Monks Investment Trust PLC

Earnings Release • Jun 20, 2023

National Storage Mechanism | Additional information

RNS Number : 1990D

Monks Investment Trust PLC

20 June 2023

RNS Announcement

The Monks Investment Trust PLC (MNKS)

Legal Entity Identifier: 213800MRI1JTUKG5AF64

Results for the year to 30 April 2023

NAV (borrowings at fair value) *	(1.6%)
NAV (borrowings at par) *	(2.6%)
Share Price*	(7.0%)
Benchmark†	3.2%

Source: Refinitiv / Baillie Gifford. All figures are total return*. See disclaimer at the end of this announcement.

*      Alternative Performance Measure - see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

†      Benchmark: FTSE World Index (in sterling terms)

The following is the Preliminary Results Announcement for the year to 30 April 2023 which was approved by the Board on 19 June 2023.

Chairman's Statement

Performance

During the year the NAV total return, with borrowings calculated at fair value, was -1.6%. The share price total return was -7.0%, while the FTSE World Index returned +3.2%. This is a disappointing outcome against the backdrop of last year's declines. It is now eight years since the change in investment approach was implemented in March 2015. Since the end of March 2015, the NAV total return has been +126.7%* against the comparative index at +127.4%*. Over the same period, the share price total return was +131.3%*. Recent underperformance by growth stocks has wiped out the cumulative gains of the prior years. We are very mindful of the need to return to outperformance, in a variety of market conditions.

Share Capital

In what has been a difficult year from a performance perspective, we were pleased to issue new shares to former shareholders of The Independent Investment Trust PLC ('IIT'). The Company issued 16.7 million new ordinary shares in return for £173.1 million of IIT's assets, comprising £72.3 million cash and £100.8 million in equity investments, in accordance with the prospectus and circular published on 6 October 2022. This should be seen as an endorsement of Monks' credentials as a long-term growth vehicle for savers. Benefits to shareholders include increased scale, an estimated reduction to the ongoing charges ratio of two basis points, and cash to invest at an advantageous point in the performance cycle. The Board is delighted to welcome these new shareholders to the Company.

The Board does not have a formal discount control mechanism, however, against a backdrop of widening discounts across the investment trust sector, the Board has been active in buying shares in the open market. Having issued shares when Monks was at a premium, we feel it is our obligation to be ready buyers at a discount, not least because we believe that the market is underestimating the value in our portfolio. Buying in the Company's own shares at a discount to NAV enhances NAV per share for ongoing shareholders (approximately +0.48% in the year to end April 2023). With the shares trading at a consistent discount throughout the year, the Company bought back 13.6 million shares, costing £135.2 million. The discount to NAV with borrowings calculated at fair value was 9.7% as at 30 April 2023, compared to a discount of 4.4% at 30 April 2022.

Borrowings and Gearing

Our Investment Trust structure allows gearing, which should enhance long-term returns. The Board's strategic borrowing target is 10%. It is expected that gearing will be maintained in the range of minus 15% to plus 15%. Gearing was 7.3% at the start of the year and remained moderate throughout, ending the period at 5.3%. Our long-standing debenture matured in March 2023, leaving the Company with borrowings in the form of a revolving credit facility which was 50% drawn at 30 April 2023, and long-term debt issued to insurance companies at very attractive rates (1.8%) in 2020. The weighted average rate of interest is currently 3.4% (2022 - 2.8%), well below the current market rate.

Unlisted Exposure

We currently take comfort from the low exposure of Monks to unquoted companies, which represent 3.9% of total assets: 2.0% by way of The Schiehallion Fund, a publicly traded investment company; and 1.9% through direct investment (2022 - 6.6% combined exposure: 4.4% The Schiehallion Fund; 2.2% direct investment). These are often the fastest-growth companies, but they also have high financing needs, and that represents a risk in today's environment of tightening liquidity and competition for funds. Schiehallion's shares currently trade at a material discount to net asset value, which offers the potential for re-rating should sentiment towards growth capital improve. The Board has tested the valuations of the small number of investments we hold directly. We believe that they are realistic and that none is material to the Company. In the long run, the Manager and the Board believe that unquoted companies offer us the means to gain exposure to some of the best companies driving economic change.

Management Expenses

Monks remains competitive on fees and expenses, which helps to enhance returns to shareholders. The total ongoing charges ratio for the year to 30 April 2023 was 0.43%, up slightly from 0.40% in the prior year. The current tiered management fee scale should ensure that all shareholders will benefit from economies of scale as asset growth recovers.

Earnings and Dividend

Monks invests with the aim of maximising capital growth rather than income. All costs are charged to the Revenue Account. The Board's policy is to pay the minimum dividend required to maintain investment trust status. Retained earnings are reinvested in the portfolio. In order to build in headroom for further buybacks that may reduce the shares in issue qualifying for dividends, the Board is recommending that a single final dividend of 3.15p be paid, compared to 2.35p last year, to ensure that the amount retained for the year does not exceed that permissible.

Governance and Sustainability

The Company's Manager's investment approach - long-term, bottom-up stock picking and research - marries well with a thoughtful approach to Environmental, Social and Governance (ESG) considerations. Understanding the complexities that individual businesses face is critical as the Manager seeks to assess the impact of ESG factors on the sustainability of investee companies. A dedicated Governance and Sustainability analyst supports the portfolio managers in their engagement with investee companies, and undertakes a range of thematic portfolio analyses which helps to inform and direct engagement priorities. Areas of past focus have included climate change, tax and executive compensation. More can be found about these assessments, and the Manager's broader approach, within the Monks Stewardship Report on the Company's page of the Manager's website

The Board

Following the retirement from the Board of James Ferguson and Edward Harley, the Directors reviewed the skills, experience, and balance of tenure lengths of the remaining Board members; considered recent and anticipated developments in the commercial and regulatory landscape; and appointed Odgers Berndtson to commence the search for a new Director. The Board is delighted to welcome Dr Dina Chaya, who was appointed a Director with effect from 30 November 2022. She brings her experience as a venture capital investor, with particular expertise in life sciences and unquoted investment.

The Board is cognisant of the need to ensure regular refreshment of its composition. Having seen the departure of a number of very long-serving Directors over the last few years, the Board considers that there is an equal need to manage succession so as to ensure adequate handover periods and retention of the corporate memory. Jeremy Tigue, who joined the Board in September 2014, will offer himself for re-election at the forthcoming Annual General Meeting, his ninth since appointment, but he will not offer himself for re-election at the 2024 AGM. Given this impending retirement, and other Directors' plans, the Board has asked that I should stay in post in order to make sufficient hirings to provide a successor who could be in post for longer than a couple of years. The Board's intention is to add one further Director before Jeremy steps down next year, and another shortly after that.

Outlook

The Board's most important role is to challenge the managers on your behalf, to justify why their chosen portfolio should deliver superior returns over the long term. We remain impressed by the breadth and depth of their research, and their willingness to look across geographies and sectors to find underappreciated growth, without a dogmatic approach of narrowing the opportunities to only the fastest growth companies in relatively new parts of economies.

The Board has challenged the managers with respect to recent underperformance, which the managers write about in their report below The last two years have reminded the managers of the importance of valuation discipline. The aggressive period of monetary tightening has most certainly not reined in the pace of underlying change in economies, as the latest developments in artificial intelligence demonstrate. The managers remain focused on capturing this change, and finding the winners as the economic landscape shifts, even when overall growth is feeble. We believe that our managers have constructed a portfolio with very good long-term prospects, thoughtful diversification, and with only a relatively small premium price for much faster growth than the rest of the market will deliver. The Board shares Baillie Gifford's optimism that investors will, in due course, return to  attractive growth companies with sustainable business models.

Annual General Meeting

The Company's AGM will take place on Thursday 7 September 2023 at the Institute of Directors, Pall Mall, London, SW1Y 5ED. In order to streamline the ordinary business of the meeting and improve shareholders' experience and representation, the Board intends to hold the AGM voting on a poll, rather than on a show of hands as has been customary, so encourages all shareholders to exercise their votes at the AGM by completing and submitting a form of proxy. We recommend that shareholders monitor the Company's website at monksinvestmenttrust.co.uk where any updates regarding the meeting will be posted. Market announcements will also be made in the event of any change to the scheduled arrangements.

