SCHRODER INCOME GROWTH FUND PLC

Interim / Quarterly Report • Jun 3, 2025

Schroder Income Growth Fund plc

Half Year Report For the six months ended 28 February 2025

Performance Summary Total returns (including dividends reinvested) for the six months to 28 February 2025

Net asset value ("NAV") per share*

2.9%

(31 August 2024: 19.0%)

Share price 1.8%

(31 August 2024: 17.7%)

NAV per share 322.65p (31 August 2024: 333.54p)

Some of the financial measures are classified as Alternative Performance Measures ("APMs"), as defined by the European Securities and Markets Authority and are indicated with an asterisk (*). Definitions of these performance measures, and other terms used in this report, are given on pages 20 and 21 together with supporting calculations where appropriate.

Investment objectives

The principal objectives of Schroder Income Growth Fund plc (the "Company") are to provide real growth of income in excess of the rate of inflation, and capital growth as a consequence of the rising income.

What does the Company seek to achieve?

l Benefit from consistent rising income

The Company has delivered reliable dividend growth for shareholders in each of the last 29 years, allowing investors to capture the significant power of long-term compounding.

l Rely on decades of deep expertise Managed by Schroders' Head of UK Equities, Sue Noffke, and Co-Manager, Matt Bennison, who are part of an investment team with over 55 years of combined experience.

l Capture long-term capital growth Strong long-term performance through successful stock-picking, with the team repeatedly adding value across the market cap spectrum.

The investment objectives of the Company are set out above. For details on the Company's investment policy please see the Key Information Document ("KID"). This half year report should be read in conjunction with the KID before investing; the KID is available on the Company's web pages www.schroders.com/incomegrowth.

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. Performance data does not take into account any commissions and costs, if any, charged when units or shares of any fund, as applicable, are issued and redeemed. Relevant risks as associated with this Company are shown on page 23 and should be carefully considered before making any investment.

Ongoing charges ratio* 0.79%

(31 August 2024: 0.79%)

Gearing* 12.3% (31 August 2024: 12.2%)

Share price discount to NAV per share 11.6%

(31 August 2024: 10.4%)

Share price 294.00p

(31 August 2024: 299.00p)

Revenue earnings per share 2.84p

(31 August 2024: 11.64p)

Net revenues after taxation £1.97m (31 August 2024: £8.08m)

Chairman's Statement	4
Investment Managers' Review	6
Investment Portfolio	11
Interim Management Statement	12

Financial

• Statement of Comprehensive Income 14
• Statement of Changes in Equity 15
• Statement of Financial Position 16
• Notes to the Financial Statements 17

Other Information

Alternative Performance Measures
and Definitions of Financial Terms	20
Shareholder Information	22
Risk Disclosures	23
Information about the Company	24

This is not a sustainable product for the purposes of the FCA rules. References to the consideration of sustainability factors and ESG integration should not be construed as a representation that the Company seeks to achieve any particular sustainability outcome.

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Other Information

Interim Management Report

Chairman's Statement	4
Investment Managers' Review	6
Investment Portfolio	11
Interim Management Statement	12

The aim of your Company is to deliver excellent long-term performance to shareholders. In this respect, costs, the volatility of any discount to NAV, and the fact we can use leverage to raise returns and reserves to support dividend growth are all tools to boost shareholder outcomes.

I am pleased to present the half year results of your Company for the six months ended 28 February 2025.

Performance

After a strong financial year to 31 August 2024, it is disappointing that your Company underperformed the FTSE All-Share Index (the "Index") in the six month period to 28 February 2025, with a NAV total return of 2.9% compared with 5.2% for the Index. The share price total return of 1.8% was also lower than the NAV total return, with the discount to NAV increasing slightly from 10.4% to 11.6%, in line with a generally widening trend for investment trust discounts.

Underperformance reflects certain stock and sector positions, discussed in detail in your Investment Managers' review on the following pages. It also reflects an overweight position versus the Index in smaller and medium-sized companies during a period in which large-cap stocks outperformed. Longer-term, the track record remains above the Index since the current team took over in 2011 and mid-cap remains a fertile opportunity source.

Between 28 February 2025 to 12 May 2025, the NAV and share price have delivered total returns of –0.6% and 3.9% respectively, versus the return for the Index of –1.8%.

Revenue, dividends and a smoother distribution

Your Company has paid a first and second interim dividend for the year ending 31 August 2025 ("FY 2025") of 3.25 pence per share (2024: 2.50 pence per share). The increase in the first and second interim dividends from 2.50 pence per share in 2024 to 3.25 pence per share in FY 2025 demonstrates your Board's intention to provide shareholders with a more consistent dividend distribution in the 2025 financial year and beyond. As a result, the share of the total dividend linked to the first three interim dividends for FY 2025 is anticipated to be greater than in previous financial years, with the fourth interim dividend projected to be lower.

The income from investments received by your Company during the first half of the financial year fell by 3.9% compared to the same period last year. This is because of stock picking decisions made by your Investment Managers, which have led to the receipt of income

being more heavily weighted to the second half of the financial year. There has also been a clear trend of companies now considering a wider range of strategies for returning surplus funds to shareholders, with an increased emphasis on share buybacks over dividends. This reflects the low absolute valuation of UK companies.

Your Company has revenue reserves of 7.8 pence per share (based on shares outstanding at the period end) after paying the first and second interim dividend; equivalent to 57% of the dividends paid last year. These reserves are available to support the level of dividend you receive, and this capability continues to be a significant benefit of our investment trust compared to other saving vehicles.

Your Board was pleased to deliver an increased dividend for the 29th consecutive year for the year ended 31 August 2024 and continues to aim to retain AIC "Dividend Hero" status. Your Board remains dedicated to delivering portfolio income supplemented, when necessary, by using revenue reserves to provide growing income for our shareholders.

Gearing

Your Company has in place a £30 million revolving credit facility with The Bank of Nova Scotia, London Branch, expiring in September 2025. The average gearing during the period was 12.3%. This made a contribution, net of financing costs, to your Company's income. As of 12 May 2025, gearing was 11.1%.

Discount management

I am acutely aware of the importance shareholders place on the discount of share price to NAV. Your Board has an active approach to this challenge and regularly reviews the level and volatility of discount and the effectiveness of your Company's discount control mechanisms. Your Board is prepared to act where appropriate, including share buybacks, to help manage the discount in the interests of shareholders.

Your Board believes that sustained investment performance, clear communication of the Company's strategy, and effective shareholder engagement are key to supporting a healthy rating over the long-term.

Your Company's discount to NAV at the period end amounted to 11.6%.

During the six months to 28 February 2025, your Company bought back 211,100 ordinary shares, equating to 0.3% of your Company's issued share capital (excluding treasury shares), for a sum of £611,204, to be held in treasury. The average price paid per share was £2.87.

Post period end, and as at 12 May 2025, your Company bought back a further 373,486 ordinary shares into treasury for a sum of £1,099,866. As at 12 May 2025, the discount to NAV was 7.4% compared to 11.6% at the end of the period.

Shareholder engagement

Your Board is aware of the increasing focus across the investment trust sector on issues such as discount management, capital allocation, and governance, often driven by more active shareholder engagement. Your Board remains committed to maintaining high standards of governance and to acting in the best interests of all shareholders. We regularly review the Company's structure, performance, and shareholder alignment to ensure it continues to meet the evolving expectations of the market. In this context, shareholders are reminded that they will have the opportunity to vote on the continuation of the Company at the Annual General Meeting this year and every five years thereafter.

