Half Yearly Report

RNS Number : 9954Q
Henderson Far East Income Limited
22 April 2009
 




22 April 2009

This announcement contains regulated information.


HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009



As at 

28 February 2009

Total net assets



£152,045,000

Net asset value per ordinary share



195.88p

Market price per ordinary share



194.50p

Discount



0.7%

Dividends 

- first interim (paid 27 February 2009)



3.00p


- second interim (payable 29 May 2009)



3.00p






INTERIM MANAGEMENT REPORT

Extracts from the Chairman's Statement 


The six months under review have been the most challenging period for global financial markets since 1929. The global financial system teetered on the edge of collapse and was only saved by the injection of a substantial amount of Government money into certain major banks and financial institutions both in the USA and across the western world. Asian economies, and particularly Asian banks, have been better positioned and more resilient. Some collateral damage was however inevitable. Exports have weakened considerably and consequently there exists both earnings and dividend risk in this area. Domestic sectors are being supported by significant fiscal stimulus and arguably offer greater dividend sustainability than their western counterparts. Significant change has taken place within the corporate sector in Asia allowing greater adoption of a dividend culture. Your Board firmly believes that this makes the region an attractive proposition for investors seeking income opportunities.


Performance


In the six months to 28 February 2009, the net asset value total return of the Company fell by 22.12% outperforming the FTSE All-World Asia Pacific ex Japan Index which fell 28.51%. The share price total return fell by 15.92%. The share price discount to net assets finished the period at 0.7% compared to 9.0% six months earlier.


Dividends


In November 2008, the Company paid a fourth interim dividend of 3.0p per share in respect of the year ended 31 August 2008, making a total of 12.0p for that year. In our annual report, I indicated that the Board hoped to maintain the same level of dividends in this year, and I am pleased to report that a first interim dividend of 3.00p was paid on 27 February 2009 and a second interim dividend of the same amount will be paid on 29 May 2009. Your Board is confident that it will be able to maintain total dividends at 12.0p.


Material Events or Transactions during the Period

The portfolio was ungeared throughout the period, and the countries in which the company is invested are unchanged from six months previous. 


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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009


INTERIM MANAGEMENT REPORT (continued)

Extracts from the Chairman's Statement (continued)


Issue of Shares


Over the six month period under review the discount narrowed significantly and following a block listing of 7,762,261 shares in March, the Company has made two allotments, totalling 625,000 shares. The shares were issued at a premium to net asset value.


Related Party Transactions


Details of related party transactions are contained in the annual report. There have been no material transactions with related parties during the six month period under review.


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


It is inevitable that the Asian stock markets will continue to suffer some volatility as they respond to actions and decisions in other parts of the world. However, your Board believes that in the medium to long term the outlook for the Asian markets is excellent with prudently managed banks and growing domestic demand. The secret to success is to pick those companies which offer a favourable growth trend and sustainable dividends, and that is the key focus of our Portfolio Manager.




John Russell

Chairman

22 April 2009




DIRECTORS' RESPONSIBILITY STATEMENT


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


(a)

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



(b)

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



(c)

the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).





John Russell

Chairman

22 April 2009



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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009



