Aurora UK Alpha plc

LEI: 2138007OUWIZFMAGO575

Annual Report for the year ended 31 December 2025

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Strategic Report

Company Performance

¹ Definitions of these Alternative Performance Measures ("APMs") together with how these have been calculated can be found on pages 101 to 104.

Five Year Summary

^# Before 2022 the NAV per share was not adjusted for IFRS2.

Cumulative return since appointment of the Investment Manager

The Company's performance in absolute terms and relative to the FTSE All-Share Index (total return) benchmark since Phoenix was appointed as Investment Manager on 28 January 2016 is shown below:

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Chair's Statement

I am pleased to present the Aurora UK Alpha plc annual report for the year ended 31 December 2025.

Performance

Performance for the year to 31 December 2025 was a welcome improvement on 2024, though lagging the FTSE All-Share Index. The NAV per share total return* for the year was 16.8% (2024: -4.3%) and, with the discount of the share price to the NAV having narrowed, the share price total return* was 19.8% (2024: -5.5%). The benchmark FTSE All-Share Index total return was 23.9% (2024: 9.5%). With a concentrated portfolio and a focus on identifying out of favour names the portfolio diverges significantly from the benchmark, as reflected in its active share ratio* of 96%. It is therefore expected for performance to diverge over shorter periods, but the strategy is targeted at outperforming the index over the long-term and we remain confident that it can.

Top positive contributors in the year were Ryanair, Lloyds Banking Group, Frasers Group and Burberry. Barratt Redrow was the most significant detractor.

For further details on the portfolio and performance, please see the Investment Manager's Report on pages 22 to 25.

*Alternative Performance Measure (see page 102)

Cancellation of Share Premium Account

In short, this will give the Board greater flexibility to return capital to shareholders in future, including through buybacks.

The Company has built up a substantial share premium account through historic share issuances, augmented by the large share issuance made in connection with the combination with Artemis Alpha Trust plc ("ATS") in 2024. The share premium account is non-distributable. 

The Companies Act 2006 and the Companies (Reduction of Share Capital) Order 2008 permit the Company, with the sanction of a special resolution of its shareholders and the confirmation of the High Court of Justice in England and Wales (the "Court"), to cancel the amount standing to the credit of its share premium account and apply the amount to create distributable reserves. The creation of a distributable reserve in this manner will provide a significant pool of reserves which can be used, if required, to fund share buybacks or other distributions/returns of capital to shareholders in accordance with applicable law. The cancellation will therefore provide the Company with more flexibility in how capital may be managed in the future.

Accordingly, the Board is proposing special resolution (Resolution 13) at the forthcoming AGM, which seeks shareholder approval to cancel the entire amount standing to the credit of the Company's share premium account, following which the Company will make an application to the Court to obtain its confirmation of the cancellation. Subject to confirmation by the Court and the cancellation of the share premium account taking effect, the amount so cancelled will be credited to a distributable reserve.

The Investment Manager and Performance Fees

Phoenix has managed the Company's portfolio since January 2016 and throughout their appointment the team has employed a focused and patient investment approach.

Phoenix earns no ongoing annual management fee, and instead is paid an annual performance fee, equal to one third of any outperformance of the Company's NAV against its benchmark, the FTSE All-Share Index (total return). 

The performance fee is paid by issuance of the Company's ordinary shares, which are subject to a fixed three-year clawback period. This means issued shares will be returned by the Investment Manager in the event that outperformance versus the index reverses on the third-year anniversary. If outperformance fully reverses, the Investment Manager receives nothing. No performance fee was earned in the year to 31 December 2025 (2024: £nil).

Share Price Discount

The Board closely monitors the discount to NAV at which the Company's shares trade. During 2025 the discount narrowed from 11.4% at the end of 2024 to 9.1% at the end of 2025. This narrowing is welcome and closing the discount continues to be one of the Board's key objectives. To encourage demand for the Company's shares, which should tend to increase their price and narrow the discount, Phoenix, Deutsche Numis, and Frostrow Capital promote the Company proactively. 

Additionally, on 11 February 2025 the Board announced the commencement of a discretionary share buyback programme and the Company undertook its first share buyback on 6 June 2025. Up to 31 December 2025 the Company bought back into treasury 4,538,824 shares, at an average price of 252.0p per share. These buybacks are aimed at helping to provide market liquidity when it is lacking and also demonstrate the Board's faith in the value of the portfolio. The activity seems to have helped to stabilise the discount, while also being accretive to remaining shareholders. 

The Board is seeking to renew the power granted to it by shareholders to buy back shares at the forthcoming annual general meeting. The Board will also seek to renew its powers to issue new shares and sell shares from treasury in order to be able to issue shares to investors should the shares return to a premium, as well as to enable the issue of shares to the Investment Manager in respect of performance fees earned.

Annual General Meeting ("AGM") and separate Investment Manager presentation event

Consistent with the Company's recent practice, this year's AGM will not include an Investment Manager presentation. The AGM will be held at the Company's registered office, 25 Southampton Buildings, London WC2A 1AL, on 10 June 2026 at 1 p.m. to consider the business set out in the Notice of Meeting on pages 106 to 108. 

A separate investor event will be held at 4 p.m. on 14 October 2026 at the Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA. This event has been well attended in previous years and is intended to be of interest to both existing and prospective Aurora shareholders. It will include multiple speakers from the Investment Manager and is intended to be recorded and made available afterwards on the Company's website. 

With respect to the AGM, the Board strongly encourages shareholders to register their votes online in advance of the meeting by visiting https://uk.investorcentre.mpms.mufg.com/login and following the instructions on the site. Appointing a proxy online will not restrict shareholders from attending the meeting in person should they wish to do so and will ensure their votes are counted if they are not able to attend. Shareholders are invited to send any questions they may have to the Company Secretary by email to info@frostrow.com ahead of the meeting. 

Ongoing Charges

It is pleasing that the ongoing charges have reduced from 0.45% to 0.35%. This follows the ATS transaction in 2024, which increased the asset base and reduced the fixed charges on a per share basis. As a reminder, shareholders pay the Investment Manager no annual management fee, as outlined above and on pages 41 and 42.

Dividend

The Board's policy on dividends is to pay out substantially all of the Company's net revenue earned in the year. Accordingly, the Board is recommending a final dividend of 4.70p per ordinary share in respect of the year ended 31 December 2025. If approved by shareholders at the AGM the dividend will be paid on 25 June 2026 to shareholders who appear on the share register as at 15 May 2026, with an ex-dividend date of 14 May 2026. Last year no final dividend was paid. Instead, an interim dividend of 3.0p per share was declared in advance of the ATS combination and paid to shareholders on 6 December 2024. Dividends in respect of the last five years are shown on page 5. Revenue earnings are not a key objective of the Company and dividends are expected to vary each year.

Lord Howard Flight

It is with sadness that I report the passing of Lord Howard Flight, who served as Company Chair from July 2011 to June 2022. Howard was instrumental in Aurora moving to Phoenix as its Investment Manager in 2016 and during his tenure the Company grew from £35 million to £194 million. Howard had a long and illustrious career in fi nance and politics. 

From a personal perspective, Howard invited me onto the Board in 2019, when my profile was far from typical for an investment trust director. That decision, like his earlier support for Phoenix's management of Aurora, reflected something characteristic of him: a willingness to look beyond convention and back people he believed in. I am deeply grateful for the trust he placed in me.

On behalf of the Board, I thank Howard for his many contributions, and our thoughts are with his family.

Outlook

Markets are volatile with many uncertainties globally, not least the war in Iran, and for patient, long-term investors, periods like this have historically set the foundations for strong future returns. This is backed up by Phoenix's estimate of the portfolio's intrinsic value which stands at a substantial premium to the current NAV. The buyback programme underscores the Board's confidence in the portfolio's value, and the narrowing of the discount during the year is encouraging. The Company offers a differentiated, deeply researched portfolio with genuine alignment of interests through Phoenix's fee structure. We remain confident that, over time, this approach will greatly reward shareholders.

Lucy Walker
Chair
30 March 2026

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Investment Objective and Policy

Investment objective

The Company's investment objective is to provide shareholders with long-term total returns by investing predominantly in a portfolio of UK listed companies.

Investment policy

The Company seeks to achieve its investment objective by investing predominantly in a portfolio of UK listed companies. The Company may from time to time also invest in companies listed outside the UK and unlisted securities. The investment policy is subject to the following restrictions, all of which are at the time of investment:

•    The maximum permitted investment in companies listed outside the UK at cost price is 20% of the Company's gross assets;

•    The maximum permitted investment in unlisted securities at cost price is 10% of the Company's gross assets;

•    There are no pre-defined maximum or minimum sector exposure levels but these sector exposures are reported to and monitored by the Board in order to ensure that adequate diversification is achieved;

•    The Company's policy is not to invest more than 15% of its gross assets in any one underlying issuer (measured at the time of investment) including in respect of any indirect exposure through Castelnau Group Limited ("Castelnau");

•    The Company may from time to time invest in other UK listed investment companies, but the Company will not invest more than 10% in aggregate of the gross assets of the Company in other listed closed-ended investment funds; and

•    Save for Castelnau Group Limited, the Company will not invest in any other fund managed by the Investment Manager.

