Annual Results
Summary by AI BETAClose X
LONDON STOCK EXCHANGE ANNOUNCEMENT
SCHRODER BSC SOCIAL IMPACT TRUST PLC
Legal Entity Identifier: 549300PG5MF2NY4ZRM86
Information disclosed in accordance with DTR 4.2.2
Annual Results
and
Update on Strategic Review
29 October 2026
The Board of Schroder BSC Social Impact Trust plc (the "Company"), which provides a unique investment opportunity to address UK social challenges, today announces the publication of its Annual Report and Financial Statements for the year to 30 June 2026.
The Annual Report and Financial Statements are being published in hard copy format, and an electronic copy will shortly be available to download from the Company's website: https://www.schroders.com/sbsi. A copy of the 2026 Annual Report and Financial Statements will shortly be submitted to the FCA's National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Financial highlights:
NAV per share of 104.27p (FY 2025: 102.94p) at year end
NAV total return per share of +5.0% (FY 2025: +1.6%) for the year, driven by strong income generation across the portfolio and valuation gains in the Debt & Equity for Social Enterprises asset class
NAV total return per share of +17.5% since inception (+3.0% annualised)
2.6p dividend declared, payable in December 2026, representing a 2.5% dividend yield based on net asset value (NAV) at 30 June 2026 and within the Company’s target annual dividend range of 2–3% of NAV.
Impact highlights since inception:
£96m of capital committed to 197 high impact frontline organisations
Reaching over 434,000 people, 98% of whom are underserved or disadvantaged
Generating over £375m of public and household savings and benefits
Update on the strategic review:
At the time of the Half Year Results announcement on 31 March 2026, the Board stated its intention to include proposals for the future of the Company alongside this annual report. Since that time the Board, alongside its advisers, has continued exploring ways to provide a cash exit for shareholders that desire near-term liquidity, and an ongoing vehicle for the shareholders who have expressed a wish to remain invested in the portfolio.
In that regard, the Board is encouraged that Better Society Capital has been working towards developing a new Private Fund Limited Partnership (‘PFLP’), with the view to it making a proposal to acquire the Company’s High Impact Investment Portfolio (the ‘Portfolio’), subject to, among other things, sufficient interest in the PFLP. If the PFLP is successful and terms for the acquisition of the Portfolio can be agreed, certain shareholders would be able to continue their investment in the Portfolio, while non-participating shareholders would be provided with a near-term cash exit. The Board therefore believes that allowing BSC some further time to develop their PFLP is in the best interests of shareholders, and recommends that shareholders vote FOR continuation at the AGM on 17 December 2026.” Further information is included in the Chair’s Statement, with full details of the proposal expected in the first quarter of 2027.
Results Presentation:
The Portfolio Managers, together with the Chair, will present a webinar on the results at 10.30 am on Monday 9 November 2026. This is open to all existing and potential shareholders, who can sign up for the webinar at: https://www.schroders.events/SBSI26.
Susannah Nicklin, Chair of the Schroder BSC Social Impact Trust plc, said:
“Following a thorough strategic review and extensive consultation with shareholders, the Board and I remain focused on delivering the best outcome for all investors. The consultation has highlighted differing priorities, including continued investment in the portfolio for some and access to liquidity or a cash exit for others. We are encouraged that Better Society Capital has been working towards developing a solution that may potentially be able to deliver in line with both of those priorities. The Board believes that allowing further time for BSC to develop their proposals is in the interests of all shareholders. We appreciate the constructive engagement received throughout the process and look forward to updating shareholders as work progresses.”
For further information, please contact:
Schroders (Alternative Investment Fund Manager and Company Secretary)
Charlotte Banks/Kirsty Preston (PR & Media)
+44 (0)20 7658 9063/+44 (0)20 7658 1961
Natalia de Sousa (Schroder Investment Management Limited, Company Secretary)
+44 (0)20 7658 6000
Better Society Capital (Portfolio Manager)
Susanna Hudson (Investor Engagement)
shudson@bettersocietycapital.com
+44 (0)20 3821 5905
Lauren Rae (Communications)
+44 7464799565
Winterflood Investment Trusts (Broker)
Neil Langford
+44 (0)20 3100 0000
About Schroder BSC Social Impact Trust plc
The Company was launched in December 2020, to enable access to high social impact investment opportunities in private markets - tackling social challenges across the UK. The Company manages a diversified portfolio across asset classes, targeting sustainable returns, demonstrable social impact, and low correlation to traditional public markets.
Further information about the Company can be found on its website at www.schroders.com/SBSI
About Better Society Capital
Better Society Capital is the UK's leading social impact investor. Our mission is to grow the amount of money invested in tackling social issues and inequalities in the UK. We do this by investing our own capital and helping others invest for impact too.
Since 2012, we have helped build a market that has directed more than £11 billion into social purpose organisations tackling issues from homelessness and mental health to childhood obesity and fuel poverty, a more than thirteen-fold increase.
Further information about Better Society Capital can be found at www.bettersocietycapital.com
About Schroders Limited
As a global asset and wealth manager with £867.8 billion* (€1007.4 billion; $1151.8 billion) assets under management, we believe better outcomes come from asking better questions. By combining research, data and judgement, we make deliberate investment decisions and take the risks that matter. We don’t simply follow.
On 1 October 2026, we joined forces with Nuveen to create one of the world’s leading active asset and wealth managers, with approximately USD 2.6 trillion in assets under management, capabilities spanning public to private markets, and the long-term support of parent company TIAA.
Our approach has helped deliver for our clients for over 220 years.
Our specialists around the world draw on local insight to uncover opportunities across public and private markets. Whether you’re an institution, an intermediary or a private investor, we work alongside you - bringing the same curiosity and discipline to understanding your goals.
We create prosperity - together.
*Data as at 30 June 2026
Chairman’s Statement
“The Board recommends shareholders vote FOR continuation such that further time is provided to progress the development of the PFLP and for discussions to continue with a view to bringing proposals forward to shareholders in Q1 2027.”
Introduction and Strategic Review Update
The Board launched a strategic review in July 2025 in light of the wide discount to NAV at which the shares had traded (and continue to trade) and the limited ability to grow the asset base of the Company in challenging markets.
The Company has undertaken an extensive shareholder consultation, and shareholder feedback has been varied, with shareholders representing a majority of the Company’s issued share capital indicating a desire for continued investment in the Company’s unique social impact portfolio, while others have expressed a preference for a return of capital or nearer term liquidity.
The Board, alongside its advisers, has been considering various alternatives to enable those shareholders that wish to remain invested the opportunity to do so, while providing a cash exit for those shareholders that desire near-term liquidity.
In that regard, Better Society Capital (“BSC”) has been progressing towards the development of a new Private Fund Limited Partnership (the “PFLP”) with a view to making a proposal to the Board to acquire the Company’s High Impact Investment Portfolio (the “Portfolio”), subject to there being sufficient interest in the PFLP.
The Board is encouraged by this initiative and believes it is in the interests of shareholders to allow time to further develop the PFLP which, if successful, and terms for the acquisition of the Portfolio can be agreed, would provide a near-term cash exit for shareholders while enabling certain shareholders the opportunity to continue their investment in the Portfolio.
BSC has advised the Board that the PFLP would be a Limited Partnership managed by a third-party AIFM with portfolio management services provided by BSC. The PFLP would see BSC continue to manage the Portfolio, with assets held to their natural maturities. Liquidity for PFLP investors would be provided through portfolio income, as well as assets maturing over time.
Due to the illiquid nature of the Limited Partnership structure, an investment in the PFLP would be available only to professional investors and eligible counterparties (“Professional Investors”). The intention would be to provide shareholders in the Company that are Professional Investors the opportunity to exchange their interest in SBSI for interest in the PFLP. In addition, BSC would make a new commitment to the PFLP of up to £15m, subject to securing sufficient interest in the PFLP and terms being agreed.
There is no certainty that there will be sufficient interest in the PFLP to be able to make a proposal to acquire the Portfolio or that terms can be agreed between the Board and BSC. While no specific terms have been agreed at this stage, it is expected that any proposal to acquire the Portfolio would be at a discount to the prevailing valuation, taking into account the highly illiquid nature of the portfolio.
If for any reason the PFLP proposal is not brought forward by the end of Q1 2027, or terms cannot be agreed for the acquisition of the Portfolio by the PFLP, the Board intends to bring forward alternative proposals, which may include a managed wind-down of the Company.
The Board has instructed BSC to make no new commitments or investments going forward, other than to meet existing commitments or where a follow-on investment is considered by the Board to be in the best interests of shareholders.
Continuation Resolution
It is the Company’s policy, as set out in its Prospectus published on 23 November 2020, that if in the two-year period ending on 31 December 2023, and in any two-year period following such date, the ordinary shares have traded, on average, at a discount in excess of 10% to net asset value per share, the Directors will propose an ordinary resolution at the Company’s next annual general meeting that the Company continues its business as presently constituted (the “Continuation Resolution”). If the Continuation Resolution is not passed, the Directors will put forward proposals for the reconstruction or reorganisation of the Company, bearing in mind the liquidity of the Company’s investments, as soon as reasonably practicable following the date on which the Continuation Resolution is not passed. Such proposals would be subject to shareholder approval.
The average discount over the two-year period to 31 December 2025 was 23.8%, and accordingly the Board intends to propose a Continuation Resolution at the AGM. The Board recommends shareholders vote FOR continuation such that further time is provided to progress the development of the PFLP and for discussions to continue with a view to bringing proposals forward to shareholders in Q1 2027.
If the PFLP proposal does not proceed following the passing of the Continuation Resolution, this is not expected to result in any material delay in returning capital to shareholders in the event of a managed wind-down, due to the pausing of new commitments and investments, and because any initial return of capital to shareholders under a managed wind-down would not be expected until late 2027 at the earliest.
Financial and Impact Results
The Social Impact Trust delivered a NAV total return of 4.96% in the year to 30 June 2026, bringing the NAV total return since inception to 17.54% (2.97% annualised). NAV per share as at 30 June 2026 was 104.27p, compared with 102.94p at 30 June 2025.
In the year to 30 June 2026, the Company outperformed its CPI+2% target return by 0.36%, with NAV total return per share of 4.96%, while the CPI increase for the same period was 2.60%1.
The Company will pay a dividend of 2.6p per share (2025: 3.76p) on 18 December 2026, which represents a dividend yield of 2.5% based on the NAV at 30 June 2026. This is within our guided dividend range of 2–3% yield on NAV per annum. Over the year, the share price total return was –2.9% and the discount to NAV at year end was 31.4%. The Company bought back 2.93m shares, contributing 1.25p to NAV per share.
As well as a financial return, the Company’s investments continued to enable substantial positive impact: the organisations financed by the High Impact Investment Portfolio have reached c.434,000 people and generated an estimated £375m in savings and additional income for the Government, households and communities since inception.
