Final Results
Henderson Smaller Cos Inv Tst PLC
24 July 2006
Page 1 of 18
24 July 2006
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
KEY POINTS
• Good performance*
- NAV total return 31%
- Benchmark total return 30%
• Proposed dividend increased by 17% to 1.35p per share
• Confidence in the outlook for UK smaller companies and in the ability
of the Trust to outperform
*source: Fundamental Data/Datastream
Extracts from the Chairman's Statement
I am pleased to report a year of good investment performance. The net asset
value per share increased by 31%, on a total return basis. By comparison our
benchmark index returned 30%. This result is despite a disappointing first half
and the impact of the market correction that began shortly before our year end.
A principal contribution to performance is the disciplined and diligent approach
of our fund management team at Henderson, Neil Hermon and Theresa Wat. In the
three and a half years since they took over the Trust's management, the net
asset value per share has increased by 188% on a total return basis.
In common with other UK companies that publish consolidated accounts, we adopted
IFRS last year. This is our first annual report to reflect the new accounting
standards. There are a number of changes but only two of the new requirements
have an effect on the net asset value per share. First, our investments are now
described as 'held at fair value through profit or loss'. As such they are
valued at bid (or selling) prices rather than at mid-market prices. The effect
on the valuation of the portfolio is minimal, being a reduction in the opening
valuation of £169,000 (or 0.07%). Second, dividends are no longer included in
the accounts as payable until they have been approved. Accordingly, the
dividend payable in respect of the year ended 31 May 2005 is added back to the
assets at that date and shown as paid, in the new Statement of Changes in
Equity, in the year ended 31 May 2006.
In the annual report last year, I referred to the revision of our fee
arrangements with Henderson. The new terms, which were effective for the whole
of the year under review, comprise principally a reduction in the rate at which
the annual management fee is calculated and the introduction of a performance
fee. I am pleased to report that our results have generated a performance fee,
all of which is allocated to capital.
Page 2 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Extracts from the Chairman's Statement, continued
The revenue account has strengthened. Investment income has risen. The revenue
return per share rose by 27% to 1.83p. We propose a single and final dividend
for the year of 1.35p per share, an increase of 17% on that paid last year.
During the year we bought back and cancelled one and a half million shares,
equivalent to about 1.5% of those in issue at 31 May 2005, at an average
discount (calculated by valuing the debenture stock at par) of just over 18%.
Paul Manduca retires from the Board at the conclusion of the Annual General
Meeting on 29 September 2006. He has served the Company with great loyalty for
some 23 years, initially as Fund Manager and for the past 19 years as a
non-executive director. We shall miss his enormous investment experience and
his particular expertise in investment trust matters. We are delighted to
welcome Keith Percy to the Board. He meets fully the qualities and skills that
we identified for the appointment and we look forward very much to working with
him.
The absolute returns achieved in the past year have exceeded expectations but
the recent market correction, together with a marked increase in volatility,
remind us that equity investment can at times be a rough ride. However, we are
confident about the general outlook. Company valuations are not unreasonable
and corporate activity continues to provide support to share prices. As ever,
prudent stock selection remains the key to success and we remain confident of
our fund managers' proven abilities in this regard.
Page 3 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Consolidated Income Statement
for the year ended 31 May 2006
Year ended 31 May 2005
Year ended 31 May 2006 Restated (note 5)
Revenue Capital Revenue Capital
return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment income 5,743 - 5,743 5,320 - 5,320
Other income 151 - 151 136 - 136
Gains on investments held at fair
value
- 65,745 65,745 - 39,946 39,946
through profit or loss
---------- ---------- ---------- ---------- ---------- ----------
Total income 5,894 65,745 71,639 5,456 39,946 45,402
Expenses
Management and performance fees (1,120) (583) (1,703) (1,120) - (1,120)
Other expenses (377) - (377) (319) - (319)
--------- ---------- ---------- ----------- ----------- ---------
Profit before finance costs and
taxation 4,397 65,162 69,559 4,017 39,946 43,963
Finance costs (2,554) - (2,554) (2,454) - (2,454)
--------- -------- -------- -------- --------- ---------
Profit before taxation 1,843 65,162 67,005 1,563 39,946 41,509
Taxation - - - - - -
--------- -------- -------- -------- --------- ---------
Profit for the year 1,843 65,162 67,005 1,563 39,946 41,509
====== ====== ====== ====== ====== =====
Earnings per ordinary share (note 1.83p 64.62p 66.45p 1.44p 36.73p 38.17p
2)
====== ====== ====== ====== ====== =====
The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS.
