Aberforth Geared Value & Income Trust plc
Audited Annual Results for the year to 30 June 2026
The following is an extract from the Company's Annual Report and Financial
Statements for the year to 30 June 2026, comparative figures cover the period
from Incorporation on 29 March 2024 to 30 June 2025. The Annual Report is
expected to be posted to shareholders by 6 August 2026. Members of the public
may obtain copies from Aberforth Partners LLP, 14 Melville Street, Edinburgh EH3
7NS or from its website: https://www.aberforth.co.uk/trusts-and-funds/aberforth
-geared-value-income-trust-plc/. A copy will also shortly be available for
inspection at the National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
FINANCIAL HIGHLIGHTS (SUMMARY)
Performance (Total Return) Year to
30 June 2026
------------
Total Assets1 +3.9%
Ordinary Share NAV2 +2.5%
Ordinary Share +13.2%
Price4
ZDP Share NAV3 +7.0%
ZDP Share Price5 +8.3%
1-18 Refer to Note 2, Alternative Performance Measures, and the Glossary.
The ZDP Share NAV total return of 7.0% is on an Articles basis (see Note 7)
Dividends Declared
Second Interim Dividend per Ordinary Share 3.69p
Special Dividend per Ordinary Share 0.85p
The first interim dividend of 1.56p and the second interim dividend of 3.69p
represent the total underlying dividends for the year to 30 June 2026 of 5.25p
per Ordinary Share, 5% higher than last year. In addition, a special dividend of
0.85p is declared and reflects the strong income performance. Total dividends
for the year to 30 June 2026 amount to 6.10p per Ordinary Share.
The second interim and special dividend have an ex-dividend date of 6 August
2026, record date of 7 August 2026 and pay date of 27 August 2026.
THE COMPANY
Aberforth Geared Value & Income Trust plc (the Company or AGVIT) is a closed
-ended investment company incorporated on 29 March 2024. It has a fixed life of
seven years from launch to 30 June 2031 and its shares are traded on the London
Stock Exchange's Main Market. The Company acted as a rollover option for
shareholders in Aberforth Split Level Income Trust plc (ASLIT) in connection
with the winding up of ASLIT on 1 July 2024. Further information is set out in
Note 9, the Company's Prospectus issued on 28 May 2024, and is also available on
the Aberforth website www.aberforth.co.uk/trusts-and-funds/aberforth-geared
-value-income-trust-plc/.
CHAIRMAN'S STATEMENT
I present the second annual report of Aberforth Geared Value & Income Trust plc
("AGVIT" or "the Company"), which covers the year to 30 June 2026.
Review of Performance
Investment background
Shareholders will recall that the financial year began with a more constructive
backdrop for markets as fears eased of an economically damaging trade war.
However, the conflict in Iran ensured that geopolitical events again defined the
market narrative in the latter part of the Company's financial year. This latest
conflict provoked sharp rises in energy prices and reawakened concerns about
inflation. As interest rate expectations flipped from cuts to rises, equity
prices fell. In the context of UK smaller companies, domestic-facing businesses
were seen as more exposed to altering economic activity. They also had to
contend with a further bout of political uncertainty after the local elections
brought about another change of Prime Minister. The other defining theme within
equity markets over the last twelve months has been ever greater enthusiasm for
artificial intelligence (AI). While speculation swirls about which business
models will prove vulnerable to AI and companies perceived to be beneficiaries
of AI continue to attract disproportionate interest, it is my experience that
such conditions rarely endure indefinitely.
For value investors, such as Aberforth, this environment has created a fertile
ground for investment opportunities. It reinforces my confidence both in the
qualities of the attractively valued portfolio, which are outlined in the
Managers' Report, and in AGVIT's capital structure.
Portfolio performance
The table below sets out the Total Assets total return performance of 3.9% over
the year to 30 June 2026. It measures the portfolio return and is unaffected by
AGVIT's capital structure. AGVIT's investment objective and capital structure
reduce the relevance of assessing its performance relative to an equity index.
Nevertheless, for context, the table also sets out performance of small
companies in the form of the Deutsche Numis Smaller Companies Index (excluding
Investment Companies). This index, abbreviated throughout this report as DNSCI
(XIC), is the Company's opportunity base of small UK quoted companies. Its total
return was 7.1% over the year. Larger companies fared much better, with the FTSE
All-Share generating a total return of 21.9% over the year.
Total Return Investment universe - DNSCI (XIC) Total Assets
6 months to 31 December 2025 5.3% 0.0%
6 months to 30 June 2026 1.8% 3.9%
12 months to 30 June 2026 7.1% 3.9%
The financial year was one of contrasting halves. My comments in the interim
statement covered a challenging first half for AGVIT's portfolio. This gave way
to a more encouraging second six months, despite the conflict in Iran. The
financial year ended particularly strongly for smaller companies and AGVIT,
which illustrates what is possible when the market focuses on the asset class
and on the Company's investment opportunity. As usual, the Managers' Report
delves into AGVIT's Total Assets total return, bringing to light influences on
performance over the year to 30 June 2026.
Ordinary Shares NAV performance
Total Return Total Assets Ordinary NAV
6 months to 31 December 2025 0.0% -1.5%
6 months to 30 June 2026 3.9% 4.0%
12 months to 30 June 2026 3.9% 2.5%
The Ordinary Shares receive all income earned by AGVIT, as well as all capital
returns once the ZDP Shares' entitlement has been repaid. Their performance is
affected by the gearing provided by the ZDP Shares.
In the first half of the year, the portfolio's capital performance was below the
ZDP Shares' entitlement rate. Performance improved in the second half of the
year - the portfolio return exceeded the hurdle imposed by the ZDP Shares and so
the Ordinary Share NAV rose by more than did Total Assets. Over the full twelve
months to 30 June 2026, the portfolio's capital performance was below the ZDP
Shares' entitlement rate. Therefore, the Ordinary NAV total return of 2.5% was
below the Total Assets total return of 3.9%.
Ordinary Share price performance
Ordinary NAV Discount Discount Share price Total return
Shares
Total 30 June 2025 30 June 2026
return
12 months to +2.5% 16.2% 8.2% +13.2%
30 June 2026
I was encouraged by the Ordinary Share price performance. The 13.2% share price
total return reflected the positive NAV total return, together with a narrowing
of the difference between the NAV per Share and the Share Price. This discount
moved from 16.2% to 8.2% over the twelve months to 30 June 2026. It may be that
the stockmarket is beginning to understand the opportunity in small UK quoted
companies, particularly when accessed through an investment trust with AGVIT's
structure.
Income performance
Ordinary Investment income Revenue Return (%) Revenue Return(p)
Share
Revenue
12 months to +5.6% +3.6% 7.10p
30 June 2026
My Chairman's Statement in the Half Yearly Report described the good income
experience from the portfolio. Pleasingly, this was bettered in the second half
of the year. The overall income performance for the year ended 30 June 2026
exceeded the Managers' estimates at the start of the year and highlights the
resilience of AGVIT's portfolio of smaller companies.
The strength of the income component of the investment objective performance
benefited from the "yield roll" dynamic, which is described in the Managers'
Report. AGVIT's Investment income was 5.6% higher year-on-year. Some one-off
factors, including five special dividends, were helpful. Even with these
excluded, the underlying rate of Investment income growth was a healthy 4.9%.
The Revenue Return per Ordinary Share for the year ended 30 June 2026 was 7.10p,
3.6% higher than the previous period's 6.85p.
ZDP Shares
The ZDP shares fund a proportion of the investment portfolio and gear the
returns of the Ordinary Shares. The ZDP Shares have a Final Capital Entitlement
of 160.58p on the Company's planned winding up date of 30 June 2031. In the year
to 30 June 2026, the ZDP Share NAV increased to 114.48p. The ZDP Share price at
30 June 2026 was 117.00p, a 2.2% premium to NAV. The projected final cumulative
cover of the ZDP Shares was 2.1 times, which compares with 2.0 times at launch
on 1 July 2024.
Dividends
Per Ordinary Revenue Ordinary Dividends Special Dividend Retained Revenue
Share
12 Months to 7.10p 5.25p 0.85p 1.00p
30 June 2026
The Company's policy is to distribute a significant proportion of its net
revenue in the form of dividends to Ordinary Shareholders. Consistent with this,
the Board declares a second interim dividend of 3.69p per Ordinary Share for the
year to 30 June 2026. Together with the first interim dividend of 1.56p paid on
9 March 2026, the total Ordinary dividend with respect to the year is 5.25p per
Ordinary Share, 5% higher than last year.
In addition, the Board declares a special dividend of 0.85p per Ordinary Share
for the year to 30 June 2026. This reflects the special income contribution from
investee companies, which are not expected to recur, and the requirement for
AGVIT to comply with HMRC's minimum retention test for investment trusts.
After accounting for the total dividends of 6.10p, AGVIT will retain 1.00p of
revenue. The ability to retain revenue and to create flexibility to support
dividends in future periods is one of the main structural advantages of an
investment trust. At this stage in the Company's planned life, the Board
believes that this is a prudent level of retention given the on-going economic
and geopolitical uncertainties. After accounting for the Ordinary and Special
dividends declared today, AGVIT's revenue reserves per Ordinary share will total
2.00p as at 30 June 2026.
