Interim Results
Henderson High Income Trust PLC
31 July 2003
30 July 2003
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2003
Highlights:
* NAV and share price per ordinary share up 10.1% and 8.1% respectively
* NAV and share price per unit increased by 14.3% and 11.4% respectively
* First half figures encouraging
The Chairman's Statement:
Assets
I am pleased to be able to report that the net assets of your Company have risen
since I last reported to you. The UK stock market has staged a significant
recovery from the very depressed levels reached during the Iraq crisis.
Share prices have recovered as the uncertainties surrounding the build-up to war
have receded. The economy has not entered into a recession, consumers have not
stopped spending and the oil price has not spiked upwards. Further good news has
been provided by the first cut in interest rates for 15 months. Share prices now
reflect an expectation that economic growth can accelerate from the current
subdued level.
The investment policy of creating a diversified portfolio of equities and bonds
has served shareholders well in terms of damping down the effects of volatile
markets. Over the first half of the year, the Company's gearing provided a
positive impact on net assets, enhancing returns to ordinary shareholders. The
net asset value total return per ordinary share rose 10.1% while the FTSE All-
Share Index rose 6.3%, both figures including the reinvestment of income.
Earnings and Dividends
Over the first half of the year the earnings of the Company amounted to 4.6p,
compared with 5.6p a year ago. The fall in earnings is partly a function of
reduced gearing but also reflects the dividend cuts that companies announced
last year and the trend towards large UK companies declaring dividends in US
dollars. The recent weakness in the US dollar has impacted the sterling value of
these dividends. While genuine dividend growth is scarce, the nadir in terms of
dividends being rebalanced downwards may have passed.
The Board has declared an unchanged second interim dividend of 2.475p. The
Company has decided to utilise the revenue reserve, prudently created in
previous years to maintain the dividends paid to shareholders in these volatile
times. Based on present estimates, the Board expects to maintain the current
level of distribution for the full year.
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2003
Chairman's Statement cont'd
Prospects
The fear of deflation can be crippling for equities while at the same time
beneficial for bond prices. Europe seems stagnant with little growth and serious
problems in Germany; the UK appears in better health. Interest rates have fallen
as price inflation in the housing market has moderated but they are still above
the level of price inflation. The UK can not prosper in isolation; our key
trading partners are struggling to expand their economies and accordingly a
genuine improvement in the UK will inevitably take time to rebuild.
Share valuations are forward looking, taking into account the economic prospects
over the next 12 months or more. As such, small changes in these expectations,
for good or bad, can have dramatic effects on share prices in a very short
period of time. I believe that the economy and corporate profitability are
improving, but there is still a risk that the pace may be slower than expected
leading to short term disappointment. I remain confident for the future, but an
element of caution is still required after the experience of the past years.
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
Stephen Phillips
Investor Relations Manager, Henderson Global Investors
Telephone: 020 7818 6417
Vicki Staveacre
Henderson Press Office
Telephone: 020 7818 4222
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2003
Group Statement of Total Return (incorporating the revenue account)
for the half year ended 30 June 2003
(Unaudited) (Unaudited) (Audited)
Half year ended 30 June 2003 Half year ended 30 June Year ended 31 December 2002
2002
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital gains/(losses) - 6,074 6,074 - (92) (92) - (14,960) (14,960)
from
investments
Income from fixed asset 3,052 - 3,052 3,561 - 3,561 6,461 - 6,461
investments
Other interest receivable and
similar income 7 - 7 30 - 30 79 - 79
-------- -------- -------- -------- -------- -------- -------- -------- --------
Gross revenue and capital gains 3,059 6,074 9,133 3,591 (92) 3,499 6,540 (14,960) (8,420)
