Final Results
Henderson TR Pacific Inv. Trust PLC
5 February 2002
HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
4 February 2002
Henderson TR Pacific Investment Trust plc, one of the largest Investment Trusts
specialising in the Far East excluding Japan and Australasia, announces
preliminary results for the year ended 31 December 2001.
Commenting on market conditions Chairman Iain Dale, said:
'The Far East was not immune from the turmoil affecting world stock markets in
2001. There were wide swings in sentiment with no clear, overall or positive
direction.... This company's investment policy focuses squarely on opportunities
for capital growth across the region, but conditions for most of 2001 made
growth difficult to find....Going forward aggressive easing of monetary policy
has set the scene for global recovery and leading indicators continue to show
that this should begin this year, at least in the USA.'
Key Extracts from the Preliminary Statement
(Unaudited) (Audited)
31 December 2001 31 December 2000
Net Asset Value per ordinary share 79.0p 85.7p
Proposed Dividend per share:
- Final Ordinary 0.25p 0.25p
- Special 0.25p 0.30p
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
• The trust suffered a negative total return of 7.7%, compared with a total
return of -2.3% for the peer group and +0.5% for the benchmark index.
• Region's best performing markets were South Korea and Taiwan rising 35.9%
and 13.6% respectively (sterling adjusted) while Hong Kong and Singapore
fell by 22.5% and 18.8% respectively.
• There continued to be a strong focus on North East Asian economies and the
Trust has increased exposure to South Korea, which became the largest
weighted market at 28.2% of total investments at year-end. Weightings in
Hong Kong and China were reduced correspondingly.
For further information contact:-
Michael Watt, Director and Manager David Hardy
Telephone: 020 7818 4100 Binns & Co
Telephone: 020 7786 9600
Stephen Westwood Vicki Staveacre
Head of Investment Trusts Henderson Press Office
Telephone: 020 7818 5517 Telephone: 020 7818 4028
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Extract from the Chairman's Statement
The Far East was not immune from the turmoil affecting world stock markets in
2001. There were wide swings in sentiment with no clear, overall or positive
direction. This unfortunate situation was aggravated by US stock market
downturns and the 11 September attacks.
Performance
Of the major stock markets, South Korea and Taiwan did best, achieving sterling
adjusted rises of 35.9% and 13.6% respectively. On the downside, Hong Kong and
Singapore fell by 22.5% and 18.8% in sterling terms. The trust suffered a
negative total return of 7.7% compared with a total return of -2.3% for the peer
group and +0.5% for the benchmark index, the MSCI Far East (Free) Ex-Japan
Index. Having managed to beat a flat index performance at the interim stage, the
second half showed a disappointing lag compared with both the benchmark index
and the peer group of investment trust companies. This was due to the adoption
of a more defensive investment stance in September which included a reduction in
the utilisation of borrowings. The portfolio was not, therefore, appropriately
positioned for the strong recovery seen in Far East stock markets in the final
quarter.
Dividend
As our policy focuses on seeking capital growth the company's revenues are not
material and dividends are low. We have proposed a maintained final dividend
payment of 0.25p net per share. In order to maintain the company's status as an
investment trust, we are paying a special dividend of 0.25p net per share, to
ensure no more than 15% of our investment income is retained. The additional
income arose because our cautious investment stance led to our holding an
increased number of higher yielding investments.
Challenging Environment
Economic growth turned sharply down across the region with only China and South
Korea of the major economies managing to achieve respectable growth rates. For
most of 2001 there were two powerful forces working against the region whose
economies remain highly sensitive to economic conditions in the USA. Firstly,
the recession in the USA proved more severe than had been expected and secondly,
the terrorist attacks on America caused major uncertainties over the earnings
prospects of even the fastest growing companies. There were relentless
reductions in Asian company profits forecasts, predominantly in technology
related sectors, as orders fell sharply and most companies were left with
substantial idle capacity. Central banks, most notably the USA's, responded with
aggressive monetary easing which was unsuccessful until the final quarter when
the war against terrorism, and with it consumer sentiment, turned more positive.
