Annual Report and
Financial Statements
The Scottish American
Investment Company P.L.C.
(SAINTS)
Income again and again
31 December 2024
Notes
None of the views expressed in this document
should be construed as advice to buy or sell a
particular investment.
Investment trusts are UK public listed companies
and as such comply with the requirements of the
Financial Conduct Authority (‘FCA’). They are
notauthorised or regulated by the FCA.
SAINTS currently conducts its affairs, and intends
to continue to conduct its affairs, so that the
Company’s ordinary shares can qualify to be
considered as a mainstream investment product
and can be recommended by Independent
Financial Advisers to ordinary retail investors in
accordance with the rules of the FCA in relation
tonon‑mainstream investment products.
This document is important and requires your
immediate attention.
Investor disclosure document
The UK Alternative Investment Fund Managers Regulations requires
certain information to be made available to investors prior to their
investment in the Company. The Company’s Investor Disclosure
Document is available for viewing at saints-it.com.
If you reside in the UK and you are in any doubt as to
the action you should take, you should consult your
stockbroker, bank manager, solicitor, accountant
or other independent financial adviser authorised
under the Financial Services and Markets Act 2000
immediately. If you are outside the UK, you should
consult an appropriately authorised financial adviser.
If you have sold or otherwise transferred all of your
ordinary shares in The Scottish American Investment
Company P.L.C., please forward this document,
together with any accompanying documents,
butnotyour personalised Form of Proxy, as soon
as possible to the purchaser or transferee, or to the
stockbroker, bank or other agent through whom
thesale or transfer was or is being effected for
delivery to the purchaser or transferee.
The Scottish American Investment Company P.L.C.
01
Contents
Introduction
Financial highlights 02
Strategic report
Chairman’s statement 05
Investment approach 10
Portfolio managers 14
Managers’ review 15
Performance attribution 24
Distribution of portfolio 25
Review of investments 26
List of investments 30
Property portfolio 34
One year summary 36
Five year summary 38
Ten year record 40
Environmental, social and governance 42
Business review 43
Governance report
Directors and management 55
Directors’ report 59
Corporate governance report 64
Audit committee report 72
Directors’ remuneration report 75
Statement of Directors’ responsibilities 78
Financial report
Independent Auditor’s report 81
Income statement 88
Balance sheet 89
Statement of changes in equity 90
Cash flow statement 91
Notes to the Financial Statements 92
Shareholder information
Notice of Annual General Meeting 109
Further shareholder information 114
Third party data provider disclaimer 116
Sustainable Finance Disclosure Regulation 117
Communicating with shareholders 119
Insights 121
Glossary of terms and alternative performance measures 122
Introduction
Annual Report and Financial Statements 2024
02
Financial highlights
Year to 31 December 2024
Dividend
14.875p
Yield
3.0%
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 116.
* Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
Past performance is not a guide to future performance.
SAINTS aims to deliver real
dividendgrowth by increasing
capitaland growing income.
Share price total return*
(figures rebased to 100 at 31 December 2014)
20242014 2016 2019 2021 20232015 20182017 2020 2022
● Share price total return*
50
300
150
200
100
250
Dividend versus inflation
(figures rebased to 100 at 31 December 2014)
100
110
120
130
140
150
20242014 2016 2019 2021 20232015 20182017 2020 2022
● SAINTS dividend ● CPI
100
150
130
110
140
120
Premium/(discount)*
(figures plotted at month end dates)
● Premium/(discount) (after deducting borrowings at fair value)*
20242014 2015 2016 2017 2018 2019 2022 20232020 2021
● Premium/(discount)* (after deducting borrowings at book value)
(15%)
10%
(10%)
(5%)
5%
0%
The Scottish American Investment Company P.L.C.
03
Net dividend paid per share
Source: The Scottish American Investment Company P.L.C. Annual Reports, Baillie Gifford. Dividends are shown net of withholding taxes since 1973, when
Advanced Corporation Tax was first introduced in the UK. Dividends from 1965‑1973 are shown net of the 45% Corporation Tax introduced in the Financial
Act of 1965. Dividends prior to 1965 are shown as if the Corporation Tax had existed before 1965, on a comparable basis. Inflation data sourced from the
Office for National Statistics.
0.01
0.02
0.04
0.08
0.16
0.32
0.64
1.28
2.56
5.12
10.24
SAINTS dividend (pence)
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1969
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
Annual dividend (p)
World War II
Suez
crisis
Cuban Missile
crisis
OPEC
crisis
IMF
crisis
EM
crisis
Dot Com
bubble
Great Financial
crisis
Trump
Trade Wars/
Brexit
Covid
Pandemic
Recession
Annualised growth:
Since 1938 Since 2003
UK CPI 5% 2%
SAINTS DPS 8% 5%
Difference (ahead of inflation) 3% 3%
2024 dividend (14.875p)
*
†
Long-term dividend growth
* 1938: SAINTS last dividend reduction (US dollar repatriation for WW2).
†
2003: Baillie Gifford appointed, with effect from the 1st of January 2004.
This strategic report, which
includes pages 5 to 53 and
incorporates the Chairman’s
statement, has been prepared in
accordance with the Companies
Act 2006.
Strategic
report
The Scottish American Investment Company P.L.C.
05
Chairman’s
statement
SAINTS’ objective is to deliver real dividend growth
by increasing capital and growing income. The
Board is recommending a final dividend which will
bring the total dividends for the year to 14.875p
per share, an increase of 5.5% over the previous
year. The Company continues to meet its objective
of growing dividends ahead of inflation over the
long term, and the recommended dividend will also
extend the Company’s record of raising its dividend
to fifty one consecutive years.
However, despite encouraging income growth and
SAINTS’ Net Asset Value reaching record levels
during 2024, total returns have not kept up with the
market and a growing discount has compounded
the underperformance of the share price. The
Board takes the widening of the discount seriously
and embarked on a programme of share buy backs
in2024.
The Board notes the increased focus on the role
of investment trusts and their boards. It is entirely
appropriate for shareholders to focus on both long
term performance and the relationship between
share prices and NAV, which can present both a
risk and an opportunity. Independent directors are
there to act in the best interests of all shareholders,
independent of the preferences of incumbent or
potential managers, and to consider whether their
trust’s investment objectives remain relevant and are
being met. All of SAINTS’ Directors are independent.
Lord Macpherson
ofEarl’s Court
Chairman
Appointed to
theBoard in 2016
and as Chairman
in2022
Strategic report
Annual Report and Financial Statements 2024
06
It is the Board’s belief that in the case of SAINTS
the demand for an income which grows ahead of
inflation remains at the core of its shareholders’
requirements, and it considers that SAINTS is well
placed reliably to deliver on this objective in the
future as it has done in the past. The Board regularly
reviews and continues to have confidence in the
Company’s underlying investment strategy and
in its managers, whilst maintaining a sharp focus
on the operational performance of the Company’s
holdings and on the robustness and suitability
of the managers’ investment process. The Board
also recognises the importance of Baillie Gifford’s
scale, resources and stability as a partnership, and
the close alignment of the Company’s and Baillie
Gifford’s focus on the long term.
Overview
2024 has seen further remarkable progress from
investment markets, led by a small number of very
large companies in the US, which have dominated
both earnings growth and market performance.
Markets have also been supported by a generally
benign economic backdrop, with the prospect of
continuing economic growth, in the US in particular,
and moderating interest rates.
When the biggest companies in the world index
perform strongly and are concentrated in the
technology sector, and when the most cyclical
companies also perform well, life is challenging
for portfolios with a focus on high quality and
predictably cash generative businesses. Last year’s
pattern of performance is unusual, despite the fact
that it is a continuation of a phase which began in
2023. And, as last year, the companies which have
dominated the market are a handful of very large
and generally low yielding technology companies in
the US.
This is not a backdrop which has favoured the
total return performance of your Company.
SAINTS’ emphasis on steady earnings growth
and dependability has led to continued strong
operational performance and helped revenues to
grow ahead of inflation, but NAV performance,
though positive, has been disappointing relative to
the market. There are two principal reasons that
SAINTS’ NAV performance has lagged. First, our
emphasis on income, and on dependability and
reliability, has led us to avoid many AI related stocks
and also many cyclical stocks and sectors which
have performed well this year as markets have
become more optimistic. In contrast, the market
has come to the view that, amidst the uncertainty
and strategic ambiguity of the new U.S. Presidency,
those technology companies which are currently
delivering strong growth are the place to be
invested. Secondly, SAINTS also invests in asset
classes other than equities, principally property
and bonds, which bring advantages in terms of
diversification and income resilience but have not
kept up with equities in a period of high interest
rates. However, there are signs that the domestic
property market has turned the corner with capital
values rising in the second half of the year.
In this context, it is worth emphasising that the
Board remains committed to delivering a dividend
which increases ahead of inflation over time,
and which is supported by revenues and revenue
growth. The nature of the Manager’s approach
to investing in equities flows from this, as does
SAINTS’ investments in other asset classes including
property. The Board remains confident in this
approach, and we also believe that the property
allocation in particular is well fitted to supporting
SAINTS’ objectives. Our investment in property
remains modest at just over 9 per cent of our asset
value but, because of the higher yield available
and the nature of many of the leases, provides
substantial support to SAINTS’ current dividend, as
well as an element of income growth. In particular,
the high proportion of properties which have
fixed rent increases or rent increases which are
contractually linked to inflation, together with the
quality of the tenants and an average lease length of
over fifteen years, provide considerable comfort. We
understand that some shareholders would prefer to
have an all equity portfolio, but believe that others
appreciate the helpful impact on SAINTS’ revenues,
the lack of exchange rate risk and the good long
term record of our property managers, OLIM.
Against a backdrop of widening of discounts across
the investment trust sector, SAINTS’ share price
has not kept pace with its NAV over the year. To
help support SAINTS’ share price, the Board has
selectively bought back shares at levels which have
also enhanced NAV. Factors affecting the discount
and demand for the Company’s shares are likely to
have included both performance and the availability
of alternative investments such as gilts with higher
yields or trusts with higher, manufactured dividends.
The Board is confident that the advantages of
SAINTS’ approach will again come to the fore in
The Scottish American Investment Company P.L.C.
07
other market environments when falling capital
values are likely to lead either to a reduction in
manufactured dividends based on net asset value
or a need to sell more assets at lower prices to
maintain or grow distributions. SAINTS has traded at
a premium for most of the last decade, during which
time it issued many more shares than it has so far
bought back, and the Board remains confident that
the discount is cyclical rather than structural.
Ultimately though, it is the underlying growth and
the growth prospects of SAINTS’ holdings which
will be of most importance in returning SAINTS’
shares to the premium at which they have typically
stood in recent years. And here the Managers’
Review (on pages 15 to 23) tells a positive story. The
Managers will continue to focus on the encouraging
operational progress of SAINTS’ holdings, and to
emphasise dependability and reliability as well as
growth potential. This approach has stood the test of
time, and both the Board and the managers remain
confident that it will enable SAINTS to continue to
deliver on its objectives in the future.
Given the long‑term nature of the Company’s
objectives, it is worth emphasising both SAINTS’
successful record of raising its dividend ahead of
inflation over the long term, and the strong total
returns it has delivered. In particular, the Board and
the Managers are pleased that 2024 marked the fifty
first successive year of dividend growth for SAINTS’
shareholders.
Dividend and Inflation
The Board recommends a final dividend of 4.175p
which will take the full year dividend to 14.875p
per share, 5.5% higher than the 2023 dividend
of 14.10p. This year’s increase is 3% ahead of the
annual rate of inflation of 2.5% as measured by CPI
over 2024.
It remains the Company’s objective to deliver real
dividend growth over the long term. Since 1938,
when SAINTS last reduced its dividend, the Company
has delivered dividends that have not only been
resilient through thick and thin, but have also grown
by more than 3% a year ahead of inflation. And
since the end of 2003, when the Board of SAINTS
appointed Baillie Gifford as managers, the Company
has continued this track record of resilient dividend
growth: over this period the growth in SAINTS’
dividend has also beaten inflation by 3% a year.
Revenues
Earnings per share grew to 14.50p over the year,
an increase of some 7.6% over the year, and
investment income has risen to £32.4m. Operational
performance of the holdings has been generally
encouraging, and currency movements have also
been helpful.
Equity income has risen by some 11%, helped by
generally strong growth in ordinary dividends, a
more normal level of special dividends (following a
drop in special dividends last year) and an increased
allocation to infrastructure equities.
Property income has risen significantly, reflecting
the welcome addition of the M23 Pease Pottage
motorway service area to the portfolio (which was
mentioned in my statement last year but which was
not completed until after the 2023 year end), as well
as other transactions and further rental increases.
Bond income, on the other hand has fallen, as
the bulk of SAINTS’ bonds were sold to fund the
additions to property.
Both managers (Baillie Gifford and, for the Company’s
property investments, OLIM) continue to focus on
supporting the dependability and the future growth of
the Company’s dividend in line with its objective.
Total Return Performance
SAINTS’ NAV return was positive over the year, and
the net asset value total return (capital and income
with borrowings at fair) was 6.1%. However, for the
reasons summarised above, SAINTS’ returns fell short
of those from global equities (as measured by the
total of return of the FTSE All‑World Index in sterling
terms) which returned 19.8% over 2024. In addition,
as also mentioned above, SAINTS’ share price return
has, in common with investment trusts generally,
been affected by a broadening of discounts, and the
share price return was ‑4.2%. SAINTS’ performance
over the year is discussed in more detail in the
Managers’ review on pages 19 and 20.
The Managers and your Board have a long‑term
perspective and we would therefore encourage
shareholders to assess your Company’s performance
over the long term. Over the last ten years SAINTS
has delivered a NAV return of 8.6% per annum,
which is strong in absolute terms.
Strategic report
Annual Report and Financial Statements 2024
08
In addition, SAINTS’ NAV total return remains well
ahead of its sector’s return of 4.7% per annum over
ten years and, despite the recent broadening of
the discount, SAINTS’ share price total return also
remains ahead of the sector over ten years.
However, due to recent underperformance, SAINTS’
NAV return is now behind that of the market as
measured by the Company’s benchmark which
has returned 9.6% pa over the last ten years.
Furthermore, the broadening of the discount has
meant that SAINTS’ share price total return is
further behind at 7.2% pa. Whilst these figures are
disappointing in relative terms, it is worth bearing
two things in mind. Firstly, SAINTS has an income
approach, both in terms of its primary objective
and the way its assets are deployed to meet that
objective. And secondly, we are viewing these
figures after a highly unusual period in markets.
Over the last ten years, we believe that SAINTS’
equities have performed well given SAINTS’ income
approach, and SAINTS’ other principal allocation to
property has also performed creditably.
The principal contributors to and detractors from
performance and the changes to the equity, property
and bond investments are explained in more detail in
the Managers’ review on pages 15 to 23.
Borrowings
In recent years SAINTS’ long term borrowings
have been refinanced and modestly increased at
advantageous interest rates. The cost of these
borrowings is just under 3% per annum.
The book value of the total borrowings is £94.7m
which, at the year end, was equivalent to
approximately 9.9% of shareholders’ funds. The
estimated market or fair value of the borrowings
was£62.1m, a decrease from the previous year’s
value of £68.2m.
Environmental, Social and Governance
(ESG)
The Board of SAINTS recognises the importance of
considering Environmental, Social and Governance
(ESG) factors when making investments, and in
acting as a responsible steward of capital. We
consider that Board oversight of such matters is an
important part of our responsibility to shareholders,
and SAINTS’ ESG Policy is available to view on the
Company’s website (saints-it.com).
The Board has been strongly supportive of Baillie
Gifford’s approach and of their constructive
engagement with the companies you own, and
with potential holdings, in relation to important
challenges including climate change. The Board is
also supportive of OLIM’s approach in relation to
property, and in particular of its consideration of
environmental factors including climate change in
assessing the suitability of SAINTS’ investments.
I would encourage shareholders to read SAINTS’
annual Stewardship Report which can also be
accessed on the Company’s website (saints-it.com).
Issuance and buybacks
Over the year the Company has bought back
1,665,185 shares (representing 0.93% of the shares
in issue at the start of the year) at a cost of some
£8.5m. All buybacks have taken place at a significant
discount to the Company’s NAV, and so each buyback
has increased the NAV per share of the Company.
The Board is monitoring closely evidence of the
effect which buybacks have on the share price and
discount. No shares were issued during the year.
The Board and the Managers
In April 2023, it was announced that Bronwyn Curtis
would not be seeking re‑election to the Board in
2024, and Ms Curtis stood down at the conclusion
of last year’s AGM. At the Board’s request, Dame
Mariot Leslie took over as the Senior Independent
Director following Bronwyn’s retirement.
The Board, assisted by external consultants,
conducted a recruitment exercise during 2023,
following which Padmesh Shukla joined the Board
in February 2024 and his appointment was ratified
by shareholders at the AGM in April 2024. Padmesh
is the Chief Investment Officer of the Transport For
London (‘TFL’) Pension Fund, and has over 25 years
of investment experience, including 12 years in his
current role at TFL. He was formerly head of Climate
Change Financing at the London Development
Agency, and prior to that he had worked at the World
Bank, as a Researcher at Harvard and in real estate.
He is currently a member of the Church of England
Pensions Investment Committee.
I have indicated that I do not intend to stand for
re‑election as a Director at the AGM in 2026. It is
the Board’s intention to recruit a new Director over
the course of 2025, with a view to that Director
becoming the chairperson of SAINTS at the
conclusion of the AGM in April 2026.
The Scottish American Investment Company P.L.C.
09
As previously announced, Toby Ross stepped back
from his role as joint manager of SAINTS in February
with the thanks of the Board. The Board looks
forward to continuing to work with James Dow as
manager and Ross Mathison as deputy manager.
Outlook
Despite, and indeed partly because of, the very
strong performance of equity markets the risks to
investors are clearly apparent. With the election
ofPresident Trump, the markets are already
assuming fewer interest rate cuts and bond yields
have risen. Governments, in particular in the UK and
EU, will be under pressure to consolidate further
the public finances. And protectionism will almost
certainly increase.
The Board recognises the risks these developments
pose for a company like SAINTS which is focused
on delivering income from global equities. But we
take considerable comfort from the fact that global
refers primarily to having the global opportunity set
which SAINTS has enjoyed for well over a century,
rather than being a one way bet on global trade.
Opportunities will continue to arise, not least as the
benefits of technological progress spread beyond
the Tech giants. In particular, the Board and your
managers remain alert to both opportunities and
risks arising from the accelerated adoption of
Artificial Intelligence, many of which will be in the
broader economy and market. And if higher interest
rates force governments to tackle the proliferation
of government debt, to reduce regulation and
to promote economic growth, that may well be
good forperformance over the long term. In this
environment, having an actively managed portfolio
which invests only in those stocks which are
believed to provide a lasting opportunity, and which
seeks to avoid those which are overvalued or under
threat remains doubly important.
As a Board, we believe a long‑term approach based
on investing globally for sustainable growth is the
best route to achieving SAINTS’ aim of growing the
dividend ahead of inflation over time. As we look
ahead, we also take considerable comfort from
the nature of SAINTS’ investments, and from the
managers’ emphasis on quality, on dependability and
on growth far out into the future. We are encouraged
that, as is outlined further in the Managers’ review on
pages 15 to 23, Baillie Gifford have continued to find
new and attractive opportunities, and we also believe
that both the quality and duration of SAINTS’ property
portfolio have been enhanced over the pastyear.
SAINTS has been working for individual investors
for 150 years. It is built to help shareholders’ income
keep pace with inflation, as well as providing capital
growth. And it is built for resilience.
AGM
The AGM will be held at 11.30am on Tuesday
8April 2025 at Baillie Gifford’s offices at Calton
Square, 1 Greenside Row, Edinburgh. The meeting
will befollowed by a presentation from the
managers. Shareholders are cordially invited to
attend the meeting and presentation, and this
year those whoare unable to attend in person
will be able to view proceedings by remote video
link. Detailsofjoining the AGM remotely can be
obtained by contacting the Company’s Managers
at enquiries@bailliegifford.com who will be able
to provide you with details and instructions for
doing so. Please note you will not be able to vote
and you will not be counted as part of the quorum
but you will have the opportunity to watch the
managers’presentation.
I would remind shareholders that they are able to
submit proxy voting forms before the applicable
deadline and also to direct any questions or
comments for the Board in advance of the meeting
through the Company’s Managers, either by
emailing enquiries@bailliegifford.com or calling
08009172113 (Baillie Gifford may record your call).
The Board welcomes recent moves by platforms to
facilitate shareholder participation and encourages
shareholders to cast their votes. The Association
of Investment Companies’ guidance on how to vote
through various investment platforms can be found
on its website at: How to vote your shares | The AIC.
Finally, my fellow Directors and I send you all our
very best wishes for the year ahead.
Lord Macpherson of Earl’s Court
Chairman
12 February 2025
For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 116.
Past performance is not a guide to future performance.
Strategic report
Annual Report and Financial Statements 2024
10
SAINTS’ aim is to provide its shareholders with
a dependable source of income, together with
growth in income and capital that exceeds inflation
over time. To achieve these goals, our strategy is
to allocate the majority of the Company’s assets
to a portfolio of carefully selected global equities.
History tells us that equities offer investors the best
opportunity to enjoy inflation‑beating growth in
income and capital over the long term.
Within the equity portfolio, we focus solely on
companies whose income and growth potential is
aligned with SAINTS’ goals. Our starting point for
any equity investment is a company’s long term
potential for earnings and cash flow growth above
inflation. We believe share prices and dividends
over the long term follow company earnings and
cash flows. By investing only in companies whose
earnings and cash flows are likely to grow ahead
of inflation, we expect the shares held in the equity
portfolio to deliver the growth in income and capital
that we seek for SAINTS’ shareholders.
Besides the potential for profit growth, we seek
dividend dependability at any company in which we
invest. By ‘dependability’ we mean the resilience of a
company’s dividend through business and economic
cycles. We focus on companies whose dividends
are likely to prove dependable over long periods of
time, regardless of the prevailing market conditions
or economic cycle. These resilient dividends
help underpin the dependability of SAINTS’ own
distributions to shareholders.
Companies with the prospect of both dependable
dividends and attractive profit growth are not
common. However, we make full use of the global
equity universe available to the Company, which
consists of several thousand stocks. This allows us
to construct a diversified portfolio of investments
which meet our requirements. Typically the portfolio
consists of around 50–80 companies. We believe
this range strikes the right balance between
diversification and focus.
SAINTS’ portfolio is very different from conventional
equity market indices. The income stream from such
indices is often dominated by the dividends from a
small number of companies, often in cyclical and
capital‑intensive industries. The result is that as a
source of income they are unreliable. Our approach
is consciously different, to ensure stability of the
income we generate for the Company’s shareholders.
We are also only interested in truly sustainable
income streams, which ultimately come from
companies that are managed in a responsible way.
Our approach therefore gives careful consideration
to environmental, social and governance factors;
and we seek to engage constructively with the
companies in which we invest in order to help
promote their continued long term success.
Shareholders can read more about our efforts here
in our Annual Stewardship Report, available on the
Company’s website saints-it.com.
To identify the businesses we are looking for, we
employ a disciplined research process that focuses
on the dependability of a company’s dividend and
the growth potential of its earnings and cash flow.
The opportunities for growth vary widely, but they
can be broadly described as falling into one of four
categories described on page 12. We have also used
this categorisation to illustrate the portfolio, as at
31December 2024 on page 13.
Each block in the illustration represents an individual
holding, and the height of each block indicates the
size of the holding in the equity portfolio. Thecolour
of each block represents the type of growth by
which we categorise the company. The column in
which a block appears indicates the stock’s dividend
yield, shown across the horizontal axis.
Investment
approach
The Scottish American Investment Company P.L.C.
11
Borrowed funds
Although the equity portfolio accounts for the
majority of the Company’s investments, we also
invest in portfolios of property, infrastructure
equities and bonds. As an investment company,
SAINTS benefits from the ability to use borrowings,
up to a prudent amount. By investing these
borrowings in the property, infrastructure equity and
bond portfolios, we enhance the Company’s ability
to meet its investment objective.
SAINTS’ borrowings currently take the form of
long term secured privately placed loan notes. The
borrowed money is invested with the intention of
beating the cost of these borrowings. Our asset
allocation decisions aim to strike a balance between
income contribution, income dependability and
growth at the whole portfolio level.
A directly‑held portfolio of UK commercial property,
managed by OLIM Property Limited, has been a
favoured investment for the borrowed funds for
many years. The allocation to this property portfolio
has varied over time, but the continuing attraction is
OLIM Property Limited’s focus on strong covenants
and lease terms that typically include fixed or
inflation‑linked rent increases. Properties are
selected for the portfolio on the basis of their income
dependability and growth characteristics, much as in
the equity portfolio.
Similarly, SAINTS’ global portfolio of infrastructure
equities offer the prospect of dependable real
income and capital growth over time. We hold fixed
income investments where we view the income
as being resistant, and where the level of income
significantly exceeds the cost of borrowing.
Summary
Aim: To provide shareholders with a dependable
source of income, together with growth in income
and capital that exceeds inflation over time.
• This aim is underpinned for the long term by
investment in a portfolio of equities selected for
their real income and capital growth potential.
• Equity investments are complemented through the
opportunistic investment of borrowed funds:
• A high‑yielding directly‑held UK property
portfolio offering a dependable and growing
rental income stream;
• A global portfolio of infrastructure equities
to provide real growth in income and capital;
• Fixed income investments to enhance
resources.
• A robust dividend in even the most challenging
ofinvestment environments:
• Underlying investments are selected for
dependability of income alongside growth;
• The Board and management team are
committed to delivering real dividend growth
sustainably into the future;
• Significant revenue reserves to support the
smooth progression of dividends.
Outcome: An investment for the long term which
can generate a dependable income stream,
with significant growth potential in both capital
andincome.
Strategic report
Annual Report and Financial Statements 2024
12
Drivers of earnings and cashflow growth
Compounding machines Exceptional revenue opportunity
Free cash Free cash
Time Time
Characteristics
Enduring competitive positions
Strong balance sheets
Proven management
Expected outcome
Consistent above‑average cash flow and dividend growth
Characteristics
Market leaders
Pricing power
Strong volume growth
Expected outcome
Exceptional growth in earnings and cash flow
Management acceleration Long-cycle returns
Free cash Free cash
Time Time
Characteristics
Margins below potential
Catalyst for change identified
Strong management and clear strategy
Expected outcome
Exceptional cash flow and dividend growth
Characteristics
Strategic development
Change in capital requirements
Shift of cash allocation priorities
Expected outcome
Consistent above‑average cash flow and dividend growth
The Scottish American Investment Company P.L.C.
13
% of Portfolio
0–1% of Holding
1–2% of Holding
2–3% of Holding
3%+ of Holding
Box height represents
stock portfolio weight.
SAP
Cognex Corp
Intuit
AJ Gallagher & Co
Apple
Microsoft
0–1%
United Overseas
Bank
Pernod Ricard SA
B3 S.A.
Midea Group 'A' –
Stock Connect
United Parcel Service
Admiral Group
4–5%
Albemarle
Man Wah Holdings Ltd
TCI Co
AVI
Valmet Oyj
>5%
Current Year Forecast Dividend Yield
Source: IBES, Bloomberg, Baillie Gifford & Co. Holding sizes and forecast yields are as at 31 December 2024. Totals may not sum due to rounding.
Yields are based on market consensus and Baillie Gifford estimates of ordinary dividends, on a 12 month forward basis, net of withholding taxes.
Excludescash, weights have been rebalanced to 100%.
The following holdings are classified as infrastructure equity investments, and therefore are not included in the chart: Assura, BBGI, Exelon, Greencoat UK
Wind, Jiangsu Expressway, Terna.
Medtronic
Diageo
Edenred
Nestle R
Roche Holding
T. Rowe Price
Pepsico
CME Group Inc
3–4%
Albemarle Corp
Eurofins
Amadeus IT Group
SA
Carsales.com
Analog Devices
Atlas Copco A
Experian
Novo Nordisk
Schneider
Electric SE
Wolters Kluwer NV
Deutsche Boerse
TSMC
1–2%
Cisco Systems
Fevertree Drinks
Hong Kong Exchanges
& Clearing
NetEase HK Line
ANTA Sports
Products
Kuehne & Nagel
International AG
L'Oreal
Paychex
McDonald's
Starbucks Corp
USS Co
Coloplast AS
Epiroc B
Home Depot
Texas Instruments
Coca Cola
Watsco Inc
Fastenal
Partners Group
Procter & Gamble
2–3%
Global
equities
%
Weighted
Average Yield
%
●
Compounding
machines
80.7
2.2
●
Exceptional
revenue
opportunity
12.2 3.1
●
Management
acceleration
4.2 2.3
●
Long‑cycle
returns
2.9 6.2
What will drive growth in earnings and
cashflow available for dividends?
Strategic report
Annual Report and Financial Statements 2024
14
Portfolio
managers
James is head of Global Income Growth and
managerof the Scottish American Investment
Company P.L.C., as well as a member of the Portfolio
Construction Group for the Sustainable Income
Strategy. He joined Baillie Gifford in 2004 and
became a partner in the firm in 2023. Prior to this
he was an investment manager in our US Equities
Team. Before joining the firm, he spent three years
at TheScotsman, where he was economics editor.
James is a CFA Charterholder. He graduated
MA (Hons) in Economics and Philosophy from
the University of St Andrews in 2000 and MSc
in Development Studies from the London School
ofEconomics in 2001.
James Dow
Investment Manager
Appointed 2016
Portfolio Managers
Ross Mathison
Deputy Manager
Appointed 2023
Ross joined Baillie Gifford in 2019 as an investment
manager in the Global Income Growth Team and
became deputy manager of The Scottish American
Investment Company P.L.C. in August 2023.
Previously, he spent a year at Aviva Investors and
prior to that nine years at Standard Life Investments
as an investment manager, first in the European
Equity Team and latterly in the Global Equity Team.
Ross is a CFA Charterholder and graduated MA
(Hons) in Business and Finance from Heriot‑Watt
University in 2008. He also sits on the board of
directors at Aberlour, a Scottish children’s charity.
The Scottish American Investment Company P.L.C.
15
Managers’
review
How to summarise SAINTS’ performance in 2024?
Ina word: “mixed”.
On the positive side of the ledger, growth in earnings
across the Company’s portfolio was strong. The
backbone is our investment in equities, where
dividend growth was robust. Income from the
property, infrastructure and bond portfolios was also
solid. Together, these investments drove growth in
the Company’s earnings per share, lifting it 7.6%
above the prior year. This strong result underpinned
another inflation‑beating increase in SAINTS’
dividend to shareholders.
We are proud of the fact that since 1938, when the
Company last reduced its dividend, and indeed since
the end of 2003, when Baillie Gifford was appointed
by the Board as managers, SAINTS’ portfolio has
delivered dividend growth to shareholders that, on
average, has beaten UK inflation by 3% per year.
With the Consumer Price Index (CPI) ending 2024
at a rate of 2.5%, and SAINTS’ dividend growing
by 5.5%, the Company once again delivered real
growth in income. Meanwhile the net asset value
(NAV) of the Company rose to a new high.
On the negative side of the ledger, the NAV growth
of the Company lagged global equity markets, as
measured by the FTSE All‑World, by some way.
Worse, the share price did not follow the NAV, as the
discount widened over the course of 2024, finishing
the year at 10.6%.
In our commentary below, we examine each of these
highs and lows in more detail. By shedding light on the
good and the bad, our hope is that shareholders will
understand why we say we remain confident, despite a
“mixed” year, that SAINTS’ portfolio will keep delivering
on the Company’s core proposition: an income that
grows faster than inflation, with resilience across
cycles, and real capital growth over the long‑term.
Below, we start by examining the underlying health
of income growth in the portfolio. Then we explain
the relative performance versus wider markets.
For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 116.
Past performance is not a guide to future performance.
Wereflect briefly on the discount. And conclude with
why we, as managers, have personally been buying
more shares in SAINTS.
Equity portfolio
Let’s start by looking at the underlying health of the
investments in SAINTS’ equity portfolio.
Each year we analyse the financial results reported
by every one of SAINTS’ holdings. We clean up
these numbers for any distortions (such as one‑off
gains in profit that should not be considered part
of a company’s ongoing earnings) and we stack
these results against the figures from prior years.
This gives us an over‑arching picture of how each
company in the portfolio is performing, and where
the strengths and weaknesses lie.
Our ‘north‑star’ is 10% compounding: we are looking
for companies which can deliver 10% annual growth
in earnings and dividends, and keep doing so for
long periods of time. Inevitably not all the companies
in which we invest will meet our expectations, so in
practice we expect this approach to deliver a result
that is a little lower: perhaps 6‑9% growth. But over
time this level of growth would deliver excellent results
to SAINTS’ shareholders: for context, equity markets
worldwide have achieved around 5% earnings growth
over the past three decades. Meanwhile inflation in the
UK has averaged around 3%. A portfolio that delivers
anywhere close to 10% should handily beat both.
The accompanying chart on page 16 shows the
dividend growth of every company in the equity
portfolio. We have taken each company’s latest
announced dividend rate, and combined these with
the figures from prior years to calculate a five‑year
compound growth rate. Growth in our equity income
in 2024 was 10%, but we prefer to look at the five‑
year rate of dividend growth because individual years
taken on their own, for example the pandemic year of
2020, can be misleading of the underlying picture. A
five‑year view provides a clearer picture of the long‑
term health of the investments.
