REG - European Smaller Co. - Half-year Financial Report
24/02/2026 07:00
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RNS Number : 0680U European Smaller Companies Tst PLC 24 February 2026
Legal Entity Identifier: 213800N1B1HCQG2W4V90
This announcement contains regulated information
THE EUROPEAN SMALLER COMPANIES TRUST PLC
Unaudited results for the half year ended 31 December 2025
INVESTMENT OBJECTIVE
The Company seeks capital growth by investing predominantly in smaller and
medium sized companies which are quoted, domiciled, listed or have operations
in Europe (ex UK).
PERFORMANCE HIGHLIGHTS
· Net asset value per ordinary share total return rose by 7.7%
· Share price total return was 4.1%
· NAV and share price outperformance of the benchmark over 1, 3, 5
and 10 years
· Net assets of £839.6m following successful combination with
European Assets Trust PLC
· A new dividend policy has been introduced, targeting distributions
of at least 5% of NAV per ordinary share, based on the previous year‑end
NAV.
Total return performance (including dividends reinvested and excluding
transaction costs)
6 months 1 year 3 years 5 years 10 years
% % % % %
NAV(1,5) 7.7 33.2 47.3 51.5 227.8
Benchmark index(2) 7.1 26.9 39.4 35.6 158.1
Share price(3) 4.1 29.0 59.2 54.1 232.9
Financial highlights
Shareholders' funds at 31 December 2025 at 30 June 2025
Net assets (£'000) 839,615 510,677
Net asset value per ordinary share 238.18p 224.45p
Discount(4, 5) 9.1% 5.8%
Share price 216.50p 211.50p
Gearing 5.5% 1.3%
Half-year ended Year ended
31 December 2025 30 June 2025
£'000 £'000
Total return to equity shareholders
Revenue return after taxation 2,050 15,897
Capital return after taxation 43,892 74,160
-------------- --------------
Total return 45,942 90,057
======== ========
Total return per ordinary share
Revenue 0.73p 4.24p
Capital 15.58p 19.78p
-------------- --------------
Total return per ordinary share 16.31p 24.02p
======== ========
1. Net asset value ('NAV') per ordinary share total return
2. MSCI Europe ex UK Small Cap Index
3. Share price total return using closing price
4. The discount is calculated using the net asset value per share and
the share price at 31 December 2025
5. NAV per share, NAV total return, share price total return and the
discount are Alternative Performance Measures. More information on these can
be found in the Annual Report 2025
Sources: Morningstar Direct, Janus Henderson Investors
INTERIM MANAGEMENT REPORT
Chairman's statement
The six months to 31 December 2025 was a good period for your Company. The
fund management team has once again delivered strong performance and the
combination with European Assets Trust PLC ('EAT') completed successfully on
15 October 2025, bringing the Company's net assets to £839.6m at the period
end.
Welcome to our new shareholders who joined us from EAT.
Performance
NAV total return performance for the six months to 31 December 2025 was 7.7%
against the benchmark, the MSCI Europe ex UK Small Cap Index, of 7.1%. The
share price total return over the six-month period was 4.1%.
This continues the excellent long-term performance of the Company's portfolio
over five years, with a NAV total return of 51.5%, well ahead of the benchmark
of 35.6%, along with a share price total return of 54.1%.
New dividend policy
On 20 January 2026, we declared our first interim dividend under the new
policy. This amounted to 2.81p per ordinary share which will be paid to
shareholders at the end of February 2026.
The new dividend policy came into effect on completion of the combination with
EAT. Under the policy, we intend to pay quarterly interim dividends
targeting a total dividend of at least 5% of the NAV per share as at the
preceding financial year end. The NAV per share at 30 June 2025 was 224.4p
per ordinary share and we therefore anticipate that dividends of at least
2.81p per share will also be paid in May and August 2026. Dividends will be
paid from revenue and capital reserves.
Discount management
The average daily discount over the six months of this reporting period was
7.8%, against the average for the investment trust equity sector of 10.2%*.
The discount has narrowed further and, as at 20 February 2026, stood at
7.0%.
We aim to maintain a mid-single digit discount in normal market conditions.
Outlook
The European economy has faced a number of headwinds since the Russian
invasion of Ukraine; the Covid supply-chain shock, the energy shock, the
inflation shock, the interest rate cycle and US tariff policy have all acted
as a drag on the economy. However, the supply-chain shock has unwound, energy
prices have normalised to a degree, inflation is under control, interest rates
are declining and there is a degree of visibility around tariffs. The German
government's abandoning of the debt-brake and embarkation upon fiscal stimulus
and rearmament will have a further positive effect on the European economy
over the coming quarters. This should help the already strong European
periphery and recovering northern European economies, and awaken economic
activity on the Continent.