The details of these dividends are described in the Financial Calendar on page
62 of the Annual Report.
Annual General Meeting (AGM)
For those Shareholders who would like to meet members of the Board and
Aberforth's investment team in-person, the AGM of the Company will be held at 14
Melville Street, Edinburgh EH3 7NS at 11.00am on 2 November 2026. Further
details of the AGM are set out in the Notice of the Meeting on page 66 of the
Annual Report.
Outlook and conclusion
The past year was once again marked by economic and geopolitical uncertainty.
The peace negotiations between the US and Iran remain volatile, and fighting has
recently once again escalated, but I would note that the oil price has dropped
sharply from its mid-conflict levels. Meanwhile, perceptions of the UK
stockmarket and of companies operating in the UK economy are likely to remain
coloured by political uncertainty, at least until our new Prime Minister makes
clear his policies and priorities. Investor scepticism is understandable,
though it is intriguing that larger UK companies have shrugged off these "big
picture" issues. I take encouragement from previous cycles, in which the strong
performance of larger companies eventually broadens to smaller companies. It is
unclear when the clouds over the asset class will lift, but, when I look at the
valuations, it seems to me that many of the risks are already factored into the
share prices of small UK quoted companies.
Turning to AGVIT, progress over the first two years of the planned life has been
modest but positive. I note that the combination of the Ordinary Share NAV and
dividends already paid to Shareholders is above the issue price at 103.5p. So
far, income has led the way, but my fellow directors and I are confident in
AGVIT's prospects for both capital and income progress in the coming years. Our
confidence in the outlook is rooted in three important features of the Company's
offering to Shareholders.
· First, the asset class presently combines strong businesses and unusually
attractive valuations. The valuations largely reflect broader market concerns
rather than the resilience of underlying businesses, which is evident in AGVIT's
strong income performance.
· Second, Aberforth's investment process is well suited to current
conditions. The team-based approach ensures continuity and broad coverage across
the DNSCI (XIC), while constructive engagement with investee companies can also
help close valuation gaps in a stockmarket that often requires a catalyst to
take notice.
· Third, AGVIT benefits from being an investment trust with a fixed life. Its
closed-end status is ideal for investment in a relatively illiquid asset class.
The fixed life gives Shareholders the opportunity to realise their investments
close to NAV on the planned winding-up date. Additionally, the Board has the
flexibility to aim for a steadily rising dividend, prudently adding to revenue
reserves in the good times and using them in more difficult conditions. Finally,
the gearing provided by the ZDP Shares to the Ordinary Shares should enhance
investment returns if the asset class's attractive valuations and Aberforth's
investment approach deliver what I think they can.
These attributes offer no assurance of near-term performance. However, my fellow
Directors and I believe they improve the probability of a favourable investment
experience for both classes of shareholder over the Company's life.
The Board very much welcomes the views of Shareholders and is available to talk
to you directly. My email address is noted below.
Angus Gordon Lennox
Chairman
29 July 2026
Angus.GordonLennox@aberforth.co.uk
Managers' Report
Introduction
AGVIT's total assets total return, which measures the ungeared portfolio's
performance, was +3.9% in the twelve months to 30 June 2026. The investment
universe, from which the Managers select AGVIT's holdings, is the DNSCI (XIC).
Its total return was +7.1%. Larger UK companies were much stronger, with the
FTSE All-Share ahead by 21.9% in total return terms.
The first half of the financial year was difficult for AGVIT. Its total return
in the six months to 31 December 2025 was 0.0%, which compares with +5.3% for
the DNSCI (XIC). The second half brought improved performance. AGVIT generated a
total return of +3.9%, while the DNSCI (XIC) was up by 1.8%. The following
paragraphs provide context for this improvement.
Investment background
As described in the half yearly report, small UK quoted companies faced two
challenges in the six months to 31 December 2025. For those companies earning
their profits outside the UK, the issue was Donald Trump's tariffs, which
threatened to impose higher costs and working capital requirements on
businesses. For domestic-facing companies earning their profits within the UK,
the challenge was the country's fiscal situation and fear of what the
Chancellor's Budget late in 2025 held in store for the private sector.
In the event, neither of these issues proved as serious as initially feared and
the second half of AGVIT's financial year started well for smaller companies.
The impact of the tariffs was mitigated by deals with trading partners and by
the US Supreme Court's ruling on the legitimacy of the tariffs. Meanwhile, the
Budget was not as hostile to the UK's private sector as was feared. Macro
economic data and trading updates from companies indicated stronger activity in
January and February, which was reflected in good investment returns for AGVIT
and smaller companies more broadly.
However, the encouraging start was brought to an abrupt halt in March by war in
Iran. With a decline of 12% in March, the DNSCI (XIC) recorded its fifth worst
month in Aberforth's 35 year history. The companies whose share prices suffered
most tended to be those close to the UK housing market. In this, the stockmarket
was mindful of Russia's invasion of Ukraine and anticipated that the
inflationary pressure from higher oil prices would necessitate higher interest
rates and renew the squeeze on household budgets.
As well as the threat of another inflationary jolt, UK equities had to contend
with deeper political uncertainty. May's local government elections precipitated
another change of Prime Minister. The drama played out in the gilt market more
than in the equity market, as the premium paid on ten year gilt yields over ten
year US bond yields returned to 2022 "mini Budget" levels. Ensuing commentary
focused on the UK's economic and societal problems, but it is notable that the
gilt yield premium had narrowed by 30 June 2026 and that sterling barely moved
against both the dollar and the euro. Markets appear to have taken the view that
the UK's fiscal situation limits the options for our next Prime Minister.
The other main feature of AGVIT's financial year was the on-going investment
boom in artificial intelligence (AI). The American technology titans continued
to announce ever larger capital expenditure plans as they attempt to scale
computing power to meet anticipated AI demand. Uncertainty about the funding of
these ambitions was partially addressed in June when Alphabet announced a
massive equity issue. This was followed by the initial public offering in
SpaceX, the vast majority of whose $2 trillion valuation is attributable to its
AI ventures.
Of course, most companies are not at the forefront of AI development. As the
market focused on vulnerability to AI adoption more than on its efficiency
benefits, many share prices came under pressure, particularly during the second
half of the financial year. Sectors such as software, estate agency, recruitment
and insurance felt the effects. Exposure to these areas meant that AI has on
balance been a negative influence on the performance of the UK stockmarket's
small and large companies over the past twelve months.
Analysis of performance and portfolio characteristics
In the twelve months to 30 June 2026, AGVIT's total asset total return was
+3.9%. The return from the DNSCI (XIC), which is AGVIT's investment universe,
was +7.1%. The following paragraphs provide context and explanation for this
performance and for the characteristics set out in the table below. They also
set out important features of the portfolio's positioning, which are likely to
influence future performance.
30 June 2026 30 June 2025
Portfolio Characteristics AGVIT DNSCI (XIC) AGVIT DNSCI (XIC)
Number of companies 67 342 68 343
Weighted average market capitalisation £720m £1,233m £671m £1,132m
Weighting in "smaller small" companies* 42% 17% 44% 20%
Weighting in companies with net cash** 46% 32% 38% 30%
Portfolio turnover over prior 12 months 26% n/a 12% n/a
Price earnings (PE) ratio (historical) 11.2x 13.0x 10.7x 14.9x
Dividend yield (historical) 5.5% 3.2% 5.3% 3.4%
Dividend cover (historical) 1.6x 2.4x 1.8x 2.0x
*"Smaller small" DNSCI (XIC) members that are not also FTSE 250 members.
**Tracked Universe - explained below in Balance Sheets section.
Themes
The investment background above described top-down influences on the stockmarket
moves in the year to 30 June 2026. As the following comments explain, AGVIT's
experience of these themes was mixed.
· Artificial intelligence on balance was a negative for AGVIT's performance.
The share prices of software companies, recruiters and media businesses,
including those owned by AGVIT, weakened as AI concerns developed. However, this
effect was mitigated by a strong performance from an investee company whose
largest customers are manufacturers of equipment for the semiconductor industry.
The Managers are working on non-holdings that have been victims of the AI
excitement to determine whether these are now investment opportunities.
· Housebuilding, including the housebuilders themselves and suppliers to the
industry, was a significant drag on AGVIT's performance. The industry is
confronted by demand uncertainty amid cost-of-living concerns and renewed cost
inflation as higher energy prices feed through the supply chain. Valuations are
now extremely low, with price-to-book ratios back to levels last seen in the
global financial crisis.
· Oil exposure had a neutral effect on performance over the twelve months as
a whole, but AGVIT's holdings in oil and gas producers were a useful mitigation
when the Iran war started. The motivation for these holdings was the extremely
low valuations that the stockmarket attributed to oil and gas producers, despite
their strong cash generation and willingness to pay dividends. There was little
in the companies' valuations for the chance that geopolitical instability might
lead to a higher oil price.
