Capital Gearing Trust P.l.c. - Final Results for the Year Ended 31 March 2025

Capital Gearing Trust P.l.c. - Final Results for the Year Ended 31 March 2025

PR Newswire

LONDON, United Kingdom, May 29

LONDON STOCK EXCHANGE ANNOUNCEMENT

Capital Gearing Trust P.l.c.

(the 'Company')

Final Results for the Year Ended 31 March 2025

Legal Entity Identifier: 213800T2PJTPVF1UGW53

Information disclosed in accordance with DTR 4.1.3

Capital Gearing Trust (LSE: CGT), the FTSE 250 investment trust focused on preserving and, over time, growing shareholders' real wealth, announces its Final Results for the year ended 31 March 2025.

Financial Summary

	31 March 2025	31 March 2024
Share price	4,785.0p	4,695.0p
NAV per Ordinary share	4,924.8p	4,810.5p
Dividends per share(1)	102p	78p
Share price discount to NAV per share(2)	2.8%	2.4%
Shareholders' funds	£885.0m	£1,060.2m
Market capitalisation	£859.9m	£1,034.7m
Ongoing charges ratio(2)	0.56%	0.47%

Total return performance to 31 March 2025

	1 year	3 years	5 years	10 years
Share price total return(2)	3.6%	(3.1%)	20.9%	55.1%
NAV total return(2)	4.1%	2.1%	27.1%	65.3%
Consumer Price Index(3)	2.6%	16.6%	25.7%	36.9%

(1) The 2025 dividend comprises an interest distribution of 66p and an equity dividend of 36p. Please refer to the Chairman's Statement below for further details.

(2) Please refer to the Company's Annual Report and Financial Statements for the year ended 31 March 2025 ('2025 Annual Report') for definitions and a reconciliation of the Alternative Performance Measures to the year-end results.

(3) The Company does not have a formal benchmark but uses the Consumer Price Index ('CPI') as a relative measure over the medium to longer term.

Highlights

• Net asset value ('NAV') total return of +4.1%. This compares with the Consumer Price Index ('CPI') return of +2.6%. The share price total return over the period was +3.1%.
• All parts of the portfolio delivered a positive contribution with the exception of the infrastructure holdings.
• The discount / premium control policy ('DCP'), which aims to ensure that, in normal market conditions, the Company's ordinary shares trade at close to underlying asset value, has worked well over the year under review. As discounts within the investment trust sector have continued to be stubbornly wide, the

Company's discount control policy shelters investors from share price volatility providing opportunities to buy in, and exit, at close to NAV.

• The Company is receiving more interest income than in previous years as a result of a change in the portfolio allocation, coupled with an increase in interest rates. To mitigate the Company's tax liability the Board has resolved to pay at least part of this year's dividend to shareholders as an interest distribution, which in turn increases the level of the dividend. Accordingly the Board has recommended a final dividend of 102p per share.
• The Chairman, Jean Matterson, will be standing down at the forthcoming AGM. Karl Sternberg will succeed her as Chairman.
• The Company remains defensively positioned, with material allocations to dry powder and index-linked bonds, while maintaining a cautious stance towards risk assets.
• On Thursday 29 May 2025 at 2.00 p.m., the Investment Managers will present the Company's Annual Results via the London Stock Exchange's SparkLive webcasting service. Investors and potential investors are invited to sign up for the event via the following link: https://sparklive.lseg.com/CapitalGearingTrust/events/059f93c6-4d52-474a-8430-bca5629b425a/capital-gearing-trust-plc-full-year-results-presentation

Chairman's Statement

Performance

I am pleased to present the Annual Report of Capital Gearing Trust P.l.c. (the 'Company') for the year ended 31 March 2025.

In what is my final statement as Chairman of the Company, I am able to report that over the year ended 31 March 2025, the Company's NAV total return was +4.1%. This compares with the Consumer Price Index ('CPI') return of +2.6%.The share price total return over the year was +3.6%. Whilst the Company has not made up all of the lost ground experienced at the start of this decade, the Board feels that the Investment Manager should be commended for these returns in such volatile markets and it is pleasing to note that all but one asset class contributed positively to returns. As part of its review of the Investment Manager the Board assesses NAV performance against CPI over the short term (three years) and over the longer-term (ten years). Over the past three and ten year periods, the Company's NAV total returns have been +2.1% and +65.3%, whilst CPI returned +16.6% and +36.9% respectively.

Further details regarding the Company's performance can be found in the Investment Manager's Report below.

Discount/Premium Control Policy and General Meeting

Our discount control policy ('DCP'), which aims to ensure that, in normal market conditions, the Company's Ordinary shares trade at close to underlying asset value, has worked well over the year under review. The DCP encompasses both share issuances at a premium and share buybacks at a discount.

Consistent with the experience of many investment companies across different asset classes, the Company has been required to significantly increase the rate of its share buybacks this year to meet the objective of the DCP. The Company has repurchased 4,067,965 (2024: repurchased 4,220,036) shares for a total consideration of £194.5 million (2024: £195.1 million) over the year ended 31 March 2025. No shares were issued. Shares which are bought back are held in Treasury rather than cancelled as they can be reissued from Treasury more efficiently than issuing new shares. Whilst the repurchase of the Company's shares does shrink the assets of the Company, the Board has completed an impact assessment and noted that due to the vast majority of the Company's expenses being charged on an ad valorem basis, that is they rise and fall commensurably with the Company's assets, there is only a marginal increase in the Company's ongoing charges ratio, and hence the DCP continues to benefit shareholders.

Reflecting both the quantum of buybacks completed by the Company and the Board's commitment to the DCP, the Company held a General Meeting in March 2025 to renew shareholder authority to buy-back shares when it became clear that the authority to buy-back 14.99% of the Company's share capital granted at the Annual General Meeting in July 2024 would be exhausted before the date of the 2025 Annual General Meeting. The renewal was approved by shareholders and hence the Company has been able to continue the operation of the DCP and a further 372,609 Ordinary shares for a total consideration of £18.0 million have been repurchased in the Company's new financial year to date. Since the renewed authority will automatically expire at the conclusion of the Company's forthcoming Annual General Meeting, in line with usual practice, the Company will ask shareholders to approve a further renewal of the authority to repurchase up to 14.99% of its capital at a discount to estimated NAV at the forthcoming Annual General Meeting.

Income and Distributions

The amount the Company receives in dividends and interest is the outcome of the application of its investment policy, and the amounts distributed to shareholders are designed to satisfy the Company's minimum annual income distribution test to ensure that it maintains its investment trust status.

As highlighted in my previous statements, the Company is receiving more interest income than in previous years as a result of a change in the portfolio allocation, coupled with an increase in interest rates. If not distributed to shareholders, such interest income is subject to UK corporation taxation and to mitigate the Company's tax liability the Board has resolved to pay at least part of this year's dividend to shareholders as an interest distribution. This means taking advantage of the UK interest streaming rules, which allow approved investment trusts which have income from interest bearing assets to treat all or part of a distribution as an interest distribution, rather than a conventional dividend. By doing this, the Company will receive a corresponding deduction in its corporation tax liability.

Accordingly the Board has recommended a final dividend of 102p per share which will be paid, subject to shareholder approval, on 8 July 2025 to shareholders on the register on 6 June 2025. The ex-dividend date will be 5 June 2025. For the purpose of personal taxation calculations, the Board has designated the payment as follows:

Interest distribution per Ordinary share: 66p

Dividend distribution per Ordinary share: 36p

Total distribution per Ordinary share: 102p

The total distribution represents an increase of 30.8% from the 78p paid to shareholders in respect of the Company's financial year ended 31 March 2024. Approximately two thirds of the increase is attributable to the element of the interest distribution which has reduced the Company's corporation tax liability. Shareholders should note that there is no guarantee that the Company will continue to be in receipt of the current level of interest income, and accordingly, this year's elevated distribution should not be viewed as a precedent for future payments. The Company's total distribution each year will continue to be largely determined by net revenue received by the Company each year.

The distribution will be split into the interest and dividend components on shareholder tax vouchers. The tax treatment of an interest distribution in the hands of a shareholder may be different to the treatment of a dividend receipt. If you are in any doubt as to your tax position or you are subject to tax in a jurisdiction outside the UK, you should consult an appropriate professional adviser.

Company Advisers

During the year, and following a review of its operational arrangements, the Board appointed Frostrow Capital LLP and JP Morgan Securities with effect from 1 July 2024 to provide company secretarial and administration, and DCP services, respectively. There were also new appointments at CG Asset Management Limited ('CGAM') in relation to its investor relations and marketing services. The transition to these new service providers has been seamless, and the appointment of a dedicated investor relations function at CGAM, together with the recent appointment of SecNewgate, a strategic communications firm, is helping to increase the Company's profile with investors and potential investors across the investment community.

