Annual Financial Report

Lowland Investment Co PLC

06 December 2024

 

The issuer advises that the following replaces the Annual Financial Report announcement released on 5 December 2024 at 7.00 am under RNS number 8726O.

A reference to the final dividend in a footnote should have been 1.625p and not 1.6425p. All other details remain unchanged. The full amended text appears below.

LOWLAND INVESTMENT COMPANY PLC

ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2024

This announcement contains regulated information.

INVESTMENT OBJECTIVE

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

INVESTMENT POLICY

Asset Allocation

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

Dividend

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

Gearing

The Board believes that debt in a closed-end fund is a valuable source of long-term outperformance, and therefore the Company will usually be geared.  At the point of drawing down debt, gearing will not exceed 20% of the portfolio valuation but generally will be around half that level. Borrowing will be a mixture of short and long-dated debt, depending on relative attractiveness of rates.

Key Data as at 30 September 2024

·      Net Asset Value ('NAV') Total Return^1,8 of 16.3%

·      Benchmark Total Return² of 13.4%

·      Dividend growth of 2.8%

·      Dividend for the Year³ of 6.425p

	Year ended 30 September 2024	Year ended 30 September 2023
NAV per share at year end (debt at par)4	144.2p	129.3p
NAV per share at year end (debt at fair value)4,8	146.1p	131.7p
Share price at year end5	127.0p	113.0p
Market capitalisation	£343m	£305m
Dividend per share	6.425p3	6.25p
Ongoing charge8	0.66%	0.64%
Dividend yield6,8	5.1%	5.5%
Gearing at year end8	11.0%	12.3%
Discount at year end7,8	13.1%	14.2%
AIC UK Equity Income Sector Average Discount	5.0%	5.5%

1	NAV per share total return (including dividends reinvested) with debt at fair value
2	FTSE All-Share Index (including dividends reinvested)
3	Includes the final dividend of 1.625p per ordinary share for the year ended 30 September 2024 that will be put to shareholders for approval at the Annual General Meeting on Tuesday 28 January 2025
4	NAV per share for both figures is before deduction of the third interim dividend paid in October of each year
5	Mid-market closing price
6	Based on dividends paid and payable in respect of the financial year and the share price at the year end
7	Calculated using year end fair value NAVs including current year revenue
8	Alternative Performance Measure ('APMs')

Sources: Morningstar Direct, Janus Henderson, Factset

Historical Performance (%)

	1 year	3 years	5 years	10 years	25 years
Net asset value3	16.3	16.1	31.7	62.4	636.7
Share price3	18.3	12.7	30.3	46.1	696.6
FTSE All-Share	13.4	23.9	32.2	83.6	275.5

Year ended 30 September	Dividend per ordinary share  (pence)1	Total return/(loss) per ordinary share (pence)1	Net revenue return per ordinary share (pence)1	Total net assets (£'000)	Net asset value per ordinary share (pence)1	Share price per ordinary share (pence)1
2014	3.700	7.33	3.94	361,856	134.6	135.5
2015	4.100	1.18	4.64	354,563	131.8	128.7
2016	4.500	15.64	4.77	386,910	143.2	133.7
2017	4.900	24.32	4.91	439,896	162.8	150.4
2018	5.400	4.74	5.86	438,934	162.5	151.5
2019	5.950	(13.87)	6.80	385,904	142.8	128.0
2020	6.000	(33.69)	3.38	278,653	103.1	91.4
2021	6.025	48.79	4.27	394,285	145.9	131.5
2022	6.100	(24.00)	6.10	313,036	115.9	104.5
2023	6.250	19.54	6.71	349,345	129.3	113.0
2024	6.4252	21.30	6.29	389,633	144.2	127.0

1	Comparative numbers for 2014 to 2021 have been restated to reflect the ten for one share split which took place on 7 February 2022
2	Includes the final dividend of 1.625p per ordinary share for the year ended 30 September 2024 that will be put to shareholders for approval at the Annual General Meeting on Tuesday 28 January 2024
3	Alternative Performance Measures.

CHAIRMAN'S STATEMENT

Lowland Chairmans Statement FY24

Performance

I am pleased to report that, for the second successive year, Lowland achieved a strong return, both in absolute terms and compared with its benchmark. Net Asset Value per share ('NAV') rose 16.3% compared with a 13.4% increase in the FTSE All-Share index, very much in line with the numbers achieved in 2023. The share price increased by 18.3%. (All figures on a total return basis).

Last year I commented on the fact that the UK market was undervalued, most especially the mid/small cap space where Lowland is more invested than its benchmark. While there has been some improvement in UK valuations, this has not really affected the smaller sector or, to a major extent, those with a particular UK focus. The market continues to bear a substantial discount to international peers. The outperformance during the year is predominantly attributable to stock picking. Take-over activity was helpful, in itself emphasising the humble valuations prevailing in UK markets, and the Company also benefitted from gearing, one of the opportunities open to investment trusts. The Fund Managers explain the attribution of performance in more detail in their report. 

The performance of the revenue account, which reflects the dividend income, was more muted. Earnings per share declined 6.3% to 6.29p, reflecting a number of factors. Lowland has chosen to prioritise longer term gains in growing capital which will facilitate income growth in due course, and steadfastly declined to chase earnings. During this year a number of highly rewarding investments, such as Marks and Spencer and Rolls-Royce, had zero or lower dividend yields but were in this category. Timing was an issue with some major dividends being paid just after the year-end, and foreign exchange, interest rates and a trend to replace special dividends by share buy-backs were also factors.

Dividends

The Company is proposing a final dividend of 1.625p per share. If approved at the AGM, this will result in total dividends for the year of 6.425p, a 2.8% increase year-on-year. This dividend is not quite fully covered, but your Board has confidence that earnings will resume their upward trajectory, and is committed to maintaining its quarterly progressive dividend.

Gearing

Lowland has £30m of long-term debt notes, at a fixed 3.15% rate, due in 2037, as well as a £40m variable rate revolving credit facility. The benefit of having an element of fixed long-term debt has been evident during the year, as has been the overall gearing employed. Lowland does not tend to vary levels of gearing dramatically; it was little changed during the year, ending at 11.0% compared to 12.3% a year earlier.

Ongoing Charges

Ongoing Charges are in line with the prior year at 0.66%.

After the year end, the government and the FCA announced that the cost disclosures for the Key Information Document ('KID') would be changed and will now reflect Ongoing Charges, calculated in line with AIC methodology, rather than the potentially misleading disclosures which previously applied. This is an important win for common sense. Investment Trusts were at a significant disadvantage compared to open-ended funds in this regard. The management charge for Investment Trusts are generally lower than for their counterpart products in the open-ended space. It will be helpful if this is clearly shown when like-for-like comparisons are made.

