Final Results

Henderson Strata Investments PLC 11 December 2000 HENDERSON GLOBAL INVESTORS HENDERSON STRATA INVESTMENTS PLC EMBARGOED FOR RELEASE AT 7.00 AM ON MONDAY 11 DECEMBER 2000 8 DECEMBER 2000 HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 Highlights * Significant outperformance of the FTSE SmallCap Index + Net asset value per share up 42.8% + FTSE SmallCap Index (excluding investment companies) up 28.5% - Introduction of a performance fee and reduction in the base fee Extracts from the Chairman's Statement: Net Assets I am pleased to report that the net asset value per share rose 42.8% in the twelve months ended October 2000. The FTSE SmallCap Index (excluding investment companies) was ahead 24.7% in the same period. Including income this figure rose 28.5%. Review The net asset value has fallen in the second half of our year as profit taking in September and October diluted the gains achieved during the summer months. Share prices have been on a roller coaster for most of the year with technology companies the most volatile. The first suggestion of slowing profits in the technology area led to the more recent weakness. Many share prices had risen to levels that would be unsustainable in any economic slowdown. The weak Euro contributed to the general unease, as did the oil price which surged above $30 per barrel. The rise in interest rates throughout the year has gradually reined in economic growth. Profit projections have been reduced as a result but the prospect of rates being at a peak should provide support for equity prices. - MORE - -2- HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 Portfolio The weighting in technology-related companies remains high at just over 50%. They are a key part of the growth focus of the portfolio. The emphasis has moved more towards intellectual property and several new companies have been added to the UK portfolio which specialise in designing and developing new products which are then licensed. Gearing Borrowings have fluctuated over the year, rising to just under £20 million at the end of October as we took the opportunity to invest in some particularly interesting new issues. Subsequent activity has reduced borrowings to just under £13 million. Dividend The emphasis on growth investments means that your directors are again not able to recommend the payment of a dividend. Performance Fee Your Board has been discussing the question of a performance fee. We have agreed to introduce an incentive for the managers while at the same time benefiting from a reduction in the basic fee. Details are given below. Outlook The net asset value has risen by over 40% in each of the last two years. Such progress is unlikely to be maintained, particularly in view of the high ratings accorded to many stocks. While this year may be more subdued, it is small companies which are leading the change in the way business is done. Many are already producing good growth in revenue and profits and during a more uncertain period for share prices rising earnings will be a positive influence. Good stock selection should give reasonable returns in the year ahead. Frans ten Bos Chairman - MORE - - 3 - HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 Revised Fee Arrangements The base fee, currently 1% per annum of average funds under management, is reduced to 0.85% on the first £200 million, 0.6% on the next £100 million and 0.4% thereafter. The two year rolling average basis of calculation remains. In addition, a performance fee is introduced. This is calculated as 10% of the amount by which the total net assets outperform the benchmark index, plus a hurdle of 2%, over the relevant accounting year. The benchmark index is the FTSE SmallCap Index (excluding investment companies) on a total return basis. There is a cap on the aggregate fees payable of 1.5% of total net assets (measured as the average of the total net assets at the start and end of the relevant accounting year). There will be a high water mark at the start of subsequent accounting years. No performance fee will be payable if the net asset value per share falls by more than 10% over the relevant accounting year. The changes apply with effect from 1 November 2000. The structure is subject to review after three years. - 4 - HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 Statement of Total Return (incorporating the revenue account) for the year ended 31 October 2000 Year ended 31 October Year ended 31 October 2000 1999 (unaudited) (restated*) Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains on - 55,857 55,857 - 39,460 39,460 investments Income from fixed asset 943 - 943 893 - 893 investments Other interest receivable and 125 - 125 124 - 124 similar income ---------- ---------- ---------- ---------- ---- Gross revenue and capital gains 1,068 55,857 56,925 1,017 39,460 40,477 Management fee (1,873) - (1,873) (1,125) - (1,125) Other administrative expenses (208) - (208) (188) - (188) ---------- ---------- ---------- ---------- ---- Net (loss)/return on ordinary activities before interest payable and (1,013) 55,857 54,844 (296) 39,460 39,164 taxation Interest payable (1,003) - (1,003) (28) - (28) ---------- ---------- ---------- ---------- ---- Net (loss)/return on ordinary activities before taxation (2,016) 55,857 53,841 (324) 39,460 39,136 Taxation on net loss on (38) - (38) (36) - (36) ordinary activities ---------- ---------- ---------- ---------- ---- Net (loss)/return on ordinary activities after taxation (2,054) 55,857 53,803 (360) 39,460 39,100 Dividends - nil - - - - - - ---------- ---------- ---------- ---------- ---- Transfer (from)/to reserves (2,054) 55,857 53,803 (360) 39,460 39,100 ===== ====== ====== ===== ====== ====== (Loss)/return per ordinary (11.69p) 317.87p 306.18p (2.05p) 224.56p 222.51p share (note 1) ===== ====== ====== ===== ====== ====== The revenue columns of this statement represent the revenue accounts of the Company. * Restated for the change in accounting policy (see note 3) - MORE - - 5 - HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 Balance Sheet at 31 October 2000 31 October 31 October 2000 1999 (unaudited) £'000 £'000 Fixed asset investments Listed in the United Kingdom 114,337 84,886 Quoted on the Alternative Investment Market 7,711 2,509 ('AIM') Listed abroad 75,224 40,987 Unlisted at the directors' valuation 261 253 -------------- -------------- 197,533 128,635 -------------- -------------- Current assets Debtors 947 1,127 Cash at bank 965 1,472 -------------- -------------- 1,912 2,599 Creditors: amounts falling due within one year (19,946) (5,538) -------------- -------------- Net current liabilities (18,034) (2,939) -------------- -------------- Total net assets 179,499 125,696 ======== ======== Capital and reserves Issued share capital 4,393 4,393 Other capital reserves Share premium account 15,937 15,937 Realised profits 85,052 46,061 Unrealised profits 76,261 59,395 Revenue reserve (2,144) (90) -------------- -------------- Equity shareholders' funds 179,499 125,696 ======== ======== Net asset value per ordinary share 1,021.49p 715.31p ======== ======== - MORE - - 6 - HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 Cash Flow Statement for the year ended 31 October 2000 2000 2000 1999 1999 £'000 £'000 £'000 £'000 Net cash outflow from operating (1,251) (46) activities Servicing of finance Interest paid (993) (25) ------------ ------------ Net cash outflow from servicing of (993) (25) finance Taxation Income tax received 5 29 Withholding tax recovered 12 23 ------------ ------------ Net tax recovered 17 52 Financial investment Purchase of investments (101,400) (36,923) Sale of investments 87,901 32,728 ------------ ------------ Net cash outflow from financial (13,499) (4,195) investment Financing Net loans drawn down 15,611 3,500 ------------ ------------ Net cash inflow from financing 15,611 3,500 ------------ --------- Decrease in cash (115) (714) ======= ======= Reconciliation of net cash flow to movement in net debt Decrease in cash as above (115) (714) Cash inflow from financing (15,611) (3,500) Exchange movements (392) (5) ------------ --------- Movement in net debt (16,118) (4,219) Net (debt)/funds at 1 November (2,028) 2,191 ------------ --------- Net debt at 31 October (18,146) (2,028) ======= ======= - MORE - - 7 - HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 Notes : 1. (Loss)/return per ordinary share The revenue loss per ordinary share is based on the net loss on ordinary activities after taxation of £2,054,000 (1999: £360,000) and on the number of ordinary shares of 25p each in issue throughout the year of 17,572,350 (1999: 17,572,350). The capital return per ordinary share is based on net capital gains for the year of £55,857,000 (1999: £39,460,000) and on the number of ordinary shares of 25p each in issue throughout the year, as stated above. 2. Issued Share Capital The number of ordinary shares of 25p each in issue at 31 October 2000 and 31 October 1999 was 17,572,350. 3. Change of Accounting Policy The Company has adopted Financial Reporting Standard (FRS) 16 'Current Tax' under which dividend income should be accounted for net of the attributable tax credits. The comparative figures for the year ended 31 October 1999 have been restated accordingly. The effect of this change is that net return on ordinary activities before taxation is reduced by £74,000 (1999: £83,000). However, there is no effect on the revenue or capital returns per share, nor on the net asset value per share. 4. Dividend No dividend has been declared in respect of the year. 5. 2000 Accounts The preliminary figures for the year ended 31 October 2000 are an extract from the Company's latest accounts for that period. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 6. 1999 Accounts The figures and financial information for the year ended 31 October 1999 are an extract from the latest published accounts of the Company 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 contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. - MORE - - 8 - HENDERSON STRATA INVESTMENTS PLC Unaudited Preliminary Results for the year ended 31 October 2000 7. Annual Report and Annual General Meeting The full annual report and accounts will be posted to shareholders in late December 2000 and copies will be available thereafter from the Secretary at the Company's Registered Office, 4 Broadgate, London EC2M 2DA. The Annual General Meeting will be held on Thursday 8 February 2001 at 2.30 pm. - ENDS - For further information please contact: Frans ten Bos Henderson Strata Investments plc Richard Smith Henderson Strata Investments plc Stephen Westwood Henderson Global Investors Vicki Staveacre Henderson Press Office Telephone: 020 7410 4222

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