BlackRock Greater Europe Investment Trust plc
LEI: 5493003R8FJ6I76ZUW55
Annual Report and Financial Statements 31 August 2026
Performance record
[][][][][][][]
As at As at Change
31 August 31 August %
2026 2025
Net assets (£'000)[1] 577,179 569,079 +1.4
Net asset value per 643.30 598.05 +7.6
ordinary share
(pence)
Ordinary share price 610.00 570.00 +7.0
(pence)
Reference index[2] 2975.23 2461.90 +20.9
Discount to cum 5.2% 4.7%
income net asset
value[3]
========== ========== ==========
Performance (with For the For the For the For the
dividends reinvested) year year period period
ended ended since since
31 August 31 August inception[4] inception[4]
2026 2025 to 31 August to 31 August
2026 2025
Net asset value per 8.8% -6.1% 817.3% 742.7%
share[3]
Ordinary share price 8.4% -3.9% 782.1% 714.0%
Reference index[2] 20.9% 10.9% 652.3% 522.5%
========== ========== ========== ==========
[]
For the For the year ended Change
year ended 31 August %
31 August 2025
2026
Revenue
Net profit after 8,069 6,684 +20.7
taxation (£'000)
Revenue earnings per 8.74 6.89 +26.9
ordinary share
(pence)[5]
Dividends (pence)
Interim dividend 1.75 1.75 -
Final dividend 6.25 5.40 +15.7
---------- ----------------- -----------------
-------
Total dividends 8.00 7.15 +11.9
payable/paid
========== ========== ==========
[1] The change in net assets reflects payments for shares repurchased into
treasury, portfolio movements and dividends paid.
[2] FTSE World Europe ex UK Index.
[3 ]Alternative Performance Measures, see Glossary contained within the
Annual Report and Financial Statements.
[4] 20 September 2004.
[5] Further details are given in the Glossary contained within the Annual
Report and Financial Statements.
Chairman's Statement
Dear Shareholder
I am pleased to present the Company's Annual Financial Report for the year ended
31 August 2026.
Overview
The Company's net asset value per share (NAV) returned +8.8% and the share price
+8.4%. In comparison, the FTSE World Europe ex UK Index (the Company's reference
index) returned +20.9% (all percentages calculated in Sterling terms with
dividends reinvested).
1 year change % 3 year change % 5 year change % 10 year change %
NAV per 8.8 18.9 0.5 156.3
share
Share 8.4 20.2 -6.3 158.6
price
Reference 20.9 55.2 59.1 173.4
index
All performance returns in the table above are in Sterling terms with dividends
reinvested.
Sources: BlackRock and LSEG Datastream.
This disappointing relative performance primarily reflects a continued
challenging environment for quality growth investing. Stock selection has also
been a negative factor. As I commented in the interim report, having reflected
on more recent poor performance, and after discussion with the Board, our
Manager has refined the investment approach to place greater emphasis on the
price paid for quality investments, whilst continuing to focus on quality
companies with good long-term growth potential. Following his appointment on 31
March 2026, Benjamin Moore has also broadened the range of companies considered
for investment, including businesses and industries where returns are improving,
and has made changes to the portfolio to reflect this. Relative performance in
the second half of the year has improved, and the portfolio has outperformed
since Benjamin's appointment. More details on this and the significant
contributors to and detractors from performance during the year are given in the
Investment Manager's Report below.
Following the thorough review of the Company's investment approach the Board
undertook a comprehensive review of the Company's strategic positioning with the
objective of enhancing shareholder returns, improving marketability and
strengthening the long-term investment proposition.
Strategic initiatives
The Company offers actively managed, focused and unconstrained exposure to
Europe, differentiating it from more index aware and passive strategies.
Following feedback from shareholders and consultation with its advisors, the
Board has approved a package of initiatives designed to make better use of the
advantages of the investment trust structure while maintaining the Company's
established high-quality growth-oriented investment approach.
These initiatives include:
i) the introduction of an enhanced dividend policy equivalent to 4.5% of the
Company's NAV per year (with a commitment to increase the dividend in absolute
terms to ensure the dividend grows each year) to broaden the Company's appeal to
income-seeking investors;
ii) a change of name to BlackRock European Growth & Dividend Trust plc to
reflect the Company's enhanced dividend policy;
iii) a reduction in management fees which will reduce the overall cost of
investing in the Company;
iv) a new 5-year performance-linked tender offer designed to provide
shareholders with a partial exit opportunity should they not be satisfied with
the Company's performance; and
v) a more strategic use of gearing to capitalise on investment opportunities,
delivered by derivatives to reduce cost.
Collectively, these initiatives are intended to enhance shareholder outcomes,
broaden the Company's appeal to a wider investor audience and support a growing
share price for the Company's shares.
More information on each of these initiatives is set out below and in the
Strategic Report contained within the Annual Report and Financial Statements.
Revenue earnings and dividends
Your Company's total revenues each year reflect the dividends we receive from
portfolio companies. The revenue return per share for the year ended 31 August
2026 amounted to 8.74p per share, which compares with 6.89p per share for the
previous year, a substantial increase of 26.9%. Shareholders should note that
underlying portfolio earnings can be volatile and may vary year to year, and the
current year increase is not necessarily indicative of future trends.
In May the Board declared an interim dividend of 1.75p per share (2025: 1.75p)
and the Board is proposing the payment of a final dividend of 6.25p per share
for the year (2025: 5.40p). This, together with the interim dividend, makes a
total dividend for the year of 8.00p per share (2025: 7.15p), an increase of
11.9%. The Company has now delivered more than 20 consecutive years of dividend
growth to its shareholders, making the Company an AIC Dividend Hero. This also
reflects the resilience of the Company's underlying portfolio and its focus on
companies with durable competitive advantages and quality management teams
committed to long-term value creation. The dividend will be funded from revenue
received in the year. Subject to shareholder approval, the dividend will be paid
on 18 December 2026 to shareholders on the Company's register on 20 November
2026, the ex-dividend date being 19 November 2026.
Enhanced dividend policy
The Board remains committed to maintaining the Company's AIC Dividend Hero
status through a progressive dividend policy. The Board also recognises the
importance of income to its shareholders and therefore is introducing a new
enhanced dividend policy under which the Company will target an annual dividend
equivalent to 4.5% of the Company's NAV at the preceding financial year end (31
August), payable in four quarterly instalments. The Board is committed to
increasing the dividend in absolute terms to ensure the progressive nature of
the policy. The Board's intention is to make three equal interim dividend
payments in March, June and September each year. It will then declare a final
dividend for the full year (payable in December) reflecting the final amount
required to ensure an appropriate level of full year dividend. The Board
believes that the introduction of an enhanced dividend, whilst also maintaining
a progressive dividend, will allow the Company to appeal to a wider audience of
income-seeking investors and use one of the key advantages of the investment
trust structure. For investors that would prefer to focus on capital growth,
the Company offers a Dividend Reinvestment Scheme which offers shareholders the
option to request that their dividends be reinvested and used to purchase
further shares in the Company; more information can be found in the shareholder
information section contained within the Annual Report and Financial Statements.
It is important to emphasise that the implementation of an enhanced dividend
policy will not influence the investment decisions made by the portfolio
managers. Instead, the Company's investment trust structure (with the ability to
distribute from capital) will be used to maintain dividend progression, allowing
the portfolio managers to remain unconstrained by income targets and continue to
focus on quality growth companies capable of delivering attractive total
returns.
Reduction in management fee
I am pleased to report that, following a further review of management fees and
engagement with BlackRock, the Board reached an agreement to reduce the
Company's management fee arrangements. With effect from 1 September 2026, the
Company's annual management fee, which is payable quarterly in arrears, will be
reduced to a new fee of 0.60% of net assets up to and including £400 million,
0.55% of net assets in excess of £400 million up to and including £1 billion and
0.525% of net assets in excess of £1 billion. Previously, the management fee was
0.65% of net assets up to and including £400 million, 0.60% of net assets in
excess of £400 million up to and including £1 billion and 0.525% of net assets
in excess of £1 billion. The revised fee will result in a reduction in the
Company's ongoing charges ratio, which is estimated to fall to 0.75% post
implementation, based on the Company's net asset value at 31 August 2026.
Conditional Tender Offer
The Board has agreed to introduce a new performance-linked conditional tender
mechanism, designed to strengthen accountability to shareholders and provide a
clear potential route to liquidity in the event of sustained investment
underperformance. This is in addition to the Company's existing semi-annual
discretionary tender offers.
Under the new mechanism, the Company's NAV total return will be measured against
the FTSE World Europe ex UK Total Return Index (GBP) over a 5-year period ending
in the 2031 financial year. The Board considers a 5-year time horizon a
reasonable period over which the new management approach should be assessed
while providing shareholders with a clear liquidity option in the event of
further sustained underperformance. If the Company underperforms the reference
index over that period, shareholders will be offered the opportunity to tender
up to 25% of the Company's issued share capital at a 2% discount to the
prevailing NAV, subject to the necessary shareholder approvals and applicable
legal and regulatory requirements at that time.
Strategic use of gearing
The Board has determined that the Company should make more strategic use of
gearing, where appropriate, as part of its broader capital allocation framework.
With this in mind, the Company will now target a baseline gearing level of c.10%
in market environments where earnings are growing and increase this when the
team see market dislocations leading to mispricing of quality assets. Gearing
will be reduced in scenarios where earnings risk is materially heightened, with
the investment manager having the flexibility to hold net cash up to 15% of the
portfolio to the extent the portfolio managers wish to take risk off. The
current gearing range of 0-15% remains unchanged and in normal market
circumstances the Company would be at least fully invested.
The Board believes that gearing is an important structural advantage available
to investment trusts and, when used in a disciplined and considered manner, has
the potential to enhance long-term shareholder returns. The use of gearing will
continue to be carefully monitored by the Board and the portfolio management
team, taking into account market conditions, portfolio opportunities and the
overall risk profile of the Company.
In addition, the Board has agreed to amend the Company's investment policy to
permit the use of derivatives for the purposes of obtaining leverage to
capitalise on investment opportunities. This is in addition to the existing
permissions contained within the investment policy to use derivatives for
efficient portfolio management. The Board is making this change in recognition
that (given the Company's structure and investment mandate) obtaining leverage
through total return swaps is more efficient and flexible and is significantly
cheaper than doing so through a conventional bank overdraft. More information
can be found within the Strategic Report contained within the Annual Report and
Financial Statements.
Management of share rating
Over the year to 31 August 2026, the Company's shares have traded at an average
discount of 5.9%. During the year, the Company purchased 5,434,110 ordinary
shares at an average price of 582.95p per share (representing 5.8% of shares in
issue excluding treasury shares) and an average discount of 5.9% and for a total
cost of £31,815,000. Since the year end and up to 29 October 2026, a further
982,297 ordinary shares have been bought back at an average price of 583.02p per
share for a total cost of £5,727,000. All shares have been placed in treasury.
This buy back activity was considered successful in dampening the Company's
discount volatility through the period, and hence the Board concluded that it
was not in the interests of shareholders as a whole to implement the semi-annual
tender offers for up to 20% of share capital in May and November 2026.
The Board will also use the Company's share issue powers if required to ensure
that the share price does not trade at an excessive premium to the underlying
NAV and to allow the Company to grow, thereby increasing liquidity and improving
its Ongoing Charges. The Directors recognise the importance to investors that
the market price of the Company's shares should not trade at a significant
premium or discount to the underlying NAV. Accordingly, in normal market
conditions, the Board may use the Company's share buy back and share issue
powers, or operate six monthly tender offers, to ensure that the share price
does not go to an excessive discount or premium to the underlying NAV.
Resolutions to renew the Company's semi-annual tender offers and the authorities
to issue and buy back shares will be put to shareholders at the forthcoming
Annual General Meeting.
Amendments to the Company's Articles
The Directors are proposing amendments to the Company's Articles of Association
to strengthen governance and support informed shareholder decision-making. The
principal purpose of the amendments is to ensure that, where a proposed
investment manager has a significant existing interest in the Company, or is
associated with a shareholder who does, shareholders are provided with
appropriate information and any decision regarding that appointment is
determined by shareholders who are independent of the relevant conflict of
interest. This amendment does not restrict the Board's right to appoint or
replace an investment manager. Rather, it is intended to ensure that decisions
affecting the Company's management arrangements are taken transparently and in
the interests of shareholders as a whole.
The other material amendment seeks to ensure that there is a clear procedure in
the event that there are insufficient directors (fewer than three), following
directors failing to be reappointed at a general meeting or following directors
being removed at a general meeting. In this instance, sufficient of the outgoing
directors will be automatically reappointed, solely for the purpose of
appointing sufficient new directors following which they will resign. The new
Articles also increase the minimum number of Directors from two to three and
also include other non-substantive tidy-up and clarificatory amendments. More
information is set out in the Directors' report contained within the Annual
Report and Financial Statements. The Directors believe that these measures are
consistent with good corporate governance, enhance the integrity of shareholder
decision-making and are in the best interests of shareholders as a whole. The
Directors unanimously recommend that all Shareholders vote in favour of
Resolution 17 at the AGM.
Changes to portfolio manager
It was with sadness that the Board announced on 31 March 2026 that Stefan Gries,
Lead Portfolio Manager, would retire from the industry to focus on treatment and
recovery following personal health issues. Having served as portfolio manager
for the Company since 20 June 2017, Stefan had worked tirelessly to deliver
excellent long-term returns for shareholders during his tenure. The Board thanks
Stefan for his contribution and wishes him well for the future and his recovery.
Benjamin Moore, a Managing Director within BlackRock's European Fundamental
Equity team, took over as Lead Portfolio Manager, bringing 11 years of
experience at Columbia Threadneedle, including six years as Lead Portfolio
Manager for the CT European Select Fund. He began his career in equity research
at Goldman Sachs covering European mid-cap companies. Benjamin is supported by
Brian Hall as co-Portfolio Manager on the portfolio, and both are supported by
the 22-strong BlackRock European Fundamental Equity team. Benjamin has a strong
track record built on a quality growth style, similar to that employed by the
Company, seeking quality companies which can grow over the long term, while
sustaining attractive economics thanks to robust competitive advantages.
Benjamin's investment approach brings a greater emphasis on the price paid for
quality investments, alongside a willingness to consider businesses or
industries where returns are improving, thanks to factors such as operational
transformation, improved capital allocation or market consolidation. This
broadens the range of potential investments while maintaining a strong focus on
quality. The Board supports this approach and believes it aligns well with the
goal of dampening fund volatility and enhancing returns for our shareholders
over time.
Russian exposure
At present, the dividends paid from the Russian securities in the Company's
portfolio are held in a frozen custody account in Moscow and cannot currently be
repatriated back to the UK. The balance as at 31 August 2026 was equivalent to
approximately £2.5 million at the exchange rate applicable on that date. As
there is significant uncertainty that these sums will ever be received by the
Company, they are not recognised in the Company's net asset value or in its
income statement.
The Board also monitors the underlying local value of the Russian securities on
the Moscow Stock Exchange which at 31 August 2026 were approximately £21.9
million at the exchange rate applicable on that date, although again there is
much uncertainty of these values ever being realisable by the Company. These
investments have been held at a nominal value of £0.01 in the net asset value at
31 August 2026.
Board composition
Having served as a Director since April 2015 and as part of the Board's
succession planning, Peter Baxter will retire as a Director of the Company
following the Annual General Meeting in December 2026 and, accordingly, will not
be seeking re-election. The Board would like to express its strong appreciation
for Peter's wise counsel and invaluable contribution to the Company.
During the year, the Board commenced a search to identify a new Director and (as
previously announced) is delighted to welcome Stephen Russell to the Board.
Stephen joins with effect from 2 November 2026 and will stand for election at
the forthcoming Annual General Meeting. He has over 40 years of experience as a
multi-asset fund manager, investment strategist, analyst and non-executive
director, with extensive knowledge of the investment trust sector. He was co
-founder and manager of the Ruffer Investment Company and has served as a non
-executive director for over 20 years. He also held senior management roles at
HSBC and SLC Asset Management. He retired as a non-executive director of
JPMorgan European Investment Trust plc in 2021. Stephen is currently a non
-executive director of F&C Investment Trust plc and Aberdeen UK Smaller
Companies Growth Trust plc.
Shareholder engagement
Given the changes in the management of the portfolio during the year, the Board
has placed considerable emphasis on refining the Company's messaging around
portfolio management changes and how the co-portfolio management structure
operates. Significant resource was directed towards face-to-face meetings,
presentations and adviser updates to highlight the evolution of the Company's
strategy and the quality and significant resource of BlackRock's award-winning
European team. The Board increased its engagement with wealth managers, advisers
and major shareholders and encouraged extensive engagement programmes. The Board
also focused on measures to improve engagement with and demand from self
-directed retail investors. Website improvements, enhanced digital marketing,
webinars, Investor Meet events, shareholder mailings and improved "Reasons to
Invest" content were all aimed at strengthening retail engagement and are
continuing to be developed.
Shareholder communications
The Board appreciates how important access to regular information is to our
shareholders. To supplement our website, we offer shareholders the ability to
sign up to the Trust Matters newsletter which includes information on the
Company, as well as news, views and insights. Further information on how to sign
up is included on the inside cover of the Annual Report and Financial Statements
and via the link https://go.blackrock.com/it-subscribe.
Outlook
Since the financial year end and up to close of business on 29 October 2026, the
Company's NAV has decreased by 5.6% compared with a fall in the reference index
of 3.4% over the same period.
