Interim Results
Henderson High Income Trust PLC
17 August 2000
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
Highlight:
* Reconstruction proposals approved by shareholders.
The Chairman's Statement:
Assets
In my annual report to shareholders in March this year, I stated that
technology shares had reached a point where they were prone to a serious
setback. Share prices were based purely on hope and divorced from all
conventional valuation techniques. From March to June this year, Technology
and Telecommunication stocks around the world did indeed fall sharply. The
trigger for this change in the market is difficult to define but clearly a
mixture of rising interest rates and an imbalance in liquidity, with too many
new issues, were key factors. Since March many traditional companies in
sectors such as Tobacco, Financials, Oils and Utilities have fared better and
the ridiculous share price falls of last year have been reversed.
As this Trust aims to invest in a balanced portfolio of stocks, we weathered
the volatility in the first half of 2000 well. The net asset value total
return of the Company attributable to the ordinary shares was 2.3% compared
with a decrease of 5.5% for the FTSE All-Share Index, both figures including
the reinvestment of income.
Capital Reorganisation
The board of directors wrote to all shareholders in July outlining proposals
for a capital reconstruction of the Trust. The directors believe that the
benefits of these proposals will be a substantially improved yield and expect
to be able to declare total net dividends amounting to not less than 9.9p in
respect of the twelve months ending 30 June 2001; also that both new classes
of share will be in greater demand than the current ordinary shares. As a
consequence the directors believe that there should, over time, be a narrowing
of the aggregate discount to net asset value at which the shares have traded
in the past.
I am pleased that shareholders have voted at the EGM today to approve these
proposals which will be implemented over the coming months.
-2-
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
Earnings and Revenue
The earnings of the Company amounted to 3.41p over the first half of this
year. This represents a fall compared to last year because there were fewer
special dividends paid out in this year to date. In order to comply with the
Companies Acts, the accounts within this interim statement include certain
capital gains from a liquidated subsidiary, which many shareholders may find
somewhat confusing. I would draw your attention to the Proforma Statement of
Total Return, which presents a more meaningful comparison with last year's
interim accounts.
Following the implementation of the reorganisation proposals, it is expected
that the first dividend at a new higher quarterly rate of 2.475p will be the
third interim dividend, paid in January 2001.
Prospects
The UK seems set for a period of broadly stable interest rates and reasonable
levels of economic growth. The implication of this interest rate view is that
investors' concerns about the economic cycle and a hard landing should peter
out, leaving a positive background for equities. Valuations across many
sectors in the UK are not demanding despite the move in share prices since
March.
The Company's investment policy of holding a balanced portfolio of bonds and
equities has produced a satisfactory performance during the first half of this
year. The focus remains on continuing to provide a high level of income
without sacrificing prospects for achieving capital growth.
Sir Anthony Beaumont-Dark
Chairman
16 August 2000
- 3 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
Statement of Total Return (incorporating the revenue account)
for the half year ended 30 June 2000
(Unaudited) (Unaudited and (Audited and
Half year ended restated *) restated *)
30 June 2000 Half year ended Year ended
30 June 1999 31 December 1999
Revenue CapitalTotal RevenueCapitalTotal RevenueCapitalTotal
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital - 246 246 - 40,800 40,800 - 29,176 29,176
gains from
investments
Income from fixed 2,137 - 2,137 2,570 - 2,570 4,770 - 4,770
asset investments
Other interest
receivable and
similar income 56 - 56 6 - 6 38 - 38
----- ----- ----- ----- ----- ----- ----- ----- -----
Gross revenue and 2,193 246 2,439 2,576 40,800 43,376 4,808 29,176 33,984
capital gains
Management fee (223) (111) (334) (211) (106) (317) (421) (211) (632)
Other (59) - (59) (71) - (71) (148) - (148)
administrative
expenses
----- ----- ----- ----- ----- ----- ----- ----- ----
Net return on
ordinary activities
before interest 1,911 135 2,046 2,294 40,694 42,988 4,239 28,965 33,204
payable and
taxation
Interest payable (23) (23) (46) (35) (35) (70) (75) (75) (150)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net return on
ordinary activities
before taxation 1,888 112 2,000 2,259 40,659 42,918 4,164 28,890 33,054
Taxation on net
return on ordinary
activities (93) 40 (53) (72) - (72) (150) 87 (63)
----- ----- ----- ----- ----- ----- ----- ----- ----
Net return on
ordinary activities
after taxation 1,795 152 1,947 2,187 40,659 42,846 4,014 28,977 32,991
Dividends - ordinary
shares
Paid and proposed (1,894) - (1,894)(1,841) - (1,841)(3,736) - (3,736)
(note 5)
----- ----- ----- ----- ----- ----- ----- ----- -----
Transfer (from)/to (99) 152 53 346 40,659 41,005 278 28,977 29,255
reserves
----- ----- ----- ----- ----- ----- ----- ----- -----
Return per ordinary 3.41p 0.29p 3.70p 4.16p 77.29p 81.45p 7.63p 55.09p62.72p
share
----- ----- ----- ----- ----- ----- ---- ----- -----
The revenue columns of this statement represent the revenue accounts of the
Company.
