Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.hendersonsmallercompanies.com
The Henderson Smaller Companies Investment Trust plc
Registered as an investment company in England and Wales
Registered office
201 Bishopsgate,
London EC2M 3AE
ISIN/SEDOL
Ordinary shares:
GB0009065060 / 0906506
Companies House
registration number
00025526
London Stock Exchange
(TIDM) Code
HSL
Global Intermediary
Identification Number (GIIN)
WZD8S7.99999.SL.826
Legal Entity Identifier (LEI)
213800NE2NCQ67M2M998
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The Henderson Smaller Companies
Investment Trust plc
Investing in the growth potential of smaller UK companies
Annual Report 2026
The Henderson Smaller Companies Investment Trust plc – Annual Report 2026
Contents
Strategic Report
1 About the Company
2 At a glance
3 Why invest in UK smaller companies?
4 Approach to UK smaller companies
5 Manager: Janus Henderson Investors
6 Performance summary
8 Chair’s Statement
12 Fund Managers’ Report
19 Portfolio
22 Case studies
24 Business model
27 Principal risks and uncertainties
29 Measuring the Company’s performance
31 Section 172 Statement
33 Board decision making
34 ESG Report
38 Viability Statement
Governance
40 Directors and Fund Managers
43 Corporate Governance Report
49 Audit and Risk Committee Report
52 Nomination Committee Report
55 Management Engagement Committee
Report
56 Directors’ Remuneration Report
59 Directors’ Report
62 Statement of Directors’ Responsibilities
Financial Statements
64 Independent Auditor’s Report
70 Statement of Comprehensive Income
71 Statement of Changes in Equity
72 Balance Sheet
73 Statement of Cash Flows
74 Notes to the Financial Statements
Additional Information
91 Glossary
93 Alternative performance measures
95 General shareholder information
96 Historical record
AGM Notice
98 Notice of Annual General Meeting
105 Corporate information
www.hendersonsmallercompanies.com
Annual General Meeting (AGM)
The Board welcomes shareholders to attend the AGM at
11.30 am on 6 October 2026 either in person or online. Scan the
QR code for more details and to register your attendance.
Keeping in touch
Scan the QR code to receive the latest Company updates,
market insights, event invitations and more.
Please send any general enquiries about the Company to
itsecretariat@janushenderson.com.
A video in which the Fund Manager
discusses the Company’s results and
performance during the year will be
available from 30 July 2026 at
www.hendersonsmallercompanies.com.
About the Company
Your Company is managed by Janus
Henderson Investors. The Manager aims
to capture the growth potential of the
UK’s smaller listed companies.
Smaller companies grow into larger companies, and
those which grow tend to have a blend of a good
business model and a strong management team.
The Fund Managers use a combination of company
meetings, economic analysis and detailed research
to build a diverse portfolio of growing businesses in
the UK.
The Fund Managers’ goal is to use these unique
insights to take advantage of the information gap
for smaller companies – where there is relatively
little professional analysis available – to produce
investment growth for shareholders over the
long term.
Purpose
The Company’s purpose is to provide shareholders
with long-term growth through investing in UK
smaller companies and making this form of
investment accessible to investors, both large
and small.
See p.24 Business model
Smaller companies are where innovation, entrepreneurship and growth
often come together.
Across the UK market, many smaller businesses are developing new technologies,
disrupting established industries or building leading positions in specialist niches.
The Company invests in a carefully selected portfolio of high-quality smaller businesses,
seeking to identify those with the potential to become the next generation of UK success
stories. Through a long-term, actively managed approach, it aims to recognise these
opportunities early and deliver attractive long-term value for shareholders.
The long-term drivers of UK small
caps are still very much intact.
Small caps exhibit faster organic
growth than large caps, tend to
have higher operating leverage,
offer exposure to new technologies
and services, and historically have
benefitted from inbound mergers
and acquisitions. Regardless of
the direction of interest rates, we
believe good smaller companies
with resilient business models that
demonstrate a combination of
strong earnings momentum and
attractive valuations can generate
superior returns.”
See p.12 Fund Managers’ Report
Cassie Herlihy
Deputy Fund
Manager
Indri van Hien
Fund Manager
Awards
Governance
Financial
Statements
Additional
Information AGM Notice
1
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
The Henderson Smaller Companies Investment Trust plc
Investment Objective
The Company aims to maximise shareholders’ total returns (capital and income)
by investing in smaller companies that are quoted in the United Kingdom.
Portfolio holdings
83 (2025: 96)
Investment focus
Total return
Regional focus
UK
The UK’s most dynamic smaller companies
Seeking opportunities for capital and dividend growth
at the right price across UK small and mid-caps.
See p.19 Analysis of portfolio by subsector
Ongoing charges
1
0.53%
As at 31 May 2026
2025: 0.45%
Net assets
£559m
As at 31 May 2026
2025: £634m
Dividend yield
2
3.2%
As at 31 May 2026
2025: 3.3%
At a glance
See p.20 Portfolio holdings
See p.6 Performance summary
Industrials
34.7%
Consumer Discretionary
19.2%
Financials
15.5%
Technology
10.4%
Health Care
6.2%
Basic Materials
5.1%
Energy
3.9%
Real Estate
3.4%
Telecommunications
0.8%
Consumer Staples
0.8%
1 This is an ‘alternative performance measure’, calculated using the Association of Investment Companies methodology, and explained on page 93. It is also
a ‘KPI’, which is a key performance indicator. KPIs are used to measure the success of your Company in meeting its objective, and by the directors to
evaluate the performance of the Manager. See pages 29-30
2 Based on the dividends paid or recommended for the year and the share price at the year end, being the interim of 7.5p and final dividend of 21.5p. See also
alternative performance measures on page 94
Sources: Janus Henderson. A glossary of terms and alternative performance measures are included on pages 91-94
2
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
The data behind
UK smaller companies
Since 2001, UK listed smaller companies have
outperformed the wider market by:
+2.03% annualised
1
Faster growing
Mid-cap companies have recorded faster
organic growth than larger companies since
2002, based on earnings per share.
2
Earnings grew:
6.5% in the FTSE 100
6.9% in the FTSE 250
1, 3
Takeover targets
UK smaller companies are popular takeover
targets for businesses around the world. The
average proportion (by market capitalisation)
of the UK small cap index acquired each year
shows this:
6.9% of the FTSE Small Cap
5.6% of the FTSE 250
1.2% of the FTSE 100
3
Why invest in UK smaller companies?
1 Source: Bloomberg, Janus Henderson Investors as at 30 June 2026.
Reflects annualised performance of Deutsche Numis Smaller
Companies Index vs FTSE All-Share 2002 to July 2026
2 Measured on the basis of the compound annual growth rate of
earnings per share. Calculated from reported annual corporate
earnings beginning in 2002. 2026 is an estimate based on prior trends
3 Source: Bloomberg, Janus Henderson Investors, from 31 Dec 2000 to
30 June 2026
A whole new playing field
Many of the UK’s smaller businesses operate in fields
untouched by larger entities. Whether in whole sectors,
subsectors or niches, investors can gain exposure to
different areas of the economy through investing in smaller
companies. This opportunity is reflected in the number of
UK smaller companies taken over by larger businesses.
Runway for growth
Historically, smaller companies have outperformed their
larger peers. Since 2001 (to 30 June 2026), smaller
companies have generated an annualised total return
of 7.8%, while the wider UK market has generated 5.8%
1
.
This reflects the potential pace of growth at this early
stage. A third of today’s largest UK companies began life
as quoted smaller companies within the last 20 years.
However, this opportunity can come with greater possible
downside risk, meaning that smaller companies are
generally considered a longer-term investment.
Supportive business environment
For our smaller businesses, operating in the world’s
fifth-largest economy provides a solid foundation, from
a standout corporate governance regime to the world’s
central timezone. They also benefit from an autonomous
monetary policy, established professional services and a
robust legal framework.
Small but mighty
Smaller companies are often associated with risky
start-ups, but many of the UK’s smaller businesses are
household names. From high street retailers to online
review providers, these businesses are leaders in their
niches. Their smaller size gives them the flexibility to
respond to changing market conditions.
Innovation without the (ad)venture
While smaller listed companies offer a different
proposition to venture capital, it is still possible to invest
in innovation through their equity. Whether it’s cloud-
services for industry niches, animal genetics or precision
accuracy tools used in semi-conductor manufacturing,
UK-listed companies are at the cutting edge.
Governance
Financial
Statements
Additional
Information AGM Notice
3
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
The Fund Managers’ approach to UK smaller companies
Keeping a close eye
While we typically aim to hold stocks for multi-year periods, we monitor our portfolio holdings
closely. This includes conducting ongoing company meetings with management and tracking
competitors. Smaller companies are often more sensitive to the macroeconomic backdrop –
our in-house research and economic expertise help us keep on top of these changes.
Characterising a good investment
Our deep experience with smaller companies has informed our understanding of what makes
a ‘good’ company. This has resulted in a simple formula: a good business model plus a strong
management team can lead to earnings momentum. A good business model could include
high recurring revenues (like subscriptions) or a hard-to-substitute product. Our in-house
research capabilities enable us also to assess non-financial metrics including governance, a
company’s peers and its competitors. When this complete picture is coupled with a reasonable
price, we may be willing to invest.
Meeting companies and making visits
A core element of our process is getting to know the companies in which we invest. Compared
to larger companies, there is very little investment analysis available for smaller companies.
To plug this gap, we conduct over 300 company meetings per year, including repeated
meetings with some. This enables us to build our own perspective on a company, the
confidence of its management and the reality of, for example, its factory-floor operations.
Building a portfolio
Having followed these steps, we end up with a portfolio of around 80 companies. We seek
diversity across the industries in which we invest and companies with revenues sourced from all
over the world. Our aim is to focus on the companies where we have the highest conviction, while
avoiding becoming too large a shareholder or being penned in by a stock that is difficult to sell.
Narrowing the universe
From a universe of over a thousand companies, we exclude those that are too small (with a
market capitalisation below £150 million), unprofitable, excessively leveraged, or poorly
managed, as they do not meet our investment criteria. This process leaves us with around 200
potential stocks for the portfolio on which we undertake fundamental analysis using our 4Ms
process. We don’t look at companies through the lens of sector themes, as we don’t think this
works for smaller companies that often operate in unique niches.
Knowing when to sell
Should a company meeting or our own analysis reveal a deterioration in our investment
case, we will sell the holding as efficiently as market conditions allow. Equally, when market
conditions shift significantly, we will rebalance the portfolio as needed.
4
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Janus Henderson Investors
The Manager
The Henderson Smaller Companies Investment Trust plc
is managed by Janus Henderson Investors.
Janus Henderson is a global asset manager with over 350 investment
professionals and 27 offices globally, employing over 2,000 people and
managing £363.7bn of client assets.
A deep history in UK smaller companies
Janus Henderson Investors has extensive experience of investing in UK smaller
companies. It has managed Henderson Smaller Companies Investment Trust
since 1992, when Henderson acquired Touche Remnant. Before then, Touche
Remnant, and firms from which it evolved, managed the trust since its creation
in 1887.
The fund management team benefits from the insights of around 70 analysts
across different sectors and regions, including European counterparts, and
health and technology sector specialists.
The team’s long-held philosophy focuses on finding future growth potential
at a reasonable price. This philosophy is embedded in the team’s culture.
Across their funds, the fund management team invests around £1bn into
UK smaller companies.
Investment trusts, understood
Janus Henderson has been involved in investment trusts since Henderson’s
foundation in 1934. It is one of the largest investment trust asset managers in
the UK, and currently manages nine investment trusts. As a result, Henderson
Smaller Companies Investment Trust benefits from the support of a dedicated
investment trust team, including specialised company secretarial, accounting,
marketing and sales support.
Assets Under
Management
£363.7bn
Employees
+2,000
Offices globally
27
Investment
professionals
350+
Source: Janus Henderson
Investors at 31 March 2026
The Henderson Smaller Companies Investment
Trust plc’s history
Incorporated
as The
Trustees,
Executors
and
Securities
Insurance
Corporation
Name
changed to
The
Trustees
Corporation
Appointed
Touche,
Remnant
& Co. as
managers
Began
specialising
in smaller
companies.
Renamed
TR Trustees
Corporation
PLC
Touche,
Remnant &
Co.
acquired by
Henderson
Name
changed
to The
Henderson
Smaller
Companies
Investment
Trust plc
Henderson
merged
with Janus
Capital
Mandate
refined to
focus solely
on UK
smaller
companies
1887 1917 1974 1982 1992 1997 20171999
Governance
Financial
Statements
Additional
Information AGM Notice
5
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Performance
Total return performance
Performance summary
Year to 31 May 2026
Discount
at year end
3
8.7%
(2025: 9.2%)
NAV per share
at year end
1,004.8p
(2025:
926.2p
)
NAV
total return
1
11.8%
(2025: -5.1%)
Share price
total return
2
12.6%
(2025: -2.3%)
Share price
at year end
917.0p
(2025: 841.0p)
Total return performance to 31 May 2026
1 year % 3 years % 5 years % 10 years %
NAV
1
11.8 21.4 -13.9 75.1
Benchmark
4
12.3 39.3 17.9 87.2
Average sector NAV
5
10.1 26.0 10.9 89.2
Share price
2
12.6 29.0 -17.1 95.4
AIC sector share price
6
13.1 26.5 9.6 93.2
Total return performance for 10 years to 31 May 2026
%
1 NAV per ordinary share total return with income reinvested
2 Share price total return using mid-market closing price with income reinvested
3 Calculated using the NAV and mid-market share price at year end
4 Deutsche Numis Smaller Companies Index (excluding investment companies) total return
5 Average NAV total return of the Association of Investment Companies (“AIC”) UK Smaller Companies sector
6 Average share price total return of the AIC UK Smaller Companies sector
A glossary of terms and explanations of alternative performance measures are included on pages 91-94
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
This indicates a key performance indicator (“KPI”). KPIs are used to measure the success of your Company in meeting its
objective and by the directors to evaluate the performance of the Manager. See pages 29-30.
May
16
May
17
May
18
May
19
May
20
May
21
May
22
May
23
May
26
May
25
May
24
NAV per share
1
Share price
2
Benchmark
4
(Rebased to 100)
0
50
100
150
200
250
300
6
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
See p.12 Fund Managers’ Report
Performance summary continued
Dividend performance
Dividend total
1
Per share for the year
29.0p
(2025: 28.0p)
Dividend yield
2
At the end of the year
3.2%
(2025: 3.3%)
Revenue reserve
3
£18.5m
(2025: £20.1m)
1 This represents an interim dividend of 7.5p and a proposed final dividend of 21.5p. See page 9 for more details
2 Based on the ordinary dividends paid and payable for the year and the mid-market share price at year end
3 Revenue reserves at 31 May 2026 excluding payment of the recommended final dividend for 2026
4 This represents the interim and final ordinary dividends paid or recommended
Dividend growth
4
For the year
3.6%
(2025: 3.7%)
Over 10 years
61%
Years of consecutive
growth
23
Dividend for the years ended 31 May
4
Final Interim
2017 2018 2019 2020 2021 2022 2023 2024 20262025
0
5
10
15
20
25
30
pence
Dividend growth
Annual dividend income (without reinvestment) an investor would have received in each financial year
based on an initial £1,000 investment in the Company on 31 May 2003.
Dividend £ on original purchase
200620052004 2007 20182010 2011 2012 2013 2014 2015 2016 20172008 20192009 2020 2021 2022 2023 2024 20262025
0
50
100
150
200
250
300
350
Dividend (£)
Compound annual growth rate 16.5%
Source: Janus Henderson
Governance
Financial
Statements
Additional
Information AGM Notice
7
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Penny Freer,
Chair
Chair’s Statement
Dear Shareholder,
Performance
The year under review was marked by political upheaval
in the UK and conflict overseas, unsettling expectations for
interest rate cuts and broader easing in global financial
conditions. Against this challenging backdrop, the
Company delivered strong positive absolute returns and
outperformed most of its sector peers.
The Company’s net asset value (“NAV”) per ordinary share
total return rose by 11.8% and the share price total return
rose by 12.6% in the year to 31 May 2026. This compared
with a rise of 12.3% in the Deutsche Numis Smaller
Companies Index (excluding investment companies)
(the “benchmark”) and a rise of 10.1% in the AIC UK Smaller
Companies sector average NAV total return. The
Company therefore marginally underperformed its
benchmark by 0.5% over the year, while outperforming the
peer group sector average by 1.7%. A detailed review of
portfolio performance, including the principal contributors
to, and detractors from, returns, is set out in the Fund
Managers’ Report.
Since the year end to 27 July 2026 the Company’s NAV per
ordinary share total return rose by 3.2% and the share
price total return rose by 3.6%. This compares with a rise of
4.2% for the benchmark and a rise of 1.6% in the AIC UK
Smaller Companies sector average NAV total return.
This marks the first year in which Indri van Hien has led the
fund management team for the Company. Following a
protracted period of underperformance, the Fund
Managers have refined the investment process to
strengthen stock selection, while preserving the
Company’s core philosophy of investing in growth at the
right price. These refinements are now embedded, and
the Board has monitored their implementation, the team’s
selling discipline and the consistency of the investment
approach throughout the year.
Although elevated bond yields have continued to weigh
on funds with a growth bias, the Board is encouraged by
the marked improvement in stock selection, alongside the
benefits of gearing and NAV accretion from share
buybacks. The Board will continue to monitor progress
closely. Further detail on performance and the outlook for
markets can be found in the Fund Managers’ Report within
this Annual Report.
Refreshing your
company
Highlights of the year
NAV total return
+1 1.8%
Share price total return
+12.6%
Dividend growth for the year
+3.6%
Against this challenging backdrop, the Company
delivered strong positive absolute returns and
outperformed most of its sector peers.”
8
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Dividend and earnings
Total revenue from the Company’s portfolio declined from
£23.1m to £18.5m, while earnings per share (“EPS”) fell from
27.9p to 26.1p. The decline in total revenue was driven
primarily by the Company’s ongoing share buyback
programme and also reflected, to a lesser extent,
changes in portfolio composition and the continued
preference among many UK companies for share
buybacks over dividend growth or special dividends.
The movement in EPS is also impacted by the accounting
treatment of EPS, which is based on the weighted
average number of shares in issue during the year rather
than the period-end share count.
The Board is pleased to recommend an increased final
dividend of 21.5p per share, which, together with the
interim dividend of 7.5p paid in March 2026, takes the total
dividend for the year to 29.0p per share — a 3.6% increase
on the 28.0p paid in 2025. Subject to shareholder approval
at the AGM, the final dividend will be paid on 23 October
2026 to shareholders on the register at 2 October 2026,
with the shares quoted ex-dividend on 1 October 2026.
EPS is calculated using the weighted average number of
shares in issue during the year, while the dividend is paid
on the smaller number of shares actually in issue at the
record date as a result of the share buyback programme.
The recommended distribution is therefore supported by
current year earnings together with a modest contribution
from the Company’s substantial revenue reserves.
This will be the 23rd consecutive year of growth in the
annual dividend, reaffirming the Company’s status as
an AIC Dividend Hero.
Ongoing charge ratio
For the year ended 31 May 2026, the ongoing charge
increased to 0.53% (2025: 0.45%). Much of this increase
was due to the 16% decline in our average net assets, but
it also reflected the 42% increase in ‘other expenses’ due
mainly to an increase in marketing spend. The Board is
committed to marketing the Company and raising the
Company’s profile, but this inevitably had a short-term
impact on the ongoing charge for the year. Notwithstanding
our ongoing charge remains materially lower than the peer
group’s average of 0.99%. See page 30 for more detail.
Share rating and buybacks
The Company’s share price discount to NAV fluctuated
during the year between 7.4% and 11.5%, averaging 9.2%
and closing the year at 8.7%. The share price moved from
841.0p at the start of the year to 917.0p at 31 May 2026, with
the share price total return of 12.6% modestly ahead of the
NAV per share total return of 11.8%, reflecting a small
narrowing of the discount over the year. The Company’s
discount remained consistently narrower than the
weighted peer group average throughout the year.
The Board kept the discount under active review and
instructed buybacks when it considered these to be in the
best interests of shareholders as a whole and where
shares could be acquired at a meaningful discount to
NAV, thereby enhancing NAV per share for remaining
shareholders. Market conditions for UK smaller companies
and for the investment trust sector remained difficult, and
discounts across the sector continued to reflect weak
investor demand for UK small-cap equities.
The Company bought back 12,899,062 shares during the
year, representing 18.8% of issued share capital (excluding
Treasury shares). These buybacks enhanced NAV by 1.7%.
In light of the elevated rate of repurchase, the Board
convened a general meeting on 4 March 2026, at which
shareholders approved the renewal of the authority to
repurchase up to 14.99% of issued share capital. The
Board’s view remains that buybacks are an important tool
for managing the discount, but that they cannot, on their
own, address the underlying drivers of investor demand.
Sustained re-rating will depend on improved investment
performance, renewed confidence in UK equities, a
recovery in flows into the smaller companies asset class,
and an effective marketing programme.
Chair’s Statement continued
Against this challenging backdrop, the Company
delivered strong positive absolute returns and
outperformed most of its sector peers.”
This will be the 23rd consecutive year of growth in the
annual dividend, reaffirming the Company’s status as
an AIC Dividend Hero.”
Governance
Financial
Statements
Additional
Information AGM Notice
9
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Capital structure
Following authority granted by shareholders at the 2025
AGM, the Board completed the buyback and cancellation
of the legacy preference stock during the year. The
Company’s capital comprised 74,385,131 ordinary shares
of 25p each, each at the year end (of which 18,796,219
were held in Treasury). Further information can be found
on page 59.
Fund management changes
Neil Hermon retired from asset management in
September 2025 after 23 years as the Company’s Fund
Manager. The Board thanks Neil for the long-term value he
created for shareholders. Indri van Hien, who had served
as Co-Manager since January 2025, and previously
Deputy Fund Manager since 2016, assumed sole
responsibility as Fund Manager. She has continued and
refined the long-standing investment philosophy. Working
with the Board, the Manager recruited Cassie Herlihy as
Deputy Fund Manager, with effect from November 2025.
Board succession planning
Victoria Sant retired from the Board at the conclusion of
the 2025 AGM, as reported last year. The Board now
comprises five directors, all of whom are independent of
the Manager. The Nomination Committee keeps the
Board’s composition, balance of skills, experience,
independence and diversity under regular review,
together with succession planning for both directors and
the chairs of the Board and its committees. Further
information is set out in the Nomination Committee Report
on page 52.
Articles of association
At the AGM in October 2026, shareholders will be asked to
approve, by special resolution, the adoption of new
articles of association. The existing articles have not been
comprehensively refreshed for some years and, following
a review by the Company’s legal advisers and
consideration by the Board, the opportunity has been
taken to align them with current market practice for
UK-listed closed-ended investment companies.
The principal changes modernise the articles by
permitting fully virtual general meetings (in addition to
physical and hybrid meetings), making electronic
dividend payments the default, and updating the
untraced shareholder provisions in line with the UK
Dormant Assets Scheme while preserving the rights of
long-lost shareholders to reclaim their money. The
opportunity has also been taken to remove provisions that
are no longer relevant to a closed-ended investment trust,
including references to directors’ pensions and gratuities,
and to reduce the maximum permitted size of the Board
from 15 to 10.
The new articles also entrench the Company’s status
as an investment trust (so that any formal move away
from that status would itself require shareholder
approval by special resolution), introduce a backstop
mechanism to ensure continuity in the event that
retiring directors are not re-elected at an annual
general meeting, require proposed Directors to disclose
certain information about themselves to shareholders
before a vote is held on their election and include a new
power enabling the Company to obtain information
needed to comply with US securities laws and other
regulatory requirements. More information on the
changes to the Articles can be found in the explanation
of AGM resolutions on pages 101-102.
Annual General Meeting
We are pleased to invite shareholders to attend the AGM
in person at our registered office at 11.30 am on Tuesday,
6 October 2026. The AGM is an important opportunity for
shareholders to meet the Board and members of the fund
management team, including the Fund Manager, Indri van
Hien and the Deputy Fund Manager, Cassie Herlihy. The
fund management team will present on the year under
review and the outlook for UK smaller companies.
Shareholders unable to join in person will be able to
attend by videoconference. Further details can be found
in the Notice of AGM on page 98-99.
Chair’s Statement continued
Indri van Hien has continued to refine the long-standing
investment philosophy.”
10
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Outlook
The outlook for financial markets remains complex.
Geopolitical tensions, most notably in the Middle East,
continue to cloud the inflation and interest rate outlook,
while the disruptive potential of artificial intelligence is
prompting investors to reassess the durability of business
models across a range of sectors. In the UK, the
Government faces the difficult task of restoring growth
while maintaining fiscal discipline; the recent change in
Prime Minister is likely to prolong fiscal uncertainty,
delaying important policy choices and further
undermining confidence among businesses and
consumers. Together, this reinforces the growing
emphasis on portfolio diversification our Fund Managers
are so focused on.
In navigating these challenging conditions, the
Company’s portfolio retains a clear quality bias and holds
companies with robust business models that are able to
forge their own paths. These companies are soundly
financed and are being run by management teams
whose incentives are aligned with our own. The attractive
valuations in this part of the market are well-documented.
These claims are increasingly being recognised by
continued in-bound merger and acquisition (“M&A”)
activity and ongoing share buyback programmes being
sanctioned by boards.
Over the long term, the Company seeks to capture the
well-established small-cap premium: that is, the long-
term outperformance of small caps over large caps
driven by factors such as higher growth prospects in this
under researched part of the market. While the small-cap
factor has proved elusive in the UK over the past decade,
we continue to see high-quality businesses whose
valuations have been depressed by broader market
weakness rather than company-specific concerns.
There is opportunity in this, but to unlock this the market
needs to see an alleviation of the acute technical
pressure this part of the market has suffered from in terms
of asset outflows. Clarity over the political situation in the
UK is an important step. Smaller companies may
underperform larger companies in periods of economic
dislocation as investors flock to larger and more liquid
asset classes, but history suggests that they rebound
most strongly after such periods.
Global investors remain heavily exposed to the US, with
relatively modest allocations to markets outside US
equities when compared with the composition of the MSCI
All Country World Index. While much market commentary
remains focused on elevated US valuations, we are
reminded of the compelling opportunities available in UK
smaller companies, which offer both diversification and
long-term growth potential. A broadening of market
returns is long overdue, and the Company’s asset class
would be a clear beneficiary of such a shift. We believe UK
smaller companies continue to offer exciting opportunities
for long-term investors, and remain confident in the ability
of our Fund Managers to apply their consistent and
disciplined investment approach to generate significant
long-term value.
Penny Freer
Chair of the Board
29 July 2026
Chair’s Statement continued
We believe UK smaller companies continue to offer
exciting opportunities for long-term investors.”
Governance
Financial
Statements
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11
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Fund Managers’ Report
Fund performance
The Company delivered positive returns during the period
under review. The share price rose by 12.6% and the NAV by
11.8% on a total return basis. This compared with an
increase of 12.3% in the Company’s benchmark total
return. The marginal underperformance came from a
combination of negative contribution from investment
performance and expenses offset by a positive
contribution from gearing and ongoing share buybacks.
Stock selection was a positive contributor in the period,
while our growth style was a headwind and contributed to
relative investment performance being negative overall.
From a macro perspective geopolitical escalation
between the US, Israel and Iran interrupted the disinflation
narrative and rate-cut expectations, triggering a rotation
back towards value stocks and away from growth stocks.
At a micro level the underlying performance of our
portfolio companies has been robust, and we continue to
see upgraded forecast sales and earnings growth in
aggregate. Despite it being a mixed year for performance,
the long-term record of the Company remains strong,
materially outperforming its benchmark during the tenure
of the strategy dating back to 2002.
Performance attribution
Year ended 31 May
2026
%
2025
%
NAV total return
11.8 –5.1
Benchmark total return
12.3 5.0
Relative performance
–0.5 –10.1
Comprising:
Investment performance without gearing
–2.3 –9.3
Gearing impact on investment
performance
–0.3 –1.0
Gearing decision
0.9 –0.1
Expenses
–0.5 –0.5
Buybacks
1.7 0.7
Source Janus Henderson
Value of £100 invested in 2003
2005 2008 2023 20262003
£0
£500
£1,000
£1,500
£2,000
2011 2014 2017 2020
Share Price
NAV
Benchmark
Source: LSEG, 1 June 2003 to 30 June 2026 (assuming dividends are reinvested)
Summary
• Building on the Company’s long-
established investment philosophy, the
team has continued to refine the portfolio,
focusing on higher-conviction opportunities
and a more disciplined approach to stock
selection, risk management and capital
allocation, helping to deliver positive returns
in the year.
• While market conditions favoured value
stocks over growth stocks, many holdings
continued to deliver robust operational
performance and earnings growth.
• The Fund Managers remain excited by the
long-term opportunity in UK smaller
companies, where attractive valuations,
ongoing takeover activity and improving
fundamentals create compelling
opportunities for active investors.
Indri van Hien
and Cassie Herlihy,
Fund Managers
12
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Market – year under review
Despite continued market volatility, UK equity markets
delivered positive returns in the year under review. Markets
were buoyed by a marked easing in global trade tensions
following the reciprocal tariffs announced by the US on
“Liberation Day”. While base rates were cut further to 3.75%
in both the US and the UK, hopes of a steady rate-cutting
cycle were repeatedly challenged by domestic and
international political developments; by the period end,
markets were questioning whether rates might need to
rise again.
In the UK, policy missteps and political drama weighed on
sentiment. Intense speculation ahead of a later-than-
usual Autumn Statement, alongside political manoeuvring
against the Prime Minister following heavy local election
losses, heightened near-term fiscal uncertainty and
further eroded domestic business and consumer
confidence. Both of these cohorts are now increasingly
braced for a more left-leaning government. This unfolded
against a backdrop of tepid GDP growth for much of the
year, before a modest rebound of 0.6% in the first quarter
of 2026. Annual inflation eased from 3.6% in June 2025
to 2.8% in April 2026, remaining above the Bank of
England’s 2% target, even as the labour market softened
and unemployment rose to a near five-year high by the
end of 2025.
Geopolitical uncertainty persisted, most notably through
US and Israeli strikes on Iran and the resulting disruption to
shipping through the Strait of Hormuz, through which
around 20% of global oil exports pass. Brent crude prices,
which had been steadily declining prior to the conflict,
rose above $100 per barrel, reigniting concerns that higher
energy costs would feed into broader inflation and delay
further monetary easing.
Finally, the rapid evolution of artificial intelligence (“AI”)
became a defining market narrative, prompting both
enthusiasm and reassessment. While AI’s long-term
potential to reshape productivity and unlock new revenue
streams remains widely recognised, the pace of
innovation sparked debate over winners and losers,
particularly within the software sector, where valuations
compressed sharply during the period. Other sectors, from
business services and outsourcing to media and certain
areas of professional services, also faced scrutiny given
their exposure to potential automation. The result was
heightened dispersion, as markets recalibrated
expectations, balancing AI’s transformative promise
against the near-term disruption it may impose across
a broad range of industries.
In this environment, and extending a trend which has
overshadowed the performance of UK smaller companies
in recent years, small caps underperformed their larger
counterparts. The Deutsche Numis Smaller Companies ex
Investment Companies Index rose 12.3%, compared with a
21.6% gain in the FTSE All-Share Index, as ongoing
macroeconomic uncertainty disproportionately impacted
the more cyclically sensitive segments of the market. This
marks the eighth year of underperformance for UK small
caps versus large caps over the past decade, a notable
departure from the well-documented long-term
outperformance of smaller companies.
Value of £100 invested in 1955
£
1985 1995 2005 2025197519651955
£0
£200,000
£400,000
£600,000
£800,000
£1,000,000
2015
Deutsche Numis
Smaller Companies Index
FTSE All Share Index
Source: LSEG, 31 December 1955 to 31 December 2025 (assuming dividends
are reinvested)
Gearing
Gearing started the year at 10.2% and ended at 10.0%.
Debt facilities are a combination of £30 million 20-year
unsecured loan notes at an interest rate of 3.33% issued
in 2016, £20 million 30-year unsecured loan notes at
2.77% issued in February 2022, and £70 million short-term
bank borrowings.
As the Company’s NAV rose during the period under
review, the use of gearing was a positive contributor to
performance in the year. The ability to enhance returns
through gearing, a distinctive feature of investment trusts,
has made a significant positive contribution to
performance during the Fund Manager’s tenure.
Attribution analysis
The following tables show the top five contributors
to, and the top five detractors from, the Company’s
relative performance.
Principal contributors
12 month
return
%
Relative
contribution
%
Balfour Beatty
+62.2 +1.4
Renishaw
+110.5 +1.1
Oxford Instruments
+85.2 +1.0
Computacenter
+75.3 +0.9
Vistry Group
1
–55.7 +0.8
1 Not owned by the Company
Balfour Beatty is an international contractor and
infrastructure investor. It operates three main verticals:
construction services in the UK, US and Hong Kong;
support services including the maintenance of
Fund Managers’ Report continued
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
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infrastructure assets such as road, rail, energy and utilities
in the UK; and owning a portfolio of infrastructure
investments including military housing in the US and
schools, hospitals and student accommodation in the UK.
The shares have performed strongly following continued
positive momentum in order book growth driven by UK
power generation projects and US buildings. New orders
have bolstered cash generation and enabled further
cash returns to shareholders through both the regular
dividend and share buybacks. New CEO Philip Hoare
launched his new “evolve, energise and explore” strategy
suggesting that going forward sharper focus will be given
to existing and new growth markets.
Renishaw is a UK-based engineering technology group
that designs and manufactures high-precision
measurement and manufacturing systems. Its products
include machine-tool probes, co-ordinate measuring
machine systems, encoders, calibration equipment,
spectroscopy instruments and metal additive
manufacturing systems, which help customers make
complex components more accurately, efficiently and
reliably across sectors including semiconductors,
electronics, aerospace, healthcare and industrial
automation. Improved demand across several key end-
markets, particularly semiconductor and electronics
manufacturing equipment and aerospace and defence,
led the company to provide multiple upgrades to revenue
and profit guidance over the year. The shares were further
supported by confidence in the margin recovery
opportunity, with management targeting a 20% operating
margin over time, underpinned by cost actions, operational
gearing and growth in higher-value product areas.
Oxford Instruments is a global provider of scientific
technology tools, software and expertise to academic
and commercial customers, with leading positions in
markets such as materials analysis, semiconductors,
healthcare and life sciences. Its products help customers
image, analyse and manipulate materials at very small
scales, supporting research and high-technology
manufacturing in areas such as compound
semiconductors, advanced materials and life sciences.
The shares performed strongly as investors became
more confident in the recovery of orders and the group’s
exposure to structural growth markets, particularly within
Advanced Technologies, where order intake grew by
nearly 30% on an organic constant-currency basis,
supported by compound semiconductor demand and
increasing traction with commercial manufacturing
customers. The company also benefitted from cost
actions, an improving margin outlook and capital returns.
Computacenter is a technology and services provider
which helps large corporate and public-sector customers
source, build and manage their IT infrastructure, ranging
from workplace devices to complex datacentre and
cloud-related projects. The shares performed strongly
following materially better trading momentum, with
revenue growth led by Technology Sourcing and strong
Professional Services demand, particularly in North
America and the UK where demand was supported by
hyperscaler customers, AI-related projects and data-
centre investment. The shares saw a strong re-rating as
valuation multiples began to reflect the company’s
crucial role in enabling IT infrastructure for AI applications.