There is a plentiful supply of excellent companies trading at depressed prices
which our fund managers have been finding for the portfolio. As recovery
builds, we believe the stock markets should see a wider variety of companies
delivering strong price returns to the benefit of your Company. Following a
period of intense corporate activity with the large tender offer last year and
the combination with EAT, we look forward to a period of calm for our fund
managers who have performed admirably despite the distractions of 2025.
James Williams
Chairman
23 February 2026
*Average excluding alternatives
Fund Manager's report
The first six months of the financial year ending 30 June 2026, has seen a
period of decent performance for the Company, with the NAV up 7.7%,
outperforming the MSCI Europe ex UK Small Cap Index by 0.6%. The performance
of the portfolio was driven by idiosyncratic stock selection rather than
exposures to countries, sectors or themes.
Notable positive contributors were Swedish listed podcast platform, Acast,
that helps host, distribute and monetise podcasts through advanced advertising
technology. The company has done a phenomenal job of growing during a soft
advertising market and the shares responded very positively to the third
quarter earnings and updated financial targets, plus the announced move to the
Nasdaq Stockholm Main Market listing. German listed manufacturer of
electricity grid cable connection products, Pfisterer, made a notable
contribution as it raised forecasts for the year after a strong order intake.
Italian listed designer, manufacturer and distributor of luxury eyewear and
sunglasses, Safilo, performed well after compelling results, some license
renewal and new brand partnerships such as the ten-year global licensing
agreement with Victoria Beckham.
The principal detractors from performance were German listed out-of-home
advertising company, Stroeer, that delivered disappointing operating results
and failed to execute the announced exploration of a sale of the company's
billboard business. Another German detractor has been, Ionos, the provider of
webhosting and cloud infrastructure for the small and medium sized enterprise
sector. Mediocre results from the non-core AdTech segment drove
underperformance after a change in policy at Google. This, combined with
concerns that Artificial Intelligence ('AI') might disrupt the business,
weighed on the valuation, which had been a strong contributor to performance
in the prior financial year. Spanish listed HBX, a platform acting as an
exchange for connecting travel suppliers with hotels, was also perceived to be
at risk of being disrupted by AI which weighed on the share price. In both
instances, the logic behind how the companies will be disrupted seems a touch
fuzzy and we think both companies will benefit from the adoption of AI.
There are good reasons for optimism in our market. The stimulative benefits of
interest rate cuts will begin to be felt this year. Accommodative fiscal
positioning, especially in Germany, will boost growth. The post-Covid period
of destocking will cease to act as a drag on the economy and there is more
clarity on capricious US tariff policy. However, challenges persist with
volatile US policymaking, a subdued Chinese economy, ongoing French political
drama and market scepticism about the speed of the German fiscal stimulus, all
providing good reason not to be complacent. The portfolio is positioned for
recovery, but with stocks that have sensible capital structures and management
teams that understand how to unlock value. The opportunity set that we hunt in
is rich with undervalued companies and we continue to uncover exciting
opportunities for your Company.
