Half-year Report

Henderson Eurotrust PLC

21 March 2024

 

JANUS HENDERSON FUND MANAGEMENT UK LIMITED

HENDERSON EUROTRUST PLC

LEGAL ENTITY IDENTIFIER:  213800DAFFNXRBWOEF12

21 March 2024

HENDERSON EUROTRUST PLC

Unaudited results for the half year ended 31 January 2024

This announcement contains regulated information.

Performance

During the period, the Company outperformed the benchmark³ by 0.3%, having delivered NAV² per share total return of 4.5% compared to a total return from the benchmark³ of 4.2%.

	(Unaudited) Half year ended 31 January 2024	(Unaudited) Half year ended 31 January 2023	(Audited) Year ended 31 July 2023
NAV per share	165.2p	156.3p	161.3p
Share price	142.3p	133.8p	139.5p
Net assets	£350.0m	£331.1m	£342.0m
Revenue return per share	0.2p	0.3p	3.2p
Discount1	13.9%	14.4%	13.5%

Total return performance to 31 January 2024

	6 months	1 year	3 years	5 years
	%	%	%	%
NAV2	4.5	8.4	15.8	67.0
Benchmark3	4.2	8.8	29.5	60.8
Share price4	4.3	9.7	10.4	61.6
Peer group NAV5	4.2	9.6	23.7	65.6

1.   Calculated using the mid-market closing price

2.   Net Asset Value ("NAV") per ordinary share total return (including dividends reinvested)

3.   FTSE World Europe (ex UK) Index in Sterling

4.   Share price total return (including dividends reinvested)

5.   Association of Investment Companies ("AIC") Europe sector (based on cumulative fair net asset value returns)

Sources: Morningstar Direct, Janus Henderson, LSEG Datastream

Interim Management Report

Chairman's Statement

Shareholders will have seen the announcement on 14 March 2024 of the proposed merger of interests between the Company and Henderson European Focus Trust plc ("HEFT") to form Henderson European Trust plc, an enlarged flagship European investment trust to be managed by Janus Henderson Investors. The proposed merger will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986, and the associated transfer of the Company's assets to HEFT in exchange for the issue of new shares by HEFT under the recommended scheme of reconstruction (the "Proposals"). As set out in the announcement, the portfolio for the continuing company will be managed jointly by our portfolio manager, Jamie Ross, and his counterpart at HEFT, Tom O'Hara, supported by Janus Henderson Investors' nine other European equities specialists.  If approved by shareholders in general meetings currently expected to be held in June and July 2024, the intention is that the larger combined company will bring together the portfolio managers' respective expertise and proven track records of benchmark outperformance under a single mandate, i.e. to maximise total return by investing in companies predominately listed in Europe (excluding the UK).

The Company and HEFT have over 50% of common holdings by value and the majority of Henderson European Trust plc's portfolio is expected to comprise assets currently held by at least one of the companies.

The combined company is anticipated to have net assets of circa £750 million (based on valuations as at 29 February 2024) and will benefit from a lower management fee and reduced ongoing charge ratio which is expected to be less than 0.70%, compared to the Company's current ongoing charge ratio of 0.79%. 

Performance

In the period from our year end on 31 July 2023 to 31 January 2024, the Company outperformed its benchmark, the FTSE World Europe (ex UK) Index, by 0.3%, having delivered a NAV total return of 4.5% compared to the Company's benchmark and to the peer group, the AIC Europe sector, which both returned 4.2%. The share price had increased by 4.3%; the discount to NAV increased to 13.9% from 13.5%.

Over the twelve months to 31 January 2024, the NAV total return was 8.4% and the share price total return was 9.7%. The NAV was slightly behind the benchmark index total return of 8.8% and also behind the peer group average NAV of 9.6%; however, the share price total return of 9.7% was ahead of both the benchmark and peer group.

The share price ended the period close to the high for both the year and the half year to 31 January 2024, despite major geo-political events including the continuing war in Ukraine and the conflict in the Middle East. EU inflation fell to 2.8% in January 2024 compared with 10.0% a year earlier.  Although there are still concerns over inflation it seems likely that 2024 will see cuts in interest rates. This has been a broadly supportive background for companies and stock markets.  Nonetheless, there have been some quite big swings in sentiment: for example in the latter part of 2023, cyclical stocks gathered momentum in anticipation of interest rate cuts in 2024.  Despite the macro-economic background, appropriately for a stock-driven "bottom-up" portfolio such as that of the Company, stock selection - as opposed to sector allocation - has been responsible for the majority of the relative return over the interim period. The Fund Manager's report contains more detailed information on performance, together with market commentary.

