/Equities/XLON/GSCT/RNS

Half-Year Report and Dividend Announcement

RNS Number : 6442L

Global Smaller Cos. Trust PLC (The)

16 December 2025

LONDON STOCK EXCHANGE ANNOUNCEMENT

The Global Smaller Companies Trust PLC

Unaudited Statement of Results

for the half year ended 31 October 2025 and Interim

dividend announcement

Legal Entity Identifier: 2138008RRULYQP8VP386

Information disclosed in accordance with Disclosure Guidance and Transparency Rule 4.2

SUMMARY OF UNAUDITED RESULTS FOR THE HALF YEAR ENDED 31 OCTOBER 2025 AND INTERIM DIVIDEND ANNOUNCEMENT

· Net Asset Value ("NAV") with debt at fair value increased to 190.7p per share, giving a total return of 15.6% compared to the Benchmark total return of 21.6%.

· The share price ended the period at 168.6p, delivering a total return to shareholders of 15.1%.

· The Board announces an interim dividend in respect of the financial year to 30 April 2026 of 0.70p per ordinary share. This dividend is payable on 29 January 2026 to shareholders on the register on 30 December 2025, with an ex dividend date of 29 December 2025.

Date: 16 December 2025

Contact: Nish Patel

Columbia Threadneedle Investment Business Limited

020 7464 5000

Chairman's Review

Performance and the Discount

By following its philosophy of conservatively investing in good quality, growing businesses when they become available at an attractive valuation, the Company has delivered good investment returns over the longer term and a dividend which has risen for 55 consecutive years. The six months ended 31 October 2025 presented an environment that was challenging for this style of investment, instead particularly rewarding more speculative investment or investment in companies already at elevated valuations. The Company still delivered a strong rise in its NAV in the period, but underperformed its Benchmark. Taking the Company's long-term liabilities at fair value, the NAV per share rose to 190.7p, a 15.6% total return for the six months, compared to a return of 21.6% from the Benchmark. The Lead Manager's review, starting on page 4, provides detail on the various drivers of performance over the period.

The Company's discount widened, ending the period at 11.6%. The share price rose by 13.5% in the six months to 168.6p, giving a total return of 15.1% after adding dividends paid in the period.

The Board continued to use its buyback powers actively to address the discount, and the Company repurchased 11.4m shares for treasury over the six months under review at an average discount to NAV of 10.8%, enhancing the NAV by 0.3% in the process.

The Company also continued its marketing and PR efforts with the purpose of attracting buyers of its shares. While still maintaining global coverage, the Lead Manager has continued a process of reducing the number of holdings in each region with the aim of enhancing investment returns. Further opportunities have been identified in this regard.

Economic Backdrop

The World economy showed remarkable resilience in the period with growth surpassing expectations. Activity continued to be healthy amongst higher income consumers because of rising asset prices. In contrast, lower and middle income cohorts remained more price sensitive and selective in their consumption.

Labour markets softened over the summer, with younger workers particularly affected, while sectors sensitive to interest rates such as housing, continued to struggle. Despite inflation remaining above central bank targets, interest rates were cut in several regions as authorities sought to maintain economic growth. For the Federal Reserve, matters were complicated by it coming under increasing political pressure to be more aggressive in easing monetary policy.

Geopolitical developments continued to shape sentiment and impact share prices in the period. While the majority of tariffs that were announced in early April by the US Government have been subsequently brought down from the initially declared levels, they are still at the highest levels since the 1930's. As well as altering trade flows to and from the US, displacement effects have the potential to impact local trade patterns globally and lead to higher inflation. Armed conflicts, changes in national political landscapes, persistent inflation, development of artificial intelligence, interest rate decisions of central banks, currency movements and fluctuations in energy prices all added to a complex investment environment, raising both risks and opportunities.