Discount

During the year the discount varied between 8% and 15%, with an average of 12%. The
Board believes that a discount control mechanism would not be in shareholders' interests, for the reasons set out in the annual report.

Investment Trust discounts were volatile over the year, in response to which a number of trusts undertook programmes to buy-back their own shares. Nothing we have seen has encouraged us to change our view.

The Board

We welcomed Mark Lam to the Board during the year. Originally from Singapore, Mark brings a welcome diversity of experience from his career in technology and telecommunications.

Mark stands for election at the January AGM for the first time, and the Board will revert to its normal complement of five, with my retirement.

Helena Vinnicombe stands for election as Chair at the AGM. I am delighted to have such a talented successor.

I will have served as Chair for eight years when I retire. This has been a privilege. My chairmanship has coincided with events, not least Brexit, Covid and chaotic British politics, which have not been helpful to the performance of a company with our investment policy. I am confident that sticking to our investment policy has been the right thing to do, and will reward shareholders in the long term. I am grateful to a capable Board in helping steer this course, while providing robust challenge to the Fund Managers, who have embraced the opportunity for debate and consistently and diligently pursued shareholder interests. Finally, I am grateful to shareholders for their support and loyalty.

Contact with Shareholders

I and the Board are always pleased to hear from shareholders. Please contact me or my successor with comments or questions via [e-mail] or sign up for updates on Lowland by using the QR code on the inside front cover of the annual report.

AGM

The AGM will be held at the Janus Henderson office on 28 January 2025.  Full details of the business to be conducted at the meeting are set out in the Notice which this year is included at the end of the annual report.  Our Fund Managers, James Henderson and Laura Foll, will be making a presentation to shareholders.  The Board and Fund Managers always welcome the opportunity to hear from shareholders, and we encourage as many as possible to attend.

Outlook

A meaningful re-rating of the UK market, and smaller companies in particular, has not really happened. Lowland's portfolio is on a Price Earnings ratio of 10.2 times, or 8.9 on a 'look-though' basis, taking our discount into account. Reflecting the UK focus of our investee companies this is substantially below the UK market as a whole, and, even more so, international markets. Thankfully our shareholders' patience has been rewarded this year with an attractive growth in capital and a dividend yield of around 5%.

We had hoped that a decisive UK election result would remove the uncertainty inherent in a Conservative Government with a propensity to self-destruct but the new Labour Government seems pre-occupied with painting an Armageddon-like picture of the economy it inherited. Ours is a bottom-up approach to investing, but the economic landscape in which our companies are operating is disappointing given initial optimism after the UK election.  The long build-up to the budget, and its eventual content, were not helpful, with many facing substantial cost increases as a result of the increase in the minimum wage and National Insurance costs.   The prospects for inflation and interest rates are less benign than they had appeared.  Confidence, optimism and economic growth have suffered, and the uncertainties implicit in the result of the US election have not helped.

Despite this backdrop, we believe good, well managed UK companies will continue to prosper.  A revaluation of the UK market, and particularly a portfolio such as ours, may be further deferred, but should come in time with a material capital uplift when the fundamentals of UK equities are more widely appreciated. 

Robert Robertson

Chairman

4 December 2024

FUND MANAGER'S REPORT

	1 year (%)	3 years (%)	5 years (%)	10 years (%)	25 years (%)
Lowland NAV	16.3	16.1	31.7	62.4	636.7
Lowland Share Price	18.3	12.7	30.3	46.1	696.6
FTSE All-Share	13.4	23.9	32.2	83.6	275.5

Source: Janus Henderson, Morningstar Direct, all performance figures shown on total return basis.

Overview

We are pleased to report on a second successive year of outperformance relative to the Company's FTSE All-Share benchmark, as well as a good absolute return. The UK economy returned to growth in the second quarter of the financial year, inflation fell, interest rates started to come down and company directors began to feel more confident as shown by the high level of corporate takeover activity. The background was therefore helpful for Lowland's portfolio which has more of the earnings from the underlying companies coming from the UK economy than is the case with the benchmark index.

A new government with a large majority was elected during the summer and this has led to the hope that, after several years of policy turmoil, economic policy might be more stable. This is, as yet, unproven. A missing factor in the improving scenario has been that there has been little pick-up in investor confidence. The Investment Trust sector has seen substantial levels of disinvestment. There is a general pessimism about the UK economy which has resulted in money flowing into overseas markets and left UK stocks generally at a significant valuation discount to overseas ones:

http://www.rns-pdf.londonstockexchange.com/rns/1851P_1-2024-12-6.pdf

The companies in the Lowland portfolio are not a proxy for the UK economy but they are a collection of well managed businesses that we believe provide excellent products and services. The results they have generally reported this year are evidence of their strength.       

Performance Attribution

The Company's return during the financial year was driven predominantly by its FTSE 100 and FTSE 250 holdings, with positive stock selection in both indices (comparing the third and fifth columns in the table below). There was also positive stock selection within AIM portfolio holdings, although the underperformance of AIM more broadly compared to the main market meant that despite positive stock selection, our holdings in this area remained an overall detractor from relative returns. Within the FTSE SmallCap Index (which is now a relatively small index, outside of investment companies) stock selection was negative, driven by the holdings in Vanquis Banking Group and TT Electronics, on which we go into more detail later in this report.

	Lowland weighting (%)	Lowland total return (%)	FTSE All-Share weighting (%)	Index total return (%)
FTSE 100	44.9	21.6	84.5	12.4
FTSE 250	21.2	22.3	13.5	19.1
FTSE SmallCap	13.4	1.4	2.0	18.2
FTSE AIM All-Share	13.4	7.9	-	3.9

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

When viewed through a different lens, what can be seen is that size allocation of the portfolio (in other words the Company holding more than its benchmark in small and medium sized companies) was not a big driver of relative performance this year, and instead it was stock selection and to a lesser extent the use of gearing that drove the relative return. Note that in the below chart, the Company returns are shown with debt at par, and gross of management fees (this is why the return differs from the 16.3% NAV total return reported).

http://www.rns-pdf.londonstockexchange.com/rns/1851P_2-2024-12-6.pdf

Within the FTSE 100, the good performance was driven predominantly by the holdings in Rolls-Royce and Marks & Spencer, as well as banks NatWest and Barclays. Rolls-Royce benefitted from a combination of favourable end markets and ongoing 'self-help' (such as cost cutting and a more commercial focus on pricing). The position was sold during the financial year as the valuation had recovered a long way at the same time as market expectations had become more realistic. The holding was a good reminder that non-dividend payers can serve a role within an income portfolio, as the capital growth from Rolls-Royce can now be reinvested. M&S continued its recent outperformance as a result of higher than forecast earnings as well as a higher valuation, as both sides of its business (food and clothing) performed well under the new team. We have recently reduced the holding as its turnaround is now better understood and reflected in valuations. The banks performed well in an environment of more 'normal' interest rates, where they can earn a healthier margin between what they charge for lending and what they pay out for deposits.

