Aberforth Smaller Companies Trust plc
Half Yearly Report for the six months to 30 June 2026
The following is an extract from Aberforth Smaller Companies Trust plc's ("the
Company" or "ASCoT") Half Yearly Report for the six month period to 30 June
2026.
FINANCIAL HIGHLIGHTS
TOTAL RETURN PERFORMANCE %
Six Months to 30 June 2026
Net Asset Value per Ordinary Share1,5 5.5
DNSCI (XIC) 2,5 1.8
Ordinary Share Price3,5 6.5
FINANCIAL 30 June 2026 31 December 2025 30 June 2025
INFORMATION
Shareholders' £1,391m £1,392m £1,414m
Funds/Net Assets4
Market £1,263m £1,255m £1,256m
Capitalisation
Number of 77,415,105 79,742,605 81,619,105
Ordinary Shares
in Issue
Net Asset Value 1,797.29p 1,745.26p 1,731.97p
per Ordinary
Share4
Ordinary Share 1,632.00p 1,574.00p 1,538.00p
Price5
Ordinary Share 9.2% 9.8% 11.2%
Discount5
Dividends per 15.30p 58.80p 14.30p
Ordinary Share6
Gearing5 5.4% 4.8% 4.7%
First interim dividend of 15.30p per share for the year ended 31 December 2026,
which is 7.0% higher than the previous year's 14.30p per share.
1 Represents net asset value return with dividends reinvested.
2 Represents the return on the DNSCI (XIC) with dividends reinvested.
3 Represents Ordinary Share price return with dividends reinvested.
4 UK GAAP Measure.
5 Alternative Performance Measures (refer to Note 10 and the 2025 Annual Report)
6 Dividends are in respect of the six months to 30 June 2026 and 30 June 2025
and for the year to 31 December 2025. A special
dividend of 12.00p per share was included in the year to 31 December 2025.
INVESTMENT OBJECTIVE
The investment objective of the Company is to achieve a net asset value total
return (with dividends reinvested) greater than that of the Deutsche Numis
Smaller Companies Index (excluding Investment Companies) ("DNSCI (XIC)" or
"benchmark") over the long term.
Chairman's Statement
Review of performance
ASCoT emerged from an eventful six months with a positive absolute return and a
good relative return. In the six months to 30 June 2026, the net asset value
total return was 5.5% and the share price total return was 6.5%. The Company's
benchmark index, the DNSCI (XIC), rose by 1.8%. Larger companies were stronger
with the FTSE All-Share up by 7.2% in total return terms.
The main event in the period was of course the war in Iran. Markets took their
lead from Russia's invasion of Ukraine in 2022: the oil price rose and share
prices fell. ASCoT's portfolio felt the effects as fears of inflation and
another cost-of-living crisis knocked the share prices of consumer-facing
businesses. There was, however, a welcome offset as the share prices of holdings
in oil producers rose.
The portfolio's consumer-facing businesses also had to contend with another
round of domestic political uncertainty, which culminated in another change of
Prime Minister. It remains to be seen whether Andy Burnham will be able to boost
confidence and economic activity. His room for manoeuvre is limited by the
Labour Party's election manifesto and, as the gilt market made clear during the
first half, by the country's fiscal position.
The other notable feature of the past six months has been intensifying
excitement about artificial intelligence (AI). The sums being invested in
computing power by the leading American technology companies, and to a lesser
extent their Chinese peers, are incredible. Similarly, the record-breaking
valuation of SpaceX's initial public offering was powered by its AI interests.
Beneficiaries of the AI phenomenon remain relatively few in number, while many
companies have seen their share prices suffer on concerns about the impact of AI
on their business models. ASCoT's experience in the first half of 2026 has been
mixed, with exposure to a handful of potential AI victims offset by holdings in
companies that are second order beneficiaries of AI investment.
Two years ago, I noted that "the effect [of AI] has been akin to that of a black
hole, sucking liquidity and interest away from other investment opportunities".
To extend the metaphor, it feels that we are now confronting a supermassive
black hole, since it has become more difficult for companies and asset classes
that lack AI glamour to gain the attention of the broader investment world. A
one-dimensional market of this sort inevitably excites the contrarian in me. If
anything, it strengthens my belief that ASCoT's investment proposition remains
compelling, partly because of the qualities of the attractively valued portfolio
that are set out in the Managers' Report, and partly because of ASCoT's
structural advantages, which I address below.
ASCoT's advantages as an investment trust
It is easy to lose sight of what makes the investment trust structure special.
As an investment trust, ASCoT has advantages over other types of investment
vehicle. These derive from flexibility in terms of capital allocation and from
the closed-end status of investment trusts.
