REG - Scot.American Inv. - The Scottish American Inv Co plc Annual Results
19/02/2026 07:00
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RNS Number : 5756T Scottish American Investment Co PLC 19 February 2026
RNS Announcement
The Scottish American Investment Company P.L.C.
Legal Entity Identifier: 549300NF03XVC5IFB447
Regulated Information Classification: Additional regulated information
required to be disclosed under the applicable laws and regulations.
The following is the results announcement for the year to 31 December 2025
which was approved by the Board on 18 February 2026.
Results for the year to 31 December 2025 and Board and Manager updates
· SAINTS' objective is to deliver real dividend growth by increasing
capital and growing income
· The Board is recommending a final dividend which will take the total
dividends for the year to 15.92p per share, an increase of 7% over the
previous year
· The increase in the dividend is twice the rate of inflation over the
year, and is supported by strong earnings per share growth of 7.9%
· SAINTS' dividend has also grown at 3% per year ahead of inflation
since 1938, the last time the dividend was cut more than eight decades ago,
and this year marks the fifty second consecutive year of dividend growth
· The operational performance at SAINTS' holdings has been encouraging,
and the Company's property portfolio has delivered a further year of positive
returns
· However, SAINTS' emphasis on investing for dependable earnings and
dividend growth over the long term has been out of favour in a year in which
market concentration, AI and cyclicality have been dominant features. Over the
year SAINTS' NAV total return* (borrowings at fair value) of 2.4% has
significantly lagged the market's return† of 14.7%
· The share price total return of 6.8% has been helped by a narrowing
of the discount. The Company has bought back 12.76m shares at significant
discounts to NAV over the year, representing 7.2% of SAINTS shares in issue at
the start of the year. This has boosted NAV returns by some 0.5%
· The Board continues to have confidence in the Company's investment
strategy for delivering reliable income, above inflation dividend growth and
capital growth over the long term
* See Glossary of Terms and Alternative Performance Measures at
the end of this announcement.
† As measured by the total return of the FTSE All-World Index
(in sterling terms). Source: Morningstar/LSEG/Baillie Gifford and relevant
underlying index providers
18 February 2026
SAINTS' objective is to deliver real dividend growth by increasing capital and
growing income. Its policy is to invest mainly in equity markets, but other
investments may be held from time to time including bonds, property and other
asset classes.
The Company is managed by Baillie Gifford, the Edinburgh based fund management
group with around £193 billion under management and advice as at 16 February
2026.
Past performance is not a guide to future performance. SAINTS is a listed UK
company. As a result, the value of its shares and any income from those shares
is not guaranteed and could go down as well as up. You may not get back the
amount you invested. As SAINTS invests in overseas securities, changes in the
rates of exchange may also cause the value of your investment (and any income
it may pay) to go down or up. You can find up to date performance information
about SAINTS on the SAINTS' page of the Managers' website saints-it.com.
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) is
incorporated into, or forms part of, this announcement.
For further information please contact:
James Dow and Ross Mathison, Managers, The Scottish American Investment
Company P.L.C.
Tel: 0131 275 2000
James Budden, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Director, Four Communications
Tel: 0203 920 0555 or 07872 495396
Chairman's statement
SAINTS' objective is to deliver real dividend growth by increasing capital and
growing income. The Board is recommending a final dividend which will bring
the total dividends for the year to 15.92p per share, an increase of 7% over
the previous year, more than twice the rate of inflation. The Company
continues to meet its objective of growing dividends ahead of inflation over
the long term, and the recommended dividend will extend the Company's record
of raising its dividend to fifty-two consecutive years.
However, despite encouraging income growth, total returns have not kept up
with the market and the discount which emerged at the beginning of 2024 has
persisted. Nonetheless, it is the Board's belief that demand for an income
which grows ahead of inflation remains at the core of SAINTS' shareholders'
requirements, and it considers that SAINTS is well placed reliably to deliver
on this objective in the future as it has done in the past.
The Board regularly reviews and continues to have confidence in the Company's
underlying investment strategy and in its managers, whilst maintaining a sharp
focus on the operational performance of the Company's holdings and engaging
with the manager on performance and the robustness and suitability of their
investment process. The Board also recognises the importance of Baillie
Gifford's scale, resources and stability as a partnership, and the close
alignment of the Company's and Baillie Gifford's focus on the long term. The
Board takes the discount seriously and continued a programme of share buy
backs in 2025.
Overview
I wrote last year that SAINTS' Board and Managers remained alert to both the
opportunities and the risks arising from the accelerated adoption of
Artificial Intelligence. This is one of two themes which have dominated
markets in 2025 and, with the exception of the sharp drops in the spring
related to the reported capabilities of the Chinese AI company Deep Seek , it
is the potential opportunities which have dominated, with significant capital
expenditure having a positive impact on US corporate profits and GDP growth.
However, despite the market rapidly shrugging off DeepSeek, it was nonetheless
instructive, as it gave a glimpse of significant underlying concerns about the
level and efficacy of AI related expenditure, reflected in continuing debate
about the extent of an AI "bubble".
The other key to another year of exceptionally strong, if once again unusually
concentrated, progress from markets has been the persistence of inflation.
Rising tariffs and protectionism have not helped. Nor has government
acquiescence in unsustainable public sector deficits and rising debt. Central
banks' approach to monetary policy has tended to attach a higher weight to an
impending slowdown in economic activity, which has so far yet to materialise,
than to bringing inflation below target. The result has been a steepening of
the yield curve, indicating an expectation that inflation will persist over
the longer term.
More generally, economies and markets have had to grapple with considerable
policy uncertainty often triggered by President Trump's latest announcement.
There are signs that the impact of tariffs and erratic trade policy has begun
to affect the US consumer and the dollar, and that some investors are seeking
to re-allocate investments away from the US, which currently makes up close to
three-quarters of the global equity benchmark.
This underlines a third development which has so far only temporarily impacted
on markets, but which is likely to have great and lasting consequences. This
has been the evolution of the US from the bedrock of NATO, bulwark against
totalitarian expansionism and willing enforcer and paymaster of Pax Americana,
to something rather different. The tap of military support for Ukraine has
been largely turned off, Russian aggression appears likely to be rewarded and
the US's status as a reliable ally severely undermined, not least through its
expansionist ambitions in relation to Greenland. The most immediate impact has
been on the price of European defence stocks. But the long-term effects on
geopolitics and trade are likely to be much more profound.
SAINTS has delivered another year of above‑inflation dividend growth but
total returns have been modest, particularly relative to the market. Against
the backdrop described above, steady, durable, quality stocks have been left
behind by both large index constituents at the epicentre of the AI boom and
other more cyclical companies such as European defence stocks and banks. The
continued dependable growth in the income produced by the Company's
investments is the key to SAINTS' long‑term dividend progression. But
lagging the market is not comfortable for shareholders, the Managers or the
Board.
The generally strong operational performance which supports SAINTS' dividend
growth and the broad reasons for SAINTS' underperformance relative to the
market over the year are explained more fully in the Manager's review. The
Board continues to monitor performance and activity closely, to ensure that
the Manager's processes remain sound, that there is no 'style drift' and that,
where investments have not performed as hoped, appropriate action is taken and
lessons learned.
The persistence of discounts has remained a challenge across the investment
trust sector, and SAINTS is no exception. To help support SAINTS' share price,
the Board has consistently bought back shares at levels which have also
enhanced NAV. Factors affecting the discount and demand for the Company's
shares are likely to have included both performance and the availability of
alternative investments such as gilts with higher yields or trusts with
higher, manufactured dividends. The Board remains confident that the discount
is cyclical rather than structural.
Dividend and Inflation
The Board recommends a final dividend of 4.595p which will take the full year
dividend to 15.92p per share, 7% higher than the 2024 dividend of 14.875p.
This year's increase is more than double the annual rate of inflation of 3.4%
as measured by CPI over 2025.
It remains the Company's objective to deliver real dividend growth over the
long term. Since 1938, when SAINTS last reduced its dividend, the Company has
delivered dividends that have not only been resilient through thick and thin,
but have also grown by more than 3% a year ahead of inflation. And since the
end of 2003, when the Board of SAINTS appointed Baillie Gifford as managers,
the Company has continued this track record of resilient dividend growth: over
this period the growth in SAINTS' dividend has also beaten inflation by 3%
a year.
The power of compounding is easily overlooked. To illustrate, since I joined
the SAINTS' Board in 2016, SAINTS' dividend has increased by over 47%, from
10.825p to this year's recommended total of 15.92p.