Gearing

The portfolio has been geared throughout the interim period, up to 5.1%, but at 31 January 2024 the portfolio had net gearing of 1.4%.  The decision to use gearing is taken by the Fund Manager and is driven by his views on the individual holdings rather than a judgement on the short-term direction of the market. Gearing contributed marginally to the total return in the interim period.

Dividend

In line with the policy set out in our Annual Report for 2023, the Board intended not to pay any interim dividend but only to pay a final dividend.  If, however, the Proposals are approved, a pre-liquidation dividend will be paid prior to the Proposals becoming effective. Details of this are expected to be announced in May 2024.

Outlook

Despite the Company's strong long-term performance, of 158.8% over ten years (NAV total return as at 31 January 2024), we have been frustrated by the Company's shares trading at a persistent discount versus their Net Asset Value.

Your Board has considered the factors affecting the discount and has concluded that investment performance alone cannot address this issue. We are therefore pleased to recommend the proposed merger with HEFT, which brings together two investment trusts with excellent long-term performance and highly regarded portfolio managers. We strongly believe this combination will create a single company which stands to be much more than the sum of its parts: enhanced scale resulting in reduced ongoing charges and improved market liquidity; recognised investment prowess backed by deep resources within the European team at Janus Henderson; structured at no cost of combination to ongoing shareholders.

In my last report to shareholders, I stated my intention to retire from the Board by the 2024 AGM in November.  Following the announcement, I intend to remain as Chairman until either the conclusion of the Proposals (likely July 2024) or the AGM in November 2024.  This is an exciting new chapter for our Company and I would like to thank shareholders for their support on this journey.

Nicola Ralston

Chairman

20 March 2024

Fund Manager's Report

On 14 March 2024, the Board announced a proposed merger with HEFT. I see this as being in the best interests of shareholders and I am very excited at the prospect of combining with Tom O'Hara to co-manage Henderson European Trust plc.

This has been a positive period for performance on both an absolute and relative basis. The FTSE World Europe (ex-UK) Index rose 4.2% in total return terms whilst our NAV increased by 4.5%. There was a significant shift in the macro-economic environment in the final months of 2023. At the start of the period, interest rates were rising whilst economic sentiment was weakening. By the end of 2023, investors were anticipating rate cuts and the global economy appeared to be heading for a 'soft landing'. These shifts in sentiment have contributed to the positive performance from equity markets.

Our moderate outperformance was driven by stock specific factors. The most significant driver of performance was our exposure to obesity, through our positions in Novo Nordisk and Zealand Pharma, both Danish businesses. Since the early part of the 20th century, Novo Nordisk, alongside the US company Eli Lilly, has been at the forefront of drug development for diabetes and, more recently, for obesity. Over the last hundred years, these two companies have commercialised insulin production, have developed novel treatments including a drug class known as GLP-1 and, as a result, have saved innumerable lives. We are now in the foothills of another wave of drug adoption that will transform millions of lives across the world. Once again, Novo Nordisk and Eli Lilly are leading the way. Obesity is one of the greatest health issues in developed countries. Societal factors, including ageing populations, more sedentary lifestyles and the widespread consumption of ultra-processed-food have all had their role to play. Novo Nordisk, through the commercialisation of their weight-loss drug Wegovy, offers a way of reducing the prevalence and impact of obesity. We first invested in Novo Nordisk in 2017 and although it has performed well since, it has only really been in recent months that the market has truly started to appreciate the company's long-term potential. We maintain a large position.

In addition to our position in Novo Nordisk, we initiated a position in Zealand Pharma at the start of the period. Zealand Pharma is approaching the same problem through a slightly different drug-pathway and its drug development is at a much earlier stage than Novo Nordisk's. Nonetheless, we can see Zealand Pharma having a role to play in the obesity market in the future. If excitement around the drug class continues to build, there is a chance that Zealand Pharma may not be able to remain independent for long.

