Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.hendersonsmallercompanies.com
The Henderson Smaller Companies Investment Trust plc
Registered as an investment company in England and Wales
Registered office
201 Bishopsgate,
London EC2M 3AE
ISIN/SEDOL
Ordinary shares:
GB0009065060 / 0906506
Companies House
registration number
00025526
London Stock Exchange
(TIDM) Code
HSL
Global Intermediary
Identification Number (GIIN)
WZD8S7.99999.SL.826
Legal Entity Identifier (LEI)
213800NE2NCQ67M2M998
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The Henderson Smaller Companies
Investment Trust plc
Investing in the growth potential of smaller UK companies
Annual Report 2025
The Henderson Smaller Companies Investment Trust plc – Annual Report 2025
Contents
Strategic Report
1 About the Company
2 At a glance
3 Why invest in UK smaller companies?
4 Approach to UK smaller companies
5 Manager: Janus Henderson Investors
6 Performance summary
8 Chair’s Statement
12 Fund Managers’ Report
19 Portfolio
22 Case studies
24 Business model
27 Principal risks and uncertainties
29 Measuring the Company’s performance
31 Section 172 Statement
36 Board decision making
37 ESG Report
41 Viability Statement
Governance
43 Directors and Fund Managers
46 Corporate Governance Report
53 Audit and Risk Committee Report
56 Management Engagement Committee
Report
57 Nominations Committee Report
59 Directors’ Remuneration Report
62 Directors’ Report
64 Statement of Directors’ Responsibilities
Financial Statements
66 Independent Auditor’s Report
72 Statement of Comprehensive Income
73 Statement of Changes in Equity
74 Balance Sheet
75 Statement of Cash Flow
76 Notes to the Financial Statements
Additional Information
93 Glossary
95 Alternative performance measures
97 General shareholder information
98 Historical record
99 Corporate information
AGM Notice
100 Notice of Annual General Meeting
www.hendersonsmallercompanies.com
Annual General
Meeting (AGM)
The Board welcomes you
to attend the AGM at
11.30 am on 7 October 2025
either in person or online.
Scan the QR code for
more details and to register
your attendance.
Virtual investor
presentation
In addition to the AGM, the
Board is holding a virtual
investor presentation at
12.00 noon on 17 September
2025. This will include a Q&A
session with the Chair and
Fund Manager. Scan the QR
code to secure your place.
Keeping in touch
Scan the QR code to receive the latest Company updates,
market insights, event invitations and more.
Please send any general enquiries about the Company to
itsecretariat@janushenderson.com.
Warning to shareholders
Many companies are aware that their shareholders have received unsolicited phone calls or correspondence
concerning investment matters. These are typically from overseas based ‘brokers’ who target UK shareholders
offering to sell them what often turn out to be worthless or high-risk shares in US or UK investments. They can be
persistent and extremely persuasive. Shareholders are therefore advised to be wary of any unsolicited advice,
offers to buy shares at a discount or offers of free company reports. Please note that it is unlikely that either the
Company or the Company’s registrar, Computershare, would make unsolicited telephone calls to shareholders.
Any such calls would relate only to official documentation already circulated to shareholders and never in respect
of investment ‘advice’. If you are in any doubt about the veracity of an unsolicited phone call, please call the
Corporate Secretary at the number provided on page 99. You can also check the FCA Warning List at
#BeScamSmart – www.fca.org.uk/scamsmart.
About the Company
Your Company is managed by Janus
Henderson Investors. The Manager aims
to capture the growth potential of the
UK’s smaller listed companies.
Smaller companies grow into larger companies, and
those which grow tend to have a blend of a good
business model and a strong management team.
The Fund Managers use a combination of company
meetings, economic analysis and detailed research
to build a diverse portfolio of growing businesses in
the UK.
The Fund Managers’ goal is to use these unique
insights to take advantage of the information gap
for smaller companies – where there is relatively
little professional analysis available – to produce
investment growth for shareholders over the
long term.
Purpose
The Company’s purpose is to provide shareholders
with long-term growth through investing in UK
smaller companies and making this form of
investment accessible to investors, both large
and small.
See p.24 Business model
The Company aims to maximise shareholders’ total returns
(capital and income) by investing in smaller companies that
are quoted in the United Kingdom.
The long-term drivers of UK small
caps are still very much intact.
Small caps exhibit faster organic
growth than large caps, tend to
have higher operating leverage,
offer exposure to new technologies
and services, and historically have
benefitted from inbound mergers
and acquisitions. Regardless of
the direction of interest rates, we
believe good smaller companies
with resilient business models that
demonstrate a combination of
strong earnings momentum and
attractive valuations can generate
superior returns.”
See p.12 Fund Managers’ Report
Neil Hermon
Fund Manager
Indriatti van Hien
Fund Manager
Governance
Financial
Statements
Additional
Information AGM Notice
1
The Henderson Smaller Companies Investment Trust plc Annual Report 2025
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The Henderson Smaller Companies Investment Trust plc
Investment Objective
The Company aims to maximise shareholders’ total returns (capital and income)
by investing in smaller companies that are quoted in the United Kingdom.
Portfolio holdings
96 (2024: 100)
Investment focus
Total return
Regional focus
UK
The UK’s most dynamic smaller companies
Seeking opportunities for capital and dividend growth
at the right price across UK small and mid-caps.
See p.19 Analysis of portfolio by subsector
Ongoing charges
1
0.45%
As at 31 May 2025
2024: 0.45%
Net assets
£634m
As at 31 May 2025
2024: £747m
Dividend yield
2
3.3%
As at 31 May 2025
2024: 3.0%
At a glance
See p.20 Portfolio holdings
See p.6 Performance summary
Industrials
31.2%
Consumer Discretionary
22.2%
Financials
17.0%
Technology
12.9%
Real Estate
4.9%
Telecommunications
2.9%
Energy
2.9%
Basic Materials
2.8%
Health Care
2.7%
Consumer Staples
0.5%
1 This is an ‘alternative performance measure’, calculated using the Association of Investment Companies methodology, and explained on page 95. It is also
a ‘KPI’, which is a key performance indicator. KPIs are used to measure the success of your Company in meeting its objective, and by the directors to
evaluate the performance of the Manager. See pages 29-30
2 Based on the dividends paid or recommended for the year and the share price at the year end, being the interim of 7.5p and final dividend of 20.5p. See
also alternative performance measures on pages 95-96
Sources: Janus Henderson. A glossary of terms and alternative performance measures are included on pages 93-96
Governance
Financial
Statements
Additional
Information AGM Notice
2
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The data behind
UK smaller companies
Since 2001, UK smaller companies have
outperformed the wider market by:
+2.5% annualised
1
Faster growing
Mid-cap companies have recorded faster
organic growth than larger companies since
2001, based on earnings per share.
2
Earnings grew:
3% in the FTSE 100
6% in the FTSE 250
1, 3
Takeover targets
UK smaller companies are popular takeover
targets for businesses around the world. The
average proportion (by market capitalisation)
of the UK small cap index acquired each year
since 2001 shows this:
7.4% of the FTSE Small Cap
6.2% of the FTSE 250
1.6% of the FTSE 100
3
Why invest in UK smaller companies?
1 Source: Bloomberg, Janus Henderson Investors as at 31 December
2024. Reflects average performance of Deutsche Numis Smaller
Companies Index vs FTSE All-Share 2001-2024
2 Measured on the basis of the compound annual growth rate of
earnings per share
3 Source: Refinitiv DataStream, Janus Henderson Investors 2001-2024
A whole new playing field
Many of the UK’s smaller businesses operate in fields
untouched by larger entities. Whether in whole sectors,
subsectors or niches, investors can gain exposure to
different areas of the economy through investing in smaller
companies. This opportunity is reflected in the number of
UK smaller companies taken over by larger businesses.
Runway for growth
Historically, smaller companies have outperformed their
larger peers. Since 2001, smaller companies have
generated an annualised total return of 7.8%, while the
wider UK market has generated 5.3%. This reflects the
potential pace of growth at this early stage. A third of
today’s largest UK companies began life as quoted
smaller companies within the last 20 years. However,
this opportunity can come with greater possible downside
risk, meaning that smaller companies are generally
considered a longer-term investment.
Supportive business environment
For our smaller businesses, operating in the world’s
fifth-largest economy provides a solid foundation, from
a standout corporate governance regime to the world’s
central timezone. They also benefit from a stable political
culture and autonomous monetary policy, established
professional services and a robust legal framework.
Small but mighty
Smaller companies are often associated with risky
start-ups, but many of the UK’s smaller businesses are
household names. From high street retailers to online
review providers, these businesses are leaders in their
niches. Their smaller size gives them the flexibility to
respond to changing market conditions.
Innovation without the (ad)venture
While smaller listed companies offer a different
proposition to venture capital, it is still possible to invest
in innovation through their equity. Whether it’s cloud-
services for industry niches, animal genetics or precision
accuracy tools used in semi-conductor manufacturing,
UK-listed companies are at the cutting edge.
Governance
Financial
Statements
Additional
Information AGM Notice
3
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The Fund Managers’ approach to UK smaller companies
Keeping a close eye
While we typically aim to hold stocks for multi-year periods, we monitor our portfolio holdings
closely. This includes conducting ongoing company meetings with management and tracking
competitors. Smaller companies are often more sensitive to the macroeconomic backdrop –
our in-house research and economic expertise help us keep on top of these changes.
Characterising a good investment
Our deep experience with smaller companies has informed our understanding of what makes
a ‘good’ company. This has resulted in a simple formula: a good business model plus a strong
management team can lead to earnings momentum. A good business model could include
high recurring revenues (like subscriptions) or a hard-to-substitute product. Our in-house
research capabilities enable us to also assess non-financial metrics including governance, a
company’s peers and its competitors. When this complete picture is coupled with a reasonable
price, we may be willing to invest.
Meeting companies and making visits
A core element of our process is getting to know the companies in which we invest. Compared
to larger companies, there is very little investment analysis available for smaller companies.
To plug this gap, we conduct over 300 company meetings per year, including repeated
meetings with some. This enables us to build our own perspective on a company, the
confidence of its management and the reality of, for example, its factory-floor operations.
Building a portfolio
Having followed these steps, we end up with a portfolio of around 80-100 companies. We seek
diversity across the industries in which we invest and companies with revenues sourced from all
over the world. Our aim is to focus on the companies where we have the highest conviction, while
avoiding becoming too large a shareholder or being penned in by a stock that is hard to sell.
Narrowing the universe
From a universe of over a thousand companies, we exclude those that are too small (with a
market capitalisation below £150 million), unprofitable, excessively leveraged, or poorly
managed, as they do not meet our investment criteria. This process leaves us with around 200
potential stocks for the portfolio on which we undertake fundamental analysis using our 4Ms
process. We don’t look at companies through the lens of sector themes, as we don’t think this
works for smaller companies that often operate in unique niches.
Knowing when to sell
Should a company meeting or our own analysis reveal a deterioration in our investment
case, we will sell our shares as efficiently as market conditions allow. Equally, when market
conditions shift significantly, we will rebalance the portfolio as needed.
Governance
Financial
Statements
Additional
Information AGM Notice
4
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Janus Henderson Investors
The Manager
The Henderson Smaller Companies Investment Trust plc
is managed by Janus Henderson Investors.
Janus Henderson is a global asset manager with over 350 investment
professionals and 25 offices globally, employing over 2,000 people and
managing £289bn of client assets.
A deep history in UK smaller companies
Janus Henderson Investors has extensive experience of investing in UK smaller
companies. It has managed Henderson Smaller Companies Investment Trust
since 1992, when Henderson acquired Touche Remnant. Before then, Touche
Remnant, and firms into which it evolved, managed the trust since its creation
in 1887.
The fund management team benefits from the insights of around 70 analysts
across different sectors and regions, including European counterparts, health
and technology sector specialists.
The team’s long-held philosophy focuses on finding future growth potential at
a reasonable price. This philosophy is embedded in the team’s culture, with the
managers averaging 22 years’ investing experience. Across their funds, the
fund management team invests around £1bn into UK smaller companies.
Investment trusts, understood
Janus Henderson has been involved in investment trusts since Henderson’s
foundation in 1934. It is one of the largest investment trust asset managers in
the UK, and currently manages nine investment trusts. As a result, Henderson
Smaller Companies Investment Trust benefits from the support of a dedicated
investment trust team, including specialised legal, accounting, marketing and
sales support.
AUM
£289bn
Employees
+2,300
Offices globally
25
Investment
professionals
370
Source: Janus Henderson
Investors at 31 March 2025
Timeline of The Henderson Smaller Companies
Investment Trust plc
Incorporated
as The
Trustees,
Executors and
Securities
Insurance
Corporation
1887
Name
changed to
The Trustees
Corporation
1917
Appointed
Touche,
Remnant
& Co. as
managers
1974
Began
specialising
in smaller
companies.
Renamed
TR Trustees
Corporation
PLC
1982
Touche,
Remnant &
Co. acquired
by Henderson
1992
Name
changed
to The
Henderson
Smaller
Companies
Investment
Trust plc
1997
Mandate
refined to
focus solely
on UK smaller
companies
1999
Governance
Financial
Statements
Additional
Information AGM Notice
5
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Performance
Total return performance
Performance summary
Year to 31 May 2025
Discount
at year end
3
9.2%
(2024: 11.5%)
NAV per share
at year end
926.2p
(2024:
1,003.1p
)
NAV
total return
1
-5.1%
(2024: 14.5%)
Share price
total return
2
-2.3%
(2024: 17.3%)
Share price
at year end
841.0p
(2024: 888.0p)
Total return performance to 31 May 2025
1 year % 3 years % 5 years % 10 years %
NAV
1
-5.1 -6.3 22.2 54.9
Benchmark
4
5.0 16.0 61.8 64.0
Average sector NAV
5
1.1 10.8 53.1 72.8
Share price
2
-2.3 0.9 24.6 59.4
AIC sector share price
6
-1.0 11.9 59.6 65.8
FTSE All-Share Index
9.4 26.8 69.0 80.7
Total return performance for 10 years to 31 May 2025
%
1 NAV per ordinary share total return with income reinvested
2 Share price total return using mid-market closing price with income reinvested
3 Calculated using the NAV and mid-market share price at year end
4 Deutsche Numis Smaller Companies Index (excluding investment companies) total return
5 Average NAV total return of the Association of Investment Companies (“AIC”) UK Smaller Companies sector
6 Average share price total return of the AIC UK Smaller Companies sector
A glossary of terms and explanations of alternative performance measures are included on pages 93-96
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
This indicates a key performance indicator (“KPI”). KPIs are used to measure the success of your Company in meeting its
objective and by the directors to evaluate the performance of the Manager. See pages 29-30.
May
15
May
16
May
17
May
18
May
19
May
20
May
21
May
22
May
23
May
25
May
24
NAV per share
1
Share price
2
Benchmark
4
(Rebased to 100)
0
50
100
150
200
250
Governance
Financial
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Information AGM Notice
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See p.12 Fund Managers’ Report
Performance summary continued
Dividend performance
Dividend total
1
Per share for the year
28.0p
(2024: 27.0p)
Dividend yield
2
At the end of the year
3.3%
(2024: 3.0%)
Revenue reserve
3
£20.1m
(2024: £19.7m)
1 This represents an interim dividend of 7.5p and a proposed final dividend of 20.5p. See pages 8-9 for more details
2 Based on the ordinary dividends paid and payable for the year and the mid-market share price at year end
3 Revenue reserves at 31 May 2025 excluding payment of the recommended final dividend for 2025
4 This represents the interim and final ordinary dividends paid or recommended
Dividend growth
4
For the year
3.7%
(2024: 3.8%)
Over 10 years
87%
Years of consecutive
growth
22
Dividends for the years ended 31 May
4
Final Interim
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0
5
10
15
20
25
30
pence
Dividend growth compared to FTSE All-Share Index
Annual income (without reinvestment) an investor would have received on an initial £1,000 investment in the
Company compared with the FTSE All-Share Index on a financial-year basis
Company FTSE All-Share index
2005 2006 2007 20182010 2011 2012 2013 2014 2015 2016 20172008 20192009 2020 2021 2022 2023 2024 2025
0
50
100
150
200
Dividend (£)
Source: Janus Henderson
Governance
Financial
Statements
Additional
Information AGM Notice
7
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Penny Freer,
Chair
Performance
The Company underperformed its peer group,
due in part to the managers’ cyclical style tilt.
The managers have actively refined their process.
Fund Manager retirement
Neil Hermon will retire from the industry in
September 2025, after more than two decades
managing the Company.
Share buybacks
The Company bought back 8.1% of share capital
over the course of the year, adding 0.7% to NAV.
Continuation vote
The Company is subject to a continuation vote
at the AGM on 7 October 2025. The Board
encourages all shareholders to vote in
favour of continuation.
Chair’s Statement
Dear Shareholder,
Performance
The year under review was marked by heightened
volatility in global markets, with disruption in the UK as the
newly elected Labour Government began implementing
its political agenda.
The Company’s net asset value (“NAV”) fell by 5.1% and the
share price declined by 2.3% in the year to 31 May 2025, on
a total return basis, reflecting a narrowing of the discount
at which the shares trade from 11.5% to 9.2%. Over the
same period the AIC UK Smaller Companies sector’s
average NAV and share price total return rose by 1.1% and
fell by 1.0%, respectively. The Company underperformed its
benchmark, the Deutsche Numis Smaller Companies
Index (excluding investment companies), by 10.1%.
The Fund Managers have a style tilt towards more cyclical
stocks (those whose performance is closely tied to the
economic cycle), which has proven to be successful over
the long term but has been impacted disproportionately
by market conditions in the last few years. The Board
recognises that a protracted period of underperformance
is frustrating for shareholders, and has been in detailed
discussions with the Fund Managers about their
investment process.
Following these discussions, the Fund Managers have
implemented a series of refinements to the investment
process. The core philosophy, however, of investing in
growth at the right price remains. The Board believes that
these small but important refinements will enhance the
portfolio construction and stock-picking process whilst
maintaining this style tilt, particularly at a time when the
outlook for UK smaller companies continues to improve.
More detail on this year’s performance and the market
outlook can be found in the Fund Managers’ Report on
pages 12-18.
The Fund Managers have a style tilt
towards more cyclical stocks (those
whose performance is closely tied to the
economic cycle), which has proven to be
successful over the long term but has
been impacted disproportionately by
market conditions in the last few years.”
Dividend and earnings
Total revenue from the Company’s portfolio fell from
£24.8m to £23.1m and earnings per share (“EPS”) reduced
from 29.9p to 27.9p. Although the majority of portfolio
companies took advantage of their healthy financial
performance to increase dividend payments, there is
Refreshing your
company
Governance
Financial
Statements
Additional
Information AGM Notice
8
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a trend in the UK equity market to prioritise share
buybacks over dividends which is having an impact
on overall dividend growth. In addition, changes to the
portfolio in the year reduced the Company’s income.
The Board is pleased to recommend an increased final
dividend of 20.5p per share. Subject to shareholder
approval at the Annual General Meeting (“AGM”), the
dividend will be paid on 13 October 2025 to shareholders
on the register at 29 August 2025. The shares will be
quoted ex dividend on 28 August 2025. When added to
the interim dividend of 7.5p, this brings the total dividend
for the year to 28.0p per share, a 3.7% increase on the
2024 total dividend of 27.0p per share.
The dividend will be fully funded from revenue
generated in the current year. The EPS is calculated
using the weighted average number of shares over
the year, rather than the actual number of shares
outstanding at the time the dividend is paid. Therefore,
although EPS for 2025 is marginally lower than the total
dividend, the recommended distribution is supported
by current year earnings.
This will be the 22nd consecutive year of growth in the
annual dividend for the Company, which is an ‘AIC
Dividend Hero’.
Share rating and buybacks
Reflecting the market’s volatility, the Company’s share
price discount to NAV fluctuated in the year under review
between 7.1% and 14.5%, averaging 11.6% and closing the
year at 9.2%. The share price moved from 888.0p at the
start of the year to 841.0p at 31 May 2025. The Company’s
discount has been consistently narrower than the
weighted peer group average throughout the year.
The Board regularly reviews the discount to NAV at which
the shares trade. Shares are only bought back in the
market when the directors believe it is in the best interests
of shareholders as a whole to do so and at a price below
the prevailing NAV, thereby accreting the NAV per share
for the remaining shareholders. Market conditions over
the last two years have been particularly harsh and the
market has witnessed discounts widening across the
industry. During the period under review, the directors
considered that the unusually wide discount to NAV
presented an attractive opportunity to enhance
shareholder value through share buybacks.
The Company bought back 6,017,157 shares in the year
under review, representing 8.1% of share capital, based on
share capital at the start of the year and excluding
Treasury shares. Of these, 120,000 were cancelled and
5,897,157 are now held in Treasury. These buybacks
enhanced NAV by 0.7%.
A total of 6,987,667 shares, forming 9.4% of issued share
capital, was repurchased in the period since the 2024
AGM and up to 30 June 2025. Due to this high rate of
buybacks in the face of challenging market conditions,
the Board convened a general meeting on 1 July 2025 to
renew the share buyback authority to repurchase up to
14.99% of issued share capital. This renewal was approved
by shareholders. Since the general meeting on 1 July, and
as at 28 July 2025, a further 2,136,422 shares have been
repurchased, representing 2.9% of share capital.
During the period under review, the
directors considered that the
unusually wide discount to NAV
presented an attractive opportunity
to enhance shareholder value through
share buybacks.”
Capital structure
The Company’s capital structure includes a preference
stock class of 4,257 non-voting £1 units, each entitled to
an annual 0.001% dividend. In March 1999, the Board
offered to buy back all preference stock for cancellation.
The remaining preference stock is now held by
stockholders who did not respond to the offer. As over
25 years have now passed, the Board is taking steps to
cancel the remaining preference stock class and return
the capital associated with the stock to those
stockholders. In the 2025 AGM notice (pages 100-106),
the Board asks shareholders for authority to buy back
and cancel the preference stock.
Fund management changes
Neil Hermon, who has been Fund Manager of the
Company since 2002, intends to retire in September 2025,
leaving behind a strong team and demonstrable
investment philosophy. The Board extends its heartfelt
thanks to Neil for his tremendous stewardship of the
Company and the orderly way in which he is handing over
the leadership reins to his well-established colleagues,
including Indriatti van Hien, his Co-Manager. We wish him
all the very best.
JHI, working with the Board, is recruiting an additional
portfolio manager to join the team.
Board succession
Having served nine years on the Board, Victoria Sant will
retire at our AGM on 7 October 2025. I would like to thank
Victoria for her commitment, diligence and deep insight
into environmental, social and governance (“ESG”) matters
from both a portfolio and corporate perspective as an ESG
professional. In accordance with the Board’s long-term
succession plan, Mei Lim was appointed as a director in
2023 to succeed Victoria, and we will now return to a board
of five members post the AGM.
Chair’s Statement continued
Governance
Financial
Statements
Additional
Information AGM Notice
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Continuation vote
The Board has undertaken that shareholders should have
the opportunity every third year to vote on whether they
wish to continue the life of the Company. Shareholders will,
therefore, be asked to vote on this at the forthcoming AGM
as an ordinary resolution, which requires a majority vote in
favour to pass.
The Board is recommending that shareholders vote in
favour of continuation. We believe the Company’s strategy
of investing in smaller companies benefits especially from
the investment trust structure, which brings the
advantages of a stable asset base facilitating long-term
investment decisions, the ability to use long-term
borrowings to enhance shareholder returns, and the ability
to smooth dividend payments over time which the Board
has used to create a track record of long-term growth.
The Fund Managers have implemented
refinements to the investment
process, supported by the Board,
which they believe will enhance the
stock-picking process.”
Since the Company adopted its current approach under
Neil Hermon, long-term performance has been strong,
delivering an annualised NAV total return of 12.1% since
November 2002, when Neil started managing the Company,
and outperforming the benchmark in 16 of the last 22 years
with an excess NAV total return of 385% in aggregate, and
an annualised excess return of 1.7%. As outlined above, in
response to recent underperformance, the Fund Managers
have implemented refinements to the investment process,
supported by the Board, which they believe will enhance the
stock-picking process in line with the core and unchanged
investment philosophy going forward.
In the meantime, the Company continues to conduct
an extensive buyback programme motivated by several
factors including the wider market context and has
maintained the Company’s status as an AIC Dividend
Hero demonstrating the Board’s commitment to creating
value for shareholders.
The Board has been consulting closely with shareholders
who have confirmed their support for the Company and
continuation of the strategy.
We believe the Company’s strategy of investing in
smaller companies continues to represent an attractive
opportunity for both long-term capital and dividend
income growth, and benefits especially from the
investment trust structure.
Annual General Meeting (“AGM”)
We are pleased to invite shareholders to attend the AGM
in person at our registered office at 11.30 am on Tuesday,
7 October 2025. We encourage shareholders to attend for
the opportunity to meet the Board, Fund Manager Indriatti
van Hien and the other members of the UK Smaller
Companies team, including Shiv Sedani. Indriatti will give
a presentation on the year under review and the outlook
for the year ahead. Shareholders unable to join in person
can join the meeting by videoconference.
In addition to the AGM, the Board is holding an online
investor presentation this year, at 12 noon on Wednesday,
17 September 2025. This will include a Q&A session with
the Chair and Fund Manager. The directors encourage
shareholders to join, so they are fully informed about the
Company’s recent developments and its future plans,
before voting on the AGM resolutions.
Further details can be found on page 63 and in the
AGM Notice on page 100 onwards.
Outlook
Macroeconomic news flow continues to be noisy. The path
for monetary policy remains uncertain. Inflation remains
above central bankers’ target range. Trump’s ‘America
First’ policies have started to usher in a new world order
and have already triggered significant policy responses
from governments in Europe. These changes could induce
both inflationary and reflationary impulses, while the
spectre of a recession caused by the uncertainty brought
by Trump’s tariffs would be deflationary. To compound the
issue, geopolitics are still messy and conflicts in both
Europe and the Middle East are bringing volatility to
commodity prices. However, markets are forward looking
and given the attractive starting valuations in the UK small
and mid-cap equity market, less noise may be all that is
needed to drive markets forward.
There is potential for the UK economy to beat GDP growth
expectations. UK consumers continue to see real wage
increases, corporates are benefitting from falling (but still
restrictive) interest rates and both groups are sitting on
strong balance sheets. Confidence is the catalyst needed
to drive investment; hiring and spending decisions and
recent sentiment gauges suggest that despite the noise,
animal spirits are recovering, so we look to the year
ahead with cautious optimism.
The attractive valuations in this part of
the market are well-documented. These
claims are validated by continued
in-bound M&A and ongoing share
buyback programmes being
sanctioned by boards.”
Chair’s Statement continued
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Amid these challenging conditions, in aggregate the
Company’s portfolio continues to have quality bias and
holds companies with robust business models which are
soundly financed and being run by management teams
whose incentives are aligned with our own. The attractive
valuations in this part of the market are well-documented.
These claims are validated by continued in-bound M&A
and ongoing share buyback programmes being
sanctioned by boards.
Over the long term, this Company seeks to capture the
well-established small-cap premium: that is, the long-
term outperformance of small caps over large caps
driven by factors such as higher growth prospects and
higher alpha-generating opportunities in this under-
researched part of the market. Whilst the small-cap factor
has proved elusive in the UK over the last 10 years –
a period punctuated by the EU referendum vote, the
protracted period of political and economic instability that
ensued and ‘UK exceptionalism’ – we see good reasons
for course correction. Stable politics puts growth back on
the agenda in the UK. We see positive early indications of
this through commitment to planning reforms,
deregulation in the financial sector and most significantly,
a resetting of the trading relationship with the EU.
Improving sentiment towards UK plc would alleviate the
acute technical pressure this part of the market has
suffered from in terms of asset outflows, and we have
seen the positive impact on performance that the inflows
from global investors in calendar years 2015, 2017 and 2021
can bring. Smaller companies may underperform larger
companies in periods of economic dislocation as
investors flock to larger and more liquid asset classes,
but history will show that they rebound most strongly after
such periods.
We believe UK smaller companies continue to offer
exciting growth opportunities to long-term investors.
We remain confident in the ability of our Fund Managers
to draw on their consistent and disciplined investment
approach to generate significant long-term value.
Penny Freer
Chair of the Board
30 July 2025
Chair’s Statement continued
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Fund Managers’ Report
Fund performance
The Company had a disappointing year in performance
terms, with its net asset value falling in absolute terms and
underperforming the benchmark. The share price declined
by 2.3% and the net asset value (“NAV”) by 5.1% on a total
return basis. This compared with an increase of 5.0% in the
Company’s benchmark total return, the Deutsche Numis
Smaller Companies Index (excluding investment
companies). The underperformance comprised negative
contributions from stock selection, expenses and gearing
whilst the ongoing share buyback has been a positive
contributor to performance. At a macro-level our
underperformance was a function of rising bond yields
having a detrimental impact on the real economy and
therefore earnings and valuations of our predominantly
pro-cyclical and interest rate sensitive portfolio. The
negative contribution from stock selection arose from
company-specific issues impacting a number of our larger
holdings. Many of these issues are temporary in nature and
are already being fully reflected in underlying share prices.
However, we continue to appraise all our positions through
the lens of our rigorous investment process and have made
changes where necessary. Despite it being a poor year for
performance, the long-term record of the Company
remains strong, materially outperforming its benchmark
during the tenure of the UK smaller companies team, and
in 16 of the last 22 years’ discrete financial years.
Performance attribution
Year ended 31 May
2025
%
2024
%
NAV total return
-5.1 14.5
Benchmark total return
5.0 18.2
Relative performance
-10.1 -3.7
Comprising:
Stock selection without gearing
-9.3 -4.5
Gearing impact on stock selection
-1.0 -0.6
Gearing decision
-0.1 1.9
Expenses
-0.5 -0.5
Buyback
0.7 0.0
Source: Janus Henderson. See the glossary of terms on page 93 for an
explanation of the ‘gearing impact on stock selection’ and ‘gearing decision’
Value of £100 invested in 2003
2011 2013 2023 20252009200720052003
£0
£500
£1,000
£1,500
£2,000
£2,500
2015 2017 2019 2021
Share Price
NAV
Benchmark
Source: Morningstar Direct, 1 June 2003 - 31 May 2025
Summary
• For the year under review, company-
specific issues impacted a number of our
larger holdings. Some of these issues are
temporary in nature and we have taken
action where necessary.
• UK smaller companies continued to trade
on depressed valuations, as fiscal policy
in the UK and US pushed bond yields
higher and weighed on the outlook for
growth during the period under review.
• We see several positive developments
undertaken by the UK government
which could change sentiment
towards the asset class.
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Market – year under review
Despite continued market volatility, UK equity markets
posted positive returns in the year under review. The path
for monetary policy continued to dominate investors’
thoughts. The widely anticipated rate-cutting cycle
started in earnest last summer (2024). Base rates fell by
1% in the UK to 4.25% and by a similar amount in the US to
4.25-4.5%, whilst in Europe they fell 1.75% to 2.25% by period
end. However, expectations for further and faster cuts
were ultimately undermined by shift changes in fiscal
policy following elections in all three regions.
In the UK, the Labour Party’s first Budget, which focused on
taxing, spending and investing, saw an extra tax burden
levied on corporates in the form of increased national
insurance contributions and a requirement for additional
significant gilt issuance due to a large increase in public
spending. In the US, Trump secured a second term, having
campaigned on an inflationary mix of policies such as tax
cuts, immigration curbs and tariffs. Finally, a change in
government in Germany came with debt brake reform
and commitments to significant expenditure on
infrastructure and defence. Consequently, yields on core
10-year government bonds have risen due to increased
concerns around sticky inflation and how that country’s
fiscal policies may be on an unsustainable path.
Geopolitical uncertainty persisted and the period was
most notably punctuated by a return to isolationism by
the US. The level of reciprocal tariffs announced on
‘Liberation Day’ saw broader and more punitive tariffs
than the market expected. Reprieve came soon after
when the White House either paused or softened the
implementation of these reciprocal tariffs to give time for
trade deals to be negotiated, thus avoiding a full-scale
trade war. Nevertheless, animal spirits were wounded and
a formal trade agreement between the US and China is
still outstanding. Oil prices fell and investor concerns
around recession rose. Furthermore, ceasefire talks
between Russia and Ukraine hit an impasse and during
the pursuit of peace, the US made clear that European
NATO members must take on more responsibility for their
defence, which cast doubt over US commitment to Article
5 of the NATO treaty. The potential emergence of a new
world order called US exceptionalism into question and
the dollar depreciated against sterling as a result.
At home, the Labour Party won the general election with a
resounding majority. After an unsteady start and marked
fall in business and consumer confidence following the
Budget, sentiment was boosted by the signing of trade
deals with the US, India and most importantly Europe. All
three deals should now play a role in reducing inflation,
boosting growth in the long term and give cause to
believe that the political risk premium that has pervaded
UK equity market valuations may finally erode.
UK GDP growth was positive in the period and grew at 0.7%
in the first quarter of 2025, the fastest rate of growth
amongst the G7. In this environment, smaller companies
underperformed their larger counterparts, with the
Deutsche Numis Smaller Companies Index (excluding
investment companies) up 5.0% against a rise in the FTSE
All-Share Index of 9.4% as ongoing macro-uncertainty
impacted the more cyclically sensitive part of the market.
This year marks the sixth year of underperformance of UK
small caps versus UK large caps in the last 10 years: an
exceptional statistic, considering the well-documented
long-term outperformance of smaller companies versus
larger companies.
Gearing
Gearing started the year at 11.5% and ended at 10.2%.
Debt facilities are a combination of £30 million 20-year
unsecured loan notes at an interest rate of 3.33% issued
in 2016, £20 million 30-year unsecured loan notes at 2.77%
issued in February 2022, and £70 million short-term
bank borrowings.
As the Company’s NAV fell during the period under review,
the use of gearing was a negative contributor to
performance in the year. However, gearing has made
a significant positive contribution to investment
performance over the 22 years the fund management
team has managed the investment portfolio.
Attribution analysis
The following tables show the top five contributors to,
and the top five detractors from, the Company’s
relative performance.
Principal contributors
12 month
return
%
Relative
contribution
%
Balfour Beatty
+38.2 +0.9
Wood Group
1
-89.6 +0.8
SigmaRoc
+61.1 +0.7
Ascential
2
+73.9 +0.7
Raspberry Pi
+86.6 +0.6
1 Not owned by the Company
2 Position sold during the year
Fund Managers’ Report continued
Value of £100 invested in 1965
£
1995 2005 2015 2025198519751965
£0
£5,000
£10,000
£15,000
£20,000
£25,000
Deutsche Numis Smaller
Companies Index
FTSE All-Share Index
Source: Deutsche Numis, 1 June 1965 - 31 May 2025
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Balfour Beatty is an international contractor and
infrastructure investor. It operates three main verticals:
construction services in the UK, US and Hong Kong,
support services including the maintenance of
infrastructure assets such as road, rail, energy and
utilities in the UK and owning a portfolio of
infrastructure investments including military housing in
the US and schools, hospitals and student
accommodation in the UK. The shares have performed
strongly following robust order book growth and a
continuation of strong cash generation which has
enabled further cash returns to shareholders in the
form of the growth in the regular dividend and share
buybacks. Longstanding CEO Leo Quinn announced his
retirement in the period under review and we await the
views of incoming CEO Philip Hoare on existing margin
targets and company structure, both areas where we
see scope for further optimisation.
Wood Group is a multinational engineering, consulting
and project delivery firm focused on the oil and gas
industry. The Company’s shares came under severe
pressure following Sidara’s abandoned takeover offer.
Further share price pressure ensued when the company
announced an independent review into its accounting
practices following write-offs on large-scale projects.
This review unearthed material governance and control
failures. The Company did not own a position in this stock.
SigmaRoc is a building materials company operating in
the UK and Europe. The business has expanded rapidly
over the past year following its transformative acquisition
of CRH’s European lime and limestone operations which
made the company a market leader in five European
countries (Norway, Sweden, Finland, UK and Ireland) and
put it in the number two position in another three countries
(Germany, Poland and the Czech Republic). Lime and
limestone are used in a broad range of industries
including construction, steel, chemical, environmental and
agricultural which provides good end-market
diversification for the company. The shares have
performed strongly on account of earnings upgrades
driven by better-than-expected synergies from the CRH
deal, increasing optimism around end-market revival
following German debt brake reforms and an upbeat
capital markets day which presented ambitious growth
targets and shareholder friendly capital allocation policies.
