Half-year Report

STS Global Income & Growth Trust

05 December 2024

 

To:                          RNS

From:                    STS Global Income & Growth Trust plc

LEI:                         549300UZ1Y7PPQYJGE19

Date:                     5 December 2024

Half-year financial report

Six months to 30 September 2024

FINANCIAL HIGHLIGHTS

 

Total return^ (including reinvested dividends)	Six months ended 30 September 2024 %	Six months ended 30 September 2023 %
Net asset value per share	3.8	0.7
Lipper Global - Equity Global Income Index	2.5	0.5
Share price	3.9	3.2

Key data	As at 30 September 2024	As at 31 March 2024
Net asset value per share (cum income)˄	230.82p	223.71p
Net asset value per share (ex income)˄	227.02p	222.86p
Share price	227.00p	220.00p
Discount ˄	(1.65%)	(1.66%)
Net assets	£295,715,000	£314,353,000

Income	Six months ended 30 September 2024	Six months ended 30 September 2023
Revenue per share	3.66p	3.31p
Dividend per share	3.17p	3.05p

^ For details of all Alternative Performance Measures refer to the half-year report.

INTERIM MANAGEMENT REPORT

Chairman's statement

Introduction

It is pleasing to report on a period of positive returns for your Company over the six-month period to 30 September 2024. During this period, the net asset value total return reached +3.8%, outperforming the +2.5% return of our benchmark, the Lipper Global - Equity Global Income Index.

These returns have been achieved against a background in which equity markets globally have had to deal with a heightened level of geopolitical risk in Ukraine and in the Middle East, offset by clear evidence that the interest rate cycle has peaked in many developed economies. There are signs that inflation rates, while still variable, have passed their peak levels.

There has been much for markets to consider, including the recent UK Budget and US election. More recently, a sharp rise in government bond yields in the US and UK might indicate that there is no consensus as to how the next part of the cycle might play out.

The US equity market has continued to deliver a strong performance and has also continued to do so with aggregate returns still driven by a small cohort of companies, by number, but which represent a significant weight within the S&P 500 Index (the so called "Magnificent Seven" mega-cap tech-related stocks).

Revenue and dividends

The revenue position for the period reflects the enlarged asset base of the Company following the merger with Troy Income & Growth Trust plc ('TIGT') in March of this year. Consequently, the total revenue for the period of £5.8m was significantly greater than the £4.0m earned in the period to 30 September 2023. Total investments at the period end were £309.0m, compared with £219.8m at 30 September 2023.

The Board declared a first interim dividend of 1.586 pence per ordinary share, which represented a 4% increase on the equivalent dividend for the prior year. Barring unforeseen circumstances, it is the Board's intention to increase the total dividend for the year to 31 March 2025 by 4% and

consequently, a second interim dividend of 1.586p has been declared. The second interim dividend will be paid on 17 January 2025 to shareholders on the register on 20 December 2024. The ex-dividend date will be 19 December 2024.

There are a number of conflicting factors that can determine the revenue outcome for the Company in any given period, the principal one being the timing and level of dividend payments by underlying investee companies. However, and as discussed previously, the average Sterling/US Dollar exchange rate for a fiscal period is also of critical importance.

In the period under review, 40% of your Company's total revenue was denominated in US Dollars. Of this, 34% consisted of dividends paid by US based companies and 6% was from non-US based companies that choose to account and pay dividends in US Dollars - examples being Diageo and Accenture.

In the six months under review, the Sterling/US Dollar exchange rate moved from 1.26 to 1.34 but subsequently Sterling has weakened against the US Dollar, owing to recent reductions in UK short term interest rates and the view that the likely economic policies of the new US President may give the Federal Reserve less scope to reduce rates than was previously expected.

The Board will seek to mitigate the effect of exchange rate variation by using revenue reserves and if necessary capital reserves to supplement revenue earnings in periods of adverse currency movement. The objective being to pay a consistently rising dividend over time.

Discount management

Your Board has adopted a discount control mechanism that has the objective of seeking to ensure that the Company's shares trade at a value close to their underlying net asset value on a consistent basis. Shares will be bought in when there are surplus net sellers in the market and shares may

be issued in periods of net demand.

In the six-month period under review, no shares were issued and 12.4m were purchased at an average discount of 1.3%. This amount represents 8.8% of the shares in issue at the start of the period and enhanced the net asset value of the Company by £338,000. Such a significant level of buy-in is consistent with recent trends in the investment trust and open-ended investment company sectors. Both sectors have seen substantial outflows of funds recently, for a variety of reasons, not least the anticipation of changes to the rates of capital gains taxes in the recent Budget.