Vistry Group is a UK housebuilder focused on delivering
mixed-tenure homes, with a particular emphasis on
partnership housing for housing associations, local
authorities and private rented sector partners, alongside
homes sold on the open market. The shares performed
poorly in the period following management change and
repeated concerns around profit delivery, cash
generation and the balance sheet, with investors
unsettled by the need to use greater incentives and
discounts to sustain open-market sales. Sentiment
deteriorated further after Vistry paused its share
buyback to prioritise debt reduction. The Company
did not own a position in this stock.
Principal detractors
12 month
return
%
Relative
contribution
%
Bellway
–27.2 –1.3
Ceres Power Holdings
1
+1,060.5 –0.9
Hochschild Mining
1
+87.7 –0.7
Burford Capital
2
–63.1 –0.7
Helios Towers
1
+95.8 –0.7
1 Not owned by the Company
2 Position sold during the year
Bellway is a national UK housebuilder. The company has
a robust long-term track record of controlled expansion,
and solid operational and financial performance whilst
maintaining a strong balance sheet. Just as demand-
side conditions for housebuilders were beginning to
improve, the conflict in the Middle East put pressure on
consumer confidence, and pushed oil prices, bond yields
and borrowing costs higher. This is likely to weigh on
near-term profitability across the sector and the shares
moved sharply to reflect this. We believe the business
remains well placed to benefit from any recovery on
account of its well-invested land bank. Furthermore, the
government’s ambitious housebuilding targets which
seek to address the structural undersupply of homes in
the UK should provide tailwinds for the sector as planning
reforms are enacted. Valuation support is provided by the
discount to NAV at which the shares currently trade.
Ceres Power Holdings develops clean-energy
technology in the form of solid oxide fuel cells and
electrolysers for power and hydrogen applications. The
shares were supported by tangible commercial progress:
first, royalties were generated from Doosan and secondly,
important manufacturing licences and factory
investment agreements were signed with large
commercial partners. The Company did not own a
position in this stock.
Fund Managers’ Report continued
14
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Hochschild Mining is a precious metals miner focused on
the exploration, mining, processing and sale of silver and
gold in the Americas. The shares were supported by a
powerful combination of higher gold and silver prices.
The Company did not own a position in this stock.
Burford Capital is a specialist financial services company
focused on litigation finance, providing capital to
companies and law firms to fund legal claims in return for
a share of any successful outcome, alongside activities
such as asset recovery and legal risk management.
During the period, the US Court of Appeals for the Second
Circuit reversed the ~$16bn judgment made against
Argentina in relation to the nationalisation of energy
company YPF, eliminating what had been Burford’s single
largest asset and major source of expected future profits.
We have since exited the position on the view that the
decision would trigger a material balance sheet write
down, leaving the company over-leveraged and with a
reduced capacity for new investment.
Helios Towers owns and operates telecom tower
infrastructure across Africa and the Middle East, leasing
space on its towers to mobile operators. The shares
were supported by strong tenancy-led growth and
sharply improving cash flow. The group outperformed
its tenancy additions targets and upgraded growth
expectations for the year ahead. The Company did not
own a position in this stock.
Portfolio activity
Trading activity in the portfolio was consistent with an
average holding period between four and five years. Our
approach is to consider our investments as long term in
nature and to avoid unnecessary turnover. The focus has
been on adding stocks to the portfolio that have good
growth prospects, sound financial characteristics and strong
management, at a valuation level that does not reflect these
strengths. Likewise, we have been employing strong sell
disciplines to cut out stocks that fail to meet these criteria.
Acquisitions
During the year we have added a number of new
positions to our portfolio. These include, but are not
limited to, the following:
CVS Group is a leading UK-based veterinary services
provider, operating companion animal, referral, farm
animal and equine practices across the UK and Australia.
Our investment gives us exposure to a structurally growing
market underpinned by the trend of ‘pet humanisation’,
with a near-term inflection point driven by the ageing of
the post-COVID pet cohort, the largest single wave of new
pet ownership in a generation. Veterinary spend follows a
U-shaped curve, with higher spend in a pet’s early years
and a meaningful step-up as animals reach middle age,
requiring more frequent and complex clinical intervention,
a threshold this cohort will reach over the next couple of
years. We initiated the position at a compelling entry
point after the CMA market investigation led to a de-
rating of the shares to a meaningful discount versus
precedent sector transactions. With the CMA review now
concluded with workable remedies, the release of
pent-up capital deployment in the UK alongside the
buy-and-build opportunity in Australia should act as
medium-term catalysts.
Elixirr is a founder-led challenger consultancy that
delivers transformation, data and AI implementation
projects for blue-chip clients across multiple geographies
and end markets. Its lean, partner-led model underpins
sector-leading margins, sustained by project-based
pricing and an equity-incentive structure that ensures
alignment and supports retention. Our investment gives
us exposure to sustainably double-digit organic revenue
growth, complemented by a disciplined M&A strategy
that has successfully diversified both end market and
geographical exposure. We see a significant expansion
opportunity across an existing client base where share of
wallet remains low. Our view is that AI acts as a structural
tailwind rather than a threat, with the firm well positioned
to benefit from clients’ inevitable focus on AI
implementations. The shares were acquired at a
meaningful discount to precedent transactions offering a
compelling entry point into a high-quality compounder.
Greencore is a specialist convenience food
manufacturer, supplying sandwiches, salads, sushi and
ready meals to the UK’s major retailers. The recent
transformational acquisition of Bakkavor establishes
Greencore as the clear category leader in chilled
prepared foods, unlocking significant operational
synergies, procurement leverage and automation
benefits. Structural tailwinds support sustained growth:
ongoing product innovation, range extension, increased
share of wallet with existing customers, and
premiumisation, as consumers increasingly favour
eating at home over dining out driving higher product
volumes over time. The combined group benefits from
sustainable and differentiated cost economics, scale
advantages that sub-scale peers cannot easily
replicate, and an improving returns profile as integration
benefits are realised. Our investment provides exposure
to a category leader operating in growing food
segments, underpinned by an experienced
management team with a proven track record of
delivering against strategic and financial targets.
Mitie Group is a UK service business providing facilities
management, transformation and compliance services
to a wide range of organisations across the public and
private sectors. Following a period of challenging
operating conditions during the COVID-19 pandemic, the
company has transformed from a low-margin outsourcer
into a higher-quality compounder, driven by disciplined
contract bidding activity, technology-led investments
and focus on higher profit activities, with successful
improvement in group margins over time. Our investment
in Mitie Group also provides exposure to strong industry
tailwinds with corporates spending on facility
transformation to prioritise sustainability, fire safety,
Fund Managers’ Report continued
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
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Strategic
Report
security and environmental compliance as regulations
tighten. The recent acquisition of Marlowe adds to these
dynamics and should deliver an improved technical
service provider to large corporates. In our view, the
improving returns profile and growth of the business are
not yet reflected in the current valuation of the company.
Rosebank is an industrial holding company that acquires
underperforming businesses, improves them
operationally over a targeted three-to-five-year period
and then exits, returning capital to shareholders. The
management team is well-known and experienced, with
a proven track record of acquiring business and creating
value through operational improvement. We initiated our
position through an oversubscribed equity placing to
fund the acquisition of two US-based industrial
businesses from a private equity seller. Value creation is
underpinned by balance sheet recapitalisation,
operational self-help and well-defined cost out
programmes targeting meaningful margin expansion.
Topline growth expectations are undemanding, with
near-term earnings drivers centred on margin
improvement and deleveraging, areas firmly within
management’s control. The entry valuation is reasonable,
and we see upside from multiple arbitrage at exit as
margins expand alongside a mix shift towards higher-
quality end markets.
Saga is a UK specialist provider of products and services
for people aged over 50, operating across travel, cruise,
insurance broking and related services. The group’s
proposition is built around a trusted consumer brand,
deep customer insight and tailored products for an older
demographic, with strength in ocean and river cruising,
holidays and insurance distribution. The business has
undergone a multi-year transformation to simplify its
business and puts its balance sheet on a stable footing.
Saga’s unique product offering should enable it to gain
market share, while favourable industry dynamics
support stronger pricing. Given the business’s high
fixed-cost base, this should translate into meaningful
profit growth. We believe the valuation today is not fully
reflecting the earnings growth potential and scope for
capital returns as the business moves from being over
levered to being under levered.
SSP Group is a leading global operator of food and
beverage outlets in travel locations, including airports,
railway stations and other transport hubs. It operates in
38 countries, with around 49,000 employees and
approximately 3,000 outlets worldwide. Our investment
provides exposure to the long-term growth in global
travel, serving customers in captive and high-footfall
locations where food and drink options are often limited.
While the business has faced challenges in the wake of
COVID, we see opportunity in improving European
profitability, being more focussed on capital allocation
and exposing value through the partial divestment of its
high-growth Indian business.
Disposals
To balance the additions to our portfolio, we exited lower
conviction positions where the investment case had
deteriorated, or where valuations had become stretched
after the thesis successfully played out. In a number of
cases, we saw limited upside and weaker prospective
returns and chose instead to recycle capital into higher
conviction opportunities.
These disposals include but are not limited to: our
positions in Eurocell, a manufacturer and distributor of
PVC windows, doors and other building products, and
Genuit, a provider of sustainable water, climate and
ventilation management products for the built
environment. Both sales reduced our exposure to big-
ticket UK housing-related demand at a time when
consumer confidence was weakening and bond yields
were rising.
We also sold our holdings in Future, a specialist media
platform operating websites, magazines and newsletters:
MONY Group, a technology-led price comparison
platform; and PageGroup, a global specialist recruitment
consultancy. Despite their lowly valuations, we believed
each business faced structural challenges from AI, which
could disrupt customer acquisition, content discovery,
pricing power or recruitment workflows over time.
We disposed of our positions in Domino’s Pizza Group,
the UK and Ireland master franchisee for Domino’s, and
Trainline, a digital rail ticketing platform operating in the
UK and Europe, as we believed profits would remain under
pressure from government policy. For Domino’s, this
related to increased labour cost pressure from changes
to workers’ rights and employment costs; for Trainline, the
risk was continued pressure from rail fare freezes and
wider rail market intervention.
We took profits in Cohort, a defence technology group,
and Keller, a global specialist geotechnical contractor,
following strong share price performance. We also sold
positions in Essentra, a manufacturer and distributor of
industrial components; in Impax Asset Management, a
specialist sustainable investment manager; in ME Group,
an operator of self-service photobooths and laundry
machines; and in Telecom Plus, owner of multiservice
utility provider Utility Warehouse. In each case, we believed
valuations did not adequately reflect the negative
earnings momentum these companies were likely to face.
Takeover activity
Takeover activity in the portfolio persisted during the year
as trade buyers and private equity alike continued to
exploit the attractive valuations in the UK small and
mid-cap space. Takeover bids were received for: Empiric
Student Property, a real estate investment company
focused on student accommodation, from Unite Group;
JTC, a business services company, from Permira; Just
Group, a pension risk transfer specialist, from Brookfield;
and Kitwave, a food distributor, from One Equity Partners.
Fund Managers’ Report continued
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Top ten positions
The following table shows the Company’s top ten
stock positions and their active weight versus the
benchmark:
Top ten positions
at 31 May 2026
Portfolio
%
Index weight
%
Active weight
%
Oxford Instruments
3.4 1.0 2.4
Balfour Beatty
3.4 – 3.4
Paragon Banking
3.0 0.8 2.2
OSB Group
2.7 1.0 1.7
Vesuvius
2.4 0.6 1.8
Computacenter
2.4 – 2.4
Renishaw
2.4 – 2.4
SigmaRoc
2.3 – 2.3
Bellway
2.1 – 2.1
Mitchells & Butlers
2.1 0.8 1.3
A brief description of the largest positions (excluding
Balfour Beatty, Bellway, Computacenter, Oxford
Instruments and Renishaw which were covered earlier)
follows:
Paragon Banking is a speciality lender with a primary
focus on providing buy-to-let mortgages to professional
landlords. The company enjoys a strong capital position,
enabling it to grow dividends whilst simultaneously
buying back its own stock. Regulations on complex
underwriting and the sophistication of its underwriting
capability have allowed Paragon to grow market share
from non-bank lenders which have suffered in the rising
rate environment. As base rates fall and business and
consumer confidence improves, commercial loans and
mortgages should become more affordable which
should increase lending volumes. Paragon should also
benefit from government driven deregulation of the
financial services sector which could potentially lower
capital requirements, increase the scope for capital
returns to shareholders and boost lending volumes.
OSB Group is a speciality lender with a primary focus on
providing buy-to-let mortgages to professional landlords.
Regulations on complex underwriting and the
sophistication of its underwriting capability have allowed
OSB to grow market share. After a difficult period for the
company as base rates increased, stoking fiercer
competition for flow, which drove both asset and deposit
spreads down, net interest margin expectations have
now been set at a more realistic level. The shares trade at
an attractive discount to tangible book value and in our
view, do not reflect the mid-teens return on tangible
equity guidance set by management. The company
retains a strong capital position allowing it to return
significant cash to shareholders through share buybacks
and growing dividends. Like Paragon Banking, OSB should
similarly benefit from deregulation in the financial
services sector.
Vesuvius is a materials technology company. The
company provides steel flow control, foundry
technologies, advanced refractories and metal
processing products and services to customers around
the world. The business has gone through significant
rationalisation over recent years removing excess
capacity and improving returns on capital and margins.
The company has demonstrated robust pricing power
during the recent inflationary period, validating its leading
market position and high value add of its products. The
geographical spread of the business makes it well-
positioned to benefit from increased steel production
outside of China. A trend which should be boosted by US
tariffs and the implementation of quotas on steel imports
in Europe. In the meantime, shareholders are being paid
to wait as strong cash generation has allowed the
company to continue to pay a healthy dividend to
shareholders.
SigmaRoc is a building materials company operating in
the UK and Europe. The business has expanded rapidly
over the past year following its transformative acquisition
of CRH’s European lime and limestone operations which
made the company a market leader in five European
countries (Norway, Sweden, Finland, UK and Ireland) and
put it in the number two position in another three
countries (Germany, Poland and the Czech Republic).
Lime and limestone are used in a broad range of
industries including construction, steel, chemical,
environmental and agricultural which provides good
end-market diversification for the company. At a macro
level the company is well placed to benefit from end-
market revival following German debt brake reforms.
In the meantime, investors should benefit from self-help
and continued synergy extraction from recent acquisition
and shareholder friendly capital allocation policies.
Mitchells & Butlers is a national owner and operator of
pubs in the UK. Its major brands include All Bar One,
Browns, Harvester, Toby Carvery, O’Neill’s, Miller & Carter,
Nicholson and Ember Inns. The vast majority of its pubs
are owned freehold, meaning it has substantial asset
value backing. The company has consistently
outperformed peers in terms of like-for-like revenue
growth on account of its well-invested estate, diversified
brand portfolio and consistency of customer service.
Whilst cost inflation remains acute, management has
reliably managed to mitigate these headwinds through
its ‘ignite’ efficiency programmes. The company is
steadily repaying its securitised debt, enabling a transfer
of value from debt to equity, a trend which will now be
accelerated as its pension deficit is cleared. The shares
trade at a substantial discount to recent industry
transaction multiples and its NAV.
Portfolio weightings
As at 31 May 2026, the portfolio was weighted by
company size as follows:
Weighting %
31 May
2026
31 May
2025
FTSE 100 0.0 0.0
FTSE 250 88.7 84.5
FTSE Small Cap 11.2 9.8
FTSE AIM 10.1 15.9
Gearing
(10.0) (10.2)
Fund Managers’ Report continued
Governance
Financial
Statements
Additional
Information AGM Notice
17
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Market outlook
Geopolitics remain challenging with ongoing conflicts in
the Middle East and Ukraine yet to reach stable resolutions
and heightened tensions between China and the US
persisting. Sticky inflation which remains above target in
both the US and UK is likely to be further exacerbated by
the oil and gas supply shock stemming from the US and
Israel’s war with Iran. Damage to Middle Eastern energy
infrastructure and the continued closure of the Strait of
Hormuz, through which around 20% of global oil exports
pass, have heightened energy price risks. Together,
these factors sustain uncertainty over the path of interest
rates, leaving central banks with the challenging task
of containing second-round inflation effects and
elevated inflation expectations amid softening labour
markets globally.
In our view, the conflict in the Middle East has delayed,
rather than derailed, the disinflationary narrative. The
current energy price shock is materially less severe than
that experienced following the outbreak of war in Ukraine,
which drove inflation to ~11%, while wage inflation is also
now considerably more benign. Moreover, with policy
rates still restrictive across major economies, central
banks retain scope to support demand should economic
conditions deteriorate.
At home, the Prime Minister might have changed but the
issues the UK economy faces remain the same and the
new Government faces the unenviable challenge of
reviving economic growth while walking a fiscal tightrope.
Energy policy and welfare reform need to be addressed
to reduce the UK gilt yield premia, unlock funds for growth
and ultimately attract capital flows back into the UK.
Burnham’s challenge will be to overcome the internal
divisions in the party which have made fiscal policy
choices harder and obstructed efforts to place growth
at the centre of policy agendas. We see near-term fiscal
uncertainty which risks further erosion of business
confidence in the short-term.
Away from politics, investors continue to grapple with the
AI mega theme. We are certain that AI will change the way
economies operate, but markets have been quick to
punish perceived “AI losers” and, in some cases,
overzealous in rewarding the perceived winners. While we
can offer no definitive answers at this stage, we would
reassure shareholders that we are re-examining the
franchises and business models of our portfolio
companies through this new lens. Characteristics once
prized by investors, such as recurring revenues, now
require fresh scrutiny, as we assess whether AI could
automate the underlying processes, weaken pricing
power or reshape established revenue models.
Corporates and consumers are dealing with elevated
uncertainty, which has precipitated a deterioration in
sentiment indicators. This has had the effect of increasing
savings rates and deterring corporate investment. For
now, underlying trading amongst our portfolio companies
has proved to be robust and we take comfort in this and
the strong balance sheets of both corporates and
consumers, noting that they are intrinsically healthier than
they were ahead of the Global Financial Crisis in 2008-
2009. Markets are forward looking, so we ask ourselves if
the backdrop for these two cohorts will get worse from
here? We assume the next budget will come with tax rises,
but if this comes with a credible growth agenda this could
materially improve sentiment. That possibility, in our view,
is not currently reflected in consensus.
After a lost decade in UK smaller companies, starting with
uncertainty about the EU referendum vote, we see good
reasons why fortunes could change, and history will show
that small caps perform best after periods of economic
dislocation. Investors are facing a generationally
attractive entry point in UK small-caps where valuations
remain attractive and sit well below long-term averages
while earnings forecasts are beginning to stabilise after a
sharp adjustment in economic activity following the step
change in higher interest rates seen in the last three years.
Valuations also remain markedly depressed versus other
developed markets, even on a sector-adjusted basis.
The persistent in-bound M&A activity that the market, and
our own portfolio is experiencing suggests that many
market players are already taking notice. Despite this, the
pervasive outflows of capital from this part of the market
is stifling a sustained re-rating of the asset class. A return
of investor confidence could create a positive flywheel of
stronger performance, renewed interest, greater liquidity
and, ultimately, a healthier pipeline of new listings. Political
and fiscal stability in the UK could prove an important
catalyst.
Markets seldom give investors an easy ride, and we have
become accustomed to managing shareholders’ capital
through a polycrisis. We think there is good reason to
believe that interest rates will continue to fall, or more
importantly why markets might reprice the risk of them
going higher from here. But importantly, the portfolio is not
counting on it. We have confidence that our long-
standing investment process will yield a portfolio which is
diversified by design but deliberate in its construction with
good exposure to everything from industrial companies
benefitting from re-stocking cycles and the significant
capex budgets from US hyperscalers to UK domestic
cyclicals trading on trough multiples on trough earnings.
We think our investment process centred around investing
in cash generative growth businesses run by experienced
management teams has built a portfolio which is both
well-positioned to withstand the current challenging
economic conditions and participate in the upswing as it
occurs. We remain confident in our ability to create
long-term value through a consistent, rigorous investment
process that has delivered so powerfully over time.
Indri van Hien and Cassie Herlihy
Fund Managers
29 July 2026
Fund Managers’ Report continued
18
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Subsector breakdown
Analysis of total equity investments by subsector at 31 May
Portfolio snapshot
Equities
Portfolio
2026
%
Portfolio
2025
%
l
Electronic and Electrical
Equipment
9.9 4.3
l Construction and Materials
9.8 12.3
l Software and Computer Services
9.4 12.4
l
Investment Banking and
Brokerage Services
9.3 8.5
l Travel and Leisure
5.7 6.4
l Industrial Support Services
5.5 4.9
l Aerospace and Defence
3.9 4.9
l Oil, Gas and Coal
3.9 2.9
l Retailers
3.8 5.0
l Industrial Metals and Mining
3.6 1.7
l Media
3.3 3.2
l Industrial Transportation
3.2 2.1
l Banks
3.0 –
l
Pharmaceuticals and
Biotechnology
2.8 1.4
l Finance and Credit Services
2.7 6.1
l
Household Goods and Home
Construction
2.5 4.3
Equities
Portfolio
2026
%
Portfolio
2025
%
l Industrial Engineering
2.4 2.6
l Health Care Providers
2.4 0.4
l
Real Estate Investment and
Services
1.9 2.6
l Real Estate Investment Trusts
1.6 2.3
l Personal Goods
1.6 1.1
l Leisure Goods
1.5 1.7
l Chemicals
1.5 1.0
l Medical Equipment and Services
1.0 0.9
l
Technology, Hardware and
Equipment
0.9 0.5
l
Telecommunications Service
Providers
0.8 3.0
l Food Producers
0.8 –
l Consumer Services
0.8 0.6
l Life Insurance
0.5 2.4
l
Personal Care, Drug and Grocery
Stores
– 0.5
Total investments
£614m
See page 72 which shows total investments held at fair value in the Balance Sheet. As at 31 May 2026 and 31 May 2025, the Company had no holdings
in the following sectors: Closed-ended investments and General Industrials. Sources: Factset, Janus Henderson
Governance
Financial
Statements
Additional
Information AGM Notice
19
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
1 Quoted on the Alternative Investment Market
More information on the basis of the valuation can be found in the Notes to the Financial Statements on page 75
For details of the movements in the investment portfolio during the year, please refer to Note 10 on page 81
Portfolio holdings
As at 31 May 2026
Ranking Valuation
2026 2025 Company Principal activities
2026
£’000
2025
£’000
Portfolio
%
1
12 Oxford Instruments Advanced instrumentation equipment
20,896 12,598 3.40
2
2 Balfour Beatty International contractor
20,617 23,311 3.36
3
1 Paragon Banking Buy-to-let mortgage provider
18,583 26,077 3.02
4
7 OSB Group Buy-to-let mortgage provider
16,527 16,531 2.69
5
8 Vesuvius Ceramic engineering
14,889 14,230 2.42
6
24 Computacenter IT reseller
14,882 8,806 2.42
7
46 Renishaw Precision measuring & calibration
equipment
14,464 6,501 2.35
8
9 SigmaRoc
1
Aggregates supplier
14,190 13,878 2.31
9
3 Bellway Housebuilder
13,141 22,919 2.14
10
4 Mitchells & Butlers Hospitality operator
12,701 20,264 2.07
11
11 Chemring Defence products & services
12,682 13,649 2.06
12
6 Volution Producer of ventilation products
12,506 16,568 2.04
13
10 Serco Outsourcing services
12,195 13,850 1.98
14
20 Rathbones Private client wealth manager
12,123 9,559 1.97
15
14 IntegraFin Investment platform
11,748 12,036 1.91
16
42 Serica Energy
1
Oil and gas exploration & production
11,616 7,124 1.89
17
62 Hill & Smith Fabricated metal products
11,534 4,477 1.88
18
17 Morgan Sindall Diversified building contractor
11,277 10,749 1.84
19
48 Clarkson Shipping services
11,216 6,410 1.83
20
34 Bodycote Engineering group
10,839 7,723 1.76
21
43 AJ Bell Investment platform
10,787 6,995 1.76
22
16 Softcat Software reseller
10,295 11,039 1.68
23
59 Genus Animal genetics products & services
10,014 5,196 1.63
24
65 XP Power Electrical power products
9,976 4,244 1.62
25
56 Bridgepoint Private equity fund manager
9,867 5,579 1.61
26
38 Watches of Switzerland Luxury watch retailer
9,588 7,606 1.56
27
26 Everplay
1
Games software developer
9,462 8,648 1.54
28
44 Luceco Electrical products
8,970 6,873 1.46
29
– CVS Group Veterinary practices
8,775 – 1.43
30
– Mitie Group Industrial support services
8,697 – 1.41
31
29 ZIGUP Commercial vehicle hire
8,307 8,131 1.35
32
32 Avon Technologies Defence products
8,121 7,858 1.32
33
66 Trustpilot Consumer review platform
7,934 4,203 1.29
34
85 Oxford Biomedica Gene & cell therapy
7,077 2,765 1.15
35
28 Workspace Real estate investment & services
7,012 8,340 1.14
36
– SSP Group Operator of food & beverage outlets
6,718 – 1.09
37
– Rosebank Industrials holding company
6,428 – 1.05
38
31 Savills Property transactional consulting
services
5,949 7,976 0.97
39
33 Hollywood Bowl 10 pin bowling operator
5,927 7,736 0.96
40
82 Spire Healthcare Private healthcare services
5,818 3,122 0.95
41
27 Moonpig Online card & gift retailer
5,710 8,370 0.93
42
35 Harworth Urban regeneration & property
investment
5,645 7,702 0.92
43
57 Foresight Specialist fund manager
5,540 5,330 0.90
44
75 Raspberry Pi Computer board manufacturer
5,528 3,521 0.90
45
– Elementis Chemicals
5,519 – 0.90
46
83 Next 15
1
PR & media services
5,482 3,072 0.89
47
64 Bloomsbury Publishing Consumer & academic publisher
5,412 4,316 0.88
48
– Elixirr Consulting services
5,249 – 0.85
20
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
1 Quoted on the Alternative Investment Market
More information on the basis of the valuation can be found in the Notes to the Financial Statements on page 75
For details of the movements in the investment portfolio during the year, please refer to Note 10 on page 81
Portfolio holdings continued
Ranking Valuation
2026 2025 Company Principal activities
2026
£’000
2025
£’000
Portfolio
%
49
53 Auction Technology Online auction software provider
5,179 5,929 0.84
50
21 Wickes DIY retailer
5,108 9,086 0.83
51
55 Hunting Oil equipment & services
5,018 5,761 0.82
52
80 4imprint Promotional products & services
5,014 3,224 0.82
53
15 Gamma Communications Telecommunications
4,967 11,997 0.81
54
41 Currys Electronics retailer
4,960 7,175 0.81
55
– Greencore Food producers
4,955 – 0.81
56
73 Capricorn Energy Oil and gas exploration & production
4,818 3,833 0.78
57
69 RM Educational software & services
4,677 4,001 0.76
58
50 DFS Furniture retailer
4,669 6,198 0.76
59
– Saga Travel & leisure
4,643 – 0.76
60
49 Alfa Financial Software Leasing software
4,409 6,336 0.72
61
37 Baltic Classifieds Online classifieds platform
4,319 7,653 0.70
62
58 XPS Pensions Pensions consultancy
4,306 5,254 0.70
63
52 Wilmington B2B information provider
4,245 6,135 0.69
64
76 Advanced Medical Solutions
1
Medical supplies manufacturer
4,212 3,491 0.68
65
– ActiveOps
1
Software & computer services
3,827 – 0.62
66
22 GB Group Data intelligence services
3,674 8,871 0.60
67
18 QinetiQ Defence services
3,439 9,955 0.56
68
40 Victrex Speciality chemicals
3,411 7,204 0.55
69
– Chesnara Life insurance
3,004 – 0.49
70
68 GlobalData B2B information provider
2,847 4,061 0.46
71
– Tatton Asset Management
1
Fund Management
2,753 – 0.45
72
89 Young & Co’s share class NV Pub operator
2,710 2,548 0.44
73
– Travis Perkins Retailers
2,690 – 0.44
74
74 Harbour Energy Oil and gas exploration & production
2,623 3,738 0.43
75
78 Helical Office property investor & developer
2,593 3,471 0.42
76
72 FRP Advisory
1
Investment advisory services
2,462 3,838 0.40
77
81 SThree Recruitment company
2,461 3,128 0.40
78
45 Crest Nicholson Housebuilder
2,432 6,824 0.40
79
84 Young & Co’s share class A Pub operator
2,373 2,916 0.39
80
88 Niox
1
Medical supplies manufacturer
2,195 2,564 0.36
81
– NCC Group Cybersecurity services
2,014 – 0.33
82
70 Pinewood Technologies Automotive software & services
1,587 3,942 0.26
83
63 Stelrad Radiator manufacturer
1,410 4,404 0.23
Total equity investments
614,437 100.00
There were no convertible or fixed interest securities at 31 May 2026 (2025: None).
Governance
Financial
Statements
Additional
Information AGM Notice
21
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Renishaw
Case studies
Proportion of portfolio
2.4%
(as at 31 May 2026)
What does it do?
Renishaw is a global engineering technology group which designs and
manufactures high-precision measurement, motion control and
manufacturing systems used by customers across industries including
transport, electronics, healthcare and advanced manufacturing.
The business was founded in 1973 by Sir David McMurtry and John Deer,
and gained a full listing on the London Stock Exchange in 1984.
Investment case
Renishaw is a rare UK engineering champion, supplying highly precise
measurement and manufacturing technology that helps customers
make complex products more accurately, efficiently and reliably. Its
probes, sensors, encoders, calibration systems, spectroscopy instruments
and metal 3D-printing technology are used across advanced
manufacturing markets including semiconductors, electronics,
aerospace, healthcare and industrial automation. We invested because
Renishaw combines leading-edge technology, strong intellectual
property and attractive long-term growth drivers, including factory
automation, smart manufacturing, reshoring and AI-enabled production.
Many of its established product lines hold number one or number two
market positions, providing strong competitive foundations, while newer
areas such as industrial automation, software and additive
manufacturing offer further growth potential. The company also benefits
from a robust net cash balance sheet, giving it the resilience to keep
investing through more challenging economic periods. Renishaw has
consistently reinvested heavily in research and development, typically
spending a mid-teens percentage of sales, which supports its long-term
innovation-led model. We also see meaningful scope for margin
improvement, driven by cost actions, operational gearing and growth in
higher-value product lines. Historically, Renishaw was a tightly held,
founder-led business; following the passing of co-founder Sir David
McMurtry and recent changes to the governance structure and
management team, we believe there is an opportunity to modernise the
operating model, improve manufacturing efficiency and bring
Renishaw’s technology to previously underserved areas of the market.
If executed well, this should support stronger growth, higher returns and
improved shareholder outcomes over time.
22
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Proportion of portfolio
1.9%
(as at 31 May 2026)
What does it do?
Hill & Smith is an international infrastructure products and services group
operating through three core divisions: US Engineered Solutions,
Galvanising Services, and UK & India Engineered Solutions. Founded in
1824 and listed on the London Stock Exchange in 1969, the business has
evolved through multiple strategic phases to become a geographically
diversified industrial group. Today, its operations are primarily
concentrated in the United States, the United Kingdom and India.
Investment case
Hill & Smith is an attractive long-term investment and a high-quality
compounder. The business consistently generates strong returns on
invested capital, enabling reinvestment at high rates to deliver sustained
growth. This is supported by exposure to resilient infrastructure markets
and a disciplined approach to capital allocation. Acquisitions are central
to the strategy, with management demonstrating a strong track record
of acquiring niche, complementary businesses at sensible valuations.
These deals have enhanced both revenue growth and margins, as seen
in the recent purchase of Freeberg Industrial Fabrication at a valuation
below the Group’s multiple. This ongoing compounding of earnings
underpins long-term equity value creation.
The Group operates a decentralised structure, with subsidiaries led by
local management teams. This combines entrepreneurial agility with the
financial strength of a larger organisation and works well in local, service-
oriented markets. The US galvanising division illustrates this model
effectively, providing protective steel coatings for infrastructure. It is a
high-margin, cash-generative business with repeat demand, strong
pricing power and responsive local decision-making that supports
customer retention.
The US now drives the majority of profits, accounting for around 79%, and
continues to show strong momentum. Growth is underpinned by
structural tailwinds, including investment in data centres, energy,
transport and broader infrastructure renewal. Significant government
support, such as the Infrastructure Investment and Jobs Act, is directing
substantial funding into these markets, providing long-term visibility of
demand.
Overall, this combination of disciplined capital allocation, decentralised
execution and favourable end-markets positions the Group well to
sustain attractive long-term compounding.
Hill & Smith
Case studies continued
Governance
Financial
Statements
Additional
Information AGM Notice
23
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Business model
Investment objective
The Company aims to maximise shareholders’ total returns (capital and income)
by investing in smaller companies that are quoted in the United Kingdom.
Purpose
The Company’s purpose is to provide shareholders with long-term growth through investing in UK smaller
companies in a form of investment accessible to investors, both large and small. The Company appoints
experienced Fund Managers to achieve this through a disciplined process of investing in a diversified portfolio
of quoted companies which benefit from sustainable growth trends. The Company seeks to control costs and
may use borrowings with the aim of enhancing long-term shareholder returns.
Investment policy
Smaller companies are defined as any company
outside the FTSE 100 Index. Once a portfolio company
enters the FTSE 100 Index, the Fund Managers have, in
normal circumstances, six months to sell the position.
Investments may include shares, securities and
related financial instruments, including derivatives.
The following investment ranges apply:
• Equities: 80% – 100% of total gross assets
• Fixed income and cash: 0% – 20%
The Company maintains a diversified portfolio
and cannot:
• Invest more than 5% of its total gross assets in any
one holding; or
• Hold more than 10% of an investee company’s equity,
in each case measured at the time of investment
(or additional investment).
The Board may give approval to the Manager to
exceed these limits to as far as 10% and 20%
respectively but only in exceptional circumstances.
It is the stated investment policy of the Company to
invest no more than 15% of its gross assets in other
listed investment companies (including listed
investment trusts).
Derivatives
The Company may use financial instruments known
as derivatives for the purpose of efficient portfolio
management.
Gearing
Net gearing (defined as all borrowings less cash
balances and investments in cash funds) is limited by
the Board to a maximum of 30% of shareholders’ funds.
How the Company creates value
The Company operates as a closed-ended investment trust, providing shareholders with access to an actively
managed portfolio of UK smaller companies through a listed vehicle. This structure allows shareholders to gain
diversified exposure to the asset class through a single investment and enables the Fund Managers to take a long-term
view without needing to manage investor inflows or redemptions.
24
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Total Return
Business model continued
The Company’s business model is based on four principal
elements:
Active investment in UK smaller companies
The Fund Managers use research-led stock selection to
identify high-quality smaller companies with strong
growth potential. The Company’s benchmark is the
Deutsche Numis Smaller Companies Index (excluding
investment companies), whose returns the Fund
Managers aim to outperform.
The Manager is not a passive or indexed investor. The
portfolio is constructed selectively and differs meaningfully
from the benchmark, reflecting the Fund Managers’
assessment of the prospects for individual companies.
The portfolio’s active share at 31 May 2026 was 66.0%
(63.3% at 31 May 2025).
Diversification and risk control
The Company’s investment policy and Board-approved
investment limits are designed to ensure that the portfolio
remains diversified and that investment risk is managed
appropriately. The Board monitors compliance with the
Company’s investment restrictions, including limits on
portfolio concentration, investment in other listed
investment companies and gearing.
