Baillie Gifford SAINTS Final Results

RNS Announcement

The Scottish American Investment Company P.L.C.

Legal Entity Identifier: 549300NF03XVC5IFB447

Regulated Information Classification: Additional regulated information required to be disclosed under the applicable laws and regulations.

The following is the results announcement for the year to 31 December 2024 which was approved by the Board on 12 February 2025.

Results for the year to 31 December 2024

• SAINTS' objective is to deliver real dividend growth by increasing capital and growing income

• The Board is recommending a final dividend which will take the total dividends for the year to 14.875p per share, an increase of 5.5% over the previous year.

• The increase in the dividend is 3% ahead of inflation over the year, and is supported by earnings per share growth of 7.5% over the year

• SAINTS' dividend has also grown at 3% per year ahead of inflation since 1938, the last time the dividend was cut more than eight decades ago

• Whilst operational performance at SAINTS' holdings has been encouraging, SAINTS' emphasis on dependable earnings and dividend growth over the long term has been out of favour in a year in which market concentration, and very strong returns from certain low yielding and large technology related stocks and from cyclical companies such as banks, have been significant features

• Over the year SAINTS' NAV total return* (borrowings at fair value) of 6.1% has significantly lagged the market's return† of 19.8%, and the share price total return of -4.2% has been adversely affected by a widening discount

• However, SAINTS' capital continues to grow, and during the year SAINTS' NAV per share reached a record level

• SAINTS' NAV total return over the last ten tears has been 8.6% per annum, which compares with the Global Equity Income sector's return of 4.7% per annum over the same period

• The Board continues to have confidence in the Company's investment strategy, but takes the widening of the discount seriously and has embarked on a share buyback programme

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

† As measured by the total return of the FTSE All-World Index (in sterling terms).

Source: Morningstar/LSEG/Baillie Gifford and relevant underlying index providers.

12 February 2025

SAINTS' objective is to deliver real dividend growth by increasing capital and growing income. Its policy is to invest mainly in equity markets, but other investments may be held from time to time including bonds, property and other asset classes.

The Company is managed by Baillie Gifford, the Edinburgh based fund management group with around £231 billion under management and advice as at 12 February 2025.

Past performance is not a guide to future performance. SAINTS is a listed UK company. As a result, the value of its shares and any income from those shares is not guaranteed and could go down as well as up. You may not get back the amount you invested. As SAINTS invests in overseas securities, changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up. You can find up to date performance information about SAINTS on the SAINTS' page of the Managers' website saints-it.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

For further information please contact:

James Dow and Ross Mathison, Managers, The Scottish American Investment Company P.L.C.

Tel: 0131 275 2000

James Budden, Baillie Gifford & Co

Tel: 0131 275 2000

Jonathan Atkins, Director, Four Communications

Tel: 0203 920 0555 or 07872 495396

Chairman's statement

SAINTS' objective is to deliver real dividend growth by increasing capital and growing income. The Board is recommending a final dividend which will bring the total dividends for the year to 14.875p per share, an increase of 5.5% over the previous year. The Company continues to meet its objective of growing dividends ahead of inflation over the long term, and the recommended dividend will also extend the Company's record of raising its dividend to fifty one consecutive years.

However, despite encouraging income growth and SAINTS' Net Asset Value reaching record levels during 2024, total returns have not kept up with the market and a growing discount has compounded the underperformance of the share price. The Board takes the widening of the discount seriously and embarked on a programme of share buy backs in 2024.

The Board notes the increased focus on the role of investment trusts and their boards. It is entirely appropriate for shareholders to focus on both long term performance and the relationship between share prices and NAV, which can present both a risk and an opportunity. Independent directors are there to act in the best interests of all shareholders, independent of the preferences of incumbent or potential managers, and to consider whether their trust's investment objectives remain relevant and are being met. All of SAINTS' Directors are independent.

It is the Board's belief that in the case of SAINTS the demand for an income which grows ahead of inflation remains at the core of its shareholders' requirements, and it considers that SAINTS is well placed reliably to deliver on this objective in the future as it has done in the past. The Board regularly reviews and continues to have confidence in the Company's underlying investment strategy and in its managers, whilst maintaining a sharp focus on the operational performance of the Company's holdings and on the robustness and suitability of the managers' investment process. The Board also recognises the importance of Baillie Gifford's scale, resources and stability as a partnership, and the close alignment of the Company's and Baillie Gifford's focus on the long term.

Overview

2024 has seen further remarkable progress from investment markets, led by a small number of very large companies in the US, which have dominated both earnings growth and market performance. Markets have also been supported by a generally benign economic backdrop, with the prospect of continuing economic growth, in the US in particular, and moderating interest rates.

When the biggest companies in the world index perform strongly and are concentrated in the technology sector, and when the most cyclical companies also perform well, life is challenging for portfolios with a focus on high quality and predictably cash generative businesses. Last year's pattern of performance is unusual, despite the fact that it is a continuation of a phase which began in 2023. And, as last year, the companies which have dominated the market are a handful of very large and generally low yielding technology companies in the US.

This is not a backdrop which has favoured the total return performance of your Company. SAINTS' emphasis on steady earnings growth and dependability has led to continued strong operational performance and helped revenues to grow ahead of inflation, but NAV performance, though positive, has been disappointing relative to the market. There are two principal reasons that SAINTS' NAV performance has lagged. First, our emphasis on income, and on dependability and reliability, has led us to avoid many AI related stocks and also many cyclical stocks and sectors which have performed well this year as markets have become more optimistic. In contrast, the market has come to the view that, amidst the uncertainty and strategic ambiguity of the new U.S. Presidency, those technology companies which are currently delivering strong growth are the place to be invested. Secondly, SAINTS also invests in asset classes other than equities, principally property and bonds, which bring advantages in terms of diversification and income resilience but have not kept up with equities in a period of high interest rates. However, there are signs that the domestic property market has turned the corner with capital values rising in the second half of the year.

In this context, it is worth emphasising that the Board remains committed to delivering a dividend which increases ahead of inflation over time, and which is supported by revenues and revenue growth. The nature of the Manager's approach to investing in equities flows from this, as does SAINTS' investments in other asset classes including property. The Board remains confident in this approach, and we also believe that the property allocation in particular is well fitted to supporting SAINTS' objectives. Our investment in property remains modest at just over 9 per cent of our asset value but, because of the higher yield available and the nature of many of the leases, provides substantial support to SAINTS' current dividend, as well as an element of income growth. In particular, the high proportion of properties which have fixed rent increases or rent increases which are contractually linked to inflation, together with the quality of the tenants and an average lease length of over fifteen years, provide considerable comfort. We understand that some shareholders would prefer to have an all equity portfolio, but believe that others appreciate the helpful impact on SAINTS' revenues, the lack of exchange rate risk and the good long term record of our property managers, OLIM.