In their outlook, the portfolio managers outline the compelling opportunity that
they perceive in quality European companies. Europe remains home to many world
-class franchises including, but by no means restricted to, companies owning
core technologies that make them the enablers of some of the large
transformational changes going on around us. Benjamin and Brian bring a greater
awareness that quality is not a static label and that long-term investors also
need to adapt to changing circumstances. The resultant changes to the portfolio
mean that, at the time of writing, we are positioned to take advantage of
opportunities across semiconductors, electrification, banks, defence, select
industrials and civil aerospace, as well as some defensive assets within
healthcare. Our portfolio managers believe that the backdrop for European
quality growth companies is becoming increasingly supportive, notwithstanding
the current geopolitical and interest rate environment, with the relative
underperformance of European companies leaving many businesses trading on
attractive valuations. We believe this disconnect creates a favourable
environment for quality growth companies to recover performance when investors
focus on fundamentals.
Annual General Meeting (AGM) arrangements
The Annual General Meeting of the Company will be held in person at the offices
of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 10 December
2026 at 12 noon. Details of the business of the meeting are set out in the
Notice of Annual General Meeting within the Annual Report. The Board very much
looks forward to meeting shareholders and answering any questions you may have
on the day.
For the benefit of shareholders who are unable to attend this year's AGM in
person, we have arranged for the proceedings to be viewed via a webinar. You can
register to watch the AGM by scanning the QR Code inside the cover of the Annual
Report or by visiting our website at www.blackrock.com/uk/brge and clicking on
the registration banner.
Please note that it is not possible to speak or vote at the AGM via this medium
and joining the webinar does not constitute attendance at the AGM. Shareholders
wishing to exercise their right to attend, speak and vote at the AGM should
either attend in person or exercise their right to appoint a proxy to do so on
their behalf. For further details please refer to the Annual Report.
Andrew Impey
Chairman
2 November 2026
Investment Manager's Report
Key takeaways
· A challenging market backdrop: European equities rose strongly over the
period, but the companies leading the market changed rapidly. Often, share price
moves were driven by high-level themes such as geopolitics and AI, rather than
the prospects of individual businesses. Moreover, quality companies remained out
of favour and their valuations fell despite generally performing well.
· Stock-level performance was mixed: Company-specific issues and concerns
about disruption from AI hurt the performance of some holdings. By contrast,
semiconductor equipment companies, European banks and defence stocks were among
the strongest contributors.
· The portfolio has evolved, but quality remains at its core: We believe
quality equities have the power to compound attractive returns for investors
over the long term. However, we must not be complacent about how we assess
quality against a changing backdrop. We have broadened the range of companies
considered for investment and placed greater emphasis on the price paid, while
continuing to favour well-run businesses, with enduring competitive advantages
and the ability to deliver improving returns. Early results have been
encouraging, with the Company outperforming its reference index since Benjamin
Moore's appointment as Lead Portfolio Manager.
· A compelling opportunity emerging in quality: Quality valuations have
reset despite continued improvements in earnings and business performance for
many businesses. We believe this dislocation is creating unusually attractive
investment opportunities today.
· Improving European fundamentals underpin our constructive outlook: Key
areas of conviction reflected in the portfolio include electrification, civil
aerospace, selected semiconductors and AI infrastructure, European banks and a
new generation of stocks with defensive characteristics.
Market review
For the year ended 31 August 2026, the share price of the Company rose 8.4%,
while the net asset value per share rose by 8.8%. The reference index gained
20.9% over the same period. All percentages are in Sterling terms with dividends
reinvested.
While the Company delivered a positive absolute return over the year, we are
disappointed to have underperformed the reference index. The market backdrop
remained particularly challenging for the Company's investment style, with many
of the conditions that have weighed on quality-growth investing in recent years
continuing through the period.
Despite the challenging environment, we retain conviction in the potential for
quality equities in a long-term portfolio. We believe businesses with structural
long-term growth opportunities, strong profitability and cash generation, and
durable competitive advantages have the ability to compound their earnings over
many years, and that this will ultimately be the most meaningful driver of share
price returns. Identifying these businesses requires a deep understanding of
their fundamentals and the price one should pay for them. Our research therefore
focuses on assessing the quality and durability of a company's earnings,
including its management, competitive positioning, market dynamics and revenue
drivers, alongside detailed analysis of its financial statements and valuation.
This allows us to look beyond shorter-term market noise and focus on the
fundamental driver of long-term returns.
At the same time, we recognise that the backdrop for quality-growth investing
has changed, requiring us to consider how these beliefs should be reflected in
how we manage the portfolio today. This has been an important focus since
Benjamin Moore joined the Company as Lead Portfolio Manager on 31 March 2026.
While closely aligned with the Company's existing philosophy, Benjamin has
placed greater emphasis on the price paid for quality investments (employing
greater valuation discipline) and brought a willingness to consider businesses
where returns are improving through operational change, better capital
allocation or industry consolidation. This has been an opportunity to reassess
our long-term convictions and introduce new holdings in excellent, well-priced
businesses. We are encouraged by the early impact of these changes: while six
months is a relatively short period, the Company's NAV outperformed the
reference index by +4.1% between Benjamin's appointment on 31 March and 30
September 2026.
Three features of the market were particularly important in the Company's
relative performance over the full year. First, while value shares enjoyed
further strong gains, often from rising valuations as opposed to improving
fundamentals, the valuations of quality-growth companies continued to fall. The
Company's style bias to quality-growth stocks continues to be the greatest
detriment to active returns, followed by stock selection. Second, markets were
increasingly driven by macro themes - from geopolitics and tariffs to defence
spending and artificial intelligence - which regularly overwhelmed the
underlying earnings delivered by individual companies. Third, these themes
contributed to unusually severe and rapid market rotations, with investors
moving quickly between different styles, sectors and themes, at odds with the
long-term nature of the Company's fundamental strategy.
The most persistent challenge was the continued fall in quality company
valuations, even where earnings remained resilient. Conversely, value shares
continued to perform strongly, in some cases through investors being willing to
pay increasingly high valuations without a corresponding change in future
earnings. This dynamic was particularly pronounced in November 2025, as a
rotation away from quality was driven less by a change in the fundamental
outlook and more by how investors were positioned and where money was moving.
Investors unwound previously well-owned quality and growth exposures in favour
of value and higher-volatility stocks. There was little clear, economic
rationale for this.
The second defining feature of the year was the extent to which macro themes
dictated market returns. Tariffs, fiscal stimulus, defence spending, geopolitics
and AI repeatedly shaped investor sentiment, often having a greater influence on
share prices than the earnings being delivered by individual companies.
Investors who focus on individual company fundamentals found the market
difficult to navigate.
Companies could report robust results and improving outlooks, but still see
their shares move primarily according to their perceived exposure to the
prevailing market narrative. The treatment of perceived AI `losers' was a clear
example, with software, payments and information-services companies coming under
pressure on fears of future disruption even where there was limited evidence of
any impact on current earnings. While we have been pragmatic in responding where
we believe the balance of risks has changed, our investment decisions remain
grounded in the long-term earnings and cash-flow prospects of individual
businesses rather than predicting which narrative will dominate markets next, as
we ultimately believe share prices follow earnings.
A related, but distinct, challenge was the severity and speed of market
rotations. Market leadership could reverse abruptly as expectations changed,
producing substantial moves across entire sectors and styles in a matter of
days. Severe rotations were particularly acute around geopolitical developments
and, later, the AI investment cycle. The escalation of conflict involving Iran
drove oil prices sharply higher in March, triggering a sell-off in European
equities on concerns around inflation, higher input costs and weaker economic
growth.
Rather than reacting to the initial market moves, we focused on stress-testing
the portfolio against a sustained elevated oil price. Using our own in-house
analysis across our European investment team, we assessed the impact sector by
sector and company by company. This work, alongside discussions with management
teams, highlighted how many European businesses had strengthened their supply
chains and reduced their vulnerability to energy shocks in recent years. This
gave us confidence to look through much of the short-term volatility, with many
of the areas initially affected subsequently recovering as oil prices fell.
July provided another example, as concerns around the sustainability of AI
investment triggered a sharp reversal across semiconductors and data-centre
infrastructure. We responded by reassessing our exposure stock by stock,
assessing new risks arising from rapid AI innovation against the adoption,
demand for computing power and company earnings signals we monitor. With these
fundamentals remaining strong, we maintained our conviction in the semiconductor
opportunity.
Despite these challenging market dynamics, the fundamental picture in Europe
became increasingly encouraging as the year progressed. The second quarter 2026
reporting season delivered the strongest headline earnings growth in many years,
with the ratio of companies beating expectations versus missing close to the
highest since Covid-19 and earnings per share growth reaching 14% year-on-year.
Earnings strength extended across semiconductors, electrical infrastructure,
civil aerospace and banks - all of which are key themes in the portfolio.
There remains some unevenness beneath these headline numbers, with structurally
supported areas performing considerably better than more subdued consumer and
industrial end-markets. Market leadership has consequently remained relatively
narrow. Nevertheless, we believe the broad improvement in European earnings is
important. Ultimately, it is earnings and cash-flow growth that create value for
shareholders, and a market increasingly supported by improving corporate
fundamentals should provide a healthier backdrop for active stock selection.
Portfolio performance
Top five stock detractors to performance
Stock Sector Country Average Total Attribution
Active Return Effect
Weight* (%) (%) (%)
Adyen Industrials Netherlands 1.4 -27.8 -1.9
RELX Industrials United 1.9 -19.4 -1.6
Kingdom
Nemetschek Technology Germany 0.8 -40.4 -1.4
Belimo Industrials Switzerland 3.2 -2.7 -1.2
MTU Aero Industrials Germany 2.6 -7.6 -1.1
Engines
Top five stock contributors to performance
Stock Sector Country Average Total Attribution Effect
Active Return (%)
Weight* (%)
(%)
BE Technology Netherlands 3.2 69.0 1.5
Semiconductor
Allied Irish Financials Ireland 3.3 67.5 1.3
Banks
CaixaBank Financials Spain 2.4 60.6 0.7
Novo Nordisk Healthcare Denmark -1.4 -15.7 0.6
UniCredit Financials Italy 0.5 32.1 0.6
* Active weight is the difference between portfolio weight and reference index
weight.
Source: BlackRock.
At a stock level, the largest detractors reflected a combination of the market
dynamics discussed above and more company specific developments. The adoption of
generative AI created significant pressure for several holdings perceived by the
market to be at risk of disruption, most notably RELX (information and
analytics), Nemetschek (construction design software), SAP (enterprise software)
and Adyen (payments technology). While these companies were increasingly traded
as a common group of perceived `AI losers', the underlying fundamental picture
was more nuanced. For RELX and Nemetschek in particular, we continued to see
resilient trading and limited evidence that AI was disrupting current earnings.
Nemetschek, for example, reported 17% year-on-year constant-currency growth in
January, 4% ahead of market expectations. However, the market's concern centred
on the longer-term risk that AI could replicate elements of the services these
businesses provide, which had previously been protected by durable competitive
advantages.
There were also instances where the fundamental picture became less supportive.
SAP's cloud backlog fell short of increasingly elevated expectations, while
Adyen slightly reduced its 2026 revenue-growth guidance. In both cases, the
market had little appetite for disappointment against a backdrop of heightened
fears around AI replacing existing products or services, amplifying the share
-price reaction. Given these market dynamics, we recognised the need to take a
sensible and pragmatic approach. Even when companies continued to deliver strong
results, this was not enough to change the market's concerns around AI
disruption, and we also had to recognise the genuine unknowns around how AI will
develop and ultimately reshape these industries, impacting visibility. We
therefore reduced these exposures significantly and ultimately exited Adyen,
RELX and Nemetschek, while retaining only a small position in SAP by the end of
the period.
Belimo, a Swiss manufacturer of heating, ventilation and air conditioning (HVAC)
control systems, was another notable detractor, despite delivering exceptional
underlying results. Full-year organic sales grew 23% and return on capital
employed reached 36%. Growth accelerated through the fiscal year as demand from
data centres was complemented by an improvement in the core HVAC business.
However, this success had also driven expectations increasingly higher, setting
a demanding bar for the company to clear. As a result, strong earnings delivery
alone was not enough; the market was increasingly looking for guidance upgrades
to justify the growth already reflected in the valuation, and shares came under
pressure when these were not produced. We continue to see strong structural
demand from data-centre cooling and energy efficiency, where Belimo's specialist
technology and leading position in the control of heating, ventilation and
cooling systems provide a differentiated way to benefit from the increasingly
complex cooling requirements of data centres. We remain mindful of the valuation
demanded and in turn have reduced the position accordingly.
MTU Aero Engines, a German aircraft engine manufacturer, was another detractor
despite continued strength in the underlying business. Demand for engine
servicing remained robust, with earnings ahead of expectations and guidance
upgraded through the year. However, shares came under pressure following the
escalation of conflict in the Middle East as higher oil and jet-fuel prices
raised concerns that airlines could reduce flying hours and defer engine shop
visits. Several months into the conflict, we have yet to see these concerns
translate into the underlying businesses. MTU and its peers have reported no
material deterioration in trading, while feedback from across the industry
continues to point to strength in shop visits and maintenance demand. This
reflects the structural nature of aftermarket demand, where maintenance can be
delayed at the margin but ultimately cannot be avoided, particularly against a
backdrop of ageing fleets and constrained maintenance capacity.
ChemoMetec, a Danish manufacturer of cell counting and analysis equipment used
in life sciences, was also among the detractors after a more mixed year
operationally. Interim results were weaker than expected, reflecting disruption
from the US government shutdown as well as slower instrument sales as customers
took longer to validate new products. However, we believe the market reaction
overlooked an important development in the longer-term investment case. During
the year, ChemoMetec entered into a collaboration with Roche Diagnostics,
although the formalisation of the agreement took longer than initially
anticipated, pushing out some of the expected benefit. The agreement was
finalised in August and will integrate ChemoMetec's new XM30 cell counter with
Roche's established diagnostic platform, alongside a joint go-to-market
strategy. We see this as meaningful validation of ChemoMetec's technology and an
opportunity to accelerate adoption by gaining access to Roche's large existing
customer base.
BE Semiconductor was the largest individual contributor over the year. The Dutch
manufacturer of semiconductor assembly and packaging equipment benefitted from
accelerating investment in AI infrastructure and the increasing complexity of
the chips required to support it. In January, BE Semiconductor reported orders
up 43% quarter-on-quarter and 105% year-on-year, as customers increased capacity
to meet growing AI demand. The strength was also evident across the wider
semiconductor supply chain. ASML recorded its largest-ever booking quarter at
€13.2 billion, almost double market expectations of €7.0 billion, while later
results showed accelerating demand across both memory and logic chips and
prompted an upgrade to 2026 guidance. This provides tangible evidence that the
AI investment cycle is translating into real orders and earnings for the
companies supplying the infrastructure behind it. While the sharp reversal in
July demonstrated that sentiment around AI can change quickly, the underlying
demand signals we monitor regarding AI adoption rates and computing power demand
remained strong, supporting our continued conviction in the semiconductor
opportunity at present.
European banks were among the strongest contributors, with AIB, CaixaBank and
UniCredit delivering notable returns. The sector has continued to benefit from a
much healthier industry structure following a decade of consolidation and
balance sheet repair. Lending and deposit growth has returned, costs remain well
-controlled and credit quality has been resilient, while stronger balance sheets
have allowed significant capital to be returned to shareholders through
dividends and share buybacks. These trends were consistently reinforced through
reported earnings over the year. AIB reported interest and fee income ahead of
expectations, with better cost control contributing to profit before tax 5%
above expectations. CaixaBank grew its loan book by 8.2% year-on-year and first
-half profit by 8.5%, while UniCredit delivered record first-half results, with
loans and deposits growing 8%.
Kongsberg, a Norwegian defence and aerospace technology company, was another
positive contributor over the year, supported by evidence that the increase in
European defence spending is translating into demand for its products. The
company is particularly well-positioned in areas such as air defence and missile
systems, where the need to replenish inventories and rebuild European
capabilities extends well beyond the outcome of any single conflict. While the
shares were volatile as markets reacted to changing prospects for a ceasefire in
Ukraine, orders continued to run well ahead of revenues, providing increasing
visibility over future growth.
Novonesis, a Danish biotechnology company specialising in enzymes and
microorganisms for food, agriculture and industrial applications was also a
contributor, with an acceleration in the company's earnings towards the end of
the period. The company delivered 9% organic sales growth in the second quarter,
ahead of expectations, with strength broad-based across Food & Health, Household
Care and its industrial end-markets. This was particularly encouraging against a
softer consumer backdrop, demonstrating the value Novonesis can provide to
customers through biosolutions that improve productivity, reduce costs and
replace more expensive traditional ingredients. Management subsequently raised
its full-year growth guidance to 7-8% and announced a €1 billion share buyback
programme. We continue to see scope for Novonesis to grow ahead of its end
-markets as customers increase their adoption of biosolutions.
Portfolio changes
The period of greatest portfolio activity came following Benjamin Moore's
appointment as Lead Portfolio Manager on 31 March 2026. Benjamin's approach
remains focused on identifying quality companies, but with a greater focus on
the price to be paid for such assets. We reduced exposure to companies facing
potential AI disruption, as mentioned above, while increasing exposure to
beneficiaries of AI investment, including semiconductor equipment companies ASML
and ASM International. We also broadened industrials exposure through Airbus and
Leonardo in aerospace and defence, Legrand and ABB Group in data-centre
infrastructure, and Air Liquide as a more defensive industrial holding. These
additions were partly funded by reducing exposure to Consumer Discretionary
sector luxury goods companies significantly, including exiting LVMH and Hermès.