Beiersdorf has been another successful investment. This German company, which owns the skincare brand Nivea, has long been seen as inferior to its French peer L'Oréal. Nivea hasn't attracted the same levels of demand growth as the key L'Oréal brands, Beiersdorf has been slow to fully adopt the ecommerce channel, and has not engaged with the all-important Chinese middle-classes. In addition, family ownership has long attracted accusations of the poor treatment of minority shareholders. However, when we invested in Beiersdorf a few years ago, we considered that we were on the cusp of change. A new CEO (ex-P&G and L'Oréal) came in with a clear message; he has reinvested behind the core Nivea brand, increasing investment behind ecommerce and seems to have had some success in persuading the family that M&A can be done in a measured way, with room for additional dividends and buybacks for shareholders. Over the past six months, the Nivea brand performed well and Beiersdorf has outperformed L'Oréal whilst also delivering strong absolute share price performance.

Finally, our position in UniCredit, the Italian bank, has performed well. As with Beiersdorf, UniCredit has been a story of change. I have owned UniCredit for the entire five-year period that I have managed the Company's portfolio and it has outperformed the market by a very significant margin. UniCredit is a transformed business compared to ten years ago. It lends in a more conservative way, its balance sheet is far less leveraged, it has too much rather than too little capital and it is managed for profit rather than for pure lending-volume growth.  Results continue to be strong.    

The largest detractors from performance have included Pernod Ricard, SIG and Grifols.

Pernod Ricard has underperformed for much of the past six months.  The North American market is slowing down and undergoing some wholesaler destocking after an exceptionally strong period of growth under Covid conditions, whilst the key Chinese market is not experiencing the strong recovery that was expected on the lifting of Covid restrictions. We are willing to look through these issues and focus on the longer-term picture. China and India are two huge markets that remain extremely underpenetrated by Western-style spirits. The opportunity presented by those and other markets will mean that Pernod should be able to see strong revenue growth over the medium to long term. We also see a significant margin opportunity as the company pays more attention to cost efficiency.

We have owned SIG, the Swiss aseptic-packaging company, since IPO in 2018 and it has been a good investment. However, in recent months, investors have become concerned that growth in their food and beverage end markets is slowing at a time when SIG has increased leverage following an acquisition. We share these concerns, to an extent, but take a more sanguine view on long-term prospects than on short-term oscillations in demand. We expect steady market growth in the long term and we see an opportunity for SIG to gain share over time.

Grifols, the Spanish blood-plasma company, has detracted value and we have sold the position during the half year. The business struggled with plasma collections during Covid; this hit their earnings and their ability to pay down debt, resulting in heightened leverage just at the time when interest rates have been rising. In January 2024 a well-known short seller, Gotham City, released a report detailing several accounting-based accusations as well as observations on the relationship between Grifols and a private family-owned business called Scranton. Although we were already aware of most of the issues raised, there is a high hurdle for maintaining a position in these circumstances and we decided to sell our entire position. 

In addition to our sale of Grifols, our most notable trades were complete sales in Brenntag and Delivery Hero alongside new purchases in Kone, the Finnish elevator company, and Infineon, the German semiconductor company.

We had purchased Brenntag at an opportune moment in 2022, just after the company had controversially approached its US peer Univar. Part of our investment thesis had been the potential that the new management team would end up splitting the business into two parts: a specialty distribution business and a bulk distribution business. At the time of our purchase, the 'split' in our view would have created a lot of value, but since our investment, the shares have gone up materiality whilst peer companies' shares have gone down, and the maths of the split therefore became much less compelling. For these reasons, we sold this position and locked in the profits.

Delivery Hero has been a poor investment for us and appears to be suffering from slowing growth across its core markets. In a post-Covid world, there is little growth in food delivery, which leads us to question whether and when a satisfactory return on capital can be achieved. The position was therefore sold.

Onto the two new positions I mentioned above. We like the fundamentals of Kone's business model: it has "sticky customers"- a razor/razor blade business model - and a global oligopoly position. The company has been held back in recent years by a collapse in new build activity in China, but the issues in this market are now well understood and have also diminished in importance, now representing around 15% of the business compared to over one third a few years ago. Infineon is a semi-conductor manufacturer. We have had success in our investments in semi-conductor equipment companies over the past year, but have taken profit in these shares and have now redistributed some of the proceeds into Infineon. Infineon is exposed to auto and industrial markets and is benefitting from the shift to digitalisation in industrial end markets and to electrification in auto markets. The shares are currently inexpensive due the short-term softness being seen in these end markets.