Enhancing shareholder returns

The aim of your Company is to deliver excellent long-term performance to shareholders. In this respect, costs, the volatility of any discount to NAV, and the fact we can use leverage to raise returns and reserves to support dividend growth are all tools to boost shareholder outcomes.

Therefore, I am pleased to announce a series of measures which we hope will enhance returns per share.

One of the largest elements of costs is the fee paid for investment management services provided by Schroders. I am pleased to announce that this will be reduced from 0.45% to 0.40% with effect from 1 September 2025. Furthermore, such fees will be charged on the lesser of market capitalisation or NAV of your Company. In addition, the separate fee for secretarial and administration services will be eliminated. The positive effect of these moves, all other things being equal, will be an annual cost reduction of over £300,0001 (at an assumed prevailing 10% discount to NAV) or 0.4p per share.

Furthermore, your Board are adopting an increasingly active attitude to managing the volatility and level of any discount of share price to NAV. Our objective is to reduce the discount's volatility and look to maintain the discount to NAV within a single-digit range, in normal market conditions, that we believe reflects the underlying strength of the portfolio and is in the shareholders' long-term interests.

I am also pleased to announce the promotion of Matt Bennison to Co-Manager of your Company, bringing his experience to work alongside Sue Noffke, Head of UK Equities, effective immediately. Matt began his investment career at Schroders in 2012 and has worked with Sue since 2015 as part of the Schroders' UK Prime team. For eight years, since 30 September 2017, he has supported your Company's portfolio and that same year expanded his role to include fund management responsibilities, becoming co-manager of the Prime UK Equity strategy. The appointment reflects our commitment to strengthening your Company's investment

management team and ensuring continuity in our strategy to deliver long-term value for shareholders.

I am very happy with the support we have received from Schroders in agreeing to our proposals. Such support allied to an investment team which has produced added value over index returns and dividend growth above the market average across many years should encourage shareholders to believe your interests are paramount in the running of your Company.

Outlook

The underperformance against the FTSE All-Share Index during the period under review was concentrated on stock selection in several sectors, most notably consumer discretionary, industrials and consumer staples. This more than offset positive positioning and stock selection in the financial sector, which was the largest contributor to relative performance. Mid- and small-cap exposure, which had contributed to your Company's outperformance in the last financial year, proved a drag against a backdrop of higher macroeconomic and geopolitical risk. However, the freedom to invest across the market capitalisation spectrum has been a key driver of your Investment Managers' longer-term total return outperformance of the Index and could also prove positive in the future if the new UK government can succeed in its mission to return the country to a stable path of economic growth.

Returning to the reporting period, the six months under review and in particular the period since the half year completed in February, have been nothing if not eventful on both the domestic and the geopolitical stage. The half year began on an optimistic note, with UK interest rates falling from post-Covid highs and businesses hopeful of a boost from the incoming government's growth agenda. However, reality failed to match up to expectation, and the employers' National Insurance increases announced in the October Budget, along with a rise in the National Minimum Wage, led to further weakness in the share prices of the UK market's domestic stocks. Additionally, this weighed on GDP growth forecasts and put upward pressure on inflation, leading to a likelihood of fewer and slower further cuts in interest rates.

President Trump's election in November for a second term initially boosted enthusiasm for larger UK-listed companies exposed to the US economy, although actions taken since his inauguration in January have unsettled global markets. At the time of writing, the imposition of tariffs on nations that trade with the US has caused a widespread loss of business and consumer confidence and material stock market volatility. Your Manager and Board continue to believe that sustainable business models backed by strong balance sheets represent the best long-term value for shareholders.

Ewen Cameron Watt

Chairman

13 May 2025

Sue Noffke Head of UK Equities

Matt Bennison Co-Manager

The UK equity market has been long unloved. At current prices it trades at valuations which are at a 20% discount to both its own long run history and other international equity markets. It would not take much, for even a small move out of US equities were it to be redirected towards the UK equity market, to move the dial on valuations.

Introduction

The six months under review have been eventful including numerous elections notably in the US, a far-reaching budget in the UK, and heightened tensions surrounding Ukraine and the Middle East. Against an uncertain backdrop, your Investment Managers have continued to apply their rigorous and disciplined investment approach, aiming to take advantage of mispriced opportunities while delivering a sustainable stream of income alongside the potential for capital appreciation.

Your Company's NAV total return in the six months to 28 February 2025 was 2.9%. This compares to 5.2% for the FTSE All-Share Index. The share price total return was 1.8%, as the discount to NAV increased slightly from 10.4% to 11.6%, in line with a generally widening trend for investment trust discounts.

Revenue after tax decreased by 7.1% versus the same period last year. Investment income fell by 3.9% with higher average finance and other costs weighing on revenues. There were no special dividends received in the period – the first time in 10 years – as companies which previously may have chosen to return surplus capital to shareholders in the form of dividends did so instead via share buybacks. Excluding the impact of special dividends, ordinary dividend income generated in the period was flat. The environment for dividend growth remains relatively muted, reflecting a capital allocation preference for share buybacks amid low equity valuations, and in some cases pursuit of organic investment opportunities. It is important to note that your Company receives approximately one third of its income in the first half and around two thirds in your Company's second half. This is due to the heavy weight of final dividends concentrated in the March to August period; 11 holdings, representing 24.4% of assets, pay all their income in the Company's second half.

Compared to previous periods, a larger proportion of holdings either maintained their dividends (9.1%) or modestly increased them (31.3%), broadly keeping pace with inflation. This included companies within a broad set of sectors from property and financials to consumer and industrials. There was a small headwind from currency movements on dividends which are declared in US dollars and then converted to sterling. A handful of portfolio holdings increased their dividends strongly, by more than 10% – investment company 3i, pensions consulting business XPS Pensions, food manufacturing company Cranswick, and business services company Bunzl. A further five holdings increased their dividends between 5% and 10% including pharmaceutical company AstraZeneca together with mid-cap holdings in construction company Balfour Beatty, and defence services business QinetiQ. Luxury goods company, Burberry, did not pay a dividend in the period, to preserve strength of its balance sheet as it invests in its operational turnaround. Power utility company, National Grid, rebased its dividend lower as it pivots its capital allocation to incorporate a higher investment phase in growth projects – it also raised £6 billion through a rights issue, which we supported, to pursue these opportunities. Housebuilder Taylor Wimpey pays an attractive yield of around 9%. However, the dividend for the period was slightly lower than the amount declared for the same period in the previous year. This is due to the company calculating dividends as a return of 7.5% of its net assets per annum, which experienced a slight decrease. Hollywood Bowl paid a reduced final dividend in the period, although we note that its ordinary dividend for its full year increased modestly. The company opted to forgo paying a special dividend, as it has done in many prior years, in favour of a share buyback.

As your Investment Managers have previously noted, there is a continuing shift in the capital allocation policies of some UK companies, with a greater focus on total shareholder returns

through the use of share repurchases as well as the payment of dividends. According to Computershare's Q1 2025 report, the pace of share buybacks accelerated in the second half of 2024. The annual total for 2024 of £63.2 billion was up almost 6% on levels seen in 2023. Total shareholder returns in 2024 – dividends plus share buybacks - was £153.4 billion, giving a shareholder yield of over 6%.

