LONDON STOCK EXCHANGE ANNOUNCEMENT

 INTERNATIONAL BIOTECHNOLOGY TRUST PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2025

 

 

Information disclosed in accordance with DTR 4.1

 

The Company's Annual Report and Financial Statements for the year ended 31 August 2025 is being published in hard copy format and an electronic copy will shortly be available to download from the Company's web pages: www.ibtplc.com. Please click on the following link to view the document: www.ibtplc.com.

 

 Key highlights

·	The Company's share price total return rose by 3.5% in the year under review, outperforming the NASDAQ Biotechnology Index (the "Reference Index"), which fell by 6.0%.
·	The Company's NAV total return rose to 0.7% in the year under review. On an annualised basis over one, three, five and ten years to 31 August 2025, the NAV total return has outperformed the Reference Index.
·	The Company's dividend policy, last approved in December 2024, pays shareholders 4% of the Company's NAV through two semi-annual distributions; in 2025, dividends of 15.56p and 16.17p per share were paid, delivering a 4.7% yield as at 31 August 2025, with the policy to be proposed again at the December 2025 AGM.
·	Five quoted portfolio holdings in late-stage businesses with clinically approved assets were acquired during the year, taking the total since 2020 to 29, reflecting the portfolio's focus on de-risked companies with clear commercial pathways.
·	The Company's unquoted allocation, in particular, the investments in SV Fund VI and SV BCOF, continued to perform well during the year. The Board has decided to maintain the strategic allocation to 5 -15% of assets in unquoted early-stage biotech via unlisted funds, starting with a £10 million commitment (c.4% of assets) to a new limited partnership with Schroders Capital, announced on 2 October 2025.

 

 Investor presentation

Our Portfolio Managers, Ailsa Craig and Marek Poszepczynski will be presenting at an investor webinar on 6 November 2025 at 2.00 pm (which can be signed up to via the following link: www.schroders.events/IBTFY25).

 

Kate Cornish-Bowden, Chair of International Biotechnology Trust plc, commented:

"I am pleased to report that on an annualised basis over one, three, five and ten years to 31 August 2025, the Company's NAV total return has outperformed the Reference Index. In the latter half of our financial year, the sector has been performing well and there are good reasons to expect this to continue. The need for cash-rich pharmaceutical companies to maintain growth and adapt to potential regulatory changes has led to a surge in M&A activity in recent months. The overall M&A activity trend reflects a shift by big pharmaceutical players to strengthen pipeline positions in high-value therapeutic areas such as oncology, neuroscience, and rare diseases.

The outcome of the drug pricing debate will take more time to resolve, but the convergence of the transformational progress in scientific innovation, the impact of artificial intelligence on trials and approvals, and increasing demand for treatments should make biotechnology a lucrative investment for shareholders in the years to come."

 

The Company has submitted a copy of its Annual Financial Report to the National Storage Mechanism and it will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

 

 

Enquiries:

Schroder Investment Management Limited

Charlotte Banks/Kirsty Preston (Press)	020 7658 6000
Natalia de Sousa (Company Secretarial)	020 7658 6000

 

Chair's Statement

"I am pleased to report that on an annualised basis over one, three, five and ten years to 31 August 2025, the Company's NAV total return has outperformed the Reference Index."

Dear Shareholders
I am very pleased to report that the Company's share price total return rose by 3.5% in the year under review, significantly outperforming the NASDAQ Biotechnology Index (the "Reference Index"), which fell by 6.0%. The net asset value (NAV) total return of the Company was 0.7% reflecting a slight narrowing of the discount at which the shares trade to asset value during the financial year. All figures are on a sterling adjusted basis with dividends reinvested.

It is also positive to note that on an annualised basis over one, three, five and ten years to 31 August 2025, the Company's NAV total return has outperformed the Reference Index across all the equivalent periods.

This year's performance has been achieved in a very volatile year in which the Reference Index fell by over 22% to a low in April this year, followed by a recovery of 25% at the financial year-end. The consequences of Liberation Day and global tariffs sent markets into a downward spiral and healthcare was no exception. The recovery in the biotechnology sector was precipitated by an uptick in mergers and acquisitions (M&A) from pharmaceutical companies adapting to the new environment, the realisation that certain companies with novel science would be unlikely to be impacted by headline tariffs and early signs of improving confidence in the funding environment for biotechnology companies.

QUOTED PORTFOLIO
The NAV of the quoted portfolio, sterling adjusted with dividends reinvested, rose by 3.8% during the year under review, strongly outperforming the Reference Index, which fell by 6%.

During the first half of the financial year, investors digested the appointment of Robert F Kennedy as US Health Secretary with increasing concern as the news about cuts to healthcare funding, reduced headcount at regulatory agencies, potential tariffs and talk of Most Favored Nation (MFN) drug pricing added to the uncertainty.

The sector has witnessed a recovery in the second half of the year, as fears have subsided with regards to the changes made at the regulatory level. Our Portfolio Managers have continued to focus on companies with the strongest potential to deliver the most innovative science and identify the revenue generating biotechnology companies likely to become targets of larger pharmaceutical companies seeking new growth.

The biggest contributor to performance during the period came from uniQure, the Netherlands listed gene therapy company. UniQure is developing a therapeutic treatment, AMT-130 which has the potential to slow the progression of the rare neurodegenerative Huntington's Disease. Patients with this fatal disease have very few treatment options. The development programme received two regulatory designations during the year: agreement on a Food and Drug Administration (FDA) Accelerated Approval pathway and Breakthrough Therapy designation. Post the year-end, the company announced additional positive pivotal data and the Portfolio Managers sold the position following a further significant rise in the company's valuation.

Once again, the Portfolio Managers have proved very adept at identifying revenue generating companies which have become acquisition targets. Amongst the five portfolio holdings acquired this year, US-listed Intra-Cellular Therapies, was the most significant. Intra-Cellular was the largest holding in the Company's portfolio when it was bid for by Johnson & Johnson in January 2025. Intra-Cellular's lead treatment, Caplyta, is an FDA-approved treatment for depression and schizophrenia. Johnson & Johnson's $14.6 billion bid for Intra-Cellular, which was announced in January and closed in April 2025, was the largest biopharma transaction in the past 12 months and signalled the beginning of renewed activity in the industry this year.

The underweight position in the highly valued large-cap pharmaceutical company Regeneron, which suffered from a clinical trial failure in its chronic obstructive pulmonary disease (COPD) treatment this year, as well as ongoing competitive pressure in its flagship Eylea franchise, also contributed to our performance.

The underweight position in the large-cap biotechnology anti-infectives company Gilead detracted from performance. Gilead has continued to report strong results from sales of its human immunodeficiency virus (HIV) medication, but the Portfolio Managers believe its dependence on the HIV franchise makes the company vulnerable in an increasingly politicised regulatory environment.

UNQUOTED PORTFOLIO
The unquoted portfolio, which represented 7.7% of the Company's investments at year-end, is invested primarily in two venture capital funds managed by SV Health Investors LLP (SV); SV Fund VI and SV Biotech Crossover Opportunities Fund (BCOF). These two funds have delivered strong returns for the Company's shareholders.

SV Fund VI, which represented 3.1% of the Company's investments at the end of the financial period, is a mature venture capital fund which is 93% drawn down. During the year under review, SV completed follow-on investments in Jet Health, TRex Bio, Ribometrix, Enara Bio, Sitrix and Artios Therapeutics. The fund received proceeds from sold holdings Endotronics and Caraway Therapeutics. Since inception in 2016, the fund has achieved a net internal rate of return (IRR) of 14.3%.

SV BCOF, which represented 3.5% of the Company's investments at the end of the financial period, was launched in 2022 and is 39% drawn down. In the last year, SV BCOF has seen a highly successful follow-on fundraising from Draig Therapeutics. The investment partners received clinical milestone income from the recently exited EyeBio. During the year, SV added new holdings to the BCOF portfolio including Advancell, Artios Therapeutics and Imbria. Thanks to excellent partial realisations from BCOF's initial investments in Nimbus Therapeutics and EyeBio, the fund has recorded a net IRR of 89% since inception.

Of the small number of directly held legacy assets, the most significant is the discounted value of the royalty streams from Ikano Therapeutics which was sold to Belgian listed UCB in 2006. It was pleasing to see significant payments of £1,474,787.16 received in respect of Ikano Therapeutics during the year. This holding represents 0.9% of total investments as at 31 August 2025.

PARTNERSHIP AGREEMENT WITH SCHRODERS CAPITAL
Following positive feedback from shareholders, it is the Board's intention to maintain investments of 5-15% of the Company's assets in unquoted, early-stage, innovative biotechnology opportunities utilising unlisted funds not normally available to retail investors. On 2 October 2025, we announced the establishment of a new limited partnership with Schroders Capital (the "Partnership"), through which the Company intends, over time, to invest in further unquoted biotechnology opportunities. Schroders Capital brings significant expertise in US and European venture capital and growth equity investments within the biotechnology and life science sectors. This new Partnership enhances the Company's ability to access unquoted funds diversified by manager, vintage and geography. The initial commitment of £10 million represents approximately 4% of the current company asset value.

DIVIDENDS
The Company's dividend policy, which was last approved at the Annual General Meeting (AGM) in December 2024, is to make dividend payments equivalent to 4% of the Company's NAV, as at the last day of the preceding financial year ending 31 August, through two semi-annual distributions. This enables shareholders to gain access to this exciting growth sector without sacrificing the security of regular income. The first dividend for the year of 15.56p per share was paid on 24 January 2025, and the second payment of 16.17 pence per share, was made on 22 August 2025. This equates to a dividend yield of 4.7% as at 31 August 2025.

The dividend policy will once again be proposed to shareholders at the Company's AGM in December 2025.

DISCOUNT MANAGEMENT
Over the last twelve months, the widespread trend across the investment trust industry of companies' share prices trading at a discount to NAV has continued, and the biotechnology and healthcare sector is no exception. The Board keeps the Company's share price discount to NAV under close review and is committed to buying back its shares to help manage the position. The Board bought back 3,107,419 shares to be held in treasury during the year, and the discount narrowed slightly from 11.3% to 8.9%. The Board believes that buying back shares at a discount to NAV is not only accretive to our shareholders but demonstrates our confidence in the underlying fundamental value of our investments.

COSTS AND FEES
I am pleased to report that Schroders has agreed to a reduction in the management fee for the quoted portfolio. From 1 September 2025, the fee will fall from 0.70% to 0.65% per annum.

The Board has recently approved an amendment to the basis on which a performance fee is payable. The performance fee remains at 10% of any relative outperformance above the Reference Index, subject to a hurdle rate of 0.5%. Previously, the performance fee was payable only if a positive NAV per share return was achieved over the relevant calculation period. If such a return was not achieved, payment of the performance fee was deferred until the next calculation period in which a positive NAV per share return was recorded. This clause has now been amended to better reflect the contribution of dividends, predominantly paid out of capital, to shareholders' overall NAV returns. Under the revised terms, the performance fee will be payable only when a positive total NAV per share return has been achieved. This is defined as the movement in the NAV per share, adjusted to include the sum of any dividends reflected in the Company's NAV over the relevant calculation period. If a positive total NAV per share return is not achieved, payment of the performance fee will be deferred until the next calculation period in which such a return is achieved. The Board believes the newly amended terms will deliver greater alignment between the Manager's incentive and shareholders' interests.

For the year ended 31 August 2025, a performance fee of £2,366,000 has accrued to the Manager in respect of the quoted portfolio's performance. In addition, a performance fee of £299,000 has accrued to SV Health due to the performance of the unquoted portfolio.

Please refer to the Directors' Report for further information.

BOARD SUCCESSION
As previously reported, Caroline Gulliver resigned from the Board on 30 April 2025, and Alexa Henderson, who joined the Board on 1 January 2025, has succeeded Caroline as Chair of the Audit Committee. I would like to record the Board's thanks for Caroline's ceaseless work on behalf of our shareholders. The Board continues to review its composition and effectiveness, as well as to plan for orderly succession.

CONTINUATION VOTE
In accordance with the Company's Articles of Association, a biennial continuation vote will be put to shareholders at the Annual General Meeting (AGM). The Board believes that the Manager is well qualified, has delivered strong results for shareholders and the investment mandate remains appropriate. Using the advantages of an investment trust continues to be a compelling way of accessing growth opportunities in the undervalued biotechnology sector. The Board unanimously recommends that shareholders vote in favour of continuation, and the Directors intend to vote their shares accordingly.

WEBINAR
On 6 November 2025, the Company's Portfolio Managers will be presenting to shareholders at a webinar at 2.00 p.m. To register your interest to attend this webinar please visit www.schroders.events/IBTFY25, where the facility to watch the recorded webinar afterwards will also be available.

AGM
The AGM will be held on Friday, 12 December 2025 at 12.00 noon at the offices of Schroders at 1 London Wall Place, London EC2Y 5AU. Our Portfolio Managers will present to shareholders at the AGM, and attendees will be able to ask questions in person and meet the Directors. Details of the formal business of the meeting are set out in the Notice of Meeting in the full Annual Report and Financial Statements.

All shareholders are recommended to vote by proxy in advance of the AGM and to appoint the Chair of the meeting as their proxy. This will ensure that shareholders' votes will be counted even if they (or any appointed proxy) are not able to attend.

If shareholders have any questions for the Board, please write, or email using the details below. The questions and answers will be published on the Company's web pages before the AGM.

To email, please use: [email protected] or write to us at the Company's registered office address: Company Secretary, International Biotechnology Trust plc, 1 London Wall Place, London, EC2Y 5AU.

