Interim Results
Henderson TR Pacific Inv. Trust PLC
03 August 2004
2 August 2004
HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
Henderson TR Pacific Investment Trust plc ('Henderson TR Pacific'), which seeks
capital growth from Pacific region stock markets and economies excluding Japan
and Australasia, announces interim results for the half year ended 30 June 2004.
Henderson TR Pacific is one of the largest investment trusts specialising in
this region.
Highlights:
• Global economic uncertainty combined with higher inflation and interest
rates caused markets to adjust across the region in the first half of 2004.
• China and Thailand saw sharp corrections with general weakness in cyclical
sectors.
• Net asset value per share on a total return basis fell by 7.4% against a
2.3% fall in the MSCI Index (#) but this compared to rises last year in the
company's net assets of 40.4% and 30.4% for the Index.
• New £40 million multi-currency 2 year facility arranged, allowing flexible
access to low cost funds.
• Gearing reduced to 7.2% at 30 June 2004 from 17.7% at the year end.
• Lower exposure to cyclical sectors but stance favouring overweight
positions in China and Thailand remains.
• Discount to net asset value widened during the first half to 11.5% at
period end.
• 4.42 million shares repurchased for cancellation at an average discount of
13.4%.
• Fundamentals for investment in the region remain sound.
Financial Highlights (Unaudited) (Audited) (Unaudited)
30 June 2004 31 Dec 2003 30 June 2003
Net asset value 82.5p 89.3p 70.9p
Share Price 73.0p 85.0p 63.5p
Discount 11.5% 4.8% 10.4%
Gearing (*) 7.2% 17.7% 11.0%
Performance to 30 June 2004
Total returns 6 months 12 months
Net asset value (i) -7.4% 17.6%
Share price (i) -13.1% 16.3%
Peer group net asset value (i) and (ii) -5.5% 22.3%
MSCI AC Far East (Free) ex-Japan Index (iii) -2.3% 18.6%
Sources: please see page 10
(*) Defined here as borrowings, less cash balances and deposits, as a
percentage of shareholders' funds.
(#) MSCI AC Far East (Free) ex-Japan Index
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
Regarding prospects, Chairman, David Robins, in his first Statement to
Shareholders, said:
'Stock markets have adjusted for the uncertainties currently facing the region.
We expect economic growth across the region to remain stronger than that of the
rest of the world. For the foreseeable future we continue to anticipate
corporate profits growth to be sustained in most countries. Valuations therefore
continue to be attractive by global standards and the longer term still presents
us with substantial growth opportunities'.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
Extract from the Chairman's Half Year Statement:-
Chairman's Half Year Statement
The first six months of 2004 saw growing uncertainty over prospects for a
sustained global economic recovery. Inflation turned higher spurred by rising
raw material costs and interest rates tightened in most countries. Moreover, the
Chinese economy, which has been an important engine of growth, began to overheat
in some sectors. Those stock markets which had been strongest in 2004, namely
China and Thailand, where we held significant investments, saw sharp corrections
and regional stock markets generally saw weakness in cyclical sectors, where the
portfolio was also heavily weighted.
Performance
Having achieved a positive total return of 40.4% over 2003, comfortably
outperforming the 30.4% rise in the MSCI AC Far East (Free) ex-Japan Index
('MSCI Index'), the first six months of 2004 saw a modest setback with net asset
value total return per share falling by 7.4% compared with a fall of 2.3% in the
MSCI Index. Whilst action was taken to reduce the level of gearing and exposure
to cyclical sectors our basic stance, favouring cyclical growth with overweight
positions in China and Thailand, remained intact.
Directors
This is my first opportunity to communicate with you as Chairman, a position I
took up on Iain Dale's retirement at the Annual General Meeting in April last. I
would like to thank Iain for his ten years of dedicated service to the company
as Chairman before me. I look forward to working with my colleagues on the Board
to maintain and develop the Trust as a leader in its sector. Our two newest
directors, Hugh Aldous and Struan Robertson, appointed to the Board in November
2003 and February 2004 respectively, have made a valuable start and I am
confident we have maintained a highly effective Board.
Borrowings
Whilst the level of gearing was reduced over the first six months of 2004 due to
the uncertain stock market environment, we decided to proceed with the increase
in the loan facility with ING Bank. A new £40 million multi-currency facility
for two years replaced previous arrangements, which allows us access to
substantial low cost funds when suitable opportunities arise.
