Annual Financial Report

RNS Number : 0153B

Henderson High Income Trust PLC

27 March 2013

 



Page 1

27 March 2013

HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

This announcement contains regulated information

Performance Summary:

Per ordinary share	31 December 2012	31 December 2011	Change %
Net asset value ("NAV")	137.32p	121.36p	+13.2
Market price	138.25p	118.50p	+16.7
Revenue return	8.44p	8.48p	-0.5

Chairman's Statement

Performance

In my interim statement I said that I thought that it could prove challenging to repeat in the second half of the year the same level of returns which we had seen in the first half of the year, although I was confident that our Portfolio Manager would do his best to meet this challenge. In the event he more than rose to the challenge and substantially improved on the positive trend of the first half, to produce a Net Asset Value total return for the whole year of 20.9%, significantly outperforming our benchmark index's total return of 12.5%, so fully justifying the payment to Henderson Global Investors under our performance-related fee arrangement. We benefited from a recovery in equity markets, but also continued strength in bond markets; all this in spite of a background of mixed economic and political news. Our Portfolio Manager  in his Investment Review expands on why we outperformed, but it should be recognised that it was a real achievement. When put together with the good performance of recent years, this means that the Company has outperformed our benchmark over one, three, five and ten years.

In previous statements I have compared the performance of the UK stock market to a ride on the big dipper and a look at the chart on page 3 of the Report and Financial Statements, the FTSE All-Share Index over 2012 shows an uncanny resemblance to the design of what would be an awesome big dipper if it was ever to be built. The recovery from the low point of the big 'switch back' in June has not been without its excitement and it is, of course, against this background that our Portfolio Manager has produced such an excellent outcome.

Dividends

We have continued to pay quarterly dividends at the rate of 8.30p per annum, with the payments in respect of 2012 once more covered by revenue. We have, therefore, made a small transfer to our revenue reserves which is in line with our previously stated priority to replenish them so that if conditions again deteriorate and dividend payments by the companies we hold are adversely affected, we are better able to meet our objective of at least maintaining our own dividend. Nonetheless it still remains our aspiration to increase distributions as and when we can have sufficient confidence that such an increase would be sustainable going forward. Whilst we are not there yet, we are hopefully moving closer and so we will keep the level of our dividend under review during the year and in light of our actual experience and the investment conditions and outlook at the time.

Page 2

HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Chairman's Statement (continued)

Gearing

Gearing is, as I have often reminded shareholders, an important feature of the Company. We utilise it to enable us to generate additional income, and hopefully also capital growth over time. With interest rates still substantially lower than the yield on many good quality equities, there are clearly advantages to utilising borrowings at the current time. At the year end the net gearing was 18.3% which was lower than it had been at the same point last year and is largely a reflection of the rise in the value of our assets. Conditions in the banking sector have improved and as the pricing of longer term facilities is now more attractive, we have decided to renew our borrowing facility for a two year term.

Annual General Meeting

As shareholders will be aware, our shares have traded at a premium to their net asset value for most of the year, indeed at the end of the year the share price was on a modest premium. This has been as a result of a steady demand for our shares in the market and, therefore, we have issued 6.97 million new shares at a premium to net asset value in the course of the year to meet this demand. This has been within the authority granted to the board by shareholders at the AGM and is consistent with our policy of wishing to see the Company grow, to promote liquidity and avoid too substantial a premium from developing. This we believe is to the benefit of our existing shareholders. We will again be asking shareholders to renew this authority at the forthcoming AGM.

Following the introduction of new investment trust tax rules it is now possible for investment trust companies to distribute capital profits by way of dividend.  We are, therefore, proposing a resolution at the AGM to enable the Company to take advantage of the added flexibility allowed by these new tax rules.  However, the Board has no intention at the current time to distribute capital profits as dividends, but believe that it is in shareholders' best interests for the Board to have this power should circumstances warrant it in the future.

The Board recommends that shareholders vote in favour of all resolutions as all the Directors intend to do in respect of their own shares.

Outlook

It may not have always felt like it, but we have effectively been in a bull market since the lows of 2009, with the FTSE All-Share Index near its all time high in 2007. After such a run it quite naturally raises the question how much longer it can continue. Certainly economic concerns remain and valuations are not as low as they were a year ago, but then neither are they too demanding. There appears little prospect that interest rates are going to start rising in the immediate future and with yields on bonds and cash so low, the equity market offers one of the few prospects of earning a reasonable yield and should continue to attract investors looking for income. Nonetheless capital returns, certainly in the bond markets, may not match those of the last year, although hopefully the income part of the return will remain secure. So again I think our Portfolio Manager faces challenges in 2013, but he has met them before and I remain confident that he will rise to the task again.