Ollie Beckett, Rory Stokes and Julia Scheufler
Fund management team
23 February 2026
Sector exposure (% of portfolio excluding cash)
at 31 December 2025 at 30 June 2025
% %
Industrials 29.9 32.8
Technology 17.9 15.1
Consumer Discretionary 17.5 19.9
Financials 12.3 13.4
Basic Materials 7.7 6.1
Health Care 5.9 4.6
Real Estate 3.5 4.2
Energy 2.6 2.9
Utilities 1.4 0.4
Consumer Staples 1.3 0.6
100.0 100.0
Geographical exposure (% of portfolio excluding cash)
at 31 December 2025 at 30 June 2025
% %
Germany 24.4 23.2
Sweden 15.6 13.9
France 12.6 11.2
Netherlands 7.9 9.7
Spain 7.3 8.7
Switzerland 7.0 9.1
Norway 4.6 3.4
Austria 3.7 1.8
Denmark 2.5 2.0
Greece 2.5 3.7
Belgium 2.4 3.4
Finland 2.4 1.5
United Kingdom 2.1 2.4
Italy 1.9 3.2
Portugal 1.1 2.1
Luxembourg 1.0 -
Ireland 0.6 0.7
Bulgaria 0.4 -
100.0 100.0
Top 40 investments at 31 December 2025
Rank Company Sector Geographical area Valuation % of
'£'000
portfolio
1 IG Group Financials United Kingdom 18,908 2.1
2 TKH Industrials Netherlands 16,469 1.9
3 Elmos Semiconductor Technology Germany 16,348 1.8
4 Stroeer Consumer Discretionary Germany 15,820 1.8
5 Flatexdegiro Financials Germany 15,653 1.8
6 Van Lanschot Kempen Financials Netherlands 15,286 1.7
7 Gaztransport et Technigaz Energy France 13,660 1.5
8 Karnov Industrials Sweden 13,311 1.5
9 Ringkobing Landbobank Financials Denmark 13,264 1.5
10 Alzchem Basic Materials Germany 12,992 1.5
10 largest 151,711 17.1
11 KSB Industrials Germany 12,848 1.4
12 SUESS MicroTec Technology Germany 12,238 1.4
13 Bechtle Technology Germany 12,120 1.4
14 Indra Sistemas Technology Spain 12,083 1.4
15 Andritz Industrials Austria 12,020 1.3
16 Ionos Technology Germany 11,740 1.3
17 CTP Real Estate Netherlands 11,384 1.3
18 JCDecaux Consumer Discretionary France 11,292 1.3
19 Planisware Technology France 10,623 1.2
20 Jungheinrich Industrials Germany 10,362 1.2
20 largest 268,421 30.3
21 Recticel Industrials Belgium 9,788 1.1
22 Modern Times Consumer Discretionary Sweden 9,515 1.1
23 Viridien Energy France 9,377 1.1
24 Trigano Consumer Discretionary France 9,367 1.1
25 Alpha Bank Financials Greece 9,363 1.0
26 Banco Comercial Portugues Financials Portugal 9,292 1.0
27 Tonies Consumer Discretionary Luxembourg 9,062 1.0
28 Munters Industrials Sweden 8,859 1.0
29 Konecranes Industrials Finland 8,859 1.0
30 Framery Consumer Discretionary Finland 8,829 1.0
30 largest 360,732 40.7
31 Avolta Consumer Discretionary Switzerland 8,775 1.0
32 Palfinger Industrials Austria 8,550 1.0
33 Vidrala Industrials Spain 8,357 1.0
34 JOST Werke Consumer Discretionary Germany 8,331 0.9
35 Boozt Consumer Discretionary Sweden 8,303 0.9
36 BHG Group Consumer Discretionary Sweden 8,220 0.9
37 Enity Financials Sweden 8,131 0.9
38 Acast Technology Sweden 8,075 0.9
39 Billerud Basic Materials Sweden 7,934 0.9
40 Smartoptics Technology Norway 7,792 0.9
40 largest 443,200 50.0
Principal Risks and Uncertainties
The principal risks facing the Company are:
Investment strategy and objective
The investment objective or policy is not appropriate in the prevailing market
or sought by investors, leading to a wide discount and hostile shareholders.
Investment mandate limits established by the Board are inappropriate leading
to out-of-scope investments which may negatively impact shareholder value.
Poor investment performance over an extended period leading to shareholders
voting to wind up the Company. This may be the result of:
· external factors such as geopolitical instability, including
financial shock, pandemic, climate change, changes in the regulatory
environment, etc.
· internal factors such as poor stock selection, poor management of
gearing, loss of key members of the fund management team, etc.
Operational
Failure of, disruption to or inadequate service levels provided by principal
third-party service providers leading to loss of shareholder value or
reputational damage.
Inadequate cyber security arrangements at the Company's third-party service
providers leading to data being compromised or lost, and shareholder value
impacted.
Legal and regulatory
Loss of investment trust status, breach of the Companies Act 2006, Listing
Rules, Prospectus Regulation and/or Disclosure Guidance and Transparency
Rules or the Alternative Fund Managers Directive and/or legal action brought
against the Company and/or directors and/or the investment manager leading to
a decrease in shareholder value and reputational damage.
Financial
Market, liquidity and/or credit risk, inappropriate valuation of assets or
poor capital management leading to a loss of shareholder value.
Information on these risks and how they are managed is given in the Annual
Report 2025. In the view of the Board, these principal risks and the
uncertainties facing the Company remained largely unchanged over the six
months under review. The Board anticipates that these principal risks will
remain applicable to the remaining six months of the financial year.
