Interim Results

Henderson TR Pacific Inv. Trust PLC 30 August 2007 Page 1 of 13 30 August 2007 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Henderson TR Pacific Investment Trust plc ('Henderson TR Pacific'), which seeks a high rate of total return from companies operating primarily in the Pacific region excluding Japan and Australasia, announces results for the half year ended 30 June 2007. Henderson TR Pacific is one of the largest investment trusts specialising in this region and its Manager seeks to identify mispriced growth stocks in this region of remarkable long term economic growth. Highlights: • The company outperformed its benchmark by 2.9% over six months and by 6.3% over twelve months • The share price increased by 13.8% to 138.8p from 122.0p over six months • The NAV total return per share rose by 17.3% over the last six months and by 40.6% over 12 months Financial Highlights (Unaudited) (Audited) 30 June 31 December 2006 % 2007 Change Net asset value 157.0p 135.5p 15.9 Share price 138.8p 122.0p 13.8 Discount 11.6% 10.0% - Gearing (*) 12.1% 9.5% - Performance to 30 June 2007 6 months % 12 months % Net Asset Value (1) 17.3 40.6 Share Price (2) 15.0 36.8 MSCI All Country Asia ex-Japan Index (2) 14.4 34.3 Peer Group (NAV) (3) 17.2 38.8 (*) Defined here as borrowings, less cash balances and deposits, as a percentage of shareholders' funds. (1) Source: AIC Services Ltd (net income reinvested). (2) Source: Thomson Financial, Datastream (gross income reinvested). (3) Source: AIC Services Ltd (net income reinvested). The Company's performance is compared against a group of leading investment trust competitors. - MORE - Page 2 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Commenting on the results and economic outlook, Chairman, David Robins, said: 'Fundamentally, Asia and Asian companies are in very good health. The economies of the region are growing in a sustainable manner with healthy fiscal and current account balances, moderate inflation and low interest rates. Company prospects are similarly robust, debt levels are low, profitability and cash flows are continuing to improve and earnings trends are supportive.' Extracts from the Chairman's Statement Well positioned ahead of recent events As we noted in the Annual Report in early March, the risks of rising interest rates, a reversal in the credit cycle and a resultant rise in risk aversion were becoming our main concerns early in the year. Somewhat surprisingly, markets initially showed little reaction to problems in the US sub-prime mortgage market, which we thought might trigger a 'credit crunch'. However, with the failure of several hedge funds heavily exposed to sub-prime mortgage securities, the credit crunch and rise in market volatility which we feared, duly developed through July and into August. Whilst these developments occurred after the end of our six month reporting period, it is important to note that the Company had reduced leverage and increased cash, as well as taking out put protection against a decline in the market, during July. Your Company was, therefore, in very good shape to ride out the storm in world markets during August. For the reporting period, Asian stock markets and currencies had remained strong prior to the summer sell-off. Asian markets were driven higher by strong liquidity flows, robust growth in economies outside the US and strong Asian company earnings. Despite renewed uncertainty over the direction of the US economy, it now appears that financial market turmoil may well lead Central Banks to bring their monetary tightening to an end, and that the next moves in interest rates generally could be down. Whilst the medium term impact of the turn in the credit cycle is not yet clear, falling rates worldwide coupled with continued strong growth in the economies of China, India and the Pacific Rim augur well for our markets. Performance I am very pleased to be able to report that our Company out-performed the MSCI All Countries Asia excluding Japan Index during the first six months of the year. The net asset value (total return) increased by 17.3% in sterling terms compared to a rise in the benchmark of 14.4%. Over the last twelve months our Company's net asset value is up by 40.6% in sterling terms compared to the benchmark's 34.3% return. Your Board is very encouraged that the