Half Yearly Report

RNS Number : 8184T

Henderson Diversified Income Ltd

12 June 2009

 

Page 1 of 8

12 June 2009

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Interim Management Report

Extracts from the Chairman's Statement

The six months under review has seen a continuation of the worst financial crisis in the credit markets since 1929. Towards the end of the period, the significant intervention of governments through the central banks stabilised markets somewhat and a recovery has started albeit lagging the recovery in the equity markets. The reduction in interest rates has had a significant effect on the absolute level of our income and therefore your dividends although we shall continue to aim to beat our income target of LIBOR (London Interbank Offered Rate) plus 1.25%. The priority for our managers going forward is to repair the capital while maintaining as attractive a yield as possible.  

Performance

The net asset value per ordinary share fell to 52.43p at the period end, down from 60.62p six months earlier. The discount on your company's shares has narrowed significantly and at 30 April the company's shares were trading at 52.25p. Income earnings per share were 3.09p compared to 4.32p for the equivalent period last year reflecting the fall in the level of LIBOR.

Dividends and Dividend Policy

In the period from launch to 31 October 2008 the company paid four dividends totalling 7.65p and on 31 December 2008 a fifth interim of 2.00p per share for that period was paid making a total for that period of 9.65p per share. In this financial year, your Board has declared a first interim dividend of 1.75p per share, which was paid on 31 March 2009, and a second interim of 1.25p per share, which will be paid on 30 June 2009. 

Material Events or Transactions during the Period

Over the six months under review, the allocation to secured loans in the portfolio has been reduced from 69% to 57% with consequent increases in holdings of investment grade bonds and high yield bonds. Gearing has remained unchanged at around 15%. 

Related Party Transactions

There have been no material transactions with our related parties during the six month period under review.

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  Page 2 of 8

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Interim Management Report (continued)

Extracts from the Chairman's Statement (continued)

Outlook (including principal risks and uncertainties) for the six months to 31 October 2009

Whilst there is evidence of a recovery in fixed interest markets, this may take some time to fully materialise. The outlook for government bonds remains poor in the medium term given extra government supply. However, increased stabilisation in the market will help capital values to rise and we remain convinced that the market is pricing in an unrealistically high level of defaults. 

Paul Manduca

Chairman

12 June 2009

Directors' Responsibility Statement

The Directors confirm that, to the best of their knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34;

• the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

• the Interim Management Report includes a fair review of the information required by the Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

For and on behalf of the Board

Paul Manduca

Chairman

12 June 2009

Summary of Portfolio

	%
Secured Loans	57
Investment Grade Bonds	29
High Yield Bonds	14
	--------
	100

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Page 3 of 8

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Consolidated Income Statement

      for the half year ended 30 April 2009

	(Unaudited) Half year ended 30 April 2009			(Unaudited) Half year ended 30 April 2008			(Audited) Period 5 June 2007  to 31 October 2008
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Losses on investments held at fair value through profit or loss	-	(1,468)	(1,468)	-	(1,094)	(1,094)	-	(22,083)	(22,083)
Losses on foreign exchange transactions	-	(4,688)	(4,688)	-	(3,720)	(3,720)	-	(6,091)	(6,091)
Investment income	3,005	-	3,005	1,758	-	1,758	5,027	-	5,027
Other income	24 ______	- _______	24 ______	355 _______	- _______	355 ______	1,252 _______	- _______	1,252 _______
Total income	3,029 _______	(6,156) _______	(3,127) ______	2,113 _______	(4,814) _______	(2,701) ______	6,279 _______	(28,174) _______	(21,895) _______
Expenses
Management fees	(88)	(89)	(177)	(73)	(73)	(146)	(236)	(236)	(472)
Other expenses	(290) _______	- _______	(290) ______	(250) _______	- _______	(250) ______	(652) _______	- _______	(652) _______
Profit/(loss) before finance costs and taxation	2,651	(6,245)	(3,594)	1,790	(4,887)	(3,097)	5,391	(28,410)	(23,019)
Finance costs	(56) _______	(56) _______	(112) ______	(35) _______	(35) _______	(70) ______	(117) _______	(117) _______	(234) _______
Profit/(loss) before taxation	2,595	(6,301)	(3,706)	1,755	(4,922)	(3,167)	5,274	(28,527)	(23,253)
Taxation	(7) _______	- _______	(7) ______	(7) _______	- _______	(7) ______	(26) _______	- _______	(26) _______
Profit/(loss) for the period	2,588 _______	(6,301) _______	(3,713) ______	1,748 _______	(4,922) _______	(3,174) ______	5,248 _______	(28,527) _______	(23,279) _______
Basic and diluted earnings/(loss) per ordinary share (note 3)	3.09p _______	(7.53)p _______	(4.44)p ______	4.32p _______	(12.16)p _______	(7.84)p ______	9.59p _______	(52.15)p _______	(42.56)p _______

The total column of this statement represents the Consolidated Income Statement of the Group, prepared in accordance with IFRS. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of Henderson Diversified Income Limited. There are no minority interests.

