Final Results

RNS Number : 1970S

Henderson High Income Trust PLC

15 March 2016

 

15 March 2016

HENDERSON HIGH INCOME TRUST PLC

Annual Financial Results for the year ended 31 December 2015

This announcement contains regulated information

Performance Highlights:

Total return performance to 31 December 2015 One year % Five years % Benchmark1 0.9 35.3 NAV2 7.6 86.8 Share price 6.6 90.8
2015 2014 NAV per share (debt at par value) 177.47p 173.57p Mid-market price per share 180.50p 177.88p Revenue return per share 9.96p 9.24p Net assets £197.1m £189.0m Dividend for the year 8.90p 8.60p Dividend yield3 4.9% 4.8% Ongoing charge for the year4 0.79% 0.72% Net gearing 22.7% 22.7%

¹The benchmark is a composite of 80% of the FTSE All-Share Index (total return) and 20% of the Merrill Lynch Sterling Non-Gilts Index (total return) rebalanced annually 

² Net asset value per share total return (including dividends reinvested and excluding transaction costs)

³ Based on the dividends paid or recommended for the year and the share price at the year end

⁴ The ongoing charge excludes the performance fee. The charge including the performance fee was 1.42% (2014: 1.59%)

Sources: Morningstar Direct, Henderson, DataStream, AIC. All data is either as at 31 December 2015 or for the year ended 31 December 2015.

Chairman's Statement

Performance

It is particularly pleasing for me this time to be able to report another year of outperformance. Firstly, because this is our Fund Manager David Smith's first report as sole Fund Manager and marks a successful start to this important role. Secondly, because as reported later, this is my last report to you as Chairman and obviously it is satisfying to be able to go out on a good note. Against a challenging market background, David has produced a very commendable outcome for the year of a share price total return of 6.6% compared to our benchmark of only 0.9%. This performance is consistent with that seen during my period as Chairman, as we have significantly outperformed our benchmark over the nine years since I was appointed, with a share price total return of 78% compared to our benchmark's 56% and the FTSE All-Share Index's return of only 47%. Whilst I can claim no personal credit for this performance which is the result of the fine management of David and his predecessor Alex Crooke, it does, in my view, underline the merits of an investment trust company (like ours) with the benefit of a well balanced and independent board. I will leave it to David to explain in his report how he has achieved this performance, but he deserves both our praise and our thanks and the payment to Henderson under our performance-related fee arrangement is again fully justified.

Dividends

At the interim stage I was again delighted to be able to announce a further modest increase of 3.5% in our dividend which was in excess of the then prevailing consumer price inflation rate of 0.4%. Shareholders will know from my previous comments that it is the Board's aspiration to continue gradually increasing the dividend so long as we have confidence that any such increase will be sustainable in the years ahead. In any event, we will continue to keep the level of our dividend under review as the year unfurls and in light of our actual experience and the investment conditions at the time.

Gearing

As I reported in my interim statement, we have issued a £20m fixed rate 19 year unsecured private placement note at a rate of 3.67%. The resultant blend of long and short-term borrowings with fixed and floating rates will provide an important element of security and flexibility for the Company in the future. At the same time we have agreed an extension of our existing loan facility, but for a reduced amount to reflect our new fixed rate borrowings. Despite these moves, there has been no change in the Company's policy on the use of gearing.

Issue of new shares

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 1.7% premium. This has been as a result of a steady demand for our shares in the market and, therefore, we have issued 2,185,078 new shares in the course of the year to meet this demand. This has been within the authority granted to the Board by Shareholders at the last Annual General Meeting and is consistent with our policy of wishing to see the Company grow. This we believe is to the benefit of our existing Shareholders. As we are issuing shares at a premium, NAV is enhanced. The liquidity of the shares is also improved and fixed costs are spread over a wider base. We will again be asking Shareholders to renew this authority at the forthcoming Annual General Meeting.

