**Summary of Strategic Equity Capital plcs Final Results for the Year Ended 30 June 2025**
**Financial Performance**
**Net Asset Value (NAV) per Share** Decreased by 0.1% on a total return basis, underperforming the FTSE Small Cap (ex Investment Trusts) Total Return Index, which rose by 13.1%.
**Share Price Total Return** +0.4%, also lagging the FTSE Small Cap Index.
**Long-Term Performance** Strong over three and five years, with NAV total returns of 27.3% and 69.5% respectively, outpacing the Investment Trust Smaller Companies sector average.
**Dividend** Proposed final dividend of 4.25p, a 21.4% increase from the previous year, reflecting the portfolios focus on cash-generative businesses.
**Portfolio and Market Conditions**
**Challenging First Half** Affected by the UK’s Autumn Budget changes, particularly the reduction in inheritance tax relief for AIM-quoted stocks, and broader geopolitical uncertainty, leading to a general de-rating of UK smaller companies.
**Recovery in Second Half** Significant recovery as inflation fell and interest rate expectations moderated. Four of the six largest detractors in the first half became the greatest contributors in the second half.
**Investment Approach** The long-term merit of the investment approach is evident, with the share price (total return basis) rising 94.2% since September 2020, compared to 91.6% for the FTSE Small Cap Index.
**Realisation Opportunity**
**Tender Offer** 9,510,496 shares (22.0% of shares in issue) were tendered in the realisation opportunity announced in September 2025, with the majority of shareholders supporting the long-term strategy.
**Discount Management**
**Average Discount to NAV** 8.4% during the period, down from 15.3% since the appointment of Ken Wotton as Lead Manager in September 2020, reflecting effective discount mitigation measures.
**Future Plans** Continued discount control mechanisms, including a planned further realisation opportunity in 2030 and a share buyback programme funded by 50% of net gains from realised profitable transactions.
**Gearing**
**No Banking Loan Facility** The Company has maintained its policy of operating without a banking loan facility, with no current plans to utilise gearing.
**Marketing and Shareholder Engagement**
**Increased Awareness** Targeted marketing efforts, including a retail-focused advertising campaign, PR outreach, and thought leadership, have raised awareness and expanded the shareholder base.
**Retail Investment Platforms** Measurable results include increased ownership on major retail investment platforms and direct engagement with retail investors.
**Board Composition**
**Succession Planning** Richard Locke and the Chairman will retire during the 2026 financial year, with a recruitment process underway to ensure appropriate board composition.
**Outlook**
**Macroeconomic and Geopolitical Challenges:** Expected to remain a source of volatility, with the UK’s fiscal position and growth outlook weighing on near-term sentiment.
**Portfolio Strengths** Positive news flow from investee companies, with a significant valuation opportunity in UK smaller companies trading at substantial discounts to larger peers and private market valuations.
**M&A Activity** Expected to be a defining feature of the market, with the Company well-positioned to benefit from its "private equity" approach.
**Valuation Opportunity** SEC offers an attractive discount on multiple levels, including UK equities, smaller capitalisation stocks, and the Company’s own shares trading at a discount to NAV.
**Conclusion**
The Board remains confident in the Company’s prospects, citing a portfolio of high-quality, undervalued companies, a proven investment process, and a market environment conducive to corporate activity. The long-term strategy is expected to continue delivering value for shareholders.
