Final Results
Henderson TR Pacific Inv. Trust PLC
08 February 2005
HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
8 February 2005
Henderson TR Pacific Investment Trust plc announces preliminary results for the
year ended 31 December 2004.
Henderson TR Pacific Investment Trust plc seeks a high rate of total return from
Pacific region stock markets and economies excluding Japan and Australasia.
Key Points:
• Board implementing a number of initiatives aimed at improving Trust's performance
- Amendment to primary investment objective from capital growth to high total return
- Strengthening of investment team with appointment of new Deputy Fund Manager
- Resolution to shareholders at AGM to broaden geographical scope of investments to include India
• 40% increase in proposed Final Dividend to 1.4p per share (2003: 1.00p). Future dividend policy to be
in line with revised investment strategy.
• £40m multi-currency borrowing facility agreed during the year with ING Bank. At year end £13.9m drawn
down.
• Countries, sectors and stocks to which the Trust was most exposed performed less well than previous
year, particularly China and Thailand, resulting in fall in NAV (total return) of 1.3% over year.
Key Extracts from the Preliminary Statement
(Unaudited) (Audited)
31 December 2004 31 December 2003
Net Asset Value per Ordinary Share 87.1p 89.3p
Share price 76.8p 85.0p
Discount to NAV 11.8% 4.8%
Proposed Final Dividend per Ordinary Share: 1.40p 1.00p
Total Return Performance for 12 Months to 31 December 2004
Net Asset Value (i) -1.3%
Share price (i) -8.6%
MSCI AC Far East (Free) ex-Japan Index (ii) +9.7%
(i) Source: AITC Services Ltd. (net dividends reinvested)
(ii) Source: Thomson Financial, Datastream (gross dividend reinvested)
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Commenting on the results Chairman, David Robins said:
Both market and stock selections, in particular over-weight positions in China
and Thailand, led to a disappointing performance in 2004. The advantage of
being an investment trust rather than an open ended investment vehicle, is that
the underlying issue of underperformance can be addressed by the Board.
Accordingly, the Board has taken action by changing the emphasis in the
company's primary objective from one of 'capital growth' to 'high total return'.
An experienced Deputy Fund Manager has been appointed to the team, while
Henderson has also agreed to strengthen the analytical resources available to
support the fund managers. In addition, it is proposed that the country coverage
be widened to include India.
Extracts from the Chairman's Statement
Following the China growth theme which dominated 2003, there were few
discernible trends in Asian markets during the course of 2004, which proved to
be a difficult one for your company. Whilst 2003 was reasonably successful, the
countries, sectors and stocks to which the Trust was exposed, performed less
well in 2004.
Performance
For the year ended 31 December 2004 the net asset value per share fell by 1.3%
on a total return basis which compared with a rise of 9.7% in the MSCI Far East
(Free) ex Japan Index. The underperformance reflected relatively large
positions in Thailand and China which were the region's worst performing stock
markets. Stock selection continued to favour growth and cyclical stocks, in
line with the Trust's stated objectives. However, the performance of these
positions, particularly in South Korea and Taiwan, was also relatively
disappointing. As a result, having visited the region in the spring, the Board
held a Strategy Meeting later in the year, and has initiated various changes
aimed at improving the performance of the Trust.
Objectives
The Board has decided to change the emphasis in the company's primary objective,
which has historically been to seek 'capital growth' from the region's stock
markets. Given that some of the region's markets are now maturing, providing
fewer opportunities to take advantage of high growth stocks, the Board wishes to
give the fund manager greater flexibility in stock selection. We have,
therefore, amended the objectives of the Trust to the pursuit of a 'high total
return' in regional markets. In practice this will involve a more active and
opportunistic investment policy which is not necessarily confined to growth
stocks.