Discount to net asset Value and repurchase of shares
The Board was heartened to see last year's narrowing of the discount at which
your shares trade to net assets. The shares ended the year at a discount of
4.8%. In the first half of this year, however, the shares drifted lower and the
discount widened towards the end of the period. It was decided to buy in shares
for cancellation in view of their attractive valuation. 4,420,000 shares were
bought in June at an average discount of 13.4%. The discount at the month end
narrowed to 11.5%. Since the end of June a further 1,645,000 shares have been
repurchased for cancellation at an average discount of 13.1%
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
Dividend
As usual no dividend has been declared at the interim stage. The company's
policy is to pay dividends sufficient to retain its status as an investment
trust. Our focus on capital growth opportunities means shareholders should not
expect any significant return from dividend payments. The 1.00p per share final
dividend paid in respect of the year ended 31 December 2003 included a small
non-recurring tax adjustment and the dividend paid for the current year may not
be as high.
Outlook
We are aware that inflationary pressures and interest rates are rising globally
and that economic growth across the region is likely to be lower next year than
this. The markets have already made significant adjustments for this scenario.
On the other hand, fundamentals remain sound as we expect economic growth across
the region to remain stronger than that of the rest of the world. We continue to
anticipate positive corporate profits growth in most countries. Valuations
therefore continue to be attractive by global standards and the longer term
still presents us with substantial growth opportunities.
David Robins
2 August 2004
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
STATEMENT OF TOTAL RETURN (incorporating the revenue account)
for the half year ended 30 June 2004
(Unaudited) (Unaudited) (Audited)
Half year ended 30 June 2004 Half year ended 30 June 2003 Year ended 31 December 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
--------- -------- -------- --------- -------- -------- -------- -------- --------
Total capital (losses)/gains - (15,594) (15,594) - 51,601 51,601
on investments - 12,684 12,684
Income from fixed asset 3,028 - 3,028 2,379 - 2,379 4,418 - 4,418
investments
Other interest receivable 19 - 19 35 - 35
and similar income 13 - 13
-------- -------- -------- -------- -------- -------- -------- -------- --------
Gross revenue and capital 3,047 (15,594) (12,547) 4,453 51,601 56,054
(losses)/gains 2,392 12,684 15,076
Management fee (299) (513) (812) (273) (445) (718) (547) (890) (1,437)
Other administrative (333) - (333) (227) - (227) (496) - (496)
expenses
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on
ordinary activities before
interest payable
and taxation 2,415 (16,107) (13,692) 1,892 12,239 14,131 3,410 50,711 54,121
Interest payable (41) (124) (165) (21) (61) (82) (72) (218) (290)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on 2,374 (16,231) (13,857) 3,338 50,493 53,831
ordinary activities before 1,871 12,178 14,049
taxation
Taxation on net return on (723) 397 (326) (773) 224 (549)
ordinary activities (571) 351 (220)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on 1,651 (15,834) (14,183) 2,565 50,717 53,282
ordinary activities after 1,300 12,529 13,829
taxation
Final dividend 2003: 1.00p - - - - - - (2,036) - (2,036)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Transfer to/(from) reserves 1,651 (15,834) (14,183) 1,300 12,529 13,829 529 50,717 51,246
===== ===== ===== ===== ===== ===== ===== ===== =====
Return/(loss) per ordinary 0.81p (7.79p) (6.98p) 1.26p 24.90p 26.16p
share (Note 1) 0.64p 6.15p 6.79p
===== ===== ===== ===== ===== ===== ===== ===== =====
The revenue columns of this statement represent the revenue accounts of the
company.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
Balance Sheet
As at 30 June 2004
(Unaudited) (Unaudited) (Audited)
At 30 June At 30 June At 31 December
2004 2003 2003
£'000 £'000 £'000
------------- ------------- -------------
Fixed asset investments
Listed at market value - overseas 175,858 159,815 216,097
Unlisted - directors' valuation - 142 -
---------- ---------- ----------
175,858 159,957 216,097
---------- ---------- ----------
Current assets
Debtors 1,418 323 117
Bank balances and short term deposits 2,952 3,623 3,359