There are also several other factors which are affecting the demand for shares of investment companies. The wealth management sector has seen considerable consolidation in recent years and as a result some management houses now have substantially greater assets under management than before the consolidation. This has changed the role that investment trusts can play in their client portfolios and has led to some of these managers being net sellers of the sector. Your Company has been affected by such activity.

The buy-in has achieved its objective and the average share price discount over the period was 1.4%.

At the AGM in June 2024 the Company renewed its authority to buy in up to 14.99% of its then issued share capital. In the six months to 30 September 2024 more than half of this authority was used - 8.8% of the share capital was purchased from selling shareholders.

In order to maintain the maximum flexibility and allow share purchases to continue to meet selling demand, the Board is now seeking to renew its buyback authority. A General Meeting will be held on 8 January 2025 where a resolution will be proposed to renew the buy back authority to 14.99% of the issued share capital. The Board encourages shareholders to support this resolution.

Board considerations

Following the TIGT merger in March, the Board briefly expanded to eight members. As planned, two directors retired at the AGM in June 2024, leaving a current Board of six.

At the 2025 AGM, I will retire after nine years of service on the Board, in line with corporate governance best practices. I am pleased to announce that it is intended that Sarah Harvey will succeed me as Chair, subject to her re-election. Sarah has served as a Board member since 2018 and as Senior Independent Director since 2022. Sarah has also served as Chair of the Marketing and Communications Committee, has extensive knowledge of the Company and brings vast experience from her broader career.

Outlook

I am pleased that on current expectations your Company will produce a real increase in the dividend paid to shareholders in the current financial year. This is a testament to the quality and underlying growth and profitability of the companies in the portfolio - characteristics actively sought by your Managers.

There are several challenges to equity markets at present including rising bond yields and electoral and geopolitical concerns. Indeed, Donald Trump's recent election success resulted in a continued rise in bond yields, a strengthening of the US Dollar and a positive reaction in the US equity markets. The portfolio is managed in a dynamic manner and the Board is confident that the Managers can take advantage of whatever opportunities lie ahead.

John Evans

Chairman

4 December 2024

Manager's review

The Company made progress in the first half of the year, advancing by +3.8% in net asset value terms relative to a return of +2.5% for the comparison index.

Unilever was a strong performer. After a long period of lacklustre returns investors are increasingly convinced that the business is being re-invigorated by the new leadership of CEO, Hein Schumacher and CFO, Fernando Fernandez. We have met both executives and share this enthusiasm. A greater willingness to focus the business on the best products and brands, as well as a simplification of incentives while bearing down on costs, should in time lead to better growth and stronger margins. The rise in the share price has anticipated some of this improvement but we believe this operating momentum can continue for some years.

We have had a long-term investment in US listed payroll and human resources software business Paychex. The company delivered a strong performance in recent months following a period of consolidation in the share price despite consistent results and growth in underlying free cash flow. They have also rewarded investors with strong dividend growth which has averaged 9.65% per

annum over the last 5 years. The company remains a core holding.

Philip Morris was the largest contributor to our performance, rising by 34.8% during the half year. The company has done an excellent job of leading the industry in its transition away from combustible products to much less harmful alternatives. They have established their heat-not-burn product, IQOS, as the leading premium product in the category globally. This leadership has been bolstered by the acquisition of Swedish Match which brought with it the leading modern oral brand Zyn. Recent results have been strong, leading investors to ascribe a premium valuation to

the business relative to peers.

British American Tobacco ('BAT') also appreciated in the period under review. Although the strategy pursued by the business has lacked the clarity and vision of the leadership team at Philip Morris, BAT should also benefit, with a lag, from many of the same trends that are driving the Philip Morris share price. This second-mover status is more than reflected in the very low valuation of the shares. We expect the company to make further progress in its non-combustible business as well as show some improvement in the US where they have been losing market share. This should allow the shares to continue to advance in the coming months.