Against a backdrop of widening of discounts across the investment trust sector, SAINTS' share price has not kept pace with its NAV over the year. To help support SAINTS' share price, the Board has selectively bought back shares at levels which have also enhanced NAV. Factors affecting the discount and demand for the Company's shares are likely to have included both performance and the availability of alternative investments such as gilts with higher yields or trusts with higher, manufactured dividends. The Board is confident that the advantages of SAINTS' approach will again come to the fore in other market environments when falling capital values are likely to lead either to a reduction in manufactured dividends based on net asset value or a need to sell more assets at lower prices to maintain or grow distributions. SAINTS has traded at a premium for most of the last decade, during which time it issued many more shares than it has so far bought back, and the Board remains confident that the discount is cyclical rather than structural.

Ultimately though, it is the underlying growth and the growth prospects of SAINTS' holdings which will be of most importance in returning SAINTS' shares to the premium at which they have typically stood in recent years. And here the Managers' Review (on pages 15 to 23) tells a positive story. The Managers will continue to focus on the encouraging operational progress of SAINTS' holdings, and to emphasise dependability and reliability as well as growth potential. This approach has stood the test of time, and both the Board and the managers remain confident that it will enable SAINTS to continue to deliver on its objectives in the future.

Given the long-term nature of the Company's objectives, it is worth emphasising both SAINTS' successful record of raising its dividend ahead of inflation over the long term, and the strong total returns it has delivered. In particular, the Board and the Managers are pleased that 2024 marked the fifty first successive year of dividend growth for SAINTS' shareholders.

Dividend and Inflation

The Board recommends a final dividend of 4.175p which will take the full year dividend to 14.875p per share, 5.5% higher than the 2023 dividend of 14.10p. This year's increase is 3% ahead of the annual rate of inflation of 2.5% as measured by CPI over 2024.

It remains the Company's objective to deliver real dividend growth over the long term. Since 1938, when SAINTS last reduced its dividend, the Company has delivered dividends that have not only been resilient through thick and thin, but have also grown by more than 3% a year ahead of inflation. And since the end of 2003, when the Board of SAINTS appointed Baillie Gifford as managers, the Company has continued this track record of resilient dividend growth: over this period the growth in SAINTS' dividend has also beaten inflation by 3% a year.

Revenues

Earnings per share grew to 14.50p over the year, an increase of some 7.6% over the year, and investment income has risen to £32.4m. Operational performance of the holdings has been generally encouraging, and currency movements have also been helpful.

Equity income has risen by some 11%, helped by generally strong growth in ordinary dividends, a more normal level of special dividends (following a drop in special dividends last year) and an increased allocation to infrastructure equities.

Property income has risen significantly, reflecting the welcome addition of the M23 Pease Pottage motorway service area to the portfolio (which was mentioned in my statement last year but which was not completed until after the 2023 year end), as well as other transactions and further rental increases. Bond income, on the other hand has fallen, as the bulk of SAINTS' bonds were sold to fund the additions to property.

Both managers (Baillie Gifford and, for the Company's property investments, OLIM) continue to focus on supporting the dependability and the future growth of the Company's dividend in line with its objective.

Total Return Performance

SAINTS' NAV return was positive over the year, and the net asset value total return (capital and income with borrowings at fair) was 6.1%. However, for the reasons summarised above, SAINTS' returns fell short of those from global equities (as measured by the total of return of the FTSE All-World Index in sterling terms) which returned 19.8% over 2024. In addition, as also mentioned above, SAINTS' share price return has, in common with investment trusts generally, been affected by a broadening of discounts, and the share price return was -4.2%. SAINTS' performance over the year is discussed in more detail in the Managers' review.

The Managers and your Board have a long-term perspective and we would therefore encourage shareholders to assess your Company's performance over the long term. Over the last ten years SAINTS has delivered a NAV return of 8.6% per annum, which is strong in absolute terms.

In addition, SAINTS' NAV total return remains well ahead of its sector's return of 4.7% per annum over ten years and, despite the recent broadening of the discount, SAINTS' share price total return also remains ahead of the sector over ten years.

However, due to recent underperformance, SAINTS' NAV return is now behind that of the market as measured by the Company's benchmark which has returned 9.6% pa over the last ten years. Furthermore, the broadening of the discount has meant that SAINTS' share price total return is further behind at 7.2% pa. Whilst these figures are disappointing in relative terms, it is worth bearing two things in mind. Firstly, SAINTS has an income approach, both in terms of its primary objective and the way its assets are deployed to meet that objective. And secondly, we are viewing these figures after a highly unusual period in markets. Over the last ten years, we believe that SAINTS' equities have performed well given SAINTS' income approach, and SAINTS' other principal allocation to property has also performed creditably.

The principal contributors to and detractors from performance and the changes to the equity, property and bond investments are explained in more detail in the Managers' review.

Borrowings

In recent years SAINTS' long term borrowings have been refinanced and modestly increased at advantageous interest rates. The cost of these borrowings is just under 3% per annum.

The book value of the total borrowings is £94.7m which, at the year end, was equivalent to approximately 9.9% of shareholders' funds. The estimated market or fair value of the borrowings was £62.1m, a decrease from the previous year's value of £68.2m.

Environmental, Social and Governance (ESG)

The Board of SAINTS recognises the importance of considering Environmental, Social and Governance (ESG) factors when making investments, and in acting as a responsible steward of capital. We consider that Board oversight of such matters is an important part of our responsibility to shareholders, and SAINTS' ESG Policy is available to view on the Company's website (saints-it.com).

The Board has been strongly supportive of Baillie Gifford's approach and of their constructive engagement with the companies you own, and with potential holdings, in relation to important challenges including climate change. The Board is also supportive of OLIM's approach in relation to property, and in particular of its consideration of environmental factors including climate change in assessing the suitability of SAINTS' investments. I would encourage shareholders to read SAINTS' annual Stewardship Report which can also be accessed on the Company's website (saints-it.com).

Issuance and buybacks

Over the year the Company has bought back 1,665,185 shares (representing 0.93% of the shares in issue at the start of the year) at a cost of some £8.5m. All buybacks have taken place at a significant discount to the Company's NAV, and so each buyback has increased the NAV per share of the Company. The Board is monitoring closely evidence of the effect which buybacks have on the share price and discount. No shares were issued during the year.