While there is a comparable index for the purposes of measuring performance over material periods, no attention is paid to the composition of this index when constructing the portfolio and the composition of the portfolio is likely to vary substantially from it. The portfolio will be relatively concentrated. The exact number of individual holdings will vary over time but typically the portfolio will include core holdings in 15 to 20 companies. The Company may use derivatives and similar instruments for the purposes of capital preservation.

The Company does not currently intend to use gearing. However, if the Board did decide to utilise gearing the aggregate borrowings of the company would be restricted to 30% of the aggregate of the paid-up nominal capital plus the capital and revenue reserves.

Any material change to the investment policy of the Company will only be made with the approval of shareholders at a general meeting. In the event of a breach of the Company's investment policy, the Directors will announce through a Regulatory Information Service the actions which will be taken to rectify the breach.

Dividend Policy

The Company does not have a fixed dividend policy. However, the Board expects to distribute substantially all of the net revenue arising from the investment portfolio. Accordingly, the Company is expected to pay an annual dividend that may vary each year.

Borrowing Policy

The Company is not prohibited from incurring borrowings for working capital purposes, however the Board has no current intention to utilise borrowings. Whilst the use of borrowings should enhance the total return on the Company's shares where the return on the underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is falling, further reducing the total return on the shares. As a result, the use of borrowings by the Company may increase the volatility of the NAV per share.

The Company has a policy not to invest more than 10% of its gross assets in other UK listed investment companies. As a consequence of its investments, the Company may therefore itself be indirectly exposed to gearing through the borrowings from time to time of these underlying investment companies.

Company Purpose and Key Performance Indicators

Company purpose and strategy

The Company's purpose is encapsulated in its investment objective, which is to provide shareholders with long-term total returns by investing predominantly in a portfolio of UK listed companies. 

To achieve the investment objective, the Board has agreed an investment policy, as set out on page 9) and has delegated its implementation to Phoenix Asset Management Partners Ltd ("Phoenix" or "the Investment Manager"). 

As an externally managed investment trust, all of the Company's day-to-day management and administrative functions are outsourced to third party service providers. As a result, the Company has no executive directors, employees or internal operations.

However, the Board remains responsible for all aspects of the Company's affairs, including monitoring the investment strategy and the review of investment performance. It also has responsibility for all strategic policy issues, including share issuance and buy backs, share price and discount/premium monitoring, corporate governance matters, investor relations, dividends and gearing.

Key performance indicators "KPI's"

The Board measures the Company's success in attaining its objective by reference to KPI's as follows:

a.      To make an absolute total return for shareholders on a long-term basis;

b.     To make a relative total return for shareholders on a long-term basis, as measured against the Company's benchmark, the FTSE All-Share Index (total return);

c.      The Board seeks to ensure that the operating expenses of running the Company as a proportion of NAV (the Ongoing Charges Ratio) are kept to a minimum; and

d.     The discount/premium to NAV per share at which the Company's shares trade is also closely monitored in view of its effect on shareholder returns.

These are alternative performance measures ("APMs"). Whereas the Financial Statements (on pages 76 to 100) set out the required statutory reporting measures of the Company's financial performance, the Board additionally assesses the Company's performance against these APMs, which are viewed as being particularly relevant for the Company. These APMs are widely used within the investment company sector and the Directors believe they enhance the comparability of information and assist investors in understanding the Company's performance. Further information on each of the KPI's is set out below. Definitions of the APMs and the basis of their calculation are set out on pages 101 and 102.

The Chair's Statement on pages 6 to 8 incorporates a review of the highlights during the year.

The Investment Manager's Report on pages 22 to 25 gives further details on the portfolio and how performance has been achieved.

Performance (KPIs a and b)

The Directors regard the Company's share price total return to be the overall measure of performance over the long term, since it approximates the return in the hands of shareholders. It combines the change in the share price with the dividends paid to shareholders, which are added back as though reinvested at the ex-dividend date. 

The Directors consider the Company's NAV per share total return to be a key indicator of the Investment Manager's performance. The NAV per share total return is the change in the Company's NAV per share with distributions to shareholders added back.

The Board monitors these against the Company's benchmark, the FTSE All-Share index (total return), outperformance of which drives the remuneration of the Investment Manager.

The Company delivered positive performance in 2025 under both of these total return measures, so the absolute return target was achieved in the year, but performance fell short of the return posted by the benchmark index. 

Longer term, the Company's cumulative return since Phoenix was appointed has been positive, achieving the absolute return objective. However, long term performance against the benchmark has been mixed, with a cumulative shortfall since appointment.

Other Performance Indicators

Given their contribution to total returns, the Board also closely monitors the Revenue Result and Dividend. 

Revenue Result and Dividend

The Company's revenue after tax for the year ended 31 December 2025 was £5,176,000 (2024: £2,556,000). The Board is recommending a final dividend of 4.70p per share, to be paid on 25 June 2026 to shareholders on the register on 15 May 2026 (2024: interim dividend 3.0p).

Our registrar, MUFG Corporate Markets ("MUFG"), administers a Dividend Re-Investment Plan ("DRIP") on behalf of the Company whereby direct shareholders resident in the United Kingdom can choose for MUFG to apply their cash dividend to buy further shares in the market. Details about the DRIP, including the terms and conditions and how to join or exit the DRIP are available at https://uk.investorcentre.mpms.mufg.com/login or by calling MUFG on +44 (0)371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 a.m. and 5.30 p.m., Monday to Friday, excluding public holidays in England and Wales. Elections for the DRIP to be applied in respect of the 2025 dividend must be received by the registrar by 4 June 2026.

Net Asset Value per Share (NAV per share)

The Company recognises performance fees and clawbacks on fees paid in prior performance periods under IFRS 2 - Share-based Payment in its annual and half year financial statements. However, for the purposes of the Company's NAVs that are announced daily to the London stock exchange and other regulatory information services, the current performance fee and any clawback on fees paid in prior performance periods are recognised on a liability basis, which diverges from the Company's accounting policy. 

The table below is a reconciliation between the NAV per share as at 31 December 2025 announced on the London Stock Exchange on 2 January 2026 and the NAV per share disclosed in these financial statements. The difference is principally the result of amortising performance fees over the vesting period in accordance with IFRS 2 - Share-based Payment in these financial statements, whereas the NAV per share as at 31 December 2025 published on 2 January 2026 treated the performance fees as earned on 31 December 2025, in accordance with the investment management agreement. The remaining reconciling balances relate to adjustment of the unquoted investment valuations and expenses, due to timing lag.

NAVs and performance quoted on the Company's website, other than within the Interim and Annual Reports, are based on the unaudited daily NAVs.

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Portfolio

Top Holdings
as at 31 December 2025

* Average net cost including sales.

# Castelnau is a multi-sector financial holding company, listed on the Specialist Fund Segment of the London Stock Exchange. Castelnau is also managed by Phoenix and its value is excluded from the Company's net assets when calculating performance fees earned by Phoenix to avoid double charging. As at 31 December 2025, the Company held 15.6% of the issued share capital of Castelnau (2024: 15.8%).

The AIC SORP recommends disclosure of the ten largest portfolio holdings. The Company has instead chosen to disclose all holdings representing more than 3% of the portfolio, consistent with the Investment Manager's longstanding approach to portfolio reporting. The Board considers this threshold to be in the best interests of shareholders, as disclosure of smaller positions, which are typically less liquid and may represent holdings in the course of being built or realised, could allow other market participants to anticipate the Company's trading activity to the detriment of existing shareholders.

Given the highly concentrated nature of the portfolio, disclosure on this basis captures a substantial proportion of total assets, in many cases a larger share than would result from a mechanical top ten disclosure applied to a more diversifi ed portfolio. As at the year end, six holdings exceeded the 3% threshold and these have been presented, representing the substantial majority of the portfolio by value.

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Portfolio Analysis
as at 31 December 2025

* Castelnau is included in the Financial classification as it is a multi-sector financial holding company.

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Statement from the Chief Investment Officer of the Investment Manager

The outbreak of conflict in Iran in recent weeks has generated significant news flow and, with it, triggered the natural human impulse to shorten one's time horizon in response to threat. We think this instinct is worth resisting. Geopolitical shocks of this kind, however alarming in the moment, rarely alter the long-term economics of well-run businesses in a fundamental way.