Revenues
Earnings per share grew to 15.65p over the year, an increase of some 7.9% over
the year, and investment income has risen to £32.7m. Operational performance
of the equity and infrastructure equity holdings has been generally
encouraging, and this has been reflected in growing dividends, as detailed in
the Managers' report.
Property income also increased over the year, helped by the high proportion of
index linked and fixed rental increases and considered upgrades to the
portfolio, whilst bond income was lower due to a lower average allocation over
the year.
Both managers (Baillie Gifford and, for the Company's property investments,
OLIM) continue to focus on supporting the dependability and the future growth
of the Company's dividend in line with SAINTS' objective.
Total Return Performance
SAINTS' NAV return was positive over the year, and the net asset value total
return (capital and income with borrowings at fair) was 2.4%. However, for the
reasons summarised above, SAINTS' returns fell short of those from global
equities (as measured by the total of return of the FTSE All‑World Index in
sterling terms) which returned 14.7% over 2025. Although SAINTS' shares remain
on a discount, the discount narrowed over the year and the share price return
was 6.8%.
The Managers and your Board have a long‑term perspective and we would
therefore encourage shareholders to assess your Company's performance over the
long term. Over the last ten years SAINTS has delivered a NAV return of over
two hundred percent, which is strong in absolute terms.
However, although SAINTS NAV return remains ahead of the AIC Global Equity
Income sector return over ten years, it is behind both the weighted‑average
sector return and the benchmark return over that period. Whilst this relative
performance is disappointing, it is worth bearing two things in mind. Firstly,
that SAINTS has an income approach, both in terms of its primary objective of
delivering real dividend growth by increasing capital and growing income and
the way its assets are deployed dependably to meet that objective. And
secondly, we are viewing these figures after a highly unusual period in
markets. Stability and quality, attributes which are intrinsic to SAINTS'
approach and the achievement of its long-term objectives, have been deeply out
of favour. This has been uncomfortable, but it is our strong conviction that
earnings and dividend growth which is not rewarded today will be rewarded
tomorrow.
SAINTS' property portfolio delivered a positive return over the year, although
capital values fell back slightly. However, transactions including the sale of
a shorter let industrial property in Southend, at a price in excess of its
previous valuation, and the purchase of a garden centre with a significantly
longer lease, have resulted in the portfolio's weighted average unexpired
lease term increasing to 16.4 years, and helped increase the portfolio's
running yield to 6.4%.
The principal contributors to and detractors from performance and the changes
to the equity, property and bond investments are explained in more detail in
the Managers' review below.
Borrowings
SAINTS' long term borrowings of just under £95m represent gearing of some 10%
of shareholders' funds. The cost of these borrowings is just under 3% per
annum, and they are deployed to enhance current income and long term returns.
The borrowing arrangements were increased and then renewed in 2021 and 2022
respectively, when interest rates were lower than currently. The estimated
market or fair value of the borrowings - £63.2m - is therefore well below
their book value, although it is slightly higher than last year (£62.1m).
Environmental, Social and Governance (ESG)
The Board of SAINTS recognises the importance of considering Environmental,
Social and Governance (ESG) factors when making investments, and in acting as
a responsible steward of capital. We consider that Board oversight of such
matters is an important part of our responsibility to shareholders, and
SAINTS' ESG Policy is available to view on the Company's website
(saints-it.com).
The Board has been strongly supportive of Baillie Gifford's approach and of
their constructive engagement with the companies SAINTS owns, and with
potential holdings, in relation to important challenges including climate
change. The Board is also supportive of OLIM's approach in relation to
property, and in particular of its consideration of environmental factors
including climate change in assessing the suitability of SAINTS' investments.
I would encourage shareholders to read SAINTS' annual Stewardship Report which
can also be accessed on the Company's website (saints-it.com).
Issuance and buybacks
Over the year the Company has bought back 12,764,384 shares (representing 7.2%
of the shares in issue at the start of the year) at a cost of some £65.4m.
All buybacks have taken place at a significant discount to the Company's NAV,
and so each buyback has increased the NAV per share of the Company. Taken
together the buybacks over the year have boosted NAV by just under 0.5%. The
Company has continued to buy back shares in the current year, and the Board is
closely monitoring evidence of the effect which buybacks have on the share
price and discount. No shares were issued during the year.
Board and Manager
I have had the privilege of serving on SAINTS' Board for just over nine years.
Therefore, as previously indicated and in line with best governance practice,
I do not intend to stand for re‑election as a Director at the AGM in 2026.
The Board carried out a search for a new director in 2025 and, as previously
announced, Angus Macpherson was appointed to the Board in September 2025, with
a view to becoming the Chairman of SAINTS at the conclusion of the AGM in
April 2026. Mr Macpherson's appointment falls to be ratified by shareholders
at the AGM in April 2026. It remains the Board's intention that Mr Macpherson
should become Chairman of the Board following the conclusion of the AGM.
Angus is Chairman of Noble and Company (UK) Limited, an independent boutique
Scottish corporate finance business. He has over thirty-five years of
investment experience, and is an experienced chairman and director of
investment trusts, serving on a number of boards since 2010. He is currently
Chairman of Templeton Emerging Markets Investment Trust plc, and a
non-executive director of Schroder Japan Growth Fund plc and of Hampden and Co
plc. He will be stepping down from Schroder Japan Growth Fund plc in July of
this year.
I am grateful to SAINTS' Senior Independent Director, Dame Mariot Leslie, who
led the recruitment process. The Board were advised throughout the process by
Odgers, an independent recruitment consultant. Odgers submitted all the names
which were considered for inclusion on the long list of potential candidates,
as well as providing evaluations of all candidates.
I would also like to thank Anthony Dickson, who will be stepping back from his
role as SAINTS' Client Director at Baillie Gifford after the AGM. Anthony has
provided excellent counsel and support to the Board over the last twelve
years.
Outlook
Economies and corporate earnings tend to grow in the long run, buoyed by
technological progress. But uncertainties will always remain, whether in
relation to the pace of growth, to inflation, to fiscal sustainability or the
changing world order. As a Board we continue to believe a long‑term approach
based on investing globally for sustainable growth is the best route to
achieving SAINTS' aim of growing the dividend ahead of inflation over time.
SAINTS aims to deliver that dividend growth by increasing capital and growing
income. Given this is my final report, I hope you will forgive me for ending
on a personal note and quoting from a report on investment trusts written by
my grandfather which I recently found. Ian Macpherson, who began his career as
a stockbroker and fund manager in the 1920s (but never worked for Baillie
Gifford), wrote:
'Carlyle Gifford* taught me years ago that income was of the first importance
and it has proved invaluable for fund management, not only directly but
indirectly by maintaining capital value.'
I found this fascinating for three reasons. Firstly, it underlines the
timeless importance of investing for income as an objective in its own right.
Secondly, it highlights the strong link between a resilient income and
resilient capital values. And thirdly, it reveals that in the long history of
Baillie Gifford, income has played its part alongside the Growth investing for
which it is currently better known. The fact that the team which James Dow
manages is one of the largest teams at Baillie Gifford indicates that the firm
believes both Growth and Income will be important to the firm and its clients
in the future.
SAINTS has been working for individual investors for over 150 years. It is
built to help shareholders' income keep pace with inflation, as well as
providing capital growth. And it is built for resilience.
As I look ahead, I take considerable comfort from this, from the nature of
SAINTS' investments, and from the managers' emphasis on quality, on
dependability and on growth far out into the future. Along with the rest of
the Board, I am encouraged that, as is outlined further in the Managers'
review below, Baillie Gifford have continued to find new and attractive
opportunities. We also believe that both the quality and duration of SAINTS'
property portfolio has been further enhanced over the past year.
My considered judgement and confidence in Baillie Gifford, OLIM, the Board and
the Company is why SAINTS is my largest equity investment. I hope that you
share my confidence, thank you for your continued support, and wish you all
the very best in the future.
AGM
The AGM will be held at 11.30am on Friday 17th April 2026 at Baillie
Gifford's offices at Calton Square, 1 Greenside Row, Edinburgh. The meeting
will be followed by a presentation from the Managers. Shareholders are
cordially invited to attend the meeting and presentation. As last year, those
who are unable to attend in person will be able to view proceedings by remote
video link. Details of joining the AGM remotely can be obtained by contacting
the Company's Managers at enquiries@bailliegifford.com who will be able to
provide you with details and instructions for doing so. Please note you will
not be able to vote and you will not be counted as part of the quorum but you
will have the opportunity to watch the managers' presentation.
