Annual Financial Report and Final Dividend

Henderson European Trust Plc

12 December 2024

 

JANUS HENDERSON FUND MANAGEMENT UK LIMITED

HENDERSON EUROPEAN TRUST PLC

LEGAL ENTITY IDENTIFIER: 213800GS89AL1DK3IN50

HENDERSON EUROPEAN TRUST PLC

Annual Report and Financial Statements for the year ended 30 September 2024

The Company's Annual Report and Financial Statements for the year ended 30 September 2024 is being published in hard copy format and an electronic copy will shortly be available to view and download from the Company's website: www.hendersoneuropeantrust.com.

The Annual Report and Accounts, including the Notice of Annual General Meeting, together with the form of proxy will shortly be uploaded to the Financial Conduct Authority's National Storage Mechanism and will be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Page numbers and cross references in the following announcement refer to page numbers and cross references in the Annual Report and Accounts for the year ended 30 September 2024.

INVESTMENT OBJECTIVE

The Company seeks to maximise total return from a portfolio of stocks predominantly listed in Europe (excluding the UK).

PERFORMANCE HIGHLIGHTS

§ Net asset value¹ per share total return rose by 16.6%, ahead of benchmark² by 1.3%

§ Share price total return³ was 20.5%

§ NAV total return outperformed peer group averages: AIC Europe sector⁴ was 15.4% and IA OEIC Europe ex-UK sector⁵ was 14.6%

§ Maintained full-year dividend of 4.35p, with recommended final dividend of 1.30p per share and interim of 3.05p per share

§ NAV and share price outperformance of the benchmark index over 1, 3, 5, and 10 years

Total return performance to 30 September 2024

	1 Year	3 Years	5 Years	10 Years
Company NAV1	16.6	25.8	63.3	167.6
Benchmark2	15.3	21.2	48.4	136.4
Share price3	20.5	25.8	68.1	146.2
AIC Europe sector NAV4	15.4	11.3	50.1	154.5
AIC Europe sector share price5	15.2	8.5	50.8	148.4
IA OEIC Europe ex-UK sector average6	14.6	14.5	44.7	126.5

¹ Net asset value ("NAV") per ordinary share with dividends reinvested and excluding reinvestment costs

² FTSE World Europe (ex UK) index in sterling terms

³ Share price using mid-market closing prices

⁴ Simple average NAV for the AIC Europe sector which currently comprises six investment trusts

⁵ Average share price total return of the AIC Europe sector

⁶ Investment Association ("IA") Europe (ex UK) sector for open-ended investment companies ("OEICs"), which comprised 138 funds at the year end

Sources: Janus Henderson, Morningstar Direct, LSEG Datastream

FINANCIAL HIGHLIGHTS

	At 30 September 2024	At 30 September 2023
Shareholders' funds
Net assets attributable to ordinary shareholders (£'000)	663,534	378,997
NAV per ordinary share	201.4p	178.1p
Mid-market price per ordinary share	183.0p	157.0p
	Year ended 30 September 2024	Year ended 30 September 2023
Total return to equity shareholders
Net revenue return (£'000)	10,711	9,188
Net capital return (£'000)	44,590	66,105
	-----------	-----------
Net total return (£'000)	55,301	75,293
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Total return per ordinary share
Revenue return	4.43p	4.32p
Capital return	18.45p	31.07p
	-----------	-----------
Total return	22.88p	35.39p
	======	======
Ongoing charge for year	0.70%	0.80%

CHAIR'S STATEMENT

This has been an eventful year for the Company and I would like to begin by welcoming former Henderson EuroTrust plc ("HNE") shareholders to Henderson European Trust plc ("HET") and to thank shareholders of both HNE and Henderson European Focus Trust plc ("HEFT") for their support in combining the two companies in early July, effected by way of a scheme of reconstruction (the "HEFT/HNE combination"). With circa £663.5 million in assets, promotion to the FTSE250 Index, proven stock picking skills supplied by Co-Fund Managers Tom O'Hara and Jamie Ross, improved liquidity in our shares and a lowered management fee for shareholders, the Board believes the Company is well positioned for its purpose of generating a good total return from investing in Europe. It is critical that investment companies evolve and are 'fit for purpose' to meet investor requirements - this was a driving force for the boards of both HEFT and HNE and remains at the heart of what we hope to achieve for HET's shareholders.

Reporting on our performance, it is notable that whilst we outperformed our peers and the index over 12 months (see comparative figures below), our performance was earned in the first six months of our financial year. The gyrations in the markets since we reported our interim results in May have been harder to navigate: heightened interest rate volatility amid concerns about global politics, potential impact from a greater slowdown in the US economy and problems in the Chinese property markets all ensured that the rotation between stocks was cautious in nature, with the shares of 'defensive' companies (those whose earnings prospects tend not to suffer much in recessions) vastly outperforming those of the more economically sensitive companies. Added to this, an episode of 'AI-angst' by investors after a period of exceptional returns led to a correction in the European semiconductor equipment shares that had been such strong long-term contributors to your Company's returns.

Performance

Investment performance for the year was good: NAV total return was 16.6%, outperforming the Company's benchmark index total return of 15.3%, with the share price total return higher again at 20.5% reflecting a small narrowing of the discount.

The long-term track record (which is that of HEFT, now HET) continues to be strong, with NAV and share price total return outperforming the benchmark over one, three, five, seven and ten years. Our results compare favourably with our competitors, be they in the investment trust sector or the IA OEIC (open-ended funds) sector. The average NAV total return of the AIC Europe investment company sector (comprising six companies) was 15.4% in this period, and the OEIC Europe (ex-UK) sector average (comprising 138 funds) was 14.6%.

Combination with Henderson EuroTrust plc

Having formally combined on 4 July 2024 (see page 28 for details of the combination), the Board would like to thank all those involved in the transaction, including Janus Henderson for their financial support to ensure no costs to shareholders of either company, a reduction in ongoing management fee rates and support in promoting the Company as a flagship European investment trust.

As part of this transaction, the Company's name changed from 'Henderson European Focus Trust plc' to 'Henderson European Trust plc'. The management fee was reduced and more attractive tiered rates were put in place (see page 18 for more details). As a result, the expenses for the year to 30 September 2024 were 0.75% compared to 0.80% for HEFT and 0.79% for HNE in the year prior to the combination, and the estimated ongoing charge for the year to 30 September 2025 is 0.70%, as detailed on pages 96-97.

Dividends

The Board is recommending a final dividend for the year of 1.30p per share which, subject to shareholder approval at the Annual General Meeting ("AGM"), will be paid on 3 February 2025 to shareholders on the register on 3 January 2025. When added to the interim dividend paid in June 2024, this will bring the full-year dividend to 4.35p per share, which is the same total dividend as that paid by HEFT for the 2023 full-year distribution. This proposed distribution provides a yield of 2.4% on the year end share price of 183p.

HEFT declared a higher-than-normal dividend of 3.05p per share at the interim stage. We explained that due to the HEFT/HNE combination, we needed to ensure that all HEFT shareholders received the income which had been generated during their tenure, and that the final dividend would be smaller to reflect the lower amount of income received by the Company in the second half of the financial year and the larger number of shares in issue following the combination.