*Restated for the change in accounting policy (see note 2).
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
half year ended 30 June 1999 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 ended 31 December 1999, 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 of total return removes those gains from the half year
ended 30 June 1999 by including the group results, in order to present a more
meaningful comparison. Further explanation is given in note 1.
- 4 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
Proforma Statement of Total Return (incorporating the revenue account)
for the half year ended 30 June 2000
(Unaudited) Group (Audited and
Half year ended (Unaudited and restated *)
30 June 2000 restated *) Year ended
Half year ended 31 December 1999
30 June 1999
RevenueCapitalTotal RevenueCapitalTotal RevenueCapitalTotal
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital - 246 246 - 5,547 5,547 - 173 173
gains from
investments
Income from 2,137 - 2,137 2,570 - 2,570 4,770 - 4,770
fixed asset
investments
Other interest
receivable and 56 - 56 6 - 6 38 - 38
similar income
----- ----- ----- ----- ----- ----- ----- ----- -----
Gross revenue 2,193 246 2,439 2,576 5,547 8,123 4,808 173 4,981
and capital gains
Management fee (223) (111) (334) (211) (105) (316) (421) (211) (632)
Other (59) - (59) (71) - (71) (148) - (148)
administrative
expenses
----- ----- ----- ----- ----- ----- ----- ----- -----
Net return/(loss)
on ordinary
activities
before interest 1,911 135 2,046 2,294 5,442 7,736 4,239 (38) 4,201
payable and taxation
Interest payable (23) (23) (46) (35) (35) (70) (75) (75) (150)
---- ----- ----- ----- ----- ----- ----- ----- -----
Net return/(loss)
on ordinary
activities
before taxation 1,888 112 2,000 2,259 5,407 7,666 4,164 (113) 4,051
Taxation on net
return/(loss) on (93) 40 (53) (72) 42 (30) (150) 87 (63)
ordinary
activities
----- ----- ----- ----- ----- ----- ----- ----- -----
Net return/(loss)
on ordinary
activities
after taxation 1,795 152 1,947 2,187 5,449 7,636 4,014 (26) 3,988
Dividends
- ordinary shares
Paid and
proposed (1,894) - (1,894) (1,841) - (1,841) (3,736) - (3,736)
(note 5)
----- ----- ----- ----- ----- ----- ----- ----- -----
Transfer (from)/ (99) 152 53 346 5,449 5,795 278 (26) 252
to reserves
----- ----- ----- ----- ----- ----- ----- ----- -----
Return per
ordinary 3.41p 0.29p 3.70p 4.16p 10.36p 14.52p 7.63p (0.05p) 7.58p
share
----- ----- ----- ----- ----- ----- ----- ----- -----
The revenue columns of this statement represent the revenue accounts of the
Company (half year ended 30 June 1999: Group)
*Restated for the change in accounting policy (see note 2).
- 5 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
Balance Sheet
as at 30 June 2000
Group
(Unaudited) (Unaudited)(Unaudited) (Audited)
30 June 30 June 30 June 31 December
2000 1999 1999 1999
£'000 £'000 £'000 £'000
Fixed asset investments
Listed in the United 92,468 100,551 100,551 97,139
Kingdom
--------- -------- -------- ---------
Current assets
Debtors 1,252 7,481 1,277 1,214
Cash at bank and short 2,006 114 122 1,326
term deposits
--------- -------- -------- ---------
3,258 7,595 1,399 2,540
Creditors : amounts
falling due within
one year (3,049) (3,772) (3,774) (7,056)
--------- -------- -------- ---------
Net current 209 3,823 (2,375) (4,516)
assets/(liabilities)
--------- -------- -------- ---------
Total assets less current 92,677 104,374 98,176 92,623
liabilities
Provision for liabilities (2) (2) (2) (1)
and charges
--------- -------- -------- ---------
Total net assets 92,675 104,372 98,174 92,622
======= ======= ======= =======
Capital and reserves
Called-up share capital:
ordinary shares 13,151 13,151 13,151 13,151
Capital reserves
Share premium 20,716 20,716 20,716 20,716
Realised reserves 43,570 45,671 39,463 40,372
Unrealised reserves 13,641 23,070 23,070 16,687
Revenue reserve 1,597 1,764 1,774 1,696
--------- -------- -------- ---------
Shareholders' funds 92,675 104,372 98,174 92,622
======= ======= ======= =======
Net asset value per 176.18p 198.41p 186.63p 176.07p
ordinary share
------- ------ ------ ------
The comparative figures for the half year ended 30 June 1999 comprise the
balance sheets of both the Company and the Group as at that date.