http://www.rns-pdf.londonstockexchange.com/rns/1851P_3-2024-12-6.pdf

Turning to the FTSE 250, the best performers included pork and poultry processor Cranswick, contractor Balfour Beatty, ship broker Clarkson and building products company Marshalls. While there would be no end market commonality to these businesses, each would be among the market leaders in their area with a path to further earnings growth. For example, in the case of Cranswick, they are already the market leader in pork and are now investing in chicken, while in the case of Marshalls there is a need to build more housing and with this will come greater demand for its products.

Within the FTSE SmallCap index, while there were positions (such as free-to-air broadcaster STV) that performed well, there were two key detractors - Vanquis Banking and TT Electronics. In the case of Vanquis (which is predominantly a provider of credit cards), profitability is currently minimal as the new management team work through a number of issues (such as higher than expected claims costs and the need to move prices up in some areas in order to generate a good return). With respect to the claim costs, higher claims were largely driven by external claims companies, and the uphold rate of the complaints has been low, but nevertheless there is a charge from the financial ombudsman for any complaint (regardless of whether it is upheld). The holding has been poor and the company has gone through several phases of restructuring over a number of years. The valuation is currently very low relative to the potential returns the company would earn if the new team do succeed in turning the business round. In the case of TT Electronics the company substantially lowered earnings guidance as a result of challenging industrial end markets. In the period after Covid, due to supply chain outages there was a period where customers built up stock levels to much higher than normal levels, in order to ensure they wouldn't be caught out by not having a particular component. What followed were several years of 'unwinding', as stock levels were steadily moved back to normal levels. At the same time higher interest rates have been depressing demand. For a company such as TT Electronics, if and when demand recovers, we would expect a substantial earnings recovery.

The performance of the AIM index overall has been disappointing and, as the chart below shows, it has materially underperformed other areas of the UK market. This has likely been due to a combination of outflows from the area, weak sentiment towards domestic UK (to which AIM is more exposed) and more recently tax uncertainty, both around the future of inheritance tax relief and for specific sectors such as companies operating in the North Sea. Within Lowland specifically, Serica Energy was the largest detractor from absolute returns over the year and this was primarily due to an extension of the energy profits levy as well as uncertainty surrounding the level of capital expenditure deductibility (in other words the extent to which capital spend can be used to reduce tax). This is not to say, however, that there have not been successes on AIM, and a position such as Epwin (a manufacturer of window and door frames) was among the best performers during the year as it delivered against conservatively managed expectations.

http://www.rns-pdf.londonstockexchange.com/rns/1851P_4-2024-12-6.pdf

Source: Bloomberg as at 30 September 2024. Total return, GBP, rebased to 100 at start date.

The top ten absolute contributors to performance at the stock level were:

Company Name	Contribution to absolute return (%)	Share price total return (%)
1.   Rolls-Royce	1.5	138.7
2.   Marks & Spencer	0.9	59.1
3.   NatWest	0.8	55.7
4.   Barclays	0.8	47.7
5.   Aviva	0.8	33.2
6.   DS Smith	0.7	68.4
7.   Epwin	0.7	58.5
8.   Renold	0.7	76.3
9.   Tesco	0.7	41.3
10.  Kingfisher	0.6	51.6

The top ten absolute detractors from performance at the stock level were:

Company Name	Contribution to absolute return (%)	Share price total return (%)
1.   Serica Energy	-1.0	-38.3
2.   Vanquis	-0.9	-52.0
3.   BP	-0.8	-22.4
4.   TT Electronics	-0.5	-41.1
5.   Headlam	-0.4	-36.9
6.   Prudential	-0.2	-20.0
7.   Halfords	-0.2	-20.2
8.   Churchill China	-0.2	-26.9
9.   Vertu Motors	-0.2	-16.8
10.  Watkin Jones	-0.2	-35.9

Portfolio Activity

While we go into more detail on individual stock purchases and sales later in the report, at a top-down level the purchases during the year have almost entirely fallen outside of the FTSE 'top 20' (the largest 20 companies in the UK such as Shell and AstraZeneca). The reason we make this distinction is, as the chart in the attribution section shows, the FTSE top 20 has meaningfully outperformed in recent years. This means that the portfolio is increasingly 'underweight' the FTSE top 20, as the next chart shows, and we are now modestly 'overweight' the remainder of the FTSE 100, driven by purchases such as Sainsbury and Beazley. This deliberate, but gradual, re-positioning of the portfolio away from the largest UK companies is because, in our view, the best valuation opportunities fall outside of that area. Smaller businesses are, on average, more domestic and have therefore been more exposed to weaker sentiment towards the UK economy as well as outflows from UK equities. Third party equity investors are not the only buyers of these assets and the companies themselves are increasingly becoming their own 'net buyer' via share buybacks.

http://www.rns-pdf.londonstockexchange.com/rns/1851P_5-2024-12-6.pdf

Much of the selling activity during the year was driven by acquisitions, with seven companies (Alpha Financial Markets Consulting, Finsbury Food, Wincanton, IDS, Hipgnosis Songs Fund, Tyman and DS Smith) agreeing takeover offers from a mixture of private equity or competing firms. In addition the largest individual sale was the holding in Rolls-Royce, which was sold on valuation grounds following good performance.

Turning to purchases, within the FTSE 100, new positions included Beazley, Sainsbury and Smith & Nephew. In all cases they are among the market leaders in what they produce, whether in global cyber security insurance in the case of Beazley or wound care in the case of Smith & Nephew. In each case we think there is a strength to the business that is not currently reflected in the valuation; for example Sainsbury is now back regaining market share following a period of price re-setting.

Within small and medium-sized companies, new positions purchased included property owners Shaftesbury Capital and Workspace, as well as retailer Dunelm and corporate restructuring firm FRP Advisory. There is no end market commonality to these new holdings, but in all cases we can see a long pathway of future earnings growth, whether that is from rental growth in prime London property in the case of Shaftesbury or market share growth in homewares in the case of Dunelm.

Portfolio Valuation

While the UK equity market as a whole trades on a valuation discount relative to overseas, there remains a subset of UK shares that trade on a discount to the broader UK market. Domestic earners in particular have underperformed substantially since Brexit (although Brexit is not the only culprit - smaller businesses have also been impacted more by, for example, the growing desire for liquidity among fund managers).

