Final Results for the year ended 30 June 2026

European Smaller Companies Tst PLC

30 September 2026

 

JANUS HENDERSON FUND MANAGEMENT UK LIMITED THE EUROPEAN SMALLER COMPANIES TRUST PLC Legal Entity Identifier: 213800N1B1HCQG2W4V90 This announcement contains regulated information THE EUROPEAN SMALLER COMPANIES TRUST PLC Financial results for the year ended 30 June 2026 The European Smaller Companies Trust PLC announces its financial results for the year ended 30 June 2026. PERFORMANCE HIGHLIGHTS § Net asset value1 ('NAV') per share total return rose by 16.8%, outperforming the benchmark2 by 4.4% § Share price total return3 was 15.3% § NAV and share price outperformance of the benchmark index over 1, 3, 5, and 10 years § New dividend policy targeting a total dividend of 5% of the NAV per share as at the previous year end § Total dividend for the year ended 30 June 2026 of 8.43p per share § Prospective dividend of 12.64p for the year ending 30 June 2027, representing an indicative yield of 5.4% based on the share price as at 30 June 2026 Investment Objective The Company seeks capital growth by investing predominantly in smaller and medium sized companies which are quoted, domiciled, listed or have operations in Europe4.

Total return performance to 30 June 2026 (including dividends reinvested and excluding transaction costs)
	1 year %	3 years %	5 years %	10 years %
NAV1,6	16.8	49.9	37.7	235.7
Share price3,6	15.3	68.0	46.9	290.9
MSCI Europe ex UK Small Cap Index2	12.4	41.1	28.4	156.9
AIC European Smaller Companies sector	11.8	45.2	28.0	200.3
Open-ended fund sectors:
IA European Smaller Companies sector	9.2	33.9	14.7	120.3
EAA Fund Europe Small Cap Equity sector	6.5	21.9	0.9	93.9

Financial highlights	at 30 June 2026	at 30 June 2025
Net assets (£'000)	862,973	510,677
NAV per ordinary share	252.42p	224.45p
Share price	234.00p	211.50p
	Year ended 30 June 2026	Year ended 30 June 2025
Net revenue profit (£'000)	16,652	15,897
Net capital profit (£'000)	95,925	74,160
	------------	------------
Profit for the year	112,577	90,057
	=======	=======
Total return per ordinary share
Revenue	5.30p	4.24p
Capital	30.52p	19.78p
	-------------	-------------
Total return per ordinary share	35.82p	24.02p
	=======	=======
Ongoing charge excluding performance fee5,6	0.66%	0.68%
Ongoing charge including performance fee5,6	0.76%	0.93%
1.     Net asset value ('NAV') total return per share with dividends reinvested 2.     MSCI Europe ex UK Small Cap Index 3.     Using the closing share price at the year end with dividends reinvested 4.     At any given time, over 75% of the portfolio is expected to be invested in companies which are quoted, domiciled, listed or have operations in Europe 5.     Calculated using the methodology prescribed by the Association of Investment Companies ('AIC') 6.     NAV per share, NAV total return, share price total return and ongoing charge are alternative performance measures.  More information on these can be found in the Annual Report 2026 Sources: Morningstar Direct, Janus Henderson Investors

Chairman's statement I am pleased with how the Company has navigated what has proved to be another eventful year. We successfully combined with European Assets Trust PLC ('EAT') and welcomed two new Board members, with Kate Cornish-Bowden and Stuart Paterson joining from the Board of EAT. Following the combination, we are now the largest constituent of the AIC European Smaller Companies sector, with the second highest dividend yield across closed-end funds with a European focus, both small and large-cap. We believe this broadens the Company's appeal to investors and is the result of our decision to adopt a new policy targeting a minimum total dividend of 5% of the NAV per share as at the previous year end. The attractive yield complements the strong, long-term performance where the fund management team have outperformed the benchmark over 1, 3, 5 and 10 years. Shareholders have further benefited from a reduced ongoing charge of 0.66%1, which was achieved through negotiating a reduction in the management fee. Beyond your Company, geopolitical events have caused further bouts of market volatility. The US/Israeli war with Iran has resulted in instability in the energy market and fears of supply chain challenges, fears that have not yet fully manifested, but have also not fully dissipated. The extraordinary development of Artificial Intelligence ('AI') and the capital expenditure boom to deliver it has had a dramatic effect on stock prices and consequently influenced the best and worst performing stocks in the portfolio. All in all, it has been a busy period for your Company and I am grateful that our fund managers have once again delivered strong performance. Performance The NAV total return for the year to 30 June 2026 was 16.8%, comfortably ahead of the benchmark return of 12.4%. This maintains the fund managers' consistent five-year track record to 30 June 2026, with a NAV total return of 37.7% against the benchmark of 28.4%, and even more impressively, the ten-year track record of 235.7% against the benchmark of 156.9%. The share price total return over the year to 30 June 2026, was 15.3%. Dividend policy The Board introduced a new dividend policy following the completion of the combination with EAT in October 2025. The policy was applied for the final three quarters of the Company's financial year ending 30 June 2026, delivering a total dividend of 8.43p per share. Under the policy we intend to pay quarterly interim dividends totalling at least 5% of the NAV per share as at the preceding financial year end. As we progress through the next two quarters, the dividend yield on the Company will expand to this level as we annualise the new policy. On 3 July 2026, we announced the prospective total dividend for the year ending 30 June 2027 of 12.64p per share. We anticipate paying this across four interim dividends, each of 3.16p per share in November 2026 and February, May and August 2027. Many retail share dealing platforms such as AJ Bell, Hargreaves Lansdown, Interactive Investor and many more, offer the ability to automatically reinvest dividends. We would encourage shareholders to make use of this facility. Discount management and share buyback In January 2025, we introduced a mid-single digit target for the discount at which the Company's shares trade compared to its NAV in normal market conditions. In the financial year ended 30 June 2026, we bought back 16.8m shares, returning over £36.7m to shareholders. The discount ranged from 5.1% to 10.4%, reflecting appetite generally for equities during a heightened period of geopolitical tensions. The discount at 30 June 2026 was 7.3%, comparable to peers in the AIC sector. The Board believes that the enhanced dividend policy, ongoing share buybacks and the marketing programme should work to support a further narrowing of the discount notwithstanding the background of volatile stock market events. Annual General Meeting The 36th Annual General Meeting ('AGM') will be held at 12.30 pm on Monday, 16 November 2026 at the offices of our investment manager at 201 Bishopsgate, London, EC2M 3AE. The AGM is a great opportunity for shareholders to hear first-hand from the fund manager and to pose questions to the directors and the fund management team. I encourage as many shareholders as possible to join us at the AGM to vote on the resolutions under consideration, or to complete their proxy form ahead of the meeting. The voting results help inform the Board of shareholder sentiment on some of our key strategic approaches such as the quarterly dividend and appetite to buy back shares. For those wishing to attend, but unable to travel, the event will be streamed live via the internet, although shareholders will not be able to vote via this medium. Outlook Since 2024 global stock markets have experienced significant disruption, whether geopolitical or driven by the extraordinary transformation brought about by the advent of AI. Neither seem likely to go away anytime soon, whether that be the ongoing development of AI or more local changes in Europe such as potential German economic stimulus or upcoming elections in France. We believe that European smaller companies are well placed to benefit from these changes. A number of companies in the European technology sector are critical to the AI roll-out and provide exciting investment prospects for our fund managers. Beyond this, European companies lead in many other niche sectors, as our fund managers' highlight in their report. Valuations remain compellingly attractive across smaller companies versus larger companies and there are many opportunities for our fund managers to invest in. We believe the Company remains well placed to continue delivering value for shareholders over the long term. James Williams Chairman 1 Ongoing charge ratio excluding the performance fee, 0.76% including the performance fee.

