Annual Financial Report

RNS Number : 8440W

Henderson Smaller Cos Inv Tst PLC

06 August 2018

 

Legal Entity Identifier: 213800NE2NCQ67M2M998

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 MAY 2018

This announcement contains regulated information

Investment Objective

The Company aims to maximise shareholders' total returns (capital and income) by investing in smaller companies that are quoted in the United Kingdom.

Total Return Performance for the period ended 31 May 2018
	1 year %	3 years %	5 years %	10 years %
NAV1	15.9	48.0	115.2	299.0
Share Price2	23.8	51.0	137.3	368.9
Benchmark3	5.3	28.3	68.8	199.8
Average Sector NAV4	9.3	49.4	103.6	228.1
Average Sector Share Price5	10.5	50.4	105.9	244.7
FTSE All-Share Index	6.5	24.3	45.4	96.6

Performance Highlights	31 May 2018	31 May 2017
NAV per share at year end	1,046.9p	921.6p
Share price at year end	966.0p	799.0p
Discount at year end6	7.7%	13.3%
Gearing at year end	8.5%	9.2%
Dividend for the year7	21.0p	18.0p
Revenue return per share	22.8p	19.6p
Dividend yield8	2.2%	2.3%
Total net assets	£782m	£688m
Ongoing Charge excluding performance fee	0.42%	0.43%
Ongoing Charge including performance fee	0.99%	1.01%

1 Net Asset Value per ordinary share total return with income reinvested

2 Share price total return using mid-market closing price

3 Numis Smaller Companies Index (excluding investment companies) total return

4 Average NAV total return of the AIC UK Smaller Companies sector

5 Average share price total return of the AIC UK Smaller Companies sector

6 Calculated using published daily NAVs with debt at par including current year revenue

7 This represents an interim dividend of 6.0p and a proposed final dividend of 15.0p

8 Based on the ordinary dividends paid and payable for the year and the mid-market share price at year end

Sources: Morningstar for the AIC, Janus Henderson, Datastream

CHAIRMAN'S REPORT

It is with great pleasure I can report that yet again your Company has had an excellent year. The share price has risen by 23.8%, and the net assets by 15.9%, substantially outperforming our benchmark, the Numis Smaller Companies Index (excluding investment companies), by 10.6% on a total return basis.

Our Fund Manager, Neil Hermon, and his team  have now outperformed the benchmark in 14 of the 15 years in which he has managed the investment portfolio, as well as outperforming over the last one, three, five and ten years. And I am delighted to be able to report a 17% increase in the proposed total dividend for the year, our 15th consecutive year of dividend growth. Over the ten years to 31 May 2018, our net asset value total return is 299.0%, versus a total return from the benchmark of 199.8%. This is an impressive compound annual return to shareholders of 14.8% and the 10-year outperformance of 99.2% is clear evidence that thoughtful stock-picking can genuinely add value.

I would like to thank Neil and his colleagues in the Janus Henderson UK Equity team who include Indriatti van Hien, our Deputy Fund Manager, Shiv Sedani, Analyst, and Colin Hughes, a UK Small Cap Fund Manager at Janus Henderson, for the excellent job they have done for shareholders. I would also like to thank all the Janus Henderson staff and my Board for their efforts throughout the year on behalf of shareholders.

This year sees the retirement of Colin Hughes who has been at Janus Henderson Investors, or the companies that are in the group, for 46 years. I know all shareholders and the Board would want me to express our sincere thanks to him and wish him a very happy and long retirement.

Board Changes

At this year's AGM, Mary Ann Sieghart, our Senior Independent Director, will step down from the Board. I would like to thank her for the wise and professional advice and the great commitment she has given your Company over the last 10 years. We are in the process of recruiting a new Board member. Beatrice Hollond will assume the role of Senior Independent Director.

Revenue and Dividend

The revenue return per share has increased to 22.8p, compared with 19.6p for the previous year. The Board is proposing a final dividend for the year of 15.0p per share, making a total dividend for the year of 21.0p (2017: 18.0p), as an interim dividend of 6.0p was paid in March. This marks a 17% increase on the previous financial year and is our 15th consecutive year of dividend growth. The final dividend is, of course, subject to shareholder approval at the Annual General Meeting to be held in September.

Ongoing Charge

The Board regularly reviews the Ongoing Charge and monitors the expenses incurred by the Company. For the year ended 31 May 2018 the Ongoing Charge was 0.42%, which compares to a charge of 0.43% for the year ended 31 May 2017, when excluding the performance fee. The charge including the performance fee was 0.99% for the year ended 31 May 2018, this compares with the charge including performance fee of 1.01% last year. Further details of the Ongoing Charge are contained in the Annual Report.

Discount and Share Buy-backs

During the year, the AIC UK Smaller Companies sector as a whole traded at an average discount of 12.0% to NAV, with highs and lows of 13.3% and 10.1% respectively. I am pleased to report that at the year end, the Company's shares traded at a discount of 7.7%. The Company's discount ranged from 16.3% to 7.1%, with the average discount over the year being 12.5%.

The Board continues to monitor the discount and will consider the merits of buying back shares as markets evolve, though we do not currently believe that share buy-backs represent the most effective way of generating long term shareholder value. During the reporting year, no shares were bought back in the Company.

Outlook

Last year I wrote that two events had dominated, Brexit and Trump. Not much has changed in twelve months. Rarely a day goes past without Brexit and Trump commanding the news. There is genuine concern about the Brexit outcome and the potential fallout of the US entering into a period of trade wars with the rest of the world. However, global markets have continued to grow, companies have posted strong earnings growth and equity markets have remained robust. In some respects, the UK market feels less strong, with fears of job losses at companies that may be affected by Brexit, household names such as BT, M&S and RBS undergoing major changes in order to survive, and the footfall on high streets declining. But there is plenty of good news too: unemployment is at its lowest level since 1975, wages are at last increasing, and UK corporate profits hit a record high in 2017. As I have said in the past, active management is the only way to navigate these difficult markets and this year's results demonstrate that in Neil Hermon, your Company has a very effective active manager who will continue to seek out quality growth at the right price.