You will notice from the Resolutions to be put to the Annual General Meeting
that the Board has also decided that it would be in shareholders' interests to
broaden the scope of the fund to include investment in India, which is currently
not permitted. India is developing along its own course with a different
economic cycle to the rest of the region, which is increasingly dependent on
China. Investment in India will not only allow access to huge growth
opportunities but will also provide greater diversification for the Trust. The
Managers of the Trust will be able to rely upon expertise on the Indian economy
and market already in place within Henderson. Our intention is to monitor
developments and only to invest in the market on a gradual basis. The Board
hopes that you will fully endorse this change.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Board
Iain Dale, our previous Chairman, retired at the last AGM after 14 years on the
Board and we wish him well. I took on the responsibility of Chairmanship at
that time and greatly look forward to the challenge ahead.
Management
There has also been an important change in the company's management. Michael
Watt will continue as Manager, but has been joined by a new Deputy Manager,
Michael Kerley, who was appointed in December. Michael Kerley brings 12 years
experience of investing in the region, and we look forward to benefiting from
the support that he will bring Michael Watt as they work as a team in
Henderson's London office.
In addition, Henderson Global Investors has added two analysts to their office
in Singapore and is seeking to bring an economist/strategist covering the region
into their London office. Again, the Board expects that this addition of
resources will provide more investment ideas and bring greater rigour to the
stock selection process.
Share Buybacks
After the strong performance in the region's markets in 2003, some investors
clearly became disenchanted with the region in 2004. As a result, the discount
to assets at which our shares traded over the year widened from 4.8% at the end
of 2003 to 11.8% at the end of 2004. It reached a peak in August of 15.7%.
Accordingly, during the year the company made share repurchases totalling
10,400,000 shares at an average discount of 14.2%. These shares were
subsequently cancelled and amounted to some 5% of the company's issued shares.
Borrowings
During the course of the year, a multi-currency borrowing facility was put in
place with ING Bank. This allows the Trust to borrow up to £40 million. At 31
December 2004 the equivalent of £13.9 million was drawn down with loans in Hong
Kong and Singapore dollars. Borrowings were reduced over the year due to the
less favourable stock market outlook faced by the company. The Board believes
it is an important potential benefit to shareholders that borrowings may be used
as investment opportunities arise.
Dividend
A final dividend of 1.4p, compared with last year's 1.00p, is recommended in
respect of 2004, to be paid to shareholders in April. This year's higher
dividend reflects the company's new policy of seeking a high total return. The
Board no longer feels it is appropriate to limit the dividend to the minimum
payable but intend in future to pay a higher share of earnings to shareholders
each year.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Charitable Donations
We were all greatly saddened to see the tragic impact of the tsunami wave across
South East Asia on 26 December. A donation of £10,000 was approved towards the
relief effort in addition to the £10,000 also paid to our regular charity,
Sabakan, in Mindanao in the Philippines.
Outlook
Global economic growth is expected to slow in 2005 after relatively high growth
in 2004. Asian economies are expected to slow too, though they are likely to
continue to achieve higher rates of growth than other regions. But, following
increases in raw material and other costs, a slowdown in company profit
expansion is also expected, after two strong years. Although stock market
valuations are attractive in relative terms, we do not expect a particularly
strong performance by regional markets until next year. As a result, there may
well be some consolidation in stock markets in the first part of 2005. However,
longer term prospects continue to look exciting, particularly as the outlook for
ongoing high levels of structural growth in China and, indeed, India remains
intact.
Annual General Meeting
The AGM will be held on 15 April 2005 at 12.30pm. As usual it will take place
at Henderson's offices in the City of London.
