Half-year Report

Witan Investment Trust PLC

15 August 2023

 

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

SUMMARY

•     Witan's NAV total return was +8.7%, 1.5% ahead of our composite global benchmark's total return of +7.2%

•     The discount widened, although by less than the AIC Global sector average; 4.2% of our shares were bought into treasury, at an average discount of 8.5%

•     A second interim quarterly dividend of 1.45 pence per ordinary share will be paid in September. Total dividends paid in respect of the period are 2.90 pence per ordinary share (2022: 2.80 pence)

•     Our revenue earnings for the first half rose 16% on the corresponding period of 2022

Key data(4)
	(Unaudited) 30 June 2023	(Audited) 31 December 2022
Share price	226.5p	221.5p
Net asset value per ordinary share (debt at fair value) (3)	251.4p	234.1p
Discount (NAV including income, debt at fair value) (3)	9.9%	5.4%
	(Unaudited) 30 June 2023	(Unaudited) 30 June 2022
Dividend per share	2.90p	2.80p

Total return performance
	6 months  return %	1 year  return %	5 years return %	10 years return %
Share price total return (1)(3)	3.6	12.8	18.2	143.2
Net asset value total return (1)(3)	8.7	13.9	29.3	140.8
Witan benchmark (1)	7.2	11.2	46.3	147.9
MSCI ACWI Index(2)	8.1	11.9	57.1	190.7
MSCI UK IMI Index(2)	2.3	7.0	14.5	73.4

(1)	Source: Witan/Morningstar.
(2)	Source: Witan/Morningstar.  See also MSCI for conditions of use (www.msci.com).
(3)	Alternative performance measures The financial statements (on pages 10 to 18) set out the required statutory reporting measures of the Company's financial performance.  In addition, the Board assesses the Company's performance against a range of criteria which are viewed as particularly relevant for investment trusts.  Definition of the terms used and the Witan benchmark are set out in the Annual Report.
(4)	30 June 2023 data is unaudited.

Page 2 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Percentage of total funds as at 30 June 2023*	%
North America	38
Europe	21
United Kingdom	18
Asia ex Japan	6
Japan	3
Other	2
Unquoted Funds	2
Investment Companies	10

Sector breakdown of the portfolio as at 30 June 2023(5)	%
Industrials	16
Financials	15
Information Technology	12
Healthcare	10
Consumer Staples	10
Consumer Discretionary	8
Communication Services	6
Materials	6
Energy	3
Other	1
Unquoted Funds	2
Investment Companies	10

Company size breakdown of the portfolio as at 30 June 2023(5)	%
Large Cap	69
Mid Cap	14
Small Cap	5
Unquoted Funds	2
Investment Companies	10

(5)	Source: BNP Paribas as at 30 June 2023
*	Figures may not sum due to rounding.

Page 3 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

INTERIM MANAGEMENT REPORT

Investment backdrop and performance

The first half of 2023 saw a degree of relief that earlier forecasts of global recession were not borne out. In combination with disappointment at the slow decline in inflation, this meant interest rates rose higher than expected. Bond markets underestimated inflation's persistence, with yields declining in Q1, then rising in Q2 as forecasts for the level of base rates were recalibrated upwards.

Global equities delivered positive returns in both quarters but from contrasting sources. Europe was the strongest region in Q1, with generally positive returns from most other regions. In the second quarter, returns were almost wholly driven by the US (and, within it, the technology majors) with most other regions (apart from Japan) delivering near zero, or slightly negative, returns. This reflected genuine excitement about the potential of Artificial Intelligence ('AI') to disrupt many established businesses and drive productivity growth, which favoured the US, given its leadership in the key technologies. Elsewhere, weaker returns reflected flagging growth numbers across Europe and disappointment about the lack of follow-through in the Chinese recovery, following its lifting of Covid restrictions in late 2022.

This was a changeable environment for investors to navigate, both in terms of the rotating leadership within equity markets and due to the unfamiliar experience of bonds and cash offering genuine competition to equities, following a decade in which cash and bond income returns were negligible.

Witan's NAV total return was +8.7%, 1.5% ahead of the return of +7.2% from our benchmark. The share price total return was +3.6% (owing to a 4.5% widening of the discount). For perspective, the AIC's Global sector experienced an average +7.1% NAV total return and a 7.5% widening in its discount to NAV.

