INTERIM RESULTS ANNOUNCEMENT
Results for the twelve months ended 31 December 2025
Performance Highlights
Net Asset Value
| At 31 December 2025 | At 31 December 2024 | |
| Net assets | £1,720,475,000 | £2,129,897,000 |
| Net asset value (“NAV”) per ordinary share (“share”) | 1,601.5p | 1,631.8p |
| Share price | 1,566.0p | 1,484.0p |
| Share price discount to NAV1 | 2.2% | 9.1% |
| Twelve months ended 31 December 2025 | Twelve months ended 31 December 2024 | For the period from Company’s listing on 19 October 2018 to 31 December 2025 | |
| % Change | % Change | % Change | |
| NAV total return per share1 | (1.8)% | 2.1% | 60.2% |
| Share price total return1 | 5.6% | 4.9% | 56.6% |
| Comparator index total return2 | 10.2% | 11.5% | 80.9% |
| Ongoing charges ratio1 | 0.9% | 0.9% | 0.9% |
This report contains terminology that may be unfamiliar to some readers. The Glossary section gives definitions for frequently used terms.
1 These are Alternative Performance Measures (“APMs”). Definitions of these, together with how these measures have been calculated, are disclosed later where it is made clear how these APMs relate to figures disclosed and calculated under IFRS.
2 MSCI World SMID Cap Index, £Net Source: www.msci.com.
Chairman’s Statement
I am pleased to present this Interim Report of the Smithson Investment Trust plc (the “Company”) for the twelve months ended 31 December 2025. Subject to shareholder approval of the Board’s recommended restructuring in February, the past year will have marked a period of profound change for the Company.
The Board is recommending that the Company be converted into an open-ended investment company, or ‘OEIC’, which will allow shareholders to participate in the same investment strategy with the same management team, or, should they prefer, realise their investment at close to NAV, thus effectively eliminating the persistent discount at which the shares have traded in recent years.
Proposed restructuring of the Company
Despite the Board’s efforts to reduce the discount to net asset value by buying back 39.3% of the shares in issue since April 2022, the shares continued to trade at a significant discount throughout 2025. In the absence of any signs of imminent improvement in prevailing underlying equity market dynamics, the Board began actively to explore a range of options to address the discount and to optimise shareholder value.
Following careful consideration of a number of alternatives, the Board announced, on 12 November 2025, that the Company had entered into an agreement with its manager Fundsmith for the proposed rollover of the Company’s assets into an open-ended investment company, Smithson Equity Fund.
On 22 January 2026 a circular setting out the details of the Company’s conversion into an open‑ended fund was published, and the Board recommends this Scheme to shareholders and urges them to vote in favour of the resolutions at the two general meetings required to approve and implement the Scheme. Details of the Scheme are contained on the Company’s website at www.smithson.co.uk/restructure-proposal.
Inevitably at some point in the future the prevailing market cycle will change, and smaller and medium sized companies will once again outperform large companies globally. In addition, Fundsmith’s established investment style and philosophy will doubtless produce attractive relative and absolute returns once more. The Scheme therefore offers shareholders the opportunity to rollover into the new Smithson Equity Fund which will follow the Company’s current investment strategy and be managed by Fundsmith. With the OEIC structure, shareholders will be able to buy and sell at net asset value daily. Shareholders who prefer to realise their investment can elect for the cash exit option and effectively sell at a level that no longer has a discount attached.
Throughout the process the Board has sought to minimise the costs of the restructuring and we are grateful for the contribution which Fundsmith has agreed to make to those costs. The Board believes that the Scheme offers the most flexible and competitive outcome for shareholders.
Change of accounting reference date
In light of the proposed restructuring, the Board resolved to change the Company’s accounting reference date from 31 December 2025 to 30 June 2026 and announced that this interim report would be published.
Investment Performance
The Company’s net asset value (NAV) per share total return for the period was -1.8% compared with the +10.2% return from the MSCI World SMID Index.