I would remind shareholders that they are able to submit proxy voting forms
before the applicable deadline and also to direct any questions or comments
for the Board in advance of the meeting through the Company's Managers, either
by emailing enquiries@bailliegifford.com or calling 0800 917 2113 (Baillie
Gifford may record your call).
The Board welcomes recent moves by platforms to facilitate shareholder
participation and encourages shareholders to cast their votes. The Association
of Investment Companies' guidance on how to vote through various investment
platforms can be found on its website at: How to vote your shares | The AIC
Finally, my fellow Directors and I send you all our very best wishes for the
year ahead.
Lord Macpherson of Earl's Court
Chairman
18 February 2026
* One of Baillie Gifford's two founders in 1907, who officially retired in
1965.
For a definition of terms see glossary of terms and alternative performance
measures at the end of this announcement.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See
disclaimer at the end of this announcement.
Past performance is not a guide to future performance.
Managers' review
Performance
It was Jean-Jacques Rousseau, the Enlightenment philosopher, who penned the
famous maxim: "La patience est amère, mais son fruit est doux". The English
translation is not quite as lyrical, but it captures the meaning just as well:
"Patience is bitter, but its fruit is sweet".
We have ruminated at length on this expression while reviewing the performance
of SAINTS' portfolio over the course of 2025. It has, frankly, been a
bittersweet year. The sweet is that the companies you own have delivered good
growth in earnings: about 10% higher than in 2024. Regular readers will recall
this level of growth is squarely in line with our philosophical north-star,
which is to invest in companies that we foresee delivering 10% compound growth
for long periods of time, paying resilient dividends along the way. That box
was ticked last year, and the fruit of this was robust growth in the earnings
of SAINTS. For the full year, the Company's earnings per share (EPS) came in
at 15.65p. This is 7.3% above the level in 2024, and it underpinned the
Board's ability to raise the dividend to 15.92p, an increase of 7.0%
year-on-year: double the rate of UK CPI inflation.
But the year also left a bitter taste. Because this underlying growth was
simply not rewarded by share price growth of the portfolio holdings, and this
resulted in lacklustre NAV and share price performance. Pulling apart the
numbers, what we saw was that as the earnings of the portfolio's companies
went up, so their Price/Earnings multiples came down by roughly an equal
amount. The net result was the capital value of the equity portfolio was
essentially flat over the course of the year, with the equity portfolio total
return being around 2%. As a result, SAINTS' NAV also remained broadly flat,
year over year.
This is a frustrating outcome, particularly when performance is compared with
global equities more broadly which, as measured by the FTSE All World index,
delivered a much stronger total return during the same period of 14.7%, in
sterling terms. Whilst we do not expect to keep up with the market during
periods of exuberance, we would have hoped to deliver a stronger absolute
return for clients.
In this Managers' Report we will reflect on why the share prices of the
companies in the portfolio did not follow their earnings upwards or keep up
with the wider stock market. We'll explain how we have re-visited all of the
holdings to investigate if we are missing something. (Spoiler: largely
positive, with a few cases where we found problems and divested). We'll then
detail the new investments we made to ensure the portfolio is positioned for
continued growth in the years ahead.
Alas we cannot hope to write as eloquently as M. Rousseau, but after a
frustrating year we can at least try to deliver some measure of enlightenment
as to why the Company's NAV return last year was so lacklustre. We are
convinced that the holdings remain on track to deliver continued solid growth
in the years ahead, and we remain optimistic that patience will ultimately
bear fruit, in terms of stronger absolute and relative returns.
Quality's loss of momentum
In his statement, the Chairman mentions that our investment style has been out
of favour. One of the distinguishing features of your portfolio is its
emphasis on "Quality". This term is sometimes bandied about with little
explanation, but it denotes something important. Essentially it refers to
companies which make attractive profits as a ratio of their shareholders'
capital, and sustain this over long periods.
Many companies do not achieve this: as examples, most car-makers and
airlines earn profits equivalent to a 5% annual return on the billions of
capital they have invested in factories and aircraft. This is little better
than the return investors can earn risk-free by holding cash in a bank
account. Not very attractive in terms of risk and reward! Of course, such
companies can have their moment in the sun, when a cyclical upswing can
temporarily boost earnings growth and catalyse strong share price performance,
and indeed many have done so recently. This has helped some 'Value' investors
and short term investors, but not investing in such companies has been one
aspect of the headwind we have faced as long term, growth oriented investors.
The other aspect has been what we have owned: SAINTS' equity investments are
concentrated in companies which earn persistently above-average returns, let's
say 10 or 15% a year on shareholders' funds, which are labelled "high
quality". Such returns indicate these companies must be doing something which
their customers value deeply, and which competitors struggle to replicate. If
these companies can re-invest earnings at these high returns, they should grow
faster than low quality companies, in turn delivering superior growth to
shareholders over the long run. This makes them much more attractive to
investors.
Evidence is in favour of high-quality companies being the best investments to
own in the long term. For example, in the quarter-century to 2025, the MSCI
World Quality Index (an index which focuses solely on companies which fit the
quality description) produced a total return of close to 3,000 per cent,
compared to a return of just over 600 per cent for the broader MSCI World
Index.
Your portfolio's companies earn an average return on invested capital of
around 15%. This is almost 60% higher than the stock market average. It is
clearly a "high-quality" portfolio of holdings. But in 2025, frustratingly,
these types of companies saw limited share price appreciation.
A typical example is SAINTS' holding in Schneider Electric. This company is a
dominant provider of power boards and other electrical equipment that is
fundamental to operating buildings. As the world generates and consumes
ever-more electricity, from solar panels to datacentres, Schneider's sales and
profits are growing. In 2025 it earned profits of about EUR 4.5 billion, a
high quality 15% return on shareholders' equity. Its earnings grew by 10% over
the prior year, and the dividend was raised by 10%. But the share price? Flat
during the year.
With Schneider's earnings up 10% and share price flat, its Price/Earnings
multiple fell by 10%. This picture was repeated across the portfolio: rising
earnings offset by falling P/Es. Quality compounders typically trade at a
premium to the index, given their proven ability to deliver resilient returns
through the market cycle while also outperforming over the long‑term. But
during 2025 SAINTS equity portfolio de‑rated, ending at about 22x trailing,
or 19x forward earnings. This is well below the portfolio's historic premium
of 3 to 4 points above the index. Indeed, it has never been so "cheap"
relative to the broader stock market.
Drilling down into the data from last year, what we see is that two stories
essentially drove all of the stock market's return in 2025. One was AI. Some
investors are betting that numerous companies will see a continuing boom in
profits from this terrific new technology, across industries as diverse as
semiconductors and utilities. As a result, many of these companies saw their
PE multiples go up last year. SAINTS' portfolio has several AI-related
investments, the likes of Microsoft and TSMC, but it is not as large and
concentrated an exposure as in the benchmark: which we view as rather risky.
It is difficult to forecast where the long-term winners from AI will emerge.
Those blessed with grey hair may remember that in the 1990s internet boom -
another technology that changed the world, just as AI surely will - there were
some companies making oodles of profit (such as Cisco) and others losing money
hand over foot (such as Pets.com). This is reminiscent of the current AI boom:
some companies are currently making huge amounts of money (such as Nvidia) and
others are burning it at a rapid rate (such as OpenAI). After the internet
boom peaked in the early 2000s, both Cisco and Pets.com turned out to be poor
investments. Meanwhile the biggest long-term winners from the internet often
revealed themselves later. For example, Google only really emerged as a
long-term success story in the mid-2000s. It takes time for long-term winners
to show themselves, and being early to bet does not correlate with returns. We
do not intend to gamble clients' money unless we have high conviction in
long-term success.
The second big story of last year was the interest rate cycle. Many cyclical
names saw their valuations rise in 2025, on hopes of continued rate reductions
by central banks. This benefited some of the lower return, lower quality
businesses in the stock market. It was much less of a tailwind to your
portfolio.
Momentum in these two parts of the market was very strong. Money flowed hot
and fast into names linked to these themes, and their valuations rose.
Meanwhile more traditional industries, such as consumer goods, healthcare and
professional services, which tend to be the higher quality, more resilient,
and in the long-term stronger growing parts of the stock market, suffered from
declining valuations as investors took money away from them. This momentum has
no doubt been reinforced by the ongoing shift to passive investment, where
funds are effectively switched into the most concentrated and most expensive
parts of the market, funded by the indiscriminate sale of the rest.