Manager performance

The full table of the performance of our incumbent managers as at 30 June is shown on the following page. Four of our six core managers outperformed during the period, notably the global managers with greater exposure to the US and growth companies. In particular, Jennison, whose style had been a significant handicap in 2022, delivered a total return of almost 25% in the period, 17% ahead of their MSCI World benchmark. The UK and Emerging Markets were relatively weak areas but Artemis and GQG respectively outperformed them by a sufficient margin to match or exceed Witan's benchmark return of 7.2%. Amongst the global managers, Lansdowne's relatively cyclical portfolio was strongly ahead of the benchmark for most of the period, although the more cautious market mood in Q2 meant that their 6.6% return was 1.5% behind their benchmark at the end of June.

Page 4 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

INTERIM MANAGEMENT REPORT continued

Investment managers:  Assets under management and investment performance as at 30 June 2023

Investment manager	Mandate	Appoint-ment date	Witan assets managed as at 30.06.23		Performance in 2023 (%)		Annualised performance since appointment(2) (%)
			£m	(%)(1)	Manager	Benchmark	Manager	Benchmark
CORE
Jennison	Global	31.08.20	134.6	7.3	24.8	8.1	2.2	9.9
Lansdowne	Global	14.12.12	320.3	17.5	6.6	8.1	13.0	12.0
Lindsell Train	Global	31.12.19	303.5	16.5	6.0	8.1	5.0	9.1
Veritas	Global	11.11.10	319.7	17.4	10.1	8.1	12.0	10.8
WCM	Global	31.08.20	208.7	11.4	11.2	8.1	5.3	9.9
Artemis	UK	06.05.08	84.6	4.6	7.7	2.3	8.1	5.5
SPECIALIST
GMO	Climate Change	05.06.19	113.0	6.2	0.9	8.1	15.1	10.2
GQG	Emerging Markets	16.02.17	92.4	5.0	9.0	(0.6)	7.9	3.3
Unquoted Growth	Specialist Funds	02.07.21	29.8	1.6	(8.8)	8.1	(11.6)	3.3
Witan Direct Holdings	Specialist Funds	19.03.10	229.4	12.5	(0.3)	7.2	9.2	8.9

Notes:

1	Amount of percentage of Witan's investments managed, excluding centrally managed cash.
2	The percentages are annualised where the date of appointment was more than one year ago.

The two principal laggards were the directly managed portfolio of investment companies (-0.3%) and the GMO Climate Change fund (+0.9%). The former was held back by poor sentiment towards some of the specialist assets held, notably life sciences, mining and sustainable energy. Although operational reports were mostly positive, adverse sentiment and wider discounts meant these assets delivered negative returns for investors. Our listed private equity investments, by contrast, delivered positive returns (despite negative sentiment towards the sector) and we were able to establish a new holding (HarbourVest Global Private Equity) at a near 50% discount to NAV. The GMO Climate Change portfolio also marked time, lagging the general rise in markets (after performing well in 2022). Its exposure to the alternative energy and commodities sectors was a drawback, in an environment of declining energy prices and concern that the Chinese economy might be stalling.

Environmental, Social and Governance policy ('ESG')

Our responsible investment policy is set out in detail in Witan's 2022 Annual Report. In summary, we aim to make well-informed investment decisions that ensure that the pursuit of prosperity for our shareholders is not achieved at the expense of the environment or the wellbeing of society. We believe companies which disregard this will fail to deliver sustainable returns to shareholders because, far from there being a conflict between good returns and responsible investment, managing assets in line with these principles is key to achieving good returns.

Page 5 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

INTERIM MANAGEMENT REPORT continued

This year, we have made progress on our Net Zero pathway and have set initial Net Zero Asset Managers' Initiative targets. The interim target (a 50% reduction in portfolio carbon emissions intensity by 2030) applies to Witan's Core portfolio, which makes up 75% of our assets. The baseline year for this target was 2019, when estimated portfolio emissions were 218 tons of CO₂ per $1m sales. We are already well on the way to achieving this goal, with current emissions running at 122.5 tons of CO₂ per $1m sales vs a 2030 target of 109 tons of CO₂ per $1m sales. Ultimately, hitting Net Zero by 2050 is the goal, which will require significant investment in carbon-saving technology and infrastructure by global economies. This investment will provide opportunities for those companies which are well-placed to benefit from efforts to mitigate or adapt to climate change. For this reason, we have invested a significant proportion of Witan's specialist portfolio in companies within the climate change, sustainable energy and infrastructure sectors (amounting in total to c. 10% of Witan's whole portfolio).