Closed-ended structure and gearing
As an investment trust, the Company’s closed-ended
nature is central to its business model. It allows the Fund
Managers to maintain a long-term investment approach
and remain invested during both normal and volatile
market conditions. The structure also enables the
Company to use gearing where the Board and Manager
consider it appropriate, with the aim of enhancing
long-term shareholder returns. Full details of the
Company’s borrowings are on page 84.
Independent oversight and delegated
operations
The Company has no employees, premises or operations.
The Board delegates investment management,
administration, accounting, company secretarial and
other functions to specialist service providers, while
retaining responsibility for strategy, governance, risk
oversight and the monitoring of service provider
performance. This enables the Company to operate
efficiently.
Structure and governance
Founded in 1887, the Company operates as an
investment trust under s1158 of the Corporation Tax Act
2010 and is exempt from corporation tax on capital gains.
The Company is a public company limited by shares,
governed by its articles of association and accountable
to its shareholders.
The Company’s shares trade on the main market of the
London Stock Exchange. The Company is included in
the FTSE 250 and is classified within the closed-ended
investment funds category. It is subject to applicable
FCA requirements, including the UK Listing Rules and the
Disclosure Guidance and Transparency Rules (“DTR”),
and is a member of the Association of Investment
Companies (“AIC”).
The Board comprises solely independent non-executive
directors. It sets the Company’s strategy, monitors
performance, oversees risk and challenges the Manager
and other service providers on behalf of shareholders.
The directors are independent of the Manager and other
service providers.
Management and service providers
Janus Henderson Fund Management UK Limited acts as
the Company’s alternative investment fund manager and
delegates investment management services to Janus
Henderson Investors UK Limited. References in this report
to ‘Janus Henderson’, ‘JHI’ or the ‘Manager’ refer to the
services provided to the Company by the Janus
Henderson Investors group of companies.
The fund management team is responsible for day-to-
day investment decisions and implementation of the
investment strategy within the parameters set by the
Board. The team is led by Indri van Hien, who has been
Fund Manager since January 2025, having previously been
Deputy Fund Manager since 2016. In November 2025,
Cassie Herlihy joined Janus Henderson and was
appointed as Deputy Fund Manager.
Janus Henderson and its subsidiaries provide accounting,
sales, marketing and general administrative services.
Some administration and accounting services are carried
out, on behalf of the Manager, by BNP Paribas. Janus
Henderson Secretarial Services UK Limited acts as
corporate secretary.
Alignment, costs and oversight
The Board reviews the management arrangements
annually through its Management Engagement
Committee. The management agreement can be
terminated on six months’ notice.
The management fee is charged at 0.35% of net assets
per annum. A performance fee may also be payable
when the Company outperforms its benchmark, subject
to the conditions, safeguards and limits set out on
page 92. No performance fee is payable for the year
ended 31 May 2026.
The fund management team receives a proportion of any
performance fee paid by the Company to the Manager
and a proportion of that amount is deferred into shares in
the Company. All members of the fund management
team have shareholdings in the Company.
Governance
Financial
Statements
Additional
Information AGM Notice
25
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Business model continued
Category of cost
2026
£’000
2026
% of
average
net
assets
1
2025
£’000
2025
% of
average
net
assets
1
Management fee
2
1,999 0.34 2,396 0.35
Performance fee – – – –
Total 1,999 0.34 2,396 0.35
1 Calculated as a percentage of average monthly net assets, which is the
basis on which the management and performance fee cap is calculated
2 The percentage in this table is calculated on the average of the
month-end net assets, which is the basis on which the cap is assessed.
The actual management fee is calculated and charged quarterly
in advance on the net assets at the end of the previous quarter
See page 92 in the Glossary for further details regarding
calculation of the fee structure.
The Board monitors the Company’s ongoing charges and
the value provided by the Manager and other service
providers. The Board believes that the ongoing charge of
0.53% during the year represented good value for money
for shareholders. Further details of the fee arrangements
and ongoing charges are set out on page 92 and the
Chair’s Statement on page 9.
The FCA published final rules for the new Consumer
Composite Investments regime in December 2025.
The new regime, which will apply fully from 8 June 2027,
will introduce updated requirements for the presentation
of costs and charges information for closed-ended funds.
The Company will review its cost disclosures in light of
the new rules as part of its implementation planning.
Culture, values and business ethics
The Board promotes a culture of openness, constructive
challenge, diversity, adaptability and integrity. These
principles inform the Board’s own operation and its
oversight of the Manager and other service providers.
The Board seeks to make effective use of the diversity of
skills, characteristics and experience of its members. At
the financial year end and at the date of this Report, the
Board was composed of five directors, three of whom are
female and two male. The Company has no executive
senior managers and no employees, as all day-to-day
operations are externally managed. Further details of the
directors’ biographies, board composition and diversity
disclosures are set out on pages 40, 41 and 53.
The Board seeks annual assurances from its key service
providers in relation to modern slavery, anti-bribery and
corruption, criminal finances and sanctions compliance.
Further details about this due diligence exercise are set
out in the Audit and Risk Committee Report on page 50.
Given the Company’s externally managed structure and
absence of employees, its direct exposure to employee,
social, community and human rights matters is limited;
where relevant, these matters are considered through
the Board’s oversight of service providers and the
Manager’s stewardship of investee companies.
The Board believes that the Company’s closed-ended
investment trust structure, active management
approach, disciplined risk controls and independent
oversight support the delivery of long-term shareholder
returns from investment in UK smaller companies.
26
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Principal risks and uncertainties
The Board, with the assistance of the Manager, has carried out a robust assessment of the principal and emerging risks
facing the Company, including their nature, potential impact, mitigating controls and the reporting received by the
Board and its Committees.
The Audit and Risk Committee maintains a detailed risk matrix, which is reviewed at each meeting and subject to a more
detailed annual review. The Committee uses the risk matrix, heat maps and the results of an exercise by individual
directors to review the Company’s risk profile and identify any changes in the significance of principal and emerging risks.
During the year, the Board continued to review the Company’s risk management and internal control framework and
began formalising the mapping of existing key controls to the material controls reporting requirements under Provision
34 of the 2024 AIC Code. The enhanced Provision 34 reporting requirements will apply to the Company for the financial
year ending 31 May 2027.
In assessing the Company’s principal and emerging risks, the Board considered heightened geopolitical and
macroeconomic uncertainties, including market volatility, the continuing war in Ukraine, conflict and instability in the
Middle East, disruption to global trade and supply chains, tariff and protectionism risks, persistent inflationary pressures,
changes in interest rates and financing conditions, developments in artificial intelligence, and the outlook for the UK
economy. The Board considered the potential impact of these factors on investor sentiment, corporate earnings,
valuations, liquidity, the Company’s borrowings, discount management and operational resilience.
While short-term economic and market uncertainty remain, the Board concluded that the Company’s portfolio and the
Manager’s investment approach remained appropriate in light of the principal and emerging risks identified. In reaching
this conclusion, the Board considered the Fund Managers’ long-standing investment philosophy, which is based on
fundamental, qualitative analysis, engagement with management teams and valuation discipline, and the view that
smaller companies can deliver attractive returns over the long term.
The principal risks fall broadly under the following categories:
Risk
Key controls and
mitigation
Board/Committee
monitoring and assurance
Change in perceived risk
during the year
Investment activity and strategy
Poor investment processes
and performance,
inappropriate asset
allocation, ineffective use of
gearing or failure to
maintain an investment
proposition attractive to
shareholders could affect
NAV performance, share
price performance, the
discount to NAV and
shareholder demand.
The Board receives reports
on investment performance,
portfolio construction,
gearing, attribution
analysis, ESG considerations,
discount management
and shareholder feedback
at each board meeting.
The Manager operates
within investment limits and
restrictions set by the Board,
and compliance with
investment limits is reported
regularly to the Board.
The Board reviews the
continuing appropriateness
of the Company’s investment
objective, policy and strategy.
At each meeting, the Board
reviews investment
performance, attribution,
portfolio exposure, gearing,
investment limits, shareholder
analysis, broker feedback
and marketing reports. The
Board held some ad hoc
meetings during the year to
discuss macro political and
economic events and the
potential impact on the
Company’s performance.
While short-term
investment performance
improved during the period
under review, the Board
increased its rating of this
risk during the year, due to
continued lack of
shareholder demand for UK
smaller companies,
increased market volatility
and geopolitical
uncertainties.
The Board continues to
monitor investment
performance and the
discount to NAV closely.
Loss of key fund
management personnel or
inadequate resourcing
could affect investment
decision-making, continuity
of portfolio management
and shareholder confidence.
The Board receives regular
reports from the Manager
on fund management
resourcing, succession
planning and team structure.
The Management
Engagement Committee
reviews the Manager’s
performance and
resources annually.
Annual Management
Engagement Committee
review of the Manager and
its succession planning for
key roles. Several ad hoc
meetings were held during
the year to monitor fund
manager recruitment and
succession planning.
The Board reduced its
rating of this risk during the
year, following the
successful transition of
fund management
responsibilities and the
recruitment of an
additional fund manager,
following the retirement of
Neil Hermon.
Increase
No change
Decrease
Governance
Financial
Statements
Additional
Information AGM Notice
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Strategic
Report
Strategic
Report
Risk
Key controls and
mitigation
Board/Committee
monitoring and assurance
Change in perceived risk
during the year
Legal and regulatory
Loss of investment trust
status, breach of company
law, breach of UK Listing
Rules, DTR or other
applicable regulation could
result in tax consequences,
regulatory sanction,
suspension of listing,
reputational damage or
additional costs.
The Manager monitors
compliance with s1158 of the
Corporation Tax Act 2010 and
reports to the Board.
The Company Secretary and
professional advisers support
the Board in monitoring
compliance with company
law, UK Listing Rules, DTR and
other applicable legal and
regulatory requirements.
Board and Committee
reviews of regulatory
updates, compliance
reporting, s1158 reporting,
Company Secretary
reporting and professional
advice where required.
The Board’s assessment
of the rating of this risk
remains unchanged on
the previous year.
Operational
Failure of a key service
provider, a cyber incident,
business continuity failure,
control failure or service-
level deterioration could
affect portfolio
administration, financial
reporting, dealing,
payments, shareholders
records, regulatory reporting
or the Company’s
reputation.
The Company has no
employees and so delegates
its principal operational
functions to the Manager
and specialist service
providers. The Board and its
Committees review service
provider performance,
internal control reports,
business continuity
arrangements, cyber
security reporting and
operational updates.
Audit and Risk Committee
review of internal control
reporting and assurance
reports. The Committee also
monitors cyber security
through internal controls
reporting and periodic
updates from the Manager.
Management Engagement
Committee review of service
provider performance,
contractual arrangements
and service levels.
The Board’s assessment
of the rating of this risk
remains unchanged on
the previous year.
Financial instruments and the management of risk
Market price movements,
interest rate changes,
liquidity constraints,
currency exposure or
counterparty failure could
affect NAV, revenues,
gearing, covenant
compliance and the
Company’s ability to meet
liabilities as they fall due.
The Board monitors gearing,
liquidity, cash balances,
borrowing facilities, covenant
compliance and portfolio
liquidity.
The Company’s policies for
management of market risk,
liquidity risk, credit risk and
counterparty risk are set out
in note 15 to the financial
statements.
Board review of gearing,
liquidity, borrowing facilities
and covenant compliance.
Audit and Risk Committee
review of financial reporting
and audit findings.
The Board’s assessment
of the rating of this risk
remains unchanged on
the previous year.
Increase
No change
Decrease
Emerging risks
At each meeting, the Board considers emerging risks, which it defines as potential trends, sudden events or changing
risks characterised by a high degree of uncertainty as to their likelihood, timing and potential impact on the Company.
Where an emerging risk becomes sufficiently clear or significant, it is incorporated into the Company’s risk matrix and
considered alongside the principal risks.
Emerging risks are identified through reporting from the Manager, the Company Secretary and other service providers,
together with regulatory, market and governance updates, professional advice and the directors’ own experience and
external engagement. The Fund Managers also report on emerging risks which may affect portfolio companies or the
wider UK smaller companies market.
During the year, the Board considered emerging risks, including geopolitical uncertainty, artificial intelligence, cyber
security, regulatory change, service provider resilience and UK economic and political conditions. The Board concluded
that these matters were appropriately addressed within the existing principal risks and did not identify any new
emerging risk requiring separate disclosure.
Principal risks and uncertainties continued
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Measuring the Company’s performance
The directors use key performance indicators (“KPIs”) to measure the success of the Company in meeting its objective
and to evaluate the performance of the Manager. The focus of the Board is on the longer term, but when reviewing the
performance of the Manager each year, the Board uses the KPIs set out below. The charts and data on pages 6-7 and
96 give more insight into how the Company has performed against these KPIs. They are also explained in the glossary
and alternative performance measures on pages 91-94.
KPI Action
Performance
against benchmark
See p.6
The Board compares the Company’s NAV total return and share price total return with
the Deutsche Numis Smaller Companies Index (excluding investment companies).
During the year under review, the Company’s NAV underperformed the benchmark by
0.5% on a total return basis and the share price outperformed the benchmark by 0.3%
on a total return basis.
NAV and share price total return against benchmark
NAV Share price
90
95
100
105
110
115
120
May
2025
Jul
2025
%
Sep
2025
Nov
2025
Jan
2026
Mar
2026
May
2026
Benchmark
Performance
against peer group
See p.6
The Board reviews the Company’s NAV total return and share price total return
against the AIC UK Smaller Companies sector average. During the year under review,
the Company’s NAV outperformed the peer group average by 1.7% on a total return
basis and the share price underperformed the peer group average by 0.5% on a total
return basis.
NAV and share price total return against peer group average
NAV Share price
90
95
100
105
110
115
120
May
2025
Jul
2025
Sep
2025
Nov
2025
Jan
2026
Mar
2026
May
2026
Peer group average
%
Governance
Financial
Statements
Additional
Information AGM Notice
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KPI Action
Discount/premium
to NAV
See p.93
The Board monitors the discount or premium to NAV at which the Company’s shares
trade and reviews this against the AIC UK Smaller Companies sector average. The
Board also considers investor relations, marketing activity, shareholder feedback and
the use of share buybacks where these are expected to enhance shareholder value.
During the year, the Company bought back 12,899,062 shares, representing 18.8% of
issued share capital (excluding Treasury shares), enhancing NAV positively by 1.7%.
The discount ranged from 11.5% to 7.4%, averaged 9.2% during the year, and closed
the year at 8.7%.
Discount against AIC sector weighted average
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
May
2025
Jul
2025
Sep
2025
Nov
2025
Jan
2026
Mar
2026
May
2026
Discount AIC sector weighted average
%
Ongoing charge
ratio (“OCR”)
See p.93
The Board monitors the Company’s ongoing charge, calculated in accordance
with the AIC methodology, as a measure of cost efficiency and compares it with
the peer group. During the year under review, the ongoing charge was 0.53%
(2025: 0.45%), compared with the peer group’s average of 0.99%. See Chair’s
Statement on page 9.
%
0.0
0.2
0.4
0.6
0.8
1.0
Company
OCR
Sector average
OCR
Industry average
(ex VCTs) OCR
Source: Association of Investment Companies
Measuring the Company’s performance continued
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Section 172 Statement
The directors act collectively to promote the success of the Company for the benefit of shareholders as a whole, having
regard to the factors in s172(1) of the Companies Act 2006. As an externally managed investment company with no
employees, the Company’s key stakeholders are its shareholders, potential investors, the Manager, other service
providers, investee companies, lenders, regulators and industry bodies.
The Board engages with stakeholders directly and through the Manager, the corporate broker and other service
providers. The Board considers stakeholder interests when setting strategy, monitoring performance, overseeing risk,
reviewing service provider arrangements and making principal decisions.
The Board invites shareholders and other stakeholders to contact it directly. Shareholders are welcome to write to the
Chair or Senior Independent Director at the registered office (see page 105), or by email to
itsecretariat@janushenderson.com with any feedback, queries or concerns. The Board reviews all shareholder
correspondence addressed to it.
The Board is pleased to invite shareholders to attend the AGM and Fund Managers’ presentation for the year ended
31 May 2026. More details are on page 61, and in the AGM Notice on page 98 onwards.
Stakeholder map
The Board has adopted a map to support the directors in identifying and understanding stakeholders and how best to
engage and interact with each:
Manager
Other service providers
and auditor
Legislator, regulator,
stock exchange
Association of
Investment Companies
Lenders
Potential investors
Investee companies
The Henderson
Smaller
Companies
Investment Trust
plc
Shareholders
Governance
Financial
Statements
Additional
Information AGM Notice
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The Company’s relationships with its stakeholders
Stakeholder Why they matter How the Board engaged Outcome during the year
Shareholders
and potential
investors
Shareholders provide the
Company’s capital and are the
primary beneficiaries of the
Board’s duty to promote the
success of the Company.
Potential investors are
important to the liquidity and
long-term demand for the
Company’s shares.
The Board engaged with
shareholders through the AGM,
shareholder correspondence,
meetings with larger
shareholders, the Company’s
website, investor presentations,
regular reporting and feedback
from the Manager, corporate
broker and sales team.
The Board considered
shareholder feedback, discount
management, liquidity in the
Company’s shares, marketing
activity and the successful
outcome of the continuation vote.
As a result, the Board continued to
make improvements and
enhancements to existing
processes, as can be seen in the
Board decision-making summary
on page 33.
Manager
(Janus
Henderson
Investors)
The Manager is responsible for
portfolio management and
provides or arranges for
administrative, operational and
governance services for the
Company.
The Board engaged with the
Manager through regular Board
reporting, portfolio reviews,
performance attribution, ESG
and stewardship reporting, risk
and compliance updates and
the annual Management
Engagement Committee review.
The Board reviewed fund
management succession, the
appointment of additional
portfolio management resource
and enhanced performance
reporting following a period of
underperformance. The Board
has also invested in an
enhanced marketing
programme, described further
on page 33.
Other service
providers
The Company relies on
specialist service providers,
including the depositary,
custodian, registrar, corporate
broker, lenders, legal advisers,
auditor and administrator.
The Board and its Committees
reviewed service quality, fees,
internal controls, business
continuity, cyber security and
contractual arrangements.
The Management Engagement
Committee formally reviewed
service provider performance
and appointments during the
year, as set out on pages 55.
Investee
companies
The Company’s exposure to
investee companies is managed
by the Fund Managers in
accordance with the investment
objective and policy.
The Board reviewed portfolio
composition, stock selection,
engagement activity and voting
reports. The Manager engaged
with investee companies on
strategy, performance,
governance and ESG matters.
The Board monitored how
engagement with investee
companies informed the
Manager’s investment decisions,
stewardship activity and voting
decisions during the year. See
the ESG Report on pages 34-37
for more details.
Regulators
and industry
bodies
Legal, regulatory and
governance developments
affect the Company’s reporting
obligations, governance
framework and wider operating
environment as a listed
investment company.
The Board monitored
developments through reporting
from the Company Secretary,
the Manager, advisers and
industry bodies.
The Board considered
developments relevant to
investment companies,
corporate governance,
regulatory reporting and the
wider investment trust sector.
The Board submitted responses
to the FCA on industry initiatives
during the year.
Section 172 Statement continued
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Board decision making
In addition to routine matters, including approval of the half-year results, annual results, dividends, the AGM and regular
portfolio and performance reviews, the Board made the following principal decisions during the year.
Principal decision Factors considered Outcome
Fund management
succession
The Board considered continuity of portfolio
management, the Manager’s resourcing,
succession planning, shareholder confidence
and the long-term interests of the Company.
The Board approved the appointment of
Cassie Herlihy as Deputy Fund Manager and
monitored the orderly transition following Neil
Hermon’s retirement.
Investment
performance and
reporting
The Board considered the period of
underperformance, the need for clearer
attribution analysis and the importance of
greater transparency over the fund
management team’s investment process,
team structure, decision-making and review
of disappointing stock outcomes.
The Board received enhanced reporting from
the fund management team, including more
detailed attribution analysis, individual stock
reviews and clearer explanations about how
the team makes investment decisions,
monitors portfolio holdings and reviews any
stocks which are underperforming.
Borrowing
arrangements
The Board considered the Company’s
investment strategy, expected use of gearing,
covenant requirements, cost, flexibility and
lender terms.
The Board renewed the £70 million revolving
credit facility with BNP Paribas, London Branch,
following a review of indicative terms from
potential lenders.
Capital structure
The Board considered the balance sheet
structure, shareholder interests, administrative
simplicity and the Company’s Articles of
Association.
The Board bought back and cancelled the
remaining preference stock.
Discount
management and
shareholder
engagement
The Board considered the discount to NAV,
liquidity in the Company’s shares,
shareholder feedback and the authority
granted by shareholders.
The Board continued the share buyback
programme, including convening two
additional general meetings during the year
to obtain shareholder approval for this
purpose, and reviewed marketing, investor
relations and broker feedback.
Enhanced retail
marketing
programme
The Board worked with the Manager on an
enhanced 2026 marketing and media plan
focused on retail investor engagement,
considering proposed activity levels, third-
party research support, expected benefits,
budget oversight, KPIs and channel mix.
The Board approved the enhanced
programme, subject to oversight of costs, KPIs
and channel effectiveness. It considered that
the programme would support the
Company’s long-term interests by improving
market awareness, broadening retail investor
engagement and supporting demand for the
Company’s shares.
Governance
framework
The Board considered the 2024 AIC Corporate
Governance Code, the forthcoming material
controls reporting requirements and the
need to keep Board and Committee
documentation current.
The Board updated elements of its
governance framework and continued
preparatory work for the enhanced Provision
34 reporting requirements. In addition, the
Board reviewed the Articles of Association and
is proposing some updates to be approved
by shareholders at the forthcoming AGM
(see the Explanation of AGM resolutions on
pages 101-102 for more details).
Governance
Financial
Statements
Additional
Information AGM Notice
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Strategic
Report
Governance
Governance factors include mitigating risks such as
bribery and corruption, questioning board diversity,
executive pay, accounting standards and shareholder
rights, and positively influencing corporate behaviour.
ESG Report
Investment approach and ESG
engagement
The Team uses a combination of bottom-up and top-
down analysis to find companies with undervalued
long-term growth potential. ESG issues are identified as
part of the Team’s established ‘4Ms’ process, which
assesses portfolio companies’ models, management,
money and momentum.
A key part of the Team’s philosophy is the sustainability of
business models. The Team believes that, over time, the
most successful management teams are likely to be
those with strong ESG and sustainability characteristics, a
long-term focus, a good record of shareholder alignment
and a clear understanding of relevant industry themes.
This conviction and long-term focus are reflected in the
Company’s average holding period of over five years.
Sustainability themes regularly inform capital allocation
decisions. Companies providing goods and services which
address issues such as the transition to net zero, ageing
populations, urbanisation and the savings gap have been
attractive from a growth perspective. The Team is also
mindful of the risks associated with ESG-themed investing,
including policy instability, uncertainty around customer
adoption and technological obsolescence.
The Team believes that ESG factors affect all parts of an
investment case, often implicitly rather than explicitly.
The effectiveness of a company’s governance structure
and its impact on the environment and society are as
important as more traditional indicators of quality, such
as cash flow and returns on invested capital.
A company’s ESG characteristics also influence how it is
valued. These factors affect the valuation multiples that
the market is willing to apply to a company’s earnings, or
the cost of capital used to discount its cash flows. The
Fund Managers believe that companies with strong ESG
and sustainability characteristics may warrant a valuation
premium over time.
Engagement with portfolio companies
The Team’s combined experience in the UK market has
created a deep knowledge base. Its analysis is
supplemented by increasingly sophisticated ESG-
related data, broker research and company meetings.
The Team recognises that individual ESG data points
are not always material to company performance or
directly comparable between peers. However,
management’s overall attention to material ESG and
sustainability issues can be a useful indicator of quality,
long-term-oriented leadership and the ability to deliver
enduring success.
The general level of governance at UK listed companies
is high by reference to best practice principles. The
Team uses this market feature to support its corporate
governance and company research. As active
managers in the UK market, the Team is committed to
good stewardship and attends approximately 300
company meetings each year. These meetings are
used to challenge strategy and hold management to
account where issues have arisen.
In addition to engaging with company management,
the Team will often engage with the boards of portfolio
companies where it believes concerns should be
escalated. If the Team does not consider that
shareholder concerns are being addressed through
engagement, it will consider disinvesting.
The Team works closely with JHI’s in-house Responsible
Investment and Governance (“RI”) team, which provides
specialist ESG resource. The RI team screens portfolios for
major ESG issues and highlights important ESG
engagement topics ahead of company meetings. The RI
team and Fund Managers also coordinate a pipeline of
proactive engagement with companies on a range of
ESG themes. In the year to 31 May 2026, they undertook
direct ESG engagements with 27 companies.
• environmental issues at 4 of the meetings;
• social issues at 8 of the meetings; and
• governance issues at 25 of the meetings.
Defining ESG
The Board believes that engaged, long-term
ownership can be a force for positive change.
It therefore supports the Fund Managers’
responsible approach to environmental, social and
governance (“ESG”) matters, including the
integration of ESG considerations into investment
decisions by the fund management team (the
“Team”), company engagement and voting at
investee company shareholder meetings. As one of
the largest investors in listed UK small and mid-cap
companies, the Fund Managers recognise the
meaningful influence they can have on the conduct
of portfolio companies and their responsibility to
exercise that influence.
Environment
Environmental factors include climate change,
energy efficiency, resource depletion, water and
waste management.
Social
Social factors include employee and community
relations, diversity, quality of life, enhancements in
knowledge and advances in supportive technology
for improved sustainability.
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
ESG Report continued
Thematic engagement
The Team carried out thematic engagement during the year to 31 May 2026 with portfolio companies on ESG topics.
These themes included cyber readiness for UK consumer companies, governance and supply chain standards for
aerospace and defence, ESG review of UK mining companies, and governance engagement on active UK takeover
situations. Examples of engagement are set out below. The Team continues to engage with investee companies to
monitor progress.
Reason for engagement: The Team undertook a
thematic engagement with UK-listed smaller
companies in the aerospace and defence sector to
deepen its understanding of supply chain oversight,
governance processes and ESG disclosures. The
sector presents inherently higher risks given exposure
to export controls, sanctions regimes and sensitive
end markets. The Team’s focus was on how
companies manage human rights, anti-corruption,
health and safety, and emerging risks such as
responsible artificial intelligence. Failure to
appropriately manage these risks increases the
likelihood of regulatory breaches, reputational
damage and operational disruption, driving potential
contract losses and ultimately undermining the
investment thesis.
Objective for engagement: To assess whether
governance and compliance frameworks were
effectively embedded in day-to-day operations, and to
encourage improved disclosure on key ESG indicators.
The Team focused on understanding how each
company manages supply chain risk, oversees human
rights considerations in higher-risk geographies, and
ensures accountability through board-level
governance structures.
Scope and process: The Team engaged with a defence
services company, Company A, with operations in
the UK, US and Australia and with a defence products
and services business, Company B, with a global
sales footprint.
Outcome: The engagement was constructive and
provided greater clarity on how companies integrate
ESG policies into operations, supporting the Team’s
assessment that key risks are being actively managed
and that its broader investment cases remain intact.
At Company B, the engagement highlighted a
centralised and systematic approach to compliance,
underpinned by its group-wide compliance portal and
governance framework. Supplier screening, export
control processes and escalation protocols to the ESG
Committee appear well embedded, providing a strong
foundation for managing risks associated with higher-
risk jurisdictions. The company evidenced high
completion rates for ethics-related training
programmes and demonstrated a proactive approach
to health and safety management and training.
However, disclosure remains relatively limited in certain
areas, particularly around supplier audit coverage and
whistleblowing activity, where greater transparency
would enhance external accountability.
At Company A, the engagement confirmed the
presence of a structured, risk-based approach to
supply chain oversight and human rights
management, supported by internal screening
processes and third-party tools. Governance
frameworks appear well developed, including the use
of specialist committees to review higher-risk cases
and oversee ethical considerations. The company has
also taken steps to strengthen safety processes and
has demonstrated progress in areas such as workforce
stability. On emerging risks, the company has
proactively developed an Artificial Intelligence ethical
governance framework, which will continue to evolve as
best practice develops. As with Company B, there is
scope for improved disclosure of quantitative ESG
metrics, particularly in relation to supplier audits and
whistleblowing, which would support better
comparability and tracking of progress over time.
Importantly, the engagement indicated that many ESG
risks most relevant to the sector are being actively
managed, rather than addressed solely through
high-level policies. However, it also reinforced that
enhanced disclosure, particularly around quantitative
metrics and assurance, remains a key area for
improvement. The Team will continue to engage with
both companies to encourage incremental progress
and to monitor how ESG practices evolve in response to
increasing regulatory and stakeholder expectations.
Engagement on governance and supply chain standards in aerospace
and defence
Governance
Financial
Statements
Additional
Information AGM Notice
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ESG Report continued
Voting
The Board believes that voting at general meetings is an
integral part of exercising responsible corporate
stewardship and an effective way of signalling
shareholder views on board policy, practices and
performance. The Board has delegated voting
responsibility to the Manager for the rights attached to the
shares held in the Company’s portfolio. The Manager
votes actively at shareholder meetings and engages with
companies as part of the voting process.
Voting decisions are guided by the best interests of
investors and based on an in-depth understanding of the
relevant companies’ operations. Votes are cast in
accordance with the Manager’s ESG Investment Policy,
which is publicly available at www.janushenderson.com.
To maintain oversight, the directors receive reporting at
each board meeting on how the Manager has voted the
shares held in the Company’s portfolio. They also monitor
the Manager’s ESG Investment Policy, Stewardship Policy,
Proxy Voting Policy and Procedures.
Reason for engagement: Against a backdrop of
continued undervaluation in UK smaller companies,
elevated M&A activity over the past 12 months has
created a risk of opportunistic bids at discounted
valuations, reinforcing the need for boards to have a
clear view of intrinsic value and engage with
shareholders on what constitutes an appropriate
outcome. In this context, active shareholder
engagement is important to ensure proposed
transactions deliver appropriate value and align with
long-term return expectations, particularly given
differing perspectives across strategic buyers, financial
sponsors and public market investors.
Objective for engagement: The objective was to
engage directly with board chairs to understand the
structure and process of potential bids, including the
parties involved and how boards assess value relative
to market expectations. The Team sought to
communicate its view on fair value, informed by its
assessment of underlying fundamentals and potential
strategic upside, including break-up value and
synergies. The Team also aimed to understand
disclosure frameworks, transaction timelines and
governance processes, while ensuring that
management teams remain focused on core
operations during periods of heightened corporate
activity.
Scope and process: The Team conducted a series of
meetings with the chairs of five UK-listed companies
subject to strategic interest or bid activity, including a
telecommunications business, a private healthcare
company, a medical products group, an automotive
dealership software provider and a food distribution
company. Engagement focused on understanding
board decision-making, valuation frameworks, bidder
perspectives and communication strategies with
shareholders throughout the process as well as making
the Team’s views on appropriate valuation levels clear.
Outcome: Engagements were constructive, with boards
demonstrating openness to shareholder perspectives
and a willingness to engage on valuation and process.
Meetings with chairs provided valuable insight into how
boards balance competing stakeholder considerations
and assess offers in the context of long-term
shareholder value. Not all bid situations progressed,
reinforcing the importance of disciplined valuation
frameworks. Ensuring clear communication from the
board to shareholders on how value is being maximised
remains a key focus area.
In the case of the UK telecommunications company,
the Team undertook extensive engagement as the
business entered a formal offer process. Discussions
focused on understanding how the board was
approaching value maximisation, including
consideration of strategic versus financial buyers,
potential break-up scenarios and the realisation of
synergies. This engagement has provided a clearer
understanding of how bidders may perceive the asset,
and the Team continues to monitor developments, with
an outcome expected in the near term.
For the private healthcare company and the food
distribution business, formal offers were received at a
level we deemed fair, reflecting intrinsic value today
while appropriately accounting for future upside
potential and near-term execution risks. The food
distribution business successfully completed a
transaction earlier in the year with the outcome of the
private healthcare company expected to be
completed in the near-term. Engagements helped
clarify valuation parameters and assess whether
outcomes reflected fair value for shareholders.
The medical products company has attracted multiple
indicative approaches, however no formal offer has
materialised to date, with the company remaining in
takeover discussions. The Team believes the company
retains significant standalone value, particularly as it
continues to execute on synergies from a prior
acquisition, and have communicated its view to the
board.
In the automotive dealership software business, a
potential acquirer withdrew an offer amid broader
market turbulence and concerns around AI-related
disruption earlier in the year. The Team continues to see
meaningful upside in the standalone equity case,
supported by the delivery of large contracts, margin
enhancements and strong fundamentals reinforcing
the importance of maintaining a long-term view in
value maximisation.
Governance engagement on UK takeover activity
36
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
The Fund Managers have a strong focus on good
governance and take an active approach to voting.
Where appropriate, they will vote against resolutions at
general meetings. In most cases this follows
engagement or consultation with the company
concerned before the meeting.
During the year to 31 May 2026, the key issues on which the
Fund Managers voted against management concerned
remuneration and incentive arrangements, board
composition and director accountability, shareholder
rights/corporate control, and one proposed amendment
to company articles. The Company voted at 108 meetings
in total, representing 100% of the portfolio companies’
general meetings. At 8 of these meetings (7%), the
Company cast at least one vote against management.
Where appropriate, the Team also participates in
consultations with board members of portfolio companies
before or after contentious AGM resolutions, to influence
board-level decision-making.
The Company voted against 11 resolutions. These votes
against were in line with management recommendations.
Voting record
Meetings voted with one or 7%
more votes cast against
management
Meetings voted with no 93%
votes cast against
management
In terms of resolutions not supported, these covered
board composition and director accountability and
shareholder rights/corporate control.
Compensation 45%
Director-related 27%
Strategic transactions 18%
Articles 10%
Source: Janus Henderson using ISS categories
Note: Some meetings had more than one vote against management
Stewardship
Stewardship is an integral part of JHI’s active, long-term
approach to investment management. Strong ownership
practices, including management engagement and proxy
voting, can help protect and enhance long-term
shareholder value. JHI supports stewardship codes and
broader initiatives globally, including as a founder
signatory of the UN Principles for Responsible Investment,
and is a signatory of the Financial Reporting Council’s
(“FRC”) Stewardship Code.
JHI’s portfolio managers and analysts undertake intensive
research, including thousands of interviews each year with
senior executives and chairs of companies around the
world. These teams develop long-term relationships with
the management of companies in which they invest.
Where concerns arise about a company’s practices or
performance, they seek to use these constructive
relationships to engage with management or express
their views through voting on management or
shareholder proposals. Escalation of the engagement
activity depends on the individual circumstances of the
company concerned.
The environment
The UK Smaller Companies team engages with portfolio
companies on environmental matters where relevant.
As an investment trust, the Company’s own direct
environmental impact is minimal. The Company has no
greenhouse gas emissions to report from its operations,
and has no responsibility for any other emissions-
producing sources under the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations 2013.
The Company’s indirect environmental impact occurs
through its investments. The Fund Managers monitor the
carbon footprint of the portfolio as a measure of its
carbon intensity. For these reasons, the Board considers
that the Company is a low-energy user under the
Streamlined Energy & Carbon Reporting Regulations
(“SECR”) and is therefore not required to disclose energy
and carbon information.
Janus Henderson recognises the importance of
managing its operational activities in a sustainable way
and minimising any adverse impact on the environment.
In 2021, JHI reached its target of reducing its carbon
footprint for its own operations by 15% per full-time
employee (“FTE”) based on 2018 consumption. In 2022,
JHI set new five-year reduction targets for its operations
relative to a 2019 baseline:
• reduction target of 29.4% in Scope 1 (fuel) and Scope 2
(electricity) emissions;
• reduction target of 17.5% in Scope 3 (business travel,
freight, paper, water, waste, etc.) emissions; and
• reduction target of 17.5% on water and waste
consumption by FTE.