Hugh Twiss

Chairman

27 March 2013

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Investment Review

Review of the year to 31 December 2012

Against a backdrop of weak economic growth and investor fears, the stock market's progression over the year has confounded many commentators.  Following a mixed first half of the year, the UK equity market rose in value every month from the end of May, buoyed by good company results and falling government bond yields in Europe.  Support was given to markets by comments from Mario Draghi, the President of the European Central Bank, stating his commitment to the Euro and various schemes to support European states in trouble.  Closer to home, the UK experienced limited economic success as the Olympics provided some support for the economy but the mix of poor weather and extra bank holidays, combined with inflationary pressures, impacted consumer spending.  Despite a tough economic backdrop, many companies reported good results and healthy dividend growth as tight control of operating costs, falling interest exposures and lower taxes offset sluggish revenue growth.

The Trust's NAV total return was 20.9% over the year, which reflected outperformance by both the equity and fixed interest portfolios combined with the benefit of gearing.  The equity portfolio produced a total return of 17.7% compared to the 12.3% gain of the FTSE All-Share Index.  This portion of the portfolio was aided by having limited exposure to the poorest performing areas of the market, such as Mining, Oils and Pharmaceuticals, while a greater proportion of investment was allocated to top performing sectors such as Insurance, Industrials and Media.  Some holdings, such as the house-builder Galliford Try, insurance company Catlin and newspaper distributor Smiths News, produced returns that were considerably better than the overall market. The stock selection was particularly favourable for the Trust in the mid-sized and smaller company segments of the portfolio. Over the year, careful stock selection and limited exposure to poorly performing sectors such as oil and pharmaceuticals helped to enhance the portfolio's return.

The fixed interest portfolio produced an exceptional outturn producing a total return of 23.2% compared to the 13.3% return from the Merrill Lynch Sterling Non Gilts Index.  This more than made up the deficit against this benchmark last year and reflected an overweight position in insurance bonds and the diversification into European bonds.  The portfolio was broadened during the year to include both US dollar and Euro dominated bonds and to maintain a reasonable yield despite a high number of bonds being called by issuers.  The fixed interest portfolio produced a similar return profile to the equity market with the bulk of returns being made in the second half of the year as investors put money to work in all asset classes.

The income return over the year may at first glance look dull, decreasing by 0.5% to 8.44p per share but importantly this remains greater than our annual dividends of 8.30p and therefore marginally increased our revenue reserves. Underlying dividends from our investments remained robust and most companies increased dividends over the year. However, the amount of special dividends was much lower as Vodafone in particular did not repeat its special payment from the previous year.  Additionally, a lower proportion of bond income and a greater number of shares in issue also affected the revenue per share.  Entering the current year the Trust has a greater exposure to equities, which increases the proportion of the investment portfolio which should experience some form of income growth.

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Investment Review (continued)

Gearing was reduced through the year, both in terms of net debt (£24.3m vs £27.5m) and as a percentage of shareholders' funds (18.3% vs 25.3%).  The increase in share prices combined with share issuance are the two prime factors behind the fall in gearing, although we also felt it prudent to reduce exposure to fixed interest holdings given the appreciation seen in this market.  We have negotiated a new two year facility on similar terms to last year which will give the Company access to continued low borrowing cost. We expect to continue to utilise gearing to enhance both income generation and capital growth when we feel opportunities exist in investment markets.

Portfolio activity

The current portfolio positioning was largely executed back in 2010 and benefits of this were realised with the strong relative performance delivered both this year and in 2011.  During the year there was relatively little portfolio activity as we were confident in the mix of fixed interest and equities, combined with the underlying companies we held.  The majority of the changes in sector exposures were a result of share price appreciation especially in increasing allocations to insurance and industrials while reducing those to telecoms and tobacco.

We did actively increase the consumer and media exposure reflecting our positive outlook for both sectors and the low valuations of companies in this area.  New holdings included Informa, which provides information to businesses across a wide range of sectors and through multiple formats. Other new holdings included Inmarsat, the satellite telecommunications provider, reflecting the growing adoption of their new terminals on ships and within the oil industry.  Positions in Centrica and Drax were both increased because it was expected that as nuclear and coal fired power stations are closed, electricity power prices will move steadily higher benefiting both companies. We have maintained a modest exposure to European markets, principally in sectors with very limited choices in the UK market.  During the year we have added an investment in Statoil, based in Norway, which has been increasing oil production and provides diversification from the two UK listed oil companies in the portfolio.