Closed-end status
Subject to share buy-back activity, ASCoT's pool of capital for investment is
relatively fixed. This is an important characteristic for a portfolio invested
in an often illiquid asset class such as small UK quoted companies. The closed
-end status also allows the Managers to adopt a longer term investment horizon
and to support investee companies. Such support is valued by directors of these
companies and underpins the Managers' constructive approach to engagement. There
is another way in which closed-end status enhances engagement. The relatively
fixed pool of capital allows the Managers to take significant stakes - up to 25%
- in the share capital of investee companies. With such stakes can come greater
influence, which can be crucial if a company encounters difficulties and the
initial investment case moves off course. The ability to take significant stakes
in investee companies has enhanced ASCoT's investment returns over time. This
upside would have been forgone had ASCoT been an open-ended fund rather than an
investment trust.
Capital allocation flexibility
Investment trusts also have several benefits in terms of capital allocation: the
use of gearing, the buy-back of shares, and the ability to accumulate revenue
reserves to smooth and grow dividends paid to Shareholders. The following
paragraphs describe how ASCoT takes advantage of the capital allocation
flexibility afforded by its investment trust status.
· Dividends
Framework
ASCoT's Ordinary dividend (excluding the special dividend) grew by 7.3% in 2025
and has grown at an average annual rate of 7.1% since inception. The 35 years
have witnessed several economic downturns, in which dividends from small UK
quoted companies have declined. ASCoT has used the ability of investment trusts
to build revenue reserves in a prudent fashion in the good times and to use
these reserves to maintain or raise its dividend in the bad times. Healthy
revenue reserves and the downside modelling undertaken by the Managers give the
Board confidence that ASCoT's record of dividend growth in real terms can
continue in the future. It is therefore the Board's policy to grow the full year
ordinary dividend (i.e. excluding special dividends) above the rate of change in
the UK consumer prices index (CPI).
First half of 2026
Reflecting the investee companies' resilience and strong balance sheets, ASCoT's
dividend receipts were robust in the first half of 2026 and the Managers'
estimates for the full year have improved over the period. Investment income
rose by 7% excluding special dividends, which were higher than in the first half
of 2025, and by 11% overall. The revenue return per Ordinary Share was 38.43p in
the six months to 30 June 2026, up from 32.64p a year earlier. This growth
reflects both the resilience of the companies in which ASCoT invests and
portfolio management, as the Managers put their value investment philosophy into
action.
As described above, it is the Board's policy to grow ASCoT's underlying dividend
(i.e. excluding special dividends) in real terms. According to Bloomberg, the
consensus forecast for the CPI rate at the end of 2026 is 3.4%. The Board has
decided to increase the interim dividend per share by 7.0% from 14.3p to 15.3p.
Notwithstanding elevated uncertainty about future inflation rates, the Board
takes comfort from the strong dividend receipts in the first half and from
ASCoT's healthy revenue reserves. These totalled 99.1p per Ordinary share at the
end of 2025, equivalent to just over two times the ordinary dividend paid in
respect of 2025. The Board is comfortable that dividend cover of around two
times is consistent with the delivery of the dividend policy over time.
· Buy-backs
Framework
Buying back shares at a discount to net asset value enhances per share economics
for continuing investors. This has been the main motivation for the Board and
Managers to buy back ASCoT's shares. Buy-backs are a tool that ASCoT has
utilised since 2008, with cash invested in buy-backs totalling £263m and a value
uplift to continuing Shareholders of £37m. Shares repurchased have always been
cancelled.
It is important to emphasise that the Managers do not believe that buy-backs
impinge upon the investment process and portfolio management. The natural
turnover of the portfolio generates cash, some of which can be rotated into new
investment opportunities and some of which can be utilised for buy-backs. To
increase investment returns, it might on rare occasions be appropriate to lower
the pace of buy-backs - it was a profitable exercise to back the rescue rights
issues in early 2009 amid the early stages of the recovery from the global
financial crisis.
The Board and Managers intend to continue share buy-backs as long as the price
paid is lower than the net asset value per share and there is economic
enhancement for continuing Shareholders.
First half of 2026
In the six months to 30 June 2026, ASCoT bought back and cancelled 2,327,500
shares. The total consideration for these buy-backs was £37.1m and the average
discount was 10.3%. Consistent with the framework as described above, it is
likely that buy-backs will continue through the second half of 2026 and beyond.
· Gearing
Framework
The use of debt to fund a portion of an investment trust's portfolio can enhance
investment performance in conditions of rising stockmarkets. The reverse also
holds true, but over time share prices tend to rise. Gearing can also provide an
investment trust with flexibility to fund new investment opportunities and share
buy-backs without disturbing the existing portfolio of investments.
ASCoT's approach to gearing has always been tactical. The Managers advise the
Board to gear when they determine that the valuations of small UK quoted
companies are particularly attractive. They de-gear the portfolio when
valuations normalise. ASCoT is currently geared for the fourth time in its
history. The opportunity came amid the pandemic, since when gearing has improved
returns for Shareholders. Nevertheless, valuations are still below their long
term averages, and so the Board and Managers are optimistic that gearing will
boost ASCoT's future returns.
