Interim Results

Henderson High Income Trust PLC 31 July 2003 30 July 2003 HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2003 Highlights: * NAV and share price per ordinary share up 10.1% and 8.1% respectively * NAV and share price per unit increased by 14.3% and 11.4% respectively * First half figures encouraging The Chairman's Statement: Assets I am pleased to be able to report that the net assets of your Company have risen since I last reported to you. The UK stock market has staged a significant recovery from the very depressed levels reached during the Iraq crisis. Share prices have recovered as the uncertainties surrounding the build-up to war have receded. The economy has not entered into a recession, consumers have not stopped spending and the oil price has not spiked upwards. Further good news has been provided by the first cut in interest rates for 15 months. Share prices now reflect an expectation that economic growth can accelerate from the current subdued level. The investment policy of creating a diversified portfolio of equities and bonds has served shareholders well in terms of damping down the effects of volatile markets. Over the first half of the year, the Company's gearing provided a positive impact on net assets, enhancing returns to ordinary shareholders. The net asset value total return per ordinary share rose 10.1% while the FTSE All- Share Index rose 6.3%, both figures including the reinvestment of income. Earnings and Dividends Over the first half of the year the earnings of the Company amounted to 4.6p, compared with 5.6p a year ago. The fall in earnings is partly a function of reduced gearing but also reflects the dividend cuts that companies announced last year and the trend towards large UK companies declaring dividends in US dollars. The recent weakness in the US dollar has impacted the sterling value of these dividends. While genuine dividend growth is scarce, the nadir in terms of dividends being rebalanced downwards may have passed. The Board has declared an unchanged second interim dividend of 2.475p. The Company has decided to utilise the revenue reserve, prudently created in previous years to maintain the dividends paid to shareholders in these volatile times. Based on present estimates, the Board expects to maintain the current level of distribution for the full year. - MORE - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2003 Chairman's Statement cont'd Prospects The fear of deflation can be crippling for equities while at the same time beneficial for bond prices. Europe seems stagnant with little growth and serious problems in Germany; the UK appears in better health. Interest rates have fallen as price inflation in the housing market has moderated but they are still above the level of price inflation. The UK can not prosper in isolation; our key trading partners are struggling to expand their economies and accordingly a genuine improvement in the UK will inevitably take time to rebuild. Share valuations are forward looking, taking into account the economic prospects over the next 12 months or more. As such, small changes in these expectations, for good or bad, can have dramatic effects on share prices in a very short period of time. I believe that the economy and corporate profitability are improving, but there is still a risk that the pace may be slower than expected leading to short term disappointment. I remain confident for the future, but an element of caution is still required after the experience of the past years. 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 Vicki Staveacre Henderson Press Office Telephone: 020 7818 4222 - MORE - - 3 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2003 Group Statement of Total Return (incorporating the revenue account) for the half year ended 30 June 2003 (Unaudited) (Unaudited) (Audited) Half year ended 30 June 2003 Half year ended 30 June Year ended 31 December 2002 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Total capital gains/(losses) - 6,074 6,074 - (92) (92) - (14,960) (14,960) from investments Income from fixed asset 3,052 - 3,052 3,561 - 3,561 6,461 - 6,461 investments Other interest receivable and similar income 7 - 7 30 - 30 79 - 79 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross revenue and capital gains 3,059 6,074 9,133 3,591 (92) 3,499 6,540 (14,960) (8,420) /(losses) Management fee (129) (193) (322) (165) (247) (412) (330) (495) (825) Performance fee - (333) (333) - - - - - - Other administrative expenses (123) - (123) (118) - (118) (222) - (222) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before interest payable and 2,807 5,548 8,355 3,308 (339) 2,969 5,988 (15,455) (9,467) taxation Interest payable (93) (280) (373) (123) (368) (491) (228) (684) (912) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before taxation 2,714 5,268 7,982 3,185 (707) 2,478 5,760 (16,139) (10,379) Taxation on net return on ordinary activities (158) 151 (7) (192) 185 (7) (352) 342 (10) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities after taxation 2,556 5,419 7,975 2,993 (522) 2,471 5,408 (15,797) (10,389) Provision for redemption of the zero dividend preference shares in the subsidiary - (1,264) (1,264) - (1,168) (1,168) - (2,403) (2,403) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) attributable to the ordinary shareholders 2,556 4,155 6,711 2,993 (1,690) 1,303 5,408 (18,200) (12,792) Dividends - ordinary shares Paid and proposed (note 5) (2,744) - (2,744) (2,692) - (2,692) (5,457) - (5,457) -------- -------- -------- -------- -------- -------- -------- -------- -------- Transfer (from)/to reserves (188) 4,155 3,967 301 (1,690) (1,389) (49) (18,200) (18,249) -------- -------- -------- -------- -------- -------- -------- -------- -------- Return/(loss) per ordinary 4.61p 7.49p 12.10p 5.60p (3.16)p 2.44p 9.95p (33.49)p (23.54)p share (note 2) -------- -------- -------- -------- -------- -------- -------- -------- -------- Return per zero dividend - 2.40p 2.40p - 2.22p 2.22p - 4.57p 4.57p preference share in the subsidiary -------- -------- -------- -------- -------- -------- -------- -------- -------- Return/(loss) per unit 4.61p 9.89p 14.50p 5.60p (0.94)p 4.66p 9.95p (28.92)p (18.97)p -------- -------- -------- -------- -------- -------- -------- -------- -------- 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 2003 Group and Company Balance Sheets at 30 June 2003 Group Company Group Company Group Company (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited) 30 June 30 June 30 June 30 June 31 December 31 December 2003 2003 2002 2002 2002 2002 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Fixed asset investments Listed in the United Kingdom 108,008 108,008 118,718 118,718 104,902 104,902 Subsidiary undertaking - - - - - - ---------- ---------- ---------- ---------- ---------- ---------- 108,008 108,008 118,718 118,718 104,902 104,902 Current assets Debtors 3,270 3,270 1,527 1,527 1,247 1,247 Cash at bank and short term 1,247 1,247 158 158 - - deposits ---------- ---------- ---------- ---------- ---------- ---------- 4,517 4,517 1,685 1,685 1,247 1,247 Creditors: amounts falling due within one year (18,104) (18,104) (21,998) (21,998) (21,959) (21,959) ---------- ---------- ---------- ---------- ---------- ---------- Net current liabilities (13,587) (13,587) (20,313) (20,313) (20,712) (20,712) ---------- ---------- ---------- ---------- ---------- ---------- Total assets less current 94,421 94,421 98,405 98,405 84,190 84,190 liabilities Creditors: amounts falling due after more than one year Bank loans (5,000) (5,000) - - - - Amounts owed to group - (32,974) - (30,475) - (31,710) undertaking Zero dividend preference shares in the subsidiary (32,974) - (30,475) - (31,710) - Provision for liabilities and - - - - - - charges ---------- ---------- ---------- ---------- ---------- ---------- Total net assets 56,447 56,447 67,930 67,930 52,480 52,480 ========== ========== ========== ========== ========== ========== Capital and reserves Called-up share capital: ordinary shares 2,771 2,771 2,709 2,709 2,771 2,771 Capital redemption reserve 26,302 26,302 26,302 26,302 26,302 26,302 Other capital reserves: Share premium 8,398 8,398 7,050 7,050 8,398 8,398 Realised reserves 16,305 16,305 20,192 20,192 18,556 18,556 Unrealised reserves 1,764 1,764 10,232 10,232 (4,642) (4,642) Revenue reserve 907 907 1,445 1,445 1,095 1,095 ---------- ---------- ---------- ---------- ---------- ---------- Shareholders' funds 56,447 56,447 67,930 67,930 52,480 52,480 ========== ========== ========== ========== ========== ========== Net asset value per ordinary 101.84p 101.84p 125.38p 125.38p 94.68p 