Half-year Report

Schroder Income Growth Fund PLC

13 May 2026

 

Schroder Income Growth Fund plc

Half Year Report

Schroder Income Growth Fund plc (the "Company") hereby submits its half year report for the six months ended 28 February 2026 as required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.2. 

Ewen Cameron Watt, Chairman of the Company, commented:

"Your Board remains confident in your Investment Manager's disciplined and selective approach, and its ability to continue to successfully fulfil your Company's objectives over the long term."

Key highlights

• The period under review saw a strong performance from UK equities. NAV total return for the six months to 28 February 2026 was 17.4% versus 18.9% for the FTSE All-Share Index. This was largely driven by a small number of stocks within the FTSE All-Share Index delivering exceptionally strong returns.
• Longer term, returns remain above the FTSE All-Share Index since Sue Noffke assumed responsibility for the Company's portfolio in July 2011.
• Share buybacks have continued to feature prominently both within the portfolio and across the broader UK market with 66% of companies in the portfolio conducting buybacks during the period.
• The Company delivered an increased dividend for the 30th consecutive year and continues to aim to retain AIC "Dividend Hero" status.
• The reduction in the investment management fee contributed approximately 0.17p per share (based on the current weighted average number of shares) in the first half of the financial year, with revenue earnings per share increasing to 3.97p for the period.

The Company's half year report is being published in hard copy format and an electronic copy of that document will shortly be available to download from the Company's web pages  www.schroders.com/incomegrowth.

The Company's half year report will shortly be uploaded to the Financial Conduct Authority's National Storage Mechanism and will be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism 

Enquiries:

Schroder Investment Management Limited

Kirsty Preston (Press)                                            020 7658 6000

Francesca Davis (Company Secretary)                 020 7658 6000

Chairman's Statement

I am pleased to present the half year results of your Company for the six months ended 28 February 2026. Following shareholder approval at the Annual General Meeting ("AGM") in December 2025 for the continuation of your Company for a further five years, your Board and Investment Manager look forward to continuing to fulfil the investment objective as your Company enters its fourth decade.

Performance

Your Company's NAV total return for the six months to 28 February 2026 was 17.4% compared to the FTSE All-Share Index of 18.9%. The share price total return matched the FTSE All-Share Index at 18.9% with the discount to NAV narrowing over the period from 8.2% to 7.2%. Longer term, returns remain above the FTSE All-Share Index since Sue Noffke assumed responsibility for your Company's portfolio in July 2011.

The period under review saw a strong performance from UK equities, despite a subdued but relatively resilient domestic economic backdrop, with returns driven largely by global factors. Larger, internationally exposed companies led the market, supported by renewed investor interest in the UK against a backdrop of valuation and concentration concerns in US equities. As outlined in your Investment Manager's review, sector performance reflected this dynamic, with more traditional areas of the market generally faring well, while developments in artificial intelligence contributed to greater divergence within technology-related businesses.

Between 28 February 2026 to 7 May 2026, the NAV and share price have delivered total returns of -5.2% and -3.7% respectively, versus the return for the FTSE All-Share Index of -5.0%.

Revenue and dividends

Your Company has paid first and second interim dividends for the year ending 31 August 2026 of 3.25 pence per share (2024: 3.25 pence per share).

The income from investments received by your Company during the first half of the financial year increased by 17.5%, reflecting a 7% rise in ordinary dividend income and a special dividend from Lancashire Holdings, with no equivalent receipt in the prior period. As in previous years, dividend income is more heavily weighted to the second half of your Company's financial year, and many companies continue to consider a broader range of strategies for returning surplus funds to shareholders, including share buybacks.

Against this backdrop, the series of changes to reduce your Company's investment management fee, which were announced in May 2025 and which came into effect from 1 September 2025, have a proportionately greater impact in the first half of the year, equating to approximately 0.17 pence per share, based on the current weighted average number of shares. The revenue earnings per share was 3.97p for the period compared to 2.84p for the prior period.

After paying the first interim dividend for the year ending 31 August 2026, your Company has revenue reserves of 7.1 pence per share (based on shares outstanding at the period end) equivalent to 48% of the dividends paid last year. As at 28 February 2026, your Company had capital reserves of £243,197,000 which, together with its revenue reserves, comprise your Company's total distributable reserves. As mentioned in the annual report, your Board's view is that all reserves generated from investment returns are available for shareholders and to support the level of dividend you receive. This aligns with most major investment sectors which focus on pay-outs based on total return.