We expect that dividends will return to a pattern of smaller interim and larger final dividends in the future.

Share rating and discount management policy

Our discount to NAV at the end of the financial year of 9.1% was a small but noteworthy improvement from the end of the previous year (30 September 2023: 11.9%). The average discount over the 12 months was 10.9%.

However, the discount at which the shares have traded to NAV in recent weeks has been at the wider end of our 12-month range. We believe this reflects a broader malaise affecting the whole investment company sector which, while we very much hope will be temporary, continues to be driven by a variety of macro factors that present challenges to buying demand. The Board considers share buybacks when the discount is deemed excessive, which is assessed on absolute and relative bases, and to that end 2,376,191 shares were bought back during the financial year, to be held in treasury (representing 0.7% of share capital). Since the year end (and as at 9 December 2024) a further 5,780,287 shares have been bought back (representing 1.6% of share capital), partly in response to increased selling pressure driven by investors' concerns around changes to capital gains tax ahead of the UK budget at the end of October.

The Board also reviewed the Company's discount management policy for the medium term. In addition to potentially using share buybacks, the Board has now introduced a five-yearly conditional performance-related tender of up to 25% of issued share capital (excluding treasury shares).

This will be made at a 2% discount to NAV less costs if, over the five years to 30 September 2029 (and over subsequent five-year periods to 30 September 2034 and beyond), the NAV per share total return does not equal or exceed the total return of the benchmark index. Any conditional tender offer would be subject to shareholder approval and prevailing legal and regulatory requirements.

Finally, after the initial three-year period following the combination of assets, the Board will consider whether it would be in the interests of shareholders to offer additional opportunities to realise some of their investment, irrespective of net asset value return compared to benchmark, and will exercise discretion on what form these might take, subject to market circumstances at the time.

Capital structure and use of debt

The Company's total borrowing capacity remains at EUR 35 million in long-term structural debt by way of private placement loan notes with a weighted average interest rate of 1.57%, and an HSBC Bank overdraft facility of £30 million (or 10% of net assets if lower). At the year end the Company had not drawn on the overdraft and net gearing was approximately 4% of net assets.

We provide the Fund Managers with flexibility to manage actual gearing levels in light of their view on the prevailing investment opportunity. The Fund Managers' Report explains how they consider gearing, and the chart on page 99 provides further detail on month end gearing levels over the course of the year.

Fund management changes

John Bennet retired during the year, not only from his portfolio management role at HEFT, but also from leading the highly successful European team at Janus Henderson and indeed from a lengthy and distinguished fund management career. The Board would like to thank John for his tremendous stewardship of HEFT over a ten-year period, his mentorship and development role of a now 11-strong team of portfolio managers, and for instilling in Tom and Jamie a style and approach to active management in Europe that we expect to continue to serve HET so well.

Board changes

The combination of HNE and HEFT required considerable oversight by both boards. I would like to welcome Stephen King and Rutger Koopmans to the Board of HET, previously directors at HNE. Stephen, as an economist, brings macroeconomic expertise and market insight and Rutger brings European perspective as well as corporate governance expertise from a long career in financial services.

As part of the transition, Stephen Macklow-Smith from HEFT and Stephen White from HNE stood down when the transaction completed and Katya Thomson (ex HNE) stood down shortly after completion; Robin Archibald (ex HEFT), having completed almost nine years, will not stand for re-election at the forthcoming AGM. I would like to thank all respective directors for their significant contributions, both during their tenure, and especially in the months leading up to the combination.

Particularly noteworthy, Robin has been involved in HET since the early 1990s, originally as an advisor and latterly as a non-executive director, Audit and Risk Committee ("ARC") Chairman and Senior Independent Director ("SID"). We are deeply grateful for Robin's tireless and valuable commitment to the Company and the Board over the last nine years, with his wise counsel, extensive knowledge of accounting and corporate issues and familiarity with the investment trust sector.

Melanie Blake will be appointed ARC Chair when Robin Archibald stands down, and an appointment of a SID will follow during the next year.

Governance, shareholder engagement and AGM

We are pleased to invite shareholders to attend the AGM in person at our registered office on Wednesday, 29 January 2025 at 11.30 am and to join us afterwards for refreshments. This is an opportunity to meet the Fund Managers and the Board. Shareholders who prefer to join virtually may do so via Zoom. There will be live voting only for those physically present at the AGM and we would encourage all shareholders to have their say and vote their shares on all resolutions put forward. All the resolutions are recommended and supported by your directors. Shareholders holding their shares through investor platforms are also encouraged to attend, and to vote, ahead of the proxy voting deadline of Monday, 27 January 2025 through their nominee platforms.

The HEFT/HNE combination created a large amount of share premium, through the issuance of new shares. Shareholder approval is being sought at the AGM to reclassify the share premium account as a distributable reserve. This will provide flexibility in the future.

Please see pages 89-93 for the AGM Notice, more information on all the resolutions and on joining the meeting and voting.

If you have questions for either the Board or the Fund Management team in advance of the AGM - or indeed at any time of the year - please get in touch. Visit our website at www.hendersoneuropeantrust.com where you can subscribe for updates.

Outlook

As 2024 draws to a close, market conditions are unusually volatile. The US 10-year Treasury yield - the benchmark for borrowing costs worldwide - is midway between the last 12 months' high (4.7%) and low (3.6%). Fears associated with a sustained outbreak of 'tariff wars' are higher than in many a year. For European investors, additional challenges include Germany's 'sick man of Europe' status, the war in Ukraine and the emergence of new, more populist, political movements.

Yet Europe is replete with world-class companies. As Tom and Jamie, your Fund Managers, highlight in their report, the companies in the Henderson European Trust portfolio draw their revenues from geographically diversified sources. Europe may be out of favour among many investors but, in circumstances where European companies look remarkably cheap relative to their international rivals, we believe, for those willing to recognise that corporate Europe is not the same as the European economy, exposure to the region will reap benefits.

Vicky Hastings

Chair of the Board

11 December 2024

FUND MANAGERS' REPORT

The combination of Henderson European Focus Trust plc ("HEFT") and Henderson EuroTrust plc ("HNE") completed successfully in July 2024. The environment since then has been anything but benign. We have navigated a market that seems to be agitating for change; notably, a sudden sell-off in technology shares over the summer and the corresponding race into the smaller and medium-sized companies that would be expected to benefit from looming interest rate cuts. Several big themes - and the uncertainty surrounding them - have dominated share price behaviour.

In our view, the events of the last year can be broadly organised into three core challenges:

1. An increasingly price-sensitive consumer

2. The structural challenges facing China's economy

3. A changeable interest rate cycle

We will also discuss how the participation of passive and short-termist investors is impacting our market as a whole - spoiler: we believe it is a positive for long-term, active investors like ourselves and it directly informed our response to the market turnover in the summer.

