Final Results - Year Ended 31 December 1999

Henderson High Income Trust PLC 24 February 2000 HENDERSON HIGH INCOME TRUST plc Unaudited Preliminary Results for the year ended 31 December 1999 Highlights * Total dividend increased by 2.9% to 7.10p Extracts from the Chairman's Statement: Asset Performance The year under review started with a background that was generally supportive of equities; interest rates were falling and the economy was rebounding. The valuation of the market was favourable against bonds and many of the Company's key holdings made solid progress; the Company's net asset value total return was 8.2% at the interim stage of the year. However the second half of the year was radically different. Economic growth continued to accelerate and the Bank of England feared that the relaxation of monetary policy of the first half would herald a return of inflation. Interest rates were increased in the second half of the year, prompting a sharp rotation in the UK equity market as investors rediscovered growth and especially technology stocks. The majority of stocks made little progress last year; it was the explosive performance of technology and telecoms that pushed the indices to new highs in the latter stage of the year. The Company has a primary objective to produce a high level of income and it has been difficult for the portfolio to be fully weighted in growth stocks and especially those not paying dividends. It was largely the lack of technology investments that produced the disappointing asset performance last year against the FTSE All-Share Index. -2- Earnings and Dividends The earnings per share of the Company increased by 6.0% from 7.20p to 7.63p. The number of special dividends received from the investments increased last year and will remain a feature of the market in the future. Companies are under pressure to restructure and return surplus cash to shareholders. The underlying dividend growth of the market was 6% in 1999. The board has declared a fourth interim dividend of 1.80p per share making a total of 7.10p for the year. This reflects a rise of 2.9% against the previous year and compares with a rise of 1.6% in the Retail Prices Index. The Company's revenue reserve has risen to £1.7 million, providing a solid foundation to the future distributions. Share Buy-Backs A resolution will be put to the forthcoming AGM to authorise the Company to repurchase up to 14.99% of its shares, over the course of the next year. Last year we were advised that, for the Company to maintain its status as an investment company, only the revenue reserve could be used for share repurchases. Strong revenue reserves are a great asset for an income orientated trust and the Board took a cautious view towards share repurchases. The recent change in the law allowing capital reserves to be used for buy-backs will allow the Board to be more flexible and repurchase shares when deemed to be clearly in the remaining shareholders' interests. -3- Prospects The UK economy is set to grow strongly, although the Bank of England has indicated that interest rates need to rise further to maintain a control on inflation. The bond markets have corrected to a level that reflects this scenario while the equity market, which has fallen significantly this year, offers good opportunities outside technology and telecom stocks. While technology is changing the way companies and consumers conduct their business, it is too early to identify the winners and losers. Share prices in this area are clearly not justified by conventional valuation techniques and may be prone to a setback. For companies to be good long term investments they must ultimately make profits and generate cash. I am of the firm opinion that common sense will return and the advantages of high yields and low valuations will be recognised to our benefit. The companies within the portfolio have solid fundamental business strategies and have rarely been rated so lowly against the market. Sir Anthony Beaumont-Dark Chairman - 4 - HENDERSON HIGH INCOME TRUST plc Unaudited Preliminary Results for the year ended 31 December 1999 Statement of Total Return (incorporating the revenue account) for the year ended 31 December 1999 (unaudited) (audited) Year ended 31 Year ended 31 December 1999 December 1998 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains - 29,176 29,176 - 5,471 5,471 from investments Income from fixed asset 5,193 - 5,193 5,243 - 5,243 investments Other interest receivable and 38 - 38 147 - 147 similar income ------ ----- ----- ------ ----- ------ Gross revenue and 5,231 29,176 34,407 5,390 5,471 10,861 capital gains Management fee (421) (211) (632) (373) (187) (560) Other administrative (148) - (148) (144) - (144) expenses ------ ----- ----- ------ ----- ------ Net return on ordinary activities before 4,662 28,965 33,627 4,873 5,284 10,157 interest payable and taxation Interest payable (75) (75) (150) (32) (32) (64) ------ ----- ----- ------ ----- ------ Net return on ordinary activities before 4,587 28,890 33,477 4,841 5,252 10,093 taxation Taxation on net return on ordinary activities (573) 87 (486) (765) 68 (697) ------ ----- ----- ------ ----- ------ Net return on ordinary activities after 4,014 28,977 32,991 4,076 5,320 9,396 taxation Ordinary dividends Paid, declared and (3,736) - (3,736) (3,630) - (3,630) proposed ------ ----- ----- ------ ----- ------ Transfer to reserves 278 28,977 29,255 446 5,320 5,766 ------ ----- ----- ------ ----- ------ Return per ordinary 7.63p 55.09p 62.72p 7.75p 10.11p 17.86p share The revenue columns of this statement represent the revenue accounts of the Company. This statement has been prepared in order to comply with the Companies Acts. However, a proforma statement of total return presents the results for the year after eliminating the risk of appearing to incorporate certain gains more than once. Certain accumulated capital gains, located in a subsidiary liquidated during the year, had already been recognised in group accounts in prior years, but could only be recognised in the Company's accounts on liquidation of the subsidiary. The proforma statement removes those gains from the current year in order