Final Results

RNS Number : 2867F

Henderson Eurotrust PLC

07 October 2008

7 October 2008

This announcement contains regulated information.

HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

	31 July 2008	31 July 2007	Change
	Pence	Pence	%

Net Asset Value
ordinary share	527.8	552.6	-4.5

Revenue Return
ordinary share	10.1	6.1	+65.6

Dividends
ordinary dividend	8.0	6.0	+33.3

special dividend	2.0	-	n/a

MANAGEMENT REPORT

Extracts from the Chairman's Statement

My first year as Chairman of your Company has been a remarkable twelve months for financial markets, characterised by great volatility. Against this background the figures as published by the AIC show that your Company outperformed its benchmark index by 3.4%, with a net asset value total return of -4.2% compared to the benchmark's -7.6%. The modest fall in net asset value per share comes after a five-year period in which the Company's total return per share averaged 20% per annum, with no 'down' years.

Revenue and Dividend

Gross revenue for the year amounted to £3,562,000 (2007: £2,495,000) and net revenue on ordinary activities after taxation to £2,356,000 (2007: £1,504,000). This substantial increase in net revenue arose in part from continuing activities, but in part also from special factors that may not be repeated in future years. Your Board will therefore recommend a final dividend for the year of 5.0 pence per share, making 8.0 pence in total, a one- third increase on the previous year. In addition, your Board will also recommend a special dividend of 2.0 pence per share. Over the last six years, regular dividends paid have more than tripled, from 2.5 pence per share in 2002 to the 8.0 pence we are now proposing. It would be rash in the current economic climate to forecast another tripling over the next six years, but the Manager's strategy of identifying companies that can grow their profits at above average rates does augur well for further growth in dividends over the medium term.

Gearing

We have taken a cautious approach to gearing in the past year and have not used our powers to gear the Company. This more cautious approach has been rewarded. However, going forward the Board is conscious of the discretion it has in this matter and will introduce gearing in order to enhance shareholder returns, if we believe that the market outlook and interest rates on borrowings are appropriate.

Discount Management

The discount to net asset value at which the Company's shares trade continues to be monitored closely by the Board. Over the year the discount has tended to widen, in common with that of many other investment trust shares. The Board has powers, granted at the last Annual General Meeting, to buy shares in the open market, and it has exercised these powers on several occasions in the past twelve months. For those who believe that the share price does not reflect their true value, a wider discount provides obvious opportunities. Your Board will continue to buy back shares as and when it sees fit as part of its discount management programme.

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

MANAGEMENT REPORT (continued)

Extracts from the Chairman's Statement (continued)

VAT

We referred in the half year report in March of this year to our claim against HM Revenue & Customs for repayment of Value Added Tax paid on investment management fees, following the successful outcome of the JPMorgan Claverhouse test case and subsequent concession from HMRC. The reclaim covering the period 2000-2007, which has been included in these accounts, is being reviewed by HMRC and is expected to be received by the end of the calendar year. There is a possibility of a further claim in regard to VAT paid in earlier periods, although, no recognition of this has been made as yet in the Company's accounts.

Board

As mentioned in the half year report, Stani Yassukovich retired as Chairman of the Company at the last AGM after sixteen years' service. His contribution over that time was immense and his guidance and wise counsel will be missed. Another loss from the Board was Patrick Stevenson, who sadly died soon after stepping down at the AGM. Joop Feilzer, a European investment professional with extensive experience, and John Cornish, a former partner of Deloitte and expert on investment trust accounting, have joined the Board in their place and are already making a significant contribution. They will be offering themselves for election at the AGM and I urge you to support them.

Outlook

The Board believes that the next twelve months will continue to be characterised by great volatility as one of the worst financial crises in history continues to unfold. Nevertheless, we feel that Tim's cautious but incisive approach in selecting growth companies with strong balance sheets and earning streams is appropriate for the circumstances, and augurs well for future outcomes. In addition the Board believes that the main economies of continental Europe with their high saving rates, sound manufacturing bases, low private household debt and dull housing markets provide a comparatively stable backdrop for companies to weather the storm and pull through both stronger and more efficient. The Board agrees with Tim that we have such companies in our portfolio and that he will continue to identify good candidates.

Finally, as the last twelve months have shown, your mainly Euro and Swiss Franc based investments have suffered less in sterling terms because of the Pound's depreciation against these currencies, and may well do so again over the next year.

Annual General Meeting

The Annual General Meeting will be held at noon on Thursday 13 November 2008 at 4 Broadgate, London EC2M 2DA where the Manager will make an investment presentation and I shall be happy to answer questions. All shareholders are most welcome to attend.