As Lowland invests across the breadth of the UK market (in small, medium and large companies) it has comparatively more exposure to these smaller, domestic businesses that have seen their valuations penalised. This means that the Lowland portfolio continues to trade at a valuation discount to the broad UK market:

	Lowland	FTSE All-Share
12 month historic P/E	10.2x	12.5x

Source: Janus Henderson Investors as at 30 September 2024.

Dividends

The earnings were held back by the strength of sterling in the second half of the financial year (as some dividends are paid in overseas currencies such as the US Dollar), as well as the delay of ex dividend dates to our 2024/25 financial year.  It is also notable that some of our better performing holdings are lower yielding or are not yet back on the dividend list. An example of this amongst the larger company holdings would be Rolls-Royce and in the smaller, recovery stock, Renold.  These holdings have provided capital growth and when that capital is recycled into dividend paying shares they help Lowland's income growth. It is capital growth that over time produces sustainable income growth.  There is also a growing trend for companies to prefer share buybacks rather than special dividends if they believe they have excess cash and the graph below shows this increase in share buybacks reported over the past twenty years.

http://www.rns-pdf.londonstockexchange.com/rns/1851P_6-2024-12-6.pdf

Outlook

Satisfactory company results have been achieved over the past year despite a UK economy that has fluctuated between modest growth and modest recession (with a general election and Budget uncertainty thrown in). This is because the companies held are not a proxy for the UK economy, but rather a diverse collection of conservatively managed, often market leading businesses that remain on modest valuations. As we look to an equally uncertain year ahead for the UK (and global) economy, when we return to company fundamentals, especially at current valuation levels, we cannot help but feel optimistic.

James Henderson and Laura Foll

Fund Managers

4 December 2024

Twenty Largest Holdings as at 30 September 2024

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

Rank 2024 (2023)	Company	% of portfolio	Approx. market cap	Valuation 2024 £'000
1 (3)	HSBC The global bank provides international banking and financial services. The diversity of the countries it operates in as well as its exposure to faster growing economies make it well placed.	2.6	£125.7bn	11,242
2 (4)	Standard Chartered A global bank providing international banking and financial services, with a particular focus on emerging markets. The position provides geographic diversification for the portfolio as well as being positively exposed to higher global interest rates.	2.4	£21.3 bn	10,535
3 (2)	BP A vertically integrated oil and gas business. At the current oil price it remains highly cash generative, much of which is being returned to shareholders via an attractive dividend yield and ongoing share buyback.	2.2	£64.4bn	9,595
4 (8)	Aviva The company provides a wide range of insurance and financial services. Under a new CEO there is heightened focus on simplifying the business.	2.2	£12.5bn	9,525
5 (1)	Shell A vertically integrated oil & gas company. At the current oil price the company is capable of generating substantial amounts of free cash flow. This cash is being allocated partly to shareholders (via a growing dividend and share buybacks) and partly to investing in the necessary transition away from fossil fuels.	2.1	£156.0bn	9,094
6 (13)	Barclays The company has a strong retail and corporate lending franchise combined with an investment bank.  Higher interest rates and improved returns in its investment bank could allow a period of better returns generation that in our view is not reflected in the current valuation.	2.1	£35.1bn	8,982
7 (15)	Marks & Spencer The company is a clothing and food retailer. Under a new management team it has refreshed its strategy, for example resetting prices lower and closing loss making stores. This has allowed it to gain market share on both sides of the business and upgrade earnings expectations.	2.1	£7.8bn	8,942
8 (5)	GSK A global pharmaceutical company, which is among the market leaders in areas such as HIV and vaccines.  Shares have come under pressure in recent years due to concerns around legal costs (now largely resolved) as well as a lack of significant new product sales.  The shares trade at a low valuation compared to the broader sector and over time we can see a route to substantial sales and earnings growth.	2.0	£60.2bn	8,856
9 (10)	Irish Continental[1] The group provides passenger transport, roll-on and roll-off freight transport and container services between Ireland, the United Kingdom and Continental Europe. It is a well managed business operating in a duopolistic industry.	2.0	£783.4m	8,622
10 (*)	Tesco The company is the largest food retailer in the UK.  By using scale to its advantage and keeping prices competitive for the customer, it is successfully growing sales and earnings.  The cash generative nature of the business allows an attractive dividend yield for shareholders as well as a share buyback.	2.0	£24.1bn	8,458
11 (6)	M&G The company is a financial services provider that was spun out of Prudential in 2019, providing insurance and asset management services. The capital generation of the group allows sizeable returns to shareholders via dividends and share buybacks.	1.9	£4.8bn	8,292
12 (7)	FBD1 The company is an Irish insurer with a focus on insurance coverage for the agricultural sector. It is a disciplined underwriter with a history of good returns generation and pays an attractive dividend yield.	1.9	£374.3m	7,944
13 (11)	International Personal Finance The company provides consumer lending services in countries such as Mexico and Eastern Europe. It has successfully grown its lending in recent years while remaining disciplined on credit quality.	1.8	£294.4m	7,843
14 (*)	BT Group The company is a provider of fixed and mobile communication services. Its ongoing roll-out of fibre to the home in the UK should allow substantial free cash flow growth over the long term, which in our view is not currently reflected in the shares.	1.6	£14.2bn	6,951
15 (*)	National Grid The company is a regulated utility providing electricity and gas distribution in the UK and US.  It is investing heavily in the UK electricity network ahead of the energy transition, providing a route to future earnings growth as it generates a return on these investments.  The shares pay an attractive dividend yield.	1.6	£49.0bn	6,874
16 (19)	Phoenix The company operates primarily in the UK and specialises in taking over and managing closed life insurance and pension funds.	1.6	£5.1bn	6,833
17 (18)	Hiscox The company is a global insurance provider that is growing well in markets such as US small business insurance.	1.6	£3.8bn	6,773
18 (12)	Rio Tinto The company is one of the world's largest mining businesses with a particular focus on iron ore, aluminium and copper. Its mines are well positioned on the cost curve, often at the lowest cost quartile globally, meaning that it can continue to be highly cash generative despite volatile commodity prices. This cash generation combined with a strong balance sheet has resulted in an attractive dividend yield.	1.5	£63.6bn	6,623
19 (16)	Anglo American A diversified mining company with exposure to commodities including copper, iron ore, diamonds and platinum. Its mix of commodity production means it could be well positioned to benefit from the need to decarbonise the global economy. For example, it is significantly exposed to copper where demand is likely to grow driven by its use in electric vehicles as well as renewable energy.	1.5	£32.9bn	6,557
20 (*)	Morgan Advanced Materials The company is a producer of specialist materials with specific properties (such as the ability to withstand high temperatures or high altitude), for use across a broad range of industries including transportation, renewable energy, healthcare and semiconductors.  The company has in recent years improved its cost competitiveness, reduced its debt and invested in new technologies.	1.5	£722.0m	6,555
				165,096

At 30 September 2024 these investments totalled £165,096,000 or 38.2% of portfolio.

