Interim Results

Henderson Far East Income Limited 16 April 2008 Page 1 of 10 16 April 2008 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 Interim Management Report Extracts from the Chairman's Statement As shareholders will be acutely aware, the credit crisis of the last few months has provided an exceptionally difficult backdrop to investment decision making and the immediate global economic and market outlook looks distinctly challenging. Asian stock markets have certainly not remained immune, although they have demonstrated both independence and resilience in comparison with the US and Europe. Performance Against this background, I am therefore very pleased to report that the absolute performance of your Company has remained strong over the period. In the six months to 29 February 2008, the portfolio has produced a net asset value total return of 9.21%* and a share price total return 9.60%*. In comparison the return on the FTSE All-World Asia Pacific Ex Japan Index, measured on the same basis, was 5.63% * and most global markets actually produced negative returns over the period. (* Source: AIC and Datastream). Discount It is also encouraging to note that the discount to net asset value has come back to 2.3% as at 29 February 2008 from more than 5% at various points over the last six months. Dividends In November 2007, your Company paid a third interim dividend of 2.75p in respect of the period ended 31 August 2007. In our annual report, I indicated that the Board expected to pay a quarterly dividend of 3.0p in this financial year. I am pleased to report that a first interim dividend of 3.0p was paid on 29 February 2008 and a second interim dividend of 3.0p will be paid on 30 May 2008. This represents an increase of 9.1% over the previous year. Material Events or Transactions during the Period Country allocation within the portfolio remained broadly unchanged. Sector exposure also saw little change; the exception being the reduction of investment in technology companies in favour of those in telecommunications. Call options on five stocks held in the portfolio were sold and put options bought to provide capital protection. The portfolio remained ungeared throughout. - MORE - Page 2 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 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. Savings Your Company aims to be an investment of choice for those looking to build a total return portfolio with an attractive income element. Investments can be made through Itshenderson, our Manager's investment service for private investors or through any other share dealing service. Outlook (including principal risks and uncertainties) for the six months to 31 August 2008 We remain positive on the medium to long term outlook for the Asian markets based on the strength of the underlying economies and the improvements being made in the corporate sector. In the short term, however, markets are likely to remain volatile until there is greater clarity on the depth of the problems in the global financial system and their impact on growth. In addition, inflationary pressures compounded by high energy and commodity prices are curtailing the ability of central banks to utilise monetary tools to offset the slowdown. Despite these concerns, we remain focused on finding investments in Asia that show a favourable growth trend and an attractive income profile. John Russell Chairman 16 April 2008 - MORE - Page 3 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 Condensed Consolidated Income Statement for the half year ended 29 February 2008 Half year ended Period 6 November 2006 to Period 6 November 2006 to 29 February 2008 28 February 2007 31 August 2007 (Unaudited) (Unaudited) (Audited) Revenue Capital Total Revenue Capital Total Revenue Capital Total Return Return Return Return Return Return Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment income 4,531 - 4,531 2,926 - 2,926 11,808 - 11,808 Other income 1,217 - 1,217 235 - 235 434 - 434 Gains on investments held at fair value through profit or loss - 11,328 11,328 - 4,679 4,679 - 23,330 23,330 --------- --------- --------- --------- --------- --------- --------- --------- --------- Total income 5,748 11,328 17,076 3,161 4,679 7,840 12,242 23,330 35,572 --------- --------- --------- --------- --------- --------- --------- --------- --------- Expenses Management fees (471) (471) (942) (150) (150) (300) (599) (599) (1,198) Other expenses (148) (113) (261) (71) (71) (142) (206) (169) (375) --------- --------- --------- --------- --------- --------- --------- --------- --------- Profit before finance costs and taxation 5,129 10,744 15,873 2,940 4,458 7,398 11,437 22,562 33,999 Finance costs (35) (5) (40) (12) (12) (24) (79) (66) (145) --------- --------- --------- --------- --------- --------- --------- --------- --------- Profit before taxation 5,094 10,739 15,833 2,928 4,446 7,374 11,358 22,496 33,854 Taxation (402) - (402) (316) - (316) (1,282) (36) (1,318) --------- --------- --------- --------- --------- --------- --------- --------- --------- Profit for the period 4,692 10,739 15,431 2,612 4,446 7,058 10,076 22,460 32,536 ====== ====== ===== ====== ====== ===== ====== ====== ===== Earnings per ordinary 3 6.04p 13.84p 19.88p 3.36p 5.73p 9.09p 12.98p 28.94p 41.92p share ====== ====== ===== ====== ====== ===== ====== ====== ===== 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 Far East Income Limited. There are no minority interests. The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 4 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 Condensed Consolidated Statement of Changes in Equity for the half year ended 29 February 2008 Half year ended 29 February 2008 (Unaudited) Other capital Stated Distributable reserves Revenue capital reserve reserve Total £'000 £'000 £'000 £'000 £'000 Opening balance - 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 ====== ====== ====== ====== ====== Period 6 November 2006 to 28 February 2007 (Unaudited) Other capital Stated Distributable reserves Revenue capital reserve reserve Total £'000 £'000 £'000 £'000 £'000 Opening balance - - - - - Issue of shares 180,982 - - - 180,982 Share issue costs (499) - - - (499) Transfer to Distributable Reserve (180,483) 180,483 - - - Net profit from ordinary activities after - - 4,446 2,612 7,058 taxation --------- --------- --------- --------- --------- At 28 February 2007 - 180,483 4,446 2,612 187,541 ====== ====== ====== ====== ====== Period 6 November 2006 to 31 August 2007 (Audited) Other capital Stated Distributable reserves Revenue capital reserve reserve Total £'000 £'000 £'000 £'000 £'000 Opening balance - - - - - Issue of shares 180,982 - - - 180,982 Share issue costs (499) (12) - - (511) Transfer to Distributable Reserve (180,483) 180,483 - - - Net profit from ordinary activities after - - 22,460 10,076 32,536 taxation Ordinary dividends paid - - - (4,270) (4,270) --------- --------- --------- --------- --------- At 31 August 2007 - 180,471 22,460 5,806 208,737 ====== ====== ====== ====== ====== The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 5 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 Condensed Consolidated Balance Sheet at 29 February 2008 29 February 28 February 31 August 2008 2007 2007 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Non-current assets Investments held at fair value through profit or loss 217,692 178,528 199,414 ----------- ----------- ----------- Current assets Other receivables 7,779 6,780 6,722 Deferred tax asset 152 - 152 Cash and cash equivalents 11,121 5,058 17,657 ----------- ----------- ----------- 19,052 11,838 24,531 ----------- ----------- ----------- Total assets 236,744 190,366 223,945 ----------- ----------- ----------- Current liabilities Other payables (14,521) (1,362) (10,147) Bank loans and overdrafts (2,519) (1,463) (5,061) ----------- ----------- ----------- (17,040) (2,825) (15,208) ----------- ----------- ----------- Net assets 219,704 187,541 208,737 ====== ====== ====== Capital and reserves Stated capital - - - Distributable reserve 180,471 180,483 180,471 Retained earnings: Other capital reserves 33,199 4,446 22,460 Revenue reserve 6,034 2,612 5,806 ----------- ----------- ----------- Total equity 219,704 187,541 208,737 ====== ====== ====== Net asset value per ordinary share (pence) (note 4) 283.04p 241.61p 268.91p ====== ====== ====== The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 6 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 29 February 2008 Condensed Consolidated Cash Flow Statement for the half year ended 29 February 2008 Period 6 November Period 6 November 2006 to 28 2006 to 31 August Half year February 2007 2007 ended 29 February (Unaudited) (Audited) 2008 (Unaudited) £'000 £'000 £'000 Net cash inflow from operating activities (note 7) 384 1,787 15,073 --------- --------- --------- Net cash inflow before use of financing 384 1,787 15,073 Net cash (outflow)/inflow from financing activities (6,700) 2,061 6 --------- --------- --------- (Decrease)/increase in cash and cash equivalents (6,316) 3,848 15,079 Cash and cash equivalents at the start of the period 14,832 - - Exchange movements 86 (253) (247) --------- --------- --------- Cash and cash equivalents at the period end 8,602 3,595 14,832 ====== ====== ====== The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 7 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 Notes to Condensed 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 and New Zealand Stock Exchanges. The Company was incorporated on 6 November 2006. 