Final Results

Henderson Eurotrust PLC 20 September 2006 Page 1 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 Financial Highlights (Restated*) 31 July 2006 31 July 2005 Change pence pence % Net Asset Value ordinary share 473.91 399.58 +18.6 Earnings ordinary share 5.67 4.34 +30.6 Dividends ordinary dividend 5.50 5.00 +10.0 * (see note 4) Extracts from the Chairman's Statement: It has once again been a good year for both markets and Henderson EuroTrust, albeit with returns slightly less than during the previous year. The Company has produced a total return of 19.8%, ahead of our benchmark index (the FTSE World Europe excluding the UK) which increased by 16.4%. Revenue and dividend Gross revenue for the year amounted to £2,436,000 (2005: £1,967,000). Net revenue on ordinary activities after tax and administrative expenses reached £1,455,000 (2005: £1,114,000), producing an increase in earnings of 30.6% to 5.67 pence per share (2005: 4.34p). Other expenses fell to £186,000 from £218,000 the previous year. These can be controlled to some extent, whereas the management fee is a direct percentage levy on the assets of the Company. Interest expenses have risen, due to the fact that at times the Company has had gearing of up to about 5% of assets, but this has been more than offset by revenue from stock lending. The Board will recommend an increase in the final dividend to 3.50p making a total dividend for the year of 5.50p (2005: 5.00p). Our manager has earned a performance fee again this year, but at a lower level than the previous year. The Investment Trust Sector We remain naturally strong advocates of the corporate structure of investment trusts. The ability to gear, the role of an independent Board of Directors as monitor of the actions of the managers, and the lower cost structure all make Henderson EuroTrust a better vehicle for investors to access the excitement and opportunities of Continental Europe even before the performance analysis which shows we have also produced better returns than many open- ended investment companies. We have an outstanding track record of performance in an investment trust sector which is both small and has declined over the last few years even as equity markets in Continental Europe have expanded dramatically in size and depth. The straightforward fact that the securities industry is set up to remunerate the sale of open-ended Page 2 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 vehicles, whilst no such incentive exists for investment trusts explains in large part why the sector as a whole has not grown as it might. However, it remains a mystery as to why the European sector in particular remains so small when the markets targeted have grown significantly. The Company will honour its undertaking to shareholders to allow an exit at net asset value less costs at some stage in 2007, but we would hope to be able to expand the size of the Company at the same time, if markets permit. We have done a good job for the last few years, and are quite happy to do the same for a larger shareholder base in the future. Prospects The year ahead could bring lower economic growth in the US and perhaps Europe. It is possible therefore that earnings growth could be lower also than has been the case for the last few years, and while this in itself should not be incompatible with further progress in equity markets, it may mean returns will be lower. However, our manager remains alert to the need to constantly monitor growth prospects across numerous industries, sectors and regions, and this should stand us in good stead for more uncertain markets. The opportunities and pace of change in Europe remain as interesting as ever, providing a range of growth stocks where valuations remain reasonable. For further information please contact: Tim Stevenson Henderson EuroTrust plc Telephone: 020 7818 4342 James de Sausmarez Head of Investment Trusts, Henderson Global Investors Telephone: 020 7818 3349 Sarah Gibbons-Cook Investor Relations and PR Manager, Henderson Global Investors Telephone: 020 7818 3198 - MORE - Page 3 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 Income Statement for the year ended 31 July 2006 (Restated*) Unaudited Audited Year ended 31 July 2006 Year ended 31 July 2005 Revenue Capital Revenue Capital Return Return Total Return Return Total £'000 £'000 £'000 £'000 £'000 £'000 Gains from investments held at fair value through profit or loss - 20,119 20,119 - 28,271 28,271 Income from investments held at fair value through profit or loss 2,339 - 2,339 1,914 - 1,914 Other interest receivable and similar 97 - 97 53 - 53 income ---------- ---------- ---------- ---------- ---------- ---------- Gross revenue and capital gains 2,436 20,119 22,555 1,967 28,271 30,238 Management and performance fees (197) (1,523) (1,720) (148) (1,393) (1,541) Other administrative expenses (186) - (186) (218) - (218) ---------- ---------- ---------- ---------- ---------- ---------- Net return on ordinary activities before finance charges and taxation 2,053 18,596 20,649 1,601 26,878 28,479 Finance charges (4) (17) (21) (1) (4) (5) ---------- ---------- ---------- ---------- ---------- ---------- Net return on ordinary activities before taxation 2,049 18,579 20,628 1,600 26,874 28,474 Taxation on net return on ordinary (594) 328 (266) (486) 250 (236) activities Net return on ordinary activities ---------- ---------- ------------ ---------- ---------- ------------ after taxation 1,455 18,907 20,362 1,114 27,124 28,238 ====== ====== ====== ====== ====== ====== Return per ordinary share (see note 2) 5.67p 73.66p 79.33p 4.34p 105.67p 110.01p ===== ===== ===== ===== ====== ====== The total column of this statement represents the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. * (see note 4) - MORE - Page 4 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 Reconciliation of Movements in Shareholders' Funds for the years ended 31 July 2006 and 31 July 2005 Share Other Share premium capital Revenue capital account reserves reserve Total Year ended 31 July 2006 £'000 £'000 £'000 £'000 £'000 At 31 July 2005 (as restated - see note 4) 1,283 33,814 66,037 1,425 102,559 Net return from ordinary activities - - 18,907 1,455 20,362 Final dividend paid in respect of year ended 31 July 2005 (paid 10 November 2005) - - - (770) (770) Interim dividend paid in respect of year ended 31 July 2006 (paid 12 April 2006) - - - (513) (513) -------- ---------- ---------- ---------- ----------- At 31 July 2006 1,283 33,814 84,944 1,597 121,638 ===== ====== ====== ====== ====== Share Other Share premium capital Revenue capital account reserves reserve Total Year ended 31 July 2005 £'000 £'000 £'000 £'000 £'000 At 31 July 2004 (as restated - see note 4) 1,283 33,814 38,913 1,209 75,219 Net return from ordinary activities - - 27,124 1,114 28,238 Final dividend paid in respect of year ended 31 July 2004 (paid 12 November 2004) - - - (385) (385) Interim dividend paid in respect of year ended 31 July 2005 (paid 12 April 2005) - - - (513) (513) --------- ---------- ----------- ---------- ---------- At 31 July 2005 1,283 33,814 66,037 1,425 102,559 ===== ====== ====== ====== ====== - MORE - Page 5 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 Balance Sheet at 31 July 2006 (Restated*) 2006 2005 £'000 £'000 Fixed asset investments held at fair value through profit or loss Listed at market value - overseas 118,130 102,591 ------------ ------------ Current assets Debtors 1,264 180 Cash at bank and short term deposits 3,125 3,826 ----------- ----------- 4,389 4,006 Creditors: amounts falling due within one year (881) (4,038) ------------ ------------ Net current assets/(liabilities) 3,508 (32) ------------ ------------ Total net assets 121,638 102,559 ======= ======= Capital and reserves Called-up share capital 1,283 1,283 Share premium account 33,814 33,814 Capital reserves - realised 56,261 42,612 Capital reserves - unrealised 28,683 23,425 Revenue reserve 1,597 1,425 ------------ ------------ Equity shareholders' funds 121,638 102,559 ======= ======= Net asset value per ordinary share (see note 3) 473.91p 399.58p ======= ======= * (see note 4) - MORE - Page 6 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 Cash Flow Statement for the year ended 31 July 2006 2006 2006 2005 2005 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 67 269 Servicing of finance Interest paid (21) (5) --------- ------------ Net cash outflow from servicing of finance (21) (5) Taxation Overseas tax recovered 155 92 --------- ------------ Net tax recovered 155 92 Financial investment Purchase of investments (80,150) (67,306) Sales of investments 80,486 66,628 ---------- ------------ Net cash inflow/(outflow) from financial investment 336 (678) Equity dividends paid (1,283) (898) ------------ ------------- Decrease in cash (746) (1,220) ======= ======= Reconciliation of net cash flow to movement in net funds Decrease in cash as above (746) (1,220) Exchange movements 45 197 ----------- ------------ Change in net funds resulting from cash flows (701) (1,023) Net funds at 1 August 3,826 4,849 ----------- ----------- Net funds at 31 July 3,125 3,826 ======= ======= - MORE - Page 7 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 Notes : 1. Changes in presentation The Company has adopted the provisions of the revised SORP, which has resulted in some changes to the presentation of the Company's accounts. The Statement of Total Return is now called the Income Statement. Dividends payable to equity shareholders are no longer reflected in the Income Statement, although they continue to be shown in the Reconciliation of Movements in Shareholders' Funds, which is now presented as a primary statement. The same accounting policies used for the year ended 31 July 2005 have been applied with the following exceptions: (i) Investments - Prior to 1 August 2005, listed investments were valued at mid-market prices. Following the introduction of FRS 26 - Financial Instruments: Recognition and Measurement, listed investments are now valued at fair value deemed to be bid-market prices. Unlisted investments are fair valued by the Board on the basis of the latest accounting and other relevant information. The effect of this change is to decrease the value of listed investments at 31 July 2006 by £95,000 and to reduce the net return on ordinary activities after taxation for the period by £42,000. The comparative figures have been restated and the impact of this change in policy on valuation is taken through the Income Statement. The accounts for the year ended 31 July 2005 have been restated as per note 4 below. (ii) In accordance with FRS 21 - Events after the balance sheet date, dividends payable are not accrued in the accounts unless they have been approved before the balance sheet date. Dividends are therefore recognised in the period in which they are declared and paid. As a result of this change, the accounts for the year ended 31 July 2005 have been restated as per note 4 below. 