The revenue return and capital return columns are supplementary to this and are
prepared under guidance published by the Association of Investment Trust
Companies.
All items in the above statement derive from the continuing operations.
All income is attributable to the equity holders of The Henderson Smaller
Companies Investment Trust plc, the parent company.
There are no minority interests.
Page 4 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Consolidated and Parent Company Statements of Changes in Equity
for the year ended 31 May 2006
Consolidated
Year ended 31 May 2006
Called up Capital Other
share redemption capital Revenue
capital reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000
Balance at 31 May 2005 (as restated) 25,414 20,002 167,325 5,330 218,071
Buy-backs of ordinary shares (367) 367 (2,962) - (2,962)
Profit for the year - - 65,162 1,843 67,005
Ordinary dividend paid - - - (1,161) (1,161)
---------- ---------- ---------- ---------- ----------
Balance at 31 May 2006 25,047 20,369 229,525 6,012 280,953
====== ====== ====== ===== ======
Consolidated
Year ended 31 May 2005
Called up Capital Other
share redemption capital Revenue
capital reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000
Balance at 31 May 2004 (as restated) 28,691 16,725 148,210 4,862 198,488
Buy-backs of ordinary shares (3,277) 3,277 (20,831) - (20,831)
Profit for the year - - 39,946 1,563 41,509
Ordinary dividend paid - - - (1,095) (1,095)
---------- ---------- ---------- ---------- ----------
Balance at 31 May 2005 25,414 20,002 167,325 5,330 218,071
====== ====== ====== ===== ======
Company
Year ended 31 May 2006
Called up Capital Other
share redemption capital Revenue
capital reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000
Balance at 31 May 2005 (as restated) 25,414 20,002 169,594 3,061 218,071
Buy-backs of ordinary shares (367) 367 (2,962) - (2,962)
Profit for the year - - 65,160 1,845 67,005
Ordinary dividend paid - - - (1,161) (1,161)
---------- ---------- ---------- ---------- ----------
Balance at 31 May 2006 25,047 20,369 231,792 3,745 280,953
====== ====== ====== ===== ======
Company
Year ended 31 May 2005
Called up Capital Other
share redemption capital Revenue
capital reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000
Balance at 31 May 2004 (as restated) 28,691 16,725 150,480 2,592 198,488
Buy-backs of ordinary shares (3,277) 3,277 (20,831) - (20,831)
Profit for the year - - 39,945 1,564 41,509
Ordinary dividend paid - - - (1,095) (1,095)
---------- ---------- ---------- ---------- ----------
Balance at 31 May 2005 25,414 20,002 169,594 3,061 218,071
====== ====== ====== ===== ======
Page 5 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Consolidated and Parent Company Balance Sheets
at 31 May 2006
ConsolidatedRestated Company
Restated
(note 5) (note 5)
Consolidated Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Non current assets
Investments held at fair value through
profit or loss 317,663 245,058 319,930 247,327
----------- ----------- ----------- -----------
Current assets
Other receivables 2,266 1,157 2,266 1,157
Cash and cash equivalents 958 - 958 -
---------- ---------- ---------- ----------
3,224 1,157 3,224 1,157
---------- ---------- ---------- ----------
---------- ---------- --------- ----------
Total assets 320,887 246,215 323,154 248,484
====== ====== ====== ======
Current liabilities
Other payables (925) (560) (3,192) (2,829)
Bank loans and overdrafts (19,000) (7,575) (19,000) (7,575)
---------- ---------- ---------- ----------
(19,925) (8,135) (22,192) (10,404)
---------- ---------- ---------- ----------
Total assets less current liabilities 300,962 238,080 300,962 238,080
Non current liabilities
Financial liabilities (20,009) (20,009) (20,009) (20,009)
---------- ---------- ---------- ----------
Net assets 280,953 218,071 280,953 218,071
---------- ---------- ---------- ----------