A more consequential force, in our view, is the profound shift underway in artificial intelligence. The internet created and destroyed more value than any recession in living memory. AI has the potential to do the same, rewriting competitive dynamics, changing human behaviour and rendering some business models obsolete while creating new ones that are difficult to imagine today.

We have thought carefully about what this means for each business we own. For a funeral home, a housebuilder or an airline, the scope for AI to fundamentally disrupt the underlying economics is limited. Where we believe disruption is possible, we are careful to invest with management teams that are genuinely alert to it.

Periods of profound uncertainty tend to produce overreactions in both directions. The opportunity, as ever, lies in knowing what something is worth when the price alone is all anyone can see. If we navigate the uncertainty clearly and think carefully through what it means for each business, we believe we will find ourselves well positioned to act when the opportunities are most compelling.

We recognise that a decade is a period long enough to be a fair judge of any investment manager and over that time frame, our returns have fallen short of what we set out to achieve and what our investors deserved. We examined that record honestly in the Company's September 2025 Factsheet, which we encourage investors interested in the findings to read (it can be found at www.auroraukalpha.com in the Investor Centre). The process is stronger as a result, and what the analysis also made clear is that the core investment engine, applied to its intended purpose, has not only been performing well but getting better throughout.

Today, the portfolio on our own measures of value is more attractively priced than it has been for some time. Historically, it is from precisely these conditions, when value is abundant and patience is tested, that our best returns have come. We do not know when that value will be recognised, but we are confident that it will be.

The Investment Manager's Report that follows is written by Kartik Kumar and covers the portfolio positions and activity in detail.

Gary Channon
Chief Investment Officer
Phoenix Asset Management Partners
30 March 2026

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Investment Manager's Report

The Phoenix Approach

At Phoenix, we seek to deliver high returns with low risk. 

We aim to do so by identifying exceptional businesses, waiting patiently for a compelling opportunity to invest, and then holding until the underlying economics of the business is recognised in dividends and share prices. 

Stocks, unlike most investments, have no maturity date and can be held indefinitely. Yet their immediate liquidity tempts most investors to behave as though they do, often creating mis-pricings that we seek to exploit. We aim to invest with a long-term mindset that the market in aggregate rarely seems to apply.

Our portfolios are deliberately focused with typically no more than 15 to 20 core holdings, each the product of intensive and often years-long research. Our primary protection against risk is knowledge and understanding, rather than the number of investments we hold. We diversify only to the degree necessary to protect against our own mistakes.

What we have described is value investing, a well-established philosophy that is simple to understand but genuinely difficult to apply. In investing, we are often our own worst enemy as human nature itself works against us. For that reason, we draw on behavioural psychology in our approach with the aim of fostering clear thinking.

Since our founding in 1998, we have applied both disciplines with the same consistency, embedding the lessons of our mistakes into our framework along the way. The result over that extended period has been significant long-term outperformance, although we are conscious that past success is no guarantee of future wisdom.

Performance

Our performance is best understood alongside three points of context.

Share prices in the short term are driven by sentiment and narrative rather than fundamentals. The cash flows that ultimately determine the value of a business change far more slowly than prices suggest. We are therefore reluctant to place too much weight on any single period's movements. It is a little like explaining the weather when what matters is the climate.

We own a concentrated portfolio of typically no more than 15 to 20 core holdings against an index of hundreds. That concentration means our performance will deviate meaningfully from the index in any given period: sometimes in our favour, sometimes not. Over the long term, we expect that deviation to be significantly in our favour. 

Our fee structure is straightforward and we believe genuinely unusual. We charge no management fee. We earn a performance fee from the Company only when we outperform the index, paid entirely in the Company's shares rather than cash. Those shares are subject to a three-year clawback, so if the outperformance that generated the fee subsequently reverses, we return them. If it fully reverses, we receive nothing. We think that is the right way to align our interests with shareholders.

Over the year to 31 December 2025, NAV per share increased by 16.8% and the share price rose by 19.8%, against a FTSE All-Share total return of 23.9%. Given the underperformance relative to the benchmark in 2025, no performance fee was earned. Since Phoenix assumed management of the Trust in January 2016, NAV has risen 117.0% against the index's 134.0% (figures all total returns, including dividends reinvested). 

The largest contributors to performance during the year were Lloyds Banking Group, Ryanair and Frasers Group, adding 7.5%, 5.1% and 1.7% respectively. Burberry contributed a further 1.7%. Barratt Redrow detracted 1.7%.

Portfolio Overview

The portfolio is best understood not as a collection of share prices but as a collection of businesses, each at a different stage of its journey. What follows is a summary of where we stand in our largest holdings, how our positioning changed during the period, and the aggregate opportunity we see across the portfolio.

Castelnau is an investment trust managed by Phoenix whose primary asset is Dignity, the UK's leading funeral services business. Funerals are an attractive market. Demand is steady, predictable and grows gradually over time. Dignity is well placed to serve it, owning funeral homes, crematoria and a pre-paid funeral planning business. After a difficult period under previous management, the business is in the midst of a comprehensive turnaround. The opportunity is significant. Small improvements in revenue from growth flow through to large increases in value.

In the last year, the company's management team restructured operations, launched a probate service, which is a large neighbouring market Dignity is well placed to enter, and introduced a more accessible pre-paid funeral product. The business also repaid a significant amount of debt, strengthening its financial position. What is being built here is a significantly more valuable business, and the foundations are stronger than they have been in years.

Frasers Group was founded by Mike Ashley from a single sports shop in Maidenhead and has grown into one of the UK's leading retailers, spanning sporting goods and premium lifestyle brands. What makes the business exceptional is the combination of a low-cost retail operation and a growing portfolio of owned and partner brands, which together generate persistently high returns. The management team has built a culture that thrives and adapts in one of the most unforgiving industries in the world, with a consistent ability to invest money wisely and at the right moment.

The past year demonstrated the resilience of the business in a difficult trading environment, with strong cash generation supported by the completion of warehouse automation. The company continued to invest selectively, acquiring strategic stakes in brands and retailers, expanding its UK property portfolio and growing its overseas presence. The business ends the year with more opportunities than it started with, and that is a pattern that has repeated itself year after year.

Barratt Redrow is the UK's leading housebuilder. Housing is a fundamental human need. Demand is driven by demographics and changes slowly and predictably. In the UK, decades of underbuilding have created a shortage that successive governments have struggled to address. No new housebuilder of scale has entered the market since 1974, a testament to how difficult it is to establish a new business in this industry. Beneath an appearance of cyclicality, the economics are consistently attractive: when costs and prices fluctuate, the adjustment is largely absorbed by landowners rather than the builder, leaving cash returns high and stable.

The past year saw volume expectations trimmed as planning delays slowed the pace at which Barratt could open new sites. The company also increased its provisions for building safety remediation, a legacy issue that continues to affect the wider industry. In a market where overall volumes remain suppressed, the underlying demand is nonetheless there. People still need homes, and that need does not disappear because it is delayed. Meanwhile, the underlying economics of the market continue to improve quietly as land is replenished at today's prices. Our view of the significant long-term value of the business is unchanged.

Lloyds is the UK's largest retail bank, with a dominant share of the nation's current accounts and mortgages. Banking is a heavily regulated industry with high barriers to entry, which protects established players from new competition. Its customers rarely switch, and it is that inertia that allows Lloyds to set its own terms, providing a stable and low-cost source of funds. As the lowest cost operator in the market, Lloyds is well placed to grow its share over time.

Lloyds delivered strong earnings, with bad debts remaining low and the benefit of prior years' rate rises continuing to feed through its business. The Supreme Court judgment and subsequent FCA redress scheme brought greater certainty to the motor fi nance issue that had cast a shadow since 2023, with worst-case outcomes now firmly off the table. The business is also investing heavily in artificial intelligence across its operations, from mortgage applications to customer service, with early results suggesting meaningful improvements in both efficiency and customer experience. The underlying franchise is in good health.

Ryanair was founded in 1984 as a small Irish carrier and has grown into Europe's largest airline carrying over 200 million passengers a year. Its success rests on a single idea, brilliantly executed by Michael O'Leary over four decades: be the lowest cost operator in the market and offer prices that no competitor can match. The result is an airline that consistently takes market share, using periods of industry weakness both to push out weaker competitors and to invest counter-cyclically in its own future.

Profitability improved meaningfully during the year as fares recovered, supported by a shortage of new aircraft and engine issues across the industry that kept capacity constrained and pricing fi rm. Ryanair continued to demonstrate strong cost discipline throughout. The business ended the period in a net cash position with a largely unencumbered fleet, leaving it well placed to invest and withstand shocks.

