Replacement - Half-year Financial Report

Aberdeen UK Smaller Cos. Grwth Trst

05 March 2026

 

The following amendment has been made to the Half-yearly Financial Report announcement released on Thursday 5 March at 07.00 under RNS No 3929V.

Financial highlights table - correction of interim dividend rate to 4.50p per share.

All other details remain unchanged.

The full amended text is shown below.

Aberdeen UK Smaller Companies Growth Trust plc

(formerly abrdn UK Smaller Companies Growth Trust plc)

Half Yearly Report for the Six Months Ended 31 December 2025

Legal Entity Identifier (LEI):  213800UUKA68SHSJBE37

Investment Objective

The Company's objective is to achieve long-term capital growth by investment in UK-quoted smaller companies.

Reference Index

The Company's reference index is the Deutsche Numis Smaller Companies plus AIM (ex investment companies) Index.

Performance Highlights

Net asset value total returnA ​			Share price total returnA ​
Six months ended 31 December 2025	​-3.5%		Six months ended 31 December 2025	​-3.0% ​
Year ended 30 June 2025	+6.8%		Year ended 30 June 2025	+11.4%
Reference Index total return			Discount to net asset valueA
Six months ended 31 December 2025	​+4.6% ​		As at 31 December 2025	​8.6%
Year ended 30 June 2025	+7.8%		As at 30 June 2025	9.0%
Revenue return per share			Ongoing charges ratioA
Six months ended 31 December 2025	​6.84p		Forecast year ending 30 June 2026	​0.81%
Six months ended 31 December 2024	5.93p		Year ended 30 June 2025	0.85%
A Considered to be an Alternative Performance Measure. ​ ​ ​ ​

Financial Calendar

Payment of interim dividend for the year ending 30 June 2026	17 April 2026
Financial year end	30 June 2026
Expected announcement of results for year ending 30 June 2026	September 2026
Annual General Meeting (Edinburgh)	November 2026
Expected payment of final dividend for the year ending 30 June 2026	27 November 2026

Financial Highlights

	31 December 2025	30 June 2025	% change
Capital return
Total assetsA	£325.2m	£399.2m	-18.5%
Equity shareholders' funds	£285.2m	£359.2m	-20.6%
Market capitalisation	£260.6m	£326.8m	-20.3%
Net asset value per shareB	551.55p	581.37p	-5.1%
Share price	504.00p	529.00p	-4.7%
Discount to net asset valueC	8.6%	9.0%
Net gearingC	10.8%	6.6%
Reference index	5,963.52	5,780.00	+3.2%
Dividends and earnings
Revenue return per Ordinary shareD	6.84p	5.93p	+15.3%
Interim dividend per share	4.50p	3.70p	+21.6%
Operating costs
Ongoing charges ratioCEF	0.81%	0.85%
A Defined as total assets per the Statement of Financial Position less current liabilities (before deduction of bank loans). ​ ​ ​
B With debt at par value. ​ ​ ​
C Considered to be an Alternative Performance Measure. ​ ​ ​
D Figure for 31 December 2025 is for the six months to that date. Figure for 30 June 2025 is for the six months to 31 December 2024. ​ ​ ​
E The ongoing charges ratio for the current year includes a forecast of costs, charges and assumes no change in net assets for the year to 30 June 2026. ​ ​ ​
F Calculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis. ​ ​ ​

Chair's Statement

Performance

The Board is disappointed to report a falling net asset value ("NAV") total return of 3.5% for the six-month period ended 31 December 2025, underperforming the positive total return of 4.6% from the reference index, the Deutsche Numis Smaller Companies plus AIM (ex-Investment Companies) Index.

The market backdrop in the second half of 2025 was much more focused on large cap, often multi-national and more defensive sectors, resulting in smaller companies underperforming their larger counterparts by some margin. The Company's underperformance of the reference index was driven principally by style factors and sector exposures. Growth and Quality, which are important features of the Investment Manager's process were out of favour during the period.

The Investment Manager's approach has been and remains focused on identifying companies that display Quality, Growth and Momentum characteristics, and the portfolio is positioned such that, when these characteristics come to the fore, it should deliver significant returns for shareholders.

It is always disappointing to report negative numbers and Shareholders can be assured that the Board is engaging closely with the Investment Manager to ensure that every effort is undertaken to improve the position.

The Investment Manager's Review provides further information on performance and portfolio activity during the period, as well as the Investment Manager's outlook for the portfolio and the wider smaller companies sector.

Earnings and Dividend

The headline numbers on the Statement of Comprehensive Income continue to be significantly affected by the share buy back programme, which has reduced the earnings capacity of the portfolio. While the net revenue after tax was down 10.3% to £3.9 million, revenue earnings per share ("EPS") for the six months to 31 December 2025 increased by 15.3% to 6.84p (2024: 5.93p).

The analysis of the income forecast continues to indicate that the Revenue Account for the year is on track to deliver an increase in the EPS for the full year, even if the aggregate level numbers are lower than 12 months ago. The Board's declared dividend policy is that it aims to pay around one-third of the expected total dividend for the year at the interim stage, with the balance being paid out once the annual results are known. Consequently, the Board is declaring an interim dividend of 4.50p per share (2025: 3.70p per share) which will be paid on 17 April 2026 to shareholders on the register on 20 March 2026 with an associated ex-dividend date of 19 March 2026.

Gearing

During the period, the Company negotiated a £40 million revolving credit facility ("RCF") with The Bank of America. This replaced the previous loan with Royal Bank of Scotland International which expired in November 2025. The new facility is 'evergreen' and is at a lower margin than was previously the case. At 31 December 2025, the facility was fully drawn and net gearing was 10.8% (30 June 2025: 6.6%).