Janus Henderson has been certified as a CarbonNeutral®
company since 2007 and retained that certification
throughout 2025, offsetting its residual emissions by
financing renewable energy, afforestation and landfill
methane capture projects. It discloses its carbon
emissions annually through SECR, the Carbon Disclosure
Project and its 2025 Responsibility Report.
Janus Henderson also produces product-level Task Force
on Climate-Related Financial Disclosures (“TCFD”) reports
for funds in scope, as well as an entity-level TCFD report.
These reports include an overview of the climate-related
governance, strategy, risk management, and metrics and
targets of JHI and its portfolios. Product-level metrics
include absolute carbon emissions, carbon footprint,
weighted average carbon intensity, implied temperature
rise and climate scenario analysis. JHI’s TCFD Report
specific to the Company is available at
www.hendersonsmallercompanies.com.
ESG Report continued
Governance
Financial
Statements
Additional
Information AGM Notice
37
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Strategic
Report
Viability Statement
When considering the viability of the Company, the
Board has assessed the Company’s prospects over a
five year period to 31 May 2031, which it considers
appropriate given the Company’s long-term
investment horizon, the liquidity of its portfolio, and
alignment with the Board’s strategic planning cycle
and typical investor timeframes. The Board’s
assessment took into account the Company’s
current financial position and investment strategy,
the liquidity and diversity of its assets, and the stable
borrowing arrangements in place (including the
duration and financial covenants of its loan facility).
The scheduled continuation vote at the 2028 AGM
within the five-year horizon was also considered. The
Board notes the strong shareholder support of 95% of
votes cast for the last continuation vote in 2025 and,
for the purpose of this assessment, has assumed
continued shareholder approval in 2028.
In making this robust assessment, the Board evaluated
how the Company’s principal risks and uncertainties, as
detailed on pages 27-28 of the Strategic Report, could
affect its longer-term viability. The review encompassed
risks relating to investment performance and market
volatility, the impact of gearing and liquidity constraints,
regulatory compliance issues, and operational resilience,
including reliance on service providers and financial
reporting controls. The Board modelled severe but
plausible scenarios, such as a sharp fall in portfolio value
and investment income, using multi-year cash flow
projections and sensitivity analysis to test whether the
Company could continue to meet its liabilities, including
debt covenants and dividend payments, under stressed
conditions. Under these worst-case conditions, the
Company’s assets remained sufficiently liquid and
projected cash flows provided ample headroom above
borrowing covenants, comfortably covering the
Company’s limited liabilities and planned dividends.
The Board also considered broader uncertainties, such
as geopolitical and macroeconomic instability, persistent
inflation, higher interest rates and UK market volatility,
and concluded that these remain within the scope of the
Company’s existing principal risks and did not identify
any new risk factors. The Board takes comfort that the
Company’s resilience is supported by its liquid, diversified
assets, modest fixed costs, and established risk controls,
and it does not foresee any need to alter the Company’s
strategy or risk management framework in ways that
would affect its long-term viability.
Accordingly, based on this thorough assessment and the
comfort gained from the stress testing, the directors
have a reasonable expectation that the Company can
continue in operation and meet its liabilities as they fall
due over the five year period to 31 May 2031.
The Directors have also concluded that the Company has
adequate resources to continue in operational existence
for at least 12 months from the date of approval of these
financial statements and it is therefore appropriate to
prepare these financial statements on a going concern
basis. More information can be found in Note 1b to the
Financial Statements on page 74.
Approval
The Strategic Report was approved by the Board and
signed on its behalf by:
Penny Freer
Chair of the Board
29 July 2026
38
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Governance
In this section
40 Directors and Fund Managers
43 Corporate Governance Report
49 Audit and Risk Committee Report
52 Nomination Committee Report
55 Management Engagement Committee Report
56 Directors’ Remuneration Report
59 Directors’ Report
62 Statement of Directors’ Responsibilities
Governance
Financial
Statements
Additional
Information AGM Notice
39
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
Directors and Fund Managers
The right balance of skills and experience
Penny
N
ME
Freer
Position: Chair of the Board
(from 1 October 2021)
Date of appointment:
14 September 2018
Skills and experience
Penny is an experienced board
director who brings in-depth
investment expertise and leadership
experience to the Board. She has
many years’ experience of UK smaller
companies, both as a director and as
an investment banker advising
companies in this sector.
From 2000 to 2004 Penny led Robert
W Baird’s UK equities division. Before
that, she spent eight years at Credit
Lyonnais Securities, where she
headed the small and mid-cap
equities business.
Other appointments
Penny is chair of AP Ventures LLP.
She is also a non-executive director
of Mercia Asset Management PLC,
Weir Group plc and CobWeb
Cyber Limited.
Number of shares held in the
Company 4,400
Alexandra
A
N
ME
Mackesy
Position: Chair of the Audit and Risk
Committee (from 4 October 2019)
Date of appointment:
14 September 2018
Skills and experience
Alexandra brings a specialist
governance perspective and
particular experience of global
smaller companies to the Board. She
has a strong financial and risk
management background, with 22
years’ experience as a non-executive
director, audit committee chair and
senior independent director of
UK-listed investment trusts.
During her executive career in the
investment industry, Alexandra held
senior equity research roles with
Credit Suisse, JPMorgan and SG
Warburg in Asia.
Other appointments
Alexandra is non-executive chair of
JPMorgan China Growth & Income
plc. She is also a director of Board
Level Partners, providing external
board evaluation services, and an
advisory member of the investment
committee of Oriel College, Oxford. In
her charity activity, she is a trustee of
the Longborough Festival Opera.
Number of shares held in the
Company 8,200
Kevin
A
N
ME
Carter
Position: Senior Independent Director
(from 1 October 2022)
Date of appointment:
1 May 2021
Skills and experience
Kevin brings extensive investment
management and leadership
experience to the Board, both as a
former fund manager and a senior
executive in the investment industry.
He has significant non-executive
experience in the listed investment
company sector, having served as
non-executive chair of Murray
International Trust plc and JPMorgan
American Investment Trust plc, and
as a director of Lowland Investment
Company plc.
Kevin is a CFA charterholder and has
a doctorate in mathematical
statistics with a research subject in
financial economics. During his
executive career, he led the European
investment practice of Watson Wyatt
Limited and was chief executive
officer of Old Mutual Asset Managers.
Other appointments
Kevin is a non-executive director of
Aspect Capital Limited and an
advisory board member of Battersea
Dogs and Cats Home. Kevin was
previously a trustee director of the
BBC Pension Scheme and chair of its
investment committee.
Number of shares held in the
Company 15,000
Board of Directors
The directors appointed to the Board at the date of this Annual Report are set out below:
See p.45 Leadership, roles and division of responsibilities
Chair of Committee
A
Audit and Risk Committee
N
Nomination Committee
ME
Management Engagement
Committee
40
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Directors and Fund Managers continued
Yen Mei
A
N
ME
Lim
Position: Director
Date of appointment:
3 April 2023
Skills and experience
Mei is a chartered accountant and
qualified lawyer. With 25 years’
experience in the financial services
industry, Mei brings deep
understanding of corporate finance,
M&A, strategy, transformational
change and business development
to Board deliberations. Mei has an
ESG-focused approach, particularly
around diversity and inclusion.
Other appointments
Mei is the Managing Partner at
Anthemis, a venture capital investor
with an embedded finance, AI and
impact investment focus and a Board
Director of CommonAI Holdings.
Prior to joining Anthemis, Mei was a
managing director at Barclays,
working there for over a decade in a
variety of different areas, notably
corporate development, strategy,
principal investments and finance.
Mei’s earlier career spans investment
banking at Macquarie Bank in M&A for
financial institutions, Ernst & Young LLP
(EY) in transaction advisory support
and Goldman Sachs as an associate,
having qualified as a chartered
accountant with EY in 2004.
Number of shares held in the
Company 2,000
Michael
A
N
ME
Warren
Position: Director
Date of appointment:
1 March 2021
Skills and experience
Michael brings a combination of
investment, operational and senior
management experience to the
Board, including experience as a fund
manager and as a senior executive in
the asset management industry. He
has particular expertise in leading
sales and marketing divisions and in
the management of investment
businesses.
During his executive career, Michael
held several senior management and
investment roles with Thames River
Capital, HSBC Investments UK Ltd,
Deutsche Asset Management and
Barings Asset Management.
Other appointments
Michael is chairman of EdenTree
Investment Management Limited
and a non-executive director of
Carrington Wealth Management.
Michael was previously an adviser to
Gresham House Asset Management
and a non-executive director of
Fidelity Asian Values PLC and
Rathbone Asset Management Limited.
Number of shares held in the
Company 8,000
Governance
Financial
Statements
Additional
Information AGM Notice
41
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
All the directors are independent
and non-executive. All directors
are members of the
Management Engagement
Committee and the Nomination
Committee, both of which are
chaired by Penny Freer. The Audit
and Risk Committee is chaired by
Alexandra Mackesy, the other
members of which are Kevin
Carter, Yen Mei Lim and
Michael Warren.
Directors and Fund Managers continued
Cassie Herlihy
Position:
Deputy Fund Manager
1 year at JHI
9 years’ financial industry experience
Skills and experience
Cassie is a Portfolio Manager on the UK Equities Team
at Janus Henderson Investors, a position she has held
since joining the firm in 2025. Prior to this, she was an
associate director, fund manager with Gresham House
from 2021, where she co-managed the Gresham House UK
Smaller Companies Fund and was a member of the
public equities team. Before this, she was a senior analyst,
corporate broking with Citigroup from 2020 and an
associate in the corporate and investment banking
division of Investec from 2017.
Cassie holds a BA in Geography from the University of
Cambridge and an MSc in The Psychology of Economic
Life from the London School of Economics.
Indri van Hien
Position:
Fund Manager
15 years at JHI
19 years’ financial industry experience
Skills and experience
Indri van Hien is a Portfolio Manager on the UK Equities
Team at Janus Henderson Investors, a position she has
held since 2016. She joined Henderson in 2011 as a UK
equity analyst. Before joining Henderson, Indri worked at
PricewaterhouseCoopers, where she qualified as a
chartered accountant.
Indri graduated with a BA (Hons) in modern history
and economics from the University of Oxford. She is
a member of the ICAEW and holds the Investment
Management Certificate and the Chartered Financial
Analyst designation.
Fund Managers
The fund managers at the date of this report are:
See p.12 Fund Managers’ Report
42
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
The fund management team have shareholdings in the Company which align their interests to those of
shareholders.
Corporate Governance Report
Governance structure
Board of Directors
Comprises independent non-executive directors
Chair: Penny Freer
Senior Independent Director: Kevin Carter
The terms of reference for each of the committees of the Board are kept under regular review and are available
at www.hendersonsmallercompanies.com or via the corporate secretary.
Contractually engages third-party service providers
Janus Henderson
Fund Management: UK Smaller Companies equities team,
comprising Indri van Hien and Cassie Herlihy
Sales, Marketing, Administration
Corporate Secretary: Janus Henderson Secretarial Services UK Limited
Alternative Investment Fund Manager: Janus Henderson Fund Management UK Limited
Auditor
Forvis Mazars LLP
Custodian and
depositary
HSBC Bank plc
Corporate broker
Deutsche Numis
Registrar
Computershare
Investor Services plc
Audit and Risk
Committee
Chair:
Alexandra Mackesy
Purpose: Ensures the integrity
of financial reporting, evaluates
the effectiveness of the
systems of internal control and
risk management, and
oversees the relationship with
the external auditors
See p.49
Audit and Risk Committee Report
Nomination
Committee
Chair:
Penny Freer
Purpose: Ensures the Board has
a balance of skills, experience
and diversity, oversees
performance reviews of the
Board and its committees,
considers directors’ fees and
maintains an effective
framework for succession
planning, with a
formal approach to the
appointment of directors
See p.52 Nomination Committee
Report
Management Engagement
Committee
Chair:
Penny Freer
Purpose: Ensures the
performance of service
providers meets expectations
and their terms of engagement
remain appropriate
See p.55 Management
Engagement Committee Report
Governance
Financial
Statements
Additional
Information AGM Notice
43
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
Corporate Governance Report continued
Chair’s statement on corporate
governance
The Board is responsible for the governance of the
Company and for ensuring that appropriate
arrangements are in place to support effective oversight,
accountability and long-term decision-making.
This Corporate Governance Report explains how the Board
applied the principles of the 2024 AIC Corporate
Governance Code during the year ended 31 May 2026 and
how the Company’s governance framework operated
during the year.
Compliance with corporate
governance codes
The Company is subject to the UK Corporate Governance
Code through the UK Listing Rules. The Board has chosen to
report against the 2024 AIC Corporate Governance Code
(the “AIC Code”), which has been endorsed by the
Financial Reporting Council and is tailored to the
governance arrangements of externally managed
investment companies. The Board considers that reporting
against the AIC Code enables the Company to meet its
obligations under the UK Corporate Governance Code and
the relevant UK Listing Rules. This Corporate Governance
Report also constitutes the Company’s corporate
governance statement for the purposes of DTR 7.2.
The 2024 AIC Code applies to the Company’s financial
year ended 31 May 2026. The enhanced reporting
requirements under Provision 34 of the AIC Code, relating
to the Board’s declaration on the effectiveness of
material controls, will apply to the Company for the
financial year ending 31 May 2027. The preparatory work
undertaken during the year is described in the Audit and
Risk Committee Report.
The AIC Code and the UK Corporate Governance Code
are available on the AIC and FRC websites respectively.
Statement of compliance
The Board confirms that, throughout the year ended
31 May 2026 and up to the date of this report, the
Company applied the principles and complied with the
relevant provisions of the AIC Code, except where certain
provisions were not applicable to the Company’s
externally managed structure. As an externally managed
investment trust, the Company has no employees, chief
executive or executive directors. Accordingly, the
provisions of the AIC Code and UK Corporate Governance
Code relating to executive remuneration and workforce
engagement are not directly applicable. The Board has
not established a separate remuneration committee.
Directors’ remuneration is determined by the Board
following recommendations from the Nomination
Committee. The Chair does not chair discussions relating
to her own remuneration, succession or performance
evaluation.
The Company has not established its own internal audit
function, for the reasons explained on page 48.
Governance overview
The Board has three principal committees: the Audit and
Risk Committee, Management Engagement Committee
and Nomination Committee. The governance structure
and committee membership are set out on page 41.
The Company is externally managed and has engaged
third-party service providers to deliver its operations. The
Board delegates investment management contractually
to Janus Henderson, which also provides or arranges
day-to-day accounting, company secretarial,
administrative, sales and marketing services. The Board
has appointed a depositary, which in turn appoints the
custodian responsible for the safe custody of the
Company’s assets, and a registrar to maintain the register
of members and assist shareholders with queries about
their holdings.
The Board retains responsibility for strategy, investment
performance, risk oversight, internal controls, service
provider oversight and governance. The principal service
provider appointments were made after consideration of
the quality and cost of the services offered, including the
operation of the providers’ control systems in relation to
the Company’s affairs. The Board and its committees
maintain oversight of service providers through regular
and ad hoc reporting, ongoing monitoring by the
Manager and annual meetings with representatives of key
providers to discuss, among other matters, performance,
service levels, value for money, information security and
business continuity.
The Board meets at least six times a year, with additional
board or committee meetings held as required. The
directors also have regular contact with the Fund
Managers, the corporate secretary and other
representatives of the Manager between meetings.
44
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Corporate Governance Report continued
Leadership, roles and division of responsibilities
Role Primary responsibilities
Board
• Provides leadership and oversight of the Company’s affairs.
• Sets the Company’s investment objective, policy and strategy, subject to shareholder approval
where required.
• Oversees strategy, investment performance, risk management, internal controls, service provider
performance, financial reporting, governance, culture and stakeholder responsibilities.
• Ensures effective engagement with shareholders and potential investors.
Chair
• Leads the Board and manages Board business.
• Sets the Board agenda with the corporate secretary.
• Ensures Directors receive appropriate information, promotes effective discussion and challenge.
• Leads the Board’s engagement with shareholders and other key stakeholders.
• Manages the relationship with the Manager.
Committee
Chairs
• Lead their respective Committees.
• Ensure that Committee responsibilities are discharged effectively.
• Maintain appropriate engagement with relevant service providers.
• Report Committee activity to the Board.
Senior
Independent
Director
(“SID”)
• Acts as a sounding board for the Chair and as an intermediary for other Directors where required.
• Leads the review of the Chair’s performance.
• Available to shareholders where contact through the Chair would be inappropriate.
Independent
non-
executive
directors
• Provide independent judgement, constructive challenge and specialist experience.
• Scrutinise the performance of the Manager and other service providers.
• Contribute to strategy, risk oversight, succession planning and governance.
Company
Secretary
• Advises the Board on governance, regulatory and procedural matters.
• Supports the Chair in planning board and committee business.
• Minutes the proceedings of board and committee meetings.
• Helps ensure that board and committee processes operate effectively.
Manager
(“AIFM”)
• Provides, or arranges the provision of, investment management, accounting, company secretarial,
administrative, sales and marketing services.
• Reports to the Board on investment performance, risk, compliance, financial reporting and service
provider matters.
Fund Manager
• Manages the investment portfolio within the investment objective, policy and limits set by the Board.
• Selects portfolio holdings, monitors portfolio risk, determines acquisitions and disposals.
• Manages gearing within Board-approved limits.
Shareholders
• Approve matters reserved to shareholders, including material changes to the investment policy,
amendments to the Company’s Articles of Association, the final dividend, directors’ election and
re-election, and the aggregate limit on directors’ remuneration.
Governance
Financial
Statements
Additional
Information AGM Notice
45
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
Corporate Governance Report continued
Operation of the Board
The Board has a formal schedule of matters reserved for
its decision, which is available on the Company’s website.
Matters reserved for the Board include strategy,
investment objective and policy, capital structure,
borrowing arrangements, financial reporting, dividends,
board and committee composition, risk management
and internal controls, and the appointment and oversight
of key service providers.
Each board meeting follows a formal agenda agreed by
the Chair and the corporate secretary. The Board receives
reports on investment performance, portfolio activity,
gearing, financial position, compliance with investment
limits, shareholder movements, discount management,
marketing and investor relations, regulatory developments
and other relevant matters.
Representatives of the Manager attend relevant parts of
board meetings to present reports and respond to
directors’ questions. The Board also receives reports from
other service providers and advisers where required.
Shareholder correspondence addressed to the Chair
or the Company is forwarded in accordance with
agreed procedures and considered by the Board
where appropriate.
Relations with shareholders
The Board seeks regular dialogue with the Company’s
shareholders and values their feedback. Shareholder
views are considered in Board discussions, and the Chair
and Senior Independent Director make themselves
available to meet major investors as needed. A detailed
description of how the Board and the Manager engaged
with shareholders and other key stakeholders during the
year is provided in the Strategic Report (see pages 31-32).
Corporate secretary
The Board has direct access to the advice and services
of the corporate secretary, Janus Henderson Secretarial
Services UK Limited, which provides company secretarial
support to the Board. The corporate secretary, through
its nominated chartered secretary, advises the Board on
governance, regulatory and procedural matters.
Appropriate reporting lines and controls are in place to
manage potential conflicts between the Company and
Janus Henderson.
Directors’ appointment and tenure
Appointment and retirement
The Board may appoint directors at any time. Any director
appointed during the year stands for election by
shareholders at the next AGM in accordance with the
Company’s Articles of Association. Each director receives a
letter of appointment setting out the terms of appointment,
expected time commitment and other key responsibilities.
Directors may be removed by special resolution in
accordance with the Companies Act 2006 and the
Company’s Articles of Association.
Tenure
Directors, including the Chair, are generally expected to
serve for no more than nine years, subject to annual
re-election by shareholders, satisfactory performance
evaluation and the Board’s assessment of the Company’s
succession needs. This policy supports regular Board
refreshment while recognising the value of retaining
appropriate knowledge of the Company, its investment
strategy and the relationship with the Manager.
The Board may agree to extend a director’s tenure
beyond nine years only in exceptional circumstances and
where it considers this to be in the best interests of the
Company. Any such extension would be subject to annual
review, satisfactory performance evaluation and
shareholder re-election.
In accordance with the AIC Code and UK Corporate
Governance Code, all directors will stand for annual
re-election at the 2026 AGM. Following the review of each
director’s contribution, performance and time
commitment, the Board concluded that each director
standing for re-election continued to be effective and to
demonstrate commitment to the role.
External commitments
The Board considers each director’s external
commitments on appointment and annually as part of
the performance evaluation process. Directors are
required to seek approval from the Chair before
accepting any new external appointment. The Chair seeks
the Senior Independent Director’s approval before
accepting any new external appointment.
A schedule of directors’ other commitments is reviewed
by the Board. The Board is satisfied that each director has
sufficient time to discharge their responsibilities to the
Company.
Professional development
New directors receive an induction tailored to their
experience and the Company’s investment strategy,
governance framework and key service provider
arrangements. Directors are encouraged to attend
relevant training and industry events, including
investment trust director development sessions
provided by Janus Henderson and external advisers.
Individual training needs are considered as part of the
annual Board evaluation process.
Directors’ independence
The Board reviewed the independence of each director
during the year and concluded that all directors remained
independent of the Manager and free from relationships
or circumstances likely to affect, or appear to affect,
their judgement.
The Chair was independent on appointment and the Board
considers that she continues to demonstrate objective
judgement and independence from the Manager.
The Board also considers the independence and
contribution of directors with longer tenure with particular
care, taking into account their character, judgement,
performance, external commitments and relationships
with the Manager and other service providers. In assessing
the independence of Penny Freer and Alexandra Mackesy
as longer-serving directors, each having served on the
Board for more than seven years, the Board gave
particular consideration to their tenure. The Board
concluded that both directors continued to demonstrate
independence of character and judgement, objective
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Corporate Governance Report continued
oversight and constructive challenge, and that there were
no relationships or circumstances likely to affect, or
appear to affect, their independence. The Board also
considered that their knowledge of the Company, its
investment strategy and its service provider
arrangements continued to support effective oversight in
the interests of shareholders.
There were no contracts in effect during or at the end of
the year in which any director was materially interested
and which were significant to the Company’s business.
No director has a service contract with the Company and
there are no agreements between the Company and its
directors providing for compensation for loss of office.
The Board has adopted a procedure under which
Directors may obtain independent professional advice, at
the Company’s expense, in the furtherance of their duties.
Directors’ conflicts of interest
The Company’s Articles of Association permit the Board to
authorise situations in which a director has, or may have,
a conflict of interest. The Board has a formal process for
directors to declare actual or potential conflicts. Any such
conflicts are considered by the non-conflicted directors,
who may authorise the conflict subject to appropriate
conditions or limitations. The Board reviews directors’
interests regularly. Any conflicts considered and any
authorisations given are recorded in the relevant minutes
and in the register of interests. The Board is satisfied that
the procedures for identifying, authorising and managing
conflicts of interest operated effectively during the year.
Board attendance
The table below sets out the scheduled board and
committee meetings held during the year and each
director’s attendance record. Additional board and
committee meetings were held during the year as
required, to consider fund manager succession, share
buybacks, industry developments, marketing activity,
results, dividends and other corporate matters.
All directors attended the scheduled board and
committee meetings for which they were eligible, except
for one board meeting which the Chair was unable to
attend due to illness. All directors were present at the AGM
held on 7 October 2025.
Board ARC MEC NC
Number of meetings
Penny Freer
1
5/6 3/3 1/1 1/1
Alexandra Mackesy
6/6 3/3 1/1 1/1
Kevin Carter
6/6 3/3 1/1 1/1
Yen Mei Lim
6/6 3/3 1/1 1/1
Michael Warren
6/6 3/3 1/1 1/1
Victoria Sant
2
2/2 1/1 n/a n/a
Notes:
ARC: Audit and Risk Committee
MEC: Management Engagement Committee
NC: Nomination Committee
1 Penny Freer was unable to attend one meeting held during the year
due to illness
2 Victoria Sant retired as a director on conclusion of the AGM on
7 October 2025
Directors’ insurance and indemnification
Directors’ and officers’ liability insurance was in place
throughout the year and remained in place at the date of
this report. The Company’s Articles of Association provide,
subject to applicable law, an indemnity for directors in
respect of liabilities incurred in the discharge of their
duties. No indemnity was given during the year or to the
date of this report.
Internal control and risk management
The Board has overall responsibility for the Company’s risk
management and internal control framework and for
reviewing its effectiveness. The Audit and Risk Committee
supports the Board in monitoring the framework, including
controls operated by the Manager and other key service
providers on behalf of the Company.
The main features of the Company’s internal control and
risk management arrangements in relation to the
financial reporting process include regular Board and
Audit and Risk Committee review of financial reporting,
accounting judgements, income forecasts, compliance
with investment limits, valuation controls, service provider
assurance reports and reports from the Manager and
other key service providers.
The Board has established an ongoing process for
identifying, evaluating and managing the principal and
emerging risks faced by the Company. The process
operated throughout the year and up to the date of this
report. It reflects the Company’s externally managed
structure and its reliance on specialist service providers.
The framework is designed to manage, rather than
eliminate, the risk of failure to achieve the Company’s
objectives and can provide only reasonable, not absolute,
assurance against material misstatement or loss.
The key components of the framework include:
• investment limits and restrictions, with reporting to the
Board on compliance;
• regular reporting on investment performance, gearing,
liquidity, income forecasts and expenses;
• contractual arrangements with the Manager and other
key service providers, including regular review of
performance and service levels;
• review of internal control and assurance reports from
the Manager and other key service providers;
• reporting from the Manager’s operational risk and
internal audit functions on matters relevant to the
Company; and
• Audit and Risk Committee review of financial reporting,
external audit findings, cyber security, business
continuity and other relevant control matters.
Governance
Financial
Statements
Additional
Information AGM Notice
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Strategic
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Governance
Corporate Governance Report continued
During the year, the Board, with support from the Audit and Risk Committee, conducted its annual review of the
effectiveness of the Company’s risk management and internal control framework. The Board concluded that the
Company’s risk management and internal control systems operated effectively during the year and that no material
failings or weaknesses were identified or reported to the Board.
Internal audit function
Having regard to the Company’s externally managed structure, the nature of its operations and the assurance reporting
received from the Manager and key service providers, the Board concluded that a separate internal audit function was not
required. The Board and Audit and Risk Committee will continue to review this position annually.
By order of the Board
For and on behalf of Janus Henderson Secretarial Services UK Limited
Corporate Secretary
29 July 2026
Board of Directors
(five non-executive directors)
Forvis Mazars LLP
(Statutory auditor)
HSBC
Bank plc
(“HSBC”)
(Depositary/Custodian)
Reporting
Depositary’s report
(quarterly)
Presentation from the
depositary and
custodian (annually)
Effectiveness
of control
environment of HSBC
Securities Services
(annually)
Janus Henderson
(“JHI” or the
“Manager”)
(Investment
management,
company secretarial,
sales, marketing,
financial reporting
and administration)
Reporting
Investment
performance update
at each meeting
Investment limits and
restrictions (monthly)
Internal controls
report (quarterly)
Effectiveness of
control environment
(annually)
BNP Paribas
(“BNP”)
(Accounting and
administration
services engaged
by the Manager)
Reporting
Balance sheet
Liquidity and gearing
Income forecasts
Portfolio valuation
Portfolio transactions
Effectiveness of
control environment
(annually)
Computershare
Investor
Services PLC
(“Computershare”)
(Registrar)
Reporting
Voting and scrutineer
reports pre- and post-
shareholder meetings
Shareholder
correspondence
Operational service
updates
Effectiveness of control
environment (annually)
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Audit and Risk Committee Report
• reviewing the Company’s principal and emerging risks;
• overseeing the relationship with the external auditor,
including audit planning, audit findings, auditor
independence, objectivity and effectiveness; and
• making recommendations to the Board on the
appointment, reappointment, remuneration and terms
of engagement of the external auditor.
The Committee Chair reports formally to the Board after
each Committee meeting and makes recommendations for
Board approval where required. The Committee’s
responsibilities are set out in formal terms of reference, which
are available at www.hendersonsmallercompanies.com
and are reviewed at least annually. The terms of reference
were updated during the year to reflect the 2024 AIC Code
and the forthcoming enhanced reporting requirements
relating to material controls.
Committee effectiveness review
The activities of the Committee were considered as part
of the external Board effectiveness review (see page 52
for more details). The review concluded that the
Committee continued to operate effectively.
Activities during the year
During the year, the Committee considered the following
matters:
Annual and half-year reporting and external
audit
• the appropriateness of the Company’s accounting
policies;
• the quality and effectiveness of the accounting records
and management information maintained on behalf of
the Company;
• the Half-Year Report to 30 November 2025 and the
Annual Report for the year ended 31 May 2026;
• the level of dividends to be recommended to the
Board;
• the external audit plan, including the principal areas of
audit focus;
• the nature, scope and findings of the external audit;
• the external auditor’s independence, objectivity and
effectiveness;
• the auditor’s remuneration and terms of engagement;
• the reappointment of the external auditor.
Internal controls and risk management
• the internal controls operated by the Manager, BNP
Paribas, HSBC Securities Services and Computershare;
• assurance reports and control reporting from key
service providers;
• the Manager’s reporting on operational risk, internal
audit, information security, cyber security and business
resilience;
• the Company’s principal and emerging risks, risk matrix
and heat map;
• the results of the annual individual director risk
assessment exercise, including areas of divergence in
directors’ risk ratings;
The Chair of the Audit and Risk Committee
(the “Committee”), Alexandra Mackesy, reports
to shareholders on the work of the Committee
during the year ended 31 May 2026.
Membership
The members of the Committee during the year were
Alexandra Mackesy as Chair, Kevin Carter, Victoria Sant,
Michael Warren and Yen Mei Lim. Victoria Sant retired
as a director and member of the Committee at the
conclusion of the AGM held on 7 October 2025. Penny
Freer, as Chair of the Board, attends meetings of
the Committee by invitation but is not a member of
the Committee.
The Committee is chaired by Alexandra Mackesy, who is
an experienced audit committee chair. Yen Mei Lim is a
chartered accountant. The Board considers that the
Committee as a whole has recent and relevant
financial experience and competence relevant to the
Company’s business. The Board is satisfied that the
Committee meets the applicable requirements of DTR
7.1 and that the Committee as a whole has
competence relevant to the investment trust sector.
Meetings
The Committee met three times during the year. The
Company’s external auditor, the Fund Managers and the
Manager’s Financial Reporting Senior Manager for
investment trusts are invited to attend meetings of the
Committee on a regular basis.
Other representatives of the Manager, including those
responsible for operational risk, internal audit, business
resilience and information security, are invited to attend
meetings as required. During the year, the Committee
received reporting on internal controls, information
security, business resilience, risk management and
service provider controls.
The Committee Chair also meets with the external auditor
as part of the audit planning process and during the audit.
These meetings allow the Committee Chair and auditor to
discuss audit progress, corporate developments and any
accounting or reporting matters arising.
Role and responsibilities
The Committee is responsible for supporting the Board in
relation to financial reporting, risk management, internal
controls and the external audit. Its principal
responsibilities include:
• reviewing the integrity of the Company’s annual and
half-year financial statements and related
announcements;
• considering significant accounting and reporting
judgements;
• reviewing the effectiveness of the Company’s risk
management and internal control framework;
• monitoring the control environments of the Manager
and other key service providers;
Governance
Financial
Statements
Additional
Information AGM Notice
49
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Strategic
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Governance
Audit and Risk Committee Report continued
• policies and procedures across key service providers
relating to business continuity, information and cyber
security, modern slavery, financial crime prevention,
sanctions compliance and internal controls (“service
provider due diligence”);
• the appropriateness of not establishing an internal
audit function, given that the Company is externally
managed;
• how internal assurance is obtained through the
Manager and key service providers, and whether the
absence of a separate internal audit function affected
the scope or effectiveness of the external audit;
• whistleblowing arrangements operated by the
Manager and key service providers;
• reporting from the depositary in relation to the
Company’s management in accordance with
applicable regulatory requirements; and
• liquidity analysis of cross-holdings across the
Manager’s funds.
The Committee also undertook preparatory work to
support the enhanced reporting requirements under
Provision 34 of the 2024 AIC Code. The Board will be
required to make a declaration on the effectiveness of
material controls in the Annual Report for the financial
year ending 31 May 2027. The Committee reviewed how
existing key controls are being mapped to the relevant
financial, operational, reporting and compliance control
categories, and considered the assurance available to
support that future declaration.
Through this report and the explanation of the application
of the Company’s accounting policies as set out in the
notes to the Financial Statements on pages 74-77, the
Committee has met the applicable reporting
requirements of the FRC’s Audit Committees and the
External Audit: Minimum Standard.
Annual Report for the year ended 31 May 2026
The Committee considered the following significant matters in respect of the Annual Report for the year ended 31 May 2026:
Significant matter How the matter was addressed
Valuation and
ownership of the
Company’s investments
The Manager is responsible for valuing the Company’s investments in accordance with its
responsibilities under the AIFMD rules and its written valuation policy. Actively traded
investments are valued using stock exchange prices provided by third-party pricing
vendors. Ownership of listed investments is verified through reconciliation to the
custodian’s records. The Committee reviewed the valuation approach and the controls
supporting investment ownership and valuation.
Performance fee
calculation
The performance fee calculation was prepared by BNP Paribas and reviewed by the
Manager and the Committee by reference to the management agreement. The
Committee reviewed the calculation and confirmed that no performance fee was
payable for the year.
Compliance with s1158
of the Corporation Tax
Act 2010
The Committee reviewed the controls in place to support the Company’s continued
compliance with s1158 of the Corporation Tax Act 2010 and maintenance of investment
trust status. The Committee received supporting reporting from the Manager and BNP
Paribas during the year.
Internal controls
The Committee reviewed internal control and assurance reporting from the Manager and
key service providers, including BNP Paribas, Computershare and HSBC Securities Services.
One service provider’s annual assurance report had received a qualified opinion from its
service auditor. The Committee considered the particular controls giving rise to the
qualification, whether these had impacted the Company directly and what corrective
actions were being taken by management. Following these discussions, the Committee
was satisfied that the Company’s internal controls had operated as intended and that the
qualification had no direct impact on the Company.
The Committee reviewed the results of the annual service provider due diligence exercise
and ascertained that all service providers provided satisfactory confirmations this year.
Recognition of dividend
income
Dividend income was accounted for in accordance with the Company’s accounting
policies (see note 1(e) on page 75). The Committee reviewed income reporting during the
year. Where special dividends required allocation between revenue and capital, the
Committee considered the Manager’s rationale and approved the treatment adopted.
Viability
The Committee reviewed the assumptions supporting the Viability Statement, including
portfolio liquidity, borrowings, covenant compliance, revenue and expense forecasts,
capital reserves, market volatility and geopolitical uncertainty. The Committee was
satisfied that the Viability Statement was appropriate.
Going concern
The Committee reviewed the assumptions supporting the going concern assessment,
including the Company’s liquidity, borrowings, liabilities and ability to continue in
operational existence for at least twelve months from the date of approval of the financial
statements. After considering these assumptions, together with long-term cash flow
forecasts and sensitivity analysis reports, the Committee was satisfied that it was
appropriate for the financial statements to be prepared on a going concern basis.
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Audit and Risk Committee Report continued
Appointment, review and tenure of the
external auditor
The Company complies with the requirements of The
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014, which relates to the frequency and governance of
audit tenders and the setting of policy on the provision of
non-audit services.