For regular news about the Company, shareholders are also encouraged to sign up to the Manager's investment trusts update, which can be found at: https://schro.link/ibt_subscribe.

OUTLOOK
Although the Portfolio Managers have done an excellent job significantly outperforming the Reference Index, political uncertainty has led to the biotechnology and healthcare sectors lagging the wider equity indices for the past few years, resulting in unprecedented low relative valuations. In the latter half of our financial year, the sector has been performing well and there are good reasons to expect this to continue.

The need for cash-rich pharmaceutical companies to maintain growth and adapt to potential regulatory changes has led to a surge in M&A activity in recent months. The overall M&A activity trend reflects a shift by big pharmaceutical players to strengthen pipeline positions in high-value therapeutic areas such as oncology, neuroscience, and rare diseases.

The outcome of the drug pricing debate will take more time to resolve, but the convergence of the transformational progress in scientific innovation, the impact of artificial intelligence (AI) on trials and approvals, and increasing demand for treatments should make biotechnology a lucrative investment for shareholders in the years to come.

KATE CORNISH-BOWDEN
Chair
5 November 2025

 

Investment Manager's Review

We are pleased to present the Portfolio Managers' Report for the year ended 31 August 2025. Despite a challenging backdrop, the Company delivered a positive NAV total return of 0.7%, compared with a 6.0% decline for the Reference Index (all figures are on a sterling adjusted basis). This marks the fourth consecutive year of outperformance of the Reference Index for the Company, each delivered across different market conditions. Over one, three, five and ten years to 31 August 2025, the Company remains ahead of its Reference Index.

In share price terms, the Company delivered a positive total return of 3.5% (sterling adjusted), which reflects a slight narrowing of the discount to NAV to 8.9% at the financial year-end. Income continues to form an important part of the Company's total return. In accordance with our dividend policy of paying dividends equivalent to 4% of the Company's NAV, shareholders received two dividends totalling 31.8p per share during the year. This reflects growth of 12.0% on the prior year's dividend. The cost of the dividend was more than twice covered by cash received from portfolio company acquisitions during the year and provided an opportunity for us to share some of the gains from mergers and acquisitions (M&A) activity directly with our shareholders.

MARKET OVERVIEW
The biotechnology sector experienced two distinct phases during the period under review. The first half, as noted in the Company's Half Year Report, was characterised by heightened uncertainty as markets awaited the outcome of the US Presidential election, followed by a rally in late 2024 once the result was known. Expectations of a more pro-business stance under the new administration echoed the strong performance seen during the previous Trump Presidency. This optimism was short-lived, however, as the policy agenda quickly shifted towards tariffs, and the appointment of Robert F Kennedy Jr as Secretary of Health and Human Services, introduced renewed unease due to his controversial views on vaccines.

Market volatility intensified after President Trump's 'Liberation Day' tariff announcements, which created uncertainty across all sectors and raised fears of a trade-induced global recession. At the same time, the sudden departure from the US regulator, the FDA, of Peter Marks, an industry-friendly figure who had overseen the approval process for many innovative treatment modalities, raised concerns about the FDA's priorities. These worries were compounded by announcements of significant headcount reductions at the FDA and other healthcare agencies, fuelling fears of disruption to the drug approval process. Sentiment was further unsettled by the revival of the MFN pricing model via an executive order, which proposed benchmarking US drug prices against the lowest paid in other developed markets - a move perceived as potentially undermining the commercial viability of future therapies.

Against this backdrop, the Reference Index reached its low point for the period in mid-April. Thereafter, a steady recovery took hold, supported by a step back from worst-case scenarios on trade and a more constructive policy environment for the healthcare sector. Investors increasingly recognised that biotechnology, as the engine room of drug innovation for the sector, was less exposed to the threat of pricing reform than large-cap pharmaceutical companies. The continued pace of FDA approvals and evidence of resilience in the innovation pipeline helped restore confidence in the sector's long-term fundamentals. Despite this turbulence, drug approvals have continued, with 27 new drugs approved in the first eight months of 2025.

In a longer-term context, the Reference Index is now around 40% above the lows seen in 2022 but remains c.15% below its 2021 peak. This highlights both the progress made and the potential for a sustained recovery should current trends continue. Innovation in the biotechnology sector continued at pace, with more than 70% of all new FDA approvals in 2024 originating from biotechnology companies, underlining the sector's central role in driving drug development (please refer to chart 1 in the full Annual Report and Financial Statements).

Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise.

PERFORMANCE REVIEW
The biotechnology sector is usually a stock picker's market - a sector in which specialist investors can thrive by backing companies with the strongest clinical and commercial prospects. But over the past year, that dynamic has at times been overshadowed. Tariffs, trade policy and drug pricing reform dominated the market narrative, and for a time, this macroeconomic noise drowned out the fundamentals. Even though many of these pressures are more relevant to pharmaceutical companies than to biotechnology firms, markets didn't make the distinction - sentiment was broadly risk-off and stock-specific progress struggled to cut through.

That makes the Company's positive return all the more encouraging, especially given the Reference Index decline. At the lows, we increased our gearing - to the highest level it's been since the financial crisis, which added value in the recovery from April onwards and reflects the conviction we continue to hold in the portfolio. We're now seeing signs that fundamentals are reasserting themselves, with clinical milestones and commercial traction once again starting to drive performance.

M&A
M&A activity remained an important driver of performance during the year. Regulatory scrutiny and political uncertainty have dampened activity in recent years, but five portfolio holdings were acquired during the year.

In December, small-cap holding Marinus, which had recently had a therapy, Ztalmy, approved to address seizures in patients with the rare CDKL5 deficiency disorder, was acquired by Immedica for $151 million, representing a 48% premium to the share price.

In January, Johnson & Johnson agreed to acquire CNS specialist Intra-Cellular Therapies for $14.6 billion, representing a near 40% premium to its undisturbed share price. As the portfolio's largest position at the time, the deal was a key contributor to the Company's NAV over the period. With Caplyta, its drug addressing bipolar depression, already approved and with further indications progressing, Intra-Cellular was de-risked and launch-ready.

With the proceeds of the Intra-Cellular deal, we increased our position in SpringWorks Therapeutics, which became the portfolio's largest holding. The company develops targeted therapies for rare cancers and has recently transitioned to commercial stage, with FDA-approved assets in desmoid tumours and NF1-related neurofibromas. In April, Merck KGaA announced a $3.9 billion all-cash acquisition at $47 per share, representing a 26% premium, leading to another boost for the Company's NAV over the period.

The portfolio also held a position in Blueprint Medicines, a specialist in rare immunological diseases with a focus on systemic mastocytosis (SM) and mutations in the KIT gene, which regulates cell growth and survival. Its lead asset, Ayvakit, is approved in both the US and EU for advanced and indolent SM, with growing commercial traction. In June, Sanofi agreed to acquire Blueprint in a deal worth up to $9.5 billion, including contingent value rights through which shareholders benefit further if future regulatory milestones are met, which represented a 27% premium.

The fifth deal involved the portfolio's position in Verona Pharma, a biotechnology company focused on chronic respiratory diseases. Its lead product, Ohtuvayre, is the first novel maintenance therapy for chronic obstructive pulmonary disease (COPD) in over two decades, approved for use alone or alongside existing treatments. In July, Merck agreed to acquire Verona in a $10 billion deal, representing a 23% premium to the prior share price.

Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise.

All five acquisitions involved late-stage businesses with approved assets, reflecting the portfolio's focus on de-risked companies with clear commercial pathways. Currently, 58% of the portfolio is allocated to businesses at this stage of their journey as we see great prospects for these companies which have a much lower risk profile and are reasonably priced as the market tends not to attribute the full potential value of future sales of their assets. With Marek Poszepczynski's background in Business Development, we have a good insight into how pharmaceutical companies will be valuing these businesses and can readily identify companies that will look attractive to them. Even if the companies are not then acquired but choose to remain independent and launch their own therapies on the market, we are confident that future sales will lead to enhanced valuations, providing potential uplift for shareholders.

OTHER POSITIVE CONTRIBUTORS TO NAV
Elsewhere, another major positive contribution to performance came from uniQure - a gene therapy company developing one-time treatments for severe genetic disorders. Its most advanced program, AMT-130, is a potential first-in-class gene therapy for Huntington's disease. Following FDA alignment in December 2024 on the key elements of an accelerated approval pathway, the program received Breakthrough Therapy designation in April 2025 - further validating its clinical potential and accelerating its regulatory timeline. The shares started the period with a very low enterprise value (market capitalisation less net debt), which we believed significantly undervalued the potential value of its approach. Assisted by these positive regulatory developments, the share price almost trebled over the year.

Our decision not to hold Regeneron for much of the period, was a positive contributor to relative performance, as the stock more than halved over the year. We considered the valuation of the company, which is a large index constituent that started the year with high expectations, to have been driven to best case scenario levels, somewhat dislocated from its intrinsic value, by market enthusiasm. The company endured a significant de-rating following mixed Phase 3 data for its COPD candidate, itepekimab, and weaker-than-expected earnings. With the valuation now looking more realistic, we introduced a small position to the portfolio in early 2025.

RELATIVE NEGATIVE DETRACTORS TO NAV
By contrast, Gilead Sciences, which is not held in the portfolio, was a source of relative underperformance. Its strong share price performance in the first half of the period under review was driven by growing enthusiasm for lenacapavir, a long-acting Human Immunodeficiency Virus (HIV) prevention therapy. We remain underweight in Gilead, as we continue to believe that its valuation reflects elevated investor sentiment rather than its underlying commercial potential - particularly given the competitive dynamics in HIV prevention and uncertainty around public health funding.

Within the portfolio, Rocket Pharmaceuticals, a clinical-stage company developing gene therapies for rare childhood disorders, was a disappointing performer. Its share price faced sustained pressure throughout the period, including a sharp decline in May following news that the FDA had placed a clinical hold on RP-A501, its gene therapy for Danon Disease, after a serious adverse reaction and the death of a trial patient. The hold was lifted in August 2025, with the trial resuming under revised dosing protocols, but sentiment has remained cautious. While market attention has largely centred on RP-A501, we continue to see broader value in Rocket's pipeline, which includes multiple gene therapy candidates for other rare diseases. In combination, the potential commercial value of this pipeline is ultimately much greater than its current valuation implies.

Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/ securities or adopt any investment strategy. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise.

Our decision on when to sell Alnylam - a commercial-stage company focused on RNA interference therapeutics - also detracted from returns during the period. This has been an excellent performer for the portfolio over the last couple of years, driven by positive clinical progress in its treatment for ATTR amyloidosis, which has now been approved for both polyneuropathy and cardiomyopathy. The position was sold during the year, and with hindsight, we exited too early, as the share price has continued to rise. However, the proceeds have been recycled into other opportunities where we see greater upside potential.

MACROECONOMIC AND POLITICAL LANDSCAPE
The past year has seen the biotechnology sector navigate a shifting policy and macroeconomic landscape, with regulatory upheaval at the FDA emerging as a key concern. The agency is undergoing its most significant restructuring in decades, including a planned reduction of over 3,500 staff - more than 20% of its workforce. While most cuts have targeted administrative roles, the sudden departure of Peter Marks (who headed up the Centre of Biological Evaluation and Research 'CBER') raised questions about commitment, continuity and capacity. His replacement, Dr Vinay Prasard, has signalled a renewed focus on drug approvals and innovation, particularly in gene and cell therapies. Short-term disruption is possible, but the direction of travel remains supportive of the biotechnology sector's long-term growth.

Drug pricing reform has also returned to the political spotlight. President Trump's revival of the MFN pricing framework, alongside the ongoing rollout of the Inflation Reduction Act (IRA), has created uncertainty around how and when pricing pressure might affect the sector. For now, the biotechnology sector remains somewhat insulated. Much of the sector is largely focused on clinical-stage development and less on commercial sales, and the IRA's initial scope is limited to a handful of blockbuster drugs. Crucially, the long-standing model of patent-protected pricing power for breakthrough therapies, especially those addressing rare or paediatric diseases, remains intact, preserving incentives for innovation.

Trade and tariff policy continues to cast a shadow over sentiment, though here too, the short- to medium-term impact on the biotechnology industry remains limited. While broader pharmaceutical imports have come under scrutiny, many biotechnology firms are not heavily exposed to global supply chains. Nonetheless, uncertainty around future policy direction has contributed to a cautious investor stance.

Regulatory environment - FDA
In June 2025, Robert F Kennedy posted on X "It's time to let it (the US biotechnology industry) flourish - not tie it up in red tape, misalignment and a process that gives the edge to foreign interest and large incumbents.". He also termed the phrase "MABA - Make American Biotech Accelerate". This underpinned our sense that while there is focus on streamlining the wider sector, the innovative engine that is the biotechnology sector should be relatively protected and hopefully enhanced. Indeed, the FDA is actively pursuing several initiatives aimed at accelerating the drug review process. Under the direction of Commissioner Dr. Marty Makary, the agency is navigating significant operational changes, including a 20% reduction in workforce and the departure of several senior leaders. Despite concerns around resourcing, 27 drugs were approved in the eight months to the end of August 2025¹, just a little behind the run rate to meet the average of around 49 drugs per year over the past five years but broadly encouraging given the upheaval in the FDA.

KEY INITIATIVES
AI integration
The FDA has deployed a new AI tool, 'Elsa', designed to assist and potentially increase the efficiency of the drug review workload.