In the long-term, this is unlikely to continue. Technical factors will come
and go, economic cycles will abate, and capital expenditure will be judged on
its results: ultimately share prices will follow earnings growth. We are
confident in the continued growth in the earnings of SAINTS' portfolio
companies and this should, with patience, bear fruit in capital growth. This
is even more the case now that last year's earnings progression is, as yet,
unrewarded in share price appreciation.
Finally, in reviewing performance over the year, we should acknowledge that
there have also been stock specific disappointments. The most notable of these
has been Novo Nordisk, where operational missteps, management changes,
intensifying competition and question marks over future pricing have led to a
sharp fall in the share price. We continue to believe that the Company's
prospects are very strong, as one of the two lead players in a growing market:
a market where growth will be spurred by price reductions, where illegal
copycats should be removed from the market, and where the company's innovation
pipeline over the coming year should put it back on the front foot - for
example its forthcoming launch of the world's first oral pill for obesity.
Another European stock, Edenred the voucher company, has been adversely
affected by regulatory changes in overseas markets. Here too we believe that
its core competencies in its core markets continue to offer a pathway to
assured, and capital light, growth, and that these setbacks are not fatal
blows but temporary roadbumps.
As managers we invest our own savings alongside shareholders', and so we very
much appreciate that patience has been required, both in terms of challenges
at the stock level and the style headwind alluded to above.
So, what have we been doing in response?
First, we have gone back and checked every investment case in the portfolio to
make sure they all remain on track. Where the share price of a holding has
been disappointing, but we believe the competitive advantage and long-term
growth runway remain intact, we are swallowing the bitter taste and staying
patient. As mentioned above, this even applies to the portfolio's two weakest
performers last year, Novo Nordisk and Edenred, which faced real,
well-publicised headwinds. After in-depth review and engagement, we increased
both positions, because of the strength of the underlying growth opportunity,
combined with even more attractive valuations.
Second, we have weeded out of the portfolio any names where our analysis shows
the investment case had fundamentally weakened. Over the year we divested from
SAINTS' holding in UPS, the delivery company, where new competition had raised
serious challenges to future growth. Likewise TCI and Man Wah, two
manufacturers where, despite real strengths, we have seen brutal competition
in China, diminishing our confidence in future growth. In the final quarter of
the year we divested from Cognex, where we had observed signs of share loss in
some key markets, and our ongoing research had raised questions about the
company's growth strategy.
Third, these holdings have been replaced by new investments. These are
typically names which recently have fallen out of favour in the stock market,
yet we see them delivering strong growth in the long-term. At the interim
results we talked about Accenture, the world's leading technology consultancy,
and Jack Henry, the number one provider of core banking software in the US. In
the second half of the year we made investments in MSCI, Alphabet, Mediatek
and Zoetis.
New investments
MSCI is a founder-run business with exciting growth opportunities ahead of it.
Its core business is providing the index data that investment funds, both
active and passive, are benchmarked against. We foresee many years of good
growth as its clients buy subscriptions to a rising number of bespoke indices,
in an increasingly fragmented market. We also see opportunities to grow its
profit in multiple adjacent markets, such as private equity and risk
analytics. Its growth requires little capital which allows it to pay out a
progressive dividend. Recently the shares have been de-rated following a
slowdown in one part of its business: this presented an opportunity to take a
holding for SAINTS at a good price.
Alphabet is a company which, until recently, was a poor fit for SAINTS'
strategy and we judged too risky to invest in. The company refused to pay
dividends, and until only a few months ago it faced a case from the US
Department of Justice calling for it to be broken up. However, the company has
at last initiated a dividend, and in September the judge ruling on the legal
case ruled that a break-up was unnecessary. This transforms the future of the
company. What we foresee happening from here is many years of strong growth
ahead, in earnings and dividends. We believe AI is likely to be a significant
growth driver for the company in its core search business. It is unique in not
only owning leading AI technology developed in-house, but also in having a
long list of other attractive advantages: an advertising business which allows
it to monetise AI profitably; prodigious cash-flow available to invest in this
area; and numerous re-enforcing advantages such as its Cloud business, YouTube
platform, and more besides.
Mediatek is a Taiwan-based digital chip designer with excellent engineering
capabilities. We are particularly excited by the potential of its 'ASIC' chips
as AI continues to evolve. Our view, based on experience of technology
developments historically, is that in the next few years we will see AI move
from an "investment at all costs" mentality, to a more cost-aware approach. We
also expect to see dual-sourcing away from Nvidia, which currently dominates
the market. When this happens, we expect to see strong growth at Mediatek,
whose cost-efficient chips are an excellent alternative. Picking AI winners is
not easy, but in this case we have high conviction that growth will follow.
Finally we invested in Zoetis, the leading inventor of pharmaceuticals for
pets. The company has impressive R&D capabilities, a proven management
team, and an exciting pipeline full of future launches of new products.
Following the exuberance of the COVID period, when its shares became very
expensive, Zoetis has suffered a big de-rating in the past couple of years.
Investors have switched their prior euphoria for anything pet-related,
replacing it with fear that weakening consumer affordability will reduce
spending on pets. We are looking through this short-term fear, and taking it
as an opportunity to invest in a good long-term compounder, at a reasonable
valuation.
Property, fixed income and infrastructure investments
One of the great advantages of the Investment Trust structure is the ability
to borrow at attractive rates for long periods of time. This gearing can then
be invested in assets which beat the cost of borrowing and generate additional
income and returns for SAINTS' shareholders, beyond the equity portfolio. The
Company's total borrowings are currently £95m, or a prudent 10% gearing, with
maturities in the 2030s and 2040s and an average interest rate just below 3%.
The proceeds of these borrowings have been invested across a diversified range
of asset classes: a directly-held property portfolio, together with corporate
and sovereign bonds, and infrastructure-related equities. This diversification
helps ensure income resilience across the economic cycle.
The property portfolio delivered a positive return over the year, although the
capital values fell back slightly. Rental income rose by 2.3% to £5.67m, and
the rental yield on capital value, at 6.3%, continued to beat SAINTS' cost of
borrowing by a comfortable margin, and thus support SAINTS' revenues and
dividend. During the year, following industry best practice, the process of
rotating valuers to ensure the valuations of the properties remain independent
continued. There was one new purchase, a garden centre in Wales which has
recently been refurbished, with its rent reviews fixed at 2.5% growth per
annum. This was part-funded by the sale of an industrial warehouse, east of
London, which was likely to need refurbishment in another few years.
Following these transactions SAINTS entered 2026 with a portfolio consisting
of 10 properties and a rental income of which only 5% is subject to
open-market reviews: meaning that 95% of the rent is subject to fixed
increases or is directly linked to UK inflation. This is a robust
under-pinning for SAINTS' own growing dividend.
The bond portfolio was reduced slightly during the year, to help fund the
purchase in the property portfolio. This led to a reduction in income during
2025, until towards the end of the year we used income generated to fund new
purchases: with the result that bond income is expected to rise again in 2026.
The ups and downs of the bond market in the past 12 months gave us some
interesting opportunities to invest, particularly in some corporate bonds
where the risk of default, on our analysis, is extremely low. SAINTS now has
investments in corporate bonds issued by Tesco, Nestle, Heathrow and Haleon,
all of which we see as strong borrowers, yet typically they are paying us
attractive yields of 6%.
The infrastructure portfolio also had a solid year. Holdings such as Terna,
Exelon, Jiangsu Expressway and Primary Healthcare all delivered share price
increases in the double-digits. The outlier was Greencoat UK Wind, which
continues to suffer from regulatory uncertainty: a great shame when Britain
could be a home for a settled regime that encourages investment in renewable
energy, yet instead undertakes seemingly endless reviews of the operating
regime. However, by and large the investment in these infrastructure names was
rewarding for SAINTS.
Pause for thought
It is worth taking a moment to step back and take stock of the results which
the Board's strategy has achieved for shareholders over the past several
years. By focusing on long-term growth, rather than short-term yield, the
Board has enabled us as managers to focus on extending SAINTS' long record of
resilient dividend growth paid from natural income. The table below summarises
the outcomes in terms of dividend, NAV and share price, compared with 5 and 10
years ago:
2015 2020 2025
Dividend 10.70p 12.00p 15.92p
NAV (31/12) 262p 450p 536p
Share price (31/12) 262p 464p 516p
Put simply, a shareholder who has remained invested in SAINTS over this period
has seen their annual income rise by almost 50%, whilst their capital has
broadly doubled. This has beaten UK inflation over the same period. What is
perhaps less obvious is this growth has been achieved despite falling yields
on most asset classes. For example, the dividend yield on US equities a decade
ago was 2.2%, but it has fallen to only 1.1% today. This is a challenging
environment for income-growth managers, because inevitably some investments
don't live up to expectations, and when the manager sells they can end up
re-investing the capital on lower yields. But thanks to robust growth across
SAINTS' portfolio holdings, we have managed to accommodate this headwind. The
result is this year's dividend of 15.92p representing a yield of 6.1% on the
book cost of an investment in 2015.
