Annual Results and Fourth Quarter Dividend

RNS Number : 1415K

CT UK Capital and Income Investment

04 December 2025

CT UK CAPITAL AND INCOME INVESTMENT TRUST PLC

Audited Statement of Results for the year ended 30 September 2025

LEI: 21380052ETTRKV2A6Y19

4 December 2025

CT UK Capital and Income Investment Trust PLC ("CTUK" / the "Company") today announces its results for the year ended 30 September 2025.

· The Board is pleased to declare a fourth quarterly dividend of 4.15p per share ⁽¹⁾. Together with the three dividends already paid for this financial year, this takes the total dividend for the year to 13.00p per share, an increase of 4.0% compared to last year. This provides Shareholders with an annual dividend yield of 3.9% ⁽²⁾.

· This is the 32^nd consecutive year of increased annual dividend payments, maintaining the Company's status as an AIC Dividend Hero. An investment of £1,000 at launch in 1992 has generated £2,631 of dividends compared with £1,145 from the FTSE All-Share Index ("the Benchmark").

· Net Asset Value ("NAV") per share total return of 5.9%, compared to the Benchmark total return of 16.2% and Share Price total return of 4.9%.

· Julian Cane, the Company's long serving Fund Manager will step down with effect from 1 January 2026. He will be succeeded by Dominic Younger. Dominic, who joined Columbia Threadneedle in 2013, is a fund manager on the UK Equities team and has worked alongside Julian managing the firm's UK Equity Income strategies since 2021.

(1) The fourth interim dividend will be paid on 31 December 2025 to Shareholders on the register on 12 December 2025. The ex-dividend date is 11 December 2025.

(2) Calculated as the total of the four most recent quarterly dividends declared divided by the period end share price.

The Chair, Nicky McCabe, said:

"The Company's long-term income delivery for Shareholders remains compelling: £1,000 invested in 1992 has generated £2,631 in dividends, compared to £1,145 from the FTSE All-Share. The Board recognises that Shareholders want the Company to continue to pay reliable and increasing dividends. It remains firmly our intention to continue to build on this record of dividend growth."

Chair's Statement

Dear Shareholder,

I am pleased to write to you as Chair, having taken over from Jane Lewis on her retirement from the Board at the Annual General Meeting earlier this year. I would like to thank Jane for her hard work, enthusiasm and wise insight during her time as Chair and for her tenure on the Board before that.

Income Level and Growth - 32 consecutive years of dividend increases, an above inflation dividend payout, resulting in a yield of 3.9%

This is the 32^nd year that the Board is declaring an increased dividend for the Company. Our fourth quarter dividend will be 4.15 pence per share, resulting in a dividend of 13.0 pence for the full year. As a consequence, the Company's shares will yield 3.9%. Our annual dividend has increased by 4.0%, ahead of the rate of CPI for the year to September of 3.8%.

The fourth quarter dividend of 4.15 pence per share will be paid on 31 December 2025 to Shareholders on the register on 12 December 2025. The ex-dividend date will be 11 December 2025.

The Company's long-term income delivery for Shareholders remains compelling: £1,000 invested in 1992 has generated £2,631 in dividends, compared to £1,145 from the FTSE All-Share. The Board recognises that Shareholders want the Company to continue to pay reliable and increasing dividends. It remains firmly our intention to continue to build on this record of dividend growth, which is supported both by the strength of our Revenue Reserve and now our former Share Premium Account - more on this below. Together, these two reserves amount to almost £152 million, compared to the cost last year of our dividend of £12.6 million.

To that end, following the approval by Shareholders at this year's Annual General Meeting ("AGM"), the Company successfully completed a court process to cancel the Company's sizeable share premium account on 4 July 2025. Converting the Share Premium Account to a distributable reserve has provided us with the significant pool of reserves to fund dividends, share buybacks and other returns of capital, as described above.

Why was this important? In recent years, the UK stock market has become a more challenging place from which to generate steady and growing income. There are two reasons for this. First, companies have become less tied to the principle of maintaining and growing their dividends. Computershare, who looks after the shareholder registers of 900 UK companies, states that dividends for the third quarter of 2025 were down 1.4% year on year and forecasts that total UK dividends for 2025 will fall by 2.3%. Secondly, many companies are increasingly returning capital to shareholders via share buy-backs sometimes as a replacement to dividends. It is estimated that 160 UK companies are now running share buy-back programmes.

Against this background, our income from investments increased by 3.0% during the year, a creditable result. The increase in net revenue to Shareholders on a per share basis, after reduced borrowing costs and fewer shares in issue, was 8.5%.