Mark Tapley

Chairman

7 October 2008

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

MANAGEMENT REPORT (continued)

Principal Risks and Uncertainties

The Board has drawn up a matrix of risks facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objective and policy, in order to mitigate these risks as far as practicable. The principal risks which have been identified and the steps taken by the Board to mitigate these are as follows:

• Investment activity and performance

An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may result in underperformance against the Company's benchmark index and the companies in its peer group. The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings.

• Portfolio and Market

Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move rapidly. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on the shareholders' funds. The Board reviews the portfolio each month and mitigates this risk through diversification of investments in the portfolio.

• Regulatory risks

A breach of Section 842 of the Income and Corporation Taxes Act 1988 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Acts 1985 and 2006 could lead to criminal proceedings, or financial or reputational damage. The Manager has contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal control reports produced by the Manager on a quarterly basis, which confirm regulatory compliance.

• Corporate governance and shareholder relations

Details of the Company's compliance with corporate governance best practice, including information on relations with shareholders, are set out in the Corporate Governance Statement in the Annual Report.

• Financial

By its nature as an investment trust, the Company's business activities are exposed to market risk (including currency risk, interest rate risk and other price risk), liquidity risk, and credit and counterparty risk. Details of these risks and how they are managed are contained in the notes in the Annual Report.

• Operational

Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service.

Details of how the Board monitors the services provided by the Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal control section of the Corporate Governance Statement in the Annual Report.

Related Party Transactions

The Company has appointed a subsidiary of Henderson Global Investors (Holdings) plc ('Henderson') to provide investment management, accounting, company secretarial and administration services. In addition Henderson has provided the Company with marketing services. Custody Services are supplied to the Company by JPMorgan Chase. During the year there have been no material transactions with these related parties which have affected the financial position or performance of the Company during the year under review.

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

MANAGEMENT REPORT (Continued)

Statement of Directors' Responsibilities

In accordance with Disclosure and Transparency Rule 4.1.12, the Directors confirm to the best of their knowledge that:

(a) the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

(b) this Annual 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 they face.

Signed on behalf of the Board

J E Cornish

Director

Twenty Largest Holdings

These twenty investments total £74,291,000 representing 64.1% by value of the total investments.

Name of Investment	Country	2008 Valuation £'000
Fresenius	Germany	5,298
Fresenius Medical Care	Germany	4,998
Vivendi Universal	France	4,541
Sodexo	France	4,429
AP Moller - Maersk	Denmark	4,295
Bureau Veritas	France	4,076
Synthes	Switzerland	3,992
Deutsche Post	Germany	3,693
Linde	Germany	3,690
Essilor	France	3,653
Deutsche Börse	Germany	3,545
SGS	Switzerland	3,493
Inditex	Spain	3,391
Siemens	Germany	3,293
ABB	Switzerland	3,230
Roche	Switzerland	3,084
Neopost	France	2,980
ENI	Italy	2,945
Beiersdorf	Germany	2,846
Nestlé	Switzerland	2,819

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

Audited Income Statement

for the year ended 31 July 2008


	Year ended 31 July 2008			Year ended 31 July 2007
	Revenue return	Capital return	Total	Revenue return	Capital return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains from investments held at fair value through profit or loss	-	(6,790)	(6,790)	-	19,751	19,751
Investment income (note 3)	3,303	-	3,303	2,356	-	2,356
Other interest receivable and similar income	259	-	259	139	-	139
	---------	-----------	-----------	---------	---------	---------
Gross revenue and capital (losses)/gains	3,562	(6,790)	(3,228)	2,495	19,751	22,246

Management and performance fee	(179)	(1,026)	(1,205)	(216)	(866)	(1,082)
Write-back of prior years' VAT	163	731	894	-	-	-
Other administrative expenses	(207)	-	(207)	(220)	-	(220)
	---------	-----------	-----------	---------	---------	---------
Net return/(loss) on ordinary activities before finance charges and taxation	3,339	(7,085)	(3,746)	2,059	18,885	20,944

Finance charges	-	(1)	(1)	(2)	(6)	(8)
	---------	-----------	-----------	---------	---------	---------
Net return/(loss) on ordinary activities before taxation	3,339	(7,086)	(3,747)	2,057	18,879	20,936

Taxation on net return on ordinary activities	(983)	516	(467)	(553)	255	(298)
	---------	-----------	-----------	---------	---------	---------
Net return /(loss) on ordinary activities after taxation	2,356	(6,570)	(4,214)	1,504	19,134	20,638
	=====	======	=======	=====	=====	=====


Return/(loss) per ordinary share (note 4)	10.1p	(28.2)p	(18.1)p	6.1p	77.2p	83.3p
	=====	======	======	=====	=====	=====

The total column of this statement represents the Income Statement of the Company. All revenue and capital items derive from continuing operations. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. The Company had no recognised gains or losses other than those disclosed in the Income Statement and Reconciliation of Movements in Shareholders' Funds.