Should shareholders have questions for the Board or the Managers, or any queries as to how to vote, they are welcome as always to submit them by email to trustenquiries@bailliegifford.com or call 0800 917 2112.

KS Sternberg

Chairman

19 June 2023

Past performance is not a guide to future performance. Total return information is sourced from Baillie Gifford/ Refinitiv. See disclaimer at the end of this announcement. For a definition of terms used see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Managers' Report

An environment for growth

In a world where inflation and interest rates are markedly higher than in the preceding decade and the operating environment is more challenging for companies, many investors equate growth with fragility. We do not share this perspective. In contrast, we believe that the imposition of greater discipline by the market may be very helpful in separating those companies with profitable long-term business models from those which were simply the beneficiaries of a benign funding environment. This underpins our confidence in the ability of Monks' portfolio to deliver attractive long-term returns from here. The portfolio has significantly stronger aggregate balance sheets than the broader market (net debt-to-equity of 20% for the portfolio versus 50% for the FTSE World) and typically invests more in pursuit of growth (for example, the ratio of capital expenditure plus R&D to sales is 11.5% versus 9.0% for the index). This will enable our holdings to outcompete their peers over time and entrench their competitive positions.

Performance has been disappointing, and we recognise that we have made mistakes. We have taken decisive action in repositioning the portfolio and are excited by what we perceive to be a growing opportunity set. Sustainable wealth generation is a function of the underlying performance of businesses from an operational standpoint and the compounding of cashflows over long periods of time. In this regard, the Monks portfolio is in good shape - on a 3-year forward basis the portfolio's earnings are forecast to grow at more than twice the market rate. We stand confidently behind the portfolio and our investee companies' potential to drive positive returns for investors over the long term.

Performance

The current team has managed The Monks Investment Trust for eight years. Over this period, the fair value NAV total return has been +126.7%* (share price +131.3%*) compared to the comparative index (FTSE World) which returned +127.4%*. The year to April 2023 has been challenging. The fair value NAV total return was -1.6% (share price -7.0%) against the comparative index total return of +3.2%.

Following very strong performance throughout the pandemic, as many online businesses performed well, a combination of rising inflation and interest rates and the potential for weaker demand has undermined investor confidence in earlier-stage, high-growth companies. This precipitated a sharp contraction in valuations that was most acute within the 'Rapid' growth portion of the Monks portfolio. The overhang on high-growth stocks is reflected in the holdings that have detracted most from Monks' performance. The largest is The Schiehallion Fund, a closed-ended investment company managed by Baillie Gifford that invests in late-stage private companies. This makes up approximately half of Monks' modest private company exposure (3.9% of total assets). The underlying operational progress of the companies in Schiehallion's portfolio continues to be strong - average revenue growth was over +50% in 2022 - and we remain confident about its long-term potential. Elsewhere, the share prices for similarly high-growth holdings like Farfetch (online luxury goods), Cloudflare (internet performance and security) and Datadog (cloud-based systems monitoring) have all detracted.

In a vast majority of cases, we are confident that recent share price weakness does not reflect underlying progress being made by the companies we own in Monks. However, where our conviction weakened, we have been forthright in moving on. This has been the case where:

i.    Operational execution has been poor, for example, at Peloton the home fitness business, and Twilio which operates a communications software platform;

ii.    A tougher operating environment challenged our investee companies' growth prospects, as it did for Carvana, the US-based used car retailer;

iii.   A prevailing regulatory regime looked likely to negatively impact future returns, as occurred in China. We sold three holdings in the period, Tencent Music Entertainment (social media and music), KE Holdings (real estate), and Brilliance China Automotive (auto retail). The direct Chinese exposure in Monks is a modest 3.6%.

There have been companies in the portfolio for which strong operational performance has been rewarded in share price terms. Highlights include AJ Gallagher, the US insurance brokerage which has been successfully raising prices and buying competitors, Alnylam Pharmaceutical, a leader in gene silencing treatment that has been taking positive steps in broadening the application of its main treatment and MercadoLibre, the South American ecommerce platform that continues to grow its micro-financing and payments ecosystem.

Positioning and optimism

The portfolio, as characterised by Monks' three growth profiles (Stalwart, Rapid and Cyclical), has shifted materially over the past twelve months. The sharp fall in the share prices of 'Rapid' stocks and decisive moves on our part to sell holdings where operational progress has been underwhelming, has resulted in the proportion of the portfolio invested in these types of companies falling by 10 percentage points (from 40 per cent at the end of April 2022). Elsewhere, the portfolio's 'Stalwart' growth companies, with their steadier and more certain growth profile, have performed their balancing role in the portfolio well through this difficult period.

The opportunity set is broadening and the potential for insight growing. The breadth of Monk's approach leaves us well-placed to capture this. Our latest Research Agenda outlines areas of particular interest. We have been active in adding valuable long-term growth exposure to the portfolio.

-       Increased Return from Patience - during periods of fear and uncertainty, time horizons shrink and investors focus on the here and now. As long-term investors, this provides us with a heightened advantage in two areas. Firstly, in identifying secular growth companies that are facing near-term headwinds that are obscuring the potential for long-term growth. For example, we have been adding exposure to the portfolio in housing-related companies with new holdings in Floor and Décor (hard floor retailer) and Pool Corporation (swimming pool maintenance and upgrades). Secondly, the market's current intolerance of expenditure ignores the value of ongoing investments by high-growth businesses. We see the opportunity to be counter-cyclical and have added to existing positions in Amazon (ecommerce and cloud) and Meta (media and advertising). A period of more disciplined growth lies ahead and is not reflected in the valuation of the shares.

-       Infrastructure Upgrade - the world's infrastructure needs to be rebuilt and rewired to cope with more people and a changing energy mix. We are open-minded about the range of potential beneficiaries and believe we have added some attractive holdings in this domain with Eaton in power management and Advanced Drainage Systems (ADS) in drainage solutions. By way of example, ADS is the leading manufacturer of plastic piping (70% market share in the US) for wastewater, with uses spanning commercial, residential, infrastructure, and agricultural markets. The core of the opportunity stems from the fact that water infrastructure in the US has seen dramatic underinvestment over recent decades. Plastic is likely to continue to take share from traditional concrete piping reflecting its superior functionality (it does not degrade or crack, limiting contamination and leaks) and the fact that it is easier, safer, quicker, and cheaper to install.

-       New Growth Frontiers - if the growth engines of the past decade were the internet, mobile, and software the next decade will be based on the cloud, data and artificial intelligence. These technologies are likely to bridge the digital and physical world, having potentially profound implications for a range of industries. We appear to be early in some of these transformational areas, for example, only 15% of IT workloads are stored in the cloud, but change is likely to be brisk. Indeed, we have seen early signs of the disruptive effect of AI applications on Chegg, the US online education business. We took the decision to sell the shares as we had concerns about falling enrolment numbers and the risk posed by free-to-use applications like ChatGPT to undermine Chegg's subscription model. Semiconductors are the "picks and shovels" underpinning many of these exciting growth trends. We have been looking at companies that operate across the value chain, seeking operators with consolidated markets, high barriers to entry and secular growth. We have therefore purchased positions in Analog Devices (analogue semiconductors), Entegris (cleaning and filtration) and ASM International (atomic layer deposition).

-       Supply Side Importance - we are convinced that supply-side factors will be increasingly important in wealth generation. Following a period of abundant financing, low-cost capital operators with cash ready to deploy will be at a premium. Which companies have substantial dry powder to deploy in a world of capital scarcity? Where are the opportunities for consolidation in different industries, and which companies are likely to be the protagonists? We have added to the existing holding in Royalty Pharma which has a portfolio of royalties from existing drugs and specialises in late-stage funding of drug development in exchange for future royalties. This is a differentiated business model and Royalty Pharma's position as a preferred partner has been elevated as rates have increased.

Independent Investment Trust

In early November, the Monks portfolio received £173m of assets following the voluntary liquidation and rollover of The Independent Investment Trust PLC. This comprised around £100m in equity investment holdings and £73m in cash. The stocks inherited were a mix of cyclical companies such as UK housebuilders Persimmon, Redrow, and Bellway and early-stage growth companies like Midwich, a distributor of audiovisual equipment, and Bytes Technology, a software solutions provider. Benefits to shareholders include increased scale, an estimated reduction to the ongoing charges ratio of two basis points, and cash to invest at an advantageous point in the performance cycle. 

