Interim Results

Henderson High Income Trust PLC 1 August 2002 31 July 2002 HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2002 Highlights: * Share price total return per ordinary share 2.5% over first six months * NAV total return per ordinary share 1.3% over first six months * Net dividend yield per ordinary share at half year 7.6% The Chairman's Statement: Assets The first half of the Company's year proved a difficult environment for investments. A steady flow of profit warnings sapped investors' confidence and culminated in bankruptcies of an unprecedented scale in the United States. Against this background there was a flight of money towards both quality and defensive shares. The Company's investment policy of diversification, owning bonds as well as equities, has helped to protect the portfolio over the first half of the year. The net asset value total return per ordinary share rose 1.3% while the FTSE All-Share Index actually fell 8.9%, both figures including the reinvestment of income. The stock market fall accelerated after the end of June. Action has been taken to reduce the level of bank borrowing while the percentage of the portfolio invested in bonds has increased to 30%. The fall in share prices has forced dividend yields upwards across the market; over 37 of the stocks in the FTSE 100 now yield over 4%. When the time comes to switch bonds back to equities then the Company should benefit from an increased degree of diversification. Earnings and Dividends The earnings of the Company amounted to 5.6p over the first half of the year. Despite the rise in earnings over the previous year, the outlook for dividend growth is still mixed. A growing number of companies have cut their payouts and others are naturally conserving cash pending a resumption of profit growth. The board has declared an unchanged second interim dividend of 2.475p. The Company has revenue reserves to help maintain the dividends paid to shareholders during difficult times. The board expects to at least maintain the current level of distribution for the full year. - MORE - - 2 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2002 Chairman's Statement cont'd. Prospects Economic indicators continue to paint a picture of improving conditions, which should assist corporate profits next year. At present the stock market is choosing to ignore these forecasts of better times to come and is gripped by a witch-hunt for bad corporate practice. It has always been the case that bull markets have tempted individuals and companies, driven by greed, to stretch acceptable practices to breaking point in the search for wealth and fame. It is possible that more scandals may come to light but markets have a habit of moving on and focus should return to the brighter prospect for economies, rather than worrying about the past. While stock markets will continue to be volatile, we believe that equities offer good long-term value against a background of low inflation and interest rates. The foundations of any market recovery must be built on positive economic and corporate news. Investor confidence may be slow to reverse but, once a turn comes, the markets could well surprise. William Eason Chairman 31 July 2002 For further information please contact: Alex Crooke Portfolio Manager, Henderson High Income Trust plc Telephone: 020 7818 4447 Stephen Westwood Head of Investment Trusts, Henderson Global Investors Telephone: 020 7818 5517 Stephen Phillips Investor Relations Manager, Henderson Global Investors Telephone: 020 7818 6417 Mark Vickery Henderson Press Office Telephone: 020 7818 4222 - MORE - - 3 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2002 Group Statement of Total Return (incorporating the revenue account) for the half year ended 30 June 2002 (Unaudited) (Unaudited) (Audited) Half year ended 30 June 2002 Half year ended 30 June 2001 Year ended 31 December 2001 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Total capital (losses)/ - (92) (92) - 3,292 3,292 - (1,314) (1,314) gains from investments Income from fixed asset 3,561 - 3,561 3,364 - 3,364 6,147 - 6,147 investments Other interest