Annual General Meeting

The Annual General Meeting of the Company will be held at 11.30am on 14 September 2018 at the Registered Office, 201 Bishopsgate, London EC2M 3AE. We would encourage as many shareholders as possible to attend for the opportunity to meet the Board and to watch a presentation from Neil Hermon reviewing the year and looking forward to the year ahead.

The Company's AGM will be broadcast live on the internet. If you are unable to attend in person, you can watch the meeting as it happens by visiting www.janushenderson.com/trustslive and will also be able to submit questions online during the meeting.

Jamie Cayzer-Colvin

Chairman

FUND MANAGER'S REPORT

Fund Performance

The Company had an excellent year in performance terms - rising strongly in absolute terms and substantially outperforming its benchmark. The share price rose by 23.8% and the net asset value by 15.9%, on a total return basis. This compared to a rise of 5.3% (total return) from the Numis Smaller Companies Index (excluding investment companies). The outperformance came from a combination of underlying positive portfolio performance and a positive contribution from gearing in the Company. We have now outperformed the benchmark in 14 of the 15 years in which I have managed the investment portfolio.

Market - year in review

The year under review was a positive one for equity markets. Global economic conditions improved, with stronger growth around the world. Monetary conditions remained benign with supportive monetary policies from developed world central banks. Global geo-political concerns remained heightened with conflict in the Middle East, a deterioration of relations between Russia and the West and increased tensions on the Korean peninsula. Commodity prices rebounded with robust global economic growth and production cutbacks aiding a recovery in oil and metal prices.

In the UK the Conservative Government failed to gain a majority in the general election and is now reliant on a 'confidence and supply' arrangement with the Democratic Unionist Party. Meanwhile Brexit negotiations have made patchy progress.

The fundamentals of the corporate sector remained robust. Companies continued to grow their dividends whilst balance sheets remained strong. UK corporate earnings saw strong growth, helped by improving economic conditions and the weakness of sterling increasing the value of overseas earnings for UK companies.

Smaller companies marginally underperformed larger companies over the year. This is only the second year that the Numis Smaller Companies Index (excluding investment companies) has underperformed the FTSE All-Share Index in the last ten years.

Gearing

Gearing started the year at 9.2% and ended it at 8.5%. Debt facilities are a combination of £30 million 20-year unsecured loan notes at an interest rate of 3.33% and £60 million of short term bank borrowings. The controlled use of gearing was a positive contributor to performance in the year as markets rose and has been a significant positive over the 15 years I have managed the investment portfolio.

Attribution Analysis

The tables below show the top five contributors to, and the bottom five detractors from, the Company's relative performance.

Principal contributors	12 month return %	Relative contribution %
NMC Health	+ 55.1	+ 1.4
Renishaw	+ 46.7	+ 0.8
Victrex	+ 53.7	+ 0.8
Burford Capital	+ 79.8	+ 0.8
Intermediate Capital	+ 34.0	+ 0.7

NMC Health is a Middle Eastern based healthcare operation. Its main facilities are in the United Arab Emirates, particularly Dubai and Abu Dhabi. NMC has grown strongly since its IPO in 2012 through the building of new facilities and acquisitions. This growth looks set to continue, particularly given the positive structural opportunities in the UAE, driven by an under provision of state provided healthcare, the continued roll-out of mandatory health insurance and positive demographics. The acquisition strategy has supplemented the organic strategy by diversifying the business by geography and medical discipline. The company was elevated to the FTSE 100 Index in September 2017 and in line with our stated policy we divested the position by our financial year end.

Renishaw designs, develops and manufactures high technology precision measuring and calibration equipment. The business is a global leader in its field with strong patent protection. The company invests heavily in research and development to maintain its market leading technological position. Over the medium term the organic growth delivered has been one of the strongest in the capital goods sector. It has expanded its operations by diversifying into healthcare and additive manufacturing markets, both of which offer long term attractive growth. In the short term the company is enjoying the recovery in industrial capital expenditure, new investment in the smartphone production chain and, as a major exporter, the competitive benefits of a weaker pound. Renishaw, with a very strong balance sheet and a well invested production base, is superbly positioned for the long term.

Victrex is a manufacturer of a speciality thermoplastic PEEK. It is the world leader in its field with a dominant market share. Victrex has shown consistent long term growth as demand for PEEK has grown as customers look to replace metals with lighter plastics with similar thermal properties. Although demand for PEEK is subject to the vagaries of the economic cycle, longer term its use will continue to increase. Additionally Victrex has developed a very successful medical business with PEEK used particularly in spinal and arthroscopy operations. Victrex has recently expanded capacity as there are significant opportunities for growth in the medical, oil and gas, aerospace and smartphone markets.

Burford Capital is a provider of investment capital and risk solutions for the litigation industry. The company has an integrated business model as it takes both on-balance-sheet risk and derives fee revenues from its fund management business. Litigation is a nascent and growing market where returns are fundamentally uncorrelated to the stock market or business cycle. Burford is the largest player in this market globally. This investment provides us with exposure to structural growth in demand for litigation financing which has been driven by the practical solution it provides to the unfavourable accounting treatment of litigation on corporates and the temporary nature of equity in law firms. Management run a conservative balance sheet which provides optionality given the historically strong track record of generating high returns.

Intermediate Capital is an alternative finance provider and asset manager. It is a leading provider of mezzanine finance to LBO markets. It also owns a highly successful mezzanine, property lending and credit fund management operation. Its portfolio of investments are performing well but the primary growth engine of the business is the fund management operation where it is having real success in growing assets due to the strength of its performance, the quality of the team and underlying demand for its product in an income-hungry world. The management have also boosted the company's return on equity by returning substantial surplus capital.

Principal detractors	12 month return %	Relative contribution %
Safestyle	- 79.4	- 0.5
AA	- 45.1	- 0.5
Conviviality	- 100.0	- 0.5
Wizz Air1	+ 61.5	- 0.5
Ferrexpo1	+ 73.9	- 0.4
1 Not owned by the Company. Returns shown are for the seven month period to 31 December 2017 when the stock ceased to be included in the benchmark index.