We retain less conviction in the industry, moving relative exposure to
underweight, as subdued Chinese demand and increasing local competition have
reduced the potential returns available from current valuations. While there is
limited visibility on the timing and strength of a cyclical recovery in Chinese
consumer spending, we also see more structural questions around the longer-term
growth outlook for European luxury brands, as Chinese domestic competitors gain
traction and challenge the historically dominant market positions of European
players.
Elsewhere over the year, European banks moved from an underweight to an
overweight position, reflecting our growing conviction in a sustained
improvement in returns. New holdings included ABN AMRO Bank and Intesa Sanpaolo,
alongside changes within existing bank positions.
We also broadened the portfolio into new sources of earnings growth, including
mining equipment through Epiroc. Lock manufacturer Assa Abloy was introduced as
a more defensive industrial holding, with around two-thirds of sales coming from
their aftermarket business, where demand is less dependent on new construction
and provides a more resilient earnings stream through changing economic
environments.
Capital continued to be recycled where our conviction changed. Luxury sports car
company Ferrari was exited following a disappointing Capital Markets Day, where
its longer-term growth targets fell short of our expectations and raised
questions around the valuation justified by the business. Thales was also sold
in favour of alternative defence names where we saw greater potential for
earnings upgrades.
Outlook
The broader macroeconomic outlook remains uncertain, in the context of
geopolitical risks, inflationary pressures, and a broad range of possible
outcomes as AI adoption ramps up. We are encouraged by the improving earnings
picture in Europe, however beneath the headline numbers there is a divergence
between sectors and stocks. This means selectivity will be key and should
benefit our focused investment style. Within the European market, our portfolio
is built around areas of structural growth, in niches where strong competitive
positions support attractive and durable returns.
We continue to expect a strong semiconductor cycle. With AI adoption in its
infancy, we think the duration and scale of the infrastructure buildout are
meaningfully underappreciated. Europe offers differentiated exposure to this
opportunity through some of the world's leading semiconductor and electrical
equipment companies and tool and component suppliers that represent critical
bottlenecks in the value chain. To these "picks and shovels" businesses, the
winners and losers of the AI race matter less than the scale of the buildout -
which we think far exceeds current expectations. Equally, we are mindful of the
risks associated with the scale and pace of investment. We are meticulous in
tracking data points and qualitative evidence coming from throughout the value
chain, and considering the impact on stocks held in the portfolio.
We also see a significant opportunity across electrification. While rapidly
growing power demand from data centres is adding a further driver of demand, the
opportunity stretches far beyond AI. Europe's electricity networks require
substantial modernisation after years of underinvestment, while the
electrification of industry and wider economy is placing increasing demands on
already constrained grid infrastructure.
Outside AI, we deliberately seek exposure to businesses whose earnings are
driven by different structural trends, providing diversification without
compromising on the quality of the underlying businesses.
Civil aerospace is one such area, where we see growing demand, high barriers to
entry, and strong capital returns. Constrained aircraft supply, an ageing global
fleet and an industry dominated by a small number of manufacturers support a
strong growth outlook with attractive economics in the sector.
European banks are another area of conviction. Years of reform, balance-sheet
repair and industry consolidation have created stronger businesses with
improving returns. Earnings are well-supported by loan growth, disciplined cost
control and capital returns, while we see AI-powered automation as an additional
driver of profit margins. We remain selective, favouring banks with stronger
structural growth or meaningful cost opportunities that can drive growth over
the coming years.
Finally, we are hunting for a new generation of defensives, as traditional
defensive sectors such as consumer staples and healthcare have rarely acted as
such in recent years. We favour businesses with predictable revenue streams and
demand that is less sensitive to the economic cycle. This includes areas
supported by recurring maintenance and servicing requirements, replacement
demand and other essential spending that is difficult for customers to defer.
This theme provides an important counterbalance to the portfolio's exposure to
more economically sensitive investments.
The Opportunity in Quality
After a difficult few years for quality investing, we believe the opportunity
ahead is increasingly compelling.
Periods of volatility and changing market leadership are a natural part of
investing through a business cycle. However, the headwinds that have faced
quality in recent years have gone well beyond these normal fluctuations. Higher
interest rates and changing market leadership have drawn investors away from
many of the quality businesses we favour. This has weighed on the Company's
performance, but it has also transformed the investible opportunities available
to us today.
In many cases, share prices have fallen despite sustained growth in the
underlying businesses' profits and cash flows. The premium investors pay for
quality companies relative to the wider market has fallen substantially and, on
some measures, reached levels rarely seen outside periods of sharp economic
recovery. Markets rarely move neatly from expensive to fairly valued. Just as
enthusiasm can push valuations too high, pessimism can push them too far in the
opposite direction. We believe the pendulum of quality valuations has now swung
beyond normalisation , creating opportunities to invest in strong and growing
businesses at unusually attractive prices.
Importantly, the appeal from here is not simply revisiting the same quality
stocks at lower prices. The opportunity set itself is evolving. Quality is not a
static label. It is built through management decisions, changing competitive
landscapes and the ability to sustain attractive economics. Some businesses can
lose these characteristics; others can grow into them.
European banks are a good example. Stronger balance sheets, healthier loan
books, consolidation, and a return to positive interest rates have transformed
the economics of parts of the sector. Banks with dominant competitive positions
can keep the cost benefits offered by technology, while balance sheet strength
allows for significant capital returns. Recognising these changes, we have added
selected banks to the portfolio over the past 18 months, and they have been
among the Company's strongest contributors.
For active investors, understanding this changing landscape is critical. A long
-term investment horizon cannot be a pretext for inaction when the facts change.
Just as we treasure adaptability in the management teams we invest with, we must
ourselves respond to changes in industry dynamics or company-specific
turnarounds.
Having invested in European equities through many different market environments,
we believe this is a particularly exciting time to be a quality investor. It is
rare to find so many strong businesses making good fundamental progress yet
valued cautiously by the market. An easing of this style headwind should provide
a more supportive backdrop following a difficult period for the Company. More
importantly, we believe the portfolio is well-positioned to capitalise on the
opportunities available today, giving us renewed optimism about the potential
for returns over the years ahead.
Benjamin Moore and Brian Hall
BlackRock Investment Management (UK) Limited
2 November 2026
Ten largest investments
Together, the Company's ten largest investments represented 41.7% of the
Company's portfolio as at 31 August 2026 (2025: 49.1%)
1 ▲ ASML (2025: 22nd)
Technology company
Market value: £55,896,000
Share of investments: 8.9%
ASML is a Dutch semiconductor equipment manufacturer with a unique position as
the sole supplier of extreme ultraviolet (EUV) lithography systems used to
manufacture the world's most advanced chips. Its differentiated technology and
critical role in advanced semiconductor production provide a strong competitive
position, with increasing chip complexity supporting sustained demand. At the
same time, accelerating AI adoption and increasingly compute-intensive
applications are driving greater investment in advanced logic and memory
capacity, providing a long-term structural growth opportunity.
2 ▼ Safran (2025: 1st)
Industrials company
Market value: £31,488,000
Share of investments: 5.0%
Safran supplies aircraft engines and equipment across civil aerospace and
defence, with a significant business servicing those products throughout their
operating lives. Operating in a specialised oligopolistic industry, Safran
combines technologically complex products with a long-term service business, as
its engines require maintenance and replacement parts throughout decades of
operation. This creates recurring revenues, long-lasting customer relationships
and strong visibility over future demand, while the transition to the newer
Leading Edge Aviation Propulsion (LEAP) generation engines provides a long
runway for this model to continue.
3 ▲ ASM International (2025: 24th)
Technology company
Market value: £24,336,000
Share of investments: 3.9%
ASM International (ASM) is a semiconductor equipment business specialising in
atomic layer deposition (ALD), a technology used to create the precise material
layers required in advanced chip manufacturing. Its strong position in ALD is
underpinned by decades of innovation, a broad technology portfolio and close
relationships with major manufacturers, creating a durable competitive
advantage. As advanced logic and memory chips become more complex, ASM's
technology becomes increasingly important to their production, supporting the
durability and visibility of demand.
4 ▲ Airbus (2025: n/a)
Industrials company
Market value: £23,669,000
Share of investments: 3.8%
Airbus is one of the world's major aerospace manufacturers with a strong
competitive position across commercial aircraft, helicopters and defence and
space systems. In commercial aircraft, Airbus operates in an effective duopoly,
reflecting the scale, technical expertise and investment required to compete in
the industry. Long aircraft programme cycles reinforce this position, while
strong demand for new aircraft has built a substantial order backlog. Continued
development of its aircraft portfolio, including new variants, provides an
additional opportunity to meet evolving airline requirements.
5 ▲ Siemens (2025: n/a)
Industrials company
Market value: £23,362,000
Share of investments: 3.7%
Siemens is a high-quality industrial business which combines exposure to some of
the most attractive industrial growth themes, including electrification, grid
investment, industrial automation and AI. Its unique mix of infrastructure
assets and industrial software positions the company to benefit from both the
physical build-out of the digital economy and the software used to design and
operate it, supporting long-term earnings growth and improving profitability.
6 ▲ UniCredit (2025: n/a)
Financials company
Market value: £23,039,000
Share of investments: 3.7%
UniCredit is a major European banking group with a broad geographic footprint,
serving individuals and businesses across retail and corporate banking,
payments, savings and investments. The combination of exposure to several
European markets and a broad range of financial services provides a diversified
banking franchise with multiple sources of earnings. In recent years, the
business has been reshaped around greater efficiency, disciplined cost
management and more selective use of capital. Loan and deposit growth has
continued across the group, providing an additional source of earnings support.
7 ▲ Novonesis (2025: n/a)
Health Care company
Market value: £21,593,000
Share of investments: 3.5%
Novonesis is a biosolutions company providing enzymes and microorganisms used in
food and beverages, human health, household care, agriculture and energy.
Specialist expertise, combined with the ability to apply technology across a
wide range of industries, creates a differentiated innovation platform. A strong
pipeline and new product launches demonstrate its ability to turn this expertise
into commercially relevant solutions, thereby outgrowing underlying markets.
8 ▲ CaixaBank (2025: 21st)
Financials company
Market value: £20,416,000
Share of investments: 3.3%
CaixaBank is a banking group combining a large retail and commercial banking
franchise with insurance, payments and wealth management. A large customer base
provides a substantial source of deposits, while activities across banking,
insurance, payments and wealth management create a diversified revenue mix.
Strong asset quality and disciplined cost management support the resilience of
the business, while growth across corporate, consumer and mortgage lending
provides an additional driver of earnings and capital generation.
9 ▲ Allied Irish Banks (2025: 11th)
Financials company
Market value: £18,783,000
Share of investments: 3.0%
Allied Irish Banks (AIB) is Ireland's main retail and business bank, providing
mortgages, savings and lending to individuals and businesses, with around a 30%
share of the Irish mortgage market. AIB's scale and customer deposit base
support a strong domestic franchise. Disciplined lending and strong capital
levels add to the resilience of the business, providing a solid foundation for
continued lending and deposit growth.
10 ▲ Siemens Energy (2025: n/a)
Energy company
Market value: £17,879,000
Share of investments: 2.9%
Siemens Energy is an energy technology business spanning electricity generation
and long-term servicing to the grid infrastructure required to transmit power.
Broad capabilities across power generation and grid infrastructure position the
company at the centre of the investment required to meet rising global
electricity demand. This demand is supported by electrification and the rapid
expansion of data centres, while strong order backlogs provide visibility and
improving execution is translating into stronger profitability.
All percentages reflect the value of the holding as a percentage of total
investments.
Arrows indicate the change in relative ranking of the position in the portfolio
compared to its ranking as at 31 August 2025.
Investments as at 31 August 2026
[][][]
Country of Market % of
operation value £'000 investments
Industrials
Safran France 31,488 5.0
Airbus France 23,669 3.8
Siemens Germany 23,362 3.7
MTU Aero Engines Germany 17,476 2.8
Legrand France 17,262 2.8
Kone Finland 16,904 2.7
ABB Group Switzerland 16,323 2.6
Kongsberg Gruppen Norway 10,999 1.8
Holcim Switzerland 10,865 1.7
Belimo Switzerland 10,613 1.7
Ferrovial Netherlands 10,157 1.6
Sandvik Sweden 9,369 1.5
Assa Abloy Sweden 9,289 1.5
Leonardo Italy 7,347 1.2
Epiroc Sweden 6,726 1.1
SPIE France 5,177 0.8
------------- -------------
227,026 36.3
======== ========
Financials
UniCredit Italy 23,039 3.7
CaixaBank Spain 20,416 3.3
Allied Irish Banks Ireland 18,783 3.0
KBC Groep Belgium 15,707 2.5
Erste Group Bank Austria 15,271 2.4
Intesa Sanpaolo Italy 13,632 2.2
ABN AMRO Bank Netherlands 11,466 1.8
ASR Nederland Netherlands 9,290 1.5
BPER Banca Italy 6,313 1.0
Talanx Germany 6,007 1.0
Poste Italiane Italy 5,882 0.9
Sberbank[1] Russia 1 -
------------- -------------
145,807 23.3
Technology ======== ========
ASML Netherlands 55,896 8.9
ASM International Netherlands 24,336 3.9
BE Semiconductor Netherlands 15,310 2.4
SAP Germany 12,668 2.0
Technoprobe Italy 1,683 0.3
------------- -------------
109,893 17.5
======== ========
Health Care
Novonesis Denmark 21,593 3.5
Lonza Group Switzerland 17,079 2.7
Novartis Switzerland 14,277 2.3
ChemoMetec Denmark 8,524 1.4
UCB Belgium 6,370 1.0
------------- -------------
67,843 10.9
======== ========
Basic Materials
Air Liquide France 12,605 2.0
Linde[2] United States 9,064 1.5
------------- -------------
21,669 3.5
======== ========
Consumer Discretionary
Compagnie Financière Richemont Switzerland 11,942 1.9
Inditex Spain 9,220 1.5
------------- -------------
21,162 3.4
======== ========
Energy
Siemens Energy Germany 17,879 2.9
Lukoil[1] Russia - -
------------- -------------
17,879 2.9
======== ========
Utilities
Engie France 13,682 2.2
------------- -------------
13,682 2.2
======== ========
Total investments 624,961 100.0
======== ========
[1] The investments in Sberbank and Lukoil have been fair valued to a
nominal value of £0.01 per share due to sanctions imposed on Russia. The
underlying value of the positions on the Moscow Stock Exchange as at 31 August
2026 were £13.1 million and £8.8 million respectively.
[2] Linde is listed in the US but the business is historically rooted in
Europe as it was founded in Germany and incorporated in Ireland. The company
moved to a sole US listing in 2023.
All investments are in ordinary shares unless otherwise stated. The total number
of investments held at 31 August 2026 was 45 (2025: 34).
Industry classifications in the table above are based on the Industrial
Classification Benchmark standard for categorisation of companies by industry
and sector.
As at 31 August 2026, the Company did not hold any equity interests comprising
more than 3% of any company's share capital.
Investment EXPOSURE as at 31 August 2026
Market capitalisation
% of portfolio 2026 % of portfolio 2025
€1bn to €10bn 3.9 14.2
€10bn to €20bn 10.0 14.6
€20bn to €50bn 36.6 20.4
>€50bn 49.5 50.8
Investment size
Number of Number of investments % of portfolio % of portfolio
investments 2025 2026 2025
2026
<£1m 2 3 0.0 0.1
£1m 1 2 0.3 0.9
to
£3m
£3m 0 1 0.0 0.7
to
£5m
£5m 13 3 15.9 5.2
to
£10m
>£10m 29 25 83.8 93.1
Distribution of investments
% of portfolio % of portfolio
2026 2025
Industrials 36.3 38.9
Financials 23.3 12.9
Technology 17.5 19.3
Health Care 10.9 7.7
Basic Materials 3.5 6.1
Consumer Discretionary 3.4 14.7
Energy 2.9 0.0
Utilities 2.2 0.0
Real Estate 0.0 0.4
Source: BlackRock.
Portfolio country allocation - % change from 31 August 2025
31 August 2026 Change from
31 August 2025
France 16.6 -3.4
Switzerland 12.9 -3.3
Ireland 3.0 -3.0
Germany 12.4 -1.2
Sweden 4.1 1.2
Netherlands 20.1 7.2
Denmark 4.9 2.2
Belgium 3.5 -0.9
Spain 4.8 2.6
Italy 9.3 4.4
Central Eastern Europe & Other 8.4 -5.8
Source: BlackRock.
Portfolio sector allocation - % change from 31 August 2025
31 August 2026 Change from
31 August 2025
Utilities 2.2 2.2
Real Estate 0.0 -0.4
Technology 17.5 -1.8
Industrials 36.3 -2.6
Health Care 10.9 3.2
Financials 23.3 10.4
Energy 2.9 2.9
Consumer Discretionary 3.4 -11.3
Basic Materials 3.5 -2.6
Source: BlackRock
Strategic Report
The Directors present the Strategic Report of the Company for the year ended 31
August 2026. The aim of the Strategic Report is to provide shareholders with the
information to assess how the Directors have performed their duty to promote the
success of the Company for the collective benefit of shareholders.
The Chairman's Statement together with the Investment Manager's Report form part
of this Strategic Report. The Strategic Report was approved by the Board at its
meeting on 2 November 2026.
Principal activity
The Company carries on business as an investment trust and is listed on the
London Stock Exchange. Its principal activity is portfolio investment.
Investment trusts are pooled investment vehicles which allow exposure to a
diversified range of assets through a single investment, thus spreading
investment risk.
