LONDON STOCK EXCHANGE ANNOUNCEMENT
Capital Gearing Trust P.l.c.
(the ‘Company’)
Final Results for the Year Ended 31 March 2026
Legal Entity Identifier: 213800T2PJTPVF1UGW53
Information disclosed in accordance with DTR 4.1.3
Capital Gearing Trust (LSE: CGT) , the FTSE 250 investment trust focused on preserving and, over time, growing shareholders’ real wealth, announces its Final Results for the year ended 31 March 2026 .
Financial Highlights
| 31 March 2026 | 31 March 2025 | |
| Share price | 4,985.0p | 4,785.0p |
| NAV per Ordinary share | 5,104.5p | 4,924.8p |
| Dividends per share | 66p | 102p |
| Share price discount to NAV per share (1) | 2.3% | 2.8% |
| Shareholders’ funds | £801.3m | £885.0m |
| Market capitalisation | £782.6m | £859.9m |
| Ongoing charges ratio (1) | 0.59% | 0.56% |
Total return performance to 31 March 2026
| One year | Three years | Five years | Ten years | |
| Share price total return (1) | 6.4% | 11.1% | 14.1% | 61.5% |
| NAV total return (1) | 5.8% | 12.1% | 19.4% | 68.6% |
| Consumer Price Index (2) | 3.3% | 9.4% | 28.9% | 40.7% |
1) Please refer to the Company’s Annual Report and Financial Statements for the year ended 31 March 2026 (‘2026 Annual Report’) for definitions and a reconciliation of the Alternative Performance Measures to the year-end results.
(2) The Company does not have a formal benchmark but uses the Consumer Price Index (‘CPI’) as a relative measure over the medium to longer term.
Highlights
- Over the year to 31 March, the Company delivered a NAV return of +5.8% and a share price return of +6.4% for the year. This compares with CPI inflation of +3.3%. All major parts of the portfolio delivered a positive contribution.
- Over the year ended 31 March 2026, the Company has repurchased 2,272,529 shares (2025: 4,067,965 shares) for a total cost of £111.2 million (2025: £194.5 million). No shares were issued. As a result of this policy, over the year the discount averaged 2.0%.
- The Board has recommended a final dividend of 66p per share which will be paid, subject to shareholder approval, on 15 July 2026 to shareholders on the register on 12 June 2026. The ex-dividend date will be 11 June 2026.
- As a consequence of the Company’s exceptional performance since launch, the share price has risen sharply and stood at 4,985.0p (or £49.85) as at 31 March 2026. The Board believes that the high share price may be unhelpful for those investing smaller amounts, monthly savers, and dividend re-investment programmes. Therefore, it is proposing to sub-divide the shares on a ten for one basis, which if approved by shareholders at the Annual General Meeting it is expected that dealings in the Existing Ordinary Shares will cease as at close of business on 22 July 2026 and admission of the New Ordinary Shares to the Official List and to trading on the London Stock Exchange, and dealings in the New Ordinary Shares, will commence 23 July 2026.
- The next opportunity to hear from the Investment Managers is on Thursday, 4 June 2026 at 2.30 p.m., when the investment team will present the Company’s year-end results via Investor Meet Company’s webcasting service. Investors and potential investors can sign up to Investor Meet Company for free and add “to meet CG Asset Management” via: https://www.investormeetcompany.com/cg-asset-management/register-investor
Chairman’s Statement
I am pleased to present the Annual Report of Capital Gearing Trust P.l.c. (the ‘Company’ or ‘CGT’) for the year ended 31 March 2026. This is my first as your Chairman.
Performance is the most important information in every chairman’s statement. Over the year ended 31 March 2026, the Company’s net asset value (‘NAV’) total return was +5.8%. This compares with inflation of +3.3% over the same year, as measured by the Consumer Price Index (‘CPI’). The share price total return over the year was +6.4%.
The Company’s objective is to preserve and, over time, to grow shareholder’s real wealth. It does this by having two combined aims. The first is to protect investors’ wealth by cushioning the effect of falling asset prices. The second aim is to beat inflation over the medium term by at least 2%, compounded over time. During the most recent reporting period, CGT’s NAV return outperformed inflation by 2.5%.
There is further analysis of historical returns for the Company in the Company’s Annual Report & Financial Statements for the year ended 31 March 2026 (‘2026 Annual Report’).
Working with the Investment Manager, the Board has given significant attention to what returns shareholders might reasonably expect in future, particularly in the light of current market conditions. We began with three specific observations. Firstly, when interest rates were first tightened in 2022, equity markets fell substantially, and the Company’s NAV cushioned the decline by less than it had in the past. Secondly, when Peter Spiller began to manage the Company’s assets in 1982, UK inflation-linked bond yields were more than 4% real, whereas during the height of quantitative easing in 2008-2009, the real yield was negative if bonds were held to maturity. Peter’s tenure commenced from a radically less favourable environment than the investment team faces today. Thirdly, the long-duration conventional bond has, in the past, provided a source of positive returns even as other asset prices fell; to such an extent that the Company was able to report a positive year even when equity markets had fallen by 50%. Now long-duration government bonds have become positively correlated with equity markets.