Strategic report
Annual Report and Financial Statements 2024
16
Portfolio holdings: average annual Dividend per share growth in the five years to 2024
(5%) 0% 5% 10% 15%20% 25%30% 35%
Admiral
Amadeus
Albemarle
Roche
TCI
Cisco
Fever
AVI
Coke
Nestle
Diageo
Medtronic
HKEx
Experian
Edenred
Apple
Coloplast
PG
SAP
Gallagher
DB1
Pepsi
UOB
Schneider
USS
Cognex
Pernod
CME
McDs
Paychex
Starbucks
Income-weighted average
AVERAGE
Carsales
TROW
MSFT
Home Depot
TSMC
K&N
Texas
Watsco
L'Oreal
Eurofins
Analog
Fastenal
UPS
Partners
Atlas
Epiroc
Intuit
Valmet
Wolters
Novo
Midea
Anta
Man Wah
B3
Netease
(4%)
1%
2%
2%
3%
3%
3%
3%
4%
4%
4%
4%
5%
5%
5%
5%
8%
8%
8%
8%
11%
11%
11%
11%
11%
11%
12%
12%
12%
12%
12%
12%
13%
14%
16%
16%
20%
20%
21%
31%
32%
17%
6%
6%
6%
7%
7%
7%
9%
9%
9%
9.6%
9.6%
10%
10.2%
10%
9.9%
10%
Source: Baillie Gifford
The Scottish American Investment Company P.L.C.
17
The main conclusion we draw from this chart is that
SAINTS’ equity portfolio is in good fettle. The current
holdings have, on average, delivered 10% annual
dividend growth over the past five years. This is true
both on an income‑weighted and equal‑weighted
basis, and provides an encouraging illustration of the
growth characteristics of the portfolio.
To be clear, the current portfolio is not exactly the
same as the portfolio five years ago: although 70%
of it was held, 30% of it is new in the past five years.
During that time we have exited some slower growing
holdings, which we mistakenly hoped would do
better, and invested in more promising ones. But the
north‑star remains 10%, with the expectation that
even if we keep getting a few wrong, we should still
deliver inflation‑beating income growth to SAINTS’
shareholders. We’ll pick up on this later when we
unpack the 2024 result, which was 7.6% total
earnings per share growth.
Looking at the individual holdings, there is clearly a
range of results around the average. In the strongest
cases, some of SAINTS’ investments have delivered
dividend growth well north of 10%. Examples include
video game publisher Netease (over 30% average
dividend growth per year) and pharmaceutical maker
Novo Nordisk (17% growth per year). In weaker
cases, we have seen dividend growth from some
holdings nearer to the mid‑single‑digits than 10%,
such as Coca‑Cola (4%) and Nestle (4%).
It is noticeable that several of the fastest growing
dividends in the portfolio have come from our
investments in Chinese companies: such as Anta
Sports, Midea, Man Wah, and the aforementioned
Netease. Whereas at the lower end of the chart we find
a number of businesses that manufacture consumer
staples: firms like Procter & Gamble and Nestle.
The slower growing dividends are always a prompt
for us to consider whether we can achieve faster
growth from other companies. But to an extent
the range in dividend growth reflects a conscious
tradeoff. Alongside growth, we look for rock‑solid
dividend resilience. SAINTS has not cut its dividend
for many decades, and that resilience starts with each
underlying investment.
Companies at the lower end of the chart typically
have ultra‑resilient dividends. For example, we are
highly confident that Coca‑Cola will continue raising
its dividend every year, even if the growth rate is only
modestly above inflation. By comparison, the fastest
dividend growers in the portfolio, such as Netease,
tend to have more dividend volatility from year to
year. Often these companies have payout‑ratio based
dividend policies, rather than progressive, meaning
their dividend can go up and down in any given year
depending on the strength of earnings. If we judge
this volatility to be uncorrelated with the rest of the
portfolio, we can tolerate this (within reason) in return
for exceptional long‑term growth.
Bear in mind that all of these dividend growth rates
are in each company’s reporting currency. We view
this as a positive over the long‑term, given that
Sterling has a long track record of depreciation
against overseas currencies, lifting the growth rate in
Sterling a little higher.
Of course, a company’s past performance is no
guarantee that it will perform well in the future.
As managers it is our responsibility to prod every
investment regularly, and evaluate whether the
prospects of each company remain promising.
Occasionally we will analyse a holding and foresee its
future taking a decided turn for the worse. Such was
the case last year with Kering, the luxury goods maker,
where dividend growth had averaged 14% per year
for the prior five years, and we had more than doubled
shareholders money since our initial investment, but
which we removed from the portfolio after a review
of its prospects led us to conclude that the next five
years were likely to be considerably weaker (more on
this in the Transactions section below).
So, the portfolio of names listed in the chart should
not be regarded as static. We are constantly testing
every holding, and typically we will upgrade 4 or 5
names in any given year in pursuit of stronger long‑
term growth. Looking forward from here, the results
compiled in this chart are very encouraging. They
show the portfolio is in good health. On average,
the dividends of the current portfolio are growing by
10% a year. This puts SAINTS in a strong position to
deliver on its objectives for shareholders.
Property, infrastructure and bonds
Regular readers will know that SAINTS takes
full advantage of one of the benefits of being an
investment trust: the ability to borrow prudently at
attractive rates, and invest the proceeds for returns
that beat the cost of borrowing. The Company’s long‑
term borrowings total £95m, with a fixed cost that
averages a whisker below 3%. We invest this nominal
liability predominantly in real assets, with yields above
3% and an expectation their income will grow over
time. This generates additional income and returns for
shareholders, beyond the equity portfolio.
Strategic report
Annual Report and Financial Statements 2024
18
Against a challenging backdrop of rising interest
rates, the property portfolio had a good year,
with a total return of over 8%. More details of the
investments are provided on pages 34 to 35 of the
Annual Report but the highlights include long leases
(the weighted average unexpired lease length is 16
years) and strong links to inflation. In total 72% of
the rental income is linked to RPI or CPI, with another
16% on fixed increases, and another 12% with
upward‑only rent reviews. The property portfolio is
managed by a specialist manager, OLIM, who have
a long and impressive track record of investing
on behalf of SAINTS. They have astutely avoided
the weak parts of the property market in the past
few years, such as offices, and focused intently on
inflation‑linked leases with good tenants that include
the likes of ALDI, Tesco and Premier Inn. The portfolio
remains fully let. The manager anticipates that
average annual rental growth over the next five years
will average 3‑4%.
The infrastructure portfolio also continues to deliver
solid income growth. Again, these are investments
in real assets. They are also liquid assets, because
we have chosen to invest in infrastructure through
equities: for example, the equity of the Italian
electrical grid operator Terna, and the equity of
the tollroad operator Jiangsu Expressway, which
controls many of the major roads around Shanghai.
In the short‑term, these equities will go up and down
with the stock market, but in the long‑term (which
is of far more concern to SAINTS) we expect their
returns to be driven primarily by the returns from their
underlying infrastructure assets. In 2024, we saw
share prices of several of these investments fall, as
stock markets re‑priced the future path of interest
rates around the world. But their income growth
remained solid, with Terna raising its dividend by
6.6% and the largest holding, Greencoat UK Wind,
raising its dividend by double‑digits.
The bond portfolio is a very small part of SAINTS’
assets, representing less than 1% of the total. It
is invested opportunistically in government bonds
where we see attractive yields and low default risk.
The largest investment is an inflation‑linked sovereign
bond issued by Brazil, paying an attractive yield of
around 7%, where in our view there is very low risk
ofdefault.
SAINTS borrows prudently. Just as we stress‑
test every dividend in the equity portfolio, so we
stress‑test the Company’s ability to service its
debt. The£95m of borrowings represents gearing
of less than 10% (on a debt to total assets basis).
Weremain confident the portfolio of assets which is
funded out of these borrowings should beat the cost
of the borrowing, and as such is a good use of the
investment trust structure.
Revenue and dividend growth
As the property manager found attractive
opportunities for investment in 2024, we funded
these new purchases from sales of bonds, which had
higher yields. In the long‑term we believe this shift
from bonds into property will strengthen SAINTS’
dividend growth, but in the short‑term it reduced the
amount of income earned in 2024. This is why the
growth in equity income, at 10%, was reduced a little
to growth in total income of 7.6%. In some years, the
Board chooses to grow the dividend to shareholders
a little slower or faster than the Company’s income,
depending on what is most appropriate for the long‑
term. This year, the Board has chosen to grow the
dividend by 5.5%.
We are very conscious that in the past few years,
SAINTS’ dividend growth has not been strong in every
year. A variety of factors have combined to produce
this result, including moderate dividend growth
from some companies during the Pandemic period,
changes made to the equity and property portfolios
in pursuit of better long‑term growth, and a rising UK
corporate tax rate. If we take the past three years,
SAINTS’ dividend has grown by 9%, 2%, and 5.5%
respectively, meaning an average growth rate of
5.5% over the period.
Looking forward, we will keep our sights set on 10%
in the equity portfolio, and, even allowing for some
investments which fall below our expectations, we
hope this will still deliver equity income growth in the
high‑single‑digit range. The non‑equity investments
are more likely to grow in line with inflation, say
3%. But this should still produce overall income
and dividend growth well ahead of inflation. If UK
CPI averages, say, 3%, we would hope that SAINTS
could deliver dividend growth of 6%, extending the
Company’s long‑track record of beating inflation by
3%. Thanks to the wonder of compounding, were this
result to be achieved, a shareholder could expect, in
nominal terms, to see their income rise by more than
30% over a five year period.
There are multiple ways to achieve income from
equities. Some income managers do it by selling
capital, others by focusing on yield. Our firm belief
is that, over the long‑term, income that is backed
bynatural dividend growth, the SAINTS’ approach,
The Scottish American Investment Company P.L.C.
19
is a compelling way to deliver a resilient, progressive
income that grows. This approach has been
tested over many decades, and we hope this gives
reassurance to shareholders, particularly at a time
when the world is looking increasingly volatile.
Relative performance
While the income growth from SAINTS’ portfolio
was robust last year, the relative NAV performance
of the portfolio was weak. The return delivered by
the equity portfolio was 6.1%, and SAINTS’ overall
NAV total return (borrowings at fair value) was 6.1%
after fees. Last year the US stock market rocketed to
record highs, with the S&P500 (a broad‑based index
of US‑listed companies) rising by around 25%. This
is heady stuff, one of the best years ever recorded for
US equities. SAINTS’ benchmark is a global one, the
FTSE All‑World, but it is dominated by the US market:
the US accounts for almost 70% of the index.
SAINTS has a lower proportion of its assets invested
in the US. Within the equity portfolio, for example, we
have about 43% of capital invested in US companies.
This is still a large proportion, being by some margin
our single largest geography. But it is considerably
lower than the index. This is not by accident, but a
deliberate choice, rooted in a number of reasons
which relate to the dependable achievement of
SAINTS’ investment objectives.
The starting point is that we expect SAINTS’ dividend
growth in the long‑term to be driven by the earnings
growth of its underlying investments. We therefore
seek companies with strong prospects for earnings
growth, regardless of the country where they are
listed. There are approximately 6,000 companies
available to us globally, of which circa. 2,000 are US‑
listed. If opportunities were spread evenly throughout
the world then, all else being equal, one might expect
about a third of the portfolio to be listed in the US.
Secondly, US companies typically have lower
dividend payout ratios than elsewhere: the payout
ratio across the S&P500 has typically averaged
30‑40% of earnings, whereas in countries such as
the UK and Germany this figure has been 40‑50%. In
addition, US stocks have also been priced more richly,
meaning higher price‑to‑earnings (PE) multiples. The
combination of a lower payout ratio with a higher PE
means that investors receive drastically less income
per pound invested in US companies. Towards the
end of 2024, the S&P500 yielded only 1.28%. For
comparison a European market like Germany’s DAX
yielded 2.87%: more than double the income.
Finally, US corporate dividends bring a concentration
of risk: both regulatory risk (for example rates of
withholding tax) and the currency risk of US dollars
against Sterling.
Putting together all of the above, we believe it would
be unwise and perhaps even irresponsible for SAINTS
to invest an index‑like 70% of capital solely in the
US market. The result would be significantly lower
income, with significantly higher risks, while missing
out on many good companies which fit better with
SAINTS’ objectives elsewhere in the world. The
flipside of all this though is that in years like 2024,
when the US market is rocketing, and other markets
such as Europe and Asia are rising less strongly,
the NAV performance of SAINTS will inevitably lag
itsbenchmark.
This was one part of SAINTS’ under‑performance
of the FTSE All‑World in 2024. But there was a
second major factor. This was the specific type of
investments that SAINTS owns. Share prices of
many of SAINTS’ investments, companies such as
Watsco, Analog Devices and Procter & Gamble,
lagged the wider US market. These resilient long‑term
compounders, which we favour for SAINTS’ income
and capital growth objectives, were deeply out of
favour within the US stock market last year. The best‑
performing US stocks were cyclicals such as banks,
which benefited from a reversal of expectations from
a “hard” to a “soft” landing in the US economy, and
so‑called “Big Tech” stocks, where investors poured
capital into names such as Nvidia, the AI chipmaker.
These types of company are usually a poor fit for
SAINTS’ objectives. They tend to be highly cyclical
dividend payers, if they pay a dividend at all. For
example, at Nvidia, as we noted in this year’s interim
report, there is a significant risk of a sharp downcycle
in earnings if customers find ways to pursue gains
in AI through optimisation, rather than ever‑more
hardware. This cyclicality and the lack of a meaningful
dividend makes Nvidia unsuitable as an investment
for SAINTS, and recent newsflow has done nothing to
alter our view on its suitability.
Or to take another example of the type of US
company which fared well last year, we can observe
the rise of Tesla, the carmaker. Again, this is both a
cyclical company and a member of the “Magnificent
Seven” technology stocks, and its share price
appreciated rapidly last year. But again, it is a volatile,
capital‑intensive business model, and it does not pay
a dividend.
Strategic report
Annual Report and Financial Statements 2024
20
Shares in these kinds of company fared well in 2024,
while the likes of Procter & Gamble, with its 134 years
of consecutive dividends, and highly resilient earnings
growth, under‑performed the wider US market.
Our intention is to continue focusing squarely on
SAINTS’ objectives for the long‑term. There are many
great US companies that we can invest in, names
which are a strong fit with our goal of inflation‑
beating income growth with resilience. Indeed, there
are 20 such US names already in the equity portfolio,
including the likes of Microsoft and Apple (both top
ten positions) as well as lesser known names such
as Fastenal the industrial distribution company, and
Cognex the factory automation company.
We continue to scour the US market for new ideas,
last year completing several research trips across the
States that yielded exciting new holdings such as CME
Group (more on this in the Transactions section). We
do not plan to chase short‑term momentum in the
stock market, and we will continue to avoid deeply
cyclical companies with high technology risk or low
dividend payout ratios. We do not plan to allow SAINTS’
country and currency risk at the portfolio level to come
anywhere close to the benchmark’s 70% US exposure.
Finally, we should acknowledge that some of SAINTS’
holdings have disappointed for stock specific reasons.
This is typically the case in an actively managed
portfolio, as our analysis is not always correct, active
management includes an assessment of outcomes
which we believe are probable but know are not
certain, and progress is not always smooth. This year
for example the share price of B3, the Brazilian Stock
exchange, has been adversely affected by sentiment
towards Brazil, and Novo Nordisk has seen mixed
results from some trials for its weight loss treatments.
In both cases we continue to have confidence in
the long‑term prospects for growth. In other cases,
as illustrated in the transactions section below, we
have sold the shares where we believe that long term
prospects have deteriorated.
SAINTS’ style and structural‑bias has been painful in
terms of relative NAV performance over the past year
in particular, and this in turn has adversely affected
SAINTS’ long‑term numbers. But we neither aim
to, nor expect to, outperform the market in every
annual period, although interestingly SAINTS has
outperformed in eight of the last ten calendar years.
Looking forward we are encouraged by the operational
(as opposed to share price) performance of your
holdings, and remain convinced that a balanced
portfolio of 10% compounders, split roughly evenly
between the US, Europe and the rest of the world, is
the most surefire way to achieve SAINTS’ objectives.
Discount to NAV
Over the course of 2024, the gap between SAINTS’
share price and its NAV per share widened. From a
starting point of 0.8%, the discount ended the year at
10.6%. The accompanying chart puts this discount in
some historical perspective. It shows the gap between
SAINTS’ share price and NAV over the past 30 years.
During that time there have been three noticeable
periods where the shares have traded at a discount to
NAV: the late 1990s to early 2000s; a brief dip around
2014‑15; and a more recent period starting in 2022.
NAV (cum fair) and Share Price (pence/share)
Apr 95
Feb 96
Dec 96
Oct 97
Aug 98
Jun 99
Apr 00
Feb 01
Dec 01
Oct 02
Aug 03
Jun 04
Apr 05
Feb 06
Dec 06
Oct 07
Aug 08
Jun 09
Apr 10
Feb 11
Dec 11
Oct 12
Aug 13
Jun 14
Apr 15
Feb 16
Dec 16
Oct 17
Aug 18
Jun 19
Apr 20
Feb 21
Dec 21
Oct 22
Aug 23
Jun 24
● NAV
● Share price
● (Discount)/premium
● SAINTS trading at a discount
● SAINTS trading at a premium
(25%)
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
100
200
300
400
500
600
Source: Morningstar/LSEG and relevant underlying index providers. See disclaimer on page 116.
The Scottish American Investment Company P.L.C.
21
Just as the Board of SAINTS, which is highly
engaged and active, takes great interest in the
existence of a discount in the share price, so we as
managers of the Company pay great attention to
it too. A discount hovering around 10% effectively
means that sellers are prepared to dispose of their
shares for only 90 pence in the pound, or flipped
another way, buyers are only prepared to buy shares
at 90 pence in the pound. Whenever a discount
appears, the question it begs is always the same: is
it signalling something fundamentally wrong with the
company, or is it a symptom of some wider malaise in
the stock market?
If the former, we as managers need to swallow our
pride and think hard about what the problem might
be… and whether it can be fixed.
When SAINTS traded at a discount in the late 1990s,
we can see with the benefit of hindsight that the root
cause was a loss of confidence in the portfolio of
investments at that time. The Company responded
by buying back shares aggressively, but this had the
knock‑on effect of raising the gearing of the balance
sheet, which in turn made the shares less attractive
and pushed the discount ever‑wider. This ultimately
led the Board to replace the manager at the end of
2003. Over the subsequent eight years the portfolio
was improved, and trust in the Company’s portfolio
restored, leading the discount to close.
In 2014/15, the discount was more a function of
a sector malaise. At the time, expectations for
UK interest rates were rising markedly. This had a
knock‑on impact on the perceived attractiveness
of equities in the short‑term. That impact was felt
across the investment trust sector, and SAINTS was
no different to many others in the Global Equity
Income sector, as its shares moved from a premium
to a discount. Sentiment to the sector later improved
and SAINTS, again like the wider sector, moved back
to a premium.
In 2024, we do not yet have the benefit of hindsight.
What we can observe is that SAINTS is not alone in
trading on a discount. Far from it: the vast majority of
investment trusts are currently trading at a discount,
as the chart below shows. This suggests a market‑
wide malaise rather than something SAINTS‑specific.
For example, it may be that investment trust buyers,
who are often quite sophisticated investors, are
simply passing verdict on the current level of market
valuations of trust portfolios. Perhaps buyers are
sceptical that interest rates will fall quite as rapidly
as current valuations may imply and are demanding
a margin of safety to invest in trusts. Another way of
looking at this is to say that with UK gilt yields sitting
at levels between 4 and 5%, the risk‑reward of
buying shares in an investment trust is not, for some,
sufficiently compelling at the moment.
Our personal view, speaking both as managers and
as shareholders in the Company, starts with the
observation that the underlying portfolio is robust
(as outlined in the first section of this report). The
valuation of the assets appears to us relatively
reasonable, particularly given that the average
SAINTS’ equity holding is not trading at anything
like the valuation multiples we currently observe in
some parts of the wider stock market. The portfolio
is also highly liquid, and marked‑to‑market daily,
as it consists mostly of listed equities. Only the
property portfolio could be considered less liquid,
but this represents only 9% of total assets, and it is
independently valued every six months. Meanwhile
the gearing of the Company remains low, and the
less liquid assets are broadly funded by attractively
priced long term debt.
So, our view is that it is likely that SAINTS’ discount
is to a large extent a reflection of sentiment in the
wider investment trust sector, rather than something
Company‑specific. It can also be argued that trusts
which focus on income are particularly vulnerable
to higher gilt yields. History suggests this is likely
to pass with time, perhaps if inflation moderates
or gilt yields fall. In the meantime, we as managers
believe that SAINTS’ discount represents an unusual
opportunity to invest at a price below NAV. We have
been adding to our own holdings over the past
several months.
Premium/(discount)* to NAV (FV)
(25%)
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
● SAINTS
Jan 20
Apr 20
Jul 20
Oct 20
Jan 21
Apr 21
Jul 21
Oct 21
Jan 22
Apr 22
Jul 22
Oct 22
Jan 23
Apr 23
Jul 23
Oct 23
Jan 24
Apr 24
Jul 24
Oct 24
● Inv Trust Sector (ex 3i ex VCT)
Source: Winterflood
* Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
Strategic report
Annual Report and Financial Statements 2024
22
Transactions
We continually seek ways to upgrade SAINTS’
investments: this is central to the job of active
managers on behalf of shareholders. In 2024 we
carried out a number of transactions which we
believe strengthened the prospects of the Company
in the years ahead.
In the equity portfolio, we divested from Sonic
Healthcare, the lab testing company, after a
number of years of pedestrian dividend growth (for
instance: just 2% in 2024). We re‑assessed its
future prospects and concluded that, although the
resilience of the dividend remained high, there were
various structural headwinds in its markets (notably
a lack of pricing power) that made an acceleration
in its earnings and dividends unlikely. At Dolby
Laboratories, another divestment, it was a similar
story: several years of lacklustre earnings growth
which we believe are most likely caused by structural
headwinds, particularly in pricing. Both companies
have been investments for about a decade, and the
returns from both have been fine, and their dividends
have been extremely resilient. But we believe we can
do better for shareholders elsewhere.
At Kering, the luxury goods company, SAINTS
has enjoyed several years of strong earnings and
dividends growth since we invested in 2016. But
lately the company seems to have gone off‑track,
losing key talent and pursuing a new strategy which,
based on our experience, has a low probability of
working: moving away from what is authentic to its
brands while at the same time pushing up prices.
Typically, this results in old customers leaving faster
than new ones arrive, and we strongly suspect there
will be a number of painful years ahead (and most
likely a reduction in the dividend).
At Hargreaves Lansdown, the investment platform,
our hand was forced by a bid from a private equity
buyer which was backed by other shareholders. At
pharmaceutical maker GlaxoSmithKline, another
divestment in 2024, the decision was solely ours.
Our investment case had been predicated on better
commercial management of the company’s portfolio,
and a rebuilt pipeline under visionary new leaders
appointed to the R&D team. The first part of the
investment case worked, and the shares rose during
our ownership, but the second part failed to come to
fruition. We decided to move on in favour of higher
conviction growth investments elsewhere.
We made three new purchases during the year.
The first was Epiroc, a leader in drilling equipment
used in mines and construction. This company
is unusually well‑managed: it comes from the
same stable of firms that produced our successful
investment in Atlas Copco, the Swedish engineering
powerhouse. At Epiroc we see many of the same
qualities, and we expect many years of solid profit
and dividend growth. This should be underpinned by
the company’s constant innovation, combined with
several supportive trends we see in its end‑markets:
such as increasing use of automated drilling for
safety reasons, and increasing use of software to
deliver better analysis of how to drill. The company
aims to pay a resilient dividend across cycles.
CME Group was another attractive new investment
during the year. This company is dominant in the
exchange of derivatives in US markets: most notably
interest rate futures, but also a long list of energy,
metal and agricultural commodities encompassing
everything from oil to copper to corn. It does not
take positions on these commodities, rather it
operates the pre‑eminent marketplace in the US
where buyers can find sellers, through its matching
platform, Globex. In the years ahead we expect
growth in CME’s revenues to be driven by ever‑
rising trading volumes, as its customers, such as
banks, try to manage ever‑more complex financial
risks. It is constantly innovating new products, and
there is good potential for it to grow its customer
bases internationally. The margins and cashflow
from the business are strong, which it pays out in
an attractive level of dividends. Last year the shares
were weak, as some investors worried about the
impact of falling interest rates, and a new competitor
launching in the US. But our analysis suggests
the rate worry is misplaced, and the new player is
unlikely to have significant success, and we took this
as an opportunity to invest.
The Scottish American Investment Company P.L.C.
23
Paychex was a third new investment. This is a
payroll processing company serving thousands of
small businesses in the US. Every time employees
get paid, companies need to navigate a labyrinth
of state and federal rules to ensure the correct
deductions, taxes, and so on are made. This is the
core of Paychex software, saving employers dozens
of hours of time for the cost of a few dollars a month.
An attraction is the additional products that can be
sold on the back of this software: such as health
insurance, recruitment tools, and a host of other
tasks connected to managing people. We foresee
Paychex selling every more products to ever more
businesses in the years ahead, growing its earnings
and its dividend, which have a tremendous track
record of compounding.
Within the property portfolio, there were new
purchases of a motorway service station south of
London, and an industrial warehouse in the south of
England. Both are exactly the sort of long‑leased,
inflation‑linked property which the manager seeks.
In the bond portfolio there were divestments to fund
these property investments. In the infrastructure
portfolio there were no major transactions.
Conclusion
To go back to the start: SAINTS’ performance in
2024 was mixed. The highlights were the strong
growth in earnings delivered by the Company’s
investments, driven by an equity portfolio that is
in fine form, with its dividends growing on average
by 10%. Income from property and the other asset
classes was also robust. This underpinned another
inflation‑beating increase in SAINTS’ dividend to
shareholders: the 51st consecutive increase. The
NAV of the Company also rose to a new high.
As we have also examined, the relative performance
of the NAV lagged global equity markets last
year. This was due primarily to the more balanced
approach that SAINTS takes to investing, and in
particular our focus on companies with resilient
earnings and income growth. These were not the
type of companies that saw the strongest rises in
share prices in 2024. The discount between the NAV
and SAINTS’ share price widened last year, which
we believe is symptomatic of the wider investment
trustsector.
We look forward with great optimism to the years
ahead. We will stay true to SAINTS’ objective of
delivering a resilient income that grows ahead of
inflation, while also aiming to grow capital value. Our
analysis of the investment portfolio suggests it is
well‑placed for this task. We continue to find exciting
new ideas around the world, the likes of Epiroc, CME
and Paychex: names that make SAINTS’ prospects
ever‑stronger. We remain resolutely aligned with
shareholders, investing alongside them as owners of
SAINTS’ shares.
James Dow
Ross Mathison
Baillie Gifford & Co
12 February 2025
Strategic report
Annual Report and Financial Statements 2024
24
Performance
attribution
For the year to 31 December 2024
Portfolio breakdown
Average allocation
SAINTS
%
Average allocation
benchmark*
%
Total return†
SAINTS
%
Total return
benchmark*†
%
Global equities 95.1 99.9 6.1 19.8
Infrastructure equities
‡
3.1 0.1 (2.8)
Bonds 1.7 (4.1)
Direct property 9.4 8.3
Cash at bank 0.5 –
Borrowings at book value (9.8) 3.0
Portfolio total return (borrowings at book value) 5.9
Other items
#
(0.3)
Fund total return (borrowings at book value) 5.6
Adjustment for change in fair value of borrowings 0.5
Fund total return (borrowings at fair value) 6.1
* The Company’s benchmark is the FTSE All‑World Index (in sterling terms).
†
Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
#
Includes Baillie Gifford and OLIM Property Limited management fees.
‡
The allocation reflects the six infrastructure equity holdings set out the list of investments on page 31.
Source: Baillie Gifford/LSEG and relevant underlying index providers. See disclaimer on page 116.
Past performance is not a guide to future performance.
The Scottish American Investment Company P.L.C.
25
Distribution
of portfolio
Geographical at 31 December 2024
1
2
3
5
6
4
7
Geographical 2024
%
2023
%
1 Equities: North America 3 7. 7 35.3
2 Equities: Europe (ex UK) 2 7. 8 29.0
3 Equities: Asia 12.8 9.8
4 Direct Property 9.1 6.4
5 Equities: United Kingdom 4.8 6.0
6 Infrastructure Equities 2.9 2.8
7 Equities: Australasia 1.5 4.0
8 Equities: South America 1.1 1.5
9 Bonds 1.1 3.7
10 Equities: Africa and Middle East 0.9 0.7
11 Net Liquid Assets 0.3 0.8
Global Equities* by Sector at 31 December 2024
3
4
5
2
6
7
1
8
Sector 2024
%
2023
%
1 Technology 21.2 21.2
2 Industrials 1 7. 8 19.1
3 Financials 1 7. 8 15.1
4 Consumer Discretionary 16.5 13.0
5 Consumer Staples 13.4 13.3
6 Healthcare 6.8 12.4
7 Basic Materials 5.0 4.6
8 Telecommunications 1.5 1.3
* The global equities sector analysis does not include
infrastructure equities.
Strategic report
Annual Report and Financial Statements 2024
26
Review of
investments
A review of the Company’s
tenlargest equity investments
asat 31 December 2024.
*
For a definition of terms see glossary of terms and alternative performance measures on pages
122 to 124.
Microsoft
The software behemoth whose
products span cloud computing,
devices, Office 365, gaming and
now generative AI. Microsoft’s
incredible ability to find new
innovative avenues for growth
have led it to compound capital
appreciation and income at high
rates for many years, something
we believe will continue for many
more to come.
Sector Technology
Valuation at
31 December 2024
£41,555,000
% of total assets* 4.0%
Valuation at
31December2023
£37,315,000
% of total assets* 3.6%
Net purchases/(sales) in
year to 31 December 2024
£452,000
© Kumar Sriskandan/Alamy Stock.
Fastenal
The largest distributor of
fasteners for construction and
industrial applications in North
America. It is very close to its
customers, delivering a tailored,
flexible service, something which
has been enhanced by the roll‑out
of its on‑site vending machines.
Over time, the company can
take market share from smaller,
independent peers and continue
to compound growth at a
reasonable rate.
Sector Basic Materials
Valuation at
31 December 2024
£35,809,000
% of total assets* 3.4%
Valuation at
31December2023
£31,673,000
% of total assets* 3.1%
Net purchases/(sales) in
year to 31 December 2024
Nil
© Bloomberg/Getty Images.
The Scottish American Investment Company P.L.C.
27
* For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
Sector Technology
Valuation at
31 December 2024
£35,132,000
% of total assets* 3.4%
Valuation at
31December2023
£25,128,000
% of total assets* 2.4%
Net purchases/(sales) in
year to 31 December 2024
£2,310,000
Apple
Apple’s introduction of the iPhone
in 2008 marked a paradigm shift
in consumer internet. Since then,
its products and operating system
have become central to many
peoples’ lives. With its innovative
culture, we think this will continue
into the future.
© Shutterstock/Anna Hoychuk.
Sector Consumer Staples
Valuation at
31 December 2024
£32,529,000
% of total assets* 3.1%
Valuation at
31December2023
£25,916,000
% of total assets* 2.5%
Net purchases/(sales) in
year to 31 December 2024
£2,380,000
Procter & Gamble
Procter & Gamble is behind many
of the branded consumer goods
we use every day. Whether that’s
the Oral‑B toothpaste we might
use to brush our teeth in the
morning, the Gillette razors for
shaving or Fairy for washing up.
The strength and defensibility
of these brands has enabled
the company to continue to
grow durably despite being over
180yearsold.
© Procter and Gamble.
Sector Technology
Valuation at
31 December 2024
£32,491,000
% of total assets* 3.1%
Valuation at
31December2023
£27,554,000
% of total assets* 2.7%
Net purchases/(sales) in
year to 31 December 2024
(£9,148,000)
Taiwan Semiconductor
Manufacturing
TSMC is one of the world’s
most important companies.
Itis a pure‑play semiconductor
manufacturer with most of the
world’s semiconductor designers,
such as Nvidia, being TSMC’s
customers. The demand for
semiconductors has almost sky‑
rocketed over the past decade
and we expect that demand to
increase for many years to come,
particularly given the advent
of generative AI in the public
consciousness.
© Taiwan Semiconductor Manufacturing Co., Ltd.
Strategic report
Annual Report and Financial Statements 2024
28
* For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
Sector Industrials
Valuation at
31 December 2024
£25,490,000
% of total assets* 2.4%
Valuation at
31December2023
£22,822,000
% of total assets* 2.2%
Net purchases/(sales) in
year to 31 December 2024
(£1,417,000)
Schneider Electric
A global leader in energy
management and industrial
automation, Schneider Electric,
is uniquely positioned to facilitate
and benefit from the energy
transition. Its comprehensive
solutions range from building
automation to data center power
supply, enabling clients to reduce
energy consumption. With strong
financial performance, innovative
products, and a focus on
sustainability, Schneider Electric
is poised to capitalise on growing
demand for efficient, low‑carbon
technologies.
Partners Group
A Swiss private markets
investment group. Its scale,
reputation and culture has triple
sided advantages, attracting
flows from blue‑chip clients,
making it an investor of choice
for companies and an employer
of choice for top talent. It is
well positioned to benefit from
the growth of private assets in
investors’ portfolios.
Sector Financials
Valuation at
31 December 2024
£30,639,000
% of total assets* 2.9%
Valuation at
31December2023
£28,093,000
% of total assets* 2.7%
Net purchases/(sales) in
year to 31 December 2024
£3,564,000
Deutsche Boerse
Deutsche Börse, a cornerstone
of European financial markets,
operates critical infrastructure
including trading platforms,
clearing houses, and custodian
services. Its recent expansion into
investment management software
and ESG analytics through ISS
opens new opportunities. With a
decade of steady earnings growth
behind it, Deutsche Börse is well‑
positioned to capitalise on rising
demand for financial products and
increased regulation.
