Strategic Equity Capital Plc - Final Results

Strategic Equity Capital Plc - Final Results

PR Newswire

LONDON, United Kingdom, October 16

Strategic Equity Capital plc ('SEC')

Annual Report and Financial Statements for the year ended 30 June 2025

Chairman's Statement

The Company's Net Asset Value ("NAV") per share (on a total return basis) decreased by 0.1% in the year to 30 June 2025, while the share price delivered a total return of +0.4%. This was behind the FTSE Small Cap (ex Investment Trusts) Total Return Index ("FTSE Small Cap Index"), which rose by 13.1%, and this relative underperformance reflects the Company's significant exposure to AIM shares in the period.

Although near-term performance was disappointing, the longer-term record remains strong, with NAV total returns of 27.3% and 69.5% over three and five years respectively, ahead of the Investment Trust Smaller Companies sector average of 22.0% and 66.1%.

The first half of the financial year was particularly challenging, with market sentiment adversely affected by the UK's Autumn Budget, which introduced changes to national insurance, minimum wage levels, and, most notably for our portfolio, a reduction in inheritance tax relief for AIM-quoted stocks. This, combined with broader geopolitical uncertainty, contributed to a general de-rating across UK smaller companies, in particular those listed on the AIM market. However, the second half of the year saw a significant recovery, in part reflecting market strength as inflation fell towards target levels and interest rate expectations moderated. It is perhaps notable that of the portfolio's six largest detractors in the first half of the year, four of these investments were then the portfolio's greatest contributors across the second half.

Whilst single periods of performance may demonstrate volatility, the merits of the Investment Manager's investment approach are more apparent when viewed over a longer time horizon. Since September 2020 (when Ken Wotton was appointed as Lead Manager), the Company's share price (on a total return basis) has risen 94.2%, compared to 91.6% for the FTSE Small Cap Index, demonstrating the long-term merit of our distinctive investment approach.

An overview of the reporting period, performance, and portfolio is discussed in detail in the Investment Manager's Report on pages 7 to 17.

Realisation Opportunity

As you may be aware, on 15 September 2025, the Board announced a realisation opportunity whereby shareholders were given the opportunity to tender up to 100% of their shares held, the tender to be effected via a realisation pool mechanism. The Tender Offer was approved by shareholders at a General Meeting held on 8 October 2025 and the opportunity to tender concluded on 13 October 2025. 9,510,496 shares were tendered, being 22.0% of the shares in issue.

The Board is pleased that a significant majority of shareholders agree with the Directors and Investment Manager about the continuing long-term opportunities presented by Strategic Equity Capital plc.

Dividend

For the year ended 30 June 2025, the basic revenue return per share was 5.03p, an increase of 21.2% on last year. The portfolio's focus on cash-generative businesses has in the past supported a growing dividend and this year is no exception, with the Board proposing a final dividend of 4.25p, an increase of 21.4% over last year. It is, however, important to note that, the Company's primary objective remains capital growth and dividend payouts will vary over time. The dividend will be paid to shareholders on 26 November 2025 to shareholders on the register as at 24 October 2025.

Discount Management

The average discount to NAV of the Company's shares during the period was 8.4%, compared to the equivalent 7.6% figure from the prior year. The discount range over the twelve months was 4.1% to 12.1%.

By way of longer term context, the average discount to NAV has narrowed significantly from 15.3% (between the appointment of Ken Wotton as Lead Manager in September 2020 and the announcement of discount mitigation measures in February 2022) to 8.2% (from February 2022 to June 2025), reflecting the impact of the comprehensive discount mitigation measures implemented.

The Board is implementing continued discount control mechanisms and a planned further realisation opportunity for the future. The Board intends to continue with the Company's share buyback programme to manage the discount to Net Asset Value at which the Ordinary Shares may trade. From October 2025, it intends to alter its approach by making available 50% of the net gains from realised profitable transactions in each financial year to fund buybacks of Ordinary Shares, at a discount of 5% or more to NAV per Share. In addition, the Company intends to offer a further 100% realisation opportunity for Shareholders in 2030, the timing of which aligns with the Investment Manager's investment strategy.

Gearing

The Company has maintained its policy of operating without a banking loan facility over the last twelve months. Currently there are no plans to utilise gearing in the portfolio although this policy is kept under regular review by the Board in conjunction with the Investment Manager.

Marketing

Building Awareness and Expanding the Shareholder Base

The Board and Investment Manager have continued to build momentum behind the Company's marketing and communication efforts, with a clear focus on raising awareness of its distinctive investment approach across both retail and wholesale audiences. These efforts are central to expanding and diversifying the shareholder register.

Over the period, we have amplified our differentiation through a range of targeted activities. This has included:

• A retail-focused advertising campaign (running from late 2024 into the third quarter of 2025);
• An extensive PR and media outreach programme; and
• Ongoing content creation and thought leadership.

The Company's unique "private equity approach to public markets" has been consistently showcased in national and financial media, supported by strong examples of active engagement and value creation. These efforts have positioned the Investment Manager as a credible and respected voice in UK small-cap investing.

