REG - North American IT - Annual Financial Report
17/04/2025 17:30
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RNS Number : 5335F North American Income Trust (The) 17 April 2025
JANUS HENDERSON FUND MANAGEMENT UK LIMITED
THE NORTH AMERICAN INCOME TRUST PLC
Legal Entity Identifier (LEI): 5493007GCUW7G2BKY360
THE NORTH AMERICAN INCOME TRUST PLC
ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 JANUARY 2025
This announcement contains regulated information
INVESTMENT OBJECTIVE
To provide investors with above average dividend income and long-term capital
growth through active management of a portfolio consisting predominantly of
S&P 500 US equities.
PERFORMANCE HIGHLIGHTS
Year ended Year ended
31 January 2025 31 January 2024
NAV per share total return(1,5) 23.8% -1.6%
Share price total return(1,5) 24.9% -0.9%
Russell 1000 Value Index(6) 22.5% 2.6%
S&P High Yield Dividend Aristocrats Index(6) 14.9% -4.9%
NAV per share at year end(7) 379.2p 317.8p
Share price at year end(3) 347.0p 289.0p
Discount (debt at par) (5) 8.5% 9.1%
Revenue return per share (5) 12.44p 11.95p
Dividends per share(2,4) 12.20p 11.70p
Dividend yield(2,3,5) 3.5% 4.0%
Net assets at year end(7) £468m £436m
Ongoing charges(5) 0.77% 0.89%
Total Return Performance (%)
1 year 3 years 5 years 10 years
NAV per share1 23.8 35.7 59.5 184.0
Share price3 24.9 39.1 46.0 188.4
Russell 1000 Value Index6 22.5 36.3 72.0 197.5
S&P High Yield Dividend Aristocrats Index6 14.9 25.7 59.5 206.1
(1) Net Asset Value ('NAV') per share and share price total return with dividends
reinvested and excluding reinvestment costs
(2) Includes the fourth interim dividend of 4.1p per ordinary share for the year
ended 31 January 2025 to be paid to shareholders on 7 May 2025
(3) Using mid-market closing price
(4) Based on dividends paid and payable in respect of the financial year and the
share price at the year end
(5) Alternative Performance Measure ('APM')
(6) Both in sterling terms on a total return basis
(7) NAV with debt at par value
Sources: Morningstar Direct, Janus Henderson, Factset
Financial Calendar, Dividends and Highlights
Annual General Meeting 3 June 2025
Half year end 31 July 2025
Payment dates of quarterly dividends for financial year ending 31 January 2026 August 2025
October 2025
January 2026
May 2026
CHAIRMAN'S STATEMENT
Whilst this has been a widely publicised difficult year for the investment
trust sector as a whole, it has been a positive one for the management of your
Company. Some of the steps to strengthen governance and to be responsive to
shareholders' needs that the Board have taken include:
• A change of manager from Aberdeen Group to Janus Henderson Investors to
benefit from the significant resources available to the Janus Henderson North
American equities team;
• A reduction in management fee;
• A more pro-active buy back programme, and;
• The introduction of a conditional tender mechanism.
Regarding the change of manager, I am pleased to write that, as noted in our
half year report, on 1 August 2024, the transfer of the Company's management
to Janus Henderson Investors ('JHI') was completed successfully. At that point
Jeremiah Buckley, an experienced portfolio manager at Janus Henderson became
the manager of the Company and was joined in November 2024 by Fran Radano, the
previous portfolio manager at Aberdeen Group. They now manage the portfolio
together with the assistance of 37 research analysts at Janus Henderson. JHI
brings significant expertise, resources and depth in the North American equity
market, and in marketing and shareholder relations. As a result of the
transition, a new, lower, tiered management fee is payable by the Company to
Janus Henderson. This lower fee is paid at 0.55% on NAV up to £500 million,
and 0.45% on NAV over £500 million.
In common with the wider investment trust sector, the Company's shares traded
at a significantly wider discount to their NAV during the year, in response to
which the Board introduced a more active buyback programme. During the year,
13,990,660 shares were bought back, or roughly 10% of the share count from the
start of the previous year, a noticeable step up from prior years. The buyback
added 4.5p to the NAV per share and the shares were cancelled/allotted to
treasury at an average price of 305.7 pence. Since 31 January 2025, the
Company has bought back an additional 2,051,851 shares.
As announced to shareholders on 14 June 2024, the Board have agreed to
implement a conditional tender, which will permit up to 15% of the Company's
shares to be repurchased should certain conditions be met in September 2027.
Please see the Annual Report for further details.
Indices
In last year's annual report we noted that the Board reviews the Company's
performance against the Russell 1000 Value Index, the peer group and the
S&P 500, all in sterling terms and on a total return basis. The Russell
1000 Value Index was at that time considered to be a more relevant reference
index than the S&P 500 because its higher dividend yield was more
consistent with the Company's own investment objective. However, the Russell
1000 Value Index is also an imperfect comparator as its dividend yield, whilst
higher than that of the S&P 500, is still significantly lower than that on
the Company's shares. Consequently, when we were considering the tender
proposal, we wanted to find a recognised index that delivered a more
comparable dividend yield and this is why we chose the S&P High Yield
Dividend Aristocrat Index Total return.
The Board will continue to review the performance against the Russell 1000
Value Index and the peer group but the reference index for the purposes of the
conditional tender will be the S&P High Yield Dividend Aristocrat Index.
Your Company offers a considerably higher yield than is generally available
from the North American, and particularly US, market, however, even against
higher yield indices, NAIT is actively managed. This differentiated approach
has delivered both income and capital growth with an annualised return of 11%
over the past ten years.
Performance
The investment trust structure allows the manager to focus on the long term
without sudden, large redemptions and also the ability to retain revenues to
smooth the dividend path should the need arise. While the Board feels that
paying a relatively high yield is an important differentiating factor, we are
also aware that paying out too high a level may have an adverse impact on
future growth in both earnings and capital. Following careful discussion with
the fund managers the portfolio yield has been marginally reduced, resulting
in a portfolio that is more balanced across both growth and income and which
we expect will result in better total returns going forward.
The performance for the year reflects six months of management under Aberdeen
Group, while the second half reflects the refreshed approach under Janus
Henderson Investors. While it has only been six months since the transition,
the improvement in relative terms is encouraging albeit early days.
During the year the US economy remained strong, with GDP growing by 2.8%. As
the financial year progressed, investors embraced the likelihood of a soft
landing for the economy, as opposed to a recession. However, macroeconomic
uncertainty was also a feature during the election cycle and following the
ultimate election of President Trump for a second term. Volatility in the
S&P 500 notably increased in the second half of the year, fuelled by this
uncertainty and renewed disquiet over valuations in the technology sector.