Marketing, Promotion and Shareholder Interaction

Following enhancements to investor relations and marketing resource, as mentioned above, the Board is continuing to work with CGAM to increase the Company's profile via various media including video conferences, podcasts and in-person meetings, together with ongoing interaction with national and investment industry journalists. It is the Board's view that enhancing the Company's profile will benefit all shareholders, through a better understanding of the Company, and its objectives, and by creating sustained demand for its shares. If you would like to register for email alerts concerning the Company please use the following link: https://capitalgearingtrust.com/subscribe

The Board

The Board plans for succession to ensure it retains an appropriate balance of skills, knowledge and diverse perspectives. Following the successful conclusion of two recruitment campaigns this year, we were delighted to welcome Karl Sternberg and Theodora Zemek as non-executive directors with effect from 5 September and 1 November 2024 respectively. Karl has wide experience in the investment trust sector, as the Chair of Monks Investment Trust, and a past and present board member of a number of other trusts. Theo is new to the investment trust sector but has been recruited for her valuable experience in fixed interest markets having worked at M&G, New Star Asset Management and AXA Investment Management.

I say farewell at the forthcoming Annual General Meeting. Looking back over my tenure, the Company is considerably larger in terms of net assets than when I first joined; the CGAM team has grown, and is stronger with broader expertise; and there is considerably more information on the portfolio and market background available to the Board, along with improved marketing and enhanced information available to shareholders. It has had challenges, but has been an enjoyable experience working with both Board colleagues and the Investment Managers. I am delighted to confirm that Karl Sternberg will succeed me as Chairman. I know that the Board will be ably led by Karl, alongside other directors with a wide range of the requisite skills needed to guide the Company through all eventualities.

There are no plans to appoint any more directors at the current time, so my retirement takes the Board down to five members. The Board complies with all applicable diversity targets for UK listed companies and it is intended that this will continue to be the case.

Annual General Meeting ('AGM')

The AGM will be held on Thursday 3 July 2025 at 11.30am at the Numis Auditorium, 45 Gresham Street, London EC2V 7BF. I hope as many shareholders as possible will be able to attend to take the opportunity to meet the Board and to hear a presentation from the Investment Manager. However, if you are unable to attend in person, you can watch the Investment Manager's presentation soon after the AGM when a recording will be posted on the Company's website. There will also be an opportunity to hear from the Investment Managers on Thursday 29 May 2025 at 2.00 p.m., when the team will present the Company's Annual results via the London Stock Exchange's SparkLive webcasting service. Questions can be submitted at any time before or during the live presentation. Investors and potential investors are invited to sign up for the event via the following link: https://sparklive.lseg.com/CapitalGearingTrust/events/059f93c6-4d52-474a-8430-bca5629b425a/capital-gearing-trust-plc-full-year-results-presentation

Details on the resolutions to be proposed at the AGM can be found in the 2025 Annual Report. The Board firmly believes that all the resolutions being proposed are in the best interests of the Company and its shareholders and encourages shareholders to vote by proxy in favour of the resolutions, as the Board intends to do in respect of their own shareholdings. We would encourage shareholders to return their votes by electronic proxy, including by instructing their platform providers to vote on their behalf if their shares are held through platform nominees.

Outlook

As we look ahead, the global investment environment continues to be marked by elevated levels of uncertainty. Persistent inflationary pressures, fluctuating interest rates, and ongoing geopolitical tensions, most recently exacerbated by President Trump's trade tariffs, are reshaping market dynamics.

Against this backdrop, there has perhaps been no more of an apt time during my tenure to highlight the benefits of the Company's objective, that is to preserve and, over time, to grow shareholders' real wealth. Whilst the coming year will be incredibly difficult for active managers to navigate, your Investment Manager's cautious stance on equities and focus on high-quality bonds should ensure that the Company remains a relatively safe haven for your money as we aim to limit drawdowns and yet keep pace with inflation.

Moreover, as discounts within the investment trust sector have continued to be stubbornly wide, the Company's discount control policy shelters investors from share price volatility providing opportunities to buy in, and exit, at close to NAV.

I would like to conclude by thanking my fellow Directors and the team at CGAM for their support and contribution during my time on the Board and I would also like to extend my thanks to our shareholders for their ongoing support. I wish the Company's fortunes well for the future.

Jean Matterson

Chairman

28 May 2025

Investment Manager's Report

Review

The Company delivered a NAV total return of +4.1% and a share price total return of +3.6% over the year. This compares with CPI inflation of +2.6%, the investment trust index return of +3.0% and sterling aggregate bond returns of +0.5%. All parts of the portfolio delivered a positive contribution with the exception of the infrastructure holdings.

Collectively the risk assets (i.e. listed funds with underlying holdings in equity, infrastructure and alternative assets), which on average over the year accounted for 32% of the portfolio, outperformed the investment trust index with most components outperforming relevant indices. The only weak spot was the allocation to US equities which underperformed as a result of limited exposure to this region and the 'Magnificent Seven' in particular. This outperformance was mainly achieved through some of the largest holdings: a function of underlying performance, discount narrowing, and increased M&A activity. Our largest equity investment trust holding, Polar Capital Global Financials Trust plc, delivered in excess of 20% returns due to the combination of discount narrowing and strong underlying performance. The largest property holding, PRS REIT plc, delivered in excess of a 50% return after a strategic review resulted in the portfolio being offered for sale. The largest hedge fund holding, BH Macro Ltd, delivered in excess of a 10% return almost entirely from discount narrowing. One of our larger infrastructure holdings, BBGI Global Infrastructure, delivered approximately a 14% return after a takeover bid from the British Columbia Investment Management Corporation. The weakest performing part of the portfolio was our renewable infrastructure investment trusts, collectively representing about 3% of the portfolio, with both UK Wind plc and the Renewable Infrastructure Group Ltd experiencing double digit falls of around 20%.

Attribution Analysis

Return on portfolio		%	%
Cash & T-Bills		0.6
Credit		0.3
Dry Powder			0.9
Index-Linked Bonds			1.0
Gold		0.4
Infrastructure		(0.1)
Alternatives		0.5
Property		0.5
Equities		1.1
Risk Assets			2.4
Gross return			4.3
NAV accretion from buybacks		0.4
Management fee and other costs		(0.6)
NAV total return(1)			4.1

(1) Alternative Performance Measure ('APM'). Please refer to the 2025 Annual Report for definitions and a reconciliation of the Alternative Performance Measures to the year-end results.

Source: CGAM and Frostrow. All figures are on a total return basis. Contributions calculated using arithmetic methodology.

The level of M&A activity in our portfolio helps to illustrate what an eventful year it was for the investment trusts market. Discounts appear to have hit cyclical troughs after a couple of years of widening, which attracted a number of value investors and hedge funds into the sector. Boards have certainly taken note and are taking discount controls more seriously. After a period of relative underperformance we believe there is scope for investment trusts to outperform the global equity market over the medium term.

It was another weak year in the bond market with both the Sterling Aggregate Bond Index and the Global Aggregate Bond Index delivering small positive gains in GBP terms. In the UK, long bond prices fell, and in the US weak currency offset a small rise in bond prices. The Company's bond exposure outperformed these indices as it benefited from having a majority of its index-linked bond holdings (38% of the portfolio) in relatively short-dated sterling bonds at the start of the year and rotated into US Treasury Inflation-Protected Securities ('TIPS') during the year after a period of strong sterling appreciation post the UK general election. As a result, the bond portfolio delivered a positive return helping the overall portfolio to make its modest gains. The rise in long-dated UK inflation-linked yields to above 2%, levels not seen since the early 2000s, is a very welcome development representing the normalisation of a previously highly distorted market.

The Company ended the year with approximately 32% of its portfolio in dry powder assets (i.e. cash, treasury bills and high quality short dated corporate credit). This is close to the highest levels we have held in these highly defensive assets, and they have proved very helpful for portfolio resilience given the stern test in financial markets shortly after the period end. Over the year, developed market credit spreads narrowed, delivering gains but reducing prospective returns in this asset class. As a result the corporate credit holdings were reduced from approximately 12% to around 9% of the portfolio at the year end.

Outlook

On the 2 April, shortly after the Company's financial year end, US President Donald Trump announced sweeping trade tariffs on friend and foe alike. The breadth and arbitrary nature of these actions added to a sense of revolutionary change as the institutions that have underpinned Western development and security since the second world war are systematically dismantled. There remains considerable uncertainty over how long lasting and significant these changes will prove but even if these policies are reversed during, or after, a Trump presidency, the role of America as a benevolent hegemon may never return. The world feels that bit more dangerous and divided.