Size
AGVIT's portfolio retains a relatively high exposure to the "smaller small"
companies within the DNSCI (XIC). At the end of June, the weighting was 42%,
which was significantly greater than the index's 17%. The reason is the
considerably lower valuations that the stockmarket attributes to its smaller
constituents, which is demonstrated in the Valuations section later in this
report.
This aspect of AGVIT's portfolio positioning means that investment performance
is affected by the stockmarket's preference for larger or smaller companies in a
given period. Over the long term, "smaller small" companies have out-performed
"larger small" companies, just as the overall DNSCI (XIC) has out-performed the
FTSE All-Share. In the twelve months to 30 June 2026, "smaller small" companies
out-performed "larger small" companies and so AGVIT's size positioning helped
investment performance.
Style
The Managers invest AGVIT's assets in accordance with their value investment
philosophy. The stockmarket's appetite for value stocks is more volatile. To
gauge style effects within the DNSCI (XIC), the Managers use analysis by London
Business School (LBS). This is based on price to book ratios: a high price to
book denotes a growth stock and a low price to book a value stock. When
selecting stocks for AGVIT's portfolio, the Managers use a broader range of
valuation techniques, but the LBS approach provides a useful indication of the
market's style preference.
The DNSCI (XIC)'s value stocks have out-performed the index as a whole over
Aberforth's 35 year history, which was also the case in AGVIT's first financial
year. However, value stocks under-performed during the year to 30 June 2026.
This meant that style, as measured by the LBS analysis, was a hindrance to
AGVIT's investment return.
Balance sheets
The following table sets out the balance sheet profile of AGVIT's portfolio and
of the Managers' Tracked Universe, which is a subset of the DNSCI (XIC). It
represents 99% by value of the index as a whole and is made up of the 237
companies that the Managers follow closely.
Weight in companies with: Net cash Net debt/EBITDA Net debt/EBITDA Other*
< 2x > 2x
Tracked Universe 2026 32% 41% 22% 5%
Portfolio 2026 46% 37% 12% 5%
*Includes loss-makers and lenders
Small companies remain financially robust, but the stockmarket does not appear
to be discriminating on the basis of balance sheet strength at present. This has
seen AGVIT's exposure to companies with net cash on their balance sheets
increase to 46%. Most of the exposure to higher leverage, of two times EBITDA
and above, comes through businesses with asset backing, such as property and pub
companies. The category also includes companies with depressed profitability or
excessive debt, in which circumstances the Managers' level of engagement is
particularly high.
The strength of balance sheets has supported further dividend growth and
sustained the high incidence of share buy-backs. In the twelve months to 30 June
2026, 24 of AGVIT's investee companies took advantage of their attractive
stockmarket valuations to buy back shares. The economic logic of buy-backs at
such valuations is compelling as long as they do not deprive underlying
businesses of capital needed for the maintenance of assets and prudent growth.
Income
At 30 June 2026, the average historical dividend yield of AGVIT's 67 portfolio
holdings was 5.5% and average dividend cover was 1.6x. The income experience in
the twelve months to 30 June 2026 was positive. Excluding special dividends,
AGVIT's dividend income rose by 4.9% year-on-year. The source of this growth was
a combination of higher dividends paid by investee companies and portfolio
management activity. The latter stems from "value roll", which is the Managers'
term for the recycling of capital from companies with lower upside to target
price (and therefore usually lower dividend yields) to companies with higher
upsides (and therefore usually higher dividend yields).
Nil Payer Cutter Unchanged Payer Increased Payer Returner
7 10 20 29 1
The table above categorises AGVIT's 67 holdings according to their most recent
dividend actions. AGVIT's positive income experience was underpinned by the 29
companies that increased their dividends and by the company that recommenced
dividend payments. AGVIT also received five special dividends from its holdings
in the twelve months to 30 June 2026.
Corporate Activity
Heightened takeover interest in small UK quoted companies continued in the year
to 30 June 2026, despite the uncertainties arising from the war in Iran. At the
end of the period, there were eight recommended offers waiting to complete, of
which three were for companies held by AGVIT. On top of these eight formal
offers, seven companies had received approaches and remained in talks with
potential acquirers. Of these, AGVIT had a holding in one.
The terms of the eight recommended deals are consistent with recent averages
within the DNSCI (XIC). Over the past three years, the average premium to the
share price has been 45%, while the average EV/EBITA has been 14.6x. This is
well above the portfolio's 7.8x EV/EBITA ratio for 2026. As long as such low
valuations prevail in the stockmarket, it is likely that M&A activity will
continue at an elevated rate. However, the risk remains that boards of target
companies are too ready to engage from a disadvantageous starting point. There
were further instances of this in the year to 30 June 2026 and the Managers
again engaged to improve terms or to embolden the target board to pursue its
standalone strategy. Such engagement is not always successful, but the
motivation is always to improve investment returns for AGVIT and its
Shareholders.
A corollary of the low valuations that the stockmarket currently ascribes to
small UK quoted companies is a continued paucity of initial public offerings.
However, the Managers' opportunity base is expanding as five more companies
announced moves up from AIM to the Main Market in the year to 30 June 2026.
AGVIT does not invest in AIM quoted companies except in limited circumstances,
one of which is when an AIM company makes a public announcement of its intention
to move up. Of the five promotions, AGVIT has holdings in one.
Value roll and portfolio turnover
The main influence on AGVIT's portfolio turnover in any period is usually the
stockmarket's appetite for small UK quoted companies. If prices and valuations
are rising, the upsides to the Managers' target prices are likely to be
narrowing. All else being equal, this would encourage the rotation of AGVIT's
capital from companies with lower upsides to those with higher. Portfolio
turnover is defined as the lower of purchases and sales divided by the average
portfolio value. Over the twelve months to 30 June 2026, turnover was 26% and
was influenced by the period's significant takeover activity.
Portfolio categorisation
The table below gives additional insight into how the Managers think about the
portfolio and the circulation of capital within it. The four categories, into
which the 67 holdings are split, correspond to the lifecycle of an investment -
a successful holding tends to move through the categories from left to right.
The categorisation also helps prioritise engagement activity, with more
intensive engagement typically required for companies in the left-hand
categories.
Under review Work in progress Self-help On track
Portfolio weight 4% 8% 53% 35%
Number of stocks 5 7 38 17
Total return 6 -23% -3% +2% +23%
months to 30 June
2026
EV/EBITA 2026 12.8x 6.2x 8.0x 8.0x
Engagement High High Moderate Normal
intensity
· Work in progress contains companies with an issue or problem that has hit
the share price to an unjustified degree. Engagement with these companies is
high as the Managers seek to understand the issue and how the board intends to
address it.
· Self-help represents companies that have also had an issue but where a plan
to address the issue is being executed. Over half of the portfolio sits here.
This reflects the fact that most smaller companies are not at the mercy of macro
economic conditions, but are resilient, well-managed and able to create value
under their own steam. Engagement intensity here is elevated but lower than for
Work in Progress.
· On track contains companies whose previous issues have been addressed and
are now trading as planned. Engagement continues but is at a normal level.
· Under review is for companies that have an issue, but, unlike Work in
progress, the Managers have not yet been able to determine whether the problem
has been adequately reflected in the share price. Engagement levels for this
category are therefore high.
· With their contrarian approach to investment, the Managers are drawn to
companies with resolvable issues, contending that value opportunities arise as
the stockmarket tends to overreact. It follows that the vast majority of new
holdings are within the Work in progress or Self-help categories. If the
investment case pans out as envisaged, companies are likely to move to the right
- from Work in progress through Self-help to On track - before leaving the
portfolio. Once in On track, it is likely that the stockmarket values companies
closer to the Managers' target valuations and that these should become sources
of capital.
· Under review only contains existing holdings, those where the original
investment case has been blown off course. More often than not, the Managers'
research and engagement convince them to add to companies in this category.
Indeed, some of the Managers' biggest winners over the years have slipped from
one of the other categories into Under review before recovering and progressing
rightwards.
· Moving through the categories from left to right, potential upside to
target prices falls, though confidence in target prices rises. There is no
strong pattern to the average EV/EBITA ratios. This is because the underlying
business issues that determine the categorisation can often be reflected in
depressed profitability. This is particularly the case for those companies in
Under Review.
Valuations
The historical price earnings ratios (PE) for the portfolio was 11.2x at 30 June
2026, which is below the long term average of 11.9x for the Managers' other
client portfolios. Similarly, the 13.0x PE for the smaller companies was below
its long term average of 13.5x. In contrast, the strong share price performance
of large companies in recent years has pulled the historical PE of the FTSE All
-Share up to 16.0x, which is above its long term average of 15.3x. The PE
relative of small companies against large companies is now 0.81. This 19%
discount compares with a long term average of 11%, which points to the potential
re-rating available to AGVIT's asset class.
The superior share price performance of larger companies is not unprecedented
but is unusual. It is likely due to relative profit growth rates. Over time,
small companies increase their profits at a higher rate than do large companies.