Concurrent with this backdrop, the US Federal Reserve finally began to relax
monetary policy during the year with a series of three rate cuts totalling 100
basis points, from a 5.25%-5.50% target range to 4.25%-4.50%, as inflation
began to normalise. Inflation, however, is still above the Federal Reserve's
2% target, as persistent price rises in the service economy have made
inflation stickier.
The major US Indices were again driven by technology shares and the
expectation of future profits from Artificial Intelligence ('AI'). In
particular, Nvidia, the provider of AI chips to data centres was over 20% of
the total performance of the S&P 500, which itself was up about 25%.
Concentration within that Index for the largest tech stocks continues to be
historically high at over 30%.
Over the year to 31 January 2025, the Company's NAV total return per share was
23.8%, against a 22.5% return from the Russell 1000 value index and a 14.9%
return from the S&P High Yield Dividend Aristocrats Index. The majority of
the outperformance versus the Russell 1000 was captured in the second half of
the year under the new management agreement. The Company's share price total
return was 24.9% over the year, of which 15.3% was in the second half of the
year.
The Fund Managers go into details of the stock specific contributors to and
detractors from performance in their report.
Earnings and dividends
The Company's earnings per share were 12.4 pence compared to last year's 12.0
pence. During the year, the dollar strengthened against the pound by 2% which
was a benefit to the revenue reserve, which continues to be more than one
year's worth of dividends. Dividend and interest payment from investments
contributed 78.5% of the Company's gross income, while options generated 21.5%
of the Company's total gross income.
The Board has declared a fourth interim dividend of 4.1 pence per share, to be
paid on 7 May 2025 to shareholders on the register on 22 April 2025. Total
dividends for the year ended 31 January 2025 stand at 12.2 pence per share
(2024 - 11.7p), an increase of 4.3% on the previous year. This marks the 14th
consecutive year of dividend growth for the Company.
The Board
As previously mentioned at the half year, the Board undertook a great deal of
work in the early part of the year to review the Company's management
arrangements, which resulted in the change of Investment Manager on 1 August
2024. I would like to thank my colleagues for the extensive work undertaken.
In January 2025, three members of the Board were pleased to travel to North
America and meet with analysts and portfolio managers at Janus Henderson
Investors in Denver. We were all impressed at the scale, depth, knowledge and
team spirit that we saw there. We were also pleased to see Fran Radano
settling into his new environment.
At the Company's AGM on 21 June 2024, Dame Susan Rice retired as both Chair
and a Director of the Company and I was privileged to take up the position of
Chair after seven years' service on the Company's board. The Board would like
to reiterate its thanks to Dame Susan for all her contributions to the
Company. In light of Dame Susan's retirement, the Board has agreed to appoint
Bulbul Barrett as a non-executive director of the Company following an
external recruitment process. Bulbul will be appointed on 1 May 2025.
AGM
The Company's Annual General Meeting is due to be held at 12.30 p.m. on 3 June
2025 at the offices of our Investment Manager, Janus Henderson, 201
Bishopsgate, London, EC2M 3AE. Shareholders who are unable to travel to the
meeting can join via zoom, using the QR code at the front of this report. The
Notice of Meeting is included in the annual report.
I encourage all shareholders to attend the meeting and vote their shares if
they are able to do so. If you cannot attend the meeting in person, please
ensure you vote your shares using the proxy form provided. If you hold your
shares via a share dealing platform, please instruct your platform to vote
your shares on your behalf. Our investment manager has a guide on voting
available here www.janushenderson.com/en-gb/uk-investment-trusts/how-to-vote
(http://www.janushenderson.com/en-gb/uk-investment-trusts/how-to-vote)
The Company's fund managers, Fran Radano and Jeremiah Buckley, will both be in
attendance at the AGM and will be providing an update on the Company's
portfolio. They look forward to seeing shareholders there and, along with the
Company's directors, will be available to answer any questions you may have.
Outlook
The trade tariffs announced by President Trump have created significant
volatility and distress in the markets. We are yet to see the full extent of
the retaliation (or not) of the countries involved and we do not yet know the
extent of the earnings damage to US companies from higher costs and reduced
demand. Trade tariffs harm all participants and other markets have also had
setbacks. In the near term, it is likely that earnings estimates in the US
will be reduced and conference calls this calendar quarter will be subdued.
The unpredictability of the pronouncements has also had an effect on the bond
market and the US currency. As Warren Buffett, in his latest Berkshire
Hathaway annual report put it, 'never forget that we need you (Uncle Sam) to
maintain a stable currency and that result requires both wisdom and vigilance
on your part'. We can but hope that wisdom will prevail. Ultimately the
administration wants to bring down the deficit, reduce taxes and grow the
economy and this would benefit the US market assuming this can be achieved.
While the political backdrop is causing turmoil in the near term, your Company
holds a diverse portfolio of high quality stocks that, in general, have
historically shown the ability to adapt to new conditions. The Board has taken
a number of steps to improve the relative performance and we are confident the
new managers and their extensive resources will help NAIT through this
difficult and volatile time.
Charles Park
Chairman
17 April 2025
FUND MANAGERS' REPORT
On 1 August 2024, Janus Henderson Investors was appointed the AIFM of The
North American Income Trust. As such, while this report considers full-year
performance and outcomes for shareholders, it goes into greater depth in terms
of investment performance, attribution and themes for the second half of the
Company's financial year. Detailed commentary from the Company's previous
manager, Aberdeen Group, on performance for the first half of the year can be
found in the Company's half-year report.
Market review
The year to 31 January 2025 was another formidable period for US share prices,
with the S&P 500 growing over 29% in local currency terms. GDP rose 2.8%
in the US over the course of the year, whilst, in the middle of the period,
inflation moderated down to 3%. While this remained above the Federal
Reserve's 2% target, it was sufficient to prompt the central bank to begin
unwinding their restrictive monetary policy. Over the latter half of the
period, rate cuts amounted to 100bps, bringing the target range to 4.25-4.50%.
At the close of the period, inflation remained at 3% while unemployment
hovered near generational lows.
The return of volatility was a notable factor in the second half of the
period. Having returned to relatively benign levels over the second half of
2023 and in early 2024, the VIX index (an index which tracks market
volatility) saw an upward trend in the second half. This was marked by a
series of individual spikes in the index, reflecting short-lived bouts of
tumult. Most impacted were Artificial Intelligence ('AI')-associated stocks,
notably many of the 'Magnificent Seven'.
In the second half of the financial year, the Financials, Technology, Consumer
Staples and Industrials sectors were the strongest market performers, while
the Materials, Healthcare and Energy sectors were the primary market laggards
for the period.
Performance
The Company had a total return of 23.8% per share on a Net Asset Value (NAV)
basis in sterling terms for the year ended 31 January 2025. This was a
positive performance against both the Company's reference indices (Russell
1000 Value Index: 22.5%; S&P High Yield Dividend Aristocrats Index;
14.9%).