2. Return per ordinary share Revenue return per ordinary share is based on earnings attributable to the ordinary shares of £1,455,000 (2005: £1,114,000) and on the number of ordinary shares in issue throughout the year being 25,667,005 (2005: 25,667,005). Capital return per ordinary share is based on the net capital gains of £18,907,000 (2005: £27,124,000 as adjusted (see note 4)), and on the same number of ordinary shares in issue as above. 3. Net asset value per ordinary share The net asset value per ordinary share is based on the net assets attributable to ordinary shares of £121,638,000 (2005: £102,559,000 as adjusted (see note 4)) and on 25,667,005 (2005: 25,667,005) ordinary shares in issue at the year end. - MORE - Page 8 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 4. Restatement in respect of changes to accounting policies for valuing investments and accounting for dividends payable (a) Income Statement Per share Year ended 31 July 2005 £'000 pence Total transfer to reserve per Statement of Total 26,885 104.74 Return Add back dividends paid and proposed 1,283 5.00 ----------- ------------ Net return on ordinary activities after taxation 28,168 109.74 Change from mid to bid basis at 31 July 2004 123 0.48 Change from mid to bid basis at 31 July 2005 (53) (0.21) ----------- ------------ Net return on ordinary activities after taxation as restated 28,238 110.01 ======= ======= (b) Balance Sheet Previously reported (Restated) 31 July 2005 31 July 2005 £'000 Adjustments £'000 (i) Balance sheet as at 31 July 2005 Note £'000 Fixed asset investments 1 102,644 (53) 102,591 Current assets 4,006 - 4,006 Creditors: amounts falling due within one year 2 (4,808) 770 (4,038) ----------- ------------ ----------- Net current liabilities (802) 770 (32) ----------- ----------- ----------- Total net assets 101,842 717 102,559 ====== ====== ====== Capital and reserves Called-up share capital 1,283 - 1,283 Share premium 33,814 - 33,814 Realised reserves 42,612 - 42,612 Unrealised reserves 1 23,478 (53) 23,425 Revenue reserves 2 655 770 1,425 ----------- ------------ ----------- Equity shareholders' funds 101,842 717 102,559 ====== ======= ====== - MORE - Page 9 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 (b) Balance Sheet continued.../ Previously reported (Restated) 31 July 2004 31 July 2004 £'000 Adjustments £'000 (ii) Balance sheet as at 31 July 2004 Note £'000 Fixed asset investments 1 72,898 (123) 72,775 Current assets 5,347 - 5,347 Creditors: amounts falling due within one year 2 (3,288) 385 (2,903) ----------- ------------ ----------- Net current liabilities 2,059 385 2,444 ----------- ----------- ----------- Total net assets 74,957 262 75,219 ====== ====== ====== Capital and reserves Called-up share capital 1,283 - 1,283 Share premium 33,814 - 33,814 Realised reserves 32,340 - 32,340 Unrealised reserves 1 6,696 (123) 6,573 Revenue reserves 2 824 385 1,209 ----------- ------------ ----------- Equity shareholders' funds 74,957 262 75,219 ====== ====== ====== Notes to the Reconciliation 1. Prior to 1 August 2005, listed investments were valued at middle market prices. Following the adoption of FRS 26, listed investments have been designated as held at fair value through profit or loss and are valued at fair value deemed to be bid market prices. The adoption of bid market prices at 31 July 2005 decreased the value of listed investments by £53,000 (31 July 2004: £123,000). 2. Under FRS 21 dividends should not be accrued in the accounts unless they have been approved by shareholders before the Balance Sheet date. Dividends payable to equity shareholders are recognised in the Reconciliation of Movements in Shareholders' Funds when they have been approved by shareholders and become a liability of the Company. The effect of this change is to increase net assets at 31 July 2005 by £770,000 (31 July 2004: £385,000). 5. 2005 Accounts The figures and financial information for the year ended 31 July 2005 are extracted from the latest published accounts, as restated, and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under Section 237(2) or Section 237(3) of the Companies Act 1985. 6. 2006 Accounts The preliminary figures for the year ended 31 July 2006 which do not constitute statutory accounts are an extract from the draft accounts of the Company for the year. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. Page 10 of 10 HENDERSON EUROTRUST PLC Preliminary Unaudited Results for the Year Ended 31 July 2006 7. Dividend The recommended final dividend of 3.50p per ordinary share, if approved, will be paid on 10 November 2006 to holders of ordinary shares on the register of members at close of business on 6 October 2006. The Company's shares will be quoted ex-dividend on 4 October 2006. 8. Annual General Meeting Copies of the Annual Report will be posted to shareholders in late September 2006 in time for the Annual General Meeting on 8 November 2006 and will be available from the Secretary at 4 Broadgate, London EC2M 2DA thereafter. - ENDS - This information is provided by RNS The company news service from the London Stock Exchange

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