Strategic Equity Capital plc (‘SEC’)

 

Annual Report and Financial Statements for the year ended 30 June 2026

 

Chairman’s Statement

 

I am pleased to present the Annual Report for Strategic Equity Capital plc for the year ended 30 June 2026. The year combined an important corporate milestone for the Company with significant macroeconomic, geopolitical and domestic political developments, which contributed to volatility in equity markets and in the Company’s portfolio performance.

 

Performance and market backdrop

For the year to 30 June 2026, the Company’s net asset value (“NAV”) delivered a total return of -2.2%. The share price total return was +0.6%, while the FTSE Small Cap (ex Investment Trusts) Total Return Index rose by 7.6%. More details on the Company’s performance can be found in the Investment Manager’s report on pages 10 and 11 of the Annual Report. This outcome is disappointing and the Board recognises the relative underperformance experienced by shareholders. It should, however, be considered in the context of a year in which performance and market leadership changed materially between periods.

 

The portfolio performed strongly through to January 2026, with a financial year-to-date NAV total return of approximately 11%, before reversing sharply by approximately 20% from peak to trough during February and March. Widespread concerns about the disruptive potential of artificial intelligence led to indiscriminate selling across entire sectors in the UK and internationally. With a portfolio weighted towards asset-light, intangible-rich businesses, including technology – software, professional services and wealth management companies, the Company’s NAV was particularly exposed to this thematic de-rating despite overwhelmingly positive operational delivery from the underlying investments. On a macro level, the US Iran War and subsequent closure of the Strait of Hormuz raised concerns about the implications for UK energy prices and inflation, adding to the pressure on financial markets and UK smaller-company valuations.

 

The final quarter of the financial year saw a strong, although incomplete, recovery. The Company’s NAV total return was +6.6% in calendar Q2, compared with a 9.6% rise in the comparator index. Over the full year, the share price proved more resilient and the discount to NAV narrowed from 7.5% at 30 June 2025 to 5.0% at 30 June 2026. This is welcome evidence that the Company’s discount-management measures and capital framework are having an effect, although the Board remains alert to the risk that weak demand for UK investment companies could cause the discount to widen again.

 

Artificial intelligence

The Board has considered the competitive implications of artificial intelligence carefully with the Investment Manager. The technology will inevitably alter products, workflows and cost structures across many industries, and each investment case must be tested accordingly. At the same time, work undertaken with investee management teams and sector specialists indicates that the portfolio’s businesses possess durable protections, including proprietary data, deep market and situational expertise, regulatory barriers, embedded customer workflows and trusted system-of-record status that should be resilient to the potential threats posed by AI. In several cases, artificial intelligence should enhance product capability and efficiency rather than undermine the business model.

 

The Investment Manager used the period of weakness to add selectively to high-conviction holdings at depressed valuations. A number of affected share prices recovered during the final quarter as operational delivery remained sound and the initial concerns became more differentiated. The Board supports this disciplined approach, while recognising that the pace of technological change requires continued scrutiny and that not all companies will be equally well placed.

 

Corporate activity

Corporate activity continued to demonstrate the gap between public-market valuations and the prices strategic or private-equity buyers are prepared to pay. Earlier in the year, the takeovers of Inspired and Ricardo enabled value to be realised at substantial premia following periods of active engagement. More broadly, more than £35 billion of takeovers of UK-listed companies were announced in H1 2026. This activity is not a substitute for operational progress, but it provides an additional route through which intrinsic value may be recognised.

 

Realisation opportunity

The 2025 realisation opportunity was the most significant corporate development during the financial year. Following shareholder approval, 9,510,496 Ordinary shares were validly tendered, representing approximately 22% of the Company’s issued share capital. The Board was pleased that holders of approximately 78% of the issued shares chose to remain invested. This retained a stable capital base for the Company and represented a strong endorsement of its differentiated investment proposition.

 

The realisation process was managed in an orderly manner, balancing the pace of returns to realising shareholders with the need to protect NAV for shareholders as a whole. Two interim payments totalling approximately £29 million had been returned by 24 February 2026, representing approximately 75% of the shares validly tendered. The final distribution of £8.8 million will be paid to tendering shareholders on 24 September 2026, ahead of the 31 October 2026 deadline announced in the Circular published last year.

 

Discount management, gearing and dividend

The Board remains committed to disciplined discount management. In line with the framework approved by shareholders, the Board will continue to make 50% of net gains from profitable realisations available to fund share buybacks where the Company’s shares trade at a discount of 5% or more to NAV. The Board has also reaffirmed its intention to provide a further realisation opportunity in 2030, aligning the Company’s capital structure with the long-term nature of the investment strategy and shareholders’ liquidity requirements.

 

The Company continued to operate without a banking loan facility and had no gearing at 30 June 2026, a policy that remains under regular review by the Board and the Investment Manager.

 

The Board is recommending a final dividend of 4.50 pence per Ordinary Share for the year ended 30 June 2026, subject to shareholder approval at the Annual General Meeting. The dividend will be paid on 20 November 2026 to shareholders on the register at 9 October 2026.

 

Board succession

As previously announced, Richard Locke and I will retire from the Board at the conclusion of the 2026 Annual General Meeting returning the Board to its normal size of five directors. Howard Williams will succeed me as Chair. Howard has brought substantial investment management and governance experience to the Board, and I am confident that the Company will benefit from his leadership.

 

I am also pleased to welcome Will Rogers and Guy Walker, whose appointments as non-executive Directors took effect on 1 September 2026. Will brings corporate finance, legal and governance experience, while Guy brings extensive investment management and investment trust experience. Their complementary skills will further strengthen the Board. Please note their bios on pages 30 and 31 of the Annual Report.

 

It has been a privilege to serve as a Director of the Company since 2016 and as Chair since 2022. I would like to thank my fellow Directors, the Investment Manager and our advisers for their support and commitment, particularly through the implementation of the realisation opportunity and the periods of market volatility covered by this report.