In the six months to 28 February 2025, a total of 24 holdings conducted share buybacks over the period, representing 60.7% of the portfolio by average weight. The UK market has been broadly out of favour with international investors for the best part of a decade, and when shares are trading below their intrinsic value, it is immediately accretive for companies to deploy capital in buying back and cancelling some of their shares. All else being equal, this also has the effect of increasing the dividends per share.

Market background

The first half of your Company's 2025 financial year began with a new Labour government, which promised to prioritise economic growth. There was a solid global economic backdrop, dominated by US exceptionalism, which featured vibrant economic growth and investment. However, in the lead up to October's main fiscal event, the new UK government highlighted the problems facing the nation and delivered one of the most far-reaching Budgets in many years, which included increases in national insurance for employers as well as National Minimum Wage increases. Consumer and business confidence took a hit and has led to sustained weakness in share prices of the UK market's domestic stocks, particularly in small and mid-sized companies.

In the US, Donald Trump's victory in the November election for a second term initially boosted market sentiment for larger UK-listed companies that were exposed to the US economy. The strength of the dollar provided a further tailwind to the performance of those companies with significant international earnings. However, since President Trump's inauguration in January, the new President has contributed to an increasingly uncertain geopolitical and business environment with a slew of executive orders which targeted government efficiency and tariffs on all countries exporting to the US and particularly China. In this more uncertain environment, small and mid-sized companies have struggled to perform, both in the UK and elsewhere in the world.

Your Investment Managers, who have the freedom to invest across the UK market wherever they see the best opportunities for income and capital growth, have maintained a significant overweight position in smaller and mid-sized companies, which has weighed on performance in the period under review. Valuations remain appealing, and it is your Investment Managers' view that there are many attractively valued small and mid-sized companies.

Portfolio performance

After outperforming the FTSE All-Share Index return by 2% in NAV total returns in the year ended 31 August 2024, your Company faced a more challenging environment in the six months to 28 February 2025. This period saw underperformance, particularly affecting domestic businesses and those outside the large-cap FTSE 100 Index. Mid and small-sized companies experienced declines in share prices, with the FTSE 250 ex Investment Trusts and the FTSE SmallCap ex Investment Trusts indices falling by 4.2% and 7.3%, respectively. In contrast, the largest businesses in the FTSE 100 achieved a positive total return of 6.5% over the same period. This performance divergence by size impacted your Company's portfolio, which has greater exposure to small and mid-sized companies, +7.3% relative to benchmark and consequently a significant underweight position of -8.2% in larger companies.

As well as the impact of size, underperformance was a result of adverse stock selection in several sectors, most notably consumer discretionary, industrials and consumer staples. This more than offset positive positioning and stock selection in the financial sector, which was the largest contributor to relative performance.

Five top/bottom relative performers

	Portfolio weight1 (%)	Weight to index2 (%)	Relative relative perform- ance3 (%)	Impact (%)
Standard Chartered	3.6	+2.8	+57.7	+1.3
Burberry	1.5	+1.3	+57.5	+0.5
Pearson	2.7	+2.3	+23.8	+0.5
3i Group	3.6	+2.2	+20.5	+0.4
Lloyds Banking	3.1	+1.6	+19.6	+0.3

	Portfolio weight1 (%)	Weight to index2 (%)	Relative relative perform- ance3 (%)	Impact (%)
Rolls Royce	0.0	–2.0	+44.7	–0.8
QinetiQ	2.8	+2.7	–20.7	–0.6
Pets at Home	1.8	+1.7	–27.4	–0.6
Taylor Wimpey	1.5	+1.3	–32.6	–0.5
Barclays	0.0	–1.6	+33.6	–0.5

Source: Schroders, Aladdin, for Schroder Income Growth investment portfolio, six months to end February 2025.

1 Average weights over the period.

2 Total return of the stock relative to the FTSE All-Share TR over the period. 3 Contribution to performance relative to the FTSE All-Share TR. The securities shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell.

At a sector level, the main driver of negative relative returns was stock selection in the consumer discretionary area, where the portfolio is overweight compared to the Index. Two significant detractors in this sector were retail and veterinary business, Pets at Home, and housebuilder Taylor Wimpey. Pets at Home has been affected by a long-running Competition & Markets Authority investigation into veterinary pricing, and recent increases in National Insurance contributions and the National Minimum Wage have added pressure on its share price. Taylor Wimpey must balance the countervailing factors of a more favourable planning backdrop and a higher-for-longer interest rate environment, which is putting pressure on mortgage affordability. Management have retained a policy of paying out a sum equivalent to 7.5% of net assets, and its dividend yield at the time of writing is nearly 9%.

Within industrials, stock selection in aerospace and defence businesses was detrimental. Rolls Royce, which your Company's portfolio does not own, has performed well throughout the past year, as order books strengthened with a strong post-Covid pandemic recovery in both civil and defence aerospace end markets. Defence services business QinetiQ, which is held, disappointed, despite enjoying some of the same tailwinds. The US election result brought uncertainty for the defence sector, weighing more on its share price.

An overweight exposure together with stock selection in the utilities sector also detracted from relative returns. Concerns regarding the UK fiscal position in the wake of the UK government's budget led to a rise in UK bond yields which weighed on sectors with 'bond proxy' like characteristics such as utilities. Your Company's holdings in this area are concentrated in electricity generation, distribution and

Investment Managers' Review continued

supply, through holdings in National Grid and SSE. The main detractor was SSE. Despite this short-term weakness, both companies have strong medium to long-term growth outlooks given significant investment requirements in the UK electricity grid.

On the positive side, the biggest impact came from the overweight position in the financial sector. Banks have delivered strong dividend increases and share buybacks, boosting total shareholder return. Standard Chartered, whose core customer base is in Asia, was the top contributor. The more domestically focused Lloyds Banking Group and NatWest also performed well. Private equity investor 3i added to returns, driven by strong performance from its main holding, European discount retailer Action, which is continuing to expand its store estate as muted consumer confidence sees shoppers embracing more budget-friendly options.

Your Company did have some positive positions within consumer discretionary with luxury goods group Burberry and education publisher Pearson. Burberry's share price has moved higher from its distressed levels in September 2024. Your Investment Managers engaged throughout 2024 due to the disappointing performance and had early access to the new CEO, and also met with the chair and non-executive directors. Management's clarity on their turnaround strategy, and your Investment Managers' scenario analysis work, resulted in adding to the portfolio's holding on this share price weakness. Although Burberry has yet to reinstate its dividend, its capital performance illustrates the benefit of owning non-yielding stocks. Meanwhile, education publisher Pearson has been a beneficiary of dollar strength given its international footprint, and has seen its operational and financial performance improve under its new chief executive. Pearson's advances in its use of digital technology, including embedding AI study tools in some of its products, lead your Investment Managers to be hopeful that the company can begin to emulate the success of RELX, which also has its roots in paper-based publishing but has transformed itself into a digital information business that is now the UK's fifth-largest listed company.

The use of gearing, a key benefit of your Company's investment trust structure, was also positive for performance in the period under review, even once costs were considered.

Portfolio activity

During the period, your Investment Managers sold out of five positions and added four new holdings.

Exited and trimmed positions

As ever, your Investment Managers have closely monitored existing positions. Disruption to the automotive industry distribution channels from the export success of Chinese care manufacturers led to a re-evaluation of the investment thesis for Inchcape, and its disposal from the portfolio. A reassessment of the path for UK interest rates led to the disposal of British Land. Elsewhere, power company Drax Group was sold, and several holdings were trimmed following strong share price performance, including XPS Pensions, telecoms business BT Group, and QinetiQ. Although QinetiQ was a detractor for the period, it initially performed well along with the rest of the defence sector during the geopolitical uncertainty of early 2025; therefore, the position was trimmed into share price strength.