Equity attributable to equity
shareholders
Called up share capital 25,047 25,414 25,047 25,414
Capital redemption reserve 20,369 20,002 20,369 20,002
Retained earnings
Other capital reserves 229,525 167,325 231,792 169,594
Revenue reserve 6,012 5,330 3,745 3,061
---------- ----------- ----------- ----------
Total equity 280,953 218,071 280,953 218,071
====== ====== ====== ======
Net asset value per ordinary share (note
4) 280.4p 214.5p 280.4p 214.5p
====== ====== ====== ======
Page 6 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Consolidated and Parent Company Cash Flow Statements
for the year ended 31 May 2006
Year ended Year ended
31 May 2006 31 May 2005
Consolidated Company Consolidated Company
£'000 £'000 £'000 £'000
Operating activities
Profit before taxation 67,005 67,005 41,509 41,509
Add back interest paid 2,557 2,557 3,503 3,503
Less: gains on investments held at fair value
through profit or loss (65,745) (65,743) (39,946) (39,945)
Less: net (purchases)/sales of investments held
at fair value though profit or loss (6,860) (6,860) 21,363 21,363
(Increase)/decrease in other receivables (423) (423) 265 265
Increase in amounts due from brokers (690) (690) (2) (2)
Increase/(decrease) in other payables 412 410 (918) (919)
Decrease in amounts due to brokers (47) (47) (894) (894)
---------- --------- --------- ---------
Net cash (outflow)/inflow from operating
activities before interest and taxation (3,791) (3,791) 24,880 24,880
Interest paid (2,557) (2,557) (3,503) (3,503)
Taxation on investment income (7) (7) (3) (3)
--------- ---------- ---------- ----------
Net cash (outflow)/inflow from operating activities (6,355) (6,355) 21,374 21,374
===== ===== ===== =====
Financing activities
Equity dividend paid (1,150) (1,150) (1,106) (1,106)
Buy-backs of ordinary shares (2,962) (2,962) (20,831) (20,831)
Drawn down/(repayment) of loans 11,786 11,786 (286) (286)
--------- -------- ---------- -----------
Net cash from/(used in) financing 7,674 7,674 (22,223) (22,223)
===== ===== ====== ======
Increase/(decrease) in cash and cash equivalents 1,319 1,319 (849) (849)
Cash and cash equivalents at the start of the year (361) (361) 488 488
--------- -------- --------- -----------
Cash and cash equivalents at the end of the year 958 958 (361) (361)
===== ===== ====== ======
Page 7 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts
1. Accounting Policies
(a) Basis of preparation
The consolidated financial information for the year ended 31 May 2006
has been prepared in accordance with International Financial Reporting
Standards ('IFRS'), and with those parts of the Companies Act 1985
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 International Accounting Standards Committee ('IASC') that
remain in effect, to the extent that IFRS have been adopted by the
European Union.
The accounts have been prepared on the historical cost basis, except
for the revaluation of certain financial instruments. The principal
accounting policies adopted are set out below. Where presentational
guidance set out in the Statement of Recommended Practice ('the SORP')
for investment trusts issued by the Association of Investment Trust
Companies ('the AITC') in December 2005 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.
These financial statements are presented in pounds sterling because
that is the currency of the primary economic environment in which the
Group operates and is therefore considered to be the functional currency.
1. (b) First time adoption of IFRS
The date of transition to IFRS for the Group is 1 June 2004. The IFRS
accounting policies set out herein have been applied retrospectively
to the opening balance sheet as at 1 June 2004 and all subsequent
periods. The disclosures required by First-time Adoption of
International Financial Reporting Standards ('IFRS 1') concerning the
transition from UK GAAP to IFRS are given in notes 5 and 6.