At a sector level, our stock selection in the Healthcare sector was a
significant contributor to performance in the second half of the year, driven
by strong returns in Bristol Myers Squibb, Medtronic and Gilead Sciences all
of which have seen improving long-term outlooks due to advances in their
innovation pipelines. Elsewhere, our overweight to Technology stocks, and our
stock selection in the sector driven by strong returns in AI exposed names
such as Broadcom, IBM, and Oracle, also aided performance in the second half.
The largest detractor from the Company's performance in the second half was
the Industrials sector, due primarily to stock selection where our positions
in United Parcel Service and Booz Allen Hamilton declined. The second-largest
detractor was the Real Estate sector, due to our overweight position which was
impacted by interest rates remaining relatively high and some stock selection
within that as our position in Prologis underperformed due to concerns around
retail warehousing and industrial demand in the US.
At a specific stock level, the largest contribution came from semiconductor
supplier Broadcom. The company has seen accelerating demand for its
Application-Specific Integrated Circuits ('ASICs') and networking products
from hyperscalers in the US as well as having a leadership position in
partnering with nearly all major players driving the significant buildout of
AI infrastructure. They have also executed very well on the VMWare
acquisition, realising meaningful synergies, and the analog semiconductor
segment is finally showing signs of cyclical recovery. Broadcom recently
raised their dividend by 12%.
Elsewhere, our overweight to investment bank Morgan Stanley was also a
contributor. In the back half of the year, Morgan Stanley saw an acceleration
in revenue growth in their capital markets businesses - both trading and
investment banking. Investment banking is recovering from a cyclical bottom
and the outlook has been boosted by the improving outlook for interest rates,
private market monetisations and less regulation in the US. Revenue growth was
also strong in its wealth management business as the pressure on net interest
income from deposits flowing to higher earnings asset classes abated and
market gains translated into fee growth. Morgan Stanley increased the dividend
nearly 9% during the period.
In terms of second half specific stock detractors, pharmaceutical company
Amgen underperformed as they were caught in a difficult market environment for
pharma and biotech stocks as defensive sectors underperformed during the
period, and there was concern around what the new cabinet would mean for the
industry. Amgen also released important data on their anti-obesity therapy
that didn't quite meet lofty expectations causing the stock to underperform.
We still believe the therapy will contribute to long-term growth for the
company and the rest of their portfolio continues to do well.
Another detractor that impacted our performance within the Industrial sector
was United Parcel Service. The company has been challenged to gain back
market share that they lost during their last round of labour negotiations
which has impacted markets. The overall freight market has also been hampered
by inventory adjustments in the retail and industrial end markets. Finally,
they decided to adjust their relationship with Amazon which will end up
reducing revenues but improving margins over time. We believe the freight
cycle is poised to recover as inventory levels normalise in supply chains and
that UPS will eventually get through these headwinds.
Portfolio activity
Following Janus Henderson's appointment as Investment Manager on 1 August
2024, substantial changes were made to the overall portfolio. The strategy has
been to increase the yield we are getting in the old economy sectors of the
market so that we can make room for lower yielding but faster growth companies
in the new economy sectors of the market, while maintaining the overall income
of the portfolio. We increased the yield in sectors like Financials,
Industrials, and Healthcare so that we could afford to add more exposure in
sectors like Technology and Communications. The net effect of these
changes has slightly reduced the overall portfolio yield but the long-term
growth prospects should be improved.
Sector-wise, we increased our exposure to Technology with additions to
companies that we believe will benefit from increased spending on AI. This
includes companies providing the infrastructure for Generative AI as well as
companies that are leading in providing applications that leverage this new
technology.
We have also added to our investments in the Healthcare sector. As mentioned
above, the sector was one of the weaker performers during the period and has
seen multiple compression over the last couple of years. We believe strong
innovation pipelines will support earnings and dividend growth for years to
come and with the multiple compression we have seen, dividend yields look very
attractive relative to other sectors. We like both the offensive as well as
defensive aspects of the sector.
On the other side of the transition, we reduced exposure in Materials,
Financials and Consumer Staples where the combination of earnings growth and
dividend yield were less than what we believe we can achieve in the overall
portfolio. We have sold our corporate bond positions given extremely tight
spreads in the corporate bond market. This approach has led to a modest
increase in the total number of positions in the portfolio, but we are
confident that it continues to represent a 'best ideas' concentrated
portfolio.
A sector analysis chart of the portfolio can be found in the annual report.
Dividend growth
Over the course of the year, the Company had earnings of over 12.4p per share,
an uplift on the 12.0p received in the previous year. The revenue reserve
stood at £22.66m before the fourth interim dividend was paid, which continues
to be over a year of dividend payments.
We were pleased with the overall dividend growth of the companies within the
portfolio during the year. We have only two positions that didn't increase
the dividend during the period while the rest of the portfolio saw year over
year increases and we think the run rate for the overall portfolio remains in
the mid- to high- single digit range. The two positions that didn't raise the
dividend are priced at a very attractive absolute yield and we are confident
they will raise the dividend in the future. We saw very strong dividend growth
in our holdings in the technology sector where several companies raised the
dividend by more than 10% during the period. Our holdings in Financials were
also standouts in dividend increases during the period with several holdings
in that sector raising the payouts by a high-single digit percentage.
Alongside regular dividend income, two holdings in the portfolio announced
special dividend payments to shareholders during the year. Derivatives
exchange operator CME Group declared an annual variable dividend of US$5.80
per share in December 2024. The company uses this approach to facilitate
paying out all cash it generates over the year beyond a minimum threshold.
Outdoor advertising company REIT Lamar Advertising declared a special earnings
and profits cash dividend of US$0.25 per share.
Outlook
Year to date, there have been economic concerns due to changes in policy
around tariffs, trade and government spending from the new administration in
the US. As this new administration attempts to recalibrate global trade rules
and regulations there has been a slow down in economic activity until
visibility on this new framework can be properly evaluated. This pause in
corporate activity has the ability to mute economic growth and thus earnings
in the near-term. As a result of this transition in policy, we expect to see
continued volatility as trade negotiations begin in earnest. Conversely,
benefits of deregulation should improve the operating environment for
companies across multiple sectors.
The consumer backdrop remains positive due to a strong labour market, but the
reduction in corporate activity and a volatile stock market impacting consumer
net worth has the potential to reduce spending despite strong equity market
performance in recent years and higher interest earnings on cash which has
supported the consumer. Debt service below long-term norms does provide a
reduction in risk especially when compared to prior periods of consumer
weakness.
In addition, labour productivity trends remain positive, supporting wage
growth and corporate profitability. AI integration across sectors is enhancing
efficiency and reducing costs, and we have recently seen practical examples in
healthcare, e-commerce, finance, and energy. While AI adoption is still early,
its potential for having a significant impact on productivity and revenue
growth is clear.
We continue to be excited about the innovation and productivity gains that
large US companies continue to drive through capital and R&D spending.