The investment manager’s review below details the factors driving the performance of the portfolio, and the changes made to the Company’s portfolio over the year.
The Company’s objective is to provide shareholders with long term growth in value, and the Company’s annualised NAV per share performance in the period since inception to the end of December 2025 is +6.8% pa, compared with the +8.6% pa return from the MSCI World SMID Index. The Company’s investment performance since inception in 2018 can broadly be split into two distinct periods: strong performance from IPO until 2021, and then underperformance since early 2022. This period of poor relative performance was a major contributor to the persistent share price discount to net asset value.
Discount and Share Buybacks
The share price discount to NAV was 9.1% at the end of 2024, and despite the continuation of the share buyback programme during 2025, averaged 10.3% during the year up to 11 November 2025, the day prior to the announcement of the proposed restructuring.
During 2025 the Board repurchased 23.1 million shares, bringing total repurchases since April 2022 to 69.7 million, representing almost 40% of the total shares in issue before the buyback programme began. This represents one of the most proactive buy‑back campaigns in the investment trust sector in recent years in both absolute and relative terms.
Since the announcement of the proposed restructuring of the Company, the Board has ceased buybacks and the shares have traded at an average discount of 3.2%.
Results and Dividends
The Company’s total loss after tax for the twelve months was £62.8 million comprising a capital loss of £67.4 million and a revenue profit of £4.6 million.
The Company is required to pay a dividend in order to retain investment trust tax status, and accordingly the Board announced, on 13 January 2026, an interim dividend of 2.1 pence per share in respect of the 18-month period to 30 June 2026. The dividend will be paid on 20 February 2026 to shareholders on the register on the record date of 23 January 2026.
Shareholder Engagement
The Company held its Annual General Meeting on 23 April 2025.
A General Meeting was held on 15 May 2025 at which shareholders approved the resolution to give the Directors the ability to reduce the Company’s share premium account by £500 million to increase the Company’s distributable reserves that can be used to continue with the Company’s share buyback programme. The High Court confirmed the capital reduction on 10 June 2025, with registration by Companies House on 13 June 2025.
A further General Meeting was held on 3 December 2025 at which shareholders approved a new authority, replacing the prior authority, to repurchase up to 16,178,759 shares. This authority was granted after the announcement of the proposed restructuring of the Company on 12 November and has not been utilised.
Two General Meetings of the Company will be held on 10 February 2026 and 27 February 2026 at which shareholders will be asked to approve and implement the Scheme. The Board unanimously recommends voting in favour of the resolutions to be proposed.
Changes to Board Composition during 2025
I joined the Board on 28 January, taking over from Diana Dyer Bartlett as Chair. Diana, who joined the Board as a non-executive director at the launch of the Company in October 2018, and who served as Chair of the Audit Committee until February 2022, and then as Chair of the Board until January 2025, did not seek re-election at the AGM in April 2025.
Sarika Patel was also appointed to the Board as a non-executive director and Chair of the Audit Committee on 3 July 2025.
Outlook
I am a firm believer in the value of investment trusts as savings vehicles and, in general, they serve investors well, so the proposed conversion into an OEIC is bittersweet. However, the Board’s overriding responsibility is to act in the best interests of shareholders, and we believe the proposed restructuring represents the best available outcome for this Company. The existing Smithson strategy is easily replicated in an open-ended fund, which allows shareholders to buy and sell at NAV and thus eliminating the discount, without materially altering the current investment approach.
Shareholders are encouraged to read the circular setting out the details of the scheme of reconstruction and the documents relating to Smithson Equity Fund before deciding what action you should take with respect to the options to roll over into the Smithson Equity Fund or to receive cash for your shareholding at net asset value less costs.
If the resolutions relating to the Scheme are approved by shareholders all Directors will stand down on 27 February 2026, and a liquidator will be appointed. My fellow directors and I would like to thank shareholders for their support for the Company and the Board