Board changes

Both Vivian Bazalgette and I will be retiring from the Board on the conclusion of the forthcoming Annual General Meeting. The Company has been very fortunate to have had Vivian as a Director since 2004 and to have benefited from his considerable experience and wise counsel. Those of us lucky enough to have sat around the boardroom table with him have not just benefited from his contribution, but much enjoyed the wry humour with which it has so often been enhanced. It has always been my belief, strengthened by my experience, that serious matters under discussion and important decisions that need to be taken, can often be assisted by an occasional injection of humour. Vivian and other Directors are past masters at injecting such humour and I must thank them all for this and their unfailing support and good sense. At the same time the job has been made much easier by having the support of Alex Crooke and David Smith as our Fund Managers, as well as other members of the Henderson team. It has been a privilege to have been Chairman and, thanks to everyone that I have worked with, it has also been a very enjoyable experience.

I am delighted to announce that my colleagues have chosen Margaret Littlejohns to take over from me as Chairman. They, like me, have come to recognise and appreciate her qualities. Margaret will make an excellent Chairman and will be ably supported by her colleagues and the Henderson team. At the same time the Board has invited Zoe King to become an independent non-executive Director with effect from 1 April 2016. Zoe is currently a director of Smith & Williamson Investment Management Limited, a leading private client manager. Zoe will bring her experience of investment and other relevant matters to the benefit of the Company. You will be asked to elect her at the Annual General Meeting, as well as to re-elect Andrew Bell and I would urge you to join me in doing so.

Prospects and outlook

I highlighted in my last statement that I thought our Fund Manager was going to find markets increasingly challenging and that positive total returns, such as we have enjoyed in recent years, were likely to be much harder to achieve, although there were no apparent reasons to believe that the all-important income part of the return would not be maintained. In the light of the recent market weakness and the various uncertainties, such as 'Brexit' and Chinese GDP, that we face, this is proving to be all too true, although I remain confident that David will rise to the challenges, particularly in regards to income.

I am not going to try and predict the outlook, but when I look back over my rather longer than I care to remember time as an investor, I am struck by three things. Firstly, I have made more money when I have stuck to my longer term view, but taken advantage of any shorter term weakness. Secondly, I have benefited from investing almost exclusively in well run investment trusts which have been able to avoid the ruination of redemptions. And lastly, I have invested predominantly in trusts with an income bias. This Company has been, and will continue to be, one of my core holdings and I look forward to it helping me to enjoy a hopefully long and active retirement.

Fund Manager's Report

Review of the year

Although the FTSE All-Share Index returned just 1.0% during the year, this masked increased volatility within equities. It's hard to believe that the FTSE100 made all-time highs as recently as in April, before turning down during the summer months caused by fears over slowing economic growth in China and other emerging markets. Despite this, the Company performed strongly with the NAV total return of 7.6% versus the benchmark gain of 0.9%.

The oil price fell further during 2015, finishing the year at $35 per barrel, its lowest level since the height of the global financial crisis. In the US, unemployment reached a 40 year low which prompted the Federal Reserve to raise US interest rates for the first time since 2006. Although UK economic growth remained relatively robust, at 1.9% for 2015, expectations of interest rate hikes in the UK were pushed out, with consensus now not anticipating the first rise until 2017. Elsewhere, May saw a surprising outright majority win by the Conservatives at the UK General Election while in July the Chancellor, George Osborne, announced plans to introduce a national living wage, a compulsory minimum wage premium for all staff over 25 years of age.

During the year, the Company benefited from the outperformance of the equity portfolio combined with a positive contribution from gearing. The equity portfolio returned 7.9% compared with the FTSE All-Share Index gain of 1.0%. Commodity prices continued to fall during the year, which significantly impacted both the oil & gas and mining sectors. The portfolio's limited exposure to both sectors aided relative performance. Holdings in Moneysupermarket.com, Hilton Food and housebuilder, Galliford Try contributed positively to performance, with each company producing strong profit growth during the year. Elsewhere, the positions in the global satellite communication company, Inmarsat and Lloyd's insurers Amlin and Brit were beneficial to performance. Inmarsat confirmed the successful launch of its latest satellite, creating the first global high speed mobile broadband network, and announced contracts to provide inflight connectivity to two major airlines. Both Amlin and Brit were acquired by competitors in the period, as the non-life insurance sector consolidated further given the pressure on premium prices.

