Half-year Financial Report
Summary by AI BETAClose X
SCHRODER ASIAN TOTAL RETURN INVESTMENT COMPANY PLC
HALF YEAR REPORT 2026
Schroder Asian Total Return Investment Company plc (the "Company") hereby submits its Half Year Report for the six months ended 30 June 2026 as required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.2.
Key Highlights:
· During the six months to 30 June 2026, the Company delivered a NAV total return of 34.4%, significantly outperforming the Reference Index which produced a return of 25.6% over the same period.
· Strong performance during the period was fuelled by stellar returns from technology stocks in both Korea and Taiwan.
· The Company's discount management policy continued to be active as the discount averaged 3.2% over the period.
· The proposed combination with Pacific Assets Trust plc, which is expected to complete before the end of September, will increase scale, enhance market relevance and reduce costs for shareholders.
Sarah MacAulay, Chairman, Schroder Asian Total Return Investment Company plc commented:
"Your Company delivered a strong NAV total return of 34.4% over the period, substantially outperforming the Reference Index which returned 25.6%."
The Half Year Report is also being published in hard copy format and an electronic copy of that document will shortly be available to download from the Company's web pages at www.schroders.co.uk/satric.
The Company has submitted a copy of its Half Year Report to the National Storage Mechanism and it will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Enquiries:
Schroder Investment Management Limited
|
Charlotte Banks / Kirsty Preston (Press) |
020 7658 2106 |
|
Katherine Fyfe (Company Secretarial) |
020 7658 6000 |
HALF YEAR REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2026
Chairman's Statement
Performance
I am pleased to report that your Company delivered a strong NAV total return of 34.4% over the period, substantially outperforming the Reference Index which returned 25.6%. The share price total return was a lesser 27.8% as the discount to NAV widened over the period. Nevertheless, the share price total return was also ahead of the Reference Index.
The six-month period to 30 June 2026 saw exceptionally strong performance from Asian equity markets, fuelled by stellar returns from technology stocks in both Korea and Taiwan. Markets experienced significant volatility, selling off sharply following the outbreak of the war in the Middle East in late February before making a strong recovery in the second quarter. This volatility has continued since the period end.
There was a wide dispersion in returns across Asian markets and relative outperformance was driven primarily by the portfolio's overweight exposure to Taiwanese technology stocks, with key contributors including Chroma ATE, MediaTek and ASE Holdings. Additional positive contributions came from the Company's underweight positions in China and India, together with successful stock selection in Korea, particularly an overweight position in Samsung Electronics.
Further details on the market and portfolio performance may be found in the Portfolio Managers' Report.
Discount management
The discount to NAV at which the Company's shares trade widened from 1.1% at the beginning of the period to 6.0% at the end, averaging 3.2% over the period. The Board's discount control policy aims to achieve a discount no wider than 5% in normal market conditions and consequently the Company bought back a total of 688,852 shares at an average discount of 4.8% and at a total consideration of £4.4 million. The buyback is utilised to assist in discount management and to reduce share price volatility; it is accretive to the Company's NAV. The shares were placed into treasury for reissuance at a premium to NAV at a future date. Since the end of the period, the Company has bought back a further 548,891 shares to be held in treasury. Prior to this period it had not been necessary for the Company to buy back shares since 2024, despite record buyback levels occurring throughout the investment trust sector.
Gearing
The Portfolio Managers continued to actively utilise gearing during the period, as part of their wider derivative strategy. Gearing levels stood at 5.8% of total assets at the end of the period, up marginally from 5.5% at the start. Gearing should be viewed in the context of the use of derivative hedging instruments as described in the Portfolio Managers' Review.
Combination with Pacific Assets Trust plc
In June 2026, the Company and Pacific Assets Trust plc ("PAC") announced that they had agreed heads of terms to combine the two companies (the "Combination"). In August 2026, both the Company and PAC published circulars and notices convening General Meetings to seek shareholder approval for the proposals and I am pleased to announce that all resolutions put to the General Meetings of this Company and PAC were duly passed.
The Combination will be implemented by way of a scheme of reconstruction and members' voluntary winding-up of PAC under section 110 of the Insolvency Act (the "Scheme") and the associated transfer of the majority of PAC's cash, assets and undertaking to the Company in exchange for the issue of new shares to eligible PAC Shareholders who are deemed to have elected to roll over their investment in PAC into the Company.
PAC will hold a further General Meeting on 24 September 2026 to approve the appointment of liquidators.
This exciting Combination represents a significant validation of both our Portfolio Managers' investment strategy and the Board's disciplined approach to discount control. The transition will be aided by a significant cost contribution from Schroders and will benefit our shareholders in a number of ways, increasing scale and relevance whilst reducing fees.
For further information on the Combination, please refer to the Company's website and the Circular to shareholders dated 11 August 2026.
Board composition
Upon the Combination becoming effective, June Ang and Edward Troughton, who are currently Directors of PAC, will join the Board as non-executive directors.
Post the Combination, the Board will initially comprise six directors. However, it is expected that over the medium-term, the number of Directors on the Board will reduce to four.
Outlook
The Portfolio Managers continue to favour more defensive portfolio positioning. Capital is being reallocated towards attractively valued markets and companies that have lagged the AI rally, particularly higher-yielding and more defensive businesses in Hong Kong, Singapore and Australia. Although shorter-term indicators remain broadly supportive due to easing commodity prices and inflation expectations, elevated valuations, particularly within the technology sector, warrant caution. Consequently, the Company intends to remain fully invested but with limited gearing, selective hedging and an emphasis on resilient businesses which offer strong capital return policies and which have attractive valuations.
We look forward to welcoming PAC investors to the Company at the end of September.
Sarah MacAulay
Chairman
14 September 2026
Investment Manager's Review
PORTFOLIO MANAGERS' REPORT
Even by recent standards, the first half of 2026 was a volatile period for Asian stock markets, with an historically wide dispersion in returns. The good news was that the Company delivered a strong return of 34.4%, ahead of the Reference Index, which rose 25.6%.
This strong overall performance nevertheless masked considerable volatility. Asian markets began the year well, supported by robust earnings and positive guidance from many leading companies. The start of the war in the Middle East at the end of February triggered a sharp correction, but periodic hopes of a resolution, lower oil prices and generally benign economic and inflation conditions drove a strong second quarter rally in Asian stock markets.
