Annual Financial Report

Lowland Investment Co PLC

05 December 2023

 

LOWLAND INVESTMENT COMPANY PLC

ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2023

This announcement contains regulated information.

INVESTMENT OBJECTIVE

The Company aims to give shareholders a higher than average return with growth of both capital and income over the medium to long-term, by investing in a broad spread of predominantly UK Companies. The Company measures its performance against the FTSE All-Share Index Total Return.

INVESTMENT POLICY

Asset Allocation

The Company invests in a combination of large, medium and smaller companies listed in the UK.  We are not constrained by the weightings of any index; we limit risk by running a diversified portfolio, which is constructed on a bottom-up, stock-picking basis.  In normal circumstances up to half the portfolio is invested in FTSE 100 companies; the remainder is divided between small and medium-sized companies.  The Manager may also invest a maximum of 15% in other listed trusts.

Dividend

The Company aims to pay a progressive dividend, with each quarterly dividend equal to or greater than its previous equivalent.

Gearing

The Board believes that debt in a closed-end fund is a valuable source of long-term outperformance, and therefore the Company will usually be geared.  At the point of drawing down debt, gearing will never exceed 29.99% of the portfolio valuation but generally will be around half that level. Borrowing will be a mixture of short and long-dated debt, depending on relative attractiveness of rates.

Key Data as at 30 September 2023

·      Net Asset Value ('NAV') Total Return^1,8 of 17.2%

·      Benchmark Total Return² of 13.8%

·      Dividend growth of 2.5%

·      Dividend for the Year³ of 6.25p

	Year ended 30 September 2023	Year ended 30 September 2022
NAV per share at year end (debt at par)4	129.3p	115.9p
NAV per share at year end (debt at fair value)4,8	131.7p	118.1p
Share price at year end5	113.0p	104.5p
Market capitalisation	£305m	£282m
Dividend per share	6.25p3	6.10p
Ongoing charge8	0.6%	0.6%
Dividend yield6,8	5.5%	5.8%
Gearing at year end8	12.3%	12.5%
Discount at year end7,8	14.2%	11.5%
AIC UK Equity Income Sector Average Discount	5.5%	3.9%

1	NAV per share total return (including dividends reinvested) with debt at fair value
2	FTSE All-Share Index (including dividends reinvested)
3	Includes the final dividend of 1.600p per ordinary share for the year ended 30 September 2023 that will be put to shareholders for approval at the Annual General Meeting on Wednesday 24 January 2023
4	NAV per share for both figures is before deduction of the third interim dividend paid in October of each year
5	Mid-market closing price
6	Based on dividends paid and payable in respect of the financial year and the share price at the year end
7	Calculated using year end fair value NAVs including current year revenue
8	Alternative Performance Measure ('APMs')

Sources: Morningstar Direct, Janus Henderson, Factset

Historical Performance (%)

	1 year	3 years	5 years	10 years	25 years
Net asset value	17.2	50.8	2.5	47.6	706.1
Share price	13.9	46.0	-3.0	29.5	826.4
FTSE All-Share	13.8	39.8	19.7	71.8	309.1

Year ended 30 September	Dividend per ordinary share  (pence)1	Total return/(loss) per ordinary share (pence)1	Net revenue return per ordinary share (pence)1	Total net assets (£'000)	Net asset value per ordinary share (pence)1	Share price per ordinary share (pence)1
2013	3.400	33.01	3.67	347,202	130.7	132.5
2014	3.700	7.33	3.94	361,856	134.6	135.5
2015	4.100	1.18	4.64	354,563	131.8	128.7
2016	4.500	15.64	4.77	386,910	143.2	133.7
2017	4.900	24.32	4.91	439,896	162.8	150.4
2018	5.400	4.74	5.86	438,934	162.5	151.5
2019	5.950	(13.87)	6.80	385,904	142.8	128.0
2020	6.000	(33.69)	3.38	278,653	103.1	91.4
2021	6.025	48.79	4.27	394,285	145.9	131.5
2022	6.100	(24.00)	6.10	313,036	115.9	104.5
2023	6.250 2	19.54	6.71	349,345	129.3	113.0

1	Comparative numbers for 2013 to 2021 have been restated to reflect the ten for one share split which took place on 7 February 2022
2	Includes the final dividend of 1.60p per ordinary share for the year ended 30 September 2023 that will be put to shareholders for approval at the Annual General Meeting on Wednesday 24 January 2024

CHAIRMAN'S STATEMENT

Performance

I am pleased to report that your Company made sound progress during its sixtieth year in meeting its twin objectives of growth in capital and income. Net Asset Value ('NAV') increased by 17.2%, outstripping the FTSE All-Share benchmark return of 13.8%. In addition, Earnings per Share ('EPS') grew by 10% to 6.7p, fully covering the recommended total dividend of 6.25p. It is a source of some satisfaction that the Company has maintained or increased its annual dividend each year since its first dividend in 1963.

I will cover capital growth first. In previous years we have referred to the Company's weighting in small and medium-sized companies, much greater than that of the Company's benchmark, as having held back capital growth. The long-term trend for such companies to outperform larger companies was interrupted by Brexit and then COVID. We are confident that the trend will reverse, but it has not happened yet. In the year ended 30 September 2023, the FTSE 100 returned 14.7%, a better return than the indices for medium and smaller companies, and most especially AIM, which registered a negative 8.3%. Lowland's portfolio was invested 47.2% in the FTSE 100, against the benchmark's 84.4%. However, the portion of Lowland's portfolio invested in each segment of the market outperformed each of the relevant indices, as indicated below.  This enabled Lowland to beat the benchmark, an achievement given its bias to the smaller end of the market.

Total Returns (%)

	Lowland	Index
FTSE 100	19.7	14.7
FTSE 250	16.5	10.0
FTSE SmallCap	17.6	7.5
FTSE AIM All-Share	4.1	-8.3
Overall	17.2	13.8*

*Benchmark - FTSE All-Share

I mentioned last year that the Board also monitors performance against a composite index, being 50% FTSE All-Share/50% Numis Smaller Companies ex Investment Trusts, which is more representative of the universe in which we invest. Lowland substantially outperformed this composite index which returned 8.4%. We aim to beat the FTSE All-Share, but use the composite index as a check - if we are not beating the All-Share, is it because we are consciously biased to out-of-fashion segments of the market, or are we getting it wrong. In this case the health check is, thankfully, doubly reassuring.

The Fund Managers go into more detail as to the weighting of the portfolio, and indeed the reasons why it performed very satisfactorily. It is worth highlighting that a significant factor underlying performance has been the number of take-overs at values which, while at a premium to pre-bid prices, are not necessarily reflective of the true value of the company. I refer further to this in the outlook section below.