Manager's 'bottom up' stock selection approach has had such a marked impact on the performance of the Company in such a short timeframe. At the interim stage, stock selection was the largest contributor to performance, led by China, but with support from shares in Singapore and Malaysia. Indonesian and Indian stock selection were the biggest disappointments. The decision to gear our Company in Hong Kong dollars also worked well given the HK$ peg to a weakening US$, the overall strength of markets and the resilience of other Asian currencies. - MORE - Page 3 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Outlook Fundamentally, Asia and Asian companies are in very good health. The economies of the region are growing in a sustainable manner with healthy fiscal and current account balances, moderate inflation and low interest rates. Company prospects are similarly robust, debt levels are low, profitability and cash flows are continuing to improve and earnings trends are supportive. Following the gains in the region's markets and given the apparent end to the lengthy period of easy liquidity as a result of the fall out from the sub-prime mortgage market collapse in the US, it is prudent to prepare for the likelihood of less favourable markets ahead. As noted above, the Company had already recently started to take a somewhat more defensive stance prior to recent turmoil. We take the view, however, that the setback in Asian markets is a pause in a long term upward trend. As such, we are positioned to use this opportunity to add to exposure again for the longer term. David Robins 30 August 2007 - MORE - Page 4 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Income Statement for the half year ended 30 June 2007 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 December 2006 Revenue Capital Revenue Capital Revenue Capital return return Total return return Total return return Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) from investments held at fair value through profit or loss - 40,135 40,135 - (1,027) (1,027) - 40,634 40,634 Income from investments held at fair value through profit or loss 3,818 - 3,818 2,863 - 2,863 4,959 - 4,959 Other interest receivable and similar income 138 - 138 105 - 105 223 - 223 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross revenue and capital gains/(losses) 3,956 40,135 44,091 2,968 (1,027) 1,941 5,182 40,634 45,816 Management fee (312) (563) (875) (264) (419) (683) (548) (892) (1,440) Performance fee (note 2) - (1,237) (1,237) - (683) (683) - (1,099) (1,099) Other administrative expenses (350) - (350) (332) - (332) (630) - (630) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before finance charges and taxation 3,294 38,335 41,629 2,372 (2,129) 243 4,004 38,643 42,647 Finance charges (164) (491) (655) (97) (290) (387) (183) (550) (733) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before taxation 3,130 37,844 40,974 2,275 (2,419) (144) 3,821 38,093 41,914 Taxation on net return/(loss) on ordinary activities (976) 687 (289) (755) 417 (338) (1,264) 763 (501) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities after taxation 2,154 38,531 40,685 1,520 (2,002) (482) 2,557 38,856 41,413 ===== ===== ===== ===== ===== ===== ===== ===== ===== Basic and diluted return/(loss) per ordinary share (note 3) 1.18p 21.11p 22.29p 0.82p (1.08)p (0.26)p 1.38p 20.90p 22.28p The columns of this statement headed 'total' represent the Company's income statement, prepared in accordance with UK GAAP. The revenue and capital columns are supplementary to this and are published under guidance from the Association of Investment Companies. The Company has no recognised gains or losses other than those disclosed in the income statement and the reconciliation of movements in shareholders' funds. All items in the above statement derive from continuing obligations. No operations were acquired or discontinued during the period. - MORE - Page 5 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Reconciliation of Movements in Shareholders' Funds for the half years ended 30 June 2007 and 2006 and year ended 31 December 2006 Called up Capital Other share redemption Special capital Revenue capital reserve reserve reserves reserve Total Half year ended 30 June 2007 £'000 £'000 £'000 £'000 £'000 £'000 At 31 December 2006 9,186 6,720 83,728 140,609 8,744 