Scottish Mortgage Inv Trust Half-year Report

RNS Number : 0636G

Scottish Mortgage Inv Tst PLC

11 November 2022

 

RNS Announcement

Scottish Mortgage Investment Trust PLC

Legal Entity Identifier: 213800G37DCS3Q9IJM38

Results for the six months to 30 September 2022

The following is the unaudited Interim Financial Report for the six months to 30 September 2022 which was approved by the Board on 10 November 2022.

Interim Management Report

Scottish Mortgage's long-term capital appreciation has come from financing and patiently supporting the development of growth companies. The trust was founded to provide capital to businesses with big opportunities but restricted access to funding following the market panic of 1907. It is important at times of stress to remember this founding story: corporate potential has little to do with the cycles of greed and fear in stock markets.

Long-term growth investing is crucial for driving society forward. After a long period of global expansion, it's easy to slip into the mindset that investors passively benefit from broader progress and economic growth. We believe causality flows in the other direction: long-term investment enables growth and progress. Technology and new ways of doing things aren't adopted simply because their time has come. They happen because investors give entrepreneurs the financing and time to build their visions into reality.

Without investment in technology, infrastructure and entrepreneurship, it will be tough to dig ourselves out of our current malaise. If so little of aggregate savings are directed into ventures exploring new technologies and approaches, what does it imply for the future? We risk condemning ourselves to the environment of anaemic growth and stagnant wages that has characterised the United Kingdom over the past decade.

Financing the development of long-term growth companies is not what interests most investors. To understand that, you need only observe the commentary of recent months, focused on 'risk off', deleveraging and the flight to safety. The market's focus has narrowed to a handful of economic variables. Stock prices react dramatically to each monthly update. This environment is off-putting, but it is not relevant to our investment decision-making. Instead, we must evaluate the ongoing position of our holdings, unpicking the growth engines of recent years and verifying that they're still functioning. At the same time, we are redoubling our efforts to find new investments that can adapt to difficult economic conditions and position themselves to do well in the future.

Returns

Over ten years, Scottish Mortgage's net asset value per share with debt at fair value (NAV) has increased by 528% versus a 208% increase in the FTSE All-World index (both in total return terms). Over five years, it has increased by 115% against 53%. Six months of data is always too short a period to infer much that is useful from stock prices. However, since the end of March, our NAV has decreased by 15% compared to a 7% decrease in the index.

Although our focus remains on long-term capital appreciation, we are aware that a small but consistent dividend is of value to many shareholders. The Board is therefore recommending an interim dividend of 1.60p per share, an increase of 5% over last year's payment of 1.52p. We do not believe that this increase will have any bearing on our investment decisions or unduly constrain future capital appreciation.

Portfolio

Moderna, the mRNA therapeutics company, remains our largest holding. It continues to make progress in its infectious disease portfolio with the bivalent booster for Covid but one practical example. It was particularly encouraging to see pharmaceutical company Merck paying Moderna $250m to jointly develop and commercialise a personalised cancer vaccine to treat melanoma. Our contention has always been that Moderna's technology would have applications well beyond Covid, and commercial partners are now committing serious capital to such developments.

Despite the economic headwinds, Tesla has been able to sell every car it can manufacture and continues to scale up its production capabilities rapidly. Its execution in a challenging operating environment has been impressive, as has its ability to control costs whilst growing sales. The Model Y SUV is the crucial volume driver over the next few years, with production ramping in Berlin and Texas. Scaling the battery cells supply chain remains the most significant constraint.

We made a further investment into Northvolt during the period and it is now one of our largest positions. This private European battery producer is looking increasingly well-placed to supply the rapidly growing demand for electric vehicles. We also supported capital raisings from two nascent private companies with ambitious plans to reduce the world's carbon footprint. Swiss company Climeworks is developing a technology for capturing carbon directly from the air, which is likely to be necessary given the finite capacity for re-forestation. Its challenge is to scale up its impact. Upside Foods is seeking to produce animal protein in bioreactors which will allow for meat production without the carbon emissions from rearing and slaughtering animals. It is working with regulators towards product launches.

We have reduced several Chinese holdings, including long-standing investments in Alibaba and Tencent. The regulatory environment in China remains challenging, and we are concerned that ongoing uncertainty will harm the risk-tolerant culture that has driven the long-term success of China's private sector.

Outlook

Powerful forces of change are creating significant opportunities. These include society's transition away from carbon-fuelled transport and energy generation and the application of information technology to our understanding of the molecular basis of disease. While rising interest rates and increasing friction between the United States and China create a problematic environment to navigate, the long-term advantages of companies are often built in periods of stress and capital shortage.

The principal risks and uncertainties facing the Company are set out at the end of this document.

10 November 2022

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

Total return information sourced from Refinitiv/StatPro/Baillie Gifford.

See disclaimer at end of this document.

Past performance is not a guide to future performance.

Responsibility Statement

We confirm that to the best of our knowledge:

a)  the condensed set of Financial Statements has been prepared in accordance with FRS 104 'Interim Financial Reporting';

b)  the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (indication of important events during the first six months, their impact on the condensed set of Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the year); and

c)  the Interim Financial Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

Fiona McBain

Chair

10 November 2022

Income Statement (unaudited)

	For the six months ended  30 September 2022			For the six months ended  30 September 2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
(Losses)/gains on investments	-	(2,368,395)	(2,368,395)	-	2,721,589	2,721,589
Currency losses	-	(176,320)	(176,320)	-	(15,778)	(15,778)
Income from investments and interest receivable	25,904	-	25,904	13,640	-	13,640
Investment management fee (note 3)	-	(18,557)	(18,557)	-	(27,179)	(27,179)
Other administrative expenses	(3,135)	-	(3,135)	(3,644)	-	(3,644)
Net return before finance costs and taxation	22,769	(2,563,272)	(2,540,503)	9,996	2,678,632	2,688,628
Finance costs of borrowings	-	(32,405)	(32,405)	-	(19,526)	(19,526)
Net return on ordinary activities before taxation	22,769	(2,595,677)	(2,572,908)	9,996	2,659,106	2,669,102
Tax on ordinary activities	(2,050)	(471)	(2,521)	(1,281)	(4,905)	(6,186)
Net return on ordinary activities after taxation	20,719	(2,596,148)	(2,575,429)	8,715	2,654,201	2,662,916
Net return per ordinary share (note 4)	1.44p	(180.36p)	(178.92p)	0.62p	187.38p	188.00p
Dividends proposed per ordinary share (note 5)	1.60p			1.52p

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

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 all gains and losses of the Company have been reflected in the above statement.