Shareholders and prospective investors have also been kept informed through:

• Regular investment commentaries and portfolio updates;
• Webinars and digital communications; and
• Participation in key retail investor events.

We have placed particular emphasis on communicating the structural advantages of the Company's closed-ended format - enabling a genuinely long-term, high-conviction strategy that is well-suited to the UK small-cap opportunity.

This integrated marketing activity has begun to yield measurable results, notably through increased ownership on major retail investment platforms. The Investment Manager's direct engagement with retail investors has reinforced the case for both the UK equity market and the small-cap segment in particular.

The Board remains committed to supporting marketing and distribution as strategic levers for growth. We will continue to monitor activity closely, ensuring it remains effective, targeted, and aligned with the Company's long-term objectives.

Board Composition

The timing of the 2025 Realisation Opportunity was taken into consideration as part of the Board's succession planning. Richard Locke, Non Executive Deputy Chairman, was asked to remain on the Board throughout the process, given his corporate finance experience, but will retire as a director of the Company during the 2026 financial year, having been appointed as a Non-Executive Director in February 2015. I will retire as a director of the Company at the conclusion of the 2026 AGM, having been appointed as a Non Executive Director in February 2016, and subsequently as Non-Executive Chairman in November 2022. The timing of my retirement ensures that I maintain oversight, as Chairman, of the entire realisation process resulting from the September 2025 Tender Offer. The Directors intend to commence a recruitment process shortly, ahead of these retirements, to ensure the ongoing composition of the Board remains appropriate.

Outlook

Looking ahead, the global macroeconomic and geopolitical environment is likely to remain a source of volatility. The UK's stretched fiscal position and uncertain growth and tax outlook are also likely to weigh on near-term sentiment. Despite this uncertain backdrop we see some tentative signals to support improving market confidence, in particular evidence of increasing global equity flows into UK equities (in contrast to the direction of travel of domestic flows); an uptick in smaller company equity issuance to fund M&A activity and other growth initiatives; and an ongoing active level of takeover activity in the UK smaller companies sector.

Across our portfolio, the Investment Manager has been encouraged by the positive news flow from our investee companies, the majority of which are demonstrating solid operational performance. A key theme for your Board is the significant valuation opportunity that persists in UK smaller companies. Our portfolio companies trade at a substantial discount to their larger peers, international equivalents, and, most tellingly, to the multiples being paid in private M&A transactions. This disconnect between public market valuations and intrinsic value remains a core driver of our strategy and our confidence in future returns.

This valuation gap is being actively recognised by corporate and private equity buyers, and we expect the recent acceleration in M&A activity to be a defining feature of the market in the year ahead. The Investment Manager's "private equity" approach is specifically designed to identify such businesses, and we are well-positioned to see further value crystallised for shareholders through this trend.

Substantial Valuation Opportunity

SEC currently offers investors an attractive discount on many levels:

• UK equities stand at a substantial discount to global markets, currently at levels previously seen in the 1990s;
• Within the UK market, smaller capitalisation stocks trade at a notable discount to large caps;
• The SEC portfolio of companies are both lower valued and have higher return on equity than average for UK small cap indices; and
• Investors are today able to purchase SEC shares at a discount to NAV.

In addition, the valuation disconnect between UK equities and private transaction multiples remains a core theme. In conclusion, the Board remains confident in the Company's prospects. The combination of a portfolio of high-quality, undervalued companies, a proven and disciplined investment process, and a market environment ripe for corporate activity provides a compelling backdrop. We firmly believe that the Investment Manager's active, fundamentals-based approach is the right strategy to navigate the year ahead and to continue delivering value for our shareholders. The Board, once again, thanks you for your continued support.

William Barlow

Chairman

15 October 2025

Investment Manager's Report for the year ended 30 June 2025

1)Overview - FY 2024/25

The financial year commenced against a backdrop of seemingly benign inflation, with UK CPI standing at the Bank of England's 2.0% target in June 2024. However, this stable macroeconomic picture was quickly overshadowed by domestic policy shifts and external pressures, creating a period of stark contrasts for UK smaller companies.

The first half of the financial year was dominated by the negative sentiment following the UK's Autumn 2024 Budget. While changes to national insurance and the minimum wage raised concerns about corporate costs, it was the Government's decision to halve the Inheritance Tax relief for AIM-listed stocks that had the most acute and immediate impact on our segment of the market. This policy change acted as a major catalyst for outflows from AIM-focused funds, creating a significant technical overhang and driving non-fundamental selling pressure across many high-quality businesses, regardless of their individual trading performance. This headwind was compounded by continued outflows from UK-focused equity funds throughout the period, as investor capital continued to rotate into US and global markets.

The second half of the year brought its own challenges, most notably a bout of global risk-off sentiment in early April 2025 following the US government's "Liberation Day" tariff announcements. This triggered a sharp, broad-based equity market sell-off and a flight to safety. Despite this dislocation, we viewed the UK as a relative safe haven. The portfolio's strategic positioning - with a bias towards services-focused businesses with primarily UK revenue exposure - provided significant insulation from direct tariff impacts and global supply chain disruptions. This defensive posture allowed us to navigate the volatility while the underlying fundamental performance of our portfolio companies remained robust.