Drax Group has performed well but is reliant on government subsidy as one of the largest developers of BECCS ("Bioenergy with carbon capture and storage") in both the UK and US. BECCS is one of the key carbon capture technologies that will be needed to help the UK hit its Net Zero ambitions. However, to make the economics of biomass work, Drax needs to implement BECCS on a large scale, which requires government funding. With public finances stretched, your Investment Managers saw it was difficult to sanction large projects with unproven returns and this elevated the risk for the holding. US BECCS has been another growth angle. However, this option looked challenged by the Trump Administration's preference for traditional fossil fuel energy sources. As a result, following a strong run in the shares, the position was sold.

Global automotive distributor Inchcape (1.7% of the portfolio at the start of the period) was another complete exit. The traditional automotive sector is undergoing a period of notable change, as Chinese carmakers take significant market share globally, and companies like Tesla have direct-to-market strategies that bypass traditional distributors. This threatens the "status quo'" of the industry, creating uncertainty for the Inchcape business model, which relies upon distribution relationships primarily with more established "traditional" auto manufacturers. Your Investment Managers sold the holding.

The position in British Land (a new holding in the previous year, and 0.9% of the portfolio at the start of the period under review) was closed out as it became clear, following the October Budget, that interest rates would not be reducing at the pace or to the extent your Investment Managers had previously expected.

Small positions in gaming company Evoke (previously 888) and industrial polymer specialist Victrex (both 0.4% of the portfolio at the start of the period) were also exited.

Within pharmaceuticals, your Investment Managers re-positioned the portfolio's holdings by reducing GSK in favour of AstraZeneca. While GSK settled most of the litigation claims in relation to its drug Zantac at a lower cost than many had expected, disappointment within the group's vaccine franchise for respiratory syncytial virus and shingles led to earnings downgrades, undermining the valuation appeal. In addition, there are fewer pipeline catalysts in 2025 compared with AstraZeneca to generate interest in the investment case.

New holdings and additions

The capital from these divestments has been recycled into opportunities your Investment Managers believe are more compelling. Additions to existing holdings where your Investment Managers have conviction for their long-term prospects include banks, notably HSBC, and other financials such as asset manager ICG, inter-dealer broker TP-ICAP, as well as consumer healthcare business Haleon, and luxury retailer Burberry.

Burberry was an example of your Investment Managers' active engagement process in action. The stock was a major detractor in the prior year, with poorly timed and executed strategic shifts as well as a profit warning and the cancellation of its dividend. The team engaged with the company on four separate occasions in 2024, helping to encourage changes such as the appointment of a new CEO, Josh Schulman, who has experience of steering corporate turnarounds in the luxury sector. After a detailed scenario analysis, modelling both downside risks and upside potential, your Investment Managers materially added to the position in September (having previously reduced it on the back of poor performance), a stance that was swiftly vindicated as the share price rallied by circa 90% between early September and the end of the period under review.

Housebuilder Taylor Wimpey was another significant addition after share price weakness following the Budget (with sustained higher interest rates putting pressure on mortgage affordability). Your Investment Managers believe it should be a beneficiary of the Government's pledge to increase the number of houses being built.

Financial

Meanwhile, with the share price barely above the levels seen at the start of the Covid pandemic or the Truss/Kwarteng mini-Budget of 2022, the medium-term value opportunity looks compelling.

New to the portfolio is International Airlines Group, which is well-positioned within a robust airline industry. The impact of the Covid pandemic has led to reduced capacity, and ongoing supply chain challenges are limiting the availability of new aircraft. This supply constraint coincides with increasing demand for air travel, driven by rising consumer spending on holidays and a recovery in business travel, especially long-haul flights. As a result, airlines, including IAG, are enjoying strong pricing power. IAG also benefits from an appealing geographical footprint, a solid portfolio of brands, strong cash generation, and significant opportunities for improvement through technology upgrades. These factors should enable the company to deliver earnings growth earnings and free cash flow in the coming years.

Also, among the buys, global drinks giant Diageo was perhaps not so 'new' as a modest position was held in the portfolio during the previous year but then exited on fears that the destocking cycle would be more damaging than expected. Having reassessed the thesis in recent months, your Investment Managers bought back in to the company. This followed a rebasing of profits expectations for the near term, further underperformance of the shares (meaning they offered compelling value) and the appointment of an experienced and well-regarded chief financial officer who could drive efficiencies. With the destocking cycle now more advanced, sales could be close to a trough, pointing to the possibility of a recovery.

Your Investment Managers also initiated a holding in premium drinks mixer brand Fevertree Drinks (an AIM-listed mid-cap stock), which has teamed up with Molson Coors to undertake a capital-light distribution arrangement for the US that should underpin cash generation coming back to shareholders.

Your Investment Managers commenced buying a position in Telecom Plus, which operates as a Utility Warehouse, a provider of bundled home services including energy, broadband, mobile and insurance into one monthly bill. Customers save money through deals that the company is able to strike with its suppliers.

Outlook

US exceptionalism, riding high at the turn of the calendar year, has been replaced by policy uncertainty of unprecedented levels. President Trump 2.0 has sought to change the world order on both trade, and security and defence. There are truths at the heart of both these issues – that the US has borne more than its fair share of costs but also benefitted from buying goods cheaply from the rest of world, whilst the rest of the world funded the US government through purchases of US Treasury bonds and US dollars. President Trump's so called "reciprocal tariffs" were larger and more wide ranging than had been anticipated. This resulted in significant volatility in global equity markets and the US bond market during April, together with weakness in the US dollar.

The impact of President Trump's approach to defence spending, and attempts to resolve the ongoing conflict between Russia and Ukraine, has succeeded in spurring European countries to commit to future increased spend on defence, in absolute terms and as a proportion of their GDP. The newly elected German government has released its fiscal debt brake and looks set to spend significant sums on defence and infrastructure projects which could, all other things being equal, provide a boost to the German and European economy.

Bond markets tested the US administration's resolve. Sharply rising yields provoked a U-turn from Trump when on 9 April he announced a 90 day pause on tariffs for all but China. This, together with moves to carve out specific sectors with targeted tariffs, such as consumer electronics and autos, may be sufficient to have cut the tail risks of a major recession, however many possible outcomes, and risks remain. At the time of writing, there are signs of a thaw in US – China relations, as well a proposed deal between the US and Ukraine on minerals.

President Trump's "Liberation Day" was followed by a blizzard of announcements, U-turns, 90 day reprieves, and escalation of tariffs against China. The situation is fluid and ongoing, we anticipate there could be several more twists and turns and that de-escalation is likely. There will likely be much debate over the path of the US and thus global economy. In the shorter-term, inflation expectations have increased, consumer and business sentiment has declined, and slower growth is expected. The rest of world could see a slowdown in the rate of inflation – from falling energy costs, exchange rate movements, and as goods previously destined for the US get redirected to other countries. Interest rates outside of the US could fall further and faster than previously anticipated. Your Investment Managers anticipate that central banks around the world stand ready to respond with accelerated rate cuts, as necessary. The markets are currently pricing between three and four cuts, of one quarter of a percent, in Europe, the UK, and the USA. The US Federal Reserve will likely tread more carefully until the US economic situation becomes clearer.