Turning to the revenue account, your Board is highly cognisant of the importance to shareholders of a regular, dependable and growing level of dividend. Despite moments of concern resulting from the hiatus in normal economic activity which accompanied COVID, the Board stuck by its progressive quarterly dividend policy. It did this mindful of the availability of reserves, and with confidence that the Company's income would recover. Happily, that confidence has been rewarded and the EPS increased by 10% in the year.

Dividends

Having maintained the first and second dividends at 1.525p, your Board had sufficient confidence to increase the third and now recommend an increase in the final dividend, to 1.60p. These last two dividends represent an increase of 4.9%, resulting in a 2.5% increase in the year's total dividend.

Total dividends for the year have risen each year since 2009 and have been at least maintained since the Company's launch in 1963. In 2012, prompted by feedback from shareholders at an AGM, the Company adopted a quarterly dividend policy.

It is fair to say that when we began paying quarterly dividends, we did not necessarily envisage that each quarterly dividend would be equal to or greater than its previous equivalent. We have nurtured this practice since 2012 and feel that it has been suitably tested under fire, to be promoted from an aspiration to a firm Board policy, which we will strive hard to follow. Research tells us that a regular and growing dividend is especially valued by private investors; we believe we will be able to meet their requirement.

It flows from the above that shareholders should expect to receive quarterly dividends of no less than 1.60p in respect of the 2024 financial year.

Gearing

The Company has a medium-term borrowing facility of £40m, and £30m of long-term debt at a fixed rate of 3.15%, maturing in 2037. We see the ability to gear the portfolio as a key benefit of an investment trust. We do not tend to move gearing levels dramatically. Gearing amounted to 12.3% at the year-end compared with 12.5% a year earlier.

Ongoing charges

Ongoing charges remained around 0.6%. We reviewed the fee arrangements with Janus Henderson during the year and believe them to be competitive.

Discount

During the financial year the discount varied from 5.2% to 14.9%, ending the year at 14.2%. The Board has a clear policy with regard to discount, which is set out in the annual report.

The Board

As previously indicated, an external recruitment process is underway for the appointment of a new Director. We expect to announce the appointment shortly. The process involved a diverse range of individuals, and the successful candidate will be the one we believe will contribute most to the success of the Company.

I intend to step down at the 2025 AGM. My replacement as Chairman is expected to be one of the serving Directors, and will be announced before then.

The changes set out here are part of the orderly planned process of Board renewal, and are consistent with the policy on tenure and diversity set out in the annual report.

Contact

I and the Board are always pleased to hear from shareholders. Please contact me with comments or questions via [e-mail]

AGM

The AGM will be held at the Janus Henderson office on 24 January 2024.  Full details of the business to be conducted at the meeting are set out in the Notice accompanying this report.  Our Fund Managers, James Henderson and Laura Foll will be making a presentation to shareholders.  The Board and Fund Managers always welcome the opportunity to hear from shareholders, and we encourage as many as possible to attend.

Outlook

Chairmen, and other commentators, are apt to open by remarking on 'uncertain times'. No-one would dispute that we are in such times now. In reality, however, we always are, and what varies is the depth of uncertainty.

I think it more constructive to comment on some more measurable considerations, and one in particular, which is value. The Fund Managers refer to the miserly valuation of the UK market in general, the discount then applied to the smaller end of the market, and finally to the extraordinarily low valuation of our own portfolio, chosen as it is to grow value and income. This amounts to 8.5 times historic earnings, which reduces to 7.3 times on a 'look-through' basis after taking the Lowland share price discount into account. The attractiveness of valuations is underlined by two other considerations; firstly the level of take-over activity, and secondly the dividend yield, which amounts to 5.5% on your Company's shares.

There can have been few times when valuation considerations have been more persuasive.

Robert Robertson

Chairman

December 2023

FUND MANAGER'S REPORT

Overview

It is pleasing to report on a year of positive absolute NAV growth, modest outperformance versus the Company's FTSE All-Share benchmark and further income recovery. On a longer term basis the Company's NAV performance remains volatile. The three year NAV return captures the post pandemic economic recovery, while the five year returns remain disappointing, reflecting poor performance in the years following the Brexit referendum.

	1 year (%)	3 years (%)	5 years (%)	10 years (%)
Lowland NAV	17.2	50.8	2.5	47.6
Lowland Share Price	13.9	46.0	-3.0	29.5
FTSE All Share	13.8	40.0	19.7	71.8

It is always worth remembering that our portfolio is invested in a blend of small, medium and large UK companies, which results in greater exposure to the UK economy than the highly international FTSE All-Share benchmark. This is for the simple reason that smaller businesses tend to focus first on their domestic market before expanding overseas. This means that when the UK economy performs better than expected (as the ONS data now shows that it did in the post-pandemic recovery), Lowland has a tendency to outperform. Performance in the 2023 financial year reflects this. In the autumn of 2022 the consensus among economists was that 2023 would be a recession year, whereas the consensus is now for modest real GDP growth of 0.4%. 

While it is gratifying to be reporting on a period of better NAV growth and a modestly better than expected UK economy, arguably the Company's performance this year has come about due to a continuation of a concerning trend in the UK equity market, namely de-equitisation.

We have long written about the valuation discount of UK equity markets relative to developed overseas markets. This valuation gap has shown no signs of narrowing http://www.rns-pdf.londonstockexchange.com/rns/6268V_1-2023-12-4.pdf

.

There are a variety of ways this valuation discount could theoretically close:

·	Positive UK net fund flows, raising valuation levels (a 'rising tide lifts all boats' scenario). This has (so far) not been the case, with UK fund flows disappointingly showing no signs of improving http://www.rns-pdf.londonstockexchange.com/rns/6268V_2-2023-12-4.pdf
·	Falling overseas valuations. This has also not been the case with the US cyclically adjusted P/E, for example, reaching 31.7x.
·	Takeover activity, whether from private equity or peers. This is what we have seen this year, where we have had six companies bid for (namely DWF, Devro, Numis, K3 Capital, Finsbury Food and Appreciate Group).

Our frustration is that while we have seen a short-term performance benefit from these takeovers, many are at valuation levels that do not reflect the long-term prospects of the business. Therefore a short-term boost to performance means these companies are lost to the UK stock market, with very little replacing them via Initial Public Offerings ('IPOs'). In order to counteract this trend, smaller company boards (often feeling vulnerable to acquisition) are announcing increasing share buyback activity (please see chart below). While this is boosting valuation levels across certain companies, and is arguably attractive from a capital allocation perspective given where UK valuation levels are, it further contributes to the de-equitisation of the market. We are hopeful that in writing next year's report we will be able to demonstrate better underlying health of the UK equity market, whether through more buoyant economic conditions and/or from government initiatives focused on the area (such as the Mansion House Compact).