Investment income and expenses

Revenue earnings per share for the period were 2.90 pence per share, a rise of 16% from the level of 2.51 pence seen in the first half of 2022. The comparison between early 2023 and early 2022 may flatter the position but we nonetheless expect revenue earnings to continue to show recovery from the pandemic setback.

General expenses were little changed at £2.9m. Investment management expenses declined 18% to £3.5m, owing to lower asset levels than in the first half of 2022. First half total expenses of £6.4m were down 11% on the comparative 2022 figure of £7.2m. Finance costs rose £1.9m to £4.7m, due to a rise in short-term borrowing costs. We continue to benefit from the majority of our borrowings having a fixed rate averaging under 3%. The ongoing charges figure ('OCF') for the six months was 0.43% (2022: 0.42%). The OCF for the whole of 2022 was 0.77%.

Dividend

As already noted, the Company's revenue earnings per share in the first half of 2023 (2.90 pence) have shown a further recovery compared with the same period of 2022 (2.51 pence). The Company has increased its dividend every year since 1974 (a 48-year record of increases), recognising the importance for investors of a reliable and growing income. The Board's policy remains to grow the dividend each year and the full year's dividend for 2023 is expected to show another year of growth.

The Board has stated its willingness to continue to smooth dividend pay-outs using retained revenue reserves, which amounted to £31.3m at the start of 2023 (after payment of the fourth interim dividend in respect of 2022).

A second interim dividend of 1.45 pence per ordinary share (2022: 1.40 pence) will be paid on 15 September 2023, for which the ex-dividend date will be 24 August 2023. This dividend is one quarter of the total paid in respect of 2022 (5.80 pence per share) and takes the dividends paid in respect of the first half of 2023 to 2.90 pence (2022: 2.80 pence).

Page 6 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

INTERIM MANAGEMENT REPORT continued

Gearing

The Company's gearing has been maintained in a relatively high range of 13-15% this year. This has been helpful to performance, given the rise in equity markets. The Company has long-term borrowings of £155m with a blended interest rate of 3%, fixed for an average of 25 years. This provides a very low hurdle for investment of these funds to boost shareholder returns in the future. In addition, the Company has a £125m short-term variable rate facility (expandable to £150m), of which £104m was drawn at the period end. The interest costs of this have risen significantly given the increase in bank base rates but balances are repayable at will when not required for investment.

Discount and buybacks

One of the Company's key performance indicators is for its shares to trade at a sustainable low discount or a premium to NAV, subject to market circumstances. This has been difficult to achieve in 2020-23, given the successive shocks of the pandemic, rising inflation, higher interest rates and worries about recession, all of which have subdued demand for equity investments. Although markets generally rose during the first half of 2023, investors appeared wary of committing additional funds, given the prevailing uncertainties. Our discount, having ended 2022 at 5.4%, was 9.9% at the end of June 2023. To put this into context, the discount on the AIC's Global Growth sector widened from 6.8% to 14.3% over the same period, so we were less affected than many others.

The Company has been active (in absolute terms and relative to its peers) in buying back shares, buying 28.6m shares (4.2% of the total) into treasury in the period, at an average discount of 8.5%. This added £6.0m to the net asset value which more than offset the Company's investment management costs for the period.

The Company remains cognisant of the benefit to shareholders from buying back shares, taking account of prevailing market conditions, the level of the discount and the impact on the NAV per share. The Company will only issue shares at a premium to NAV.

Outlook

So far in 2023, equity markets have taken encouragement from a more positive growth environment, weathering the consequence that central banks have had to tighten monetary policy more than expected, owing to the resilience of inflation. Headline inflation (affected by 2022's rises in energy costs dropping out) has peaked but improvement at the underlying level has been more elusive.

There are several plausible reasons (including the prevalence of fixed-rate mortgages, US fiscal easing and consumer savings built up during the pandemic) why higher rates have taken longer to affect economic growth than in the past. However, central banks who lost credibility in 2022 by failing to anticipate the inflationary surge may now be oversensitive to the slow progress in reining it back and risk overestimating its persistence. If they raise rates sufficiently to accelerate the fall in inflation, there is a risk of overkill and having to reverse course in 2024.

Page 7 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

INTERIM MANAGEMENT REPORT continued

The recent tightening in conditions (as bond yields have risen sharply towards the highest levels for over 10 years) seems likely to have a further dampening effect on growth and inflation in coming months. Whether policy patience or overreaction wins the day is not currently clear. However, given the burden of debt in many economies, high rates are likely to prove unsustainable - a combination of economic growth and moderate inflation (possibly higher than official 2% targets) is likely to prove necessary to reduce debts as a proportion of the economy's output. So, despite legitimate concerns that inflation has so far failed to respond as hoped, a sustained plateau of relatively high rates may prove more effective than a spike followed by a collapse.