Your Board was pleased to deliver an increased dividend for the 30th consecutive year for the year ended 31 August 2025 and continues to aim to retain AIC "Dividend Hero" status. Your Board remains dedicated to delivering your Company's investment objective supplemented, when necessary, by using total distributable reserves to provide growing income for shareholders.

Board succession

As part of your Board's ongoing approach to succession planning, I will not be standing for re‑election at your Company's 2026 AGM expected to be held in December 2026 and will step down at the conclusion of that meeting, having served as a Non-Executive Director for nine years.

Following a recommendation from the Nomination Committee and from which I recused myself, your Board has agreed that Ms Victoria Muir, who has been a Non‑Executive Director of your Company since July 2019 and Senior Independent Director since December 2022, will succeed me as Chairman following the conclusion of the 2026 AGM.

I am pleased to note that your Company will benefit from an orderly and well‑planned transition, and from continuity of leadership under a successor who knows your Company and its investment objective well.

Your Board intends to recruit and appoint an additional independent Non-Executive Director in the second half of the calendar year. As part of this process and the associated transition, your Board will consider the respective chair appointments of your Company's Nomination, Remuneration, and Management Engagement Committees.

Gearing

Your Company has in place a £30 million revolving credit facility with The Bank of Nova Scotia, London Branch, expiring in September 2026. The average gearing during the period was 8.4%. This made a positive contribution to performance over the period.

Discount management

Your Board continues to manage actively the level and volatility of the share price discount to NAV and the effectiveness of your Company's discount control mechanisms. Your Board is prepared to act where appropriate, including carrying out share buybacks, to help manage the discount in the interests of shareholders and seeks to keep the discount to NAV within single digits in normal market conditions. Your Company's discount to NAV at the period end amounted to 7.2%.

During the six months to 28 February 2026, your Company bought back 803,214 ordinary shares, equating to 1.2% of your Company's issued share capital (excluding treasury shares), for a sum of £2.8 million, to be held in treasury. The average price paid per share was £3.43 and the share repurchases contributed to approximately a 0.1% accretion in NAV.

Post period end, and as at the date of signing, your Company bought back a further 1,035,000 ordinary shares into treasury for a sum of £3.6 million. As at 7 May 2026, the discount to NAV was 6.1% compared to 7.2% at the end of the period.

Schroders and Nuveen

On 12 February 2026, the Board of Schroders plc announced that they had agreed the terms of a recommended cash acquisition by Nuveen, to combine the two businesses. The announcement indicated that the transaction is not expected to complete until Q4 2026.

Your Board has been informed that Nuveen's intention is to maintain continuity across Schroders' existing investment and client-facing functions, and your Board will closely monitor progress going forward. Further details are available on the Schroders website: https://www.schroders.com/en/global/individual/nuveenoffer/

ISA millionaire

Your Board was pleased to see your Company recognised on the Association of Investment Companies' ("AIC") 2026 ISA millionaire list which comprises those investment trusts that would have generated over £1 million had an investor contributed their full annual ISA allowance since the inception of ISAs in 1999.

Outlook

Looking ahead, your Board is mindful that significant uncertainty remains, particularly with respect to the conflict in Iran, which has potential implications for inflation, interest rates and ongoing market volatility. However, your Board shares your Investment Manager's constructive medium-term outlook. Valuations in the UK remain supportive, and the market continues to offer a diverse range of opportunities across sectors and structural growth drivers. Against this backdrop, your Board remains confident in your Investment Manager's disciplined and selective approach, and its ability to continue to successfully fulfil your Company's objectives over the long term.

Your Board is particularly aware of consolidation within the investment trust industry. In this context, and as mentioned earlier in my statement, I am grateful that 95.79% of shareholders voted to support a five-year continuation of your Company in December 2025. Notwithstanding this support, your Board will continue to monitor industry developments solely through the lens of delivering shareholder value.