- 6 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
Cash Flow Statement
for the half year ended 30 June 2000
(Unaudited) (Unaudited) (Audited
and
Restated*)
Half year Half year Year ended
ended ended
30 June 30 June 31 December
2000 1999 1999
£'000 £'000 £'000
Net cash inflow from operating 1,613 2,217 3,991
activities
Net cash outflow from servicing of (48) (69) (125)
finance
Net tax (paid)/recovered - (52) 47
Net cash inflow/(outflow) from 6,009 1,722 (1,020)
financial investment
Equity dividends paid (1,894) (1,841) (3,682)
---------- ---------- -----------
Net cash inflow before financing 5,680 1,977 (789)
Net cash (outflow)/inflow from (5,000) (1,986) 1,994
financing
---------- ---------- -----------
Increase/(decrease) in cash 680 (9) 1,205
---------- ---------- -----------
Reconciliation of operating revenue to net cash inflow from
operating activities
Net revenue before interest 1,911 2,294 4,239
payable and taxation
(Increase)/decrease in accrued (48) 162 176
income
Decrease/(increase) in debtors - 4 (5)
(Decrease)/increase in creditors (29) (6) 7
Scrip dividends (9) - -
Tax deducted at source (101) (132) (215)
Management fee charged to capital (111) (105) (211)
---------- ---------- -----------
1,613 2,217 3,991
---------- ---------- -----------
Reconciliation of net cash flow to movement in net funds/(debt)
Increase/(decrease) in cash 680 (9) 1,205
Net repayment/(drawdown) of loans 5,000 1,986 (1,994)
---------- ---------- -----------
Change in net funds/(debt) 5,680 1,977 (789)
resulting from cash flows
Exchange movements - - (2)
---------- ---------- -----------
Movement in net funds/(debt) in 5,680 1,977 (791)
the period
Net debt at the beginning of the (3,674) (2,883) (2,883)
period
---------- ---------- -----------
Net funds/(debt) at the end of the 2,006 (906) (3,674)
period
---------- ---------- -----------
Represented by:
Cash at bank and short term 2,006 114 1,326
deposits
Debt falling due within one year - (1,020) (5,000)
---------- ---------- -----------
2,006 (906) (3,674)
---------- ---------- -----------
*Restated for the change in accounting policy (see note 2).
- 7 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
Notes :
1.Proforma Statement of Total Return
The Company's remaining subsidiary, Sceneuser Limited ('Sceneuser') went
into liquidation during 1999 and therefore no group existed at 31 December
1999 or 30 June 2000. 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 half year ended 30 June 1999, in
comparison with the results for the current period. For this reason a
proforma Statement of Total Return is presented which, in the opinion of
the directors, shows a more meaningful and useful comparison between the
three periods. A group balance sheet as at 30 June 1999 is also included
which, in the opinion of the directors, gives a more meaningful and useful
comparison of the assets and liabilities.
2.Change in accounting policy
In accordance with Financial Reporting Standard 16 Current Taxation ('FRS
16 '), which became effective for accounting periods ending on or after 23
March 2000, franked investment income is now shown net of the related tax
credits. The comparative figures for the half year ended 30 June 1999 and
the year ended 31 December 1999 have been restated accordingly. Adoption of
FRS 16 has no effect on the revenue or capital returns per ordinary share,
nor on the net asset value per ordinary share.
3.Return per ordinary share
Revenue return per ordinary share is based on the earnings attributable to
the ordinary shares of £1,795,000 (30 June 1999: £2,187,000; year ended 31
December 1999: £4,014,000) and on 52,603,865 ordinary shares in issue at 30
June 2000 (30 June 1999 and 31 December 1999: 52,603,865).
Capital return per ordinary share is based on the net capital gains for the
period of £152,000 (30 June 1999: £40,659,000; 31 December 1999:
£28,977,000) and on the 52,603,865 ordinary shares in issue at 30 June 2000
(30 June 1999 and 31 December 1999: 52,603,865).
4.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 £92,675,000 (30 June 1999:
£104,372,000; 31 December 1999: £92,622,000) and on the 52,603,865 ordinary
shares in issue at 30 June 2000 (30 June 1999 and 31 December 1999:
52,603,865)
5.Dividends
A first interim dividend of 1.80p (1999: 1.75p) was paid on 31 July 2000.
A second interim dividend of 1.80p (1999: 1.75p) has been declared payable
on 31 October 2000 to shareholders registered at the close of business on
15 September 2000.
- 8 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2000
6.Accounts for the year ended 31 December 1999
The figures and financial information for the year ended 31 December 1999
are extracted from the latest published accounts of the Company 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 include a statement under either
section 237(2) or section 237(3) of the Companies Act 1985.
7.Interim Report
The interim report will be posted to shareholders in early September and
copies will be available thereafter from the Secretary at the Company's
registered office, 3 Finsbury Avenue, London EC2M 2PA.
For further information please contact :
Alex Crooke
Portfolio Manager
Henderson High Income Trust plc
Telephone: 020 7410 4447
Norman Brown
Client Service Director
Henderson High Income Trust plc
Telephone: 020 7410 3185
or Vicki Staveacre
Henderson Press Office
Telephone: 020 7410 4222
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