In an environment of benign economic conditions and falling interest rates, equity markets should be well positioned to perform strongly. We have and will maintain our quality bias, but in recent months, we have made some moves to increase our exposure to some more cyclical growth areas of the market, such as semi-conductors, as mentioned above, to benefit from this environment. We are confident in our positioning and will remain focused on delivering an attractive long term total return to our shareholders.

Jamie Ross

Fund Manager

20 March 2024

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties associated with the Company's business can be divided into the following main areas:

•           Investment activity and performance

•           Portfolio and market

•           Regulatory

•           Operational and cyber

•           ESG

Information on these risks and how they are managed is given in the Annual Report for the year ended 31 July 2023. In the view of the Board, these principal risks and uncertainties continue to apply and are as applicable to the remaining six months of the financial year (whilst also acknowledging the going concern and material uncertainty statement below) as they were to the six months under review. 

Going Concern and Material Uncertainty

The Board announced a proposed combination of the assets of the Company with the assets of HEFT, subject to shareholder approval, through a tax efficient scheme of reconstruction under section 110 of the Insolvency Act 1986 (the "Proposals"). More detail can be found in the Chairman's Statement and in the RNS announcement dated 14 March 2024.

The Board believes that the Proposals are in the best interests of shareholders as a whole and recommends that shareholders vote in favour of the resolutions required to effect the Proposals. The Proposals will be effected by way of a scheme of reconstruction and winding up of the Company's under section 110 of the Insolvency Act 1986, and the associated transfer of the Company's assets to HEFT in exchange for the issue of new shares by HEFT under the recommended scheme. This would result in the voluntary liquidation of the Company. Due to the requirement for the Proposals to receive approval from the shareholders of both the Company and HEFT there remains material uncertainty as to the future of the Company.

However, should the Proposals not receive the necessary shareholder approvals or any of the other conditions to the Proposals not be satisfied, the Board believes that the Company would remain a going concern. Accordingly, the Board has prepared the financial statements in this report for the half year ended 31 January 2024 ("Half Year Report") on a going concern basis.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors (as listed in note 12) confirm that, to the best of their knowledge:

(a)	the condensed financial statements for the half year ended 31 January 2024 have been prepared in accordance with FRS 104 Interim Financial Reporting and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;
(b)	the interim management report and condensed financial statements include a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year (whilst also acknowledging the going concern and material uncertainty statement below and that the Company may be placed into voluntary liquidation before 31 July 2024)); and
(c)	the interim management report includes a fair review of the information required by the Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

