Date:                     3 August 2023

Contact:               Sam Cosh (Lead Investment Manager) / Scott McEllen (Investment Company Secretary)             

                                Columbia Threadneedle Investment Business Limited   

                                0131 573 8300                                                               

LEI:                         213800N61H8P3Z4I8726

European Assets Trust PLC

Unaudited Statement of Results

for the half-year ended 30 June 2023

Highlights for the half-year ended 30 June 2023:

·    Net Asset Value total return of 5.2% in comparison to the benchmark return of 2.9%.

·    Share price total return of -0.3%.

·    An annual dividend of 5.80p per share for 2023 representing a dividend yield of 6.5% based on the Company's closing share price of 89.6p on 2 August 2023.

"It has been a better half for our portfolio with our total return outperforming the benchmark in an environment that rewarded stock picking. Some of our long-term themes such as health and wellness, digitalisation and consumer brands reasserted themselves following a tough last year.

While this is a good start, the Board recognises that we still have much to do to make up the ground lost last year. Accordingly, we are not complacent and are conscious that the macroeconomic and volatile geopolitical environment provides a continuing challenge for stock pickers.  However, history shows that volatility can provide opportunity."

Jack Perry CBE

Chairman

SUMMARY OF RESULTS

(1)   Total Return - the return to Shareholders calculated on a per share basis adding dividends paid in the period to the increase or decrease in the Share Price or Net Asset Value in the period. The dividends are assumed to have been re-invested in the form of shares or net assets, respectively, on the date on which the shares were quoted ex-dividend.

(2)   With effect from 1 June 2023 the benchmark changed from EMIX Smaller European Companies (ex UK) Index (net) to MSCI Europe excluding United Kingdom Small Mid Cap (Net Return) Index.  For the six-month period ended 30 June 2023 a time-apportioned composite of both indices has therefore been calculated and disclosed.

(3)   The first interim dividend of 1.45p per share was paid on 31 January 2023, the second interim dividend of 1.45p per share on 28 April 2023 and the third interim dividend of 1.45p per share on 31 July 2023. The fourth interim dividend of 1.45p per share is payable to eligible Shareholders on 31 October 2023.

The Chairman, commenting on the results, said:

For the six-month period ended 30 June 2023, European Assets Trust PLC ("the Company") recorded a Sterling Net Asset Value ("NAV") total return of 5.2%. This compares to the total return from the Company's benchmark of 2.9% for the same period. With the discount widening from 5.1% as at 31 December 2022 to 10.2% as at 30 June 2023, the Sterling share price total return for the period was -0.3%. At the period end the NAV was 98.7p (31 December 2022: 96.5p) and the share price was 88.6p (31 December 2022: 91.6p).

It has been a better half for our portfolio with our NAV total return outperforming the benchmark in an environment that rewarded stock picking. Some of our long-term themes such as health and wellness, digitalisation and consumer brands reasserted themselves following a tough last year. Unfortunately, our share price failed to keep pace with our NAV as our discount widened, a trend that has been seen across most of the Investment Company sector.

The year started optimistically with better economic data showing that Europe had navigated what was predicted to be a tough winter well. This positive impetus was checked in March by the failure of Silicon Valley Bank in the US and the collapse of Credit Suisse in Europe. Whilst Europe's banking system was resilient enough to avoid contagion, a tightening of credit conditions exacerbated the delayed effect of higher rates with much of the Eurozone suffering anaemic growth or indeed recession. The first half of 2023 has therefore concluded on a more pessimistic note.

Dividends

The 2023 dividend of 5.80p per share is payable in four equal instalments of 1.45p. Three interim dividends have been paid on 31 January, 28 April and 31 July with a further instalment of 1.45p to be paid on 31 October 2023.