2.5% of the FTSE 350 market capitalisation disappeared in buybacks in 2022 alone, a trend which has accelerated in 2023.

http://www.rns-pdf.londonstockexchange.com/rns/6268V_3-2023-12-4.pdf

Performance attribution

This financial year saw a repeat of trends in the previous year, in that small and medium sized UK companies underperformed larger ones (see the fifth column, 'index total return' in the table below). It is therefore pleasing to note that Lowland outperformed its FTSE All-Share benchmark despite this 'company size' headwind to performance. If we break down the portfolio returns by index, it can be seen that in each size allocation, the Company outperformed (comparing the third and fifth columns in the table). We go into more details of the stock-specific drivers of this later in this section.

	Lowland weighting (%)	Lowland total return (%)	FTSE All-Share weighting (%)	Index total return (%)
FTSE 100	47.2	19.7	84.4	14.7
FTSE 250	18.3	16.5	13.4	10.0
FTSE Small Cap	12.9	17.6	2.3	7.5
FTSE AIM All-Share	13.6	4.1	-	-8.3
Overall	92.0	17.2	100.0	13.8

Weights for Lowland and the FTSE All-Share are shown as at financial year end. Note the weights for Lowland do not add up to 100, as there is a small % of the portfolio held overseas and held in the FTSE Fledgling Index. Lowland portfolio returns are calculated excluding cash.

Illustrated in a different way, while there was a 'size allocation' headwind to performance this year, this was more than offset by stock selection (and gearing), resulting in NAV growth ahead of the benchmark: http://www.rns-pdf.londonstockexchange.com/rns/6268V_4-2023-12-4.pdf

While in the previous financial year there was a clearly identifiable reason for the FTSE 100 outperformance, which was driven by the war in Ukraine (causing fossil fuel prices to increase materially, boosting large index positions such as Shell and BP), this year the reasons for the FTSE 100 outperformance were less clear cut.

Smaller companies are, on average, both more domestic in their exposure and also more cyclical. There was therefore an element this year of smaller company shares de-rating in the face of perceived earnings risk, as interest rates rose and consumers saw real wages under pressure. There were clear pockets of weakness in the economy and this can be seen in the stock detractors table (the second table below). Advertising revenue, for example, has been under pressure as corporates looked to curtail spending - this caused earnings pressure in companies such as free-to-air broadcaster STV. There were also, however, pockets of strength - infrastructure spending, for example, particularly in the US, has continued to see good growth and this benefitted industrial conglomerate Hill & Smith (see the contributors table below). As always, a top down view of the economy will only take you so far and it is important to remember we are investing in individual companies with the ability to steer their own ship, not proxies for the broader economy.

Turning to stock specifics, the top ten contributors to relative return during the year were:

Company Name	Contribution to relative return (%)	Share price total return (%)
1.   Diageo (not held)	+1.3	-18.2
2.   British American Tobacco (not held)	+0.9	-13.4
3.   Marks & Spencer	+0.8	+139.8
4.   K3 Capital*	+0.6	+51.5
5.   International Personal Finance	+0.6	+67.0
6.   Hill & Smith	+0.5	+94.0
7.   FBD Holdings	+0.5	+41.9
8.   Vertu Motors	+0.5	+82.9
9.   Numis	+0.4	+56.0
10.  Devro*	+0.4	+100.1

*Share price performance up until the point of acquisition

Source: Share price total return sourced from Bloomberg. Attribution sourced from Factset.

Looking in more detail at the drivers of these best performers, they tend to fall into distinct categories:

-	Takeovers. Three of the top ten best performers were taken over (K3 Capital, Numis and Devro). Two of these were taken over by overseas peers, while K3 Capital was purchased by private equity.
-	Shareholder returns via special dividends and buybacks. Vertu Motors, for example, was consistently buying back shares during the year while FBD Holdings paid a large special dividend.
-	Earnings recovery, from a low starting valuation. Marks & Spencer and International Personal Finance have both positively surprised on earnings in the face of high levels of scepticism and low starting valuations.
-	Structurally growing markets. Hill & Smith earns the majority of its profits in the US, where it is benefitting from growing infrastructure spend.

The largest ten detractors from relative return were:

Company Name	Contribution to relative return (%)	Share price total return (%)
1.   Vanquis Banking	-0.9	-17.6
2.   HSBC (underweight)	-0.8	+46.0
3.   Serica Energy	-0.7	-27.4
4.   Somero Enterprises	-0.5	-25.2
5.   STV	-0.4	-29.8
6.   3i (not held)	-0.4	+96.0
7.   CRH (not held)	-0.4	+59.4
8.   Direct Line	-0.4	-7.2
9.   Ilika	-0.4	-42.2
10. Strix Group	-0.4	-54.7

Source: Share price total return sourced from Bloomberg. Attribution sourced from Factset.

Looking in more detail at the detractors they broadly fall into two categories (focusing on companies where we are overweight relative to the benchmark):

-	Challenging end markets. Serica Energy, for example, saw falling fossil fuel prices (as well as a windfall tax in the North Sea), Somero Enterprises saw a challenging US construction market and falling advertising revenue impacted STV. In these cases we think long term fundamentals are sound and valuation levels are attractive, but they have been set back by external factors
-	Poor execution. These holdings have had operational issues which cannot be attributed to end market weakness. For example Vanquis Banking disappointed on cost overruns (the CEO has since left and we have been engaging with his replacement) and Direct Line reported weak underwriting results on mispricing their policies (the CEO has been replaced, and we have reduced the holding).

Portfolio valuation

While the first chart in this Managers' Report demonstrates the degree of UK equity valuation discount relative to overseas peers, what is less widely discussed is that there is a subset of UK equities that trades on an even larger valuation discount. Domestic earners within the UK have meaningfully underperformed in the years following the Brexit referendum. Lowland, because of its investment in a blend of small, medium and large companies, is structurally more exposed to 'domestic UK'. If, for example, we look at underlying portfolio sales, Lowland's portfolio revenues are 49% in the UK compared to only 23% in the FTSE All-Share benchmark (both figures as at end September '23). Lowland therefore captures more of these lowly valued domestic businesses. This can be seen at the portfolio level, where the portfolio trades at a discount to both the benchmark, and also relative to its own 10 year average:

	12m historic P/E as at 30 September 2023	10 year average 12m historic P/E as at 30 September 2023
Lowland Portfolio	8.5x	12.5x

Source: Factset, weighted harmonic average.

Note that at the financial year end, the Company also traded at a discount to its net asset value of 14.2%. Therefore taking this additional layer of discount into account, the current 'look-through' valuation on the portfolio is 7.3x 12 month historic earnings.