Leaving aside the preoccupation with timing the peak in rates and the trough for economies, in the medium-term enormous sums have been committed to mitigating and adapting to the effects of climate change, improving the security of supply chains and increasing spending on military defence. Since these plans are viewed as social (and economic) priorities, there will be political pressure to create the conditions to be able to fund them.  This could include pressing for tolerance of the pace at which inflation converges with target, or justifying additional borrowing where it is linked to long-term investment plans.

As we approach the peak in rates worldwide and look towards better long-term growth prospects in 2024 and beyond, Witan's managers will continue to select companies with sound business strategies, resilient finances, and good management, on the basis that companies that grow the fundamental value of their business will create sustainable returns for shareholders.

For and on behalf of the Board

Andrew Ross

Chairman

14 August 2023

Page 8 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

REGULATORY DISCLOSURES

Principal risks and uncertainties

The principal risks and uncertainties associated with the Company's business can be divided into various areas:

·    market and investment portfolio (including political and macro-economic topics such as inflation, military conflicts, trade wars and pandemics);

·    operational and cyber;

·    compliance and regulatory change;

·    accounting, taxation and legal;

·    liquidity; and

·    environmental, social and governance factors.

Information on these risks and other risks is given in the Strategic Report and in the Notes to the Financial Statements in the Company's Annual Report for the year ended 31 December 2022.

In the view of the Board, these principal risks and uncertainties are applicable to the remaining six months of the financial year, as they were to the six months under review.

Directors' responsibility statement

The directors confirm that, to the best of their knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34;

(b) the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (an indication of important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the financial year); and

(c) the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

For and on behalf of the Board

Andrew Ross

Chairman

14 August 2023

Page 9 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

REGULATORY DISCLOSURES continued

Going concern

The assets of the Company consist mainly of securities that are readily realisable and, accordingly, the Company has adequate financial resources to continue in operational existence for at least the next 12 months.

The Company has at all times traded, and remains, well clear of all financial covenants on its borrowings (which are detailed in note 13 of its 2022 Annual Report).

Therefore, the Board has determined that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. In reviewing the position as at the date of this report, the Board has considered the guidance on this matter issued by the Financial Reporting Council.

Related party transactions

During the first six months of the year, no transactions with related parties have taken place which have materially affected the financial position or performance of the Company. Details of related party transactions during 2022 are contained in the Company's Annual Report for the year ended 31 December 2022.

Page 10 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Consolidated Statement of Comprehensive Income

	(Unaudited) Half year ended 30 June 2023			(Unaudited) Half year ended 30 June 2022			(Audited) Year ended 31 December 2022
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Investment income	24,377	-	24,377	23,684	-	23,684	43,605	-	43,605
Other income	649	-	649	158	-	158	601	-	601
Gains/(losses) on investments held at fair value through profit or loss (Note 2)	-	111,398	111,398	-	(341,325)	(341,325)	-	(303,607)	(303,607)
Foreign exchange (losses)/gains on cash and cash equivalents	-	(915)	(915)	-	966	966	-	87	87
	----------	----------	-----------	---------	----------	-----------	---------	-----------	-----------
Total income	25,026	110,483	135,509	23,842	(340,359)	(316,517)	44,206	(303,520)	(259,314)
Expenses
Management and performance fees	(875)	(2,626)	(3,501)	(1,066)	(3,197)	(4,263)	(1,918)	(5,754)	(7,672)
Other expenses	(2,874)	(58)	(2,932)	(2,875)	(51)	(2,926)	(5,384)	(101)	(5,485)
	----------	----------	----------	---------	----------	-----------	---------	-----------	-----------
Profit/(loss) before finance costs and taxation	21,277	107,799	129,076	19,901	(343,607)	(323,706)	36,904	(309,375)	(272,471)
Finance costs	(1,200)	(3,471)	(4,671)	(704)	(2,109)	(2,813)	(1,637)	(4,657)	(6,294)
	----------	----------	-----------	---------	----------	-----------	---------	-----------	-----------
Profit/(loss) before taxation	20,077	104,328	124,405	19,197	(345,716)	(326,519)	35,267	(314,032)	(278,765)
Taxation	(747)	(437)	(1,184)	(1,004)	229	(775)	(1,451)	(338)	(1,789)
	----------	----------	-----------	---------	----------	-----------	---------	-----------	-----------
Profit/(loss) attributable to equity shareholders of the parent company	19,330	103,891	123,221	18,193	(345,487)	(327,294)	33,816	(314,370)	(280,554)
	======	======	======	=====	======	======	=====	======	======
Earnings per ordinary share (Note 3)	2.90p	15.61p	18.51p	2.51p	(47.75)p	(45.24)p	4.78p	(44.43)p	(39.65)p
	=====	======	======	=====	======	======	=====	======	======

The total column of this statement represents the Group's 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 Group does not have any other comprehensive income and hence the total profit/(loss), as disclosed above, is the same as the Group's total comprehensive income. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of Witan Investment Trust plc, the parent company. There are no non-controlling interests.