The notes on pages 7 and 8 form an integral part of this condensed interim financial information.

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  Page 4 of 8

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Consolidated Statement of Changes in Equity

for the half year ended 30 April 2009

	(Unaudited) Half year ended 30 April 2009
	Stated capital	Distributable reserves	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 31 October 2008	37,677	39,832	(28,527)	1,718	50,700
Net (loss)/profit from ordinary activities after taxation	-	-	(6,301)	2,588	(3,713)
Dividends paid  (note 5)	-	-	-	(3,137)	(3,137)
	----------	----------	----------	----------	----------
At 30 April 2009	37,677	39,832	(34,828)	1,169	43,850
	======	======	======	======	======

	(Unaudited) Half year ended 30 April 2008
	Stated capital	Distributable reserves	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 31 October 2007	-	39,832	122	632	40,586
Net (loss)/profit from ordinary activities after taxation	-	-	(4,922)	1,748	(3,174)
Dividends paid (note 5)	-	-	-	(1,316)	(1,316)
	----------	----------	----------	----------	----------
At 30 April 2008	-	39,832	(4,800)	1,064	36,096
	======	======	======	======	======

	(Audited) Period 5 June 2007 to 31 October 2008
	Stated capital	Distributable reserves	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000
Opening balance	-	-	-	-	-
Issue of shares	78,917	-	-	-	78,917
Share issue costs	(1,408)	-	-	-	(1,408)
Transfer to distributable reserves	(39,832)	39,832	-	-	-
Net (loss)/profit from ordinary activities after tax	-	-	(28,527)	5,248	(23,279)
Dividends paid	-	-	-	(3,530)	(3,530)
	----------	----------	----------	----------	----------
At 31 October 2008	37,677	39,832	(28,527)	1,718	50,700
	======	======	======	======	======

The notes on pages 7 and 8 form an integral part of this condensed interim financial information.

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  Page 5 of 8

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Consolidated Balance Sheet

at 30 April 2009

	(Unaudited) 30 April	(Unaudited) 30 April	(Audited) 31 October
	2009	2008	2008
	£'000	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss	48,911	42,438	58,305
	---------	----------	---------
Current assets
Other receivables	1,991	1,052	4,097
Cash and cash equivalents	201	1,444	947
	---------	-----------	-----------
	2,192	2,496	5,044
	---------	-----------	-----------
Total assets	51,103	44,934	63,349
	---------	-----------	-----------
Current liabilities
Other payables	(7,253)	(8,838)	(12,649)
	---------	-----------	-----------
Net assets	43,850	36,096	50,700
	======	======	======
Capital and reserves
Stated capital	37,677	-	37,677
Distributable reserve	39,832	39,832	39,832
Retained earnings:
Capital reserves	(34,828)	(4,800)	(28,527)
Revenue reserve	1,169	1,064	1,718
	---------	-----------	-----------
Total equity	43,850	36,096	50,700
	======	======	======
Net asset value per ordinary share  (note 4)	52.4p	89.1p	60.6p
	======	======	======

The notes on pages 7 and 8 form an integral part of this condensed interim financial information.

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  Page 6 of 8

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Consolidated Cash Flow Statement

for the half year ended 30 April 2009

	(Unaudited) Half year  ended  30 April  2009	(Unaudited) Half year  ended  30 April  2008	(Audited) Period 5 June 2007 to 31 October 2008
	£'000	£'000	£'000
Net loss before taxation	(3,706)	(3,167)	(23,253)
Add back interest paid	112	70	234
Add: losses on investments held at fair value  through profit or loss	6,156	4,814	28,174
Less: exchange movements on forward exchange  contracts taken to revenue	-	(163)	(435)
Increase in prepayments and accrued income	(125)	(208)	(1,092)
Decrease/(increase) in other receivables	174	(194)	(144)
(Decrease)/increase in other payables	(122)	(22)	455
Net sales/(purchases) of investments	8,093	(5,821)	(80,699)
Decrease/(increase) in sales settlement debtor	1,707	(23)	(2,285)
(Decrease)/increase in purchase settlement creditor	(2,665)	(15,005)	2,665
	---------	---------	---------
Net cash inflow/(outflow) from operating activities before finance costs	9,624	(19,719)	(76,380)
Interest paid	(112)	(62)	(234)
Taxation on investment income	(4)	-	(50)
	---------	---------	---------
Net cash inflow/(outflow) from operating activities	9,508	(19,781)	(76,664)
	---------	---------	---------
Financing activities
Equity dividends paid	(3,137)	(1,316)	(3,530)
Issue of ordinary shares	-	-	78,917
Issue expenses paid	-	-	(1,408)
(Repayment)/drawdown of loan	(1,061)	6,042	7,810
	---------	---------	---------
Net cash (outflow)/inflow from financing	(4,198)	4,726	81,789
	---------	---------	---------
Increase/(decrease) in cash and cash equivalents	5,310	(15,055)	5,125
Exchange movements	(6,056)	(2,469)	(4,178)
	---------	---------	---------
Movement in cash and cash equivalents during the period	(746)	(17,524)	947
Cash and cash equivalents at the start of the period	947	18,968	-
	---------	---------	---------
Cash and cash equivalents at the end of the period	201	1,444	947
	======	======	======