Statement of Directors' Responsibilities
Each director (as set out in note 16) confirms, to the best of their
knowledge, that:
· the condensed set of financial statements has been prepared in
accordance with UK adopted International Accounting Standards and gives a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Company as required by Disclosure and Transparency Rule ('DTR')
4.2.4 R;
· the interim management report includes a fair review of the
information required:
- by DTR 4.2.7 R (indication of important events during the first six
months and a description of principal risks and uncertainties for the
remaining six months of the year); and
- by DTR 4.2.8 R (disclosure of related party transactions and changes
therein).
On behalf of the Board
James Williams
Chairman
Statement of Comprehensive Income
Half year ended Half year ended Year ended
31 December 2025 31 December 2024 30 June 2025
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
return return return return return return return return return
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment income 3,319 - 3,319 5,535 - 5,535 20,623 - 20,623
Other income 32 - 32 19 - 19 79 - 79
Gains/(losses) on investments held at fair value through profit or loss - 45,615 45,615 - (59,555) (59,555) - 82,027 82,027
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total income/(loss) 3,351 46,615 48,966 5,554 (59,555) (54,001) 20,702 82,027 102,729
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Expenses
Management and performance fees (note 7) (343) (1,373) (1,716) (415) (1,975) (2,390) (813) (5,030) (5,843)
Other operating expenses (759) - (759) (616) - (616) (1,789) - (1,789)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) before finance costs and taxation 2,249 44,242 46,491 4,523 (61,530) (57,007) 18,100 76,997 95,097
Finance costs (88) (350) (438) (517) (2,068) (2,585) (698) (2,791) (3,489)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) before taxation 2,161 43,892 46,053 4,006 (63,598) (59,592) 17,402 74,206 91,608
Taxation (111) - (111) (302) - (302) (1,505) (46) (1,551)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) for the period and total comprehensive income 2,050 43,892 45,942 3,704 (63,598) (59,894) 15,897 74,160 90,057
======= ======= ======= ======= ======= ======= ======= ======= =======
Return per ordinary share - basic and diluted (note 2) 0.73p 15.58p 16.31p 0.94p (16.10p) (15.16p) 4.24p 19.78p 24.02p
======= ======= ======= ======= ======= ======= ======= ======= =======
The total column of this statement represents the Statement of Comprehensive
Income, prepared in accordance with UK adopted International Accounting
Standards. The revenue and capital return columns are supplementary to this
and are prepared under guidance published by the Association of Investment
Companies.
All items in the above statement derive from continuing operations. No
operations were acquired or discontinued during the period.
All income is attributable to the equity holders of the Company.
The Company does not have any other comprehensive income and hence the net
profit for the period as disclosed above is the same as the Company's total
comprehensive income.
The accompanying notes are an integral part of the condensed financial
statements.
Statement of Changes in Equity
Called up share Share Capital redemption reserve Special distributable reserve Special un-distributable reserve Other Revenue reserve Total
Half year ended capital premium £'000 £'000 £'000 capital £'000 £'000
31 December 2025 £'000 account reserves
(unaudited) £'000 £'000
Total equity at 1 July 2025 4,363 120,364 14,062 - - 338,863 33,025 510,677
Total comprehensive income:
Profit for period - - - - - 43,892 2,050 45,942
Transactions with owners recorded directly to equity:
Issue of shares on ESCT/EAT combination (note 11) 2,049 302,072 - - - - - 304,121
Issue costs in respect of the ESCT/EAT combination - - - - - (1,371) - (1,371)
Contribution from JHI towards ESCT/EAT combination (note 10) - - - - - 1,095 - 1,095
Tender offer - costs - - - - - 17 - 17
Capital costs recoverable - - - - - 9 - 9
Cancellation of share premium account (note 1b) - (422,436) - 371,904 50,532 - - -
Transfer from undistributable reserve to distributable 7,776 (7,776)
Buyback of shares for treasury (note 3) - - - - - (13,026) - (13,026)
Ordinary dividends paid - - - - - - (7,849) (7,849)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total equity at 31 December 2025 6,412 - 14,062 379,680 42,756 369,479 27,226 839,615
======= ======= ======= ======= ======= ======= ======= =======
Called up Share Capital redemption reserve Special distributablereserve Special un-distributable reserve Other Revenue reserve Total
Half year ended share premium £'000 £'000 £'000 capital £'000 £'000
31 December 2024 capital account reserves
(unaudited) £'000 £'000 £'000
Total equity at 1 July 2024 6,208 120,364 14,020 - - 621,976 36,026 798,594
Total comprehensive income:
(Loss)/profit for period - - - - - (63,598) 3,704 (59,894)
Transactions with owners recorded directly to equity:
Buyback of shares for cancellation (note 3) (41) - 41 - - (4,720) - (4,720)
Buyback of shares for treasury (note 3) - - - - - (1,448) - (1,448)