In June 2026, the Company published its fifth Impact Report, available at: https://schro.link/afmnw2
Further information on the Company’s financial and impact performance is available in the Portfolio Manager’s Report.
Outlook
The strategic review has involved careful consideration of the Company’s future and extensive engagement with shareholders. I would like to thank shareholders for their continued support and for the thoughtful and constructive feedback provided throughout this process.
The Board recognises that shareholders have differing objectives and is therefore encouraged by BSC’s move to develop the PFLP, which could provide a cash exit for those seeking near-term liquidity while allowing eligible Professional Investors to continue their investment in the Portfolio. Further work is required, and there can be no certainty that the proposal will come to fruition, or that acceptable terms will be agreed. The Board nevertheless believes it is appropriate to allow additional time for the proposal to be developed, while retaining the option to bring forward alternative proposals, including a managed wind-down, should this prove necessary. Meanwhile, BSC continues to manage the portfolio to protect returns and deliver important services to the most disadvantaged populations across UK communities. I look forward to engaging with shareholders ahead of and at the AGM on 17 December 2026.
1 ONS, Consumer price inflation, UK: June 2026.
Susannah Nicklin
Chair
28 October 2026
Portfolio Manager’s Review
Market developments
The Company’s financial year saw continued Government support for the impact economy. Several of the new measures implemented directly strengthen the revenue streams and demand drivers behind our investments in housing, tackling homelessness, community energy and outcomes-based public services. In the near term, this provides greater certainty over income for our investees, and over the longer term these policy measures may unlock future pipeline for social impact investing models.
In November 2025, the Government launched the Office for the Impact Economy, a single front door for impact investors, philanthropists and purpose-driven businesses to partner with Government1. The £500m Better Futures Fund, announced last year, has moved from ambition into delivery with its first round of applications opened in April 2026, and further rounds from 2027 designed to scale up the social outcomes partnerships2 market significantly3. Both initiatives reflect recommendations from the Social Impact Investment Advisory Group, of which Better Society Capital (“BSC” or the “Portfolio Manager”) is a member. A larger, better-funded outcomes market should support the future pipeline of opportunities for social outcomes partnerships such as those in the Company’s portfolio.
In housing, the £39bn Social and Affordable Homes Programme began in April 2026. It is accompanied by a 10-year rent settlement allowing social rents to rise by CPI+1% a year4. This gives Registered Providers, the key counterparties across the Company’s housing funds, a decade of visibility on inflation-linked rental income, strengthening their capacity to meet lease obligations and invest in new and existing homes. The need remains acute. On a single night in autumn 2025, a record 4,793 people were sleeping rough in England, and by 31 March 2026 a record 135,580 households were living in temporary accommodation5. In response to the homelessness crisis, the Government published its National Plan to End Homelessness in December 20256.
In April 2026, the final independent evaluation of the “Everyone In” Social Investment Pilot was published. Designed by BSC and launched in 2020 as part of the Government’s response to rough sleeping during COVID-19, the pilot combined £50m of seed capital from the Ministry of Housing, Communities and Local Government and BSC, attracting a further £138m through three fund managers. The evaluation, which covered funds including Social and Sustainable Housing, as well as funds managed by Resonance and Bridges Fund Management, found that the pilot was well targeted and was cost-neutral or cost-saving to the public purse compared with private rented or temporary accommodation, while delivering robust investor returns7. This is important evidence that the models the Company invests in can help Government meet its housing objectives while easing pressure on public budgets.
The broader economic backdrop was more challenging. The second half of the year was dominated by conflict in the Middle East following US–Israeli strikes on Iran on 28 February 20268. The resulting energy price shock pushed CPI inflation to 3.3% in the year to March 2026, before it eased to 2.6% by June9. Markets moved rapidly from expecting interest rate cuts to pricing in rises, and the 10-year gilt yield rose above 5%, close to its highest level since 200810. The Bank of England held Bank Rate at 3.75%, but borrowing costs for households and businesses rose materially11. Higher gilt yields, and the resulting increase in discount rates, weighed on the valuation of real assets, as did still-elevated construction costs. This was seen particularly in the Company’s High Impact Housing portfolio. Over time, the inflation linkage in much of the portfolio’s rental income, including social rents rising at CPI+1%, should allow higher inflation to feed through into future returns.
After the Company’s financial year end, Andy Burnham became Prime Minister on 20 July 202612. His first act was to announce a national drive to end rough sleeping, backed by an additional £340m as the first phase of a five-year programme. The programme builds on the experience of the “Everyone In” pilot described above13. The Prime Minister also signalled a wider shift toward a more prevention-led investment and more council housebuilding, with a 10-year plan to follow later this year14. These priorities remain strongly aligned with the Company’s investment themes. In particular, the new rough sleeping programme’s approach of buying homes and pairing them with wraparound support for tenants closely mirrors the models delivered by Social and Sustainable Housing (“SASH”) and the Real Lettings Property Fund in which the Company is invested, and could create further opportunities for these fund managers as the programme is rolled out. BSC continues to work closely with Government, sharing evidence from investments such as those in the Company’s portfolio, to help shape these policy initiatives.
1 GOV.UK, Office for the Impact Economy.
2 Social outcomes partnerships were previously referred to as social outcomes contracts (“SOCs”). The name has evolved alongside the development of the Better Futures Fund, with “partnerships” considered to better reflect the nature of the intervention.
3 GOV.UK, Better Futures Fund (April 2026) .
4 UK Parliament (January 2026); MHCLG (July 2025),
5 MHCLG (February 2026); MHCLG (August 2026)
6 MHCLG (December 2025).
7 Manchester Metropolitan University, (March 2026); (April 2026).
8 Council on Foreign Relations, Global Conflict Tracker (September 2026).
9 Bank of England, Monetary Policy Report (April 2026); ONS (June 2026).
10 Bank of England, Monetary Policy Summary (April 2026)
11 Bank of England, Monetary Policy Summary (June 2026).
12 House of Lords Library (August 2026)
13 MHCLG (July 2026); GOV.UK (July 2026).
14 GOV.UK (July 2026); House of Lords Library (August 2026).
Strategy Update and Outlook
As set out in the Chair’s Statement, BSC has been progressing towards the development of a new Private Fund Limited Partnership (“PFLP”) with a view to making a proposal to the Board to acquire the Company’s High Impact Investment Portfolio, subject to there being sufficient interest in the PFLP.
Over the period we have continued to manage the portfolio in accordance with the Company’s investment objective and policy; however, as agreed with the Board, we have not made any new commitments pending the outcome of the strategic review, and will not make any further new investments until otherwise instructed.
Throughout the period, we have continued to work closely with the fund managers and organisations managing the Company’s capital, engaging actively where investments have faced challenges. This proactive portfolio management is reflected in the improved performance of two investments following restructurings, which were among the main positive contributors to NAV in the year. In the Bridges Inclusive Growth Fund (“Bridges IGF”), a catch-up mechanism was agreed with the fund manager in October 2025 and approved by all fund investors, allowing early investors, including the Company, to be compensated over time for the negative adjustment incurred when the fund was restructured in 2024. Together with strong performance of its underlying portfolio, this made the Bridges IGF the largest contributor to the Company’s performance in the year. In the Charity Bond Portfolio, Thera Trust has made good progress against its transformation plan following the restructuring of its bond, enabling a significant scheduled repayment at par and the removal of the provision previously held against the bond. Where other investments continue to face challenges, we remain in close dialogue with the relevant fund managers, as set out in the asset class sections below.
As at the financial year end, total commitments to high impact investments amounted to 94% of NAV, and 83% of NAV was invested in high impact investments (with the remainder held in Liquidity Assets, including money market funds earning interest broadly in line with Bank Rate, comprising 18% of NAV, with net other liabilities representing 1% of NAV).
The Company’s portfolio continues to deliver positive impact outcomes where they are needed most. Our latest Impact Report shows that since launch in 2020, the organisations funded by our investments have reached c.434,000 people, 98% from underserved and disadvantaged backgrounds; generated an estimated £375m in public and household savings and benefits; and provided 35,500 people with affordable and decent homes.
We continue to see strong need for the services our portfolio organisations provide, and good policy momentum behind social investment in housing, homelessness, community energy and outcomes-based commissioning. We remain focused on delivering high-quality portfolio investment returns and impact for our shareholders.
Performance update
The NAV total return per share for the year ended 30 June 2026 was 4.96% (2025: 1.63%).
Overall, the Company’s total NAV reduced from £83.49m to £81.51m over the period due to distributions to shareholders via the dividend payment (£2.99m) and share buy-backs (£2.00m: reducing the number of shares in issue from 81.10m to 78.17m), offset by the net return from investments of £3.02m during the year under review.
The Company’s NAV per share increased from 102.94p to 104.27p – including a 3.76p dividend payment – with a full performance bridge in the chart below.
In the 12 months to 30 June 2026 the Company recorded gross revenue of £3.01m (2025: £4.36m) and net revenue after fees, costs and expenses of £2.13m (2025: £3.40m), providing a net revenue return per share of 2.69p (2025: 4.15p). The Company recorded gains on the fair value of investments of £1.18m and capitalised expenses of £0.30m, resulting in a total gross return of £4.19m, and total net return of £3.02m, or 3.80p per share.
The Company will pay a dividend of 2.6p per share (2025: 3.76p) on 18 December 2026, which represents a dividend yield of 2.5% based on the NAV as at 30 June 2026. This is within our guided dividend range of 2–3% yield on NAV per annum. Over the year, the share price total return was –2.9% and the discount to NAV was 31.4%.
The key drivers of financial performance in the 12 month period to 30 June 2026 were:
• Strong income generation across the portfolio, with top contributors being the Man Group Community Housing Fund, Charity Bond Portfolio and Bridges Social Outcomes Fund II.
• Valuation gains in the Bridges IGF, driven by strong trading at Alina Homecare and New Reflexions, and a positive reallocation of value to the Company relating to Bridges IGF’s 2024 restructuring.
• Valuation losses in the Man Group Community Housing Fund, partly reflecting increased construction budgets at two sites previously affected by developer insolvencies.
• By investment, the top positive contributors to performance were the Bridges IGF (1.77p per share) and the Charity Bond Portfolio (1.02p/share), and the largest detractor to performance was the Man Group Community Housing Fund (–0.40p/share).
Impact
The Company has applied the SDR “Sustainability Impact” label since December 2024. Please see the consumer facing and pre‑contractual disclosures on the Company’s website at http://www.schroders.com/sbsi. For more information on sustainability labels, please visit the FCA website at https://www.fca.org.uk/firms/climate-change-and-sustainable-finance/sustainability-disclosure-requirements-sdr-regime.
