12 hours ago
- Business
- The Herald Scotland
Edinburgh investment trust 'significant costs' from bid to oust board
Edinburgh Worldwide revealed on February 14 that it had become the seventh investment trust in the UK, and the third in Scotland, to defeat a campaign by Saba to oust its board.
The investment trust, which is run from Edinburgh by fund management house Baillie Gifford, said then that investors holding 63.8% of the shares that were voted opposed all of Saba's resolutions.
Announcing results for the six months to April 30 today, Edinburgh Worldwide said: 'Shareholders will…be aware that during the period on which we are reporting, the company was requisitioned and was required, under the terms of the requisition, to hold a general meeting at which various resolutions were put to shareholders.
'Shareholders voted to support the existing mandate and the board at the requisitioned general meeting but it should be noted that significant costs were incurred as a consequence of this requisition. This is reported in our income statement alongside the costs associated with other shareholder circulars that have been approved during this period.'
The results show Edinburgh Worldwide incurred 'other administrative expenses' of £2.615 million in the six months to April 30, up from £601,000 in its previous first half.
Read more
Edinburgh Worldwide states: 'The other administrative expenses have increased due to increased professional fees incurred in the reduction of the share premium account, the change in investment policy and the requisitioning of a general meeting by Saba Capital.'
The investment trust reported that, over the six-month period on a total return basis, its net asset value per share fell by 2.9% while the comparative index, the S&P Global Small Cap Index, was down 7.2%.
It said: 'After a strong second half to the financial year [to] 31 October 2024 where the net asset value per share total return was +6.0% and the share price total return was +11.0%, performance over this reporting period has been impacted by heightened volatility in global markets following a significant sell-off in April 2025, the result of President Trump's 'Liberation Day' announcement of US tariffs and China's retaliatory measures.'
Edinburgh Worldwide added: 'In November 2024, the board and investment manager collaborated to introduce meaningful improvements to portfolio construction and execution, focusing on fewer holdings and stricter measures to address underperforming investments.
'The portfolio has been reshaped to include more profitable, cash-generating companies and greater sectoral diversification. This has resulted in a more focused and better-balanced portfolio with stronger sales and earnings growth prospects to position the company for improved future performance.'
The trust noted that, following the announcement in November 2024 of the board's commitment to return up to £130m of capital, it had 'made the necessary practical changes to the company's distributable reserves, including the reduction of the company's share premium account, to permit this'.
It added: 'In addition, the board progressed plans to offer all shareholders a meaningful capital return through a tender offer, on a basis that would not unduly affect the resultant balance of the company's portfolio. However, following discussions with significant shareholders, it is unlikely that the desired level of support will be received and so the board has decided to pause the process, for the present, to avoid incurring unnecessary costs.
Edinburgh Worldwide noted its board 'continues to prioritise share buybacks as the primary capital return mechanism.'
It said: 'Additionally, the board has been considering an evolved approach to capital allocation in the future. The board recognises that, notwithstanding the company's long-term investment horizon, shareholders should benefit tangibly when material realisations are achieved from the company's private investments. We are therefore developing a model of making partial returns of capital from the proceeds from such events and will share further details in due course.'
Edinburgh Worldwide said it continued to 'act on feedback from…shareholders'.
It added: 'Recent engagement has reaffirmed broad support for the company's mandate and investment strategy and the board will continue to work diligently with the investment manager to advance our plan to ensure that the company delivers returns commensurate with shareholder expectations and reflective of the underlying potential of the portfolio companies which are looking to shape the future through innovation.'