Ewen Cameron Watt

Chairman

12 May 2026

Investment Manager's Review

Introduction

The six months under review were a strong period for UK equities, despite a backdrop that has remained eventful from a geopolitical and market leadership perspective. The economic backdrop was supportive globally - modest growth and moderating inflation giving way to expectations of further cuts in interest rates through 2026. Market leadership was dominated by larger companies and certain sectors, which was a global phenomenon.

Your Company delivered a NAV total return of 17.4% over the six months to 28 February 2026. This compares to the FTSE All-Share Index, which returned 18.9%. This relative underperformance was largely driven by a small number of stocks within the FTSE All-Share Index delivering exceptionally strong returns. The impact of this concentration was also evident across the AIC UK Equity Income peer group, which generated an average return of 15.0%. Your Company's performance was ahead of its peer group, achieving a second quartile ranking.

Your Board had previously announced a series of changes to reduce fees which came into effect from 1 September 2025. As in previous years, the first half of your Company's financial year accounts for a smaller proportion of total annual income, with the heavier concentration of dividends arising in the second half. The impact of the fee reductions is thus more weighted to the first half of the year.

Earnings per share rose 40% to 3.97p, compared with 2.84p for the equivalent period last year. This significant increase reflects three factors. Firstly, higher income from investments. Secondly, lower costs - the previously announced reductions to both investment management and administration fees, and finance costs because of lower interest rates. And thirdly, reduced number of shares in issue, as your Company has continued to buy back its own shares in the market.

Income

Income from investments rose 17.5% to £3.38 million. The period benefited from a special dividend from Lancashire Holdings, the specialist insurance group, with no equivalent receipt in the prior period. Excluding this contribution, ordinary dividend income for your Company grew by 7% - a reflection of the broad-based dividend progress made across the portfolio during the period.

Several holdings delivered double-digit dividend increases. In financials, Prudential, XPS Pensions and 3i Group all grew their dividends strongly. Among consumer-facing companies, Hollywood Bowl, Tesco, Cranswick and Associated British Foods achieved similar rates of growth, as did construction company Balfour Beatty.

Elsewhere, the picture was more mixed. The environment for dividend growth at the market level remains relatively muted, with several holdings continuing to direct surplus capital towards other objectives. For many companies, the preference remains for share buybacks rather than higher dividends, which reflects persistently modest equity valuations across much of the UK market. Others have pursued increased capital expenditure - SSE and National Grid, for example, are both funding substantial infrastructure investment programmes, while HSBC and Computacenter have prioritised acquisition activity.

Share buybacks have continued to feature prominently both within the portfolio and across the broader UK market. At period end, 30 of your Company's 46 holdings - representing 66% of the portfolio - conducted buybacks during the period, broadly in line with the position at the end of the last financial year. At the market level, 2025 marked the fourth consecutive year in which buybacks have exceeded £60 billion. London has become the share buyback capital of the world with over 55% of large, listed UK companies buying back at least 1% of their shares over the previous 12 months, a significantly higher proportion than historically was the case, and materially higher than other equity markets. Taking account of new listings and equity issuance from existing listed companies, the cumulative number of shares in the UK has shrunk by 11.5% over the past five years, more than seen in other developed markets. All other things equal, this will have weighed on market level dividends and dividend growth but have bolstered dividend cover at company level, ultimately enhancing dividend sustainability.

Your Investment Manager's view is that the UK market may now have reached a peak in terms of buyback activity. The partial re-rating of certain larger companies has, to some extent, undermined the case for buybacks. In some cases, we see capital being redirected towards organic investment and acquisition opportunities. Among smaller and mid-sized companies, however, which have not experienced the same degree of re-rating and remain relatively lowly valued, buyback activity looks set to continue. Your Investment Manager sees this as a source of ongoing return potential for the portfolio.

Market background

UK equities performed strongly over the period, outperforming most other major developed markets. Large caps outperformed mid and small caps, with the FTSE 100 Index delivering gains of 20.2%, passing through the 10,000 level for the first time ever in the early days of 2026. The mid cap FTSE 250 Index increased by a more modest but still impressive 11.6%. The FTSE All-Share, your Company's benchmark rose 18.9%.