The social impact performance of the portfolio was reported in the Company’s fifth Impact Report published in June 2026. The report highlighted that since launch, the organisations funded by the Company’s investments have reached c.434,000 people, 98% of whom are from disadvantaged or underserved backgrounds; generated an estimated £375m of public and household savings and benefits; and provided 35,500 people with affordable and decent homes. The report is available at https://schro.link/afmnw2
Portfolio exits
During the period, the Company received a number of repayments. The Triodos Bank UK bond matured and was repaid in full, amounting to £2.5m, with an annualised return of 4.0%. In the Charity Bond Portfolio, the Broadband for the Rural North (B4RN) bond was repaid in full in April 2026, amounting to £0.86m, with an annualised return of 4.5%. In the Charity Bank Co-investment Portfolio, the Uxbridge United Welfare Trust loan was repaid in full in May 2026, amounting to £1.45m, with an annualised return of 5.6%.
After the year end, the Bridges IGF completed the exit of the Ethical Housing Company at its 30 June 2026 carrying value and a 1.3x gross MOIC15.
15 Alternative Performance Measure. See Other Information on pages 91 – 93.
Portfolio cash flows and balance sheet
During the period, net capital distributions for High Impact Investments were £3.81m, comprising new deployment of capital of £2.61m, and capital repayments of £6.42m (£0.37m of which are recallable distributions):
• In Debt and Equity for Social Enterprises:
– The Company received total capital distributions of £5.64m, comprising the portfolio exits referenced above and additional scheduled repayments from Thera Trust and Community Energy Together, as well as a small recallable distribution from the Community Investment Fund;
– £1.60m was drawn by the Bridges IGF, primarily to fund its new investment in Alina Homecare.
• In High Impact Housing:
– £0.38m was drawn by Man Group Community Housing Fund, deployed towards delivering more affordable and social housing in the UK, and £0.30m of capital was returned as a recallable distribution.
• In Social Outcomes Contracts:
– £0.46m of capital was returned following successful project completion, and £0.57m of capital was drawn for further investment into new and existing projects for the delivery of public services in areas such as homelessness, youth justice, and healthcare.
Portfolio Allocation
The Company’s investment objective is defined as:
• Delivering measurable positive social impact as well as long term capital growth and income, through investing in a diversified portfolio of private market impact funds, separate accounts managed by third party asset managers, co-investments alongside such funds of other impact investors and direct investments in order to gain exposure to Social Impact Investments.
• Aiming to provide NAV total return of CPI plus 2% per annum (once the portfolio is fully invested and averaged over a rolling three- to five-year period, net of fees).
• Low correlation to traditional quoted markets while making a significant contribution to addressing social issues in the UK.
A diversified asset allocation delivering local UK social impact
The Company delivers its investment objective through allocating to best-in-class social impact managers in private markets – with proven track records delivering high quality financial returns alongside measurable social impact for more disadvantaged groups in the UK. Investments that are committed but not yet drawn by private market funds are held in listed Liquidity Assets investments to mitigate cash drag during longer drawdown periods.
As at 30 June 2026, total commitments (drawn and undrawn) to High Impact Investments amounted to 94.4% of NAV, while the drawn portion of the commitments was at 82.6% of NAV (invested as % of NAV). Capital held to fund undrawn commitments in our High Impact Investments is currently held in Liquidity Assets (including money market funds earning interest broadly in line with Bank Rate) (18.0% of NAV). Undrawn commitments currently comprise 11.8% of NAV.
Invested as a % of NAV*
High Impact Exposure as a % of NAV*
*see asset class description on page 17.
Exposure: NAV of High Impact Investments + undrawn commitments. Totals may not sum due to rounding.
Data as at 30 June 2026.
Source: BSC.
Providing access to a seasoned high impact portfolio
The Company has built a seasoned high impact portfolio that would be difficult for shareholders to access directly – through a combination of a seed portfolio and secondary investments from the Portfolio Manager, as well as its relationships and knowledge of the sector. The Portfolio Manager’s broader portfolio relationships offer additional fee benefits to Company shareholders – with 46% of the Company’s portfolio with no or discounted management fees on the underlying funds – from co-investments or fee discounts that the Portfolio Manager has negotiated, often through their role as initial cornerstone investor in funds.
High Impact Exposure as a % of NAV 30 June 2026
Vintage**
Vintage is defined as year of fund establishment:
Access (ease of access for other investors)**
Fees**
**Exposure: NAV of High Impact Investments + undrawn commitments. Totals may not sum due to rounding.
Targeting inflation resilient returns
The Company aims to deliver an asset allocation that is resilient through periods of rising prices through targeting two-thirds of its asset allocation to assets that will benefit from inflation. These assets are:
• Property and renewables – with a mix of long dated inflation linked leases, shorter property leases where value is more driven by property prices, and smaller investments in community renewables in our Debt and Equity for Social Enterprises asset class; we also hold renewables investments in our Liquidity Assets portfolio.
• Equity investments – where the value is correlated with inflation, including through revenues from government contracts that have historically moved with inflation.
• Floating rate instruments (including money market funds) which benefit from increases in the Bank Rate.
Inflation resilience***
***segments in blue represent assets benefiting from inflation; grey segment represents assets where the returns don't change with inflation.
In the year to 30 June 2026, the Company outperformed its CPI+2% target return by 0.36%, with NAV total return per share of 4.96%, while the CPI increase for the same period was 2.60%16, reflecting the maturity of the portfolio and the lagged impact of higher inflation and rates from prior years feeding through to portfolio performance (for example, in rental yields of high impact housing investments). The ARC Cautious Index, an alternative reference point for several of our shareholders, returned 4.68% over the same period.
Targeting low correlation to mainstream markets
The Company’s asset allocation aims to achieve low correlation to mainstream markets by backing business models that are underpinned by government expenditure and have been historically resilient through economic cycles. These revenue streams are themselves diversified across policy areas, such as housing, clean energy and fuel poverty, education, and redressing inequalities/levelling up. This diversification reduces exposure to individual policy risk, such as the risk that government or budgetary changes would significantly reduce or withdraw payments. The Company targets areas with a track record of delivering impact for more disadvantaged groups and generating savings for the public purse which provides additional revenue resilience. The Company’s portfolio performance has shown resilience, delivering a NAV total return per share since inception of 17.54% (2.97% annualised), outperforming the ARC Cautious Index, which delivered a total return of 11.9% (2.09% annualised) over the same period.
In the 12 months to 30 June 2026, the Company’s share price had a negative correlation with the FTSE All Share Index of (–0.71) and since Company IPO, the share price had a negative correlation of (–0.93) with the market index. Recently and in the period, it has been noted that while the underlying portfolio of assets may be uncorrelated with mainstream markets, due to the listed nature of the Company, it remains exposed to other market sentiment challenges, in particular to the negative perception of alternatives investment trusts. This has driven continued pressure on the share price.
16 ONS, Consumer price inflation, UK: June 2026.
Hermina Popa, Jeremy Rogers
Better Society Capital
28 October 2026
Principal Risks and Uncertainties
The Board, through its delegation to the Audit and Risk Committee, is responsible for the Company’s framework of risk management and internal control and for reviewing its effectiveness. The Audit and Risk Committee has adopted a detailed matrix of principal risks affecting the Company’s business as an investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which are monitored by the Audit and Risk Committee on an ongoing basis.
This framework assists the Audit and Risk Committee in determining the nature and extent of the risks it is willing to take in achieving the Company’s strategic objectives. Both principal and emerging risks and the monitoring system are subject to regular review.
During the year, the Audit and Risk Committee discussed and monitored a number of risks which could potentially impact the Company’s ability to meet its strategic objectives. Directors monitored and discussed with the AIFM, the Portfolio Manager and the Company Secretary emerging risks that could affect the Company. No emerging risks were identified.
Although the Board believes that it has a robust framework of internal control in place this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk. Actions taken by the Board and, where appropriate, its committees, to manage and mitigate the Company’s principal risks and uncertainties are set out in the table below. Both the principal and emerging risks and uncertainties and the monitoring framework are subject to robust assessment bi-annually or more frequently as required. The most recent assessment took place in October 2026. The Audit and Risk Committee concluded that the Company’s risk management and internal control systems remain effective with no significant control failings or weaknesses identified. Further details of how the Audit and Risk Committee has reviewed the Company’s risk management and internal control framework can be found on the next page and in the Audit and Risk Committee Report on pages 50 to 53.
The principal risks and uncertainties are set out below. For each risk, the Audit and Risk Committee has assessed the current level of risk, categorised as High, Medium or Low, after taking account of the controls and mitigating actions in place. The accompanying commentary explains whether the level of each risk has increased, decreased or remained unchanged compared with the prior financial year.
During the year, the scope of the Company's cybersecurity risk assessment was expanded to include broader information technology (“IT”) risks. Accordingly, the former “Cybersecurity risks” category has been renamed “Cybersecurity and IT risks”.
|
Principal risk |
Mitigation and management |
|
|
Strategic risk |
| |
|
Investment objective is out of line with the requirements of investors or demand for the shares is not as great as the supply leading to a persistently large discount to NAV. |
Strategic risk remains high and was unchanged in the year. The appropriateness of the Company’s investment remit is regularly reviewed and the success of the Company in meeting its stated objective and the investment strategy is monitored. Market feedback and share price information is monitored and the Board has in place a buyback programme to manage the discount and provide liquidity. The long term strategic aim of the Company since launch is to grow its shareholder base and improve liquidity. However, whilst the shares trade at a discount to NAV, new shares cannot be issued. The Board encourages shareholder contact and meetings are offered after the issue of results. In addition, the AIFM, Portfolio Manager and Board continue to maintain an open and constructive dialogue with shareholders. The Board intends to recommend proposals on the Company's future to shareholders as outlined in the Chair’s Statement.
