Interim Results
Henderson High Income Trust PLC
16 August 2001
15 August 2001
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Highlights:
* Share price (per unit) total return up 12.5% for the first six months of
the year
* Net asset value (per unit) total return up 4.7% for the first six months of
the year, in contrast to the fall of 7.3% in the FTSE All-Share Index
* Forecast total dividend per ordinary share up 15.8% over last year
Extracts from the Chairman's Statement:
Assets
Stock markets the world over are still coming to terms with the hangover
caused by the wild valuations reached by technology shares. The share price
falls have been spectacular, often accompanied by profit warnings and large
cash calls. The UK stock market was not immune and the FTSE All-Share Index
suffered a fall of 7.3%, including income reinvested, over the first half of
the year.
The conservative nature and defensive orientation of the portfolio resulted in
a performance very significantly better than the FTSE All-Share Index over the
half year. The net asset value total return of the Company, attributable to
the units, was up 4.7% while the share price rose 12.5%, both figures
including the reinvestment of income, in contrast to the fall of 7.3% in the
FTSE All-Share Index. The Trust now trades at a small premium to net assets
and this move since the year end has had a beneficial impact on the share
price performance.
Beyond technology, there were pockets of optimism in consumer related shares
and defensive sectors. The propensity for the average UK citizen to keep
spending the benefits of higher wages and lower interest rates resulted in
better prospects for the retailers, both in supermarkets and on the high
street.
Economic news indicated that manufacturing, services and the economy in
general were growing at a slower pace than over the previous year. While there
are some signs of an impending recession, the quick response of lower interest
rates has undoubtedly helped allay fears and aided the prospects for recovery.
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Chairman's Statement cont'd.
Earnings and Dividends
The earnings of the Company amounted to 5.38p over the first half of the year.
The rise in earnings over the previous year largely reflects the contribution
from new investments funded by an increase in borrowings. Underlying dividend
growth for the UK market has slowed, impacted by the advent of dividend cuts
and the passing of the British Telecom dividend. Dividends as a proportion of
distributable earnings for most companies are not stretched and once
confidence in the economy resumes, so should the growth in dividends
accelerate.
The Board has declared a second interim dividend of 2.475p. The reorganisation
implemented last year has successfully delivered its main aim of increasing
the distribution to shareholders. The Board expects to maintain the current
level of distributions for the full year, resulting in an increase in the
total annual dividend of 15.8% over last year.
Prospects
The UK possesses companies with good prospects, trading on reasonable
valuations but investors lack the confidence to buy. In the short term there
is the scope for further interest rate cuts but more concrete signs of
recovery are unlikely until towards the end of the year. The stock market has
fallen a considerable way this year and will bring further opportunities to
purchase as the future becomes clearer. With every reasonable hope that any
setback in the economy will be short lived, we look to the future, and our
ability to further the interests of our shareholders.
For further information please contact:
Alex Crooke
Portfolio Manager
Henderson High Income Trust plc
Telephone: 020 7818 4447
Stephen Westwood
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 5517
Vicki Staveacre
Corporate Communications
Henderson Global Investors
Telephone: 020 7818 4222
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Group Statement of Total Return (incorporating the revenue account)
for the half year ended 30 June 2001
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended 30 30 June Year ended
June 2001 2000 31 December 2000
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital - 3,292 3,292 - 246 246 - 7,693 7,693
gains from
investments
Income from 3,364 - 3,364 2,137 - 2,137 4,804 - 4,804
fixed asset
investments
Other interest
receivable and
similar income 61 - 61 56 - 56 161 - 161
----- ----- ----- ----- ----- ----- ----- ----- -----
Gross revenue 3,425 3,292 6,717 2,193 246 2,439 4,965 7,693 12,658
and capital
gains
Management fee (150) (224) (374) (223) (111) (334) (357) (312) (669)
Other (54) - (54) (59) - (59) (157) - (157)
administrative
expenses
----- ----- ----- ----- ----- ----- ----- ----- -----
Net return on
ordinary
activities
before 3,221 3,068 6,289 1,911 135 2,046 4,451 7,381 11,832
interest
payable and
taxation
Interest (187) (562) (749) (23) (23) (46) (98) (248) (346)
payable
----- ----- ----- ----- ----- ----- ----- ----- -----
Net return on
ordinary
activities
before 3,034 2,506 5,540 1,888 112 2,000 4,353 7,133 11,486
taxation
Taxation on
net return on
ordinary
activities (201) 201 - (93) 40 (53) (216) 168 (48)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net return on
ordinary
activities
after taxation 2,833 2,707 5,540 1,795 152 1,947 4,137 7,301 11,438
Provision for
redemption of
the zero
dividend
preference
shares in the
subsidiary - (1,078) (1,078) - - - - (784) (784)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net return
attributable
to the
Ordinary 2,833 1,629 4,462 1,795 152 1,947 4,137 6,517 10,654
shareholders
Dividends -
ordinary
shares
Paid and (2,604) - (2,604)(1,894) -(1,894)(4,498) -(4,498)
proposed (note
5)
----- ----- ----- ----- ----- ----- ----- ----- -----
Transfer to/ 229 1,629 1,858 (99) 152 53 (361) 6,517 6,156
(from)
reserves
----- ----- ----- ----- ----- ----- ----- ----- -----
Return per 5.38p 3.10p 8.48p 3.41p 0.29p 3.70p 7.86p 12.39p 20.25p
ordinary share
(note 3)
----- ----- ----- ----- ----- ----- ----- ----- -----
Return per - 2.05p 2.05p - 1.49p 1.49p
zero dividend
preference
share in the
subsidiary ----- ----- ----- ----- ----- ----- ----- ----- -----
Return per 5.38p 5.15p 10.53p 7.86p 13.88p 21.74p
unit
----- ----- ----- ----- ----- ----- ----- ----- -----
The revenue columns of this statement represent the revenue accounts of the
Group.