The UK economy remained subdued but relatively resilient over the period. Market performance reflected the global nature of many UK-listed companies. A shift in global investor preferences prompted by growing concerns around valuation and concentration risk in US equities, particularly within the technology sector, has seen renewed interest in other regions and areas of the market. In this environment, sectors more closely associated with the 'old economy', which are well represented in the UK market, returned to favour in the period. Basic materials, utilities and healthcare were among the strongest performers, benefiting from valuation support and the broader shift in investor positioning.

By contrast, developments in artificial intelligence (AI) introduced greater nuance within the technology sector. While areas such as hardware and semiconductors continued to benefit, others - particularly parts of the software segment - came under pressure as investors reassessed the potential for disruption to established companies' business models. This distinction is relevant in a UK context, where the market has limited exposure to hardware but a greater representation of software and IT services businesses.

The global nature of these market dynamics, and the concentration of returns within a relatively narrow group of sectors, helps to explain the dispersion in returns across the market cap spectrum. While many of the companies most exposed to these trends are larger and more internationally diversified, performance has not been uniform across the large cap universe. The more modest performance from mid and small cap stocks reflects lower exposure to some of the more powerful secular trends, lingering concerns over the UK economy and its fiscal position, whilst lower liquidity in this area of the market has limited the impact of global investor flows.

Portfolio performance

Against this backdrop, your Company delivered a strong absolute return over the period, with a number of holdings benefiting from these trends.

Rio Tinto was a positive contributor over the period, supported by its attractive exposure to a diversified range of commodities, many of which benefit from favourable supply-demand dynamics. With strong balance sheet discipline, significant cash generation and leading positions in key markets such as iron ore, copper and aluminium, the business is well positioned to capture a range of long-term drivers, including the energy transition and data infrastructure investment.

The company has also been involved in fresh discussions with Glencore regarding a potential merger - a deal that has been discussed several times in recent years. Rio Tinto walked away from the deal in February, with the companies unable to agree key terms.

Outperformance from the mining sector reflects a broader theme of renewed interest in businesses linked to physical assets and long-term investment. Similarly, holdings such as SSE and Balfour Beatty performed well over the period, reflecting their exposure to infrastructure and essential services, with significant new projects generating attractive returns.

SSE performed well following a £2 billion capital raise to support its investment programme. We participated in the transaction, which enables double-digit growth in its regulated asset base through increased investment in its electricity networks, essential for the energy transition and to meet future demand. The successful execution of this raise helped to address market concerns around funding and was met with a positive share price reaction.

Balfour Beatty also contributed positively, supported by a strong pipeline of long-term infrastructure projects in the UK and the US, which provides good visibility on future growth. In recent years, the company has built an impressive track record of securing new business and managing the risks inherent in delivering large and complex projects. This has underpinned consistent operational performance and increasing returns to shareholders.

Standard Chartered was also a positive contributor over the period, benefiting from a favourable interest rate backdrop and strong growth in its Asian wealth management businesses. This growth reflects increasing client activity and rising demand for investment and advisory services, with momentum in this area a key driver of share price performance.

More broadly, however, performance across the financials sector was mixed, and your Company's exposure here detracted from returns in aggregate. The specialist lending company, ICG (formerly Intermediate Capital), was among the largest detractors, with its share price coming under pressure due to concerns about a downturn in the private credit cycle. This reflects a read across from developments in the US on a de-rating of international peer companies. ICG's underlying business has continued to perform well, with strong fund flows.

TP ICAP, the financial markets intermediary and data provider, was also weak over the period. Having previously benefited from growing investor interest in the value of its data and analytics business Parameta, the shares came under pressure as the company stepped back from plans to spin off this division amid more uncertain market conditions for data businesses.

Outside of financials, a small number of consumer-facing holdings also weighed on returns. Burberry was a detractor, reflecting volatility in sentiment towards luxury goods brands. The sector still appears to be bottoming out, but your Investment Manager is confident Burberry's operational recovery remains on track, positioning it well for a recovery in demand. Meanwhile, Whitbread came under pressure following further UK budget initiatives which will significantly impact its cost base. An activist shareholder subsequently emerged on the register.