However, in recent years, industries such as banking, mining and oil, which are
big components of the FTSE All-Share but small components of the DNSCI (XIC),
have enjoyed a period of good profit progression. At the same time, small
companies have seen their profit growth hampered by their greater exposure to
the domestic economy. Consequently, the usually higher profit growth of small
companies has not been forthcoming. The Managers expect that normal service will
be resumed since small companies remain fundamentally resilient and will benefit
from a less uncertain economic backdrop. Moreover, it is unclear whether the
industry-specific boosts to large company profit growth will repeat.
The table below turns to forward valuations for the portfolio and for the
investment universe. It uses the Managers' favoured metric, EV/EBITA (enterprise
value to earnings before interest, tax and amortisation). Ratios are set out for
the portfolio, the Tracked Universe and certain subdivisions of the Tracked
Universe. The profits underlying the ratios are based on the Managers' forecasts
for each company that they track. The bullet points following the table
summarise its main messages.
EV/EBITA 2025 2026 2027
AGVIT's portfolio (67 stocks) 8.6x 7.8x 7.0x
Tracked Universe (237 stocks) 11.4x 10.5x 9.2x
- 33 growth stocks 18.2x 16.6x 14.8x
- 204 other stocks 10.6x 9.8x 8.6x
- 111 overseas facing stocks* 11.2x 10.2x 8.7x
- 107 domestic facing stocks* 11.0x 10.6x 9.6x
- 135 "Smaller small" stocks 8.5x 8.0x 7.0x
- 102 "Larger small" stocks 12.5x 11.4x 10.1x
*19 stocks within the Tracked Universe fell outwith the definition of overseas
or domestic facing stocks and are not presented in the table above.
· The ratios decline over the three years shown. This is consistent with the
Managers' expectation of profit growth and strengthening balance sheets, which
reduces the enterprise value. The estimates underlying the ratios of 2026 and
2027 are vulnerable to revision as the impact of the Iran war feeds through to
the domestic economy. So far, few companies have adjusted their outlooks to
reflect this uncertainty.
· The average EV/EBITA multiples of the portfolio are lower than those of the
Tracked Universe. This reflects the Managers' value investment style and the
influence of the more highly valued growth stocks on the Tracked Universe's
multiples.
· The valuation of overseas facing companies (those with more than 60% of
revenues outside the UK) is similar to that of domestic facing companies (those
with more than 60% of revenues in the UK). For much of the last ten years,
domestic companies have had lower valuations, owing to the EU referendum and
lockdown during the pandemic. However, the gap has closed as overseas earners
have had to contend with the US tariffs and higher costs arising from the war in
Iran. This has expanded the range of potential investments for the Managers.
· The "smaller small" companies within the DNSCI (XIC) remain more
attractively valued than do the "larger smalls". This explains why AGVIT has a
much higher exposure to the "smaller smalls" than does the DNSCI (XIC).
· Takeovers within the DNSCI (XIC) over the past three years were struck on
average on a multiple of 14.6x. This compares with the portfolio's 2026 EV/EBITA
of 7.8x.
Outlook and conclusion
Despite the oil price having declined sharply from its early April peak, it is
difficult to have full confidence in the peace negotiations between the US and
Iran. As long as peace does hold, pressure on economies and markets should ease.
However, some damage will likely prove to have been done as the oil price spike
feeds through to inflation rates and to monetary policy. For the UK, this means
that interest rate cuts, which were widely expected before the onset of the Iran
war, are now unlikely. Indeed, unchanged interest rates in 2026 would be a good
outcome for near term economic activity.
The other main issue confronting the UK economy is domestic politics. Successive
governments have implemented policies that have squeezed the private sector and
undermined the UK's competitiveness. Policies on energy, land and labour have
hampered economic growth and contributed to a higher cost of capital for
companies, households and the government itself. This state of affairs
influences today's remarkable combination of very strong private sector balance
sheets and extremely depressed confidence. This combination points to the
potential release of pent-up activity when economic conditions stabilise and
politics turns more supportive of the private sector.
It seems improbable that government's role in the economy will diminish under
Andy Burnham. However, it is to be hoped that his dirigiste tendencies are
better focused and, with a more united Labour party behind him, can meet the
growth ambitions espoused by his predecessor. He does, though, have only three
years to prove himself and markets are likely already to be looking ahead to the
next General Election in 2029. It is frustrating that none of the credible
winners of that election seem inclined at this point to unwind the years of
government encroachment on the private sector. However, it is encouraging that
government's role in bringing the UK economy to this point is now being aired
and debated more broadly.
Faced with unhelpful government policy and geopolitical shocks, the operational
performance of small UK quoted companies has been remarkably good in recent
years. The ramifications of the Iran war mean that profit progress in 2026 is
likely to be modest. However, cash generation and balance sheets are strong.
Most companies in 2025 invested for growth, with capital expenditure running
ahead of depreciation, and many continue to return value to shareholders through
growing dividends and share buy-backs. There is no indication that the potential
profitability has been impinged by exogenous events and so it is reasonable to
expect small companies to thrive amid more stable economic conditions. In the
meantime, the scope for self-help among AGVIT's holdings is considerable, as set
out in the categorisation analysis presented above.
For now the resilience of small UK quoted companies is largely being overlooked
in a financial world obsessed by AI. The on-going investment in AI and its
enabling technologies is eclipsing the previous investment booms that have
punctuated economic and stockmarket history. It is to be hoped that good returns
will be earned on the investment, by users of the technology if not by those
deploying the capital.
As those asset classes not deeply involved in AI vie for the attention of
investors, there is some encouragement for small UK quoted companies. First, the
impressive recent performance of the FTSE 100 shows that "Britishness" itself is
not a barrier to broader interest from investors. Second, smaller companies are
attracting the attention of overseas capital, albeit not yet in an extensive
fashion. This sporadic interest is evident in both takeovers, which seem likely
to continue at elevated rates, and in the on-going change of many share
registers. The incoming investors are often based overseas and frequently share
the Managers' constructive approach to engagement. They have been attracted by
the valuation of the asset class and by the quality of the companies. This
evolution of share registers from "weak hands" to "strong hands" highlights the
opportunity and can itself contribute to a broad re-rating of the asset class in
due course.
For now, the valuations of AGVIT's portfolio and of smaller companies are still
below their long term averages. Such conditions raise the likelihood of good
prospective investment returns. The outlook is improved by how the Managers
invest AGVIT's capital. Three aspects stand out - the value investment
philosophy, the active management of the portfolio through "value roll", and the
discreet engagement with the boards of the investee companies. These features
have contributed to the good returns that the Managers have generated for their
clients over 35 years and seem no less relevant today.
Finally, as the Chairman's Statement describes, AGVIT also has structural
advantages that derive from its investment trust status, such as gearing and the
flexibility to aim for steadily rising dividends. On top of these, AGVIT's
closed-end status is well suited to operating in a relatively illiquid asset
class, taking significant stakes in holdings and supporting companies over time.
The Managers therefore remain confident that AGVIT's structural and portfolio
characteristics will generate good future investment returns that are consistent
with AGVIT's investment objectives.
Aberforth Partners LLP
Managers
29 July 2026
FINANCIAL HIGHLIGHTS
Total Return Performance - see note 7 for further explanation
Period to 30 June Ordinary Share ZDP Share
2026
Total Assets1 NAV2 Share Price4 NAV3 Share Price5
1 year 3.9% 2.5% 13.2% 7.0% 8.3%
Annualised 3.2% 1.9% -1.8% 7.0% 8.2%
Since Inception18
(including launch
costs)
Since Launch18 4.1% 2.9% -1.8% 7.0% 8.2%
(excluding launch
costs)
Cumulative 6.5% 3.8% -3.6% 14.5% 17.0%
Since Inception18
(including launch
costs)
Since Launch18 8.4% 5.9% -3.6% 14.5% 17.0%
(excluding launch
costs)
The ZDP Share NAV
total return is on an
Articles basis (see
note 7).
Ordinary Share
Capital Net Share Discount6 / ZDP:Equity
Asset Price (Premium)7 Gearing
Value Ratio9
per
Sharea
------ ------ ----------- -----------
----- ---- -
30 June 96.1p 88.3p 8.2% 44.4%
2026
30 June 99.6p 83.5p 16.2% 40.0%
2025
Inception18 100.0p 100.0p 0.0% 37.5%
The total return per Ordinary Sharea for the year to 30 June 2026 was 2.39p
(2025: 1.71p).
Revenue Revenue Ordinary Special Cumulative Ongoing
Dividends per Dividends per Charges11
Return Sharea Share Retained Revenue
Reserves per
per Share16
Sharea
------- ----- ------------ ----------- ---------
---- ----- ---
30 June 7.10p 5.25p 0.85p 2.00p 1.5%
2026
30 June 6.85p 5.00p 0.85p 1.00p 1.4%
2025
Zero Dividend Preference Share (ZDP Share)
Net Share Discount6 Annual Projected Final Gross
Asset / Return Cumulative Redemption
Value Price (Premium)7 Cover13 Yield15
per per
Sharea
Sharea
------ ------ ---------- ------ ------------ ------------
------ ---- - ----
-
30 June 113.8p 117.0p (2.8)% 7.6p 2.1x 6.5%
2026
30 June 106.2p 108.0p (1.7)% 7.1p 2.0x 6.8%
2025
Inception18 100.0p 100.0p 0.0% n/a 2.0x 7.0%
The ZDP net asset value per share is 114.48p on an Articles basis at 30 June
2026 (2025: 107.00p).