---------- ---------- ----------
4,370 3,946 3,476
Creditors: amounts falling due within one year (15,826) (19,583) (37,835)
---------- ---------- ----------
Net current liabilities (11,456) (15,637) (34,359)
---------- ---------- ----------
Total net assets 164,402 144,320 181,738
========== ========== ==========
Capital and reserves
Called-up share capital 9,959 10,180 10,180
Capital redemption reserve 5,947 5,726 5,726
Special reserve 96,339 99,491 99,492
Other capital reserves 44,697 22,343 60,531
Revenue reserve 7,460 6,580 5,809
---------- ---------- ----------
Equity shareholders' funds 164,402 144,320 181,738
========== ========== ==========
Net asset value per ordinary share (Note 2) 82.5p 70.9p 89.3p
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
Cash Flow Statement
for the half year ended 30 June 2004
(Unaudited) (Unaudited) (Audited)
Half year Half year Year
ended ended ended
30 June 2004 30 June 2003 31 December 2003
£'000 £'000 £'000
----------- ----------- -----------
Net cash inflow from operating activities 1,225 1,036 1,576
Interest paid (195) (77) (264)
Net tax paid - - (106)
Net cash inflow/(outflow) from financial investments 24,565 (13,873) (32,036)
Equity dividends paid (2,036) (1,223) (1,223)
---------- ---------- ----------
Net cash inflow/(outflow) before financing 23,559 (14,137) (32,053)
Net cash (outflow)/inflow from financing (23,645) 12,105 30,176
---------- ---------- ----------
Decrease in cash (86) (2,032) (1,877)
========== ========== ==========
Reconciliation of operating revenue to net cash inflow from
operating activities
Net revenue before interest payable and taxation 2,415 1,892 3,410
(Increase)/decrease in accrued income (205) (155) 59
(Increase)/decrease in other debtors (17) 8 1
Increase/(decrease) in creditors 32 (23) (25)
Management charge taken to other capital reserves (513) (445) (890)
Overseas withholding tax (286) (220) (443)
Taiwanese stock dividends (201) (21) (536)
---------- ---------- ----------
Net cash inflow from operating activities 1,225 1,036 1,576
========== ========== ==========
Reconciliation of net cash flow to movement in net debt
Decrease in cash as above (86) (2,032) (1,877)
Cash outflow/(inflow) from financing 20,602 (12,227) (30,297)
---------- ---------- ----------
Change in net debt resulting from cash flows 20,516 (14,259) (32,174)
Exchange movements (206) 112 1,678
---------- ---------- ----------
Movement in net debt during the period 20,310 (14,147) (30,496)
Net debt at beginning of the period (32,160) (1,664) (1,664)
----------- ----------- ----------
Net debt at the end of the period (11,850) (15,811) (32,160)
========== ========== ==========
Represented by:
Cash at bank and short term deposits less bank overdrafts 2,868 3,588 3,359
Debt falling due within one year (14,718) (19,399) (35,519)
---------- ---------- ----------
(11,850) (15,811) (32,160)
========== ========== ==========
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2003
Notes
1. Return/(loss) per ordinary share
Revenue return per ordinary share is based on earnings of £1,651,000 (half
year ended 30 June 2003: £1,300,000; year ended 31 December 2003:
£2,565,000) and on the weighted average number of ordinary shares in issue
during the period of 203,070,501 (half year ended 30 June 2003:
203,759,823; year ended 31 December 2003: 203,680,948).
Capital loss per ordinary share is based on net capital losses of
£15,834,000 (half year ended 30 June 2003: gains of £12,529,000; year
ended 31 December 2003: gains of £50,717,000) and on the weighted average
number of ordinary shares in issue during the period of 203,070,501 (half
year ended 30 June 2003: 203,759,823; year ended 31 December 2003:
203,680,948).
2. Net asset value per ordinary share
Net asset value per ordinary share is calculated on the basis of
shareholders' funds attributable to ordinary shares divided by the number
of ordinary shares in issue at 30 June 2004, being 199,183,359 (30 June
2003 and 31 December 2003: 203,603,359).
3. Issued Share Capital
During the six months to 30 June 2004, the company bought 4,420,000 of its
own issued ordinary shares in the market for cancellation at a total cost
of £3,153,000. As at 30 June 2004 there was 199,183,359 ordinary shares
in issue (30 June 2003 and 31 December 2003: 203,603,359). Since 30 June
2004 a further 1,645,000 shares were repurchased for cancellation at a
total cost of £1,093,000. As at the date of this report there were
197,538,359 ordinary shares in issue.