Portfolio Activity

The level of activity over the year has been low. Turnover, as defined by purchases plus sales divided by two, was £54.5mn or 14.6%. Given the weakness in medium and smaller companies there is a desire to refresh the portfolio with purchases in this area. However, the headwinds of poor investor sentiment and a weakening economy have meant it has been premature to buy other than very selectively.

The five largest purchases during the year were:

·      Vanquis Banking

·      Legal & General

·      Conduit Holdings

·      Marshalls

·      Strix Group

Of the five largest purchases over the year, four were in smaller companies and three of those have fallen significantly since purchase, with one rising (Conduit). At the time of purchase the three fallers had already experienced substantial share price falls. However, in a bear market a large fall does not mean 'it is all in the price'. With this in mind we have trodden gingerly in buying stocks that are at seeming bargain levels; they can fall further. We are positioned to buy more in the smaller company area as the weighting to it in the portfolio is low by historic standards and it is in smaller companies over the long term that the best returns have been made. We will slowly and selectively be buyers of smaller companies so the portfolio will be well positioned for a return of some investor confidence, which in time will happen.

The five largest sales during the period were:

·      K3 Capital *

·      AstraZeneca

·      Numis *

·      Convatec

·      Devro *

Three of these (starred) came after cash takeover approaches; this should remind investors that there is very real long-term value in the quoted sector.

Dividends

2023 saw a further recovery in investment income, with the Company generating 6.7p in revenue earnings per share compared to 6.1p in the previous year. Excluding special dividends, revenue earnings per share were 6.4p, with positions such as Irish insurer FBD Holdings and iron castings producer Castings paying large special dividends. Elsewhere there was a further recovery in dividends from holdings such as Shell and BP which cut their dividends materially during the pandemic. Encouragingly for future dividends, the dividend pay-out ratio in the UK remains modest. In our view this is because following the pandemic (and its associated widespread dividend cuts), some companies took the opportunity to permanently lower their pay-out ratios to arguably more sustainable levels.

 http://www.rns-pdf.londonstockexchange.com/rns/6268V_5-2023-12-4.pdf

ESG

Our approach to environmental, social and governance (ESG) matters is laid out in more detail in the annual report. We hold the view that seeking to better understand how companies are managing material ESG factors and engaging with them is a route more conducive to long-term progress than rigid sector exclusions. We have included case studies on some recent discussions with companies in the annual report. 

Outlook

When we were writing last year's annual report the expectation was that 2023 would be a recession year. This has not proven to be the case. While 0.4% real GDP growth in '23 (expected at the time of writing) cannot be classed as stellar it needs to be viewed in the context of interest rates rising to a decade high level and inflation coming down from over 10%.

When we look ahead to 2024 we continue to see pessimism reflected in both company valuations and economic growth forecasts. The best remedy for this pessimism is to meet company management teams, who serve as a reminder of the dynamism and innovation that exist in the UK. The consumer is enjoying real wage growth, with unemployment remaining low. Corporate balance sheets are, on the whole, conservative. Yet company valuations continue to reflect a deep scepticism about the sustainability of earnings. We disagree. The challenging backdrop of recent years (COVID, the Ukraine war) has forced companies to look hard at their cost base and run leanly. On any pickup in sales, it is therefore our expectation that the boost to earnings will be meaningful.

The best returns can be made at times when earnings have the potential to grow and valuations are starting from a low base. It is hard to argue that we are not in those times currently.

James Henderson and Laura Foll

Fund Managers

December 2023

Twenty Largest Holdings as at 30 September 2023

The stocks in the portfolio are a diverse mix of businesses operating in a wide range of end markets.

Rank 2023 (2022)	Company	% of portfolio	Approx. market cap	Valuation 2023 £'000
1 (1)	Shell A vertically integrated oil & gas company. At the current oil price the company is capable of generating substantial amounts of free cash flow. This cash is being allocated partly to shareholders (via a growing dividend and share buybacks) and partly to investing in the necessary transition away from fossil fuels.	3.6	£173.3bn	14,333
2 (2)	BP A vertically integrated oil and gas business. The company has announced ambitious plans to reach net zero carbon emissions by 2050 and gradually transition away from fossil fuels towards renewable energy. The cash generation from their oil & gas business should enable this transition to take place, while also continuing to fund cash returns to shareholders via dividends and share buybacks.	3.3	£81.8 bn	13,019
3 (3)	HSBC The global bank provides international banking and financial services. The diversity of the countries it operates in as well as its exposure to faster growing economies make it well placed.	2.8	£118.3bn	10,834
4 (6)	Standard Chartered A global bank providing international banking and financial services, with a particular focus on emerging markets. The position provides geographic diversification for the portfolio as well as being positively exposed to higher global interest rates.	2.6	£16.6bn	10,072
5 (4)	GSK A global pharmaceutical and vaccine company, which spun-off its consumer healthcare business (Haleon) in 2022. The remaining pharmaceutical company has leading franchises in areas such as HIV, however has had a mixed R&D track record in recent years. Under a new leadership team and with increased R&D spending it has the potential to reinvigorate its pharmaceutical pipeline.	2.2	£58.3bn	8,712
6 (20)	M&G The company is a financial services provider that was spun out of Prudential in 2019, providing insurance and asset management services. The capital generation of the group allows sizeable returns to shareholders via dividends and share buybacks	2.0	£4.8bn	7,892
7 (11)	FBD The company is an Irish insurer with a focus on insurance coverage for the agricultural sector. It is a disciplined underwriter with a history of good returns generation and pays an attractive dividend yield.	2.0	£375m	7,882
8 (17)	Aviva This company provides a wide range of insurance and financial services. Under a new CEO there is heightened focus on simplifying the business.	1.9	£11.1bn	7,679
9 (12)	Serica Energy The company is a large producer of natural gas in the North Sea. Its portfolio was built via acquisitions at attractive valuations from larger oil & gas companies. At current gas prices the company is generating substantial amounts of cash with a strong (net cash) balance sheet.	1.9	£866.3m	7,428
10 (13)	Irish Continental The group provides passenger transport, roll-on and roll-off freight transport and container services between Ireland, the United Kingdom and Continental Europe. It is a well managed business operating in a duopolistic industry.	1.9	£624.4m	7,306
11 (*)	International Personal Finance The company provides consumer lending services in countries such as Mexico and Eastern Europe. It has successfully grown its lending in recent years while remaining disciplined on credit quality.	1.7	£273.5m	6,633
12 (14)	Rio Tinto The company is one of the world's largest mining businesses with a particular focus on iron ore, aluminium and copper. Its mines are well positioned on the cost curve, often at the lowest cost quartile globally, meaning that it can continue to be highly cash generative despite volatile commodity prices. This cash generation combined with a strong balance sheet has resulted in an attractive ordinary dividend payment combined with some special dividends in recent years.	1.7	£65.5bn	6,467
13 (18)	Barclays The company has a strong retail lending franchise combined with an investment bank. Over time its strong retail franchise should allow it to generate good returns on capital, however in the past these have not consistently come through because of persistently low interest rates and volatile returns from its investment bank. Higher interest rates and market share gains in its investment bank could allow a period of better returns generation that in our view is not reflected in the current valuation.	1.6	£20.5bn	6,358
14 (16)	NatWest The company is one of the leading retail and commercial lenders in the UK. Since the financial crisis the balance sheet has materially improved and the business has largely returned to its original focus on domestic lending. Higher interest rates are now allowing the business to generate a good return which is not (in our view) reflected in the valuation.	1.6	£17.2bn	6,344
15 (*)	Marks & Spencer The company is a clothing and food retailer. Under a new management team it has refreshed its strategy, for example resetting prices lower and closing loss making stores. This has allowed it to gain market share on both sides of the businesand upgrade earnings expectations.	1.6	£4.4bn	6,270
16 (9)	Anglo American A diversified mining company with exposure to commodities including copper, iron ore, diamonds and platinum. Its mix of commodity production means it could be well positioned to benefit from the need to decarbonise the global economy. For example, it is significantly exposed to copper where demand is likely to grow driven by its use in electric vehicles as well as renewable energy.	1.6	£28.6bn	6,117
17 (*)	Senior The company produces specialist components for use across aerospace and broader industrial end markets. Its earnings were severely impacted by COVID due to weakness in the aerospace market, however the business remains well positioned in its end markets with good recovery potential.	1.5	£661.8m	6,035
18 (*)	Hiscox The company is a global insurance provider that is growing well in markets such as US small business insurance.	1.5	£3.4bn	5,945
19 (8)	Phoenix The company operates primarily in the UK and specialises in taking over and managing closed life insurance and pension funds.	1.5	£4.6bn	5,893
20 (*)	Lloyds Banking The company is one of the leading retail lenders in the UK. Higher interest rates are now allowing the business to generate a good return, which is not (in our view) reflected in the current valuation.	1.5	£26.7bn	5,879
				157,098

