Chair's Statement
The financial information set out below does not constitute the company's statutory accounts for the years ended 30 April 2025 or 30 April 2024 but is derived from those accounts. Statutory accounts for 2024 have been delivered to the registrar of companies, and those for 2025 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The full Annual Report and Financial Statements for the Year Ending 30 April 2025 can be found here.
Introduction
On behalf of myself and the Board I am pleased to present to you the Annual Report of the Company for the financial year ended 30 April 2025 (FY25).
With the recent investment trust market challenges and meeting requisitions, it would be remiss not to reflect that the Board is conscious of the interest in the investment trust industry of activist Shareholders. The Board has reflected on and continually monitor the Shareholder register and position of the Company. While the Board does not feel there are any current concerns, the Board is mindful of acting in the best interests of Shareholders and stakeholders at all times and we would like to reassure Shareholders of this.
Performance
The Manager’s report is provided on pages 16 to 35 in the full Annual Report and gives an overview of the year past and the outlook for the near future.
The financial year under review has been a challenging period for the Company with the technology sector experiencing volatility following the arrival of DeepSeek’s potentially low-cost AI Model, President Trump’s Administration and the uncertainty surrounding the introduction of US Tariffs and retaliatory tariffs as well as other geopolitical and macro-economic factors. During the year under review, your Company’s net asset value (NAV) per share rose from 315.41p to 325.20p, an increase of 3.1%, while the Benchmark increased 5.1% in Sterling terms over the same period. Underperformance came largely from an overweight position in the small cap sector and from difficult stock selection within it. The annualised performance returns of the Company over the past five and ten years were 13.6% and 18.4% respectively, which compare to total returns from our benchmark of 16.8% and 18.8%.
While we await the longer-term impact of President Trump’s administration, the Board remains optimistic about the overall outlook for the technology sector. We continue to believe that there are interesting developments and long-term opportunities within our sector, particularly with the developments in agentic Artificial Intelligence (AI); this is discussed further in the Manager’s Report.
Catherine Cripps
Chair
Discount Management
The Company’s discount widened during the financial year under review, ending the year at 11.3% compared to 7.4% at the end of FY24. It averaged 10.4% over the financial year. The Board actively monitors the discount at which the Company’s ordinary shares trade in relation to the Company’s underlying NAV and, whilst the Board does not have a formal discount policy, it will continue to exercise its discretion to buy back shares at a discount in normal market conditions. Equally, the Board will also use discretion to issue shares at a premium.
Utilising this discretion, we repurchased a total of 36,208,671 ordinary shares (representing 2.6% of the issued share capital) in the year under review at an average price of 318.19 pence per share and at an average discount of 10.4% to the prevailing NAV. Following the year end, and up to close of business 4 July 2025, the Company has bought back a further 11,960,588 shares. While purchase levels have been relatively low on an individual transaction basis, we should note that this activity does not preclude the Manager determining that a more significant amount than usual on any one day should be purchased. Such a decision may be influenced by, in the Manager’s view, there being a particular investment opportunity best accessed through buying shares in the Company rather than buying individual securities.
Fees
As previously reported in the Company’s Half Year results, we concluded our formal three-yearly review of the management fee arrangements and were very pleased to have achieved an agreement with the Manager for an overall reduction to the base management fee as well as the complete removal of the performance fee. The revised arrangements came into effect on 1 May 2025.
New fee arrangements:
The new base management fee is now structured over two tiers and the performance fee was removed entirely:
• Tier 1: 0.75% on NAV up to and including £2bn
• Tier 2: 0.60% on NAV above £2bn
Please refer to page 58 of the full Annual Report for further information on fees.
Current Base Management Fee Arrangement:
effective 1 May 2022
| 0.80% | £0 - £2bn |
| 0.70% | £2bn - £3.5bn |
| 0.60% | over £3.5bn |
Base Management Fee Arrangement:
to 30 April 2022
| 1% | Up to £800m |
| 0.85% | £800m - £1.6bn |
| 0.80% | £1.6bn - £2.00bn |
| 0.70% | over £2.0bn |
Board Composition
As reported in the Half-Year Chair’s Statement, a recruitment process was undertaken in the latter half of 2024 in order to identify and appoint a new non-executive director following the retirement of Charlotta Ginman who reached her nine-year tenure in September 2024. We were delighted to welcome Adiba Ighodaro to the Board with effect from 3 December 2024. Adiba brings a considerable expertise in legal and investor matters and has various Board roles already. She will stand for election by Shareholders at the AGM to be held in September 2025. Further information on the recruitment process undertaken is contained within the Report of the Nomination Committee on page 92 and Adiba’s background and experience is on page 11 in the full report.
The Board continues to work on longer-term succession planning as each of the Directors approach their nine year tenure on the Board. The Board is in early-stage discussions and are working to finalise a managed programme of recruitment, appointment and retirement which we expect will be carried out during 2026 and will conclude by Q4 2027. Further information will be shared when available.
