Final Results

RNS Number : 6098T

Henderson Eurotrust PLC

30 September 2010

This announcement contains regulated information.

HENDERSON EUROTRUST PLC

Annual Report and Financial Statements for the year ended 31 July 2010

	31 July 2010	31 July 2009	Change
	pence	pence	%

Net Asset Value
ordinary share	549.0	487.8	12.5

Total Return
ordinary share	74.0	(30.3)	-

Revenue Return
ordinary share	12.1	12.4	-2.4

Dividends	11.0	11.0*	-
ordinary share (*included 2.0p special)

MANAGEMENT REPORT

Extracts from the Chairman's Statement

I am pleased to report good results for the year ended July 2010 with the Company's net asset value total return up 15.5%, an outperformance over the index of 3.6% net of management fees and other expenses. The table below illustrates in summary that the added value came principally from the stock selection skills of our Portfolio Manager, Tim Stevenson, and his team, with additional contributions from country and currency allocations. As equity investors we are of course more interested in longer term outcomes. If we look back over the last seven years, the average annual total return has been 12.1% and relative performance against the index has been +2.7% per annum; thus this year's results are very much in line with the longer term average.

Over that longer period, the net asset value per share has risen by 105%, yet the net assets of the Company have risen by much less, namely by 67%. The discrepancy between these two growth rates arises from your Board's policy of periodically buying back shares as a discount control mechanism. In the last financial year we repurchased 2,091,138 shares in the Company, at a cost of £10,743,000. Your Board is aware that many private client investment managers prefer to invest in companies with market capitalisations above £100 million - close to where we are today. We need therefore to steer a narrow course between our two goals of maintaining good liquidity in the Company's shares while at the same time not permitting the discount to net assets to drift higher, and we will continue to be proactive in buying back shares when we see fit. At the same time, while we have no current formal plans for a continuation vote or similar for the Company, the Board will continue to look to adopt the most reasonable best practice as regards discount control.

This task would probably be considerably easier if investors saw the region in which we invest - continental Europe - as one of their priorities. But many investors do not see Europe as a preferred investment region; indeed investors have often shunned it, considering the local growth prospects to be poor. This view seems overly simplistic; Europe is far from monolithic. The northern European countries, in particular Germany and Switzerland, are doing very well indeed economically, whilst the so-called 'Club Med countries' are the laggards. Many of the companies in which we invest have products that dominate their particular niche throughout the world.

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HENDERSON EUROTRUST PLC

Annual Report and Financial Statements for the year ended 31 July 2010

MANAGEMENT REPORT

Extracts from the Chairman's Statement continued

They are based in stable democracies, whose economies have not depended on ever-increasing financial leverage to achieve their headline growth rates. We set our Manager the task of identifying companies with strong fundamentals, priced at reasonable valuation levels and this has proved to be the basis of a successful long term strategy.

	%
FTSE World Europe (ex UK) Total Return Index	11.9

Country Allocation	1.4
Stock Selection	2.4
Currency movements (relative to index)	0.4
Cash/gearing	0.1

Management fees and other costs	-1.3
Effect of share buybacks	0.6

AIC Net Asset Value Total Return	15.5

Change in Discount to NAV	-2.0

Share price total return	13.5

Revenue and Dividend

The Company's gross revenue for the year was £3,496,000, down from £4,186,000 a year earlier and net revenue on ordinary activities after taxation declined from £2,858,000 to £2,616,000. The prior year's receipts included repayments of VAT and interest thereon. Investment income held up well however, and your Board recommends a final dividend of 7.0 pence, which with the interim of 4.0 pence paid in late April, makes a total ordinary dividend of 11.0 pence per share for the year. This matches the total dividend paid in 2009, which included a 2.0 pence special dividend as a result of the non-recurring VAT refunds. Looking again at the longer term, our dividend has more than quadrupled in the last eight years.

Gearing

As I mentioned in my half year report, we introduced some modest gearing to the portfolio earlier this year, but generally, over the last three years we have made relatively little use of gearing. Your Board is aware of the opportunity to gear and addresses the subject at each Board meeting.