Investment Portfolio

as at 28 February 2009

Valuation at 

28 February 2009 £'000



% of portfolio



Valuation at 

28 February 2009 £'000



% of portfolio

Australia





Singapore




Woolworths

4,977




DBS Group

4,911



Santos

4,335




Singapore Press

4,059



Telstra Corporation

4,022




Keppel Corp

3,803



QBE Insurance Group

3,972




Singapore Technologies 




Insurance Australia

3,033




  Engineering

3,468



Spark Infrastructure Fund

2,845




Venture

2,510



Qantas Airways

1,468




Ascendas Real Estate  





24,652


16.5


  Investment Trust*

1,694









20,445


13.6

China









China Mobile

6,490




South Korea




Bank of China

5,991




SK Telecom

3,513



Petrochina

4,451




KT Corporation

3,152



Zhejiang Expressway

4,320




Macquarie Korea




China Communications &





  Infrastructure Fund

2,299



  Construction

2,838





8,964


6.0

Shenzhen Investment

2,786








Lonking

2,557




Taiwan





29,433


19.6


High Tech Computer

4,683








Taiwan Mobile

3,869



Hong Kong





Far Eastone




Sino Land

4,347




  Telecommunications

3,667



Henderson Land





Hung Poo Real Estate




  Development

3,808




  Development

2,431



Television Broadcasts

3,656





14,650


9.8

Link REIT

3,356








NWS Holdings

3,218




Thailand




Pacific Basin Shipping

2,627




Bangkok Bank

3,899



Hang Seng Bank*

2,523




Kasikornbank

3,667



Midland Holdings

2,515




Advanced Information




BOC Hong Kong Holdings*

2,480




  Services

3,309




28,530


19.0



10,875


7.3










Malaysia









Tenaga Nasional

4,242




Total Group Investments

149,876


100.0

Bumiputra-Commerce

3,410









7,652


5.1


*value adjusted for put options written












Philippines









Philippine Long Distance









  Telephone

4,675


3.1
















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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009



Condensed Consolidated Income Statement 

for the half year ended 28 February 2009


Half year ended 28 February 2009

(Unaudited)

Half year ended 29 February 2008

(Unaudited)

Year ended 31 August 2008

(Audited)





Revenue

return

£'000

Capital

return

£'000


Total

£'000

Revenue return

£'000

Capital return £'000


Total

£'000

Revenue

return

£'000

Capital return

£'000


Total

£'000

Investment income


2,260

-

2,260

4,531

-

4,531

12,127

-

12,127

Other income


1,150

-

1,150

1,217

-

1,217

2,278

-

2,278

(Losses)/gains on investments held at fair value through profit or loss





-

_______




(48,497)

_______




(48,497)

_______




-

_______




11,328

_______




11,328

_______




-

_______




(7,271)

_______




(7,271)

_______

Total income


3,410

_______

(48,497)

_______

(45,087)

_______

5,748

_______

11,328

_______

17,076

_______

14,405

_______

(7,271)

_______

7,134

_______












Expenses











Management fees


(508)

(508)

(1,016)

(471)

(471)

(942)

(984)

(984)

(1,968)

Other expenses


(109)

_______

(116)

_______

(225)

_______

(148)

_______

(113)

_______

(261)

_______

(325)

_______

(225)

_______

(550)

_______

Profit/(loss) before finance costs and taxation



2,793


(49,121)


(46,328)


5,129


10,744


15,873


13,096


(8,480)


4,616












Finance costs


(9)

_______

(8)

_______

(17)

_______

(35)

_______

(5)

_______

(40)

_______

(50)

_______

(17)

_______

(67)

_______

Profit/(loss) before taxation


2,784

(49,129)

(46,345)

5,094

10,739

15,833

13,046

(8,497)

4,549

Taxation


(86)

_______

-

_______

(86)

_______

(402)

_______

-

_______

(402)

_______

(878)

_______

(152)

_______

(1,030)

_______

Profit/(loss) for the period


2,698

_______

(49,129)

_______

(46,431)

_______

4,692

_______

10,739

_______

15,431

_______

12,168

_______

(8,649)

_______

3,519

_______












Basic and diluted earnings/(loss) per ordinary share (note 2)




3.48p

_______


(63.29)p

_______


(59.81)p

_______


6.04p

_______


13.84p

_______


19.88p

_______


15.67p

_______


(11.14)p

_______


4.53p

_______


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 the Henderson Far East Income Limited. There are no minority interests.



