Date:                     8 August 2024

Contact:               Mine Tezgul (Lead Investment Manager) / Scott McEllen (Investment Company Secretary)        

                                Columbia Threadneedle Investment Business Limited   

                                0131 573 8300                                                               

LEI:                         213800N61H8P3Z4I8726

European Assets Trust PLC

Unaudited Statement of Results

for the half-year ended 30 June 2024

Highlights for the half-year ended 30 June 2024:

·    Net Asset Value total return of 3.5% in comparison to the Benchmark return of 3.1%.

·    Share price total return of 0.1%.

·    An annual dividend of 5.9p per share for 2024 representing a dividend yield of 7.0% based on the Company's closing share price of 84.4p on 6 August 2024.

"It was a positive period for the Company's portfolio with NAV total return outperforming the Benchmark as the investment manager's stock picking was rewarded. We see opportunities in the current market. Mine and the team favour companies that have a competitive advantage and pricing power generated by brands, patented processes, regulatory barriers to entry and strong market positions. As smaller companies come back into favour later in the cycle we expect to see the rewards."

Stuart Paterson

Chair

SUMMARY OF RESULTS

(1)   Total Return - the return to Shareholders calculated on a per share basis adding dividends paid in the period to the increase or decrease in the Share Price or Net Asset Value in the period. The dividends are assumed to have been re-invested in the form of shares or net assets, respectively, on the date on which the shares were quoted ex-dividend.

(2)   With effect from 1 June 2023 the benchmark changed from EMIX Smaller European Companies (ex UK) Index (net) to MSCI Europe excluding United Kingdom Small Mid Cap (net return) Index.  For the six-month period ended 30 June 2023 a time-apportioned composite of both indices has therefore been calculated and disclosed.

(3)   The first interim dividend of 1.475p per share was paid on 31 January 2024, the second interim dividend of 1.475p per share on 30 April 2024 and the third interim dividend of 1.475p per share on 31 July 2024. The fourth interim dividend of 1.475p per share is payable to eligible Shareholders on 31 October 2024.

The Chair, commenting on the results, said:

Dear Shareholder,

For the six-month period ended 30 June 2024, European Assets Trust PLC ("the Company") recorded a sterling Net Asset Value ("NAV") total return of 3.5%. This compares to the total return from the Company's Benchmark of 3.1% for the same period. The sterling share price total return for the period was 0.1%. At 30 June 2024 the NAV was 98.5p (31 December 2023: 98.3p) and the share price was 86.8p (31 December 2023: 89.7p).

It was a positive period for the Company's portfolio with NAV total return outperforming the Benchmark as the investment manager's stock picking was rewarded.

The six-month period began on a positive note with investment gains achieved mostly in the opening months. Markets in Europe and elsewhere were dominated by volatile interest rate expectations and politics. Against this backdrop smaller companies did well to hold their ground, but underperformed their larger counterparts.

Portfolio Manager Change

On the 2nd of May 2024, the Board announced that following the further integration of the European equities team by Columbia Threadneedle Investments ("the Manager"), Mine Tezgul would succeed Sam Cosh as the Company's Lead Investment Manager.

Mine is a portfolio manager in the European equities team and Head of European Small Cap Equities. Mine joined the Manager in 2018 as an equity analyst, and since 2019 has been lead portfolio manager of the Columbia Threadneedle European Smaller Companies strategy and co-manager of the Columbia Threadneedle Pan European Small Cap Opportunities strategy. Prior to this, Mine spent over ten years as an equity analyst focused on developed market equities, working at Lansdowne Partners, SAC Global Investors and Highbridge Capital Management. Mine started her career with Citigroup as a financial analyst in its investment banking division and holds a BA in Economics with General Honours from the University of Chicago and an MBA with Distinction from INSEAD.

The Board believes that Mine's experience is very well suited to deliver the Company's investment objective for Shareholders in line with the revised investment approach developed following the review of historic performance which was conducted in the latter half of 2023.