There are early signs that trust in the exceptionalism of American assets is being called into question. The December 2024 Bank of America Global Fund Manager Survey recorded the largest ever overweight allocation to US equities, the culmination of 15 years of staggering outperformance versus other markets. At that point the Trump bump turned to slump as a slew of weaker than expected economic data combined with policy uncertainty and elevated valuations caused a correction in US equities, particularly the Magnificent Seven. To date there is limited evidence of the impact of recent events on corporate earnings but there is a considerable risk that margins will suffer given the extremely elevated levels of profitability achieved by US corporates. An ominous precedent is the dot com bust which also occurred after 15 years of outperformance of US equities and resulted in a decade of relative underperformance as write-offs and bankruptcies from excessive capital expenditure weighed on profits.

Bond markets are also beginning to show strain in the face of excessive government deficits. While it was central to US Treasury Secretary Scott Bessent's economic strategy that the fiscal deficit be reduced to 3% of GDP, neither the current fiscal plans nor the growth prospects for the US economy suggest that this is likely to be achievable. Closer to home, the UK faces similar issues: a combination of weaker-than-expected growth, higher-than-expected interest rates, and the Government's wafer-thin fiscal headroom have created a vicious cycle that will likely require some combination of tax increases and spending cuts later in the year. Even Germany has dropped its debt brake amendment to allow significant increases to spending on infrastructure and defence. Despite governments' commitments to fiscal consolidation, it appears bond markets will have to prepare to digest a wave of issuance over the coming years.

The sheer weight of this issuance will create additional upward pressure on long bond yields even as many central banks reduce short-term interest rates to counter the economic slowdown. Whilst tariffs are likely to have a deflationary impact on the overall global economy, they will create pockets of inflation, not least in the US where retailers are likely to pass through a majority of price rises to consumers. These new relatively steep yield curves are a welcome opportunity. Around the year end we started to lengthen the duration of our UK index-linked holdings into better values. Whilst there is still scope for further curve steepening, historically purchasing long UK index-linked bonds above a 2% real yield has been a rewarding investment and we are watching developments in this market with interest.

Against this backdrop, the Company remains defensively positioned, with material allocations to dry powder and index-linked bonds, while maintaining a cautious stance towards risk assets. It is true that markets will always face a degree of uncertainty. However, the present level of uncertainty faced by the global economy in the face of constant change to trade policy makes the possible outcomes for corporate profits, inflation, interest rates and global growth staggeringly wide. We expect that these conditions will continue for some time. Our expectation is that the portfolio's defensive stance will prove resilient in the face of the testing outlook that the global economic order currently faces and generate positive real returns for shareholders.

Peter Spiller Alastair Laing Chris Clothier

CG Asset Management Limited

28 May 2025

Strategic Review

The Directors aim to ensure that the Company maintains its investment strategy, has operational resilience, meets its regulatory requirements as an investment trust and navigates the financial and economic circumstances.

Through the remit of the Audit and Risk Committee, Directors have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The principal risks and uncertainties facing the Company, together with the mitigating actions the Board takes, are set out in the table below.

Whilst Directors have not identified any new emerging risks, the Company faces continuing risks arising from geopolitical events such as conflict in the Middle East and Ukraine and volatility in the equity markets. It is difficult to assess how these exogenous risks will impact the Company, but they do introduce caution on returns that might be achieved in the future given the inflationary impact on equity and bond returns and the risk of market shocks caused by geopolitical risk. The Investment Manager continues to apply protective measures in constructing the portfolio but is also aware that an 'oversold market' can present opportunities as well and it retains liquidity in the portfolio to exploit these if they become available.

Risk	Mitigation
Investment strategy and performance The Board is responsible for setting the investment strategy of the Company and monitoring investment performance. Inappropriate strategy and/or poor investment performance may have an adverse effect on shareholder returns. There is increasing awareness of the challenges and emerging risks posed by climate change. The investment process considers ESG factors, as set out in the Strategic Review. Overall the specific potential effects of climate change are difficult, if not impossible, to predict and the Board and Investment Manager will continue to monitor developments in this area. Assessing geopolitical risk has always been part of the investment process. There are a growing number of geopolitical conflicts which pose an increased risk to market stability. In addition to the ongoing conflict between Russia and Ukraine, rising tensions in Southeast Asia and the Middle East, U.S. trade policy under the second Trump administration adds further complexity to the geopolitical environment. These trade tensions, along with uncertainty surrounding interest rate and inflation and discounts on investment companies' shares have had and will continue to have a significant impact on the Company and its investment portfolio. Increased overall risk due to inflation, higher interest rates, supply issues and ongoing and increasing global political tensions and the impact of heightened interest rates.	The Company's strategy is formally reviewed by the Board at least annually, considering investment performance, shareholder views, developments in the marketplace and the structure of the Company. Investment performance is reviewed by the Board on a regular basis against CPI. The composition of the portfolio is provided at each Board meeting and allows the monitoring of the spread of investments and associated investment risks. The Investment Manager's approach to ESG is set out in the 2025 Annual Report. The Company has limited direct impact on the environment as it invests primarily in government bonds and closed ended and other collective investment vehicles. Stock selection, portfolio composition and liquidity are explained in detail by the Investment Manager at each meeting. The Investment Manager is formally appraised at least annually by the Management Engagement Committee.
Premium/discount level The Company's share price could be impacted by a range of factors causing it to be higher than (at a premium to) or lower than (at a discount to) the underlying NAV per share. Excessive demand for, or supply of, shares can create liquidity issues, restricting the ability of investors to buy and sell shares in the secondary market. Fluctuations in the share price can cause volatility which may not be reflective of the underlying investment portfolio. Risk remains relatively unchanged	The Company operates a discount/premium control policy ('DCP'), under which it aims to purchase or issue shares to ensure, in normal market conditions, that the shares trade close to their underlying NAV per share. The DCP increases liquidity and reduces volatility by preventing the build-up of excessive demand and/or supply for the Company's shares which, the Board believes, is in the best interests of shareholders. The DCP continues to be reviewed to ensure liquidity for issuance and buyback. The levels of issuance/buyback of shares are reported to the Board on an ongoing basis and at each Board meeting the Board considers the Investment Manager's ability to invest new proceeds (in the case of issuance) and maintain sufficient liquidity (in the case of buybacks) to meet the demands of the DCP. Since the inception of the DCP, the Company has issued and bought back a substantial number of shares, with the more recent trend being buying back.
Operational The Company is reliant on third-party service providers and key teams at such service providers. Failure of the internal control systems of these third parties could result in inaccurate information being reported or risk to the Company's assets. Risk remains unchanged since it is still less than a year since the new suppliers have been in place. Given the seamless transition of the applicable roles to date it is expected that this risk will reduce next year.	The Audit and Risk Committee formally reviews each service provider at least annually, considering their reports on internal controls, information security, and the resources available to them. The Management Engagement Committee reviews the service levels and how the service providers have performed. The operational requirements of the Company from its service providers are subject to rigorous testing including the use of office/home working and online communication. Additionally, the Investment Manager's and Administrator's technology environments are continually maintained and subject to regular testing, vulnerability scans and patch management. As part of this review the Board considers the measures taken by each supplier to mitigate its cybersecurity risk. The transition of secretarial and administration services and operation of the DCP to Frostrow Capital LLP and JP Morgan Securities respectively was carefully planned and has not resulted in the disruption of services required by the Company. Further details of the Company's internal control and risk management system is provided in the 2025 Annual Report.
Regulatory and governance The Company operates in a regulatory environment. Failure to comply with section 1158 of the Corporation Tax Act 2010 could result in the Company losing investment trust status and being subject to tax on capital gains. Failure to comply with other regulations could result in financial penalties or the suspension of the Company's listing on the London Stock Exchange. Risk remains relatively unchanged	Compliance with relevant regulations is monitored on an ongoing basis by the Company Secretary and Investment Manager who report regularly to the Board. The Board also takes into account increasing governance requirements and complies with them wherever practical or explains why there is any divergence. The Board monitors changes in the regulatory environment and receives regulatory updates from the Investment Manager, Company Secretary, lawyers and auditor as relevant. The Board is appraised of corporate governance issues and changes and as far as practical the Company complies with governance guidance or explains where it does not and meets the guidance of the AIC Corporate Governance Code.
Financial and economic The Company's investments are impacted by financial and economic factors including market prices, interest rates, foreign exchange rates and credit which could cause losses to the investment portfolio. Risk has been heightened by geopolitical events	The Board regularly reviews and monitors the management of market risk, interest rate risk, foreign currency risk and credit risk. These are explained in detail in note 15 to the financial statements in the 2025 Annual Report. Inflation, and geopolitical risks, are considered a component of market risk, with the impact of higher inflation and interest rates and events in Ukraine and the Middle East taken into account. This year the Board authorised the purchase of hedged Japanese and US Treasury Bills, which are hedged back to sterling to remove some of the currency risk. The Company has sufficient cash resources and liquidity in its portfolio to meet its operating requirements, including the operation of DCP. In common with most commercial operations, there are always exogenous risks and consequences, which are difficult to predict and plan for in advance. The Company does what it can to address these risks when they emerge, not least operationally and in trying to meet its investment objective.