| |
|
Continuity risk |
| |
|
If in the two-year period ending on 31 December 2023, and in any two-year period following such date, if the Company’s ordinary shares have traded, on average, at a discount in excess of 10% to NAV per share, the directors will propose an ordinary resolution at the Company’s next annual general meeting that the Company continues its business as presently constituted and is referred to as the “Continuation Resolution”. Where shareholders are not supportive of the continuation of the Company, the Company may cease to exist. The continuation vote for the two-year period to 31 December 2025 was triggered. |
Continuity risk remains high and was unchanged in the year. The average discount over the two-year period to 31 December 2025 was 23.8%, and accordingly the Board is proposing a Continuation Resolution at the upcoming annual general meeting on 17 December 2026. If the Continuation Resolution is not passed, the directors will put forward proposals for the reconstruction or reorganisation of the Company, bearing in mind the liquidity of the Company’s investments, as soon as reasonably practicable following the date on which the Continuation Resolution is not passed. Such proposals would be subject to shareholder approval. | |
|
Investment management risks |
| |
|
Poor investment performance against objective. |
Investment performance risk remains high and was unchanged in the year. The Board monitors investment performance, investment risk and portfolio activity at each quarterly meeting. The AIFM and Portfolio Manager are subject to an annual review of their suitability as conducted by the Management Engagement Committee, alongside an annual presentation by the AIFM’s Risk and Internal Audit functions. The Portfolio Manager has extensive experience in selecting private Social Impact Investments and has a robust investment process. The Portfolio Manager makes investments according to a tested and rigorous process and based on the goal of achieving the target return. A pipeline of opportunities is vetted and reviewed, and significant care is taken in selecting high-quality investments. The Portfolio Manager receives regular management information and engages regularly with investees to monitor and ensure performance to plan. Due to the strategic review, the Board has instructed the Portfolio Manager not to make any new commitments or investments. Further details are set out in the Chair’s Statement. If performance is unsatisfactory over a prolonged period the Board may seek to replace the AIFM and/or the Portfolio Manager. | |
|
|
| |
|
Poor social impact performance against objective. |
Social impact performance risk has increased during the year but remains low. The Board reviews impact and publishes an annual impact report. The AIFM and Portfolio Manager are subject to an annual review of their suitability as conducted by the Management Engagement Committee. The Portfolio Manager has extensive experience in selecting private social impact investments and has a robust investment process which ensures that the anticipated positive impact of investee companies is realistic and achievable. The Portfolio Manager undertakes robust investment analysis on the context of proposals, impact outcomes, financial drivers, and associated risks. The Portfolio Manager receives regular management information and engages regularly with investees to monitor and ensure performance to plan. Due to the strategic review, the Board has instructed the Portfolio Manager not to make any new commitments or investments. As a result the Board has assessed the social impact performance risk to have increased. If performance is unsatisfactory over a prolonged period the Board may seek to replace the AIFM and/or the Portfolio Manager. The Company has adopted the “Sustainability Impact” label which provides investors assurance on the rigour of the Company’s impact measurement, management and reporting approach, and its commitment to operate in line with best industry standards. | |
|
Liquidity risk |
| |
|
Liquidity risks include those arising from existing investment commitments and capital calls and an inability to meet such calls due to lack of liquidity. They also include the risk of not being able to participate in new investments due to lack of available capital and the risks resulting from holding private equity investments which may not be readily realisable. |
Liquidity risk remains low and was unchanged in the year. The Portfolio Manager is experienced in managing social impact investments and seeks to accurately time the realisation of Company’s investments. Concentration limits imposed on single investments to minimise the size of positions. The Portfolio Manager can sell Liquidity Assets to meet investment commitments and capital calls. The Portfolio Manager will monitor and manage cashflows and expected capital calls. The Portfolio Manager will seek to manage cashflow such that the Company will be able to participate in follow-on fund-raises where appropriate. | |
|
Valuation risk |
| |
|
Private market investments are more difficult to value than publicly traded securities. A lack of open market data and reliance on investee company projections may also make it more difficult to estimate fair value on a timely basis. |
Valuation risk remains medium and was unchanged during the year. Contracts with investee companies and funds are drafted to include obligations to provide information to the Portfolio Manager in a timely manner, where possible. The Portfolio Manager and AIFM have extensive track records of valuing privately held investments. A valuation policy has been agreed by the AIFM and Portfolio Manager and includes a robust process for the valuation of assets, including consideration of the valuations provided by investee companies and the methodologies they have used. Any changes to this policy must be approved by the Audit and Risk Committee. The Audit and Risk Committee reviews all valuations of unlisted investments and challenges the methodologies used by the Portfolio Manager and AIFM. The Audit and Risk Committee may also appoint an independent party to complete a valuation of the Company’s assets. Valuation of investments is a focus for the Company’s external auditor. | |
|
Cybersecurity and IT risks |
| |
|
Each of the Company’s service providers is at risk of cyber attack, data theft or disruption to their infrastructure which could have an effect on the services they provide to the Company. While the risk of financial loss by the Company is probably small, the risk of reputational damage and the risk of loss of control of sensitive information is more significant, for instance a GDPR breach. Many of the Company’s service providers and the Board often have sensitive information regarding transactions or pricing and information regarded as inside information in regulatory terms. |
Cybersecurity and IT risks remain medium and were unchanged during the year. The Board receives attestations/internal control reports from key service providers which provide assurance on the protective measures they take, as well as their business recovery plans. In addition to receiving an annual presentation from the AIFM on cyber risks and the controls in place to mitigate them, the Board benefits from the AIFM’s cybersecurity risk framework. | |
|
Economic and market risk |
| |
|
Changes in general economic and market conditions, such as interest rates, inflation rates, industry conditions, tax laws, political events and trends can substantially and adversely affect the value of investments. Market risk includes the potential impact of events which are outside the Company’s control, such as pandemics, civil unrest and wars. These could have an adverse impact on the value of the Company’s underlying investments or a reduction in the profits available for dividends. |
Economic and market risk remains medium and was unchanged during the year. The risk profile of the portfolio is considered and appropriate strategies to mitigate any negative impact of substantial macroeconomic changes are discussed with the Portfolio Manager. The Board receives information to enable an evaluation of the nature and extent of interest rate risk and other price risk and the Portfolio Manager, in conjunction with the Manager, assesses exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis. The Company has no exposure to foreign exchange risk. The Company does not have any gearing. | |
|
Policy risk |
| |
|
Policy risk includes the potential negative impact of changes in UK Government policies that affect the business models, revenue streams, or have other material implications for investees. |
Policy risk remains medium and was unchanged during the year. Policy risk is mitigated by working with organisations that have been successfully operating for several decades, navigating different policy environments, and making investments that benefit from some element of asset backing and engagement with all major political parties on social impact investments through the Portfolio Manager. The Portfolio Manager has dedicated resources to frequently engage at senior levels with the Government on matters relating to social impact policy and investment in the UK. | |
Review of the Company’s risk management and internal control framework
The AIC code of Corporate Governance (“AIC Code”) requires the Board to have in place procedures to identify and manage emerging risks faced by the Company. The Board exercises oversight by monitoring the social impact investing market, changes in the regulatory environment, competitor threats arising from alternative investment products and trends within the investment trust sector more generally. The Board also considers the implications of developments affecting shareholder demand for the Company’s shares and the broader market for listed alternative assets. No new emerging risks have been identified in the year being reported.
The Audit and Risk Committee follows the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting when reviewing the effectiveness of the Company’s risk management and internal control framework.
The Audit and Risk Committee has reviewed the Company’s principal risks and uncertainties and emerging risks and whether these fell within the Company’s risk appetite through its bi-annual review of the risk matrix. During the year, particular consideration was given to risks associated with the Company’s strategic review, market conditions affecting listed alternative investment companies, liquidity management and shareholder demand for the Company’s shares. These matters were incorporated into the Audit and Risk Committee’s assessment of the risk environment and mitigating controls.
As the Company has no employees and acts through service providers, its culture is represented by the values and behaviour of the Board and the third parties to whom it delegates. The Board has determined that its culture is driven by the values of Transparency, Engagement and Rigour and the Management Engagement Committee reviews policies of services providers to ensure alignment with this culture.
The Audit and Risk Committee considered changes to the nature, likelihood and potential impact of risks, together with the adequacy of the controls and mitigations in place. The internal control environments of key service providers were reviewed through independently assured internal controls reports, attestations and other assurance received during the year, where appropriate. It was concluded that there has been no significant control failings or weaknesses identified for the year ended 30 June 2026 and up to the date of this report.
Further details of how the Committee has reviewed the Company’s risk management and internal controls framework can be found in the Audit and Risk Committee Report on pages 50 to 53. As noted in the Audit and Risk Committee Report, the Audit and Risk Committee has, throughout the year under review, been undertaking work to ensure readiness for Provision 34 of the AIC Code, which will apply to the Company’s Annual Report and Financial Statements for the year ending 30 June 2027.
A full analysis of the financial risks facing the Company is set out in note 20 to the financial statements on pages 81 to 83.
Statement of Directors’ Responsibilities in respect of the Annual Report and Financial Statements
The directors are responsible for preparing the annual report and financial statements in accordance with UK accounting standards and applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (FRS: 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland) and applicable law. Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.
In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
• prepare a directors’ report, a strategic report and directors’ remuneration report which comply with the requirements of the Companies Act 2006.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for ensuring that the annual report and financial statements, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy.
Website publication
The directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Directors’ responsibilities pursuant to DTR4
The directors confirm to the best of their knowledge:
• The financial statements have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company.
• The annual report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that they face.
On behalf of the Board
Susannah Nicklin
Chair
28 October 2026
Income Statement
for the year ended 30 June 2026
|
|
|
|
2026 |
|
|
2025 |
|
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Note |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Gains/(losses) on investments held at fair value through profit or loss |
2 |
– |
1,004 |
1,004 |
– |
(2,408) |
(2,408) |
|
Reversal of impairment provision on investments held at amortised cost |
|
– |
177 |
177 |
– |
235 |
235 |
|
Income from investments |
3 |
2,641 |
– |
2,641 |
4,053 |
– |
4,053 |
|
Other interest receivable and similar income |
3 |
365 |
– |
365 |
307 |
– |
307 |
|
Gross return/(loss) |
|
3,006 |
1,181 |
4,187 |
4,360 |
(2,173) |
2,187 |
|
Investment management fees |
4 |
(295) |
(295) |
(590) |
(309) |
(309) |
(618) |
|
Administrative expenses |
5 |
(581) |
– |
(581) |
(647) |
– |
(647) |
|
Net return/(loss) before taxation |
|
2,130 |
886 |
3,016 |
3,404 |
(2,482) |
922 |
|
Taxation |
6 |
– |
– |
– |
– |
– |
– |
|
Net return/(loss) after taxation |
|
2,130 |
886 |
3,016 |
3,404 |
(2,482) |
922 |
|
Return/(loss) per share (pence) |
7 |
2.69 |
1.11 |
3.80 |
4.15 |
(3.02) |
1.13 |
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 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 for the year.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year (2025: none).
The notes on pages 71 to 84 form an integral part of these accounts.
Statement of Changes in Equity
for the year ended 30 June 2026
|
|
|
Called-up |
|
|
|
|
|
|
|
|
share |
Share |
Special |
Capital |
Revenue |
|
|
|
|
capital |
premium |
reserve |
reserves |
reserve |
Total |
|
|
Note |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
At 30 June 2024 |
|
853 |
10,571 |
70,910 |
1,418 |
2,707 |
86,459 |
|
Repurchase of the Company’s own shares into treasury |
|
– |
– |
(1,471) |
– |
– |
(1,471) |
|
Net (loss)/return after taxation |
|
– |
– |
– |
(2,482) |
3,404 |
922 |
|
Dividends paid in the year |
8 |
– |
– |
– |
– |
(2,423) |
(2,423) |
|
At 30 June 2025 |
14 |
853 |
10,571 |
69,439 |
(1,064) |
3,688 |
83,487 |
|
Repurchase of the Company’s own shares into treasury |
|
– |
– |
(2,001) |
– |
– |
(2,001) |
|
Net return after taxation |
|
– |
– |
- |
886 |
2,130 |
3,016 |
|
Dividend paid in the year |
8 |
– |
– |
– |
– |
(2,987) |
(2,987) |
|
At 30 June 2026 |
14 |
853 |
10,571 |
67,438 |
(178) |
2,831 |
81,515 |
The notes on pages 71 to 84 form an integral part of these accounts.