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HENDERSON EUROTRUST PLC

Annual Report and Financial Statements for the year ended 31 July 2010

MANAGEMENT REPORT

Extracts from the Chairman's Statement continued

Board Change

Tim Stevenson, our Portfolio Manager, has been a director of the Company since 1992 but has decided that he will not seek re-election to the Board at this year's AGM. Tim will continue in his role as our highly committed and enthusiastic Portfolio Manager, will remain a keen personal shareholder, and will attend the Company's AGMs and make presentations to shareholders. The Board looks forward to continuing to work with Tim, but I should like nevertheless to thank him for his services as a Director over the last 18 years.

Outlook

The global economies are still stumbling out of the recession induced by the credit crunch and there are fears of the so-called double dip. Within our region, large economies such as Italy and Spain have a serious overhang of private and/or government debt, while smaller countries such as Ireland, Portugal and Greece have even more serious issues of structural deficits. The large bond yield spreads are a consequence of this. However, Tim has shunned these countries largely in his investment decisions and has focussed on northern Europe and Switzerland. The Euro has weakened against the pound sterling during the financial year but there is some prospect of the Euro strengthening again.

All in all the outlook is still confused, as fiscal tightening on the one side and monetary easing on the other are more or less balancing each other out at present. Away from the macro-economic turmoil there are good results coming out of a fair number of companies. Our Manager's stock selection has worked well for the fund in the past and the Board believes that this is not going to change in the coming period, even if the economic clouds have not quite disappeared yet.

Annual General Meeting

The meeting will be held on Thursday 18 November 2010 at 2.30 pm at 201, Bishopsgate, London EC2M 3AE, and will be followed by afternoon tea. Full details of the business of the meeting are set out in the Notice of the Meeting which will be sent to shareholders with the Annual Report. Tim Stevenson will make an investment presentation and the Board will be pleased to answer any questions. All shareholders are most welcome to attend.

Mark Tapley

Chairman

30 September 2010

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HENDERSON EUROTRUST PLC

Annual Report and Financial Statements for the year ended 31 July 2010

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 shareholders' funds. The Board reviews the portfolio each month and mitigates this risk through diversification of investments in the portfolio.

• Regulatory

A breach of section 1158 of the Corporation Tax Act 2010 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 Act 2006 could lead to criminal proceedings, or financial or reputational damage. The Manager provides investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal control reports produced by the Manager on a quarterly basis.

• Financial

By its nature as an investment trust, the Company's business activities are exposed to market risk (including market price risk, currency risk and interest rate 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 the Company's compliance with corporate best practice, including information on relations with shareholders, and 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.

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HENDERSON EUROTRUST PLC

Annual Report and Financial Statements for the year ended 31 July 2010

MANAGEMENT REPORT Continued

Related Party transactions

The provision of investment management, accounting, company secretarial and administration services has been outsourced to Henderson Global Investors Limited ("Henderson" or the "Manager"). This is the only related party arrangement currently in place. Other than fees payable by the Company in the ordinary course of business, there have been no material transactions with the related party which have affected the financial position or performance of the Company during the year under review.

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

(b) the Directors' Report in the 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 it faces.

Signed for and on behalf of the Board

Mark Tapley

Director

30 September 2010

Twenty Largest Holdings

These twenty investments total £61,917,000 representing 54.9% by value of the total investments.