Share buybacks

During the year the Company bought back 4,067,965 shares at an average price of 4,746.7p per share and for an aggregate consideration of £194.5 million (2024: repurchased 4,220,036 shares at an average price of 4,585.2p per share and for an aggregate consideration of £195.1 million). Shares are repurchased at a discount to the NAV thereby covering the costs of the DCP and associated portfolio transaction costs and providing some accretion to the NAV per share. All shares were bought back in accordance with the DCP, which is detailed further in the 2025 Annual Report. Since the year end, the Company has repurchased a further 372,609 shares.

Going concern

The Audit and Risk Committee has undertaken an assessment of whether the Company is a going concern. The Company's investment objective and business activities, together with the main factors likely to affect its future development and performance, including prevailing macro-economic conditions, are described above.

The financial position of the Company, including its cash flows and liquidity positions, is set out in detail in the financial statements. Note 15 to the financial statements describes the Company's processes for managing its capital, its financial risk management objectives, details of its financial instruments and its exposures to market price, interest rates, foreign currency, credit and liquidity risk. The Board works closely with the Investment Manager and the Company Secretary to ensure that the Company's operations are resilient, and its portfolio robust enough to meet challenges and opportunities.

The Directors also take into account the liquidity of the portfolio and scenario stress testing when considering the viability of the Company and its ability to meet liabilities as they fall due and to fulfil the ongoing operation of the DCP. The stress tests examined downside scenarios which combined a substantial fall (up to 25%) in stock markets, and therefore asset values, with a considerable loss of income. The impact of such severe scenarios are then mitigated by a significant reduction in management fees and most expenses. The results of the stress testing indicated that there was sufficient portfolio liquidity and net income for the Company to continue in operation. The stress tests also examined the operation of the DCP in the event of the Company having to buy back a substantial number of shares.

The Directors believe that the Company is well placed to manage its business risks successfully and consider that the Company currently has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence. For this reason, they continue to adopt the going concern basis in preparing the annual report and financial statements. The Directors do not consider that there are any material uncertainties to the Company's ability to continue to adopt this approach over a period of 12 months from the date of approval of these financial statements.

Viability statement

The Board has carried out a robust assessment of the principal risks facing the Company including those that would threaten its business model, future performance, solvency or liquidity. The Board has drawn up a matrix of the risks facing the Company and has put in place appropriate processes and controls in order to mitigate these risks as far as practicable. The principal risks which have been identified, and the steps taken by the Board to manage these, are detailed above.

The Company is a long-term investor and the Board believes it is appropriate to assess the Company's viability over a five-year period in recognition of the balance between the Investment Manager's long-term horizon and also what the Directors believe to be investors' horizons, taking account of the Company's current position and the potential impact of the principal risks and uncertainties, the operation of the DCP and the circumstances of investment companies more generally.

As mentioned under the going concern paragraph above, the Directors also take into account the liquidity of the portfolio and scenario stress testing when considering the viability of the Company. The results of the stress testing indicated there was sufficient portfolio liquidity and net income for the Company to continue in operation for at least three years.

The Directors do not expect there to be any significant change in the principal risks that have been identified and the adequacy of the controls in place. Also, the Directors do not envisage any change in the Company's strategy or its objective, or any events, that would prevent the Company from continuing to operate over that period as the Company's assets are liquid, its commitments are limited, and the Company intends to continue to operate as an investment trust. The Directors believe that only a dramatic downturn in financial markets, deteriorating economic circumstances, or other crises besetting global markets, could have an impact on this assessment.

Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five years.

The Board's Strategic Report contained within the 2025 Annual Report have been approved by the Board and signed on its behalf by:

Jean Matterson

Chairman

28 May 2025

Directors' Responsibilities Statement

in Respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law) and 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law). 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 net return of the Company for that year. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• state whether applicable UK Accounting Standards, comprising FRS 102, 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;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
• prepare a directors' report, a strategic report and directors' remuneration report which comply with the requirements of the Companies Act 2006.

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 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 ensuring 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.

The Annual Report and Financial Statements are published on the Company's website which is maintained by the Investment Manager. The Investment Manager is responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Declaration

Each of the Directors, whose names and functions are listed in the Governance Report, confirms that, to the best of his or her knowledge:

• the Company's Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102, and applicable law), give a true and fair view of the assets, liabilities, financial position and net return of the Company; and
• the Board's 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.

For and on behalf of the Board

Jean Matterson

Chairman

28 May 2025

Income Statement

for the year ended 31 March 2025

		Year ended 31 March 2025			Year ended 31 March 2024
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Net gains/(losses) on investments	8	-	13,059	13,059	-	(3,113)	(3,113)
Net gains on currency swap contracts		-	1,354	1,354	-	-	-
Net currency gains/(losses)		-	51	51	-	(109)	(109)
Investment income	2	26,694	-	26,694	25,145	-	25,145
Other income	2	339	-	339	400	-	400
Gross return		27,033	14,464	41,497	25,545	(3,222)	22,323
Investment management fee	3	(3,950)	-	(3,950)	(4,298)	-	(4,298)
Other expenses	4	(1,513)	-	(1,513)	(1,070)	-	(1,070)
Net return before tax		21,570	14,464	36,034	20,177	(3,222)	16,955
Tax	5	(43)	-	(43)	(3,220)	-	(3,220)
Net return attributable to equity shareholders		21,527	14,464	35,991	16,957	(3,222)	13,735
Net return per Ordinary share	7	107.54p	72.26p	179.85p	69.74p	(13.25)p	56.49p

The total column of this statement represents the income statement of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance issued by the Association of Investment Companies.

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

There are no gains or losses other than those recognised in the income statement and therefore no statement of comprehensive income has been presented.

The notes below form an integral part of these financial statements.

Statement of Changes in Equity

for the year ended 31 March 2025

	Note	Called-upsharecapital£'000	Sharepremiumaccount£'000	Capitalredemptionreserve£'000	Specialreserve(1)£'000	Realisedcapitalreserve(1)£'000	Unrealisedcapitalreserve(1)£'000	Revenuereserve(1)£'000	Totalequityshare-holders'funds£'000
Opening balance at 1 April 2023		6,645	1,101,753	16	-	140,426	(7,973)	18,852	1,259,719
Net return for the year		-	-	-	-	(1,980)	(1,242)	16,957	13,735
Cancellation of share premium account	12	-	(1,101,753)	-	1,101,753	-	-	-	-
Shares bought back into treasury	11	-	-	-	(64,350)	(130,776)	-	-	(195,126)
Dividends paid	6	-	-	-	-	-	-	(18,155)	(18,155)
Closing balance at 31 March 2024		6,645	-	16	1,037,403	7,670	(9,215)	17,654	1,060,173
Opening balance at 1 April 2024		6,645	-	16	1,037,403	7,670	(9,215)	17,654	1,060,173
Net return for the year		-	-	-	-	21,205	(6,741)	21,527	35,991
Shares bought back into treasury	11	-	-	-	(194,541)	-	-	-	(194,541)
Dividends paid	6	-	-	-	-	-	-	(16,598)	(16,598)
Closing balance at 31 March 2025		6,645	-	16	842,862	28,875	(15,956)	22,583	885,025

(1) These reserves are available for distribution (except for the unrealised gains on Level 3 investments detailed in Note 15).

The notes below form an integral part of these financial statements.

Statement of Financial Position

as at 31 March 2025

		31 March	31 March
		2025	2024
	Note	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	8	860,407	1,053,792
Current assets
Debtors	9	8,379	4,500
Cash at bank		42,859	11,643
		51,238	16,143
Creditors: amounts falling due within one year	10	(26,620)	(9,762)
Net current assets		24,618	6,381
Total assets less current liabilities		885,025	1,060,173
Capital and reserves
Called-up share capital	11	6,645	6,645
Capital redemption reserve		16	16
Special reserve	12	842,862	1,037,403
Capital reserve		12,919	(1,545)
Revenue reserve		22,583	17,654
Total equity shareholders' funds		885,025	1,060,173
Net asset value per Ordinary share	13	4,924.8p	4,810.5p

The financial statements above were approved by the Board on 28 May 2025 and signed on its behalf by:

Jean Matterson

Chairman

The notes below form an integral part of these financial statements.