It is too early to know whether the events of the past few weeks of President Trump's presidency will lead to a reassessment of asset allocation on the part of investment managers seeking to diversify from their portfolio concentration in US assets.

Meanwhile flows out of UK equities have continued at pace over the first quarter of 2025. These outflows have continued to weigh on valuations, particularly at the small and mid-cap end of the market spectrum. This has spurred a wide range of companies to use their surplus cash to commence or extend buying their own shares for cancellation. As stated in previous reports, your Investment Managers view UK equity market valuations as having more cushion to absorb disappointment than the more highly valued US equity market – where downside risk is neither priced into market earnings expectations nor valuation multiples. By contrast, the UK equity market has been long unloved. At current prices it trades at valuations which are a 20% discount to both its own long run history and other international equity markets. It would not take much, for even a small move out of US equities were it to be redirected towards the UK market, to move the dial on valuations.

The UK economic backdrop has remained one of sluggish growth and moderating inflation. Increased employment costs, including the National Minimum Wage and National Insurance costs from April 2025, are an inflationary pressure. However, sterling's strength against the US dollar, together with falls in oil prices and energy costs, and an element of redirected goods no longer destined for the large US consumer market, if sustained, could provide an offset. Corporate and consumer balance sheets are in good health with household savings rates of 12% at 25-year highs, except for the Covid period. According to Computershare, UK dividend prospects for 2025 are "relatively muted" with lower special dividends but median growth at the company per share level expected to continue around 4%. Exchange rate movements, if sustained, would moderate that growth from the market. Your Investment Managers continue to see attractive long-term opportunities in under owned and under researched areas of the UK equity market – particularly in

Investment Managers' Review

continued

domestic and smaller sized companies where share price performance has lagged that of larger sized companies and other equity markets.

While there are many uncertainties to consider, in such circumstances your Investment Managers draw on past experiences of market dislocations and economic uncertainty (Covid pandemic, LDI/Truss Crisis, Brexit, Global Financial Crisis), and tread carefully. Your Investment Managers use their tried and tested investment process that shape their investment decisions. The focus is on the fundamentals of the portfolio companies and taking a longer-term view. Your Investment Managers evaluate upside as well as downside risks, as well as seek out potential opportunities. It is vital to avoid reacting to short-term share price pressures and back portfolio holdings where your Investment Managers believe the investment thesis is intact. Sticking with portfolio holdings where your Investment Managers believe the fundamentals offer longer-term shareholder value is how they have achieved consistency in their long-term track record. Your Investment Managers see the longer-term outlook for your portfolio holdings as very encouraging but accept that the near term is especially uncertain.

Your Investment Managers' activity across the portfolio since the end of February has been to balance the twin objectives of your Company. Firstly, a focus on generating dividend income from the portfolio over the key period for holdings paying their large final dividends and secondly, a focus on capital returns for shareholders over the longer-term.

Mining exposures have been switched (Glencore to Rio Tinto) and then reduced (Rio Tinto exited) following dividend payments being secured. Industrials exposures, already underweight, have been moderated further (we exited Bunzl and Johnson Matthey and reduced QinetiQ). Within the broad industrial sector group, your Investment Managers have used the market volatility to add higher quality names where share prices offered attractive entry points for investors with longer-term horizons; (testing and assurance company, Intertek and defence contractor, BAE Systems). Within financials, holdings have been broadened with new positions taken in higher yielding companies - speciality insurance provider, Lancashire Holdings and Italian bank Intesa Sanpaolo, after exiting investment group M&G following payment of its dividends. Your Investment Managers further increased their overweight position in the UK utilities sector with additions to National Grid and SSE.

Sales of various higher yielding holdings, post their dividend payments, has increased cash in the portfolio and moderated the level of gearing. Investments are focused on strongly positioned and financed companies, trading at attractive valuations, and offering in aggregate, attractive levels of dividend yield with the prospects of growth in that income stream over the longer-term.

Schroder Investment Management Limited

13 May 2025

Investment Portfolio as at 28 February 2025

Introduction

Companies in bold represent the 20 largest investments, which by value account for 67.7% (29 February 2024: 66.1% and 31 August 2024: 66.9%) of total investments.

All companies are headquartered in the UK unless otherwise stated. All investments are equities, listed on a recognised stock exchange.

	£'000	%		£'000	%
Financials			Industrials
HSBC	15,486	5.9	QinetiQ	6,201	2.4
Standard Chartered	12,166	4.7	Bunzl	5,907	2.3
3i Group	10,037	3.8	Balfour Beatty	5,202	2.0
Lloyds Bank	9,715	3.7	Total Industrials	17,310	6.7
Intermediate Capital	8,345	3.2	Oil and Gas
Legal & General	6,935	2.7	Shell	16,074	6.2
TP ICAP	5,396	2.1	Total Oil and Gas	16,074	6.2
Natwest	5,271	2.0	Basic Materials
Empiric Student Property	4,509	1.7	Glencore2	6,470	2.5
Prudential1	4,218	1.6	Anglo American	5,315	2.1
M&G	3,946	1.5	Johnson Matthey	2,919	1.2
Assura	2,994	1.2	Total Basic Materials	14,704	5.8
Total Financials	89,018	34.1	Utilities
Consumer Services			National Grid	8,688	3.4
Pearson	7,639	3.0	SSE	5,814	2.3
RELX	7,401	2.9
Whitbread	4,164	1.6	Total Utilities	14,502	5.7
Pets at Home	4,050	1.6	Telecommunications
International Consolidated Airlines	3,860	1.5	BT	5,137	2.0
Hollywood Bowl	3,847	1.5	Telecom Plus	541	0.2
Haleon	3,757	1.5	Total Telecommunications	5,678	2.2
XPS	2,555	1.0	Technology
ITV	1,490	0.6	Computacenter	2,006	0.8
Total Consumer Services	38,763	15.2	Total Technology	2,006	0.8
Healthcare			Total Investments	258,324	100.0
AstraZeneca	18,071	6.9	1 Prudential plc is headquartered in London and Hong Kong.
ConvaTec	5,374	2.1	2 Glencore plc is headquartered in Switzerland.
GSK (GlaxoSmithKline)	5,359	2.1
Smith & Nephew	2,525	1.0
Total Healthcare	31,329	12.1
Consumer Goods
Unilever	8,924	3.4
Taylor Wimpey	5,183	2.0
Burberry	5,115	2.0
Cranswick	4,170	1.6
Diageo	3,351	1.3
Fevertree Drinks	2,197	0.9
Total Consumer Goods	28,940	11.2

Industrials
QinetiQ	6,201	2.4
Bunzl	5,907	2.3
Balfour Beatty	5,202	2.0
Total Industrials	17,310	6.7
Oil and Gas
Shell	16,074	6.2
Total Oil and Gas	16,074	6.2
Basic Materials
Glencore2	6,470	2.5
Anglo American	5,315	2.1
Johnson Matthey	2,919	1.2
Total Basic Materials	14,704	5.8
Utilities
National Grid	8,688	3.4
SSE	5,814	2.3
Total Utilities	14,502	5.7
Telecommunications
BT	5,137	2.0
Telecom Plus	541	0.2
Total Telecommunications	5,678	2.2
Technology
Computacenter	2,006	0.8
Total Technology	2,006	0.8
Total Investments	258,324	100.0

Principal risks and uncertainties

The principal risks and uncertainties with the Company's business fall into the following risk categories: strategic; investment management; economic and market; custody; gearing; accounting, legal and regulatory; service provider; cyber; and ESG and climate change. A detailed explanation of the risks and uncertainties in each of these categories can be found on pages 24 to 26 of the Company's published annual report and financial statements for the year ended 31 August 2024.

