manage price risk by holding a
diversified portfolio of assets, through its investments in credit securities.
The Company’s continuing position in relation to interest rate and duration
risk is monitored on a weekly basis by the Portfolio Manager as part of its
review of the weekly NAV calculations prepared by the Company’s
Administrator. The Company may also use swap contracts to mitigate the effects
of market volatility on interest rate risk. There were no swaps held as at 30
September 2025.
Given the Company’s holdings in investments denominated in currencies other
than sterling, the Company is exposed to foreign currency risk. The Company
manages its exposure to currency movements by using spot and forward foreign
exchange contracts which are rolled forward periodically and typically for a
period of one month.
Each quarter, the Board formally reviews the investment performance reports
and amortisation schedules (setting out upcoming maturities for monitoring
cashflow available for reinvestment) provided by the Portfolio Manager. The
Board also considers the impact of economic volatility and of heightened
geopolitical tensions on the Company’s performance.
Credit risk
The Company invests in credit securities issued by other companies, trusts or
other investment vehicles which, compared to bonds issued or guaranteed by
governments, are generally exposed to greater risk of default in the repayment
of the capital provided to the issuer or interest payments due to the Company
and may also expose the Company to more structural risk. These are discussed
in detail in note 16 to the Financial Statements.
Each quarter, the Board formally considers portfolio credit analysis presented
to it by the Portfolio Manager.
Liquidity risk
All of the assets of the Company are invested in credit securities. These may
be illiquid, and this may limit the ability of the Company to realise its
investments for the purposes of cash management, including any needs arising
for dividend payments or buying back Ordinary Shares either in the quarterly
tender process or in the market. There may be no active market in the
Company’s holdings in credit securities and the Company may be required to
provide liquidity to fund tender requests or repay any borrowings. The Company
does not have redemption rights in relation to any of its investments.
Consequently, the value of the Company’s investments may be materially
adversely affected. This is discussed in detail in note 16 to the Financial
Statements.
The Company has the authority to arrange a Revolving Credit Facility of up to
10% of NAV to fund short-term liquidity requirements. This arrangement has
been provided in the past by Northern Trust (Guernsey) Limited, the
Company’s Principal Banker, and could be re-instated in the future subject
to the prior agreement of the Principal Banker. The Company has not drawn from
the Revolving Credit Facility in 2025 (2024: none).
Each quarter, the Board formally reviews documentation provided by the
Portfolio Manager pertaining to liquidity risk and assesses any action which
may be required.
Valuation of investments
The Company’s investments had a fair value of £266,874,240 as at 30
September 2025 (30 September 2024: £205,443,235) which are the key
constituent of the Company’s net assets. As disclosed in more detail in
notes 2 and 3 to the Financial Statements, these investments have been valued
at fair value through profit or loss. Investments which are not traded on
active markets, which comprise the majority of the portfolio, are valued by
reference to their mid-price as determined using a number of methods including
broker dealer quotations, reported trades or valuation estimates using pricing
models. These valuation assessments are calculated daily and reviewed weekly
by the AIFM. An independent third-party valuation expert was used to value
approximately 2.29% of the Company’s investments at 30 September 2025 (30
September 2024: 3.11%). The Company’s weekly NAV ensures that investors have
sight of timely, relevant valuations of the portfolio assets on a frequent
basis. .
Income recognition risk
As disclosed in note 3(ii)(d) to the Financial Statements, interest income is
recognised on a time-proportionate basis using the effective interest rate
method. Discounts received or premiums paid in connection with the acquisition
of credit securities are amortised into interest income using the effective
interest rate method over the expected life of the related security.
When calculating the effective interest rate, the Portfolio Manager estimates
cash flows considering the expected life of the financial instrument,
including future credit losses and deferred interest payments. The calculation
includes all fees paid or received between parties to the contract that are an
integral part of the effective interest rate and all other premiums or
discounts.
Revenue estimations are sensitive to changes in interest income resulting from
financial instruments defaulting. Interest income represents the Portfolio
Manager’s best estimate having regard to historical volatility and looking
forward at the global environment.
Dividends
The Company has a Dividend Target of 6p per Ordinary Share for each financial
year, and the Board consequently targets a minimum monthly dividend of 0.5p
per Ordinary Share. If the Dividend Target was not able to be met in a year or
the Board considers that it should be reduced, a Continuation Resolution would
be put to Shareholders.
As explained in note 19 to the Financial Statements, in addition to the
Dividend Target the Board intends, with the final monthly dividend for each
financial year, to distribute an amount equal to the value of any unaudited
excess income of the Company for that financial year remaining after payment
of the monthly dividends. The Board may also elect during the year to approve
an additional interim amount per Ordinary Share if the Company is exceeding
its Dividend Target.
The Board meets each month to consider the approval of a monthly interim
dividend and post year end in respect of the final monthly dividend for each
financial year.
As the Dividend Target is central to the Company’s purpose, the Board and
the Portfolio Manager are very focused on the sustainability of the dividend
and regularly monitor and review the position. The Portfolio Manager is
confident that the Dividend Target remains achievable in the current yield
environment, even with forecast interest rate cuts priced in.
The Company’s ability to pay dividends is governed by The Companies
(Guernsey) Law, 2008 which requires the Company to satisfy the prescribed
statutory solvency test. The Board formally considers this at each monthly
meeting prior to approving each dividend payment and, if at the time a
dividend is to be paid, the Board believes that the solvency test cannot be
passed, then no payment will be made.
Quarterly tenders
In order to minimise the risk of the Ordinary Shares trading at a significant
discount to NAV, the Company has incorporated into its structure a mechanism
for a quarterly tender. The Company offers shareholders a quarterly
opportunity to a tender up to 20% of the Ordinary Shares in issue as at the
relevant quarter record date, subject to an aggregate limit of 50% of the
Ordinary Shares in issue in any twelve-month period ending on the relevant
quarter record date. In the event that quarterly tender applications, on any
tender submission deadline, exceed the 50% limit, the Board will convene a
General Meeting in accordance with the Continuation Vote requirements set out
in note 16 to the Financial Statements. The execution and acceptance of the
quarterly tenders is at the sole discretion of the Board.
A key consideration for the ongoing viability of the Company is therefore its
liquidity assessment which is considered on an ongoing basis by the Board. No
liquidity concerns were identified for the year ended 30 September 2025 and
the Board and Portfolio Manager are confident that under
anticipated market conditions the Company can
continue to meet tender requests as they arise.
During the year, 949,852 shares were tendered and purchased by the Corporate
Broker and subsequently placed with investors. In addition, post year end, a
further 119,559 shares were initially purchased by the Corporate Broker and
subsequently placed with investors in respect of the tender for the quarter
ended 30 September 2025.
Shareholder base
The Corporate Broker has limited ability to engage with all investor types and
non-institutional investors now form a large shareholder group.
This group is often more active on a daily basis than passive
institutional holders, and with turnover in the shares relatively low, has an
important marginal price impact. This could cause the price to be especially
volatile during periods when market maker capital is constrained, and
information flow is poor. As engagement with this group of shareholders is
difficult, the Company’s shares could suffer from periods of short-term
market volatility. Post year end, there continues to be healthy demand for
shares in the Company, with 13,750,000 Ordinary Shares issued by 10 December
2025.
The Board utilises the Corporate Broker and media to monitor Shareholders’
opinions and identify potential issues. The Board has retained the services of
JPES Partners Limited to better engage with all shareholder groups and in
doing so continues to weigh up the cost of this against the long-term
benefits.
The Board’s assessment of the above risks has not changed during the year.
Other Risks and Uncertainties
The Board has identified the following other risks and uncertainties along
with steps taken to monitor (and mitigate where appropriate/possible):
Operational risks
The Company does not have executive directors or employees. It has entered
into contractual arrangements with a network of third parties (the “Service
Providers”) who provide services to it. The Board, through the Management
Engagement Committee, undertakes annual due diligence on, and ongoing
monitoring of, all such Service Providers including obtaining a confirmation
that each such Service Provider complies with relevant laws and regulations,
good practice, delivers value for money and has environmental, social and
governance policies in place.
The Company is exposed to the risk arising from any failures of systems and
controls in the operations of the Service Providers. The Board and its Audit
and Risk Committee regularly review reports from the Portfolio Manager, the
AIFM, Corporate Broker, Administrator and Custodian and Depositary on their
internal controls. The Administrator will report to the Portfolio Manager any
valuation issues which will be brought to the Board for final approval as
required.
The Company is exposed to cyber-attack risk through its Service Providers.
Through the Management Engagement Committee, the Company asks its Service
Providers to confirm that they have appropriate safeguards in place to
mitigate the risk of cyber-attacks and remote working (including minimising
the adverse consequences arising from any such attack), that they provide
regular updates to the Board on cyber security, and conduct ongoing monitoring
of industry developments in this area. Some Service Providers have
arrangements to work from home as per their policies. None of the Service
Providers have reported any problems regarding cyber security when questioned
by the Management Engagement Committee.
Accounting, legal and regulatory risks
The Company is exposed to the risk that it may fail to maintain accurate
accounting records, fail to comply with requirements of its Admission document
and fail to meet listing obligations. The accounting records prepared by the
Administrator are reviewed by the Portfolio Manager. The Portfolio Manager,
Administrator, AIFM, Custodian and Depositary and the Financial Adviser and
Corporate Broker provide regular updates to the Board on compliance with the
Admission document and changes in any relevant regulations.
Changes in legal or regulatory environments can have a major impact on some
classes of debt. The Portfolio Manager and Board monitor this and take
appropriate action where needed.
Climate risk
The Financial Stability Board (“FSB”) formed the Task Force on
Climate-related Financial Disclosures (“TCFD”) in December 2015 to address
the impact climate change is having on companies and the global financial
system through disclosure. In July 2023, the FSB announced that the work of
the TCFD has been completed, with the International Sustainability Standards
Board (“ISSB”) Standards marking the 'culmination of the work of the
TCFD'. The UK government has consulted on the exposure
drafts of the UK versions of IFRS S1 and IFRS S2. The
Company is a closed-ended Guernsey domiciled fund. There is no current
mandatory requirement under the UKLR or any other framework to make
disclosures in line with the ISSB standards for closed-ended funds. The Board,
in conjunction with the Portfolio Manager, continues to assess disclosures
made in similar entities to that of the Company so as to best articulate the
low levels of climate risk to which the Board believes the Company is exposed.
Environmental, social and governance
The Board recognises the importance of environmental,
social and governance (“ESG”) factors in the investment management
industry and the wider economy as whole. The Company is a closed-ended
investment company with a limited purpose and without employees. As such, it
is the view of the Board that the direct environmental and social impact of
the Company is limited and that ESG considerations are most applicable in
respect of the asset allocation and security selection decisions made for its
portfolio.
The Company has appointed the Portfolio Manager to advise it in relation to
all aspects relevant to the Investment Portfolio. Whilst
the Company was not established with explicit ESG targets and does not have
any ESG objectives , the Portfolio Manager
includes ESG factors in its investment appraisal and approach and has a formal
ESG framework. The Portfolio Manager has an active ESG Committee representing
all areas of its business. The Board receives regular updates from the
Portfolio Manager on its ESG processes and assesses their suitability for the
Company. ESG factors are automatically assessed by the Portfolio Manager for
every transaction as part of their investment process.
Additional information is detailed below and in the Portfolio Manager’s
Report.
The Board’s assessment of the above risks has not materially changed during
the year and it is satisfied that the Service Providers have the relevant
controls in place to manage the risks.
Future Prospects
The Board’s main focus is to generate attractive risk adjusted returns
principally through income distributions. The future of the Company is
dependent upon the success of the investment strategy. The investment outlook
and future developments are discussed in both the Chair’s Statement and the
Portfolio Manager’s Report.
Board Diversity
When appointing new Directors and reviewing the Board composition, the
Remuneration and Nomination Committee considers, amongst other factors,
cognitive diversity, balance of skills, knowledge, gender, social and ethnic
background and experience. As at 30 September 2025, the Board consisted of two
female and two male Directors. Ms Parr is the Senior Independent Director and
the Chair of the Audit and Risk Committee. As at 30 September 2025, the
Company has therefore met the targets set by the UKLR 6.6.6R(9) in relation to
board diversity for the percentage of its board members who are female and
also in a senior position.
The Remuneration and Nomination Committee considers the UKLR in making its
recommendations for appointments but does not consider it appropriate to
establish targets or quotas in this regard. It has not met the target to have
one director from a minority ethnic background but considers this satisfactory
due to the cognitive diversity of the members of the Board and in particular
due to the difference in social and educational backgrounds of its constituent
members. The Company has no employees .
Shareholder Engagement
The Board welcomes Shareholders’ views and places great importance on
communication with its Shareholders. Shareholders are welcome to meet with the
Chair and other Board members and should contact the Company’s Administrator
in the first instance.
The Portfolio Manager and Deutsche Numis as Financial Adviser and Corporate
Broker maintain a regular dialogue with institutional Shareholders, the
feedback from which is reported to the Board.
The Company’s AGM provides a forum for Shareholders to meet and discuss
issues of the Company and they have the opportunity to vote on the resolutions
as specified in the Notice of the AGM. The Notice of the AGM and the results
are released to the LSE in the form of an announcement.
In addition, members of the Board attend investor days and conferences held by
the Portfolio Manager. Formal presentations are also held
via Investor Meet Company Limited, in respect of annual and interim results,
to engage with the wider shareholder base.
The Portfolio Manager maintains a website for the Company,
www.selectmonthlyincomefund.com, which contains comprehensive information,
including links to regulatory announcements, share price information,
financial reports, investment objective, monthly factsheets and investor
contacts.
Position and Performance
Packaged Retail and Insurance-based Investment Products Key Information
Document
The Company has published a Key Information Document (“KID”) in compliance
with the Packaged Retail and Insurance-based Investment Products
(“PRIIPs”) Regulation. The KID can be found on the Portfolio Manager’s
website at the below web address:
https://selectmonthlyincomefund.com/documents/
The process for calculating the risks, cost and potential returns is
prescribed by regulation. The figures in the KID may not reflect the Portfolio
Manager’s expected returns for the Company and anticipated returns cannot be
guaranteed.
Key Performance Indicators (“KPIs”)
At each Board meeting, the Board considers a number of performance measures to
assess the Company’s success in achieving its objectives. Balanced with the
Board’s consideration of risk factors, below are the main KPIs which have
been identified by the Board for determining the progress of the Company:
* Net Asset Value (“NAV”);
* Share Price;
* Premium/Discount;
* Ongoing Charges; and
* Monthly Dividends.
Net asset value
The NAV per Ordinary Share, including revenue reserve, at 30 September 2025
was 86.06p, based on net assets as at this date of £272,718,193 divided by
number of Ordinary Redeemable Shares in issue of 316,889,197 (30 September
2024: 83.70p based on net assets of £219,767,370 divided by number of
Ordinary Redeemable Shares in issue of 262,574,331).
Share price
The Share Price is the price per share per Ordinary Redeemable Share trading
on the London Stock Exchange. On 30 September 2025, the share price was 87.80p
(30 September 2024: 85.30p).
Premium/discount to NAV
The premium/discount to NAV is a percentage difference in share price per
share to the net asset value per Ordinary Share. It is calculated by
subtracting the share price from the NAV per Ordinary Share and dividing it by
the NAV per Ordinary Share. If the share price is higher than the NAV per
Ordinary Share, the shares are trading at a premium. If the share price is
lower than the NAV per Ordinary Share, the shares are trading at a discount.
On 30 September 2025, the premium to NAV was 2.02% (30 September 2024: premium
of 1.91%).
Ongoing Charges
Ongoing Charges for the year ended 30 September 2025 have been calculated in
accordance with the AIC recommended methodology. Ongoing Charges take into
account the Company’s management fee and all other operating expenses,
excluding finance costs, share issue or buyback costs and any non-recurring
legal and professional fees, and are expressed as a percentage of the average
weekly net assets during the year.
Ongoing Charges for the year ended 30 September 2025 were 1.13% (30 September
2024: 1.21%). Ongoing Charges were calculated as follows:
30.09.25 30.09.24
£ £
Ongoing Charges
Average NAV for the year (a) 237,891,800 196,788,215
Total expenses 2,710,047 2,457,859
Less: Expenses not recognised as part of the
AIC Ongoing Charges Methodology (21,034) (70,507)
Total recognised expenses (b) 2,689,013 2,387,352
Ongoing Charges (b/a) 1.13% 1.21%
Dividends
The Company maintains a Dividend Target of 6p per Ordinary Share.
The dividends per Ordinary Share in respect of the year ended 30 September
2025 totalled 7.30p (30 September 2024: 7.38p) meaning
that the Company exceeded its Dividend Target for the current year.
During the year, the following dividends were declared and paid:
Period to Dividend per Ordinary Share (pence) Net dividend payable (£) Ex-dividend date Record date Pay date
30 September 2024* 1.38 3,624,403 17 October 2024 18 October 2024 1 November 2024
31 October 2024 0.50 1,345,372 21 November 2024 22 November 2024 6 December 2024
29 November 2024 0.50 1,350,372 19 December 2024 20 December 2024 3 January 2025
31 December 2024 0.50 1,360,372 16 January 2025 17 January 2025 31 January 2025
31 January 2025 0.50 1,382,622 20 February 2025 21 February 2025 7 March 2025
28 February 2025 0.50 1,397,372 20 March 2025 21 March 2025 4 April 2025
31 March 2025 0.75 2,096,057 17 April 2025 22 April 2025 6 May 2025
30 April 2025 0.50 1,416,872 22 May 2025 23 May 2025 6 June 2025
31 May 2025 0.50 1,439,372 19 June 2025 20 June 2025 4 July 2025
30 June 2025 0.75 2,211,557 17 July 2025 18 July 2025 1 August 2025
31 July 2025 0.50 1,521,946 21 August 2025 22 August 2025 5 September 2025
31 August 2025 0.50 1,561,947 18 September 2025 19 September 2025 30 September 2025
20,708,264
30 September 2025 1.30 4,158,690 16 October 2025 17 October 2025 31 October 2025
* This dividend was declared in respect of distributable profit for the year
ended 30 September 2024.
Viability Statement
Under the UK Corporate Governance Code, the Board is required to make a
viability statement which considers the Company’s current position and
principal risks and uncertainties, combined with an assessment of the
prospects of the Company, in order to be able to state that they have a
reasonable expectation that the Company will be able to continue in operation
over the period of their assessment. The Board considers that three years is
an appropriate period to assess the viability of the Company given the
uncertainty of the environment within which it operates and the principal
risks and uncertainties affecting the Company.