Page 11 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Consolidated Statement of Changes in Equity

	(Unaudited) Half year ended 30 June 2023
	Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 31 December 2022	50,018	99,251	46,498	1,303,740	42,302	1,541,809
Total comprehensive income:  Profit for the period	-	-	-	103,891	19,330	123,221
Transactions with owners, recorded directly to equity:   Ordinary dividends paid	-	-	-	-	(20,296)	(20,296)
Buybacks of ordinary shares (held in     treasury) (Note 6)	-	-	-	(65,005)	-	(65,005)
	-----------	-----------	-------------	-------------	-----------	-------------
Total equity at 30 June 2023	50,018	99,251	46,498	1,342,626	41,336	1,579,729
	=======	=======	========	========	=======	========

	(Unaudited) Half year ended 30 June 2022
	Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 31 December 2021	50,018	99,251	46,498	1,747,379	48,895	1,992,041
Total comprehensive income:   (Loss)/profit for the period	-	-	-	(345,487)	18,193	(327,294)
Transactions with owners, recorded directly to equity:   Ordinary dividends paid	-	-	-	-	(21,150)	(21,150)
Buyback of ordinary shares (held in     treasury) (Note 6)	-	-	-	(68,960)	-	(68,960)
	-----------	-----------	-------------	-------------	-----------	-------------
Total equity at 30 June 2022	50,018	99,251	46,498	1,332,932	45,938	1,574,637
	=======	=======	========	========	=======	========

	(Audited) Year ended 31 December 2022
	Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 31 December 2021	50,018	99,251	46,498	1,747,379	48,895	1,992,041
Total comprehensive income:   (Loss)/profit for the year	-	-	-	(314,370)	33,816	(280,554)
Transactions with owners, recorded directly to equity:   Ordinary dividends paid	-	-	-	-	(40,409)	(40,409)
Buyback of ordinary shares (held in     treasury) (Note 6)	-	-	-	(129,269)	-	(129,269)
	-----------	-----------	-------------	-------------	-----------	-------------
Total equity at 31 December 2022	50,018	99,251	46,498	1,303,740	42,302	1,541,809
	=======	=======	========	========	=======	========

Page 12 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Consolidated Balance Sheet

	(Unaudited) 30 June  2023 £'000	(Unaudited) 30 June 2022 £'000	(Audited) 31 December 2022 £'000
Non current assets
Investments at fair value through profit or loss	1,820,781	1,771,175	1,760,824
Right-of-use asset: property	161	215	196
	---------------	---------------	-------------
	1,820,942	1,771,390	1,761,020
Current assets
Other receivables	6,122	14,607	4,661
Cash and cash equivalents	20,753	38,493	36,352
	---------------	---------------	-------------
	26,875	53,100	41,013
	---------------	---------------	-------------
Total assets	1,847,817	1,824,490	1,802,033
Current liabilities
Other payables	(6,340)	(14,599)	(6,242)
Bank loans	(104,000)	(78,000)	(96,500)
	---------------	---------------	-------------
	(110,340)	(92,599)	(102,742)
	---------------	---------------	-------------
Total assets less current liabilities	1,737,477	1,731,891	1,699,291
	---------------	---------------	-------------
Non current liabilities
Other payables	(157)	(231)	(218)
Deferred tax liability on Indian capital gains	(984)	(441)	(667)
Borrowings:
Secured debt (Note 5)	(154,052)	(154,027)	(154,042)
3.4 per cent. cumulative preference shares of £1	(2,055)	(2,055)	(2,055)
2.7 per cent. cumulative preference shares of £1	(500)	(500)	(500)
	---------------	---------------	-------------
	(157,748)	(157,254)	(157,482)
	---------------	---------------	-------------
Net assets	1,579,729	1,574,637	1,541,809
	=========	=========	========
Equity attributable to equity holders
Ordinary share capital (Note 6)	50,018	50,018	50,018
Share premium account	99,251	99,251	99,251
Capital redemption reserve	46,498	46,498	46,498
Retained earnings:
Other capital reserves	1,342,626	1,332,932	1,303,740
Revenue reserve	41,336	45,938	42,302
	---------------	---------------	-------------
Total equity	1,579,729	1,574,637	1,541,809
	=========	=========	========
Net asset value per ordinary share (Note 7)	242.56p	222.64p	226.80p
	=========	=========	========