248,987 Net return from ordinary activities after taxation - - - 38,531 2,154 40,685 Dividend paid in respect of year ended 31 December 2006 (paid 26 April 2007) - - - - (2,375) (2,375) Purchase of own shares (257) 257 (7,008) - - (7,008) -------- --------- -------- --------- -------- --------- At 30 June 2007 8,929 6,977 76,720 179,140 8,523 280,289 ===== ===== ===== ====== ===== ====== Called up Capital Other share redemption Special capital Revenue capital reserve reserve reserves reserve Total Half year ended 30 June 2006 £'000 £'000 £'000 £'000 £'000 £'000 At 31 December 2005 9,318 6,588 86,663 101,753 9,630 213,952 Net return from ordinary activities after taxation - - - (2,002) 1,520 (482) Dividend paid in respect of year ended 31 December 2005 (paid 7 April 2006) - - - - (3,448) (3,448) Write back of dividends over twelve years old - - - - 5 5 --------- -------- ------- -------- -------- --------- At 30 June 2006 9,318 6,588 86,663 99,751 7,707 210,027 ===== ===== ===== ===== ===== ====== -MORE- Page 6 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Called up Capital Other share redemption Special capital Revenue capital reserve reserve reserves reserve Total Year ended 31 December 2006 £'000 £'000 £'000 £'000 £'000 £'000 At 31 December 2005 9,318 6,588 86,663 101,753 9,630 213,952 Net return from ordinary activities after taxation - - - 38,856 2,557 41,413 Dividend paid in respect of the year ended 31 December 2005 (paid 7 April 2006) - - - - (3,448) (3,448) Write back of dividends over twelve years old - - - - 5 5 Purchase of own shares (132) 132 (2,935) - - (2,935) -------- -------- -------- --------- --------- ---------- At 31 December 2006 9,186 6,720 83,728 140,609 8,744 248,987 ===== ===== ===== ====== ===== ====== The transaction costs incurred on the acquisition and disposal of investments are included within capital reserve. The purchase transaction costs for the half year ended 30 June 2007 were £315,000 (half year ended 30 June 2006: £416,000; year ended 31 December 2006: £645,000). Sales transaction costs for the half year ended 30 June 2007 were £478,000 (half year ended 30 June 2006: £641,000; year ended 31 December 2006: £790,000). -MORE - Page 7 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Balance Sheet As at 30 June 2007 (Unaudited) (Unaudited) (Audited) 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Fixed asset investments held at fair value through profit or loss Listed at market value - overseas 314,310 210,568 274,587 ---------- ---------- ---------- Current assets Debtors 1,943 741 272 Bank balances and short term deposits 450 8,314 7,551 ---------- ---------- ---------- 2,393 9,055 7,823 Creditors: amounts falling due within one year (36,414) (9,518) (33,423) ---------- ---------- ---------- Net current liabilities (34,021) (463) (25,600) ----------- ----------- ----------- Total assets less current liabilities 280,289 210,105 248,987 Provision for liabilities and charges - (78) - ---------- ---------- ---------- Total net assets 280,289 210,027 248,987 ====== ====== ====== Capital and reserves Called up share capital 8,929 9,318 9,186 Capital redemption reserve 6,977 6,588 6,720 Special reserve 76,720 86,663 83,728 Capital reserves -realised 103,062 90,070 87,889 -unrealised 76,078 9,681 52,720 Revenue reserve 8,523 7,707 8,744 ---------- ---------- ---------- Equity shareholders' funds 280,289 210,027 248,987 ====== ====== ====== Net asset value per ordinary share (note 4) 157.0p 112.7p 135.5p ====== ====== ====== - MORE - Page 8 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Cash Flow Statement for the half year ended 30 June 2007 (Unaudited) (Unaudited) (Audited) Half year Half year Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 £'000 £'000 £'000 Net cash (outflow)/inflow from operating activities (374) 1,319 3,181 Interest paid (671) (414) (695) Net tax paid - - (770) Net cash inflow from financial investments 266 24,899 2,365 Equity dividends paid (2,375) (3,443) (3,443) ---------- ---------- ---------- Net cash (outflow)/inflow before financing (3,154) 22,361 638 Net cash (outflow)/inflow from financing (7,399) (14,535) 7,898 ---------- ---------- ---------- (Decrease)/increase in cash (10,533) 7,826 8,536 ====== ====== ====== Reconciliation of operating revenue to net cash inflow from operating activities Total