Ordinary dividends paid ‑ - - - - - (13,187) (13,187)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total equity at 31 December 2024 6,167 120,364 14,061 - - 552,210 26,543 719,345
======= ======= ======= ======= ======= ======= ======= =======
Year ended 30 June 2025 Called up share Share Capital redemption reserve Special disributable reserve Special un-distributable reserve Other Revenue reserve Total
(audited) capital premium £'000 £'000 £'000 capital £'000 £'000
£'000 account reserves
£'000 £'000
Total equity at 1 July 2024 6,208 120,364 14,020 - - 621,976 36,026 798,594
Total comprehensive income:
Profit for the year - - - - - 74,160 15,897 90,057
Buyback of shares for cancellation (42) - 42 - - (4,720) - (4,720)
Buyback of shares for treasury - - - - - (1,848) - (1,848)
Tender offer - payments to shareholders (1,803) - - - - (349,391) - (351,194)
Net movement in cash realisation pool - - - - - 1,861 - 1,861
Tender offer - costs - - - - - (3,261) - (3,261)
Capital costs recoverable - - - - - 86 - 86
Ordinary dividends paid - - - - - - (18,898) (18,898)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total equity at 30 June 2025 4,363 120,364 14,062 - - 338,863 33,025 510,677
======= ======= ======= ======= ======= ======= ======= =======
The accompanying notes are an integral part of these condensed financial
statements.
Balance Sheet
At 31 December 2025 At 31 December 2024 At 30 June 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non current assets
Investments held at fair value through profit or loss 886,073 819,421 517,339
-------------- -------------- --------------
Current assets
Receivables 4,705 4,979 5,306
Cash and cash equivalents - 459 1,396
-------------- -------------- --------------
4,705 5,438 6,702
-------------- -------------- --------------
Total assets 890,778 824,859 524,041
-------------- -------------- --------------
Current liabilities
Payables (1,054) (2,123) (5,182)
Bank overdrafts (50,109) (103,391) (8,182)
-------------- -------------- --------------
(51,163) (105,514) (13,364)
-------------- -------------- --------------
Net assets 839,615 719,345 510,677
======== ======== ========
Equity attributable to equity shareholders
Called up share capital (note 3) 6,412 6,167 4,363
Share premium account - 120,364 120,364
Capital redemption reserve 14,062 14,061 14,062
Special distributable reserve 379,680 - -
Special undistributable reserve 42,756 - -
Retained earnings:
Other capital reserves 369,479 552,210 338,863
Revenue reserve 27,226 26,543 33,025
-------------- -------------- --------------
Total equity 839,615 719,345 510,667
======== ======== ========
Net asset value per ordinary share - basic and diluted (note 4) 238.18p 182.66p 224.45p
======== ======== ========
The accompanying notes are an integral part of these condensed financial
statements.
Cash Flow Statement
Half year ended Half year ended Year ended
31 December 2025 31 December 2024 30 June 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Profit/(loss) before taxation 46,053 (59,592) 91,608
Add back: interest payable 438 2,586 3,489
Add back: (gains)/losses on investments held at fair value through profit or (45,615) 59,555 (82,027)
loss
Sales of investments held at fair value through profit or loss 263,682 154,286 409,662
Purchases of investments held at fair value through profit or loss (348,472) (151,920) (312,211)
Decrease in prepayments and accrued income 1,566 1,519 1,010
Decrease in amounts due from brokers 273 816 1,459
(Decrease)/increase in accruals and deferred income (3,486) (195) 1,953
Net movement in cash realisation pool - - 1,861
(Decrease)/increase in amounts due to brokers (1,167) (545) 622
Transfer of assets in respect of the tender offer - cash exit - - 107,486
Capital costs recoverable 9 - 86
Accrued costs on tender offer 17 - (950)
Debtor for shareholder tender cancelled - - 34
------------ ------------ ------------
Net cash (outflow)/inflow from operating activities before interest and (86,702) 6,510 224,082
taxation
------------ ------------ ------------
Interest paid (302) (2,571) (3,893)
Taxation on investment income (253) (29) (1,739)
------------ ------------ ------------
Net cash (outflow)/inflow from operating activities (87,257) 3,910 218,450
------------ ------------ ------------
Financing activities
Equity dividends paid (net of refund of unclaimed dividends) (7,849) (13,187) (18,898)
Buyback of shares for cancellation - (6,168) (4,720)
Buyback of shares for treasury (12,761) - (1,685)
Net drawdown/(repayment) of bank overdraft 42,892 15,672 (81,214)
Costs associated with ESCT/EAT combination (1,248)
Net cash acquired and received following ESCT/EAT combination (note 11) 64,827
Tender offer - cash exit - - (108,455)
Tender offer - in specie exit - - (3)
Tender offer - costs - - (2,311)
------------ ------------ ------------
Net cash raised from/(used in) financing activities 85,861 (3,683) (217,286)
------------ ------------ ------------
(Decrease)/increase in cash and cash equivalents (1,396) 227 1,164
Cash and cash equivalents at the start of the period 1,396 232 232
Cash and cash equivalents at the period end ------------ ------------ ------------
Comprising: Cash at bank - 459 1,396
======= ======= =======
The accompanying notes are an integral part of these condensed financial
statements.