The fixed income portfolio returned 4.8%, outperforming the 0.7% gain from the Merrill Lynch Sterling Non-Gilts Index. The portfolio's exposure to corporate bonds of large, non-cyclical companies, such as US telecom, Verizon Communications, proved beneficial to performance. UK Government and investment grade corporate bonds significantly outperformed high yield bonds over the year, with the latter impacted by rising credit spreads in the mining and energy sectors, an area in which the bond portfolio has no holdings.

The income return over the year was strong, increasing by 7.8% to 9.96p per share. There was good underlying dividend growth from investments and the revenue account was boosted by a significant amount of special dividends earned. Intermediate Capital, Jupiter Fund Management, Amlin and Brit all returned excess cash to shareholders via special dividends. Whilst we foresee further special dividends this year, they are unlikely to be of a similar level to that earned last year. Strong dividend growth was seen across some of the Company's largest holdings, with BT, Galliford Try and professional publisher RELX (formerly Reed Elsevier) all increasing their dividends at a double digit rate. The Company raised its own full year dividend, for the third year running, to 8.9p, an increase of 3.5%

The Company's gearing level as a percentage of shareholders' funds remained relatively constant during the year (22.7%), however, the mix of borrowing changed. With the coupon rate on long-term debt for investment companies steadily falling, we decided to issue £20m of 19 year loan notes in July, thereby reducing our exposure to short-term bank financing. The attractive 3.67% coupon on these notes should benefit the Company in utilising gearing to enhance total returns in the long-term.

Portfolio activity

Throughout 2015 the Company maintained its preference for equities over bonds with 90% of the investment portfolio in equities. The UK equity market outperformed both Government and corporate bonds during the year and given the attractive yields on equities relative to bonds, this position has been maintained.

In the equity portfolio we increased our holding in the global leading spirit company, Diageo, owner of valuable brands such as Johnny Walker, Smirnoff and Guinness. The management are focused on strengthening the operating performance of this business after a number of years of lacklustre growth and now with improving free cash flow, we believe cash returns to shareholders should increase. New positions in Greene King and the specialist chemical company, Victrex were initiated. Greene King has a high quality estate of food led pub restaurants and post the acquisition of the Spirit Pub Company, we believe the company can deliver good earnings and dividend growth. Victrex manufactures high performance plastics for industrial and medical applications and now that the company has come to the end of its recent investment phase, free cash flow is set to grow which should support increased dividends.

The Company initiated a position in Big Yellow, the UK's leading self-storage company. The company has good quality real estate with exposure to London and the South East and growth should accelerate as a result of an increased number of people moving houses. Together with the new development pipeline, strong earnings growth should be driven by improving rental yields as occupancy increases in their self storage sites.

Sales in the year included positions in engineer IMI and the interdealer broker Tullett Prebon. IMI supplies valves to the oil & gas and mining industries, hence profits are likely to be impacted by the large cuts to capital investment being made by key customers. Tullett Prebon has suffered recently from both structural and cyclical factors and despite the cyclical pressures easing, we don't believe the structural challenges are abating. We also reduced our exposure to the Lloyd's insurance sector following the acquisitions of Catlin, Amlin and Brit.

Within the fixed income portfolio we participated in a new high yield issue by Center Parcs. The bonds were issued at an attractive coupon for a stable business with a strong brand, benefiting from high occupancy and rebooking rates. We also initiated a position in the high yield bonds of US Cable company Charter Communications. The company continues to deliver solid subscriber trends driven by demand for high speed broadband services, while its proposed acquisition of Time Warner Cable will result in the combined entity becoming the second largest cable operator in the US. Elsewhere, we sold our positions in US Cinema operator Regal Entertainment and French utility company, EDF.