Fund manager's report The financial year ended 30 June 2026 was a positive one for European smaller companies. The first half was shaped by a capricious US tariff policy, which weighed on corporate decision-making, a sluggish Chinese economy attempting to reignite growth through aggressive export-led stimulus and increasing scepticism over the German government's ability to deliver its promised infrastructure investment programme. The second half brought a very different set of challenges and opportunities, characterised by first an AI-driven market euphoria, followed by a sharp correction, and culminating in the US and Israel's conflict with Iran, which led to the temporary blockade of the Strait of Hormuz. Against this backdrop, markets experienced significant volatility throughout the year. Despite these headwinds, the Company delivered a return of 16.8%, compared with 12.4% for the benchmark, resulting in outperformance of 4.4%. Although tariffs, elections and geopolitical conflict provided a volatile backdrop, the dominant investment theme of the year was the market's rapidly strengthening belief in the transformative potential of AI. From February onwards, investors increasingly viewed the market through a binary lens of 'AI winners' and 'AI losers', frequently overlooking the nuances of individual business models and competitive positions. This environment created both opportunities and challenges for the portfolio. We benefited from our exposure to several businesses aligned with AI infrastructure investment, yet several holdings were adversely affected by perceptions that they faced disruption from AI. In our view, the market often applied these labels indiscriminately, rewarding some companies while penalising others with limited regard for the durability of their franchises or the strength of their underlying fundamentals. AI - the winners and losers Within the 'AI winners' German listed semiconductor equipment producer of lithography, wafer bonding and photomask processing tools, SUSS MicroTec, was a substantial contributor to performance. The tools produced by SUSS MicroTec are used for the wafer-bonding and advanced packaging equipment used in the high-bandwidth memory and chiplet architectures that underpin AI accelerators and GPUs. In lay terms SUSS MicroTec provides the equipment used to make the brains behind AI computers. Other notable AI winners include Norwegian listed Smartoptics that provides optical networking solutions and devices being used in datacentres using their high-speed fibre optic links to move data between servers and sites. German listed PVA TePla makes metrology machines used to inspect the advanced semiconductor chips that power AI systems. German listed Aixtron sells the specialist equipment used to make the power semiconductors and optical chips that help AI datacentres run more efficiently and move data at higher speeds. ams-OSRAM provides laser and photonics components that also helps data move between AI chips and servers more efficiently. German listed PFISTERER provides the high-voltage cable connection technology needed in the grid to meet the power demands of datacentres. The 'AI losers' in the portfolio that hurt performance include Swedish listed provider of legal information services Karnov. The shares took a precipitous lurch down in February after Anthropic launched a legal workflow processing module for their Claude AI model. We underestimated the risk of the stock being labelled as an AI loser because Karnov owns the data being used in its markets and has developed and launched its own AI tools that it is already selling to its clients in Sweden and Denmark. Given the proprietary data, in-house AI tools and substantial cash return programme from the company we have persevered with our position but are monitoring it closely. German listed provider of web hosting and cloud service solutions, IONOS, was also labelled an AI loser and burdened the portfolio. The AI loser thesis revolved around the idea that AI would disintermediate the use of websites and that companies would no longer bother to have them and thus host them on IONOS's datacentres. We find this argument unconvincing. Company websites are the shop window to the world, and we don't anticipate their demise any time soon. IONOS are actively selling AI tools to small businesses in their markets and in due course we expect it to shed the AI loser label. German listed provider of IT consulting services, Adesso, has also suffered under the AI loser label. The capacity of the AI models to provide computer coding skills has meaningfully lowered the cost of providing software and technology know how which might reduce the need for consultants, lower day rates and perhaps drive insourcing. As it currently stands customers seem to be asking for more help as they wrestle with how to benefit from AI within their businesses. We have held on to the position but with added scrutiny. Spanish listed HBX, that provides a cloud-based technology platform to link travel companies and hotels suffered from being seen as an AI loser, whilst also seeing a decline in US travel after tariff announcements and then later in the Middle East after the war in Iran started. We believe that its deep database and proprietary data means it is well positioned to take advantage of the changes AI will deliver. The portfolio Outside the AI theme, other stocks that contributed positively to performance include German listed producer of automotive semiconductors, Elmos Semiconductor ('Elmos'). Elmos manufactures sensors that make cars safer, smarter and more comfortable. Cars are increasingly becoming mobile computers and Elmos is seeing fast growth as their products become more intensively used by global automotive original equipment manufacturers. We believe Elmos remains well positioned for increasing semiconductor content within advanced driver assistance and autonomous vehicle applications. Elmos also has a number of clients in the humanoid robot sphere. Intriguingly the shares have correlated with the AI winners, though their products are not directly impacted by the AI capex theme. UK listed IG Group, the provider of a global online trading platform that enables retail investors to trade financial markets, saw strong customer growth and strong trading that helped drive the stock's rerating. Swedish listed Acast, that provides a global podcast platform used by creators to host, distribute and monetise their