Crucially, this environment of depressed valuations has served as a powerful catalyst for corporate activity. The valuation disconnect between the UK and other international markets, and particularly between public and private market valuations, became too compelling for acquirers to ignore. The second half of the financial year saw a marked acceleration in takeover activity, with both strategic and private equity buyers targeting UK smaller companies. This trend strongly validated our investment approach, which is predicated on identifying high-quality businesses whose strategic value is often mispriced by public markets.

Throughout this volatile year, our investment philosophy remained consistent. We continued to focus on bottom-up stock selection, seeking out opportunities where structural growth themes and company-specific self-help levers can dilute the impact of broader market fluctuations. Our strong relationships with management teams and our extensive specialist network remain critical to our process, underpinning our confidence in the portfolio's quality and its potential to deliver significant long-term returns for shareholders.

2)Performance - FY 2024/25

The Company's NAV Total Return decreased by 0.1% over the 12-month period ended 30 June 2025, below the FTSE Small Cap Total Return Index (excluding Investment Companies), which rose by 13.1% and the AIC UK smaller companies sector which rose by 2.6%, but ahead of the AIM All-Share Index, which declined by 2.4%.

Key contributors to performance (contribution to return (CTR) 2024 v 2025) during the year included:

• Costain Group(+423 bps CTR), the UK infrastructure engineering provider, whose shares re-rated significantly following a series of positive trading updates and, crucially, announcements of major contract wins, underpinning future revenue and profit growth.

• Inspired(+207 bps CTR), the technology-enabled energy and sustainability services provider. SEC led a recapitalisation in January 2025, priced at 40p per share. Following this Inspired was subject to a competitive takeover process which culminated in a Recommended Cash Offer from US private equity firm HGGC Capital at 81p, over twice the January placing price, validating our conviction in the investment opportunity.

• The Property Franchise Group(+200 bps CTR), which continued to deliver strong performance driven by the successful integration of two strategic acquisitions in 2024, and continued robust revenue momentum in its resilient, lettings-focused franchising model.

• XPS Pensions Group(+193 bps CTR), the pensions consulting and administration specialist, which delivered another year of strong earnings growth and margin expansion. XPS' earnings growth and re-rating led to the company being included in the FTSE 250 Index during the period, unlocking a significant liquidity pool. During the period the Manager took the opportunity to take profits from the XPS shareholding.

• Everplay Group(+175 bps CTR), the independent video game publisher, which saw its share price recover strongly as it delivered results demonstrating that earlier operational issues were temporary and that the longer term investment thesis remained intact.

Top Five Absolute Contributors to Performance

Security	Valuation 30 June 2025 £'000	Period Contribution to return (basis points)
Costain Group	18,042	423
Inspired	13,732	207
The Property Franchise Group	12,921	200
XPS Pensions Group	9,166	193
Everplay Group	15,586	175

The main detractors over the period were:

• Iomart Group(-946 bps CTR), the cloud computing and datacentre provider. The shares were impacted by downgrades relating to higher-than-expected customer churn in its legacy infrastructure segment, combined with market concerns around a potential refinancing cliff, which has subsequently been successfully resolved by a successful refinancing post-period.

• Next 15 Group(-151 bps CTR), the digital marketing agency, saw its shares fall following a profit downgrade largely driven by a specific subsidiary now closed. Following a change of CEO the Manager has continued to build SEC's stake at lower average prices.

• Fintel(-120 bps CTR), which provides technology and regulatory services to financial advisers and financial product manufacturers. The shares de-rated during the period despite no negative company-specific newsflow, suffering from the broader negative sentiment directed towards AIM-quoted stocks.

• Brooks Macdonald Group(-94 bps CTR), the wealth manager, which underperformed temporarily due to its decision to migrate from the AIM Market to the LSE Main Market, which led to some technical selling pressure The Manager took this opportunity to increase its stake in the business at an attractive valuation, a decision which proved profitable within the period and increasingly so post-period (as at 30 September 2025).

• Tribal Group(-78 bps CTR), the education software provider, which like many other AIM stocks also saw its valuation decline despite continued operational progress and no material adverse newsflow. Positive post-period trading newsflow has seen Tribal's shares appreciate materially post-period end (as at 30 September 2025).

Bottom Five Absolute Contributors to Performance

Security	Valuation 30 June 2025 £'000	Period Contribution to return (basis points)
Iomart Group	4,915	(946)
Next 15 Group	6,647	(151)
Fintel	6,750	(120)
Brooks Macdonald Group	17,314	(94)
Tribal Group	3,560	(78)

3)Portfolio Activity

New investments

We made two new investments during the period:

• Diaceutics, an outsourced provider of proprietary data analytics and services to the biopharmaceutical industry. It is a high-margin business which is successfully transitioning its business model from project based consultancy towards a higher-quality, contracted recurring model, a proposition which is being validated by accelerating new contract momentum.

• Next 15 Group, a specialist digital marketing and communications agency serving the global technology sector. The Manager has been building a stake following share price weakness due to poor sector sentiment and some short-term profit weakness which is expected to be resolved.