As at 2 August 2023, the latest practicable date prior to publication of this announcement, an annual dividend of 5.80p per share represented a yield of 6.5% calculated with reference to the Company's closing share price of 89.6p. The level of dividend paid each year is determined in accordance with the Company's distribution policy. The Company has stated that, barring unforeseen circumstances, it will pay an annual dividend equivalent to six per cent of its NAV at the end of the preceding year.

Directorate Changes

As part of the Board's succession plan, and as previously announced, Julia Bond, the Company's Senior Independent Director, will retire on 31 January 2024. Julia was appointed as a Director of the Supervisory Board of the Company's Dutch predecessor, European Assets Trust NV, in April 2014 and upon retirement will have served nine years between both entities. On behalf of the Board and Shareholders of the Company I thank Julia for her diligence and wise counsel

throughout her period of appointment.

As a further part of this plan a search company has been commissioned to find a new Director for the Board.

I was also appointed to the Supervisory Board of the Company's predecessor in April 2014 and became its Chairman with effect from April 2015. As previously announced, I will retire from the Board at the conclusion of the Company's 2024 Annual General Meeting and Stuart Paterson, who was appointed to the Board in July 2019 will become Chairman.

Following my retirement and Stuart Paterson's assumption of the Chairmanship, Kevin Troup will be appointed Chairman of the Company's Audit and Risk Committee.

Outlook

After a disappointing 2022, the Company's recent performance in a difficult market for European equities is pleasing. While this is a good start, the Board recognises that we still have much to do to make up the ground lost last year.  Accordingly, we are not complacent and are conscious that the macroeconomic and volatile geopolitical environment provides a continuing challenge for stock pickers. However, it is worth looking back to the Company's 2022 interim report where I noted that during times of economic volatility it is sometimes easy to lose sight of the potential of our focus markets. This was during the depths of negative sentiment towards Europe last summer when inflation was rising rapidly, and European industry was facing the prospects of gas shortages during the winter. From these lows, Europe led the recovery of global markets. While this recovery has petered out in recent months, history shows that volatility can provide opportunity. We are expecting some further difficult months for the European economy as interest rates bite, but this is beginning to be discounted by the markets. After all, valuations in the region are attractive, especially for smaller companies. How central banks manage the balance between curbing inflation and stifling economic activity will largely dictate the outturn for the period. But it will provide opportunities for the well managed businesses which we believe our portfolio comprises, which in turn should lay the foundation for a more sustained recovery.

Jack Perry CBE

Chairman

The Investment Manager, commenting on the results, said:

Market Backdrop

The year started strongly with a pickup in business surveys leading to more optimistic assessments of the region's economic outlook. While the ECB continued to raise interest rates, inflation rates declined, and lower energy costs provided some relief to the industrial sector and for the European economy as a whole. Cyclically sensitive sectors performed strongly, with peaking interest rate expectations providing a more supportive backdrop for growth stocks. This optimism, however, faded as we transitioned through the six-month period as higher interest rates started to bite and economic indicators moved into contraction territory. Core inflation also remains stubbornly high, prompting the ECB to continue pushing rates higher, though any further economic weakness must make more rate rises less palatable. Investors also had to contend with the failure of Credit Suisse following the collapse of Silicon Valley Bank in the US. Despite this, the European banking system held up well through the period, but credit conditions have since worsened. Nonetheless our index registered gains in both local currencies and our reporting currency, though the strength of Sterling softened some of this return.

Performance

It is pleasing to report a strong NAV performance ahead of the index. Our consumer related stocks were strong contributors to this performance. Cairn, the Irish housebuilder, led this outperformance. While higher interest rates are not necessarily a good backdrop for demand for housing, the unique dynamics of the Irish market mean that Cairn's outlook is attractive. For historic reasons, the supply of new homes has been sorely lacking, meaning that there is a huge imbalance with demand continuing to be strong. This means that the housing market is a key priority for the government, who are generating a significant surplus, and who have a fully funded 'housing for all' strategy in place. With the largest landbank and order book in the market, and buoyant new sales figures, Cairn are benefitting from this. Another strong performer within the Irish market was Dalata, the Irish listed hotel operator, which has also seen the benefit of a favourable demand and supply balance, but also the recovery in tourism and corporate travel. Thule, the Swedish producer of outdoor and leisure equipment, continued its recovery from a very challenging year in 2022, as signs emerged that retail inventories had reduced enough to see consumer demand patterns return to normal.

