Rights and Issues Investment Trust half-year results: discount narrows as shares return 9.4%

Rights and Issues Investment Trust delivered positive returns in the first half of 2026, although its investment portfolio lagged the FTSE All-Share Index.

The more eye-catching result came from the share price. A narrowing discount to net asset value, helped by the return of share buybacks, lifted the total shareholder return to 9.4%.

The Board also approved a 12.5p interim dividend, up 2.0% from 12.25p in the same period last year.

Investors can read the original company announcement or visit the Rights and Issues Investment Trust company page for further coverage.

Rights and Issues Investment Trust's key figures

Metric	30 June 2026	31 December 2025	Change
Net assets	£127.458 million	£124.475 million	2.4%
Net asset value per share	2,711.4p	2,603.7p	4.1%
Share price	2,200.0p	1,990.0p	10.5%
Discount to net asset value	18.9%	23.6%	Narrowed by 4.7 percentage points
Portfolio total return	5.4%	Not disclosed	Not disclosed
Total shareholder return	9.4%	Not disclosed	Not disclosed
Ongoing charges ratio	0.96%	0.96%	Unchanged
Interim dividend	12.5p	12.25p for the 2025 interim	Up 2.0%

Net asset value, or NAV, is the value of the trust's assets after liabilities. The discount shows how far the share price sits below NAV.

At 30 June, shareholders could buy the shares for 2,200p despite the underlying NAV being 2,711.4p per share. That remains a substantial 18.9% discount, but it is a clear improvement from 23.6% at the end of 2025.

Share buybacks made a meaningful difference

The investment portfolio produced a total return of 5.4%, compared with 7.2% from the FTSE All-Share Total Return Index. That represents underperformance of 1.8 percentage points against the formal benchmark.

However, the portfolio performed better than the Deutsche Numis Smaller Companies Index, which returned 1.8%. The manager considers that index more representative of the trust's small and mid-cap investment universe.

The shares themselves delivered a stronger 9.4% total return because the discount narrowed. The renewed share buyback programme appears to have been an important part of that move.

Rights and Issues lost its authority to continue its established buyback activity at the March 2025 annual general meeting. Shareholders approved a new authority in March 2026.

Between 26 March and 30 June 2026, the trust repurchased and cancelled 79,783 shares, spending £1.741 million. Buying shares below NAV can add value for remaining investors because the trust acquires its own assets at a discount. It may also provide liquidity and help limit share price volatility.

The positive sign is that this mechanism appears to be working. The limitation is that buybacks cannot guarantee the discount will continue to narrow, particularly if investor demand weakens.

Dividend rises by 2.0%

The Board approved an interim dividend of 12.5p per share, compared with 12.25p last year. It will be paid on 25 September 2026 to shareholders on the register at the close of business on 28 August. The shares will trade ex-dividend from 27 August.

The proposed payment amounts to £583,000 based on the shares in issue on 4 August 2026. The trust reported an annualised dividend yield of 2.0% at the half-year stage.

Investment income increased from £1.808 million to £2.331 million, while total income rose from £1.836 million to £2.333 million. Revenue profit increased to £1.695 million from £1.268 million.

Those figures provide support for the interim increase, although the future level of dividends will continue to depend on portfolio income and Board decisions.

Concentrated portfolio produces mixed stock-level results

Rights and Issues runs a highly concentrated portfolio, so individual holdings can have an outsized effect on performance.

Keller was the largest positive contributor, with its shares rising 63% during the period. Colefax gained 51%, while Oxford Instruments advanced 49%.

The manager said Keller's transformation had produced stronger returns and margins. Oxford Instruments benefited from a more positive outlook for its advanced semiconductor manufacturing equipment after a challenging period involving tariffs and trade uncertainty.

There were also substantial detractors. Telecom Plus fell 45%, with concerns about its business model and investment in growth initiatives weighing on its valuation. GB Group declined 21% as investors considered the possible effect of artificial intelligence on its identity verification and fraud detection operations.

This dispersion highlights both sides of a concentrated strategy. Successful stock selection can materially improve returns, but setbacks in a small number of positions can also drag heavily on performance.

One new investment and one complete exit

Portfolio activity was limited to one disposal and one addition.

The trust sold JTC after the company received several takeover approaches and its shares moved close to the agreed bid price. JTC had represented 5.72% of net assets at the end of 2025.

Mortgage Advice Bureau was the new holding and accounted for 3.00% of net assets at 30 June. The manager highlighted its network of UK mortgage brokers, technology and lender relationships, alongside its exposure to refinancing and product transfers rather than only new house purchases.

The trust's largest holdings included Hill & Smith at 6.49% of net assets, IMI at 6.13% and Keller at 5.99%. Total investments were valued at £122.895 million, representing 96.42% of net assets, with net current assets accounting for the remaining 3.58%.

What looks positive and what could disappoint

The clearest positive is the improved shareholder experience. A 9.4% total shareholder return was well ahead of the 5.4% portfolio return, while the discount narrowed materially after buybacks resumed.

The dividend increase, higher investment income and rise in net assets are also encouraging. Ongoing charges remained unchanged at 0.96%.

On the other hand, the portfolio still trailed its formal FTSE All-Share benchmark. The 18.9% discount remains wide, despite the improvement, and the concentrated approach increases dependence on a relatively small collection of companies.

The report also points to economic uncertainty, Middle East conflict, energy prices, inflation, interest rates and competitive pressure as risks for portfolio companies. The half-year figures are unaudited.

What investors should watch next

The next test is whether buybacks can keep supporting the discount without becoming the main source of shareholder returns. Investors will also want to see the portfolio close the performance gap with the FTSE All-Share while maintaining its stronger showing against smaller companies.

Stock selection remains central. Progress at Telecom Plus and GB Group, continued performance from Keller and Oxford Instruments, and the early contribution from Mortgage Advice Bureau could all matter.

For comparison with other investment trust updates, see the recent CC Japan Income & Growth Trust half-year results and Athelney Trust's half-year report.

Rights and Issues has delivered a respectable first half, with the narrowing discount doing much of the work for shareholders. The portfolio return was positive rather than exceptional, leaving future stock selection and discount control as the main areas to monitor.