As noted, the strong index rise concealed a wide dispersion in returns across Asia. Almost all the gains came from just two markets, Korea and Taiwan, with the MSCI Korea up 121% and the MSCI Taiwan up 65% over the period. In both cases, performance was driven almost entirely by one sector and theme: Artificial Intelligence ("AI") related stocks, particularly those companies exposed to AI capital expenditure. With AI related stocks in Korea and Taiwan now weighted around 75% and 85% of the respective indices, these markets have effectively become proxies for AI capital expenditure. As this spending continues to boom and surprise on the upside, earnings upgrades have been substantial, especially for cyclical technology names such as SK Hynix, Samsung Electronics and TSMC, which together now represent around 30% of the Reference Index. We discuss our positioning and outlook for technology stocks in the Strategy section below.
Outside Korea and Taiwan, Asian stock market performance was very different. More domestically focused markets such as China and India fell, as concerns over rising oil prices and AI related disruption to software companies in India and internet companies in China weighed on share prices. MSCI India declined 9% and MSCI China fell 14%. China, however, was not the weakest market: Indonesia fell 40%, as populist policies, questionable political appointments and measures that appeared to undermine property rights unsettled investors. Elsewhere, developed Asian markets, Australia, Singapore and Hong Kong, posted moderate positive returns, supported by their defensive characteristics and strong dividend yields.
At the sector level, and perhaps unsurprisingly given the above, technology stocks dominated index returns over the period, rising close to 100%. The main laggard sector was consumer stocks, which fell 20%, as China and Association of Southeast Asian Nations ("ASEAN") consumer names continued to disappoint amid weak domestic economies and intense competition. The market appears to be recognising that the long-standing investment narrative of rising Asian middle classes translating into strong returns has, in many cases, proved flawed.
The Company's positive relative performance came mainly from one area: our overweight position in Taiwanese technology stocks, where several holdings performed strongly. Chroma ATE, which makes system-level testers, MediaTek, which produces specific integrated circuits, and ASE Holdings, a leader in semiconductor packaging, all rose sharply. All three supply products that are critical to the AI infrastructure build-out and are leaders in their respective fields. Smaller positive contributors to relative performance included our underweight positions in China and India, as well as Korean stock selection, notably our overweight in Samsung Electronics. The main drags on performance were the Company's limited exposure to domestic Korean stocks, where hopes of "value up" reforms continue to excite retail investors but where we remain cautious, and Australian stock selection, where our healthcare holdings suffered earnings downgrades and weak share-price performance amid sluggish healthcare spending in the US and Europe.
In line with our gearing indicators, the fund used limited gearing during the first half, averaging around 5%. This was partly offset by the sale of Taiwanese index futures, as we sought to reduce some of the beta in the Company's technology exposure. The fund's hedging models moved from neutral to more cautious over the period, principally because of rising valuations in Korea and Taiwan. We held a small position in puts over the first half, with the Indian puts making a modest positive contribution to performance as the market continued to lag the regional peers during the period.
The first half was relatively active for the Company. The large skew in market performance and wide dispersion in individual stock returns led to some changes in the Company's overall positioning, which we discuss in detail in the Strategy section below.
Strategy Update
The cluster analysis we regularly use is shown in the Half Year Report, based on data at the time of writing in early August. We continue to think this is the best way for clients to think about Asian equities as an asset class.
Since the start of the year, we have made three significant portfolio changes to the Company. First, we trimmed our Taiwan technology positions after strong outperformance; second, we added to more defensive, higher-yielding stocks in Hong Kong; and third, we consolidated our China internet holdings into key names where we believe the risk of AI disruption is less material.
As a result, the Company is overweight the China/HK cluster for the first time we can remember. Our technology weighting is now close to neutral, which is also unusual given our historical preference for these stocks because of their high ROICs (Return on Invested Capital) and strong global competitive positions. Having taken profits from technology names, we have not redeployed capital into lagging Indian and ASEAN markets; instead, we have increased exposure to more defensive, higher-yielding stocks in developed Asian markets.
Korea and Taiwan, or our Technology Cluster - Is there a canary in the data centre coal mine?
The main debate among Schroders' Asian investors is the outlook for AI capital expenditure, which is the key driver of Korean and Taiwanese stock markets. Together, these markets now account for around 50% of the Asian Reference Index. As Korea's performance in July showed (MSCI Korea fell by ca. 18% in GBP terms), any doubts about the strength of AI capital expenditure can trigger sharp declines and significant stock market volatility.
Recent results from US hyperscalers suggest the AI boom has not yet slowed (see Chart 1 in the Half Year Report), but warning signs are emerging. Even higher capital expenditure is no longer being rewarded with rising share prices; indeed, Meta, Microsoft and Oracle are all down materially over the past year, with only Alphabet outperforming. The market appears increasingly focused on operating cash flows, which by 2027 look unlikely to cover the substantial capital expenditure, as well as on the balance sheets of formerly asset-light companies that are becoming more asset-heavy and debt-laden (see Chart 2 in the Half Year Report).
None of the above is new and we highlighted similar charts in the 2025 Annual Report. However, what has changed is our view on the capabilities and likely success (defined as market share not necessarily profitability) of Chinese AI large language models (LLMs). In July we saw the release of Kimi K3 another new Chinese model from one of the multitudes of Chinese AI model providers. This model was another wake-up moment with its capability being very close to leading AI models from OpenAI and Anthropic. Hot on its heels we had the latest version of Alibaba's Qwen model which has similar or even better capabilities than Kimi K3. The open-weight and free availability of Chinese models has, perhaps unsurprisingly, led to a sharp increase in token usage, which is now significantly outpacing that of US models (see Chart 3 in the Half Year Report).
As Chinese models start to dominate outside the enterprise segment (where Anthropic does look well positioned) we think valuations for all LLM providers will be questioned. For most uses you don't need a cutting-edge AI model. Given this, we believe risks are now rising that the market questions the assumed valuations for companies like OpenAI. With revenue growth slowing, competition rising is it credible that loss-making OpenAI is worth 10x what it was in early January 2024 (see Chart 4 in the Half Year Report)?
