Monks Investment Trust Annual Results

Monks Investment Trust PLC

02 July 2024

 

RNS Announcement

The Monks Investment Trust PLC (MNKS)

Legal Entity Identifier: 213800MRI1JTUKG5AF64

Results for the year to 30 April 2024

NAV (borrowings at fair value) *	+17.6%
NAV (borrowings at par) *	+17.7%
Share Price*	+19.1%
Index†	+19.1%

Source: LSEG / Baillie Gifford. All figures are total return^*. See disclaimer at the end of this announcement.

*      Alternative Performance Measure - see Glossary of terms and Alternative Performance Measures at the end of this announcement.

†      Comparative index: FTSE World Index (in sterling terms).

The following is the Preliminary Results Announcement for the year to 30 April 2024 which was approved by the Board on 1 July 2024.

Chairman's Statement

Performance

During the year the net asset value ('NAV') total return, with borrowings calculated at fair value, was +17.6%. The share price total return was +19.1%, matching the FTSE World Index return of +19.1%. The second half of the year provided much stronger returns than the first half, with a NAV total return of +21.6% and a share price total return of +28.5% compared to +16.6% from the index. This is an encouraging return to positive relative performance after the last two years' declines; but we are well aware that on a NAV basis, this is the third year of underperformance.

The Managers have been actively repositioning the Company's portfolio, identifying growth equities with the characteristics to perform well even in the more challenging economic environment. The essential thesis of the Managers' original investment approach is unchanged, but the experience gained in the last few years has refined its application, particularly focusing on valuation discipline.

Capital allocation

The Company's shares traded at a discount to net asset value throughout the year. The Board has been active in buying shares in the open market. Having issued shares when Monks' shares traded at a premium to net asset value, we believe that it is our obligation to be ready buyers at a discount. Buying the Company's own shares at a discount to NAV enhances NAV per share for ongoing shareholders. Buybacks also improve short-term liquidity in the Company's shares. We believe that the underlying portfolio is attractive enough for our shares to trade at close to or above NAV.

Over the course of the Company's financial year, we bought 16.7 million shares, at an average discount of 10.4% and a cost of £172.9 million. Since we commenced this active programme in January 2022, we have bought back 39.0 million shares at a cost of £406.0 million; representing 16.5% of the Company's issued share capital as at 31 December 2021 and one of the highest buybacks as a percentage of issued share capital in the global equity sector. At the year-end, the discount had narrowed to 8.5% (30 April 2023 - 9.7%). The Board will continue its buyback policy as a key part of its overall capital allocation.

Borrowings and gearing

Our investment trust structure allows gearing, which should enhance long-term returns. The Board's strategic borrowing target is 10%. It is expected that effective gearing will be maintained in the range of minus 15% to plus 15%. Gearing rose moderately from 5.3% at the start of the year to 6.8% by the end as a result of obtaining new private placement debt and funding buybacks.

In December 2023, the Company issued four tranches of private placement debt totalling £73 million, three euro-denominated, and one in yen, across a range of maturities from 2030 to 2037. This was used in part to repay higher cost floating rate bank debt. The Company's structural debt with a current weighted average interest rate of 2.74% is supplemented by a revolving, floating rate facility with National Australia Bank Limited which expires in November 2024. At the year end, £50 million (30 April 2023 - £75 million) of this £150 million facility was drawn. The Board values the flexibility offered by the bank loan and will consider a renewal of this facility later this year.

Management expenses

Monks remains competitive on fees and expenses: keeping fees as low as possible maximises the long-term returns to shareholders. The total ongoing charges ratio for the year to 30 April 2024 was 0.44%, up marginally from 0.43% in the prior year. The current tiered management fee scale should ensure that all shareholders will benefit from economies of scale as assets grow.

Earnings and dividend

Monks invests with the aim of maximising capital growth rather than income. All operating costs are charged to the Revenue Account. The Board's policy is to pay the minimum dividend required to maintain investment trust status. Retained earnings are reinvested in the portfolio. In order to build in headroom for further buybacks that would reduce the shares in issue qualifying for dividends, the Board is recommending that a single final dividend of 2.10p be paid, compared to 3.15p last year, to ensure that the amount retained for the year does not exceed that permissible.

Addressing sustainability and fossil fuel investments

Many shareholders will be aware of the public debate surrounding investments in fossil fuels. The Board and the Managers take their stewardship responsibilities very seriously. Environmental, Social, and Governance (ESG) factors are intrinsically linked with long-term investing. The Managers embed the analysis of these factors into their core research when searching for high-quality growth companies. They are supported by a dedicated ESG analyst who assists with the ongoing stewardship of each holding; he is part of a wider team of more than 40 people. The objective is not to seek perfection but to focus on materiality and the direction of travel. Engagement can encourage responsible behaviour and meaningful change. The Company's direct investments in businesses with fossil fuel related activities totalled 2.6% versus 4.8% for the index at the year end.

Engaging with portfolio companies

Throughout the year, the Managers regularly engage with portfolio companies. An interesting case study is the building materials company, CRH, which is the largest contributor to the portfolio's carbon footprint. However, CRH's products are essential for investments in our built environment, including new energy infrastructure crucial for the energy transition. The Managers have engaged with CRH about their carbon emissions for an extended period, playing a crucial role in the company becoming a leader in lower-carbon solutions and setting some of the industry's most ambitious carbon reduction plans.

Importantly, if the Managers believe that insufficient progress is being made relating to important ESG factors, they will sell a stock. A recent example includes the miner Rio Tinto, where concerns regarding governance and the approach to environmental impact were not adequately addressed. The Company has since sold its holding.

The Board

The Board is cognisant of the need to ensure regular refreshment of its composition, whilst also maintaining continuity and corporate memory. In particular, we believe that succession should incorporate adequate handover periods. As part of this ongoing succession planning, the Directors reviewed the skills and experience of the Board; considered recent and anticipated developments in the commercial and regulatory landscape; and appointed Cornforth Consulting to commence the search for two new Directors. As a result of this process, the Board is pleased to welcome Randeep Grewal and Stacey Parrinder-Johnson, who were appointed with effect from 1 March 2024. They bring diverse investment industry experience and breadth of perspective to the Board. We expect their appointments to strengthen further its debate and challenge of the Managers.

Jeremy Tigue, who joined the Board in September 2014 will not offer himself for re-election at the forthcoming Annual General Meeting. Belinda Richards took over from Jeremy as Senior Independent Director in December 2023, and Claire Boyle will succeed him as Audit Committee Chair. We will miss his wise counsel and depth of knowledge; he has been a super colleague for all of us and a model non-executive.

My colleagues have asked that I remain Chairman after this AGM; and the Board will make an announcement about future succession plans in due course.

The Managers

The Board believes that Baillie Gifford is an impressive investment house, with excellent minds applied to finding the best way of profiting from the accelerating change in the global economy. We have continued to bolster the lead investment team, with Baillie Gifford's joint managing partner Malcolm MacColl and partner Spencer Adair being joined by Helen Xiong as deputy portfolio manager. Helen is an investment manager in Baillie Gifford's Global Alpha Team and a partner in the firm.

We are encouraged by the robustness of analysis of the portfolio, and its diversified distillation of Baillie Gifford's best ideas. It is well placed to deliver superior returns to shareholders, whatever the short-run impact of inflation concerns, interest rates or geopolitical risk. It is encouraging that recent performance has improved significantly, and that the portfolio outperformed its comparative index in the second half of the year.

Outlook

The Board shares the enthusiasm of our Managers for the underlying portfolio. Although our portfolio is a growth portfolio it has very few loss-making firms. There are ideas from across the economy, not just in technology. We have very limited exposure to unquoted companies. The valuation premium over the market is quite narrow, on a range of measures, whereas the expected growth in revenues and profits for portfolio companies is much higher than the market's overall growth rate. We are not reliant on a small number of big winners. We believe that Monks is the growth portfolio that all investors can consider to be a core holding.