As permitted by Section 230 of the Companies Act 1985, the Company has not
presented its own revenue account.
The net revenue after taxation of the Company dealt with in the accounts of
the Group was £2,833,000 (year ended 31 December 2000: £4,137,000).
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Balance Sheets
at 30 June 2001
Group Company Company Group Company
(Unaudited)(Unaudited)(Unaudited)(Audited)(Audited)
30 June 30 June 30 June 31 31
December December
2001 2001 2000 2000 2000
£'000 £'000 £'000 £'000 £'000
Fixed asset investments
Listed in the United Kingdom 125,814 125,814 92,468 123,713 123,713
Subsidiary undertaking - - - - -
--------- --------- --------- -------- --------
125,814 125,814 92,468 123,713 123,713
Current assets
Debtors 1,697 1,697 1,252 4,049 4,049
Cash at bank and short term 10 10 2,006 7,829 7,829
deposits
--------- --------- --------- -------- --------
1,707 1,707 3,258 11,878 11,878
Creditors : amounts falling
due within one year (25,578) (25,578) (3,049) (36,584) (36,584)
--------- --------- --------- -------- --------
Net current (liabilities)/ (23,871) (23,871) 209 (24,706) (24,706)
assets
--------- --------- --------- -------- --------
Total assets less current 101,943 101,943 92,677 99,007 99,007
(liabilities)/assets
Creditors: amounts falling
due after more than one year
Amounts owed to group - (28,164) - - (27,086)
undertaking
Zero dividend preference
shares in the subsidiary (28,164) - - (27,086) -
Provision for liabilities - - (2) - -
and charges
--------- --------- --------- -------- --------
Total net assets 73,779 73,779 92,675 71,921 71,921
====== ====== ====== ====== ======
Capital and reserves
Called-up share capital:
ordinary shares 2,630 2,630 13,151 2,630 2,630
Capital redemption reserve 26,302 26,302 - 26,302 26,302
Other capital reserves
Share premium 4,935 4,935 20,716 4,935 4,935
Realised reserves 20,181 20,181 43,570 19,222 19,222
Unrealised reserves 18,167 18,167 13,641 17,497 17,497
Revenue reserve 1,564 1,564 1,597 1,335 1,335
--------- --------- --------- -------- --------
Shareholders' funds 73,779 73,779 92,675 71,921 71,921
====== ====== ====== ====== ======
Net asset value per ordinary 140.25p 140.25p 176.18p 136.72p 136.72p
share
(note 4)
--------- --------- --------- -------- --------
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Balance Sheets cont'd
at 30 June 2001
Group Group
(Unaudited) (Audited)
30 June 2001 31 December 2000
£'000 £'000
Funds attributable to:
Ordinary shares 73,779 71,921
Zero dividend preference shares in the
subsidiary 28,164 27,086
---------- ----------
101,943 99,007
====== ======
Net asset value per:
Ordinary share 140.25p 136.72p
Zero dividend preference shares in the
subsidiary 53.54p 51.49p
---------- ----------
Unit 193.79p 188.21p
====== ======
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Group Cash Flow Statement
for the half year ended 30 June 2001
(Unaudited) (Unaudited) (Audited)
Half year Half year Year ended
ended ended 31 December
30 June 2001 30 June 2000 2000
£'000 £'000 £'000
Net cash inflow from operating 2,958 1,613 3,338
activities
Net cash outflow from servicing of (845) (48) (272)
finance
Net tax recovered - - 204
Net cash (outflow)/inflow from financial (3,991) 6,009 (13,636)
investment
Equity dividends paid (2,604) (1,894) (3,788)
--------- --------- -----------
Net cash (outflow)/inflow before (4,482) 5,680 (14,154)
financing
Net cash (outflow)/inflow from financing (3,337) (5,000) 12,848
---------- --------- ----------
(Decrease)/increase in cash (7,819) 680 (1,306)
---------- --------- ----------
Reconciliation of operating revenue to net cash inflow
from operating activities
Net revenue before interest payable and 3,221 1,911 4,451
taxation
Decrease/(increase) in accrued income 159 (48) (580)
(Increase) in other debtors (1) - (1)
(Decrease)/increase in creditors (58) (29) 23
Scrip dividends - (9) (36)
Underwriting credit against stock - - 3
purchased
Tax deducted at source (139) (101) (210)
Management fee charged to capital (224) (111) (312)
--------- -------- --------