Mine is supported by Philip Dicken. Philip is Head of European Equities and International Equities at Columbia Threadneedle Investments. He joined Columbia Threadneedle in 2004 and has managed the Pan European Smaller Companies strategy since launch in 2005.

The Board looks forward to working with Mine and Phil. Following these changes the Board will continue to monitor performance closely. The Company's investment policy and objective remain unchanged.

The Board wishes to place on record its thanks to Sam Cosh and Lucy Morris for their commitment to the Company during their respective periods as Lead Investment Manager and Investment Manager.

Share Price Discount

As at 30 June 2024 the share price discount was 11.8%. This was in comparison to 8.8% as at 31 December 2023. The discount also widened relative to those reported by the Company's peer group and resulted in a subdued share price total return for investors for the six-month period. The Board recognises the importance of movements in the Company's discount upon the return that investors receive and is monitoring closely the discount's absolute and relative levels.

Dividends

The 2024 dividend of 5.90p per share is payable in four equal instalments of 1.475p. Three interim dividends have been paid on 31 January, 30 April and 31 July with a further instalment of 1.475p to be paid on 31 October 2024.

As at 6 August 2024, the latest practicable date prior to publication of this announcement, an annual dividend of 5.9p per share represented a yield of 7.0% calculated with reference to the Company's closing share price of 84.4p. The level of dividend paid each year is determined in accordance with the Company's distribution policy. The Company has stated that, barring unforeseen circumstances, it will pay an annual dividend equivalent to six per cent of its NAV at the end of the preceding year.

Investment Management Fee Amendment

On the 2nd of May 2024 the Board also announced an amendment to the basis of calculation of the investment management fee payable to the Manager.

Previously, the Manager received a fee equal to 0.75% per annum of the value of funds under management up to €400 million, and in cases where the value of funds under management exceeded €400 million, the applicable rate over such excess value was 0.6% per annum.

Following the amendment, which was effective from 1 January 2024, the funds under management to which the applicable rate of 0.75% is applied has been lowered from €400 million to €300 million. For funds under management in excess of €300 million, the applicable rate has been reduced from 0.60% to 0.55% per annum. The basis of calculation for funds under management remains unchanged.

Directorate Changes

The Company was incorporated on 12 November 2018. It should though be remembered that it is the UK domiciled successor of its Dutch predecessor, European Assets Trust NV ("EAT NV") which was dissolved on 16 March 2019. All Directors of the Supervisory Board of EAT NV were appointed to the Board of the Company on the date of its incorporation. Although they were separate legal entities, for governance purposes, the Board regards the date of first appointment to the Supervisory Board of EAT NV as the date of appointment to the continuing business.

As part of the Board's succession plan and following a thorough selection process which included the services of a search company, Kate Cornish-Bowden was appointed to the Board with effect from 2 January 2024.

Julia Bond retired from the Board on 31 January 2024. Julia was appointed as a Director of the Supervisory Board of EAT NV, in April 2014 and upon retirement had served nine years between both entities. On behalf of the Board and all Shareholders I thank Julia for her diligence and wise counsel throughout her period of appointment.

Following the retirement of Julia Bond, Kate Cornish-Bowden was appointed the Company's Senior Independent Director.

The former Chair of the Company, Jack Perry CBE, retired at the conclusion of the Annual General Meeting ("AGM") held on 17 May 2024. He joined the Board of EAT NV, in April 2014 and had served as Chair from April 2015. On behalf of the Board and all Shareholders, I wish to thank Jack for his dedicated leadership and commitment.

Following my assumption of the role of Chair, Kevin Troup was appointed Chair of the Company's Audit and Risk Committee.

As a further part of this plan it is anticipated that Martin Breuer will retire from the Board at the conclusion of the 2025 AGM.

Outlook

Following the invasion of Ukraine and the impact on energy prices and inflation, central banks underestimated the inflation problem forcing them to raise interest rates rapidly. Tighter monetary policy is now taking effect and inflation is falling. European economic growth is gradually improving, although manufacturing continues to lag the services sector.