On behalf of the Board

Nicola Ralston

Chairman

20 March 2024

Investment portfolio at 31 January 2024 

Investment	Country	Sector	Valuation £'000	% of portfolio
Novo Nordisk	Denmark	Pharmaceuticals & Biotechnology	26,210	7.4
TotalEnergies	France	Oil & Gas Producers	18,689	5.3
Nestlé	Switzerland	Food Producers	16,778	4.7
Roche	Switzerland	Pharmaceuticals & Biotechnology	16,693	4.7
ASML	Netherlands	Technology Hardware and Equipment	15,763	4.4
Sanofi	France	Pharmaceuticals & Biotechnology	13,857	3.9
SAP	Germany	Software & Computer Services	12,818	3.6
Safran	France	Aerospace & Defence	11,524	3.3
SGS	Switzerland	Support Services	11,513	3.2
Airbus	France	Aerospace & Defence	10,589	3.0
Top 10			154,434	43.5
Schneider Electric	France	Electronic & Electrical Equipment	10,186	2.9
LVMH Moët Hennessy Louis Vuitton	France	Personal Goods	10,149	2.9
Beiersdorf	Germany	Personal Goods	9,910	2.8
Munich Re.	Germany	Insurance	9,646	2.7
DSM Firmenich	Switzerland	Food Producer	9,579	2.7
UniCredit	Italy	Banks	9,322	2.6
Deutsche Börse	Germany	Financial Services	8,861	2.5
Amundi	France	Bank and Asset Manager	7,777	2.2
BNP Paribas	France	Banks	6,865	1.9
Infineon Technologies	Germany	Technology Hardware and Equipment	6,561	1.8
Top 20			243,290	68.5
Hermès	France	Luxury Goods	6,552	1.8
Alcon	Switzerland	Health Care Equipment & Services	6,440	1.8
Euronext	Netherlands	Financial Services	6,384	1.8
Moncler	Italy	Luxury Goods	6,228	1.8
Pernod Ricard	France	Beverages	6,173	1.7
Allfunds	Netherlands	Finance and Credit Services	5,770	1.6
ASM International	Netherlands	Technology Hardware and Equipment	5,422	1.5
Universal Music	Netherlands	Media	5,417	1.5
Partners Group	Switzerland	Private Equity Asset Manager	5,328	1.5
Cellnex	Spain	Mobile Telecommunications	5,297	1.5
Top 30			302,301	85.0
Metso	Finland	Industrial Engineering	5,291	1.5
Heineken	Netherlands	Beverages	5,175	1.5
SIG	Switzerland	Containers and Packaging	4,950	1.4
Danone	France	Food Producer	4,937	1.4
Bawag	Austria	Banks	4,876	1.4
EDP Renovaveis	Portugal	Alternative Energy	4,093	1.2
Arkema	France	Chemicals	4,060	1.1
Kone	Finland	Industrial Engineering	3,601	1.0
Besi	Netherlands	Technology Hardware and Equipment	3,386	1.0
Brockhaus Capital Management	Germany	Financial Services	2,778	0.8
Top 40			345,448	97.3
Sartorius	Germany	Medical Equipment and Services	2,561	0.7
Adidas	Germany	Personal Goods	2,413	0.7
Zealand Pharma	Denmark	Pharmaceuticals & Biotechnology	2,096	0.6
Puma	Germany	Personal Goods	1,662	0.5
Industrie De Nora	Italy	Electronic & Electrical Equipment	803	0.2
Total			354,983	100.0

In addition to the above, the Company has a nil value position in OW Bunker. OW Bunker is unquoted.

Market capitalisation at 31 January 2024

Excluding cash

Market cap	% Portfolio Weight	% Benchmark Weight
>€20bn	79.1	74.6
€10bn - €20bn	9.0	11.8
€5bn - €10bn	6.8	9.7
€1bn - €5bn	4.3	3.7
<€1bn	0.8	0.2
Total	100.0	100.0

Sources: Morningstar Direct, Janus Henderson, LSEG Datastream

Performance drivers over the six months ended 31 January 2024

	%
Benchmark return	4.2
Sector allocation	0.2
Stock selection	0.5
Currency movements (relative to index)	0.0
Effect of cash and gearing	0.1
Effect of ongoing charge	-0.4
Residual (due to timing and rounding)	-0.1
NAV total return	4.5

Sources: Morningstar Direct, Janus Henderson, LSEG Datastream

Characteristics of holdings at 31 January 2024

	Company	Index
	average	average
Market capitalisation (£m)	109,249	91,009
Price/book (x)	2.6	2.0
Trailing 12-month dividend yield (%)	2.4	3.0
Trailing 12-month price/earnings (x)	19.5	14.9
Forward 2024 price/earnings (x)	16.1	13.4
Historical 3-year earnings per share growth per annum (%)	18.8	28.5
Forecast next 12-month earnings per share growth (%)	12.2	11.6
Return on equity (%)	27.3	21.9
Operating margin (%)	22.3	19.9
Long-term debt to capital (%)	30.5	32.9
Number of securities	45	571

Fundamentals are based on weighted averages at the stock level, excluding net cash/borrowing

Net cash/(borrowing) was -1.8% at 31 January 2024

OW Bunker, a nil value position, is not included in the analysis

Source: Factset/Fundamentals in sterling (£) and Janus Henderson

Top ten contributors to and detractors from relative performance

	%
Top ten contributors
Novo Nordisk	1.1
Zealand Pharma	0.7
Partners Group	0.4
Bayer (not held)	0.4
SAP	0.3
UniCredit	0.3
Beiersdorf	0.2
Adyen (not held)	0.2
Safran	0.2
TotalEnergies	0.2
Top ten detractors
Pernod Ricard	-0.5
Grifols	-0.4
Puma	-0.4
SIG	-0.4
Moncler	-0.3
HelloFresh (not held at 31 January 2024)	-0.3
UBS (not held)	-0.3
Roche	-0.3
EDP Renovaveis	-0.2
Sanofi	-0.2