Net cash inflow from operating 2,958 1,613 3,338
activities
--------- -------- --------
Reconciliation of net cash flow to movement in net funds/(debt)
(Decrease)/increase in cash (7,819) 680 (1,306)
Net repayment/(drawdown) of loans 3,337 5,000 (13,400)
---------- --------- -----------
Movement in net (debt)/funds in the (4,482) 5,680 (14,706)
period
Net debt at the beginning of the period (18,380) (3,674) (3,674)
---------- --------- -----------
Net (debt)/funds at the end of the (22,862) 2,006 (18,380)
period
---------- --------- -----------
Represented by:
Cash at bank and short term deposits 10 2,006 7,829
Bank overdrafts - - (7,809)
Debt falling due within one year (22,872) - (18,400)
---------- --------- -----------
Total (22,862) 2,006 (18,380)
--------- ------- ---------
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Notes:
1. Accounting policies
a) Group accounts
The Group accounts consolidate the accounts of the Company and its
wholly-owned subsidiary, Henderson High Income Trust Securities plc,
from 16 August 2000. The comparative figures presented for the half
year ended 30 June 2000 are those of the parent company only as there
were no subsidiaries during that period.
b) Expenses
All expenses are accounted for on an accrual basis. The Board's
expectation is that over the long term three quarters of the Group's
investment returns will be in the form of capital gains. From 1 July
2000 the Group has charged to capital 75% of its finance costs and
management fees (to the extent that the management fees relate to the
maintenance or enhancement of the valuation of investments). Prior to
1 July 2000 the Company charged to capital 50% of both finance costs
and management fees (to the extent that the management fees related
to the maintenance or enhancement of the valuation of investments).
2. Capital reorganisation
The comparative figures for the half year ended 30 June 2000 are prior to
the Company's capital reorganisation on 16 August 2000.
The result of the capital reorganisation was that every ordinary share of
25p each in issue was replaced by one ordinary share of 5p each in the
Company and one zero dividend preference share of 50p each in Henderson
High Income Trust Securities plc, a new wholly-owned subsidiary
undertaking.
3. Return per share
a) Returns per ordinary share
Revenue return per ordinary share is based on the earnings
attributable to the ordinary shares of £2,833,000 (30 June 2000: £
1,795,000; year ended 31 December 2000: £4,137,000) and on 52,603,865
ordinary shares in issue throughout the period (30 June 2000 and 31
December 2000: 52,603,865).
Capital return per ordinary share is based on the net capital gains
for the period of £1,629,000 (30 June 2000: £152,000; 31 December
2000: £6,517,000) and on the 52,603,865 ordinary shares in issue
throughout the period (30 June 2000 and 31 December 2000:
52,603,865).
Prior to the capital reorganisation of 16 August 2000 the ordinary
shares in issue were ordinary shares of 25p each; thereafter they
were ordinary shares of 5p each.
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2001
Notes cont'd:
b) Returns per zero dividend preference share
Capital return per zero dividend preference share reflects the
predetermined growth in capital entitlement for the period of £
1,078,000 (30 June 2000: nil; 31 December 2000: £784,000) based on
the 52,603,865 zero dividend preference shares in issue (30 June
2000: nil; 31 December 2000: 52,603,865).
c) Returns per unit
Revenue return per unit, each unit consisting of one ordinary share
of 5p each in the Company and one zero dividend preference share of
50p each in the subsidiary, amounts to 5.38p per unit.
Capital return per unit, each unit consisting of one ordinary share
of 5p each in the Company and one zero dividend preference share of
50p each in the subsidiary, amounts to 5.15p per unit.
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 £73,779,000 (30 June 2000:
£92,675,000; 31 December 2000: £71,921,000) and on the 52,603,865 ordinary
shares in issue at 30 June 2001 (30 June 2000 and 31 December 2000:
52,603,865).
