Interim Results
Henderson High Income Trust PLC
29 July 2004
28 July 2004
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2004
Highlights:
* Our portfolio performed better than the market in general
* NAV total return of 6.3% compared to FTSE All-Share total return of 2.8%
* Dividend maintained at 4.95p for half year
Chairman's Statement:
Assets
The UK stock market has remained in a tight trading range for most of 2004,
ending the period under review broadly flat. Last year's upward momentum of
share prices has failed to carry through into this year despite low interest
rates and improving corporate profits. A major cause of stalling share prices
has been further selling of equities by life and pension funds. Meanwhile, the
oil price is stubbornly high at nearly $40 a barrel, Iraq remains intractable as
ever and inflationary pressures are spreading.
Within the stock market, investors have been looking for stability and have
favoured defensive companies, although some larger companies, especially the
banks, have been amongst the worst performing areas. Overall our portfolio
performed better than the market in general. The net asset value total return
per ordinary share was 6.3% while the FTSE All-Share Index only returned 2.8%,
both figures include the reinvestment of income. Fixed interest securities were
priced at lower levels by the end of the period, as inflationary expectations
and interest rates both rose. Our corporate bond investments held up better than
government gilt issues, but failed to perform as well as the equity portfolio.
Our own borrowing costs are starting to rise with the trend of interest rates,
however we fixed £5m of debt last year at 4.3%; this will help to partially
offset any future rises in rates.
Earnings and Dividends
Over the first half of the year the earnings of the Company amounted to 5.07p
compared with 4.61p a year ago. The rise can be partly attributed to a recovery
in the level of dividend growth but it is also due to the weakness of sterling
against both the euro and US dollar. Overseas earnings and those dividends
declared in foreign currencies are worth more when converted into sterling if
the exchange rate is weak. Over the past six months weaker sterling has helped
the Company's revenue, however we are mindful that this benefit could reverse in
the future. Overall, economic growth has helped companies grow profits but other
costs such as labour and interest payments are all rising, impacting the future
ability to grow dividends. Dividends are growing but rising slower than
corporate profits.
- MORE -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2004
Chairman's Statement cont'd
The Board has declared an unchanged second interim dividend of 2.475p. Based on
present estimates, the Board expects to maintain the current level of
distribution for the full year to 31 December 2004.
Prospects
Investor confidence in UK companies has been affected by a series of events. In
the early New Year the oil company Shell announced that they would be cutting
the level of oil reserves they believed they owned. In March terrorist bombs in
Madrid brought the fears of further atrocities to the forefront of our minds.
Elsewhere both interest rates and inflation are rising, with little consensus of
where they may peak. Hopefully confidence will be rebuilt gradually, aided by a
diminution in the flow of bad news.
The basic valuation of UK shares is still appealing, with profits and dividends
steadily improving. However, with a degree of apathy from both institutional and
private investors, share prices may struggle to rise. The summer months have
seasonally proved a difficult time to identify trends: the autumn should give a
better time to judge prospects for the economy and, crucially, whether interest
rate rises are having their desired effect.
- MORE -
- 3 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2004
Group Statement of Total Return (incorporating the revenue account)
for the half year ended 30 June 2004
(Unaudited) (Unaudited) (Audited)
Half year ended 30 June 2004 Half year ended 30 June Year ended 31 December 2003
2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total - 3,325 3,325 - 6,074 6,074 - 12,107 12,107
capital
gains from
investments
Income from 3,336 - 3,336 3,052 - 3,052 6,410 - 6,410
fixed asset
investments
Other
interest
receivable
and
similar 19 - 19 7 - 7 36 - 36
income
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - -
Gross 3,355 3,325 6,680 3,059 6,074 9,133 6,446 12,107 18,553
revenue and
capital
gains
Management (129) (193) (322) (129) (193) (322) (258) (386) (644)
fee
Performance - (561) (561) - (333) (333) - (392) (392)
fee
Other (114) - (114) (123) - (123) (260) - (260)
administrative
expenses
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - -
Net return
on ordinary
activities
before 3,112 2,571 5,683 2,807 5,548 8,355 5,928 11,329 17,257
interest
payable and
taxation
Interest (136) (408) (544) (93) (280) (373) (205) (614) (819)
payable
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - -
Net return
on ordinary
activities
before 2,976 2,163 5,139 2,714 5,268 7,982 5,723 10,715 16,438
taxation
Taxation on
net return
on ordinary
activities (133) 126 (7) (158) 151 (7) (279) 267 (12)
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - -
Net return
on ordinary
activities
after 2,843 2,289 5,132 2,556 5,419 7,975 5,444 10,982 16,426
taxation
Provision
for
redemption
of the zero
dividend
preference
shares in
the
subsidiary - (1,375) (1,375) - (1,264) (1,264) - (2,600) (2,600)
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - -
Net return
attributable
to the
ordinary 2,843 914 3,757 2,556 4,155 6,711 5,444 8,382 13,826
shareholders
Dividends -
ordinary
shares
Paid and (2,773) - (2,773) (2,744) - (2,744) (5,518) - (5,518)
proposed
(note 5)
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - -
Transfer 70 914 984 (188) 4,155 3,967 (74) 8,382 8,308
to/(from)
reserves
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - -
Return per 5.07p 1.63p 6.70p 4.61p 7.49p 12.10p 9.79p 15.08p 24.87p
ordinary
share (note
2)
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - - -
Return per - 2.61p 2.61p - 2.40p 2.40p - 4.94p 4.94p
zero
dividend
preference
share in
the
subsidiary
---------- ---------- ---------- ---------- --------- --------- --------- --------- ---------
- - - - -
Return per 5.07p 4.24p 9.31p 4.61p 9.89p 14.50p 9.79p 20.02p 29.81p
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.