Performance

The Company generated NAV growth of 16.6% in the year to 30 September 2024, 1.3% ahead of the performance of the benchmark, the FTSE World Europe (ex UK) Index. Readers of the Company's 2024 half-year report will recall a robust performance period. For the second half of 2024 specifically (1 April to 30 September), we gave back some of this outperformance, lagging the +0.3% benchmark return by 1.5%. This short period of underperformance will be evaluated in the context of the themes outlined above.

Net gearing stood at 4.2% at the end of September, effectively a full deployment of the long-term loan notes placed by HEFT in January 2022 at a very favourable average interest rate of 1.57%. Over the year gearing was mildly accretive to our performance (see the performance attribution table on page 2). We have the flexibility to take gearing higher through use of an overdraft facility, when we perceive a compelling stock, sector or market opportunity. We consider our neutral stance to be our current position of fully deploying our low-cost loan notes.

Finally, the combination of two companies required the two respective portfolios be focused into one and that we raise cash to fund two partial tender offers. As such, there is optically a significantly higher level of portfolio activity during the period. However, the direct trading costs of reorganising two portfolios into one formed of our 'best ideas' were minimal. We consider that this was achieved successfully without adverse financial impact on either company and demonstrated one of the key benefits of the combination of the companies: the drawing together of two similar approaches to obtaining returns from Continental European stocks.

A more selective consumer

As a rule, stocks tend to matter more than sectors in our investment process. Nonetheless, at times events outside of our control can necessitate taking a top-down view. Over the last year, the travails of the consumer have been one such event.

The effects of inflation, following Covid and the Ukraine war, have continued to impact both consumer and corporate behaviour.

The impact on pricing, though, has varied widely within the consumer space. This variation has framed our perspective on consumer companies. We have chosen to specifically focus on 'cumulative pricing' since pre-Covid, as a metric through which we can usefully analyse how aggressive companies have been with pricing and the tolerance of consumers to accept these price hikes. The chart below [see page 9 of the Annual Report] offers an illustration of the level of variation across a range of consumer product categories.

In addition to the product categories in the chart, we have observed luxury goods companies pushing through significant price increases, of up to 40-60% for core product lines. Yet, roughly-speaking, economy-wide inflation - measured by CPI and wage growth - was closer to 15%. Consumers have demonstrably been squeezed, and they know it.

A second metric we consider is gross profit margin, a company's revenues minus the direct costs involved in production like ingredients, energy, factory labour and so on. In LVMH's case, gross profit margins actually rose during the inflationary spike. Many of its peers broadly maintained profitability. This suggested to us that the price increases may be excessive and could prompt a significant and lasting shift in consumer behaviour. We reduced our luxury goods exposure and the sector fell around 14% over the second half of our financial year.

On the contrary, beer companies were considerably, cheeringly kinder to their consumers. We invest in global behemoth Anheuser-Busch InBev, which is currently circa 2.7% of the portfolio. The company saw its gross margin decline from over 60% pre-Covid to a low of less than 54% in 2024, due to its costs rising in excess of its price increases. While this is a short-term challenge to profitability, they should be able to raise prices and profit margins steadily over the longer term - having avoided alienating consumers. Of course, there is a level of loyalty to beer brands and taste profiles which is a further positive for us as investors - people tend not to feel too enticed by supermarket-branded beers, whatever the price.

Of course, not all consumer trends can be captured by the relationship between profit margin and price increases. The streaming companies have been universally hit by a surprise slowdown in music subscriptions earlier in the year, despite prices barely rising over the last few years. This in turn hit shares in Universal Music Group ("UMG") in dramatic fashion in July. While the streamers are intending a rare moment of collaboration to reignite growth, the uncertainty was not tenable given UMG's share price and we have fully exited the stock.

China's economic challenges

Chinese companies and consumers have been a notable source of revenues for European businesses over the last decade and a half. With that in mind, a series of speedbumps in the road of Chinese growth has caused some concern for investors. This has been most evident in the failure of 'cyclical' stock prices to recover even as interest rates began to fall (historically, cyclical stocks - those most sensitive to economic growth - have seen their fortunes move in lockstep with rates).

At the same time, the Chinese government has made concerted efforts to establish a presence in premium export markets - notably electric vehicles, solar panels and wind turbines. These efforts have had the explicit goal of counteracting the slowdown in growth driven by a faltering consumer market. The prospect of further protectionism from Europe and the US therefore prompted a direct response from the Chinese authorities in the form of late September's stimulus package.

How do we navigate such a critical theme for the global economy? We have generally avoided European automakers as the structural challenges from an efficient, competitive Chinese auto-complex look genuine. As already mentioned, we reduced our luxury goods exposure, where so much growth in recent years has depended on Chinese wealth-creation. However, we took a contrarian stance in buying elevator company, KONE, in January.

The company has been viewed as a China-proxy - but selling new elevators to China is now only 15% of its profit (down from 50% in 2016). That means its share price can reflect changes in sentiment regarding the Chinese economy, even as its financial performance doesn't. Instead, the company derives revenue from servicing elevators and is using new technology to anticipate future servicing needs. Legacy HEFT readers may be familiar with the term 'Big is Beautiful', our framework for assessing the ability of large incumbents to further bolster their market-leadership through scale and expertise. Kone is a classic example in this niche.

As for China, we expect it to be a key determinant of market behaviour in 2025. We lean towards an improvement in sentiment, which should benefit those cyclical companies we own across industrials and materials, some of which have been the biggest laggards in the 2024 financial year due to their direct or indirect exposure to the country. We note some encouraging datapoints suggesting there may be sizeable stimulus ammunition already in the pipeline. Watch this space.

A changeable interest rate cycle

The catalyst for the summer turmoil in markets, or the 'rotation' to use the market vernacular, started with the US Federal Reserve more overtly indicating that interest rates could soon start coming down. Lower interest rates tend to be taken as good news for markets, increasing risk appetite.

It is reckless to chase short-term momentum in the markets, especially when so much of it is driven by short-term speculation, but we were certainly cognisant of the potential for lower interest rates to fundamentally improve the outlook for certain business models: those in which the cost of debt is a key determinant of profitability and equity value. This environment informed our decision to buy Spanish-listed telecommunication towers operator Cellnex and UK-listed utility company National Grid. The latter appealed in part due to the increased policy stability in the UK and the fact the company derives half its revenues from the US.

Legacy HNE readers may recognise Cellnex as a previous holding: the pressure on the share price of this company when interest rates started to rise in 2022 remains a vivid memory, but also reminds us that a similar reversal is possible as rates start to ease again. It is also helpful that during the interim, Cellnex has, in our view, seen an upgrade to its management, governance and strategy. We expect it to be a very shareholder-friendly company in the months ahead, through the initiation of share buybacks.

There is rampant speculation on the impact on the US interest rate cycle of the recent re-election of Donald Trump as US president. We believe that his sparse policy programme during campaigning provides limited evidence on which to base assumptions. Instead, we will be watching, along with the world, to see what emerges as his policy agenda in the early days of his presidency.