Governance and Sustainability

We believe that the building blocks of our investment philosophy - bottom-up stock-level research and long-termism - chime with an increasing focus on stewardship and ESG. We understand that businesses operate in a complex and dynamic world where their activities may have positive and negative impacts. There are no shortcuts. We believe that getting to know companies on a case-by-case basis is essential as we seek to understand their unique circumstances and assess material factors that may influence their sustainability. This directly impacts our assessment of holdings within the Monks portfolio. For example, CRH, a supplier of building materials, is one of the biggest contributors to the portfolio's carbon footprint. In its case, we believe that a strong climate strategy is complementary to its long-term ambitions and can strengthen its competitive advantage. We have had numerous productive discussions with the management and the board, who have been receptive and responsive to feedback. We welcomed the company's new and more ambitious decarbonisation target, which is industry-leading and has been validated by the Science-Based Targets initiative (SBTi). Conversely, we recently sold Ubisoft, the French gaming business, following a misconduct crisis and a deal to allow Tencent to acquire shares at levels that appeared to favour the founders at the expense of minority shareholders.

Outlook

Contrary to consensus, we believe the opportunity set is broadening and the prospects for growth companies are as compelling as ever. The operating environment for companies has undeniably changed. We have reflected on where we may have done better and adjusted the portfolio - we are confident that the companies we own for Monks are well-placed to adapt and thrive. Monks' proposition is clear, namely, to grow savers' capital over the long term. The most certain way to do this is to invest in companies that grow their earnings over long periods - this is the hard currency of returns. We are fortunate to be able to look across the growth spectrum and around the world for ideas. Monks owns an exciting and eclectic portfolio that is well diversified and it deploys modest levels of gearing (5.3% on a net basis) that will enhance long-term returns. We remain unwavering in our commitment to identifying and owning companies where we see the greatest underappreciation of future growth. It is this future growth that will drive the returns of Monks' shareholders long into the future.

Spencer Adair

Malcolm MacColl

19 June 2023

Past performance is not a guide to future performance.

Total return information is sourced from Baillie Gifford/Refinitiv. See disclaimer at the end of this announcement.

For a definition of terms used see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

The Managers' Core Investment Beliefs

We believe the following features of Monks provide a sustainable basis for adding value for shareholders.

Active Management

-      We invest in attractive companies using a 'bottom-up' investment process. Macroeconomic forecasts are of relatively little interest to us.

-      High active share* provides the potential for adding value.

-      We ignore the structure of the index - for example the location of a company's HQ and therefore its domicile are less relevant to us than where it generates sales and profits.

-      Large swathes of the market are unattractive and of no interest to us.

-      As index agnostic global investors we can go anywhere and only invest in the best ideas.

-      As the portfolio is very different from the index, we expect portfolio returns to vary - sometimes substantially and often for prolonged periods.

Committed Growth Investors

-      In the long run, share prices follow fundamentals; growth drives returns.

-      We aim to produce a portfolio of stocks with above average growth - this in turn underpins the ability of Monks to add value.

-      We have a differentiated approach to growth, focusing on the type of growth that we expect a company to deliver. All holdings fall into one of three growth categories - as set out below.

-      The use of these three growth categories ensures a diversity of growth drivers within a disciplined framework.

Long-Term Perspective

-      Long-term holdings mean that company fundamentals are given time to drive returns.

-      We prefer companies that are managed with a long-term mindset, rather than those that prioritise the management of market expectations.

-      We believe our approach helps us focus on what is important during the inevitable periods of underperformance.

-      Short-term portfolio results are random.

-      As longer-term shareholders we are able to have greater influence on environmental, social and governance matters.

Dedicated Team with Clear Decision-making Process

-      Senior and experienced team drawing on the full resources of Baillie Gifford.

-      Alignment of interests - the investment team responsible for Monks all own shares in the Company.

Portfolio Construction

-      Investments are held in three broad holding sizes - as set out below.

-      This allows us to back our judgement in those stocks for which we have greater conviction, and to embrace the asymmetry of returns through 'incubator' positions in higher risk/return stocks.

-      'Asymmetry of returns': some of our smaller positions will struggle and their share prices will fall; those that are successful may rise many fold. The latter should outweigh the former.

Low Cost

-      Investors should not be penalised by high management fees.

-      Low turnover and trading costs benefit shareholders.

*      For a definition of terms see Glossary of Terms and Alternative Performance Measures at the end of this document

Investment Portfolio by Growth Category as at 30 April 2023*

Holding Size		Growth Stalwarts	%	Rapid Growth	%	Cyclical Growth	%
		(c.10% p.a. earnings growth)		(c.15% to 25% p.a. earnings growth)		(c.10% to 15% p.a. earnings growth through a cycle)
		Company Characteristics ¾    Durable franchise ¾    Deliver robust profitability in most macroeconomic environments ¾    Competitive advantage includes dominant local scale, customer loyalty and strong brands		Company Characteristics ¾    Early stage businesses with vast growth opportunity ¾    Innovators attacking existing profit pools or creating new markets		Company Characteristics ¾    Subject to macroeconomic and capital cycles with significant structural growth prospects ¾    Strong management teams highly skilled at capital allocation
Highest conviction holdings c.2.0% each Total: 39.0%		Microsoft	3.4	Prosus	2.9	Martin Marietta Materials	2.7
Elevance Health	3.2	Reliance Industries	2.3	CRH	2.1
Moody's	2.6	Amazon.com	2.3	Ryanair	1.9
Service Corporation International	2.5			BHP Group	1.8
Pernod Ricard	2.3			Royalty Pharma	1.5
MasterCard	2.0
Alphabet	1.9
Arthur J. Gallagher	1.8
AIA	1.8
Average sized holdings c.1.0% each Total: 39.6%		Meta Platforms	1.5	The Trade Desk	1.2	Rio Tinto	1.4
Olympus	1.4	Alnylam Pharmaceuticals	1.2	TSMC	1.3
Prudential	1.4	The Schiehallion fund	1.2	Richemont	1.2
Shiseido	1.2	Moderna	1.0	HDFC	1.2
S&P Global	1.2	The Schiehallion Fund - C Shares	0.9	Ping An Insurance	1.1
Analog Devices	1.1	B3 Group	0.8	Markel	1.0
Estée Lauder	1.0	Alibaba	0.8	Atlas Copco	0.9
Broadridge Financial Solutions	0.9	Axon Enterprise	0.8	Teradyne	0.9
Adobe Systems	0.9	Shopify	0.8	Albemarle	0.9
Thermo Fisher Scientific	0.9	MercadoLibre	0.8	Charles Schwab	0.8
CoStar	0.8	Illumina	0.7	CBRE Group	0.8
Sysmex	0.7	Sea Limited	0.7	SiteOne Landscape Supply	0.7
						SMC	0.7
						Booking Holdings	0.7
						Eaton	0.7
						Epiroc	0.7
						Deutsche Boerse	0.7
Incubator Holdings c.0.5% each Total: 21.4%	adidas		0.6	Genmab	0.6	Entegris	0.5
Chewy		0.5	ByteDance	0.6	Nexans	0.5
Certara		0.5	Doordash	0.6	Floor & Décor Holdings	0.5
Topicus.com		0.4	Tesla	0.6	Pool Corporation	0.5
Hoshizaki Corp		0.3	Coupang	0.6	DENSO	0.5
			Schibsted	0.6	Jet2	0.5
			Epic Games	0.5	Howard Hughes	0.5
			Bytes Technology Group	0.5	ASM International	0.4
			Li Auto	0.5	Sands China	0.4
			Netflix	0.5	Redrow	0.4
			Adyen	0.4	Advanced Drainage Systems	0.4
			Snowflake	0.4	Bellway	0.4
			Stripe	0.4	Ashtead Group	0.4
			CyberAgent	0.4	Woodside Energy Group	0.3
			Cloudflare	0.4	Persimmon	0.3
			Staar Surgical	0.4	Wizz Air Holdings	0.2
			ICICI Prudential Life Insurance	0.4	Silk Invest Africa Food Fund	0.1
			Midwich	0.4	Sberbank of Russia	0.0
			Team 17 Group	0.3
			Adevinta Asa	0.3
			BIG Technologies	0.3
			Meituan	0.3
			Novocure	0.3
			Exact Sciences	0.3
			Farfetch	0.3
			Spotify	0.3
			Datadog	0.3
			Space Exploration Technologies	0.2
			Bumble	0.2
			Lemonade	0.2
			Ant International	0.1
			Wayfair	0.1
			Illumina CVR	<0.1
			On the Beach	<0.1
			Abiomed CVR	0.0
	Total		36.8	Total	30.7	Total	32.5

*      Excludes net liquid assets.