Sector Financials
Valuation at
31 December 2024
£28,293,000
% of total assets* 2.7%
Valuation at
31December2023
£22,716,000
% of total assets* 2.2%
Net purchases/(sales) in
year to 31 December 2024
£2,289,000
The Scottish American Investment Company P.L.C.
29
* For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
Sector Industrials
Valuation at
31 December 2024
£23,810,000
% of total assets* 2.3%
Valuation at
31December2023
£25,916,000
% of total assets* 2.5%
Net purchases/(sales) in
year to 31 December 2024
£707,000
Atlas Copco
Atlas Copco is one of the world’s
best engineering companies.
Ithas leading market shares in
air compressors and vacuum
pumps which have wide industrial
uses and come with very
profitable aftermarket businesses.
Itsdecentralised organisation
and innovative corporate culture
set the standard for others to
try and copy. Capital allocation
is excellent, and we are strongly
aligned with its long‑term anchor
shareholder, Investor AB.
© Atlas Copco.
Novo Nordisk
The Danish pharmaceutical
company which has come to
dominate the diabetes care
market and is now one of the
leading companies taking on
obesity. We think this is a special
company whose focus on internal
development has put it in the
position to reap the rewards of its
game changing development of
semaglutide.
Sector Healthcare
Valuation at
31 December 2024
£24,342,000
% of total assets* 2.3%
Valuation at
31December2023
£41,383,000
% of total assets* 4.0%
Net purchases/(sales) in
year to 31 December 2024
(£3,471,000)
© Novo Nordisk.
Strategic report
Annual Report and Financial Statements 2024
30
Name
Business
2024
Value
£’000
2024
% of total
assets
Global equities
Microsoft Computer software 41,555 4.0
Fastenal Distribution and sales of industrial supplies 35,809 3.4
Apple Consumer technology 35,132 3.4
Procter & Gamble Household product manufacturer 32,529 3.1
Taiwan Semiconductor Manufacturing Semiconductor manufacturer 32,491 3.1
Partners Group Asset management 30,639 2.9
Deutsche Boerse Securities exchange owner/operator 28,293 2.7
Schneider Electric Electrical power products 25,490 2.4
Novo Nordisk Pharmaceutical company 24,342 2.3
Atlas Copco Engineering 23,810 2.3
Watsco Distributes air conditioning, heating and refrigeration
equipment
23,471 2.3
Wolters Kluwer Information services and solutions provider 23,314 2.2
Coca Cola Beverage company 22,349 2.1
Anta Sports Sportswear manufacturer and retailer 21,205 2.0
Pepsico Snack and beverage company 21,037 2.0
CME Derivatives exchange operator 20,732 2.0
Analog Devices Integrated circuits 19,420 1.9
Midea Group Appliance manufacturer 19,366 1.9
Experian Credit scoring and marketing services 18,949 1.8
Admiral Car insurance 18,799 1.8
McDonald’s Fast food restaurants 17,858 1.7
Roche Pharmaceuticals and diagnostics 17,456 1.7
Carsales.com Online marketplace for classified car advertisements 16,136 1.5
United Parcel Service Courier services 15,575 1.5
United Overseas Bank Commercial banking 15,448 1.5
L’Oréal Cosmetics 15,003 1.4
Epiroc Mining and infrastructure equipment provider 14,713 1.4
SAP Business software developer 14,095 1.4
Cisco Systems Data networking equipment 13,718 1.3
Arthur J Gallagher Insurance broker 13,470 1.3
USS Second‑hand car auctioneer 13,013 1.2
Home Depot Home improvement retailer 12,847 1.2
Nestlé Food producer 12,771 1.2
T. Rowe Price Fund manager 11,808 1.1
List of
investments
As at 31 December 2024
The Scottish American Investment Company P.L.C.
31
Name
Business
2024
Value
£’000
2024
% of total
assets
B3 S.A. Securities exchange owner/operator 11,386 1.1
Intuit Software 11,059 1.1
Texas Instruments Semiconductor supplier 10,976 1.0
Coloplast Manufacturer of medical products 10,687 1.0
NetEase Online gaming company 10,487 1.0
Hong Kong Exchanges and Clearing Securities exchange owner/operator 10,357 1.0
Amadeus IT Group Technology provider for the travel industry 10,279 1.0
Starbucks Coffee retailer 10,144 1.0
Edenred Voucher programme outsourcer 9,898 0.9
AVI Staple foods manufacturer 9,698 0.9
Albemarle Producer of speciality and fine chemicals 9,658 0.9
Valmet Manufacturer of pulp and paper machinery 9,487 0.9
Diageo International drinks company 9,056 0.9
Kuehne + Nagel Worldwide freight forwarder 8,801 0.8
Man Wah Sofa designer and manufacturer 7,362 0.7
Pernod Ricard Global spirits manufacturer 6,218 0.6
Cognex Industrial automation 6,042 0.6
Eurofins Laboratory testing provider 5,410 0.5
Paychex HR, payroll and benefits outsourcer 5,088 0.5
Medtronic Medical devices company 4,485 0.4
TCI Producer of health‑food products 4,323 0.4
Fevertree Drinks Producer of premium mixer drinks 3,701 0.4
Total global equities 907,245 86.6
Infrastructure equities
Greencoat UK Wind UK wind farms 10,869 1.0
Terna Electricity grid operator 6,203 0.6
BBGI Global Infrastructure PFI/PPP fund 5,219 0.5
Jiangsu Expressway Tollroad operator 3,897 0.4
Assura Primary healthcare property group 3,020 0.3
Exelon Grid and utility operator 834 0.1
Total Infrastructure equities 30,042 2.9
Direct Property See table on page 34 95,450 9.1
Strategic report
Annual Report and Financial Statements 2024
32
Name
Business
2024
Value
£’000
2024
% of total
assets
Bonds
Euro denominated Ivory Coast 6.625% 2048 1,462 0.1
US dollar denominated Dominican Republic 5.875% 30/01/2060 1,366 0.1
US dollar denominated Mexico 5.75% 12/10/2110 1,409 0.2
Brazilian real denominated Brazil CPI Linked 15/05/2045 2,145 0.2
Dominican peso denominated Dominican Republic 9.75% 06/06/2026 720 0.1
Indonesian rupiah denominated Indonesia 9% 15/03/2029 1,993 0.2
Indonesian rupiah denominated Indonesia 7.375% 15/05/2048 1,963 0.2
Total Bonds 11,058 1.1
Total Investments 1,043,795 99.7
Net Liquid Assets 3,640 0.3
Total Assets (before deduction of borrowings) 1,047,435 100.0
The Scottish American Investment Company P.L.C.
33
Hoover Dam, Arizona/Nevada, USA. © Adam Mustafa/Getty Images.
Strategic report
Annual Report and Financial Statements 2024
34
Property
portfolio
Location
Type
Tenant
2024
EPC
#
Rating
2024
Value
£’000
2024
% of total
assets
2023
Value
£’000
Biggleswade* Warehouse Sherwin‑Williams UK Limited – – 5,700
Crawley
†
Motorway Services Moto Hospitality Limited B 19,700 1.9 –
RPI‑linked annual increase
(uncapped till May 2025, then
collar 2% cap 4%)
Denbigh Supermarket Aldi Stores Limited B 4,800 0.5 4,800
Fixed‑increases 5‑yearly
(2.5% compounded)
Earley Public House Spirit Pub Company (Managed)
Limited (Greene King plc)
C 2,500 0.2 2,600
5‑yearly open market review
Gosport Supermarket Aldi Stores Limited A 5,550 0.5 5,550
RPI‑linked collar 1% cap
2.75%
Holyhead Hotel Premier Inn Hotels Limited A 6,500 0.6 6,550
CPI‑linked with 4% cap
New Romney Holiday Village Park Resorts Limited C 19,250 1.8 19,250
RPI‑linked collar 3% cap 7%
p.a. + turnover‑related top up
5‑yearly
Otford Public House Spirit Pub Company (Managed)
Limited (Greene King plc)
C 1,700 0.2 1,700
5‑yearly open market review
Ringwood Hotel Premier Inn Hotels Limited B 8,350 0.8 8,650
CPI‑linked with 4% cap
Southend‑on‑Sea Warehouse Booker Limited C 8,500 0.8 7,900
Fixed increases 5‑yearly
(2.5% compounded)
Taunton Bowling Alley Mitchells & Butlers Retail (No.2)
Limited (sublet to Hollywood
Bowl Group plc)
A 3,900 0.4 3,650
RPI‑linked until 2024, then
5‑yearly open market
Witney
†
Industrial James Donaldson Group Limited A 14,700 1.4 –
RPI‑linked collar 2% cap 4%
95,450 9.1 66,350
* Sold during the year.
†
Purchased during the year.
#
See glossary of terms and alternative performance measures on pages 122 to 124.
The Scottish American Investment Company P.L.C.
35
Property portfolio by sector:
1
2
3
5
6
4
7
Sector 2024
%
2023
%
1 Industrial 24.2 20.3
2 Roadside 20.8 –
3 Caravan Park 19.8 29.6
4 Hotels 15.4 21.9
5 Shops 11.0 15.6
6 Pubs 4.4 6.3
7 Bowling Alley 4.4 6.3
Property portfolio income by review pattern:
3
4
5
2
1
Review pattern 2024
%
2023
%
1 Retail price index (annual) 49.7 28.5
2 Consumer price index (fiveyearly) 16.5 18.1
3 Fixed increases (five yearly) 15.5 22.1
4 Open market (five yearly) 12.3 26.6
5 Retail price index (five yearly) 6.0 4.7
Property performance and key features:
2024 2023
Return on SAINTS property portfolio (%) 8.3 (1.8)
Return on MSCI UK Quarterly Property Index (%)* 5.2 (1.4)
Weighted average unexpired lease term (years) 16.0 12.7
Weighted average unexpired lease term (breaks included) (years) 15.0 11.3
* © 2024 MSCI Inc. All rights reserved.
Strategic report
Annual Report and Financial Statements 2024
36
Notes
¶
31 December
2024
31 December
2023 % change
Total assets (before deduction
of borrowings)
†
£1,047.4m £1,029.9m
Borrowings (book value) 12 £94.7m £94.7m
Shareholders’ funds 14 £952.7m £935.2m
Net asset value per ordinary
share (borrowings at fair value)
†
557.8p 539.4p 3.4
Net asset value per ordinary
share (borrowings at book value)
539.3p 524.5p 2.8
Share price
‡
498.5p 535.0p (6.8)
Benchmark
#
1 7. 5
(Discount)/premium –
(borrowings at fairvalue)
†
(10.6%) (0.8%)
(Discount)/premium –
(borrowings at book value)
†
(7.6%) 2.0%
Revenue earnings per
ordinary share
7 14.50p 13.48p 7.6
Dividends paid and payable in
respect oftheyear
8 14.875p 14.10p 5.5
Ongoing charges
†
0.58% 0.58%
Active share
†
86% 87%
Year to 31 December 2024 2023
Total returns (%)
†‡
Net asset value (borrowings at fair value) 6.1 11.8
Net asset value (borrowings at book value) 5.6 12.5
Share price (4.2) 8.2
Benchmark
#
19.8 15.7
The following information
illustrates how SAINTS has
performed over the year to
31December 2024.
* For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
†
Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
#
The Company’s benchmark is the FTSE All‑World Index (in sterling terms).
‡
Source: LSEG/Baillie Gifford and relevant underlying data providers. See disclaimer on page 116.
¶
See notes to the financial statements on pages 92 to 107.
Past performance is not a guide to future performance.
One year
summary
*
The Scottish American Investment Company P.L.C.
37
†
Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
Past performance is not a guide to future performance.
Year to 31 December 2024 2024 2023 2023
Year’s high and low High Low High Low
Net asset value
(borrowings at fair value)
†
575.0p 528.5p 542.4p 495.7p
Net asset value
(borrowings at book value)
558.0p 511.5p
527.5p
479.2p
Share price 535.0p 485.5p 542.0p 452.0p
Premium/(discount) –
borrowings at fair value
†
(0.8%) (12.4%) 6.0% (7.2%)
Premium/(discount) –
borrowings at book value
†
2.0% (9.4%) 2.5% (10.9%)
Year to 31 December 2024 2023
Net return per ordinary share
Revenue 14.50p 13.48p
Capital 14.62p 45.63p
Total 29.12p 59.11p
Strategic report
Annual Report and Financial Statements 2024
38
* The Company’s benchmark is the FTSE All‑World Index (in sterling terms).
†
See disclaimer on page 116.
#
Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
Past performance is not a guide to future performance.
Five year
summary
Dividend versus Inflation
(figures rebased to 100 at 31 December 2019)
20242019 2020 2021 2022 2023
Cumulative to 31 December
● SAINTS dividend ● CPI
Source: LSEG and relevant underlying index providers
†
.
100
125
115
120
110
105
The following charts
provide a comparison
of SAINTS’ dividends to
inflation, dividend growth
and performance relative
to the benchmark* index
over the five year period to
31December 2024.
Premium/(discount)
#
to net asset value
(plotted on a monthly basis)
20242019 2020 2021 2022 2023
Years to 31 December
● SAINTS premium/(discount) – fair value
#
Source: LSEG/Baillie Gifford and relevant underlying index providers†.
The premium/(discount) is the difference between SAINTS’ quoted share
price and its underlying net asset value.
● SAINTS premium/(discount) – book value
#
(15%)
(10%)
10%
5%
0%
(5%)
The Scottish American Investment Company P.L.C.
39
20242019 2020 2021 2022 2023
Cumulative to 31 December
● NAV total return
(fair value)
#
● Share price
total return
#
● Benchmark*
total return
#
Source: LSEG/Baillie Gifford and relevant underlying index providers
†
.
80
200
160
180
140
120
100
20242020 2021 2022 2023
Years to 31 December
● SAINTS dividend (pence)
Source: LSEG/Baillie Gifford and relevant underlying index providers
†
.
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
4.0
4.2
Five year quarterly dividends paid (pence)
* The Company’s benchmark is the FTSE All‑World Index (in sterling terms).
†
See disclaimer on page 116.
#
Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
Past performance is not a guide to future performance.
Five year total return
#
performance
(figures rebased to 100 at 31 December 2019)
Strategic report
Annual Report and Financial Statements 2024
40
Revenue Gearing ratios
Year to
31 December
Gross
revenue
£’000
Available
for ordinary
shareholders
£’000
Earnings per
ordinary
share*
p
Dividend per
ordinary share
(net)
p
Ongoing
charges
†
%
Equity
gearing
†
%
Potential
gearing
†
%
2014 18,782 13,940 10.51 10.50 0.90 1 25
2015 18,626 13,913 10.47 10.70 0.93 2 24
2016 18,630 13,939 10.46 10.825 0.87 0 19
2017 20,484 15,213 11.33 11.10 0.80 (6) 17
2018 21,743 16,230 11.75 11.50 0.76 (6) 17
2019 22,950 17,096 11.87 11.875 0.77 (3) 14
2020 23,568 17,519 11.41 12.00 0.70 (7) 11
2021 27,980 21,820 12.79 12.675 0.62 (4) 10
2022 30,043 24,346 13.82 13.82 0.59 (2) 11
2023 30,078 23,960 13.48 14.10 0.58 (2) 10
2024 32,387 25,822 14.50 14.875 0.58 (2) 10
Ten year
record
*
Capital
At
31 December
Total
assets
£’000
Debenture
stocks
and loans
£’000
Shareholders’
funds
£’000
Net
asset value
per share
(nominal/par)
p
Net
asset value
per share
(book)
p
Net
asset value
per share
(fair)
†
p
Share
price
p
Premium/
(discount)
†
(book)
%
Premium/
(discount)
(fair)
†
%
2014 429,167 85,361 343,806 263.2 259.1 243.7 249.6 (3.7) 2.4
2015 433,209 84,756 348,453 265.2 261.7 247.5 261.5 (0.1) 5.7
2016 515,622 84,112 431,510 326.6 323.5 309.2 324.0 0.2 4.8
2017 581,366 83,428 497,938 368.7 366.2 355.6 368.0 0.5 3.5
2018 566,154 82,701 483,453 345.0 343.0 336.4 351.0 2.3 4.3
2019 682,418 81,930 600,488 408.4 407.1 400.9 426.0 4.6 6.3
2020 812,270 81,108 731,162 450.4 449.7 446.1 464.0 3.2 4.0
2021 1,025,346 95,161 930,185 529.8 529.7 528.4 541.0 2.1 2.4
2022 941,388 94,714 846,674 478.9 479.0 495.5 508.0 6.1 2.5
2023 1,029,912 94,728 935,184 524.3 524.5 539.4 535.0 2.0 (0.8)
2024 1,047,435 94,742 952,693 539.2 539.3 5 5 7. 8 498.5 (7.6) (10.6)
For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
* The calculation of earnings per ordinary share is based on the revenue column of the return on ordinary activities after taxation in the Income statement
and the weighted average number of ordinary shares in issue.
†
Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
Past performance is not a guide to future performance.
The Scottish American Investment Company P.L.C.
41
For a definition of terms see glossary of terms and alternative performance measures on pages 122 to 124.
#
The Company’s benchmark is the FTSE All‑World Index (in sterling terms).
* The calculation of earnings per ordinary share is based on the revenue column of the return on ordinary activities after taxation in the Income statement
and the weighted average number of ordinary shares in issue.
†
Alternative performance measure – see glossary of terms and alternative performance measures on pages 122 to 124.
Past performance is not a guide to future performance.
Cumulative performance (taking 2014 as 100)
At
31 December
Net asset
value per
share (fair)
†
Net asset
value (fair)
total return
†
Share
price
Share
price total
return
†
Benchmark
#
Benchmark
#
total return
†
Earnings
per ordinary
share*
Dividends
per ordinary
share (net)
Consumer
price
index
2014 100 100 100 100 100 100 100 100 100
2015 102 106 105 109 102 104 100 102 100
2016 127 138 130 141 128 135 100 103 102
2017 146 164 147 165 142 153 108 106 105
2018 138 160 141 162 134 148 112 110 107
2019 165 197 171 203 160 181 113 113 108
2020 183 225 186 227 177 205 109 114 109
2021 217 273 217 271 208 246 122 121 115
2022 203 263 204 262 189 228 131 132 127
2023 221 295 214 283 213 263 128 134 132
2024 229 313 200 272 251 316 138 142 136
Compound annual returns
5 year 6.8% 9.7% 3.2% 6.0% 9.4% 11.7% 4.1% 4.6% 4.6%
10 year 8.6% 12.1% 7.2% 10.5% 9.6% 12.2% 3.3% 3.5% 3.0%
Ten year total return
†
performance
● NAV total return (fair value)
†
50
100
150
200
250
300
350
● Share price total return
†
● Benchmark
#
total return
†
0
2014 2015 2016 2017 2019 2020 2021 2022 2023 20242018
Strategic report
Annual Report and Financial Statements 2024
42
The Company publishes an annual stewardship
report which includes examples of engagement on
environmental, social and governance (‘ESG’) matters,
as well as setting out the Managers’ approach to proxy
voting. The annual stewardship report is available on
the Company’s website saints-it.com.
Environmental,
socialandgovernance
The Scottish American Investment Company P.L.C.
43
Business model
Business and status
The Company is an investment company within the
meaning of section 833 of the Companies Act 2006
and carries on business as an investment trust.
Investment trusts are UK public listed companies
and their shares are traded on the London Stock
Exchange. They invest in a portfolio of assets in
order to spread risk. The Company has a fixed share
capital although, subject to shareholder approvals
sought annually, it may purchase its own shares or
issue shares. The price of the Company’s shares
is determined, like other listed shares, by supply
anddemand.
The Company has been approved as an investment
trust by HM Revenue & Customs subject to
the Company continuing to meet the eligibility
conditions. The Directors are of the opinion that the
Company has continued to conduct its affairs so as
to enable it to comply with the ongoing requirements
of section 1158 of the Corporation Tax Act 2010 and
the Investment Trust (Approved Company) (Tax)
Regulations 2011.
The Company is an Alternative Investment Fund for
the purposes of the UK Alternative Investment Fund
Managers Regulations.
Objective and policy
SAINTS’ objective is to deliver real dividend growth by
increasing capital and growing income.
SAINTS’ policy is to invest mainly in equity markets,
but other investments may be held from time to time
including bonds, property and other asset classes.
The Board believes that a flexible approach to
investment is important. As market valuations across
and within different asset classes vary over time,
the ability to adjust asset allocation and portfolio
positioning in response to these variations is
important. There are no pre‑defined maximum or
minimum exposure levels for asset classes, sectors
orregions.
The Board also believes that a medium to long term
approach is likely to lead to the best investment
returns. SAINTS’ performance in any one year is likely
to differ from that of its benchmark index, sometimes
by a significant amount. Financial markets are volatile,
particularly over short time periods, but the Manager
is encouraged to view such volatility as giving rise
to investment opportunities rather than as a risk to
beavoided.
In order to achieve real growth in the dividend, the
income generated from SAINTS’ assets needs to grow
over the medium to longer term at a faster rate than
inflation. Consequently, the focus of the portfolio is on
listed equities. Investments are regularly considered
and made in a broad range of other asset types and
markets. Derivative and structured instruments may
also be used with prior Board approval, either to
hedge an existing investment or a currency exposure
or to exploit an investment opportunity.
The equity portfolio consists of shares listed both
in the UK and in overseas markets. The portfolio
is diversified across a range of holdings with little
regard paid to the weighting of individual companies
in the benchmark index. The number of individual
companies will vary over time and the portfolio is
managed on a global basis rather than as a series of
regional sub‑portfolios.
Business
review
Strategic report
Annual Report and Financial Statements 2024
44
Investments are made in markets other than listed
equity markets when prospective returns appear
to be superior to those from equity markets or are
considered likely to exceed SAINTS’ borrowing costs.
The list of these other investments will vary from time
to time as opportunities are identified but include
investment grade bonds, high yield bonds, property,
forestry, private equity and other asset types.
As an investment trust, SAINTS is able to borrow
money and does so when the Board and Managers
have sufficient conviction that the assets funded
by borrowed monies will generate a return in
excess of the cost of borrowing. Whenever long
term borrowings cannot be fully invested in such
manner, the borrowed funds are used to purchase
a diversified portfolio of similar maturity bonds to
the borrowings. This has the effect of hedging out
much of the interest rate risk and removing the
mismatch between borrowing costs and associated
investment returns. Gearing levels are discussed by
the Board and Managers at every Board meeting and
monitored between meetings. The Board will not take
out additional borrowings if this takes the level of
effective gearing beyond 130%.
The starting position for investment of shareholders’
funds is 100% exposure to equity markets.
Theallocation to equity markets at any point in
time will reflect the Board’s and Managers’ views
on prospective returns from equities and the full
range of alternative investment opportunities but,
inbroad terms, SAINTS will gear up through the use
of borrowings if equity markets look undervalued and
will hold cash or invest in non‑equity assets when
equity markets look overvalued.
The exposure to listed equities is set within a range
of 75% to 125% of shareholders’ funds in normal
circumstances. The number of individual equities held
will vary over time but, in order to diversify risk, will
typically be in a range between 50 and 100.
The Board monitors the aggregate exposure to any
one entity across the whole investment portfolio.
Themaximum exposure at time of investment to
any one entity is 15% of total assets. The Board is
notified in advance of any transaction that would
take an individual equity holding above 5% of
shareholders’ funds. SAINTS does from time to time
invest in other UK listed investment companies.
Themaximum permitted investment in such
companies is 15% of gross assets.
An overview by the Manager is given on pages15
to 23 and a detailed analysis of the Company’s
investment portfolio held at the year end is set out on
pages 25 to 35.
Board oversight
Baillie Gifford & Co Limited, a wholly owned
subsidiary of Baillie Gifford & Co, has been appointed
by the Company as its Alternative Investment Fund
Manager (AIFM). The investment management
function has been delegated to Baillie Gifford &
Co and the management of the property portfolio
to OLIM Property Limited. When assessing the
performance of the Company and the Managers, the
Board looks at dividend growth, share price and at
net asset value total returns relative to inflation and
the benchmark total return. The Board believes it is
appropriate to make this assessment over a medium
to long term timeframe, a minimum of five years, in
accordance with the medium to long term approach
taken to investment.
The Board monitors closely the activities of the
Managers, the composition of the investment
portfolio and the level of gearing.
The Board sets a number of guidelines and places
limits and restrictions on the Managers in order
to minimise the risk of permanent loss of capital.
Within these constraints, the Board encourages
theManagers to maximise long term capital and
income growth rather than minimise short term
volatility in the capital value of the investment
portfolio. Themain source of both long term return
and short term volatility in SAINTS’ portfolio is likely
to be the investments in listed equities.
The Board also monitors SAINTS’ revenue position
and receives regular estimates from the Managers of
likely income growth. The level of dividend in any one
year is set after assessing the income generated by
the portfolio in that year, the level of revenue reserves
and long term trends in income.
OLIM Property Limited provide the Board with
quarterly updates and meet with the Board at least
once a year or otherwise when required. Annually,
the Board receive a report from Baillie Gifford & Co
Limited detailing its review of OLIM’s asset allocation
policy, business continuity plan and any breaches,
errors or complaints recorded.
The Scottish American Investment Company P.L.C.
45
Discount/premium
The Company annually seeks shareholder authority
to buy back its own shares at a discount to net asset
value and to hold such shares in treasury as well as
to issue new shares and sell treasury shares at a
premium to net asset value.
The Company can issue shares at such times as the
premium indicates that demand is not being met by
natural liquidity in the market.
Buy‑back powers have been used in the past in
circumstances when large lines of stock cannot be
absorbed by the market. The discount or premium,
in absolute terms and relative to other similar
investment trust companies, and the composition
of the share register are discussed at every Board
meeting. While there is no discount target, the Board
is aware that discount volatility is unwelcome to
many shareholders and that share price performance
is the measure used by most investors. The Board
oversees the Managers’ marketing programme which
is designed to stimulate demand for the Company’s
shares, provide effective communication to existing
and potential shareholders and maintain the profile
of the Company.
During the year to 31 December 2024, the Company
issued no ordinary shares at a premium to net asset
value (2023 – 1,565,000 shares). 1,665,185 shares
were bought back at a cost of £8,529,315 and held
in treasury (2023 – no shares were bought back).
Between 1 January 2025 and 10 February 2025,
the Company bought back 1,825,000 shares into
treasury at a cost of £9,419,917. 3,490,185 shares
were held in treasury as at 10February 2025.
Borrowings
As at 31 December 2024, the Company had £95m
of long term secured privately placed loan notes as
detailed on page 99.
Performance
At each Board meeting, the Directors consider a
number of performance measures to assess the
Company’s success in achieving its objectives.
Key performance indicators
The key performance indicators (KPIs) used to
measure the progress and performance of the
Company over time are established industry
measures and are as follows:
• dividend per share;
• earnings per share;
• the movement in net asset value per ordinary
share (after deducting borrowings at fair value)
compared to the benchmark;
• the movement in the share price;
• the premium/discount (after deducting borrowings
at fair value); and
• ongoing charges.
An explanation of these measures can be found in
the glossary of terms and alternative performance
measures on pages 122 to 124.
The one, five and ten year records of the KPIs are
shown on pages 36 to 41.
In addition to the above, the Board considers peer
group comparative performance.
Principal and emerging risks
As explained on pages 68 and 69, there is an ongoing
process for identifying, evaluating and managing the
risks faced by the Company on a regular basis. The
Directors have carried out a robust assessment of
the principal and emerging risks facing the Company
including those that would threaten its business
model, future performance, regulatory compliance,
solvency or liquidity. There have been no significant
changes to the principal risks during the year.
Adescription of these risks and how they are being
managed or mitigated is set out on the following
pages. An upwards arrow, dash or downwards arrow
has been included to show if the risk level has
increased, not changed or decreased since it was
reported in last year’s Annual Report and Financial
Statements.
The Board considers geopolitical concerns including
the war in Ukraine, China/US tensions and the
conflict in the Middle East and macroeconomic
concerns (including inflation and interest rates)
to be factors which exacerbate existing areas of
risk as categorised and further explained on the
followingpages.
Strategic report
Annual Report and Financial Statements 2024
46
Financial risk
What is the risk?
The Company’s assets consist mainly
of listed securities and its principal
and emerging risks are therefore
market related and include market
risk (comprising currency risk, interest
rate risk and other price risk), liquidity
risk and credit risk. An explanation of
those risks and how they are managed
is contained in note18 to the Financial
Statements onpages101 to 106.
How is it managed?
The Board has, in particular, considered
the impact of heightened market volatility
from macroeconomic factors, including
inflation and continued high interest rates,
and geopolitical concerns. To mitigate this
risk at each Board meeting the Manager
provides an investment policy paper which
includes a detailed explanation of significant
stock selection decisions and the overall
rationale for holding the current portfolio.
Consideration is given to portfolio movements
and the top and bottom contributors to
performance. The investment approach is
considered in detail at the annual Strategy
meeting. The value of the Company’s
investment portfolio and its income
stream would be affected by any currency
movements, butthe Board believes the nature
and diversification of the Company’s equity
portfolio moderates such risks.
Rating and
change
Current assessment of risk
Risk level: High
This risk is considered to
have increased. Although
macroeconomic risks such as
rising interest rates and inflation
have reduced, the prospect of
market volatility remains from
deteriorating geopolitical stability
Investment strategyrisk
What is the risk?
Pursuing an investment strategyto fulfil
the Company’s objective which the
market perceives to be unattractive or
inappropriate, or the ineffective
implementation of an attractive or
appropriate strategy, may lead to
reduced returns for shareholders and,
as a result, adecreased demand for the
Company’s shares. This may lead to the
Company’s shares trading at a widening
discount to their net asset value.
How is it managed?
To mitigate this risk, the Board regularly
reviews and monitors the Company’s
objective and investment policy and
strategy; the investment portfolio and its
performance; the level of discount/premium
to net asset value at which the shares
trade;and movements in the shareregister
and raise any matters of concern with the
Managers.
Rating and
change
Current assessment of risk
Risk level: High
This risk is considered to be
stable as there are signs that the
market’s appetite for investment
risk, and willingness to pay for
future growth, is recovering
despite ongoing macroeconomic
and geopolitical concerns.
Lower inflation has improved the
achievement of real dividend
growth over the shorter term.
Discount risk
What is the risk?
The discount/premium at which the
Company’s shares trade relative to its
net asset value can change. The risk
of a widening discount is that it may
undermine investor confidence in the
Company.
How is it managed?
The Board monitors the level of discount/
premium at which the shares trade and
the Company has authority to buy back its
existing shares when deemed by the Board
to be in the best interests of the Company
and itsshareholders.
Rating and
change
Current assessment of risk
Risk level: High
The Company’s shares began
the year trading at a premium
and moved to a discount early in
January 2024 where it remained
for the rest of the year. The
Company’s shares traded at
an average discount of 6.2%
since moving to a discount and it
bought back 1,665,185 shares. No
shares were issued.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
The Scottish American Investment Company P.L.C.
47
Climate and governance risk
What is the risk?
Perceived problems on Environmental,
Social and Governance (‘ESG’) matters in
an investee company could lead to that
company’s shares being less attractive
to investors, adversely affecting its share
price, in addition to potential valuation
issues arising from any direct impact of
the failure to address the ESG weakness
on the operations or management of
the investee company (for example in
the event of an industrial accident or
spillage). Environmental factors are also
of significant importance in relation to
the property investments as, forexample,
flood risk or the use of deleterious
materials could reduce the attractiveness
of a property and potentially its valuation
and rental income prospects. Repeated
failure by the Investment Manager
and Property Manager to identify ESG
weaknesses in investee companies or
property investments, could lead to
the Company’s own shares being less
attractive to investors, adversely affecting
its own share price.
How is it managed?
This is mitigated by the Investment
Managers’ strong ESGstewardship and
engagement policies, and the Board’s own
ESG policy, which is available to view on the
Managers’ website: saints-it.com, both of
which have been adopted by the Company,
and which are fully integrated into the
investment process as well as the extensive
up‑front and ongoing due diligence which
the Investment Manager undertakes on
each investee company. Thedue diligence
conducted by the Investment Manager and
Property Manager includes assessment
of the risks inherent in climate change
(see pages 70 to 71). The Directors have
considered the impact of climate change on
the Financial Statements of the Company
and this is included in note 1 to the Financial
Statements on pages 92 to 93.
Rating and
change
Current assessment of risk
Risk level: Moderate
The Investment Manager
andProperty Manager continued
to employ strong ESG stewardship
and engagement policies.
Regulatory risk
What is the risk?
Failure to comply with applicable
legal and regulatory requirements
such as the tax rules for investment
companies, the FCA Listing Rules
and the Companies Act could lead to
suspension of the Company’s Stock
Exchange listing, financial penalties,
aqualified audit report or the Company
being subject to tax on capitalgains.
Changes to the regulatory environment
could negatively impact the Company.
How is it managed?
To mitigate this risk, BaillieGifford’s
Business Risk, Internal Audit and
Compliance departments provide regular
reports to the Audit Committee on
Baillie Gifford’s monitoring programmes.
Major regulatory change could impose
disproportionate compliance burdens
on the Company. In such circumstances
representation is made to ensure that the
special circumstances of investment trusts
are recognised. Shareholder documents and
announcements, including the Company’s
published Interim and Annual Report
and Financial Statements, are subject to
stringent review processes, and procedures
are in place to ensure adherence to the
Transparency Directive and the Market
Abuse Directive with reference to inside
information.