podcasts by connecting them with advertisers and audiences continued to drive strong topline growth and delivered good performance for the trust. Swedish listed online department store, Boozt, has had strong performance as the Swedish consumer recovery begins to materialise. Other detractors include German listed Stroeer, the leading operator of billboards and digital advertising screens in Germany. They had a tough set of comparative numbers after a strong 2024 and as bid speculation fell away. Swedish listed Lindab, that turns sheet metal into ventilation products and building profile business that makes products like wall cladding and rainwater systems has missed forecasts as the Profile business is exposed to new-build construction that has remained soft in Sweden. Swedish listed Bonava, that builds houses in Sweden and parts of northern Europe, endured weak trading for the same reason. German listed forklift manufacturer Jungheinrich performed poorly due to weak end markets, having to close its Russian subsidiary and a strike at its main production plant. Geographical and sector distribution The portfolio carried a substantial Information Technology overweight in the period. This allocation effect, combined with strong stock selection, drove the performance of the portfolio. Other positive IT contributors include Swiss-listed provider of geolocation technology u-blox, which was acquired by Advent International; Swiss-listed Inficon, which produces vacuum instruments to monitor and control production processes, also did well. Swedish-listed distributor of printed circuit boards NCAB and Swedish-listed producer of semiconductor equipment Mycronic, also contributed positively. The portfolio was mildly underweight Financials, but stock selection made for a strong contribution to returns in the period. Exposure to southern European banks such as Banco Comercial Portugues in Portugal, and Alpha Bank, CrediaBank and Optima in Greece, delivered good returns for the portfolio. Our positions in German listed retail trading platform, flatexDEGIRO and Dutch wealth manager Van Lanschot Kempen also did well. Conversely poor stock selection in Industrials weighed on performance with names such as Norwegian listed producer of reverse vending machines, Envipco, struggling as governments shifted decisions to later time periods for bringing in legislation mandating the use of machines for collecting deposits on plastic bottles. German listed defence equipment manufacturer RENK burdened the portfolio in the period. Our underweight position in Energy further weighed on performance after the price of oil and gas spiked following the closure of the Strait of Hormuz. The portfolio remains heavily overweight Germany with a mixture of domestic exposure such as IT service and equipment provider, Bechtle, and more internationally focused stocks such as specialty chemical producer of creatine and nitroguanidine, Alzchem. The travails of the German economy are widely advertised with significant challenges in the automotive sector weighing on the economy. The prejudices about this market have created the opportunity to buy some great businesses at great prices. We have also built an overweight position in Sweden. Swedish small cap has been facing significant outflows following a period of weak performance and the consolidation of Swedish public pension providers has created some forced selling of Swedish smaller companies. We have taken advantage of this period of dislocation to build positions in some mispriced companies. We opened a position in Swedish housebuilder JM as we see a housing recovery coming in Stockholm and expect the rest of Sweden to follow suit. We invested in Asmodee, a leading provider of board games and trading cards such as Pokémon. Other new positions in Sweden include organ transplant technology company, XVIVO, leading manufacturer of bike racks, cargo carriers and hitch solution for vehicles, Thule, and software provider for cancer radiation therapy RaySearch Laboratories. We have large underweights in Italy, Switzerland and Norway where we struggle to find attractively valued companies. Other purchases We started a position in German listed provider of children's storytelling entertainment products, Tonies. As part of our integration of EAT, we inherited a position in Danish bank, Ringkjobing Landbobank that we have maintained. We took part in initial public offerings of Finnish provider of office pods, Framery, and Austrian truck mounted crane business, Palfinger. Other disposals We exited our position in Spanish credit insurer, Grupo Catalana Occidente, which was taken private by the controlling family. Irish hotelier, Dalata, was also taken private as was Hellenic Exchanges, the Greek stock exchange and German branded pharmaceutical company, Dermapharm, was de-facto bought by the founder. Currency The Company is denominated in sterling, while investing in largely euro-denominated assets. We do not hedge this currency exposure. Outlook Recent years have seen consistent disruption that has sucked the momentum out of a European recovery. 2024 had the disruption of UK, French, German and US elections. 2025 had Liberation Day tariffs. 2026 had the start of a war in the Middle East and the fear of a further energy shock. Despite the recurring setbacks there are plentiful reasons for optimism. An energy shock was absorbed by the global economy with little drama and no spike in inflation. Indeed, the global economy seems to be growing far less reactive to the statements coming from the US administration. German stimulus in defence is coming through and there is the strong prospect of the infrastructure spend to follow in 2027. Despite the frequent assertions to the contrary, Europe has a thriving technology sector, much of which resides in the smaller company arena and is benefiting from booming orders as huge AI capex spending comes through from the US technology majors. European smaller companies lead in niches such as industrial automation, specialty chemicals, medical technology and machine tooling. We operate in a universe with considerable innovation, robust balance sheets and attractive valuation. The asset class remains fundamentally under-owned providing an environment rich in opportunities. We are firmly focused on deploying your capital towards undervalued companies with considerable potential across the entire region. Ollie Beckett, Rory Stokes and Julia Scheufler Fund management team