Balance Sheet (unaudited)

	Notes	At 30 September 2022 £'000	At 30 September 2022 £'000	At 31 March 2022 (audited) £'000	At 31 March 2022 (audited) £'000
Fixed assets
Investments held at fair value through profit or loss	6		14,003,641		16,669,469
Current assets
Debtors		2,948		13,142
Cash and cash equivalents		230,387		229,962
		233,335		243,104
Creditors
Amounts falling due within one year:
Bank loans	7	(403,117)		(502,032)
Buybacks outstanding and related stamp duty		(11,579)		-
Other creditors and accruals		(23,080)		(23,814)
		(437,776)		(525,846)
Net current liabilities			(204,441)		(282,742)
Total assets less current liabilities			13,799,200		16,386,727
Creditors
Amounts falling due after more than one year:
Bank loans	7	(609,074)		(516,384)
Loan notes	7	(1,041,561)		(985,613)
Debenture stocks	7	(127,388)		(127,559)
Provision for deferred tax liability		(1,642)		(1,172)
			(1,779,665)		(1,630,728)
Net assets			12,019,535		14,755,999
Capital and reserves
Share capital			74,239		74,239
Share premium account			928,400		928,400
Capital redemption reserve			19,094		19,094
Capital reserve			10,977,083		13,717,685
Revenue reserve			20,719		16,581
Shareholders' funds			12,019,535		14,755,999
Net asset value per ordinary share
(after deducting borrowings at book)*			841.7p		1,021.8p
Ordinary shares in issue	9		1,428,019,945		1,444,131,650

*  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 (unaudited)

For the six months ended 30 September 2022

	Notes	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital   reserve *   £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 April 2022		74,239	928,400	19,094	13,717,685	16,581	14,755,999
Net return on ordinary activities after taxation		-	-	-	(2,596,148)	20,719	(2,575,429)
Shares bought back	9	-	-	-	(131,171)	-	(131,171)
Dividends paid during the period	5	-	-	-	(13,283)	(16,581)	(29,864)
Shareholders' funds at 30 September 2022		74,239	928,400	19,094	10,977,083	20,719	12,019,535

For the six months ended 30 September 2021

	Notes	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital   reserve *   £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 April 2021		74,239	781,771	19,094	16,105,297	9,069	16,989,470
Net return on ordinary activities after taxation		-	-	-	2,654,201	8,715	2,662,916
Shares bought back	9	-	-	-	(137,732)	-	(137,732)
Shares sold from treasury	9	-	3,175	-	9,038	-	12,213
Dividends paid during the period	5	-	-	-	(18,915)	(9,069)	(27,984)
Shareholders' funds at 30 September 2021		74,239	784,946	19,094	18,611,889	8,715	19,498,883

*  The Capital Reserve balance at 30 September 2022 includes investment holding gains on fixed asset investments of £3,838,304,000 (30 September 2021 - gains of £12,122,474,000).

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

Cash Flow Statement (unaudited)

For the six months ended 30 September

	Notes	2022 £'000	2021 £'000
Cash flows from operating activities
Net return on ordinary activities before taxation		(2,572,908)	2,669,102
Losses/(gains) on investments		2,368,395	(2,721,589)
Currency losses		176,320	15,778
Finance costs of borrowings		32,405	19,526
Overseas capital gains tax incurred		-	(3,335)
Overseas withholding tax incurred		(2,286)	(1,281)
Changes in debtors and creditors		2,964	1,657
Cash from operations		4,890	(20,142)
Interest paid		(31,937)	(18,518)
Net cash outflow from operating activities		(27,047)	(38,660)
Net cash inflow/(outflow) from investing activities		348,800	(172,338)
Equity dividends paid	5	(29,864)	(27,984)
Shares bought back into treasury and stamp duty thereon		(119,592)	(163,149)
Shares sold from treasury		-	-
Bank loans repaid		(1,026,906)	-
Bank loans drawn down and loan notes issued	7	855,034	386,090
Net cash (outflow)/inflow from financing activities		(321,328)	194,957
Increase/(decrease) in cash and cash equivalents		425	(16,041)
Exchange movements		-	2,748
Cash and cash equivalents at start of period		229,962	212,128
Cash and cash equivalents at end of period *		230,387	198,835

*  Cash and cash equivalents represent cash at bank and short term money market deposits repayable on demand.

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

Holding Period of Investments as at 30 September 2022 (unaudited)

More than 5 years			2-5 years			Less than 2 years
Name	% of total assets		Name	% of total assets		Name	% of total assets
Tesla Inc	6.8		Northvolt AB U	3.6		Moderna	6.9
ASML	5.2		Space Exploration   Technologies U	3.2		Adyen	1.3
Illumina 10	4.2					Blockchain.com U	0.8
Meituan p	3.4		MercadoLibre	2.9		Solugen Inc U	0.7
Amazon.com 10	2.9		ByteDance Ltd U	2.5		Redwood Materials Inc U	0.7
Tencent Holdings 10	2.8		NIO Inc p	2.2		Roblox	0.5
Kering 10	2.4		Tempus Labs Inc U	2.0		ChargePoint Holdings Inc	0.5
The Brandtech Group U	2.0		Stripe Inc U	1.9		Blockstream Corporation Inc U	0.5
Ginkgo BioWorks Inc p	1.8		Pinduoduo Inc	1.8		Databricks Inc U	0.5
Wise Plc p	1.7		Snowflake Inc p	1.4		Rappi Inc U	0.5
Delivery Hero	1.6		Epic Games Inc U	1.3		Nuro Inc U	0.5
Ferrari	1.6		Zipline International Inc U	1.1		GoPuff Inc U	0.4
NVIDIA	1.4		Ant International Ltd U	1.0		Salt Pay Co Ltd U	0.4
Denali Therapeutics p	1.2		Recursion   Pharmaceuticals Inc p	0.8		Honor Technology Inc U	0.4
Netflix	1.1					Relativity Space Inc U	0.4
Alibaba Group p 10	0.9		The Production Board U	0.7		Horizon Robotics U	0.4
Spotify Technology SA p	0.8		Carbon Inc U	0.6		Climeworks AG U	0.3
Housing Development   Finance Corporation 10	0.8		Jiangxiaobai Holdings Ltd U	0.5		Capsule Corp U	0.3
			Affirm Holdings Inc p	0.5		10x Genomics	0.3
Zalando	0.7		Zoom	0.5		Workrise Technologies Inc U	0.3
HelloFresh p	0.7		Ocado	0.5		Cloudflare	0.3
Indigo Agriculture Inc U	0.5		Shopify	0.4		DoorDash	0.3
Atlas Copco 10	0.5		Tanium Inc U	0.4		PsiQuantum U	0.1
Vir Biotechnology Inc p	0.5		Bolt Threads Inc U	0.4		Upside Foods Inc U	0.1
Kinnevik	0.4		JRSK Inc (Away) U	0.4		Clear Secure Inc	0.1
Essence Healthcare U	0.4		Convoy Inc U	0.3		Clover Health Investments p	0.1
Thumbtack Inc U	0.3		Uptake Technologies Inc U	0.3		ARCH Ventures Fund XI U	<0.1
Warby Parker Inc p	0.3		Aurora Innovation Inc p	0.3		ARCH Ventures Fund XII U	<0.1
Zocdoc Inc U	0.2		Wayfair	0.3		Antler East Africa Fund I LP U	<0.1
Sinovation Fund III U	0.1		Lilium NV p	0.3		Beam Therapeutics	<0.1
ARCH Ventures Fund IX U	0.1		Heartflow Inc U	0.3
WI Harper Fund VIII U	0.1		KSQ Therapeutics U	0.2
Udacity Inc U	0.1		Sana Biotechnology Inc p	0.2
Innovation Works   Development Fund U 10	0.1		Joby Aviation Inc p	0.2
			Carvana	0.1
WI Harper Fund VII U 10	0.1		ARCH Ventures Fund X   Overage U	0.1
Global AI Opportunities   Fund  10	<0.1
			ARCH Ventures Fund X U	0.1
Rubius Therapeutics Inc p	<0.1		Zymergen Inc p	<0.1
Intarcia Therapeutics U	-
Total	47.7		Total	33.3		Total	17.6