Voucher-based fast track
The agency has introduced the Commissioner's National Priority Voucher (CNPV) programme. This pilot limits the number of vouchers granted, focusing on drug applications that address US national priorities such as public health crises, novel treatments, unmet needs, or domestic manufacturing enhancements. Successful applicants may see review times compressed from a year to as little as a month via a 'tumour board' multidisciplinary evaluation approach. The scheme allows for early submission of critical parts of a drug filing ahead of trial completion. However, it lacks Congressional authority at this stage, and details around implementation, eligibility and transparency remain limited.

Conditional approvals for ultra-rare diseases
Dr. Makary has also floated the concept of granting conditional approvals for certain drugs based on plausible mechanisms of action, rather than completed randomised clinical trial evidence, particularly within ultra-rare disease categories.

While these FDA initiatives strive to shorten development timelines, concerns have been raised about the potential impact on patient safety, regulatory rigour, and industry transparency. Questions remain regarding resource allocation given organisational contraction, the risk of increased litigation due to a lack of clarity in selection processes, and the possibility of the review process becoming politicised.

As further details emerge, we will continue to assess the impact of these regulatory changes on portfolio companies and the broader innovation landscape. We remain vigilant in monitoring the FDA's evolving approach to balancing expedited access with robust evaluation standards. We are greatly encouraged by the overall sentiment of these measures which are designed to improve the path to market for the sorts of innovative therapies that we invest in.

Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy.

1     Source: US Food and Drug Administration (FDA), Novel Drug Approvals 2025.

Trends in the biotechnology sector tend to trade inversely with US interest rates. This is largely a function of the valuation methods used by the market, which apply a discount to future cash flows based on the prevailing interest rate. The normal inverse relationship between the performance of the biotechnology sector and US interest rates was less relevant in this environment of policy uncertainty, albeit lower interest rates from here could prove supportive in the months ahead.

STRATEGY AND PORTFOLIO POSITIONING
Over the last four years, the strategy we have adopted for the Company's portfolio has shifted profoundly in response to the evolving opportunity set. In 2021, when we took over as lead Portfolio Managers, our cautious view of valuations in a period of exuberance towards the biotechnology sector drove a focus on larger, resilient, cash-flow generating businesses. This cautious stance paid off through the market downturn of 2022, allowing us to take advantage of lower valuations in 2023, moving back towards smaller, earlier-stage companies as the market stabilised. Shareholders have continued to see the benefit of these strategic moves, as we have continued to build exposure to businesses that are clinically de-risked. Currently, approximately 51% of the portfolio is clinically de-risked i.e. passed through clinical development and are either awaiting approval, launched or are profitable².

2       Source: Schroders.

There are several reasons for this positioning. Firstly, as illustrated by chart 1 in the full Annual Report and Financial Statements, the biotechnology industry has become the main engine of healthcare innovation. Ten years ago, the pharmaceutical sector was responsible for the bulk of new FDA drug approvals, but it has since stepped away from internal research and development (R&D), allowing biotechnology firms to take up the mantle of innovation3. In 2024, more than 70% of new drug approvals came from the biotechnology sector³.

Secondly, more than $200 billion of existing pharmaceutical revenues are due to be lost by 2030 as patents on key drugs expire⁴. Many major pharmaceutical companies may feel compelled to engage in M&A activity in order to replace these lost revenues, with late-stage, de-risked assets, such as the ones that dominate the Company's portfolio, at the top of their shopping lists.

Thirdly, and perhaps most importantly, the portfolio is currently dominated by biotechnology companies on the cusp of commercialisation because this is where we are finding the most compelling opportunities. These businesses are tantalisingly close to becoming commercial success stories on their own.

M&A can offer a quick win for shareholders, but if these advanced clinical-stage businesses remain independent, the ultimate rewards may be even greater. Many of our key holdings will be launching their therapies independently over the next couple of years if they are not acquired.

RARE DISEASES
Another key portfolio focus is on rare diseases, currently the largest exposure in the portfolio. We are drawn to this area because it combines high unmet medical need with compelling scientific and commercial dynamics. Regulatory frameworks such as the Orphan Drug Act, introduced in 1983, offer meaningful incentives - including market exclusivity and accelerated approval pathways - that de-risk development and enhance value creation. These incentives have helped make rare diseases a natural launch pad for breakthrough technologies such as gene therapy and RNA-based treatments, which were first validated in orphan indications before expanding to broader applications.

Prominent positions in the portfolio that are involved in rare diseases include Ascendis Pharma, which focuses on growth hormone deficiency and other rare endocrine disorders, Avidity Biosciences, a clinical stage company focused on rare muscle disorders, and KalVista Pharmaceuticals, which is developing therapies for hereditary angioedema, a rare disorder causing unpredictable and potentially life-threatening swelling episodes.

ONCOLOGY
Oncology continues to represent a significant component of our portfolio, reflecting ongoing innovation in targeted therapies, cell-based treatments, and immuno-oncology. However, the remarkable progress seen within the sector has attracted a growing number of entrants, leading to an increasingly competitive and, at times, less differentiated project landscape. Given this heightened competition and the rapidly shifting development landscape, we have adopted a more measured approach to oncology investments, selecting opportunities with the most compelling prospects. While oncology remains a significant area in the portfolio, we currently see more attractive opportunities in fields characterised by high unmet medical need, where differentiation and value creation may be more pronounced.

Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy.

3     Source: US Food and Drug Administration (FDA), NDA/BLA Approvals; Bank of America Global Research, company reports.

4     Source: Evaluate Pharma May 2024.

OUTLOOK & CONCLUSION
The investment case for biotechnology is rooted in powerful global trends - ageing populations, rising chronic disease burdens and the urgent need to improve healthcare efficiency. As governments and public health systems grapple with rising costs, fiscal deficits and growing demand for better outcomes, our strategy has focused on the companies best placed to deliver both therapeutic innovation and long-term value.

The Company's portfolio contains many advanced clinical-stage assets that may well prove too tempting for larger pharmaceutical companies, with their bare pipelines and looming patent cliffs, to ignore. Pharmaceutical companies, like us, are seeking best in class assets at reasonable valuations. M&A may well prove a catalyst for continued outperformance as it has done before, but importantly, we are not counting on it. For most of the largest holdings in the portfolio, there are two clear paths ahead for value creation. They may be acquired by larger pharmaceutical businesses at a share price premium, or they can commercialise their technology independently. Either way, shareholders stand to benefit. In our view, this is a positive situation for the Company and its shareholders.

Of course, many risks remain, some macro and some micro, some known and some unknown. But with powerful structural tailwinds and valuations low in the context of history, we are optimistic that the sector can deliver positive progress in the years ahead. With our bottom-up stock picking and top-down risk aware overlay, we are well positioned, as skilled active, specialist investors to reap rewards from outperforming biotechnology companies while protecting our investors from downside risk. With a portfolio full of innovation and near-term catalysts, we believe the Company is positioned not just to participate in the sector's continued progress - but to outperform it.

We appreciate your continued support and look to the future with great confidence.

AILSA CRAIG and MAREK POSZEPCZYNSKI
Portfolio Managers
SCHRODER INVESTMENT MANAGEMENT LIMITED
5 November 2025

 

RISK REPORT

The Board, through its delegation to the Audit Committee, is responsible for the Company's system of risk management and internal control and for reviewing its effectiveness. The Board has adopted a detailed matrix of principal risks affecting the Company's business as an investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which are monitored by the Audit Committee on an ongoing basis.

This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the Company's strategic objectives.

RISK ASSESSMENT AND INTERNAL CONTROLS REVIEW BY THE BOARD
Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key service providers, and ensures regular communication of the results of monitoring by such providers to the Audit Committee, including the incidence of significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the Company's performance or condition.

Although the Board believes that it has a robust framework of internal controls in place this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk.

Both the principal risks and uncertainties and the monitoring system are also subject to robust review at least annually. The last assessment took place in October 2025.

During the year, the Board discussed and monitored a number of risks which could potentially impact the Company's ability to meet its strategic objectives. The Board receives updates from the Investment Manager, Company Secretary and other service providers on emerging risks that could affect the Company. The Board was mindful of the evolving global environment during the year and the risks posed by volatile markets and geopolitical uncertainty, including the new US Administration, particularly threats to the FDA and reductions in federal spending, as well as ongoing conflict in Ukraine and the Middle East. However, these are not factors which explicitly impact the Company's performance although they could exacerbate existing risks. Where relevant these have been incorporated in the table below.

Following the Company's financial year-end, J.P. Morgan Europe Limited was appointed to provide depositary, custodian and certain fund administration services, effective 3 October 2025. The Board was mindful of the operational risks associated with the transition and received quarterly progress updates ahead of the transfer from HSBC to J.P. Morgan. Further details are included in the table below.

The Board considered in detail whether there were any material emerging risks and has continued to include the development of artificial intelligence as an emerging risk in the table below.

No significant control failings or weaknesses were identified from the Audit Committee's ongoing risk assessment throughout the financial year and up to the date of this report. The Board is satisfied that it has undertaken a detailed review of the risks facing the Company and that the internal control environment continues to operate effectively. A full analysis of the financial risks facing the Company is set out in note 19 to the financial statements in the full Annual Report and Financial Statements.

The Board considers that the risks set out in the table below are the principal risks currently facing the Company to deliver its strategy together with those actions taken by the Board and, where appropriate, its Committees, to manage and mitigate those risks.

The "Change" column on the right highlights at a glance the Board's assessment of any increases or decreases in risk during the year after mitigation and management. The arrows in the change column show the risks as increased or decreased or unchanged.

Risk	Mitigation and management	Change
Strategic
Investment strategy The investment strategy may, if inappropriate, result in negative investor sentiment, leading to a reduction in the share price and the Company underperforming the market and/or its peer group companies.	The appropriateness of the Company's investment mandate and the long-term investment strategy is periodically reviewed by the Board and the success of the Company in meeting its stated objectives is monitored. The Board holds a strategy meeting each year to consider the investment objective and policy and the Company's longer-term investment strategy.
Investor appetite A loss of investor appetite for investment in the biotechnology sector as a result of political conditions, including US Food and Drug Administration and Federal Trade Commission policy as well as uncertainties regarding the execution of the US tariff regime implemented by the Trump administration, might materially affect the ability of the Company to achieve its objective and reduce demand for the Company's shares, leading to a wide discount.	The Portfolio Managers update the Board monthly and at each scheduled Board meeting on issues pertinent to the portfolio and the biotechnology sector generally, including the political landscape and expected future drivers. The Board reviews the global factors which may affect investor appetite, including US/China tensions, conflicts in Ukraine and the Middle East, and political and policy developments including legislation concerning Medicare and drug pricing in the United States. These may persist as issues that could potentially have a negative impact on the biotechnology and healthcare sectors.
Continuation vote The Company's Articles of Association require the Board to put a proposal for the continuation of the Company to shareholders on a biennial basis. A resolution will be put to shareholders at the AGM to be held in December 2025.	The Manager and the corporate broker engage with shareholders to understand investor sentiment and regularly provide feedback to the Board. Directors also engage directly with shareholders at the AGM to understand their views.
Performance/investment
Macro factors The Company's returns are affected by changes in economic, political, financial and corporate conditions, which can cause substantial market and exchange rate fluctuations. A significant fall in US equity markets is likely to adversely affect the value of the Company's portfolio. The biotechnology sector has its own specific risks leading to higher volatility than the broader equity market indices. Wider geopolitical risks include regional tensions, trade wars and sanctions against companies, in areas which the Company invests or may invest. In addition, the financial statements and performance of the Company are denominated in sterling because the Company is a UK company listed on the London Stock Exchange. However, the majority of the Company's assets are denominated in US dollars ("$"). Accordingly, the total return and capital value of the Company's investments can be significantly affected by movements in foreign exchange rates.	The Portfolio Managers consider carefully the portfolio composition by size of company, development stage and therapeutic area and adjusts accordingly. The Board is also supportive of the Portfolio Managers' approach to reducing exposure to companies with imminent binary events such as a readout of data from a clinical trial. The Portfolio Managers provide regular reports to the Board on general economic conditions as well as portfolio activity, strategy and performance, including risk monitoring. The reports are discussed in detail at Board meetings, which are all attended by the Portfolio Managers, to allow the Board to monitor the implementation of the investment strategy and process.
Share price performance Share price performance may consistently lag NAV performance leading to a wide and persistent discount to NAV.	The share price relative to the NAV per share is kept under review as a key performance indicator and is considered against the Company's peers on a regular basis. The Board has implemented a robust share buyback and issuance policy which has been used consistently during the year under review with 3,107,419 shares being repurchased to be held in treasury. The discount narrowed slightly during the year. The use of the buyback authority is reviewed regularly. Proactive engagement with shareholders takes place via the AGM, feedback from shareholder presentations, and ad hoc meetings with the Board. The Manager provides a dedicated, experienced investment trust marketing team together with PR resource. The Manager and corporate broker monitor market feedback and the Board consider this at each quarterly meeting.
ESG considerations The Board recognises that a responsible and proactive approach to ESG-related factors can positively impact the performance and success of its portfolio companies and the Company. A failure to focus sufficiently on ESG matters may not promote the Company to shareholders in a way that generates investor demand.	The consideration of climate change risks and ESG factors is integrated into the investment process and reported at Board meetings. The Manager's approach to ESG matters is set out in the Investment Manager's Review. The Company uses data gathered by Sustainalytics to monitor the compliance of its quoted portfolio with an accepted set of ESG standards.
Operational
Oversight of service providers Inadequate performance of service providers could lead to poor performance and/or exposure to a number of financial, regulatory and business risks. Service providers may terminate their services if they deem the Company to no longer fit their business model. Operational risks may arise from the transfer of custodian, depositary and fund administration services to a new service provider.	The Board receives reports from the Manager and Investment Manager on its internal controls and risk management throughout the year, including those relating to cybersecurity, and receives assurances from all its other significant service providers on at least an annual basis. The Management Engagement Committee reviews the performance of key service providers at least annually. The Manager and Investment Manager also monitor closely the control environments and quality of services provided by third parties, including those of the depositary, through service level agreements and regular meetings. The Directors also receive reporting on internal controls from the Company's key service providers including the depositary and custodian, and the registrar on an annual basis. Experienced service providers are appointed by the Company subject to due diligence processes and clearly documented contractual arrangements which include agreed service level specifications and notice periods for terminations. In respect of the transition of custodian, depositary and fund administration services from HSBC to J.P. Morgan, a detailed transition plan was put in place, closely monitored by the Manager via a Risks, Assumptions, Issues and Dependencies (RAID) log. The Board received quarterly progress updates on the transition, with the Audit Committee Chair acting as the primary point of contact between update cycles. All migration of financial data from HSBC to J.P. Morgan was subject to close oversight by the Company's external auditors. Further details of the internal controls which are in place are set out in the Audit Committee's Report in the full Annual Report and Financial Statements.
Information technology (IT), resilience and security Cyber risks such as fraud, sabotage or crime perpetrated against the Company or any of its third party service providers could result in data theft, service disruption and reputational damage.	Cybersecurity is closely monitored by the Audit Committee as part of the review of the internal controls of its service providers. In response to the evolving global threat landscape and the continued rise in cyber risks, the Board has determined that this risk has increased during the year and continues to monitor it closely. During the Company's financial year, Schroders' IT security team presented to the Directors on the Manager's cybersecurity controls.