Ascential is a global business-to-business events, market
intelligence and advisory firm. Following the divestment of
trend forecaster WGSN and its digital commerce business
in the prior financial year, the rump of the business
comprised two market-leading events: Cannes Lions and
Money20/20. The business was acquired by global events
operator Informa, at a substantial premium to the
prevailing share price in October 2024.
Raspberry Pi is a developer of single board computers
and microcontrollers for industrial and enthusiast
customers. The company had a unique beginning,
starting as a charitable foundation to build a low-cost
compute module as a teaching aid. The products gained
traction with developers at industrial companies where
Raspberry Pis were used to displace internally made
boards with a value-oriented solution. The company was
listed in June 2024 and the shares performed strongly
following good results and an optimistic long-term
outlook driven by new product origination, customer wins
and market growth in edge computing.
Principal detractors
12 month
return
%
Relative
contribution
%
Next15
-72.6 -1.0
Impax Asset Management
-52.2 -1.0
Zegona Communications
1
+64.4 -0.8
Future
-36.3 -0.8
TBC Bank
1
+89.8 -0.7
1 Not owned by the Company
Next 15 is a technology and data-driven consulting
business. The company’s historic growth has been driven
by new customer wins, digital investment opportunities
and acquisitions. More recently, earnings growth has been
challenged on account of weakness in government
spending around elections and demand from tech clients.
This in conjunction with the unexpected termination of a
material contract with one of the company’s largest
customers triggered a material profits warning in
September 2024. With the balance sheet in good shape,
valuation materially compressed and a renewed focus by
the board on value creation through self-help and
disposals, we believe the shares offer attractive value.
Impax Asset Management is an environmentally and
socially responsible focused asset manager based in the
UK. Whilst the company has shown periods of impressive
earnings growth from a combination of asset inflows and
positive market performance in the past, the last
12 months has been more challenging due to the loss of a
large intermediary client reducing assets under
management and company profitability. Whilst the
business remains attractive from a valuation and
recovery perspective, we have reduced the position size in
the portfolio to reflect the current outlook.
Zegona Communications is an investment company
specialising in acquiring, improving and selling European
telecommunications companies. It purchased Vodafone’s
Spanish operations in a majority debt-funded transaction
during the period. The shares performed strongly on
account of better-than-expected cost cutting and good
progress towards selling its network business which would
address the high leverage at the company. The Company
did not own a position in this stock.
Future is a tech-enabled global platform for specialised
media content operating three main verticals: business-
to-consumer where it monetises specialist content
through the sale of digital advertising, magazine
subscriptions and affiliate links, Go.Compare, a UK-based
price comparison and lead-generation platform and
business-to-business where it delivers specialist content
and services to professional and enterprise customers.
Shares came under pressure towards the end of this
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period under review on account of management turnover
and tariff-driven uncertainty which has caused brands to
restrain marketing budgets, thus undermining the
improving trajectory seen in the digital advertising
business in 2024. Despite the pressure on earnings in
recent years, the business has maintained resilient margins
and cash generation which is supporting a substantial and
ongoing share buyback programme. During the period
under review, the company signed a licensing deal with
Open AI which positively signals that management is
working hard to get ahead of any trends which may
disrupt audience growth or traffic flows to their sites. We
believe the business is undervalued on a sum-of-the-parts
basis and are encouraged by the board’s renewed focus
on portfolio optimisation in this respect.
TBC Bank is the largest commercial bank in Georgia.
The shares rallied off the back of strong loan growth,
expansion into Uzbekistan, the announcement of a new
share buyback and bullish sentiment towards the region
on hopes of a ceasefire in Ukraine. The Company did not
own a position in this stock.
Portfolio activity
Trading activity in the portfolio was consistent with an
average holding period of over five years. Our approach is
to consider our investments as long term in nature and to
avoid unnecessary turnover. The focus has been on adding
stocks to the portfolio that have good growth prospects,
sound financial characteristics and strong management,
at a valuation level that does not reflect these strengths.
Likewise, we have been employing strong sell disciplines to
cut out stocks that fail to meet these criteria.
Acquisitions
During the year we have added a number of new
positions to our portfolio. These include, but are not limited
to, the following:
Currys is an omnichannel electricals retailer operating in
the UK, Ireland and Nordics. Market shares in the UK and
Nordics are 23% and 28% respectively. After a programme
of extensive store rationalisation and balance sheet repair,
the business is in a stronger financial position, as signalled
by the resumption of its regular dividend after a five-year
hiatus. Our investment thesis is premised on an
improvement in trading in both the UK and Nordics driven
by recovering consumer confidence and a replacement
cycle in consumer electronics as five years have elapsed
since the pandemic-induced spending spree in the
category. The shares are lowly valued relative to their
margin targets, and continued delivery of the strategy
should see a material re-rating of the shares.
FRP Advisory Group is a provider of restructuring,
corporate finance and consulting services to corporates
in the UK. The company was formed in 2010 through a
management buyout and has expanded from a total
network of 29 partners at inception, to over 100 today.
The company is currently seeing strong tailwinds from the
business recovery division as corporates restructure and
reshape following a period of higher interest rates. With a
supportive backdrop and plans for further acquisitions,
FRP is well set for growth over the medium term.
Genus is a leading global porcine and bovine genetics
supplier. It breeds proprietary pig and cattle herds which
are optimised for traits which boost farmers’ margins
and delivers its products to customers in the form of
both semen and live animals. Its market shares in
porcine and bovine genetics are 16% and 8% respectively.
Our investment gives us exposure to healthcare
intellectual property and a management team focused
on improving earnings and returns in its bovine business
and building out a market leading position in China,
which represents 50% of global pork production, in its
porcine business. In addition, we see valuation upside
from the optionality around the approval and
commercialisation of its gene-edited disease-resistant
pig product (PRRSv).
Johnson Service Group is a provider of workwear and
linen rental services for the hotel, restaurant and catering
industries. The company has operations in the UK and
Ireland and employs over 6,500 people. After a
challenging period during Covid, the group is on a
stronger footing, with a more agile operating model, an
improved pricing dynamic and higher retention of existing
customers. Furthermore, with lower volatility in energy
costs, the company has the potential to improve its
margins over time. The company’s strong balance sheet
should allow the business to grow both organically and
through acquisition.
Pinewood Technologies is a provider of cloud-based
enterprise software for the car dealership industry.
The company was listed following a spin-out from
Pendragon, a UK automotive retailer, which was acquired
by Lithia Motors. Whilst the car dealership market is
mature, Pinewood has a meaningful opportunity to grow
in an industry where there has been notable under-
investment in software by owners to improve service
quality and reduce costs. Competitor providers have also
not kept up with the pace of innovation, leaving Pinewood,
with its leading cloud-based platform, to target
customers who are stuck with legacy solutions. Recent
contract wins with large dealerships demonstrate the
group’s right to win and underpins confidence for the
group’s future growth profile.
Spire Healthcare is a leading independent healthcare
group operating in the UK. It operates 38 private hospitals
and over 50 clinics, serving self-pay, insured and NHS
patients. Our investment thesis is centred around
management’s plans to drive volumes and improve
returns. We took advantage of a material pull-back in the
shares caused by increased labour cost headwinds which
pushed margin targets back to initiate a position in the
stock. We believe the valuation is underpinned by the
freehold assets of the 19 hospitals the company owns, and
we see upside to medium-term revenue forecasts and
returns from increasing demand for elective procedures
driven by long waiting lists and the capital-light expansion
of its primary care services.
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Disposals
To balance the additions to our portfolio, we have
disposed of positions in companies which we felt were
set for poor price performance or where we saw better
opportunities in which to recycle capital.
These disposals included: our position in CLS, an office and
commercial real estate operator with properties in the UK,
Germany and France following concerns around how the
company would manage leverage, the need to reinvest in
its estate and sustain the dividend; and our position in
Morgan Advanced Materials, a manufacturer of specialist
carbon and ceramic components. Operational
performance at the business has been disappointing, and
the investment into Silicon Carbide has not lived up to
expectations. With a delayed industrial market recovery,
we expect trading conditions to remain difficult.
We also disposed of our positions in: Midwich, a global
audio and visual distributor; Severfield, a UK structural
steel contractor; Spectris, a specialist provider of
high-tech instruments, test equipment and software;
Synthomer, a specialist chemicals company; and
Videndum, a manufacturer and supplier of camera
equipment accessories, on concerns around leverage
in the context of delayed end-market recovery in their
respective industries. In many cases there is a
requirement for these businesses to dispose of assets
to address elevated balance sheet leverage. Given
the uncertain macroeconomic backdrop, we assessed
the risk of not being able to consummate deals or
having to accept lower valuations as high.
We disposed of our position in Liontrust, a UK asset
manager, following a disappointing flow environment and
challenges in relation to future profitability of the business.
Finally, we disposed of our long-standing holding in RWS,
a tech-enabled language services provider around both
cyclical and structural concerns, in particular the
deteriorating returns profile of the business as it seeks to
pivot its service model and invest more in AI.
Takeover activity
Takeover activity in the portfolio persisted during the year
as trade buyers and private equity alike continued to
exploit the attractive valuations in the UK small and
mid-cap space. Takeover bids were received for: Alliance
Pharma, a consumer healthcare company, from DBay
Advisors; Alpha Financial Markets, a provider of
management consulting and technology services to the
financial service services industry, from Bridgepoint;
Ascential, a B2B events operator for the marketing and
fintech industries, from Informa; and Learning
Technologies, a provider of educational technology and
talent management software, from General Atlantic.
Top ten positions
The following table shows the Company’s top ten stock
positions and their active weight versus the Deutsche
Numis Smaller Companies Index (excluding investment
companies):
Top ten positions
at 31 May 2025
Portfolio
%
Index
weight
%
Active
weight
%
Paragon Banking
3.7 1.2 2.5
Balfour Beatty
3.3 – 3.3
Bellway
3.3 – 3.3
Mitchells & Butlers
2.9 1.1 1.8
Just Group
2.4 1.0 1.4
Volution
2.4 0.8 1.6
OSB Group
2.4 1.2 1.2
Vesuvius
2.0 0.6 1.4
SigmaRoc
2.0 – 2.0
Serco
2.0 1.2 0.8
A brief description of the largest positions (excluding
Balfour Beatty and SigmaRoc which were covered earlier)
follows:
Paragon Banking is a speciality lender with a primary
focus on providing buy-to-let mortgages to professional
landlords. The company enjoys a strong capital position,
enabling it to grow dividends whilst simultaneously buying
back its own stock. Regulations on complex underwriting
and the sophistication of its underwriting capability have
allowed Paragon to grow market share from non-bank
lenders which have suffered in the rising rate environment.
As base rates fall and business and consumer confidence
improves, commercial loans and mortgages should
become more affordable which should increase lending
volumes. Paragon should also benefit from government-
driven deregulation of the financial services sector which
could potentially lower capital requirements, increase the
scope for capital returns to shareholders and boost
lending volumes.
Bellway is a national UK housebuilder. The company has
a robust long-term track record of controlled expansion,
and solid operational and financial performance whilst
maintaining a strong balance sheet. Recent weakness in
the housing market, caused by the economic downturn
and rising interest rates, has put short-term profitability
under pressure across the industry as house prices soften
and volumes contract. However, the business remains well
placed to benefit from any recovery on account of its
well-invested land bank. The Government’s ambitious
housebuilding targets which seek to address the
structural undersupply of homes in the UK should provide
tailwinds for the sector as planning reforms are enacted.
Valuation support is provided by the discount to NAV at
which the shares currently trade.
Fund Managers’ Report continued
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Mitchells & Butlers is a national owner and operator
of pubs in the UK. Its major brands include All Bar One,
Browns, Harvester, Toby Carvery, O’Neill’s, Miller & Carter,
Nicholson and Ember Inns. The vast majority of its pubs
are owned freehold, meaning it has substantial asset-
value backing. The company has consistently
outperformed peers in terms of like-for-like revenue
growth on account of its well-invested estate, diversified
brand portfolio and consistency of customer service.
Whilst cost inflation remains acute, management has
reliably managed to mitigate these headwinds through its
‘ignite’ efficiency programmes. The company is steadily
repaying its securitised debt, enabling a transfer of value
from debt to equity, a trend which will now be accelerated
as its pension deficit is cleared. The shares trade at a
substantial discount to recent industry transaction
multiples and its NAV.
Just Group is an annuities provider in the UK. The business
provides both bulk annuities, where it assumes the liability
for paying for defined benefit pensions for a corporate’s
pension scheme in exchange for an upfront premium; and
personal annuities, where it sells policies to individuals
which pay a fixed stream of income to a policyholder for
the remainder of their life, in exchange for an upfront lump-
sum premium. After a difficult period for the annuities
market as low base rates dampened demand, and
increasingly stringent solvency rules made it more capital-
intensive to grow, the business is benefitting from higher
interest rates and increased pension de-risking activity.
Our investment thesis is premised on enduring growth,
supported by capital resilience in conjunction with a
valuation which does not reflect the economic value-add
currently being generated by the business.
Volution is a leading specialist in indoor air quality and
ventilation systems operating primarily in the UK, Australia,
Nordics and Continental Europe. It has exposure to both
the new-build (private and public) and residential repairs,
maintenance and improvement (RMI) market. Volution
generates industry-leading margins driven by efficient
supply chain management and better execution of its
in-house manufacturing process. The investment case is
premised on regulation and green-housing trends
continuing to drive growth in demand for ventilation
products in conjunction with a recovery in RMI spend in
the UK. Finally, we expect organic growth to continue to be
augmented by acquisitive growth under the ambitious
and long-standing management team.
OSB Group is a speciality lender with a primary focus on
providing buy-to-let mortgages to professional landlords.
Regulations on complex underwriting and the
sophistication of its underwriting capability have allowed
OSB to grow market share. After a difficult period for the
company as base rates increased, stoking fiercer
competition for flow, which drove both asset and deposit
spreads down, net interest margin expectations have now
been set at a more realistic level. The shares trade at an
attractive discount to tangible book value and in our view,
do not reflect the mid-teens return on tangible equity
guidance set by management. The company retains a
strong capital position allowing it to return significant cash
to shareholders through share buybacks and growing
dividends. Like Paragon Banking, OSB should similarly
benefit from deregulation in the financial services sector.
Vesuvius is a materials technology company.
The company provides steel flow control, foundry
technologies, advanced refractories and metal
processing products and services to customers around
the world. The business has gone through significant
rationalisation over recent years removing excess
capacity and improving returns on capital and margins.
The company has demonstrated robust pricing power
during the recent inflationary period, validating its leading
market position and high value add of its products.
Although the steel industry is seeing the impact of global
economic weakness, not helped by recent tariff
uncertainty, the business is well positioned to enjoy strong
growth once markets recover, especially as margins have
clear scope to strengthen. We are being paid to wait as
strong cash generation has allowed the company to
continue to pay a healthy dividend to shareholders.
Serco is a leading global government outsourcer,
providing a range of services across defence, justice and
immigration, citizen services, health and facilities
management and transport sectors. It operates globally
but its key markets comprise the UK and US. The business
employs 50,000 people in over 20 countries. The business
has over 500 contracts with governments, and the top 20
contracts account for nearly half of group revenues. Our
investment case is premised on continued strong demand
for the outsourcing of public services from governments
running increasingly stretched budget deficits. An under-
leveraged balance sheet should provide optionality
around M&A or further cash returns and a valuation
multiple which we believe underappreciates the strong
margins in its growing defence business.
Portfolio weightings
As at 31 May 2025, the portfolio was weighted by
company size as follows:
Weighting %
31 May
2025
31 May
2024
FTSE 100 0.0 0.0
FTSE 250 84.5 77.7
FTSE Small Cap 9.8 12.6
FTSE AIM 15.9 21.2
Gearing
(10.2)
(11.5)
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Market outlook
After a year of elections across major economies, it
should come as no surprise that global markets are set
to remain volatile. New governments are in the process of
implementing the bold policy promises they campaigned
on. In the US, the start of Trump’s second term has
already brought trade policy shocks, foreign policy
reversals, multiple U-turns and cast doubt over Federal
Reserve independence with much of this being
communicated via social media. Unpredictable
policymaking from the world’s largest economy has
raised concerns around a global economic slowdown.
As base rates are still restrictive across major economies
there is an obvious lever central bankers can pull to
stimulate demand. However, inflation is still sticky and
central bankers are taking a cautious approach to rate
cuts while they wait to see how policy changes, tariffs and
tax cuts in the US and labour cost increases in the UK
manifest themselves in price growth. Lower oil and energy
prices, despite continued military conflict, are helping
keep headline inflation at bay.
Corporates and consumers are dealing with
unprecedented uncertainty, which has precipitated
volatile readings in sentiment indicators, albeit from a
position of strength. Amongst UK consumers, savings
ratios remain high and unemployment relatively low.
Moreover, corporate management teams remark that
since the pandemic they have become so accustomed to
market upheaval that operating frameworks are already
in place for new challenges they may face. We take
comfort in this and the strong balance sheets of both
corporates and consumers, noting that they are
intrinsically healthier than they were ahead of the Global
Financial Crisis in 2008-2009.
Geopolitics are set to remain challenging. Conflicts in
Ukraine and the Middle East are struggling to reach stable
resolutions and heightened tensions between China and
the US persist. These themes are not new. What
distinguishes this year is the emerging challenge to US
exceptionalism. The country’s moral leadership and
economic dominance being called into question has
manifested itself in a weaker dollar and the potential for
lower foreign investment in the region. It is too early to say
whether or not this will be an enduring theme. In stark
contrast, however, we believe UK exceptionalism is abating.
There is no denying that the Labour Government’s
‘honeymoon period’ following its landslide election victory
was short-lived and that the Government is faced with the
challenge of reviving economic growth while walking a
fiscal tightrope. However, its recent focus on deregulation
within the financial services sector suggests that there are
signs the Government understands the need to get the
private sector back onside. Stable politics, a resetting of
the UK’s relationship with the European Union, its largest
trading partner, investment in capital projects and a real
focus on supply side reform should attract business
investment and foreign capital into the country. All else
being equal, a 1% shift in global equity allocations away
from the US and into the UK would drive a 25% uplift to
assets in the market. The current dismal allocations to UK
small-cap equities mean small changes can make a
material difference in underlying valuations in this
flows-driven part of the market.
After a lost decade in UK smaller companies, starting with
uncertainty about the EU referendum vote, we see good
reasons why fortunes could change and history will show
that small caps perform best after periods of economic
dislocation. UK small-cap valuations remain attractive
and sit well below long-term averages. They also remain
markedly depressed versus other developed markets,
even on a sector-adjusted basis. The persistent in-bound
M&A activity the market is experiencing tells you that
many market players are already taking notice and
boards have never been keener to signal value through
share buybacks. The IPO market has remained quiet; a
re-rating of the broader market can quickly change this.
Once the flywheel starts, it will be hard to stop.
We acknowledge the uncertainty around economic
conditions but feel confident that our long-standing
investment process will yield a well-diversified portfolio
of companies on attractive multiples that can deliver
cash-generative growth. There is no shortage of
investment opportunities in this market and
notwithstanding a difficult few years for performance,
we remain confident in our ability to generate significant
value from a consistent and disciplined investment
approach which has delivered so powerfully over the
longer term.
Indriatti van Hien and Neil Hermon
Fund Managers
30 July 2025
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Subsector breakdown
Analysis of total equity investments by subsector at 31 May
Portfolio snapshot
Equities
Portfolio
2025
%
Portfolio
2024
%
l Software and Computer Services
12.4 13.8
l Construction and Materials
12.3 10.5
l
Investment Banking and
Brokerage Services
8.5 8.9
l Travel and Leisure
6.4 6.2
l Finance and Credit Services
6.1 5.7
l Retailers
5.0 2.0
l Industrial Support Services
4.9 6.8
l Aerospace and Defence
4.9 3.7
l
Electronic and Electrical
Equipment
4.3 8.4
l
Household Goods and
Home Construction
4.3 4.2
l Media
3.2 3.7
l
Telecommunications Service
Providers
3.0 2.4
l Oil, Gas and Coal
2.9 3.2
l
Real Estate Investment
and Services
2.6 2.8
Equities
Portfolio
2025
%
Portfolio
2024
%
l Industrial Engineering
2.6 3.5
l Life Insurance
2.4 1.6
l Real Estate Investment Trusts
2.3 2.2
l Industrial Transportation
2.1 2.0
l Industrial Metals and Mining
1.7 1.6
l Leisure Goods
1.7 1.7
l
Pharmaceuticals and
Biotechnology
1.4 0.7
l Personal Goods
1.1 1.2
l Chemicals
1.0 2.1
l Medical Equipment and Services
0.9 0.3
l Consumer Services
0.6 0.5
l
Technology Hardware
and Equipment
0.5 –
l
Personal Care, Drug and
Grocery Stores
0.5 –
l Health Care Providers
0.4 0.1
l Telecommunications Equipment
– 0.2
Total investments
£698.72m
See page 74 which shows total investments held at fair value in the Balance Sheet. As at 31 May 2025, the Company had no holdings in the following
sectors: Closed-end investments and General Industrials. Sources: Factset, Janus Henderson
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1 Quoted on the Alternative Investment Market
Portfolio holdings
As at 31 May 2025
Ranking Valuation
2025 2024 Company Principal activities
2025
£’000
2024
£’000
Portfolio
%
1
1 Paragon Banking Buy-to-let mortgage provider
26,077 27,198 3.7
2
5 Balfour Beatty International contractor
23,311 21,541 3.3
3
3 Bellway Housebuilder
22,919 25,039 3.3
4
2 Mitchells & Butlers Hospitality operator
20,264 25,487 2.9
5
14 Just Group Enhanced annuity provider
16,987 13,623 2.4
6
16 Volution Producer of ventilation products
16,568 12,651 2.4
7
7 OSB Group Buy-to-let mortgage provider
16,531 20,416 2.4
8
8 Vesuvius Ceramic engineering
14,230 19,520 2.0
9
41 SigmaRoc
1
Aggregates supplier
13,878 9,141 2.0
10
17 Serco Outsourcing services
13,850 12,446 2.0
11
13 Chemring Defence products & services
13,649 13,896 1.9
12
4 Oxford Instruments Advanced instrumentation equipment
12,598 22,330 1.8
13
6 Future Specialist print & digital media company
12,312 21,200 1.8
14
10 IntegraFin Investment platform
12,036 14,918 1.7
15
9 Gamma Communications Telecommunications
11,997 15,972 1.7
16
23 Softcat Software reseller
11,039 11,620 1.6
17
63 Morgan Sindall Diversified building contractor
10,749 5,222 1.5
18
29 QinetiQ Defence services
9,955 10,840 1.4
19
32 Bytes Technology Software reseller
9,834 10,626 1.4
20
43 Rathbones Private client wealth manager
9,559 8,726 1.4
21
55 Wickes DIY retailer
9,086 6,622 1.3
22
15 GB Group
1
Data intelligence services
8,871 13,087 1.3
23
40 MONY Group Price comparison website
8,827 9,442 1.3
24
11 Computacenter IT reseller
8,806 14,482 1.3
25
70 Telecom Plus Provider of consumer services
8,679 4,287 1.2
26
27 Everplay
1
Games software developer
8,648 11,284 1.2
27
64 Moonpig Online card & gift retailer
8,370 5,049 1.2
28
30 Workspace Real estate investment & services
8,340 10,700 1.2
29
36 ZIGUP Commercial vehicle hire
8,131 9,838 1.2
30
21 Genuit Building products
8,129 11,713 1.2
31
25 Savills Property transactional consulting services
7,976 11,400 1.1
32
58 Avon Technologies Defence products
7,858 5,799 1.1
33
39 Hollywood Bowl Ten-pin bowling operator
7,736 9,570 1.1
34
20 Bodycote Engineering group
7,723 12,064 1.1
35
56 Harworth Urban regeneration & property
investment
7,702 6,364 1.1
36
53 Keller Ground engineering services
7,676 6,826 1.1
37
— Baltic Classifieds Online classifieds platform
7,653 – 1.1
38
37 Watches of Switzerland Luxury watch retailer
7,606 9,830 1.1
39
61 JTC Fund administrator
7,366 5,400 1.0
40
33 Victrex Speciality chemicals
7,204 10,609 1.0
41
— Currys Electronics retailer
7,175 – 1.0
42
48 Serica Energy
1
Oil & gas exploration & production
7,124 7,923 1.0
43
— AJ Bell Investment platform
6,995 – 1.0
44
46 Luceco Electrical products
6,873 8,307 1.0
45
35 Crest Nicholson Housebuilder
6,824 9,988 1.0
46
18 Renishaw Precision measuring & calibration
equipment
6,501 12,385 0.9
47
24 Pagegroup Recruitment company
6,468 11,440 0.9
48
51 Clarkson Shipping services
6,410 7,193 0.9
49
94 Alfa Financial Software Leasing software
6,336 1,978 0.9
50
68 DFS Furniture retailer
6,198 4,600 0.9
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Portfolio holdings continued
Ranking Valuation
2025 2024 Company Principal activities
2025
£’000
2024
£’000
Portfolio
%
51
88 Domino’s Pizza Franchise operator of pizza outlets
6,194 2,493 0.9
52
60 Wilmington B2B information provider
6,135 5,738 0.9
53
62 Auction Technology Online auction software provider
5,929 5,272 0.8
54
50 Burford Capital
1
Litigation finance
5,859 7,267 0.8
55
38 Hunting Oil equipment & services
5,761 9,695 0.8
56
72 Bridgepoint Private equity fund manager
5,579 4,111 0.8
57
26 Foresight Specialist fund manager
5,330 11,376 0.8
58
76 XPS Pensions Pensions consultancy
5,254 3,795 0.7
59
— Genus Animal genetics products & services
5,196 – 0.7
60
44 Trainline Online ticket retailer
4,708 8,597 0.7
61
— Johnson Service Group
1
Hotel & workwear linen services
4,561 – 0.7
62
96 Hill & Smith Fabricated metal products
4,477 1,578 0.6
63
73 Stelrad Radiator manufacturer
4,404 4,060 0.6
64
71 Bloomsbury Publishing Consumer & academic publisher
4,316 4,227 0.6
65
47 XP Power Electrical power products
4,244 7,980 0.6
66
— Trustpilot Consumer review platform
4,203 – 0.6
67
74 Empiric Student accommodation
4,113 3,847 0.6
68
66 GlobalData
1
B2B information provider
4,061 5,005 0.6
69
75 RM Education software & services
4,001 3,816 0.6
70
— Pinewood Technologies Automotive software & services
3,942 – 0.6
71
67 AB Dynamics
1
Automotive testing & measurement
products
3,904 4,927 0.6
72
— FRP Advisory
1
Investment advisory services
3,838 – 0.6
73
92 Capricorn Energy Oil & gas exploration & production
3,833 2,021 0.6
74
52 Harbour Energy Oil & gas exploration & production
3,738 6,930 0.5
75
— Raspberry Pi Computer board manufacturer
3,521 – 0.5
76
81 Advanced Medical Solutions
1
Medical supplies manufacturer
3,491 2,875 0.5
77
— Kitwave
1
Distributor of food & drink products to
the retail sector
3,486 – 0.5
78
77 Helical Office property investor & developer
3,471 3,472 0.5
79
80 ME Group Vending equipment
3,432 2,925 0.5
80
— 4imprint Promotional products & services
3,224 – 0.5
81
59 SThree Recruitment company
3,128 5,784 0.5
82
— Spire Healthcare Private healthcare services
3,122 – 0.5
83
28 Next 15
1
PR & media services
3,072 10,957 0.4
84
84 Young & Co’s share class A
1
Pub operator
2,916 2,778 0.4
85
100 Oxford Biomedica Gene & cell therapy
2,765 725 0.4
86
78 Essentra Industrial distributor
2,699 3,337 0.4
87
83 Grainger Residential property investor
2,609 2,869 0.4
88
— Niox
1
Medical supplies manufacturer
2,564 – 0.4
89
89 Young & Co’s share class NV
1
Pub operator
2,548 2,464 0.4
90
— Cohort
1
Defence services
2,528 – 0.4
91
86 Pebble
1
Promotional products & services
1,659 2,666 0.2
92
12 Impax Asset Management
1
ESG-focused investment manager
1,569 14,322 0.2
93
82 Benchmark Holdings
1
Aquaculture services
1,565 2,873 0.2
94
90 Eurocell Building products
1,553 2,318 0.2
95
95 Tribal
1
Educational support services & software
1,408 1,964 0.2
96
91 Pulsar
1
Marketing services software provider
1,178 2,238 0.2
Total equity investments
698,722 100.0
There were no convertible or fixed interest securities at 31 May 2025 (2024: None).
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Softcat
Case studies
Initial investment
2015
Percentage of portfolio
1.6%
(as at 31 May 2025)
What does it do?
Softcat is an IT infrastructure provider which delivers comprehensive
technology solutions to UK and international corporate and public sector
customers. It is a value-added reseller of both hardware and software.
The business was founded in 1993 and listed on the main market of the
London Stock Exchange in 2015.
Investment case
Our investment in Softcat is premised on strong secular growth trends in
digitalisation, the need for businesses and governments of all sizes to
invest in IT infrastructure to ensure operational resilience and efficiency
and to remain competitive in an increasingly tech-driven economy.
Softcat has benefitted from rising demand for cloud migration, cyber
security and digital workplace solutions and should continue to benefit
from increasing spend on the modernisation of technology stacks that
are a prerequisite to AI adoption. Demand is strong and Softcat’s
importance to its over 200 vendor partners has grown over time. The
business employs a highly trained and incentivised workforce and is
focused on growing relationships with small and medium-sized
enterprises, which vendors often struggle to reach directly or are simply
too expensive to serve using their own distribution. Softcat estimates its
market share in the UK to be ~5%. Management believes it serves
approximately 1 in 5 customers in its target market with an average
share of wallet between 20-25%.
We have placed value in Softcat’s ability to grow exclusively through
organic means and maintain strong conversion margins whilst investing
in future growth. Having initially invested at IPO, the Company has owned
these shares for nearly 10 years, with its valuation increasing by multiples
since then. We see it as a hallmark of quality that it has distributed over
£470m of cash returns to shareholders through regular and special
dividends during our period of ownership. Capital growth is our aim, but
dividends and cash returns continue to be a happy by-product of our
long-standing investment process.
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Initial investment
2019
Percentage of portfolio
1.9%
(as at 31 May 2025)
What does it do?
Chemring is a leading defence company based in the UK. The group
supplies products and solutions to protect people, platforms, missions
and information in a constantly evolving threat environment. The
company is organised under two strategic product segments: Sensors &
Information and Countermeasures & Energetics.
Investment case
The war in Ukraine and heightened geopolitical tensions have refocused
government efforts to increase defence spending and meet NATO
targets. Chemring is a beneficiary of this market backdrop, providing a
wide array of products and services to defence customers. An important
factor for growth going forward will be the group’s investment into
Energetics; this part of the business supplies energetic materials that are
used in various military devices. With a lack of supply availability across
Europe, there has been a renewed government focus on increasing
domestic capacity to develop a European military industrial base.
As an example of this in practice, the Norwegian government has
provided Chemring with funding to double production at its existing
energetics facility and is supporting the development for a second site
with a feasibility study underway. Other European countries are taking
note and have commenced separate surveys with Chemring to find
suitable manufacturing locations.
Altogether, the growth in the energetics business and the increased
European defence spend should help the company deliver on its
ambitious targets to reach £1bn in revenue by 2030, from the £510m
achieved in 2024. This implies a long runway of growth for the company,
which should be delivered at attractive rates of return.
Chemring
Case studies continued
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Business model
Investment objective
The Company aims to maximise shareholders’ total returns (capital and income)
by investing in smaller companies that are quoted in the United Kingdom.
Purpose
The Company’s purpose is to provide shareholders with long-term growth through investing in UK smaller
companies in a form of investment accessible to investors, both large and small. It appoints Fund Managers to
do this by following a disciplined process of investment in a diversified portfolio of quoted companies which
benefit from sustainable growth trends, and it controls costs and uses borrowings to enhance returns.
Investment policy
Smaller companies are defined as any company
outside the FTSE 100 Index. Once a portfolio company
enters the FTSE 100 Index, the Fund Managers have, in
normal circumstances, six months to sell the position.
Investments may include shares, securities and
related financial instruments, including derivatives.
The following investment ranges apply:
• Equities: 80% – 100% of total gross assets
• Fixed income and cash: 0% – 20%
The Company maintains a diversified portfolio
and cannot:
• Invest more than 5% of its total gross assets in any
one holding; or
• Hold more than 10% of an investee company’s equity,
in each case measured at the time of investment
(or additional investment).
The Board may give approval to the Manager to
exceed these limits to as far as 10% and 20%
respectively but only in exceptional circumstances.
It is the stated investment policy of the Company to
invest no more than 15% of its gross assets in other
listed investment companies (including listed
investment trusts).
Derivatives
The Company may use financial instruments known
as derivatives for the purpose of efficient portfolio
management.
Gearing
Net gearing (defined as all borrowings less cash
balances and investments in cash funds) is limited by
the Board to a maximum of 30% of shareholders’ funds.
Investment selection
The Fund Managers use rigorous research to identify high
quality smaller companies with strong growth potential.
The benchmark is the Deutsche Numis Smaller
Companies Index (excluding investment companies).
Generally, new investments are made in constituents of
the benchmark index, but they may continue to be held
when the underlying companies grow out of the smaller
companies sector. The Fund Managers’ investment
approach is selective, aiming to deliver higher returns
than our equity benchmark. The Manager is not a passive
or indexed investor. Reflecting this, the portfolio’s active
share at 31 May 2025 was 63.3% (67.7% at 31 May 2024).
Borrowings
The Company has access to borrowings up to £120 million
(2024: £120 million), comprising £50 million unsecured loan
notes and a £70 million committed bank facility with BNP
Paribas, London Branch. In addition, the Company has a
small amount of preference stock in issue (see the Chair’s
Statement on page 9 for more details).
Structure
Founded in 1887, the Company operates as an investment
trust under s1158 Corporation Tax Act 2010 and so enjoys
exemption from corporation tax on capital gains.
Governed by its articles of association and accountable
to its shareholders, the Company is a public company
limited by shares. It trades on the main market of the
London Stock Exchange, with a FTSE 250 listing in the
closed-ended investment funds category, and as such
complies with FCA requirements, including the UK Listing
Rules and Disclosure Guidance and Transparency Rules.
The Company is also a member of the Association of
Investment Companies.
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Growth & Income
Business model continued
Strategy
Our strategy is to offer investors a cost-effective
investment proposition, which provides access to an
active, professionally managed portfolio of investments
while benefitting from the capital gains treatment
afforded to investment trusts under the Corporation Tax
Act 2010. As an investment trust, the Company is a pooled
investment vehicle, allowing exposure to a diversified
range of assets through a single investment, thus
spreading the investment risk.
Operating as an investment company, the Company
delegates operational matters to reputable, specialised
third-party service providers. The board of independent
non-executive directors (the “Board”) retains oversight of
the Company’s operations and monitors and challenges
its service providers. The non-executive directors are all
independent of the investment manager and other
service providers. The Board is accountable to
shareholders, who can remove a director from office
where they deem it to be in the interests of the Company.
The significant advantages of this business model are due
to the closed-end nature of investment trusts, which
enables the Fund Managers to hold a long-term view on
investments and remain fully invested in both normal and
volatile conditions, as well as to use leverage to increase
returns for shareholders.
Culture and values
Throughout its long history, the Company has remained
true to its investment objective supported by investment
capability and values characterised by openness,
challenge, diversity, adaptation and integrity. This
openness and constructive challenge extends to the
Board’s culture and interaction with its service providers.
The directors expect all the Company’s service providers
to uphold the same values as the Board. This applies
particularly to the Manager, who is responsible for the
management of the Company’s portfolio. Given the
long-term nature of the investment proposition, these
factors remain core elements of company culture and
continue to influence the Board’s long-term strategy.
The Board seeks to make the most effective use possible
of the diversity of skills, characteristics and experience of
its members. At the date of this report, the Board
comprises six directors, four of whom are female and two
are male. Their biographies are set out on pages 43-44
and details of gender and ethnic representation are on
page 58. The Board’s diversity policy is set out on
pages 57-58. The Board recognises that the Manager
fosters and maintains an environment that values the
talents and contributions of individuals, and strives to
cultivate and practise inclusiveness for the long-term
success of the business and for the benefit of its
employees, investors and stakeholders more generally.