The Board and the Managers

In April 2023, it was announced that Bronwyn Curtis would not be seeking re-election to the Board in 2024, and Ms Curtis stood down at the conclusion of last year's AGM. At the Board's request, Dame Mariot Leslie took over as the Senior Independent Director following Bronwyn's retirement.

The Board, assisted by external consultants, conducted a recruitment exercise during 2023, following which Padmesh Shukla joined the Board in February 2024 and his appointment was ratified by shareholders at the AGM in April 2024. Padmesh is the Chief Investment Officer of the Transport For London ('TFL') Pension Fund, and has over 25 years of investment experience, including 12 years in his current role at TFL. He was formerly head of Climate Change Financing at the London Development Agency, and prior to that he had worked at the World Bank, as a Researcher at Harvard and in real estate. He is currently a member of the Church of England Pensions Investment Committee.

I have indicated that I do not intend to stand for re-election as a Director at the AGM in 2026. It is the Board's intention to recruit a new Director over the course of 2025, with a view to that Director becoming the chairperson of SAINTS at the conclusion of the AGM in April 2026.

As previously announced, Toby Ross stepped back from his role as joint manager of SAINTS in February with the thanks of the Board. The Board looks forward to continuing to work with James Dow as manager and Ross Mathison as deputy manager.

Outlook

Despite, and indeed partly because of, the very strong performance of equity markets the risks to investors are clearly apparent. With the election of President Trump, the markets are already assuming fewer interest rate cuts and bond yields have risen. Governments, in particular in the UK and EU, will be under pressure to consolidate further the public finances. And protectionism will almost certainly increase.

The Board recognises the risks these developments pose for a company like SAINTS which is focused on delivering income from global equities. But we take considerable comfort from the fact that global refers primarily to having the global opportunity set which SAINTS has enjoyed for well over a century, rather than being a one way bet on global trade. Opportunities will continue to arise, not least as the benefits of technological progress spread beyond the Tech giants. In particular, the Board and your managers remain alert to both opportunities and risks arising from the accelerated adoption of Artificial Intelligence, many of which will be in the broader economy and market. And if higher interest rates force governments to tackle the proliferation of government debt, to reduce regulation and to promote economic growth, that may well be good for performance over the long term. In this environment, having an actively managed portfolio which invests only in those stocks which are believed to provide a lasting opportunity, and which seeks to avoid those which are overvalued or under threat remains doubly important.

As a Board, we believe a long-term approach based on investing globally for sustainable growth is the best route to achieving SAINTS' aim of growing the dividend ahead of inflation over time. As we look ahead, we also take considerable comfort from the nature of SAINTS' investments, and from the managers' emphasis on quality, on dependability and on growth far out into the future. We are encouraged that, as is outlined further in the Managers' review, Baillie Gifford have continued to find new and attractive opportunities, and we also believe that both the quality and duration of SAINTS' property portfolio have been enhanced over the past year.

SAINTS has been working for individual investors for 150 years. It is built to help shareholders' income keep pace with inflation, as well as providing capital growth. And it is built for resilience.

AGM

The AGM will be held at 11.30am on Tuesday 8 April 2025 at Baillie Gifford's offices at Calton Square, 1 Greenside Row, Edinburgh. The meeting will be followed by a presentation from the managers. Shareholders are cordially invited to attend the meeting and presentation, and this year those who are unable to attend in person will be able to view proceedings by remote video link. Details of joining the AGM remotely can be obtained by contacting the Company's Managers at [email protected] who will be able to provide you with details and instructions for doing so. Please note you will not be able to vote and you will not be counted as part of the quorum but you will have the opportunity to watch the managers' presentation.

I would remind shareholders that they are able to submit proxy voting forms before the applicable deadline and also to direct any questions or comments for the Board in advance of the meeting through the Company's Managers, either by emailing [email protected] or calling 0800 917 2113 (Baillie Gifford may record your call).

The Board welcomes recent moves by platforms to facilitate shareholder participation and encourages shareholders to cast their votes. The Association of Investment Companies' guidance on how to vote through various investment platforms can be found on its website at: How to vote your shares | The AIC

Finally, my fellow Directors and I send you all our very best wishes for the year ahead.

Lord Macpherson of Earl's CourtChairman12 February 2025

For a definition of terms see glossary of terms and alternative performance measures at the end of this announcement

Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer at the end of this announcement.

Past performance is not a guide to future performance.

Managers' review

How to summarise SAINTS' performance in 2024? In a word: "mixed".

On the positive side of the ledger, growth in earnings across the Company's portfolio was strong. The backbone is our investment in equities, where dividend growth was robust. Income from the property, infrastructure and bond portfolios was also solid. Together, these investments drove growth in the Company's earnings per share, lifting it 7.6% above the prior year. This strong result underpinned another inflation-beating increase in SAINTS' dividend to shareholders.

We are proud of the fact that since 1938, when the Company last reduced its dividend, and indeed since the end of 2003, when Baillie Gifford was appointed by the Board as managers, SAINTS' portfolio has delivered dividend growth to shareholders that, on average, has beaten UK inflation by 3% per year. With the Consumer Price Index (CPI) ending 2024 at a rate of 2.5%, and SAINTS' dividend growing by 5.5%, the Company once again delivered real growth in income. Meanwhile the net asset value (NAV) of the Company rose to a new high.

On the negative side of the ledger, the NAV growth of the Company lagged global equity markets, as measured by the FTSE All-World, by some way. Worse, the share price did not follow the NAV, as the discount widened over the course of 2024, finishing the year at 10.6%.

In our commentary below, we examine each of these highs and lows in more detail. By shedding light on the good and the bad, our hope is that shareholders will understand why we say we remain confident, despite a "mixed" year, that SAINTS' portfolio will keep delivering on the Company's core proposition: an income that grows faster than inflation, with resilience across cycles, and real capital growth over the long-term.

Below, we start by examining the underlying health of income growth in the portfolio. Then we explain the relative performance versus wider markets. We reflect briefly on the discount. And conclude with why we, as managers, have personally been buying more shares in SAINTS.

Equity portfolio

Let's start by looking at the underlying health of the investments in SAINTS' equity portfolio.

Each year we analyse the financial results reported by every one of SAINTS' holdings. We clean up these numbers for any distortions (such as one-off gains in profit that should not be considered part of a company's ongoing earnings) and we stack these results against the figures from prior years. This gives us an over-arching picture of how each company in the portfolio is performing, and where the strengths and weaknesses lie.