The notes on the following pages form an integral part of this condensed interim financial information





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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009



Condensed Consolidated Statement of Changes in Equity

for the half year ended 28 February 2009

Half year ended 28 February 2009

(Unaudited)





Distributable

reserve

£'000


Other

capital

reserves

£'000



Revenue

reserve

£'000




Total

£'000

Balance at 31 August 2008



180,471


13,811


8,852


203,134

Net (loss)/profit from ordinary activities after taxation




-



(49,129)



2,698



(46,431)

Ordinary dividends paid



-


-


(4,658)


(4,658)

At 28 February 2009



180,471


(35,318)


6,892


152,045












Half year ended 29 February 2008

(Unaudited)





Distributable

reserve

£'000


Other

capital

reserves

£'000



Revenue

reserve

£'000




Total

£'000

Balance at 31 August 2007



180,471


22,460


5,806


208,737

Net profit from ordinary activities after taxation




-



10,739



4,692




15,431

Ordinary dividends paid



-


-


(4,464)


(4,464)

At 29 February 2008



180,471


33,199


6,034


219,704












Year ended 31 August 2008

(Audited)





Distributable

reserve

£'000


Other

capital

reserves

£'000



Revenue

reserve

£'000




Total

£'000

Balance at 31 August 2007



180,471


22,460


5,806


208,737

Net (loss)/profit from ordinary activities after taxation




-



(8,649)



12,168



3,519

Ordinary dividends paid



-


-


(9,122)


(9,122)

At 31 August 2008



180,471


13,811


8,852


203,134













The notes on the following pages form an integral part of this condensed interim financial information





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HENDERSON FAR EAST INCOME LIMITED 

 Unaudited Results for the half year ended 28 February 2009



Condensed Consolidated Balance Sheet

at 28 February 2009

28 February 2009 (Unaudited)

£'000


29 February 2008 (Unaudited)

£'000


31 August 2008 (Audited)

£'000

Non current assets






Investments held at fair value through profit or loss


149,876



217,692



198,137







Current assets






Other receivables

1,612


7,779


7,400

Deferred tax asset

-


152


-

Cash and cash equivalents

4,167


11,121


8,894


5,779


19,052


16,294







Total assets

155,655


236,744


214,431







Current liabilities






Other payables

(3,610)


(14,521)


(7,743)

Bank loans and overdrafts

-


(2,519)


(3,554)


(3,610)


(17,040)


(11,297)







Net assets

152,045


219,704


203,134







Capital and reserves






Distributable reserve

180,471


180,471


180,471

Retained earnings:






  Other capital reserves

(35,318)


33,199


13,811

  Revenue reserve

6,892


6,034


8,852

Total equity

152,045


219,704


203,134







Net asset value per ordinary share (note 3)

195.88p


283.04p


261.69p





The notes on the following pages form an integral part of this condensed interim financial information


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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009



Condensed Consolidated Cash Flow Statement

for the half year ended 28 February 2009

Half year ended

28 February 2009 (Unaudited)

£'000


Half year ended

29 February 2008 (Unaudited)

£'000


Year ended

31 August 2008 (Audited)

£'000


Net cash inflow from operating activities (note 7)


3,817



384



1,551







Net cash inflow before use of financing

3,817


384


1,551

Net cash outflow from financing activities

(4,658)


(6,700)


(11,358)







Decrease in cash and cash equivalents

(841)


(6,316)


(9,807)

Cash and cash equivalents at the start of the period


5,340



14,832



14,832

Exchange movements

(332)


86


315







Cash and cash equivalents at the period end

4,167


8,602


5,340










The notes on the following pages form an integral part of this condensed interim financial information


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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009


Notes:

1.

Accounting Policies: Basis of preparation


The condensed interim financial information has been prepared using the same accounting policies as set out in the Company's Financial Statements for the year ended 31 August 2008 and in accordance with IAS 34.


The condensed interim financial information has not been audited or reviewed by the Company's auditors.

2.