Relative performance benefited from not holding several highly rated index constituents that came under pressure as markets reassessed the implications of AI for parts of the software and data analytics universe. There is increasing debate around the extent to which AI could disrupt data-driven business models that have historically delivered high margins and returns. While much of this reflects perceived rather than realised risk at this stage, it has led to a de-rating of several large companies not held in the portfolio, including Experian, London Stock Exchange, Sage and Compass. RELX, which is held in the portfolio, also de-rated for similar reasons. As valuations have adjusted downwards, your Investment Manager has been undertaking further work in these areas as part of our ongoing assessment of opportunities across the market.

Gearing also continued to make a positive contribution to performance over the period, reflecting the strength of underlying markets.

Portfolio activity

Portfolio activity increased over the period as the opportunity set evolved. Strong performance in parts of the market allowed your Investment Manager to take profits where valuations had become closer to our assessment of fair value and to redeploy capital into areas offering more attractive long-term value. Exposure to mining was increased, funded in part by reductions in consumer-exposed stocks, banks and real estate (following a bid for your Company's holding), alongside selective switching within consumer staples and industrials.

Within mining, your Investment Manager added to Rio Tinto and initiated a position in Glencore, reflecting conviction in both the outlook for key commodities and the companies' ability to deliver attractive returns through the cycle. A position was also initiated in Weir, which provides exposure to mining and infrastructure investment through its equipment and services businesses.

Your Investment Manager added to the position in RELX following detailed work to assess the potential impact of AI on data services and software business models. This analysis suggests that RELX's range of business analytics and decision-making tools across its risk, legal and scientific divisions should be relatively well insulated from disruption, with much of the perceived risk already reflected in the share price over the past nine months. By contrast, the position in Pearson was exited, reflecting concern that the AI risks may not yet be fully reflected in its valuation.

Within consumer staples and healthcare, your Investment Manager initiated a position in Reckitt Benckiser and added to positions in Haleon and GlaxoSmithKline whilst reducing Unilever. Infant nutrition litigation concerns have eased for Reckitt Benckiser, and the disposal of its Essential Home business has sharpened the focus on its remaining core portfolio, which continues to deliver strong growth, particularly in emerging markets. Meanwhile, the position in GlaxoSmithKline was increased as greater clarity on the US pricing environment has improved visibility, and discussions with management have reinforced our confidence in the strength of its HIV franchise, broader pipeline, and the attractiveness of the current valuation.

These additions were funded in part by the disposal of holdings where prior strong share price performance has resulted in more demanding valuations. Your Investment Manager exited the position in 3i Group on the basis that its valuation left little room for disappointment, as seen in the market reaction to slower French growth in the final quarter of 2025. The current valuation implies c. 5% like-for-like growth from discount retailer Action, its largest portfolio holding, plus significant space growth from around 400 new stores each year. These expectations look difficult to meet, and the position was sold.

Elsewhere, the position in Tesco was sold following a period of stronger share price performance. Similarly, the position in Balfour Beatty was trimmed following positive performance, and the portfolio's exposure to banks was reduced with trims of Lloyds and Standard Chartered.

The position in Associated British Foods was also sold. Your Investment Manager's initial investment thesis centred on the potential for value release through a separation of its Primark and food businesses, which has not materialised as expected. Primark had been operating without a permanent chief executive until it confirmed an appointment in March and its like-for-like sales have started to disappoint. Meanwhile, the challenges within the food division have extended into its higher quality ingredients business. Following the bid for purpose-built student property company Empiric by larger peer Unite, your Investment Manager exited the position.

Outlook

While it is pleasing to report on a period of positive performance, it would be inappropriate to extrapolate the strength of recent returns too readily. Post-period end, momentum has already been tested as tensions in the Middle East have escalated, unsettling markets and introducing a renewed source of uncertainty around energy prices, inflation and the path of interest rates. At the time of writing, the UK market remains in positive territory calendar year 2026, but what happens next will likely depend on how the conflict in Iran evolves and resolves, which is inherently difficult to predict.

Beyond this short-term uncertainty, the UK market continues to offer attractive valuations, both in absolute terms and relative to many other regions, while also providing a differentiated sector mix and broad exposure to global rather than purely domestic drivers.