Annual General Meeting

Shareholders who have been accustomed to attending the Company's AGM for many years in the same venue should take note of a change of location. This year, the AGM will be held on Tuesday 10 September 2024 at the Royal Institution, 21 Albemarle Street, London W1S 4BS, at the slightly later time than previously of 11.30 am. We look forward to welcoming shareholders there.

In line with last year's procedure, the Board intends to hold the AGM voting on a poll, rather than on a show of hands, so encourages all shareholders to exercise their votes at the AGM by completing and submitting a form of proxy. We recommend that shareholders monitor the Company's website at monksinvestmenttrust.co.uk where any updates regarding the meeting will be posted. Market announcements will also be made in the event of any change to the scheduled arrangements.

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 [e-mail] or call 0800 917 2112. For shareholders investing through a platform, the AIC guidance on how to vote shares in advance or obtain the documentation necessary to vote in person at the AGM, may be of assistance: theaic.co.uk/how-to-vote-your-shares.

KS Sternberg

Chairman

1 July 2024

Past performance is not a guide to future performance. Total return information is sourced from Baillie Gifford/LSEG. See disclaimer at the end of this announcement. For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

Managers' Review

The past year in financial markets may best be described as a 'game of two halves'. The first was a cagey and nervous affair. The dominant narrative was uncertainty relating to the prospect of a US recession. The second half was much more encouraging. Against a backdrop of growing optimism as inflation stabilised and central banks paused interest rate increases, investors continued to recognise the transformational potential of artificial intelligence (AI). This manifested most obviously in the share prices of some of the world's largest technology stocks (several of which we own within Monks). Equity indices rallied, driven by these companies, and, in some cases, hit new highs.

Similarly, the second half of our financial year delivered markedly stronger results than the first. A net asset value (NAV) total return* of +21.6% (the index delivered +16.6%) compares strongly to the first half of the year. This was underpinned by solid operational progress for our portfolio: the holdings saw earnings growth of +12% compared to -0.8% for the index. Our investments continue to adapt positively to the operating backdrop (see 'Performance' section below).

Conviction in our approach

While we have adapted the way we manage the portfolio, such as strengthening the analytical inputs around valuations and stock correlations, the core approach to managing Monks remains consistent. We select stocks based on their fundamental attractions without reference to the index (over 80% of the portfolio is different to the index); we seek to invest in a diversified collection of companies that can deliver superior levels of earnings growth; and we strive to allow compounding to work its magic by being patient (our turnover is 15%, implying an average holding period of 6 years). We continue to have absolute conviction that this approach will deliver attractive long-term returns for shareholders.

The foundation of our conviction lies in the portfolio's financial characteristics. We therefore make no apologies for citing (as we have in past reports) the strength of our holdings' balance sheets, superior gross margins, and stronger forecast earnings growth. This is accompanied by a valuation premium consistent with our long-run average (+23% on a forward price-to-earnings basis).

Growth companies excite us. From AI, to gravel, to storm drains, to digital payments, Monks seeks to give shareholders exposure to the world's leading beneficiaries of change, whatever the sector, wherever in the world.

Performance

The Global Alpha team has managed Monks for nine years. Over this period, the fair value NAV total return has been +166.6%* (share price +175.6%*) compared to the comparative index (FTSE World) which returned +170.8%*. In the twelve months to the end of April, the portfolio underperformed the comparative index (FTSE World) by -1.5%, delivering a NAV total return of +17.6% (share price +19.1%) against the index total return of +19.1%.

Our insurance and healthcare holdings were among the largest detractors from relative performance. The share prices of AIA, Ping An and Prudential (totalling 3.0% of the portfolio) fell by an average of -34% in the period. The lingering effect of the pandemic on the Chinese economy curtailed active selling opportunities (as sales force activity remains below pre-pandemic levels) and weakened consumer demand. We have sold our positions in Ping An and Prudential. We believe that AIA is best placed to take advantage of the significant structural long-term growth opportunity that remains in China (and across Asia more broadly), where the 'protection gap' is large. AIA is seeing demand return, is growing its salesforce once again (having cut back during COVID), and has recently been granted licenses in five new Chinese territories expanding its addressable market.

The healthcare sector is navigating a challenging period against a backdrop of excess inventory build-up following the pandemic (which has suppressed demand) and a much more difficult funding environment for drug developers. In relation to the latter, we believe this supports our position in Royalty Pharma, a provider of capital to late-stage drug developers. Whilst its share price has been weak, down -20% in the year, we continue to believe that operational progress is on track. Its stream of royalties from its existing portfolio of drugs continues to grow healthily and the company is deploying capital well ahead of the pace needed to support double-digit growth rates (US$1.6bn deployed in the latest quarter, compared to a 5-year average of US$2bn annually).

We have sold Novocure (cancer treatment). Our central expectation was that it could successfully expand its addressable market by applying its tumour treatment field technology, designed to treat solid-state brain tumours, to cancers affecting other vital organs. Setbacks in recent clinical trials have negatively affected the probabilities of success and weakened our conviction in the investment case.

The majority of the portfolio holdings are adapting and executing well. Several holdings have proven their adaptability by exerting exceptional pricing power and have been the strongest positive contributors to portfolio return. Martin Marietta (aggregates and building supplies) is a case in point. It has been able to increase aggregate pricing significantly (+14% year-on-year†) and deliver record levels of profitability. It has been a similar story at CRH (cement and building supplies), which was the second-largest contributor to portfolio return. Elsewhere, Meta (social media) as one of our 'Stalwart' growth holdings, has unleashed the power of its advertising estate by leveraging its growing AI capabilities to improve its utility to merchants. This has driven demand for its advertising capacity and gradually improved pricing. In conjunction with sensible cost control and more disciplined growth spending, Meta has delivered a doubling of net income (+117%) year-over-year†.

Others have executed flawlessly. Rapid Growth holding DoorDash, the leading US food delivery platform, was the third largest positive contributor to the portfolio's return. The company's commitment to improving its offerings for consumers, merchants, and delivery riders (known as Dashers) has propelled monthly active users to a record high, alongside a significant increase in average order frequency. It now has almost two-thirds of the online meal delivery market in the US and grew revenues at +27% year-on-year#. DoorDash is making strong progress in new markets too, including online grocery delivery, as it seeks to become the convenience platform of choice for consumers in the US.

Innovation beyond the obvious

Whilst markets have been narrowly focused over the past year, we have continued to embrace a wide array of opportunities. These span both digital and physical spheres - from enterprise cloud computing and digital payments to telegraph poles and HVAC (heating, ventilation, and air conditioning) installation. We expect market returns to broaden over time. The Monks portfolio should benefit as it is aligned with deep structural trends that will support long-term growth.

By way of illustration, we highlight below some of these structural trends and related changes to the portfolio over the last year:

Digital Payments - the digital payments market has developed hugely since the first consumer payment was recorded in 1994 (a CD copy of Sting's 'Ten Summoner's Tales' for US$12.48 on NetMarket, for the trivia aficionados among you). Indeed, the value of global digital payment transactions has doubled (to over US$6 trillion) in the past 5 years alone and there remains much to go for. We have purchased a new position in Block which owns Cash App, the most popular finance application in the US with over 80 million users. Started as a peer-to-peer payments application, it has developed into a fully-fledged consumer 'app' offering multiple services. The other part of its offering is its 'Square' point-of-sale hardware, which enables merchants (often small or micro businesses without an online presence) to accept digital payments. It is a simple, convenient, and easy-to-use solution for merchants to accept a wide variety of digital payments. We are excited about Block's potential to integrate these two offerings and build significant long-term value. Indeed, we have added to the position since purchase. The portfolio has exposure to a range of other digital payment businesses, including Mastercard, the rapidly growing MercadoPago (operated by MercadoLibre) in South America, and Adyen, the Dutch payments business (to which we added in the period).