*Not in the top 20 largest investments last year

MANAGING RISKS  

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

At the half year stage, the Board completed a thorough review of the principal risks and uncertainties facing the Company. It was not considered necessary to make changes to the principal risks and uncertainties as a result of this review.

Principal risks	Mitigating measure
Market, geopolitical, macroeconomic or environmental conditions cause a material fall in market value The wars in Ukraine and Israel and changes in the international political landscape have heightened tensions across the world, and significantly increased volatility in equity markets. Macroeconomic conditions in the UK, including political uncertainty and rising inflation have led to increased volatility in the UK equity market.	The Fund Managers maintain close oversight of the Company's portfolio, and in particular its gearing levels, and the performance of investee companies. Regular stress testing of the revenue account under different scenarios for dividends is carried out. The Board monitors volatility, and holds a regular dialogue with the Fund Managers to understand the impact on the Company's portfolio.
Global pandemic The potential impact of further global health crises on the Company's investments and its direct and indirect effects, including the effect on the global economy.	The Fund Managers maintain close oversight of the Company's portfolio, and in particular its gearing levels, and the performance of investee companies. Regular stress testing of the revenue account under different scenarios for dividends is carried out. The Board monitors the operations of the Company and its service providers to ensure that they continue to be appropriate, effective and properly resourced.
Investment activity and strategy risk An inappropriate investment strategy, failure to take account of climate risk impacts on the portfolio, or poor execution, for example, in terms of asset allocation or level of gearing, may result in underperformance against the Company's benchmark index and the companies in its peer group, and also in the Company's shares trading on a wider discount to the net asset value per share.	The Board manages these risks by ensuring a diversification of investments and a regular review of the extent of borrowings. Janus Henderson operates in accordance with investment limits and restrictions and policy determined by the Board, which includes limits on the extent to which borrowings may be employed. The Board reviews the investment limits and restrictions on a regular basis and the Manager confirms adherence to them every month. Janus Henderson provides the Board with management information, including performance data and reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Fund Managers at each Board meeting and monitors risk factors including ESG factors in relation to climate risk, in respect of the portfolio. Investment strategy is reviewed at each meeting.
Portfolio and market price Although the Company invests almost entirely in securities that are listed on recognised markets, share prices may move rapidly. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on equity shareholders' funds.	The Board reviews the portfolio at the five Board meetings held each year and receives regular reports from the Company's brokers. A detailed liquidity report is considered on a regular basis. The Fund Managers closely monitor the portfolio between meetings and mitigate this risk through diversification of investments. The Fund Managers periodically present the Company's investment strategy in respect of current market conditions. Performance relative to the FTSE All-Share Index, and other UK equity income trusts is also monitored.
Dividend income A reduction in dividend income could adversely affect the Company's dividend record.	The Board reviews income forecasts at each meeting. The Company has revenue reserves of £9.6 million (before payment of the third interim and final dividend) and distributable capital reserves of £292.1 million.
Financial risk The financial risks faced by the Company include market price risk, interest rate risk, liquidity risk, currency risk and credit and counterparty risk.	The Company minimises the risk of a counterparty failing to deliver securities or cash by dealing through organisations that have undergone rigorous due diligence by Janus Henderson. The Company holds its liquid funds almost entirely in interest bearing bank accounts in the UK or on short-term deposit. This, together with a diversified portfolio which comprises mainly investments in large and medium sized listed companies mitigates the Company's exposure to liquidity risk. Currency risk is mitigated by the low exposure to overseas stocks. Please also see note 14 to the accounts.
Gearing risk In the event of a significant or prolonged fall in equity markets gearing would exacerbate the effect of the falling market on the Company's NAV per share and, consequently, its share price.	At the point of drawing down debt, gearing will not exceed 20% of the portfolio valuation. The Company minimises the risk by the regular monitoring of the levels of the Company's borrowings in accordance with the agreed limits. The Company confirms adherence to the covenants of the loan facilities on a monthly basis.
Tax and regulatory Changes in the tax and regulatory environment could adversely affect the Company's financial performance, including the return on equity. A breach of s.1158/9 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage.	The Manager provides its services, inter alia, through suitably qualified professionals and the Board receives internal control reports produced by the Manager on a quarterly basis, which confirm legal and regulatory compliance. The Fund Managers also consider tax and regulatory change in their monitoring of the Company's underlying investments.
Operational Disruption to, or failure of, the Manager's or its administrator's (BNP Paribas) accounting, dealing or payment systems or the Depositary's records could prevent the accurate reporting and monitoring of the Company's financial position. Cyber crime could lead to loss of confidential data. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service.	The Board monitors the services provided by the Manager and its other suppliers and receives reports on the key elements in place to provide effective internal control. Cyber security is closely monitored and the Audit Committee receives an annual presentation from Janus Henderson's Head of Information Security. Details of how the Board monitors the services provided by Janus Henderson and its other suppliers and the key elements designed to provide effective internal control are explained further in the Internal Controls section of the Corporate Governance Statement in the annual report.

EMERGING RISKS

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

VIABILITY STATEMENT

The Company is a long-term investor; the Board believes it is appropriate to assess the Company's viability over a five-year period in recognition of our long-term horizon and what we believe to be investors' horizons, taking account of the Company's current position and the potential impact of the

principal and emerging risks and uncertainties as documented above in the annual report.

The assessment has considered the impact of the likelihood of the principal and emerging risks and uncertainties facing the Company, in particular investment strategy and performance against benchmark, whether from asset allocation or the level of gearing, and market risk, including

climate risk, in severe but plausible scenarios, and the effectiveness of any mitigating controls in place.

The Board has reviewed three additional model scenarios which evaluate the impact on the revenue forecast and reserves. These range from a worst case scenario which includes a 10% reduction in income and net assets, through to a scenario where there is no income growth and no reduction in income or net assets. Increasing dividends to shareholders could continue under all three scenarios,

although the Company would need to use its capital reserves in some cases. None of the results of the scenarios used would therefore threaten the viability of the Company.

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

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

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

Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five-year period. The Directors have also concluded that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements being 31 December 2025, and it is therefore appropriate to prepare these financial statements on a going concern basis.