1. (c) Basis of consolidation
The Group accounts consolidate the accounts of the Company and of its
wholly owned subsidiary undertaking, Henderson Smaller Companies
Finance Limited. The inter-group balances are eliminated on
consolidation.
Page 8 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
1. (d) Investments held at fair value through profit or loss
All investments are designated upon initial recognition as held at
fair value through profit or loss. Assets are de-recognised at the
trade date of the disposal. Proceeds are measured at fair value, which
is regarded as the proceeds of sale less any transaction costs. The
fair value of the financial instruments is based on their quoted bid
price at the balance sheet date, without deduction for the estimated
future selling costs. Unquoted investments are valued by the directors
using primary valuation techniques such as earnings, multiples, recent
transactions and net assets. Where fair value cannot reliably be
measured the investment will be carried at the previous reporting date
value unless there is evidence that the investment has since been
impaired, in which case the value will be reduced.
Changes in the fair value of investments held at fair value through
profit and or loss and gains and losses on disposal are recognised in
the Income Statement as 'Gains or losses on investments held at fair
value through profit or loss'. Also included within this caption are
transaction costs in relation to the purchase or sale of investments,
including the difference between the purchase price of an investment
and its bid price at the date of purchase.
1. (e) Presentation of Income Statement
In order to better reflect the activities of an investment trust
company, and in accordance with guidance issued by the Association of
Investment Trust Companies ('AITC'), supplementary information which
analyses the Income Statement between items of a revenue and capital
nature has been presented alongside the Income Statement. In
accordance with the Company's status as a UK investment company under
section 266 of the Companies Act 1985, net capital returns may not be
distributed by way of dividend. Additionally, the net revenue is the
measure the directors believe appropriate in assessing the Group's
compliance with certain requirements set out in section 842 of the
Income and Corporation Taxes Act 1988.
1. (f) Income
Dividends receivable on equity shares are recognised as revenue for
the year on an ex-dividend basis. Special dividends are treated as
revenue return or as capital return, depending on the facts of each
individual case. Income from fixed interest debt securities is
recognised using the effective interest rate method. The trading
profits of the subsidiary undertaking, which represent realised gains
and losses on the sale of current asset investments, are dealt with in
the revenue column of the Income Statement as a revenue item. Bank
deposit interest is accounted for on an accruals basis. Underwriting
commission is recognised as it is earned.
Page 9 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
1. (g) Expenses
All expenses and interest payable are accounted for on an accruals
basis. All administration expenses, including the management fee and
interest payable, are charged to the revenue column of the Income
Statement. Expenses which are incidental to the purchase or sale of
an investment are charged to the capital column of the Income
Statement and allocated to the other capital reserves.
Purchase and sale transaction costs for the year ended 31 May 2006
were £328,000 and £98,000 respectively (2005: transaction costs of
purchase £250,000; transaction costs of sales £116,000).
These comprise mainly stamp duty and commission.
Any performance fee including related irrecoverable VAT, is allocated
wholly to capital, reflecting the fact that, although they are
calculated on a total return basis, they are expected to be
attributable largely, if not wholly, to capital performance.
1. (h) Taxation
The tax expense represents the sum of the tax currently payable and
deferred tax.
The tax currently payable is based on the taxable profit for the
period. Taxable profit differs from net profit as reported in the
Income Statement because it excludes items of income or expense that
are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Group's liability for
current tax is calculated using tax rates that were applicable at the
balance sheet date.
In line with the recommendations of the SORP, the allocation method
used to calculate tax relief on expenses presented against capital
returns in the supplementary information in the Income Statement is
the 'marginal basis'. Under this basis, if taxable income is capable
of being offset entirely by expenses presented in the revenue return
column of the Income Statement, then no tax relief is transferred to
the capital return column.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are recognised for
all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will
be available against which deductible temporary differences can be
utilised. Investment trusts which have approval as such under section
842 of the Income and Corporation Taxes Act 1988 are not liable for
taxation on capital gains.
The carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part
of the asset to be recovered.