At 30 September 2023 these investments totalled £157,098,000 or 40.0% of portfolio.

* Not in the top twenty largest investments last year

MANAGING RISKS  

The Board, with the assistance of the Manager, has carried out a robust assessment of the principal risks and uncertainties, including emerging risks, facing the Company including those that would threaten its business model, future performance, solvency, liquidity and reputation. The Board regularly considers the principal risks facing the Company and has drawn up a matrix of risks. The Board has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objective and policy, in order to mitigate these risks as far as practicable. The principal risks which have been identified and the steps taken by the Board to mitigate these are set out in the table below. The principal financial risks are detailed in note 14 to the financial statements.

At the half year stage, the Board completed a thorough review of the principal risks and uncertainties facing the Company. No changes were made to the principal risks and uncertainties as a result of this.

Principal risks	Mitigating measure
Market, geopolitical, macroeconomic or environmental conditions cause a material fall in market value The wars in Ukraine and Israel have heightened tensions across the world, and significantly increased volatility in equity markets. Macroeconomic conditions in the UK, including political uncertainty and rising inflation have led to increased volatility in the UK equity market.	The Fund Managers maintain close oversight of the Company's portfolio, and in particular its gearing levels, and the performance of investee companies. Regular stress testing of the revenue account under different scenarios for dividends is carried out. The Board monitors volatility, and holds a regular dialogue with the Fund Managers to understand the impact on the Company's portfolio.
Global pandemic The residual impact of the coronavirus pandemic and the potential impact of further global health crises on the Company's investments and its direct and indirect effects, including the effect on the global economy.	The Fund Managers maintain close oversight of the Company's portfolio, and in particular its gearing levels, and the performance of investee companies. Regular stress testing of the revenue account under different scenarios for dividends is carried out. The Board monitors the effects of the pandemic on the operations of the Company and its service providers to ensure that they continue to be appropriate, effective and properly resourced.
Investment activity and strategy risk An inappropriate investment strategy or poor execution, for example, in terms of asset allocation or level of gearing, may result in underperformance against the Company's benchmark index and the companies in its peer group, and also in the Company's shares trading on a wider discount to the net asset value per share.	The Board manages these risks by ensuring a diversification of investments and a regular review of the extent of borrowings. Janus Henderson operates in accordance with investment limits and restrictions and policy determined by the Board, which includes limits on the extent to which borrowings may be employed. The Board reviews the investment limits and restrictions on a regular basis and the Manager confirms adherence to them every month. Janus Henderson provides the Board with management information, including performance data and reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Fund Managers at each Board meeting and monitors risk factors including ESG factors in relation to climate risk, in respect of the portfolio. Investment strategy is reviewed at each meeting.
Portfolio and market price Although the Company invests almost entirely in securities that are listed on recognised markets, share prices may move rapidly. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on equity shareholders' funds.	The Board reviews the portfolio at the five Board meetings held each year and receives regular reports from the Company's brokers. A detailed liquidity report is considered on a regular basis. The Fund Managers closely monitor the portfolio between meetings and mitigate this risk through diversification of investments. The Fund Managers periodically present the Company's investment strategy in respect of current market conditions. Performance relative to the FTSE All-Share Index, and other UK equity income trusts is also monitored.
Dividend income A reduction in dividend income could adversely affect the Company's dividend record.	The Board reviews income forecasts at each meeting. The Company has revenue reserves of £9.9 million (before payment of the third interim and final dividend) and distributable capital reserves of £270.0million.
Financial risk The financial risks faced by the Company include market price risk, interest rate risk, liquidity risk, currency risk and credit and counterparty risk.	The Company minimises the risk of a counterparty failing to deliver securities or cash by dealing through organisations that have undergone rigorous due diligence by Janus Henderson. The Company holds its liquid funds almost entirely in interest bearing bank accounts in the UK or on short-term deposit. This, together with a diversified portfolio which comprises mainly investments in large and medium-sized listed companies mitigates the Company's exposure to liquidity risk. Currency risk is mitigated by the low exposure to overseas stocks. Please see note 14 in the Annual Report.
Gearing risk In the event of a significant or prolonged fall in equity markets gearing would exacerbate the effect of the falling market on the Company's NAV per share and, consequently, its share price.	At the point of drawing down debt, gearing will never exceed 29.99% of the portfolio valuation. The Company minimises the risk by the regular monitoring of the levels of the Company's borrowings in accordance with the agreed limits. The Company confirms adherence to the covenants of the loan facilities on a monthly basis.
Tax and regulatory Changes in the tax and regulatory environment could adversely affect the Company's financial performance, including the return on equity. A breach of s.1158/9 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage.	The Manager provides its services, inter alia, through suitably qualified professionals and the Board receives internal control reports produced by the Manager on a quarterly basis, which confirm legal and regulatory compliance. The Fund Managers also consider tax and regulatory change in their monitoring of the Company's underlying investments.
Operational Disruption to, or failure of, the Manager's or its administrator's (BNP Paribas) accounting, dealing or payment systems or the Depositary's records could prevent the accurate reporting and monitoring of the Company's financial position. Cyber crime could lead to loss of confidential data. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service.	The Board monitors the services provided by the Manager and its other suppliers and receives reports on the key elements in place to provide effective internal control. Cyber security is closely monitored and the Audit Committee receives an annual presentation from Janus Henderson's Head of Information Security. Details of how the Board monitors the services provided by Janus Henderson and its other suppliers and the key elements designed to provide effective internal control are explained further in the Internal Controls section of the Corporate Governance Statement in the Annual Report.