The Committee last carried out an audit tender process
in 2021, following which Mazars LLP, now Forvis Mazars LLP,
was appointed as external auditor for the financial year
ended 31 May 2022. The year ended 31 May 2026 was
therefore the firm’s fifth year as auditor and Nargis Yunis’
fifth year as audit partner. The audit partner is required to
rotate after five years. If shareholders approve the
resolution at the 2026 AGM to reappoint Forvis Mazars LLP
as external auditor, Lucy Hampson, an experienced
investment trust audit partner, will take over as audit
partner for the audit of the financial year ending 31 May
2027, having met with the Committee during the year.
Policy on non-audit services
The Committee has adopted a policy restricting the
provision of non-audit services by the external auditor to
work permitted by regulation and approved in advance
by the Committee. No non-audit services were provided
by Forvis Mazars LLP during the year and no non-audit
fees have been paid to the firm since its appointment.
Independence of the external auditor
The Committee monitors the auditor’s independence and
objectivity by:
• reviewing and approving the policy on non-audit
services;
• considering the appropriateness of the audit fee;
• reviewing the auditor’s confirmation of independence;
and
• considering the auditor’s compliance with applicable
ethical standards.
For the year ended 31 May 2026, Forvis Mazars LLP
confirmed that all partners and staff involved in the audit
were independent of the Company and had complied
with its ethics and independence policies and procedures,
which are consistent with the FRC’s Ethical Standard. Forvis
Mazars LLP also confirmed that partners and staff involved
in the audit are not permitted to hold any direct or
material indirect interest in the Company.
The Committee is satisfied that auditor independence
and objectivity were safeguarded during the year.
Effectiveness of the external audit
The Committee evaluated the effectiveness of the
external audit during the year and following completion
of the audit. The assessment was led by the Committee
Chair and considered:
• the quality and experience of the audit team;
• the robustness of the audit process;
• the degree of challenge provided by the auditor;
• the auditor’s understanding of the Company and the
investment trust sector;
• the quality and timeliness of audit reporting to the
Committee;
• feedback from the Manager’s Financial Reporting
Senior Manager for investment trusts and the corporate
secretary; and
• the auditor’s own feedback on the audit process.
The Committee also considered the latest FRC audit
quality inspection report relevant to Forvis Mazars LLP
and discussed with the auditor the improvements made
since the previous year, which the FRC report had
highlighted. The Committee met privately with the audit
partner to discuss the audit from the auditor’s
perspective. Following its assessment, the Committee
concluded that the external audit had been effective
and recommended to the Board that Forvis Mazars LLP
be reappointed as auditor. Forvis Mazars LLP has
indicated its willingness to continue in office. The Board is
therefore proposing resolutions at the 2026 AGM to
reappoint Forvis Mazars LLP as auditor and to authorise
the Committee to determine the auditor’s remuneration.
Alexandra Mackesy
Chair of the Audit and Risk Committee
29 July 2026
Governance
Financial
Statements
Additional
Information AGM Notice
51
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Strategic
Report
Governance
Activities during the year
During the year, the Committee reviewed and, where
appropriate, made recommendations to the Board on:
• board and committee composition, supported by the
board skills matrix;
• succession planning for key board roles, with a focus on
orderly refreshment, continuity and the skills and
experience required for future Board appointments;
• the externally facilitated board evaluation conducted
by Lintstock and the actions arising from that review;
• directors’ independence, external appointments and
capacity;
• the Company’s tenure and diversity policies, each of
which was considered to remain appropriate;
• the Committee’s terms of reference, including
amendments to reflect updated governance
expectations and the Committee’s remit in relation to
succession planning, diversity, board appointments,
effectiveness reviews and annual report disclosures;
• directors’ ongoing training and professional
development, including investment trust sector
updates, regulatory briefings and sessions on AI and
cybersecurity;
• the Board’s procedure for directors to obtain
independent professional advice at the Company’s
expense;
• directors’ fees, the aggregate directors’ fee limit and
the Directors’ Remuneration Policy; and
• directors’ re-election at the 2026 AGM.
Board effectiveness review
During the year, the Committee oversaw an externally
facilitated review of the Board, its committees, the Chair
and individual Directors, conducted by Lintstock. The
review included director questionnaires and
independent analysis by Lintstock. Lintstock presented its
findings to the Committee in May 2026, following which
the Directors discussed the results and agreed areas of
focus for the year ahead. Lintstock has confirmed that it
has no other connection with the Company.
The review concluded that the Board and its committees
continued to operate effectively. The findings were
positive overall, with the Board’s composition, meeting
management and constructive relationship with the
Fund Managers and wider Janus Henderson team
identified as particular strengths. The review also
confirmed that the Board continued to demonstrate an
appropriate balance of support and challenge.
The principal areas of focus identified from the review
were:
• continued oversight of investment performance and
the investment process;
• further development of the Board’s understanding of,
and communication with, shareholders;
• continued succession planning for key board roles; and
• monitoring the wider investment trust environment.
The Senior Independent Director led the Committee’s
consideration of the findings relating to the Chair’s
performance, drawing on Lintstock’s independent
assessment and feedback provided by directors.
The review of the Chair was positive. The directors
considered that the Chair had continued to provide
effective leadership during a challenging period for the
Company, including through the transition in the fund
management team, the continued focus on investment
performance and increased shareholder engagement
activity. The directors agreed that, in the year ahead,
the Chair should continue to focus on shareholder
engagement and visibility with key investors, consistent
with the Board’s broader priorities.
The Committee considered the findings and concluded
that no immediate changes to the composition of the
Board or its committees were required as a direct result
of the evaluation. The findings have informed the
Committee’s continuing work on board composition,
succession planning and skills.
Committee effectiveness
The externally facilitated review described above also
confirmed that the Committee continued to operate
effectively. Succession planning for key board roles
remains the Committee’s principal area of focus.
Tenure, independence and time
commitment
The Committee reviewed each director’s tenure,
independence, external appointments and time
commitment, having regard to the AIC Code and
relevant investor guidance on time commitment
and overboarding. This included consideration of the
longer tenure of Penny Freer and Alexandra Mackesy,
each having served on the Board for more than
seven years and will reach their nine-year anniversary
in September 2027.
Nomination Committee Report
The Chair of the Nomination Committee
(the “Committee”), Penny Freer, reports to
shareholders on the year to 31 May 2026.
Membership
All directors, who are all independent non-executive
directors, are members of the Committee. The Chair of
the Board also acts as Chair of the Committee but does
not chair discussions relating to her own performance,
fees or succession.
Meetings
The Committee meets at least annually and more
frequently where required. During the year under review,
the Committee held one meeting.
Role and responsibilities
The Committee reviews board composition, succession
planning, directors’ independence, time commitment
and tenure, diversity, training, directors’ fees and board
effectiveness. It also makes recommendations for
board appointments and re-election.
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Nomination Committee Report continued
The Committee recommended to the Board that each
director remained independent and had sufficient time
to discharge their responsibilities effectively. Further
detail on the Board’s consideration of the independence
of longer-serving directors is set out under “Directors’
independence” on pages 46-47.
Directors’ fees and remuneration policy
The Committee reviewed directors’ fees, the aggregate
directors’ fee limit and the Directors’ Remuneration Policy for
inclusion in the 2026 AGM Notice. In doing so, it considered
external fee benchmarking, inflation data, the responsibilities
and workload of directors, and the projected aggregate
directors’ fee position under the Company’s current fee limit.
The Committee’s recommendations on directors’ fees and
the Directors’ Remuneration Policy are set out in the
Directors’ Remuneration Report on pages 56-57.
Diversity policy
All Board appointments are subject to a formal, rigorous
and transparent process. The Committee seeks to ensure
that appointments are made on merit and objective
criteria, in the context of the skills, knowledge, experience
and perspectives required for the Board to be effective.
The Board recognises the value of diversity, including
diversity of gender, social and ethnic background,
cognitive and personal strengths, professional
background, skills and experience. The Committee
reviewed the Company’s Diversity Policy during the year
and concluded that it remained appropriate.
The Committee will continue to take diversity, inclusion
and equality into account in board succession planning
and any future recruitment process. The directors confirm
that appointments and succession planning (including to
the Board’s committees) will continue to be based on
merit and objective criteria and will not discriminate on
the grounds of gender, race, ethnicity, religion, sexual
orientation, age, disability or socio-economic background.
Board diversity at 31 May 2026
As at 31 May 2026, being the reference date selected for
the purposes of UKLR 6.6.6R(9), the Board met and in
some cases surpassed the applicable UK Listing Rule
diversity targets: 60% of the Board were female, two
senior Board positions were held by women, and at
least one director was from a minority ethnic
background. In relation to the senior board positions
target, the Company has followed the AIC guidance for
externally managed investment companies, as
explained in the note to the tables below. The Board met
the FTSE Women Leaders and Parker Review
recommendations relevant to the Company.
The Board aims to maintain a composition that provides
a diverse and complementary range of skills, experience
and perspectives relevant to the Company’s investment
objective and long-term success.
The information in the tables below was collected
through questionnaires completed by the individual
directors on a self-reporting basis. Directors were asked
how they should be categorised for the purposes of the
UK Listing Rule disclosures on gender identity or sex and
ethnic background. The same approach was applied
consistently to all directors. Categories for ethnic groups
not represented on the Board have not been included in
the ethnic background table. No changes occurred
between 31 May 2026 and the date of approval of this
Report which affected the Company’s ability to meet the
applicable UK Listing Rule diversity targets.
In accordance with the applicable UK Listing Rule diversity reporting requirements, and using the AIC’s
definitions, the Board provides the following information about its diversity:
Gender identity and sex
Number of
directors
Percentage of
the Board
Number of senior positions on the
Board (CEO, CFO, SID and Chair)
Men
2 40%
Not applicable – see note*
Women
3 60%
Total
5 100%
Ethnic background
Number of
directors
Percentage of
the Board
Number of senior positions on the
Board (CEO, CFO, SID and Chair)
White British or other White
(including minority white groups)
4 80%
Not applicable – see note*
Other ethnic groups
1 20%
Total
5 100%
* This column is inapplicable as the Company is externally managed and does not have executive management functions, specifically the roles
of chief executive officer or chief financial officer. The Company has therefore followed the approach set out in the AIC guidance for externally
managed investment companies. In an investment company context, the Board regards the Chair, the Senior Independent Director and the
Chairs of the permanent board committees as senior board positions. Of these roles, two are held by women and one is held by a man
Governance
Financial
Statements
Additional
Information AGM Notice
53
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Strategic
Report
Governance
Nomination Committee Report continued
Committee recommendations to the
Board
On the Committee’s recommendation, the Board
concluded that:
• each director continued to make a constructive
contribution to the Company;
• the Board and its committees continued to operate
effectively;
• each director remained independent and had
sufficient time to fulfil their duties;
• the Board’s size and composition remained
appropriate for the Company;
• the Board continued to have an appropriate balance of
skills and experience, as set out on pages 40-41; and
• all directors should be recommended for re-election by
shareholders at the 2026 AGM.
Penny Freer
Chair of the Nomination Committee
29 July 2026
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The Chair of the Management
Engagement Committee (the “Committee”),
Penny Freer, reports to shareholders on the
Committee’s activities to 31 May 2026.
Membership
All directors are members of the Committee. The
Committee is chaired by the Chair of the Board, who
was independent of the Manager on appointment.
Meetings
The Committee met formally once during the year. The
directors also met privately, without representatives of
the Manager present, before agreeing their
recommendations to the Board.
Role and responsibilities
The Committee reviews the performance of the
Manager and the terms of the management
agreement at least annually, and considers whether
the Manager’s continued appointment remains in the
interests of shareholders as a whole. The review
covers investment performance, portfolio risk, use of
gearing, the quality and stability of the teams
supporting the Company, the Manager’s culture and
governance arrangements, shareholder engagement,
sales and marketing support, company secretarial
and financial reporting services, and the
competitiveness of the fee arrangements.
The Committee also reviews the performance and
terms of appointment of the Company’s principal
third-party service providers, including the
depositary and custodian, fund administrator and
accountant, registrar and corporate broker.
The Committee reports to the Board and operates
under formal terms of reference. During the year, the
Committee reviewed revised terms of reference and
recommended them to the Board for approval. The
changes updated and clarified the Committee’s
responsibilities, including its role in reviewing the
Manager, overseeing key service providers,
considering stewardship matters and reporting its
recommendations to the Board.
Committee effectiveness
The Committee’s effectiveness was considered as part of
the externally facilitated Board performance review (see
page 52 for more details). The review concluded that the
Committee continued to operate effectively.
Activities during the year
The Committee completed its annual review of the
Manager and the Company’s principal service providers.
The Manager review was informed by the externally
facilitated review undertaken by Lintstock, supporting
analysis provided to directors and discussions with the
Manager. The Committee considered the Company’s
investment performance against the benchmark and
peer group, the investment process, attribution, portfolio
risk, gearing, shareholder perception, sales and
marketing activity, stewardship and responsible
investment approach, the resources supporting the
Company and the management and performance fee
arrangements.
The Committee recognised that the Company’s
medium-term investment performance remained below
the benchmark over a number of periods. It also noted
the recent improvement in performance, the
refinements made to the investment process and
portfolio construction, and the work undertaken to
strengthen the fund management team following the
portfolio manager transition. The Committee agreed
that maintaining the recovery in performance,
embedding the enhanced fund management team and
continuing to improve shareholder communication
should remain priorities.
The Committee also considered the wider support
provided by the Manager during the year, including
shareholder engagement, marketing activity,
preparation for the continuation vote, communications
strategy planning, capital structure work and
governance updates for the 2024 AIC Code.
The Committee reviewed the performance of the
Company’s principal service providers and concluded
that service levels were satisfactory overall. The
Committee identified certain areas for continued minor
monitoring and improvement.
Continued appointment of the
Manager and other service providers
Following its annual review, the Committee concluded
that the Manager continued to provide the investment
capability, resources, operational support and
shareholder engagement required by the Company.
The Committee recommended to the Board that the
continued appointment of Janus Henderson Fund
Management UK Limited as Manager, on the existing
terms, remained in the best interests of shareholders as
a whole.
After careful consideration, the Committee also
recommended the continued appointment of the
Company’s other principal service providers on the existing
terms. The Board approved these recommendations.
Penny Freer
Chair of the Management Engagement Committee
29 July 2026
Management Engagement Committee Report
Governance
Financial
Statements
Additional
Information AGM Notice
55
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
Directors’ Remuneration Report
Report on implementation
This Directors’ Remuneration Report has been
prepared in accordance with the Companies Act
2006 and Schedule 8 of The Large and Medium-sized
Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended), including the
changes introduced by The Companies (Directors’
Remuneration and Audit) (Amendment) Regulations
2025. It also meets the relevant requirements of the
UK Listing Rules and DTR 7.2.8R. The Report comprises
two sections:
(1) the Directors’ Remuneration Policy, which will be
subject to a binding shareholder vote at the 2026
AGM; and
(2) the Annual Report on Remuneration, which will be
subject to an advisory shareholder vote at the
2026 AGM.
The Company is an externally managed investment
trust with no executive directors, chief executive
officer or employees. All directors are non-executive
and receive fixed fees, with reimbursement of
reasonable expenses where applicable. Accordingly,
disclosures relating to executive and employee
remuneration, variable pay, pensions, share options
and long-term incentives are not applicable and
have not been included. Taxable expenses paid to
directors during the year are shown in the audited
remuneration table on page 57.
The Company’s auditor is required to report on
certain information contained in this report.
Where information has been audited, this is
indicated where appropriate.
Annual statement from the Chair
This statement summarises the principal decisions on
directors’ remuneration during the year, the context for those
decisions and the proposed implementation of the Directors’
Remuneration Policy for the year ending 31 May 2027.
As the Company is externally managed and all directors are
non-executive, the Board has not established a separate
remuneration committee.
During the year, the Nomination Committee reviewed
directors’ fees by reference to comparable investment
companies, relevant peer group data, inflation and the
responsibilities and time commitment expected of directors
of listed investment companies. The Committee also
considered the Board’s workload, including the oversight
required in relation to investment performance, shareholder
engagement, the continuation vote, succession planning
and wider developments affecting the investment trust
sector. Following that review, the Board agreed the revised
fee levels set out below with effect from 1 June 2026.
The Board also introduced an additional fee of £2,500 for the
Senior Independent Director with effect from 1 June 2025.
This reflected the additional responsibilities and time
commitment of that role.
Shareholders will be asked at the 2026 Annual General
Meeting to approve an increase in the aggregate annual
limit on ordinary directors’ fees contained in the Company’s
Articles of Association to £300,000 per annum, from the
current limit of £250,000 per annum, agreed by
shareholders in 2020. The proposed increase is intended to
provide appropriate headroom for future fee reviews, Board
succession and any temporary overlap in appointments as
part of orderly Board refreshment. It does not indicate any
immediate intention to increase directors’ fees beyond the
levels disclosed in this report.
There were no other changes to the structure of directors’
remuneration during the year, and no discretion was
exercised in relation to directors’ remuneration. As required
every three years, the Directors’ Remuneration Policy (last
approved at the 2023 AGM) will be put to a binding vote at
the 2026 AGM.
Role
From
1 June
2026
£
At
31 May
2026
£
At
31 May
2025
£
Chair of the Board
49,000 46,700 44,500
Chair of the Audit and
Risk Committee
39,500 37,775 36,000
Senior Independent
Director
36,000 34,500 n/a
Non-Executive
Director
33,500 32,000 30,500
Directors’ Remuneration Policy
Shareholders last approved the Remuneration Policy at
the 2023 Annual General Meeting, being a triennial vote.
An ordinary resolution to approve the Policy will be
proposed at the 2026 Annual General Meeting. The Board
may amend the level of remuneration paid to individual
directors within the parameters of the Remuneration
Policy. In determining the Remuneration Policy, the Board
takes into account all factors which it deems necessary,
including relevant legal and regulatory requirements and
the provisions and recommendations of the AIC Code of
Corporate Governance.
The objective of the Remuneration Policy is to attract,
retain and motivate non-executive directors of the quality
required to govern the Company successfully without
paying more than is necessary, having regard to views of
shareholders and other stakeholders. The Board obtains
up-to-date information about remuneration in other
companies of comparable scale and complexity to avoid
and manage conflicts of interest in determining
remuneration levels. The directors review the
appropriateness and relevance of the Remuneration Policy
at least annually, with a focus on supporting the
Company’s long-term sustainable success.
Individual directors do not participate in discussions relating
to their own remuneration. Directors are remunerated in the
form of fees, payable quarterly in arrears. The Company’s
Articles of Association limit the fees payable to the directors
in aggregate to £250,000 per annum. Shareholders will be
asked at the 2026 Annual General Meeting to approve an
increase in this limit to £300,000 per annum. Subject to the
56
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Directors’ Remuneration Report continued
overall limit, the Company’s policy is that the fees payable
to the directors should reflect the time spent by the Board
on the Company’s affairs and the responsibilities borne by
the directors, and should be sufficient to promote the
long-term success of the Company.
The policy is to review fee rates annually, although this will
not necessarily result in any change to the rates. Directors
are authorised to claim reasonable expenses from the
Company in relation to the performance of their duties. No
director has a service contract with the Company. Directors’
appointments may be terminated at any time in writing
with no compensation payable. There are no set notice
periods and no fixed duration. No director is eligible to
receive bonuses, pension benefits, share options or other
benefits and no long-term incentive schemes are in place.
Recruitment principles
All directors, including those newly appointed, are paid at
the same rate, apart from the Chair of the Board, Chair of
the Audit and Risk Committee and Senior Independent
Director who are paid a higher fee in recognition of their
additional responsibilities.
Views of shareholders
Any views expressed by shareholders on the fees paid to
directors would be taken into consideration by the Board,
when reviewing levels of remuneration.
Directors’ remuneration (audited)
The remuneration paid to the directors who served during the years ended 31 May 2026 and 31 May 2025 were as follows:
Director
2026
Total fees
£
2026
taxable
benefits
£
2026
Total fees and
benefits
£
2025
Total fees and
benefits
£
Penny Freer
1
46,700 176 46,876 44,500
Alexandra Mackesy
2
37,775 – 37,775 36,000
Kevin Carter
3
34,500 – 34,500 30,500
Michael Warren
32,000 163 32,163 30,500
Yen Mei Lim
32,000 – 32,000 30,500
Victoria Sant
4
11,276 – 11,276 30,500
Total
194,251 339 194,590 202,500
Notes:
The table above omits other columns set out in the relevant regulations because no payments of other types were made, such as performance-related pay,
vesting performance-related pay and pension-related benefits
1 Chair of the Board and highest paid director in the year to 31 May 2026
2 Chair of the Audit and Risk Committee
3 Senior Independent Director
4 Retired on 7 October 2025
Expenses were incurred on accommodation to attend the Board dinner and meeting on 12 November 2025. The expenses were reimbursed through payroll
and subject to personal taxation and national insurance
Directors’ interests in shares (audited)
The interests of the directors in the ordinary shares of the
Company at the beginning and end of the financial year are
shown in the table below.
Ordinary shares of 25p
31 May
2026
1 June
2025
Penny Freer
4,400 4,400
Alexandra Mackesy
8,200 2,200
Kevin Carter
15,000 15,000
Michael Warren
8,000 8,000
Yen Mei Lim
2,000 2,000
Victoria Sant*
n/a 1,670
*Retired on 7 October 2025
There were no changes to the directors’ interests in the
period from 1 June 2026 to the date of this report. There is
no share qualification requirement under the Articles of
Association. However, the Board expects each director to
hold shares in the Company and to retain them while they
remain on the Board.
Spend on pay
As the Company has no employees, no employee pay
comparison has been included. Total fees paid to
directors are shown in the ‘Directors’ remuneration’ table
above. Distributions to shareholders are set out in note 9
on page 80; in the year to 31 May 2026, total dividends
paid amounted to £17.4m. The amount returned to
shareholders via share buybacks is set out in notes 16 and
17 on page 87.
Governance
Financial
Statements
Additional
Information AGM Notice
57
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
Directors’ Remuneration Report continued
Performance
The graph below compares the Company’s share price total return over the ten-year period ended 31 May 2026 with
the benchmark return over the same period.
Total performance return for 10 years to 31 May 2026
£
20262025202420232022202120202019201820172016
Company’s share price total return, assuming the investment of £100 on 31 May 2016 and the reinvestment of all dividends
(excluding dealing expenses) (Source: Morningstar Direct)
Benchmark total return, assuming the notional investment of £100 on 31 May 2016 and the reinvestment of all income
(excluding dealing expenses) (Source: LSEG Datastream). The Company's benchmark is the Deutsche Numis Smaller
Companies Index (excluding investment companies)
50
100
150
200
250
300
The Board considers this comparison relevant because the Company’s investment objective is to maximise shareholders’
total returns, both capital and income, through investment in smaller companies which are quoted in the United Kingdom.
Statement of voting at AGM
Shareholders will be asked to approve this Directors’ Remuneration Report at the 2026 AGM. At the 2025 AGM,
approximately 98.5% of votes were cast in favour of the Directors’ Remuneration Report. Shareholders will also be asked
to approve the Directors’ Remuneration Policy at the 2026 AGM. This was last voted on at the 2023 AGM, when
approximately 99.5% of votes were cast in favour of the Policy.
The following poll votes were received:
Resolution For (including discretionary) % votes Against % votes Withheld
Directors’ Remuneration
Policy, approved at the 2023
AGM
23,215,998 99.5 106,236 0.5 79,823
Directors’ Remuneration
Report for the year ended 31
May 2025, approved at the
2025 AGM
23,848,090 98.5 371,460 1.5 59,147
Votes withheld are not votes in law and are not counted in the calculation of votes for or against a resolution.
On behalf of the Board
Penny Freer
Chair of the Board
29 July 2026
58
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Directors’ Report
The directors present the Annual Report and
Accounts of the Company for the year ended 31 May
2026. The Company (registered and domiciled in
England & Wales with registration number
00025526) was active throughout the year under
review and was not dormant. Throughout the year,
the Company’s principal activity was as a closed-
ended investment trust, focusing on investment in
smaller UK-listed companies with the aim of
delivering long-term shareholder returns.
The Investment Portfolio on pages 20-21, Corporate
Governance Report on pages 43-48, Audit and Risk
Committee Report, Nomination Committee Report and
Management Engagement Committee Report on
pages 49-55, Statement of Directors’ Responsibilities
on page 62, explanations of AGM resolutions on
pages 100-102 and the glossary, alternative performance
measures and general shareholder on pages 91-95 and
corporate information on page 105, all form part of the
Directors’ Report.
Directors
The directors of the Company who held office during the
year and up to the date of this Report are set out on
pages 40-41, together with their biographies, contributions
to the Board and their appointments. Page 47 describes
the directors’ insurance and indemnification
arrangements. The directors’ interests in the Company’s
shares are shown on page 57. In line with the AIC Code
and UK corporate governance best practice, all directors
will retire at the forthcoming AGM and offer themselves
for annual re-election.
Share capital
The Company’s share capital comprises:
Ordinary shares of 25p nominal value each (“shares”)
Each share carries one vote on a poll.
During the year ended 31 May 2026, the Company
purchased 12,899,062 shares, representing 18.8% of the
issued share capital (excluding shares held in Treasury)
at the end of the year, for cancellation or to be held in
Treasury. The aggregate consideration paid, excluding
expenses, was £111,395,000 and the nominal value of the
shares purchased was £3,225,000.
At 31 May 2026, the Company held 18,796,219 shares in
Treasury. The total number of shares in issue, excluding
Treasury shares, was 55,588,912, representing the
Company’s total voting rights at that date.
Since 31 May 2026 and up to 27 July 2026, being the latest
practicable date prior to publication of this Report, the
Company bought back 1,078,549 additional ordinary
shares at a total cost of £9,768,000 (including expenses
and excluding stamp duty). No shares were allotted during
the year or to the date of this Report. As at 27 July 2026, the
total number of ordinary shares in issue was 74,385,131,
with 19,874,768 held in Treasury, giving total voting rights
of 54,510,363.
There are no restrictions on the transfer of the Company’s
shares or voting rights, no shares which carry specific
rights with regard to the control of the Company and no
agreement to which the Company is party that would
affect its control following a takeover bid. To the extent that
they exist, the revenue profits of the Company (including
accumulated revenue and capital reserves) are available
for distribution by way of dividends to the holders of the
shares. Upon a winding-up, after meeting the liabilities of
the Company, the surplus assets would be distributed to
the shareholders pro rata to their shareholdings.
Preference stock units of £1 each (“preference shares”)
At 31 May 2025, the number of preference shares in issue
was 4,257, representing approximately 0.02% of the
Company’s aggregate nominal share capital and
approximately £4,000 in aggregate nominal value. As at
31 May 2026, there were no preference shares in issue.
In 1999, the Company bought back and cancelled the
majority of its preference shares. A small number
remained in issue where the relevant shareholders could
not be contacted. During the year, the Company
completed the acquisition and cancellation of those
remaining preference shares in accordance with the
provisions of its Articles of Association relating to untraced
shareholders. The cancellation of the remaining
preference shares, their removal from the Official List and
the cancellation of their admission to trading on the
London Stock Exchange’s Main Market, took effect on
27 May 2026.
Shareholder authorities
The Company renewed its share buyback authority at a
general meeting held on 1 July 2025, as only 5.6% of issued
share capital remained within the 2024 AGM share
buyback authority. At the annual general meeting (“AGM”)
held on 7 October 2025, the directors were granted
authority to buy back up to 9,389,123 shares (being 14.99%
of issued ordinary share capital (excluding shares held in
Treasury) on that date).
The Company further renewed its share buyback authority
at a general meeting held on 4 March 2026, as only 6.9% of
issued share capital remained within the 2025 AGM share
buyback authority. At this general meeting, the directors
were granted authority to buy back up to 8,626,814 shares
(being 14.99% of issued ordinary share capital (excluding
shares held in Treasury) at 3 March 2026). As at 27 July
2026, there remain 5,586,709 shares available within the
buyback authority granted at the 4 March 2026 general
meeting. This authority will expire at the conclusion of the
2026 AGM. The directors intend to renew this authority,
subject to shareholder approval. Shareholder approval to
renew the Company’s share buyback authority will be
sought at the 2026 AGM, as explained in the Notice of AGM
on pages 99.
Shares are not bought back unless the result is an increase
in net asset value per share.
Governance
Financial
Statements
Additional
Information AGM Notice
59
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
Directors’ Report continued
Holdings in the Company’s shares
Declarations of interests in the voting rights of the Company
as at 31 May 2026 in accordance with the FCA’s Disclosure
Guidance and Transparency Rules were as follows:
Shareholder
% voting
rights
Saba Capital
12.0
Evelyn Partners
5.8
West Yorkshire Pension Fund
4.7
The Company was notified on 24 June 2026, that Saba
Capital had a 13.1% interest in the Company. No other
changes have been notified in the period 1 June 2026
to 27 July 2026.
Additionally, holdings of the Company’s shares on
execution-only stockbroking platforms at 31 May 2026
were as follows:
Platform nominee
% voting
rights
Interactive Investor
12.9
Hargreaves Lansdown
9.3
HSDL
4.2
AJ Bell
3.0
Barclays Smart Investor
2.0
Disclosure of information to the auditor
Each director who is a member of the Board at the date
of approval of this Report confirms that, to the best of his
or her knowledge and belief, there is no information
relevant to the preparation of the Annual Report of which
the Company’s auditor is unaware, and he or she has
taken all the steps a director might reasonably be
expected to have taken to be aware of relevant audit
information and to establish that the Company’s auditor
is aware of that information.
Related-party transactions
The Company’s transactions with related parties in the
year were with the directors and the Manager. There were
no material transactions between the Company and its
directors, and the only amounts paid relate to fees paid for
their remuneration. Remuneration is paid quarterly in
arrears and amounts for April and May 2026 were
therefore accrued as at the year end. There were no other
outstanding amounts payable at the year end. Directors’
shareholdings are listed on page 57.
In respect of the Manager’s services provision during the
year, other than fees payable by the Company in the
ordinary course of business and the facilitation of
marketing activities with third parties, there were no
material transactions with the Manager affecting the
financial position of the Company. More details on
transactions with the Manager, including amounts
outstanding at the year end, are on page 88.
Independent auditor
The auditor Forvis Mazars LLP has indicated willingness to
continue in office. Resolutions 11 and 12 are being submitted
to the 2026 AGM to propose Forvis Mazars LLP’s
reappointment and authorise the Audit and Risk
Committee to determine their remuneration for the
coming year.
Financial instruments
The Company’s financial risk management objectives and
policies, including its exposure to market price, liquidity and
credit risks, and the use of financial instruments, are set out
in the Investment Policy on page 24 and in note 15 to the
financial statements.
Future developments
The future success of the Company will depend primarily
on the performance of its investment portfolio, which will,
to a significant degree, reflect the performance of the
stock market and the skill of the Manager. While the
Company invests in companies that are listed (or quoted)
in the United Kingdom, the underlying businesses of those
companies are affected by external factors, many of an
international nature. The Board intends to continue to
pursue the Company’s investment objective and strategy
as described on page 24.
The Chair’s Statement and the Fund Managers’ Report
from pages 8-18 give commentary on the outlook for the
Company. As discussed on page 9, the Board
recommends a final dividend of 21.5 pence per ordinary
share for the year ended 31 May 2026 for approval at the
AGM.
Other information
The applicable UK Listing Rule disclosures, including the
additional annual financial report requirements for
closed-ended investment funds, are included in this
Annual Report. The statement explaining how the
Company has invested its assets with a view to spreading
investment risk is set out on page 25; the Board’s
statement on the continuing appointment of the Manager
is set out in the Management Engagement Committee
Report on page 55; details of the investment management
arrangements are set out on page 25; the full investment
policy is set out on page 24; and the portfolio analysis is
set out on pages 20-21. The directors confirm that there
are no additional disclosures required under UKLR 6.6.4R.
Further detail on stakeholder engagement and s172
considerations is set out on pages 31-32. The Company
has no branches. It made no political or charitable
donations and incurred no political expenditure during the
year (2025: nil). The Company’s environmental statements,
and the Manager’s approach to stewardship, including
voting and engagement on environmental, social and
governance matters, are described on pages 34-37. The
Company has no employees and, accordingly, statutory
disclosures on employee engagement and policies for
disabled employees are not applicable.
60
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Directors’ Report continued
Annual general meeting (“AGM”)
The Board is pleased to invite shareholders to attend the
AGM in person at 11.30 am on Tuesday, 6 October 2026 at
the Company’s registered office. The Board encourages
shareholders to attend for the opportunity to meet the
directors, the Fund Manager, Indri van Hien, and the other
members of the UK Smaller Companies team, including
Cassie Herlihy. Ms van Hien will give a presentation about
the year under review and her outlook for the year ahead.
Shareholders are invited to consider the resolutions set out
in the Notice of AGM on pages 98-104, which includes an
explanation of each resolution. In addition to the routine
business of the AGM, shareholders will be asked to approve
the adoption of updated Articles of Association, the
Directors’ Remuneration Policy, which is due for triennial
approval, and an increase to the aggregate annual cap
on directors’ fees.
Shareholders may attend the AGM in person or view the
meeting through the online platform. Shareholders joining
electronically will be able to watch the meeting and
submit questions, but electronic participation will not
constitute formal attendance for quorum or voting
purposes and shareholders will not be able to vote live
through the platform. Shareholders who do not intend to
attend in person are therefore encouraged to submit
proxy votes in advance of the meeting. Details of how to
attend, appoint a proxy and vote are set out in the Notice
of AGM.
A video in which the Fund Manager discusses the
Company’s results and performance during the year will
be available from 30 July 2026 at
www.hendersonsmallercompanies.com. Shareholders
who have questions for the Board or the Fund Manager in
advance of the AGM are invited to contact the Secretary at
itsecretariat@janushenderson.com.
Voting recommendation
The Board considers that the resolutions to be proposed at
the AGM are in the best interests of shareholders as a
whole. The Board therefore recommends that shareholders
vote in favour of each resolution, as the directors intend to
do in respect of their own beneficial holdings.
This Directors’ Report was approved by the Board on
29 July 2026 and signed on its behalf by:
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
29 July 2026
Governance
Financial
Statements
Additional
Information AGM Notice
61
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Governance
Statement of Directors’ Responsibilities
Company law requires the directors to prepare financial
statements for each financial year. The directors have
prepared the Company’s financial statements in
accordance with International Accounting Standards in
conformity with the requirements of the Companies Act
2006. Under company law, the directors must not approve
the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that
year. In preparing these financial statements, the directors
are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable International Accounting
Standards in conformity with the requirements of the
Companies Act 2006 have been followed, subject to
any material departures disclosed and explained in the
financial statements;
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business; and
• prepare a directors’ report, a strategic report and a
directors’ remuneration report which comply with the
requirements of the Companies Act 2006.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the financial
statements and the Directors’ Remuneration Report
comply with the Companies Act 2006. 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 consider that the Annual Report, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
Statement under DTR 4.1.12
Each director, who is listed on pages 40-41, confirms that,
to the best of his or her knowledge:
• the financial statements, which have been prepared in
accordance with International Accounting Standards in
conformity with the requirements of the Companies Act
2006 on a going concern basis, give a true and fair
view of the assets, liabilities, financial position and
profit/loss of the Company; and
• the Strategic Report and financial statements include 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.
On behalf of the Board
Penny Freer
Chair of the Board
29 July 2026
The directors are responsible for preparing the
Annual Report and the financial statements in
accordance with applicable law and regulations.