RELATED PARTY TRANSACTIONS

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

In relation to the provision of services by Janus Henderson, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services, there have been no material transactions with Janus Henderson affecting the financial position of the Company during the year under review. More details on transactions with Janus Henderson, including amounts outstanding at the year end, are given in note 20 in the annual report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

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

On behalf of the Board

Robert Robertson

Chairman

4 December 2024

INCOME STATEMENT

	Year ended 30 September 2024			Year ended 30 September 2023
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Gains on investments held at fair value through profit or loss (note 2)	-	42,550	42,550	-	36,546	36,546
Income from investments (note 3)	19,666	-	19,666	20,669	-	20,669
Other interest receivable and similar income (note 4)	160	-	160	107	-	107
	----------	----------	---------	----------	----------	----------
Gross revenue and capital gains	19,826	42,550	62,376	20,776	36,546	57,322
Management fee	(867)	(868)	(1,735)	(856)	(857)	(1,713)
Administrative expenses	(802)	-	(802)	(686)	-	(686)
	----------	----------	----------	----------	----------	----------
Net return before finance costs and taxation	18,157	41,682	59,839	19,324	35,689	54,923
Finance costs	(1,115)	(1,115)	(2,230)	(1,027)	(1,027)	(2,054)
	----------	----------	----------	----------	----------	----------
Net return before taxation	17,042	40,567	57,609	18,207	34,662	52,869
Taxation on net return	(37)	-	(37)	(80)	-	(80)
	----------	----------	----------	----------	----------	----------
Net return after taxation	17,005	40,567	57,572	18,127	34,662	52,789
	----------	----------	----------	----------	----------	----------
Return per ordinary share - basic and diluted	6.29p	15.01p	21.30p	6.71p	12.83p	19.54p
	=====	=====	=====	=====	=====	=====

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

STATEMENT OF CHANGES IN EQUITY

Year ended 30 September 2024	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 1 October 2023	6,755	61,619	1,007	270,051	9,913	349,345
Net return after taxation	-	-	-	40,567	17,005	57,572
Third interim dividend (1.6p) for the year ended 30 September 2023 paid 31 October 2023	-	-	-	-	(4,323)	(4,323)
Final dividend (1.6p) for the year ended 30 September 2023 paid 31 January 2024	-	-	-	-	(4,323)	(4,323)
First interim dividend (1.6p) for the year ended 30 September 2024 paid 30 April 2024	-	-	-	-	(4,323)	(4,323)
Second interim dividend (1.6p) for the year ended 30 September 2024 paid 31 July 2024	-	-	-	-	(4,323)	(4,323)
Return of unclaimed dividends					8	8
At 30 September 2024	6,755	61,619	1,007	310,618	9,634	389,633
	======	======	======	======	======	======

Year ended 30 September 2023	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 1 October 2022	6,755	61,619	1,007	235,389	8,266	313,036
Net return after taxation	-	-	-	34,662	18,127	52,789
Third interim dividend (1.525p) for the year ended 30 September 2022 paid 31 October 2022	-	-	-	-	(4,120)	(4,120)
Final dividend (1.525p) for the year ended 30 September 2022 paid 31 January 2023	-	-	-	-	(4,120)	(4,120)
First interim dividend (1.525p) for the year ended 30 September 2023 paid 28 April 2023	-	-	-	-	(4,120)	(4,120)
Second interim dividend (1.525p) for the year ended 30 September 2023 paid 31 July 2023	-	-	-	-	(4,120)	(4,120)
	---------	----------	----------	-----------	----------	----------
At 30 September 2023	6,755	61,619	1,007	270,051	9,913	349,345
	======	======	======	======	======	======

STATEMENT OF FINANCIAL POSITION

	As at 30 September 2024 £'000	As at 30 September 2023 £'000
Fixed assets
Investments held at fair value through profit or loss:
Listed at market value on the main market	318,802	294,983
Listed at market value on AIM	55,176	52,186
Listed at market value overseas	19,969	15,484
Unlisted	2,277	2,368
Investments on loan	36,393	27,408
	-----------	-----------
	432,617	392,429
	-----------	-----------
Current assets
Debtors	2,428	2,805
Cash at bank	5,161	2,926
	-----------	-----------
	7,589	5,731
	-----------	-----------
Creditors: amounts falling due within one year	(20,749)	(19,003)
	-----------	-----------
Net current liabilities	(13,160)	(13,272)
	-----------	-----------
Total assets less current liabilities	419,457	379,157
Creditors: amounts falling due after one year	(29,824)	(29,812)
	-----------	-----------
Net assets	389,633	349,345
	=======	=======
Capital and reserves
Called up share capital	6,755	6,755
Share premium account	61,619	61,619
Capital redemption reserve	1,007	1,007
Other capital reserves	310,618	270,051
Revenue reserve	9,634	9,913
	-----------	-----------
Total shareholders' funds	389,633	349,345
	=======	=======
Net asset value per ordinary share - basic and diluted	144.2p	129.3p
	=======	=======

STATEMENT OF CASH FLOWS

	Year ended 30 September 2024 £'000	Year ended 30 September 2023 £'000
Cash flows from operating activities
Net return before taxation	57,609	52,869
Add back: finance costs	2,230	2,054
Add: gains on investments held at fair value through profit or loss	(42,550)	(36,546)
Withholding tax on dividends reclaimed	16	41
Decrease/(increase) in other debtors	324	(1,697)
Increase/(decrease) in other creditors	541	(496)
	-----------	-----------
Net cash inflow from operating activities	18,170	16,225
Cash flows from investing activities
Purchase of investments	(78,497)	(56,075)
Sale of investments	80,668	52,572
	-----------	-----------
Net cash inflow/(outflow) from investing activities	2,171	(3,503)
Cash flows from financing activities
Equity dividends paid (net of refund of unclaimed distributions and reclaimed distributions)	(17,284)	(16,480)
Loans drawn down	37,736	55,092
Loans repaid	(36,378)	(55,796)
Interest paid	(2,177)	(1,996)
	-----------	-----------
Net cash outflow from financing activities	(18,103)	(19,180)
	-----------	-----------
Net increase/(decrease) in cash and cash equivalents	2,238	(6,458)
Cash and cash equivalents at start of year	2,926	9,395
Effect of foreign exchange rates	(3)	(11)
	-----------	-----------
Cash and cash equivalents at end of year	5,161	2,926
	=======	=======
Comprising:
Cash at bank	5,161	2,926
	-----------	-----------
	5,161	2,926
	=======	=======
Cash inflow from dividends net of taxation was £19,961,000 (2023: £18,934,000) and interest received was £75,000 (2023: £62,000)