return before finance charges and taxation 41,629 243 42,647 Less capital return before finance charges and taxation (38,335) 2,129 (38,643) ---------- ---------- ----------- Net revenue return before interest payable and taxation 3,294 2,372 4,004 (Increase)/decrease in accrued income (1,284) (545) 126 (Increase)/decrease in other debtors (158) 4 9 (Decrease)/increase in creditors (129) 924 1,840 Management and performance fee taken to other capital reserves (1,800) (1,102) (1,991) Overseas withholding tax (289) (302) (469) Taiwanese stock dividends (8) (32) (338) ---------- ---------- ---------- Net cash (outflow)/inflow from operating activities (374) 1,319 3,181 ====== ====== ====== Reconciliation of net cash flow to movement in net (debt)/cash (Decrease)/increase in cash as above (10,553) 7,826 8,536 Cash (inflow)/outflow from debt financing 330 14,535 (10,772) ---------- ---------- ---------- Change in net debt resulting from cash flows (10,223) 22,361 (2,236) Exchange movements (75) 1,267 1,750 ---------- ---------- ---------- Movement in net debt during the period (10,298) 23,628 (486) Net debt at beginning of the period (23,682) (23,196) (23,196) ---------- ---------- ---------- Net (debt)/cash at the end of the period (33,980) 432 (23,682) ====== ====== ====== Represented by: Cash at bank and short term deposits less bank overdrafts (3,378) 8,089 7,551 Debt falling due within one year (30,602) (7,657) (31,233) ---------- ---------- ---------- (33,980) 432 (23,682) ====== ====== ====== - MORE - Page 9 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 Notes 1. Accounting policies The accounts have been prepared under the historical cost convention, modified to include the revaluation of investments and in accordance with applicable Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' ('SORP') dated December 2005. The interim financial statements have been prepared on the basis of the accounting policies set out in the financial statements at 31 December 2006. All of the company's operations are of a continuing nature. 2. Performance fee The Board has prudently assumed that outperformance at the year end could be such that a performance fee would be payable. As at 30 June 2007, over a rolling eighteen month period from 1 January 2006 to 30 June 2007, the Company had outperformed the Benchmark Index by 2.9% resulting in a performance fee of £1,237,000 which has been accrued in these accounts. The performance fee is split between a Top-up fee ('Band 1') £968,000, which represents 0.3% of the net asset value total return and a performance fee ('Band 2') of £269,000 and has been charged to capital return in accordance with the accounting polices used at the year end. 3. Return/(loss) per ordinary share (Unaudited) (Unaudited) Half year Half year (Audited) ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 The return per ordinary share is based on the following figures: Revenue return 2,154 1,520 2,557 Capital return/(loss) 38,531 (2,002) 38,856 ----------- ----------- ----------- Total 40,685 (482) 41,413 ----------- ----------- --------------- Weighted average number of ordinary shares in issue 182,562,509 186,353,359 185,897,743 Revenue return per ordinary share 1.18p 0.82p 1.38p Capital return/(loss) per ordinary share 21.11p (1.08)p 20.90p ---------- ---------- ------------ Total return/(loss) per ordinary share 22.29p (0.26)p 22.28p ====== ====== ======= 4. Net asset value per ordinary share Net asset value per ordinary share is calculated on the basis of shareholders' funds attributable to ordinary shares divided by the number of ordinary shares in issue at 30 June 2007, being 178,574,407 (30 June 2006: 186,353,359 and 31 December 2006: 183,718,359). 5. Share Capital During the period to 30 June 2007, the Company purchased and cancelled 5,143,952 shares for a total consideration of £7,008,000. - MORE - Page 10 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 6. Comparative Information The financial information contained in this half year report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the half years ended 30 June 2006 and 30 June 2007 has not been audited. The figures and financial information for the year ended 31 December 2006 are extracted from the latest published accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of the Companies and included the Report of the Independent Auditors, which was unqualified and did not include a statement under either section 237 (2) or 237(3) of the Companies Act 1985. 