The Diverse Income Trust plc

It is announced that at the close of business on 18 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 18 February 2025                99.27p per ordinary share

Excluding current period revenue                                             97.46p per ordinary share

19 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

THE DIVERSE INCOME TRUST PLC (the "Company")

Monthly Factsheet

The Company announces that its Factsheet for the month ended 31 January 2025 is now available on the Company's website at:

Fact-sheet_The-Diverse-Income-Trust-plc-The-Diverse-Income-Trust-plc_31-01-2025.pdf (huguenots.co.uk)

Waystone Administration Solutions (UK) Limited

Company Secretary

18 February 2025

The content of the Company's website and the content of any website or pages which may be accessed through hyperlinks on the Company's website, other than the content of the Factsheet referred to above, is neither incorporated into nor forms part of the above announcement.

LEI: 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 14 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 14 February 2025                100.17p per ordinary share

Excluding current period revenue                                             98.36p per ordinary share

17 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 13 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 13 February 2025                99.93p per ordinary share

Excluding current period revenue                                             98.12p per ordinary share

14 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 11 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 11 February 2025                100.34p per ordinary share

Excluding current period revenue                                             98.56p per ordinary share

12 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 10 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 10 February 2025                100.73p per ordinary share

Excluding current period revenue                                             98.94p per ordinary share

11 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

(the "Company")

The Company has declared a second interim dividend of 1.05 pence per ordinary share in respect of the financial year ending 31 May 2025, payable on 30 May 2025 to shareholders on the register on 21 March 2025. The ex-dividend date will be 20 March 2025.

The Company operates a Dividend Reinvestment Plan ("DRIP"), which is managed by its registrar, MUFG Corporate Markets. For shareholders who wish to receive their dividend in the form of shares, the deadline to elect for the DRIP is 11 April 2025.

The Board expects at least to maintain the full year dividend, if necessary making use of revenue reserves.

11 February 2025

LEI: 2138005QFXYHJM551U45

THE DIVERSE INCOME TRUST PLC

HALF-YEARLY FINANCIAL REPORT

The Directors present the Half-Yearly Financial Report of the Company for the period to 30 November 2024.

RESULTS FOR THE HALF YEAR TO 30 NOVEMBER 2024

Summary of Results

As at

30 November

  2024

As at

30 November

2023

 As at 

31 May

2024

NAV per ordinary share1

100.25p

85.61p

98.87p

Ordinary share price

91.80p

79.40p

89.40p

(Discount) to NAV1

(8.4%)

(7.3%)

(8.6%)

Ordinary shares in issue

236,393,165

318,540,642

236,393,165

Period to

30 November

2024 

Period to

30 November 2023

Period to

31 May

2024

Revenue return per ordinary share1

2.63p

2.38p 

4.35p

Ordinary dividends per ordinary share

2.05p

2.00p

4.25p

Ongoing charges*

1.09%

1.14%

1.14%

1 For an in-depth assessment of performance please refer to the Chairman’s Statement and the Manager’s Report. Revenue return per ordinary share, NAV per ordinary share and Discount to NAV defined in the Glossary.

* Alternative performance measure. Defined in the Glossary.

CHAIRMAN’S STATEMENT

This report covers the half year to November 2024, a period punctuated by elections across most of the developed world. Whilst some resulted in unexpected drama, there was little surprise in the UK’s change of government. Inflation continued to wane and, with it, interest rates began to fall in the UK and elsewhere. Economic growth remained robust in the US with activity elsewhere advancing only modestly. Market returns continued to be dominated by a narrow range of US technology giants (the so-called “Magnificent Seven”) although there were signs at the end of the period that the prospect of lower interest rates and hopes for better economic growth in 2025 was encouraging investors to look more widely for returns.

Half-year returns

The Trust’s adjusted NAV total return was 4.9% over the half year, ahead of the total return of the Deutsche Numis All-Share Index which was 2.1%, and that of the Peer Group which rose 0.9%. The share price total return was 5.3%.