The two companies that detracted most from performance were both in the spirits business. Diageo and Pernod have each suffered from a similar malaise as they work through the aftermath of the COVID-inspired boom in the sector. An industry that usually enjoys consistent demand saw a surge in sales during global lockdowns as consumers filled their cupboards with more premium bottles of cocktail ingredients than would normally be the case. This boom has resulted in a mini-bust as consumers and companies have had to work through excess inventory. The situation has been worsened by the effects of inflation and fading stimulus on consumption. While the current operating environment remains tough, we think this will improve in time and investors will once again be reminded of the excellent competitive advantages these companies enjoy.

Also weak over this period was Canadian National Railway. We continue to believe this is an excellent long-term investment for the trust. At a recent meeting with the CFO, Ghislaine Houle, the company described how they have suffered from several short-term problems. These included

floods and wildfires, which should be expected, but also labour disputes, which have been more challenging. They have also seen some weakness in end markets which would be consistent with a slowing economy. Once resolved we think the company can return to its long-term growth aspiration of over 10% earnings per share growth owing to the strong competitive advantages the business enjoys. This should allow the investment to make a healthy contribution to the growth in free cashflow in the portfolio which underpins dividend growth.

Finally, Domino's Pizza was dull as investors fret about the difficult consumer environment. We think the company is pursuing a sound strategy under the new CEO, Andrew Rennie, who has had considerable success managing similar businesses in Europe and Australia. The shares remain very good value and dividend growth has been consistent.

No major purchases or sales have been made over this period.

Investment outlook

Recent gains in our portfolio are welcome and are in part a function of our cautious view. Investors have been drawn to the type of dependable, predictable businesses we favour, as a result of both decent valuations and concerns about the economic outlook. Given the material and rapid rise in

interest rates globally the resilience of the US economy has been impressive. COVID distortions which, remarkably, are still working their way through the global economy, together with the fiscal policy response to that shock, may explain some of this persistent momentum. To us this means the effects of the change of the cost of capital may have been delayed but are unlikely to have been avoided entirely. Indeed, outside of the US, economies have been less buoyant, notably in Europe.

To this uncertain outlook must be added our observation that on many long-term measures the US equity market is very fully valued. This not only suggests that returns from the broader market may be constrained but that many of the high-quality global income franchises we would love to own in the trust currently remain too expensive in our judgement. Conversely the businesses we do own continue generally to be good value and will be resilient should the economic picture darken.

Two events occurred post the period under review which may affect the portfolio, at least in the short term, and are worthy of comment. The new UK Government announced their first budget and the US electorate voted to return Donald Trump to the White House.

As a global, long term investment portfolio the actions of the UK Government generally have little bearing on the outlook for our companies and this was no exception. Although listed in the UK, the companies in which we are invested are generally global in scope and have relatively limited operations in the UK. As such the main tax rise contained in the budget, an increase in employer National Insurance contributions to 15%, which being a tax on domestic employment rather than global revenues, limits the impact on our companies. We have two UK focused investments, Admiral Group and Domino's Pizza. In the case of the former the effect of the tax rise should be able to be passed on through higher insurance premiums in time. For Domino's Pizza the main burden of the tax rise will fall on the franchisees rather than the entity in which we are invested. While this is not ideal it will be manageable.

The recent US election result is potentially more impactful, although even here the Presidential 4-year term should be compared to our average holding period for an investment of over 10 years. The emphatic victory by President-Elect Trump has caused some short-term reaction in global markets. These have reflected an upbeat attitude in capital markets to the perceived benefits of a Trump administration, notably around deregulation. Hence, we have seen strength in areas of the equity market such as banking, technology, Bitcoin and European defence. The US Dollar has been strong, spreads tight and equity volatility has declined. Some of our holdings, such as, Paychex, ADP and IHG have benefited from this.

At the same time less favoured areas have struggled, most obviously renewable energy and non-US currencies, including Sterling, but most impactfully perhaps the US Treasury market. The yield on the US 2-year note has climbed from a recent low of 3.54% to 4.17%, similarly the US 10-year yield has moved from 3.64% to a recent high of 4.45% as the bond market correctly anticipated a Trump win and the likelihood of greater inflation. The enactment of unfunded tax cuts, stricter treatment of migrants and especially the imposition of tariffs will all contribute to this risk. When this is combined with a greater questioning of the independence of the US Federal Reserve, a more balanced view than is implied by recent excitement may be wise.

Much is uncertain as rhetoric may not predict policy outcomes. However, markets have been quick to price in the positive attributes of the Trump agenda while potentially ignoring the negatives. As regards the portfolio, we will be monitoring events closely to take advantage of opportunities that arise.