Hurdle Rates10
Ordinary ZDP Shares
Shares
Annualised Hurdle Rates to return
Annualised
Hurdle
Rates to
return
100p Share Zero 160.58p Zero Value
Price Value
---------- ------ ------ ------------ ------------
-- ------ ------
30 June 5% 3% -14% -14% -65%
2026
30 June 4% 2% -12% -12% -58%
2025
Inception18 3% 3% -10% -10% -53%
Redemption Yields as at 30 June 2026 (Ordinary Shares)
Annualised
Ordinary
Share
Redemption
Yields14
Dividend
Growth
(per
annum)
Capital -20% -10% 0% +10% +20% Terminal NAV17
Growth (per
annum)
---------- ------ ------ ------ ------ ------------
-- ------ ------ ------ ------
-20% -47% -39% -31% -22% -13% 0p
-10% -24% -21% -17% -12% -6% 15p
0% -1% 0% 2% 5% 9% 68p
+10% 14% 15% 17% 19% 21% 148p
+20% 27% 28% 29% 31% 33% 262p
Source: Aberforth Partners
Hurdle Rates, Redemption Yields and Final Cumulative Cover, are projected,
illustrative and do not represent profit forecasts. There is no guarantee these
returns will be achieved.
1-18 Refer to Note 2, Alternative Performance Measurement, and Glossary.
a UK GAAP measure (refer to Glossary)
GOING CONCERN
The Audit Committee has undertaken and documented an assessment of whether it is
appropriate for the Company to adopt the going concern basis of accounting. This
assessment was for the period of at least 12 months from the date of approval of
the financial statements. The Committee reported the results of its assessment
to the Board who considered information about the future and concluded that
preparation of the financial statements on a going concern basis was
appropriate.
The Company's business activities, capital structure, planned life and borrowing
facility, together with the factors likely to affect its development and
performance, are set out in the Strategic Report of the Annual Report. In
addition, the Annual Report includes the Company's objectives, policies and
processes for managing its capital, its financial risk, details of its financial
instruments and its exposures to credit risk, market price risk and liquidity
risk. The Company's assets comprise mainly readily realisable equity securities,
which, if necessary, can be sold to meet any funding requirements, though
funding flexibility can typically be achieved through the use of the bank
overdraft facility. The Company has adequate financial resources to enable it to
meet its day-to-day working capital requirements.
DIRECTORS' RESPONSIBILITY STATEMENT - ANNUAL REPORT AND FINANCIAL STATEMENTS
The Directors who were in office at the date of approving these financial
statements, and who are listed on page 40 of the Annual Report, confirm to the
best of their knowledge that:
· the financial statements, which have been prepared in accordance with
applicable accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit/loss of the Company;
· the Strategic Report includes a fair review of the development and
performance of the business and financial position of the Company, together with
a description of the principal risks and uncertainties that it faces; and
· the Annual Report and Financial Statements, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
Shareholders to assess the Company's performance, business model and strategy.
On behalf of the Board
Angus Gordon Lennox
Chairman
29 July 2026
PRINCIPAL RISKS
The Board has overall responsibility for the Company's risk management and
internal control systems and for reviewing their effectiveness. The work on
these matters is undertaken by the Audit Committee, which monitors and reports
on the effectiveness of the Company's internal controls and the integrity of its
financial records and externally published results. The Audit Committee's on
-going work to identify, evaluate and manage the significant risks the Company
faces is documented in a risk matrix. The Committee is supported in this work by
the Secretaries. Risks are grouped into the following categories: portfolio
management; investor relations; regulatory and legal; and financial and
operational. Part of that process is to identify the Company's principal risks,
which are the risks in the matrix with the highest risk ratings based on
likelihood and impact. They are expected to be relatively consistent from year
to year, given the nature of the Company and its business. Any new or emerging
risks are also considered as part of the risk assessment process. The Risk
Management and Internal Control processes are set out on page 23 of the Annual
Report.
The principal risks faced by the Company are summarised below. To indicate the
extent to which the principal risks change during the year and the level of
monitoring required, each principal risk has been categorised as either a
dynamic risk, requiring detailed monitoring as it can change regularly, or a
stable risk.
Significant
fall in
capital
performance
Risk - this Mitigation/monitoring
is a
portfolio
management
risk
The The Board has outsourced portfolio management to experienced
Company's investment managers with a clearly defined investment philosophy
investment and investment process. The Board receives regular and detailed
policy and reports on investment performance and risk. Senior investment
strategy representatives of Aberforth Partners attend each Board meeting.
expose the This is a dynamic risk, with detailed consideration during the
portfolio year. The Managers' Report contains information on portfolio
to share investment performance and risk.
price
movements.
The
performance
of the
investment
portfolio
will be
influenced
by stock
selection,
liquidity
and market
risk (see
Market risk
below). The
Board's aim
is to
achieve the
investment
objective
by ensuring
the
investment
portfolio
is managed
in
accordance
with the
policy and
strategy.
Market risk
factors
affecting
portfolio
management
and/or
investment
performance
Risk - this Mitigation/monitoring
is a
portfolio
management
risk
Investment The Managers regularly assess the exposure to market risk when
performance making investment decisions and the Board monitors the results
is affected via the Managers' reporting. The Board and Managers closely
by several monitor economic and political developments including the
market risk potential effects of climate change (see pages 15 to 17 of the
factors, such Annual Report). This is a dynamic risk, with detailed
as economic, consideration during the year. The Managers' Report contains
geopolitical, information on market risk.
and societal
factors,
which cause
uncertainty
about future
price
movements of
investments.
The Board
delegates
consideration
of market
risk to the
Managers to
be carried
out as part
of the
investment
process.
Political
and taxation
changes
outside of
the
Company's
control
Risk - this Mitigation/monitoring
is a
portfolio
management
risk
Investment The Board monitors in conjunction with the Managers the
performance political and tax landscape affecting the Company and takes
is affected action if in the best interests of shareholders as a whole.
by Company advisers provide regular updates. This is a dynamic
political, risk.
regulatory
and taxation
risk
factors,
which cause
uncertainty
about future
price
movements of
investments.
Structural
conflicts of
interest
between the
objectives
of the
Ordinary and
ZDP
Shareholders
Risk - this Mitigation/monitoring
is an
investor
relations
risk
The The Board is cognisant of this risk and considers both sets of
different Shareholders; it acts in a manner that it considers fair,
rights and reasonable and equitable to both classes of Shareholder. This is
expectations a stable risk.
of the
holders of
Ordinary
Shares and
the holders
of ZDP
Shares may
give rise to
conflicts of
interest
between
them. The
Company's
investment
objective
and policy
seek to
strike a
balance
between the
interests of
both classes
of
Shareholder.
There can be
no guarantee
that such a
balance will
be achieved
and
maintained
during the
life of the
Company.
Significant
fall in
revenue
generation
from the
portfolio
Risk - this Mitigation/monitoring
is a
portfolio
management
risk
A significant The Board receives regular and detailed reports from the
fall in Managers on income performance together with income forecasts.
investment The Board and Managers monitor investment income and it is
income could considered a dynamic risk.
lead to the
inability to
provide an
attractive
level of
income to
Ordinary
Shareholders.
Loss of key
investment
management
personnel
Risk - this Mitigation/monitoring
is an
operational
and
portfolio
management
risk
The Board The Board recognises that the collegiate approach employed by the
believes Managers mitigates this risk. Board members are in regular
that a risk contact with the partners and staff of the Managers and monitor
exists in personnel changes. This is a stable risk.
the
potential
loss of key
investment
personnel
at the
Managers.
Failure to
comply with
fundamental
legal,
regulatory
and
reporting
obligations
Risk - this Mitigation/monitoring
is a
regulatory
and legal
risk
Breach of The Board reviews regular reports from the Secretaries to
regulatory monitor compliance with regulations. This is a stable risk.
rules could
lead to
suspension
of the
Company's
share price
listings,
financial
penalties or
a qualified
audit
report.
Breach of
Section 1158
of the
Corporation
Tax Act 2010
could lead
to the
Company
losing
investment
trust status
and, as a
consequence,
any capital
gains would
then be
subject to
tax.
Cyber risk
Risk - this Mitigation/monitoring
is an
operational
risk
The Company The Board oversees the Managers' and other service providers'
and/or cyber security controls via external control reports and Board
Managers update papers. This is a dynamic risk.
could be
subject to a
cyber risk
event,
impairing
operational
systems and
the Company's
information
they contain,
thereby
negatively
affecting
Shareholders
or other
stakeholders.
The Income Statement, Reconciliation of Movements in Shareholders' Funds,
Balance Sheet and Cash Flow Statement are set out below.