- MORE -
- 4 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2004
Group and Company Balance Sheets at 30 June 2004
Group Company Group Company Group Company
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited)
30 June 30 June 30 June 30 June 31 December 31 December
2004 2004 2003 2003 2003 2003
£'000 £'000 £'000 £'000 £'000 £'000
Fixed asset investments
Listed in the United Kingdom 122,013 122,013 108,008 108,008 120,409 120,409
Subsidiary undertaking - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
122,013 122,013 108,008 108,008 120,409 120,409
Current assets
Debtors 1,645 1,645 3,270 3,270 1,070 1,070
Cash at bank and short term 140 140 1,247 1,247 315 315
deposits
---------- ---------- ---------- ---------- ---------- ----------
1,785 1,785 4,517 4,517 1,385 1,385
Creditors: amounts falling due
within one year (25,675) (25,675) (18,104) (18,104) (21,030) (21,030)
---------- ---------- ---------- ---------- ---------- ----------
Net current liabilities (23,890) (23,890) (13,587) (13,587) (19,645) (19,645)
---------- ---------- ---------- ---------- ---------- ----------
Total assets less current 98,123 98,123 94,421 94,421 100,764 100,764
liabilities
Creditors: amounts falling due
after
more than one year
Bank loans - - (5,000) (5,000) (5,000) (5,000)
Amounts owed to group undertaking - (35,685) - (32,974) - (34,310)
Zero dividend preference shares
in the subsidiary (35,685) - (32,974) - (34,310) -
---------- ---------- ---------- ---------- ---------- ----------
Total net assets 62,438 62,438 56,447 56,447 61,454 61,454
====== ====== ====== ====== ====== ======
Capital and reserves
Called-up share capital:
ordinary shares 2,801 2,801 2,771 2,771 2,801 2,801
Capital redemption reserve 26,302 26,302 26,302 26,302 26,302 26,302
Other capital reserves:
Share premium 9,034 9,034 8,398 8,398 9,034 9,034
Realised reserves 14,793 14,793 16,305 16,305 14,600 14,600
Unrealised reserves 8,417 8,417 1,764 1,764 7,696 7,696
Revenue reserve 1,091 1,091 907 907 1,021 1,021
---------- ---------- ---------- ---------- ---------- ----------
Equity shareholders' funds 62,438 62,438 56,447 56,447 61,454 61,454
====== ====== ====== ====== ====== ======
Net asset value per ordinary 111.44p 111.44p 101.84p 101.84p 109.68p 109.68p
share
(note 3) ====== ====== ====== ====== ====== ======
Funds attributable to the:
Ordinary shares 62,438 56,447 61,454
Zero dividend preference shares
in
the subsidiary 35,685 32,974 34,310
---------- ---------- ----------
98,123 89,421 95,764
====== ====== ======
Net asset value per:
Ordinary share 111.44p 101.84p 109.68p
Zero dividend preference share in
the subsidiary 67.84p 62.68p 65.22p
---------- ---------- ----------
Unit 179.28p 164.52p 174.90p
====== ====== ======
- MORE -
- 5 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2004
Group Cash Flow Statement
for the half year ended 30 June 2004
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 June 2004 30 June 2003 31 December 2003
£'000 £'000 £'000
Net cash inflow from operating activities 2,487 3,081 5,846
Net cash outflow from servicing of finance (637) (320) (648)
Net tax recovered - - 13
Net cash inflow/(outflow) from financial investment 1,098 4,729 (3,452)
Equity dividends paid (2,773) (2,744) (5,487)
--------- --------- -----------
Net cash inflow/(outflow) before financing 175 4,746 (3,728)
Net cash (outflow)/inflow from financing (364) (3,247) 4,295
--------- ---------- ----------
(Decrease)/increase in cash (189) 1,499 567
====== ====== ======
Notes to the Group Cash Flow Statement
Reconciliation of operating revenue to net cash inflow
from operating activities
Net revenue before interest payable and taxation 3,112 2,807 5,928
(Increase)/decrease in accrued income (7) 345 174
Increase in other debtors (2) (17) (3)
Increase in creditors 149 484 544