We therefore have confidence that the Company will be able to continue to deliver a balance of capital gains and income underpinned by growing free cash flow from our portfolio of companies. We also remain excited by the prospect of being able to deploy capital into new ideas, should valuations become more attractive.

James Harries

4 December 2024

Statement of Directors' responsibilities

A review of the half year and the outlook for the Company can be found in the Chairman's statement and Manager's review above.

Risk and mitigation

The Company's business model is longstanding and resilient to most of the short-term uncertainties that it faces, which the Board believes are effectively mitigated by its internal controls and the oversight of the Manager, as described in the latest annual report. The principal and emerging risks and uncertainties are therefore largely longer-term and driven by the inherent uncertainties of investing in global equity markets. The Board believes that it is able to respond to these longer-term risks and uncertainties with effective mitigation so that both the potential impact and the likelihood of these seriously affecting shareholders' interests are materially reduced.

Risks are regularly monitored at Board meetings and the Board's planned mitigation measures are described in the latest annual report. The Board maintains a risk register and also carries out a risk review as part of its annual strategy meeting.

A detailed explanation of the principal risks and uncertainties facing the Company and how the Board manages them can be found in the 2024 annual report, which can be found on the Company's website https://www.stsplc.co.uk/ In the view of the Board, these principal risks and uncertainties at the year end remain. The Board continue to work with the agents and advisers to the Company to manage these risks. The risks identified are as applicable to the remaining six months of the year as they were to the six months under review.

Going concern status

The Company's business activities, together with the factors likely to affect its future development, performance and position, are continually monitored by the Board.

The financial position of the Company as at 30 September 2024 is shown on the unaudited statement of financial position below. The unaudited statement of cash flow of the Company is set out below.

The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets consist primarily of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The Directors are mindful of the principal risks disclosed above. They have reviewed revenue forecasts and the financial position of the Company. They believe that the Company has adequate financial resources and a suitably liquid investment portfolio to continue its operational existence for the foreseeable future and for at least one year from the date of signing of these financial statements. Accordingly, the Directors consider it appropriate to continue to adopt the going concern basis in preparing these financial statements.

Related party transactions

During the first six months of the year, no transactions with related parties have taken place which have materially affected the financial position or performance of the Company. There have been no material changes in any related party transaction described in the annual report for the year ended 31 March 2024.

Directors' responsibility statement

The Directors are responsible for preparing the half yearly financial report in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

•             the financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, in particular with Financial Reporting Standard 104 "Interim Financial Reporting" and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued by the AIC in July 2022;

•             the interim management report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months of the financial year and description of principal risks and uncertainties for the remaining six months of the year); and

•             the interim management report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and charges therein).

By order of the Board

John Evans,

Chairman

4 December 2024

Portfolio Summary Portfolio distribution as at 30 September 2024
By region (excluding cash)	As at  30 September 2024	As at  31 March 2024
	%	%
North America	47.1	51.5
Europe	47.0	42.9
Asia	5.9	5.6
	100.0	100.0

By sector (excluding cash)	As at  30 September 2024	As at  31 March 2024
	%	%
Consumer staples	33.8	34.3
Industrials	15.7	17.9
Information technology	15.1	11.7
Healthcare	14.2	14.3
Financials	8.1	8.4
Consumer discretionary	7.2	7.8
Communication services	3.8	4.3
Real estate	2.1	1.3
	100.0	100.0

By asset class (including cash and borrowings)	As at  30 September 2024	As at  31 March 2024
	%	%
Equities	104.8	102.9
Cash	0.2	2.0
Borrowings	(5.0)	(4.9)
	100.0	100.0

Ten largest holdings	30 September 2024	30 September 2024	31 March 2024	31 March 2024
	Market value	% of total	Market value	% of total
	£000	portfolio	£000	portfolio
Paychex	16,399	5.3	17,374	5.3
Philip Morris	15,615	5.1	13,179	4.1
British American Tobacco	15,539	5.0	14,458	4.4
Unilever	14,888	4.8	16,261	5.0
CME Group	14,599	4.7	16,245	5.0
Relx	13,948	4.5	14,361	4.4
PepsiCo	13,593	4.4	15,312	4.7
Reckitt Benckiser	13,211	4.3	14,113	4.3
Microsoft	13,133	4.2	15,102	4.7
Novartis	12,945	4.2	12,574	3.9