The Company's principal risks and uncertainties have not materially changed during the six months ended 28 February 2025.

Going concern

Having assessed the principal risks and uncertainties, and the other matters discussed in connection with the viability statement as set out on page 27 of the published annual report and financial statements for the year ended 31 August 2024, the Directors consider it appropriate to adopt the going concern basis in preparing the financial statements.

Related party transactions

There have been no transactions with related parties that have materially affected the financial position or the performance of the Company during the six months ended 28 February 2025.

Directors' responsibility statement

In respect of the half year report for the six months ended 28 February 2025, the Directors confirm that, to the best of their knowledge:

• the condensed set of Financial Statements contained within have been prepared in accordance with the United Kingdom Generally Accepted Accounting Practice in particular with Financial Reporting Standard 104 "Interim Financial Reporting" and with the statement of Recommended Practice, "Financial Statements of Investment Companies and Venture Capital Trusts" issued in July 2022 and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company as at 28 February 2025, as required by the Disclosure Guidance and Transparency Rule 4.2.4R; and
• the half year report includes a fair review of the information as required by the Disclosure Guidance and Transparency Rules 4.2.7R and 4.2.8R.

The half year report has not been audited or reviewed by the Company's Auditor.

Ewen Cameron Watt

Chair For and on behalf of the Board 13 May 2025

Financial

13

Financial

Statement of Comprehensive Income 14 Statement of Changes in Equity 15 Statement of Financial Position 16 Notes to the Financial Statements 17

Statement of Comprehensive Income

for the six months ended 28 February 2025 (unaudited)

		(Unaudited) For the six months ended 28 February 2025 Revenue Capital Total		Revenue	(Unaudited) For the six months ended 29 February 2024 Capital	Total	(Audited) For the year ended 31 August 2024 Revenue Capital Total
Gains on investments held at fair	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
value through profit or loss		–	5,098	5,098	–	2,500	2,500	–	30,756	30,756
Net foreign currency gains		–	–	–	–	23	23	–	23	23
Income from investments		2,878	–	2,878	2,995	–	2,995	9,742	275	10,017
Other interest receivable and similar income		–	–	–	–	–	–	142	–	142
Gross return		2,878	5,098	7,976	2,995	2,523	5,518	9,884	31,054	40,938
Management fee		(227)	(341)	(568)	(205)	(307)	(512)	(436)	(654)	(1,090)
Administrative expenses		(329)	–	(329)	(282)	–	(282)	(585)	–	(585)
Net return before finance costs and taxation		2,322	4,757	7,079	2,508	2,216	4,724	8,863	30,400	39,263
Finance costs		(350)	(524)	(874)	(385)	(578)	(963)	(779)	(1,168)	(1,947)
Net return before taxation		1,972	4,233	6,205	2,123	1,638	3,761	8,084	29,232	37,316
Taxation	3	–	–	–	–	–	–	–	–	–
Net return after taxation		1,972	4,233	6,205	2,123	1,638	3,761	8,084	29,232	37,316
Return per share (pence)	4	2.84	6.10	8.94	3.06	2.36	5.42	11.64	42.09	53.73

The "Total" columns of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return after taxation is also the total comprehensive income for the period.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

for the six months ended 28 February 2025 (unaudited)

	Note	Called-up share capital £'000	premium £'000	Capital Share redemption reserve £'000	Warrant exercise reserve £'000	Share purchase reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 August 2024		6,946	9,449	2,011	1,596	34,834	166,344	10,381	231,561
Repurchase of ordinary shares into treasury		–	–	–	–	(615)	–	–	(615)
Net return after taxation		–	–	–	–	–	4,233	1,972	6,205
Dividends paid in the period	5	–	–	–	–	–	–	(6,907)	(6,907)
At 28 February 2025		6,946	9,449	2,011	1,596	34,219	170,577	5,446	230,244

for the six months ended 29 February 2024 (unaudited)

	Note	Called-up share capital £'000	premium £'000	Capital Share redemption reserve £'000	Warrant exercise reserve £'000	Share purchase reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 August 2023		6,946	9,449	2,011	1,596	34,936	137,112	11,882	203,932
Net return after taxation		–	–	–	–	–	1,638	2,123	3,761
Dividends paid in the period	5	–	–	–	–	–	–	(6,113)	(6,113)
At 29 February 2024		6,946	9,449	2,011	1,596	34,936	138,750	7,892	201,580

for the year ended 31 August 2024 (audited)

	Note	Called-up share capital £'000	premium £'000	Capital Share redemption reserve £'000	Warrant exercise reserve £'000	Share purchase reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 August 2023		6,946	9,449	2,011	1,596	34,936	137,112	11,882	203,932
Repurchase of ordinary shares into treasury		–	–	–	–	(102)	–	–	(102)
Net return after taxation		–	–	–	–	–	29,232	8,084	37,316
Dividends paid in the year	5	–	–	–	–	–	–	(9,585)	(9,585)
At 31 August 2024		6,946	9,449	2,011	1,596	34,834	166,344	10,381	231,561

Statement of Financial Position

as at 28 February 2025 (unaudited)

	(Unaudited) 28 February 2025	(Unaudited) 29 February 2024	(Audited) 31 August 2024
Note	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	258,324	229,062	258,409
Current assets
Debtors	633	755	1,909
Cash and cash equivalents	1,773	2,492	1,692
	2,406	3,247	3,601
Current liabilities
Creditors: amounts falling due within one year 6	(30,486)	(30,729)	(30,449)
Net current liabilities	(28,080)	(27,482)	(26,848)
Total assets less current liabilities	230,244	201,580	231,561
Net assets	230,244	201,580	231,561
Capital and reserves
Called-up share capital 7	6,946	6,946	6,946
Share premium	9,449	9,449	9,449
Capital redemption reserve	2,011	2,011	2,011
Warrant exercise reserve	1,596	1,596	1,596
Share purchase reserve	34,219	34,936	34,834
Capital reserves	170,577	138,750	166,344
Revenue reserve	5,446	7,892	10,381
Total equity shareholders' funds	230,244	201,580	231,561
Net asset value per share (pence) 8	332.65	290.20	333.54

Registered in England and Wales as a public company limited by shares.

Company registration number: 03008494

1. Financial Statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditor.

The figures and financial information for the year ended 31 August 2024 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditor which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

Basis of accounting

The financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, in particular with Financial Reporting Standard 104 "Interim Financial Reporting" and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued by the Association of Investment Companies in July 2022.

All of the Company's operations are of a continuing nature.

The accounting policies applied to these financial statements are consistent with those applied in the financial statements for the year ended 31 August 2024.

3. Taxation

The Company's effective corporation tax rate is nil, as deductible expenses exceed taxable income. Taxation on ordinary activities comprises irrecoverable overseas withholding tax.