Investment objective
The Company's objective is the achievement of capital growth, primarily through
investment in a focused portfolio constructed from a combination of the
securities of large, mid and small capitalisation European companies, together
with some investment in the developing markets of Europe.
The Company has the flexibility to invest in any country included in the FTSE
World Europe ex UK Index, as well as the freedom to invest in developing
countries not included in the index but considered by the Manager and the
Directors as part of greater Europe.
Strategy, business model and investment policy
Strategy
The Company invests in accordance with the objective given above. The Board is
collectively responsible to shareholders for the long-term success of the
Company and is its governing body. There is a clear division of responsibility
between the Board and BlackRock Fund Managers Limited (the Manager). Matters
reserved for the Board include setting the Company's strategy, including its
investment objective and policy, setting limits on gearing, capital structure,
governance, and appointing and monitoring of performance of service providers,
including the Manager.
Business model
The Company's business model follows that of an externally managed investment
trust. Therefore, the Company does not have any employees and outsources its
activities to third-party service providers including the Manager, who is the
principal service provider. In accordance with the Alternative Investment Fund
Managers' Directive (AIFMD), as implemented, retained and onshored in the UK,
the Company is an Alternative Investment Fund (AIF). BlackRock Fund Managers
Limited is the Company's Alternative Investment Fund Manager.
The management of the investment portfolio and the administration of the Company
have been contractually delegated to the Manager who in turn (with the
permission of the Company) has delegated certain investment management and other
ancillary services to BlackRock Investment Management (UK) Limited (BIM (UK) or
the Investment Manager). The Manager, operating under guidelines determined by
the Board, has direct responsibility for the decisions relating to the day-to
-day running of the Company and is accountable to the Board for the investment,
financial and operating performance of the Company.
The Company delegates fund accounting services to the Manager, which in turn sub
-delegates these services to The Bank of New York Mellon (International) Limited
(BNY). Other service providers include the Depositary (also BNY) and the
Registrar, Computershare Investor Services PLC. Details of the contractual terms
with the Manager and the Depositary and more details of arrangements in place
governing custody services are set out in the Directors' Report contained within
the Annual Report and Financial Statements.
Investment policy
The Company's policy is that the portfolio should consist of approximately 30-70
securities and the majority of the portfolio will be invested in larger
capitalisation companies, being companies with a market capitalisation of over
€5 billion. Up to 25% of the portfolio may be invested in companies in
developing Europe. The Company may also invest up to 5% of the portfolio in
unquoted investments. However, overall exposure to developing European companies
and unquoted investments will not in aggregate exceed 25% of the Company's
portfolio.
As at 31 August 2026, the Company held 45 investments (2025: 34). None (2025:
none) of the portfolio was invested in developing Europe. The Company had no
unquoted investments.
Investment in developing European securities may be either direct or through
other funds, including those managed by BlackRock Fund Managers Limited, subject
to a maximum of 15% of the portfolio. Direct investment in Russia is limited to
10% of the Company's assets. Investments may also include depositary receipts or
similar instruments representing underlying securities.
The Company also has the flexibility to invest up to 20% of the portfolio in
debt securities, such as convertible bonds and corporate bonds. No bonds were
held at 31 August 2026. The use of any derivative instruments such as financial
futures, options and warrants and the entering into of stock lending
arrangements has, up to the date of this report, only been for the purposes of
efficient portfolio management. However, with effect from the date of this
report, the Board has determined to expand the use of derivatives to also
provide leverage to gear the Company within the gearing limits set out below.
The Board is making this change in recognition that (given the Company's
structure and investment mandate) obtaining leverage through total return swaps
is more efficient and flexible and is significantly cheaper than doing so
through a conventional bank overdraft. Total return swaps enable the Company to
access leveraged market exposure without the need to hold the underlying
securities directly, reducing dealing, custody, settlement and administration
requirements. No change is being made to the Company's gearing limits, which the
Board anticipates will not exceed 15 per cent of net asset value (NAV) in normal
market conditions.
While the Company may hold shares in other investment companies (including
investment trusts), the Board has agreed that the Company will not invest more
than 15%, in aggregate, of its total assets in other listed closed-ended
investment funds.
In order to comply with the current Listing Rules, the Company will also not
invest more than 10% of its gross asset value in other listed closed-ended
investment funds which themselves may invest more than 15% of their gross assets
in other listed closed-ended investment funds. This restriction does not form
part of the Company's investment policy.
The Company achieves an appropriate spread of risk by investing in a diversified
portfolio of securities.
The Investment Manager believes that appropriate use of gearing can add value
over time. This gearing typically is in the form of an overdraft facility which
can be repaid at any time. The level and benefit of any gearing is discussed and
agreed regularly by the Board. The Investment Manager generally aims for a
baseline gearing level of c.10% in normal market conditions, keeping within a
range of +/- 15%, with the portfolio managers having the flexibility to hold net
cash up to 15% of net asset value (NAV). At the balance sheet date, the Company
had net gearing of 8.3% (2025: net cash of 3.1%)[1].
Performance
In the year to 31 August 2026, the Company's NAV per share increased by 8.8%[1]
(compared with an increase in the reference index of 20.9%) and the share price
increased by 8.4% (all percentages calculated in Sterling terms with dividends
reinvested). The Investment Manager's Report includes a review of the main
developments during the year, together with information on investment activity
within the Company's portfolio.
Results and dividends
The results for the Company are set out in the Income Statement in the Financial
Statements. The total profit for the year, after taxation, was £46,569,000
(2025: loss of £40,196,000) which is reflected in the increase in the net asset
value of the Company. The revenue return amounted to £8,069,000 (2025:
£6,684,000) and relates to net revenue earnings from dividends received during
the year after adjusting for expenses allocated to revenue.
As explained in the Company's Half Yearly Financial Report, the Directors
declared an interim dividend of 1.75p per share (2025: 1.75p). The Directors
recommend the payment of a final dividend of 6.25p per share, making a total
dividend of 8.00p per share (2025: 7.15p). Subject to approval at the
forthcoming Annual General Meeting, the dividend will be paid on 18 December
2026 to shareholders on the register of members at the close of business on 20
November 2026.
Future prospects
The Board's main focus is to achieve capital growth. The future performance of
the Company is dependent upon the success of the investment strategy and, to a
large extent, on the performance of financial markets. The outlook for the
Company is discussed in both the Chairman's Statement and Investment Manager's
Report.
Social, community and human rights issues
As an investment trust, the Company has no direct social or community
responsibilities or impact on the environment and the Company has not adopted an
ESG investment strategy or exclusionary screens. However, the Directors believe
that it is important and in shareholders' interests to consider human rights
issues and environmental, social and governance factors when selecting and
retaining investments. Details of the Company's approach to ESG integration and
socially responsible investment are set out in the Annual Report and Financial
Statements.
Modern Slavery Act
As an investment vehicle the Company does not provide goods or services in the
normal course of business and does not have customers. Accordingly, the
Directors consider that the Company is not required to make any slavery or human
trafficking statement under the Modern Slavery Act 2015. In any event, the Board
considers the Company's supply chains, dealing predominantly with professional
advisers and service providers in the financial services industry, to be low
risk in relation to this matter.
Directors, gender representation and employees
The Directors of the Company on 31 August 2026 are set out in the Directors'
Biographies contained within the Annual Report and Financial Statements. The
Board currently consists of four male Directors and two female Directors. The
Company's policy on diversity is set out within the Annual Report and Financial
Statements. The Board currently meets the recommendations of the Parker Review
but not those of the FTSE Women Leaders Review. Following Mr Baxter's retirement
at the AGM, women will represent 40% of the Board and the Board will therefore
meet the Review's recommendation. The Company does not have any executive
employees.
Key performance indicators
At each Board meeting, the Directors consider a number of performance measures
to assess the Company's success in achieving its objectives. The key performance
indicators (KPIs) used to measure the progress and performance of the Company
over time, and which are comparable to other investment trusts, are set out
below. As indicated in footnote 2 to the table, some of these KPIs fall within
the definition of `Alternative Performance Measures' (APMs) under guidance
issued by the European Securities and Markets Authority (ESMA) and additional
information explaining how these are calculated is set out in the Glossary
contained within the Annual Report and Financial Statements.
Additionally, the Board regularly reviews the performance of the portfolio, as
well as the net asset value and share price of the Company and compares this
against various companies and indices. The Company does not have a benchmark.
However, the Board reviews performance and ongoing charges against a peer group
of European investment trusts, as well as the reference index.
The Board uses a number of financial KPIs to monitor and assess the performance
of the Company. The principal KPIs are:
[][][][]
2026 2025
Net asset value per share 643.30p 598.05p
Share price 610.00p 570.00p
Net asset value total return[1,2] 8.8% -6.1%
Share price total return[1,2] 8.4% -3.9%
Discount to net asset value[2] 5.2% 4.7%
Revenue return per share 8.74p 6.89p
Ongoing charges[2,3] 0.80% 0.95%
======= =======
[1] This measures the Company's net asset value and share price total
return, which assumes dividends paid by the Company have been reinvested.
[2] Alternative Performance Measures, see Glossary contained within the
Annual Report and Financial Statements.
[3] Ongoing charges represent the management fee and all other operating
expenses, excluding finance costs, direct transaction costs, custody transaction
charges, VAT recovered, taxation, prior year expenses written back and certain
non-recurring items, as a % of average daily net assets.
Performance against the reference index
This is an important KPI by which relative performance is judged. Please refer
to charts contained within the Annual Report and Financial Statements.
Discount/premium
The Board has adopted a share issuance and repurchase policy and is committed to
buy back shares when they stand at anything more than a small discount to
enhance the NAV per share for remaining shareholders and to issue shares at a
premium where the Board is confident of consistent market demand. During the
year ended 31 August 2026, the shares traded between a discount of 3.7% and
8.2%. Please refer to the Chairman's Statement above for further information.
Principal risks
The Company is exposed to a variety of risks and uncertainties. As required by
the 2024 UK Corporate Governance Code (the UK Code), the Board has in place a
robust ongoing process to identify, assess and monitor the principal risks and
emerging risks facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity. A core element of
this process is the Company's risk register which identifies the risks facing
the Company and assesses the likelihood and potential impact of each risk and
the quality of controls operating to mitigate it. A residual risk rating is then
calculated for each risk based on the outcome of the assessment.
The risk register, its method of preparation and the operation of key controls
in BlackRock's and third-party service providers' systems of internal control,
are reviewed on a regular basis by the Audit and Management Engagement
Committee. In order to gain a more comprehensive understanding of BlackRock's
and other third-party service providers' risk management processes and how these
apply to the Company's business, BlackRock's internal audit department provides
an annual presentation to the Audit Committee chairs of the BlackRock investment
trusts setting out the results of testing performed in relation to BlackRock's
internal control processes. The Audit and Management Engagement Committee also
periodically receives and reviews internal control reports from BlackRock and
the Company's service providers.
The Board has undertaken a robust assessment of both the principal and emerging
risks facing the Company, including those that would threaten its business
model, future performance, solvency or liquidity. For instance, the risk that
unforeseen or unprecedented events including (but not limited to) heightened
geopolitical tensions such as the conflicts in Ukraine and in the Middle East,
inflation and the current cost of living crisis has had a significant impact on
global markets. The Board has taken into consideration the risks posed to the
Company by these events and incorporated them into the Company's risk register.
Emerging risks are considered by the Board as they come into view and are
incorporated into the existing review of the Company's risk register.
Additionally, the Manager considers emerging risks in numerous forums and the
Risk and Quantitative Analysis team produces an annual risk survey. Any material
risks of relevance to the Company identified through the annual risk survey will
be communicated to the Board.
Emerging risks that have been considered by the Board over the year include the
impact of climate change, escalating geopolitical conflict and technological
advances.
The key emerging risks identified are as follows:
Climate change: Investors can no longer ignore the impact that the world's
changing climate will have on their portfolios, with the impact of climate
change on returns, including climate-related natural disasters, now potentially
significant and with the potential to escalate more swiftly than one is able to
predict. The Board receives ESG reports from the Manager on the portfolio and
the way ESG considerations are integrated into the investment decision-making,
so as to mitigate risk at the level of stock selection and portfolio
construction.
Artificial Intelligence (AI): Advances in computing power indicate that AI has
become a powerful tool that will impact a huge range of areas and with a wide
range of applications that have the potential to dislocate established business
models and disrupt labour markets, creating uncertainty in corporate valuations.
The significant energy required to power this technological revolution will
create further pressure on environmental resources and carbon emissions.
Geopolitical risk: Escalating geopolitical tensions (including, but not limited
to tensions in the Middle East and the ongoing conflict in Ukraine, or
deteriorating relations between China and the US/other countries) have a
significant negative impact on global markets, with an increasing use of tariffs
and domestic regulations making global trade more complex and driving economic
fragmentation.
The Board will continue to assess these risks on an ongoing basis. In relation
to the UK Code, the Board is confident that the procedures that the Company has
put in place are sufficient to ensure that the necessary monitoring of risks and
controls has been carried out throughout the reporting period.
The principal risks and uncertainties faced by the Company during the financial
year, together with the potential effects, controls and mitigating factors are
set out within the Annual Report and Financial Statements.
[]
Principal risk Description Mitigating Movement from
activities the prior
year[1]
Investment Returns achieved To manage this ▲
performance are reliant risk the Board:
primarily upon · regularly
the performance reviews the
of the Company's
portfolio.The investment
Board is mandate and
responsible for: long-term
strategy;
· deciding the · has set
investment investment
strategy to restrictions
fulfil the and guidelines
Company's which the
objective;and Investment
· monitoring Manager
the performance monitors and
of the regularly
Investment reports on;
Manager and the · receives
implementation from the
of the Investment
investment Manager a
strategy.An regular
inappropriate explanation of
investment stock selection
strategy may decisions,
lead to: portfolio
· exposure,
underperformance gearing and any
compared to the changes in
reference index gearing and the
and the rationale for
Company's peer the composition
group; of the
· a reduction investment
or permanent portfolio;
loss of capital; · monitors
and the maintenance
· dissatisfied of an adequate
shareholders and spread of
reputational investments in
damage. order to
minimise the
The Board is risks
also cognisant associated with
of the long-term particular
risk to countries or
performance from factors
inadequate specific to
attention to ESG particular
issues and in sectors, based
particular the on the
impact of diversification
climate change. requirements
inherent in the
investment
policy; and
· receives
and reviews
regular reports
showing an
analysis of the
Company's
performance
against the
reference index
and other
similar
indices.
ESG analysis is
integrated into
the Manager's
investment
process as set
out within the
Annual Report
and Financial
Statements.
This is
monitored by
the Board.
Legal and The Company has The Investment ►
regulatory been approved by Manager
compliance HM Revenue & monitors
Customs as an investment
investment movements, the
trust, subject level and type
to continuing to of forecast
meet the income and
relevant expenditure and
eligibility the amount of
conditions and proposed
operates as an dividends to
investment trust ensure that the
in accordance provisions of
with Chapter 4 Chapter 4 of
of Part 24 of Part 24 of the
the Corporation Corporation Tax
Tax Act 2010. As Act 2010 are
such, the not breached.
Company is The results are
exempt from reported to the
corporation tax Board at each
on capital gains meeting.
on the profits Compliance with
realised from the accounting
the sale of its rules affecting
investments. investment
Any breach of trusts is also
the relevant carefully and
eligibility regularly
conditions could monitored.
lead to the The Company
Company losing Secretary and
investment trust the Company's
status and being professional
subject to advisers
corporation tax provide regular
on capital gains reports to the
realised within Board in
the Company's respect of
portfolio. In compliance with
such event, the all applicable
investment rules and
returns of the regulations.
Company may be The Board and
adversely the Manager
affected. also monitor
A serious changes in
regulatory government
breach could policy and
result in the legislation
Company and/or which may have
the Directors an impact on
being fined or the Company.
the subject of The Company's
criminal Investment
proceedings, or Manager,
the suspension BlackRock, at
of the Company's all times
shares which complies with
could in turn the sanctions
lead to a breach administered by
of the the UK Office
Corporation Tax of Financial
Act 2010. Sanctions
Amongst other Implementation,
relevant laws, the United
the Company is States
required to Treasury's
comply with the Office of
provisions of Foreign Assets
the Companies Control, the
Act 2006, the United Nations,
Alternative European Union
Investment Fund member states
Managers' and any other
Directive, the applicable
UK Listing Rules regimes.
and Disclosure
Guidance and
Transparency
Rules, the
Sanctions and
Anti-Money
Laundering Act
2018 and the
Market Abuse
Regulation.
Market Market risk The Board ▲
arises from considers the
volatility in diversification
the prices of of the
the Company's portfolio,
investments. It asset
represents the allocation,
potential loss stock selection
the Company and levels of
might suffer gearing on a
through regular basis
realising and has set
investments in investment
the face of restrictions
negative market and guidelines
movements. which are
Changes in monitored and
general economic reported on by
and market the Investment
conditions, such Manager.
as currency The Board
exchange rates, monitors the
interest rates, implementation
rates of and results of
inflation, the investment
industry process with
conditions, tax the Investment
laws and Manager.
political events The Board also
can also recognises the
substantially benefits of a
and adversely closed-end fund
affect the structure in
securities and, extremely
as a volatile
consequence, the markets such as
Company's those
prospects and experienced
share price. during the
Market risk Russia/Ukraine
includes the and Middle East
potential impact conflicts, as
of events which well as recent
are outside the trade and
Company's tariff related
control, disruptions.
including (but Unlike open
not limited to) -ended
heightened counterparts,
geopolitical closed-end
tensions and funds are not
military obliged to sell
conflict, a down portfolio
global pandemic holdings at low
and high valuations to
inflation. meet liquidity
Companies requirements
operating in the for
sectors in which redemptions.
the Company During times of
invests may be elevated
impacted by new volatility and
legislation market stress,
governing the ability of
climate change a closed-end
and fund structure
environmental to remain
issues, which invested for
may have a the long term
negative impact enables the
on their portfolio
valuation and managers to
share price. adhere to
disciplined
fundamental
analysis from a
bottom-up
perspective and
be ready to
respond to
dislocations in
the market as
opportunities
present
themselves.