Total returns to	6 months	1 year	3 years	5 years	10 years
31 December 2025	%	%	%	%	%
NAVA	-3.5	+1.1	+15.2	-5.0	+71.9
Share priceA	-3.0	+3.0	+18.0	-11.2	+58.6
Reference IndexB	+4.6	+11.8	+21.2	+13.6	+62.7
Peer Group weighted average (NAV)	+1.0	+5.4	+19.7	+18.5	+79.9
Peer Group weighted average (share price)	+1.8	+7.7	+19.6	+10.2	+72.6
A Considered to be an Alternative Performance Measure.  ​ ​ ​ ​ ​
B Deutsche Numis Smaller Companies including AIM (ex investment companies) Index, prior to 1 January 2018 Deutsche Numis Smaller Companies (ex investment companies) Index. ​ ​ ​ ​ ​
Source: Morningstar ​ ​ ​ ​ ​

Discount Control and Share Buy Backs

At close of business on 31 December 2025, the Company's share price was trading at a discount of 8.6% to its NAV per share. This was marginally narrower than the 9.0% discount at which the shares were trading at the end of June 2025. For the majority of the period, the share price traded at a discount of between 8% and 10%. However, throughout the period, with investor sentiment against the asset class, there were significantly more sellers than buyers of the Company's shares and, in order to address this imbalance, the Board considered that it was in the best interests of Shareholders as a whole to continue to buy back shares. Consequently, the Company was active in the market on most days and bought back 10.1 million shares (16.3% of the opening issued share capital) at a weighted average price of 513.23p per share, which equated to an average discount of 9.3%.

The buy backs acted to enhance the NAV per share by 1.6%.

The Board remains committed to the buy back programme and will continue to buy back shares if the share price is trading at a discount to the cum-income NAV of more than 8% in normal market conditions. The Board is acutely aware that the high level of share buy backs has resulted in a reduction in the size of the Company, but the general feedback from Shareholders is that they appreciate the efforts that the Board is making to protect the discount level.

General Meeting

At the Annual General Meeting in November 2025, Shareholders granted the Board authority to buy back up to 8.1 million shares, which represented 14.99% of the issued share capital at the date of the meeting. Between then and the date of this report, the Company has bought back 5.9 million shares and the Board has concluded that, in order to continue to help address any imbalance of supply and demand in the Company's shares and to try to maintain the discount within the stated target range, the Company will need to seek fresh Shareholder approval to renew the share buy back authority  before the next Annual General Meeting in November. Consequently, the Board has issued a Circular to convene a General Meeting with the express purpose of seeking Shareholders' approval for a further renewal of the authority. The General Meeting will be held on 31 March 2026, and the Board would very much encourage Shareholders to vote their shares.

Board

Tim Scholefield will have been on the Board of the Company for more than nine years when the Directors stand for re-election at the Annual General Meeting in November. Consequently, in line with good corporate governance, Tim has indicated that he will not be standing for re-election. As a result, the Board has initiated a search for a replacement for Tim and it hopes to have identified the successful candidate in the next couple of months, so that he / she will be able to join the Board by May and be able to shadow Tim until he retires in November. Tim has been, and continues to be, a huge asset to the Board and we have all appreciated his wise counsel and we will be very sad to see him go.

Outlook

There is a broad consensus that the UK equity market is undervalued by comparison to other equity markets and furthermore that UK small caps are trading on lower multiples relative to UK large caps than they have for some time. This should be a positive backdrop for companies such as ours as it implies that we are due a correction, with UK multiples reverting towards long-term averages and small caps rebasing against large caps. The conundrum is that this outlook has persisted for at least 12 months and, while everyone seems to agree, we are not yet seeing much evidence of investors backing this analysis with the much needed investment flows.  

 Quality is a key attribute that your Investment Managers target in their process of selecting companies for the portfolio.  This characteristic has been very much out of favour with investors for a long period during which they have tended to prefer the Value characteristic and this has continually detracted from the performance of your portfolio. However, during times of heightened tensions and geo-political uncertainty such as we are experiencing, the UK is normally seen as more defensive in nature than other markets as a result of its specific sector biases. In this environment investors may well put more emphasis on the quality of companies in which they invest, so we might expect to see some positive flows into companies such as those in your portfolio.  Your Board believes this is long overdue.

Liz Airey
Chair
4 March 2026

Interim Management Report

Directors' Responsibility Statement

The Directors are responsible for preparing the Half Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of
their knowledge:

-  The condensed set of financial statements has been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting';

-  The Interim Board Report (constituting the interim management report) includes a fair review of the information required by DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and

-  The financial statements include a fair review of the information required by DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the Company during that period, and any changes in the related party transactions described in the last Annual Report that could do so.

Principal and Emerging Risks and Uncertainties

The Board regularly reviews the principal and emerging risks and uncertainties faced by the Company together with the mitigating actions it has established to manage the risks. These are set out within the Strategic Report contained within the Annual Report for the year ended 30 June 2025 and comprise the following risk categories:

-  Strategy

-  Investment performance

-  Staff turnover

-  Share price

-  Financial instruments

-  Financial obligations

-  Regulatory

-  Operational

-  Geopolitical

The Company's principal risks and uncertainties have not changed materially since the date of the Annual Report and are not expected to change materially for the remaining six months of the Company's financial year.

Going Concern

The Company's assets consist mainly of equity shares in companies listed on recognised stock exchanges and are considered by the Board to be realisable within a short timescale under normal market conditions. The Board has set overall limits for borrowing and reviews regularly the Company's level of gearing, cash flow projections and compliance with banking covenants. The Board has also reviewed stress testing and liquidity analysis of the portfolio. 

As at 31 December 2025, the Company had a secured £40 million 'evergreen' loan facility with Bank of America.  The facility was fully drawn down at the end of the period.