Name of Investment	Country	Sub- sector	2010 Valuation £'000
Fresenius	Germany	Healthcare	4,769
Deutsche Post	Germany	Air Freight & Logistics	4,382
Adecco	Switzerland	Professional Services	4,019
Essilor	France	Opthalmology	3,832
Sodexo	France	Catering Services	3,612
Swedish Match	Sweden	Tobacco Products	3,420
ABB	Switzerland	Electrical Equipment	3,382
Deutsche Börse	Germany	Financial Services	3,342
SAP	Germany	Computer Software	2,974
Nestlé	Switzerland	Food Producer & Processor	2,966
Roche	Switzerland	Pharmaceuticals & Biotechnology	2,939
SES Global	France	Media	2,601
Siemens	Germany	Electrical Products	2,597
Total	France	Oil & Gas Producers	2,576
Inditex	Spain	General Retailers	2,544
France Telecom	France	Telecommunications	2,481
Carrefour	France	Supermarkets	2,475
Syngenta	Switzerland	Agricultural Chemicals	2,362
Kühne + Nagel	Switzerland	Logistics	2,359
Zurich Financial Services	Switzerland	Financial Services	2,285

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6

HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2010

Audited Income Statement

for the year ended 31 July 2010


	Year ended 31 July 2010			Year ended 31 July 2009
	Revenue return	Capital return	Total	Revenue return	Capital return	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) from investments held at fair value through profit or loss (note 2)	-	14,645	14,645	-	(8,789)	(8,789)
Investment income (note 3)	3,496	-	3,496	3,783	-	3,783
Other interest receivable and similar income (including interest on VAT refund)	-	-	-	403	-	403
	---------	----------	---------	---------	----------	---------
Gross revenue and capital gains/(losses)	3,496	14,645	18,141	4,186	(8,789)	(4,603)

Management and performance fees	(169)	(1,247)	(1,416)	(151)	(1,530)	(1,681)
Write-back of prior years' VAT	-	-	-	129	110	239
Other administrative expenses	(288)	-	(288)	(201)	-	(201)
	---------	----------	----------	---------	----------	----------
Net return/(loss) on ordinary activities before finance charges and taxation	3,039	13,398	16,437	3,963	(10,209)	(6,246)

Finance charges	(9)	(34)	(43)	-	-	-
	---------	----------	----------	---------	----------	----------
Net return/(loss) on ordinary activities before taxation	3,030	13,364	16,394	3,963	(10,209)	(6,246)

Taxation on net return on ordinary activities	(414)	-	(414)	(1,105)	376	(729)
	---------	---------	---------	---------	---------	---------
Net return /(loss) on ordinary activities after taxation	2,616	13,364	15,980	2,858	(9,833)	(6,975)
	=====	=====	=====	=====	=====	=====

Return/(loss) per ordinary share (note 4)	12.1p	61.9p	74.0p	12.4p	(42.7)p	(30.3)p
	=====	=====	=====	=====	=====	=====

The total column of this statement represents the Income Statement of the Company. All revenue and capital items in the above statement 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.

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2010

Audited Reconciliation of Movements in Shareholders' Funds

for the years ended 31 July 2010 and 31 July 2009

	Called up share capital	Share premium account	Capital redemption reserve	Capital reserves	Revenue reserve	Total
Year ended 31 July 2010	£'000	£'000	£'000	£'000	£'000	£'000

At 31 July 2009	1,148	33,814	135	73,934	3,016	112,047
Net return from ordinary activities after taxation	-	-	-	13,364	2,616	15,980
Repurchase of ordinary shares	(104)	-	104	(10,743)	-	(10,743)
Final dividend paid in respect of the year ended 31 July 2009 (paid 17 November 2009)	-	-	-	-	(1,376)	(1,376)
Special dividend paid in respect of the year ended 31 July 2009 (paid 17 November 2009)	-	-	-	-	(458)	(458)
Interim dividend paid in respect of the year ended 31 July 2010 (paid 30 April 2010)	-	-	-	-	(840)	(840)
	---------	----------	---------	---------	---------	--------
At 31 July 2010	1,044	33,814	239	76,555	2,958	114,610
	=====	=====	=====	=====	=====	=====

	Called up share capital	Share premium account	Capital redemption reserve	Capital reserves	Revenue reserve	Total
Year ended 31 July 2009	£'000	£'000	£'000	£'000	£'000	£'000