Geographic exposure at 30 June 2026
(% of portfolio excluding cash)	2026 %	2025 %
Germany	23.2	23.2
Sweden	20.0	13.9
France	11.3	11.2
Spain	8.6	8.7
Netherlands	8.0	9.7
Switzerland	7.0	9.1
Austria	3.9	1.8
Belgium	3.0	3.4
Norway	2.6	3.4
United Kingdom	2.5	2.4
Denmark	2.4	2.0
Italy	2.1	3.2
Finland	1.8	1.5
Greece	1.5	3.7
Luxembourg	1.2	-
Portugal	0.5	2.1
Bulgaria	0.4	-
Ireland	-	0.7
	100.0	100.0

Sector exposure at 30 June 2026
(of portfolio excluding cash)	2026 %	2025 %
Industrials	30.3	32.8
Technology	19.9	15.1
Consumer Discretionary	18.4	19.9
Financials	10.6	13.4
Basic Materials	7.4	6.1
Health Care	7.4	4.6
Real Estate	3.4	4.2
Energy	1.9	2.9
Utilities	0.4	0.4
Consumer Staples	0.3	0.6
	100.00	100.00

Our principal risks Investing, by its nature, carries inherent risk. The Board, with the assistance of the investment manager, carries out a robust assessment of the principal and emerging risks and uncertainties facing the Company which could threaten the business model and future performance, solvency and liquidity of the portfolio. A matrix of these risks, along with the steps taken to mitigate them, is maintained and kept under regular review. The mitigating measures include a schedule of investment limits and restrictions within which the fund management team must operate. Alongside the principal risks, the Board considers emerging risks, which are defined as potential trends, sudden events or changing risks which are characterised by a high degree of uncertainty in terms of the probability of them happening and the possible effects on the Company. Should an emerging risk become sufficiently clear, it may be classified as a principal risk. During the year under review, the Board did not identify any emerging risks which were not already encompassed within the existing principal risks. The assessment included consideration of the possibility of severe market disruption. The principal risks which have been identified and the material controls in place to mitigate these, are set out below. The Board does not believe these principal risks to have changed materially over the course of the year. Investment strategy and objective The investment objective or policy is not appropriate in the prevailing market or sought by investors, leading to a wide discount and hostile shareholders. Poor investment performance over an extended period leading to shareholders voting to wind up the Company.  This may be the result of: ·      external factors such as notable advancements in technology, geopolitical instability, financial shock, pandemic, climate change, changes in the regulatory environment, etc. ·      internal factors such as poor stock selection, poor management of gearing, loss of key members of the fund management team, etc. Investment mandate limits established by the Board are inappropriate leading to out-of-scope investments which may negatively impact shareholder value.  Material controls:  The Board periodically reviews the Investment Objective and Policy in line with best practice and taking account of investor appetites. The Board receives regular updates on professional and retail investor activity from the investment manager and corporate broker to inform themselves of investor sentiment and how the Company is perceived in the market. From time to time, research may be undertaken by third-party consultants to specifically ascertain the views of retail investors. The Board reviews the key performance indicators, portfolio composition and diversification, gearing, compliance with the investment mandate limits, the level of discount and changes to the share register at each meeting. The Board maintains an understanding of the fund management team's investment process and considers the external and internal factors, which may impact the value of the portfolio. The Board must approve changes to the investment limits and restrictions and reviews compliance with these at each meeting. Operational Failure of, disruption to or inadequate service levels provided by principal third-party service providers leading to loss of shareholder value or reputational damage. Inadequate cyber security arrangements at the Company's third-party service providers leading to data being compromised or lost, and shareholder value impacted. Material controls:  The Board engages reputable third-party service providers and formally evaluates their performance, and terms of engagement, at least annually. The Audit Committee receives regular reporting from the investment manager's Chief Information Security Officer on the firm's cyber security framework, any material incidents and their oversight of the cyber security arrangements in place at third-party service providers. The Audit Committee reviews the independently audited assurance reports from third-party service providers which set out the effectiveness of the internal controls in place.  These include controls relating to information technology and the robustness of recovery arrangements. Legal and regulatory Loss of HMRC approved investment trust status or changes in the taxation regime applicable to investment trusts.  Breach of the Companies Act 2006, the UK Listing Rules, Prospectus Rules, the Disclosure Guidance and Transparency Rules, the articles of association or the Alternative Investment Fund Manager's Directive. Legal action brought against the Company/directors/investment manager leading to loss of shareholder value and reputational damage. Material controls:   At each meeting, the Board reviews compliance with the investment mandate and testing against the requirements of the Corporation Tax Act 2010 to ensure HMRC approved investment trust status is maintained. The Board engages reputable third-party service providers to deliver the Company's operations. Service levels are agreed and monitored, and the services delivered by the Company's third-party service providers are undertaken by suitably qualified individuals. The Audit Committee assesses the effectiveness of internal controls in place at the Company's third-party service providers through review of the independently audited assurance reports, which include provisions regarding qualifications and ongoing training. Financial Market, liquidity and/or credit risk, inappropriate valuation of assets or poor capital management leading to a loss of shareholder value. Material controls:  The Board determines the investment limits and monitors compliance with these at each meeting. The directors review the portfolio liquidity at each meeting and periodically consider the appropriateness of hedging the portfolio against currency risk. The Board reviews the revenue statement, balance sheet and portfolio valuation at each meeting.  Holdings in the portfolio are valued in line with accounting policies. Investment transactions are carried out by a large number of approved brokers whose credit standard is periodically reviewed and limits are set on the amount that may be due from any one broker, cash is only held with the custodian or reputable banks. The Board monitors the broad structure of the Company's capital including the need to buy back or allot shares and the extent to which revenue in excess of that which is required to be distributed, should be retained. Assessing our viability In keeping with provisions of the Code of Corporate Governance issued by the Association of Investment Companies (the 'AIC Code'), the Board has assessed the prospects of the Company for a period of at least twelve months from the date of this report, being 29 September 2027 (our assessment of going concern) and also over the longer period of three years (our assessment of viability). We consider the Company's viability over a three-year period as we believe this is a reasonable timeframe reflecting the longer term investment horizon for the portfolio, but acknowledges the inherent shorter term uncertainties in equity markets. As part of the assessment, we have considered the Company's financial position, as well as its ability to liquidate the portfolio and meet expenses as they fall due. The following aspects formed part of our assessment:. ·      the closed-end nature of the Company which does not need to account for redemptions; ·      an assessment of the principal and emerging risks, as well as the uncertainties facing the Company, including the potential impact of climate change on the value of investee companies; ·      the diverse nature of the portfolio and its anticipated liquidity in normal and stressed market conditions; ·      the level of the Company's revenue reserves and the size of the bank overdraft facility; and ·      the expenses incurred by the Company, which are predictable and modest in comparison with the assets and the fact that there are no capital commitments currently foreseen which would alter that position. Also of relevance in contemplating the duration of the Company, is the three-year cycle for its continuation vote. Shareholders were last asked at the annual general meeting in 2025 if they wished the Company to continue in operation. The resolution was passed with the overwhelming support of 99.8% of the shareholders who voted. The next continuation vote will be put to shareholders at the annual general meeting due to be held in 2028. Based on the voting record since 2000 for such resolutions and the recent tender offer which facilitated an exit for all shareholders not wishing to continue their investment in the Company, the Board is confident that shareholders will continue to support the Company. In the event this is not the case, the directors are required under the articles of association to put forward proposals for the liquidation or reconstruction of the Company. As well as considering the principal risks and financial position of the Company, along with the continuation vote, the Board has made the following assumptions: ·      investors will continue to wish to have exposure to European smaller companies ·      investors will continue to invest in closed-end funds; ·      the Company's performance will continue to be satisfactory; and ·      the Company will continue to have access to adequate capital when required. Based on the results of the assessment, we have: ·      concluded that the Company has adequate resources to meet its liabilities for a period of at least twelve months from the date of this report, meaning it is therefore appropriate to prepare these financial statements on a going concern basis; and ·      a reasonable expectation that the Company will be able to continue operations over the coming three-year period, as well as meeting its expenses and liabilities for that period. Transactions with related parties The Company's transactions with related parties in the year were with the directors and the investment manager. There have been no material transactions between the Company and its directors during the year. The only amounts paid to them were in respect of remuneration, ad hoc payments in respect of additional work undertaken in respect of the requisition, tender offer and combination with EAT, and expenses, for which there were no outstanding amounts payable at the year-end. In relation to the provision of services by the investment manager, other than fees payable by the Company in the ordinary course of business and the provision of marketing activities, there have been no material transactions affecting the financial position of the Company during the year under review. More details on transactions with the investment manager, including amounts outstanding at the year end, are given in note 21 of the Annual Report 2026. Directors' responsibility statements Each of the directors in office at the date of this report confirms that, to the best of their knowledge: ·      the financial statements prepared in accordance with UK Adopted International Accounting Standards give a true and fair view of the assets, liabilities, financial position and profit and loss of the issuer and the undertakings included in the financial statements as a whole; and ·      the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. For and on behalf of the Board Daniel Burgess Chairman of the Audit Committee