Outlook

Fears over the impact on global economic growth from slowing Chinese and emerging market economies are causing equity market weakness. However, in developed markets, economies continue to recover; unemployment is falling and the outlook for the consumer is robust with low interest rates and inflation. We continue to believe that a low to modest economic growth environment will persist. In the UK, with the EU referendum scheduled for June this year, 'Brexit' fears will add further volatility to equity markets as it approaches.

Aggregate market earnings growth has disappointed every year since the global financial crisis but despite this equity markets have been strong, buoyed by low interest rates and Quantitative Easing. This has led to a re-rating of UK equities to a valuation broadly in line with the long-term average. With modest economic growth and low inflation, strong earnings growth in 2016 (the likely driver of equity returns) seems doubtful.

In this environment, it is important to select those companies that have the ability to grow earnings and dividends, as these should outperform. The Company has good exposure to these types of companies, while increased market volatility may present further opportunities. The Company remains well diversified, owning good quality companies we believe have the ability to pay and grow their dividends into the longer term. As a result we remain confident in the dividends of the underlying portfolio.

Principal risks and uncertainties

The Directors have carried out a robust assessment of the principal risks facing the Company. They have drawn up a matrix of risks facing the Company and put in place a schedule of investment limits and restrictions appropriate to the Company's investment objective and policy, in order to mitigate 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 risk

Risk of long term underperformance of the Company against the benchmark and/or peer group. This could result in the shares of the Company trading at a discount and reduced liquidity in the Company's shares.

Risk that borrowing facilities are not sufficient or attractive to enhance income returns and capital growth.

Henderson provides the Directors with regular investment management information including investment performance statistics against the benchmark and the peer group.

The implementation of investment strategy and results of the investment process for which the fund manager is responsible are discussed with Henderson and reviewed at each Board meeting.

The premium/discount and the trading volume of shares are also regularly reviewed, taking account of market conditions.

The Company maintains close contact with its brokers to understand and regulate the supply and demand of shares.

The Company undertakes regular reviews of its borrowing capacity, surveys the market and sources alternative quotes to ensure access to competitive rates.

Market/Financial Risk

Risk that market conditions lead to a fall in the value of the portfolio (magnified by any gearing) and/or a reduction of income. This could result in loss of capital value for shareholders and/or a cut in the dividend payment.

The Directors review the portfolio regularly.

The portfolio is diverse, containing a sufficient range of investments to ensure that no single investment puts undue risk on the sustainability of the income generated by the portfolio or indeed the capital value. Regard is also given to having a broad mix of companies in the portfolio, as well as a spread across a range of economic sectors.

Henderson operates within investment limits and restrictions, including limits for gearing and derivatives. A monthly schedule of current positions against all established limits is reviewed by the Directors and Henderson confirms adherence to them each month. Any particular high risks are highlighted and discussed.

The Directors review the income statement and income forecasts at each meeting and monitor the Company's income reserves.

Operational Risk

Risk of losses through inadequate or failed internal processes, people or systems or through external events. This includes the risk of loss arising from failing to manage key outsourced service providers properly, the risk arising from major disruptions to their businesses and their markets.

Control systems of Henderson are designed and tested to ensure that operational risks are mitigated to an acceptable level.

Business continuity plans are maintained and tested to ensure that, in the event of business disruption, operations can be maintained.

Henderson has introduced cyber security measures to protect against attacks.

Service level agreements are in place with all other key relationships and their controls monitored by Henderson's assurance functions.

The Directors receive a quarterly internal controls report from Henderson.

Legal and Regulatory Risk

Risk that a breach of or a change in laws and regulations could materially affect the viability and appeal of the Company, in particular Section 1158 which exempts capital gains from being taxed within investment trusts.

The Company's legal and regulatory obligations are delegated to Henderson Secretarial Services Ltd and are monitored by Henderson's Compliance and Audit functions.

Henderson regularly reviews and confirms compliance with Section 1158 to protect the Company's status as an Investment Trust.

Henderson actively and constructively engages with regulators, tax and industry bodies in order to understand and influence future developments.

The Board considers these risks to have remained unchanged throughout the year under review.