EMERGING
Artificial intelligence (AI)
Whilst there are opportunities and benefits associated with the development of AI, and a risk of not embracing these opportunities and benefits, the development of AI presents potential risks to businesses in almost every sector. The extent of the risk presented by AI is extremely hard to assess at this point but the Board considers that it is an emerging risk and together with the Manager and Investment Manager, will monitor developments in this area.

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and 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.

Under company law, the 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 return 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.

The Directors 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 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 Directors' Remuneration Report comply with the Companies Act 2006.

The Manager is responsible for the maintenance and integrity of the web pages dedicated to the Company. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' Statement
Each of the Directors, whose names and functions are listed in the Board of Directors in the full Annual Report and Financial Statements 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, give a true and fair view of the assets, liabilities, financial position and result of the Company;

·        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; and

·        that the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

ON BEHALF OF THE BOARD
KATE CORNISH-BOWDEN
Chair
5 November 2025

 

Statement of Comprehensive Income for the year ended 31 August 2025

	Note	2025 Revenue £'000	2025 Capital £'000	2025 Total £'000	2024 Revenue £'000	2024 Capital £'000	2024 Total £'000
Gains on investments held at fair value through profit or loss	2	-	4,735	4,735	-	41,620	41,620
Net foreign currency gains		-	819	819	-	1,656	1,656
Income	3	514	-	514	1,263	-	1,263
		---------------	---------------	---------------	---------------	---------------	---------------
Total income		514	5,554	6,068	1,263	43,276	44,539
		=========	=========	=========	=========	=========	=========
Management fee	4	(1,638)	-	(1,638)	(1,297)	-	(1,297)
Performance fee	4	-	(2,665)	(2,665)	-	(904)	(904)
Administrative expenses	5	(967)	-	(967)	(1,129)	-	(1,129)
		---------------	---------------	---------------	---------------	---------------	---------------
(Loss)/profit before finance costs and taxation		(2,091)	2,889	798	(1,163)	42,372	41,209
Finance costs	6	(1,940)	-	(1,940)	(2,198)	-	(2,198)
		---------------	---------------	---------------	---------------	---------------	---------------
(Loss)/profit before taxation		(4,031)	2,889	(1,142)	(3,361)	42,372	39,011
Taxation	7	(28)	-	(28)	(135)	-	(135)
		---------------	---------------	---------------	---------------	---------------	---------------
Net (loss)/profit for the year		(4,059)	2,889	(1,170)	(3,496)	42,372	38,876
		=========	=========	=========	=========	=========	=========
(Loss)/earnings per share (pence)	8	(11.42)	8.13	(3.29)	(9.16)	110.97	101.81
		=========	=========	=========	=========	=========	=========

 

The "Total" column of this statement represents the Company's Statement of Comprehensive Income prepared in accordance with UK-adopted International Accounting Standards.

The Company does not have any other comprehensive income and hence the net (loss)/profit for the year, as disclosed above, is the same as the Company's total comprehensive income.

The "Revenue" and "Capital" columns represent supplementary information prepared under guidance set out in the statement of recommended practice for investment trust companies (the "SORP") issued by the Association of Investment Companies in July 2022.

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

The notes in the full Annual Report and Financial Statements form part of these financial statements.

Statement of Changes in Equity for the year ended 31 August 2025

	Note	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 August 2023		10,346	29,873	31,482	249,147	(50,531)	270,317
Net profit/(loss) for year		-	-	-	42,372	(3,496)	38,876
Dividends paid in the year	9	-	-	-	(10,768)	-	(10,768)
Repurchase of ordinary shares into treasury		-	-	-	(16,160)	-	(16,160)
At 31 August 2024		10,346	29,873	31,482	264,591	(54,027)	282,265
Net profit/(loss) for year		-	-	-	2,889	(4,059)	(1,170)
Dividends paid in the year	9	-	-	-	(11,196)	-	(11,196)
Repurchase of ordinary shares into treasury		-	-	-	(20,490)	-	(20,490)
		---------------	---------------	---------------	---------------	---------------	---------------
At 31 August 2025		10,346	29,873	31,482	235,794	(58,086)	249,409
		=========	=========	=========	=========	=========	=========

The notes in the full Annual Report and Financial Statements form an integral part of these financial statements.

Statement of Financial Position at 31 August 2025

	Note	2025 £'000	2024 £'000
Non-current assets
Investments at fair value through profit or loss	10	268,920	297,507
		---------------	---------------
Current assets
Receivables	11	136	215
Cash and cash equivalents	12	14,980	10,433
		---------------	---------------
		15,116	10,648
		=========	=========
Total assets		284,036	308,155
		=========	=========
Current liabilities
Loan	13	(29,607)	(22,827)
Payables	13	(5,020)	(3,063)
		---------------	---------------
		(34,627)	(25,890)
		=========	=========
Net assets		249,409	282,265
Equity attributable to shareholders
Share capital	15	10,346	10,346
Share premium	16	29,873	29,873
Capital redemption reserve	16	31,482	31,482
Capital reserves	16	235,794	264,591
Revenue reserve	16	(58,086)	(54,027)
		---------------	---------------
Total equity attributable to shareholders		249,409	282,265
		=========	=========
Net asset value per share (pence)	17	739.48p	766.30p
		=========	=========

 

The financial statements in the full Annual Report and Financial Statements were approved by the Board of Directors and authorised for issue on 5 November 2025 and signed on its behalf by:

Alexa Henderson
Chair of the Audit Committee

The notes in the full Annual Report and Financial Statements form an integral part of these financial statements.

Registered in England and Wales as a public company limited by shares.

Company registration number: 02892872.

Cash Flow Statement for the year ended 31 August 2025

	Note	2025 £'000	2024 £'000
Operating activities
Profit before finance costs and taxation		798	41,209
Adjustments for:
Net foreign currency gains		(819)	(1,656)
Gains on investments at fair value through profit or loss		(4,735)	(41,620)
Net sales of investments at fair value through profit or loss		33,513	50,463
Dividend income		(286)	(1,045)
Interest income		(228)	(218)
Decrease in receivables		9	14
Increase/(decrease) in payables		1,766	(746)
Overseas taxation paid		(26)	(134)
		---------------	---------------
Net cash inflow from operating activities before dividends and interest		29,992	46,267
		=========	=========
Dividends received		336	1,098
Interest received		245	185
Interest paid		(1,940)	(2,198)
		---------------	---------------
Net cash inflow from operating activities		28,633	45,352
		=========	=========
Financing activities
Bank loan drawdown		31,106	46,186
Bank loan repaid		(23,345)	(21,456)
Repurchase of ordinary shares into treasury		(20,490)	(16,160)
Dividends paid	9	(11,196)	(10,768)
		---------------	---------------
Net cash outflow from financing activities		(23,925)	(2,198)
		=========	=========
Increase in cash and cash equivalents		4,708	43,154
Cash and cash equivalents at the start of the year		10,433	(32,474)
Effect of foreign exchange rates on cash and cash equivalents		(161)	(247)
		---------------	---------------
Cash and cash equivalents at the end of the year	12	14,980	10,433
		=========	=========

 

The notes in the full Annual Report and Financial Statements form an integral part of these financial statements.

Notes to the Financial Statements

1. Material accounting policies
The nature of the Company's operations and its principal activities are set out in the Strategic Report and Directors' Report.

The Company's financial statements have been prepared in accordance with UK-adopted International Accounting Standards and those parts of the Companies Act 2006 ("the Act") applicable to companies reporting under UK-adopted International Accounting Standards. These comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") and International Accounting Standards Committee ("IASC"), that remain in effect and to the extent that they have been adopted by the United Kingdom and the Listing Rules of the FCA.

For the purposes of the financial statements, the results and financial position of the Company are expressed in pounds sterling, which is the functional currency and the presentational currency of the Company.

Sterling is the functional currency because it is the currency which is most relevant to the majority of the Company's shareholders and creditors and the currency in which the majority of the Company's operating expenses are paid.

All values are rounded to the nearest thousand pound and (£'000) except where otherwise indicated.

The principal accounting policies followed, which have been applied consistently for all years presented, are set out below:

(a) Basis of preparation
The Company's financial statements have been prepared on a going concern basis (as set out in the full Annual Report and Financial Statements) and under the historical cost convention, as modified by the inclusion of investments at fair value through profit or loss.

Where presentational guidance set out in the Statement of Recommended Practice (the "SORP") for investment trusts issued by The Association of Investment Companies (the "AIC") in November 2014 (and updated in July 2022) is consistent with the requirements of UK-adopted International Accounting Standards, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The financial position of the Company as at 31 August 2025 is shown in the Statement of Financial Position. As at 31 August 2025, the Company's total assets exceeded its total liabilities by a multiple of over 8. The assets of the Company consist mainly of securities that are held in accordance with the Company's investment policy, as set out in the full Annual Report and Financial Statements. The Directors have considered a detailed assessment of the Company's ability to meets its liabilities as they fall due. The assessment took account of the Company's current financial position, its cash flows and its liquidity position. In addition to the assessment, the Company carried out stress testing, which used a variety of falling parameters to demonstrate the effects on the Company's share prices and NAV.

In light of the results of these tests, the Company's cash balances, and the liquidity position, the Directors consider that the Company has adequate financial resources to enable it to continue in operational existence. The Directors expect shareholders to vote in favour of continuation at the 2025 AGM. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Company's financial statements.

(b) Presentation of the Statement of Comprehensive Income
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 Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income.

The net loss after taxation in the revenue column is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 1158 of the Corporation Tax Act 2010 ("CTA").

(c) Income
Dividends receivable on equity shares are recognised as revenue for the year on an ex-dividend basis. Special dividends are treated as revenue return or as capital return, depending on the facts of each individual case. Income from current asset investments is included in the revenue for the year on an accruals basis and is recognised on a time apportionment basis.

Where the Company has elected to receive its dividends in the form of additional shares rather than cash, the amount of cash dividend foregone is recognised as income in the revenue column of the Statement of Comprehensive Income. Any excess in the value of shares over the amount of cash dividend foregone is recognised as a gain in the capital column of the Statement of Comprehensive Income.

Interest from fixed income securities is recognised on a time apportionment basis so as to reflect the effective yield on the fixed income securities.

Deposit interest outstanding at the year-end is calculated and accrued on a time apportionment basis using market rates of interest.

(d) Expenses and interest payable
Administrative expenses including the management fee and interest payable are accounted for on an accruals basis and are recognised when they fall due.

All expenses and interest payable have been presented as revenue items except as follows:

·        Any performance fee payable is allocated wholly to capital, as it is primarily attributable to the capital performance of the Company's assets.

·        Transaction costs incurred on the acquisition or disposal of investments are expensed and included in the costs of acquisition or deducted from the proceeds of sale as appropriate.

(e) Taxation
Deferred tax is calculated in full, using the liability method, on all taxable and deductible temporary differences at the Statement of the Financial Position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax rates and tax laws that have been enacted or substantively enacted at the Statement of Financial Position date.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilised.

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented in the capital column of the Statement of Comprehensive Income is the marginal basis. Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue column of the Statement of Comprehensive Income, then no tax relief is transferred to the capital column.

(f) Non-current asset investments held at fair value
The Company holds three types of investments: direct investments in quoted companies; direct investments in unquoted companies; and indirect investments held through venture funds.

Investments are recognised or derecognised on the trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned.

On initial recognition all non-current asset investments are designated as held at fair value through profit or loss as defined by UK-adopted International Accounting Standards. They are further categorised into the following fair value hierarchy:

Level 1:          Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:          Having inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3:          Having inputs for the asset or liability that are not based on observable market data.

All non-current investments (including those over which the Company has significant influence) are measured at fair value with gains and losses arising from changes in their fair value being included in net profit or loss for the year as a capital item.

Any gains and losses realised on disposal are recognised in the capital column of the Statement of Comprehensive Income.