Having been reasonably stable in the first half year Far East stock markets
experienced a sharp 'V-shaped' move in the second six months. Most indices fell
significantly, challenging the financial crisis low points seen in August 1998
but bounced strongly from depressed levels in the final quarter. Notable
recoveries were achieved by South Korea and Taiwan as their
manufacturing-oriented economies were judged to be the most highly leveraged to
a recovery in the USA.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Policy and Activity
This company's investment policy focuses squarely on opportunities for capital
growth across the region, but conditions for most of 2001 made growth difficult
to find. Any high growth company faced a challenging environment which began to
show signs of improvement in some areas only at the year end. We were
underweighted to Taiwan's stock market throughout the year which worked well
until the fourth quarter's rally. This was partly offset by a raised exposure to
South Korea where the economic outlook is improving, which became our largest
weighted stock market at 28.2% of total investments at the year end. We reduced
portfolio weightings in Hong Kong and China which together had been overweighted
compared to the benchmark index at the previous year end but were broadly in
line at the end of 2001. Our exposure to South East Asian countries remained
relatively low, as we were more optimistic over the prospects for North East
Asian economies.
Borrowings
Our US$30 million loan matures in March 2002. The Board is engaged in reviewing
the company's future requirements and expects to replace the existing loan with
a more flexible arrangement.
Share Repurchases
During the year 1,347,000 ordinary shares were repurchased for cancellation at
an average discount of 17.8%, in line with the company's policy of repurchasing
shares at valuations considered to be attractive by the Board.
Corporate Governance
Good corporate governance and responsible policies towards the environment, the
community and employees are all legitimate concerns of shareholders. This
company's policy is to examine and monitor the policies and actions of the
companies in which we invest with a view to encouraging management to recognise
and address any issues. Nonetheless, Henderson TR Pacific's prime objective
continues to be the pursuit of capital growth.
Charitable Contributions
The company supported children's charities in Thailand and the Philippines.
Outlook
Aggressive easing of monetary policy has set the scene for global recovery and
leading indicators continue to show that this should begin in the current year,
at least in the USA. Moreover, the political background appears to be improving
with the early successes of the war against terrorism. Asia has now suffered two
severe setbacks since 1997 with the result that company profits and valuations
are low but have the prospect for significant improvement. Since the 1997
financial crisis, governments and companies have addressed their problems to a
significant degree in many countries, making Asia well placed for recovery, and
there is considerable pent-up demand once sentiment improves. If we can say with
any confidence that the global economic and political background has stabilised
and will start to recover, then Asia would be due a strong cyclical bounce. In
consequence the defensive strategy adopted in September has been adjusted to a
more positive stance.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Annual General Meeting
This year's AGM will be held again at Henderson Global Investors' office at 4
Broadgate, on Monday 8 April at 12.30 pm.
Iain Dale OBE
4 February 2002
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Statement of Total Return (incorporating the revenue account)
(Unaudited) (Audited)
Year ended 31 December 2001 Year ended 31 December 2000
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital losses from investments - (12,899) (12,899) - (81,322) (81,322)
Income from fixed asset investments 3,791 - 3,791 3,393 - 3,393
Other interest receivable and similar 560 - 560 956 - 956
income
--------- ---------- ---------- --------- ---------- ---------
Gross revenue and capital losses 4,351 (12,899) (8,548) 4,349 (81,322) (76,973)
Management fee (1,075) (1,075) (2,150) (963) (963) (1,926)
Other administrative expenses (450) - (450) (603) - (603)
-------- ----------- ---------- --------- ----------- ---------
Net return/(loss) on ordinary activities
before interest payable and taxation 2,826 (13,974) (11,148) 2,783 (82,285) (79,502)
Interest payable (370) (1,111) (1,481) (399) (1,197) (1,596)
---------- ----------- ---------- ---------- ----------- ---------
Net return/(loss) on ordinary activities
before taxation 2,456 (15,085) (12,629) 2,384 (83,482) (81,098)
Taxation on net return/(loss) on ordinary (923) 577 (346) (868) 563 (305)