INCOME STATEMENT
For the year to 30 June 2026
(audited)
Year to 30 June 2026 Period to 30 June 2025
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Net losses on - (1,284) (1,284) - (1,062) (1,062)
investments
Investment income 8,319 248 8,567 7,879 - 7,879
Other income 23 - 23 174 - 174
Investment (325) (760) (1,085) (320) (746) (1,066)
management fee
(Note 3)
Portfolio - (187) (187) - (847) (847)
transaction costs
Other expenses (399) - (399) (369) - (369)
-------- -------- -------- -------- -------- --------
Net return before 7,618 (1,983) 5,635 7,364 (2,655) 4,709
finance costs
and tax
Finance costs:
Appropriation to - (3,060) (3,060) - (2,859) (2,859)
ZDP Shares (Note
8)
Interest expense (2) (3) (5) (1) (4) (5)
and overdraft fee
-------- -------- -------- -------- -------- --------
Return on ordinary 7,616 (5,046) 2,570 7,363 (5,518) 1,845
activities
before tax
Tax on ordinary - - - (6) - (6)
activities
-------- -------- -------- -------- -------- --------
Return
attributable to
Equity 7,616 (5,046) 2,570 7,357 (5,518) 1,839
Shareholders
====== ======= ======= ====== ======= =======
Return per 7.10p (4.70)p 2.39p 6.85p (5.14)p 1.71p
Ordinary Share
(Note 5)
The Board declared on 29 July 2026 a second interim dividend of 3.69p per
Ordinary Share and a special dividend of 0.85p per Ordinary Share. The Board
also declared on 27 January 2026 a first interim dividend of 1.56p per Ordinary
Share.
The total column of this statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the year.
A Statement of Comprehensive Income is not required as all gains and losses of
the Company have been reflected in the above statement.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year to 30 June 2026
(audited)
Share Special Capital Revenue
capital reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000
Balance as at 30 1,073 105,621 (5,518) 5,747 106,923
June 2025
Return on ordinary - - (5,046) 7,616 2,570
activities after
tax
Equity dividends - - - (6,343) (6,343)
paid (Note 4)
-------- -------- -------- -------- --------
Balance as at 30 1,073 105,621 (10,564) 7,020 103,150
June 2026
====== ====== ====== ====== ======
Period from 29 March 2024 to 30 June 2025
(audited)
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance as at 29 - - - - - -
March 2024
Return on ordinary - - - (5,518) 7,357 1,839
activities after
tax
Equity dividends - - - - (1,610) (1,610)
paid (see Note 4)
Issue of Ordinary 1,073 106,258 - - - 107,331
Shares
Ordinary Share - (592) - - - (592)
issue costs
Share Premium - (105,621) 105,621 - - -
cancellation
Cost of Share - (45) - - - (45)
Premium
cancellation
Issue of redeemable 50 - - - - 50
Shares
Redemption of (50) - - - - (50)
redeemable Shares
------- -------- ------- -------- -------- --------
- -
Balance as at 30 1,073 - 105,621 (5,518) 5,747 106,923
June 2025
====== ====== ====== ====== ====== ======
BALANCE SHEET
As at 30 June 2026
(audited)
30 June 30 June
2026 2025
£'000 £'000
Fixed assets
Investments at fair value 146,953 147,998
through profit or loss (Note
6)
---------- ----------
Current assets
Debtors 1,561 716
Cash at bank 520 1,049
---------- ----------
2,081 1,765
Creditors (amounts falling (93) (109)
due within one year)
---------- ----------
Net current assets 1,988 1,656
---------- ----------
TOTAL ASSETS LESS CURRENT 148,941 149,654
LIABILITIES
Creditors (amounts falling
due after more than one
year)
ZDP Shares (Note 8) (45,791) (42,731)
---------- ----------
TOTAL NET ASSETS 103,150 106,923
======= =======
Capital and Reserves: Equity
Interests
Share capital:
Ordinary Shares (Note 9) 1,073 1,073
Reserves:
Special reserve 105,621 105,621
Capital reserve (10,564) (5,518)
Revenue reserve 7,020 5,747
---------- ----------
TOTAL SHAREHOLDERS' FUNDS 103,150 106,923
======= =======
Net Asset Value per Ordinary 96.10p 99.62p
Share (Note 7)
Net Asset Value per ZDP 113.77p 106.17p
Share (Note 7)
CASH FLOW STATEMENT
For the year to 30 June 2026
(audited)
Year to Period to
30 June 2026 30 June 2025
£'000 £'000
Operating activities
Net revenue before finance 7,618 7,364
costs and tax
Tax (withheld) from income - (6)
Receipt of special and 248 -
overseas dividends taken to
capital
Investment management fee (760) (746)
charged to capital (Note 3)
(Increase) in debtors (494) (711)
Increase in creditors 15 78
-------- --------
Cash inflow from operating 6,627 5,979
activities
===== =====
Investing activities
Purchases of investments (31,741) (33,742)
Sales of investments 30,933 16,608
-------- --------
Cash (outflow) from investing (808) (17,134)
activities
===== =====
Financing activities
Proceeds from issue of - 2,651
Ordinary Shares (Note 9)
Proceeds from issue of ZDP - 12,182
Shares (Note 9)
Share issue costs paid - (969)
Share premium cancellation - (45)
costs paid
Equity dividends paid (Note (6,343) (1,610)
4)
Interest and fees paid (5) (5)
-------- --------
Cash (outflow)/inflow from (6,348) 12,204
financing activities
===== =====
Change in cash during the (529) 1,049
year
===== =====
Cash at the start of the year 1,049 -
Cash at the end of the year 520 1,049
====== ======
SUMMARY NOTES TO THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been presented under Financial Reporting Standard
102 (FRS 102) and the AIC's Statement of Recommended Practice "Financial
Statements of Investment Trust Companies and Venture Capital Trusts" (SORP). The
financial statements have been prepared on a going concern basis under the
historical cost convention, modified to include the revaluation of the Company's
investments as described below. The Directors' assessment of the basis of going
concern is described on page 30 of the Annual Report. The functional and
presentation currency is pounds sterling, which is the currency of the
environment in which the Company operates. The Board confirms that no
significant accounting judgements or estimates have been applied to the
financial statements and therefore there is not a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities within the
next financial year. Given the nature of the Company, the Board does not
consider climate change material to the presentation of the financial
statements.
2. ALTERNATIVE PERFORMANCE MEASURES
Alternative Performance Measures (APMs) are measures that are not defined under
the requirements of FRS 102. The Company believes that APMs, referred to within
the "Financial Highlights" section of this announcement, provide Shareholders
with important information on the Company. These APMs are also a component of
the internal management reporting to the Board. A glossary of the APMs can be
found at the end of this announcement and on page 64 of the Annual Report.
3. INVESTMENT MANAGEMENT FEE
The Managers, Aberforth Partners LLP, receive an annual management fee, payable
quarterly in advance, equal to 0.75% of the Company's Total Assets. The
management fee is allocated 70% to capital reserves and 30% to revenue reserves.
4. DIVIDENDS PAID
Year to Period ended
30 June 2026 30 June 2025
£'000 £'000
Amounts recognised as distributions to
equity holders
in the year:
First interim dividend for period to 30 - 1,610
June 2025 of 1.50p (paid on 10 March 2025)
Second interim dividend for period to 30 3,757 -
June 2025 of 3.50p (paid on 28 August
2025)
Special dividend for period to 30 June 912 -
2025 of 0.85p (paid on 28 August 2025)
First interim dividend for year to 30 June 1,674 -
2026 of 1.56p (paid on 9 March 2026)
------------ ------------
Total 6,343 1,610
------------ ------------
The second interim dividend for the year to 30 June 2026 of 3.69p per Ordinary
Share, and the special dividend for the year to 30 June 2026 of 0.85p per
Ordinary Share, both payable on 27 August 2026, have not been recognised in the
financial statements as at 30 June 2026. Deducting the second interim dividend
and special dividend from the Company's revenue reserves at 30 June 2026 leaves
revenue reserves equivalent to 2.00p per Ordinary Share.
5. RETURN PER
SHARE
Year to Period ended
30 June 2026 30 June 2025
Ordinary Shares £2,570,000 £1,839,000
Total Return attributable to
Ordinary Shares
Weighted average Ordinary 107,331,000 107,331,000
Shares in issue during the
year
Return per Ordinary 2.39p 1.71p
Share
ZDP Shares
Appropriation to ZDP Shares £3,060,000 £2,859,000
for the year
Weighted average ZDP Shares 40,249,000 40,249,000
in issue during the year
Return per ZDP Share 7.60p 7.10p
There are no dilutive or potentially dilutive shares in issue.
6. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
Year to Period ended
30 June 2026 30 June 2025
£'000 £'000
Investments at fair value through profit or loss
Opening fair value 147,998 -
Opening fair value adjustment 3,804 -
------------ ------------
Opening book cost 151,802 -
Purchases at cost (before expenses) 31,552 165,600b
Sale proceeds (before expenses) (31,313) (16,633)
Realised gains on sales 5,678 2,835
------------ ------------
Closing book cost 157,719 151,802
Closing fair value adjustment (10,766) (3,804)
------------ ------------
Closing fair value 146,953 147,998
------------ ------------
b Includes £128.2m in respect of an in specie transfer of securities from
Aberforth Split Level Income Trust plc on launch.