Tax deducted at source (11) (12) (19)
Management and performance fees charged to capital (754) (526) (778)
--------- --------- --------
Net cash inflow from operating activities 2,487 3,081 5,846
====== ====== ======
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash (189) 1,499 567
Net repayment/(drawdown) of loans 364 3,247 (3,629)
Exchange movements 59 (69) (91)
--------- ---------- ----------
Movement in net funds in the period 234 4,677 (3,153)
Net debt at the beginning of the period (22,094) (18,941) (18,941)
--------- ---------- -----------
Net debt at the end of the period (21,860) (14,264) (22,094)
====== ====== ======
Represented by:
Cash at bank and short term deposits 140 1,247 315
Debt falling due within one year (22,000) (10,511) (17,409)
Debt falling due after more than one year - (5,000) (5,000)
--------- ---------- -----------
Total (21,860) (14,264) (22,094)
====== ====== ======
- MORE -
- 6 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2004
Notes:
1. Accounting policies
a) Basis of Accounting
The accounts have been prepared on the historical cost basis of accounting,
modified to include the revaluation of investments. 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") (revised January 2003). All of the Company's operations
are of a continuing nature.
b) Group accounts
The Group accounts consolidate the accounts of the Company and of its
wholly-owned subsidiary, Henderson High Income Trust Securities plc.
c) 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. Returns per share
a) Returns per ordinary share
Revenue return per ordinary share is based on the earnings attributable to
the ordinary shares of £2,843,000 (30 June 2003: £2,556,000; 31 December
2003: £5,444,000) and on the 56,028,865 weighted average number of ordinary
shares in issue throughout the period (30 June 2003: 55,428,865; 31
December 2003: 55,578,043).
Capital return per ordinary share is based on the net capital gains for the
period of £914,000 (30 June 2003: £4,155,000; 31 December 2003: £8,382,000)
and on the 56,028,865 weighted average number of ordinary shares in issue
throughout the period (30 June 2003: 55,428,865; 31 December 2003:
55,578,043).
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 £1,375,000
(30 June 2003: £1,264,000; 31 December 2003: £2,600,000) based on the
52,603,865 zero dividend preference shares in issue (30 June 2003 and 31
December 2003: 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 5.07p per unit (30 June 2003: 4.61p; 31 December
2003: 9.79p).
Capital 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 4.24p per unit (30 June 2003: 9.89p; 31 December
2003: 20.02p).
- MORE -
- 7 -
HENDERSON HIGH INCOME TRUST PLC
Unaudited Interim Results for the half year ended 30 June 2004
Notes cont'd:
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 £62,438,000 (30 June 2003:
£56,447,000; 31 December 2003: £61,454,000) and on the 56,028,865 ordinary
shares in issue at 30 June 2004 (30 June 2003: 55,428,865; 31 December
2003: 56,028,865).
4. Net revenue
The net revenue after taxation of the Company dealt with in the interim
accounts of the Group was £2,843,000 (30 June 2003: £2,556,000; 31 December
2003: £5,444,000).
5. Dividends
A first interim dividend of 2.475p (2003: 2.475p) will be paid on 30 July
2004 on 56,028,865 ordinary shares (including ordinary shares held within
units), being the number of ordinary shares in issue at the record date of
9 July 2004.
A second interim dividend of 2.475p (2003: 2.475p) has been declared
payable on 29 October 2004 to shareholders registered at the close of
business on 8 October 2004. Funds have been accrued in the accounts on
56,028,865 ordinary shares (including ordinary shares held within units),
being the number of ordinary shares in issue on 28 July 2004, the date of
approval of these accounts.