At 31 July 2008	1,153	33,814	130	84,176	2,464	121,737
Net (loss)/return from ordinary activities after taxation	-	-	-	(9,833)	2,858	(6,975)
Repurchase of ordinary shares	(5)	-	5	(409)	-	(409)
Final dividend paid in respect of the year ended 31 July 2008 (paid 18 November 2008)	-	-	-	-	(1,153)	(1,153)
Special dividend paid in respect of the year ended 31 July 2008 (paid 18 November 2008).	-	-	-	-	(462)	(462)
Interim dividend paid in respect of the year ended 31 July 2009 (paid 1 May 2009)	-	-	-	-	(691)	(691)
	---------	----------	---------	---------	---------	--------
At 31 July 2009	1,148	33,814	135	73,934	3,016	112,047
	=====	======	=====	=====	=====	=====

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2010

Audited Balance Sheet

at 31 July 2010

	2010 £'000	2009 £'000
Fixed asset investments held at fair value through profit or loss
Listed at market value - overseas	112,859	110,571
	----------	----------

Current assets
Debtors	492	556
Cash at bank	3,808	2,570
	---------	---------
	4,300	3,126

Creditors: amounts falling due within one year	(2,549)	(1,650)
	----------	----------
Net current assets	1,751	1,476
	----------	----------

Total net assets	114,610	112,047
	======	======

Capital and reserves
Called up share capital (note 7)	1,044	1,148
Share premium account	33,814	33,814
Capital redemption reserve	239	135
Capital reserves	76,555	73,934
Revenue reserve	2,958	3,016
	--------	--------
Shareholders' funds	114,610	112,047
	======	======

Net asset value per ordinary share (note 6)	549.0p	487.8p
	=====	=====

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2010

Audited Cash Flow Statement

for the year ended 31 July 2010

	2010		2009
	£'000	£'000	£'000	£'000

Net cash inflow from operating activities		1,124		3,079

Servicing of finance
Interest paid	(41)		-
	--------		-------
Net cash outflow from servicing of finance		(41)		-

Taxation
UK Corporation Tax paid	(278)		(75)
Overseas tax recovered	176		39
	--------		---------
Net tax paid		(102)		(36)

Financial investment
Purchases of investments	(96,729)		(83,046)
Sales of investments	108,903		79,462
	---------		----------
Net cash inflow/(outflow) from financial investment		12,174		(3,584)

Equity dividends paid		(2,674)		(2,306)
		---------		---------
Net cash inflow/(outflow) before financing		10,481		(2,847)

Financing
Repurchase of own shares	(10,743)		(409)
Drawdown of loans	1,346		-
			---------
Net cash outflow from financing		(9,397)		(409)
		--------		---------
Increase/(decrease) in cash		1,084		(3,256)
		====		=====
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash as above		1,084		(3,256)
Exchange movements		169		466
Cash inflow from increase in loans		(1,346)		-
		--------		--------
Change in net funds resulting from cash flows		(93)		(2,790)

Net funds at 1 August		2,570		5,360
		--------		--------
Net funds at 31 July		2,477		2,570
		=====		=====

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2010

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 ('SORP') for investment trusts issued by the Association of Investment Companies ('the AIC') in January 2009. All of the Company's operations are of a continuing nature.

2.	Gains/(losses) from investments held at fair value through profit or loss
		2010	2009
		£'000	£'000
	Gains/(losses) on the sale of investments based on historical cost	8,903	(5,055)
	Less: revaluation gains recognised in previous years	(4,587)	(6,210)
		----------	----------

	Gains/(losses) on investments sold in the year based on carrying value at the previous balance sheet date	4,316	(11,265)
	Revaluation of investments held at 31 July	10,160	2,010
	Exchange gains	169	466
		----------	----------
		14,645	(8,789)
		----------	---------

3.	Investment income
		2010	2009
		£'000	£'000
	Overseas dividend income	3,496	3,783
		-------	-------

4.	Return per ordinary share
	The total return per ordinary share is based on the net return attributable to the ordinary shares of £15,980,000 (2009: loss of £6,975,000) and on 21,606,893 ordinary shares (2009: 23,048,948) being the weighted average number of shares in issue during the year.