Our semiconductor equipment companies, the Dutch listed ASM International, and Belgian listed, BE Semiconductor Industries ("BESI"), had exceptional halves. Both companies are exposed to secular growth within the industry as the ongoing miniaturisation of semiconductors results in more demand for their equipment. The industry as a whole is benefitting from the requirements of governments to source more silicon chips locally. These shares really took off though in May when the Nvidia results heralded the first positive impact of Generative AI on demand in the sector.  Generative AI is the latest iteration of artificial intelligence in which computer algorithms are used to generate outputs that resemble human-created content.  This requires significant computer processing power and will drive greater demand for semiconductors. Both ASM International and BESI should benefit from this demand, though we are unlikely to see it in the order books before the year end.

Our industrials also performed well. Of note was the recent addition Engcon, the leading producer of tiltrotators that attach to excavators. This Swedish listed business produced exceptional first quarter results, despite uncertain activity in its end markets. Wizz Air, the low-cost airline, also had a good first half as it saw a significant increase in demand while fuel costs fell. Kardex, the leading intralogistics solutions provider, fared well following good results and provided confidence that automation and re-shoring would drive growth. Many of these stocks suffered badly in 2022 and our patience through that difficult patch has been rewarded. Turning to more disappointing aspects of performance, our worst contributor was one of our largest positions, Tecan, the Swiss listed, medical technology business. While there was not any stock specific news, there were a number of profit warnings within the sector, and this appeared to weigh on the shares. One of these warnings came from another of our healthcare holdings, Stratec, which announced weaker profits reflecting an inability to pass on extra manufacturing costs to its clients. This lack of cost control and pricing power prompted us to sell the position. However, we continue to back Tecan and would expect its results to remind investors of the strong characteristics of the business and be reflected in improved stock market performance.

Another poor performer was Karnov, the leading provider of legal information in Scandinavia. While its operating results have been reasonable, it has struggled for two reasons. Firstly, following the acquisition of some large assets in Spain and France, it is carrying significant balance sheet leverage. The cash flow generation of the company is excellent, so we would expect the leverage ratios to fall rapidly, and are therefore not unduly concerned. The second reason for the weakness is the uncertainty over the emergence of Generative AI on the business. We view this threat as overstated, though we are cognisant that we are early in establishing what Generative AI means for the industry.

Other poor performance came from Lectra, the French listed manufacturing technology business, Nordic Semiconductor, the leading Bluetooth chip provider, and Coor Service Management, the Scandinavian facilities management company. All companies had poor operating results, but we expect these to be temporary, so are maintaining our holdings, and have been adding in some cases.

Portfolio Activity

Portfolio turnover is in line with long term averages. We sold our holdings in Alten, the French R&D outsourcer, and Sparebank, for valuation reasons, as well as Sligro, the Dutch food services business, and Stratec, the medical technology company, following a loss of conviction in their market positions.

Idea generation was productive, supported by our new colleagues within Columbia Threadneedle Investments. We diversified our relatively large semiconductor holdings by adding BESI, listed in Belgium, and Technoprobe, listed in Italy, both equipment providers to the industry, the former so far proving to be a well-timed purchase. We also added Campari and Remy Cointreau within the spirits sector, taking advantage of the shares falling in our market cap range. We are taking our time to build our full position in Remy as the shorter-term outlook is weaker, but Campari has delivered well thus far. We have also added Carel, a market leading producer of intelligent controls for heating, ventilation, air-conditioning and refrigeration, which is set to benefit from regulation driven investments to improve the environmental credentials of buildings. Finally, we have started a position in Swiss listed Surgical Science. It is the market leader in software and systems used in medical training for minimally invasive surgery and robotic surgery. Robotic surgery is growing quickly, yet the penetration rate globally is small. Surgical Science enables this growth through teaching surgeons to operate safely.