This result has been delivered with, in our view, substantially less risk than
the broad equity market. A good example of this is the resilient progression
of the dividend, which has grown every single year during this period. That's
despite the stresses and strains of, for example, the COVID pandemic. It is a
testament to the relatively low-risk nature of SAINTS' equity portfolio that
the dividend has remained so resilient.
Of course, what matters now is not the past but the future. As managers we are
fully focused on continuing SAINTS record of delivering a dividend that grows
substantially ahead of inflation; that remains resilient through thick and
thin; and which is underpinned by natural income. Although the capital value
will oscillate from year to year, and will sometimes lag the broader market,
its foundation in a growing income stream should, ultimately, produce good
capital growth for shareholders.
As managers we share the view of the Board that this combination is an
attractive one for the long-term saver who desires growth but is cautious
about taking too much risk.
Looking forward
Looking ahead, 2026 may yet prove a choppy environment for markets. Equities
are priced for the good times to roll on, but geopolitics are increasingly
unstable, inflation has not gone away, the jury is out on the efficacy of much
AI related capital expenditure and there is always a risk from those wildcard
factors which no crystal ball can foresee. However, whatever the world throws
at investors in the coming year, we expect SAINTS to demonstrate greater
resilience than the broader market, given the high quality of the businesses
the Company owns. Quality compounders can lag during periods of exuberance -
but they tend to prove their worth when conditions get tougher.
After the de-rating we've seen in the past year, valuations across the
portfolio are compelling relative to history, and relative to the market. The
underlying fundamentals of the holdings remain strong. Our focus remains
consistent: investing in good businesses with high potential for 10% compound
earnings growth that should last for many years to come, while paying
resilient dividends every year.
We hope you agree that's a compelling formula for dependable long-term
investment success. It's an approach which, in 2025, continued to bear fruit
in terms of dividend progression for shareholders, without taking too much
risk. We are optimistic that, with continued patience, the earnings growth
being delivered by your portfolio will again be rewarded by capital
appreciation, in addition to continuing to support SAINTS' strong dividend
growth over time.
James Dow
Ross Mathison
Baillie Gifford & Co
18 February 2026
For a definition of terms see glossary of terms and alternative performance
measures at the end of this announcement.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See
disclaimer at the end of this announcement.
Past performance is not a guide to future performance.
List of investments
As at 31 December 2025
Name Business 2025 2025
Value % of total
£'000 assets
Global equities
Taiwan Semiconductor Manufacturing Semiconductor manufacturer 37,471 3.8
Microsoft Computer software 33,879 3.5
Apple Consumer technology 33,061 3.4
Procter & Gamble Household product manufacturer 25,469 2.6
Atlas Copco Engineering 25,277 2.6
CME Derivatives exchange operator 24,427 2.5
Coca Cola Beverage company 23,240 2.4
Roche Pharmaceuticals and diagnostics 22,372 2.3
Analog Devices Integrated circuits 21,545 2.2
Partners Group Asset management 20,854 2.1
Deutsche Boerse Securities exchange owner/operator 20,041 2.1
Midea Group Appliance manufacturer 18,760 1.9
Accenture Global professional services 18,399 1.9
Jack Henry & Associates Provider of software and IT services for banks 18,294 1.9
Schneider Electric Electrical power products 18,071 1.9
Pepsico Snack and beverage company 17,975 1.8
Amadeus IT Group Technology provider for the travel industry 17,692 1.8
Epiroc Mining and infrastructure equipment provider 17,629 1.8
L'Oréal Cosmetics 17,439 1.8
B3 S.A. Securities exchange owner/operator 17,214 1.8
McDonald's Fast food restaurants 16,955 1.7
Anta Sports Sportswear manufacturer and retailer 16,820 1.7
Admiral Car insurance 16,577 1.7
Watsco Distributes air conditioning, heating and refrigeration equipment 16,318 1.7
USS Second-hand car auctioneer 16,238 1.7
Cisco Systems Data networking equipment 15,590 1.6
Fastenal Distribution and sales of industrial supplies 15,538 1.6
NetEase Online gaming company 14,509 1.5
Novo Nordisk Pharmaceutical company 14,049 1.4
United Overseas Bank Commercial banking 13,905 1.4
Nestlé Food producer 13,897 1.4
Experian Credit scoring and marketing services 13,295 1.4
Carsales.com Online marketplace for classified car advertisements 12,514 1.3
Albemarle Producer of speciality and fine chemicals 11,737 1.2
Valmet Manufacturer of pulp and paper machinery 11,381 1.2
Hong Kong Exchanges and Clearing Securities exchange owner/operator 11,347 1.2
T. Rowe Price Fund manager 10,743 1.1
AVI Staple foods manufacturer 10,225 1.1
Home Depot Home improvement retailer 10,169 1.1
Edenred Voucher programme outsourcer 9,915 1.0
Intuit Software 9,821 1.0
Starbucks Coffee retailer 9,400 1.0
Wolters Kluwer Information services and solutions provider 9,189 0.9
Texas Instruments Semiconductor supplier 9,164 0.9
Alphabet Search platform, software, cloud services and more 8,578 0.9
MSCI Global provider of investment decision support tools 8,299 0.9
Diageo International drinks company 7,733 0.8
Coloplast Manufacturer of medical products 7,640 0.8
Paychex HR, payroll and benefits outsourcer 6,724 0.7
Arthur J Gallagher Insurance broker 6,717 0.7
Eurofins Laboratory testing provider 6,180 0.6
SAP Business software developer 5,876 0.6
Medtronic Medical devices company 4,838 0.5
MediaTek Taiwanese electronic component manufacturer 4,636 0.5
Fevertree Drinks Producer of premium mixer drinks 4,212 0.4
Zoetis Animal health medicines and vaccines 1,265 0.1
Total global equities 831,103 85.5
Infrastructure equities
Greencoat UK Wind UK wind farms 9,154 0.9
Terna Electricity grid operator 7,785 0.8
Transurban Group Tollroad operator 6,621 0.7
Jiangsu Expressway Tollroad operator 4,227 0.4
Primary Health Properties REIT Primary healthcare property group 3,910 0.4
Exelon Grid and utility operator 899 0.1
Total Infrastructure equities 32,596 3.3
Direct Property See table below 90,350 9.3
Bonds
Indonesia 7.375% 15/05/2048 Indonesian rupiah denominated 1,848 0.2
Ivory Coast 6.625% 2048 Euro denominated 1,720 0.2
Nestlé Finance Intl 5.125% 2038 Sterling denominated 2,052 0.2
Tesco Corp Treasury Services 5.5% 2035 Sterling denominated 2,162 0.2
Indonesia 9% 15/03/2029 Indonesian rupiah denominated 1,848 0.2
Brazil CPI Linked 15/05/2045 Brazilian real denominated 2,400 0.3
Haleon UK Capital 3.375% 2038 Sterling denominated 2,060 0.2
Heathrow Funding 5.875% 2041 Sterling denominated 2,079 0.2
Total Bonds 16,169 1.7
Total Investments 970,218 99.7
Net Liquid Assets 3,164 0.3
Total Assets (before deduction of borrowings) 973,382 100.0
Property portfolio
Location Type Tenant 2025 2025 2025 2024
EPC (#) Value % of total Value
Rating £'000 assets £'000
Cardiff(†) Garden Centre Blue Diamond UK Limited B 9,600 1.0 -
5-yearly 2.5% per annum
Crawley Motorway Services Moto Hospitality Limited B 20,500 2.1 19,700
RPI-linked annual increase (uncapped till May 2025, then collar 2% cap 4%)
Denbigh Supermarket Aldi Stores Limited B 4,800 0.5 4,800
Fixed-increases 5-yearly (2.5% compounded)
Earley Public House Spirit Pub Company (Managed) Limited (Greene King plc) C 2,150 0.2 2,500
5-yearly open market review
Gosport Supermarket Aldi Stores Limited A 5,550 0.6 5,550
RPI-linked collar 1% cap 2.75%
Holyhead Hotel Premier Inn Hotels Limited A 6,000 0.6 6,500
CPI-linked with 4% cap
New Romney Holiday Village Park Resorts Limited C 17,200 1.8 19,250
RPI-linked collar 3% cap 7% p.a. + turnover-related top up 5-yearly
Otford Public House Spirit Pub Company (Managed) Limited (Greene King plc) C 1,650 0.2 1,700
5-yearly open market review
Ringwood Hotel Premier Inn Hotels Limited B 7,700 0.8 8,350
CPI-linked with 4% cap
Southend-on-Sea* Warehouse Booker Limited C - - 8,500
Fixed increases 5-yearly (2.5% compounded)
Taunton* Bowling Alley Mitchells & Butlers Retail (No.2) Limited (sublet to Hollywood A - - 3,900
Bowl Group plc)
RPI-linked until 2024, then 5-yearly open market
Witney Industrial James Donaldson Group Limited A 15,200 1.5 14,700
RPI-linked collar 2% cap 4%
90,350 9.3 95,450
* Sold during the year.
