Interim Management Statement

RNS Number : 1506M

Henderson Eurotrust PLC

18 May 2010

 



HENDERSON EUROTRUST PLC

HENDERSON GLOBAL INVESTORS

18 May 2010

HENDERSON EUROTRUST PLC

Interim Management Statement

Review of the period from 1 February 2010 to 30 April 2010

The Directors of Henderson EuroTrust plc hereby announce the following:

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Portfolio Comments:

The three months since our Half Year Report have seen European markets suffer a period of volatility, especially during April. In spite of the concerns about the sovereign risk which built up in intensity during late April, markets have generally chosen to concentrate on better economic news from Europe and more particularly the USA. The Company has been performing well, helped by gearing which reached a peak of about 7.5% of the portfolio/assets in March.

During the period we have sold a number of positions, including the Finnish insurance company Sampo, Irish low cost carrier Ryanair, Daimler, Deutsche Telekom and Synthes, the Swiss listed orthopaedics company. On the purchase side we invested in the new issue by Kabel Deutschland (German cable television), and returned to holding Philips and Adecco.

Given the recent market turmoil surrounding Greece and some other Eurozone members it is worth pointing out that we have not held any positions in the Greek market for some years and while we did have a position in Galp, a Portuguese company during the three months those shares were sold at a small profit before the end of April. In Spain our only current holding is still Inditex. The investments we hold are therefore predominantly "Northern" European, by country of listing. 

We purchased some more of our own shares during the three months, when the discount widened to what in our opinion, were unreasonably high levels.

Outlook:

After a strong rise (especially in March) it was likely that any excuse would be found to cause a consolidation in the market While economic news has continued to be encouraging, equities have perhaps justifiably been intensely concerned by the crisis surrounding "Sovereign Debt" (ie debt at too high a level in most countries, but especially Greece). Clearly, with the benefit of hindsight, Greece should either have never been allowed to become a member of the Euro, or having taken a more relaxed attitude towards her fiscal position, she should at least have tried to reduce borrowing during the more recent "better" years. The recently announced IMF and ECB packages of aid should help avert an immediate crisis, and will have undoubtedly alerted those countries erring on the side of too much borrowing (Spain, Portugal - and yes the UK too are frequently being mentioned) to take action now to improve their fiscal balance.

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We do not anticipate a collapse of the Euro, and it is worth pointing out that recent Euro weakness is advantageous to European exporters. Medium term some of the issues raised during this crisis will need to be resolved.

Having been geared for much of the last three months, the Company now has a small net cash position. We may use weakness to add to existing positions if further falls are seen.

Gearing: At the end of the quarter the Company was 7% geared (at 31 January 2010:  4%)

Dividends:  An interim dividend of 4.0p per ordinary share, in respect of the year ending 31 July 2010, was paid on 30 April 2010 to holders on the Register of Members on 6 April 2010.  The ex-dividend date was 31 March 2010.

Discount: The share price discount to net asset value at 30 April 2010 was 12.1% (at 31 January 2010: 7.5%)

Share Capital:  During the three month period the Company bought back 206,860 shares, all of which were placed in Treasury. Accordingly, the issued share capital at 30 April 2010 was 22,968,063 ordinary shares of 5 pence each and the total number of voting rights was 20,960,065.

There are no other material events or transactions to report.

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PERFORMANCE AND FINANCIAL HIGHLIGHTS

Financial Position (excluding current financial year revenue items)

	at 30 April 2010	at 31 January 2010
Ordinary share price	503.5p	494.0p
Discount	-12.1%	-7.5%
Gross total assets	£128m	£118m
Net asset value (cum income)	572.7p	533.9p
Net asset value (ex income)	569.6p	530.2p
Gearing	7%	4%
Yield	1.99%	1.82%
Total Expense Ratio	0.85%	0.85%

(Source: Henderson/Fact Sheet)

Performance at 30 April 2010 (total return % change)

	6 months	1 year	3 years	5 years
Net asset value	11.4%	22.9%	4.5%	78.5%
Share price	2.5%	19.8%	-1.6%	70.2%
Benchmark *	6.0%	28.0%	-4.2%	61.5%

(Sources:  Datastream / AIC)           * The benchmark is the FTSE World Europe (ex UK) Index

THE PORTFOLIO (Source: Henderson/Fact Sheet)

Top 10 Investments at 30 April 2010	% of total assets
Fresenius	4.1
Essilor	3.2
Roche	3.0
Sodexo	2.9
Linde	2.9
Swedish Match	2.8
Siemens	2.7
Deutsche Post	2.7
AP Moller-Maersk	2.6
Adecco	2.6
	----
Top 10 =	29.5

Top 10 Investments at 31 January 2010	% of total assets
Fresenius	3.8
Roche	3.2
Essilor	3.0
Sodexo	3.0
Nestlé	2.8
Sampo OYJ	2.8
Beiersdorf	2.7
AP Moller-Maersk	2.7
Linde	2.7
Swedish Match	2.6
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Top 10 =	29.3

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Geographic Breakdown

	% at 30 April 2010	% at  31 January 2010
Germany	27.8	25.4
Switzerland	21.1	20.6
France	20.4	22.1
Netherlands	10.6	9.0
Italy	4.9	5.1
Denmark	3.8	2.7
Spain	3.5	3.0
Finland	1.8	4.6
Ireland	1.5	3.3
Others	4.6	4.2
Total	100.0 ====	100.0 ====

Sector Breakdown

	% at 30 April 2010	% at  31 January 2010
Oil & Gas	8.9	7.5
Basic Materials	7.7	6.6
Industrials	23.2	21.4
Consumer Goods	12.1	13.7
Health Care	13.4	15.5
Consumer Services	11.0	10.8
Financials	13.5	12.8
Technology	7.5	7.2
Utilities	1.6	1.7
Telecommunications	1.1	2.8
Total	100.0 ====	100.0 ====

The objective of Henderson EuroTrust plc is to invest predominantly in large and medium sized companies which are perceived to be undervalued in view of their growth prospects or on account of a significant change in management or structure.  The company's aim is to achieve a superior total return from a portfolio of high quality European investments.

The Manager is Henderson Global Investors Limited. Further information on the company, including an up to date NAV and share price information, can be found on the Manager's website at www.itshenderson.com

For further information, please contact:

Tim Stevenson Fund Manager Henderson EuroTrust plc Telephone: [phone]

James de Sausmarez Head of Investment Trusts Henderson Global Investors Telephone: [phone]

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