The Directors are mindful of the Principal Risks and Uncertainties summarised above and they believe that the Company has adequate financial resources to continue in operational existence for a period of not less than 12 months from the date of approval of this Report. They have arrived at this conclusion having confirmed that the Company's diversified portfolio of realisable securities is sufficiently liquid and could be used to meet short-term funding requirements were they to arise, as well as share buy back commitments. The Directors have also reviewed the revenue and ongoing expenses forecasts for the coming year and considered the Company's Condensed Statement of Financial Position as at 31 December 2025 which shows net current liabilities of £32.0 million at that date, and do not consider this to be a concern due to the liquidity of the portfolio which would enable the Company to meet any short term liabilities if required.

Taking all of this into account, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.

On behalf of the Board
Liz Airey
Chair
4 March 2026

Investment Manager's Review

The net asset value ("NAV") of the Company for the six months to 31 December 2025 fell by 3.5% on a total return basis while the share price recorded a negative total return of 3.0%. By comparison, the UK smaller companies sector as represented by the Deutsche Numis Smaller Companies plus AIM (ex investment companies) Index (the "reference index") delivered a positive total return of 4.6%.

Overview

During the six month period to 31 December 2025, the asset class of UK smaller companies delivered a positive total return of 4.6%, although this lagged the strong performance of large‑cap equities. The environment remained challenging for the small‑cap asset class, with investors continuing to favour traditional "old economy" sectors such as Banks, Defence, and Mining.

Smaller companies faced persistent headwinds. Uncertainty surrounding the timing and content of the November Budget weighed particularly heavily on domestically exposed businesses. Although the eventual policy outcome was relatively modest, the extended period of speculation reduced risk appetite and contributed to subdued demand for small‑cap equities.

Despite these pressures, valuations in the small‑cap universe remain well below historical averages. This provides a supportive backdrop for long term investors, particularly given the presence of companies demonstrating earnings resilience and growth from attractive starting valuations.

Performance

The period under review was a challenging one for the performance of the Company. The Company's NAV fell by 3.5% over the period on a total return basis, compared with a positive 4.6% return from the reference index. This underperformance was driven principally by style factors and sector exposures. Value remained firmly in favour, while Growth struggled and Quality - an important feature of our investment process - was deeply out of favour in the UK market.

The performance of the reference index during the period was also quite concentrated, in particular the Precious Metals Miners did particularly well, with the gold price strength being the key driver.

UK markets were challenging for us as portfolio managers last year. Whilst we identified companies that met and, in many cases, beat their earnings expectations, even those businesses often suffered a derating. The awareness of what the market is willing to pay in respect of earnings execution, resilience of revenue and profit streams has been a learning in this period. Despite the high levels of uncertainty, valuations of companies with quality and earnings delivery did not hold up.

While earnings momentum was rewarded in parts of the market, the strongest performers within that theme were often outside the portfolio. Mining strength was driven by commodity price moves in 2025, which management teams have no control over, however prospects have improved given the elongated period of commodity price strength, so we are considering the suitability of companies in that sector. Whilst some businesses have seen end markets improving, we have been cautious about how sustained this might be. For example, Cyclical Industrials, Housebuilding and Recruitment all continued to exhibit false starts, reinforcing our cautious stance to some recovery areas.

Positive performance came from a varied blend of holdings, including domestically focused companies such as Balfour Beatty in infrastructure. We were pleased to see Applied Nutrition (which we bought at IPO) contribute well, and the Company also benefitted from two bids; JTC and Alpha Group.

In addition to the holdings mentioned below, detractors included XPS Pensions, Cranswick, Avon Technologies, Gamma Communications and Premier Foods. We also saw slower than expected recoveries in some end markets, which impacted companies such as Ashtead Technology in the Oil & Gas sector, and Auction Technology in Global Auction Markets.

We are enthused by the new ideas we are considering for investment, as well as the return opportunities in many existing holdings, particularly given current valuations. 

The five top positive contributors to relative performance during the period were as follows:

Applied Nutrition (relative contribution +113bps, closing weight 2.7%) has had an excellent period following the IPO of late 2024. Strong trading has driven upgrades, with its consumer relevance and new product development being key drivers. The company has continued to deepen its global presence, creating listings with key retailers and distribution partners globally. Execution from the founder led management team has been flawless to date.

Alpha Group (relative contribution +79bps) was bid for by US listed company Corpay, producing a strong share price return. We have subsequently exited the holding.

JTC (relative contribution +59bps, closing weight 1.5%) is currently in a recommended bid situation from private equity firm Permira. We have been reducing the exposure to the company following the announcement.

Balfour Beatty (relative contribution +42bps, closing weight 2.8%) has been a strongly performing newer addition to the portfolio. Infrastructure end markets are providing growth environments, with committed and visible investment levels, and secure order books providing high levels of revenue coverage. The company is well positioned particularly in the areas of Energy, Defence and Transport.

Baltic Classified (relative contribution +40bps) was not held in the portfolio, which was a benefit to performance as its shares fell by 44% during the period. The business was challenged this year, with a variety of factors including tax changes in Estonia, investment spend, and margin compression.

The five biggest detractors to relative performance during the period were as follows:

ME (relative contribution -119bps, closing weight 2.3%) announced in late June that the Board was considering strategic options and there has been a dearth of information since that time, which has frustrated the market. This continued for the entire period, with no research available from brokers. In December, we finally heard that the review had concluded, with no bids for the company being completed. During the period, ME traded satisfactorily, however the good weather acted as a headwind for the laundry business. It has continued to make progress in the rollout of laundry machines across the UK in particular.

Jet2 (relative contribution -87bps, closing weight 2.5%) has suffered from a period of consumer caution on spending, with later booking patterns being seen across the industry, which challenges the company's ability to maximise its inventory. Its market position remains strong, brand loyalty apparent, the "Jet2 holiday meme" having increased awareness globally, and it secured a strong new entry into Gatwick Airport. The UK Budget headlines have been a key driver of consumers' spending mentality and with that behind us and pricing for summer 2026 having reduced across the industry and some capacity come out, the environment looks more constructive.