62
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Financial
Statements
In this section
64 Independent Auditors’ Report to the members
70 Statement of Comprehensive Income
71 Statement of Changes in Equity
72 Balance Sheet
73 Statement of Cash Flows
74 Notes to the Financial Statements
Photo: Balfour Beatty
Governance
Financial
Statements
Additional
Information AGM Notice
Strategic
Report
Financial
Statements
63
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Independent auditor’s report to the members of The
Henderson Smaller Companies Investment Trust plc
Opinion
We have audited the financial statements of The
Henderson Smaller Companies Investment Trust plc
(the “Company”) for the year ended 31 May 2026 which
comprise the Statement of Comprehensive Income,
Statement of Changes in Equity, Balance Sheet, Statement
of Cash Flows and notes to the financial statements
on pages 70-89, including material accounting
policy information.
The financial reporting framework that has been applied
in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the Company’s
affairs as at 31 May 2026 and of the Company’s profit for
the year then ended;
• have been properly prepared in accordance with
UK-adopted international accounting standards; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those
standards are further described in the “Auditor’s
responsibilities for the audit of the financial statements”
section of our report. We are independent of the
Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied
to listed entities and public interest entities, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
Our audit procedures to evaluate the directors’
assessment of the Company’s ability to continue to adopt
the going concern basis of accounting included but were
not limited to:
• undertaking an initial assessment at the planning stage
of the audit to identify events or conditions that may
cast significant doubt on the Company’s ability to
continue as a going concern;
• making enquiries of the Directors to understand the
period of assessment that they considered, being at
least 12 months from the date of approval of the annual
report and financial statements, assessing and
challenging the appropriateness of the Directors’ key
assumptions in their income and expense projections
and implication of those when assessing severe but
plausible scenarios;
• assessing the Company’s ability to continue to operate
within its financial covenants and the liquidity of the
portfolio through reviewing Management’s assessment
of how quickly the portfolio could be liquidated if
required;
• assessing the Company’s performance to date using
the key performance indicators being net asset value
against benchmark and peer group, share price total
return against benchmark and peer group, discount to
net asset value and ongoing charge listed on pages 29
and 30 in the annual report; and
• evaluating the appropriateness of the Directors’
disclosures in the financial statements on going
concern and viability statement.
Based on the work we have performed, we have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
significant doubt on the Company’s ability to continue as
a going concern for a period of at least twelve months
from when the financial statements are authorised for
issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the
relevant sections of this report.
In relation to the Company’s reporting on how it has met its
obligations under the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation
to the Directors’ statement in the financial statements about
whether the Director’s considered it appropriate to adopt
the going concern basis of accounting.
64
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Independent Auditor’s Report continued
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
We summarise below the key audit matters in forming our opinion above, together with an overview of the principal
audit procedures performed to address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged with governance through our Audit
Completion Report.
Key Audit Matter How our scope addressed this matter
Valuation and existence of the investment
portfolio
(as described on page 50 in the Report of the Audit
and Risk Committee and as per the accounting
policy set out on page 75).
Investments held as of 31 May 2026 were valued at
£614.44m (2025: £698.72m). The investment portfolio
comprises of solely level one investments.
Investments make up 110.0% of the net asset value of
the Company as of 31 May 2026 (110.2% of the net
asset value as of 31 May 2025) these are only level
one and considered to be the key driver of the
performance of the Company.
The investments are made up of quoted investments
that are classified upon initial recognition as held at
fair value through profit or loss and are measured
initially and subsequently at fair value which is based
on their quoted bid prices at the close of business on
the year-end date. There is a risk that investments
recorded might not exist or might not be owned by
the Company. Although the investments are valued
at quoted bid prices, there is a risk that errors in
valuation can have a significant impact on the
numbers presented.
We therefore identified valuation and existence of
investments as a key audit matter as it had the
greatest effect on our overall audit strategy and
allocation of resources.
Our audit procedures included, but were not limited to:
• understanding Management’s process to record and
value investments through discussions with Management
and examination of control reports from the third-party
service organisation;
• for all investments in the portfolio, agreeing investment
holdings to an independent custodian confirmation and
an independent depositary confirmation in order to obtain
comfort over existence;
• for all investments in the portfolio, comparing to market
prices independently obtained from a source vendor and
recalculating the investment valuations as at the year-
end; and
• for all investments in the portfolio, assessing the frequency
of trading to identify any prices that have not changed
and testing whether the listed price is a valid fair value to
ensure appropriateness of fair value classification.
Our observations
We have no matters to communicate with regards to the
valuation and existence of the investment portfolio held at
31 May 2026.
The key audit matter in the table above is consistent with the matter we disclosed in our 2025 independent auditor’s report.
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and on the financial statements as a whole. Based on our
professional judgment, we determined materiality for the financial statements as a whole as follows:
Governance
Financial
Statements
Additional
Information AGM Notice
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Independent Auditor’s Report continued
Materiality
Overall materiality
£5.59m (2025: £6.34m)
How we determined it
1% of net assets (2025: 1% of net assets)
Rationale for benchmark applied
Net assets have been identified as the principal benchmark
within the financial statements as they are considered to be the
main focus of the shareholders.
Whilst valuation processes for these investments are not
considered to be complex, there is a risk that errors in valuation
could cause a material misstatement. 1% has been chosen as it is
a generally accepted auditing practice for investment trust
audits and the Company is a public interest entity.
Performance materiality
Performance materiality is set to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole.
On the basis of our risk assessments and together with our
assessment of the overall control environment, we determined
70% (2025: 70%) of overall materiality, amounting to £3.91m
(2025: £4.44m).
We also determined a specific materiality for the revenue column
of the Statement of Comprehensive Income at £0.8m
(2025: £1.02m), being 5% (2025: 5%) of revenue profit before tax.
Reporting threshold
We agreed with the Audit and Risk Committee that we would report
to them misstatements identified during our audit above £0.17m
(2025: £0.19m) as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due
to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked
at where the directors made subjective judgments, such as assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the
financial statements as a whole. We used the outputs of our risk assessment, our understanding of the Company, their
environment, controls, and critical business processes, to consider qualitative factors to ensure that we obtained
sufficient coverage across all financial statement line items.
Other information
The other information comprises the information included in the annual report other than the financial statements and
our auditor’s report thereon. The Directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
66
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Independent Auditor’s Report continued
Opinions on other matters prescribed
by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the strategic report and the
Directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements and those reports have been
prepared in accordance with applicable legal
requirements;
• the information about internal control and risk
management systems in relation to financial reporting
processes and about share capital structures, given in
compliance with rules 7.2.5 and 7.2.6 in the Disclosure
Guidance and Transparency Rules sourcebook made
by the Financial Conduct Authority (the FCA Rules), is
consistent with the financial statements and has been
prepared in accordance with applicable legal
requirements; and
• information about the Company’s corporate
governance code and practices and about its
administrative, management and supervisory bodies
and their committees complies with rules 7.2.2, 7.2.3 and
7.2.7 of the FCA Rules.
Matters on which we are required to
report by exception
In light of the knowledge and understanding of the
Company and its environment obtained in the course of
the audit, we have not identified material misstatements
in the:
• strategic report or the directors’ report; or
• information about internal control and risk
management systems in relation to financial reporting
processes and about share capital structures, given in
compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by
the Company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the Company financial statements and the part of the
Directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified
by law are not made; or
• we have not received all the information and
explanations we require for our audit; or
• a corporate governance statement has not been
prepared by the Company.
Corporate governance statement
The UK Listing Rules require us to review the Directors’
statement in relation to going concern, longer-term
viability and that part of the Corporate Governance
Statement relating to how the Company meets its
obligations under the provisions of the UK Corporate
Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of
the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge
obtained during the audit:
• Directors’ statement with regards the appropriateness
of adopting the going concern basis of accounting
and any material uncertainties identified, set out on
page 62;
• Directors’ explanation as to its assessment of the
entity’s prospects, the period this assessment covers
and why the period is appropriate, set out on page 38;
• Directors’ statement on fair, balanced and
understandable, set out on page 62;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks, set out
on page 27;
• The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems, set out on page 47; and;
• The section describing the work of the Audit and Risk
Committee, set out on pages 49-50.
Responsibilities of directors
As explained more fully in the Directors’ responsibilities
statement set out on page 62, the Directors are
responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine is
necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Governance
Financial
Statements
Additional
Information AGM Notice
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Independent Auditor’s Report continued
Auditor’s responsibilities for the audit
of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of
irregularities, including fraud.
Based on our understanding of the Company and its
industry, we considered that non-compliance with the
following laws and regulations might have a material
effect on the financial statements: UK-adopted
international accounting standards, the Companies Act
2006, the UK Listing Rules, UK Corporate Governance Code,
the Association of Investment Companies’ Code and
Statement of Recommended Practice, Section 1158 of the
Corporation Tax Act 2010 and The Companies
(Miscellaneous Reporting) Regulations 2018.
To help us identify instances of non-compliance with
these laws and regulations, and in identifying and
assessing the risks of material misstatement in respect to
non-compliance, our procedures included, but were not
limited to:
• Gaining an understanding of the legal and regulatory
framework applicable to the Company, the industry in
which it operates, and the structure of the Company,
and considering the risk of acts by the Company which
were contrary to the applicable laws and regulations,
including fraud;
• Inquiring of the Directors, management and, where
appropriate, those charged with governance, as to
whether the Company is in compliance with laws and
regulations, and discussing their policies and
procedures regarding compliance with laws and
regulations;
• Reviewing minutes of Directors’ meetings in the year and
up until the authorisation of financial statements; and
• Discussing amongst the engagement team the laws
and regulations listed above, and remaining alert to
any indications of non-compliance.
We also considered those laws and regulations that have a
direct effect on the preparation of the financial statements,
such as the Statement of Recommended Practice issued by
the Association of Investment Companies, the Companies
Act 2006 and UK tax legislation.
In addition, we evaluated the Directors’ and Management’s
incentives and opportunities for fraudulent manipulation of
the financial statements, including the risk of management
override of controls, and determined that the principal risks
related to posting manual journal entries to manipulate
financial performance, management bias through
judgments and assumptions in significant accounting
estimates, particularly in relation to special dividends,
revenue recognition (which we pinpointed to the accuracy
and completeness assertions), and significant one-off or
unusual transactions.
Our procedures in relation to fraud included but were not
limited to:
• Making enquiries of the Directors and management
on whether they had knowledge of any actual,
suspected or alleged fraud;
• Gaining an understanding of the internal controls
established to mitigate risks related to fraud;
• Discussing amongst the engagement team the risks
of fraud;
• Addressing the risks of fraud through management
override of controls by performing journal entry
testing; and
• Reviewing the accounting estimates in relation to
special dividends for evidence of management bias
and performing procedures to respond to the fraud
risk in revenue recognition.
The primary responsibility for the prevention and detection
of irregularities, including fraud, rests with both those
charged with governance and management. As with any
audit, there remained a risk of non-detection of
irregularities, as these may involve collusion, forgery,
intentional omissions, misrepresentations or the override
of internal controls.
The risks of material misstatement that had the greatest
effect on our audit are discussed in the “Key audit
matters” section of this report.
A further description of our responsibilities is available on
the Financial Reporting Council’s website at
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Independent Auditor’s Report continued
Other matters which we are required to
address
Following the recommendation of the Audit and Risk
Committee, we were appointed on 1 September 2021 to
audit the financial statements for the year ending 31 May
2022. The period of total uninterrupted engagement is
five years, covering the years ending 31 May 2022 to
31 May 2026.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Company and we
remain independent of the Company in conducting
our audit.
Our audit opinion is consistent with our additional report
to the Audit and Risk Committee.
Use of the audit report
This report is made solely to the company’s members as
a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone other than the company and the
company’s members as a body for our audit work, for this
report, or for the opinions we have formed.
As required by the Financial Conduct Authority Disclosure
Guidance and Transparency Rules, these financial
statements will form part of the electronic reporting
format prepared annual financial report filed on the
National Storage Mechanism of the Financial Conduct
Authority. This auditor’s report provides no assurance over
whether the annual financial report will be prepared using
the correct electronic reporting format.
Nargis Shaheen Yunis (Senior Statutory Auditor)
for and on behalf of Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey
London EC4M 7AU
29 July 2026
Governance
Financial
Statements
Additional
Information AGM Notice
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Statement of Comprehensive Income
for the year ended 31 May
Year ended 31 May 2026 Year ended 31 May 2025
Notes
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
2 Investment income
18,362 – 18,362 22,912 – 22,912
3 Other income
124 – 124 168 – 168
10 Gains/(losses) on investments held at
fair value through profit or loss
– 41,411 41,411 – (61,211) (61,211)
Currency losses
– – – – (3) (3)
Total income/(loss)
18,486 41,411 59,897 23,080 (61,214) (38,134)
Expenses:
4
Management fees
(600) (1,399) (1,999) (719) (1,677) (2,396)
5
Other expenses
(1,084) – (1,084) (761) – (761)
Profit/(loss) before finance costs and
taxation
16,802 40,012 56,814 21,600 (62,891) (41,291)
6
Finance costs
(950) (2,217) (3,167) (1,110) (2,591) (3,701)
Profit/(loss) before taxation
15,852 37,795 53,647 20,490 (65,482) (44,992)
7
Taxation
– – – (2) – (2)
Profit/(loss) for the year and total
comprehensive income
15,852 37,795 53,647 20,488 (65,482) (44,994)
8
Earnings/(loss) per ordinary share –
basic and diluted
26.11p 62.26p 88.37p 27.89p (89.13p) (61.24p)
The total columns of this statement represent the Statement of Comprehensive Income, prepared in accordance with
UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published
by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired
or discontinued in the year.
The profit attributable to shareholders for the year disclosed above represents the Company’s total comprehensive
income. The Company does not have any other comprehensive income.
70
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
The notes on pages 74-89 form part of these financial statements
Statement of Changes in Equity
for the year ended 31 May
Retained earnings
Notes Year ended 31 May 2026
Share
capital
£’000
Capital
redemption
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
equity
£’000
Total equity at 1 June 2025
18,597 26,824 568,767 20,136 634,324
Total comprehensive income:
Profit for the year
– – 37,795 15,852 53,647
Buyback of shares to Treasury
– – (111,952) – (111,952)
Transactions with owners, recorded directly to equity:
9 Ordinary dividends paid
– – – (17,439) (17,439)
Total equity at 31 May 2026
18,597 26,824 494,610 18,549 558,580
Retained earnings
Notes Year ended 31 May 2025
Share
capital
£’000
Capital
redemption
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
equity
£’000
Total equity at 1 June 2024
18,627 26,794 682,267 19,652 747,340
Total comprehensive income:
(Loss)/profit for the year
– – (65,482) 20,488 (44,994)
Buyback of shares for cancellation
(30) 30 (1,057) – (1,057)
Buyback of shares to Treasury
– – (46,961) – (46,961)
Transactions with owners, recorded directly to equity:
9 Ordinary dividends paid
– – – (20,004) (20,004)
Total equity at 31 May 2025
18,597 26,824 568,767 20,136 634,324
Governance
Financial
Statements
Additional
Information AGM Notice
71
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
The notes on pages 74-89 form part of these financial statements
Balance Sheet
Notes
At 31 May
2026
£’000
At 31 May
2025
£’000
Non-current assets
10 Investments held at fair value through profit or loss
614,437 698,722
Current assets
12 Receivables
3,604 6,183
Cash and cash equivalents
8,013 1,181
11,617 7,364
Total assets
626,054 706,086
Current liabilities
13 Payables
(2,671) (1,834)
15 i) Bank loans
(15,000) (20,133)
(17,671) (21,967)
Total assets less current liabilities
608,383 684,119
Non-current liabilities
14 Financial liabilities
(49,803) (49,795)
Net assets
558,580 634,324
Equity attributable to equity shareholders
16 Share capital
18,597 18,597
17 Capital redemption reserve
26,824 26,824
Retained earnings:
17 Capital reserve
494,610 568,767
18 Revenue reserve
18,549 20,136
Total equity
558,580 634,324
19 Net asset value per ordinary share
1,004.8p 926.2p
These financial statements on pages 70-89 were approved and authorised for issue by the Board of Directors on
29 July 2026 and were signed on its behalf by:
Penny Freer
Chair of the Board
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
The notes on pages 74-89 form part of these financial statements
Statement of Cash Flows
for the year ended 31 May
For the year ended
Notes
31 May 2026
£’000
31 May 2025
£’000
Operating activities
Profit/(loss) before taxation
53,647 (44,992)
Add back interest payable
3,167 3,701
10 (Profit)/loss on investments held at fair value through profit or loss
(41,411) 61,211
Losses on foreign currency
– 3
10 Purchases of investments
(122,787) (115,189)
10 Sales of investments
248,483 188,624
Increase in receivables
(132) (10)
12 Decrease/(increase) in amounts due from brokers
1,780 (2,542)
Decrease in accrued income
931 8,132
(Decrease)/increase in payables
(309) 64
13 Increase in amounts due to brokers
1,214 26
Net cash inflow from operating activities before interest and taxation
1
144,583 99,028
Interest paid
(3,152) (3,859)
Net cash inflow from operating activities
141,431 95,169
Financing activities
Buyback of ordinary shares
(112,027) (47,619)
Equity dividends paid
(17,439) (20,004)
Repayment of bank loans
(5,133) (35,611)
Net cash outflow from financing activities
(134,599) (103,234)
Increase/(decrease) in cash and cash equivalents
6,832 (8,065)
Currency losses
– (3)
Cash and cash equivalents at the start of the year
1,181 9,249
Cash and cash equivalents at the end of the year
8,013 1,181
1 In accordance with IAS 7.31 cash inflow from dividends was £19,289,000 (2025: £22,228,000), and cash inflow from interest was £129,000 (2025 £171,000)
Governance
Financial
Statements
Additional
Information AGM Notice
73
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
The notes on pages 74-89 form part of these financial statements
Notes to the Financial Statements
1 Accounting policies
a) Basis of preparation
The Henderson Smaller Companies Investment Trust plc (the “Company”) is a company incorporated and domiciled in
the United Kingdom under the Companies Act 2006 (the “Act”). The Company is a single reporting entity and there is no
ultimate controlling party. The financial statements of the Company for the year ended 31 May 2026 have been
prepared in accordance with UK-adopted International Accounting Standards (“IAS”) in conformity with the
requirements of the Act. These comprise standards and interpretations approved by the IAS Board (“IASB”), together
with interpretations of the IAS and Standing Interpretations Committee approved by the International Financial
Reporting Standards (“IFRS”) that remain in effect, to the extent that IFRS have been adopted by the United Kingdom.
The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the
revaluation of certain financial instruments held at fair value through profit or loss. The principal accounting policies
adopted are set out below. These policies have been applied consistently throughout the year. Where presentational
guidance set out in the Statement of Recommended Practice (the “SORP”) for investment trusts issued by the
Association of Investment Companies (the “AIC”) is consistent with the requirements of IFRS, the directors have sought
to prepare the financial statements on a basis consistent with the recommendations of the SORP.
Accounting standards
i) The following new and amended standards are relevant and applicable to the Company and have been adopted.
There has been no impact on the financial statements as a result of these new and amended standards.
Amendments to IAS in conformity with the requirements of the Act issued and effective for the current year end:
Standards
Effective for annual periods
beginning on or after
IAS 21 Amendments Lack of Exchangeability 1 January 2025
ii) Relevant new standards and amendments issued but not effective for the current financial year and not early-
adopted by the Company:
Standards
Effective for years
beginning on or after
Annual Improvements 2023-24 Minor amendments to IFRS 1, 7, 9, 10 and IAS 7 1 January 2026
IFRS 7 and 9 Amendments Classification and Measurement of Financial Instruments 1 January 2026
IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027
Interpretations
It is expected that these new standards and amendments will have no material impact on the financial statements as
a whole. In respect of IFRS 18, this is expected to have some impact on the presentation within the statement of
comprehensive income and the cash flow statement, although the full impact has yet to be determined.
b) Going concern
The assets of the Company consist of securities that are readily realisable and, accordingly, the directors believe that
the Company has adequate resources to continue in operational existence for at least twelve months from the date of
approval of the financial statements. In coming to this conclusion, the directors have also considered the continued
macroeconomic and geopolitical uncertainty, the nature of the Company’s covenants, the strength of the Company’s
distributable reserves and the liquidity of the portfolio.
The directors have concluded that the Company is able to meet its financial obligations, including the repayment of the
bank loans and borrowings, as they fall due for a period of at least twelve months from the date of issuance. Having
assessed these factors the principal risks and other matters discussed in connection with the Viability Statement set out
on page 38, the directors confirm that the financial statements have been prepared on a going concern basis. The
Company’s shareholders are asked every three years to vote for the continuation of the Company. The last
continuation vote took place at the Annual General Meeting (“AGM”) held on 7 October 2025 and passed with 95% of
votes cast in favour of continuation. The next continuation vote will take place at the AGM in 2028.
74
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notes to the Financial Statements continued
1 Accounting policies continued
c) Investments held at fair value through profit or loss
All investments are classified upon initial recognition as held at fair value through profit or loss, and are measured
initially and subsequently at fair value. Investment transactions are accounted for on a trade date basis. Assets are
de-recognised at the trade date of the disposal. Proceeds are measured at fair value, which is regarded as the
proceeds of sale less any transaction costs. The fair value of the financial instruments is based on their quoted bid price
or the last traded price depending on the convention of the exchange on which the investment is quoted at the
balance sheet date, without deduction of the estimated future selling costs. There were no unquoted investments held
during the current year or prior year.
Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are
recognised in the Statement of Comprehensive Income as ‘Gains/(losses) on investments held at fair value though
profit or loss’. Also included within this caption are transaction costs in relation to the purchase or sale of investments,
including the difference between the purchase price of an investment and its bid price at the date of purchase.
d) Presentation of the Statement of Comprehensive Income
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 Statement of Comprehensive Income between items of a revenue
and capital nature has been presented alongside the Statement of Comprehensive Income. In accordance with the
Company’s status as a UK investment company under s833 of the Act, net capital returns are no longer prohibited to be
distributed by way of dividend where authority is given within the Company’s articles of association. Additionally, the net
revenue is the measure the directors believe appropriate in assessing the Company’s compliance with certain
requirements set out in s1158 of the Corporation Tax Act 2010.
e) Income
Dividends receivable on equity shares are recognised as revenue for the year on an ex-dividend basis. Special
dividends represent dividends paid by the investee companies that are additional to the normal or expected dividend
cycle for that company. Special dividends are treated as revenue return or capital return, depending on the facts and
circumstances of each individual case. Dividends which have clearly arisen out of the investee company’s
reconstruction or reorganisation are usually considered to be capital in nature and allocated to capital return. Other
special dividends will usually be considered as revenue in nature unless evidence suggests otherwise. Interest is
recognised on an accruals basis.
Income distributions from UK Real Estate Investment Trusts (“UK REITs”) will be split into two parts: a Property Income
Distribution (“PID”) made up of rental revenue; and a non-PID element, consisting of non-rental revenue. The PID element
is subject to corporation tax as schedule A revenue, while the non-PID element will be treated as franked revenue.
f) Expenses
All expenses are accounted for on an accruals basis. The Board has determined that the capital return should reflect
the indirect costs of earning capital returns. Consequently, since 1 June 2013 the Company has allocated 70% of its
management fees and finance costs to the capital return of the Statement of Comprehensive Income, with the
remaining 30% being allocated to the revenue return. All other administrative expenses are charged to the revenue
return of the Statement of Comprehensive Income.
Any performance fees are charged wholly to the capital return. Expenses which are incidental to the purchase or sale of
an investment are recognised immediately in the capital return of the Statement of Comprehensive Income, and are
included within the gains or losses on investments held at fair value through profit or loss.
g) 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 period. Taxable profit differs from net profit as reported in the Statement of Comprehensive
Income because it excludes items of income or expense 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 tax effect of different items of expenditure is allocated between the capital and the revenue using the Company’s
effective rate of tax for the year. In line with the recommendations of the SORP, the allocation method used to calculate
tax relief on expenses presented against capital returns in the supplementary information in the Statement of
Comprehensive Income is the ‘marginal basis’. Under this basis, if taxable income is capable of being offset entirely by
expenses presented in the revenue return column of the Statement of Comprehensive Income, then no tax relief is
transferred to the capital return column.
Governance
Financial
Statements
Additional
Information AGM Notice
75
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Notes to the Financial Statements continued
1 Accounting policies continued
g) Taxation continued
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will
be available against which deductible temporary differences can be utilised. Investment trusts which have approval
as such under s1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset is realised. Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates
to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
h) Foreign currency
For the purposes of the financial statements, the results and financials position are expressed in pound sterling, which
is the functional currency and presentational currency of the Company. Sterling is the functional currency because it
is the currency of the primary economic environment in which the Company operates.
Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily
exchange rates. Monetary assets and liabilities and investments held at fair value through profit or loss which are
denominated in overseas currencies at the balance sheet date are translated into sterling at the exchange rates
ruling at that date. Gains or losses arising on the retranslation of investments held at fair value through profit or loss
are included within the ‘Gains/(losses) on investments held at fair value through profit or loss’.
i) Cash and cash equivalents
Cash comprises cash in hand and on demand deposits. Cash equivalents are 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.
j) Borrowings
Interest-bearing bank loans, overdrafts, unsecured loan notes and Preference Stock are recorded initially at fair value,
being the proceeds received, net of direct issue costs. They are subsequently measured at amortised cost. Finance
costs, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an
accruals basis in the Statement of Comprehensive Income using the effective interest rate method and are added to
the carrying amount of the instrument to the extent that the borrowings are not settled in the period in which they arise.
The Preference Stock was classified as a liability as it represented a contractual obligation on behalf of the Company to
deliver to the stockholders a fixed and determinable amount at the date of redemption.
k) Operating segments
The directors consider that the Company has one operating segment, being the activity of investing in shares
and securities primarily for capital appreciation in accordance with the Company’s published investment objective.
The Company operates within the United Kingdom.
l) Dividends payable to shareholders
Dividends payable to shareholders are recognised in the financial statements when they are paid or, in the case of final
dividends, when they are approved by shareholders. Dividends are recorded in the Statement of Changes in Equity.
76
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notes to the Financial Statements continued
1 Accounting policies continued
m) Capital and reserves
Capital reserve arising on investments sold
The following are accounted for in this reserve:
• gains and losses on the disposals of investments;
• expenses and finance costs allocated to capital net of tax relief;
• realised foreign exchange differences of a capital nature; and
• costs of repurchasing ordinary share capital.
Capital reserve arising on revaluation of investments held
The following are accounted for in this reserve:
• increases and decreases in the valuation of investments held at the year end; and
• unrealised foreign exchange differences of a capital nature.
Revenue reserve
The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been
distributed to shareholders as a dividend.
Capital redemption reserve
The capital redemption reserve represents the nominal value of ordinary shares repurchased and cancelled.
n) Distributable reserves
The Company’s capital reserve arising on investments sold (i.e. realised capital profits) and revenue reserve may be
distributed by way of a dividend.
o) Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference stock was classified as a liability.
Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of
tax, from the proceeds.
Where the Company purchases its own equity share capital (Treasury shares), the consideration paid, including any
directly attributable incremental costs is deducted from equity attributable to the Company’s equity holders until the
shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net
of any directly attributable incremental transaction costs, is included in equity attributable to the Company’s equity holders.
Share capital represents the nominal value of ordinary shares issued.
p) Key estimates and assumptions
Estimates and assumptions used in preparing the financial statements are reviewed on an ongoing basis and are
based on historical experience and various other factors that are believed to be reasonable under the circumstances.
The results of these estimates and assumptions form the basis of making judgments about carrying values of assets
and liabilities that are not readily apparent from other sources.
There are no estimates and assumptions that may cause material adjustment to the carrying value of assets and
liabilities. The decision to allocate special dividends as income or capital is a judgment, and further details are provided
in note 1e). The decision to include Purchases and Sales of investments within Operating activities in the Cash Flow
Statement is considered appropriate because these are core activities of the Company’s operations. Given the nature
of the Company as an investment trust, this is not deemed to be a significant judgment in the context of the financial
statements as a whole.
There are no other significant judgments made in the preparation of these financial statements.
Governance
Financial
Statements
Additional
Information AGM Notice
77
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Notes to the Financial Statements continued
2 Investment income
2026
£’000
2025
£’000
Income from companies listed or quoted in the United Kingdom:
Dividends
17,283 21,587
Special dividends
580 687
Property income distributions
499 638
Total investment income
18,362 22,912
3 Other income
2026
£’000
2025
£’000
Bank and other interest
124 168
124 168
4 Management fees
2026 2025
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Management fee
600 1,399 1,999 719 1,677 2,396
600 1,399 1,999 719 1,677 2,396
A summary of the fee arrangements in the management agreement is given on page 25.
5 Other expenses
2026
£’000
2025
£’000
Directors’ fees (see the Directors’ Remuneration Report on pages 56-58)
194 202
Auditors’ remuneration for the audit of the Company and the financial statements
64 62
Other professional fees
85 73
FCA and London Stock Exchange fees
85 72
Registration costs
67 34
Annual and half-year reports and shareholder circulars: printing and distribution
30 32
Insurances
23 16
AIC subscriptions
27 22
Custody and other bank charges
40 41
Depositary charges
44 47
Other expenses payable to the management company
1
405 135
Other expenses
20 25
1,084 761
1 Other expenses payable to management company relate to marketing activities as described in Note 21
All transactions with directors are disclosed in the Directors’ Remuneration Report and are related-party transactions.
All the above expenses include VAT where VAT is applied to them. There were no non-audit services in the period (2025: nil).
78
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notes to the Financial Statements continued
6 Finance costs
2026 2025
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Bank overdraft and loan interest
480 1,121 1,601 643 1,500 2,143
Interest on unsecured loan notes
1
470 1,096 1,566 467 1,091 1,558
Total
950 2,217 3,167 1,110 2,591 3,701
1 Includes amortisation of direct issue costs and will therefore vary from year to year
7 Taxation
a) Analysis of charge for the year
2026 2025
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Overseas tax suffered
– – – 2 – 2
Current and total tax charge for the year
– – – 2 – 2
b) Factors affecting the tax charge for the year
UK corporation tax is charged at 25% (2025: 25%). Approved investment trusts are exempt from corporation tax on
chargeable gains made by the investment trust.
2026 2025
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Profit/(loss) before taxation
15,852 37,795 53,647 20,490 (65,482) (44,992)
Corporation tax at 25% (2025: 25%)
3,963 9,449 13,412 5,123 (16,371) (11,248)
Effects of:
Non-taxable UK dividends
(4,357) – (4,357) (5,388) – (5,388)
Non-taxable overseas dividends
(104) – (104) (181) – (181)
Expenses not deductible for tax purposes
1 – 1 – – –
Excess management expenses and loan
deficits
419 721 1,140 331 799 1,130
Overseas withholding tax
– – – 2 – 2
Non-taxable capital items
– (10,353) (10,353) – 15,304 15,304
Corporate interest restrictions
78 183 261 115 268 383
Current and total tax charge for the year
– – – 2 – 2
c) Provision for deferred taxation
No provision has been made for deferred tax on income.
Due to the Company’s status as an investment trust, and the intention to continue meeting the conditions required to
maintain approval of such status in the foreseeable future, the Company has not provided for deferred tax on capital
gains or losses arising on the revaluation or disposal of investments.
d) Factors that may affect future tax charges
The Company has not recognised a deferred tax asset of £32,205,000 (2025: £31,065,000) arising as a result of having
unutilised management expenses and loan relationships of £128,821,000 (2025: £124,259,000). These expenses will only
be utilised if the tax treatment of the Company’s income and chargeable gains changes or if the Company’s investment
profile changes. There is no expiry date for these deferred tax assets and no expectation for these to be utilised.
Governance
Financial
Statements
Additional
Information AGM Notice
79
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Notes to the Financial Statements continued
8 Earnings/(loss) per ordinary share
The earnings per ordinary share figure is based on the net profit for the year of £53,647,000 (2025: net loss of
£44,994,000) and on 60,708,172 (2025: 73,469,728) ordinary shares, being the weighted average number of ordinary
shares in issue during the year.
The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below:
2026
£’000
2025
£’000
Net revenue profit
15,852 20,488
Net capital profit/(loss)
37,795 (65,482)
Net total profit/(loss)
53,647 (44,994)
Weighted average number of ordinary shares in issue during the year
60,708,172 73,469,728
2026 2025
Revenue earnings per ordinary share
26.11p 27.89p
Capital earnings/(losses) per ordinary share
62.26p (89.13p)
Total earnings/(loss) per ordinary share
88.37p (61.24p)
The Company has no securities in issue that could dilute the return per ordinary share. Therefore the basic and diluted
earnings per ordinary share are the same.
9 Dividends on ordinary shares
Record Date Pay Date
2026
£’000
2025
£’000
Final dividend 20.5p (2025: 19.5p) for the year ended
31 May 2025 29 August 2025 13 October 2025
13,159 14,505
Interim dividend of 7.5p (2025: 7.5p) for the year
ended 31 May 2026 13 March 2026 27 March 2026
4,280 5,507
Unclaimed dividends
– (8)
17,439 20,004
Subject to approval at the AGM, the proposed final dividend of 21.5p per ordinary share will be paid on 23 October 2026
to shareholders on the register of members at the close of business on 2 October 2026. The shares will be quoted
ex-dividend on 1 October 2026.
The proposed final dividend for the year ended 31 May 2026 has not been included as a liability in these financial
statements. Under IFRS, the final dividend is not recognised until approved by shareholders.
The total dividends payable in respect of the financial year which form the basis of the test under s1158 of the
Corporation Tax Act 2010 are set out below:
2026
£’000
2025
£’000
Revenue available for distribution by way of dividends for the year
15,852 20,488
Interim dividend for the year ended 31 May 2026 of 7.5p (2025: 7.5p) per ordinary share
(4,280) (5,507)
Final dividend for the year ended 31 May 2025 20.5p per ordinary share
– (13,159)
Proposed final dividend for the year ended 31 May 2026 of 21.5p (based on 54,510,363 shares
in issue at 27 July 2026)
(11,720) –
Transfer (from)/to reserves
(148) 1,822
80
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notes to the Financial Statements continued
10 Investments held at fair value through profit or loss
2026
£’000
2025
£’000
Cost at start of year
607,616 691,938
Investment holding gains at start of year
91,106 141,430
Valuation at start of year
698,722 833,368
Movements in the year:
Acquisitions at cost
122,787 115,189
Disposals at cost
(241,532) (199,511)
Movement in investment holding gains/(losses)
34,460 (50,324)
Valuation at year end
614,437 698,722
Cost at end of the year
488,871 607,616
Investment holding gains
125,566 91,106
Valuation at year end
614,437 698,722
The Company received £248,483,000 (2025: £188,623,000) from investments sold in the year. The book cost of these
investments when they were purchased were £241,532,000 (2025: £199,511,000). These investments have been revalued
over time and until they were sold, any unrealised gains/losses were included in the fair value of the investments.
Purchase and sale transaction costs for the year ended 31 May 2026 were £534,000 and £108,000 respectively
(2025: transaction costs of purchases £451,000; transaction costs of sales £84,000). These comprise mainly stamp
duty and commission.
No special dividends have been allocated to capital for the year ended 31 May 2026 (2025: £480,000).
Analysis of investments at fair value
2026
£’000
2025
£’000
Equity investments:
Listed on London Stock Exchange
558,238 609,994
Listed on Alternative Investment Market (“AIM”)
56,199 88,728
614,437 698,722
All the investments are listed in the United Kingdom. The above categories are based on information obtained from the
London Stock Exchange Daily Official List.