Safestyle is a provider of windows, doors and conservatories. The last year has been tough for the business as market demand has softened due to a decline in consumer spending, particularly in large ticket items such as replacement double glazing. In addition the company has been targeted by a new competitor which was set up by the original founder of Safestyle. Although market conditions remain difficult, Safestyle benefits from a well invested manufacturing facility and a strong balance sheet and when market conditions recover the company is well placed for a sharp rebound in profitability.

AA is a roadside assistance and insurance group. The company has suffered from a combination of volatile demand for roadside assistance combined with an inflexibility in its cost base and an increase in insurance premium tax which reduced the ability to raise prices. In addition, upgrading the IT platform has taken longer and proved more costly than expected. Management have been changed after the high profile departure of the Executive Chairman. Although the company has high debt levels we still believe its franchise is strong and if the company delivers on its revised business plans then there is substantial upside in the share price.

Conviviality was a convenience store and drinks wholesaling business. After a very successful period of growth, boosted by organic and acquisitive growth, the company issued a severe profits warning in March 2018, citing margin pressure and a spreadsheet error in its forecasting model. This warning severely dented our confidence in the business and the management team and we sold our position. Subsequent to our sale the company discovered unrecorded cash flow liabilities and after failing to raise additional equity it went into administration.

Wizz Air is a low cost airline operator. The Company had no holding in Wizz Air. Wizz performed strongly, aided by capacity expansion, low fuel prices and strong growth in Eastern European economies.

Ferrexpo is an Ukranian provider of iron-ore. The Company had no holding in Ferrexpo. The iron-ore market was strong in 2017 with robust Chinese economic growth and production cutbacks aiding a recovery in prices. The Company has typically had an underweight position in the mining sector due to the volatile nature of commodity prices, the high leverage these companies usually employ, their position as price takers with little influence over the value of their output and their poor corporate governance.

Portfolio Activity

Trading activity in the portfolio was consistent with an average holding period of 4 years. Our approach is to consider our investments as long term in nature and to avoid unnecessary turnover. The focus has been on adding stocks to the portfolio that have good growth prospects, sound financial characteristics and strong management, at a valuation level that does not reflect these strengths. Likewise we have been employing strong sell disciplines to cut out stocks that fail to meet these criteria.

In the year we have added a number of new positions to our portfolio. These include:

Impax Asset Management is a specialist asset manager focused on sustainable investing. There has been an increased demand for ethically focused investment products from investors and as a result, Impax has been able to significantly grow its assets under management over the last 18 months. The company recently completed the acquisition of a US asset manager, Pax World Funds, which will add distribution scale and diversity to its business. With strong fund performance over 5 years, the increased demand for sustainable investment products and the Pax acquisition, Impax should be able to accelerate its assets under management over the medium term.

IntegraFin operates an investment platform, Transact, which is designed for use by independent financial advisers for their clients. The platform operates as a low cost investment wrapper that specialises in providing a portal for UK investment products including SIPPs and ISAs. The high quality customer service and active account management acts as a differentiator against competition and the business has seen good growth in funds under management since inception in 2000. With the company requiring little capital to grow, it is a high returns business which should be able to consistently return cash to shareholders.

Spire Healthcare is a leading private hospital operator in the UK with 39 hospitals, 11 clinics and 1 specialist cancer centre. We believe that Spire is a strategic asset in the context of the well-publicised issues the NHS faces. It has three main revenue streams; private medical insurance, self-pay and NHS patients. Our investment in Spire is premised on; a credible and more capital light growth strategy put in place by the new management team and an attractive starting valuation. We are aware of the earnings risk posed by NHS revenues, but we believe downside protection exists in the form of book value per share (Spire is the freeholder of a number of its assets) and the potential for its 30% owner (Mediclinic) to launch another bid for the company.

Ultra Electronics is a global aerospace and defence company specialising in the manufacture of marine products. The company had a tough 2017 as a result of the announcement of a UK defence review, but with global defence spending on the rise, led by the increased US defence budget, Ultra should benefit in the future. In addition, with the recent appointment of a new CEO and a substantial return of capital through a share buyback, the company should benefit from positive momentum over the medium term.

Victoria is a pan-European floor coverings manufacturer. The company has successfully bought, rationalised and integrated a number of UK carpet manufacturers, driving returns and margins higher whilst taking a significant market share. It has more recently expanded into the ceramic market in Europe through acquisitions in Italy and Spain. Led by a highly successful and ambitious management team the company is set to continue this consolidation phase, which should drive strong returns for shareholders.

In addition to the companies mentioned above, we invested in a number of initial public offerings (IPOs) in the year. These included Alpha Financial Markets, a consultancy for the investment management industry, Team17, a software games developer and publisher and TI Fluid Systems, a supplier of fluid carrying systems, fuel tanks and filter tubes to the automotive sector.

To balance the additions to our portfolio, we have disposed of positions in companies which we felt were set for poor price performance. We sold our holding in Dunelm, a homewares retailer, where the company has suffered from increased competition and a weaker housing market. We also disposed of our holding in Interserve, an international contractor and support services group, as losses on its Energy for Waste construction contracts increased debts to a level where the financial viability of the company was threatened. Other companies we sold due to a belief that they were structurally challenged or suffering from poor operational performance included Medica, a radiology services company; RPC, a plastic packaging group; UP Global Sourcing Group, a home products company; and Vectura, a developer of therapies for respiratory diseases.

We benefited from a level of takeover activity in the year. Eight portfolio companies received agreed bids. All the bidders, apart from one, were either foreign corporates or private equity groups. This reflects the open nature of the UK market, the strength of global corporate balance sheets and the low cost of debt. Within our portfolio, takeover bids were received for Aldermore, a challenger bank, from First Rand; Fenner, a mining and industrial equipment group, from Michelin; Imagination Technologies, a semiconductor company, from Canyon Bridge; Paysafe, a payment processing company, from Blackstone/CVC; Quantum Pharmaceuticals, a speciality drugs company, from Clinigen; Servelec, a healthcare IT provider, from Montagu Private Equity; SQS, an IT services company, from Assystem and ZPG, a comparison website and property portal group, from Silver Lake.