/(losses)
Management fee (129) (193) (322) (165) (247) (412) (330) (495) (825)
Performance fee - (333) (333) - - - - - -
Other administrative expenses (123) - (123) (118) - (118) (222) - (222)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on ordinary
activities
before interest payable and 2,807 5,548 8,355 3,308 (339) 2,969 5,988 (15,455) (9,467)
taxation
Interest payable (93) (280) (373) (123) (368) (491) (228) (684) (912)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on ordinary
activities
before taxation 2,714 5,268 7,982 3,185 (707) 2,478 5,760 (16,139) (10,379)
Taxation on net return on
ordinary
activities (158) 151 (7) (192) 185 (7) (352) 342 (10)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on ordinary
activities
after taxation 2,556 5,419 7,975 2,993 (522) 2,471 5,408 (15,797) (10,389)
Provision for redemption of the
zero
dividend preference shares in
the
subsidiary - (1,264) (1,264) - (1,168) (1,168) - (2,403) (2,403)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) attributable
to the
ordinary shareholders 2,556 4,155 6,711 2,993 (1,690) 1,303 5,408 (18,200) (12,792)
Dividends - ordinary shares
Paid and proposed (note 5) (2,744) - (2,744) (2,692) - (2,692) (5,457) - (5,457)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Transfer (from)/to reserves (188) 4,155 3,967 301 (1,690) (1,389) (49) (18,200) (18,249)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return/(loss) per ordinary 4.61p 7.49p 12.10p 5.60p (3.16)p 2.44p 9.95p (33.49)p (23.54)p
share (note 2)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return per zero dividend - 2.40p 2.40p - 2.22p 2.22p - 4.57p 4.57p
preference
share in the subsidiary
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return/(loss) per unit 4.61p 9.89p 14.50p 5.60p (0.94)p 4.66p 9.95p (28.92)p (18.97)p
-------- -------- -------- -------- -------- -------- -------- -------- --------
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.
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2003
Group and Company Balance Sheets at 30 June 2003
Group Company Group Company Group Company
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited)
30 June 30 June 30 June 30 June 31 December 31 December
2003 2003 2002 2002 2002 2002
£'000 £'000 £'000 £'000 £'000 £'000
Fixed asset investments
Listed in the United Kingdom 108,008 108,008 118,718 118,718 104,902 104,902
Subsidiary undertaking - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
108,008 108,008 118,718 118,718 104,902 104,902
Current assets
Debtors 3,270 3,270 1,527 1,527 1,247 1,247
Cash at bank and short term 1,247 1,247 158 158 - -
deposits
---------- ---------- ---------- ---------- ---------- ----------
4,517 4,517 1,685 1,685 1,247 1,247
Creditors: amounts falling due
within one year (18,104) (18,104) (21,998) (21,998) (21,959) (21,959)
---------- ---------- ---------- ---------- ---------- ----------
Net current liabilities (13,587) (13,587) (20,313) (20,313) (20,712) (20,712)
---------- ---------- ---------- ---------- ---------- ----------
Total assets less current 94,421 94,421 98,405 98,405 84,190 84,190
liabilities
Creditors: amounts falling due
after
more than one year
Bank loans (5,000) (5,000) - - - -
Amounts owed to group - (32,974) - (30,475) - (31,710)
undertaking
Zero dividend preference shares
in the subsidiary (32,974) - (30,475) - (31,710) -
Provision for liabilities and - - - - - -
charges
---------- ---------- ---------- ---------- ---------- ----------
Total net assets 56,447 56,447 67,930 67,930 52,480 52,480
========== ========== ========== ========== ========== ==========
Capital and reserves
Called-up share capital:
ordinary shares 2,771 2,771 2,709 2,709 2,771 2,771
Capital redemption reserve 26,302 26,302 26,302 26,302 26,302 26,302
Other capital reserves:
Share premium 8,398 8,398 7,050 7,050 8,398 8,398
Realised reserves 16,305 16,305 20,192 20,192 18,556 18,556
Unrealised reserves 1,764 1,764 10,232 10,232 (4,642) (4,642)
Revenue reserve 907 907 1,445 1,445 1,095 1,095
---------- ---------- ---------- ---------- ---------- ----------
Shareholders' funds 56,447 56,447 67,930 67,930 52,480 52,480
========== ========== ========== ========== ========== ==========
Net asset value per ordinary 101.84p 101.84p 125.38p 125.38p 94.68p 94.68p
share
(note 3) ========== ========== ========== ========== ========== ==========
Funds attributable to the:
Ordinary shares 56,447 67,930 52,480