There have been no other changes to the membership of the Board during the year under review. The Directors’ biographical details are available on the Company’s website and are provided on pages 10 and 11 in the full report.
Directors’ Fees
As detailed further within the Remuneration Committee Report in the full report, an annual fee review was undertaken to ensure that the remuneration paid to Directors remains attractive, competitive and in line with those of its peers in order to attract and retain the best candidates. The Board usually favours modest increases year-on-year (where applicable) and with effect from 1 May 2025, the Directors’ base remuneration increased by 2.8% to £37,000 and the remuneration of the Chair to £67,200. The supplement for the Audit Committee Chair was increased to £9,000 to reflect the additional time required in connection with increased audit regulation and overall responsibility of the Chair of the Audit Committee, whilst the supplement for the Senior Independent Director remained unchanged at £4,200.
In aggregate, the Directors fees for FY26 will be £265,400. The maximum level currently provided for in the Company’s Articles of Association is £350,000 which provides headroom for succession planning and appointment overlap should it be necessary.
Current Base Management Fee Arrangement:
effective 1 May 2022
| 0.80% | £0 - £2bn |
| 0.70% | £2bn - £3.5bn |
| 0.60% | over £3.5bn |
Base Management Fee Arrangement:
to 30 April 2022
| 1% | Up to £800m |
| 0.85% | £800m - £1.6bn |
| 0.80% | £1.6bn - £2.00bn |
| 0.70% | over £2.0bn |
Annual General Meeting
We are pleased to confirm that the Company’s AGM will be held on 10 September 2025 at 2:30pm at the offices of Herbert Smith Freehills Kramer, Exchange House, Primrose Street, London, EC2A 2EG. We look forward to welcoming Shareholders to the meeting, at which they will receive a presentation from the Investment Manager and his team and Shareholders will also have the opportunity to ask questions and meet the Board; light refreshments will be available following the meeting.
The Notice of AGM will shortly be provided to Shareholders and will also be available on the Company’s website. Shareholders are encouraged to read the detailed explanations on the formal business and the resolutions to be proposed at the AGM contained within the Shareholder Information section on pages 141 to 142 of the full report as well as the Notice of AGM.
In order to ensure that Shareholders are able to follow the proceedings of the AGM without attending in person, the Company will also broadcast the meeting online via zoom videoconferencing. However, please note that Shareholders joining via zoom will not be able to vote online during the AGM and are therefore encouraged to submit their votes via proxy, as early as possible. All formal resolutions will be voted on by way of a poll. In addition to voting on resolutions proposed at the AGM, we also welcome Shareholder engagement with the Board and the Investment Manager. As such, the Board invites Shareholders to not only attend the AGM in person but to submit questions in writing to which we will respond, as far as possible, ahead of the AGM date. Please send your questions to cosec@polarcapital.co.uk with the subject heading PCTT AGM.
Continuation Vote
The Company has within its corporate structure the requirement to hold a continuation vote every five years. The last continuation vote was held in September 2020, for which 100% of the votes cast were in favour, and the next continuation vote will be held at the forthcoming AGM on 10 September 2025.
Ahead of the upcoming continuation vote, the Board, Investment Manager and Corporate Broker have been seeking Shareholder views including any concerns and an indication of whether they were likely to vote in favour of the Company’s continuation. No comments adverse to the continuation vote have been received to date and the Shareholders who provided feedback were minded, at the time of writing, to vote in favour of the resolution for the Company to continue. Shareholders highlighted the contact between the Investment Manager and Shareholders, the long term investment horizon of many Shareholders, the diversification of the Company’s register of Shareholders and the Company’s inclusion on many buy lists at private wealth managers and retail platforms. As such, the Directors are confident that the continuation vote will be passed at the AGM to be held on 10 September 2025 and therefore the Company will continue in existence. As such, the Board is supportive of the Company continuing in its current form and recommends Shareholders vote in favour of continuation as indeed the Directors propose to do. The Board acknowledge that there can be no certainty that the continuation vote will be passed although, at the date of approval of these financial statements, we have no reason to believe that it will not do so.
Environmental, Social and Governance (ESG)
The Investment Manager incorporates ESG considerations into its investment process and the Board continues to engage closely with the Manager to monitor their progress and receives regular updates on the developments on the corporate side of Polar Capital’s business. As at 30 April 2025, based on MSCI ESG ratings, the portfolio and the benchmark were both A rated.
Please refer to the ESG Report on pages 46 to 51 which incorporates both the investment and corporate approaches.
Outlook
Whilst the macro-economic uncertainties remain and it is likely that market volatility will persist, we remain positive on the outlook for the sector with rapid developments in agentic AI falling into place. We look forward to the investment opportunities this brings for the sector and our portfolio, which looks well placed to benefit from these developments in the AI space. It is important to remember, however, that continuing devaluation of the US dollar could potentially cause a headwind to the performance of the Company as, in the near term, the majority of our assets are US dollar based. I encourage you to read the IM report on pages 16 to 35 in the Annual Report for a flavour of the excitement the Manager has about various themes developing within our sector.