The conclusion of our deliberations is that we cannot simply point to the returns delivered since inception and suggest that those returns can be a guide to future returns. We have moved from a disinflationary world with falling interest rates to an inflationary environment with higher interest rates.
Nevertheless, the Board believes that the Company’s dual targets stated above are achievable, and attractive for shareholders. To deliver at least 2% real p.a., with lower volatility than investment in a global equity tracker fund should be an important anchor in all portfolios. Other asset classes may ultimately perform better, but they will have much scarier interludes. Having CGT in a portfolio makes it easier to weather those rougher seas without panicking. Moreover, if markets finally start to price in greater inflation and inflation volatility, CGT should perform much better than the 30% or 40% in conventional bonds that investors are often herded into owning as they approach retirement.
Discount/Premium Control Policy (‘DCP’)
Our DCP, which aims to ensure that, in normal market conditions, the Company’s ordinary shares trade at close to underlying asset value, requires us to buy or sell shares in the Company to maintain a narrow discount or premium. Over the year ended 31 March 2026, the Company has repurchased 2,272,529 shares (2025: 4,067,965 shares) for a total cost of £111.2 million (2025: £194.5 million). No shares were issued. As a result of this policy, over the year the discount averaged 2.0%.
Shares which are bought back are held in Treasury rather than cancelled as they can be reissued from Treasury more efficiently than issuing new shares. Whilst it is pleasing to note that the rate of buybacks is slowing, the repurchase of the Company’s shares this year has continued to shrink the assets of the Company. However, the Board notes that due to the vast majority of the Company’s expenses being charged on an ad valorem basis, that is they rise and fall commensurably with the Company’s assets, there is only a marginal increase (from 0.56% in the prior year to 0.59% in the current year) in the Company’s ongoing charges ratio. We believe that the DCP remains in the best interests of the Company and its shareholders.
Reflecting both the quantum of buybacks completed by the Company and the Board’s commitment to the DCP, the Company held a General Meeting in April 2026 to renew shareholder authority to buy back shares to ensure that the Company would not be left in a position where it had run out of buy-back authority. The renewal was approved by shareholders and a further 51,386 Ordinary shares for a total cost of £2.6 million have been repurchased in the Company’s new financial year to date. Since the renewed authority will automatically expire at the conclusion of the Company’s forthcoming Annual General Meeting, in line with usual practice, the Company will ask shareholders to approve a further renewal of the authority to repurchase up to 14.99% of its capital at a discount to estimated NAV at the forthcoming Annual General Meeting.
Income and Distributions
The amount the Company receives in dividends and interest is the outcome of the application of its investment policy rather than a target. The amounts distributed to shareholders are largely determined by the net revenue received by the Company in any year and are designed to satisfy the Company’s annual income distribution test to ensure that it maintains its investment trust status.
In respect of the Company’s year ended 31 March 2025, the Company took advantage of the UK interest streaming rules, which allow approved investment trusts which have income from interest-bearing assets to treat all or part of a distribution as an interest distribution, rather than a conventional dividend. By doing this, the Company received a corresponding deduction in its corporation tax liability.
The receipt of income has fallen since last year, nevertheless the Company is again designating a proportion of the total distribution as an interest distribution. Accordingly, the Board has recommended a final dividend of 66p per share which will be paid, subject to shareholder approval, on 15 July 2026 to shareholders on the register on 12 June 2026. The ex-dividend date will be 11 June 2026. For the purpose of personal taxation calculations, the Board has designated the payment as follows:
Interest distribution per Ordinary share: 43p
Dividend distribution per Ordinary share: 23p
Total distribution per Ordinary share: 66p
The total distribution represents a decrease of 35% from the 102p paid to shareholders in respect of the Company’s financial year ended 31 March 2025.
Share Split
As a consequence of the Company’s exceptional performance since launch, the share price has risen sharply and stood at 4,985.0p (or £49.85) as at 31 March 2026. Whilst this is an excellent badge of honour for existing long-term shareholders, the Board believes that the high share price may be unhelpful for those investing smaller amounts, monthly savers, and dividend re-investment programmes. Therefore, it is proposing to sub-divide the shares on a ten for one basis. This is known as a ‘share split’. Following the share split, each shareholder will hold ten new ordinary shares for each ordinary share held immediately prior to the share split.
We hope that sub-dividing the Company’s ordinary shares will make buying the shares more attractive to new investors and increase market liquidity. I would like to reassure existing shareholders that the splitting of the shares will not affect the overall value of their holdings in the Company as the reduction in the price per share will be offset by a commensurate increase in the number of shares they hold. By way of example, taking the price as at 31 March 2026 of 4,985.0p per share, following the sub-division each holder of one existing ordinary share would receive ten new ordinary shares, each of which would have an equivalent theoretical price of 498.50p per share or £4.985 per share immediately after the share split. Shareholders will have the opportunity to vote on this proposal at the forthcoming Annual General Meeting and more details are set out in the 2026 Annual Report.