How today's market structure informs our thinking

Fundamental active investors now account for only 10-20% of daily traded volumes in the European equity market. As such, we are minority participants in a market which is dominated by passive funds and hedge funds with very short-term strategies. Neither of these are equipped to take the long-term view, to take the other side of the trade when panic sets in. The result is outsized reactions to economic, market or company news that are not reflective of long-term prospects or value. Conversely though, that means there is opportunity for those of us with the ability - the luxury - to express a long-term view. Our summer purchase of Ryanair is a case in point. We bought shares on the days when the numbers of sellers vastly outweighed the buyers.

We also believe that this is the lens through which we should view the changeable fortunes of technology shares over the summer. For example, shares in ASML - a major player in the AI supply chain and one of Europe's largest companies - suddenly declined by 30%. This was despite so-called 'hyperscalers', the technology giants like Microsoft and Alphabet ploughing billions into AI, indicating that they are planning to maintain or even grow their expenditure on the technology.

As such, a narrative emerged explaining that the sell-off stemmed from concern over a lack of return on investment for the hyperscalers. Our simple view is: it is too early to tell what the return will be, but either way we do not expect them to stop investing. That alone is sufficient to ensure plentiful revenues flow to the supply chain, such as our investments across semiconductor capital equipment, building materials and industrial equipment (which collectively add up to over 15% of the Company's NAV). As for that summer sell-off, it reaffirmed the 'blunt tool' that is the short-termism of a majority of participants in the market.

Outlook

We believe that we are seeing the conditions for a catchup in those underperforming cyclical areas of the equity market thanks to: 1) China's recent efforts to stabilise its economy, 2) lower interest rates filtering through the global economy, and 3) encouraging datapoints suggesting ongoing vigour in the US economy. There is much geopolitical uncertainty across the globe, but, sombre as it may sound, that has been a constant in recent years and one that has, thus far, not constrained strong equity market performance.

Finally, a word on our home continent, which is suffering an identity crisis of sorts relating to its role in the world, its poor demographics, its high public debt levels and its lagging economic growth. While you may have expected us to dwell in this commentary on the state of the European political landscape at a time of great uncertainty, the impact of this on our portfolio is relatively limited. This reflects the very nature of the companies we invest in - global operators that happen to be listed in Europe. The most pertinent factor is the geographies from which they draw revenues, which are happily very diversified. As such, your Company is positioned to benefit from any improvement in economic sentiment and activity.

Tom O'Hara and Jamie Ross

Fund Managers

11 December 2024

MANAGING RISKS

The Board, with the assistance of the Manager, has carried out a robust assessment of the principal risks facing the Company, including those which would threaten its business model, future performance, solvency, liquidity in its shares and reputation. The assessment includes consideration of economic and political risks, most of which are outside the Board's direct control. The Board has drawn up a detailed matrix of risks facing the Company, together with a strategic heat map charting the top ten risks, which it has distilled into six categories of principal risks, as shown on pages 21-23. To assist in mitigating the decision-taking risks as far as practicable, the Board has also put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objective and policy, which it reviews at each board meeting.

The Company's principal risks and mitigating steps are as follows:

Risk	Risk Controls and mitigation
Market The Company's absolute performance in terms of NAV total return and share price total return is dependent on the performance of the investee companies and markets in which the Company invests. Performance is also impacted by currency and interest rate movements, as well as by political and economic events, including changes to the fiscal environment for UK investors.	Investment risk is spread by holding a diversified portfolio of investee companies, typically with strong balance sheets and good growth prospects. The Company does not currently undertake any currency or market movement hedging strategies, though it has the ability to do so. The Company's investment strategy is reviewed formally by the Board at least annually, and takes into account shareholder views, developments in the marketplace and how the structure of the Company is positioned to meet them.
Investment performance The relative performance of the Company against its benchmark and European open and closed-ended peers depends principally on asset allocation and stock selection, which, in turn, require investment skills. In exercising these skills, the Manager is responsible for adhering to the investment policy and investment guideline restrictions set by the Board and amended from time to time.	The Board is responsible for ensuring that the investment policy is met. The day-to-day management of the Company's assets is delegated to the Manager under investment guidelines, with close monitoring of the guidelines. The Board meets the Manager on a regular basis and keeps investment performance, in terms of both capital and income returns, under close review. The Management Engagement Committee reviews the Manager's performance annually. Although the Company is not invested against any income criteria, the net income of the Company and the revenue reserves are monitored against dividend pay-outs and anticipated future net income. Investment performance is monitored over the short, medium and longer term against the Company's benchmark and against a wider peer group of open and closed-ended investment vehicles investing in listed European equities. The Board also reviews the performance attribution analysis against benchmark in detail, to understand the main drivers of performance in reporting periods. The Fund Managers keep the global political and economic picture under review as part of the investment process and provide the Board with frequent updates to enable the directors to monitor and manage risks of geopolitical disruption and global economic risks. Climate risk is assessed within the individual stock selection process and is reported within quarterly Fund Manager board reports.
Business strategy and market rating A number of factors, including the setting of an appropriate investment proposition, changing investor demand or investment performance may lead to an increase or decrease in demand for and/or supply of the Company's shares and will impact how the shares are priced in relation to the Company's underlying NAV per share.	The Board monitors the Company's ordinary share price relative to NAV per share and reviews changes in shareholdings in the Company to understand short or longer-term trends in supply of and demand for the shares. The Company is able, when appropriate, to issue or to buy back shares to help maintain an orderly secondary market in the Company's shares, but not against any prescribed discount or premium levels, other than avoiding dilution to existing shareholders' interests through share issuance at a discount or buybacks at a premium. The Board also monitors the rating of the Company's shares against other closed-ended investment companies in the sector.  The liquidity of the portfolio is monitored and is considered sufficient for the purposes of a closed-ended fund, including where the Company buys back its own shares. During the year and since the year end, the Company has bought back shares to help manage the demand for and supply of shares and the market rating. As part of the HEFT/HNE combination in 2024, the Company has introduced the prospect of a periodic tender offer to shareholders in the event that the Company underperforms its benchmark. There will also be consideration of how the Company's rating has performed relative to market in three years' time. See pages 28-29 for more details.
Gearing The Fund Managers have authority to use gearing in line with the Company's investment policy. In the event of a significant or prolonged fall in equity markets, any gearing in place would exacerbate the effect of the falling market on the Company's NAV and, consequently, its share price. Gearing would have the opposite effect in the event of a significant or prolonged rise in equity markets in which the Company is invested.	The Company's investment policy sets a limit on borrowing of 20% of net assets at the time the borrowing is assumed, and the Board monitors the level of gearing at each meeting. The Manager makes active use of the Company's gearing with close oversight of borrowings and cash management from the Board when gearing is extended or contracted in relation to different market conditions and as applied to different investment and disinvestment opportunities.
Operational The Company is reliant on third-party service providers for all its operational activities, including reliance on Janus Henderson as investment manager, corporate secretary and administrator to the Company. The Company depends on the diligence, skill and judgement of the Manager's investment team. Continuity of service of the team and individuals in the team could impact the future success of the Company. Failure of third parties' operational or internal control systems could prevent the accurate reporting or monitoring of the Company's financial position. Janus Henderson subcontracts some of the operational functions (principally those relating to trade processing, investment administration and accounting) to BNP Paribas. Failure of controls could also impact the Company meeting its regulatory obligations.	The Management Engagement Committee reviews each service provider at least annually, and, in conjunction with the Audit and Risk Committee, considers reports on internal controls, including any reported breaches, throughout the year, from all the service providers. This reporting covers such matters as business resilience and cyber security risk as well as matters that are subject to review as part of the annual audit of the Company. Janus Henderson has a strong European Equities team, which supports the Fund Managers in the management of the Company's portfolio. Constructive challenge, succession and continuity planning are key elements of the management of the team and are reported closely to the Board with consultation on any major changes. The Board reviews the internal control structure and reporting for the Company from all agents and meets with their representatives throughout the year to make enquiry on the systems and controls. The Board considers climate and environmental risk in respect of operational capability in its review meetings with service providers.
Regulatory and reporting The Company operates in a highly regulated environment which could inter alia affect the listing of the Company's shares and the Company's tax status, as well as how the Company conducts its affairs in the market more generally. The Company has strict reporting requirements that need to be adhered to both internally and externally to the market.	The Board is apprised regularly of impending regulatory and reporting changes and monitors closely, through its various agents, the Company's adherence to existing requirements, including maintaining investment trust and listed company status. The Board is also kept aware of fiscal and other developments that might affect shareholders' interests. The Board is kept informed of corporate governance developments and, as far as practicable, adheres to corporate governance guidelines that are applicable to an investment company.