Portfolio Positioning as at 30 April 2023

Thematic Exposure - Risks and Opportunities

			At 30 April 2023
Category		%	%	%
New Economy				37.9
Platform Crush*			10.1
Regulation/Anti-trust			10.3
Transformational Health			5.4
Transformative/ Unproven Model			2.5
Enterprise Cloud			3.5
Innovation/Chips			4.1
Other			2.0
Economically Agnostic				25.1
Highly Valued Compounders			16.3
Idiosyncratic			6.1
Insurance Cycle			2.7
Developing Economies				16.9
Emerging Markets Middle Classes			10.5
	Emerging Markets Consumer Catch-up	6.0
	Emerging Markets Financial Development	4.5
Carbon Heavy			5.4
Lending/Underwriting Risk			0.5
Industrial Demand			0.5
Developed Market Growth				18.4
Consumer Demand/Employment			5.7
Industrial Demand			6.9
Carbon Heavy			3.2
Capital Markets/Asset Inflation			2.6
Net Liquid Assets†				1.7
Total Assets				100.0

* 'Platform Crush' typically refers to capital light online companies which seek to serve multiple stakeholders via a platform model.

Geographical*

	At 30 April 2023 %	At 30 April 2022 %
North America	52.4	54.0
Continental Europe	16.3	14.5
United Kingdom	8.6	8.7
Emerging Markets	10.9	12.2
Japan	5.2	4.5
Developed Asia	4.9	4.9
Total Investments
Net Liquid Assets†	1.7	1.2
Total Assets†	100.0	100.0

Sectoral*

		At 30 April 2023 %	At 30 April 2022 %
Financials		17.8	21.1
Technology		21.6	20.6
Consumer Discretionary		22.4	19.5
Healthcare		12.5	14.5
Industrials		13.3	10.6
Consumer Staples		2.3	2.0
Basic Materials		4.0	5.0
Energy		2.6	2.8
Real Estate		1.8	2.7
Total Investments
Net Liquid Assets†		1.7	1.2
Total Assets†		100.0	100.0

* Expressed as a percentage of total assets.

†For a definition of terms used see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

List of Investments at 30 April 2023

Name	Business	Growth Category	Fair value £'000		% of total assets		Cumulative % of total assets
Equities
Microsoft	Software and cloud computing enterprise	Stalwart	86,844		3.3
Elevance Health	Healthcare insurer	Stalwart	81,325		3.1
Prosus	Media and ecommerce company	Rapid	75,653		2.9
Martin Marietta Materials	Cement and aggregates manufacturer	Cyclical	68,423		2.6
Moody's	Credit rating agency	Stalwart	65,934		2.5
Service Corporation International	Death care services	Stalwart	64,047		2.4
Reliance Industries	Indian energy conglomerate	Rapid	60,455		2.3
Amazon.com	Online retailer	Rapid	59,105		2.3
Pernod Ricard	Global spirits manufacturer	Stalwart	58,911		2.3
CRH	Diversified building materials company	Cyclical	53,739		2.1		25.8
The Schiehallion Fund*	Global unlisted growth equity investment company	Rapid	29,617		1.1
The Schiehallion Fund C Shares*	Global unlisted growth equity investment company	Rapid	23,660		0.9
			53,277		2.0
MasterCard	Electronic payments network and related services	Stalwart	51,037		1.9
Alphabet	Online search engine	Stalwart	50,096		1.9
Ryanair	Low cost European airline	Cyclical	47,645		1.8
Arthur J. Gallagher	Insurance broker	Stalwart	46,797		1.8
BHP Group	Mineral exploration and production	Cyclical	46,004		1.8
AIA	Asian life insurer	Stalwart	45,226		1.7
Meta Platforms	Social networking website	Stalwart	38,940		1.5
Royalty Pharma	Biopharmaceutical royalties portfolio	Cyclical	38,551		1.5
Olympus	Optoelectronic products	Stalwart	36,980		1.4		43.1
Rio Tinto	Global commodities businesses	Cyclical	35,566		1.4
Prudential	International life insurance	Stalwart	34,886		1.3
TSMC	Semiconductor manufacturer	Cyclical	34,320		1.3
Shiseido	Japanese cosmetics manufacturer	Stalwart	31,965		1.2
The Trade Desk	Advertising technology company	Rapid	31,774		1.2
Richemont	Luxury goods company	Cyclical	31,746		1.2
S&P Global	Global credit rating agency	Stalwart	31,035		1.2
HDFC	Indian mortgage provider	Cyclical	31,027		1.2
Alnylam Pharmaceuticals	RNA interference based biotechnology	Rapid	30,514		1.2
Ping An Insurance	Chinese life insurer	Cyclical	29,205		1.1		55.4
Analog Devices	Integrated circuits	Stalwart	28,369		1.1
Estée Lauder	Global cosmetic brands business	Stalwart	25,992		1.0
Markel	Markets and underwrites speciality insurance products	Cyclical	25,134		1.0
Moderna	Drug discovery using mRNA technology	Rapid	24,947		1.0
Broadridge Financial Solutions	Provides technology based solutions to the financial services industry	Stalwart	24,152		0.9
Atlas Copco	Industrial equipment	Cyclical	24,052		0.9
Teradyne	Semiconductor testing equipment manufacturer	Cyclical	23,265		0.9
Adobe Systems	Software products and technologies	Stalwart	22,503		0.9
Albemarle	Speciality chemicals	Cyclical	22,137		0.8
Thermo Fisher Scientific	Scientific instruments, consumables and chemicals	Stalwart	22,130		0.8		64.7
Charles Schwab	Online savings and trading platform	Cyclical	21,813		0.8
B3 Group	Brazilian stock exchange operator	Rapid	21,178		0.8
Alibaba	Online commerce company	Rapid	21,113		0.8
Axon Enterprise	Manufacturer of law enforcement devices	Rapid	20,762		0.8
Shopify	Online commerce platform	Rapid	20,479		0.8
MercadoLibre	Latin American ecommerce platform	Rapid	20,021		0.8
CoStar	Commercial property portal	Stalwart	19,559		0.7
CBRE Group	Commercial real estate operator	Cyclical	19,361		0.7
SiteOne Landscape Supply	US distributor of landscaping supplies	Cyclical	19,046		0.7
SMC	Producer of factory automation equipment	Cyclical	18,843		0.7		72.3
Booking Holdings	Online travel agency	Cyclical	18,415		0.7
Eaton	Industrial engineering products	Cyclical	18,370		0.7
Epiroc	Construction and mining machinery	Cyclical	18,246		0.7
Sysmex	Medical testing equipment	Stalwart	17,804		0.7
Deutsche Boerse	Stock exchange operator	Cyclical	17,803		0.7
Illumina	Gene sequencing business	Rapid	17,621		0.7
Sea Limited	Online and digital gaming	Rapid	17,137		0.7
Genmab	Biotechnology company	Rapid	16,521		0.6
ByteDance U	Online content platform including TikTok	Rapid	15,202		0.6
Doordash	Online commerce platform	Rapid	15,112		0.6		79.0
Tesla	Electric cars and renewable energy solutions	Rapid	14,991		0.6
Coupang	South Korean ecommerce	Rapid	14,783		0.6
adidas	Sports apparel manufacturer	Stalwart	14,635		0.6
Schibsted	Media and classified advertising platforms	Rapid	14,536		0.6
Epic Games U	Gaming software developer	Rapid	14,104		0.5
Entegris	Supplier of materials to high-tech industries	Cyclical	13,895		0.5
Bytes Technology Group	Reseller of computer software	Rapid	13,800		0.5
Chewy	Online pet supplies retailer	Stalwart	13,630		0.5
Li Auto	Electric cars with a focus on China	Rapid	13,565		0.5
Nexans	Manufacturer of cables and electrical parts	Cyclical	13,468		0.5		84.4
Floor & Décor Holdings	Speciality retailer	Cyclical	13,100		0.5
Certara	Drug discovery and development company	Stalwart	13,100		0.5
Pool Corporation	Swimming pool supplies and equipment	Cyclical	12,841		0.5
DENSO	Automotive component supplier	Cyclical	12,807		0.5
Jet2	Low cost airline	Cyclical	12,250		0.5
Netflix	Subscription service for TV shows and movies	Rapid	12,234		0.5
Howard Hughes	US real estate developer	Cyclical	11,610		0.4
Adyen	Digital payments	Rapid	11,454		0.4
ASM International	Association of materials-centric engineers and scientists	Cyclical	11,289		0.4
Sands China	Macau casino operator	Cyclical	11,012		0.4		89.0
Topicus.com	Vertical market software and solutions	Stalwart	10,624		0.4
Snowflake	Cloud based data insight application	Rapid	10,466		0.4
Redrow	Housebuilding company	Cyclical	10,350		0.4
Stripe U	Payments platform	Rapid	10,265		0.4
CyberAgent	Japanese internet advertising and content	Rapid	10,263		0.4
Advanced Drainage Systems	Manufacturer of pipes and drainage systems	Cyclical	10,179		0.4
Cloudflare	Cloud based IT services business	Rapid	9,919		0.4
Bellway	Home construction company	Cyclical	9,640		0.4
Staar Surgical	Implantable contact lenses	Rapid	9,499		0.4
ICICI Prudential Life Insurance	Life insurance services	Rapid	9,435		0.4		93.0
Midwich	Distributor of technology solutions	Rapid	9,240		0.4
Ashtead Group	Industrial equipment rental company	Cyclical	9,154		0.3
Team 17 Group	Video game developer	Rapid	9,000		0.3
Adevinta Asa	Media and classified advertising platforms	Rapid	8,451		0.3
BIG Technologies	Electronic monitoring solutions	Rapid	7,980		0.3
Meituan	Online commerce platform	Rapid	7,760		0.3
Novocure	Biotechnology company focusing on solid tumour treatment	Rapid	7,643		0.3
Exact Sciences	Cancer detection and treatment	Rapid	7,642		0.3
Hoshizaki Corp	Commercial kitchen equipment manufacturer	Stalwart	7,597		0.3
Woodside Energy Group	Australian gas and oil company	Cyclical	6,834		0.3		96.1
Farfetch	Online fashion retailer	Rapid	6,766		0.3
Spotify	Online music streaming service	Rapid	6,754		0.3
Persimmon	Housebuilding company	Cyclical	6,570		0.3
Datadog	Cloud based IT system monitoring application	Rapid	6,539		0.2
Wizz Air Holdings	Low-cost East European airline	Cyclical	6,419		0.2
Space Exploration Technologies U	Space rockets and satellites	Rapid	6,126		0.2
Bumble	Dating application	Rapid	5,223		0.2
Lemonade	Data and insurance company	Rapid	4,475		0.2
Ant International U	Chinese online payments and financial services business	Rapid	3,782		0.1
Silk Invest Africa Food Fund U	Africa focused private equity fund	Cyclical	3,658		0.1		98.2
Wayfair	Online home furnishings business	Rapid	3,159		0.1
Illumina CVR U	Gene sequencing business	Rapid	1,281		<0.1
On the Beach	Web search interface provider	Rapid	497		<0.1
Sberbank of Russia †	Russian commercial bank	Cyclical	-		0.0
Abiomed CVR	Medical implant manufacturer	Rapid	-		0.0
Total Investments			2,574,408		98.3		98.3
Net Liquid Assets#			43,330		1.7
Total Assets#			2,617,738		100.0		100.0