Outlook

The recent economic news is troubling with rising interest rates finally starting to impact aggregate demand. The key from here is whether central banks can achieve a relatively benign cooling of activity or whether they will continue to tighten, potentially curtailing activity too far pushing the economy into a deeper recession. The market is now, however, starting to discount more of the latter, taking their cue from the rapidly deteriorating business surveys, and has therefore weakened recently. This has left European equities and smaller companies, in particular, looking good value. While a deteriorating economy certainly is not good news, central banks now have the tools to respond to this, and were they to pivot away from raising rates, the market would be able to look favourably towards recovery. In that environment smaller companies will thrive. In the meantime, we will look for opportunities in stock selection to harness the recovery when it comes.

Sam Cosh

Lead Investment Manager

Columbia Threadneedle Investment Business Limited

Forward -looking statements

This interim report may contain forward-looking statements with respect to the financial condition, results of operations and business of the Company. Such statements involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially from those expressed or implied by forward-looking statements. The forward-looking statements are based on the Board's' current view and on information known to them at the date of this report. Nothing should be construed as a profit forecast.

Directors' Statement of Principal Risks and Uncertainties

Most of the Company's principal risks and uncertainties are market related and no different from those of other investment trusts investing in listed equities. They are described in more detail under the heading "Principal Risks and Changes in the Year" within the Strategic Report in the Company's Report and Accounts for the year ended 31 December 2022.

The principal risks identified in the Report and Accounts for the year ended 31 December 2022 were:

·    Poor absolute and/or relative performance;

·    Relevance/attractiveness of the investment strategy and policy;

·    Failure of the manager, execution risk arising from the acquisition of BMO GAM EMEA or the loss of key investment management staff;

·    Regulatory and compliance failure (including ESG reporting);

·    Service provider failure;

·    The sustainability of the Company's dividend policy; and

·    Geopolitical issues and their impact.

At present the global economy continues to suffer considerable disruption due to inflationary pressures, the war in Ukraine and the after-effects of the COVID-19 pandemic. The Directors continue to review the key risk register for the Company which identifies the risks that the Company is exposed to, the controls in place and the actions being taken to mitigate them.

It is also noted that:

·    An analysis of the performance of the Company since 1 January 2023 is included within the Chairman's Statement and the Investment Manager's Review above.

·    The Company has a €45 million multi-currency loan facility with The Bank of Nova Scotia (London branch). As at 30 June 2023 €20.0 million was drawn down.

·    Note 4 below details the Board's consideration for the continued applicability of the principle of Going Concern when preparing this report.

On behalf of the Board

Jack Perry CBE

Chairman

2 August 2023

Directors' Statement of Responsibilities in Respect of the Half-Yearly Financial Report

In accordance with Chapter 4 of the Disclosure and Transparency Rules the Directors confirm, that to the best of their knowledge:

·          the condensed set of financial statements has been prepared in accordance with applicable UK-adopted International Accounting Standards on a going concern basis, and gives a true and fair view of the assets, liabilities, financial position and net return of the Company;

·          the Chairman's Statement, Investment Manager's Review and the Directors' Statement of Principal Risks and Uncertainties include a fair review of the information required by the Disclosure Guidance and Transparency Rule ('DTR') 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year and their impact on the financial statements;

·          the Directors' Statement of Principal Risks and Uncertainties shown above is a fair review of the principal risks and uncertainties for the remainder of the financial year; and

·          the half-yearly report includes a fair review of the information required by DTR 4.2.8R, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during the period, and any changes in the related party transactions described in the last Annual Report that could do so.