activities
----------- ---------- ----------- ----------- ---------- ----------
Net return/(loss) on ordinary activities
after taxation 1,533 (14,508) (12,975) 1,516 (82,919) (81,403)
Proposed dividends
Final ordinary: 0.25p per share (2000: (510) - (510) (514) - (514)
0.25p)
Special: 0.25p per share (2000: 0.30p) (510) - (510) (617) - (617)
---------- ------------ ---------- ---------- ------------ ---------
(1,020) - (1,020) (1,131) - (1,131)
---------- ------------ ---------- ---------- ------------ ---------
Transfer to/(from) reserves 513 (14,508) (13,995) 385 (82,919) (82,534)
====== ======= ======= ====== ======= =======
Return/(loss) per ordinary share (Note 1) 0.75p (7.08p) (6.33p) 0.74p (40.34p) (39.60p)
The revenue columns of this statement represent the revenue accounts of the
company.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Balance Sheet
At 31 December 2001
(Unaudited) (Audited)
31 December 2001 31 December 2000
£'000 £'000
--------------------- --------------------
Fixed asset investments:
Listed at market value - overseas 167,079 180,717
Unlisted - directors' valuation 161 1,806
---------- ----------
167,240 182,523
---------- ----------
Current assets
Debtors 2,114 435
Bank Balances and short term deposits 14,204 15,002
---------- ----------
16,318 15,437
Creditors: amounts falling due within one year (22,224) (1,775)
---------- ----------
Net current (liabilities)/assets (5,906) 13,662
---------- ----------
Total assets less current liabilities 161,334 196,185
Creditors: amounts falling due after more than one year - (20,083)
---------- ----------
Total net assets 161,334 176,102
====== ======
Capital and reserves
Called up share capital 10,210 10,277
Other capital reserves 146,198 161,412
Revenue reserve 4,926 4,413
---------- ----------
Equity shareholders' funds 161,334 176,102
====== ======
Net asset value per ordinary share (Note 2) 79.0p 85.7p
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Cash Flow Statement
For the year ended 31 December 2001
(Unaudited) (Audited)
Year ended Year ended
31 December 2001 31 December 2000
£'000 £'000 £'000 £'000
-------------- ------------- -------------- ------------
Net cash inflow from operating activities 1,334 1,241
Servicing of finance
Interest paid (1,465) (1,587)
----------- -----------
Net cash outflow from servicing of finance (1,465) (1,587)
Taxation
UK income tax recovered 198 161
---------- ----------
Net tax recovered 198 161
Financial investment
Purchases of investments (74,364) (110,376)
Sales of investments 75,168 126,050
------------- -------------
Net cash inflow from financial investment 804 15,674
Equity dividends paid (1,131) (514)
Management of liquid resources
Cash placed on short term deposit (5,872) (2,672)
----------- -----------
Net cash (outflow)/inflow before financing (6,132) 12,303
Financing
Repurchases of ordinary shares (773) -
Repayment of multi-currency loan facility - (4,550)
----------- -----------
Net cash outflow from financing (773) (4,550)
---------- ----------
(Decrease)/increase in cash (6,905) 7,753
====== ======
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash as above (6,905) 7,753
Cash outflow from management of liquid resources 5,872 2,672
Cash outflow from debt financing - 4,550
---------- ----------
Change in net debt resulting from cash flows (1,033) 14,975
Exchange movements (295) (497)
---------- ----------
(1,328) 14,478
Net debt at 1 January (5,081) (19,559)
---------- ----------
Net debt at 31 December (6,409) (5,081)
====== ======
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Notes:
1. Return/(loss) per ordinary share
Revenue returns per ordinary share are based on earnings attributable to the ordinary shares of £1,533,000 (year
ended 31 December 2000: £1,516,000) and on the weighted average number of ordinary shares in issue during the
year to 31 December 2001, being 205,129,214 (year ended 31 December 2000: 205,540,359).
Capital loss per ordinary share are based on net capital losses attributable to the ordinary shares of
£14,508,000 (year ended 31 December 2000: loss of £82,919,000) and on the weighted average number of ordinary
shares in issue during the year, as shown above.
2. Net Asset Value per Ordinary Share
The net asset value per ordinary share is based on net assets attributable to ordinary shares of £161,334,000 (31
December 2000: £176,102,000) and on the 204,193,359 (31 December 2000: 205,540,359) ordinary shares in issue at
31 December 2001.
3. Share Buy-Backs
The Company was granted authority to repurchase up to 30,625,513 ordinary shares at the Annual General Meeting
held on 9 April 2001. During the year to 31 December 2001 the company purchased 1,347,000 ordinary shares for
cancellation at an average discount of 17.8% at a total cost of £773,000. The net asset value was enhanced by
£179,000.