	The total return per ordinary share can be further analysed as follows:

		2010 £'000	2009 £'000
	Revenue return	2,616	2,858
	Capital return/(loss)	13,364	(9,833)
		----------	----------
	Total return/(loss)	15,980	(6,975)
		----------	----------
	Weighted average number of ordinary shares	21,606,893	23,048,948

	Revenue return per ordinary share	12.1p	12.4p
	Capital return/(loss) per ordinary share	61.9p	(42.7)p
		---------	---------
	Total return/(loss) per ordinary share	74.0p	(30.3)p
		=====	=====
	The Company does not have any dilutive securities.

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HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2010

5.	Dividend
	Subject to shareholder approval at the Annual General Meeting on 18 November 2010, the proposed final dividend of 7.0p per ordinary share will be paid on 22 November 2010 to shareholders on the register of members at the close of business on 15 October 2010. The shares will be quoted ex-dividend on 13 October 2010.
				2010
				£'000
	Revenue available for distribution by way of dividend for the year			2,616
	Interim dividend of 4.0p paid 30 April 2010			(840)
	Proposed final dividend for the year ended 31 July 2010 of 7.0p
	(based on 20,866,925 ordinary shares in issue at 30 September 2010)			(1,461)
				--------
	Undistributed revenue for section 1158 purposes*			315
				====
	*Undistributed revenue comprises 9.0% of the income from investments of £3,496,000 (see note 3).

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 £114,610,000 (2009: £112,047,000) and on 20,876,925 (2009: 22,968,063) ordinary shares in issue at the year end. There were no shares held in Treasury at the year end (2009: nil).

7.	Called up share capital
		Number of shares entitled to dividend	Total number of shares	Nominal value of shares in issue £'000
	Ordinary shares of 5p each
	Authorised	-	75,000,000	3,750
		-------------	-------------	-------

	Issued - balance brought forward	22,968,063	22,968,063	1,148
	Repurchase and cancellation of ordinary shares	(2,091,138)	(2,091,138)	(104)
		--------------	--------------	-------
	Balance carried forward	20,876,925	20,876,925	1,044
		========	========	====

	During the year 2,091,138 (2009: 98,000) ordinary shares were repurchased at a total cost of £10,743,000 (2009: £409,000) and subsequently cancelled. Since the year end a further 10,000 shares have been repurchased.

8.	Going Concern Statement
	The Directors believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the Company consist mainly of securities which are readily realisable and, accordingly, the Company has adequate financial resources to continue in operational existence for the foreseeable future. In reviewing the position as at the date of this statement, the Board has considered the guidance issued by the Financial Reporting Council in October 2009.

9.	2010 Financial information
	The figures and financial information for the year ended 31 July 2010 are extracted from the Company's annual financial statements for that period and do not constitute statutory financial statements. The Company's annual financial statements for the year ended 31 July 2010 have been audited but have not yet been delivered to the Registrar of Companies. The Auditors' report on the 2010 financial statements was unqualified, did not include a reference to any matter which the Auditors drew attention without qualifying the report, and did not contain any statements under sections 498(2) and 498(3) of the Companies Act 2006.

HENDERSON EUROTRUST PLC

Annual Financial Report for the year ended 31 July 2010


10.	2009 Financial information
	The figures and financial information for the year ended 31 July 2009 are compiled from an extract of the published financial statements for that year and do not constitute statutory financial statements for that year. The Company's annual financial statements 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 498(2) and 498(3) of the Companies Act 2006.

11	Annual Report and Financial Statements and Annual General Meeting
	The Report and Financial Statements will be posted to shareholders on 15 October 2010 and copies will be available on the Company's website (www.hendersoneurotrust.com) or in hard copy format from the Company's Registered Office, 201 Bishopsgate, London EC2M 3AE. The Annual General Meeting will be held at the registered office on Thursday 18 November 2010 at 2.30 pm. The Notice of the Annual General Meeting will be posted to shareholders with the Annual Report