Quoted investments
The fair value of quoted investments is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted.

Unquoted investments
In respect of unquoted investments (excluding investments in the SV unquoted funds), or where the market for a financial instrument is not active, fair value is established by the adviser using various valuation techniques, in accordance with the International Private Equity and Venture Capital ("IPEV") guidelines issued in December 2022 and Special Valuations Guidance issued in March 2020. These may include reference to recent rounds of re-financing undertaken by investee companies involving knowledgeable parties, an earnings or multiple, a discounted cashflow model or the present value of future milestone payments, all with reference to recent arm's length market transactions between knowledgeable parties, where available.

The valuations of the unquoted investments are assessed by the adviser to ensure that the fair value is fairly reflected and will be revalued accordingly, driven by the underlying assumptions deriving the value including: the ability of portfolio company management to keep cash and operating budgets; investor milestone targets; clinical trial data; progress of competitor products; any underlying litigation at the portfolio company level; performance of the investment and quality of the management team; and the market for the product being developed; and the broad climate of the economies of the countries in which they will likely be sold by reference to public stock market performance. Management scrutinises and challenges the assumptions, judgements and valuation inputs used by the adviser on a quarterly basis.

Investment in unquoted funds
The Company receives formal quarterly reports from each of the private equity funds in which it invests: SV Fund VI and SV BCOF (the "SV unquoted funds"). The values of the SV unquoted funds' investments in the underlying private equity companies are reported in these quarterly reports. The reports typically arrive within 60 days of the end of the quarter (90 days at calendar year-end). As soon as a quarterly report is received by the Company, the reported value of the SV unquoted funds is reflected in the NAV on the next NAV date.

During the period between quarterly reports, the Company may be advised of a sale of a portfolio company (or its securities) held within one of the funds at a different price from the last reported value in that quarterly report. As soon as the Company is informed of the completion of any such transaction establishing a new value for the investment, the new NAV of that investment to SV the unquoted funds is reflected in the NAV on the next NAV date. With respect to any investments within the SV unquoted funds for which there is a listed price, the Company revalues its investment in the SV unquoted funds to take account of market movements in the underlying security. The listed price of these underlying securities is monitored on a daily basis. Any price move in the SV unquoted funds' underlying investments that materially impacts the Company's holding in the SV unquoted funds is immediately reflected in the NAV on the next NAV date. If there are no material movements, these underlying securities are revalued on a monthly basis and immediately reflected in the NAV on the next NAV date.

The value of a fund investment used by the Company in determining the NAV is always based on the most current information known to the Company on the NAV date.

(g) Foreign currencies
Transactions involving currencies other than sterling are recorded at the exchange rate ruling on the transaction date.

At each Statement of Financial Position date, monetary items and non-monetary assets and liabilities that are fair valued, which are denominated in foreign currencies, are translated at the closing rates of exchange. Foreign currency exchange differences arising on translation are recognised in the Statement of Comprehensive Income. Exchange gains and losses on investments held at fair value through profit or loss are included within "Gains/(losses) on investments held at fair value".

(h) Critical accounting estimates and judgements
The preparation of financial statements in conformity with UK-adopted International Accounting Standards requires the use of estimates and judgements. These estimates and judgements affect the reported amounts of assets and liabilities at the reporting date. While estimates are based on best judgement using information and financial data available, the actual outcome may differ from these estimates. The key sources of estimation and uncertainty relate to the fair value of the unquoted investments.

Judgements
The Directors consider that the preparation of the financial statements involves the following key judgements:

(i) The fair value of the unquoted investments.

The key judgements in the fair value process are:

(i) The advisor's (SV Health's) determination of the appropriate application of the IPEV Valuation Guidelines (December 2022) and Special Valuations Guidance (March 2020) to each unquoted investment; and

(ii) The Directors' consideration of whether each fair value is appropriate following detailed review and challenge.

The judgement applied by the adviser in the selection of the methodology used for determining the fair value of each unquoted investment can have a significant impact upon the valuation.

Estimates
The key estimate in the financial statements is the determination of the fair value of the unquoted investments (excluding investments in the SV unquoted funds) by SV Health for consideration by the Directors. This estimate is key as it significantly impacts the valuation of the unquoted investments (excluding investments in the SV unquoted funds) at the Statement of Financial Position date. The fair value process involves estimation using subjective inputs that are unobservable (for which market data is unavailable).

The main estimates involved in the selection of the valuation process inputs are:

(i) The application of an appropriate discount factor to reflect macro-economic factors and the reduced liquidity of unquoted companies;

(ii) The selection of an appropriate estimate of the probability of royalty income reflecting potential commercial uptake risk, competitor risk and uncertainty around drug pricing; and

(iii) The calculation of valuation adjustments derived from milestone achievement analysis incorporating the likelihood of clinical trial success.

Fair value estimates are cross-checked to alternative estimation methods where possible to improve the robustness of the estimate. As the valuation outcomes may differ from the fair value estimates a price sensitivity analysis is provided in Level 3 investments at fair value through profit and loss - price risk sensitivity in note 19.7 (iii) to illustrate the effect on the financial statements of an over or under estimation of the significant observable inputs.

(i) Other financial assets and liabilities
In the Cash Flow Statement, cash and cash equivalents includes cash in hand, short-term deposits and bank overdrafts. These are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes and cash balances are held at their fair value (translated to sterling at the Statement of Financial Position date where appropriate).

Interest-bearing bank loans are initially recognised at cost, being the proceeds net of direct issue costs, and subsequently at amortised cost.

(j) Receivables
Other receivables do not carry any right to interest and are short term in nature. Accordingly they are stated at their nominal value (amortised cost) reduced by appropriate allowances for estimated irrecoverable amounts.

(k) Other payables
Other payables are not interest-bearing and are stated at their nominal amount (amortised cost). Where there are any long-term borrowings, finance costs are calculated over the term of the debt on the effective interest basis.

(l) Bank loans and finance costs
Interest-bearing bank loans are initially recognised at cost, being the proceeds received net of direct issue costs, and subsequently at amortised cost. The amounts falling due for repayment within one year are included under current liabilities and more than one year under non-current liabilities in the Statement of Financial Position.

Finance costs are calculated using the effective interest rate method and accounted for on an accrual basis and, in line with the management fee expense, are charged 100% to the revenue account of the Statement of Comprehensive Income.

(m) Repurchase of ordinary shares (including those held in treasury) and subsequent reissues
The costs of repurchasing ordinary shares including related stamp duty and transaction costs are taken directly to equity and reported through the Statement of Changes in Equity as a charge on the capital reserves.

The sales proceeds of treasury shares reissued are treated as a realised profit up to the amount of the purchase price of those shares and is transferred to capital reserves. The excess of the sales proceeds over the purchase price is transferred to share premium.

Share purchase transactions are accounted for on a trade date basis. The nominal value of ordinary share capital repurchased and cancelled is transferred out of called up share capital and into the capital redemption reserve. Where shares are repurchased and held in treasury, the transfer to the capital redemption reserve is made if and when such shares are subsequently cancelled.

(n) Dividend distributions
Dividend distributions to shareholders are recognised in the period in which they are paid.

(o) Reserves
(i) Capital redemption reserve:
The capital redemption reserve, which is non-distributable, holds the amount by which the nominal value of the Company's issued share capital is diminished when shares redeemed or purchased out of the Company's distributable reserves are subsequently cancelled.

(ii) Share premium account:
A non-distributable reserve, represents the amount by which the fair value of the consideration received exceeds the nominal value of shares issued.

(iii) Capital reserves:
When making a distribution to shareholders, the Directors determine profits available by reference to 'Guidance realised and distributable profits under the Companies Act 2006' issued by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland in April 2017. The availability of distributable reserves in the Company is dependent on those dividends meeting the definition of qualifying consideration within the guidance and on available cash resources of the Company and other accessible source of funds. The distributable reserves are therefore subject to any future restrictions or limitations at the time such distribution is made.

The following are accounted for in this reserve and are distributable:

·        Gains and losses on the realisation of investments;

·        Realised investment holding gains and losses;

·        Foreign exchange gains and losses;

·        Performance fee;

·        Reissue of ordinary shares from treasury;

·        Repurchase of ordinary shares in issue; and

·        Dividends paid to shareholders.

Note: Unrealised unquoted holding gains are not distributable.

(iv) Revenue reserve:
Comprises accumulated undistributed revenue profits and losses.

(p) New and revised accounting standards
There were no new IFRSs or amendments to IFRSs applicable to the current year which had any significant impact on the Company's financial statements.

(i) The following new or amended standards became effective for the current annual reporting period and the adoption of the standards and interpretations have not had a material impact on the financial statements of the Company.

Standards and Interpretations		Effective for periods commencing on or after
Amendments to IAS 1 Presentation of Financial Statements ·        Non-current liabilities with Covenants ·        Deferral of Effective Date Amendment (published 15 July 2020) ·        Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) (publicised 23 January 2020)	The amendments clarify that only covenants with which an entity must comply on or before the reporting date will affect a liability's classification as current or non-current and the disclosure requirement in the financial statements for the risk that non-current liabilities with covenant could become repayable within twelve months.	1 January 2024
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)	The amendments address the disclosure requirements to enhance the transparency of supplier finance arrangements and their effects on a company's liabilities, cash flows and exposure to liquidity risk.	1 January 2024

 

(ii) At the date of authorisation of the Company's financial statements, the following relevant standards that potentially impact the Company are in issue but are not yet effective and have not been applied in the financial statements:

Standards and Interpretations		Effective for periods commencing on or after
Lack of Exchangeability (Amendments to IAS 21)	The amendments specify how to assess whether a currency is exchangeable and how to determine a spot exchange rate if it is not.	1 January 2025
Annual Improvements to IFRS Accounting Standards - Volume 11	The amendments clarify the requirements for: Hedge accounting by a first-time adopter (IFRS 1 First-time Adoption of International Financial Reporting Standards); Gain or loss on derecognition (IFRS 7 Financial Instruments: Disclosures); Transaction price (IFRS 9 Financial Instruments); Derecognition of lease liabilities (IFRS 9); Determination of a 'de facto agent' (IFRS 10 Consolidated Financial Statements) and Cost method (IAS 7 Statement of Cash Flows).	1 January 2026
Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification and Measurement of Financial Instruments	The amendments address two of the issues identified during the post-implementation review of IFRS 9, being the derecognition of a financial liability settled through electronic transfer and the classification of financial assets, it also introduces new and amended disclosure requirements.	1 January 2026

 

The Directors expect that the adoption of the standards listed above will have either no impact or that any impact will not be material on the financial statements of the Company in future periods.

2. Gains on investments held at fair value through profit or loss

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
Gains on sales of investments based on historic cost	14,686	11,923
Amounts recognised in investment holdings losses in the previous year in respect of investments sold in the year	3,486	12,199
	---------------	---------------
Gains on sales of investments based on the carrying value at the previous Statement of Financial Position date	18,172	24,122
Net movement in investment holding gains	(13,437)	17,498
	---------------	---------------
Gains on investments held at fair value through profit or loss	4,735	41,620
	=========	=========
Gains/(losses) attributable to:
Quoted investments	7,868	36,155
Unquoted investments	(3,133)	5,465
	---------------	---------------
	4,735	41,620
	=========	=========

 

3. Income

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
Income from investments:
UK dividends	102	146
Overseas dividends	184	899
	---------------	---------------
	286	1,045
	=========	=========
Other income:
Deposit interest	228	218
	---------------	---------------
Total income	514	1,263
	=========	=========

 

4. Management and performance fees

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
Management fee (allocated to revenue)	1,638	1,297
Performance fees (allocated to capital)	2,665	904
	=========	=========

 

The basis for calculating the investment management fee and any performance fees are set out in the Directors' Report in the full Annual Report and Financial Statements.

Following the investments into the SV unquoted funds, the management fees are paid through the venture capital investments. Venture capital fees paid through the investments in the SV unquoted funds in the year were £648,000 (2024: £691,000). The total management fee on a comparative basis was £2,286,000 (2024: £1,988,000).

Refer to note 18, Transactions with the Manager and related party transactions, for further details.

5. Administrative expenses

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
General expenses	610	723
Directors' fees*	183	218
Company secretarial and administration fees	100	111
Auditors' remuneration for audit services1	74	77
	---------------	---------------
	967	1,129
	=========	=========

1     There are no non-audit services performed by the auditors during the year (2024: none).

*     A one off fee, amounting to £46,310 in total, was paid to the Directors following the completion of the change of Manager in November 2023 to compensate the Directors for the considerable additional time associated with the transaction. Full details are provided in the Directors' Remuneration Report.

6. Finance costs

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
Interest on loan and overdraft	1,940	2,198
	=========	=========

 

All finance costs are allocated 100% to revenue.

7. Taxation
(a) Analysis of tax charge for the year

	For the year ended 31 August 2025			For the year ended 31 August 2024
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Irrecoverable overseas tax	28	-	28	135	-	135
	---------------	---------------	---------------	---------------	---------------	---------------
Taxation for the year	28	-	28	135	-	135
	=========	=========	=========	=========	=========	=========

 

The Company has no corporation tax liability for the year ended 31 August 2025 (2024: the same).

(b) Factors affecting tax charge for the year
The tax assessed for the year ending 31 August 2025 is higher (2024: lower) than the Company's applicable rate of corporation tax for that year of 25% (2024: 25%).