During the period, we added to our positions in Barratt Redrow and Burberry at points of price weakness, reflecting our confidence in the long-term value of both businesses. We exited our positions in RHI Magnesita, following a change in our assessment of the business, and Bellway, following a change in management. We also trimmed our position in Lloyds and initiated three new holdings, which we will disclose once they reach 3% of the portfolio.

The weighted average holding period for our 16 core positions is currently 6.5 years. That is not a target but a natural consequence of owning exceptional businesses and giving them the time they need to fulfil their potential. In truth, our ideal holding period is forever. In practice, we sell when the price has fully reflected the value we saw, when we find a more compelling opportunity elsewhere, or when we recognise that we were wrong in our thinking.

For each business we own, we maintain an estimate of what we believe it is truly worth, independent of its share price, that we call intrinsic value. At the year end, our estimate stood at approximately 710p per share against a NAV of 300p. Since then, NAV has declined to 278p while our estimate of intrinsic value has remained broadly stable at 715p, making the opportunity more attractive still. In simple terms, we believe that for every £1 invested today, there is approximately £2.57 of intrinsic value.

We have applied the same disciplined approach to this calculation for nearly 30 years, and we are under no illusion that it is a precise science. What we have found is that over time, upside to intrinsic value is our most reliable guide to future returns, and that the greater the gap, the more powerful the force that closes it. 

Kartik Kumar
Portfolio Manager
Phoenix Asset Management Partners
30 March 2026

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Report under Section 172 of the Companies Act 2006

Directors' duty to promote the success of the Company

Section 172 of the Companies Act 2006 requires the Directors to seek to promote the success of the Company for the benefit of its members as a whole, having regard to the likely consequences of any decision in the long term, the need to foster the Company's business relationships with suppliers and others, the impact of the Company's operations on the community and the environment, the desirability of the company maintaining a reputation for high standards of business conduct, and the need to act fairly as between members of the Company.

The Board seeks to understand the views of the Company's shareholders and their interests, and those of its other key stakeholders, and to consider these, together with the other matters set out in section 172, in Board discussions and decision-making. The Board keeps engagement mechanisms under review so that they remain effective and in fulfilling their duties the Directors carefully consider the likely consequences of their actions over the long term. 

The following describes how the Directors have had regard to the views of the Company's stakeholders in their decision-making.

Shareholders

The Investment Manager regularly meets the largest shareholders and beneficial owners and reports back to the Board on those meetings. The Company's corporate broker, Deutsche Numis, and Frostrow Capital LLP ("Frostrow"), in its capacity as the Company's investor relations & marketing adviser, also meet with investors and seek to understand their views, which they relay to the Board. Additionally, the Company Chair is available to meet with investors on request and did engage with shareholders during the year. Through these interactions and other communications, the Board and the Investment Manager seek to promote a supportive investor base of long-term investors.

The Board communicates with investors twice a year via the Annual Report and Half-yearly Report and more frequently via the Company's website which hosts various information, including news reports, video presentations by the Investment Manager and monthly factsheets. Additionally, the NAV per share is announced daily via a regulatory information service. 

Shareholders may attend the Company's AGM, at which the Directors are available in person to meet with shareholders and to answer their questions. However, consistent with the Company's practice in recent years, the AGM will not include a presentation from the Investment Manager. Instead, a separate Investment Manager presentation and Q&A event, which the Directors will also attend, will be held at 4 p.m. on 14 October 2026 at the Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA. This event is intended to be of interest to both existing and prospective Aurora shareholders and will include multiple speakers from the Investment Manager. It is intended for this event to be recorded and made available afterwards on the Company's website.

The Notice of Meeting on pages 106 to 108 sets out the business of the AGM and each resolution is explained in Explanatory Notes to the Resolutions, which follow the Notice, starting on page 113. Separate resolutions are proposed for each substantive issue. The Company Chair, and where relevant, each Committee Chair, welcomes engagement with the Company's shareholders (and the Company's other key stakeholders) on significant issues raised by them at the AGM or at other times. Details of the votes cast on each resolution will be announced via a regulatory information service shortly after the AGM and published on the Company's website.

At each of its regular meetings the Board tracks shareholder changes and monitors the evolving shareholder profile. A list of the largest shareholders in the Company can be found on page 44.

Other stakeholders

operational activities are outsourced to third party service providers. These include the Investment Manager, the Company Secretary and Administrator, the Registrar, the Depositary, the Custodian, lawyers and financial advisers. The Board has identified these service providers to be key stakeholders in the Company, together with its shareholders and investee companies. The Board is aware of the need to foster the Company's relationships with its key stakeholders through its stakeholder management activities.  

As part of the Board and stakeholder evaluation processes that are undertaken annually, the Board reviews its engagement mechanisms to ensure they remain effective. 

In fulfilling their duties, the Directors carefully consider the likely consequences, for stakeholders and otherwise, of their actions over the long term.

During the Board's quarterly meetings the Directors consider and are mindful of:

i.    the Company's investment objective and policy;

ii.   the main trends and factors likely to affect the future development, performance and financial position of the Company;

iii.  the Company's key performance indicators;

iv.  the Company's peers;

v.   the Company's overall strategy; and

vi.  the Company's core values, which are integrity, accountability, transparency and commitment.

The service provider most fundamental to the Company's long-term success is the Investment Manager, and the Board provides oversight and challenge to the Investment Manager at all Board meetings to ensure that the portfolio is managed in line with the Company's published investment policy.

A description of key service providers' roles together with the terms of their engagement can be found on pages 41 to 43. The Management Engagement Committee, on behalf of the Board, reviews the performance and terms of engagement of each of the Company's key service providers annually to ensure each remains competitive and to consider the quality of the services they provide.

Environmental, Social and Governance ('ESG') Matters

The Board expects companies in which the Company invests to have good governance standards and satisfies itself that the Investment Manager consistently and proactively engages with them on this basis.

All shareholdings are voted at listed company meetings worldwide where practicable in accordance with the Investment Manager's own corporate governance policies.

Further details of the Investment Manager's approach to ESG within its investment framework can be found on its website at www.phoenixassetmanagement.com.

Monitoring of Key Decisions and the outcome of those decisions

The Board meets at least quarterly and at such other times as deemed appropriate. During these meetings, the Board considers reports from the Investment Manager on the Company's portfolio, investment activity and sector diversification. In addition, the Investment Manager provides an overview of engagement with current and potential investee companies. The Board discusses the Company's portfolio and notable acquisitions or disposals at each of its meetings and challenges stock selection where deemed appropriate.

The Board receives reports from Frostrow, in its capacity as Company Secretary, Administrator and Investor Relations & Marketing Adviser, respectively, on the latest governance, legal and investment trust sector issues, the Company's management accounts and, together with the Company's corporate stockbroker, on the Company's shareholder base, including changes thereto. The Depositary provides oversight reports and the Company's corporate stockbroker also reports on performance relative to the Company's peers and the market liquidity of the Company's shares. Contact with shareholders by the Investment Manager, Frostrow and the Company's corporate stockbroker is also relayed to the Board who consider these discussions at their quarterly meetings.

During the year, in addition to regular interactions, the Management Engagement Committee on behalf of the Board reviewed the performance and terms of engagement of each of the Company's key service providers, which included a review of their control reports and policies, such as whistleblowing, anti-bribery, anti-money laundering and corruption, cyber security, data protection policies and each entity's business continuity arrangements to ensure they were in place and were adequate. Additionally, for the third consecutive year, service providers were asked to participate in a 360 degree review whereby they provided comments on their interactions with the Board and each other. 

In relation to engagement with shareholders, the Board decided in 2023 to decouple the Investment Manager's presentation from the AGM and hold a separate Manager presentation event in October, where Directors were also available to interact. This was repeated in 2024 and 2025. It seems to be a successful formula for increasing engagement, with good attendances each year, and will be continued in 2026 as mentioned above.

Particular decisions during the year included the change of the Company's corporate broker to Deutsche Numis following a review. The Company also implemented a discretionary share buyback programme in the year, aimed at helping to provide market liquidity when it is lacking. This appears to have helped to stabilise the discount, while being accretive to remaining shareholders. The Board has also been active in seeking to enhance the Company's profile, including a restyle of this annual report. In relation to costs, the Board has negotiated an improved fee with the Company's administrator, Frostrow Capital LLP, as shown on pages 42 and 43, and continues to keep costs under review generally.

Principal Risks and Risk Management

The Board is responsible for the identification, evaluation and management of the risks facing the Company. Risk is a key element of all the Board's deliberations. Additionally, the Board has delegated to the Audit Committee the formal regular review of these risks, together with their mitigation and the discerning of emerging risks, on its behalf. This process accords with the UK Corporate Governance Code and the FRC's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting.

The Audit Committee, on behalf of the Board, has carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. 