2. Principal 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 Report and Accounts for the period ended 31 August 2007 and in accordance with International Accounting Standards ('IAS') 34 . The company has adopted the following new and revised accounting standards during the period: • International Accounting Standard No. 1 (Revised) Presentation of financial statements • International Financial Reporting Standard No. 7 Financial Instruments: Disclosures 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 profit after taxation of £15,431,000 (period to 28 February 2007: profit £7,058,000; period to 31 August 2007: profit £32,536,000) 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: Period Period Half year ended 29 6 November 2006 to 6 November 2006 to February 2008 28 February 2007 31 August 2007 (Unaudited) (Unaudited) (Audited) Net revenue gain 4,692 2,612 10,076 Net capital gain 10,739 4,446 22,460 --------- --------- --------- Net total gain 15,431 7,058 32,536 ===== ===== ===== 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 6.04 3.36 12.98 Capital earnings per ordinary share 13.84 5.73 28.94 --------- --------- --------- Total earnings per ordinary share 19.88 9.09 41.92 ===== ===== ===== - MORE - Page 8 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 4. Net asset value per ordinary share The basic net asset value per ordinary share is based on a net asset value of £219,704,000 (28 February 2007: £187,541,000; 31 August 2007: £208,737,000) and on 77,622,621 (28 February 2007: 77,622,621; 31 August 2007: 77,622,621) ordinary shares, being the number of ordinary shares in issue at the period end. 5. Transaction Costs Purchase transaction costs for the half year ended 29 February 2008 were £225,000 (period 6 November 2006 to 28 February 2007: £80,000; period 6 November 2006 to 31 August 2007: £435,000). These comprise mostly stamp duty and commission. Sales transaction costs for the half year ended 29 February 2008 were £199,000 (period 6 November 2006 to 28 February 2007: £149,000; period 6 November 2006 to 31 August 2007: £544,000). 6. Interim Dividend On 30 November 2007, the Company paid a third interim dividend of 2.75p per share in respect of the period ended 31 August 2007. A first interim dividend of 3.0p per share was paid on 29 February 2008. The second interim dividend of 3.0p per share will be paid on 30 May 2008 to shareholders on the register on 9 May 2008. Based on the number of shares in issue on 15 April 2008, the cost of this dividend will be £2,329,000. The shares will be quoted ex-dividend on 7 May 2008. Copies of the Half Year Report will be posted to shareholders in late April 2008 and will thereafter be available from the Secretary at BNP House, Anley Street, St.Helier, Jersey, JE2 3QE. - MORE - Page 9 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the half year ended 29 February 2008 7. Reconciliation of profit before taxation to net cash inflow from operating activities Period Half year ended 29 Half year 6 November 2006 to February 2008 ended 31 August 2007 (Unaudited) 28 February 2007 (Audited) (Unaudited) Net profit before tax 15,833 7,374 33,854 Add back interest paid 46 16 139 Less: gains on investments held at fair value through profit or loss (11,328) (4,679) (23,330) Net purchases of investments (7,076) (173,596) (175,534) In specie transfer of securities in consideration for shares issued - 178,200 178,200 Decrease/(increase) in other receivables 86 (1,697) (1,942) Increase in amounts due from brokers (1,161) (4,822) (4,072) Increase in other payables 413 440 451 Unrealised losses on foreign exchange contracts - - 47 Increase in amounts due to brokers 4,011 901 9,034 Scrip dividends included in investment income (4) - (303) Interest paid (46) (16) (139) Taxation on investment income (390) (334) (1,332) --------- --------- --------- Net cash inflow from operating activities 384 1,787 15,073 ===== ===== ===== - MORE - Page 10 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 29 February 2008 Geographical Distribution of Group Investments 29 February 2008 % Australia 21.4 Taiwan 19.1 Hong Kong 17.4 Singapore 13.1 South Korea 12.6 Malaysia 8.3 The Philippines 3.0 Thailand 2.6 China 2.5 --------- 100.0 ===== Top Twenty Investments as at 29 February 2008 Value of Investments Company Country £'000 Singapore Telecommunications Singapore 6,742 Telstra Corporation Australia 6,632 Philippines Long Distance Telephone Philippines 6,591 Hang Seng Bank Hong Kong 6,409 High Tech Computer Taiwan 6,111 Farglory Land Development Taiwan 6,082 Formosa International Hotels Taiwan 5,984 BOC Hong Kong Holdings Hong Kong 5,801 Fairfax Media Australia 5,783 Keppel Corp Singapore 5,713 Krung Thai Bank Thailand 5,587 DBS Singapore 5,464 Transurban Group Australia 5,450 Petrochina China 5,355 Malayan Banking Malaysia 5,341 Singapore Press Singapore 5,302 Singapore Technologies Singapore 5,271 Santos Australia 5,237 Bumiputra-Commerce Malaysia 5,122 Woolworths Australia 5,105 ------------ Total Top 20 Investments 115,082 Top 20 as a percentage of total investments 52.86% - ENDS - For further information please contact : Michael Kerley, Fund Manager, Telephone: 020 7818 5053 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 This information is provided by RNS The company news service from the London Stock Exchange

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