# See glossary of terms and alternative performance measures at the end of
this announcement.
† Purchased during the period.
Performance attribution
For the year to 31 December 2025
Portfolio breakdown Average allocation Average allocation Total return † Total return
SAINTS benchmark * SAINTS benchmark *†
% % % %
Global equities 95.8 99.9 2.0 14.7
Infrastructure equities(‡) 2.8 0.1 8.5
Bonds 1.4 9.2
Direct property 10.0 4.0
Cash at bank 0.4 -
Borrowings at book value (10.2) 3.0
Portfolio total return (borrowings at book value) 2.4
Other items(#) (0.1)
Fund total return (borrowings at book value) 2.3
Adjustment for change in fair value of borrowings 0.1
Fund total return (borrowings at fair value) 2.4
* The Company's benchmark is the FTSE All-World Index (in sterling terms).
† Alternative performance measure - see glossary of terms and
alternative performance measures at the end of this announcement.
# Includes Baillie Gifford and OLIM Property Limited management fees and
effects of share buybacks.
‡ The allocation reflects the six infrastructure equity holdings set out
the list of investments above.
Source: Baillie Gifford/LSEG and relevant underlying index providers. See
disclaimer at the end of this announcement.
Past performance is not a guide to future performance.
Income statement
For the year ended 31 December 2025 (with comparatives as at 31 December 2024)
Notes 2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments - securities - (2,552) (2,552) - 28,654 28,654
Gains/(losses) on investments - property - (1,976) (1,976) - 1,887 1,887
Currency gains/(losses) - 258 258 - (26) (26)
Income 2 32,714 - 32,714 32,387 - 32,387
Gross return 32,714 (4,270) 28,444 32,387 30,515 62,902
Management fees 3 (1,035) (3,105) (4,140) (1,091) (3,271) (4,362)
Other administrative expenses (1,424) - (1,424) (1,349) - (1,349)
Net return before finance costs and taxation 30,255 (7,375) 22,880 29,947 27,244 57,191
Finance costs of borrowings (711) (2,133) (2,844) (711) (2,134) (2,845)
Net return on ordinary 29,544 (9,508) 20,036 29,236 25,110 54,346
activities before taxation
Tax on ordinary activities (3,222) 885 (2,337) (3,414) 940 (2,474)
Net return on ordinary 26,322 (8,623) 17,699 25,822 26,050 51,872
activities after taxation
Net return per ordinary share 4 15.65p (5.13p) 10.52p 14.50p 14.62p 29.12p
A final dividend for the year of 4.595p is proposed (2024 - 4.175p), making a
total dividend for the year of 15.92p (2024 - 14.875p). More information on
dividend distributions can be found in note 8 below.
The total column of the Income statement represents the profit and loss
account of the Company. The supplementary revenue and capital columns are
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing
operations.
A Statement of comprehensive income is not required as there is no other
comprehensive income.
The accompanying notes below are an integral part of the Financial Statements.
Balance sheet
As at 31 December 2025 (with comparatives as at 31 December 2024)
Notes 2025 2025 2024 2024
£'000 £'000 £'000 £'000
Fixed assets
Investments - securities 879,868 948,345
Investments - property 90,350 95,450
970,218 1,043,795
Current assets
Debtors 4,584 4,474
Cash and cash equivalents 3,521 2,818
8,105 7,292
Creditors
Amounts falling due within one year (4,941) (3,652)
Net current assets 3,164 3,640
Total assets less current liabilities 973,382 1,047,435
Creditors
Amounts falling due after more than one year 6 (94,756) (94,742)
Net assets 878,626 952,693
Capital and reserves
Share capital 7 44,579 44,579
Share premium account 186,100 186,100
Capital redemption reserve 22,781 22,781
Capital reserve 608,421 682,413
Revenue reserve 16,745 16,820
Shareholders' funds 878,626 952,693
Net asset value per ordinary share* 536.1p 539.3p
The Financial Statements of The Scottish American Investment Company P.L.C.
(company registration number SC000489) were approved and authorised for issue
by the Board and were signed on 18 February 2026.
Lord Macpherson of Earl's Court
Chairman
The accompanying notes below are an integral part of the Financial Statements.
* See glossary of terms and alternative performance measures at the end of
this announcement.
Statement of changes in equity
For the year ended 31 December 2025
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 January 2025 44,579 186,100 22,781 682,413 16,820 952,693
Shares bought back into treasury - - - (65,369) - (65,369)
Net return on ordinary activities after taxation - - - (8,623) 26,322 17,699
Dividends paid in the year 5 - - - - (26,397) (26,397)
Shareholders' funds at 31 December 2025 44,579 186,100 22,781 608,421 16,745 878,626
For the year ended 31 December 2024
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 January 2024 44,579 186,100 22,781 664,892 16,832 935,184
Shares bought back into treasury - - - (8,529) - (8,529)
Net return on ordinary activities after taxation - - - 26,050 25,822 51,872
Dividends paid in the year 5 - - - - (25,834) (25,834)
Shareholders' funds at 31 December 2024 44,579 186,100 22,781 682,413 16,820 952,693
The accompanying notes below are an integral part of the Financial Statements.
Cash flow statement
For the year ended 31 December 2025 (with comparatives as at 31 December 2024)
Notes 2025 2025 2024 2024
£'000 £'000 £'000 £'000
Net return on ordinary activities before taxation 20,036 54,346
Adjustments to reconcile company profit before tax to net cash flow from
operating activities
Net (gains)/losses on investments - securities 2,552 (28,654)
Net (gains)/losses on investments - property 1,976 (1,887)
Currency (gains)/losses (258) 26
Finance costs of borrowings 2,844 2,845
Other capital movements
Changes in debtors 464 (1,001)
Change in creditors (128) 620
Other non-cash changes 9 63
Taxation
Overseas withholding tax (2,406) (2,398)
Cash from operations 25,089 23,960
Interest paid (2,831) (2,845)
Net cash inflow/(outflow) from operating activities 22,258 21,115
Cash flows from investing activities
Acquisitions of investments - securities (126,852) (128,263)
Acquisitions of investments - property (9,972) (32,867)
Disposals of investments - securities 192,250 163,969
Disposals of investments - property 13,096 5,654
Net cash inflow/(outflow) from investing activities 68,522 8,493
Cash flows from financing activities
Equity dividends (26,397) (25,834)
Shares bought back (63,938) (8,270)
Net cash inflow/(outflow) from financing activities (90,335) (34,104)
Increase/(decrease) in cash and cash equivalents 445 (4,496)
Exchange movements 258 (26)
Cash and cash equivalents at start of year 2,818 7,340
Cash and cash equivalents at end of year 3,521 2,818
The accompanying notes below are an integral part of the Financial Statements.
Notes to the Financial Statements
1. Principal accounting policies
The Financial Statements for the year to 31 December 2025 have been prepared
in accordance with FRS 102 'The Financial Reporting Standard applicable in the
UK and Republic of Ireland' and on the basis of the accounting policies set
out below which are unchanged from the prior year and have been applied
consistently.
2. Income
2025 2024
£'000 £'000
Income from investments
UK dividends 3,282 2,402
Overseas dividends 22,609 23,168
Overseas interest 803 1,058
26,694 26,628
Other income
Deposit interest 97 180
Rental income 5,671 5,542
Other income 252 37
6,020 5,759
Total income 32,714 32,387
Total income comprises:
Dividends from financial assets classified at fair value through profit or 25,891 25,570
loss
Interest from financial assets designated at fair value through profit or loss 803 1,058
Interest from financial assets not at fair value through profit or loss 97 180
Other income not from financial assets 5,923 5,579
32,714 32,387
3. Baillie Gifford & Co Limited, a wholly owned subsidiary of
Baillie Gifford & Co, has been appointed as the Company's Alternative
Investment Fund Manager ('AIFM') and Company Secretary. Baillie Gifford &
Co Limited has delegated investment management services to Baillie Gifford
& Co. Dealing activity and transaction reporting have been further
sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia
(Hong Kong) Limited. The management of the property portfolio has been
delegated to OLIM Property Limited.