The investments required to stay relevant and prosper in the new digital
economy are significant and hence favour the largest companies that lead their
industries. Having large amounts of data that can inform strategy and
execution has become critical. We have populated the portfolio with
companies that have the scale to make these investments which should drive
growth in earnings and dividends for years to come.
We believe the portfolio companies in the Company are well positioned to
manage through a period of volatility. We also feel comfortable with the
current valuations of these companies, which in aggregate are at a discount to
market multiples. The high-quality nature of these holdings should help
insulate them against some of the macroeconomic forces at play. From a revenue
perspective, the predictable cash generation and robust balance sheets should
lead to continued dividend growth prospects for 2025. We continue to seek
resilient companies, where macroeconomic tailwinds are not needed for growth
and that have the cash and ability to invest in themselves for the future.
Fran Radano and Jeremiah Buckley
Fund Managers
17 April 2025
Portfolio as at 31 January 2025
Company Valuation % of portfolio
2025
£'000
Johnson & Johnson 19,596 3.9
Medtronic 18,265 3.6
Chevron 16,812 3.3
Philip Morris 16,767 3.3
Bristol-Myers Squibb 16,599 3.3
IBM 16,461 3.2
Morgan Stanley 15,589 3.1
Gaming & Leisure Properties 15,571 3.1
PNC Financial Services 15,559 3.0
Broadcom 14,237 2.8
Ten largest investments 165,456 32.6
CVS Health 13,639 2.7
Enbridge 13,047 2.6
CME Group 12,365 2.4
CMS Energy 12,219 2.4
AbbVie 11,840 2.3
Lamar Advertising 11,687 2.3
Citigroup 11,464 2.3
Verizon Communications 11,371 2.2
U.S. Bancorp 10,961 2.2
UnitedHealth 10,917 2.1
Twenty largest investments 284,966 56.1
Xcel Energy 10,813 2.1
UPS 10,571 2.1
RTX 10,378 2.1
Goldman Sachs 10,299 2.0
Restaurant Brands International 9,901 1.9
Lam Research 9,637 1.9
Dell Technologies 9,591 1.9
Home Depot 9,451 1.9
Accenture 9,290 1.8
Amgen 9,188 1.8
Thirty largest investments 384,085 75.6
American Express 8,572 1.7
Sempra 8,341 1.7
Alphabet 8,271 1.6
Eaton 7,878 1.6
Honeywell 7,200 1.4
OneMain 7,148 1.4
Booz Allen Hamilton 6,749 1.3
Texas Instruments 6,681 1.3
Microsoft 6,679 1.3
Coca-Cola 6,383 1.3
Forty largest investments 457,987 90.2
Nike 6,186 1.2
Sysco 5,868 1.1
Las Vegas Sands 5,532 1.1
Comcast 5,415 1.1
Marriott International 5,390 1.1
Union Pacific 4,987 1.0
Oracle 4,789 0.9
Phillips 66 4,739 0.9
Amphenol 3,701 0.7
Total investments 504,594 99.3
Net current assets 3,425 0.7
Total assets 508,019 100.0
Sector breakdown
Sector exposure at 31 January
As a percentage of the investment portfolio excluding cash
2025
%
Health Care 19.8
Financials 16.5
Information Technology 15.9
Industrials 13.0
Consumer Discretionary 7.2
Energy 6.9
Utilities 6.2
Consumer Staples 5.8
Real Estate 5.4
Communication Services 3.3
Regional breakdown
Geographic exposure at 31 January
As a percentage of the investment portfolio excluding cash
2025 2024
Equity Fixed Total Equity Fixed Total
% interest % % interest %
% %
Canada 4.5 - 4.5 6.1 - 6.1
USA 95.5 - 95.5 92.0 1.9 93.9
100.0 - 100.0 98.1 1.9 100.0
MANAGING RISKS
The Board, with the assistance of the Manager, has carried out a robust
assessment of the principal risks facing the Company, including those which
would threaten its business model, future performance, solvency, liquidity in
its shares and reputation. The assessment includes consideration of economic
and political risks, most of which are outside the Board's direct control. The
Board has drawn up a detailed matrix of risks facing the Company, which it has
distilled into six categories of principal risks, as shown on the following
pages. To assist in mitigating the decision-taking risks as far as
practicable, the Board has also put in place a schedule of investment limits
and restrictions, appropriate to the Company's investment objective and
policy, which it reviews at each board meeting.
Emerging risks
The Board considers closely changes to the risk profile of the Company,
arising from both internal and external triggers, and examines emerging risks
as part of its regular review of the Company's risk profile. The Board defines
emerging risks as potential trends, sudden events or changing risks which are
characterised by a high degree of uncertainty in terms of occurrence,
probability and possible effects on the Company. Once the emerging risks
become sufficiently clear, they may be treated as specific risks and enter the
Company's matrix of risks.
The decision during the year to change the Company's management arrangements
was a potential risk, and was closely monitored by the Board, with the Audit
Chair in regular communication with teams at both Janus Henderson and Aberdeen
Group, and weekly Board steering committee meetings.
The Board receives regular reporting on specific and emerging risks from the
Manager and other service providers. In addition, the Board receives ad hoc
reports on specialist topics from professional advisers, including lawyers and
tax agents, when necessary. These reports, as well as the directors' own
experience, enable effective monitoring of the risk landscape and changes to
it.
The Board has concluded that the portfolio, investment approach and
operational requirements of the Company have, to date, proven resilient and
the investment approach remains unchanged. The impacts of geopolitical
tensions affect the investment landscape, as do borrowing levels in economies,
relatively low growth in developed economies and the threat of inflation, all
of which are factored into investment decisions. There are specific risks in
the UK environment that might impact on investors and demand for the Company's
shares which are also taken into consideration in managing the Company's share
price rating, where possible.
The Company's principal risks and mitigating steps are as follows:
Risk Controls and mitigation
Market Stock specific investment risk is spread by holding a diversified portfolio of
investee companies, typically with strong balance sheets and good growth
The Company's absolute performance in terms of NAV total return and share prospects. The Company does not currently undertake any currency hedging
price total return is dependent on the performance of the investee companies strategies, though it has the ability to do so.
and markets in which the Company invests. Performance is also impacted by
currency and interest rate movements, as well as by political and economic
events, including changes to the fiscal environment for UK investors. Any debt
securities that may be held by the Company will be affected by general changes The Company's investment strategy is reviewed formally by the Board at least
in interest rates that will in turn result in increases or decreases in the annually, and takes into account shareholder views, developments in the
market value of those instruments. marketplace and how the structure of the Company is positioned to meet them.
Details on financial risks, including market price volatility, inflation,
interest rates, liquidity and foreign currency risks and the controls in place
to manage these risks are provided in note 18 to the financial statements.