Total capital gains/(losses) from investments
2026
£’000
2025
£’000
Gains/(losses) on the sale of investments based on historical cost
6,951 (10,887)
Revaluation gains recognised in previous years
(16,374) (14,717)
Losses on investments sold in the year based on the carrying value at the previous balance
sheet date
(9,423) (25,604)
Net movement in investment holding
50,834 (35,607)
Gains/(losses) on investments held at fair value through profit or loss
41,411 (61,211)
All capital gains/(losses) are from investments that are listed (or quoted on AIM) in the United Kingdom.
Governance
Financial
Statements
Additional
Information AGM Notice
81
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Notes to the Financial Statements continued
11 Substantial interests
The Company held interests of 3% or more of any class of share capital in one investee company (2025: one
investee company). These investments are not considered by the directors to be significant in the context
of these financial statements.
Company
2026
Valuation
£’000
% of
voting
rights
RM
4,678 4.6
12 Receivables
2026
£’000
2025
£’000
Securities sold for future settlement
762 2,542
Management fee
142 –
Prepayments and accrued income
2,700 3,641
3,604 6,183
13 Payables
2026
£’000
2025
£’000
Securities purchased for future settlement
1,819 605
Buyback of shares into Treasury for future settlement
324 399
Management fee
– 351
Accruals and deferred income
528 479
2,671 1,834
14 Financial liabilities
2026
£’000
2025
£’000
Unsecured Loan Notes:
3.33% Unsecured Loan Notes 2036 (redeemable at par on 23 May 2036)
29,877 29,867
2.77% Unsecured Loan Notes 2052 (redeemable at par on 2 February 2052)
19,926 19,924
Preference Stock:
Nil Preference Stock units of £1 each (2025: 4,257)
– 4
49,803 49,795
In 1999, the Company undertook a substantial buyback and cancellation of the majority of its Preference Shares. A small
number of Preference Shares remained in issue following that process where the relevant shareholders could not be
contacted at that time.
The Company has completed the necessary steps in accordance with its articles of association in relation to untraced
shareholders to acquire the remaining Preference Shares. The Board of Directors of the Company approved the
acquisition and cancellation of all remaining Preference Shares (which represented only a de minimis holding of 4,257
shares, representing approximately £4,000 in aggregate nominal value) pursuant to those provisions.
Following completion of this process, the Preference Shares cease to be in issue.
On 23 May 2016, the Company issued £30,000,000 (nominal) 3.33% unsecured loan notes, net of issue costs totalling
£213,000. The issue costs will be amortised over the life of the notes. The loan notes do not carry voting rights and the
3.33% interest rate would be cumulative if unpaid in any period.
On 2 February 2022, the Company issued £20,000,000 (nominal) 2.77% unsecured loan notes, net of direct issue costs
totalling £82,000. The direct issue costs will be amortised over the life of the notes. The loan notes do not carry voting
rights and the 2.77% interest rate would be cumulative if unpaid in any period.
82
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notes to the Financial Statements continued
15 Risk management policies and procedures
The directors manage investment risk principally through setting an investment policy, approved by shareholders, which
incorporates risk parameters (see pages 27-28), by contracting management of the Company’s investments to an
investment manager (Janus Henderson) under a contract which incorporates appropriate duties and restrictions and by
monitoring performance in relation to these. The Board’s relationship with Janus Henderson is discussed in the Strategic
Report (pages 1-38). Internal control and the Board’s approach to risk management are also on pages 47-51. There have
been no material changes to the management or nature of the Company’s investment risks from the prior year.
The main risks arising from the Company’s pursuit of its investment objective are market risk, credit risk and liquidity risk.
The effects of these can also be increased by gearing.
The Board and Janus Henderson co-ordinate the Company’s risk management and there are various risk management
systems in place as detailed below:
• Straight-through processing via a deal order and management system (“OMS”) is utilised for listed securities.
• Portfolio modelling and investment management functions (including order-raising, dealing and trade execution)
are performed using one of, or a combination of, the following third-party software applications: Charles River
Development, OMS and/or Imagine.
• Fund pricing and accounting services are outsourced to a third-party administrator (currently BNP Paribas) which
utilises Hiportfolio software.
• The IT tools to which the Janus Henderson risk, compliance and operations teams have access for independent
monitoring and risk measurement purposes include:
– Charles River Compliance module for investment restrictions monitoring;
– SAI360 operational risk database;
– RiskMetrics, UBS Delta, Style Research and Barra for market risk measurement;
– Bloomberg for market data and price-checking; and
– Hiportfolio for portfolio holdings and valuations.
a) Market risk
The fair value of a financial instrument held by the Company may fluctuate due to changes in market prices. This
market risk comprises market price risk (see note 15 (b)), currency risk (see note 15 (c)) and interest rate risk (see note 15
(d)). The Board reviews and agrees policies for managing these risks. Janus Henderson assesses the exposure to
market risk when making each investment decision and monitors the overall level of market risk on the whole of the
investment portfolio on an ongoing basis.
b) Market price risk
Market price risk (i.e. changes in market prices other than those arising from interest rate risk or currency risk) may
affect the fair value of the investments. The Company’s investments are susceptible to market price risk arising from
uncertainties about the future prices of the investments.
Management of the risk
The Board manages the risks inherent in the investment portfolio by ensuring full and timely access to relevant
information from Janus Henderson. The Board regularly reviews investment performance. The Board monitors
Janus Henderson’s compliance with the Company’s objectives and is directly responsible for investment strategy.
The Company’s exposure to changes in market prices at 31 May 2026 on its equity investments was £614,437,000
(2025: £698,722,000).
Concentration of exposure to market price risk
An analysis of the Company’s investments is shown on pages 19-21 and a sector analysis is set out on page 2. At 31 May 2026
all the investments were in companies listed or quoted on the London Stock Exchange, most of them being companies
established in and operating from the United Kingdom. Accordingly, there is a concentration of exposure to the UK,
although it is recognised that an investment’s country of domicile or of listing does not necessarily equate to its
exposure to the economic conditions in that country.
Governance
Financial
Statements
Additional
Information AGM Notice
83
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Notes to the Financial Statements continued
15 Risk management policies and procedures continued
b) Market price risk continued
Market price risk sensitivity
The sensitivity of (a) the return after taxation for the year and (b) the Company’s net assets to an increase or decrease
of 25% in the fair values of the Company’s investments at each balance sheet date is given below. This level of change
is considered to be reasonably possible, based on observation of current market conditions.
The impact of a 25% increase in the value of the investments on the revenue return as at 31 May 2026 is a decrease
of £161,000 (2025: £183,000) and on the capital return is an increase of £153,233,000 (2025: £174,253,000). Accordingly, the
total impact on shareholders’ funds is an increase of £153,072,000 (2025: £174,069,000).
The impact of a 25% decrease in the value of the investments on the revenue return as at 31 May 2026 is a increase
of £161,000 (2025: £183,000) and on the capital return is a decrease of £153,233,000 (2025: £174,253,000). Accordingly, the
total impact on shareholders’ funds is a decrease of £153,072,000 (2025: £174,069,000).
c) Currency risk
The Company is not itself materially exposed to currency risk, although some of the investments will be in companies
that have operations that involve currency risk.
As at 31 May 2026, the Company did not hold any non-sterling denominated investments (2025: nil).
d) Interest rate risk
Interest rate movements may affect:
• the level of income receivable from cash at bank and on deposit; and
• the interest payable on the Company’s short-term borrowings.
Interest rate changes may also have an impact on the market value of the Company’s equity investments. In particular,
the effect of the interest rate changes on the earnings of companies held within the portfolio may have a significant
impact on the valuations of those companies.
Management of risk
The possible effects on the fair value of the investments that could arise as a result of changes in interest rates are
taken into account when making investment and borrowing decisions. The Company rarely holds significant cash
balances but finances part of its investment activity through borrowings at levels approved and monitored by the
Board. At 31 May 2026 the Company had committed bank borrowing facilities for a total of £15.0 million
(2025: £20.1 million); borrowings are drawn down for short periods at rates of interest that are determined by reference
to the market rates applicable at the time of borrowing.
Interest rate exposure
The Company’s financial liabilities at 31 May 2026 that give exposure to fixed interest rate risk are set out in note 14. The
exposure to floating interest rates can be found on the Balance Sheet (cash and cash equivalents and bank loans).
These amounts are not necessarily representative of the exposure to interest rates during the year, as the level of
exposure changes as investments are made, borrowings are drawn down or repaid, and the mix of borrowings subject
to floating or to fixed interest rate changes.
Interest rate sensitivity
The Company is not materially exposed to changes in interest rates. As at 31 May 2026 the Company’s one-year
revolving loan facility provided by BNP Paribas, London branch and effective from 4 February 2026, allowed borrowings
to a maximum of £70 million, the interest rate exposure on which is 0.90% plus SONIA (Sterling Overnight Index Average).
The bank loan at 31 May 2026 was £15,000,000 (2025: £20,133,000) and if interest rates changed by 100 basis points
(up or down) this would decrease or increase shareholder funds by approximately £150,000 (2025: £201,000). The
interest payable on the Company’s £30 million issue of unsecured loan notes is fixed at 3.33% and on the £20 million
issue of unsecured loan notes is fixed at 2.77%.
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Notes to the Financial Statements continued
15 Risk management policies and procedures continued
e) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities.
Management of risk
Liquidity risk is not significant as the majority of the Company’s assets are investments in quoted equity securities that
are readily realisable. The Company has borrowed £30 million by its issue in 2016 of 3.33% unsecured loan notes 2036
and a further £20 million by its issue in 2022 of 2.77% unsecured loan notes 2052. The Company is able to draw short-
term borrowings of up to £70 million from its committed borrowing facility with BNP Paribas, London branch. There were
borrowings of £15.0 million drawn down under the facility at 31 May 2026 (2025: £20.1 million).
Accordingly, the Company has access to borrowings of up to £120 million: the £50 million of fixed debt represented by
the issue of unsecured loan notes and a committed bank facility of £70 million.
The Board gives guidance to the Manager as to the maximum amount of the Company’s resources that should be
invested in any one company. The policy is that the Company should remain fully invested in normal market conditions
and that short-term borrowings should be used to fund short-term cash requirements.
Liquidity risk exposure
The remaining contractual maturities of the financial liabilities at 31 May 2026, based on the earliest date on which
payment could be required, was as follows:
2026 2025
Due within
1 year
£’000
Due between
1 and 5 years
£’000
Due more
than 5 years
£’000
Due within
1 year
£’000
Due between
1 and 5 years
£’000
Due more
than 5 years
£’000
Preference stock
1
n/a n/a n/a – – –
Unsecured loan notes 2036
2
999 3,996 34,973 999 3,996 35,972
Unsecured loan notes 2052
2
554 2,216 31,455 554 2,216 32,009
Bank loans and interest
15,056 – – 20,218 – –
Payables
2,442 – – 1,609 – –
19,051 6,212 66,428 23,380 6,212 67,981
1 See also note 14. The Company has cancelled the Preference Stock on 23 May 2026 (2025: £4,000)
2 The amounts due include unsecured loan note interest
f) Credit risk
The failure of the counterparty to discharge its obligations under a transaction could result in the Company suffering a loss.
Management of risk
The risk is not significant, and is managed as follows:
• investment transactions are carried out with a large number of brokers, whose credit standard is reviewed regularly
by JHI, and limits are set on the amount that may be due from any one broker; and
• cash at bank is held only with reputable banks with high quality external credit ratings.
None of the Company’s financial assets are past their due date and the adoption of the expected credit loss model for
impairment under IFRS 9 has not had a material impact on the Company.
In summary, the maximum exposure to credit risk at 31 May 2026 was to cash and cash equivalents of £8,013,000
(2025: £1,181,000), and to receivables of £3,604,000 (2025: £6,183,000) (see note 12).
Governance
Financial
Statements
Additional
Information AGM Notice
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Notes to the Financial Statements continued
15 Risk management policies and procedures continued
g) Fair values of financial assets and financial liabilities
The investments are held at fair value through profit or loss. All the net current liabilities are held in the Balance Sheet at a
reasonable approximation of fair value.
The unsecured loan notes are carried in the Balance Sheet at par less the issue costs which are amortised over the life
of the notes. In order to comply with fair value accounting disclosures only, the fair value of the unsecured loan notes
has been estimated to be £34,676,000 (2025: £34,913,000) and is categorised as Level 3 in the fair value hierarchy
as described below. However, for the purpose of the daily NAV announcements, the unsecured loan notes are valued
at par in the fair value NAV because they are not traded and the directors have assessed that par value is the most
appropriate value to be applied for this purpose.
The fair value of the unsecured loan notes is calculated using a discount rate which reflects the yield of a UK Gilt
of similar maturity plus a suitable credit spread.
h) Fair value hierarchy disclosures
The table below sets out fair value measurements using the IFRS 13 fair value hierarchy.
Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant
to the fair value measurement of the relevant asset, as follows:
Level 1: valued using quoted prices in active markets for identical assets.
Level 2: valued by reference to valuation techniques using observable inputs other than quoted prices.
Level 3: valued by reference to valuation techniques using inputs that are not based on observable market data.
The valuation techniques used by the Company are explained in note 1(c).
Fair value hierarchy – 2026
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments
614,437 – – 614,437
Fair value hierarchy – 2025
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments
698,722 – – 698,722
There have been no transfers during the year between any of the levels.
i) Capital management policies and procedures
The Company’s capital management objectives are:
• to ensure that it will be able to continue as a going concern; and
• to secure long-term capital growth for the shareholders by investment in quoted securities in the UK.
This is to be achieved through an appropriate balance of equity capital and gearing. The Company’s policy is that
its borrowings must not exceed 30% of the shareholders’ funds.
The Company’s total capital at 31 May 2026 was £623,580,000 (2025: £704,461,000) comprising £15,000,000
(2025: £20,133,000) of unsecured bank loans, £50,000,000 (2025: £50,000,000) of unsecured loan notes, £nil
(2025: £4,000) of Preference Stock and £558,580,000 (2025: £634,324,000) of equity share capital and reserves.
The Company has a £70 million revolving credit facility with BNP Paribas, London branch. The Company had drawn
down £15,000,000 under these facilities as at 31 May 2026 (2025: £20,133,000). The Company was fully compliant with
the terms of the facilities, as they existed, for the period 1 June 2025 to the date of this Annual Report.
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Notes to the Financial Statements continued
16 Share capital
2026 2025
Number
of shares
entitled to
dividend
Total
number of
shares
Nominal
value of
shares
£’000
Number
of shares
entitled to
dividend
Total
number of
shares
Nominal
value of
shares
£’000
Ordinary shares of 25p each
At start of year
68,487,974 68,487,974 17,122 74,505,131 74,505,131 18,627
Buyback of shares for cancellation
– – – (120,000) (120,000) (30)
Buyback of shares to Treasury
(12,899,062) (12,899,062) (3,225) (5,897,157) (5,897,157) (1,475)
Closing balance at 31 May
55,588,912 55,588,912 13,897 68,487,974 68,487,974 17,122
Treasury shares
At start of year
– 5,897,157 1,475 – – –
Buyback of shares to Treasury
– 12,899,062 3,225 – 5,897,157 1,475
Closing balance at 31 May
– 18,796,219 4,700 – 5,897,157 1,475
Total
55,588,912 74,385,131 18,597 68,487,974 74,385,131 18,597
During the year, the Company purchased 12,899,062 of its own issued ordinary shares to be held in Treasury, at a cost
of £111,952,000 (2025: the Company purchased 120,000 of its own issued ordinary shares for cancellation and 5,897,157
to be held in Treasury, at a total cost of £48,018,000). Since 31 May 2026 and up to 27 July 2026, being the latest
practicable date prior to publication of this Report, 1,078,549 shares have been bought back at a cost of £9,817,000.
The holders of ordinary shares are entitled to all the capital growth in the Company and all the income from the
Company that is resolved by the directors to be distributed. Each holder of ordinary shares present at a general
meeting has one vote on a show of hands and on a poll every member present in person or by proxy has one vote
for each ordinary share held.
17 Capital redemption reserve and capital reserves
2026
Capital
redemption
reserve
£’000
Capital reserve
arising on
revaluation
of investments
held
£’000
Capital reserve
arising on
investments sold
£’000
Capital
reserves
£’000
At 1 June 2025
26,824 91,106 477,661 568,767
Buyback of shares to Treasury
– – (111,952) (111,952)
Transfer on disposal of investments (see note 10)
– (16,374) 16,374 –
Net capital gains/(losses) for the year
– 50,834 (9,423) 41,411
Expenses charged to capital
– – (3,616) (3,616)
At 31 May 2026
26,824 125,566 369,044 494,610
2025
Capital
redemption
reserve
£’000
Capital reserve
arising on
revaluation
of investments
held
£’000
Capital reserve
arising on
investments sold
£’000
Capital
reserves
£’000
At 1 June 2024
26,794 141,430 540,837 682,267
Buyback of shares to Treasury
– – (46,961) (46,961)
Buyback of shares for cancellation
30 – (1,057) (1,057)
Transfer on disposal of investments (see note 10)
– (14,717) 14,717 –
Net capital losses for the year
– (35,607) (25,604) (61,211)
Expenses charged to capital
– – (4,268) (4,268)
Currency losses
– – (3) (3)
At 31 May 2025
26,824 91,106 477,661 568,767
The capital reserve arising on investments sold (i.e. realised capital profits) may be distributed by way of a dividend.
Governance
Financial
Statements
Additional
Information AGM Notice
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Notes to the Financial Statements continued
18 Revenue reserve
2026
£’000
2025
£’000
At start of year
20,136 19,652
Ordinary dividend paid
(17,439) (20,004)
Revenue profit for the year
15,852 20,488
At 31 May
18,549 20,136
19 Net asset value (“NAV”) per ordinary share
The NAV per ordinary share is based on the net assets attributable to the ordinary shares of £558,580,000
(2025: £634,324,000) and on the 55,588,912 ordinary shares in issue (excluding Treasury shares) at 31 May 2026
(2025: 68,487,974).
The Company has no securities in issue that could dilute the NAV per ordinary share.
The movement during the year of the net assets attributable to the ordinary shares was as follows:
2026
£’000
2025
£’000
Net assets attributable to ordinary shares at 1 June
634,324 747,340
Buyback of shares to Treasury
(111,952) (46,961)
Buyback of shares for cancellation
– (1,057)
Net gains/(losses) for the year
53,647 (44,994)
Ordinary dividends paid in the year
(17,439) (20,004)
Net assets attributable to ordinary shares at 31 May
558,580 634,324
20 Capital commitments and contingent liabilities
Capital commitments
There were no capital commitments as at 31 May 2026 (2025: nil).
Contingent liabilities
There were no contingent liabilities in respect of sub-underwriting commitments as at 31 May 2026 (2025: nil).
21 Transactions with the Manager and related parties
Under the terms of an agreement effective from July 2014 and most recently revised on 18 July 2024, with no changes to
terms affecting the relationship with the Manager, the Company appointed Janus Henderson as Manager to provide
investment management, accounting, administrative and secretarial services. The Manager has contracted with BNP
Paribas to provide accounting and administration services.
Details of the management fee arrangements for these services are given in the Strategic Report on page 25. The fees
paid or payable under this agreement to the Manager in respect of the year ended 31 May 2026 were £1,999,000
(2025: £2,396,000) (see note 4). The amount prepaid at 31 May 2026 was £142,000 (2025: £351,000 was outstanding and
payable to Janus Henderson).
No performance fee is payable to Janus Henderson in respect of the year ended 31 May 2026 (2025: £nil).
In addition to the above services, the Manager facilitates marketing activities with third parties which are recharged to
the Company. Total amounts paid to the Manager in respect of marketing for the year ended 31 May 2026 amounted
to £405,000 (2025: £135,000). See Chair’s Statement on page 9 for more detail.
Directors’ interests in the ordinary shares of the Company and fees paid to the directors are considered to be
transactions with related parties. Details are shown in the Directors’ Remuneration Report and in note 5. At 31 May 2026,
an amount of £31,000 (2025: £34,000) had been accrued in respect of April and May 2026 directors’ fees and is included
with accruals in note 13. This was paid in the June 2026 quarterly payroll, as directors are remunerated in the form of
fees, payable quarterly in arrears.
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notes to the Financial Statements continued
22 Changes in financial liabilities
The following table shows the movements during the year in financial liabilities in the Balance Sheet:
Notes
At
1 June 2025
£’000
Cash flows
£’000
Amortisation
of issue costs
£’000
At
31 May 2026
£’000
Financing activities
Bank loans
(20,133) 5,133 – (15,000)
14 Financial liabilities
(49,795) – (8) (49,803)
(69,928) 5,133 (8) (64,803)
Non-financing activities
Cash and cash equivalents
1,181 6,832 – 8,013
1,181 6,832 – 8,013
Total
(68,747) 11,965 (8) (56,790)
Notes
At
1 June 2024
£’000
Cash flows
£’000
Amortisation
of issue costs
£’000
At
31 May 2025
£’000
Financing activities
Bank loans
(55,744) 35,611 – (20,133)
14 Financial liabilities
(49,783) – (12) (49,795)
(105,527) 35,611 (12) (69,928)
Non-financing activities
Cash and cash equivalents
9,249 (8,065) (3) 1,181
9,249 (8,065) (3) 1,181
Total
(96,278) 27,546 (15) (68,747)
Governance
Financial
Statements
Additional
Information AGM Notice
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
Financial
Statements
Additional
Information
In this section
91 Glossary
93 Alternative performance measures
95 General shareholder information
96 Historical record
Photo: Genus
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Glossary
Term Definition
Alternative
Investment Fund
Managers Directive
(“AIFMD”)
The AIFMD classifies certain investment vehicles, including investment companies, as
alternative investment funds (“AIFs”) and requires them to appoint an alternative investment
fund manager (“AIFM”) and depositary to manage and oversee the operations of the
investment vehicle. The Board retains responsibility for strategy, operations and compliance
and the directors retain a fiduciary duty to shareholders.
Association of
Investment
Companies (“AIC”)
The Company is a member of the AIC, which is the trade body for investment companies
and represents the industry in matters which impact the regulation of such entities.
The Company is a constituent of the AIC’s UK Smaller Companies sector.
Benchmark
An index against which performance is compared. For the Company, this is the Deutsche
Numis Smaller Companies Index (excluding investment companies).
Custodian
The custodian is responsible for ensuring the safe custody of the Company’s assets and that
all transactions in the underlying holdings are transacted in an accurate and timely manner.
Depositary
As an AIF, the Company is required to appoint a depositary which has responsibility for
overseeing the operations of the Company, including safekeeping, cash monitoring and
verification of ownership and valuation of the underlying holdings, and is responsible for
the appointment of a custodian. The depositary is strictly liable for the loss of any
investments or other assets in its custody unless it has notified that it has discharged its
liability in certain markets. No such notification has been made. The Company’s depositary
has confirmed that, in all material respects, the Company has been managed in
accordance with the FCA’s Investment Funds Sourcebook, the Company’s Articles of
Association and as required by the AIFMD.
Dividend dates
When declared or recommended each dividend will have three key dates applied to it:
• the payment date is the date on which shareholders will receive their dividend, either by
BACS transfer or by receipt of a dividend cheque;
• the record date applied to the dividend is used as a cut-off for the Company’s registrar to
know which shareholders should be paid a dividend. Only shareholders on the register of
members at the close of business on the record date will receive the dividend; and
• the ex-dividend date is the business day before the record date and is the date upon
which the Company’s net asset value and share price will be disclosed ex-dividend.
Gearing
Gearing is the borrowing of money to buy assets in the expectation that the return on
investments bought will exceed the interest cost of the borrowing. The net gearing
percentage reflects the amount of borrowings (e.g. bank loans and loan notes) the
Company has used to invest in the market. It is calculated by taking the difference between
total investments (see note 10) and equity shareholders’ funds (see Balance Sheet), dividing
this by the equity shareholders’ funds and multiplying by 100.
Gearing impact on
stock selection and
gearing decision
When the Company has a geared portfolio, the impact of ‘stock selection’ compared to
the benchmark is amplified as a consequence of being geared. Without gearing, portfolio
performance would have been higher and the residual of the impact is allocated to the
‘decision’ to be geared. Splitting the impact in this way can be helpful to show the effect
of debt on portfolio performance and disaggregating this from the impact of the decision
to gear.
The performance attribution on page 12 shows how borrowing (gearing) affected
performance. This is split into two parts:
• The effect of stock selection, which compares the performance of the portfolio’s
investments before the impact of gearing with the performance of the benchmark index.
• The effect of the gearing decision itself, which shows the additional impact of using
borrowing to increase the Company’s exposure to investments.
Together, these two elements show the overall contribution of gearing to performance.
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Financial
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91
Additional
Information
Glossary continued
Term Definition
Investment trusts
An investment trust is a listed, closed-ended investment company whose shares are
traded on the London Stock Exchange. It provides shareholders with exposure to a
professionally managed portfolio of investments and is governed by its articles of
association, any amendments to which must be approved by shareholders by special
resolution. For tax purposes, an investment trust is a company approved by HMRC as
meeting the conditions in section 1158 of the Corporation Tax Act 2010 and the Investment
Trust (Approved Company) (Tax) Regulations 2011. An approved investment trust is subject
to corporation tax on its income, but is generally exempt from tax on chargeable gains
arising on its investments, provided it continues to meet the relevant conditions. Investment
trusts are a specific type of investment company.
Liquidity
In the context of the liquidity of shares in the stock market, this refers to the availability of
buyers in the market for the share in question. Where the market in a particular share is
described as ‘liquid’, that share will be in demand and holders wishing to sell their shares
should find ready buyers. Conversely, where the market in a share is ‘illiquid’, the difficulty
of finding a buyer will tend to depress the price that might be negotiated for a sale.
Management fee
This is a fee charged by a management company for managing a portfolio, normally based
on a percentage of the assets under management. The Company’s management fee is
charged at 0.35% per annum (0.0875% per quarter) of net assets calculated on the last day
of each calendar quarter and is paid to Janus Henderson each calendar quarter in advance.
4Ms process
The Fund Managers uses a structured investment approach known as the 4Ms process,
which stands for Model (business model of a company), Management (quality and track
record of the management team), Money (financial health of a company) and Momentum
(a company’s ability to outperform expectations).
Ongoing charge
The ongoing charge represents the Company’s recurring annual operating expenses,
whether charged to capital or revenue, expressed as a percentage of average net assets.
It is calculated in accordance with the AIC methodology and excludes the costs of
acquiring or disposing of investments, financing costs, gains or losses arising on
investments and any performance fees. The calculation includes the management fee
and other administrative expenses, such as directors’ fees and the auditor’s fees, and
therefore exceeds the management fee rate payable to Janus Henderson. The cap of
0.90% under the Company’s management agreement applies only to management fees
and performance fees and excludes other expenses.
Performance fee
A performance fee is a fee payable to the Manager if the Company outperforms its
benchmark over the financial year and the relevant conditions under the management
agreement are met. Under the Company’s management agreement, the performance fee
is calculated as 15% of any outperformance of the benchmark index, on a total return
basis, over the financial year. The total management fee and performance fee payable in
any one year is capped at 0.9% of the average value of the Company’s monthly net assets
during the year.
No performance fee is payable if, at the financial year end, the Company’s share price is
lower than at the preceding year end. If the year-end NAV per share is equal to or lower
than the previous year-end NAV per share, any performance fee is restricted and may only
be paid to the extent that it increases the NAV per share above the previous year-end level.
Share buybacks
A corporate financial strategy where a company purchases its own shares from the market.
This reduces the total number of shares available. Shares are bought at a price lower than
NAV, which helps to increase value for continuing shareholders. Shares which are bought
back may either be cancelled or held in Treasury.
Treasury shares
A company’s own issued shares which it buys back, and which it does not cancel, are said to
be held in Treasury. Shares held in Treasury do not carry voting rights, do not receive
dividends, and are not included in earnings per share calculations.
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Alternative performance measures
The Company uses alternative performance measures (“APMs”) throughout the Annual Report, financial statements and
notes. The APMs are reconciled to the financial statements through the narrative below. The Board believes that each of
the APMs, which are typically used within the investment trust sector, provide additional useful information to
shareholders to help assess the Company’s performance against its peer group.
Capital return per share
The capital return per share is the capital profit for the year (see Statement of Comprehensive Income) divided
by the weighted average number of ordinary shares in issue during the year (see note 8).
Discount or premium
The amount by which the market price per share of an investment trust is either higher (premium) or lower (discount)
than the NAV per ordinary share, expressed as a percentage of the NAV per ordinary share.
NAV
pence
Share
price
pence
Premium/
(discount)
to NAV
At 31 May 2025
926.2 841.0 (9.2%)
At 31 May 2026
1,004.8 917.0 (8.7%)
Gearing/(net cash)
Gearing represents the excess amount above shareholders’ funds of total investments, expressed as a percentage of
the shareholders’ funds. If the amount calculated is negative, this is a ‘net cash’ position and not gearing.
2026 2025
Investments held at fair value through profit or loss (£’000) (page 81)
(A) 614,437 698,722
Net assets (£’000) (page 72)
(B) 558,580 634,324
Gearing (C = (A/B) -1) (%)
(C) 10.0% 10.2%
Net asset value (“NAV”) per ordinary share
The value of the Company’s assets (i.e. investments held at fair value through profit or loss (see note 10) and cash held
(see Balance Sheet)) less any liabilities (i.e. financial liabilities (see note 14)) for which the Company is responsible
divided by the number of ordinary shares in issue (see note 16). The aggregate NAV is also referred to as total equity,
in the Balance Sheet.
The NAV per ordinary share is published daily and the year end NAV can be found on page 6 and further information is
available in note 19 within the notes to the financial statements.
Ongoing charge ratio (“OCR”)
The ongoing charge has been calculated in accordance with the guidance issued by the AIC as the total investment
management fees and administrative expenses expressed as a percentage of the average NAV throughout the year.
2026
£’000
2025
£’000
Management fees (note 4)
1,999 2,396
Other administrative expenses (note 5)
1,084 761
Less: non-recurring expenses
(20) (18)
Ongoing charges (A)
3,063 3,139
Average net assets
1
(B)
580,312 693,240
Ongoing charges ratio (excluding performance fee) (C = (A/B) x 100) (C)
0.53% 0.45%
1 Calculated using the average daily NAV
Revenue return per share
The revenue return per share is the revenue return for the year (see Statement of Comprehensive Income) divided
by the weighted average number of ordinary shares in issue during the year (see note 8).
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
93
Additional
Information
Total return
The return on the share price or NAV taking into account both the rise and fall of NAV or share prices and dividends paid
to shareholders. Any dividends received by a shareholder are assumed to have been reinvested in either additional
shares (for share price total return) or the Company’s assets (for NAV total return). The dividend reinvestment factor is
based on geometric returns. Dividends paid and payable are set out in note 9.
Performance is calculated based on the daily NAV per ordinary share published as at the year-end date. The NAV per
share reported in the financial statements may differ due to the financial statements being prepared on a different
basis to the daily NAV in order to comply with accounting standards, or adjustments made in the preparation of the
financial statements subsequent to the published NAV.
NAV per share at 31 May 2025 and 31 May 2024 (p)
926.2 1,003.1
NAV per share at 31 May 2026 and 31 May 2025 (p)
1,004.8 926.2
2026 2025
Change in the year (%)
8.5 -7.7
Impact of dividends reinvested (%)
3.0 2.8
NAV total return for the year (%)
11.8 -5.1
Share price per share at 31 May 2025 and 31 May 2024 (p)
841.0 888.0
Share price per share at 31 May 2026 and 31 May 2025 (p)
917.0 841.0
2026 2025
Change in the year (%)
9.0 -5.3
Impact of dividends reinvested (%)
3.3 3.1
Share price total return for the year (%)
12.6 -2.3
Yield
The yield is the annual dividend expressed as a percentage of the year-end share price.
31 May
2026
31 May
2025
Annual dividend (p)
(A) 29.0 28.0
Share price (p)
(B) 917.0 841.0
Yield (C=A/B) (%)
(C) 3.2 3.3
Alternative performance measures continued
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
General shareholder information
Alternative Investment Fund Manager’s
Directive (“AIFMD”) disclosures and
remuneration
In accordance with the AIFMD, information about the
Company’s leverage and remuneration of Janus
Henderson Fund Management UK Limited, as the
Company’s alternative investment fund manager (“AIFM”),
is required to be made available to investors. These
disclosures, including those on the AIFM’s remuneration
policy, are contained in a separate document entitled
AIFMD Disclosure which can be found at
www.hendersonsmallercompanies.com.
BACS
Dividends can be paid to shareholders by means of BACS.
Mandate forms for this purpose are available from the
registrar, Computershare Investor Services plc.
Alternatively, shareholders can write to the registrar at the
address on page 105 to give their instructions, including
the bank account name, account number and sort code
to which payments are to be made.
Common Reporting Standard (“CRS”)
Under tax legislation, the Company must provide
personal information to HMRC on certain investors who
purchase shares in investment trusts. This information is
given annually to the local tax authority of the tax
residencies of non-UK based certificated shareholders
and corporate entities.
Equality Act 2010
This report and other documents issued by the
Company are available from the corporate secretary.
If needed, copies can be made available in a variety
of formats, including larger type.
A ‘typetalk’ operator, provided by the Royal National
Institute for Deaf People, is available to support
speech and hearing-impaired people to make
telephone calls. Please dial 18001 followed by the
number you wish to dial.
General Data Protection Regulation
(“GDPR”)
A privacy statement can be found at
www.janushenderson.com.
Individual Savings Account (“ISA”)
The Company intends to continue to manage its affairs in
order to qualify as an eligible investment for a stocks and
shares ISA.
Non-mainstream pooled investments
(“NMPI”) status
The Company conducts its affairs so that its ordinary
shares of 25p each can be recommended by
independent financial advisors (“IFAs”) to ordinary retail
investors in accordance with the Financial Conduct
Authority’s (“FCA”) rules regarding non-mainstream
investment products and intends to continue to do so
for the foreseeable future. The shares are excluded from
the FCA’s restrictions which apply to non-mainstream
investment products because they are shares in an
investment trust.
Performance details/share price
information
The Company’s NAV and share price are
published daily. Details can be found at
www.hendersonsmallercompanies.com and
in the London Stock Exchange Daily Official List.
The market price of the Company’s ordinary shares
is also published daily in the Daily Telegraph and
on Trustnet.
Shareholder details
Shareholders who hold their shares in certificated form
can check their shareholding with the registrar,
Computershare Investor Services plc, via
www.investorcentre.co.uk. To gain access to your details
on the Computershare site, you will need the holder
reference number shown on your share certificate.
Taxonomy Regulation
Regulation (EU) 2020/852 forms the basis for the
EU taxonomy. This establishes a list of environmentally
sustainable economic activities to provide definitions for
which economic activities can be considered
environmentally sustainable. The Company confirms that
the investments underlying this financial product do not
take into account the EU criteria for environmentally
sustainable economic activities.