NOTES TO THE FINANCIAL STATEMENTS

1.	Accounting Policies
	a) Basis of preparation The company is a registered investment company as defined in section 833 of the Companies Act 2006 and is incorporated in the United Kingdom. It operates in the United Kingdom and is registered at 201 Bishopsgate, London EC2M 3AE. The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 - The Financial Reporting Standard applicable in the UK and Republic of Ireland and with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ('the SORP') issued in July 2022 by the Association of Investment Companies. The principal accounting policies applied in the presentation of these financial statements are set out below. These policies have been consistently applied to all the years presented. The Financial Statements have been prepared under the historical cost basis except for the measurement of fair value of investments. In applying FRS102, financial instruments have been accounted for in accordance with Section 11 and 12 of the standard. All of the Company's operations are of a continuing nature. b) Going Concern The Directors have considered the liquidity of the portfolio and concluded that the assets of the Company consist of securities that are readily realisable. They have also considered the impact of the war in Ukraine and Israel and changes in the international political landscape, including revenue forecasting, and a review of covenant compliance including the headroom above the most restrictive covenants. They have concluded that they are able to meet their financial obligations as they fall due for at least twelve months from the date of approval of these financial statements. Having assessed these factors, the principal risks and other matters discussed in connection with the viability statement, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements. c) Investments held at Fair Value through Profit or Loss Listed investments, including AIM stocks are held at fair value through profit or loss and accordingly are valued at fair value, deemed to be the quoted bid price or the last trade price depending on the convention of the exchange on which the investment is quoted. Unlisted investments have also been classified as held at fair value through profit or loss and are valued by the Directors using primary valuation techniques such as recent transactions and net assets. Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Income Statement as 'gains or losses on investments held at fair value through profit or loss'. Also included in this are transaction costs incurred on the purchase and disposal of investments. All purchases and sales are accounted for on a trade date basis. d) Foreign Currency The results and financial position of the Company are expressed in pounds sterling, which is the functional and presentational currency of the Company. Sterling is the functional currency because it is the currency of the primary economic environment in which the Company operates. Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily exchange rates. Monetary assets and liabilities and equity investments held at fair value through profit or loss which are denominated in foreign currencies at the Statement of Financial Position date are translated into sterling at the exchange rates ruling at that date. Any gains or losses on the translation of foreign currency balances, whether realised or unrealised, are taken to the capital or to the revenue return of the Income Statement, depending on whether the gain or loss is of a capital or revenue nature. e) Income Dividends receivable on equity shares are taken to the revenue return on an ex-dividend basis except where, in the opinion of Directors, the dividend is capital in nature in which case it is taken to the 'gains/(losses) on investments' in the capital return column. The ordinary element of scrip dividends received in lieu of cash dividends is recognised as revenue. Any enhancement above the cash dividend is treated as capital. Income distributions from UK Real Estate Investment Trusts will be split into two parts: a Property Income Distribution ('PID') made up of rental revenue; and a non-PID element, consisting of non-rental revenue. The PID element is subject to corporation tax as schedule A revenue, while the non-PID element will be treated as franked revenue. Bank interest is accounted for monthly on an accruals basis and shown in the revenue return based on amounts to which the Company is entitled. Fees earned from stock lending are accounted for monthly on an accruals basis and shown in the revenue return after deduction of amounts withheld by the counterparty arranging the stock lending facility. f) Management Fees, Administrative Expenses and Finance Costs All expenses and finance costs are accounted for on an accruals basis. All administrative expenses except the management fee and finance costs are charged to the revenue return of the Income Statement. The management fee and finance costs are charged 50% to the capital return of the Income Statement and 50% to the revenue return of the Income Statement. g) Taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on the taxable profit for the year. Taxable profit differs from return before taxation as reported in the Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using the applicable rate of corporation tax for the accounting period. In line with the recommendations of the AIC SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Income Statement is the 'marginal basis'. Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Income Statement, then no tax relief is transferred to the capital return column. Deferred taxation is provided on all timing differences that have originated but not reversed by the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of timing differences can be deducted. Any liability to deferred tax is provided at the average rate of tax expected to apply based on tax rates and laws that have been enacted or substantively enacted at the Statement of Financial Position date. Deferred tax assets and liabilities are not discounted to reflect the time value of money. h) Borrowings Interest bearing bank loans and overdrafts are recorded initially at fair value, being the proceeds received, less direct issue costs. They are subsequently re-measured at amortised cost. Finance costs including interest payable, premiums on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Senior unsecured notes are recorded initially at proceeds received, less direct issue costs. They are subsequently re-measured at amortised cost. The issue costs will be amortised over the life of the loan notes. Finance costs, including interest payable, are accounted for on an accruals basis in the Income Statement using the effective interest rate method. i) Dividends Payable to Shareholders Dividends payable to shareholders are recognised in the financial statements when they are paid, or in the case of final dividends, when they are approved by shareholders. Dividends are dealt with in the Statement of Changes in Equity. j) Capital and Reserves Called up share capital represents the nominal value of ordinary shares issued. The share premium account represents the premium above nominal value received by the Company on issuing shares net of issue costs. The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been distributed to shareholders as a dividend. The capital redemption reserve represents the nominal value of ordinary shares that have been repurchased and cancelled. Other capital reserves are split into two components, the capital reserve arising on investments sold and the capital reserve arising on investments held. The following analyses what is accounted for in each of these components. Capital reserve arising on investments sold The following are accounted for in this reserve: ·      gains and losses on the disposals of investments; ·      realised foreign exchange differences of a capital nature; ·      cost of repurchasing ordinary share capital; and ·      expenses and finance costs allocated to capital net of tax relief. Capital reserve arising on revaluation of investments held The following are accounted for in this reserve: ·      increases and decreases in the valuation of investments held at the year end; and ·      unrealised foreign exchange differences of a capital nature. k) Distributable Reserves The Company's capital reserve arising on investments sold (which may be restricted by unrealised losses) and revenue reserve may be distributed by way of a dividend. l) Significant Accounting Judgements and Estimates The preparation of the Company's financial statements on occasion requires the Directors to make judgements, estimates and assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures. These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the next financial year. The Directors do not believe that any accounting judgements or estimates have been applied to this set of financial statements that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities. Nor do they believe that there are any estimates that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year. In line with UK GAAP investments are valued at fair value which are predominantly quoted prices for the investments in active markets and therefore reflect participants' views of climate change risk.
2.	Gains on investments held at fair value through profit or loss	2024 £'000	2023 £'000
	Gains on the sale of investments based on historical cost	8,158	7,085
	Less: revaluation (losses)/gains recognised in previous years	(5,289)	3,499
		-----------	-----------
	Gains on investments sold in the year based on carrying value at previous Statement of Financial Position date	2,869	(10,584)
	Revaluation gains on investments held at 30 September	39,684	25,973
	Exchange losses	(3)	(11)
		----------	----------
		42,550	36,546
		======	======