to present a more meaningful comparison with the preceding year's group results. Further explanation is given in note 1 on page 6. - 5 - HENDERSON HIGH INCOME TRUST plc Unaudited Preliminary Results for the year ended 31 December 1999 Proforma Statement of Total Return (incorporating the revenue account) for the year ended 31 December 1999 (unaudited) (audited) Year ended 31 Year ended 31 December 1999 December 1998* Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains - 173 173 - 5,469 5,469 from investments Income from fixed asset 5,193 - 5,193 4,953 - 4,953 investments Other interest receivable and 38 - 38 149 - 149 similar income ------ ----- ----- ------ ----- ------ Gross revenue and 5,231 173 5,404 5,102 5,469 10,571 capital gains Management fee (421) (211) (632) (373) (187) (560) Other administrative (148) - (148) (149) - (149) expenses ------ ----- ----- ------ ----- ------ Net return/(loss) on ordinary activities 4,662 (38) 4,624 4,580 5,282 9,862 before interest payable and taxation Interest payable (75) (75) (150) (32) (32) (64) ------ ----- ----- ------ ----- ------ Net return/(loss) on ordinary activities 4,587 (113) 4,474 4,548 5,250 9,798 before taxation Taxation on net return/(loss) on (573) 87 (486) (762) 68 (694) ordinary activities ------ ----- ----- ------ ----- ------ Net return/(loss) on ordinary activities 4,014 (26) 3,988 3,786 5,318 9,104 after taxation Ordinary dividends Paid, declared and (3,736) - (3,736)(3,630) - (3,630) proposed ------ ----- ----- ------ ----- ------ Transfer to reserves 278 (26) 252 156 5,318 5,474 ------ ----- ----- ------ ----- ------ Return per ordinary 7.63p (0.05p) 7.58p 7.20p 10.11p 17.31p share The revenue columns of this statement represent the revenue accounts of the Company (1998: Group). *The comparative figures for the year ended 31 December 1998 represent the Statement of Total Return for the Group (see note 1 on page 6). - 6 - HENDERSON HIGH INCOME TRUST plc Unaudited Preliminary Results for the year ended 31 December 1999 Summary of Net Assets* at 31 December 1999 (unaudited) (audited) (audited) Company Group* 31 December 31 December 31 December 1999 1998 1998 £'000 £'000 £'000 Fixed asset investments Listed at market value in 97,139 95,787 95,787 Great Britain Subsidiary undertaking - 6,205 - --------- ----------- --------- 97,139 101,992 95,787 Net current liabilities (4,516) (38,624) (3,407) --------- ----------- --------- - Total assets less current 92,623 63,368 92,380 liabilities (1) (1) (1) Provisions for liabilities and charges --------- ----------- ----------- Total net assets 92,622 63,367 92,379 ======= ======= ======= Net asset value per 176.1p 120.5p 175.6p ordinary share ======= ======= ====== Number of ordinary shares 52,603,865 52,603,865 52,603,865 in issue * The Company's remaining subsidiary went into liquidation during the year and therefore no Group figures are shown in respect of 1999. Notes : 1. Proforma Statement of Total Return The Company's remaining subsidiary, Sceneuser Limited ('Sceneuser') went into liquidation during the year and therefore no group exists at 31 December 1999. In order to comply with the requirements of the Companies Acts, the comparative figures presented are those of the parent Company. In accordance with Financial Reporting Standard 6 'Accounting for Business Combinations' Sceneuser was included in the balance sheet at 31 December 1998 at the nominal value of the shares issued under the Scheme of Arrangement to effect the merger with Henderson Highland Trust plc ('Highland') on 23 April 1997. The effect of this is to risk confusion by appearing to overstate total capital gains from investments in the Statement of Total Return for the current year, in comparison with the results for the preceding year. For this reason a proforma Statement of Total Return is presented on page 5 which, in the opinion of the directors, shows a more meaningful and useful comparison between the two years. A group summary of net assets for 1998 is also included which, in the opinion of the directors, gives a more meaningful and useful comparison of the assets and liabilities. - 7 - HENDERSON HIGH INCOME TRUST plc Unaudited Preliminary Results for the year ended 31 December 1999 2. Return per Ordinary Share Revenue return per ordinary share is based on the earnings attributable to the ordinary shares of £4,014,000 (1998: £4,076,000) and on the 52,603,865 shares in issue during the year 1998: 52,603,865). Capital return per ordinary share is based on the net capital gains for the year of £28,977,000 (1998: £5,320,000) and on the 52,603,865 shares in issue during the year (1998: 52,603,865). Capital return per ordinary share in the proforma Statement of Total Return is based on the net capital losses for the year of £26,000 (1998: gains of £5,318,000) and on the 52,603,865 shares in issue during the year (1998: 52,603,865). 3. 1999 Accounts The preliminary figures for the year ended 31 December 1999 are an extract from the latest accounts of the Company. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 4. 1998 Accounts The figures and financial information for the year ended 31 December 1998 are extracted from the latest published accounts of the Group and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain statements under either section 237(2) or 237(3) of the Companies Act 1985. 5. Dividend A fourth interim dividend of 1.80p (1998: 1.75p) per ordinary share will be paid on 28 April 2000 to shareholders on the register on 17 March 2000. 6. Annual Report and Annual General Meeting The full annual report and accounts will be posted to shareholders in March and copies will be available from the Secretary at the Company's Registered Office, 3 Finsbury Avenue, London EC2M 2PA. The Annual General Meeting will be held on 26 April 2000. For further information please contact : Alex Crooke or Vicki Staveacre/Martin Wade Portfolio Manager The Press Office Henderson High Income Trust plc Henderson Investors Telephone: 0171 410 4447 Telephone: 0171 410 4222 Norman Brown Client Service Director Henderson High Income Trust plc Telephone: 0171 410 3185

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