First half of 2026
To gear, ASCoT uses a three year revolving bank debt facility. The term is
designed to fit with the three year continuation vote periods. On 29 May, it was
announced that the borrowing facility with the Royal Bank of Scotland
International had been refinanced. The new facility expires on 15 June 2029 and
is for £150m, larger than the previous £130m.
At 30 June 2026, ASCoT had drawn down £90m of the £150m facility. This gave a
gearing ratio of 5.4%. For much of the first half of 2026, the gearing ratio was
higher, as the Managers sought to take advantage of the stockmarket falls
triggered by the Iran war. Gearing enhanced ASCoT's investment performance over
the first half.
Lower annual management fees
The Board reviews annual management fees on a regular basis. It is pleased to
announce an adjustment to the annual management fee arrangements with Aberforth
Partners. ASCoT will now pay 0.75% per annum on net assets up to £750m rather
than £1,000m. Net assets above £750m incur fees at a rate of 0.65% per annum.
The reduction has been backdated to take effect from 1 January 2026 and results
in an annual saving to ASCoT of around £250,000.
Annual General Meeting and continuation vote
The Annual General Meeting was held on 5 March 2026, at which all resolutions
passed. These included a vote on the continuation of the Company, which is held
every three years. Approval for continuation was overwhelming, with 94.6% of
votes cast in favour of the resolution. Shareholders also approved the renewal
of authority for ASCoT to buy back up to 14.99% of its Ordinary Shares. The
Board and Managers are grateful for Shareholders' continued support of the
Company.
Conclusion
As the fitful peace negotiations between Iran and the US carry on, there is
reassurance to be drawn from the oil price, which dropped sharply from its mid
-conflict levels. This would ease one of the worries that beset UK financial
markets in the first part of the year. What remains unclear are the policies and
priorities of our new Prime Minister. The country's fiscal situation and the
exigencies of the gilt market will continue to limit his choices, but there are
decisions he could take that would ease pressures on business and so improve the
outlook for the economy. Time will tell, but for now the stockmarket only seems
to reflect downside risk in the valuations of smaller companies.
Despite the backdrop of modest economic growth and lingering geopolitical
uncertainties, the Board believes that ASCoT offers a compelling investment
proposition. I see three main elements to this proposition.
First, the asset class of small UK quoted companies combines unusually
attractive valuations and strong businesses. The valuations largely reflect the
stockmarket's big picture concerns. The strength of the businesses is shown by
how they have fared through the various challenges of recent years and by the
self-help measures they are currently implementing to make progress despite the
presently subdued economy. The Managers have observed that they have seldom seen
so high a proportion of the companies in the DNSCI (XIC) as candidates for
ASCoT's portfolio. The opportunity set is further broadened by companies
continuing to move from AIM to the Main Market, and by the impact of AI on the
share prices of previously highly valued companies.
Second, Aberforth's investment process is well suited to current conditions in
the asset class. Their team-based approach provides continuity and ensures
coverage of the many opportunities within the DNSCI (XIC). Meanwhile, the value
investment philosophy stands out in today's environment of volatile inflation
and interest rates. It also offers diversification in an investment world ever
more reliant on AI. Their discreet engagement with the board of investee
companies is similarly important since it can help close gaps between share
prices and target valuations in a stockmarket that is often uninterested, until
another takeover bid comes along.
Third, ASCoT, as an investment trust, is an ideal means to access a relatively
illiquid asset class such as small UK quoted companies. Its closed-end status
allows the Managers to take a longer term view regarding investment and
engagement. It also gives the Board considerable flexibility in terms of capital
allocation. As I described above, ASCoT makes good use of this flexibility by
paying a dividend that grows above the rate of inflation, by undertaking value
-accretive share buy-backs, and by deploying gearing to enhance investment
returns. As a gauge of what this means for Shareholders, dividends and buy-backs
in 2025 saw £102m returned to Shareholders, which was equivalent to 8% of
ASCoT's market capitalisation at 30 June 2026.
It is clear that these attributes cannot guarantee near term investment
performance, but my fellow directors and I do believe that they significantly
improve the probability of a good investment experience, as has been the case in
this troubled decade and over ASCoT's full 35 year history.
The Board welcomes Shareholders' views and questions, so please feel free to
contact me at my e-mail address, which is set out below.
Richard Davidson
Chairman
28 July 2026
richard.davidson@aberforth.co.uk
Managers' Report
Performance
ASCoT performed well in the six months to 30 June 2026. Its net asset value
total return was +5.5%. The return from the benchmark index, the DNSCI (XIC),
was +1.8%. Larger companies, represented by the FTSE All-Share, were up by 7.2%
in total return terms.