Review of the Last Year: A strategic mid-cap orientation, with a focus on high quality companies

The UK stock market rose considerably over the last year, well ahead of the rate of economic growth and inflation. However, in a similar way to the Magnificent Seven in the US market, the gains in the UK market were largely concentrated in a small number of large cap stocks. This has proven to be a difficult background for our Fund Manager, as he has always had a strategic mid-cap orientation. Whilst the share prices of many of the very largest UK companies rose strongly - the FTSE All-Share Index rose by 16.2% - the FTSE Mid 250 index and FTSE Smaller Companies Index have risen by a more modest 8.1% and 8.9% respectively. By comparison, our Net Asset Value ("NAV") per share and our share price rose by 5.9% and 4.9% respectively. While an absolute rise for our Shareholders, this is clearly a disappointing result versus the overall UK market. We did have a strongly positive year for absolute and relative returns for the year to 30 September 2024, but our underperformance this year inevitably impacts our long-term record as well.

As many of you know, one of the oldest adages in investing is that time in the market is more important than trying to time the market. Many of our Shareholders have been with us since inception, and I thank you for investing with us. The team at Columbia Threadneedle Investments have seen many investment cycles since our launch, and have considerable experience navigating difficult conditions, not least the boom in the share prices of Technology, Media and Telecommunication (TMT) companies during the late 1990s, the Global Financial Crisis of 2007-09 and the impact of Covid. Each of those produced volatility in share prices and initially disappointing returns for Shareholders, but with firm conviction and a dedication to the investment process on each occasion there was a subsequent strong recovery in absolute and relative performance. The team will be working hard to achieve that and the Fund Manager's Review in the Annual Report & Accounts discusses the year's market conditions and provides a greater analysis of performance and attribution of returns.

Alongside this, the Board is working with Columbia Threadneedle Investments to enhance our marketing to existing and new Shareholders. In particular, we will be looking to broaden our appeal to people who invest for the long term via the retail platforms. To that end, we have a broad mix of skills on the Board to work with the Manager, on behalf of our Shareholders.

Fund Manager Succession

Our long-serving Fund Manager, Julian Cane, will step down from managing the Company with effect from 1 January 2026 and will be succeeded by Dominic Younger.

Julian has been the Company's Fund Manager for a remarkable 28 years. During this period the NAV total return of the Company has been 535% and the share price total return 567%, both outperforming the Benchmark FTSE All-Share Index which returned 528%. Alongside this, the Company's annual dividend increased 189%, compared to 123% for the FTSE All-Share Index and 100% for the rate of CPI. In recognition of the 32 consecutive years of increased annual dividends the Company is an AIC Dividend Hero and there are only 13 investment trusts with a longer record of annual dividend increases. The Board would like to record its thanks to Julian for his commitment to the long-term success of the Company and wishes him well for the future. Julian will remain with Columbia Threadneedle Investments as a senior member of the UK Equity team, ensuring a smooth handover of responsibilities.

Dominic Younger, who joined Columbia Threadneedle Investments in 2013, is a fund manager on the UK Equities team and has worked alongside Julian managing the firm's UK Equity Income strategies since 2021. Dominic is currently lead portfolio manager of the CT UK Monthly Income Fund and the CT Monthly Extra Income Fund. Dominic holds a BA (Hons) in History from Newcastle University. He also holds the Chartered Financial Analyst designation and the Investment Management Certificate.

The Board looks forward to working with Dominic and the wider Columbia Threadneedle Investments team.

The Company's investment policy and objective will remain unchanged.

Share Price discount to NAV

During the year, the share price has traded from Net Asset Value per share to a discount of 5%, with the shares in a narrower range of 3% to 5% for over six months of the year. The Board is keen to make sure the share price does not trade at prices that are too detached from the underlying NAV per share and the Company can buy-back its own shares (if the discount between the share price and the NAV per share is too great) and to issue shares (if they are trading at a sufficient premium to the NAV).

Our share buy-back programme was active throughout the year and bought back a total of 4.2 million shares at an average discount of 4.1%. This is very similar to the amount bought back in the previous year. Buying back these shares added 0.2% to the NAV.

At the forthcoming AGM, the Board will again ask Shareholders to renew its authorities to issue shares at a premium and buy-back at a discount. This should assist the Board in continuing to protect the discount to NAV at which the Company's shares may trade.

Gearing

Throughout the year, we have borrowed funds to invest in our portfolio. The amounts borrowed were reduced from £28 million to £15 million at year-end, as funds were raised by reducing a number of stocks, and taking a slightly more cautious view of investment markets.

Costs

The Board aims to run the Company as efficiently as possible, and our cost ratio remains competitive at 0.66% of net assets. Expenses rose over the year in absolute terms, but remained steady as a percentage of average net assets. Paying for portfolio management is the Company's largest expense and this is directly related to the value of the assets. Although NAV per share increased during the year, total assets decreased as a result of share buy-backs and our reduction in gearing.

ESG

Consideration of Environmental, Social and Governance ("ESG") issues has long been an integral part of the investment process for our investment manager, and Columbia Threadneedle Investments has one of the largest and longest-established teams dedicated to such issues. There is a detailed commentary on pages 28 to 31 of the Annual Report & Accounts which explains Columbia Threadneedle Investment's ESG policies and how these have been implemented within our portfolio.