Related party transactions

The Company's transactions with related parties in the year were with the Directors and Henderson. There have been no material transactions between the Company and its Directors during the year and the only amounts paid to them were in respect of remuneration for which there were no outstanding amounts payable at the year end. In relation to the provision of services by Henderson, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services there have been no material transactions with Henderson affecting the financial position of the Company during the year under review.

Statement of Directors' Responsibilities

Statement under DTR 4.1.12

Each of the Directors confirms that, to the best of his or her knowledge:

•     the financial statements, which have been 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

•     the Strategic Report 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, MBE

Chairman

15 March 2016

 

 

Income Statement

	Year ended 31 December 2015			Year ended 31 December 2014
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Gains on investments held at fair value through profit or loss (note 2)	-	5,376	5,376	-	5,549	5,549
Income from investments held at fair value through profit or loss (note 3)	12,067	-	12,067	10,758	-	10,758
Other interest receivable and similar income (note 4)	27	-	27	126	-	126
	----------	----------	----------	----------	----------	----------
Gross revenue and capital gains	12,094	5,376	17,470	10,884	5,549	16,433
Management and performance fees (note 5)	(469)	(1,949)	(2,418)	(387)	(2,139)	(2,526)
Other administrative expenses	(385)	-	(385)	(353)	-	(353)
	----------	----------	----------	----------	----------	----------
Net return on ordinary activities before finance costs and taxation	11,240	3,427	14,667	10,144	3,410	13,554
Finance costs	(206)	(616)	(822)	(150)	(449)	(599)
	----------	----------	----------	----------	----------	----------
Net return on ordinary activities before taxation	11,034	2,811	13,845	9,994	2,961	12,955
Taxation on net return on ordinary activities	(97)	67	(30)	(177)	148	(29)
	----------	----------	----------	----------	----------	----------
Net return on ordinary activities after taxation	10,937	2,878	13,815	9,817	3,109	12,926
	======	======	======	======	======	======
Return per ordinary share (note 6)	9.96p	2.62p	12.58p	9.24p	2.93p	12.17p
	======	======	======	======	======	======
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 other comprehensive income other than those items recognised in the Income Statement.

 

Statement of Changes in Equity

Year ended 31 December 2015	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 1 January 2015	5,444	90,198	26,302	61,703	5,340	188,987
Net return on ordinary shares after taxation	-	-	-	2,878	10,937	13,815
Issue of new shares	109	3,840	-	-	-	3,949
Fourth interim dividend (2.175p per share) for the year ended 31 December 2014 paid 30 January 2015	-	-	-	-	(2,368)	(2,368)
First interim dividend (2.175p per share) for the year ended 31 December 2015 paid 30 April 2015	-	-	-	-	(2,378)	(2,378)
Second interim dividend (2.175p per share) for the year ended 31 December 2015 paid 31 July 2015	-	-	-	-	(2,383)	(2,383)
Third interim dividend (2.275p per share) for the year ended 31 December 2015 paid 30 October 2015	-	-	-	-	(2,511)	(2,511)
	--------	---------	---------	---------	---------	----------
At 31 December 2015	5,553	94,038	26,302	64,581	6,637	197,111
	=====	=====	=====	=====	=====	======
Year ended 31 December 2014	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 1 January 2014	5,166	80,754	26,302	58,594	4,532	175,348
Net return on ordinary shares after taxation	-	-	-	3,109	9,817	12,926
Issue of new shares	278	9,444	-	-	-	9,722
Fourth interim dividend (2.125p per share) for the year ended 31 December 2013 paid 31 January 2014	-	-	-	-	(2,186)	(2,186)
First interim dividend (2.125p per share) for the year ended 31 December 2014 paid 30 April 2014	-	-	-	-	(2,226)	(2,226)
Second interim dividend (2.125p per share) for the year ended 31 December 2014 paid 31 July 2014	-	-	-	-	(2,257)	(2,257)
Third interim dividend (2.175p per share) for the year ended 31 December 2014 paid 31 October 2014	-	-	-	-	(2,340)	(2,340)
	--------	---------	---------	---------	---------	----------
At 31 December 2014	5,444	90,198	26,302	61,703	5,340	188,987
	=====	=====	=====	=====	=====	======

