Interim Management Statement

RNS Number : 0323E

Henderson Eurotrust PLC

24 May 2012

 



HENDERSON EUROTRUST PLC

HENDERSON GLOBAL INVESTORS

24 May 2012

HENDERSON EUROTRUST PLC

Interim Management Statement

Review of the period from 1 February 2012 to 30 April 2012

The Directors of Henderson EuroTrust plc hereby announce the following:

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Comments from our Portfolio Manager:

During the three months to 30 April 2012 the Company's net asset value total return increased by 1.83% whilst the Company's benchmark, the FTSE World Europe (ex UK) Index fell by 0.44%.  

The conflicting forces of good companies' performance versus frankly bad political and economic movements have continued to vie with each other for dominance. The result of years of this conflict has been a global distrust of European markets, leaving those markets at attractive valuation levels. This continues to act as a good support, but for real progress to be made, political and economic advances need to be achieved.

That latter point looks difficult in the very short term. The results of the French elections clearly show that the extent of disillusionment with "austerity" has reached fever pitch. The emphasis has to shift to growth, and if anything recent events will force the agenda in that direction. More difficult to predict will be quite how growth can be created from high unemployment and the requirement to keep government spending under control. My suspicion is that the ECB will continue to play its part by keeping monetary policy very relaxed (there could be another cut in interest rates), while politicians agree to extend fiscal discipline deadlines. It will be a difficult course to steer and bond markets may not like it. Equity markets by contrast may be relieved.

In the three months to 30 April 2012 we made a few small portfolio changes - with seven new positions and seven total sales. The sales have included two misplaced forays into potential recovery stocks - Vivendi and Nokia. Both have been sold as it is now our opinion that these businesses have very deep seated problems, and we do not need to hang around to see if they will survive or not - there are plenty of better opportunities elsewhere. On the purchase side I would highlight our acquisition of Luxotica (well known for its sunglasses - such as the Ray Ban and Oakley brands), DKSH, a new listing in Switzerland which helps global companies gain efficient access to the high growth consumer markets in Asia, and finally a return to ASML which is the world leader in semiconductor  manufacturing equipment. We continue to invest in some great companies, with good prospects but which are, in our view, undervalued purely because of where they are listed.

The introduction says more about the outlook than virtually anything else. In the UK the prevailing view is that Europe has problems which cannot be resolved, but I doubt it is as simple as that. There is enough strength and plenty of resolve to find solutions, and in the meantime, previously untouched issues such as labour market reform have begun to be addressed.

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It is likely to remain difficult to predict accurately either politics or economics in Europe, but the German and northern European economies are doing well, and this is where most of our holdings are. Finally - please remember that we are invested in some of the best managed companies in the world - let alone in Europe.

Tim Stevenson

Portfolio Manager

Gearing: At the end of the quarter the Company was 7% geared (at 31 January 2012: 0%)

Dividends:  An interim dividend of 5.0p per ordinary share, in respect of the year ending 31 July 2012, was paid on 27 April 2012 to holders on the Register of Members on 30 March 2012.  The ex-dividend date was 28 March 2012.

Discount: The share price discount to net asset value at 30 April 2012 was 13.2% (at 31 January 2012: 13.1%)

Share Capital:  During the three month period the Company bought back 5,000 shares all of which were cancelled immediately. Accordingly, the issued share capital at 30 April 2012 was 20,390,541 ordinary shares of 5 pence each and the total number of voting rights was 20,390,541.

The Directors are not aware of any other significant events or transactions up to the date of this report which would have a material impact on the financial position of the Company.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Financial Position (excluding current financial year revenue items)

	at 30 April 2012	at 31 January 2012
Ordinary share price	500.0p	495.3p
Discount	13.2%	13.1%
Gross total assets	£128m	£116m
Net asset value (cum income)	575.8p	569.8p
Net asset value (ex income)	575.4p	569.7p
Gearing	7%	0%
Yield	3.2%	2.2%

(Source: Henderson/Fact Sheet)

Performance to 30 April 2012 (total return % change)

	3 months	6 months	1 year	3 years	5 years
Net asset value	1.83	3.58	-11.19	29.12	10.53
Share price	1.89	1.33	-10.90	25.40	3.04
Benchmark *	-0.44	-0.91	-19.8	20.05	-10.14

(Sources:   AIC)           * The benchmark is the FTSE World Europe (ex UK) Index

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THE PORTFOLIO (Source: Henderson/Fact Sheet)

Top 10 Investments at 30 April 2012	% of total assets
Deutsche Post	4.9
Amadeus	3.1
Ericsson	3.0
Fresenius	2.9
BIC	2.8
Linde	2.6
Sandvik	2.5
Elekta	2.5
Deutsche Börse	2.5
Dassault	2.4
Top 10 =	29.2

Top 10 Investments at 31 January 2012	% of total assets
Deutsche Post	4.9
Fresenius	4.1
Elekta	3.0
Amadeus	2.8
Linde	2.7
Sandvik	2.7
Saipem	2.6
BIC	2.6
Sodexo	2.5
Total	2.3
Top 10 =	30.2

Geographic Breakdown

	% at 30 April 2012	% at  31 January 2012
Germany	25.7	25.7
France	24.9	24.5
Switzerland	17.6	16.9
Sweden	12.0	12.4
Italy	6.4	4.8
The Netherlands	4.7	2.8
Spain	4.3	5.8
Others	4.4	7.1
Total	100.0 ====	100.0 ====

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Sector Breakdown

	% at 30 April 2012	% at  31 January 2012
Industrials	29.0	26.7
Health Care	14.5	16.0
Consumer Goods	13.4	11.0
Technology	12.1	7.6
Financials	8.3	13.5
Oil & Gas	8.3	9.3
Consumer Services	7.0	7.7
Basic Materials	5.0	5.0
Telecommunications	2.4	3.2
Total	100.0 ====	100.0 ====

The objective of Henderson EuroTrust plc is to invest predominantly in large and medium sized companies which are perceived to be undervalued in view of their growth prospects or on account of a significant change in management or structure.  The company's aim is to achieve a superior total return from a portfolio of high quality European investments.

The Manager is Henderson Global Investors Limited. Further information on the company, including an up to date NAV and share price information, can be found on the Manager's website at www.hendersoneurotrust.com.

For further information, please contact:

Tim Stevenson Fund Manager Henderson EuroTrust plc Telephone: [phone]

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

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Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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