7 Unaudited Half Year Report ended 30 June 2007 The unaudited half year report ended 30 June 2007 will be posted to shareholders in September and will be available from the Registered Office at 4 Broadgate, London, EC2M 2DA thereafter. - MORE - Page 11 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 APPENDIX 1 Geographical Analysis # As at 30 June As at 31 December 2007 2006 Company Index * Company Index* % % % % China 20.1 18.5 24.3 17.5 Hong Kong 7.1 12.7 10.1 14.1 India 7.2 9.6 5.7 9.7 Indonesia 4.8 2.3 5.7 2.4 Malaysia 4.8 4.1 3.8 3.9 Pakistan 0.0 0.4 0.0 0.3 The Philippines 1.1 0.9 0.9 0.8 Singapore 12.2 7.8 10.8 7.6 South Korea 20.7 22.9 17.6 23.0 Taiwan 17.8 18.7 15.3 18.6 Thailand 1.3 2.1 2.5 2.1 Vietnam 2.9 0.0 3.3 0.0 ------- ------- ------- ------- 100.0 100.0 100.0 100.0 ==== ==== ==== ==== APPENDIX 2 Sector Analysis # As at 30 June As at 31 December 2007 2006 Company Index * Company Index* % % % % Consumer Discretionary 6.5 7.0 7.5 7.5 Consumer Staples 2.4 3.7 4.2 3.6 Energy 6.0 7.5 4.9 7.1 Financials 36.0 29.7 44.8 30.7 Healthcare 0.0 0.6 0.0 0.8 Industrials 14.0 13.4 7.3 11.0 IT 22.5 19.6 22.4 20.5 Materials 4.6 7.5 4.3 6.3 Telecoms 8.0 7.5 4.6 8.4 Utilities 0.0 3.5 0.0 4.1 -------- ------ -------- --------- 100.0 100.0 100.0 100.0 ===== ==== ===== ===== * MSCI All Country Asia ex-Japan Index Sector Weightings (%) # Source: Henderson Global Investors and Factset - MORE - Page 12 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 APPENDIX 3 List and Valuation of Investments as at 30 June 2007 £'000 % £'000 % South Korea India Hyundai Development 7,099 2.2 Eredene Capital * 2,350 0.7 Hyundai Engineering & 6,565 2.1 ICICI Bank 8,814 2.8 Construction Hyundai Fire & Marine 7,078 2.3 Tata Steel 6,203 2.0 Kookmin Bank 11,064 3.5 Tata Motors 5,410 1.7 LG Corp. 5,667 1.8 -------- -------- LG Philips 5,412 1.7 TOTAL INDIA 22,777 7.2 Samsung Electronics 5,761 1.8 -------- --------- Samsung Securities 8,377 2.7 Shinhan Financial 8,111 2.6 Hong Kong Esprit 9,215 2.9 ---------- -------- Foxconn International 5,687 1.8 TOTAL SOUTH KOREA 65,134 20.7 Henderson Land Development 5,252 1.7 ---------- -------- Polytec 2,009 0.7 -------- -------- China TOTAL HONG KONG 22,163 7.1 China Construction Bank 13,352 4.3 -------- ------- China COSCO 7,798 2.5 China Mobile 15,142 4.8 Indonesia China Shenhua Energy 8,623 2.7 Bank Mandiri 9,166 2.9 CNOOC 10,156 3.2 Indosat 5,871 1.9 Maanshan Iron and Steel 8,256 2.6 --------- --------- --------- -------- TOTAL INDONESIA 15,037 4.8 TOTAL CHINA 63,327 20.1 --------- ---------- --------- ------- Malaysia Taiwan Bumiputra-Commerce 7,749 2.5 Advanced Semiconductor IOI Corporation 7,195 2.3 Engineering 5,542 1.8 --------- ---------- AU Optronics 5,276 1.7 TOTAL MALAYSIA 14,944 4.8 Compal Electronics 6,067 1.9 ---------- ---------- High Tech Computer 6,221 2.0 Hon Hai Precision 11,931 3.8 Vietnam Mediatek 8,929 2.8 Vietnam Enterprise Investment Taiwan Semiconductor 12,070 3.8 Fund 9,110 2.9 --------- ---------- TOTAL TAIWAN 56,036 17.8 --------- --------- --------- --------- TOTAL VIETNAM 9,110 2.9 --------- --------- Singapore Banyan Tree Holdings 9,101 2.9 Thailand City Developments 8,359 2.7 True Corporation 4,147 1.3 Noble Group 4,848 1.5 --------- ---------- Singapore Airlines 6,703 2.1 TOTAL THAILAND 4,147 1.3 United Overseas 9,278 3.0 --------- ---------- --------- --------- TOTAL SINGAPORE 38,289 12.2 Philippines --------- ---------- Ayala Land 3,346 1.1 ---------- --------- TOTAL PHILIPPINES 3,346 1.1 ------------ ---------- * Listed on AIM in the UK TOTAL INVESTMENTS 314,310 100.0 ======= ====== Stocks in bold type are the top twenty largest investments which by value account for 61.9% of the total value of investments. - MORE - Page 13 of 13 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Results for the Half Year Ended 30 June 2007 For further information contact: Andrew Beal Fund Manager Tel: 020 7818 4314 David Robins Chairman Tel: 020 7818 2966 Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Tel: 020 7818 3198 - ENDS - This information is provided by RNS The company news service from the London Stock Exchange

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