Semiconductors - technological advancement in semiconductors is driving the exponential acceleration of computing power. This has potentially profound implications for what computers are able to do in the future, from driving cars autonomously (at scale) to producing music, content and independently writing computer code. We have deliberately grown the portfolio's exposure to the semiconductor industry (now 10% of the portfolio) over the past couple of years. In our interim report, we underlined our enthusiasm for the purchase of NVIDIA as the leading global designer of graphics processing units (GPUs), a key enabler of artificial intelligence (AI) applications. In recent months we have added holdings in semiconductor companies Texas Instruments and Samsung Electronics. Growth in both cases will be driven by the secular trends towards greater electrification (for example in the automotive market), the use of consumer electronics (think smartphones, laptops, and tablets), and the ongoing build-out of data centres to support increasing cloud computing capacity.

Healthcare - the long-term drivers of the need for healthcare are clear. The global number of people aged over 60 will double by 2050. The number of people over 80 will triple. As we age, we consume much more healthcare. We added a position in the Danish insulin business, Novo Nordisk. It has seen a recent rapid transformation from a steadily compounding business focusing on diabetes care and clotting, to leading the way in GLP-1 weight-loss drugs. Novo's drug, Wegovy, has opened a huge, global market and is addressing one of the world's biggest health challenges. The opportunity could reach hundreds of millions of individuals who are clinically obese, as well as unlock further opportunities by reducing the long list of health complications that come with obesity (heart disease, certain types of cancer, liver disease etc).

Infrastructure - we have continued to invest where companies may be beneficiaries of an 'Infrastructure Upgrade', particularly in the US. There are several factors including re-shoring trends and infrastructure spending (supported by legislation like the Inflation Reduction Act) which are likely to support a material uptick in capital spending on areas including roads, energy, and digital networks. We wrote about our enthusiasm for Comfort Systems, the HVAC installer, in our interim update, and we recently established a position in the Canadian company Stella-Jones. It is North America's largest manufacturer of pressure-treated wood products. The growth case rests on its core product, wooden utility poles, used for electrical and communications infrastructure. For the US to decarbonise its energy systems and have a chance of achieving its Net Zero ambitions, substantial investment will be required in its national power grid. We believe volume growth and pricing power will boost profitability in the coming years.

Remaining ambitious

We have sold several positions as we seek to upgrade the portfolio's growth prospects. Some of these generated strong returns for the portfolio, but the likelihood of similar returns in the future looked unlikely. Examples include the semiconductor testing equipment business, Teradyne (up five-fold since purchase), and the governance and data services business Broadridge (up two-fold since purchase). In other cases, despite signs of some progress, our patience was exhausted with the likes of Adidas (sports apparel) and Wayfair (online furniture retail). Adidas' new management team must reposition the Adidas brand and assess how to tap into large markets like China, where they are currently being outcompeted by Nike and domestic brands. Wayfair has successfully restructured its debt position, but we have reservations that the business can return to volumes supportive of margin expansion and attractive profit growth. There was also a higher number of complete sales of smaller positions within the portfolio. We chose to sell several holdings inherited as part of the rollover of assets from the Independent Investment Trust in November 2022. These included travel businesses Jet2 (travel) and On the Beach (online travel). Strong travel-related demand has returned post-pandemic. The share prices of these companies now better reflect their long-term growth potential so we have redeployed the proceeds elsewhere.

Governance and Sustainability

The building blocks of our investment philosophy - bottom-up stock-level research and long-termism - chime with an increasing focus on stewardship and focus on Environmental, Social, and Governance factors. We understand that businesses operate in a complex and dynamic world where their activities may have positive and negative impacts. There are no shortcuts. We believe that getting to know companies on a case-by-case basis is essential as we seek to understand their unique circumstances and assess material factors that may influence their sustainability. This directly impacts our assessment of holdings within the Monks portfolio.

Our latest thinking can be found within our dedicated Monks Stewardship Report on our website.

Improving our team

We are pleased that the Board agreed to appoint Helen Xiong as a Deputy Manager of Monks with effect from 1 July 2024. Helen is a partner of Baillie Gifford and has been at the firm since 2008. She works closely with us on Baillie Gifford's Global Alpha strategy and has contributed strongly to ideas that we have adopted for the portfolio in recent years including DoorDash (food delivery) and, more recently, Block (payments).

Outlook

Across our portfolio, companies are successfully fine-tuning operations to adjust to present conditions, while continuing to invest for the future. This has translated into strong delivered and forecast earnings growth. Pleasingly, there are encouraging signs that investment markets - against a backdrop of stabilising inflation and interest rates - are more willing to recognise this, and relative performance has begun to rebound strongly. Our optimism is reflected in our decision to raise medium-term debt (£73m) in the private placement market (net gearing was 6.8% at year end). Our blended cost of fixed rate borrowing is now 2.74%, which we consider to be a low hurdle when set against future investment opportunities.

As we look forward, what is most exciting is that the rate of change and technological development is accelerating and underpins a growing, and often underappreciated, opportunity set. By virtue of our willingness to take a wide-angled view of growth (defined by our growth profiles - Stalwart, Rapid and Cyclical growth), we have the latitude to invest beyond the obvious. This allows us to harness the growth potential of lesser-known but nevertheless exceptional growth companies. We are therefore enthusiastic about the potential of SiteOne Landscape Supply and its ability to consolidate the wholesale landscaping supply market in the US, while concurrently embracing the latest advancements in semiconductor design by owning positions in the likes of NVIDIA and ASM International. Our portfolio reflects an eclectic and growing opportunity set and we are confident that it will deliver for shareholders in the years ahead.

Spencer Adair

Malcolm MacColl

Helen Xiong

1 July 2024

* Total returns from 31 March 2015 to 30 April 2024.

† Q1 2024 versus Q1 2023.

# Q4 2023 versus Q4 2022.

Past performance is not a guide to future performance.

Total return information is sourced from Baillie Gifford/LSEG. See disclaimer at the end of this announcement.

For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

The Managers' core investment beliefs

We believe the following features of Monks provide a sustainable basis for adding value for shareholders.

Active management

·      We invest in attractive companies using a 'bottom-up' investment process. Macroeconomic forecasts are of relatively little interest to us.

·      High active share* provides the potential for adding value.

·      We ignore the structure of the index - for example the location of a company's HQ and therefore its domicile are less relevant to us than where it generates sales and profits.

·      Large swathes of the market are unattractive and of no interest to us.

·      As index agnostic global investors we can go anywhere and only invest in the best ideas.

·      As the portfolio is very different from the index, we expect portfolio returns to diverge - sometimes substantially and often for prolonged periods.

Committed growth investors

·      In the long run, share prices follow fundamentals; growth drives returns.

·      We aim to produce a portfolio of stocks with above average growth, this in turn underpins the ability of Monks to add value.

·      We have a differentiated approach to growth, focusing on the type of growth that we expect a company to deliver. All holdings fall into one of three growth categories, as set out below.

·      The use of these three growth categories ensures a diversity of growth drivers within a disciplined framework.

Long-term perspective

·      Long-term holdings mean that company fundamentals are given time to drive returns.

·      We prefer companies that are managed with a long-term mindset, rather than those that prioritise the management of market expectations.

·      We believe our approach helps us focus on what is important during the inevitable periods of underperformance.

·      Short-term portfolio results are random.

·      As longer-term shareholders we are able to have greater influence on environmental, social and governance matters.

Dedicated team with clear decision-making process

·      Senior and experienced team drawing on the full resources of Baillie Gifford.