4. 2003 Accounts
The figures and financial information for the year ended 31 December 2003
are extracted from the latest published accounts of the company 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 237(2) or 237(3) of the Companies Act 1985.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
APPENDIX 1
Geographical Distribution of the Investment Portfolio
As at 30 June 2004 As at 31 December 2003
Company Index* Company Index*
South Korea 22.8% 26.8% 20.7% 26.1%
Taiwan 21.7% 17.1% 20.2% 17.4%
China 13.4% 12.1% 15.9% 11.3%
Hong Kong 11.3% 20.2% 9.5% 20.6%
Thailand 14.1% 4.0% 17.0% 4.6%
The Philippines 0.0% 0.8% 0.6% 0.7%
Malaysia 8.3% 6.5% 8.3% 6.6%
Singapore 6.6% 10.2% 6.6% 10.5%
Indonesia 0.0% 2.3% 0.0% 2.2%
Vietnam 1.8% 0.0% 1.2% 0.0%
--------- --------- --------- ---------
100.0% 100.0% 100.0% 100.0%
========= ========= ========= =========
* MSCI AC Far East (Free) ex-Japan Index Country Weightings
APPENDIX 2
Stock Market Performance
Half year ended 30 June 2004
Local Currency Sterling Adjusted
South Korea -3.1% -1.3%
Taiwan -0.9% -1.2%
China -13.0% -14.2%
Hong Kong -2.3% -4.0%
Thailand -16.3% -19.9%
The Philippines 9.5% 6.9%
Malaysia 3.3% 1.9%
Singapore 4.2% 1.4%
Indonesia 5.6% -6.4%
Vietnam 52.1% 49.4%
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
APPENDIX 3
Sector Analysis of Investments at 30 June 2004
As at 30 June 2004 As at 31 December 2003
Company Index* Company Index*
Consumer Discretionary 12.8% 9.3% 14.0% 10.1%
Consumer Staples 4.9% 2.9% 4.2% 2.8%
Energy 4.7% 4.6% 2.3% 3.9%
Financials and Property 28.9% 27.8% 20.4% 27.3%
Healthcare 0.0% 0.2% 0.0% 0.2%
Industrials and Transport 10.6% 11.5% 21.6% 11.6%
Information Technology 21.1% 21.8% 19.9% 21.7%
Materials 6.9% 6.4% 7.5% 6.8%
Telecommunication Services 5.7% 9.5% 5.9% 9.6%
Utilities 4.4% 6.0% 4.2% 6.0%
---------- ---------- ---------- ----------
100.0% 100.0% 100.0% 100.0%
========= ========= ========= =========
* MSCI AC Far East (Free) ex-Japan Index Sector Weightings
Sources relate to notes (i) to (iii) on page 1.
(i) Source: AITC Services Ltd (net dividends reinvested).
(ii) The company's performance is compared against a group of leading investment
trust competitors. Source: AITC Services Ltd (net dividends reinvested).
(iii)MSCI AC Far East (Free) ex-Japan Index: (gross dividends reinvested).
Source: Datastream
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
APPENDIX 4
List and Valuation of Investments as at 30 June 2004
% of Market % of Market
Investments Value Investments Value
£'000 £'000
CHINA 13.4 23.610 VIETNAM 1.8 3,101
China Heartland Fund 249 The Vietnam Fund 42
China Shipping Development 2,637 Vietnam Enterprise Investment Fund 3,059
China Telecom 1,251
CNOOC 3,774 SOUTH KOREA 22.8 40,121
Global Bio-Chem 2,545
Huaneng Power International 4,788 Hana Bank 2,783
Kingboard Chemicals 2,964 Hyundai Motor 3,392
Sinopec 2,256 Industrial Bank of Korea 2,556
Sinotrans 3,146 Interflex 2,775
Kookmin Bank 2,055
TAIWAN 21.7 38,109 KT Corporation 2,075
LG Electronics 3,141
Cathay Financial 3,187 Lotte Confectionery 1,759
Compal Electronics 2,205 Posco 1,782
CTCI Corporation 1,920 Samsung Electronics 6,825
Evergreen Marine 2,602 Samsung Fire & Marine 2,823
High Tech Computers 2,618 Shinsegae 3,167
Nan Ya Plastic 2,815 SK Telecom 2,745
Nien Made Enterprise 2,075 Top Engineering 2,243
Novatek Microelectronics 2,097
Optimax Technology 2,949 SINGAPORE 6.6 11,716
Synnex Technology 3,231
Taishin Financial 2,901 Great Eastern 2,633
Taiwan Paiho 1,455 Noble Group 3,977
Taiwan Semiconductor 2,893 Singapore Press 2,217
Tsann Kuen Enterprise 1,654 Venture 2,889
United Microelectronics 2,127
Waffer Technology 1,380
HONG KONG 11.3 19,895 THAILAND 14.1 24,771
Far East Consortium 1,578 Aromatics Thailand 2,341
Hong Kong Land Holdings 2,762 Bank of Ayudhya 2,686
Hong Kong & China Gas 2,890 BEC World 1,299
Lee & Man Manufacturing 1,192 Central Pattana 2,018
Li & Fung 2,573 CP Seven Eleven 2,313
Linmark Group 2,041 Kasikornbank 3,071
Orient Overseas 3,298 Sansiri 1,314
Swire Pacific 3,561 Shin Corporation 3,952
Siam Cement 3,965
MALAYSIA 8.3 14,535 Tisco Finance 1,812
----------
AMMB 2,767
Courts Mammoth 842 TOTAL INVESTMENTS 100.0 175,858
Gamuda 1,889 ==========
Resorts World 2,520
Roadbuilder 1,125
Sime Darby 2,427
SP Setia 2,965
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Interim Results
for the half year ended 30 June 2004
For further information contact:
Michael Watt, Director and Manager
Tel: 020 7818 1818
Paul Vann
Binns & Co. PR
Tel: 020 7786 9600
or
Vicki Staveacre
Henderson Press Office
Telephone: 020 7818 4222
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