After these falls in inflation, the interest rate environment in both Europe and the US appears more benign. The European Central Bank has begun to ease monetary policy, as have Switzerland and Sweden; the US Federal Reserve is expected to follow suit later this year. Lower interest rates have historically benefited smaller companies to a greater extent than larger companies. The improvement in the interest rate environment should benefit European smaller companies which are currently valued at historic lows.

A recession can be avoided, although this is a delicate balancing act for central banks. Global geopolitical tensions are a concern, as are the possible repercussions for energy prices. There is also some political uncertainty, including November's presidential election in the US. The second round of voting in France has resulted in a hung parliament, averting a hard-right victory.

In European small and mid-cap equities, there are reasons to remain optimistic. Earnings have been resilient despite higher interest rates and, over the longer-term, share prices tend to follow earnings. Good companies continue to grow, and we see opportunities in the current market. The Managers' focus is on stock selection. Mine and the team favour companies that have a competitive advantage and pricing power generated by brands, patented processes, regulatory barriers to entry and strong market positions. As smaller companies come back into favour later in the cycle we expect to see the rewards.

Stuart Paterson

Chair

The Investment Manager, commenting on the results, said:

Market Backdrop

Sentiment towards equities remained strong over the first half of 2024, and optimism that major economies would navigate a soft landing resulted in gains for European markets. The Company's Benchmark index rose by 3.1% in sterling terms; most of this was achieved in the first quarter. The question of when interest rate cuts would be implemented continued to preoccupy investors, leading to volatility. Geopolitical tension in the Middle East boosted energy prices. Inflation in major markets trended closer to central-bank targets but missed expectations in some instances, so markets scaled back rate-cut expectations. Central banks struck a dovish tone at meetings early in the year but then backpedalled, citing concerns about services inflation and wage growth. The European Central Bank implemented a 25-basis-point rate cut in June. Economic sentiment in the eurozone dipped: June's preliminary composite purchasing managers' index (PMI) fell: services growth slowed while the decline in manufacturing output accelerated. Political uncertainty was key, prompted by weak support for the French and German ruling parties in the EU parliamentary elections. French equities were weak following President Macron's decision to call a French parliamentary election. The first round saw support for Marine Le Pen's far-right party National Rally (RN), but the second round resulted in a broad split between the three main blocs.

Performance

It is pleasing to report that Net Asset Value per share performance was positive, and slightly ahead of the index. Our technology stocks were strong contributors to this performance. Karnov, the Swedish-based provider of online legal information services, led the outperformance. The company received a bid at a 28% premium to the prevailing share price from two private equity groups, agreed by management. However the bid was subsequently rejected by a number of the larger shareholders who felt the level was insufficient, and as a result the private equity groups retreated. Even though this caused some retracement in the share price after the end of the period, the shares are still trading higher than they were before the bid. Operational results have been strong, with the company showing good growth and gaining benefits from new acquisition synergies as well as successful cost reductions. Cash flow generation will enable them to reduce borrowings, which has been a concern for some investors in the past.

Our holding in CTS Eventim has also boosted returns. This German company is the world's leading platform for event ticketing - for concerts, theatres, festivals and sporting events for example. Covid lockdowns were a major drawback for the business model, as ticket sales everywhere for all events plummeted. That phase is now over, and the company is well on the path to recovery, winning market share and new contracts. The company is a major contractor to the Paris Olympic and Paralympic games, and more recently has signed for Los Angeles in 2028. Recent results have beaten expectations, with the Adele tour and other events providing a welcome fillip.

Ringkjoebing Landbobank was another strong contributor to the portfolio's performance over the period. Reluctance by central banks to lower interest rates at too fast a rate opens the door to improved margins. Deposit margins remain low, and this area is not too competitive. But lending margins have been expanding, and this is likely to continue to drive profits. Even in the tougher times, when interest rates were low or negative, the quality of the bank's operations was sufficient to ensure enviable and sustainable returns for many years - growth has exceeded 8% per annum since the global financial crisis in 2007/8.