*       The Schiehallion Fund is managed by Baillie Gifford. The Company's holdings in The Schiehallion Fund are excluded from its assets when calculating the management fee.

See note 3 to the Financial Statements. The ordinary and C share portfolios of The Schiehallion Fund are managed as distinct investment pools, until such time as the C shares are converted into ordinary shares.

U Denotes unlisted (private company) investment.

† Suspended investment.

For a definition of terms used see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

	Listed equities %	Schiehallion Fund %	Unlisted                 securities ‡                 %	Net liquid assets# %	Total assets# %
30 April 2023	94.4	2.0	1.9	1.7	100.0
30 April 2022	92.2	4.4	2.2	1.2	100.0

Figures represent percentage of total assets.

For a definition of terms used see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

‡ Includes holdings in preference shares, ordinary shares and contingent value rights (CVR).

Baillie Gifford's Approach to Valuing Private Companies

Baillie Gifford holds private company investments at 'fair value' i.e., the price that would be paid in an open-market transaction. Valuations are adjusted both during regular valuation cycles and on an ad hoc basis in response to 'trigger events'. Our valuation process ensures that private companies are valued in both a fair and timely manner.

The valuation process is overseen by a valuations committee at Baillie Gifford which takes advice from an independent third party (S&P Global). The valuations committee is independent from the portfolio managers as well as Baillie Gifford's Private Companies Specialist team, with all voting members being from different operational areas of the firm, and the portfolio managers only receive final valuation notifications once they have been applied.

We revalue the private holdings on a three-month rolling cycle, with one-third of the holdings reassessed each month. The prices are also reviewed twice per year by the Monks Board and are subject to the scrutiny of external auditors in the annual audit process.

Beyond the regular cycle, the valuations committee also monitors the portfolio for certain 'trigger events'. These may include changes in fundamentals, a takeover approach, an intention to carry out an Initial Public Offering 'IPO', company news which is identified by the valuation team or by the portfolio managers, or changes to the valuation of comparable public companies.

The valuations committee also monitors relevant market indices on a weekly basis and updates valuations in a manner consistent with our external valuer's (S&P Global) most recent valuation report where appropriate. When market volatility is particularly pronounced the team undertakes these checks daily. Any ad hoc change to the fair valuation of any holding is implemented swiftly and reflected in the next published net asset value. There is no delay.

The Independent Auditor's Report in the Company's Annual Report and Financial Statements explains the procedures carried out by the external auditor on the private companies (unquoted investments) as part of their audit.

The Monks Investment Trust*
Instruments valued	9
Revaluations performed	61
Percentage of private company portfolio revalued 4+ times	89%
Percentage of private company portfolio revalued 6+ times	67%

* Data reflecting period 1 May 2022 to 30 April 2023 to align with the Company's reporting period end.

During the year, most revaluations have been decreases given prevailing market conditions. The average movement in both valuation and share price for all private company investments is shown below.

	Average movement in investee company valuation	Average movement in investee company share price
Instruments valued*	(19%)	(15%)

* Data reflecting period 1 May 2022 - 30 April 2023 to align with the Company's reporting period end.

Private company share prices have decreased slightly less than headline valuations, because Monks holds preference stock, which provides some downside protection.

The share price movement reflects a probability-weighted average of the regular valuation that would be realised in an IPO, and the downside protected valuation that would normally be triggered in the event of a corporate sale or liquidation.

Name	Instrument	Fair value at 30 April 2023  £'000	% of total assets
ByteDance	Series E-1 Preference	15,202	0.6
Epic Games	Common Stock	14,104	0.5
Stripe	Class B Common	1,607
Stripe	Series H Preference	1,004
Stripe	Series I Preference	7,654
		10,265	0.4
Space Exploration Technologies	Class A Common	4,682
Space Exploration Technologies	Class C Common	1,444
		6,126	0.2
Ant International	Class C Ordinary	3,782	0.1
Silk Invest Africa Food Fund	Class A Ordinary	3,658	0.1
Total private company investments		53,137	1.9
Illumina CVR*		1,281	<0.1
Total unlisted investments		54,418	1.9
The Schiehallion Fund (diversified private company exposure)	Ordinary and C Shares	53,277	2.0
Total direct and indirect unlisted exposure		107,695	3.9

* Unlisted security in a listed investment, arising from a private company transaction (Grail).