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

Audited Reconciliation of Movements in Shareholders' Funds

for the years ended 31 July 2008 and 31 July 2007

	Share capital	Share premium account	Capital redemption reserve	Other capital reserves	Revenue reserve	Total
Year ended 31 July 2008	£'000	£'000	£'000	£'000	£'000	£'000
At 31 July 2007	1,283	33,814	-	91,928	1,737	128,762
Net (loss)/return from ordinary activities after taxation	-	-	-	(6,570)	2,356	(4,214)
Repurchase of ordinary shares	-	-	-	(1,182)	-	(1,182)
Cancellation of ordinary shares held in Treasury	(130)	-	130	-	-	-
Final dividend paid in respect of the year ended 31 July 2007 (paid 9 November 2007)	-	-	-	-	(932)	(932)
Interim dividend paid in respect of the year ended 31 July 2008 (paid 2 April 2008)	-	-	-	-	(697)	(697)
	---------	---------	---------	---------	---------	---------
At 31 July 2008	1,153	33,814	130	84,176	2,464	121,737
	=====	=====	=====	=====	=====	=====

	Share capital	Share premium account	Capital redemption reserve	Other capital reserves	Revenue reserve	Total
Year ended 31 July 2007	£'000	£'000	£'000	£'000	£'000	£'000
At 31 July 2006	1,283	33,814	-	84,944	1,597	121,638
Net return from ordinary activities after taxation	-	-	-	19,134	1,504	20,638
Final dividend paid in respect of year ended 31 July 2006 (paid 10 November 2006)	-	-	-	-	(898)	(898)
Interim dividend paid in respect of year ended 31 July 2007 (paid on 12 April 2007)	-	-	-	-	(466)	(466)
Repurchase of ordinary shares held in Treasury	-	-	-	(12,150)	-	(12,150)
	--------	--------	----------	----------	--------	----------
At 31 July 2007	1,283	33,814	-	91,928	1,737	128,762
	=====	=====	======	======	=====	======

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

Audited Balance Sheet

at 31 July 2008

	2008 £'000	2007 £'000
Fixed asset investments held at fair value through profit or loss
Listed at market value - overseas	115,961	122,865
	----------	----------

Current assets
Debtors	1,173	2,414
Cash at bank and short term deposit	5,360	5,625
	----------	----------
	6,533	8,039
	----------	----------
Creditors: amounts falling due within one year	(757)	(2,142)
	----------	----------
Net current assets	5,776	5,897
	----------	----------

Total net assets	121,737	128,762
	======	======

Capital and reserves
Called up share capital (note 7)	1,153	1,283
Share premium account	33,814	33,814
Capital redemption reserve	130	-
Capital reserves	84,176	91,928
Revenue reserve	2,464	1,737
	----------	----------
Equity shareholders' funds	121,737	128,762
	======	======

Net asset value per ordinary share (note 6)	527.8p	552.6p
	======	======

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

Audited Cash Flow Statement

for the year ended 31 July 2008

	Year ended 31 July 2008		Year ended 31 July 2007
	£'000	£'000	£'000	£'000

Net cash inflow/(outflow) from operating activities		2,167		(11)

Servicing of finance
Interest paid	(1)		(8)
	---------		---------
Net cash outflow from servicing of finance		(1)		(8)

Taxation
Overseas tax recovered	25		155
	----------		----------
Net tax recovered		25		155

Financial investment
Purchases of investments	(90,245)		(58,710)
Sales of investments	90,094		74,750
	--------		---------
Net cash (outflow)/inflow from financial investment		(151)		16,040

Equity dividends paid		(1,629)		(1,364)
		---------		---------
Net cash inflow before financing		411		14,812

Financing
Repurchase of own shares	(1,182)		(12,150)
	---------		----------
Net outflow from financing		(1,182)		(12,150)
		---------		---------
(Decrease)/increase in cash		(771)		2,662
		---------		--------
Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash as above		(771)		2,662
Exchange movements		506		(162)
		--------		--------
Change in net (debt)/funds resulting from cash flows		(265)		2,500

Net funds at 1 August		5,625		3,125
		--------		---------
Net funds at 31 July		5,360		5,625
		--------		--------

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

Notes:

1.	Accounting Policies
	Basis of accounting
	The financial statements have been prepared on a going concern basis and under the historical cost basis of accounting, modified to include the revaluation of investments at fair value. The financial statements have been prepared in accordance with applicable accounting standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' dated December 2005 'The Revised SORP'. All of the Company's operations are of a continuing nature.