4. 2000 Accounts
The figures and financial information for the year ended 31 December 2000 are an extract of the latest published
accounts of the company and do not constitute 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 Section 237(2) or 237(3) of the Companies Act 1985.
5. 2001Accounts
The preliminary figures for the year ended 31 December 2001 have been extracted from the latest company accounts.
These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on
them.
6. Dividend
A final dividend of 0.25p per ordinary share and a special dividend of 0.25p per ordinary share will, if approved
by shareholders, be paid on 12 April 2002 to shareholders recorded on the register on 15 March 2002. The
company's shares go ex-dividend on 13 March 2002.
7. Annual General Meeting
The annual report will be posted to shareholders in March 2002 and thereafter copies will be available at the
registered office at 4 Broadgate, London EC2M 2DA. The Annual General Meeting of the company will be held at 4
Broadgate, London EC2M 2DA on Monday 8 April 2002 at 12.30 pm.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Stock Market Performance Comparison for the year to 31 December 2001
Local Currency Sterling Adjusted
% %
South Korea +37.5 +35.9
Taiwan +17.0 +13.6
China* +81.5 +86.2
Hong Kong -24.5 -22.5
Thailand +12.9 +13.6
The Philippines -21.8 -22.3
Malaysia +2.4 +5.1
Singapore -15.7 -18.8
Indonesia -5.8 -10.1
* The local movements on the China B Index have been calculated with reference
to a US$ denominated price index.
Geographical Distribution of the Investment Portfolio
As at 31 December 2001 As at 31 December 2000
% %
South Korea 28.2 14.9
Taiwan 17.0 13.8
China 13.9 17.7
Hong Kong 22.5 31.8
Thailand 3.7 3.9
The Philippines - -
Malaysia 3.4 2.9
Singapore 10.0 14.9
Indonesia - -
Vietnam 1.3 0.1
100.0 100.0
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2001
Sector Analysis of Investments
As at 31 December 2001 As at 31 December 2000
% %
Collective Investment Vehicles 3.5 2.9
Computers & Peripherals 4.8 2.3
Consumption 20.3 15.5
Electrical Equipment 1.4 3.6
Finance & Real Estate 22.0 28.0
Resources & Heavy Industrial 7.9 5.1
Semiconductors & Electronics 14.0 10.4
Software Services 3.0 1.1
Telecommunications 9.6 13.3
Transport & Distribution 9.1 11.7
Utilities 4.4 6.1
100.0 100.0
==== ====
Top 20 Investments as at 31 December 2001
Company Country Sector Value of
Investment
£'000
Kookmin Bank South Korea Finance and Real Estate 8,174
Li & Fung Hong Kong Transport and Distribution 4,920
United Microelectronics Taiwan Semiconductors and Electronics 4,807
Shinhan Financial South Korea Finance and Real Estate 4,584
Television Broadcasts Hong Kong Consumption 4,454
Samsung Electronics South Korea Semiconductors and Electronics 4,374
Samsung Fire & Marine South Korea Finance and Real Estate 4,090
Swire Pacific Hong Kong Finance and Real Estate 3,727
Hutchison Whampoa Hong Kong Finance and Real Estate 3,719
Singapore Press Singapore Consumption 3,642
Pro Mos Technologies Taiwan Semiconductors and Electronics 3,503
Huaneng Power International China Utilities 3,477
Synnex Technology Taiwan Computers and Peripherals 3,310
Dah Sing Financial Hong Kong Finance and Real Estate 3,251
Ambit Microsystems Taiwan Computers and Peripherals 3,162
Henderson Land Development Hong Kong Finance and Real Estate 3,119
LG Electronics South Korea Consumption 3,110
President Chain Store Taiwan Consumption 3,109
SK Telecom South Korea Telecommunications 3,037
I-Cable Communications Hong Kong Consumption 3,036
78,605
====
These twenty investments represented 47.0% of total investments compared with
51.9% at the previous year end.
- ENDS -
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