 

Outlook

The outlook at the date of this report remains uncertain. A tentative ceasefire and improved oil flows through the Strait of Hormuz supported markets in June, but renewed attacks after the year end underline the fragility of the position. The portfolio has limited direct exposure to global trade disruption, but no UK company is entirely insulated from the effects of energy costs, inflation, supply chains or weaker confidence.

 

The UK has also experienced a change of political leadership since the year end, with Andy Burnham becoming Prime Minister in July 2026. The implications for investment, growth, taxation and capital markets will become clearer as the new Government’s policy priorities are developed and implemented. In the near term, the change may add to uncertainty; over the longer term, consistent policy and measures that encourage investment in productive UK businesses would be welcome.

 

Domestic investors withdrew capital from UK-focused equity funds in each of the four quarters of the Company’s financial year1. This persistent selling remains a headwind for smaller companies and actively managed UK equity strategies, even as overseas investors and corporate buyers increasingly recognise the value available.

 

That value remains substantial. UK smaller companies continue to trade at marked discounts to larger domestic stocks, international peers and private-market transaction multiples. The portfolio contains businesses with recurring revenues, defensible positions, strong cash generation and modest financial leverage which, in the Board’s view, are not adequately reflected in current market ratings. However value creation is intended to be driven principally by company-specific operational progress, strategic change and active engagement.

 

The year has demonstrated both the risks of a concentrated portfolio and the importance of maintaining conviction where operational evidence remains supportive. The Board believes the Company is well positioned to benefit from a recovery in UK smaller companies and from further corporate recognition of the valuation opportunity. We remain confident in the Investment Manager’s disciplined, high-conviction approach and in the Company’s ability to deliver attractive long-term returns for shareholders.

 

The Board thanks shareholders for their continued support.

 

1. Source: Calastone Fund Flow Index, July 2026.

 

William Barlow

Chairman

22 September 2026

 

Investment Manager’s Report for the year ended 30 June 2026

 

Overview – FY 2025/26

 

The year to 30 June 2026 was characterised by sharp changes in market leadership and investor sentiment. UK smaller companies remained under pressure from persistent domestic fund outflows, even as the FTSE 100 benefited from a rotation of global capital away from concentrated US equity exposures. Against this mixed backdrop, operational delivery across the Company’s portfolio was generally resilient, but portfolio valuations experienced pronounced intra-year volatility.

 

During the first half of the financial year, smaller companies generally lagged their larger peers despite improving underlying UK economic fundamentals. The prolonged lead-up to the 2025 Autumn Budget weighed on risk appetite and domestic liquidity, with UK-focused equity funds recording £2.6 billion of net outflows in calendar Q4 2025 alone1.

 

Calendar Q1 2026 then brought a marked reversal. Smaller-company indices fell as geopolitical escalation in the Middle East supported energy prices and large-cap market leadership, while in February a sharp and broad-based sell-off hit software, professional services and data-platform businesses following a wave of artificial intelligence product launches. The Company’s exposure to asset-light, intangible-rich businesses meant that it was particularly affected by this thematic de-rating, despite substantively all portfolio company trading updates or results in the quarter being positive or in line with expectations. Following extensive engagement with management teams and our specialist network to re-test the AI opportunities and threats for each company, we concluded that a number of holdings possess meaningful barriers to AI-led disruption – including proprietary data, deep domain expertise, regulatory knowledge, embedded customer workflows and trusted system-of-record status – and selectively added to high-conviction positions at depressed valuations.

 

The final quarter saw a strong, albeit incomplete, recovery as the initial AI concerns became more differentiated and operational delivery remained sound. Again, substantively all portfolio trading updates and financial results in calendar Q2 were positive or in line with market expectations, while several of the holdings most affected by the February sell-off recovered materially. Smaller companies also began to outperform their larger peers during the quarter. The period nevertheless remained volatile, with conflict in the Middle East, energy-price uncertainty and renewed domestic political uncertainty continuing to affect risk appetite.

 

Corporate activity remained an important source of value realisation. The acquisitions of Inspired and Ricardo crystallised value at substantial premia following periods of active engagement, while public-to-private activity across the UK market remained elevated; in the first half of calendar year 2026 there have been 25 firm offers announced for UK listed companies, with an aggregate value of £35bn2. This continues to validate our view that the valuation gap between UK public markets and strategic or private-market values remains material. Throughout the year, our investment approach remained unchanged: bottom-up stock selection, deep fundamental due diligence and constructive engagement focused on company-specific routes to value creation rather than reliance on a broad market re-rating.

 

1. Calastone Fund Flow Index, January 2026
2. Source: LexisNexis Market Standards, Trends in UK Public M&A deals in H1 2026, July 2026.

 

Performance – FY 2025/26

 

The Trust’s NAV Total Return decreased by 2.2% over the 12-month period ended 30 June 2026, versus the FTSE Small Cap Index (excluding Investment Companies), which rose by 7.6%.

 

NAV return attribution

 

Component	%
Benchmark	7.6
Manager Stock Selection*	(0.5)
Sector Effect+	(8.2)
Fees: Ongoing	(1.3)
Fees: Tender-related	(0.5)
Buyback++	0.7
NAV	(2.2)

 

* Manager Stock Selection is the balancing item, computed as NAV less Benchmark, Structurally Excluded Sectors, Fees (Ongoing and Tender-related) and Buyback.

+ Sector Effect is the sector allocation effect of the GICS industries exposure estimated from Brinson Attribution analysis from Bloomberg PORT. Sector Effect is heavily influenced by Structurally Excluded Sectors (Energy, Materials, Banks and REITs). As SEC holds no stocks in these industries, their entire active contribution is an allocation effect.

Structurally Excluded Sectors contributed -3.0% of total return within this component.