Cash Flow Statement

for the year ended 31 March 2025

		Year ended	Year ended
		31 March	31 March
		2025	2024
	Note	£'000	£'000
Net cash inflow from operating activities	14	10,740	10,612
Payments to acquire investments		(1,072,259)	(809,667)
Receipts from sale of investments		1,307,502	1,006,421
Settlement on currency swap contracts		(1,577)	-
Net cash inflow from investing activities		233,666	196,754
Equity dividends paid	6	(16,598)	(18,155)
Repurchase of Ordinary shares		(196,592)	(191,334)
Net cash outflow from financing activities		(213,190)	(209,489)
Increase/(decrease) in cash and cash equivalents		31,216	(2,123)
Cash and cash equivalents at start of year		11,643	13,766
Cash and cash equivalents at end of year		42,859	11,643

The notes below form an integral part of these financial statements.

Notes to the Financial Statements

1 Significant accounting policies

The current reporting year is 1 April 2024 to 31 March 2025. The comparative information is for the period 1 April 2023 to 31 March 2024.

a) Basis of accounting

Capital Gearing Trust P.l.c. is a public company limited by shares, incorporated and domiciled in Northern Ireland and carries on business as an investment trust.

The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (Accounting Standards 'UK GAAP') including Financial Reporting Standard (FRS) 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies ('AIC') in 2022. All of the Company's operations are of a continuing nature.

The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments held at fair value through profit or loss. A robust assessment of going concern by the Audit and Risk Committee is set out in the Board's Strategic Report and can be found above. In concluding on going concern basis, the Directors have taken into account the liquidity of the portfolio, forecasts and obligations under the DCP.

The principal accounting policies are set out below. These policies have been applied consistently throughout the current year and prior period.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

There are no critical accounting estimates or judgements.

b) Valuation of investments

The Company has elected to adopt Sections 11 and 12 of FRS 102 in respect of investments and other financial instruments. The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis in accordance with a documented investment strategy and information is provided internally on that basis to the Board. Accordingly, upon initial recognition the investments are designated by the Company as "held at fair value through profit or loss". Investments are included initially at fair value which is taken to be their cost, including expenses incidental to purchase. Subsequently the investments are valued at fair value, which are quoted bid prices for investments traded in active markets. Where trading in the securities of an investee company is suspended, the investment is valued at the Board's estimate of its fair value following a detailed review and appropriate challenge of the valuations proposed by the Investment Manager. The Investment Manager applies techniques consistent with the International Private Equity and Venture Capital Valuation Guidelines 2018 ('IPEV') (as detailed in note 15). The investments are valued according to a three monthly cycle of measurement dates, or where there is an indication of a change in fair value as defined in the IPEV guidelines.

All purchases and sales are accounted for on a trade date basis.

c) Accounting for reserves

Gains and losses on sales of investments and any other capital charges are included in the Income Statement and dealt with in the capital reserve. Increases and decreases in the valuation of investments held at the year end and foreign exchange gains and losses on cash balances held at the year-end are also included in the Income Statement and dealt with in the capital reserve. The cost of repurchasing the Company's own shares for cancellation including the related stamp duty and transaction costs is charged to the distributable element of the capital reserve. The costs relating to the issue of new Ordinary shares are charged to the share premium account.

d) Dividends

In accordance with FRS 102 the final dividend is included in the financial statements in the year that it is approved by shareholders.

e) Income

Dividends receivable on listed equity shares are recognised on the ex-dividend date as a revenue return, and the return on zero dividend preference shares is recognised as a capital return.

Dividends receivable on equity shares where no ex-dividend date is quoted are recognised when the Company's right to receive payment is established.

Special dividends receivable are taken to capital where relevant circumstances indicate that the dividends are capital in nature.

Income from fixed-interest securities is recognised as revenue on a time apportionment basis so as to reflect their effective yield.

Income from securities where the return is linked to an inflation index is accrued as earned and is included in the income column of the Income Statement. In accordance with the Company's commercial objective and as permitted by the AIC SORP, the movement in capital value is recognised in the capital column of the Income Statement. The amount recognised as a capital return on index-linked securities in the year is disclosed in Note 8 - Investments held at fair value through profit or loss.

f) Expenses

All expenses are charged to revenue and include, where applicable, value added tax ('VAT'). All expenses are accounted for on an accruals basis.

g) Taxation policy

Current tax payable is based on the taxable profit for the year. Deferred taxation is provided using the liability method on all timing differences, calculated at the rate at which it is anticipated the timing differences will reverse. Owing to the Company's status as an investment trust, and the intention to continue to meet the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation of investments.

h) Other debtors and creditors

Other debtors and creditors do not carry any interest, are short-term in nature and initially recognised at fair value and then held at amortised cost, with debtors reduced by appropriate allowances for estimated irrecoverable amounts.

Cash at bank and in hand may comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

i) Foreign currency

The results and financial position of the Company are expressed in pounds sterling, which is the functional and presentational currency of the Company. The directors, having regard to the currency of the Company's share capital and the predominant currency in which the Company operates, have determined the functional currency to be sterling.

Transactions denominated in foreign currencies are recorded in the functional currency at actual exchange rates as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end are reported at the rates of exchange prevailing at the year end.

j) Reserves

The following are accounted for in the capital reserve:

• gains and losses on the realisation of investments;
• increases and decreases in the valuation of investments held at the year-end;
• realised foreign currency differences of a capital nature; and
• unrealised foreign currency differences of a capital nature.

Other reserves:

• The share premium account includes the premium above nominal value from proceeds on issue of any equity share capital comprising Ordinary shares of 25p each and is not distributable.
• The revenue reserve reflects all the income and costs which are recognised in the revenue column of the income statement and is distributable.
• The special reserve results from the shareholder and court approved cancellation of the share premium account, is distributable and will be applied for share buy backs.
• The capital redemption reserve arises from the buy back and cancellation of shares and is not distributable.

k) Repurchases of shares into treasury and subsequent re-issue

The proceeds from issuing Ordinary shares less issue costs are taken to equity and 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, with the cost of repurchase being charged to a distributable reserve. Share issues and repurchase 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, in accordance with section 733 of the Companies Act 2006.

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.

The sales proceeds of treasury shares re-issued 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'.

l) Derivative financial instruments

Derivative instruments are prohibited for the purpose of investment under the Company's Investment Policy, but with the Board's prior approval, can be used to hedge certain market risk exposures such as foreign currency risk.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the Income Statement and entirely recognised as capital.

2 Investment income

	2025	2024
	£'000	£'000
Income from Investments:
Income from overseas equity and non-equity investments	6,531	318
Income from UK equity and non-equity investments	6,200	9,435
Interest from conventional UK bonds	5,423	8,813
Interest from index-linked overseas bonds	4,759	2,160
Interest from index-linked UK bonds	2,688	1,159
Interest from conventional overseas bonds	1,093	3,260
Total income from investments	26,694	25,145

	2025	2024
	£'000	£'000
Total income comprises:
Interest from bonds	13,963	15,392
Dividends	11,266	7,460
Property income and interest distributions	1,465	2,293
Deposit interest	339	400
	27,033	25,545

	2025	2024
	£'000	£'000
Income from investments comprises:
UK	14,311	19,407
Overseas	12,383	5,738
	26,694	25,145

3 Investment management fee

	2025	2024
	£'000	£'000
Investment management fee	3,950	4,298

The Company's Investment Manager CG Asset Management Limited received an annual management fee equal to 0.60% of the net assets of the Company up to £120m, 0.45% on net assets above £120m to £500m and 0.30% thereafter (2024: the same basis). At 31 March 2025 £307,000 (31 March 2024: £1,028,000) was payable. The terms of the investment management agreement are detailed in the 2025 Annual Report.

4 Other expenses

	2025	2024
	£'000	£'000
Company secretarial and administration services(1)	571	259
Directors' remuneration (refer to Directors' Remuneration Report)	197	169
Depositary fees	96	115
Stock Exchange and FCA fees	110	106
Custody services	65	56
Registrar fees	48	50
Fees payable to the Company's auditor for the audit of Company financial statements(2)	82	48
General expenses	344	267
	1,513	1,070

(1) Frostrow Capital LLP was appointed as the Company Secretary and Administrator effective from 1 July 2024. The expenses balance for the year to 31 March 2024 in part reflects the waiver of certain elements of the previous Company Secretary and Administrator's fees in recognition of the service disruption experienced during 2024.