receivable and similar income 30 - 30 61 - 61 97 - 97 -------- -------- -------- -------- -------- -------- -------- -------- ------- Gross revenue and 3,591 (92) 3,499 3,425 3,292 6,717 6,244 (1,314) 4,930 capital gains/(losses) Management fee (165) (247) (412) (150) (224) (374) (299) (448) (747) Other administrative expenses (118) - (118) (54) - (54) (170) - (170) -------- -------- -------- -------- -------- -------- -------- -------- ------- Net return/(loss) on ordinary activities before interest payable and taxation 3,308 (339) 2,969 3,221 3,068 6,289 5,775 (1,762) 4,013 Interest payable (123) (368) (491) (187) (562) (749) (338) (1,015) (1,353) -------- -------- -------- -------- -------- -------- -------- -------- ------- Net return/(loss) on ordinary activities before taxation 3,185 (707) 2,478 3,034 2,506 5,540 5,437 (2,777) 2,660 Taxation on net return on ordinary activities (192) 185 (7) (201) 201 - (392) 393 1 -------- -------- -------- -------- -------- -------- -------- -------- ------- Net return/(loss) on ordinary activities after taxation 2,993 (522) 2,471 2,833 2,707 5,540 5,045 (2,384) 2,661 Provision for redemption of the zero dividend preference shares in the subsidiary - (1,168) (1,168) - (1,078) (1,078) - (2,221) (2,221) -------- -------- -------- -------- -------- -------- -------- -------- ------- Net return/(loss) attributable to the ordinary shareholders 2,993 (1,690) 1,303 2,833 1,629 4,462 5,045 (4,605) 440 Dividends - ordinary shares Paid and proposed(note 5) (2,692) - (2,692) (2,604) - (2,604) (5,236) - (5,236) -------- -------- -------- -------- -------- -------- -------- -------- ------- Transfer to/(from) reserves 301 (1,690) (1,389) 229 1,629 1,858 (191) (4,605) (4,796) -------- -------- -------- -------- -------- -------- -------- -------- ------- Return/(loss) per ordinary share 5.60p (3.16)p 2.44p 5.38p 3.10p 8.48p 9.58p (8.74)p 0.84p (note 2) -------- -------- -------- -------- -------- -------- -------- -------- ------- Return per zero dividend - 2.22p 2.22p - 2.05p 2.05p - 4.22p 4.22p preference share in the subsidiary -------- -------- -------- -------- -------- -------- -------- -------- ------- Return/(loss) per unit 5.60p (0.94)p 4.66p 5.38p 5.15p 10.53p 9.58p (4.52)p 5.06p -------- -------- -------- -------- -------- -------- -------- -------- ------- The revenue columns of this statement represent the revenue accounts of the Group. As permitted by Section 230 of the Companies Act 1985, the Company has not presented its own revenue account. - MORE - - 4 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2002 Group and Company Balance Sheets at 30 June 2002 Group Company Group Company Group Company (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited) 30 June 30 June 30 June 30 June 31 December 31 December 2002 2002 2001 2001 2001 2001 £'000 £'000 £'000 £'000 £'000 £'000 Fixed asset investments Listed in the United Kingdom 118,718 118,718 125,814 125,814 119,123 119,123 Subsidiary undertaking - - - - - - ---------- ---------- ---------- ---------- ---------- ---------- 118,718 118,718 125,814 125,814 119,123 119,123 Current assets Debtors 1,527 1,527 1,697 1,697 2,019 2,019 Cash at bank and short term 158 158 10 10 1,000 1,000 deposits ---------- ---------- ---------- ---------- ---------- ---------- 1,685 1,685 1,707 1,707 3,019 3,019 Creditors: amounts falling due within one year (21,998) (21,998) (25,578) (25,578) (24,986) (24,986) ---------- ---------- ---------- ---------- ---------- ---------- Net current liabilities 20,313 20,313 (23,871) (23,871) (21,967) (21,967) ---------- ---------- ---------- ---------- ---------- ---------- Total assets less current 98,405 98,405 101,943 101,943 97,156 97,156 liabilities Creditors: amounts falling due after more than one year Amounts owed to group undertaking - (30,475) - (28,164) - (29,307) Zero dividend preference shares in the subsidiary (30,475) - (28,164) - (29,307) - Provision for liabilities and - - - - - - charges ---------- ---------- ---------- ---------- ---------- ---------- Total net assets 67,930 67,930 73,779 73,779 67,849 67,849 ====== ====== ====== ====== ====== ====== Capital