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. 

- MORE -

- 2 -

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

- MORE -

- 3 -

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

  - 4 -

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

- MORE -

- 5 -

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

- MORE -

  - 6 -

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

- MORE -

- 7 -

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

- MORE -

- 8 -

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).
	- MORE - - 9 - 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

	- MORE - -10- 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: [phone]
	James de Sausmarez
	Director, Head of Investment Trusts, Henderson Global Investors
	Telephone: [phone]
	Sarah Gibbons-Cook
	Investor Relations and PR Manager, Henderson Global Investors
	Telephone: [phone]
	Jeremy Hamon
	BNP Paribas Securities Services Fund Administration Limited, Company Secretary
	Telephone: [phone]

- ENDS -

 

END

 

 

IR PUUGACUPBGWP