^{U   Denotes unlisted (private company) security.}

^{p  Denotes listed security previously held in the portfolio as an unlisted (private company) security .}

^{10   Denotes security held for more than 10 years.}

^{Net liquid assets represent 1.4% of total assets. See Glossary of Terms and Alternative Performance Measures at the end of this announcement}

List of Investments at 30 September 2022 (unaudited)

Name	Business	Fair value 30 September 2022 £'000	% of total assets	Contribution to absolute performance*   %	Notes†	Fair value 31 March 2022 £'000
Moderna	Clinical stage biotechnology   company	974,886	6.9	(1.1)		1,204,059
Tesla Inc	Electric cars, autonomous   driving and solar energy	971,935	6.8	(1.1)		1,115,783
ASML	Lithography	735,111	5.2	(1.9)		1,080,697
Illumina	Biotechnology equipment	577,118	4.1	(3.0)		1,078,156
Northvolt AB Series E1 Pref. U	Battery developer and   manufacturer, specialised in   lithium-ion technology for   electric vehicles	273,451	1.9	0.3		232,425
Northvolt AB Series E2 Pref. U	Battery developer and   manufacturer, specialised in  lithium-ion technology for   electric vehicles	142,647	1.0	0.2		119,977
Northvolt AB Promissory Note U	Battery developer and   manufacturer, specialised in   lithium-ion technology for   electric vehicles	78,832	0.5	-	New purchase	-
Northvolt AB Series A Ord. U	Battery developer and   manufacturer, specialised in   lithium-ion technology for   electric vehicles	30,660	0.2	-		26,060
Northvolt AB Series D1 Pref. U	Battery developer and   manufacturer, specialised in   lithium-ion technology for   electric vehicles	995	-	-		845
		526,585	3.6	0.5		379,307
Meituan p	Local services aggregator	488,205	3.4	0.8		389,841
Space Exploration   Technologies   Series J Pref. U	Designs, manufactures and launches rockets and spacecraft	202,281	1.4	0.4		144,901
Space Exploration  Technologies   Series N Pref. U	Designs, manufactures and   launches rockets and   spacecraft	162,575	1.1	0.4		116,458
Space Exploration   Technologies   Class A   Common U	Designs, manufactures and   launches rockets and   spacecraft	79,306	0.5	0.2		56,810
Space Exploration    Technologies   Class C   Common U	Designs, manufactures and   launches rockets and   spacecraft	24,461	0.2	0.1		17,523
		468,623	3.2	1.1		335,692
MercadoLibre	Latin American e-commerce   platform	418,298	2.9	(0.5)	Significant addition	333,435
Amazon.com	Online retailer and cloud   computing	409,676	2.9	(0.6)		500,852
Tencent Holdings	Internet services	395,527	2.8	(0.8)	Significant reduction	708,821
ByteDance Ltd   Series E Pref. U	Social media	189,407	1.3	0.2		165,590
ByteDance Ltd   Series E-1 Pref. U	Social media	170,396	1.2	0.2		148,970
		359,803	2.5	0.4		314,560
Kering	Luxury goods producer and   retailer	338,969	2.4	(0.4)		409,853
NIO Inc p	Designs and manufactures   electric and autonomous   vehicles	317,065	2.2	(0.1)		359,220
The Brandtech Group Class A-3 U	Digital advertising	214,538	1.5	(0.1)		240,053
The Brandtech Group Class A-1 U	Digital advertising	73,026	0.5	(0.2)		81,711
		287,564	2.0	(0.3)		321,764
Tempus Labs Inc Series E Pref. U	Offers molecular diagnostics   tests for cancer and   aggregates clinical oncology    records	133,217	0.9	0.1		114,805
Tempus Labs Inc Series F Pref. U	Offers molecular diagnostics   tests for cancer and   aggregates clinical oncology   records	48,627	0.4	-		41,906
Tempus Labs Inc Series G-3 Pref. U	Offers molecular diagnostics    tests for cancer and   aggregates clinical oncology   records	44,004	0.3	-	New purchase	-
Tempus Labs Inc   Series G-2 Pref. U	Offers molecular diagnostics    tests for cancer and   aggregates clinical oncology   records	41,221	0.3	-		35,187
Tempus Labs Inc   Series G Pref. U	Offers molecular diagnostics   tests for cancer and   aggregates clinical oncology   records	7,848	0.1	-		6,763
		274,917	2.0	0.1		198,661
Stripe Inc Series    G Pref. U	Online payment platform	178,763	1.3	-		166,921
Stripe Inc Class B    Common U	Online payment platform	62,937	0.4	-		58,768
Stripe Inc Series   H Pref. U	Online payment platform	26,678	0.2	-		24,487
		268,378	1.9	-		250,176
Pinduoduo Inc	Chinese e-commerce	261,463	1.8	1.0		142,114
Ginkgo BioWorks   Inc p	Bio-engineering company	253,779	1.8	(0.1)		277,228
Wise Plc p	Online platform to send and   receive money	245,042	1.7	0.5		183,614
Delivery Hero	Online food delivery service	231,231	1.6	0.1		231,834
Ferrari	Luxury automobiles	228,722	1.6	-		228,349
NVIDIA	Visual computing	195,357	1.4	(1.6)	Significant reduction	582,378
Snowflake Inc p	Developer of a SaaS-based   cloud data warehousing   platform	192,587	1.4	(0.1)	Significant addition	163,321
Adyen	Global payment company	191,335	1.3	(0.4)		223,895
Epic Games Inc U	Gaming platform	186,870	1.3	0.3		144,064
Denali   Therapeutics p	Biotechnology	169,181	1.2	0.2		150,121
Netflix	Subscription service for TV shows and movies	161,031	1.1	(0.4)		264,214
Zipline   International Inc   Series D Pref. U	Logistics company that   designs, manufactures and   operates drones to deliver   medical supplies	56,172	0.4	-		58,508
Zipline   International Inc   Series E Pref. U	Logistics company that   designs, manufactures and   operates drones to deliver   medical supplies	48,330	0.4	-		44,887
Zipline   International Inc   Series C Pref. U	Logistics company that   designs, manufactures and   operates drones to deliver   medical supplies	47,969	0.3	-		49,964