Despite an improving interest rate environment, the share prices of smaller companies and AIM stocks remained under pressure. Although the UK economy grew at a modest rate (putting behind earlier fears of recession) there was persistent selling of UK equities by domestic investors, amid uncertainties over forthcoming tax rises by the new government, during the prolonged lead-up to the October Budget. Total returns on the Deutsche Numis Smaller Companies (ex-ITs) + AIM Index and the Deutsche Numis Alternative Markets Index both fell (by 2.3% and 8.6% respectively), against the positive trend in the overall UK market.

The Trust’s revenue earnings per share over the half year to November 2023 rose 10.5% to 2.63p, which compares with 2.38p last year. The Board has already declared a first interim dividend of 1p per share for the current year which, together with the second interim dividend of 1.05p declared with these results means that shareholder dividends for the period are 2.5% ahead of those declared in respect of the same period of the 2023-24 financial year. It is anticipated that, in combination, the four dividends for the current year will represent an increase over those paid a year earlier.

Returns since the Trust was first listed in April 2011

It has been encouraging to see a return to outperformance by the Company’s portfolio over the past year, after a variable period during the UK market’s volatility in recent years, buffeted by pandemic-related and political factors. Over the thirteen years and seven-month period since issue, the Trust’s shareholders have enjoyed a NAV total return of 235.5%, and a share price total return 196.2%, well ahead of the comparable figures of 190.0% and 176.1% for the NAV and share price return of the peer group and of 123.6% for the Deutsche Numis All-Share Index.

Share Issuance and Redemptions

The Company’s discount was little changed, starting at 8.6%, ending at 8.4% and averaging 8.5% during the reporting period. Since November, sector discounts have remained under pressure while the Company’s discount has narrowed and at the time of writing stood at 7%. Although a discount has persisted since 2019, since launch in 2011 the Trust has on average traded close to its NAV, at an average discount of 1.4%.

The UK investment trust sector’s discount rating has been affected by the multi-year net selling of UK equities by UK institutions (motivated by regulations on solvency and volatility) and overseas investors (whose focus has been on US technology companies, with UK political factors adding a local deterrent). Although there are early signs that outflows are stabilising, the uncertainties ahead of and in the wake of the first budget of the new Labour government have dampened enthusiasm for UK equities. Investment trust discounts remain wider than historical norms as a result.

The Company operates an annual redemption facility, enabling investors to redeem part or all of their holding at either the prevailing net asset value at the redemption point, or (if a redemption pool is created) the realised value of the assets attributable to the redeeming shares. At the end of May 2024, 82.1m shares (25.8% of the issued share capital) were tendered for redemption, with the proceeds from the redemption pool being distributed on 24 July 2024.

As notified in the 2024 Annual Report, the date of this annual redemption is moving from the end of May to the end of August, to separate the administration and accounting for any redemption from the preparation of the financial statements and annual report for the year. Accordingly, shareholders will be able in July 2025, if they so wish, to elect to redeem shares at the next redemption point which will be 29 August 2025.

Investment Strategy

The Board continuously reviews the Company’s strategy and approach to ensure it remains relevant and appropriate, with one Board meeting a year being specifically set aside for this. This meeting was held in November 2024 and after detailed discussion the appropriateness of the Manager’s approach reaffirmed. The Board grants the Manager considerable discretion to vary, for example, the number of stocks in the portfolio and this does change as highlighted in the Manager’s Report. Premier Miton continue to adjust their approach as circumstances dictate within the bounds set by the Board.

Prospects

Despite the enthusiasm evident in a US market regularly hitting new all-time highs, sentiment has remained relatively sober elsewhere, reflecting lacklustre economic growth outside North America, the geopolitical uncertainties from conflicts in Europe and the Middle East, unstable political conditions in major European countries and macro-economic uncertainty ahead of the new US administration’s tariff proposals.

Notwithstanding these risks, as noted in recent reports, the UK market has been sidelined in investors’ preferences for many years. This has been disproportionate to the operational performance of UK quoted companies. As a result, on a number of key measures, the UK equity market has become lowly rated relative to international comparators, particularly the US market. Within the UK market, many smaller companies have suffered more severe derating due to their invisibility to larger institutional investors.

Although the growth rates of most UK companies do not approach those of the technology leaders in the US, nor do UK share valuations, relative to their own history, appear modest.