Portfolio Outlook

The following table shows the Company's top 10 stock positions and their active position versus the Numis Smaller Companies Index (excluding investment companies) at the end of May 2018.

Top ten active positions at 31 May 2018	Holding %	Index Weight %	Active Weight %
Bellway	3.1	-	3.1
Intermediate Capital	2.6	-	2.6
Renishaw	2.4	-	2.4
Melrose Industries	2.3	-	2.3
Victrex	2.2	-	2.2
Cineworld	2.1	-	2.1
Paragon	2.0	0.8	1.2
Clinigen	1.9	-	1.9
Dechra Pharmaceuticals	1.7	-	1.7
John Laing	1.7	0.7	1.0

A brief description of the largest active positions (excluding Intermediate Capital, Renishaw and Victrex, which are covered earlier) follows:

Bellway is a national UK housebuilder. The UK new housing market has seen an impressive recovery in the last few years, due to robust consumer confidence, low interest rates and Government initiatives, particularly Help to Buy. Margins, volumes and profits have been rising strongly. Bellway is looking to exploit these conditions by expanding its national footprint, whilst maintaining a strong land-bank and balance sheet. The outlook for the sector is aided by a benign land market as the number of competitors has reduced from the previous cycle, the structural under-supply of housing in the UK and the capital discipline Bellway and its peers are displaying.

Melrose Industries is a diversified engineering group whose raison d'être is to buy underperforming businesses, improve them and then sell the assets on. Essentially it is deploying a private equity model in the public markets. The company has had significant success in the past with its acquisitions of Dynacast, McKechnie, FKI and Elster, all of which have been sold for significant profit on cost. The management team are highly rated due to their demonstrable track record of making money for shareholders. In late 2016 Melrose acquired Nortek, a US based provider of building products. Indications are that the improvements to Nortek margins and return on capital employed are running ahead of plan. More recently Melrose acquired GKN, an aerospace and automotive supplier, and we believe there is substantial scope to improve margins and return on capital in its businesses.

Cineworld is an international cinema operator. The company has market leading positions in the UK, Israel and Eastern Europe. Historically growth has been driven by a rapid roll out of new capacity, particularly in Eastern Europe where cinema visits per capita markedly lag more developed economies. The company made a significant expansion in the year by acquiring Regal Entertainment, a leading US cinema chain. Although the US is a mature market, Regal's valuation was depressed by poor 2017 financial results, which were a consequence of a weak film release schedule, particularly over the summer months. This provided Cineworld an opportunity to acquire a good asset at a knock-down valuation. With a much stronger film slate and an opportunity to invest in a tired Regal asset base, the prospects for growth look good.

Paragon is principally a provider of buy-to-let mortgages. The company has changed its structure in the last few years by obtaining a banking licence, growing its lending in asset-backed, car finance and specialist residential markets and diversifying its funding sources into the retail market. The company enjoys a very strong capital position, enabling it to pay higher dividends whilst buying back some of its own stock. The introduction of new regulations on complex underwriting should help the specialist lenders like Paragon grow market share, and at a modest premium to asset value, we believe Paragon is good value.

Clinigen is a global speciality pharmaceutical services business. Its core activity is providing comparator drugs and other services for clinical trials and providing market access for drugs that are difficult to obtain or yet to be licensed. It also has a speciality pharmaceutical division, which looks to acquire niche drugs from major pharmaceutical companies, where management think they can enhance performance through additional regulatory approval or increased targeted marketing. The company has seen strong growth since its IPO in 2012 and this is likely to continue given the strength of the management team and the positive structural growth of its end markets.

Dechra Pharmaceuticals is an international specialist pharmaceuticals business that develops, manufactures and sells products exclusively for vets. It does this for companion animals, equine animals and food producing animals. Key product focus areas include dermatology, ophthalmology, endocrinology and antibiotics and vaccinations for food producing animals. Company strategy has been to grow the business both organically and inorganically and the long-standing CEO has successfully done this through growing the pipeline, diversifying geographically (most notably in the US) and undertaking some value accretive acquisitions. Our investment provides us with exposure to growing demand for veterinary pharmaceuticals as the trends of; the humanisation of pets and increase in demand for protein continue.

John Laing is an international originator, active investor and manager of infrastructure projects. Its business is focused on major transport, social and environmental infrastructure projects awarded under governmental public private partnership (PPP) programmes and renewable energy projects. It does this across a range of international markets including the UK, Europe, Asia Pacific and North America. Our investment in the company provides us with exposure to growing infrastructural expenditure globally. The company has a large and growing pipeline of opportunities and has recently raised further equity to capitalise on these opportunities. The stock trades at a discount to book value despite providing healthy NAV growth. We believe this discount should narrow over time.

Market Outlook

The UK economy is showing anaemic growth. Brexit negotiations stumble on, with intermittent progress. The date for the UK leaving the European Union is looming into view. There is clearly a range of outcomes but what deal the UK will end up with is, at this point, unclear. Extra complication is added by the weak position of the minority Conservative Government led by Theresa May who is struggling to deal with the conflicting demands of her MPs on Brexit.

This political uncertainty has made UK consumers cautious. Although unemployment is historically low, net disposable income growth has been constrained by the rising cost of living. Weakness in consumer spending and low consumer confidence is demonstrated by a moribund second hand housing market and weak sales of high ticket items such as cars, carpets and double glazing.

Outside the UK, economic conditions have improved, particularly in the US and Europe. Escalating trade tensions do provide a threat to this. The recent rises in US interest rates have flagged to investors that loose global monetary conditions are reversing. However the 'normalisation' of monetary policy will probably be a slow and measured process.

In the corporate sector, conditions are intrinsically stronger than they were during the financial crisis of 2008-9. Balance sheets are more robust and dividends are growing. In addition, a large proportion of UK corporate earnings comes from overseas, even among smaller companies, and should be boosted by the strength of the global economy and the relative weakness of sterling.