Rating and
change
Current assessment of risk
Risk level: Low
This risk is considered to be
unchanged. All control procedures
were working effectively and
there were no material regulatory
changes that have impacted the
Company during the year.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
Strategic report
Annual Report and Financial Statements 2024
48
Custody and depositary risk
What is the risk?
Safe custody of the Company’s assets
may be compromised through control
failures by the Depositary, including
breaches of cyber security incidents.
How is it managed?
To mitigate this risk, the Board receives
six‑monthly reports fromthe Depositary
confirming safe custody of the Company’s
assets held by the Custodian. Cash and
portfolio holdings areindependently
reconciled to the Custodian’s records by the
Managers. The Custodian’s assured internal
controls assurance reports are reviewed by
Baillie Gifford’s Business Risk Department
and a summary of the key points is reported
to the Audit Committee and any concerns
investigated.
Rating and
change
Current assessment of risk
Risk level: Low
This risk is considered to be
unchanged. All control procedures
were working effectively.
Operational risk
What is the risk?
Failure of Baillie Gifford’s systems
or those of other third party service
providers could lead to an inability
to provide accurate reporting and
monitoring or a misappropriation of
assets.
How is it managed?
To mitigate this risk, BaillieGiffordhas a
comprehensive business continuity plan
which facilitates continued operation of the
business in the event of a service disruption or
major disaster. TheAudit Committee reviews
Baillie Gifford’s Report on Internal Controls
and reports by other key third party providers
are reviewed by Baillie Gifford on behalf of
the Board and a summary of the key points
is reported to the Audit Committee and any
concerns investigated. The other key third
party service providers have not experienced
significant operational difficulties affecting
their respective services to theCompany.
Rating and
change
Current assessment of risk
Risk level: Low
This risk is considerred to be
unchanged. All control procedures
were working effectively.
Leverage risk
What is the risk?
The Company may borrow money
for investment purposes (sometimes
known as ‘gearing’ or ‘leverage’). If
the investments fall in value, any
borrowings willmagnify the extent
of this loss. If loan covenants are
breached, the Company mayhave to
sell investments torepay borrowings.
TheCompany can also make use of
derivative contracts.
How is it managed?
To mitigate this risk, allborrowingsrequire
the prior approval of the Board and leverage
levels are discussed by the Board and
Managers at every meeting and covenant
levels are monitored regularly. Details of
the Company’s current borrowings can be
found in note 12 on page 99. The majority
of the Company’s investments are in quoted
securities that are readily realisable. Further
information on leverage can be found on
page 116 and the glossary of terms and
alternative performance measures on pages
122 to 124.
Rating and
change
Current assessment of risk
Risk level: Low
This risk is considered to be
unchanged. The Company has
long term borrowings in place in
form of its loan notes, which have
maturity dates in 2036, 2045 and
2049.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
The Scottish American Investment Company P.L.C.
49
Political risk
What is the risk?
Political change in areas in which the
Company invests or may invest may
have practical consequences for the
Company.
How is it managed?
Political developments are closely monitored
and considered by the Board and Managers.
The Board continues to assess the potential
consequences for the Company’s future
activities including those which may arise
from growing protectionism. The Board also
remains watchful of broader geopolitical
tensions and the associated potential for
armed conflict. The Board considers the
nature and diversification of the Company’s
investments provides a good degree of
protection against suchpolitical risks.
Rating and
change
Current assessment of risk
Risk level: High
This risk is considerred to be
increasing as governments and
consumers around the world
continue to assess the impact
of heightened geopolitical
tensions and conflicts as well
as challenging macroeconomic
economic conditions.
Cyber security risk
What is the risk?
A cyber attack on Baillie Gifford’s
network or that of a third party
service provider could impact the
confidentiality, integrity or availability
of data and systems. Emerging
technologies, including AI and quantum
computing capabilities, may introduce
new, and increase existing information
security risks that impact operations.
How is it managed?
To mitigate this risk, the Audit Committee
reviews Reports on Internal Controls
published by Baillie Gifford and other third
party service providers. Baillie Gifford’s
Business Risk Department report to the
Audit Committee on the effectiveness of
information security controls in place at
Baillie Gifford and its business continuity
framework. Cyber security due diligence is
performed by Baillie Gifford on third party
service providers which includes a review of
crisis management and business continuity
frameworks.
Rating and
change
Current assessment of risk
Risk level: Moderate
This risk is considered to
be increasing due to recent
indications that the continuation
of geopolitical tensions and an
observed increase in malign cyber
activity. Emerging technologies,
including AI, could potentially
increase information security
risks. In addition, service providers
operate a hybrid approach of
remote and office working,
thereby increasing the potential
ofacyber security threat.
Emerging risks
As explained on pages 68 and 69, the Board has regular discussions on principal risks and uncertainties, including any risks which
are not an immediate threat but could arise in the longer term. The Board considers that the key emerging risks arise from the
interconnectedness of global economies and the related exposure of the investment portfolio to external and emerging threats
such as escalating geopolitical tensions, cyber security risks including developing AI and quantum computing capabilities, and
new coronavirus variants or similar public health threats. This is mitigated by the Board discussing at each Board meeting global
economic and geopolitical factors and how these might impact the Company. The Board also considers the Investment Managers’
close links to the investee companies and its ability to ask questions on contingency plans. The Investment Manager believes the
impact of such events may be to slow growth rather than to invalidate the investment rationale. The Managers monitor certain
emerging risks and have established a group to manage the response to any future events that might result in heightened levels of
market volatility. Regular exercises are carried out to test the Managers’ response to various scenarios.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
Strategic report
Annual Report and Financial Statements 2024
50
Viability statement
In accordance with provision 31 of the UK Corporate
Governance Code, the Directors have assessed
the prospects of the Company. The Directors have
elected to do this over a period of five years, which
they continue to believe to be appropriate as it
reflects the longer term investment strategy of the
Company in terms of both investment horizon and
income growth, and to be a period during which,
inthe absence of any adverse change to the
regulatory environment and to the tax treatment
afforded to UK investment trusts, they do not expect
there to be any significant change to the current
principal risks facing SAINTS nor to the controls in
place to effectively mitigate those risks. Moreover,
the Directors do not envisage any change in strategy
or any events which would prevent the Company
from operating over a period of five years.
In considering the viability of the Company, the
Directors have conducted a robust assessment
of each of the principal and emerging risks and
uncertainties, including climate change, detailed
on pages 45 to 49 and in particular the impact of
market risk where a significant fall in global equity
markets would adversely impact the value of the
investment portfolio. The Directors have also
considered the Company’s income and expenses
and dividend policy having undertaken a review
of revenue projections over a five year period and
its liquidity in the context of the majority of its
investments being listed equities which are readily
realisable and so capable of being sold to provide
funding if required. Leverage comprising private
placement debt totalling £95m: £40m repayable in
April 2045, £40m repayable in April 2049 and £15m
repayable in June 2036, has also been considered
with specific leverage and liquidity stress testing
conducted during the year, including consideration
of the risk of further market deterioration resulting
from increasing geopolitical tensions. The stress
testing did not indicate any matters of concern.
Inaddition, all of the key operations required by
the Company are outsourced to third party service
providers and it is reasonably considered that
alternative providers could be engaged at relatively
short notice.
Based on the Company’s processes for monitoring
revenue projections, share price discount/premium,
the Managers’ compliance with the investment
objective, asset allocation, the portfolio risk profile,
leverage, counterparty exposure, liquidity risk and
financial controls, the Directors have concluded that
there is 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.
Promoting the success of the Company
(section 172 statement)
Under section 172 of the Companies Act 2006,
the directors of a company must act in the way
they consider, in good faith, would be most likely
to promote the success of the company for the
benefit of its members as a whole, and in doing
so have regard (amongst other matters and to the
extent applicable) to: a) the likely consequences
of any decision in the long term, b) the interests
of the company’s employees, c) the need to
foster the company’s business relationships with
suppliers, customers and others, d) the impact of
the company’s operations on the community and
the environment, e) the desirability of the company
maintaining a reputation for high standards of
business conduct, and f) the need to act fairly as
between members of the company.
In this context, having regard to the Company
beingan externally‑managed investment company
with no employees, the Board considers the
Company’s key stakeholders to be: its shareholders;
its externally‑appointed Managers (Baillie Gifford
and OLIM Property); its portfolio companies; other
professional service providers (corporate broker,
registrar and depositary); lenders; wider society and
the environment.
The Board considers that the interests of the
Company’s key stakeholders are aligned, in terms
of wishing to see the Company deliver sustainable
long‑term growth, in line with the Company’s
stated objective and strategy, and meet the highest
standards of legal, regulatory, and commercial
conduct, with the differences between stakeholders
being merely a matter of emphasis on those elements.
The Scottish American Investment Company P.L.C.
51
The Board’s methods for assessing the Company’s progress in the context of its stakeholders’ interests are
set out below.
Stakeholder Why we engage How we engage and what we do
Shareholders Shareholders are, collectively, the
Company’s owners: providing them with a
return for their investment in accordance
with the Company’s investment policy and
objective is the reason for its existence.
The Board places great importance on communication with
shareholders. The Annual General Meeting provides the key
forum for the Board and Managers to present to shareholders
onthe Company’s performance, future plans and prospects.
Italso allows shareholders the opportunity to meet with the
Board and Managers and raise questions and concerns.
TheChair is available to meet with shareholders as appropriate.
The Managers meet regularly with shareholders and their
representatives, reporting their views back to the Board.
Directors also attend certain shareholder presentations, in order
to gauge shareholder sentiment first hand. Shareholders may
also communicate with members of the Board at any time by
writing to them at the Company’s registered office or to the
Company’s broker. These communication opportunities help
inform the Board when considering how best to promote the
success of the Company for the benefit of all shareholders over
the long term.
Baillie Gifford –
Managers and
Secretaries
OLIM – Property
Manager
The Company’s Board has delegated the
management of the Company’s portfolio
to Baillie Gifford and the management
of the Company’s property portfolio to
OLIM Property. The administration of the
Company’s operations including fulfilment
of regulatory and taxation reporting
requirements, to Baillie Gifford. Baillie
Gifford is therefore responsible for the
substantial activities of the Company and
has the most immediate influence on its
conduct towards the other stakeholders,
subject to the oversight and strategic
direction provided by the Board.
The Board seeks to engage with its Managers and Secretaries,
and other service providers, in a collaborative and collegiate
manner, encouraging open and constructive discussion and
debate, while also ensuring that appropriate and regular
challenge is brought and evaluation conducted. This approach
aims to enhance service levels and strengthen relationships with
the Company’s providers, with a view to ensuring the interests
of the Company’s shareholders are best served by keeping cost
levels proportionate and competitive, and by maintaining the
highest standards of business conduct.
Portfolio
companies
As all of the Company’s operations are
conducted by third party professional
providers, it is the companies held in
its investment portfolio which have the
primaryreal‑world impact in terms of
social and environmental change, both
positively and negatively, as well as
generating, through their commercial
success, theinvestment growth sought by
the Company’s shareholders. The investee
companies have an interest in understanding
their shareholders’ investment rationale in
order to assure themselves that long‑term
business strategies will be supported.
The Board is cognisant of the need to consider the impact of
the Company’s investment strategy and policy on wider society
and the environment. The Board considers that its oversight
of environmental, social and governance (‘ESG’) matters is an
important part of its responsibility to all stakeholders and the
Board has published its own ESG policy. The Board’s review of
the Managers includes an assessment of their ESG approach
and its application in making investment decisions. The Board
regularly reviews Governance Engagement reports, which
document the Managers’ interactions with investee companies
on ESG matters (see page 42).
Investment
platforms
Investment platforms provide an interface
with shareholders who invest in the
Company indirectly.
The Managers liaise with the various investment platforms on
strategies for improving communications with the Company’s
shareholders who hold their shares via these platforms.
Anannual timetable of key dates is published on the Company’s
website, for the ease of reference of such shareholders. Further
details on how to vote via an investment platform can be found
on pages 109 and 115.
Strategic report
Annual Report and Financial Statements 2024
52
Stakeholder Why we engage How we engage and what we do
Brokers The Company’s brokers provide an interface
between the Company’s Board and its
institutional shareholders.
The Company’s brokers regularly attend Board meetings, and
provide reports to those meetings, in order to keep the Board
apprised of shareholder and wider market sentiment regarding
the Company. They also arrange forums for shareholders to
meet the Chair, or other Directors, outwith the normal general
meeting cycle.
Registrars The Company’s registrars provide an
interface with those shareholders who hold
the Company’s shares directly.
The Company Secretaries liaise with the registrars to ensure the
frequency and accuracy of communications to shareholders is
appropriate, and monitor shareholder correspondence to ensure
that the level of service provided by the registrars is acceptable.
The Managers’ risk function reviews the registrars’ internal
controls report and reports on the outcome of this review to
theAudit Committee.
Depositary and
custodian
The depositary and custodian are
responsible for the safekeeping of the
Company’s financial instruments, as set
outin more detail on page 60.
The Depositary provides the Audit Committee with a report
on its monitoring activities. The Board and Managers seek to
engage with the depositary and custodian in a collaborative
and collegiate manner, encouraging open and constructive
discussion and debate, while also ensuring that appropriate
and regular challenge is brought and evaluation conducted.
This approach aims to enhance service levels and strengthen
relationships with the Company’s providers, with a view to
ensuring the interests of the Company’s shareholders are best
served by keeping cost levels proportionate and competitive,
and by maintaining the highest standards of business conduct.
Lenders Lenders such as holders of debt instruments
(bonds and private placement loan notes)
and banks providing fixed or revolving credit
facilities provide the Company’s gearing and
have an interest in the Company’s ongoing
financial health and viability.
The Company’s legal advisers review all legal agreements in
connection with the Company’s debt arrangements and advise
the Board on the appropriateness of the terms and covenants
therein. The Managers and Secretaries ensure that the
frequency and accuracy of reporting on, for example, covenant
certification, is appropriate and that correspondence from the
lenders receives a prompt response.
AIC/industry peers The Association of Investment Companies
(‘AIC’) and the Company’s investment
trust industry peers have an interest in the
Company’s conduct and performance, as
adverse market sentiment towards one
investment trust can affect attitudes towards
the wider industry.
The Company is a member of the AIC, and the Directors and/
or the Managers and Secretaries (as appropriate) participate in
technical reviews, requests for feedback on proposed legislation
or regulatory developments, corporate governance discussions
and/or training.
Wider society and
theenvironment
No entity, corporate or otherwise, can
exist without having an influence on the
society in which it operates or utilising the
planet’s resources. Through its third‑party
relationships, as noted above, the Company
seeks to be a positive influence and, in
circumstances where that is not possible,
tomitigate its negative impacts insofar as
ispossible.
The Board and Managers’ interactions with the various
stakeholders as noted above form the principal forms of
direct engagement with wider society and in respect of the
environment (commercial, financial, and in terms of planetary
health and resources).
The Scottish American Investment Company P.L.C.
53
The Board recognises the importance of maintaining
the interests of the Company and its stakeholders
in aggregate, firmly front of mind in its key decision
making and Baillie Gifford & Co Limited, the
Company Secretaries are at all times available to
the Board to ensure that suitable consideration is
given to the range of factors to which the Directors
should have regard. In addition to ensuring that the
Company’s stated investment objective was being
pursued, key decisions and actions during the year
which required the Directors to have regard to
applicable section 172 factors included:
• The Company bought back 1,665,185 of the
Company’s own shares into treasury at a discount
to net asset value, for subsequent reissue, in
order to ensure the Company’s shareholders
found liquidity for their shares when natural
market demand was insufficient, and on terms
that enhance net asset value for remaining
shareholders; and
• as part of the Board’s succession planning,
Padmesh Shukla was appointed to the Board
on 20 February 2024 and elected as a Director
by shareholders at the Annual General Meeting
held on 4 April 2024. This appointment is
consistent withtheAIC Corporate Governance
Code principlethat ‘a successful company is led
byaneffective board, whose role is to promote
thelong‑term sustainable success of a company,
generating value for shareholders and contributing
to wider society’.
Employees, human rights
and community issues
The Board recognises the requirement to provide
information about employees, human rights
and community issues. As the Company has no
employees, all its Directors are non‑executive
and all its functions are outsourced, there are no
disclosures to be made in respect of employees,
human rights and community issues. Further
information on the Company’s approach to
environmental, social and governance (ESG)
mattersare provided on page 70.
Gender representation
As at 31 December 2024, and the date of this report,
the Board comprises five Directors, two male and
three female. The Company has no employees.
TheBoard’s policy on diversity is set out on page67.
Environmental, social and governance policy
Details of the Company’s policy on socially
responsible investment can be found under
Corporate Governance and Stewardship on page 70.
The Company considers that it does not fall within
the scope of the Modern Slavery Act 2015 and it
is not, therefore, obliged to make a slavery and
human trafficking statement. In any event, the
Company considers its supply chains to be of
low risk as its suppliers are typically professional
advisers. Astatement by the Managers under
the Act has been published on the Managers’
websiteatbailliegifford.com.
Future developments of the Company
The outlook for the Company for the next 12 months
is set out in the Chairman’s statement on pages
5 to
9
and the Managers’ review on pages
15 to 23
.
The Strategic report, which includes pages
5 to 53
,
was approved by the Board on 12February2025.
Lord Macpherson of Earl’s Court
Chairman
Governance
report
This governance report, which includes
pages 55 to 79 outlines the Board’s
approach to the governance of your
Company. We believe that good governance
builds better outcomes and we are
committed to high standards of corporate
governance and transparency.
The Scottish American Investment Company P.L.C.
55
Directors and
management
Lord Nicholas
Macpherson of
Earl’s Court, GCB
Chairman
Appointed 2016
Karyn Lamont, CA
Director
Appointed 2019
Lord Macpherson of Earl’s Court, GCB joined
theBoard in 2016 and was appointed Chairman
on5April 2022. He was Permanent Secretary
to theTreasury from 2005 to 2016, leading
the department through the global economic
and financial crisis. He is currently chairman of
CHoareand Co, a Visiting Professor at King’s
College, London and was anon‑executive director
ofBritish Land plc.
Karyn Lamont, CA joined the Board in 2019 and
became Chairman of the Audit Committee in 2020.
Karyn is a chartered accountant and former audit
partner at PricewaterhouseCoopers. Shehas
over 25years’ experience providing audit and
other services to a range of clients across the
UK’s financial services sector, including a number
of investment trusts. Karyn is audit committee
chairman of The North American Income Trust
plc, The Scottish Building Society and Iomart
Group. Shewas also a director of Ediston Property
Investment Company plc.
Directors
Governance report
Annual Report and Financial Statements 2024
56
Dame Mariot Leslie
Director
Appointed 2019
Dame Mariot Leslie joined the Board in 2019.
Shewas a member of the Diplomatic Service
from1977 until her retirement in 2014. In the course
of her career she represented the UK overseas
in Singapore, Germany, France and Italy, ran the
FCO’sPolicy Planning Staff, and was a member
of the British Government’s Joint Intelligence
Committee. She was the British Ambassador
toNorway from 2002 to 2006 and the UK’s
Permanent Representative to NATO from 2010
to2014.
Christine
Montgomery
Director
Appointed 2022
Christine Montgomery joined the Board in 2022.
She has over 30 years of investment management
experience, most recently as Head of Global Equities
for Australian Super in Melbourne from 2016 to
2019and previously held senior global equity
roles at Fidelity Worldwide Investments, Franklin
Templeton Investments and Aegon. Christine is
a non‑executive director of Dunedin Income and
Growth Investment Trust.
Padmesh Shukla joined the Board in February 2024.
He is the Chief Investment Officer of the Transport
For London (‘TFL’) Pension Fund, and has over
25years of investment experience, including
12years in his current role at TFL. He was formerly
head of Climate Change Financing at the London
Development Agency, and prior to that he had
worked at the World Bank, as a Researcher at
Harvard and in real estate. He is currently a member
of the Church of England Pensions
InvestmentCommittee.
Padmesh Shukla
Director
Appointed
20February 2024
All Directors are members of the Nomination Committee and all Directors, with the
exception of Lord Macpherson of Earl’s Court, are members of the Audit Committee.
Lord Macpherson stepped down from the Audit Committee in July 2022.
The Scottish American Investment Company P.L.C.
57
Managers and secretaries
The Company has appointed Baillie Gifford & Co
Limited, a wholly owned subsidiary of Baillie Gifford
& Co, as its Alternative Investment Fund Manager
and Company Secretary. Baillie Gifford & Co Limited
has delegated investment management services to
Baillie Gifford & Co. Dealing activity and transaction
reporting have been further sub‑delegated to
BaillieGifford Overseas Limited and Baillie Gifford
Asia (Hong Kong) Limited. Baillie Gifford & Co is an
investment management firm formed in 1927 out of
the legal firm Baillie & Gifford, WS, which had been
involved in investment management since 1908.
Baillie Gifford is one of the largest investment trust
managers in the UK and currently manages twelve
investment trusts. Baillie Gifford also manage a
listed investment company, unit trusts and open
ended investment companies, together with
investment portfolios on behalf of pension funds,
charities and other institutional clients, both in the
UK and overseas. Funds under the management or
advice of Baillie Gifford total around £231 billion
asat 10 February 2025. Based in Edinburgh,
itisoneof the leading privately owned investment
management firms in the UK, with 62 partners
andastaff of around 1,600.
SAINTS is managed by James Dow and Ross Mathison.
They work closely with the other specialist equity,
bond and multi‑asset class investors at Baillie Gifford
(see further information on the portfolio managers on
page14).
Baillie Gifford & Co and Baillie Gifford & Co Limited
are both authorised and regulated by the Financial
Conduct Authority.
Property manager
The Company, Baillie Gifford & Co Limited and OLIM
Property Limited, a specialist property manager,
have entered a tripartite agreement to appoint OLIM
Property Limited as property manager.
OLIM Property is an FCA regulated property
investment manager of UK commercial property
portfolios, with individual discretionary mandates
forpension funds, investment trusts and Oxford
colleges. OLIM Property is owner managed with a
dedicated and highly experienced team and has a
38year record of pioneering commercial property
investment expertise and consistent outperformance.
The first three client mandates in 1986 were for
Value and Income Trust PLC (now known as Value
and Indexed Property Income Trust PLC), an Oxford
College and a FTSE 100 Company’s Pension Fund.
Their office is based at 15 Queen Anne’s Gate in
Central London, adjacent to St James’s Park.
Matthew Oakeshott – chairman
Joint founder of OLIM where he managed UK
commercial property and equity portfolios from
1986to 2006 and purely commercial property since
then. S.G. Warburg & Co 1976, Director of Warburg
Investment Management 1978. Investment Manager
of Courtaulds Pension Fund 1981 to 1985. He led a
management buyout of OLIM Property in 2012.
Governance report
Annual Report and Financial Statements 2024
58
Louise Cleary – managing director
Qualified as a Member of the Royal Institution of
Chartered Surveyors in 1996. She has over 20 years’
experience of commercial property investment at
Hermes Real Estate Investment Management,
LandSecurities and Asda Property Holdings and
joined OLIM in 2009 and OLIM Property in 2012.
Sarah Martin – director
Qualified as a Member of the Royal Institution of
Chartered Surveyors in 2008. She has over 15 years’
experience at the Estates Gazette, JLL/King Sturge
and joined OLIM Property in 2019.
Jo West – investment analyst
Qualified as a Member of the Royal Institution of
Chartered Surveyors in 1992. She has 20 years
ofcommercial property valuation and investment
experience at Donaldsons, Gooch & Wagstaff,
CBREand British Land and joined OLIM Property
in2018.
The Scottish American Investment Company P.L.C.
59
The Directors present their
Report together with the
Financial Statements of
theCompany for the year
to 31December 2024.
Directors’
report
Corporate governance
The Corporate Governance Report is set out on
pages 64 to 71 and forms part of this Report.
Managers and Company Secretaries
Baillie Gifford & Co Limited, a wholly owned
subsidiary of Baillie Gifford & Co, has been
appointed as the Company’s Alternative Investment
Fund Manager (‘AIFM’) and Company Secretary.
Baillie Gifford & Co Limited has delegated
investment management services to Baillie Gifford
& Co. Dealing activity and transaction reporting
have been further sub‑delegated to Baillie
Gifford Overseas Limited and Baillie Gifford Asia
(HongKong) Limited. The management of the
property portfolio has been delegated to OLIM
Property Limited.
The Investment Management Agreement between
the AIFM and the Company sets out the matters
overwhich the Managers have authority in
accordance with the policies and directions of, and
subject to restrictions imposed by, the Board. The
Investment Management Agreement is terminable on
not less than six months’ notice. Compensation fees
would only be payable in respect of the notice period
if termination were to occur within a shorter notice
period. The annual management fee is 0.45% of the
first £500 million of total assets and 0.35% of the
remaining total assets, total assets being the value
of all assets held (excluding the property portfolio)
less all liabilities, other than any liability in the form
of debt intended for investment purposes, calculated
on a quarterly basis. The Board is of the view that
calculating the fee with reference to performance
would be unlikely to exert a positive influence
onperformance.
Governance report
Annual Report and Financial Statements 2024
60
The Property Management Agreement sets out
the matters over which OLIM Property Limited has
discretion and those matters which require Board
approval. The Property Management Agreement
is terminable on three months’ notice. The annual
fee is 0.5% of the value of the property portfolio,
subject to a minimum quarterly fee of £6,250.
The Board considers the Company’s investment
management and secretarial arrangements on a
continuing basis and a formal review is conducted
annually. The Board considered the following topics
amongst others in its review:
• investment process;
• investment performance;
• dividend growth;
• the quality of the personnel assigned to handle
theCompany’s affairs;
• developments at the Managers, including staff
turnover;
• the administrative services provided by the
Secretaries;
• the property management service provided
byOLIMProperty Limited;
• share price and discount; and
• charges and fees.
Following the most recent review it is the opinion
of the Directors that the continuing appointment of
Baillie Gifford & Co Limited as AIFM, the delegation
of investment management services to Baillie Gifford
& Co, the further sub‑delegation of dealing activity
and transaction reporting to Baillie Gifford Overseas
Limited and Baillie Gifford Asia (Hong Kong)
Limited and the delegation of the management of
the property portfolio to OLIM Property Limited,
ontheterms agreed, is in the interests of the
Company and shareholders as a whole.
Depositary
In accordance with the Alternative Investment Fund
Managers (‘AIFM’) Regulations, the AIFM must
appoint a Depositary to the Company. TheBank
of New York Mellon (International) Limited has
been appointed as the Company’s Depositary.
The Depositary’s responsibilities include cash
monitoring, safe keeping of the Company’s financial
instruments, verifying ownership and maintaining
a record of other assets and monitoring the
Company’s compliance with investment limits and
leverage requirements. The custody function is
also undertaken by The Bank of New York Mellon
(International) Limited.
Directors
Information about the Directors, including their
relevant experience, can be found on pages 55 to 56.
All Directors, will retire at the Annual General
Meeting and offer themselves forre‑election.
Following formal performance evaluation, the Board
concluded that the performance of each of the
Directors continues to be effective and each remains
committed to the Company. Their contribution to the
Board is greatly valued and the Board recommends
their re‑election to shareholders.
Director indemnification and insurance
The Company has entered into qualifying third party
deeds of indemnity in favour of each of its Directors.
The deeds, which were in force during the year to
31December 2024 and up to the date of approval of
this Report, cover any liabilities that may arise to a
third party, other than the Company, for negligence,
default or breach of trust or duty. The Directors
are not indemnified in respect of liabilities to the
Company, any regulatory or criminal fines, any costs
incurred in connection with criminal proceedings in
which the Director is convicted or civil proceedings
brought by the Company in which judgement is given
against him/her. In addition, the indemnity does not
apply to any liability to the extent that it is recovered
from another person.
The Company maintains Directors’ and Officers’
Liability Insurance.
The Scottish American Investment Company P.L.C.
61
Conflicts of interest
Each Director submits a list of potential conflicts of
interest to the Nomination Committee on an annual
basis. The Committee considers these carefully,
taking into account the circumstances surrounding
them and makes a recommendation to the Board
on whether or not the potential conflicts should be
authorised. Board authorisation is for a period of
one year. Having considered the lists of potential
conflicts there were no situations which gave rise
to a direct or indirect interest of a Director which
conflicted with the interests of the Company.
Dividends
The Board recommends a final dividend of 4.175p
perordinary share which, together with the interim
dividends already paid, makes a total of 14.875p
forthe year. If approved, the recommended final
dividend on the ordinary shares will be paid on
11April 2025 to shareholders on the register at
theclose of business on 28 February 2025.
Theex‑dividend date is 27 February 2025.
The Company’s Registrar offers a Dividend
Reinvestment Plan (see page 115) and the final date
for the receipt of elections for reinvestment of this
dividend is 21 March 2025.
Share capital
Capital structure
The Company’s capital structure (excluding treasury
shares) consists of 176,650,758 ordinary shares of
25p each (2023–178,315,943 ordinary shares).
There are norestrictions concerning the holding or
transfer of the Company’s ordinary shares and there
are nospecial rights attaching to any of the shares.
Dividends
The ordinary shares carry a right to receive
dividends. Interim dividends are determined by the
Directors, whereas the proposed final dividend is
subject to shareholder approval.
Capital entitlement
On a winding up, after meeting the liabilities of the
Company, the surplus assets will be paid to ordinary
shareholders in proportion to their shareholdings.
Voting
Each ordinary shareholder present in person or by
proxy is entitled to one vote on a show of hands and,
on a poll, to one vote for every share held.
Information on the deadlines for proxy appointments
can be found on pages 111 to 113.
Major interests disclosed in the Company’s shares
Name
No. of ordinary
25p shares
held at
31 December
2024
% of
issue
Rathbone Investment
Management Ltd
9,116,733 5.2
Brewin Dolphin Limited 6,623,973 3.7
Holdings above are stated as per the most recent
notification to a Regulatory Information Service.
There have been no changes to the major interests
in the Company’s shares disclosed between
31December 2024 and 10 February 2025.
Annual General Meeting
Share issuance authority
Resolution 11 in the Notice of Annual General
Meeting seeks to renew the Directors’ general
authority to issue shares up to an aggregate nominal
amount of £14,423,125.00. This amount represents
approximately 33% of the Company’s total ordinary
share capital in issue at 10February 2025, being the
latest practicable date prior to the publication of this
document, and meets institutional guidelines. No
issue of ordinary shares will be made pursuant to the
authorisation in Resolution 11 which would effectively
alter the control of the Company without the prior
approval ofshareholders in general meeting.
Resolution 12, which is proposed as a special
resolution, seeks to renew the Directors’ authority
to issue shares or sell shares held in treasury on a
non pre‑emptive basis (i.e. without first offering such
shares to existing shareholders pro‑rata to their
existing holdings) for cash up to an aggregate nominal
amount of £4,370,643.75 (representing approximately
10% of the issued ordinary share capital of the
Company as at 10 February 2025, being the latest
practicable date prior to the publication of this
document). The authorities sought in Resolutions 11
and 12 will continue until the conclusion of the Annual
General Meeting to be held in 2026 or on the expiry of
15months from the passing of this resolution, ifearlier.
Governance report
Annual Report and Financial Statements 2024
62
Such authorities will only be used to issue shares
orsell shares from treasury at, or at a premium to,
net asset value and only when the Directors believe
that it would be in the best interests of the Company
to do so.
See further in this regard under the heading
‘authority to issue shares at a discount to net asset
value (with borrowings valued at book)’ below.
During the year to 31 December 2024, no shares
were issued by the Company.
Authority to issue shares at a discount to
NetAssetValue (with borrowings valued at book)
As noted above, the Board believes that issuing
shares to meet unsatisfied demand in the
marketplace is generally in the best interests of the
Company. Shareholders are asked on an annual
basis to grant the Directors customary share
allotment and issuance authorities (see ‘share
issuance authorities’ above). In order to facilitate non
pre‑emptive share issuance, either of new ordinary
shares or of any shares which are held by the
Company in treasury. Even where such authorities
are in place, however, the Listing Rules prohibit
the issue of shares, whether new or from treasury,
for cash at a price below the net asset value per
share (‘NAV’) of the shares which are then in issue,
unless the new shares are first offered to existing
shareholders pro‑rata to their existing holdings.
As stated previously, the Board considers NAV
(assets less liabilities) on the basis of the Company’s
borrowings valued at their book value to be the
prudent measure when determining the price at
which to issue shares. It remains the Directors’ firm
intention only to issue shares at, or at a premium to,
NAV calculated on this measure. In order, though,
to guard against a technical breach of the Listing
Rules prohibition mentioned above, by virtue of an
inadvertent share issuance at a discount to NAV with
borrowings at book (due, for example, to challenges
in estimating intra‑day market movements), the
Board is again this year proposing an additional
annual resolution which, paradoxically, seeks to
authorise the Directors to issue shares at a discount
to NAV at book.
Resolution 13 is being proposed, therefore, solely
for this technical purpose and specifically in the
context of the Directors’ continued intention only to
issue shares on a basis which protects or enhances
shareholder value.
Market purchase of own shares
The Company’s buy‑back authority was last
renewed at the AGM on 4 April 2024 in respect
of 26,729,559 shares of 25p each (equivalent to
14.99% of its then issued share capital). During
the year to 31 December 2024, 1,665,185 shares
were bought back at a cost of £8,529,000 and
held in treasury (2023 – no shares were bought
back). Between 1 January and 10 February 2025,
the Company bought back 1,825,000 shares into
treasury at a cost of £9,420,000. 3,490,185 shares
were held in treasury as at 10February 2025.