THE COMPANY'S VIABILITY

The AIC Code of Corporate Governance includes a requirement for the Board to assess the future prospects for the Company, and to report on that assessment within the Annual Report. The Board considers that certain characteristics of the Company's business model and strategy are relevant to this assessment:

§ the Board aims for the Company to deliver long-term performance;

§ the Company's investment objective, strategy and policy, which are subject to regular Board monitoring, mean that the Company is invested mainly in readily realisable, listed securities and that the level of borrowings is restricted; and

§ the Company is a closed-ended investment company and therefore does not suffer from liquidity issues arising from unexpected redemptions.

Also relevant were a number of aspects of the Company's operational agreements:

§ the Company retains title to all assets held by the custodian under the terms of formal agreements with the custodian and depositary;

§ revenue and expenditure forecasts are reviewed by the directors at each board meeting; and

§ cash is held with approved banks.

In addition, the directors carried out a robust assessment of the principal risks and uncertainties which could threaten the Company's business model, including future performance, liquidity and solvency, and climate change, and considered emerging risks that could have a future impact on the Company. The Board takes into account the liquidity of the portfolio, short-term and structural gearing, the income stream from the portfolio, and the Company's ability to meet its liabilities as they fall due. This includes consideration of how the forecast income stream, expenditure and levels of reserves could impact the Company's ability to pay dividends to shareholders. Detailed income and expense forecasts are made over a shorter time frame. The nature of the Company's business means that such forecasts are equally valid to be considered over the longer five-year period as a means of assessing whether the Company can continue in operation.

The directors assess viability over five-year rolling periods, taking account of foreseeable severe but plausible scenarios. This includes consideration of the duration of the Company's loan notes and borrowing facility and how a breach of any covenants could impact the Company's NAV and share price. The Board has assessed the risks associated with geopolitical, economic and health crises in recent years, including the escalating conflict in the Middle East and the ongoing war in Ukraine, and has concluded that these events have not affected the long-term viability of the Company, and its ability to continue in operation, notwithstanding any short-term uncertainty they have caused in the markets.

In common with investment companies generally, the viability statement does not take into account corporate events which might be initiated by the Company or to which the Company might be subject, and where the Company's circumstances might be dramatically changed. An investment company has relatively liquid assets, compared to industrial or commercial companies, and can, therefore, be subject to major and unexpected strategic change. No such event or change affecting the Company's viability is known or currently in contemplation by the Company and the application of periodic tender offers does not affect that assessment.

The directors believe that a rolling five-year period best balances the Company's long-term objective, its financial flexibility and scope with the difficulty in forecasting economic conditions affecting the Company and its shareholders.

Following completion of the HEFT/HNE combination in July 2024, the Board has introduced a five-yearly conditional performance-related tender offer, and an additional discretionary tender mechanism following the year ending 30 September 2027. See pages 28-29 for more details.

Based on their assessment, and in the context of the Company's business model, strategy and operational arrangements above, the directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five-year period to September 2029.

The directors have also concluded that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of these financial statements, being 31 December 2025, and it is therefore appropriate to prepare these financial statements on a going concern basis.

RELATED-PARTY TRANSACTIONS

The Company's transactions with related parties in the year were with the directors and the Manager. There were no material transactions between the Company and its directors during the year other than amounts paid to them in respect of remuneration and expenses, for which there were no outstanding amounts payable at the year end. Details of fees paid to directors are included in the Directors' Remuneration Report on page 55. Directors' shareholdings in the Company are disclosed on page 54.

Janus Henderson facilitates marketing activities with third parties which are recharged to the Company. Total amounts paid to Janus Henderson in respect of sales and marketing, including VAT, for the period ended 30 September 2024 amounted to £48,000 (2023: £84,000). As part of the HEFT/HNE combination, the Manager has committed to additional spending on marketing activities in the coming year.

The Company and HNE both bore their own costs in relation to the combination. These were reflected in the formula applied to the respective net asset values of the two companies when they were compared to calculate the number of shares in HET to be issued to HNE shareholders.

Janus Henderson contributed £1.55m to the costs of the proposals to make sure that they were cost neutral for shareholders continuing, irrespective of the results of the combination. Direct costs borne by both HNE and HET were fully covered by both the contribution by Janus Henderson, and the financial impact of the tender offer in the Company and the cash exit in HNE, both being at a small discount to the prevailing net asset values when the HEFT/HNE combination completed. Those discounts resulted in a modest asset uplift for ongoing shareholders. The adjustment to the dividend payment profile for the Company during the year, protected the Company's existing shareholders from the impact of the issuance of shares and the relatively short period to earn income on the enlarged share capital. As a result, shareholders were protected from any adverse capital or income impact arising from the combination. Janus Henderson had also agreed to protect the Company from any costs, had the transaction not proceeded to completion.