(2) Audit fees for the year include additional charges of £27,000 relating to additional costs incurred in respect of the prior year audit. These costs were invoiced and recognized in the current year, resulting in an increase in the total audit fees compared to the prior year. The current year charge also includes a £5,000 one-off charge for additional audit procedures performed in relation to the change in the Company's Administrator to Frostrow Capital LLP.

The above expenses exclude VAT where appropriate. Irrecoverable VAT is included within general expenses.

5 Taxation

	2025			2024
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Current tax:
Overseas withholding tax	43	-	43	41	-	41
Corporation tax	-	-	-	3,179	-	3,179
Current tax charge	43	-	43	3,220	-	3,220

The tax assessed for the year is lower (2024: lower) than the standard rate of corporation tax in the UK of 25% (2024: 25%). The differences are explained below:

	2025			2024
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Net return before tax	21,570	14,464	36,034	20,177	(3,222)	16,955
Return at the standard rate of UK corporation tax	5,393	3,616	9,009	5,044	(806)	4,238
Adjusted for the effects of:
Non-taxable UK franked dividends	(2,537)	-	(2,537)	(1,865)	-	(1,865)
Non-taxable capital returns(1)	-	(3,616)	(3,352)	-	806	806
Tax impact on dividends designated as interest distribution	(2,856)	-	(2,856)	-	-	-
Irrecoverable overseas withholding tax	43	-	43	41	-	41
Current tax charge	43	-	43	3,220	-	3,220

(1) The Company is an Investment Trust as defined by section 1158 of the Corporation Tax Act 2010 and capital gains are not subject to UK corporation tax.

The Company has no unrelieved management expenses, a UK corporation tax charge of £nil is payable in respect of the year ended 31 March 2025 (year to 31 March 2024: £3,179,000).

6 Dividends

	2025	2024
	£'000	£'000
Ordinary shares
2023 dividend paid 10 July 2023 (60p per share)	-	15,577
2023 special dividend paid 23 February 2024 (11p per share)	-	2,578
2024 dividend paid 5 July 2024 (78p per share)	16,598	-
	16,598	18,155

The 2024 dividends were paid on 4 July 2024 to shareholders on the register on 7 June 2024 when there were 21,257,727 Ordinary shares in issue.

The 2023 dividends were paid on 10 July 2023 to shareholders on the register on 2 June 2023 when there were 25,916,313 Ordinary shares in issue and on 23 February 2024 to shareholders on the register on 2 February 2024 when there were 23,419,137 Ordinary shares in issue. Although the special dividend was paid in respect of the Company's financial year ended 31 March 2023, for shareholders' own tax purposes the dividend was received during the tax year ended 5 April 2024.

The Directors have recommended to shareholders a final dividend of 102p per share, comprising 66p in interest distribution and 36p in ordinary equity dividends for the year ended 31 March 2025. If approved, this dividend will be paid to shareholders on 8 July 2025. This dividend is subject to approval by shareholders at the AGM and, therefore, in accordance with FRS 102, it has not been included as a liability in these financial statements. The total estimated dividend to be paid, based on the number of shares in issue at 31 March 2025, is £18,330,000. However the actual amount of the dividend to be paid will be based on the number of shares in issue on 6 June 2025, the dividend record date.

	2025	2024
	£'000	£'000
Revenue available for distribution by way of dividend for the year	21,527	16,957
Proposed final dividend of 102p for the year ended 31 March 2025 (2024: 78p)	(18,330)	(18,155)
Surplus/(deficit) available to carry forward	3,197	(1,198)

7 Net return per Ordinary share

The net return per Ordinary share of 179.85p (2024: 56.49p) is based on the total net gains for the financial year of £35,991,000 (2024: net gains of £13,735,000) and on 20,011,591 (2024: 24,313,730) Ordinary shares, being the weighted average number of Ordinary shares in issue in each period.

Revenue return per Ordinary share of 107.54p (2024: 69.74p) is based on the net revenue income for the financial year of £21,527,000 (2024: £16,957,000) and on 20,011,591 (2024: 24,313,370) Ordinary shares, being the weighted average number of Ordinary shares in issue in each period.

Capital return per Ordinary share of 72.26p (2024: capital loss of 13.25p) is based on the net capital gains for the financial year of £14,464,000 (2024: net capital loss of £3,222,000) and on 20,011,591 (2024: 24,313,730 ) Ordinary shares, being the weighted average number of Ordinary shares in issue in each period.

The Company does not have dilutive securities. Therefore the basic and diluted returns per share are the same.

8 Investments held at fair value through profit or loss

	2025	2024
	£'000	£'000
Listed investment companies:
Ordinary shares UK	175,044	190,070
Ordinary shares overseas	35,647	13,633
Zero dividend preference shares UK	5,411	18,462
UK government bonds	91,684	348,068
UK non-government bonds	88,832	80,299
Overseas government bonds	418,034	269,836
Overseas non-government bonds	5,973	25,654
Exchange traded funds	39,782	107,770
	860,407	1,053,792
Opening cost of investments	1,063,115	1,259,886
Unrealised (depreciation)/appreciation	(9,323)	(8,085)
Opening fair value of investments	1,053,792	1,251,801
Additions at cost	1,092,046	802,856
Effective yield adjustment(1)	8,689	6,150
Sales proceeds	(1,307,179)	(1,003,902)
Gains/(losses) on investments	13,059	(3,113)
Closing fair value of investments	860,407	1,053,792
Closing book cost of investments	879,297	1,063,115
Unrealised losses	(18,890)	(9,323)
	860,407	1,053,792
Realised gains/(losses) on disposals	22,626	(1,875)
Increase in cumulative unrealised losses	(9,567)	(1,238)
Net gains/(losses) on investments	13,059	(3,113)

The Company received proceeds of £1,307,179,000 (2024: £1,003,902,000) from investments sold in the year.

The book cost of these investments was £1,284,553,000 (2024: £1,005,777,000).

The total amount recognised as a capital return on index-linked securities in the year was £5,575,000 (2024: £4,686,000).

(1) The effective yield adjustment is in relation to conventional fixed interest and index-linked securities. The accounting treatment for income on securities held is set out in note 1(e) above.

The geographical spread of investments is shown in the 2025 Annual Report.

The total transaction costs on additions were £393,000 (2024: £390,000) and on sales were £98,000 (2024: £59,000). These costs are included in the book cost of acquisitions and the net proceeds of sales.

9 Debtors

	2025	2024
	£'000	£'000
Due from brokers	1,818	2,141
Receivable from currency swap contracts	2,931	-
Accrued interest	1,803	1,855
Dividends receivable	1,002	397
Prepayments and other debtors	91	89
Corporation tax refund	734	18
	8,379	4,500

10 Creditors: amounts falling due within one year

	2025	2024
	£'000	£'000
Due to brokers	24,382	4,595
Repurchase of Ordinary shares into treasury	1,770	3,768
Accruals	451	1,231
Corporation tax	-	141
Other creditors	17	27
	26,620	9,762

11 Called-up share capital

	2025		2024
	Number of		Number of
	shares	£'000	shares	£'000
Ordinary share of 25p
Ordinary shares in issue at beginning of year	22,038,727	5,510	26,258,763	6,565
Ordinary shares bought back into Treasury during year	(4,067,965)	(1,017)	(4,220,036)	(1,055)
Ordinary shares in issue at end of year	17,970,762	4,493	22,038,727	5,510
Treasury shares (Ordinary shares of 25p)
Treasury shares in issue at beginning of year	4,541,536	1,135	321,500	80
Ordinary shares bought back into Treasury during year	4,067,965	1,017	4,220,036	1,055
Treasury shares in issue at end of year	8,609,501	2,152	4,541,536	1,135
Total Ordinary shares in issue and in treasury at end of year	26,580,263	6,645	26,580,263	6,645

During the years to 31 March 2025 and 31 March 2024, the Company issued no new Ordinary shares and no Ordinary shares were sold from Treasury.

During the year to 31 March 2025, 4,067,965 (2024: 4,220,036) Ordinary shares were repurchased by the Company for a total cost of £194,541,000 (2024: £195,126,000). All shares were bought back at a discount to NAV. No shares were purchased for cancellation during the year (2024: nil) and at the year-end 8,609,501 shares were held in treasury (2024: 4,541,536).

12 Share premium account and special reserve

On 22 January 2024 the High Court of Justice in Northern Ireland (the 'Court') approved the cancellation of the Company's share premium account and the crediting of an equivalent amount to the Company's distributable reserves. The Order of the Court approving the cancellation became effective on 7 February 2024 when it was registered with the Registrar of Companies in Northern Ireland and this special distributable reserve was therefore established from that date.

The cost of share buybacks undertaken by the Company have been recognised through this reserve since 7 February 2024.