Earnings per ordinary share


The earnings per ordinary share is based on the net loss after taxation of £46,431,000 (half year ended 29 February 2008: profit £15,431,000; year ended 31 August 2008: profit £3,519,000) and on 77,622,621 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:




Half year ended 

28 February 2009 (Unaudited) 

£'000


Half year ended 

29 February 2008 (Unaudited) 

£'000


Year ended 

31 August 2008 

(Audited) 

£'000

Net revenue gain


2,698


4,692


12,168

Net capital (loss)/gain


(49,129)


10,739


(8,649)

Net total (loss)/gain


(46,431)


15,431


3,519

Weighted average number of ordinary shares in issue during the period



77,622,621



77,622,621



77,622,621

















Pence


Pence


Pence

Revenue earnings per ordinary share


3.48


6.04


15.67

Capital (loss)/earnings per ordinary share


(63.29)


13.84


(11.14)

Total (loss)/earnings per ordinary share


(59.81)


19.88


4.53


3.

Net asset value per ordinary share


The basic net asset value per ordinary share is based on a net asset value of £152,045,000 (29 February 2008: £219,704,000); 31 August 2008: £203,134,000) and on 77,622,621 (29 February 2008: 77,622,621; 31 August 2008: 77,622,621) ordinary shares, being the number of ordinary shares in issue at the period end.



4.

Transaction costs


Purchase transaction costs for the half year ended 28 February 2009 were £115,000 (half year ended 29 February 2008: £225,000; year ended 31 August 2008: £392,000). These mainly comprise commission. Sales transaction costs for the half year ended 28 February 2009 were £125,000 (half year ended 29 February 2008: £199,000; year ended 31 August 2008: £407,000).





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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009

5.

Events after the balance sheet date


On 10 March 2009 the company applied for the Blocklisting of 7,762,261 shares. Since 31 March 2009, 625,000 shares have been issued, in two tranches. The proceeds of these issues, net of commission, was £1,368,000.



6.

Interim dividend


On 28 November 2008, the Company paid a fourth interim dividend of 3.00p per share in respect of the year ended 31 August 2008.


A first interim dividend of 3.00p per share was paid on 27 February 2009. The second interim dividend of 3.00p per share will be paid on 29 May 2009 to shareholders on the register on 8 May 2009. The Company's shares will be quoted ex-dividend on 6 May 2009. Based on the number of shares in issue on 21 April 2009, the cost of this dividend will be £2,347,000.



7.

Reconciliation of profit before taxation to net cash inflow from operating activities



Half year ended 

28 February 2009 (Unaudited) 

£'000


Half year ended 29 February 2008 (Unaudited) 

£'000


Year ended 

31 August 2008 (Audited) 

£'000

Net (loss)/profit before tax

(46,345)


15,833


4,549

Add back interest paid

21


46


73

Add: loss/(gains) on investments held at fair value through profit or loss


48,497



(11,328)



7,271

Net sales/(purchases) of investments

159


(7,076)


(6,058)

Decrease/(increase) in other receivables

1,857


86


(185)

Decrease/(increase) in amounts due from brokers


3,854



(1,161)



(474)

(Decrease)/increase in other payables

(66)


413


1

(Decrease)/increase in amounts due to brokers

(3,483)


4,011


(2,404)

Scrip dividends included in investment income

(63)


(4)


(216)

Interest paid

(21)


(46)


(73)

Taxation on investment income

(28)


(390)


(933)

Taxation paid

(565)


-


-

Net cash inflow from operating activities

3,817


384


1,551


8.

Half Year Report


The Half Year Report will be posted to shareholders on 1 May 2009 and copies will be available on the Company's website (www.hendersonfareastincome.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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HENDERSON FAR EAST INCOME LIMITED 

Unaudited Results for the half year ended 28 February 2009




For further information please contact:




Mike Kerley


Portfolio Manager, Henderson Far East Income Limited


Telephone: 020 7818 5053




James de Sausmarez


Director, 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




Jeremy Hamon


BNP Paribas Securities Services Fund Administration Limited, Company Secretary


Telephone: 01534 709108


- ENDS -


This information is provided by RNS
The company news service from the London Stock Exchange
 
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