If resolution 11 is approved at the Annual General Meeting it is expected that dealings in the Existing Ordinary Shares will cease as at close of business on 22 July 2026 and admission of the New Ordinary Shares to the Official List and to trading on the London Stock Exchange, and dealings in the New Ordinary Shares, will commence 23 July 2026.
Company’s Marketing, Promotion and Shareholder Interaction
The Board is continuing to work with CGAM to increase the Company’s profile via various media including video conferences, podcasts and in-person meetings, together with ongoing interaction with national and investment industry journalists. The Board’s view is that enhancing the Company’s profile will benefit all shareholders if a better understanding of the Company and its objectives can be translated into sustained demand for its shares.
During the year, the Company launched a redesigned website to provide a clearer, more informative, and accessible online experience for shareholders. The site provides the history and background of the Company, insights, regulatory documents, performance data, shareholder communications, and investor tools. The new site can be found here: https://capitalgearingtrust.com
The next opportunity to hear from the Investment Managers is on Thursday, 4 June 2026 at 2.30 p.m., when the investment team will present the Company’s year-end results via Investor Meet Company’s webcasting service. Questions can be submitted at any time during the live presentation. Investors and potential investors can sign up to Investor Meet Company for free and add “to meet CG Asset Management” via: https://www.investormeetcompany.com/cg-asset-management/register-investor Investors who already follow CG Asset Management on the Investor Meet Company platform will automatically be invited. To ensure you get early notification of future presentations and events you can register for email and news alerts concerning the Company using the following link: https://capitalgearingtrust.com/contact/#alerts
The Board is also keen to engage with shareholders. If any shareholder wishes to communicate with me as Chairman or Wendy Colquhoun as Senior Independent Director, please contact our Company Secretary at info@frostrow.com or by using the contact details listed at the end of this announcement.
Annual General Meeting (‘AGM’)
The AGM will be held on Wednesday, 8 July 2026 at 11.00 am at the Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA. I hope as many shareholders as possible will be able to attend to take the opportunity to meet the Board and to hear a presentation from the Investment Manager. However, if you are unable to attend in person, you can watch the Investment Manager‘s presentation soon after the AGM when a recording will be posted on the Company’s website.
Details on the resolutions to be proposed at the AGM can be found in the 2026 Annual Report. The Board firmly believes that all the resolutions being proposed are in the best interests of the Company and its shareholders and encourages shareholders to vote by proxy in favour of the resolutions, as the Directors intend to do in respect of their own shareholdings. We would encourage shareholders to return their votes by electronic proxy, including by instructing their platform providers to vote on their behalf if their shares are held through platform nominees.
Outlook
In the 1970s the world economy experienced price shocks from the oil market and a wage-price spiral, more emphatically in the UK than elsewhere. The one positive from inflation was that it allowed the corporate and government sectors to deleverage. But high inflation causes redistribution of income and wealth, distorts economic decision-taking, and deters investment by companies.
The response of governments and central banks was to raise interest rates to control the growth in credit and money stock. Under Paul Volcker’s Chairmanship of the Federal Reserve, US interest rates peaked at 17%, with the stalwart support of the US President, despite the side-effect of a recession, and creating unemployment. The subsequent fall in inflation was magnified by secular trends of globalisation, deregulation, and deunionisation. These disinflationary forces were taken by policymakers as marks of their own policy competence.
Once inflation was under control, the Federal Reserve embarked on a multi-decade cycle of loosening monetary policy. When William Chesney Martin was the Federal Reserve Chairman in the 1970s, he described the role of the central bank as removing the punch bowl just as the party got going. In fact, the opposite happened. As monetary policy became looser there followed a series of bubbles in stock markets, then property markets, then emerging markets, then dot. com, then the US housing market, and so on. As each bubble burst, the central bank response was to cut interest rates, and merely move the venue of the party to another asset class. The culmination of this long period of falling interest rates was the deliberate creation of money at near-zero interest rates.
The hubris of central bankers was revealed, with an inflationary impulse from printing money. At the same time, these global disinflationary forces started to reverse. Tariffs are back, used as geopolitical and now geo-economic weapons. Globalisation is challenged as the US, and other countries, start to focus on security of supply, with price levels taking a back seat. Power has shifted in labour markets as the populations of the developed countries are no longer growing; in Japan, the population is falling; and in China, the working age population will fall by five hundred million as a result of its one-child policy. The need to re-arm in response to Russia and threats as far away as Iran is heaping pressure on government finances and borrowing. Nearly all wars have been inflationary.
The Board agrees with the Investment Manager that the new super-cycle is one of higher and more variable inflation. The economic challenges feel more like the 1970s redux than anything experienced by most active managers today. We are in a bear market for long-dated bonds as governments struggle to finance themselves and ultimately other asset classes like equities will come under pressure from much higher government bond yields. Policy-makers may try to put off the day of reckoning by intervening in bond markets to keep longer rates lower; and they may yet force banks and even growing pension funds to own domestic government debt. All such interventions are ultimately inflationary. As Jean-Claude Juncker articulated it, most politicians know what they need to do; they just don’t know how to get re-elected afterwards.