In terms of valuations, the equity market is roughly in line with long term averages. M&A remains a supportive feature for the smaller companies area. As corporate confidence improves, M&A will increase, especially as little or no return can currently be generated from cash and the cost of debt is historically low. We have seen increased interest in UK corporates from abroad, and given the relatively low valuation of UK equites and a weak currency, we expect this trend to continue.

In conclusion, the year under review has been an excellent one for the Company. Absolute and relative performance was very strong and our portfolio companies have, overall, performed robustly. Our investments are generally trading well, soundly financed and attractively valued. Additionally, the smaller company market continues to throw up exciting growth opportunities in which the Company can invest. We remain confident in our ability to generate significant value from a consistent and disciplined investment approach.

Neil Hermon

Fund Manager

INVESTMENT PORTFOLIO at 31 May 2018

Company	Principal activities	Valuation £'000	Portfolio %
Bellway	housebuilder	26,264	3.10
Intermediate Capital	mezzanine finance	21,946	2.59
Renishaw	precision measuring and calibration equipment	20,406	2.41
Melrose Industries	engineering group	19,588	2.31
Victrex	speciality chemicals	18,269	2.15
Cineworld	cinema operator	17,595	2.07
Paragon	buy to let mortgage provider	17,233	2.03
Clinigen1	pharmaceuticals	16,439	1.94
Dechra Pharmaceuticals	veterinary pharmaceuticals	14,232	1.68
John Laing	infrastructure investor	14,168	1.67
10 largest		186,140	21.95
Burford Capital1	litigation finance	13,532	1.59
Balfour Beatty	international contractor	12,682	1.49
Hunting	oil equipment and services	12,322	1.45
Ibstock	bricks manufacturer	11,480	1.35
Synthomer	speciality chemicals	11,293	1.33
Spectris	electronic control and process instrumentation	11,164	1.32
Vesuvius	materials technology for steel and foundry industry	11,138	1.31
Ultra Electronics	defence and aerospace products	10,888	1.28
OneSavings Bank	banks	10,735	1.27
St Modwen Properties	real estate investment and services	10,484	1.24
20 largest		301,858	35.58
ZPG	price comparison website and property portal	10,412	1.23
Aveva Group	design software	10,327	1.22
TI Fluid Systems	automotive supplier	10,048	1.18
Scapa1	technical tapes	9,856	1.16
Countryside	housebuilder	9,710	1.15
Sanne	investment management services	9,666	1.14
Northgate	commercial vehicle hire	9,582	1.13
RWS1	patent translation services	9,424	1.11
SIG	building materials distributor	9,359	1.10
Euromoney Institutional Investor	business to business information	9,236	1.09
30 largest		399,478	47.09
Oxford Instruments	advanced instrumentation equipment	9,170	1.08
Accesso1	leisure software provider	9,108	1.07
Jupiter Fund Management	investment management company	9,078	1.07
Ascential	exhibition organiser and data services	9,055	1.07
Brewin Dolphin	wealth management	8,837	1.04
Cairn Energy	oil & gas exploration and production	8,828	1.04
Spire Healthcare	hospital operator	8,765	1.03
GB Group1	data intelligence services	8,648	1.02
Learning Technologies Group1	e-learning	8,559	1.01
Victoria1	floor covering manufacturer	8,460	1.00
40 largest		487,986	57.52
IntegraFin	B2B financial platform	8,370	0.99
Midwich1	AV equipment distributor	8,330	0.98
Playtech	internet gaming software	8,326	0.98
Gamma Communications1	telecommunication services	8,316	0.98
NCC	IT security	8,079	0.95
Consort Medical	healthcare products	8,071	0.95
Softcat	software reseller	7,851	0.93
Just	enhanced annuity provider	7,729	0.91
Premier Oil	oil & gas exploration and production	7,554	0.89
Coats	global threads provider	7,535	0.89
50 largest		568,147	66.97
Company	Principal activities	Valuation £'000	Portfolio %
Team171	games software developer	7,453	0.88
Rotork	process control solutions	7,341	0.87
CLS	real estate investment and services	7,294	0.86
Grainger	residential property investor	6,570	0.77
Avon Rubber	defence and dairy industry products	6,558	0.77
Tarsus Group	exhibition organiser	6,548	0.77
Bodycote	engineering group	6,358	0.75
Alpha Financial Markets1	investment management consultancy	6,291	0.74
Eurocell	buildings products	6,264	0.74
Ricardo	engineering consultancy	6,074	0.72
60 largest		634,898	74.84
Computacenter	IT reseller	5,971	0.70
Tyman	building products	5,967	0.70
Equiniti	financial services outsourcer	5,796	0.68
Restore1	office service provider	5,555	0.66
AA	roadside assistance	5,456	0.64
Smart Metering Systems1	energy smart meters	5,395	0.64
Ted Baker	clothing retailer	5,364	0.63
Hollywood Bowl Group	ten pin bowling operator	5,358	0.63
Alfa Financial Software	financial services software	5,355	0.63
XP Power	electrical power products	5,301	0.63
70 largest		690,416	81.38
Faroe Petroleum1	oil & gas exploration and production	5,284	0.62
Howden Joinery	kitchen manufacturer and retailer	5,263	0.62
Lookers	automotive retailer	5,243	0.62
Gocompare.com	price comparison website	5,204	0.61
Crest Nicholson	housebuilder	5,175	0.61
Gym Group	gym operator	5,062	0.60
Sherborne Investors (Guernsey) C	speciality finance	4,999	0.59
Footasylum1	sportswear and footwear retailer	4,995	0.59
Polypipe	building products	4,992	0.59
Impax Asset Management1	SRI investment management company	4,987	0.59
80 largest		741,620	87.42
DFS	furniture retailer	4,840	0.57
Helical	office property investor and developer	4,837	0.57
XPS Pensions Group	pension consultant	4,781	0.57
Unite Group	student accommodation investor	4,757	0.56
Capital & Regional	retail property investor	4,620	0.54
Next Fifteen Communications1	PR and media services	4,592	0.54
Safestore Holdings	self storage operator	4,572	0.54
SDL	language software service provider	4,500	0.53
Tribal Group1	education support services & software	4,498	0.53
GVC	online gaming operator	4,415	0.52
90 largest		788,032	92.89
Go-Ahead Group	bus and rail group	4,414	0.52
Costain	contractor	4,307	0.51
SThree	recruitment company	4,012	0.47
ITE Group	exhibition organiser	3,987	0.47
Joules1	clothing retailer	3,939	0.46
Urban & Civic	real estate investment and services	3,927	0.46
Codemasters1	games software developer	3,544	0.42
RM	education software and services	3,317	0.39
Charles Taylor	insurance management services	3,247	0.38
Brown (N) Group	clothing retailer	3,203	0.38
100 largest		825,929	97.35
Company	Principal activities	Valuation £'000	Portfolio %
Elementis	chemicals	3,100	0.37
Marshall Motor1	automotive retailer	2,997	0.35
Severfield	industrial engineering	2,916	0.34
Blue Prism1	robot processing automation	2,742	0.32
Xaar	electronic equipment	2,623	0.31
Luceco	electrical products	1,833	0.22
Blancco Technology1	data erasure software	1,660	0.20
WYG1	engineering consultancy	1,512	0.18
Safestyle1	window replacement retailer	1,398	0.16
Sherborne Investors (Guernsey) B	speciality finance	812	0.10
110 Largest		847,522	99.90
Thruvison1	detection technology	808	0.10
Total Equity Investments		848,330	100.00