Page 13 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Consolidated Cash Flow Statement

	(Unaudited) 30 June  2023	(Unaudited) 30 June 2022	(Audited) 31 December 2022
	£'000	£'000	£'000
Cash flows from operating activities
Dividend income received	21,985	21,825	42,739
Interest received	532	17	299
Other income received	121	141	646
Operating expenses paid	(7,053)	(6,584)	(14,095)
Taxation on overseas income	(917)	(1,137)	(1,870)
Taxation recovered	2,806	2,379	2,640
	-------------	-------------	-------------
Net cash inflow from operating activities	17,474	16,641	30,359
Cash flows from investing activities
Purchases of investments	(307,804)	(423,431)	(797,777)
Sales of investments	357,718	526,540	948,911
Capital gains tax on sales	(120)	(178)	(518)
Settlements of future contracts	717	-	1,001
	-------------	-------------	-------------
Net cash inflow from investing activities	50,511	102,931	151,617
Cash flow from financing activities
Equity dividends paid	(20,298)	(21,116)	(40,409)
Buybacks of ordinary shares	(65,153)	(72,612)	(132,281)
Interest paid	(4,651)	(2,840)	(6,044)
Repayment of lease liability	(67)	(67)	(67)
Drawdown of bank loans	85,250	77,500	195,000
Repayment of bank loans	(77,750)	(97,500)	(196,500)
	-------------	-------------	-------------
Net cash outflow from financing activities	(82,669)	(116,635)	(180,301)
(Decrease)/increase in cash and cash equivalents	(14,684)	2,937	1,675
Cash and cash equivalents at the start of the period	36,352	34,590	34,590
Effect of foreign exchange rate changes	(915)	966	87
	-------------	-------------	-------------
Cash and cash equivalents at the end of the period	20,753	38,493	36,352
	========	========	========

Page 14 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Notes to the Financial Statements

1	Basis of preparation The condensed set of financial statements for the half year ended 30 June 2023 has been prepared on a going concern basis and in accordance with UK-adopted International Accounting Standards ('IAS') and with the Statement of Recommended Practice of Investment Trust Companies and Venture Capital Trusts (the 'SORP') issued by the Association of Investment Companies (the 'AIC') in July 2022, where the SORP is consistent with the requirements of IAS. In assessing going concern, the directors have considered the risks noted in the Annual Report and Notes to the Financial Statements for the year ended 31 December 2022. The directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future and has the ability to meet its financial obligations as they fall due for at least a period of 12 months from the date of this report. For this reason, the Company continues to adopt the going concern basis of accounting in preparing the financial statements. The condensed set of financial statements for the half year ended 30 June 2023 has been prepared on the basis of the accounting policies set out in the audited consolidated financial statements for the year ended 31 December 2022. These condensed financial statements have not been audited or reviewed by the Company's Auditor.
2	Transaction costs The gains/(losses) on investments held at fair value through profit or loss include purchase transaction costs of £471,000 (half year ended 30 June 2022: £726,000; year ended 31 December 2022: £1,315,000) and sale transaction costs of £168,000 (half year ended 30 June 2022: £293,000; year ended 31 December 2022: £524,000). The purchase and sale transaction costs comprise mainly stamp duty and commissions.
3	Earnings per ordinary share The earnings per ordinary share figure is based on the net profit for the half year of £123,221,000 (half year ended 30 June 2022: loss of £327,294,000; year ended 31 December 2022: loss of £280,544,000) and on 665,704,166 ordinary shares (half year ended 30 June 2022: 723,512,428; year ended 31 December 2022: 707,617,951) being the weighted average number of ordinary shares in issue during the period. The earnings 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 earnings per ordinary share are the same.
		(Unaudited) Half year ended 30 June 2023 £'000	(Unaudited) Half year ended 30 June 2022 £'000	(Audited) Year ended 31 December 2022 £'000
	Net revenue profit	19,330	18,193	33,816
	Net capital profit/(loss)	103,891	(345,487)	(314,370)
		--------------	--------------	--------------
	Net total profit/(loss)	123,221	(327,294)	(280,554)
		========	========	========
	Weighted average number of ordinary shares in issue during the period	665,704,166	723,512,428	707,617,951