		152,471	1.1	-		153,359
Ant International  Ltd Class C Ord. U	Online financial services   platform	136,322	1.0	-		136,502
Alibaba Group p	Online retailing and financial   services	135,032	0.9	(0.4)	Significant reduction	419,268
Recursion   Pharmaceuticals    Inc p	Uses image   recognition/machine learning  and automation to improve   drug discovery	132,756	0.8	0.5		75,850
Spotify   Technology SA p	Online music streaming   service	127,851	0.8	(0.4)		189,643
Blockchain.com   Series C-1 Pref. U	Software platform for digital   assets	51,988	0.4	(1.1)		182,169
Blockchain.com   Series D Pref. U	Software platform for digital   assets	51,056	0.4	(0.2)		75,950
Blockchain.com   Inc Promissory   note U	Software platform for digital   assets	4,479	-	-	New purchase	-
		107,523	0.8	(1.3)		258,119
Housing   Development   Finance   Corporation	Indian mortgage provider	106,950	0.8	0.1		101,717
Zalando	International online clothing   retailer	99,729	0.7	(0.9)		220,640
Solugen Inc   Series C-1 Pref. U	Solugen exists to scale   synthetic biology and bring   green chemicals to the world	98,185	0.7	0.2		67,922
HelloFresh p	Grocery retailer	89,238	0.7	(0.5)		161,987
Redwood   Materials Inc   Series C Pref. U	Environmental battery   recycling	85,550	0.7	0.1		74,535
The Production   Board Series A-2   Pref. U	Holding company for food   technology companies	50,882	0.4	(0.2)		77,166
The Production   Board Series A-3   Pref. U	Holding company for food   technology companies	34,593	0.3	-		28,266
		85,475	0.7	(0.2)		105,432
Carbon Inc   Series D Pref. U	Manufactures and develops   3D printers	49,627	0.4	-		49,205
Carbon Inc   Series E Pref. U	Manufactures and develops   3D printers	31,046	0.2	-		30,782
		80,673	0.6	-		79,987
Indigo Agriculture   Inc Series D   Pref. U	Analyses plant microbiomes   to increase crop yields	28,569	0.2	-		25,049
Indigo Agriculture   Inc Series E   Pref. U	Analyses plant microbiomes to increase crop yields	19,912	0.1	-		14,670
Indigo Agriculture   Inc Series F   Pref. U	Analyses plant microbiomes to increase crop yields	18,942	0.1	-		14,776
Indigo Agriculture   Inc Series G   Pref. U	Analyses plant microbiomes to increase crop yields	11,689	0.1	-		9,447
Indigo Agriculture   Inc Common U	Analyses plant microbiomes   to increase crop yields	1,047	-	-		2,221
		80,159	0.5	-		66,163
Roblox	Human co-experience   platform enabling shared   experiences among users	79,871	0.5	(0.1)	New purchase	-
Jiangxiaobai   Holdings Ltd   Series C Pref. U	Producer of alcoholic   beverages	75,305	0.5	0.1		55,950
ChargePoint   Holdings Inc	Electric vehicle charging   solutions	76,055	0.5	-	Significant addition	69,111
Atlas Copco	Engineering	73,141	0.5	-		86,205
Affirm Holdings   Inc Class A p	Online platform which   provides lending and   consumer credit services	68,947	0.5	(0.5)		144,207
Zoom	Remote conferencing service   provider	67,691	0.5	(0.1)		91,537
Blockstream   Corporation Inc   Series B-1 Pref. U	Financial software developer	66,713	0.5	(0.1)		71,135
Ocado	Online grocery retailer and   technology provider	66,289	0.5	(0.6)	Significant addition	102,395
Databricks Inc   Series H Pref. U	Data software solutions	66,222	0.5	-		58,997
Vir Biotechnology   Inc p	Biotechnology company   developing anti-infective   therapies	65,664	0.5	-		73,365
Rappi Inc Series F   Pref. U	Provider of an on-demand   delivery platform designed to   connect consumers with   local stores	64,951	0.5	-		58,899
Nuro Inc Series C   Pref. U	Delivery business, using self-   driving purpose-built electric   vehicles	39,217	0.3	(0.1)		55,561
Nuro Inc Series D   Pref. U	Delivery business, using self-   driving purpose-built electric   vehicles	25,693	0.2	-		28,433
		64,910	0.5	(0.1)		83,994
Shopify	Cloud-based commerce   platform provider	62,916	0.4	(0.5)		133,802
GoPuff Inc    (GoBrands)   Series G Pref. U	On demand retail delivery   service	61,948	0.4	-		55,476
Salt Pay Co Ltd   Non-Voting   Ordinary   Shares U	Payment and management   solutions	53,520	0.4	(0.1)		60,434
Salt Pay Co Ltd   Voting Ordinary   Shares U	Payment and management   solutions	1	-	-		1
		53,521	0.4	(0.1)		60,435
Honor   Technology Inc   Series D Pref. U	Provider of home-care   services	31,498	0.3	(0.1)		37,375
Honor   Technology Inc   Series E Pref. U	Provider of home-care   services	21,989	0.1	-		24,766
		53,487	0.4	(0.1)		62,141
Tanium Inc Class   B Common U	Provides security and systems   management solutions	53,227	0.4	(0.4)		104,374
Relativity Space   Inc Series D   Pref. U	Aerospace company, designs   and builds rockets using 3D   printers	32,902	0.3	-		44,217
Relativity Space   Inc Series E   Pref. U	Aerospace company, designs   and builds rockets using 3D   printers	19,666	0.1	(0.1)		21,583
		52,568	0.4	(0.1)		65,800
Bolt Threads Inc   Series D Pref. U	Natural fibres and fabrics   manufacturer	27,621	0.2	-		25,308
Bolt Threads Inc   Series E Pref. U	Natural fibres and fabrics   manufacturer	23,860	0.2	-		21,696
		51,481	0.4	-		47,004
Kinnevik	Investment company	50,675	0.4	(0.2)		85,605
Horizon Robotics   Series C Pref. U	Designer and developer of AI   chips and algorithms   principally for advanced   driving assistance systems   and autonomous vehicles	49,819	0.4	-		44,187
Essence   Healthcare   Series 3 Pref. U	Cloud-based health provider	49,569	0.4	0.1		38,304
JRSK Inc (Away)   Series D Pref. U	Manufactures luggage	20,085	0.1	-		17,355