There were no convertible, fixed interest securities or non-equity holdings at 31 May 2018 (2017: None)

¹ quoted on the Alternative Investment  Market (AIM)

PRINCIPAL RISKS AND UNCERTAINTIES

The Board, with the assistance of the Manager, has carried out a robust assessment of the principal risks facing the Company which relate to the activity of investing in the shares of smaller companies that are listed (or quoted) in the United Kingdom. In carrying out this assessment, the Board has considered the market uncertainty arising from the result of the UK referendum to leave the European Union. Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move rapidly and it may not be possible to realise an investment at the Manager's assessment of its value. The companies in which investments are made may operate unsuccessfully, or fail entirely, such that shareholder value is lost. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service. The Board considers regularly the principal risks facing the Company in order to mitigate them as far as practicable. A fuller description of the principal risks and uncertainties follows. With the assistance of the Manager, the Board has drawn up a risk matrix which identifies the key risks to the Company. The Board policy on risk management has not materially changed from last year. The principal risks fall broadly under the following categories:

Investment activity and strategy

The Board reviews investment strategy at each Board meeting. An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may lead to underperformance against the Company's benchmark and the companies in its peer group; it may also result in the Company's shares trading at a wider discount to the net asset value per share. The Board manages these risks by ensuring a diversification of investments and a regular review of the extent of borrowings. The Manager operates in accordance with investment limits and restrictions determined by the Board; these include limits on the extent to which borrowings may be used. The Board reviews its investment limits and restrictions regularly and the Manager confirms its compliance with them each month. The Manager provides the Directors with management information, including performance data and reports and shareholder analysis. The Board monitors the implementation and results of the investment process with the Fund Manager, who attends all Board meetings, and reviews regularly data that monitors risk factors in respect of the portfolio.

Accounting, legal and regulatory

In order to qualify as an investment trust the Company must comply with Section 1158 of the Corporation Tax Act 2010. A breach of Section 1158 could result in the Company losing investment trust status and, as a consequence, capital gains realised within the Company's portfolio would be subject to corporation tax. The Section 1158 criteria are monitored by the Manager and the results are reported to the Directors at each Board meeting. The Company must comply with the provisions of the Companies Act 2006 and, as the Company has a premium listing on the London Stock Exchange, the Company must comply with Listing, Prospectus and Disclosure Guidance and Transparency Rules of the UKLA.

A breach of the Companies Act could result in the Company and/or the Directors being fined or becoming the subject of criminal proceedings. Breach of the UKLA Rules could result in the suspension of the Company's shares which would in turn lead to a breach of Section 1158. The Board relies on its Company Secretary and its professional advisers to ensure compliance with the Companies Act and UKLA Rules.

Operational

Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the Custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. Janus Henderson has contracted some of its operational functions, principally those relating to trade processing, investment administration and accounting, to BNP Paribas Securities Services. Details of how the Board monitors the services provided by Janus Henderson and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal control section of the Corporate Governance Statement of the Annual Report.

Financial instruments and the management of risk

By its nature as an investment trust, the Company is exposed in varying degrees to market risk (comprising market price risk, currency risk and interest rate risk), liquidity risk and credit and counterparty risk. An analysis of these financial risks and the Company's policies for managing them are set out in the notes of the Annual Report.

VIABILITY STATEMENT

The Company is a long term investor; the Board believe it is appropriate to assess the Company's viability over a five year period in recognition of the Company's long term horizon and what the Board believe to be investors' horizons, taking account of the Company's current position and the potential impact of the principal risks and uncertainties as documented in the Strategic Report.

The assessment has considered the impact of the likelihood of the principal risks and uncertainties facing the Company, in particular investment strategy and performance against benchmark, whether from asset allocation or the level of gearing, and market risk, in severe but plausible scenarios, and the effectiveness of any mitigating controls in place.

The Board took into account the liquidity of the portfolio and the borrowings in place when considering the viability of the Company over the next five years and its ability to meet liabilities as they fall due. This included consideration of the duration of the Company's loan and borrowing facilities and how a breach of any covenants could impact on the Company's net asset value and share price.

The Board does not expect there to be any significant change in the current principal risks and adequacy of the mitigating controls in place. Also the Directors do not envisage any change in strategy or objective or any events that would prevent the Company from continuing to operate over that period as the Company's assets are liquid, its commitments are limited and the Company intends to continue to operate as an investment trust. Only a substantial financial crisis affecting the global economy could have an impact on this assessment. Whilst there is currently uncertainty in the markets due to the UK's negotiations to leave the European Union, the Board does not believe that this will have a long term impact on the viability of the Company and its ability to continue in operation.

Based on this assessment, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five year period.