Both companies were well known to the Manager and were invested in following periods of valuation weakness that we believed were disconnected from their long-term fundamental prospects.

Follow-on investments

The Manager also took the opportunity to add to several existing holdings at attractive valuations, including Brooks Macdonald, Costain, Halfords, Inspired, Iomart, Netcall, Ricardo, Everplay and Trufin.

Full exits

Corporate activity was a key theme during the period. The Manager fully exited its position in Alpha Financial Markets Consulting (1.5x multiple of aggregate cost)following its Recommended Cash Offer by Bridgepoint private equity. The full exits of Ricardo and Inspired, whilst announced during the period pursuant to their Recommended Cash Offers, are expected to complete in the second half of the 2025 calendar year.

4)Where We Engaged

Engagement focus: Ricardo

Having engaged previously around portfolio simplification and a strategic pivot towards higher value consultancy, we increased our engagement intensity following a surprise profit warning and material value drawdown in January 2025. We engaged with the board and its advisers on several organic and inorganic routes to value recovery, the conclusion of which was that, whilst the organic path to recovery was credible over the longer term, an inorganic path should be proactively explored to accelerate value recovery for all shareholders. In conjunction with this an activist shareholder accumulated a significant stake in the business, and was publicly agitating for board change. In parallel with our board engagement, we had constructive dialogue with this shareholder to understand their concerns and proposed remedial steps, and to allow us to make an informed decision as to the optimal route to value recovery for this Company.

Who we engaged with:Board, Advisers, Activist Shareholder

Outcome:The culmination of our collaboration with these stakeholders was a Recommended Cash Offer for Ricardo at a 69% premium to its three month volume weighted average share price, with this Company (and other equity funds managed by Gresham House) de-risking the transaction through the provision of an irrevocable undertaking to accept the Offer. The transaction has since received shareholder approval and is expected to complete in the second half of calendar year 2025, subject to typical regulatory approvals.

Engagement focus: Inspired

How we engaged: In the latter quarter of calendar year 2024 an unfortunate combination of events (several material contracts being delayed to 2025, depressing near-term earnings, and a pre-scheduled step-down of Inspired's net leverage covenant in the same month) led to balance sheet pressure and a material drawdown in Inspired's share price. Recognising the pressure on Inspired's equity value from this situation, the Manager led and provided cornerstone funding (through this Company and other equity funds under management, which in aggregate held just under 30% of Inspired's equity) a recapitalisation of Inspired, structured as a combination of ordinary shares, warrants and convertible loan notes, with the equity priced at 40p at completion in January 2025. Over the following months Inspired received an unsolicited hostile takeover bid from the second largest shareholder, at 68.5p, which the Manager and the board publicly indicated objection to.

Who we engaged with:Board, Advisers

Outcome: Shortly after the announcement of the hostile offer, Inspired's advisors (having been appointed historically following our previous engagement around bid defence and takeover vulnerability) were able to deliver a Recommended Cash Offer for Inspired at 81p from a different counterparty, more than twice the share price at which we recapitalised Inspired in January 2025. Following the rejection of the hostile offer, this latter offer was accepted and went unconditional in August 2025.

5)Outlook - FY 2025/26

Looking forward, while macroeconomic and geopolitical risks remain elevated, we are encouraged by the continued signs of recovery in the UK economy and broader market sentiment. Corporate earnings have proven resilient, takeover activity has accelerated, and early indicators suggest that IPO markets may be reopening for higher - quality companies.

The environment for M&A remains highly supportive of the Company's strategy and positions. The significant valuation disconnect between UK public markets and private transaction multiples continues to attract interest from both corporate and private equity acquirers. We believe this trend of corporate activity will continue to be a key driver of returns, helping to crystallise the intrinsic value of our portfolio holdings which is not currently being reflected in public market prices.

We continue to advocate for a more supportive policy environment to revitalise UK capital markets. In our view, key reforms should include:

• Removal of stamp duty on UK share trading;
• Further simplification of UK listing rules;
• Unlocking domestic pension fund capital for UK public equity investment; and
• Clear confirmation of the inclusion of AIM stocks in the Mansion House Accord.

These reforms, combined with improving macroeconomic tailwinds, could catalyse a sustainable re-rating of the UK small cap equity segment.

We remain focused on our high-conviction, bottom-up stock selection, underpinned by deep fundamental research, active engagement with management teams, and a disciplined valuation framework. With a portfolio built on companies with clear structural growth drivers, high margins, and strategic relevance, we are confident in the portfolio's positioning for the year ahead.

