The Global Smaller Companies Trust Plc (LON:GSCT) has announced its Statement of Audited Results for the year ended 30 April 2026 and Final dividend announcement
Financial highlights for the year ended 30 April 2026
Net Asset Value (NAV) with debt at fair value total return of 21.0% (2025: -4.8%) versus 31.3% from the Benchmark (2025: -0.8%)
The NAV per share with debt at fair value increased to 198.8p from 167.1p.
Share price total return of 28.8% (2025: -5.6%)
The share price ended the year at 188.0p (2025: 148.6p).
Total dividend of 3.15p (2025: 3.00p)
56th consecutive annual increase, up by 5.0% (2025: up by 6.8%).
The Company’s shares ended the year at a discount to NAV of 5.4% (2025: 11.0%)
Chairman’s Statement
Dear Shareholder,
Following the Annual General Meeting on 15th August 2025, the Chairman Anja Balfour retired from the Board and I was pleased to accept the Board’s invitation to become Chairman. Anja was a director of your Company since 1st June 2015 and served as Chairman since 30th July 2020. I would like to thank Anja for her significant contribution and commitment to the Company throughout this time.
The universe of global smaller companies is very large, presenting our Lead Manager with a wealth of potential investment opportunities. In choosing between these, our Lead Manager seeks to invest in good quality, profitable businesses, when they become available at an attractive valuation, eschewing more speculative investments. This conservative approach can help mitigate against losses in a falling market, and supports long term growth in value. It has led to good investment returns over the longer term.
| Performance: Total returns over the long-term | |||||
| 1 year% | 3 years% | 5 years % | 10 years% | 25 years% | |
| Company NAV total return | 21.0 | 25.6 | 21.6 | 125.8 | 841.9 |
| Benchmark* total return | 31.3 | 45.1 | 37.5 | 164.0 | 788.9 |
| Company share price total return | 28.8 | 37.0 | 20.4 | 114.5 | 1,001.6 |
Source: Columbia Threadneedle Investments
* Benchmark – To 30 April 2026, a blend of two indices, the MSCI All Country World ex UK Small Cap Index (80% (net)) and the Deutsche Numis UK Smaller Companies (excluding investment companies) Index (20%).
The year to 30th April 2026 proved challenging for this investment style. The Company’s Benchmark incorporates both high quality and lower quality companies. Good quality, profitable businesses of the type sought out by the Company performed well, but the market chose to favour and reward to an even greater degree more speculative investment in lower quality businesses of the type the Company actively seeks to avoid. In the year, the Company’s NAV per share accordingly rose strongly, but nevertheless rose less than the Benchmark with its lower quality components. Taking the Company’s long-term liabilities at fair value, the Company’s NAV per share rose to 198.8p, a 21.0% total return for the twelve months, compared to a total return of 31.3% from the Benchmark. Evolving market perceptions around artificial intelligence’s (‘AI’s’) impact on various business models created a meaningful headwind, as did a rotation of capital away from profitable, well-established businesses into lower-quality, speculative companies of the kind we consciously try to avoid. These factors weighed on relative performance across most regions. The Lead Manager’s Review, starting on page 14 of the Annual Report and Financial Statements, provides detail on the various drivers of returns over the period. The Company’s discount narrowed from 11.0% to 5.4% at year end. The share price rose by 26.5% in the twelve months to 188.0p, producing a total return of 28.8% after adding dividends paid in the period.
Longer term total returns from the NAV, Benchmark and share price are shown in the table above, highlighting the strong returns that the asset class has delivered to patient investors.
The global economy demonstrated exceptional resilience in the period, with growth surpassing expectations despite mounting concerns over weaker employment, trade disruptions, conflicts and elevated valuations in some areas of financial markets. Economic vitality persisted amongst wealthier consumers, driven by appreciating equity markets and robust interest income. According to a report by Moody’s Analytics, the top 10% of US income earners accounted for nearly half of all consumer spending. This bifurcation was also apparent in other developed economies. In contrast, inflationary pressures weighed more heavily on lower and middle-income households, constraining real purchasing power and prompting greater selectivity in spending.
Employment conditions softened through the summer of 2025, with younger job seekers bearing the brunt of the slowdown, whilst rate-sensitive industries, including residential property, continued to face headwinds. Inflation fell but remained above central bank targets. Whilst stubborn inflation led the Bank of Japan to raise its policy rate in the financial year, policymakers in many other regions reduced their borrowing costs in order to sustain economic momentum. The US Federal Reserve cut interest rates to three-year lows and a new Governor, Kevin Warsh, was formally appointed in May of this year. Despite lower interest rates, longer maturity sovereign bond yields stayed elevated, reflecting anxiety around the size of fiscal deficits and a possible re-emergence of price pressures. Gold and silver advanced 33% and 115% respectively, though both metals encountered sharp volatility in the latter part of the year.