On behalf of the Board

Jack Perry CBE

Chairman

2 August 2023

Condensed Statement of Comprehensive Income

The total column of this statement represents the Company's Income Statement and Statement of Comprehensive Income, prepared in accordance with UK-adopted International Accounting Standards. The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies.

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

Condensed Statement of Changes in Equity

Condensed Statement of Financial Position

Condensed Statement of Cash Flows

Notes

1      Basis of preparation

These condensed financial statements, which are unaudited, have been prepared on a going concern basis in accordance with the Companies Act 2006, UK-adopted International Accounting Standards and the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by the AIC.

All of the Company's operations are of a continuing nature. The functional currency of the Company is the euro and presentational currency is the pound sterling as the Board believe this will provide clarity of the Company's financial statements for its Shareholders, the overwhelming majority of whom are located in the United Kingdom.

All transactions during the period are translated on the date of execution and the Statement of Financial Position as at the period end date.

The accounting policies applied in the condensed set of financial statements are set out in the Company's annual report for the year ended 31 December 2022.

2      Earnings per share

Earnings per ordinary share attributable to Shareholders reflects the overall performance of the Company in the period.  Net revenue recognised in the first six months is not necessarily indicative of the total likely to be received in the full accounting year.

3      Dividend

The fourth interim dividend of 1.45p per share in respect of the year ending 31 December 2023 will be paid on 31 October 2023 to eligible Shareholders on the register. The total cost of this dividend based on 360,069,279 shares in issue is £5,221,000.

4      Going concern

In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. They have also considered the Company's objective, high distribution policy, the current cash position of the Company, the availability of the loan facility and compliance with its covenants and the operational resilience of the Company and its service providers.

At present the global economy continues to suffer disruption due to inflationary pressures, the war in Ukraine and the after-effects of the COVID-19 pandemic and the Directors have given careful consideration to the consequences for this Company.

The Company has a number of banking covenants and at present the Company's financial position does not suggest that any of these are close to being breached. The primary risk is that there is a further significant decrease in the Net Asset Value of the Company in the short to medium term.

As at 1 August 2023, the latest practicable date before the publication of this report, borrowings amounted to €20 million. This is compared to a net asset value of €415.4 million. In accordance with its investment policy the Company is invested mainly in readily realisable listed securities. These can be realised if necessary, to repay the loan facility and fund the cash requirements for future dividend payments.

The Company operates within a robust regulatory environment. The Company retains title to all assets held by the Custodian. Cash is held with banks approved and regularly reviewed by the Manager and the Board.

The Company's annual dividend, which is declared in sterling, is determined by reference to the prior year-end Net Asset Value. The Company manages any sterling/euro exchange rate exposure which may arise from the declaration of a sterling denominated dividend by entering into specific matched forward currency hedging contracts. As at 30 June 2023 the Company had a Distributable Reserve of £288.9 million.

Based on this information the Directors believe that the Company has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of these financial statements. Accordingly, these financial statements have been prepared on a going concern basis.

5      Results

The results for the half-year ended 30 June 2023 and 30 June 2022, which are unaudited, constitute non-statutory accounts within the meaning of Section 434 of the Companies Act 2006. The latest published accounts which have been delivered to the Registrar of Companies are for the year ended 31 December 2022; the report of the independent auditors thereon was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The condensed financial statements shown above for the year ended 31 December 2022 are an extract from those accounts.

6      Half-yearly report and accounts

The Company's report and accounts will be available shortly on the internet at www.europeanassets.co.uk.  Printed copies may be obtained by writing to the Company Secretary at European Assets Trust Plc, Cannon Place, 78 Cannon Street, London, EC4N 6AG.

By order of the Board

Columbia Threadneedle Investment Business Limited, Secretary

Cannon Place,

78 Cannon Street,

London EC4N 6AG

2 August 2023