Investment performance The Board is responsible for ensuring that the investment policy is met. The
day-to-day management of the Company's assets is delegated to the Manager
The relative performance of the Company against its reference indices and AIC under investment guidelines, with close monitoring of the guidelines.
peer group depends principally on asset allocation and stock selection, which,
in turn, require investment skills. In exercising these skills, the Manager is
responsible for adhering to the investment policy and investment guideline
restrictions set by the Board and amended from time to time. The Board meets the Manager on a regular basis and keeps investment
performance, in terms of both capital and income returns, under close review.
The Management Engagement Committee reviews the Manager's performance
annually. Although the Company is not invested against any income criteria,
the net income of the Company and the revenue reserves are monitored against
dividend pay-outs and anticipated future net income.
Investment performance is monitored over the short, medium and longer term
against the Company's reference indices and against the Company's AIC peer
group (North America).
The Fund Managers keep the global political and economic picture under review
as part of the investment process and members of the wider Janus Henderson
team are available should the Board want additional information on sector or
market specific issues. Climate risk is assessed within the individual stock
selection process.
The Board monitors the Company's ordinary share price relative to NAV per
share and reviews changes in shareholdings in the Company to understand short
or longer-term trends in supply of and demand for the shares.
Major market event or geopolitical risk The Board is cognisant of the heightened risks arising from geopolitical
developments including stock market instability and economic effects or the
The Company is exposed to stock market volatility or illiquidity that could potential impact on the operations of the third-party suppliers, including the
result from major market shocks due to a national or global crisis such as a Manager.
pandemic, war, natural disaster, geopolitical developments or similar. There
could also be a resultant impact of disruption on the operations of the
Company and its service providers temporarily or for prolonged
The Manager maintains close oversight of the Company's portfolio and the
duration. performance of investee companies. The Board monitors volatility and holds a
regular dialogue with the Fund Managers to understand the impact on the
Company's portfolio.
The Manager has disaster recovery and business continuity arrangements in
place to ensure that it is able to continue to service its clients, including
investment trusts. The Board monitors third party risk management frameworks
through updates from the Manager.
Income and Dividend Risk The Board monitors this risk through the regular review of detailed revenue
forecasts and considers the current and forecast level of income at each
The ability of the Company to pay dividends and any future dividend growth meeting.
will depend primarily on the timing and level of income received from its
investments (which may be affected by currency movements, exchange controls or
withholding taxes imposed by jurisdictions in which the Company invests).
Accordingly, there is no guarantee that the Company's dividend income The Company has built up its revenue reserves over recent years which provides
objective will continue to be met and the amount of the dividends paid to flexibility in future years, should the dividend environment become
Ordinary shareholders may go down as well as up. challenging. The Company has revenue reserves of £22.66m before payment of
the fourth interim dividend.
Gearing The Company's investment policy sets a limit on borrowing of 20% of net assets
at the time the borrowing is assumed, and the Board monitors the Company's
The Fund Managers have authority to use gearing in line with the Company's level of gearing at each meeting, and its compliance with loan covenants.
investment policy. Gearing is used to leverage the Company's portfolio in
order to enhance returns. In the event of a significant or prolonged fall in
equity markets, gearing can have the effect of exacerbating market falls on
the Company's NAV and, consequently, its share price. Gearing would have the As at 31 January 2025 the Company had £40.2 million of borrowings and net
opposite effect in the event of a significant or prolonged rise in equity gearing was 7.8% at the year end. More details are provided in note 14 of the
markets in which the Company is invested. annual report.
Discount volatility The Company's share price, NAV and discount are monitored daily by the
Manager. When there is a significant discount and it is deemed to be in the
Investment company shares can trade at a discount to their underlying net best interest of shareholders, the Manager will exercise discretion to
asset values (NAV), although they can also trade at a premium. undertake share buybacks, within authorities set by the Board. The Board
monitors the discount level of the Company's shares and monitors the level of
share buybacks, within shareholder authorities. During the year 13,990,660
shares were bought back.
Derivatives The risks associated with derivatives contracts are managed within guidelines
and limits set by the Board.
The Company uses derivatives primarily to enhance the income generation of the
Company.
Derivatives are difficult to value and exposed to counterparty risk
Operational The Management Engagement Committee reviews each service provider at least
annually, and, in conjunction with the Audit Committee, considers reports on
The Company is reliant on third-party service providers for all its internal controls, including any reported breaches, throughout the year, from
operational activities, including reliance on Janus Henderson (and Aberdeen all the service providers. This reporting covers such matters as business
Group for the first six months of the year) as investment manager, corporate resilience and cyber security risk as well as matters that are subject to
secretary and administrator to the Company. review as part of the annual audit of the Company.
The Company depends on the diligence, skill and judgement of the Manager's Janus Henderson has a strong North American Equities team, which supports the
investment team. Continuity of service of the team and individuals in the team Fund Managers in the management of the Company's portfolio. Constructive
could impact the future success of the Company. challenge, succession and continuity planning are key elements of the
management of the team and are reported closely to the Board with consultation
on any major changes.
Failure of third parties' operational or internal control systems could
prevent the accurate reporting or monitoring of the Company's financial
position. Janus Henderson subcontracts some of the operational functions The Board reviews the internal control structure and reporting for the Company
(principally those relating to trade processing, investment administration and from all agents and meets with their representatives throughout the year to
accounting) to BNP Paribas. make enquiry on the systems and controls.
Failure of controls could also impact the Company meeting its regulatory
obligations.
Regulatory and reporting The Board is apprised regularly of impending regulatory and reporting changes
and monitors closely, through its various agents, the Company's adherence to
The Company operates in a highly regulated environment which could inter alia existing requirements, including maintaining investment trust and listed
affect the listing of the Company's shares and the Company's tax status, as company status. The Board is also kept aware of fiscal and other developments
well as how the Company conducts its affairs in the market more generally. that might affect shareholders' interests.
The Company has strict reporting requirements that need to be adhered to both The Board is kept informed of corporate governance developments and, as far as
internally and externally to the market. practicable, adheres to corporate governance guidelines that are applicable to
an investment company.
VIABILITY STATEMENT
The AIC Code of Corporate Governance includes a requirement for the Board to
assess future prospects for the Company, and to report on that assessment
within the Annual Report. The Board considers that certain characteristics of
the Company's business model and strategy are relevant to this assessment:
• the Board aims for the Company to deliver long-term performance;
• the Company's investment objective, strategy and policy, which are
subject to regular Board monitoring, mean that the Company is invested mainly
in readily realisable, listed securities and that the level of borrowings is
restricted; and
• the Company is a closed-ended investment company and therefore
does not suffer from liquidity issues arising from unexpected redemptions.
Also relevant are a number of aspects of the Company's operational agreements:
• the Company retains title to all assets held by the custodian
under the terms of formal agreements with the custodian and depositary;
• revenue and expenditure forecasts are reviewed by the directors at
each board meeting; and
• cash is held with approved banks.