Emerging risks

In addition to the principal risks facing the Company, the Board also regularly considers potential emerging risks, which are defined as potential trends, sudden events or changing risks which are characterised by a high degree of uncertainty in terms of the probability of them happening and the possible effects on the Company. Should an emerging risk become sufficiently clear, it may be moved to a principal risk.

VIABILITY STATEMENT

The Company is a long-term investor; the Board believes it is appropriate to assess the Company's viability over a five-year period in recognition of our long-term horizon and what we believe to be investors' horizons, taking account of the Company's current position and the potential impact of the principal and emerging risks and uncertainties as documented above in this Strategic Report.

The assessment has considered the impact of the likelihood of the principal and emerging risks and uncertainties facing the Company, in particular investment strategy and performance against benchmark, whether from asset allocation or the level of gearing, and market risk, including climate risk, in severe but plausible scenarios, and the effectiveness of any mitigating controls in place.

The Board has reviewed three additional model scenarios which evaluate the impact on the revenue forecast and reserves.  These range from a worst case scenario which includes a 10% reduction in income and net assets, through to a scenario where there is no income growth and no reduction in income or net assets.  Increasing dividends to shareholders could continue under all three scenarios, although the Company would need to use its capital reserves in some cases. None of the results of the scenarios used would therefore threaten the viability of the Company.

The Board has taken into account the liquidity of the portfolio and the gearing in place when considering the viability of the Company over the next five years and its ability to meet liabilities as they fall due. This included consideration of the duration of the Company's loan facilities and how a breach of the loan facility covenants could impact on the Company's liquidity, net asset value and share price.

The Board does not expect there to be any significant change in the current principal risks and adequacy of the mitigating controls in place. Also the Directors do not envisage any change in strategy or objectives or any events that would prevent the Company from continuing to operate over that period as the Company's assets are liquid, its commitments are limited and the Company intends to continue to operate as an investment trust. Only a substantial financial crisis affecting the global economy could have an impact on this assessment.

In coming to this conclusion, the Directors have considered the ongoing impact of the wars in Ukraine and Israel, in particular the impact on income and the Company's ability to meet its investment objective. The Board does not believe that they will have a long-term impact on the viability of the Company and its ability to continue in operation, notwithstanding the short-term uncertainty they have caused in the markets.

Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five-year period.

RELATED PARTY TRANSACTIONS

The Company's current related parties are its Directors and Janus Henderson. There have been no material transactions between the Company and its Directors during the year. The fees and expenses paid to Directors are set out in the Annual Report. There were no outstanding amounts payable at the year end.

In relation to the provision of services by Janus Henderson, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services, there have been no material transactions with Janus Henderson affecting the financial position of the Company during the year under review. More details on transactions with Janus Henderson, including amounts

outstanding at the year end, are given in the Annual Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

In accordance with Disclosure Guidance and Transparency Rule 4.1.12, each of the Directors confirms that, to the best of his or her knowledge:

• the Company's financial statements, which have been prepared in accordance with UK Accounting Standards and applicable law give a true and fair view of the assets, liabilities, financial position and return of the Company; and

• the Strategic Report, Report of the Directors and financial statements include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

Robert Robertson

Chairman

December 2023

INCOME STATEMENT

	Year ended 30 September 2023			Year ended 30 September 2022
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Gains/(losses) on investments held at fair value through profit or loss (note 2)	-	36,546	36,546	-	(79,801)	(79,801)
Income from investments (note 3)	20,669	-	20,669	18,666	-	18,666
Other interest receivable and similar income (note 4)	107	-	107	70	-	70
Gross revenue and capital gains/(losses)	20,776	36,546	57,322	18,736	(79,801)	(61,065)
Management fee	(856)	(857)	(1,713)	(862)	(861)	(1,723)
Administrative expenses	(686)	-	(686)	(645)	-	(645)
Net return/(loss) before finance costs and taxation	19,324	35,689	54,923	17,229	(80,662)	(63,433)
Finance costs	(1,027)	(1,027)	(2,054)	(657)	(657)	(1,314)
Net return/(loss) before taxation	18,207	34,662	52,869	16,572	(81,319)	(64,747)
Taxation on net return	(80)	-	(80)	(81)	-	(81)
Net return/(loss) after taxation	18,127	34,662	52,789	16,491	(81,319)	(64,828)
Return/(loss) per ordinary share  - basic and diluted (note 5)	6.71p	12.83p	19.54p	6.10p	(30.10p)	(24.00p)
	=====	=====	=====	=====	=====	=====

The total columns of this statement represent the Profit and Loss Account of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. The Company had no other comprehensive income other than those disclosed in the Income Statement. The net return is both the profit for the year and the total comprehensive income.