The Board's policy on risk management has not materially changed during the course of the reporting period and up to the date of this report.

The Audit Committee maintains a framework of the key risks and the policies and processes in place to monitor, manage and mitigate them where possible. This risk map is reviewed regularly by the Audit Committee, as set out in the Audit Committee Report starting on page 62.

The Audit Committee and the Board consider that the risks, and the uncertainties inherent therefrom, that are summarised below are the principal risks currently facing the Company. It is not an exhaustive list of all risks faced by the Company. The assessment of the risks outlined below did not change significantly over the course of the year.

Principal Risks and Uncertainties

Geopolitical and economic risks

Investment objective and strategy risks

Risks related to the Investment Manager

Discount risk

Operational risks

ESG risks

Financial risks

Viability Statement

In accordance with the UK Corporate Governance Code, the Directors have carefully assessed the Company's position and prospects as well as the principal risks and have formed a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five financial years to 31 December 2030. 

The Board has chosen a five-year horizon in view of the long-term nature and outlook adopted by the Investment Manager when making investment decisions.

After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and meet its liabilities as they fall due for at least five years to 31 December 2030. A continuation vote, as required by the Company's Articles, was held on 11 June 2025 and passed with overwhelming support from shareholders. The next vote will take place at the Company's AGM in 2028. The Board has received no indication that this will not also pass.

In reaching their conclusion, the Directors have considered each of the principal risks and uncertainties set out above as well as the following assumptions in assessing the Company's viability:

•       there will continue to be demand for investment trusts;

•     the Board and Investment Manager will continue to adopt a long-term view when making investments;

•       the Company invests principally in the securities of UK listed companies to which investors will wish to continue to have exposure; and

•       regulation will not increase to a level that makes running the Company uneconomical.

Factors including higher interest rates, inflation and the conflicts in Ukraine and the Middle East were also incorporated into the key assumptions. As part of this process the Board considered the impact of severe but plausible adverse scenarios, including the impact of significant market movements, on the Company's liquidity and solvency, its income and expenses profile and that (although not utilised) gearing is an instrument permitted by the Company's investment policy. A significant proportion of the Company's investments comprise readily realisable securities which could, if necessary, be sold to meet the Company's cash requirements. The financial considerations were based on the going concern assessment, discussed on pages 44 and 45, extended to cover the five-year period from the date of approval of this annual report.

The Board aspires for the Company to continue to grow and keeps its potential for doing so under review. Portfolio changes and market developments are also discussed at quarterly Board meetings. 

The internal control framework of the Company is subject to formal review on at least an annual basis and this includes consideration of the operational resilience of the Company's service providers.

Boardroom Diversity

The Board supports the principle of Boardroom diversity. The Board currently comprises four non-executive Directors of which three are female and one male. One Director is from a minority ethnic background. The Board considers its composition, including the balance of skills, knowledge, diversity (including gender and ethnicity) and experience, amongst other factors on an annual basis and when appointing new Directors. The Board has considered the requirements under the FCA's Listing Rule UKLR 6.6.6R (10) in relation to target reporting, and has provided full details in the Corporate Governance Statement section on pages 47 and 48. Summary biographical details of the Directors are set out on pages 36 and 37.

Stewardship code

The Board and the Investment Manager support and have a strong commitment to the FRC's 2020 UK Stewardship Code, which is endorsed by the AIC and sets out principles of effective stewardship by institutional investors. Whilst the Investment Manager is not a formal signatory to the Stewardship Code, it has chosen to adhere to the 12 principles as closely as possible. Further details of the Investment Manager's approach to the Stewardship code can be found on the Investment Manager's website at www.phoenixassetmanagement.com.

Modern slavery disclosure

Due to the nature of the Company's business, being a company that does not have employees and does not offer goods or services to consumers, the Board considers that the Company falls outside of the scope of the Modern Slavery Act 2015 and is not required to issue a slavery and human trafficking statement. The Board considers the Company's supply chains, since it deals predominantly with professional advisers and service providers in the UK financial services industry, to be low risk in this matter.

Anti-bribery and corruption

It is the Company's policy to conduct all of its business in an honest and ethical manner. The Company takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever it operates. The Company's policy and the procedures that implement it are designed to support that commitment. The Board has made enquiries of its third-party service providers to ensure they have procedures and policies in place.

Criminal Finances Act 2017

The Company maintains a zero-tolerance policy towards the provision of illegal services, including the facilitation of tax evasion. The Company has received assurances from the Company's main service providers that they maintain a zero-tolerance policy towards the provision of illegal services, including the facilitation of tax evasion.

Outlook

The outlook for the Company is discussed in the Chair's Statement on page 8.

This Strategic Report was approved by the Board on 30 March 2026.

Lucy Walker

Chair of the Board of Directors

.

Statement of Directors' Responsibilities for the Annual Report

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with UK-adopted International Accounting Standards and in accordance with those parts of the Companies Act 2006 that apply to companies reporting under UK-adopted International Accounting Standards.

Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to:

•      select suitable accounting policies and then apply them consistently;

•      state whether applicable UK-adopted International Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•      make judgements and accounting estimates that are reasonable and prudent; and

•      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

Under applicable law and regulations, the Directors are responsible for preparing a Strategic Report, a Directors' Report, a Corporate Governance Statement and a Directors' Remuneration Report which comply with that law and those regulations.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors have delegated responsibility to the Investment Manager for the maintenance and integrity of the Company's website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. Each of the Directors, whose names and functions are listed on pages 36 and 37 confirm that, to the best of their knowledge:

•       the Company's financial statements, which have been prepared in accordance with UK-adopted international accounting standards and in accordance with those parts of the Companies Act 2006 that apply to those companies reporting under UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and net return of the Company; and

•       the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board
Lucy Walker
Chair of the Board of Directors
30 March 2026

.

Financial Statements

.

Income Statement

The total column represents the Income Statement of the Company, prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the United Kingdom.

The revenue and capital columns, including the revenue and capital earnings per ordinary share data, are supplementary information prepared under guidance published by the AIC.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.

The Company does not have any other comprehensive income. Therefore, no separate Statement of Comprehensive Income has been presented.

The notes on pages 81 to 100 form part of these accounts.

.

Statement of Financial Position

Approved by the Board of Directors on 30 March 2026 and signed on its behalf by:

Lucy Walker
Chair of the Board

Company no. 03300814

The notes on pages 81 to 100 form part of these accounts.

.

Statement of Changes in Equity
Year to 31 December 2025

The notes on pages 81 to 100 form part of these accounts.

Statement of Changes in Equity
Year to 31 December 2024

The notes on pages 81 to 100 form part of these accounts.

.

Cash Flow Statement

The notes pages 81 to 100 form part of these accounts.

.

Notes to the Financial Statements

1.         Reporting entity

The Company is a closed-ended investment company, registered in England and Wales on 10 January 1997 with Company number 03300814. The Company's registered office is 25 Southampton Buildings, London WC2A 1AL. 

Details of the Directors, Investment Manager and Advisers can be found on pages 36 to 38.

Basis of Accounting

The financial statements of the Company have been prepared in accordance with UK-adopted International Accounting Standards ("IFRS") and the applicable legal requirements of the Companies Act 2006.

The annual financial statements have also been prepared in accordance with the Association of Investment Companies ("AIC") Statement of Recommended Practice ("SORP") for the financial statements of investment trust companies and venture capital trusts, except to any extent where it is not consistent with the requirements of IFRS, then this will be noted and explained.

In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been prepared alongside the Income Statement.

The functional currency of the Company is Sterling because this is the currency of the primary economic environment in which the Company operates. The financial statements are presented in Sterling rounded to the nearest thousand, except where otherwise indicated.

Going concern

The financial statements have been prepared on the going concern basis. The Directors have a reasonable expectation, after making enquiries, that the Company has adequate resources to continue in existence for at least 12 months from the date of approval of this Annual Report.

In reaching this conclusion, the Directors have considered the liquidity of the Company's portfolio of investments as well as its latest financial position and forecast of income and expenses.

As at 31 December 2025, the Company held £1,090,000 (2024: £17,076,000) in cash and cash equivalents, £317,945,000 (2024: £272,105,000) in quoted investments and £9,291,000 (2024: £4,817,000) in unquoted investments. The total ongoing operating expenses for the year ended 31 December 2025 were £1,093,000 (2024: £966,000). It is estimated that 46.7% of the Company's latest portfolio could be liquidated in a non-market impacting way within seven days, using 25% of historic three-month average daily volume. This approach is considered conservative as it does not include the Company's ability to access liquidity through block trades.