Cairn, the Irish housebuilder, continued to outperform, as their results reflected ongoing higher demand in the real estate market, together with limited supply which is boosting values. Cairn as one of the largest builders in the Irish market with a substantial landbank is well placed to benefit from its strong market position. The stock pays an attractive and growing dividend which has provided further support for the shares. Dalata Hotels has in contrast suffered owing to shortterm weakness in the hotel trade in Ireland, coupled with more hotel openings creating an excess of supply. The company expects this to reverse as the summer approaches, and the shares look attractively valued after recent falls.

Our industrials performed less well, in a reversal of the previous trend. Carel Industries, which is an Italian-based supplier of technology for heating, ventilation and air conditioning (HVAC) suffered as the demand for heat pumps has faltered, with less governmental support in for example Germany; customer destocking also hampered demand compared to a strong period the previous year. The market for their refrigeration products has stagnated, but we are confident that the worst is over, and Carel is experiencing strong demand from computer data centres, where temperature control is critical to their operation, and where AI is boosting the underlying market. Stabilus, which provides gas springs and motion control products (for example the device that controls the opening of car boots and tailgates), published disappointing results and a profits warning owing to weaker demand for high-end cars. We have been in frequent contact with management, and it is clear that the problems are geographically limited - the company sees good growth in China and Asia more generally, and many of the challenges are limited to the American market.

Remy Cointreau has been a disappointing performer. The spirits sector is challenged by the threat of tariffs, particularly in the key Chinese market, and slowing global demand. Remy also has significant exposure to the US market, where the political backdrop poses threats to importers, and sales are already under pressure. The shares have warranted a premium rating owing to the value of the brands and of the capital stock, but this now means that there is little valuation support and other areas of the luxury goods market offer greater attractions.

Portfolio Activity

Portfolio turnover is in line with long term averages and idea generation continues to be aided by the greater research capabilities at Columbia Threadneedle.

In addition, since the second half of 2023 the level of gearing employed has increased to take advantage of market opportunities. As at 30 June 2024 the level of gearing employed was 6.0% (30 June 2023: 1.4%).

We bought new positions in Prysmian, Moncler and CVC. Prysmian is a provider of cables for the energy and telecommunications industries; the company benefits from its oligopolistic position and strength in the high-margin subsea market (which benefits from growth in offshore wind power). Prysmian is a leader in highvoltage direct current (HVDC) electric power transmission, where demand exceeds supply, giving the company pricing power and a strong order book. Moncler is a company which is well known to the Columbia Threadneedle team and boasts brand strength; the company is performing strongly in the Chinese market, where its retail presence is key. The Stone Island sportswear acquisition continues to boost returns, with a restructured collection and greater focus on events to drive future sales. CVC is one of the world's leading private equity houses, and the recent IPO gave us a rare opportunity to gain exposure to this sector. The shares continue to trade at a healthy premium to the issue price.

We sold our position in Merlin Properties, as the share price had been strong and the valuation no longer reflected the risks to property valuations posed by higher levels of interest rates, particularly for retail shopping centres. The market for real estate for data centres, their other area of specialisation, is more resilient, but capital investment will be required to capitalise on this.

We reduced the holdings in Ringkjoebing Landbobank and Karnov following share price strength, and entirely disposed of our position in Remy Cointreau.

Outlook

Europe suffered a worse energy shock than the US from the Ukraine war. Inflation soared resulting in real incomes falling significantly. However, natural gas prices have now fallen approximately 90% from the highs of mid-2022. A cautious European Central Bank cut interest rates by only 25 basis points in June, as evidence begins to emerge that inflation has been brought under control, and real wages have begun to recover. To further assist consumption, European households still retain post-pandemic savings, equivalent to 12.5% of GDP.

This improving macroeconomic backdrop should support a recovery in European equities, and smaller companies in particular.

