Interim Results
Henderson Strata Investments PLC
21 June 2005
HENDERSON GLOBAL INVESTORS
HENDERSON STRATA INVESTMENTS PLC
21 June 2005
HENDERSON STRATA INVESTMENTS PLC
Unaudited Interim Results for the half year ended 30 April 2005
Highlights:
• Share price up 19.1% over the half year
• Realignment to UK micro cap portfolio completed
• Investment outlook favourable
'I am delighted to report on the progress that we have made. Our share price
rose strongly in the half year under review. Our change of investment policy
was approved at the AGM on 10 February and the portfolio was realigned, within
the subsequent four month period as planned, to its new focus on UK micro cap
companies. Since the AGM the portfolio has outperformed its new benchmark.'
George Burnett, Chairman
For further information, please contact:
George Burnett or James de Sausmarez
Chairman Head of Investment Trusts
Henderson Strata Investments plc Henderson Global Investors
Telephone: 01372 362300 Telephone: 020 7818 3349
or
Colin Hughes or Sarah Gibbons-Cook
Fund Manager Investor Relations and PR Manager
Henderson Strata Investments plc Henderson Global Investors
Telephone: 020 7818 5714 Telephone: 020 7818 3198
Page 2 of 6
HENDERSON STRATA INVESTMENTS PLC
Unaudited interim results for the half year ended 30 April 2005
Review of activity in the half year
The net asset value per share rose by 8.7% in the six months ended 30 April 2005
and the share price by 19.1%. Over the same period the FTSE SmallCap (excluding
investment companies) Index also returned 8.7% and the FTSE Fledgling (excluding
investment companies) Index returned 9.3%. The FTSE All-Share Index returned
6.1%. These figures include income.
The proposals set out in the Board's circular to shareholders of 22 December
2004 were well received by the shareholders and by the market generally. On 28
January 2005 4,583,255 shares were bought back by the Company under the Tender
Offer and Matching Facility. This reduced the issued share capital by 26.8%.
At the AGM on 10 February 2005 the continuation of the Company was approved and
the change of investment policy was thereby confirmed.
Most of the changes to the portfolio, necessary to match our new objective of
investing in UK micro cap companies, had been made by 30 April 2005. The
realignment was completed early this month with the realisation of the remaining
holdings in FTSE 250 companies.
The discount
The Board is committed, as far as practicable, to maintaining the discount to
net asset value at which the Company's shares trade at close to the 8% level at
which the Tender Offer was made in January. To this end we have maintained an
active buy-back programme. A total of 317,000 shares were bought back between
the Tender Offer and the half-year end and a further 721,246 have been bought
back since. Of these, 904,246 are held in Treasury; in due course they will
either be issued at a premium or cancelled.
Board changes
Stephen Burley retired from the Board at the AGM on 10 February 2005 and Edward
Whitley will do so on 30 June 2005. We are grateful to them both for their long
and loyal service to Strata. We shall miss especially the insight that Stephen
brought as an experienced professional investor and the wide knowledge of world
markets that Edward shared.
I am delighted to welcome Malcolm King to the board. Max, as he is known, has
very broad experience in fund management, not least of investment in UK smaller
companies, and works currently at Investec Asset Management.
Market review and outlook
The markets produced positive returns in the six months to 30 April 2005 and the
general growth in confidence has been a helpful background to us as an investor
in smaller companies, particularly in our period of transition. However, after
a steady rise, the markets turned downwards in mid-March and share prices at the
small cap end have not yet fully recovered. Between 10 February 2005 and 17
June 2005 our net asset value per share fell by 2.8%, compared with a fall in
the FTSE Fledgling (excluding investment companies) Index - our new benchmark -
of 5.9%.
The UK economy has slowed in recent months and the market, particularly the
smaller companies area, has seen a modest setback. Our fund manager, Colin
Hughes, believes that this presents a long-term buying opportunity and he has
identified a number of potential investments at attractive valuations. The many
companies coming to the market for the first time vary in quality but there are
interesting opportunities amongst them. Sensible valuations, and the likelihood
of a continued good rate of earnings growth, make the outlook favourable
overall.
Page 3 of 6
HENDERSON STRATA INVESTMENTS PLC
Unaudited interim results for the half year ended 30 April 2005
Statement of Total Return (incorporating the revenue account)
for the half year ended 30 April 2005
(unaudited) (unaudited) (audited)
Half year ended Half year ended Year ended
30 April 2005 30 April 2004 31 October 2004
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital gains
from investments - 5,562 5,562 - 5,268 5,268 - 4,577 4,577
Income from fixed asset
investments 563 - 563 560 - 560 1,495 - 1,495
Other interest receivable and
similar income 68 - 68 18 - 18 39 - 39
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Gross revenue and capital
gains 631 5,562 6,193 578 5,268 5,846 1,534 4,577 6,111
Management fee (363) - (363) (303) - (303) (639) - (639)
Other administrative (109) - (109) (107) - (107) (208) - (208)
expenses
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Net return on ordinary
activities before
interest
payable and taxation 159 5,562 5,721 168 5,268 5,436 687 4,577 5,264
Interest payable (9) - (9) (39) - (39) (47) - (47)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Net return on ordinary
activities before
taxation 150 5,562 5,712 129 5,268 5,397 640 4,577 5,217
Taxation on net return
on ordinary
activities (4) - (4) (20) - (20) (57) - (57)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Net return on ordinary
activities after
taxation 146 5,562 5,708 109 5,268 5,377 583 4,577 5,160
Dividends - nil - - - - - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Transfer to reserves 146 5,562 5,708 109 5,268 5,377 583 4,577 5,160
====== ====== ====== ====== ====== ====== ====== ====== ======
Return per ordinary
share 0.99p 37.86p 38.85p 0.64p 30.76p 31.40p 3.41p 26.75p 30.16p
The revenue columns of this statement represent the revenue accounts of the
Company.