These characteristics have been beneficial during the period under review and, in your Investment Manager's view, remain an important support for longer-term returns. Many of the UK's largest companies have delivered strong share price performance despite - perhaps even because of - their old economy roots. This has come through multiple expansion from very low levels of valuations and, in most cases, solid operational delivery of earnings growth, dividends and share buybacks, which look set to continue. Healthcare businesses should benefit from improved policy clarity and attractive product pipelines, banks are supported by more normal interest rates and, in some cases, growing wealth management activity in Asia and the UK, and mining companies are aided by favourable supply-demand dynamics and exposure to several of the enduring drivers of global growth and energy transition.

These larger, internationally diversified companies have, thus far, been the primary beneficiaries of renewed global interest in the UK stock market. There are also opportunities further down the market cap spectrum, where the portfolio has attractive exposure. Small and mid-sized businesses are currently trading at a meaningful discount to their larger peers and their longer-term history, which is unusual given their historically stronger growth profile. While this part of the market has lagged in recent years, the valuation gap now appears unusually wide and could provide scope for outsized returns in the years ahead.

Against this backdrop, your Investment Manager remains focused on building a carefully constructed portfolio of attractively valued companies, drawing on a wide range of opportunities across the market. It believes the UK market continues to offer a selectively compelling combination of valuation support, income and long-term total return potential.

Past Performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. For illustrative purposes only and not a recommendation to buy or sell shares or sectors.

Schroder Investment Management Limited

12 May 2026

Interim Management Report

Principal risks and uncertainties

The principal risks and uncertainties with the Company's business fall into the following risk categories: strategic; investment management; economic and market; custody; gearing; accounting, legal and regulatory; service provider; cyber; and ESG and climate change. A detailed explanation of the risks and uncertainties in each of these categories can be found on pages 32 to 35 of the Company's published annual report and financial statements for the year ended 31 August 2025.

The Company's principal risks and uncertainties have not materially changed during the six months ended 28 February 2026.

Going concern

Having assessed the principal risks and uncertainties, and the other matters discussed in connection with the viability statement as set out on page 36 of the published annual report and financial statements for the year ended 31 August 2025, the Directors consider it appropriate to adopt the going concern basis in preparing the financial statements.

Related party transactions

There have been no transactions with related parties that have materially affected the financial position or the performance of the Company during the six months ended 28 February 2026.

Directors' responsibility statement

In respect of the half year report for the six months ended 28 February 2026, the Directors confirm that, to the best of their knowledge:

-          the condensed set of Financial Statements contained within have been prepared in accordance with the United Kingdom Generally Accepted Accounting Practice in particular with Financial Reporting Standard 104 "Interim Financial Reporting" and with the statement of Recommended Practice, "Financial Statements of Investment Companies and Venture Capital Trusts" issued in July 2022 and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company as at 28 February 2026, as required by the Disclosure Guidance and Transparency Rule 4.2.4R; and

-          the half year report includes a fair review of the information as required by the Disclosure Guidance and Transparency Rules 4.2.7R and 4.2.8R.

The half year report has not been audited or reviewed by the Company's Auditor.

Ewen Cameron Watt

Chairman

For and on behalf of the Board

12 May 2026

Statement of Comprehensive Income

for the six months ended 28 February 2026 (unaudited)

		(Unaudited)				(Unaudited)			(Audited)
		For the six months				For the six months			For the year
		ended 28 February				ended 28 February			ended 31 August
		2026	2026	2026	2025		2025	2025	2025	2025	2025
		Revenue	Capital	Total	Revenue		Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000		£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss		-	38,086	38,086	-		5,098	5,098	-	13,373	13,373
Net foreign currency losses		-	(37)	(37)	-		-	-	-	(12)	(12)
Income from investments		3,383	-	3,383	2,878		-	2,878	10,332	-	10,332
Other interest receivable and similar income		16	-	16	-		-	-	92	-	92
Gross return		3,399	38,049	41,448	2,878		5,098	7,976	10,424	13,361	23,785
Management fee		(181)	(271)	(452)	(227)		(341)	(568)	(460)	(691)	(1,151)
Administrative expenses		(267)	-	(267)	(329)		-	(329)	(611)	-	(611)
Net return before finance costs and taxation		2,951	37,778	40,729	2,322		4,757	7,079	9,353	12,670	22,023
Finance costs		(226)	(339)	(565)	(350)		(524)	(874)	(643)	(965)	(1,608)
Net return before taxation		2,725	37,439	40,164	1,972		4,233	6,205	8,710	11,705	20,415
Taxation	3	(31)	-	(31)	-		-	-	(45)	-	(45)
Net return after taxation		2,694	37,439	40,133	1,972		4,233	6,205	8,665	11,705	20,370
Return per share (pence)	4	3.97	55.23	59.20	2.84		6.10	8.94	12.55	16.96	29.51