Balance Sheet
at 30 June 2026
|
|
|
2026 |
2025 |
|
|
Note |
£’000 |
£’000 |
|
Fixed assets |
|
|
|
|
Investments held at fair value through profit or loss |
9 |
54,546 |
51,781 |
|
Investments held at amortised cost |
9 |
16,254 |
21,700 |
|
|
|
70,800 |
73,481 |
|
Current assets |
|
|
|
|
Debtors |
10 |
359 |
423 |
|
Current asset investments |
11 |
9,848 |
9,009 |
|
Cash at bank and in hand |
|
1,012 |
1,057 |
|
|
|
11,219 |
10,489 |
|
Current liabilities |
|
|
|
|
Creditors: amounts falling due within one year |
12 |
(504) |
(483) |
|
Net current assets |
|
10,715 |
10,006 |
|
Total assets less current liabilities |
|
81,515 |
83,487 |
|
Net assets |
|
81,515 |
83,487 |
|
Capital and reserves |
|
|
|
|
Called-up share capital |
13 |
853 |
853 |
|
Share premium |
14 |
10,571 |
10,571 |
|
Special reserve |
14 |
67,438 |
69,439 |
|
Capital reserves |
14 |
(178) |
(1,064) |
|
Revenue reserve |
14 |
2,831 |
3,688 |
|
Total equity shareholders’ funds |
|
81,515 |
83,487 |
|
Net asset value per share (pence) |
15 |
104.27 |
102.94 |
These accounts were approved and authorised for issue by the Board of directors on 28 October 2026 and signed on its behalf by:
Susannah Nicklin
Chair
The notes on pages 71 to 84 form an integral part of these accounts.
Registered in England and Wales as a public company limited by shares.
Company registration number: 12902443
Cash Flow Statement
for the year ended 30 June 2026
|
|
|
2026 |
2025 |
|
|
Note |
£’000 |
£’000 |
|
Net return before taxation |
|
3,016 |
922 |
|
Capital (return)/loss before taxation |
|
(886) |
2,482 |
|
Less: accumulation dividends and capitalised fixed interest |
|
(48) |
(259) |
|
Decrease in accrued income |
|
71 |
136 |
|
(Increase)/decrease in other debtors |
|
(7) |
3 |
|
Increase/(decrease) in other creditors |
|
51 |
(97) |
|
Management fee and transaction costs allocated to capital |
|
(295) |
(309) |
|
Net cash inflow from operating activities |
|
1,902 |
2,878 |
|
Investing activities |
|
|
|
|
Purchases of investments |
|
(2,507) |
(5,994) |
|
Sales of investments |
|
6,417 |
13,452 |
|
Net cash inflow from investing activities |
|
3,910 |
7,458 |
|
Net cash inflow before financing activities |
|
5,812 |
10,336 |
|
Financing activities |
|
|
|
|
Dividends paid |
|
(2,987) |
(2,423) |
|
Repurchase of the Company's own shares into treasury |
|
(2,031) |
(1,467) |
|
Net cash outflow from financing activities |
|
(5,018) |
(3,890) |
|
Net cash inflow in the year |
|
794 |
6,446 |
|
Cash and cash equivalents at the beginning of the year |
|
10,066 |
3,620 |
|
Net cash inflow in the year |
|
794 |
6,446 |
|
Cash and cash equivalents at the end of the year |
|
10,860 |
10,066 |
|
Cash and cash equivalents comprise: |
|
|
|
|
Money market funds |
11 |
9,848 |
9,009 |
|
Cash at bank and in hand |
|
1,012 |
1,057 |
|
Cash and cash equivalents at the end of the year |
|
10,860 |
10,066 |
Included in net cash inflow from operating activities are dividends received amounting to £628,000 (year ended 30 June 2025: £1,230,000), income from debt securities amounting to £2,053,000 (year ended 30 June 2025: £2,505,000) and other interest receivable and similar income amounting to £396,000 (year ended 30 June 2025: £320,000).
The notes on pages 71 to 84 form an integral part of these accounts.
Notes to the Financial Statements
1. Accounting policies
(a) Basis of accounting
Schroder BSC Social Impact Trust plc (“the Company”) is registered in England and Wales as a public company limited by shares. The Company’s registered office is 1 London Wall Place, London EC2Y 5AU.
The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (“UK GAAP”), in particular in accordance with Financial Reporting Standard (FRS) 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and with the Statement of Recommended Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts” (the “SORP”) issued by the Association of Investment Companies in July 2022. All of the Company’s operations are of a continuing nature.
The directors have assessed the principal risks, the impact of the emerging risks and uncertainties and the matters referred to in the viability statement insofar as they apply within the going concern assessment period, being the period to 31 December 2027, which is at least 12 months from the date of approval of the financial statements. The directors have taken into consideration the controls and monitoring processes in place, the Company’s level of working capital, undrawn commitments and other payables, the level of operating expenses (a significant proportion of which are variable costs and would reduce in the event of a market downturn), the Company’s cash flow forecasts and the liquidity of the Company’s investments. The directors have assessed the timing and quantum of cashflows from an orderly realisation of assets in the event that liquidity is required to be increased during the going concern assessment period. These factors do not affect the Board’s conclusions in respect of going concern as they believe that the Company has sufficient assets to continue in operational existence and satisfy liabilities as they fall due.
The Board is currently undertaking a strategic review of the Company’s future. As part of this process, Better Society Capital (“BSC”) is progressing the development of a new Private Fund Limited Partnership (the “PFLP”) with a view to making a proposal to acquire the Company’s High Impact Investment Portfolio (the “Portfolio”), subject to there being sufficient interest in the PFLP and acceptable terms for the acquisition of the Portfolio being agreed. If the PFLP proposal is not brought forward by the end of Q1 2027, or the terms cannot be agreed for the acquisition of the Portfolio, the Board intends to bring forward alternative proposals, which may include the managed winddown of the Company. These proposals are subject to shareholder approvals.
In addition, the Board is proposing a Continuation Resolution at the Company’s forthcoming AGM. If this resolution is not passed, the Directors will put forward proposals for the reconstruction or reorganisation of the Company, bearing in mind the liquidity of the Company’s investments, as soon as reasonably practicable following the date on which the Continuation Resolution is not passed. Such proposals would be subject to shareholder approval.
The directors consider the matters above indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. If shareholders vote for the Company not to continue operating in its normal course of business, then the Company may be unable to realise its assets and discharge its liabilities in the normal course of business.
The directors believe the use of the going concern basis is appropriate, as they believe that the Company has sufficient assets to continue in existence and satisfy liabilities as they fall due although the Board recognises that this conclusion is subject to the outcomes of the relevant shareholder votes.
The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.
The accounts are presented in sterling and amounts have been rounded to the nearest thousand.
The accounting policies applied to these accounts are consistent with those applied in the accounts for the year ended 30 June 2025.
Certain judgements, estimates and assumptions have been required in valuing the Company’s investments and these are detailed in note 19 on pages 79 and 80.
(b) Valuation of investments
The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. Investments with a fixed coupon and redemption amount are valued at amortised cost less any impairments in accordance with FRS 102. Other financial assets are managed and their performance evaluated on a fair value basis, in accordance with a documented investment objective and information is provided internally on that basis to the Company’s Board of Directors. Upon initial recognition, these investments are measured at fair value through profit or loss, being recognised initially at cost and subsequently remeasured to fair value using the methodology below. This valuation process is consistent with International Private Equity and Venture Capital Guidelines issued in December 2025, which are intended to set out current best practice on the valuation of Private Capital investments.
(i) Quoted bid prices for investments traded in active markets.
(ii) The price of a recent investment, where there is considered to have been no material change in fair value.
(iii) Where it is felt that a milestone has been reached or a target achieved, the Company may use the price of a recent investment adjusted to reflect that change.
(iv) Investments in funds may be valued using the NAV per unit with an appropriate discount or premium applied to arrive at a unit price.
(v) Price earnings multiples, based on comparable businesses.
(vi) Industry benchmarks, where available.
(vii) Discounted Cash Flow techniques, where reliable estimates of cash flows are available.
The valuation methodologies described above incorporate factors that may reflect the impact of climate-related risks where such risks are considered by market participants in determining fair value.
Purchases and sales of quoted investments are accounted for on a trade date basis. Purchases and sales of unquoted investments are recognised when the related contract becomes unconditional.
Investments in limited partnership interests are valued by reference to the latest available underlying manager valuation, adjusted where considered necessary to reflect subsequent events, market conditions or other information relevant to fair value at the reporting date.
Investments valued using third-party manager valuations are classified within the fair value hierarchy based on the nature of the inputs used in determining fair value. Further information on the valuation techniques applied and related valuation disclosures is provided in note 19 on pages 79 and 80.
(c) Accounting for reserves
Gains and losses on sales of investments and the management fee or finance costs allocated to capital, are included in the Income Statement and dealt with in capital reserves. Increases and decreases in the valuation of investments held at the year end and impairment provision on investments, are included in the Income Statement and in capital reserves within “Investment holding gains and losses”.
For shares that are repurchased and held in treasury, the full cost is charged to the special reserve.
For a breakdown of reserves please refer to note 14 on page 78.
(d) Income
Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature, in which case it is included in capital.
Income from limited partnerships will be included in revenue on the income declaration date.
Income from fixed interest debt securities is recognised using the effective interest method.
Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of interest.
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated wholly to the revenue column of the Income Statement with the following exceptions:
• The management fee is allocated 50% to revenue and 50% to capital in line with the Board’s expected long-term split of revenue and capital return from the Company’s investment portfolio.
• Expenses incidental to the purchase of an investment are charged to capital. These expenses are commonly referred to as transaction costs and comprise brokerage commission and stamp duty. Details of transaction costs are given in note 9(c) on page 76.
• The underlying costs incurred by the Company’s investments in collective funds are not included in the various expense disclosures.
(f) Financial instruments
Cash at bank and in hand comprises cash held in the bank. Current asset investments comprise investments in money market funds and highly liquid investments which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.
Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value, with debtors reduced by appropriate allowances for estimated irrecoverable amounts.
Bank loans and overdrafts are initially measured at fair value and subsequently measured at amortised cost. They are recorded at the proceeds received net of direct issue costs. The Company had no bank loans or overdrafts at 30 June 2026 (2025: nil). The Company previously had an arranged overdraft facility to a limit of £5m with HSBC Bank plc. This expired on 30 November 2024. Accordingly, the Company does not have in place any arranged overdraft facilities.
(g) Taxation
Taxation on ordinary activities comprises amounts expected to be received or paid.