Management
The Company qualifies as an ‘alternative investment fund’
in accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”). The Board appointed
Janus Henderson Fund Management UK Limited (“JHFM”)
as its ‘alternative investment fund manager’ (“AIFM”).
JHFM delegates investment management services to
Janus Henderson Investors UK Limited (“JHIUK”).
The management arrangements are set out in an
agreement effective from July 2014 and most recently
revised in July 2024 to reflect current regulation and
industry standards, with no changes to terms affecting the
relationship with JHFM.
The Management Engagement Committee (see page 56)
annually reviews the management agreement, which can
be terminated with six months’ notice. Both JHFM and
JHIUK are authorised and regulated by the FCA and are
part of the Janus Henderson Investors group of
companies. References to ‘Janus Henderson’, ‘JHI’, or the
‘Manager’ refer to the services provided to the Company
by the Janus Henderson Investors group of companies.
Neil Hermon has been Fund Manager since November
2002 and is retiring in September 2025. The fund
management team will then be led by Indriatti van Hien,
who was appointed as the Company’s Co-Fund Manager
with effect from January 2025, having previously been
Deputy Fund Manager since 2016. The fund management
team receives a proportion of any performance fee paid
by the Company to the Manager and a proportion of that
is deferred into shares in the Company. Neil and Indriatti
have shareholdings in the Company.
The Company does not have employees, premises or
operations. Janus Henderson and its subsidiaries provide
accounting, sales, marketing and general administrative
services. Some of the administration and accounting
services are carried out, on behalf of the Manager, by BNP
Paribas. Janus Henderson Secretarial Services UK Limited
acts as corporate secretary.
Business ethics
As the Company’s operations are delegated to service
providers, the Board seeks assurances, at least annually,
from its service providers that they comply with the
provisions of the UK Modern Slavery Act 2015 and
maintain adequate safeguards in keeping with the
provisions of the Bribery Act 2010, Criminal Finances Act
2017, and sanctions element of the Economic Crime
(Transparency and Enforcement) Act 2022. The
Company has received assurances from its main
suppliers that they maintain a zero-tolerance policy
towards the provision of illegal services.
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Business model continued
Fee arrangements with the Manager
Management fee
The management agreement provides for the payment of
a composite management fee. The fee is charged at
0.35% of net assets per annum, payable quarterly in
advance at a rate of 0.0875% based on net assets at the
end of the previous quarter. Any holdings in funds
managed by JHI, of which there were none, would be
excluded from the calculation of the management fee.
Performance fee
The management agreement also provides for payment
of a performance fee, calculated as 15% of any
outperformance of the benchmark index, on a total return
basis, over the Company’s accounting year using net
assets at the financial year end, compared with net assets
at the beginning of the period. This is subject to a limit on
the total management fee and performance fee payable
in any one year of 0.9% of the average value of the
monthly net assets of the Company during the year.
No performance fee is payable if, on the last day of the
Company’s accounting year, the Company’s share price
is lower than the share price as at the preceding year end.
If the current year-end NAV per share is equal to or lower
than the previous year-end NAV per share, then:
• the performance fee payable will be restricted; and
• the fee can only be paid to the extent that it increases
the NAV per share above the previous year-end level.
No performance fee is payable for the year ended 31 May
2025 (2024: nil).
Any underperformance relative to the benchmark, or any
unrewarded outperformance (for example as a result of
the cap), will be carried forward and set against any
outperformance or underperformance respectively in
subsequent years. It can only offset underperformance
so that underperformance does not prevent a fee from
being earned in a future period and will never earn a fee
itself. For the year ended 31 May 2025, no unrewarded
outperformance is carried forward, but an adjustment
has been made to the carried-forward amount for
underperformance in the year.
Category of cost
2025
£’000
2025
% of
average
net
assets
1
2024
£’000
2024
% of
average
net
assets
1
Management fee
2
2,396 0.35 2,263 0.35
Performance fee – – – –
Total 2,396 0.35 2,263 0.35
1 Calculated as a percentage of average monthly net assets, which is the
basis on which the management and performance fee cap is calculated
2 The percentage in this table is calculated on the average of the
month-end net assets, which is the basis on which the cap is assessed.
The actual management fee is calculated and charged quarterly in
advance on the net assets at the end of the previous quarter
Ongoing charge
The Board believes that the ongoing charge of 0.45% during
the year (2024: 0.45%) represented good value for money
for shareholders. The ongoing charge calculation is
explained on page 94. A breakdown of the main cost
headings in monetary terms and as a percentage of
average daily net assets is on page 95.
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Increase
No change
Principal risks and uncertainties
The Board, with the assistance of the Manager, has carried out a robust assessment of the principal and emerging risks
facing the Company which relate to the activity of investing in the shares of smaller companies that are listed (or
quoted) in the United Kingdom. The directors seek assurance that the risks are appropriately evaluated, their possible
outcomes considered, and that effective mitigating controls are in place.
To support this process, the Audit and Risk Committee (“ARC”) maintains a detailed risk matrix which identifies the
substantial risks to which the Company is exposed and methods of mitigating against them as far as practicable.
The ARC considers the Company’s principal and emerging risks at each meeting, with a thorough review at least once
per year, using heat maps derived from the detailed risk matrix. Every year each director undertakes an individual
assessment of each risk. The ARC collates and reviews the individual ratings, triggering fresh critical debate. The
Board regularly considers these and does not consider the principal risks to have changed during the course of the
reporting period and up to the date of this report.
Throughout the year the Board has considered the impact of macroeconomic events with a global impact and
heightened market volatility, including US trade tariffs and a global trade war, the ongoing ramifications of the Russia/
Ukraine war and extreme conflict in the Middle East. The Board has had regard to the impact of mitigation measures on
manufacturing supply lines and on heightened uncertainty in the business environment. The Board has also considered
the wider consequences of economic uncertainty, disruption to markets and society through artificial intelligence (“AI”),
and the UK banks’ appetite for lending to the corporate sector.
While uncertainty remains around short-term economic conditions, the Board has concluded that the Company’s
portfolio and the Manager’s investment approach should prove resilient. The Fund Managers’ long-standing philosophy
is that, over the long term, smaller companies are able to deliver superior returns than the broader market, driven by the
fund management team’s fundamental, qualitative analysis, engagement with management teams and strong
valuation discipline.
The principal risks fall broadly under the following categories:
Risk Trend Controls and mitigation
Investment activity and
strategy
Poor long-term investment
performance (significantly
below agreed benchmark or
market/industry average)
Loss of the Fund Managers or
management team
Impact of political,
environmental, health or other
emergencies (e.g. pandemics,
war and a changing
macroeconomic
environment) on the
Company’s investments
Unmanaged ESG activities
and material climate-related
(physical and transition)
impacts within portfolio
companies
Market appetite – investment
objective and/or policy not
appropriate in the current
market or not sought by
investors resulting in a wide
discount
The Board reviews investment strategy at each board meeting. An inappropriate
investment strategy (for example, in terms of asset allocation or the level of
gearing) may lead to underperformance against the Company’s benchmark and
the companies in its peer group; it may also result in the Company’s shares trading
at a wider discount to NAV per share. The Board manages these risks by ensuring a
diversification of investments and a regular review of the extent of borrowings.
JHI operates in accordance with investment limits and restrictions determined
by the Board; these include limits on the extent to which borrowings may be
used. The Board reviews its investment limits and restrictions regularly and the
Fund Managers confirm their compliance with them each month. JHI provides
the directors with management information, including performance data and
reports and shareholder analysis. The Board monitors the implementation and
results of the investment process with the Fund Managers, and regularly reviews
data that monitor portfolio risk factors.
The Fund Managers report to each board meeting on their close oversight of the
portfolio, and more frequently in the event of a crisis. Performance is monitored
by JHI’s internal teams, any of which would escalate directly to the Board in the
event of matters of concern. At each meeting, the Board reviews the Fund
Managers’ ESG engagement with portfolio companies and their governance
structures, ESG risks reports, and votes cast against management. The Board
also reviews JHI’s ESG-related marketing activity specific to the Company.
The performance of the Company relative to its benchmark and its peers and
the discount/premium to NAV per share are key performance indicators
measured by the Board on a continual basis and are reported on pages 29-30.
The Board obtains assurances from JHI that the UK Smaller Companies team is
suitably resourced, and the Fund Managers are appropriately remunerated and
incentivised in their roles. The Board also considers the succession plan for the
fund management team on an annual basis.
The Board considers that the risk relating to investment activity and strategy
has increased due to the portfolio’s underperformance, as described on
pages 8-11.
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Risk Trend Controls and mitigation
Legal and regulatory
Loss of investment trust status
Breach of company law or
UK Listing Rules resulting in
suspension
In order to qualify as an investment trust, the Company must comply with
s1158 Corporation Tax Act 2010 (“s1158”). A breach of s1158 could result in the
Company losing investment trust status and, as a consequence, capital gains
realised within the Company’s portfolio would be subject to corporation tax.
The s1158 criteria are monitored by the Manager and the results are reported to
the directors at each board meeting. The Company must comply with the
provisions of the Companies Act 2006 (the “Act”) and, as the Company has a
listing in the closed-ended investment funds category of the FCA’s UK Listing
Rules and trades on the main market of the London Stock Exchange, the
Company must comply with the UK Listing, Prospectus and Disclosure
Guidance and Transparency Rules of the FCA.
A breach of the Act could result in the Company and/or the directors being
fined or becoming the subject of criminal proceedings. A breach of the FCA
Rules could result in suspension of the Company’s shares which would in turn
lead to a breach of s1158. The Board relies on its corporate secretary and its
professional advisers to ensure compliance with the Act and FCA Rules.
Operational
Failure of, disruption to or
inadequate service levels by
key service providers
Cyber crime leading to loss of
confidential data
Breach of internal controls
Impact of political,
environmental, health or other
emergencies (e.g. pandemics,
war and a changing
macroeconomic
environment) on operations
Disruption to, or failure of, the Manager’s accounting, dealing or payment
systems or the custodian’s records could prevent the accurate reporting and
monitoring of the Company’s financial position. The Manager has contracted
some of its operational functions, principally those relating to trade processing,
investment administration and accounting, to BNP Paribas. Details of how the
Board monitors the services provided by JHI and its other suppliers, and the
key elements designed to provide effective internal control and risk
management, such as review of service providers’ assurance reports, are
explained further on page 52.
Cybersecurity is closely monitored by the ARC as part of quarterly internal
controls reports, and the ARC receives an annual presentation from JHI’s Chief
Information Security Officer.
The Board monitors effectiveness and efficiency of service providers’ processes
through ongoing compliance and operational reporting. There were no
disruptions to the services provided to the Company in the year under review.
Financial instruments and
the management of risk
By its nature as an investment trust, the Company is exposed in varying
degrees to market risk (comprising market price risk, currency risk and interest
rate risk), liquidity risk and credit and counterparty risk. An analysis of these
financial risks and the Company’s policies for managing them are set out in
note 15 on pages 85-88.
Increase
No change
Emerging risks
At each meeting, the Board considers emerging risks which it defines as potential trends, sudden events or changing
risks which are characterised by a high degree of uncertainty in terms of occurrence probability and possible effects
on the Company. Once emerging risks become sufficiently clear, they may be treated as specific risks and enter the
Company’s matrix of significant risks.
During the year, the directors agreed that emerging risks would include:
• aggressive action taken by activist investors;
• global market uncertainty/disruption arising from President Trump’s actions and policies; and
• possible global conflict owing to escalated violence in the Middle East.
The Board receives reporting on risks from the Manager and other service providers in addition to any ad hoc reports on
specialist topics from professional advisors. The Board monitors effectively the changing risk landscape and potential
threats to the Company, from a corporate perspective, with the support of regular reports and ad hoc reports as
required, the directors’ own experience and external insights gained from industry and shareholder events. The Fund
Managers work with the Board to monitor the risk landscape, and identify emerging risks from the perspective of their
potential impact on the portfolio and investee companies.
Principal risks and uncertainties continued
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Measuring the Company’s performance
The directors use key performance indicators (“KPIs”) to measure the success of the Company in meeting its objective
and to evaluate the performance of the Manager. The focus of the Board is on the longer term, but when reviewing the
performance of the Manager each year, the Board uses the KPIs set out below. The charts and data on pages 6-7 and
98 give more insight into how the Company has performed against these KPIs. They are also explained in the glossary
and alternative performance measures on pages 93-96.
KPI Action
Performance
against benchmark
See p.6
The Board compares the performance of the Company’s net asset value (“NAV”) and
share price total return against the Deutsche Numis Smaller Companies Index
(excluding investment companies).
During the year under review, the Company’s NAV underperformed the benchmark by
10.1% on a total return basis. The Company’s share price underperformed the
benchmark by 7.3% on a total return basis.
NAV and share price total return against benchmark
NAV Share price
50
60
70
80
90
100
110
120
May
2024
Jul
2024
%
Sep
2024
Nov
2024
Jan
2025
Mar
2025
May
2025
Benchmark
Performance
against peer group
See p.6
The Board considers the Company’s net asset value (“NAV”) total return and share
price total return against the AIC UK Smaller Companies sector average, as the
Company’s peer group.
During the year under review, the Company’s NAV underperformed the peer group
average by 6.2% on a total return basis. The Company’s share price underperformed
the peer group by 1.3% on a total return basis.
NAV and share price total return against peer group average
NAV Share price
50
60
70
80
90
100
110
120
May
2024
Jul
2024
Sep
2024
Nov
2024
Jan
2025
Mar
2025
May
2025
Peer group average
%
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KPI Action
Discount/premium
to NAV
See p.98
The Board monitors the discount to NAV at which the Company’s shares trade and
reviews the average discount for the AIC sector at each meeting.
The Board regularly reviews investor relations, marketing and sales reports and
considers their effectiveness. It also considers whether to use share buybacks to
enhance shareholder value. Shares are only bought back at a price below the
prevailing NAV, thereby increasing the NAV for the remaining shareholders.
During the year under review, the Company bought back 6,017,157 shares, representing
8.1% of issued share capital. The discount to NAV ranged from 7.1% and 14.5%, averaging
11.6% and closing the year at 9.2%.
Discount against AIC sector weighted average
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
May
2024
Jul
2024
Sep
2024
Nov
2024
Jan
2025
Mar
2025
May
2025
Discount AIC sector weighted average
%
Ongoing charge
See p.95
The Board monitors the costs of running the Company calculated using the AIC
methodology for the ongoing charge (“OGC”), and also compares these costs with
the peer group.
During the year under review, the OGC was 0.45% (2024: 0.45%).
%
0.0
0.2
0.4
0.6
0.8
1.0
Company
OGC
Sector average
OGC
Industry average
(ex VCTs) OGC
Source: Association of Investment Companies
Measuring the Company’s performance continued
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Section 172 Statement
The Chair and all the directors invite shareholders and other stakeholders to contact them directly. Shareholders are
welcome to write to the Chair or Senior Independent Director at the registered office (see page 99), or by email to
itsecretariat@janushenderson.com with any feedback, queries or concerns. The Board reviews all shareholder
correspondence addressed to it.
The Board is pleased to invite shareholders to attend the AGM and Fund Managers’ presentation for the year ended
31 May 2025. More details are on page 63, and in the AGM Notice on page 100 onwards.
Interaction with stakeholders
The directors, acting collectively as the Board, act to promote the success of the Company for the benefit of
shareholders as a whole. In so doing, the directors have regard to the matters set out in s172(1) Companies Act 2006.
This includes the likely consequences of their decisions in the longer term, taking wider stakeholders’ needs into
account. The Board’s strategy is facilitated by engaging with a wide range of stakeholders through virtual and physical
meetings, research and presentations, and indirectly through service providers’ interactions within the investment
community and beyond.
As an investment company with no employees, the Company’s key stakeholders are all shareholders, service providers
and investee companies. Understanding stakeholders, their interests and views enables the Company to fulfil its
purpose and the directors to promote the success of the Company for the benefit of shareholders as a whole, with
constant awareness of other stakeholders and their interests.
Stakeholder map
The Board has adopted a map to support the directors in identifying and understanding stakeholders and how best
to engage and interact with each:
Manager Other service providers
and auditor
Legislator, regulator, stock exchange
Communities, environment
Association of
Investment Companies
Lenders Potential investors
Investee companies
The Henderson
Smaller
Companies
Investment Trust
plc
Shareholders
Set out on the following pages are examples of the ways in which the Board and the Company have interacted with key
stakeholders in the year under review, in line with s172 Companies Act 2006.
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Shareholders
Purpose
To enable shareholders to
make informed decisions
about their investments.
Clear communication of
the Company’s strategy
and performance against
objective can help the
share price trade at a
narrower discount to its
NAV which benefits
shareholders.
Close interaction with
shareholders enables the
Board to run the Company
in line with shareholders’
interests as a whole and
for the Company’s long-
term success.
Engagement
Key mechanisms of engagement included:
• encouraging investors to attend and vote at AGMs and general meetings.
Shareholders can address questions to all directors, the Fund Managers and the
company secretary;
• the Company’s website, which hosts a wealth of multi-media information about
investment performance and governance;
• use of social media channels (see page 99);
• providing regular market commentary;
• the Fund Managers’ presentations and meetings with professional investors and
analysts to foster understanding and good relations;
• a shareholder tracing and engagement programme continued during the year to
locate and reunite shareholders with their unclaimed or ‘lost’ entitlements to shares
and dividends;
• promoting the Company through marketing and public relations initiatives, as the
Board believes that the Company provides a credible investment choice for all types
of investors;
• the Board invites representatives of the corporate broker to provide regular analysis
of shareholder movements and voting patterns at shareholder meetings.
Outcome
During the year, the Chair and Senior Independent Director held meetings with larger
shareholders. The Fund Managers met many investors and wealth managers, and
reported back to the Board. The Board discussed feedback from these meetings
throughout the year, and also received regular updates from the corporate broker
and JHI sales team containing feedback from shareholders.
The Board and Manager worked with the corporate broker during the year to provide
access to the market and liquidity in the Company’s shares. The liquidity of the
Company’s shares benefits shareholders and potential investors as they can buy and
sell shares in a timely, efficient and cost-effective way.
The shareholder tracing and engagement programme is generating good results,
reuniting several shareholders with their assets of which they may not previously have
been aware or been able to claim.
Potential investors
Purpose
To provide access to the
market and liquidity in the
Company’s shares.
Engagement
The Board oversees the Manager’s marketing, investment relations and sales
programmes and works with the corporate broker to engage with the wider investor
community through various forums to understand their specific requirements and to
attract new shareholders.
The material made available to current shareholders, set out above, is also publicly
available for the benefit of potential investors.
Outcome
The Board receives ongoing feedback on the marketing, investor relations and sales
programmes from JHI and the corporate broker, and monitors their effectiveness.
By understanding the Company’s activities, performance, risks and prospects, potential
investors will also be able to make informed decisions about their investments.
Section 172 Statement continued
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Section 172 Statement continued
Janus Henderson Investors (“JHI”/“Manager”) as AIFM
Purpose
The Board holds the
Manager to account in
managing the Company’s
assets and keeps costs
competitive.
Key roles:
• Portfolio management
• Sales and marketing
• Company secretarial
• Financial reporting
• Internal controls functions
• Accounting and
administration
(outsourced by JHI to
BNP Paribas)
Engagement
The Board sets and oversees parameters for JHI’s activities. The Board’s effective
relationship with the fund management team enables both JHI and the directors to
understand performance and controls, and what may be expected in the future.
At each meeting, the Board reviews performance against investment objective, policy
and guidelines, and receives presentations from the Fund Managers and other JHI
representatives to exercise effective oversight of portfolio, performance and strategic
objectives. Outside board meetings, the directors work closely with JHI on portfolio
management and stakeholder engagement.
Each year the Management Engagement Committee (“MEC”) formally reviews JHI’s
performance in all respects (see MEC Report on page 56) and monitors succession
planning within JHI for all key positions supporting the Company.
Outcome
The portfolio activities and the impact of investment decisions are set out in the Fund
Managers’ Report on pages 12-18.
During the year, the Board held a dedicated strategy meeting to undertake a deep dive
into the underperformance of previous years, which enabled an objective insight into
the context and causes, and to take all possible actions to improve performance in
future years.
During the year, the directors assessed the Manager’s performance and service to the
Board, including a focus on the appointment to Co-Fund Manager of Indriatti van Hien
and future retirement of Neil Hermon, Co-Fund Manager, and its potential impact on
the management of the Company’s portfolio.
After thorough consideration of the ongoing management of the Company, the
directors were satisfied with the continued resource being applied to a successful
investment process, supported by the well-regarded UK Smaller Companies and wider
European Equities team. The Board satisfied itself that management costs remain
competitive, and the Manager is paid in accordance with the management
agreement.
The Board is proud of the diversity in the fund management team. Diversity Improves
Results is embedded as a core value in our Manager’s Mission, Values, and Purpose and
is a guiding principle towards creating an inclusive environment where everyone can
reach their full potential and that promotes cultural awareness and respect.
Third-party service providers
(including the depositary and custodian, registrar, corporate broker, legal counsel and fund accountant/administrator)
Purpose
The Board seeks to ensure
the Company is supported
by experienced and
capable third parties for all
the services required to be
a well-functioning and
well-governed FTSE 250
company.
Monitoring and ensuring
that all service providers
undertake their roles
diligently and correctly is
necessary for the
Company’s success and
good standing.
Engagement
Representatives of all the main service provider functions present regularly to the Board.
This regular interaction provides an environment where topics, issues and business
development needs can be dealt with efficiently and collegiately. The Board is then able
to ensure that service levels and fees remain in the best interests of shareholders.
The Board relies on the Manager to provide reports on suppliers’ performance at
each meeting of the MEC, while the directors remain responsible for assessing each
supplier’s internal controls and risk management systems, ESG matters, information
security and business continuity plans. This is achieved through the assessment of
suppliers’ assurance reports (see pages 52-53) and feedback from the Manager to
identify any issues or concerns.
Outcome
At the MEC meeting held in April 2025, the directors reviewed the contractual terms, fees
and performance of all the Company’s service providers (see MEC Report on page 56). The
key service providers gave updates on any material changes in organisational structure/
ownership and information regarding staff turnover and other cultural/leadership matters.
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Section 172 Statement continued
Investee companies (as listed on pages 20-21)
Purpose
To exercise good
stewardship practices.
Engagement
The Board sets the investment objective, and discusses stock selection, asset
allocation, and engagement with investee companies on specific topics (examples
on pages 22-23) with the Fund Managers at each board meeting. The Manager has a
dedicated Responsible Investment and Governance team which supports the Fund
Managers in the investment process. JHI engages with investee companies on behalf
of the Company.
At each meeting, the Board also reviews the votes cast on portfolio companies’
resolutions since the previous meeting and how they align with the Manager’s ESG
investment principles.
Outcome
The fund management team has conducted face-to-face and/or virtual meetings with
all portfolio companies’ management teams in the past year to enable them to
understand current trading and business prospects, and ensure that the ESG
investment principles and approach are understood. In this way the Company is a
responsible and engaged investor.
Communities and the environment
Purpose
To be a good steward of
assets within the UK
economy and industries.
To provide an investment
product which meets the
needs of its investors,
including retail investors.
Engagement
The Board mandates the Manager, supported by its governance function, to engage
with investee companies, when and where appropriate, on ESG matters in line with
good stewardship practices, and with an approach agreed with the Board.
The Board continues to work closely with the Manager to achieve the Company’s
investment objective in an effective, responsible and sustainable way in the interests of
shareholders, future investors and society at large. The fund management team defines
the ESG considerations pertinent to their own investment approach, as set out on
pages 37-40.
Outcome
The Board is conscious of the need to take appropriate account of broader ESG concerns
and for the Company to act as a good corporate citizen. An investment approach that
meets the needs of investors provides a service valuable to the communities in which the
Company operates. See the ESG engagement section on pages 38-39 for more details.
Lenders
Purpose
To employ gearing at low
rates to enhance
shareholder returns.
Engagement
Each month the Company certifies to its lenders that it complies with the loan
covenants of its short-term and long-term gearing facilities. JHI provides the Board with
monthly financial covenant compliance validation and regular financial reporting.
Outcome
During the year, the Board held a competitive tender for provision of a £70 million
revolving credit facility (“RCF”), as its one-year contract with BNP Paribas was due to
expire in February 2025. The Board reviewed proposals from several potential lenders.
BNP Paribas, London Branch, again provided the most competitive terms for a one-year
RCF and consequently was renewed for a further year.
The Company maintains a good relationship with its lenders and is well positioned to
raise financing to operate effectively as an investment trust. Strategic gearing (10.2% at
31 May 2025) positions the Company well to continue to enhance long-term returns
over many years to come.
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Section 172 Statement continued
Statutory auditor
Purpose
To enable stakeholders to
rely on the Company’s
audited annual report and
financial statements.
Engagement
The auditor attends at least two audit and risk committee (“ARC”) meetings each year
and maintains regular contact with the corporate secretary, the Manager and the ARC
Chair between meetings.
Outcome
Through close engagement, the directors ensure that the auditor in office is committed
to the investment trust audit market and provides the best quality service for an
appropriate fee level.
Late in 2024, the FRC reviewed Forvis Mazars’ 2024 audit of the Company in a formal
audit quality review, including interviewing the Audit and Risk Committee Chair, and
assessed Forvis Mazars LLP’s audit as ‘Good’, being the highest quality category.
Legislator, regulator, stock exchange, Association of Investment Companies (“AIC”)
Purpose
The Company should
conduct its business as a
good corporate citizen.
Engagement
The Board complies with the UK Listing Rules and DTRs, UK legislation and London Stock
Exchange requirements. The Company is a member of the AIC, the representative body
for investment companies. The AIC supports members by providing guidance on issues
specific to investment companies and running events for officers of its member
companies. The directors also participate in AIC consultations on key industry topics
that may affect the Company.
Outcome
During the year, the Company submitted its response to the FCA in its consultation on
the future of retail disclosures, expressing concerns about the FCA’s proposed
‘Consumer Composite Investments’ framework and its impact on fair competition and
demand for investment companies.
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Board decision making
The Board carefully considered and approved the promotion of Indriatti van Hien from Deputy Fund Manager to
Co-Fund Manager in January 2025.
Neil Hermon notified the Board of his retirement from JHI and the asset management industry in March 2025, to
take effect from the end of September 2025. The Board is working with JHI on the recruitment of a seasoned
portfolio manager to support Indriatti van Hien.
The Board undertook a detailed ‘deep dive’ investigation into the Company’s underperformance since 2022.
Following these discussions, the Fund Managers have made some changes to the investment portfolio, partly
reflecting the deteriorating outlook for the macroeconomy. These changes included further diversifying end-
market exposures and enhancing earnings momentum in the portfolio.
The Board held specific discussions about uncertainties facing the UK economy following the change in
government, the deteriorating macroeconomic and geopolitical environment following the election of US President
Trump, including confusion around US trade tariff reforms, the risks of escalating trade wars impacting global
supply chains, ongoing conflicts in Ukraine and in the Middle East, continuing tensions between the US, Europe and
China, and the changing appetite among bank lenders in the UK. The Board examined the implications of these
heightened risks for the investment portfolio and the Company’s balance sheet and cash flows.
The Board reviewed the Company’s structural debt and borrowing position. Taking into account the long-term
advantages of gearing for an investment trust and the Fund Managers’ investment strategy, the Board renewed
the £70m loan facility agreement with BNP Paribas London Branch for a further 12 months to reflect the Fund
Managers’ expected use of gearing. To come to their decision, the directors considered multiple indicative quotes
from potential lenders and took advantage of the most competitive rates and terms on offer.
During the year, the Board decided to increase the level of share buybacks, following extensive discussions about
the potential benefits to shareholders. In the Board’s view, share buybacks (and issuance) are useful structural
tools in the closed-ended sector, both in helping manage the supply and demand for shares and pricing, and as
deployment of capital. The directors convened a general meeting on 1 July 2025 to request shareholders to renew
their authority for the Board to buy back up to 14.99% of the Company’s ordinary share capital.
The Board set up a Treasury account to hold repurchased shares, so that these shares may be sold from Treasury
in future rather than being cancelled. All shares bought back since October 2024 are now being held in Treasury.
The Board has arranged a live online presentation from Fund Manager Indriatti van Hien on 17 September 2025,
which shareholders are invited to attend to assess performance during the year under review and understand the
market outlook and prospects for UK smaller companies. There will be an opportunity for attendees to ask questions
of the Fund Manager and Chair. In this way, shareholders who may otherwise not be able to attend the AGM will be
able to place their votes on an informed basis well before the proxy voting deadline.
The Board discussed and prepared a shareholder consultation programme ahead of the upcoming
continuation vote at the 2025 AGM. During the year, the Chair and Senior Independent Director met several major
shareholders to discuss key topics including performance, the continuation vote, the share price discount to NAV,
and changes within the fund management team. The Board invites discussions with shareholders, both on an
individual basis with the Chair and Senior Independent Director, and also at general meetings and AGMs, and at
the virtual investor presentation mentioned above. The directors welcome questions at any time from shareholders
(see page 99 for contact details).
The Board is always mindful to act in the best interests of shareholders as a whole and to have regard to other
s172 Companies Act factors. The Board takes into consideration the Company’s purpose, investment objective
and investment policy as well as the interests of the Company’s stakeholders when discussing matters and
making decisions. The Board holds regular, detailed discussions about the Company’s investment portfolio,
strategy, responsible investment and market performance, and considers market and industry developments.
Each year the Board approves key reporting around half-year results, annual results, dividend payments and the
AGM, and considers and approves the Company’s marketing and investor relations programme. In addition, the
Board made the following decisions during the year:
Governance
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Governance
Governance factors include mitigating risks such as
bribery and corruption, questioning board diversity,
executive pay, accounting standards and shareholder
rights, and positively influencing corporate behaviour.
ESG Report
Investment approach and ESG
engagement
The Team uses a combination of bottom-up and top-
down approaches to find companies that have
undervalued long-term growth potential. ESG issues are
identified as part of the Team’s well-established ‘4Ms’
process to analyse portfolio companies’ models,
management, money and momentum.
A key part of the philosophy is focused on the sustainability
of business models. The Team’s core belief is that the most
successful management teams over time will be those
which score well on ESG and sustainability factors, have
a long-term focus, a good track record of shareholder
alignment and an understanding of industry themes.
The conviction and focus on the long term are reflected in
the Company’s average holding period of over five years.
Sustainability themes regularly inform capital allocation
decisions. Companies offering goods and services
which address issues such as the transition to net zero,
ageing populations, urbanisation and the savings gap
have all been attractive propositions from a growth
perspective. The Team is also cognisant of the risks
accompanying ESG-themed investing: policy instability,
uncertainty around customer adoption and
technological obsolescence.
The Team believes that ESG factors impact all parts of an
investment case often implicitly, not explicitly. The
effectiveness of a company’s governance structure and
the impact a company has on the environment and
society are just as important as more traditional
indicators of quality such as cash flow or returns on
invested capital.
A company’s ESG characteristics directly impact how it is
valued. All these factors influence the valuation multiples
the market is willing to attribute to a company’s earnings
or the cost of capital used to discount its cash flows. The
Fund Managers’ core belief is that companies that score
well on ESG and sustainability factors could warrant a
premium over time.
Engagement with portfolio companies
The Team’s combined experience in the UK market has
created a deep knowledge base. The Team’s analysis
is further supplemented by a body of increasingly
sophisticated ESG-related data, broker research and
company meetings. The Team is wary of the fact that
individual ESG data points are not always material to
company performance or even comparable between
peers. However, the Team is conscious that
management’s overall attention to a collection of
impactful ESG or sustainability issues can be
interpreted as a leading indicator of quality, long-term
oriented leadership and so impacts the ability to
deliver enduring success.
The general level of governance at listed companies in
the UK is of a very high standard in terms of best
practice principles. The Team makes strong use of this
market feature to augment traditional corporate
governance and company research. As active
managers in the UK marketplace, the Team is
committed to the principles of good stewardship and
attends approximately 300 company meetings per
year. These opportunities are used to challenge
strategy and hold management to account where
issues have occurred.
In addition to engaging with company management, the
Team will often engage with the boards of portfolio
companies where they believe concerns need to be
escalated. If the Team does not feel that shareholder
concerns are being addressed when engaging with a
company, they will consider disinvesting.
Defining ESG
The Board believes in the power of engaged,
long-term ownership as a force for positive change.
The Board therefore supports the Fund Managers’
responsible approach to environmental, social and
corporate governance (“ESG”) matters, the way it is
incorporated into investment decisions by the UK
Smaller Companies fund management team (the
“Team”), their company engagement, and voting at
investee companies’ shareholder meetings. As one
of the largest investors in listed UK small and
mid-cap companies, the Fund Managers recognise
the meaningful impact they can have on the way
portfolio companies conduct their business, and
understand it is their duty to exercise this influence.
Social
Social factors include employee and community
relations, diversity, quality of life, enhancements in
knowledge and advances in supportive technology
for improved sustainability.
Environment
Environmental factors include climate change,
energy efficiency, resource depletion, water and
waste management.
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ESG Report continued
The Team collaborates closely with JHI’s in-house
Responsible Investment and Governance (“RI”) team, as a
specialist resource on ESG issues. The RI team screens
portfolios for major ESG issues and highlights important
ESG engagement topics ahead of company meetings.
In addition, the RI team and Fund Managers work together
to coordinate a pipeline of proactive engagement with
companies on a range of ESG themes. In the year to
31 May 2025, they undertook direct ESG engagements with
30 companies.
• environmental issues at 9 of the meetings;
• social issues at 6 of the meetings; and
• governance issues at 26 of the meetings.
Thematic engagement
The Team carried out thematic engagement during the
year to 31 May 2025 with companies in the portfolio on ESG
topics. These themes included a review of consumer duty,
decarbonisation plans for high portfolio emitters,
corporate governance standards and net zero targets
for oil and gas companies. See below for examples of
engagement. The Team continues to engage with
investee companies to monitor progress.
Reason for engagement: The requirement for
companies to account, plan and set targets to reduce
carbon emissions is more critical than ever. This is
particularly true for corporates that have a relatively
high baseline of emissions with a clear opportunity for
reduction. It is important to ensure that a company’s
emissions reduction targets are reasonable and
equitable, especially considering that current
management will not be in place indefinitely.
Objective for engagement: To review two high-
emission companies in the portfolio, understand
management’s actions on decarbonisation pathways
and how carbon considerations are embedded in
capital allocation decisions.
Scope and process: The Team conducted meetings
with a buildings material company with operations in
the UK and Europe and an oil and gas company, with
projects in the North Sea and South East Asia. Meetings
were held with the respective heads of the corporate
sustainability and ESG teams with discussions focused
on climate transition strategies.
Outcome: Both firms reviewed had performed
extensive analysis on their respective carbon reduction
pathways and had set an attainable target to reach
net zero.
Processes and strategies
The building materials company’s primary drivers to
net zero included fuel switching from natural gas and
coal to alternative fuels, re-carbonisation and carbon
capture and storage which is planned for 2030
onwards. Encouragingly, the company was forward-
thinking with respect to future decarbonisation plans
and would consider any impact potential acquisitions
have to decarbonisation targets by incorporating
carbon intensity into its M&A decision-making process.
The oil and gas company’s net zero targets stretched
to 2050. The company’s energy transition strategy
centres on carbon capture and storage projects in the
UK and Nordics, with a target to commence a first
project as early as 2027. On the governance front, the
company has integrated climate performance into
their compensation structure, with 15% of the annual
bonus component across the entire organisation linked
to climate change metrics. This demonstrates a
company-wide commitment to emissions reduction
beyond just the executive level.
Both companies have set ambitious target to reach net
zero. Carbon capture and storage remains a central
pathway for both, although this comes with a degree of
risk: technical hurdles, potential for leaks, economic
costs and delays in development. Any issues may push
out net-zero targets and as such, it will be important to
monitor future developments closely and the required
impact to both reducing carbon emissions and to any
future capital requirements.
Engagement on decarbonisation plans with high-emitting companies
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ESG Report continued
Voting
The Board believes that voting at general meetings is
an integral part of exercising responsible corporate
stewardship and provides an effective means of signalling
shareholder views on board policy, practices and
performance. The Board has delegated voting responsibility
to the Manager for the rights attached to the shares held
in the Company’s portfolio. The Manager votes actively at
shareholder meetings and engages with companies as
part of the voting process.