Unaudited statement of comprehensive income

		(Unaudited) Six months to 30 September 2024			(Unaudited) Six months to 30 September 2023
	Note	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Net gains/(losses) on investments		-	5,932	5,932	-	(1,204)	(1,204)
Net currency (losses)/gains		(26)	649	623	(22)	(66)	(88)
Income	3	5,810	-	5,810	4,034	-	4,034
Investment management fee		(180)	(334)	(514)	(247)	(459)	(706)
Other expenses		(368)	-	(368)	(287)	-	(287)
Net return before finance costs and taxation		5,236	6,247	11,483	3,478	(1,729)	1,749
Finance costs		(183)	(339)	(522)	(83)	(153)	(236)
Net return on ordinary activities before taxation		5,053	5,908	10,961	3,395	(1,882)	1,513
Taxation	4	(190)	-	(190)	(192)	-	(192)
Net return attributable to ordinary shareholders		4,863	5,908	10,771	3,203	(1,882)	1,321
Net return per ordinary share	2	3.66p	4.45p	8.11p	3.31p	(1.94p)	1.37p

		(Audited)
		Year to 31 March 2024
		Revenue	Capital	Total
	Note	£000	£000	£000
Net gains on investments		-	5,740	5,740
Net currency (losses)/gains		(39)	286	247
Income	3	7,674	-	7,674
Investment management fee		(478)	(888)	(1,366)
Other expenses		(595)	-	(595)
Net return before finance costs and taxation		6,562	5,138	11,700
Finance costs		(269)	(500)	(769)
Net return on ordinary activities before taxation		6,293	4,638	10,931
Taxation	4	(551)	-	(551)
Net return attributable to ordinary shareholders		5,742	4,638	10,380
Net return per ordinary share	2	6.08p	4.92p	11.00p

The total columns of this statement are the profit and loss accounts of the Company.

The revenue and capital items are presented in accordance with the Association of Investment Companies ('AIC') Statement of Recommended Practice ('SORP 2022').

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued during the period.

Unaudited statement of financial position

		(Unaudited) As at 30 September 2024		(Unaudited) As at 30 September 2023		(Audited) As at 31 March 2024
	Note	£000	£000	£000	£000	£000	£000
Fixed assets
Investments at fair value through profit or loss			308,994		219,848		324,666
Current assets
Trade and other receivables		1,596		1,260		60,068
Cash and cash equivalents		695		2,210		6,377
		2,291		3,470		66,445
Current liabilities
Bank loans	5	(14,784)		(15,855)		(15,449)
Trade payables		(786)		(806)		(59,573)
Dividend payable		-		-		(1,736)
Total current liabilities		(15,570)		(16,661)		(76,758)
Net current liabilities			(13,279)		(13,191)		(10,313)
Total net assets			295,715		206,657		314,353
Capital and reserves
Called up share capital	7	1,752		1,223		1,752
Capital redemption reserve		78		78		78
Share premium account		148,245		31,808		148,249
Special distributable reserve		17,660		58,813		45,033
Capital reserve		122,451		110,023		116,543
Revenue reserve		5,529		4,712		2,698
Total shareholders' funds			295,715		206,657		314,353
Net asset value per ordinary share	2		230.82p		220.09p		223.71p

Unaudited statement of changes in equity

For the six months ended 30 September 2024 (Unaudited)	Called up share capital £000	Capital redemption reserve £000	Share premium account £000	Special distributable reserve* £000	Capital reserve* £000	Revenue  reserve* £000	Total £000
As at 1 April 2024	1,752	78	148,249	45,033	116,543	2,698	314,353
Net return attributable to shareholders**	-	-	-	-	5,908	4,863	10,771
Costs in relation to the issue of shares	-	-	(4)	-	-	-	(4)
Shares bought back into treasury	-	-	-	(27,373)	-	-	(27,373)
Dividends paid	-	-	-	-	-	(2,032)	(2,032)
As at 30 September 2024	1,752	78	148,245	17,660	122,451	5,529	295,715

For the six months ended 30 September 2023 (Unaudited)	Called up share capital £000	Capital redemption reserve £000	Share premium account £000	Special distributable reserve* £000	Capital reserve* £000	Revenue  reserve* £000	Total £000
As at 1 April 2023	1,223	78	31,808	70,924	111,905	3,297	219,235
Net return attributable to shareholders**	-	-	-	-	(1,882)	3,203	1,321
Shares bought back into treasury	-	-	-	(12,111)	-	-	(12,111)
Dividends paid	-	-	-	-	-	(1,788)	(1,788)
As at 30 September 2023	1,223	78	31,808	58,813	110,023	4,712	206,657