Page 10 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
Deferred tax is calculated at the tax rates that are expected to apply
in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the Income Statement, except
when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
1. (I) Foreign currency
For the purposes of the consolidated accounts, the results and
financial position of each entity is expressed in pounds sterling,
which is the functional currency of the Company and the presentational
currency of the Group. Sterling is the functional currency because it
is the currency of the primary economic environment in which the Group
operates.
Transactions recorded in overseas currencies during the year are
translated into sterling at the appropriate daily exchange rates.
Assets and liabilities denominated in overseas currencies at the
balance sheet date are translated into sterling at the exchange rates
ruling at that date.
1. (j) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are
short-term, highly liquid investments that are readily convertible to
known amounts of cash and that are subject to an insignificant risk of
changes in value.
1. (k) Bank borrowings
Interest-bearing bank loans and overdrafts are recorded as the
proceeds received, net of direct issues costs. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs, are accounted for on an accruals basis in the Income
Statement using the effective interest rate method and are added to
the carrying amount of the instrument to the extent that they are not
settled in the period in which they arise.
2. Earnings per ordinary share
The earnings per ordinary share figure is based on the net gains for the
year of £67,005,000 (2005: £41,509,000) and on 100,827,720 (2005:
108,747,775) 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.
Page 11 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
2. Earnings per ordinary share, continued
31 May 2005
31 May Restated
2006 (note 5)
£'000 £'000
Net revenue gain 1,843 1,563
Net capital gain 65,162 39,946
-------- --------
Net total gain 67,005 41,509
===== =====
Weighed average number of
ordinary shares in issue during
the year 100,827,720 108,747,775
pence pence
Revenue earnings per ordinary
share 1.83 1.44
Capital earnings per ordinary
share 64.62 36.73
--------- --------
Total earnings per ordinary share 66.45 38.17
===== =====
3. Ordinary share capital
At 31 May 2006 there were 100,186,282 ordinary shares in issue (2005:
101,656,282). During the year ended 31 May 2006 the Company bought
1,470,000 of its own issued ordinary shares in the market for cancellation
(2005: 13,105,558).
4. Net asset value per share
The net asset value per ordinary share is based on the net assets
attributed to the ordinary shares of £280,953,000 (2005; £218,071,000 as
restated) and on the 100,186,282 ordinary shares in issue at 31 May
2006 (2005; 101,656,282).
Page 12 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
5. (a) Restatement of balances as at and for the year ended 31 May 2005
As at 1 June 2005 the Company adopted International Financial
Reporting Standards. In accordance with IFRS 1 (First-time Adoption
of International Financial Reporting Standards) the following is a
reconciliation of the results as at and for the year ended 31 May
2005, previously reported under the applicable UK Accounting Standards
and the SORP, to the restated IFRS results.
Consolidated
Previously reported Adjustments
31 May Restated
2005 31 May 2005
Note £'000 £'000 £'000
Fixed assets
Investments 1 245,227 (169) 245,058
Current assets 1,157 - 1,157
Current liabilities 2 (9,304) 1,169 (8,135)
Total assets less current ---------- -------- ----------
liabilities 237,080 1,000 238,080
Provision for liabilities and
charges 3 (20,000) (9) (20,009)
Investments ---------- -------- ----------
217,080 991 218,071
====== ===== ======
Capital and reserves
Called up share capital 3 25,423 (9) 25,414
Capital redemption reserve 20,002 - 20,002
Capital reserve - realised 4 123,221 (123,221) -
Capital reserve - unrealised/
revaluation reserve 4 44,273 (44,273) -
Other capital reserves 1, 4 - 167,325 167,325
Revenue reserve 2 4,161 1,169 5,330
---------- --------- ----------
217,080 991 218,071
====== ===== ======
Net asset value per share 213.54p 0.98p 214.52p
====== ===== ======
Page 13 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
Notes to the reconciliation
1. Investments are classified as held at fair value through profit or loss
under IFRS and are carried at bid prices which total their fair value. They
were carried at mid prices previously. The aggregate difference, being a
revaluation downwards of £169,000, also decreases other capital reserves.
2. No provision has been made for the final dividend on the ordinary shares
for the year ended 31 May 2005 of £1,169,000. Under IFRS, the final
dividend is not recognised until approved by the shareholders.