94.68p share (note 3) ========== ========== ========== ========== ========== ========== Funds attributable to the: Ordinary shares 56,447 67,930 52,480 Zero dividend preference shares in the subsidiary 32,974 30,475 31,710 ---------- ---------- ---------- 89,421 98,405 84,190 ========== ========== ========== Net asset value per: Ordinary share 101.84p 125.38p 94.68p Zero dividend preference share in the subsidiary 62.68p 57.93p 60.28p ---------- ---------- ---------- Unit 164.52p 183.31p 154.96p ========== ========== ========== - MORE - - 5 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2003 Group Cash Flow Statement for the half year ended 30 June 2003 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 30 June 2003 30 June 2002 31 December 2002 Â£'000 Â£'000 Â£'000 Net cash inflow from operating activities 3,081 2,791 5,370 Net cash outflow from servicing of finance (320) (543) (924) Net tax (paid)/recovered - (7) 133 Net cash inflow from financial investment 4,729 1,060 187 Equity dividends paid (2,744) (2,632) (5,345) --------- --------- ----------- Net cash inflow/(outflow) before financing 4,746 669 (579) Net cash (outflow) from financing (3,247) (1,511) (637) --------- ---------- ---------- Increase/(decrease) in cash 1,499 (842) (1,216) --------- ---------- ---------- Reconciliation of operating revenue to net cash inflow from operating activities Net revenue before interest payable and taxation 2,807 3,308 5,988 Decrease/(increase) in accrued income 345 (84) 52 (Increase)/decrease in other debtors (17) (5) 1 Increase/(decrease) in creditors 484 (16) (4) Scrip dividends - (165) (165) Tax deducted at source (12) - (7) Management fee charged to capital (526) (247) (495) --------- --------- -------- Net cash inflow from operating activities 3,081 2,791 5,370 --------- --------- -------- Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash 1,499 (842) (1,216) Net repayment of loans 3,247 2,981 3,518 Exchange movements (69) - (36) --------- ---------- ----------- Movement in net funds in the period 4,677 2,139 2,266 Net debt at the beginning of the period (18,941) (21,207) (21,207) --------- ---------- ----------- Net debt at the end of the period (14,264) (19,068) (18,641) --------- ---------- ----------- Represented by: Cash at bank and short term deposits 1,247 158 - Debt falling due within one year (15,511) (19,226) (18,941) --------- ---------- ----------- Total (14,264) (19,068) (18,941) --------- --------- --------- - MORE - - 6 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2003 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 Â£2,556,000 (30 June 2002: Â£2,993,000; 31 December 2002: Â£5,408,000) and on the 55,428,865 weighted average number of ordinary shares in issue throughout the period (30 June 2002: 53,433,009; 31 December 2002: 54,346,536). Capital gain per ordinary share is based on the net capital gains for the period of Â£4,155,000 (30 June 2002: net capital losses Â£1,690,000; 31 December 2002: net capital losses Â£18,200,000) and on the 55,428,865 weighted average number of ordinary shares in issue throughout the period (30 June 2002: 53,433,009; 31 December 2002: 54,346,536). 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 Â£1,264,000 (30 June 2002: Â£1,168,000; 31 December 2002: Â£2,403,000) based on the 52,603,865 zero dividend preference shares in issue (30 June 2002 and 31 December 2002: 52,603,865). c) Returns per unit Revenue return per unit, each unit consisting of one ordinary share of 5p in the Company and one zero dividend preference share of 50p in the subsidiary, amounts to 4.61p per unit (30 June 2002: 5.60p; 31 December 2002: 9.95p). Capital gain per unit, each unit consisting of one ordinary share of 5p in the Company and one zero dividend preference share of 50p in the subsidiary, amounts to 9.89p per unit (30 June 2002: (0.94)p; 31 December 2002: (28.92)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 Â£56,447,000 (30 June 2002: Â£67,930,000; 31 December 2002: Â£52,480,000) and on the 55,428,865 ordinary shares in issue at 30 June 2003 (30 June 2002: 54,178,865; 31 December 2002: 55,428,865). - MORE - - 7 - HENDERSON HIGH INCOME TRUST PLC Unaudited Interim Results for the half year ended 30 June 2003 Notes cont'd: 4. Net revenue The net revenue after taxation of the Company dealt with in the accounts of the Group was Â£2,652,000 (30 June 2002: Â£2,993,000; 31 December 2002: Â£5,408,000). 