Investment background
The year started well for smaller companies. The November 2025 Budget was not as
hostile to the UK's private sector as was feared. Both macro economic data and
trading updates from companies indicated stronger activity in January and
February. 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 ASCoT'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 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 the period under review 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 during the first half. Sectors
such as software, estate agency, recruitment and insurance felt the effects.
Exposure to these areas meant that AI was on balance a negative influence on the
performance of the UK stockmarket's small and large companies during the first
half of 2026.
Analysis of performance and portfolio characteristics
In the six months to 30 June 2026, ASCoT's net asset value total return was
+5.5%. The DNSCI (XIC)'s was +1.8%. The table below analyses the difference
between the two numbers. The most important influence on ASCoT's relative return
was the total return performance of the companies that make up its portfolio of
investments.
For the six months ended 30 June 2026 Basis points
Attributable to the portfolio of investments, based on mid prices 321
(after transaction costs of 8 basis points)
Movement in mid to bid price spread 7
Cash/gearing 57
Purchase of ordinary shares 30
Management fee (35)
Other expenses (4)
Total attribution based on bid prices 376
Note: 100 basis points = 1%. Total Attribution is the difference between the
total return of the NAV and the Benchmark Index (i.e. NAV = 5.52%; Benchmark
Index = 1.76%; difference is +3.76% being 376 basis points).
The next table sets out a series of characteristics of both the portfolio and
the DNSCI (XIC). The paragraphs that follow provide context and explanation for
these characteristics and for ASCoT's performance in the first half of 2026.
Portfolio
characteristics 30 June 2026 30 June 2025
ASCoT DNSCI (XIC) ASCoT DNSCI (XIC)
Number of companies 78 342 79 343
Weighted average £610m £1,233m £586m £1,132m
market
capitalisation
Weighting in 50% 17% 52% 20%
"smaller small"
companies*
Weighting in 42% 32% 32% 30%
companies with net
cash**
Portfolio turnover 35% n/a 19% n/a
over prior 12
months
Active share 80% n/a 78% n/a
Price earnings (PE) 11.5x 13.0x 10.1x 14.9x
ratio (historical)
Dividend yield 4.2% 3.2% 4.0% 3.4%
(historical)
Dividend cover 2.1x 2.4x 2.5x 2.0x
(historical)
*"Smaller small" companies - DNSCI (XIC) members that are not also FTSE 250
members.
**Tracked Universe - explained below in the Balance Sheets section.
Themes in the first half of 2026
The investment background above addressed top-down influences on the stockmarket
moves in the first half of 2026. These influences were modestly positive for
ASCoT's performance as the following comments explain.
· Artificial intelligence on balance helped ASCoT's relative performance. The
share prices of software companies, recruiters and media businesses, including
those owned by ASCoT, weakened as AI concerns developed. However, this effect
was outweighed 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 relative 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 was a substantial boost to relative performance since ASCoT
entered 2026 with a higher weighting than did the DNSCI (XIC). The motivation
for this positioning 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
ASCoT's portfolio retains a relatively high exposure to the "smaller small"
companies within the DNSCI (XIC). At the end of June, the weighting was 50%,
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 ASCoT'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 first six months of 2026, "smaller small" companies
slightly out-performed "larger small" companies and so ASCoT's size positioning
helped investment performance.
Style
The Managers have consistently invested ASCoT'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 ASCoT, the Managers use a broader range of
valuation techniques, but the LBS approach provides a useful indication of the
market's style preference.
Since the pandemic and over ASCoT's 35 year history, the DNSCI (XIC)'s value
stocks have out-performed the index as a whole and so style has helped ASCoT's
performance. In contrast, value stocks marginally under-performed during the
first half of 2026. This meant that style, as measured by the LBS analysis, was
a hindrance to ASCoT's investment return.
Balance Sheets
The following table sets out the balance sheet profile of ASCoT'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% 23% 4%
Portfolio 2026 42% 45% 12% 1%
*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 ASCoT's exposure to companies with net cash on their balance sheets
increase to more than 42%. 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 first half of 2026, 25
of ASCoT'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 ASCoT's 78 portfolio
holdings was 4.2% and average dividend cover was 2.1x. The income experience in
the first half of 2026 was positive. Excluding special dividends, ASCoT's
dividend income rose by 6.6% 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
13 11 22 30 2
The table above categorises ASCoT's 78 holdings according to their most recent
dividend actions. ASCoT's positive income experience was underpinned by the 30
companies that increased their dividends and by the two that recommenced
dividend payments. ASCoT also received four special dividends from its holdings
in the first half of 2026.
Corporate Activity
Heightened takeover interest in small UK quoted companies continued in the first
half of 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 ASCoT. On top of these eight formal offers,
seven companies had received approaches and remained in talks with potential
acquirers. Of these, ASCoT 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 7.3x 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 first half of 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 ASCoT 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 three more companies
announced moves up from AIM to the Main Market in the first half of 2026. ASCoT
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 three promotions, ASCoT has holdings in one.