·      Alignment of interests - the investment team responsible for Monks all own shares in the Company.

Portfolio construction

·      Investments are held in three broad holding sizes, as set out below.

·      This allows us to back our judgement in those stocks for which we have greater conviction, and to embrace the asymmetry of returns through 'incubator' positions in higher risk/return stocks.

·      'Asymmetry of returns' - some of our smaller positions will struggle and their share prices will fall; those that are successful may rise many fold. The latter should outweigh the former.

Low cost

·      Investors should not be penalised by high management fees.

·      Low turnover and trading costs benefit shareholders.

*      For a definition of terms see Glossary of terms and Alternative Performance Measures at the end of this document

Investment portfolio by growth category as at 30 April 2024*

Holding size	Growth stalwarts	34.4%	Rapid growth	34.4%	Cyclical growth	31.2%
	(c.10% p.a. earnings growth)		(c.15% to 25% p.a. earnings growth)		(c.10% to 15% p.a. earnings growth through a cycle)
	Company characteristics ¾    Durable franchise ¾    Deliver robust profitability in most macroeconomic environments ¾    Competitive advantage includes dominant local scale, customer loyalty and strong brands		Company characteristics ¾    Early stage businesses with vast growth opportunity ¾    Innovators attacking existing profit pools or creating new markets		Company characteristics ¾    Subject to macroeconomic and capital cycles with significant structural growth prospects ¾    Strong management teams highly skilled at capital allocation
Highest conviction holdings c.2.0% each Total: 45.2%	Microsoft	3.6	Amazon.com	3.5	Martin Marietta Materials	3.8
	Meta Platforms	3.5	The Schiehallion Fund	2.6	Ryanair	2.8
	Elevance Health	3.4	Reliance Industries	2.4	CRH	2.7
	Moody's	2.6	Prosus	2.2	TSMC	2.3
	Service Corporation International	2.3	NVIDIA	1.7
	Mastercard	2.1	DoorDash	1.6
	Alphabet	2.1
Average sized holdings c.1.0% each Total: 36.4%	Analog Devices	1.3	The Trade Desk	1.2	Royalty Pharma	1.1
	Arthur J. Gallagher	1.2	Novo Nordisk	1.1	Atlas Copco	1.0
	Pernod Ricard	1.2	Cloudflare	1.0	BHP Group	1.0
	AIA	1.1	Shopify	1.0	Advanced Drainage Systems	1.0
	Olympus	1.0	Block	1.0	Eaton	1.0
	Texas Instruments	0.9	HDFC	1.0	Richemont	0.9
	S&P Global	0.9	MercadoLibre	1.0	Samsung Electronics	0.9
	UnitedHealth	0.9	Spotify	0.9	Markel	0.8
	Thermo Fisher Scientific	0.8	Schibsted	0.9	Entegris	0.8
			Alnylam Pharmaceuticals	0.8	CoStar	0.8
			Moderna	0.7	CATL	0.8
			Netflix	0.7	CBRE Group	0.8
			Coupang	0.7	SiteOne Landscape Supply	0.7
			Alibaba	0.7	SMC	0.7
			B3 Group	0.7	ASM International	0.7
					Comfort Systems USA	0.7
Incubator Holdings c.0.5% each Total: 18.4%	Walt Disney	0.6	ByteDance	0.6	Epiroc	0.6
	Shiseido	0.5	Sea Limited	0.5	Nexans	0.6
	Advanced Micro Devices	0.5	PDD Holdings	0.5	Floor & Décor Holdings	0.5
	LVMH	0.5	Stripe	0.5	Albemarle	0.5
	Sysmex	0.5	Mobileye	0.5	Nippon Paint	0.5
	Topicus.com	0.5	Epic Games	0.4	Pool Corporation	0.5
	Adobe Systems	0.4	ICICI Prudential Life Insurance	0.4	YETI Holdings	0.4
	Chewy	0.4	Datadog	0.4	Bellway	0.4
	Stella-Jones	0.4	Adevinta Asa	0.4	Brunswick Corp	0.4
	Certara	0.3	Genmab	0.4	Rakuten	0.4
	Neogen Corp	0.3	Li Auto	0.3	Ashtead Group	0.4
	Sartorius Stedim Biotech	0.3	Adyen	0.3	Sands China	0.4
	Hoshizaki Corp	0.3	Space Exploration Technologies	0.3	Woodside Energy Group	0.2
			CyberAgent	0.3	Silk Invest Africa Food Fund	0.1
			Tesla	0.3	Sberbank of Russia	-
			Lemonade	0.3
			Staar Surgical	0.2
			Ant International	0.2
			BIG Technologies	0.2
			AeroVironment	<0.1
			Illumina CVR	<0.1
			Abiomed CVR	-

*      Excludes net liquid assets.

Portfolio positioning as at 30 April 2024*

Geographical*

	At 30 April 2024 %	At 30 April 2023 %
North America	57.4	52.4
Continental Europe	17.7	16.3
Emerging Markets	12.6	10.9
Japan	4.2	5.2
United Kingdom	3.6	8.6
Developed Asia	3.2	4.9
Net liquid assets†	1.3	1.7
Total assets†	100.0	100.0

Sectoral*

		At 30 April 2024 %	At 30 April 2023 %
Technology		28.5	21.6
Consumer discretionary		20.3	22.4
Industrials		18.2	13.3
Healthcare		11.8	12.5
Financials		11.7	17.8
Energy		2.6	2.6
Basic materials		1.9	4.0
Real estate		1.6	1.8
Consumer staples		1.2	2.3
Telecommunications		0.9	-
Net liquid assets†		1.3	1.7
Total assets†		100.0	100.0

* Expressed as a percentage of total assets.