and reserves Called-up share capital: ordinary shares 2,709 2,709 2,630 2,630 2,659 2,659 Capital redemption reserve 26,302 26,302 26,302 26,302 26,302 26,302 Other capital reserves Share premium 7,050 7,050 4,935 4,935 5,630 5,630 Realised reserves 20,192 20,192 20,181 20,181 20,192 20,192 Unrealised reserves 10,232 10,232 18,167 18,167 11,922 11,922 Revenue reserve 1,445 1,445 1,564 1,564 1,144 1,144 ---------- ---------- ---------- ---------- ---------- ---------- Shareholders' funds 67,930 67,930 73,779 73,779 67,849 67,849 ====== ====== ====== ====== ====== ====== Net asset value per ordinary 125.38p 125.38p 140.25p 140.25p 127.59p 127.59p share (note 3) ====== ====== ====== ====== ====== ====== Funds attributable to the: Ordinary shares 67,930 73,779 67,849 Zero dividend preference shares in the subsidiary 30,475 28,164 29,307 ---------- ---------- ---------- 98,405 101,943 97,156 ====== ====== ====== Net asset value per: Ordinary share 125.38p 140.25p 127.59p Zero dividend preference share in the subsidiary 57.93p 53.54p 55.71p ---------- ---------- ---------- Unit 183.31p 193.79p 183.30p ====== ====== ====== - MORE - - 5 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2002 Group Cash Flow Statement for the half year ended 30 June 2002 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 30 June 2002 30 June 2001 31 December 2001 £'000 £'000 £'000 Net cash inflow from operating activities 2,791 2,958 5,394 Net cash outflow from servicing of finance (543) (845) (1,398) Net tax (paid)/recovered (7) - 154 Net cash inflow/(outflow) from financial investment 1,060 (3,991) (2,507) Equity dividends paid (2,632) (2,604) (5,208) --------- --------- ----------- Net cash inflow/(outflow) before financing 669 (4,482) (3,565) Net cash (outflow)/inflow from financing (1,511) (3,337) 4,547 ---------- ---------- ---------- (Decrease)/increase in cash (842) (7,819) 982 ---------- ---------- ---------- Reconciliation of operating revenue to net cash inflow from operating activities Net revenue before interest payable and taxation 3,308 3,221 5,775 (Increase)/decrease in accrued income (84) 159 218 Increase in other debtors (5) (1) (3) Decrease in creditors (16) (58) (6) Scrip dividends (165) - - Tax deducted at source - (139) (142) Management fee charged to capital (247) (224) (448) --------- --------- -------- Net cash inflow from operating activities 2,791 2,958 5,394 --------- --------- -------- Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash (842) (7,819) 982 Net repayment/(drawdown) of loans 2,981 3,337 (3,807) ---------- ---------- ----------- Exchange movements - - (2) ---------- ---------- ----------- Movement in net funds/(debt) in the period 2,139 (4,482) (2,827) Net debt at the beginning of the period (21,207) (18,380) (18,380) ---------- ---------- ----------- Net debt at the end of the period (19,068) (22,862) (21,207) ---------- ---------- ----------- Represented by: Cash at bank and short term deposits 158 10 1,000 Debt falling due within one year (19,226) (22,872) (22,207) ---------- ---------- ----------- Total (19,068) (22,862) (21,207) --------- --------- --------- - MORE - - 6 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2002 Notes: 1. Accounting policies a) Group accounts The Group accounts consolidate the accounts of the Company and of its wholly-owned subsidiary, Henderson High Income Trust Securities plc. b) Expenses All expenses are accounted for on an accruals basis. The Board's expectation is that over the long term three quarters of the Group's investment returns will be in the form of capital gains. On this basis, the Group charges to capital 75% of its finance costs and management fees (to the extent that the management fees relate to the maintenance or enhancement of the valuation of investments). 