Political developments once again influenced market sentiment throughout the period. There were multiple events, ranging from tariff announcements, threatened and actual military confrontations, fiscal stimulus programmes and movements away from long standing alliances and conventions. In late February, Israel and the US went into conflict with Iran. This led to damage to energy infrastructure in the Middle East and the effective closure of the Strait of Hormuz, a key waterway through which a significant portion of the World’s commodities travel. Consequently, Brent oil surged to $111 a barrel from $61 at the start of the financial year. This changed the outlook for global growth, inflation and interest rates.
For the US, artificial intelligence (“AI”) remained a dominant driver with related capital expenditure now accounting for a large part of total economic growth and offsetting headwinds from the unemployment rate climbing to a four-year high. Confidence remained low in the UK, with the economy still struggling with low productivity growth, persistent inflation, political uncertainty and higher taxes. Continental Europe was helped by fiscal stimulus, but growth was more gradual than anticipated because of American trade barriers, profitability challenges from an appreciating Euro and higher energy costs. In contrast, a depreciating Yen benefited Japanese corporations and sustained momentum in the nation’s tourism industry. The election of Sanae Takaichi as Japan’s prime minister brought the prospect of expansionary fiscal policy and this lifted sentiment. Corporate governance reforms continued to influence behaviour amongst Japanese companies positively. In the year, other countries within Asia also made progress in this area. Developing economies faced headwinds from trade-related uncertainty, with China experiencing particularly acute effects. This was somewhat counterbalanced by a weaker US Dollar. Fiscal stimulus measures in China coupled with technology sector investment strengthened confidence amongst Chinese enterprises and households. India experienced weakening consumption among middle and lower income groups and its central bank lowered borrowing costs in response. As important producers of technology hardware, South Korea and Taiwan benefitted greatly from the global boom in expenditure on AI.
Performance and the Discount
The Lead Manager’s Review, starting on page 14 of the Annual Report and Financial Statements, covers the year from a market and portfolio view in detail. The table below shows how our regional portfolios performed in the year compared to their relevant local smaller company indices. Most of the Company’s regional portfolios faced a trifecta of challenges in the year: a rapidly rising stock market in which lower beta holdings lagged, a movement away from perceived AI casualties to potential AI winners and an increase in speculative activity. This drove gains in higher risk businesses that were not owned by the Company and, disappointingly, returns across the regions were behind their local small cap indices. Working with the Board, the Lead Manager is taking steps to address this relative underperformance. These actions are detailed in the Lead Manager’s Review.
| Geographical performance (total return sterling adjusted) | ||
| for the year ended 30 April 2026 | ||
| Portfolio | Local smaller companies index† | |
| North America | 21.5% | 38.6% |
| UK | 8.9% | 15.0% |
| Europe | 20.0% | 20.5% |
| Japan | 22.1% | 29.2% |
| Rest of World* | 27.1% | 35.9% (Asia Pacific ex Japan) 29.1% (Latin America) |
Source: Columbia Threadneedle Investments
*Performance of the Rest of World portfolio is shown here against both the Asian and Latin American smaller company indices.
†See Lead Manager’s Review in the Annual Report and Financial Statements
In recent years, discounts across UK investment trust companies have come under considerable pressure, driven by a combination of economic and geopolitical uncertainty, a continued shift towards passive, index-based global investment strategies and broader outflows from UK equity funds – particularly those focused on smaller companies. Over the last two years, the Company has attempted to tackle this issue by increasing the pace of its share repurchase programme and by committing more resources to PR initiatives and marketing with the aim of attracting demand for its shares from both existing and new investors. It was very pleasing to see some results from these efforts, with the Company’s discount narrowing from 11.0% at the start of the financial year to 5.4% on 30th April 2026.
The chart on page 11 of the Annual Report and Financial Statements illustrates the Company’s discount (and premium) over the last 10 years and that of the wider investment trust sector.
The Board and Company are committed to improving shareholder returns further, through taking several steps to address relative performance and by judiciously allocating capital to share repurchases and brand initiatives with the purpose of raising the Company’s rating.
Dividends
The companies in the portfolio continue to deliver healthy levels of income as a result of their cash generative nature. Consequently, the Board has decided to recommend the payment of a final dividend of 2.45p per share, meaning the full year payment will be up by 5.0% to 3.15p per share. This will be paid to shareholders on 18 September 2026 and will be the 56th consecutive year of increases in the Company’s dividend.
Share Repurchases and Gearing Policy
The Board continues to believe that a consistently applied approach to share buy-backs is in the best interests of shareholders, supporting liquidity for those in need of an exit along with NAV accretion to remaining holders. 29.1m shares (representing 6.5% of the Company’s share capital at the start of the period) were bought back in the financial year (2025: 47.3m), across some 179 trading days, enhancing the NAV per share by 0.7% in the process.
The Board remains of the view that making use of our borrowing powers over the long term will serve to enhance shareholder returns as markets rise over time. The Manager is also able to make use of the Company’s borrowing facilities to take advantage of new investment opportunities and for funding buy-backs without being forced to make immediate, simultaneous disposals. At the end of the financial year, effective gearing was 2.5% compared to 5.3% a year earlier, reflecting higher stock market levels. Borrowings were made up of £35m 2.26% sterling loan notes maturing in 2039 and £15.7m of drawings in US dollars, Yen and Euros under our revolving credit facility. Given the predominantly fixed rate nature of the debt, our borrowing costs remain low.