Income Statement

For the year ended 30 April

	Notes	2023 Revenue £'000	2023 Capital £'000	2023 Total £'000	2022 Revenue £'000	2022 Capital £'000	2022 Total £'000
Losses on investments		-	(78,421)	(78,421)	-	(631,829)	(631,829)
Currency gains/(losses)		-	293	293	-	(308)	(308)
Income	2	30,211	-	30,211	27,811	-	27,811
Investment management fee	3	(8,878)	-	(8,878)	(10,465)	-	(10,465)
Other administrative expenses		(1,833)	-	(1,833)	(1,888)	-	(1,888)
Net return before finance costs and taxation		19,500	(78,128)	(58,628)	15,458	(632,137)	(616,679)
Finance costs of borrowings		(7,225)	-	(7,225)	(5,298)	-	(5,298)
Net return on ordinary activities before taxation		12,275	(78,128)	(65,853)	10,160	(632,137)	(621,977)
Tax on ordinary activities		(1,561)	(430)	(1,991)	(1,516)	293	(1,223)
Net return on ordinary activities after taxation		10,714	(78,558)	(67,844)	8,644	(631,844)	(623,200)
Net return per ordinary share	4	4.70p	(34.47p)	(29.77p)	3.67p	(268.58p)	(264.91p)
Note: Dividends per share paid and payable in respect of the year	5	3.15p			2.35p

The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital return columns are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in this statement derive from continuing operations.

A Statement of Comprehensive Income is not required as the Company does not have any other comprehensive income and the net return on ordinary activities after taxation is both the profit and total comprehensive income for the period.

Balance Sheet

As at 30 April

	Notes	2023 £'000	2023 £'000	2022 £'000	2022 £'000
Fixed assets
Investments held at fair value through profit or loss	6		2,574,408		2,662,015
Current assets
Debtors		20,441		8,072
Cash and cash equivalents		42,191		35,879
		62,632		43,951
Creditors
Amounts falling due within one year	7	(93,142)		(126,257)
Net current liabilities			(30,510)		(82,306)
Total assets less current liabilities			2,543,898		2,579,709
Creditors and Provisions
Amounts falling due after more than one year:
Loan notes	7	(99,858)		(99,853)
Provision for tax liability	7	(1,160)		(692)
			(101,018)		(100,545)
			2,442,880		2,479,164
Capital and reserves
Share capital	8		12,659		11,823
Share premium account	8		433,714		262,183
Capital redemption reserve			8,700		8,700
Capital reserve	8		1,915,385		2,129,483
Revenue reserve			72,422		66,975
Shareholders' funds			2,442,880		2,479,164
Shareholders' funds per ordinary share			1,058.5p		1,089.0p
(borrowings at book value)

*      See Glossary of Terms and Alternative Performance Measures at the end of this announcement.

The accompanying notes on the following pages are an integral part of the Financial Statements

Statement of Changes in Equity

For the year ended 30 April 2023

	Notes	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 May 2022		11,823	262,183	8,700	2,129,483	66,975	2,479,164
Net return on ordinary activities after taxation		-	-	-	(78,558)	10,714	(67,844)
Ordinary shares bought back	8	-	-	-	(135,221)	-	(135,221)
Ordinary shares issued	8	836	171,531	-	(319)	-	172,048
Dividends paid during the year	5	-	-	-	-	(5,267)	(5,267)
Shareholders' funds at 30 April 2023		12,659	433,714	8,700	1,915,385	72,422	2,442,880

For year ended 30 April 2023

		Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 May 2021		11,823	262,183	8,700	2,859,214	63,060	3,204,980
Net return on ordinary activities after taxation		-	-	-	(631,844)	8,644	(623,200)
Ordinary shares bought back	8	-	-	-	(97,887)	-	(97,887)
Dividends paid during the year	5	-	-	-	-	(4,729)	(4,729)
Shareholders' funds at 30 April 2022		11,823	262,183	8,700	2,129,483	66,975	2,479,164

*      The Capital Reserve balance at 30 April 2023 includes holding gains on investments of £660,579,000 (30 April 2022 - gains of £723,323,000).

The accompanying notes on the following pages are an integral part of the Financial Statements.

Cash Flow Statement

For the year ended 30 April

	Notes	2023 £'000	2023 £'000	2022 £'000	2022 £'000
Cash flows from operating activities
Net return on ordinary activities before taxation			(65,853)		(621,977)
Net losses on investments			78,421		631,829
Currency (gains)/losses			(293)		308
Finance costs of borrowings			7,225		5,298
Overseas tax incurred			(1,575)		(1,586)
(Increase)/decrease in accrued income			(70)		355
(Increase)/decrease in debtors			(513)		347
Decrease in creditors			(357)		(250)
Cash from operations*			16,985		14,324
Interest paid			(7,402)		(4,991)
Net cash inflow from operating activities			9,583		9,333
Cash flows from investing activities
Acquisitions of investments		(255,559)		(484,720)
Disposals of investments		361,027		424,157
Net cash inflow/(outflow) from investing activities			105,468		(60,563)
Cash flows from financing activities
Equity dividends paid	5	(5,267)		(4,729)
Ordinary shares bought back and stamp duty thereon	8	(135,014)		(91,577)
Ordinary shares issued	8	71,249		-
Debenture repaid		(40,000)		-
Borrowings drawn down		-		75,000
Net cash outflow from financing activities			(109,032)		(21,306)
Increase/(decrease) in cash and cash equivalents			6,019		(72,536)
Exchange movements			293		(308)
Cash and cash equivalents at 1 May			35,879		108,723
Cash and cash equivalents at 30 April			42,191		35,879

*      Cash from operations includes dividends received of £29,285,000 (30 April 2022 - £28,165,000) and interest received of £856,000 (30 April 2022 - £1,000).

The accompanying notes are an integral part of the Financial Statements.

Notes to the Financial Statements

1.      The Financial Statements for the year to 30 April 2023 have been prepared in accordance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and on the basis of the accounting policies set out in the Annual Report and Financial Statements which are unchanged from the prior year and have been applied consistently.

2.    Income

	2023 £'000	2022 £'000
Income from investments
UK dividends	4,688	10,519
Overseas dividends	24,667	17,291
Other Income	29,355	27,810
Deposit Interest	856	1
Total Income	30,211	27,811
Total income comprises:
Dividends from financial assets designated at fair value through profit or loss	29,355	27,810
Interest from financial assets not at fair value through profit or loss	856	1
	30,211	27,811

Special dividend entitlements arising in the year amounted to £684,000 (2022 - £2,526,000) with £492,000 (2022 - £2,393,000) classified as revenue and £192,000 (2022 - £133,000) classified as capital.

3.    Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed as the Company's Alternative Investment Fund Manager (AIFM) and Company Secretary. Baillie Gifford & Co Limited has delegated portfolio management services to Baillie Gifford & Co. Dealing activity and transaction reporting have been further sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited. The annual management fee payable to Baillie Gifford & Co Limited is 0.45% on the first £750 million of total assets, 0.33% on the next £1 billion of total assets and 0.30% on the remaining total assets. For fee purposes, total assets is defined as the total value of all assets held less all liabilities (other than any liability in the form of debt intended for investment purposes) and excludes the value of the Company's holdings in The Schiehallion Fund, a closed-ended investment company managed by Baillie Gifford & Co. The Company does not currently hold any other collective investment vehicles managed by Baillie Gifford & Co. Where the Company holds investments in open-ended collective investment vehicles managed by Baillie Gifford, such as OEICs, Monks' share of any fees charged within that vehicle will be rebated to the Company. All debt drawn down during the periods under review is intended for investment purposes. For the quarters to 31 January 2023 and 30 April 2023, the assets subject to management fee excluded the £173 million rolled into the Company from The Independent Investment Trust PLC in accordance with the terms of the transaction as set out in the Prospectus published 6 October 2022, more detail of which is provided in note 13 Share Capital and note 14 Capital and Reserves in the Annual Report and Financial Statements.