The Company’s prospects are driven by its business model and strategy. The
Company’s investment objective is to generate attractive risk adjusted
returns, principally through income distributions, by investing in a
diversified portfolio of credit securities. The Board also recognises the
importance of preserving and rebuilding capital which contributes to
generating attractive total returns for shareholders.
Key assumptions considered by the Board in relation to the viability of the
Company are as follows:
Dividend Target
The Company has a Dividend Target of 6p per Ordinary Share for each financial
year. If the Dividend Target was not able to be met in a year or the Board
considers that it should be reduced, a Continuation Resolution would be put to
Shareholders.
The Company declared dividends for the financial year of 7.30p per Ordinary
Share, and each financial year since incorporation the Company has paid
dividends in excess of the Company’s Target Dividend.
The Portfolio Manager is confident that the Dividend Target remains achievable
in the current yield environment, even with forecast interest rate cuts priced
in.
Quarterly tenders
Due to the quarterly tender process, a key consideration for the ongoing
viability of the Company is its liquidity assessment which is considered on an
ongoing basis by the Board. No liquidity concerns were identified for the year
ended 30 September 2025 and the Board and Portfolio Manager are confident that
under anticipated market conditions
the Company can continue to meet tender requests as they arise.
During the year, 949,852 shares were tendered and purchased by the Corporate
Broker and subsequently placed with investors. In addition, post year end, a
further 119,559 shares were initially purchased by the Corporate Broker and
subsequently placed with investors in respect of the tender for the quarter
ended 30 September 2025. Additional information on the tenders is detailed in
the Chair’s Statement.
Other
As part of the Board’s viability assessment for the 3 year period to 30
September 2028, having due regard to the Company’s principal risks and
uncertainties, it has formally considered projected cashflow forecasts, the
amortisation profile of its current portfolio, and a detailed dividend
coverage analysis incorporating its assumptions around reinvestment of bond
redemptions at yields sufficient to ensure the sustainability of income to
meet the Company’s future Dividend Target after known liabilities such as
fees and dividends. Additionally, the Board considered relevant analyses
related to liquidity risk, credit risk, and foreign exchange risk pertaining
to the Company.
Viability conclusion
Based on the above assessment, the Board has concluded that there is a
reasonable expectation that the Company will be able to continue to operate
and to meet its liabilities as they fall due over the three-year period to 30
September 2028.
Section 172 Statement
Although the Company is domiciled in Guernsey, the Board has considered the
guidance set out in The AIC Code of Corporate Governance (the “AIC Code”)
in relation to Section 172 of the Companies Act 2006 in the UK. Section 172 of
the Companies Act requires that the Directors of the Company act in the way
they consider, in good faith, is most likely to promote the success of the
Company for the benefit of all stakeholders, including suppliers, customers
and Shareholders.
Further information as to how the Board has had regard to the Section 172
factors is shown below:
Section 172 factors Key examples Locations
Consequences of decisions in Investment Objective and Policy Summary Information
the long term Future Prospects Strategic Report
Dividend policy Note 19
Viability Statement Strategic Report
Fostering business relationships with suppliers, customers and other stakeholders Shareholders Key Service Providers Strategic Report AGM Monthly Factsheet and Commentary Presentations via Investor Meet Company Limited
Impact of operations on the community and the environment Environmental, Social and Governance Strategic Report
Maintaining high standard of business conduct Corporate Governance Directors’ Report
Key Service Providers
The Company does not have any employees and as such, the Board delegates
responsibility for its day-to-day operations to a number of key Service
Providers. The key Service Providers include the Portfolio Manager, the
Administrator, the Alternative Investment Fund Manager, the Registrar, the
Receiving Agent, the Corporate Broker, and the Legal Advisers. The activities
delegated, service levels and other reports related to the activities of each
Service Provider (such as their own approach to such matters as cyber risk and
assessment of climate change risk to operations) are closely monitored, where
deemed as appropriate by the Board and each Service Provider is required to
report to the Board at set intervals.
The Board also meets with key Service Providers, where necessary, to consider
service levels, the long-term strategy of the business, incorporating
presentations and discussion on longer-term opportunities and threats to the
business. Focus is placed on emerging risks which have the potential to
disrupt the business model.
Signed on behalf of the Board of Directors on 10 December 2025 by:
Ashley Paxton
Sharon Parr
Chair
Senior Independent Director
DIRECTORS’ REPORT
The Directors present their Annual Report and Audited Financial Statements for
the year ended 30 September 2025.
Business Review
The Company
The Company was incorporated with limited liability in Guernsey, as a
closed-ended investment company on 12 February 2014. The Company’s shares
were listed on the Official List of the FCA and admitted to trading on the
Main Market of the LSE on 10 March 2014.
Investment Objective and Policy
The investment objective and policy is set out in the Summary Information.
Premium/Discount to Net Asset Value
The Board monitors and takes action where appropriate to manage the level of
the share price premium/discount to NAV. In doing this, the Company can
operate a share buyback facility whereby it may purchase, subject to various
terms as set out in its Articles and in accordance with The Companies
(Guernsey) Law, 2008, up to 14.99% of the Company’s Ordinary Shares in issue
immediately following Admission for trading on the LSE.
The Company can also offer investors, at the Board’s sole discretion, a
quarterly tender, contingent on certain factors, to provide Shareholders with
a quarterly opportunity to submit Ordinary Shares for placing or repurchase by
the Company at a price representing a discount of no more than 2% to the then
prevailing NAV. For additional information, refer to note 16 (i) to the
Financial Statements.
Shareholder Information
Shareholder information is set out in the Summary Information.
As at 1 October 2024, the Company had the ability to issue 30,541,891 Ordinary
Shares under a block listing facility. On 30 June 2025 and 14 August 2025, the
Company announced that applications had been made for the block listing of an
additional 8,772,975 and 30,000,000 Ordinary Shares, respectively. During the
year, 54,314,866 new Ordinary Shares were issued. As at 30 September 2025, the
Company had the ability to issue 15,000,000 Ordinary Shares under the block
listing facility.
With effect from 19 January 2026, the block listing regime (UKLR 20.6) is
expected to be removed and further listing applications with the FCA will no
longer be required.
Going Concern Statement
A fundamental principle of the preparation of financial statements in
accordance with IFRS Accounting Standards as issued by the International
Accounting Standards Board (“IFRS Accounting Standards”) is the judgement
that an entity will continue in existence as a going concern for a period of
at least 12 months from the signing of the Financial Statements.
The Board, in its consideration of the going concern position of the Company,
has formally considered projected cashflow forecasts, and relevant analyses
related to liquidity risk, credit risk, and foreign exchange risk pertaining
to the Company. Taking into consideration the Company’s investment
objective, its principal risks and uncertainties and financial risk management
(note 16 to the Financial Statements), together with the viability assessment,
the Board is satisfied that the Company has adequate financial resources and
suitable management arrangements in place to continue as a going concern for
at least twelve months from the date of approval of the Financial Statements.
Accordingly, the Board continues to adopt the going concern basis in preparing
these Financial Statements.
Results
The principal purpose of the Company is to generate an income which is
currently framed on a 6p per Ordinary Share annual Dividend Target. The
ability to generate this is a central focus of the Portfolio Manager and the
Board. The Board intends to distribute an amount at least
equal to the value of the Company’s excess income, as defined in note 19 to
the Financial Statements, arising each financial year to the holders of
Ordinary Shares on an annual basis.
Importantly, the ability to achieve the Dividend Target is linked to market
conditions and the amount of risk the Company takes. In this regard, the
intention is not to increase the Company's risk profile simply to meet the
Dividend Target. That being said, where the anticipated rewards for higher
risk taking are attractive, the Company would be comfortable assuming more
tactical risk within appropriate parameters.
The results for the year are set out in the Statement of Comprehensive Income.
The Board declared dividends of £20,708,264 during the year ended 30
September 2025 (30 September 2024: £19,348,919), a breakdown of which can be
found in note 19 to the Financial Statements. The 30 September 2025
distribution which was declared on 9 October 2025 was paid on 31 October 2025.
Retained earnings, which include realised and unrealised gains and losses on
the Company’s assets, improved during the reporting period. These include
both investment assets, such as bonds, and foreign exchange and other
derivatives used purely for hedging, as well as all forms of income.
Securities purchased at a premium and large foreign exchange movements will
further impact retained earnings as will unfavourable market movements or
credit events.
Managing the portfolio to improve the retained earnings during favourable
market conditions or to maintain these during difficult market conditions is
also an aim of the Portfolio Manager. The ability to do this is fundamentally
impacted by the Dividend Target.
Portfolio Manager
The portfolio management fee is payable to the Portfolio Manager, TwentyFour
Asset Management LLP, monthly in arrears at a rate of 0.75% per annum of the
lower of NAV, which is calculated weekly on each valuation day and on the last
business day of each month, or market capitalisation of each class of share.
For additional information refer to note 14 to the Financial Statements. The
Portfolio Manager is also entitled to a commission of 0.175% of the aggregate
gross offering proceeds in relation to any issue of new shares.
The Board considers that the interests of Shareholders, as a whole, are best
served by the ongoing appointment of the Portfolio Manager to achieve the
Company’s investment objective.
Alternative Investment Fund Manager (“AIFM”)
Alternative investment fund management services are provided by Waystone
Management Company (IE) Limited (“Waystone”). The AIFM fee is subject to a
minimum fee of £65,000 per annum and is payable monthly in arrears at a rate
of 0.03% of the NAV of the Company below £250 million, 0.025% on Net Assets
between £250 million and £500 million, 0.02% on Net Assets between £500
million and £1 billion and 0.015% on Net Assets in excess of £1 billion. For
additional information, refer to note 15 to the Financial Statements.
Custodian and Depositary
Custody and Depositary services are provided by Northern Trust (Guernsey)
Limited. The terms of the Depositary agreement allow Northern Trust (Guernsey)
Limited to receive professional fees for services rendered. The Depositary
agreement includes custodian duties. For additional information, refer to note
15 to the Financial Statements.
Directors
The Directors of the Company during the year and as at the date of this report
are set out in the Corporate Information.
Directors' and Other Interests
The Directors of the Company held the following Ordinary Shares beneficially:
As at 30.09.25 As at 30.09.24
Number of Ordinary Shares Number of Ordinary Shares
Ashley Paxton 120,000 120,000
Sharon Parr 98,004 98,004
Wendy Dorey¹ 38,505 15,000
Richard Class² 75,000 50,000
1 On 1 October 2024, Wendy Dorey purchased 23,505 Ordinary Shares.
2 On 3 April 2025, Richard Class purchased 25,000 Ordinary Shares.
Corporate Governance
The Board is committed to high standards of corporate governance and has
implemented a framework for corporate governance which it considers to be
appropriate for an investment company in order to comply with the principles
of the UK Corporate Governance Code (the “UK Code”). The Company is also
required to comply with the Code of Corporate Governance issued by the
Guernsey Financial Services Commission (the “GFSC Code”).
The FCA requires all UK listed companies to disclose how they have complied
with the provisions of the UK Code. This Corporate Governance Statement,
together with the Going Concern Statement, Viability Statement and the
Statement of Directors’ Responsibilities, indicates how the Company has
complied with the principles of good governance of the UK Code and its
requirements on Internal Control.
The Company is a member of the AIC and by complying with the AIC Code of
Corporate Governance (the “AIC Code”) is deemed to comply with both the UK
Code and the GFSC Code.
The Board has considered the principles and recommendations of the AIC Code
and considers that reporting against these will provide better information to
Shareholders. To ensure ongoing compliance with these principles the Board
reviews a report from the Corporate Secretary regularly, identifying how the
Company is in compliance and identifying any changes that might be necessary.
The AIC Code is available on the AIC’s website, www.theaic.co.uk. The UK
Code is available in the Financial Reporting Council’s (“FRC”) website,
www.frc.org.uk and the GFSC Code is available at www.gfsc.gg.
Throughout the year ended 30 September 2025, the Company has complied with the
recommendations of the AIC Code and thus the relevant provisions of the UK
Code, except as set out below.
The UK Code includes provisions relating to:
* The role of the Chief Executive,
as required by principle G and provision 9;
* Executive Directors’ remuneration,
as required by principle Q and provision 40;
* Annually assessing the need for an internal audit
function, as envisaged by principle M and provision 25;
and
* The means for the workforce to raise concerns, as
required by principle E and provision 6.
For the reasons set out in the AIC Code, the Board considers the first three
provisions are not relevant to the position of the Company as it is an
externally managed investment company. The Company has therefore not reported
further in respect of these provisions. The fourth point is not applicable to
the Company as it has no employees.
Details of compliance with the AIC Code are noted below. There have been no
other instances of non-compliance, other than those noted above.
Role, Composition and Independence of the Board
The Board is the Company’s governing body and has overall responsibility for
maximising the Company’s success by directing and supervising the affairs of
the business and meeting the appropriate interests of Shareholders and
relevant stakeholders. A summary of the Board’s responsibilities is as
follows:
* statutory obligations and public disclosure;
* strategic matters and financial reporting;
* risk assessment and management including reporting
compliance, governance, monitoring and control; and
* other matters having a material effect on the
Company.
The Board’s responsibilities for the Annual Report and Audited Financial
Statements are set out in the Statement of Directors’ Responsibilities.
The Board consists of four non-executive Directors, all of whom are considered
to be independent of the Portfolio Manager and as prescribed by the UKLR.
Having undertaken a skills review, the Board considers it has the appropriate
balance of diverse skills and experience, independence and knowledge of the
Company and the wider sector. This enables it to discharge its duties and
responsibilities effectively and that no individual or group of individuals
dominates decision-making. The Chair is responsible for leadership of the
Board and ensuring its effectiveness.
The Chair is Ashley Paxton. The Chair of the Board must be, and is considered
to be, independent for the purposes of UKLR 11.2.12.
Biographies for all the Directors and their list of directorships in other
public listed companies (including cross directorships in those companies) can
be found in the Board Members section. Furthermore, no member of the Board:
* has any current or historical employment with the
Portfolio Manager; and
* has any current directorships in any other investment
funds managed by the Portfolio Manager.
The Board needs to ensure that the Annual Report and Audited Financial
Statements, taken as a whole, is fair, balanced and understandable and
provides the information necessary for Shareholders to assess the Company’s
position, performance, business model and strategy. In seeking to achieve
this, the Directors have set out the Company’s investment objective and
policy and have explained how the Board and its delegated committees operate
and how the Directors review the risk environment within which the Company
operates and set appropriate risk controls. Furthermore, throughout the Annual
Report and Audited Financial Statements, the Board has sought to provide
further information to enable Shareholders to have a fair, balanced and
understandable view.
The Board has contractually delegated activities related to the management of
its investment portfolio to the Portfolio Manager, risk management to the
AIFM, the arrangement of custodial and depositary services and the provision
of administration, accounting and company secretarial services including the
independent calculation of the Company’s NAV and the production of the
Annual Report and Financial Statements which are independently audited to the
Administrator and registrar functions to the Registrar.
The Board is responsible for the appointment and monitoring of all Service
Providers to the Company.
The Board is kept fully informed of investment and financial controls and
other matters by all Services Providers that are relevant to the business of
the Company and should be brought to the attention of the Board.
The Company has adopted a policy that the composition of the Board of
Directors, which is required by the Company’s Articles to comprise of at
least two persons, is at all times such that a majority of the Board is
independent of the Portfolio Manager and any company in the same group as the
Portfolio Manager; the Chair of the Board of Directors is free from any
conflicts of interest and is independent of the Portfolio Manager and of any
company in the same group as the Portfolio Manager; and that no more than one
director, partner, employee or professional adviser to the Portfolio Manager
or any company in the same group as the Portfolio Manager may be a Director of
the Company at any one time.
The Board has a breadth of experience relevant to the Company and the
Directors believe that any changes to the Board’s composition can be managed
without undue disruption. With any new director appointment to the Board,
consideration will be given as to what induction process is appropriate.
On 1 April 2025, Sharon Parr relinquished her role as the Chair of the
Remuneration and Nomination Committee and was appointed as Senior Independent
Director. Richard Class was appointed as the Chair of the Remuneration and
Nomination Committee on the same date. No immediate changes to the Board are
currently anticipated.
The Board believes that the current appointments provide an appropriate range
of skills, experience and diversity.
Directors’ Attendance at Meetings
The Board holds full quarterly Board meetings to discuss general management
including: dividend policy, structure, finance, corporate governance,
marketing, risk management, liquidity, compliance, asset allocation and
gearing, contracts and performance. The full quarterly Board meetings are the
principal source of regular information for the Board enabling it to determine
policy and to monitor performance, compliance and controls. These meetings are
also supplemented by communication and discussions throughout the year,
particularly the regular Board meetings to consider monthly dividends and
quarterly tenders.
A representative from each of the Portfolio Manager, AIFM, Administrator,
Custodian and Depositary and the Financial Adviser and Corporate Broker
attends each full quarterly Board meeting either in person or electronically,
thus enabling the Board to fully discuss and review the Company’s operation
and performance. Each Director has direct access to the Portfolio Manager and
Company Secretary and may, at the expense of the Company, seek independent
professional advice on any matter. Both appointment and removal of these
parties is to be agreed by the Board as a whole.
The Audit and Risk Committee meets at least twice a year, the Management
Engagement Committee and Remuneration and Nomination Committee meet at least
once a year, a dividend meeting is held monthly and there are additional
meetings covering the quarterly tenders as and when necessary. In addition, ad
hoc meetings of the Board to review specific items between the regular
scheduled quarterly meetings can be arranged. Between formal meetings, there
is regular contact with the Portfolio Manager, AIFM, Administrator, Custodian
and Depositary and the Financial Adviser and Corporate Broker, and an annual
strategy day.
Although some of the Directors hold other listed Board positions, the Board is
satisfied that they have sufficient time commitment to carry out their duties
for the Company as evidenced by their attendance during the year which was as
follows:
Board Meetings Audit and Risk Committee Meetings Management Engagement Committee Meetings Remuneration and Nomination Committee Meetings Ad hoc Committee Meetings
Held Attended Held Attended Held Attended Held Attended Held Attended
Ashley Paxton 4 4 4 4 1 1 1 1 19 15
Sharon Parr 4 4 4 4 1 1 1 1 19 17
Wendy Dorey 4 4 4 4 1 1 1 1 19 17
Richard Class 4 4 4 4 1 1 1 1 19 15
At the Board meetings, the Directors review the management of the Company’s
assets and liabilities and all other significant matters to ensure that the
Directors maintain overall control and supervision of the Company’s affairs.