Condensed Income Statement
	(Unaudited) Half year ended 31 January 2024			(Unaudited) Half year ended 31 January 2023			(Audited) Year ended 31 July 2023
	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Gains from investments held at fair value through profit or loss	-	15,454	15,454	-	36,619	36,619	-	43,816	43,816
Investment income	1,013	-	1,013	1,273	-	1,273	8,877	-	8,877
Other income	76	-	76	33	-	33	71	-	71
	_____	_____	_____	_____	_____	_____	_____	_____	_____
Gross revenue and capital gains	1,089	15,454	16,543	1,306	36,619	37,925	8,948	43,816	52,764
Management fee (note 4)	(218)	(870)	(1,088)	(192)	(767)	(959)	(407)	(1,628)	(2,035)
Other administrative expenses	(400)	-	(400)	(304)	-	(304)	(553)	-	(553)
	_____	_____	_____	_____	_____	_____	_____	_____	_____
Net return before finance costs and taxation	471	14,584	15,055	810	35,852	36,662	7,988	42,188	50,176
Finance costs	(85)	(344)	(429)	(17)	(69)	(86)	(43)	(174)	(217)
	_____	_____	_____	_____	_____	_____	_____	_____	_____
Net return before taxation	386	14,240	14,626	793	35,783	36,576	7,945	42,014	49,959
Taxation on net return	(34)	-	(34)	(167)	-	(167)	(1,120)	-	(1,120)
	_____	_____	_____	_____	_____	_____	_____	_____	_____
Net return after taxation	352	14,240	14,592	626	35,783	36,409	6,825	42,014	48,839
	=====	=====	=====	=====	=====	=====	=====	=====	=====
Return per ordinary share - basic and diluted (note 2)	0.17p	6.72p	6.89p	0.30p	16.89p	17.19p	3.22p	19.83p	23.05p
	=====	=====	=====	=====	=====	=====	=====	=====	=====

The total return columns of this statement represent the Condensed Income Statement of the Company, prepared in accordance with FRS 104. All revenue and capital items in the above statement derive from continuing operations.  The revenue 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 Condensed Income Statement and the Condensed Statement of Changes in Equity.

The accompanying notes are an integral part of the condensed financial statements.

Condensed Statement of Changes in Equity

 

 

Half year ended 31 January 2024 (Unaudited)

	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue   reserve £'000	Total shareholders' funds £'000
As at 1 August 2023	1,060	41,032	263	293,079	6,364	341,798
Net return after taxation	-	-	-	14,240	352	14,592
Final dividend for 2023 paid	-	-	-	-	(6,356)	(6,356)
Refund of unclaimed dividends over 12 years old	-	-	-	-	2	2
	--------	---------	--------	-----------	--------	-----------
As at 31 January 2024	1,060	41,032	263	307,319	362	350,036
	=====	======	=====	======	=====	=======

 

Half year ended 31 January 2023 (Unaudited)

As at 1 August 2022	1,060	41,032	263	251,065	7,590	301,010
Net return after taxation	-	-	-	35,783	626	36,409
Final dividend for 2022 paid in respect of year ended 31 July 2022	-	-	-	-	(6,356)	(6,356)
	--------	---------	--------	-----------	--------	-----------
As at 31 January 2023	1,060	41,032	263	286,848	1,860	331,063
	=====	=====	=====	======	=====	======

 

Year ended 31 July 2023 (Audited)

As at 1 August 2022	1,060	41,032	263	251,065	7,590	301,010
Net return after taxation	-	-	-	42,014	6,825	48,839
Final dividend for 2022 paid in respect of year ended 31 July 2022	-	-	-	-	(6,356)	(6,356)
Interim dividend for 2023 paid in respect of the year ended 31 July 2023	-	-	-	-	(1,695)	(1,695)
	--------	---------	--------	-----------	---------	----------
As at 31 July 2023	1,060	41,032	263	293,079	6,364	341,798
	=====	=====	=====	======	=====	======

The accompanying notes are an integral part of the condensed financial statements.