The portfolio
managers spend
a considerable
amount of time
understanding
the
environmental,
social and
governance
(ESG) risks and
opportunities
facing
companies and
industries in
the portfolio.
The Company
does not
exclude
investment in
stocks based on
ESG criteria,
but the
portfolio
managers
consider ESG
information
when conducting
research and
due diligence
on new
investments and
again when
monitoring
investments in
the portfolio.
Operational In common with Due diligence ►
most other is undertaken
investment trust before
companies, the contracts are
Company has no entered into
employees. The with third
Company -party service
therefore relies providers.
on the services Thereafter, the
provided by performance of
third parties the provider is
and is dependent subject to
on the control regular review
systems of the and reported to
Manager, the the Board.
Depositary and The Board
Fund Accountant reviews on a
which maintain regular basis
the Company's an assessment
assets, dealing of the fraud
procedures and risks that the
accounting Company could
records. potentially be
The security of exposed to and
the Company's also a summary
assets, dealing of the controls
procedures, put in place by
accounting the Manager,
records and Depositary,
adherence to Custodian, Fund
regulatory and Accountant and
legal Registrar
requirements specifically to
depend on the mitigate these
effective risks.
operation of the The Company's
systems of these key third-party
other third service
-party service providers
providers. There produce Service
is a risk that a Organisation
major disaster, Control (SOC 1)
such as floods, reports to
fire, a global provide
pandemic, or assurance
terrorist regarding the
activity, effective
renders the operation of
Company's internal
service controls as
providers unable reported on by
to conduct their reporting
business at accountants.
normal operating BNYM acts as
capacity and the Company's
effectiveness. Depositary,
Failure by any Custodian and
service provider Fund Accountant
to carry out its and also
obligations to provides a SOC2
the Company report in
could have a respect of its
material adverse Information
effect on the Technology
Company's Business Unit.
performance. In addition,
Disruption to BlackRock's
the accounting, Information
payment systems Security and
or custody Enterprise
records Resilience
(including cyber teams provide
security risk) regular updates
could prevent to the Board in
the accurate respect of
reporting and cybersecurity.
monitoring of These reports
the Company's are provided to
financial the Audit and
position. Management
Engagement
Committee for
review. The
Committee would
seek further
representations
from service
providers if
not satisfied
with the
effectiveness
of their
control
environment.
The Company's
financial
instruments
held in custody
are subject to
a strict
liability
regime and, in
the event of a
loss of such
financial
instruments
held in
custody, the
Depositary must
return
financial
instruments of
an identical
type or the
corresponding
amount, unless
able to
demonstrate the
loss was a
result of an
event beyond
its reasonable
control.
The Board
reviews the
overall
performance of
the Manager,
Investment
Manager and all
other third
-party service
providers on a
regular basis
and compliance
with the
Investment
Management
Agreement
annually.
The Board also
considers the
business
continuity
arrangements of
the Company's
key service
providers on an
ongoing basis
and reviews
these as part
of its review
of the
Company's risk
register. The
Board considers
the portfolio
managers'
succession
plans so far as
they affect the
services
provided to the
Company.
Financial The Company's Details of ►
investment these risks are
activities disclosed in
expose it to a note 16 to the
variety of Financial
financial risks Statements
which include contained
interest rate within the
risk, Annual Report
counterparty and Financial
credit risk and Statements,
liquidity risk. together with a
summary of the
policies for
managing these
risks.
Marketing Marketing The Board ►
efforts are reviews
inadequate or do marketing
not comply with strategy and
relevant initiatives and
regulatory the Manager is
requirements. required to
There is a provide regular
failure to updates on
communicate progress.
adequately with BlackRock has a
shareholders or dedicated
reach out to investment
potential new trust sales
shareholders team visiting
resulting in both existing
reduced demand and potential
for the clients on a
Company's shares regular basis.
and a widening Data on client
of the discount. meetings and
issues raised
are provided to
the Board on a
regular basis.
All investment
trust marketing
documents are
subject to
appropriate
review and
authorisation.
[1] Change Key Increased ▲ Broadly Unchanged ►
Decreased ▼
Viability statement
In accordance with provision 30 of the 2024 UK Corporate Governance Code, the
Directors have assessed the prospects of the Company over a longer period than
the twelve months referred to by the `Going Concern' guidelines. The Company is
an investment trust with the objective of achieving capital growth.
The Directors expect the Company to continue for the foreseeable future and have
therefore conducted this review for the period up to the Annual General Meeting
in 2031. The Directors believe that five years is an appropriate investment
horizon to assess the viability of the Company. This is based on the Company's
long-term mandate, the low turnover in the portfolio and the investment holding
period investors generally consider while investing in the European sector.
In making an assessment on the viability of the Company, the Board has
considered the following:
· the impact of a significant fall in European equity markets on the value
of the Company's investment portfolio;
· the ongoing relevance of the Company's investment objective, business
model and investment policy in the prevailing market;
· the principal and emerging risks and uncertainties, as set out above, and
their potential impact;
· the level of ongoing demand for the Company's shares;
· the Company's share price discount/premium to NAV;
· the liquidity of the Company's portfolio; and
· the level of income generated by the Company and future income and
expenditure forecasts.
The Directors have concluded that there is a reasonable expectation that the
Company will continue in operation and meet its liabilities as they fall due
over the period of their assessment based on the following considerations:
· the Investment Manager's compliance with the investment objective and
policy, its investment strategy and asset allocation;
· the portfolio is liquid and mainly comprises readily realisable assets,
which continue to offer a broad range of investment opportunities for
shareholders as part of a balanced investment portfolio;
· the operational resilience of the Company and its key service providers
and their ability to continue to provide a good level of service for the
foreseeable future;
· the effectiveness of business continuity plans in place for the Company
and its key service providers;
· the ongoing processes for monitoring operating costs and income which are
considered to be reasonable in comparison to the Company's total assets;
· the Board's discount management policy; and
· the Company is a closed-end investment company and therefore does not
suffer from the liquidity issues arising from unexpected redemptions.
In addition, the Board's assessment of the Company's ability to operate in the
foreseeable future is included in the Going Concern Statement which can be found
within the Annual Report and Financial Statements in the Directors' Report.
Section 172 Statement: promoting the success of the Company
The Companies (Miscellaneous Reporting) Regulations 2018 require directors to
explain in greater detail how they have discharged their duties under Section
172(1) of the Companies Act 2006 in promoting the success of their companies for
the benefit of members as a whole. This includes the likely consequences of
their decisions in the longer term and how they have taken wider stakeholders'
needs into account.
The disclosure that follows covers how the Board has engaged with and
understands the views of stakeholders and how stakeholders' needs have been
taken into account, the outcome of this engagement and the impact that it has
had on the Board's decisions. As the Company is an externally managed investment
company and does not have any employees or customers, the Board considers the
main stakeholders in the Company to be the shareholders, the Manager and
Investment Manager. In addition to this, the Board considers investee companies
and key service providers of the Company to be stakeholders; the latter comprise
the Company's Custodian, Depositary, Registrar and Broker.
Stakeholders
Shareholders Continued shareholder support and engagement are critical to
the continued existence of the Company and the successful
delivery of its long-term strategy. The Board is focused on
fostering good working relationships with shareholders and on
understanding the views of shareholders in order to
incorporate them into the Board's strategy and objectives in
delivering long-term capital growth.
Manager and The Board's main working relationship is with the Manager,
Investment who is responsible for the Company's portfolio management
Manager (including asset allocation, stock and sector selection) and
risk management, as well as ancillary functions such as
administration, secretarial, accounting and marketing
services. The Manager has sub-delegated portfolio management
to the Investment Manager. Successful management of
shareholders' assets by the Investment Manager is critical
for the Company to successfully deliver its investment
strategy and meet its objective. The Company is also reliant
on the Manager as AIFM to provide support in meeting relevant
regulatory obligations under the AIFMD and other relevant
legislation.
Other key In order for the Company to function as an investment trust
service on the London Stock Exchange's (LSE) main market for listed
providers securities and generally function as an investment trust with
a listing on the official list of the FCA, the Board relies
on a diverse range of advisors for support in meeting
relevant obligations and safeguarding the Company's assets.
For this reason, the Board considers the Company's Custodian,
Depositary, Registrar and Broker to be stakeholders. The
Board maintains regular contact with its key external service
providers and receives regular reporting from them through
the Board and committee meetings, as well as outside of the
regular meeting cycle.
Investee Portfolio holdings are ultimately shareholders' assets and
companies the Board recognises the importance of good stewardship and
communication with investee companies in meeting the
Company's investment objective and strategy. The Board
monitors the Manager's stewardship arrangements and receives
regular feedback from the Manager in respect of meetings with
the management of portfolio companies.
A summary of the key areas of engagement undertaken by the Board with its key
stakeholders in the year under review and how Directors have acted upon this to
promote the long-term success of the Company are set out below.
Area of Engagement
[][][]
Investment
mandate and
objective
Issue Engagement Impact
The Board is The Board worked The portfolio activities undertaken by the
committed to closely with the Investment Manager can be found in their
promoting the Investment report contained within the Annual Report
role and Manager and Financial Statements.
success of the throughout the The Investment Manager aims to construct a
Company in year in further portfolio that is high conviction and
delivering on developing concentrated in nature but diversified by
its investment investment end market exposures.
mandate to strategy and During the financial year, Brian Hall
shareholders underlying replaced Alexandra Dangoor as co-Portfolio
over the long policies, not Manager. Brian is a multi-award-winning
term. The simply for the portfolio manager with 26 years of
Board also has purpose of investment experience, and has worked with
responsibility achieving the Stefan Gries for nearly 19 years having
to Company's joined BlackRock in 2007. The Board
shareholders investment believes that the addition of Brian as an
to ensure that objective but in experienced investor with a quality value
the Company's the interests of focus will bring the flexibility needed to
portfolio of shareholders and ensure future success of the portfolio.
assets is future investors. Further to this, on 31 March 2026 Stefan
invested in In addition to retired from the industry to focus on
line with the the scheduled treatment and recovery following personal
stated Board meetings health issues. Benjamin Moore, a Managing
investment each year, the Director within BlackRock's European
objective and Board holds a Fundamental Equity team, took over Stefan's
in a way that Strategy session role as portfolio manager and brings 11
ensures an which is years of experience at Columbia
appropriate dedicated to an Threadneedle. Benjamin acts as Lead
balance in-depth review Portfolio Manager for the Company,
between spread of the Company's supported by Brian Hall who remains co
of risk and strategy in -Portfolio Manager on the portfolio. They
portfolio conjunction with will both continue to be supported by the
returns. key advisers, 22-strong BlackRock European Fundamental
including the Equity team. Benjamin has a strong track
Company's Broker. record built on a quality growth style,
As a result of similar to that employed by the Company,
discussions seeking quality companies which can grow
undertaken over the long term, while sustaining
through the attractive economics thanks to robust
course of the competitive advantages. Benjamin's
year, the Board investment approach is expected to bring an
has agreed with increased valuation awareness, as well as
the Manager appreciation of businesses or industries
changes to the where returns are improving - thanks to
portfolio factors such as operational transformation,
management improved capital allocation or market
arrangements for consolidation. This broadens the investable
the Company, with universe, allowing for more valuation
Benjamin Moore discipline while maintaining a strong focus
now Lead on quality.
Portfolio Manager The Board supports the changes to the
and Brian Hall as portfolio management arrangements and
co-Portfolio believes they align well with the goal of
Manager. The dampening fund volatility and enhancing
Board has also returns for our shareholders over time.
agreed new Details regarding the Company's NAV and
strategic share price performance can be found in the
initiatives Chairman's Statement and in this Strategic
including the Report contained within the Annual Report
introduction of and Financial Statements.
an enhanced
dividend policy
and conditional
tender offer, a
management fee
change and a new
approach to
gearing with the
use of total
return swaps
(TRS).
The Company does
not exclude
investment in
stocks based on
Environmental,
Social and
Governance (ESG)
criteria, but the
approach of the
portfolio
managers to the
consideration of
ESG factors in
respect of the
Company's
portfolio, as
well as
engagement with
investee
companies, is to
encourage the
adoption of
sustainable
business
practices which
support long-term
value creation.
Shareholders
Issue Engagement Impact
Continued The Board is The Board values any feedback and questions
shareholder committed to from shareholders ahead of and during
support and maintaining open Annual General Meetings in order to gain an
engagement are channels of understanding of their views and will take
critical to communication and action when and as appropriate.Feedback and
the continued to engage with questions will also help the Company evolve
existence of shareholders. The its reporting, aiming to make reports more
the Company Chairman has transparent and understandable.
and the proactively Feedback from all substantive meetings
successful engaged with between the Investment Manager and
delivery of shareholders and shareholders will be shared with the Board.
its long-term also when The Directors will also receive updates
strategy. considering new from the Company's Broker on any feedback
strategic from shareholders, as well as share trading
initiatives for activity, share price performance and an
the Company. The update from the Investment Manager.
Company welcomes The portfolio management team attended a
and encourages number of professional investor meetings
attendance and and held discussions with a number of
participation wealth management desks and offices in
from shareholders respect of the Company during the year
at its Annual under review. The portfolio managers also
General Meetings. held group webcasts in the year to provide
Shareholders will investors with portfolio updates.
have the Portfolio holdings are ultimately
opportunity to shareholders' assets and the Board
meet the recognises the importance of good
Directors and stewardship and communication with investee
Investment companies in meeting the Company's
Manager and to investment objective and strategy. The
address questions Board monitors the Manager's stewardship
to them directly. activities and receives regular feedback
The Investment from the Investment Manager in respect of
Manager will also meetings with the management of portfolio
provide a companies.
presentation on
the Company's
performance and
the outlook.
The Annual Report
and Half Yearly
Financial Report
are available on
the BlackRock
website and are
also circulated
to shareholders
either in printed
copy or via
electronic
communications.
In addition,
regular updates
on performance,
monthly
factsheets, the
daily NAV and
other information
are also
published on the
Manager's website
at
www.blackrock.com/
uk/brge.
The Board also
works closely
with the Manager
to develop the
Company's
marketing
strategy, with
the aim of
ensuring
effective
communication
with
shareholders.
Unlike trading
companies, one-to
-one shareholder
meetings normally
take the form of
a meeting with
the portfolio
managers as
opposed to
members of the
Board. The
Company's
willingness to
enter into
discussions with
institutional
shareholders is
also demonstrated
by the programmes
of institutional
presentations by
the portfolio
managers.
If shareholders
wish to raise
issues or
concerns with the
Board, they are
welcome to do so
at any time. The
Chairman is
available to meet
directly with
shareholders
periodically to
understand their
views on
governance and
the Company's
performance where
they wish to do
so. He may be
contacted via the
Company Secretary
whose details are
contained within
the Annual Report
and Financial
Statements.
Responsible
investing
Issue Engagement Impact
Good The Company does The Investment Manager believes there is
governance and not exclude likely to be a positive correlation between
consideration investment in strong ESG practices and investment
of sustainable stocks based on performance over time. Details of the
investment are ESG criteria but Company's performance in the year are given
key factors in the Board in the Chairman's Statement above and the
making believes that Performance Record contained within the
investment responsible Annual Report and Financial Statements. The
decisions. investment and Company does not meet the criteria for
Climate change sustainability Article 8 or 9 products under the EU
is becoming a are integral to Sustainable Finance Disclosure Regulation
defining the longer-term and the investments underlying this
factor in delivery of the financial product do not take into account
companies' Company's the EU criteria for environmentally
long-term success. The sustainable economic activities.
prospects Board works
across the closely with the
investment Investment
spectrum, with Manager to
significant regularly review
and lasting the Company's
implications performance,
for economic investment
growth and strategy and
prosperity. underlying
policies to
ensure that the
Company's
investment
objective
continues to be
met in an
effective and
responsible way
in the interests
of shareholders
and future
investors.
The Investment
Manager's
approach to the
consideration of
ESG factors in
respect of the
Company's
portfolio, as
well as the
Investment
Manager's
engagement with
investee
companies are
kept under review
by the Board. The
Board also
expects to be
informed by the
Manager of any
sensitive voting
issues involving
the Company's
investments.
The Investment
Manager reports
to the Board in
respect of its
ESG policies and
how these are
integrated into
the investment
process; a
summary of
BlackRock's
approach to ESG
is set out within
the Annual Report
and Financial
Statements. The
Investment
Manager's
engagement and
voting policy is
detailed within
the Annual Report
and Financial
Statements and on
the BlackRock
website.
Management of
share rating
Issue Engagement Impact
The Board The Board The Board will continue to monitor the
recognises monitors the Company's premium/discount to NAV and will
that it is in Company's share look to issue, buy back shares and/or
the long-term rating on an operate six monthly tender offers if it is
interests of ongoing basis and deemed to be in the interests of
shareholders receives regular shareholders as a whole.
that shares do updates from the The Board decided not to implement a semi
not trade at a Manager and the -annual tender offer in November 2026 as,
significant Company's Broker over the six months to 31 August 2026, the
discount or regarding the average discount to NAV (cum income) was
premium to level of discount 6.7%[1]. It also decided not to implement
their or premium and the May 2026 semi-annual tender offer, as
prevailing the drivers over the six months to 31 March 2026, the
NAV. behind this. The average discount to NAV (cum income) was
Therefore, portfolio 5.3%[1]. As the Company's buyback activity
where deemed managers provide has minimized the Company's discount
to be in regular volatility, the Board concluded that it was
shareholders' performance not in the interests of shareholders to
long-term updates and implement the latest semi-annual tender
interests, the detailed offers.