The notes on pages 7 and 8 form an integral part of this condensed interim financial information.

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Page 7 of 8

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Notes to the Consolidated Interim Financial Information:

1.	General Information
	The entity is a closed-ended company, registered as a no par value company under the Companies (Jersey) Law 1991, with its shares listed on the London Stock Exchange.  The Company was incorporated on 5 June 2007.
2.	Accounting Policies: Basis of Preparation
	This condensed interim financial information has been prepared using the same accounting policies as set out in the Company's Financial Statements for the period ended 31 October 2008 and in accordance with International Accounting Standards (IAS) 34 'Interim Financial Reporting'. The consolidated financial information comprises the financial information of Henderson Diversified Income Limited ('the Company') and its subsidiary undertaking Henderson Diversified Income (Luxembourg) S.à.r.l. ('the Group').
	The condensed interim financial information has not been audited or reviewed by the Company's auditors.

3.	Earnings per ordinary share
	The earnings per ordinary share is based on the net loss for the period after taxation of £3,713,000 (half year ended 30 April 2008: £3,174,000; period 5 June 2007 to 31 October 2008: £23,279,000) and on 83,640,877 (40,500,000: half year ended 30 April 2008; 54,697,104: period 5 June 2007 to 31 October 2008) ordinary shares, being the weighted average number of ordinary shares in issue during each of the periods.
	The earnings per ordinary share detailed above can be further analysed between revenue and capital, as below:

		(Unaudited)	(Unaudited)	(Audited)
		Half year ended  30 April 2009	Half year  ended   30 April 2008	Period  5 June 2007 to 31 October 2008
		£'000	£'000	£'000
	Net revenue gain	2,588	1,748	5,248
	Net capital loss	(6,301)	(4,922)	(28,527)
		---------	---------	---------
	Net total loss	(3,713)	(3,174)	(23,279)
		=====	=====	=====
	Weighted average number of ordinary shares  in issue during the period	83,640,877	40,500,000	54,697,104
		Pence	Pence	Pence
	Revenue earnings per ordinary share	3.09	4.32	9.59
	Capital loss per ordinary share	(7.53)	(12.16)	(52.15)
		---------	---------	---------
	Total loss per ordinary share	(4.44)	(7.84)	(42.56)
		=====	=====	=====

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Page 8 of 8

HENDERSON DIVERSIFIED INCOME LIMITED

Unaudited Results for the half year ended 30 April 2009

Notes to the Consolidated Interim Financial Information:

4.	Net Asset Value per ordinary share
	The basic net asset value per ordinary share is based on a net asset value of £43,850,000 (30 April 2008: £36,096,000; 31 October 2008: £50,700,000) and on 83,640,877 (30 April 2008: 40,500,000; 31 October 2008: 83,640,877) ordinary shares, being the number of ordinary shares in issue at each period end.
5.	Dividends paid
	The fifth interim dividend of 2.00p per share in respect of the period 5 June 2007 to 31 October 2008 was paid on 31 December 2008.  A first interim dividend of 1.75p per share was paid on 31 March 2009. The second interim dividend of 1.25p per share was declared on 29 May 2009 and will be paid on 30 June 2009 to shareholders on the register on 12 June 2009. The shares were quoted ex-dividend on 10 June 2009. The cost of the dividend will be £1,046,000 based on the number of shares in issue at the ex-dividend date.
6.	Half Year Report
	The Half year report will be posted to shareholders on 22 June 2009 and copies will be available on the Company's website (www.hendersondiversifiedincome.com) or in hard copy format from the Company's registered office, BNP House, Anley Street, St Helier, Jersey, JE2 3QE

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For further information please contact:

John Pattullo and Jenna Barnard, Portfolio Managers, Henderson Global Investors

Telephone: [phone]

James de Sausmarez

Head of Investment Trusts, Henderson Global Investors

Telephone: [phone]

Sarah Gibbons-Cook

Investor Relations and PR Manager, Henderson Global Investors

Telephone: [phone]

Jeremy Hamon

Company Secretary, BNP Paribas Securities Services Fund Administration Limited

Telephone: [phone]

 

END

 

 

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