^†For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

List of Investments at 30 April 2024

Name	Business	Value £'000	% of total assets*
Martin Marietta Materials	Cement and aggregates manufacturer	106,974	3.7
Microsoft	Software and cloud computing	102,564	3.6
Meta Platforms	Social networking website	99,850	3.5
Amazon.com	Online retailer and cloud computing platform	98,576	3.4
Elevance Health	Healthcare insurer	97,183	3.4
Ryanair	Low cost European airline	79,927	2.8
CRH	Diversified building materials	78,023	2.7
The Schiehallion Fund #	Global unlisted growth equity investment company	73,796	2.6
Moody's	Credit rating agency	72,668	2.5
Reliance Industries	Indian energy conglomerate	69,172	2.4
TSMC	Semiconductor manufacturer	65,975	2.3
Service Corporation International	Funeral and crematoria services	65,691	2.3
Prosus	Media and ecommerce	61,462	2.1
Mastercard	Electronic payments network and related services	60,789	2.1
Alphabet	Online search engine	59,533	2.1
NVIDIA †	Graphics processing, gaming, AI technology	49,131	1.7
DoorDash	Online commerce platform	45,626	1.6
Analog Devices	Integrated circuits	37,576	1.3
Arthur J. Gallagher	Insurance broker	33,600	1.2
Pernod Ricard	Global spirits manufacturer	33,392	1.2
The Trade Desk	Advertising technology	32,887	1.1
AIA	Asian life insurer	30,975	1.1
Novo Nordisk †	Diabetes and weight loss treatment	30,953	1.1
Royalty Pharma	Biopharmaceutical royalties portfolio	30,491	1.1
Olympus	Optoelectronic products	29,854	1.0
Cloudflare	Cloud based IT services	29,854	1.0
Shopify	Online commerce platform	29,783	1.0
Atlas Copco	Industrial equipment	29,717	1.0
Block †	Financial technology	29,085	1.0
HDFC	Indian mortgage provider	28,106	1.0
BHP Group	Mineral exploration and production	27,910	1.0
MercadoLibre	Latin American ecommerce platform	27,844	1.0
Advanced Drainage Systems	Manufacturer of pipes and drainage systems	27,182	0.9
Eaton	Industrial engineering products	27,067	0.9
Texas Instruments †	Semiconductors	26,922	0.9
Richemont	Luxury goods	26,916	0.9
Spotify	Online music streaming service	26,692	0.9
S&P Global	Credit rating agency	25,550	0.9
UnitedHealth †	Healthcare	25,232	0.9
Samsung Electronics †	Multinational technology producer	25,048	0.9
Schibsted	Media and classified advertising platforms	24,222	0.8
Markel	Markets and underwrites speciality insurance products	23,974	0.8
Entegris	Supplier of materials to high-tech industries	23,533	0.8
CoStar	Commercial property portal	23,339	0.8
Thermo Fisher Scientific	Scientific instruments, consumables and chemicals	22,744	0.8
CATL †	Battery manufacturer	22,310	0.8
Alnylam Pharmaceuticals	RNA interference based biotechnology	22,126	0.8
CBRE Group	Commercial real estate	22,026	0.8
Moderna	Drug discovery using mRNA technology	20,781	0.7
Netflix	Subscription service for TV shows and movies	20,488	0.7
SiteOne Landscape Supply	US distributor of landscaping supplies	20,313	0.7
SMC	Factory automation equipment	20,176	0.7
Coupang	South Korean ecommerce	19,922	0.7
ASM International	Vapour deposition technology for semiconductors	19,918	0.7
Alibaba	Ecommerce	19,274	0.7
B3 Group	Brazilian stock exchange operator	18,954	0.7
Comfort Systems USA †	HVAC systems and solutions	18,794	0.6
ByteDance U	Online content platform including TikTok	18,249	0.6
Walt Disney †	Media and theme parks	17,602	0.6
Epiroc	Construction and mining machinery	17,410	0.6
Nexans	Manufacturer of cables and electrical parts	16,869	0.6
Shiseido	Japanese cosmetics manufacturer	15,335	0.5
Floor & Décor Holdings	Speciality retailer	14,601	0.5
Albemarle	Lithium miner	14,408	0.5
Nippon Paint †	Japanese paint manufacturer	14,273	0.5
Sea Limited	Online and digital gaming	14,268	0.5
Advanced Micro Devices †	Semiconductors	13,772	0.5
PDD Holdings †	Chinese real estate development	13,758	0.5
LVMH †	Luxury goods	13,506	0.5
Sysmex	Medical testing equipment	13,500	0.5
Topicus.com	Vertical market software and solutions	13,310	0.5
Pool Corporation	Swimming pool supplies	13,296	0.5
Stripe U	Payments platform	13,093	0.4
Mobileye †	Advanced driver assistance systems (ADAS) and autonomous driving technologies	12,922	0.4
Epic Games U	Gaming software developer	12,688	0.4
YETI Holdings †	Outdoor lifestyle products	12,630	0.4
Bellway	Home construction	12,441	0.4
Adobe Systems	Software products and technologies	12,418	0.4
ICICI Prudential Life Insurance	Life insurance services	12,248	0.4
Datadog	Cloud based IT system monitoring application	12,223	0.4
Brunswick Corp †	Recreational boats, marine engines, marine parts and accessories	12,099	0.4
Rakuten †	Online retail and financial services	11,966	0.4
Chewy	Online pet supplies retailer	11,691	0.4
Ashtead Group	Industrial equipment rental	11,684	0.4
Sands China	Macau casino operator	11,410	0.4
Adevinta Asa	Media and classified advertising platforms	11,346	0.4
Genmab	Biotechnology	11,332	0.4
Stella-Jones †	Industrial pressure treated wood products manufacturer	10,461	0.4
Li Auto	Chinese EV manufacturer	9,929	0.3
Certara	Drug discovery and development	9,306	0.3
Neogen Corp †	Food and animal safety products and services	9,260	0.3
Sartorius Stedim Biotech †	Biotechnology, specialised equipment for research	8,691	0.3
Adyen	Digital payments	8,666	0.3
Space Exploration Technologies U	Space rockets and satellites	7,747	0.3
Hoshizaki Corp	Commercial kitchen equipment manufacturer	7,525	0.3
CyberAgent	Japanese internet advertising and content	7,470	0.3
Tesla	Electric cars and renewable energy solutions	7,311	0.2
Lemonade	Data and insurance	7,142	0.2
Staar Surgical	Implantable contact lenses	6,206	0.2
Woodside Energy Group	Australian gas and oil	5,484	0.2
Ant International U	Chinese online payments and financial services business	4,551	0.2
BIG Technologies	Electronic monitoring solutions	4,485	0.2
Silk Invest Africa Food Fund U	Africa focused private equity fund	2,452	0.1
AeroVironment †	Small unmanned aircraft and tactical missile systems	1,233	<0.1
Illumina CVR U	Gene sequencing business	331	<0.1
Sberbank of Russia ꟊ	Russian commercial bank	-	-
Abiomed CVR	Medical implant manufacturer	-	-
Total investments		2,847,068	98.7
Net liquid assets*		37,245	1.3
Total assets*		2,884,313	100.0
Borrowings (at book value)		(223,176)	(7.7)
Shareholders' funds		2,661,137	92.3

	Listed equities %	Schiehallion Fund # %	Unlisted                 securities ‡                 %	Net liquid assets* %	Total assets* %
30 April 2024	94.1	2.6	2.0	1.3	100.0
30 April 2023	94.4	2.0	1.9	1.7	100.0

*      For a definition of terms used see Glossary of terms and Alternative Performance Measures at the end of this announcement.

^U     Denotes unlisted (private company) investment.

†     New purchase during the period. Complete sales during the period were: Bytes Technology Group, Farfetch, Jet2, Midwich, On the Beach, Persimmon, Prudential, Redrow, Rio   Tinto, Team 17 Group, Wizz Air Holdings, adidas, Deutsche Boerse, Axon Enterprise, Booking Holdings, Broadridge Financial Solutions, Bumble, Charles Schwab, Estée Lauder, Exact Sciences, Howard Hughes, Illumina, Novocure, Snowflake, Teradyne, Wayfair, DENSO, Meituan, Ping An Insurance.

#      The Schiehallion Fund is managed by Baillie Gifford. The Company's holdings in The Schiehallion Fund are excluded from its assets when calculating the management fee.

See note 3 to the Financial Statements.

ꟊ     Denotes suspended investment.

‡     Includes holdings in preference shares, ordinary shares and contingent value rights (CVR).

Baillie Gifford - valuing private companies

We aim to hold our private company investments at 'fair value' i.e. the price that would be paid in an open-market transaction. Valuations are adjusted both during regular valuation cycles and on an ad hoc basis in response to 'trigger events'. Our valuation process ensures that private companies are valued in both a fair and timely manner.

The valuation process is overseen by a valuations committee at Baillie Gifford which takes advice from an independent third party (S&P Global). The portfolio managers feed into the process, but the valuations committee owns the process and the portfolio managers only receive final valuation notifications once they have been applied.

We revalue the private holdings on a three-month rolling cycle, with one-third of the holdings reassessed each month. For investment trusts, the prices are also reviewed twice per year by the respective investment trust boards and are subject to the scrutiny of external auditors in the annual audit process.

Beyond the regular cycle, the valuations team also monitors the portfolio for certain 'trigger events'. These may include: changes in fundamentals; a takeover approach; an intention to carry out an IPO; or changes to the valuation of comparable public companies. The valuations team also monitors relevant market indices on a weekly basis and updates valuations in a manner consistent with our external valuer's (S&P Global) most recent valuation report where appropriate. When market volatility is particularly pronounced the team do these checks daily. Any ad hoc change to the fair valuation of any holding is implemented swiftly and reflected in the next published net asset value.