Board may performance
exercise its attribution.
powers to The Board
issue shares believes that the
or buy back best way of
shares with maintaining the
the objective share rating at
of ensuring an optimal level
that an over the long
excessive term is to create
premium or demand for the
discount does shares in the
not arise. secondary market.
To this end, the
Investment
Manager is
devoting
considerable
effort to
broadening the
awareness of the
Company,
particularly to
wealth managers
and to the wider
retail
shareholder
market.
In addition, the During the financial year the Company did
Board has worked not reissue any ordinary shares from
closely with the treasury. The Company bought back 5,434,110
Manager to ordinary shares during the financial year
develop the and a further 982,297 since the year end
Company's (up to close of business on 29 October
marketing 2026). As at 29 October 2026 the Company's
strategy, with shares were trading at a discount of
the aim of 7.7%[1] to the cum income NAV.
ensuring
effective
communication
with existing
shareholders and
to attract new
shareholders to
the Company in
order to improve
liquidity in the
Company's shares
and to sustain
the share rating
of the Company.
During the year,
the Board engaged
regularly with
the Manager and
welcomed the
increased level
of marketing
support provided
to promote
BlackRock
Investment Trusts
in the UK market.
The Board was
pleased to see
additional
marketing
resources
committed to the
development of a
new advertising
campaign designed
to raise
awareness of the
BlackRock
Investment Trust
range.
Alongside this,
the Board
recognises the
importance of
income to its
shareholders and,
following
discussions with
its advisers,
concluded that an
increased
frequency of
dividend payments
would be welcomed
by shareholders.
The Board also
notes the
importance of the
Company's
dividend approach
being attractive
to both existing
and also new
investors, which
will help to
support demand
for its shares
and to narrow the
discount. The
Company is
therefore
introducing a
progressive
enhanced dividend
policy whereby it
will make four
quarterly
dividend payments
in place of the
previous bi
-annual dividend
payments. The
Company will
target an annual
dividend
equivalent to
4.5% of the
Company's NAV at
the preceding
financial year
end (31 August),
payable in four
quarterly
instalments. The
Board retains
discretion to
increase the
dividend in
absolute terms to
ensure the
progressive
nature of the
policy. The
Board's intention
is to make three
interim dividend
payments in
March, June and
September each
year. It will
then declare a
final dividend
for the full year
(payable in
December)
reflecting the
final amount
required to
ensure an
appropriate level
of full year
dividend.
As part of its
ongoing
consideration of
the Company's
approach to
shareholder
returns and
liquidity, the
Board has also
agreed to
introduce a
performance
-linked
conditional
tender mechanism.
The new mechanism
will be in
addition to the
Company's
existing
discretionary
tender mechanism
and is intended
to provide
shareholders with
a clear and
transparent
potential
liquidity
opportunity in
the event of
sustained
investment
underperformance.
The conditional
tender mechanism
will operate over
a five-year
performance
measurement
period ending in
the 2031
financial year.
Performance will
be assessed by
reference to the
Company's NAV
total return
against its
reference index,
the FTSE World
Europe ex UK
Total Return
Index (GBP). If
the Company's NAV
total return
underperforms the
reference index
over the relevant
five-year
measurement
period, the Board
intends to offer
shareholders the
opportunity to
tender up to 25%
of the Company's
issued share
capital at a
price equivalent
to a 2% discount
to the prevailing
NAV, subject to
obtaining the
necessary
shareholder
approvals and
satisfying all
applicable legal
and regulatory
requirements at
that time.
Service levels
of third party
providers
Issue Engagement Impact
The Board The Manager All performance evaluations were performed
acknowledges reports to the on a timely basis and the Board concluded
the importance Board on the that all key third-party service providers,
of ensuring Company's including the Manager, were operating
that the performance on a effectively and providing a good level of
Company's regular basis. service.
principal The Board carries The Board has received updates in respect
suppliers are out a robust of business continuity planning from the
providing a annual evaluation Company's Manager, Custodian, Depositary,
suitable level of the Manager's Fund Accountant, Registrar, Printer and
of service, performance, Broker and is confident that arrangements
including the their commitment in place are appropriate.
Manager in and available During the year the Board entered into
respect of resources. negotiations with the Manager over the
investment The Board level of management fee paid and it agreed
performance performs an that a reduced fee would apply with effect
and delivering annual review of from 1 September 2026, whereby a rate of
on the the service 0.60% would apply on net assets up to and
Company's levels of all including £400 million, 0.55% on net assets
investment third-party in excess of £400 million up to and
mandate; the service providers including £1 billion and 0.525% on net
Custodian and and concludes on assets in excess of £1 billion. This
Depositary in their suitability reduction in the management fee increases
respect of to continue in shareholders' investment returns and will
their duties their role. The reduce the ongoing charges ratio.
towards Board receives
safeguarding regular updates
the Company's from the AIFM,
assets; the Depositary,
Registrar in Registrar and
its Broker on an
maintenance of ongoing basis.
the Company's The Board works
share register closely with the
and dealing Manager to gain
with investor comfort that
queries; and relevant business
the Company's continuity plans
Broker in are in place and
respect of the operating
provision of effectively for
advice and all of the
acting as a Company's key
market maker service
for the providers.
Company's The Board
shares. monitors the fees
paid to third
party providers
and works closely
with the Manager
to ensure that
fees are
competitive and
in line with
market levels.
Board
composition
Issue Engagement Impact
The Board is During 2026 the As a result of the recruitment process, Mr
committed to Board engaged the Stephen Russell was appointed as a Director
ensuring that services of an of the Company on 2 November 2026.
its own external search The Board has considered the
composition consultant, recommendations of both the Parker Review,
brings an Cornforth which focuses on ethnic diversity, and the
appropriate Consulting, to FTSE Women Leaders Review, which focuses on
balance of identify gender diversity and the representation of
knowledge, potential women on boards and in senior leadership.
experience and candidates to As at the date of this report, the Board
skills, and replace Mr Baxter was comprised of four men and two women.
that it is who will retire Two Board Directors, Mr Baxter and Dr
compliant with following the Subacchi, have a tenure in excess of 9
best corporate Annual General years. In accordance with the Board's
governance Meeting on 10 succession plan, Mr Baxter will retire at
practice under December 2026. the forthcoming Annual General Meeting
the UK Code, The Nomination (AGM) and Dr Subacchi at the AGM in 2027.
including Committee agreed The Board currently meets the
guidance on the selection recommendations of the Parker Review but
tenure and the criteria and the not those of the FTSE Women Leaders Review.
composition of method of However, following Mr Baxter's retirement
the Board's selection, at the AGM, women will represent 40% of the
committees. recruitment and Board and the Board will therefore meet the
appointment. Review's recommendation.
The Board engaged Details of each Director's contribution to
an external firm the success and promotion of the Company
(BoardForms) to are set out in the Directors' Report
carry out an contained within the Annual Report and
independent Financial Statements and details of
external Directors' biographies can be found within
evaluation of the the Annual Report and Financial Statements.
Board in 2026. The Directors are not aware of any issues
All Directors are that have been raised directly by
subject to a shareholders in respect of Board
formal evaluation composition in the year under review.
process on an Details of the proxy voting results in
annual basis favour and against individual Directors' re
(more details and -election at the 2025 Annual General
the conclusions Meeting are given on the Manager's website
of the 2026 at www.blackrock.com/uk/brge.
evaluation
process are given
within the Annual
Report and
Financial
Statements). All
Directors stand
for re
-election/election
by shareholders
annually.
Shareholders may
attend the Annual
General Meeting
and raise any
queries in
respect of Board
composition or
individual
Directors in
person or may
contact the
Company Secretary
or the Chairman
using the details
provided within
the Annual Report
and Financial
Statements with
any issues.
[1 ]Alternative Performance Measures, see Glossary in the Annual Report and
Financial Statements.
Environmental, Social and Governance issues and approach
The Company's approach to ESG
Environmental, Social and Governance (ESG) issues can present both opportunities
and risks to long-term investment performance. Whilst the Company does not
exclude investment in stocks purely on ESG criteria, material ESG analytics are
integrated into the investment process when weighing up the risk and reward
benefits of investment decisions and the Board believes that communication and
engagement with portfolio companies is important and can lead to better outcomes
for shareholders and the environment than merely excluding investment in certain
areas.
More information on BlackRock's global approach to ESG integration, as well as
activity specific to the BlackRock Greater Europe Investment Trust plc
portfolio, is set out below. BlackRock has defined ESG integration as the
practice of incorporating financially material E, S and/or G data and
information and consideration of sustainability risks into investment decisions
with the objective of enhancing risk-adjusted returns. ESG integration does not
change the Company's investment objective. More information on sustainability
risks may be found in the AIFMD Fund Disclosures document of the Company
available on the Company's website at www.blackrock.com/uk/brge.
BlackRock's approach to material ESG integration
BlackRock's clients have a wide range of perspectives on a variety of issues and
investment themes, including sustainable and low-carbon transition investing.
Given the wide range of unique and varied investment objectives sought by its
clients, BlackRock's investment teams have a range of approaches to considering
financially material E, S, and/or G factors. As with other investment risks and
opportunities, the financial materiality of E, S and/or G considerations may
vary by issuer, sector, product, mandate, and time horizon. Depending on the
investment approach, this financially material E, S and/or G data or information
may help inform due diligence, portfolio or index construction, and/or
monitoring processes of client portfolios, as well as BlackRock's approach to
risk management.
BlackRock's ESG integration framework is built upon its history as a firm
founded on the principle of thorough and thoughtful risk management. Aladdin,
BlackRock's core risk management and investment technology platform, allows
investors to leverage financially material E, S and/or G data or information as
well as the combined experience of BlackRock's investment teams to effectively
identify investment opportunities and investment risks. BlackRock's heritage in
risk management combined with the strength of the Aladdin platform enables
BlackRock's approach to ESG integration.
BlackRock's ESG Integration Statement can be found at
https://www.blackrock.com/corporate/literature/publication/blk-esg-investment
-statement-web.pdf.
Investment Stewardship
BlackRock Greater Europe Investment Trust plc - Investment Stewardship
engagement with portfolio companies for the year ended 31 August 2026
The BlackRock European Equity team has excellent access to company management
teams and undertakes about 2,500 company meetings each year to identify high
quality, cash generative businesses with strong management teams that are able
to generate growth in a more challenging economic environment. In addition,
BlackRock also has a separate stewardship function. Effective from 1 January
2025, BlackRock's stewardship policies are being developed and implemented by
two independent, specialist teams: BlackRock Investment Stewardship (BIS) and
BlackRock Active Investment Stewardship (BAIS). BIS is responsible for
activities in relation to clients' assets managed by certain index equity
portfolio managers, while BAIS partners with BlackRock's active investment teams
on company engagement and voting in relation to their holdings. Since 1 January
2025, BAIS has overseen investment stewardship for the Company's portfolio
holdings.
The respective investment stewardship teams engage with companies, vote proxies
on behalf of clients, contribute to industry dialogue on stewardship and report
on their activities. The teams aim to maintain a globally consistent approach
while acknowledging the unique markets and sectors in which companies operate.
For the year to 31 August 2026, the BlackRock Active Investment stewardship team
at BlackRock engaged on a range of governance issues with the management teams
of 15 companies in the portfolio of BlackRock Greater Europe Investment Trust
plc, representing 33.0% of the portfolio holdings at 31 August 2026. Additional
information is set out in the table below and the charts contained within the
Annual Report and Financial Statements as well as the key engagement themes for
the meetings held in respect of the Company's portfolio holdings.
[][][][][][]
Year ended
31 August 2026
Number of engagements held[1] 20
Number of companies met[1] 15
% of equity investments covered[2] 33.0%
Shareholder meetings voted at[3] 42
Number of proposals voted on[3] 666
Number of votes against management[1] 19
% of total items voted represented by votes against management 2.9%
========
[1] Source: BlackRock as at 31 August 2026.
[2] Source: BlackRock. As a percentage of total portfolio holdings at 31
August 2026.
[3] Source: BlackRock, Institutional Shareholder Services as at 31 August
2026.
Investment stewardship policies
The benchmark investment stewardship policies, which include BIS' Global
Principles, regional voting guidelines and Engagement Priorities, and BAIS'
Global Engagement and Voting Guidelines, set out the core elements of corporate
governance that guide the investment stewardship teams' efforts. Each team takes
a globally consistent approach, while recognising the unique markets and sectors
in which companies operate.
These benchmark policies are reviewed annually to reflect changes in market
standards, regulations, and feedback from clients and companies.
BlackRock is committed to transparency in terms of disclosure of its stewardship
activities on behalf of clients. The investment stewardship teams publish their
voting policies to help BlackRock's clients understand their work to advance
clients' interests as investors in public companies. BlackRock's stewardship
policies and reporting are available at
www.blackrock.com/corporate/insights/investment-stewardship.
By order of the Board
LUCY DINA
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
2 November 2026
Related Party Transactons
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months'
notice. BFM has (with the Company's consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock Investment
Management (UK) Limited (BIM (UK)). Further details of the investment management
contract are disclosed in the Directors' Report contained within the Annual
Report and Financial Statements.
With effect from 1 September 2025, the investment management fee is levied
quarterly based on a tiered basis: 0.65% of month-end net assets up to and
including £400 million, 0.60% of month-end net assets in excess of £400 million
up to and including £1 billion and 0.525% of month-end net assets in excess of
£1 billion. The investment management fee for the year ended 31 August 2026
amounted to £3,632,000 (2025: £4,772,000). At the year end, £1,856,000 was
outstanding in respect of the management fee (2025: £1,192,000).
In addition to the above services, BIM (UK) provided the Company with marketing
services. The total fees for these services for the year ended 31 August 2026
amounted to £209,000 excluding VAT (2025: £101,000). Marketing fees of £257,000
excluding VAT were outstanding at 31 August 2026 (2025: £168,000).
During the year, the Manager pays the fees and expenses due to the Directors.
These amounts are then reimbursed by the Company for the payments made on its
behalf. As at 31 August 2026, an amount of £347,000 was payable to the Manager
in respect of Directors' fees (2025: £141,000).
The Company has an investment in the BlackRock Institutional Cash Series plc -
Euro Liquid Environmentally Aware Fund of £nil (2025: £16,221,000) which has
been presented in the financial statements as a cash equivalent.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
Disclosures of the Directors' interests in the ordinary shares of the Company
and fees and expenses payable to the Directors are set out in the Directors'
Remuneration Report contained within the Annual Report and Financial Statements.
At 31 August 2026, an amount of £17,000 (2025: £19,000) was outstanding in
respect of Directors' fees.
The Board currently consists of six non-executive Directors, all of whom are
considered to be independent of the Company's Manager. Provision 9 of the UK
Code which relates to the combination of the roles of the chairman and chief
executive does not apply as the Company has no executive directors. The UK Code
recommends that the Board should appoint one of the independent non-executive
directors to be the senior independent director to provide a sounding board for
the Chairman and to serve as an intermediary for the other Directors when
necessary. The Code states that the senior independent director should be
available to shareholders if they have concerns which contact through the normal
channel of the chairman has failed to resolve or for which such contact is
inappropriate. Dr Subacchi is the Company's Senior Independent Director. The
Board's primary purpose is to direct the Company to maximise shareholder value
within a framework of proper controls and in accordance with the Company's
investment objective.
Statement of Directors' Responsibilities in respect of the Annual Report and
Financial Statements
The Directors are responsible for preparing the Annual Report and the Financial
Statements in accordance with applicable law and regulations. Company law
requires the Directors to prepare financial statements for each financial year.
Under that law they have elected to prepare the financial statements in
accordance with applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
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 as at the end of each financial year and of the profit or
loss of the Company for that period. In preparing those financial statements,
the Directors are required to:
· present fairly the financial position, financial performance and cash
flows of the Company;
· select suitable accounting policies and then apply them consistently;
· present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
· make judgements and estimates that are reasonable and prudent;
· state whether applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained in the financial
statements; and
· prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
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 comply with the Companies Act 2006.
They 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 also responsible for preparing the Strategic Report, the
Directors' Report, the Directors' Remuneration Report, the Corporate Governance
Statement and the Report of the Audit and Management Engagement Committee in
accordance with the Companies Act 2006 and applicable regulations, including the
requirements of the Listing Rules and the Disclosure Guidance and Transparency
Rules. The Directors have delegated responsibility to the Manager for the
maintenance and integrity of the Company's corporate and financial information
included on the BlackRock website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Each of the Directors at the date of this report, whose names are listed within
the Annual Report and Financial Statements, confirms to the best of their
knowledge that:
· the Financial Statements, prepared in accordance with applicable
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and
· the Strategic Report contained in the Annual Report and Financial
Statements 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.
The 2024 UK Corporate Governance Code also requires Directors to ensure that the
Annual Report and Financial Statements are fair, balanced and understandable. In
order to reach a conclusion on this matter, the Board has requested that the
Audit and Management Engagement Committee advise on whether it considers that
the Annual Report and Financial Statements fulfils these requirements. The
process by which the Committee has reached these conclusions is set out in the
Audit and Management Engagement Committee's Report contained within the Annual
Report and Financial Statements. As a result, the Board has concluded that the
Annual Report and Financial Statements for the year ended 31 August 2026, taken
as a whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's position, performance,
business model and strategy.