Election of Directors
The election of Directors is set out in the Directors’ Remuneration Report.
Board Performance and Training
On appointment to the Board, Directors will be offered relevant training and
induction. Training is an on-going matter as is discussion on the overall
strategy of the Company.
On appointment to the Board, each Director considered the expected time needed
to discharge their responsibilities effectively. The Directors confirmed that
each had sufficient time available and would inform the Board of any
subsequent changes.
In November 2024, the Board appointed an external independent consultant,
Stogdale St James Limited, which completed an independent board evaluation and
formally presented its findings at the March 2025 quarterly Board meeting. All
recommendations were fully implemented, which included the appointment of a
Senior Independent Director.
Criminal Finances Act 2017
In respect of the Criminal Finances Act 2017 which has introduced a new
corporate criminal offence (“CCO”) of ‘failing to take reasonable steps
to prevent the facilitation of tax evasion’, the Board confirms that they
are committed to zero tolerance towards the criminal facilitation of tax
evasion.
Retirement by Rotation
Under the terms of their appointment, each Director is required to retire by
rotation and be subject to re-election at least every three years. The
Directors are also required to seek re-election if they have already served
for more than nine years. The Company may terminate the appointment of a
Director immediately on serving written notice and no compensation is payable
upon termination of office as a director of the Company becoming effective.
All Directors typically stand for re-election annually and all were re-elected
with votes in favour in excess of 90% at the AGM.
Board Committees and their Activities
Terms of Reference
All Terms of Reference of the Board’s Committees are available from the
Administrator upon request.
Management Engagement Committee
The Board has established a Management Engagement Committee with formal duties
and responsibilities. The Management Engagement Committee commits to meeting
at least once a year and comprises the entire Board. Wendy Dorey serves as
chair. The duties and responsibilities include the regular review of the
performance, fees and contractual arrangements with the Portfolio Manager and
other Service Providers and the preparation of the Committee’s annual
opinion as to the Portfolio Manager’s services.
The Management Engagement Committee carried out its review of the performance
and capabilities of the Portfolio Manager at its meeting during the year and
the Board recommended the continued appointment of TwentyFour Asset Management
LLP as Portfolio Manager to be in the best interest of the Company.
The Board conducts an annual strategy day with the Portfolio Manager at their
offices and did so in November 2024 and 2025 when they met with various
TwentyFour staff and representatives of Deutsche Numis. In addition, the Board
has attended various investor days and webinar presentations given by the
Portfolio Manager.
The Board considers that the interests of Shareholders, as a whole, are best
served by the ongoing appointment of the Custodian and Depositary and AIFM, to
achieve the Company’s investment objective.
Audit and Risk Committee
An Audit and Risk Committee has been established consisting of all Directors.
Sharon Parr serves as chair. The terms of reference of the Audit and Risk
Committee provide that the committee shall be responsible, amongst other
things, for reviewing the Interim and Annual Financial Statements, considering
the appointment and independence of the External Auditor, discussing with the
External Auditor the scope of the audit and reviewing the Company’s
compliance with the AIC Code.
Further details on the Audit and Risk Committee can be found in the Audit and
Risk Committee Report.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee has been established consisting of
all Directors. On 1 April 2025, Sharon Parr relinquished the position of Chair
of this committee and Richard Class was appointed as her successor.
The Committee met twice during the year on 8 April 2025 and 3 September 2025.
The Board discussed diversity of the Board and it was noted that the current
split of the board, comprising 50% men and 50% women, remained within the
gender diversity guidelines. Whilst the Board has not met the target to have
one director from a minority ethnic background, it considers this satisfactory
due to the cognitive diversity of the members of the Board and the difference
in social, educational and work experience backgrounds of its constituent
members.
The Committee also presented an analysis of the Directors’ fees against
relevant industry comparatives. Following a review of
the current market standard, the Committee decided to award fee increases
effective 1 April 2025. Further details are set out in Directors’
Remuneration Report.
International Tax Reporting
For purposes of the US Foreign Account Tax Compliance Act, the Company
registered with the US Internal Revenue Service (“IRS”) as a Guernsey
reporting Foreign Financial Institution (“FFI”), received a Global
Intermediary Identification Number (E5XSVA.99999.SL.831), and can be found on
the IRS FFI list.
The Common Reporting Standard (“CRS”) is a global standard for the
automatic exchange of financial account information developed by the
Organisation for Economic Co-operation and Development (“OECD”), which has
been adopted in Guernsey.
The Board ensures that the Company is compliant with Guernsey regulations and
guidance in this regard. The activities of the Company do not constitute
relevant activities as defined by the Income Tax (Substance Requirements)
(Implementation) Regulations, 2018 (as amended) and as such, the Company was
out of scope.
Strategy
The strategy for the Company is to capture the illiquidity premium that is
associated with ‘off the run’ bond issues. By remaining highly selective
and without conceding any underlying credit quality, the strategy targets a
monthly distribution of 0.5p per Ordinary Share, with all excess income, as
discussed in the Results section of the Directors’ Report, being distributed
to investors at the year end of the Company.
Internal Controls
The Board is ultimately responsible for establishing and maintaining the
Company’s system of internal financial and operating control and for
maintaining and reviewing its effectiveness. The Company’s risk matrix
continues to be the core element of the Company’s risk management process in
establishing the Company’s system of internal financial and reporting
control. The risk matrix is prepared and maintained by the Board which
initially identifies the risks facing the Company and then collectively
assesses the likelihood of each risk, the impact of those risks and the
strength of the controls operating over each risk. The system of internal
financial and operating control is designed to manage rather than to eliminate
the risk of failure to achieve business objectives and by their nature can
only provide reasonable and not absolute assurance against misstatement and
loss.
These controls aim to ensure that assets of the Company are safeguarded,
proper accounting records are maintained and the financial information for
publication is reliable. The Board confirms that there is an ongoing process
for identifying, evaluating and managing the significant risks faced by the
Company.
This process has been in place for the year under review and up to the date of
approval of this Annual Report and Audited Financial Statements and is
reviewed by the Board and is in accordance with the AIC Code.
The AIC Code requires Directors to conduct, at least annually, a review of the
Company’s system of internal financial and operating control, covering all
controls, including financial, operational, compliance and risk management.
The Board has evaluated the systems of internal controls of the Company. In
particular, it has prepared a process for identifying and evaluating the
significant risks affecting the Company and the policies by which these risks
are managed. The Board also considers whether the appointment of an internal
auditor is required and has determined that there is no requirement for a
direct internal audit function.
The Board has delegated the day-to-day responsibilities for the management of
the Company’s investment portfolio, the provision of custodial and
depositary services and administration, accounting, registrar and company
secretarial functions including the independent calculation of the Company’s
NAV and the production of the Annual Report and Financial Statements which are
independently audited.
Formal contractual agreements have been put in place between the Company and
providers of these services. Even though the Board has delegated
responsibility for these functions, it retains accountability for these
functions and is responsible for the systems of internal control. At each
quarterly Board meeting, compliance reports are provided by the Administrator,
Company Secretary, Portfolio Manager, AIFM and Depositary. The Board also
receives confirmation from the Administrator of its accreditation under its
Service Organisation Controls 1 report. The Portfolio Manager also has an
International Standard on Assurance Engagements No. 3402 report that is being
considered by the Board.
Significant Shareholdings
Shareholders with holdings of more than 5.0% of the Ordinary Shares of the
Company at 12 November 2025 were as follows:
Number of shares Percentage of issued share capital
Hargreaves Lansdown (Nominees) Limited 15942 25,892,379 8.04%
Lawshare Nominees Limited SIPP 22,727,640 7.06%
Hargreaves Lansdown (Nominees) Limited VRA 21,228,830 6.60%
Interactive Investor Services Nominees Limited SMKTISAS 21,011,642 6.53%
Huntress (CI) Nominees Limited KGCLT 20,311,225 6.31%
Shareholders are responsible for notifying the Company of any change to their
shareholdings on the basis of thresholds 5%, 10%, 15%, 20%, 25%, 30%, 50% and
75% of the issued share capital as required by DTR 5.1.2R. The Company has not
been notified of any single shareholder with shareholdings reaching any of
these thresholds.
Independent Auditor
A resolution for the reappointment of PricewaterhouseCoopers CI LLP was
proposed and approved at the AGM on 14 August 2025.
Signed on behalf of the Board of Directors on 10 December 2025 by:
Ashley Paxton
Sharon Parr
Chair
Senior Independent Director
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Audited
Financial Statements in accordance with applicable Guernsey law and
regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial
statements for each financial year. Under that law, they have elected to
prepare the Financial Statements in accordance with IFRS Accounting Standards
and applicable law.
The Financial Statements are required by law to give a true and fair view of
the state of affairs of the Company and of the profit or loss of the Company
for that year.
In preparing these Financial Statements, the Directors are required to:
* select suitable accounting policies and then apply
them consistently;
* make judgements and estimates that are reasonable and
prudent;
* state whether applicable accounting standards 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.
The Directors confirm that they have complied with these requirements in
preparing the Financial Statements.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the Financial Statements have been
properly prepared in accordance with The Companies (Guernsey) Law, 2008. They
have general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Company and to prevent and detect fraud
and other irregularities.
So far as the Directors are aware, there is no relevant audit information of
which the Company’s Auditor is unaware, and each Director has taken all the
steps that he or she ought to have taken as a Director in order to make
himself or herself aware of any relevant audit information and to establish
that the Company’s Auditor is aware of that information.
The Directors are responsible for the oversight of the maintenance and
integrity of the corporate and financial information in relation to the
Company website; the work carried out by the Auditor does not involve
consideration of these matters and, accordingly, the Auditor accepts no
responsibility for any changes that may have occurred to the Financial
Statements since they were initially presented on the website.
Legislation in Guernsey governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
The Directors confirm that to the best of their knowledge:
(a) The Financial Statements have been prepared in
accordance with IFRS Accounting Standards and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company as
at and for the year ended 30 September 2025.
(b) The Annual Report includes information
detailed in the Chair’s Statement, Portfolio Manager’s Report, Strategic
Report, Directors’ Report, Statement of Directors’ Responsibilities,
Directors’ Remuneration Report, Audit and Risk Committee Report, Alternative
Investment Fund Manager’s Report and Depositary Statement provides a fair
review of the information required by:
(i) DTR 4.1.8 and DTR
4.1.9 of the Disclosure and Transparency Rules, being a fair review of the
Company business and a description of the principal risks and uncertainties
facing the Company; and
(ii) DTR 4.1.11 of the
Disclosure and Transparency Rules, being an indication of important events
that have occurred since the end of the financial year and the likely future
development of the Company.
In the opinion of the Board, the Financial Statements taken as a whole, are
fair, balanced and understandable and provide the information necessary to
assess the Company’s position and performance, business model and strategy.
By order of the Board,
Ashley Paxton
Sharon Parr
Chair
Senior Independent Director
10 December 2025
DIRECTORS’ REMUNERATION REPORT
The Directors' Remuneration Report has been prepared in accordance with the
AIC Code.
Remuneration Policy
The Company's policy in relation to Directors' remuneration is to ensure that
the Company maintains a competitive fee structure to recruit, retain and
motivate non-executive Directors of excellent quality in the overall interests
of Shareholders.
It is the responsibility of the Remuneration and Nomination Committee to
determine and approve the Directors' remuneration, who will have given the
matter proper consideration, having regard to the level of fees payable to
non-executive Directors in the industry generally, the role that individual
Directors fulfil in respect of Board and Committee responsibilities and the
time committed to the Company's affairs. The Chair's remuneration is decided
separately and is approved by the Board as a whole.
No element of the Directors' remuneration is performance related, nor does any
Director have any entitlement to pensions, share options or any long-term
incentive plans from the Company.
Remuneration
The Directors of the Company are remunerated for their services at such a rate
as the Directors determine, provided that the aggregate amount of such fees
does not exceed £250,000 per annum.
Directors are remunerated in the form of fees, payable quarterly in arrears,
to the Director personally. No Directors have been paid additional
remuneration by the Company outside their normal Directors’ fees and
expenses.
With respect to the years ended 30 September 2025 and 30 September 2024, the
Directors received the following remuneration in the form of Directors’
fees:
2025 2024
£ £
Ashley Paxton 49,000 45,000
Sharon Parr 43,000 40,000
Wendy Dorey 38,500 37,000
Richard Class (appointed 1 November 2023) 37,500 32,099
Total 168,000 154,099
Following a review of external market data, the Committee recommended the
following Directors’ fee per annum increases with effect from 1 April 2025:
Ashley Paxton as Chair of the Board Increase to £53,000
Sharon Parr as Chair of the Audit and Risk Committee and Increase to £46,000
Senior Independent Director
Wendy Dorey as Chair of the Management Engagement Committee Increase to £40,000
Richard Class as Chair of the Remuneration and Nomination Committee Increase to £40,000
The base director fee level was also increased from £35,000 to £37,000 per
annum.
Appropriate Directors' and Officers’ liability insurance cover is maintained
by the Company on behalf of the Directors.
The Directors were appointed as non-executive Directors by letters issued on
the respective dates of appointment. Each Director’s appointment letter
provides that, upon the termination of their appointment, that they must
resign in writing and all records remain the property of the Company. The
Directors’ appointments can be terminated in accordance with the Articles
and without compensation.
There is no notice period specified in the Articles for the removal of
Directors. The Articles provide that the office of Director shall be
terminated by, among other things: (a) written resignation; (b) unauthorised
absences from board meetings for six months or more; (c) unanimous written
request of the other Directors; and (d) an ordinary resolution of the Company.
Under the terms of their appointment, each Director is required to retire by
rotation and be subject to re-election at least every three years but have
opted for annual re-election. The Directors are required to seek re-election
if they have already served for more than nine years. At the 14 August 2025
AGM, all Directors were re-elected to the Board. The Company may terminate the
appointment of a Director immediately on serving written notice and no
compensation is payable upon termination of office as a director of the
Company becoming effective.
The amounts payable to Directors shown in note 14 to the Financial Statements
are for services as non-executive Directors.
No Director has a service contract with the Company, nor are any such
contracts proposed.
Signed on behalf of the Board of Directors on 10 December 2025 by:
Richard Class
Chair, Remuneration and Nomination Committee
AUDIT AND RISK COMMITTEE REPORT
We present the Audit and Risk Committee's (“ARC”) Report, setting out the
responsibilities of the ARC and its key activities for the year ended 30
September 2025.
The ARC has reviewed the appropriateness of the Company’s system of risk
management and internal financial and operating controls, the robustness and
integrity of the Company’s financial reporting, along with the external
audit process. The ARC has devoted time to ensuring that controls and
processes have been properly established, documented and implemented.
The Company’s risk exposure and the effectiveness of its risk
management and internal control systems are contained within the Company’s
risk matrix, and the risk matrix was regularly reviewed by the ARC during the
year and subsequently by the Board.
During the year, the information that the ARC received has been timely and
clear and has enabled the Committee to discharge its duties effectively.
Role and Responsibilities
The primary function of the ARC is to assist the Board in fulfilling its
oversight responsibilities. This includes reviewing the financial reports and
other financial information and any significant financial judgement contained
therein, before publication.
In addition, on a continuing basis, the ARC reviews the systems of internal
financial and operating controls which the Administrator, Portfolio Manager,
AIFM, Custodian, Depositary and the Board have established with respect to
finance, accounting, risk management, compliance, fraud and audit. The ARC
also reviews the accounting and financial reporting processes, along with
reviewing the roles, independence and effectiveness of the External Auditor,
PricewaterhouseCoopers CI LLP ("PwC").
The ultimate responsibility for reviewing and approving the Annual and Interim
Financial Statements remains with the Board.
The ARC's full terms of reference can be obtained by contacting the Company's
Administrator.
Risk Management and Internal Control
The Board considers the nature and extent of the Company’s risk management
framework and the risk profile that is acceptable in order to achieve the
Company’s strategic objectives. As a result, it is considered that the Board
has fulfilled its obligations under the AIC Code.
The ARC continues to be responsible for reviewing the adequacy and
effectiveness of the Company’s on-going risk management systems and
processes. Its system of internal controls, along with its design and
operating effectiveness, is subject to review by the ARC through reports
received from the Portfolio Manager, AIFM and Custodian and Depositary, along
with those from the Administrator and External Auditor.
Fraud, Bribery and Corruption
The Board has relied on the overarching requirement placed on the Service
Providers under the relevant agreements to comply with applicable law,
including anti-bribery laws. A review of the Service Provider policies took
place at the Management Engagement Committee Meeting on 12
March 2025. The Board receives confirmation from all
Service Providers that they have not been involved in any
fraud, bribery or corruption.
Financial Reporting and Significant Financial Issues
The ARC assesses whether suitable accounting policies have been adopted and
whether the Portfolio Manager has made appropriate estimates and judgements.
The ARC reviews accounting papers prepared by the Portfolio Manager and
Administrator which provide details on the main financial reporting
judgements.
The ARC also reviews reports by the External Auditors which highlight any
issues with respect to the work undertaken on the audit.
The significant areas considered during the year by the ARC in relation to the
Financial Statements and how they were addressed are detailed below:
(i) Valuation of investments:
The Company’s investments had a fair value of £266,874,240 as at 30
September 2025 (30 September 2024: £205,443,235) and represent
s the key constituent of net assets of the
Company. These investments are valued in accordance with the Accounting
Policies set out in notes 2 and 3 to the Financial Statements. The ARC
considered the valuation of the investments held by the Company as at 30
September 2025 to be reasonable based on information provided by the Portfolio
Manager, AIFM, Administrator, Custodian and Depositary on their processes for
the valuation of these investments. In order to obtain more accurate pricing
information, a range of pricing sources, including model-based valuations for
a small minority of positions, has been used.
(ii) Income recognition:
The ARC considered the calculation of income from investments recorded in the
Financial Statements for the year ended 30 September 2025. As disclosed in
note 3(ii)(b) of the Notes to the Financial Statements, the estimated life of
credit securities is determined by the Portfolio Manager and can impact the
effective interest rate of the credit securities which in turn could impact
the calculation of income from investments. The Board
reviews relevant information supplied by the Portfolio Manager, on an ongoing
basis, which presents the expected life of the Company's investments and have
found them to be reasonable based on the explanations provided and information
obtained from the Portfolio Manager. The External Auditor also reviews the
processes and methodology supporting this information. The ARC was satisfied
that income was appropriately stated in all material aspects in the Financial
Statements.