The "Total" columns of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return after taxation is also the total comprehensive income for the period.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

Statement of Changes in Equity

for the six months ended 28 February 2026 (unaudited)

		Called-up		Capital	Warrant	Share
		share	Share	redemption	exercise	purchase	Capital	Revenue
		capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 August 2025		6,946	9,449	2,011	1,596	30,522	178,049	7,673	236,246
Repurchase of ordinary
shares into treasury		-	-	-	-	(2,813)	-	-	(2,813)
Net return after taxation		-	-	-	-	-	37,439	2,694	40,133
Dividend paid in the period	5	-	-	-	-	-	-	(5,568)	(5,568)
At 28 February 2026		6,946	9,449	2,011	1,596	27,709	215,488	4,799	267,998

for the six months ended 28 February 2025 (unaudited)                                                                                                                              

		Called-up		Capital	Warrant	Share
		share	Share	redemption	exercise	purchase	Capital	Revenue
		capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 August 2024		6,946	9,449	2,011	1,596	34,834	166,344	10,381	231,561
Repurchase of ordinary
shares into treasury		-	-	-	-	(615)	-	-	(615)
Net return after taxation		-	-	-	-	-	4,233	1,972	6,205
Dividend paid in the period	5	-	-	-	-	-	-	(6,907)	(6,907)
At 28 February 2025		6,946	9,449	2,011	1,596	34,219	170,577	5,446	230,244

for the year ended 31 August 2025 (audited)

		Called-up		Capital	Warrant	Share
		share	Share	redemption	exercise	purchase	Capital	Revenue
		capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 August 2024		6,946	9,449	2,011	1,596	34,834	166,344	10,381	231,561
Repurchase of ordinary shares
into treasury		-	-	-	-	(4,312)	-	-	(4,312)
Net return after taxation		-	-	-	-	-	11,705	8,665	20,370
Dividend paid in the period	5	-	-	-	-	-	-	(11,373)	(11,373)
At 31 August 2025		6,946	9,449	2,011	1,596	30,522	178,049	7,673	236,246

Statement of Financial Position

as at 28 February 2026 (unaudited)

		(Unaudited)	(Unaudited)	(Audited)
		28 February	28 February	31 August
		2026	2025	2025
	Note	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		289,051	258,324	259,636
Current assets
Debtors		5,399	633	1,658
Cash and cash equivalents		3,391	1,773	1,520
		8,790	2,406	3,178
Current liabilities
Creditors: amounts falling due within one year	6	(29,843)	(26,568)	(30,486)
Net current liabilities		(21,053)	(28,080)	(23,390)
Total assets less current liabilities		267,998	230,244	236,246
Net assets		267,998	230,244	236,246
Capital and reserves
Called-up share capital	7	6,946	6,946	6,946
Share premium		9,449	9,449	9,449
Capital redemption reserve		2,011	2,011	2,011
Warrant exercise reserve		1,596	1,596	1,596
Share purchase reserve		27,709	34,219	30,522
Capital reserves		215,488	170,577	178,049
Revenue reserve		4,799	5,446	7,673
Total equity shareholders' funds		267,998	230,244	236,246
Net asset value per share (pence)	8	398.71	332.65	347.32

Registered in England and Wales as a public company limited by shares

Company registration number: 03008494

Notes to the Financial Statements

For the six months ended 28 February 2026

1. Financial Statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditor.

The figures and financial information for the year ended 31 August 2025 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditor which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

Basis of accounting

The financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, in particular with Financial Reporting Standard 104 "Interim Financial Reporting" and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued by the Association of Investment Companies in July 2022.

All of the Company's operations are of a continuing nature.

The accounting policies applied to these financial statements are consistent with those applied in the financial statements for the year ended 31 August 2025.

3. Taxation

The Company's effective corporation tax rate is nil, as deductible expenses exceed taxable income. Taxation on ordinary activities comprises irrecoverable overseas withholding tax.

