Interim Management Statement

RNS Number : 2112X

Henderson Eurotrust PLC

01 December 2010

 



HENDERSON EUROTRUST PLC

HENDERSON GLOBAL INVESTORS

1 December 2010

HENDERSON EUROTRUST PLC

Interim Management Statement

Review of the period from 1 August 2010 to 31 October 2010

The Directors of Henderson EuroTrust plc hereby announce the following:

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Portfolio Comments: European markets have rallied strongly in the first three months of our financial year, and the performance of the portfolio has kept pace with the indices. The better tone of markets has been due to generally encouraging results from companies, and some very strong economic data from many parts of Northern Europe.  The recent announcement of another tranche of Quantitative Easing from the US Federal Reserve (effectively massive monetary stimulus) has also led to confidence that economies will not drift back into a renewed recession (the "double dip" worry). With interest rates low and bond yields falling at one stage to below 2% for 10 year German Bunds, many investors may be encouraged to return, albeit slowly, to equity markets.

We have made a number of changes over the last few months. Holdings in ASML, Ericsson and Syngenta were all sold, primarily because we are concerned that the profits increases will be less next year. We also sold Sika, which has been in the portfolio for many years, as the news from the construction sector stays subdued. Finally we sold the holding in Credit Suisse, returning the portfolio to a single position in banks (UBS). The outlook for banks continues to be worrying in our view.

On the positive side we have returned to Atlas Copco. Demand for mining equipment in China remains strong and Atlas is a top quality company. Other new positions are Amadeus (the IT behind airline tickets), Gemalto (SIM cards for phones and chips for smart cards), Nokia, Brenntag (chemical logistics and storage), Edenred (vouchers), Legrand (low voltage switching) and finally Novartis.

We have continued to buy back some of our own shares. Consistent with what we said in our Annual Report, we have bought shares back on an opportunistic basis. This will continue if deemed necessary.

Outlook: Economies have recovered from the crisis of 2008, but many of the underlying issues such as debt levels remain. As we stated in the Annual Report, we expect a "square root" shaped recovery, and the chances are that recent data will be seen (with hindsight in a few months time) to show that calendar Q4 2010 is the inflection point between better growth and slow growth. We do not expect a "double dip", but also we acknowledge that growth will be slow. In this environment, the combination of steady growth companies mainly in the Northern European countries should stand us in good stead. We have only two holdings in Spain (Inditex and Amadeus) and nothing in Greece or Ireland. These latter two countries could still be challenging.

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Gearing:  At the end of the quarter the Company was 2% geared (at 31 July 2010:1%)

Annual General Meeting: The AGM was held on 18 November 2010 and all resolutions were duly passed.

Directors: At the close of the Annual General Meeting on 18 November 2010 Tim Stevenson resigned as a Director. He remains the Portfolio Manager.

Dividends:  Following shareholder approval at the AGM, a final dividend of 7.0p (2009: 6.0p plus a 2.0p special) per ordinary share was paid on 22 November 2010 to shareholders on the register on 15 October 2010. The shares were quoted ex-dividend on 13 October 2010.

Discount: The share price discount to net asset value at 31 October 2010 was 11.2% (at 31 July 2010: 10.7%)

Share Capital: During the three month period the Company bought back 95,000 shares, all of which were cancelled immediately. Accordingly, the issued share capital at the quarter end was 20,781,925 and the total number of voting rights was 20,781,925.

There are no other material events or transactions to report.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Performance at 31 October 2010 (total return % change)

	3 months	6 months	1 year	3 years	5 years
Net asset value	12.06	7.38	18.44	12.62	66.04
Share price	9.90	6.95	9.60	10.08	57.21
Benchmark *	9.72	4.37	10.63	-4.04	44.96

(Source:  Morningstar/Funddata)           * The benchmark is the FTSE World Europe (ex UK) Index

Financial Position (excluding current financial year revenue items)

	at 31 October 2010	at 31 July 2010
Ordinary share price	531.5p	490.0p
Discount	11.2%	10.7%
Gross total assets	£127m	£115m
Net asset value (cum income)	598.73p	548.8p
Net asset value (ex income)	598.47p	540.3p
Gearing	2.0%	1.0%
Yield	2.07%	2.04%
Total Expense Ratio (ex performance fee)	0.94%	0.94%
Total Expense Ratio Inc performance fee)	1.43%	1.43%

(Source: Henderson/Fact Sheet)

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THE PORTFOLIO (Source: Henderson/Fact Sheet)

Top 10 Investments at 31 October 2010			Top 10 Investments at 31 July 2010
	% of total assets			% of total assets
Fresenius	4.1		Fresenius	4.2
Deutsche Post	3.6		Deutsche Post	3.9
Essilor	3.1		Adecco	3.6
Swedish Match	3.1		Essilor	3.4
Inditex	3.0		Sodexo	3.2
Gemalto	3.0		Swedish Match	3.0
SAP	2.6		ABB	3.0
Deutsche Börse	2.5		Deutsche Börse	3.0
Roche Holdings	2.5		SAP	2.6
Givaudan	2.5		Nestlé	2.6
	-------			-------
	30.0			32.5
	====			====

Geographic Breakdown

	% at 31 October 2010	% at  31 July 2010
Germany	33.0	32.4
France	24.0	20.9
Switzerland	21.3	26.5
Italy	5.0	5.0
Spain	4.8	2.3
Netherlands	3.5	5.4
Others	8.4	7.5
	------	------
Total	100.0 ====	100.0 ====

Sector Breakdown

	% at 31 October 2010	% at  31 July 2010
Industrials	27.4	23.1
Healthcare	14.1	12.1
Consumer Goods	14.1	14.4
Consumer Services	13.6	13.8
Financials	7.4	10.4
Oil & Gas	7.0	7.3
Basic Materials	6.5	9.3
Technology	6.3	7.4
Telecommunications	3.6	2.2
	------	-------
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 net asset value and share price information, can be found on the Company's website at www.hendersoneurotrust.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]
Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

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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) is incorporated into, or forms part of, this announcement.

 

END

 

 

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