 

Statement of Financial Position

	At 31 December 2015 £'000	At December 2014 £'000
Investments held at fair value through profit or loss	241,912	231,802
	----------	----------
Current assets
Debtors	1,349	1,362
Cash at bank and in hand	1,223	1,860
	----------	----------
	2,572	3,222
Creditors: amounts falling due within one year	(27,577)	(46,037)
	----------	----------
Net current liabilities	(25,005)	(42,815)
	----------	----------
Creditors: amounts falling due after more than one year	(19,796)	-
	----------	----------
Net assets	197,111	188,987
	======	======
Capital and reserves
Share capital	5,553	5,444
Share premium account	94,038	90,198
Capital redemption reserve	26,302	26,302
Other capital reserves	64,581	61,703
Revenue reserve	6,637	5,340
	----------	----------
Total shareholders' funds	197,111	188,987
	======	======
Net asset value per ordinary share (basic and diluted) (note 7)	177.47p	173.57p
	======	======

Cash Flow Statement

	2015	2014
	£'000	£'000
		(restated - see note 1)
Cash flows from operating activities
Net return on ordinary activities before taxation	13,845	12,955
Add back: finance costs	822	599
Less: gains on investments held at fair value through profit or loss	(5,376)	(5,549)
Withholding tax on dividends deducted at source	(29)	(29)
Taxation recovered	1	15
Decrease in prepayments and accrued income	12	98
Increase/(decrease) in accruals and deferred income	121	(458)
	----------	----------
Net cash inflow from operating activities	9,396	7,631
Cash flows from investing activities
Sales of investments held at fair value through profit or loss	39,240	35,622
Purchases of investments held at fair value through profit or loss	(43,905)	(46,511)
	----------	----------
Net cash outflow from investment activities	(4,665)	(10,889)
Cash flows from financing activities
Issue of ordinary share capital	3,949	9,722
Equity dividends paid	(9,640)	(9,009)
(Repayment)/drawdown of loans	(18,664)	4,799
Issue of private placement notes	19,796	-
Interest paid	(822)	(590)
	----------	----------
Net cash outflow from financing activities	(5,381)	4,922
Net (decrease)/increase in cash and cash equivalents	(650)	1,664
Cash and cash equivalents at beginning of year	1,860	184
Exchange movements	13	12
	----------	----------
Cash and cash equivalents at end of year	1,223	1,860
Comprising:
Cash at bank	1,223	1,860
	======	======

 

Notes to Financial Statements:

1.  Basis of accounting

The Company is a registered investment company as defined in Section 833 of the Companies Act 2006. It operates in the United Kingdom and is registered at 201 Bishopsgate, London EC2M 3AE.

The financial statements have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland, which is effective for periods commencing on or after 1 January 2015, and with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ("the SORP") issued in November 2014. The Company has early adopted the amendments to FRS102 in respect of fair value hierarchy disclosures as published in March 2016.

Following the application of the revised reporting standards, there have been no significant changes to the accounting policies compared to those set out in the Company's Annual Report for the year ended 31 December 2014.

There has been no impact on the Company's Income Statement, Statement of Financial Position (previously called the Balance Sheet) or Statement of Changes in Equity (previously called the Reconciliation of Movements in Shareholders' Funds) for periods previously reported. The Cash Flow Statement previously reported has been restated to comply with the new disclosure requirements of the revised reporting standard.

The accounts have been prepared under the historical cost basis except for the measurement at fair value of investments. In applying FRS102, financial instruments have been accounted for in accordance with Section 11 and 12 of the standard. All of the Company's operations are of a continuing nature.