3.	Income from Investments	2024 £'000	2023 £'000
	UK dividends:
	Listed investments	16,441	17,210
	Unlisted	-	13
	Property income dividends	731	615
		---------	---------
		17,172	17,838
		---------	---------
	Non UK dividends:
	Overseas dividend income	2,494	2,831
		---------	---------
		2,494	2,831
		---------	---------
		19,666	20,669
		=====	=====

4.	Other Interest Receivable and Similar Income	2024 £'000	2023 £'000
	Stock lending commission	74	42
	Income from underwriting	8	-
	Bank interest	78	65
		---------	---------
		160	107
		=====	=====
	Stock lending commission has been shown net of brokerage fees of £19,000 (2023: £11,000)

5.	Return per Ordinary Share - Basic and Diluted
	The return per ordinary share is based on the net return attributable to the ordinary shares of £57,572,000 (2023: net return of £52,789,000) and on 270,185,650 ordinary shares (2023: 270,185,650) being the weighted average number of ordinary shares in issue during the year. The return per ordinary share can be further analysed between revenue and capital, as below.
		2024 £'000	2023 £'000
	Net revenue return	17,005	18,127
	Net capital return	40,567	34,662
		---------	---------
	Net total return	57,572	52,789
		=====	=====
	Weighted average number of ordinary shares in issue during the year	270,185,650	270,185,650
		2024 Pence	2023 Pence
	Revenue return per ordinary share	6.29	6.71
	Capital return per ordinary share	15.01	12.83
		----------	----------
	Total return per ordinary share	21.30	19.54
		======	======

The Company does not have any dilutive securities, therefore the basic and diluted returns per share are the same.

6.	Dividends Paid and Payable on the Ordinary Shares
	Dividends on ordinary shares	Record date	Payment date	2024 £'000	2023 £'000
	Third interim dividend (1.525p) for the year ended 30 September 2022	30 September 2022	31 October 2022	-	4,120
	Final dividend (1.525p) for the year ended 30 September 2022	30 December 2022	31 January 2023	-	4,120
	First interim dividend (1.525p) for the year ended 30 September 2023	31 March 2023	28 April 2023	-	4,120
	Second interim dividend (1.525p) for the year ended 30 September 2023	30 June 2023	31 July 2023	-	4,120
	Third interim dividend (1.6p) for the year ended 30 September 2023	28 September 2023	31 October 2023	4,323	-
	Final dividend (1.6p) for the year ended 30 September 2023	28 December 2023	31 January 2024	4,323	-
	First interim dividend (1.6p) for the year ended 30 September 2024	11 April 2024	30 April 2024	4,323	-
	Second interim dividend (1.6p) for the year ended 30 September 2024	27 June 2024	31 July 2024	4,323	-
	Return of unclaimed dividends			(8)	-
				---------	---------
				17,284 =====	16,480 =====

The third interim dividend and the final dividend for the year ended 30 September 2024 have not been included as a liability in these financial statements. The total dividends payable in respect of the financial year, which form the basis of the retention test under Section 1158 of the Corporation Tax Act 2010, are set out below.
		2024 £'000
	Revenue available for distribution by way of dividend for the year	17,005
	First interim dividend (1.6p) for the year ended 30 September 2024	(4,323)
	Second interim dividend (1.6p) for the year ended 30 September 2024	(4,323)
	Third interim dividend (1.6p) for the year ended 30 September 2024	(4,323)
	Final dividend (1.625p) for the year ended 30 September 2024 (based on 270,185,650 ordinary shares in issue at 3 December 2023)	(4,391)
		---------
	Transfer from reserves	(3551)
		=====

¹ The residual will be transferred from the revenue reserve (2023: £1,241,000 transferred to the revenue reserve) 

7.	Called up Share Capital
			Number of shares entitled to dividend	Total number          of shares	Nominal value of shares £'000
	At 30 September 2024 and 2023		270,185,650	270,185,650	6,755
			-----------	-----------	-----------

No shares were allotted or bought back during the year (2023: nil)

8.	Net Asset Value per Ordinary Share
	The net asset value per ordinary share of 144.2p (2023: 129.3p) is based on the net assets attributable to the ordinary shares of £389,633,000 (2023: £349,345,000) and on 270,185,650 (2023: 270,185,650) shares in issue on 30 September 2024.                                          The movements during the year of the assets attributable to the ordinary shares were as follows:
		2024 £'000	2023 £'000
	Total net assets at start of year	349,345	313,036
	Total net return after taxation	57,572	52,789
	Net dividends paid in the year:
	Ordinary shares	(17,284)	(16,480)
		-----------	-----------
	Net assets attributable to the ordinary shares at 30 September	389,633	349,345
		======	======

9.	2024 Financial Information
	The figures and financial information for the year ended 30 September 2024 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts. The Company's annual financial statements for the year to 30 September 2024 have been audited but have not yet been delivered to the Registrar of Companies. The Independent Auditor's Report on the 2024 annual financial statements was unqualified, did not include reference to any matter to which the Auditor drew attention without qualifying the report, and did not contain any statements under sections 498(2) or 498(3) of the Companies Act 2006.
10.	2023 Financial Information
	The figures and financial information for the year ended 30 September 2023 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts. The Company's annual financial statements for the year to 30 September 2023 have been audited and filed with the Registrar of Companies. The Independent Auditor's Report on the 2023 annual financial statements was unqualified, did not include reference to any matter to which the Auditor drew attention without qualifying the report, and did not contain any statements under sections 498(2) or 498(3) of the Companies Act 2006.
11.	Dividend
	The final dividend, if approved by the shareholders at the Annual General Meeting, of 1.625p per ordinary share will be paid on 31 January 2025 to shareholders on the register of members at the close of business on 27 December 2023. This will take the total dividends for the year to 6.425p (2023: 6.25p). The Company's shares will be traded ex-dividend on 24 December 2024.
12.	Annual Report
	The Annual Report will be posted to shareholders in December 2024 and will be available on the Company's website (www.lowlandinvestment.com).

13.	Annual General Meeting
	The Annual General Meeting will be held on 28 January 2025 at 12.30pm at 201 Bishopsgate, London EC2M 3AE. The Notice of Meeting is included in the Annual Report.

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

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

[1] Overseas listed stock (Ireland)

 

END