Page 15 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Notes to the Financial Statements continued

3	Earnings per ordinary share (continued)
		Pence	Pence	Pence
	Revenue earnings per ordinary share	2.90	2.51	4.78
	Capital earnings/(loss) per ordinary share	15.61	(47.75)	(44.43)
		--------------	--------------	--------------
	Total earnings/(loss) per ordinary share	18.51	(45.24)	(39.65)
		========	========	========

4

Interim dividend The directors have declared a second interim dividend of 1.45 pence per ordinary share (2022: 1.40 pence), payable on 15 September 2023 to shareholders registered on 25 August 2023. The shares will be quoted ex-dividend on 24 August 2023. A first interim dividend of 1.45 pence (2022: 1.40 pence) was paid on 9 June 2023.

5	Secured debt
		(Unaudited) 30 June 2023 £'000	(Unaudited) 30 June 2022 £'000	(Audited) 31 December 2022 £'000
	3.29 per cent. secured notes due 2035	20,901	20,894	20,898
	3.47 per cent. secured notes due 2045	53,687	53,679	53,684
	2.39 per cent. secured notes due 2051	49,695	49,689	49,692
	2.74 per cent. secured notes due 2054	29,769	29,765	29,768
		--------------	--------------	--------------
		154,052	154,027	154,042
		========	========	========
6	Ordinary share capital At 30 June 2023 there were 651,268,977 ordinary shares in issue (30 June 2022: 707,268,687; 31 December 2022: 679,823,171) and 349,086,023 shares held in treasury (30 June 2022: 293,086,313; 31 December 2022: 320,531,829).  During the half year ended 30 June 2023, the Company bought back 28,554,194 of its own ordinary shares (half year ended 30 June 2022: 30,707,180; year ended 31 December 2022: 58,152,696). The costs of the share buybacks were £65,005,000 (half year ended 30 June 2022: £68,960,000; year ended 31 December 2022: £129,269,000).
7	Net asset value per ordinary share The net asset value per ordinary share is based on the net assets (valuing prior charges at par) attributable to the equity shareholders of £1,579,729,000 (30 June 2022: £1,574,637,000; 31 December 2022: £1,541,809,000) and on 651,268,977 (30 June 2022: 707,268,687; 31 December 2022: 679,823,171) ordinary shares, being the number of ordinary shares in issue at the period end.
8	Subsidiary undertaking The Company has an investment in the issued ordinary share capital of its wholly owned subsidiary undertaking, Witan Investment Services Limited, which was incorporated on 28 October 2004, is registered in England and Wales, operates in the United Kingdom and is regulated by the Financial Conduct Authority.

Page 16 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Notes to the Financial Statements continued

9	Financial instruments
	Balance Sheet amount versus fair value At the period end, the carrying value of financial assets and financial liabilities approximates their fair value, with the exception of the non current liabilities as detailed below:
	Financial liabilities measured using effective interest method:		Fair value £'000			Balance Sheet amount £'000
	Non current liabilities
	Preference shares		1,300			2,555
	Secured notes		97,965			154,052
			--------------			--------------
			99,265			156,607
			--------------			--------------
	Fair value hierarchy
	The table above analyses recurring fair value measurements for financial liabilities. These fair value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. The different levels are defined as follows: Level 1 financial liabilities: The Company's preference shares are actively traded on a recognised stock exchange. Their fair value has therefore been deemed to be Level 1. Level 3 financial liabilities: The Company's secured notes are not traded on a recognised stock exchange and so the fair value is calculated by using a discount rate which reflects the yield on a UK gilt of similar maturity plus a credit spread of 1.50%. Their fair value has therefore been deemed to be Level 3. The table below analyses fair value measurements for financial assets.
	Financial assets at fair value through profit or loss at 30 June 2023	Level 1 £'000		Level 2 £'000	Level 3 £'000		Total £'000
	Investments including derivatives:
	Equity securities designated at fair value through profit or loss	1,660,899		-	-		1,660,899
	Warrants	-		1	-		1
	Investments in other funds	-		130,043	29,838		159,881
		------------		----------	---------		------------
	Total financial assets carried at fair value	1,660,899		130,044	29,838		1,820,781
		=======		======	=====		=======
	There have been no transfers between levels of the fair value hierarchy during the period.  Transfers between levels of fair value hierarchy are deemed to have occurred at the date of the event or change in circumstances that caused the transfer. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows: Level 1: valued using quoted prices in an active market for identical assets. Level 2: valued by reference to valuation techniques using observable inputs other than quoted prices within Level 1. Level 3: valued by reference to valuation techniques using inputs that are not based on observable market data.