For and on behalf of the Board
ANDREW IMPEY
Chairman
2 November 2026
Income Statement
for the year ended 31 August 2026
2026 2025
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on - 41,287 41,287 - (41,608) (41,608)
investments held
at fair value
through profit or
loss
Gains/(losses) on - 865 865 - (249) (249)
foreign exchange
Income from 3 12,169 - 12,169 9,222 - 9,222
investments held
at
fair value
through profit or
loss
Other income 3 54 - 54 1 - 1
------- ------- ------- ------- -------- --------
----- ----- ----- ----- ---- ----
Total 12,223 42,152 54,375 9,223 (41,857) (32,634)
income/(loss)
======= ======= ======= ======= ======= =======
Expenses
Investment 4 (726) (2,906) (3,632) (954) (3,818) (4,772)
management fee
Other operating 5 (1,013) (14) (1,027) (826) (15) (841)
expenses
------- ------- ------- ------- -------- --------
----- ----- ----- ----- ---- ----
Total operating (1,739) (2,920) (4,659) (1,780) (3,833) (5,613)
expenses
======= ======= ======= ======= ======= =======
Net profit/(loss) 10,484 39,232 49,716 7,443 (45,690) (38,247)
before finance
costs and
taxation
Finance costs (183) (732) (915) (297) (1,190) (1,487)
------- ------- ------- ------- -------- --------
----- ----- ----- ----- ---- ----
Net profit/(loss) 10,301 38,500 48,801 7,146 (46,880) (39,734)
before taxation
Taxation charge (2,232) - (2,232) (462) - (462)
------- ------- ------- ------- -------- --------
----- ----- ----- ----- ---- ----
Net profit/(loss) 7 8,069 38,500 46,569 6,684 (46,880) (40,196)
after taxation
Earnings/(loss) 7 8.74 41.71 50.45 6.89 (48.30) (41.41)
per ordinary
share
(pence)
======= ======= ======= ======= ======= =======
The total columns of this statement represent the Company's profit and loss
account. The supplementary revenue and capital accounts are both prepared under
guidance published by the Association of Investment Companies (AIC). All items
in the above statement derive from continuing operations. No operations were
acquired or discontinued during the year. All income is attributable to the
equity holders of the Company.
The net profit/(loss) after taxation for the year disclosed above represents the
Company's total comprehensive income/(loss).
Statement of Changes in Equity
for the year ended 31 August 2026
[][]
Notes Called Share premium Capital Special Capital
Revenue Total
up account redemption reserve reserves
reserve
share reserve
capital
£'000 £'000 £'000 £'000 £'000
£'000 £'000
For the year
ended 31
August 2026
At 31 August 118 85,325 130 34,141 437,981
11,384 569,079
2025
Total
comprehensive
income:
Net profit - - - - 38,500
8,069 46,569
for the year
Transaction
with owners,
recorded
directly to
equity:
Ordinary 8,9 - - - (31,655) -
- (31,655)
shares
repurchased
into treasury
Share 8,9 - - - (160) -
- (160)
repurchase
costs
Dividends 6 - - - - -
(6,654) (6,654)
paid[1]
------- ------------ ---------- -------- -------- -
------ --------
---- -- ---- ----
----- ----
-
At 31 August 118 85,325 130 2,326 476,481
12,799 577,179
2026
======= ======= ======= ======= =======
======= =======
For the year
ended 31
August 2025
At 31 August 118 85,325 130 58,331 484,862
11,534 640,300
2024
Total
comprehensive
(loss)/income:
Net - - - - (46,880)
6,684 (40,196)
(loss)/profit
for the
year
Transaction
with owners,
recorded
directly to
equity:
Ordinary 8,9 - - - (24,099) -
- (24,099)
shares
repurchased
into treasury
Share 8,9 - - - (91) (1)
- (92)
repurchase
costs
Dividends 6 - - - - -
(6,834) (6,834)
paid[2]
------- ------------ ---------- -------- -------- -
------ --------
---- -- ---- ----
----- ----
-
At 31 August 118 85,325 130 34,141 437,981
11,384 569,079
2025
======= ======= ======= ======= =======
======= =======
[1] Interim dividend paid in respect of the year ended 31 August 2026 of
1.75p per share was declared on 20 May 2026 and paid on 24 June 2026. Final
dividend paid in respect of the year ended 31 August 2025 of 5.40p per share was
declared on 4 November 2025 and paid on 19 December 2025.
[2] Interim dividend paid in respect of the year ended 31 August 2025 of
1.75p per share was declared on 6 May 2025 and paid on 18 June 2025. Final
dividend paid in respect of the year ended 31 August 2024 of 5.25p per share was
declared on 5 November 2024 and paid on 20 December 2024.
For information on the Company's distributable reserves, please refer to note 9
below.
Balance Sheet
as at 31 August 2026
[]
Notes 2026 2025
£'000 £'000
Non current assets
Investments held at fair 624,961 551,175
value through profit or
loss
Current assets
Current taxation asset 2,385 4,229
Debtors 543 640
Cash and cash equivalents - 576
- cash at bank
Cash and cash equivalents - 16,221
- cash fund[1]
------------ ------------
Total current assets 2,928 21,666
------------ ------------
Current liabilities
Cash and cash equivalents (47,733) (1,468)
- bank overdraft
Other creditors (2,977) (2,294)
------------ ------------
Total current liabilities (50,710) (3,762)
------------ ------------
Net current (47,782) 17,904
(liabilities)/assets
------------ ------------
Net assets 577,179 569,079
Total equity ------------ ------------
Called up share capital 8 118 118
Share premium account 9 85,325 85,325
Capital redemption reserve 9 130 130
Special reserve 9 2,326 34,141
Capital reserves 9 476,481 437,981
Revenue reserve 9 12,799 11,384
------------ ------------
Total shareholders' funds 7 577,179 569,079
------------ ------------
Net asset value per 643.30 598.05
ordinary share (pence)
======= =======
[1] Cash fund represents funds held on deposit with the BlackRock
Institutional Cash Series plc - Euro Liquid Environmentally Aware Fund.
Statement of Cash Flows
for the year ended 31 August 2026
[]
Note 2026 2025
£'000 £'000
Operating activities
Net profit/(loss) before taxation 48,801 (39,734)
Changes in working capital items:
Decrease in debtors 97 108
Increase/(decrease) in other 1,050 (3,131)
creditors
Other adjustments:
Finance costs 915 1,487
(Gains)/losses on investments held (41,287) 41,608
at fair value through profit or
loss
(Gains)/losses on foreign exchange (865) 249
Sale of investments held at fair 500,096 302,212
value through profit or loss
Purchase of investments held at (532,595) (203,164)
fair value through profit or loss
Taxation on investment income (501) (3,247)
Interest paid (915) (1,487)
Refund of withholding tax reclaims 113 1,656
------------ ------------
Net cash (used in)/generated from (25,091) 96,557
operating activities
Financing activities
Ordinary shares repurchased into (32,182) (24,003)
treasury
Dividends paid (6,654) (6,834)
------------ ------------
Net cash used in financing (38,836) (30,837)
activities
(Decrease)/increase in cash and (63,927) 65,720
cash equivalents
Effect of foreign exchange rate 865 (249)
changes
Cash and cash equivalents at start 15,329 (50,142)
of year
------------ ------------
Cash and cash equivalents at end of (47,733) 15,329
year
Comprised of:
Cash at bank - 576
Cash fund[1] - 16,221
Bank overdraft (47,733) (1,468)
------------ ------------
(47,733) 15,329
======= =======
1. Cash fund represents funds held on deposit with the BlackRock Institutional
Cash Series plc - Euro Liquid Environmentally Aware Fund.
Notes to the Financial Statements
for the year ended 31 August 2026
1. Principal activity
The Company was incorporated on 1 June 2004 and its principal activity is that
of an investment trust company within the meaning of Section 1158 of the
Corporation Tax Act 2010.
2. Significant accounting policies
The principal accounting policies adopted by the Company are set out below:
(a) Basis of preparation
The financial statements have been prepared on a going concern basis in
accordance with The Financial Reporting Standard applicable in the UK and
Republic of Ireland (FRS 102) and the revised Statement of Recommended Practice
- Financial Statements of Investment Trust Companies and Venture Capital Trusts
(SORP), issued by the Association of Investment Companies (AIC) in October 2019
and updated in July 2022, and the provisions of the Companies Act 2006.
Substantially, all of the assets of the Company consist of securities that are
readily realisable and, accordingly, the Directors are satisfied that the
Company has adequate resources to continue in operational existence for the
period to 30 November 2027, being a period of at least 12 months from the date
of approval of the financial statements, and therefore consider the going
concern assumption to be appropriate. The Directors have reviewed compliance
with covenants associated with the bank overdraft facility, income and expense
projections and the liquidity of the investment portfolio in making their
assessment.
The Directors have considered the impact of climate change on the value of the
investments included in the Financial Statements and have concluded that there
was no further impact of climate change to be considered as the investments are
valued based on market pricing as required by FRS 102.
None of the Company's other assets and liabilities were considered to be
potentially impacted by climate change.
The principal accounting policies adopted by the Company are set out below.
Unless specified otherwise, the policies have been applied consistently
throughout the year and are consistent with those applied in the preceding year.
All of the Company's operations are of a continuing nature.
The Company's financial statements are presented in Sterling, which is the
functional currency of the Company and the primary economic environment in which
the Company operates. All values are rounded to the nearest thousand pounds
(£'000) except where otherwise indicated.
(b) Presentation of Income Statement
In order to better reflect the activities of an investment trust company and in
accordance with guidance issued by the AIC, supplementary information which
analyses the Income Statement between items of a revenue and a capital nature
has been presented alongside the Income Statement.
(c) Segmental reporting
The Directors are of the opinion that the Company is engaged in a single segment
of business being investment business.
(d) Income
Dividends receivable on equity shares are treated as revenue for the year on an
ex-dividend basis. Where no ex-dividend date is available, dividends receivable
on or before the year end are treated as revenue for the year. Provisions are
made for dividends not expected to be received.
Special dividends are recognised on an ex-dividend basis and treated as capital
or revenue depending on the facts or circumstances of each particular dividend.
Dividends are accounted for in accordance with Section 29 of FRS 102 on the
basis of income actually receivable, without adjustment for tax credits
attaching to the dividend. Dividends from overseas companies continue to be
shown gross of withholding tax.
Deposit interest receivable is accounted for using the effective interest rate
method in accordance with Section 11 of FRS 102.
Where the Company has elected to receive its dividends in the form of additional
shares rather than in cash, the cash equivalent of the dividend is recognised as
revenue. Any excess in the value of the shares received over the amount of the
cash dividend is recognised in capital.
(e) Expenses
All expenses, including finance costs, are accounted for on an accruals basis.
Expenses have been charged wholly to the revenue account of the Income
Statement, except as follows:
· expenses which are incidental to the acquisition or disposal of an
investment are treated as capital. Details of transaction costs on the purchases
and sales of investments are disclosed in note 10 contained within the Annual
Report and Financial Statements;
· expenses are treated as capital where a connection with the maintenance
or enhancement of the value of the investments can be demonstrated; and
· the investment management fee and finance costs have been allocated 20%
to the revenue account and 80% to the capital account of the Income Statement in
line with the Board's expected long-term split of returns, in the form of income
and capital gains respectively, from the investment portfolio.
(f) Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on the taxable profit for the year.
Taxable profit differs from net profit as reported in the Income Statement
because it excludes items of income or expenses that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Company's liability for current tax is calculated using tax
rates that were applicable at the balance sheet date.
The current tax effect of different items of expenditure is allocated between
capital and revenue on the marginal basis using the Company's effective rate of
corporation tax for the accounting period.
Deferred taxation is recognised in respect of all timing differences at the
financial reporting date, where transactions or events that result in an
obligation to pay more taxation in the future or right to less taxation in the
future have occurred at the balance sheet date. Deferred taxation is measured on
a non-discounted basis, at the average tax rates that are expected to apply in
the periods in which the timing differences are expected to reverse based on tax
rates and laws that have been enacted or substantively enacted by the balance
sheet date. This is subject to deferred taxation assets only being recognised if
it is considered more likely than not that there will be suitable profits from
which the future reversal of the timing differences can be deducted.
(g) Investments held at fair value through profit or loss
The Company's investments are classified as held at fair value through profit or
loss in accordance with Sections 11 and 12 of FRS 102 and are managed and
evaluated on a fair value basis in accordance with its investment strategy.
All investments are classified upon initial recognition as held at fair value
through profit or loss. Purchases of investments are recognised on a trade date
basis. Sales are recognised at the trade date of the disposal and the proceeds
are measured at fair value, which is regarded as the proceeds of the sale less
any transaction costs.
The fair value of the financial investments is based on their quoted bid price
at the balance sheet date on the exchange on which the investment is quoted,
without deduction for the estimated future selling costs.
Unquoted investments are valued by the Directors at fair value using
International Private Equity and Venture Capital Valuation Guidelines. This
policy applies to all current and non-current asset investments of the Company.
Changes in the value of investments held at fair value through profit or loss
and gains and losses on disposal are recognised in the Income Statement as
`Gains or losses on investments held at fair value through profit or loss'. Also
included within this heading are transaction costs in relation to the purchase
or sale of investments.
The fair value hierarchy consists of the following three levels:
Level 1 - Quoted market price for identical instruments in active markets.
Level 2 - Valuation techniques using observable inputs.
Level 3 - Valuation techniques using significant unobservable inputs.
(h) Debtors
Debtors include sales for future settlement, other debtors and prepayments and
accrued income in the ordinary course of business. If collection is expected in
one year or less, they are classified as current assets. If not, they are
presented as non-current assets.
(i) Creditors
Creditors include purchases for future settlement, interest payable, share buy
back costs and accruals in the ordinary course of business. Creditors are
classified as creditors - amounts due within one year if payment is due within
one year or less (or in the normal operating cycle of business if longer). If
not, they are presented as creditors - amounts due after more than one year.
(j) Dividends payable
Under Section 32 of FRS 102, final dividends should not be accrued in the
financial statements unless they have been approved by shareholders before the
balance sheet date. Dividends payable to equity shareholders are recognised in
the Statement of Changes in Equity when they have been approved by shareholders
and have become a liability of the Company. Interim dividends are only
recognised in the financial statements in the period in which they are paid.
(k) Cash and cash equivalents
Cash comprises cash in hand and on demand deposits. Cash equivalents include
bank overdrafts repayable on demand and short term, highly liquid investments,
that are readily convertible to known amounts of cash and that are subject to an
insignificant risk of changes in value.
The Company's investment in the cash fund is managed as part of the Company's
investment policy and, accordingly, the investment is managed as part of the
Company's cash and cash equivalents as defined under FRS 102 and is presented as
a cash equivalent in the Financial Statements.
(l) Foreign currency translation
In accordance with Section 30 of FRS 102, the Company is required to nominate a
functional currency being the currency in which the Company predominately
operates. The functional and reporting currency is Sterling, reflecting the
primary economic environment in which the Company operates. Transactions in
foreign currencies are translated into Sterling at the rates of exchange ruling
on the date of the transaction. Foreign currency monetary assets and liabilities
are translated into Sterling at the rates of exchange ruling at the balance
sheet date. Profits and losses thereon are recognised in the capital account of
the Income Statement and taken to the capital reserves.
(m) Share repurchases, share reissues and new share issues
Shares repurchased and subsequently cancelled - share capital is reduced by the
nominal value of the shares repurchased and the capital redemption reserve is
correspondingly increased in accordance with Section 733 of the Companies Act
2006. The full cost of the repurchase is charged to the special reserve.
Shares repurchased and held in treasury - the full cost of the repurchase is
charged to the special reserve.
Where treasury shares are subsequently reissued:
· amounts received to the extent of the repurchase price are credited to
the special reserve and capital reserves based on a weighted average basis of
amounts utilised from these reserves on repurchases; and
· any surplus received in excess of the repurchase price is taken to the
share premium account.
Where new shares are issued, the par value is taken to called up share capital
and amounts received to the extent of any surplus received in excess of the par
value are taken to the share premium account.
Share issue costs are charged to the share premium account. Costs on share
reissues are charged to the special reserve and capital reserves.
(n) Bank borrowings
Bank overdrafts are recorded as the proceeds received. Finance charges are
accounted for on an accruals basis in the Income Statement.
(o) Critical accounting estimates and judgements
The Company makes estimates and assumptions concerning the future. The resulting
accounting estimates and assumptions will, by definition, seldom equal the
related actual results. Estimates and judgements are regularly evaluated and are
based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The
Directors do not believe that any accounting judgements or estimates have a
significant risk of causing a material adjustment to the carrying amount of
assets and liabilities within the next financial year.
3. Income
2026 2025
£'000 £'000
Investment income:
UK dividends - 656
Overseas dividends 11,712 8,442
Overseas special dividends 457 124
------------ ------------
Total investment income 12,169 9,222
------------ ------------
Other income:
Interest from cash fund 53 -
Interest received 1 1
------------ ------------
Total other income 54 1
------------ ------------
Total 12,223 9,223
======= =======
Dividends and interest received in cash during the year amounted to £11,931,000
and £54,000 respectively (2025: £6,719,000 and £1,000).
No special dividends have been recognised in capital during the year (2025:
£nil).