Statement of Comprehensive Income
	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return  £'000	Total return £'000
Investment income	20,066	-	20,066	20,623	-	20,623
Other income	52	-	52	79	-	79
Gains on investments held at fair value through profit or loss	-	101,197	101,197	-	82,027	82,027
	-----------	-----------	-----------	-----------	-----------	------------
Total income	20,118	101,197	121,315	20,702	82,027	102,729
	-----------	-----------	-----------	-----------	-----------	-----------
Expenses
Management and performance fee	(750)	(3,745)	(4,495)	(813)	(5,030)	(5,843)
Other operating expenses	(1,348)	(34)	(1,382)	(1,789)	-	(1,789)
	-----------	-----------	-----------	-----------	-----------	-----------
Profit before finance costs and taxation	18,020	97,418	115,438	18,100	76,997	95,097
Finance costs	(374)	(1,493)	(1,867)	(698)	(2,791)	(3,489)
	-----------	-----------	-----------	-----------	-----------	-----------
Profit before taxation	17,646	95,925	113,571	17,402	74,206	91,608
Taxation	(994)	-	(994)	(1,505)	(46)	(1,551)
	-----------	-----------	-----------	-----------	-----------	-----------
Profit for the year and total comprehensive income	16,652	95,925	112,577	15,897	74,160	90,057
	======	======	======	======	======	======
Return per ordinary share - basic and diluted	5.30p	30.52p	35.82p	4.24p	19.78p	24.02p
	======	======	=======	======	======	======
The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with UK adopted International Accounting Standards. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. The Company has no recognised gains or losses other than those recognised in the Statement of Comprehensive Income. All revenue and capital items in this statement derive from continuing operations.

Statement of Changes in Equity
	Year ended 30 June 2026
	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Special distributable reserve £'000	Special un- distributable reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 1 July 2025	4,363	120,364	14,062	-	-	338,863	33,025	510,677
Total comprehensive income:
Profit for the year	-	-	-	-	-	95,925	16,652	112,577
Buyback of shares for treasury	-	-	-	(17,525)	-	(19,228)	-	(36,753)
Tender offer - accrual adjustment	-	-	-	-	-	17	-	17
Capital costs recoverable	-	-	-	-	-	9	-	9
Issue of shares on ESCT/EAT combination	2,049	302,072	-	-	-	-	-	304,121
Issue costs in respect of the ESCT/EAT combination	-	-	-	-	-	(1,371)	-	(1,371)
Contribution from JHI towards ESCT/EAT combination	-	-	-	-	-	1,091	-	1,091
Cancellation of share premium account	-	(422,436)	-	371,904	50,532	-	-	-
Transfer from undistributable reserve to distributable	-	-	-	8,016	(8,016)	-	-	-
Ordinary dividends paid	-	-	-	-	-	-	(27,395)	(27,395)
	----------	----------	----------	-----------	-----------	-----------	-----------	------------
Total equity at 30 June 2026	6,412	-	14,062	362,395	42,516	415,306	22,282	862,973
	======	======	======	======	======	======	======	=======

