Doc re. First dividend, div rebasing, Mgt fee

RNS Number : 1556Q

Henderson Diversified Income TstPLC

07 September 2017

 

HENDERSON INVESTMENT FUNDS LIMITED

HENDERSON DIVERSIFIED INCOME TRUST PLC

LEGAL ENTITY IDENTIFIER: 213800RV2228EO1JEN02

7 September 2017

HENDERSON DIVERSIFIED INCOME TRUST PLC

Payment of first interim dividend,

dividend rebasing and amendments to fee arrangements

Payment of first interim dividend

Henderson Diversified Income Trust plc (the "Company") declares a first interim dividend of 1.25p per ordinary share, in respect of the period ending 30 April 2018, payable on 29 September 2017 to shareholders registered at the close of business on 15 September 2017.  The Company's shares will go ex-dividend on 14 September 2017. This dividend is to be paid as an interest distribution for UK tax purposes from the Company's revenue account (1.00p) and its capital account (0.25p).

Dividend rebasing

Whilst the 1.25p per ordinary share quarterly dividend is well covered by the combination of income and capital earned in the period, it is the considered view of the Board and Henderson Investment Funds Limited (the "Manager") that the ongoing downward pressure on bond and loan yields is unlikely to reverse, making the prevailing level of dividend difficult to sustain without investing in imprudently risky positions. This is exacerbated by both the revenue impact of purchasing a greater proportion of assets at a premium to par value and the change in accounting policy where half of any performance fee payable is charged to the revenue account.

Consequently, the Board announces changes to the Company's management fee arrangements and its intention to rebase the dividend to no less than 1.1p per ordinary share on a quarterly basis, effective from the dividend payable in December 2017; this represents a reduction of 12% and assumes that there is not a further significant fall in market yields. The shares will therefore provide a yield of 4.7% (based on the share price as at 6 September 2017).  This dividend target takes into account the revenue benefits to the Company of the revised fee arrangements described below and the cost reductions arising from the re-domicile of the Company into the UK.

Amendment to fee arrangements

The Board and the Manager have undertaken a formal review of the management fee arrangements and have mutually concluded that a performance fee is no longer appropriate in such a low yielding environment. Accordingly, the following package of amendments have been agreed to take effect from 1 November 2017:

1.   The performance fee will be removed. The current 18 month performance period to 30 April 2018 will be truncated at 31 October 2017, the performance fee for this period will be calculated and any performance fee payable will be paid.

2.   The base management fee will rise from 0.60 per cent. to 0.65 per cent. per annum of the Company's net assets. Net assets amounted to £174m million as at 31 August 2017.

The cap on total fees payable, previously 1.2 per cent. per annum of net assets, will therefore effectively reduce to 0.65 per cent. per annum, the level of the revised management fee.

The Company's longer term performance remains compelling and above its benchmark, as illustrated in the chart on the Company's factsheet which is available at www.hendersondiversifiedincome.com 

For further information please contact:

Angus Macpherson

Chairman

Henderson Diversified Income Trust plc
Telephone: [phone]

James de Sausmarez
Director and Head of Investment Trusts
Janus Henderson Investors
Telephone: [phone]

 

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