In addition to the 2.0% of the portfolio holdings in direct private company investments, 2.6% of the portfolio is in The Schiehallion Fund, a closed ended investment company investing predominantly in private companies, which is valued by reference to its publicly available market price.

Income Statement

For the year ended 30 April

	Notes	2024 Revenue £'000	2024 Capital £'000	2024 Total £'000	2023 Revenue £'000	2023 Capital £'000	2023 Total £'000
Gains/(losses) on investments		-	389,428	389,428	-	(78,421)	(78,421)
Currency gains		-	1,419	1,419	-	293	293
Income	2	29,888	-	29,888	30,211	-	30,211
Investment management fee	3	(9,431)	-	(9,431)	(8,878)	-	(8,878)
Other administrative expenses		(1,850)	-	(1,850)	(1,833)	-	(1,833)
Net return before finance costs and taxation		18,607	390,847	409,454	19,500	(78,128)	(58,628)
Finance costs of borrowings		(8,264)	-	(8,264)	(7,225)	-	(7,225)
Net return on ordinary activities before taxation		10,343	390,847	401,190	12,275	(78,128)	(65,853)
Tax on ordinary activities		(2,102)	(736)	(2,838)	(1,561)	(430)	(1,991)
Net return on ordinary activities after taxation		8,241	390,111	398,352	10,714	(78,558)	(67,844)
Net return per ordinary share	4	3.68p	174.07p	177.75p	4.70p	(34.47p)	(29.77p)
Note: Dividends per share paid and payable in respect of the year	5	2.10p			3.15p

The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital return 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 the Company does not have any other comprehensive income and the net return on ordinary activities after taxation is both the profit and total comprehensive income for the period.

Balance Sheet

As at 30 April

	Notes	2024 £'000	2024 £'000	2023 £'000	2023 £'000
Fixed assets
Investments held at fair value through profit or loss	6		2,847,068		2,574,408
Current assets
Debtors		12,506		20,441
Cash and cash equivalents		38,622		42,191
		51,128		62,632
Creditors
Amounts falling due within one year	7	(61,987)		(93,142)
Net current liabilities			(10,859)		(30,510)
Total assets less current liabilities			2,836,209		2,543,898
Creditors
Amounts falling due after more than one year:
Loan notes	7	(173,176)		(99,858)
Provision for tax liability	7	(1,896)		(1,160)
			(175,072)		(101,018)
Net assets			2,661,137		2,442,880
Capital and reserves
Share capital	8		12,659		12,659
Share premium account	8		433,714		433,714
Capital redemption reserve			8,700		8,700
Capital reserve	8		2,132,609		1,915,385
Revenue reserve			73,455		72,422
Shareholders' funds			2,661,137		2,442,880
Shareholders' funds per ordinary share (borrowings at book value)			1,242.8p		1,058.5p

*      See Glossary of terms and Alternative Performance Measures at the end of this announcement.

The accompanying notes on the following pages are an integral part of the Financial Statements

Statement of Changes in Equity

For the year ended 30 April 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 May 2023		12,659	433,714	8,700	1,915,385	72,422	2,442,880
Net return on ordinary activities after taxation		-	-	-	390,111	8,241	398,352
Ordinary shares bought back	8	-	-	-	(172,887)	-	(172,887)
Dividends paid during the year	5	-	-	-	-	(7,208)	(7,208)
Shareholders' funds at 30 April 2024		12,659	433,714	8,700	2,132,609	73,455	2,661,137

For the year ended 30 April 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 May 2022		11,823	262,183	8,700	2,129,483	66,975	2,479,164
Net return on ordinary activities after taxation		-	-	-	(78,558)	10,714	(67,844)
Ordinary shares bought back	8	-	-	-	(135,221)	-	(135,221)
Ordinary shares issued	8	836	171,531	-	(319)	-	172,048
Dividends paid during the year	5	-	-	-	-	(5,267)	(5,267)
Shareholders' funds at 30 April 2023		12,659	433,714	8,700	1,915,385	72,422	2,442,880

*      The Capital Reserve balance at 30 April 2024 includes holding gains on investments of £1,003,962,000 (30 April 2023 - gains of £660,579,000).

The accompanying notes on the following pages are an integral part of the Financial Statements.

Cash Flow Statement

For the year ended 30 April

	Notes	2024 £'000	2024 £'000	2023 £'000	2023 £'000
Cash flows from operating activities
Net return on ordinary activities before taxation			401,190		(65,853)
Adjustments to reconcile company profit before tax to net cash flow from operating activities
Net (gains)/losses on investments			(389,428)		78,421
Currency gains			(1,419)		(293)
Finance costs of borrowings			8,264		7,225
Other capital movements
Decrease/(increase) in accrued income			1,586		(70)
Increase in debtors			(450)		(513)
Increase/(decrease) in creditors			476		(357)
Taxation
Overseas tax incurred			(2,074)		(1,575)
Cash from operations*			18,145		16,985
Interest paid			(7,468)		(7,402)
Net cash inflow from operating activities			10,677		9,583
Cash flows from investing activities
Acquisitions of investments		(467,866)		(255,559)
Disposals of investments		586,578		361,027
Net cash inflow from investing activities			118,712		105,468
Cash flows from financing activities
Equity dividends paid	5	(7,208)		(5,267)
Ordinary shares bought back and stamp duty thereon	8	(175,482)		(135,014)
Ordinary shares issued	8	-		71,249
Loan notes issued		74,388		-
Debenture repaid		-		(40,000)
Borrowings repaid		(25,000)		-
Net cash outflow from financing activities			(133,302)		(109,032)
(Decrease)/increase in cash and cash equivalents			(3,913)		6,019
Exchange movements			344		293
Cash and cash equivalents at 1 May			42,191		35,879
Cash and cash equivalents at 30 April			38,622		42,191

*      Cash from operations includes dividends received of £29,805,000 (2023 - £29,285,000) and interest received of £1,669,000 (2023 - £856,000).

The accompanying notes are an integral part of the Financial Statements.

Notes to the Financial Statements

1.    The Financial Statements for the year to 30 April 2024 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' on the basis of the accounting policies set out below which are unchanged from the prior year and have been applied consistently. The updates to FRS 102, applicable for financial years starting on or after 1 January 2025, have been reviewed, but none of the updates is currently expected to impact the policies below or the financial statements prepared in accordance with them.

2.    Income

	2024 £'000	2023 £'000
Income from investments
UK dividends	3,309	4,688
Overseas dividends	24,910	24,667
	28,219	29,355
Other income
Deposit interest	1,669	856
Total income	29,888	30,211
Total income comprises:
Dividends from financial assets classified as at fair value through profit or loss	28,219	29,355
Interest from financial assets not at fair value through profit or loss	1,669	856
	29,888	30,211

Special dividend entitlements arising in the year amounted to £1,069,000 (2023 - £492,000).

3.   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 portfolio 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 (Hong Kong) Limited. The annual management fee payable to Baillie Gifford & Co Limited is 0.45% on the first £750 million of total assets, 0.33% on the next £1 billion of total assets and 0.30% on the remaining total assets. For fee purposes, total assets is defined as the total value of all assets held less all liabilities (other than any liability in the form of debt intended for investment purposes) and excludes the value of the Company's holding in The Schiehallion Fund, a closed-ended investment company managed by Baillie Gifford & Co. The Company does not currently hold any other collective investment vehicles managed by Baillie Gifford & Co. Where the Company holds investments in open-ended collective investment vehicles managed by Baillie Gifford, such as OEICs, Monks' share of any fees charged within that vehicle will be rebated to the Company. All debt drawn down during the periods under review is intended for investment purposes. For the quarters to 31 January 2023 and 30 April 2023, the assets subject to management fee excluded the £173 million rolled into the Company from The Independent Investment Trust PLC in accordance with the terms of the transaction.