STATEMENT OF DIRECTORS' RESPONSIBILITIES UNDER DTR 4.1.12

Each director, as listed below, confirms that, to the best of their knowledge:

§ the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards comprising FRS 102 and applicable law) give a true and fair view of the assets, liabilities, financial position and return of the Company; and

§ the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

Vicky Hastings

Chair of the Board

11 December 2024

PORTFOLIO INFORMATION

Top 10 investments at 30 September 2024

Company	Sector	Country of listing	Valuation £'000		Percentage of portfolio
Novo Nordisk	Pharmaceuticals and Biotechnology	Denmark	41,930		6.07
ASML	Technology Hardware and Equipment	Netherlands	34,798		5.03
SAP	Software and Computer Services	Germany	31,184		4.51
TotalEnergies	Oil, Gas and Coal	France	24,622		3.56
Siemens	General Industrials	Germany	23,147		3.35
UniCredit	Banks	Italy	23,012		3.33
Deutsche Boerse	Investment Banking and Brokerage Services	Germany	19,999		2.89
Munich Re	Non-life Insurance	Germany	19,512		2.82
Anheuser-Busch InBev	Beverages	Belgium	18,885		2.73
CRH	Construction and Materials	Ireland	18,877		2.73
			------------		---------
Total (10 largest)			255,966		37.02
			=======		=====
Sector exposure at 30 September as a percentage of the investment portfolio excluding cash				2024 %		2023 %
Industrials				27.3		26.7
Health Care				17.4		11.6
Technology				13.7		8.9
Financials				13.2		6.2
Consumer Discretionary				9.6		12.0
Consumer Staples				7.0		6.5
Energy				3.5		8.9
Basic Materials				2.5		14.1
Utilities				2.3		-
Telecommunications				1.9		-
Real Estate				1.6		-
UK Government Bonds				-		5.1

Geographic exposure at 30 September as a percentage of the investment portfolio excluding cash	2024 %	2023 %
France	22.4	30.5
Germany	20.8	16.8
Switzerland	13.8	5.0
Netherlands	7.8	11.2
Denmark	7.4	6.0
United Kingdom	7.4	6.8
Ireland	6.1	-
Belgium	4.0	6.2
Spain	3.6	1.4
Italy	3.3	1.4
Finland	1.8	8.4
Austria	1.6	-
Norway	-	2.9
Sweden	-	3.4

INCOME STATEMENT

	Year ended 30 September 2024			Year ended 30 September 2023
	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Gains on investments held at fair value through profit or loss	-	46,078	46,078	-	63,293	68,293
Exchange gains/(losses) on currency transactions	-	1,093	1,093	-	(5)	(5)
Income from investments (note 2)	11,558	-	11,558	11,206	-	11,206
Other income	515	-	515	224	-	224
	----------	----------	----------	----------	----------	----------
Gross revenue and capital gains	12,073	14,171	59,244	11,430	68,288	79,718
Management fee (note 6)	(735)	(2,204)	(2,939)	(587)	(1,762)	(2,349)
Other administration expenses	(656)	(22)	(678)	(639)	-	(639)
	----------	----------	----------	----------	----------	----------
Net return before finance costs and taxation	10,682	44,945	55,627	10,204	66,526	76,730
Finance costs	(118)	(355)	(473)	(129)	(385)	(514)
	----------	----------	----------	----------	----------	----------
Net return before taxation	10,564	44,590	55,154	10,075	66,141	76,216
Taxation on net return  (note 7)	147	-	147	(887)	(36)	(923)
	----------	----------	----------	----------	----------	----------
Net return after taxation	10,711	44,590	55,301	9,188	66,105	75,293
	======	======	======	======	======	======
Return per ordinary share  (note 8)	4.43p	18.45p	22.88p	4.32p	31.07p	35.39p
	======	======	======	======	======	======

The 'Total' columns of this statement represent the Income Statement of the Company.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

The Company had no recognised gains or losses other than those disclosed in the Income Statement.

STATEMENT OF CHANGES IN EQUITY

Year ended 30 September 2024	Called-up share capital £'000	Share premium account £'000	Capital reserve £'000	Revenue reserve £'000	Other reserves  £'000	Total £'000
At 30 September 2023	10,819	41,995	217,076	12,496	96,611	378,997
Cancellation of share premium account	-	(41,995)	-	-	41,995	-
Issue of ordinary shares on HEFT/HNE combination	7,550	302,753	-	-	-	310,303
Issue costs in respect of the HEFT/HNE combination	-	(1,453)	-	-	-	(1,453)
Contribution from JHI towards the HEFT/HNE combination	-	-	1,550	-	-	1,550
Tender offer of ordinary shares for treasury	-	-	-	-	(63,907)	(63,907)
Net return after taxation	-	-	44,590	10,711	-	55,301
Buyback of ordinary shares for treasury (note 4)	-	-	-	-	(4,279)	(4,279)
Ordinary dividends paid (note 4)	-	-	-	(12,978)	-	(12,978)
	----------	----------	----------	----------	----------	----------
At 30 September 2024	18,369	301,300	263,216	10,229	70,420	663,534
	======	======	======	======	======	======
Year ended 30 September 2023	Called-up share capital £'000	Share premium account £'000	Capital reserve £'000	Revenue reserve £'000	Other reserves  £'000	Total £'000
At 30 September 2022	10,819	41,995	151,154	13,840	96,611	314,419
Net return after taxation	-	-	66,105	9,188	-	75,293
Buyback of ordinary shares for treasury (note 4)	-	-	(183)	-	-	(183)
Ordinary dividends paid  (note 4)	-	-	-	(10,532)	-	(10,532)
	----------	----------	----------	----------	----------	----------
At 30 September 2023	10,819	41,995	217,076	12,496	96,611	378,997
	======	======	======	======	======	======

STATEMENT OF FINANCIAL POSITION

	2024 £'000	2023 £'000
Fixed assets
Investments held at fair value through profit or loss	691,497	384,249
	-------------	-------------
Current assets
Debtors	14,032	11,745
Cash at bank	3,113	15,857
	-------------	-------------
	17,145	27,602
Creditors: amounts falling due within one year	(16,143)	(2,655)
	-------------	-------------
Net current assets	1,002	24,947
	-------------	-------------
Total assets less current liabilities	692,499	409,196
Creditors: amounts falling due after one year	(28,965)	(30,199)
	-------------	-------------
Net assets	663,534	378,997
	========	========
Capital and reserves
Called-up share capital	18,369	10,819
Share premium account	301,300	41,995
Capital reserve	263,216	217,076
Revenue reserve	10,229	12,496
Other reserves	70,420	96,611
	-------------	-------------
Shareholders' funds	663,534	378,997
	========	========
Net asset value per ordinary share (note 9)	201.39p	178.13p
	========	========

CASH FLOW STATEMENT

	Year ended 30 September 2024 £'000	Year ended 30 September 2023 £'000
Cash flows from operating activities
Net return before taxation	55,154	76,216
Add back: finance costs	473	514
Gains on investments held at fair value through profit or loss	(46,078)	(68,293)
(Gains)/losses on foreign exchange	(1,093)	5
Taxation paid	(257)	(1,389)
Increase in debtors	(232)	(163)
Increase in creditors	438	1,099
	-------------	-------------
Net cash inflow from operating activities*	8,405	7,989
	-------------	-------------
Cash flows from investing activities
Sales of investments held at fair value through profit or loss	461,678	288,351
Purchases of investments held at fair value through profit or loss	(405,566)	(290,172)
	-------------	-------------
Net cash inflow/(outflow) from investing activities	56,112	(1,821)
	-------------	-------------
Cash flows from financing activities
Buyback of ordinary shares for treasury	(3,044)	(183)
Equity dividends paid	(12,978)	(10,532)
Costs associated with the HEFT/HNE combination	(1,225)	-
Net cash acquired and received following the HEFT/HNE combination	4,512	-
Total cash paid in tender offer (including costs)	(63,907)	-
Interest paid	(471)	(863)
	-------------	-------------
Net cash outflow from financing activities	(77,113)	(11,578)
	-------------	-------------
Net decrease in cash and equivalents	(12,596)	(5,410)
Cash and cash equivalents at beginning of period	15,857	21,272
Losses on foreign exchange	(148)	(5)
	-------------	-------------
Cash at bank at end of period	3,113	15,857
	-------------	-------------
Comprising:
Cash at bank	3,113	15,857
	========	========