	Year ended 30 June 2025
	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Special distributable reserve £'000	Special undistributable reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 1 July 2024	6,208	120,364	14,020	-	-	621,976	36,026	798,594
Total comprehensive income:
Profit for the year	-	-	-	-	-	74,160	15,897	90,057
Buyback of shares for cancellation	(42)	-	42	-	-	(4,720)	-	(4,720)
Buyback of shares for treasury	-	-	-			(1,848)	-	(1,848)
Tender offer - payments to shareholders	(1,803)	-	-	-	-	(349,391)	-	(351,194)
Net movement in cash realisation pool	-	-	-	-	-	1,861	-	1,861
Tender offer - costs	-	-	-			(3,261)	-	(3,261)
Capital costs recoverable	-	-	-	-	-	86	-	86
Ordinary dividends paid	-	-	-	-	-	-	(18,898)	(18,898)
	-----------	-----------	-----------	-----------	-----------	------------	-----------	-----------
Total equity at 30 June 2025	4,363	120,364	14,062	-	-	338,863	33,025	510,677
	======	======	======	======	======	=======	======	=======

Balance Sheet
	At 30 June 2026 £'000		At 30 June 2025 £'000
Non current assets
Investments held at fair value through profit or loss	942,303		517,339
	------------		------------
Current assets
Receivables	4,978		5,306
Cash and cash equivalents	502		1,396
	------------		------------
	5,480		6,702
	------------		------------
Total assets	947,783		524,041
	-------------		-------------
Current liabilities
Payables	(3,891)		(5,182)
Bank overdrafts	(80,919)		(8,182)
	------------		------------
	(84,810)		(13,364)
	------------		------------
Net assets	862,973		510,677
	=======		=======
Equity attributable to equity shareholders
Called up share capital	6,412		4,363
Share premium account	-		120,364
Special distributable reserve	362,395		-
Special undistributable reserve	42,516		-
Capital redemption reserve	14,062		14,062
Retained earnings:
Other capital reserves	415,306		338,863
Revenue reserve	22,282		33,025
	------------		------------
Total equity	862,973		510,677
	=======		=======
Net asset value per ordinary share - basic and diluted	252.42p		224.45p
	=======		=======

Cash Flow Statement
	Year ended 30 June 2026  £'000		Year ended 30 June 2025  £'000
Operating activities
Profit before taxation	113,571		91,608
Add back: interest payable	1,867		3,489
Less: Gains on investments held at fair value through profit or loss	(101,197)		(82,027)
Sales of investments held at fair value through profit or loss	535,888		409,662
Purchases of investments held at fair value through profit or loss	(622,269)		(312,211)
Decrease in prepayments and accrued income	480		1,010
Decrease in amounts due from brokers	131		1,459
(Decrease)/ increase in accruals and deferred income	(1,508)		1,953
Net movement in cash realisation pool	-		1,861
(Decrease)/ increase in amounts due to brokers	(638)		622
	-----------		-----------
Contribution from JHI towards ESCT/EAT combination	1,091		-
Transfer of assets in respect of the tender offer - cash exit	-		107,486
Capital cost recoverable	9		86
Accrued costs on tender offer	17		(950)
Debtor for shareholder tender cancelled	-		34
	-----------		-----------
Net cash (outflow)/ inflow from operating activities before interest and taxation1	(72,558)		224,082
	-----------		-----------
Interest paid	(1,653)		(3,893)
Taxation on investment income	(1,277)		(1,739)
	-----------		-----------
Net cash (outflow) /inflow from operating activities	(75,488)		218,450
	-----------		-----------
Financing activities
Equity dividends paid (net of refund of unclaimed dividends)	(27,395)		(18,898)
Buyback of shares for cancellation	-		(4,720)
Buyback of shares for treasury	(36,202)		(1,685)
Net drawdown/ (repayment) of bank overdraft	74,645		(81,214)
Costs associated with the ESCT/EAT combination	(1,281)		-
Net cash acquired and received following ESCT/EAT combination	64,827		-
Tender offer - cash exit	-		(108,455)
Tender offer - in specie exit	-		(3)
Tender offer - costs	-		(2,311)
	-----------		-----------
Net cash raised from/(used in) financing activities	74,594		(217,286)
	-----------		-----------
(Decrease)/ increase in cash and cash equivalents	(894)		1,164
Cash and cash equivalents at the start of the year	1,396		232
	-----------		-----------
Cash and cash equivalents at the end of the year	502		1,396
	-----------		-----------
Comprising:
Cash at bank	502		1,396
	-----------		-----------
	502		1,396
	======		======
1.     Cash inflow from dividends was £20,354,000 (2025: £21,779,000) and cash inflow from interest was £72,000 (2025: £11,000).