For the year ended 31 March 2024 (Audited)	Called up share capital	Capital redemption reserve	Share premium account	Special distributable reserve*	Capital reserve*	Revenue  reserve*	Total
	£000	£000	£000	£000	£000	£000	£000
As at 1 April 2023	1,223	78	31,808	70,924	111,905	3,297	219,235
Net return attributable to shareholders**	-	-	-	-	4,638	5,742	10,380
Shares issued in respect of the transaction with TIGT	529	-	117,223	-	-	-	117,752
Costs in relation to the issue of shares	-	-	(782)	-	-	-	(782)
Shares bought back into treasury	-	-	-	(25,891)	-	-	(25,891)
Dividends paid	-	-	-	-	-	(6,341)	(6,341)
As at 31 March 2024	1,752	78	148,249	45,033	116,543	2,698	314,353

*These reserves are distributable with the exception of the unrealised portion of the capital reserve (£29,444,000; 31 March 2024: £28,322,000; 30 September 2023: £25,529,000), which is non-distributable.

**The Company does not have any other income or expenses that are not included in the 'Net return attributable to shareholders' as disclosed in the condensed statement of comprehensive income above, and therefore this is also the 'Total comprehensive income' for the period.

Unaudited Statement of Cash Flows

		Six months to			Six months to		(Audited) Year to
		30 September 2024			30 September 2023		31 March 2024
	Note	£000	£000	£000		£000		£000	£000
Cash flows from operating activities
Net return on ordinary activities before taxation			10,961			1,513			10,931
Adjustments for:
(Gains)/losses on investments		(5,932)		1,204				(5,740)
Finance costs		522		236				769
Exchange movement on bank borrowings	6	(665)		60				(346)
Purchases of investments*		(75,561)		(2,851)				(17,217)
Sales of investments*		97,100		16,106				43,263
Dividend income	3	(5,799)		(4,029)				(7,659)
Other income	3	(11)		(5)				(15)
Dividend income received		5,321		3,950				7,800
Other income received		12		5				14
Decrease in receivables		20		15				8
Increase/(decrease) in payables		173		(97)				(120)
Overseas withholding tax deducted		(103)		(161)				(586)
			15,077			14,433			20,171
Net cash flows from operating activities			26,038			15,946			31,102
Cash flows from financing activities
Repurchase of ordinary shares		(27,584)		(11,786)				(25,560)
Issue of ordinary share capital		150		-				6,143
Equity dividends paid from revenue		(3,768)		(3,231)				(6,048)
Interest paid on borrowings		(518)		(289)				(830)
Net cash flows from financing activities			(31,720)			(15,306)			(26,295)
Net (decrease)/increase in cash and cash equivalents			(5,682)			640			4,807
Cash and cash equivalents at the start of the period			6,377			1,570			1,570
Cash and cash equivalents at the end of the period	6		695			2,210			6,377

*Receipts from the sale of, and payments to acquire investment securities, have been classified as components of cash flows from operating activities because they form part of the company's dealing operations.

Notes to the Financial Statements

Note 1:  Accounting policies

For the six months ended 30 September 2024 (and the year ended 31 March 2024), the Company is applying The Financial Reporting Standard applicable in the UK and Republic of Ireland ('FRS 102'), which forms part of Generally Accepted Accounting Practice ('UK GAAP') issued by the Financial Reporting Council ('FRC') in 2015.

These condensed financial statements have been prepared on a going concern basis in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland, FRS 104 Interim Financial Reporting, and the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ('SORP') issued by the AIC in July 2022.

The accounting policies applied for the condensed set of financial statements are set out in the Company's annual report for the year ended 31 March 2024.