Page 4 of 6
HENDERSON STRATA INVESTMENTS PLC
Unaudited interim results for the half year ended 30 April 2005
Balance Sheet
at 30 April 2005
(unaudited) (unaudited) (audited)
30 April 2005 30 April 2004 31 October 2004
£000 £000 £000
Fixed asset investments
Investments at market value 62,017 79,340 81,599
---------- ---------- ----------
Current assets
Debtors 941 553 1,236
Cash at bank 1,569 1,852 380
---------- ---------- ----------
2,510 2,405 1,616
Creditors: amounts falling due within one
year (1,778) (649) (2,336)
---------- ---------- ----------
Net current assets/(liabilities) 732 1,756 (720)
---------- ---------- ----------
Total net assets 62,749 81,096 80,879
====== ====== ======
Capital and reserves
Called-up share capital 3,119 4,276 4,276
Share premium account 16,479 16,479 16,479
Capital redemption reserve 1,287 130 130
Capital reserve - realised 39,421 57,142 57,774
Capital reserve - unrealised 5,008 6,254 4,931
Revenue reserve (2,565) (3,185) (2,711)
---------- ---------- ----------
Equity shareholders' funds 62,749 81,096 80,879
====== ====== ======
Net asset value per ordinary share 514.28p 474.20p 472.93p
Page 5 of 6
HENDERSON STRATA INVESTMENTS PLC
Unaudited interim results for the half year ended 30 April 2005
Cash Flow Statement
for the half year ended 30 April 2005
(unaudited) (unaudited) (audited)
Half year ended Half year ended Year ended
30 April 2005 30 April 2004 31 October 2004
£'000 £'000 £'000
Net cash inflow from operating activities 109 194 751
Net cash outflow from servicing of finance (5) (43) (47)
Net tax recovered 9 10 17
Net cash inflow/(outflow) from
financial investment 24,862 1,339 (725)
---------- ---------- ----------
Net cash inflow/(outflow) before financing 24,975 1,500 (4)
Net cash outflow from financing (23,838) (283) (283)
---------- ---------- ----------
Increase/(decrease) in cash 1,137 1,217 (287)
====== ====== ======
Reconciliation of operating revenue to net cash
inflow from operating activities
Net revenue return before interest payable and
taxation 159 168 687
Increase in accrued income (38) (109) (39)
Decrease/(increase) in other debtors and 32 9 (7)
prepayments
(Decrease)/increase in other creditors (38) 149 188
Tax on unfranked investment income deducted at (6) (23) (72)
source
Scrip dividends included in investment income - - (6)
---------- ---------- ----------
Net cash inflow from operating activities 109 194 751
====== ====== ======
Reconciliation of net cash flow to movement in net
funds
Increase/(decrease) in cash as above 1,137 1,217 (287)
Exchange movements 52 (30) 2
---------- ---------- ----------
Movement in net funds 1,189 1,187 (285)
Net funds at the start of the period 380 665 665
---------- ---------- ----------
Net funds at the end of the period 1,569 1,852 380
====== ====== ======
Represented by:
Cash at bank and short term deposits 1,569 1,852 380
====== ====== ======
Page 6 of 6
HENDERSON STRATA INVESTMENTS PLC
Unaudited interim results for the half year ended 30 April 2005
Notes
1. Issued share capital
There were 12,474,260 ordinary shares of 25p each in issue at 30 April 2005 (30 April 2004: 17,101,515; 31
October 2004: 17,101,515), including 273,000 shares held in Treasury either for reissue to the market or
for cancellation at a future date (30 April 2004 and 31 October 2004: nil).
During the half year ended 30 April 2005 the Company bought back for cancellation a net total of 4,583,255
of its own issued shares at a price of 475.87p, under the terms of the Tender Offer and Matching Facility
as set out in the circular to shareholders dated 22 December 2004. A further 44,000 ordinary shares were
bought back in the market for cancellation (half year ended 30 April 2004: 85,000; year ended 31 October
2004: 85,000).
In the period from 10 February 2005 to 30 April 2005 the Company bought back a further 273,000 of its
shares to hold in Treasury.
2. Return per ordinary share
The revenue return per ordinary share is based on the net return on ordinary activities after taxation of
£146,000 (half year ended 30 April 2004: £109,000; year ended 31 October 2004: £583,000) and on the
weighted average number of 14,690,628 ordinary shares of 25p each in issue during the period (half year
ended 30 April 2004: 17,123,466; year ended 31 October 2004: 17,112,430), and for this purpose shares
bought and held in Treasury are treated as having been cancelled.
The capital return per ordinary share is based on the net capital gains of £5,562,000 (half year ended 30
April 2004: £5,268,000; year ended 31 October 2004: £4,577,000) and on the weighted average number of
shares in issue during the period, as stated above.
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
£62,749,000 (30 April 2004: £81,096,000; 31 October 2004: £80,879,000) and on the 12,201,260* ordinary
shares of 25p each in issue at 30 April 2005 (30 April 2004 and 31 October 2004: 17,101,515).
* The number of shares in issue has been adjusted for the shares held in Treasury which, for this purpose,
are treated as not being in issue.
4. Accounts for the year ended 31 October 2004
The figures and financial information for the year ended 31 October 2004 are extracted 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.
5. Interim Report
The interim report will be sent to shareholders early in July 2005 and copies will be available from the
Company's registered office: 4 Broadgate, London EC2M 2DA.
- ENDS -
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