Investments in UK funds recently saw a first monthly inflow, after 41 consecutive monthly outflows. With valuations looking attractive relative to other regions, with the regulatory discussion shifting towards encouraging investment in the UK market and with UK and global interest rates on a declining trend, the prospective risk-reward from UK equities, particularly the neglected second liners and smaller companies, warrants consideration on a contrarian view. Our Managers are exceptionally positive on the outlook for the portfolio, as discussed in their report.

Andrew Bell

Chairman

10 February 2025

INVESTMENT MANAGER’S REPORT

The day-to-day fund managers with the responsibility for the makeup of the Trust’s portfolio.

Gervais Williams

Gervais joined Miton in March 2011 and is now Head of Equities in Premier Miton. He has been an equity fund manager since 1985, including 17 years at Gartmore. He was named Fund Manager of the Year by What Investment? in 2014. Gervais is also the President of the Quoted Companies Alliance and a member of the AIM Advisory Council.

Martin Turner

Martin joined Miton in May 2011. Martin and Gervais have had a close working relationship since 2004, with complementary expertise that led them to back a series of successful companies. Martin qualified as a Chartered Accountant with Arthur Anderson and had senior roles and extensive experience at Merrill Lynch and Collins Stewart.

Being a multicap strategy, the portfolio has the advantage of being able to pick out all the UK stocks well placed to generate good and growing dividend income across the full range of market capitalisations.

For a visual representation of the valuation of the UK stock market universe, showing the valuations of the quoted stocks across the market capitalisation range, please refer to the chart on page 5 in the full Half Year Report.

In the chart shown on page 5 in the full Half Year Report, valuation is quantified via the Price to Book ratio which relates the market capitalisation of a quoted company to the capital it has invested. Generally, low ratios imply low investor expectations.

The Trust’s portfolio can consider investing in all the stocks listed in the UK, including those that are large, but alongside those that are mid-sized or smallcaps.

This is known as multicap strategy, and the portfolio has the advantage of being able to include all the stocks that are well-set to pay out good and growing dividends, irrespective of the current scale of their business. The chart shown on page 5 in the full Half Year Report highlights that typically, smaller quoted companies currently stand on lower valuations, which means when they succeed and get bigger, their share price return is amplified by their valuation rising as well as their earnings and dividends.

We believe that the best opportunity for adding value is via listening and then questioning corporate management teams directly. In that regard, we typically seek to maximise the time they commit to engaging with quoted company leadership teams.

The bar chart shown on page 5 of the Half Year Report denotes the number of face-to-face company meetings that Gervais Williams and Martin Turner held in the past 6 months, and in the two preceding 6-month periods.*

*This does not include conferences.

Over the six months to November 2024, the Diverse Income Trust has outperformed the various comparative indices.

For a comparison of the total returns of the Trust vs the Peer Group and its comparator indices over the past 6 months, please refer to the chart on page 6 in the full Half Year Report.

In the half year to November 2024, the NAV of the Trust rose 4.9% in adjusted total return terms, the Peer Group, rose by 0.9%, whilst the Deutsche Numis All-Share Index rose by 2.1%, and the Deutsche Numis Smaller Companies Plus AIM Index fell 2.3%.

The Trust’s total return comprises both the accumulation of its cash dividends, that in general have risen progressively since issue in April 2011, plus the change in the Trust's NAV which normally fluctuates daily. Overall, the Trust's longer term objective has been to generate growing revenues, and it has succeeded since issue in paying a stream of progressively growing cash dividends to shareholders. In contrast, stock market prices vary considerably over time, so the NAV returns are more variable, while having delivered outperformance since inception, as well as during the current reporting period.

The multicap nature of the strategy has enhanced returns because much of the half year outperformance was related to the strong returns of certain midcap sized holdings, along with relatively few disappointments.

For details on the principal contributors to and detractors from performance over the half year to November 2024, please refer to the chart on page 6 in the Half Year Report.

One of the features of the UK exchange is that it comprises numerous smaller companies, as well as large and midcaps. While the fluctuations of mid and smallcap share prices are often somewhat uncorrelated with those of the majors, over the longer term as a group they tend to outperform.

