Final Results

Henderson Smaller Cos Inv Tst PLC 14 July 2003 HENDERSON GLOBAL INVESTORS THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC EMBARGOED FOR RELEASE AT 7.00 AM ON MONDAY 14 JULY 2003 11 July 2003 THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2003 KEY POINTS • Portfolio performance shows significant improvement in the second half of the financial year - strong outperformance of benchmark achieved in this period • Portfolio restructured under new investment team - 50% of assets changed • Confidence in outlook for UK smaller companies and in the ability of the Trust to outperform PERFORMANCE Comparative total return figures: 1 year First Half Second Half The Henderson Smaller Companies Investment Trust plc -32.3 -40.4 13.6 FTSE SmallCap (ex ICs) Index -17.8 -24.4 8.8 Hoare Govett Small Companies (ex ICs) Index -15.1 -22.9 10.1 The Chairman's Statement: I am disappointed, in this my first statement as Chairman, to record a sharp fall in the net asset value per share over the year under review. I am very pleased to report, however, that during the second half of the year our investment performance showed a marked improvement, both in absolute and in relative terms. This was not enough to make up for earlier losses but is confirmation that the Trust has turned around. There have been a number of changes. We have a new manager, a new chairman and a new benchmark. We have every confidence that we will perform well in the year ahead, giving our investors a well-chosen exposure to Britain's smaller companies. Management At the end of September the Board announced its agreement with the investment manager, Henderson Global Investors, that Mr Neil Hermon, together with his colleague Theresa Wat, would take responsibility for the management of the Trust's portfolio early in November 2002. We have retained the philosophy of searching out smaller companies with above average growth potential. However, the new management team has broadened the portfolio and has applied an analytical and disciplined approach to valuation to ensure that growth is bought - and retained - only at a reasonable price. The Board is very encouraged by the progress that our fund managers have made in the months since their appointment. - 2 - THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2003 Benchmark The Board has agreed to adopt the Hoare Govett Smaller Companies (excluding investment companies) Index as the Trust's benchmark, with effect from 1 June 2003. This index is a more suitable measure of the performance of our portfolio. We are continuing to show performance against the FTSE SmallCap (excluding investment companies) Index in our annual report. Revenue and Dividend Our revenue account shows a positive earnings per share this year, partly because the yield of our portfolio has increased and partly because the basis on which the management fee has been calculated since 1 October 2002 has had the effect of reducing our costs. We intend to continue our policy of charging all management expenses and finance costs to revenue. Capital growth, not income, remains our priority but we expect to at least maintain our dividend. We propose again a single and final dividend for the year of 0.5p per share. Share Buy-Backs During the year we purchased 19 million shares for cancellation, representing 14% of those in issue at 31 May 2002. However, in recent months there has been an encouraging interest in our shares from new investors and the discount at which the shares trade has narrowed. We have not bought back any shares since the beginning of March 2003 but we shall seek to renew the authority to do so at the forthcoming annual general meeting. Board Membership James Nelson joined the Board at the end of September 2002, following the retirement of Michael Meyer. John Alexander left the Board in November 2002 and Peter Cadbury did so in March 2003. I should like to record my thanks to Peter Cadbury. He steered the Board with patience and skill through times which were far from easy for investors in growth companies. I also record with sadness that Andrew Stack, who had been managing the portfolio with John Alexander, died from cancer in April. Prospects The recovery of our performance this year has been assisted by the investment of our long-term borrowings and by a rebound in the share prices of many smaller companies. The economic outlook is far from certain. However, we do expect our Trust to outpace its peer group in the coming year. There is a continuation vote scheduled for the annual general meeting in 2004. Shareholders will decide then whether this Trust, with a distinguished history lasting more than a century, should continue in business. We think we have strong grounds for winning both that vote and our shareholders' confidence. J D Fishburn 11 July 2003 - 3 - THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2003 Group Statement of Total Return (incorporating the consolidated revenue account) Year ended 31 May 2003 Year ended 31 May 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital losses from investments - (85,899) (85,899) - (240,230) (240,230) Income from fixed asset investments 4,042 - 4,042 4,592 - 4,592 Other interest receivable and similar 98 - 98 111 - 111 income ----------- ----------- ------------- ------------- ------------- ---------- Gross revenue and capital losses 4,140 (85,899) (81,759) 4,703 (240,230) (235,527) Management fee (1,078) - (1,078) (2,734) - (2,734) Other administrative expenses (408) - (408) (352) - (352) Irrecoverable VAT (202) - (202) (416) - (416) ----------- ----------- ------------ ------------- ------------ ------------- Net return/(loss) on ordinary activities before interest payable and taxation 2,452 (85,899) (83,447) 1,201 (240,230) (239,029) Interest payable (2,208) - (2,208) (2,381) - (2,381) ----------- ---------- ------------- ------------- ------------- ------------ Net return/(loss) on ordinary activities before taxation 244 (85,899) (85,655) (1,180) (240,230) (241,410) Taxation on net return on ordinary 1 - 1 (1) - (1) activities ----------- ---------- ------------ ------------- ------------- ------------- Net return/(loss) on ordinary activities after taxation 245 (85,899) (85,654) (1,181) (240,230) (241,411) ------------ ----------- ----------- ------------- ------------- ----------- Dividends - ordinary shares (note 3) Final: 0.50p (2002: 0.50p) (561) - (561) (654) - (654) ------------- ----------- ----------- ------------- ------------ ----------- Transfer from