There are reasons for some caution as the political backdrop is far from stable. Support for Ukraine, and US relations with China, which is critical for European trade, remain contentious, and will be dependent on the outcome of the US Presidential election in November. A Trump victory could bring threats of US tariffs for European companies exporting to China and increase global trade tension more generally. European domestic politics also faces uncertainties. The hung election result in France means no government has yet been formed. Both the left and right wing in France want to increase spending even though debt remains high across Europe: France has a debt-to-GDP ratio of 112%, Italy 137%. France's public sector deficit will be 5% in 2024 and 2025.

Cyclical factors could also benefit European stocks. Capital expenditure is refocusing from China to closer to home. Tax cuts and subsidies including the €270 billion from Europe's Green Deal Industrial Plan, will provide a welcome boost. Labour markets have held up well, and while they may look less rosy if interest rate cuts are too slow, this is more of a concern in the US than in Europe.

European smaller companies have underperformed in the recent difficult backdrop and are now very cheap relative to history and to larger companies. Many investors have shunned the sector and are now underweight. We are cautiously optimistic for the future, and looking to exploit the opportunities as the economic environment improves.

Mine Tezgul

Lead Investment Manager

Columbia Threadneedle Investment Business Limited

Forward -looking statements

This interim report may contain forward-looking statements with respect to the financial condition, results of operations and business of the Company. Such statements involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially from those expressed or implied by forward-looking statements. The forward-looking statements are based on the Board's' current view and on information known to them at the date of this report. Nothing should be construed as a profit forecast.

Directors' Statement of Principal Risks and Uncertainties

Most of the Company's principal risks and uncertainties are market related and no different from those of other investment trusts investing in listed equities. They are described in more detail under the heading "Principal Risks and Changes in the Year" within the Strategic Report in the Company's Report and Accounts for the year ended 31 December 2023.

The principal risks identified in the Report and Accounts for the year ended 31 December 2023 were:

·   Poor absolute and/or relative performance;

·   Relevance/attractiveness of the investment strategy and policy;

·   Risk of failure of the Manager's business or loss of senior staff;

·   Regulatory and compliance failure (including ESG reporting);

·   Service provider failure;

·   The sustainability of the Company's dividend policy; and

·   Geopolitical issues and their impact.

Since the publication of the Report and Accounts for the year ended 31 December 2023, the Directors have upgraded cyber related business interruption to a principal risk.

At present the global economy continues to suffer considerable disruption due to the war in Ukraine, events in the Middle East, disputes in the South China Sea and the after-effects of a high inflation environment. 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.

It is also noted that:

·    An analysis of the performance of the Company since 1 January 2024 is included within the Chair's Statement and the Investment Manager's Review above.

·    The Company has a multi-currency loan with a maximum facility of €60 million with The Royal Bank of Scotland International (London Branch). As at 30 June 2024 €35.0 million was drawn down, which represents gearing of 6.0%.

·    Note 4 below details the Board's consideration for the continued applicability of the principle of Going Concern when preparing this report.

On behalf of the Board

Stuart Paterson

Chair

7 August 2024

Directors' Statement of Responsibilities in Respect of the Half-Yearly Financial Report

In accordance with Chapter 4 of the Disclosure and Transparency Rules the Directors confirm, that to the best of their knowledge:

·          the condensed set of financial statements have been prepared in accordance with applicable UK-adopted International Accounting Standards on a going concern basis and give a true and fair view of the assets, liabilities, financial position and return of the Company;

·          the Chair's Statement, Investment Manager's Review and the Directors' Statement of Principal Risks and Uncertainties (together constituting the Interim Management Report) include a fair review of the information required by the Disclosure Guidance and Transparency Rule ('DTR') 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year and their impact on the financial statements;

·          the Directors' Statement of Principal Risks and Uncertainties shown above is a fair review of the principal risks and uncertainties for the remainder of the financial year; and

·          the half-yearly report includes a fair review of the information required by DTR 4.2.8R, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during the period, and any changes in the related party transactions described in the last Annual Report that could do so.

On behalf of the Board

Stuart Paterson

Chair

7 August 2024

Condensed Statement of Comprehensive Income

The total column of this statement represents the Company's Income Statement and Statement of Comprehensive Income, prepared in accordance with UK-adopted International Accounting Standards. The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies.