Sales during the year included the position in insurance company Aviva which was switched into Legal and General.  This should provide better protection for dividend income while providing better growth and a stronger position in the UK pensions and life assurance markets.  The Rio Tinto holding was sold after a strong rise in share price, as was the holding of life assurer Prudential, allowing a rotation into lower valued and higher yielding stocks elsewhere in the market.

Changes to the fixed interest portfolio were largely forced upon us because many companies have taken advantage of strong demand and low borrowing costs to refinance their bonds.  There has also been a trend for well financed companies to simply retire debt when it reaches maturity rather than reissue.  We have continued to diversify beyond the sterling market by purchasing a US dollar bond from Iron Mountain and Euro bonds from Rexel and RWE.  Around 25% of the fixed interest portfolio is currently issued in currencies other than sterling, although this exposure is partially offset by borrowings in Euros and US dollars.

Page 5

HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Investment Review (continued)

I have been ably supported by my deputy manager, Ben Lofthouse, during the past few years but as his role at Henderson has expanded it is appropriate to make a change to the deputy fund manager of the Company. David Smith has accepted this role and will increasingly work with me in managing the portfolio. He has been with Henderson for eleven years and has worked in a number of analytical roles and managed UK institutional equity portfolios for the past five years. I know he will make a significant contribution to extending the Company's record of dividend distributions and capital growth.

Outlook

Last year many of the global risks that overhung equity markets either never materialised or were partially neutralised.  In a sense, equity markets rose in value because no major events occurred to derail them and their upward progress steadily dragged in more investment seeking better returns. The future still contains many uncertainties that need resolving but most are well understood and gradually solutions will be proposed. However, it has to be said that the problems in Europe do require further creative solutions and ultimately a form of debt forgiveness is essential for the heavily indebted southern nations if the Euro is to retain its current membership.

The UK economy is exhibiting little growth because real wages continue to fall and although jobs are being created, too many are part time and on low wages. Against this backdrop of weak economic activity we need to focus the stock selection on those companies which have strong franchises or where growth is derived from quicker growing economies overseas. The UK stock market is dominated by companies conducting much of their business abroad and we have a wide selection to choose from. The valuation of the overall stock market is no longer cheap but in relation to bond prices it represents excellent value. We anticipate keeping the bond exposure at its current level or even possibly moving it lower if inflationary pressures push longer term bond prices lower. The prospects for equity dividend growth combined with gradually improving global economic activity makes a significant equity exposure, relative to bonds, a more appealing mix for current conditions.

The key to sustained recovery in equity prices over the coming year will be earnings growth from the largest sections of the market. The second half of 2012 saw analysts downgrade profit expectations from financials, mining and consumer related sectors and it would be beneficial to see these cuts reversed, aiding the valuation support to the equity market. Dividends in aggregate are expected to increase and it could be this factor that provides the underpinning of the equity market, attracting increasing proportions of the pool of savings currently invested in bonds and cash. Getting investors to change their perception of equities as risky and consider them as providers of long term income as well as capital growth would provide support to the share price of many companies within the Company's portfolio.

Alex Crooke

Portfolio Manager

27 March 2013

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Principal risks and uncertainties

The Board has drawn up a matrix of risks facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objective and policy, in order to mitigate these risks as far as practicable. The principal risks which have been identified and the steps taken by the Board to mitigate these are as follows:

● Investment activity and performance

An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may result in underperformance against the Company's benchmark index and the companies in its peer group. The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings.

● Financial

By its nature as an investment trust, the Company's business activities are exposed to market risk (including currency risk, interest rate risk and other price risk), liquidity risk, and credit and counterparty risk.

Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move rapidly. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on shareholders' funds. The Directors review the portfolio each month and risk is mitigated through diversification of investments in the portfolio.

Further details of these risks and how they are managed are contained in note 13 in the Annual Report and Financial Statements.

● Regulatory

A breach of Section 1158 of the Corporation Tax Act 2010 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage. The Manager has contracted to provide investment, company secretarial, accounting and administration services through qualified professionals. The Board receives internal control reports produced by the Manager on a quarterly basis, which confirm regulatory compliance.