5. Dividends A first interim dividend of 2.475p (2002: 2.475p) was paid on 31 July 2003 on 55,428,865 shares, being the number of shares in issue at the record date of 20 June 2003. A second interim dividend of 2.475p (2002: 2.475p) has been declared payable on 31 October 2003 to shareholders registered at the close of business on 26 September 2003. Funds have been accrued in the accounts on 55,428,865 shares, being the number of shares in issue on 30 July 2003, the date of approval of these accounts. 6. Accounts for the year ended 31 December 2002 The figures and financial information for the year ended 31 December 2002 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 2003 Statement of Total Return for the half year ended 30 June 2003 (Unaudited) (Unaudited) (Audited) Half year ended 30 June 2003 Half year ended 30 June Year ended 31 December 2002 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Accrued redemption premium receivable from parent company (note 2) - 1,264 1,264 - 1,168 1,168 - 2,403 2,403 ---------- ---------- ---------- -------- --------- --------- --------- -------- ------- Gross revenue and capital gains - 1,264 1,264 - 1,168 1,168 - 2,403 2,403 Administrative expenses (note 3) - - - - - - - - - ---------- ---------- ---------- -------- --------- --------- --------- -------- ------- Net return on ordinary activities before taxation - 1,264 1,264 - 1,168 1,168 - 2,403 2,403 Taxation on net return on ordinary activities - - - - - - - - - ---------- ---------- ---------- -------- --------- --------- --------- -------- ------- Net return on ordinary activities after taxation - 1,264 1,264 - 1,168 1,168 - 2,403 2,403 Appropriations in respect of non-equity shares: zero dividend preference shares - (1,264) (1,264) - (1,168) (1,168) - (2,403) (2,403) ---------- ---------- ---------- -------- --------- --------- --------- -------- ------- Transfer to reserves - - - - - - - - - ---------- ---------- ---------- -------- --------- --------- --------- -------- ------- Return per share: - - - - - - - - - Ordinary ---------- ---------- ---------- -------- --------- --------- --------- -------- ------- Zero dividend preference (note 4 - 2.40p 2.40p - 2.22p 2.22p - 4.57p 4.57p ---------- ---------- ---------- -------- --------- --------- --------- -------- ------- 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 2003 Balance Sheet at 30 June 2003 (Unaudited) (Unaudited) (Audited) 30 June 30 June 31 December 2002 2003 2002 Â£'000 Â£'000 Â£'000 Current assets Debtors 32,974 30,475 31,710 ---------- ---------- ---------- Net current assets 32,974 30,475 31,710 ---------- ---------- ---------- Total net assets 32,974 30,475 31,710 ========== ========== ========== Capital and reserves Called-up share capital 26,302 26,302 26,302 Reserve for redemption premium 6,672 4,173 5,408 ---------- ---------- ---------- 32,974 30,475 31,710 ========== ========== ========== Shareholders' funds attributable to: Equity shareholders - - - Non-equity shareholders 32,974 30,475 31,710 ---------- ---------- ---------- 32,974 30,475 31,710 ========== ========== ========== Net asset value per: Ordinary share - - - ========== ========== ========== Zero dividend preference share (note 5) 62.68p 57.93p 60.28p ========== ========== ========== - MORE - - 10 - HENDERSON HIGH INCOME TRUST SECURITIES PLC Unaudited Interim Results for the half year ended 30 June 2003 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 Â£1,264,000 (30 June 2002: Â£1,168,000; 31 December 2002: Â£2,403,000) and on the 52,603,865 zero dividend preference shares in issue at 30 June 2003 (30 June 2002 and 31 December 2002: 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 Â£32,974,000 (30 June 2002: Â£30,475,000; 31 December 2002: Â£31,710,000) and on the 52,603,865 zero dividend preference shares in issue at 30 June 2003 (30 June 2002 and 31 December 2002: 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 2003 Notes cont'd: 8. Accounts for the period ended 31 December 2002 The figures and financial information for the period ended 31 December 2002 are extracted from the latest published 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 R DBLFXXDBLBBQ

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