Final Results

Henderson Smaller Cos Inv Tst PLC 17 July 2001 17 July 2001 THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2001 Extracts from the Chairman's Statement: Last year we warned shareholders of stockmarket volatility. Unfortunately my predictions proved correct. I share the disappointment that our valuations are now considerably lower than a year ago. Valuations overall have been considerably lower following the downturn in technology stocks, with the drop in our performance as much due to overvaluations last year as revaluations this. The essence of our philosophy is the emphasis on growth, not on technology as such. We differ from others in taking a long-term view and running our winners. The fundamentals of our approach have been reviewed, and we are convinced they remain sound. We will, however, be more ready to realise profits, especially when stocks enter the FTSE 100. Board membership During the year Sally Davis joined the board as a non-executive director, bringing us hands-on experience of three e-business disciplines - publishing, cable and telecoms. Our deputy chairman Eric Elstob will retire after the AGM. The trust has gained from the shrewd contribution he has made for more than 20 years and we shall miss him. Dividend The growth companies we invest in tend to retain the bulk of their earnings. Capital growth, not income, is our priority. In general we expect to pay only nominal dividends, and propose for this year a single and final dividend of 0.5p. -MORE- -2- THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2001 Share buy-backs We continue to monitor our discount. During the year we purchased 8.3m shares for cancellation at a favourable discount which increased value for shareholders. Prospects Top companies of the future exist today in embryo. We are excellently placed to find these quality growing businesses, but warn of continued volatility in individual stocks. This reflects the economic slowdown which is migrating across Europe from the US. The possibility of making outstanding investments in new generation companies has not disappeared, and our confidence that we will deliver strong returns for our investors over the long term remains undiminished. P H G Cadbury Chairman 16 July 2001 -MORE- -3- THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2001 Group Statement of Total Return (incorporating the consolidated revenue account) Year Year ended 31 May 2001 ended 31 May 2000 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital (losses)/ - (162,352) (162,352) - 187,318 187,318 gains from investments Income from fixed asset 4,506 - 4,506 5,630 - 5,630 investments Other interest receivable 926 - 926 1,589 - 1,589 and similar income -------- -------- -------- -------- -------- -------- Gross revenue and capital 5,432 (162,352) (156,920) 7,219 187,318 194,537 (losses)/gains Management fee (3,022) - (3,022) (2,400) - (2,400) Other administrative (344) - (344) (405) - (405) expenses Irrecoverable VAT (512) - (512) (248) - (248) -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before interest payable 1,554 (162,352) (160,798) 4,166 187,318 191,484 and taxation Interest payable (2,123) - (2,123) (2,177) - (2,177) -------- -------- -------- -------- -------- -------- Net (loss)/return on ordinary activities before taxation (569) (162,352) (162,921) 1,989 187,318 189,307 Taxation on net return on - - - (30) - (30) ordinary activities -------- -------- -------- -------- -------- -------- Net (loss)/return on ordinary activities after taxation (569) (162,352) (162,921) 1,959 187,318 189,277 -------- -------- -------- -------- -------- -------- Dividends - ordinary shares (note 3) Interim: nil (2000: nil) - - - - - - Final: 0.50p (2000: 0.50p) (810) - (810) (725) - (725) -------- -------- -------- -------- -------- -------- (810) - (810) (725) - (725) -------- -------- -------- -------- -------- -------- Transfer (from)/to (1,379) (162,352) (163,731) 1,234 187,318 188,552 reserves ===== ===== ===== ===== ===== ===== (Loss)/return per ordinary share (note 1) (0.34)p (95.91)p (96.25)p 1.14p 108.80p 109.94p ===== ===== ===== ===== ===== ===== The revenue columns of this statement represent the consolidated revenue accounts of the Group (note 4). - MORE - -4- THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2001 Balance Sheets Group Group Company Company 2001 2000 2001 2000 £'000 £'000 £'000 £'000 Fixed asset investments Listed investments at market value: United Kingdom 518,103 663,334 518,103 663,334 Overseas - 2,705 - 2,705 ------- ------- ------- ------- 518,103 666,039 518,103 666,039 AIM investments at market value 30,036 40,825 30,036 40,825 Unquoted investments at directors' valuation 2,250 5,100 2,250 5,100 Subsidiary undertaking - - 3,960 4,619 ------- ------- ------- ------- 550,389 711,964 554,349 716,583 ------- ------- ------- ------- Current assets Debtors 1,370 6,730 2,066 6,725 Cash at bank and short term deposits 16,876 32,654 15,785 31,623 ------- ------- ------- ------- 18,246 39,384 17,851 38,348 Creditors: amounts falling due within one year (15,434) (9,378)(18,999)(12,961) ------- ------- ------- ------- Net current assets/(liabilities) 2,812 30,006 (1,148) 25,387 ------- ------- ------- ------- Total assets less current liabilities 553,201 741,970 553,201 741,970 Creditors: amounts falling due after more than (20,000)(20,000)(20,000)(20,000) one year ------- ------- ------- ------- Total net assets 533,201 721,970 533,201 721,970 ===== ===== ===== ===== Capital and reserves Called up share capital 40,531 42,602 40,531 42,602 Other capital reserves 487,028 672,347 490,988 676,967 Revenue reserve 5,642 7,021 1,682 2,401 ------- ------- ------- ------- Shareholders' funds (including non-equity interests of £9,000; 2000: £9,000) 533,201 721,970 533,201 721,970 ===== ===== ===== ===== Net asset value per ordinary share 328.9p 423.8p 328.9p 423.8p ===== ===== ===== ===== -MORE- -5- THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2001 Group Cash Flow Statement 2001 2001 2000 2000 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 