Tax relief is allocated to expenses charged to the capital column of the Income Statement on the “marginal basis”. On this basis, if taxable income is capable of being entirely offset by revenue expenses, then no tax relief is transferred to the capital column.
Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date.
Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which those timing differences can be utilised.
Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.
As the Company continues to meet the conditions required to retain its status as an Investment Trust, any capital gains or losses arising on the revaluation or disposal of investments are exempt.
(h) Value added tax (VAT)
Expenses are disclosed inclusive of the related irrecoverable VAT.
(i) Dividends payable
In accordance with FRS 102, dividends payable are included in the accounts in the year in which they are paid. Part, or all of any dividend declared may be designated as an “interest distribution”, calculated in accordance with the investment trust income streaming rules and paid without deduction of any income tax.
2. Gains/(losses) on investments held at fair value through profit or loss
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Gains on sales of investments based on historic cost |
– |
69 |
|
Amounts recognised in investment holding gains and losses in the previous year in respect of investments sold in the year |
– |
(126) |
|
Losses on sales of investments based on the carrying value at the previous balance sheet date |
– |
(57) |
|
Net movement in investment holding gains/(losses) |
1,004 |
(2,351) |
|
Gains/(losses) on investments held at fair value through profit or loss |
1,004 |
(2,408) |
3. Income
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Income from investments |
|
|
|
UK dividends |
386 |
1,042 |
|
Overseas dividends |
177 |
173 |
|
Interest income from debt securities and other financial assets |
2,078 |
2,838 |
|
|
2,641 |
4,053 |
|
Other interest receivable and similar income |
|
|
|
Deposit interest |
346 |
290 |
|
Other income |
19 |
17 |
|
|
365 |
307 |
|
Total income |
3,006 |
4,360 |
4. Investment management fees
|
|
|
2026 |
|
|
2025 |
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Investment management fees |
295 |
295 |
590 |
309 |
309 |
618 |
The basis for calculating the investment management fees is set out in the Report of the Directors on page 47 and details of all amounts payable to the managers are given in note 17 on page 79.
5. Administrative expenses
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Other administrative expenses1 |
375 |
433 |
|
Directors’ fees2 |
135 |
145 |
|
Auditor’s remuneration for the audit of the Company’s annual accounts3 |
71 |
69 |
|
|
581 |
647 |
1 Other administrative expenses include £120,000 of costs incurred in connection with the Company’s strategic review (2025: nil).
2 Full details are given in the Directors’ Remuneration Report on pages 57 and 58.
3 Includes VAT amounting to £12,000 (2025:£12,000).
6. Taxation
(a) Analysis of tax charge for the year
|
|
|
2026 |
|
|
2025 |
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Taxation for the year |
– |
– |
– |
– |
– |
– |
The Company has no corporation tax liability for the year ended 30 June 2026 (2025: nil).
(b) Factors affecting tax charge for the year
The factors affecting the current tax charge for the year are as follows:
|
|
|
2026 |
|
|
2025 |
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Net return/(loss) before taxation |
2,130 |
886 |
3,016 |
3,404 |
(2,482) |
922 |
|
Net return/(loss) before taxation multiplied by the Company’s applicable |
|
|
|
|
|
|
|
rate of corporation tax for the year of 25% (2025: 25.0%) |
533 |
222 |
755 |
851 |
(621) |
230 |
|
Effects of: |
|
|
|
|
|
|
|
Capital (gains)/losses on investments |
– |
(251) |
(251) |
– |
543 |
543 |
|
Income not chargeable to corporation tax |
(141) |
– |
(141) |
(270) |
– |
(270) |
|
Tax deductible interest distribution |
(520) |
– |
(520) |
(782) |
– |
(782) |
|
Expenses not utilised in the current period |
128 |
29 |
157 |
201 |
78 |
279 |
|
Taxation on ordinary activities |
– |
– |
– |
– |
– |
– |
(c) Deferred tax
The Company has an unrecognised deferred tax asset of £843,000 (2025: £686,000) based on a prospective corporation tax rate of 25% (2025: 25%).
This deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the composition of the Company’s portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the accounts.
Given the Company’s status as an Investment Trust Company, no provision has been made for deferred tax on any capital gains or losses arising on the revaluation or disposal of investments.
7. Return per share
|
|
2026 |
2025 |
|
Revenue return (£’000) |
2,130 |
3,404 |
|
Capital return/(loss) (£’000) |
886 |
(2,482) |
|
Total return (£’000) |
3,016 |
922 |
|
Weighted average number of shares in issue during the year |
79,321,461 |
82,103,774 |
|
Revenue return per share (pence) |
2.69 |
4.15 |
|
Capital return/(loss) per share (pence) |
1.11 |
(3.02) |
|
Total return per share (pence) |
3.80 |
1.13 |
There are no dilutive instruments, the return per share is actual return.
8. Dividends
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
2025 interim dividend of 3.76p (2024: 2.94p) paid out of revenue profits1 |
2,987 |
2,423 |
|
|
|
|
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
2026 interim dividend proposed of 2.6p (2025: 3.76p), to be paid out of revenue profits |
2,033 |
3,049 |
1 The 2025 interim dividend amounted to £3,049,471. However the amount actually paid was £2,986,625, as shares were repurchased into treasury after the accounting date but prior to the dividend record date.
The 2026 interim dividend is made up wholly of an interest distribution of 2.6p (2025: 3.76p, wholly of interest).
The interim dividend amounting to £2,032,508 (2025: £3,049,471) is the amount used for the basis of determining whether the Company has satisfied the distribution requirements of Section 1158 of the Corporation Tax Act 2010. The revenue available for distribution by way of dividend for the year is £2,130,000 (2025: £3,404,000).
9. Fixed assets
(a) Movement in investments
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Opening book cost |
72,244 |
79,139 |
|
Opening investment holding gains |
1,237 |
3,714 |
|
Opening value |
73,481 |
82,853 |
|
Analysis of transactions made during the year |
|
|
|
Purchases at cost |
2,555 |
6,253 |
|
Sales proceeds |
(6,417) |
(13,452) |
|
Reversal of impairment provision on investments held at amortised cost |
177 |
235 |
|
Gains/(losses) on investments held at fair value through profit or loss |
1,004 |
(2,408) |
|
Closing value |
70,800 |
73,481 |
|
Closing book cost |
68,560 |
72,244 |
|
Closing investment holding gains |
2,240 |
1,237 |
|
Closing value |
70,800 |
73,481 |
The Company received £6,417,000 (2025: £13,452,000) from disposal of investments in the year. The book cost of these investments when they were purchased was £6,417,000 (2025: £13,383,000) These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the value of the investments.
(b) Unquoted investments, including investments quoted in inactive markets
|
|
Opening |
|
|
|
Closing |
| ||
|
|
valuation |
|
|
|
valuation |
| ||
|
|
at 30 June |
|
|
|
at 30 June |
| ||
|
Material revaluations of unquoted investments |
2025 |
Purchases |
Revaluation |
Distributions |
2026 |
| ||
|
during the year ended 30 June 2026 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
| ||
|
Investment |
|
|
|
|
|
| ||
|
Bridges Inclusive Growth Fund LP |
5,068 |
1,597 |
1,379 |
– |
8,044 |
| ||
|
Bridges Social Outcomes Fund II LP |
1,672 |
572 |
(33) |
(459) |
1,752 |
| ||
|
Rathbones Bond Portfolio: Thera Trust 6.0% 31/12/2027 |
1,374 |
– |
178 |
(517) |
1,035 |
| ||
|
CBRE UK Affordable Housing Fund |
10,312 |
– |
280 |
– |
10,592 |
| ||
|
|
Opening |
|
|
|
Closing |
| ||
|
|
valuation |
|
|
|
valuation |
| ||
|
|
at 30 June |
|
|
|
at 30 June |
| ||
|
Material revaluations of unquoted investments |
2024 |
Purchases |
Revaluation |
Distributions |
2025 |
| ||
|
during the year ended 30 June 2025 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
| ||
|
Investment |
|
|
|
|
|
| ||
|
Bridges Inclusive Growth Fund LP |
11,482 |
567 |
(978) |
(6,003) |
5,068 |
| ||
|
Man GPM RI Community Housing 1 LP |
8,168 |
1,159 |
(469) |
– |
8,858 |
| ||
|
Resonance Real Lettings Property Fund LP |
5,779 |
– |
(407) |
(1,804) |
3,568 |
| ||
|
Bridges Social Outcomes Fund II LP |
2,722 |
272 |
(316) |
(1,006) |
1,672 |
| ||
|
|
|
2026 |
| |||||
|
|
Book |
Sales |
Realised | |||||
|
|
cost |
proceeds |
gain/(loss) | |||||
|
Material disposals of unquoted investments during the year ended 30 June 2026 |
£’000 |
£’000 |
£’000 | |||||
|
Investment |
|
|
| |||||
|
Triodos Bank UK Limited 2020 Bond 4% 23/12/2030 |
2,500 |
2,500 |
– | |||||
|
Charity Bank Co-Invest Portfolio: Uxbridge United Welfare Trust 6.35% 12/12/2033 |
1,454 |
1,454 |
– | |||||
|
Rathbones Bond Portfolio: B4RN (Broadband for Rural North Limited) 4.5% 30/04/2026 |
865 |
865 |
– | |||||
|
|
|
2025 |
| |||||
|
|
Book |
Sales |
Realised | |||||
|
|
cost |
proceeds |
gain/(loss) | |||||
|
Material disposals of unquoted investments during the year ended 30 June 2025 |
£’000 |
£’000 |
£’000 | |||||
|
Investment |
|
|
| |||||
|
Bridges Inclusive Growth Fund LP |
6,003 |
6,003 |
– | |||||
|
Charity Bank Co-Invest Portfolio: Abbeyfield York 3.6% 12/05/2049 |
2,000 |
2,000 |
– | |||||
|
Resonance Real Lettings Property Fund LP |
1,804 |
1,804 |
– | |||||
|
Bridges Social Outcomes Fund II LP |
1,006 |
1,006 |
– | |||||
|
|
|
|
|
|
|
|
|
|
(c) Transaction costs
The following transaction costs, comprising stamp duty and legal fees, were incurred in the year:
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
On acquisitions |
– |
– |
|
On disposals |
– |
– |
|
|
– |
– |
10. Current assets
|
|
2026 |
2025 |
|
Debtors |
£’000 |
£’000 |
|
Dividends and interest receivable |
338 |
409 |
|
Other debtors |
21 |
14 |
|
|
359 |
423 |
The directors consider that the carrying amount of debtors approximates to their fair value.
11. Current asset investments
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Money market funds |
9,848 |
9,009 |
|
|
9,848 |
9,009 |
The Company held units in the HSBC Sterling ESG Liquidity Fund. The investment is held at fair value and would be categorised as Level 2 under the FRS 102 fair value hierarchy. As it is classified as a current asset investment, it is not included within the fair value hierarchy disclosure in Note 19, which relates to fixed asset investments held at fair value.