 

Condensed Statement of Financial Position

	(Unaudited) 31 January 2024	(Unaudited) 31 January 2023	(Audited) 31 July 2023
	£'000	£'000	£'000
Fixed asset investments held at fair value through profit or loss	354,983	330,791	357,406
	-----------	-----------	-----------
Current assets
Debtors	2,286	2,390	3,445
Cash at bank and in hand	2,244	7,532	2,687
	-----------	-----------	-----------
	4,530	9,922	6,132
Creditors: amounts falling due within one year	(9,477)	(9,650)	(21,740)
	-----------	-----------	-----------
Net current (liabilities)/assets	(4,947)	272	(15,608)
	-----------	-----------	-----------
Net assets	350,036	331,063	341,798
	=======	=======	=======
Capital and reserves
Called up share capital	1,060	1,060	1,060
Share premium account	41,032	41,032	41,032
Capital redemption reserve	263	263	263
Capital reserves	307,319	286,848	293,079
Revenue reserve	362	1,860	6,364
	------------	------------	------------
Equity shareholders' funds	350,036	331,063	341,798
	=======	=======	=======
Net asset value per ordinary share - basic and diluted (note 3)	165.2p	156.3p	161.3p
	=======	=======	=======

The accompanying notes are an integral part of the condensed financial statements.

NOTES TO THE FINANCIAL STATEMENTS
1.	Accounting policies
	The condensed set of financial statements has been prepared in accordance with FRS 104 Interim Financial Reporting, FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland and the Statement of Recommended Practice for "Financial Statements of Investment Trust Companies and Venture Capital Trusts", issued in July 2022. For the period under review the Company's accounting policies have not varied from those described in the annual report for the year ended 31 July 2023. These financial statements have been neither audited nor reviewed by the Company's auditors. As an investment fund, the Company is not presenting a cash flow statement. A cash flow statement is not required when an investment fund meets all the following conditions: substantially all the entity's investments are highly liquid and are carried at market value, and where a statement of changes in equity is provided.
2.	Return per ordinary share The return per ordinary share is based on the following figures:
	(Unaudited) Half year ended 31 January 2024 £'000 (Unaudited) Half year ended 31 January 2023 £'000 (Audited) Year ended 31 July 2023  £'000 Revenue return 352 626 6,825 Capital return 14,240 35,783 42,014 ---------- ---------- ---------- Total 14,592 36,409 48,839 ====== ====== ====== Weighted average number of ordinary shares (excluding treasury shares) 211,855,410 211,855,410 211,855,410 Revenue return per ordinary share 0.17p 0.30p 3.22p Capital return per ordinary share 6.72p 16.89p 19.83p ----------- ----------- ----------- Total return per ordinary share 6.89p 17.19p 23.05p ====== ====== ======
	The Company has no securities in issue that could dilute the return per ordinary share.  Therefore, the basic and diluted return per ordinary share are the same.
3.	Net asset value per ordinary share
	Net asset value per ordinary share is based on 211,855,410 (half year ended 31 January 2023: 211,855,410; year ended 31 July 2023: 211,855,410) ordinary shares in issue, excluding treasury shares.
4.	Management fees
	Management fees are charged in accordance with the terms of the management agreement and provided for when due. The base management fee is calculated at the rate of 0.65% per annum of net assets up to £300 million and 0.55% for net assets above £300 million, payable quarterly in arrears.
5.	Investments held at fair value through profit or loss
	The table below analyses fair value measurements for investments held at fair value through profit or loss. These fair value measurements are categorised into different levels in the fair value hierarchy based on the valuation techniques used and are defined as follows under FRS 102: Level 1: the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date                                      Level 2: inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly                                        Level 3: inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability                                     Financial Assets held at fair value through profit or loss at 31 January 2024 Level 1 £'000 Level 2 £'000 Level 3 £'000 Total £'000 Equity investments  352,205 2,778 -  354,983 Total financial assets carried at fair value  352,205 2,778 -  354,983 Financial Assets held at fair value through profit Level 1 Level 2 Level 3 Total or loss at 31 January 2023 £'000 £'000 £'000 £'000 Equity investments  328,483 2,308 -  330,791 Total financial assets carried at fair value  328,483 2,308 -  330,791 Financial Assets held at fair value through profit Level 1 Level 2 Level 3 Total or loss at 31 July 2023 £'000 £'000 £'000 £'000 Equity investments  354,852 2,554 -  357,406 Total financial assets carried at fair value  354,852 2,554 -  357,406 The valuation techniques used by the Company are explained in the accounting policies notes 1 (c) and 15.5 in the Company's Annual Report for the year ended 31 July 2023. The holding in OW Bunker is included in Level 3 and is currently valued at £nil (half year ended 31 January 2023: £nil; year ended 31 July 2023: £nil).
6.	Bank loan
	At 31 January 2024, the Company had drawn down £8,561,000 (half year ended 31 January 2023 £8,842,000; year ended 31 July 2023: £8,569,000) of its EUR 30 million multi-currency loan facility.
7.	Going concern and material uncertainty
	The assets of the Company consist of securities that are primarily readily realisable and, accordingly, the Directors believe that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of the financial statements in this Half Year Report. The Board has also assessed the principal risks (set out in the Annual Report for the year ended 31 July 2023), as well as the impact of the ongoing geo-political events on the Company. As detailed in Principal Risks and Uncertainties, the board announced a proposed combination of the assets of the Company with the assets of HEFT, subject to, amongst other things, shareholder approval, through a tax efficient scheme of reconstruction under section 110 of the Insolvency Act 1986 (the "Proposals"). This would result in the voluntary liquidation of the Company. Due to the requirement for the Proposals to receive approval from the shareholders of both the Company and HEFT there remains a material uncertainty as to the future of the Company. More detail on the Proposals can be found in the Chairman's Statement and in the RNS announcement dated 14 March 2024. However, should the Proposals not receive the necessary shareholder approvals or the conditions to the Proposals not be satisfied, the Board believes that the Company would remain a going concern. Accordingly, the Board has prepared the financial statements in this Half Year Report on a going concern basis.