JRSK Inc (Away)   Series Seed   Pref. U	Manufactures luggage	10,830	0.1	-		9,651
JRSK Inc (Away)   Convertible   Promissory   Note U	Manufactures luggage	8,653	0.1	-		8,034
JRSK Inc (Away)   Convertible   Promissory Note   2021 U	Manufactures luggage	8,653	0.1	-		8,034
		48,221	0.4	-		43,074
Thumbtack Inc   Series G Pref. U	Online directory service for   local businesses	28,948	0.2	-		33,513
Thumbtack Inc   Series I Pref. U	Online directory service for   local businesses	11,022	0.1	-		11,741
Thumbtack Inc Series H Pref. U	Online directory service for local businesses	5,790	-	-		6,703
Thumbtack Inc   Class A   Common U	Online directory service for   local businesses	871	-	-		3,023
Thumbtack Inc   Series A Pref. U	Online directory service for   local businesses	514	-	-		1,783
Thumbtack Inc   Series C Pref. U	Online directory service for   local businesses	150	-	-		521
Thumbtack Inc   Series B Pref. U	Online directory service for   local businesses	35	-	-		121
		47,330	0.3	-		57,405
Climeworks AG   Series F   Preferred U	Renewable energy equipment	46,925	0.3	-	New purchase	-
Climeworks AG   Non Voting   Shares U	Renewable energy equipment	358	-	-	New purchase	-
		47,283	0.3	-		-
Capsule Corp   Series D Pref. U	Digital platform providing   home delivery of prescription   medication	46,779	0.3	-		47,719
10x Genomics	A life science and diagnostics   company	45,611	0.3	(0.4)		103,343
Convoy Inc   Series D Pref. U	Marketplace for truckers and   shippers	28,978	0.2	-		27,763
Convoy Inc   Series E Pref. U	Marketplace for truckers and   shippers	16,909	0.1	-		15,190
		45,887	0.3	-		42,953
Uptake   Technologies Inc   Promissory   Note U	Designs and develops   enterprise software	24,870	0.2	-		22,785
Uptake   Technologies Inc   Series D Pref. U	Designs and develops   enterprise software	20,435	0.1	(0.2)		41,545
		45,305	0.3	(0.2)		64,330
Workrise   Technologies Inc   Series E Pref. U	Online platform connecting   contractors with work	45,165	0.3	(0.1)		51,918
Warby Parker Inc p	Online and physical glasses   retailer	45,092	0.3	(0.4)		96,854
Cloudflare	Application software   developer	43,023	0.3	-	New purchase	-
DoorDash	Provides restaurant food   delivery services	40,849	0.3	(0.3)		81,972
Aurora Innovation   Inc Common p	Developer of driverless vehicle   technology	40,349	0.3	(0.4)		86,922
Wayfair	Online household goods   retailer	38,716	0.3	(0.5)		111,760
Lilium NV p	On demand air transportation	36,309	0.3	(0.1)		53,503
Heartflow Inc   Series E Pref. U	Develops software for   cardiovascular disease   diagnosis and treatment	33,066	0.3	(0.1)		41,525
KSQ Therapeutics   Inc Series C   Pref. U	Biotechnology company	22,792	0.1	-		19,996
KSQ Therapeutics   Inc Series D   Pref. U	Biotechnology company	8,476	0.1	-		7,303
		31,268	0.2	-		27,299
Sana   Biotechnology   Inc p	Biotechnology company   creating and delivering   engineered cells as medicine	29,976	0.2	-		35,003
Zocdoc Inc   Series D-2 Pref. U	Online platform for searching   for doctors and booking   appointments	29,630	0.2	0.1		22,321
Joby Aviation Inc p	Electric aircraft	29,391	0.2	-		38,040
PsiQuantum   Series D Pref. U	Operates as a biotechnology   company	21,084	0.1	-		18,988
Upside Foods Inc   Series C-1 Pref. U	Cultivated meat producer	20,602	0.1	-	New purchase	-
Clear Secure Inc	Biometric security firm	20,478	0.1	-		20,393
Carvana	Online platform for buying   used cars	18,343	0.1	(0.5)		83,168
Sinovation Fund   III U	Venture capital fund	13,692	0.1	-		10,145
ARCH Ventures   Fund IX U	Venture capital fund to invest   in biotech start-ups	13,655	0.1	-		16,579
Illumina CVR	Biotechnology equipment	13,524	0.1	-		-
WI Harper Fund   VIII U	Venture capital fund	12,134	0.1	-		9,757
Clover Health   Investments B   Common p	Healthcare insurance provider	7,785	0.1	-		-
Clover Health Investments A Common p	Healthcare insurance provider	4,005	-	(0.1)		20,938
		11,790	0.1			20,938
Udacity Inc   Series D Pref. U	Online education	10,572	0.1	-		8,269
Innovation Works   Development   Fund U	Venture capital fund	10,431	0.1	-		16,201
ARCH Ventures   Fund X   Overage U	Venture capital fund to invest   in biotech start-ups	8,706	0.1	-		6,840
ARCH Ventures   Fund X U	Venture capital fund to invest   in biotech start-ups	8,412	0.1	-		6,331
WI Harper Fund   VII U	Venture capital fund	8,066	0.1	-		7,589
ARCH Ventures   Fund XI U	Venture capital fund to invest   in biotech start-ups	6,448	<0.1	-	Significant addition	3,362
Zymergen Inc p	Developer of molecular   technology	5,511	<0.1	-		4,840
Global AI   Opportunities   Fund	Artificial intelligence based   algorithmic trading	4,466	<0.1	-		5,114
ARCH Ventures   Fund XII U	Venture capital fund to invest   in biotech start-ups	1,571	<0.1	0.1	New purchase	-
Rubius   Therapeutics   Inc p	Biotechnology	1,334	<0.1	-		14,309
Antler East Africa   Fund I LP U	VC Fund helping   entrepreneurs establish their   businesses in   East Africa	990	<0.1	-		276
Beam   Therapeutics	Biotechnology company	440	<0.1	-		447
Intarcia   Therapeutics Inc   Common ‡ U	Implantable drug delivery   system	-	-	-		-
Intarcia   Therapeutics Inc   Convertible   Bond ‡ U	Implantable drug delivery   system	-	-	-		-
Intarcia   Therapeutics Inc   Series EE   Pref. ‡ U	Implantable drug delivery   system	-	-	-		-
		-	-			-
Total Investments		14,003,641	98.6
Net Liquid Assets #		198,676	1.4
Total Assets #		14,202,317	100.0