The decision on how to vote is guided by the best interests
of investors and based on an in-depth understanding of
the respective companies’ operations. Voting decisions
are made in keeping with the provisions of the Manager’s
ESG Investment Policy which is publicly available at
www.janushenderson.com. To retain oversight of the
process, the directors receive reporting at each board
meeting on how the Manager has voted the shares held
in the Company’s portfolio. The directors review the
Manager’s ESG Investment Policy, Stewardship Policy,
Proxy Voting Policy and Procedures at least annually.
The Fund Managers have a strong focus on good
governance practice and an active approach to voting.
Where appropriate, they will vote against resolutions at
general meetings. In most cases this is done following
engagement or consultation with the company prior to
general meetings.
During the year to 31 May 2025, the key issues which
the Fund Managers voted against concerned director
remuneration, overboarding, diversity and independence.
In total, the Company voted at 112 shareholder meetings
during the year to 31 May 2025, being 100% of portfolio
companies’ general meetings. At 12 of these meetings
Reason for engagement: The general level of
governance at listed companies in the UK is of a very
high standard. Boards are open to shareholder
consultations and feedback. Whilst the Team is not
activist, they make use of this market feature and
engage on various topics including where there are
opportunities to drive shareholder value.
Objective for engagement: To engage with board
members of two portfolio holdings to review company
strategy, capital allocation framework and methods to
improve shareholder returns. The two companies
identified had underperformed from a market and
delivery perspective, with the view that more could be
achieved to improve returns to investors.
Scope and process: The Team conducted meetings
with the incoming chair of a price comparison website
company with operations in the UK, and with the chair
of an industrial company that supplies power
convertors to the healthcare, industrial technology and
semi-conductor markets.
Outcome: Both companies reviewed were receptive to
engagement with the Team and were open to views to
enhance shareholder value.
Processes and strategies
With respect to the price comparison website business,
the Team advocated for the company to return excess
cash to shareholders. Whilst the group had delivered
solid earnings and growth, there remained a
disconnect with the share price such that, in the Team’s
view, the group traded at a discount to its intrinsic
value, in part due to investor concerns around a
misallocation of capital through M&A. To take
advantage of this valuation differential and address
shareholder concerns, a recommendation was made
to use the company’s strong balance sheet, to
undertake a share buyback and return excess capital
to shareholders. This would enhance shareholder value
by compounding earnings per share at an accelerated
rate and show capital discipline. Encouragingly, the
board was supportive of this view and commenced this
process in 2025, delivering a positive outcome for the
Company’s holding.
For the industrial company, challenging market
conditions and a prolonged industrial destocking
cycle, led to a weak order intake and low earnings
visibility. To address the high leverage position and
refinancing requirements, the company raised
additional capital from shareholders. Whilst
disappointing, the Team continues to see significant
value in the business and engaged formally with the
board to discuss views on maximising shareholder
value in light of a previous bid made for the company
in 2024. The Team encouraged the board to undertake
a formal strategic review to determine the company’s
fair market value considering the group’s market
position, fundamental strengths and potential return
to historic profitability. Encouragingly, the chair was
receptive to the Team’s views, and it was
communicated that this topic remains an active point
of discussion at the board. Whilst the review has not
been communicated to the market, there are several
options available, including a potential disposal, which
could unlock intrinsic value.
Both engagements resulted in positive actions for
increasing shareholder value. Whilst the full impact of
each outcome has yet to be fully realised, positive
steps were undertaken which should accelerate
returns overtime.
Engagement on governance and opportunities to drive shareholder value
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(11%), the Company placed a vote against management.
To influence decision making at board level where
appropriate, the Team participates in consultations
with various members of the boards of our portfolio
companies ahead of or after contentious AGM resolutions.
The Company voted against 18 resolutions in total, being
1% of all resolutions voted on during the year.
Voting record
Meetings voted with one or
11%
more votes cast against
management
Meetings voted with no 89%
votes cast against
management
In terms of resolutions not supported, these covered two
primary areas: compensation and director-related.
Compensation 50%
Director-related 44%
Strategic transactions 6%
Source: Janus Henderson using ISS categories
Note: Some meetings had more than one vote against management
Stewardship
Stewardship is an integral and natural part of JHI’s active,
long-term approach to investment management.
Strong ownership practices, such as management
engagement and proxy voting, can help protect and
enhance long-term shareholder value. JHI supports
stewardship codes and broader initiatives around the
world, including being a founder signatory of the UN
Principles for Responsible Investment, and is a signatory
of the FRC’s Stewardship Code. The intensive research
by portfolio managers and analysts involves conducting
thousands of interviews with senior executives and chairs
of companies throughout the world each year. These
teams develop long-term relationships with the
management of firms in which they invest. Should
concerns arise over a firm’s practices or performance,
they seek to leverage these constructive relationships by
engaging with company management or expressing their
views through voting on management or shareholder
proposals. Escalation of the engagement activities
depends on a company’s individual circumstances.
The environment
The UK Smaller Companies team engages with portfolio
companies on environmental matters where they arise.
As an investment trust, the Company’s own direct
environmental impact is minimal. The Company has no
greenhouse gas emissions to report from its operations,
nor does it have responsibility for any other emissions-
producing sources under the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations
2013. The Company’s indirect impact occurs through its
investments and the Fund Managers monitor the
carbon footprint of the portfolio as a measure of its
carbon intensity. For these reasons, the Board considers
that the Company is a low-energy user under the
Streamlined Energy & Carbon Reporting regulations
(“SECR”) and is therefore not required to disclose energy
and carbon information.
JHI recognises the importance of managing operational
activities in a sustainable way and minimising any
adverse impact on the environment. In 2021, JHI reached
its target of reducing its carbon footprint for its own
operations by 15% per full-time employee (“FTE”) based
on 2018 consumption. In 2022 JHI set new ambitious
five-year reduction targets for its operations relative to
a 2019 baseline:
• reduction target of 29.4% in Scope 1 (fuel) and Scope 2
(electricity) emissions;
• reduction target of 17.5% in Scope 3 (business travel,
freight, paper, water, waste, etc.) emissions; and
• reduction target of 17.5% on water and waste
consumption by FTE.
JHI discloses its carbon emissions annually through
regulatory and voluntary reporting frameworks, including
SECR , the Carbon Disclosure Project and in the
2024 Responsibility Report.
JHI produces product-level Task Force on Climate-Related
Financial Disclosures (“TCFD”) reports for funds in scope as
well as an entity-level TCFD report. These reports include
an overview of the climate-related governance, strategy,
risk management, and metrics and targets of JHI and its
portfolios. Product-level metrics include absolute carbon
emissions, carbon footprint, weighted average carbon
intensity, implied temperature rise and climate scenario
analysis (Climate Value at Risk).
JHI’s TCFD Report specific to the Company is available at
www.hendersonsmallercompanies.com.
ESG Report continued
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Viability Statement
The Company is a long-term investor. The Board
believes it is appropriate to assess the Company’s
viability over a five-year period in recognition of the
Company’s long-term horizon and what the Board
believes to be investors’ horizons, taking account of
the Company’s current position and the potential
impact of risks and uncertainties as documented in
the Strategic Report (see pages 27-82).
The assessment has considered the impact of the
likelihood of the principal risks and uncertainties
facing the Company, in particular investment
strategy and performance against benchmark,
whether from asset allocation or the level of
gearing, and market risk, in severe but plausible
scenarios, and the effectiveness of any mitigating
controls in place.
When considering the viability of the Company over the
next five years, the Board took into account the liquidity
of the portfolio, the borrowings in place, and the
Company’s ability to meet liabilities as they fall due. The
assessment also included the duration of the Company’s
loan and borrowing facilities and whether a breach of
any covenants might impact the Company’s NAV and
share price, recognising the current strength of the
covenants, liquidity of the portfolio and capital reserves
available. The Board used a five-year cash-flow forecast
and sensitivity analysis to support its deliberations.
The Board considers revenue and expense forecasts at
each meeting, with additional focus at the time of
reviewing half-year and year-end results. At the same
time, the Board discusses the impact of decreases in
revenue of up to 20% on the Company and the impact
that would have on revenue and capital reserves
available to pay dividends.
The Board does not expect there to be any significant
change in the principal risks and adequacy of the
mitigating controls in place, nor does the Board envisage
any change in strategy or objective or any events that
would prevent the Company from continuing to operate
over the next five years; the Company’s assets are liquid,
its commitments are limited and the Company intends to
continue to operate as an investment trust.
In coming to this conclusion, the Board has considered
rigorously the uncertainties facing the UK’s domestic
economy, inflation, the potential impact of a global
recession, US and global tariff reforms and potential trade
wars, risks associated with geopolitical instability, and
conflicts in Ukraine and the Middle East. The Board
considers that these events highlight the advantages of
holding an investment trust. The Board does not believe
these factors will have a long-term impact on the viability
of the Company and its ability to continue in operation,
notwithstanding the short-term uncertainties these events
have caused in the markets and specific shorter-term
issues, such as inflation, the cost-of-living crisis in the UK,
uncertainties about short-term economic growth and
supply chain disruption.
The last continuation vote at the 2022 AGM was passed
with the support of 99.2% of votes cast. The Board expects
shareholders to support the Company’s continuation at
the forthcoming AGM in October 2025, and subsequently
the 2028 AGM, both of which are within the viability
assessment period. The Chair, Senior Independent Director
and the Fund Managers have been meeting extensively
with shareholders this year to discuss recent changes to
the fund management team (as set out in the Chair’s
Statement on page 9), management of the Company’s
discount to NAV and the Company’s investment strategy
and prospects. Feedback from these meetings suggests
that shareholders are supportive of the Company
continuing in operation.
Based on their assessment, the directors have a
reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall
due over the next five years to 31 May 2030.
Approval
The Strategic Report has been approved by the Board.
On behalf of the Board
Penny Freer
Chair of the Board
30 July 2025
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Governance
In this section
43 Directors and Fund Managers
46 Corporate Governance Report
53 Audit and Risk Committee Report
56 Management Engagement Committee Report
57 Nominations Committee Report
59 Directors’ Remuneration Report
62 Directors’ Report
64 Statement of Directors’ Responsibilities
Governance
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Directors and Fund Managers
The right balance of skills and experience
Penny
N
ME
Freer
Position: Chair of the Board
(from 1 October 2021)
Date of appointment:
14 September 2018
Skills and experience
Penny is an experienced board
director who brings in-depth
investment expertise and leadership
skills to the Board. In particular, she
has many years of experience of UK
smaller companies, both as a director
and as an investment banker
advising companies in this sector.
Other appointments
Penny is chair of AP Ventures LLP. She
is also a non-executive director of
Weir Group plc and non-executive
chair of Empresaria Group plc.
From 2000 to 2004 Penny led Robert
W Baird’s UK equities division; prior to
this she spent eight years at Credit
Lyonnais Securities where she headed
the small and mid-cap equities
business. Penny was previously a
non-executive director of Advanced
Medical Solutions Group plc and
non-executive chair of Crown Place
VCT PLC.
Alexandra
A
N
ME
Mackesy
Position: Chair of the Audit and Risk
Committee (from 4 October 2019)
Date of appointment:
14 September 2018
Skills and experience
Alexandra brings a specialist
governance perspective and
particular experience of global
smaller companies to the Board. She
has a strong financial and risk
management background. Alexandra
has 19 years’ experience as a non-
executive director, audit chair and
senior independent director of
UK-listed investment trusts.
Other appointments
Alexandra is non-executive chair
of JPMorgan China Growth & Income
Investment Trust plc. In addition,
Alexandra works as a consultant
at Board Level Partners providing
external board evaluation services,
and as advisory member of the
investment committee of Oriel
College, Oxford. In her charity activity,
Alexandra is trustee of the
Longborough Festival Opera.
During her executive career in the
investment industry, Alexandra
worked in senior equity research roles
with Credit Suisse, JPMorgan and SG
Warburg in Asia. Alexandra was
previously a non-executive director
of Murray International Trust PLC.
Kevin
A
N
ME
Carter
Position: Senior Independent Director
(from 1 October 2022)
Date of appointment:
1 May 2021
Skills and experience
Kevin brings wide experience of
investment management and
leadership skills to the Board, both
as a fund manager and managing
director of investment firms. Having
been a non-executive chair of
Murray International Trust plc and
JPMorgan American Investment Trust
plc, and director of Lowland
Investment Company plc, Kevin is an
experienced investment trust director.
Kevin is a CFA charter holder and
has a doctorate in mathematical
statistics with a research subject
in financial economics.
Other appointments
Kevin is a non-executive director of
Aspect Capital Limited and Newton
Investment Management Limited, and
an advisory board member of
Battersea Dogs and Cats Home.
During his executive career, Kevin
led the European investment
practice of Watson Wyatt Limited
and was chief executive officer of
Old Mutual Asset Managers. Kevin
was previously a trustee director of
the BBC Pension Scheme and chair
of its investment committee.
Board of Directors
The directors appointed to the Board at the date of this Annual Report are set out below:
See p.48 Leadership, roles and division of responsibilities
Chair of Committee
A
Audit and Risk Committee
N
Nominations Committee
ME
Management Engagement
Committee
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Governance
Directors and Fund Managers continued
Yen Mei
A
N
ME
Lim
Position: Director
Date of appointment:
3 April 2023
Skills and experience
Mei is a chartered accountant and
qualified lawyer. With 25 years’
experience in the financial services
industry, Mei brings a deep
understanding of corporate finance,
M&A, strategy, transformational
change and business development
to Board deliberations. She has an
ESG-focused approach, particularly
around diversity and inclusion.
Other appointments
Mei is the Managing Partner at
Anthemis, a venture capital investor
with an embedded finance and
impact investment focus.
Prior to joining Anthemis, Mei was a
managing director at Barclays,
working there for over a decade in a
variety of different areas, notably
corporate development, strategy,
principal investments and finance.
Mei’s earlier career spans investment
banking at Macquarie Bank in M&A for
financial institutions, Ernst & Young LLP
(“EY”) in transaction advisory support
and Goldman Sachs as an associate,
having qualified as a chartered
accountant with EY in 2004.
Victoria
A
N
ME
Sant
Position: Director
Date of appointment:
23 September 2016
Skills and experience
Victoria brings a wide governance
and stakeholder perspective to the
Board with her in-depth ESG/SRI
knowledge and experience,
particularly through her roles at the
Investor Forum and an endowment
asset owner.
Other appointments
Victoria is managing director of the
Investor Forum, a not-for-profit
organisation facilitating engagement
between institutional investors and
UK-listed companies on long-term
strategic and governance issues.
Victoria is chair of the investment
committee of Crop Trust, a member
of the investment committee of the
National Trust endowment, and a
member of the advisory board of
Ownership Capital B.V., which is a
Dutch equity manager focused on
active ownership and ESG integration.
Prior to this, Victoria was an
investment manager at the Wellcome
Trust, where she was responsible for
the outsourced long-only equity
portion of the £18bn investment
portfolio, and a trustee director of the
pension scheme.
Michael
A
N
ME
Warren
Position: Director
Date of appointment:
1 March 2021
Skills and experience
Michael brings a combination of
investment, operational and CEO-
level management experience, with
expertise in managing money, people
and organisations. A particular
management specialism is Michael’s
experience of leading sales and
marketing divisions.
Other appointments
Michael is a non-executive director
of Carrington Wealth Management
and EdenTree Investment
Management Limited.
During his executive career, Michael
held several senior management and
investment roles. He was an
investment director of Thames River
Capital, a board member and the
managing director of the sales and
marketing divisions of HSBC
Investments UK Ltd, managing director
and head of retail for DWS, the UK
mutual fund business of Deutsche
Asset Management, and director and
global equity portfolio manager of
Baring Asset Management. Michael
was previously an advisor to Gresham
House Asset Management and a
non-executive director of Fidelity
Asian Values PLC and Rathbone Asset
Management Limited.
Governance
Financial
Statements
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Information AGM Notice
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Governance
All the directors are independent and non-executive. All directors are members of the Management Engagement
Committee and the Nomination Committee, both of which are chaired by Penny Freer. The Audit and Risk
Committee is chaired by Alexandra Mackesy, the other members of which are Kevin Carter, Yen Mei Lim, Victoria
Sant and Michael Warren.
Directors and Fund Managers continued
Neil Hermon
Position:
Fund Manager
23 years at JHI
36 years’ financial industry experience
Skills and experience
Neil Hermon is a Portfolio Manager on
the UK Equities Team at Janus
Henderson Investors, a position he has
held since 2013. He joined Henderson in
2002 as head of UK smaller
companies. Prior to this, he served as
head of UK smaller companies for
General Accident Investment
Management (later to become CGU
plc). He began his career at Ernst &
Young as a chartered accountant.
Neil received an MA (Hons) in
mathematics from Cambridge
University. He is an associate member
of the Society of Investment
Professionals (ASIP).
Indriatti van Hien
Position:
Fund Manager
14 years at JHI
18 years’ financial industry experience
Skills and experience
Indriatti van Hien is a Portfolio Manager
on the UK Equities Team at Janus
Henderson Investors, a position she
has held since 2016. Indriatti joined
Henderson in 2011 as a UK equity
analyst. Prior to Henderson, she was
with PricewaterhouseCoopers, where
she qualified as a chartered
accountant.
Indriatti graduated with a BA degree
(Hons) in modern history and
economics from Oxford University. She
is a member of the ICAEW and holds
the Investment Management
Certificate and Chartered Financial
Analyst designation.
Shivam Sedani
Position:
UK Equities Team Portfolio Manager
8 years at JHI
13 years’ financial industry experience
Skills and experience
Shivam Sedani is a Portfolio Manager
on the UK Equities Team at Janus
Henderson Investors, a position he has
held since 2025. Prior to that, he was
an associate portfolio manager from
2022 and was a research analyst with
the team since joining Henderson in
2017. Shivam previously worked at
Deloitte, where he qualified as a
Chartered Accountant and was a
manager in the mergers and
acquisitions tax team.
Shivam graduated with a BSc degree
(Hons) in economics from the
University of Birmingham. He is a
member of the ICAEW. Shivam holds
the Chartered Financial Analyst
designation.
Fund Managers
The fund managers at the date of this report are:
See p.12 Fund Managers’ Report
Governance
Financial
Statements
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Information AGM Notice
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Governance
Corporate Governance Report
Governance structure
Board of Directors
Comprises independent non-executive directors
Chair: Penny Freer
Senior Independent Director: Kevin Carter
The terms of reference for each of the committees of the Board are kept under regular review and are available
at www.hendersonsmallercompanies.com or via the corporate secretary.
Contractually engages third-party service providers
Janus Henderson
Fund Management: UK Smaller Companies equities team,
comprising Indriatti van Hien, Neil Hermon and Shivam Sedani
Sales, Marketing, Administration
Corporate Secretary: Janus Henderson Secretarial Services UK Limited
Alternative Investment Fund Manager: Janus Henderson Fund Management UK Limited
Auditor
Forvis Mazars LLP
Custodian and
depositary
HSBC Bank plc
Corporate broker
Deutsche Numis
Registrar
Computershare
Investor Services plc
Audit and Risk
Committee
Chair:
Alexandra Mackesy
Purpose: Ensures the integrity
of financial reporting, evaluates
the effectiveness of the
systems of internal control and
risk management, and
oversees the relationship with
the external auditors
See p.53
Audit and Risk Committee Report
Nomination
Committee
Chair:
Penny Freer
Purpose: Ensures the Board has
a balance of skills, experience
and diversity, oversees
performance reviews of the
Board and its committees,
considers directors’ fees and
maintains an effective
framework for succession
planning, with a
formal approach to the
appointment of directors
See p.57 Nomination Committee
Report
Management Engagement
Committee
Chair:
Penny Freer
Purpose: Ensures the
performance of service
providers meets expectations
and their terms of engagement
remain appropriate
See p.56 Management
Engagement Committee Report
Governance
Financial
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Information AGM Notice
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Governance
Corporate Governance Report continued
Chair’s statement on corporate
governance
The Board is pleased to report on its approach to the
Company’s governance and how the principles of the
applicable codes have been applied during the year. The
Board believes that good governance creates value and
is committed to high standards of corporate governance,
business ethics and transparency.
Compliance with corporate
governance codes
By virtue of the Company’s listing on the London Stock
Exchange, the Board is required to report on how the
principles of the 2018 UK Corporate Governance Code
(the “UK Code”) have been applied. The 2019 AIC Code of
Corporate Governance (the “AIC Code”) addresses the
principles and provisions of the UK Code as well as
additional provisions of specific relevance to investment
companies, and has been endorsed by the Financial
Reporting Council. This enables investment company
boards to report against the AIC Code and still meet
their obligations under the UK Code and associated
disclosure requirements under paragraph 6.6.6 of the
UK Listing Rules.
The Board has chosen to report under the AIC Code, as it
considers reporting against the AIC Code provides more
relevant information to the Company’s shareholders
about its governance arrangements. The AIC Code and
the UK Code can be found on the respective
organisation’s website: www.theaic.co.uk and
www.frc.org.uk.
A new UK Code was published in January 2024, with an
updated AIC Code published in August 2024. The new
Codes will be applicable to the Company’s financial year
ending 31 May 2026.
Statement of compliance
The Board confirms that the Company has applied the
principles and adhered to the provisions of the AIC Code
in the year under review and up to the date of this report,
except as set out below.
The Company has no chief executive or other executive
directors and therefore has no need to consider the
remuneration of executive directors. A separate
remuneration committee has not been established, as the
Board comprises only non-executive directors and the
Company has no employees. The remit of the Nomination
Committee includes responsibility for non-executive
directors’ remuneration. The Board Chair does not act as
Nomination Committee Chair when that committee
considers matters relating to her performance, succession
or remuneration.
In addition, the Company does not have any internal
operations and therefore does not maintain an internal
audit function, though the Audit and Risk Committee
considers the need for such a function at least annually.
Governance overview
The Board has three principal committees: Audit and Risk
Committee, Management Engagement Committee and
Nomination Committee, as set out in the governance
structure chart on page 46. Committee membership is
also noted on page 46.
The Board has engaged third-party service providers to
deliver the operations of the Company. Management of
the investment portfolio has been delegated contractually
to Janus Henderson, which also provides the day-to-day
accounting, company secretarial, administrative, sales
and marketing activities. The Company has appointed a
depositary, which in turn appoints the custodian which is
responsible for the safe custody of the Company’s assets.
The Company has appointed a registrar to maintain the
register of members and assist shareholders with queries
about their holdings.
The Company entered into each of these principal
contracts after full and proper consideration of the quality
and cost of the services offered, including the operation of
the service providers’ control systems in relation to the
affairs of the Company. The Board and its committees
maintain oversight of third-party service providers
through regular and ad hoc reporting and ongoing
monitoring by the Manager. The Board meets annually
with representatives of service providers to discuss,
amongst other matters, performance, service levels, their
value for money, information security and business
continuity plans.
The Board meets at least six times a year, with additional
board or committee meetings arranged when required.
The directors have regular contact with the Fund
Managers, the corporate secretary and other employees
of the Manager between meetings.
Governance
Financial
Statements
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Information AGM Notice
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Governance
Corporate Governance Report continued
Leadership, roles and division of responsibilities
Role Primary responsibilities
Board
• Responsible for providing leadership of the Company’s affairs.
• Setting the Company’s investment objective, policy and strategy.
• Establishing a robust internal control framework enabling effective risk management.
• Appointing and monitoring the performance of service providers within the parameters of the
control framework.
• Setting the Company’s culture and values.
• Ensuring that obligations to shareholders and other stakeholders are understood and met.
• No directors are linked via any other directorships.
Chair
• Leading and managing Board business and ensuring the timely flow of information from service
providers to the Board.
• Providing effective leadership of the Board, including setting its agenda and determining its governance
framework, culture and values, with the support of other directors and the corporate secretary.
• Leading the Board’s relationship and engagement with shareholders and other stakeholders.
• Managing the relationship with the Manager.
Committee
Chairs
• The leadership and governance of their committee.
• Maintaining the relationships with specialist service providers delivering services within the remit
of their committee.
• Reporting on the activities of their committee to the Board.
• Seeking approval from the Board for the responsibilities set out in their respective terms of reference.
Senior
Independent
Director
(“SID”)
• Fulfilling the role of sounding board for the Chair and intermediary for the other directors as necessary.
• Leading the effectiveness review of the Chair.
• Acting as a channel of communication for shareholders in the event that contact through the Chair
is inappropriate.
Independent
non-
executive
directors
• Providing constructive and effective challenge, especially to the decisions of the Manager.
• Scrutinising and holding to account the performance of:
– the Fund Managers in meeting the investment objective.
– Janus Henderson in the promotion of the Company and day-to-day smooth operations of the
Company’s business.
• Providing strategic guidance and offering specialist advice.
Company
Secretary
• Responsible to the Board for compliance with Board and committee procedures, rules and regulations.
• Minuting board and committee meetings, with any director’s concerns recorded in the minutes.
• Board has the power to appoint or remove the secretary in accordance with the terms of the
management agreement.
Manager
(AIFM)
• Promoting the Company’s investment proposition to professional and retail investors.
• Making the necessary reporting to the FCA regarding the Company’s status as an AIF.
• Providing accounting, company secretarial and administrative services to the Company ensuring
compliance with the applicable statutory and regulatory provisions.
• Coordinating the delivery of services provided by the Company’s other third-party service providers.
Fund Manager
• Selecting the stocks held within the portfolio.
• Diversification and risk management through stock selection and size of investment.
• Determining the volume and timing of acquisitions and disposals.
• Determining the frequency and level of gearing within the overall limits set by the Board.
Shareholders
• Approving material changes to the Company’s investment policy.
• Approving the final dividend.
• Making decisions on changes to the Company’s constitution.
• Electing and re-electing directors to the Board, or removing them from office if deemed appropriate.
• Determining the overall limit for directors’ remuneration.
Governance
Financial
Statements
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Information AGM Notice
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Governance
Corporate Governance Report continued
Operation of the Board
The Board has a formal schedule of matters reserved
for its decision, available on the website at
www.hendersonsmallercompanies.com, which includes
setting strategy and providing oversight of performance
against agreed measures. All matters that are not
delegated to the Manager under the management
agreement are reserved for the Board. The Board
approves any changes to the governance structure,
capital arrangements, board/committee composition,
oversees financial reporting and assesses the
effectiveness of the internal control framework.
Each board meeting follows a formal agenda, set by
the Chair in conjunction with the company secretary,
and includes a review of the Company’s investment
performance, financial position, compliance with
investment parameters and the investment objective,
a review of shareholder movements, along with any sales
and marketing activities and any other relevant business
matters, to ensure that control is maintained over the
Company’s affairs.
The Manager ensures that all directors receive, in a timely
manner, all relevant management, regulatory and
financial information to allow them to discharge their
responsibilities and enable smooth functioning of the
Board and its committees. Representatives of the
Manager attend relevant parts of board meetings to
enable the directors to probe further on matters of
interest or concern.
The Chair is invited to meetings of all the chairs of the
investment trust companies managed by JHI, which
provide a forum to discuss industry matters, and then
reports back to the Board. A fundamental consideration
in the Board’s decision-making is its awareness of the
interests of shareholders and other key stakeholders,
as explained on page 36.
Correspondence from shareholders addressed to the
Chair or the Company received by JHI is forwarded to
the Chair in line with audited procedures in place, and
is submitted to the next board meeting as appropriate.
Any urgent or important correspondence would be
circulated promptly at the request of the Chair.
Corporate secretary
The Board has direct access to the advice and services
of the nominated chartered secretary, who has been
appointed by the corporate secretary Janus Henderson
Secretarial Services UK Limited, a subsidiary of JHI with its
own reporting lines and audited internal controls. There
are processes and controls in place to ensure that there
is a clear distinction between the two entities, particularly
when dealing with any conflicts or issues between the
Company and JHI.
Directors’ appointment and tenure
Appointment and retirement
The Board may appoint directors at any time during the
year. Any director so appointed will stand for election by
shareholders at the following annual general meeting in
accordance with the provisions of the Company’s articles
of association. Each director receives a letter of
appointment that sets out, amongst other matters, what
is expected of them in terms of time commitment.
The Company’s articles of association permit shareholders
to remove a director before the end of his or her term
by passing a special resolution at a general meeting.
An appointment may be terminated by either party giving
written notice without compensation payable.
Tenure
Directors are generally expected to serve two terms of
three years, which may be extended to a third term at
the discretion of the Board and subject to satisfactory
performance evaluation and re-election by shareholders
each year. This ensures the regular refreshment of the
Board and its committees, and forms an integral part of
succession planning.
Given the entirely non-executive nature of the Board and
the fact that the Chair may not be appointed as such
at the time of their initial appointment as a director, the
Chair’s tenure may be longer where this is considered
by the Board to be in the best interests of the Company.
The appointment of all directors is subject to satisfactory
performance evaluation and annual re-election by
shareholders. The directors are cognisant of the benefits
of regularly refreshing Board membership and seek to
do so while retaining a balance of knowledge of the
Company and the key relationship with the Fund Managers.
Following the Nomination Committee’s review of the
contribution and performance of each director (see
pages 57-58), the continuing appointment of all directors
was agreed for resolution by shareholders at the 2025
AGM, other than Victoria Sant who will retire from the
Board on conclusion of the AGM, having completed her
ninth year of tenure.
External commitments
The Board considers a potential candidate’s other
commitments on appointment and then annually through
the performance evaluation process to ensure that
directors have sufficient time to commit to the Company.
A schedule of directors’ other commitments is reviewed
at each board meeting and directors are required to seek
the Chair’s approval prior to accepting further
appointments. The Chair seeks the SID’s approval before
accepting further appointments.
Professional development
An induction process is in place for new appointees and
all directors are encouraged to attend relevant internal
and external training courses and seminars throughout
the year, including bespoke investment trust director
development sessions provided by JHI. Ongoing individual
training requirements are considered as part of the
annual review process led by the Chair of the Board.
Governance
Financial
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Information AGM Notice
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Governance
Corporate Governance Report continued
Directors’ independence
All directors have a wide range of other interests and
are not dependent financially on the Company. At their
meeting in April 2025, the directors reviewed their
independence and confirmed that they all remained
wholly independent of the Manager. In line with provision
13 of the AIC Code, the directors agreed that Penny Freer
as Chair was independent on her appointment to the
Board in 2018 and continues to be independent, having
no relationships that may create a conflict between her
interests and those of shareholders.
The role and contribution of any longer serving director
(over six years in tenure) are subject to particularly
rigorous review. The Board has concurred with the
Nomination Committee’s assessment that Penny Freer
and Alexandra Mackesy, as longer-serving directors, are
independent in character and judgement, and that their
individual skills, broad business experience and high
degree of knowledge and understanding of the Company
are of great benefit to shareholders.
There were no contracts in effect during or at the end of
the year in which a director of the Company is or was
materially interested and which is or was significant to the
Company’s business. No director has a service contract
with the Company and there are no agreements between
the Company and its directors concerning compensation
for loss of office.
The Board has adopted a procedure for directors to take
independent professional advice in the furtherance of
their duties at the expense of the Company.
Directors’ conflicts of interest
The Company’s articles of association permit the Board to
consider and, if it sees fit, authorise situations where a
director has an interest that conflicts, or may possibly
conflict, with the interests of the Company (“situational
conflicts”). The Board has a formal system in place for
directors to declare situational conflicts to be considered
for authorisation by those directors who have no interest
in the matter being considered. In deciding whether to
authorise a situational conflict, the non-conflicted
directors must act honestly and in good faith with a view
to the best interests of the Company and they may
impose limits or conditions when giving the authorisation,
or subsequently, if they think this is appropriate. Any
conflicts considered, and any authorisations given, are
recorded in the relevant meeting’s minutes and the
register of interests.
Board attendance
The following table sets out the number of scheduled
board and committee meetings held during the year
under review and the number of meetings attended by
each director. All directors attended the AGM on 2 October
2024 and the general meeting on 1 July 2025. Each director
attended every board and committee meeting to which
they were entitled throughout the year. Outside the formal
meetings in the table, the Board or committees had
regular interaction on various corporate activities, and
met additionally to:
• consider Fund Manager promotion and succession
planning;
• receive market updates from JHI’s Head of Sales and
the corporate broker and consider share buybacks;
• consider significant industry developments and their
impact on the Company;
• plan promotional and marketing activities;
• undertake routine corporate business such as the
approval of the Company’s results and dividends; and
• convene the general meeting on 1 July 2025.
Board ARC MEC NC
Number of meetings
Penny Freer
6 3 2 1
Alexandra Mackesy
6 3 2 1
Victoria Sant
6 3 2 1
Kevin Carter
6 3 2 1
Michael Warren
6 3 2 1
Yen Mei Lim
6 3 2 1
Notes:
ARC: Audit and Risk Committee
MEC: Management Engagement Committee
NC: Nomination Committee
Directors’ insurance and indemnification
Directors’ and officers’ liability insurance cover was in
place throughout the financial year and remains in place
at the date of this report. The Company’s articles of
association provide, subject to UK legislation, an indemnity
for directors in respect of costs they may incur relating to
defence of any proceedings brought against them arising
from their positions as directors, in which they are
acquitted or judgment is given in their favour by the Court.
No indemnity was given during the year or to the date of
this report.
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Financial
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Governance
Corporate Governance Report continued
Internal control and risk management
The Board has overall responsibility for the Company’s
system of internal control and risk management, and for
reviewing its effectiveness, as set out in the following chart
‘System of Internal Controls’. The ARC supports the Board
in the continuous monitoring of the Company’s internal
controls and risk management framework, which includes
those of its key service providers. Its considerations in this
respect are set out on pages 53-55.
The Board has established an ongoing process for
identifying, evaluating and managing the principal risks
faced by the Company (see pages 27-28), aligning with
the FRC’s Guidance on Risk Management, Internal Control
and Related Business and Financial Reporting. The system
was in operation throughout the year under review and up
to the date of this report and is designed to meet the
specific risks faced by the Company. It takes account of
the nature of the Company’s reliance on its service
providers and their internal controls environments. The
system therefore manages rather than eliminates the risk
of failure to achieve the Company’s business objectives
and provides reasonable, but not absolute, assurance
against material misstatement or loss.
The key components of the internal control framework
include:
• clearly defined investment criteria which specify levels
of authority and exposure limits. The Board reviews
reports on compliance with the criteria at each
meeting;
• regular reporting that allows the Board to assess the
Company’s financial position. The management
accounts and forecasts are reviewed by the Board at
each meeting;
• the contractual agreements with the Manager and
other service providers. The Board reviews performance
levels and adherence to relevant provisions of the
agreements on a regular basis. The Management
Engagement Committee conducts a formal evaluation
of the overall level of service from third-party providers
at least annually (see page 56);
• the review of controls (including financial, operational
and compliance) at the Manager and other third-party
service providers. The Board receives quarterly
reporting from the Manager and depositary, reviews
annual assurance reports on the effectiveness of the
control environments at the Company’s key service
providers; and
• review of additional reporting provided by:
– the Manager’s Operational Risk team on the control
environment in operation at the Manager and their
view of the control environments of the key third-
party service providers used by the Company; and
– the Manager’s Internal Audit team on areas of
operation which are relevant to the Company.
The Board has carried out a review of the effectiveness of
the Company’s system of internal controls for the year
ended 31 May 2025. During the course of its review, the
Board did not identify and was not advised of any failings
or weaknesses relating to the Company’s portfolio that
have been determined as material.
Internal audit function
Systems are in operation to safeguard the Company’s
assets and shareholders’ investments, maintain proper
accounting records and ensure that financial information
used within the business, or published, is reliable. Being an
investment trust, with no employees and all executive
activities delegated to third-party service providers, the
Board relies on the Company’s framework of internal
control and the ARC’s views on reporting received from
specific teams, particularly at the Manager.
As noted on page 52, the Manager’s Operational Risk
team supports the ARC in considering the independently
audited reports on the effectiveness of internal controls in
place at the third-party service providers. The Manager’s
Internal Audit team provides regular reporting to the
Board on the operations at the Manager and presents to
the ARC at least annually. The Board has therefore
concluded that it is not necessary at the present time for
the Company to have its own internal audit function.
