The Investment Company PLC Reports Negative Return and Widened Discount in FY2025

FY2025 results: small NAV decline, larger share price fall and a wider discount

The Investment Company PLC has reported a modest fall in net asset value (NAV) but a sharper fall in the share price for the year to 30 June 2025. The NAV per share slipped 0.85% to 79.62p, while the ordinary share price fell 10.06% to 63.50p. The discount to NAV widened to 20.25% from 12.08% a year earlier, which is the big story here.

Total return per ordinary share was negative at (0.78)p, compared with 49.50p in the prior year. No dividends were paid.

Key numbers at a glance

Metric	30 June 2025	30 June 2024 (restated)	Change
Equity shareholders’ funds	£7,313,735	£7,376,741	(0.85)%
Number of ordinary shares in issue*	9,186,025	9,186,025	0.00%
NAV per ordinary share	79.62p	80.30p	(0.85)%
Ordinary share price (mid)	63.50p	70.60p	(10.06)%
Discount to NAV	20.25%	12.08%	+8.17 percentage points
Total return per ordinary share	(0.78)p	49.50p	Turned negative
Dividends paid per ordinary share	–	–	–

*Excluding shares held in Treasury.

What the company said about performance

Chairman Ian Dighé pointed to “many headwinds” in the UK over the period and reiterated the Board’s belief in high quality, quoted UK small and mid-cap companies as a route to long-term capital growth. The Investment Manager, Chelverton, was described as having a “very credible track record” and the Board expects to take advantage of opportunities as market conditions improve.

Beyond that, detailed portfolio drivers or sector contributors were not disclosed in the announcement. The full Annual Report will contain more colour.

Why the wider discount matters to shareholders

The discount is the gap between the share price and the NAV. At 20.25%, investors are paying roughly 80p for every £1 of underlying assets. That’s materially wider than last year’s 12.08% and reflects a tougher year for sentiment even though the NAV only dipped 0.85%.

In plain terms, there are two moving parts to returns in an investment trust like this: the NAV and the discount. This year, the NAV was broadly flat, but the widening discount did the damage to the share price. If performance stabilises and sentiment improves, a narrowing discount can be a tailwind for returns. Of course, it can also stay wide if the market remains cautious on UK small and mid-caps.

Share split explained: five-for-one and why your numbers look different

On 10 March 2025, the Company completed a five-for-one share split. Shareholders received five new ordinary shares for each existing share held at the 12 March 2025 record date. The comparatives in this announcement have been restated to reflect the split.

That means the share count and per-share figures are comparable year-on-year despite the split, and the number of ordinary shares in issue is unchanged at 9,186,025 on that restated basis.

Income update: no dividend this year

Dividends paid per ordinary share were not disclosed for prior periods in this RNS, but for FY2025 the Company stated that no dividends were paid. Total return per ordinary share, which captures income plus capital gains after tax, was (0.78)p compared with 49.50p in FY2024.

Outlook: positioning for a recovery in UK small and mid-caps

The message from the Chairman is clear: the Board and Chelverton remain committed to quoted UK small and mid-cap equities and believe the asset class will deliver strong capital growth over the long term. If and when market conditions improve, they expect to take advantage of opportunities.

For investors, the key swing factors are likely to be underlying NAV progress and whether the discount can narrow from 20.25%. A steadier macro backdrop and improved risk appetite for UK smaller companies would help on both fronts.

Dates and housekeeping: AGM details and documents

The Annual General Meeting will be held on Tuesday 14 October 2025 at 2.30 pm at the offices of Chelverton Asset Management Limited, Ground Floor Office, Basildon House, 7 Moorgate, London EC2R 6AF.

The Annual Report will be submitted to the National Storage Mechanism and made available on the Company’s website. Contact details for the Chairman, Investment Manager, Broker and Company Secretary are provided in the announcement.

My take: the good, the bad, and what to watch next

Positives

• NAV resilience: a 0.85% decline is modest in the context of a tough year for UK small and mid-caps.
• Clear long-term stance: continued commitment to an asset class that historically has rewarded patient capital.
• Potential upside from discount: a 20.25% discount offers scope for a re-rating if performance and sentiment improve.

Negatives

• Wider discount and share price fall: a 10.06% drop in the share price despite a flatish NAV underscores market caution.
• Negative total return and no dividend: income seekers will note the absence of a payout and a negative per-share return.
• Limited disclosure in this RNS: no portfolio-level detail here on winners, losers, or positioning shifts.

Practical checklist for shareholders

• Read the Annual Report when published for full portfolio attribution and risk commentary.
• Consider attending or voting at the AGM on 14 October 2025 to hear directly from the Board and the Manager.
• Track the discount to NAV. Movement in the discount can drive returns even when the NAV is steady.
• Watch for any signs of improving sentiment in UK small and mid-caps, which could aid both NAV and the rating.

Bottom line

This was a year where sentiment, not assets, did most of the damage. The NAV barely budged, but the discount widened to 20.25% and the share price fell over 10%. If the Manager can deliver on the long-term small and mid-cap thesis and markets thaw, there is room for the rating to improve. Until then, the shares are priced cautiously, and patience is required.