FUTURE DEVELOPMENTS

The future success of the Company is dependent primarily on the performance of its investments, which will to a significant degree reflect the performance of the stock market and the Manager. Although the Company invests in companies that are listed (or quoted) in the United Kingdom, the underlying businesses of those companies are affected by various economic factors, many of an international nature. The Board's intention is that the Company will continue to pursue its investment objective in accordance with its investment policy. Further comment on the outlook for the Company is given in the Chairman's Report and in the Fund Manager's Report.

RELATED PARTY TRANSACTIONS

The Company's transactions with related parties in the year were with the Directors and the Manager. 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 expenses and remuneration for which there were no outstanding amounts payable at the year end. Directors' shareholdings are disclosed in the Annual Report.

In relation to the provision of services by the Manager, 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 the Manager affecting the financial position of the Company during the year under review. More details on transactions with the Manager, including amounts outstanding at the year end, are given in notes to the financial statements in the Annual Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES (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 IFRS as adopted by the European Union on a going concern basis, 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

Jamie Cayzer-Colvin

Chairman

STATEMENT OF COMPREHENSIVE INCOME

		Year ended 31 May 2018			Year ended 31 May 2017
Notes		Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
2	Investment income	18,662	-	18,662	15,988	-	15,988
3	Other income	138	-	138	172	-	172
	Gains on investments held at fair value through profit or loss	-	97,561	97,561	-	145,291	145,291
	Total income	18,800	97,561	116,361	16,160	145,291	161,451
	Expenses
4	Management and performance fees	(723)	(5,772)	(6,495)	(579)	(4,674)	(5,253)
	Other expenses	(622)	-	(622)	(566)	-	(566)
	Profit before finance costs and taxation	17,455	91,789	109,244	15,015	140,617	155,632
	Finance costs	(433)	(1,010)	(1,443)	(387)	(903)	(1,290)
	Profit before taxation	17,022	90,779	107,801	14,628	139,714	154,342
	Taxation	-	-	-	(10)	-	(10)
	Profit for the year and total comprehensive income	17,022	90,779	107,801	14,618	139,714	154,332
5	Earnings per ordinary share - basic and diluted	22.79p	121.52p	144.31p	19.57p	187.03p	206.60p

The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

 

STATEMENT OF CHANGES IN EQUITY

		Year ended 31 May 2018
		Retained earnings
Notes		Share capital £'000	Capital redemption reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total equity £'000
	Total equity at 1 June 2017	18,676	26,745	623,009	20,030	688,460
	Total comprehensive income: Profit for the year	-	-	90,779	17,022	107,801
	Transactions with owners, recorded directly to equity:
6	Ordinary dividends paid	-	-	-	(14,193)	(14,193)
	Total equity at 31 May 2018	18,676	26,745	713,788	22,859	782,068
		Year ended 31 May 2017
		Retained earnings
Notes		Share capital £'000	Capital redemption reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total equity £'000
	Total equity at 1 June 2016	18,676	26,745	483,295	17,364	546,080
	Total comprehensive income: Profit for the year	-	-	139,714	14,618	154,332
	Transactions with owners, recorded directly to equity:
6	Ordinary dividends paid	-	-	-	(11,952)	(11,952)
	Total equity at 31 May 2017	18,676	26,745	623,009	20,030	688,460

 

BALANCE SHEET

Notes			At 31 May 2018 £'000	At 31 May 2017 £'000
	Non current assets
	Investments held at fair value through profit or loss		848,330	751,736
	Current assets
	Receivables		3,334	3,761
	Tax recoverable		19	19
	Cash and cash equivalents		4,889	3,829
			8,242	7,609
	Total assets		856,572	759,345
	Current liabilities
	Payables		(8,612)	(9,314)
	Bank loans		(36,079)	(31,769)
			(44,691)	(41,083)
	Total assets less current liabilities		811,881	718,262
	Non current liabilities
	Financial liabilities		(29,813)	(29,802)
	Net assets		782,068	688,460
	Equity attributable to equity shareholders
7	Share capital		18,676	18,676
	Capital redemption reserve		26,745	26,745
	Retained earnings:
	Capital reserves		713,788	623,009
	Revenue reserve		22,859	20,030
	Total equity		782,068	688,460
8	Net asset value per ordinary share		1,046.9p	921.6p

STATEMENT OF CASH FLOWS

	Year ended
	31 May 2018 £'000	31 May 2017 £'000
Operating activities
Profit before taxation	107,801	154,342
Add back interest payable	1,443	1,290
Gains on investments held at fair value through profit or loss	(97,561)	(145,291)
Purchases of investments	(196,351)	(156,105)
Sales of investments	197,318	145,587
Increase in receivables	(21)	(55)
Decrease/(increase) in amounts due from brokers	866	(391)
Increase in accrued income	(418)	(703)
Increase in payables	774	3,132
(Decrease)/increase in amounts due to brokers	(1,480)	5,393
Taxation on investment income	-	(6)
Net cash inflow from operating activities before
interest and taxation	12,371	7,193
Interest paid	(1,428)	(1,298)
Net cash inflow from operating activities	10,943	5,895
Financing activities
Equity dividends paid	(14,193)	(11,952)
Drawdown/(repayment) of bank loans	4,310	(338)
Net cash outflow from financing activities	(9,883)	(12,290)
Increase/(decrease) in cash and cash equivalents	1,060	(6,395)
Cash and cash equivalents at the start of the year	3,829	10,224
Cash and cash equivalents at the end of the year	4,889	3,829