4. Return per share

	(Unaudited) For the six months ended 28 February 2025 £'000	(Unaudited) For the six months ended 29 February 2024 £'000	(Audited) For the year ended 31 August 2024 £'000
Revenue return	1,972	2,123	8,084
Capital return	4,233	1,638	29,232
Total return	6,205	3,761	37,316
Weighted average number of ordinary shares in issue during the period	69,396,551	69,463,343	69,449,119
Revenue return per share (pence)	2.84	3.06	11.64
Capital return per share (pence)	6.10	2.36	42.09
Total return per share (pence)	8.94	5.42	53.73

5. Dividends paid

	(Unaudited) For the six months ended 28 February 2025 £'000	(Unaudited) For the six months ended 29 February 2024 £'000	(Audited) For the year ended 31 August 2024 £'000
2024 fourth interim dividend of 6.7p (2023: 6.3p)	4,651	4,376	4,376
First interim dividend of 3.25p (2024: 2.5p)	2,256	1,737	1,737
Second interim dividend of 2.5p	–	–	1,737
Third interim dividend of 2.5p	–	–	1,735
	6,907	6,113	9,585

A second interim dividend of 3.25p (2024: 2.5p) per share, amounting to £2,237,325 (2024: £1,737,000) has been declared payable in respect of the year ending 31 August 2025.

6. Creditors: amounts falling due within one year

	(Unaudited) At 28 February 2025 £'000	(Unaudited) At 29 February 2024 £'000	(Audited) At 31 August 2024 £'000
Other creditors and accruals	486	729	449
Bank loan	30,000	30,000	30,000
	30,486	30,729	30,449

The bank loan comprises £30.0 million drawn down on the Company's secured revolving credit facility with The Bank of Nova Scotia, London Branch.

Prior to the start of the new loan agreement with The Bank of Nova Scotia, London Branch, effective 20 September 2024, the Company had an unsecured revolving credit facility with SMBC Bank International plc (29 February 2024 and 31 August 2024: £30.0 million).

7. Called-up share capital

	(Unaudited) For the Six months ended 28 February 2025 £'000	(Unaudited) For the six months ended 29 February 2024 £'000	(Audited) For the year ended 31 August 2024 £'000
Opening balance of ordinary shares of 10p each, excluding shares held in treasury	6,942	6,946	6,946
Repurchase of shares held in treasury	(21)	–	(4)
Subtotal of shares in issue, excluding shares held in treasury	6,921	6,946	6,942
Shares held in treasury	25	–	4
Closing balance of shares in issue of 10p each	6,946	6,946	6,946

Changes to called up share capital during the period/year were as follows:

	(Unaudited) For the six months ended 28 February 2025 £'000	(Unaudited) For the six months ended 29 February 2024 £'000	(Audited) For the year ended 31 August 2024 £'000
Ordinary shares of 10p each, allotted, called-up and fully paid:
Opening balance of shares in issue, excluding shares held in treasury	69,425,343	694,463,343	69,463,343
Repurchase of shares held in treasury	(211,100)	–	(38,000)
Closing balance of shares in issue, excluding shares held in treasury	69,214,243	694,463,343	69,425,343
Shares held in treasury	249,100	–	38,000
Closing balance of shares in issue	69,463,343	694,463,343	69,463,343

8. Net asset value per share

Net asset value per share is calculated by dividing shareholders' funds by the number of shares in issue at 28 February 2025 of 69,214,243 (29 February 2024: 69,463,343 and 31 August 2024: 69,425,343).

9. Financial instruments measured at fair value

The Company's financial instruments that are held at fair value comprise its investment portfolio. At 28 February 2025, all investments in the Company's portfolio were categorised as Level 1 in accordance with the criteria set out in paragraph 34.22 (amended) of FRS 102. That is, they are all valued using unadjusted quoted prices in active markets for identical assets (29 February 2024 and 31 August 2024: all valued using unadjusted quoted prices in active markets for identical assets).

10. Events after the interim period that have not been reflected in the financial statements for the interim period

The Directors have evaluated the period since the interim date and have not noted any other events which have not been reflected in the financial statements.

Other Information

Alternative Performance Measures and
Definitions of Financial Terms	20
Shareholder Information	22
Risk Disclosures	23
Information about the Company	24

Alternative Performance Measures and Definitions of Financial Terms

The terms and performance measures below are those commonly used by investment companies to assess values, investment performance and operating costs. Numerical calculations are given where relevant. Some of the financial measures below are classified as APMs as defined by the European Securities and Markets Authority. Under this definition, APMs include a financial measure of historical financial performance or financial position, other than a financial measure defined or specified in the applicable financial reporting framework. APMs have been marked with an asterisk.

Net asset value ("NAV") per share

The NAV per share of 332.65p (2024: 333.54p) represents the net assets attributable to equity shareholders of £230,244,000 (2024: £231,561,000) divided by the number of shares in issue of 69,214,243 (2024: 69,425,343).

The change in the NAV amounted to –0.3% (year ended 31 August 2024: 13.5%) over the period. However, this performance measure excludes the positive impact of dividends paid out by the Company during the year. When these dividends are factored into the calculation, the resulting performance measure is termed the "total return". Total return calculations and definitions are given below.

Total return*

The combined effect of any dividends paid, together with the rise or fall in the share price or NAV per share. Total return statistics enable the investor to make performance comparisons between investment companies with different dividend policies. Any dividends received by a shareholder are assumed to have been reinvested in either the assets of the Company at its NAV per share at the time the shares were quoted ex-dividend (to calculate the NAV per share total return) or in additional shares of the Company (to calculate the share price total return).

The NAV total return for the period ended 28 February 2025 is calculated as follows:

Opening NAV at 31/08/2024			333.54p
Closing NAV at 28/02/2025				332.65p
Dividend received	XD date	NAV on XD date	Factor	Cumulative factor
6.70p	03/10/2024	320.23p	1.0209	1.0209
3.25p	24/12/2024	308.10p	1.0105	1.0317

NAV total return, being the closing NAV, multiplied by the factor, expressed as a percentage change in the opening NAV: 2.9% The NAV total return for the year ended 31 August 2024 is calculated as follows:

Opening NAV at 31/08/2023			293.58p
			333.54p
XD date	NAV on XD date	Factor	Cumulative factor
05/10/2023	284.17p	1.0222	1.0222
28/12/2023	299.74p	1.0083	1.0307
04/04/2024	308.09p	1.0081	1.0391
	Closing NAV at 31/08/2024

NAV total return, being the closing NAV, multiplied by the factor, expressed as a percentage change in the opening NAV: 19.0%

The share price total return for the period ended 28 February 2025 is calculated as follows:

2.50p 04/07/2024 323.67p 1.0077 1.0471

Opening Share price at 31/08/2024				299.00p
Closing Share price at 29/02/2025				294.00p
Dividend received	XD date	Share price on XD date	Factor	Cumulative factor
6.70p	03/10/2024	289.00p	1.0232	1.0232
3.25p	24/12/2024	278.50p	1.0117	1.0351
Share price total return, being the closing share price,

multiplied by the factor, expressed as a percentage change in the opening share price: 1.8%

The share price total return for the year ended 31 August 2024 is calculated as follows:

Opening Share price at 31/08/2023				267.50p
Closing Share price at 31/08/2024				299.00p
Dividend received	XD date	Share price on XD date	Factor	Cumulative factor
6.30p	05/10/2023	255.00p	1.0247	1.0247
2.50p	28/12/2023	278.00p	1.0090	1.0339
2.50p	04/04/2024	264.00p	1.0095	1.0437
2.50p	04/07/2024	290.00p	1.0086	1.0527
Share price total return, being the closing share price, multiplied by the factor, expressed as a percentage

change in the opening share price: 17.7%

Discount/premium*

The amount by which the share price of an investment trust is lower (discount) or higher (premium) than the NAV per share. If the shares are trading at a discount, investors would be paying less than the value attributable to the shares by reference to the underlying assets. A premium or discount is generally the consequence of supply and demand for shares on the stock market. The discount or premium is expressed as a percentage of the NAV per share.