Following a review of the presentations and reports from the Portfolio Manager
and Administrator and consulting where necessary with the External Auditor,
the ARC is satisfied that the Financial Statements appropriately address, both
in respect to the amounts reported and the disclosures, the critical
judgements and key estimates. The ARC is also satisfied that the significant
assumptions used for determining the value of assets and liabilities have been
appropriately reviewed, challenged and are sufficiently robust.
To understand and monitor the Company stakeholder universe, the ARC maintains
a stakeholder matrix. This aims to identify stakeholder
interests and monitor how these evolve and potentially impact the Company
today and in the future. The matrix is reviewed at
least annually.
The Company’s reporting currency is Pound sterling even though a significant
proportion of the investments owned are denominated in other currencies. The
Company operates a hedging strategy designed to mitigate the impact of foreign
currency rate changes on the performance of the Company. The ARC has used
information from the Administrator and Portfolio Manager to satisfy itself
concerning the effectiveness of the hedging process, as well as to confirm
that realised and unrealised foreign currency gains and losses have been
correctly recorded , and to reaffirm that the use of
sterling as the Company’s functional currency remains appropriate.
At the ARC meeting to review the Annual Report and Audited Financial
Statements, the ARC received a report and presentation from its External
Auditor on the key findings from its audit, and the ARC is consequently
satisfied that the External Auditor has fulfilled its responsibilities with
diligence and professional scepticism. The ARC advised the Board that these
Annual Financial Statements, taken as a whole, are fair, balanced and
understandable.
The ARC is satisfied that the judgements made by the Portfolio Manager and
Administrator are reasonable, and that appropriate disclosures have been
included in the Financial Statements.
External Auditor
The ARC has responsibility for making a recommendation on the appointment,
re-appointment and removal of the External Auditor.
During the year, the ARC received and reviewed audit plans and reports from
the External Auditor. As standard practice, the External Auditor meets
privately with the ARC without the Portfolio Manager and other Service
Providers being present.
To assess the effectiveness of the external audit process, the Auditor was
asked to articulate the steps that they have taken to ensure objectivity and
independence, including where the Auditor provides non-audit services. The ARC
monitors the Auditor’s performance, behaviour and effectiveness during the
exercise of their duties, which informs the decision to recommend
reappointment on an annual basis. Other than the interim review for the period
ended 31 March 2025, no non-audit services have been performed for the Company
by the Auditor.
The Company is considered to be a market traded company based on the Institute
of Chartered Accountants in England and Wales Crown Dependencies’ Audit
Rules and Guidance. As such, the Auditor is required to apply the FRC Ethical
Standards of 2019.
The FRC Ethical Standards require that the audit engagement leaders on listed
entities are rotated at least every 5 years. Adrian Peacegood is currently in
his third year as the Company's audit engagement leader and may serve for a
maximum of five years.
During the year, the FRC conducted a review of the audit performed by PwC of
the Company’s financial statements for the year ended 30 September 2024. The
ARC is pleased to note that no matters were identified by the FRC that were
considered to be of sufficient significance to be included in their report.
The following table summarises the remuneration paid to PwC and to other PwC
member firms for audit and non-audit services in respect of the year ended 30
September 2025 and for the year ended 30 September 2024.
Year ended Year ended
30.09.25 30.09.24
PricewaterhouseCoopers CI LLP - Assurance work £ £
- Annual audit of the Company 145,120 144,876
- Interim review (audit related non-audit services) 26,950 27,467
PricewaterhouseCoopers CI LLP – Non assurance work nil nil
- Ratio of assurance to non-assurance work 100% / nil 100% / nil
For any questions on the activities of the ARC not addressed in the foregoing,
a member of the ARC remains available to attend each AGM to respond to such
questions.
The ARC Report was approved by the ARC and signed on its behalf by:
Sharon Parr
Chair, Audit and Risk Committee
10 December 2025
ALTERNATIVE INVESTMENT FUND MANAGER’S REPORT
Waystone Management Company (IE) Limited acts as the Alternative Investment
Fund Manager (“AIFM”) of TwentyFour Select Monthly Income Fund Limited
(“the Company”) providing portfolio management and risk management
services to the Company. This report covers the period from 1 October 2024 to
30 September 2025.
The AIFM has delegated the following of its alternative investment fund
management functions:
* It has delegated the portfolio management function for listed and
unlisted investments to TwentyFour Asset Management LLP.
The AIFM is required by the Alternative Investment Fund Managers Directive
2011, 61/EU (the “AIFM Directive”) and all applicable rules and
regulations implementing the AIFM Directive in Ireland (the “AIFM Rules”):
* to make the annual report available to investors and to ensure
that the annual report is prepared in accordance with applicable accounting
standards, the Company’s articles of incorporation and the AIFM Rules and
that the annual report is audited in accordance with International Standards
on Auditing;
* be responsible for the proper valuation of the Company’s
assets, the calculation of the Company’s net asset value and the publication
of the Company’s net asset value;
* to make available to the Company’s Shareholders, a description
of all fees, charges and expenses and the amounts thereof, which have been
directly or indirectly borne by them; and
* ensure that the Company’s Shareholders have the ability to
redeem their share in the capital of the Company in a manner consistent with
the principle of fair treatment of investors under the AIFM Rules and in
accordance with the Company’s redemption policy and its obligations.
The AIFM is required to ensure that the annual report contains a report that
shall include a fair and balanced review of the activities and performance of
the Company, containing also a description of the principal risks and
investment or economic uncertainties that the Company might face.
AIFM Remuneration
The AIFM has designed and implemented a remuneration policy (the “Policy”)
in line with the provisions of S.I. 257 of 2013 European Union (Alternative
Investment Fund Managers) Regulations 2013 (the “AIFM Regulations”), S.I.
352 of 2011 European Communities (Undertakings for Collective Investment in
Transferable Securities) Regulations 2011 (as amended) (the “UCITS
Regulations”) and of the ESMA Guidelines on sound remuneration policies
under the UCITS Directive and AIFMD (the “ESMA Guidelines”). The Policy is
designed to ensure that the remuneration of key decision makers is aligned
with the management of short and long-term risks, including the oversight and
where appropriate the management of sustainability risks in line with the
Sustainable Finance Disclosure Regulations.
The AIFM’s remuneration policy applies to its identified staff whose
professional activities might have a material impact on the Company’s risk
profile and so covers senior management, risk takers, control functions and
any employees receiving total remuneration that takes them into the same
remuneration bracket as senior management and risk takers and whose
professional activities have a material impact on the risk profile of the
Company. The AIFM’s policy is to pay identified staff a fixed component with
the potential for identified staff to receive a variable component. It is
intended that the fixed component will represent a sufficiently high
proportion of the total remuneration of the individual to allow the AIFM to
operate a fully flexible policy, with the possibility of not paying any
variable component. When the AIFM pays a variable component as performance
related pay certain criteria, as set out in the AIFM’s remuneration policy,
must be adhered to. The various remuneration components are combined to ensure
an appropriate and balanced remuneration package that reflects the relevant
staff rank and professional activity as well as best market practice. The
AIFM’s remuneration policy is consistent with, and promotes, sound and
effective risk management and does not encourage risk-taking which is
inconsistent with the risk profile of the funds it manages.
These disclosures are made in respect of the remuneration policies of the
AIFM. The disclosures are made in accordance with the ESMA Guidelines.
Total remuneration (in EUR) paid to the identified staff of the AIFM fully or
partly involved in the activities of the Company that have a material impact
on the Company’s risk profile during the financial year to 31 December 2024
(the AIFM’s financial year):
Fixed remuneration EUR GBP
Senior Management 3,377,918 2,859,811
Other identified staff - -
Variable remuneration
Senior Management 732,296 619,976
Other identified staff - -
Total remuneration paid 4,110,214 3,479,787
Number of identified staff – 20
Neither the AIFM nor the Company pays any fixed or variable remuneration to
identified staff of the Portfolio Manager.
There have been no material changes made to the Remuneration Policy or the
AIFM’s remuneration practices and procedures during the financial year.
In so far the AIFM is aware:
* there is no relevant audit information of which the
auditor of the Company or the board of directors of the Company are unaware;
and
* The AIFM has taken all steps that it ought to have
taken to make itself aware of any relevant audit information and to establish
that the auditor is aware of that information.
We hereby certify that this report is made on behalf of the AIFM, Waystone
Management Company (IE) Limited.
Peadar De Barra
Waystone Management Company (IE) Limited
10 December 2025
DEPOSITARY STATEMENT
For the year ended 30 September 2025
Report of the Depositary to the Shareholders
Northern Trust (Guernsey) Limited has been appointed as Depositary to
TwentyFour Select Monthly Income Fund Limited (the “Company”) in
accordance with the requirements of Article 36 and Articles 21(7), (8) and (9)
of the Directive 2011/61/EU of the European Parliament and of the Council of 8
June 2011 on Alternative Investment Fund Managers and amending Directives
2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No
1095/2010 (the “AIFM Directive”).
We have enquired into the conduct of Waystone Management Company (IE) Limited
(the “AIFM”) and the Company for the year ended 30 September 2025, in our
capacity as Depositary to the Company.
This report including the review provided below has been prepared for and
solely for the Shareholders of the Company. We do not, in giving this report,
accept or assume responsibility for any other purpose or to any other person
to whom this report is shown.
Our obligations as Depositary are stipulated in the relevant provisions of the
AIFM Directive and the relevant sections of Commission Delegated Regulation
(EU) No 231/2013 (collectively the “AIFMD legislation”) and The Authorised
Closed-Ended Investment Scheme Rules and Guidance, 2021.
Amongst these obligations is the requirement to enquire into the conduct of
the AIFM and the Company and their delegates in each annual accounting period.
Our report shall state whether, in our view, the Company has been managed in
that period in accordance with the AIFMD legislation. It is the overall
responsibility of the AIFM and the Company to comply with these provisions. If
the AIFM, the Company or their delegates have not so complied, we as the
Depositary will state why this is the case and outline the steps which we have
taken to rectify the situation.
The Depositary and its affiliates are or may be involved in other financial
and professional activities which may on occasion cause a conflict of interest
with its roles with respect to the Company. The Depositary will take
reasonable care to ensure that the performance of its duties will not be
impaired by any such involvement and that any conflicts which may arise will
be resolved fairly and any transactions between the Depositary and its
affiliates and the Company shall be carried out as if effected on normal
commercial terms negotiated at arm’s length and in the best interests of
Shareholders.
Basis of Depositary Review
The Depositary conducts such reviews as it, in its reasonable discretion,
considers necessary in order to comply with its obligations and to ensure
that, in all material respects, the Company has been managed (i) in accordance
with the limitations imposed on its investment and borrowing powers by the
provisions of its constitutional documentation and the appropriate regulations
and (ii) otherwise in accordance with the constitutional documentation and the
appropriate regulations. Such reviews vary based on the type of fund, the
assets in which a fund invests and the processes used, or experts required, in
order to value such assets.
Review
In our view, the Company has been managed during the year, in all material
respects:
(i) in accordance with the limitations imposed on the
investment and borrowing powers of the Company by the constitutional document;
and by the AIFMD legislation; and
(ii) otherwise in accordance with the provisions of the
constitutional document; and the AIFMD legislation.
For and on behalf of
Northern Trust (Guernsey) Limited
10 December 2025
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TWENTYFOUR SELECT MONTHLY INCOME FUND LIMITED
Report on the audit of the financial statements
Our opinion
In our opinion, the financial statements give a true and
fair view of the financial position of TwentyFour Select Monthly Income Fund
Limited (the “company”) as at 30 September 2025, and of its financial
performance and its cash flows for the year then ended in accordance with
IFRS Accounting Standards as issued by the International
Accounting Standards Board (“IFRS Accounting Standards”)
and have been properly prepared in accordance with the
requirements of The Companies (Guernsey) Law, 2008.
What we have audited
The company’s financial statements comprise:
· the statement of
financial position as at 30 September 2025;
· the statement of comprehensive income
for the year then ended;
· the statement of changes in equity for
the year then ended;
· the statement of cash flows for the
year then ended; and
· the notes to the financial statements,
comprising material accounting policy information and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(“ISAs”). Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the
financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the company in accordance with the
ethical requirements that are relevant to our audit of the
financial statements of the company, as required by the Crown Dependencies’
Audit Rules and Guidance. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
Our audit approach
Overview
Audit scope · The company is incorporated and based in Guernsey. · We conducted our audit of the financial statements based upon the financial records maintained by Northern Trust International Fund Administration Services (Guernsey) Limited (the “Administrator”) to whom the Board of directors (the “Board”) has delegated the administration functions of the company. The Board engages TwentyFour Asset Management LLP (the “Portfolio Manager”) to manage the company’s investment portfolio. We have interacted
with both the Administrator and the Portfolio Manager during our audit. · We conducted all our audit work in Guernsey. · We tailored the scope of our audit taking into account the types of investments within the company, the accounting processes and controls, and the industry in which the company operates.
Key audit matters · Valuation of investments
Materiality · Overall materiality: £5.45 million (2024: £4.40 million) based on 2% of total net assets. · Performance materiality: £4.09 million (2024: £3.30 million).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
considered where the directors made subjective judgements;
for example, in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently
uncertain. As in all of our audits, we also addressed the risk of management
override of internal controls, including among other matters, consideration of
whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditor’s professional
judgement, were of most significance in the audit of the financial statements
of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by the auditor,
including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters, and any comments we make on the results of our
procedures thereon, were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter How our audit addressed the key audit matter
Valuation of Investments
Investments are designated as financial assets at fair value through profit or loss on the statement of financial position with a fair value of £266.9 million as at 30 September 2025 which represent a significant balance on the statement of financial position. The company’s investment policy is to invest in a diversified portfolio of credit securities that are measured at fair value in accordance with the policies set out in note 2(e) to the financial statements. The fair value of investments and movement therein are further disclosed in notes 9 and 17 respectively to the financial statements. To determine the fair value of these investments, the Administrator and the Portfolio Manager obtains prices from independent pricing service providers, third party brokers or dealers for the relevant investments which may be indicative rather than tradable. If these are unavailable, the Portfolio Manager will determine the valuation based on either a comparable arm’s length transaction, referenced to other securities that are substantially the same, discounted cash flow analysis or other valuation techniques commonly used by market participants. The Portfolio Manager has also engaged an independent valuation expert to provide the valuation of investments classified as level 3, these amounted to £6.12 million as at 30 September 2025. Investment valuations are subject to estimates and assumptions underlying each security as detailed under note 3(ii) to the financial statements. Owing to the significance of the carrying value of investments to the financial statements, the level of subjectivity that could be applied in measuring their fair value, the risk of manipulation or error could be material and as a result we have designated the valuation of investments as a key audit matter. • We obtained an understanding of the internal control environments at both the Administrator and the Portfolio Manager and evaluated the Administrator's controls over the valuation of investments. • We assessed compliance of the accounting policy for
investment valuation with IFRS Accounting Standards. • We sought to independently reprice the company’s investment portfolio. Prices were obtained from a range of independent sources, including exchange traded and consensus prices: Where we were
unable to obtain independent prices, or individual investment prices obtained exceeded our initial tolerable variance threshold, supporting evidence for these prices was obtained from the Administrator and/or the Portfolio Manager, as applicable. We
also assessed the independence, reputation, and reliability of the evidence obtained and evaluated all variances exceeding our tolerable thresholds. • To assess the reasonableness of the pricing sources, for a sample of investment disposals, we compared
the disposal price to the most recently recorded valuation prior to the disposal. • Where the Portfolio Manager has engaged an independent valuation expert to value level 3 investments, we: Understood the valuation methodology and assessed its
appropriateness, being discounted cash flow modelling. Obtained the models directly from the management’s independent valuation expert; Selected a sample, understood how the inputs were derived and agreed the valuation inputs, such as collateral
loan amounts, interest rates and maturity dates to the underlying source data; Assessed the reasonableness of the assumptions used in the management’s independent valuation expert’s model for a select sample. This included benchmarking the assumptions
to work performed by our auditor's valuation experts in the prior year and conducting our independent research in the current year; and Assessed the independence, reputation, competence and objectivity of the management’s independent valuation expert
and reliability of their work through reviewing their terms of engagement, industry research and our prior experience with the management’s expert. Based on our work performed, we did not identify any material matters to report to those charged with
governance.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the company, the accounting processes and controls,
the industry in which the company operates, and we considered the risk of
climate change and the potential impact thereof on our audit approach.
Materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole as follows:
Overall materiality £5.45 million (2024: £4.40 million).
How we determined it 2% of total net assets.
Rationale for benchmark applied We believe that total net assets is the most appropriate benchmark because this is the key metric of interest to investors. It is also a generally accepted measure used for companies in this industry.
We use performance materiality to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2024:
75%) of overall materiality, amounting to £4.09 million
(2024: £3.30 million) for the company financial
statements.
In determining the performance materiality, we considered a number of factors
– the history of misstatements, risk assessment and aggregation risk and the
effectiveness of controls - and concluded that an amount at the upper end
of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements
identified during our audit above £272,700 (2024: £219,700) as well as
misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
Reporting on other information
The other information comprises all the information included in the Annual
Report and Audited Financial Statements (the “Annual Report”) but does not
include the financial statements and our auditor’s report thereon.
The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report
that fact. We have nothing to report based on these responsibilities.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities,
the directors are responsible for the preparation of the
financial statements that give a true and fair view in accordance with IFRS
Accounting Standards, the requirements of Guernsey law and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so .
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Our audit testing might include testing complete populations of certain
transactions and balances, possibly using data auditing techniques. However,
it typically involves selecting a limited number of items for testing, rather
than testing complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the
population from which the sample is selected.
As part of an audit in accordance with ISAs, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of
material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
· Obtain an understanding of internal
control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control.
· Evaluate the appropriateness of
accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
· Conclude on the appropriateness of the
directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the company’s
ability to continue as a going concern over a period of at least twelve months
from the date of approval of the financial statements. If we conclude that a
material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the company to cease to
continue as a going concern.