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Financial
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Governance
Board of Directors
(six non-executive directors)
Forvis Mazars LLP
(Statutory auditor)
HSBC
Bank plc
(“HSBC”)
Depositary/Custodian
Reporting
Depositary’s report
(quarterly)
Presentation from the
depositary and
custodian (annually)
Effectiveness
of control
environment of HSBC
Securities Services
(annually)
Janus Henderson
(“JHI” or the
“Manager”)
(Investment
management,
company secretarial,
sales, marketing,
financial reporting
and administration)
Reporting
Investment
performance update
at each meeting
Investment limits and
restrictions (monthly)
Internal controls
report (quarterly)
Effectiveness of
control environment
(annually)
BNP Paribas
(“BNP”)
(Accounting and
administration
services engaged
by the Manager)
Reporting
Balance sheet
Liquidity and gearing
Income forecasts
Portfolio valuation
Portfolio transactions
Portfolio attribution
Effectiveness of
control environment
(annually)
Computershare
Investor
Services PLC
(“Computershare”)
(Registrar)
Reporting
Voting and scrutineer
reports pre- and post-
shareholder meetings
Shareholder
correspondence
Operational service
updates
Effectiveness of control
environment (annually)
System of internal controls
How the system of internal control operates
The Board delegates contractually to service providers all the Company’s operational requirements. It maintains
oversight of these providers throughout the year by receiving regular reporting on their activities. All are
considered key stakeholders.
The MEC formally evaluates the performance and service delivery of all service providers at least annually.
The ARC evaluates the performance of the statutory auditor on completion of each audit cycle, and monitors the
effectiveness of the control environment of the Manager, Computershare, HSBC Securities Services and BNP each year
through review of their annual assurance reports, supplemented by the view of the Manager’s Operational Risk team.
Corporate Governance Report continued
By order of the Board
For and on behalf of Janus Henderson Secretarial Services UK Limited
Corporate Secretary
30 July 2025
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Governance
Audit and Risk Committee Report
Committee effectiveness review
The activities of the Committee were considered as part
of the internal Board effectiveness review, with the
conclusion that the Committee continues to be effective
in its operation.
Activities during the year
In the year under review the Committee assessed the
following matters:
Annual, half-year reports and auditor
• appropriateness of the Company’s accounting policies
and the quality and effectiveness of the accounting
records and management information maintained on
behalf of the Company;
• half-year results and the 2025 Annual Report;
• appropriate level of dividends to be paid by the
Company for recommendation to the Board;
• audit plan, including the principal areas of focus;
• nature and scope of the external audit and its findings;
• reappointment of the auditor, its performance,
remuneration and tenure of appointment, its
independence, objectivity, effectiveness and quality
of reporting; and
• a redesign of the Company’s annual report.
Internal controls and risk management
• internal controls in place at JHI, BNP, HSBC Securities
Services and Computershare;
• JHI’s policies and activities in relation to information
security and business resilience, meeting with
representatives of JHI’s internal audit, information
security and risk departments;
• key and emerging risks, risk management systems and
the Company’s risk register and strategic heat map, to
reflect changes in the risk environment. The Committee
uses its strategic ‘heat map’ of key risks to better
analyse risks holistically, collating each director’s
individual rating for each risk each year and analysing
reasons for any divergence in detail;
• policies and procedures across all service providers to
prevent tax evasion, money laundering and the
financing of terrorism, as well as to ensure business
continuity, information security, cybersecurity
protection and strong internal controls;
• any need for an internal audit function;
• JHI’s and other key service providers’ whistleblowing
policies for their staff to raise concerns in confidence
about possible improprieties;
• confirmation from the Company’s depositary of
management in accordance with the Investment
Funds Sourcebook, the Company’s articles of
association and the AIFMD; and
• liquidity analysis of cross-holdings across the
Manager’s funds.
The Chair of the Audit and Risk Committee
(the “Committee”), Alexandra Mackesy,
reports to shareholders on the year to
31 May 2025.
Membership
The members of the Audit and Risk Committee during
the year were Alexandra Mackesy as Chair, Kevin Carter,
Victoria Sant, Michael Warren and Yen Mei Lim. Ms Freer,
as Chair of the Board, attends the Committee’s
meetings by invitation only, in accordance with the AIC
Code. The Committee is chaired by Mrs Mackesy, who
is an experienced audit committee chair. Ms Lim is a
chartered accountant, and the Board considers that
Mrs Mackesy, Ms Lim and other members of the
Committee have recent and relevant financial
experience from their current and previous senior
management roles elsewhere.
Meetings
The Committee met three times in the year under review.
The Company’s external auditor, the Fund Managers, and
the Manager’s Financial Reporting Senior Manager for
investment trusts are invited to attend meetings of the
Committee on a regular basis. Other representatives of
the Manager (including Heads of Operational Risk,
Internal Audit, Business Resilience and the Chief
Information Security Officer) are also invited to attend
meetings on an annual basis, and more frequently as
helpful to the Committee.
The Committee Chair also meets with the Company’s
auditors as part of the audit planning process and
during the audit, and to keep the audit firm up to date
with corporate developments, as well as being informed
of any accounting or reporting changes envisaged.
Role and responsibilities
The Committee is responsible for ensuring the integrity of
the Company’s financial reporting, the appropriateness
of service providers’ systems of internal control and risk
management, and the effectiveness and objectivity of
the external auditor. The Committee oversees the
relationship with the external auditor, approving the
terms of their appointment or their removal.
The Committee Chair formally reports to the Board
after each audit and risk committee meeting
and makes recommendations for approval where
relevant. The Committee’s responsibilities are set
out in formal terms of reference, available at
www.hendersonsmallercompanies.com, which are
reviewed at each meeting.
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Governance
Audit and Risk Committee Report continued
Annual Report for the year ended 31 May 2025
The Committee considered the following significant matters in respect of the Annual Report for the year ended
31 May 2025:
Significant issue How the issue was addressed
Valuation and
ownership of the
Company’s investments
The directors have appointed the Manager to perform the valuation of the assets of the
Company in accordance with its responsibilities under the AIFMD rules. As required, the
Manager has adopted a written valuation policy, which may be modified from time to
time. Actively traded investments are valued using stock exchange prices provided by
third-party pricing vendors. Ownership of listed investments is verified by reconciliation
to the custodian’s records.
Correct calculation of
the performance fee
The performance fee calculation is prepared by BNP and reviewed in depth by the
Manager and by the Committee, all with reference to the management agreement,
verifying that no performance fee is due for the year.
S1158 Corporation Tax
Act 2010 compliance
The Committee regularly considers the controls in place to ensure that the regulations
for ensuring investment trust status are observed at all times, receiving supporting
documentation from the Manager and BNP.
Maintaining internal
controls
The Committee performs oversight over the Company’s service providers by receiving
regular reports on internal controls from JHI, BNP, Computershare and HSBC Securities
Services and its delegates. The Committee has access to the relevant personnel of JHI
who have a responsibility for risk management and internal audit. The assurance report
for one of the Company’s service providers was qualified by the respective service auditor.
The Committee thoroughly reviewed the instances giving rise to the qualification and
received confirmation that the exceptions identified had no impact on the Company.
Recognition of dividend
income
Income received is accounted for in line with the Company’s accounting policies (as set
out on page 77), and is reviewed by the Committee at each meeting. Special dividends
may be required to be allocated between revenue and capital, and the Committee
reviews the rationale provided by the Manager and approves the treatment.
Viability
The Committee scrutinised assumptions around the viability statement set out on page 41,
especially factors behind macroeconomic and geopolitical uncertainties, US tariff reform
and economic uncertainties, to satisfy itself of the Company’s resilience over the five-year
time frame. The directors reviewed the shareholder register and made enquiries of the
corporate broker and the Manager to understand shareholder movements and
circumstances over the year and up to the date of this report with any potential to have
an adverse impact on the continuation vote to be held at the 2025 AGM.
Going concern
The Committee scrutinised assumptions around the going concern statement set out on
page 76 and the Company’s ability to continue in operational existence for at least twelve
months from the date of approval of the financial statements, concluding that the
Company’s financial statements should be produced on a going concern basis.
Appointment, review and tenure of the
external auditor
Regulations in force require the Company to rotate audit
firms after a period of ten years, which may be extended
where audit tenders are carried out or where more than
one audit firm is appointed to carry out the audit. The
Committee last carried out an audit tender process in
2021 and appointed Mazars LLP (now ‘Forvis Mazars LLP’)
as external auditor starting from the year ended 31 May
2022. The auditor is required to rotate partners every five
years, and this is the fourth year the current audit partner
has been in place.
The Company complies with the requirements of The
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014. This order relates to the frequency and governance
of tenders for the appointment of the external auditors
and setting policy on the provision of non-audit services.
Policy on non-audit services
The Committee keeps under regular review its policy on
the provision of non-audit services by the auditor. The
policy sets out that the Company’s auditor will only be
considered for non-audit work where this is not prohibited
by regulations and where it does not appear to affect the
independence and objectivity of the auditor. Any provision
of non-audit services by the auditor is not permitted to
exceed 70% of the average annual statutory audit fee for
the three consecutive financial periods preceding the
financial period to which the cap applies. Such services
would require approval in advance by the Committee or
the Committee Chair. No fees were paid or payable to the
auditor for non-audit services in the year under review
or since their appointment.
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Governance
Audit and Risk Committee Report continued
Independence of the external auditor
The Committee monitors the auditor’s independence and
objectivity through three aspects of its work:
• approval of the non-audit services policy;
• assessing the appropriateness of the fees paid to the
auditor for their work; and
• by reviewing the information and assurances provided
by the auditor on their compliance with the relevant
ethical standards.
For the year ended 31 May 2025, Forvis Mazars confirmed
that all partners and staff involved with the audit were
independent of any links to the Company, and that these
individuals had complied with their ethics and
independence policies and procedures which are
consistent with the FRC’s Ethical Standards. Forvis Mazars
has confirmed to the Committee its policy on
independence, which stipulates that its partners and staff
involved with the Company’s audit are not permitted to
have any direct or material indirect interest in the
Company. Adherence to this policy of independence is
reaffirmed each year in writing by each staff member
involved in the Company’s audit.
This being Forvis Mazars’ fourth year in office as the
Company’s auditor and the fact that the firm does not
provide any non-audit services to the Company, the
Committee is satisfied that auditor independence and
objectivity are safeguarded.
Effectiveness of the external audit
The Committee evaluated the effectiveness of the
external audit, assessing the auditor’s performance during
the year together with a post-audit assessment, led by
the Committee Chair. Consideration was also given to the
findings of the FRC’s audit quality inspection report, which
monitors audit quality across the major audit firms in the
UK. Forvis Mazars presented and discussed the findings of
the latest audit quality inspection report and reported on
the progress made by the firm in addressing the areas
identified for improvement in the prior year’s report.
The Committee noted that the Company was subject
to an FRC audit quality review of the 2024 audit during
the year. The FRC assessed the 2024 audit as ‘Good’,
being the highest quality category.
The Committee discussed the service provided by Forvis
Mazars with JHI’s Financial Reporting Senior Manager for
investment trusts and the company secretary, who have
the most hands-on involvement in the audit each year.
The Committee also reviewed and assessed the
robustness of the audit, level of challenge offered by the
audit team, the quality of the audit team and timeliness
of delivering the tasks required for the audit and
reporting for the Committee, benchmarking Forvis
Mazars’ performance against their recent experience
with other firms gained through their other
commitments. The Committee also met privately with
the Audit Partner to discuss how the audit operated
from Forvis Mazars’ perspective.
The Committee considers that the audit quality for the
year ended 31 May 2025 has been high and that the
Manager and Forvis Mazars have worked together
effectively to enhance reporting to shareholders. Having
completed the assessment, the Committee is satisfied
with the effectiveness of Forvis Mazars’ audit and
recommended to the Board its continuing appointment.
Forvis Mazars has indicated its willingness to continue in
office and so the Board is proposing resolutions for the
2025 AGM reappointing the firm as auditor to the
Company and authorising the Committee to determine
their remuneration.
Alexandra Mackesy
Chair of the Audit and Risk Committee
30 July 2025
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Governance
The Chair of the Management Engagement
Committee (“MEC”), Penny Freer, reports to
shareholders on the year to 31 May 2025.
Membership
All directors are members of the MEC and the Chair
of the Board is the MEC Chair.
Meetings
The MEC met formally twice during the year.
Role and responsibilities
The MEC reviews the management agreement and
monitors the performance of the Manager in respect
of its investment, company secretarial, financial
reporting, administration, sales, marketing and
support services and how those impact the
performance of the Company. The MEC is also
responsible for evaluating the overall performance
of the Company’s third-party service providers.
The MEC’s purpose is to ensure the services and fees
paid to the Manager and other service providers are
consistent with the successful delivery of the
Company’s long-term strategy and that each service
provider’s continuing appointment is in the best
interests of the Company.
The MEC reports to the Board and its responsibilities are
set out in formal terms of reference which are reviewed
at least annually and amended as appropriate.
MEC effectiveness review
The activities of the MEC were considered as part of the
internal Board effectiveness review, with the conclusion
that the MEC continues to be effective in its operation.
Activities during the year
The MEC recommended the appointment of Indriatti van
Hien as Co-Fund Manager to the Board in January 2025,
which the Board approved. The MEC agreed that Indriatti
had demonstrated significant expertise and investment
acumen since becoming Deputy Fund Manager in 2016.
On Neil Hermon’s notification of his retirement to take
effect in September 2025, the MEC has been liaising
closely with senior management at JHI to recruit an
additional portfolio manager to work on the Company’s
portfolio with Indriatti.
In discharging its duties over the year, the MEC
undertook an internal review of the performance of the
Manager, following its external Manager review
convened in 2023 by Lintstock Ltd. All directors answered
an online questionnaire and discussed the results in
detail at the MEC meeting in April 2025. The directors
also reviewed the performance of other third-party
services providers.
The following key items were considered during the
review process:
• the investment performance of the Company, taking
account of the benchmark and performance of
competitors in the closed-ended sector, the share
price, level of premium/discount and gearing;
• the management of the portfolio’s risk profile and use
of gearing;
• the fee structures of the Company’s competitors in
the AIC peer group and other investment companies
managed by JHI;
• the quality and experience of the teams involved in
managing the Company’s business and a review of
the stability of the management group and its
business priorities;
• the key clauses of the management agreement,
principal clauses of which are set out on pages 25-26,
how the Manager had fulfilled them and whether they
continued to be appropriate. The Committee agreed
that the fees paid to the Manager were aligned with the
Company’s purpose, values and successful delivery of
its long-term strategy;
• the culture, values, senior management and any
organisational changes of the key service providers
and particularly of the Manager;
• the performance and fees of the Company’s other
service providers, including the Company’s corporate
broker (Deutsche Numis), depositary and custodian
(HSBC) and registrar (Computershare);
• the Company’s service providers in their roles as
stakeholders and whether there was an appropriate
level of engagement with them; and
• any points of conflict which may arise between the
service providers.
Continued appointment of the
Manager and other service providers
The findings of the annual effectiveness review of the
Manager and other service providers were positive overall.
The exercise identified some priorities for the Manager
to consider over the coming year in implementing
refinements to the investment process and portfolio
manager recruitment.
Following completion of the review, the MEC
recommended to the Board that the continued
appointment of the Manager on the terms agreed was
in the best interests of the Company’s shareholders as
a whole and its long-term sustainable success. The MEC
also recommended the continuation of the other third-
party service providers’ appointments. The Board
subsequently approved the MEC’s recommendations.
Penny Freer
Chair of the Management Engagement Committee
30 July 2025
Management Engagement Committee Report
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Governance
NC effectiveness review
The activities of the NC were considered as part of the
internal Board effectiveness review, with the conclusion
that the NC continues to be effective in its operation.
Activities during the year
In discharging its duties, the NC considered and made
recommendations to the Board as appropriate on:
• composition of the Board and each of its committees,
taking account of the contribution of the skills,
experience and knowledge of each director to the
success of the Company, and using the Board’s skills
matrix as a guide to collective competencies and
experiences on the Board; the directors’ and the Chair’s
tenure policy and remuneration level;
• effectiveness of the Board, its committees, the Chair
and each individual director, following an internal
review and analysis of the results;
• amendments to the NC’s terms of reference and
diversity policy effective from 1 June 2025 to align with
the revised 2024 AIC Code of Corporate Governance;
• each director’s external interests and appointments in
the context of time available and their commitment to
the Company; and
• reappointment of directors standing for re-election at
the AGM.
Board effectiveness review
Each year, the NC assesses the composition of the Board
and its effectiveness. An external review is conducted
every three years, with the next external review due to
be carried out in 2026. This year, the evaluation was
undertaken internally. All Board members completed an
online survey addressing the performance of the Board
and its committees, the leadership and effectiveness of
the Chair and the contribution, time commitment and
independence of each individual director. The Senior
Independent Director conducted the review of the Chair,
gathering feedback from all directors and subsequently
meeting with the Chair to discuss the results.
As well as addressing core aspects of Board and
committee performance, the exercise had a particular
focus on the following areas:
• working with JHI on Fund Manager succession planning;
• the Board’s engagement with shareholders ahead of
the continuation vote;
• the role of the Board in supporting the Company in
a difficult market, including the level of support and
challenge provided to the Fund Managers and their team;
• the understanding of investor views and mechanisms
for differentiating and marketing the Company;
• the Board’s engagement and communication with
certain third-party service providers and the quality of
support they provide; and
• the evolution of the flow of information through regular
Board papers and other ad-hoc updates.
The directors reviewed and discussed the results at the
April 2025 NC meeting, which were positive overall. No
areas of material weakness or concern were identified
and the NC concluded that the Board remains fit for
purpose and works in a harmonious, effective and
collegiate manner. A good range of skills is represented on
the Board, as well as a clear understanding of the risks
facing the Company. The Senior Independent Director
confirmed that the Chair provides effective leadership.
As a result of the review, the Board considered
opportunities to increase effectiveness. Priorities identified
by the review include close monitoring of performance,
succession planning for the Fund Managers, proactive
oversight of the share price discount to NAV and active
consultation with shareholders.
Board composition and diversity policy
All Board appointments are subject to a formal, rigorous
and transparent procedure. The Committee considers the
Company’s leadership needs regularly and seeks to
ensure that any Board vacancies are filled by the most
qualified candidates based on objective criteria and merit
and in the context of the specific skills, knowledge and
experience needed to lead the Company effectively and
achieve its investment objective. Review of the individual
performance and contribution of each director remains
an integral element of the Company’s approach.
Nominations Committee Report
The Chair of the Nomination Committee
(“NC”), Penny Freer, reports to shareholders
on the year to 31 May 2025.
Membership
All directors are members of the NC. The Chair of the
Board is the NC Chair but does not chair meetings when
the NC is dealing with the Chair’s fees, performance or
successor.
Meetings
The NC meets at least annually, with further meetings
scheduled when required. In the year under review
the NC held one meeting.
Role and responsibilities
The NC is responsible for reviewing Board
succession planning, tenure and diversity policies,
directors’ fees, the effectiveness of the Board and its
committees, and the appointment of new directors
through a formal procedure.
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Governance
Nominations Committee Report continued
When considering succession planning and tenure, the NC
bears in mind the balance of skills, knowledge, experience,
gender, background and diversity on the Board, the
achievement of the Company’s investment objective and
compliance with the Company’s articles of association
and the AIC Code of Corporate Governance. The NC
also considers diversity, inclusion and equal opportunity
as appropriate as part of the annual performance
review and in any Board appointments and succession
planning. The directors believe that diversity is
important to ensure that the Company can draw
on a broad range of backgrounds, skills, knowledge,
experience and perspectives to achieve effective
stewardship of the Company.
The directors confirm that, in all the NC’s activities, there
will be no discrimination on the grounds of gender, race,
ethnicity, religion, sexual orientation, age, physical ability or
socio-economic background.
Board diversity at 31 May 2025
The Board meets the relevant FCA diversity targets, and
FTSE Women Leaders and Parker Review recommendations
on gender and ethnicity: 67% of individuals on the
Board are women and one Board member is from a
non-white minority ethnic background. The Board aims
to ensure it comprises individuals with diverse and
complementary thought, skills and experience to meet
the Company’s objectives.
The information included in the below tables has been
obtained through questionnaires completed by the
individual directors. The categories for ethnic groups
which are not represented on the Board are not included
in the ethnic background table. No changes have
occurred between 31 May 2025 up to the date of approval
of this Report which could affect the Company’s ability to
meet the targets in UK Listing Rule 6.6.6R(9)(a).
NC recommendations to the Board
On the basis of the NC’s recommendations, the Board
concluded that:
• each director provides a constructive contribution to
the affairs of the Company and brings different
qualities to the Board;
• the Board has an effective committee structure and
the committees continue to support the Board
efficiently in fulfilling its duties;
• no director is ‘overboarded’ under the FRC’s guidelines
or in any practical way, and each director continues to
dedicate the time required to fulfil his or her duties to
the Company effectively;
• the Board’s size and composition remain appropriate
for the Company, and the Board will retain a good
balance of skills and business experience, as set out on
pages 43-44;
• each director seeking re-election merits nomination
for re-election by shareholders and was duly
recommended for shareholder re-election at the
forthcoming AGM.
Penny Freer
Chair of the Nomination Committee
30 July 2025
In accordance with UK Listing Rule 6 Annex 1R (1) and (2), and using the AIC’s definitions, the Board provides
the following information about its diversity:
Gender identity and sex
Number of
directors
Percentage of
the Board
Number of senior positions on the
Board (CEO, CFO, SID and Chair)
Men
2 33%
Not applicable - see note*
Women
4 67%
Total
6 100%
Ethnic background
Number of
directors
Percentage of
the Board
Number of senior positions on the
Board (CEO, CFO, SID and Chair)
White British or other White
(including minority white groups)
5 83%
Not applicable - see note*
Other ethnic group
1 17%
Total
6 100%
* This column is not applicable as the Company is externally managed and does not have executive management functions, specifically the
roles of CEO and CFO. The Board considers that chairing the Board, its permanent committees and the role of senior independent director
are all senior positions in an investment company context. Accordingly, the Chair of the Board, the Nomination and Management
Engagement Committees, and the Chair of the Audit and Risk Committee are both women. The Senior Independent Director is a man.
These positions are currently held by individuals who consider themselves ‘White British or Other White (including minority white groups).
Governance
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Governance
Directors’ Remuneration Report
Report on implementation
This report is submitted in accordance with
Schedule 8 of The Large and Medium-sized
Companies and Groups (Accounts and Reports)
Regulations 2008 as amended (the “Regulations”).
This report also meets the relevant requirements of
the Companies Act 2006 (the “Act”) and the UK
Listing Rules of the FCA and describes how the Board
has applied the principles relating to directors’
remuneration. The Company’s auditor is required to
report on certain information contained within this
report; where information set out below has been
audited it is indicated as such.
All directors are non-executive and the Company has no
chief executive officer or employees; as such some
reporting requirements contained in the Regulations are
not applicable and have not been reported on. The
directors believe that all relevant information is disclosed
within this report in an appropriate format. While the
directors review annually the fees paid to the directors of
comparable investment trust companies, the Board has
not been provided with advice or services by any person in
respect of its consideration of the directors’ remuneration.
Annual statement from the Chair
Directors’ remuneration is determined by the Board as a
whole within the parameters of the Remuneration Policy
approved by shareholders, following review and
recommendations on an annual basis by the Nomination
Committee as to the appropriate level of fees. All directors
are members of the Nomination Committee. As the
Company has no employees and the Board comprises
entirely non-executive directors, the Board has not
established a separate remuneration committee.
During the year, the directors reviewed fee levels, covering
a review of fees in the investment trust industry as a whole
and in the AIC UK smaller companies sector, taking into
account the impact of inflation. The Board believes that
both the individual remuneration and the aggregate fee
levels take account of the needs of a very engaged
non-executive Board of experienced practitioners in the
sector with increasing legal and regulatory responsibilities.
Following careful consideration, the Board agreed an
increase in directors’ fees as set out in the table below:
Role
From
1 June
2025
£
At
31 May
2025
£
At
31 May
2024
£
Chair of the Board
46,700 44,500 43,000
Chair of the Audit and
Risk Committee
37,775 36,000 34,500
Senior Independent
Director
34,500 n/a n/a
Non-Executive
Director
32,000 30,500 29,500
Remuneration policy
Shareholders last approved the Remuneration Policy
at the 2023 Annual General Meeting, being a triennial
vote. The Board may amend the level of
remuneration paid to individual directors within
the parameters of the Remuneration Policy. In
determining the Remuneration Policy, the Board takes
into account all factors which it deems necessary,
including relevant legal and regulatory requirements
and the provisions and recommendations of the
AIC Code of Corporate Governance.
The objective of the Remuneration Policy is to attract,
retain and motivate non-executive directors of the
quality required to govern the Company successfully
without paying more than is necessary, having
regard to views of shareholders and other
stakeholders. The Board obtains up-to-date
information about remuneration in other companies
of comparable scale and complexity to avoid and
manage conflicts of interest in determining
remuneration levels. The directors review the
appropriateness and relevance of the Remuneration
Policy at least annually, with a focus on supporting
the Company’s long-term sustainable success.
Individual directors do not participate in discussions
relating to their own remuneration. Directors are
remunerated in the form of fees, payable quarterly
in arrears. The Company’s articles of association
limit the fees payable to the directors in aggregate
to £250,000 per annum. Subject to the overall limit,
the Company’s policy is that the fees payable to the
directors should reflect the time spent by the Board
on the Company’s affairs and the responsibilities
borne by the directors, and should be sufficient to
promote the long-term success of the Company.
The policy is to review fee rates annually, although
this will not necessarily result in any change to the
rates. Directors are authorised to claim reasonable
expenses from the Company in relation to the
performance of their duties. No director has a service
contract with the Company. Directors’ appointments
may be terminated at any time in writing with no
compensation payable. There are no set notice
periods and no fixed duration. No director is eligible
to receive bonuses, pension benefits, share options
or other benefits and no long-term incentive
schemes are in place.
Recruitment principles
All directors, including those newly appointed, are
paid at the same rate, apart from the Chair of the
Board, Chair of the Audit and Risk Committee and
Senior Independent Director who are paid a higher
fee in recognition of their additional responsibilities.
Views of shareholders
Any views expressed by shareholders on the fees being
paid to directors would be taken into consideration by
the Board, when reviewing levels of remuneration.
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Governance
Directors’ Remuneration Report continued
In recognition of the Senior Independent Director’s greater
responsibilities, the Board agreed that an increment of
£2,500 be added to the base fee of £32,000 for non-
executive directors, effective from the financial year
beginning 1 June 2025. There have been no other major
decisions on directors’ remuneration or any other
changes to the remuneration paid to each individual
director in the year under review.
Directors’ interests in shares (audited)
The interests of the directors in the ordinary shares of the
Company at the beginning and end of the financial year
are shown in the table below.
Ordinary shares of 25p
31 May
2025
1 June
2024
Penny Freer
4,400 4,400
Kevin Carter
15,000 15,000
Alexandra Mackesy
2,200 2,200
Victoria Sant
1,670 1,670
Michael Warren
8,000 8,000
Yen Mei Lim
2,000 2,000
There have been no changes to the directors’ interests in the
period from 1 June 2025 to the date of this report. No director
has an interest in the preference stock of the Company.
Under the Company’s articles of association, no director
is required to hold shares in the Company by way of
qualification. However, to reflect the governance standards
expected in investee companies, the Board requests each
director to invest in the Company’s shares and to retain
those shares for as long as they remain on the Board. The
overarching aim is for each director’s holding to equate
to 25% of their fees earned by the end of their projected
nine-year tenure.
Spend on pay
As the Company has no employees, the directors do
not consider it relevant to present a table comparing
remuneration paid to employees with distributions to
shareholders. The total fees paid to directors are shown
in the ‘Directors’ remuneration’ table. Distributions to
shareholders are set out in note 9 on page 82; in the year
to 31 May 2025, total dividends paid amounted to £20.0m.
Directors’ remuneration (audited)
The remuneration paid to the directors who served during
the years ended 31 May 2025 and 31 May 2024 was as follows:
2025
Total fees
and benefits
£
2024
Total fees
and benefits
£
Penny Freer
1
44,500 43,000
Alexandra Mackesy
2
36,000 34,709
Kevin Carter
30,500 29,500
Victoria Sant
30,500 29,500
Michael Warren
30,500 29,500
Yen Mei Lim
30,500 29,500
Total
202,500 195,709
Notes:
The table omits other columns set out in the relevant regulations because
no payments of other types were made, such as performance-related pay,
vesting performance-related pay and pension-related benefits.
1 Chair of the Board and highest paid director in the year to 31 May 2025
2 Chair of the Audit and Risk Committee. Mrs Mackesy incurred
accommodation expenses of £209 in the year ended 31 May 2024 in
order to attend the 2023 AGM due to rail strikes. The expenses were
reimbursed through payroll and subject to personal taxation and
national insurance
No expenses or taxable benefits were paid to any director
in the year to 31 May 2025. In the year to 31 May 2024, the
only expense/taxable benefit paid was as set out above.
No remuneration or compensation was paid or payable
by the Company during the period to any of the current
or former directors or third parties specified by them other
than as set out in the table. Increases reflect changes
of Board roles, including appointments and retirements
during the period under review. The incremental increases
to fee levels over time are explained in the next table.
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Report
Governance
Directors’ Remuneration Report continued
Annual percentage change
The table below sets out the annual percentage change in directors’ fees over the previous five financial years
in respect of those directors who served for a minimum of two full years since the year beginning 1 June 2020.
2025
%
2024
%
2023
%
2022
%
2021
%
Penny Freer
1
3.5 3.6 15.7 49.4 0.0
Alexandra Mackesy
2
4.3 3.9 3.8 14.3 5.1
Kevin Carter
3
3.4 3.5 3.6 n/a n/a
Michael Warren
3
3.4 3.5 3.6 n/a n/a
Victoria Sant
4
3.4 3.5 3.6 14.6 0.0
Yen Mei Lim
5
3.4 n/a n/a n/a n/a
1 The increases reflect both changes in directors’ fees and Penny’s succession as Chair in the year to 31 May 2022
2 The increases reflect Alexandra’s appointment as Chair of the Audit and Risk Committee during the year ended 31 May 2020 and changes in directors’ fees
3 Appointed in the year to 31 May 2022, so first full year is to 31 May 2023
4 Reflecting annual increases in directors’ fees
5 Appointed during the year to 31 May 2023, so first full year is to 31 May 2024
Performance
The graph below compares the mid-market price of the Company’s ordinary shares over the ten-year period ended
31 May 2025 with the benchmark return over the same period.
Total performance return for 10 years to 31 May 2025
£
20252024202320222021202020192018201720162015
Company’s share price total return, assuming the investment of £100 on 31 May 2015 and the reinvestment of all dividends
(excluding dealing expenses) (Source: Morningstar Direct)
Benchmark total return, assuming the notional investment of £100 on 31 May 2015 and the reinvestment of all income
(excluding dealing expenses) (Source: LSEG Datastream). The Company's benchmark is the Deutsche Numis Smaller
Companies Index (excluding investment companies)
50
100
150
200
250
Statement of voting at AGM
At the Company’s AGM on 2 October 2024, shareholders approved the Remuneration Report for the year ended 31 May
2024. Shareholders last approved the Remuneration Policy at the AGM on 5 October 2023. The following poll votes were
received on these two resolutions at the respective AGM:
Resolution For (including discretionary) % of votes Against % of votes
1
Withheld
Remuneration Policy
23,215,998 99.5 106,236 0.5 79,823
Remuneration Report
27,329,878 99.7 90,139 0.3 70,464
1 Excluding votes withheld
On behalf of the Board
Penny Freer
Chair of the Board
30 July 2025
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Financial
Statements
Additional
Information AGM Notice
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Strategic
Report
Governance
Directors’ Report
The Investment Portfolio on pages 20-21, Corporate
Governance Report on pages 43-52, Audit and Risk
Committee Report, Management Engagement Committee
Report and Nomination Committee Report on pages
53-58, Statement of Directors’ Responsibilities on page 64,
explanations of AGM resolutions on pages 103-104 and the
glossary, alternative performance measures and general
shareholder and corporate information on pages 93-99,
all form part of the Directors’ Report.
Directors
Biographical details of the directors and their appointments
are listed on pages 43-44. Page 50 describes the directors’
insurance and indemnification arrangements. The directors’
interests in the Company’s shares are shown on page 60.
Share capital
The Company’s share capital comprises:
Ordinary shares of 25p nominal value each (“shares”)
The voting rights of the shares on a poll are one vote for
each share held. At 31 May 2025, the number of ordinary
shares in issue, was 74,385,131 (2024: 74,505,131). During the
year, the Company repurchased 6,017,157 shares at a total
cost of £48,018,000 (including expenses and excluding
stamp duty). 120,000 shares were cancelled and 5,897,157
were taken to Treasury. The total number of shares bought
back in the year constitutes 8.1% of issued share capital at
the start of the year. At the year end, 5,897,157 shares were
held in treasury.
Since 31 May 2025 and at 28 July 2025, being the latest
practicable date prior to publication of this Report, the
Company bought back 3,226,932 ordinary shares at a
total cost of £28,100,000 (including expenses and
excluding stamp duty). No shares were allotted during the
year or to the date of this Report. As at 28 July 2025, the
total number of ordinary shares was 74,385,131. The total
number of voting rights was 65,261,042.
There are no restrictions on the transfer of the Company’s
shares or voting rights, no shares which carry specific
rights with regard to the control of the Company and no
agreement to which the Company is party that would
affect its control following a takeover bid. To the extent that
they exist, the revenue profits of the Company (including
accumulated revenue and capital reserves) are available
for distribution by way of dividends to the holders of the
shares. Upon a winding-up, after meeting the liabilities
of the Company, the surplus assets would be distributed
to the shareholders pro rata to their shareholdings.
Preference stock units of £1 each (“preference
stock units”)
Preference stockholders have no rights to attend and vote
at general meetings (except where the dividend is six
months in arrears or on a resolution to wind up the
Company). At 31 May 2025 there were 4,257 preference
stock units in issue. This represents 0.02% of the
Company’s share capital. Further details are in Note 14
of the financial statements.
The directors seek annual authority from the shareholders
to allot new shares, to disapply pre-emption rights of
existing shareholders and to buy back shares for
cancellation or to be held in treasury. The Company’s
articles of association permit the Company to purchase
its own shares and to fund such purchases from its
accumulated realised capital reserves. No preference
stock units were issued or bought back during the year.
Shareholder authorities
At the annual general meeting (“AGM”) held on 2 October
2024, the directors were granted authority to buy back
11,150,331 shares (being 14.99% of issued ordinary share
capital on that date). The Company renewed its share
buyback authority at a general meeting held on 1 July
2025, as only 5.6% of issued share capital remained within
the 2024 AGM share buyback authority. At this general
meeting, the directors were granted authority to buy back
10,102,879 shares (being 14.99% of issued ordinary share
capital at 30 June 2025). As at 28 July 2025, there remains
7,966,457 shares available within the buyback authority
granted at the general meeting on 1 July 2025. This
authority will expire at the conclusion of the 2025 AGM.
The directors intend to renew this authority, subject to
shareholder approval.
Shares are not bought back unless the result is an
increase in net asset value per share.
Holdings in the Company’s shares
Declarations of interests in the voting rights of the Company
as at 31 May 2025 in accordance with the FCA’s Disclosure
Guidance and Transparency Rules were as follows:
Shareholder
% voting
rights
Evelyn Partners
8.4
Saba Capital
5.1
West Yorkshire Pension Fund
4.5
Additionally, holdings of the Company’s shares on
execution-only stockbroking platforms at 31 May 2025
were as follows:
Platform nominee
% voting
rights
Interactive Investor
11.9
Hargreaves Lansdown
10.0
HSDL
3.8
AJ Bell
3.3
Barclays Smart Investor
1.7
Disclosure of information to the auditor
Each director who is a member of the Board at the date of
approval of this Report confirms that, to the best of his or her
knowledge and belief, there is no information relevant to the
preparation of the Annual Report of which the Company’s
auditor is unaware, and he or she has taken all the steps a
The directors present the Annual Report and
Accounts of the Company for the year ended 31 May
2025. The Company (registered and domiciled in
England & Wales with registration number
00025526) was active throughout the year under
review and was not dormant.
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Directors’ Report continued
director might reasonably be expected to have taken to be
aware of relevant audit information and to establish that the
Company’s auditor is aware of that information.