*  Contribution to absolute performance has been calculated on a total return basis over the period 1 April 2022 to 30 September 2022. For a definition of total return please see the Glossary of Terms and Alternative Performance Measures at the end of this announcement.

† Significant additions and reductions to investments have been noted where the change is at least a 20% movement from the value of the holding at 31 March 2022. The change in value over the period also reflects the share price performance and the movement in exchange rates.

#  See Glossary of Terms and Alternative Performance Measures at the end of this announcement.

‡ The Intarcia Therapeutics holdings are valued at nil at 30 September 2022.

^U   Denotes unlisted (private company) security.

^p  Denotes listed security previously held in the portfolio as an unlisted (private company) security.

  Source: Baillie Gifford/StatPro. See disclaimer at the end of this announcement.

Distribution of Assets* (unaudited)

Geographical Analysis

			At 30 September 2022 %	At 31 March 2022 %
North America			58.8	59.7
	United States		57.9	58.5
	Canada		0.9	1.2
Europe			21.8	21.9
	United Kingdom		2.4	2.0
	Eurozone		14.1	15.5
	Developed Europe (non Euro)		5.3	4.4
South America			2.9	2.0
	Brazil		2.9	2.0
Asia			16.5	16.4
	China		15.7	15.8
	India		0.8	0.6
Total assets			100.0	100.0

Sectoral Analysis

		At 30 September 2022 %	At 31 March 2022 %
Consumer Staples		3.0	3.0
Consumer Discretionary		33.7	33.5
Technology		22.4	24.9
Healthcare		18.6	19.4
Financials		5.8	5.3
Industrials		10.4	9.1
Basic Materials		3.6	2.7
Real Estate		0.0	0.1
Energy		1.1	0.7
Net Liquid Assets		1.4	1.3
Total assets		100.0	100.0

^* See Glossary of Terms and Alternative Performance Measures at end of this announcement.

	Listed equities %	Unlisted   (private company)   securities†   %	Unlisted (private company) bonds %	Net liquid assets %	Total %
30 September 2022	66.8	30.9	0.9	1.4	100.0
31 March 2022	73.9	24.6	0.2	1.3	100.0

† Includes holdings in preference shares and ordinary shares.

http://www.rns-pdf.londonstockexchange.com/rns/0636G_2-2022-11-10.pdf

http://www.rns-pdf.londonstockexchange.com/rns/0636G_1-2022-11-10.pdf

Absolute Performance to 30 September 2022 (unaudited)

		Total return (%)# for five years	Total return (%)# For ten years	Total return (%)# since inception (2 June 2010)‡
Overall investment portfolio		106.7	495.4	625.5
Private and previously private companies		92.0	886.0	726.0
FTSE All-World Index (in sterling terms)		52.7	207.9	273.9

#  For a definition of total return please see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

‡ Date of investment in first private company security. Source: StatPro/Baillie Gifford and underlying index providers.

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. The prices are also reviewed twice per year by the Scottish Mortgage Board and are subject to the scrutiny of external auditors in the annual audit process.

Recent market volatility has meant that recent pricing has moved much more frequently than would have been the case with the quarterly valuations cycle.

Beyond the regular cycle, the valuations committee also monitors the portfolio for certain 'trigger events'. These may include: changes in fundamentals; a takeover approach; an intention to carry out an Initial Public Offering (IPO); or changes to the valuation of comparable public companies.

The valuations committee also monitors relevant market indices on a weekly basis and update 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 undertake these checks daily. Any ad hoc change to the fair valuation of any holding is implemented swiftly and reflected in the next published NAV. There is no delay.

Scottish Mortgage Investment Trust
Instruments valued	87
Revaluations performed	297
Percentage of portfolio revalued 2+ times	97%
Percentage of portfolio revalued 4+ times	40%

Year to date, most revaluations have been decreases. A handful of companies have raised capital at an increased valuation. The average movement in both valuation and share price for those which have decreased in value is shown below.

	Average movement in investee company valuation*	Average movement in investee company share price
Scottish Mortgage*	(17.8%)	(13.7%)
* Data reflecting period 1 April 2022 - 30 September 2022 to align with the Company's reporting period end

Share prices have decreased less than headline valuations because Scottish Mortgage typically holds preference stock, which provides downside protection. The share price movement reflects a probability weighted average of both the regular valuation, which would be realised in an IPO, and the downside protected valuation, which would be normally be triggered in the event of a corporate sale or liquidation.

Notes to the Condensed Financial Statements (unaudited)

1.  The condensed Financial Statements for the six months to 30 September 2022 comprise the statements set out on above together with the related notes below. They have been prepared in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended Practice issued in November 2014 and updated in July 2022 with consequential amendments. They have not been audited or reviewed by the Auditor pursuant to the Auditing Practices Board Guidance on 'Review of Interim Financial Information'. The Financial Statements for the six months to 30 September 2022 have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements at 31 March 2022.

Going Concern

The Directors have considered the nature of the Company's assets, its liabilities, projected income and expenditure together with its investment objective and policy, dividend policy and principal risks and uncertainties, as set out at the end of this document. The Board has, in particular, considered the impact of heightened market volatility since the Covid-19 pandemic and over recent months due to the macroeconomic and geopolitical concerns, including the Russia-Ukraine war and US-China tensions. It has reviewed the results of specific leverage and liquidity stress testing, but does not believe the Company's going concern status is affected. The Company's assets, the majority of which are in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. The Company has continued to comply with the investment trust status requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) Regulations 2011. Accordingly, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements and confirm that they are not aware of any material uncertainties which may affect the Company's ability to continue in operational existence for a period of at least twelve months from the date of approval of these Financial Statements.

2.  The financial information contained within this Interim Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial information for the year ended 31 March 2022 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditors' Report on those accounts was not qualified, did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying its report and did not contain statements under sections 498 (2) or (3) of the Companies Act 2006.

3.  Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed by the Company as its Alternative Investment Fund Manager ('AIFM') and Company Secretary. The investment management function has been delegated to Baillie Gifford & Co. The management agreement can be terminated on six months' notice. The annual management fee is 0.30% on the first £4 billion of total assets less current liabilities (excluding short term borrowings for investment purposes) and 0.25% thereafter, calculated and payable quarterly.