Our 'north-star' is 10% compounding: we are looking for companies which can deliver 10% annual growth in earnings and dividends, and keep doing so for long periods of time. Inevitably not all the companies in which we invest will meet our expectations, so in practice we expect this approach to deliver a result that is a little lower: perhaps 6-9% growth. But over time this level of growth would deliver excellent results to SAINTS' shareholders: for context, equity markets worldwide have achieved around 5% earnings growth over the past three decades. Meanwhile inflation in the UK has averaged around 3%. A portfolio that delivers anywhere close to 10% should handily beat both.

The chart below shows the dividend growth of every company in the equity portfolio. We have taken each company's latest announced dividend rate, and combined these with the figures from prior years to calculate a five-year compound growth rate. Growth in our equity income in 2024 was 10%, but we prefer to look at the five-year rate of dividend growth because individual years taken on their own, for example the pandemic year of 2020, can be misleading of the underlying picture. A five-year view provides a clearer picture of the long-term health of the investments.

http://www.rns-pdf.londonstockexchange.com/rns/9263W_1-2025-2-12.pdf

Source: Baillie Gifford

The main conclusion we draw from this chart is that SAINTS' equity portfolio is in good fettle. The current holdings have, on average, delivered 10% annual dividend growth over the past five years. This is true both on an income-weighted and equal-weighted basis, and provides an encouraging illustration of the growth characteristics of the portfolio.

To be clear, the current portfolio is not exactly the same as the portfolio five years ago: although 70% of it was held, 30% of it is new in the past five years. During that time we have exited some slower growing holdings, which we mistakenly hoped would do better, and invested in more promising ones. But the north-star remains 10%, with the expectation that even if we keep getting a few wrong, we should still deliver inflation-beating income growth to SAINTS' shareholders. We'll pick up on this later when we unpack the 2024 result, which was 7.6% total earnings per share growth.

Looking at the individual holdings, there is clearly a range of results around the average. In the strongest cases, some of SAINTS' investments have delivered dividend growth well north of 10%. Examples include video game publisher Netease (over 30% average dividend growth per year) and pharmaceutical maker Novo Nordisk (17% growth per year). In weaker cases, we have seen dividend growth from some holdings nearer to the mid-single-digits than 10%, such as Coca-Cola (4%) and Nestle (4%).

It is noticeable that several of the fastest growing dividends in the portfolio have come from our investments in Chinese companies: such as Anta Sports, Midea, Man Wah, and the aforementioned Netease. Whereas at the lower end of the chart we find a number of businesses that manufacture consumer staples: firms like Procter & Gamble and Nestle.

The slower growing dividends are always a prompt for us to consider whether we can achieve faster growth from other companies. But to an extent the range in dividend growth reflects a conscious tradeoff. Alongside growth, we look for rock-solid dividend resilience. SAINTS has not cut its dividend for many decades, and that resilience starts with each underlying investment.

Companies at the lower end of the chart typically have ultra-resilient dividends. For example, we are highly confident that Coca-Cola will continue raising its dividend every year, even if the growth rate is only modestly above inflation. By comparison, the fastest dividend growers in the portfolio, such as Netease, tend to have more dividend volatility from year to year. Often these companies have payout-ratio based dividend policies, rather than progressive, meaning their dividend can go up and down in any given year depending on the strength of earnings. If we judge this volatility to be uncorrelated with the rest of the portfolio, we can tolerate this (within reason) in return for exceptional long-term growth.

Bear in mind that all of these dividend growth rates are in each company's reporting currency. We view this as a positive over the long-term, given that Sterling has a long track record of depreciation against overseas currencies, lifting the growth rate in Sterling a little higher.

Of course, a company's past performance is no guarantee that it will perform well in the future. As managers it is our responsibility to prod every investment regularly, and evaluate whether the prospects of each company remain promising. Occasionally we will analyse a holding and foresee its future taking a decided turn for the worse. Such was the case last year with Kering, the luxury goods maker, where dividend growth had averaged 14% per year for the prior five years, and we had more than doubled shareholders money since our initial investment, but which we removed from the portfolio after a review of its prospects led us to conclude that the next five years were likely to be considerably weaker (more on this in the Transactions section below).

So, the portfolio of names listed in the chart should not be regarded as static. We are constantly testing every holding, and typically we will upgrade 4 or 5 names in any given year in pursuit of stronger long-term growth. Looking forward from here, the results compiled in this chart are very encouraging. They show the portfolio is in good health. On average, the dividends of the current portfolio are growing by 10% a year. This puts SAINTS in a strong position to deliver on its objectives for shareholders.

Property, infrastructure and bonds

Regular readers will know that SAINTS takes full advantage of one of the benefits of being an investment trust: the ability to borrow prudently at attractive rates, and invest the proceeds for returns that beat the cost of borrowing. The Company's long-term borrowings total £95m, with a fixed cost that averages a whisker below 3%. We invest this nominal liability predominantly in real assets, with yields above 3% and an expectation their income will grow over time. This generates additional income and returns for shareholders, beyond the equity portfolio.

Against a challenging backdrop of rising interest rates, the property portfolio had a good year, with a total return of over 8%. More details of the investments are provided below but the highlights include long leases (the weighted average unexpired lease length is 16 years) and strong links to inflation. In total 72% of the rental income is linked to RPI or CPI, with another 16% on fixed increases, and another 12% with upward-only rent reviews. The property portfolio is managed by a specialist manager, OLIM, who have a long and impressive track record of investing on behalf of SAINTS. They have astutely avoided the weak parts of the property market in the past few years, such as offices, and focused intently on inflation-linked leases with good tenants that include the likes of ALDI, Tesco and Premier Inn. The portfolio remains fully let. The manager anticipates that average annual rental growth over the next five years will average 3-4%.

The infrastructure portfolio also continues to deliver solid income growth. Again, these are investments in real assets. They are also liquid assets, because we have chosen to invest in infrastructure through equities: for example, the equity of the Italian electrical grid operator Terna, and the equity of the tollroad operator Jiangsu Expressway, which controls many of the major roads around Shanghai. In the short-term, these equities will go up and down with the stock market, but in the long-term (which is of far more concern to SAINTS) we expect their returns to be driven primarily by the returns from their underlying infrastructure assets. In 2024, we saw share prices of several of these investments fall, as stock markets re-priced the future path of interest rates around the world. But their income growth remained solid, with Terna raising its dividend by 6.6% and the largest holding, Greencoat UK Wind, raising its dividend by double-digits.

The bond portfolio is a very small part of SAINTS' assets, representing less than 1% of the total. It is invested opportunistically in government bonds where we see attractive yields and low default risk. The largest investment is an inflation-linked sovereign bond issued by Brazil, paying an attractive yield of around 7%, where in our view there is very low risk of default.