Related-party transactions
The Company’s transactions with related parties in the
year were with the directors and the Manager. There were
no material transactions between the Company and its
directors, and the only amounts paid to them were in
respect of remuneration. Remuneration is paid quarterly
in arrears and amounts for April and May 2025 were
therefore accrued as at the year end. There were no other
outstanding amounts payable at the year end. Directors’
shareholdings are listed on page 60.
In respect of the Manager’s service provision during the
year, other than fees payable by the Company in the
ordinary course of business and the facilitation of
marketing activities with third parties, there were no
material transactions with the Manager affecting the
financial position of the Company. More details on
transactions with the Manager, including amounts
outstanding at the year end, are on page 90.
Independent auditor
The auditor Forvis Mazars LLP has indicated willingness
to continue in office. Resolutions 9 and 10 are being
submitted to the 2025 AGM to propose Forvis Mazars’
reappointment and authorise the Audit and Risk Committee
to determine their remuneration for the coming year.
Financial Instruments
The Company’s policy on the use of financial instruments
is set out in the Investment Policy on page 24.
Future developments
The future success of the Company is dependent
primarily on the performance of its investment portfolio,
which will, to a significant degree, reflect the performance
of the stock market and the skill of the Manager. While the
Company invests in companies that are listed (or quoted)
in the United Kingdom, the underlying businesses of those
companies are affected by external factors, many of an
international nature. The Board’s intention is that the
Company will continue to pursue its stated Investment
Objective and strategy as explained on page 24.
The Chair’s Statement and the Fund Managers’ Report
from pages 8-18 give commentary on the outlook for the
Company. Other information on recommended dividends
and financial risks is detailed on pages 8-18 in the Strategic
Report and in notes 9 and 15 to the financial statements.
Other information
UK Listing Rule 6.6.4 requires the Company to include
certain information in a single identifiable section of the
Annual Report or a cross-reference table indicating where
the information is set out. The directors confirm that there
are no disclosures to be made in this regard. The
Company’s environmental statements are set out in the
Strategic Report on pages 37-40. This Report of the
Directors has been approved by the Board.
Post-balance sheet event
Since the year end, the Board convened a general meeting
on 1 July 2025. Shareholders approved renewed authority
for the Board to repurchase up to 14.99% of issued ordinary
share capital (excluding shares held in Treasury).
Annual general meeting (“AGM”)
The Board is pleased to invite shareholders to attend the
AGM in person at 11.30 am on Tuesday, 7 October 2025 at
the Company’s registered office. The Board encourages
shareholders to attend for the opportunity to meet the
directors, Fund Manager Indriatti van Hien and the other
members of the UK Smaller Companies team, including
Shivam Sedani. Indriatti will give a presentation on the
year under review and their outlook for the year ahead.
Shareholders unable to join in person will be able to join
the meeting by videoconference.
In addition to the AGM, the Board is holding a virtual
investor presentation at 12 noon on 17 September 2025.
During the presentation, shareholders will receive updates
from the Chair and Fund Manager on portfolio positioning,
outlook and recent progress, and there will be an
interactive Q&A session. This is an opportunity for
shareholders to hear directly from the Board and the
investment team before placing their proxy votes. Full
details on how to join the virtual shareholder presentation
can be found at www.hendersonsmallercompanies.com.
The Board encourages all shareholders to submit their
votes on the resolutions, all of which come with the Board’s
endorsement, ahead of the deadline of Friday, 3 October
2025, to ensure that their vote counts at the AGM, as there
will be live voting only for those physically present at the
AGM. Please see the AGM Notice on pages 100 onwards for
more information on joining and voting.
The Fund Manager discusses these results and performance
during the year in a video available from 9.00 am on
31 July 2025 at www.hendersonsmallercompanies.com.
If shareholders have any questions for the Board or the
Fund Managers in advance of the AGM, please contact
the Secretary at itsecretariat@janushenderson.com.
Voting recommendation
The Board considers that the resolutions to be proposed
at the AGM are in the best interests of shareholders as a
whole. The Board therefore recommends that shareholders
vote in favour of each resolution, as the directors intend to
do in respect of their own beneficial holdings.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
30 July 2025
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Governance
Statement of Directors’ Responsibilities
The directors are responsible for preparing the
Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. The directors have
prepared the Company’s financial statements in
accordance with International Accounting Standards in
conformity with the requirements of the Companies Act
2006. Under company law, the directors must not approve
the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that
year. In preparing these financial statements, the directors
are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable International Accounting
Standards in conformity with the requirements of the
Companies Act 2006 have been followed, subject to
any material departures disclosed and explained in the
financial statements;
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business; and
• prepare a directors’ report, a strategic report and a
directors’ remuneration report which comply with the
requirements of the Companies Act 2006.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the financial
statements and the Directors’ Remuneration Report
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors consider that the Annual Report, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
Statement under DTR 4.1.12
Each director, who is listed on pages 43-44, confirms that,
to the best of his or her knowledge:
• the financial statements, which have been prepared in
accordance with International Accounting Standards in
conformity with the requirements of the Companies Act
2006 on a going concern basis, give a true and fair
view of the assets, liabilities, financial position and
profit/loss of the Company; and
• the Strategic Report and financial statements include a
fair review of the development and performance of the
business and the position of the Company, together
with a description of the principal risks and
uncertainties that it faces.
On behalf of the Board
Penny Freer
Chair of the Board
30 July 2025
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Financial
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Information AGM Notice
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Financial
statements
In this section
66 Independent Auditors’ Report to the members
72 Statement of Comprehensive Income
73 Statement of Changes in Equity
74 Balance Sheet
75 Statement of Cash Flows
76 Notes to the Financial Statements
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Financial
Statements
Additional
Information AGM Notice
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Report
Financial
Statements
65
The Henderson Smaller Companies Investment Trust plc Annual Report 2025
Independent Auditor’s Report to the members
Opinion
We have audited the financial statements of The Henderson
Smaller Companies Investment Trust plc (the “Company”)
for the year ended 31 May 2025 which comprise the
Statement of Comprehensive Income, Statement of
Changes in Equity, Balance Sheet, Statement of Cash Flows
and notes to the financial statements on pages 76-91,
including material accounting policy information.
The financial reporting framework that has been applied
in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the Company’s
affairs as at 31 May 2025 and of the Company’s loss for
the year then ended;
• have been properly prepared in accordance with
UK-adopted international accounting standards; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those
standards are further described in the “Auditor’s
responsibilities for the audit of the financial statements”
section of our report. We are independent of the
Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied
to listed entities and public interest entities, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
Our audit procedures to evaluate the directors’ assessment
of the Company’s ability to continue to adopt the going
concern basis of accounting included but were not limited to:
• undertaking an initial assessment at the planning stage
of the audit to identify events or conditions that may
cast significant doubt on the Company’s ability to
continue as a going concern;
• making enquiries of the Directors to understand the
period of assessment that they considered, being at
least 12 months from the date of approval of the annual
report and financial statements, assessing and
challenging the appropriateness of the Directors’ key
assumptions in their income and expense projections
and implication of those when assessing severe but
plausible scenarios;
• assessing the Company’s ability to continue to
operate within its financial covenants and the liquidity
of the portfolio through reviewing Management’s
assessment of how quickly the portfolio could be
liquidated if required;
• assessing the Company’s performance to date using
the key performance indicators being net asset value
against benchmark and peer group, share price total
return against benchmark and peer group, discount to
net asset value and ongoing charge listed on pages 29
and 30 in the annual report;
• reviewing the shareholder register and making
enquiries of the broker to understand whether there
were any unusual shareholder movements and
circumstances over the year and up to the signing
date that may have an adverse impact on the
continuation vote to be held at the Annual General
Meeting in September 2025; and
• evaluating the appropriateness of the Directors’
disclosures in the financial statements on going
concern and viability statement including the
consideration of when the next continuation vote is.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Company’s ability to continue
as a going concern for a period of at least twelve
months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the
relevant sections of this report.
In relation to Company’s reporting on how it has applied
the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the
Directors’ statement in the financial statements about
whether the Director’s considered it appropriate to adopt
the going concern basis of accounting.
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Strategic
Report
Financial
Statements
Independent Auditor’s Report continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
We summarise below the key audit matters in forming our opinion above, together with an overview of the principal
audit procedures performed to address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged with governance through our Audit
Completion Report.
Key Audit Matter How our scope addressed this matter
Accuracy and completeness of revenue
recognition through incorrect classification of
special dividends
(as described on pages 53-55 in the Report of the
Audit and Risk Committee and as per the accounting
policy set out on page 76).
According to the Statement of Recommended
Practice issued by the Association of Investment
Companies (‘AIC SORP’), recognition of revenue relies
upon dividend notifications to be received from the
investment portfolio. Depending on the reason
behind the payment, dividends recognised are either
revenue or capital in nature; therefore, the Directors
are required to exercise judgment in determining
whether the special dividends should be classified
as revenue or capital. The Company has recognised
income from investments in the Statement of
Comprehensive Income of £22.91m (2024: £24.66m),
of which £0.69m (2024: £0.60) relates to special
dividends taken to the Revenue return. The Company
also received special dividends of £0.48m
(2024: £9.94m) which were taken to the Capital
return of the Statement of Comprehensive Income.
In order to maintain investment trust status, the
Company is required to distribute at least 85% of
its income for the accounting period. The revenue
column of the Statement of Comprehensive Income is
the main driver of this minimum dividend calculation.
There is a risk that an incorrect classification could
result in understated income which could put the
Company’s investment trust status at risk. There is
also a risk that an incorrect classification could result
in overstated income to increase the dividends paid
to shareholders.
We therefore assess the risk of fraud in revenue
recognition as being principally in relation to
accuracy and completeness of revenue recognition
through incorrect classification of the special
dividends as revenue or capital items in the
Statement of Comprehensive Income.
Our audit procedures included, but were not limited to:
• understanding Management’s process on revenue
recognition and allocation of special dividends through
discussions with Management, examination of control
reports from third-party service organisation and
performing a walkthrough to evaluate the design and
effectiveness of controls;
• for all six revenue special dividends and one capital special
dividend recognised in the year, agreeing each dividend to
an independent source, checking the point of recognition,
testing the allocation of dividend income between revenue
and capital (by assessing the reason for the dividend
distributions and the consistency of the classification with
the underlying nature of the payments) and tracing to
bank statements;
• for all investments, checking all dividend announcements
declared by those securities in the year to an independent
source and agreeing the recognition of such dividends to
the income report and capital report;
• testing special dividends announced one month either side
of the year end covering the period after which announced
dividends should be received to ensure dividends should be
recorded in the correct period; and
• to address the risk of management override, testing all journal
entries and other adjustments made in the preparation of the
financial statements relating to special dividends.
Our observations
We have no matters to communicate with respect to the
procedures in response to the accuracy and completeness of
revenue recognition through incorrect classification of special
dividends.
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Financial
Statements
Independent Auditor’s Report continued
Key Audit Matter How our scope addressed this matter
Valuation and existence of the investment
portfolio
(as described on page 54 in the Report of the Audit
and Risk Committee and as per the accounting
policy set out on page 77).
Investments held as of 31 May 2025 were valued at
£698.72m (2024: £833.37m). The investment portfolio
comprises of solely level one investments.
Investments make up 110.2% of the net asset value
of the Company as of 31 May 2025 (111.5% of the net
asset value as of 31 May 2024) these are only level
one and considered to be the key driver of the
performance of the Company.
The investments are made up of quoted investments
that are classified upon initial recognition as held
at fair value through profit or loss and are measured
initially and subsequently at fair value which is based
on their quoted bid prices at the close of business
on the year-end date. There is a risk that investments
recorded might not exist or might not be owned by
the Company. Although the investments are valued
at quoted bid prices, there is a risk that errors in
valuation can have a significant impact on the
numbers presented.
We therefore identified valuation and existence
of investments as a key audit matter as it had the
greatest effect on our overall audit strategy and
allocation of resources.
Our audit procedures included, but were not limited to:
• understanding Management’s process to record and
value investments through discussions with Management
and examination of control reports from the third-party
service organisation;
• for all investments in the portfolio, agreeing investment
holdings to an independent custodian confirmation and
an independent depositary confirmation in order to obtain
comfort over existence;
• for all investments in the portfolio, comparing to market
prices independently obtained from a source vendor and
recalculating the investment valuations as at the year-
end; and
• for all investments in the portfolio, assessing the frequency
of trading to identify any prices that have not changed and
testing whether the listed price is a valid fair value to ensure
appropriateness of fair value classification.
Our observations
We have no matters to communicate with regards to the
valuation and existence of the investment portfolio held at
31 May 2025.
The key audit matters in the table above are consistent with those we disclosed in our 2024 independent auditor’s report.
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and on the financial statements as a whole. Based on our
professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality
Overall materiality
£6.34m (2024: £7.47m)
How we determined it
1% of net assets (2024: 1% of net assets)
Rationale for benchmark applied
Net assets have been identified as the principal benchmark
within the financial statements as they are considered to be the
main focus of the shareholders.
Whilst valuation processes for these investments are not
considered to be complex, there is a risk that errors in valuation
could cause a material misstatement. 1% has been chosen as it
is a generally accepted auditing practice for investment trust
audits and the Company is a public interest entity.
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Statements
Independent Auditor’s Report continued
Performance materiality
Performance materiality is set to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole.
On the basis of our risk assessments and together with our
assessment of the overall control environment, we determined
70% (2024: 70%) of overall materiality, amounting to £4.44m
(2024: £5.23m).
We also determined a specific materiality for the revenue column
of the Statement of Comprehensive Income at £1.02m
(2024: £1.11m), being 5% (2024: £5%) of revenue profit before tax.
Reporting threshold
We agreed with the Audit and Risk Committee that we would report
to them misstatements identified during our audit above £0.19m
(2024: £0.22m) as well as misstatements below that amount that,
in our view, warranted reporting for qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due
to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked
at where the directors made subjective judgements, such as assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the
financial statements as a whole. We used the outputs of our risk assessment, our understanding of the Company,
their environment, controls, and critical business processes, to consider qualitative factors to ensure that we obtained
sufficient coverage across all financial statement line items.
Other information
The other information comprises the information included in the annual report other than the financial statements
and our auditor’s report thereon. The Directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements and those reports have been prepared in
accordance with applicable legal requirements;
• the information about internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and
Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the
financial statements and has been prepared in accordance with applicable legal requirements; and
• information about the Company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
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Financial
Statements
Independent Auditor’s Report continued
Matters on which we are required to
report by exception
In light of the knowledge and understanding of the
Company and its environment obtained in the course of
the audit, we have not identified material misstatements
in the:
• strategic report or the directors’ report; or
• information about internal control and risk
management systems in relation to financial reporting
processes and about share capital structures, given in
compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by
the Company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the Company financial statements and the part of the
Directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified
by law are not made; or
• we have not received all the information and
explanations we require for our audit; or
• a corporate governance statement has not been
prepared by the Company.
Corporate governance statement
The Listing Rules require us to review the Directors’
statement in relation to going concern, longer-term
viability and that part of the Corporate Governance
Statement relating to the Company’s compliance with
the provisions of the UK Corporate Governance Statement
specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of
the Corporate Governance Statement are materially
consistent with the financial statements or our knowledge
obtained during the audit:
• directors’ statement with regards the appropriateness
of adopting the going concern basis of accounting
and any material uncertainties identified, set out on
page 76;
• directors’ explanation as to its assessment of the entity’s
prospects, the period this assessment covers set out on
page 41;
• directors’ statement on fair, balanced and
understandable, set out on page 64;
• board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks, set out
on page 27;
• the section of the annual report that describes the
review of effectiveness of risk management and
internal control systems, set out on page 52; and;
• the section describing the work of the Audit and Risk
Committee, set out on pages 53-55.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 64, the Directors are
responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine is
necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit
of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of
irregularities, including fraud.
Based on our understanding of the Company and its
industry, we considered that non-compliance with the
following laws and regulations might have a material
effect on the financial statements: UK-adopted
international accounting standards, the Companies Act
2006, the Listing Rules, UK Corporate Governance Code,
the Association of Investment Companies’ Code and
Statement of Recommended Practice, S1158 of the
Corporation Tax Act 2010 and The Companies
(Miscellaneous Reporting) Regulations 2018.
To help us identify instances of non-compliance with
these laws and regulations, and in identifying and
assessing the risks of material misstatement in respect to
non-compliance, our procedures included, but were not
limited to:
• gaining an understanding of the legal and regulatory
framework applicable to the Company, the industry in
which it operates, and the structure of the Company,
and considering the risk of acts by the Company which
were contrary to the applicable laws and regulations,
including fraud;
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• inquiring of the Directors, management and, where
appropriate, those charged with governance, as to
whether the Company is in compliance with laws and
regulations, and discussing their policies and procedures
regarding compliance with laws and regulations;
• reviewing minutes of Directors’ meetings in the year;
and
• discussing amongst the engagement team the laws
and regulations listed above, and remaining alert to
any indications of non-compliance.
We also considered those laws and regulations that have a
direct effect on the preparation of the financial statements,
such as the Statement of Recommended Practice issued
by the Association of Investment Companies, the
Companies Act 2006 and UK tax legislation.
In addition, we evaluated the directors’ and management’s
incentives and opportunities for fraudulent manipulation
of the financial statements, including the risk of
management override of controls, and determined that
the principal risks related to posting manual journal
entries to manipulate financial performance, management
bias through judgments and assumptions in significant
accounting estimates, particularly in relation to special
dividends, revenue recognition (which we pinpointed to
the accuracy and completeness assertions), and
significant one-off or unusual transactions.
Our procedures in relation to fraud included but were not
limited to:
• making enquiries of the Directors and management on
whether they had knowledge of any actual, suspected
or alleged fraud;
• gaining an understanding of the internal controls
established to mitigate risks related to fraud;
• discussing amongst the engagement team the risks
of fraud;
• addressing the risks of fraud through management
override of controls by performing journal entry testing;
and
• reviewing the accounting estimates in relation to
special dividends for evidence of management bias
and performing procedures to respond to the fraud
risk in revenue recognition.
The primary responsibility for the prevention and detection
of irregularities, including fraud, rests with both those
charged with governance and management. As with any
audit, there remained a risk of non-detection of
irregularities, as these may involve collusion, forgery,
intentional omissions, misrepresentations or the override
of internal controls.
The risks of material misstatement that had the greatest
effect on our audit are discussed in the ‘Key audit matters’
section of this report.
A further description of our responsibilities is available
on the Financial Reporting Council’s website at
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matters which we are required to
address
Following the recommendation of the Audit and Risk
Committee, we were appointed on 1 September 2021 to
audit the financial statements for the year ending 31 May
2022. The period of total uninterrupted engagement is
four years, covering the years ending 31 May 2022 to
31 May 2025.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Company and we
remain independent of the Company in conducting
our audit.
Our audit opinion is consistent with our additional report
to the Audit and Risk Committee.
Use of the audit report
This report is made solely to the Company’s members as
a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone other than the company and the
company’s members as a body for our audit work, for this
report, or for the opinions we have formed.
As required by the Financial Conduct Authority Disclosure
Guidance and Transparency Rule 4.1.14R, these financial
statements will form part of the ESEF-prepared annual
financial report filed on the National Storage Mechanism
of the Financial Conduct Authority in accordance with the
ESEF Regulatory Technical Standard (‘ESEF RTS’). This
auditor’s report provides no assurance over whether the
annual financial report will be prepared using the single
electronic format specified in the ESEF RTS.
Nargis Shaheen Yunis (Senior Statutory Auditor)
for and on behalf of Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey
London EC4M 7AU
30 July 2025
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Financial
Statements
Statement of Comprehensive Income
for the year ended 31 May
Year ended 31 May 2025 Year ended 31 May 2024
Notes
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
2 Investment income
22,912 – 22,912 24,656 – 24,656
3 Other income
168 – 168 190 – 190
10 (Losses)/gains on investments held at
fair value through profit or loss
– (61,211) (61,211) – 75,521 75,521
Currency losses
– (3) (3) – – –
Total income/(loss)
23,080 (61,214) (38,134) 24,846 75,521 100,367
Expenses:
4
Management fees
(719) (1,677) (2,396) (679) (1,584) (2,263)
5
Other expenses
(761) – (761) (647) – (647)
Profit/(loss) before finance costs
and taxation
21,600 (62,891) (41,291) 23,520 73,937 97,457
6
Finance costs
(1,110) (2,591) (3,701) (1,235) (2,882) (4,117)
Profit/(loss) before taxation
20,490 (65,482) (44,992) 22,285 71,055 93,340
7
Taxation
(2) – (2) 5 – 5
Profit/(loss) for the year and total
comprehensive income
20,488 (65,482) (44,994) 22,290 71,055 93,345
8
Earnings/(loss) per ordinary share –
basic and diluted
27.89p (89.13p) (61.24p) 29.85p 95.14p 124.99p
The total columns of this statement represent the Statement of Comprehensive Income, prepared in accordance with
UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published
by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired
or discontinued in the year.
The profit attributable to shareholders for the year disclosed above represents the Company’s total comprehensive
income. The Company does not have any other comprehensive income.
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The notes on pages 76-91 form part of these financial statements
Statement of Changes in Equity
for the year ended 31 May
Retained earnings
Notes Year ended 31 May 2025
Share
capital
£’000
Capital
redemption
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
equity
£’000
Total equity at 1 June 2024
18,627 26,794 682,267 19,652 747,340
Total comprehensive income:
(Loss)/profit for the year
– – (65,482) 20,488 (44,994)
Buyback of shares for cancellation
(30) 30 (1,057) – (1,057)
Buyback of shares to Treasury
– – (46,961) – (46,961)
Transactions with owners, recorded directly to equity:
9 Ordinary dividends paid
– – – (20,004) (20,004)
Total equity at 31 May 2025
18,597 26,824 568,767 20,136 634,324
Retained earnings
Notes Year ended 31 May 2024
Share
capital
£’000
Capital
redemption
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
equity
£’000
Total equity at 1 June 2023
18,676 26,745 612,810 17,156 675,387
Total comprehensive income:
Profit for the year
– – 71,055 22,290 93,345
Transactions with owners, recorded directly to equity:
Buyback of shares for cancellation
(49) 49 (1,598) – (1,598)
9 Ordinary dividends paid
– – – (19,794) (19,794)
Total equity at 31 May 2024
18,627 26,794 682,267 19,652 747,340
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Balance Sheet
Notes
At 31 May
2025
£’000
At 31 May
2024
£’000
Non-current assets
10 Investments held at fair value through profit or loss
698,722 833,368
Current assets
12 Receivables
6,183 11,763
Cash and cash equivalents
1,181 9,249
7,364 21,012
Total assets
706,086 854,380
Current liabilities
13 Payables
(1,834) (1,514)
15 i) Bank loans
(20,133) (55,744)
(21,967) (57,258)
Total assets less current liabilities
684,119 797,122
Non-current liabilities
14 Financial liabilities
(49,795) (49,782)
Net assets
634,324 747,340
Equity attributable to equity shareholders
16 Share capital
18,597 18,627
17 Capital redemption reserve
26,824 26,794
Retained earnings:
17 Capital reserves
568,767 682,267
18 Revenue reserve
20,136 19,652
Total equity
634,324 747,340
19 Net asset value per ordinary share
926.2p 1,003.1p
These financial statements on pages 72-91 were approved and authorised for issue by the Board of Directors on 30 July
2025 and were signed on its behalf by:
Penny Freer
Chair of the Board
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Statement of Cash Flows
for the year ended 31 May
For the year ended
Notes
At 31 May
2025
£’000
At 31 May
2024
£’000
Operating activities
(Loss)/profit before taxation
(44,992) 93,340
Add back interest payable
3,701 4,117
10 Loss/(profit) on investments held at fair value through profit or loss
61,211 (75,521)
Losses on foreign currency
3 –
10 Purchases of investments
(115,189) (89,274)
10 Sales of investments
188,624 91,583
(Increase)/decrease in receivables
(10) 36
12 (Increase)/decrease in amounts due from brokers
(2,542) 506
Decrease/(increase) in accrued income
8,132 (9,113)
Increase/(decrease) in payables
64 (54)
13 Increase in amounts due to brokers
26 579
Net cash inflow from operating activities before interest and taxation
1
99,028 16,199
Interest paid
(3,859) (3,968)
Net cash inflow from operating activities
95,169 12,231
Financing activities
Buyback of ordinary shares
(47,619) (1,598)
Equity dividends paid
(20,004) (19,794)
(Repayment)/drawdown of bank loans
(35,611) 5,072
Net cash outflow from financing activities
(103,234) (16,320)
Decrease in cash and cash equivalents
(8,065) (4,089)
Currency losses
(3) –
Cash and cash equivalents at the start of the year
9,249 13,338
Cash and cash equivalents at the end of the year
1,181 9,249
1 In accordance with IAS 7.31 cash inflow from dividends was £22,228,000 (2024: £24,346,000), and cash inflow from interest was £171,000 (2024 £198,000)
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Statements
The notes on pages 76-91 form part of these financial statements
Notes to the Financial Statements
1 Accounting policies
a) Basis of preparation
The Henderson Smaller Companies Investment Trust plc (the “Company”) is a company incorporated and domiciled in
the United Kingdom under the Companies Act 2006 (the “Act”). The company is a single reporting entity and there is no
ultimate controlling party. The financial statements of the Company for the year ended 31 May 2025 have been
prepared in accordance with UK-adopted International Accounting Standards (“IAS”) in conformity with the
requirements of the Act. These comprise standards and interpretations approved by the IAS Board, together with
interpretations of the IAS and Standing Interpretations Committee approved by the International Financial Reporting
Standards (“IFRS”) that remain in effect, to the extent that IFRS have been adopted by the United Kingdom.
The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the
revaluation of certain financial instruments held at fair value through profit or loss. The principal accounting policies
adopted are set out below. These policies have been applied consistently throughout the year. Where presentational
guidance set out in the Statement of Recommended Practice (the “SORP”) for investment trusts issued by the
Association of Investment Companies (the “AIC”) is consistent with the requirements of IFRS, the directors have sought
to prepare the financial statements on a basis consistent with the recommendations of the SORP.
Accounting standards
i) The following new and amended standards are relevant and applicable to the Company and have been adopted.
There has been no impact on the financial statements as a result of these new and amended standards.
Amendments to IAS in conformity with the requirements of the Act issued and effective for the current year end:
Standards
Effective for years
beginning on or after
IAS 1 Amendments Classification of Liabilities as current or non-current 1 January 2024
IAS 1 Amendments Non-current Liabilities with Covenants 1 January 2024
ii) Relevant new standards and amendments issued but not effective for the current financial year and not early-
adopted by the Company:
Standards
Effective for years
beginning on or after
IAS 21 Amendments Lack of Exchangeability 1 January 2025
Annual Improvements 2023-24 Minor amendments to IFRS 1, 7, 9, 10 and IAS 7 1 January 2026
IFRS 7 and 9 Amendments Classification and Measurement of Financial Instruments 1 January 2026
IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027
Interpretations
It is expected that these new standards and amendments will have no impact on the financial statements. In respect of
IFRS 18 the impact of this has yet to be determined.
b) Going concern
The assets of the Company consist of securities that are readily realisable and, accordingly, the directors believe that
the Company has adequate resources to continue in operational existence for at least twelve months from the date of
approval of the financial statements. In coming to this conclusion, the directors have also considered the continued
macroeconomic and geopolitical uncertainty, the nature of the Company’s covenants, the strength of the Company’s
distributable reserves and the liquidity of the portfolio.
The directors have concluded that the Company is able to meet its financial obligations, including the repayment of the
bank loan, as they fall due for a period of at least twelve months from the date of issuance. As set out in the Viability
Statement on page 41, the Chair, Senior Independent Director and the Fund Managers have been meeting extensively
with shareholders this year ahead of the continuation vote. Feedback from these meetings suggests that shareholders
are supportive of the Company continuing in operation, and therefore supports the financial statements being
prepared on a going concern basis.
The Company’s shareholders are asked every three years to vote for the continuation of the Company. An ordinary
resolution to this effect was put to the Annual General Meeting (“AGM”) held on 30 September 2022 and passed by a
substantial majority of the shareholders. The next continuation vote will take place at the AGM in 2025.
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Notes to the Financial Statements continued
1 Accounting policies continued
c) Investments held at fair value through profit or loss
All investments are classified upon initial recognition as held at fair value through profit or loss, and are measured
initially and subsequently at fair value. Investment transactions are accounted for on a trade date basis. Assets are
de-recognised at the trade date of the disposal. Proceeds are measured at fair value, which is regarded as the
proceeds of sale less any transaction costs. The fair value of the financial instruments is based on their quoted bid price
or the last traded price depending on the convention of the exchange on which the investment is quoted at the
balance sheet date, without deduction of the estimated future selling costs. There were no unquoted investments
during the current year or prior year.
Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are
recognised in the Statement of Comprehensive Income as ‘(losses)/gains on investments held at fair value though
profit or loss’. Also included within this caption are transaction costs in relation to the purchase or sale of investments,
including the difference between the purchase price of an investment and its bid price at the date of purchase.
d) Presentation of the Statement of Comprehensive Income
In order to better reflect the activities of an investment trust company, and in accordance with guidance issued by the
AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue
and capital nature has been presented alongside the Statement of Comprehensive Income. In accordance with the
Company’s status as a UK investment company under s833 of the Act, net capital returns are no longer prohibited to be
distributed by way of dividend where authority is given within the Company’s articles of association. Additionally, the net
revenue is the measure the directors believe appropriate in assessing the Company’s compliance with certain
requirements set out in s1158 Corporation Tax Act 2010.
e) Income
Dividends receivable on equity shares are recognised as revenue for the year on an ex-dividend basis. Special
dividends represent dividends paid by the investee companies that are additional to the normal or expected dividend
cycle for that company. Special dividends are treated as revenue return or capital return, depending on the facts and
circumstances of each individual case. Dividends which have clearly arisen out of the investee company’s
reconstruction or reorganisation are usually considered to be capital in nature and allocated to capital return. Other
special dividends will usually be considered as revenue in nature unless evidence suggests otherwise. Interest is
recognised on an accruals basis.
Income distributions from UK Real Estate Investment Trusts (“UK REITs”) will be split into two parts: a Property Income
Distribution (“PID”) made up of rental revenue; and a non-PID element, consisting of non-rental revenue. The PID element
is subject to corporation tax as schedule A revenue, while the non-PID element will be treated as franked revenue.
f) Expenses
All expenses are accounted for on an accruals basis. The Board has determined that the capital return should reflect
the indirect costs of earning capital returns. Consequently, since 1 June 2013 the Company has allocated 70% of its
management fees and finance costs to the capital return of the Statement of Comprehensive Income, with the
remaining 30% being allocated to the revenue return. All other administrative expenses are charged to the revenue
return of the Statement of Comprehensive Income.
Any performance fees are charged wholly to the capital return. Expenses which are incidental to the purchase or sale of
an investment are recognised immediately in the capital return of the Statement of Comprehensive Income, and are
included within the gains or losses on investments held at fair value through profit or loss.
g) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on
the taxable profit for the period. Taxable profit differs from net profit as reported in the Statement of Comprehensive
Income because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates
that were applicable at the balance sheet date.
The tax effect of different items of expenditure is allocated between the capital and the revenue using the Company’s
effective rate of tax for the year. In line with the recommendations of the SORP, the allocation method used to calculate
tax relief on expenses presented against capital returns in the supplementary information in the Statement of
Comprehensive Income is the ‘marginal basis’. Under this basis, if taxable income is capable of being offset entirely by
expenses presented in the revenue return column of the Statement of Comprehensive Income, then no tax relief is
transferred to the capital return column.
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Notes to the Financial Statements continued
1 Accounting policies continued
g) Taxation continued
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will
be available against which deductible temporary differences can be utilised. Investment trusts which have approval
as such under s1158 Corporation Tax Act 2010 are not liable for taxation on capital gains.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset is realised. Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates
to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
h) Foreign currency
For the purposes of the financial statements, the results and financials position are expressed in pound sterling, which
is the functional currency and presentational currency of the Company. Sterling is the functional currency because it
is the currency of the primary economic environment in which the Company operates.
Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily
exchange rates. Monetary assets and liabilities and investments held at fair value through profit or loss which are
denominated in overseas currencies at the balance sheet date are translated into sterling at the exchange rates
ruling at that date. Gains or losses arising on the retranslation of investments held at fair value through profit or loss
are included within the ‘(Losses)/gains on investments held at fair value through profit or loss’.
i) Cash and cash equivalents
Cash comprises cash in hand and on demand deposits. Cash equivalents are short-term, highly liquid investments that
are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.
j) Borrowings
Interest-bearing bank loans, overdrafts, unsecured loan notes and Preference Stock are recorded initially at fair value,
being the proceeds received, net of direct issue costs. They are subsequently measured at amortised cost. Finance
costs, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an
accruals basis in the Statement of Comprehensive Income using the effective interest rate method and are added to
the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
The Preference Stock has been classified as a liability as it represents a contractual obligation on behalf of the
Company to deliver to the stockholders a fixed and determinable amount at the date of redemption.
k) Operating segments
The directors consider that the Company has one operating segment, being the activity of investing in shares
and securities primarily for capital appreciation in accordance with the Company’s published investment objective.
The Company operates within the United Kingdom.
l) Dividends payable to shareholders
Dividends payable to shareholders are recognised in the financial statements when they are paid or, in the case of final
dividends, when they are approved by shareholders. Dividends are recorded in the Statement of Changes in Equity.
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Notes to the Financial Statements continued
1 Accounting policies continued
m) Capital and reserves
Capital reserve arising on investments sold
The following are accounted for in this reserve:
• gains and losses on the disposals of investments;
• expenses and finance costs allocated to capital net of tax relief;
• realised foreign exchange differences of a capital nature; and
• costs of repurchasing ordinary share capital.
Capital reserve arising on revaluation of investments held
The following are accounted for in this reserve:
• increases and decreases in the valuation of investments held at the year end; and
• unrealised foreign exchange differences of a capital nature.
Revenue reserve
The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been
distributed to shareholders as a dividend.
Capital redemption reserve
The capital redemption reserve represents the nominal value of ordinary shares repurchased and cancelled.
n) Distributable reserves
The Company’s capital reserve arising on investments sold (i.e. realised capital profits) and revenue reserve may be
distributed by way of a dividend.
o) Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference stock is classified as a liability.
Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of
tax, from the proceeds.
Where the Company purchases its own equity share capital (Treasury shares), the consideration paid, including any
directly attributable incremental costs is deducted from equity attributable to the Company’s equity holders until the
shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net
of any directly attributable incremental transaction costs, is included in equity attributable to the Company’s equity holders.
Share capital represents the nominal value of ordinary shares issued.
p) Key estimates and assumptions
Estimates and assumptions used in preparing the financial statements are reviewed on an ongoing basis and are
based on historical experience and various other factors that are believed to be reasonable under the circumstances.
The results of these estimates and assumptions form the basis of making judgements about carrying values of assets
and liabilities that are not readily apparent from other sources.
There are no estimates and assumptions that may cause material adjustment to the carrying value of assets and
liabilities. The decision to allocate special dividends as income or capital is a judgment, and further details are provided
in note 1e). The decision to include Purchases and Sales of investments within Operating activities in the Cash Flow
Statement is considered appropriate because these are core activities of the Company’s operations. Given the nature
of the Company as an investment trust, this is not deemed to be a significant judgement in the context of the financial
statements as a whole.
There are no significant judgements made in the preparation of these financial statements.
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2 Investment income
2025
£’000
2024
£’000
Income from companies listed or quoted in the United Kingdom:
Dividends
21,587 23,182
Special dividends
687 602
Property income distributions
638 872
Total investment income
22,912 24,656
3 Other income
2025
£’000
2024
£’000
Bank and other interest
168 190
168 190
4 Management fees
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Management fee
719 1,677 2,396 679 1,584 2,263
719 1,677 2,396 679 1,584 2,263
A summary of the fee arrangements in the management agreement is given on page 26.