The factors affecting the tax charge for the year are as follows:

	For the year ended 31 August 2025			For the year ended 31 August 2024
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Net (loss)/return before taxation	(4,031)	2,889	(1,142)	(3,361)	42,372	39,011
Net (loss)/return before taxation multiplied by the Company's applicable rate of corporation tax for the year of 25% (2024: 25%)	(1,008)	722	(286)	(840)	10,593	9,753
Effects of:
Revenue not chargeable to corporation tax	(63)	-	(63)	(261)	-	(261)
Tax exempt capital returns on investments	-	(1,143)	(1,143)	-	(10,405)	(10,405)
Non taxable exchange gains	-	(245)	(245)	-	(414)	(414)
Non taxable expenses not utilised in the year	1,071	666	1,737	1,101	226	1,327
Irrecoverable overseas tax	28	-	28	135	-	135
	---------------	---------------	---------------	---------------	---------------	---------------
Taxation for the year	28	-	28	135	-	135
	=========	=========	=========	=========	=========	=========

 

(c) Deferred taxation
The Company has an unrecognised deferred tax asset of £23,062,000 (2024: £21,345,000) based on a main rate of corporation tax of 25% (2024: 25%). The main rate of corporation tax increased to 25% for fiscal years beginning on or after 1 April 2023.

The deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the composition of the Company's portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the financial statements.

Given the Company's status as an investment trust company, no provision has been made for deferred tax on any capital gains or losses arising on the revaluation or disposal of investments.

8. (Loss)/earnings

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
Net revenue loss	(4,059)	(3,496)
Net capital profit	2,889	42,372
	---------------	---------------
Total (loss)/profit	(1,170)	38,876
	=========	=========
Weighted average number of ordinary shares in issue during the year*	35,541,347	38,184,030
Revenue loss per share (pence)	(11.42)	(9.16)
Capital profit per share (pence)	8.13	110.97
Total (loss)/earnings per share (pence)	(3.29)	101.81
	=========	=========

*     Excluding those ordinary shares held in treasury.

9. DIVIDENDS PAID
(a) Dividends paid and declared

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
2025 First interim dividend paid of 15.56p per share (2024: 13.90p per share)	5,626	5,391
2025 Second interim dividend paid of 16.17p per share (2024: 14.50p per share)	5,570	5,377
	---------------	---------------
Total dividends paid of 31.73p per share (2024: 28.40p per share)	11,196	10,768
	=========	=========

 

Dividends are included in the financial statements in the year in which they are paid.

The Company is not required to pay a dividend under the requirements of Section 1158 CTA due to the negative accumulated balance on its revenue reserve. The above dividends are paid out of the capital reserve.

10. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
(a) Analysis of investments

	At 31 August 2025 £'000	At 31 August 2024 £'000
Quoted overseas	247,853	270,883
	---------------	---------------
	247,853	270,883
	=========	=========
Unquoted in the United Kingdom	9,898	8,813
Unquoted overseas	11,169	17,811
	---------------	---------------
	21,067	26,624
	=========	=========
Valuation of investments	268,920	297,507
	=========	=========

 

(b) Movements on investments

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
Opening book cost	277,196	311,290
Opening investment holdings gains/(losses)	20,311	(9,386)
	---------------	---------------
Opening fair value	297,507	301,904
	=========	=========
Analysis of transactions made during the year
Purchases at cost	576,780	349,648
Sales proceeds	(610,102)	(395,665)
Gains on investments held at fair value through profit or loss	4,735	41,620
	---------------	---------------
Closing fair value	268,920	297,507
	=========	=========
Closing book cost	258,560	277,196
Closing investment holding gains	10,360	20,311
	---------------	---------------
Closing fair value	268,920	297,507
	=========	=========

 

The Company received £610,102,000 (2024: £395,665,000) from disposals of investments in the year. The book cost of these investments when they were purchased was £595,416,000 (2024: £383,742,000). 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.

The investment holding gains of £10,360,000 (2024: £20,311,000) have not been further analysed between those amounts that are distributable and those that are not distributable.

The following transaction costs, mainly comprising brokerage commissions, were incurred during the year:

	For the year ended 31 August 2025 £'000	For the year ended 31 August 2024 £'000
On acquisitions	228	146
On disposals	179	122
	---------------	---------------
	407	268
	=========	=========

 

(c) Significant undertakings
The Company has interests of 3% or more of any class of capital in the following investee companies:

	Class of shares held	% of class held	Country of incorporation
TopiVert	Series A	12.01%	UK
TopiVert	Series B	19.65%	UK
	=========	=========	=========

 

The Company has a holding of 11.2% in the unquoted fund SV BCOF and 7.7% in the unquoted fund SV Fund VI which are both managed by SV Health. These percentages are of the underlying fund share capital and not the NAV of the company.

The total invested in both funds to date is £37.3m (at cost). The investment is drawn not committed.

Arrangements are in place to ensure there is no double charging of management fees.

(d) Disposals of unquoted investments
There were no significant unquoted investment disposals during the year (2024: nil).

(e) Significant changes in fair values of unquoted investments
During the year under review the following unquoted investments were written (down/up) (adjusted for currency movements) by:

	Write (down/up) 2025 £'000	Write (down/up) 2024 £'000
SV Fund VI*	(4,788)	(985)
SV BCOF*	1,086	3,233
	=========	=========

*     The movement in Fair Value (FV) loss was a combination of distributions from the above funds of £4.4 million (2024: £5.7million), capital contributions of £3.5 million (2024: £3.0 million), and foreign currency and FV losses of £2.8 million (2024: £5.0 million),

11. Receivables

	At 31 August 2025 £'000	At 31 August 2024 £'000
Receivables
Dividends and interest receivable	49	109
Prepaid expenses	21	7
Tax recoverable	35	45
VAT recoverable	31	54
	---------------	---------------
	136	215
	=========	=========

 

12. Cash and cash equivalents
Cash and cash equivalents include the following for the purposes of the Statement of Cash Flows:

	At 31 August 2025 £'000	At 31 August 2024 £'000
Cash at bank	14,980	10,433
	---------------	---------------
Cash and cash equivalents	14,980	10,433
	=========	=========

 

13. Current liabilities

	At 31 August 2025 £'000	At 31 August 2024 £'000
Payables
Bank loan	29,607	22,827
Securities purchased awaiting settlement	2,063	1,872
Accrued expenses	2,957	1,191
	---------------	---------------
	34,627	25,890
	=========	=========

 

The Company arranged a £55 million secured credit facility revolving on a monthly basis with The Bank of Nova Scotia, effective from 16 November 2023 and amended and restated on 14 November 2024. Interest is payable at the aggregate of the compounded Risk Free Rate ("RFR") for the relevant currency and loan period, plus a margin. Amounts are normally drawn down on the facility for a one month period, at the end of which it may be rolled over or adjusted. As at 31 August 2025, the Company had a drawdown amount $40.0 million (£29.6 million) (2024: $30.0 million or £22.8 million) which carries an interest of 5.44% per annum (2024: 6.5%). The revolving credit facility is secured on all the Company's assets (except for level 3 assets) and undertakings both present and future. The drawings are subject to covenants and restrictions which are customary for a facility of this nature and all of these have been complied with.

14. Capital commitments - contingent assets and liabilities
The Company made a $30.0 million commitment to SV Fund VI in 2016. Of this $30.0 million commitment, the Company has further commitments of $2.2 million as at 31 August 2025 (2024: $3.0 million). The outstanding capital commitments are callable by SV Fund VI at any time.

While the fund will no longer make new investments, additional follow on investments are likely to be made by the fund into its investee companies.

The Company has a commitment of $30.0 million to SV BCOF (2024: $30.0 million). The Company made no further commitments in 2025 (2024: nil). Of this commitment, the Company has further commitments of $18.3 million (including recallable distributions) as at 31 August 2025 (2024: $21.5 million).

15 Share capital

	2025 £'000	2024 £'000
Ordinary shares of 25p each, allotted, called-up and fully paid:
Opening balance of 36,834,910 (2024: 39,318,183) shares, excluding shares held in treasury	9,209	9,830
Repurchase of 3,107,419 (2024: 2,483,273) shares into treasury	(777)	(621)
Sub total of 33,727,491 (2024: 36,834,910) shares, excluding shares held in treasury	8,432	9,209
7,656,326 (2024: 4,548,907) shares held in treasury	1,914	1,137
Closing balance of 41,383,817 (2024: 41,383,817) shares	10,346	10,346
	=========	=========

 

The ordinary shares rank pari passu, and each share carries one vote. The ordinary shares held in treasury have no voting rights and are not entitled to dividends. The nominal value of each share is 25p.

During the year, the Company purchased 3,107,419 of its own shares, nominal value of £777,000 to hold in treasury for a total consideration of £20,489,000 representing 7.5% of the shares outstanding at the beginning of the year (including shares held in treasury). The reason for these shares purchases was to seek to manage the volatility of the share price discount to net asset value per share.

16. Reserves

			Capital reserves
	Share premium1 £'000	Capital redemption reserve1 £'000	Gains and losses on sales of Investment2 £'000	Investment holding gains and losses3 £'000	Revenue reserve4 £'000
At 1 September 2024	29,873	31,482	243,207	21,384	(54,027)
Gains on sales of investments based on the carrying value at the previous Statement of Financial Position date	-	-	18,172	-	-
Net movement in investment holding gains and losses	-	-	-	(13,437)	-
Transfer on disposal of investments	-	-	(3,486)	3,486	-
Realised exchange losses on cash and short-term deposits	-	-	(161)	-	-
Exchange gains on foreign currency loan	-	-	347	633	-
Performance fees allocated to capital	-	-	(2,665)	-	-
Share repurchases into treasury	-	-	(20,490)	-	-
Dividend paid	-	-	(11,196)	-	-
Net revenue loss for the year	-	-	-	-	(4,059)
	---------------	---------------	---------------	---------------	---------------
At 31 August 2025	29,873	31,482	223,728	12,066	(58,086)
	=========	=========	=========	=========	=========

 

			Capital reserves
	Share premium1 £'000	Capital redemption reserve1 £'000	Gains and losses on sales of Investment2 £'000	Investment holding gains and losses3 £'000	Revenue reserve4 £'000
At 1 September 2023	29,873	31,482	258,533	(9,386)	(50,531)
Gains on sales of investments based on the carrying value at the previous Statement of Financial Position date	-	-	24,122	-	-
Net movement in investment holding gains and losses	-	-	-	17,498	-
Transfer on disposal of investments	-	-	(12,199)	12,199	-
Realised exchange losses on cash and short-term deposits	-	-	(247)	-	-
Exchange gains on foreign currency loan	-	-	830	1,073	-
Performance fees allocated to capital	-	-	(904)	-	-
Share repurchases into treasury	-	-	(16,160)	-	-
Dividend paid	-	-	(10,768)	-	-
Net revenue loss for the year	-	-	-	-	(3,496)
	---------------	---------------	---------------	---------------	---------------
At 31 August 2024	29,873	31,482	243,207	21,384	(54,027)
	=========	=========	=========	=========	=========

1     These reserves are not distributable.

2     These are realised (distributable) capital reserves which may be used to repurchase the Company's own shares or distributed as dividends.

3     This reserve comprises holding gains on liquid investments (which may be deemed to be realised) and other amounts which are unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to repurchase the Company's own shares) and those that are unrealised.

4     The revenue reserve may be distributed as dividends or used to repurchase the Company's own shares (subject to being a positive balance). A negative revenue reserve will reduce any distributable reserves available in the capital reserve.

17. Net asset value per share

	At 31 August 2025 £'000	At 31 August 2024 £'000
Net assets attributable to shareholders (£'000)	249,409	282,265
Shares in issue at year-end	33,727,491	36,834,910
	---------------	---------------
Net asset value per share (pence)	739.48	766.30
	=========	=========

 

18. Transactions with the Manager and related party transactions
(a) Transactions with the AIFM/Investment Manager
With effect from 20 November 2023, Schroder Unit Trusts Limited ("SUTL") has been appointed as the Company's AIFM. SUTL agreed to waive its management fee for the first six months from 20 November 2023, after which the management fee payable by the Company on its quoted portfolio will be 0.7% per annum. Please see note 21 for details on the new terms of the management fee post year end.

Details of the management and performance fee agreements are given in the Directors' Report in the full Annual Report and Financial Statements. The management fee payable in respect of the year amounted to £2,286,000 (2024: £1,988,000), which includes £648,000 (2024: £691,000) paid to SV Health for the Company's investment into the SV unquoted funds. As at year-end, £137,000 was outstanding to SUTL (2024: £308,000).

Fees paid to the investment manager/adviser:	2025 £'000	2024 £'000
Management fee paid by the Company directly to SUTL	1,638	498**
Management fee paid through unquoted funds to SV Health	-	154
Adviser fee paid through unquoted funds to SV Health	648	537
Management fee paid by the Company directly to SV Health Managers LLP	-	799*
Accounting and administration fee payable by the Company directly to SUTL	100	78
	---------------	---------------
Total	2,386	2,066
	=========	=========

*     Includes a termination fee of £289,439 paid to SV Health.

**    Reflects SUTL agreed waiver of six months management fees from 20 November 2023 to 20 May 2024 under the terms of the new AIFM agreement.

Performance fees of £2,665,000 were payable for the year ended 31 August 2025 (2024: £904,000). Of the £2,665,000 payable, £299,000 was outstanding to SV Health and £2,366,000 was outstanding to SUTL at the year end. Please refer to note 21 for details of the new terms under which a quoted performance fee is payable, including the related party opinion provided by Deutsche Numis, the Company's corporate broker.

Under the terms of the AIFM agreement, SUTL is entitled to receive an annual fee of £100,000 in respect of the accounting and administration services it provides to the Company. The administration fee payable in respect of the period under SUTL was £100,000 of which £8,000 was outstanding at the year end.