If the hyperscalers' key customers - the LLM providers like OpenAI - struggle to generate cash flows, we are beginning to question how long the unprecedented AI data centre capital expenditure boom can continue, particularly given how much has been funded through circular and increasingly opaque financing structures. This may also explain why hyperscalers keep lengthening their depreciation policies and why bond markets, which are usually more efficient than equity markets, are starting to worry about that canary in the data centre coal mine (see Chart 5 in the Half Year Report).
Given the above, why have we only been gradually trimming the Company's technology positions? There are offsets and whilst your ageing, cynical fund managers like to sit around fondly reminiscing on historic financial scandals and disasters we do also talk to our bright, young Schroder analysts and also our experienced and knowledgeable tech team - most of whom are still bullish on the outlook for AI technology stocks in Asia. There is no doubt AI is real, its capabilities continue to surprise and token usage and compute demand are growing very rapidly. This is the offset to the arguments above.
However, as outlined, we think some of the bullish long-term AI capital expenditure forecasts due to the rise of low-cost Chinese LLMs and the financing structures of AI data centres are vulnerable. So, we are likely to continue to trim our technology positions if stocks rise further. The Company is focused on those Asian technology stocks with the highest level of intellectual property (or barriers to entry) and those with genuine secular growth drivers due to the changing technology road map. The Company has no direct investments in LLMs and data centres where we see multiple providers and currently little product or service differentiation.
China/Hong Kong Cluster - Plus ça change, plus c'est la même chose
As noted earlier, the Company is now slightly overweight the China/HK cluster, mainly reflecting additions to higher-yielding financial stocks in Hong Kong. Singapore and Hong Kong remain the Company's largest country overweights relative to the Reference Index. In both markets, we view the economies as stable and policy as pro-growth, but the main driver of the overweight is our gradual shift away from cyclical technology stocks and into more defensive, higher-yielding businesses.
The China weighting within the Company has also edged up. This is due to bottom-up reasons rather than any change to our views on the economy and likely policy direction. In fact, we currently find it easy to discuss China with clients as our views on outlook for the economy have not changed for several years. We see the economy as relatively sluggish, deflationary and two speed (a slow domestic economy offset by strong export led growth).
A few charts in the Half Year Report highlight the headwinds for the domestic Chinese economy and why we are not rushing to buy domestic consumer names despite weak share price performances. On the key property sector there is little sign of recovery (see Chart 6 and Chart 7 in the Half Year Report), though with starts down 78% from the peak the delta should be set to turn and perhaps prices stabilise. However, with so much Chinese domestic wealth tied up in property that is hard to sell and impossible to rent (so effectively a depreciating asset) we believe this will remain a significant drag on consumption. The deflating property bubble when combined with an aging population, severe demographic imbalances and low welfare provision means Chinese consumption as a share of GDP is likely to remain structurally low (see Chart 8 in the Half Year Report). Current government policies, which are structured to favour high investment levels in industries deemed critical to the future, also mean we do not subscribe to the periodic reports suggesting imminent major policy measures to shift China to a more consumer driven economy.
The unwinding property bubble, together with a weak labour market and slow household income growth, continues to weigh on consumer confidence in China and keep retail sales sluggish (see Chart 9 in the Half Year Report). For the Company, this means focusing on Chinese consumer stocks where the investment case rests on market share gains, industry consolidation and strong capital returns, rather than simply on the hope of a consumer recovery. We favour hotels, given their shift to capital-light models and easing competition; gaming, where the market is effectively a duopoly; and selected internet names. We remain cautious on sectors with intense competition, such as e-commerce, retail, restaurants and electric vehicles, as well as consumer staples, where private labels, changing sales channels and shifting consumption habits remain large headwinds.
Given this gloomy backdrop, readers may wonder why we have increased exposure to China. While our top-down view of the economy has not changed, the market has derated and, importantly, many Chinese companies have improved their capital return policies. As Chart 10 in the Half Year Report shows, dilution was previously a major drag on EPS (earnings per share) growth, while dividends and buybacks were rare or absent. Today, we can find attractive businesses on reasonable valuations with more disciplined capital allocation. We therefore view China as an attractive market for stock pickers, rather than the policy-driven trading market it has often been perceived to be.
Australia/Singapore Cluster - "Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas"
Paul Samuelson's quote perhaps best explains why the Company is overweight Australia and Singapore. Neither economy or stock market is especially exciting, particularly compared with the rest of Asia, but sometimes boring is attractive.
The Company continues to hold a significant position in Singapore financials, which are benefiting as Singapore strengthens its role as a global wealth centre and Asia's international city, while Hong Kong increasingly serves as China's financial gateway to the world. The fund also owns Singapore Telecom, where management is placing greater emphasis on capital returns, and SEA, an e-commerce and finance business that we believe remains well positioned to gain share in underpenetrated emerging markets.
In Australia, the Company is focused on a mix of resource-related companies with attractive payout ratios, alongside selected domestic and healthcare names. The latter have disappointed as competition concerns and weak healthcare spending in the West have led to earnings downgrades. Following a review, we have consolidated exposure into two preferred long-term holdings where we believe the secular growth story remains intact.
With the Australian stock market lagging over the past 12 months, it is an area where we may add exposure as we reduce technology positions. As Chart 11 in the Half Year Report highlights, the main attractions of Australian equities are high dividend yields and concentrated industry structures, which reduce competitive pressure and can support more sustainable capital returns to shareholders.
India/ASEAN Cluster - Hope Springs Eternal?
With emerging ASEAN markets - Thailand, Indonesia, Malaysia and the Philippines - now representing less than 4% of the Company's Reference Index, they are effectively a rounding error and do not warrant detailed discussion. In short, we believe structural challenges-including limited policy momentum to improve education and the business environment, weak infrastructure and opaque politics-are likely to keep these economies in a lower-growth environment than in the past, or effectively stuck in a middle-income trap (see Chart 12 in the Half Year Report). Aggressive Chinese export growth, which is pressuring ASEAN manufacturing (see Chart 13 in the Half Year Report), and the risk that AI reduces outsourcing employment in areas such as call centres and software coding are additional headwinds. While we can identify bottom-up opportunities, the supposed structural growth story based on rising middle classes, thriving manufacturing sectors and emerging consumer champions is no longer evident.