   All revenue and capital items in the above statement derive from continuing operations.

Condensed Statement of Changes in Equity

Condensed Statement of Financial Position

Condensed Statement of Cash Flows

Notes

1      Basis of preparation

These condensed financial statements, which are unaudited, have been prepared on a going concern basis in accordance with the Companies Act 2006, UK-adopted International Accounting Standards and the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by the AIC.

All of the Company's operations are of a continuing nature. The functional currency of the Company is the euro and presentational currency is the pound sterling as the Board believe this will provide clarity of the Company's financial statements for its Shareholders, the overwhelming majority of whom are located in the United Kingdom.

All transactions during the period are translated on the date of execution and the Statement of Financial Position as at the period end date.

The accounting policies applied in the condensed set of financial statements are set out in the Company's annual report for the year ended 31 December 2023.

2      Earnings per share

Earnings per ordinary share attributable to Shareholders reflects the overall performance of the Company in the period.  Net revenue recognised in the first six months is not necessarily indicative of the total likely to be received in the full accounting year.

3      Dividend

The fourth interim dividend of 1.475p per share in respect of the year ending 31 December 2024 will be paid on 31 October 2024 to eligible Shareholders on the register. The total cost of this dividend based on 360,069,279 shares in issue is £5,311,000.

4      Going concern

In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. They have also considered the Company's objective, strategy and policy, the current cash position of the Company, the availability of the loan facility and compliance with its covenants and the operational resilience of the Company and its service providers.

At present the global economy continues to suffer disruption due to the war in Ukraine, events in the Middle East, disputes in the South China Sea and the after-effects of a high inflation environment and the Directors have given careful consideration to the consequences for this Company.

The Company has a multi-currency loan with a maximum facility of €60.0 million with Royal Bank of Scotland International (London Branch). As at 30 June 2024 €35.0 million (£29.7 million) was drawn down.

The Company has a number of banking covenants and at present the Company's financial position does not suggest that any of these are close to being breached. The primary risk is that there is a very substantial decrease in the Net Asset Value of the Company in the short to medium term.

As at 6 August 2024, the latest practicable date before the publication of this report, borrowings amounted to €35.0 million (£30.1 million). This is in comparison to a Net Asset Value of €396.4 million (£341.0 million). In accordance with its investment policy the Company is invested mainly in readily realisable listed securities. These can be sold if necessary, to repay the loan facility and fund the cash requirements for future dividend payments.

The Company operates within a robust regulatory environment. The Company retains title to all assets held by the Custodian. Cash is held with banks approved and regularly reviewed by the Manager and the Board.

The Company's annual dividend, which is declared in sterling, is determined by reference to the year-end Net Asset Value. The Company manages any sterling/euro exchange rate exposure which may arise from the declaration of a sterling denominated dividend by entering into specific matched forward currency hedging contracts. As at 30 June 2024 the Company had a Distributable Reserve of £273.9 million.

Based on this information the Directors believe that the Company has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of these financial statements. Accordingly, these financial statements have been prepared on a going concern basis.

5      Results

The results for the half-year ended 30 June 2024 and 30 June 2023, which are unaudited, constitute non-statutory accounts within the meaning of Section 434 of the Companies Act 2006. The latest published accounts which have been delivered to the Registrar of Companies are for the year ended 31 December 2023; the report of the independent auditors thereon was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The condensed financial statements shown above for the year ended 31 December 2023 are an extract from those accounts.

6      Half-yearly report and accounts

The report and accounts for the half-year ended 30 June 2024 will be posted to Shareholders and made available on the website www.europeanassets.co.uk shortly. Copies may also be obtained by mailing the Company's registered office, Cannon Place, 78 Cannon Street, London EC4N 6AG.

By order of the Board

Columbia Threadneedle Investment Business Limited, Secretary

6th Floor, Quartermile 4, 7a Nightingale Way, Edinburgh EH3 9EG

7 August 2024