ASCoT's gearing
Gearing is an important tool available to investment trusts. ASCoT employs
gearing tactically to take advantage of periods of stress in economies and
financial markets. The most recent opportunity, the fourth in ASCoT's history,
came amid the pandemic in early 2020 since when gearing has enhanced ASCoT's
investment returns. Gearing remained in place at 30 June 2026 since the
valuations of small UK quoted companies remain attractive. The gearing ratio was
5.4%, which was temporarily lower than the Managers' target owing to share price
moves and portfolio management activity.
Active share
Active share is a measure of how different a portfolio is from an index. The
higher a portfolio's active share, the higher its chance of performing
differently from the index, for better or worse. The Managers target an active
share ratio of at least 70% for ASCoT's portfolio compared with the DNSCI (XIC).
At 30 June 2026, it stood at 80%.
Value roll and portfolio turnover
Portfolio turnover is defined as the lower of purchases and sales divided by the
average portfolio value. ASCoT's turnover in the first half of 2026 was 35%.
This is in line with the long term 35 year average of 33%, but up markedly from
the average of the past five years of 23%.
The higher rate of turnover in the first half is linked to the Managers'
investment process and to ASCoT's good relative performance in the period. 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 ASCoT's capital from companies with lower upsides to those with higher
upsides. This value roll has played an important role in ASCoT's capital and
income returns over the years.
Portfolio categorisation
The table below splits the portfolio's 78 holdings into four categories. These
categories correspond to how the Managers think about the portfolio and about
how they prioritise engagement activity.
Under review Work Self-help On track
in progress
Portfolio weight 2.3% 12.3% 58.2% 27.2%
Number of stocks 6 10 46 16
Total return 6 -32% -5% +4% +37%
months to 30 June
2026
EV/EBITA 2026 13.4x 6.3x 7.4x 7.8x
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 ASCoT's 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 and for smaller
companies were 11.5x and 13.0x respectively at 30 June 2026. Both ratios remain
below their long term averages of 11.9x and 13.5x respectively. 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 ASCoT'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
ASCoT's portfolio (78 stocks) 8.4x 7.3x 6.4x
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 ASCoT has a
much higher exposure to the "smaller smalls" than does the DNSCI (XIC).
· Takeovers within the DNSCI (XIC) over the last three years were struck on
average on a multiple of 14.6x. This compares with the portfolio's 2026 EV/EBITA
of 7.3x.
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 ASCoT'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 ASCoT'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 ASCoT'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 ASCoT's superior relative returns over 35 years and seem no
less relevant today.
Finally, as the Chairman's Statement describes, ASCoT benefits from being an
investment trust. Portfolio returns can be enhanced for the benefit of
Shareholders by judicious use of the capital allocation tools, such as gearing
from the new £150m facility, share buy-backs and the smoothing of dividends. On
top of these, it is clear that ASCoT's closed-end status is best suited to
operating in a relatively illiquid asset class, taking significant stakes in
holdings and supporting companies over time. The Managers are optimistic that
ASCoT's structural and portfolio characteristics will generate future investment
returns that are consistent with those achieved over the past 35 years.
Aberforth Partners LLP
Managers
28 July 2026
INTERIM MANAGEMENT REPORT
A review of the half year and the outlook for the Company can be found in the
Chairman's Statement and the Managers' Report.
Risks and Uncertainties
The Directors have a process for identifying, evaluating and managing the
principal and emerging risks faced by the Company. The Board believes that the
Company has a relatively low risk profile in the context of the investment trust
industry. This belief arises from the fact that the Company has a simple capital
structure; invests only in small UK quoted companies; is not exposed to
derivatives and does not presently intend any such exposure; and outsources all
the main operational activities to recognised, well established firms.
The principal risks faced by the Company and described within the 2025 Annual
Report relate to investment strategy/performance, market risk, share price
discount, gearing, reputational risk and regulatory risk. An explanation of
these risks and how they are managed can be found in the Strategic Report
contained within the 2025 Annual Report. The Board has reviewed the principal
risks and determined that cyber risk should now be included as a principal risk,
reflecting the heightened global cyber threat. Cyber risk is considered a
dynamic risk, with monitoring from the Board through oversight of the Managers'
(and other service providers') cyber security controls via external control and
due diligence reports and Board papers. Other than this addition, the principal
risks and uncertainties continue to apply as disclosed in the 2025 Annual Report
and as updated by the Managers' Report in these interim statements.
Going Concern
The Directors are satisfied that the Company has sufficient resources to
continue in operation for the foreseeable future, a period of not less than 12
months from the date of this report. The Directors' assessment included
consideration of the triennial continuation vote, with the next vote to take
place at the March 2029 AGM. The Company's assets comprise mainly readily
realisable equity securities and funding flexibility can typically be achieved
through the use of the Company's borrowing facilities. Accordingly, they
continue to adopt the going concern basis in preparing the financial statements.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge:
(i) the condensed set of financial statements has been prepared in accordance
with Financial Reporting Standard 104 "Interim Financial Reporting".