Top 10 Investee Company Review

(as at 30 June 2025)

Company	% of NAV1	Investment Thesis	Developments
Ricardo Business Services	10.4%	Ongoing strategic transformation to refocus and prioritise the business towards higher growth, higher margin and less capital intensive activities Strong market position underpinned by significant sector expertise	Recommended Cash Offer from WSP Inc. at a 69% premium to the 3 month volume weighted average share price Expected completion in H2 2025
Costain Industrial Goods & Services	10.4%	UK infrastructure delivery partner with particularly strong franchise presence across Rail and Water, which are both secular growth markets Significantly better capitalised versus history, with a substantially de-risked contracting model (risk sharing and/ or transfer vs. historically fixed price contracts) Embedded consultancy offering delivering material margin upside above and beyond project delivery	H1 update demonstrated mix shift toward higher-margin consultancy in line with our thesis (16% of revenue, from 12% previously) Latest order book of £5.6bn with encouraging book-to-bill ratio Confirmed guidance and on track for c.4.5% adjusted operating margin run-rate by end-2025
Brooks Macdonald Financial Services	9.9%	Opportunity to leverage operational investments to grow margin and continue strong cash flow generation A consolidating market; opportunity for Brooks as both consolidator and potential target with recent takeover interest for sector peers	Completed the divestment of its non-core international business to Canaccord Moved from AIM to the Main Market to broaden investor access and profile Reported best quarterly net flow performance in two years, with encouraging momentum towards a return to net positive flows
Everplay Technology	8.9%	Leading independent video game publisher and developer Earnings significantly underpinned by back catalogue sales Significant founder ownership and experienced management team	Rebrand from Team17 to Everplay Management change with Frank Sagnier (ex. Codemasters CEO) being appointed as Executive Chair Announced an upcoming sequel to its "Hell Let Loose" game, which has generated over $100m of lifetime revenue for Everplay
Inspired Business Services	7.9%	Leading player in a fragmented industry; significant opportunity to gain market share through client wins, proposition extension and M&A Valued at a substantial discount to comparable private market transaction multiples	Recommended Cash Offer from HGGC Capital at a 102.5% premium to the issue price of 40p at which Inspired was recapitalised in January 2025 Completed post period end
The Property Franchise Group Business Services	7.4%	Structurally growing UK residential lettings market Exceptional quality of earnings due to franchisees' bias towards lettings revenues, and TPFG's franchise fee revenue model Capital light and cash generative	Encouraging trading momentum with H1'25 results showing 8% like for like revenue growth, with strong performance across all divisions, and a sales pipeline 30% higher at June 2025 than December 2024
Netcall Technology	6.9%	Provider of AI-driven process automation and customer engagement solutions Structural tailwinds driving adoption of process automation, catalysed further by rising employment costs and AI technology capabilities High levels of revenue visibility due to contracted revenues, with >100% Net Revenue Retention in FY24	FY25 trading update demonstrating 23% growth (10% organic) Strong momentum in its "Liberty Cloud" platform, driven by AI and automation demand, with Cloud ACV up 52% (26% organic)
Trufin Technology	6.2%	Provider of financing, payment and video game publishing software and services Significant latent value when appraised on a sum of the parts basis	H1'25 trading update demonstrating exceptionally strong performance, in particular due to its Playstack video gaming division, with 40% revenue growth year on year Full year expectations expected to be materially exceeded Share buyback programme announced
XPS Pensions Business Services	5.3%	Highly defensive - high degree of revenue visibility and largely non-discretionary, regulation driven client activity Significant inflation pass-through ability Highly fragmented sector with recent M&A activity, providing opportunity to XPS as a consolidator and potential target	Reported another consecutive year of double digit revenue growth Completed acquisition of Polaris Actuaries & Consultants to accelerate Insurance Consulting expansion Chair succession with Martin Sutherland announced as incoming Chair
Fintel Business Services	3.9%	Leading UK provider of technology enabled regulatory solutions and services to IFAs, financial institutions and other intermediaries Strategically valuable technology platform with opportunity to drive material growth in revenues and margins through supporting customers' digitisation journeys	New partnerships (including Blackrock) for its VouchedFor intermediary proposition Launch of Defaqto Matrix 360 market and product intelligence software with new partnerships including Zurich, RAC, Frontier, NFU Mutual and Policy Expert Completed acquisition of fund ratings and research firm RSMR New Simplybiz CEO appointment

1. Top ten holdings represent 77.2% of NAV

Portfolio as at 30 June 2025

					% of invested portfolio at	% of invested portfolio at
		Date of first	Cost	Valuation	30 June	30 June	% of net
Company	Sector Classification	Investment	£'000	£'000	2025	2024	assets
Ricardo	Business Services	Sep 2021	18,618	18,070	11.0%	8.2%	10.4%
Costain Group	Industrial Goods and Services	Jun 2024	11,187	18,042	11.0%	2.1%	10.4%
Brooks Macdonald	Financial Services	Jun 2016	18,783	17,314	10.5%	10.3%	9.9%
Everplay Group	Technology	Dec 2023	10,875	15,586	9.5%	6.0%	8.9%
Inspired	Business Services	Jul 2020	16,555	13,732	8.3%	4.1%	7.9%
The Property Franchise Group	Business Services	Oct 2023	7,472	12,921	7.8%	6.8%	7.4%
Netcall	Technology	Mar 2023	10,048	11,963	7.3%	2.2%	6.9%
Trufin	Technology	Jul 2023	7,805	10,753	6.5%	3.0%	6.2%
XPS Pensions Group	Business Services	Jul 2019	2,761	9,166	5.6%	23.8%	5.3%
Fintel	Business Services	Oct 2020	5,030	6,750	4.1%	9.5%	3.9%
Next 15 Group	Business Services	Oct 2024	9,251	6,647	4.0%	-	3.8%
Diaceutics	Healthcare	Sep 2024	6,587	5,945	3.6%	-	3.4%
Halfords Group	Consumer	Jun 2024	5,576	5,756	3.5%	1.0%	3.3%
Iomart Group	Technology	Mar 2022	24,702	4,915	3.0%	10.0%	2.8%
Tribal Group	Technology	Dec 2014	5,871	3,560	2.2%	4.9%	2.0%
Benchmark	Healthcare	Jun 2019	3,370	1,852	1.1%	3.8%	1.1%
Inspired CLN	Business Services	Jul 2020	1,705	1,705	1.0%	-	1.0%
R&Q Insurance 1	Financial Services	Jun 2022	6,816	-	0.0%	0.0%	0.0%
Inspired Warrants	Business Services	Jul 2020	-	-	0.0%	-	0.0%
Total investments				164,677			94.6%
Cash				9,519			5.4%
Net current liabilities				(43)			(0.0%)
Total shareholders' funds				174,153			100.0%