· Evaluate the overall presentation,
structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Use of this report
This report, including the opinions, has been prepared for and only for the
members as a body in accordance with Section 262 of The Companies (Guernsey)
Law, 2008 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Report on other legal and regulatory requirements
Company Law exception reporting
Under The Companies (Guernsey) Law, 2008 we are required to report to you if,
in our opinion:
· we have not received all the
information and explanations we require for our audit;
· proper accounting records have not been
kept; or
· the financial statements are not in
agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation
to going concern, longer-term viability
and that part of the corporate governance statement relating to the
company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the
corporate governance statement as other information are described in the
Reporting on other information section of this report.
The company has reported compliance against the 2019 AIC Code of Corporate
Governance (the “Code”) which has been endorsed by the UK Financial
Reporting Council as being consistent with the UK Corporate Governance Code
for the purposes of meeting the company’s obligations, as an investment
company, under the Listing Rules of the FCA.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the corporate governance statement, included
within the Strategic Report and Directors’ Report is materially consistent
with the financial statements and our knowledge obtained during the audit,
and we have nothing material to add or draw attention to in
relation to:
* The directors’ confirmation that they have carried
out a robust assessment of the emerging and principal risks;
* The disclosures in the Annual Report that describe
those principal risks, what procedures are in place to identify emerging risks
and an explanation of how these are being managed or mitigated;
* The directors’ statement in the financial
statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their identification of any
material uncertainties to the company’s ability to continue to do so over a
period of at least twelve months from the date of approval of the financial
statements;
* The directors’ explanation as to their assessment
of the company’s prospects, the period this assessment covers and why the
period is appropriate; and
* The directors’ statement as to whether they have a
reasonable expectation that the company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment,
including any related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability
of the company was substantially less in scope than an audit and only
consisted of making inquiries and considering the directors’ process
supporting their statements; checking that the statements are in alignment
with the relevant provisions of the Code; and considering whether the
statement is consistent with the financial statements and our knowledge and
understanding of the company and its environment obtained in the course of the
audit.
In addition, based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our
knowledge obtained during the audit:
* The directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the company's
position, performance, business model and strategy;
* The section of the Annual Report that describes the
review of effectiveness of risk management and internal control systems; and
* The section of the Annual Report describing the work
of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the
directors’ statement relating to the company’s compliance with the Code
does not properly disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Adrian Peacegood
For and on behalf of PricewaterhouseCoopers CI LLP
Chartered Accountants and Recognised Auditor
Guernsey, Channel Islands
10 December 2025
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2025
Year ended 30.09.25 Year ended 30.09.24
Income Notes £ £
Interest income on financial assets 19,857,612 18,611,253
Net foreign currency (losses)/gains 8 (4,153,244) 7,544,367
Net gains on financial assets at fair value through profit or loss 9 14,434,639 15,802,148
Net losses on swaps (132,924) -
Total income 30,006,083 41,957,768
Expenses
Portfolio management fees 14 (1,789,417) (1,466,346)
Directors' fees 14 (168,000) (154,099)
Administration fees 15 (141,843) (133,678)
AIFM management fees 15 (71,561) (80,933)
Audit fees (145,120) (144,876)
Custody fees 15 (23,897) (19,777)
Broker fees 15 (52,930) (50,620)
Depositary fees 15 (36,266) (32,080)
Legal and other professional fees (33,618) (93,018)
Listing fees (98,738) (98,520)
Other expenses (148,657) (183,912)
Total expenses (2,710,047) (2,457,859)
Total comprehensive income for the year* 27,296,036 39,499,909
Earnings per Ordinary Share -
Basic & Diluted 4 0.097 0.160
All items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these Financial Statements.
*There was no other comprehensive income during the year.
STATEMENT OF FINANCIAL POSITION
As at 30 September 2025
30.09.25 30.09.24
Assets Notes £ £
Current assets
Financial assets at fair value through profit or loss
- Investments 9 266,874,240 205,443,235
- Derivative assets: Forward currency contracts 16 63,189 1,215,217
Shares issued receivable 438,350 850,800
Amounts due from brokers 696,436 10,000,913
Other receivables 10 4,127,642 3,659,262
Cash and cash equivalents 6,268,742 7,589,458
Total current assets 278,468,599 228,758,885
Liabilities
Current liabilities
Amounts due to brokers 5,417,873 6,997,137
Other payables 11 329,504 1,994,378
Financial liabilities at fair value through profit or loss
- Derivative liabilities: Forward currency contracts 16 3,029 -
Total current liabilities 5,750,406 8,991,515
Total net assets 272,718,193 219,767,370
Equity
Share capital account 12 283,400,353 237,596,788
Retained earnings (10,682,160) (17,829,418)
Total equity 272,718,193 219,767,370
Ordinary Shares in issue (excluding Treasury Shares) 12 316,889,197 262,574,331
Net Asset Value per Ordinary Share (pence) 6 86.06 83.70
The Financial Statements were approved by the Board of Directors on 10
December 2025 and signed on its behalf by:
Ashley Paxton
Sharon Parr
Chair
Senior Independent Director
The accompanying notes are an integral part of these Financial Statements
.
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2025
Share capital Retained
account earnings Total
Note £ £ £
Balance at 1 October 2024 237,596,788 (17,829,418) 219,767,370
Issue of Ordinary Shares 46,915,800 - 46,915,800
Share issue costs (552,749) - (552,749)
Income equalisation on new issues 5 (559,486) 559,486 -
Dividends paid - (20,708,264) (20,708,264)
Total comprehensive income for the year - 27,296,036 27,296,036
Balance at 30 September 2025 283,400,353 (10,682,160) 272,718,193
Share capital Retained
account earnings Total
Note £ £ £
Balance at 1 October 2023 219,836,492 (38,147,452) 181,689,040
Reissue of Treasury Shares 3,183,534 - 3,183,534
Issue of shares 15,325,836 - 15,325,836
Share issue costs (212,529) - (212,529)
Repurchased tendered shares in treasury (369,501) - (369,501)
Income equalisation on new issues 5 (167,044) 167,044 -
Dividends paid - (19,348,919) (19,348,919)
Total comprehensive income for the year - 39,499,909 39,499,909
Balance at 30 September 2024 237,596,788 (17,829,418) 219,767,370
The accompanying notes are an integral part of these Financial Statements.
STATEMENT OF CASH FLOWS
For the year ended 30 September 2025
Year ended 30.09.25 Year ended 30.09.24
Notes £ £
Cash flows from operating activities
Total comprehensive income for the year 27,296,036 39,499,909
Adjustments for:
Net gains on financial assets at fair value through profit or loss 9 (14,434,639) (15,802,148)
Net losses on swaps 132,924 -
Amortisation adjustment under effective interest rate method 9 (1,998,693) (1,866,563)
Movement in net unrealised losses/(gains) on forward currency contracts 8 1,155,057 (3,025,945)
Exchange gain on cash and cash equivalents (3,866) (9,286)
(Increase)/decrease in other receivables 10 (468,380) 111,340
(Decrease)/increase in other payables 11 (362,002) 232,876
Purchase of investments (130,310,690) (85,627,293)
Sale of investments 92,905,306 70,938,820
Net cash (used in)/generated from operating activities (26,088,947) 4,451,710
Cash flows from financing activities
Proceeds from issue of Ordinary Shares 12 47,328,250 14,475,036
Payment for purchase of own shares into treasury 12 - (369,501)
Proceeds from re-issuance of Treasury Shares 12 - 3,183,534
Share issue costs 12 (552,749) (212,529)
Dividends paid (22,011,136) (19,250,169)
Net cash generated from/(used in) financing activities 24,764,365 (2,173,629)
(Decrease)/increase in cash and cash equivalents (1,324,582) 2,278,081
Cash and cash equivalents at beginning of the year 7,589,458 5,302,091
Exchange gain on cash and cash equivalents 3,866 9,286
Cash and cash equivalents at end of the year 6,268,742 7,589,458
The accompanying notes are an integral part of these Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 September 2025
1. General information
TwentyFour Select Monthly Income Fund Limited (the “Company”) was
incorporated with limited liability in Guernsey, as a closed-ended investment
company on 12 February 2014. The Company’s Shares were listed on the
Official List of the Financial Conduct Authority (“FCA”) and admitted to
trading on the Main Market of the London Stock Exchange (“LSE”) on 10
March 2014.
The investment objective and policy is set out in the Summary Information.
The Portfolio Manager of the Company is TwentyFour Asset Management LLP (the
“Portfolio Manager”).
2. Material accounting policies
a) Basis of preparation and statement of compliance
The Financial Statements have been prepared in accordance with
IFRS Accounting Standards as issued by the International Accounting Standards
Board ("IFRS Accounting Standards") and are in compliance with The Companies
(Guernsey) Law, 2008.
b) Presentation of information
The Financial Statements have been prepared on a going concern basis under the
historical cost convention adjusted to take account of the revaluation of the
Company’s financial assets and liabilities at fair value through profit or
loss. Additional commentary on going concern is in the Directors’ Report.
c) Standards, amendments and interpretations effective during the year
The following standards, interpretations and amendments were
adopted for the year ended 30 September 2025:
Non-current Liabilities with Covenants and
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
(applicable to accounting periods beginning on or after 1 January 2024);
Supplier Finance Arrangements (Amendments to
IAS 7 and IFRS 7) (applicable to accounting periods beginning on or after 1
January 2024); and
Lease Liability in a Sale or Leaseback
(Amendments to IFRS 16) (applicable to accounting periods beginning on or
after 1 January 2024).
The adoption of the above standards did not have a material impact on the
financial statements of the Company. There are no other standards, amendments
and interpretations effective during the year that are deemed material to the
Company.
d) Standards, amendments and interpretations issued but not yet effective
At the reporting date of these financial statements, the following
standards, interpretations and amendments, which have not been applied to
these financial statements, were in issue but not yet effective:
Lack of Exchangeability (Amendments to IAS 21)
(applicable to accounting periods beginning on or after 1 January 2025);
Classification and Measurement of Financial
Instruments (Amendments to IFRS 7 and IFRS 9) (applicable to periods beginning
on or after 1 January 2026); and
Presentation and Disclosures in Financial
Statements (IFRS 18) (applicable to accounting periods beginning on or after 1
January 2027).
The Board is in the process of assessing the impact of the new
accounting standards, particularly with respect to the requirements of IFRS
18.
e) Financial assets and financial liabilities at fair value through profit or
loss
Classification
The Company classifies its investments in debt securities and derivatives as
financial assets and liabilities at fair value through profit or loss.
Financial assets and financial liabilities designated at fair value through
profit or loss at inception are managed and their performance is evaluated on
a fair value basis in accordance with the Company’s investment objective,
which is to generate attractive risk adjusted returns, principally through
income distributions, by investing in a diversified portfolio of credit
securities.
The Company’s policy requires the Portfolio Manager and the Board of
Directors to evaluate the information about these financial assets and
liabilities on a fair value basis together with other related financial
information.
Recognition, derecognition and measurement
Regular purchases and sales of investments (securities and derivatives) are
recognised on the trade date, that is, the date on which the Company commits
to purchase or sell the investment. Financial assets and financial liabilities
at fair value through profit or loss are initially recognised at fair value.
Transaction costs are expensed as incurred in the Statement of Comprehensive
Income. Financial assets are derecognised when the rights to receive cash
flows from the investments have expired or the Company has transferred
substantially all risks and rewards of ownership. Financial liabilities are
derecognised when they are extinguished, discharged, cancelled or expired.
The Company may invest in any category of credit security, including, without
prejudice to the generality of the foregoing, bank capital, corporate bonds,
high yield bonds, leveraged loans, payment-in-kind notes and asset-backed
securities (“ABS”). The Company records any principal repayments as they
arise and realises a gain or loss in the net gains on financial assets at fair
value through profit or loss in the Statement of Comprehensive Income in the
period in which they occur.
The interest income arising on these credit securities is recognised on a
time-proportionate basis using the effective interest rate method and shown
within income in the Statement of Comprehensive Income.
Fair value estimation
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value of financial assets and liabilities
traded in active markets (such as publicly traded derivatives and trading
securities) are based on quoted market prices at the close of trading on the
reporting date.
i) Credit securities traded or dealt on an
active market or exchange
Credit securities that are traded or dealt on an active market or exchange are
valued by reference to their quoted mid-market price as at the close of
trading on the reporting date as the Portfolio Manager deems the mid-market
price to be a reasonable approximation of an exit price .
ii) Credit securities not traded or dealt on an
active market or exchange
Credit securities which are not traded or dealt on active markets or exchanges
are valued by reference to their mid-price, as at the close of business on the
reporting date as determined by pricing Service Providers that use broker
dealer quotations, reported trades or valuation estimates from their internal
pricing models. If a price cannot be obtained from an independent price
vendor, or where the Portfolio Manager determines that the provided price is
not an accurate representation of the fair value of the credit security, the
Portfolio Manager will source mid-price quotes at the close of business on the
reporting date from independent third party brokers/dealers for the relevant
security. If no mid-price is available then a bid-price will be used.
In cases where no third party price is available (either from an independent
price vendor or independent third party brokers/dealers), or where the
Portfolio Manager determines that the provided price is not an accurate
representation of the fair value of the credit security, the Portfolio Manager
may use a third party valuation in line with the fair value policy of the
Company. This may include the use of a comparable arm’s length transaction,
independent third party valuation experts, reference to other securities that
are substantially the same, discounted cash flow analysis and other valuation
techniques commonly used by market participants making the maximum use of
market inputs and relying as little as possible on entity-specific inputs.
Forward foreign currency contracts
Forward foreign currency contracts are derivative contracts and as such, are
recognised at fair value on the date on which they are entered into and
subsequently measured at their fair value. Fair value is determined from
underlying asset prices indices, reference rates and other observable inputs.
These instruments are normally valued by pricing Service Providers or by
utilising broker or dealer quotations. All forward foreign currency contracts
are carried as assets when fair value is positive and as liabilities when fair
value is negative. Gains and losses on forward currency contracts are
recognised as part of net foreign currency (losses)/gains in the Statement of
Comprehensive Income.
Expected credit loss
Financial assets that are stated at cost or amortised cost are reviewed at
each reporting date in line with the expected credit loss policy. An expected
credit loss (“ECL”) is recognised in the Statement of Comprehensive Income
as the difference between the carrying value and the
estimated recoverable value of the financial
assets.
The ECL model applies to financial assets measured at amortised cost and the
standard mandates the use of the simplified approach to calculating the
expected credit losses for amounts due from brokers, shares issued receivable
and other receivables. The ECL calculation is based on the Company’s
historical default rates over the expected life of the trade receivables.
Given the historical level of defaults on trade receivables, there is a
negligible impact because of the lifetime expected credit loss to be
recognised.
Cash and cash equivalents are also subject to the ECL requirements of IFRS 9
and the ECL is assessed as immaterial.
Swap contracts
Swap contracts are derivative contracts and as such are recognised at fair
value on the date on which they are entered into and subsequently measured at
their fair value. All swap contracts are carried as assets when fair value is
positive and as liabilities when fair value is negative.
Gains and losses on swap contracts are recognised as part of net losses on
swaps in the Statement of Comprehensive Income.
f) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the
Statement of Financial Position when there is a legally enforceable right to
offset the recognised amounts and there is an intention to settle on a net
basis or realise the asset and settle the liability simultaneously.
Derivatives are not settled on a net basis and therefore derivative assets and
liabilities are shown gross.
g) Amounts due from and due to brokers
Amounts due from and to brokers represent receivables for securities sold and
payables for securities purchased that have been contracted for but not yet
settled or delivered on the Statement of Financial Position date,
respectively. These amounts are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest rate
method.
h) Interest income
Interest income is recognised on a time-proportionate basis using the
effective interest rate method. Discounts received or premiums paid in
connection with the acquisition of credit securities are amortised into
interest income using the effective interest rate method over the expected
life of the related security.
The effective interest rate method is a method of calculating the amortised
cost of a financial asset or financial liability and of allocating the
interest income or interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash
payments or receipts throughout the expected life of the financial instrument,
or, when appropriate, a shorter period, to the net carrying amount of the
financial asset or financial liability.
When calculating the effective interest rate, the Portfolio Manager estimates
cash flows considering the expected life of the financial instrument,
including future credit losses and deferred interest payments. The calculation
includes all fees and amounts paid or received between parties to the contract
that are an integral part of the effective interest rate and all other
premiums or discounts.
i) Cash and cash equivalents
Cash and cash equivalents comprise deposits held at call with banks and other
short-term investments in an active market with original maturities of three
months or less and for purposes of cash and cash equivalents, excluding bank
overdrafts. Bank overdrafts are included in current liabilities in the
Statement of Financial Position.
j) Share capital
Ordinary Shares are classified as equity. Incremental costs directly
attributable to the issue of Ordinary Shares are shown in equity as a
deduction, net of tax, from the proceeds and disclosed in the Statement of
Changes in Equity.
Repurchased tendered shares are treated as a distribution of capital and
deducted from the Share Capital account. These shares are held in Treasury.
k) Retained earnings
Retained earnings consist of equalisation on issues of new shares, dividends
paid and total comprehensive income for the year.
l) Foreign currency translation
Functional and presentation currency
Items included in the Financial Statements are measured using sterling, the
currency of the primary economic environment in which the Company operates
(the “functional currency”). The financial statements are presented in
sterling, which is the Company’s presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
currency assets and liabilities are translated into the functional currency
using the exchange rate prevailing at the Statement of Financial Position
date.
All foreign exchange gains and losses are presented in the Statement of
Comprehensive Income. Foreign exchange gains and losses relating to forward
currency contracts, receivables and payables are presented in the statement of
comprehensive income within ‘net foreign currency (losses)/gains’.