Page 17 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Notes to the Financial Statements continued

	Level 2 Financial assets Level 2 Financial assets refer to investments in GMO Climate Change Fund and a Vanguard FTSE 250 ETF  (December 2022: GMO Climate Change Fund) and warrant holdings in Wulliangye Yibin (December 2022: none). Level 3 A reconciliation of fair value movements within Level 3 is set out below:
	Level 3 Investments at fair value through profit or loss	(Unaudited) Half year ended 30 June 2023 £'000	(Audited) Year ended 31 December 2022  £'000
	Opening balance	32,728	37,774
	Acquisitions	-	-
	Total losses included in the Statement of Comprehensive Income - on assets held at period end	(2,890)	(5,046)
		--------------	--------------
	Closing balance	29,838	32,728
		========	======

The key inputs to unquoted investments (i.e. the holdings in Unquoted Growth Funds with Lindenwood and Lansdowne) included within Level 3 are net asset value statements provided by investee entities, which represent fair value (2022: same).

10

Segment reporting

As detailed in the Company's Annual Report for the year ended 31 December 2022, geographical segments are considered to be the Group's primary reporting segment and business segments the secondary reporting segment. The Group has two business segments: (i) its activity as an investment trust, which is the business of the parent company; and (ii) the provision of alternative investment fund manager, executive and marketing management services, which is the business of the subsidiary, Witan Investment Services Limited, and recorded in the accounts of that company. The investment trust is managed by reference to a geographical benchmark, as set out in the Annual Report ; the geographical allocation of the portfolio, as at 30 June 2023, is set out on page 2. The schedule on page 4 summarises the assets under management and investment performance relating to each investment manager.  This information is updated and reviewed regularly for internal management purposes and is essential for assessing the structure of the overall portfolio and the performance of each investment manager.

Page 18 of 18

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2023

Notes to the Financial Statements continued

10 Segment reporting (continued)
		(Unaudited) Half year ended 30 June 2023			(Unaudited) Half year ended 30 June 2022			(Audited) Year ended 31 December 2022
		Invest-ment trust £'000	Manage-ment services £'000	Total £'000	Invest-ment trust £'000	Manage-ment services £'000	Total £'000	Invest-ment trust £'000	Manage-ment services £'000	Total £'000
External revenue		25,026	-	25,026	23,842	-	23,842	44,206	-	44,206
Other revenue		110,483	-	110,483	(340,359)	-	(340,359)	(303,520)	-	(303,520)
Segment expenses
-Management expenses		(3,501)	-	(3,501)	(4,263)	-	(4,263)	(7,672)	-	(7,672)
-Other expenses		(2,641)	(291)	(2,932)	(2,670)	(256)	(2,926)	(4,971)	(514)	(5,485)
-Finance costs		(4,671)	-	(4,671)	(2,813)	-	(2,813)	(6,294)	-	(6,294)
Segment profit /(loss) before taxation		124,696	(291)	124,405	(326,263)	(256)	(326,519)	(278,251)	(514)	(278,765)
Segment assets		1,578,521	1,217	1,579,729	1,573,486	1,151	1,574,637	1,540,618	1,191	1,541,809
11	Comparative information
	The financial information contained in this half year financial report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The financial information for the half years ended 30 June 2023 and 30 June 2022 has not been audited or reviewed by the Auditor. The figures and financial information for the year ended 31 December 2022 are extracted from the latest published audited financial statements of the Company and do not constitute the statutory accounts for that year. The audited financial statements for the year ended 31 December 2022 have been filed with the Registrar of Companies. The report of the independent auditors on those accounts contained no qualification or statement under section 498(2) or section 498(3) of the Companies Act 2006.
Financial report for the half year ended 30 June 2023 A copy of the financial report for the half year ended 30 June 2023 has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website, www.witan.com. Printed copies or electronic notification will be sent to shareholders in August 2023 and will be available thereafter from the Secretary at the Company's registered office, 14 Queen Anne's Gate, London SW1H 9AA.

-  ENDS -

For further information please contact:

Andrew Bell Chief Executive Officer Witan Investment Trust plc Telephone:  [phone]

Isabella Seekings Director of Marketing Witan Investment Trust plc 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) is incorporated into, or forms part of, this announcement.

 

END