Note 2:  Returns and net asset value

	(Unaudited) Six months to 30 September 2024	(Unaudited) Six months to 30 September 2023	(Audited) Year to 31 March 2024
Returns per share
Revenue return (£000)	4,863	3,203	5,742
Capital return (£000)	5,908	(1,882)	4,638
Total (£000)	10,771	1,321	10,380
Weighted average number of ordinary shares in issue	132,889,765	96,715,825	94,344,039
Revenue return per ordinary share	3.66p	3.31p	6.08p
Capital return per ordinary share	4.45p	(1.94p)	4.92p
Total return per ordinary share	8.11p	1.37p	11.00p
Net asset value per share
Net assets attributable to shareholders (£000)	295,715	206,657	314,353
Number of shares in issue at period end	128,115,415	93,898,378	140,517,415
Net asset value per share	230.82p	220.09p	223.71p

Note 3:  Income

	(Unaudited) Six months to 30 September 2024 £000	(Unaudited) Six months to 30 September 2023 £000	(Audited) Year to 31 March 2024 £000
From listed investments
UK - equities	2,853	1,968	2,842
Overseas - equities	2,946	2,061	4,817
	5,799	4,029	7,659
Other income
Deposit interest	11	5	15
	5,810	4,034	7,674

During the six months to 30 September 2024 the Company did not receive any special dividends which were treated as capital (30 September 2023 and year to 31 March 2024: £nil).

Note 4: Taxation

	(Unaudited) Six months to 30 September 2024 £000	(Unaudited) Six months to 30 September 2023 £000	(Audited)                       Year to 31 March 2024 £000
Irrecoverable overseas withholding tax	190	192	551

Note 5:  Bank loans

	As at 30 September 2024 £000	As at 30 September 2023 £000	(Audited) As at 31 March 2024 £000
Bank borrowings repayable within one year	14,784	15,855	15,449

The Company has a £20m multi-currency revolving credit facility with The Royal Bank of Scotland International Limited, which expires on 19 September 2026. As at 30 September 2024 £14,784,000 was drawn down until 20 December 2024. The amount has been drawn in the same currency split as borrowed at 30 September 2023 and 31 March 2024 - £1,500,000; €4,500,000; and US$12,750,000.

Interest is payable at the aggregate of the compounded Risk Free Rate ("RFR") for the relevant currency and loan period, plus a margin of 1.55%.

Note 6:  Analysis of net debt

	(Audited) As at 31 March 2024 £000	Cash flow £000	Exchange movements £000	(Unaudited) As at 30 September 2024 £000
Cash at bank	6,377	(5,682)	-	695
Bank borrowings	(15,449)	-	665	(14,784)
	(9,072)	(5,682)	665	(14,089)

Note 7: Called up share capital

	(Unaudited) As at 30 September 2024 No. of shares	(Unaudited) As at 30 September 2023 No. of shares	(Audited) As at 31 March 2024 No. of shares
Ordinary shares of 1p
Shares in issue	128,115,415	93,898,378	140,517,415
Held in treasury	47,072,770	28,400,770	34,670,770
	175,188,185	122,299,148	175,188,185

During the six months ended 30 September 2024 there were 12,402,000 shares bought back into treasury at a cost of £27,373,000 (six months ended 30 September 2023: 5,585,197 shares bought back into treasury at a cost of £12,111,000; year ended 31 March 2024: 11,855,197 shares bought back into treasury at a cost of £25,891,000).

During the six months ended 30 September 2024 no shares were issued from treasury (six months ended 30 September 2023: no shares were issued from treasury; year ended 31 March 2024: no shares were issued from treasury and 52,889,037 new shares were issued for net proceeds of £117,752,000).

No shares were purchased for cancellation or cancelled from treasury in the current or prior periods.

Note 8:  Fair value hierarchy

Under FRS 102, the Company is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

-    Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

-    Level 2: other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk, etc); or

-    Level 3: significant unobservable input (including the Company's own assumptions in determining the fair value of investments).

The financial assets measured at fair value through profit and loss are grouped into the fair value hierarchy as follows:

	(Unaudited) As at 30 September 2024 £000	(Unaudited)                               As at 30 September 2023 £000	(Audited) As at 31 March 2024 £000
Financial assets at fair value through profit or loss - Quoted equities
Level 1	308,994	219,848	324,666
Level 2	-	-	-
Level 3	-	-	-
	308,994	219,848	324,666

There have been no transfers between levels 1, 2, or 3 during the period (period to 30 September 2023 and year to 31 March 2024: nil).

Note 9:  Half-yearly financial report

The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in s434 - 6 of the Companies Act 2006. The financial information for the six months ended 30 September 2024 and 30 September 2023 has not been audited or reviewed.

The information for the year ended 31 March 2024 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under s498 (2), (3) or (4) of the Companies Act 2006.

A copy of the half-year report can shortly be downloaded at www.stsplc.co.uk.

Enquiries:

Juniper Partners Limited

Company Secretary

Email: [e-mail]

 

END