● Operational

Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service. Details of how the Board monitors the services provided by the Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal controls section of the corporate governance statement in the Annual Report and Financial Statements.

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Related Party transactions

Investment management, accounting, company secretarial and administration services are provided to the Company by wholly-owned subsidiary companies of Henderson Global Investors Limited. The provision of services by Henderson is the only related party arrangement currently in place.  Other than fees payable by the Company in the ordinary course of business there have been no material transactions with this related party affecting the financial position or performance of the Company during the year under review. 

During the year under review the Manager used certain services which were paid for, or provided by, various brokers.  In return it placed business with those brokers, which may have included transactions relating to the Company. 

Statement of directors' responsibilities

Statement under DTR 4.1.12

To the best of our knowledge:

a)         the financial statements, prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

b)         the Report of the Directors and the Financial Statements includes a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

Hugh Twiss

Chairman

27 March 2013

Page 8

HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

 

Income Statement

for the year ended 31 December 2012

	Year ended 31 December 2012			Year ended 31 December 2011
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Gains/(losses) on investments held at fair value through profit or loss (note 2)	-	16,090	16,090	-	(3,066)	(3,066)
Income from investments held at fair value through profit or loss (note 3)	8,540	-	8,540	8,407	-	8,407
Other interest receivable and similar income (note 4)	196	-	196	297	-	297
	----------	----------	----------	----------	----------	----------
Gross revenue and capital gains/(losses)	8,736	16,090	24,826	8,704	(3,066)	5,638
Management and performance fees (note 5)	(274)	(1,476)	(1,750)	(262)	(1,543)	(1,805)
Other administrative expenses	(321)	-	(321)	(338)	-	(338)
	----------	----------	----------	----------	----------	----------
Net return/(loss) on ordinary activities before finance costs and taxation	8,141	14,614	22,755	8,104	(4,609)	3,495
Finance costs	(145)	(436)	(581)	(213)	(638)	(851)
	----------	----------	----------	----------	----------	----------
Net return/(loss) on ordinary activities before taxation	7,996	14,178	22,174	7,891	(5,247)	2,644
Taxation on net return on ordinary activities	(233)	227	(6)	(310)	294	(16)
	----------	----------	----------	----------	----------	----------
Net return/(loss) on ordinary activities after taxation	7,763	14,405	22,168	7,581	(4,953)	2,628
	======	======	======	======	======	======
Return/(loss) per ordinary share (note 6)	8.44p	15.67p	24.11p	8.48p	(5.54)p	2.94p
	======	======	======	======	======	======
The total columns of this statement represent the income statement of the Company.  All capital and revenue items derive from continuing operations.  No operations were acquired or discontinued during the year.  The Company has no recognised gains or losses other than those recognised in the income statement.

            Page 9

HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

 

Reconciliation of Movements in Shareholders' Funds

for the year ended 31 December 2012

Year ended 31 December 2012	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2011	4,485	61,462	26,302	13,166	3,455	108,870
Net return on ordinary activities after taxation	-	-	-	14,405	7,763	22,168
Issue of new  shares	349	8,924	-	-	-	9,273
Fourth interim dividend (2.075p per share) for the year ended 31 December 2011 paid 31 January 2012	-	-	-	-	(1,861)	(1,861)
First interim dividend (2.075p per share) for the year ended 31 December 2012 paid 30 April 2012	-	-	-	-	(1,869)	(1,869)
Second interim dividend (2.075p per share) for the year ended 31 December 2012 paid 31 July 2012	-	-	-	-	(1,883)	(1,883)
Third interim dividend (2.075p per share) for the year ended 31 December 2012 paid 31 October 2012	-	-	-	-	(1,938)	(1,938)
Refund of unclaimed dividends	-	-	-	-	4	4
	--------	---------	---------	---------	---------	----------
At 31 December 2012	4,834	70,386	26,302	27,571	3,671	132,764
	=====	=====	=====	=====	=====	======
Year ended 31 December 2011	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2010	4,448	60,562	26,302	18,119	3,281	112,712
Net (loss)/return on ordinary activities after taxation	-	-	-	(4,953)	7,581	2,628
Issue of new shares	37	900	-	-	-	937
Third interim dividend (2.075p per share) for the year ended 31 December 2010 paid 31 January 2011	-	-	-	-	(1,846)	(1,846)
First interim dividend (2.075p per share) for the year ended 31 December 2011 paid 28 April 2011	-	-	-	-	(1,851)	(1,851)
Second interim dividend (2.075p per share) for the year ended 31 December 2011 paid 29 July 2011	-	-	-	-	(1,851)	(1,851)
Third interim dividend (2.075p per share) for the year ended 31 December 2011 paid 31 October 2011	-	-	-	-	(1,861)	(1,861)
Refund of unclaimed dividends	-	-	-	-	2	2
	--------	---------	---------	---------	---------	----------
At 31 December 2011	4,485	61,462	26,302	13,166	3,455	108,870
	=====	=====	=====	=====	=====	======