The Company's going concern status has been assessed under stress scenarios, which incorporated key assumptions such as significant falls in the Company's investment portfolio value and investment income. These scenario tests encompassed possible impacts from factors such as the existing and potential further risks arising from the conflicts in Ukraine and the Middle East. A prolonged and deep market decline could lead to falling investment values or interruptions to cash flow, however the Company currently has more than sufficient liquidity to meet any liabilities when they fall due in the foreseeable future. The Board is keeping the development of external risk factors under close scrutiny and does not believe that these will have any impact on the Company's going concern status.

At the date of approval of this Annual Report, the aggregate value of the Company's cash and cash equivalents and its investments is well in excess of the estimated level of liabilities, and the Company has substantial operating expenses cover.

Segmental reporting

The Directors are of the opinion that the Company is engaged in a single segment being an investment business in accordance with its Investment Objective and Policy.

Material accounting policies

The material accounting policies adopted are described below:

a.   Accounting Convention

The accounts are prepared under the historical cost basis, except for the measurement at fair value of investments and measurement of performance fees awarded.

b.   Issue of Shares Pursuant to the Combination of Artemis Alpha Trust plc ("ATS") with the Company

On 29 November 2024, the Company issued new shares to shareholders of ATS in consideration for the receipt by the Company of assets pursuant to the combination with ATS. The cost to acquire the assets and liabilities of ATS was allocated between the acquired identifiable assets and liabilities based on their relative fair values on the acquisition date without attributing any amount to goodwill or to deferred taxes. Investments, cash and other assets were transferred from ATS. All assets were acquired at their fair value. The value of the assets received, in exchange for shares issued by the Company, were recognised in share capital and share premium, as shown in the Statement of Changes in Equity. Listing costs in respect of the shares issued were recognised in share premium, whereas other costs in relation to the combination were recognised through capital in the Income Statement.

c.   Investments

Investments are measured at fair value through profit or loss ("FVTPL"). Gains or losses on investments and transaction costs on acquisition or disposal of investments are included in the Income Statement as a capital item.

For investments that are actively traded in organised financial markets, fair value is determined by reference to stock exchange quoted market bid prices at the close of business on the year-end date. All purchases and sales of investments are recognised on the trade date, i.e. the date that the Company commits to purchase or sell an asset.

Unquoted investments are measured at fair value in accordance with the International Private Equity and Venture Capital ("IPEV") valuation guidelines and IFRS 13. Further details on the valuation of unquoted investments may be found in Notes 1(i) and 13.

d.   Income from Investments

Special Dividends are assessed on their individual merits and are credited to the capital column of the Income Statement if the substance of the payment is a return of capital. All other investment income is taken to the revenue column of the Income Statement.

e.   Share Capital and Reserves

The share capital represents the nominal value of equity shares.

The share premium account represents the accumulated premium paid for shares issued above their nominal value less issue expenses. This reserve is not distributable.

The capital redemption reserve arises when shares are bought back by the Company or returned by the Investment Manager under the performance fee clawback arrangement, and subsequently cancelled, at which point an amount equal to the par value of the shares is transferred from share capital to this reserve. This reserve is not distributable.

Other reserve represents the restricted shares issued in settlement of performance fees that are still within a lock-in period. This reserve is not distributable.

The share-based payment reserve represents the cumulative share-based payment expenses in relation to performance fees earned. Upon vesting, the relevant share-based payment reserve balance will be transferred to the realised capital reserve. This reserve is not distributable.

The capital reserve represents realised and unrealised capital and exchange gains and losses on the disposal and revaluation of investments and of foreign currency items. In addition, performance fee costs are allocated to the capital reserve. The amount within the capital reserve less unrealised gains (those on investments not readily convertible to cash) is available for distribution. The realised gains within the capital reserve amounted to £44,497,000 as at 31 December 2025 (2024: £56,397,000). The Company may use this reserve for share buybacks, but otherwise has no current intention to make distributions out of its capital reserve. 

The revenue reserve represents the surplus of accumulated revenue profits, being the excess of income derived from holding investments less the costs associated with running the Company. This reserve may be distributed by way of dividends, to the extent realised.

f.    Expenses

All expenses are charged through the revenue column of the Income Statement except the following:

•    expenses that are incidental to the acquisition or disposal of an investment are charged to the capital column of the Income Statement; and

•    expenses are charged to the capital column of the Income Statement where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect, performance fees are charged to the Income Statement in line with the Board's expected long-term returns, in the form of capital gains, from the Company's portfolio.

g.   Equity dividends payable

Equity dividends payable are recognised when the shareholders' right to receive payment is established. For interim dividends this is when they are paid and for final dividends this is when they are approved by shareholders.

h.   Performance Fees

Performance fees are calculated based on the Company's net asset value ("NAV") outperformance against its benchmark, in accordance with the terms of the Investment Management Agreement.

Performance fees, if earned, are settled by the issue of shares in the Company. Such shares are subject to a fixed three-year clawback period, under which the Company is entitled to recover and cancel shares should the outperformance versus the benchmark reverse over that period.

The performance fee is accounted for as a share-based payment in accordance with IFRS 2, as it is settled by the issue of a variable number of shares based on a fixed monetary amount. The arrangement contains a non-market performance condition, being the outperformance of the Company's NAV against its benchmark.

The performance fee is recognised as an expense in the Income Statement on a straight-line basis over the relevant service period, based on the outcome of the performance fee calculation. This amount excludes any projection of potential clawback at the end of the performance period.

The expense recognised is adjusted at each reporting date to reflect management's estimate of the number of shares expected to ultimately vest. Where appropriate, adjustments arising from changes in these estimates are recognised in the Income Statement.

i.    Critical Judgements, Estimations or Assumptions

Performance fees

The Board has determined that the appropriate service period over which the performance fee should be recognised comprises the current year of service together with the subsequent three-year clawback period.

Judgement has also been applied in determining that the performance condition attached to the performance fee is a non-market performance condition under IFRS 2, as it is based on the Company's NAV outperformance relative to its benchmark.

Estimation is required in assessing the number of shares expected to ultimately vest, including consideration of whether clawback conditions are likely to be triggered over the clawback period. These estimates are reviewed at each reporting date and may result in adjustments to the performance fee charge recognised in the Income Statement.

Due to the nature of the arrangement, the cumulative expense recognised over the service period will equal either the amount initially calculated where performance conditions are met in full, or a lower amount where clawback is expected to apply.

The Board considers the assumptions and judgements applied to be reasonable and supportable; however, different assumptions regarding performance outcomes or clawback expectations could result in materially different timing of expense recognition within the service period.

The Investment Manager earned a performance fee of £560,903 in 2023 and this was settled by the issuance of 214,264 shares in 2024. As at 31 December 2025, based on estimates produced by the Company's in-house assessment model, it is expected that no shares issued in relation to 2023 will ultimately vest at the end of the clawback period on 31 December 2026, and therefore no IFRS 2 expenses have been charged in the Income Statement.

No performance fee was earned during 2024 or 2025 and the fee assessment period has been extended to 2026. 

Valuation of Unquoted Investments

The Company has seven unquoted investments, two of which are nil valued. These are classified as Level 3 investments under the fair value hierarchy, please refer to Note 13 for definitions of fair value hierarchy. Their fair value as at 31 December 2025 is £9,291,000 or 2.8% of NAV (2024: £4,817,000 or 1.6% of NAV).

The investments are valued in accordance with the Company's accounting policy set out in 1c. In estimating the fair value of unquoted investments, the AIFM and Board apply valuation techniques which are appropriate in light of the nature, facts and circumstances of the investment, and use reasonable current market data and inputs combined with judgement and assumptions and apply these consistently. For each unlisted investment, one or more of the following valuation techniques is used:

Market Approach (Multiples and Benchmarks): Based on reference to prices and financial information generated by market transactions involving similar assets or investments. Where relevant and reliable data exists, comparable company multiples (e.g., EV/EBITDA, EV/Revenue) and available market prices from recent transactions in comparable unlisted entities are applied, adjusted for differences in size, growth prospects, and liquidity.

Income Approach (Discounted Cash Flow): Based on discounting projected future cash flows of the investee to their present value using risk‑adjusted discount rates that reflect market participant assumptions. Projections are based on latest financial forecasts, and terminal value assumptions are included where appropriate.

Cost/Replacement Approach (Net Asset/Cost Approach): Based on the current replacement cost of the underlying assets, less adjustments for functional and economic obsolescence.

The IPEV guidelines also allow for Other Relevant Information to be used as a starting point for estimating fair value, however, this will also be evaluated using one of the above techniques.

Observable market data is preferred when assessing the appropriate methodology.

Unquoted companies are held at 'fair value' i.e. the price that would be paid in an open market transaction. Valuations are adjusted both during regular valuation cycles (at interim and year end), and on an ad hoc basis in response to 'trigger events'. Our valuation process ensures that unquoted companies are valued in both a fair and timely manner.