4.    Net Return Per Ordinary Share

	2023 Revenue	2023 Capital	2023 Total	2022 Revenue	2022 Capital	2022 Total
Net return per ordinary share	4.70p	(34.47p)	(29.77p)	3.67p	(268.58p)	(264.91p)

Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £10,714,000 (2022 - £8,644,000) and on 227,887,889 (2022 - 235,252,716) ordinary shares of 5p, being the weighted average number of ordinary shares in issue during the year.

Capital return per ordinary share is based on the net capital loss for the financial year of £78,558,000 (2022 - loss of £631,844,000) and on 227,887,889 (2022 - 235,252,716) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

There are no dilutive or potentially dilutive shares in issue.

5.    Ordinary Dividends

	2023	2022	2023 £'000	2022 £'000
Amounts recognised as distributions in the year:
Previous year's final (paid 9 September 2022)	2.35p	2.00p	5,267	4,729

We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £10,714,000 (2022 - £8,644,000).

	2023	2022	2023 £'000	2022 £'000
Amounts paid and payable in respect of the financial year:
Proposed final (payable 13 September 2023)	3.15p	2.35p	7,270	5,267

If approved, the recommended final dividend on the ordinary shares will be paid on 13 September 2023 to shareholders on the register at the close of business on 28 July 2023. The ex-dividend date is 27 July 2023. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 17 August 2023.

6.    Fixed Assets - Investments

As at 30 April 2023	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Listed and suspended equities	2,466,713	53,277	-	2,519,990
Unlisted securities	-	-	54,418	54,418
Total financial asset investments	2,466,713	53,277	54,418	2,574,408

As at 30 April 2022	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Listed and suspended equities	2,479,464	120,306	5,636	2,605,406
Unlisted securities	-	-	56,609	56,609
Total financial asset investments	2,479,464	120,306	62,245	2,662,015

Investments in securities are financial assets held at fair value through profit or loss. In accordance with Financial Reporting Standard 102, the tables above provide an analysis of these investments based on the fair value hierarchy described below, which reflects the reliability and significance of the information used to measure their fair value. During the year, the previously Level 3 suspended investment in Brilliance China Automotive was sold and Stripe Series I Preference Shares were acquired. Level 2 investments comprise the ordinary and C share holdings in The Schiehallion Fund. The suspended investment in Sberbank of Russia has been valued at nil.

The fair value hierarchy used to analyse the basis on which the fair values of financial instruments held at fair value through the profit and loss account are measured is described below. Fair value measurements are categorised on the basis of the lowest level input that is significant to the fair value measurement.

Level 1 - using unadjusted quoted prices for identical instruments in an active market;

Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and

Level 3 - using inputs that are unobservable (for which market data is unavailable).Unlisted Investments

Private Company Investments

Private company investments are valued at fair value by the Directors following a detailed review and appropriate challenge of the valuations proposed by the Managers. The Managers' private company investment policy applies techniques consistent with the International Private Equity and Venture Capital Valuation Guidelines 2018 ('IPEV'). The techniques applied are predominantly market- based approaches. The market-based approaches available under IPEV are set out below and are followed by an explanation of how they are applied to the Company's private company portfolio:

¾    Multiples;

¾    Industry Valuation Benchmarks; and

¾    Available Market Prices.

The nature of the private company portfolio currently will influence the valuation technique applied. The valuation approach recognises that, as stated in the IPEV Guidelines, the price of a recent investment, if resulting from an orderly transaction, generally represents fair value as at the transaction date and may be an appropriate starting point for estimating fair value at subsequent measurement dates. However, consideration is given to the facts and circumstances as at the subsequent measurement date, including changes in the market or performance of the investee company. Milestone analysis is used where appropriate to incorporate the operational progress of the investee company into the valuation. Additionally, the background to the transaction must be considered. As a result, various multiples-based techniques are employed to assess the valuations particularly in those companies with established revenues. Discounted cashflows are used where appropriate. An absence of relevant industry peers may preclude the application of the Industry Valuation Benchmarks technique and an absence of observable prices may preclude the Available Market Prices approach. All valuations are cross-checked for reasonableness by employing relevant alternative techniques.

The private company investments are valued according to a three monthly cycle of measurement dates. The fair value of the private company investments will be reviewed before the next scheduled three monthly measurement date on the following occasions:

¾    at the year end and half year end of the Company; and

¾    where there is an indication of a change in fair value as defined in the IPEV guidelines (commonly referred to as 'trigger' events).

7.      Creditors and Provisions include the following:

Borrowing facilities

At 30 April 2023 the Company had a 3 year £150 million unsecured floating rate revolving facility with National Australia Bank Limited, which expires on 29 November 2024.

At 30 April 2023 drawings were as follows:

¾    National Australia Bank Limited: £75 million at an interest rate of 1.4% over SONIA, maturing in September 2023 (2022 - £75 million at an interest rate of 1.4% over SONIA, being £50 million maturing in August 2022 and £25 million maturing in September 2022).

The main covenants relating to the above loans are that total borrowings shall not exceed 30% of the Company's adjusted net asset value and the Company's minimum adjusted net asset value shall be £650 million.

There were no breaches of loan covenants during the year to 30 April 2023 (2022 - none).

Debenture Stock

The £40 million 6 3/8% debenture stock 2023 was repaid at par on 1 March 2023, in accordance with its terms.

Unsecured Loan Notes

The unsecured loan notes are stated at the cumulative amount of net proceeds after issue expenses. The cumulative effect is to reduce the carrying amount of borrowing by £142,000 (2022 - £147,000).

Provision for Tax Liability

The deferred tax liability provision at 30 April 2023 of £1,160,000 (30 April 2022 - £692,000) relates to a potential liability for Indian capital gains tax that may arise on the Company's Indian investments should they be sold in the future, based on the net unrealised taxable capital gain at the period end and on enacted Indian tax rates. The amount of any future tax amounts payable may differ from this provision, depending on the value and timing of any future sales of such investments and future Indian tax rates.

8.    Share Capital

	2023 Number	2023 £'000	2022 Number	2022 £'000
Allotted, called up and fully paid ordinary shares of 5p each	230,796,666	11,540	227,645,309	11,382
Treasury shares of 5p each	22,374,794	1,119	8,808,550	441
Total	253,171,460	12,659	236,453,859	11,823

The Company's authority permits it to hold shares bought back 'in treasury'. Such treasury shares may be subsequently either sold for cash (at, or at a premium to, net asset value per ordinary share) or cancelled. In the year to 30 April 2023, 13,566,244 shares with a nominal value of £678,000 were bought back at a total cost of £135,221,000 to be held in treasury (2022 - 8,808,550 ordinary shares with a nominal value of £441,000 were bought back at a total cost of £97,887,000). No shares were issued from treasury during the year and at 30 April 2023 22,374,794 (2022 - 8,808,550) shares were held in treasury. 16,717,601 new shares in the Company were issued to former shareholders of The Independent Investment Trust PLC in accordance with the Scheme of Reconstruction as noted in more detail in note 14 Capital and Reserves in the Annual Report and Financial Statements. At 30 April 2023 the Company had authority to buy back 26,548,989 ordinary shares and to allot or sell from treasury 22,480,758 ordinary shares without application of pre-emption rights. Under the provisions of the Company's Articles of Association share buy-backs are funded from the capital reserve.

9.      The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 April 2023 or 2022 but is derived from those accounts. Statutory accounts for 2022 have been delivered to the Registrar of Companies and those for 2023 will be delivered in due course. The auditor has reported on these accounts; the 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.

10.    Transactions with Related Parties and the Managers and Secretaries

No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006.

Details of the management fee arrangements are included in note 3 above.

11.    The Annual Report and Financial Statements will be available on the Managers' website www.monksinvestmenttrust.co.uk‡ on or around 11 July 2022.

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

Glossary of Terms and Alternative Performance Measures (APM)

An alternative performance measure is a financial measure of historical or future financial performance, financial position, or cash flows,

other than a financial measure defined or specified in the applicable financial reporting framework.

Total Assets

This is the Company's definition of Adjusted Total Assets, being the total of all assets less current liabilities and provisions, before deduction of all borrowings.

Shareholders' Funds

Shareholders' Funds is the value of all assets held less all liabilities, with borrowings deducted at book cost.

