Murray Income Trust – Annual Financial Report

Murray Income Trust PLC

Annual Report 30 June 2025

Net asset value total returnABC	Share price total returnAB
2025: +2.7%	2025: +4.3%
2024: +9.9%	2024: +7.6%
Benchmark total returnAD	Ongoing chargesB
2025: +11.2%	2025: 0.48%
2024: +13.0%	2024: 0.50%
Earnings per share (revenue)	Dividend per share
2025: 38.6p	2025: 40.00p
2024: 37.4p	2024: 38.50p
Discount to net asset valueBC	Dividend yieldB
2025: 9.6%	2025: 4.7%
2024: 10.5%	2024: 4.5%

Chair’s Statement

Highlights

• Announcement by the Board in early July of a strategic review in the pursuit of delivering improved performance and returns for shareholders, with an outcome expected by the end of 2025

• Annual dividend increased by 3.9%, the 52^nd consecutive annual increase

• Net Asset Value (“NAV”) total return ^AB of 2.7% for the year

• Share price total return ^A of 4.3%

• Both performance numbers disappointing against the 11.2% total return of the FTSE All-Share Index

• Discount reduced modestly from 10.5% to 9.6% over the year

^A Considered to be an Alternative Performance Measure.

^B With debt at fair value.

In my previous annual statement, I highlighted the turbulence experienced by equity markets in the year ending 30 June 2024. I can report that the subsequent year ending 30 June 2025 has been equally – if not more -volatile. Persistent global geopolitical tensions, ongoing trade disputes, and regional conflicts have continued to fuel significant uncertainty and volatility globally.

This environment of instability has not been helped by the new Government’s first Budget, announced last October, which introduced substantial increases in National Insurance contributions for employers, along with other fiscal measures aimed at addressing the budget deficit. These domestic policy shifts, combined with the broader international climate, have contributed to periodic fluctuations and instability in both UK and global financial markets.

Despite the backdrop, however, both international and domestic equity markets have remained remarkably sanguine overall, with the MSCI Developed World Index (sterling) rising by 7.7% and the UK FTSE All-Share Index (the “Benchmark”) rising by 11.2% over the Year. The Board recognises and shares shareholders’ disappointment that, against this backdrop, the Company’s NAV and share price returns over the year were only 2.7% and 4.3%, once again lagging behind the Benchmark. In fact, the Company is now trailing the Benchmark over one, three, five and ten years.

Investment Performance

Shareholders will find a detailed review of the Manager’s strategy and full details of performance over the period in the Investment Manager’s Report. Headline performance figures may be found in the below table.

From 30 June 2025 to 8 September 2025, being the latest practicable date prior to approval of this Report, the NAV per share (with debt at fair value) returned 2.8% as compared to 5.3% for the FTSE All-Share Index (both figures on a total return basis). The share price total return was 5.9%, reflecting the discount narrowing from 9.6% to 6.9% since the announcement by the Company of a strategic review (see below).

	One year ended 30 June 2025	3 years ended  30 June 2025 (annualised)	5 years ended  30 June 2025 (annualised)	10 years ended  30 June 2025 (annualised)
Performance (total return)	%	%	%	%
Share price A,B	4.3	5.6	6.7	6.5
Net asset value per Ordinary share A,B,C	2.7	7.1	7.5	6.5
FTSE All-Share	11.2	10.7	10.8	6.8

Strategic Review

The Board has been actively assessing the Manager’s performance over an extended period, including a comprehensive review of the portfolio’s holdings and a deep analysis of the underlying causes of the underperformance. The Board has engaged with senior leadership at Aberdeen on multiple occasions and undertook a comprehensive review, in early 2025, of the Manager’s investment process including engaging with the investment manager, in order to better understand the factors behind the portfolio performance. The Chair and the Senior Independent Director also recently met with several of the Company’s major shareholders to hear their views given the underperformance of the Company.