2.	(Losses)/gains from investments held at fair value through profit or loss
			2008	2007
			£'000	£'000
	Realised gains based on historical cost		9,517	18,665
	Amounts recognised as unrealised in previous years		(14,181)	(13,677)
			---------	---------

	Realised (losses)/gains based on carrying value at previous balance sheet date		(4,664)	4,988
	Net movement in unrealised appreciation		(2,632)	14,925
	Net gains/(losses) on foreign exchange		506	(162)
			---------	---------
			(6,790)	19,751
			---------	---------


3.	Investment income
		2008		2007
		£'000		£'000
	Unfranked - listed investments
	Dividend income	3,303		2,356
		-------		-------

4.	Return per ordinary share
	The total return per ordinary share is based on the net loss attributable to the ordinary shares of £4,214,000 (2007: £20,638,000 return) and on 23,242,213 ordinary shares (2007: 24,768,609) being the weighted average number of shares in issue during the year.

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008

4.	Return per ordinary share (continued)
	The total return per ordinary share can be further analysed as follows:

		2008 £'000	2007 £'000
	Revenue return	2,356	1,504
	Capital (loss)/return	(6,570)	19,134
		---------	---------
	Total (loss)/return	(4,214)	20,638
		---------	---------
	Weighted average number of ordinary shares	23,242,213	24,768,609

	Revenue return per ordinary share	10.1p	6.1p
	Capital (loss)/return per ordinary share	(28.2)p	77.2p
		-----------	---------
	Total per ordinary share	(18.1)p	83.3p
		======	=====
	The Company does not have any dilutive securities.

5.	Dividend
	Subject to shareholder approval at the Annual General Meeting on 13 November 2008, the proposed final dividend of 5.0p per ordinary share and a special dividend of 2.0p per ordinary share will be paid on 18 November 2008 to shareholders on the register of members at the close of business on 24 October 2008. The shares will be quoted ex-dividend on 22 October 2008.

				2008
				£'000
	Revenue available for distribution by way of dividend for the year			2,356
	Interim dividend of 3.0p paid 2 May 2008			(697)
	Proposed final dividend for the year ended 31 July 2008 - 7.00p
	(final dividend of 5.0p and special dividend of 2.0p)
	(based on 23,066,063 shares in issue at 7 October 2008)			(1,614)
				----------
	Undistributed revenue for section 842 purposes*			45
				=====
	*Undistributed revenue comprises 1.4% of the income from investments of £3,303,000.

6.	Net asset value per ordinary share
	The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £121,737,000 (2007: £128,762,000) and on 23,066,063 (2007: 23,303,063) ordinary shares in issue at the year end. There were no shares held in Treasury at the year end (2007: 2,363,942).

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2008


7.	Called up share capital
		Number of shares held in treasury	Number of shares entitled to dividend	Total number of shares in issue	Nominal value of shares in issue £'000
	Ordinary shares of 5p each
	Authorised	-	-	75,000,000	3,750
		--------	--------	--------	--------
	Balance brought forward	2,363,942	23,303,063	25,667,005	1,283
	Repurchase of ordinary shares held in Treasury	237,000	(237,000)	-	-
	Cancellation of ordinary shares held in Treasury	(2,600,942)	-	(2,600,942)	(130)
		----------	------------	------------	----------
	Balance carried forward	-	23,066,063	23,066,063	1,153
		----------	------------	------------	----------

	During the year 237,000 ordinary shares were repurchased at a total cost of £1,182,000 and subsequently cancelled. A further 2,363,942 shares held in Treasury were also cancelled during the year. Since the year end there have been no further shares repurchased.
8.	2008 Financial information
	The figures and financial information for the year ended 31 July 2008 are compiled from an extract of the latest accounts and do not constitute statutory accounts. These accounts included the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. These accounts have not yet been delivered to the Registrar of Companies.
9.	2007 Financial information
	The figures and financial information for the year ended 31 July 2007 are compiled from an extract of the latest published accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985.

10.	Annual Report
	The Annual Report and Accounts will be posted to shareholders on 10 October 2008 and copies will be available on the Company's website (www.hendersoneurotrust.com) or in hard copy format from the Company's Registered Office, 4 Broadgate, London EC2M 2DA.