4.  Net Return per Ordinary Share

	Six months to  30 September 2022 £'000	Six months to  30 September 2021 £'000
Revenue return on ordinary activities after taxation	20,719	8,715
Capital return on ordinary activities after taxation	(2,596,148)	2,654,201
Total net return	(2,575,429)	2,662,916
Weighted average number of ordinary shares in issue	1,439,460,353	1,416,515,214

The net return per ordinary share figures are based on the above totals of revenue and capital and the weighted average number of ordinary shares in issue during each period.

There are no dilutive or potentially dilutive shares in issue.

5.  Dividends

	Six months to  30 September 2022 £'000	Six months to  30 September 2021 £'000
Amounts recognised as distributions in the period:
Previous year's final dividend of 2.07p (2021 - 1.97p), paid 1 July 2022	29,864	27,984
	29,864	27,984
Dividends proposed in the period:
Interim dividend for the year ending 31 March 2023 of 1.60p (2022 - 1.52p)	22,848	21,459
	22,848	21,459

The interim dividend was declared after the period end date and has therefore not been included as a liability in the Balance Sheet. It is payable on 16 December 2022 to shareholders on the register at the close of business on 25 November 2022. The ex-dividend date is 24 November 2022. The Company's Registrars offer a Dividend Reinvestment Plan and the final date for elections for this dividend is 29 November 2022.

6.  Fair Value Hierarchy

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. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:

Level 1 - using unadjusted quoted prices for identical instruments in an active market;

Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and

Level 3 - using inputs that are unobservable (for which market data is unavailable).

The Company's investments are financial assets designated at fair value through profit or loss. An analysis of the Company's financial asset investments based on the fair value hierarchy described above is shown below.

Investments held at fair value through profit or loss

As at 30 September 2022	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Equities/funds	9,471,002	-	-	9,471,002
Private company ordinary shares	-	-	656,843	656,843
Private company preference shares *	-	-	3,652,682	3,652,682
Private company convertible note	-	-	125,486	125,486
Limited Partnership Investments	-	-	84,104	84,104
Contingent Value Rights	-	-	13,524	13,524
Total financial asset investments	9,471,002	-	4,532,639	14,003,641

As at 31 March 2022 (audited)	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Equities/funds	12,473,650	-	-	12,473,650
Private company ordinary shares	-	-	609,779	609,779
Private company preference shares *	-	-	3,470,105	3,470,105
Private company convertible note	-	-	38,853	38,853
Limited Partnership Investments	-	-	77,082	77,082
Total financial asset investments	12,473,650	-	4,195,819	16,669,469

During the period, no investments were transferred from Level 3 to Level 1 on becoming listed. The fair value of listed investments is bid value or, in the case of holdings on certain recognised overseas exchanges, last traded price. Listed Investments are categorised as Level 1 if they are valued using unadjusted quoted prices for identical instruments in an active market and as Level 2 if they do not meet all these criteria but are, nonetheless, valued using market data.

*  The investments in preference shares are not classified as equity holdings as they include liquidation preference rights that determine the repayment (or multiple thereof) of the original investment in the event of a liquidation event such as a take-over.

Private company investments

The Company's holdings in unlisted (private company) investments are categorised as Level 3. 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 2018 ('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 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).

Further information on the private company valuation process is provided under 'Valuing Private Companies' above.

7.  The total value of the borrowings (at book) is £2,181,140,000 (31 March 2022 - £2,131,588,000).

The bank loans falling due within one year are a US$350 million revolving 3 year loan with National Australia Bank Limited ('NAB') and a US$100 million revolving 3 year loan with Scotiabank (31 March 2022 - US$391 million revolving 3 year loan with NAB, a US$50 million revolving 5 year loan with The Royal Bank of Scotland International Limited ('RBSI'), a US$100 million revolving 3 year loan with Scotiabank and a US$120 million revolving 3 year loan with Industrial and Commercial Bank of China ('ICBC')).

During the period, the US$391 million revolving 3 year loan with NAB was reduced to a facility of US$350 million and the ICBC US$120 million revolving 3 year loan was repaid. The RBSI US$50 million revolving 5 year loan facility was repaid and subsequently reduced to a facility of US$25 million.

The bank loans falling due after more than one year are a US$200 million fixed rate loan and a US$180 million fixed rate loan with RBSI and a US$300 million fixed rate loan with Scotiabank ( 31 March 2022 - US$200 million fixed rate loan and a US$180 million fixed rate loan with RBSI and a US$300 million fixed rate loan with Scotiabank).

8.  The fair value of the borrowings at 30 September 2022 was £1,705,071,000 (31 March 2022 - £2,001,685,000).

9.  Share Capital: Ordinary Shares of 5p Each

	At 30 September 2022 No. of shares	At 31 March 2022 (audited) No. of shares
Allotted, called up and fully paid ordinary shares of 5p each	1,428,019,945	1,444,131,650
Treasury shares of 5p each	56,760,935	40,649,230
Total	1,484,780,880	1,484,780,880

In the six months to 30 September 2022, the Company sold no ordinary shares from treasury (year to 31 March 2022 - 34,950,000 ordinary shares at a premium to net asset value, with a nominal value of £1,747,500 raising net proceeds of £518,246,000).

In the six months to 30 September 2022, 16,111,705 ordinary shares with a nominal value of £805,585 were bought back at a total cost of £131,171,000 and held in treasury (year to 31 March 2022 - 12,437,319 shares with a nominal value of £621,000 were bought back at a total cost of £157,597,000 and held in treasury). At 30 September 2022 the Company had authority remaining to buy back 204,723,592 ordinary shares.

10.  Transaction costs on acquisitions within the portfolio amounted to £383,000 (30 September 2021 - £382,000) and transaction costs on sales amounted to £1,089,000 (30 September 2021 - £190,000). These costs are included in the book cost of acquisitions and in the net proceeds of disposals.

11.  Related Party Transactions

There have been no transactions with related parties during the first six months of the current financial year that have materially affected the financial position or the performance of the Company during that period and there have been no changes in the related party transactions described in the last Annual Report and Financial Statements that could have had such an effect on the Company during that period.

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)

Total Assets

Total assets less current liabilities, before deduction of all borrowings.

Net Asset Value

Also described as shareholders' funds. Net Asset Value ('NAV') is the value of total assets less liabilities (including borrowings). Net Asset Value is calculated on the basis of borrowings stated at book value or fair value. An explanation of each basis is provided below. The NAV per share is calculated by dividing this amount by the number of ordinary shares in issue (excluding treasury shares).

Net Asset Value (Borrowings at Book)/Shareholders' Funds

Borrowings are valued at adjusted net issue proceeds. The value of the borrowings at book is set out in note 7 above.

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

Borrowings are valued at an estimate of their market worth. The value of the borrowings at fair is set out in note 8 above and a reconciliation to Net Asset Value with borrowings at book value is provided below.

