The Henderson Smaller Companies Investment Trust: Full-Year Results 2025

In this video, Indri van Hien, co- manager of The Henderson Smaller Companies Investment Trust, discusses its results for the twelve months to 31 May 2025.

Discrete year performance (%)	Share price (total return)	NAV (total return)
30/06/2024 to 30/06/2025	4.6	0.0
30/06/2023 to 30/06/2024	20.3	17.2
30/06/2022 to 30/06/2023	-6.1	-7.4
30/06/2021 to 30/06/2022	-33.6	-26.6
30/06/2020 to 30/06/2021	64.6	59.0

All performance, cumulative growth and annual growth data is sourced from Morningstar.

Source: at 30/06/25. © 2025 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance does not predict future returns.

Glossary

Balance sheet

A financial statement that summarises a company’s assets, liabilities and shareholders’ equity at a particular point in time. Each segment gives investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. It is called a balance sheet because of the accounting equation: assets = liabilities + shareholders’ equity.

Cash flow

The net balance of cash that moves in and out of a company. Positive cash flow shows more money is moving in than out, while negative cash flow means more money is moving out than into the company.

Cyclical stocks

Companies that sell discretionary consumer items (such as cars), or industries highly sensitive to changes in the economy (eg. mining).

Discount

Refers to a situation when a security is trading for lower than its fundamental or intrinsic value. The opposite of trading at a premium.

Discount/premium (investment trusts)

The amount by which the price per share of an investment company is either lower (at a discount) or higher (at a premium) than the net asset value per share (cum income), expressed as a percentage of the net asset value per share.

Dividend

A variable discretionary payment made by a company to its shareholders.

Earnings per share (EPS)

EPS is the bottom-line measure of a company’s profitability, defined as net income (profit after tax) divided by the number of outstanding shares.

Equity

A security representing ownership, typically listed on a stock exchange. ‘Equities’ as an asset class means investments in shares, as opposed to, for instance, bonds. To have ‘equity’ in a company means to hold shares in that company and therefore have part ownership.

Interest rates

The amount charged for borrowing money, shown as a percentage of the amount owed. Base interest rates (the Bank Rate) are generally set by central banks, such as the Federal Reserve in the US or Bank of England in the UK, and influence the interest rates that lenders charge to access their own lending or saving.

Net asset value (NAV) total return (investment trusts):

The theoretical total return on shareholders’ funds per share reflecting the change in Net Asset Value (NAV) assuming that dividends paid to shareholders were reinvested at NAV at the time the shares were quoted ex-dividend. A way of measuring investment management performance of investment trusts which is not affected by movements in discounts/premiums.

Portfolio

A grouping of financial assets such as equities, bonds, commodities, properties or cash. Also often called a ‘fund’.

Share price total return (investment trusts)

The theoretical total return to the investor assuming that all dividends received were reinvested in the shares of the company at the time the shares were quoted ex-dividend. Transaction costs are not taken into account.

Valuation metrics

Metrics used to gauge a company’s performance, financial health, and expectations for future earnings, e.g. P/E ratio and ROE.

Disclaimer

References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.

Not for onward distribution. Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Henderson Investors International Limited (reg no. 3594615), Janus Henderson Investors UK Limited (reg. no. 906355), Janus Henderson Fund Management UK Limited (reg. no. 2678531), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority), Tabula Investment Management Limited (reg. no. 11286661 at 10 Norwich Street, London, United Kingdom, EC4A 1BD and regulated by the Financial Conduct Authority) and Janus Henderson Investors Europe S.A. (reg no. B22848 at 78, Avenue de la Liberté, L-1930 Luxembourg, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier).

Janus Henderson is a trademark of Janus Henderson Group plc or one of its subsidiaries. © Janus Henderson Group plc

Performance

In the full year to the 31st of May 2025, The Henderson Smaller Companies Investment Trust NAV fell 5.1% and the share price fell 2.3% on a total return basis. It was a disappointing performance against the index, which rose 5%. Base rates staying higher for longer, with rising bond yields, and the uncertainty caused by the Labour government’s budget in the UK and Trump’s Liberation Day announcements in the US continued to have a detrimental impact on the real economy and the earnings and valuations of our predominantly pro-cyclical and interest rate-sensitive portfolio. We are, however, pleased to declare a final dividend of 20.5 pence, bringing the full-year dividend to 28 pence, which represents 3.7% growth year on year and is a reflection of continued strong cash generation in the underlying portfolio.

Performance Drivers

During the period under review, the fund suffered from a profits warning in Next 15, a market services and data communications group that was impacted by a loss of a material contract in Saudi Arabia and a weakness in tech spending. The company is currently undergoing a change in management, and the board has committed to unlocking shareholder value through the potential disposal of parts of their business. Elsewhere, Impacts Asset Management suffered from continued outflows and the loss of a major client mandate, which put significant pressure on earnings. Our biggest positive contributors came from our long-standing holding in Balfour Beatty, an international construction support services and infrastructure investment. Their shares have performed very strongly on the back of strong order book growth in its construction and support services businesses, as well as continued commitment to cash returns to shareholders. SigmaRoc, the owner and operator of lime and limestone quarries in Europe, saw strong earnings upgrades driven primarily by synergies extracted from their transformational acquisition of CRH’s lime assets and optimism around an end market revival in Europe following German debt brake reforms.

Portfolio Changes

We continue to find exciting new investment opportunities and added holdings such as Genus, a global porcine and bovine genetics supplier who recently gained FDA approval for a gene-edited disease-resistant pig in the US, and Trustpilot, an open digital platform for consumer reviews and insights. We also added Pinewood Technologies, a provider of cloud-based enterprise software for the car dealership industry, which is only just starting to make inroads into the vast US market. We bought Currys, an omni-channel electronics retailer in the UK and Nordics, which should benefit from a tech refresh cycle five years on from the pandemic. We also purchased Spire Healthcare, a leading hospital group in the UK whose expansion of mental and occupational health clinics should drive strong growth and improve returns in its business. We simultaneously disposed of holdings in CLS, Morgan Advanced Materials, Midwich, Synthhema, and Vodendum, where we had concerns over their balance sheets in the context of delayed market recoveries. The portfolio continued to benefit from the strong takeover momentum in this part of the market, which saw our holdings in Alliance Farmer, Alpha Financial Markets Essential, and Learning Technologies be bid for.

Outlook

After a lost decade in UK small caps, a period that was punctuated by the Brexit vote, unstable politics, and UK exceptionalism, valuations remained deeply discounted, as evidenced by the unabating M&A the market is seeing. And as clumsy as the Labour government’s first year in office has been, it’s clear that they understand the need to incentivize investment-led growth. Their focus on deregulation in the financial sector and the resetting of our trading relationship with the EU is encouraging. Today, we see US exceptionalism being questioned, while we think UK exceptionalism is receding. Given how oversold UK small caps are, we don’t think it will take much to get this flows-driven part of the market moving again, and we look forward to the year ahead with cautious optimism.

Important information

Please read the following important information regarding funds related to this article.

Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions.

Specific risks

If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
Most of the investments in this portfolio are in smaller companies shares. They may be more difficult to buy and sell, and their share prices may fluctuate more than those of larger companies.
This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.
Using derivatives exposes the Company to risks different from - and potentially greater than - the risks associated with investing directly in securities. It may therefore result in additional loss, which could be significantly greater than the cost of the derivative.

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