SV Health will continue to provide ongoing investment management assistance to the Company in respect of the exited investments with contingent milestones, the exited investments in liquidation and the directly held unquoted investments in consideration for payment of a performance fee on the same terms as previously set out in the Directors' Report on page 41 of the Annual Report for the year ended 31 August 2023.

(b) Related party transactions
The Directors of the Company are key management personnel. The total remuneration payable to Directors in respect of the year ended 31 August 2025 was £183,500 (2024: £218,000) of which £29,000 (2024: £27,000) was outstanding at the year end. 2024 includes a one off fee of £46,310 for the additional work in relation to the change of AIFM. Please refer to note 21 for details of a new post year end related party transaction with Schroders Capital.

19. Financial instruments
Risk management policies and procedures
The Company's financial assets and liabilities, in addition to short-term debtors and creditors and cash, comprise financial instruments which include investments in equity.

The holding of securities, investment activities and associated financing undertaken pursuant to the investment policy involve certain inherent risks. Events may occur that would result in either a reduction in the Company's net assets or a reduction of the total return.

The main risks arising from the Company's pursuit of its investment objective are those that affect stock market levels: market risk, credit risk and liquidity risk. In addition, there are specific risks inherent in investing in the biotechnology sector. The Board reviews and agrees policies for managing these risks, as summarised below. These policies have remained substantially unchanged throughout the current and preceding year. In assessing any changes to these risks, the Board considered changes in the economic and geopolitical climate, including the resurgence of the conflict in the Middle East; the continuing war in Ukraine and the increasingly tense relations between the US and China, and noted that it did not have a significant impact on the risk management policies for the year end 31 August 2025.

19.1 Market risk
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - price risk, currency risk and interest rate risk. The Portfolio Managers assesses the exposure to market risk when making each investment decision, and monitor the overall level of market risk on the whole of the investment portfolio on an ongoing basis.

(a) Price risk
The Company is an investment company and as such its performance is dependent on the valuation of its investments. A breakdown of the investment portfolio is given in the full Annual Report and Financial Statements. Market price risk arises mainly from uncertainty about future prices of the financial instruments held.

Management of the risk
The Board regularly considers the asset allocation of the portfolio as part of the process of managing the risks associated with the biotechnology sector, described in greater detail in the section on specific risk (note 19.4), whilst continuing to follow the investment objective. It is not the Company's current policy to use derivative instruments to hedge the investment portfolio against market price risk.

Price risk exposure
At the year end, the Company's assets exposed to market price risk were as follows:

	At 31 August 2025 £'000	At 31 August 2024 £'000
Non-current asset investments at fair value through profit or loss	268,920	297,507
	---------------	---------------
Total	268,920	297,507
	=========	=========

 

The level of assets exposed to market price risk decreased by approximately 9.6% (2024: 1.5%) during the year, through a combination of acquisitions and disposal of investments and changes in fair values.

Concentration of exposure to price risk
The Company currently holds investments in 84 (2024: 83) companies (excluding those valued at nil), in a mixture of quoted and unquoted investments in a variety of countries, which significantly spreads the risk of individual investments performing poorly and reduces the concentration of exposure.

This includes the Company's investment into SV Fund VI and SV BCOF as two unquoted holdings. However, SV Fund VI and SV BCOF have 13 and 13 companies, respectively, in their own portfolios. The classification of investments by sector is provided within the Investment Portfolio section of the report.

Price risk sensitivity
The following table illustrates the sensitivity of the profit for the year and the equity to an increase or decrease of 10% (2024: 10%) in the fair values of the Company's investments. The Board believes that a 10% (2024: 10%) movement is sufficient to provide a reasonable range that could have affected the investment valuations at the year end. This level of change is considered to be reasonably possible based on observation of current market conditions and based on the average total share price percentage return over the last five years on the 'Ten-Year Financial Record' page.

The sensitivity analysis is based on the Company's investments at each Statement of Financial Position date, with all other variables held constant.

	31 August 2025		31 August 2024
	Increase in fair value £'000	Decrease in fair value £'000	Increase in fair value £'000	Decrease in fair value £'000
Company:
Effect on net revenue return	(188)	188	(208)	208
Effect on net capital return	26,892	(26,892)	29,751	(29,751)
	---------------	---------------	---------------	---------------
Effect on total net return and net assets	26,704	(26,704)	29,543	(29,543)
	=========	=========	=========	=========

 

(b) Currency risk
The financial statements of the Company are denominated in sterling. However, the majority of the Company's assets and the total return are denominated in US dollars, accordingly the total return and capital value of the Company's investments can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge against foreign currency movement.

Management of the risk
The Manager monitors the Company's exposure to foreign currencies on a daily basis, and reports to the Board on a regular basis.

Foreign currency exposure
The fair values of the Company's monetary items that have foreign currency exposure at 31 August 2025 are shown below. Where the Company's equity investments (which are not monetary items) are priced in a foreign currency, they have been included separately in the analysis so as to show the overall level of exposure.

Monetary assets/(liabilities)	At 31 August 2025 £'000	At 31 August 2024 £'000
Cash and cash equivalents:
US dollars	14,138	7,009
	---------------	---------------
Short term receivables:
US dollars	65	109
Danish krone	4	13
	---------------	---------------
Short term payables:
US dollars	(31,316)	(24,716)
	---------------	---------------
Foreign currency exposure on net monetary items	(17,109)	(17,585)
	=========	=========
Non-current asset investments held at fair value
US dollars	268,539	291,948
Euros	-	5,178
	---------------	---------------
Total net foreign currency exposure	251,430	279,541
	=========	=========

 

At the year end, approximately 100.8% (2024: 99.0%) of the Company's net assets were denominated in currencies other than sterling, reflecting a small overall net sterling liability at year end, compared with a small net sterling asset balance at the end of 2024. This level of exposure is broadly representative of the levels throughout the year.

Foreign currency sensitivity
The Company measures foreign currency sensitivity by calculating the standard deviation of rates throughout the financial year. On this basis sterling strengthened by 2.8% against the US dollar and weakened by 2.8% against the Euro, 2.7% against the Danish krone, 3.2% against the Swiss franc and by 5.0% against Swedish krona (2024: strengthened 3.7%, 1.7%, 1.8% and weakened by 0.4% and 3.0% respectively). Given the movements over the last two years, a change of 10% or even more is possible.

The following table illustrates the sensitivity of the profit after taxation for the year and the equity in regard to the Company's financial assets and financial liabilities, assuming a 10% (2024: 10%) change in exchange rates.

If sterling had weakened by 10% against the exposure currencies, with all other variables held constant, this would have affected Company net assets and net profit for the year attributable to equity shareholders as follows:

	At 31 August 2025 £'000	At 31 August 2024 £'000
US dollars	25,143	27,435
Euros	-	518
Danish krone	-	1
	---------------	---------------
	25,143	27,954
	=========	=========

 

If sterling had strengthened by 10% against the exposure currencies, with all other variables held constant, this would have affected Company net assets and net profit after taxation attributable to equity shareholders as follows:

	At 31 August 2025 £'000	At 31 August 2024 £'000
US dollars	(25,143)	(27,435)
Euros	-	(518)
Danish krone	-	(1)
	---------------	---------------
	(25,143)	(27,954)
	=========	=========

 

In the opinion of the Directors, the above sensitivity analyses are not necessarily representative of the year as a whole, since the level of exposure changes as part of the currency risk management process used to meet the Company's objectives.

(c) Interest rate risk
The Company will be affected by interest rate changes as it holds interest-bearing financial assets and liabilities. Interest rate changes will also have an impact on the valuation of investments, although this forms part of price risk, which is considered separately above.

Management of the risk
Interest rate risk is limited by the Company's financial structure with operations mainly financed through the share capital, share premium and retained reserves. The majority of the Company's financial assets are, under normal circumstances, equity shares and other investments which neither pay interest nor have a stated maturity date. Liquidity and loan facilities are managed with the aim of increasing returns for shareholders.

In the normal course of business, the Company's policy is to be fully invested and, other than as arising from the timing of investment transactions, the cash holding is kept to a minimum.

It is not the Company's policy to use derivative instruments to mitigate interest rate risk, as the Board believes that the effectiveness of such instruments does not justify the costs involved.

Interest rate exposure
The exposure of financial assets and financial liabilities to floating rates, giving cash flow interest risk when rates are re-set, is shown below:

	At 31 August 2025 £'000	At 31 August 2024 £'000
Exposure to floating interest rates:
Cash and cash equivalents	14,980	10,433
Other payables: drawings on credit facility	(29,607)	(22,827)
	---------------	---------------
Total exposure	(14,627)	(12,394)
	=========	=========

 

The above year end amounts are not representative of the exposure to interest rates during the year as the level of cash balances and drawings on the secured credit facility have fluctuated. The maximum and minimum net interest rate exposure during the year has been as follows:

	At 31 August 2025 £'000	At 31 August 2024 £'000
Maximum interest rate exposure during the year - net debt	(34,762)	(34,101)
Minimum/maximum interest rate exposure during the year - net (debt)/cash	(6,874)	117
	=========	=========

 

Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 3.0% (2024: 3.0%) increase or decrease in interest rates in regards to the Company's monetary financial assets and financial liabilities. This level of change is considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company's monetary financial instruments held at the Statement of Financial Position date with all other variables held constant.

The sensitivity analysis is based on the Company's monetary financial instruments held at each Statement of Financial Position date, with all other variables held constant.

	31 August 2025		31 August 2024
	3% increase in rate £'000	3% decrease in rate £'000	3% increase in rate £'000	3% decrease in rate £'000
Effect on net revenue return	(439)	439	(372)	372
Effect on net capital return	-	-	-	-
	---------------	---------------	---------------	---------------
Effect on total net return	(439)	439	(372)	372
	=========	=========	=========	=========

 

In the opinion of the Directors, this sensitivity analysis may not be representative of the Company's future exposure to interest rate changes due to fluctuations in the level of cash balances and drawings on the secured credit facility.

(d) Loss of investor appetite
Loss of investor appetite risk is the risk that there will be a loss of investor appetite for investing in the sector as a result of political conditions, including FDA and FTC policy, or declining interest in IPOs.

Management of the risk
Loss of investor appetite risk is mitigated as the Portfolio Managers update the Board monthly and at each scheduled Board meeting on issues pertinent to the portfolio and the biotechnology sector generally, including expected future drivers.

Loss of investor appetite risk exposure
At an investment trust that invests in the biotechnology sector, the Company has a moderate loss of investor appetite risk exposure.

19.2 Credit risk
Credit risk is the exposure to loss from failure of a counterparty to deliver securities or cash for acquisitions or disposals of investments. Additionally, the Company has funds on deposit with banks or in money market funds. HSBC Bank plc was the custodian of the Company's assets prior to 3 October 2025. The Company's investments are held in accounts which are segregated from the custodian's own trading assets.

If the custodian were to be become insolvent, the Company's right of ownership is clear and they are therefore protected. However cash balances deposited with the custodian may be at risk in this instance, as the Company would rank alongside other creditors.

Management of the risk
During the year the Company bought and sold investments only through brokers which had been approved by the Manager as acceptable counterparties. In addition, limits are set as to the maximum exposure to any individual broker that may exist at any time. These limits are reviewed regularly.

Cash balances will only be deposited with reputable banks with high quality credit ratings.

	At 31 August 2025 £'000	At 31 August 2024 £'000
Accrued income	49	109
Cash at bank	14,980	10,433
	---------------	---------------
	15,029	10,542
	=========	=========

 

All of the above financial assets are current, their fair values are considered to be the same as the values shown and the likelihood of a material credit default is considered to be low.

None of the Company's financial assets are past due or impaired.

19.3 Liquidity risk
Liquidity risk is the possibility of failure of the Company to realise sufficient assets to meet its financial liabilities.

Management of the risk
Liquidity and cash flow risk are mitigated as the Portfolio Managers aim to hold sufficient Company assets in the form of readily realisable securities which can be sold to meet funding commitments as necessary. In addition, the Company has a secured credit facility with The Bank of Novia Scotia, London branch, of £55.0 million (2024: same).

It should be noted, however, that investments in unquoted securities will not be readily realisable. Furthermore, even where the Company holds an investment in quoted securities, the Company may be restricted in its ability to trade that investment either because the investment becomes subject to restrictions when the company concerned becomes publicly quoted or, at certain times, as a consequence of the Company being privy to confidential price sensitive information as a result of the Portfolio Managers' active involvement in that company.

Liquidity risk exposure
As an investment trust, the Company has limited liquidity risk. In any event, the Company estimates it could liquidate 91% (2024: 87%) of the portfolio within five days if required. A summary of the Company's financial liabilities is provide in sub-note 19.6.

19.4 Sector specific risk
As well as the general risk factors outlined above, investing in the biotechnology sector carries some particular risks:

(a)     the stock prices of publicly quoted biotechnology companies have been characterised by periods of high volatility;

(b)     a significant proportion of the Company's investments will be in companies whose securities are not publicly traded or freely marketable and may, therefore, be difficult to realise. In addition, there are inherent difficulties in valuing unquoted investments and the realisations from sales of investments could be less than their carrying value;

(c)     biotechnology companies typically have a limited product range and those products may be subject to extensive government regulation. Obtaining necessary approval for new products can be a lengthy process, which is expensive and uncertain as to outcome;

(d)     technological advances can render existing biotechnology products obsolete;

(e)     intense competition exists in certain product areas in relation to obtaining and sustaining proprietary technology protection and the complex nature of the technologies involved can lead to patent disputes;

(f)      certain biotechnology companies may be exposed to potential product liability risks, particularly in relation to the testing, manufacturing and sales of healthcare products;

(g)     biotechnology companies spend a considerable proportion of their resources on R&D, which may be commercially unproductive or require the injection of further funds to exploit the results of their work; and

(h)     the growing cost of providing healthcare has placed financial strains on governments, insurers, employers and individuals, all of whom are searching for ways to reduce costs. As a result, certain areas may be affected by price controls and reimbursement limitations.