* Cash inflow from dividends was £10,442,000 (2023: £9,394,000) and cash inflow from interest was £535,000 (2023: £213,000)

NOTES TO THE FINANCIAL STATEMENTS

1.	Accounting policies
	(a) Basis of preparation
	The Company is a registered investment company as defined in s833 Companies Act 2006 and is incorporated in the United Kingdom. It operates in the United Kingdom and is registered at the address below. The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 - The Financial Reporting Standard applicable in the UK and Republic of Ireland and with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts (the "SORP") amended in July 2022 by the Association of Investment Companies. The principal accounting policies applied in the presentation of these financial statements are set out in the Annual Report. These policies have been consistently applied to all the years presented. The financial statements have been prepared under the historical cost basis except for the measurement of investments at fair value.  In applying FRS102, financial instruments have been accounted for in accordance with s11 and 12 of the Standard.  All the Company's operations are of a continuing nature. Issue of shares pursuant to the HEFT/HNE combination On 4 July 2024, the Company issued new ordinary shares to shareholders of HNE in consideration for the receipt by the Company of assets pursuant to a scheme of reconstruction and liquidation of HNE. The directors have considered the substance of the assets and activities of HNE in determining whether this represents the acquisition of a business. In this case the combination is not judged to be an acquisition of a business, and therefore has not been treated as a business combination in accounting terms. Rather, the cost to acquire the assets and liabilities of HNE has been allocated between the acquired identifiable assets and liabilities based on their relative fair values on the acquisition date without attributing any amount to goodwill or to deferred taxes. Investments and cash were transferred from HNE. All assets were acquired at their fair value. The value of the assets received, in exchange for shares issued by the Company, have been recognised in share capital and share premium, as shown in Statement of Changes in Equity. Direct costs, including professional costs, in respect of the shares issued have been recognised in the share premium account. As part of the HEFT/HNE combination, JHI contributed to £1.55m to the costs of the proposals and further details are included in note 23 in the Annual Report.
	(b) Going concern The assets of the Company consist of securities that are readily realisable and, accordingly, the directors believe that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements being 31 December 2025. In coming to this conclusion, the directors have considered the nature of the portfolio, being that the securities held are readily realisable, the strength of its distributable reserves, and the ongoing costs of the Company. The directors have also reviewed the revenue forecast and size of the Company's long-term debt and stress-tested its financial covenants. As part of their usual assessment of risks facing the Company, the directors have further considered the continued macroeconomic and geopolitical uncertainty with the escalating conflict in the Middle East, the ongoing war in Ukraine, heightened tensions between the US and China, the impact of these on supply chains and the possible impact of climate change risk on the value of the portfolio. The directors have concluded that the Company is able to meet its financial obligations, including the interest payments for its loan notes, as they fall due for a period of at least twelve months from the date of this report.
2.	Income from investment
		2024 £'000	2023 £'000
	Listed investments:
	Overseas dividends	10,746	10,143
	UK dividends	481	969
	UK fixed-income interest	331	94
		---------	---------
		11,558	11,206
		=====	=====
	Special dividends received in the year amounted to £104,000 (2023: £358,000), of which £104,000 is classified as revenue (2023: £358,000) and nil (2023: nil) classified as capital.
3.	Dividend
	The Board recommends a final dividend of 1.30p per share. When added to the interim dividend of 3.05p, this will bring the full-year dividend to 4.35p per share (2023: 4.35p). Subject to approval at the AGM on 29 January 2025, the final dividend will be payable on 3 February 2025 to shareholders on the register at close of business on 3 January 2025. The shares will be quoted ex-dividend on 2 January 2025.

4.	Dividends paid and payable on ordinary shares
	Dividends on ordinary shares	Record date	Payment date	2024 £'000	2023 £'000
	Final dividend (3.15p) for the year ended 30 September 2022	6 January 2023	6 February 2023	-	6,702
	Special dividend (0.50p) for the year ended 30 September 2022	6 January 2023	6 February 2023	-	1,064
	Interim dividend (1.30p) for the year ended 30 September 2023	2 June 2023	27 June 2023	-	2,766
	Final dividend (3.05p) for the year ended 30 September 2023	5 January 2024	5 February 2024	6,489	-
	Interim dividend (3.05p) for the year ended 30 September 2024	7 June 2024	28 June 2024	6,489	-
				----------	-----------
				12,978	10,532
				======	======
	The final dividend for the year ended 30 September 2024 has not been included as a liability in these financial statements. The total dividend payable in respect of the financial year, which forms the basis of the retention test under s1158 Corporation Tax Act, is set out below.
				2024 £'000		2023 £'000
	Revenue available for distribution by way of dividend for the year			10,711		9,188
	Interim dividend (3.05p) for the year ended 30 September 2024 (based on 212,768,122 ordinary shares in issue at 7 June 2024)			(6,489)		-
	Final dividend (1.30p) for the year ended 30 September 2024 (based on 323,697,014 ordinary shares in issue at 9 December 2024)]			(4,208)		-
	Interim dividend (1.30p) for the year ended 30 September 2023 (based on 212,768,122 ordinary shares in issue at 2 June 2023)			-		(2,766)
	Final dividend (3.05p) for the year ended 30 September 2023 (based on 212,768,122 ordinary shares in issue at 5 January 2024)			-		(6,489)
				------------		-------------
	Undistributed revenue for s1158 purposes			14		(67)
				=======		=======
	All dividends have been paid or will be paid out of revenue profits or revenue reserves.

5.	Called-up share capital
		Number of shares entitled to dividend	Shares held in treasury	Total number of shares	Nominal value of shares £'000
	At 30 September 2023	212,768,122	3,621,788	216,389,910	10,819
	Issue of new ordinary shares	151,000,587	-	151,000,587	7,550
	Tender offer or ordinary shares for treasury	(31,915,217)	31,915,217	-	-
	Buyback into treasury of 2,376,191 shares	(2,376,191)	2,376,191	-	-
		-----------------	----------------	------------------	-----------
	At 30 September 2024	329,477,301	37,913,196	367,390,497	18,369
		==========	=========	==========	======
	At 30 September 2022	212,913,122	3,476,788	216,389,910	10,819
	Buyback into treasury of 145,000 shares	(145,000)	145,000	-	-
		----------------	------------	-----------------	----------
	At 30 September 2023	212,768,122	3,621,788	216,389,910	10,819
		==========	========	==========	======

On 4 July 2024 the Company issued 151,000,587 new shares to HNE shareholders in consideration of the £310,303,000 of net assets acquired from HNE in accordance with the HEFT/HNE combination. As announced on 25 June 2024, 31,915,217 shares were bought back pursuant to the tender offer at a total cost of £63,907,000 representing 198.846970p per share paid to shareholders plus stamp duty and commission. All shares repurchased will be held in treasury.