Despite the Board’s continued efforts and the implementation of initiatives aimed at improving performance and shareholder value, there has been little sign of improved performance. The Board, which has a duty to act independently in the best interests of shareholders, therefore concluded that it was appropriate to undertake a review of the Company’s strategic options.

As part of the review announced in July 2025, which remains ongoing, the Board is considering proposals regarding the Company’s future and its management arrangements from a range of candidates, including third party investment managers, other investment companies, and the incumbent Manager. The Board is taking into account factors including historic record, portfolio construction, investment philosophy, investment management structure, income generation, risk controls and commitment to investment trusts. The objective of the strategic review is to evaluate all aspects of the Company in the pursuit of delivering improved performance and returns for its shareholders, while continuing to provide an attractive dividend yield from a portfolio predominantly focused on UK equities.

The Board will update shareholders on the progress of the strategic review as appropriate and expects that the review will be concluded during the fourth quarter of 2025.

Dividend

On 31 July 2025, the Company announced its 52nd consecutive year of growing dividends. For the year ended 30 June 2025, the dividend increased from 38.5p to 40.0p per share, a rise of 3.9%. Revenue per share for the year was 38.6p, a 3.2% increase on last year’s 37.4p. As a result of the dividend payment exceeding the revenue per share for the year, total revenue reserves fell modestly from 55% to 54% of the current annual dividend. The Board is committed to the continuation of a progressive dividend. The Fourth Interim Dividend of 11.5p per share was paid, on 11 September 2025, to shareholders on the register on 15 August 2025; the ex-dividend date is 14 August 2025.

Discount and Share Buybacks

Across the industry, investment trusts continue to undertake share buybacks to help reduce the volatility and level of discounts to net asset value in the sector. In the six months to end June 2025, the level of buybacks across the sector reached £4.8 billion compared to £3.6 billion in the first half of 2024.

Despite the level of buybacks, discounts across the investment trust sector continue to trade at above average levels, although these discounts have narrowed somewhat during 2025, falling from a sector average (excluding 3i) of about 15% at the beginning of 2025 to about 12.8% as we go to press. The average figure includes the discounts attributable to some of the less liquid investment trusts such as private equity trusts and trusts in the alternative sector. Discounts in the quoted equity sector are, however, still higher than average, except where strong performance has driven demand for the underlying trusts’ shares.

The Company bought back 6.8 million shares over the Year, representing 6.5% (2024: 6.4%) of the shares outstanding at the beginning of July 2024. These shares were bought at an weighted average discount of 10.9%, with a corresponding positive impact on the NAV total return of 0.7% over the Year.  The shares bought back are kept in Treasury, meaning there is the potential for them to be reissued should the Company return to a sustained premium to NAV in the future.

As at 30 June 2025, there were 97,912,184 (2024: 104,685,001) Ordinary 25p shares in issue with voting rights and 21,617,348 (2024: 14,844,531) shares held in Treasury.

The Board monitors the discount level closely and will again be requesting shareholders’ approval at the AGM to renew the Company’s buyback and issuance powers.

Gearing

The Company’s net gearing was 11.1% at 30 June 2025 (2024: 9.1%) and the Board’s policy towards gearing remained unchanged during the Year.

The Company has in place £100 million of long-term borrowings made up of £40m loan notes redeemable at par in November 2027 and £60 million loan notes redeemable at par in May 2029. These combined have a weighted interest cost of 3.6%.

As reported at the interim stage, the Company refinanced its £30 million of bank borrowings in October 2024 by entering into a new three-year multi-currency revolving credit facility of £30 million with the Royal Bank of Scotland International, London Branch (the “Facility”). At the year end the Company had drawn down £6.1 million from the Facility.

Board Composition

Alan Giles retired from the Board at the conclusion of the AGM in November 2024 and was succeeded as Senior Independent Director by Stephanie Eastment. Nandita Sahgal Tully replaced Stephanie as Chair of the Audit Committee. Andrew Page was appointed a Director on 17 January 2025. All directors are non-executive and are independent of the Manager.