Fortunately, for investors looking for genuine emerging markets, India is much more exciting offering a genuine growth story based on growing middle classes, emerging financial and internet stocks and potentially global leaders in industrial, software and pharmaceutical areas. We continue to find exciting businesses in India and always come back from trips with new investment ideas. Why then does the Company currently have only a c.4% exposure to India?
The issue is fundamentals. First, valuations are stretched: with the MSCI India trading on a PER (Price Earnings Ratio) of 22x and offering a dividend yield of around 1%, it is by far the most expensive market in Asia. Second, expectations look too optimistic. To justify valuations, Indian brokers and market commentators often promote bullish earnings forecasts, leading some to argue that India looks cheap on earnings two years out. In practice, however, those earnings have repeatedly failed to materialise, as Chart 14 in the Half Year Report shows.
A closer look at Chart 14 in the Half Year Report shows current consensus forecasts for the MSCI India EPS rising from 230 to 320 over the next two years, implying annual growth of around 18-20%. With Indian nominal GDP growth running at about 10%, and major index sectors such as banks, IT services and pharmaceuticals facing earnings headwinds from margin
We are not alone in viewing the Indian stock market as expensive. Insider selling remains elevated and, as in China before 2024, frequent placements and dilution mean EPS growth continues to lag corporate profit growth (see Chart 15 in the Half Year Report). We remain engaged and open-minded on India but ultimately, we want to be patient and disciplined when building our Indian investments.
Conclusion
In summary, we expect the second half to be less exciting with more moderate returns from Asian stockmarkets. The key risk to returns is the technology sector (primarily in Korea and Taiwan). We don't see an imminent collapse in technology stocks but we expect volatility to continue and questions on the long-term sustainability of AI capital expenditure to rise. On the flip side those markets and stocks that have not participated in the AI fervour look reasonably valued and are often well supported by attractive capital return policies. We expect to remain fully invested and to continue to position the Company in more defensive areas that have lagged.
This is consistent with the Company's gearing and hedging models. The shorter-term tactical models remain supportive, forecasting that falling commodity prices and inflationary expectations should help returns over the next three to six months. This is partly offset by caution from the longer-term valuation-based models, where trailing valuations are elevated versus history, albeit heavily skewed by the technology sector. Overall, the models suggest we should minimise gearing and look to hedge selectively when put pricing is attractive, given the tail risk of a market correction. The longer-term country models also align with our bottom-up view that the Company should be positioned more defensively.
Robin Parbrook and Lee King Fuei
Portfolio Managers
Schroder Investment Management Limited
14 September 2026
Investment Portfolio
As at 30 June 2026
|
|
Fair |
Portfolio |
Portfolio |
|
|
Value |
Exposure |
Exposure |
|
|
£'000 |
£'000 |
%1 |
|
Taiwan |
|
|
|
|
Taiwan Semiconductor Manufacturing |
118,557 |
118,557 |
16.0 |
|
ASE Technology Holding |
36,315 |
36,315 |
4.9 |
|
MediaTek |
35,541 |
35,541 |
4.8 |
|
Hon Hai Precision Industry |
19,869 |
19,869 |
2.7 |
|
Chroma ATE |
16,399 |
16,399 |
2.2 |
|
Delta Electronics |
8,717 |
8,717 |
1.2 |
|
Advantech |
7,544 |
7,544 |
1.0 |
|
Total Taiwan |
242,942 |
242,942 |
32.8 |
|
South Korea |
|
|
|
|
Samsung Electronics |
69,384 |
69,384 |
9.4 |
|
SK Hynix |
41,162 |
41,162 |
5.6 |
|
Samsung C&T |
13,455 |
13,455 |
1.8 |
|
Samsung Fire & Marine Insurance |
8,092 |
8,092 |
1.1 |
|
HD Hyundai Heavy Industries |
5,492 |
5,492 |
0.7 |
|
Total South Korea |
137,585 |
137,585 |
18.6 |
|
China |
|
|
|
|
Tencent Holdings3 |
28,963 |
28,963 |
3.9 |
|
Contemporary Amperex Technology |
17,862 |
17,862 |
2.4 |
|
NetEase (CFD) |
537 |
9,159 |
1.2 |
|
WuXi AppTec3 |
8,739 |
8,739 |
1.2 |
|
H World (CFD) |
(147) |
7,668 |
1.0 |
|
Espressif Systems Shanghai |
6,699 |
6,699 |
0.9 |
|
Airtac International Group |
5,368 |
5,368 |
0.7 |
|
Kanzhun (CFD) |
(340) |
5,212 |
0.7 |
|
Zhejiang Sanhua Intelligent Controls3 |
4,994 |
4,994 |
0.7 |
|
Total China |
72,675 |
94,664 |
12.7 |
|
Singapore |
|
|
|
|
DBS Group Holdings |
15,320 |
15,320 |
2.0 |
|
Singapore Telecommunications |
12,289 |
12,289 |
1.6 |
|
Oversea-Chinese Banking |
12,055 |
12,055 |
1.6 |
|
Singapore Exchange |
9,382 |
9,382 |
1.3 |
|
SEA4 |
8,447 |
8,447 |
1.1 |
|
Sheng Siong Group |
7,063 |
7,063 |
1.0 |
|
Total Singapore |
64,556 |
64,556 |
8.6 |
|
Hong Kong |
|
|
|
|
AIA Group |
16,151 |
16,151 |
2.2 |
|
Swire Pacific |
12,691 |
12,691 |
1.7 |
|
Techtronic Industries |
11,112 |
11,112 |
1.5 |
|
Hong Kong Exchanges & Clearing |
8,409 |
8,409 |
1.1 |
|
Swire Properties |
6,135 |
6,135 |
0.8 |
|
Galaxy Entertainment Group |
5,183 |
5,183 |
0.7 |
|
Total Hong Kong |
59,681 |
59,681 |
8.0 |
|
Australia |
|
|
|
|
BHP Group2 |
11,631 |
11,631 |
1.6 |
|
Brambles2 |
9,572 |
9,572 |
1.3 |
|
ANZ Group Holdings |
8,336 |
8,336 |
1.1 |
|
Dyno Nobel |
7,520 |
7,520 |
1.0 |
|
BlueScope Steel |
6,730 |
6,730 |
0.9 |
|
Orica |
6,711 |
6,711 |
0.9 |
|
Cochlear |
4,308 |
4,308 |
0.6 |
|
Total Australia |
54,808 |
54,808 |
7.4 |
|
India |
|
|
|
|
Astra Microwave Products |
11,621 |
11,621 |
1.6 |
|
Bharat Electronics |