The Investment Management Agreement between the AIFM and
the Company sets out the matters over which the Managers have authority in
accordance with the policies and directions of, and subject to restrictions
imposed by, the Board. The Investment Management Agreement is terminable on
not less than six months' notice. Compensation fees would only be payable in
respect of the notice period if termination were to occur within a shorter
notice period. The annual management fee is 0.45% of the first £500 million
of total assets and 0.35% of the remaining total assets, total assets being
the value of all assets held (excluding the property portfolio) less all
liabilities, other than any liability in the form of debt intended for
investment purposes, calculated on a quarterly basis. The Board is of the view
that calculating the fee with reference to performance would be unlikely to
exert a positive influence on performance.
The Property Management Agreement sets out the matters over
which OLIM Property Limited has discretion and those matters which require
Board approval. The Property Management Agreement is terminable on three
months' notice. The annual fee is 0.5% of the value of the property portfolio,
subject to a minimum quarterly fee of £6,250.
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 920 2,761 3,681 973 2,918 3,891
Property management fee 115 344 459 118 353 471
1,035 3,105 4,140 1,091 3,271 4,362
4. Net return per ordinary share
2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
Net return per ordinary share 15.65p (5.13p) 10.52p 14.50p 14.62p 29.12p
Revenue return per ordinary share is based on the net
revenue on ordinary activities after taxation of £26,322,000
(2024 - £25,822,000) and on 168,163,933 (2024 - 178,117,932) ordinary
shares of 25p, being the weighted average number of ordinary shares in issue
during the year.
Capital return per ordinary share is based on the net
capital loss for the financial year of £8,623,000 (2024 - net capital gain of
£26,050,000), and on 168,163,933 (2024 - 178,117,932) ordinary shares, being
the weighted average number of ordinary shares in issue during the year.
There are no dilutive or potentially dilutive shares in
issue.
5. Ordinary dividends
2025 2024 2025 2024
£'000 £'000
Amounts recognised as distributions in the year:
Previous year's final (paid 11 April 2025) 4.175p 3.80p 7,265 6,776
First interim (paid 19 June 2025) 3.625p 3.45p 6,215 6,152
Second interim (paid 18 September 2025) 3.750p 3.55p 6,361 6,330
Third interim (paid 11 December 2025) 3.950p 3.70p 6,556 6,576
15.500p 14.50p 26,397 25,834
We also set out below the total dividends paid and proposed
in respect of the financial year, which is the basis on which the requirements
of section 1158 of the Corporation Tax Act 2010 are considered. The revenue
available for distribution out of current year profits by way of dividend for
the year is £26,322,000 (2024 - £25,822,000).
2025 2024 2025 2024
£'000 £'000
Dividends paid and payable in respect of the year:
First interim (paid 19 June 2025) 3.63p 3.45p 6,215 6,152
Second interim (paid 18 September 2025) 3.750p 3.55p 6,361 6,330
Third interim (paid 11 December 2025) 3.950p 3.70p 6,556 6,576
Current year's proposed final dividend (payable 24 April 2026) 4.595p 4.175p 7,531 7,375
15.920p 14.875p 26,663 26,433
If approved, the recommended final dividend on the ordinary shares will be
paid on 24 April 2026 to shareholders on the register at the close of business
on 27 February 2026. The ex-dividend date is 26 February 2026. The Company's
Registrar offers a Dividend Reinvestment Plan and the final date for the
receipt of elections for reinvestment of the dividend is 1 April 2026.
6. Creditors - amounts falling due after more than one year
2025 2024
£'000 £'000
£15m Series C 2.23% 25 June 2036 14,946 14,941
£40m Series A 3.12% 11 April 2045 39,906 39,901
£40m Series B 3.12% 11 April 2049 39,904 39,900
94,756 94,742
The main covenants for the loan notes which are tested
monthly are that net tangible assets shall not fall below £120,000,000 and
gross borrowings shall not exceed 40% of the Company's adjusted assets.
7. Share Capital
2025 2025 2024 2024
Number £'000 Number £'000
Allotted, called up and fully paid ordinary shares of 25p each 163,886,374 40,972 176,650,758 44,163
Treasury shares of 25p each 14,429,569 3,607 1,665,185 416
178,315,943 44,579 178,315,943 44,579
During the year to 31 December 2025, the Company issued no ordinary shares at
a premium to net asset value (2024 - no shares issued). 12,764,384 shares were
bought back at a cost of £65,369,000 and held in treasury (2024 - 1,665,185
shares bought back at a cost of £8,529,000). Between 1 January 2026 and 16
February 2026, the Company bought back 760,000 shares into treasury at a cost
of £3,955,000. 15,189,569 shares were held in treasury as at 16 February
2026.
8. Transaction costs of £651,000 (2024 - £1,773,000) and
£178,000 (2024 - £200,000) were suffered on purchases and sales in the year
respectively.
9. Analysis of change in net debt
1 January Cash flows Exchange Other 31 December
2025 £'000 movement non-cash 2025
£'000 £'000 changes £'000
£'000
Cash and cash equivalents 2,818 445 258 - 3,521
Loan notes due in more than one year (94,742) - - (14) (94,756)
(91,924) 445 258 (14) (91,235)
1 January Cash flows Exchange Other 31 December
2024 £'000 movement non-cash 2024
£'000 £'000 changes £'000
£'000
Cash and cash equivalents 7,340 (4,496) (26) - 2,818
Loan notes due in more than one year (94,728) - - (14) (94,742)
(87,388) (4,496) (26) (14) (91,924)
10. The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2025 or 2024 but
is derived from those accounts. Statutory accounts for 2024 have been
delivered to the registrar of companies, and those for 2025 will be delivered
in due course. The auditor has reported on those accounts; their reports were
(i) unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
11. The Report and Accounts will be available on the SAINTS page of the
Managers' website saints-it.com‡ on or around 10 March 2026.
Glossary of terms and alternative performance measures ('APM')
An alternative performance measure is a financial measure of historical or
future financial performance, financial position, or cash flows, other than a
financial measure defined or specified in the applicable financial reporting
framework.
Total assets
This is the Company's definition of Adjusted Total Assets, being the total
value of all assets held less all liabilities (other than liabilities in the
form of borrowings).
Net Asset Value ('NAV')
Also described as shareholders' funds, net asset value is the value of total
assets less liabilities (including borrowings). Net asset value can be
calculated on the basis of borrowings stated at book value and fair value. An
explanation of each basis is provided below. The net asset value per share is
calculated by dividing this amount by the number of ordinary shares in issue
excluding any shares held in treasury.
Net Asset Value (borrowings at book value)
Borrowings are valued at adjusted net issue proceeds. Book value approximates
amortised cost.
Net Asset Value (borrowings at fair value) (APM)
Borrowings are valued at an estimate of their market worth. This indicates the
cost to the Company of repaying its borrowings under current market
conditions. It is a widely reported measure across the investment trust
industry.
31 December 2025 31 December 2024
Shareholders' funds (borrowings at book value) £878,626,000 £952,693,000
Add: book value of borrowings £94,756,000 £94,742,000
Less: fair value of borrowings (£63,164,000) (£62,053,000)
Shareholders' funds (borrowings at fair value) £910,218,000 £985,382,000
Shares in issue at year end 163,886,374 176,650,758
Net asset value per ordinary share (borrowings at fair value) 555.4p 557.8p
Net Asset Value (borrowings at par value) (APM)
Borrowings are valued at nominal par value. A reconciliation from
shareholders' funds (borrowings at book value) to net asset value after
deducting borrowings at par value is provided below.
31 December 2025 31 December 2024
Shareholders' funds (borrowings at book value) £878,626,000 £952,693,000
Add: book value of borrowings £94,756,000 £94,742,000
Less: par value of borrowings (£95,000,000) (£95,000,000)
Shareholders' funds (borrowings at par value) £878,382,000 £952,435,000
Shares in issue at the year end 163,886,374 176,650,758
Net asset value per ordinary share (borrowings at par value) 536.0p 539.2p
Premium/(discount) (APM)
As stockmarkets and share prices vary, an investment trust's share price is
rarely the same as its NAV. When the share price is lower than the NAV per
share it is said to be trading at a discount. The size of the discount is
calculated by subtracting the share price from the NAV per share and is
usually expressed as a percentage of the NAV per share. If the share price is
higher than the NAV per share, this situation is called a premium.