Foreign exchange gains and losses relating to investments are presented in the
Statement of Comprehensive Income within ‘Net gains/(losses) on financial
assets at fair value through profit or loss’.
m) Transaction costs
Transaction costs on financial assets and liabilities at fair value through
profit or loss include fees and commissions paid to agents, advisers, brokers
and dealers. Transaction costs, when incurred, are immediately recognised in
the Statement of Comprehensive Income.
n) Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board. The
Board is of the opinion that the Company is engaged in a single segment of
business, being investments in credit securities. The Board manages the
business in this way. For additional information refer to note 18.
o) Expenses
All expenses are included in the Statement of Comprehensive Income on an
accruals basis and are recognised through profit or loss in the Statement of
Comprehensive Income.
p) Other receivables
Other receivables are amounts due in the ordinary course of business. If
collection is expected in one year or less, they are classified as current
assets. If not, they are presented as non-current assets. Other receivables
are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest rate method, less expected credit losses.
q) Other payables
Other payables are obligations to pay for services that have been acquired in
the ordinary course of business. Other payables are classified as current
liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities. Other payables are recognised initially
at fair value and subsequently measured at amortised cost using the effective
interest rate method.
r) Dividends paid
Dividend distributions due to the Company’s Shareholders are recognised as
liabilities in the Company’s financial statements and disclosed in the
Statement of Changes in Equity in the period in which the dividends are
approved by the Board.
s) Income equalisation on new issues/tendered shares repurchased
In order to ensure there are no dilutive effects on earnings per share for
current Shareholders when issuing new shares, or when repurchasing tendered
shares, a transfer is made between share capital and other reserves to reflect
that amount of income included in the purchase price of the new shares or the
repurchase price of the tendered shares.
t) Treasury Shares
The Company has the right to issue and purchase up to 14.99% of the total
number of its own shares, as disclosed in note 12.
Shares held in Treasury are excluded from calculations when determining
earnings per Ordinary Share or Net Asset Value per Ordinary Share as detailed
in notes 4 and 6.
3. Significant
accounting judgements, estimates and assumptions
The preparation of the Company’s financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities and the
accompanying disclosures. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.
a) Judgements
In the process of applying the Company’s accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts recognised in the financial statements:
(i) Functional currency
As disclosed in note 2(l), the Company’s functional currency is sterling.
Sterling is the currency in which the Company measures its performance and
reports its results. Where investments are dominated in other currencies, the
Portfolio Manager enters into hedging arrangements to translate the value of
those investments into sterling using spot and forward foreign exchange
contracts. Additionally, investors buy shares in and receive dividends from
the Company in sterling. Expenses incurred by the Company are also in
sterling.
Consequently, the Board believes that sterling best represents the functional
currency of the Company.
b) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Company based its
assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances
arising which are beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.
(i) Fair value of securities not quoted in active markets
The Company carries its investments in credit securities at fair value, with
changes in value being recognised in the Statement of Comprehensive Income.
Credit securities which are not traded or dealt on active markets or exchanges
are valued by reference to their mid-price, as at the close of business on the
reporting date as determined by pricing Service Providers that use broker
dealer quotations, reported trades or valuation estimates from their internal
pricing models. The Portfolio Manager exercises its judgement on the quality
of the independent price vendor and information provided. If a price cannot be
obtained from an independent price vendor or where the Portfolio Manager
determines that the provided price is not an accurate representation of the
fair value of the credit security, the Portfolio Manager will source prices
from independent third party brokers or dealers for the relevant security,
which may be indicative rather than tradable. Where no third party price is
available, or where the Portfolio Manager determines that the third party
quote is not an accurate representation of the fair value, the Portfolio
Manager will determine the valuation based on the Portfolio Manager’s
valuation policy. This may include the use of a comparable arm’s length
transaction, independent valuation experts, reference to other securities that
are substantially the same, discounted cash flow analysis and other valuation
techniques commonly used by market participants making the maximum use of
market inputs and relying as little as possible on entity-specific inputs.
No credit securities were priced by the Portfolio Manager during the year or
any previous year. There has been no change to the accounting policy applied
to how these investments have been valued (see notes 2 and 3) but the use of
an independent third party valuation expert was used to value approximately
2.29% of the Company’s investments at 30 September 2025 (30 September 2024:
3.11%). See note 16 for price sensitivity analysis and details of interest
rate risk.
(ii) Estimated life of credit securities
In determining the estimated life of the credit securities held by the
Company, the Portfolio Manager estimates the remaining life of the security
with respect to expected prepayment rates, default rates and loss rates
together with other information available in the market underlying the
security. The estimated life of the credit securities, as determined by the
Portfolio Manager, impacts the effective interest rate of the credit
securities which in turn impacts the calculation of income as discussed in
note 2(h).
(iii) Determination of observable inputs
As discussed in note 17, when determining the levels of investments within the
fair value hierarchy, the determination of what constitutes ‘observable’
requires significant judgement by the Company. The Company considers
observable data to be market data that is readily available, regularly
distributed or updated, reliable and verifiable, not proprietary, and provided
by independent sources that are actively involved in the relevant market.
(iv) Revenue recognition
Interest income is recognised on a time-proportionate basis using the
effective interest rate method. Discounts received or premiums paid in
connection with the acquisition of credit securities are amortised into
interest income using the effective interest rate method over the expected
life of the related security.
When calculating the effective interest rate, the Portfolio Manager estimates
cash flows considering the expected life of the financial instrument,
including future credit losses and deferred interest payments. The calculation
includes all fees and amounts paid or received between parties to the contract
that are an integral part of the effective interest rate and all other
premiums or discounts.
Revenue estimations are sensitive to changes in interest income resulting from
financial instruments defaulting. Interest income represents management’s
best estimate having regard to historical volatility and looking forward at
the global environment.
4. Earnings per Ordinary
Share – basic & diluted
The earnings per Ordinary Share basic and diluted of 9.7p (30 September 2024:
16.0p) has been calculated based on the weighted average number of Ordinary
Shares (excluding Treasury Shares) of 282,316,503 (30 September 2024:
247,045,371) and a net income for the year of £27,296,036 (30 September 2024:
£39,499,909). As at 30 September 2025, the Company had no Ordinary Shares in
Treasury (30 September 2024: £Nil).
5. Income on
equalisation of new issues/tendered shares repurchased
In order to ensure there were no dilutive effects on earnings per
share for current Shareholders when issuing new shares, or when repurchasing
tendered shares, earnings have been calculated in respect of the accrued
income at the time of purchase of new shares/repurchase of tendered shares and
a transfer has been made from share capital to income to reflect this. The
transfer for the year amounted to £ 559,486
(30 September 2024: £167,044).
6. Net asset value per
Ordinary Share
The net asset value of each Ordinary Share of 86.06p (30 September 2024:
83.70p) is determined by dividing the total net assets of the Company of
£272,718,193 (30 September 2024: £219,767,370) by the number of Ordinary
Shares in issue (excluding Treasury Shares) at 30 September 2025 of
316,889,197 (30 September 2024: 262,574,331).
7. Taxation
The Company has been granted Exempt Status under the terms of The
Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 to income tax in
Guernsey. Its liability for Guernsey taxation is limited to an annual fee of
£1,600 (30 September 2024: £1,600). The activities of the Company do not
constitute relevant activities as defined by the Income Tax (Substance
Requirements) (Implementation) Regulations, 2018 (as amended) and as such, the
Company was out of scope.
8. Net foreign currency
(losses)/gains
Year ended 30.09.25 Year ended 30.09.24
£ £
Movement in net unrealised (losses)/gains on forward currency contracts (1,155,057) 3,025,945
Realised (losses)/gains on forward currency contracts (3,792,217) 7,102,079
Realised currency gains/(losses) on receivables/payables 764,470 (2,519,521)
Unrealised currency gains/(losses) on receivables/payables 29,560 (64,136)
(4,153,244) 7,544,367
9. Investments
As at 30.09.25 As at 30.09.24
£ £
Financial assets at fair value through profit or loss:
Opening amortised cost 203,435,303 196,051,126
Purchases at cost 133,260,690 91,858,943
Proceeds on sale/principal repayment (88,263,017) (80,520,101)
Amortisation adjustment under effective interest rate method 1,998,693 1,866,563
Realised gain on sale/principal repayment 11,259,673 2,568,155
Realised loss on sale/principal repayment (1,488,570) (8,389,383)
Closing amortised cost 260,202,772 203,435,303
Unrealised gain on investments 8,931,803 5,165,931
Unrealised loss on investments (2,260,335) (3,157,999)
Fair value 266,874,240 205,443,235
Year ended 30.09.25 Year ended 30.09.24
£ £
Realised gain on sale/principal repayment 11,259,673 2,568,155
Realised loss on sale/principal repayment (1,488,570) (8,389,383)
Increase in unrealised gain 3,765,872 3,887,280
Decrease in unrealised loss 897,664 17,736,096
Net gain on financial assets at fair value through profit or loss 14,434,639 15,802,148
10. Other receivables
As at 30.09.25 As at 30.09.24
£ £
Interest income receivable 4,007,050 3,563,959
Prepaid expenses 20,244 5,149
Dividends receivable 100,348 90,154
4,127,642 3,659,262
The Board does not anticipate any material ECL for interest income receivable
as at 30 September 2025 (no material ECL were recorded for 30 September 2024).
11. Other payables
As at 30.09.25 As at 30.09.24
£ £
Portfolio management fees payable 176,247 266,879
Administration fees payable 31,543 102,350
AIFM management fees payable 4,357 16,407
Audit fees payable 38,636 144,876
Other expenses payable 61,650 120,092
Depositary fees payable 2,984 11,266
Custody fees payable 2,804 8,675
Share issue costs payable 11,283 20,961
Dividends payable - 1,302,872
329,504 1,994,378
12. Share capital account
Authorised share capital
The Board may issue an unlimited number of Ordinary Shares at par value of 1p
per share.
Issued share capital
30.09.25 30.09.24
£ £
Ordinary Shares
Share capital account at the beginning of the year 237,596,788 219,836,492
Reissue of Treasury Shares - 3,183,534
Issue of shares 46,915,800 15,325,836
Share issue costs (552,749) (212,529)
Purchase of own shares into treasury - (369,501)
Income equalisation on new issues (559,486) (167,044)
Total share capital account at the end of the year 283,400,353 237,596,788
Reconciliation of number of Shares
30.09.25 30.09.24
Number of Number of
Ordinary Shares Ordinary Shares
£ £
Ordinary Shares
Shares at the beginning of the year 262,574,331 240,824,331
Reissue of Treasury Shares - 3,939,187
Issue of shares 54,314,866 18,310,813
Purchase of own shares into treasury - (500,000)
Total Shares in issue (excluding Treasury Shares) at the end of the year 316,889,197 262,574,331
30.09.25 30.09.24
Number of Number of
Ordinary Shares Ordinary Shares
Ordinary Shares
Shares at the beginning of the year - 3,439,187
Purchase of own shares to hold in treasury - 500,000
Reissue of Treasury Shares - (3,939,187)
Total Shares held in treasury at the end of the year - -
Total Shares in issue at the end of the year 316,889,197 262,574,331
The Ordinary Shares carry the following rights:
a) The Ordinary Shares carry the right to
receive all income of the Company attributable to the Ordinary Shares.
b) The Shareholders present in person or
by proxy or present by a duly authorised representative at a general meeting
have, on a show of hands, one vote and, on a poll, one vote for each Share
held.
The Company has the right to issue and purchase up to 14.99% of the total
number of its own shares at £0.01 each, to be classed as Treasury Shares and
may cancel those Shares or hold any such Shares as Treasury Shares, provided
that the number of Shares held as Treasury Shares shall not at any time exceed
100% of the total number of Shares of that class in issue at that time or such
amount as provided in The Companies (Treasury Shares) Regulations, 2016.
The Company held no shares in Treasury as at 30 September 2025 or
30 September 2024.
13. Analysis of financial assets and
liabilities by measurement basis as per Statement of Financial Position
Financial
assets at fair
value through Amortised
profit or loss cost Total
£ £ £
As at 30 September 2025
Financial Assets
Financial assets at fair value through profit or loss
- Investments
- Corporate bonds 173,526,131 - 173,526,131
- Asset-backed securities 93,348,109 - 93,348,109
- Derivative assets: Forward currency contracts 63,189 - 63,189
Shares issued receivable - 438,350 438,350
Amounts due from brokers - 696,436 696,436
Other receivables (excluding prepaid expenses) - 4,107,398 4,107,398
Cash and cash equivalents - 6,268,742 6,268,742
266,937,429 11,510,926 278,448,355
Financial
liabilities at fair
value through Amortised
profit or loss cost Total
£ £ £
As at 30 September 2025
Financial Liabilities
Amounts due to brokers - 5,417,873 5,417,873
Other payables - 329,504 329,504
Financial liabilities at fair value through profit or loss
- Derivative liabilities: Forward currency contracts 3,029 - 3,029
3,029 5,747,377 5,750,406
Financial
assets at fair
value through Amortised
profit or loss cost Total
£ £ £
As at 30 September 2024
Financial Assets
Financial assets at fair value through profit or loss
- Investments
- Corporate bonds 136,260,127 - 136,260,127
- Asset-backed securities 69,183,108 - 69,183,108
- Derivative assets: Forward currency contracts 1,215,217 - 1,215,217
Shares issued receivable - 850,800 850,800
Amounts due from brokers - 10,000,913 10,000,913
Other receivables (excluding prepaid expenses) - 3,654,113 3,654,113
Cash and cash equivalents - 7,589,458 7,589,458
206,658,452 22,095,284 228,753,736
Financial
liabilities at fair
value through Amortised
profit or loss cost Total
£ £ £
As at 30 September 2024
Financial Liabilities
Amounts due to brokers - 6,997,137 6,997,137
Other payables - 1,994,378 1,994,378
- 8,991,515 8,991,515
14. Related parties
a) Directors’ remuneration
The Directors of the Company are remunerated for their services at such a rate
as the Directors determine. The aggregate fees of the Directors will not
exceed £250,000.
The Directors’ fees for the year are as follows:
Year ended 30.09.25 Year ended 30.09.24
£ £
Ashley Paxton 49,000 45,000
Sharon Parr 43,000 40,000
Wendy Dorey 38,500 37,000
Richard Class 37,500 32,099
168,000 154,099
No Directors’ fees were outstanding as at 30 September 2025 (30 September
2024: £Nil).
Effective 1 April 2025, the Directors’ fees were increased per annum as
follows:
Ashley Paxton as Chair of the Board Increase to £53,000
Sharon Parr as Chair of the Audit and Risk Committee and Senior Independent Director Increase to £46,000
Wendy Dorey as Chair of the Management Engagement Committee Increase to £40,000
Richard Class as Chair of the Remuneration and Nomination Committee Increase to £40,000
The base director fee level was also increased from £35,000 to £37,000 per
annum.
b) Shares held by related parties
The Directors of the Company held the following shares beneficially:
As at 30.09.25 As at 30.09.24
Number of Ordinary Shares Number of Ordinary Shares
Ashley Paxton 120,000 120,000
Sharon Parr 98,004 98,004
Wendy Dorey¹ 38,505 15,000
Richard Class² 75,000 50,000
1 On 1 October 2024, Wendy Dorey purchased 23,505 Ordinary Shares.
2 On 3 April 2025, Richard Class purchased 25,000 Ordinary Shares.
Directors are entitled to receive the dividends on any shares held by them
during the year. Dividends declared by the Company are set out in note 19.
As at 30 September 2025, separate fund entities for which the Portfolio
Manager is engaged to provide portfolio management services, collectively held
7,562,744 Ordinary Shares (30 September 2024: 7,562,744 Ordinary Shares) which
is 2.39% (30 September 2024: 2.88%) of the Issued Share Capital. Partners and
employees of the Portfolio Manager, including their immediate family members,
directly or indirectly held 2,926,294 Ordinary Shares (30 September 2024:
3,244,631), which is 0.92% (30 September 2024: 1.24%) of the Issued Share
Capital.
The Shares held by Directors and by partners and employees of the
Portfolio Manager are purchased in their own right on the open market and do
not form part of their remuneration paid by the Company.
The Portfolio Manager, partner and employee amounts therefore exclude Shares
held under any long-term incentive plan (“LTIP”) which have not yet
vested. Ordinary Shares that are held in employee and partner LTIPs total
809,905 (30 September 2024: 712,329), which is 0.26% of the Issued Share
Capital (30 September 2024: 0.27%).
The amounts for the Portfolio Manager, its partners and employees and LTIP are
shown for transparency purposes and are not considered transactions with
related parties.
c) Portfolio Manager
The portfolio management fee is payable to the Portfolio Manager
monthly in arrears at a rate of 0.75% per annum of the lower of NAV, which is
calculated weekly on each valuation day, or market capitalisation of each
class of shares. Total portfolio management fees for the
year amounted to £1,789,417 (30 September 2024: £1,466,346) of which
£ 176,247 (30 September 2024: £266,879) is payable
at year end . The Portfolio Management Agreement dated 17 February
2014, as amended, remains in force until determined by the Company or the
Portfolio Manager giving the other party not less than twelve months’ notice
in writing. Under certain circumstances, the Company or the Portfolio Manager
is entitled to immediately terminate the agreement in writing.
The Portfolio Manager is also entitled to a commission of 0.175%
of the aggregate gross offering proceeds in relation to any issue of new
Shares, following admission, in consideration of marketing
services that it provides to the Company. During the year, the Portfolio
Manager earned £83,591 (30 September 2024: £27,436) in commission, which is
charged as a cost of issuance.
15. Material agreements
a) Alternative Investment Fund Manager
(“AIFM”)
The Company’s AIFM is Waystone Management Company (IE) Limited. In
consideration for the services provided by the AIFM under the AIFM Agreement,
the AIFM is entitled to receive from the Company a minimum fee of £65,000 per
annum and fees payable monthly in arrears at a rate of 0.03% of the NAV of the
Company below £250 million, 0.025% on Net Assets between £250 million and
£500 million, 0.02% on Net Assets between £500 million and £1 billion and
0.015% on Net Assets in excess of £1 billion.
During the year, AIFM fees of £71,561 (30 September 2024: £80,933) were
charged to the Company, of which £4,357 (30 September 2024: £16,407)
remained payable at the end of the year.
b) Administrator and Secretary
With effect until 31 March 2025, administration fees
were payable to Northern Trust International Fund Administration Services
(Guernsey) Limited at a rate of 0.06% of the NAV of the Company below £100
million, 0.05% on NAV between £100 million and £200 million and 0.04% on NAV
in excess of £200 million as at the last business day of the month subject to
a minimum of £75,000 for each year.
With effect from 1 April 2025, administration fees
were reduced to a rate of 0.055% of the NAV of the Company below £100
million, 0.04% on NAV between £100 million and £200 million and 0.035% on
NAV in excess of £200 million as at the last business day of the month,
subject to a minimum of £65,000 per annum for the first year to 31 March 2026
and £75,000 per annum thereafter.
In addition, an annual fee of £25,000 will be charged
for corporate governance and company secretarial services. Administration fees
are payable monthly in arrears.