8,006 |
8,006 |
1.1 |
|
HDFC Bank |
7,895 |
7,895 |
1.1 |
|
Total India |
27,522 |
27,522 |
3.8 |
|
Philippines |
|
|
|
|
International Container Terminal Services |
20,139 |
20,139 |
2.7 |
|
Century Pacific Food |
4,961 |
4,961 |
0.7 |
|
Total Philippines |
25,100 |
25,100 |
3.4 |
|
United Kingdom |
|
|
|
|
HSBC Holdings |
9,572 |
9,572 |
1.3 |
|
Rio Tinto (CFD) |
(561) |
8,559 |
1.2 |
|
Total United Kingdom |
9,011 |
18,131 |
2.5 |
|
United States of America |
|
|
|
|
ResMed |
7,815 |
7,815 |
1.1 |
|
Las Vegas Sands (CFD) |
(275) |
5,006 |
0.7 |
|
Total United States of America |
7,540 |
12,821 |
1.8 |
|
Vietnam |
|
|
|
|
Gemadept Group |
2,950 |
2,950 |
0.4 |
|
Total Vietnam |
2,950 |
2,950 |
0.4 |
|
Total Investments including CFDs5 |
704,370 |
740,760 |
100.0 |
|
|
|
|
|
|
|
Fair |
Portfolio |
Portfolio |
|
|
Value |
Exposure |
Exposure |
|
|
£'000 |
£'000 |
%1 |
|
Derivative Financial Instruments |
|
|
|
|
Futures |
|
|
|
|
Taiex Future July 2026 |
(560) |
(25,004) |
|
|
Total Futures |
(560) |
(25,004) |
|
|
Index Put Options |
|
|
|
|
LY Index Put Option 23950 August 2026 |
240 |
|
|
|
S&P 500 Index Put Option 7405 August 2026 |
205 |
|
|
|
S&P 500 Index Put Option 7200 July 2026 |
45 |
|
|
|
Total Index Put Options6 |
490 |
|
|
|
Total Investments and Derivative Financial Instruments |
704,300 |
715,756 |
|
Investments are classified by the Manager in the region or country of their main business operations or listing. The portfolio exposure indicates the impact on market price movements resulting from the ownership of shares and derivative instruments.
Fair value represents the true value of the portfolio, which is reflected on the balance sheet. In the case of holding a CFD, the fair value reflects the profit or loss generated by the CFD since its inception, based on the movement of the underlying share price. However, when the Company solely holds shares, both the fair value and the portfolio exposure align.
Highlighted stocks are the twenty largest investments, which by value account for 71.5% (30 June 2025: 58.5% and 31 December 2025: 62.4%).
1 Portfolio exposure is expressed as a percentage of total investments and financial derivative instruments.
2 Listed in the UK.
3 Listed in Hong Kong (SAR).
4 Listed in the USA.
5 Comprises the following:
|
|
|
Fair |
Portfolio |
|
|
|
Value |
Exposure |
|
|
|
£'000 |
£'000 |
|
Equities |
|
696,709 |
696,709 |
|
American Depositary Receipts (ADR) |
|
8,447 |
8,447 |
|
Total Investments (excluding CFDs) |
|
705,156 |
705,156 |
|
Contract For Differences (CFD) |
|
(786) |
35,604 |
|
Total Investments (including CFDs) |
|
704,370 |
740,760 |
6 The notional values of the options equate to 10.4% of total investments.
Interim Management Statement
Principal risks and uncertainties
The principal risks and uncertainties associated with the Company's business fall into the following categories: macro factors, including the geopolitical/economic environment and climate change; investment objective and promotion; investment strategy and performance; key person; ESG considerations; gearing/liquidity; compliance with regulations; oversight of service providers; information technology resilience and security; and financial. The Board also considers the development of artificial intelligence to be an emerging risk. A detailed explanation of the risks and uncertainties in each of these categories can be found on pages 46 to 49 of the Company's published Annual Report and Financial Statements for the year ended 31 December 2025.
In the view of the Board, the Company's principal risks and uncertainties have not changed during the six months ended 30 June 2026. However, the Board considers that the severity of some of the risks has increased. While assessing the financial statements, the Board undertook a review of the principal and emerging risks and noted that, regarding the Trump administration in the US, the Board remains mindful of uncertainty surrounding potential changes to financial and public policy.
Going concern
Having assessed the principal risks and uncertainties, and the other matters discussed in connection with the viability statement as set out on page 50 of the published Annual Report for the year ended 31 December 2025, the Directors consider it appropriate to adopt the going concern basis in preparing these financial statements.
Related party transactions
There have been no transactions with related parties that have materially affected the financial position or the performance of the Company during the six months ended 30 June 2026.
Directors' responsibility statement
In respect of the Half Year Report for the six months ended 30 June 2026, we confirm that, to the best of our knowledge:
- this condensed set of financial statements has been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, specifically adhering to Financial Reporting Standard 104 "Interim Financial Reporting" and the Statement of Recommended Practice, "Financial Statements of Investment Companies and Venture Capital Trusts" issued in July 2022. It provides a true and fair view of the assets, liabilities, financial position and profit and loss of the Company as at 30 June 2026, as required by the Disclosure Guidance and Transparency Rule 4.2.4R; and
- the Half Year Report includes a fair review of the information concerning related party transactions as required by Disclosure Guidance and Transparency Rule 4.2.8R.
The Half Year Report has not been reviewed or audited by the Company's auditor.
The Half Year Report for the six months ended 30 June 2026 was approved by the Board and the above Responsibility Statement has been signed on its behalf.