4. Investment management fee
2026 2025
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment 726 2,906 3,632 954 3,818 4,772
management
fee
------- ------- ------- ------- ------------ ------------
----- ----- ----- -----
Total 726 2,906 3,632 954 3,818 4,772
======= ======= ======= ======= ======= =======
Up to 31 August 2025, the investment management fee was levied quarterly based
on a tiered basis: 0.85% per annum of the month-end net asset value up to £350
million and 0.75% per annum of the month-end net asset value above £350 million.
With effect from 1 September 2025, the Company's annual management fee was
reduced to the following tiers: 0.65% of month-end net assets up to and
including £400 million, 0.60% of month-end net assets in excess of £400 million
up to and including £1 billion and 0.525% of month-end net assets in excess of
£1 billion.
The investment management fee is allocated 20% to the revenue account and 80% to
the capital account of the Income Statement. There is no additional fee for
company secretarial and administration services.
5. Other operating expenses
[][][][][]
2026 2025
£'000 £'000
Allocated to revenue:
Broker fees 49 48
Custody fees 66 68
Depositary fees 66 68
Audit fees[1] 59 59
Registrar's fees 106 98
Directors' emoluments[2] 215 207
Marketing fees 142 101
Marketing fees - under accrual for prior years[3] 67 -
Postage and printing fees 59 59
AIC fees 29 23
Legal and professional fees 18 27
Stock exchange listing fees 39 37
Write back of prior year expense accruals[4] - (10)
Other administration costs 98 41
------------ ------------
Total revenue expenses 1,013 826
------------ ------------
Allocated to capital:
Custody transaction costs[5] 14 15
Total capital expenses 14 15
------------ ------------
Total 1,027 841
======= =======
[]
2026 2025
% %
Ongoing charges[6 ] 0.80 0.95
======= =======
[1] No non-audit services are provided by the Company's auditors (2025:
none).
[2] Further information on Directors' emoluments can be found in the
Directors' Remuneration Report contained within the Annual Report and Financial
Statements. The Company has no employees.
[3] Marketing expenses under accrued for prior years of £67,000 have been
expensed in the current year (2025: £nil).
[4] No expenses were written back in the year ended 31 August 2026 (2025:
legal fees and other administration costs).
[5] For the year ended 31 August 2026, expenses of £14,000 (2025: £15,000)
were charged to the capital account of the Income Statement. These relate to
transaction costs charged by the custodian on sale and purchase trades.
[6] The Company's ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating expenses,
excluding finance costs, direct transaction costs, custody transaction charges,
VAT recovered, taxation, prior year expenses written back and certain non
-recurring items. Alternative Performance Measure, see Glossary contained within
the Annual Report and Financial Statements.
6. Dividends
2026 2025
Dividends paid on equity shares: £'000 £'000
Year ended 31 August 2024
Final dividend of 5.25p paid on 20 December 2024 - 5,154
------------ ------------
Year ended 31 August 2025
Interim dividend of 1.75p paid on 18 June 2025 - 1,680
Final dividend of 5.40p paid on 19 December 2025 5,060 -
------------ ------------
Year ended 31 August 2026
Interim dividend of 1.75p paid on 24 June 2026 1,594 -
------------ ------------
------------ ------------
Accounted for in the financial statements 6,654 6,834
======= =======
The Directors have proposed a final dividend of 6.25p per share in respect of
the year ended 31 August 2026. The final dividend will be paid on 18 December
2026, subject to shareholders' approval on 10 December 2026, to shareholders on
the Company's register on 20 November 2026. The proposed final dividend has not
been included as a liability in these financial statements as final dividends
are only recognised in the financial statements when they have been approved by
shareholders.
The total dividends payable in respect of the year which form the basis of
determining retained income for the purpose of Section 1158 of the Corporation
Tax Act 2010 and Section 833 of the Companies Act 2006, and the amount proposed
for the year ended 31 August 2026, meet the relevant requirements as set out in
this legislation.
[]
2026 2025
Dividends paid or proposed on equity shares: £'000 £'000
Interim paid of 1.75p (2025: 1.75p) 1,594 1,680
Final proposed of 6.25p[1] (2025: 5.40p) 5,546 5,075
------------ ------------
Total for the year 7,140 6,755
======= =======
[1] Based on 88,739,015 ordinary shares (excluding treasury shares) in
issue on 29 October 2026.
All dividends paid or payable are distributed from the Company's current year
revenue profits and, if required, from brought forward revenue reserves.
7. Earnings and net asset value per ordinary share
Revenue, capital earnings/(loss) and net asset value per ordinary share are
shown below and have been calculated using the following:
2026 2025
Net revenue profit attributable to ordinary 8,069 6,684
shareholders (£'000)
Net capital profit/(loss) attributable to ordinary 38,500 (46,880)
shareholders (£'000)
------------ ------------
Total profit/(loss) attributable to ordinary 46,569 (40,196)
shareholders (£'000)
------------ ------------
Total shareholders' funds (£'000) 577,179 569,079
------------ ------------
Earnings per share
The weighted average number of ordinary shares in 92,298,842 97,066,146
issue during the year on which the earnings per
ordinary share was calculated was:
The actual number of ordinary shares in issue at 89,721,312 95,155,422
the end of the year on which the net asset value
per ordinary share was calculated was:
Calculated on weighted average number of ordinary
shares:
Revenue earnings per share (pence) - basic and 8.74 6.89
diluted
Capital earnings/(loss) per share (pence) - basic 41.71 (48.30)
and diluted
------------ ------------
Total earnings/(loss) per share (pence) - basic 50.45 (41.41)
and diluted
======= =======
As at 31 August 2026 As at 31 August 2025
Net asset value per share (pence) 643.30 598.05
Ordinary share price (pence) 610.00 570.00
======= =======
There were no dilutive securities at the year end (2025: none).
8. Called up share capital
Ordinary Treasury Total Nominal
shares shares shares value
number number number £'000
Allotted, called up and fully
paid share capital comprised:
Ordinary shares of 0.1 pence
each:
At 31 August 2024 99,332,161 18,596,777 117,928,938 118
----------- ---------- ----------- ----------
------ ------- ------ -------
Ordinary shares repurchased (4,176,739) 4,176,739 - -
into treasury
At 31 August 2025 95,155,422 22,773,516 117,928,938 118
----------- ---------- ----------- ----------
------ ------- ------ -------
Ordinary shares repurchased (5,434,110) 5,434,110 - -
into treasury
At 31 August 2026 89,721,312 28,207,626 117,928,938 118
========== ========== ========== ==========
During the year ended 31 August 2026, 5,434,110 ordinary shares (2025:
4,176,739) were repurchased and held in treasury for a net consideration after
expenses of £31,815,000 (2025: £24,191,000).
Since 31 August 2026 and up to the latest practicable date of 29 October 2026, a
further 982,297 ordinary shares have been repurchased for a net consideration
after expenses of £5,727,000.
9. Reserves
[][]
Distributable
Reserves[1]
Share Capital Special Capital Capital
Revenue
premium redemption reserve[2] reserve reserve
reserve
account reserve (arising on (arising on
investments revaluation
sold) of
investments
held)
£'000 £'000 £'000 £'000 £'000
£'000
At 31 August 85,325 130 58,331 255,347 229,515
11,534
2024
Movement
during the
year:
Total
comprehensive
income/(loss):
Net - - - 53,218 (100,098)
6,684
profit/(loss)
for the
year
Transactions
with owners,
recorded
directly to
equity:
Ordinary - - (24,099) - -
-
shares
repurchased
into treasury
Share - - (91) (1) -
-
repurchase
costs
Dividends - - - - -
(6,834)
paid during
the
year
------- ---------- ------------ ----------- ----------- ---
----
----- -- - - -
----
At 31 August 85,325 130 34,141 308,564 129,417
11,384
2025
------- ---------- ------------ ----------- ----------- ---
----
----- -- - - -
----
Movement
during the
year:
Total
comprehensive
income/(loss):
Net - - - 84,031 (45,531)
8,069
profit/(loss)
for the
year
Transactions
with owners,
recorded
directly to
equity:
Ordinary - - (31,655) - -
-
shares
repurchased
into treasury
Share - - (160) - -
-
repurchase
costs
Dividends - - - - -
(6,654)
paid during
the
year
------- ---------- ------------ ----------- ----------- ---
----
----- -- - - -
----
At 31 August 85,325 130 2,326 392,595 83,886
12,799
2026
======= ======= ======= ======= =======
=======
[1 ]The share premium account and capital redemption reserve of £85,325,000
and £130,000 (2025: £85,325,000 and £130,000) are not distributable reserves
under the Companies Act 2006. In accordance with ICAEW Technical Release 02/17BL
on Guidance on Realised and Distributable Profits under the Companies Act 2006,
the special reserve and capital reserves may be used as distributable reserves
for all purposes and, in particular, the repurchase by the Company of its
ordinary shares and for payments such as dividends. In accordance with the
Company's Articles of Association, the special reserve of £2,326,000 (2025:
£34,141,000), capital reserves of £476,481,000 (2025: £437,981,000) and the
revenue reserve of £12,799,000 (2025: £11,384,000) may be distributed by way of
dividend. The gain on the capital reserve arising on the revaluation of
investments held of £83,886,000 (2025: £129,417,000) is subject to fair value
movements and may not be readily realisable at short notice. The
distributability of this portion of the reserve has not been analysed as it is
complex to determine. This complexity is explained further in ICAEW Technical
Release 02/17BL, which offers guidance on the realised and distributable profits
under the Companies Act 2006, as such it may not be entirely distributable. The
investments are subject to financial risks, as such the capital reserves
(arising on investments sold) and the revenue reserve may not be entirely
distributable if a loss occurred during the realisation of these investments.
As at 31 August 2026, the Company's distributable reserves excluding capital
reserves on the revaluation of investments amounted to £407,720,000 (2025:
£354,089,000).
[2] Relates to amount transferred from the share premium account to a
special reserve pursuant to Court approval received on 15 October 2004.
10. Valuation of financial instruments
Financial assets and financial liabilities are either carried in the Balance
Sheet at their fair value (investments) or at an amount which is a reasonable
approximation of fair value (due from brokers, dividends and interest
receivable, due to brokers, accruals, cash at bank and bank overdrafts). Section
34 of FRS 102 requires the Company to classify fair value measurements using a
fair value hierarchy that reflects the significance of inputs used in making the
measurements. The valuation techniques used by the Company are explained in the
accounting policies note to the Financial Statements contained within the Annual
Report and Financial Statements.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset.
The fair value hierarchy has the following levels:
Level 1 - Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted
prices are readily 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 Company
does not adjust the quoted price for these instruments.
Level 2 - Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for similar
instruments in markets that are considered less active, or other valuation
techniques where significant inputs are directly or indirectly observable from
market data.
Level 3 - Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes
inputs not based on market data and these inputs could have a significant impact
on the instrument's valuation.
This category also includes instruments that are valued based on quoted prices
for similar instruments where significant entity determined adjustments or
assumptions are required to reflect differences between the instruments and
instruments for which there is no active market. The Investment Manager
considers observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary, and
provided by independent sources that are actively involved in the relevant
market.
The level in the fair value hierarchy within which the fair value measurement is
categorised in its entirety is determined on the basis of the lowest level input
that is significant to the fair value measurement. If a fair value measurement
uses observable inputs that require significant adjustment based on unobservable
inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset or
liability including an assessment of the relevant risks including but not
limited to credit risk, market risk, liquidity risk, business risk and
sustainability risk. The determination of what constitutes `observable' inputs
requires significant judgement by the Investment Manager and these risks are
adequately captured in the assumptions and inputs used in the measurement of
Level 3 assets or liabilities.
Fair values of financial assets and financial liabilities
The table below is an analysis of the Company's financial instruments measured
at fair value at the balance sheet date.
Level 1 Level 2 Level 3 Total
Financial assets at fair £'000 £'000 £'000 £'000
value through profit or
loss
Equity investments at 31 624,960 - 1 624,961
August 2026
Equity investments at 31 551,174 - 1 551,175
August 2025
-------- ------------ ------------ ------------
----
The Company held two Level 3 securities as at 31 August 2026 (2025: two).
A reconciliation of fair value 2026 2025
measurement in Level 3 is set out
below.
Level 3 financial assets at fair value
through profit or loss
£'000 £'000
Opening fair value 1 1
Loss on investments included in gains - -
on investments in the Income Statement
------------ ------------
Closing balance 1 1
======= =======
As at 31 August 2026, the investments in Sberbank and Lukoil have been valued at
a nominal value of £0.01 due to the closure of the Moscow Stock Exchange to
overseas investors and the secondary listings of depositary receipts of Russian
companies having been suspended from trading. At the time of the invasion of
Ukraine on 23 February 2022, the original book cost of these holdings was £28.7
million and its carrying value was £20.7 million and these amounts were fair
valued to a nominal value of £0.01 on 3 March 2022.
For exchange listed equity investments, the quoted price is the bid price.
Substantially, all investments are valued based on unadjusted quoted market
prices. Where such quoted prices are readily available in an active market, such
prices are not required to be assessed or adjusted for any business risks,
including climate change risk, in accordance with the fair value related
requirements of the Company's financial reporting framework.
11. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months'
notice. BFM has (with the Company's consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock Investment
Management (UK) Limited (BIM (UK)). Further details of the investment management
contract are disclosed in the Directors' Report contained within the Annual
Report and Financial Statements.
With effect from 1 September 2025, the investment management fee is levied
quarterly based on a tiered basis: 0.65% of month-end net assets up to and
including £400 million, 0.60% of month-end net assets in excess of £400 million
up to and including £1 billion and 0.525% of month-end net assets in excess of
£1 billion. The investment management fee for the year ended 31 August 2026
amounted to £3,632,000 (2025: £4,772,000). At the year end, £1,856,000 was
outstanding in respect of the management fee (2025: £1,192,000).
In addition to the above services, BIM (UK) provided the Company with marketing
services. The total fees for these services for the year ended 31 August 2026
amounted to £209,000 excluding VAT (2025: £101,000). Marketing fees of £257,000
excluding VAT were outstanding at 31 August 2026 (2025: £168,000).
During the year, the Manager pays the fees and expenses due to the Directors.
These amounts are then reimbursed by the Company for the payments made on its
behalf. As at 31 August 2026, an amount of £347,000 was payable to the Manager
in respect of Directors' fees (2025: £141,000).
The Company has an investment in the BlackRock Institutional Cash Series plc -
Euro Liquid Environmentally Aware Fund of £nil (2025: £16,221,000) which has
been presented in the financial statements as a cash equivalent.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
12. Related party disclosure
Disclosures of the Directors' interests in the ordinary shares of the Company
and fees and expenses payable to the Directors are set out in the Directors'
Remuneration Report contained within the Annual Report and Financial Statements.
At 31 August 2026, an amount of £17,000 (2025: £19,000) was outstanding in
respect of Directors' fees.
Significant holdings
The following investors are:
a. funds managed by the BlackRock Group or are affiliates of BlackRock, Inc.
(Related BlackRock Funds); or
b. investors (other than those listed in (a) above) who held more than 20% of
the voting shares in issue in the Company and are, as a result, considered to be
related parties to the Company (Significant Investors).
Total % of Total % of shares held by Number of Significant
shares Significant Investors who Investors who are not
held by are affiliates of
Related not affiliates of BlackRock BlackRock Group or
BlackRock Group or BlackRock, Inc. BlackRock, Inc.
Funds
As at 31 1.1 n/a n/a
August
2026
As at 31 1.3 n/a n/a
August
2025
============== ============== ==============
13. Contingent liabilities
There were no contingent liabilities at 31 August 2026 (2025: none).
14. Publication of non-statutory accounts
The financial information contained in this announcement does not constitute
statutory accounts as defined in the Companies Act 2006. The Annual Report and
Financial Statements for the year ended 31 August 2026 will be filed with the
Registrar of Companies after the Annual General Meeting.
The figures set out above have been reported upon by the auditor, whose report
for the year ended 31 August 2026 contains no qualification or statement under
Section 498(2) or (3) of the Companies Act 2006.
The comparative figures are extracts from the audited financial statements of
BlackRock Greater Europe Investment Trust plc for the year ended 31 August 2025,
which have been filed with the Registrar of Companies. The report of the auditor
on those financial statements contained no qualification or statement under
Section 498 of the Companies Act.
15. Annual report
Copies of the Annual Report and Financial Statements will be published shortly
and will be available from the registered office, c/o The Company Secretary,
BlackRock Greater Europe Investment Trust plc, 12 Throgmorton Avenue, London
EC2N 2DL.
16. Annual General Meeting
The Annual General Meeting of the Company will be held at the offices of
BlackRock, 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 10 December 2026
at 12 noon.
ENDS
The Annual Report will also be available on the BlackRock website at
www.blackrock.com/uk/brge. Neither the contents of the Manager's website nor the
contents of any website accessible from hyperlinks on the Manager's website (or
any other website) is incorporated into, or forms part of, this announcement.
For further information please contact:
Sarah Beynsberger, Director, Closed End Funds, BlackRock Investment Management
(UK) Limited
Tel: 020 7743 3000
12 Throgmorton Avenue
London
EC2N 2DL
Press enquiries:
Ed Hooper, Lansons Communications
Tel: 020 7294 3620
E-mail: [email protected] or [email protected]
2 November 2026
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The following files are available for download:
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BlackRock Greater Europe Investment Trust Plc - Final Results
BlackRock Greater Europe Investment Trust PLC on 6ix
Earlier from BlackRock Greater Europe Investment Trust
- Total Voting Rights
- Implementation of Strategic Initiatives
- Establishment of Committees
- Net Asset Value(s)
- BlackRock Greater Europe Investment Trust Plc - Transaction in Own Shares
Later from BlackRock Greater Europe Investment Trust
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