David Robins
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Statement of Total Return (incorporating the revenue account)
(Unaudited) (Audited)
Year ended 31 December 2004 Year ended 31 December 2003
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital (losses)/gains from - (6,116) (6,116) - 51,601 51,601
investments
Income from fixed asset investments 5,525 - 5,525 4,418 - 4,418
Other interest receivable and similar 66 - 66 35 - 35
income
------- --------- --------- --------- ---------- ----------
Gross revenue and capital (losses)/gains 5,591 (6,116) (525) 4,453 51,601 56,054
Management fee (593) (1,015) (1,608) (547) (890) (1,437)
Other administrative expenses (630) - (630) (496) - (496)
------- -------- -------- -------- ----------- ----------
Net return/(loss) on ordinary activities
before interest payable and taxation 4,368 (7,131) (2,763) 3,410 50,711 54,121
Interest payable (72) (214) (286) (72) (218) (290)
------- -------- -------- ---------- ----------- ----------
Net return/(loss) on ordinary activities
before taxation 4,296 (7,345) (3,049) 3,338 50,493 53,831
Taxation on net return/(loss) on ordinary (1,423) 727 (696) (773) 224 (549)
activities
-------- -------- -------- ----------- ---------- -----------
Net return/(loss) on ordinary activities
after taxation 2,873 (6,618) (3,745) 2,565 50,717 53,282
Proposed ordinary dividend:
Final: 1.40p per share (2003: 1.00p) (2,705) - (2,705) (2,036) - (2,036)
--------- --------- --------- ---------- ------------ ----------
Transfer to/(from) reserves 168 (6,618) (6,450) 529 50,717 51,246
===== ===== ====== ====== ======= =======
Return/(loss) per ordinary share (note 1) 1.45p (3.33p) (1.88p) 1.26p 24.90p 26.16p
The revenue columns of this statement represent the profit and loss accounts of
the company.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Balance Sheet
At 31 December 2004
(Unaudited) (Audited)
31 December 2004 31 December 2003
£'000 £'000
--------------------- --------------------
Fixed asset investments
Listed at market value - overseas 181,221 216,097
---------- ----------
Current assets
Debtors 142 117
Bank balances and short term deposits 5,685 3,359
---------- ----------
5,827 3,476
Creditors: amounts falling due within one year (18,842) (37,835)
---------- ----------
Net current liabilities (13,015) (34,359)
---------- ----------
Total net assets 168,206 181,738
====== ======
Capital and reserves
Called up share capital 9,660 10,180
Other reserves 152,569 165,749
Revenue reserve 5,977 5,809
---------- ----------
Equity shareholders' funds 168,206 181,738
====== ======
Net asset value per ordinary share (note 2) 87.1p 89.3p
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Cash Flow Statement
For the year ended 31 December 2004
(Unaudited) (Audited)
Year ended Year ended
31 December 2004 31 December 2003
£'000 £'000 £'000 £'000
-------------- ------------- -------------- ------------
Net cash inflow from operating activities 2,182 1,576
Servicing of finance
Interest paid (309) (264)
----------- -----------
Net cash outflow/inflow from servicing of finance (309) (264)
Taxation
Withholding tax paid (118) (106)
---------- ----------
Net tax paid (118) (106)
Financial investment
Purchases of investments (89,906) (98,389)
Sales of investments 120,705 66,353
------------- -------------
Net cash inflow/(outflow) from financial investment 30,799 (32,036)
Equity dividends paid (2,036) (1,223)
--------- -----------
Net cash inflow/(outflow) before financing 30,518 (32,053)
Financing
Repurchases of ordinary shares (7,082) (121)
(Repayment)/drawdown of multi-currency loan facility (21,278) 30,297
----------- -----------
Net cash (outflow)/ inflow from financing (28,360) 30,176
---------- ----------
Increase/(decrease) in cash 2,158 (1,877)
====== ======
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash as above 2,158 (1,877)
Cash outflow/(inflow) from debt financing 21,278 (30,297)
--------- ----------
Change in net debt resulting from cash flows 23,436 (32,174)
Exchange movements 124 1,678
-------- ----------
23,560 (30,496)
Net debt at 1 January (32,160) (1,664)
---------- ----------
Net debt at 31 December (8,600) (32,160)
====== ======
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Notes:
1. Return/(loss) per Ordinary Share
Revenue returns per ordinary share are based on earnings attributable to the ordinary shares of £2,873,000
(year ended 31 December 2003: £2,565,000) and on the weighted average number of ordinary shares in issue
during the year to 31 December 2004, being 198,788,181 (year ended 31 December 2003: 203,680,948).
Capital (losses)/gains per ordinary share are based on net capital losses attributable to the ordinary shares
of £6,618,000 (year ended 31 December 2003: gains of £50,717,000 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 £168,206,000
(31 December 2003: £181,738,000) and on the 193,203,359 (31 December 2003: 203,603,359) ordinary shares in
issue at 31 December 2004.