The discount at the period end amounted to 11.6% (31 August 2024: 10.4%), as the closing share price at 294.00p (2024: 299.00p) was 11.6% (31 August 2024: 10.4%) lower than the closing NAV of 332.65p (31 August 2024: 333.54p).

Introduction Interim Management Report

Gearing*

The gearing percentage re flects the amount of borrowings (i.e. bank loans or overdrafts) which the Company has drawn down and invested in the market. This figure is indicative of the extra amount by which shareholders' funds would move if the Company's investments were to rise or fall. Gearing is de fined as: borrowings used for investment purposes, less cash, expressed as a percentage of net assets. The gearing figure at the relevant period/year end is calculated as follows:

	At 28 February 2025 £'000	At 31 August 2024 £'000
Borrowings used for investment purposes, less cash	28,227	28,308
Net assets	230,244	231,561
Gearing	12.3%	12.2%

Leverage*

For the purpose of the Alternative Investment Fund Managers Directive, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as the ratio of the Company's exposure to its net asset value and is required to be calculated both on a "Gross" and a "Commitment" method. Under the Gross method, exposure represents the sum of the absolute values of all positions, so as to give an indication of overall exposure. Under the Commitment method, exposure is calculated in a similar way, but after netting o ff hedges which satisfy certain strict criteria.

Ongoing Charges*

Ongoing Charges is calculated in accordance with the AIC's recommended methodology and represents the management fee and all other operating expenses excluding finance costs and transaction costs, amounting to £1,753,000 (31 August 2024: £1,675,000), expressed as a percentage of the average daily net asset values during the period of £222.5 million (31 August 2024: £211.7 million).

Warning to shareholders

Companies are aware that their shareholders have received unsolicited telephone calls or correspondence concerning investment matters. These are typically from overseas-based 'brokers' who target UK shareholders, offering to sell them what often turn out to be worthless or high risk shares or investments.

These operations are commonly known as "boiler rooms". These 'brokers' can be very persistent and extremely persuasive.

Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice:

• Make sure you get the correct name of the person and organisation
• Check that they are properly authorised by the FCA before getting involved by visiting https://register.fca.org.uk
• Report the matter to the FCA by calling 0800 111 6768 or visiting https://fca.org.uk/consumers/report-scam-unauthorised-firm
• Do not deal with any firm that you are unsure about

If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme.

The FCA provides a list of unauthorised firms of which it is aware, which can be accessed at https://www.fca.org.uk/consumers/warninglist-unauthorised-firms#list. More detailed information on this or similar activity can be found on the FCA website at https://fca.org.uk/consumers/protect-yourself-scams.

Dividends

Paying dividends into a bank or building society account helps reduce the risk of fraud and will provide you with quicker access to your funds than payment by cheque.

Applications for an electronic mandate can be made by contacting the Registrar, Equiniti.

This is the most secure and efficient method of payment and ensures that you receive any dividends promptly.

If you do not have a UK bank or building society account, please contact Equiniti for details of their overseas payment service.

Further information can be found at www.shareview.co.uk, including how to register with Shareview Portfolio and manage your shareholding online.

Risk Disclosures

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Concentration risk	The Company may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the Company, both up or down.
Counterparty risk	The Company may have contractual agreements with counterparties. If a counterparty is unable to fulfil their obligations, the sum that they owe to the Company may be lost in part or in whole.
Currency risk	If the Company's investments are denominated in currencies different to the currency of the Company's shares, the Company may lose value as a result of movements in foreign exchange rates, otherwise known as currency rates.
Derivatives risk	Derivatives, which are financial instruments deriving their value from an underlying asset, may be used to manage the portfolio efficiently. A derivative may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the Company.
Emerging markets & frontier risk	Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty, operational and liquidity risk than developed markets.
Gearing risk	The Company may borrow money to make further investments, this is known as gearing. Gearing will increase returns if the value of the investments purchased increase by more than the cost of borrowing, or reduce returns if they fail to do so. In falling markets, the whole of the value in such investments could be lost, which would result in losses to the Company.
Liquidity risk	The price of shares in the Company is determined by market supply and demand, and this may be different to the net asset value of the Company. In difficult market conditions, investors may not be able to find a buyer for their shares or may not get back the amount that they originally invested. Certain investments of the Company, in particular the unquoted investments, may be less liquid and more difficult to value. In difficult market conditions, the Company may not be able to sell an investment for full value or at all and this could affect performance of the Company.
Market risk	The value of investments can go up and down and an investor may not get back the amount initially invested.
Operational risk	Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the Company.
Performance risk	Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve.
Share price risk	The price of shares in the Company is determined by market supply and demand, and this may be different to the net asset value of the Company. This means the price may be volatile, meaning the price may go up and down to a greater extent in response to changes in demand.
Smaller companies risk	Smaller companies generally carry greater liquidity risk than larger companies, meaning they are harder to buy and sell, and they may also fluctuate in value to a greater extent.

www.schroders.co.uk/incomegrowth

Directors

Ewen Cameron Watt (Chairman) June Aitken Fraser McIntyre Victoria Muir

Registered Office

1 London Wall Place London EC2Y 5AU Telephone: +44 (0)20 7658 6000 Email: amcompanysecretary@schroders.com

Advisers and service providers Alternative Investment Fund Manager (the "Manager")

Schroder Unit Trusts Limited 1 London Wall Place London EC2Y 5AU

Investment Manager and Company Secretary

Schroder Investment Management Limited 1 London Wall Place London EC2Y 5AU

Depositary and custodian

HSBC Bank plc 8 Canada Square London E14 5HQ

Lending bank

The Bank of Nova Scotia, London Branch 201 Bishopsgate 6th Floor London EC2M 3NS

Corporate broker

Peel Hunt LLP 7th Floor 100 Liverpool Street London EC2M 2AT

Independent Auditor

Ernst & Young LLP 25 Churchill Place London E14 5EY

Registrar

Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA Shareholder helpline: 0800 032 06411 Website: www.shareview.co.uk

1 Calls to this number are free of charge from UK landlines.

Communications with shareholders are mailed to the address held on the register. Any notifications and enquiries relating to shareholdings, including a change of address or other amendment should be directed to Equiniti Limited at the above address and telephone number above.

Other information

Company number 03008494

Shareholder enquiries

General enquiries about the Company should be addressed to the Company Secretary at the Company's registered office.

Dealing codes

ISIN: GB0007915860 SEDOL: 0791586 Ticker: SCF

Global Intermediary Identification Number (GIIN)

T34UKV.99999.SL.826

Legal Entity Identifier (LEI)

549300X1RTYYP7S3YE39

Privacy notice

The Company's privacy notice is available on its web pages.

Schroder Investment Management Limited 1 London Wall Place, London EC2Y 5AU, United Kingdom T +44 (0) 20 7658 6000

@schroders schroders.com

Important information: This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in the document when taking individual

investment and/or strategic decisions. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. Schroders has expressed its own views in this document and these may change. Issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU, which is authorised and regulated by the Financial Conduct Authority. For your security, communications may be taped or monitored.