Hilton Food Group (relative contribution -75bps) was weak on disappointing earnings results, with downgrades to forecasts. The company has been challenged by the higher pricing of both beef and fish proteins which, given it is unable to fully pass on that cost to consumers without a negative impact on volume consumption, means an impact on margins. The company also had a listeria outbreak in one of its fish facilities. We remain concerned about the outlook for the company and exited the position during the period.

Mortgage Advice Bureau (relative contribution -75bps, closing weight 2.5%) has had a tough trading period, with the optimism on housing activity improving not coming to pass through 2025. The company does, however, have strong exposure to remortgaging activity, where we expect to see a pickup in due course. The business continues to have a strong market position and a well invested technology platform, and we are confident it will be well placed when end markets improve.

Telecom Plus (relative contribution -75bps, closing weight 2.0%) was weak during the period despite resilient reporting. One new growth angle is the acquisition of customer bases from other providers. However, some investors are concerned this highlights that the company's core opportunities to grow revenue are less attractive. We have been long term investors in Telecom Plus and remain comfortable with the outlook and the ability of the management team to execute these types of bolt-on customer acquisitions which can create additional value through cross selling more services.

Portfolio Activity

Seven new holdings were added to the portfolio during the period.

Balfour Beatty is a construction company that provides the portfolio with exposure to quality visible revenue streams, with high order book coverage of forecast revenue, from a company priced at an attractive valuation. The business is benefitting from structural growth in power, defence and transport infrastructure across the UK, US, and Hong Kong.

International Personal Finance operates a differentiated, agent-led lending model across Europe, Mexico and digital markets, with growth driven by credit cards and mobile wallets. Its deepening customer relationships improve the quality of earnings and its exposures were also considered to provide diversification in the portfolio. The company was bid for shortly after we initiated a position, unfortunately before we could build a full position size in the portfolio.

TBC Bank is a Georgia-based financials company that demonstrates high quality and growth characteristics, but which is valued on a cheap multiple compared to its UK banking peers. Georgian GDP growth is very strong, supporting growth in the business. TBC continues to deliver strong double-digit earnings growth and attractive net interest margins. Its entry into Uzbekistan enhances the growth potential of the business. 

Dunelm is a well-positioned cash-generative retailer with disciplined margins and a clear growth path. Market share has risen, supported by furniture expansion, digital sales, and new store formats. The valuation of the shares looks attractive compared to history, with a 4% dividend yield and low leverage. Recent updates evidence that Dunelm is outperforming a sluggish sector, while improving UK consumer conditions - lower inflation, rising real wages, and stable interest rates - should support demand.

Mitie is the UK's leading Facilities Management provider with a 14% market share, double its nearest competitor, and a strong blue chip client base. Its revenue is supported by long-term contracts and technology-driven platforms. The company is well positioned for growth through organic expansion, cross-selling higher-margin compliance services (the acquisition of Marlowe created a broader service offering), and further strategic acquisitions.  Its three-year plan targets high single-digit revenue growth, expanding operating margins underpinned by AI automation and a robust balance sheet with low leverage.

GB provides technology services exposed to the global growth areas of digital identity, location intelligence and fraud prevention. We believe self-help initiatives aimed at accelerating organic growth and improving profitability will improve the business outlook. The platform consolidation, sales realignment and subscription conversion are already showing early traction. The new CEO is driving a clear strategy focused on turning around its Americas Identity business and scaling its GBG Go platform as a single global solution, whilst internally streamlining operations for better efficiency. The company has strong financial foundations, with high cash conversion and a low net debt/EBITDA, providing flexibility for investment and shareholder returns.

Big Yellow, the self-storage business with a strong London asset base, has undergone a lacklustre few years, and was added to the portfolio at the end of the period. There has been a normalisation of trading in the self-storage sector since the Covid pandemic, during a period when the macro environment has been of limited help, and cost pressures have dampened profitability. With the shares trading on a 25% discount to book value, and trading in 2025 looking to have taken a more positive turn, we felt that building a new position was an attractive investment opportunity. Shareholder returns are supported by a 4% dividend yield and, whilst Blackstone stepped away from a bid prior to our entry, we wouldn't be surprised to see other bidders for Big Yellow in the future.

Three holdings were exited over the period. Hilton Food Group and Alpha Group are both explained above. Bytes Technology, the UK provider of software and services, was also exited. Decisions internally around sales restructuring looked to be poorly timed, given the Microsoft commission changes also ongoing. Bytes looks to have lacked the execution that other providers have demonstrated in driving resilient growth in their businesses.

Positions which were topped up during the period include Craneware, Volex, Bloomsbury Publishing, Rotork, Alfa, Galliford Try, Wickes, and Applied Nutrition.

Positions were reduced in discoverIE, Next 15, Hill & Smith, Auction Technology, Hollywood Bowl, and GlobalData. We controlled position sizes by taking profits in companies such as Cranswick, Cairn Homes, Paragon Banking, Tatton Asset Management, and Morgan Sindall. We also reduced exposure to Diploma and Games Workshop, whose successes have led to their promotion into the FTSE 100 Index. We continue to optimise positions to identify opportunities in markets and deploy capital into new ideas. Lastly, as explained above, JTC is under a recommended bid situation, from Permira private equity, and we have therefore been selling down that position to reinvest in other companies.

Revenue Account

Revenue earnings per share for the six-month period were 6.84p, compared to 5.93p for the comparable period last year. The level of investment income generated from the portfolio was 8.8% lower, due to the impact of share buy backs conducted during the period which reduce the Company's capital base. However, the Company benefited from strong dividend growth from a number of investee companies. 

Outlook

Following a difficult period for the Company, we remain confident in the strength of our established investment process, which has delivered long‑term outperformance through multiple market cycles. Our focus on Quality, Growth and Momentum - applied through disciplined stock selection - remains central to our approach.