SAINTS borrows prudently. Just as we stress-test every dividend in the equity portfolio, so we stress-test the Company's ability to service its debt. The £95m of borrowings represents gearing of less than 10% (on a debt to total assets basis). We remain confident the portfolio of assets which is funded out of these borrowings should beat the cost of the borrowing, and as such is a good use of the investment trust structure.

Revenue and dividend growth

As the property manager found attractive opportunities for investment in 2024, we funded these new purchases from sales of bonds, which had higher yields. In the long-term we believe this shift from bonds into property will strengthen SAINTS' dividend growth, but in the short-term it reduced the amount of income earned in 2024. This is why the growth in equity income, at 10%, was reduced a little to growth in total income of 7.6%. In some years, the Board chooses to grow the dividend to shareholders a little slower or faster than the Company's income, depending on what is most appropriate for the long-term. This year, the Board has chosen to grow the dividend by 5.5%.

We are very conscious that in the past few years, SAINTS' dividend growth has not been strong in every year. A variety of factors have combined to produce this result, including moderate dividend growth from some companies during the Pandemic period, changes made to the equity and property portfolios in pursuit of better long-term growth, and a rising UK corporate tax rate. If we take the past three years, SAINTS' dividend has grown by 9%, 2%, and 5.5% respectively, meaning an average growth rate of 5.5% over the period.

Looking forward, we will keep our sights set on 10% in the equity portfolio, and, even allowing for some investments which fall below our expectations, we hope this will still deliver equity income growth in the high-single-digit range. The non-equity investments are more likely to grow in line with inflation, say 3%. But this should still produce overall income and dividend growth well ahead of inflation. If UK CPI averages, say, 3%, we would hope that SAINTS could deliver dividend growth of 6%, extending the Company's long-track record of beating inflation by 3%. Thanks to the wonder of compounding, were this result to be achieved, a shareholder could expect, in nominal terms, to see their income rise by more than 30% over a five year period.

There are multiple ways to achieve income from equities. Some income managers do it by selling capital, others by focusing on yield. Our firm belief is that, over the long-term, income that is backed by natural dividend growth, the SAINTS' approach, is a compelling way to deliver a resilient, progressive income that grows. This approach has been tested over many decades, and we hope this gives reassurance to shareholders, particularly at a time when the world is looking increasingly volatile.

Relative performance

While the income growth from SAINTS' portfolio was robust last year, the relative NAV performance of the portfolio was weak. The return delivered by the equity portfolio was 6.1%, and SAINTS' overall NAV total return (borrowings at fair value) was 6.1% after fees. Last year the US stock market rocketed to record highs, with the S&P500 (a broad‑based index of US-listed companies) rising by around 25%. This is heady stuff, one of the best years ever recorded for US equities. SAINTS' benchmark is a global one, the FTSE All-World, but it is dominated by the US market: the US accounts for almost 70% of the index.

SAINTS has a lower proportion of its assets invested in the US. Within the equity portfolio, for example, we have about 43% of capital invested in US companies. This is still a large proportion, being by some margin our single largest geography. But it is considerably lower than the index. This is not by accident, but a deliberate choice, rooted in a number of reasons which relate to the dependable achievement of SAINTS' investment objectives.

The starting point is that we expect SAINTS' dividend growth in the long-term to be driven by the earnings growth of its underlying investments. We therefore seek companies with strong prospects for earnings growth, regardless of the country where they are listed. There are approximately 6,000 companies available to us globally, of which circa. 2,000 are US-listed. If opportunities were spread evenly throughout the world then, all else being equal, one might expect about a third of the portfolio to be listed in the US.

Secondly, US companies typically have lower dividend payout ratios than elsewhere: the payout ratio across the S&P500 has typically averaged 30‑40% of earnings, whereas in countries such as the UK and Germany this figure has been 40-50%. In addition, US stocks have also been priced more richly, meaning higher price-to-earnings (PE) multiples. The combination of a lower payout ratio with a higher PE means that investors receive drastically less income per pound invested in US companies. Towards the end of 2024, the S&P500 yielded only 1.28%. For comparison a European market like Germany's DAX yielded 2.87%: more than double the income.

Finally, US corporate dividends bring a concentration of risk: both regulatory risk (for example rates of withholding tax) and the currency risk of US dollars against Sterling.

Putting together all of the above, we believe it would be unwise and perhaps even irresponsible for SAINTS to invest an index-like 70% of capital solely in the US market. The result would be significantly lower income, with significantly higher risks, while missing out on many good companies which fit better with SAINTS' objectives elsewhere in the world. The flipside of all this though is that in years like 2024, when the US market is rocketing, and other markets such as Europe and Asia are rising less strongly, the NAV performance of SAINTS will inevitably lag its benchmark.

This was one part of SAINTS' under-performance of the FTSE All-World in 2024. But there was a second major factor. This was the specific type of investments that SAINTS owns. Share prices of many of SAINTS' investments, companies such as Watsco, Analog Devices and Procter & Gamble, lagged the wider US market. These resilient long-term compounders, which we favour for SAINTS' income and capital growth objectives, were deeply out of favour within the US stock market last year. The best-performing US stocks were cyclicals such as banks, which benefited from a reversal of expectations from a "hard" to a "soft" landing in the US economy, and so-called "Big Tech" stocks, where investors poured capital into names such as Nvidia, the AI chipmaker.

These types of company are usually a poor fit for SAINTS' objectives. They tend to be highly cyclical dividend payers, if they pay a dividend at all. For example, at Nvidia, as we noted in this year's interim report, there is a significant risk of a sharp downcycle in earnings if customers find ways to pursue gains in AI through optimisation, rather than ever-more hardware. This cyclicality and the lack of a meaningful dividend makes Nvidia unsuitable as an investment for SAINTS, and recent newsflow has done nothing to alter our view on its suitability.

Or to take another example of the type of US company which fared well last year, we can observe the rise of Tesla, the carmaker. Again, this is both a cyclical company and a member of the "Magnificent Seven" technology stocks, and its share price appreciated rapidly last year. But again, it is a volatile, capital-intensive business model, and it does not pay a dividend.

Shares in these kinds of company fared well in 2024, while the likes of Procter & Gamble, with its 134 years of consecutive dividends, and highly resilient earnings growth, under-performed the wider US market.

Our intention is to continue focusing squarely on SAINTS' objectives for the long-term. There are many great US companies that we can invest in, names which are a strong fit with our goal of inflation-beating income growth with resilience. Indeed, there are 20 such US names already in the equity portfolio, including the likes of Microsoft and Apple (both top ten positions) as well as lesser known names such as Fastenal the industrial distribution company, and Cognex the factory automation company.