1. In Liquidation

Ken Wotton

Gresham House Asset Management

15 October 2025

Financial Summary

Capital Return	As at 30 June 2025	As at 30 June 2024	% change
Net asset value ("NAV") per Ordinary share +	392.47p	396.87p	-1.1%
Ordinary share price	363.00p	365.50p	-0.7%
Comparative index ++	6,175.33	5,687.19	+8.6%
Discount of Ordinary share price to NAV 1	(7.5)%	(7.9)%
Average discount of Ordinary share price to NAV for the year 1	(8.4)%	(7.6)%
Total assets (£'000)	174,399	191,683	-9.0%
Equity shareholders' funds (£'000)	174,153	189,965	-8.3%
Ordinary shares in issue with voting rights	44,373,800	47,865,450

Performance	Year ended 30 June 2025	Year ended 30 June 2024
NAV total return for the year 1	(0.1)%	16.6%
Share price total return for the year 1	0.4%	19.2%
Comparative index ++ total return for the year	13.1%	18.5%
Ongoing charges 1	1.26%	1.20%
Ongoing charges (including performance fee) 1	1.26%	2.03%
Revenue return per Ordinary share	5.03p	4.15p
Dividend yield 1	1.17%	0.96%
Proposed final dividend for the year	4.25p	3.50p

Year's Highs/Lows	High	Low
NAV per Ordinary share	407.44p	302.97p
Ordinary share price	379.00p	272.00p

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

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

1 Alternative Performance Measures. Please refer to pages 73 and 74 of the 2025 Annual Report for definitions and reconciliations of the Alternative Performance Measures to the year-end results.

Annual General Meeting

The Notice of the Annual General Meeting to be held on Wednesday, 12 November 2025 is set out on pages 76 and 78 of the Annual Report. The Annual General Meeting will be held at the offices of Panmure Liberum Limited, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY.

Further Information and Contact Details

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

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

For further information, please contact:

Strategic Equity Capital plc William Barlow (Chairman)	(via Juniper Partners) [phone]
Panmure Liberum Limited (Corporate Broker) Chris Clarke Darren Vickers	[phone]
Juniper Partners Limited (Company Secretary) Steven Davidson	[phone]
KL Communications (PR Adviser) Charles Gorman Adam Westall Charlotte Francis	[e-mail] [phone]

Financial Statements

Statement of Comprehensive Income

	Year ended 30 June 2025			Year ended 30 June 2024
	Revenue	Capital		Revenue	Capital
	return	return	Total	Total	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investments
(Losses)/gains on investments held at fair value through profit or loss	-	(4,998)	(4,998)	-	24,099	24,099
	-	(4,998)	(4,998)	-	24,099	24,099
Income
Dividends	4,405	-	4,405	3,997	2,111	6,108
Interest	51	-	51	55	-	55
Total income	4,456	-	4,456	4,025	2,111	6,163
Expenses Investment Manager's base fee	(1,256)	-	(1,256)	(1,270)	-	(1,270)
Investment Manager's performance fee	-	-	-	-	(1,409)	(1,409)
Other expenses	(870)	-	(870)	(756)	-	(756)
Total expenses	(2,126)	-	(2,126)	(2,026)	(1,409)	(3,435)
Net return before taxation	2,330	(4,998)	(2,668)	2,026	24,801	26,827
Taxation	-	-	-	-	-	-
Net return and total comprehensive income for the year	2,330	(4,998)	(2,668)	2,026	24,801	26,827
	pence	pence	pence	pence	pence	pence
Return per Ordinary share	5.03	(10.78)	(5.75)	4.15	50.84	54.99