Quality, having been deeply out of favour in 2025, has showed signs of improvement. We will remain highly aware of the market environment, and whilst our investment approach will continue to have tilts to Quality, Growth and Momentum, we believe our focus on stock selection is critical in delivering long term returns to shareholders.

Although smaller companies have lagged larger companies, there is compelling value in this asset class, and the long term growth potential remains a reason to be confident in the outlook. For the first time in 23 years, the small cap reference index has a higher dividend yield than the large cap index, 3.4% at the end of 2025, compared to 3.1% for the FTSE 100 Index. In addition, the reference index is trading on a 25% P/E discount, at 13.8x P/E vs large cap which is now on 18.5x.  

Interest rates have fallen in line with market expectations, which should be supportive for smaller companies. Consensus expectations are for another two interest rate reductions in the UK during 2026. Although media headlines often read very negatively, the consumer is not in general in an unfavourable position - with high savings rates, and unemployment rates remaining at relatively low levels. The outlook is not without question marks, but GDP globally is slowly improving.

Within the market we see significant opportunities and we are excited about the ideas coming to fore for the portfolio. The UK continues to be an attractive market for listed companies, and we see attractive return investment cases in both overseas and domestically exposed companies. The portfolio currently sits with around 55% of revenue generated within the UK, and 45% overseas. As always, we will continue to look for opportunities to invest in both markets. Within UK domestic companies, in many cases valuations and forecasts are both at low levels, and improvements in end markets can result in strong share price reactions.

UK markets might be forgotten, but they are not dead. Let's not forget the strength in returns in UK large cap indices last year, which does at least evidence there is capital to be deployed into UK markets. We believe the characteristics of UK smaller companies demonstrate that opportunity. The outlook for 2026 is not without uncertainties, but the experience from 2025 -  particularly around market behaviour and style dynamics -  prepares us as portfolio managers to navigate them, and with current P/E levels sitting near multi‑year lows, we believe this provides a supportive backdrop for the portfolio.

Abby Glennie and Amanda Yeaman
Aberdeen
4 March 2026

Investment Portfolio

At 31 December 2025 ​ ​ ​
		Market	Total
		value	assets
Company	Industry	£'000	%
Morgan Sindall	Construction and Materials	11,521	3.5
Avon Technologies	Aerospace and Defence	11,042	3.4
Cranswick	Food Producers	10,006	3.1
Volution	Construction and Materials	9,918	3.0
Paragon Banking	Finance and Credit Services	9,167	2.8
Cairn Homes	Household Goods and Home Construction	9,055	2.8
Balfour Beatty	Construction and Materials	8,991	2.8
Applied Nutrition	Food Producers	8,743	2.7
Mortgage Advice Bureau	Finance and Credit Services	8,173	2.5
Sirius Real Estate	Real Estate Investment Trusts	8,168	2.5
Top ten investments		94,784	29.1
Jet2	Travel and Leisure	7,981	2.5
XPS Pensions	Investment Banking and Brokerage Services	7,802	2.4
AJ Bell	Investment Banking and Brokerage Services	7,674	2.4
ME	Leisure Goods	7,559	2.3
Tatton Asset Management	Investment Banking and Brokerage Services	7,487	2.3
Coats	General Industrials	7,294	2.2
Galliford Try	Construction and Materials	7,176	2.2
Alfa	Software and Computer Services	6,980	2.2
Premier Foods	Food Producers	6,828	2.1
Bellway	Household Goods and Home Construction	6,827	2.1
Top twenty investments		168,392	51.8
CVS	Consumer Services	6,806	2.1
Telecom Plus	Telecommunications Service Providers	6,672	2.0
Hunting	Oil, Gas and Coal	6,632	2.0
Craneware	Health Care Providers	6,587	2.0
Hill & Smith	Industrial Metals and Mining	6,377	2.0
Johnson Service	Industrial Support Services	6,304	1.9
Volex	Electronic and Electrical Equipment	6,248	1.9
Trustpilot	Software and Computer Services	6,104	1.9
Games Workshop	Leisure Goods	5,748	1.8
Diploma	Industrial Support Services	5,741	1.8
Top thirty investments		231,611	71.2
Gamma Communications	Telecommunications Service Providers	5,580	1.7
Breedon	Construction and Materials	5,136	1.6
Boku	Industrial Support Services	5,070	1.6
Bloomsbury Publishing	Media	4,970	1.5
Ashtead Technology	Oil, Gas and Coal	4,907	1.5
JTC	Investment Banking and Brokerage Services	4,889	1.5
Rotork	Electronic and Electrical Equipment	4,849	1.5
Chemring	Aerospace and Defence	4,707	1.4
Savills	Real Estate Investment and Services	4,573	1.4
Wickes	Retailers	4,051	1.3
Top forty investments		280,343	86.2
TBC Bank	Banks	3,867	1.2
Renew Holdings	Construction and Materials	3,631	1.1
Mitie	Industrial Support Services	3,558	1.1
Hollywood Bowl	Travel and Leisure	3,541	1.1
Dunelm	Retailers	3,461	1.0
On the Beach	Travel and Leisure	3,241	1.0
GlobalData	Media	2,520	0.8
Next 15	Media	2,508	0.8
GB	Software and Computer Services	2,345	0.7
LBG Media	Media	2,276	0.7
Top fifty investments		311,291	95.7
Auction Technology	Software and Computer Services	2,222	0.7
Raspberry Pi	Technology Hardware and Equipment	1,860	0.6
International Personal Finance	Finance and Credit Services	700	0.2
Big Yellow	Real Estate Investment Trusts	566	0.2
discoverIE	Electronic and Electrical Equipment	537	0.2
Total portfolio		317,176	97.6
Net current assetsA		8,011	2.4
Total assets		325,187	100.0
A Current assets less current liabilities. Excludes bank loans of £40,000,000. ​ ​ ​