++ Buyback reflects the residual change in shares with voting rights from the post-tender Continuing Pool base, to 30 June 2026

 

Top and bottom contributors to relative return

 

Positive contributors

Holding	TSR (%)	CTR3 (%pt)
Costain	43.5	3.7
TruFin	52.0	3.6
ActiveOps	43.8	1.7
Diaceutics	24.3	1.2
Tribal	43.8	0.9

 

Negative contributors

Holding	TSR (%)	CTR3 (%pt)
Brooks Macdonald	(23.0)	(2.5)
Everplay	(25.4)	(2.4)
Iomart	(50.0)	(1.8)
Watkin Jones	(26.3)	(1.7)
Fintel	(26.2)	(1.3)

 

Total Shareholder Return (“TSR”) and Contribution to Return (“CTR”). Source: Bloomberg PORT

 

Key contributors to performance during the year included:

 

• Costain Group, following a series of strategically important contract wins and framework appointments, strong cash generation and continued progress towards its medium-term margin targets. Costain also announced a new pension scheme agreement supporting enhanced shareholder returns via dividend and buyback.
• TruFin, following repeated earnings upgrades driven by the continued strong performance of its Playstack division, which was subsequently announced to have been divested at material valuation in the context of the group’s market capitalisation, along with a material capital return programme to shareholders.
• ActiveOps, following strong results and trading updates demonstrating double-digit revenue growth, expanding recurring revenue, continued cash generation and successful integration of the Enlighten acquisition, reinforcing confidence in the scalability of its Decision Intelligence platform.
• Diaceutics, supported by strong revenue momentum, new enterprise-wide agreements, improved profitability and a record order book, notwithstanding a period of share price weakness in calendar Q4 on no specific company news flow.
• Tribal Group, following trading updates that reaffirmed revenue expectations, indicated adjusted EBITDA ahead of consensus and demonstrated a substantial improvement in the balance sheet to a net cash position.

 

3. Contribution to Return (“CTR”) of an investment is the weighted total return of that investment instrument, calculated as the daily total return multiplied by the daily weight, compounded over the attribution timeframe.

 

The main detractors over the period were:

• Brooks Macdonald Group, as the shares de-rated despite operational progress, including in-line interim results, a return to net positive flows (now evidenced for three consecutive quarters) and continued strength in its platform MPS proposition.
• Everplay Group, reflecting weaker sentiment after full-year results indicated a shift in the timing of 2026 revenues from the first half to the second half and a delay to the Hell Let Loose: Vietnam release, following a period in which the shares had previously benefited from stronger back-catalogue performance.
• Iomart Group, following continued elevated churn in its legacy self-managed infrastructure segment, which increased leverage and masked success in other parts of the group.
• Watkin Jones, which despite an in-line trading update is exposed to cyclical headwinds in the UK construction sector and flagged a wide range of outcomes for the second half of its financial year.
• Fintel, as valuation and sentiment weakened despite positive late-2025 trading momentum, continued SaaS growth and a strengthened balance sheet and credit facility providing capacity for further organic growth and selective acquisitions.

 

The full-year result masks significant intra-year dispersion. Performance was strong through January 2026 before reversing sharply during February and March: the Company’s NAV total return fell by 10.3% in calendar Q1, compared with a 4.7% decline in the FTSE Small Cap Index (excluding Investment Companies). This was driven principally by the market-wide de-rating of perceived “AI-exposed” sectors rather than deteriorating portfolio trading. The final quarter recovered a meaningful proportion of this decline as company results remained resilient and the market began to differentiate more clearly between potential AI beneficiaries and genuinely disrupted business models.

 

Portfolio Activity

 

New Investments

 

We made six new investments during the period:

 

• ActiveOps, a leading enterprise software provider specialising in back-office management with c.90% recurring revenue, double-digit organic growth, strong cash generation and a dominant position in a structurally expanding market.
• Watkin Jones, a specialist property development and management business focused on UK build-to-rent and purpose-built student accommodation, using a capital-light forward-funding model and offering recovery potential as development activity normalises.
• Spire Healthcare Group, the UK’s largest private hospital group by revenue, where we initially saw structural growth in private healthcare, scope for margin improvement and potential value creation from its property-backed asset base. However, the combination of trading uncertainty around the latest round of NHS tariff commissioning, and a protracted takeover process with multiple offerors including a major shareholder, led us to exit the position after a short holding period.
• Elixirr International, a challenger consultancy firm which is well known to the Manager, with a high-quality customer base diversified by both geography and sector, which is expected to benefit from continued growth in demand for digital consultancy particularly around AI threats and opportunities.
• Eagle Eye Solutions, a marketing and loyalty software platform provider with a scalable, high-margin recurring revenue model and structural exposure to increasing adoption of digital promotions and personalised customer engagement by global retailers.
• Ten Lifestyle Group, a technology-enabled concierge and lifestyle services provider supported by growing demand from global financial institutions and luxury brands, new enterprise client wins, double-digit revenue growth and improving profitability.

 

Follow-on investments

 

During periods of share price weakness that we assessed to be disconnected from long-term fundamentals, the Manager added selectively to existing holdings. Examples included Diaceutics and Next 15 Group in calendar Q3; XPS Pensions Group and Fintel in Q4; and Netcall and Watkin Jones in Q1 2026. Across the full year, follow-on investment also included Brooks Macdonald Group, Iomart Group and Tribal Group.

 

Full exits

 

We also fully exited six positions during the period:

 

• Benchmark Holdings, following the return of proceeds after the disposal of its Genetics division, which crystallised value at a 48% premium to the company’s ex-cash equity value.
• Inspired, following completion of the all-cash Recommended Takeover by HGGC at 81p per share, c.33% above the undisturbed share price and c.103% above the 40p equity recapitalisation led by the Manager in January 2025.
• Ricardo, following completion of the agreed all-cash Recommended Takeover by WSP Global at approximately a 70% premium to the 90-day volume-weighted average price.
• The Property Franchise Group, following a period of strong operational performance and share price appreciation after a record year of growth, allowing us to crystallise gains and recycle capital into higher-conviction opportunities.
• Spire Healthcare Group, as above, capitalising on ample liquidity during a volatile takeover process.
• Halfords Group, following a strong trading update, robust like-for-like sales growth, gross margin expansion and a move to net cash, which drove a significant re-rating and provided an attractive opportunity to realise value.