Notes to the condensed financial statements
1. Accounting policies
a) Basis of preparation
The condensed financial statements comprise the unaudited results of the
Company for the half-year ended 31 December 2025. They have been prepared on
a going concern basis and in accordance with UK adopted International
Accounting Standards and with the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies and Venture Capital Trusts' ('SORP'),
issued in July 2022 where the SORP is consistent with the requirements of UK
adopted International Accounting Standards
b) Share premium
The share premium account represents the premium above nominal value received
by the Company on issuing shares net of issue costs.
On 15 October 2025 the share premium account increased by £302,072,000
following the issue of 131,128,841 ordinary shares as a result of the
combination with EAT (note 11). Subsequently, the amount standing to the value
of the share premium account as at 9 December 2025, being £422,436,000, was
cancelled and £371,904,000 was transferred to the 'Special distributable
reserve' and £50,532,000 was transferred to the 'Special undistributable
reserve'. The amount of this newly created reserve, which can be distributed,
is restricted by the value of liabilities as at that date, until such time
that those liabilities have been paid and is therefore split into these two
separate reserves. Between that date and 31 December 2025, liabilities of
£7,776,000 were settled, increasing the amount that is distributable.
For the period under review, the Company's accounting policies have not varied
from those described in the annual report for the year ended 30 June 2025.
These financial statements have not been audited or reviewed by the
Company's auditors.
2. Return per ordinary share
The return per ordinary share is based on the profit for the half-year of
£45,942,000 (half year ended 31 December 2024: loss of £59,894,000; year
ended 30 June 2025: profit of £90,057,000) and on 281,686,436 ordinary shares
(half year ended 31 December 2024: 395,136,083 and year ended 30 June 2025:
374,911,120), being the weighted average number of ordinary shares in issue
during the period.
The return per ordinary share detailed above can be further analysed between
revenue and capital, as below.
Half year ended Half year ended Year ended
31 December 2025 31 December 2024 30 June 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net revenue profit 2,050 3,704 15,897
Net capital profit/(loss) 43,892 (63,598) 74,160
---------- ---------- ----------
Net profit/(loss) (45,942) (59,894) 90,057
====== ====== ======
Weighted average number of ordinary shares in issue during the period 281,686,436 395,136,083 374,911,120
Half year ended Half year ended Year ended
31 December 2025 31 December 2024 30 June 2025
(unaudited) (unaudited) (audited)
pence pence pence
Revenue return per ordinary share 0.73 0.94 4.24
Capital return per ordinary share 15.58 (16.10) 19.78
---------- ---------- ----------
Total return per ordinary share 16.31 (15.16) 24.02
====== ====== ======
3. Share capital
At 31 December 2025 there were 352,506,187 ordinary shares in issue excluding
shares held in treasury (31 December 2024: 393,815,298 and 30 June 2025:
227,524,156).
During the half-year ended 31 December 2025, the Company repurchased 6,146,810
ordinary shares for treasury, at a total cost of £13,026,000, and no ordinary
shares were repurchased for cancellation (31 December 2024: 2,655,272 ordinary
shares repurchased for cancellation, at a total cost of £4,720,000 and
817,028 ordinary shares repurchased for treasury, at a total cost of
£1,448,000 and 30 June 2025: 2,655,272 ordinary shares repurchased for
cancellation, at a total cost of £4,720,000 and 1,011,095 ordinary shares
repurchased for treasury, at a total cost of £1,848,000).
On 15 October 2025 the Company issued 131,128,841 new shares to former EAT
shareholders in consideration of the £304,121,000 of net assets acquired from
EAT in accordance with the scheme of reconstruction and winding up of EAT
under section 110 of the Insolvency Act 1986. No further ordinary shares
have been issued (31 December 2024 and 30 June 2025: no ordinary shares
issued).