2025 2025 2024 2024
NAV (book) NAV (fair) NAV (book) NAV (fair)
Closing NAV per share 536.1p 555.4p 539.3p 557.8p
Closing share price 516.0p 516.0p 498.5p 498.5p
Premium/(discount) (3.8%) (7.1%) (7.6%) (10.6%)
Ongoing charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a
percentage of the average net asset value (with borrowings at fair value). The
ongoing charges have been calculated on the basis prescribed by the
Association of Investment Companies.
A reconciliation from the expenses detailed in the Income statement above is
provided below.
31 December 2025 31 December 2024
Investment management fee £4,140,000 £4,362,000
Other administrative expenses £1,424,000 £1,349,000
Total expenses (a) £5,564,000 £5,711,000
Average daily cum-income net asset value (with borrowings at fair value) (b) 924,735,000 £991,710,000
Ongoing charges (a) ÷ (b) (expressed as a percentage) 0.60% 0.58%
Total return (APM)
The total return is the return to shareholders after reinvesting the net
dividend on the date that the share price goes ex-dividend.
2025 2025 2025 2024 2024 2024
NAV NAV Share NAV NAV Share
(book) (fair) price (book) (fair) price
Opening NAV per share/share price (a) 539.3p 557.8p 498.5p 524.5p 539.4p 535.0p
Closing NAV per share/share price (b) 536.1p 555.4p 516.0p 539.3p 557.8p 498.5p
Dividend adjustment factor* (c) 1.029208 1.028147 1.031343 1.026922 1.026106 1.028650
Adjusted closing NAV per share/ (d) = (b) x (c) 551.8p 571.0p 532.2p 553.8p 572.4p 512.8p
share price
Total return (d) ÷ (a) -1 2.3% 2.4% 6.8% 5.6% 6.1% (4.2%)
* The dividend adjustment factor is calculated on the assumption that the
dividends paid out by the Company are reinvested into the shares of the
Company at the cum income NAV/share price at the ex-dividend date.
Active share (APM)
Active share, a measure of how actively a portfolio is managed, is the
percentage of the listed equity portfolio that differs from its comparative
index. It is calculated by deducting from 100 the percentage of the portfolio
that overlaps with the comparative index. An active share of 100 indicates no
overlap with the index and an active share of zero indicates a portfolio that
tracks the index.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an
investment trust can borrow money to invest in additional investments for its
portfolio. The effect of the borrowing on the shareholders' assets is called
'gearing'. If the Company's assets grow, the shareholders' assets grow
proportionately more because the debt remains the same. But if the value of
the Company's assets falls, the situation is reversed. Gearing can therefore
enhance performance in rising markets but can adversely impact performance in
falling markets.
Gross gearing is the Company's borrowings expressed as a percentage of
shareholders' funds.
31 December 2025 31 December 2024
Borrowings at book value £94,756,000 £94,742,000
Shareholders' funds £878,626,000 £952,693,000
Gross gearing 11% 10%
Equity gearing is the Company's borrowings adjusted for cash, bonds and
property expressed as a percentage of shareholders' funds.
31 December 2025 31 December 2024
Borrowings at book value £94,756,000 £94,742,000
Less: cash and cash equivalents (£3,521,000) (£2,818,000)
Less: bond investments (£16,169,000) (£11,058,000)
Less: direct property investments (£90,350,000) (£95,450,000)
Adjusted borrowings (£15,284,000) (£14,584,000)
Shareholders' funds £878,626,000 £952,693,000
Equity gearing (2%) (2%)
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers (AIFM)
Regulations, leverage is any method which increases the Company's exposure,
including the borrowing of cash and the use of derivatives. It is expressed as
a ratio between the Company's exposure and its net asset value and can be
calculated on a gross and a commitment method. Under the gross method,
exposure represents the sum of the Company's positions after the deduction of
sterling cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of sterling cash balances and after certain hedging and netting
positions are offset against each other.
Collar and cap
A clause in a lease agreement which sets out the minimum (collar) and maximum
(cap) limits by which rent can be increased during rent review negotiations.
Unexpired lease term
The length of time remaining on a rental lease agreement. Rental lease
agreements may contain a break clause allowing one or both parties to agree to
end the lease agreement at an earlier date.
Energy performance certificate (EPC)
An energy performance certificate rates a property's energy efficiency from A
(most efficient) to G (least efficient). This certificate indicates potential
energy costs, environmental impacts and is vital in promoting energy
efficiency.
Sustainable Finance Disclosure Regulation ('SFDR')
The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a
direct impact in the UK due to Brexit, however, it applies to third-country
products marketed in the EU. As SAINTS is marketed in the EU by the AIFM,
Baillie Gifford & Co Limited, via the National Private Placement Regime
('NPPR') the following disclosures have been provided to comply with the
high-level requirements of SFDR.
The AIFM has adopted Baillie Gifford & Co's ESG Principles and Guidelines
as its policy on integration of sustainability risks in investment decisions.
Baillie Gifford & Co believes that a company cannot be financially
sustainable in the long run if its approach to business is fundamentally out
of line with changing societal expectations. It defines 'sustainability' as a
deliberately broad concept which encapsulates a company's purpose, values,
business model, culture, and operating practices.
Baillie Gifford & Co's approach to investment is based on identifying and
holding high quality growth businesses that enjoy sustainable competitive
advantages in their marketplace. To do this it looks beyond current financial
performance, undertaking proprietary research to build up an in-depth
knowledge of an individual company and a view on its long-term prospects. This
includes the consideration of sustainability factors (environmental, social
and/or governance matters) which it believes will positively or negatively
influence the financial returns of an investment. The likely impact on the
return of the portfolio from a potential or actual material decline in the
value of investment due to the occurrence of an environmental, social or
governance event or condition will vary and will depend on several factors
including but not limited to the type, extent, complexity and duration of an
event or condition, prevailing market conditions and existence of any
mitigating factors.
Whilst consideration is given to sustainability matters, there are no
restrictions on the investment universe of the Company, unless otherwise
stated within in its Investment Objective & Policy. Baillie Gifford &
Co can invest in any companies it believes could create beneficial long-term
returns for investors. However, this might result in investments being made in
companies that ultimately cause a negative outcome for the environment or
society.
The underlying investments do not take into account the EU criteria for
environmentally sustainable economic activities established under the EU
Taxonomy Regulation.
More detail on the Investment Managers' approach to sustainability can be
found in the ESG Principles and Guidelines document, available publicly on the
Baillie Gifford website bailliegifford.com.
Third party data provider disclaimer
No third party data provider ('Provider') makes any warranty, express or
implied, as to the accuracy, completeness or timeliness of the data contained
herewith nor as to the results to be obtained by recipients of the data.
No Provider shall in any way be liable to any recipient of the data for any
inaccuracies, errors or omissions in the index data included in this document,
regardless of cause, or for any damages (whether direct or indirect) resulting
therefrom. No Provider has any obligation to update, modify or amend the data
or to otherwise notify a recipient thereof in the event that any matter stated
herein changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have any liability
whatsoever to you, whether in contract (including under an indemnity), in tort
(including negligence), under a warranty, under statute or otherwise, in
respect of any loss or damage suffered by you as a result of or in connection
with any opinions, recommendations, forecasts, judgements, or any other
conclusions, or any course of action determined, by you or any third party,
whether or not based on the content, information or materials contained
herein.
Automatic Exchange of Information
In order to fulfil its legal obligations under UK tax legislation relating to
the automatic exchange of information, The Scottish American Investment
Company P.L.C. is required to collect and report certain information about
certain shareholders.
The legislation requires investment trust companies to provide personal
information to HMRC on certain investors who purchase shares in investment
trusts. Accordingly, The Scottish American Investment Company P.L.C. will have
to provide information annually to the local tax authority on the tax
residencies of a number of non-UK based certificated shareholders and
corporate entities.
Shareholders, excluding those whose shares are held in CREST, who come on to
the share register will be sent a certification form for the purposes of
collecting this information.
For further information, please see HMRC's Quick Guide: Automatic Exchange of
Information - information for account holders
gov.uk/guidance/automatic-exchange-of-information-account-holders.
‡ Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers' website
(or any other website) is incorporated into, or forms part of, this
announcement.
None of the views expressed in this document should be construed as advice to
buy or sell a particular investment.
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