3. Under IFRS the Company's preference stock is classified as debt.
4. The 'capital reserve - realised' and the 'capital reserve - unrealised' are
now reclassified as 'other capital reserves'.
5. (a) Restatement of balances as at and for the year ended 31 May 2005,
continued
Company
Previously reported 31 Adjustments
May 2005 Restated 31 May
2005
Note £'000 £'000 £'000
Investments 1 247,496 (169) 247,327
Current assets 1,157 - 1,157
Creditors: amounts falling
due 2
within one year (11,573) 1,169 (10,404)
---------- --------- ----------
Total assets less current 237,080 1,000 238,080
liabilities
Creditors: amounts falling 3 (20,000) (9) (20,009)
due ---------- --------- -----------
after one year 217,080 991 218,071
====== ===== ======
Capital and reserves
Called up share capital 3 25,423 (9) 25,414
Capital redemption reserve 20,002 - 20,002
Capital reserve - realised 4 123,221 (123,221) -
Capital reserve - unrealised/
revaluation reserve 4 46,542 (46,542) -
Other capital reserves 1, 4 - 169,594 169,594
Revenue reserve 2 1,892 1,169 3,061
---------- --------- ----------
217,080 991 218,071
====== ===== ======
Net asset value per share 213.54p 0.98p 214.52p
====== ===== ======
Page 14 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
Notes to the reconciliation
1. Investments are classified as held at fair value through profit or loss
under IFRS and are carried at bid prices which total their fair value They
were carried at mid prices previously. The aggregate difference, being a
revaluation downwards of £169,000, also decreases other capital reserves.
2. No provision has been made for the final dividend on the ordinary shares
for the year ended 31 May 2005 of £1,169,000. Under IFRS, the final
dividend is not recognised until approved by the shareholders.
3. Under IFRS the Company's preference stock is classified as debt.
4. The 'capital reserve - realised' and the 'capital reserve - unrealised' are
now reclassified as 'other capital reserves'.
5. (b) Reconciliation of the Statement of Total Return to the Income
Statement for the year ended 31 May 2005
Under IFRS the Income Statement is the equivalent of the Statement of
Total Return as reported previously.
EPS
2005 impact
Note £'000 pence
Net return on ordinary activities after taxation
Per Statement of Total Return 41,484 -
Change from mid to bid basis at 31 May 2004 1 194 0.18
Change from mid to bid basis at 31 May 2005 1 (169) (0.16)
--------- -------
Net gain per Income Statement 41,509 0.02
===== ====
Notes to the reconciliation
1. The portfolio valuations at 31 May 2004 and 31 May 2005 are valued at fair
value under IFRS. These values are lower than the previous valuations by
£194,000 and £169,000 respectively.
Page 15 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
5. (c) Reconciliation of the Cash Flow Statement for the year ended 31 May
2005
(Audited)
Previously Effect Adjusted
reported of cash flows
cash flows transition
2006 to IFRS 2005
Note £'000 £'000 £'000
Net cash inflow from operating
activities 1 4,410 16,964 21,374
Returns on investments and
servicing of finance 1 (3,503) 3,503 -
Taxation - - -
Net cash inflow from financial - -
investment 20,467 (20,467) -
Equity dividends paid 2 (1,106) 1,106 -
--------- --------- --------
Net cash inflow before
financing 2 20,268 1,106 21,374
Financing 2 (21,117) (1,106) (22,223)
--------- -------- --------
Decrease in cash (849) - (849)
====== ===== =====
Notes to the reconciliation
1. Servicing of finance, taxation and net cash inflow from financial
investment have now been analysed within operating activities.
2. Equity dividends paid on equity shares are now analysed within financing.
6. Restatement of opening balances as at 31 May 2004
As at 1 June 2005 the Company adopted International Financial Reporting
Standards with a date of transition of 1 June 2004. In accordance with
IFRS 1 the following is a reconciliation of the results as at and for the
year ended 31 May 2004, previously reported under the applicable UK
Accounting Standards and the SORP, to the restated IFRS results.