2. Return per share a) Returns per ordinary share Revenue return per ordinary share is based on the earnings attributable to the ordinary shares of £2,993,000 (30 June 2001: £2,833,000; 31 December 2001: £5,045,000) and on the 53,433,009 weighted average number of ordinary shares in issue throughout the period (30 June 2001: 52,603,865; 31 December 2001: 52,677,016). Capital loss per ordinary share is based on the net capital losses for the period of £1,690,000 (30 June 2001: net capital gains £1,629,000; 31 December 2001: net capital losses £4,605,000) and on the 53,433,009 weighted average number of ordinary shares in issue throughout the period (30 June 2001: 52,603,865; 31 December 2001: 52,677,016). b) Returns per zero dividend preference share Capital return per zero dividend preference share reflects the predetermined growth in capital entitlement for the period of £1,168,000 (30 June 2001: £1,078,000; 31 December 2001: £2,221,000) based on the 52,603,865 zero dividend preference shares in issue (30 June 2001 and 31 December 2001: 52,603,865). c) Returns per unit Revenue return per unit, each unit consisting of one ordinary share of 5p each in the Company and one zero dividend preference share of 50p each in the subsidiary, amounts to 5.60p per unit (30 June 2001: 5.38p; 31 December 2001: 9.58p). Capital loss per unit, each unit consisting of one ordinary share of 5p each in the Company and one zero dividend preference share of 50p each in the subsidiary, amounts to (0.94)p per unit (30 June 2001: 5.15p; 31 December 2001: (4.52)p). 3. 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 £67,930,000 (30 June 2001: £73,779,000; 31 December 2001: £67,849,000) and on the 54,178,865 ordinary shares in issue at 30 June 2002 (30 June 2001: 52,603,865; 31 December 2001: 53,178,865). - MORE - - 7 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2002 Notes cont'd: 4. Net revenue The net revenue after taxation of the Company dealt with in the accounts of the Group was £2,993,000 (30 June 2001: £2,833,000; 31 December 2001: £5,045,000). 5. Dividends A first interim dividend of 2.475p (2001: 2.475p) was paid on 31 July 2002 on 54,178,865 shares, being the number of shares in issue at the record date of 21 June 2002. A second interim dividend of 2.475p (2001: 2.475p) has been declared payable on 31 October 2002 to shareholders registered at the close of business on 27 September 2002. Funds have been accrued in the accounts on 55,328,865 shares, being the number of shares in issue on 31 July 2002, the date of approval of these accounts. 6. Accounts for the year ended 31 December 2001 The figures and financial information for the year ended 31 December 2001 are extracted from the latest published accounts of the Group and do not constitute the 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 include a statement under either section 237(2) or section 237(3) of the Companies Act 1985. 7. Interim report The Interim Report will be posted to shareholders in August and will be available from the Registered Office at 4 Broadgate, London EC2M 2DA thereafter. - MORE - - 8 - HENDERSON HIGH INCOME TRUST SECURITIES PLC Unaudited Interim Results for the half year ended 30 June 2002 Statement of Total Return for the half year ended 30 June 2002 (Unaudited) (Unaudited) (Audited) Half year ended 30 June 2002 Half year ended 30 June Year ended 31 December 2001 2001 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Accrued redemption premium receivable from parent company (note 2) - 1,168 1,168 - 1,078 1,078 - 2,221 2,221 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----- Gross revenue and capital - 1,168 1,168 - 1,078 1,078 - 2,221 2,221 gains Administrative expenses - - - - - - - - - (note 3) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----- Net return on ordinary activities before taxation - 1,168 1,168 - 1,078 1,078 - 2,221 2,221 Taxation on net return on ordinary activities - - - - - - - - - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----- - Net return on ordinary activities after taxation - 1,168 1,168 - 1,078 1,078 - 2,221 2,221 Appropriations in respect of non-equity shares: zero dividend preference - (1,168) (1,168) - (1,078) (1,078) - (2,221) (2,221) shares ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----- - Transfer to reserves - - - - - - - - - ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----- - Return per share: - - - - - - - - Ordinary - ---------- ---------- ---------- ---------- ---------- --------- --------- ----- - ---------- Zero dividend preference - 2.22p 2.22p - 2.05p 2.05p - 4.22p 4.22p (note 4) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----- - The revenue columns of this statement represent the revenue account of the Company. - MORE - - 9 - HENDERSON HIGH INCOME TRUST SECURITIES PLC Unaudited Interim Results for the half year ended 30 June 2002 Balance Sheet at 30 June 2002 (Unaudited) (Unaudited) (Audited) 30 June 30 June 31 December 2001 2002 2001 £'000 £'000 £'000 Current assets Debtors 30,475 28,164 29,307 ---------- ---------- ---------- Net current assets 30,475 28,164 29,307 ---------- ---------- ---------- Total net assets 30,475 28,164 29,307 ===== ===== ===== Capital and reserves Called-up share capital 26,302 26,302 26,302 Reserve for redemption premium 4,173 1,862 3,005 ---------- ---------- ---------- 30,475 28,164 29,307 ===== ===== ===== Shareholders' funds attributable to: Equity shareholders - - - Non-equity shareholders 30,475 28,126 29,307 ---------- ---------- ---------- 30,475 28,164 29,307 ===== ===== ===== Net asset value per: Ordinary share - - - ===== ===== ===== Zero dividend preference share (note 5) 57.93p 53.54p 55.71p ===== ===== ===== - MORE - - 10 - HENDERSON HIGH INCOME TRUST SECURITIES PLC Unaudited Interim Results for the half year ended 30 June 2002 Notes: 1. Accounting policy Basis of accounting The accounts have been prepared on the historical cost basis of accounting. The accounts have been prepared in accordance with applicable accounting standards and with the Statement of Recommended Practice Financial Statements of Investment Trust Companies ("the SORP"). All of the Company's operations are of a continuing nature. 2. Accrued redemption premium receivable from parent company Amount due from Henderson High Income Trust plc accrued in respect of the subscription for ordinary shares to be made in September 2005 at the redemption of the Company's zero dividend preference shares. 3. Administrative expenses All the expenses of Henderson High Income Trust Securities plc are met by Henderson High Income Trust plc. 4. Return per share Capital return per zero dividend preference share is based on appropriations in respect of non-equity shares of £1,168,000 (30 June 2001: £1,078,000; 31 December 2001: £2,221,000) and on the 52,603,865 zero dividend preference shares in issue at 30 June 2002 (30 June 2001 and 31 December 2001: 52,603,865). 5. Net asset value per zero dividend preference share The net asset value per zero dividend preference share is based on the funds attributable to the zero dividend preference shares of £30,475,000 (30 June 2001: £28,164,000; 31 December 2001: £29,307,000) and on the 52,603,865 zero dividend preference shares in issue at 30 June 2002 (30 June 2001 and 31 December 2001: 52,603,865). 6. Parent undertaking The Company is a wholly-owned subsidiary undertaking of Henderson High Income Trust plc, an investment company registered in England and Wales and operating in the United Kingdom. 7. Cash flow statement The Company has taken advantage of the exemptions allowed by FRS1 not to prepare a cash flow statement as it is a wholly-owned subsidiary of Henderson High Income Trust plc. - MORE - - 11 - HENDERSON HIGH INCOME TRUST SECURITIES PLC Unaudited Interim Results for the half year ended 30 June 2002 Notes cont'd: 8. Accounts for the period ended 31 December 2001 The figures and financial information for the period ended 31 December 2001 are extracted from the latestpublished accounts of the Company and do not constitute the statutory accounts for that period. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not include a statement under either section 237(2) or section 237(3) of the Companies Act 1985. 9. Interim report The Interim Report will be posted to shareholders in August and will be available from the Registered Office at 4 Broadgate, London EC2M 2DA thereafter. - ENDS - This information is provided by RNS The company news service from the London Stock Exchange
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