4. Net asset value per ordinary share
The net asset value per ordinary share is based on the net assets attributable
to equity shareholders of £839,615,000 (31 December 2024: £719,345,000; 30
June 2025: £510,677,000) and on 352,506,187 ordinary shares (31 December
2024: 393,815,298; 30 June 2025: 227,524,156), being the number of ordinary
shares in issue at the period end excluding shares held in treasury.
5. Dividends
The Company has declared the first interim dividend under the new dividend
policy adopted on completion of the combination with EAT. The policy targets a
total dividend of at least 5% of the NAV per share as at the end of the
preceding financial year.
The interim dividend of 2.81p per share will be paid to shareholders on the
register at the record date of 30 January 2026. The payment will be made on
27 February 2026, with the shares having traded ex-dividend on 29 January
2026. The NAV per share at 30 June 2025 was 224.4 pence per ordinary share
and, it is anticipated that dividends of at least 2.81p per ordinary share
will also be paid in May and August 2026.
A second interim dividend of 3.45p per ordinary share was paid on 8 October
2025, prior to the combination with EAT and in lieu of the final dividend for
the year ended 30 June 2025. The amount was paid from the Company's revenue
account.
6. Transaction costs
Purchase transaction costs for the half year ended 31 December 2025 were
£443,000 (half year ended 31 December 2024: £199,000; year ended 30 June
2025: £384,000). These comprise mainly stamp duty and commission. Sales
transaction costs for the half year ended 31 December 2025 were £106,000
(half year ended 31 December 2024: £63,000; year ended 30 June 2025:
£178,000).
7. Management and performance fees
Following completion of the combination with EAT, the base management fee
payable to the investment manager is 0.50%, previously this was 0.55%, of net
assets up to £800m, reducing to 0.45% thereafter. Fees are charged quarterly
in arrears.
The investment manager may also be eligible to receive a performance-related
fee. In order to determine whether a performance fee is payable, performance
is measured against, and expressed relative to, the benchmark, the MSCI Europe
ex UK Small Cap Index expressed in Sterling. Performance of both the Company
and the benchmark is measured on a NAV total return (with gross income
reinvested) basis and is measured over three years.
In any given year in which a performance fee is payable, the performance fee
rate is 15% of the positive difference between the average annual NAV total
return and the average annual total return of the benchmark. The upper limit
on the total fee, including the base fee and any performance fee, for any
given accounting year is 2.0% of the Company's NAV as at the last day of the
relevant calculation period. A performance fee hurdle over the benchmark of
1.0% has to be reached before any performance fee can be earned. For clarity,
performance is measured solely on the basis of NAV total return relative to
the total return of the benchmark index; no account is taken of whether the
NAV grows or shrinks in absolute terms. Any performance fee payable is
allocated to capital.
A performance fee of £nil has been accrued as at 31 December 2025 (31
December 2024: £315,000; 30 June 2025: £1,778,000).
8. Financial instruments
At the period end the carrying value of financial assets and financial
liabilities approximates their fair value.
Fair value hierarchy
The table below analyses recurring fair value measurements for financial
assets and financial liabilities. These fair value measurements are
categorised into different levels in the fair value hierarchy based on the
inputs to valuation techniques used. Categorisation within the hierarchy has
been determined on the basis of the lowest level of input that is significant
to the fair value measurement of the relevant asset or liability. The
different levels are defined as follows:
Level 1: valued using quoted prices in active markets for identical assets;
Level 2: valued by reference to valuation techniques using observable
inputs other than quoted prices included within Level 1; and
Level 3: valued by reference to valuation techniques that are not based on
observable market data.
Financial assets and financial liabilities at fair value Level 1 Level 2 Level 3 Total
through profit or loss at 31 December 2025 £'000 £'000 £'000 £'000
Investments at fair value through profit or loss 886,073 - - 886,073
------------ ---------- ----------- ------------
Total financial assets and liabilities carried 886,073 - - 886,073
at fair value
======= ====== ====== =======
There were no transfers between levels of fair value hierarchy during the
period. Transfers between levels of fair value hierarchy are deemed to have
occurred at the date of the event or through a change in circumstances that
caused the transfer.
9. Going concern
The directors have assessed the principal risks and uncertainties facing the
Company and concluded that it is appropriate to continue to adopt the going
concern basis of preparation. The assets of the Company consist mainly of
securities, most of which are realisable and, accordingly, the Company has
adequate financial resources to continue in operational existence for at least
twelve months from the date of approval of these financial statements.
