Schroder BSC Social Impact Trust annual results: steady NAV return, wider discount, and a strategic review
Schroder BSC Social Impact Trust (SBSI) has published its Annual Report for the year to 30 June 2025. The headline numbers show modest NAV growth, a higher dividend, and further pressure on the share price – prompting a full strategic review. Here is what matters for investors, in plain English.
Key numbers investors should know
| NAV per share | 102.94p (30 June 2025) |
| NAV total return (FY25) | +1.6% |
| NAV total return since inception | 12.0% (2.5% annualised) |
| Share price total return (FY25) | -7.4% |
| Average discount to NAV (FY25) | 24.7% |
| Dividend declared | 3.76p, payable 19 December 2025 |
| Yield on NAV / on share price | 3.65% / 5.45% (as at 28 Oct 2025 share price) |
| Net assets | £83.49 million |
| Cash and money market funds | £10.07 million |
| Commitments to impact investments | 98% of NAV (84% invested; 17% in liquidity assets) |
What drove performance in 2025
NAV total return was +1.6%, supported by robust income but offset by write-downs in high impact housing as valuers pushed discount rates higher. The trust recorded net revenue of £3.40 million (4.15p per share), up from £2.65 million, while fair value losses of £2.17 million pulled back the total return to £0.92 million (1.13p per share).
- Top contributors: Rathbones Charity Bond portfolio (+1.10p per share) and Bridges Social Outcomes Fund II (+0.69p).
- Largest detractor: Man Community Housing Fund (-0.57p), reflecting the tougher real asset backdrop.
- Exits at or around NAV: a second partial exit from Resonance Real Lettings Property Fund LP (£1.8 million), full repayment of Abbeyfield York (£2.0 million), and £1.0 million returned by Bridges Social Outcomes Fund as projects completed. Exiting at NAV supports the carrying values in a jittery market.
Important context: the trust targets CPI +2% per annum over time. With CPI at 3.6% in the period, SBSI did not meet that target. Management points to inflation caps in social housing leases, higher discount rates, and timing lags as reasons – and expects benefits from the higher-rate environment to filter through over time.
Dividend lifted above guidance – but note the one-off
The Board declared a 3.76p dividend, payable on 19 December 2025. That is above the 2-3% yield-on-NAV guidance due to a one-off income distribution from Bridges Inclusive Growth Fund linked to the AgilityEco exit. It is wholly designated as an interest distribution.
Opinion: welcome income in a tricky year, but investors should treat the uplift as non-recurring. The underlying revenue trend is improving, yet the 2025 dividend level was helped by a special item.
Discount, buy-backs and the strategic review
The share price fell over the year, leaving an average discount of 24.7% to NAV and a share price total return of -7.4%. The Board repurchased 1.93 million shares for £1.47 million, reducing shares in issue to 81.10 million. Despite this, the discount remains entrenched. As a result, the Board launched a strategic review and shareholder consultation and is “evaluating potential fund structures and alternatives”. An update will be provided at or before the AGM on 17 December 2025.
Crucially, SBSI has a continuation mechanism: if the average discount exceeds 10% over a two-year period, a continuation vote is triggered. The current two-year test runs to 31 December 2025, and with a 22.8% average discount since 1 January 2024 to the report date, a vote will likely be triggered. The Board plans a general meeting before the 2026 AGM to table recommended proposals on the Company’s future.
Opinion: the review is the right move. Persistent double-digit discounts across alternative trusts have been a feature of the market, but a 20-25% discount for SBSI is hard to ignore given the portfolio’s steady income and the ability to exit assets at NAV. Expect discount management, structure and liquidity to be front and centre in December’s update.
Impact, policy tailwinds and portfolio positioning
On impact, SBSI has now committed £96 million to more than 190 frontline organisations, reaching 422,000 people since launch – at least 98% of whom are underserved and disadvantaged – and generating £238 million of public and household savings and benefits. The trust adopted the FCA’s “Sustainability Impact” label in December 2024, which sets expectations for impact measurement and reporting.
Government policy could be helpful. The year saw the creation of the Social Impact Investment Advisory Group and, in July 2025, the £500 million Better Futures Fund to back social outcomes partnerships focused on vulnerable children and families. Subject to the strategic review, the Company may be well placed to engage with such opportunities.
Jargon buster
- NAV (Net Asset Value): the value of the portfolio minus liabilities, per share.
- Discount: when the share price trades below NAV. A 25% discount means investors pay 75p for £1 of assets.
- NAV total return: change in NAV plus dividends, showing underlying portfolio performance.
- Social Outcomes Contracts: payment-by-results agreements with Government for delivering measurable social outcomes.
Balance sheet, cash and commitments
Net assets fell from £86.46 million to £83.49 million, largely due to £2.42 million of dividends and £1.47 million of buy-backs exceeding the net return. Liquidity improved: cash and money market funds stood at £10.07 million, with 17% of NAV in liquidity assets. Uncalled commitments were £11.83 million.
During the consultation, the manager will not make new commitments that extend portfolio maturity; repayments are being parked in money market funds. There is no gearing and no foreign exchange exposure.
Why this matters for SBSI shareholders
- Value vs risk: a 20-25% discount offers potential upside if the Board finds a structure that narrows it. The flip side is uncertainty, flagged by the auditors as a material uncertainty under going concern while the review is ongoing.
- Income resilience: recurring income looked strong in FY25, but part of the dividend uplift was one-off. Watch for sustainability of the 3.76p level into 2026.
- Valuation credibility: further exits at NAV in property and outcomes funds support the marks, even as housing valuations were written down due to higher discount rates.
- Policy support: with the Better Futures Fund and broader Government engagement, deal flow could be attractive – subject to what the strategic review allows the trust to do.
What to watch next
- AGM update by 17 December 2025 on the strategic review and any proposed structure changes.
- Discount behaviour and buy-back activity as liquidity is recycled into money market funds.
- High Impact Housing valuations as discount rates evolve.
- Dividend guidance for 2026, given the 2025 one-off income distribution.
- Continuation vote mechanics for 2026 if the two-year discount test triggers as expected.
Where to dig deeper
- Annual Report and Financial Statements (2025)
- Company website
- 2025 Impact Report
- Portfolio Manager results video
Josh’s take
This is a classic story of good impact and okay NAV progression meeting poor market sentiment for alternative trusts. The portfolio is doing much of what it says on the tin – generating income, exiting assets around NAV, and delivering social outcomes at scale. But the market wants liquidity and clarity. If the Board can present a credible plan in December to address the discount and future structure, there is real scope for rerating from here. Until then, expect the shares to trade on sentiment and progress updates rather than fundamentals alone.