4.    Net Return Per Ordinary Share

	2024 Revenue	2024 Capital	2024 Total	2023 Revenue	2023 Capital	2023 Total
Net return after taxation	3.68p	174.07p	177.75p	4.70p	(34.47p)	(29.77p)

Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £8,241,000 (2023 - £10,714,000) and on 224,114,021 (2023 - 227,887,889) ordinary shares, 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 £390,111,000 (2023 - loss of £78,558,000) and on 224,114,021 (2023 - 227,887,889) 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.

5.    Ordinary Dividends

	2024	2023	2024 £'000	2023 £'000
Amounts recognised as distributions in the year:
Previous year's final (paid 13 September 2023)	3.15p	2.35p	7,208	5,267

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 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £8,241,000 (2023 - £10,714,000).

	2024	2023	2024 £'000	2023 £'000
Amounts paid and payable in respect of the financial year
Proposed final (payable 17 September 2024)	2.10p	3.15p	4,497	7,208

If approved, the recommended final dividend on the ordinary shares will be paid on 17 September 2024 to shareholders on the register at the close of business on 9 August 2024. The ex-dividend date is 8 August 2024. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 27 August 2024.

6.    Fixed Assets - Investments

As at 30 April 2024	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Listed and suspended equities	2,714,161	73,796	-	2,787,957
Unlisted securities	-	-	59,111	59,111
Total financial asset investments	2,714,161	73,796	59,111	2,847,068

As at 30 April 2023	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Listed and suspended equities	2,466,713	53,277	-	2,519,990
Unlisted securities	-	-	54,418	54,418
Total financial asset investments	2,466,713	53,277	54,418	2,574,408

Investments in securities are financial assets held at fair value through profit or loss. In accordance with Financial Reporting Standard 102, 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.

Level 2 investments comprise the Company's holding in The Schiehallion Fund. The suspended investment in Sberbank of Russia has been valued at nil.

The fair value hierarchy used to analyse the basis on which the fair values of financial instruments held at fair value through the profit and loss account are measured is described below. Fair value measurements are categorised on the basis of the lowest level input that is significant to the fair value measurement.

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).

Private Company Investments

Private company investments are valued at fair value by the Directors following a detailed review and appropriate challenge of the valuations proposed by the Managers. The Managers' private company investment policy applies techniques consistent with the International Private Equity and Venture Capital Valuation Guidelines 2022 ('IPEV'). The techniques applied are predominantly market-based approaches. The market-based approaches available under IPEV are set out below and are followed by an explanation of how they are applied to the Company's private company portfolio:

¾    Multiples;

¾    Industry Valuation Benchmarks; and

¾    Available Market Prices.

The nature of the private company portfolio currently will influence the valuation technique applied. The valuation approach recognises that, as stated in the IPEV Guidelines, the price of a recent investment, if resulting from an orderly transaction, generally represents fair value as at the transaction date and may be an appropriate starting point for estimating fair value at subsequent measurement dates. However, consideration is given to the facts and circumstances as at the subsequent measurement date, including changes in the market or performance of the investee company. Milestone analysis is used where appropriate to incorporate the operational progress of the investee company into the valuation. Additionally, the background to the transaction must be considered. As a result, various multiples-based techniques are employed to assess the valuations particularly in those companies with established revenues. Discounted cashflows are used where appropriate. An absence of relevant industry peers may preclude the application of the Industry Valuation Benchmarks technique and an absence of observable prices may preclude the Available Market Prices approach. All valuations are cross-checked for reasonableness by employing relevant alternative techniques.

The private company investments are valued according to a three monthly cycle of measurement dates. The fair value of the private company investments will be reviewed before the next scheduled three monthly measurement date on the following occasions:

¾    at the year end and half year end of the Company; and

¾    where there is an indication of a change in fair value as defined in the IPEV guidelines (commonly referred to as 'trigger' events).

7.      Creditors and Provisions include the following:

Borrowing facilities

At 30 April 2024 the Company had a 3 year £150 million unsecured floating rate revolving facility with National Australia Bank Limited, which expires on 29 November 2024.

At 30 April 2024 drawings were as follows:

¾    National Australia Bank Limited: £50 million at an interest rate of 1.4% over SONIA, maturing in October 2024 (2023 - £75 million at an interest rate of 1.4% over SONIA, maturing in September 2023).

The main covenants relating to the above loans are that total borrowings shall not exceed 30% of the Company's adjusted net asset value and the Company's minimum adjusted net asset value shall be £650 million.

There were no breaches of loan covenants during the year to 30 April 2024 (2023 - none).

Unsecured Loan Notes

The unsecured loan notes are stated at the cumulative amount of net proceeds after issue expenses. The cumulative effect is to reduce the carrying amount of borrowings by £137,000 (2023 - £142,000).

Provision for Tax Liability

The tax liability provision at 30 April 2024 of £1,896,000 (30 April 2023 - £1,160,000) relates to a potential liability for Indian capital gains tax that may arise on the Company's Indian investments should they be sold in the future, based on the net unrealised taxable capital gains at the period end and on enacted Indian tax rates. The amount of any future tax amounts payable may differ from this provision, depending on the value and timing of any future sales of such investments and future Indian tax rates.

	Repayment date	Nominal rate	Effective rate	2024 £'000	2023 £'000
£60 million 1.86% notes 2054	7/8/2054	1.86%	1.86%	59,907	59,904
£40 million 1.77% notes 2045	7/8/2045	1.77%	1.77%	39,956	39,954
¥2,500 million 2.17% notes 2037	12/12/2037	2.17%	2.17%	12,687	-
€18 million 4.55% notes 2035	12/12/2035	4.55%	4.55%	15,370	-
€35 million 4.29% notes 2033	12/12/2033	4.29%	4.29%	29,886	-
€18 million 4.30% notes 2030	12/12/2030	4.30%	4.30%	15,370	-
				173,176	99,858
Provision for liability in respect of Indian capital gains tax				1,896	1,160
				175,072	101,018

8.    Share Capital

	2024 Number	2024 £'000	2023 Number	2023 £'000
Allotted, called up and fully paid ordinary shares of 5p each	214,130,666	10,707	230,796,666	11,540
Treasury shares of 5p each	39,040,794	1,952	22,374,794	1,119
Total	253,171,460	12,659	253,171,460	12,659

The Company's authority permits it to hold shares bought back 'in treasury'. Such treasury shares may be subsequently either sold for cash (at, or at a premium to, net asset value per ordinary share) or cancelled. In the year to 30 April 2024, 16,666,000 shares with a nominal value of £833,000 were bought back at a total cost of £172,887,000 to be held in treasury (2023 - 13,566,244 ordinary shares with a nominal value of £678,000 were bought back at a total cost of £135,221,000 and held in treasury). No shares were issued from treasury during the year and at 30 April 2024 39,040,794 (2023 - 22,374,794) shares were held in treasury. At 30 April 2024 the Company had authority to buy back 21,178,652 ordinary shares and to allot or sell from treasury 22,988,666 ordinary shares without application of pre-emption rights. Under the provisions of the Company's Articles of Association share buy-backs are funded from the capital reserve. In the period 1 May 2024 to 26 June 2024 the Company bought back a further 3,515,000 shares with a nominal value of £176,000 at a total cost of £41,447,000 to be held in treasury. At 26 June 2024 42,555,794 shares were held in treasury and the Company had authority remaining to buy back a further 17,663,652 ordinary shares.

9.      The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 April 2024 or 2023 but is derived from those accounts. Statutory accounts for 2023 have been delivered to the Registrar of Companies and those for 2024 will be delivered in due course. The auditor has reported on these accounts; the reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

10.    Transactions with Related Parties and the Managers and Secretaries

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.