13 Net asset value per Ordinary share

The net asset value per Ordinary share and the net asset value attributable to the Ordinary shares at the year end, calculated in accordance with the Articles, were as follows:

Net asset value per Ordinary share attributable to

	2025	2024
Ordinary shares	4,924.8p	4,810.5p

Net assets attributable to

	2025	2024
	£'000	£'000
Ordinary shares	885,025	1,060,173

Net asset value per Ordinary share is based on the net assets, as shown above, and on 22,038,727 (2024: 26,258,763) Ordinary shares, being the number of Ordinary shares in issue at the year end, but excluding shares held in Treasury.

14 Reconciliation of net return on ordinary activities before tax to net cash inflow from operating activities

	2025	2024
	£'000	£'000
Net return on ordinary activities before tax	36,034	16,955
Capital (gains)/losses before tax	(14,464)	3,222
Gains/(losses) on foreign currency transactions	51	(109)
Increase in prepayments	(2)	(16)
(Decrease)/increase in accruals	(737)	18
Decrease in recoverable tax	-	4
Increase in dividends receivable	(605)	(165)
Decrease/(increase) in accrued interest and effective interest income adjustments	(8,637)	(5,213)
Overseas withholding tax paid	(43)	(41)
UK Corporation tax paid	(857)	(4,043)
Net cash inflow from operating activities	10,740	10,612

During the year, the Company received dividend income of £9,045,000 (2024: £9,588,000) and interest income of £7,006,000 (2024: £10,579,000) in cash.

15 Financial instruments

The Company has the following financial instruments:

	2025	2024
	£'000	£'000
Financial assets at fair value through profit or loss
- Investments held at fair value through profit and loss	860,407	1,053,792
- Currency swap contracts	2,931	-
Financial assets that are measured at amortised cost
- Cash at bank	42,859	11,643
- Due from brokers	1,886	2,146
- Accrued interest and dividends receivable	2,805	2,252
	910,888	1,069,833

	2025	2024
	£'000	£'000
Financial liabilities measured at amortised cost
- Due to brokers	24,399	8,363
- Accruals	2,221	1,231
	26,620	9,594

The Company's financial instruments comprise:

• investment company ordinary shares, zero dividend preference shares, exchange traded funds and fixed and index-linked securities that are held in accordance with the Company's investment objective;
• cash and liquid resources that arise directly from the Company's operations; and
• debtors and creditors.

The main risks arising from the Company's financial instruments are market risk, interest rate risk, foreign currency risk and credit risk. The Board regularly reviews and monitors the management of each of these risks and they are summarised below.

Other debtors and creditors do not carry any interest and are short-term in nature and accordingly are stated at their nominal value.

Market risk

Market risk arises mainly from uncertainty about the future prices of financial instruments held. It represents the potential loss the Company might suffer through holding market positions in the face of price movements.

The Company invests in the shares of other investment companies. These companies may use borrowings or other means to gear their balance sheets which may result in returns that are more volatile than the markets in which they invest, and the market value of investment company shares may not reflect their underlying assets.

To mitigate these risks, the Investment Manager's investment strategy is to select investments for their fundamental value. Stock selection is therefore based on disciplined financial, market and sector analysis, with the emphasis on long-term investments. An appropriate spread of investments is held in the portfolio in order to reduce both the systemic risk and the risk arising from factors specific to a country or sector. The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly to consider investment strategy. A list of the largest investments held by the Company is shown in the 2025 Annual Report. All investments are stated at bid value, which in the Directors' opinion is equal to fair value.

Price risk sensitivity

The following table illustrates the sensitivity of the net return after taxation for the year and the net assets to an increase or decrease of 10% (2024: 10%) in market prices. This level of change is considered to be reasonably possible based on an observation of current market conditions. The sensitivity analysis is based on the Company's investments at the Statement of Financial Position date with all other variables held constant.

	2025		2024
	10% increase	10% decrease	10% increase	10% decrease
	in market	in market	in market	in market
	prices	prices	prices	prices
	£'000	£'000	£'000	£'000
Income Statement - net return after tax
Revenue return	(296)	296	(322)	322
Capital return	86,041	(86,041)	105,379	(105,379)
Total return after taxation	85,745	(85,745)	105,057	(105,057)
Change to net assets attributable to shareholders	85,745	(85,745)	105,057	(105,057)

Interest rate risk

Bond and preference share yields, and as a consequence their prices, are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee company.

Returns from bonds and preference shares are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. This means that if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a price different from its purchase level and a profit or loss may be incurred.

Interest rate changes affect the income the Company generates from its financial assets with floating rates, and the fair value of the interest bearing assets in the Company's portfolio. The following table illustrates the sensitivity of the net returns and the net assets to an increase or decrease of 1% (2024: 1%) in regard to the Company's monetary financial assets and financial liabilities. The financial assets affected by interest rates comprise cash at bank , conventional and index-linked bonds as well as corporate debt instruments. There are no financial liabilities affected by interest rates. This level of change is considered to be reasonably possible based on an observation of current market conditions. The sensitivity analysis is based on the Company's monetary financial instruments at the Statement of Financial Position date with all other variables held constant.

	2025		2024
	1% increase	1% decrease	1% increase	1% decrease
	in interest	in interest	in interest	in interest
	rates	rates	rates	rates
	£'000	£'000	£'000	£'000
Income Statement - net revenue return	429	(429)	87	(87)
Income Statement - net capital return	(54,955)	54,240	(31,231)	35,421
Change to net assets attributable to shareholders	(54,526)	53,811	(31,144)	35,334

The interest rate profile of the Company's assets at 31 March 2025 was as follows:

	Total (as perStatementof FinancialPosition)£'000	Floatingrate£'000	Index-linked£'000	Otherfixedrate£'000	Assets/(liabilities)on whichno interestis paid£'000	Weightedaverageinterestrate%	Weightedaverageperiodfor whichrate isfixed(years)
Assets
Investment trusts and other funds	255,883	-	-	-	255,883	-	-
UK index-linked
government bonds	75,829	-	75,829	-	-	0.40	10.24
UK index-linked
non-government bonds	23,095	-	23,095	-	-	1.03	4.58
UK government bonds	15,855	-	-	-	15,855	-	-
UK non-government bonds	65,737	-	-	65,737	-	4.26	5.15
Overseas index-linked government bonds	258,992	-	258,992	-	-	0.51	7.13
Overseas index-linked
non-government bonds	456	-	456	-	-	3.05	0.39
Overseas government bonds	159,043	-	-	159,043	-	0.54	0.77
Overseas non-government bonds	5,517	-	-	5,517	-	6.22	4.34
Invested funds	860,407	-	358,372	230,297	271,738	-	-
Cash at bank	42,859	42,859	-	-	-	-	-
Other debtors	8,379	-	-	-	8,379	-	-
Liabilities
Creditors	(26,620)	-	-	-	(26,620)	-	-
Total net assets	885,025	-	358,372	230,297	253,497

The interest rate profile of the Company's assets at 31 March 2024 was as follows:

	Total (as perStatementof FinancialPosition)£'000	Floatingrate £'000	Index-linked£'000	Other fixedrate £'000	Assets/(liabilities)on whichno interestis paid£'000	Weightedaverageinterestrate %	Weightedaverageperiodfor whichrate isfixed(years)
Assets
Investment trusts and other funds	329,935	-	-	-	329,935	-	-
UK index-linked government bonds	238,005	-	238,005	-	-	0.13	6.57
UK index-linked non-government bonds	19,531	-	19,531	-	-	2.20	5.25
UK government bonds	110,063	-	-	-	110,063	-	-
UK non-government bonds	60,768	-	-	60,768	-	5.29	10.49
Overseas index-linked government bonds	229,446	-	229,446	-	-	0.76	9.49
Overseas index-linked non-government bonds	3,863	-	3,863	-	-	3.31	6.63
Overseas government bonds	40,390	-	-	2,617	37,773	-	0.07
Overseas non-government bonds	21,791	-	-	21,791	-	7.51	4.84
Invested funds	1,053,792	-	490,845	85,176	477,771
Cash at bank	11,643	11,643	-	-	-	-	-
Other debtors	4,500	-	-	-	4,500	-	-
Liabilities
Creditors	(9,762)	-	-	-	(9,762)	-	-
Total net assets	1,060,173	11,643	490,845	85,176	472,509

Fair value of financial assets and liabilities

Financial Reporting Standard 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1: valued using unadjusted quoted prices in active markets for identical assets.

Level 2: valued using observable inputs other than quoted prices included within Level 1.

Level 3: valued using inputs that are unobservable and are valued by the Directors using International Private Equity and Venture Capital Valuation ('IPEV') guidelines, such as earnings multiples, recent transactions and net assets, which equate to their fair values.