 

Outlook – FY 2026/27

 

Looking ahead, the near-term backdrop remains uncertain. Geopolitical tensions in the Middle East, changes in UK political leadership and continued domestic equity fund outflows may sustain volatility. At the same time, the rotation of international capital away from highly concentrated US equity exposures has improved the relative backdrop for UK assets. We believe the portfolio is well positioned: its holdings typically have high recurring revenues, defensible market positions, strong cash generation and low or modest financial leverage, with limited direct exposure to global trade disruption.

 

The valuation opportunity in UK smaller companies remains compelling. At 31 August 2026, companies below £500 million market capitalisation traded at a 25% median price-to-earnings discount to companies above £4 billion. Corporate and private equity buyers have continued to demonstrate a willingness to pay substantial premia for high-quality UK assets. If public markets continue to misprice these businesses, we expect M&A to remain an important additional route to value realisation. Several potential catalysts could support the asset class over the coming year:

 

• Continued improvement in international sentiment towards UK equities and a broader rotation from large caps into small and mid-cap companies as valuation dispersion normalises;
• Further reopening of the IPO and equity capital markets, improving liquidity, price discovery and investor confidence; and
• Continued corporate activity and public-to-private transactions, providing routes to crystallise intrinsic value where public markets do not recognise it.

 

These catalysts are supportive but are not required for our investment cases to work. History suggests that smaller companies can recover rapidly once market leadership broadens, but we continue to anticipate returns that are idiosyncratic and primarily from company-specific earnings growth, cash generation, strategic change and active engagement. We will also continue to test each investment case rigorously against the opportunities and risks created by artificial intelligence, distinguishing businesses that can use AI to enhance their products and efficiency from those whose competitive positions may be more exposed.

 

We remain focused on a high-conviction, bottom-up portfolio of companies where we believe quality, strategic relevance and identifiable routes to value creation are not reflected in current market valuations. After a year that demonstrated both the risks of concentration and the importance of maintaining conviction when operational evidence remains supportive, we believe the portfolio is well positioned to deliver attractive long-term returns for shareholders.

 

Top 10 Investee Company Review

(as at 30 June 2026)

Company	% of NAV1	Investment Thesis	Developments
TruFin	12.9%   Technology	Following the June 2026 disposal of Playstack, TruFin comprises two technology-enabled fintech platforms: Oxygen Finance (early payment) and Satago (invoice finance), alongside a substantial cash position. The investment case now rests on disciplined capital allocation, further value creation within the remaining platforms and management’s ability to redeploy capital into scalable, cash-generative businesses.	Completed the sale of Playstack in June 2026, crystallising significant value and leaving Oxygen Finance and Satago alongside a substantial cash balance. The Board announced a substantial return of capital to shareholders, which was approved and completed post period end.
Netcall	10.1%   Technology	Provider of AI-powered process automation and customer engagement software through the Liberty platform, with a high proportion of recurring subscription revenues. Structural demand for automation, digital transformation and AI-enabled workflows supports organic growth, while the scalable software model offers operating leverage and cash generation.	FY26 trading showed 20% revenue growth and 23% adjusted EBITDA growth, with continued strong momentum in Cloud. AI-related product sales almost tripled, while the Jadu integration progressed well with initial cross-sales secured.
Diaceutics	8.9%   Healthcare	Commercialisation data and technology provider to the global pharmaceutical and biotech industry, built around proprietary diagnostic data and the DXRX platform. Structural growth in precision medicine, increasing recurring revenues and embedded customer relationships provide attractive long-term growth and operating leverage.	Post period end H1 update showed 22% revenue growth and 75% ARR growth, reflecting continued adoption of the DXRX platform. Customer retention strengthened further, while AI is being embedded across DXRX and the operating model.
Brooks Macdonald	8.6%   Financial Services	UK-focused wealth management and financial planning group with a scalable platform, strong cash generation and an opportunity to improve margins as growth returns. The sector remains structurally attractive and consolidating, with Brooks Macdonald positioned to benefit from improving net flows, product breadth and adviser relationships.	FY26 saw a return to positive net flows, with its fiscal Q4 the strongest quarter in three years. Platform MPS continued to grow strongly and full-year financial performance was in line with market expectations.
Costain Group	7.0%   Industrial Goods & Services	UK infrastructure delivery and consulting partner with strong positions in structurally growing water, energy, defence and transport markets. A de-risked contracting model, rising consultancy mix, strong balance sheet and improving margins provide a platform for higher-quality earnings and shareholder returns.	FY25 results demonstrated further margin progression and a record forward work position, alongside a material share buyback and increased dividend. Contract momentum remained strong, including new framework appointments across transport and infrastructure.
ActiveOps	7.0%   Business Services	Enterprise Decision Intelligence software provider for service operations, with high recurring revenues, strong gross margins and a growing global customer base. The platform helps large organisations improve workforce productivity and operational decision-making, with AI adoption increasing the need for trusted operational data and context.	FY26 results showed 46% ARR growth and 72% adjusted EBITDA growth, with strong organic momentum and improving customer retention. The Enlighten integration materially expanded the North American and APAC footprint; early FY27 trading was in line with Board expectations.
Everplay Group	6.9%   Technology	Leading independent video game developer and publisher with a diversified portfolio across premium games, simulation and children’s edutainment. Earnings are supported by a valuable back catalogue and established franchises, while the pipeline of new releases provides potential for additional growth and IP value creation.	Post period end H1 update confirmed trading in line with expectations, supported by resilient back-catalogue performance and new releases. The release schedule is weighted to H2 2026, with encouraging pre-launch indicators.
Tribal Group	6.5%   Technology	Global provider of student information systems and related software and services to the education sector. The transition towards strategic cloud and SaaS products is improving recurring revenue quality, while cost discipline and cash generation reduce balance-sheet risk.	Post period end trading update reported strong Core ARR growth, a shift to a net cash position and reiterated market guidance. On 11 September 2026 Tribal announced a proposed acquisition of its operating businesses for £189.3m by Main Capital Partners equivalent to c86p per share and the intention to return the capital and wind up the group in the event it is approved by shareholders.
Fintel	5.6%   Business Services	Leading provider of software, data and support services to the UK retail financial services sector, serving advisers, product providers and intermediaries. Increasing regulatory complexity and digitisation support recurring demand, while proprietary data assets and software products offer scope for attractive organic growth, margin expansion and selective M&A.	Post period end H1 update showed 11% organic adjusted EBITDA growth, with continued progress across Software, Data and Distribution. Product innovation continued through Omnicore, Trust and Matrix360, alongside selective M&A and disposal of non-core activities.
XPS Pensions Group	5.0%   Business Services	Leading challenger in UK pensions consulting and administration, benefiting from high revenue visibility, regulatory complexity and largely non-discretionary client activity. Its capital-light model, strong cash generation and growing insurance consulting capability support continued organic growth, market-share gains and selective acquisitions.	FY26 delivered a fourth consecutive year of double-digit revenue growth, with revenue up 13% and adjusted EBITDA up 9%. Insurance revenues more than tripled, broadening the addressable market, while cash generation remained strong.