Ongoing institutional redemptions are still depressing the share prices of UK quoted companies and hence their valuations, but company buybacks are now offsetting this adverse trend.

After persistent US stock exchange outperformance over decades, many UK investors have sold down UK stocks heavily over the last three years.

Amongst UK-quoted largecaps the ongoing institutional selling of recent years has been offset by an increased willingness to buy back their shares. Whilst some UK smallcaps have also decided to buy back their shares, in general the scale of ongoing institutional selling has overwhelmed buyers, to the extent that their share prices have often declined.

The net effect is that the valuation of the UK exchange has weakened over recent years, which contrasts with others such as the US which have risen. In the Outlook section below, we outline why we believe that global investors will greatly increase their UK capital allocations from here. Given that the UK stock market’s valuation is comparatively low, we believe such a change in institutional capital flows would drive considerable outperformance.

Many potential global winners are standing on unusually low valuations in the UK and sometimes their adverse share price momentum and valuation have given a misleading impression.

Many link a rapidly rising share price with a confidence that the underlying company’s prospects continue to improve. In this context, if a share price isn’t rising well, then it is easy to assume that the prospects for the underlying business are static or unexciting.

In the UK, there are numerous stocks that we believe have the potential to be global winners, with prospects that continue to improve, and yet with the pressure of UK OEIC selling, their absence of share price improvement currently gives a misleading impression.

Stocks that we believe have the potential to be global winners in future, where heavy UK redemptions have led to abnormally low valuations. The list below includes examples brought into the portfolio, or otherwise topped up.

Concurrent Technologies

Cyanconnode

Beeks Financial Cloud

Record

Gulf Marine

Raspberry Pi

Gaming Realms

TruFin

Intercede

Capital Intl

In general, even successful UK stocks have not risen as much as usual with good results, and hence the Trust hasn’t taken as much profit on these as yet. Thus, the largest holdings have grown to comprise a larger portfolio weighting than previously.

The following portfolio holdings have been retained even after outperforming and becoming larger portfolio weightings, because their valuations have not yet risen as much as usual during the period of ongoing UK OEIC redemptions.

Holdings

Weightings %

Galliford Try Holdings Plc

3.26

TP ICAP Group Plc

3.07

Paypoint Plc

2.99

The Diverse Income Trust plc

It is announced that at the close of business on 07 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 07 February 2025                100.27p per ordinary share

Excluding current period revenue                                             98.47p per ordinary share

10 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 05 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 05 February 2025                99.99p per ordinary share

Excluding current period revenue                                             98.22p per ordinary share

06 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 04 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 04 February 2025                99.28p per ordinary share

Excluding current period revenue                                             97.51p per ordinary share

05 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 03 February 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 03 February 2025                99.24p per ordinary share

Excluding current period revenue                                             97.47p per ordinary share

04 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 31 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 31 January 2025                 99.82p per ordinary share

Excluding current period revenue                                             98.05p per ordinary share

03 February 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 30 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 30 January 2025                 99.74p per ordinary share

Excluding current period revenue                                             97.97p per ordinary share

31 January 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 28 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 28 January 2025                 98.67p per ordinary share

Excluding current period revenue                                             96.89p per ordinary share

29 January 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 27 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 27 January 2025                 97.95p per ordinary share

Excluding current period revenue                                             96.17p per ordinary share

28 January 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 24 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 24 January 2025                 98.32p per ordinary share

Excluding current period revenue                                             96.54p per ordinary share

27 January 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 23 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 23 January 2025                 98.64p per ordinary share

Excluding current period revenue                                             96.86p per ordinary share

24 January 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 22 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 22 January 2025                 99.17p per ordinary share

Excluding current period revenue                                             97.41p per ordinary share

23 January 2025

Legal Entity Identifier 2138005QFXYHJM551U45

The Diverse Income Trust plc

It is announced that at the close of business on 21 January 2025, the unaudited Net Asset Value per ordinary share of The Diverse Income Trust plc is:

With the portfolio valued on a fair value basis:

Including current period revenue to 21 January 2025                 99.17p per ordinary share

Excluding current period revenue                                             97.41p per ordinary share

22 January 2025

Legal Entity Identifier 2138005QFXYHJM551U45