Governance
Financial
Statements
Additional
Information AGM Notice
Strategic
Report
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
95
Additional
Information
At
31 May
Net
assets
£’000
NAV
per share
p
Mid-
market
price per
ordinary
share
p
Discount
%
Profit/
(loss) for
year
£’000
Revenue
return
p
Capital
return
p
Total
return
p
Dividends
p
Ongoing
charges
excl perf
fee
%
Ongoing
charges
incl perf
fee
%
2017
688,460 921.6 799.0 (13.3) 154,332 19.57 187.03 206.60 18.00 0.43 1.01
2018
782,068 1,046.9 966.0 (7.7) 107,801 22.79 121.52 144.31 21.00 0.42 0.99
2019
716,145 958.7 858.0 (10.5) (49,862) 23.59 (90.34) (66.75) 23.00 0.42 0.42
2020
641,796 859.1 777.0 (9.6) (56,799) 16.73 (92.76) (76.03) 23.50 0.42 0.42
2021
992,898 1,329.1 1,280.0 (3.7) 368,651 13.86 479.64 493.50 23.75 0.39 0.98
2022
802,599 1,074.4 917.5 (14.6) (172,565) 24.57 (255.58) (231.01) 24.00 0.42 0.42
2023
675,387 904.1 785.0 (13.2) (109,287) 29.38 (175.68) (146.30) 26.00 0.44 0.44
2024
747,340 1,003.1 888.0 (11.5) 93,345 29.85 95.14 124.99 27.00 0.45 0.45
2025
634,324 926.2 841.0 (9.2) (44,994) 27.89 (89.13) (61.24) 28.00 0.45 0.45
2026
558,580 1,004.8 917.0 (8.7) 53,647 26.11 62.26 88.37 29.00 0.53 0.53
A glossary of terms and explanations of alternative performance measures are included on pages 91-94
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
Historical record
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notice of Annual
General Meeting
98 Notice of Annual General Meeting
105 Corporate information
Photo: Mitchells & Butlers
Governance
Financial
Statements
Additional
Information AGM Notice
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Strategic
Report
AGM NoticeGovernance
Financial
Statements
Additional
Information AGM Notice
97
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
AGM Notice
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting
(“AGM”) of The Henderson Smaller Companies
Investment Trust plc (the “Company”) will be held at
11.30 am on Tuesday, 6 October 2026 at the offices of
Janus Henderson Investors, 201 Bishopsgate, London
EC2M 3AE, for the purpose of considering and, if thought
fit, passing the following resolutions:
Ordinary resolutions
1 To receive the Annual Report and the audited financial
statements for the year ended 31 May 2026.
2 To approve the Directors’ Remuneration Report for the
year ended 31 May 2026.
3 To approve the Directors’ Remuneration Policy.
4 That, in accordance with Article 90 of the Company’s
Articles of Association, the maximum aggregate fees
payable to the directors in respect of each financial
year be increased from £250,000 to £300,000.
5 To approve a final dividend of 21.5 pence per ordinary
share.
6 To re-appoint Penny Freer as a director of the
Company.
7 To re-appoint Kevin Carter as a director of the
Company.
8 To re-appoint Alexandra Mackesy as a director of the
Company.
9 To re-appoint Yen Mei Lim as a director of the
Company.
10 To re-appoint Michael Warren as a director of the
Company.
11 To re-appoint Forvis Mazars LLP as the statutory auditor
of the Company.
12 To authorise the Audit and Risk Committee to
determine the statutory auditor’s remuneration.
13 THAT, in substitution for all existing authorities, the
directors be generally and unconditionally authorised
in accordance with s551 of the Companies Act 2006 to
exercise all the powers of the Company to allot
ordinary shares of 25p each in the capital of the
Company (“ordinary shares”) and to grant rights to
subscribe for, or to convert any security into, shares in
the Company.
This authority shall be limited to an aggregate nominal
amount of £1,362,759 (or such other amount representing
10% of the Company’s issued ordinary share capital
(excluding Treasury shares) as at the date of the passing
of this resolution).
This authority shall expire on the earlier of the conclusion
of the next annual general meeting of the Company after
the passing of this resolution or, if earlier, 15 months from
the date of the passing of this resolution. The Company
may, before the authority expires, make an offer or
agreement which would or might require shares to be
allotted, or rights to be granted, after the authority expires.
The directors may allot shares, or grant rights to subscribe
for or convert any security into shares, pursuant to any
such offer or agreement as if the authority had not expired.
Special resolutions
14 THAT, subject to the passing of resolution 13 and in
substitution for all existing authorities, the directors
be empowered pursuant to s570 and s573 of the
Companies Act 2006 to allot equity securities, as defined
in s560 of the Companies Act 2006, for cash pursuant to
the authority conferred by resolution 13. The directors shall
also be empowered to sell ordinary shares held by the
Company as Treasury shares for cash. In each case, the
directors may do so as if s561 of the Companies Act 2006
did not apply to the allotment or sale.
This power shall be limited to:
(a) the allotment of equity securities and/or sale of
Treasury shares in connection with an offer of
equity securities to ordinary shareholders in
proportion, as nearly as practicable, to their
existing holdings. The directors may make such
exclusions or other arrangements as they
consider necessary or expedient in relation to
fractional entitlements or any legal, regulatory or
practical problems under the laws of, or the
requirements of any regulatory body or stock
exchange in, any territory; and
(b) otherwise than pursuant to paragraph (a), the
allotment of equity securities and/or sale of
Treasury shares up to an aggregate nominal
amount of £1,362,759 (or such other amount
representing 10% of the Company’s issued
ordinary share capital (excluding Treasury shares)
as at the date of the passing of this resolution).
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR ATTENTION.
If you are in any doubt as to the action you should take, you should consult your stockbroker, solicitor,
accountant or other independent financial adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or, if you are resident outside the United
Kingdom, another appropriately authorised independent financial adviser in your own jurisdiction.
If you have sold, transferred or otherwise disposed of all your shares in The Henderson Smaller Companies
Investment Trust plc (the “Company”), please forward this document, but not any accompanying personalised
Form of Proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale,
transfer or disposal was effected, for onward transmission to the purchaser or transferee. If you have sold,
transferred or otherwise disposed of only part of your holding, you should retain this document and the
accompanying Form of Proxy and consult the bank, stockbroker or other agent through whom the sale, transfer
or disposal was effected.
98
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notice of Annual General Meeting continued
No equity securities shall be allotted, and no
Treasury shares shall be sold, pursuant to this
authority at a price below the prevailing net asset
value per ordinary share at the time of the
allotment or sale.
This authority shall expire on the earlier of the
conclusion of the next annual general meeting of the
Company after the passing of this resolution or, if
earlier, 15 months from the date of the passing of this
resolution. The Company may, before the authority
expires, make an offer or agreement which would
or might require equity securities to be allotted, or
Treasury shares to be sold, after the authority expires.
The directors may allot equity securities or sell Treasury
shares pursuant to any such offer or agreement as
if the authority had not expired.
15 THAT, in substitution for all existing authorities, the
Company be generally and unconditionally authorised in
accordance with s701 of the Companies Act 2006 to make
market purchases, within the meaning of s693 of the
Companies Act 2006, of its ordinary shares of 25p each.
The directors may make such purchases on such terms
and in such manner as they may from time to time
determine, provided that:
(a) the maximum number of ordinary shares that
may be purchased shall be 14.99% of the
Company’s issued ordinary share capital at the
date of the passing of this resolution, excluding
shares held in Treasury. This would be equivalent
to 8,171,103 ordinary shares by reference to the
Company’s issued ordinary share capital,
excluding shares held in Treasury at the date of
this Notice;
(b) the minimum price, exclusive of expenses, which
may be paid for an ordinary share shall be 25p,
being the nominal value of an ordinary share;
(c) the maximum price, exclusive of expenses, which
may be paid for an ordinary share shall not
exceed the higher of:
(i) 105% of the average of the middle market
quotations for the ordinary shares, as taken from
the London Stock Exchange Daily Official List for
the five business days immediately preceding the
date of purchase; and
(ii) the higher of the last independent trade and the
highest current independent bid on the London
Stock Exchange;
(d) this authority shall expire on the earlier of the
conclusion of the next annual general meeting of
the Company after the passing of this resolution or,
if earlier, 15 months from the date of the passing of
this resolution, unless renewed before that time;
(e) the Company may, before this authority expires,
enter into a contract to purchase ordinary shares
under this authority which will or may be
executed wholly or partly after the authority
expires. The Company may purchase ordinary
shares pursuant to any such contract; and
(f) any ordinary shares purchased under this
authority shall be cancelled or, if the directors so
determine, held, sold, transferred or otherwise
dealt with as Treasury shares in accordance with
the Companies Act 2006.
16 THAT a general meeting other than an annual general
meeting may be called on not less than 14 clear days’
notice, such authority to expire at the conclusion of the
next annual general meeting of the Company.
17 THAT the amended Articles of Association of the
Company, in the form made available for inspection as
described in this Notice, be approved and adopted as
the Company’s Articles of Association with effect from
the conclusion of the annual general meeting, in
substitution for, and to the exclusion of, the existing
Articles of Association.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
29 July 2026
Registered office:
201 Bishopsgate, London EC2M 3AE
MOORGATE
BISHOPSGATE
PRIM ROSE ST.
WORSHIP STREET
201 Bishopsgate
London EC2M 3AE
LIVERPOOL
STREET
STATION
APPO LD ST.
SUN STREET
BROADGATE
CIRCLE
FINSBURY PAVE.
EARL ST.
WORSHIP STREET
ROPEMAKER ST REET
LIVERPOOL ST
LONDON WALL
WILSON ST.
BISHOPSGATE
GREAT EASTERN ST.
COMMERCIAL ST.
SHOREDITCH
HOUNDSDITCH
AL DGATE
MIDDLESEX
STREET
CHISWELL STREET
SOUTH PLACE
ELDON ST.
FINSBU RY
CIRCUS
CITY ROAD
FINSBURY SQ .
FINS BURY SQ .
CLIFTON ST.
SPITALFIELDS
MARKET
FOLGATE ST.
NORTON
MIDDLESEX ST.
BRUS HFIELD STREET
APPOLD ST.
The 2026 AGM will be held at 201 Bishopsgate,
London EC2M 3AE. It is a few minutes’ walk from
Liverpool Street Station and from Moorgate Station.
AGM venue
Governance
Financial
Statements
Additional
Information AGM Notice
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
AGM Notice
Explanation of AGM resolutions
The information set out below is an explanation of the
business to be considered at the 2026 Annual General
Meeting (“AGM”). Shareholders are welcome to attend the
AGM in person. The Company also provides a facility for
shareholders to watch the meeting remotely by
videoconference. Shareholders wishing to watch the
meeting remotely should register in advance at
www.janushenderson.com/hsl-agm. Shareholders
watching the meeting remotely will not be able to vote
through the videoconference facility and are therefore
encouraged to appoint a proxy in advance of the AGM.
Questions may be submitted in advance of the meeting
by email to itsecretariat@janushenderson.com, or
during the meeting via the online Q&A feature.
Resolutions 1 to 13 are proposed as ordinary resolutions.
This means that for each of those resolutions to be
passed, more than half of the votes cast must be in favour
of the resolution. Resolutions 14 to 17 are proposed as
special resolutions. This means that for each of those
resolutions to be passed, at least three quarters of the
votes cast must be in favour of the resolution.
Resolution 1: Annual Report and audited
financial statements
The directors are required to present the Annual Report
and audited financial statements of the Company for
the year ended 31 May 2026 (the “Annual Report”).
Shareholders will have the opportunity to ask questions
on the Annual Report at the AGM.
Resolutions 2 and 3: Directors’ Remuneration
Report and Policy
Shareholders are asked to approve the Directors’
Remuneration Report for the year ended 31 May 2026 and
the Directors’ Remuneration Policy. The Directors’
Remuneration Report, which includes the Directors’
Remuneration Policy, is set out on pages 56-57 of the
Annual Report. The vote on the Directors’ Remuneration
Report is advisory and does not affect remuneration
already paid or payable to any director. The vote on the
Directors’ Remuneration Policy is binding. The current
policy was last approved at the AGM in 2023.
Resolution 4 : Increase to limit on aggregate
directors’ fees
This resolution seeks approval to increase the maximum
aggregate fees payable to the directors. The current
limit is £250,000 per annum, agreed by shareholders in
2020. The proposed increase to £300,000 is intended to
provide appropriate headroom for future fee adjustments
and to ensure that the fee cap remains aligned with the
Company’s size, governance requirements and market
practice for investment trusts of a similar scale.
The Directors’ Remuneration Policy is subject to a separate
binding vote by shareholders (resolution 3). Any future fee
increases will continue to be considered carefully in the
context of the Company’s performance, workload and
responsibilities, and prevailing market levels.
Resolution 5: Final dividend
The directors recommend a final dividend of 21.5 pence
per ordinary share. If approved, the dividend will be paid
on 23 October 2026 to shareholders on the register at
close of business on 2 October 2026. The shares will be
quoted ex-dividend on 1 October 2026.
Resolutions 6 to 10: Re-appointment of
directors
In accordance with the AIC Corporate Governance Code,
all directors stand for annual re-appointment by
shareholders. In May 2026, the Nomination Committee
reviewed the performance, contribution and time
commitment of each director standing for re-appointment
and concluded that each continued to make an effective
contribution to the Board and remained able to devote
sufficient time to their role.
The biographies of each director, including details of their
skills and experience, are set out on pages 40-41 of the
Annual Report. All directors standing for re-appointment
held office throughout the year under review.
Resolutions 11 and 12: Statutory auditor
In accordance with s489 and s492 of the Companies Act
2006, shareholders are asked to approve the re-
appointment of the Company’s auditor and to authorise the
Audit and Risk Committee, on behalf of the Board, to
determine the auditor’s remuneration. Resolution 11 relates to
the re-appointment of Forvis Mazars LLP as the Company’s
auditor and resolution 12 authorises the Audit and Risk
Committee to determine the auditor’s remuneration. Further
information, including the audit effectiveness review and
independence considerations, is set out in the Audit and Risk
Committee Report on pages 51.
Resolutions 13 and 14: Authority to issue new
shares and disapply pre-emption rights
At the 2025 AGM, shareholders granted the directors
authority to allot ordinary shares and to disapply pre-
emption rights in respect of certain allotments. No shares
have been allotted under that authority, which will expire
at the forthcoming AGM.
Resolution 13 seeks authority for the directors to allot
ordinary shares, and to grant rights to subscribe for or
convert any security into ordinary shares, up to an
aggregate nominal amount of £1,362,759, representing
approximately 10% of the Company’s issued ordinary
share capital, excluding Treasury shares, as at the latest
practicable date before publication of this Notice.
Resolution 14 seeks authority for the directors to allot
ordinary shares, or to sell ordinary shares held in Treasury,
for cash without first offering them to existing shareholders
in proportion to their holdings. This authority is limited to
an aggregate nominal amount of £1,362,759, representing
approximately 10% of the Company’s issued ordinary
share capital, excluding Treasury shares. The directors will
not use this authority to issue shares on a non-pre-
emptive basis unless the issue is expected to be accretive
to net asset value per share.
Notice of Annual General Meeting continued
100
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notice of Annual General Meeting continued
The directors will use these authorities only where they
consider it to be in the best interests of shareholders as a
whole. In particular, ordinary shares will only be issued,
and Treasury shares will only be sold, at a price at or
above the prevailing net asset value per share at the time
of issue or sale. The authorities will expire at the conclusion
of the next AGM or, if earlier, 15 months from the date of
the passing of the relevant resolution.
Resolution 15: Repurchase of the Company’s
ordinary shares
At the general meetings on 7 October 2025 and 4 March
2026, shareholders granted the Company authority to
repurchase up to 9,389,123 ordinary shares and 8,626,814
ordinary shares respectively for cancellation or to be held
in Treasury. As at 27 July 2026, being the latest practicable
date prior to approval of the AGM Notice, 8,125,552 ordinary
shares had been bought back under those authorities.
Resolution 15 renews the Company’s authority to make
market purchases of up to 14.99% of the ordinary shares in
issue, excluding Treasury shares, as at the date of passing
of the resolution. The authority would allow any ordinary
shares purchased by the Company to be cancelled or
held in Treasury.
The Board would use this authority only where it considers
that doing so would be in the best interests of
shareholders as a whole, including where it would
enhance the net asset value per ordinary share. The
authority will expire at the conclusion of the next AGM or, if
earlier, 15 months from the date of the passing of the
resolution.
Resolution 16: Notice period
The Companies Act 2006 requires a company to give at
least 21 clear days’ notice of a general meeting unless
certain conditions are met. These include shareholder
approval for a shorter notice period and the availability of
electronic proxy voting. Resolution 16 seeks to preserve the
Company’s ability to call general meetings (other than
AGMs) on not less than 14 clear days’ notice.
The Board is of the view that it is in the Company’s
interests to retain the ability to call general meetings,
other than AGMs, on not less than 14 clear days’ notice
where the provisions of the Companies Act 2006 and the
Company’s articles allow. The Board would use this
authority to provide flexibility only when merited and
would not use it as a matter of routine. The Board intends
to seek a renewal of such authority at subsequent AGMs.
Resolution 17: Amendment to the articles of
association (the “Articles”)
The Board is proposing to make a small number of
amendments to the Articles which are intended to align
with current market practices, improve the Company’s
corporate governance, introduce standard protections
in relation to US securities law compliance and include
additional protections for the general body of
shareholders.
The principal changes introduced by the Articles are
summarised below:
1. General modernisation and simplification
Certain provisions which are no longer relevant to a
closed-ended investment company have been removed,
and others updated for clarity and consistency, helping to
ensure that the Articles remain up to date.
2. Compliance with regulatory requirements
(including US securities laws)
New provisions enable the Company to request
information from shareholders where necessary to
comply with applicable legal and regulatory
requirements, including US securities laws, or to avoid
potential legal, regulatory or tax disadvantages, thereby
helping to protect the Company and its shareholders
from regulatory risk.
3. Board continuity
New provisions address the unlikely scenario where all
directors standing for re-appointment at an annual
general meeting are not re-elected, by providing a limited
backstop mechanism to ensure that the Company
continues to have the minimum number of directors
required to operate, pending a further shareholder
meeting.
4. Limit on number of directors
The maximum number of directors permitted has been
reduced from 15 to 10, reducing the risk of the Board being
expanded significantly over a short period in a manner
that may not reflect the interests of shareholders as a
whole.
5. General meetings – electronic and hybrid
meetings
The provisions relating to general meetings have been
updated to make clear that meetings may be held at
a physical location, on a hybrid basis or wholly by
electronic means, providing the Company with flexibility
to adapt to future developments while continuing to
support shareholder participation and engagement.
The Board has no intention of moving to wholly electronic
meetings at this time. The ability to hold a general meeting
through wholly electronic means is intended as a solution to
be adopted as a contingency to ensure the continued
smooth operation of the Company in extreme operating
circumstances where physical meetings cannot reasonably
be held. Nothing in the amended Articles will prevent the
Company from holding physical shareholder meetings.
6. Untraced shareholders
The provisions relating to untraced shareholders have
been modernised by reducing the period of inactivity
required before a shareholder may be treated as
untraced from 12 years to six years, and by replacing
newspaper advertisements with more effective tracing
methods and direct notice, thereby reducing
administrative cost while maintaining appropriate
safeguards. The Articles also permit unclaimed proceeds
to be transferred to a dormant assets scheme (which
retains sufficient reserves to meet repayment claims and
distributes surplus funds for charitable and community
purposes across the UK) in accordance with applicable
legislation, while preserving the right of former holders to
reclaim their entitlement.
Governance
Financial
Statements
Additional
Information AGM Notice
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AGM Notice
7. Dividend payment and administration
Provisions relating to dividend payments have been
updated to reflect current practice, with electronic
payments becoming the default and cheque payments
retained as a fallback, supporting more efficient, reliable
and cost-effective dividend administration.
8. Nature of the Company
A new provision has been included to confirm that the
Company shall carry on business as an investment trust,
helping to safeguard its established purpose, tax status
and ensuring that any formal change would require
shareholder approval.
9. Director appointment disclosures
Additional transparency requirements have been
introduced in relation to directors proposed by
shareholders and those appointed following a
requisitioned meeting, requiring disclosure of relevant
relationships or arrangements and improving visibility for
shareholders.
The Articles also include a number of other minor or
technical amendments.
A copy of the Articles, together with a comparison against
the current Articles, is available for inspection at the
Company’s registered office and on its website.
The Board considers that all resolutions to be proposed at
the AGM are in the best interests of the Company and its
shareholders as a whole, and the Board unanimously
recommends that shareholders vote in favour of each
resolution, as the directors intend to do in respect of their
own beneficial holdings.
Notes to the Notice of AGM
1. Voting record date
Only those shareholders registered in the register of
members of the Company at close of business on Friday,
2 October 2026 (the “voting record date”) shall be entitled
to vote at the AGM in respect of the number of voting
rights registered in their name at that time. Changes to
entries on the register of members after that time shall be
disregarded in determining the rights of any person to
attend, speak and vote at the AGM.
If the AGM is adjourned for no more than 48 hours after
the original time, the same voting record date will apply
for determining the entitlement of members to attend,
speak and vote at the adjourned meeting and the
number of votes they may cast. If the AGM is adjourned
for more than 48 hours, the voting record date will be
close of business on the day which is two days, excluding
non-working days, before the day of the adjourned
meeting, or such other time as may be specified in the
notice of the adjourned meeting.
2. Right to attend and vote
Holders of ordinary shares are entitled to attend, speak
and vote at the AGM and at any adjournment. On a poll,
each shareholder has one vote for each ordinary share
held. On a show of hands, each shareholder present in
person and each duly appointed proxy has one vote.
If a proxy is appointed by more than one member and all
such members have instructed the proxy to vote in the
same way, the proxy will only be entitled on a show of
hands to vote “for” or “against” as applicable. If a proxy is
appointed by more than one member, but such members
have given different voting instructions, the proxy may on
a show of hands vote both “for” and “against” in order to
reflect the different voting instructions.
On a poll all or any of the voting rights of the members
may be exercised by one or more duly appointed proxies.
However, where a member appoints more than one proxy,
s285(4) of the Companies Act 2006 does not authorise the
exercise by the proxies taken together of more extensive
voting rights than could be exercised by the member.
Corporate representatives are entitled to attend and vote
on behalf of the corporate member in accordance with
s323 of the Companies Act 2006. Shareholders are invited
to send their letters of corporate representation in advance
of the AGM to itsecretariat@janushenderson.com.
3. Right to appoint proxies
A member entitled to attend, speak and vote at the AGM
may appoint one or more proxies to exercise all or any of
their rights to attend, speak and vote on their behalf. A
proxy need not be a member of the Company. A member
may appoint more than one proxy provided that each
proxy is appointed to exercise the rights attached to a
different share or shares held by that member.
Persons nominated to receive information rights have
been sent this Notice of AGM and are hereby informed, in
accordance with s149(2) of the Companies Act 2006, that
they may have the right under an agreement with the
registered member by whom they are nominated to be
appointed, or to have someone else appointed, as a proxy
for this AGM. If they have no such right or do not wish to
exercise it, they may have a right under such an
agreement to give instructions to the member as to the
exercise of voting rights. Nominated persons should
contact the registered member by whom they were
nominated in respect of these arrangements. The
statement of rights of shareholders for the appointment of
proxies does not apply to nominated persons.
If you are an institutional investor you may also be able to
appoint a proxy electronically via the Proxymity platform, a
process which has been agreed by the Company and
approved by the Registrar. For further information
regarding Proxymity, please go to www.proxymity.io.
Your proxy must be lodged by 11.30 am on Friday,
2 October 2026 to be considered valid.
Before you can appoint a proxy via this process you will
need to have agreed to Proxymity’s associated terms and
conditions. It is important that you read these carefully as
you will be bound by them and they will govern the
electronic appointment of your proxy.
4. Receipt and termination of proxies
To be valid, the enclosed Form of Proxy must be received
by the Company’s Registrar (Computershare Investor
Services PLC, The Pavilions, Bridgwater Road, Bristol BS99
6ZY) before 11.30 am on Friday, 2 October 2026 (or, in the
Notice of Annual General Meeting continued
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Notice of Annual General Meeting continued
case of an adjournment, no later than 48 hours before the
time fixed for the holding of the adjourned meeting).
As an alternative to completing and returning the printed
Form of Proxy, you may submit your proxy electronically
by accessing www.investorcentre.co.uk/eproxy. For
security purposes, you will be asked to enter the control
number, your Shareholder Reference Number (“SRN”) and
personal identification number (“PIN”) to validate the
submission of your proxy online. The control number and
members’ individual SRN and PIN numbers are shown on
the Form of Proxy.
Shareholders who intend to watch the AGM remotely are
encouraged to appoint a proxy in advance, as voting will
not be available through the videoconference facility.
A member may terminate a proxy’s authority at any time
before the commencement of the AGM. Termination
must be provided in writing and submitted to the
Company’s Registrar.
In accordance with the Company’s Articles, in determining
the deadline for receipt of proxies, no account shall be
taken of any part of a day that is not a working day.
5. Electronic receipt of proxies
CREST members who wish to appoint a proxy or proxies
by following the CREST electronic proxy appointment
service may do so for the AGM and any adjournment(s)
thereof by using the procedures described in the CREST
manual, which is available to download from the
Euroclear website www.euroclear.com. CREST personal
members or other CREST sponsored members, and those
CREST members who have appointed a voting service
provider(s), should refer to their CREST sponsor or voting
service provider(s), who will be able to take the
appropriate action on their behalf.
In order for a proxy appointment made by means of
CREST to be valid, the appropriate CREST message (a
“CREST Proxy Instruction”) must be properly authenticated
in accordance with Euroclear UK & Ireland Limited’s
specifications and must contain the information required
for such instructions, as described in the CREST manual.
The message must be transmitted so as to be received by
the registrar (ID 3RA50) by the latest time for receipt of
proxy appointments specified in note 4 above. For this
purpose, the time of receipt will be taken to be the time
(as determined by the timestamp applied to the message
by the CREST applications host) from which the issuer’s
agent is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST. After this time, any
change of instructions to proxies appointed through
CREST should be communicated to the appointee through
other means.
CREST members and, where applicable, their CREST
sponsors or voting service provider(s) should note that
Euroclear UK & Ireland Limited does not make available
special procedures in CREST for any particular messages.
Normal system timings and limitations will therefore
apply in relation to the input of CREST Proxy Instructions. It
is the responsibility of the CREST member concerned to
take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a
voting service provider(s) to take(s)) such action as shall
be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this
connection, CREST sponsors or voting service providers
are referred, in particular, to those sections of the CREST
manual concerning practical limitations of the CREST
system and timings.
The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.
6. Communication with the Company
Members must not use any electronic address provided
either in the Notice or in any related documents (including
the form of proxy) to communicate with the Company for
any purpose other than those expressly stated.
7. Questions at the AGM
S319A of the Companies Act 2006 requires the Company
to answer any question raised at the AGM which relates to
the business being considered at the meeting, although
no answer need be given if:
(a) to do so would interfere unduly with the preparation
for the AGM or involve the disclosure of confidential
information;
(b) the answer has already been given on the
Company’s website; or
(c) it is undesirable in the interests of the Company or
the good order of the AGM that the question be
answered.
8. Members’ statement of audit concerns
Under s527 to s529 of the Companies Act 2006, members
meeting the statutory threshold may require the
Company to publish on its website a statement setting
out any matter relating to:
(a) the audit of the Company’s accounts, including the
auditor’s report and the conduct of the audit, that is
to be raised at the AGM; or
(b) any circumstances connected with an auditor of
the Company ceasing to hold office since the
previous meeting at which annual accounts and
reports were laid.
The Company may not require the members requesting
publication to pay its expenses. Any statement published
on the website must also be sent to the Company’s
auditor no later than the time at which the statement is
made available on the website. The business which may
be dealt with at the AGM includes any statement that the
Company has been required to publish on its website.
9. Total voting rights
As at 27 July 2026, being the latest practicable date before
publication of this Notice, the Company’s issued ordinary
share capital consisted of 74,385,131 ordinary shares of 25p
each, of which 19,874,768 ordinary shares were held in
Treasury. Accordingly, the total number of voting rights in
the Company as at that date was 54,510,363. Each
ordinary share carries one vote, except for ordinary shares
held in Treasury, which do not carry voting rights.
Governance
Financial
Statements
Additional
Information AGM Notice
103
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
AGM Notice
10. Documents available for inspection
Copies of the directors’ letters of appointment and the
proposed amended Articles of Association, marked to
show the proposed changes, will be available for
inspection at the registered office of the Company, 201
Bishopsgate, London EC2M 3AE, during normal business
hours on any weekday, excluding public holidays, from the
date of this Notice until the close of the AGM. They will also
be available for inspection at the place of the AGM for at
least 15 minutes before and during the AGM. No directors’
service contracts are in place. Shareholders who are
unable to attend the AGM in person and wish to inspect
the documents should contact the Corporate Secretary at
itsecretariat@janushenderson.com. The proposed
amended Articles of Association will also be available to
view via the National Storage Mechanism (https://data.
fca.org.uk/#/nsm/nationalstoragemechanism).
11. Members’ power to circulate resolutions
Under s338 and s338A of the Companies Act 2006,
members meeting the statutory threshold may require
the Company to:
(a) give notice of a resolution to be moved at the AGM;
and/or
(b) include in the business of the AGM any matter (other
than a proposed resolution) which may properly be
included.
A resolution may properly be moved, or a matter may
properly be included in the business of the AGM, unless:
(a) in the case of a resolution only, it would, if passed, be
ineffective, whether by reason of inconsistency with
any enactment or the Company’s constitution or
otherwise;
(b) it is defamatory of any person; or
(c) it is frivolous or vexatious.
Any such request must identify the resolution or matter of
business, be authenticated by the person or persons
making it, provide evidence of the number of shares held,
be received by the Company not later than six clear
weeks before the AGM and, in the case of a matter of
business to be included, be accompanied by a statement
setting out the grounds for the request. Requests may be
sent in hard copy to the Corporate Secretary, The
Henderson Smaller Companies Investment Trust plc,
201 Bishopsgate, London EC2M 3AE or by email to
itsecretariat@janushenderson.com.
12. Website
The Annual Report, which contains this Notice of AGM,
is available on the Company’s website at
www.hendersonsmallercompanies.com.
Notice of Annual General Meeting continued
104
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Corporate information
History
The Henderson Smaller Companies Investment Trust plc
(the “Company”) has a long heritage, having been
incorporated on 16 December 1887 as Trustees Executors
and Securities Insurance Corporation, Limited. Over more
than 135 years, the Company has evolved from its origins
as an investment and trustee business into a specialist
investment trust focused on UK smaller companies.
The Company has traded under several names during its
history, becoming The Trustees Corporation, Limited in 1917,
TR Trustees Corporation plc in 1982, TR Smaller Companies
Investment Trust plc in 1990 and The Henderson Smaller
Companies Investment Trust plc in 1997.
Henderson acquired Touche Remnant, the Company’s
investment manager, in 1992. In 1999, the Company refined
its investment focus to concentrate exclusively on UK
smaller companies, which remains its core investment
approach today. Henderson merged with Janus Capital in
2017.
Registered office
201 Bishopsgate
London EC2M 3AE
Service providers
Alternative Investment Fund Manager
Janus Henderson Fund Management UK Limited
201 Bishopsgate
London EC2M 3AE
Corporate Secretary
Janus Henderson Secretarial Services UK Limited
201 Bishopsgate
London EC2M 3AE
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1057
Email: webcorres@computershare.co.uk
Investors with share certificates (i.e. not those in
a share plan or ISA) can check their holdings at
www.investorcentre.co.uk
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Broker
Deutsche Numis
Deutsche Bank AG
21 Moorfields
London EC2Y 9DB
Independent Auditor
Forvis Mazars LLP
30 Old Bailey
London EC4M 7AU
Financial calendar
Final dividend ex-dividend date 1 October 2026
Final dividend record date 2 October 2026
Annual general meeting 6 October 2026
Final dividend payable 23 October 2026
Half-year results January 2027
Interim dividend payable March 2027
Information sources
For more information about the Company, visit the
website at www.hendersonsmallercompanies.com.
This includes factsheets, interviews, current information
on the Company and up-to-date share price and net
asset value details.
To sign up for expert insights about investment trusts,
updates from our fund managers as well as AGMs
please visit this page:
www.janushenderson.com/en-gb/investor/subscriptions
Follow the Janus Henderson Investment Trusts on
LinkedIn – Janus Henderson Investment Trusts, UK.
Investing
Shares can be purchased in the market via a
stockbroker or through share dealing platforms. They
can also be held through share plans, ISAs or pensions.
Links to various providers are included on the website.
Potential investors are reminded that the value of
investments and the income from them may go down
as well as up and investors may not receive the full
amount invested. Tax benefits may vary as a result
of statutory changes and their value will depend
on individual circumstances.
Governance
Financial
Statements
Additional
Information AGM Notice
105
The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Strategic
Report
AGM Notice
Warning to shareholders
Shareholders should be wary of unsolicited telephone calls or correspondence concerning investment matters.
These are often from overseas-based “brokers” offering to sell shares or to buy shares at a discount. Such
approaches may be persistent and persuasive and may involve high-risk or worthless investments. It is unlikely
that the Company or its registrar, Computershare, would make unsolicited telephone calls to shareholders. Any
such calls would relate only to official documentation already issued and would not involve investment advice. If
you are in any doubt about an unsolicited call, please contact the Corporate Secretary using the details provided.
You can also check the FCA Warning List at www.fca.org.uk/scamsmart.
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The Henderson Smaller Companies Investment Trust plc Annual Report 2026
Contents
Strategic Report
1 About the Company
2 At a glance
3 Why invest in UK smaller companies?
4 Approach to UK smaller companies
5 Manager: Janus Henderson Investors
6 Performance summary
8 Chair’s Statement
12 Fund Managers’ Report
19 Portfolio
22 Case studies
24 Business model
27 Principal risks and uncertainties
29 Measuring the Company’s performance
31 Section 172 Statement
33 Board decision making
34 ESG Report
38 Viability Statement
Governance
40 Directors and Fund Managers
43 Corporate Governance Report
49 Audit and Risk Committee Report
52 Nomination Committee Report
55 Management Engagement Committee
Report
56 Directors’ Remuneration Report
59 Directors’ Report
62 Statement of Directors’ Responsibilities
Financial Statements
64 Independent Auditor’s Report
70 Statement of Comprehensive Income
71 Statement of Changes in Equity
72 Balance Sheet
73 Statement of Cash Flows
74 Notes to the Financial Statements
Additional Information
91 Glossary
93 Alternative performance measures
95 General shareholder information
96 Historical record
AGM Notice
98 Notice of Annual General Meeting
105 Corporate information
www.hendersonsmallercompanies.com
Annual General Meeting (AGM)
The Board welcomes shareholders to attend the AGM at
11.30 am on 6 October 2026 either in person or online. Scan the
QR code for more details and to register your attendance.
Keeping in touch
Scan the QR code to receive the latest Company updates,
market insights, event invitations and more.
Please send any general enquiries about the Company to
itsecretariat@janushenderson.com.
A video in which the Fund Manager
discusses the Company’s results and
performance during the year will be
available from 30 July 2026 at
www.hendersonsmallercompanies.com.
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.hendersonsmallercompanies.com
The Henderson Smaller Companies Investment Trust plc
Registered as an investment company in England and Wales
Registered office
201 Bishopsgate,
London EC2M 3AE
ISIN/SEDOL
Ordinary shares:
GB0009065060 / 0906506
Companies House
registration number
00025526
London Stock Exchange
(TIDM) Code
HSL
Global Intermediary
Identification Number (GIIN)
WZD8S7.99999.SL.826
Legal Entity Identifier (LEI)
213800NE2NCQ67M2M998
Designed by Instinctif. Typeset by 2112 Communications, London.
Printed by Paragon.
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JHI9226/26
The Henderson Smaller Companies
Investment Trust plc
Investing in the growth potential of smaller UK companies
Annual Report 2026
The Henderson Smaller Companies Investment Trust plc – Annual Report 2026