Sarah MacAulay
Chairman
For and on behalf of the Board
14 September 2026
Income Statement
For the six months ended 30 June 2026 (unaudited)
|
|
|
(Unaudited) For the six months ended 30 June |
(Unaudited) For the six months ended 30 June |
(Audited) For the year ended 31 December |
||||||
|
|
|
2026 |
2026 |
2026 |
2025 |
2025 |
2025 |
2025 |
2025 |
2025 |
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Gains/(losses) on investments |
|
|
|
|
|
|
|
|
|
|
|
held at fair value through |
|
|
|
|
|
|
|
|
|
|
|
profit or loss |
|
- |
193,481 |
193,481 |
- |
(18,911) |
(18,911) |
- |
55,629 |
55,629 |
|
Net (losses)/gains on derivative |
|
|
|
|
|
|
|
|
|
|
|
contracts |
|
- |
(14,371) |
(14,371) |
- |
2,162 |
2,162 |
- |
2,024 |
2,024 |
|
Net foreign currency (losses)/gains |
|
- |
(170) |
(170) |
- |
1,186 |
1,186 |
- |
1,763 |
1,763 |
|
Income from investments |
|
6,937 |
- |
6,937 |
6,727 |
- |
6,727 |
11,803 |
- |
11,803 |
|
Other interest receivable and |
|
|
|
|
|
|
|
|
|
|
|
similar income |
|
110 |
- |
110 |
60 |
- |
60 |
103 |
- |
103 |
|
Gross return/(loss) |
|
7,047 |
178,940 |
185,987 |
6,787 |
(15,563) |
(8,776) |
11,906 |
59,416 |
71,322 |
|
Management fee |
|
(486) |
(1,459) |
(1,945) |
(364) |
(1,091) |
(1,455) |
(781) |
(2,343) |
(3,124) |
|
Performance fee |
|
- |
(3,229)1 |
(3,229) |
- |
- |
- |
- |
- |
- |
|
Administrative expenses |
|
(336) |
- |
(336) |
(423) |
- |
(423) |
(725) |
- |
(725) |
|
Net return/(loss) |
|
|
|
|
|
|
|
|
|
|
|
before finance costs |
|
|
|
|
|
|
|
|
|
|
|
and taxation |
|
6,225 |
174,252 |
180,477 |
6,000 |
(16,654) |
(10,654) |
10,400 |
57,073 |
67,473 |
|
Finance costs |
|
(174) |
(522) |
(696) |
(213) |
(638) |
(851) |
(397) |
(1,190) |
(1,587) |
|
Net return/(loss) |
|
|
|
|
|
|
|
|
|
|
|
before taxation |
|
6,051 |
173,730 |
179,781 |
5,787 |
(17,292) |
(11,505) |
10,003 |
55,883 |
65,886 |
|
Taxation |
3 |
(408) |
(142) |
(550) |
(549) |
(878) |
(1,427) |
(825) |
(930) |
(1,755) |
|
Net return/(loss) after |
|
|
|
|
|
|
|
|
|
|
|
taxation |
|
5,643 |
173,588 |
179,231 |
5,238 |
(18,170) |
(12,932) |
9,178 |
54,953 |
64,131 |
|
Return/(loss) per |
|
|
|
|
|
|
|
|
|
|
|
share (pence) |
4 |
6.05 |
186.01 |
192.06 |
5.60 |
(19.43) |
(13.83) |
9.81 |
58.76 |
68.57 |
The "Total" column of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by the The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return/(loss) after taxation is also the total comprehensive income/ (loss) for the period.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.
1 The performance fee has been accrued based on an estimate of the expected amount that will fall due to be paid to Schroders after the successful completion of the Combination with Pacific Assets Trust PLC in respect of performance during the period from 1 January 2026 to the Calculation Date of the Combination. This treatment is deemed appropriate following the General Meeting of the Company on 8 September 2026 at which the issuance of the Company's shares to Pacific Assets Trust PLC shareholders was approved. An accrual on this basis been reflected in the daily reported NAV of the Company from 9 September 2026.
Statement of Changes in Equity
For the six months ended 30 June 2026 (unaudited)
|
|
|
Called-up |
|
Capital |
|
|
|
|
|
|
|
share |
Share |
redemption |
Special |
Capital |
Revenue |
|
|
|
|
capital |
premium |
reserve |
reserve |
reserve |
reserve |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 31 December 2025 |
|
5,456 |
114,656 |
11,646 |
29,182 |
347,200 |
21,312 |
529,452 |
|
Repurchase of the Company's |
|
|
|
|
|
|
|
|
|
own shares into treasury |
|
- |
- |
- |
- |
(4,434) |
- |
(4,434) |
|
Net return after taxation |
|
- |
- |
- |
- |
173,588 |
5,643 |
179,231 |
|
Dividend paid in the period |
5 |
- |
- |
- |
- |
- |
(10,755) |
(10,755) |
|
At 30 June 2026 |
|
5,456 |
114,656 |
11,646 |
29,182 |
516,354 |
16,200 |
693,494 |
For the six months ended 30 June 2025 (unaudited)
|
|
|
Called-up |
|
Capital |
|
|
|
|
|
|
|
share |
Share |
redemption |
Special |
Capital |
Revenue |
|
|
|
|
capital |
premium |
reserve |
reserve |
reserve |
reserve |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 31 December 2024 |
|
5,456 |
114,656 |
11,646 |
29,182 |
292,247 |
22,889 |
476,076 |
|
Net (loss)/return after taxation |
|
- |
- |
- |
- |
(18,170) |
5,238 |
(12,932) |
|
Dividend paid in the period |
5 |
- |
- |
- |
- |
- |
(10,755) |
(10,755) |
|
At 30 June 2025 |
|
5,456 |
114,656 |
11,646 |
29,182 |
274,077 |
17,372 |
452,389 |
For the year ended 31 December 2025 (audited)
|
|
|
Called-up |
|
Capital |
|
|
|
|
|
|
|
share |
Share |
redemption |
Special |
Capital |
Revenue |
|
|
|
|
capital |
premium |
reserve |
reserve |
reserve |
reserve |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 31 December 2024 |
|
5,456 |
114,656 |
11,646 |
29,182 |
292,247 |
22,889 |
476,076 |
|
Net return after taxation |
|
- |
- |
- |
- |
54,953 |
9,178 |
64,131 |
|
Dividend paid in the period |
5 |
- |
- |
- |
- |
- |
(10,755) |
(10,755) |
|
At 31 December 2025 |
|
5,456 |
114,656 |
11,646 |
29,182 |
347,200 |
21,312 |
529,452 |
Statement of Financial Position
At 30 June 2026 (unaudited)
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2026 |
2025 |
2025 |
|
|
Note |
£'000 |
£'000 |
£'000 |
|
Fixed assets |
|
|
|
|
|
Investments held at fair value through profit or loss |
|
705,156 |
472,362 |
530,041 |
|
Current assets |
|
|
|
|
|
Debtors |
|
2,231 |
1,683 |
335 |
|
Cash and cash equivalents |
|
2,927 |
1,021 |
2,361 |
|