During the year to 30 September 2024, the Company repurchased 2,376,191 (2023: 145,000) ordinary shares at a cost of £4,279,000 including expenses (2023: £183,000). Since the year end and as at 9 December 2024, 5,780,287 shares have been repurchased to be held in treasury. The ordinary shares held in treasury total 43,693,483 as at 9 December 2024 and have no voting rights and are not entitled to dividends.

6.	Management fee
		30 September 2024			30 September 2023
		Revenue £'000	Capital  £'000	Total £'000	Revenue  £'000	Capital  £'000	Total £'000
	Management fee	735	2,204	2,939	587	1,762	2,349
		====	=====	=====	====	=====	=====
	A description of the basis for calculating the management fee is given in the Business Model on page 18. Management fees are allocated 25% to revenue and 75% to capital in the Income Statement.
7.	Taxation
(a)	Analysis of charge for the year
		Year ended 30 September 2024			Year ended 30 September 2023
		Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total  £'000
	Overseas tax (received)/suffered	(147)	-	(147)	887	36	923
		----------	----------	----------	----------	----------	----------
	Total taxation for the year	(147)	-	(147)	887	36	923
		======	======	======	======	======	======

b)	Factors affecting the tax charge for the year
		Year ended 30 September 2024			Year ended 30 September 2023
		Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
	Return before taxation	10,564	44,590	55,154	10,075	66,141	76,216
		----------	----------	----------	----------	----------	----------
	Corporation tax at an effective rate of 25.0% (2023: 22.0%)	2,641	11,148	13,789	2,217	14,551	16,768
	Effects of:
	Non-taxable capital profits	-	(11,793)	(11,793)	-	(15,023)	(15,023)
	Non-taxable overseas income	(2,807)	-	(2,807)	(2,445)	-	(2,445)
	Expenses not deductible for tax purposes	1	5	6	-	-	-
	Current-year expenses not utilised	165	640	805	228	472	700
	Overseas tax	(147)	-	(147)	887	36	923
		----------	----------	----------	----------	----------	----------
		(147)	-	(147)	887	36	923
		======	======	======	======	======	======
	The UK corporation tax is an effective rate of 25.0% (2023: 22.0%). The tax charge for the year is lower than the corporation tax rate. No provision for deferred tax has been made in the current or prior accounting year. At the period end, after offset against income taxable on receipt, there is a potential deferred tax asset of £9,199,000 (2023: £8,389,000) in relation to surplus management expenses. It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these amounts and therefore no deferred tax asset has been recognised.
8.	Return per ordinary share
	The return per ordinary share is based on the net return attributable to the ordinary shares of £55,301,000 (2023: £75,293,000) and on 241,688,916 ordinary shares (2023: 212,776,067) being the weighted average number of ordinary shares in issue during the year excluding shares held in treasury. The return per ordinary share can be further analysed between revenue and capital as below.
						2024 £'000	2023 £'000
	Net revenue return					10,711	9,188
	Net capital return					44,590	66,105
						------------	------------
	Net total return					55,301	75,293
						=======	=======
	Weighted average number of ordinary shares in issue during the year					241,688,916	212,776,067
	Revenue return per ordinary share					4.43p	4.32p
	Capital return per ordinary share					18.45p	31.07p
						----------	------------
	Total return per ordinary share					22.88p	35.39p
						======	=======
	The Company does not have any dilutive securities and therefore the basic and diluted returns per share are the same.

9.	Net asset value per share
	The NAV per ordinary share is based on the net assets attributable to the ordinary shares of £663,534,000 (2023: £378,997,000) and on 329,477,301 (2023: 212,768,122) shares in issue on 30 September 2024, excluding treasury shares. The movements during the year of the assets attributable to the ordinary shares were as follows:
		2024 £'000	2023 £'000
	Total net assets at start of year	378,997	314,419
	Net return for the year after tax	55,301	75,293
	Buyback of ordinary shares for treasury	(4,279)	(183)
	Dividends paid on ordinary shares	(12,978)	(10,532)
	Issue of ordinary shares on HEFT/HNE combination	310,303	-
	Issue costs in respect of the HEFT/HNE combination	(1,453)	-
	Contribution from JHI towards the HEFT/HNE combination	1,550	-
	Tender offer of ordinary shares for treasury	(63,907)	-
		-----------	-----------
	Net assets attributable to the ordinary shares at 30 September	663,534	378,997
		======	======
10.	2024 financial information The figures and financial information for 2024 are extracted from the Annual Report for the year ended 30 September 2024 and do not constitute statutory accounts. The Company's Annual Report for the year ended 30 September 2024 has been audited but has not yet been delivered to the Registrar of Companies. The Independent Auditor's Report on the 2024 Annual Report is unqualified, does not include a reference to any matter to which the auditor draws attention without qualifying the report, and does not contain any statements under s498 Companies Act 2006 (the "Act").

11.	2023 financial information The figures and financial information for 2023 are extracted from the published Annual Report for the year ended 30 September 2023 and do not constitute statutory accounts for that year. The 2023 Annual Report has been delivered to the Registrar of Companies and includes an unqualified Independent Auditor's Report, does not include a reference to any matter to which the auditor draws attention without qualifying the report, and does not contain a statement under s498 of the Act.
12.	Annual Report 2024 The Annual Report for the year ended 30 September 2024 will be posted to shareholders and an electronic copy will shortly be  available at www.hendersoneuropean.com and in hard-copy format from the registered office at 201 Bishopsgate, London, EC2M 3AE. The Annual Report includes the Notice of Annual General Meeting, which will be held at 11.30 am on Wednesday, 29 January 2025 at 201 Bishopsgate, London EC2M 3AE.
13.	General information
	Company status Henderson European Trust plc is registered in England and Wales (company number 00427958), has its registered office at 201 Bishopsgate, London EC2M 3AE and is listed on the main market of the London Stock Exchange.  SEDOL/ISIN: Ordinary shares: BLSNGB0/GB00BLSNGB01 London Stock Exchange ("TIDM") Code: HET Global Intermediary Identification Number ("GIIN"): THMNPN.99999.SL.826 Legal Entity Identifier ("LEI") number: 213800GS89AL1DK3IN50
	Directors and secretary The directors of the Company are Vicky Hastings (Chair), Robin Archibald (Senior Independent Director and Chairman of the Audit and Risk Committee), Marco Maria Bianconi, Melanie Blake, Stephen King and Rutger Koopmans. The Corporate Secretary is Janus Henderson Secretarial Services UK Limited. Website Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets, insights, announcements, reports and details of general meetings can be found at www.hendersoneuropean.com.

	For further information, please contact:
	Vicky Hastings Chair of the Board Henderson European Trust plc Telephone: [phone]	Dan Howe Head of Investment Trusts Janus Henderson Investors Telephone: [phone]
	Tom O'Hara Fund Manager Janus Henderson Investors Telephone: [phone]	Harriet Hall PR Director, Investment Trusts Janus Henderson Investors Telephone: [phone]
	Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) are incorporated into, or form part of, this announcement.

 

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