In making the judgment that the valuation method is appropriate, the Board considers additional information, including an independent valuation review report produced by Kroll Advisory Ltd where available, and published financial statements.

A sensitivity analysis of the unquoted investments can be found in Note 13 a (iii) Other Price Risk Sensitivity.

2.         Investments held at Fair Value Through Profit or Loss

* These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

Transaction costs on investment purchases and sales for the year ended 31 December 2025 are disclosed in the following table.

3.         Income

4.         Investment Management Performance Fees and Other Expenses

* All expenses include any relevant irrecoverable VAT.

** The amounts excluding VAT paid or accrued for the audit of the Company are £63,000 (2024: £70,000).

*** As part of the combination between the Company and Artemis Alpha Trust plc that took place on 29 November 2024, the Company incurred £735,000 of costs which have been charged to capital. Within the terms of the combination, Phoenix will contribute £750,000 towards the offsetting of the direct costs related to the transaction. The contribution will be made by way of a reduction in the performance fee payable to Phoenix by the Company in respect of the financial years ending 31 December 2024, 31 December 2025 and 31 December 2026. The fee reduction will constitute a waiver of the performance fee of £750,000. As no performance fee was earned in relation to 2024 or 2025, a £750,000 receivable has been recognised as at 31 December 2024 and 31 December 2025 (see Note 6).

Investment Management Performance Fees

The Company's Investment Manager does not earn an ongoing annual management fee, but will be paid a performance fee equal to one third of any outperformance of the Company's NAV per share total return (including dividends and adjusted for the impact of share buybacks and the issue of new shares) over the FTSE All-Share Index (total return) for each financial year or, if applicable, extended performance period.

The total annual performance fee is capped at 4% per annum of the NAV of the Company at the end of the relevant financial year, in the event that the NAV per Share has increased in absolute terms over the period, and 2% in the event that the NAV per Share has decreased in absolute terms over the period. Any outperformance that exceeds these caps will be carried forward and only paid if the Company outperforms, and the annual cap is not exceeded, in subsequent years.

The performance fee is subject to a high-water mark so that no fee will be payable in any following year until all underperformance of the Company's NAV since the last performance fee was paid has been made up.

Performance fees are settled by issuance of new shares. Such shares are issued at the NAV per share prevailing at the date of issue, so that the then current value of the shares equates in terms of NAV to the performance fees calculated at the end of the relevant financial period.

Any part of the performance fee that relates to the performance of Phoenix SG will be accrued but will not be paid until such time as the Company's investment in Phoenix SG has been realised or is capable of realisation. The position will be reviewed at that time by reference to the realised proceeds of sale or the fully realisable value of Phoenix SG as compared to the original cost of acquisition.

Performance fees are calculated annually and, if earned, settled by way of share issuance by the Company. 80% is settled shortly after the year end date and the remaining 20% is settled upon approval of the Company's Annual Report. Shares issued to the Investment Manager are subject to a three-year clawback period, during which the Investment Manager is not entitled to sell, pledge or transfer the shares, but is entitled to dividends and voting rights. If the Company's NAV underperforms its benchmark index on a total return basis over the clawback period, shares issued to the Investment Manager will be proportionally or entirely clawed back and cancelled by the Company. Any dividends that were paid on the shares are not clawed back.

Share-based Payment

The performance fee arrangement is recognised as an equity-settled share-based payment under IFRS 2, and the related expenses are charged or credited in the Income Statement on a straight-line basis over a vesting period of the performance fee calculation period followed by three years of clawback period.

At the end of each reporting period, the Company reviews cumulative total returns between the Company's NAV and its benchmark index in relation to each performance year in which a performance fee was earned and adjusts the cumulative charges of share-based payment expenses accordingly.

No share-based payment charge/clawback was recognised in the Company's Income Statement for the year ended 31 December 2025 (2024: clawback of £166,000).

* No performance fee was earned during 2022 and the fee assessment period was extended to 2023.

** No performance fee was earned during 2024 and the fee assessment period was extended to 2025.

*** No performance fee was earned during 2025 and the fee assessment period has been extended to 2026.

Share-based Payment Sensitivity Analysis

The performance fee clawback period for the years ended 31 December 2022 and 31 December 2023 ends on 31 December 2026. As at 31 December 2025, the Company is underperforming the benchmark, as per below

If the Company's underperformance changed by +10%/-10% there would be no impact on the Company's profit after tax for the year ended 31 December 2025.

5.         Taxation

Current taxation

The taxation charge for the year is different from the standard rate of corporation tax in the UK of 25.0% (2024: 25.0%). The differences are explained below:

Due to the Company's status as an investment trust and its intention to continue meeting the conditions required to maintain its status in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

Deferred Tax

The Company has £15,823,000 (2024: £14,681,000) in respect of excess unutilised management expenses, equivalent to a potential tax saving of £3,960,000 (2024: £3,670,000) at the prospective tax rate of 25% (2024: 25%) and £1,491,000 (2024: £1,491,000) in respect of loan interest, equivalent to a potential tax saving of £373,000 (2024: £373,000) at the prospective tax rate of 25% (2024: 25%).

These amounts could be utilised to the extent that the Company has sufficient future taxable revenue. A deferred tax asset has not been recognised in respect of these expenses.

6.            Trade and other receivables

The £750,000 contribution receivable (2023: £nil) from Phoenix Asset Management Partners Limited ("Phoenix"), relates to the Manager's contribution towards offsetting the costs directly related to the ATS combination during the period. Please refer to Note 4 for further detail.

7.         Ordinary Dividends

8.         Earnings Per Share

Earnings per share ("EPS") are based on the profit of £47,257,000 (2024: loss of £10,710,000) attributable to the weighted average of 112,803,770 (2024: 79,368,511) voting shares in issue during the year, excluding shares that are considered to not be outstanding in accordance with IAS 33.

Supplementary information is provided as follows: revenue earnings per share are based on the revenue profit of £5,176,000 (2024: profit of £2,556,000); capital earnings per share are based on the net capital profit of £42,081,000 (2024: loss of £13,266,000), attributable to the weighted average of 112,803,770 (2024: 79,368,511) voting shares. Shares issued in relation to the performance fee are subject to a three-year clawback mechanism. While legally issued, these shares are contingently returnable and are therefore not treated as outstanding for the purposes of basic EPS. For the purposes of diluted EPS, shares subject to the performance fee clawback are treated as contingently issuable shares, and only included within the calculation when the relevant performance conditions have been satisfied. Accordingly, such shares have been excluded from the weighted average number of shares used in the calculation of basic and diluted EPS.

9.            Share Capital and Reserves

The Company has a single share class, being ordinary shares that each have a nominal value of 25p, and has not issued any other forms of security.

The Company has a Block Listing Facility which was last renewed on 17 April 2020. As at 31 December 2025, 14,245,062 shares remained unallotted under the facility (2024: 14,245,062 shares).

No shares were issued under the Block Listing Facility, or otherwise, during the year ended 31 December 2025. During the year ended 31 December 2024 the Company issued 214,264 shares at an average price of 261.78p per share to the Company's Investment Manager, representing the performance fee earned for the year ended 31 December 2023. These are subject to a three-year lock-in and clawback period from the date of their issue. 

On 29 November 2024 the Company issued 38,369,114 shares to holders of Artemis Alpha Trust plc ("ATS") shares, at a deemed price of 262.58p per share, in consideration for the transfer to the Company of approximately £101 million of net assets from ATS.

During the year ended 31 December 2025 the Company bought back into treasury 4,538,824 shares, at an average price (excluding ancillary charges) of 252.16p per share. The Company did not purchase any of its own shares during the year ended 31 December 2024. Since the year end, up to 27 March 2026, the Company has bought back into treasury a further 422,526 shares, at an average price of 248.5p per share.

The clawback period on restricted shares issued to the Investment Manager in relation to the performance period ended 31 December 2021 finished on 31 December 2024 and 89,096 shares originally issued to the Investment Manager were clawed back. These were cancelled in January 2025.

Other Reserve

The other reserve balance represents the restricted shares issued in settlement of performance fees that are still within a lock-in period.

The clawback period for the performance fee earned during the year ended 31 December 2021 ended on 31 December 2024. The Company's cumulative NAV total return underperformed that of the benchmark index over the vesting period. As a result, the 89,096 restricted shares originally issued in settlement of the £221,219 performance fee earned were clawed back as at 31 December 2024.

Share-based Payment Reserve

The share-based payment reserve represents the cumulative share-based payment expenses in relation to performance fees earned. A share-based payment clawback of £166,000 in relation to the 2021 performance fee crystallised on 31 December 2024, resulting in a nil balance at that year end. No share-based payment expenses have been charged subsequently as no shares issued in settlement of the fee earned in the performance fee period ended 31 December 2023 are expected to ultimately vest based on the estimates produced by the Company's in-house model and no performance fee was earned in the subsequent period to 31 December 2025. This is subject to review and change at the Company's future reporting dates. Further details can be found in Note 4.