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

Statement of Changes in Equity

For the year ended 30 June 2025	Share capital	Share premium account	Special reserve	Capital reserve	Capital redemption reserve	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
1 July 2024	6,353	11,300	-	165,489	2,897	3,926	189,965
Net return and total comprehensive income for the year	-	-	-	(4,998)	-	2330	(2,668)
Dividends paid	-	-	-	-	-	(1,649)	(1,649)
Share buybacks	-	-	-	(11,495)	-	-	(11,495)
30 June 2025	6,353	11,300	-	148,996	2,897	4,607	174,153
For the year ended 30 June 2024	Share capital	Share premium account	Special reserve	Capital reserve	Capital redemption reserve	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
1 July 2023	6,353	11,300	3,590	142,952	2,897	3,131	170,223
Net return and total comprehensive income for the year	-	-	-	24,801	-	2,026	26,827
Dividends paid	-	-	-	-	-	(1,231)	(1,231)
Share buybacks	-	-	(3,590)	(2,264)	-	-	(5,854)
30 June 2024	6,353	11,300	-	165,489	2,897	3,926	189,965

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

Balance Sheet

	As at 30 June 2025	As at 30 June 2024
	£'000	£'000
Non-current assets
Investments held at fair value though profit or loss	164,677	182,364
Current assets
Trade and other receivables	203	166
Cash and cash equivalents	9,519	9,153
	9,722	9,319
Total assets	174,399	191,683
Current liabilities
Trade and other payables	(246)	(1,718)
Net assets	174,153	189,965
Capital and reserves
Share capital	6,353	6,353
Share premium account	11,300	11,300
Capital reserve	148,996	165,489
Capital redemption reserve	2,897	2,897
Revenue reserve	4,607	3,926
Total shareholders' equity	174,153	189,965
	pence	pence
Net asset value per share	392.47	396.87
	number	number
Ordinary shares in issue	44,373,800	47,865,450

The financial statements were approved by the Board of Directors of Strategic Equity Capital on 15 October 2025.

They were signed on its behalf by

William Barlow

Chairman

15 October 2025

Company Number: 05448627

Statement ofCash Flows

	Year Ended 30 June	Year Ended 30 June
	2025	2024
	£'000	£'000
Operating activities
Net return before taxation	(2,668)	26,827
Adjustment for losses/(gains) on investments	4,998	(24,099)
Operating cash flows before movements in working capital	2,330	2,728
(Increase)/decrease in receivables	(37)	102
(Decrease)/increase in payables	(1,416)	1,134
Purchases of portfolio investments	(55,361)	(67,433)
Sales of portfolio investments	67,994	78,465
Net cash flow from operating activities	13,510	14,996
Financing activities
Equity dividend paid	(1,649)	(1,231)
Shares bought back in the year	(11,495)	(5,854)
Net cash flow from financing activities	(13,144)	(7,085)
Increase in cash and cash equivalents for the year	366	7,911
Cash and cash equivalents at the start of year	9,153	1,242
Cash and cash equivalents at 30 June	9,519	9,153

Emerging and Principal Risks

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

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

The principal ongoing risks and uncertainties currently faced by the Company, which may vary in significance from time to time, are set out on pages 20 to 22 of the 2025 Annual Report, together with the controls and actions taken to mitigate those risks.

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

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

We confirm that to the best of our knowledge:

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

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

Going Concern

In assessing the Company's ability to continue as a going concern the Directors have also considered the Company's investment objective, detailed on the inside front cover, risk management policies, detailed on pages 20 to 22 of the 2025 Annual Report, capital management (see note 17 to the financial statements in the 2025 Annual Report), the nature of its portfolio and expenditure projections and believe that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and for at least 12 months from the date of this Report. In addition, the Board has had regard to the Company's investment performance (see page 3 of the 2025 Annual Report) and the price at which the Company's shares trade relative to their NAV (see page 3 of the 2025 Annual Report).

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

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

Related party transactions and transactions with the Investment Manager

Fees paid to Directors are disclosed in the Directors' Remuneration Report on page 43 of the 2025 Annual Report. Full details of Directors' interests are set out on page 43 of the 2025 Annual Report.

The amounts payable to the Investment Manager, which is not considered to be a related party, are disclosed in notes 3 and 4 on pages 59 and 60 of the 2025 Annual Report. The amount due to the Investment Manager for management fees at 30 June 2025 was £105,000 (2024: £116,000). The amount due to the Investment Manager for performance fees at 30 June 2025 was £nil (2024: £1,409,000).

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

Notes

1.1Corporate information

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

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

The financial statements of Strategic Equity Capital plc for the year ended 30 June 2025 were authorised for issue in accordance with a resolution of the Directors on 15 October 2025.

1.2 Basis of preparation and statement of compliance

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

The financial statements of the Company have been prepared on a going concern basis.

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

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

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

2. Income

	Year ended 30 June 2025			Year ended 30 June 2024
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Income from investments
UK dividend income	4,405	-	4,405	3,997	2,111	6,108
	4,405	-	4,405	3,997	2,111	6,108
Other operating income
Liquidity interest	51	-	51	55	-	55
	4,456	-	4,456	4,052	2,111	6,163

3. Investment Manager's base fee

	Year ended 30 June 2025			Year ended 30 June 2024
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Management fee	1,256	-	1,256	1,270	-	1,270
	1,256	-	1,256	1,270	-	1,270

A basic management fee was payable to the Investment Manager at an annual rate of 0.75% of the NAV of the Company. The basic management fee accrues daily and is payable quarterly in arrears. The Investment Manager is also entitled to a performance fee, details of which are given in the Report of the Directors on page 31 of the 2025 Annual Report.