Directorate Change

At the AGM in March 2025 it was announced that following Jane's departure, John Blowers would join the Board. John has experience of direct to consumer marketing through his time as a former marketing and managing director at interactive investor, and has a deep investment trust knowledge. We look forward to John working with Dunke, a fellow board member, on widening our appeal to new and existing personal Shareholders.

AGM

We would be delighted if you could join us at the AGM to be held at 12.30pm on 5 March 2026 at the offices of Columbia Threadneedle Investments, Cannon Place, 78 Cannon Street, London, EC4N 6AG. This will be followed by a presentation by Dominic Younger, on the Company and its investment portfolio.

For Shareholders who are unable to attend, any questions they may have regarding the resolutions proposed at the AGM or the performance of the Company can be directed to a dedicated email account, [email protected], by Thursday 26 February 2026. We will endeavour to address as many of these questions at the meeting as possible. In addition, the meeting will be recorded and will be available to view on the Company's website, www.ctcapitalandincome.co.uk shortly thereafter.

In addition, the AGM and Fund Manager presentation will be broadcast live on the Investor Meet Company platform. This broadcast is open to all existing and potential Shareholders to view. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9.00am on 4 March 2026. Investors can sign up to Investor Meet Company for free and add to meet CT UK Capital and Income Investment Trust plc via https://www.investormeetcompany.com/ct-uk-capital-and-income-investment-trust-plc/register-investor. Investors who already follow CT UK Capital and Income Investment Trust plc on the Investor Meet Company platform will automatically be invited.

To ensure that your votes will count, I would encourage all Shareholders especially those that cannot attend in person to complete and submit their Form of Proxy or Form of Direction in advance of the AGM.

Outlook

Although the immediate economic, political and geopolitical situations continue to appear challenging, as we have repeatedly seen, these situations often do not have a great bearing on stock market returns. There is certainly scope for improvement and any positive change could be well received by the UK stock market.

UK inflation is now widely expected to have peaked, and this should allow the Bank of England to make further interest rate cuts over the next 12 months or so, allowing UK interest rates to get closer to the rates seen in Europe. The recent Budget has been well received by bond markets and this in turn may help to reduce bond yields, by lowering the additional premium demanded by holders of UK Government bonds compared to European sovereign bonds. Lower interest rates and bond yields should provide support both to the UK economy and also to the UK stock market.

Although at the headline level the UK stock market has performed well over the last year, the concentration of these returns amongst a small number of companies has left many other companies trading at attractive valuations. There seems little doubt that there is considerable opportunity in the UK stock market, but the negative sentiment around the UK economy has attached itself to much of the stock market, leading to uncertainty holding back greater strength from a wide number of companies.

The Board considers your Company is well placed to continue to deliver further dividend growth and to take advantage of opportunities within the UK stock market to deliver attractive returns to Shareholders in future. I would like to thank Shareholders for their continuing support and we look forward to introducing you to Dominic Younger at our AGM.

Nicky McCabe

Chair

3 December 2025

Principal Risks and Future Prospects

The principal risks together with their mitigations are set out below. The Board's processes for monitoring them and identifying emerging risks are set out on page 32 and in note 21 of the Annual Report & Accounts. The global economy continues to suffer considerable disruption due to the effects of the war in Ukraine, events in the Middle East and the uncertainty surrounding the imposition of US trade tariffs.

The Directors continue to review the key risk register for the Company which identifies the risks that the Company is exposed to, the controls in place and the actions being taken to mitigate them.

The principal risks identified as most relevant to the assessment of the Company's future prospects and viability are detailed below.

Emerging risks represent new information which could significantly change how an existing risk is perceived, but where the impact or likelihood remains uncertain.

Future Prospects

Through a series of connected stress tests ranging from moderate to extreme scenarios and based on historical information, but forward looking over the five years commencing 1 October 2025, the Board assessed the risks of:

• potential illiquidity of the Company's portfolio;

• the effects of any substantial future falls in investment values and income receipts on the ability to repay and renegotiate borrowings;

• potential breaches of loan covenants, the maintenance of dividend payments and retention of investors; and

• the potential need for extensive share buybacks in the event of share price volatility and a move to a wide discount.

The Board also took into consideration the perceived viability of its principal service providers, potential effects of anticipated regulatory changes and the potential threat from competition. The Board's conclusions are set out under the Five Year Horizon Statement on page 34 of the Annual Report & Accounts. A five year period is considered to be a reasonable time frame for measuring and assessing medium to long term investment performance. A five year period has also been selected as the shares may not be suitable for investors intending to hold them for less than that period.

Principal Risks

· Market and Political Risk

Risk description: Macroeconomic and geopolitical risk including rising international tensions arising from the war in Ukraine, events in the Middle East and the uncertainty surrounding the imposition of US trade tariffs.