 

Gresham House, as at 30 June 2026

1. Top ten holdings representing 78.8% of NAV

2. Aggregate Gresham House Asset Management equity stake.

 

 

Portfolio as at 30 June 2026

Company	Sector Classification	Date of first Investment	Cost £’000	Valuation £’000	% of invested portfolio at 30 June 2026	% of invested portfolio at 30 June 2025	% of net assets
TruFin	Technology	Jul 2023	7,805	16,562	13.6%	6.5%	12.9%
Netcall	Technology	Mar 2023	11,284	13,002	10.7%	7.3%	10.1%
Diaceutics	Healthcare	Sep 2024	10,482	11,534	9.5%	3.6%	8.9%
Brooks Macdonald	Financial Services	Jun 2016	16,341	11,050	9.1%	10.5%	8.6%
Costain Group	Industrial Goods & Services	Jun 2024	4,037	9,065	7.4%	11.0%	7.0%
ActiveOps	Business Services	Jul 2025	6,274	9,001	7.4%	–	7.0%
Everplay Group	Technology	Dec 2023	8,481	8,952	7.3%	9.5%	6.9%
Tribal Group	Technology	Dec 2014	9,617	8,361	6.9%	2.2%	6.5%
Fintel	Business Services	Oct 2020	7,716	7,157	5.9%	4.1%	5.6%
XPS Pensions Group	Business Services	Jul 2019	3,030	6,508	5.3%	5.6%	5.0%
Next 15 Group	Business Services	Oct 2024	8,218	6,284	5.2%	4.0%	4.9%
Watkin Jones	Business Services	Aug 2025	6,034	3,920	3.2%	–	3.0%
Iomart Group	Technology	Mar 2022	26,451	3,509	2.9%	3.0%	2.7%
Elixirr International	Business Services	Apr 2026	3,528	3,203	2.6%	–	2.5%
Eagle Eye Solutions	Technology	Apr 2026	2,297	2,486	2.0%	–	1.9%
Ten Lifestyle Group	Business Services	May 2026	1,292	1,270	1.0%	–	1.0%
Total investments				121,864			94.5%
Cash				7,283			5.6%
Net current liabilities				(206)			(0.1%)
Total shareholders’ funds				128,941			100.0%

 

 

Sector exposure by value		Value by market cap band
Technology	41.0%	Micro Cap (<£250m)	68.1%
Business Services	29.0%	Small Cap (£250m-£1.5bn)	26.4%
Healthcare	8.9%	Net cash	5.5%
Financial Services	8.6%
Industrial Goods & Services	7.0%
Net cash	5.5%

 

Ken Wotton

Gresham House Asset Management

22 September 2026

 

Financial Summary

 

Capital Return	As at 30 June 2026	As at 30 June 2025	% change
Net asset value (“NAV”) per Ordinary share+	380.08p	392.47p	(3.2)%
Ordinary share price	361.00p	363.00p	(0.6)%
Comparative index++	6,427.32	6,175.33	+4.1%
Discount of Ordinary share price to NAV1	(5.0)%	(7.5)%
Average discount of Ordinary share price to NAV for the year1	(7.3)%	(8.4)%
Total assets (£’000)	129,188	174,399	(25.9)%
Equity shareholders’ funds (£’000)	128,941	174,153	(26.0)%
Ordinary shares in issue with voting rights	33,924,903	44,373,800

 

 

Performance	Year ended 30 June 2026	Year ended 30 June 2025
NAV total return for the year1	(2.2)%	(0.1)%
Share price total return for the year1	0.6%	0.4%
Comparative index++ total return for the year	7.6%	13.1%
Ongoing charges1	1.3%	1.3%
Ongoing charges (including performance fee)1	1.3%	1.3%
Revenue return per Ordinary share	0.73p	5.03p
Dividend yield1	1.2%	1.2%
Proposed final dividend for the year	4.50p	4.25p

 

 

Year’s Highs/Lows	High	Low
NAV per Ordinary share	436.87p	348.90p
Ordinary share price	406.00p	334.50p

 

+Net asset value or NAV, the value of total assets less current liabilities. The net asset value divided by the number of shares in issue produces the net asset value per share.

++ FTSE Small Cap (ex Investment Trusts) Index.

1 Alternative Performance Measures. Please refer to pages 75 and 76 of the Annual Report for definitions and reconciliations of the Alternative Performance Measures to the year-end results.

A breakdown of the relevant financial information for the Company’s two pools, the Continuation Pool and the Realisation Pool, is noted on page 76 of the Annual Report.

 

Annual General Meeting

 

The Notice of the Annual General Meeting to be held on Thursday 12 November 2026 is set out on pages 78 to 80 of the Annual Report. The Annual General Meeting will be held at the offices of Panmure Liberum Limited, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY.

