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.
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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
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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.
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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
====== ====== ======
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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)
--------- --------- ---------
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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).
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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.
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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.
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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
===== ===== =====
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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.
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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 -
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