Derivative financial instruments held at fair value through profit or loss |
|
1,027 |
367 |
490 |
|
|
|
6,185 |
3,071 |
3,186 |
|
Current liabilities |
|
|
|
|
|
Creditors: amounts falling due within one year |
6 |
(14,097) |
(20,443) |
(1,318) |
|
Derivative financial instruments held at fair value through profit or loss |
|
(1,883) |
(363) |
(513) |
|
|
|
(15,980) |
(20,806) |
(1,831) |
|
Net current liabilities |
|
(9,795) |
(17,735) |
1,355 |
|
Total assets less current liabilities |
|
695,361 |
454,627 |
531,396 |
|
Net current liabilities |
|
|
|
|
|
Deferred taxation |
|
(1,867) |
(2,238) |
(1,944) |
|
Net assets |
|
693,494 |
452,389 |
529,452 |
|
Capital and reserves |
|
|
|
|
|
Called-up share capital |
7 |
5,456 |
5,456 |
5,456 |
|
Share premium |
|
114,656 |
114,656 |
114,656 |
|
Capital redemption reserve |
|
11,646 |
11,646 |
11,646 |
|
Special reserve |
|
29,182 |
29,182 |
29,182 |
|
Capital reserve |
|
516,354 |
274,077 |
347,200 |
|
Revenue reserve |
|
16,200 |
17,372 |
21,312 |
|
Total equity shareholders' funds |
|
693,494 |
452,389 |
529,452 |
|
Net asset value per share (pence) |
8 |
747.01 |
483.71 |
566.11 |
Registered in England and Wales as a public company limited by shares
Company registration number: 02153093
Cash Flow Statement
For the six months ended 30 June 2026 (unaudited)
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
For the |
For the |
For the |
|
|
|
six months |
six months |
year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2026 |
2025 |
2025 |
|
|
Note |
£'000 |
£'000 |
£'000 |
|
Net cash inflow from operating activities |
9 |
4,697 |
815 |
4,041 |
|
Investing activities |
|
|
|
|
|
Purchases of investments |
|
(126,550) |
(82,418) |
(171,808) |
|
Sales of investments |
|
144,469 |
96,477 |
204,328 |
|
Net cash flows on derivative instruments |
|
(13,538) |
2,898 |
2,043 |
|
Net cash inflow from investing activities |
|
4,381 |
16,957 |
34,563 |
|
Net cash inflow before financing |
|
9,078 |
17,772 |
38,604 |
|
Financing activities |
|
|
|
|
|
Dividend paid |
|
(10,755) |
(10,755) |
(10,755) |
|
Interest paid |
|
(707) |
(897) |
(1,604) |
|
Bank loans drawn down |
|
7,339 |
- |
- |
|
Bank loans repayment |
|
- |
(9,715) |
(20,440) |
|
Repurchase of the Company's own shares into treasury |
|
(4,415) |
(259) |
(259) |
|
Net cash outflow from financing activities |
|
(8,538) |
(21,626) |
(33,058) |
|
Net cash inflow/(outflow) in the period |
|
540 |
(3,854) |
5,546 |
|
Cash and cash equivalents at the beginning of the period |
|
2,361 |
(3,031) |
(3,031) |
|
Change in cash and cash equivalents |
|
540 |
(3,854) |
5,546 |
|
Exchange movements |
|
26 |
(364) |
(154) |
|
Cash and cash equivalents at the end of the period |
|
2,927 |
(7,249) |
2,361 |
|
Represented by: |
|
|
|
|
|
Cash and cash equivalents and derivative clearing houses |
|
2,927 |
1,021 |
2,361 |
|
Overdraft at bank and derivative clearing houses |
|
- |
(8,270) |
- |
|
Cash and cash equivalents at the end of the year |
|
2,927 |
(7,249) |
2,361 |
Notes to the Financial Statements
For the six months ended 30 June 2026
1. Financial Statements
The information contained within the financial statements in this Half Year Report has not been audited or reviewed by the Company's independent auditor.
The figures and financial information for the year ended 31 December 2025 are extracted from the latest published financial statements of the Company and do not constitute statutory financial statements for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditor which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, in particular with Financial Reporting Standard 104 "Interim Financial Reporting" and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued by The Association of Investment Companies in July 2022.
All of the Company's operations are of a continuing nature.
The accounting policies applied to these accounts are consistent with those applied in the financial statements for the year ended 31 December 2025.
3. Taxation
|
|
(Unaudited) Six months ended 30 June 2026 |
(Unaudited) Six months ended 30 June 2025 |
(Audited) Year ended 31 December 2025 |
||||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Irrecoverable overseas tax |
408 |
- |
408 |
549 |
- |
549 |
825 |
- |
825 |
|
Overseas capital gains tax |
- |
142 |
142 |
- |
878 |
878 |
- |
930 |
930 |
|
Taxation for the year |
408 |
142 |
550 |
549 |
878 |
1,427 |
825 |
930 |
1,755 |
The Company's effective corporation tax rate is nil, as deductible expenses exceed taxable income.
The overseas capital gains tax relates to the deferred tax liability on unrealised gains on Indian investments held at the period end.
4. Return/(loss) per share
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
30 June |
30 June |
31 December |
|
|
2026 |
2025 |
2025 |
|
Revenue return |
5,643 |
5,238 |
9,178 |
|
Capital return/(loss) |
173,588 |
(18,170) |
54,953 |
|
Total return/(loss) |
179,231 |
(12,932) |
64,131 |
|
Weighted average number of shares in issue during the period |
93,319,843 |
93,524,454 |
93,524,454 |
|
Revenue return per share (pence) |
6.05 |
5.60 |
9.81 |
|
Capital return/(loss) per share (pence) |
186.01 |
(19.43) |
58.76 |
|
Total return/(loss) per share (pence) |
192.06 |
(13.83) |
68.57 |
5. Dividends paid
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
30 June |
30 June |
31 December |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
2025 dividend paid of 11.5p (2024: 11.5p) |
10,755 |
10,755 |
10,755 |
No interim dividend has been declared in respect of the six months ended 30 June 2026 (2025: nil).