6. Comparative information
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies
Act 1985. The financial information for the six months ended 30 June 2003
and 30 June 2004 has not been audited. The figures and financial
information for the year ended 31 December 2003 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 Independent 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.
- MORE -
- 8 -
HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2004
Statement of Total Return
for the half year ended 30 June 2004
(Unaudited) (Unaudited) (Audited)
Half year ended 30 June 2004 Half year ended 30 June Year ended 31 December 2003
2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Accrued
redemption
premium
receivable
from parent - 1,375 1,375 - 1,264 1,264 - 2,600 2,600
company
(note 2)
---------- --------- --------- --------- -------- ---------- -------- -------- --------
Gross - 1,375 1,375 - 1,264 1,264 - 2,600 2,600
revenue and
capital
gains
Administrative - - - - - - - - -
expenses
(note 3)
---------- --------- --------- --------- -------- ---------- -------- -------- --------
Net return
on ordinary
activities
before - 1,375 1,375 - 1,264 1,264 - 2,600 2,600
taxation
Taxation on
net return
on ordinary
activities - - - - - - - - -
---------- --------- --------- --------- -------- ---------- -------- -------- --------
Net return
on ordinary
activities
after - 1,375 1,375 - 1,264 1,264 - 2,600 2,600
taxation
Appropriations
in
respect of
non-equity
shares:
zero - (1,375) (1,375) - (1,264) (1,264) - (2,600) (2,600)
dividend
preference
shares
---------- --------- --------- --------- -------- ---------- -------- -------- --------
Transfer to - - - - - - - - -
reserves
====== ====== ====== ====== ====== ====== ====== ====== =====
Return per - - - - - - - - -
share:
Ordinary
====== ====== ====== ====== ====== ====== ====== ====== =====
Zero - 2.61p 2.61p - 2.40p 2.40p - 4.94p 4.94p
dividend
preference
(note 4)
====== ====== ====== ====== ====== ====== ====== ====== =====
The revenue columns of this statement represent the revenue account of
the Company.
- MORE -
- 9 -
HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2004
Balance Sheet
at 30 June 2004
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December 2003
2004 2003 £'000
£'000 £'000
Current assets
Debtors 35,685 32,974 34,310
---------- ---------- ----------
Net current assets 35,685 32,974 34,310
---------- ---------- ----------
Total net assets 35,685 32,974 34,310
===== ===== =====
Capital and reserves
Called-up share capital 26,302 26,302 26,302
Reserve for redemption premium 9,383 6,672 8,008
---------- ---------- ----------
35,685 32,974 34,310
===== ===== =====
Shareholders' funds attributable to:
Equity shareholders - - -
Non-equity shareholders 35,685 32,974 34,310
---------- ---------- ----------
35,685 32,974 34,310
===== ===== =====
Net asset value per:
Ordinary share - - -
===== ===== =====
Zero dividend preference share (note 5) 67.84p 62.68p 65.22p
===== ===== =====
- MORE -
- 10 -
HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2004
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") (revised January
2003). 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 1,375,000 (30 June 2003:
£1,264,000; 31 December 2003: £2,600,000) and on the 52,603,865 zero
dividend preference shares in issue at 30 June 2004 (30 June 2003 and 31
December 2003: 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 £35,685,000
(30 June 2003: £32,974,000; 31 December 2003: £34,310,000) and on the
52,603,865 zero dividend preference shares in issue at 30 June 2004 (30
June 2003 and 31 December 2003: 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. Comparative information
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies
Act 1985. The financial information for the six months ended 30 June 2003
and 30 June 2004 has not been audited. The figures and financial
information for the period ended 31 December 2003 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 Independent
Auditors which was unqualified and did not include a statement under either
section 237(2) or section 237(3) of the Companies Act 1985.
- MORE -
- 11 -
HENDERSON HIGH INCOME TRUST SECURITIES PLC
Unaudited Interim Results for the half year ended 30 June 2004
Notes cont'd:
8.
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 -
For further information please contact:
Alex Crooke Stephen Westwood
Fund Manager Head of Investment Trusts
Henderson High Income Trust plc Henderson Global Investors
Telephone: 020 7818 4447 Telephone: 020 7818 5517
Vicki Staveacre Stephen Phillips
Press Office Associate Director
Henderson Global Investors Henderson Global Investors
Telephone: 020 7818 4222 Telephone: 020 7818 6417
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 21 minutes ago Old Mutual Limited NPV (DI)
- 1 hour ago Spirent Communications
- 1 hour ago Pinewood Technologies Group
- 2 hours ago Hunting
- 2 hours ago Softcat