The principal reasons for share buy‑backs are:
i. to enhance the net asset value for continuing
shareholders by purchasing shares at a discount
to the prevailing net asset value; and
ii. to address any imbalance between the supply
of and demand for SAINTS’ shares that results
in a discount of the quoted market price to the
published net asset value per share.
The Company may hold bought back shares in
treasury and then:
i. sell such shares (or any of them) for cash (or its
equivalent under the Companies Act 2006); or
ii. cancel the shares (or any of them).
Shares will only be re‑sold from treasury at a
premium to net asset value per ordinary share.
The Directors are seeking shareholders’ approval at
the Annual General Meeting to renew the authority
to make market purchases of up to 26,206,381
ordinary shares in issue (excluding treasury shares)
as at 10February 2025, being the latest practicable
date prior to the publication of this document or, if
less, the number representing approximately 14.99%
of the Company’s ordinary shares in issue at the
date of passing of the resolution, such authority
to expire at the Annual General Meeting of the
Company to be held in 2026. Such purchases will
only be made through the market for cash at prices
below the most recently calculated net asset value
per ordinary share, which will result in an increase
in value of the remaining ordinary shares. Any such
shares purchased shall either be held in treasury or
cancelled. In accordance with the Listing Rules of the
UK Listing Authority, the maximum price (excluding
expenses) that may be paid on the exercise of the
authority must not exceed the higher of:
The Scottish American Investment Company P.L.C.
63
i. 5 per cent above the average closing price on the
London Stock Exchange of an ordinary share over
the five business days immediately preceding the
date of purchase; and
ii. an amount equal to the higher of the price of
the last independent trade of an Ordinary Share
and the highest current independent bid for an
Ordinary Share on the trading venue where the
purchase is carried out.
The minimum price (exclusive of expenses) that may
be paid will be 25p per share. Purchases of shares
will be made within guidelines established, from
time to time, by the Board. The Company does not
have any warrants or options in issue. Your attention
is drawn to Resolution 14 in the Notice of Annual
General Meeting.
Articles of Association
The Company’s Articles of Association may only be
amended by special resolution at a general meeting
of shareholders.
Financial instruments
The Company’s financial instruments comprise its
investment portfolio, cash balances, borrowings
and debtors and creditors that arise directly from
its operations such as sales and purchases awaiting
settlement and accrued income. The financial risk
management objectives and policies arising from
its financial instruments and the exposure of the
Company to risk are disclosed in note 18 to the
Financial Statements on pages 101 to 106.
Disclosure of information to Auditor
The Directors who held office at the date of approval
of this Directors’ Report confirm that, so far as
they are each aware, there is no relevant audit
information of which the Company’s Auditor is
unaware; and each Director has taken all the steps
that they ought to have taken as a Director to make
themselves aware of any relevant audit information
and to establish that the Company’s Auditor is aware
of that information.
Independent Auditor
The Auditor, Ernst & Young LLP, is willing to
continue in office and in accordance with section
489 and section 491(1) of the Companies Act
2006, resolutions concerning Ernst & Young LLP’s
reappointment and remuneration will be submitted
to the Annual General Meeting.
Post balance sheet events
The sale of the bowling alley at Taunton was agreed
on 19 December 2024 for £3,900,000. The sale
completed on 31January 2025. The Directors
confirm that there have been no other significant
post balance sheet events up to 10 February 2025
that require disclosure in the Financial Statements.
Greenhouse gas emissions and
Streamlinedenergy and carbon
reporting(‘SECR’)
All of the Company’s activities are outsourced
to third parties. The Company therefore 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. For the same
reasons as set out above, the Company considers
itself to be a low energy user under the SECR
regulations and therefore is not required to disclose
energy and carbon information.
Bribery Act
The Company has a zero tolerance policy towards
bribery and is committed to carrying out business
fairly, honestly and openly. The Managers also adopt
a zero tolerance approach and have policies and
procedures in place to prevent bribery.
Criminal Finances Act 2017
The Company has a commitment to zero tolerance
towards the criminal facilitation of tax evasion.
Recommendation
The Board unanimously recommends you to vote
in favour of the resolutions to be proposed at the
Annual General Meeting as, in its opinion, they are in
the best interests of the shareholders as a whole.
On behalf of the Board
Lord Macpherson of Earl’s Court
Chairman
12 February 2025
Governance report
Annual Report and Financial Statements 2024
64
Compliance
The Board confirms that the Company has complied
throughout the year under review with the relevant
provisions of the Code and the recommendations of
the AIC Code. The Code includes provisions relating
to the role of the chief executive, executive directors’
remuneration and the need for an internal audit
function. Given that the Company is an externally
managed investment trust, the Board considers
these provisions are not relevant to the Company
(the need for an internal audit function specific to
the Company has been addressed on page 73).
Details of the Board’s view on Directors who have
served on the Board for more than nine years can
be found under the Independence of Directors and
Policy on Chairman’s and Directors’ tenure sections
of this Report on pages 66 and 67.
The FRC has confirmed that AIC member companies
who report against the AIC Code will be meeting
their obligations in relation to the UK Code
(theAICCode can be found at theaic.co.uk).
The Board
The Board has overall responsibility for the
Company’s affairs. It has a number of matters
formally reserved for its approval including
strategy, investment policy, currency hedging,
gearing, treasury matters, dividend and corporate
governance policy. A separate meeting devoted to
strategy is held each year. The Board also reviews
the Financial Statements, investment transactions,
revenue budgets and investment performance of
the Company. Full and timely information is provided
to the Board to enable the Board to function
effectively and to allow Directors to discharge
theirresponsibilities.
Corporate
governance report
The Board is committed to
achieving and demonstrating
high standards of Corporate
governance. This statement
outlines how the principles
ofthe2018 UK Corporate
Governance Code (‘theCode’),
which can be found at frc.org.uk,
and the relevant principles of
the Association ofInvestment
Companies (‘AIC’) Code
of Corporate Governance
(‘AICCode’) issued in 2019 were
applied throughout the financial
year. The AIC Code provides a
framework of best practice for
investment companies and can
befound at theaic.co.uk.
The Scottish American Investment Company P.L.C.
65
Board of Directors
Comprises independent
non‑executiveDirectors
Chairman:
Lord Macpherson ofEarl’sCourt
Senior Independent Director:
Mariot Leslie
Audit
Committee
Chairman: Karyn Lamont
Purpose
To provide oversight of:
– the financial reporting process;
– the audit process;
– the Company’s system of internal
controls; and
– compliance with laws and regulations.
Nomination
Committee
Chairman: Lord Macpherson of Earl’s Court
Purpose
To oversee:
– Board recruitment;
– succession planning; and
– Board appraisals including identifying
training needs.
Third‑party service providers
appointedbythe Board
Alternative Investment Fund Managers and Company Secretary:
Baillie Gifford & Co Limited (wholly owned
subsidiary of Baillie Gifford & Co)
Dealing activity and transaction reporting:
Baillie Gifford Overseas Limited and
Baillie Gifford Asia (Hong Kong) Limited
Property manager:
OLIM Property Limited
Ernst & Young LLP
Auditor
The Bank of
NewYorkMellon
(International) Limited
Depositary
Computershare
Investor Services
PLC
Registrar
Winterflood
InvestmentTrusts
Company Broker
Governance report
Annual Report and Financial Statements 2024
66
The Board currently comprises five Directors
all of whom are non‑executive. The Chairman is
responsible for organising the business of the
Board, ensuring its effectiveness and setting its
agenda. The executive responsibility for investment
management has been delegated to the Company’s
Alternative Investment Fund Manager (‘AIFM’), Baillie
Gifford & Co Limited, and, in the context of a Board
comprising entirely non‑executive Directors, there is
no chief executive officer. The Senior Independent
Director is Dame Mariot Leslie.
The Directors believe that the Board has a balance
of skills and experience which enables it to provide
effective strategic leadership and proper governance
of the Company. Information about the Directors,
including their relevant experience, can be found on
pages 55 and 56.
There is an agreed procedure for Directors to seek
independent professional advice if necessary at the
Company’s expense.
Appointments
The terms and conditions of Directors’ appointments
are set out in formal letters of appointment which are
available for inspection on request.
Under the provisions of the Company’s Articles of
Association, a Director appointed during the year is
required to retire and seek election by shareholders
at the next Annual General Meeting. The Board
has agreed that all the Directors will retire at each
Annual General Meeting and, if appropriate, offer
themselves for re‑election.
Independence of Directors
All Directors are considered by the Board to be
independent of the Managers and free of any
business or other relationship which could interfere
with the exercise of their independent judgement.
The Directors recognise the importance of
succession planning for company boards and review
the Board composition annually. The Board is of
the view that length of service will not necessarily
compromise the independence or contribution of
Directors of an investment trust company, where
continuity and experience can be a benefit to the
Board. The policy on Chairman’s and Directors’
tenure is on page 67.
Meetings
There is an annual cycle of Board meetings which
is designed to address, in a systematic way, overall
strategy, review of investment policy, investment
performance, marketing, revenue budgets, dividend
policy and communication with shareholders. The
Board considers that it meets sufficiently regularly
to discharge its duties effectively. The following
table shows the attendance record for the core
Board and Committee meetings held during the
year. The Annual General Meeting was attended by
allDirectors.
Directors’ attendance at meetings
Board
Audit
Committee
Nomination
Committee
Number of meetings 5 2 1
Lord Macpherson
ofEarl’sCourt*
5 2 1
Karyn Lamont 5 2 1
Dame Mariot Leslie 5 2 1
Christine Montgomery 5 2 1
Padmesh Shukla
†
4 1 1
* Lord Macpherson of Earl’s Court ceased to be a member of the Audit
Committee when he became Chairman of the Board on 5 April 2022 but
attends by invitation
†
Appointed a Director 20 February 2024
Nomination Committee
The Nomination Committee consists of the whole
Board due to the ongoing small size of the Board
and the Chairman of the Board is Chairman of the
Committee. The Committee meets on an annual
basis and at such other times as may be required.
The Committee has written terms of reference
which include reviewing the Board composition,
Board appraisal, succession planning, training
and identifying and nominating new candidates
for appointment to the Board. The Committee
also considers whether Directors should be
recommended for re‑election by shareholders.
TheCommittee is responsible for considering
Directors’ potential conflicts of interest and for
making recommendations to the Board on whether
or not any potential conflicts should be authorised.
The Scottish American Investment Company P.L.C.
67
During 2023, the Committee engaged an external
search consultancy, Audeliss, to recruit a new
Director to join the Board. Padmesh Shukla was
identified as the preferred candidate and it was
announced on 29 November 2023 that he would be
appointed to the Board on 20 February 2024. The
Committee believes that Mr Shukla’s knowledge and
experience will be of great benefit to the Company.
Audeliss, which has no other connection with the
Company or any of the Directors, was specifically
tasked with identifying candidates with the best
range of skills and experience to complement those
of the existing Directors, while also considering the
promotion of diversity on the Board as an integral
part of the recruitment process.
Diversity policy
Appointments to the Board are made on merit
and based on objective criteria, including the
promotion of diversity of gender, social and ethnic
backgrounds, and cognitive and personal strengths.
The priority in succession planning and appointing
new Directors is to identify candidates with the best
range of skills and experience to complement those
of the existing Directors, with a view to ensuring that
the Board remains well placed to help the Company
achieve its investment and governance objectives.
Board diversity
The following disclosures are provided in respect
of the FCA Listing Rules targets that: i) 40% of a
board should be women; ii) at least one senior role
should be held by a woman; and iii) at least one
board member should be from a non‑white ethnic
background, as defined by the Office of National
Statistics (‘ONS’) criteria.
As an externally managed investment company with
no chief executive officer (CEO) or chief financial
officer (CFO), the roles which qualify as senior under
FCA guidance are Chair and Senior Independent
Director (SID). The Board also considers Audit
Committee Chairman to represent a senior role
within this context and this role is performed by
awoman.
At 31 December 2024, which shall be used as
the reference date for the disclosures, the Board
complies in all respects with the FCA listing
Rulestargets.
Gender Number %
Senior
roles
Men 2 40 1
Women 3 60 1*
Prefer not to say – – –
* The Board also considers Audit Committee Chairman to be a senior role.
The role of Audit Committee Chairman is currently held by a woman.
Ethnic background Number %
Senior
roles
White 4 80 2*
Asian/Asian British 1 20 0
Prefer not to say – – –
* The Board also considers Audit Committee Chairman to be a senior role.
The current Audit Committee Chairman’s ethnic background is white.
Policy on Chairman’s and Directors’ tenure
The Board of SAINTS considers that the tenure
ofitsChairman and Directors should be driven by
how shareholders’ interests can best be served and,
in particular, in a way which prioritises the effective
functioning of the Board. It notes that as well as the
effectiveness and independence of the Chairman
and Directors, the ongoing balance, experience and
diversity of the whole Board are relevant factors.
Whilst it recognises the need for regular Board
refreshment, the Board also believes that continuity
is vitally important. Consequently, the Board firmly
believes it is helpful at any given time to have some
longer serving members on the Board.
The Committee’s terms of reference are available
on request from the Company and from the SAINTS’
page on the Managers’ website: saints-it.com.
Governance report
Annual Report and Financial Statements 2024
68
Performance evaluation
An appraisal of the Chairman, each Director,
andaperformance evaluation and review of the
Board as a whole and its Committees was carried
out during the year. The Chairman and each Director
completed a performance evaluation questionnaire
and each Director had an interview with the
Chairman. The appraisal of the Chairman was led
by Mariot Leslie. The appraisals and evaluations
considered, amongst other criteria, the balance
of skills of the Board, training and development
requirements, the contribution of individual Directors
and the overall effectiveness of the Board and its
Committees. Following this process it was concluded
that there was a diverse range of skills within the
Board, and the performance of each Director,
theChairman, the Board and its Committees
continues to be effective and the Directors
remain committed to the Company. A review of
the Chairman’s and other Directors’ commitments
was carried out and the Nomination Committee is
satisfied that they are capable of devoting sufficient
time to the Company. There were no significant
changes to the Chairman’s other commitments
during the year.
During the year ended 31 December 2022, the
Board appointed Lintstock Ltd, a firm which assists
companies with the design and execution of board
evaluations, to facilitate the performance evaluation
of the Chairman, each Director, the Board as a whole
and its Committees. External facilitation will next be
considered for Board evaluations in 2025.
Induction and training
New Directors are provided with an induction
programme which is tailored to theparticular
circumstances of the appointee. Briefings were
provided during the year on regulatory matters.
Directors receive other relevant training as necessary.
Remuneration Committee
As all the Directors are non‑executive, there is
no requirement for a separate Remuneration
Committee. Directors’ fees are considered by the
Board as a whole within the limits approved by
shareholders. The Company’s policy on remuneration
is set out in the Directors’ Remuneration report on
page75.
Management Engagement Committee
The Directors have considered that a separate
Management Engagement Committee is not required
given the small size of the Board.
Audit Committee
The report of the Audit Committee is set out on
pages 72 to 74.
Internal controls and risk management
The Directors acknowledge their responsibility
for the Company’s risk management and
internal controls systems and for reviewing their
effectiveness, including with regard to preparation
of the Company’s Annual Report and Financial
Statements. These systems are designed to manage
rather than eliminate the risk of failure to achieve
business objectives and can only provide reasonable
but not absolute assurance against material
misstatement or loss.
The Board confirms that there is a continuing
process for identifying, evaluating and managing
the significant risks faced by the Company in
accordance with the FRC guidance ‘Guidance on
Risk Management, Internal Control and Related
Financial and Business Reporting’.
The practical measures to be taken in relation to
the design, implementation and maintenance of
control policies and procedures to safeguard the
Company’s assets and to manage its affairs properly,
including the maintenance of effective operational
and compliance controls have been delegated to the
Managers and Secretaries.
The Board oversees the functions delegated to
the Managers and Secretaries and the controls
managed by the AIFM in accordance with the UK
Alternative Investment Fund Managers Regulations
(as detailed below). Baillie Gifford & Co’s Internal
Audit and Compliance Departments and the
AIFM’s permanent risk function provide the Audit
Committee with regular reports on their monitoring
programmes. The reporting procedures for these
departments are defined and formalised within
a service level agreement. Baillie Gifford & Co
conducts an annual review of its system of internal
controls which is documented within an internal
controls report which complies with ISAE 3402 –
The Scottish American Investment Company P.L.C.
69
Assurance Reports on Internal Controls of Service
Organisations made available to Third Parties. This
report is independently reviewed by Baillie Gifford
& Co’s Auditor and a copy is submitted to the
AuditCommittee.
A report identifying the material risks faced by the
Company and the key controls employed to manage
these risks is reviewed by the Audit Committee.
These procedures ensure that consideration is given
regularly to the nature and extent of risks facing the
Company and that they are being actively monitored.
Where changes in risk have been identified during
the year they also provide a mechanism to assess
whether further action is required to manage these
risks.
The Directors confirm that they have reviewed the
effectiveness of the Company’s risk management
and internal controls systems which accord with
the FRC ‘Guidance on Risk Management, Internal
Control and Related Financial and Business
Reporting’, and they have procedures in place
to review their effectiveness on a regular basis.
Nosignificant weaknesses were identified in the year
under review and up to the date of this Report.
The Board confirms that these procedures have
been in place throughout the Company’s financial
year and continue to be in place up to the date of
approval of this report.
To comply with the UK Alternative Investment Fund
Managers Regulations, The Bank of New York
Mellon (International) Limited act as the Company’s
Depositary and Baillie Gifford & Co Limited as
itsAIFM.
The Depositary’s responsibilities include cash
monitoring, safe keeping of the Company’s financial
instruments, verifying ownership and maintaining a
record of other assets and monitoring the Company’s
compliance with investment limits and leverage
requirements. The Depositary is liable for the loss of
financial instruments held in custody. The Depositary
will ensure that any delegate segregates the assets
of the Company. The Company’s Depositary also
acts as the Company’s Custodian. The Custodian
prepares reports on its key controls and safeguards
which are independently reviewed by its appointed
auditors, KPMG LLP. The reports are reviewed by
Baillie Gifford’s Business Risk Department and a
summary of the key points is reported to the Audit
Committee and any concerns are investigated.
The Depositary provides the Audit Committee with
areport on its monitoring activities.
The AIFM has established a permanent risk
management function to ensure that effective
risk management policies and procedures are in
place and to monitor compliance with risk limits.
TheAIFMhas a risk management policy which
covers the risks associated with the management of
the portfolio, and the adequacy and effectiveness
of this policy is reviewed and approved at least
annually. This review includes the risk management
processes and systems and limits for each risk area.
The risk limits, which are set by the AIFM and
approved by the Board, take into account the
objectives, strategy and risk profile of the portfolio.
These limits including leverage (see page 116) are
monitored and the sensitivity of the portfolio to key
risks is undertaken periodically as appropriate to
ascertain the impact of changes in key variables
in the portfolio. Exceptions from limits monitoring
and stress testing undertaken by Baillie Gifford’s
Business Risk Department are escalated to the AIFM
and reported to the Board along with any remedial
measures being taken.
Going concern
In accordance with The Financial Reporting
Council’s guidance on going concern and liquidity
risk, the Directors have undertaken a rigorous review
of the Company’s ability to continue as a going
concern. The Company’s principal and emerging
risks are market related and include market risk,
liquidity risk and credit risk. An explanation of
these risks and how they are managed is contained
on pages 45 to 49 and in note 18 to the Financial
Statements. The Board has, in particular, considered
recent heightened geopolitical tensions and conflicts
and macroeconomic concerns, including increased
inflation and interest rates, alongside specific
leverage and liquidity stress testing, but does not
believe the Company’s going concern status is
affected. The Company’s assets, the majority of
which are investments in quoted securities which are
readily realisable, exceed its liabilities significantly.
All borrowings require the prior approval of
the Board. Gearing levels and compliance with
Governance report
Annual Report and Financial Statements 2024
70
borrowing covenants are reviewed by the Board on
a regular basis. The Company has no short term
borrowings. The Company has continued to comply
with the investment trust status requirements
of section 1158 of the Corporation Tax Act 2010
and the Investment Trust (Approved Company)
Regulations 2011.
Accordingly, the Financial Statements have been
prepared on the going concern basis as it is the
Directors’ opinion, having assessed the principal
and emerging risks and other matters, as set out
in the viability statement on page 50 and revenue
estimates prepared to 28 February 2026, that the
Company will continue in operational existence for
the assessed period to 28 February 2026, which is
at least 12 months from the date of approval of these
Financial Statements.
Relations with shareholders
The Board places great importance on communication
with shareholders. The Managers meet regularly with
shareholders and their representatives and report
shareholders’ views to the Board. The Chairman is
available to meet with shareholders as appropriate.
Shareholders wishing to communicate with any
members of the Board may do so by writing to them
at the Company’s registered office or through the
Company’s broker, Winterflood (see contact details on
page125).
The Company’s Annual General Meeting provides
a forum for communication with all shareholders.
The level of proxies lodged for each resolution
is announced at the meeting and published
at saints-it.com subsequent to the meeting.
Thenoticeperiod for the Annual General Meeting
is at least twenty working days. Shareholders
and potential investors may obtain up‑to‑date
information on the Company at saints-it.com.
Corporate governance and stewardship
The Company has given discretionary voting powers
to Baillie Gifford & Co. The Managers vote against
resolutions they consider may damage shareholders’
rights or economic interests and report their actions
to the Board.
The Company believes that it is in the shareholders’
interests to consider environmental, social and
governance (‘ESG’) factors when selecting and
retaining investments and have asked the Managers
to take these issues into account as long as the
investment objectives are not compromised.
TheManagers do not exclude companies from
their investment universe purely on the grounds
of ESGfactors but adopt a positive engagement
approach whereby matters are discussed with
management with the aim of improving the relevant
policies and management systems and enabling
the Managers to consider how ESG factors could
impact long term investment returns. The Managers’
statement of compliance with the UK Stewardship
Code can be found on the Managers’ website at
bailliegifford.com. The Managers’ policy has been
reviewed and endorsed by the Board.
Baillie Gifford & Co, the Managers, has considered
the Sustainable Finance Disclosures Regulation
(‘SFDR’) and further details can be found on
page117.
The Managers, Baillie Gifford & Co, are signatories
to the United Nations Principles for Responsible
Investment and are also members of the
International Corporate Governance Network.
Climate change
The Board recognises that climate change poses a
serious threat to our environment, our society and
to economies and companies around the globe.
Addressing the underlying causes is likely to result
in companies that are high emitters of carbon
facing greater societal and regulatory scrutiny and
higher costs to account for the true environmental
impact of their activities. The Manager has engaged
an external provider to map the carbon footprint
of the equity portfolio using the information to
prioritise engagement and understand what higher
emitting companies are doing to manage climate
risk better. The Managers utilise data sourced
from a third party provider (MSCI via the Factset
platform) to map the carbon footprint of The
Scottish American Investment Company’s equity
The Scottish American Investment Company P.L.C.
71
portfolio which is estimated to be 74.2% lower
than the Company’s benchmark (FTSE All‑World
Index) and is based on 98.3% of the value of the
Company’s equity portfolio which reports on carbon
emissions and other carbon related characteristics.
Carbon intensity measures the carbon efficiency
of the portfolio per unit of output and assesses the
portfolio’s exposure to carbon‑intensive companies.
In evaluating property investments, OLIM,
theproperty manager, reviews environmental
and flood risk reports, surveys of sustainable
transport links, energy performance certificates
and proactively encourages green initiatives
such as installing electric vehicle charging
points, solar panels or other upgrades to improve
energy performance ratings. The provision of
property valuations is carried out by Savills, an
external valuer, and environmental and flooding
risk considerations are taken into account when
arrivingat the property valuations.
Baillie Gifford’s Task Force on Climate‑Related
Financial Disclosures (‘TCFD’) Climate Report
isavailable on the Managers’ website at
bailliegifford.com. A Company specific TCFD
climate report is also available on the Company’s
page of the Managers’ website at saints-it.com.
The Managers, Baillie Gifford & Co, are signatories
to the Carbon Disclosure Project.
On behalf of the Board
Lord Macpherson of Earl’s Court
12 February 2025
Governance report
Annual Report and Financial Statements 2024
72
The Audit Committee consists of
all independent Directors for the
year to 31 December 2024 with
the exception of the Chairman
of the Board, Lord Macpherson
of Earl’s Court, who stepped
down from the Audit Committee
in July 2022. The members of
the Committee consider that
they have the requisite financial
skills and experience to fulfil the
responsibilities of the Committee.
Ms Lamont, the Chairman of
the Committee, is a Chartered
Accountant. The Committee’s
authority and duties are clearly
defined within its written terms
ofreference which are available
at saints-it.com. The terms of
reference are reviewed annually.
Audit
Committee report
The Committee’s effectiveness is reviewed on an
annual basis as part of the Board’s performance
evaluation process.
At least once a year the Committee meets with
theexternal Auditor without any representative of
the Manager being present.
Main activities of the Committee
Ernst & Young LLP, the external Auditor, attended
the Interim Accounts meeting in July 2024 and the
Final Accounts meeting in February 2025. Baillie
Gifford & Co’s Internal Audit and Compliance
Departments and the AIFM’s permanent risk function
provided reports on their monitoring programmes for
these meetings.
The matters considered, monitored and reviewed
by the Committee during the course of the year
included the following:
• The preliminary results announcement and the
Annual and Interim Reports;
• The Company’s accounting policies and practices;
• The regulatory changes impacting the Company;
• The fairness, balance and understandability of
the Annual Report and Financial Statements and
whether it provided the information necessary
for shareholders to assess the Company’s
performance, business model and strategy;
• The effectiveness of the Company’s internal
control environment;
• Re‑appoinment, remuneration and engagement
letter of the external Auditor;
• Whether the audit services contract should be put
out to tender;
• The policy on the engagement of the external
Auditor to supply non‑audit services;
• The independence, objectivity and effectiveness
of the external Auditor;
The Scottish American Investment Company P.L.C.
73
• The need for the Company to have its own internal
audit function;
• Internal controls reports received from the
Managers and other service providers; and
• The arrangements in place within Baillie Gifford
& Co whereby their staff may, in confidence, raise
concerns about possible improprieties in matters
of financial reporting or other matters.
Internal audit
The Committee continues to believe that the
compliance and internal controls systems and the
internal audit function in place within the Investment
Managers provide sufficient assurance that a
sound system of internal control which safeguards
shareholders’ investment and the Company’s assets
is maintained. An internal audit function, specific to
the Company is therefore considered unnecessary.
Financial reporting
The Committee considers that the most significant
issue likely to affect the Financial Statements is
the valuation of the property investments which
represent 9.1% of total assets. Other key issues
are the existence and legal title of the property as
well as the valuation, existence and legal title of
the equity and bond investments which represent
90.6% of total assets.
The majority of the investments are in quoted
securities and market prices are readily available
from independent external pricing sources.
TheCommittee reviewed the Managers’ Report on
Internal Controls which details the controls in place
regarding recording and pricing of investments,
thereconciliation of investment holdings to
third party data and the accurate recording of
investmentincome.
The properties are valued on an open market basis
by Savills. The Committee approve the valuation
report provided by Savills and review the property
valuations twice a year.
The Committee considered the factors, including
heightened geopolitical tensions, that might affect
the Company’s viability over a period of five years
and its ability to continue as a going concern for
at least twelve months from the date of signing
of the Financial Statements, together with the
reports from the Managers on the cash position
and cash flow projections of the Company, the
liquidity of the investment portfolio, compliance
with debt covenants and the Company’s ability to
meet its obligations as they fall due. The Committee
also reviewed the viability statement on page
50
and the statement on going concern on
page 69
including the impact of increasing geopolitical
tensions. Following this assessment, the Committee
recommended to the Board the appropriateness of
the going concern basis in preparing the Financial
Statements and confirmed the accuracy of the
viability statement and statement on going concern.
The Managers and Auditor confirmed to the Committee
that they were not aware of anymaterial misstatements
in the context of the Financial Statements as a whole
and that the Financial Statements are in accordance
with applicable law and accounting standards.
FRC Review
The Financial Reporting Council (‘FRC’) reviewed the
Company’s Annual Report and Financial Statements
for the year to 31 December 2023. There were no
significant issues identified
based on the review. The
FRC notes that its review does not provide assurance
that the Annual Report and Financial Statements are
correct in all material respects and that its role is not
to verify the information provided but to consider
compliance with reporting requirements.
Governance report
Annual Report and Financial Statements 2024
74
Internal controls and risk management
The Committee reviewed the effectiveness of the
Company’s risk management and internal controls
systems as described on pages 68 and 69. No
significant weaknesses were identified in the year
under review.
External Auditor
To fulfil its responsibility regarding the independence
of the external Auditor, the Committee reviewed:
• The audit plan for the current year;
• A report from the Auditor describing
theirarrangements to manage auditor
independence and received confirmation
oftheirindependence; and
• The proposed audit fee and the extent of non‑audit
services provided by the external Auditor. For
the year to 31 December 2024 the audit fee was
£83,250 and there were no non‑audit fees.
To assess the effectiveness of the external Auditor,
the Committee reviewed and considered:
• The Auditor’s fulfilment of the agreed audit plan;
• Feedback from the Secretaries on the
performance of the audit team;
• The Audit Quality Inspection Report from
theFRC;and
• Detailed discussion with audit personnel to
challenge audit processes and deliverables.
To fulfil its responsibility for the oversight of the
external audit process, the Committee considered
and reviewed:
• The Auditor’s engagement letter;
• The Auditor’s proposed audit strategy;
• The audit fee; and
• A report from the Auditor on the conclusion
oftheaudit.
The audit partner responsible for the audit will be
rotated at least every five years in accordance with
professional and regulatory standards in order to
protect independence and objectivity and to provide
fresh challenge to the business. 2024 will be the
third year Ms Caroline Mercer, the current partner,
has held this role and she will continue as audit
partner until the conclusion of the 2026 audit.
Ernst & Young LLP has confirmed that it
believesthat it is independent within the meaning
of regulatory and professional requirements and
that the objectivity of the audit partner and staff
isnotimpaired.
Having carried out the review described above,
theCommittee is satisfied that the Auditor remains
independent and effective for the purposes of this
year’s audit.
There are no contractual obligations restricting the
Committee’s choice of external Auditor.
Accountability and audit
The respective responsibilities of the Directors
and the Auditor in connection with the Financial
Statements are set out on pages 78 to 87.
On behalf of the Board
Karyn Lamont
Audit Committee Chairman
12 February 2025
The Scottish American Investment Company P.L.C.
75
Directors’
remuneration report
Statement by the Chairman
The Directors’ Remuneration Policy is subject to
shareholder approval every three years or sooner if an
alteration to the policy is proposed. As the Remuneration
Policy was last approved by shareholders at the Annual
General Meeting in April 2023, shareholders’ approval of
the policy will be sought at the Annual General Meeting to
be held in 2026.
The Board reviewed the level of fees during the year
and concluded that there would be no need to change
the fees. The fees were last increased with effect from
1January2023.
Directors’ remuneration policy
The Board is composed wholly of non‑executive Directors,
none of whom has a service contract with the Company.
There is no separate remuneration committee and the
Board as a whole considers changes to Directors’ fees
from time to time.
The Board’s policy is that the remuneration of Directors
should be set at a reasonable level that is commensurate
with the duties and responsibilities of the role and
consistent with the requirement to attract and retain
Directors of the appropriate quality and experience.
The Board believes that the fees paid to the Directors
should reflect the experience of the Board as a whole,
be fair and should take account of the level of fees paid
by comparable investment trusts. Baillie Gifford & Co
Limited, the Company Secretaries, provides comparative
information when the Board considers the level of
Directors’ fees. Any views expressed by shareholders
on the fees being paid to Directors will be taken into
consideration by the Board when reviewing the Board’s
policy on remuneration. Non‑executive Directors are not
eligible for any other remuneration or benefits apart from
the reimbursement of allowable expenses. There are no
performance conditions relating to Directors’ fees and
there are no long term incentive schemes or pension
schemes. No compensation is payable on loss of office.
This report has been prepared in
accordance with the requirements
of the Companies Act 2006.
Governance report
Annual Report and Financial Statements 2024
76
Limits on Directors’ remuneration
The fees for the Directors are payable monthly in arrears and are determined within the limits set out in the
Company’s Articles of Association. The aggregate limit of Directors’ fees is currently set at £250,000 per
annum. Any change to this limit requires shareholder approval.
The basic and additional fees payable to Directors in respect of the year ended 31 December 2024 and
the fees payable in respect of the year ending 31 December 2025 are set out in the table below. The fees
payable to the Directors in the subsequent financial periods will be determined following an annual review
of the Directors’ fees.
Expected fees for the year ending
31 December 2025
£
Fees for the year ended
31 December 2024
£
Non‑executive Director fee 28,000 28,000
Additional fee for Chairman 18,000 18,000
Additional fee for Chairman of the Audit Committee 6,000 6,000
Annual report on remuneration
An ordinary resolution for the approval of this report will be put to the members at the forthcoming Annual
General Meeting.
The law requires the Company’s Auditor to audit certain of the disclosures provided in this report. Where
disclosures have been audited, they are indicated as such. The Auditor’s opinion is included in their report
on pages 81 to 87.
Directors’ remuneration for the year (audited)
The Directors who served during the year received the following remuneration in the form of fees and
taxable benefits. This represents the entire remuneration paid to the Directors.