	30 September 2022	31 March 2022
Net Asset Value per ordinary share (borrowings at book value)	841.7p	1,021.8p
Shareholders' funds (borrowings at book value)	£12,019,535,000	£14,755,999,000
Add: book value of borrowings	£2,181,140,000	£2,131,588,000
Less: fair value of borrowings	(£1,705,071,000)	(£2,001,885,000)
Net Asset Value (borrowings at fair value)	£12,495,604,000	£14,885,702,000
Shares in issue at year end (excluding treasury shares)	1,428,019,945	1,444,131,650
Net Asset Value per ordinary share (borrowings at fair value)	875.0p	1,030.8p

Net Liquid Assets

Net liquid assets comprise current assets less current liabilities, excluding borrowings.

Discount/Premium (APM)

As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, it is said to be trading at a premium.

		30 September 2022		30 September 2021
		2022 NAV (book)	2022 NAV (fair)	2021 NAV (book)	2021 NAV (fair)
Net Asset Value per share	(a)	841.7p	875.0p	1,381.1p	1,378.8p
Share price	(b)	782.4p	782.4p	1,428.0p	1,428.0p
Discount ((b)-(a)) ÷ (a)		(7.0%)	(10.6%)	3.4%	3.6%

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. Gearing represents borrowings at book value less cash and cash equivalents (including any outstanding trade settlements) expressed as a percentage of shareholders' funds.

		30 September 2022	31 March 2022
Borrowings (at book value)		£2,181,140,000	£2,131,588,000
Less: cash and cash equivalents		(£230,387,000)	(£229,962,000)
Less: sales for subsequent settlement		-	(£6,450,000)
Add: purchases for subsequent settlement		-	-
Adjusted borrowings	(a)	£1,950,753,000	£1,895,176,000
Shareholders' funds	(b)	£12,019,535,000	£14,755,999,000
Gearing: (a) as a percentage of (b)		16%	13%

		30 September 2022	31 March 2022
Borrowings (at book value)	(a)	£2,181,140,000	£2,131,588,000
Shareholders' funds	(b)	£12,019,535,000	£14,755,999,000
Potential gearing: (a) as a percentage of (b)		18%	14%

Turnover (APM)

Annual turnover is calculated on a rolling 12 month basis. The lower of purchases and sales for the 12 months is divided by the average assets, with average assets being calculated on assets as at each month's end.

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.

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.

		30 September 2022			30 September 2021
		NAV (book)	NAV (fair)	Share price	NAV (book)	NAV (fair)	Share price
Closing NAV per share/share price	(a)	841.7p	875.0p	782.4p	1,381.1p	1,378.8p	1,428.0p
Dividend adjustment factor *	(b)	1.0025	1.0024	1.0026	1.0020	1.0012	1.0016
Adjusted closing NAV per share/share price	(c = a x b)	843.8p	877.1p	784.4p	1,383.9p	1,380.4p	1,430.3p
Opening NAV per share/share price	(d)	1,021.8p	1,030.8p	1,026.0p	1,195.1p	1,190.0p	1,137.0p
Total return	(c ÷ d)-1	(17.4%)	(14.9%)	(23.5%)	15.8%	16.0%	25.8%

Principal Risks and Uncertainties

The principal risks facing the Company are financial risk, private company investments risk, investment strategy risk, climate and governance risk, discount risk, regulatory risk, custody and depositary risk, operational risk, leverage risk, political risk and emerging risks. An explanation of these risks and how they are managed is set out on pages 9 and 10 of the Company's Annual Report and Financial Statements for the year to 31 March 2022 which is available on the Company's website: scottishmortgage.com.

The principal risks and uncertainties have not changed since the date of that report.

Shareholders will be notified on or around 18 November 2022 that the Interim Financial Report has been published and will be available on the Scottish Mortgage page of the Managers' website scottishmortgageit.com. ^‡

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

Scottish Mortgage Investment Trust PLC is an actively managed, low cost investment trust, investing in a concentrated global portfolio of companies with the aim of maximising its total return over the long term. It looks for strong businesses with above-average returns and aims to achieve a greater return than the FTSE All-World Index (in sterling terms) over a five year rolling period.

You can find up to date performance information about Scottish Mortgage on the Scottish Mortgage page of the Managers' website at scottishmortgageit.com‡

‡ 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.

Scottish Mortgage is managed by Baillie Gifford & Co, the Edinburgh based fund management group with over £ 221 billion under management and advice in active equity and bond portfolios for clients in the UK and throughout the world (as at 10 November 2022).

Investment Trusts are UK public limited companies and are not authorised or regulated by the Financial Conduct Authority.

Past performance is not a guide to future performance.  The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares.

10 November 2022

For further information please contact:

Stewart Heggie, Baillie Gifford & Co

Tel: [phone]

Jonathan Atkins, Four Communications

Tel: [phone] or 07872 495396

Automatic Exchange of Information

In order to fulfil its obligations under UK tax legislation relating to the automatic exchange of information, Scottish Mortgage Investment Trust PLC is required to collect and report certain information about certain shareholders.

The legislation requires investment trust companies to provide personal information to HMRC on certain investors who purchase shares in investment trusts. Accordingly, Scottish Mortgage Investment Trust PLC will have to provide information annually to the local tax authority on the tax residencies of a number of non-UK based certificated shareholders and corporate entities. Shareholders, excluding those whose shares are held in CREST, who come on to the share register will be sent a certification form for the purposes of collecting this information.

For further information, please see HMRC's Quick Guide: Automatic Exchange of Information - information for account holders gov.uk/government/publications/ exchange-of-information-account-holders.

Third Party Data Provider Disclaimer

No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data. No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom.

No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.

Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.

FTSE Index Data

London Stock Exchange Group plc and its group undertakings (collectively, the 'LSE Group'). ©LSE Group 2022. FTSE Russell is a trading name of certain 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 Scottish Mortgage Investment Trust PLC is marketed in the EU by the AIFM, BG & 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 Governance and Sustainable Principles and Guidelines as its policy on integration of sustainability risks in investment decisions. 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 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. More detail on the Managers' approach to sustainability can be found in the Governance and Sustainability Principles and Guidelines document, available publicly on the Baillie Gifford website bailliegifford.com.

Taxonomy Regulation

The Taxonomy Regulation establishes an EU-wide framework of criteria for environmentally sustainable economic activities in respect of six environmental objectives. It builds on the disclosure requirements under SFDR by introducing additional disclosure obligations in respect of Alternative Investment Funds that invest in an economic activity that contributes to an environmental objective. The Company does not commit to make sustainable investments as defined under SFDR. As such, the underlying investments do not take into account the EU criteria for environmentally sustainable economic activities.

 

END

 

 

IR URSKRUAUAAAA