2.  Gains on investments held at fair value through profit or loss

	2015 £'000	2014 £'000
Gains on sale of investments based on historical cost	8,721	5,633
Revaluation gains recognised in previous years	(7,551)	(5,145)
	---------	---------
Gains on investments sold in the year based on carrying value at the previous statement of financial position date	1,170	488
Net movement on revaluation of investments	4,277	5,126
Exchange losses	(71)	(65)
	---------	---------
	5,376	5,549
	=====	=====

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

	2015 £'000	2014 £'000
UK dividend income - listed	8,521	7,138
UK dividend income - special dividends	761	327
	-------	-------
	9,282	7,465
Interest income - listed	1,236	1,401
Overseas dividend income - listed	1,549	1,892
	-------	-------
	2,785	3,293
	-------	-------
	12,067	10,758
	=====	=====

4.   Other interest receivable and similar income

	2015 £'000	2014 £'000
Bank interest	-	1
Underwriting commission (allocated to revenue)	27	44
Option premium income	-	81
	-----	-----
	27	126
	===	===

5.   Management and performance fees

	Revenue return £'000	2015  Capital return £'000	Total £'000	Revenue return £'000	2014  Capital return £'000	Total £'000
Management fee	469	703	1,172	387	580	967
Performance fee	-	1,246	1,246	-	1,559	1,559
	------	-------	-------	------	-------	-------
	469	1,949	2,418	387	2,139	2,526
	===	====	====	===	====	====

A performance fee of £1,246,000 was earned during the year (2014: £1,559,000). 

6.  Return per ordinary share

The return per ordinary share figure is based on the gains attributable to the ordinary shares of £13,815,000 (2014: £12,926,000) and on the 109,794,009 weighted average number of ordinary shares in issue during the year (2014: 106,237,900).

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:

	2015 £'000	2014 £'000
Net revenue return	10,937	9,817
Net capital return	2,878	3,109
	----------	----------
Total return	13,815	12,926
	======	======
Weighted average number of ordinary shares	109,794,009	106,237,900
Revenue return per ordinary share	9.96p	9.24p
Capital return per ordinary share	2.62p	2.93p
	----------	----------
Total return per ordinary share	12.58p	12.17p
	======	======

 

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 £197,111,000 (2014: £188,987,000) and on the 111,067,365 ordinary shares in issue at 31 December 2015 (2014: 108,882,287 ordinary shares).The movements during the year of the assets attributable to the ordinary shares were as follows:

	2015 £'000	2014 £'000
Net assets at start of year	188,987	175,348
Total net return on ordinary activities after taxation	13,815	12,926
Dividends paid on ordinary shares in the period	(9,640)	(9,009)
Issue of ordinary share less issue costs	3,949	9,722
	----------	----------
	197,111	188,987
	======	======

8.   Dividends

		£'000
Revenue available for distribution by way of dividend for the year		10,937
First interim dividend (2.175p) paid on 30 April 2015		(2,378)
Second interim dividend (2.175p) paid on 31 July 2015		(2,383)
Third interim dividend (2.275p) paid on 30 October 2015		(2,511)
Fourth interim dividend (2.275p) paid on 29 January 2016		(2,527)
Undistributed revenue for Section 1158 purposes		--------
		1,138
		=====

All dividends have been paid or will be paid out of revenue profits.

9.   Going concern statement

The assets of the Company consist of securities that are readily realisable and, accordingly, the Directors believe that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. The Company's Shareholders are asked every five years to vote for the continuation of the Company. An ordinary resolution to this effect was passed by the Shareholders at the annual general meeting held on 5 May 2015. Having assessed these factors, the principal risks and other matters discussed in connection with the viability statement, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

10.   2015 Financial information

The figures and financial information for 2015 are extracted from the Annual Report and Financial Statements for the year ended 31 December 2015 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.

11.   2014 Financial information

The figures and financial information for 2014 are extracted from the Annual Report and Financial Statements for the year ended 31 December 2014 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. 

12.   Annual Report and Financial Statements

The Annual Report and Financial Statements for the year ended 31 December 2015 will be posted to Shareholders in late March 2016 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.

13.    Annual general meeting

The annual general meeting will be held on Tuesday 3 May 2016 at 12.00 noon at the Company's registered office, 201 Bishopsgate, London EC2M 3AE. The notice convening the annual general meeting will shortly be available on the Company's website www.hendersonhighincome.com 

For further information please contact:

David Smith

Fund 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]

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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