 

Further Information and Contact Details

 

The full Annual Report and Financial Statements can be accessed via the Company’s website at: www.strategicequitycapital.com or by contacting the Company Secretary as below.

 

Copies of the announcement, annual reports, quarterly update presentations and other corporate information can be found on the Company’s website at: www.strategicequitycapital.com. 

 

For further information, please contact:

 

Strategic Equity Capital plc William Barlow (Chairman)	(via Juniper Partners) +44 (0)131 378 0500
Panmure Liberum Limited (Corporate Broker) Chris Clarke              Darren Vickers	+44 (0)20 3100 2000
Juniper Partners Limited (Company Secretary)   Steven Davidson	+44 (0)131 378 0500
KL Communications (PR Adviser) Charles Gorman   Adam Westall Charlotte Francis	[email protected] +44 (0)203 882 6644

 

 

Financial Statements

 

Statement of Comprehensive Income

	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue	Capital		Revenue	Capital
	return	return	Total	Total	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investments
Losses on investments held at fair value through profit or loss	-	(2,067)	(2,067)	-	(4,998)	(4,998)
	-	(2,067)	(2,067)	-	(4,998)	(4,998)
Income
Income from investments	3,115	-	3,115	4,405	-	4,405
Interest	39	-	39	51	-	51
Total income	3,154	-	3,154	4,456	-	4,456
Expenses Investment Manager’s base fee	(1,173)	-	(1,173)	(1,256)	-	(1,256)
Investment Manager’s performance fee	-	-	-	-	-	-
Other expenses	(1,698)	-	(1,698)	(870)	-	(870)
Total expenses	(2,871)	-	(2,871)	(2,126)	-	(2,126)
Net return before taxation	283	(2,067)	(1,784)	2,330	(4,998)	(2,668)
Taxation	-	-	-	-	-	-
Net return and total comprehensive income for the year	283	(2,067)	(1,784)	2,330	(4,998)	(2,668)
	pence	pence	pence	pence	pence	pence
Return per Ordinary share	0.73	(5.31)	(4.58)	5.03	(10.78)	(5.75)

 

The total column of this statement represents the Statement of Comprehensive Income prepared in accordance with UK-adopted international accounting standards. The supplementary revenue and capital return columns are both prepared under guidance published by the AIC. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

 

Statement of Changes in Equity

For the year ended 30 June 2026	Share capital	Share premium account	Capital reserve	Capital redemption reserve	Revenue reserve	Total
	£’000	£’000	£’000	£’000	£’000	£’000
1 July 2025	6,353	11,300	148,996	2,897	4,607	174,153
Net return and total comprehensive income for the year	-	-	(2,067)	-	283	(1,784)
Dividends paid	-	-	-	-	(1,831)	(1,831)
Share buybacks	(720)	-	(41,597)	720	-	(41,597)
30 June 2026	5,633	11,300	105,332	3,617	3,059	128,941
For the year ended 30 June 2025	Share capital	Share premium account	Capital reserve	Capital redemption reserve	Revenue reserve	Total
	£’000	£’000	£’000	£’000	£’000	£’000
1 July 2024	6,353	11,300	165,489	2,897	3,926	189,965
Net return and total comprehensive income for the year	-	-	(4,998)	-	2,330	(2,668)
Dividends paid	-	-	-	-	(1,649)	(1,649)
Share buybacks	-	-	(11,495)	-	-	(11,495)
30 June 2025	6,353	11,300	148,996	2,897	4,607	174,153

 

All profits are attributable to the equity owners of the Company and there are no minority interests.

 

Balance Sheet

 

	As at 30 June 2026	As at 30 June 2025
	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss	121,864	164,677
Current assets
Trade and other receivables	41	203
Cash and cash equivalents	7,283	9,519
	7,324	9,722
Total assets	129,188	174,399
Current liabilities
Trade and other payables	(247)	(246)
Net assets	128,941	174,153
Capital and reserves
Share capital	5,633	6,353
Share premium account	11,300	11,300
Capital reserve	105,332	148,996
Capital redemption reserve	3,617	2,897
Revenue reserve	3,059	4,607
Total shareholders’ equity	128,941	174,153
	pence	pence
Net asset value per share	380.08	392.47
	number	number
Ordinary shares in issue	33,924,903	44,373,800

 

The financial statements were approved by the Board of Directors of Strategic Equity Capital on 22 September 2026.

 

They were signed on its behalf by

 

William Barlow

Chairman

 

22 September 2026

 

Company Number: 05448627

 

Statement of Cash Flows

 

	Year Ended 30 June	Year Ended 30 June
	2026	2025
	£’000	£’000
Operating activities
Net return before taxation	(1,784)	(2,668)
Adjustment for losses on investments	2,067	4,998
Operating cash flows before movements in working capital	283	2,330
Decrease/(increase) in receivables	162	(37)
Increase/(decrease) in payables	1	(1,416)
Purchases of portfolio investments	(42,728)	(55,361)
Sales of portfolio investments	83,474	67,994
Net cash flow from operating activities	41,192	13,510
Financing activities
Equity dividend paid	(1,831)	(1,649)
Shares bought back in the year	(41,597)	(11,495)
Net cash flow from financing activities	(43,428)	(13,144)
(Decrease)/increase in cash and cash equivalents for the year	(2,236)	366
Cash and cash equivalents at the start of year	9,519	9,153
Cash and cash equivalents at 30 June	7,283	9,519

 

 

Emerging and Principal Risks

 

The Board believes that the overriding risks to shareholders are events and developments which can affect the general level of share prices, including, for instance, inflation or deflation, economic recessions and movements in interest rates and currencies which are outside of the control of the Board.

 

Emerging Risks

 

The Board believes that geopolitical developments, including ongoing conflicts in Iran, Ukraine and the Middle East continue to pose risks to global economic growth and investors’ risk appetites and consequently can impact the valuation of companies in the portfolio. There is also an increasing awareness of the challenges and emerging risks posed by climate change as well as the impact and pace of technological developments, including Artificial Intelligence (“AI”), on the companies in the investment universe.