Details of the management fee arrangements are included in note 3 above.

11.    The Annual Report and Financial Statements will be available on the Managers' website www.monksinvestmenttrust.co.uk^‡ on or around 16 July 2024.

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

Glossary of terms and Alternative Performance Measures (APM)

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).

Shareholders' funds

Shareholders' funds is the value of all assets held less all liabilities, with borrowings deducted at book cost.

Net liquid assets

Net liquid assets comprise current assets less current liabilities (excluding borrowings) and provisions.

Active share (APM)

Active share, a measure of how actively a portfolio is managed, is the percentage of the 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.

Unlisted, Unquoted and Private Company Investments

'Unlisted', 'Unquoted' and 'Private Company' investments are investments in securities not traded on a recognised exchange.

Net Asset Value (APM)

Net Asset Value (NAV) is the value of all assets held less all liabilities, with borrowings deducted at either par value or fair value as described below. Per share amounts are calculated by dividing the relevant figure by the number of ordinary shares in issue.

Net Asset Value (borrowings at Par Value) (APM)

Borrowings are valued at nominal par value. A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at par value is provided below.

	2024 £'000	2024 per share	2023 £'000	2023 per share
Shareholders' funds (borrowings at book value)	2,661,137	1,242.8p	2,442,880	1,058.5p
Add: book value of borrowings	223,176	104.2p	174,858	75.8p
Less: par value of borrowings	(223,313)	(104.3p)	(175,000)	(75.8p)
Net asset value (borrowings at par value)	2,661,000	1,242.7p	2,442,738	1,058.5p

The per share figures above are based on 214,130,666 (2023 - 230,796,666) ordinary shares of 5p, being the number of ordinary shares in issue at the year end excluding treasury shares.

Net Asset Value (borrowings at Fair Value) (APM)

Borrowings are valued at an estimate of market worth. The fair values of the loan notes are calculated using a comparable debt approach, by reference to a basket of corporate debt. The fair value of the Company's short term bank borrowings is equivalent to its book value.

A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at fair value is provided below.

	2024 £'000	2024 per share	2023 £'000	2023 per share
Shareholders' funds (borrowings at book value)	2,661,137	1,242.8p	2,442,880	1,058.5p
Add: book value of borrowings	223,176	104.2p	174,858	75.8p
Less: fair value of borrowings	(173,210)	(80.9p)	(125,404)	(54.3p)
Net asset value (borrowings at fair value)	2,711,103	1,266.1p	2,492,334	1,080.0p

The per share figures above are based on 214,130,666 (2023 - 230,796,666) ordinary shares of 5p, being the number of ordinary shares in issue at the year end excluding treasury shares.

Discount/premium (APM)

As stock markets 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 NAV per share from the share price 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	2023
Closing NAV per share (borrowings at par)	a	1,242.7p	1,058.5p
Closing NAV per share (borrowings at fair value)	b	1,266.1p	1,080.0p
Closing share price	c	1,158.0p	975.0p
Discount to NAV with borrowings at par	(c-a) ÷ a	(6.8%)	(7.9%)
Discount to NAV with borrowings at fair value	(c-b) ÷ b	(8.5%)	(9.7%)

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, as detailed below.

		2024 NAV (par)	2024 NAV (fair)	2024 Share price	2023 NAV (par)	2023 NAV (fair)	2023 Share price
Closing NAV per share/share price	a	1,242.7p	1,266.1p	1,158.0p	1,058.5p	1,080.0p	975.0p
Dividend adjustment factor*	b	1.0028	1.0028	1.0031	1.0021	1.0021	1.0023
Adjusted closing NAV per share/share price	c = a x b	1,246.2p	1,269.6p	1,161.6p	1,060.7p	1,082.3p	977.3p
Opening NAV per share/share price	d	1,058.5p	1,080.0p	975.0p	1,089.0p	1,099.8p	1,051.0p
Total return	(c ÷ d)-1	17.7%	17.6%	19.1%	(2.6%)	(1.6%)	(7.0%)

*       The dividend adjustment factor is calculated on the assumption that the dividend of 3.15p (2023 - 2.35p) paid by the Company during the year was reinvested into shares of the Company at the cum income NAV/share price, as appropriate, at the ex-dividend date.

Ongoing charges (APM)

The total expenses (excluding dealing and borrowing costs) incurred by the Company as a percentage of the daily average net asset value (with borrowings at fair value), as detailed below.

		2024	2023
Investment management fee		£9,431,000	£8,878,000
Other administrative expenses		£1,850,000	£1,833,000
Total expenses	a	£11,281,000	£10,711,000
Average net asset value (with borrowings deducted at fair value)	b	£2,589,210,000	£2,480,229,000
Ongoing charges	a ÷ b	0.44%	0.43%

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. The level of gearing can be adjusted through the use of derivatives which affect the sensitivity of the value of the portfolio to changes in the level of markets.

Gross gearing, also referred to as potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds (a ÷ c in the table below).

Net gearing, also referred to as invested or equity gearing is borrowings at book value less cash and cash equivalents (any certificates of deposit are not deducted) and brokers' balances expressed as a percentage of shareholders' funds (b ÷ c in the table below)*.

Effective equity gearing, as defined by the Board and Managers of Monks, is the Company's borrowings at par less cash, brokers' balances and investment grade bonds maturing within one year, expressed as a percentage of shareholders' funds*.

*        As adjusted to take into account the gearing impact of any derivative holdings.

		2024	2023
Borrowings (at book cost)	a	£223,176,000	£174,858,000
Less: cash and cash equivalents		(£38,622,000)	(£42,191,000)
Less: sales for subsequent settlement		(£9,749,000)	(£16,520,000)
Add: purchases for subsequent settlement		£7,086,000	£14,456,000
Adjusted borrowings	b	£181,891,000	£130,693,000
Shareholders' funds	c	£2,661,137,000	£2,442,880,000
Gross (potential) gearing	a ÷ c	8.4%	7.2%
Net (equity) gearing	b ÷ c	6.8%	5.3%

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.

Compound annual return (APM)

The compound annual return converts the return over a period of longer than one year to a constant annual rate of return applied to the compounded value at the start of each year.

Treasury shares

The Company has the authority to make market purchases of its ordinary shares for retention as treasury shares for future reissue, resale, transfer, or for cancellation. Treasury shares do not receive distributions and the Company is not entitled to exercise the voting rights attaching to them.

Turnover (APM)

Turnover is a measure of portfolio change or trading activity. Monthly turnover is calculated as the minimum of purchases and sales in a month, divided by the average market value of the fund. Monthly numbers are added together to get the rolling 12 month turnover data.

Contingent value rights

'CVR' after an instrument name indicates a security, usually arising from a corporate action such as a takeover or merger, which represents a right to receive potential future value, should the continuing company achieve certain milestones. The Illumina CVR was received on Illumina's takeover of the Company's private company investment in GRAIL and the Abiomed CVR arose on Johnson & Johnson's takeover of Abiomed. In both cases the milestones relate to the performance of the technologies acquired through those takeovers. Any values attributed to these holdings reflect both the amount of the future value potentially receivable and the probability of the milestones being met within the time frames in the CVR agreement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

‡          Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

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

London Stock Exchange Group plc and its group undertakings (collectively, the 'LSE Group'). © LSE Group 2024. 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. All rights 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.

Sustainable Finance Disclosure Regulation ('SFDR')

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 The Monks Investment Trust PLC 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 stewardship 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 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.

More detail on the Manager's approach to sustainability can be found in the stewardship principles and guidelines document, available publicly on the Baillie Gifford website bailliegifford.com.

The underlying investments do not take into account the EU criteria for environmentally sustainable economic activities established under the EU Taxonomy Regulation.

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