Name
2024
Fees
£
2024
Taxable
benefits*
£
2024
Total
£
2023
Fees
£
2023
Taxable
benefits*
£
2023
Total
£
Lord Macpherson of Earl's Court (Chairman) 46,000 1,659 47,659 46,000 2,418 48,418
Bronwyn Curtis (retired 4 April 2024) 7,424 1,514 8,938 28,000 3,268 31,268
Karyn Lamont 34,000 120 34,120 34,000 – 34,000
Dame Mariot Leslie 28,000 574 28,574 28,000 1,017 29,017
Christine Montgomery 28,000 1,681 29,681 28,000 273 28,273
Padmesh Shukla (appointed 20 February 2024) 24,195 963 25,158 – – –
167,619 6,511 174,130 164,000 6,976 170,976
* Comprises travel and subsistence expenses incurred by Directors in the course of travel to attend Board and Committee meetings.
Annual percentage change in Directors’ remuneration
This represents the annual percentage change in the entire remuneration paid to the Directors.
Name
% from
2023 to
2024
% from
2022 to
2023
% from
2021 to
2022
% from
2020 to
2021
% from
2019 to
2020
Lord Macpherson of Earl's Court (Chairman) (1.6) 22.1 56.1 (0.7) 8.7
Bronwyn Curtis (retired 4 April 2024) (71.4) 12.8 8.7 (1.4) 7. 8
Karyn Lamont 0.4 13.3 – 8.3 70.2
Dame Mariot Leslie (1.5) 16.1 – – 13.6
Christine Montgomery 5.0 51.3 n/a n/a n/a
Padmesh Shukla (appointed 20 February 2024) n/a n/a n/a n/a n/a
Peter Moon (retired 5 April 2022) n/a n/a (70.8) 0.2 3.8
The Scottish American Investment Company P.L.C.
77
The Directors at the year end, and their interests in the
Company at 31 December are shown in the following
table. There have been no changes intimated in the
Directors’ interests up to 10February 2025.
Directors’ interests (audited)
Name
Nature
of interest
Ordinary 25p
shares held at
31 December
2024
Ordinary 25p
shares held at
31 December
2023
Lord Macpherson
of Earl's Court
(Chairman)
Beneficial 125,000 112,000
Karyn Lamont Beneficial 2,000 2,000
Dame Mariot Leslie Beneficial 10,000 10,000
Christine
Montgomery
Beneficial 15,000 15,000
Padmesh Shukla
(appointed
20February 2024)
Beneficial 2,001 –
Under the Articles of Association, each Director is required to hold at least
2,000 shares in the Company.
Statement of voting at Annual General Meeting
At the last Annual General Meeting, of the
proxy votes received in respect of the Directors’
Remuneration Report, 98.8% were in favour, 0.7%
were against and votes withheld were 0.5%. At the
last Annual General Meeting at which the Directors’
Remuneration Policy was considered (April 2023),
96.9% were in favour, 2.5% against and votes
withheld were 0.6%.
Relative importance of spend on pay
The table below shows the actual expenditure during
the year in relation to Directors’ remuneration and
distributions to shareholders.
2024
£’000
2023
£’000
Change
%
Directors’ remuneration 174 171 1.8
Dividends paid
toshareholders
25,834 24,830 4.0
Company performance
The following graph compares the total return
(assuming all dividends are reinvested) to ordinary
shareholders compared to the total shareholder
return on a notional investment made up of shares
in the component parts of the FTSE All‑Share Index.
This index was chosen for comparison purposes, as
it is a widely used measure of performance for UK
listed companies. It also shows the total returns of
the FTSE All‑World Index (in sterling terms), which is
the Company’s benchmark.
Performance graph
Cumulative to 31 December
20242014 2016 2019 2021 20232015 20182017 2020 2022
● SAINTS share price
Source: LSEG and relevant underlying index providers.
See disclaimer on page 116.
All figures are total returns (see glossary of terms and alternative
performance measures on pages 122 to 124).
● Benchmark* ●
FTSE All-Share
100
350
150
300
250
200
* The Company’s benchmark is the FTSE All‑World Index (in sterling terms).
Past performance is not a guide to future performance.
Approval
The Directors’ Remuneration Report on pages 75
to 77 was approved by the Board of Directors and
signed on its behalf on 12 February 2025.
Lord Macpherson of Earl’s Court
Chairman
Governance report
Annual Report and Financial Statements 2024
78
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 comply with the
Companies Act 2006. They are responsible for such
internal control as they determine is necessary to
enable the preparation of financial statements that
are free from material misstatement, whether due
to fraud or error, and have general responsibility
for taking such steps as are reasonably open to
them to safeguard the assets of the Company and
to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing a Strategic report,
Directors’ report, Directors’ remuneration report and
Corporate governance statement that complies with
that law and those regulations.
The Directors have delegated responsibility to
the Managers for the maintenance and integrity
of the Company’s page on the Managers’
website. Legislation in the United Kingdom
governing the preparation and dissemination of
FinancialStatements may differ from legislation
inotherjurisdictions.
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. Under
that law they are required to prepare the Financial
Statements in accordance with United Kingdom
Accounting Standards including FRS 102 ‘The
Financial Reporting Standard applicable in the UK
and Republic of Ireland’.
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 its profit or loss 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 United Kingdom
Accounting Standards have been followed,
subjectto any material departures disclosed
andexplained in the Financial Statements;
• assess the Company’s ability to continue as
agoing concern, disclosing as applicable,
mattersrelated to going concern; and
• use the going concern basis of accounting unless
they either intend to liquidate the Company or to
cease operations, or have no realistic alternative
but to do so.
Statement of Directors’
responsibilities
in respect of the Annual Report and the Financial Statements
The Scottish American Investment Company P.L.C.
79
Responsibility statement of the Directors
in respect of the annual financial report
We confirm that to the best of our knowledge:
• the Financial Statements, which have been
prepared in accordance with applicable law and
United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting
Practice) including FRS 102 ‘The Financial
Reporting Standard applicable in the UK and
Republic of Ireland’, give a true and fair viewof
the assets, liabilities, financial position andprofit
or loss of the Company;
• the Strategic Report includes a fair review
of thedevelopment and performance of
the business and the position of the issuer,
togetherwith a description of the principal
risksand uncertainties that the issuer and
business faces;and
• the Annual Report and Financial Statements
taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the
Company’s position and performance,
businessmodel and strategy.
On behalf of the Board
Lord Macpherson of Earl’s Court
12 February 2025
Notes
The following notes relate to financial statements published on a website and are not included in the printed version of the Annual
Report and Financial Statements:
• The maintenance and integrity of the Baillie Gifford & Co website is the responsibility of Baillie Gifford & Co; the work carried out by
the auditor does not involve consideration of these matters and accordingly, the auditor accepts no responsibility for any changes
that may have occurred to the financial statements since they were initially presented on the website.
• Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
Financial
report
The Financial Statements for the
year to 31 December 2024 are
set out on pages 81 to 107 have
been prepared in accordance with
FRS102 ‘The Financial Reporting
Standard applicable in the UK
andRepublic of Ireland’.
The Scottish American Investment Company P.L.C.
81
Independent
auditor’sreport
to the members of Scottish American Investment Company P.L.C.
ethical responsibilities in accordance with
theserequirements.
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 the audit.
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 evaluation
of the Directors’ assessment of the Company’s
ability to continue to adopt the going concern basis
of accounting included
• Confirmation of our understanding of the
Company’s going concern assessment process
and engaged with the Directors and the Company
Secretary to determine if all key factors that we
have become aware of during our audit were
considered in their assessment.
• Inspection of the Directors’ assessment of
going concern, including the revenue forecast,
for the period to 28 February 2026 which is at
least twelve months from the date the financial
statements are authorised for issue. In preparing
the revenue forecast, the Company has concluded
that it is able to continue to meet its ongoing costs
as they fall due.
• Review of the factors and assumptions, including
the impact of the current economic environment,
as applied to the revenue forecast and the liquidity
assessment of the investments. We considered
the appropriateness of the methods used to
calculate the revenue forecast and the liquidity
assessment and determined, through testing
of the methodology and calculations, that the
methods, inputs and assumptions utilised were
appropriate to be able to make an assessment for
the Company.
Opinion
We have audited the financial statements of The
Scottish American Investment Company P.L.C. (the
Company) for the year ended 31 December 2024
which comprise of the Income statement, Balance
sheet, Statement of changes in equity, Cash flow
statement and the related notes 1 to 22, including
a summary of significant accounting policies. The
financial reporting framework that has been applied
in their preparation is applicable law and United
Kingdom Accounting Standards including FRS 102
“The Financial Reporting Standard applicable in
the UK and Republic of Ireland” (United Kingdom
Generally Accepted Accounting Practice).
In our opinion, the financial statements:
• give a true and fair view of the Company’s affairs
as at 31 December 2024 and of its profit for the
year then ended;
• have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; 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 believe that the
audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
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 public
interest entities, and we have fulfilled our other
Financial report
Annual Report and Financial Statements 2024
82
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of
materiality and our allocation of performance
materiality determine our audit scope for the Company.
This enables us to form an opinion on the financial
statements. We take into account size, risk profile,
the organisation of the Company and effectiveness of
controls, the potential impact of climate change and
changes in the business environment when assessing
the level of work to be performed. All audit work was
performed directly by the audit engagement team
with input from our valuation specialists in auditing the
investment property valuations.
Climate change
There has been increasing interest from stakeholders
as to how climate change will impact companies. The
Company has determined that the most significant
future impacts from climate change on its operations
maybe from Environmental, Social and Governance
matters in investee companies and environmental
factors such as flood risk potentially impacting the
attractiveness and valuation of investment property.
This could lead to the Company’s own shares being
less attractive to investors, adversely affecting its own
share price. This is explained on pages 45 to 49 in the
principal and emerging risks section, which form part
of the “Other information,” rather than the audited
financial statements. Our procedures on these
disclosures therefore consisted solely of considering
whether they are materially inconsistent with the
financial statements or our knowledge obtained in
the course of the audit or otherwise appear to be
materially misstated.
Our audit effort in considering climate change
was focused on the adequacy of the Company’s
disclosures in the financial statements as set out
in note 1 and concluded that there was no further
impact of climate change to be taken into account
other than investment property valuations as the
quoted investments are valued based on market
pricing as required by FRS102. Investment properties
are valued by an independent valuer in accordance
with RICS Valuation Standards. The valuation
standards require sustainability, including physical
risks such as flooding, to be assessed for fair value
implications. Our audit procedures over property
valuations are set out in the Key audit matters section
of this audit report. We also challenged the Directors’
considerations of climate change in their assessment
of viability and associated disclosures.
• Assessment of the risk of breaching the debt
covenants as a result of a reduction in the value
of the Company’s portfolio. We calculated the
Company’s compliance with debt covenants and
we performed reverse stress testing in order to
identify what factors would lead to the Company
breaching the financial covenants.
• Consideration of the mitigating factors included
in the covenant calculations that are within
the control of the Company. We reviewed
the Company’s assessment of the liquidity of
investments held and evaluated the Company’s
ability to sell those investments in order to cover
working capital requirements should revenue
decline significantly.
• Review of the Company’s going concern
disclosures included in the annual report in order
to assess that the disclosures were appropriate
and in conformity with the reporting standards.
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 to to 28February
2026, which is at least 12 months from when the
financial statements are authorised for issue.
In relation to the Company’s reporting on how they
have 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 Directors considered
it appropriate to adopt the going concern basis
ofaccounting.
Our responsibilities and the responsibilities of
the Directors with respect to going concern are
described in the relevant sections of this report.
However, because not all future events or conditions
can be predicted, this statement is not a guarantee
as to the Company’s ability to continue as a
goingconcern.
Overview of our audit approach
Key audit
matters
• The risk of incomplete or inaccurate revenue
recognition including the recognition of special
dividends as revenue or capital items in the
Income statement
• Incorrect valuation or ownership of the
investment portfolio
Materiality • Overall materiality of £9.5m which represents
1% of shareholders’ funds.
The Scottish American Investment Company P.L.C.
83
Key audit matters
Key audit matters are those matters that, in our professional judgment, 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) that we identified. These matters included 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 our opinion thereon, and we do not provide a separate opinion on
these matters.
Risk Our response to the risk
Key observations
communicated to the
AuditCommittee
Incomplete or inaccurate revenue
recognition including the recognition
of special dividends as revenue or
capital items in the Income statement
Refer to the Audit Committee Report
(pages 72 to 74); and Accounting
policies (pages 92 and 93);
The total revenue for the year to
31December 2024 was £32.4m
(2023: £30.1m), being £25.6m
dividend income (2023: £23m), £1.1m
bond income (2023: £2.4m), £5.5m
rental income (2023: £4.5m) and
£0.2m (2023: £0.2m) other income.
Included in dividend income were
Special Dividends of £1.03m, all of
which were classified as revenue
innature.
There is a risk of incomplete or
inaccurate recognition of revenue
through the failure to recognise
proper income entitlements
or to apply an appropriate
accountingtreatment.
The Directors may be required to
exercise judgment in determining
whether income receivable in the
form of special dividends should be
classified as ‘revenue’ or ‘capital’ in
the Income Statement.
We performed the following procedures:
We have obtained an understanding of Baillie Gifford’s processes
and controls surrounding the recognition and classification of
special dividends by reviewing the internal control reports and by
performing our walkthrough procedures to evaluate the design
and implementation of controls.
For all interest and dividends received and accrued, we
recalculated the income by multiplying the investment holdings
at the coupon or ex‑dividend date, traced from the accounting
records, by the coupon rate or dividend per share, which was
agreed to an independent data vendor. We agreed a sample of
income received to bank statements and, where applicable, we
also agreed the exchange rates to an external source.
For 100% dividends accrued at the year end, we reviewed
the investee company announcements to assess whether the
dividend obligation arose prior to 31 December 2024.
To test completeness of recorded income, we tested that
interest and dividends had been recorded for all investments
with reference to announcements obtained from an independent
datavendor.
For rental income, we verified 100% of rental rates to lease
agreements, recalculated 100% of the rental amount and
agreed rental receipts to bank statements. Where applicable, we
recalculated amounts recorded as prepayments in advance. We
have calculated the rent free receivables and have agreed these
to the receivables reconciliation.
We tested that all of the expected rent receipts had been
recorded with reference to executed lease agreements of
property held within the period to ensure completeness.
For all investments held during the year, we reviewed the type of
dividends received with reference to an external data vendor to
identify those which are special.
The Company received five special dividends with none above
our testing threshold so we tested a sample of two special
dividends (CME Group, 27 December 2024 and AVI, 16October
2024). The classification of revenue by the Manager for those
dividends is in agreement with our view. The remaining special
dividends were below our revenue testing threshold inaggregate.
The results of
our procedures
identified no material
misstatement in
relation to the risk
of incomplete or
inaccurate revenue
recognition including
the recognition of
special dividends
between revenue and
capital items in the
Income statement
Financial report
Annual Report and Financial Statements 2024
84
Risk Our response to the risk
Key observations
communicated to the
AuditCommittee
Incorrect valuation or ownership of the
investment portfolio
Refer to the Audit Committee Report
(pages 72 to 74); and Accounting
policies (pages 92 and 93);
The valuation of the investment
portfolio at 31 December 2024
was £1,043.8m (2023: £1,021.9m)
consisting of quoted investments
with an aggregate value of £948.3m
(2023: £955.5m), and investment
property with an aggregate value of
£95.5m (2023: £66.4m).
The valuation of the assets held in the
investment portfolio is the key driver
of the Company’s net asset value
and total return. Incorrect investment
pricing, or a failure to maintain proper
legal title to the investments held by
the Company could have a significant
impact on the portfolio valuation and
the return generated for shareholders.
The fair value of quoted investments is
determined by reference to bid value or
the last traded price depending on the
convention of the exchange on which
the investment is quoted.
Investments in property are held at
fair value. Fair value of the property
investments is estimated by an
independent professional valuer
(Savills) on an open market basis.
The valuation of the property
investments, and the resultant impact
on the unrealised gains/(losses), is
the area requiring the most significant
judgment and estimation in the
preparation of the financial statements.
We performed the following procedures:
We obtained an understanding of Baillie Gifford’s and OLIM’s
processes and controls surrounding legal title, investment pricing
and unrealised gains and losses by performing our walkthrough
procedures to evaluate the design and implementation of controls.
Listed equity and bond portfolio procedures (‘the quoted
investments’)
For all quoted investments in the portfolio, we have compared
the market prices and exchange rates applied to an independent
pricing vendor and recalculated the investment valuations as at
the year end.
We have inspected the stale pricing reports produced by Baillie
Gifford to identify prices that have not changed within one
business day and verified whether the quoted price is a fair value
through review of trading activity.
Investment Property procedures
We agreed the value of all the properties in the investment
portfolio held at the year end to the open market valuations
included in the valuation report provided by Savills.
We agreed a sample of inputs used by Savills in the valuations to
source data.
We reviewed and challenged the valuation movements on
investment properties with reference to the applicable regional
and sectoral real estate index.
• We engaged our property valuation specialist team to
undertake a review of the valuations for a sample of properties
including the calculation of a reasonable range. This review
included the following procedures:
• Reviewed and challenged the assumptions used by Savills in
undertaking their valuation and an assessment of the valuation
methodology adopted
• Undertook discussions with Savills which included an overview
of the properties characteristics including the covenant
strength of the tenants, occupancy and rent cover.
• Recalculated the unrealised gains/(losses) on all investment
properties as at the year end using the book‑cost reconciliation
and reviewed the fair value hierarchy disclosure.
For all purchases and sales of property investments we obtained
supporting documents from OLIM Property Limited (‘the
Investment Property Manager’) and have agreed these to the
purchase cost or sales proceeds per the accounting records and
to the bank statements. We compared the sale price to the last
valuation produced by Savills and challenged Savills with any
that had material differences.
We have tested the ownership by comparing the Company’s
investment holdings at 31 December 2024 to an independent
confirmation received directly from the Company’s Custodian or
solicitor, testing any reconciling items to supporting documentation.
The results of
our procedures
identified no material
misstatement in
relation to the risk of
incorrect valuation
or ownership of the
investment portfolio.
Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably
be expected to influence the economic decisions
of the users of the financial statements. Materiality
provides a basis for determining the nature and
extent of our audit procedures.
The Scottish American Investment Company P.L.C.
85
We determined materiality for the Company to be
£9.5m (2023: £9.4m), which is 1% (2023: 1%) of
shareholders’ fund. We believe that shareholders’
funds provides us with a materiality aligned to the
key measure of the Company’s performance.
Performance materiality
The application of materiality at the individual
account or balance level. It is set at an amount to
reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with
our assessment of the Company’s overall control
environment, our judgement was that performance
materiality was 75% (2023: 75%) of our planning
materiality, namely £7.2m (2023: £7.0m). We have
set performance materiality at this percentage due
to our past experience of the audit that indicates
a lower risk of misstatements, both corrected and
uncorrected.
Given the importance of the distinction between
revenue and capital for investment trusts, we have
applied a separate testing threshold for the revenue
column of the Income Statement of £1.46m (2023:
£1.35m), being our reporting threshold.
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would
report to them all uncorrected audit differences in
excess of £0.47m (2023: £0.47m), which is set at
5% of planning materiality, as well as differences
below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against
both the quantitative measures of materiality
discussed above and in light of other relevant
qualitative considerations in forming our opinion.
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
contained within the annual report.
Our opinion on the financial statements does not
cover the other information and, except to the extent
otherwise explicitly stated in this 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 the 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 the other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed
bytheCompanies 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
• the strategic report and Directors’ reports have
been prepared in accordance with applicable
legalrequirements;
Matters on which we are required
toreportby exception
In the 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 Directors’ report.
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,
or returns adequate for our audit have not been
received from branches not visited by us; or
• the 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
Financial report
Annual Report and Financial Statements 2024
86
Corporate Governance Statement
We have reviewed 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 Code
specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit,
we have concluded that each of the following
elements of the Corporate Governance Statement is
materially consistent with the financial statements or
our knowledge obtained during the audit:
• Directors’ statement with regards to the
appropriateness of adopting the going concern
basis of accounting and any material uncertainties
identified set out on page 69;
• Directors’ explanation as to its assessment of the
Company’s prospects, the period this assessment
covers and why the period is appropriate set out
on page 50;
• Director’s statement on whether it has a
reasonable expectation that the group will be able
to continue in operation and meets its liabilities set
out on page 69;
• Directors’ statement on fair, balanced and
understandable set out on page 79;
• Board’s confirmation that it has carried out a
robust assessment of the emerging and principal
risks set out on pages 45 to 49;
• The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on pages 68 and
69; and;
• The section describing the work of the audit
committee set out on pages to 72 to 74.
Responsibilities of Directors
As explained more fully in the Directors’
responsibilities statement set out on pages 78 and
79, 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 orerror.
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
ofthefinancial 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.
Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of
non‑compliance with laws and regulations. We
design procedures in line with our responsibilities,
outlined above, to detect irregularities, including
fraud. The risk of not detecting a material
misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through
collusion. The extent to which our procedures are
capable of detecting irregularities, including fraud is
detailed below.
However, the primary responsibility for the
prevention and detection of fraud rests with both
those charged with governance of the Company and
management.
• We obtained an understanding of the legal and
regulatory frameworks that are applicable to
the Company and determined that the most
significant are United Kingdom Generally
Accepted Accounting Practice, the Companies
Act 2006, the Association of Investment
The Scottish American Investment Company P.L.C.
87
Companies Code of Corporate Governance, The
Association of Investment Companies Statement
of Recommended Practice, the Listing Rules, the
UK Corporate Governance Code, Section 1158 of
the Corporation Tax Act 2010 and The Companies
(Miscellaneous Reporting) Regulations 2018.
• We understood how the Company is complying
with those frameworks through discussions with
the Audit Committee and Company Secretary and
review of Audit Committee meeting papers and
board minutes.
• We assessed the susceptibility of the Company’s
financial statements to material misstatement,
including how fraud might occur by considering
the key risks impacting the financial statements.
We identified fraud risks with respect to the
incomplete or inaccurate classification of special
dividends as revenue or capital items in the
Income statement and the incorrect valuation of
investment properties and the resulting impact on
unrealised gains and losses. Further discussion of
our approach is set out in the section on key audit
matters above.
• Based on this understanding we designed our
audit procedures to identify non‑compliance
with such laws and regulations. Our procedures
involved review of the reporting to the Directors by
the Manager with respect to the application of the
documented policies and procedures and review
of the financial statements to ensure compliance
with the reporting requirements of the Company
A further description of our responsibilities for
theaudit of the financial statements is located
onthe Financial Reporting Council’s website
athttps://frc.org.uk/auditorsresponsibilities.
Thisdescription forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the audit
committee, we were appointed by the Company
on 1 April 2022 to audit the financial statements
for the year ending 31 December 2022 and
subsequent financial periods.
• The period of total uninterrupted engagement
including previous renewals and reappointments
is 3 years, covering the years ending 31 December
2022 to 31 December 2024.
• The audit opinion is consistent with the additional
report to the audit committee.
Use of our 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.
Caroline Mercer (Senior statutory auditor)
forandonbehalf of Ernst & Young LLP,
Statutory Auditor
Edinburgh
12 February 2025
Financial report
Annual Report and Financial Statements 2024
88
For the year ended 31 December 2024 (with comparatives as at 31 December 2023)
Notes
2024
Revenue
£’000
2024
Capital
£’000
2024
Total
£’000
2023
Revenue
£’000
2023
Capital
£’000
2023
Total
£’000
Gains on investments – securities 9 – 28,654 28,654 – 91,351 91,351
Gains/(losses) on investments –
property
9 – 1,887 1,887 – (6,054) (6,054)
Currency (losses)/gains 14 – (26) (26) – 32 32
Income 2 32,387 – 32,387 30,078 – 30,078
Management fees 3 (1,091) (3,271) (4,362) (1,031) (3,094) (4,125)
Other administrative expenses 4 (1,349) – (1,349) (1,268) – (1,268)
Net return before finance costs
andtaxation
29,947 27,244 57,191 27,779 82,235 110,014
Finance costs of borrowings 5 (711) (2,134) (2,845) (711) (2,134) (2,845)
Net return on ordinary
activities before taxation
29,236 25,110 54,346 27,068 80,101 107,169
Tax on ordinary activities
6
(3,414) 940 (2,474) (3,108) 977 (2,131)
Net return on ordinary
activities after taxation
25,822 26,050 51,872 23,960 81,078 105,038
Net return per ordinary share 7 14.50p 14.62p 29.12p 13.48p 45.63p 59.11p
A final dividend for the year of 4.175p is proposed (2023 – 3.80p), making a total dividend for the year of
14.875p (2023 – 14.10p). More information on dividend distributions can be found in note 8 on page 96.
The total column of the Income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns are
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing operations.
A Statement of comprehensive income is not required as there is no other comprehensive income.
The accompanying notes on pages 92 to 107 are an integral part of the Financial Statements.
Income
statement
The Scottish American Investment Company P.L.C.
89
As at 31 December 2024 (with comparatives as at 31 December 2023)
Notes
2024
£’000
2024
£’000
2023
£’000
2023
£’000
Non-current assets
Investments – securities 9 948,345 955,460
Investments – property 9 95,450 66,350
1,043,795 1,021,810
Current assets
Debtors 10 4,474 3,549
Cash and cash equivalents 18 2,818 7,340
7,292 10,889
Creditors
Amounts falling due within one year 11 (3,652) (2,787)
Net current assets 3,640 8,102
Total assets less current liabilities 1,047,435 1,029,912
Creditors
Amounts falling due after more than one year 12 (94,742) (94,728)
Net assets 952,693 935,184
Capital and reserves
Share capital 13 44,579 44,579
Share premium account 14 186,100 186,100
Capital redemption reserve 14 22,781 22,781
Capital reserve 14 682,413 664,892
Revenue reserve 14 16,820 16,832
Shareholders’ funds 952,693 935,184
Net asset value per ordinary share* 15 539.3p 524.5p
The Financial Statements of The Scottish American Investment Company P.L.C. (company registration number
SC000489) were approved and authorised for issue by the Board and were signed on 12 February 2025.
Lord Macpherson of Earl’s Court
Chairman
The accompanying notes on pages 92 to 107 are an integral part of the Financial Statements.
* See glossary of terms and alternative performance measures on pages 122 to 124.
Balance
sheet
Financial report
Annual Report and Financial Statements 2024
90
For the year ended 31 December 2024
Notes
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
Shareholders’ funds at 1 January 2024 44,579 186,100 22,781 664,892 16,832 935,184
Shares bought back into treasury 13 – – – (8,529) – (8,529)
Net return on ordinary activities
aftertaxation
7 – – – 26,050 25,822 51,872
Dividends paid in the year 8 – – – – (25,834) (25,834)
Shareholders’ funds at 31 December 2024 44,579 186,100 22,781 682,413 16,820 952,693
For the year ended 31 December 2023
Notes
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
Shareholders’ funds at 1 January 2023 44,188 178,189 22,781 583,814 17,702 846,674
Shares issued 13 391 7,911 – – – 8,302
Net return on ordinary activities
aftertaxation
7 – – – 81,078 23,960 105,038
Dividends paid in the year 8 – – – – (24,830) (24,830)
Shareholders’ funds at 31 December 2023 44,579 186,100 22,781 664,892 16,832 935,184
The accompanying notes on pages 92 to 107 are an integral part of the Financial Statements.
Statement of
changes in equity
The Scottish American Investment Company P.L.C.
91
The accompanying notes on pages 92 to 107 are an integral part of the Financial Statements.
For the year ended 31 December 2024 (with comparatives as at 31 December 2023)
Notes
2024
£’000
2024
£’000
2023
£’000
2023
£’000
Net return on ordinary activities before taxation 54,346 107,169
Adjustments to reconcile company profit before tax to net cash flow from operating activities
Net gains on investments – securities (28,654) (91,351)
Net (gains)/losses on investments – property (1,887) 6,054
Currency losses/(gains) 26 (32)
Finance costs of borrowings 2,845 2,845
Other capital movements
Changes in debtors (1,001) (340)
Change in creditors 620 204
Other non‑cash changes 63
62
Taxation
Overseas withholding tax (2,398) (2,126)
Cash from operations 23,960 22,485
Interest paid (2,845) (2,845)
Net cash inflow from operating activities 21,115 19,640
Cash flows from investing activities
Acquisitions of investments – securities (128,263) (109,728)
Acquisitions of investments – property (32,867) (15,057)
Disposals of investments – securities 163,969 115,394
Disposals of investments – property 5,654 9,403
Net cash inflow from investing activities 8,493 12
Cash flows from financing activities
Equity dividends 8 (25,834) (24,830)
Shares issued – 8,302
Shares bought back (8,270) –
Net cash outflow from financing activities (34,104) (16,528)
(Decrease)/increase in cash and cash equivalents (4,496) 3,124
Exchange movements (26) 32
Cash and cash equivalents at start of year 17 7,340 4,184
Cash and cash equivalents at end of year 17 2,818 7,340
Cash flow
statement
Financial report
Annual Report and Financial Statements 2024
92
01 Principal accounting policies
The Financial Statements for the year to 31 December
2024 have been prepared in accordance with FRS 102
‘The Financial Reporting Standard applicable in the UK
and Republic of Ireland’ and on the basis of the accounting
policies set out below which are unchanged from the prior
year and have been applied consistently.
a. Basis of accounting
All of the Company’s operations are of a continuing
nature and the Financial Statements are prepared
on a going concern basis under the historical cost
convention, modified to include the fair value of fixed
asset investments at fair value through profit or loss,
and on the assumption that approval as an investment
trust under section 1158 of the Corporation Tax Act 2010
and the Investment Trust (Approved Company) (Tax)
Regulations 2011 will be retained. The Board has, in
particular, considered heightened geopolitical tensions
and conflicts and macroeconomic concerns, including
increased inflation and interest rates, but does not believe
the Company’s going concern status is affected. The
Company’s assets, the majority of which are investments
in quoted securities which are readily realisable, exceed
its liabilities significantly.
All borrowings require the prior approval of the Board.
Gearing levels and compliance with borrowing covenants
are reviewed by the Board on a regular basis. The Company
has continued to comply with the investment trust status
requirements of section 1158 of the Corporation Tax Act
2010 and the Investment Trust (Approved Company) (Tax)
Regulations 2011. Accordingly, the Financial Statements
have been prepared on the going concern basis as it is
the Directors’ opinion having assessed the principal and
emerging risks set out in the viability statement on page
50 which assesses the prospects of the Company over
a period of five years, that the Company will continue in
operational existence until 28 February 2026, which is for
a period of at least twelve months from the date of approval
of these Financial Statements.
The Financial Statements have been prepared in
accordance with the Companies Act, applicable
United Kingdom accounting standards and with the
AIC’s Statement of Recommended Practice ‘Financial
Statements of Investment Trust Companies and
Venture Capital Trusts’ issued in November 2014 and
updated in July 2022 with consequential amendments.
Inorder to reflect better the activities of the Company
and in accordance with guidance issued by the AIC,
supplementary information which analyses the profit
and loss account between items of a revenue and capital
nature has been presented in the Income statement.
The Directors have determined the Company’s functional
currency to be sterling as the Company’s shareholders
are predominantly based in the UK and the Company
and its investment manager, who are subject to the UK’s
regulatory environment, are also UK based.
Financial assets and financial liabilities are recognised in
the Company’s Balance sheet when it becomes a party to
the contractual provisions of the instrument.
The Company has only one material segment being that
of an investment trust company investing in a portfolio of
long term investments.
b. Investments
Purchases and sales of investments in securities are
accounted for on a trade date basis. Purchases and
sales of investments in property are accounted for on a
completion date basis.
Investments in securities are classified as held at fair
value through profit and loss upon initial recognition.
The fair value of listed security investments traded on
an active market is bid value or, in the case of holdings
on certain recognised overseas exchanges, last traded
prices. The fair value of other listed security investments
investments uses valuation techniques, determined by the
Directors, based upon latest dealing prices, stockbroker
valuations, net asset values and other information, as
appropriate. Changes in the fair value of investments
in securities and gains and losses on disposal are
recognised as capital items in the Income statement.
Investments in property are initially measured at fair
valuation of consideration plus transaction costs. After
initial recognition, properties are measured at fair value.
Changes in fair value and gains and losses on disposal are
recognised as capital items in the Income statement. The
fair value of the property investments held at the year end
has been estimated by independent professional valuers in
accordance with the RICS appraisal and valuation manual.
In preparing these Financial Statements the Directors
have considered the impact of climate change risk as a
principal risk as set out on page 47. In line with FRS 102
investments are valued at fair value, being primarily quoted
prices for investments in active markets at the Balance
sheet date, and therefore reflect market participants view
of climate change risk. Investment property is valued by
an independent valuer in accordance with RICS Valuation
Standards. The valuation standards require sustainability,
including physical risk such as flooding, to be assessed for
fair value implications.
Notes to the
Financial Statements
The Scottish American Investment Company P.L.C.