We continue to scour the US market for new ideas, last year completing several research trips across the States that yielded exciting new holdings such as CME Group (more on this in the Transactions section). We do not plan to chase short-term momentum in the stock market, and we will continue to avoid deeply cyclical companies with high technology risk or low dividend payout ratios. We do not plan to allow SAINTS' country and currency risk at the portfolio level to come anywhere close to the benchmark's 70% US exposure.

Finally, we should acknowledge that some of SAINTS' holdings have disappointed for stock specific reasons. This is typically the case in an actively managed portfolio, as our analysis is not always correct, active management includes an assessment of outcomes which we believe are probable but know are not certain, and progress is not always smooth. This year for example the share price of B3, the Brazilian Stock exchange, has been adversely affected by sentiment towards Brazil, and Novo Nordisk has seen mixed results from some trials for its weight loss treatments. In both cases we continue to have confidence in the long-term prospects for growth. In other cases, as illustrated in the transactions section below, we have sold the shares where we believe that long term prospects have deteriorated.

SAINTS' style and structural-bias has been painful in terms of relative NAV performance over the past year in particular, and this in turn has adversely affected SAINTS' long-term numbers. But we neither aim to, nor expect to, outperform the market in every annual period, although interestingly SAINTS has outperformed in eight of the last ten calendar years. Looking forward we are encouraged by the operational (as opposed to share price) performance of your holdings, and remain convinced that a balanced portfolio of 10% compounders, split roughly evenly between the US, Europe and the rest of the world, is the most surefire way to achieve SAINTS' objectives.

Discount to NAV

Over the course of 2024, the gap between SAINTS' share price and its NAV per share widened. From a starting point of 0.8%, the discount ended the year at 10.6%. The accompanying chart puts this discount in some historical perspective. It shows the gap between SAINTS' share price and NAV over the past 30 years. During that time there have been three noticeable periods where the shares have traded at a discount to NAV: the late 1990s to early 2000s; a brief dip around 2014-15; and a more recent period starting in 2022.

http://www.rns-pdf.londonstockexchange.com/rns/9263W_2-2025-2-12.pdf

Source: Morningstar/LSEG and relevant underlying index providers. See disclaimer at the end of this announcement.

Just as the Board of SAINTS, which is highly engaged and active, takes great interest in the existence of a discount in the share price, so we as managers of the Company pay great attention to it too. A discount hovering around 10% effectively means that sellers are prepared to dispose of their shares for only 90 pence in the pound, or flipped another way, buyers are only prepared to buy shares at 90 pence in the pound. Whenever a discount appears, the question it begs is always the same: is it signalling something fundamentally wrong with the company, or is it a symptom of some wider malaise in the stock market?

If the former, we as managers need to swallow our pride and think hard about what the problem might be… and whether it can be fixed.

When SAINTS traded at a discount in the late 1990s, we can see with the benefit of hindsight that the root cause was a loss of confidence in the portfolio of investments at that time. The Company responded by buying back shares aggressively, but this had the knock-on effect of raising the gearing of the balance sheet, which in turn made the shares less attractive and pushed the discount ever-wider. This ultimately led the Board to replace the manager at the end of 2003. Over the subsequent eight years the portfolio was improved, and trust in the Company's portfolio restored, leading the discount to close.

In 2014/15, the discount was more a function of a sector malaise. At the time, expectations for UK interest rates were rising markedly. This had a knock-on impact on the perceived attractiveness of equities in the short-term. That impact was felt across the investment trust sector, and SAINTS was no different to many others in the Global Equity Income sector, as its shares moved from a premium to a discount. Sentiment to the sector later improved and SAINTS, again like the wider sector, moved back to a premium.

In 2024, we do not yet have the benefit of hindsight. What we can observe is that SAINTS is not alone in trading on a discount. Far from it: the vast majority of investment trusts are currently trading at a discount, as the chart below shows. This suggests a market-wide malaise rather than something SAINTS-specific. For example, it may be that investment trust buyers, who are often quite sophisticated investors, are simply passing verdict on the current level of market valuations of trust portfolios. Perhaps buyers are sceptical that interest rates will fall quite as rapidly as current valuations may imply and are demanding a margin of safety to invest in trusts. Another way of looking at this is to say that with UK gilt yields sitting at levels between 4 and 5%, the risk-reward of buying shares in an investment trust is not, for some, sufficiently compelling at the moment.

Our personal view, speaking both as managers and as shareholders in the Company, starts with the observation that the underlying portfolio is robust (as outlined in the first section of this report). The valuation of the assets appears to us relatively reasonable, particularly given that the average SAINTS' equity holding is not trading at anything like the valuation multiples we currently observe in some parts of the wider stock market. The portfolio is also highly liquid, and marked-to-market daily, as it consists mostly of listed equities. Only the property portfolio could be considered less liquid, but this represents only 9% of total assets, and it is independently valued every six months. Meanwhile the gearing of the Company remains low, and the less liquid assets are broadly funded by attractively priced long term debt.

So, our view is that it is likely that SAINTS' discount is to a large extent a reflection of sentiment in the wider investment trust sector, rather than something Company-specific. It can also be argued that trusts which focus on income are particularly vulnerable to higher gilt yields. History suggests this is likely to pass with time, perhaps if inflation moderates or gilt yields fall. In the meantime, we as managers believe that SAINTS' discount represents an unusual opportunity to invest at a price below NAV. We have been adding to our own holdings over the past several months.

http://www.rns-pdf.londonstockexchange.com/rns/9263W_3-2025-2-12.pdf

Source: Winterflood

* Alternative performance measure - see glossary of terms and alternative performance measures at the end of this announcement.

Transactions

We continually seek ways to upgrade SAINTS' investments: this is central to the job of active managers on behalf of shareholders. In 2024 we carried out a number of transactions which we believe strengthened the prospects of the Company in the years ahead.

In the equity portfolio, we divested from Sonic Healthcare, the lab testing company, after a number of years of pedestrian dividend growth (for instance: just 2% in 2024). We re-assessed its future prospects and concluded that, although the resilience of the dividend remained high, there were various structural headwinds in its markets (notably a lack of pricing power) that made an acceleration in its earnings and dividends unlikely. At Dolby Laboratories, another divestment, it was a similar story: several years of lacklustre earnings growth which we believe are most likely caused by structural headwinds, particularly in pricing. Both companies have been investments for about a decade, and the returns from both have been fine, and their dividends have been extremely resilient. But we believe we can do better for shareholders elsewhere.

