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Data as at: 02/05/2024

Gearing

Gearing (%)
75
Net cash (%)
0
Historic gearing 3yr low/high (%)
0 / 75
Gearing range (%)
N/A
Gearing policy

The Directors do not intend to use gearing at the Company level, other than utilising short-term revolving credit facilities for financing acquisitions, such borrowings to be at a Conservative level. Intra-group debt between the Company and its subsidiaries, and the debt of Investee Companies, will not be included in the definition of borrowings for these purposes. Long term gearing is likely to be applied at an Investee Company level in order to enhance returns but will be at a prudent level, appropriate for the particular Investee Company and sub-sector.

Borrowing limits

The aggregate level of borrowings will be expected to be no more than a maximum of 50% of Gross Asset Value.

Ways in which investment companies can magnify income and capital returns, but which can also magnify losses.

At its simplest, gearing means borrowing money to buy more assets in the hope the company makes enough profit to pay back the debt and interest and leave something extra for shareholders.

how gearing works table

However, if the investment portfolio doesn’t perform well, gearing can increase losses. The more an investment company gears, the higher the risk.

Investment companies can usually borrow at lower rates of interest than you’d get as an individual. They also have flexible ways to borrow – for example they might get an ordinary bank loan or, for split capital investment companies, issue different classes of share.

Not all investment companies use gearing, and most use relatively low levels of gearing.

An indication of the maximum and minimum levels that the company would expect to be geared in normal market conditions.

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