Condensed Statement of Comprehensive Income (unaudited)

		​ Six months ended ​			​ Six months ended ​
		​ 31 December 2025 ​			​ 31 December 2024 ​
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Net (losses)/gains on investments held at fair value		-	(19,115)	(19,115)	-	3,044	3,044
Income	2	4,769	-	4,769	5,378	-	5,378
Investment management fee		(224)	(670)	(894)	(347)	(1,042)	(1,389)
Administrative expenses		(419)	-	(419)	(398)	-	(398)
Net return before finance costs and taxation		4,126	(19,785)	(15,659)	4,633	2,002	6,635
Finance costs		(259)	(776)	(1,035)	(321)	(963)	(1,284)
Return before taxation		3,867	(20,561)	(16,694)	4,312	1,039	5,351
Taxation	3	-	-	-	-	-	-
Return after taxation		3,867	(20,561)	(16,694)	4,312	1,039	5,351
Return per Ordinary share (pence)	5	6.84	(36.36)	(29.52)	5.93	1.43	7.36
The total column of the condensed Statement of Comprehensive Income represents the profit and loss account of the Company. ​ ​ ​ ​ ​ ​ ​
All revenue and capital items in the above statement derive from continuing operations. ​ ​ ​ ​ ​ ​ ​
The accompanying notes are an integral part of the financial statements. ​ ​ ​ ​ ​ ​ ​

Condensed Statement of Financial Position (unaudited)

		As at	As at
		31 December 2025	30 June 2025
	Notes	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss		317,176	383,829
Current assets
Debtors		1,761	951
Cash and cash equivalents		8,500	16,218
		10,261	17,169
Current liabilities
Creditors: amounts falling due within one year		(2,250)	(1,812)
Bank loan	8	(40,000)	(39,991)
		(42,250)	(41,803)
Net current liabilities		(31,989)	(24,634)
Net assets		285,187	359,195
Capital and reserves
Called-up share capital		26,041	26,041
Share premium account		-	170,146
Special distributable reserve		134,365	-
Capital reserve		111,776	148,574
Revenue reserve		13,005	14,434
Equity shareholders' funds		285,187	359,195
Net asset value per Ordinary share (pence)	7	551.55	581.37
The accompanying notes are an integral part of the financial statements. ​ ​ ​

Condensed Statement of Changes in Equity (unaudited)

Six months ended 31 December 2025 ​ ​ ​ ​ ​ ​ ​
			Share	Special
		Share	premium	distributable	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2025		26,041	170,146	-	148,574	14,434	359,195
Return after taxation		-	-	-	(20,561)	3,867	(16,694)
Cancellation of share premium account		-	(170,146)	170,146	-	-	-
Buyback of shares into treasury		-	-	(35,781)	(16,237)	-	(52,018)
Dividends paid (see note 4)		-	-	-	-	(5,296)	(5,296)
Balance at 31 December 2025		26,041	-	134,365	111,776	13,005	285,187
Six months ended 31 December 2024 ​ ​ ​ ​ ​ ​ ​
			Share	Special
		Share	premium	distributable	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2024		26,041	170,146	-	203,375	13,527	413,089
Return after taxation		-	-	-	1,039	4,312	5,351
Buyback of shares into treasury		-	-	-	(23,509)	-	(23,509)
Dividends paid (see note 4)		-	-	-	-	(6,003)	(6,003)
Balance at 31 December 2024		26,041	170,146	-	180,905	11,836	388,928
The capital reserve at 31 December 2025 is split between realised of £79,746,000 and unrealised of £32,030,000 (31 December 2024 - realised £97,624,000 and unrealised of £83,281,000). ​ ​ ​ ​ ​ ​ ​
The accompanying notes are an integral part of the financial statements. ​ ​ ​ ​ ​ ​ ​

Condensed Statement of Cash Flows (unaudited)

		Six months ended
	Six months ended	31 December 2024
	31 December 2025	Restated*
	£'000	£'000
Operating activities
Net return before taxation	(16,694)	5,351
Adjustment for:
Losses/(gains) on investments	19,115	(3,044)
Decrease in accrued income	337	439
Finance costs	1,035	1,284
Increase in other debtors	(6)	(4)
Decrease in other creditors	(295)	(56)
Net cash inflow from operating activities	3,492	3,970
Investing activities
Purchases of investments	(42,968)	(64,626)
Sales of investments	89,848	89,915
Net cash inflow from investing activities	46,880	25,289
Financing activities
Bank and loan interest paid	(1,106)	(1,308)
Repurchase of Ordinary shares into Treasury	(51,688)	(23,435)
Drawdown of loan	40,000	-
Repayment of loan	(40,000)	-
Equity dividends paid	(5,296)	(6,003)
Net cash outflow from financing activities	(58,090)	(30,746)
Decrease in cash and cash equivalents	(7,718)	(1,487)
Analysis of changes in cash during the period
Opening balance	16,218	15,920
Decrease in cash and cash equivalents as above	(7,718)	(1,487)
Closing balance	8,500	14,433
Represented by:
Cash at bank and in hand	5	1
Investments in AAA-rated money market funds	8,495	14,432
	8,500	14,433
* Further details of the restatement can be found in note 13.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements (unaudited)

For the year ended 31 December 2025

1.	Accounting policies
	Basis of accounting. The condensed financial statements have been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting' and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in July 2023. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
	The Company received court approval, by way of a court order dated 15 August 2025, for cancellation of the entire amount standing to the credit of the Share Premium Account. The court order was registered at Companies House on 20 August 2025 at which point cancellation of the entire amount standing to the credit of the Share Premium Account became effective. That amount has been credited to a special distributable reserve which is available to fund the cost of share buy backs and future dividend payments, if required. The Board believes that it is in the Company's interest to have this flexibility in its reserves, although the Board has no current intention of using the new reserve for dividend payments which it expects will continue to be resourced through annual net revenues and revenue reserves.
	The half-yearly financial statements have been prepared using the same accounting policies as the preceding annual accounts.