10.          Net Assets Per Share

The figure for Net Assets per Share is based on Net Assets of £329,247,000 (2024: £293,501,000) divided by 110,033,918 voting shares in issue at 31 December 2025 (2024: 114,572,742).

11.          Reconciliation of Net Cash Flow from Operating Activities

12.          Transactions with Related Parties

The Board of Directors is defi ned as a related party. Under the FCA Listing Rules, the Manager is also defi ned as a related party. However, under the AIC SORP, in accordance with which these financial statements are prepared, the Manager is not considered to be a related party.

There were no transactions with Directors other than as disclosed in the Directors' Remuneration Report on pages 55 to 57 and in Note 4 on page 89. No fees payable to the Directors were outstanding as at 31 December 2025.

13.          Financial Instruments

Investments are carried in the balance sheet at fair value. For other financial assets and financial liabilities, the balance sheet value is considered to be a reasonable approximation of fair value.

Financial assets

The Company's financial assets may include equity investments, fixed interest securities, short-term receivables and cash and cash equivalents balances. The currency and cash-flow profile of those financial assets was:

The cash and equivalents balance comprises cash at bank of £1,090,000 (2024: £9,169,000) held by the Company's Depositary, Northern Trust Investor Services Ltd, and no UK Treasury Bills (2024: £7,907,000).

Financial liabilities

The Company fi nances its investment activities through its ordinary share capital and reserves. It does not currently use borrowing for such purposes. The Company's financial liabilities comprise short-term trade payables. Foreign currency balances are stated in the accounts in sterling at the exchange rate as at the Balance Sheet date.

There were no short-term trade payables (other than accrued expenses).

Fair Value Hierarchy

Under IFRS 13 investment companies are required to disclose the fair value hierarchy that classifies financial instruments measured at fair value at one of three levels according to the relative reliability of the inputs used to estimate the fair values.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset.

During the year, £4,840,000 of Level 1 assets (2024: nil) were delisted and transferred to Level 3.

The movement on the Level 3 unquoted investments during the year is shown below:

* Additions to the Level 3 unquoted investments during 2024 related to the ATS combination. No other unquoted assets were acquired during the year.

** Hornby transferred from Level 1 to Level 3 during the year (2024: none).

The Level 3 unquoted investment balance represents the Company's investment in seven unquoted investments, two of which are valued at nil value. Valuation reports prepared by the Investment Manager are used as an input into the Company's fair value assessment. These valuations are evaluated to ensure the methodologies applied are consistent with fair value principles and market participant assumptions, in line with the Company's accounting policies and valuation methods set out in Note 1(g) for unquoted investments.

Risk Analysis

The general risk analysis undertaken by the Board and its overall policy approach to risk management are set out in the Strategic Report. Issues associated with portfolio distribution and concentration risk are discussed in the Investment Policy section of the Strategic Report. This note, which is incorporated in accordance with accounting standard IFRS 7, examines in greater detail the identification, measurement and management of risks potentially affecting the value of financial instruments and how those risks potentially affect the performance and financial position of the Company.

The risks concerned are categorised as follows:

a.   Potential Market Risks, which are principally:

      i.    Currency Risk

      ii.   Interest Rate Risk and

      iii.  Other Price Risk.

b.   Liquidity Risk

c.   Credit Risk

Each is considered in turn below:

A (i) Currency Risk

The portfolio as at 31 December 2025 was invested predominantly in sterling denominated securities and there was limited currency risk arising from the possibility of a fall in the value of sterling impacting upon the value of investments or income.

The Company had no foreign currency borrowings at 31 December 2025 or 31 December 2024.

The Company does not hedge its currency exposures currently, but under its investment policy and restrictions, derivative or similar financial instruments can be employed if considered necessary for the purpose of capital preservation.

Currency sensitivity

The table below shows the impact on the Company's profit after taxation for the year ended and net assets as at 31 December 2025, if sterling had strengthened/weakened by 10% against Euro, USD and SEK.

A (ii) Interest Rate Risk

The Company held no UK Treasury Bills at 31 December 2025 (31 December 2024: £7,907,000).

With the exception of cash and cash equivalents, no interest rate risks arise in respect of any current asset. All cash and cash equivalents held as a current asset is sterling denominated, earning interest at the bank's or custodian's variable interest rates.

The Company had no borrowings at 31 December 2025 or 31 December 2024..

A (iii) Other Price Risk

The principal price risk for the Company is the price volatility of shares that are owned by the Company. As described in the Investment Manager's Review, the Company spreads its investments across different sectors and geographies, but as shown by the Portfolio Analysis on page 20, the Company may maintain relatively strong concentrations in particular sectors selected by the Investment Manager.  

The Board manages these risks through the use of investment limits and guidelines as set out in the Company's investment policy and restrictions, and monitors the risks through regular financial and compliance reports provided by the Company's key service providers. 

The effect on the portfolio of a 10.0% increase or decrease in market prices would have resulted in an increase or decrease of £32,724,000 (2024: £27,692,000) in the investments held at fair value through profit or loss at the period end, which is equivalent to 9.9% (2024: 9.4%) in the net assets attributable to equity holders. This analysis assumes that all other variables remain constant.

The significant unobservable inputs used in fair value measurement categorised within Level 3 of the fair value hierarchy, together with a quantitative sensitivity, as at 31 December 2025 are shown below, with the exception of the Market Value approach as it does not involve significant subjectivity:

B Liquidity Risk

Liquidity Risk is considered to be low, because most of the portfolio is invested in readily realisable securities. As a consequence, cash flow risks are also considered to be low. The Investment Manager estimates that, under normal market conditions and without causing excessive disturbance to the prices of the securities concerned, 46.7% (2024: 39.0%) of the portfolio could be liquidated within seven days, based on 25% of average daily volume. This is conservative as it does not include the ability to access liquidity through block trades.

C Credit Risk

The Company invests in quoted and unquoted equities in line with its investment objective and policy. The Company's investments are held by Northern Trust Investor Services Ltd ("the Depositary"), which is a large and reputable international banking institution. The Company's normal practice is to remain fully invested at most times and not to hold large quantities of cash. At 31 December 2025, cash at bank comprised £1,090,000 (2024: £9,242,000) held by the Depositary, and no UK Treasury Bills (2024: £7,907,000).

Credit Risk arising on transactions with brokers relates to transactions awaiting settlement. This risk is considered to be very low because transactions are almost always undertaken on a delivery versus payment basis with member fi rms of the London Stock Exchange.

A credit risk also arises due to the £750,000 payable from Phoenix in relation to the combination expenses costs, as detailed in Notes 4 and 6. The credit risk associated with this receivable is considered to be low because the amount is contractually due from the Investment Manager under the terms of the Investment Management Agreement. Phoenix is a regulated financial institution with a strong credit profile and a long‑standing operational relationship with the Company, further reducing the likelihood of default.

D Capital management policies and procedures

The Company's capital management objectives are:

•      to ensure the Company's ability to continue as a going concern; and

•      to provide an adequate return to shareholders

by pursuing investment policies commensurate with the level of risk.

The Company considers its capital to be issued share capital and reserves, and monitors capital on the basis of the carrying amount of equity, less cash as presented on the face of the statement of financial position.

The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Company does not currently intend to use gearing, but as set out in its investment objective and policy, borrowings of up to 30% of the aggregate of the paid-up nominal capital plus the capital and revenue reserves are permitted.

The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders (within the statutory limits applying to investment trusts), return capital to shareholders, issue new shares, or sell assets.

14.          Post Year End Events

No post balance sheet events have occurred since 31 December 2025.

.

The figures and financial information for 202 are extracted from the published Annual Report for the year ended 31 December 2024 and do not constitute the statutory accounts for that year. The Annual Report for the year ended 31 December 2024 has been delivered to the Registrar of Companies and included an Independent Auditor's Report which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

The figures and financial information for 2025 are extracted from the Annual Report and financial statements for the year ended 31 December 2025 and do not constitute the statutory accounts for the year. The Annual Report for the year ended 31 December 2025 includes an Independent Auditor's Report which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and financial statements have not yet been delivered to the Registrar of Companies.

The Annual Report will be posted to shareholders shortly. Copies may be obtained by writing to the Company Secretary, Frostrow Capital LLP at 25 Southampton Buildings, London WC2A 1AL, or from the Company's website - www.auroraukalpha.com - where up to date information on the Company, including daily NAVs, share prices and fact sheets, can also be found.

A copy of the Annual Report will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

Frostrow Capital LLP
Company Secretary
020 3709 8733

30 March 2026