All investments are in ordinary shares listed on the London Stock Exchange.
Year to Period ended
30 June 2026 30 June 2025
£'000 £'000
Gains/(losses) on investments:
Net realised gains on sales 5,678 2,835
Market value loss on transactions in period - (93)
from 21 June 2024 to 28 June 2024 (see note
9)
Movement in fair value adjustment (6,962) (3,804)
------------ ------------
Net losses on investments (1,284) (1,062)
------------ ------------
In accordance with FRS 102, fair value measurements have been classified using
the fair value hierarchy:
Level 1 - using unadjusted quoted prices for identical instruments in an active
market;
Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is
unavailable).
All investments are held at fair value through profit or loss, have been
classified as Level 1 and are traded on a recognised stock exchange.
7. NET ASSET VALUE ("NAV") PER SHARE
The Net Assets and the Net Asset Value per share attributable to the Ordinary
Shares and ZDP Shares are as follows.
30 June 2026
Ordinary ZDP Total
Shares Shares
Net assets £103,150,000 £45,791,000 £148,941,000
attributable
Number of Shares at 107,331,000 40,249,000 147,580,000
the reporting date
------------ ----------- ------------
-
NAV per Share (a) 96.10p 113.77p 100.92p
Dividend 1.079689 - 1.055680
reinvestment
factor8 (b)
------------ ----------- ------------
-
NAV per Share on a 103.76p 113.77p 106.54p
total return basis
at the end of the
period (c) = (a) x
(b)
------------ ----------- ------------
-
NAV per Share on a 101.27p 106.17p 102.58p
total return basis
at the start of the
year(d)
------------ ----------- ------------
-
Total Return 2.5% 7.2% 3.9%
performance (c) /
(d) - 1
------------ ----------- ------------
-
30 June 2025
Ordinary ZDP Total
Shares Shares
Net assets £106,923,000 £42,731,000 £149,654,000
attributable
Number of Shares at 107,331,000 40,249,000 147,580,000
the reporting date
------------ ----------- ------------
-
NAV per Share (a) 99.62p 106.17p 101.41p
Dividend 1.016535 - 1.011587
reinvestment
factor8 (b)
------------ ----------- ------------
-
NAV per Share on a 101.27p 106.17p 102.58p
total return basis
at the end of the
period (c) = (a) x
(b)
------------ ----------- ------------
-
NAV per Share on a 100.00p 100.00p 100.00p
total return basis
at Inception (d)
------------ ----------- ------------
-
Total Return 1.3% 6.2% 2.6%
performance in the
period
since Inception (c)
/ (d) - 1
------------ ----------- ------------
-
Total returns in the period to 30 June 2025 are from the Company's inception on
28 June 2024. Total return performance since Launch reflects performance
subsequent to the charging of the costs of the Launch. From Launch to 30 June
2026, the Total Assets Total Return performance is 8.4% and the Ordinary Share
NAV Total Return is 5.9%, both excluding the one-off Launch costs (see note 9).
The ZDP Share NAV, on an Articles basis, at 30 June 2026 was 114.48p and the ZDP
Share NAV Total Return performance in the period on an Articles basis,
equivalent to the gross redemption yield at Issue, was 7.0%.
8. ZERO DIVIDEND PREFERENCE SHARES
30 June 2026 30 June 2025
£'000 £'000
Opening Balance 42,731
Issue of ZDP Shares - 40,249
Capitalisation of issue costs of ZDP Shares - (377)
Issue costs amortised during the year 47 43
Capital growth of ZDP Shares (appropriation) 3,013 2,816
------------ ------------
Closing Balance 45,791 42,731
------------ ------------
Expenses of £377,000 associated with the issue of the ZDP Shares have been
capitalised. These will be amortised over the expected life of the ZDP Shares
and charged to capital as a finance cost within the Income Statement.
9. SHARE CAPITAL
30 June 30 June 2025
2026
Issued and No. of £'000 No. of Shares £'000
Allotted: Shares
Ordinary 107,331,000 1,073 107,331,000 1,073
Shares of 1p
each
ZDP Shares of 40,249,000 402 40,249,000 402
1p each
----------- ------------ ----------------- ------------
------
Total issued 147,580,000 1,475 147,580,000 1,475
and allotted
----------- ------------ ----------------- ------------
------
Upon incorporation on 29 March 2024, the Company issued and allotted 100
Ordinary Shares at £1 each. On 25 April 2024, 50,000 Redeemable Preference
Shares were issued and allotted to enable the Company to obtain a trading
certificate.
The Company acted as the rollover option for the existing shareholders of
Aberforth Split Level Income Trust plc ("ASLIT") in connection with the
recommended proposals for the scheme of reconstruction and winding up of ASLIT
(the "Scheme"). ASLIT was a closed-ended, split capital investment trust, with a
similar investment policy, managed by Aberforth Partners LLP. ASLIT was wound up
on 30 June 2024, its planned winding-up date.
On 28 June 2024, the Company entered into a Transfer Agreement in connection
with the scheme of reconstruction and winding-up of ASLIT. Under this Transfer
Agreement, a proportion of the assets of ASLIT were transferred to AGVIT as
consideration for the issue of Ordinary and ZDP Shares to shareholders of ASLIT
who elected to roll over their investment in ASLIT to AGVIT. The calculation
date of 21 June 2024 was used for valuing ASLIT's assets transferred to AGVIT.
On 28 June 2024, 104,680,290 Ordinary Shares and 28,066,949 ZDP Shares were
allotted to the shareholders of ASLIT who elected to roll over their investment
in ASLIT to AGVIT at the issue price of £1 each. Assets amounting to £132.7
million were transferred from ASLIT in consideration for this allotment,
including securities valued at £128.2 million.
In addition, 2,650,710 Ordinary Shares and 12,182,051 ZDP Shares were allotted
to satisfy the demand of the Placing and Offer for Subscription at the issue
price of £1 each. The proceeds of these issues were used to acquire securities
for the Company's investment portfolio. These allotments resulted in the Company
having a total of 107,331,000 Ordinary Shares and 40,249,000 ZDP Shares, which
were admitted to listing on the Official List and to trading on the London Stock
Exchange on 1 July 2024. In addition, the 50,000 Redeemable Preference Shares
were redeemed in full on 3 December 2024.
In November 2024, the High Court of Justice confirmed the cancellation of the
entire amount standing to the credit of the Share Premium account and the
creation of a Special Reserve, the balance of which may be treated as
distributable profits for all purposes as permitted by the Articles of the
Company. The Special Reserve will be available to be used for any buy-back of
Ordinary Shares and ZDP Shares as permitted by the Companies Act 2006 and in
accordance with the Company's Articles of Association.
Costs of £592,000 associated with the issue of the Ordinary Shares, net of an
Aberforth Partners LLP cost contribution of £450,000, have been charged to the
Share Premium account. Costs of £377,000 associated with the issue of the ZDP
Shares will be amortised to capital as a finance cost in the Income Statement
over the planned life of the ZDP Shares. Stamp duty amounting to £602,000 was
also paid in relation to the transfer of securities from ASLIT to AGVIT under
the Transfer Agreement, as detailed above. This cost is included in portfolio
transaction costs as disclosed in the Income Statement.
Further details of the rights and responsibilities of the Ordinary and ZDP
Shareholders are available in the Prospectus dated 28 May 2024 and the Company's
2025 Annual Report, which are available on the Managers' website
www.aberforth.co.uk.
10. Financial instruments and risk management
The Company's financial instruments comprise its investment portfolio, cash
balances, ZDP Shares, debtors and creditors that arise directly from its
operations such as sales and purchases awaiting settlement, and investment
income receivable. Note 1 to the financial statements contained in the Annual
Report sets out the significant accounting policies, including criteria for
recognition and the basis of measurement applied for significant financial
instruments excluding cash at bank, which is carried at fair value. Note 1 to
the financial statements contained in the Annual Report also includes the basis
on which income and expenses arising from financial assets and liabilities are
recognised and measured.
The main risks that the Company faces arising from its financial instruments are
as follows.
(i) Market price risk is the risk that the market value of
investment holdings will fluctuate as a result of changes in market prices
caused by factors other than interest rate or currency rate movement.
(ii) Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that it has
entered into with the Company.
(iii) Liquidity risk is the risk that the Company will encounter
difficulty raising funds to meet its cash commitments as they fall due.
Liquidity risk may result from either the inability to sell financial
instruments quickly at their fair values or from the inability to generate cash
inflows as required.
(iv) Interest rate risk is the risk that the interest
receivable/payable and the market value of investment holdings may fluctuate
because of changes in market interest rates. The Company's investment portfolio
is currently not directly exposed to interest rate risk. The Company's policy is
to hold cash in variable rate bank accounts.