In addition, the directors have carried out a robust assessment of the
principal risks and uncertainties which could threaten the Company's business
model, including future performance, liquidity and solvency, and climate
change, and considered emerging risks that could have a future impact on the
Company. The Board takes into account the liquidity of the portfolio,
short-term and structural gearing, the income stream from the portfolio, and
the Company's ability to meet its liabilities as they fall due. This includes
consideration of how the forecast income stream, expenditure and levels of
reserves could impact the Company's ability to pay dividends to shareholders.
Detailed income and expense forecasts are made over a shorter time frame. The
nature of the Company's business means that such forecasts are equally valid
to be considered over the longer three-year period as a means of assessing
whether the Company can continue in operation.
The directors assess viability over three-year rolling periods, which aligns
with its continuation vote, taking account of foreseeable severe but plausible
scenarios. This includes consideration of the duration of the Company's loan
notes facility and how a breach of any covenants could impact the Company's
NAV and share price. The Board has assessed the risks associated with
geopolitical, economic and health crises in recent years, including the
conflict in the Middle East and the war in Ukraine, and has concluded that
these events have not affected the long-term viability of the Company, and its
ability to continue in operation, notwithstanding any short-term uncertainty
they have caused in the markets.
The directors believe that a rolling three-year period best balances the
Company's long-term objective, its financial flexibility, commitment to
holding continuation votes every three years and scope with the difficulty in
forecasting economic conditions affecting the Company and its shareholders.
Based on their assessment, and in the context of the Company's business model,
strategy and operational arrangements above, 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 three-year period to January 2028.
The directors have also concluded that the Company has adequate resources to
continue in operational existence for at least 12 months from the date of
approval of these financial statements being 30 April 2026, and it is
therefore appropriate to prepare these financial statements on a going concern
basis.
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were with the
directors and the Manager. There were no material transactions between the
Company and its directors during the year other than amounts paid to them in
respect of remuneration and expenses, for which there were no outstanding
amounts payable at the year end. Directors' shareholdings in the Company are
disclosed in the directors' remuneration report.
The Company has an agreement with the Manager for the provision of investment
management, secretarial, accounting and administration and promotional
activity services. Details of transactions during the year and balances
outstanding at the year end are given in notes 5 and 7 in the Annual Report.
During the year the Company received £247,000 from Janus Henderson to cover
project costs paid or payable in relation to the manager change from abrdn
Fund Managers Limited.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
In accordance with Disclosure Guidance and Transparency Rule 4.1.12, each of
the Directors, who are listed in the Annual Report, 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 Annual Report 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
Charles Park
Chair
17 April 2025
INCOME STATEMENT
Year ended Year ended
31 January 2025 31 January 2024
Revenue return £'000 Capital return £'000 Revenue return Capital return
Total £'000 £'000 Total
£'000 £'000
Net gains/(losses) on investments - 77,132 77,132 - (25,504) (25,504)
Net currency (losses)/gains - (868) (868) - 1,375 1,375
Income 21,193 262 21,455 21,952 620 22,572
--------- --------- --------- --------- ----------- ---------
Gross revenue and capital gains/(losses) 21,193 76,526 97,719 21,952 (23,509) (1,557)
Investment management fee (833) (1,943) (2,776) (894) (2,088) (2,982)
Administrative expenses (795) - (795) (943) - (943)
---------- ---------- --------- ---------- ---------- ----------
Return before finance costs and taxation 19,565 74,583 94,148 20,115 (25,597) (5,482)
Finance costs (343) (800) (1,143) (368) (858) (1,226)
---------- ---------- ---------- ---------- ---------- ----------
Return before taxation 19,222 73,783 93,005 19,747 (26,455) (6,708)
Taxation (2,907) 646 (2,261) (3,079) 614 (2,465)
---------- ---------- ---------- ---------- ---------- ----------
Return after taxation 16,315 74,429 90,744 16,668 (25,841) (9,173)
---------- ---------- ---------- ---------- ---------- ----------
Return per Ordinary share (pence) 12.44 56.76 69.20 11.95 (18.53) (6.58)
===== ===== ===== ===== ===== =====
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
Called up share capital £'000 Share premium account £'000 Capital redemption reserve Capital reserve £'000
£'000 Revenue reserve £'000
Total
Year ended £'000
31 January 2025
Balance at 1 February 2024 6,868 51,806 15,748 340,003 22,054 436,479
Buyback of Ordinary shares for cancellation (522) - 522 (31,701) - (31,701)
Buyback of Ordinary shares for treasury - - - (11,973) - (11,973)
Return after taxation - - - 74,429 16,315 90,744
Dividends paid - - - - (15,714) (15,714)
--------- ---------- ---------- ----------- ---------- ----------
At 31 January 2025 6,346 51,806 16,270 370,758 22,655 467,835
====== ====== ====== ====== ====== ======
Called up share capital £'000 Share premium account £'000 Capital redemption reserve Capital reserve £'000
£'000 Revenue reserve £'000
Total
Year ended £'000
31 January 2024
Balance at 1 February 2023 7,012 51,806 15,604 373,828 24,641 472,891
Buyback of Ordinary shares for cancellation (144) - 144 (7,984) - (7,984)
Return after taxation - - - (25,841) 16,668 (9,173)
Dividends paid - - - - (19,255) (19,255)
--------- ---------- ---------- ----------- ---------- ----------
At 31 January 2024 6,868 51,806 15,748 340,003 22,054 436,479
====== ====== ====== ====== ====== ======
STATEMENT OF FINANCIAL POSITION
As at As at
31 January 2025 31 January 2024
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss 504,594 454,932
----------- -----------
Current assets
Prepayments and accrued income 896 846
Other debtors 2,975 105
Cash at bank and in hand 5,264 21,285
----------- -----------
9,135 22,236
----------- -----------
Creditors: amounts falling due within one year
Other creditors (5,710) (1,491)
----------- -----------
Net current assets 3,425 20,745
----------- -----------
Total assets less current liabilities 508,019 475,677
Creditors: amounts falling due after more than one year
Senior Loan Notes (40,184) (39,198)
----------- -----------
Net assets 467,835 436,479
======= =======
Capital and reserves
Called up share capital 6,346 6,868
Share premium account 51,806 51,806
Capital redemption reserve 16,270 15,748
Capital reserve 370,758 340,003
Revenue reserve 22,655 22,054
----------- -----------
Total shareholders' funds 467,835 436,479
======= =======
Net asset value per ordinary share (pence) 379.24 317.78
======= =======
STATEMENT OF CASH FLOWS
Year ended Year ended
31 January 2025 31 January 2024
£'000 £'000
Cash flows from operating activities
Net return before taxation 93,005 (6,708)
Adjustments for:
Net (gains)/losses on investments (77,146) 25,410
Net losses/(gains) on foreign exchange transactions 868 (1,375)
Increase in dividend income receivable (52) (60)
Decrease/(increase) in fixed interest income receivable 2 (2)
Decrease in derivatives (66) (102)
Decrease in other debtors 32 155
Increase/(decrease) in other creditors 163 (53)
Tax on overseas income (2,261) (2,465)
Amortisation of senior loan note expenses 8 -
Accretion of fixed income book cost (44) (94)
----------- -----------
Net cash inflow from operating activities 14,509 14,706
Cash flows from investing activities
Purchase of investments (446,018) (140,765)
Sale of investments 474,976 147,854
----------- -----------
Net cash inflow from investing activities 28,958 7,089
Financing activities
Equity dividends paid (15,714) (19,255)
Buyback of Ordinary shares (31,911) (7,984)
Buyback of Ordinary shares for treasury (11,973) -
----------- -----------
Net cash used in financing activities (59,598) (27,239)
----------- -----------
Decrease in cash at bank and in hand (16,131) (5,444)
----------- -----------
Analysis of changes in cash at bank and in hand during the year
Opening balance 21,285 26,699
Effect of exchange rate fluctuation on cash held 110 30
Decrease in cash as above (16,131) (5,444)
----------- -----------
Closing balance 5,264 21,285
======= =======
Represented by:
Cash at bank and in hand 5,264 21,285
----------- -----------
5,264 21,285
======= =======
The accompanying notes are an integral part of the financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
1. Principal activity
The Company is a closed-end investment company, registered in Scotland No.