At Kering, the luxury goods company, SAINTS has enjoyed several years of strong earnings and dividends growth since we invested in 2016. But lately the company seems to have gone off-track, losing key talent and pursuing a new strategy which, based on our experience, has a low probability of working: moving away from what is authentic to its brands while at the same time pushing up prices. Typically, this results in old customers leaving faster than new ones arrive, and we strongly suspect there will be a number of painful years ahead (and most likely a reduction in the dividend).

At Hargreaves Lansdown, the investment platform, our hand was forced by a bid from a private equity buyer which was backed by other shareholders. At pharmaceutical maker GlaxoSmithKline, another divestment in 2024, the decision was solely ours. Our investment case had been predicated on better commercial management of the company's portfolio, and a rebuilt pipeline under visionary new leaders appointed to the R&D team. The first part of the investment case worked, and the shares rose during our ownership, but the second part failed to come to fruition. We decided to move on in favour of higher conviction growth investments elsewhere.

We made three new purchases during the year. The first was Epiroc, a leader in drilling equipment used in mines and construction. This company is unusually well-managed: it comes from the same stable of firms that produced our successful investment in Atlas Copco, the Swedish engineering powerhouse. At Epiroc we see many of the same qualities, and we expect many years of solid profit and dividend growth. This should be underpinned by the company's constant innovation, combined with several supportive trends we see in its end-markets: such as increasing use of automated drilling for safety reasons, and increasing use of software to deliver better analysis of how to drill. The company aims to pay a resilient dividend across cycles.

CME Group was another attractive new investment during the year. This company is dominant in the exchange of derivatives in US markets: most notably interest rate futures, but also a long list of energy, metal and agricultural commodities encompassing everything from oil to copper to corn. It does not take positions on these commodities, rather it operates the pre-eminent marketplace in the US where buyers can find sellers, through its matching platform, Globex. In the years ahead we expect growth in CME's revenues to be driven by ever-rising trading volumes, as its customers, such as banks, try to manage ever-more complex financial risks. It is constantly innovating new products, and there is good potential for it to grow its customer bases internationally. The margins and cashflow from the business are strong, which it pays out in an attractive level of dividends. Last year the shares were weak, as some investors worried about the impact of falling interest rates, and a new competitor launching in the US. But our analysis suggests the rate worry is misplaced, and the new player is unlikely to have significant success, and we took this as an opportunity to invest.

Paychex was a third new investment. This is a payroll processing company serving thousands of small businesses in the US. Every time employees get paid, companies need to navigate a labyrinth of state and federal rules to ensure the correct deductions, taxes, and so on are made. This is the core of Paychex software, saving employers dozens of hours of time for the cost of a few dollars a month. An attraction is the additional products that can be sold on the back of this software: such as health insurance, recruitment tools, and a host of other tasks connected to managing people. We foresee Paychex selling every more products to ever more businesses in the years ahead, growing its earnings and its dividend, which have a tremendous track record of compounding.

Within the property portfolio, there were new purchases of a motorway service station south of London, and an industrial warehouse in the south of England. Both are exactly the sort of long-leased, inflation-linked property which the manager seeks. In the bond portfolio there were divestments to fund these property investments. In the infrastructure portfolio there were no major transactions.

Conclusion

To go back to the start: SAINTS' performance in 2024 was mixed. The highlights were the strong growth in earnings delivered by the Company's investments, driven by an equity portfolio that is in fine form, with its dividends growing on average by 10%. Income from property and the other asset classes was also robust. This underpinned another inflation-beating increase in SAINTS' dividend to shareholders: the 51st consecutive increase. The NAV of the Company also rose to a new high.

As we have also examined, the relative performance of the NAV lagged global equity markets last year. This was due primarily to the more balanced approach that SAINTS takes to investing, and in particular our focus on companies with resilient earnings and income growth. These were not the type of companies that saw the strongest rises in share prices in 2024. The discount between the NAV and SAINTS' share price widened last year, which we believe is symptomatic of the wider investment trust sector.

We look forward with great optimism to the years ahead. We will stay true to SAINTS' objective of delivering a resilient income that grows ahead of inflation, while also aiming to grow capital value. Our analysis of the investment portfolio suggests it is well-placed for this task. We continue to find exciting new ideas around the world, the likes of Epiroc, CME and Paychex: names that make SAINTS' prospects ever-stronger. We remain resolutely aligned with shareholders, investing alongside them as owners of SAINTS' shares.

James DowRoss MathisonBaillie Gifford & Co12 February 2025

For a definition of terms see glossary of terms and alternative performance measures at the end of this announcement.

Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer at the end of this announcement.

Past performance is not a guide to future performance.

List of investments

As at 31 December 2024

Property portfolio

* Sold during the year.

† Purchased during the year.

# See glossary of terms and alternative performance measures at the end of this announcement.

Performance attribution

For the year to 31 December 2024

* The Company's benchmark is the FTSE All-World Index (in sterling terms).

† Alternative performance measure - see glossary of terms and alternative performance measures at the end of this announcement.

# Includes Baillie Gifford and OLIM Property Limited management fees.

Source: Baillie Gifford / LSEG and relevant underlying index providers. See disclaimer at the end of this announcement.

Past performance is not a guide to future performance.

Income statement

For the year ended 31 December 2024 (with comparatives as at 31 December 2023)

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

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

A Statement of comprehensive income is not required as there is no other comprehensive income.

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

Balance sheet

As at 31 December 2024 (with comparatives as at 31 December 2023

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

* See glossary of terms and alternative performance measures at the end of this announcement.

Statement of changes in equity

For the year ended 31 December 2024

For the year ended 31 December 2023

*- The capital reserve as at 31 December 2024 includes unrealised investment holding gains of £31,084,000 (31 December 2023 - gains of £339,191,000).

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

Cash flow statement

For the year ended 31 December 2024 (with comparatives as at 31 December 2023)

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

Notes to the Financial Statements

1. Basis of accounting

The Financial Statements for the year to 31 December 2024 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and on the basis of the accounting policies set out in the Annual Report and Financial Statements for the year ended 31 December 2024.

2. Income

3. Investment Managers

Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed as the Company's Alternative Investment Fund Manager ('AIFM') and Company Secretary. Baillie Gifford & Co Limited has delegated investment management services to Baillie Gifford & Co. Dealing activity and transaction reporting have been further sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited. The management of the property portfolio has been delegated to OLIM Property Limited.