8.	Related party transactions
	The Company's transactions with related parties in the period under review were with its Directors and the Manager. There were no material transactions between the Company and its Directors during the half year and the only amounts paid to them were in respect of expenses and remuneration for which there were no outstanding amounts payable at the half-year end. Directors' shareholdings are disclosed in the Annual Report. In relation to the provision of services by the Manager, other than fees payable by the Company in the ordinary course of business and the facilitation of marketing activities with third parties, there were no material transactions with the Manager affecting the financial position of the Company during the half year under review.
9.	Dividends
	The Chairman advised in the Annual Report for the year ended 31 July 2023 that the Company will pay a final dividend only, and no interim dividend.  If, however, the Proposals (see the Chairman's Statement for more detail) are approved, a pre-liquidation dividend will be paid prior to the Proposals becoming effective.
10.	Share capital
	At 31 January 2024 there were 212,055,410 shares in issue of which 200,000 were held in treasury, resulting in 211,855,410 shares entitled to a dividend. During the half-year period ended 31 January 2024, no shares were issued or repurchased (half year ended 31 January 2023 and year ended 31 July 2023: no shares were issued or repurchased). No shares have been issued or repurchased since 31 January 2024.
11.	Comparative information
	The financial information contained in this half-year report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the half years ended 31 January 2024 and 31 January 2023 has not been audited or reviewed by the Company's auditor. The figures and financial information for the year ended 31 July 2023 are an extract based on the latest published accounts and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.  A glossary of terms and details of alternative performance measures can be found in the Annual Report for the year ended 31 July 2023.
12.	General information
	Company status Henderson EuroTrust plc Registered as an investment company in England and Wales Registration Number: 02718241 Registered Office: 201 Bishopsgate, London EC2M 3AE SEDOL Number: BP6QR38 ISIN number: GB00BP6QR382 London Stock Exchange (TIDM) Code: HNE Global Intermediary Identification Number (GIIN): P560WP.99999.SL.826 Legal Entity Identifier (LEI) Number: 213800DAFFNXRBWOEF12

 

	Directors and Corporate Secretary The Directors of the Company are Nicola Ralston (Chairman), Katya Thomson (Chairman of the Audit and Risk Committee), Stephen White (Senior Independent Director), 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 and data, copies of announcements, reports and details of general meetings can be found at www.hendersoneurotrust.com.
13.	Half Year Report
	The Half Year Report will be available on the Company's website, www.hendersoneurotrust.com or from the Company's registered office. An abbreviated version, the 'Update', will be circulated to shareholders in early April and will also be available on the Company's website.

For further information please contact:

Jamie Ross Fund Manager Henderson EuroTrust plc  Telephone: [phone]	Dan Howe Head of Investment Trusts Janus Henderson Investors Telephone: [phone]
Harriet Hall PR Director, Investment Trusts Janus Henderson Investors Tel: [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.

 

END