Investment Process and People

Our Manager’s investment process continues to be focused on the search for good quality companies at attractive valuations, with the potential for sustainable dividend growth.

As part of the process of reviewing the performance of the Company, Ian Hewett was added to the team during the course of the Year to bring additional breadth to the research process, working alongside Charles Luke, who has been our lead portfolio manager since 2006 and Rhona Millar.

Looking to the Future

Normally, in this section of the Report, I would look ahead to the prospects for UK equities, considering the various issues likely to impact the portfolio and share price. These include geo-political events, the global appetite for UK equities, and how costs are calculated and published for the investment trust sector as a whole. However, given that the Board has recently announced a strategic review, I thought I would share some thoughts about why we have embarked upon such a review.

Investing requires a long-term perspective, and our manager, Charlie Luke, has been managing the fund since 2006. During that time there have been periods of both outperformance and underperformance. There have also been numerous cycles in the market, ranging from ‘fear and greed’ during and after the credit crisis in 2007-2009, through the Euro crisis in 2011, the Brexit referendum in 2016 and, more recently, the impact felt by the Covid outbreak and the invasion of Ukraine. There have been thematic market cycles, with Value investing and Quality or Growth investing going in and out of fashion, often for a number of years at a time. The investment trust sector itself has also been going through a period of turmoil recently, and we are seeing an increasing amount of activity as Boards explore ways of delivering consistently good returns for shareholders.

Throughout all of this, your Board has focused on shutting out short-term noise to maintain a long-term investment perspective. The Manager adopts a quality income growth strategy and the Board understands that this can go in and out of fashion. Since the end of the credit crisis in 2009, for example, there have been four discernible cycles in the five-year relative return profile of the Murray Income portfolio. There have been two periods where the relative return was positive; 2009 – mid 2014 and 2018 – late 2021. There have also been two periods of underperformance; mid 2014 – mid 2018 and since late 2021.

Whilst the Board acknowledges and appreciates the dedication of the Manager and the longstanding tenure of Charlie Luke, this current period of underperformance has already lasted for approaching five years and has been significant in its scale, impacting both the five year and the 10-year relative performance numbers against the Benchmark and also against the UK equity indices with a quality focus. The persistent underperformance has led to the Company trading at a sustained discount to NAV in recent years, despite a significant level of share buybacks. In the light of these challenges, the strategic review was launched. The Board has received a large number of high quality proposals as part of the review process and we look forward to providing a further update to shareholders in due course.

Online Shareholder Presentation

The Company expects to hold a shareholder webinar after the conclusion of the strategic review.

Annual General Meeting

The Company is holding its AGM at 12.30 pm on Tuesday 4 November 2025 at Wallacespace Spitalfields, 15 Artillery Lane, London E1 7HA.

I always welcome questions from our shareholders at the AGM. Alternatively, shareholders may submit questions prior to the AGM by sending an email to: murray.income@aberdeenplc.com.

Shareholders will find enclosed with this Annual Report an Invitation Card and Form of Proxy for use in relation to the AGM. Whether or not you are attending the AGM, shareholders are encouraged to complete the Form of Proxy, for which the latest date of receipt by the registrar, MUFG Corporate Markets, is 12.30pm on 31 October 2025. Completion of a Form of Proxy does not prevent a shareholder from attending and voting in person at

the AGM.

Shareholders who wish to attend and/or vote at the AGM and hold their shares via a platform will need to make arrangements with the administrator of their platform. Further details on how to attend and vote at company meetings for holders of shares via platforms can be found at: www.theaic.co.uk/aic/how-to-vote-your-shares.

Shareholders wishing to attend the AGM and who are unsure how to register, are invited to send an email to: murray.income@aberdeenplc.com.