The Investment Management Agreement between the AIFM and the Company sets out the matters over which the Managers have authority in accordance with the policies and directions of, and subject to restrictions imposed by, the Board. The Investment Management Agreement is terminable on not less than six months' notice. Compensation fees would only be payable in respect of the notice period if termination were to occur within a shorter notice period. The annual management fee is 0.45% of the first £500 million of total assets and 0.35% of the remaining total assets, total assets being the value of all assets held (excluding the property portfolio) less all liabilities, other than any liability in the form of debt intended for investment purposes, calculated on a quarterly basis. The Board is of the view that calculating the fee with reference to performance would be unlikely to exert a positive influence on performance.

The Property Management Agreement sets out the matters over which OLIM Property Limited has discretion and those matters which require Board approval. The Property Management Agreement is terminable on three months' notice. The annual fee is 0.5% of the value of the property portfolio, subject to a minimum quarterly fee of £6,250.

4. Net return per ordinary share

Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of £25,822,000 (2023 - £23,960,000) and on 178,117,932 (2023 - 177,707,094) ordinary shares of 25p, being the weighted average number of ordinary shares in issue during the year.

Capital return per ordinary share is based on the net capital gain for the financial year of £26,050,000 (2023 - net capital gain of £81,078,000), and on 178,117,932 (2023 - 177,707,094) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

There are no dilutive or potentially dilutive shares in issue.

5. Ordinary dividends

We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution out of current year profits by way of dividend for the year is £25,822,000 (2023 - £23,960,000).

6. Creditors - amounts falling due after more than one year

The main covenants for the loan notes which are tested monthly are that net tangible assets shall not fall below £120,000,000 and gross borrowings shall not exceed 40% of the Company's adjusted assets.

7. Share capital

The Company's shareholder authority permits it to hold shares bought back in treasury. Such treasury shares may be subsequently either sold for cash at a premium to net asset value per ordinary share or cancelled. At 31 December 2024, the Company had authority to buy back 25,064,374 ordinary shares. During the year to 31 December 2024, no ordinary shares were bought back for cancellation (2023 - no ordinary shares) and 1,665,185 (2023 - none) ordinary shares were bought back into treasury at a cost of £8,529,000 (2023 - no shares were bought back). Under the provisions of the Company's Articles of Association, share buy-backs are funded from the capital reserve.

The Company has authority to allot shares under section 551 of the Companies Act 2006. During the year, no shares were issued (2023 - 1,565,000 shares were issued at a premium to net asset value raising proceeds of £8,302,000).

8. During the year, transaction costs on purchases and sales amounted to £1,773,000 (2023- £985,000) and £200,000 (2023 -£189,000) respectively.

9. Analysis of change in net debt

10. The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2024 or 2023 but is derived from those accounts. Statutory accounts for 2023 have been delivered to the registrar of companies, and those for 2024 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

11. The Report and Accounts will be available on the SAINTS page of the Managers' website saints-it.com‡ on or around 27 February 2024.

Glossary of terms and alternative performance measures ('APM')

An alternative performance measure is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework.

Total assets

This is the Company's definition of Adjusted Total Assets, being the total value of all assets held less all liabilities (other than liabilities in the form of borrowings).

Net Asset Value ('NAV')

Also described as shareholders' funds, net asset value is the value of total assets less liabilities (including borrowings). Net asset value can be calculated on the basis of borrowings stated at book value and fair value. An explanation of each basis is provided below. The net asset value per share is calculated by dividing this amount by the number of ordinary shares in issue excluding any shares held in treasury.

Net Asset Value (borrowings at book value)

Borrowings are valued at adjusted net issue proceeds. Book value approximates amortised cost.

Net Asset Value (borrowings at fair value) (APM)

Borrowings are valued at an estimate of their market worth. This indicates the cost to the Company of repaying its borrowings under current market conditions. It is a widely reported measure across the investment trust industry.

Premium/(discount) (APM)

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

Ongoing charges (APM)

The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average net asset value (with borrowings at fair value). The ongoing charges have been calculated on the basis prescribed by the Association of Investment Companies.

A reconciliation from the expenses detailed in the Income statement above is provided below.

Total return (APM)

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

* The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the cum income NAV/share price at the ex-dividend date.

Gearing (APM)

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

Potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds.

Equity gearing is the Company's borrowings adjusted for cash, bonds and property expressed as a percentage of shareholders' funds.

Sustainable Finance Disclosure Regulation ('SFDR')

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

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

Baillie Gifford & Co believes that a company cannot be financially sustainable in the long run if its approach to business is fundamentally out of line with changing societal expectations. It defines 'sustainability' as a deliberately broad concept which encapsulates a company's purpose, values, business model, culture, and operating practices.

Baillie Gifford & Co's approach to investment is based on identifying and holding high quality growth businesses that enjoy sustainable competitive advantages in their marketplace. To do this it looks beyond current financial performance, undertaking proprietary research to build up an in-depth knowledge of an individual company and a view on its long-term prospects. This includes the consideration of sustainability factors (environmental, social and/or governance matters) which it believes will positively or negatively influence the financial returns of an investment. The likely impact on the return of the portfolio from a potential or actual material decline in the value of investment due to the occurrence of an environmental, social or governance event or condition will vary and will depend on several factors including but not limited to the type, extent, complexity and duration of an event or condition, prevailing market conditions and existence of any mitigating factors.

Whilst consideration is given to sustainability matters, there are no restrictions on the investment universe of the Company, unless otherwise stated within in its Investment Objective & Policy. Baillie Gifford & Co can invest in any companies it believes could create beneficial long-term returns for investors. However, this might result in investments being made in companies that ultimately cause a negative outcome for the environment or society.

The underlying investments do not take into account the EU criteria for environmentally sustainable economic activities established under the EU Taxonomy Regulation.

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

Third party data provider disclaimer

No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data.

No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom. No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.

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

FTSE Index data

Source: London Stock Exchange Group plc and its group undertakings (collectively, the 'LSE Group'). © LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies. 'FTSE®' 'Russell®', 'FTSE Russell®', is/are a trade mark(s) of the relevant LSE Group companies and is/ are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

Automatic Exchange of Information

In order to fulfil its legal obligations under UK tax legislation relating to the automatic exchange of information, The Scottish American Investment Company P.L.C. is required to collect and report certain information about certain shareholders.

The legislation requires investment trust companies to provide personal information to HMRC on certain investors who purchase shares in investment trusts. Accordingly, The Scottish American Investment Company P.L.C. will have to provide information annually to the local tax authority on the tax residencies of a number of non-UK based certificated shareholders and corporate entities.

Shareholders, excluding those whose shares are held in CREST, who come on to the share register will be sent a certification form for the purposes of collecting this information.

For further information, please see HMRC's Quick Guide: Automatic Exchange of Information - information for account holders gov.uk/guidance/automatic-exchange-of-information-account-holders.

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

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