Zero dividend preference shares
in
the subsidiary 32,974 30,475 31,710
---------- ---------- ----------
89,421 98,405 84,190
========== ========== ==========
Net asset value per:
Ordinary share 101.84p 125.38p 94.68p
Zero dividend preference share
in
the subsidiary 62.68p 57.93p 60.28p
---------- ---------- ----------
Unit 164.52p 183.31p 154.96p
========== ========== ==========
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2003
Group Cash Flow Statement
for the half year ended 30 June 2003
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 June 2003 30 June 2002 31 December 2002
£'000 £'000 £'000
Net cash inflow from operating activities 3,081 2,791 5,370
Net cash outflow from servicing of finance (320) (543) (924)
Net tax (paid)/recovered - (7) 133
Net cash inflow from financial investment 4,729 1,060 187
Equity dividends paid (2,744) (2,632) (5,345)
--------- --------- -----------
Net cash inflow/(outflow) before financing 4,746 669 (579)
Net cash (outflow) from financing (3,247) (1,511) (637)
--------- ---------- ----------
Increase/(decrease) in cash 1,499 (842) (1,216)
--------- ---------- ----------
Reconciliation of operating revenue to net cash inflow
from operating activities
Net revenue before interest payable and taxation 2,807 3,308 5,988
Decrease/(increase) in accrued income 345 (84) 52
(Increase)/decrease in other debtors (17) (5) 1
Increase/(decrease) in creditors 484 (16) (4)
Scrip dividends - (165) (165)
Tax deducted at source (12) - (7)
Management fee charged to capital (526) (247) (495)
--------- --------- --------
Net cash inflow from operating activities 3,081 2,791 5,370
--------- --------- --------
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash 1,499 (842) (1,216)
Net repayment of loans 3,247 2,981 3,518
Exchange movements (69) - (36)
--------- ---------- -----------
Movement in net funds in the period 4,677 2,139 2,266
Net debt at the beginning of the period (18,941) (21,207) (21,207)
--------- ---------- -----------
Net debt at the end of the period (14,264) (19,068) (18,641)
--------- ---------- -----------
Represented by:
Cash at bank and short term deposits 1,247 158 -
Debt falling due within one year (15,511) (19,226) (18,941)
--------- ---------- -----------
Total (14,264) (19,068) (18,941)
--------- --------- ---------
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2003
Notes:
1. Accounting policies
a) Group accounts
The Group accounts consolidate the accounts of the Company and of its wholly-owned subsidiary, Henderson
High Income Trust Securities plc.
b) Expenses
All expenses are accounted for on an accruals 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. On this basis, the
Group charges 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).
2. Return per share
a) Returns per ordinary share
Revenue return per ordinary share is based on the earnings attributable to the ordinary shares of
£2,556,000 (30 June 2002: £2,993,000; 31 December 2002: £5,408,000) and on the 55,428,865 weighted average
number of ordinary shares in issue throughout the period (30 June 2002: 53,433,009; 31 December 2002:
54,346,536).
Capital gain per ordinary share is based on the net capital gains for the period of £4,155,000 (30 June
2002: net capital losses £1,690,000; 31 December 2002: net capital losses £18,200,000) and on the 55,428,865
weighted average number of ordinary shares in issue throughout the period (30 June 2002: 53,433,009; 31
December 2002: 54,346,536).
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 £1,264,000 (30 June 2002: £1,168,000; 31 December 2002: £2,403,000) based on
the 52,603,865 zero dividend preference shares in issue (30 June 2002 and 31 December 2002: 52,603,865).
c) Returns per unit
Revenue return per unit, each unit consisting of one ordinary share of 5p in the Company and one zero
dividend preference share of 50p in the subsidiary, amounts to 4.61p per unit (30 June 2002: 5.60p; 31
December 2002: 9.95p).
Capital gain per unit, each unit consisting of one ordinary share of 5p in the Company and one zero
dividend preference share of 50p in the subsidiary, amounts to 9.89p per unit (30 June 2002: (0.94)p; 31
December 2002: (28.92)p).
3. 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
£56,447,000 (30 June 2002: £67,930,000; 31 December 2002: £52,480,000) and on the 55,428,865 ordinary shares in
issue at 30 June 2003 (30 June 2002: 54,178,865; 31 December 2002: 55,428,865).