STATEMENT OF CHANGES IN EQUITY

Year ended 30 September 2023	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 1 October 2022	6,755	61,619	1,007	235,389	8,266	313,036
Net (loss)/return after taxation	-	-	-	34,662	18,127	52,789
Third interim dividend (1.525p) for the year ended 30 September 2022 paid 31 October 2022	-	-	-	-	(4,120)	(4,120)
Final dividend (1.525p) for the year ended 30 September 2022 paid 31 January 2023	-	-	-	-	(4,120)	(4,120)
First interim dividend (1.525p) for the year ended 30 September 2023 paid 28 April 2023	-	-	-	-	(4,120)	(4,120)
Second interim dividend (1.525p) for the year ended 30 September 2023 paid 31 July 2023	-	-	-	-	(4,120)	(4,120)
	---------	----------	----------	-----------	----------	----------
At 30 September 2023	6,755	61,619	1,007	270,151	9,913	349,345
	=====	=====	=====	======	=====	======

Year ended 30 September 2022	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 1 October 2021	6,755	61,619	1,007	318,244	6,660	394,285
Net (loss)/return after taxation	-	-	-	(81,319)	16,491	(64,828)
Third interim dividend (1.5p1) for the year ended 30 September 2021 paid 31 October 2021	-	-	-	-	(4,053)	(4,053)
Final dividend (1.525p1) for the year ended 30 September 2021 paid 31 January 2022	-	-	-	(1,513)	(2,607)	(4,120)
First interim dividend (1.525p) for the year ended 30 September 2022 paid 29 April 2022	-	-	-	-	(4,120)	(4,120)
Second interim dividend (1.525p) for the year ended 30 September 2022 paid 29 July 2022	-	-	-	-	(4,120)	(4,120)
Return of unclaimed dividends	-	-	-	-	15	15
	---------	----------	----------	-----------	----------	----------
At 30 September 2022	6,755	61,619	1,007	235,389	8,266	313,036

1	Comparative figures have been restated due to the sub-division of each ordinary share of 25p each into ten ordinary shares of 2.5p on 7 February 2022

STATEMENT OF FINANCIAL POSITION

	As at 30 September 2023 £'000	As at 30 September 2022 £'000
Fixed assets
Investments held at fair value through profit or loss:
Listed at market value in the United Kingdom	294,983	247,017
Listed at market value on AIM	52,186	58,664
Listed at market value overseas	15,484	15,503
Unlisted	2,368	2,908
Investments on loan	27,408	27,989
	-----------	-----------
	392,429	352,081
	-----------	-----------
Current assets
Debtors	2,805	1,228
Cash at bank	2,926	9,395
	-----------	-----------
	5,731	10,623
	-----------	-----------
Creditors: amounts falling due within one year	(19,003)	(19,866)
	-----------	-----------
Net current liabilities	(13,272)	(9,243)
	-----------	-----------
Total assets less current liabilities	379,157	342,838
Creditors: amounts falling due after one year	(29,812)	(29,802)
	-----------	-----------
Net assets	349,345	313,036
	=======	=======
Capital and reserves
Called up share capital	6,755	6,755
Share premium account	61,619	61,619
Capital redemption reserve	1,007	1,007
Other capital reserves	270,051	235,389
Revenue reserve	9,913	8,266
	-----------	-----------
Total shareholders' funds	349,345	313,036
	=======	=======
Net asset value per ordinary share - basic and diluted	129.3p	115.9p
	=======	=======

STATEMENT OF CASH FLOWS

	Year ended 30 September 2023 £'000	Year ended 30 September 2022 £'000
Cash flows from operating activities
Net return/(loss) before taxation	52,869	(64,747)
Add back: finance costs	2,054	1,314
Add: (gains)/losses on investments held at fair value through profit or loss	(36,546)	79,801
Withholding tax on dividends deducted at source	41	(59)
(Increase)/decrease in other debtors	(1,697)	41
(Decrease)/increase in other creditors	(496)	98
	-----------	-----------
Net cash inflow from operating activities	16,225	16,448
Cash flows from investing activities
Purchase of investments	(56,075)	(40,491)
Sale of investments	52,572	57,726
	-----------	-----------
Net cash (outflow)/inflow from investing activities	(3,503)	17,235
Cash flows from financing activities
Equity dividends paid (net of refund of unclaimed distributions and reclaimed distributions)	(16,480)	(16,398)
Costs relating to sub-division of shares	-	(23)
Loans drawn down	55,092	9,149
Loans repaid	(55,796)	(23,726)
Interest paid	(1,996)	(1,294)
	-----------	-----------
Net cash outflow from financing activities	(19,180)	(32,292)
	-----------	-----------
Net (decrease)/increase in cash and cash equivalents	(6,458)	1,391
Cash and cash equivalents at start of year	9,395	7,976
Effect of foreign exchange rates	(11)	28
	-----------	-----------
Cash and cash equivalents at end of year	2,926	9,395
	=======	=======
Comprising:
Cash at bank	2,926	9,395
	-----------	-----------
	2,926	9,395
	=======	=======
Cash inflow from dividends net of taxation was £18,934,000 (2022: £18,835,000) and Interest received was £62,000 (2022: £4,000).

NOTES TO THE FINANCIAL STATEMENTS

1.	Accounting Policies
	a) Basis of Preparation The Company is a registered investment company as defined in section 833 of the Companies Act 2006 and is incorporated in the United Kingdom. It operates in the United Kingdom and is registered at 201 Bishopsgate, London, EC2M 3AE. The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 - The Financial Reporting Standard applicable in the UK and Republic of Ireland and with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts (the 'SORP') amended in July 2022 by the Association of Investment Companies ('AIC'). The principal accounting policies applied in the presentation of these financial statements are set out below. These policies have been consistently applied to all the years presented. The financial statements have been prepared under the historical cost basis except for the measurement of fair value of investments. In applying FRS102, financial instruments have been accounted for in accordance with Section 11 and 12 of the standard. All of the Company's operations are of a continuing nature. The preparation of the Company's financial statements on occasion requires the Directors to make judgements, estimates and assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures. These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the financial year. The Directors do not believe that any accounting judgements have been applied to this set of financial statements that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.  Nor do they believe that there are any estimates that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.  In line with UK GAAP investments are valued at fair value which are predominantly quoted prices of the investments in active markets and therefore reflect participants' views of climate change risk. b) Going Concern The Directors have considered the liquidity of the portfolio and concluded that the assets of the Company consist of securities that are readily realisable. They have also considered the impact of the wars in Ukraine and Israel, including revenue forecasting, and a review of covenant compliance including the headroom above the most restrictive covenants. They have concluded that they are able to meet their financial obligations as they fall due for at least twelve months from the date of approval of the financial statements. Having assessed these factors, the principal risks and other matters discussed in connection with the viability statement, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
2.	Gains on investments held at fair value through profit or loss	2023 £'000	2022 £'000
	Gains on the sale of investments based on historical cost	7,085	12,602
	Less: revaluation gains/(losses) recognised in previous years	3,499	(7,450)
		-----------	-----------
	Gains on investments sold in the year based on carrying value at previous Statement of Financial Position date	10,584	5,152
	Revaluation gains/(losses) on investments held at 30 September	25,973	(84,981)
	Exchange (losses)/gains	(11)	28
		----------	----------
		36,546	(79,801)
		======	======

3.	Income from Investments	2023 £'000	2022 £'000
	UK dividends:
	Listed investments	17,210	16,180
	Unlisted	13	13
	Property income dividends	615	460
		---------	---------
		17,838	16,653
		---------	---------
	Non UK dividends:
	Overseas dividend income	2,831	2,013
		---------	---------
		2,831	2,013
		---------	---------
		20,669	18,666
		=====	=====

4.	Other Interest Receivable and Similar Income	2023 £'000	2022 £'000
	Stock lending commission	42	62
	Bank interest	65	8
		---------	---------
		107	70
		=====	=====
	Stock lending commission has been shown net of brokerage fees of £11,000 (2022: £16,000).