(ii) the Half Yearly Report includes a fair review of information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events during the first six months of the year and their
impact on the financial statements together with a description of the principal
risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
disclosure of related party transactions and changes therein.
(iii) the Half Yearly Report, taken as whole, is fair, balanced and
understandable and provides information necessary for Shareholders to assess the
Company's performance, objective and strategy.
On behalf of the Board
Richard Davidson
28 July 2026
INCOME STATEMENT (unaudited)
For the six months ended 30 June 2026
Revenue Capital Total
£'000 £'000 £'000
Realised net gains on sales - 40,803 40,803
Movement in fair value - 7,015 7,015
_______ _______ _______
Net gains on investments - 47,818 47,818
Investment income 33,255 - 33,255
Other income 8 - 8
Investment management fee (Note 2) (1,822) (3,037) (4,859)
Portfolio transaction costs - (1,125) (1,125)
Other expenses (546) - (546)
_______ _______ _______
Net return before finance costs and tax 30,895 43,656 74,551
Finance costs (Note 2) (913) (1,522) (2,435)
_______ _______ _______
Return on ordinary activities before tax 29,982 42,134 72,116
Tax on ordinary activities - - -
_______ _______ _______
Return attributable to equity shareholders 29,982 42,134 72,116
_______ _______ _______
Returns per Ordinary Share (Note 4) 38.43p 54.01p 92.44p
Dividends
On 28 July 2026, the Board declared an interim dividend for the year ending 31
December 2026 of 15.30p per Ordinary Share (2025 - 14.30p), which will be paid
on 27 August 2026.
For the six months ended 30 June 2025
Revenue Capital Total
£'000 £'000 £'000
Realised net gains on sales - 57,056 57,056
Movement in fair value - (651) (651)
_______ _______ _______
Net gains on investments - 56,405 56,405
Investment income 30,034 - 30,034
Other income 47 - 47
Investment management fee (Note 2) (1,789) (2,981) (4,770)
Portfolio transaction costs - (894) (894)
Other expenses (473) - (473)
_______ _______ _______
Net return before finance costs and tax 27,819 52,530 80,349
Finance costs (Note 2) (1,028) (1,714) (2,742)
_______ _______ _______
Return on ordinary activities before tax 26,791 50,816 77,607
Tax on ordinary activities - - -
_______ _______ _______
Return attributable to equity shareholders 26,791 50,816 77,607
_______ _______ _______
Returns per Ordinary Share (Note 4) 32.64p 61.92p 94.56p
For the year ended 31 December 2025
Revenue Capital Total
£'000 £'000 £'000
Realised net gains on sales - 96,000 96,000
Movement in fair value - (41,222) (41,222)
_______ _______ _______
Net gains on investments - 54,778 54,778
Investment income 58,557 776 59,333
Other income 66 - 66
Investment management fee (Note 2) (3,691) (6,151) (9,842)
Portfolio transaction costs - (2,591) (2,591)
Other expenses (980) - (980)
_______ _______ _______
Net return before finance costs and tax 53,952 46,812 100,764
Finance costs (Note 2) (1,698) (2,831) (4,529)
_______ _______ _______
Return on ordinary activities before tax 52,254 43,981 96,235
Tax on ordinary activities - - -
_______ _______ _______
Return attributable to equity shareholders 52,254 43,981 96,235
_______ _______ _______
Returns per Ordinary Share (Note 4) 64.02p 53.88p 117.90p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(unaudited)
For the six months ended 30 June 2026
Share Capital Special Capital Revenue Total
capital reserve1 reserve1 reserve
redemption £'000
£'000 reserve £'000 £'000 £'000
£'000
Balance as 797 191 - 1,276,211 114,517 1,391,716
at 31
December
2025
Return on - - - 42,134 29,982 72,116
ordinary
activities
after
tax
Equity - - - - (35,328) (35,328)
dividends
paid (Note
3)
Purchase (23) 23 - (37,133) - (37,133)
of
Ordinary
Shares
(Note 7)
______ ______ _____ ________ _______ ________
Balance as 774 214 - 1,281,212 109,171 1,391,371
at 30
June 2026
______ ______ _____ ________ _______ ________
For the year ended 31 December 2025
Share Capital Special Capital Revenue Total
capital reserve1 reserve1 reserve
redemption £'000
£'000 reserve £'000 £'000 £'000
£'000
Balance as 838 150 30,469 1,262,006 103,854 1,397,317
at 31
December
2024
Return on - - - 43,981 52,254 96,235
ordinary
activities
after
tax
Equity - - - - (41,591) (41,591)
dividends
paid (Note
3)
Purchase (41) 41 (30,469) (29,776) - (60,245)
of
Ordinary
Shares
(Note 7)
______ ______ ______ ________ _______ ________
Balance as 797 191 - 1,276,211 114,517 1,391,716
at 31
December
2025
______ ______ ______ ________ _______ ________
For the six months ended 30 June 2025
Share Capital Special Capital Revenue Total
capital reserve1 reserve1 reserve
redemption £'000
£'000 reserve £'000 £'000 £'000
£'000
Balance as 838 150 30,469 1,262,006 103,854 1,397,317
at 31
December
2024
Return on - - - 50,816 26,791 77,607
ordinary
activities
after
tax
Equity - - - - (29,960) (29,960)
dividends
paid (Note
3)
Purchase (22) 22 (30,469) (873) - (31,342)
of
Ordinary
Shares
(Note 7)
______ ______ ______ ________ _______ ________
Balance as 816 172 - 1,311,949 100,685 1,413,622
at 30
June 2025
______ ______ ______ ________ _______ ________
1 see Note 8.