 

The principal ongoing risks and uncertainties currently faced by the Company, which may vary in significance from time to time, are set out on pages 20 to 22 of the 2026 Annual Report, together with the controls and actions taken to mitigate those risks.

 

The Directors continue to work with the agents and advisers to the Company to try and manage the risks, including emerging risks. The central aims remain to preserve value in the Company’s portfolio and liquidity in the Company’s shares. The Directors aim to ensure that the Company maintains its investment strategy, has operational resilience, meets its regulatory requirements as an investment trust (and in particular in the provision of regular information to the market) and tries to navigate the financial and economic circumstances in these very uncertain times.

 

Responsibility statement of the Directors in respect of the Annual Financial Report

 

We confirm that to the best of our knowledge:

 

• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
• the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that it faces.

 

We consider the Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.

 

Going Concern

 

In assessing the Company’s ability to continue as a going concern the Directors have also considered the Company’s investment objective, detailed on the inside front cover, risk management policies, detailed on pages 20 to 22 of the 2026 Annual Report, capital management (see note 17 to the financial statements in the 2026 Annual Report), the nature of its portfolio and expenditure projections and believe that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and for at least 12 months from the date of this Report. In addition, the Board has had regard to the Company’s investment performance (see page 3 of the 2026 Annual Report) and the price at which the Company’s shares trade relative to their NAV (see page 3 of the 2026 Annual Report).

 

The Directors performed an assessment of the Company’s ability to meet its liabilities as they fall due. In performing this assessment, the Directors took into consideration:

 

• cash and cash equivalents balances and, from a liquidity perspective, the portfolio of readily realisable securities which can be used to meet short-term funding commitments;
• the ability of the Company to meet all of its liabilities and ongoing expenses from its assets;
• revenue and operating cost forecasts for the forthcoming year;
• the ability of third-party service providers to continue to provide services;
• potential downside scenarios including stress testing the Company’s portfolio for a 25% fall in the value of the investment portfolio; a 50% fall in dividend income and a buyback of 5% of the Company’s ordinary share capital, the impact of which would leave sufficient liquid assets to remain a going concern; and
• The outcome of the Tender Offer announced on 15 October 2025.

 

Based on this assessment, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements, and therefore have prepared the financial statements on a going concern basis.

 

Related party transactions and transactions with the Investment Manager

 

Fees paid to Directors are disclosed in the Directors‘ Remuneration Report on page 44 of the 2026 Annual Report. Full details of Directors‘ interests are set out on page 45 of the 2026 Annual Report.

 

The amounts payable to the Investment Manager, which is not considered to be a related party, are disclosed in notes 3 and 4 on pages 61 and 62 of the 2026 Annual Report. The amount due to the Investment Manager for management fees at 30 June 2026 was £80,000 (2025: £105,000). The amount due to the Investment Manager for performance fees at 30 June 2026 was £nil (2025: £nil).

 

The Investment Manager, directly and indirectly through its in-house funds, has continued to purchase shares in the Company.

 

Notes

 

1.1   Corporate information

 

Strategic Equity Capital plc is a public limited company incorporated and domiciled in the United Kingdom and registered in England and Wales under the Companies Act 2006 whose shares are publicly traded. The Company is an investment company as defined by Section 833 of the Companies Act 2006.

 

The Company carries on business as an investment trust within the meaning of Sections 1158/1159 of the UK Corporation Tax Act 2010.

 

The financial statements of Strategic Equity Capital plc for the year ended 30 June 2026 were authorised for issue in accordance with a resolution of the Directors on 22 September 2026.

 

1.2 Basis of preparation and statement of compliance

 

The financial statements of the Company have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006, as applicable to companies reporting under those standards. Where presentational guidance set out in the Statement of Recommended Practice (“SORP”) for investment trusts issued by the AIC in July 2022 is consistent with the requirements of IFRS, the Directors have sought to prepare financial statements on a basis compliant with the recommendations of the SORP.  

 

The financial statements of the Company have been prepared on a going concern basis under the historical cost convention, except for investments which are carried at fair value through profit or loss.

 

2. Income

	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Income from investments
UK dividend income	2,988	-	2,988	4,405	-	4,405
UK fixed interest income	127	-	127	-	-	-
	3,115	-	3,115	4,405	-	4,405
Other operating income
Liquidity interest	39	-	39	51	-	51
	3,154	-	3,154	4,456	-	4,456

 

3. Investment Manager’s base fee

	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Management fee	1,173	-	1,173	1,256	-	1,256
	1,173	-	1,173	1,256	-	1,256

 

A basic management fee was payable to the Investment Manager at an annual rate of 0.75% of the NAV of the Company. The basic management fee accrues daily and is payable quarterly in arrears. The Investment Manager is also entitled to a performance fee, details of which are given in the Report of the Directors on page 33 of the 2026 Annual Report.

 

4. Investment Manager’s performance fee

	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Performance fee	-	-	-	-	-	-
	-	-	-	-	-	-

 

Details of the Performance fee calculation are noted in the Report of the Directors on page 33 of the 2026 Annual Report.

 

5. Other expenses

	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Secretarial services	189	-	189	183	-	183
Auditor’s remuneration for:
Audit services*	44	-	44	42	-	42
Directors’ remuneration	171	-	171	171	-	171
Other expenses+	1,294	-	1,294	474	-	474
	1,698	-	1,698	870	-	870

 

All expenses include VAT where applicable, apart from audit services which is shown net.

*No non-audit fees were incurred during the year.

+ Other expenses include £834,000 of costs in relation to the Company’s General Meeting and Circular in relation to the Tender exercise announced to the market on 15 September 2025. These costs were borne by both the Continuing Pool and Tender Pool.