Page 16 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
Notes to the Accounts, continued
Consolidated Company
Previously Previously
reported 31 reported Adjustments Restated
May Adjustments Restated 31 May
2004 31 May 2004 2004 31 May 2004
£'000 £'000 £'000 £'000 £'000 £'000
Note
Fixed assets
Investments 1 226,669 (194) 226,475 228,939 (194) 228,745
Current assets 1,894 - 1,894 1,894 - 1,894
Current liabilities 2 (11,020) 1,148 (9,872) (13,290) 1,148 (12,142)
---------- ---------- ---------- ---------- ---------- ----------
Total assets less current
liabilities 217,543 954 218,497 217,543 954 218,497
Provisions for liabilities
and charges (20,000) (9) (20,009) (20,000) (9) (20,009)
---------- ---------- ---------- ---------- ---------- ----------
197,543 945 198,488 197,543 945 198,488
====== ====== ====== ====== ====== ======
Capital and reserves
Called up share capital 3 28,700 (9) 28,691 28,700 (9) 28,691
Capital redemption reserve 16,725 - 16,725 16,725 - 16,725
Capital reserve - realised 4 121,809 (121,809) - 121,809 (121,809) -
Capital reserve -
unrealised/
revaluation reserve 4 26,595 (26,595) - 28,865 (28,865) -
Other capital reserves 1, 4 - 148,210 148,210 - 150,480 150,480
Revenue reserve 2 3,714 1,148 4,862 1,444 1,148 2,592
---------- ---------- ---------- ---------- ---------- ----------
197,543 945 198,488 197,543 945 198,488
====== ====== ====== ====== ====== ======
Net asset value per 172.13p 0.83p 172.96p 172.13p 0.83p 172.96p
ordinary share ---------- -------- --------- ---------- ---------- ----------
Page 17 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
6. Restatement of opening balances as at 31 May 2004, continued
Notes to the reconciliation
1. Investments are classified as held at fair value under IFRS and are
carried at bid prices which total their fair value. Previously, under
UK GAAP, they were carried at mid prices. The aggregate difference,
being a revaluation downwards of £194,000, also decreases other
capital reserves.
2. No provision has been made for the final dividend on the ordinary
shares for the year ended 31 May 2004 of £1,148,000. Under IFRS, the
final dividend is not recognised until approved by the shareholders.
3. Under IFRS the Company's preference stock is classified as debt.
4. The 'capital reserve - realised' and the 'capital reserve -
unrealised' are now reclassified as 'other capital reserves'.
7. Dividend
Subject to approval at the annual general meeting, the recommended final
dividend of 1.35p per ordinary share will be paid on 6 October 2006 to
shareholders on the register of members at the close of business on 1
September 2006.
8. Basis of consolidation
The Group accounts consolidate the accounts of the Company and of its
wholly owned subsidiary undertaking, Henderson Smaller Companies Finance
Limited.
9. 2006 accounts
The preliminary figures for the year ended 31 May 2006, which do not
constitute statutory accounts, are an extract from the Group's draft
accounts for the year. These accounts have not yet been delivered to the
Registrar of Companies, nor have the auditors yet reported on them.
10. 2005 accounts
The figures and financial information for the year ended 31 May 2005 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.
11. Annual report and AGM
The full annual report and accounts will be posted to shareholders in
August 2006 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 29 September 2006 at
2.00 pm.
Page 18 of 18
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2006
For further information please contact:
Neil Hermon
Fund Manager
The Henderson Smaller Companies Investment Trust plc
Telephone: 020 7818 4351
Theresa Wat
Deputy Fund Manager
The Henderson Smaller Companies Investment Trust plc
Telephone: 020 7818 4644
James de Sausmarez
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 3349
Sarah Gibbons-Cook
Investor Relations and PR Manager
Henderson Global Investors
Telephone: 020 7818 3198
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 10 minutes ago I(X) Net Zero NPV
- 14 minutes ago Future Metals Nl (DI)
- 1 hour ago Currys
- 2 hours ago Triad Group
- 2 hours ago Triad Group