4. Return per share

	(Unaudited)	(Unaudited)
	Six months	Six months	(Audited)
	ended	ended	Year ended
	28 February	28 February	31 August
	2026	2025	2025
	£'000	£'000	£'000
Revenue return	2,694	1,972	8,665
Capital return	37,439	4,233	11,705
Total return	40,133	6,205	20,370
Weighted average number of shares in issue during the period	67,787,304	69,396,551	69,031,408
Revenue return per share (pence)	3.97	2.84	12.55
Capital return per share (pence)	55.23	6.10	16.96
Total return per share (pence)	59.20	8.94	29.51

5. Dividends paid

	(Unaudited)	(Unaudited)
	Six months	Six months	(Audited)
	ended	ended	Year ended
	28 February	28 February	31 August
	2026	2025	2025
	£'000	£'000	£'000
2025 fourth interim dividend of 4.95p (2024: 6.7p)	3,366	4,651	4,651
First interim dividend of 3.25p (2025: 3.25p)	2,202	2,256	2,256
Second interim dividend (2025: 3.25p)	-	-	2,238
Third interim dividend of (2025: 3.25p)	-	-	2,228
	5,568	6,907	11,373

The 2025 fourth interim dividend was lower than previous interim dividends as a result of dividend smoothing earlier in the financial year. A second interim dividend of 3.25p (2025: 3.25p) per share, amounting to £2,258,000 (2025: £2,238,000) has been paid on the 30 April 2026 in respect of the year-ending 31 August 2026.

6. Creditors: amounts falling due within one year

	(Unaudited)	(Unaudited)
	Six months	Six months	(Audited)
	ended	ended	Year ended
	28 February	28 February	31 August
	2026	2025	2025
	£'000	£'000	£'000
Bank loan	26,000	30,000	26,000
Repurchases of the Company's own shares awaiting settlement	358	-	104
Other creditors and accruals	3,485	486	464
	29,843	30,486	26,568

The bank loan comprises £26.0 million drawn down on the Company's secured revolving credit facility with The Bank of Nova Scotia, London Branch.

7. Called-up share capital

	(Unaudited)	(Unaudited)
	Six months	Six months	(Audited)
	ended	ended	Year ended
	28 February	28 February	31 August
	2026	2025	2025
	£'000	£'000	£'000
Ordinary Shares of 10p each, allotted, called up and fully paid:
Ordinary shares in issue:
Opening balance of 68,019,152 (year ended 31 August 2025: 69,425,343 and period ended 28 February 2025: 69,425,343) ordinary shares of 10p each	6,801	6,942	6,942
Repurchase of 803,214 (year ended 31 August 2025: 1,406,191 and period ended 28 February 2025: 211,100) shares held in treasury	(80)	(21)	(141)
Closing balance of 67,215,938 (year ended 31 August 2025: 68,019,152 and period ended 28 February 2025: 69,214,243) shares in issue, excluding shares held in treasury	6,721	6,921	6,801
Shares held in treasury 2,247,405 (year ended 31 August 2025: 1,444,191 and period ended 28 February 2025: 249,100)	225	25	145
Closing balance of 69,463,343 (year ended 31 August 2025: 69,463,343 and period ended 28 February 2025: 69,463,343) shares in issue	6,946	6,946	6,946

8. Net asset value per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended 28 February	Six months ended 28 February	Year ended 31 August 2025
	2026	2025
	£'000	£'000	£'000
Net assets attributable to shareholders (£'000)	267,998	230,244	236,246
Shares in issue at the period end	67,215,938	69,214,243	68,019,152
Net asset value per share (pence)	398.71	332.65	347.32

9. Financial instruments measured at fair value

The Company's financial instruments that are held at fair value comprise its investment portfolio. At 28 February 2026, all investments in the Company's portfolio were categorised as Level 1 in accordance with the criteria set out in paragraph 34.22 (amended) of FRS 102. Accordingly, all investments are valued using unadjusted quoted prices in active markets for identical assets (31 August 2025 and 28 February 2025: the same basis applied).

10. Events after the interim period that have not been reflected in the financial statements for the interim period

The Directors have evaluated the period since the interim date and have not noted any other events which have not been reflected in the financial statements.

 

END