NOTES TO THE FINANCIAL STATEMENTS

1	Accounting policies - basis of preparation a) Basis of preparation The Henderson Smaller Companies Investment Trust plc (the "Company") is a company incorporated and domiciled in the United Kingdom under the Companies Act 2006. The financial statements of the Company for the year ended 31 May 2018 have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. These comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the IFRS Interpretations Committee ("IFRS IC") that remain in effect, to the extent that IFRS have been adopted by the European Union. The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the revaluation of certain financial instruments held at fair value through profit or loss. The principal accounting policies adopted are set out below. These policies have been applied consistently throughout the year. Where presentational guidance set out in the Statement of Recommended Practice (the "SORP") for investment trusts issued by the Association of Investment Companies (the "AIC") in November 2014 and updated in February 2018 with consequential amendments is consistent with the requirements of IFRS. The Directors have sought to prepare the financial statements on a basis consistent with the recommendations of the SORP.
2	Investment income						2018 £'000		2017 £'000
	Income from companies listed or quoted in the United Kingdom:
	Dividends						15,906		14,253
	Special dividends						2,133		1,164
	Property income distributions						623		571
	Total investment income						18,662		15,988
3	Other Income						2018 £'000		2017 £'000
	Bank and other interest						2		1
	Underwriting income (allocated to revenue)1						136		171
							138		172
	1 None of the income receivable from sub-underwriting commitments was allocated to capital during the year (2017: £nil)
		2018			2017
4	Management and performance fees	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000		Capital return £'000		Total return £'000
	Management fee	723	1,686	2,409	579		1,350		1,929
	Performance fee	-	4,086	4,086	-		3,324		3,324
		723	5,772	6,495	579		4,674		5,253
	A summary of the Management Agreement is given in the Strategic Report of the Annual Report.
5	Earnings per ordinary share The earnings per ordinary share figure is based on the net profit for the year of a £107,801,000 (2017: £154,332,000) and on 74,701,796 (2017: 74,701,796) ordinary shares, being the weighted average number of ordinary shares in issue during the year. The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below: The Company has no securities in issue that could dilute the return per ordinary share. Therefore the basic and diluted earnings per ordinary share are the same.
						2018 £'000		2017 £'000
	Net revenue profit					17,022		14,618
	Net capital profit					90,779		139,714
	Net total profit					107,801		154,332
	Weighted average number of ordinary shares in issue during the year					74,701,796		74,701,796
						2018		2017
	Revenue earnings per ordinary share					22.79p		19.57p
	Capital earnings per ordinary share					121.52p		187.03p
	Total earnings per ordinary share					144.31p		206.60p

6	Dividends	Record Date	Pay date	2018 £'000		2017 £'000
	Final dividend: 13.0p (2016:11.0p) for the year ended 31 May 2017	8 September 2017	9 October 2017	9,711		8,217
	Interim dividend: 6.0p (2017:5.0p) for the year ended 31 May 2018	16 February 2018	9 March 2018	4,482		3,735
				14,193		11,952
	Subject to approval at the Annual General Meeting, the proposed final dividend of 15.0p per ordinary share will be paid on 28 September 2018 to shareholders on the register of members at the close of business on 31 August 2018. The proposed final dividend for the year ended 31 May 2018 has not been included as a liability in these financial statements. Under IFRS, the final dividend is not recognised until approved by the shareholders. All dividends have been paid or will be paid out of revenue profits. The total dividends payable in respect of the financial year which form the basis of the test under section 1158 of the Corporation Tax Act 2010 are set out below:
					2018 £'000		2017 £'000
	Revenue available for distribution by way of dividends for the year				17,022		14,618
	Interim dividend for the year ended 31 May 2018: 6.0p (2017: 5.0p) per ordinary share				(4,482)		(3,735)
	Final dividend for the year ended 31 May 2017: 13.0p (based on 74,701,796 shares in issue at 10 August 2017)				-		(9,711)
	Proposed final dividend for the year ended 31 May 2018: 15.0p (based on 74,701,796 shares in issue at  3 August 2018)				(11,205)		-
					1,135		1,172
7	Share capital				2018 £'000		2017 £'000
	Allotted, issued authorised and fully paid:
	74,701,796 ordinary shares of 25p each (2017: 74,701,796)				18,676		18,676
	During the year the Company made no purchases of its own issued ordinary shares (2017: nil). Since 31 May 2018 the Company has not purchased any ordinary shares.
8	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 £782,068,000 (2017: £688,460,000) and on the 74,701,796 ordinary shares in issue at 31 May 2018 (2017: 74,701,796). The Company has no securities in issue that could dilute the net asset value per ordinary share. The movement during the year of the net assets attributable to the ordinary shares was as follows:
				2018 £'000		2017 £'000
	Net assets attributable to the ordinary shares at 1 June			688,460		546,080
	Net gains for the year			107,801		154,332
	Ordinary dividends paid in the year			(14,193)		(11,952)
	Net assets attributable to the ordinary shares at 31 May			782,068		688,460
9	Going Concern The Company's shareholders are asked every three years to vote for the continuation of the Company. An ordinary resolution to this effect was put to the Annual General Meeting ("AGM") held on 23 September 2016 and passed by a substantial majority of the shareholders. The assets of the Company consist almost entirely of securities that are listed (or listed on AIM) and, accordingly, the Directors believe that the Company has adequate financial resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. Having assessed these factors, the principal risks and other matters discussed in connection with the Viability Statement, the Board has decided that it is appropriate for the financial statements to be prepared on a going concern basis.
10	2018 Financial Statements
	The figures and financial information for the year ended 31 May 2018 are compiled from an extract of the latest financial statements of the Company and do not constitute the statutory accounts for that year. Those financial statements included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. They have not yet been delivered to the Registrar of Companies.
11	2017  Financial Statements
	The figures and financial information for the year ended 31 May 2017 are compiled from an extract of the published financial statements of the Company and do not constitute the statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.
12	Annual Report
	The Annual Report for the year ended 31 May 2018 will be posted to shareholders in August 2018 and copies will be available thereafter from the Corporate Secretary at the Company's Registered Office, 201 Bishopsgate, London EC2M 3AE.
13	Annual General Meeting The Annual General Meeting will be held on Friday 14 September 2018 at 11.30am.
14	Website This document, and the Annual Report for the year ended 31 May 2018, will be available on the following website: www.hendersonsmallercompanies.com.

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.

For further information please contact:

Neil Hermon Fund Manager The Henderson Smaller Companies Investment Trust plc Telephone: [phone]

James de Sausmarez Director and Head of Investment Trusts Janus Henderson Investors Telephone: [phone]

 

END

 

 

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