reserves (316) (85,899) (86,215) (1,835) (240,230) (242,065) ======= ======= ======= ======= ======= ======= Return/(loss) per ordinary share (note 0.20p (69.35)p (69.15)p (0.77)p (157.34)p (158.11)p 1) ======= ======= ======= ======= ======= ======= The revenue columns of this statement represent the consolidated revenue accounts of the Group. - MORE - - 4 - THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2003 Balance Sheets Group Group Company Company 2003 2002 2003 2002 £'000 £'000 £'000 £'000 Fixed asset investments United Kingdom listed investments at market value 153,434 251,208 153,434 251,208 AIM investments at market value 7,368 20,248 7,368 20,248 Unquoted investments at directors' valuation 896 1,907 896 1,907 Subsidiary undertaking - - 2,271 2,272 ------------- ------------- ------------- ------------- 161,698 273,363 163,969 275,635 ------------- ------------- ------------- ------------- Current assets Debtors 1,571 1,815 1,571 1,815 Cash at bank and short term deposits 2,719 40 2,718 38 ------------- ------------- ------------- ------------- 4,290 1,855 4,289 1,853 Creditors: amounts falling due within one year (3,498) (8,935) (5,768) (11,205) ------------- ------------- ------------- ------------- Net current assets/(liabilities) 792 (7,080) (1,479) (9,352) ------------- ------------- ------------- ------------- Total assets less current liabilities 162,490 266,283 162,490 266,283 Creditors: amounts falling due after more than one year (20,000) (20,000) (20,000) (20,000) ------------- ------------- ------------- ------------- Total net assets 142,490 246,283 142,490 246,283 ======== ======== ======== ======== Capital and reserves Called-up share capital 29,248 34,004 29,248 34,004 Other capital reserves 109,751 208,472 112,022 210,744 Revenue reserve 3,491 3,807 1,220 1,535 ------------- ------------- ------------- ------------- Shareholders' funds (including non-equity interests of £9,000; 2002: £9,000) 142,490 246,283 142,490 246,283 ======== ======== ======== ======== Net asset value per ordinary share 121.8p 181.1p 121.8p 181.1p ======== ======== ======== ======== -MORE- - 5 - THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2003 Group Cash Flow Statement 2003 2003 2002 2002 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 2,797 1,282 Servicing of finance Debenture interest paid (1,050) (2,100) Bank overdraft and loan interest paid (111) (261) ------------- ------------- Net cash outflow from servicing of finance (1,161) (2,361) Taxation UK tax recovered 4 - Overseas tax recovered 1 - ------------- ------------- Net tax recovered 5 - Financial investment Purchases of investments (69,041) (115,920) Sales of investments 96,294 137,809 ------------- ------------- Net cash inflow from financial investment 27,253 21,889 Equity dividends paid (656) (784) Management of liquid resources Cash withdrawn from deposit - 10,000 Financing Purchase of own shares (17,560) (44,863) (Repayment)/drawdown of loans (8,000) 8,000 ------------- ------------- Net cash outflow from financing (25,560) (36,863) ------------- ------------- Increase/(decrease) in cash 2,678 (6,837) ======== ======== Reconciliation of net cash flow to movements in net debt Increase/(decrease) in cash as above 2,678 (6,837) Cash inflow from management of liquid resources - (10,000) Cash outflow/(inflow) from debt financing 8,000 (8,000) ------------- ------------- Change in net debt resulting from cash flows 10,678 (24,837) Exchange movements 1 1 ------------- ------------- Movement in net debt in the year 10,679 (24,836) Net debt at 1 June (27,960) (3,124) ------------- ------------- Net debt at 31 May (17,281) (27,960) ======== ======== -MORE- - 6 - THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2003 Notes: 1. Return/(loss) per ordinary share The revenue return per ordinary share is based on the earnings attributable to the ordinary shares of £245,000 (2002: losses of £1,181,000) and on the weighted average number of ordinary shares in issue during the year of 123,856,800 (2002: 152,680,943). The capital loss per ordinary share is based on the net capital losses for the year of £85,899,000 (2002: losses of £240,230,000) and on the weighted average number of ordinary shares in issue during the year of 123,856,800 (2002: 152,680,943). 2. Issued share capital There were 116,956,840 ordinary shares in issue at 31 May 2003 (31 May 2002: 135,980,999). 3. Dividend The recommended final dividend of 0.5p per ordinary share, subject to approval at the annual general meeting, will be paid on 1 October 2003 to shareholders on the register of members at the close of business on 5 September 2003. The final dividend accrued in respect of the year ended 31 May 2003, at 0.5p per ordinary share, amounts to £585,000. The buy-backs of the Company's ordinary shares, after 31 May 2002 but before the record date of the final dividend for the year ended on that date, resulted in a write-back of £24,000 for dividends accrued in respect of the year ended 31 May 2002 but not in the event payable. The £561,000 shown is the sum of these two figures. 4. Basis of consolidation The Group accounts consolidate the accounts of the Company and of its wholly owned subsidiary undertaking, Henderson Smaller Companies Finance Limited. 5. 2003 accounts The preliminary figures for the year ended 31 May 2003 are an extract from the Group's accounts for that year. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 6. 2002 accounts The figures and financial information for the year ended 31 May 2002 are an extract of the latest published accounts 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 contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. -MORE- - 7 - THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2003 7. Annual General Meeting The full annual report and accounts will be posted to shareholders in late August 2003 and copies will be available thereafter from the Secretary at the Company's Registered Office, 4 Broadgate, London EC2M 2DA. The Annual General Meeting will be held on Friday 26 September 2003 at 2.00 pm. - ENDS - For further information please contact : Neil Hermon Fund Manager The Henderson Smaller Companies Investment Trust plc Telephone: 020 7818 4351 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 Director of Corporate Affairs Henderson Global Investors Telephone: 020 7818 4222 This information is provided by RNS The company news service from the London Stock Exchange

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