During the year, administration and secretarial fees
of £141,843 (30 September 2024: £133,678) were charged to the Company, of
which £31,543 (30 September 2024: £102,350) remained payable at the end of
the year.
c) Broker
For its services as the Company’s Corporate Broker, Deutsche Numis, is
entitled to receive a retainer fee of £50,000 per annum and also a commission
of 1% on all tap issues. Total broker fees for the year amounted to £52,930
(30 September 2024: £50,620) of which £Nil (30 September 2024: £Nil) is
payable at year end. During the year, the Corporate Broker earned £469,158
(30 September 2024: £185,093) in commission, which is charged as a cost of
issuance.
d) Depositary
With effect until 31 March 2025, depositary fees were
payable to Northern Trust (Guernsey) Limited at a rate of 0.0175% of the NAV
of the Company below £100 million, 0.0150% on NAV between £100 million and
£200 million and 0.0125% on NAV in excess of £200 million as at the last
business day of the month subject to a minimum of £25,000 for each year. With
effect from 1 April 2025, a reduced rate of 0.0100% is charged on NAV in
excess of £200 million, and the minimum fee will be
reduced to £15,000 per annum for the first 12 months to 31 March 2026.
Depositary fees are payable monthly in arrears.
During the year, depositary fees of £36,266 (30
September 2024: £32,080) were charged to the Company, of which £2,984 (30
September 2024: £11,266) remained payable at the end of the year.
The Depositary is also entitled to a Global Custody fee of a minimum of
£8,500 per annum plus transaction fees. Total Global Custody fees and charges
for the year amounted to £23,897 (30 September 2024: £19,777) of which
£2,804 (30 September 2024: £8,675) is due and payable at the end of the
year.
16. Financial risk management
The Company’s activities expose it to a variety of financial risks: market
risk (including price risk, reinvestment risk, interest rate risk and foreign
currency risk), credit risk, liquidity risk and capital risk.
The Company’s financial instruments include financial assets/liabilities at
fair value through profit or loss, cash and cash equivalents, amounts due
to/from brokers, other receivables and other payables. The techniques and
instruments utilised for the purposes of efficient portfolio management are
those which are reasonably believed by the Board to be economically
appropriate to the efficient management of the Company.
Market risk
Market risk embodies the potential for both losses and gains and includes
foreign currency risk, interest rate risk, price risk and reinvestment risk.
The Company’s strategy on the management of market risk is driven by the
Company’s investment objective. The Company’s investment objective is to
generate attractive risk adjusted returns principally through investment in
credit securities.
( i) Price risk
The underlying investments comprised in the portfolio are subject to price
risk. The Company is therefore at risk that market events may affect
performance and in particular may affect the value of the Company’s
investments which are valued on a mark to market and mark to model basis.
Price risk is risk associated with changes in market prices or rates,
including interest rates, availability of credit, inflation rates, economic
uncertainty, changes in laws, national and international political
circumstances. The Company’s policy is to manage price risk by holding a
diversified portfolio of assets, through its investments in credit securities.
The Company’s policy also stipulates that at purchase, no more than 5% of
the portfolio value can be exposed to any single credit security or issuer of
credit securities.
The price of a credit security can be affected by a number of factors,
including: (i) changes in the market’s perception of the underlying assets
backing the security; (ii) economic and political factors such as interest
rates and levels of unemployment and taxation which can have an impact on the
arrears, foreclosures and losses incurred with respect to the pool of assets
backing the security; (iii) changes in the market’s perception of the
adequacy of credit support built into the security’s structure to protect
against losses caused by arrears and foreclosures; (iv) changes in the
perceived creditworthiness of the originator of the security or any other
third parties to the transaction; (v) the speed at which mortgages or loans
within the pool are repaid by the underlying borrowers (whether voluntary or
due to arrears or foreclosures).
Price sensitivity analysis
The following details the Company’s sensitivity to movement in market
prices. The analysis is based on a 15%, 10% and 5% (30 September 2024: 15%,
10% and 5%) increase or decrease in market prices. This represents
management’s best estimate of a reasonable possible shift in market prices,
having regard to historical volatility.
At 30 September 2025, if market prices had been 15%, 10% and 5% (30 September
2024: 15%, 10% and 5%) higher with all other variables held constant, the
increase in the net assets attributable to equity Shareholders would have been
£40,031,136, £26,687,424 and £13,343,712, respectively (30 September 2024:
£30,816,485, £20,544,324 and £10,272,162, respectively). The total
comprehensive income for the year would have also increased by the same
amounts. An equal change in the opposite direction would have decreased the
net assets attributable to equity Shareholders and total comprehensive income
respectively. This price sensitivity analysis covers the market prices
received from price vendors, brokers and those determined using models (such
as discounted cash flow models) on the assumption that the prices determined
from these sources had moved by the indicated percentages.
Actual trading results may differ from the above sensitivity analysis and
those differences may be material.
(ii) Reinvestment risk
Reinvestment risk is the risk that future coupons from a bond will not be
reinvested at the yield prevailing when the bond was initially purchased.
A key determinant of a bond’s yield is the price at which it is purchased
and, therefore, when the market price of bonds generally increases, the yield
of bonds purchased generally decreases. As such, the overall yield of the
portfolio, and therefore the level of dividends payable to Shareholders, would
fall to the extent that the market prices of credit securities generally rise
and the proceeds of credit securities held by the Company that mature or are
sold are not able to be reinvested in credit securities with a yield
comparable to that of the portfolio as a whole. The Company assesses
reinvestment risk on at least a monthly basis by calculating the projected
amortisation profile of the Company across the next three years. In addition,
changes in the Company’s yield and income are assessed over the same
timeframe as bonds redeem or mature to identify any periods where reinvestment
risk may be more significant.
(iii) Interest rate risk
Interest rate risk arises from the effects of fluctuations in the prevailing
levels of markets interest rates on the fair value of financial assets and
liabilities and future cash flow. The Company holds fixed interest securities
that expose the Company to fair value interest rate risk. The Company also
holds a limited amount of euro-denominated floating rate debt, cash and cash
equivalents that expose the Company to cash flow interest rate risk.
The tables below summarise the Company’s exposure to interest rate risk:
Floating rate Fixed rate Non-interest bearing Total
As at 30 September 2025 £ £ £ £
Investments 86,020,689 180,853,551 - 266,874,240
Derivative assets: Forward currency contracts - - 63,189 63,189
Shares issued receivable - - 438,350 438,350
Amounts due from brokers - - 696,436 696,436
Other receivables excluding prepaid expenses - - 4,107,398 4,107,398
Cash and cash equivalents 6,268,742 - - 6,268,742
Derivative liabilities: Forward currency contracts - - (3,029) (3,029)
Amounts due to brokers - - (5,417,873) (5,417,873)
Other payables - - (329,504) (329,504)
Net current assets/(liabilities) 92,289,431 180,853,551 (445,033) 272,697,949
Floating rate Fixed rate Non-interest bearing Total
As at 30 September 2024 £ £ £ £
Investments 68,005,230 137,438,005 - 205,443,235
Derivative assets: Forward currency contracts - - 1,215,217 1,215,217
Shares issued receivable 850,800 850,800
Amounts due from brokers - - 10,000,913 10,000,913
Other receivables excluding prepaid expenses - - 3,654,113 3,654,113
Cash and cash equivalents 7,589,458 - - 7,589,458
Amounts due to brokers - - (6,997,137) (6,997,137)
Other payables - - (1,994,378) (1,994,378)
Net current assets 75,594,688 137,438,005 6,729,528 219,762,221
The Company holds fixed rate and floating rate financial instruments which,
based on current portfolio duration of 2.88 years (30 September 2024: 2.60
years), have relatively limited
exposure to fair value interest rate risk as, when short-term interest rates
increase, the interest rate on floating rate notes will also increase. The
majority of floating rate assets re-fix on a quarterly basis, limiting the
impact of interest rate risk to the Company. As such, it is not deemed
necessary to perform sensitivity analysis on the impact of interest rate risk.
As at 30 September 2025, 66.32% of the Company’s net current asset position
was invested in fixed rate securities (30 September 2024: 62.54%), however the
overall credit spread duration of the Company was 3.96 years (30 September
2024: 3.27 years). A credit spread duration of 3.96 years (30 September 2024:
3.27 years) indicates that the portfolio’s value will rise or fall by 4.0
basis points (30 September 2024: 3.3 basis points) should credit spreads
overall rise or fall by 1 basis point. The value of credit securities may also
be affected by interest rate movements. Interest receivable on bank deposits
or payable on bank overdraft positions will be affected by fluctuations in
interest rates, however the underlying cash positions will not be affected.
The Company’s continuing position in relation to interest rate risk is
monitored on a weekly basis by the Portfolio Manager as part of its review of
the weekly Net Asset Value calculations prepared by the Company’s
Administrator.
The Company actively trades in debt securities, some of which are variable
rate and linked to interest rate benchmarks.
(iv) Foreign currency risk
Foreign currency risk is the risk that the value of a financial instrument
will fluctuate due to changes in foreign exchange rates. The Company invests
predominantly in non-sterling assets while its Shares are denominated in
sterling, its expenses are incurred in sterling and its presentational
currency is sterling. Therefore, the Statement of Financial Position may be
significantly affected by movements in the exchange rate between foreign
currencies and sterling. The Company manages the exposure to currency
movements by using spot and forward foreign exchange contracts, rolling
forward on a periodic basis.
As at 30 September 2025, the Company had 4 (30 September 2024: 5) open forward
currency contracts.
Outstanding contracts Mark to market equivalent Unrealised gains/(losses)
Contract values
30.09.25 30.09.25 30.09.25 30.09.25
Currency £ £ £
4 sterling forward foreign currency contracts totalling:
2 EUR forward foreign currency contract (191,367,684) (167,299,592) (167,236,610) 62,982
1 USD forward foreign currency contract (28,193,873) (20,936,832) (20,939,861) (3,029)
1 USD forward foreign currency contract (332,295) (247,006) (246,799) 207
60,160
Outstanding contracts Mark to market equivalent Unrealised gains
Contract values
30.09.24 30.09.24 30.09.24 30.09.24
Currency £ £ £
5 sterling forward foreign currency contracts totalling:
3 EUR forward foreign currency contract (150,907,486) (126,753,795) (125,666,380) 1,087,415
2 USD forward foreign currency contract (23,141,266) (17,691,365) (17,563,563) 127,802
1,215,217
Forward currency contracts are not subject to offsetting or master netting
arrangements.
At year end, the Company had Nil (30 September 2024: Nil) open spot currency
contracts.
As at 30 September 2025 and 2024, the Company held the following assets and
liabilities denominated in currencies other than Pound sterling:
As at 30.09.25 As at 30.09.24
£ £
EUR
Investments 169,068,875 119,513,408
Cash and cash equivalents 1,453,081 1,080,673
Amounts due from brokers and other receivables 3,158,992 12,363,878
Less: Amounts due to brokers (5,417,873) (6,907,137)
Less: Open forward currency contracts (167,236,610) (125,666,380)
USD
Investments 21,010,147 15,544,289
Cash and cash equivalents 148,561 1,783,083
Other receivables 372,344 259,054
Less: Open forward currency contracts (21,186,660) (17,563,563)
CHF
Cash and cash equivalents 42 16,622
1,370,899 423,927
The following tables summarise the sensitivity of the Company’s assets and
liabilities to changes in foreign exchange movements between Euro, US Dollar
and Swiss Franc, and the Company functional currency of sterling as at 30
September 2025 and 2024. The analysis assumes that the relevant foreign
exchange rate increased/decreased by the percentage disclosed in the table,
with all other variables held constant. This represents management’s best
estimate of a reasonable possible shift in the foreign exchange rates, having
regard to historical volatility of those rates.
As at 30.09.25 As at 30.09.24
£ £
Impact on net assets
- 10% (30.09.24: 10%) increase in EUR/GBP 99,373 61,508
- 10% (30.09.24: 10%) decrease in EUR/GBP 335,761 155,180
As at 30.09.25 As at 30.09.24
£ £
Impact on net assets
- 10% (30.09.24: 10%) increase in USD/GBP (33,762) 280,957
- 10% (30.09.24: 10%) decrease in USD/GBP 31,465 344,766
As at 30.09.25 As at 30.09.24
£ £
Impact on net assets
- 10% (30.09.24: 10%) increase in CHF/GBP (4) (1,512)
- 10% (30.09.24: 10%) decrease in CHF/GBP 4 1,662
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company. The
Company has a credit policy in place and the exposure to credit risk is
monitored on an on-going basis.
The main concentration of credit risk to which the Company is exposed arises
from the Company’s investments in credit securities. The credit risk is
built into mark to market or mark to model pricing. The Company is also
exposed to counterparty credit risk on forwards, cash and cash equivalents,
amounts due from brokers, shares issued receivable and other receivable
balances.
The Company’s policy is to manage this risk by maintaining a portfolio
diversified by issuer. While the prospectus permits no more than 5% of the
portfolio value to be invested in any single credit security or issuer of
credit securities, the Portfolio Manager operates to stricter exposures
dependent on the credit rating of each single credit security or issuer of
credit securities.
Portfolio of debt securities and cash and cash equivalents by ratings category
using the highest rating assigned by Standard and Poor’s (“S&P”),
Moody’s Analytics (“Moody’s”) or Fitch Ratings (“Fitch”):
As at 30.09.25 As at 30.09.24
AA- 1.40% 0.00%
A+ 2.30% 5.54%
A- 1.00% 0.00%
BBB+ 4.91% 2.48%
BBB 13.07% 9.31%
BBB- 14.73% 12.58%
BB+ 8.63% 10.02%
BB 6.96% 8.54%
BB- 19.07% 12.58%
B+ 5.49% 8.30%
B 2.99% 4.90%
B- 10.94% 13.08%
CCC+ 0.39% 2.47%
CCC 0.50% 0.00%
Not Rated* 7.62% 10.20%
100.00% 100.00%
*The non-rated exposure within the Company is managed in exactly the same way
as the exposure to any other rated bond in the portfolio. A bond not rated by
any of Moody’s, S&P or Fitch does not necessarily translate as poor credit
quality. Often smaller issues/tranches, or private deals which the Company
holds, will not apply for a rating due to the cost of doing so from the
relevant credit agencies. On this basis, the Portfolio Manager has no
significant credit concerns with the unrated ABS or corporate bonds currently
held.
To further understand credit risk, the Portfolio Manager undertakes extensive
due diligence procedures on investments in credit securities and monitors the
on-going investment in these securities.
The Company manages its counterparty exposure in respect of cash and cash
equivalents and forward currency contracts by investing with counterparties
with a “single A” or higher credit rating. The majority of cash is
currently placed with Northern Trust (Guernsey) Limited. The Company is
subject to credit risk to the extent that this institution may be unable to
return this cash. Northern Trust (Guernsey) Limited is a wholly owned
subsidiary of The Northern Trust Corporation. The Northern Trust Corporation
is publicly traded and a constituent of S&P 500. The Northern Trust
Corporation has a credit rating of A+ from Standard & Poor's and A2 from
Moody's.
The Company’s maximum credit exposure is limited to the carrying amount of
financial assets recognised as at the Statement of Financial Position date, as
summarised below:
As at 30.09.25 As at 30.09.24
£ £
Investments 266,874,240 205,443,235
Shares issued receivable 438,350 850,800
Amounts due from brokers 696,436 10,000,913
Cash and cash equivalents 6,268,742 7,589,458
Derivative assets: Forward currency contracts 63,189 1,215,217
Other receivables excluding prepaid expenses 4,107,398 3,654,113
278,448,355 228,753,736
Investments in credit securities that are not backed by underlying asset pools
present certain risks that are not presented by ABS. Primarily, these
securities may not have the benefit of the same security interest in the
related collateral. Therefore, there is a possibility that recoveries on
defaulted collateral may not, in some cases, be available to support payments
on these securities. The risk of investing in these types of securities is
ultimately dependent upon payment of the underlying debt by the issuer. The
Portfolio Manager undertakes extensive due diligence procedures on investments
in credit securities and monitors the on-going investment in these securities.
The most significant balance of other receivables is interest receivable and
its credit risk is the same as the credit securities.
Liquidity risk
Liquidity risk is the risk that the Company may not be able to generate
sufficient cash resources to settle its obligations in full as they fall due
or can only do so on terms that are materially disadvantageous.
Investments made by the Company in credit securities may be relatively
illiquid and this may limit the ability of the Company to realise its
investments for the purposes of cash management such as generating cash for
dividend payments to Shareholders or buying back Ordinary Shares under the
quarterly tenders or in the market. Investments in credit securities may also
have no active market and the Company also has no redemption rights in respect
of these investments. The Company has the ability to borrow to ensure
sufficient cash flows.
The Portfolio Manager considers expected cash flows from financial assets in
assessing and managing liquidity risk, in particular its cash resources and
trade receivables. Cash flows from trade and other receivables are all
contractually due within twelve months.
The Portfolio Manager maintains a liquidity management policy to monitor the
liquidity risk of the Company.
Shareholders have no right to have their shares redeemed or repurchased by the
Company, except as detailed under the Capital risk management (Quarterly
tenders) section of this note. Shareholders otherwise wishing to release their
investment in the Company are therefore required to dispose of their shares on
the market.
The following table analyses the Company’s liabilities into relevant
maturity groupings based on the maturities at the Statement of Financial
Position date. The amounts in the table are the undiscounted net cash flows on
the financial liabilities:
Up to 1 month 1-6 months 6-12 months Total
As at 30 September 2025 £ £ £ £
Financial liabilities
Amounts due to brokers (5,417,873) - - (5,417,873)
Derivative liabilities: Forward currency contracts (3,029) - - (3,029)
Other payables (290,868) (38,636) - (329,504)
Total (5,711,770) (38,636) - (5,750,406)
Up to 1 month 1-6 months 6-12 months Total
As at 30 September 2024 £ £ £ £
Financial liabilities
Amounts due to brokers (6,997,137) - - (6,997,137)
Other payables (1,840,220) (154,158) - (1,994,378)
Total (8,837,357) (154,158) - (8,991,515)
Capital risk management
The Company manages its capital to ensure that it is able to continue as a
going concern while following the Company’s stated investment policy and
dividend policy. The capital structure of the Company consists of
Shareholders’ equity, which comprises share capital and retained earnings.
To maintain or adjust the capital structure, the Company may return capital to
Shareholders or issue new Shares. There are no regulatory requirements to
return capital to Shareholders.