5 Other expenses
2025
£’000
2024
£’000
Directors’ fees (see the Directors’ Remuneration Report on pages 59-61)
202 195
Auditors’ remuneration for the audit of the Company and the financial statements
62 54
Other professional fees
73 88
FCA and London Stock Exchange fees
72 60
Registration costs
34 25
Annual and half-year reports and shareholder circulars: printing and distribution
32 22
Insurances
16 14
AIC subscriptions
22 22
Custody and other bank charges
41 36
Charitable donations
– 6
Depositary charges
47 46
Other expenses payable to the management company
1
135 54
Other expenses
25 25
761 647
1 Other expenses payable to management company relate to marketing activities as described in Note 21
All transactions with directors are disclosed in the Directors’ Remuneration Report and are related-party transactions.
All the above expenses include VAT where VAT is applied to them. There were no non-audit services in the period (2024: nil).
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6 Finance costs
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Bank overdraft and loan interest
643 1,500 2,143 765 1,787 2,552
Interest on unsecured loan notes
1
467 1,091 1,558 470 1,095 1,565
Total
1,110 2,591 3,701 1,235 2,882 4,117
1 Includes amortisation of direct issue costs and will therefore vary from year to year
7 Taxation
a) Analysis of charge/(credit) for the year
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Overseas tax suffered
2 – 2 (5) – (5)
Current and total tax charge/(credit)
for the year
2 – 2 (5) – (5)
b) Factors affecting the tax charge/(credit) for the year
UK corporation tax is charged at 25% (2024: 25%). Approved investment trusts are exempt from corporation tax on
chargeable gains made by the investment trust.
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Profit/(loss) before taxation
20,490 (65,482) (44,992) 22,285 71,055 93,340
Corporation tax at 25% (2024: 25%)
5,123 (16,371) (11,248) 5,571 17,764 23,335
Effects of:
Non-taxable UK dividends
(5,388) – (5,388) (5,761) – (5,761)
Non-taxable overseas dividends
(181) – (181) (185) – (185)
Expenses not deductible for tax purposes
– – – 2 – 2
Excess management expenses and loan
deficits
331 799 1,130 229 779 1,008
Overseas withholding tax
2 – 2 (5) – (5)
Non-taxable capital items
– 15,304 15,304 – (18,880) (18,880)
Corporate interest restrictions
115 268 383 144 337 481
Current and total tax charge/(credit)
for the year
2 – 2 (5) – (5)
c) Provision for deferred taxation
No provision has been made for deferred tax on income.
Due to the Company’s status as an investment trust, and the intention to continue meeting the conditions required to
maintain approval of such status in the foreseeable future, the Company has not provided for deferred tax on capital
gains or losses arising on the revaluation or disposal of investments.
d) Factors that may affect future tax charges
The Company has not recognised a deferred tax asset of £31,065,000 (2024: £29,935,000) arising as a result of having
unutilised management expenses and loan relationships of £124,259,000 (2024: £119,741,000). These expenses will only be
utilised if the tax treatment of the Company’s income and chargeable gains changes or if the Company’s investment
profile changes. There is no expiry date for these deferred tax assets and no expectation for these to be utilised.
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Notes to the Financial Statements continued
8 Earnings/(loss) per ordinary share
The earnings per ordinary share figure is based on the net loss for the year of £44,994,000 (2024: net profit of
£93,345,000) and on 73,469,728 (2024: 74,684,351) ordinary shares, being the weighted average number of ordinary
shares in issue during the year.
The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below:
2025
£’000
2024
£’000
Net revenue profit
20,488 22,290
Net capital (loss)/profit
(65,482) 71,055
Net total (loss)/profit
(44,994) 93,345
Weighted average number of ordinary shares in issue during the year
73,469,728 74,684,351
2025 2024
Revenue earnings per ordinary share
27.89p 29.85p
Capital (losses)/earnings per ordinary share
(89.13p) 95.14p
Total (loss)/earnings per ordinary share
(61.24p) 124.99p
The Company has no securities in issue that could dilute the return per ordinary share. Therefore the basic and diluted
earnings per ordinary share are the same.
9 Ordinary dividends
Record Date Pay Date
2025
£’000
2024
£’000
Final dividend 19.5p (2024: 19.0p) for the year ended
31 May 2024 30 August 2024 7 October 2024
14,505 14,193
Interim dividend of 7.5p (2024: 7.5p) for the year
ended 31 May 2025 7 February 2025 7 March 2025
5,507 5,603
Unclaimed dividends
(8) (2)
20,004 19,794
Subject to approval at the AGM, the proposed final dividend of 20.5p per ordinary share will be paid on 13 October 2025
to shareholders on the register of members at the close of business on 29 August 2025. The shares will be quoted
ex-dividend on 28 August 2025.
The proposed final dividend for the year ended 31 May 2025 has not been included as a liability in these financial
statements. Under IFRS, the final dividend is not recognised until approved by shareholders.
The total dividends payable in respect of the financial year which form the basis of the test under s1158 of the
Corporation Tax Act 2010 are set out below:
2025
£’000
2024
£’000
Revenue available for distribution by way of dividends for the year
20,488 22,290
Interim dividend for the year ended 31 May 2025 of 7.5p (2024: 7.5p) per ordinary share
(5,507) (5,603)
Final dividend for the year ended 31 May 2024 of 19.5p
– (14,505)
Proposed final dividend for the year ended 31 May 2025 of 20.5p
(based on 65,261,042 shares in issue at 28 July 2025)
(13,379) –
Transfer to reserves
1,602 2,182
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10 Investments held at fair value through profit or loss
2025
£’000
2024
£’000
Cost at start of year
691,938 689,380
Investment holding gains at start of year
141,430 70,776
Valuation at start of year
833,368 760,156
Movements in the year:
Acquisitions at cost
115,189 89,274
Disposals at cost
(199,511) (86,716)
Movement in investment holding (losses)/gains
(50,324) 70,654
Valuation at year end
698,722 833,368
Cost at end of the year
607,616 691,938
Investment holding gains
91,106 141,430
Valuation at year end
698,722 833,368
The Company received £188,624,000 (2024: £91,583,000) from investments sold in the year. The book cost of these
investments when they were purchased were £199,511,000 (2024: £86,716,000). These investments have been revalued
over time and until they were sold, any unrealised gains/losses were included in the fair value of the investments.
Purchase and sale transaction costs for the year ended 31 May 2025 were £451,000 and £84,000 respectively
(2024: transaction costs of purchases £371,000; transaction costs of sales £37,000). These comprise mainly stamp duty
and commission.
Special dividends allocated to capital for the year ended 31 May 2025 were £480,000 (2024: £9,945,000).
Analysis of investments at fair value
2025
£’000
2024
£’000
Equity investments:
Listed on London Stock Exchange
609,994 674,935
Listed on Alternative Investment Market (“AIM”)
88,728 158,433
698,722 833,368
All the investments are listed in the United Kingdom. The above categories are based on information obtained from the
London Stock Exchange Daily Official List.
Total capital (losses)/gains from investments
2025
£’000
2024
£’000
(Losses)/gains on the sale of investments based on historical cost
(10,887) 4,867
Revaluation (gains)/losses recognised in previous years
(14,717) 207
(Losses)/gains on investments sold in the year based on the carrying value at the previous
balance sheet date
(25,604) 5,074
Net movement in investment holding
(35,607) 70,447
(Losses)/gains on investments held at fair value through profit or loss
(61,211) 75,521
All capital gains/(losses) are from investments that are listed (or quoted on AIM) in the United Kingdom.
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Notes to the Financial Statements continued
11 Substantial interests
The Company held interests of 3% or more of any class of share capital in one investee company (2024: two
investee companies). These investments are not considered by the directors to be significant in the context
of these financial statements.
Valuation
£’000
% of
voting
rights
RM
4,001 4.9
12 Receivables
2025
£’000
2024
£’000
Securities sold for future settlement
2,542 –
Prepayments and accrued income
3,641 11,763
6,183 11,763
13 Payables
2025
£’000
2024
£’000
Securities purchased for future settlement
605 579
Buyback of shares into Treasury for future settlement
399 –
Management fee
351 372
Accruals and deferred income
479 563
1,834 1,514
14 Financial liabilities
2025
£’000
2024
£’000
Unsecured Loan Notes:
3.33% Unsecured loan notes 2036 (redeemable at par on 23 May 2036)
29,867 29,856
2.77% Unsecured loan notes 2052 (redeemable at par on 2 February 2052)
19,924 19,922
Preference Stock:
4,257 Preference stock units of £1 each (2024: 4,257)
4 4
49,795 49,782
The preference stock units carry the right to receive a non-cumulative dividend at a final rate of 0.001% payable on
1 June each year. On a winding-up of the Company, preference stockholders are entitled to repayment of the capital
paid up thereon. The preference stock does not entitle the holder to attend or vote at any general meeting of the
Company except where the dividend is six months in arrears or on a resolution to liquidate the Company.
On 23 May 2016, the Company issued £30,000,000 (nominal) 3.33% unsecured loan notes, net of issue costs totalling
£213,000. The issue costs will be amortised over the life of the notes. The loan notes do not carry voting rights and the
3.33% interest rate would be cumulative if unpaid in any period.
On 2 February 2022, the Company issued £20,000,000 (nominal) 2.77% unsecured loan notes, net of direct issue costs
totalling £82,000. The direct issue costs will be amortised over the life of the notes. The loan notes do not carry voting
rights and the 2.77% interest rate would be cumulative if unpaid in any period.
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Notes to the Financial Statements continued
15 Risk management policies and procedures
The directors manage investment risk principally through setting an investment policy, approved by shareholders, which
incorporates risk parameters (see pages 27-28), by contracting management of the Company’s investments to an
investment manager (Janus Henderson) under a contract which incorporates appropriate duties and restrictions and by
monitoring performance in relation to these. The Board’s relationship with Janus Henderson is discussed in the Strategic
Report (pages 1-41). Internal control and the Board’s approach to risk management are also on pages 51-55. There have
been no material changes to the management or nature of the Company’s investment risks from the prior year.
The main risks arising from the Company’s pursuit of its investment objective are market risk, credit risk and liquidity risk.
The effects of these can also be increased by gearing.
The Board and Janus Henderson co-ordinate the Company’s risk management and there are various risk management
systems in place as detailed below:
• Straight-through processing via a deal order and management system (“OMS”) is utilised for listed securities.
• Portfolio modelling and investment management functions (including order-raising, dealing and trade execution)
are performed using one of, or a combination of, the following third-party software applications: Charles River
Development, OMS and/or Imagine.
• Fund pricing and accounting services are outsourced to a third-party administrator (currently BNP Paribas) which
utilises Hiportfolio software.
• The IT tools to which the Janus Henderson risk, compliance and operations teams have access for independent
monitoring and risk measurement purposes include:
– Charles River Compliance module for investment restrictions monitoring;
– SAI360 operational risk database;
– RiskMetrics, UBS Delta, Style Research and Barra for market risk measurement;
– Bloomberg for market data and price-checking; and
– Hiportfolio for portfolio holdings and valuations.
a) Market risk
The fair value of a financial instrument held by the Company may fluctuate due to changes in market prices. This
market risk comprises market price risk (see note 15 (b)), currency risk (see note 15 (c)) and interest rate risk (see note 15
(d)). The Board reviews and agrees policies for managing these risks. Janus Henderson assesses the exposure to
market risk when making each investment decision and monitors the overall level of market risk on the whole of the
investment portfolio on an ongoing basis.
b) Market price risk
Market price risk (i.e. changes in market prices other than those arising from interest rate risk or currency risk) may
affect the fair value of the investments. The Company’s investments are susceptible to market price risk arising from
uncertainties about the future prices of the investments.
Management of the risk
The Board manages the risks inherent in the investment portfolio by ensuring full and timely access to relevant
information from Janus Henderson. The Board regularly reviews investment performance. The Board monitors
Janus Henderson’s compliance with the Company’s objectives and is directly responsible for investment strategy.
The Company’s exposure to changes in market prices at 31 May 2025 on its equity investments was £698,722,000
(2024: £833,368,000).
Concentration of exposure to market price risk
An analysis of the Company’s investments is shown on pages 19-21 and a sector analysis is set out on page 2. At 31 May 2025
all the investments were in companies listed or quoted on the London Stock Exchange, most of them being companies
established in and operating from the United Kingdom. Accordingly, there is a concentration of exposure to the UK,
although it is recognised that an investment’s country of domicile or of listing does not necessarily equate to its
exposure to the economic conditions in that country.
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Notes to the Financial Statements continued
15 Risk management policies and procedures continued
b) Market price risk continued
Market price risk sensitivity
The sensitivity of (a) the return after taxation for the year and (b) the Company’s net assets to an increase or decrease
of 25% in the fair values of the Company’s investments at each balance sheet date is given below. This level of change
is considered to be reasonably possible, based on observation of current market conditions.
The impact of a 25% increase in the value of the investments on the revenue return as at 31 May 2025 is a decrease
of £183,000 (2024: £219,000) and on the capital return is an increase of £174,253,000 (2024: £207,832,000). Accordingly,
the total impact on shareholders’ funds is an increase of £174,069,000 (2024: £207,613,000).
The impact of a 25% decrease in the value of the investments on the revenue return as at 31 May 2025 is a increase
of £183,000 (2024: £219,000) and on the capital return is an decrease of £174,253,000 (2024: £207,832,000). Accordingly,
the total impact on shareholders’ funds is an decrease of £174,069,000 (2024: £207,613,000).
c) Currency risk
The Company is not itself materially exposed to currency risk, although some of the investments will be in companies
that have operations that involve currency risk.
As at 31 May 2025, the Company did not hold any non-sterling denominated investments (2024: nil).
d) Interest rate risk
Interest rate movements may affect:
• the level of income receivable from cash at bank and on deposit; and
• the interest payable on the Company’s short-term borrowings.
Interest rate changes may also have an impact on the market value of the Company’s equity investments. In particular,
the effect of the interest rate changes on the earnings of companies held within the portfolio may have a significant
impact on the valuations of those companies.
Management of risk
The possible effects on the fair value of the investments that could arise as a result of changes in interest rates are
taken into account when making investment and borrowing decisions. The Company rarely holds significant cash
balances but finances part of its investment activity through borrowings at levels approved and monitored by the
Board. At 31 May 2025 the Company had committed bank borrowing facilities for a total of £20.1 million
(2024: £55.7 million); borrowings are drawn down for short periods at rates of interest that are determined by reference
to the market rates applicable at the time of borrowing.
Interest rate exposure
The Company’s financial liabilities at 31 May 2025 that give exposure to fixed interest rate risk are set out in note 14. The
exposure to floating interest rates can be found on the Balance Sheet (cash and cash equivalents and bank loans).
These amounts are not necessarily representative of the exposure to interest rates during the year, as the level of
exposure changes as investments are made, borrowings are drawn down or repaid, and the mix of borrowings subject
to floating or to fixed interest rate changes.
Interest rate sensitivity
The Company is not materially exposed to changes in interest rates. As at 31 May 2025 the Company’s one-year
revolving loan facility provided by BNP Paribas, London branch and effective from 2 February 2025, allowed borrowings
to a maximum of £70 million, the interest rate exposure on which is 0.90% plus SONIA (Sterling Overnight Index Average).
The bank loan at 31 May 2025 was £20,133,000 (2024: £55,744,000) and if interest rates changed by 100 basis points (up
or down) this would decrease or increase shareholder funds by approximately £201,000 (2024: £557,000). The interest
payable on the Company’s £30 million issue of unsecured loan notes is fixed at 3.33% and on the £20 million issue of
unsecured loan notes is fixed at 2.77%.
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Notes to the Financial Statements continued
15 Risk management policies and procedures continued
e) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities.
Management of risk
Liquidity risk is not significant as the majority of the Company’s assets are investments in quoted equity securities that
are readily realisable. The Company has borrowed £30 million by its issue in 2016 of 3.33% unsecured loan notes 2036
and a further £20 million by its issue in 2022 of 2.77% unsecured loan notes 2052. The Company is able to draw short-
term borrowings of up to £70 million from its committed borrowing facility with BNP Paribas, London branch. There were
borrowings of £20.1 million drawn down under the facility at 31 May 2025 (2024: £55.7 million).
Accordingly, the Company has access to borrowings of up to £120 million: the £50 million of fixed debt represented by
the issue of unsecured loan notes and a committed bank facility of £70 million.
The Board gives guidance to the Manager as to the maximum amount of the Company’s resources that should be
invested in any one company. The policy is that the Company should remain fully invested in normal market conditions
and that short-term borrowings should be used to fund short-term cash requirements.
Liquidity risk exposure
The remaining contractual maturities of the financial liabilities at 31 May 2025, based on the earliest date on which
payment could be required, was as follows:
2025 2024
Due within
1 year
£’000
Due between
1 and 5 years
£’000
Due more
than 5 years
£’000
Due within
1 year
£’000
Due between
1 and 5 years
£’000
Due more
than 5 years
£’000
Preference stock
1
– – – – – –
Unsecured loan notes 2036
2
999 3,996 35,972 999 3,996 36,971
Unsecured loan notes 2052
2
554 2,216 32,009 554 2,216 32,563
Bank loans and interest
20,218 – – 56,123 – –
Payables
1,609 – – 1,110 – –
23,380 6,212 67,981 58,786 6,212 69,534
1 See also note 14. The Company has in issue preference stock without a set redemption date with a total par value of £4,000 (2024: £4,000) which has a
negligible ongoing finance cost
2 The amounts due include unsecured loan note interest
f) Credit risk
The failure of the counterparty to discharge its obligations under a transaction could result in the Company suffering a loss.
Management of risk
The risk is not significant, and is managed as follows:
• investment transactions are carried out with a large number of brokers, whose credit standard is reviewed regularly
by JHI, and limits are set on the amount that may be due from any one broker; and
• cash at bank is held only with reputable banks with high quality external credit ratings.
None of the Company’s financial assets are past their due date and the adoption of the expected credit loss model for
impairment under IFRS 9 has not had a material impact on the Company.
In summary, the maximum exposure to credit risk at 31 May 2025 was to cash and cash equivalents of £1,181,000
(2024: £9,249,000), and to receivables of £6,183,000 (2024: £11,763,000) (see note 12).
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Notes to the Financial Statements continued
15 Risk management policies and procedures continued
g) Fair values of financial assets and financial liabilities
The investments are held at fair value through profit or loss. All the net current liabilities are held in the Balance Sheet at
a reasonable approximation of fair value. At 31 May 2025 the fair value of the preference stock was £4,000 (2024: £4,000).
The fair value of the preference stock is estimated using the prices quoted on the exchange on which the investment
trades. The preference stock is carried in the Balance Sheet at par.
The unsecured loan notes are carried in the Balance Sheet at par less the issue costs which are amortised over the life
of the notes. In order to comply with fair value accounting disclosures only, the fair value of the unsecured loan notes
has been estimated to be £34,913,000 (2024: £35,823,000) and is categorised as Level 3 in the fair value hierarchy
as described below. However, for the purpose of the daily NAV announcements, the unsecured loan notes are valued
at par in the NAV because they are not traded and the directors have assessed that par value is the most appropriate
value to be applied for this purpose.
The fair value of the unsecured loan notes is calculated using a discount rate which reflects the yield of a UK Gilt
of similar maturity plus a suitable credit spread.
h) Fair value hierarchy disclosures
The table below sets out fair value measurements using the IFRS 13 fair value hierarchy.
Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant
to the fair value measurement of the relevant asset, as follows:
Level 1: valued using quoted prices in active markets for identical assets.
Level 2: valued by reference to valuation techniques using observable inputs other than quoted prices.
Level 3: valued by reference to valuation techniques using inputs that are not based on observable market data.
The valuation techniques used by the Company are explained in note 1(c).
Fair value hierarchy – 2025
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments
698,722 – – 698,722
Fair value hierarchy – 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments
833,368 – – 833,368
There have been no transfers during the year between any of the levels.
i) Capital management policies and procedures
The Company’s capital management objectives are:
• to ensure that it will be able to continue as a going concern; and
• to secure long-term capital growth for the shareholders by investment in quoted securities in the UK.
This is to be achieved through an appropriate balance of equity capital and gearing. The Company’s policy is that its
borrowings must not exceed 30% of the shareholders’ funds.
The Company’s total capital at 31 May 2025 was £704,461,000 (2024: £853,088,000) comprising £20,133,000
(2024: £55,744,000) of unsecured bank loans, £50,000,000 (2024: £50,000,000) of unsecured loan notes, £4,000
(2024: £4,000) of preference stock and £634,324,000 (2024: £747,340,000) of equity share capital and reserves.
The Company has a £70 million revolving credit facility with BNP Paribas, London branch. The Company had drawn
down £20,133,000 under these facilities as at 31 May 2025 (2024: £55,744,000). The Company was fully compliant with the
terms of the facilities, as they existed, for the period 1 June 2024 to the date of this Annual Report.
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Financial
Statements
Notes to the Financial Statements continued
16 Share capital
Shares
entitled to
dividend
Total
shares
in issue
Nominal
value
in issue
£’000
Issued ordinary shares of 25p each:
At 1 June 2024
74,505,131 74,505,131 18,627
Buyback for cancellation during the year
(120,000) (120,000) (30)
Buyback to be held in Treasury during the year
(5,897,157) – –
At 31 May 2025
68,487,974 74,385,131 18,597
During the year the Company purchased 120,000 (2024: 196,665) of its own issued ordinary shares for cancellation
and 5,897,157 of its own issued ordinary shares to be held in Treasury, at a total cost of £48,018,000 (2024: £1,598,000).
Since the year end, 3,226,932 ordinary shares have been bought back at a cost of £28,100,000.
The holders of ordinary shares are entitled to all the capital growth in the Company and all the income from the
Company that is resolved by the directors to be distributed. Each holder of ordinary shares present at a general
meeting has one vote on a show of hands and on a poll every member present in person or by proxy has one vote for
each ordinary share held.
17 Capital redemption reserve and capital reserves
2025
Capital
redemption
reserve
£’000
Capital reserve
arising on
revaluation
of investments
held
£’000
Capital reserve
arising on
investments sold
£’000
Capital
reserves
£’000
At 1 June 2024
26,794 141,430 540,837 682,267
Buyback of shares to Treasury
– – (46,961) (46,961)
Buyback of shares for cancellation
30 – (1,057) (1,057)
Transfer on disposal of investments (see note 10)
– (14,717) 14,717 –
Net capital losses for the year
– (35,607) (25,604) (61,211)
Expenses charged to capital
– – (4,268) (4,268)
Currency losses
– – (3) (3)
At 31 May 2025
26,824 91,106 477,661 568,767
2024
Capital
redemption
reserve
£’000
Capital reserve
arising on
revaluation
of investments
held
£’000
Capital reserve
arising on
investments sold
£’000
Capital
reserves
£’000
At 1 June 2023
26,745 70,776 542,034 612,810
Buyback of shares for cancellation
49 – (1,598) (1,598)
Transfer on disposal of investments (see note 10)
– 207 (207) –
Net capital gains for the year
– 70,447 5,074 75,521
Expenses charged to capital
– – (4,466) (4,466)
At 31 May 2024
26,794 141,430 540,837 682,267
The capital reserve arising on investments sold (i.e. realised capital profits) may be distributed by way of a dividend.
18 Revenue reserve
2025
£’000
2024
£’000
At start of year
19,652 17,156
Ordinary dividend paid
(20,004) (19,794)
Revenue profit for the year
20,488 22,290
At 31 May
20,136 19,652
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Financial
Statements
Notes to the Financial Statements continued
19 Net asset value (“NAV”) per ordinary share
The NAV per ordinary share is based on the net assets attributable to the ordinary shares of £634,324,000
(2024: £747,340,000) and on the 68,487,974 ordinary shares in issue (excluding Treasury shares) at 31 May 2025
(2024: 74,505,131).
The Company has no securities in issue that could dilute the NAV per ordinary share.
The movement during the year of the net assets attributable to the ordinary shares was as follows:
2025
£’000
2024
£’000
Net assets attributable to ordinary shares at 1 June
747,340 675,387
Buyback of shares to Treasury
(46,961) –
Buyback of shares for cancellation
(1,057) (1,598)
Net (losses)/gains for the year
(44,994) 93,345
Ordinary dividends paid in the year
(20,004) (19,794)
Net assets attributable to ordinary shares at 31 May
634,324 747,340
20 Capital commitments and contingent liabilities
Capital commitments
There were no capital commitments as at 31 May 2025 (2024: nil).
Contingent liabilities
There were no contingent liabilities in respect of sub-underwriting commitments as at 31 May 2025 (2024: nil).
21 Transactions with the Manager and related parties
Under the terms of an agreement effective from July 2014 and most recently revised on 18 July 2024, with no changes
to terms affecting the relationship with the Manager, the Company appointed Janus Henderson as Manager to provide
investment management, accounting, administrative and secretarial services. The Manager has contracted with BNP
Paribas to provide accounting and administration services.
Details of the management fee arrangements for these services are given in the Strategic Report on page 26. The fees
paid or payable under this agreement to the Manager in respect of the year ended 31 May 2025 were £2,396,000
(2024: £2,263,000) (see note 4). The amount outstanding at 31 May 2025 was £351,000 payable to Janus Henderson
(2024: £372,000).
No performance fee is payable to Janus Henderson in respect of the year ended 31 May 2025 (2024: nil).
In addition to the above services, the Manager facilitates marketing activities with third parties which are recharged to
the Company. Total amounts paid to the Manager in respect of marketing for the year ended 31 May 2025 amounted to
£135,000 (2024: £54,000).
Directors’ interests in the ordinary shares of the Company and fees paid to the directors are considered to be
transactions with related parties. Details are shown in the Directors’ Remuneration Report and in note 5. At 31 May 2025,
an amount of £34,000 (2024: £33,000) had been accrued in respect to April and May 2025 directors’ fees and is included
within accruals in note 13. This was paid in the June 2025 quarterly payroll, as directors are remunerated in the form of
fees payable quarterly in arrears.
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Financial
Statements
Notes to the Financial Statements continued
22 Changes in financial liabilities
The following table shows the movements during the year in financial liabilities in the Balance Sheet:
Notes
At
1 June 2024
£’000
Cash flows
£’000
Amortisation
of issue costs
£’000
At
31 May 2025
£’000
Financing activities
Bank loans
(55,744) 35,611 – (20,133)
14 Financial liabilities
(49,783) – (12) (49,795)
(105,527) 35,611 (12) (69,928)
Non-financing activities
Cash and cash equivalents
9,249 (8,065) (3) 1,181
9,249 (8,065) (3) 1,181
Total
(96,278) 27,546 (15) (68,747)
Notes
At
1 June 2023
£’000
Cash flows
£’000
Amortisation
of issue costs
£’000
At
31 May 2024
£’000
Financing activities
Bank loans
(50,672) (5,072) – (55,744)
14 Financial liabilities
(49,771) – (12) (49,783)
(100,443) (5,072) (12) (105,527)
Non-financing activities
Cash and cash equivalents
13,338 (4,089) – 9,249
13,338 (4,089) – 9,249
Total
(87,105) (9,161) (12) (96,278)
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Financial
Statements
Additional
information
In this section
93 Glossary
95 Alternative performance measures
97 General shareholder information
98 Historical record
99 Corporate information
Photo: Mitchells and Butlers
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Glossary
Term Definition
Alternative
Investment Fund
Managers Directive
(“AIFMD”)
The AIFMD classifies certain investment vehicles, including investment companies, as
alternative investment funds (“AIFs”) and requires them to appoint an alternative investment
fund manager (“AIFM”) and depositary to manage and oversee the operations of the
investment vehicle. The Board retains responsibility for strategy, operations and compliance
and the directors retain a fiduciary duty to shareholders.
Association of
Investment
Companies (“AIC”)
The Company is a member of the AIC, which is the trade body for investment companies
and represents the industry in matters which impact the regulation of such entities.
The Company is a constituent of the AIC’s UK Smaller Companies sector.
Benchmark
An index against which performance is compared. For the Company, this is the Deutsche
Numis Smaller Companies Index (excluding investment companies).
Custodian
The custodian is responsible for ensuring the safe custody of the Company’s assets and that
all transactions in the underlying holdings are transacted in an accurate and timely manner.
Depositary
As an AIF, the Company is required to appoint a depositary who has responsibility for
overseeing the operations of the Company, including safekeeping, cash monitoring and
verification of ownership and valuation of the underlying holdings, and is responsible for
the appointment of a custodian. The depositary is strictly liable for the loss of any
investments or other assets in its custody unless it has notified that it has discharged its
liability in certain markets. No such notification has been made. The Company’s depositary
has confirmed that, in all material respects, the Company has been managed in
accordance with the FCA’s Investment Funds Sourcebook, the Company’s articles of
association and as required by the AIFMD.
Dividend dates
When declared or announced, each dividend will have three key dates applied to it. The
payment date is the date on which shareholders will receive their dividend, either by BACS
transfer or by receipt of a dividend cheque. The record date applied to the dividend is used
as a cut-off for the Company’s registrar to know which shareholders should be paid a
dividend. Only shareholders on the register of members at the close of business on the
record date will receive the dividend. The ex-dividend date is the business day before the
record date and is the date upon which the Company’s net asset value and share price will
be disclosed ex-dividend.
Gearing
Gearing is the borrowing of money to buy assets in the expectation that the return on
investments bought will exceed the interest cost of the borrowing. The net gearing
percentage reflects the amount of borrowings (e.g. bank loans and loan notes) the
Company has used to invest in the market. It is calculated by taking the difference between
total investments (see note 10) and equity shareholders’ funds (see Balance Sheet), dividing
this by the equity shareholders’ funds and multiplying by 100.
Gearing impact on
stock selection and
gearing decision
When the Company has a geared portfolio, the impact of ‘stock selection’ compared to
the benchmark is amplified as a consequence of being geared. Without gearing, portfolio
performance would have been higher and the residual of the impact is allocated to the
‘decision’ to be geared. Splitting the impact in this way can be helpful to show the effect
of debt on portfolio performance and disaggregating this from the impact of the decision
to gear.
The performance attribution on page 12 shows the impact of gearing on performance.
This is split between ‘gearing impact on stock selection’, being a comparison of the
performance of the ungeared investments within the Company’s portfolio compared to
the index where the effects are not amplified, and the residual which is the impact of the
‘gearing decision’.
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Additional
Information
Glossary continued
Term Definition
Investment trusts
Investment trusts are public limited companies, governed by their articles of association,
amendments to which must be approved by shareholders through a special resolution.
They are listed on the London Stock Exchange, and provide shareholders with a professionally
managed portfolio of investments. Investment trusts are defined in s833 Companies Act
2006. They operate in line with s1158 Corporation Tax Act 2010 as amended and obtain
approval from HMRC for their status. They are liable to corporation tax on their net revenue
profits but are exempt from tax on the capital gains arising on their investments subject to
meeting criteria set out in s1158. The directors believe that the Company has conducted its
affairs in compliance with s1158 since approval was granted and intends to continue to do so.
Income, net of expenses and tax, is substantially distributed to shareholders. Investment
trusts are also known as investment companies, although the tax legislation retains the
reference to investment trusts.
Liquidity
In the context of the liquidity of shares in the stock market, this refers to the availability of
buyers in the market for the share in question. Where the market in a particular share is
described as ‘liquid’, that share will be in demand and holders wishing to sell their shares
should find ready buyers. Conversely, where the market in a share is ‘illiquid’, the difficulty
of finding a buyer will tend to depress the price that might be negotiated for a sale.
Management fee
This is a fee charged by a management company for managing a portfolio, normally based
on a percentage of the assets under management. The Company’s management fee is
charged at 0.35% per annum (0.0875% per quarter) of net assets calculated on the last day
of each calendar quarter and is paid to Janus Henderson each calendar quarter in advance.
4Ms process
The UK Smaller Companies team uses a structured investment approach known as the 4Ms
process, which stands for Model (business model of a company), Management (quality and
track record of the management team), Money (financial health of a company) and
Momentum (a company’s ability to outperform expectations).
Ongoing charge
The ongoing charge reflects those expenses of a type which are likely to recur in the
foreseeable future, whether charged to capital or revenue, and which relate to the
operation of the Company as a collective fund, excluding the costs of acquisition or
disposal of investments, financing costs and gains or losses arising on investments. The
ongoing charge is based on the premise that actual costs incurred in the year (see notes
4 and 5) are the best estimate of future costs, excluding any performance fees, in
accordance with the AIC methodology.
The ongoing charge is the annualised charge expressed as a percentage of the average
aggregate NAV in the period (see page 95). Management fees and other administrative
expenses are included in the calculation, such as directors’ fees and the auditor’s fees,
and the figure therefore exceeds the rate of the management fee paid to Janus
Henderson. The cap of 0.90% relates only to management fees and performance fees
under the Company’s management agreement, and excludes any other expenses.
Total expenses for periods where a performance fee is payable can therefore be greater
than 0.90%.
Share buybacks
A corporate financial strategy where a company purchases its own shares from the market.
This reduces the total number of shares available. Shares are bought at a price lower than
NAV, which helps to increase value for continuing shareholders. When a company’s shares
trade at a discount to NAV and it buys some shares back, the remaining shares become
more valuable because there are fewer shares owning the same level of assets. Shares are
bought back from shareholders who have placed an instruction to sell their shares on the
London Stock Exchange, and not from shareholders wishing to continue to hold their shares.
The number of shares available for investors to buy on the London Stock Exchange is
reduced by the number of shares bought back.
Treasury shares
A company’s own issued shares which it buys back, and which it does not cancel, are said to
be ‘held in Treasury’. Shares held in Treasury do not carry voting rights, do not receive
dividends, and are not included in earnings per share calculations. Treasury shares can be
sold (reissued) by the company or cancelled at a later date.
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Additional
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Alternative performance measures
The Company uses the following alternative performance measures (“APMs”) throughout the Annual Report, financial
statements and notes to the financial statements. The APMs are reconciled to the financial statements through the
narrative below. The Board believes that each of the APMs, which are typically used within the investment trust sector,
provide additional useful information to shareholders to help assess the Company’s performance against its peer group.
Capital return per share
The capital return per share is the capital profit for the year (see Statement of Comprehensive Income) divided
by the weighted average number of ordinary shares in issue during the year (see note 8).
Discount or premium
The amount by which the market price per share of an investment trust is either higher (premium) or lower (discount)
than the NAV per ordinary share, expressed as a percentage of the NAV per ordinary share.
NAV
pence
Share
price
pence
Premium/
(discount)
to NAV
At 31 May 2024
1,003.1 888.0 (11.5%)
At 31 May 2025
926.2 841.0 (9.2%)
Gearing/(net cash)
Gearing represents the excess amount above shareholders’ funds of total investments, expressed as a percentage of
the shareholders’ funds. If the amount calculated is negative, this is a ‘net cash’ position and not gearing.
2025 2024
Investments held at fair value through profit or loss (£’000) (page 83)
(A) 698,722 833,368
Net assets (£’000) (page 74)
(B) 634,324 747,340
Gearing (C = (A/B) -1) (%)
(C) 10.2% 11.5%
Net asset value (“NAV”) per ordinary share
The value of the Company’s assets (i.e. investments held at fair value through profit or loss (see note 10) and cash held
(see Balance Sheet)) less any liabilities (i.e. financial liabilities (see note 13)) for which the Company is responsible
divided by the number of ordinary shares in issue (see note 16). The aggregate NAV is also referred to as total equity,
in the Balance Sheet.
The NAV per ordinary share is published daily and the year end NAV can be found on page 6. Further information is
available in note 19 within the notes to the financial statements.
Ongoing charge ratio
The ongoing charge has been calculated in accordance with the guidance issued by the AIC as the total investment
management fees and administrative expenses expressed as a percentage of the average NAV throughout the year.
2025
£’000
2024
£’000
Management fees (note 4)
2,396 2,263
Other administrative expenses (note 5)
761 647
Less: non-recurring expenses
(18) (4)
Ongoing charges (A)
3,139 2,906
Average net assets
1
(B)
693,240 649,983
Ongoing charges ratio (excluding performance fee) (C = (A/B) x 100) (C)
0.45% 0.45%
1 Calculated using the average daily NAV
Revenue return per share
The revenue return per share is the revenue return for the year (see Statement of Comprehensive Income) divided
by the weighted average number of ordinary shares in issue during the year (see note 8).
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Additional
Information
Total return
The return on the share price or NAV taking into account both the rise and fall of NAV or share prices and dividends paid
to shareholders. Any dividends received by a shareholder are assumed to have been reinvested in either additional
shares (for share price total return) or the Company’s assets (for NAV total return). Dividends paid and payable are
set out in note 9.