SC005218, with its Ordinary shares being listed on the London Stock Exchange.
2. Accounting policies
A summary of the principal accounting policies, all of which, unless otherwise
stated, have been consistently applied throughout the year and the preceding
year, is set out below.
a) Basis of preparation and going concern
The financial statements have been prepared in accordance with Financial
Reporting Standard 102, the Companies Act 2006 and with the Statement of
Recommended Practice 'Financial Statements of Investment Trust Companies and
Venture Capital Trusts' issued in July 2022. The financial statements are
prepared in sterling which is the functional currency of the Company and
rounded to the nearest £'000. They have also been prepared on a going concern
basis and on the assumption that approval as an investment trust will continue
to be granted.
Going concern
The Company's assets consist substantially of securities in companies listed
on recognised stock exchanges and in normal circumstances are realisable
within a short timescale and which can be sold to meet funding commitments if
necessary.
The Board has set gearing limits and regularly reviews actual exposures, cash
flow projections and compliance with banking covenants.
The Company undertakes a continuation vote every three years. The last
continuation vote was passed at the AGM held in June 2024 with 89.2% of votes
in favour.
The Board has considered the impact of geopolitical developments and believes
that there will be a limited resulting financial impact on the Company's
operational resources and existence. Given that the Company's portfolio
comprises primarily ""Level One"" assets (listed on a recognisable exchange
and realisable within a short timescale), and the Company's relatively low
level of gearing, the Company has sufficient liquidity within its portfolio so
as to remain within its debt covenants and pay expenses.
Taking the above factors into consideration, the Directors have a reasonable
expectation that the Company has adequate financial resources to continue in
operational existence for the foreseeable future and for at least twelve
months from the date of this Report. Accordingly, the Board continues to adopt
the going concern basis in preparing the financial statements.
Significant estimates and judgements
Disclosure is required of judgements and estimates made by management in
applying the accounting policies that have a significant effect on the
financial statements. There are no significant estimates or judgements which
impact these financial statements.
b) Income
Income from investments, including taxes deducted at source, is included in
revenue by reference to the date on which the investment is quoted ex
dividend. Special dividends are credited to capital or revenue, according to
the circumstances. The fixed returns on debt instruments are recognised using
the time apportioned accruals basis and the discount or premium on acquisition
is amortised or accreted on a straight-line basis.
Interest receivable from cash and short-term deposits is recognised the time
apportioned accruals basis.
c) Expenses
All expenses are accounted for on an accruals basis and are charged to the
Statement of Comprehensive Income. Expenses are charged against revenue except
as follows:
· Transaction costs on the acquisition or disposal of investments
are charged to capital in the Statement of Comprehensive Income;
· Expenses are charged to capital where a connection with the
maintenance or enhancement of the value of the investments can be
demonstrated. In this respect, the investment management fee is allocated 30%
to revenue and 70% to capital to reflect the Company's investment policy and
prospective income and capital growth.
d) Taxation
The tax payable is based on the taxable profit for the year. Taxable profit
differs from net profit as reported in the Statement of Comprehensive Income
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 (see note 8 for a more detailed explanation). The Company has no
liability for current tax.
Deferred taxation is provided on all timing differences, that have originated
but not reversed at the Statement of Financial Position date, where
transactions or events that result in an obligation to pay more or a right to
pay less tax in future have occurred at the Statement of Financial Position
date, measured on an undiscounted basis and based on enacted tax rates. 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 the underlying timing differences can be deducted. Timing
differences are differences arising between the Company's taxable profits and
its results as stated in the financial statements which are capable of
reversal in one or more subsequent periods.
Owing to the Company's status as an investment trust company, and the
intention to continue to meet the conditions required to obtain approval for
the foreseeable future, the Company has not provided deferred tax on any
capital gains and losses arising on the revaluation or disposal of
investments.
e) Investments
The Company has chosen to apply the recognition and measurement provisions of
IAS 39 Financial Instruments: Recognition and Measurement and investments have
been designated upon initial recognition at fair value through profit or loss.
Investments are recognised and de-recognised at trade date where a purchase or
sale is under a contract whose terms require delivery within the time frame
established by the market concerned and are initially measured at fair value.
Subsequent to initial recognition, investments are measured at fair value. For
listed investments, this is deemed to be closing bid market prices. Gains and
losses arising from changes in fair value and disposals are included as a
capital item in the Statement of Comprehensive Income and are ultimately
recognised in the capital reserve.
f) Borrowings
Monies borrowed to finance the investment objectives of the Company are stated
at the amount of the net proceeds immediately after issue plus cumulative
finance costs less cumulative payments made in respect of the debt. The
finance costs of such borrowings are accounted for on an accruals basis using
the effective interest rate method and are charged 30% to revenue and 70% to
capital to reflect the Company's investment policy and prospective income and
capital growth.
g) Dividends payable
Interim and final dividends are recognised in the period in which they are
paid.
h) Nature and purpose of reserves
Share premium account - The balance classified as share premium includes the
premium above nominal value from the proceeds on issue of any equity capital
comprising Ordinary shares of 5p. This reserve is not distributable.
Capital redemption reserve - The capital redemption reserve is used to record
the amount equivalent to the nominal value of any of the Company's own shares
purchased and cancelled in order to maintain the Company's capital. This
reserve is not distributable.
Capital reserve - This reserve reflects any gains or losses on realisation of
investments in the period along with any changes in fair values of investments
held that have been recognised in the Statement of Comprehensive Income. The
costs of share buybacks for treasury are also deducted from this reserve. This
reserve is distributable although the amount that is distributable is complex
to determine and is not necessarily the full amount of the reserve as
disclosed within these financial statements.