BALANCE SHEET
(unaudited)
As at 30 June 2026
30 June 31 December 30 June
2026 2025 2025
£'000 £'000 £'000
Fixed assets
Investments at fair value 1,466,392 1,457,871 1,479,851
through profit or loss (Note
5)
________ ________ ________
Current assets
Investment income receivable 7,834 3,921 3,410
Amounts due from brokers 3,066 - 4,764
Other debtors 106 89 104
Cash at bank 4,902 5,141 4,719
________ ________ ________
15,908 9,151 12,997
________ ________ ________
Creditors (amounts falling
due within one year)
Amounts due to brokers (70) - (4,746)
Bank debt facility (Note 2) - (74,973) (73,940)
Other creditors (1,151) (333) (540)
________ ________ ________
(1,221) (75,306) (79,226)
________ ________ ________
Net current 14,687 (66,155) (66,229)
assets/(liabilities)
________ ________ ________
Total assets less current 1,481,079 1,391,716 1,413,622
liabilities
________ ________ ________
Creditors (amounts falling
due after more than one
year)
Bank debt facility (Note 2) (89,708) - -
________ ________ ________
TOTAL NET ASSETS 1,391,371 1,391,716 1,413,622
________ ________ ________
CAPITAL AND RESERVES: EQUITY
INTERESTS
Share Capital
Ordinary Shares 774 797 816
Reserves
Capital redemption reserve 214 191 172
Special reserve (Note 8) - - -
Capital reserve (Note 8) 1,281,212 1,276,211 1,311,949
Revenue reserve 109,171 114,517 100,685
________ ________ ________
TOTAL SHAREHOLDERS' FUNDS 1,391,371 1,391,716 1,413,622
________ ________ ________
Net Asset Value per share 1,797.29p 1,745.26p 1,731.97p
(Note 6)
CASH FLOW STATEMENT
(unaudited)
For the six months ended 30 June 2026
Six Six months ended Year ended
months 30 June 2025 31 December 2025
ended £'000 £'000
30 June
2026
£'000
Net cash inflow from 24,747 24,451 47,451
operating activities
Investing activities
Purchases of investments (199,344) (112,510) (369,470)
Sales of investments 234,520 185,422 461,056
_______ _______ _______
Cash inflow from investing 35,176 72,912 91,586
activities
Financing activities
Purchases of Ordinary Shares (37,133) (31,342) (60,245)
(Note 7)
Equity dividends paid (Note (35,328) (29,960) (41,591)
3)
Interest and fees paid (2,701) (2,691) (4,409)
Gross drawdowns of bank debt 45,000 45,000 95,000
facilities (before any costs)
Gross repayments of bank debt (30,000) (75,000) (124,000)
facilities (before any costs)
_______ _______ _______
Cash (outflow) from financing (60,162) (93,993) (135,245)
activities
Change in cash during the (239) 3,370 3,792
period
_______ _______ _______
Cash at the start of the 5,141 1,349 1,349
period
Cash at the end of the period 4,902 4,719 5,141
_______ _______ _______
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Standards
The financial statements have been prepared on a going concern basis and in
accordance with the Financial Reporting Standard 104 and the AIC's Statement of
Recommended Practice "Financial Statements of Investment Trust Companies and
Venture Capital Trusts". The total column of the Income Statement is the profit
and loss account of the Company. All revenue and capital items in the Income
Statement are derived from continuing operations. No operations were acquired or
discontinued in the period. The same accounting policies used for the year ended
31 December 2025 have been applied.
2. Investment Management Fee and Bank Borrowings
The Managers, Aberforth Partners LLP, receive an annual investment management
fee, payable quarterly in advance, equal to 0.75% of net assets up to £1
billion, and 0.65% thereafter. As set out in the Chairman's Statement, an
adjustment to the annual investment management fee arrangements was announced
subsequent to the 30 June 2026 period end.