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Balance Sheet

at 31 December 2012

	2012 £'000	2011 £'000
Investments held at fair value through profit or loss	157,097	136,388
	----------	----------
Current assets
Debtors	1,384	1,703
Cash at bank	3,250	682
	----------	----------
	4,634	2,385
Creditors: amounts falling due within one year	(28,967)	(29,903)
	----------	----------
Net current liabilities	(24,333)	(27,518)
	----------	----------
Total assets less current liabilities	132,764	108,870
	======	======
Capital and reserves
Share capital	4,834	4,485
Share premium account	70,386	61,462
Capital redemption reserve	26,302	26,302
Other capital reserves	27,571	13,166
Revenue reserve	3,671	3,455
	----------	----------
Equity shareholders'  funds	132,764	108,870
	======	======
Net asset value per ordinary share (note 7)	137.32p	121.36p
	======	======

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Cash Flow Statement

for the year ended 31 December 2012

	2012 £'000	2012 £'000	2011 £'000	2011 £'000
Net cash inflow from operating activities (note 8)		6,810		7,770
Servicing of finance
Bank overdraft and loan interest paid		(564)		(847)
Taxation
Tax recovered		13		28
Financial investment
Purchases of investments	(26,517)		(32,351)
Sales of investments	21,674		31,699
	----------		-----------
Net cash outflow from financial investment		(4,843)		(652)
Equity dividends paid		(7,547)		(7,407)
		----------		-----------
Net cash outflow before financing		(6,131)		(1,108)
Financing
Issue of shares	9,273		937
Repayment of loans	(671)		(2,314)
	----------		----------
Net cash inflow/(outflow) from financing		8,602		(1,377)
		----------		----------
Increase/(decrease) in cash in the year		2,471		(2,485)
		======		======
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash as above		2,471		(2,485)
Cash outflow from repayment of loans		671		2,314
Exchange movements		97		(60)
		-----------		-----------
Movement in net debt		3,239		(231)
Net debt at 1 January		(27,518)		(27,287)
		-----------		-----------
Net debt at 31 December		(24,279)		(27,518)
		======		======

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Notes:

1.   Basis of accounting

The financial statements have been prepared on the historical cost basis except for the measurement at fair value of investments.  The financial statements have been prepared in accordance with applicable UK accounting standards and with the Statement of Recommended Practice Financial Statements of Investment Trust Companies and Venture Capital Trusts ("the SORP") dated January 2009.  All of the Company's operations are of a continuing nature.

2.   Gains/(losses) from investments held at fair value through profit or loss

	2012 £'000	2011 £'000
(Losses)/gains on sale of investments based on historical cost	(3,150)	2,125
Less: revaluation losses/(gains) recognised in previous years	3,906	(1,846)
	---------	---------
Gains on investments sold in the year based on carrying value at the previous balance sheet date	756	279
Net movement on revaluation of investments	15,237	(3,285)
Exchange gains/(losses)	97	(60)
	---------	---------
	16,090	(3,066)
	=====	=====

3.   Income from investments held at fair value through profit or loss

	2012 £'000	2011 £'000
Franked:
Listed - dividends	5,548	5,361
	-------	-------
Unfranked:
Listed -  interest income	1,371	1,516
-  dividend income	1,621	1,530
	-------	--------
	2,992	3,046
	-------	--------
	8,540	8,407
	====	====

4.   Other interest receivable and similar income

	2012 £'000	2011 £'000
Bank interest	1	2
Underwriting commission	36	-
Option premium income	159	295
	-----	------
	196	297
	===	===

5.   Management and performance fees

	2012 Revenue return £'000	2012 Capital return £'000	2012 Total £'000	2011 Revenue return £'000	2011 Capital return £'000	2011 Total £'000
Management fee	274	411	685	262	394	656
Performance fee	-	1,065	1,065	-	1,149	1,149
	------	-------	-------	------	------	------
	274	1,476	1,750	262	1,543	1,805
	====	====	====	====	====	====

A summary of the terms of the management agreement is given on page 15 in the Report of the Directors of the Report and Financial Statements.  An explanation of the split between revenue and capital is contained in accounting policy 1(f) on page 31 of the Report and Financial Statements.  A performance fee of £1,065,000 was earned during the year (2011:  £1,149,000).