The Company's assets are measured at fair value through profit or loss. The fair value of financial instruments traded in active markets is based on quoted market prices at the Statement of Financial Position date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.

The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at 31 March 2025 and 2024 as follows:

	2025				2024 (restated)
Financial assets at fair value through	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
profit or loss	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Quoted securities	844,854	14,990	-	859,844	1,027,027	24,344	-	1,051,371
Currency swap contracts	-	2,931	-	2,931	-	-	-	-
Delisted equities	-	-	563	563	-	-	2,421	2,421
Net fair value	844,854	17,921	563	863,338	1,027,027	24,344	2,421	1,053,792

Quoted securities included in fair value Level 1 are actively traded on recognised stock exchanges and the fair value of these investments has been determined by reference to their quoted bid prices at the reporting date.

Quoted securities included in fair value Level 2 relate to some corporate bond holdings in the Company's portfolio, which are also traded on recognised stock exchanges but the fair value of these investments has been determined by reference to prices indicated by a group contributing brokers at the reporting date.

The Company determined that its corporate bond holdings with a total fair value of £24,344,000 as at 31 March 2024 should be disclosed as Level 2 financial assets too, consistent with the above. Therefore the comparative disclosure has been restated to that effect. This is a disclosure restatement only and does not affect the fair value of the financial assets already reported.

Delisted investments

The fair value of the Company's investments in unquoted stocks have been determined by reference to primary valuation techniques described in note 1(b). The fair value of unquoted investments is influenced by the estimates, assumptions and judgements made in the valuation process, including probability of future cash flows, discounts to net asset values, and recent transaction price.

During the year to 31 March 2025, four assets (Catco Reinsurance Opportunities Funds C shares, Catco Reinsurance Opportunities Funds, NB Global Monthly Income, NB Private Equity Partners ZDP 2024, Premier Miton UK Microcap) were moved from Level 1 to Level 3 as they delisted. During the year to 31 March 2024, three assets (Secured Income Fund, Ediston Property Investment Company, and Troy Income & Growth Trust) were moved from Level 1 to Level 3 as they delisted.

A reconciliation of fair value measurements in Level 3 is set out in the following table:

	2025	2024
	Total	Total
	£'000	£'000
Opening balance	2,421	624
Purchases	-	-
Sales	(8,569)	(3,971)
Transfers	7,451	5,697
Total gains/(losses) on investments in the Income Statement:
on assets sold	38	1
on assets held at the end of the year	(778)	70
Closing balance	563	2,421

Foreign currency risk

The Company's investments in foreign currency securities are subject to the risk of currency fluctuations. The Investment Manager monitors current and forward exchange rate movements in order to mitigate this risk. The Company's investments denominated in foreign currencies are:

		2025			2024
	Cash and	Currency	Accrued	Cash and	Currency	Accrued
	Investments	Swap	interest	Investments	Swap	interest
	£'000	Contracts(1)	£'000	£'000	Contracts(1)	£'000
Canadian Dollar	5	-	-	5,036	-	38
Euro	9,506	-	-	23,390	-	6
US Dollar	276,824	(93,824)	378	233,582	-	482
Swedish Krona	11,993	-	39	43,352	-	94
Norwegian Krone	-	-	-	4,679	-	13
Australian Dollar	3,679	-	13	3,639	-	13
Japanese Yen	185,830	(137,165)	89	54,745	-	1
	487,837	(230,989)	519	368,423	-	647

(1) Based on notional amounts of the currency swap contracts. The contracts were entered into for the purpose of fully hedge the FX exposures on certain US and Japanese government bond investments. Notional exposure on local currency basis are Japanese Yen 25,750,000,000 and US Dollar 104,517,000. As at 31 March 2025, the contracts in receivable position amount to £4,455,000 and contracts in payable position amount to £1,524,000. Overall the Company is in a net receivable position of £2,931,000.

Foreign currency sensitivity

The following table illustrates the sensitivity of the net return after taxation for the year and the net assets to an increase or decrease of 10% in the rates of exchange of foreign currencies relative to Sterling. This level of change is considered to be reasonably possible based on an observation of current market conditions. The sensitivity analysis is based on the Company's foreign currency investments at the Statement of Financial Position date with all other variables held constant.

	2025		2024
	10%	10%	10%	10%
	appreciation	depreciation	appreciation	depreciation
	of Sterling	of Sterling	of Sterling	of Sterling
	£'000	£'000	£'000	£'000
Income statement - net return after taxation
Revenue return	(929)	929	(430)	430
Capital return	(48,367)	48,367	(36,842)	36,842
Total return after taxation	(49,296)	49,296	(37,272)	37,272
Net assets attributable to shareholders	(49,296)	49,296	(37,272)	37,272

Liquidity risk

Liquidity risk is not considered to be significant as the Company has no bank loans or other borrowings and the majority of the Company's assets are investments in quoted securities which are readily realisable. All liabilities are payable within three months.

Credit risk

In addition to interest rate risk, the Company's investment in bonds, the majority of which are government bonds, is also exposed to credit risk which reflects the ability of a borrower to meet its obligations. Generally, the higher the quality of the issue, the lower the interest rate at which the issuer can borrow money. Issuers of a lower quality will tend to have to pay more to borrow money to compensate the lender for the extra risk taken. As at 31 March 2025, 68% (2024: 69%) of the portfolio was held in fixed income instruments. Of these, 56% (2024: 59%) was in government bonds issued by governments which are rated AA or better. The Investment Manager judges these to have very low credit risk given that each of the issuers are monetarily sovereign, that is to say they borrow in their own currency. Of the 11% (2024: 10%) of the portfolio that was held in corporate debt, the majority is investment grade and relatively short duration. Cash balances of 5% (2024: 1%) were held with Northern Trust which has a short-term credit rating of A-1 with Standard & Poor's. Investment transactions are carried out with a number of brokers whose standing is reviewed periodically by the Investment Manager. The Investment Manager assesses the risk associated with these investments by prior financial analysis of the issuing companies as part of his normal scrutiny of existing and prospective investments and reports regularly to the Board. Cash is held with a reputable bank with a high-quality external credit rating.

A further credit risk is the failure of a counterparty to a transaction to discharge its obligations under that transaction, which could result in a loss to the Company. The following table shows the maximum credit risk exposure.

Credit risk exposure

Compared to the Statement of Financial Position, the maximum credit risk exposure is:

	2025		2024
	Statement		Statement
	of Financial	Maximum	of Financial	Maximum
	Position	exposure	Position	exposure
	£'000	£'000	£'000	£'000
Fixed assets - investments at fair value through profit and loss	860,407	604,522	1,053,792	723,856
Debtors - amounts due from brokers, dividends and interest receivable	4,623	4,623	4,393	4,393
Cash at bank	42,859	42,859	11,643	11,643
	907,889	652,004	1,069,828	739,892

Capital management policies and procedures

The Company's capital management objectives are to ensure that it will be able to continue as a going concern and to maximise the total return to its equity shareholders. The Company's capital comprises its equity share capital and reserves. The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis. Further details can be found in the Strategic Report.

16 Related party transactions

With the exception of the management fee (as disclosed in note 3 above), and the Directors' fees and shareholdings (as disclosed in the Directors Remuneration Report in the 2025 Annual Report), there have been no related party transactions in the year ended 31 March 2025.

17 Company information

Capital Gearing Trust P.l.c. is a closed-ended investment company, registered in Northern Ireland No NI005574, with its Ordinary shares listed on the London Stock Exchange. The address of the registered office is Murray House, Murray Street, Belfast BT1 6DN.

18 Status of results information

2024 Financial Information

The figures and financial information for 2024 are extracted from the Annual Report and Accounts for the year ended 31 March 2024 ('2024 Annual Report') and do not constitute the statutory accounts for the year. The 2024 Annual Report has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2025 Financial Information

The figures and financial information for 2025 are extracted from the published Annual Report and Accounts for the year ended 31 March 2025 ('2025 Annual Report') and do not constitute the statutory accounts for that year. The 2025 Annual Report includes 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 2025 Annual Report will be delivered to the Registrar of Companies in due course.

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

The 2025 Annual Report will also shortly be available on the Company's website at www.capitalgearingtrust.com where up to date information on the Company, including daily NAV and share prices, fact sheets, quarterly reports, webinars and portfolio information can also be found.

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

-ENDS-

Frostrow Capital LLP

Company Secretary

28 May 2025

For further information contact:

CG Asset Management Limited

Investment Manager

Tel: [phone]

Frostrow Capital LLP

Company Secretary

[e-mail]

[e-mail]: 07376 982071

SEC Newgate UK

Financial Communications

[e-mail]

Tel: [phone]

---

---