Costs
Ongoing charges (excluding the underlying costs of collective holdings) for the year increased slightly, moving from 0.62% to 0.63%. Ongoing charges including the costs of collective holdings were 0.78% (2025: 0.74%). We are pleased to report that these remain low compared to many smaller company funds in the market.
Responsible Investment
Your Company seeks to operate with high standards of governance. In order to maintain freedom to invest in businesses operating in a wide range of sectors on a global basis, it does not specifically designate itself as being bound by rigid Environmental, Social and Governance (‘ESG’), Sustainability or Impact investing criteria. As part of its overall risk management process, the Manager nevertheless integrates the consideration of financially material environmental, social, and governance factors into its research and investment process and encourages stronger ESG practices to be adopted by issuers through its engagement and voting activities. Some examples of this are outlined in the section on Responsible Investment on pages 25 to 29 of the Annual Report and Financial Statements.
Board Changes
On Anja Balfour’s retirement from the Board at the close of our Annual General Meeting on 15th August 2025, I became Chairman of the Board and Chairman of the Nomination Committee. Bulbul Barrett was appointed Senior Independent Director.
Cancellation of the Share Premium Account and Capital Redemption Reserve
Following approval from shareholders at its Annual General Meeting held on 15th August 2025, the Company completed the court process required to cancel its share premium account and capital redemption reserve. These reserve accounts were non-distributable. Cancelling them has created additional distributable reserves, providing the Company with additional flexibility, if required, to fund future share buybacks, dividends and other returns of capital in accordance with applicable law. This increase in our distributable reserves became effective on 4th December 2025.
Change of Corporate Broker
During the year, on 5th December 2025, the Board appointed Investec Bank plc as the Company’s sole corporate broker in place of Stifel Nicolaus Europe Limited.
Change of Benchmark
In April 2026, the Board of the Company announced that, following a review of its performance measurement framework, the Company’s Benchmark would change to the MSCI ACWI Small Cap Index Net in GBP, with effect from 1st May 2026, the commencement of the Company’s next financial year. Up until the end of this reporting period, the Company’s Benchmark has been a blend of two indices, namely the MSCI All Country World ex UK Small Cap Index (80% (net)) and the Deutsche Numis UK Smaller Companies (excluding investment companies) Index (20%). This Benchmark change better represents the current composition of the global smaller company equity market, given that the UK is now a much smaller percentage of total world stock market capitalisation. It also reduces complexity and increases clarity in our reporting to shareholders.
Annual General Meeting
The Annual General Meeting will take place at Chartered Accountants’ Hall, 1 Moorgate Place, London EC2R 6EA on Tuesday, 15th September 2026 at 12.00 noon. We hope as many shareholders as possible will attend. Nish Patel, the Lead Manager, will give a review of the year together with his view on the outlook. We will also be streaming the meeting live on the internet so that those shareholders who cannot attend in person will be able to view the proceedings. The live stream can be accessed by registering here: https://www.investormeetcompany.com/the-global-smaller-companies-trust-plc/register
Voting on all resolutions at the AGM will be conducted by way of a poll, the results of which will be announced and posted on the Company’s website following the meeting. You are therefore encouraged to lodge your votes prior to the meeting by completing your form of proxy or form of direction in accordance with the instructions shown.
Shareholders who are unable to attend the AGM are requested to submit any questions they may have with regard to the resolutions proposed at the AGM or the performance of the Company in advance of the meeting to [email protected].
Following the AGM, the Lead Manager’s presentation will be available on the Company’s website at www.globalsmallercompanies.co.uk.
Outlook
Despite a challenging backdrop of geopolitical tensions, rising inflationary pressures, elevated interest rates and concerns over government deficits, the global economy has shown considerable resilience and corporate earnings growth has, in aggregate, remained healthy. Higher asset prices, strong corporate and household balance sheets, significant investment in AI and stimulus programmes across various parts of the world have all played a role in sustaining economic momentum.
However, the persistence of each of these supporting factors remains uncertain, and as a consequence the range of potential future outcomes is wide. The key debates amongst investors at present are whether the substantial capital being deployed into AI will ultimately generate adequate returns, the future direction of inflation and the likely response by monetary authorities, rising geopolitical tensions and their significant potential economic ramifications, and how governments will address the challenge of large and growing fiscal deficits.
In such an uncertain and fragile environment, I believe shareholders can take comfort in the high quality, attractively valued portfolio of businesses that the Manager has assembled – one that is well positioned to navigate the inevitable challenges that the coming year may bring. We remain focused on delivering long-term value for shareholders and believe with the changes made that the Company is well placed to do so.
Graham Oldroyd
Chairman, The Global Smaller Companies Trust
25 June 2026