12. Current liabilities
|
|
2026 |
2025 |
|
Creditors: amounts falling due within one year |
£’000 |
£’000 |
|
Repurchase of the Company’s own shares into treasury awaiting settlement |
– |
30 |
|
Other creditors and accruals |
504 |
453 |
|
|
504 |
483 |
The directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.
13. Called-up share capital
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Ordinary Shares of 1p each, allotted, called up and fully paid: |
|
|
|
Opening balance of 81,102,939 (2025: 83,029,661) shares excluding shares held in treasury |
811 |
830 |
|
Repurchase of 2,929,557 (2025: 1,926,722) shares into treasury |
(29) |
(19) |
|
Closing balance of 78,173,382 (2025: 81,102,939) shares excluding shares held in treasury |
782 |
811 |
|
Shares held in treasury 7,143,204 (2025: 4,213,647) |
71 |
42 |
|
Closing balance of 85,316,586 (30 June 2025: 85,316,586) shares including shares held in treasury |
853 |
853 |
During the year, the Company repurchased 2,929,557 (2025: 1,926,722) of its own shares, nominal value £29,296 (2025: £19,267) to hold in treasury, representing 3.61% (2025: 2.32%) of the shares outstanding at the beginning of the year. The total consideration paid for these shares amounted to £2,001,000 (2025: £1,471,000). The reason for these purchases was to seek to manage the volatility of the share price discount to NAV per share.
14. Reserves
|
|
Share |
Special |
Capital |
Revenue |
|
|
premium1 |
reserve2 |
reserve3 |
reserve4 |
|
Year ended 30 June 2026 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Opening balance as at 1 July 2025 |
10,571 |
69,439 |
(1,064) |
3,688 |
|
Unrealised gain recognised in respect of investments continuing to be held |
– |
– |
1,004 |
– |
|
Reversal of impairment provision on investments |
– |
– |
177 |
– |
|
Repurchase of the Company’s own shares into treasury |
– |
(2,001) |
– |
– |
|
Management fees allocated to capital |
– |
– |
(295) |
– |
|
Dividends paid |
– |
– |
– |
(2,987) |
|
Retained revenue for the year |
– |
– |
– |
2,130 |
|
At 30 June 2026 |
10,571 |
67,438 |
(178) |
2,831 |
1 Share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the nominal value of shares issued.
2 This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company’s own shares.
3 This reserve may include some holding gains/(losses) on liquid investments (which may be deemed to be realised) and other amounts which are unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to repurchase the Company’s own shares) and those that are unrealised.
4 The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.
|
|
Share |
Special |
Capital |
Revenue |
|
|
premium1 |
reserve2 |
reserve3 |
reserve4 |
|
Year ended 30 June 2025 |
£’000 |
£’000 |
£’000 |
£’000 |
|
At 1 July 2024 |
10,571 |
70,910 |
1,418 |
2,707 |
|
Losses on sales of investments based on the carrying value at the |
|
|
|
|
|
previous balance sheet date |
– |
– |
(57) |
– |
|
Unrealised loss recognised in respect of investments continuing to be held |
– |
– |
(2,351) |
– |
|
Reversal of impairment provision on investments |
– |
– |
235 |
– |
|
Repurchase of the Company’s own shares into treasury |
– |
(1,471) |
– |
– |
|
Management fees allocated to capital |
– |
– |
(309) |
– |
|
Dividends paid |
– |
– |
– |
(2,423) |
|
Retained revenue for the year |
– |
– |
– |
3,404 |
|
At 30 June 2025 |
10,571 |
69,439 |
(1,064) |
3,688 |
The Company’s articles of association permit dividend distributions out of realised capital profits. Total distributable reserves as at 30 June 2026 were £67,673,000 (30 June 2025: £70,826,000).
1 Share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the nominal value of shares issued.
2 This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company’s own shares.
3 This reserve may include some holding gains/(losses) on liquid investments (which may be deemed to be realised) and other amounts which are unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to repurchase the Company’s own shares) and those that are unrealised.
4 The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.
15. Net asset value per share
|
|
2026 |
2025 |
|
Net assets attributable to shareholders (£’000) |
81,515 |
83,487 |
|
Shares in issue at the year end |
78,173,382 |
81,102,939 |
|
Net asset value per share (pence) |
104.27 |
102.94 |
16. Uncalled capital commitments
At 30 June 2026, the Company had uncalled capital commitments amounting to £9,639,000 (2025: £11,825,000) in respect of follow-on investments, which may be drawn down or called by investee entities, subject to standard notice periods.
17. Transactions with the Manager
Under the terms of the Alternative Investment Fund Manager Agreement, the Manager is entitled to receive a management fee. Details of the basis of the calculation are given in the Directors’ Report on page 47.
The fee payable to the Manager in respect of the year ended 30 June 2026 amounted to £535,000 (2025: £562,000), of which £216,000 (2025: £290,000) was outstanding at the year end. Any investments in funds managed or advised by the Manager or any of its associated companies, are excluded from the assets used for the purpose of the calculation and therefore incur no fee.
Under the terms of the Investment Management Agreement, the Manager may reclaim from the Company certain expenses paid by the Manager on behalf of the Company to JPM and HSBC in connection with accounting and administrative services provided to the Company. These charges amounted to £49,000 for the year ended 30 June 2026 (2025: £89,000), of which £45,000 (2025: £40,000) was outstanding at the year end.
No director of the Company served as a director of any company within the Schroder Group at any time during the year, or prior period.
In accordance with the terms of a discretionary mandate between the Company, Better Society Capital Limited, Rathbone Investment Management Limited and The Charity Bank Limited are entitled to receive a management fee for portfolio management services relating to certain of the Company’s investments.
The fee payable to Rathbone Investment Management Limited in respect of the year ended 30 June 2026 amounted to £53,000 (2025: £54,000), of which £13,000 (2025: £14,000) was outstanding at the year end. The fee payable to The Charity Bank Limited in respect of the year ended 30 June 2026 amounted to £2,000 (2025: £2,000), of which £2,000 was outstanding at the year end (2025: £nil).
18. Related party transactions
Details of the remuneration payable to directors are given in the Directors’ Remuneration Report on page 58 and details of Directors’ shareholdings are given in the Directors’ Remuneration Report on page 59. Details of transactions with the Managers are given in note 17 above.
There have been no other transactions with related parties during the year. (2025: nil).
19. Disclosures regarding financial instruments measured at fair value
The Company’s financial instruments within the scope of FRS 102 that are held at fair value comprise certain investments held in its investment portfolio.
FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels below. A fair value measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement.
Level 1 – valued using unadjusted quoted prices in active markets for identical assets.
Level 2 – valued using observable inputs other than quoted prices included within Level 1.
Level 3 – valued using inputs that are unobservable.
Details of the Company’s policy for valuing investments are given in note 1(b) on page 72.
The Company’s unlisted investments held at fair value are valued using a variety of techniques consistent with the recommendations set out in the International Private Equity and Venture Capital Guidelines. Investments in third-party managed funds were valued by reference to the most recent net asset value provided by the relevant manager. The valuation methods adopted by third-party managers include using comparable company multiples, net asset values, assessment of comparable company performance and assessment of milestone achievement at the investee. For certain investments, such as High Impact Housing, the third-party manager may appoint external valuers to periodically value the underlying portfolio of assets. The valuations of third-party managed funds will also be subject to an annual audit. The valuations of all investments are considered by the Portfolio Manager and recommended to the AIFM, who in turn recommends them to the Company. Where it is deemed appropriate, the Portfolio Manager may recommend an adjusted valuation to the extent that the adjusted valuation represents the Portfolio Manager’s view of fair value.
At 30 June 2026, the Company’s fixed asset investments held at fair value, were categorised as follows:
|
|
2026 | |||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
|
Investments |
2,829 |
991 |
50,726 |
54,546 |
|
Total |
2,829 |
991 |
50,726 |
54,546 |
|
At 30 June 2025, the Company’s fixed asset investments held at fair value, were categorised as follows: | ||||
|
|
|
|
|
|
|
|
2025 | |||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
|
Investments |
3,123 |
942 |
47,716 |
51,781 |
|
Total |
3,123 |
942 |
47,716 |
51,781 |
There were no transfers between Levels 1, 2 or 3 during the year. In the prior year, the Rathbone Ethical Bond Fund was transferred from Level 1 to Level 2, amounting to £942,000.
Movements in fair value measurements included in Level 3 during the year are as follows:
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Opening book cost |
45,571 |
48,567 |
|
Opening investment holding gains |
2,145 |
4,286 |
|
Opening fair value of Level 3 Investments |
47,716 |
52,853 |
|
Purchase at cost |
2,551 |
6,051 |
|
Sales proceeds |
(850) |
(9,047) |
|
Net gains/(losses) on investments |
1,309 |
(2,141) |
|
Closing fair value of Level 3 investments |
50,726 |
47,716 |
|
Closing book cost |
47,272 |
45,571 |
|
Closing Investments holding gains |
3,454 |
2,145 |
|
Closing fair value of Level 3 investments |
50,726 |
47,716 |
The primary valuation methodology applied is the use of the most recent valuation provided by the underlying manager. The Portfolio Manager reviews these valuations and considers whether any adjustment is required to reflect subsequent events, market conditions or other information relevant to fair value at the reporting date.
The table below shows the valuation methodologies applied to the Company’s Level 3 investments, together with the value of investments attributable to each methodology and, where applicable, the significant unobservable inputs used.
|
As at 30 June 2026 |
Fair value |
% of Level 3 |
|
Valuation methodology |
£’000 |
portfolio |
|
Third-party manager NAV (unadjusted) |
50,726 |
100.0% |
|
Third-party manager NAV (adjusted) |
– |
– |
|
Total Level 3 investments |
50,726 |
100.0% |
|
As at 30 June 2025 |
Fair value |
% of Level 3 |
|
Valuation methodology |
£’000 |
portfolio |
|
Third-party manager NAV (unadjusted) |
47,716 |
100.0% |
|
Third-party manager NAV (adjusted) |
– |
– |
|
Total Level 3 investments |
47,716 |
100.0% |
No adjustments were applied to the underlying manager valuations at 30 June 2026. Accordingly, no significant unobservable inputs were applied directly by the Company in determining the reported fair values.