Net Asset Value (APM)

Net Asset Value (NAV) is the value of all assets held less all liabilities, with borrowings deducted at either par value or fair value as described below. Per share amounts are calculated by dividing the relevant figure by the number of ordinary shares in issue.

Net Asset Value (Borrowings at Par Value) (APM)

Borrowings are valued at nominal par value.

A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at par value is provided below:

	2023 £'000	2023 per share	2022 £'000	2022 per share
Shareholders' funds (borrowings at book value)	2,442,880	1,058.5p	2,479,164	1,089.0p
Add: book value of borrowings	174,858	75.8p	214,826	94.4p
Less: par value of borrowings	(175,000)	(75.8p)	(215,000)	(94.4p)
Net asset value (borrowings at par value)	2,442,738	1,058.5p	2,478,990	1,089.0p

The per share figures above are based on 230,796,666 (2022 - 227,645,309) ordinary shares of 5p, being the number of ordinary shares in issue at the period end excluding treasury shares.

Net Asset Value (Borrowings at Fair Value) (APM)

Borrowings are valued at an estimate of market worth. The fair values of the loan notes are calculated using a comparable debt approach, by reference to a basket of corporate debt. The fair value of the Company's short term bank borrowings is equivalent to its book value.

A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at fair value is provided below.

	2023 £'000	2023 per share	2022 £'000	2022 per share
Shareholders' funds (borrowings at book value)	2,442,880	1,058.5p	2,479,164	1,089.0p
Add: book value of borrowings	174,858	75.8p	214,826	94.4p
Less: fair value of borrowings	(125,404)	(54.3p)	(190,308)	(83.6p)
Net asset value (borrowings at fair value)	2,492,334	1,080.0p	2,503,682	1,099.8p

The per share figures above are based on 230,796,666 (2022 - 227,645,309) ordinary shares of 5p, being the number of ordinary shares in issue at the period end excluding treasury shares.

Discount/Premium (APM)

As stock markets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, this situation is called a premium.

		2023	2022
Closing NAV per share (borrowings at par)	a	1,058.5p	1,089.0p
Closing NAV per share (borrowings at fair value)	b	1,080.0p	1,099.8p
Closing share price	c	975.0p	1,051.0p
Discount to NAV with borrowings at par	(c-a) ÷ a	(7.9%)	(3.5%)
Discount to NAV with borrowings at fair value	(c-b) ÷ b	(9.7%)	(4.4%)

Net Liquid Assets

Net liquid assets comprise current assets less current liabilities (excluding borrowings) and provisions for deferred liabilities.

Active Share (APM)

Active share, a measure of how actively a portfolio is managed, is the percentage of the listed equity portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

Unlisted, Unquoted and Private Company Investments

'Unlisted', 'Unquoted' and 'Private Company' investments are investments in securities not traded on a recognised exchange.

Total Return (APM)

The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend, as detailed below.

		2023 NAV (par)	2023 NAV (fair)	2023 Share Price	2022 NAV (par)	2022 NAV (fair)	2022 Share Price
Closing NAV per share/share price	a	1,058.5p	1,080.0p	975.0p	1,089.0p	1,099.8p	1,051.0p
Dividend adjustment factor*	b	1.0021	1.0021	1.0023	1.0015	1.0015	1.0014
Adjusted closing NAV per share/share price	c = a x b	1,060.7p	1,082.3p	977.3p	1,090.6p	1,101.4p	1,052.5p
Opening NAV per share/share price	d	1,089.0p	1,099.8p	1,051.0p	1,355.3p	1,358.1p	1,396.0p
Total return	(c ÷ d)-1	(2.6%)	(1.6%)	(7.0%)	(19.5%)	(18.9%)	(24.6%)

*        The dividend adjustment factor is calculated on the assumption that the dividend of 2.35p (2022 - 2.00p) paid by the Company during the period was reinvested into shares of the Company at the cum income NAV at the ex-dividend date.

Ongoing Charges (APM)

The total expenses (excluding dealing and borrowing costs) incurred by the Company as a percentage of the daily average net asset value (with borrowings at fair value), as detailed below.

		2023	2022
Investment management fee		£8,878,000	£10,465,000
Other administrative expenses		£1,833,000	£1,888,000
Total expenses	a	£10,711,000	£12,353,000
Average net asset value (with borrowings deducted at fair value)	b	£2,480,229,000	£3,114,257,000
Ongoing charges	a ÷ b	0.43%	0.40%

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets. The level of gearing can be adjusted through the use of derivatives which affect the sensitivity of the value of the portfolio to changes in the level of markets.

Gross gearing, also referred to as potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds (a ÷ c in the table below).

Net gearing, also referred to as invested gearing is borrowings at book value less cash and cash equivalents (any certificates of deposit are not deducted) and brokers' balances expressed as a percentage of shareholders' funds (b ÷ c in the table below)*.

Effective gearing, as defined by the Board and Managers of Monks, is the Company's borrowings at par less cash, brokers' balances and investment grade bonds maturing within one year, expressed as a percentage of shareholders' funds*.

*        As adjusted to take into account the gearing impact of any derivative holdings.

		2023	2022
Borrowings (at book cost)	a	£174,858,000	£214,826,000
Less: cash and cash equivalents		(£42,191,000)	(£35,879,000)
Less: sales for subsequent settlement		(£16,520,000)	(£4,741,000)
Add: purchases for subsequent settlement		£14,456,000	£7,045,000
Adjusted borrowings	b	£130,693,000	£181,251,000
Shareholders' funds	c	£2,442,880,000	£2,479,164,000
Gross (potential) gearing	a/c	7.2%	8.7%
Net (invested) gearing	b/c	5.3%	7.3%

Leverage (APM)

For the purposes of the Alternative Investment Fund Managers (AIFM) Regulations leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

Compound Annual Return (APM)

The compound annual return converts the return over a period of longer than one year to a constant annual rate of return applied to the compounded value at the start of each year.

Treasury Shares

The Company has the authority to make market purchases of its ordinary shares for retention as treasury shares for future reissue, resale, transfer, or for cancellation. Treasury shares do not receive distributions and the Company is not entitled to exercise the voting rights attaching to them.

Turnover (APM)

Turnover is a measure of portfolio change or trading activity. Monthly turnover is calculated as the minimum of purchases and sales in a month, divided by the average market value of the fund. Monthly numbers are added together to get the rolling 12 month turnover data.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

‡          Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

Third Party Data Provider Disclaimer

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No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom.

No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.

Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.

FTSE Index Data

London Stock Exchange Group plc and its group undertakings (collectively, the 'LSE Group'). © LSE Group 2023. FTSE Russell is a trading name of certain of the LSE Group companies. 'FTSE®' 'Russell®', FTSE Russell ®, are a trade marks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication.

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Sustainable Finance Disclosure Regulation ('SFDR')

The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a direct impact in the UK due to Brexit, however, it applies to third-country products marketed in the EU. As The Monks Investment Trust PLC is marketed in the EU by the AIFM, BG & Co Limited, via the National Private Placement Regime ('NPPR') the following disclosures have been provided to comply with the high-level requirements of SFDR.

The AIFM has adopted Baillie Gifford & Co's Governance and Sustainable Principles and Guidelines as its policy on integration of sustainability risks in investment decisions.

Baillie Gifford & Co's approach to investment is based on identifying and holding high quality growth businesses that enjoy sustainable competitive advantages in their marketplace. To do this it looks beyond current financial performance, undertaking proprietary research to build up an in-depth knowledge of an individual company and a view on its long-term prospects. This includes the consideration of sustainability factors (environmental, social and/or governance matters) which it believes will positively or negatively influence the financial returns of an investment.

More detail on the Investment Manager's approach to sustainability can be found in the Governance and Sustainability Principles and Guidelines document, available publicly on the Baillie Gifford website bailliegifford.com.

Taxonomy Regulation

The Taxonomy Regulation establishes an EU-wide framework or criteria for environmentally sustainable economic activities in respect of six environmental objectives. It builds on the disclosure requirements under SFDR by introducing additional disclosure obligations in respect of Alternative Investment Funds that invest in an economic activity that contributes to an environmental objective.

The Company does not commit to make sustainable investments as defined under SFDR. As such, the underlying investments do not take into account the EU criteria for environmentally sustainable economic activities.

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