10. Related party transactions
The Company's transactions with related parties in the period were with the
directors and the investment manager. There were no material transactions
between the Company and its directors during the period and the only amounts
paid to the directors were in respect of expenses and remuneration for which
there were no outstanding amounts payable at the period end. In relation to
the provision of services by the investment manager, other than fees payable
by the Company in the ordinary course of business and the facilitation of
marketing activities with third parties, there were no material transactions
with the investment manager affecting the financial position of the Company
during the period under review.
The Company and EAT both bore their own costs in relation to the combination.
These were reflected in the formula applied to the respective formula asset
values of the two companies when they were compared to calculate the number of
shares in Company which were to be issued to EAT shareholders.
Janus Henderson Investors contributed to the costs of the proposals to ensure
that they were cost neutral for continuing shareholders, irrespective of the
results of the combination. Direct costs borne by the Company were partially
covered by the contribution by Janus Henderson Investors. The adjustment to
the dividend payment profile for the Company in respect of the year ended 30
June 2025, protected the Company's existing shareholders from the impact of
the issuance of shares and the relatively short period to earn income on the
enlarged share capital. As a result, shareholders were protected from any
adverse capital or income impact arising from the combination. Janus Henderson
Investors had further agreed to cover the costs incurred by the Company had
the transaction not proceeded to completion.
The cost contribution as at 15 October 2025, was £1,128,000 and, under the
terms of the agreement, would be reduced as a result of any share buybacks
from former EAT investors holding new shares issued by the Company in the
Columbia Threadneedle Savings Plans. As at 31 December 2025, the contribution
had reduced to £1,095,000. Subsequent to the Balance Sheet date, the buybacks
from the Columbia Threadneedle Savings Plans were completed, resulting in the
final cost contribution of £1,091,000.
11. Transaction with European Assets Trust PLC ('EAT')
On 15 October 2025, the Company announced that it had acquired £304,121,000
of net assets from EAT in consideration for the issue of 131,128,841 new
ordinary shares calculated in accordance with the terms of the combination
with EAT.
Net assets acquired £'000
Investments 239,294
Cash 64,827
-----------
Net assets 304,121
-----------
Satisfied by the value of new ordinary shares issued 304,121
=======
12. Comparative information
The financial information contained in this half year report does not
constitute statutory accounts as defined in section 434 of the Companies Act
2006. The financial information for the half years ended 31 December 2025 and
31 December 2024 has not been audited or reviewed by the Company's auditors.
The figures and financial information for the year ended 30 June 2025 are
extracts based on the latest published accounts and do not constitute
statutory accounts for that year. Those accounts have been delivered to the
Registrar of Companies and include the Independent Auditor's Report which was
unqualified and did not contain a statement under either section 498(2) or
498(3) of the Companies Act 2006.
13. Website
Details of the Company's share price and net asset value, together with
general information about the Company, monthly factsheets and data,
announcements, reports and details of general meetings can be found at
www.europeansmallercompaniestrust.com
(http://www.europeansmallercompaniestrust.com)
14. Half year report
The Company's half year report for the six months ended 31 December 2025,
together with a summary extract will shortly be available on the Company's
website at: www.europeansmallercompaniestrust.com
(http://www.europeansmallercompaniestrust.com) . Copies of the summary will be
posted to shareholders in March 2026. Both documents will shortly be available
for inspection on the National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
15. Company status
The European Smaller Companies Trust PLC is registered in England and Wales,
No. 2520734, has its registered office at 201 Bishopsgate, London EC2M 3AE and
is listed on the London Stock Exchange.
SEDOL/ISIN: BMCF868/GB00BMCF8689
London Stock Exchange (TIDM) code: ESCT
Global Intermediary Identification Number (GIIN): JX9KYH.99999.SL.826
Legal Entity Identifier (LEI): 213800N1B1HCQG2W4V90
16. Directors and Secretary
At the date of this report, the directors of the Company are James Williams
(Chairman), Daniel Burgess (Chairman of the Audit Committee), Kate
Cornish-Bowden, Ann Grevelius (Senior Independent Director), Nadia
Meier-Kirner and Stuart Paterson. The Corporate Secretary is Janus Henderson
Secretarial Services UK Limited.
For further information please contact:
Ollie Beckett, Fund Manager Harriet Hall, PR Director Investment Trusts
The European Smaller Companies Trust PLC Janus Henderson Investors
Telephone: 020 7818 5919 Telephone: 020 7818 2919
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) are
incorporated into, or form part of, this announcement.
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