93
c. Cash and cash equivalents
Cash includes cash in hand and deposits repayable on
demand. Deposits are repayable on demand if they can be
withdrawn at any time without notice and without penalty
or if they have a maturity or period of notice of not more
than one working day.
d. Income
i. Income from equity investments is brought into account
on the date on which the investments are quoted ex‑
dividend or, where no ex‑dividend date is quoted, when
the Company’s right to receive payment is established.
ii. Income from debt securities is recognised on an
effective interest rate basis. Where income returns are
for a non‑fixed amount, the impact of these returns
on the effective interest rate is recognised once such
returns are known. If it is not probable that a return will
be received, its recognition is deferred until that doubt
is removed.
iii. Unfranked investment income includes the taxes
deducted at source.
iv. Interest receivable on deposits is recognised on an
accruals basis.
v. If scrip is taken in lieu of dividends in cash, the net
amount of the cash dividend declared is credited to the
revenue account. Any excess in the value of the shares
received over the amount of the cash dividend foregone
is recognised as capital.
vi. Rental income, excluding VAT, arising on investment
properties, is accounted for on a straight line basis over
the lease term.
e. Expenses
All expenses except for finance costs are accounted for
on an accruals basis. Expenses are charged through the
revenue account except as follows:
i. where they relate directly to the acquisition or disposal
of an investment, in which case they are recognised as
capital; and
ii. where they are connected with the maintenance or
enhancement of the value of investments. In this
respect investment and property management fees
are allocated 25% to revenue and 75% to capital, in
line with the Board’s expectation of returns from the
Company’s investments over the long term in the form
of revenue and capital respectively.
f. Long term borrowings and finance costs
Long term borrowings are carried in the Balance sheet at
amortised cost, representing the cumulative amount of
net proceeds on issue plus accrued finance costs. The
finance costs of such borrowings are allocated 25%
to revenue and 75% to capital, in line with the Board’s
expectation of returns from the Company’s investments
over the long term in the form of revenue and capital
respectively. Finance costs include the difference between
the repayable value on maturity and the proceeds
received on issue and costs of issuance which are written
off on an effective interest rate basis over the life of the
borrowings. Gains and losses on the repurchase or early
settlement of debt is wholly charged to capital.
g. Taxation
The tax effect of different items of income and
expenditure is allocated between revenue and capital on
the same basis as the particular item to which it relates,
under the marginal method, using the Company’s
effective tax rate for the accounting period. Deferred
taxation is provided on all timing differences, calculated
at the current tax rate relevant to the benefit or liability.
Deferred tax assets are recognised only to the extent that
it will be more likely than not that there will be taxable
profits from which underlying timing differences can be
deducted.
h. Foreign currencies
Transactions involving foreign currencies are converted
at the rate ruling at the time of the transaction. Monetary
assets and liabilities and fixed asset investment in foreign
currencies are translated at the closing rates of exchange
at the Balance sheet date. Any gain or loss arising from
a change in exchange rate subsequent to the date of the
transaction is included as an exchange gain or loss in the
Income statement as capital or revenue as appropriate.
i. Capital reserve
Gains and losses on disposal of investments, changes in
fair value of investments held, exchange differences of a
capital nature and the amounts by which other financial
assets and liabilities valued at fair value differ from their
book value are dealt with in this reserve. Purchases of the
Company’s own shares and issuance proceeds are both
recognised in this reserve. 75% of management fees
and finance costs are allocated to the capital reserve in
accordance with the Company’s objective of combining
capital and income growth.
j. Significant estimates and judgements
The preparation of the Financial Statements requires
the use of estimates and judgements that affect the
reported amounts of assets and liabilities at the reporting
date. However, uncertainty about those estimates and
judgements could result in an actual outcome which may
differ from these estimates.
The Directors believe that the most significant estimation
and uncertainty relates to the valuation of the property
portfolio. External, independent professional valuers who
hold a recognised and relevant professional qualification
and have recent experience in the location and class
of the investment property being valued, are used to
determine the property fair values which are based on
recent, comparable market transactions on an arm’s
length basis. Other factors including the condition and
location of the property, rental yields within the market
and the length and value of rental agreements in place,
are considered. As valuation outcomes may differ from
the fair value estimates a sensitivity analysis is provided
in Property sensitivity analysis in Note 19 on pages 106 to
107 to illustrate the effect on the Financial Statements of
an over or under estimation of fair values.
Financial report
Annual Report and Financial Statements 2024
94
02 Income
2024
£’000
2023
£’000
Income from investments
UK dividends 2,402 2,400
UK interest – 174
Overseas dividends 23,168 20,602
Overseas interest 1,058 2,270
26,628 25,446
Other income
Deposit interest 180 151
Rental income 5,542
4,451
Other income 37 30
5,759 4,632
Total income 32,387 30,078
Total income comprises:
Dividends from financial assets classified at fair value through profit or loss 25,570 23,002
Interest from financial assets designated at fair value through profit or loss 1,058 2,444
Interest from financial assets not at fair value through profit or loss 180 151
Other income not from financial assets 5,579 4,481
32,387 30,078
03 Management fees
2024
Revenue
£’000
2024
Capital
£’000
2024
Total
£’000
2023
Revenue
£’000
2023
Capital
£’000
2023
Total
£’000
Investment management fee 973 2,918 3,891 938 2,814 3,752
Property management fee 118 353 471 93 280 373
1,091 3,271 4,362 1,031 3,094 4,125
Details of the Investment Management Agreement and Property Management Agreement are disclosed on page 59. Baillie Gifford
& Co Limited’s annual management fee is 0.45% of the first £500 million of total assets and 0.35% of the remaining total assets,
total assets being the value of all assets held (excluding the property portfolio) less all liabilities, other than any liability in the form
of debt intended for investment purposes, calculated on a quarterly basis. No secretarial fee is payable. OLIM Property Limited
receives an annual fee of 0.5% of the value of the property portfolio, subject to a minimum quarterly fee of £6,250.
The Scottish American Investment Company P.L.C.
95
04 Other administrative expenses – all charged to revenue
2024
£’000
2023
£’000
General administrative expenses 478 428
Marketing* 390 375
Custodian/depositary fees 188 179
Auditor’s remuneration – statutory audit of Company’s Annual Financial Statements 83 81
Directors’ fees (see Directors’ remuneration report on page 76) 168 164
Registrar fees 42 41
1,349 1,268
* The Company is part of a marketing programme which includes all the Investment Trusts managed by the Manager. The marketing strategy has an
ongoing objective to stimulate demand for the Company’s shares. The cost of this marketing strategy is borne in partnership by the Company and
the Manager. The Manager matches the Company’s marketing contribution and provides the resource to manage and run the programme.
05 Finance costs of borrowings
2024
Revenue
£’000
2024
Capital
£’000
2024
Total
£’000
2023
Revenue
£’000
2023
Capital
£’000
2023
Total
£’000
Financial liabilities not at fair value
through profit or loss:
Loan notes interest (see note 12) 711 2,134 2,845 711 2,134 2,845
06 Tax on ordinary activities
2024
Revenue
£’000
2024
Capital
£’000
2024
Total
£’000
2023
Revenue
£’000
2023
Capital
£’000
2023
Total
£’000
UK corporation tax 977 (977) – 1,015 (1,015) –
Overseas taxation 2,474 – 2,474 2,131 – 2,131
Double taxation relief (37) 37 – (38) 38 –
3,414 (940) 2,474 3,108 (977) 2,131
2024
£’000
2023
£’000
The tax charge for the year is lower than the standard rate of corporation tax in the UK of 25%
(2023 – 23.5%*)
The differences are explained below:
Net return on ordinary activities before taxation 54,346 107,169
Net return on ordinary activities before taxation multiplied by the standard rate of corporation tax
in the UK of 25% (2023 – 23.5%*)
13,587 25,206
Capital returns not taxable (7,629) (20,069)
Income not taxable (6,302) (5,352)
Taxable loss not utilised 344 215
Overseas tax 2,474 2,131
Total tax charge for the year 2,474 2,131
* A tax rate of 23.5% reflects the increase in the UK corporation tax rate from 19% to 25% from 1 April 2023.
Financial report
Annual Report and Financial Statements 2024
96
06 Tax on ordinary activities (continued)
As at 31 December 2024 the Company had surplus management expenses and losses on non‑trading loan relationships of
£42,932,000 (2023 – £41,555,000). No deferred tax asset has been recognised in respect of these amounts because the
Company is not expected to generate taxable income in a future period in excess of the deductible expenses of that future
period and, accordingly, it is unlikely that the Company will be able to reduce future tax liabilities through the use of existing
surplusexpenses.
07 Net return per ordinary share
2024
Revenue
2024
Capital
2024
Total
2023
Revenue
2023
Capital
2023
Total
Net return per ordinary share 14.50p 14.62p 29.12p 13.48p 45.63p 59.11p
Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of £25,822,000
(2023–£23,960,000) and on 178,117,932 (2023 – 177,707,094) ordinary shares of 25p, being the weighted average number of
ordinary shares in issue during the year.
Capital return per ordinary share is based on the net capital gain for the financial year of £26,050,000 (2023 – net capital gain of
£81,078,000), and on 178,117,932 (2023 – 177,707,094) ordinary shares, being the weighted average number of ordinary shares in
issue during the year.
There are no dilutive or potentially dilutive shares in issue.
08 Ordinary dividends
2024 2023 2024
£’000
2023
£’000
Amounts recognised as distributions in the year:
Previous year’s final (paid 11 April 2024) 3.80p 3.67p 6,776 6,487
First interim (paid 20 June 2024) 3.45p 3.30p 6,152 5,861
Second interim (paid 19 September 2024) 3.55p 3.45p 6,330 6,152
Third interim (paid 12 December 2024) 3.70p 3.55p 6,576 6,330
14.50p 13.97p 25,834 24,830
We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the
requirements of section 1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution out of current
year profits by way of dividend for the year is £25,822,000 (2023 – £23,960,000).
2024 2023 2024
£’000
2023
£’000
Dividends paid and payable in respect of the year:
First interim (paid 20 June 2024) 3.45p 3.30p 6,152 5,861
Second interim (paid 19 September 2024) 3.55p
3.45p
6,330 6,152
Third interim (paid 12 December 2024) 3.70p 3.55p 6,576 6,330
Current year’s proposed final dividend (payable 11 April 2025) 4.175p 3.80p 7, 3 7 5 6,776
14.875p 14.10p 26,433 25,119
The Scottish American Investment Company P.L.C.
97
09 Investments
As at 31 December 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Securities
Listed equities 937,287 – – 937,287
Bonds – 11,058 – 11,058
Property
Freehold – – 95,450 95,450
Total financial asset investments 937,287 11,058 95,450 1,043,795
As at 31 December 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Securities
Listed equities 917,594 – – 917,594
Bonds – 37,866 – 37,866
Property
Freehold – – 66,350 66,350
Total financial asset investments 917,594 37,866 66,350 1,021,810
Investments in securities and property are financial assets held at fair value through profit or loss on initial recognition. In
accordance with FRS102 the tables above provide an analysis of these investments based on the fair value hierarchy described
below which reflects the reliability and significance of the information used to measure their fair value.
Fair value hierarchy
The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the
lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement
forthe individual investment in its entirety as follows:
Level 1 – using unadjusted quoted prices for identical instruments in an active market;
Level 2 – using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market
data); and
Level 3 – using inputs that are unobservable (for which market data is unavailable).
Equities
£’000
Bonds
£’000
Property
£’000
2024
Total
£’000
2023
Total
£’000
Cost of investments at start of year 591,555 36,736 54,328 682,619 655,855
Investment holding gains/(losses) atstart of year 326,039 1,130 12,022 339,191 280,732
Value of investments at start of year 917,594 37,866 66,350 1,021,810 936,587
Analysis of transactions during the year:
Purchases at cost 128,263 – 32,867 161,130 124,785
Sales proceeds received (138,511) (25,458) (5,654) (169,623) (124,797)
Amortisation of fixed income book cost – (63) – (63) (62)
Gains/(losses) on investments 29,941 (1,287) 1,887 30,541 85,297
Value of investments at end of year 937,287 11,058 95,450 1,043,795 1,021,810
Cost of investments at end of year 634,994 12,328 83,389 730,711 682,619
Investment holding gains at end of year 302,293 (1,270) 12,061 313,084 339,191
Value of investments at end of year 937,287 11,058 95,450 1,043,795 1,021,810
Financial report
Annual Report and Financial Statements 2024
98
09 Investments (continued)
The company received £169,623,000 (2023 – £124,797,000) from investments sold in the year. The book cost of these
investments when they were purchased was £112,975,000 (2023 – £97,959,000). 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.
Transaction costs of £1,773,000 (2023 – £985,000) and £200,000 (2023 – £189,000) were suffered on purchases and sales in
the year respectively.
The property was valued on an open market basis by Savills as at 31 December 2024.
2024
£’000
2023
£’000
Gains/(losses) on investments
Securities:
Gains on sales 54,800 26,346
Changes in investment holding (losses)/gains (26,146) 65,005
28,654 91,351
Property:
Gains on sales 1,848 492
Changes in investment holding gains 39 (6,546)
1,887 (6,054)
30,541 85,297
10 Debtors
2024
£’000
2023
£’000
Amounts falling due within one year:
Accrued income and prepaid expenses 1,499 1,376
Taxation recoverable 2,975 2,173
4,474 3,549
11 Creditors – amounts falling due within one year
2024
£’000
2023
£’000
Interest payable 637 637
Rental income prepaid 813 589
Other creditors and accruals 2,202 1,561
3,652 2,787
Included in other creditors and accruals is £958,000 (2023 – £968,000) in respect of the management fees due to Baillie Gifford
& Co Limited and £119,000 (2023 – £83,000) in respect of management fees due to OLIM Property Limited.
The Scottish American Investment Company P.L.C.
99
12 Creditors – amounts falling due after more than one year
2024
£’000
2023
£’000
£15m Series C 2.23% 25 June 2036 14,941 14,936
£40m Series A 3.12% 11 April 2045 39,901 39,897
£40m Series B 3.12% 11 April 2049 39,900 39,895
94,742 94,728
The main covenants for the loan notes which are tested monthly are that net tangible assets shall not fall below £120,000,000
and gross borrowings shall not exceed 40% of the Company’s adjusted assets.
13 Share capital
2024
Number
2024
£’000
2023
Number
2023
£’000
Allotted, called‑up and fully paid ordinary shares of 25p each 176,650,758 44,163 178,315,943 44,579
Treasury shares of 25p each 1,665,185 416 – –
178,315,943 44,579 178,315,943 44,579
The Company’s shareholder authority permits it to hold shares bought back in treasury. Such treasury shares may be
subsequently either sold for cash at a premium to net asset value per ordinary share or cancelled. At 31 December 2024, the
Company had authority to buy back 25,064,374 ordinary shares. During the year to 31 December 2024, no ordinary shares
were bought back for cancellation (2023 – no ordinary shares) and 1,665,185 (2023 – none) ordinary shares were bought back
into treasury at a cost of £8,529,000 (2023 – no shares were bought back). Under the provisions of the Company’s Articles of
Association, share buy‑backs are funded from the capital reserve.
The Company has authority to allot shares under section 551 of the Companies Act 2006. During the year, no shares were issued
(2023 – 1,565,000 shares were issued at a premium to net asset value raising proceeds of £8,302,000).
14 Capital and reserves
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
At 1 January 2024 44,579 186,100 22,781 664,892 16,832 935,184
Gains on investments – securities – – – 28,654 – 28,654
Gains on investments – property – – – 1,887 – 1,887
Shares bought back into treasury – – – (8,529) – (8,529)
Management fees charged
to capital
– – – (3,271) – (3,271)
Finance costs charged to capital – – – (2,134) – (2,134)
Other exchange differences – – – (26) – (26)
Tax relief on management fee and
finance costs
– – – 940 – 940
Revenue return on ordinary
activities after taxation
– – – – 25,822 25,822
Dividends paid in the year – – – – (25,834) (25,834)
At 31 December 2024 44,579 186,100 22,781 682,413 16,820 952,693
Financial report
Annual Report and Financial Statements 2024
100
14 Capital and reserves (continued)
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
At 1 January 2023 44,188 178,189 22,781 583,814 1 7, 7 0 2 846,674
Gains on investments – securities – – – 91,351 – 91,351
Losses on investments – property – – – (6,054) – (6,054)
Shares issued 391 7,911 – – – 8,302
Management fees charged
tocapital
– – – (3,094) – (3,094)
Finance costs charged to capital – – – (2,134) – (2,134)
Taxation credit to capital – – – 977 – 977
Other exchange differences – – – 32 – 32
Revenue return on ordinary
activities after taxation
– – – – 23,960 23,960
Dividends paid during the year – – – – (24,830) (24,830)
At 31 December 2023 44,579 186,100 22,781 664,892 16,832 935,184
The capital reserve includes unrealised investment holding gains of £313,084,000 (2023 – gains of £339,191,000) as detailed in
note9.
The revenue reserve and the capital reserve (to the extent it constitutes realised profits) are distributable.
15 Net asset value per ordinary share
The net asset value per ordinary share and the net asset value attributable to the ordinary shareholders at the year end were
asfollows:
2024 2023 2024
£’000
2023
£’000
Ordinary shares of 25p 539.3p 524.5p 952,693 935,184
Net asset value per ordinary share is based on the net assets as shown above and on 176,650,758 (2023 – 178,315,943) ordinary
shares, being the number of ordinary shares in issue at the year end.
16 Transactions with the managers and related parties
The Directors’ fees for the year and interests in the Company’s shares at the end of the year are detailed in the Directors’
remuneration report on pages 75 to 77.
No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter
requiring disclosure under section 412 of the Companies Act 2006.
The management fee due to Baillie Gifford & Co Limited is set out in note 3 on page 94 and the amount accrued at 31December
2024 is set out in note 11 on page 98. Details of the Investment Management Agreement are set out on page 59.
The management fee due to OLIM Property Limited is set out in note 3 on page 94 and the amount accrued at 31 December 2024
is set out in note 11 on page 98. Details of the Property Management Agreement are set out on page 60.
The Scottish American Investment Company P.L.C.
101
17 Analysis of change in net debt
1 January
2024
£’000
Cash flows
£’000
Exchange
movement
£’000
Other
non-cash
changes
£’000
31 December
2024
£’000
Cash and cash equivalents 7,340 (4,496) (26) – 2,818
Loan notes due in more than
one year
(94,728) – – (14) (94,742)
(87,388) (4,496) (26) (14) (91,924)
1 January
2023
£’000
Cash flows
£’000
Exchange
movement
£’000
Other
non-cash
changes
£’000
31 December
2023
£’000
Cash and cash equivalents 4,184 3,124 32 – 7,340
Loan notes due in more than
one year
(94,714) – – (14) (94,728)
(90,530) 3,124 32 (14) (87,388)
18 Financial instruments
As an investment trust, the Company invests in equities and makes other investments so as to secure its investment objective
of increasing capital and growing income in order to deliver real dividend growth. The Company borrows money when the Board
and Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost
of borrowing. In pursuing its investment objective, the Company is exposed to a variety of risks that cause short term variation in
the Company’s net assets and could result in either a reduction in the Company’s net assets or a reduction in the profits available
fordividend.
These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity
risk and credit risk. The Board monitors closely the Company’s exposures to these risks but does so in order to reduce the
likelihood of a permanent reduction in the Company’s net assets or its profits available for dividend rather than to minimise the
shorttermvolatility.
The risk management policies and procedures outlined in this note have not changed substantially from the previous
accountingperiod.
Market risk
The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of
changes in market prices. This market risk comprises three elements – currency risk, interest rate risk and other price risk. The
Board reviews and agrees policies for managing these risks and the Company’s Investment Manager both assesses the exposure
to market risk when making individual investment decisions and monitors the overall level of market risk across the investment
portfolio on an ongoing basis.
Details of the Company’s investment portfolio are shown in note 9.
Currency risk
Certain of the Company’s assets, liabilities and income are denominated in currencies other than sterling (the Company’s
functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling
value of those items.
The Investment Manager monitors the Company’s exposure to foreign currencies and reports to the Board on a regular basis.
The Investment Manager assesses the risk to the Company of the foreign currency exposure by considering the effect on the
Company’s net asset value and income of a movement in the rates of exchange to which the Company’s assets, liabilities,
income and expenses are exposed. However, the country in which a company is listed is not necessarily where it earns its profits.
Themovement in exchange rates on overseas earnings may have a more significant impact upon a company’s valuation than a
simple translation of the currency in which the company is quoted.
Financial report
Annual Report and Financial Statements 2024
102
18 Financial instruments (continued)
Currency risk (continued)
Forward currency contracts are used periodically to limit the Company’s exposure to anticipated future changes in exchange rates
which might otherwise adversely affect the value of the portfolio of investments. Where appropriate, they are used also to achieve
the portfolio characteristics that assist the Company in meeting its investment objectives. The Company had no foreign currency
contracts in place during the years to 31 December 2024 or 2023. Cash amounts received in foreign currencies are converted to
sterling on a regular basis.
Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability
is quoted, is shown below.
At 31 December 2024
Investments
£’000
Cash and cash
equivalents
£’000
Loan notes
£’000
Other debtors
and creditors
£’000
Net
exposure
£’000
US dollar 398,370 84 – 721 399,175
Euro 155,151 – – 704 155,855
Swiss franc 69,667 – – 2,097 71,764
Hong Kong dollar 53,308 – – 230 53,538
Swedish kroner 38,523 – – – 38,523
Taiwan dollar 36,814 – – 96 36,910
Danish kroner 35,029 – – 262 35,291
Chinese Yuan 19,366 – – – 19,366
Australian dollar 16,136 – – – 16,136
Singapore dollar 15,448 – – – 15,448
Brazilian real 13,531 – – 17 13,548
Japanese yen 13,013 – – – 13,013
Other overseas currencies 14,375 – – 70 14,445
Total exposure to currency risk 878,731 84 – 4,197 883,012
Sterling 165,064 2,734 (94,742) (3,375) 69,681
1,043,795 2,818 (94,742) 822 952,693
At 31 December 2023
Investments
£’000
Cash and cash
equivalents
£’000
Loan notes
£’000
Other debtors
and creditors
£’000
Net
exposure
£’000
US dollar 383,746 88 – 523 384,357
Euro 151,336 – – 435 151,771
Swiss franc 78,451 – – 1,615 80,066
Danish kroner 51,325 – – 204 51,529
Australian dollar 41,440 – – – 41,440
Hong Kong dollar 40,643 – – 192 40,835
Taiwan dollar 33,887 – – 110 33,997
Swedish kroner 25,916 – –
–
25,916
Brazilian real 21,231 – – 37 21,268
Singapore dollar 12,253 – – – 12,253
Japanese yen 8,703 – – – 8,703
Chinese yuan 7,321 – – – 7,321
Other overseas currencies 18,075 – – 158 18,233
Total exposure to currency risk 874,327 88 – 3,274 877,689
Sterling 147,483 7,252 (94,728) (2,512) 57,495
1,021,810 7,340 (94,728) 762 935,184
The Scottish American Investment Company P.L.C.
103
Currency risk sensitivity
At 31 December 2024, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total
net assets below, with a corresponding impact on total return on ordinary activities would have decreased by the amounts shown
below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had a similar but
opposite effect on the Financial Statement amounts. The analysis is performed on the same basis for 2023.
2024
£’000
2023
£’000
US dollar 19,959 19,218
Euro 7,793 7,588
Swiss franc 3,588 4,003
Danish kroner 2,677 2,576
Australian dollar 1,926 2,072
Hong Kong dollar 1,846 2,042
Taiwan dollar 1,765 1,700
Swedish kroner 968 1,296
Brazilian real 807 1,063
Singapore dollar 772 613
Japanese yen 677 435
Chinese yuan 651 366
Other overseas currencies 722 912
44,151 43,884
Interest rate risk
Interest rate movements may affect directly:
• the fair value of any investments in fixed interest rate securities;
• the level of income receivable on cash deposits;
• the fair value of the Company’s fixed‑rate borrowings; and
• the interest payable on any variable rate borrowings which the Company may take out.
Interest rate movements may also impact upon the market value of the Company’s investments other than its fixed income
securities. The effect of interest rate movements upon the earnings of a company may have a significant impact upon the
valuation of that company’s equity.
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account
when making investment decisions and when entering borrowing agreements.
The Board reviews on a regular basis the amount of investments in cash and fixed income securities and the income receivable on
cash deposits, floating rate notes and other similar investments.
The Company finances part of its activities through borrowings at approved levels. The amount of such borrowings and the
approved levels are monitored and reviewed regularly by the Board.
Movements in interest rates, to the extent that they affect the fair value of the Company’s fixed rate borrowings, may also affect
the amount by which the Company’s share price is at a discount or a premium to the net asset value.
The interest rate risk profile of the Company’s financial assets and liabilities at 31 December is shown below.
Financial report
Annual Report and Financial Statements 2024
104
18 Financial instruments (continued)
Financial assets
2024
Fair value
£’000
2024
Weighted
average
interest rate
2024
Weighted
average fixed
rate period*
2023
Fair value
£’000
2023
Weighted
average
interest rate
2023
Weighted
average fixed
rate period*
Fixed rate:
Euro denominated bonds 1,462 8.58% 23 years 1,421 8.64% 24 years
US dollar denominated bonds 2,775 7.27% 61 years 19,527 6.95% 16 years
Dominican peso denominated bonds 720 9.18% 1 year 731 9.98% 2 years
Indonesian rupiah denominated
bonds
3,956 7.09% 14 years 5,215 6.69% 13 years
Peruvian sol denominated bonds – – – 2,067 6.50% 9 years
Floating rate:
Brazilian bonds (interest rate
linked to Brazilian CPI)
2,145 11.69% 20 years 5,721 9.38% 21 years
Mexican bonds (interest rate
linked to Mexican CPI)
– – – 3,184 8.46% 17 years
Cash and short term deposits:
Other overseas currencies 84 – n/a 88
– n/a
Sterling 2,734 3.83% n/a 7,252 1.43% n/a
* Based on expected maturity/redemption date.
Financial liabilities
2024
£’000
2023
£’000
The interest rate risk profile of the Company’s financial liabilities at 31 December was:
Fixed rate – sterling 94,742 94,728
The maturity profile of the Company’s debt at 31 December was:
In more than five years 94,742 94,728
Interest rate risk sensitivity
An increase of 100 basis points in the durations, being a measure of each bond’s sensitivity to changes in interest rates, as at
31December 2024 would have decreased total net assets and total return on ordinary activities by £1,029,000 (2023 – decrease
of £3,027,000) and would have decreased the net asset value per share (with borrowings at book value) by 0.6p (2023 – decrease
of 1.7p). A decrease of 100 basis points would have had an equal but opposite effect.
Other price risk
Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the
Company’s net assets.
The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant
information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance,
theinvestment portfolio and the rationale for the current investment positioning to ensure consistency with the Company’s
objectives and investment policies.
Other price risk sensitivity
A full list of the Company’s investments is shown on pages 30 to 34. In addition, various analyses of the portfolio by asset class
and industrial sector are contained in the Strategic report.
98.4% (2023 – 98.1%) of the Company’s net assets are invested in quoted equities. A 5% increase in quoted equity
valuations at 31 December 2024 would have increased total assets and total return on ordinary activities by £46,864,000
(2023–£45,880,000). A decrease of 5% would have had an equal but opposite effect.
The Scottish American Investment Company P.L.C.
105
Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Liquidity risk is mitigated as the majority of the Company’s assets are investments in quoted securities that are readily realisable
The Company’s holdings in direct property, which is not considered to be readily realisable, amount to 10.0% of net assets at
31December 2024 (2023 – 7.1 %). The Company has the power to take out borrowings, which give it access to additional funding
when required.
The Board gives guidance to the Investment Managers as to the maximum amount of the Company’s resources that should be
invested in any one holding and to the maximum aggregate exposure to any one entity (see investment policy on pages 43 and
44). The Board also sets parameters for the degree to which the Company’s net assets are invested in quoted equities.
Maturity profile
The maturity profile of the Company’s financial liabilities at 31 December was:
2024
Within
1 year
£’000
2024
Between
1 and 5 years
£’000
2024
More than
5 years
£’000
2023
Within
1 year
£’000
2023
Between
1 and 5 years
£’000
2023
More than
5 years
£’000
Repayment of loan notes – – 95,000 – – 95,000
Accumulated interest on
loan notes
2,831 11,322 46,304 2,831 11,322 48,685
Other creditors and accruals 2,202 – – 1,561 – –
5,033 11,322 141,304 4,392 11,322 143,685
Credit risk
This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in
the Company suffering a loss. This risk is managed as follows:
• where the Investment Manager makes an investment in a bond or other security with credit risk, that credit risk is assessed and
then compared to the prospective investment return of the security in question;
• the Board regularly receives information from the Investment Manager on the credit ratings of those bonds and other securities
in which the Company has invested;
• the Depositary is liable for the loss of financial instruments held in custody. The Depositary will ensure that any delegate
segregates the assets of the Company. The Depositary has delegated the custody function to The Bank of New York Mellon
(International) Limited. Bankruptcy or insolvency of the custodian may cause the Company’s rights with respect to securities
held by the custodian to be delayed. The Investment Manager monitors the Company’s risk by reviewing the custodian’s internal
control reports and reporting its findings to the Board;
• investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment
Manager. Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company’s custodian bank
ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any
transfer of cash or securities away from the Company is completed;
• transactions involving derivatives, structured notes and other arrangements wherein the creditworthiness of the entity
acting as broker or counterparty to the transaction is likely to be of sustained interest are subject to rigorous assessment
by the Investment Manager of the creditworthiness of that counterparty. The Company’s aggregate exposure to each such
counterparty is monitored regularly by the Board; and
• cash is only held at banks that have been identified by the Managers as reputable and of high credit quality. Credit quality of
our banking provider is publicly available.
Financial report
Annual Report and Financial Statements 2024
106
18 Financial instruments (continued)
Credit risk exposure
The exposure to credit risk at 31 December was:
2024
£’000
2023
£’000
Bonds 11,058 37,866
Cash and short term deposits 2,818 7,340
Debtors and prepayments 4,474 3,549
18,350 48,755
None of the Company’s financial assets are past due or impaired.
Credit quality of bonds
All of the bonds held by the Company as at 31 December 2024 received a credit rating from at least one of the S&P or Moody’s
agencies. All bonds had at least a minimum rating of BB (2023 – all bonds had a minimum rating of B).
Fair value of financial assets and financial liabilities
The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the Balance sheet
with the exception of the long term borrowings which are stated at amortised cost. The fair value of the loan notes is calculated
with reference to debt instruments of comparable maturity and yield.
2024
Par/nominal
£’000
2024
Book
£’000
2024
Fair
£’000
2023
Par/nominal
£’000
2023
Book
£’000
2023
Fair
£’000
2.23% Series C loan notes 2036 15,000 14,941 10,662 15,000 14,936 11,282
3.12% Series A loan notes 2045 40,000 39,902 26,268 40,000 39,897 28,893
3.12% Series B loan notes 2049 40,000 39,900 25,123 40,000 39,895 27,980
95,000 94,743 62,053 95,000 94,728 68,155
19 Property sensitivity
10.0% of the Company’s net assets are invested in direct property.
Property sensitivity analysis
The valuations of investment properties are sensitive to changes in the assumed significant unobservable inputs. A significant
increase/(decrease) in the all risks yield in isolation would result in a significantly (lower)/higher fair value. In order to reflect
market conditions, the increase in yield assumption is 0.15% and the decrease in yield assumption is 0.15%.
The Directors believe yield to be the most appropriate input for sensitivity analysis of the Company’s property portfolio and have
not presented a rental value input for the year to 31 December 2024.
The sensitivity of the valuation to changes in yield inputs per class of investment property are shown below:
Retail and
leisure
£’000
Industrial
£’000
Total
£’000
Estimated movement in fair value of investment properties at31December 2024
arising from:
Increase in yield by 0.15% (1,700) (500) (2,200)
Decrease in yield by 0.15% 1,850 550 2,400
The Scottish American Investment Company P.L.C.
107
Retail and
leisure
£’000
Industrial
£’000
Total
£’000
Estimated movement in fair value of investment properties at31December 2023
arising from:
Increase in yield by 0.25% (2,175) (450) (2,625)
Decrease in yield by 0.1% 900 175 1,075
This represents the best estimate of a reasonable possible shift in yields, having regard to historical volatility of the value
andyield.
20 Leases
The Company has entered into operating leases over its portfolio of investment properties consisting of a mix of retail, leisure and
industrial sites. These leases have terms of between 5 and 30 years. All leases include a clause to enable upward revision of the
rental charge on either an annual or five yearly basis. The basis for rent revisions is agreed at the time the lease is written and can
reflect RPI, CPI, market conditions, or fixed increases. Rental income recognised by the Company during the year is shown in note 2.
Future minimum rentals under operating leases payable for each of the following periods are:
2024
£’000
2023
£’000
Due within 1 year 5,757 4,146
Between 1 and 5 years 23,027 16,371
More than 5 years 57,602 22,177
86,385 42,694
21 Capital management
The capital of the Company is its share capital and reserves as set out in notes 13 and 14 together with its borrowings (seenotes
11 and 12). The objective of the Company is to deliver real dividend growth by increasing capital and growing income. The
Company’s investment policy, including how the Board discusses and monitors gearing levels, is set out on pages 43 and 44.
In pursuit of the Company’s objective, the Board has a responsibility for ensuring the Company’s ability to continue as a going
concern and details of the related risks and how they are managed are set out on page 69 and on pages 45 to 49. TheCompany
has the authority to issue and buy back its shares (see pages 61 to 63) and changes to the share capital during the year are set
out in notes 13 and 14. The Company does not have any externally imposed capital requirements other than the covenants on its
borrowings which are detailed in notes 11 and 12.
22 Subsequent events
On 19 December 2024 the Company agreed the sale of the bowling alley at Taunton for £3,900,000 with the sale completing on
31January 2025.
Shareholder
information
The Scottish American Investment Company P.L.C.
109
Notice of Annual
GeneralMeeting
The Annual General Meeting of the Company
will be held at the offices of Baillie Gifford &
Co, CaltonSquare, 1 Greenside Row, Edinburgh
EH13AN, on Tuesday, 8April 2024 at 11.30am.
Youwill find directions to the venue by scanning
theQRcodeabove.