3. Share Buy-Backs
The company was granted authority to repurchase up to 30,336,900 ordinary shares at the Annual General
Meeting held on 5 April 2004. During the year to 31 December 2004 the company purchased 10,400,000 Ordinary
shares for cancellation at an average discount of 14.18%, at a cost of £7,082,000. The net asset value was
enhanced by approximately £586,000.
4. 2003 Accounts
The figures and financial information for the year ended 31 December 2003 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. 2004 Accounts
The preliminary figures for the year ended 31 December 2004 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. Dividends
A final dividend of 1.40p per ordinary share will, if approved by shareholders, be paid on 20 April 2005 to
shareholders recorded on the Register of Members on 16 March 2005. The company's shares go ex-dividend on 18
March 2005.
7. Annual General Meeting
The annual report will be posted to shareholders in March 2005 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 15 April 2005 at 12.30 pm.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Stock Market Performance Comparison for the year to 31 December 2004
Local Currency Sterling Adjusted
% %
South Korea 10.5 18.6
Taiwan 4.2 4.1
China -3.5 -10.0
Hong Kong 13.2 5.4
Thailand -13.5 -17.7
The Philippines 26.4 16.6
Malaysia 14.3 6.6
Singapore 11.8 8.4
Indonesia 44.6 22.3
Geographical Distribution of the Investment Portfolio
As at 31 December 2004 As at 31 December 2003
% %
South Korea 16.5 20.7
Taiwan 15.9 20.2
China 14.6 15.9
Hong Kong 19.8 9.5
Thailand 9.9 17.0
The Philippines 0.0 0.6
Malaysia 6.9 8.3
Singapore 10.3 6.6
Indonesia 4.6 0.0
Vietnam 1.5 1.2
100.0 100.0
==== ====
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Results
for the Year Ended 31 December 2004
Sector Analysis of Investments
As at 31 December 2004 As at 31 December 2003
% %
Consumer Discretionary 11.7 14.0
Consumer Staples 3.5 4.2
Energy 3.4 2.3
Financials and Property 44.0 20.4
Healthcare 0.0 0.0
Industrials and Transport 7.9 21.6
Information Technology 11.2 19.9
Materials 4.8 7.5
Telecommunications Services 10.3 5.9
Utilities 3.2 4.2
100.0 100.0
==== ====
Top 20 Investments as at 31 December 2004
Company Country Sector Value of
Investment
£'000
Hutchison Whampoa Hong Kong Financials & Property 5,840
Samsung Fire & Marine South Korea Financials & Property 4,508
Swire Pacific Hong Kong Financials & Property 4,331
Li & Fung Hong Kong Consumer Discretionary 4,222
Cheung Kong Hong Kong Financials & Property 4,147
LG Electronics South Korea Consumer Discretionary 3,867
China Merchants China Industrials & Transport 3,737
New World Development Hong Kong Financials & Property 3,720
Shin Corporation Thailand Telecommunications Services 3,719
Noble Group Singapore Financials & Property 3,689
Hong Kong & China Gas Hong Kong Utilities 3,442
Shinsegae South Korea Consumer Discretionary 3,432
Cathay Financial Taiwan Financials & Property 3,406
China Netcom China Telecommunications Services 3,401
CNOOC China Energy 3,387
Taishin Financial Taiwan Financials & Property 3,336
Citiraya Industries Singapore Industrials & Transport 3,322
Kasikornbank Thailand Financials & Property 3,318
Keppel Corporation Singapore Financials & Property 3,283
Giordano International Hong Kong Consumer Discretionary 3,258
75,365
====
Total Investments 181,221
====
Top 20 as a percentage of total investments 41.6%
- ENDS -
For further information contact:-
Michael Watt, Director and Manager
David Robins, Chairman
Tel: 020 7818 1818
David Hardy
Binns & Co. PR
Tel: 020 7786 9600
or
Vicki Staveacre
Henderson Press Office
Telephone: 020 7818 4222
This information is provided by RNS
The company news service from the London Stock Exchange
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