The investment management fee and finance costs of bank borrowings have been
allocated 62.5% to capital reserve and 37.5% to revenue reserve, in line with
the Board's expected long term split of returns, in the form of capital gains
and income respectively, from the investment portfolio of the Company.
As announced on 29 May 2026, the Company refinanced its existing three-year
unsecured Facility Agreement with The Royal Bank of Scotland International
Limited, increasing the available facility to £150 million. The new facility is
due to expire on 15 June 2029.
3. Dividends
Six Six Year ended
months months 31 December 2025
ended ended £'000
30 June 30 June
2026 2025
£'000 £'000
Amounts recognised as distributions to
eligible equity holders in the period:
Final dividend of 30.00p for the year - 24,967 24,967
ended 31 December 2024
Special dividend of 6.00p for the year - 4,993 4,993
ended 31 December 2024
Interim dividend of 14.30p for the - - 11,631
year ended 31 December 2025
Final dividend of 32.50p for the year 25,801 - -
ended 31 December 2025
Special dividend of 12.00p for the 9,527 - -
year ended 31 December 2025
______ ______ ______
35,328 29,960 41,591
______ ______
______
The interim dividend for the year ending 31 December 2026 of 15.30p (2025:
14.30p) will be paid on 27 August 2026 to shareholders on the register on 7
August 2026. The ex dividend date is 6 August 2026. The interim dividend has not
been included as a liability in these financial statements.
4. Returns per Ordinary Share
The returns per Ordinary Share are based on the following.
30 June 30 June 31 December 2025
2026 2025
Returns attributable to £72,116,000 £77,607,000 £96,235,000
Ordinary Shareholders
Weighted average number of 78,017,330 82,068,645 81,626,049
shares in issue during the
period
Returns per Ordinary Share 92.44p 94.56p 117.90p
There are no dilutive or potentially dilutive shares in issue.
5. Investments at fair value
In accordance with FRS 102 and FRS 104, 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).
Investments held at fair value through profit or loss
Level 1 Level 2 Level 3 Total
As at 30 June 2026 £'000 £'000 £'000 £'000
Listed equities 1,466,392 - - 1,466,392
Unlisted equities - - - -
________ ________ ________ ________
Total financial asset investments 1,466,392 - - 1,466,392
________ ________ ________ ________
At 30 June 2025 and 31 December 2025, all investments were held at fair value
through profit and loss and were classified as Level 1 and listed equities.
6. Net Asset Value per Ordinary Share
The Net Asset Value per Share and the Net Assets of the Ordinary Shares at the
period end are calculated in accordance with their entitlements in the Articles
of Association and were as follows.
30 June 31 December 2025 30 June
2026 2025
Net Assets £1,391,371,000 £1,391,716,000 £1,413,622,000
Number of Ordinary Shares 77,415,105 79,742,605 81,619,105
in issue at end of period
Net Asset Value per 1,797.29p 1,745.26p 1,731.97p
Ordinary Share
7. Share Capital
During the period, the Company bought back and cancelled 2,327,500 shares (2025:
2,205,500) at a cost of £37,133,000 (2025: £31,342,000). During the period 1
July to 28 July 2026, 294,500 shares were bought back for cancellation.
8. Special and Capital Reserves
As noted in the Company's Annual Report to 31 December 2025, during the period
to 30 June 2025, the Special Reserve, which was used to account for the cost of
purchasing Ordinary Shares, was exhausted. Following this, the Capital Reserve
represented by realised capital profits, is being used.
9. Related party transactions
There have been no transactions with related parties during the first six months
of the current financial year that have materially affected the financial
position or the performance of the Company. Under UK accounting standards, the
Directors have been identified as related parties and their fees and interests
are disclosed in the 2025 Annual Report.
10. Alternative Performance Measures
Alternative Performance Measures ("APMs") are measures that are not defined by
FRS 102 and FRS 104. The Company believes that APMs, referred to within
`Financial Highlights' and in the Half Yearly Report, provide Shareholders with
important information on the Company and are appropriate for an investment
trust. These APMs are also a component of reporting to the Board. A glossary of
APMs can be found in the 2025 Annual Report.
11. Further Information
The foregoing do not constitute statutory accounts of the Company (as defined in
section 434(3) of the Companies Act 2006). The financial information for the
year ended 31 December 2025 has been extracted from the statutory accounts,
which have been filed with the Registrar of Companies. The Auditor issued an
unqualified opinion on those accounts and did not make any statements under
section 498(2) or (3) of the Companies Act 2006. All information shown for the
six months to 30 June 2026 is unaudited.
Certain statements in this report are forward looking. 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.
Copies of the Half Yearly Report will be sent to shareholders and will be
available shortly from Aberforth Partners LLP, 14 Melville Street, Edinburgh,
EH3 7NS or from the 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.
CONTACT:
Euan Macdonald or Jeremy Hall (Telephone: 0131 220 0733)
Aberforth Partners LLP, Managers and Secretaries
28 July 2026
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