5. Dividends
A first interim dividend of 2.475p (2000: 1.80p) was paid on 31 July
2001.
A second interim dividend of 2.475p (2000: 1.80p) has been declared
payable on 31 October 2001 to shareholders registered at the close of
business on 28 September 2001.
6. Accounts for the year ended 31 December 2000
The figures and financial information for the year ended 31 December 2000
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 August and will be
available from the Registered Office at 4 Broadgate, London EC2M 2DA
thereafter.
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HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2001
Statement of Total Return
for the half year ended 30 June 2001
(Unaudited) (Audited)
Half year ended 30 June Period ended 31
2001 December 2000
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Accrued redemption premium
receivable
from parent company (note 2) - 1,078 1,078 - 784 784
------- -------- -------- -------- ------- ------
Gross revenue and capital - 1,078 1,078 - 784 784
gains
Administrative expenses (note - - - - - -
3)
------- -------- -------- -------- ------- ------
Net return on ordinary
activities
before taxation - 1,078 1,078 - 784 784
Taxation on net return on
ordinary
activities - - - - - -
------- -------- -------- -------- ------- ------
Net return on ordinary
activities
after taxation - 1,078 1,078 - 784 784
Appropriations in respect of
non-equity
shares: zero dividend
preference
shares - (1,078) (1,078) - (784) (784)
------- -------- -------- -------- ------- ------
Transfer to reserves - - - - - -
==== ===== ===== ==== ==== ====
Return per share:
Ordinary - - - - - -
==== ==== ==== ==== ==== ====
Zero dividend preference (note - 2.05p 2.05p - 1.49p 1.49p
4)
==== ==== ==== ==== ==== ====
The revenue columns of this statement represent the revenue account of
the Company.
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HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2001
Balance Sheet
at 30 June 2001
(Unaudited) (Audited)
30 June 2001 31 December 2000
£'000 £'000
Current assets
Debtors 28,164 27,086
---------- ----------
Net current assets 28,164 27,086
---------- ----------
Total net assets 28,164 27,086
===== =====
Capital and reserves
Called-up share capital 26,302 26,302
Reserve for redemption premium 1,862 784
---------- ----------
28,164 27,086
===== =====
Shareholder's funds attributable to:
Equity shareholders - -
Non-equity shareholders 28,164 27,086
---------- ----------
28,164 27,086
===== =====
Net asset value per:
Ordinary share - -
===== =====
Zero dividend preference share (note 5) 53.54p 51.49p
===== =====
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HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2001
Notes:
1. Accounting policies
a) Basis of accounting
The accounts have been prepared on the historical cost basis of
accounting. The accounts have been prepared in accordance with the
applicable accounting standards and with the Statement of Recommended
Practice Financial Statements of Investment Trust Companies ('the
SORP'). All of the Company's operations are of a continuing nature.
The Company is a wholly-owned subsidiary of another United Kingdom
company.
The zero dividend preference shares were listed on the London Stock
Exchange with effect from 17 August 2000.
2. Accrued redemption premium receivable from parent company
Amount due from Henderson High Income Trust plc accrued in respect of the
subscription for ordinary shares to be made in September 2005 at the
redemption of the Company's zero dividend preference shares.
3. Administrative expenses
All the expenses of Henderson High Income Trust Securities plc are met by
Henderson High Income Trust plc.
4. Return per share
Capital return per zero dividend preference share is based on
appropriations in respect of non-equity shares of £1,078,000 (period
ended 31 December 2000: £784,000) and on the 52,603,865 zero dividend
preference shares in issue at 30 June 2001 (31 December 2000:
52,603,865).
5. Net asset value per share
The net asset value per zero dividend preference share is based on the
funds attributable to the zero dividend preference shares of £28,164,000
(31 December 2000:£27,086,000) and on the 52,603,865 zero dividend
preference shares in issue at 30 June 2001 (31 December 2000:
52,603,865).
6. Parent undertaking
The Company is a wholly-owned subsidiary undertaking of Henderson High
Income Trust plc, an investment company registered in England and Wales
and operating in the United Kingdom.
7. Cash flow statement
The Company has taken advantage of the exemptions allowed by FRS1 not to
prepare a cash flow statement as it is a wholly-owned subsidiary of
Henderson High Income Trust plc.
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HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2001
Notes cont'd:
8. Accounts for the period ended 31 December 2000
The figures and financial information for the period ended 31 December
2000 are extracted from the latest published accounts of the Company and
do not constitute the statutory accounts for that period. 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.
9. Interim report
The Interim Report will be posted to shareholders in August and will be
available from the Registered Office at 4 Broadgate, London EC2M 2DA
thereafter.
- ENDS -
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