Notes to the financial statements 1.   Accounting policies Basis of preparation The European Smaller Companies Trust PLC is a company incorporated in England and Wales and subject to the provisions of the Companies Act 2006.  The Company is domiciled in the United Kingdom and is an HMRC approved investment trust. The financial statements for the year ended 30 June 2026 have been prepared in accordance with UK adopted International Accounting Standards. These comprise standards and interpretations approved by the International Accounting Board, together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the IFRS Interpretations Committee that remain in effect, to the extent that IFRSs have been adopted by the UK Endorsement Board. The financial statements have been prepared on a going concern basis. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice ('SORP') for investment companies issued by the AIC in July 2022, is consistent with the requirements of UK adopted International Accounting Standards, the directors have sought to prepare the financial statements on a basis consistent with the recommendations of the SORP.                    The financial position of the Company is described in the Strategic report in the Annual Report 2026. The annual report includes the Company's policies and process for managing its capital; its financial risk management objectives; and details of financial instruments and exposure to credit risk and liquidity risk. In preparing these financial statements the directors have considered the impact of climate change risk and concluded there was no impact as the investments are valued based on closing bid prices in active markets and thereby reflect participants' views of climate change risk.     2.   Going concern The directors have determined that it is appropriate to prepare the financial statements on a going concern basis and have concluded that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. In coming to this conclusion, the directors have considered the nature of the portfolio, being that the securities held are readily realisable, the size and covenants of the Company's bank overdraft and the strength of its distributable reserves. As part of their usual assessment of risks facing the Company, the directors considered the macro-economic and geopolitical environment, as well as the possible impact of climate change risk on the value of the portfolio. The directors have concluded that the Company is able to meet its financial obligations, including the repayment of the bank overdraft, as they fall due for a period of at least twelve months from the date of this report, being 29 September 2027.
3.   a) Investment income
									2026 £'000						2025 '000
UK dividend income from listed investments									787						850
Overseas dividend income from listed investments									19,254						19,773
Stock dividends from listed investments									25						-
									-----------						-----------
									20,066						20,623
All overseas dividend income is derived from investments in Continental Europe.									======						======
b) Other income
Bank interest									27						57
Interest received on withholding tax refund									25						22
									-----						-----
									52						79
									===						===
4.  Management and performance fees
			2026						2025
	Revenue  return  £'000		Capital  return  £'000	Total  return  £'000		Revenue  return  £'000			Capital  return  £'000						Total  return  £'000
Management fee	750		3,002	3,752		813			3,252						4,065
Performance fee	-		743	743					1,778						1,778
	---------		---------	---------		---------			---------						---------
	750		3,745	4,495		813			5,030						5,843
	=====		=====	=====		=====			=====						=====
5.  Return per ordinary share The return per ordinary share figure is based on the net profit for the year of £112,577,000 (2025: profit £90,057,000) and on the weighted average number of ordinary shares in issue during the year of 314,297,405 (2025: 374,911,120).  The return per ordinary share figure detailed above can be further analysed between revenue and capital, as below. The Company has no securities in issue that could dilute the return per ordinary share. Therefore, the basic and diluted return per ordinary share are the same (2025: same).
						2026 £'000				2025 £'000
Net revenue profit						16,652				15,897
Net capital profit						95,925				74,160
						------------				------------
Net profit						112,577				90,057
						=======				=======
Weighted average number of ordinary shares in issue during the year						314,297,405				374,911,120
						2026 Pence				2025 Pence
Revenue return per ordinary share						5.30				4.24
Capital return per ordinary share						30.52				19.78
						-----------				-----------
Total return per ordinary share						35.82				24.02
						======				======
6.  Net asset value per ordinary share The NAV per ordinary share is based on the net assets attributable to the ordinary shares of £862,973,000 (2025: £510,677,000) and on the 341,883,299 ordinary shares in issue at 30 June 2026 (2025: 227,524,156). The Company has no securities in issue that could dilute the NAV per ordinary share (2025: same). The NAV per ordinary share at 30 June 2026 was 252.42p (2025: 224.45p). The movements during the year in assets attributable to the ordinary shares were as follows:
						2026 £'000						2025 £'000
Net assets attributable to ordinary shares at start of year						510,677						798,594
Profit for the year						112,577						90,057
Dividends paid in the year						(27,395)						(18,898)
Buyback of shares for cancellation						-						(4,720)
Buyback of shares for treasury						(36,753)						(1,848)
Tender offer - reduction in nominal value of share capital						-						(1,803)
Tender offer - balance of payment to shareholders						-						(350,791)
Tender offer - accrual adjustment						17						-
Capital costs recoverable						9						86
Issue of shares on ESCT/EAT combination						304,121						-
Issue costs in respect of the ESCT/EAT combination						(1,371)						-
Contribution from JHI towards ESCT/EAT combination						1,091						-
						------------						------------
Net assets at 30 June						862,973						510,677
						=======						=======
7.   Dividends
						2026 £'000						2025 £'000
Amounts recognised as distributions to equity holders in the year:
Second interim dividend of 3.45p per ordinary share for the year ended 30 June 2025 (2025: final dividend of 3.35p)						7,849						13,193
First interim dividend of 1.45p per ordinary share for ye year ended 30 June 20252						-						5,710
Interim dividend for the second quarter of 2.81p per ordinary share for the year ended 30 June 2026						9,861						-
Interim dividend for the third quarter of 2.81p per ordinary share for the year ended 30 June 2026						9,685						-
Unclaimed dividends from prior years						-						(5)
						----------						---------
						27,395						18,898
						======						=====
The second interim dividend of 3.45p per ordinary share in respect of the year ended 30 June 2025 was paid on 8 October 2025 prior to the combination with EAT and in lieu of the final dividend, to shareholders on the Register of Members at the close of business on 19 September 2025. The total dividend paid amounted to £7,849,000. For the year ended 30 June 2026 the Company has declared and paid the interim dividends for the second and third quarters, under the new dividend policy adopted on completion of the combination with EAT. The policy targets a total dividend of at least 5% of the NAV per share as at the end of the preceding financial year. The interim dividend for the fourth quarter in the amount of 2.81p per share for the year ended 30 June 2026, which was declared on 21 July 2026, has not been included as a liability in these financial statements. Under UK adopted International Accounting Standards, interim dividends are not recognised until paid. In previous years, under the same standards, final dividends are not recognised until approved by shareholders. The total dividends payable in respect of the financial year which form the basis of the test under section 1158 are set out below:
						2026 £'000					2025 £'000
Revenue available for distribution by way of dividends for the year						16,652					15,897
First interim dividend of 1.45p ordinary share for the year ended 30 June 2025						-					(5,710)
Second interim dividend of 3.45p per ordinary share for the year ended 30 June 2025						-					(7,849)