1,284 4,271 Servicing of finance Debenture interest paid (3,150) (2,100) Bank overdraft and loan interest paid (23) (76) -------- -------- Net cash outflow from servicing of finance (3,173) (2,176) Taxation UK tax recovered 10 55 Overseas tax recovered 33 155 -------- -------- Net tax recovered 43 210 Financial investment Purchases of investments (117,448) (344,395) Sales of investments 129,405 385,384 -------- -------- Net cash inflow from financial investment 11,957 40,989 Equity dividends paid (852) (4,234) Management of liquid resources Cash withdrawn from/(placed on) deposit 10,000 (10,000) Financing Purchase of ordinary shares (25,038) (21,589) -------- -------- (Decrease)/increase in cash (5,779) 7,471 ===== ===== Reconciliation of net cash flow to movements in net (debt)/funds (Decrease)/increase in cash as above (5,779) 7,471 Cash (inflow)/outflow from management of liquid (10,000) 10,000 resources -------- -------- Change in net (debt)/funds resulting from cash (15,779) 17,471 flows Exchange movements 1 (320) -------- -------- Movement in net funds in the year (15,778) 17,151 Net funds/(debt) as at 1 June 12,654 (4,497) -------- -------- Net (debt)/funds at 31 May (3,124) 12,654 ===== ===== -MORE- -6- THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2001 Notes: 1. (Loss)/return per ordinary share Capital (loss)/return per ordinary share is based on net capital losses for the year of £162,352,000 (2000: net capital gains of £187,318,000) and on the weighted average number of ordinary shares in issue during the year of 169,276,109 (2000: 172,168,289). Revenue (loss)/return per ordinary share is based on the losses attributable to the ordinary shares of £569,000 (2000: earnings of £1,959,000) and on the weighted average number of ordinary shares in issue during the year of 169,276,109 (2000: 172,168,289). 2. Issued Share Capital There were 162,089,094 shares of 25p in issue at 31 May 2001 (31 May 2000: 170,371,070). 3. Dividend The recommended final dividend of 0.5p per ordinary share, subject to approval at the Annual General Meeting, will be paid on 1 October 2001 to shareholders on the register at the close of business on 7 September 2001. The dividend paid in respect of the year ended 31 May 2000, at 0.5p per ordinary share, amounted to £852,000. The buy-backs of the Company's ordinary shares, after 31 May 1999 but before the record date of the final dividend for the year ended on that date, resulted in a write-back of £127,000 for dividends accrued in the year ended 31 May 1999 but not in the event payable. The £725,000 shown is the sum of these two figures. 4. Basis of consolidation The Group accounts consolidate the accounts of the Company and its wholly owned subsidiary undertaking, Henderson Smaller Companies Finance Limited. 5. Loss of investment company status A technical consequence of the Company's share buy-backs is that the Company ceased in July 1999 to be an investment company within the meaning of section 266 of the Companies Act 1985. However, it continued to conduct its affairs as an investment trust for taxation purposes under section 842 of the Income and Corporation Taxes Act 1988, and the Articles of Association of the Company prohibit capital profits from being distributed by way of dividend. As such the directors consider it necessary to continue to present the accounts in accordance with the Statement of Recommended Practice Financial Statements of Investment Trust Companies (the 'SORP'). Under the SORP, the financial performance of the Group is presented in a statement of total return in which the revenue column is the profit and loss account of the Group. The revenue column excludes net losses on disposals of investments, calculated by reference to their previous carrying amount of £6,485,000 - MORE - - 7 - THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC Unaudited Preliminary Group Results for the year ended 31 May 2001 (2000: net profit of £107,567,000). Since the Company was not an investment company, the Companies Act and/or FRS 3 would ordinarily require this amount to be included in the profit and loss account. In the opinion of the directors the inclusion of this item in the profit and loss account would be misleading because it would obscure and distort both the revenue and capital performance of the Group, and would not show clearly the revenue profits emerging to be distributable by way of dividend. The directors therefore consider that these departures from the specific provisions of Schedule 4 of the Companies Act relating to the form and content of accounts for companies other than investment companies and these departures from accounting standards are necessary to give a true and fair view. The departures have no effect on total return or on the balance sheet. In September 2000 the Company's Articles of Association were amended to reflect the changes made in November 1999 to the Companies Act 1985 and in October 2000 the Company gave notice of its intention to carry on business as an investment company within the meaning of section 266 of the Act. 6. 2001 Accounts The preliminary figures for the year ended 31 May 2001 are an extract from the Group's accounts for that year. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 7. 2000 Accounts The figures and financial information for the year ended 31 May 2000 are an extract of the latest published accounts and do not constitute the statutory accounts for that year. These 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. 8. Annual General Meeting The full annual report and accounts will be posted to shareholders in late August 2001 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 Friday 28 September 2001 at 10.00am. - ENDS - For further information please contact : John Alexander The Henderson Smaller Companies Investment Trust plc Telephone: 020 7818 4340 Andrew Stack The Henderson Smaller Companies Investment Trust plc Telephone: 020 7818 4351 Vicki Staveacre Henderson Press Office Telephone: 020 7818 4222

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