2.	Income
		Six months ended	Six months ended
		31 December 2025	31 December 2024
		£'000	£'000
	Income from investments
	UK dividend income	3,761	4,237
	Property income distributions	231	286
	Overseas dividend income	276	278
	Special dividends	250	155
		4,518	4,956
	Interest income
	Interest from AAA-rated money-market funds	251	422
		251	422
	Total income	4,769	5,378

3.	Taxation
	The taxation expense reflected in the Condensed Statement of Comprehensive Income is based on management's best estimate of the weighted annual corporation tax rate expected for the full financial year. The estimated annual tax rate used for the year to 30 June 2026 is 25%.

4.	Ordinary dividend on equity shares
		Six months ended	Six months ended
		31 December 2025	31 December 2024
		£'000	£'000
	2025 final dividend of 9.50p per share (2024 - 8.30p)	5,296	6,003

5.	Return per share
		Six months ended	Six months ended
		31 December 2025	31 December 2024
		p	p
	Revenue return	6.84	5.93
	Capital return	(36.36)	1.43
	Total return	(29.52)	7.36
	Weighted average number of Ordinary shares	56,547,791	72,666,094
	The figures above are based on the following:
		Six months ended	Six months ended
		31 December 2025	31 December 2024
		£'000	£'000
	Revenue return	3,867	4,312
	Capital return	(20,561)	1,039
	Total return	(16,694)	5,351

6.	Transaction costs
	During the period, expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows: ​ ​
		Six months ended	Six months ended
		31 December 2025	31 December 2024
		£'000	£'000
	Purchases	263	315
	Sales	49	61
		312	376

7.	Net asset value per share
	Total shareholders' funds have been calculated in accordance with the provisions of applicable accounting standards. The analysis of total shareholders' funds on the face of the Condensed Statement of Financial Position reflects the rights, under the Articles of Association, of the Ordinary shareholders on a return of assets.  ​ ​
	These rights are reflected in the net asset value and the net asset value per share attributable to Ordinary shareholders at the period end. ​ ​
		As at	As at
		31 December 2025	30 June 2025
	Total shareholders' funds (£'000)	285,187	359,195
	Number of Ordinary shares in issue at the period endA	51,706,484	61,783,713
	Net asset value per share (pence)	551.55	581.37
	A Excluding shares held in treasury.
	During the six months ended 31 December 2025 the Company repurchased 10,077,229 Ordinary shares to be held in treasury (31 December 2024 - 4,657,521) at a cost of £52,018,000 (31 December 2024 - £23,509,000). ​ ​
	As at 31 December 2025 there were 51,706,484 Ordinary shares in issue (30 June 2025 - 61,783,713). There were also 52,457,938 Ordinary shares (30 June 2025 - 42,380,709) held in treasury. ​ ​

8.	Loans
	On 13 August 2025, the Company entered into a new secured credit facility of £40 million with Bank of America. The new facility is an 'evergreen' facility which will continue until such time as the Company or the lender provide notice of termination in accordance with the agreement. At 31 December 2025 £40 million was drawn down at an interest rate of 4.97%. This facility replaced the previous three year revolving credit facility of £40 million (the "RCF") held with The Royal Bank of Scotland International Limited which was repaid in full on 13 August 2025.
	There were no loan arrangement expenses associated with the new 'evergreen' secured credit facility. At 30 June 2025 the RCF was shown in the Condensed Statement of Financial Position net of unamortised expenses of £9,000.
	The terms of the 'evergreen' facility contains covenants that the Consolidated Net Tangible Assets as defined in the agreement must not be less than £200 million and that the percentage of borrowings against the Adjusted Portfolio Value as defined in the agreement shall not exceed 30%. The Company complied with all covenants throughout the year.

9.	Analysis of changes in net debt ​ ​ ​ ​
		At		Non-cash	At
		30 June 2025	Cash flows	movements	31 December 2025
		£'000	£'000	£'000	£'000
	Cash and cash equivalents	16,218	(7,718)	-	8,500
	Debt due in less than one year	(39,991)	-	(9)	(40,000)
	Total net debt	(23,773)	(7,718)	(9)	(31,500)
		At			At
		30 June 2024	Cash flows	Non-cash	31 December 2024
		Restated*	Restated*	movements	Restated*
		£'000	£'000	£'000	£'000
	Cash and cash equivalents	15,920	(1,487)	-	14,433
	Debt due in less than one year	(39,964)	-	(14)	(39,978)
	Total net debt	(24,044)	(1,487)	(14)	(25,545)

10.	Fair value hierarchy ​
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.  The fair value hierarchy shall have the following classifications: ​
	Level 1:	unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2:	inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3:	inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	All of the Company's investments are in quoted equities (30 June 2025 - same) that are actively traded on recognised stock exchanges, with their fair value being determined by reference to their quoted bid prices at the reporting date. The total value of the investments (31 December 2025 - £317,176,000; 30 June 2025 - £383,829,000) have therefore been deemed as Level 1.​
	The fair value of the £40 million 'evergreen' loan facility as at 31 December 2025 is £40,000,000, due to it being short-term in nature, with a par value per Statement of Financial Position of £40,000,000. Under the fair value hierarchy in accordance with FRS 102, these borrowings can be classified at Level 2. ​

11.	Transactions with the Manager
	The Company has an agreement with abrdn Fund Managers Limited ("aFML") for the provision of investment management, secretarial, accounting and administration and promotional activity services. During the six months ended 31 December 2025 the management fee paid to aFML was charged by applying a tiered rate of 0.60% to the first £200 million of net assets and 0.55% of net assets above £200 million. Prior to 1 April 2025, the management fee was charged at 0.75% per annum on the first £175 million of net assets, 0.65% per annum on net assets between £175 million and £550 million and 0.55% on net assets above £550 million. The contract is terminable by either party on six months' notice.
	During the period £894,000 (31 December 2024 - £1,389,000) of investment management fees were earned by aFML, with a balance of £417,000 (31 December 2024 - £676,000) due at the period end.
	The Manager also receives a separate promotional activities fee which during the period was based on an annual amount of £206,000 exclusive of VAT payable quarterly in arrears. During the period, a fee of £103,000 (31 December 2024 - £103,000) exclusive of VAT was payable to the Manager, with a balance of £156,000 (31 December 2024 - £51,500) exclusive of VAT being due at the period end.