The Company's financial instruments are all denominated in sterling and
therefore the Company is not directly exposed to significant currency risk.
However, it is recognised that most investee companies, whilst listed in the UK,
will be exposed to global economic conditions and currency fluctuations. For
more information on the financial instruments and risk management, see note 19
to the financial statements contained in the Annual Report.
11. RELATED PARTY TRANSACTIONS
The Directors have been identified as related parties and their fees and
interests have been disclosed in the Directors' Remuneration Report contained in
the Annual Report on pages 40 and 41. During the year, no Director or entity
controlled by a Director was interested in any contract or other matter
requiring disclosure under section 412 of the Companies Act 2006.
12. FURTHER INFORMATION
The foregoing do not constitute statutory accounts (as defined in section 434(3)
of the Companies Act 2006) of the Company. The statutory accounts for the year
to 30 June 2026, which contained an unqualified Report of the Auditors, will be
lodged with the Registrar of Companies and did not contain a statement required
under section 498(2) or (3) of the Companies Act 2006.
Certain statements in this announcement are forward looking statements. By
their nature, forward looking statements involve a number of risks,
uncertainties or assumptions that could cause actual results or events to differ
materially from those expressed or implied by those statements. Forward looking
statements regarding past trends or activities should not be taken as
representation that such trends or activities will continue in the future.
Accordingly, undue reliance should not be placed on forward looking statements.
The Annual Report is expected to be posted to shareholders by 6 August 2026.
Members of the public may obtain copies from Aberforth Partners LLP, 14 Melville
Street, Edinburgh EH3 7NS or from its website: www.aberforth.co.uk. A copy will
also shortly be available for inspection at the National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Glossary of UK GAAP Measures
Net Asset Value, also described as Shareholders' Funds, is the value of total
assets less all liabilities. The Net Asset Value or NAV per Ordinary Share is
calculated by dividing this amount by the total number of Ordinary Shares in
issue.
Net Asset Value (ZDP Share) is the value of the entitlement to the ZDP
Shareholders. The Net Asset Value or NAV per ZDP Share is calculated by dividing
this amount by the total number of ZDP Shares in issue.
Glossary of Alternative Performance Measures
1. Total Assets Total Return represents the return of the combined funds of the
Ordinary Shareholders and ZDP Shareholders assuming that dividends paid to
Ordinary Shareholders were reinvested at the NAV per Ordinary Share at the close
of business on the day the Ordinary Shares were quoted ex dividend. Total Assets
less current liabilities as at 30 June 2026 were £148,941,000 (2025:
£149,654,000) and the total number of shares in issue (Ordinary Shares plus ZDP
Shares) was 147,580,000 (2025: 147,580,000) producing a Total Assets per Share
of 100.92p (2025: 101.41p). Multiplying by the dividend reinvestment factor of
1.055680 (2025: 1.011587) results in a Total Assets per Share on a Total Return
basis of 106.54p (2025: 102.58p). The Total Assets Total Return was therefore
3.9% (2025: 2.6%), being the sum of the Total Assets per Share at the end of the
year, multiplied by the dividend reinvestment factor divided by the Total Assets
per Share calculated on a total return basis at the start of the year, expressed
as a percentage (see note 7).
2. Ordinary Share NAV Total Return represents the theoretical return on the NAV
per Ordinary Share, assuming that dividends paid to Shareholders were reinvested
at the NAV per Ordinary Share at the close of business on the day the shares
were quoted ex dividend. The NAV per Ordinary Share as at 30 June 2026 was
96.10p (2025: 99.62p) and the dividend reinvestment factor was 1.079689 (2025:
1.016535). The Ordinary Share NAV Total Return was therefore 2.5% (2025: 1.3%),
being the Ordinary Share NAV at the end of the year, multiplied by the dividend
reinvestment factor divided by the Ordinary Share NAV calculated on a total
return basis at the start of the year, expressed as a percentage (see note 7).
The Ordinary Share NAV Total Returns since Launch and Inception are calculated
in the same way, except Launch excludes the one off costs associated with the
Launch of the Company, whereas Inception includes these costs.
3. ZDP Share NAV Total Return represents the return on the entitlement value of
a ZDP Share. The ZDP Share NAV, on an Accounts basis, as at 30 June 2026 was
113.77p (2025: 106.17p). The ZDP Share NAV Total Return, on an Accounts basis,
was therefore 7.2% (2025: 6.2%), being the ZDP Share NAV at the end of the year
divided by the ZDP Share NAV at the start of the year, expressed as a
percentage. The Accounts basis capitalises the expenses associated with the
issue of the ZDP Shares and amortises them over the expected life of the ZDP
Shares. The ZDP Share NAV, on an Articles basis, at 30 June 2026 was 114.48p
(2025: 107.00p) and the ZDP Share NAV Total Return in the year on an Articles
basis, equivalent to the gross redemption yield at issue, was 7.0%. (see notes 7
and 8).
4. Ordinary Share Price Total Return represents the theoretical return to an
Ordinary Shareholder, on a closing market price basis, assuming that all
dividends received were reinvested, without transaction costs, into the Ordinary
Shares of the Company at the close of business on the day the shares were quoted
ex dividend. The Ordinary Share price as at 30 June 2026 was 88.25p (2025:
83.50p) and the dividend reinvestment factor was 1.092781 (2025: 1.020270). The
Ordinary Share Price Total Return was therefore 13.2% (2025: -14.8%), being the
Ordinary Share price at the end of the year, multiplied by the dividend
reinvestment factor divided by the Ordinary Share price calculated on a total
return basis at the start of the year, expressed as a percentage.
5. ZDP Share Price Total Return represents the theoretical return to a ZDP
Shareholder, on a closing market price basis. The ZDP Share price as at 30 June
2026 was 117.0p (2025: 108.0p). The ZDP Share Price Total Return was therefore
8.3% (2025: 8.0%), being the ZDP Share price at the end of the year divided by
the ZDP Share price at the start of the year.
6. Discount is the amount by which the stockmarket price per Share is lower than
the NAV per Share. The discount is normally expressed as a percentage of the NAV
per Share.
7. Premium is the amount by which the stockmarket price per Share exceeds the
NAV per Share. The premium is normally expressed as a percentage of the NAV per
Share.
Other Glossary Terms
8. Dividend Reinvestment Factor is used to calculate total return performance by
including the effect of dividends from the Company. It is calculated on the
assumption that dividends paid by the Company were reinvested into Ordinary
Shares of the Company at the NAV per Ordinary Share or the share price, as
appropriate, on the day the Ordinary Shares were quoted ex dividend.
9. ZDP:Equity Gearing Ratio is calculated by dividing the asset value
attributable to the ZDP Shares by the asset value attributable to the Ordinary
Shares.
10. Hurdle Rate is the rate of capital growth per annum in the Company's
investment portfolio to return a stated amount per Share at the planned winding
-up date.
11. Ongoing Charges represents the total cost of investment management fees and
other expenses of £1,484,000 (2025: £1,435,000), as disclosed in the Income
Statement, as a percentage of the average published net asset value attributable
to the Ordinary Shares of £102,054,000 (2025: £101,628,000) over the period, and
are calculated in accordance with the guidelines issued by the AIC.
12. Portfolio Turnover is calculated by summing the lesser of purchases and
sales over the relevant period divided by the average portfolio value for that
period.
13. Projected Final Cumulative Cover is the ratio of the total assets of the
Company, as at the calculation date, to the sum of the assets required to pay
the final capital entitlement of 160.58p per ZDP Share on the planned winding-up
date, future estimated investment management fees charged to capital, and
estimated winding-up costs.
14. Redemption Yield (Ordinary Share) is the annualised rate at which projected
future income and capital cash flows (based on assumed future capital/dividend
growth rates) are discounted to produce an amount equal to the share price at
the date of calculation.
15. Gross Redemption Yield (ZDP Share) is the annualised rate at which the
planned future payment of capital is discounted to produce an amount equal to
the price at the date of calculation.
16. Retained Revenue Reserves per Share is a cumulative figure of revenue earned
but not distributed and is calculated after accounting for dividends paid by the
Company, including those not yet recognised in the financial statements.
17. Terminal NAV (Ordinary Share) is the projected NAV per Ordinary Share at the
planned winding-up date at a stated rate of capital growth in the Company's
investment portfolio after taking into account the final capital entitlement of
the ZDP Shares, future estimated costs charged to capital, and estimated winding
-up costs.
18. Key Dates
Company Incorporation Date is 29 March 2024.
Inception Date is 28 June 2024. When reporting performance, "since inception"
refers to periods since 28 June 2024 and reflects the impact of certain one off
costs associated with the launch of the Company.
Launch/Listing Date is 1 July 2024. When reporting performance, "since launch"
refers to periods since 1 July 2024 and excludes the one off costs associated
with the launch of the Company.
Planned Winding-Up Date is 30 June 2031.
CONTACT:
Euan Macdonald / Peter Shaw, Aberforth Partners LLP, 0131 220 0733
Aberforth Partners LLP
Managers and Secretaries
ANNOUNCEMENT ENDS
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