Regional economic performance varied considerably across the globe. The US economy benefited from substantial artificial intelligence (AI) related investments and pre-tariff purchasing activity that boosted consumption. Sentiment remained weak in the UK, especially ahead of the Budget. Inflation in the UK lingered but encouragingly it showed signs of stabilising at the end of the period. Europe's economic recovery progressed more slowly than expected, hampered by US tariffs and earnings pressure from a stronger Euro. In contrast, a falling Yen helped Japanese companies and continued to support the country's tourism sector. Inflation was also persistent in Japan. The Emerging Markets were affected by uncertainty over trade, none more so than China. However, this was partially offset by a weakening US Dollar. Economic stimulus in China along with investment by the country's technology sector led to improved sentiment amongst Chinese businesses and consumers. India saw weakness amongst its middle and lower income consumers and interest rates were cut in response to this.

Dividends

While revenue returns per share rose by 0.7%, in comparison to the six months to 31 October 2024, the Board has decided to maintain the interim dividend rate at 0.70p per share. Shareholders on the register on 30 December 2025 will receive this dividend on 29 January 2026.

Gearing

Gearing ended the six months at 4.5%, slightly down on the 5.3% at the end of April 2025, as we continue to take a cautious approach to the use of leverage for now.

Cancellation of the Share Premium Account and Capital Redemption Reserve

Following approval from shareholders at the Company's Annual General Meeting held on 15 August 2025, the Company has completed the court process required to cancel its share premium account and capital redemption reserve (the 'Reduction of Capital'). These reserve accounts were non-distributable. Cancelling them creates additional distributable reserves which will provide the Company with additional flexibility, if required, to fund share buy-backs, dividends and other returns of capital in accordance with applicable law. This Reduction of Capital became effective on 4 December 2025.

Change of Corporate Broker

Following the period end, on 5 December 2025, the Board appointed Investec Bank plc as the Company's sole corporate broker.

Board Changes

Following the Annual General Meeting on 15 August 2025, the Chairman Anja Balfour retired from the Board and I was pleased to accept the Board's invitation to become Chairman. Anja was a director of your Company since 1 June 2015 and served as Chairman since 30 July 2020. I would like to thank Anja for her significant contribution and commitment to the Company throughout this time. Following Anja's retirement I have also become Chairman of the Nomination Committee. Bulbul Barrett has been appointed Senior Independent Director.

Graham Oldroyd

Chairman

15 December 2025

Lead Manager's Review

Equity Market background

After a sharp sell-off in April, equity markets rallied strongly in the six months ended 31st October 2025 with the Benchmark up 21.6% in the period. Investors anticipated backtracking by the US government on tariffs that were announced on 'Liberation Day.' This optimistic shift in trade policy expectations significantly boosted market sentiment. Equity markets were also buoyed by enthusiasm over the AI sector, especially after the announcement of large investments in companies within this area and after several AI related businesses announced intentions to expand their computing capacity significantly. Markets also climbed in anticipation of interest rate cuts by the Federal Reserve after the US labour market showed signed of weakening.

In terms of returns, Asia ex Japan led the way with its smaller companies index surging 28.1%. North America once again delivered strong gains and its market climbed by 25.0% albeit returns to UK investors were reduced somewhat due to the weakness in the Dollar. There were also healthy returns in Japan, the UK and mainland Europe. The best performing sector by far was technology. This was followed by industrials and energy. The laggards were consumer staples, real estate and consumer discretionary. Corporate earnings were generally better than expected in most regions. Equity market valuations of smaller companies expanded over the period. Renewed animal spirits lifted capital markets activity and there was a noticeable pick up in takeovers and new listings.

Over the six months, the market became increasingly speculative with the lowest quality companies significantly outperforming the highest quality businesses. Unprofitable smaller companies rallied strongly as did those on the highest valuations. This was particularly challenging for the Company's investment philosophy of taking a long term, conservative approach to investing in good quality, growing businesses when they become available at an attractive valuation.

Despite interest rates being cut, longer dated government bond yields remained high, reflecting concerns over the size of government budget deficits and a potential resurgence in inflation. These factors also supported the gold price, which surged 22% over the six month period.