Interim dividend for the second quarter of 2.81p per ordinary share for the year ended 30 June 2026						(9,861)					-
Interim dividend for the third quarter of 2.81p per ordinary share for the year ended 30 June 2026						(9,685)					-
Interim dividend for the fourth quarter of 2.81p per ordinary share for the year ended 30 June 2026 (based on 341,250,555 shares in issue at 30 July 2026 and eligible to receive the dividend)						(9,589)					-
						-----------					--------
Transfer (from)/ to Revenue reserve						(12,483)					2,337
						=======					=====
The Company had no undistributed revenue for the year (2025: 11.3%).
8.   Called up share capital
		Shares entitled to dividend			Shares held in treasury			Total shares in issue						Nominal value of shares in issue £'000
Allotted, issued and fully paid
Issued ordinary shares of 1.5625p each
At 1 July 2025		227,524,156			51,722,048			279,246,204						4,363
Buyback of shares for treasury		(16,769,698)			16,769,698			-						-
Issue of shares on ESCT/EAT combination		131,128,841			-			131,128,841						2,049
		------------------			---------------			------------------						----------
At 30 June 2026		341,883,299			68,491,746			410,375,045						6,412
		==========			=========			===========						======
Allotted, issued and fully paid
Issued ordinary shares of 1.5625p each
At 1 July 2024		397,287,598			-			397,287,598						6,208
Buyback of shares for cancellation		(2,655,272)			-			(2,655,272)						(42)
Buyback of shares for treasury		(1,011,095)			1,011,095			-						-
Tender offer		(166,097,075)			50,710,953			(115,386,122)						(1,083)
		-------------------			-------------------			-------------------						-------------------
At 30 June 2025		227,524,156			51,722,048			279,246,204						4,363
		===========			===========			===========						===========
During the year the Company repurchased 16,769,698 ordinary shares for treasury (2025: 1,011,095), at a total cost of £36,753,000 (2025: £1,848,000) and no ordinary shares were repurchased for cancellation (2025: 2,655,272 shares at a cost of £4,720,000). Since the year end and as at 28 September 2026, being the latest practicable date before publication, the Company has bought back 2,865,458 shares for holding in treasury at a cost of £6,780,000.
9.   Tender offer On 15 April 2025, the Company announced a tender offer to buy back up to 42.5% of the ordinary share capital and eligible shareholders were given the option to continue investing or exit the Company, selecting either a cash exit option or in-specie consideration option. A total of 166,097,075 ordinary shares were tendered, which represented 42.2% of ordinary shares in issue. Shareholders holding 50,710,953 ordinary shares elected for the cash exit option and shareholders holding 115,386,122 ordinary shares elected for the in-specie consideration option. Accordingly, the Company's assets were allocated into three pools representing those shareholders wishing to continue investing (the ongoing pool), those shareholders wishing to sell their shares back to the Company and receive cash (cash exit pool) and those shareholders wishing to sell their shares back to the Company and receive the in-specie transfer (in-specie consideration option pool). A pro-rata portion of the Company's portfolio was realised, with the proceeds returned to those shareholders electing for the cash exit option. Shareholders electing for the in-specie consideration option, received a pro-rata portion of the Company's portfolio. The net movement in the cash realisation pool shown below is the movement in fair value of the pool between the calculation date of 19 May 2025 and the payment date of 26 June 2025:
				Tender			pools
				In specie £'000			Cash exit £'000						Total £'000
Investments allocated to tender pools				242,770			107,486						350,256
Cash				3			3						6
Cash to cover expenses at pool allocation date				2,171			195						2,366
				-------------			-------------						-------------
				244,944			107,684						352,628
Net movement in cash realisation pool				-			1,861						1,861
Costs of tender				(2,171)			(1,090)						(3,261)
				-------------			-------------						-------------
Tender calculations				242,773			108,455						351,288
Less shareholder tender withdrawn				-			(34)						(34)
				------------			------------						------------
Tender payments to shareholders				242,773			108,421						351,194
				=======			=======						=======
Actual costs of tender paid in the year to 30 June 2026 were £17,000 lower than previously accrued. This movement has been reflected in the Statement of Changes in Equity.
10.  2026 Financial information The figures and financial information for the year ended 30 June 2026 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts. The Company's annual financial statements for the year to 30 June 2026 have been audited but have not yet been delivered to the Registrar of Companies. The independent auditor's report to the members on the 2025 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006. 11. 2025 Financial information The figures and financial information for the year ended 30 June 2025 are compiled from an extract of the published financial statements for that year and do not constitute statutory accounts. Those financial statements have been delivered to the Registrar of Companies and included the independent auditor's report to the members which was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.
12. Annual Report The Annual Report 2026 includes the Notice of Annual General Meeting. The annual report is being published in hard copy format and will be sent to shareholders electing to receive these during the course of October 2026.  An electronic copy will shortly be available to view and download from the Company's website: www.europeansmallercompaniestrust.com. Thereafter hard copies will be available from the corporate secretary at the Company's registered office: 201 Bishopsgate, London EC2M 3AE. The fund manager discusses the financial results in a video available at www.europeansmallercompaniestrust.com. The Annual Report 2026, including the Notice of Annual General Meeting and together with the form of proxy, will shortly be uploaded to the Financial Conduct Authority's National Storage Mechanism and will be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
13. Annual General Meeting ('AGM') The AGM will be held on Monday 16 November 2026 at 12.30 pm. The Board invites shareholders to attend the meeting at the registered office at 201 Bishopsgate, London EC2M 3AE, or via video conference. Only shareholders present in person or by proxy will be able to participate in the vote. The fund manager will present his review of the year and thoughts on the future.  He and the directors will be pleased to answer any questions you may have. Instructions on attending the meeting in person or virtually, and details of resolutions to be put to the AGM, are included in the Notice of AGM in the annual report and are available at www.europeansmallercompaniestrust.com. If shareholders would like to submit any questions in advance of the AGM, they are welcome to send these to the corporate secretary at [e-mail].
14. General information Company Status The European Smaller Companies Trust PLC is registered in England and Wales, no. 2520734, has its registered office at 201 Bishopsgate, London EC2M 3AE and is listed on the London Stock Exchange.  SEDOL/ISIN:  BMCF868/GB00BMCF8689 London Stock Exchange (TIDM) code:  ESCT Global Intermediary Identification Number (GIIN):  JX9KYH.99999.SL.826 Legal Entity Identifier (LEI):  213800N1B1HCQG2W4V90 Directors and Secretary The directors of the Company are James Williams (Chairman), Daniel Burgess (Chairman of the Audit Committee), Ann Grevelius (Senior Independent Director and Chair of the Management Engagement Committee), Kate Cornish-Bowden, Nadia Meier-Kirner and Stuart Paterson. The Corporate Secretary is Janus Henderson Secretarial Services UK Limited. Website Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at www.europeansmallercompaniestrust.com.

For further information please contact:
Ollie Beckett Fund Manager The European Smaller Companies Trust PLC Telephone: [phone]
Dan Howe Head of Investment Trusts Janus Henderson Investors Telephone: [phone]	Harriet Hall PR Director, Investment Trusts Janus Henderson Investors Telephone: [phone]
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) are incorporated into, or form part of, this announcement.

 

END