Revenue reserve -This reserve reflects all income and costs which are
recognised in the revenue column of the Statement of Comprehensive Income. The
revenue reserve represents the amount of the Company's reserves distributable
by way of dividend. The amount of the revenue reserve as at 31 January 2025
may not be available at the time of any future distribution due to movements
between 31 January 2025 and the date of distribution.
i) Foreign currency
Assets and liabilities in foreign currencies are translated at the rates of
exchange ruling on the Statement of Financial Position date. Transactions
involving foreign currencies are converted at the rate ruling on the date of
the transaction. Gains and losses on the realisation of foreign currencies are
recognised in the Statement of Comprehensive Income and are then transferred
to the capital reserve.
j) Traded options
The Company may enter into certain derivative contracts (e.g. writing traded
options). Option contracts are accounted for as separate derivative contracts
and are therefore shown in other assets or other liabilities at their fair
value. The initial fair value is based on the initial premium which is
received/paid on inception. The premium is recognised in the revenue column
over the life of the contract period. Losses on any movement in the fair value
of open contracts at the year end realised and on the exercise of the
contracts are recorded in the capital column of the Statement of Comprehensive
Income. For written options, where exercised, losses are treated as a realised
loss, including where it is a component of the cost paid to acquire underlying
securities on a written contract.
In addition, the Company may enter into derivative contracts to manage market
risk and gains or losses arising on such contracts are recorded in the capital
column of the Statement of Comprehensive Income.
k) Cash at bank and in hand
Cash comprises cash at bank and collateral accounts at brokers. The amounts
held in collateral accounts at brokers were £362,000 with Goldman Sachs
and £14,000 with UBS as at 31 January 2025
l) Treasury shares
When the Company purchases its Ordinary shares to be held in treasury, the
amount of the consideration paid, which includes directly attributable costs,
is net of any tax effect, and is recognised as a deduction from the capital
reserve. When these shares are sold subsequently, the amount received is
recognised as an increase in equity, and any resulting surplus on the
transaction is transferred to the share premium account and any resulting
deficit is transferred from the capital reserve.
3. 2025 2024
Gains on investments held at fair value through profit or loss £'000 £'000
Gains on cash held 110 30
(Losses)/gains on Senior Loan Notes (978) 1,345
----------- -----------
(868) 1,375
====== ======
4. 2025 2024
Income from overseas listed investments £'000 £'000
Dividend income 14,368 14,879
REIT income 2,191 2,817
Interest income from investments 286 567
--------- ---------
16,845 18,263
====== ======
During the year, the Company was entitled to premiums totalling £4,099,000
(2024 - £3,781,000) in exchange for entering into option contracts. At the
year end there were 4 (2024 - 6) open positions, valued at a liability of
£96,000 (2024 - liability of £162,000) as disclosed in note 13 to the
accounts. Losses realised on the exercise of derivative transactions are
disclosed in note 11 to the accounts.
5. Investment management fee 2025 2024
Investment management fee Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
833 1,943 2,776 894 2,088 2,982
6. Finance costs 2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Bank interest paid 2 6 8 33 76 109
Senior Loan Notes 338 789 1,127 333 778 1,111
Amortised Senior Loan Note issue expenses 3 5 8 2 4 6
----------- ---------- ------- ----------- -------- -------
343 800 1,143 368 858 1,226
----------- ---------- ------- ----------- --------- -------
7. Dividends on ordinary shares
2025 2024
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
3rd interim dividend for 2023 of 2.5p per share - 3,506
Final dividend for 2023 of 3.5p per share - 4,902
4th interim dividend for 2024 of 3.9p per share 5,305 -
1st interim dividend for 2025 of 2.7p per share (2024 - 2.6p) 3,569 3,642
2nd interim dividend for 2025 of 2.7p per share (2024 - 2.6p) 3,467 3,621
3rd interim dividend for 2025 of 2.7p per share (2024 - 2.6p) 3,373 3,584
--------- ---------
15,714 19,255
===== =====
The fourth interim dividend was unpaid at the year end. Accordingly, this has
not been included as a liability in these financial
statements.
The table below sets out the total dividends paid and proposed in respect of
the financial year, which is the basis on which the requirements of Sections
1158-1159 of the Corporation Tax Act 2010 are considered. The revenue
available for distribution by way of dividend for the year is £16,315,000
(2024 - £16,668,000).
2025 2024
£'000 £'000
1st interim dividend for 2025 of 2.7p per share (2024 - 2.6p) 3,569 3,642
2nd interim dividend for 2025 of 2.7p per share (2024 - 2.6p) 3,467 3,621
3rd interim dividend for 2025 of 2.7p per share (2024 - 2.6p) 3,373 3,584
4th interim dividend for 2025 of 4.1p per share (2024 - 3.9p) 4,974 5,310
--------- ---------
15,383 16,157
===== =====
The cost of the proposed fourth interim dividend for 2025 is based on
121,309,836 Ordinary shares in issue, being the number of Ordinary shares in
issue, excluding treasury shares, at the date of this report.
8. Return per Ordinary share
2025 2024
£'000 p £'000 p
Based on the following figures:
Revenue return 16,315 12.44 16,668 11.95
Capital return 74,429 56.76 (25,841) (18.53)
--------- --------- ---------- ----------
Total return 90,744 69.20 (9,173) (6.58)
Weighted average number of Ordinary shares in issue {A} 131,124,251 139,474,109
{A} Calculated excluding shares held in Treasury where applicable.
9. 2025 Financial Information
The figures and financial information for the year ended 31 January 2025 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 31 January 2025 have been audited but have not yet
been delivered to the Registrar of Companies. The Independent Auditor's Report
on the 2025 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. 2024 Financial Information
The figures and financial information for the year ended 31 January 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 31 January 2024 have been audited and filed with
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.
11. Dividend
The fourth interim dividend of 4.1p per ordinary share will be paid on 7 May
2025 to shareholders on the register of members at the close of business on 22
April 2025. This will take the total dividends for the year to 12.2p (2024:
11.70p). The Company's shares will be traded ex-dividend on 17 April 2025.
12. Annual Report
The Annual Report will be posted to shareholders in May 2025 and will be
available on the Company's website (www.northamericanincome.com
(http://www.northamericanincome.com) ).
13. Annual General Meeting
The Annual General Meeting will be held on Tuesday 3 June 2025 at 12.30 p.m.
at 201 Bishopsgate, London EC2M 3AE. The Notice of Meeting is included in the
Annual Report.
For further information please contact:
Fran Radano Jeremiah Buckley
Fund Manager Fund Manager
The North American Income Trust plc The North American Income Trust plc
Telephone: +1 303 336 7935 Telephone: +1 303 883 2367
Dan Howe Harriet Hall
Head of Investment Trusts PR Director, Investment Trusts
Janus Henderson Investors Janus Henderson Investors
Telephone: 020 7818 1818 Telephone: 020 7818 2919
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