To accurately reflect the views of shareholders of
theCompany, the Board intends to hold the AGM
voting on a poll, rather than by a show of hands as
has been customary.
The Board encourages all shareholders to submit
proxy voting forms as soon as possible and, in any
event, by no later than 11.30am, on 4 April 2025.
We would encourage shareholders to monitor the
Company’s website at saints-it.com.
Should shareholders have questions for the Board or
the Managers or any queries as to how to vote, they
are welcome as always to submit them by email to
enquiries@bailliegifford.com or call 0800 917 2113.
Baillie Gifford may record your call.
For details of how to vote your shares if held
via a platform please refer to
theaic.co.uk/how-to-vote-your-shares.
John
Lewis
A8 Princes Street
Ge
orge Street
Calton Square
Bus
Station
Omni
Centre
Balmoral
Hotel
L
e
i
t
h
S
t
r
e
e
t
Queen Street
W
a
t
e
r
l
o
o
P
l
a
c
e
C
a
l
t
o
n
H
i
l
l
C
a
l
t
o
n
R
o
a
d
St Andrew Square
Edinburgh
Waverley
Station
Leith
Walk
A7 North Bridge
York Place
G
r
e
e
n
sid
e
R
o
w
Tram
Stop
St Andrew Square
St Andrew Square
Tram
Stop
By Rail:
Edinburgh Waverley – approximately a 5 minute walk away
By Bus:
Lothian Buses local services include:
1, 3, 5, 7, 8, 10, 14, 15, 16, 25, 34
By Tram:
Stops at St Andrew Square and Picardy Place
Access to Waverley Train Station on foot
Shareholder information
Annual Report and Financial Statements 2024
110
Notice is hereby given that the one hundred and
fifty second Annual General Meeting of The Scottish
American Investment Company P.L.C. (‘SAINTS’) will
be held at the Registered Office of the Company,
Calton Square, 1 Greenside Row, Edinburgh,
EH13AN on Thursday, 8 April 2025 at 11.30am.
The Portfolio Managers responsible for SAINTS
willgive a short presentation on the investment
outlook. The following resolutions will be
proposedat the AGM:
To consider, and, if thought fit, to pass the following
resolutions as ordinary resolutions:
01. To receive and adopt the Financial Statements
of the Company for the year to 31 December
2024 with the Reports of the Directors and of
the Independent Auditor thereon.
02. To approve the Directors’ Annual
Report onRemuneration for the year to
31December2024.
03. To declare a final dividend.
04. To re‑elect Lord Macpherson of Earl’s Court
asaDirector.
05. To re‑elect Dame Mariot Leslie as a Director.
06. To re‑elect Karyn Lamont as a Director.
07. To re‑elect Christine Montgomery as a Director.
08. To re‑elect Padmesh Shukla as a Director.
09. To re‑appoint Ernst & Young LLP as Independent
Auditor of the Company to hold office until the
conclusion of the next Annual General Meeting
at which the Financial Statements are laid
before the Company.
10. To authorise the Directors to determine the
remuneration of the Independent Auditor
oftheCompany.
11. That, in substitution for any existing authority,
but without prejudice to the exercise of any such
authority prior to the date hereof, the Directors
of the Company be and they are hereby
generally and unconditionally authorised in
accordance with section 551 of the Companies
Act 2006 (the ‘Act’) to exercise all the powers of
the Company to allot shares in the Company and
to grant rights to subscribe for or to convert any
security into shares in the Company (‘Securities’)
provided that such authority shall be limited to
the allotment of shares and the grant of rights
in respect of shares with an aggregate nominal
value of up to £14,423,125.00 (representing
approximately 33 per cent of the nominal value
of the issued share capital as at 10 February
2025), such authority to expire at the conclusion
of the next Annual General Meeting of the
Company after the passing of this resolution or
on the expiry of 15 months from the passing of
this resolution, whichever is the earlier, unless
previously revoked, varied or extended by the
Company in a general meeting, save that the
Company may at any time prior to the expiry
of this authority make an offer or enter into
an agreement which would or might require
Securities to be allotted or granted after the
expiry of such authority and the Directors
shall be entitled to allot or grant Securities in
pursuance of such an offer or agreement as if
such authority had not expired.
To consider and, if thought fit, to pass resolution 12
as a special resolution:
12. That, subject to the passing of resolution 11
above, and in substitution for any existing power
but without prejudice to the exercise of any such
power prior to the date hereof, the Directors of
the Company be and they are hereby generally
empowered, pursuant to sections 570 and 573
of the Companies Act 2006 (the ‘Act’), to allot
equity securities (within the meaning of section
560(1) of the Act), for cash pursuant to the
authority given by resolution 11 above and by the
sale of treasury shares as if section 561(1) of the
Act did not apply to any such allotment of equity
securities, provided that this power:
a. expires at the conclusion of the next Annual
General Meeting of the Company after the
passing of this resolution or on the expiry
of 15 months from the passing of this
resolution, whichever is the earlier, save that
the Company may, before such expiry, make
an offer or agreement which would or might
require equity securities to be allotted after
such expiry and the Directors may allot equity
securities in pursuance of any such offer or
agreement as if the power conferred hereby
had not expired; and
b. shall be limited to the allotment of equity
securities up to an aggregate nominal value
of £4,370,643.75 being approximately 10% of
the nominal value of the issued share capital
of the Company, as at 10 February 2025.
The Scottish American Investment Company P.L.C.
111
To consider and, if thought fit, to pass resolution13
as an ordinary resolution:
13. That the Directors be authorised, for the
purposes of LR 15.4.11 of the Listing Rules of the
UK Listing Authority, to issue further ordinary
shares (including selling treasury shares) for
cash at a price below the net asset value per
share of those shares (with borrowings valued at
book) without first offering those shares pro rata
to existing shareholders.
To consider and, if thought fit, to pass resolution 14
as a special resolution:
14. That, in substitution for any existing authority
but without prejudice to the exercise of any such
authority prior to the date hereof, the Company
be and is hereby generally and unconditionally
authorised, pursuant to and in accordance
with section 701 of the Companies Act 2006
(the ‘Act’) to make market purchases (within
the meaning of section 693(4) of the Act) of
fully paid ordinary shares of 25 pence each in
the capital of the Company (‘ordinary shares’)
(either for retention as treasury shares or for
cancellation), provided that:
a. the maximum aggregate number of ordinary
shares hereby authorised to be purchased
is 26,206,381, or, if less, the number
representing approximately 14.99% of the
issued ordinary share capital of the Company
as at the date of the passing of this resolution;
b. the minimum price (excluding expenses) which
may be paid for each ordinary share is 25
pence;
c. the maximum price (excluding expenses)
which may be paid for each ordinary share
shall not be more than the higher of:
i. 5 per cent. above the average closing
price on the London Stock Exchange of
an ordinary share over the five business
days immediately preceding the date of
purchase; and
ii. an amount equal to the higher of the last
independent trade of an Ordinary Share and
the highest current independent bid for an
Ordinary Share on the trading venue where
the purchase is carried out; and
d. unless previously varied, revoked or renewed
by the Company in a general meeting, the
authority hereby conferred shall expire at the
conclusion of the Company’s Annual General
Meeting to be held in respect of the financial
year ending 31 December 2025, save that
the Company may, prior to such expiry, enter
into a contract to purchase ordinary shares
under such authority which will or might be
completed or executed wholly or partly after
the expiration of such authority and may make
a purchase of ordinary shares pursuant to any
such contract.
By Order of the Board
Baillie Gifford & Co Limited
Company Secretary
12 February 2025
Notes
01. As a member you are entitled to appoint a proxy
or proxies to exercise all or any of your rights
to attend, speak and vote at the AGM. A proxy
need not be a member of the Company but
must attend the AGM to represent you. You may
appoint more than one proxy provided each
proxy is appointed to exercise rights attached to
different shares. You can only appoint a proxy
using the procedure set out in these notes and
the notes to the proxy form. You may not use
any electronic address provided either in this
notice or any related documents (including
the Financial Statements and proxy form) to
communicate with the Company for any purpose
other than those expressly stated.
02. To be valid any proxy form or other instrument
appointing a proxy, together with any power
of attorney or other authority under which it
is signed or a certified copy thereof, must be
received by post or (during normal business hours
only) by hand at the Registrars of the Company
at Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol, BS99 6ZY or
eproxyappointment.com no later than two days
(excluding non‑working days) before the time of
the meeting or any adjourned meeting.
Shareholder information
Annual Report and Financial Statements 2024
112
03. CREST members who wish to appoint a proxy
or proxies through the CREST electronic
proxyappointment service may do so by
using the procedures described in the CREST
Manualand/or by logging on to the website
euroclear.com/CREST. 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.
04. In order for a proxy appointment or instruction
made using the CREST service 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 instruction,
asdescribed in the CREST Manual. The
message, regardless of whether it constitutes
the appointment of a proxy or is an amendment
to the instruction given to a previously appointed
proxy must, in order to be valid, be transmitted
so as to be received by the Company’s registrar
(ID 3RA50) no later than 2 days (excluding
non‑working days) before the time of the
meeting or any adjournment. 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 Application Host)
from which the Company’s registrar 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.
05. CREST members and, where applicable,
theirCREST sponsors, or voting service
providers should note that Euroclear UK
& Ireland Limited does not make available
special procedures in CREST for any particular
message. 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,ifthe CREST member is a CRESTpersonal
member, or sponsored member, or has
appointed a voting service provider(s), to
procure that his/her 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 service
by any particular time. In this connection,
CREST members and, where applicable, their
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.
06. The Company may treat as invalid a CREST
Proxy Instruction in the circumstances set out
in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
07. The return of a completed proxy form or
otherinstrument of proxy will not prevent
youattending the AGM and voting in person
ifyou wish.
08. Pursuant to Regulation 41 of the Uncertificated
Securities Regulations 2001 and section 311 of
the Companies Act 2006 the Company specifies
that to be entitled to attend and vote at the
AGM (and for the purpose of the determination
by the Company of the votes they may cast),
shareholders must be registered in the Register
of Members of the Company no later than
48hours (excluding non‑working days) prior
to the commencement of the AGM or any
adjourned meeting. Changes to the Register
of Members after the relevant deadline shall
be disregarded in determining the rights of any
person to attend and vote at the meeting.
09. Any person to whom this notice is sent who is
a person nominated under section 146 of the
Companies Act 2006 to enjoy information rights
(a ‘Nominated Person’) may, under an agreement
between him/her and the shareholder by whom
he/she was nominated, have a right to be
appointed (or to have someone else appointed)
as a proxy for the Annual General Meeting.
If a Nominated Person has no such proxy
appointment right or does not wish to exercise
it,he/she may, under any such agreement,
havea right to give instructions to the
shareholder as to the exercise of voting rights.
The Scottish American Investment Company P.L.C.
113
10. The statement of the rights of shareholders in
relation to the appointment of proxies in Notes
1 and 2 above does not apply to Nominated
Persons. The rights described in those Notes
can only be exercised by shareholders of the
Company.
11. The members of the Company may require the
Company to publish, on its website, (without
payment) a statement (which is also passed to
the Auditor) setting out any matter relating to
the audit of the Company’s accounts, including
the Auditor’s report and the conduct of the
audit. The Company will be required to do so
once it has received such requests from either
members representing at least 5% of the total
voting rights of the Company or at least 100
members who have a relevant right to vote and
hold shares in the Company on which there
has been paid up an average sum per member
of at least £100. Such requests must be made
in writing and must state your full name and
address and be sent to the Company at Calton
Square, 1 Greenside Row, Edinburgh, EH1 3AN.
12. Information regarding the Annual General
Meeting, including information required by
section 311A of the Companies Act 2006,
isavailable from the Company’s page of the
Managers’ website at saints-it.com.
13. Members have the right to ask questions at
themeeting in accordance with section 319A
ofthe Companies Act 2006.
14. As at 10 February 2025 (being the last
practicable date prior to the publication of
this notice) the Company’s issued share
capital (excluding treasury shares) consisted
of 174,825,758 ordinary shares, carrying one
vote each. Therefore, the total voting rights
in the Company as at 10 February 2025 were
174,825,758 votes.
15. Any person holding 3% or more of the total
voting rights of the Company who appoints a
person other than the Chairman of the meeting
as his/her proxy will need to ensure that both
he/she and his/her proxy complies with their
respective disclosure obligations under the
UKDisclosure and Transparency Rules.
16. No Director has a contract of service with the
Company.
Shareholder information
Annual Report and Financial Statements 2024
114
How to invest
The Company’s shares are traded on the London
Stock Exchange. They can be bought by placing an
order with a stockbroker or by asking a professional
adviser to do so. If you are interested in investing
directly in SAINTS you can do so online. There are
a number of companies offering real time online
dealing services – find out more by visiting the
investment trust pages at bailliegifford.com.
Sources of further information on
theCompany
The price of shares is quoted daily in the Financial
Times and can also be found on SAINTS’ page of
the Baillie Gifford website at saints-it.com, Trustnet
at trustnet.com and on other financial websites.
Company factsheets are also available on the Baillie
Gifford website and are updated monthly. These are
available from Baillie Gifford on request.
SAINTS share identifiers
ISIN GB0007873697
Sedol 0787369
Ticker SAIN
Legal Entity Identifier 549300NF03XVC5IFB447
AIC
The Company is a member of the Association of
Investment Companies.
Dividend dates
The table below gives the actual and anticipated
quarterly dividend dates.
The ex‑dividend date is the date on which
entitlement to receive the net dividend is
established. The record date is the date on which
shares must be registered following purchase to
receive the dividend direct. Otherwise you will
have to claim it from the agent through whom you
purchased your shares. The DRIP election date is the
final date for electing to participate in the Dividend
Reinvestment Plan (see page 115 for more details)
for that dividend.
Dividend dates for 2025
Final
2024
First
interim*
Second
interim*
Third
interim*
Dividend
announced
13/02/25 15/05/25 24/07/25 06/11/25
Ex‑dividend
date
27/02/25 22/05/25 31/07/25 13/11/25
Record date 28/02/25 23/05/25 01/08/25 14/11/25
DRIP
electiondate
21/03/25
29/05/25 28/08/25 20/11/25
Dividend paid 11/04/25 19/06/25 18/09/25 11/12/25
* Anticipated dates.
Announcement of results and reports
SAINTS’ results for the half year to 30 June will be
announced in July/August and the results for the year
to 31 December will be announced in mid February.
The Interim Report will be posted to shareholders in
August and the Annual Report in February/March.
The 2025 AGM is being held on 8April.
How you are taxed
• Capital As an investment trust, SAINTS pays no
capital gains tax. This means that, while assets
remain invested in SAINTS, they are managed free
of such tax. However, should you decide to sell
your SAINTS’ shares, you may be subject to capital
gains tax.
If you held SAINTS’ shares on or before 31March
1982 the market value of the ordinary shares
(adjusted for present capital) on that date of
33.125p will be required for your capital gains
taxcomputation.
• Income The dividends you receive from your
SAINTS’ shares are taxed as income. Dividends
received should be declared on your Tax
Return. For further information, please visit the
hmrc.gov.uk website.
Shareholders are recommended to consult their
professional adviser as to their tax position.
Further shareholder
information
The Scottish American Investment Company P.L.C.
115
Share register enquiries
Computershare Investor Services PLC maintains
the share register on behalf of the Company. In the
event of queries regarding shares registered in your
own name, please contact the registrars on 0370
707 1282. This helpline also offers an automated
self‑service functionality (available 24 hours a day,
7days a week) which allows you to:
• hear the latest share price;
• confirm your current share holding balance;
• confirm your payment history; and
• order Change of Address, Dividend Bank Mandate
and Stock Transfer forms.
By quoting the reference number on your share
certificate you can check your holding on the
Registrar’s website at investorcentre.co.uk.
They also offer a free, secure, share management
website service which allows you to:
• view your share portfolio and see the latest market
price of your shares;
• calculate the total market price of each
shareholding;
• view price histories and trading graphs;
• register to receive communications from the
Company, including the Annual Report and
Financial Statements, in electronic format;
• update bank mandates and change address
details; and
• use online dealing services; and
• pay dividends directly into your overseas bank
account in your chosen local currency.
To take advantage of this service, please log in at
investorcentre.co.uk and enter your Shareholder
Reference Number and Company Code (this
information can be found on the last dividend
voucher or your share certificate).
Dividend reinvestment plan
Computershare operate a Dividend Reinvestment
Plan which can be used to buy additional shares
instead of receiving your dividend via cheque or into
your bank account. For further information log in to
investorcentre.co.uk and follow the instructions or
telephone 0370 707 1694.
Electronic proxy voting
If you hold stock in your own name you can choose
to vote by returning proxies electronically at
eproxyappointment.com.
If you have any questions about this service please
contact Computershare on 0370 707 1282.
CREST proxy voting
If you are a user of the CREST system (including
a CREST Personal Member), you may appoint
one or more proxies or give an instruction to a
proxy by having an appropriate CREST message
transmitted. For further information please refer to
the CRESTManual.
Voting via an Investment Platform
If you are a shareholder who holds shares via a
platform, you should be able to exercise your right
to vote by contacting the platform provider directly.
You can instruct the platform how to vote your
shares or ask to be appointed as a proxy in respect
of your shareholding should you wish to attend,
speak and vote at the Annual General Meeting.
Further guidance can be obtained from your platform
provider or the Association of Investment Companies
at the aic.co.uk/how-to-vote-your-shares.
SAINTS is an Investment Trust.
Investmenttrusts offer investors
thefollowing:
• participation in a diversified portfolio of shares;
• constant supervision by experienced professional
managers; and
• the Company is free from capital gains tax on
capital profits realised within its portfolio.
Analysis of shareholders at 31 December
2024
Number of
shares held
2024
%
2023
Number of
shares held
2023
%
Institutions 28,930,375 16.4 19,993,528 11.2
Intermediaries 136,333,071 77.2 147,625,890 82.8
Individuals 9,914,924 5.6 10,551,580 5.9
Marketmakers 1,472,388 0.8 144,945 0.1
176,650,758 100.0 178,315,943 100.0
Data protection
The Company is committed to ensuring the
confidentiality and security of any personal data
provided to it. Further details on how personal data
is held and processed on behalf of the Company
can be found in the privacy policy available on the
Company’s website saints-it.com.
Shareholder information
Annual Report and Financial Statements 2024
116
Alternative Investment Fund Managers
Regulations(‘AIFM’)
In accordance with the AIFM Regulations,
information in relation to the Company’s leverage
and the remuneration of the Company’s AIFM,
Baillie Gifford & Co Limited, is required to be
made available to investors. In accordance with
the Regulations, the AIFM remuneration policy
is available at bailliegifford.com or on request
(see contact details on page 120). The numerical
remuneration disclosures in respect of the AIFM’s
relevant reporting periods are also available at
bailliegifford.com.
The Company’s maximum and actual leverage levels
(see glossary of terms and alternative performance
measures on pages 122 to 124) at 31 December
2024 are as follows:
Leverage exposure
Gross
method
Commitment
method
Maximum limit 3.00:1 2.00:1
Actual 1.10:1 1.10:1
Automatic Exchange of Information
In order to fulfil its legal obligations under UK tax
legislation relating to the automatic exchange of
information, The Scottish American Investment
Company P.L.C. is required to collect and report
certain information about certain shareholders.
The legislation requires investment trust companies
to provide personal information to HMRC on certain
investors who purchase shares in investment
trusts. Accordingly, The Scottish American
Investment Company P.L.C. will have to provide
information annually to the local tax authority on
the tax residencies of a number of non‑UK based
certificated shareholders and corporate entities.
Shareholders, excluding those whose shares are
held in CREST, who come on to the share register
will be sent a certification form for the purposes of
collecting this information.
For further information, please see HMRC’s Quick
Guide: Automatic Exchange of Information –
information for account holders gov.uk/guidance/
automatic‑exchange‑of‑information‑account‑holders.
Third party data provider disclaimer
No third party data provider (‘Provider’) makes any
warranty, express or implied, as to the accuracy,
completeness or timeliness of the data contained
herewith nor as to the results to be obtained by
recipients of the data.
No Provider shall in any way be liable to any
recipient of the data for any inaccuracies, errors
or omissions in the index data included in this
document, regardless of cause, or for any damages
(whether direct or indirect) resulting therefrom. No
Provider has any obligation to update, modify or
amend the data or to otherwise notify a recipient
thereof in the event that any matter stated herein
changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have
any liability whatsoever to you, whether in contract
(including under an indemnity), in tort (including
negligence), under a warranty, under statute or
otherwise, in respect of any loss or damage suffered
by you as a result of or in connection with any
opinions, recommendations, forecasts, judgements,
or any other conclusions, or any course of action
determined, by you or any third party, whether or
not based on the content, information or materials
contained herein.
FTSE Index data
Source: London Stock Exchange Group plc and its
group undertakings (collectively, the ‘LSE Group’).
©LSE Group 2025. FTSE Russell is a trading name
of certain of the LSE Group companies. ‘FTSE®’
‘Russell®’, ‘FTSE Russell®’, is/are a trade mark(s)
of the relevant LSE Group companies and is/
are used by any other LSE Group company under
license. Allrights in the FTSE Russell indexes or
data vest in the relevant LSE Group company which
owns the index or the data. Neither LSE Group
nor its licensors accept any liability for any errors
or omissions in the indexes or data and no party
may rely on any indexes or data contained in this
communication. No further distribution of data from
the LSE Group is permitted without the relevant LSE
Group company’s express written consent. The LSE
Group does not promote, sponsor or endorse the
content of this communication.
The Scottish American Investment Company P.L.C.
117
The EU Sustainable Finance Disclosure Regulation
(‘SFDR’) does not have a direct impact in the UK
due to Brexit, however, it applies to third‑country
products marketed in the EU. As SAINTS is marketed
in the EU by the AIFM, Baillie Gifford & Co Limited,
via the National Private Placement Regime (‘NPPR’)
the following disclosures have been provided to
comply with the high‑level requirements of SFDR.
The AIFM has adopted Baillie Gifford & Co’s ESG
Principles and Guidelines as its policy on integration
of sustainability risks in investment decisions.
Baillie Gifford & Co believes that a company
cannot be financially sustainable in the long run if
its approach to business is fundamentally out of
line with changing societal expectations. It defines
‘sustainability’ as a deliberately broad concept which
encapsulates a company’s purpose, values, business
model, culture, and operating practices.
Baillie Gifford & Co’s approach to investment is
based on identifying and holding high quality growth
businesses that enjoy sustainable competitive
advantages in their marketplace. To do this it
looks beyond current financial performance,
undertaking proprietary research to build up an
in‑depth knowledge of an individual company
and a view on its long‑term prospects. This
includes the consideration of sustainability factors
(environmental, social and/or governance matters)
which it believes will positively or negatively
influence the financial returns of an investment.
The likely impact on the return of the portfolio
from a potential or actual material decline in the
value of investment due to the occurrence of
Sustainable Finance Disclosure
Regulation (‘SFDR’)
an environmental, social or governance event
or condition will vary and will depend on several
factors including but not limited to the type, extent,
complexity and duration of an event or condition,
prevailing market conditions and existence of any
mitigating factors.
Whilst consideration is given to sustainability
matters, there are no restrictions on the investment
universe of the Company, unless otherwise stated
within in its Investment Objective & Policy. Baillie
Gifford & Co can invest in any companies it believes
could create beneficial long‑term returns for
investors. However, this might result in investments
being made in companies that ultimately cause a
negative outcome for the environment or society.
The underlying investments do not take into account
the EU criteria for environmentally sustainable
economic activities established under the EU
Taxonomy Regulation.
More detail on the Investment Managers’ approach
to sustainability can be found in the ESG Principles
and Guidelines document, available publicly on the
Baillie Gifford website bailliegifford.com and by
scanning the QR code below.
Shareholder information
Annual Report and Financial Statements 2024
118
Elevated road tunnel, Spain. © Artur Debat/Getty Images.
The Scottish American Investment Company P.L.C.
119
Communicating
withshareholders
Trust magazine A SAINTS web page at saints-it.com
Promoting SAINTS
Baillie Gifford carries out extensive marketing
activity to promote SAINTS to institutional,
intermediary and direct investors.
Trust magazine
Trust is the Baillie Gifford investment trust magazine
which is published twice a year. It provides an insight
to our investment approach by including interviews
with our fund managers, as well as containing
investment trust news, investment features and
articles about the trusts managed by Baillie Gifford,
including SAINTS. Trust plays an important role in
helping to explain our products so that readers can
really understand them. For a copy of Trust, please
contact the Baillie Gifford Client Relations Team
(seecontact details on page 120).
You can subscribe to Trust magazine or view a digital
copy at bailliegifford.com/trust.
SAINTS on the Web
Up‑to‑date information about SAINTS, including a
monthly commentary, recent portfolio information
and performance figures can be found on SAINTS’
page of the Managers’ website at saints-it.com.
You can also find a brief history of SAINTS,
anexplanation of the effects of gearing and a
flexible performance reporting tool.
If you are interested in investing directly in SAINTS,
you can do so online. There are a number of
companies offering real time online dealing services
– find out more on the Platforms section of the
Managers’ website: bailliegifford.com.
Suggestions and questions
Any suggestions on how communications with
shareholders can be improved are welcomed, so
please contact the Baillie Gifford Client Relations
Team and give them your suggestions. They will also
be very happy to answer questions that you may
have about SAINTS.
Shareholder information
Annual Report and Financial Statements 2024
120
Client relations team contact details
You can contact the Baillie Gifford Client Relations
Team by telephone, email or post:
Telephone: 0800 917 2113
Your call may be recorded for training or monitoring
purposes.
Email: enquiries@bailliegifford.com
Website: bailliegifford.com
Address:
Baillie Gifford Client Relations Team
Calton Square
1 Greenside Row
Edinburgh EH1 3AN
Please note that Baillie Gifford is not permitted
to give financial advice. If you would like advice,
please ask an authorised intermediary.
SAINTS specific queries
Please use the following contact details:
Email: saints@bailliegifford.com
Website: saints-it.com
The Scottish American Investment Company P.L.C.
121
Insights
SAINTS spotlight: turbulence
beneath the surface
Exploring SAINTS’ strategic
moves in the face of economic
shifts and the pursuit of
compounding growth.
SAINTS: 50 years of
dividend growth
How SAINTS has delivered
consistent dividend growth
for50years.
Shareholder information
Annual Report and Financial Statements 2024
122
An alternative performance measure is a financial measure of historical or future financial performance,
financial position, or cash flows, other than a financial measure defined or specified in the applicable
financial reporting framework.
Total assets
This is the Company’s definition of Adjusted Total Assets, being the total value of all assets held less all
liabilities (other than liabilities in the form of borrowings).
Net Asset Value (‘NAV’)
Also described as shareholders’ funds, net asset value is the value of total assets less liabilities (including
borrowings). Net asset value can be calculated on the basis of borrowings stated at book value and fair
value. An explanation of each basis is provided below. The net asset value per share is calculated by dividing
this amount by the number of ordinary shares in issue excluding any shares held in treasury.
Net Asset Value (borrowings at book value)
Borrowings are valued at adjusted net issue proceeds. Book value approximates amortised cost.
Net Asset Value (borrowings at fair value) (APM)
Borrowings are valued at an estimate of their market worth. This indicates the cost to the Company
of repaying its borrowings under current market conditions. It is a widely reported measure across the
investment trust industry.
31 December 2024 31 December 2023
Shareholders’ funds (borrowings at book value) £952,693,000 £935,184,000
Add: book value of borrowings £94,742,000 £94,728,000
Less: fair value of borrowings (£62,053,000) (£68,155,000)
Shareholders’ funds (borrowings at fair value) £985,382,000 £961,757,000
Shares in issue at year end 176,650,758 178,315,943
Net asset value per ordinary share (borrowings at fair value) 5 5 7. 8p 539.4p
Glossary of terms and alternative
performance measures (‘APM’)
The Scottish American Investment Company P.L.C.
123
Premium/(discount) (APM)
As stockmarkets and share prices vary, an investment trust’s share price is rarely the same as its NAV. When
the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount
is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage
of the NAV per share. If the share price is higher than the NAV per share, this situation is called a premium.
2024
NAV (book)
2024
NAV (fair)
2023
NAV (book)
2023
NAV (fair)
Closing NAV per share 539.3p 5 5 7. 8p
524.5p
539.4p
Closing share price 498.5p 498.5p 535.0p 535.0p
Premium/(discount) (7.6%) (10.6%) 2.0% (0.8%)
Ongoing charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average
net asset value (with borrowings at fair value). The ongoing charges have been calculated on the basis
prescribed by the Association of Investment Companies.
A reconciliation from the expenses detailed in the Income statement on page 88 is provided below.
31 December 2024 31 December 2023
Investment management fee £4,362,000 £4,125,000
Other administrative expenses £1,349,000 £1,268,000
Total expenses (a) £5,711,000 £5,393,000
Average daily cum‑income net asset value
(with borrowings at fair value)
(b) £991,710,000 £928,722,000
Ongoing charges (a) ÷ (b) (expressed as a percentage) 0.58% 0.58%
Total return (APM)
The total return is the return to shareholders after reinvesting the net dividend on the date that the share
price goes ex‑dividend.
2024
NAV
(book)
2024
NAV
(fair)
2024
Share
price
2023
NAV
(book)
2023
NAV
(fair)
2023
Share
price
Opening NAV per share/share price (a) 524.5p 539.4p 535.0p 479.0p 495.5p 508.0p
Closing NAV per share/share price (b) 539.3p 5 5 7. 8p 498.5p 524.5p 539.4p 535.0p
Dividend adjustment factor
*
(c) 1.026922 1.026106 1.028650 1.027628 1.026683 1.027273
Adjusted closing NAV per share/
share price
(d) = (b) x (c) 553.8p 572.4p 512.8p 539.0p 553.8p 549.6p
Total return (d) ÷ (a) -1 5.6% 6.1% (4.2%) 12.5% 11.8% 8.2%
*
The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the
Company at the cum income NAV/share price at the ex‑dividend date.
Active share (APM)
Active share, a measure of how actively a portfolio is managed, is the percentage of the listed equity
portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the
portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index
and an active share of zero indicates a portfolio that tracks the index.
Shareholder information
Annual Report and Financial Statements 2024
124
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money
to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders’ assets is
called ‘gearing’. If the Company’s assets grow, the shareholders’ assets grow proportionately more because the
debt remains the same. But if the value of the Company’s assets falls, the situation is reversed. Gearing can
therefore enhance performance in rising markets but can adversely impact performance in falling markets.
Potential gearing is the Company’s borrowings expressed as a percentage of shareholders’ funds.
31 December 2024 31 December 2023
Borrowings at book value £94,742,000 £94,728,000
Shareholders’ funds £952,693,000 £935,184,000
Potential gearing 10% 10%
Equity gearing is the Company’s borrowings adjusted for cash, bonds and property expressed as a
percentage of shareholders’ funds.
31 December 2024 31 December 2023
Borrowings at book value £94,742,000 £94,728,000
Less: cash and cash equivalents (£2,818,000) (£7,340,000)
Less: bond investments (£11,058,000) (£37,866,000)
Less: direct property investments (£95,450,000) (£66,350,000)
Adjusted borrowings (£14,584,000) (£16,828,000)
Shareholders’ funds (£952,693,000) £935,184,000
Equity gearing (2%) (2%)
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers (AIFM) Regulations, leverage is any method
which increases the Company’s exposure, including the borrowing of cash and the use of derivatives. It is
expressed as a ratio between the Company’s exposure and its net asset value and can be calculated on a
gross and a commitment method. Under the gross method, exposure represents the sum of the Company’s
positions after the deduction of sterling cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash
balances and after certain hedging and netting positions are offset against each other.
Collar and cap
A clause in a lease agreement which sets out the minimum (collar) and maximum (cap) limits by which rent
can be increased during rent review negotiations.
Unexpired lease term
The length of time remaining on a rental lease agreement. Rental lease agreements may contain a break
clause allowing one or both parties to agree to end the lease agreement at an earlier date.
Energy performance certificate (EPC)
An energy performance certificate rates a property’s energy efficiency from A (most efficient) to G (least
efficient). This certificate indicates potential energy costs, environmental impacts and is vital in promoting
energy efficiency.
The Scottish American Investment Company P.L.C.
125
Company details
saints-it.com
Company Registration No. SC000489
ISIN: GB0007873697
Sedol: 0787369
Ticker: SAIN
Legal Entity Identifier:
549300NF03XVC5IFB447
Company
information
Directors
Chairman:
Lord Macpherson of Earl’s Court, GCB
Karyn Lamont, CA
Dame Mariot Leslie
Christine Montgomery
Padmesh Shukla
Registrar
Computershare Investor
Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
T: +44 (0)370 707 1282
Alternative Investment
FundManagers and
Company Secretaries
Baillie Gifford & Co Limited
Calton Square
1 Greenside Row
Edinburgh EH1 3AN
T: +44 (0)131 275 2000
bailliegifford.com
Depositary
The Bank of New York Mellon
(International) Limited
160 Queen Victoria Street
London EC4V 4LA
Company Broker
Winterflood Investment Trusts
The Atrium Building
Cannon Bridge
25 Dowgate Hill
London EC4R 2GA
Independent Auditor
Ernst & Young LLP
Chartered Accountants
and Statutory Auditors
Atria One
144 Morrison Street
Edinburgh EH3 8EX
Further information
Client Relations Team
Baillie Gifford & Co
Calton Square
1 Greenside Row
Edinburgh EH1 3AN
T: +44 (0)800 917 2113
enquiries@bailliegifford.com
Calton Square, 1 Greenside Row, Edinburgh EH1 3AN
Telephone +44 (0)131 275 2000
saints-it.com