 

6. Taxation

	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Corporation tax at 25.00% (2025: 25.00%)	-	-	-	-	-	-
	-	-	-	-	-	-

 

As at 30 June 2026 the total taxation charge in the Company’s revenue account is lower than the standard rate of corporation tax in the UK. The differences are explained below:

 

	Year ended 30 June 2026			Year ended 30 June 2025
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Net return on ordinary activities before taxation	283	(2,067)	(1,784)	2,330	(4,998)	(2,668)
Theoretical tax at UK corporation tax rate of 25.00% (2025: 25.00%)	71	(517)	(446)	583	(1,250)	(667)
Effects of:
- UK income from investments that are not taxable	(779)	-	(779)	(1,100)	-	(1,100)
- Unrelieved expenses	708	-	708	517	-	517
- Non-taxable investment losses	-	517	517	-	1,250	1,250
	-	-	-	-	-	-

 

Factors that may affect future tax charges

 

At 30 June 2026, the Company had no unprovided deferred tax liabilities (2025: £nil). At that date, based on current estimates and including the accumulation of net allowable losses, the Company had unrelieved losses of £38,845,000 (2025: £36,013,000) that are available to offset future taxable revenue. A deferred tax asset of £9,711,000 (2025: £9,003,000) has not been recognised because the Company is not expected to generate sufficient taxable income in future periods in excess of the available deductible expenses and accordingly, the Company is unlikely to be able to reduce future tax liabilities through the use of existing surplus losses. The potential deferred tax asset has been calculated using a corporation tax rate of 25% (2025: 25%).

 

7. Dividends

 

Under the requirements of Sections 1158/1159 of the Corporation Tax Act 2010 no more than 15% of total income may be retained by the Company. These requirements are considered on the basis of dividends declared in respect of the financial year as shown below.

 

	30 June	30 June
	2026	2025
	£'000	£'000
Final dividend proposed of 4.50p (2025: 4.25p) per share	1,501	1,831

 

The following dividends were declared and paid by the Company in the financial year:

 

	30 June	30 June
	2026	2025
	£'000	£'000
Final dividend: 4.25p per share (2025: 3.50p)	1,831	1,649

 

Dividends have been solely paid out of the Revenue reserve.

 

8. Return per Ordinary share

	Year ended 30 June 2026			Year ended 30 June 2025
	Net	Weighted average	Per	Net	Weighted average	Per
	return	number of	share	return	number of	share
	£’000	Ordinary shares	pence	£’000	Ordinary shares	pence
Total
Return per share	(1,784)	38,908,011	(4.58)	(2,668)	46,346,499	(5.75)
Revenue
Return per share	283	38,908,011	0.73	2,330	46,346,499	5.03
Capital
Return per share	(2,067)	38,908,011	(5.31)	(4,998)	46,346,499	(10.78)

 

9. Investments

 

	30 June 2026 £’000	30 June 2025 £’000
Investment portfolio summary
Quoted investments at fair value through profit or loss	121,864	164,677
	121,864	164,677

 

Under IFRS 13, the Company is required to classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in measuring the fair value of each asset. The fair value hierarchy has the following levels:

 

Investments whose values are based on quoted market prices in active markets are classified within level 1 and include active quoted equities.

 

The definition of level 1 inputs refers to ‘active markets’, which is a market in which transactions take place with sufficient frequency and volume for pricing information to be provided on an ongoing basis. Due to the liquidity levels of the markets in which the Company trades, whether transactions take place with sufficient frequency and volume is a matter of judgement, and depends on the specific facts and circumstances. The Investment Manager has analysed trading volumes and frequency of the Company’s portfolio and has determined these investments as level 1 of the hierarchy.

 

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. As level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

 

Level 3 instruments include private equity, as observable prices are not available for these securities the Company has used valuation techniques to derive the fair value. In respect of unquoted instruments, or where the market for a financial instrument is not active, fair value is established by using recognised valuation methodologies, in accordance with IPEV Valuation Guidelines.

 

The level in the fair value hierarchy within which the fair value measurement is categorised is determined on the basis of the lowest level input that is significant to the fair value of the investment.

 

The following table analyses within the fair value hierarchy the Company’s financial assets and liabilities (by class) measured at fair value at 30 June 2026.

 

Financial instruments at fair value through profit or loss

 

	Level 1 £’000	Level 2 £’000	Level 3 £’000	Total  £’000
30 June 2026
Equity investments	121,864	-	-	121,864
Liquidity funds	-	1	-	1
Total	121,864	1	-	121,865
30 June 2025
Equity investments	162,972	1,705	-	164,677
Liquidity funds	-	1	-	1
Total	162,972	1,706	-	164,678

 

Listed investments included in Level 2 are deemed to be less liquid than Level 1. An investment is categorised as illiquid when historic trading data indicates it would take more than 250 days to liquidate. The fair value of these investments has been determined by reference to their quoted prices at the reporting date.

 

10. Nominal Share capital

	Number	£’000
Allotted, called up and fully paid Ordinary shares of 10p each:
Ordinary shares in circulation at 30 June 2025	63,529,206	6,353
Shares held in Treasury at 30 June 2025	(19,155,406)	(1,915)
Ordinary shares in issue per Balance Sheet at 30 June 2025	44,373,800	4,438
Shares bought back and cancelled	(7,199,397)	(720)
Shares bought back to be held in Treasury	(3,249,500)	(325)
Ordinary shares in issue per Balance Sheet at 30 June 2026	33,924,903	3,393
Shares held in Treasury at 30 June 2026	22,404,906	2,240
Ordinary shares in circulation at 30 June 2026	56,329,809	5,633

 

Other Information

 

These are not statutory accounts in terms of Section 434 of the Companies Act 2006.  Full audited accounts for the year to 30 June 2026 will be sent to shareholders in October 2026 and will be available for inspection at 1 Finsbury Circus, London EC2M 7SH, the registered office of the Company.

 

The full annual report and accounts will be available on the Company’s website www.strategicequitycapital.com and have been submitted to the National Storage Mechanism ("NSM") and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

 

The audited accounts for the year ended 30 June 2026 will be lodged with the Registrar of Companies.