4. Investment Manager's performance fee

	Year ended 30 June 2025			Year ended 30 June 2024
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Performance fee	-	-	-	-	1,409	1,409
	-	-	-	-	1,409	1,409

Details of the Performance fee calculation are noted in the Report of the Directors on page 31 of the 2025 Annual Report.

5. Other expenses

	Year ended 30 June 2025			Year ended 30 June 2024
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Secretarial services	183	-	183	181	-	181
Auditor's remuneration for:
Audit services*	42	-	42	39	-	39
Directors' Remuneration	171	-	171	175	-	175
Other expenses	474	-	474	361	-	361
	870	-	870	756	-	756

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

*No non-audit fees were incurred during the year

6. Taxation

	Year ended 30 June 2025			Year ended 30 June 2024
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Corporation tax at 25.00% (2024: 25.00%)	-	-	-	-	-	-
	-	-	-	-	-	-

As at 30 June 2025 the total taxation charge in the Company's revenue account is lower than the standard rate of corporation tax in the UK. The differences are explained below:

	Year ended 30 June 2025			Year ended 30 June 2024
	Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Net return on ordinary activities before taxation	2,330	(4,998)	(2,668)	2,026	24,801	26,827
Theoretical tax at UK corporation tax rate of 25.00% (2024: 25.00%)	583	(1,250)	(667)	507	6,200	6,707
Effects of:
- UK dividends that are not taxable	(1,100)	-	(1,100)	(999)	-	(999)
- Unrelieved expenses	517	-	517	492	352	844
- Non-taxable investment losses/(gains)	-	1,250	1,250	-	(6,552)	(6,552)
	-	-	-	-	-	-

Factors that may affect future tax charges

At 30 June 2025, the Company had no unprovided deferred tax liabilities (2024: £nil). At that date, based on current estimates and including the accumulation of net allowable losses, the Company had unrelieved losses of £36,013,000 (2024: £35,348,000) that are available to offset future taxable revenue. A deferred tax asset of £9,003,000 (2024: £8,837,000) has not been recognised because the Company is not expected to generate sufficient taxable income in future periods in excess of the available deductible expenses and accordingly, the Company is unlikely to be able to reduce future tax liabilities through the use of existing surplus losses. The potential deferred tax asset has been calculated using a corporation tax rate of 25% (2024: 25%).

7. Dividends

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

	30 June	30 June
	2025	2024
	£'000	£'000
Final dividend proposed of 4.25p (2024: 3.50p) per share	1,836	1,649

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

	30 June	30 June
	2025	2024
	£'000	£'000
Final dividend: 3.50p per share (2024: 2.50p)	1,649	1,231

Dividends have been solely paid out of the Revenue reserve.

8. Return per Ordinary share

	Year ended 30 June 2025			Year ended 30 June 2024
	Net	Weighted average	Per	Net	Weighted average	Per
	return	number of	share	return	number of	share
	£'000	Ordinary shares	pence	£'000	Ordinary shares	pence
Total
Return per share	(2,668)	46,346,499	(5.75)	26,827	48,778,400	54.99
Revenue
Return per share	2,330	46,346,499	5.03	2,026	48,778,400	4.15
Capital
Return per share	(4,998)	46,346,499	(10.78)	24,801	48,778,400	50.84

9. Investments

	30 June 2025 £'000	30 June 2024 £'000
Investment portfolio summary
Quoted investments at fair value through profit or loss	164,677	182,364
	164,677	182,364

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

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

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

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

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

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

The following table analyses within the fair value hierarchy the Company's financial assets and liabilities (by class) measured at fair value at 30 June 2025.

Financial instruments at fair value through profit or loss

	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
30 June 2025
Equity investments	162,972	1,705	-	164,677
Liquidity funds	-	1	-	1
Total	162,972	1,706	-	164,678
30 June 2024
Equity investments	178,480	3,884	-	182,364
Liquidity funds	-	1	-	1
Total	178,480	3,885	-	182,365

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

10. Nominal Share capital

	Number	£'000
Allotted, called up and fully paid Ordinary shares of 10p each:
Ordinary shares in circulation at 30 June 2024	63,529,206	6,353
Shares held in Treasury at 30 June 2024	15,663,756	1,566
Ordinary shares in issue per Balance Sheet at 30 June 2024	47,865,450	4,787
Shares bought back to be held in Treasury	(3,491,650)	(349)
Ordinary shares in issue per Balance Sheet at 30 June 2025	44,373,800	4,438
Shares held in Treasury at 30 June 2025	19,155,406	1,915
Ordinary shares in circulation at 30 June 2025	63,529,206	6,353

Other Information

These are not statutory accounts in terms of Section 434 of the Companies Act 2006. Full audited accounts for the year to 30 June 2025 will be sent to shareholders in October 2025 and will be available for inspection at 1 Finsbury Circus, London EC2M 7SH, the registered office of the Company.

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

The audited accounts for the year ended 30 June 2025 will be lodged with the Registrar of Companies.

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