Sensitivity analysis
The valuation of the Company’s Level 3 investments is subject to estimation uncertainty as the fair values are not derived from quoted market prices. This analysis is not intended to reflect anticipated market movements or expected changes in underlying valuations. A hypothetical change of +/– 5% has been applied solely for illustrative purposes to demonstrate the potential impact on the value of level 3 assets.
|
|
Fair value of |
|
|
|
Level 3 |
Impact on |
|
As at 30 June 2026 |
investments |
fair value |
|
Change in underlying manager valuations |
£’000 |
£’000 |
|
Total Level 3 investments |
50,726 |
– |
|
Increase by 5% |
53,262 |
2,536 |
|
Decrease by 5% |
48,190 |
(2,536) |
|
|
Fair value of |
|
|
|
Level 3 |
Impact on |
|
As at 30 June 2025 |
investments |
fair value |
|
Change in underlying manager valuations |
£’000 |
£’000 |
|
Total Level 3 investments |
47,716 |
– |
|
Increase by 5% |
50,102 |
2,386 |
|
Decrease by 5% |
45,330 |
(2,386) |
20. Financial instruments’ exposure to risk and risk management policies
The Company’s objectives are set out on the inside front cover of this report. In pursuing these objectives, the Company is exposed to a variety of financial risks that could result in a reduction in the Company’s net assets or a reduction in the profits available for dividends.
These financial risks include market risk (comprising interest rate risk and other price risk), liquidity risk and credit risk. The Directors’ policy for managing these risks is set out below. The Board coordinates the Company’s risk management policy. The Company has no significant exposure to foreign exchange risk on monetary items.
The Company’s classes of financial instruments may comprise the following:
• investments in collective funds, listed and unlisted bonds, debts, shares of quoted and unquoted companies which are held in accordance with the Company’s investment objective;
• debtors, creditors, short-term deposit and cash arising directly from its operations;
• bank loans used for investment purposes; and
• derivatives used for efficient portfolio management or currency hedging.
(a) Market risk
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises two elements: interest rate risk and other price risk. Information to enable an evaluation of the nature and extent of these two elements of market risk is given in parts (i) and (ii) of this note, together with sensitivity analyses where appropriate. The Board reviews and agrees policies for managing these risks.
The Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis.
(i) Interest rate risk
Interest rate movements may affect the level of income receivable on investments carrying a floating interest rate coupon, cash balances and interest payable on any loans or overdrafts when interest rates are re-set.
Management of interest rate risk
Liquidity and borrowings are managed with the aim of increasing returns to shareholders. The Company may borrow from time to time, but gearing will not exceed 20% of net asset value at the time of drawing. Gearing is defined as borrowings less cash, expressed as a percentage of net assets. The Company previously had an arranged overdraft facility to a limit of £5m with HSBC Bank plc. This expired on 30 November 2024. Accordingly, the Company does not have in place any arranged overdraft facilities.
Interest rate exposure
The exposure of financial assets and financial liabilities to floating interest rates, giving cash flow interest rate risk when rates are re-set, is shown below:
|
|
2026 |
2025 |
|
Exposure to floating interest rates: |
£’000 |
£’000 |
|
Investments carrying a floating interest rate coupon |
256 |
1,790 |
|
Current asset investments |
9,848 |
9,009 |
|
Cash at bank and in hand |
1,012 |
1,057 |
|
|
11,116 |
11,856 |
Sterling cash balances at call earn interest at floating rates based on the Sterling Overnight Interest Average rates (“SONIA”).
The above year end amounts are broadly representative of the exposure to interest rates during the year and prior year.
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 0.75% (2025: 0.75%) increase or decrease in interest rates in regards to the Company’s monetary financial assets and financial liabilities. This level of change is considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company’s monetary financial instruments held at the accounting date with all other variables held constant.
|
|
2026 |
2025 | ||
|
|
0.75% |
0.75% |
0.75% |
0.75% |
|
|
increase |
decrease |
increase |
decrease |
|
|
in rate |
in rate |
in rate |
in rate |
|
Income statement – return after taxation |
£’000 |
£’000 |
£’000 |
£’000 |
|
Revenue return |
83 |
(83) |
89 |
(89) |
|
Capital return |
– |
– |
– |
– |
|
Total return after taxation |
83 |
(83) |
89 |
(89) |
|
Net Assets |
83 |
(83) |
89 |
(89) |
(ii) Other price risk
Other price risk includes changes in market prices which may affect the value of investments.
Management of other price risk
The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated with particular industry sectors. The portfolio management team has responsibility for monitoring the portfolio, which is selected in accordance with the Company’s investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile. The Board may authorise the Manager to enter derivative transactions for the purpose of currency hedging, although non-sterling exposures are expected to be limited.
Market price risk exposure
The Company’s total exposure to changes in market prices at 30 June comprises the following:
|
|
2026 |
2025 |
|
|
£’000 |
£’000 |
|
Investments held at fair value through profit or loss |
54,546 |
51,781 |
|
|
54,546 |
51,781 |
The above data is broadly representative of the exposure of the Company’s fixed asset investments held at fair value to market price risk during the year.
Concentration of exposure to market price risk
An analysis of the Company’s investments is given on page 24. This shows a concentration of exposure to the social housing sector in the United Kingdom.
Market price risk sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to an increase or decrease of 10% in the fair values of the Company’s fixed asset investments. This level of change is considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company’s exposure to the underlying investments and includes the impact on the management fee but assumes that all other variables are held constant.
|
|
2026 |
2025 |
|
|
|
|
10% |
10% |
10% |
10% |
|
|
increase |
decrease |
increase |
decrease |
|
|
in fair |
in fair |
in fair |
in fair |
|
|
value |
value |
value |
value |
|
Income statement – return after taxation |
£’000 |
£’000 |
£’000 |
£’000 |
|
Revenue return |
(22) |
22 |
(21) |
21 |
|
Capital return |
5,433 |
(5,433) |
5,157 |
(5,157) |
|
Total return after taxation and net assets |
5,411 |
(5,411) |
5,136 |
(5,136) |
|
Percentage change in net asset value (%) |
6.6 |
(6.6) |
6.2 |
(6.2) |
(b) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
Management of the risk
The Portfolio Manager monitors the cash position to ensure sufficient is available to meet the Company’s financial obligations. For this purpose, the Portfolio Manager may retain up to 20% of net assets in Liquid Assets, other liquid investments and a reserve of cash.
Liquidity risk exposure
Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:
|
|
2026 |
2025 |
|
|
Three |
Three |
|
|
months |
months |
|
|
or less |
or less |
|
Creditors: amounts falling due within one year |
£’000 |
£’000 |
|
Other creditors and accruals |
(504) |
(483) |
|
|
(504) |
(483) |
(c) Credit risk
Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in loss to the Company.
Credit risk exposure
The Company is exposed to credit risk principally from debt securities held, off balance sheet commitments, loans and receivables and cash deposits.
Portfolio dealing
The credit ratings of broker counterparties are monitored by the AIFM and limits are set on exposure to any one broker.
Exposure to the custodian
HSBC Bank plc was the custodian of the Company’s assets prior to 30 September 2025. With effect from 30 September 2025, J.P. Morgan was appointed as the Company’s depositary and has delegated the custody of the Company’s financial instruments to JPMorgan Chase Bank, N.A., London Branch. JPMorgan Chase Bank, N.A. has long-term Credit ratings of AA with Fitch and Aa2 with Moody’s.
Any assets held by the custodian will be held in accounts which are segregated from the custodian’s own trading assets. If the custodian were to become insolvent, the Company’s right of ownership of those investments is clear and they are therefore protected. However the Company’s cash balances are all deposited with the custodian as banker and held on the custodian’s balance sheet. Accordingly, in accordance with usual banking practice, the Company will rank as a general creditor to the custodian in respect of cash balances.
Exposure to debt securities
The Portfolio Manager’s investment process ensures that potential investments are subject to robust analysis, appropriate due diligence and approval by an investment committee. Pre-investment checks are made to prevent breach of the Company’s investment limits, which are designed to ensure a diversified portfolio to manage risk. Debt securities are subject to continuous monitoring and quarterly reports are presented to the Board.
Credit risk exposure
The following amounts shown in the Balance Sheet, represent the maximum exposure to credit risk at the year end:
|
|
2026 |
2025 | ||
|
|
Balance |
Maximum |
Balance |
Maximum |
|
|
sheet |
exposure |
sheet |
exposure |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
|
Fixed assets |
|
|
|
|
|
Investments held at fair value through profit or loss |
54,546 |
– |
51,781 |
– |
|
Investments held at amortised cost (debt securities) |
16,254 |
16,254 |
21,700 |
21,700 |
|
Current assets |
|
|
|
|
|
Debtors |
359 |
359 |
423 |
423 |
|
Current asset investments |
9,848 |
9,848 |
9,009 |
9,009 |
|
Cash at bank and in hand |
1,012 |
1,012 |
1,057 |
1,057 |
|
|
82,019 |
27,473 |
83,970 |
32,189 |
At 30 June 2026, the Company had an off-balance sheet credit exposure consisting of uncalled capital commitments which amounted to £9,639,000 (2025: £11,825,000) in respect of follow-on investments.
(d) Fair values of financial assets and financial liabilities
All financial assets and liabilities are either carried in the balance sheet at fair value, or the balance sheet amount is a reasonable approximation of fair value.
21. Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern, and to maximise the income and capital return to its equity shareholders.
The Company’s capital structure comprises the following:
|
|
2026 |
2025 |
|
Equity |
£’000 |
£’000 |
|
Called-up share capital |
853 |
853 |
|
Reserves |
80,662 |
82,634 |
|
Total equity |
81,515 |
83,487 |
The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review will include:
• the possible use of gearing, which will take into account the Manager’s views on the market;
• the potential benefit of repurchasing the Company’s own shares for cancellation or holding in treasury, which will take into account the share price discount;
• the opportunity for issue of new shares; and
• the amount of dividend to be paid, in excess of that which is required to be distributed.
22. Events after the accounting date that have not been reflected in the financial statements
On 31 July 2026, Bluefield Solar Income Fund Limited was acquired by Drax Smart Generation Holdco Limited by way of a scheme of arrangement, which became effective on that date. The subsequent cancellation of the Company’s listing and admission to trading on the London Stock Exchange took effect on 3 August 2026.
There have been no other events we are aware of since the balance sheet date which either require changes to be made to the figures included in the financial statements or to be disclosed by way of note.
23. Status of results announcement
2026 Financial Information
The figures and financial information for 2026 are extracted from the Annual Report and Financial Statements for the year ended 30th June 2026 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Registrar of Companies in due course.
2025 Financial Information
The figures and financial information for 2025 are extracted from the published Annual Report and Financial Statements for the year ended 30th June 2025 and do not constitute the statutory accounts for the year. The Annual Report and Financial Statements have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
29 October 2026
For further information:
020 7658 6189
Schroder Investment Management Limited
E-mail: AMCompanySecretary@Schroders.com
Issued by Schroder Investment Management Limited. Registration No 1893220 England.
Authorised and regulated by the Financial Conduct Authority. For regular updates by e-mail please register online at www.schroders.com for our alerting service.
ENDS
A copy of the 2026 Annual Report will shortly be submitted to the FCA's National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The 2026 Annual Report will shortly be available on the Company's website at www.schroders.com/sbsi where up-to-date information on the Company, including daily NAV and share prices, factsheets and portfolio in formation can also be found.
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