19.5 Fair values of financial assets and financial liabilities
All financial assets and liabilities are either carried in the Statement of Financial Position at fair value or the Statement of Financial Position amount is a reasonable approximation of fair value. The fair value of quoted shares and securities is based on the bid price or last traded price, depending on the convention of the exchange on which the investment is quoted.

Unquoted investments are valued in accordance with IPEVC Guidelines. The methods commonly used to value unquoted securities are stated in accounting policy 1(f).

19.6 Summary of financial assets and financial liabilities by category
The carrying amounts of the Company's financial assets and financial liabilities as recognised at the Statement of Financial Position date of the reporting periods under review are categorised as follows:

Financial assets	At 31 August 2025 £'000	At 31 August 2024 £'000
Financial assets at fair value through profit or loss:
Non-current asset investments - designated as such on initial recognition	268,920	297,507
Cash and receivables:
Current assets:
Receivables	136	215
Cash at bank	14,980	10,433
	---------------	---------------
	15,116	10,648
	=========	=========

 

Financial liabilities	At 31 August 2025 £'000	At 31 August 2024 £'000
Measured at amortised cost
Creditors: amounts falling due within one month:
Purchases awaiting settlement	2,063	1,872
Bank loan	29,607	22,827
Accruals	2,957	1,191
	---------------	---------------
	34,627	25,890
	=========	=========

 

Note: Amortised cost is the same as the carrying value shown above.

19.7 Disclosures regarding financial instruments measured at fair value
The Company's portfolio of investments, which may comprise investments in quoted equities and unquoted holdings, are carried in the Statement of Financial Position at fair value. Other financial instruments held by the Company may comprise amounts due to or from brokers, dividends and interest receivable, accruals, cash at bank and drawings on the secured credit facility.

For these instruments, the Statement of Financial Position amount is a reasonable approximation of fair value.

The investments are categorised into a hierarchy comprising the following three levels:

Level 1 - valued using quoted prices in active markets.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

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

Details of the valuation techniques used by the Company are given in the accounting policies noted in the full Annual Report and Financial Statements.

(i) Financial assets at fair value through profit and loss

	31 August 2025
	Total £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000
Equity investments	268,920	247,853	-	21,067
	---------------	---------------	---------------	---------------
Total	268,920	247,853	-	21,067
	=========	=========	=========	=========

 

	31 August 2024
	Total £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000
Equity investments	297,507	270,883	-	26,624
	---------------	---------------	---------------	---------------
Total	297,507	270,883	-	26,624
	=========	=========	=========	=========

 

There were no transfers between levels 1, 2 or 3 during the period (2024: same). A reconciliation of fair value measurements in Level 3 is set out below.

(iii) Level 3 investments at fair value through profit or loss

	2025 £'000	2024 £'000
Opening valuation	26,624	25,262
Capital contributions	3,513	2,995
Distributions	(5,937)	(7,098)
Total gains/(losses) included in the Statement of Comprehensive Income
On assets realised	4,035	(5,701)*
On assets held at the year end	(7,168)	11,166*
Closing valuation	21,067	26,624
	=========	=========

*     The prior year gains and losses on assets realised and on assets held at year end have been reallocated as a result of subsequent information received from the previous custodian post migration in 2023.

(iii) Level 3 investments at fair value through profit and loss - price risk sensitivity
Investments are reported at their fair values. A full list of the Company's investments is given in the full Annual Report and Financial Statements. As at 31 August 2025, 99.4% of the Company's net asset value is invested in level 1 investments and 8.45% in level 3 investments.

The fair value of level 3 investments is influenced by the estimates, assumptions and judgements made in the valuation process. A sensitivity analysis is provided below which recognises that the valuation methodologies used involve different levels of subjectivity in their inputs in respect of unquoted investments (excluding investments in the SV unquoted funds). The SV unquoted funds do not have significant observable inputs used in the determination of their fair value, as described in note 1 (f). No key estimates or assumptions have been applied to the valuation of SV Fund VI and SV BCOF between date of the last quarterly report received and 31 August 2025.

31 August 2025*			Effect of reasonably possible alternative assumptions
Valuation techniques**	Fair value £'000	Significant unobservable inputs**	Favourable impacts £'000	Unfavourable impacts £'000
Discounted future cash flows	2,486***	Probability estimate of royalty income	257	(256)
		Discount rate	88	(83)
Present value of future milestone payments	350	Probability estimate of milestone achievement	35	(35)
		Discount rate	2	(2)
Calibration price of a similar investment	341	Calibration price of a similar investment	34	(34)
	---------------		---------------	---------------
	3,177		417	(410)
Net asset value	40	No significant judgements applied	-	-
	---------------		---------------	---------------
	3,217		417	(410)
	=========		=========	=========

 

31 August 2024*			Effect of reasonably possible alternative assumptions
Valuation techniques**	Fair value £'000	Significant unobservable inputs**	Favourable impacts £'000	Unfavourable impacts £'000
Discounted future cash flows	4,382***	Probability estimate of royalty income	438	(438)
		Discount rate	157	(148)
Present value of future milestone payments	309	Probability estimate of milestone achievement	31	(31)
		Discount rate	4	(4)
Calibration price of recent investment	341	Calibration price of recent investment	34	(34)
	---------------		---------------	---------------
	5,032		664	(655)
Net asset value	40	No significant judgements applied	-	-
	---------------		---------------	---------------
	5,072		664	(655)
	=========		=========	=========

*     Investments in the table above have been valued by the adviser for the unquoted portfolio.

**    Excludes investments in the SV unquoted funds.

***  Ikano Therapeutics. There is uncertainty surrounding an on-going lawsuit with CIPLA. The model has been adjusted to account for this uncertainty and now encompasses a probability weighted expected return method (PWERM) to consider the uncertainty of the law-suit ruling. A 33% chance that loss of exclusivity takes effect in 2026, 2027 and 2028 has been used to assess the valuation of Ikano as at 31 August 2025.S

Significant unobservable inputs
The significant unobservable inputs applicable to each type of valuation technique will vary dependent on the particular circumstances of each unquoted company valuation. An explanation of each of the significant unobservable inputs is provided below and includes an indication of the range in value for each input, where relevant. The assumptions made in the production of the inputs are described in note 1(f).

Probability estimate of royalty income
The probability estimate of royalty income is a key variable input in the discounted future cash flow valuation technique used by the adviser and further probability adjusted at 80% (2024: 80%) of the calculated net present value.

Its represents the potential commercial uptake risk, competitor risk and uncertainty around drug pricing. To factor in the uncertainty surrounding the probability estimate of royalty income, the input has been stressed by a factor of +/- 10%. Management is comfortable with the adviser assessment that the largest differential in the flux of the valuations would be 10%.

Probability estimate of milestone achievement
The probability estimate of milestone achievement is a key variable input in the present value of future milestone payments valuation technique used by the adviser and represents the potential risk that commercial milestones are achieved/not achieved in accordance with the estimated timeline. To factor in the uncertainty surrounding the probability estimate of milestone achievement, the input has been stressed by a factor of +/- 10%. Management is comfortable with the adviser's assessment that the largest differential in the flux of the valuations would be 10%.

Discount rate
The application of a risk adjusted discount rate (14% for Ikano Therapeutics (2024: 13.5%)) has been applied by the adviser to discounted future cash flow and present value of future milestone payments valuation techniques. The discount rate takes into account the macro market risk and the liquidity premium. To factor in the uncertainty surrounding the discount rate, the input has been stressed by +/- 2%. Management is comfortable with the adviser's assessment that the largest differential in the flux of the valuations would be 2%.

Calibration price of similar/recent investment
The fair values of the underlying investments are based on the calibration price but remain unadjusted from the recent price of the investment. To factor in the uncertainty surrounding the selection of calibration price, the fair value of the investment at the reporting date has been stressed by +/- 10%.

19.8 CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Company's objectives, policies and processes for managing capital are unchanged from the preceding year.

The Company's debt and capital structure comprises the following:	At 31 August 2025 £'000	At 31 August 2024 £'000
Debt
Bank loan	29,607	22,827
	---------------	---------------
Total debt	29,607	22,827
	=========	=========
Equity
Share capital	10,346	10,346
Reserves	239,063	271,919
	---------------	---------------
Total equity	249,409	282,265
	=========	=========
Total debt and equity	279,016	305,092
	=========	=========

 

The Company's capital management objectives are to ensure that it will continue as a going concern and to maximise total return to its equity shareholders through an appropriate level of gearing.

The Board's policy is to limit gearing to 30%. Gearing for this purpose is defined as borrowings used for investment purposes, less cash, expressed as a percentage of net assets.

	At 31 August 2025 £'000	At 31 August 2024 £'000
Borrowings used for investment purposes, including cash	14,627	12,394
Net assets	249,409	282,265
Gearing	5.9%	4.4%
	=========	=========

 

The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:

(i)      the planned level of gearing, which takes into account the Manager's view of the market;

(ii)     the need to buyback the Company's own shares for cancellation or to hold in treasury, which takes into account the share price discount;

(iii)    the opportunities for issue of new shares or to reissue shares from treasury; and

(iv)    the amount of dividend to be paid, in excess of that which is required to be distributed.

20. SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board.

The Board is of the opinion that the Company is engaged in a single segment of business, namely the investment in biotechnology and other life sciences companies in accordance with the Company's investment objective, and consequently no segmental analysis is provided.

21. POST STATEMENT OF FINANCIAL POSITION EVENTS
After the year end and up to 4 November 2025, 1,351,308 ordinary shares were bought back to be held in treasury. Following the buy backs, the total number of shares in issue was 41,383,817 of which 9,007,634 were held in treasury.

On 4 November 2025, the Company signed a deed of amendment and restatement and an amended and restated AIFM agreement to amend the basis under which a quoted performance fee is payable. The quoted performance fee will now only be payable when a positive total NAV per share return has been achieved. This is defi ned as the movement in the NAV per share, adjusted to include the sum of any dividends paid in addition to the Company's NAV capital return over the relevant calculation period. If a positive total NAV per share return is not achieved, payment of the performance fee will be deferred until the next calculation period in which such a return is achieved.

Eff ective 1 September 2025, the management fee has decreased from 0.70% per annum to 0.65% per annum on the Company's quoted portfolio.

On 30 September 2025, the Company entered into an agreement with Schroders Capital (a related party to the Company) to establish a partnership (the "Partnership") through which the Company intends over time to invest in further unquoted biotechnology opportunities. The Company has made an initial commitment to the Partnership of £10 million. Under the Partnership agreement, Schroders Capital is entitled to a management fee of 0.90% per annum based on the asset value of the Company's investment in the Partnership, with a minimum of £60,000 payable per annum for the fi rst three years, as well as £25,000 per annum for administration costs, with aggregate fees due to Schroders Capital in any one year being capped at 0.25% of the Company's net asset value.

The Manager and Schroders Capital are related parties of the Company under UKLR 11.5.3. The amendment to the basis on which the performance fee is payable constitutes a relevant related party transaction under UKLR 11.5.4R(1). The Board, having been so advised by Deutsche Numis, considers this amendment to be fair and reasonable as far as shareholders are concerned. In providing its advice, Deutsche Numis has taken into account the Board's commercial assessment of the relevant related party transaction. In assessing the Company's obligations under the UK Listing Rules, the Company has as required by UKLR 11.5.4R(2), assessed the materiality of the management fee reduction and new partnership agreement with Schroders Capital which are also relevant related party transactions.

The depository, administration and custody services of the Company transitioned from HSBC Bank plc to J.P. Morgan Europe Limited and JPMorgan Chase Bank, N.A., London Branch, effective 3 October 2025.

No other significant events occurred after the end of the reporting period to the date of this Report require disclosure.

 

 

STATUS OF RESULTS ANNOUNCEMENT

2025 Financial Information

The figures and financial information for 2025 are extracted from the Annual Report and Financial Statements for the year ended 31 August 2025 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements include the Report of the Independent Auditors 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 will be delivered to the Registrar of Companies in due course.

 

2024 Financial Information

The figures and financial information for 2024 are extracted from the Annual Report and Financial Statements for the year ended 31 August 2024 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements include the Report of the Independent Auditors 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 will be delivered to the Registrar of Companies in due course.

 

Neither the contents of the Company's web pages nor the contents of any website accessible from hyperlinks on the Company's web pages (or any other website) is incorporated into, or forms part of, this announcement.

 

5 November 2025

 

For further information:

Natalia de Sousa

Schroder Investment Management Limited

 

E-mail: [email protected]

 

 

Issued by Schroder Investment Management Limited. Registration No 1893220 England.

 

Authorised and regulated by the Financial Conduct Authority.  For regular updates by e-mail please register online at www.schroders.com for our alerting service.

 

ENDS

 

A copy of the 2025 Annual Report and Financial Statements will shortly be submitted to the FCA's National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

 

The 2025 Annual Report and Financial Statements will shortly be available on the Company's web pages at  www.ibtplc.com where up-to-date information on the Company, including daily NAV and share prices, factsheets and portfolio in formation can also be found.