12.	Subsequent events
	Subsequent to the period end, up to the date of approval of this Report, the Company repurchased a further 3,287,676 Ordinary shares to be held in treasury at a cost of £17,074,000.

13.	Prior period restatement
	The Condensed Statement of Financial Position, the Condensed Statement of Cash Flows and note 9 for the period ended 31 December 2024 have been restated to classify investments in AAA-rated money market funds as a cash and cash equivalent. This treatment was changed to align to the presentation in accordance with guidance provided in FRS 102.
	Consequently, within the Condensed Statement of Cash Flows for the period ended 31 December 2024, the opening and closing balances of cash and cash equivalents now include investments in AAA-rated money market funds as well as cash at bank and in hand, and purchases and sales of investments in AAA-rated money market funds have been excluded as they do not meet the definition of a long-term asset. As a result, "Net cash inflow from investing activities" and "Decrease in cash and cash equivalents" have been increased by £1,195,000, being the movement in AAA-rated money market funds during the prior period. In the table for 'Analysis of changes in net debt' in note 9 for 2024 cash at bank and in hand of £1,000 and investments in AAA-rated money market funds of £14,432,000, which had previously been separately presented are now shown in aggregate as cash and cash equivalents in the amount of £14,433,000.

14.

Half-Yearly Financial Report

The financial information in this Report does not constitute statutory accounts as defined in Sections 434 - 436 of the Companies Act 2006. The financial information for the year ended 30 June 2025 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006. The half-yearly financial statements have been prepared using the same accounting policies as the preceding annual accounts.

15.	This Half-Yearly Financial Report was approved by the Board on 4 March 2026.

Alternative Performance Measures

Alternative performance measures ("APMs") are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. ​ ​ ​
The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies. Where the calculation of an APM is not detailed within the financial statements, an explanation of the methodology employed is provided below: ​ ​ ​
Discount
A discount is the percentage by which the market price is lower than the Net Asset Value ("NAV") per share. ​ ​ ​
		31 December 2025	30 June 2025
Share price	a	504.00p	529.00p
Net Asset Value per share	b	551.55p	581.37p
Discount	(a/b)-1	8.6%	9.0%
Net gearing ​ ​ ​
Net gearing measures the total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes amounts due from and to brokers at the period end as well as cash and short-term deposits. ​ ​ ​
		31 December 2025	30 June 2025
		£'000	£'000
Total borrowings	a	(40,000)	(39,991)
Cash and short-term deposits		5	5
Investments in AAA-rated money-market funds		8,495	16,213
Amounts due from brokers		1,160	18
Amounts payable to brokers		(519)	(35)
Total cash and cash equivalents	b	9,141	16,201
Net gearing (borrowings less cash & cash equivalents)	c=a+b	(30,859)	(23,790)
Shareholders' funds	d	285,187	359,195
Net gearing (borrowings less cash & cash equivalents)	e=c/d	10.8%	6.6%
Ongoing charges ratio ​ ​ ​
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC, which is defined as the total of investment management fees and recurring administrative expenses and expressed as a percentage of the average daily net asset values published throughout the year. The ratio reported at 31 December 2025 includes actual costs and charges for the six months and includes a forecast for costs, charges and the asset base for the remaining six months of the financial year ending 30 June 2026. ​ ​ ​
		31 December 2025A	30 June 2025B
		£'000	£'000
Investment management fee	a	1,746	2,489
Administrative expenses	b	797	781
Less: non-recurring chargesC	c	(48)	(11)
Ongoing charges	d=a+b+c	2,495	3,259
Average net assets	e	306,991	385,637
Ongoing charges ratioD	f=d/e	0.81%	0.85%
A Forecast for the year ending 30 June 2026 based on estimates as at 31 December 2025. ​ ​ ​
B For the year ended 30 June 2025. ​ ​ ​
C Comprises professional fees not expected to recur. ​ ​ ​
D Calculated in accordance with AIC guidance issued in October 2020. ​ ​ ​
Total return ​ ​ ​
NAV and share price total returns show how the NAV and share price have performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. NAV total return assumes reinvesting the net dividend paid by the Company back into the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return assumes reinvesting the net dividend back into the share price of the Company on the date on which that dividend goes ex-dividend. ​ ​ ​
			Share
Six months ended 31 December 2025		NAV	price
Opening (p)	a	581.37	529.00
Closing (p)	b	551.55	504.00
Decrease (p)	c=b-a	-29.82	-25.00
% decrease	d=c/a	-5.1%	-4.7%
Uplift from reinvestment of dividendsA	e	1.6%	1.7%
Total return decrease	d+e	-3.5%	-3.0%
A The uplift from reinvestment of dividends assumes that the dividend of 9.50p paid by the Company in November 2025 was reinvested in the NAV and share price of the Company on the ex-dividend date. ​ ​ ​

By order of the Board

abrdn Holdings Limited

Company Secretary

4 March 2026

Please note that past performance is not necessarily a guide to the future and the value of investments and the income from them may fall as well as rise.  Investors may not get back the amount they originally invested

 

END