NAV per share at 31 May 2024 and 31 May 2023 (p)
1,003.1 904.1
NAV per share at 31 May 2025 and 31 May 2024 (p)
926.2 1,003.1
2025 2024
Change in the year (%)
-7.7 11.0
Impact of dividends reinvested (%)
2.8 3.2
NAV total return for the year (%)
-5.1 14.5
Share price per share at 31 May 2024 and 31 May 2023 (p)
888.0 785.0
Share price per share at 31 May 2025 and 31 May 2024 (p)
841.0 888.0
2025 2024
Change in the year (%)
-5.3 13.1
Impact of dividends reinvested (%)
3.1 3.7
Share price total return for the year (%)
-2.3 17.3
Yield
The yield is the annual dividend expressed as a percentage of the year-end share price.
31 May
2025
31 May
2024
Annual dividend (p)
(A) 28.0 27.0
Share price (p)
(B) 841.0 888.0
Yield (C=A/B) (%)
(C) 3.3 3.0
Alternative performance measures continued
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Additional
Information
General shareholder information
Alternative Investment Fund Manager’s
Directive (“AIFMD”) disclosures and
remuneration
In accordance with the AIFMD, information about the
Company’s leverage and remuneration of Janus
Henderson Fund Management UK Limited, as the
Company’s alternative investment fund manager (“AIFM”),
is required to be made available to investors. These
disclosures, including those on the AIFM’s remuneration
policy, are contained in a separate document entitled
AIFMD Disclosure which can be found at
www.hendersonsmallercompanies.com.
BACS
Dividends can be paid to shareholders by means of BACS.
Mandate forms for this purpose are available from the
registrar, Computershare Investor Services plc.
Alternatively, shareholders can write to the registrar at the
address on page 99 to give their instructions, including the
bank account name, account number and sort code to
which payments are to be made.
Common Reporting Standard (“CRS”)
Under tax legislation, the Company must provide
personal information to HMRC on certain investors who
purchase shares in investment trusts. This information is
given annually to the local tax authority of the tax
residencies of non-UK based certificated shareholders
and corporate entities.
Equality Act 2010
This report and other documents issued by the
Company are available from the corporate secretary.
If needed, copies can be made available in a variety
of formats, including larger type.
A ‘typetalk’ operator, provided by the Royal National
Institute for Deaf People, is available to support
speech and hearing-impaired people to make
telephone calls. Please dial 18001 followed by the
number you wish to dial.
General Data Protection Regulation
(“GDPR”)
A privacy statement can be found at
www.janushenderson.com.
Individual Savings Account (“ISA”)
The Company intends to continue to manage its affairs in
order to qualify as an eligible investment for a stocks and
shares ISA.
Non-mainstream pooled investments
(“NMPI”) status
The Company conducts its affairs so that its ordinary
shares of 25p each can be recommended by
independent financial advisors (“IFAs”) to ordinary retail
investors in accordance with the Financial Conduct
Authority’s (“FCA”) rules regarding non-mainstream
investment products and intends to continue to do so
for the foreseeable future. The shares are excluded from
the FCA’s restrictions which apply to non-mainstream
investment products because they are shares in an
investment trust.
Performance details/share price
information
The Company’s NAV and share price are
published daily. Details can be found at
www.hendersonsmallercompanies.com and
in the London Stock Exchange Daily Official List.
The market price of the Company’s ordinary shares
is also published daily in the Daily Telegraph and
on Trustnet.
Shareholder details
Shareholders who hold their shares in certificated form
can check their shareholding with the registrar,
Computershare Investor Services plc, via
www.investorcentre.co.uk. To gain access to your details
on the Computershare site, you will need the holder
reference number shown on your share certificate.
Taxonomy Regulation
Regulation (EU) 2020/852 forms the basis for the
EU taxonomy. This establishes a list of environmentally
sustainable economic activities to provide definitions for
which economic activities can be considered
environmentally sustainable. The Company confirms that
the investments underlying this financial product do not
take into account the EU criteria for environmentally
sustainable economic activities.
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Additional
Information
At
31 May
Net
assets
£’000
NAV
per share
p
Mid-
market
price per
ordinary
share
p
Discount
%
Profit/
(loss) for
year
£’000
Revenue
return
p
Capital
return
p
Total
return
p
Dividends
p
Ongoing
charges
excl perf
fee
%
Ongoing
charges
incl perf
fee
%
2016
1
546,080 731.0 616.5 (15.7) (6,783) 15.92 (25.00) (9.08) 15.00 0.44 0.44
2017
688,460 921.6 799.0 (13.3) 154,332 19.57 187.03 206.60 18.00 0.43 1.01
2018
782,068 1,046.9 966.0 (7.7) 107,801 22.79 121.52 144.31 21.00 0.42 0.99
2019
716,145 958.7 858.0 (10.5) (49,862) 23.59 (90.34) (66.75) 23.00 0.42 0.42
2020
641,796 859.1 777.0 (9.6) (56,799) 16.73 (92.76) (76.03) 23.50 0.42 0.42
2021
992,898 1,329.1 1,280.0 (3.7) 368,651 13.86 479.64 493.50 23.75 0.39 0.98
2022
802,599 1,074.4 917.5 (14.6) (172,565) 24.57 (255.58) (231.01) 24.00 0.42 0.42
2023
675,387 904.1 785.0 (13.2) (109,287) 29.38 (175.68) (146.30) 26.00 0.44 0.44
2024
747,340 1,003.1 888.0 (11.5) 93,345 29.85 95.14 124.99 27.00 0.45 0.45
2025
634,324 926.2 841.0 (9.2) (44,994) 27.89 (89.13) (61.24) 28.00 0.45 0.45
1 Since the redemption of the Debenture Stock on 31 May 2016, the Company’s NAV and discount with debt at par or market value are identical because
there is no difference in the values of the remaining debt liabilities
A glossary of terms and explanations of alternative performance measures are included on pages 93-96
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
Historical record
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Corporate information
History
The Company was incorporated under the Companies
Acts 1862 to 1886 on 16 December 1887 with the name The
Trustees, Executors and Securities Insurance Corporation,
Limited. The name was changed in August 1917 to The
Trustees Corporation Limited, in April 1982 to TR Trustees
Corporation PLC, in October 1990 to TR Smaller Companies
Investment Trust PLC and in September 1997 to The
Henderson Smaller Companies Investment Trust plc.
Registered office
201 Bishopsgate
London EC2M 3AE
Service providers
Alternative Investment Fund Manager
Janus Henderson Fund Management UK Limited
201 Bishopsgate
London EC2M 3AE
Corporate Secretary
Janus Henderson Secretarial Services UK Limited
201 Bishopsgate
London EC2M 3AE
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1057
Email: web.queries@computershare.co.uk
Investors with share certificates (i.e. not those in
a share plan or ISA) can check their holdings at
www.investorcentre.co.uk
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Broker
Deutsche Numis
Deutsche Bank AG, London Branch
45 Gresham Street
London EC2V 7BF
Independent Auditor
Forvis Mazars LLP
30 Old Bailey
London EC4M 7AU
Financial calendar
Ex-dividend date 28 August 2025
Dividend record date 29 August 2025
Annual general meeting 7 October 2025
Final dividend payable 13 October 2025
Half-year results January 2026
Interim dividend payable March 2026
Information sources
For more information about the Company, visit the
website at www.hendersonsmallercompanies.com.
This includes factsheets, interviews, current information
on the Company and up-to-date share price and net
asset value details.
To sign up for expert insights about investment trusts,
updates from our fund managers as well as AGMs
please visit this page:
www.janushenderson.com/en-gb/investor/subscriptions
Follow the Janus Henderson Investment Trusts on
LinkedIn – Janus Henderson Investment Trusts, UK.
Investing
Shares can be purchased in the market via a
stockbroker or through share dealing platforms. They
can also be held through share plans, ISAs or pensions.
Links to various providers are included on the website.
Potential investors are reminded that the value of
investments and the income from them may go down
as well as up and investors may not receive the full
amount invested. Tax benefits may vary as a result
of statutory changes and their value will depend
on individual circumstances.
Governance
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Additional
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General Meeting
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Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting
(“AGM”) of The Henderson Smaller Companies
Investment Trust plc will be held at 11.30 am on Tuesday,
7 October 2025 at the offices of Janus Henderson
Investors, 201 Bishopsgate, London EC2M 3AE, for the
purpose of considering and, if thought fit, passing the
following resolutions:
Ordinary resolutions
1 To receive the Annual Report and the audited financial
statements for the year ended 31 May 2025.
2 To approve the Directors’ Remuneration Report for the
year ended 31 May 2025.
3 To approve a final dividend of 20.5p per ordinary share.
4 To re-appoint Penny Freer as a director of the
Company.
5 To re-appoint Kevin Carter as a director of the
Company.
6 To re-appoint Alexandra Mackesy as a director of the
Company.
7 To re-appoint Yen Mei Lim as a director of the
Company.
8 To re-appoint Michael Warren as a director of the
Company.
9 To re-appoint Forvis Mazars LLP as the statutory auditor
of the Company.
10 To authorise the Audit and Risk Committee to
determine the statutory auditor’s remuneration.
11 THAT the Company continue as an investment trust.
12 THAT in substitution for all existing authorities, the
directors be generally and unconditionally authorised
in accordance with s551 of the Companies Act 2006
(the “Act”) to exercise all powers of the Company to
allot relevant securities (within the meaning of s551
of the Act) up to an aggregate nominal amount of
£1,631,526 (or such other amount as shall be equivalent
to 10% of the Company’s issued ordinary share capital,
excluding treasury shares, at the date of the passing of
this resolution) for a period expiring (unless previously
renewed, varied or revoked by the Company in general
meeting) at the conclusion of the next AGM of the
Company after the passing of this resolution save that
the Company may before such expiry make an offer or
agreement which would or might require relevant
securities to be allotted after such expiry and the
directors may allot relevant securities in pursuance of
such an offer or agreement as if the authority conferred
hereby had not expired.
Special resolutions
13 THAT in substitution for all existing authorities and
subject to resolution 12 being passed, the directors
be empowered pursuant to s570 and s573 of the Act
to allot equity securities (within the meaning of s560
of the Act), and/or where such allotment constitutes
an allotment of equity securities by virtue of s560 of
the Act, for cash pursuant to the authority conferred
by resolution 12, as if s561 of the Act did not apply to
any such allotment and to sell relevant shares (within
the meaning of s560 of the Act) held by the Company
immediately before the sale as treasury shares (as
defined in s724 of the Act) for cash as if s561 of the Act
did not apply to any such sale.
This power shall be limited to:
(a) the allotment or sale of equity securities, whether
by way of a rights issue, open offer or otherwise in
favour of ordinary shareholders on the register of
members at such record date as the directors
may determine, where the equity securities
respectively attributable to the interests of all
ordinary shareholders are proportionate (or as
nearly as may be) to the respective numbers of
ordinary shares held by them (or are otherwise
allotted in accordance with the rights attaching
to such equity securities), subject to such
exclusions or other arrangements as the directors
may deem necessary or expedient in relation to
fractional entitlements or local or practical
problems arising under the laws of, or the
requirements of any regulatory body or stock
exchange in any territory or otherwise howsoever;
(b) the allotment or sale (otherwise than pursuant
to subparagraph (a) above) of equity securities
up to an aggregate nominal value of £1,631,526
(or such other amount as shall be equivalent to
10% of the issued ordinary share capital, excluding
treasury shares, at the date of the passing of the
resolution); and
(c) to the allotment or sale of equity securities at a
price of no less than the net asset value per share;
and shall expire at the earlier of the date falling 15 months
after the passing of this resolution or the conclusion of the
next AGM of the Company after the passing of this
resolution, save that the Company may before such expiry
make an offer or agreement which would or might require
equity securities to be allotted or sold after such expiry
and the directors may allot equity securities in pursuance
of such an offer or agreement as if the power conferred
hereby had not expired.
14 THAT in substitution for existing authorities, the
Company be generally and unconditionally authorised
in accordance with s694 of the Act to purchase (within
the meaning of s693 of the Act) the preference stock
units of £1 each in the capital of the Company (prior to
1 May 1999, the 4½ per cent cumulative preference
stock units of £1 each in the capital of the Company)
(the “Preference Stock”) pursuant to contracts arising
from acceptance of the offer to purchase Preference
Stock made by the Company on the terms described
in the circular to holders of ordinary shares and
Preference Stock dated 24 February 1999, and to
cancel such Preference Stock, such authority to expire
at the conclusion of the next AGM of the Company or,
if sooner, 15 months from the date of the passing of
this resolution.
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15 THAT in substitution for existing authorities, the Company
be generally and unconditionally authorised in
accordance with s701 of the Act to make market
purchases (within the meaning of s693 of the Act) of
ordinary shares in issue of 25p each, excluding treasury
shares, in the capital of the Company (“ordinary shares”),
on such terms and in such manner as the directors may
from time to time determine, provided that:
(a) the maximum number of ordinary shares that
may be purchased shall be 14.99% of the
Company’s issued ordinary share capital
(equivalent to 9,782,630 shares at the date of this
Notice) at the date of the passing of this resolution
excluding shares held in Treasury;
(b) the minimum price (exclusive of expenses) which
may be paid for an ordinary share is 25p, being
the nominal value per share;
(c) the maximum price (exclusive of expenses) which
may be paid for an ordinary share shall not
exceed the higher of:
(i) 105% of the average of the middle market
quotations for the shares as taken from the
London Stock Exchange Daily Official List for the
five business days preceding the date of
purchase; and
(ii) the higher of the last independent bid and the
highest current independent bid on the London
Stock Exchange;
(d) the authority hereby conferred will expire on the
earlier of the conclusion of the next AGM of the
Company after the passing of this resolution or
15 months from the date of the passing of this
resolution, unless such authority is renewed prior
to such time;
(e) the Company may make a contract to purchase
ordinary shares under the authority hereby
conferred prior to the expiry of such authority
which will or may be executed wholly or partly
after the expiration of such authority and may
make a purchase of ordinary shares pursuant to
such contract; and
(f) any shares so purchased shall be cancelled or, in
accordance with the provisions of the Act, if the
directors so determine, be held, sold, transferred
or otherwise dealt with as treasury shares.
16 THAT a general meeting other than an AGM may be
called on not less than 14 clear days’ notice, such
authority to expire at the conclusion of the AGM of the
Company in 2026.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
30 July 2025
Registered office:
201 Bishopsgate, London EC2M 3AE
MOORGATE
BISHOPSGATE
PRIM ROSE ST.
WORSH IP STREET
201 Bishopsgate
London EC2M 3AE
LIVERPOOL
STREET
STATION
APPO LD ST.
SUN STREET
BROADGATE
CIRCLE
FINS BURY PAVE.
EARL ST.
WORSHIP STREET
ROPEM AKER ST REET
LIVERPOOL ST
LONDON WALL
WILSON ST.
BISHOPSGATE
GREAT EASTERN ST.
COMMERCIAL ST.
SHOREDITCH
HOUNDSDITCH
AL DGATE
MIDDLESEX
STREET
CHISWELL STR EET
SOUTH PLACE
ELDON ST.
FINSBU RY
CIRCUS
CITY ROAD
FINS BURY SQ .
FINS BURY SQ.
CLIF TON ST.
SPITALFIELDS
MARKET
FOLGATE ST.
NORTON
MIDDLESEX ST.
BRUS HFIELD STREE T
APPO LD ST.
The 2025 AGM will be held at 201 Bishopsgate,
London EC2M 3AE. It is a few minutes’ walk from
Liverpool Street Station and from Moorgate Station.
AGM venue
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AGM Notice
Explanation of AGM resolutions
The information set out below is an explanation of the
business to be considered at the 2025 Annual General
Meeting (the “AGM”). You are welcome to join the AGM
in person or by conferencing software Zoom. If you
wish to join by videoconference, please visit
www.janushenderson.com/hsl-agm to register.
Resolutions 1 to 12 are proposed as ordinary resolutions.
This means that for each of those resolutions to be
passed, more than half of the votes cast must be in favour
of the resolution. Resolutions 13 to 16 are proposed as
special resolutions. This means that for each of those
resolutions to be passed, at least three quarters of the
votes cast must be in favour of the resolution.
Resolution 1: Annual Report and audited
financial statements
The directors are required to lay before the AGM the
annual report and audited financial statements of the
Company for the financial year ended 31 May 2025 (the
“Annual Report”). Shareholders will be given an opportunity
at the AGM to ask questions and will be invited to receive
the Annual Report.
Resolution 2: Approval of the Directors’
Remuneration Report
Shareholders are asked to approve the Directors’
Remuneration Report for the year ended 31 May 2025
(see pages 59-61 of the Annual Report). The vote on the
Remuneration Report is advisory and does not affect the
remuneration payable to any individual director, though
the Board will take feedback from shareholders and
incorporate this into any future remuneration discussions.
Resolution 3: Final Dividend
The directors propose a final dividend of 20.5p per
ordinary share. The payment of a final dividend is subject
to the approval of shareholders, although the scope to
pay a lesser amount would be restricted by the
Company’s status as an investment trust. If approved, the
dividend will be paid on 13 October 2025 to shareholders
on the register on 29 August 2025. The shares will be
quoted ex-dividend on 28 August 2025.
Resolutions 4 to 8: Re-appointment of
directors
Under the AIC Code of Corporate Governance, as
endorsed by the Financial Reporting Council, directors are
expected to stand for re-appointment by shareholders
annually. At its meeting in April 2025, the Nomination
Committee reviewed the performance, contribution
and commitment of the members of the Board and
concluded that each director standing for appointment
and re-appointment brought extensive, current and
relevant business experience that allows them to
contribute effectively to the leadership of the Company,
in terms of both performance and time commitment.
The biographies of each director, including their skills,
experience and qualifications relevant for the sustainable
success of the Company are set out on pages 43-44 of the
Annual Report. All directors standing for re-appointment by
shareholders held office throughout the year under review.
Resolutions 9 and 10: Statutory auditor
In accordance with s489 and s492 Companies Act 2006
(the “Act”), shareholders are required to approve the
appointment of the Company’s auditor each year and
give directors the authority to determine the auditor’s
remuneration. Resolution 9 relates to their appointment
and resolution 10 relates to the determination of Forvis
Mazars LLP’s remuneration. In accordance with sections
489 and 492 of the Act, shareholders are required to
approve the appointment of the Company’s auditor each
year and give authority to the directors to determine their
remuneration. The Board is pleased to ask shareholders to
re-appoint Forvis Mazars LLP as the Company’s auditor for
what would be their fourth year in office.
Resolution 11: Continuation
Since 2004, the Board has given shareholders the
opportunity to vote on whether the Company should
continue as an investment trust every three years. Please
see the Chair’s Statement on page 10, where the Chair
explains why shareholders are asked to support
continuation of the Company.
Resolutions 12 and 13: Authority to issue new
shares and disapply pre-emption rights
At the 2024 AGM the directors were granted authority to
allot a limited number of new ordinary shares. No shares
have been allotted under this authority, which will expire at
the forthcoming AGM. The directors are seeking the power
to allot new ordinary shares for cash on a non pre-
emptive basis. Renewal of the resolutions, if passed, will
give the directors authority to allot ordinary shares for
cash on a non pre-emptive basis up to an aggregate
nominal amount of £1,631,526 (or such other amount
as shall be equivalent to 10% of the issued ordinary share
capital at the date of the passing of the resolution).
The directors intend to use the authority to issue
ordinary shares only if and when they believe it to be
advantageous to the Company’s existing shareholders to
do so. In particular, shares, whether new ordinary shares
or ordinary shares held in treasury, will never be allotted or
sold other than at a premium to the net asset value per
ordinary share. The authority will lapse unless renewed at
the earlier of 15 months from the passing of this resolution
or the conclusion of the next AGM of the Company.
Resolution 14: Preference Stock
In a circular to shareholders and preference stockholders
dated 24 February 1999, the Company proposed to offer
to purchase for cancellation all the Company’s
outstanding preference stock at £1 per unit, being the par
value of the preference stock units. At an extraordinary
general meeting of the Company held on 22 March 1999,
these proposals, together with the related changes to the
articles of association, were approved. At 31 May 2025,
4,257 preference stock units of £1 each were still in issue.
It is intended that the offer will remain open until such time
as all the preference stock has been acquired. This
resolution renews for a further year the Company’s
powers to purchase for cancellation the outstanding
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preference stock. This authority will expire at the
conclusion of the next AGM of the Company or if sooner,
15 months from the date of the passing of this resolution.
Resolution 15: Repurchase of the Company’s
ordinary shares
At a general meeting on 1 July 2025, the directors were
granted authority to repurchase 10,102,879 ordinary
shares for cancellation or to be held in treasury. A total
of 2,136,422 shares were bought back under this authority
as at 28 July 2025. The Company’s articles of association
permit the Company to purchase its own shares and to
fund such purchases from its accumulated realised
capital reserves. The Board considers that the Company
should continue to have authority to buy back its own
ordinary shares to be held in treasury or for cancellation.
Resolution 15 authorises the Company to make market
purchases for cancellation of up to 14.99% of the ordinary
shares in issue at the date of the AGM (equivalent to
9,782,630 ordinary shares with a nominal value of
£2,445,657 at 28 July 2025).
Under the UK Listing Rules of the Financial Conduct
Authority, this is the maximum percentage of its equity
share capital that a company may purchase through the
market pursuant to such authority. The directors believe
that buying back the Company’s own shares in the
market, at appropriate times and prices, is in the best
interests of shareholders generally. The Company will
make purchases within guidelines set from time to time by
the Board and if or when market conditions are suitable,
with the aim of maximising the benefit to the
remaining shareholders.
The directors will not use this authority unless to do so
would result in an increase in the net asset value per
ordinary share. The minimum price (exclusive of
expenses) which may be paid for an ordinary share is 25p,
being the nominal value per share. The authority will expire
at the earlier of the date falling 15 months after the
passing of this resolution or the conclusion of the next
AGM of the Company.
Resolution 16: Notice of General Meetings
The Act and the Company’s articles of association provide
that all general meetings other than AGMs can be
convened on 14 days’ notice. However, one of the
requirements of the Shareholder Rights Directive is that all
general meetings must be held on 21 clear days’ notice,
unless shareholders agree to a shorter notice period. The
Board is of the view that it is in the Company’s interests to
have a shorter notice period which complies with the
provisions of the Act, and the Company’s articles allow all
general meetings (other than an AGM) to be called on 14
clear days’ notice. The passing of Resolution 16 would
constitute shareholders’ agreement for the purposes of
the Shareholder Rights Directive (for which agreement is
required annually) and would therefore preserve the
Company’s ability to call general meetings other than an
AGM on 14 clear days’ notice. The Board would utilise this
authority to provide flexibility only when merited and
would not use it as a matter of routine. The Board intends
to seek a renewal of such authority at subsequent AGMs.
Notes to the Notice of Annual General
Meeting (the “AGM”)
1. Voting record date
Only those shareholders registered in the register of
members of the Company at close of business on Friday,
3 October 2025 (the “voting record date”) shall be entitled
to vote at the AGM in respect of the number of voting
rights registered in their name at that time. Changes to
entries on the register of members after that time shall
be disregarded in determining the rights of any person
to attend, speak and vote at the AGM.
If the AGM is adjourned for no more than 48 hours after
the original time, the same voting record date will also
apply for the purpose of determining the entitlement of
members to attend, speak and vote (and for the purpose
of determining the number of votes they may cast) at the
adjourned meeting. If the AGM is adjourned for more than
48 hours then the voting record date will be close of
business on the day which is two days (excluding non-
working days) before the day of the adjourned meeting
or, if the Company gives notice of the adjourned meeting,
at any time specified in that notice. In the case of joint
holders of a voting right, the vote of the senior who
tenders a vote shall be accepted to the exclusion of
the votes of the other joint holders and, for this purpose,
seniority shall be determined by the order in which the
names stand in the register of members in respect of
the joint holding.
2. Right to attend and vote
Holders of ordinary shares are entitled to attend and vote
at the AGM or at any adjournment(s) thereof. On a poll
vote, each ordinary shareholder has one vote for each
share held. On a vote on a show of hands, each ordinary
shareholder or proxy has one vote.
If a proxy is appointed by more than one member and all
such members have instructed the proxy to vote in the
same way, the proxy will only be entitled on a show of
hands to vote ‘for’ or ‘against’ as applicable. If a proxy is
appointed by more than one member, but such members
have given different voting instructions, the proxy may on
a show of hands vote both ‘for’ and ‘against’ in order to
reflect the different voting instructions.
On a poll all or any of the voting rights of the members
may be exercised by one or more duly appointed proxies.
However, where a member appoints more than one proxy,
s285(4) of the Companies Act 2006 (the “Act”) does not
authorise the exercise by the proxies taken together
of more extensive voting rights than could be exercised
by the member in person.
Corporate representatives are entitled to attend and vote
on behalf of the corporate member in accordance with
s323 of the Act. Shareholders are invited to send their
letters of corporate representation in advance of the AGM
to itsecretariat@janushenderson.com.
This Notice is available to holders of preference stock for
information only. Preference stockholders are not entitled
to attend or vote at the AGM.
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3. Right to appoint proxies
Pursuant to s324 of the Act, a member entitled to attend
and vote at the AGM may appoint more than one proxy,
provided that each proxy is appointed to exercise the
rights attached to shares held by him or her. A proxy
need not be a member of the Company. A form of proxy
is provided for every shareholder directly on the register
of members maintained by Computershare. The
completion of the form of proxy or any CREST proxy
instruction will not preclude a shareholder from
attending.
Persons nominated to receive information rights have
been sent this Notice of AGM and are hereby informed,
in accordance with s149(2) of the Act, that they may
have the right under an agreement with the registered
member by whom they are nominated to be appointed,
or to have someone else appointed, as a proxy for this
AGM. If they have no such right or do not wish to exercise
it, they may have a right under such an agreement to
give instructions to the member as to the exercise of
voting rights. Nominated persons should contact the
registered member by whom they were nominated in
respect of these arrangements. The statement of rights
of shareholders for the appointment of proxies does not
apply to nominated persons.
If you are an institutional investor you may also be able to
appoint a proxy electronically via the Proxymity platform,
a process which has been agreed by the Company and
approved by the Registrar. For further information
regarding Proxymity, please go to www.proxymity.io.
Your proxy must be lodged by 11.30 am on Friday,
3 October 2025 to be considered valid.
Before you can appoint a proxy via this process you will
need to have agreed to Proxymity’s associated terms and
conditions. It is important that you read these carefully as
you will be bound by them and they will govern the
electronic appointment of your proxy.
4. Receipt and termination of proxies
To be valid, the enclosed Form of Proxy must be
received by the Company’s Registrar (Computershare
Investor Services PLC, The Pavilions, Bridgwater Road,
Bristol BS99 6ZY) before 11.30 am on Friday, 3 October
2025 (or, in the case of an adjournment, no later than
48 hours before the time fixed for the holding of the
adjourned meeting).
As an alternative to completing and returning the printed
Form of Proxy, you may submit your proxy electronically by
accessing www.investorcentre.co.uk/eproxy. For security
purposes, you will be asked to enter the control number,
your shareholder reference number (“SRN”) and personal
identification number (“PIN”) to validate the submission of
your proxy online. The control number and members’
individual SRN and PIN numbers are shown on the Form
of Proxy.
A member may terminate a proxy’s authority at any time
before the commencement of the Meeting. Termination
must be provided in writing and submitted to the
Company’s Registrar.
In accordance with the Company’s Articles of Association,
in determining the deadline for receipt of proxies, no
account shall be taken of any part of a day that is not a
working day.
5. Electronic receipt of proxies
CREST members who wish to appoint a proxy or proxies
by following the CREST electronic proxy appointment
service may do so for the AGM and any adjournment(s)
thereof by using the procedures described in the CREST
manual, which is available to download from the
Euroclear website www.euroclear.com. CREST personal
members or other CREST sponsored members, and those
CREST members who have appointed a voting service
provider(s), should refer to their CREST sponsor or voting
service provider(s), who will be able to take the
appropriate action on their behalf.
In order for a proxy appointment made by means of
CREST to be valid, the appropriate CREST message (a
“CREST Proxy Instruction”) must be properly authenticated
in accordance with Euroclear UK & Ireland Limited’s
specifications and must contain the information required
for such instructions, as described in the CREST manual.
The message must be transmitted so as to be received by
the issuer’s agent (ID 3RA50) by the latest time for receipt
of proxy appointments specified in note 4 above. For this
purpose, the time of receipt will be taken to be the time
(as determined by the timestamp applied to the message
by the CREST applications host) from which the issuer’s
agent is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST. After this time, any
change of instructions to proxies appointed through
CREST should be communicated to the appointee through
other means.
CREST members and, where applicable, their CREST
sponsors or voting service provider(s) should note that
Euroclear UK & Ireland Limited does not make available
special procedures in CREST for any particular messages.
Normal system timings and limitations will therefore apply
in relation to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take (or,
if the CREST member is a CREST personal member or
sponsored member or has appointed a voting service
provider(s), to procure that his CREST sponsor or voting
service provider(s) take(s)) such action as shall be
necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this
connection, CREST sponsors or voting service providers
are referred, in particular, to those sections of the CREST
manual concerning practical limitations of the CREST
system and timings.
The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation
35(5) of the Uncertificated Securities Regulations 2001.
6. Communication with the Company
Members may not use any electronic address provided
either in the Notice or in any related documents (including
the form of proxy) to communicate with the Company for
any purpose other than those expressly stated.
Notice of Annual General Meeting continued
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7. Questions at the AGM
S319A of the Act requires the directors to answer any
question raised at the AGM which relates to the business
of the AGM, although no answer need be given:
(a) if to do so would interfere unduly with the
preparation of the AGM or involve disclosure of
confidential information;
(b) if the answer has already been given on the
Company’s website; or
(c) if it is undesirable in the best interests of the
Company or the good order of the AGM that the
question be answered.
8. Members’ statement of audit concerns
Members satisfying the thresholds in s527 of the Act can
require the Company to publish a statement on its
website setting out any matter relating to:
(a) the audit of the Company’s accounts (including the
Auditor’s Report and the conduct of the audit) that
are to be laid before the AGM; or
(b) any circumstances connected with an auditor of the
Company ceasing to hold office since the last AGM,
that the members propose to raise at the AGM.
The Company cannot require the members requesting
the publication to pay its expenses. Any statement placed
on the website must also be sent to the Company’s
auditor no later than the time at which it makes its
statement available on the website. The business which
may be dealt with at the AGM includes any statement that
the Company has been required to publish on its website.
9. Total voting rights
As at 28 July 2025 (being the last practicable date prior
to the publication of this Notice) the Company’s issued
ordinary share capital consisted of 74,385,131 ordinary
shares of 25p each. The total number of voting rights on
that date was 65,261,042 as 9,124,089 shares were held in
Treasury. Each share carries one vote, other than those
held in Treasury which do not carry any voting rights.
10. Documents available for inspection
The directors’ letters of appointment may be inspected at
the registered office of the Company, 201 Bishopsgate,
London EC2M 3AE during normal business hours on any
day (Saturdays, Sundays and public holidays excepted)
and will be available at the AGM from 15 minutes prior to
its commencement until its conclusion. No director has
a contract of service with the Company. If shareholders
unable to attend the AGM physically wish to inspect
the directors’ letters of appointment, please contact the
corporate secretary at itsecretariat@janushenderson.com.
11. Members’ power to circulate resolutions
Under s338 and s338A of the Act, members meeting the
threshold requirements in those sections have the right to
require the Company to:
(a) give, to members of the Company entitled to receive
notice of the meeting, notice of a resolution which
may properly be moved and is intended to be
moved at the meeting; and/or
(b) include in the business to be dealt with at the
meeting any matter (other than a proposed
resolution) which may be properly included in the
business. A resolution may properly be moved or a
matter may properly be included in the business
unless (a) (in the case of a resolution only) it would,
if passed, be ineffective (whether by reason of
inconsistency with any enactment or the Company’s
constitution or otherwise), (b) it is defamatory of any
person, or (c) it is frivolous or vexatious.
Such a request must: identify the resolution of which
notice is to be given or the matter to be included in the
business; be signed by the person or persons making it;
state the full name(s) and address of the person making
it; provide evidence of the number of shares held; be
received by the Company not later than six clear weeks
before the meeting; and (in the case of a matter to be
included in the business only) be accompanied by a
statement setting out the grounds for the request.
The request may be made in hard copy to the Corporate
Secretary, The Henderson Smaller Companies Investment
Trust plc at 201 Bishopsgate, London EC2M 3AE or in
electronic form to itsecretariat@janushenderson.com.
12. Website
The Company’s Annual Report which contains
this Notice of Meeting is available at
www.hendersonsmallercompanies.com, together
with these explanatory notes.
Governance
Financial
Statements
Additional
Information AGM Notice
106
The Henderson Smaller Companies Investment Trust plc Annual Report 2025
Strategic
Report
AGM Notice
Contents
Strategic Report
1 About the Company
2 At a glance
3 Why invest in UK smaller companies?
4 Approach to UK smaller companies
5 Manager: Janus Henderson Investors
6 Performance summary
8 Chair’s Statement
12 Fund Managers’ Report
19 Portfolio
22 Case studies
24 Business model
27 Principal risks and uncertainties
29 Measuring the Company’s performance
31 Section 172 Statement
36 Board decision making
37 ESG Report
41 Viability Statement
Governance
43 Directors and Fund Managers
46 Corporate Governance Report
53 Audit and Risk Committee Report
56 Management Engagement Committee
Report
57 Nominations Committee Report
59 Directors’ Remuneration Report
62 Directors’ Report
64 Statement of Directors’ Responsibilities
Financial Statements
66 Independent Auditor’s Report
72 Statement of Comprehensive Income
73 Statement of Changes in Equity
74 Balance Sheet
75 Statement of Cash Flow
76 Notes to the Financial Statements
Additional Information
93 Glossary
95 Alternative performance measures
97 General shareholder information
98 Historical record
99 Corporate information
AGM Notice
100 Notice of Annual General Meeting
www.hendersonsmallercompanies.com
Annual General
Meeting (AGM)
The Board welcomes you
to attend the AGM at
11.30 am on 7 October 2025
either in person or online.
Scan the QR code for
more details and to register
your attendance.
Virtual investor
presentation
In addition to the AGM, the
Board is holding a virtual
investor presentation at
12.00 noon on 17 September
2025. This will include a Q&A
session with the Chair and
Fund Manager. Scan the QR
code to secure your place.
Keeping in touch
Scan the QR code to receive the latest Company updates,
market insights, event invitations and more.
Please send any general enquiries about the Company to
itsecretariat@janushenderson.com.
Warning to shareholders
Many companies are aware that their shareholders have received unsolicited phone calls or correspondence
concerning investment matters. These are typically from overseas based ‘brokers’ who target UK shareholders
offering to sell them what often turn out to be worthless or high-risk shares in US or UK investments. They can be
persistent and extremely persuasive. Shareholders are therefore advised to be wary of any unsolicited advice,
offers to buy shares at a discount or offers of free company reports. Please note that it is unlikely that either the
Company or the Company’s registrar, Computershare, would make unsolicited telephone calls to shareholders.
Any such calls would relate only to official documentation already circulated to shareholders and never in respect
of investment ‘advice’. If you are in any doubt about the veracity of an unsolicited phone call, please call the
Corporate Secretary at the number provided on page 99. You can also check the FCA Warning List at
#BeScamSmart – www.fca.org.uk/scamsmart.
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.hendersonsmallercompanies.com
The Henderson Smaller Companies Investment Trust plc
Registered as an investment company in England and Wales
Registered office
201 Bishopsgate,
London EC2M 3AE
ISIN/SEDOL
Ordinary shares:
GB0009065060 / 0906506
Companies House
registration number
00025526
London Stock Exchange
(TIDM) Code
HSL
Global Intermediary
Identification Number (GIIN)
WZD8S7.99999.SL.826
Legal Entity Identifier (LEI)
213800NE2NCQ67M2M998
Designed by Instinctif. Typeset by 2112 Communications, London.
Printed by Printed by Pureprint, Sussex.
JHI9226/25
This report is printed on Revive 100 Silk
manufactured from FSC® Recycled certified
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The pulp used in this product is bleached using
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This product is made of material from
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Shareholder
Communication
Awards
2024
JHI9226/25
The Henderson Smaller Companies
Investment Trust plc
Investing in the growth potential of smaller UK companies
Annual Report 2025
The Henderson Smaller Companies Investment Trust plc – Annual Report 2025