5.	Return per Ordinary Share - Basic and Diluted
	The return/(loss) per ordinary share is based on the net return attributable to the ordinary shares of £52,789,000 (2022: net loss of £64,828,000) and on 270,185,650 ordinary shares (2022: 270,185,650) being the weighted average number of ordinary shares in issue during the year. The return/(loss) per ordinary share can be further analysed between revenue and capital, as below.
			2023 £'000	2022 £'000
	Net revenue return		18,127	16,491
	Net capital return/(loss)		34,662	(81,319)
			---------	---------
	Net total return/(loss)		52,789	(64,828)
			=====	=====
	Weighted average number of ordinary shares in issue during the year		270,185,650	270,185,650
			2023 Pence	2022 Pence
	Revenue return per ordinary share		6.71	6.10
	Capital return/(loss) per ordinary share		12.83	(30.10)
			----------	----------
	Total return/(loss) per ordinary share		19.54	(24.00)
			======	======
	The Company does not have any dilutive securities, therefore the basic and diluted returns per share are the same.
6.	Dividends Paid and Payable on the Ordinary Shares
	Dividends on ordinary shares	Record date	Payment date	2023 £'000	2022 £'000
	Third interim dividend (1.5p1) for the year ended 30 September 2021	30 September 2021	29 October 2021	-	4,053
	Final dividend (1.525p1) for the year ended 30 September 2021	30 December 2021	31 January 2022	-	4,120
	First interim dividend (1.525p) for the year ended 30 September 2022	31 March 2022	29 April 2022	-	4,120
	Second interim dividend (1.525p) for the year ended 30 September 2022	30 June 2022	29 July 2022	-	4,120
	Third interim dividend (1.525p) for the year ended 30 September 2022	30 September 2022	31 October 2022	4,120	-
	Final dividend (1.525p) for the year ended 30 September 2022	30 December 2022	31 January 2023	4,120	-
	First interim dividend (1.525p) for the year ended 30 September 2023	31 March 2023	28 April 2023	4,120	-
	Second interim dividend (1.525p) for the year ended 30 September 2023	30 June 2023	31 July 2023	4,120	-
	Return of unclaimed dividends			-	(15)
				---------	---------
				16,480 =====	16,398 =====

1 Comparative figures for the year ended 30 September 2021 have been restated due to the sub-division of each ordinary share of 25p into ten ordinary shares of 2.5p each on 7 February 2022 The third interim dividend and the final dividend for the year ended 30 September 2023 have not been included as a liability in these financial statements. The total dividends payable in respect of the financial year, which form the basis of the retention test under Section 1158 of the Corporation Tax Act 2010, are set out below.
		2023 £'000
	Revenue available for distribution by way of dividend for the year	18,127
	First interim dividend (1.525p) for the year ended 30 September 2023	(4,120)
	Second interim dividend (1.525p) for the year ended 30 September 2023	(4,120)
	Third interim dividend (1.600p) for the year ended 30 September 2023	(4,323)
	Final dividend (1.600p) for the year ended 30 September 2023 (based on 270,185,650 ordinary shares in issue at 1 December 2023)	(4,323)
		---------
	Transfer to reserves	1,2411
		=====

¹ The residual will be transferred to the revenue reserve (2022: transfer to revenue reserve £26,000)

7.	Called up Share Capital
			Number of shares entitled to dividend	Total number          of shares	Nominal value of shares £'000
	At 30 September 2022 and 2023		270,185,650	270,185,650	6,755
			-----------	-----------	-----------
No shares were allotted or bought back during the year (2022: nil).

8.	Net Asset Value per Ordinary Share
	The net asset value per ordinary share of 123.9p (2022: 115.9p) is based on the net assets attributable to the ordinary shares of £349,345,000 (2022: £313,036,000) and on 270,185,650 (2022: 270,185,650) shares in issue on 30 September 2023. The movements during the year of the assets attributable to the ordinary shares were as follows:
		2023 £'000	2022 £'000
	Total net assets at start of year	313,036	394,285
	Total net return/(loss) after taxation	52,789	(64,828)
	Costs relating to sub-division of shares	-	(23)
	Net dividends paid in the year:
	Ordinary shares	(16,480)	(16,398)
		-----------	-----------
	Net assets attributable to the ordinary shares at 30 September	349,345	313,036
		======	======

9.	2023 Financial Information
	The figures and financial information for the year ended 30 September 2023 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts. The Company's annual financial statements for the year to 30 September 2023 have been audited but have not yet been delivered to the Registrar of Companies. The Independent Auditor's Report on the 2023 annual financial statements was unqualified, did not include reference to any matter to which the Auditor drew attention without qualifying the report, and did not contain any statements under sections 498(2) or 498(3) of the Companies Act 2006.
10.	2022 Financial Information
	The figures and financial information for the year ended 30 September 2022 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts. The Company's annual financial statements for the year to 30 September 2022 have been audited and filed with the Registrar of Companies. The Independent Auditor's Report on the 2022 annual financial statements was unqualified, did not include reference to any matter to which the Auditor drew attention without qualifying the report, and did not contain any statements under sections 498(2) or 498(3) of the Companies Act 2006.
11.	Dividend
	The final dividend, if approved by the shareholders at the Annual General Meeting, of 1.600p per ordinary share will be paid on 31 January 2024 to shareholders on the register of members at the close of business on 29 December 2023. This will take the total dividends for the year to 6.25p (2022: 6.10p). The Company's shares will be traded ex-dividend on 28 December 2023.
12.	Annual Report
	The Annual Report will be posted to shareholders in December 2023 and will be available on the Company's website (www.lowlandinvestment.com).

13.	Annual General Meeting
	The Annual General Meeting will be held on 24 January 2024 at 2.00pm at 201 Bishopsgate, London EC2M 3AE. The Notice of Meeting will be sent to shareholders with the Annual Report.

For further information please contact:
James Henderson	Laura Foll
Fund Manager	Fund Manager
Lowland Investment Company plc	Lowland Investment Company plc
Telephone: [phone]	Telephone: [phone]
Dan Howe
Head of Investment Trusts
Janus Henderson Investors
Telephone: [phone]

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) are incorporated into, or form part of, this announcement.

 

END