Regional portfolio performance

The table below shows how the different geographical regional portfolios performed over the period versus the local smaller companies comparator indices, with all return numbers measured in Sterling. Returns from the North American, UK and the Rest of World portfolios were behind their local smaller company indices.

Geographical performance (total return sterling adjusted)
for the half year ended 31 October 2025
	Portfolio	Local smaller companies index
North America	+13.5%	+25.0%
UK	+11.1%	+14.6%
Europe	+16.4%	+13.8%
Japan	+19.3%	+16.4%
Rest of World	+19.7%	+28.1% (Asia Pacific ex Japan) +17.6% (Latin America)
Source: Columbia Threadneedle Investments

Summary of performance from the Company's Investments

Financial results from companies in the aerospace and defence sector revealed strong demand from customers as the West continues to increase its expenditure on defence after years of under-investment. Businesses linked to expenditure on AI and data centres also delivered impressive earnings. Positive sentiment in this area extended to adjacent industries such as power generation and nuclear. Whilst the healthcare sector faced continued pressure, we began to see signs of stabilisation in spending on research and development. Takeover activity was vibrant, with five of our companies receiving takeover bids in the period.

In an environment of higher interest rates, housing related companies suffered from depressed transaction volumes. In the chemicals sector, economic uncertainty and price competition from China induced a weakening in industry volumes and pricing. After significant increases in recent years, the insurance industry saw a reduction in the growth rate of premiums. Consumer staples and adjacent sectors revealed diminished demand in the period as consumers increasingly migrated toward lower priced alternatives. Whilst tariffs created uncertainty and delayed the initiation of new projects, confidence gradually returned as the period progressed. Some companies were seen by the market as potentially being disrupted by AI. In many cases these concerns appeared to be overdone.

On the pages that follow there are tables outlining for each region the largest contributors to, and detractors from performance over the six months and reasons for those movements.

Asset allocation changes

The table below shows the exposure of the portfolio across the different markets. Over the period, our exposure to the Rest of World, Europe and Japan increased, whilst the UK and North America came down. This reflected market movements and purchase and sale activity in the period. Relative to the Benchmark our overweight positions in Europe and Japan climbed, as did our underweight positions in North America and the UK. In the Rest of World we moved from being underweight to almost neutral. Over the six-month period asset allocation across the regions had a very slight negative impact on the Company's performance relative to its Benchmark.

Geographical distribution of the investment portfolio
	Portfolio weighting
	31 October 2025 %	30 April 2025 %
North America	43.1	43.5
UK	18.2	19.6
Rest of World	16.1	14.9
Europe	12.1	11.9
Japan	10.5	10.1
Source: Columbia Threadneedle Investments

North American Portfolio

Largest contributors to performance

Company	Business activity	Share price movement⁽¹⁾	Contribution to relative performance of regional portfolio⁽²⁾	Reasons for movement
Curtiss-Wright	Producer of mission-critical components for the aerospace, defence, general industrial and power sectors.	75.8%	1.3%	Strong growth from the company's aerospace, defence and power businesses. Sales and earnings guidance were raised. Was seen as a beneficiary of increased spending on nuclear power generation.
Boot Barn Holdings	Retailer of western and work wear.	84.8%	1.1%	Acceleration in same-store sales growth led to better-than-expected earnings. Long term store count guidance raised. Concerns over tariffs receded.
Advanced Energy Industries	Producer of electrical components that focus on power conversion.	111.9%	0.7%	Higher sales and earnings in the company's data center business. Stabilisation seen in the group's industrial and medical segments.
The Ensign Group	Operator of skilled nursing and rehabilitative care facilities and provider of home health and assisted living services.	42.1%	0.5%	Higher occupancy lifted revenues. Further progress was made on the company's acquisition strategy. Funding environment remained healthy.
Standex International	A diversified manufacturer that specialises in electronics, engineering technologies, scientific equipment and industrial engraving services.	68.3%	0.5%	New product introductions and a recovery in the company's electronics business led to higher earnings forecasts.