6. Creditors: amounts falling due within one year
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
30 June |
30 June |
31 December |
|
|
2026 |
2025 |
2025 |
|
Bank loan |
7,534 |
11,092 |
- |
|
Bank overdraft |
- |
8,066 |
- |
|
Amounts held at derivative clearing houses and brokers |
- |
204 |
- |
|
Repurchase of ordinary shares into treasury awaiting settlement |
19 |
- |
- |
|
Other creditors and accruals |
6,544 |
1,081 |
1,318 |
|
|
14,097 |
20,443 |
1,318 |
The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.
The bank loan comprises of USD10 million drawn down on the Company's £23.5 million, 364 day multicurrency credit facility with The Bank of Nova Scotia, London Branch, expiring July 2026. The facility is secured and subject to covenants and restrictions which are customary for a facility of this nature, all of which have been complied with during the period. The facility is reviewed annually, at which point the Directors can decide to restate and renew the facility for a further year.
7. Called-up share capital
Changes in called-up share capital during the period were as follows:
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
30 June |
30 June |
31 December |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
Ordinary shares of 5p each, allotted, called-up and fully paid |
|
|
|
|
Opening balance of 93,524,454 (2025: 93,524,454) shares |
4,676 |
4,676 |
4,676 |
|
Repurchase of 688,852 (year ended 31 December 2025: nil and period ended 30 June 2025: nil) shares into treasury |
(34) |
- |
- |
|
Subtotal of 92,835,602 (year ended 31 December 2025: 93,524,454 and period ended 30 June 2025: 93,524,454) shares |
4,642 |
4,676 |
4,676 |
|
16,279,049 (year ended 31 December 2025: 15,590,197 and period ended 30 June 2025: 15,590,197) shares held in treasury |
814 |
780 |
780 |
|
Closing balance1 |
5,456 |
5,456 |
5,456 |
1 Represents 109,114,651 (2025: 109,114,651) shares of 5p each, including 16,279,049 (2025: 15,590,197) held in treasury.
8. Net asset value per share
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2025 |
|
Total equity shareholders' funds (£'000) |
693,494 |
452,389 |
529,452 |
|
Shares in issue at the period end |
92,835,602 |
93,524,454 |
93,524,454 |
|
Net asset value per share (pence) |
747.01 |
483.71 |
566.11 |
9. Reconciliation of total return on ordinary activities before finance costs and taxation to net cash inflow from operating activities
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
30 June |
30 June |
31 December |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
Total return on ordinary activities before finance costs and taxation |
180,477 |
(10,654) |
67,473 |
|
Less capital returns on ordinary activities before finance costs and taxation |
(174,252) |
16,654 |
(57,073) |
|
Increase in prepayments and accrued income |
(686) |
(529) |
(69) |
|
(Increase)/decrease in other debtors |
(57) |
(6) |
20 |
|
Increase/(decrease) in other creditors |
4,494 |
(2,831) |
(2,622) |
|
Less stock and accumulation dividends |
- |
(41) |
- |
|
Management fee allocated to capital |
(1,459) |
(1,091) |
(2,343) |
|
Performance fee allocated to capital |
(3,229) |
- |
- |
|
Overseas withholding tax deducted at source |
(591) |
(687) |
(1,345) |
|
Net cash inflow from operating activities |
4,697 |
815 |
4,041 |
10. Financial instruments measured at fair value
The Company's financial instruments within the scope of FRS 102 that are held at fair value include its investment portfolio and derivative financial instruments.
FRS 102 requires financial instruments to be categorised into a hierarchy consisting of the three levels below.
Level 1 - valued using unadjusted quoted prices in active markets for identical assets
Level 2 - valued using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data such as quoted prices for similar instruments in active markets, broker quoted prices, or yield curves).
Level 3 - valued using inputs that are unobservable.
The following table sets out the fair value measurements using the FRS102 hierarchy above:
|
|
30 June 2026 (unaudited) |
|||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial instruments held at fair value through profit or loss |
|
|
|
|
|
Equity investments |
705,156 |
- |
- |
705,156 |
|
Derivative financial instruments - index put options |
490 |
- |
- |
490 |
|
Derivative financial instruments - contracts for difference - CFD assets |
- |
537 |
- |
537 |
|
Derivative financial instruments - contracts for difference - CFD liabilities |
- |
(1,323) |
- |
(1,323) |
|
Derivative financial instruments - Futures |
(560) |
- |
- |
(560) |
|
Total |
705,086 |
(786) |
- |
704,300 |
|
|
30 June 2025 (unaudited) |
|||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial instruments held at fair value through profit or loss |
|
|
|
|
|
Equity investments |
472,362 |
- |
- |
472,362 |
|
Derivative financial instruments - contracts for difference - CFD assets |
- |
311 |
- |
311 |
|
Derivative financial instruments - index put options |
56 |
- |
- |
56 |
|
Derivative financial instruments - forward currency contracts |
- |
(363) |
- |
(363) |
|
Total |
472,418 |
(52) |
- |
472,366 |
|
|
31 December 2025 (audited) |
|||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial instruments held at fair value through profit or loss |
|
|
|
|
|
Equity investments |
530,041 |
- |
- |
530,041 |
|
Derivative financial instruments - index put options |
137 |
- |
- |
137 |
|
Derivative financial instruments - contracts for difference - CFD assets |
- |
353 |
- |
353 |
|
Derivative financial instruments - contracts for difference - CFD liabilities |
- |
(513) |
- |
(513) |
|
Total |
530,178 |
(160) |
- |
530,018 |
11. Events after the reporting period
The Directors have evaluated the period since the half year date and have noted that in June 2026, the Company and Pacific Assets Trust plc ("PAC") announced that they had agreed heads of terms to combine the two companies. In August 2026, both the Company and PAC published circulars and notices convening General Meetings to seek shareholder approval for the proposals. In September 2026 all resolutions put to the General Meetings of the Company and PAC were duly passed.
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