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HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2003
Notes cont'd:
4. Net revenue
The net revenue after taxation of the Company dealt with in the accounts of the Group was £2,652,000 (30 June
2002: £2,993,000; 31 December 2002: £5,408,000).
5. Dividends
A first interim dividend of 2.475p (2002: 2.475p) was paid on 31 July 2003 on 55,428,865 shares, being the number
of shares in issue at the record date of 20 June 2003.
A second interim dividend of 2.475p (2002: 2.475p) has been declared payable on 31 October 2003 to shareholders
registered at the close of business on 26 September 2003. Funds have been accrued in the accounts on 55,428,865
shares, being the number of shares in issue on 30 July 2003, the date of approval of these accounts.
6. Accounts for the year ended 31 December 2002
The figures and financial information for the year ended 31 December 2002 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
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 2003
Statement of Total Return
for the half year ended 30 June 2003
(Unaudited) (Unaudited) (Audited)
Half year ended 30 June 2003 Half year ended 30 June Year ended 31 December 2002
2002
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Accrued redemption premium
receivable
from parent company (note 2) - 1,264 1,264 - 1,168 1,168 - 2,403 2,403
---------- ---------- ---------- -------- --------- --------- --------- -------- -------
Gross revenue and capital gains - 1,264 1,264 - 1,168 1,168 - 2,403 2,403
Administrative expenses (note 3) - - - - - - - - -
---------- ---------- ---------- -------- --------- --------- --------- -------- -------
Net return on ordinary
activities
before taxation - 1,264 1,264 - 1,168 1,168 - 2,403 2,403
Taxation on net return on
ordinary
activities - - - - - - - - -
---------- ---------- ---------- -------- --------- --------- --------- -------- -------
Net return on ordinary
activities
after taxation - 1,264 1,264 - 1,168 1,168 - 2,403 2,403
Appropriations in respect of
non-equity
shares:
zero dividend preference shares - (1,264) (1,264) - (1,168) (1,168) - (2,403) (2,403)
---------- ---------- ---------- -------- --------- --------- --------- -------- -------
Transfer to reserves - - - - - - - - -
---------- ---------- ---------- -------- --------- --------- --------- -------- -------
Return per share: - - - - - - - - -
Ordinary
---------- ---------- ---------- -------- --------- --------- --------- -------- -------
Zero dividend preference (note 4 - 2.40p 2.40p - 2.22p 2.22p - 4.57p 4.57p
---------- ---------- ---------- -------- --------- --------- --------- -------- -------
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 2003
Balance Sheet
at 30 June 2003
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December 2002
2003 2002 £'000
£'000 £'000
Current assets
Debtors 32,974 30,475 31,710
---------- ---------- ----------
Net current assets 32,974 30,475 31,710
---------- ---------- ----------
Total net assets 32,974 30,475 31,710
========== ========== ==========
Capital and reserves
Called-up share capital 26,302 26,302 26,302
Reserve for redemption premium 6,672 4,173 5,408
---------- ---------- ----------
32,974 30,475 31,710
========== ========== ==========
Shareholders' funds attributable to:
Equity shareholders - - -
Non-equity shareholders 32,974 30,475 31,710
---------- ---------- ----------
32,974 30,475 31,710
========== ========== ==========
Net asset value per:
Ordinary share - - -
========== ========== ==========
Zero dividend preference share (note 5) 62.68p 57.93p 60.28p
========== ========== ==========
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HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2003
Notes:
1. Accounting policy
Basis of accounting
The accounts have been prepared on the historical cost basis of accounting. The accounts have been prepared in
accordance with 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.
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
£1,264,000 (30 June 2002: £1,168,000; 31 December 2002: £2,403,000) and on the 52,603,865 zero dividend
preference shares in issue at 30 June 2003 (30 June 2002 and 31 December 2002: 52,603,865).
5. Net asset value per zero dividend preference share
The net asset value per zero dividend preference share is based on the funds attributable to the zero dividend
preference shares of £32,974,000 (30 June 2002: £30,475,000; 31 December 2002: £31,710,000) and on the 52,603,865
zero dividend preference shares in issue at 30 June 2003 (30 June 2002 and 31 December 2002: 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 2003
Notes cont'd:
8. Accounts for the period ended 31 December 2002
The figures and financial information for the period ended 31 December 2002 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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