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Notes (continued)

6.   Return per ordinary share

The return per ordinary share figure is based on the gains attributable to the ordinary shares of £22,168,000 (2011: £2,628,000) and on the 91,953,053 weighted average number of ordinary shares in issue during the year (2011: 89,395,675).

The Company had no securities in issue that could dilute the return per ordinary share.

The return per ordinary share can be analysed between revenue and capital, as shown below:

	2012 £'000	2011 £'000
Net revenue return	7,763	7,581
Net capital return/(loss)	14,405	(4,953)
	----------	----------
Net total return	22,168	2,628
	======	======
Weighted average number of ordinary shares in issue during the year	91,953,053	89,395,675
	Pence	Pence
Revenue return per ordinary share	8.44	8.48
Capital return/(loss) per ordinary share	15.67	(5.54)
	----------	----------
Total return per ordinary share	24.11	2.94
	======	======

7.   Net asset value per ordinary share

The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £132,764,000 (2011: £108,870,000) and on the 96,680,744 ordinary shares in issue at 31 December 2012 (2011: 89,710,744 ordinary shares).

8.   Reconciliation of net return on ordinary activities before finance costs

      and taxation to net cash inflow from operating activities

	2012 £'000	2011 £'000
Net return before finance costs and taxation	22,755	3,495
Gains/(losses) on investments held at fair value through profit or loss	(16,090)	3,066
Increase in accrued income and debtors of a revenue nature	339	(125)
(Decrease)/increase in creditors	(176)	1,375
Tax deducted on investment income	(18)	(41)
	--------	--------
Net cash inflow from operating activities	6,810	7,770
	=====	=====

9.   Dividends

A fourth interim dividend of 2.075p per ordinary share (2011: 2.075p per ordinary share) was paid on 31 January 2013.  

A first interim dividend of 2.075p per ordinary share for the year to 31 December 2013 (2012: 2.075p per ordinary share) will be paid on 30 April 2013 to shareholders on the register on 12 April 2013.  The shares will be quoted ex-dividend from 10 April 2013.

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HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2012

Notes (continued)

10.   Going concern statement

As the assets of the Company consist mainly of a portfolio of diversified securities that are readily realisable, the Company has adequate financial resources to meet its liabilities and continue in operational existence for the foreseeable future.  The directors therefore believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.  In reviewing the position as at the date of this announcement, the Board has considered the guidance on this matter issued by the Financial Reporting Council in October 2009.

11.   2012 Financial information

The figures and financial information for 2012 are extracted from the Annual Report and Financial Statements for the year ended 31 December 2012 and do not constitute the statutory accounts for the year.  The Annual Report and Financial Statements includes the Independent Auditor's Report which is unqualified and does not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006.  The Annual Report and Financial Statements have not yet been delivered to the Registrar of Companies.

12.   2011 Financial information

The figures and financial information for 2011 are extracted from the published Annual Report and Financial Statements for the year ended 31 December 2011 and do not constitute the statutory accounts for that year.  The Annual Report and Financial Statements has been delivered to the Registrar of Companies and included the Independent Auditor's Report which was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006.

13.   Annual report and financial statements

The Annual Report and Financial Statements will be posted to shareholders on 12 April 2013 and will be available thereafter on the Company's website (www.hendersonhighincome.com) or from the Company's Registered Office, 201 Bishopsgate, London, EC2M 3AE.

14.    Annual General Meeting

The Annual General Meeting will be held on 14 May 2013 at 12.00 noon at the Company's Registered Office.  The Notice convening the Annual General Meeting will be available on the Company's website from 12 April 2013.

For further information please contact:

Alex Crooke

Portfolio Manager

Henderson High Income Trust plc

Telephone: [phone]

James de Sausmarez

Director and Head of Investment Trusts

Henderson Global Investors

Telephone: [phone]

Sarah Gibbons-Cook

Investor Relations and PR Manager, Investment Trusts

Henderson Global Investors

Telephone: [phone]

- ENDS -

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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