(i) Quarterly tenders
With the objective of minimising the risk of the Ordinary Shares trading at a
discount to NAV and to assist in the narrowing of any discount at which the
Ordinary Shares may trade from time to time, the Company has incorporated into
its structure a mechanism (a quarterly tender), contingent on certain factors
as described below, which can be exercised at the discretion of the Directors.
This provides Shareholders with a quarterly opportunity to submit Ordinary
Shares for placing or repurchase by the Company at a price representing a
discount of no more than 2% to the then prevailing NAV.
Upon confirmation of the number of tender requests made in respect of each
quarter record date, the Company intends first, through its broker acting on a
reasonable endeavours basis, to seek to satisfy tender requests by placing the
tendered shares with investors in the secondary market.
Second, subject to the restrictions on tenders, the Company repurchases any
tendered shares not placed in the secondary market, for cancellation or to be
held in Treasury.
It is anticipated that the Company will tender on a quarterly basis for up to
20% of the Ordinary Shares in issue as at the relevant quarter record date,
subject to an aggregate limit of 50% of the Ordinary Shares in issue in any
twelve-month period ending on the relevant quarter record date.
If tender requests exceed 20%, tenders will be scaled back on a pro-rata
basis.
(ii) Share buybacks
The Company has been granted the authority to make market purchases of up to a
maximum of 14.99% of the aggregate number of Ordinary Redeemable Shares in
issue immediately following Admission at a price not exceeding the higher of
(i) 5% above the average of the mid-market values of the Ordinary Redeemable
Shares for the 5 business days before the purchase is made or, (ii) the higher
of the price of the last independent trade and the highest current investment
bid for the Ordinary Redeemable Shares.
In deciding whether to make any such purchases, the Directors will have regard
to what they believe to be in the best interests of Shareholders as a whole,
to the applicable legal requirements and any other requirements in its
Articles. The making and timing of any buybacks will be at the absolute
discretion of the Board and not at the option of the Shareholders, and is
expressly subject to the Company having sufficient surplus cash resources
available (excluding borrowed money).
The UKLR prohibit the Company from conducting any share buybacks during close
periods immediately preceding the publication of annual and interim results.
(iii) Continuation votes
In the event that:
(i) the Dividend Target, as disclosed in note 19, is not met; or
(ii) on any tender submission deadline, applications for the Company to
repurchase 50% or more of the Company’s issued Ordinary Shares, calculated
as at the relevant quarter record date, are received by the Company, a General
Meeting will be convened at which the Directors will propose an Ordinary
Resolution that the Company should continue as an investment company. If any
such Ordinary Resolution is not passed, the Directors shall draw up proposals
for the voluntary liquidation, unitisation, reorganisation or reconstruction
of the Company for submission to the members of the Company at a General
Meeting to be convened by the Directors for a date not more than 6 months
after the date of the meeting at which such Ordinary Resolution was not
passed.
17. Fair value measurement
All assets and liabilities are carried at fair value or at
carrying value which equates to fair value.
IFRS 13 requires the Company 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 levels:
(i) Quoted prices (unadjusted) in active
markets for identical assets or liabilities (Level 1).
(ii) Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices including interest rates, yield
curves, volatilities, prepayment speeds, credit risks and default rates) or
other market corroborated inputs (Level 2).
(iii) Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (Level 3).
The following table analyses within the fair value hierarchy the Company’s
financial assets and liabilities (by class) measured at fair value as at 30
September 2025.
Level 1 Level 2 Level 3 Total
£ £ £ £
Assets
Financial assets at fair value through profit or loss
- Investments
- Corporate bonds - 173,526,131 - 173,526,131
- Asset-backed securities - 87,224,619 6,123,490 93,348,109
- Derivative assets: Forward currency contracts - 63,189 - 63,189
Total assets as at 30 September 2025 - 260,813,939 6,123,490 266,937,429
Liabilities
Financial liabilities at fair value through profit or loss
- Derivative liabilities: Forward currency contracts - 3,029 - 3,029
- 3,029 - 3,029
The following table analyses within the fair value hierarchy the
Company’s financial assets and liabilities (by class) measured at fair value
as at 30 September 2024.
Level 1 Level 2 Level 3 Total
£ £ £ £
Assets
Financial assets at fair value through profit or loss
- Investments
- Corporate bonds - 136,260,127 - 136,260,127
- Asset-backed securities - 62,800,110 6,382,998 69,183,108
- Derivative assets: Forward currency contracts - 1,215,217 - 1,215,217
- 200,275,454 6,382,998 206,658,452
As at 30 September 2024, no financial liabilities were carried at
fair value through profit or loss.
Credit securities which have a value based on quoted market prices in active
markets are classified as Level 1. At the end of the year, no credit
securities held by the Company are classified as Level 1.
Credit securities which are not traded or dealt on organised markets or
exchanges are classified as Level 2 or Level 3. Credit securities with prices
obtained from independent price vendors, where the Portfolio Manager is able
to assess whether the observable inputs used for their modelling of prices are
accurate and the Portfolio Manager has the ability to challenge these vendors
with further observable inputs, are classified as Level 2. Prices obtained
from vendors who are not easily challengeable or transparent in showing their
assumptions for the method of pricing or where an independent value is sought
from an external provider based on an appropriate valuation model, are
classified as Level 3. Credit securities priced at an average of two
vendors’ prices are classified as Level 2.
Where the Portfolio Manager determines that the price obtained from an
independent price vendor is not an accurate representation of the fair value
of the credit security, the Portfolio Manager may source prices from third
party dealer quotes and if the price represents a reliable and an observable
price, the credit security is classified as Level 2. Any dealer quote that is
over 20 days old is considered stale and is classified as Level 3.
Furthermore, the Portfolio Manager may determine that the application of a
mark-to-model basis may be appropriate where they believe such a model will
result in more reliable information with regards to the fair value of any
specific investments and are also classified as Level 3 investments. During
the year, there were no transfers between Level 2 and Level 3 (30 September
2024: none).
The Portfolio Manager also took advantage of engaging a third party valuer to
value certain investments (primarily residential mortgage-backed security
assets). The valuation of these assets and others that the Portfolio Manager
may deem appropriate to provide fair value, primarily use discounted cash flow
analysis but may also include the use of a comparable arm's length
transaction, reference to other securities that are substantially the same,
and other valuation techniques commonly used by market participants making the
maximum use of market inputs and relying as little as possible on
entity-specific inputs. As at 30 September 2025, investments representing
2.29% of the portfolio were valued by the third party valuer (30 September
2024: 3.11%).
Although the models used utilise other unobservable inputs in addition to the
discount margins such as constant default rate and constant prepayment rate,
it is the Board’s and Portfolio Manager’s views that any reasonable
movement in these unobservable inputs would not yield a significant change in
fair value to the portfolio and as a result, a sensitivity analysis relating
to these unobservable inputs has not been presented. The following table
summarises the quantitative information about the significant unobservable
inputs used in Level 3 fair value measurements and how a reasonable possible
change in the input would affect the fair values:
30 September 2025 Fair Value (£) Financial Assets Unobservable Input Sensitivity Used Effect on Fair Value (£)
/Liabilities
Dutch RMBS 6,123,490 Financial Asset Discount Margin (1000 bps) -1% / +1% 108,232 / (103,655)
30 September 2024 Fair Value (£) Financial Assets Unobservable Input Sensitivity Used Effect on Fair Value (£)
/Liabilities
Dutch RMBS 3,667,997 Financial Asset Discount Margin (970 bps) -1% / +1% 83,983 / (80,643)
UK RMBS 2,715,000 Financial Asset Discount Margin (970 bps) -1% / +1% 27,965 / (27,693)
The following table presents the movement in Level 3 instruments for the year
ended 30 September 2025 by class of financial instrument.
Bonds Asset-backed securities Total
As at 30 September 2025 £ £ £
Opening balance - 6,382,998 6,382,998
Net disposals - (728,779) (728,779)
Net realised gains for the year - 502,889 502,889
Net unrealised losses for the year - (33,618) (33,618)
Closing balance - 6,123,490 6,123,490
The following table presents the movement in Level 3 instruments
for the year ended 30 September 2024 by class of financial instrument.
Bonds Asset-backed securities Total
As at 30 September 2024 £ £ £
Opening balance - 5,588,925 5,588,925
Net purchases - 670,974 670,974
Net realised gains for the year - 184,476 184,476
Net unrealised losses for the year - (61,377) (61,377)
Closing balance - 6,382,998 6,382,998
The following tables analyse within the fair value
hierarchy the Company’s assets and liabilities not measured at fair value at
30 September 2025 and 30 September 2024, but for which fair value is
disclosed.
Level 1 Level 2 Level 3 Total
As at 30 September 2025 £ £ £ £
Assets
Amounts due from brokers - 696,436 - 696,436
Shares issued receivable - 438,350 - 438,350
Other receivables excluding prepaid expenses - 4,107,398 - 4,107,398
Cash and cash equivalents 6,268,742 - - 6,268,742
Total 6,268,742 5,242,184 - 11,510,926
Liabilities
Amounts due to brokers - 5,417,873 - 5,417,873
Other payables - 329,504 - 329,504
Total - 5,747,377 - 5,747,377
Level 1 Level 2 Level 3 Total
As at 30 September 2024 £ £ £ £
Assets
Amounts due from brokers - 10,000,913 - 10,000,913
Shares issued receivable - 850,800 - 850,800
Other receivables excluding prepaid expenses - 3,654,113 - 3,654,113
Cash and cash equivalents 7,589,458 - - 7,589,458
Total 7,589,458 14,505,826 - 22,095,284
Level 1 Level 2 Level 3 Total
As at 30 September 2024 £ £ £ £
Liabilities
Amounts due to brokers - 6,997,137 - 6,997,137
Other payables - 1,994,378 - 1,994,378
Total - 8,991,515 - 8,991,515
The assets and liabilities included in the above tables are carried at
amortised cost; due to their short-term nature, their carrying values are a
reasonable approximation of fair value.
Cash and cash equivalents include deposits held with banks.
Amounts due to brokers and other payables represent the contractual amounts
and obligations due by the Company for settlement of trades and expenses.
Amounts due from brokers, shares issued receivable and other receivables
represent the contractual amounts and rights due to the Company for settlement
of trades and income.
18. Segmental reporting
The Board is responsible for reviewing the Company’s
entire portfolio and considers the business to have a single operating
segment. The Board’s asset allocation decisions are based on a single,
integrated investment strategy, and the Company’s performance is evaluated
on an overall basis.
Revenue earned is reported separately on the face of the Statement
of Comprehensive Income as interest income on financial assets at fair value
through profit or loss being interest income received from credit securities.
19. Dividend policy
The Board intends to distribute an amount at least equal to the
value of the Company’s excess income, as defined below, arising each
financial year to the holders of Ordinary Shares. However, there is no
guarantee that the Dividend Target of 6.0 pence per Ordinary Share for each
financial year will be met or that the Company will make any distributions at
all.
Excess income is defined as the distributions made with respect to
any income period, which comprise (a) the accrued income of the portfolio for
the period (for these purposes, the Company’s income will include the
interest payable by the credit securities in the portfolio and amortisation of
any discount or premium to par at which a credit security is purchased over
its remaining expected life); (b) an additional amount to reflect any income
purchased in the course of any share subscriptions that took place during the
period. Including purchased income in this way ensures that the income yield
of the shares is not diluted as a consequence of the issue of new shares
during an income period; (c) any relevant expenses less 50% of the portfolio
management fees for the period; and (d) any gain/(loss) on the foreign
exchange contracts caused by the interest rate differentials between each
foreign exchange currency pair which is reflected in each pair’s forward
foreign exchange rate. This definition differs from the IFRS Accounting
Standards “net income” definition which also recognises gains and losses
on financial assets.
The Company declared the following dividends in respect of the profit for the
year ended 30 September 2025:
Period to Dividend per Ordinary Share (pence) Net dividend payable (£) Ex-dividend date Record date Pay date
30 September 2024* 1.38 3,624,403 17 October 2024 18 October 2024 1 November 2024
31 October 2024 0.50 1,345,372 21 November 2024 22 November 2024 6 December 2024
29 November 2024 0.50 1,350,372 19 December 2024 20 December 2024 3 January 2025
31 December 2024 0.50 1,360,372 16 January 2025 17 January 2025 31 January 2025
31 January 2025 0.50 1,382,622 20 February 2025 21 February 2025 7 March 2025
28 February 2025 0.50 1,397,372 20 March 2025 21 March 2025 4 April 2025
31 March 2025 0.75 2,096,057 17 April 2025 22 April 2025 6 May 2025
30 April 2025 0.50 1,416,872 22 May 2025 23 May 2025 6 June 2025
31 May 2025 0.50 1,439,372 19 June 2025 20 June 2025 4 July 2025
30 June 2025 0.75 2,211,557 17 July 2025 18 July 2025 1 August 2025
31 July 2025 0.50 1,521,946 21 August 2025 22 August 2025 5 September 2025
31 August 2025 0.50 1,561,947 18 September 2025 19 September 2025 30 September 2025
20,708,264
30 September 2025 1.30 4,158,690 16 October 2025 17 October 2025 31 October 2025
* This dividend was declared in respect of distributable profit for the year
ended 30 September 2024.
The Company declared the following dividends in respect of the profit for the
year ended 30 September 2024:
Period to Dividend per Ordinary Share (pence) Net dividend payable (£) Ex-dividend date Record date Pay date
30 September 2023* 1.87 4,493,959 19 October 2023 20 October 2023 3 November 2023
31 October 2023 0.50 1,201,622 16 November 2023 17 November 2023 1 December 2023
30 November 2023 0.50 1,204,122 21 December 2023 22 December 2023 5 January 2024
29 December 2023 0.50 1,209,122 18 January 2024 19 January 2024 2 February 2024
31 January 2024 0.50 1,215,372 15 February 2024 16 February 2024 1 March 2024
29 February 2024 0.50 1,217,872 21 March 2024 22 March 2024 5 April 2024
28 March 2024 0.75 1,834,306 18 April 2024 19 April 2024 3 May 2024
30 April 2024 0.50 1,243,872 16 May 2024 17 May 2024 31 May 2024
31 May 2024 0.50 1,254,872 20 June 2024 21 June 2024 5 July 2024
28 June 2024 0.75 1,898,056 18 July 2024 19 July 2024 2 August 2024
31 July 2024 0.50 1,272,872 15 August 2024 16 August 2024 30 August 2024
30 August 2024 0.50 1,302,872 19 September 2024 20 September 2024 4 October 2024
19,348,919
30 September 2024 1.38 3,624,403 17 October 2024 18 October 2024 1 November 2024
* This dividend was declared in respect of distributable profit for the year
ended 30 September 2023.
Under The Companies (Guernsey) Law, 2008, the Company can distribute dividends
from capital and revenue reserves, subject to the net
asset and solvency test. The net asset and solvency test
considers whether a company is able to pay its debts when they fall due, and
whether the value of a company’s assets is greater than its liabilities. The
Board confirms that the Company passed the net asset and
solvency test for each dividend paid.
20. Ultimate controlling party
In the opinion of the Board on the basis of shareholdings advised
to them, the Company has no ultimate controlling party.
21. Subsequent events
These Financial Statements were approved for issuance by the Board on 10
December 2025. Subsequent events have been evaluated to this date.
Subsequent to the year end and up to the date of
signing of the Annual Report and Audited Financial Statements, the following
events took place:
Dividend declarations
Declaration date Dividend rate per Ordinary Share (pence)
9 October 2025 1.30
13 November 2025 0.50
Tenders
On 6 October 2025, 119,559 shares were tendered in respect of the tender for
the quarter ended 30 September 2025, all of which were placed by Deutsche
Numis, rather than repurchased by the Company.
Share issues
The Company issued the following Ordinary Shares under its blocklisting
facility, increasing the Company’s issued share capital post year end to
330,639,197 Ordinary Shares:
Issue date Ordinary Shares issued Price (pence)
3 October 2025 1,000,000 87.79
6 October 2025 1,500,000 87.79
24 October 2025 1,500,000 86.58
10 November 2025 1,000,000 86.88
17 November 2025 3,750,000 87.01
21 November 2025 1,300,000 86.37
28 November 2025 1,200,000 86.71
5 December 2025 2,500,000 86.96
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES
Alternative Performance Measures (“APMs”)
In accordance with European Securities and Markets Authority Guidelines on
APMs, the Board has considered what APMs are included in the Annual Report and
Audited Financial Statements which require further clarification. APMs are
defined as a financial measure of historical or future financial performance,
financial position or cash flows, other than a financial measure defined or
specified in the applicable financial reporting framework. The APMs included
in the annual report and accounts are unaudited and outside the scope of IFRS
Accounting Standards.
Dividends Declared per Ordinary Share
Dividends declared per Ordinary Share are the dividends that are announced in
respect of the current accounting period.
Dividend Target
The Company maintains an annual minimum dividend target
of at least 6p per Ordinary Share.
Net Asset Value (“NAV”)
NAV is the assets attributable to Shareholders. NAV is calculated using the
accounting standards specified by IFRS Accounting Standards and consists of
total assets, less total liabilities.
NAV per Ordinary Share
NAV per Ordinary Share is calculated by dividing the total net asset value of
£272,718,193 (2024: £219,767,370) by the number of Ordinary Shares at the
end of the year of 316,889,197 shares (2024: 262,574,331). This produces a NAV
per Ordinary Share of 86.06p (2024: 83.70p), which was an increase of
2.82% (2024: increase of 10.95%).
NAV Total Return per Ordinary Share
NAV total return per Ordinary Share refers to the total gain from the Company,
which includes the increase or decrease in the Company’s value (capital
gains) and the income generated from dividends, while reinvesting the
dividends paid back into the NAV per Ordinary Share to purchase additional
shares at each ex-dividend date during the year.
Ongoing Charges
Ongoing Charges represent the Company’s management fee and all other
operating expenses, excluding finance costs, expressed as a percentage of the
average of the daily net assets during the year. The Board continues to be
conscious of expenses and works hard to maintain a sensible balance between
good quality service and cost.
Premium/Discount
If the share price of an investment company is higher than the NAV per
Ordinary Share, the shares are said to be trading at a premium. The size of
the premium is calculated by subtracting the share price from the NAV per
Ordinary Share and is usually expressed as a percentage of the NAV per
Ordinary Share. If the share price is lower than the NAV per Ordinary Share,
the shares are said to be trading at a discount.
Average Premium
The premium is calculated as described above at the close of business on every
Wednesday that is also a business day, as well as the last business day of
every month, and an average is taken for the year.
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