Final Results
Henderson Smaller Cos Inv Tst PLC
12 July 2004
12 July 2004
THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2004
KEY POINTS
• Strong absolute and relative performance*
• NAV total return 41.7%
• Benchmark total return 32.5%
• Dividend doubled to 1p per share
• Confidence in the outlook for UK smaller companies and in the ability of
the Trust to outperform
*source: Datastream
Extracts from the Chairman's Statement:
Your Company has had an extraordinarily good year. The asset value has increased
by 42% a share, on a total return basis. By comparison our benchmark index
increased by 33%, itself a much stronger return than that achieved by the UK
equity markets as a whole. This reflects a general revival of interest in
smaller companies but also a specific excellence in your investment trust's
team. I hope you share our confidence in our new fund managers' abilities,
characterised as they are by discipline and diligence. The gearing provided by
our debenture stock has contributed to these results. We have also made some use
of our short-term borrowing facility and, subject to regular review by the
board, we will continue to do so.
Revenue and Dividend
The revenue account has been much stronger this year. Net income before interest
payable rose by almost a half, mainly because the portfolio is earning higher
dividends but also because the management fee and other costs were lower. We
propose a single and final dividend for the year of 1p per share. This is twice
the amount paid last year but is fully covered. Whilst we will always pay due
regard to investment income, capital growth remains our priority. We shall
maintain the discipline of allocating all the costs, including interest payable,
against revenue. Our largest variable item of expense, the management fee, is
calculated by reference to the value of our investments. Therefore our ability
to distribute earnings in future may be constrained, if the capital value of the
portfolio grows more strongly than its income yield: but that, of course, would
be no bad thing.
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THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2004
Extracts from the Chairman's Statement (continued)
Share Buy-Backs
For much of the past year there was a lively interest in the Company's shares
from new investors. The discount to net asset value at which our shares traded
was, therefore, relatively low. For a little over a year we did not buy back any
shares. In recent months, however, the discount has tended to widen, in common
with those of other investment trust companies. During the final quarter of our
accounting year we purchased some two million shares for cancellation. This
represented about 2% of those in issue at 31 May 2003. Since the year end we
have bought back a further two million shares. We shall seek to renew the
Company's authority to buy back its own shares at the forthcoming annual general
meeting.
Our Continuation Vote
The performance of this past year is unlikely to be repeated in the immediate
future. Nevertheless, there will be plenty of opportunity to buy excellent
smaller companies and for our first-class management to add relative value. Neil
Hermon and Theresa Wat, our fund management team, have established an enviable
record and the Board has every confidence in their skills and commitment.
Therefore we have no hesitation in recommending shareholders to vote for this
116 year old Company to continue in business as an investment trust, as the
directors themselves intend to do, at the forthcoming annual general meeting.
J Dudley Fishburn
9 July 2004
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THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2004
Group Statement of Total Return (incorporating the consolidated revenue account)
Year ended 31 May 2004 Year ended 31
May 2003
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital - 57,939 57,939 - (85,899) (85,899)
gains/(losses)
from
investments
Income from 4,732 - 4,732 4,042 - 4,042
fixed asset
investments
Other interest 110 - 110 98 - 98
receivable and
similar income
------------- ------------- ------------- ------------- ------------- -------------
Gross revenue 4,842 57,939 62,781 4,140 (85,899) (81,759)
and capital
gains/(losses)
Management fee (893) - (893) (1,248) - (1,248)
Other (334) - (334) (440) - (440)
administrative
expenses
------------- ------------- ------------- ------------- ------------- -------------
Net
return/(loss)
on ordinary
activities
before 3,615 57,939 61,554 2,452 (85,899) (83,447)
interest
payable and
taxation
Interest (2,244) - (2,244) (2,208) - (2,208)
payable
------------- ------------- ------------- ------------- ------------- -------------
Net
return/(loss)
on ordinary
activities
before 1,371 57,939 59,310 244 (85,899) (85,655)
taxation
Taxation on - - - 1 - 1
net return on
ordinary
activities
------------- ------------- ------------- ------------- ------------- -------------
Net
return/(loss)
on ordinary
activities
after taxation 1,371 57,939 59,310 245 (85,899) (85,654)
------------- ------------- ------------- ------------- ------------- -------------
Dividends -
ordinary
shares (note 3)
Final: 1.00p (1,148) - (1,148) (561) - (561)
(2003: 0.50p)
------------- ------------- ------------- ------------- ------------- -------------
Transfer 223 57,939 58,162 (316) (85,899) (86,215)
to/(from)
reserves
======= ======= ======= ======= ======= =======
Return/(loss) 1.17p 49.65p 50.82p 0.20p (69.35)p (69.15)p
per ordinary
share (note 1)
======= ======= ======= ======= ======= =======
The revenue columns of this statement represent the consolidated profit and loss accounts of the Group.
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THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2004
Balance Sheets Group Group Company Company
2004 2003 2004 2003
£'000 £'000 £'000 £'000
Fixed asset investments
Listed investments at market value 209,469 153,434 209,469 153,434
AIM investments at market value 16,876 7,368 16,876 7,368
Unquoted investments at directors' valuation 324 896 324 896
Subsidiary undertaking - - 2,270 2,271
------------- ------------- ------------- -------------
226,669 161,698 228,939 163,969
------------- ------------- ------------- -------------
Current assets
Debtors 1,406 1,571 1,406 1,571
Cash at bank and short term deposits 488 2,719 488 2,718
------------- ------------- ------------- -------------
1,894 4,290 1,894 4,289
Creditors: amounts falling due within one year (11,020) (3,498) (13,290) (5,768)
------------- ------------- ------------- -------------
Net current (liabilities)/assets (9,126) 792 (11,396) (1,479)
------------- ------------- ------------- -------------
Total assets less current liabilities 217,543 162,490 217,543 162,490
Creditors: amounts falling due after more than (20,000) (20,000) (20,000) (20,000)
one year
------------- ------------- ------------- -------------
Total net assets 197,543 142,490 197,543 142,490
======== ======== ======== ========
Capital and reserves
Called-up share capital 28,700 29,248 28,700 29,248
Capital redemption reserve 16,725 16,177 16,725 16,177
Other capital reserves 148,404 93,574 150,674 95,845
Revenue reserve 3,714 3,491 1,444 1,220
------------- ------------- ------------- -------------
Shareholders' funds (including non-equity
interests of £9,000; 2003: £9,000) 197,543 142,490 197,543 142,490
======== ======== ======== ========
Net asset value per ordinary share 172.1p 121.8p 172.1p 121.8p
======== ======== ======== ========
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THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2004
Group Cash Flow Statement 2004 2004 2003 2003
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 3,256 2,797
Servicing of finance
Debenture interest paid (2,100) (1,050)
Bank overdraft and loan interest paid (157) (111)
------------- -------------
Net cash outflow from servicing of finance (2,257) (1,161)
Taxation
UK tax recovered - 4
Overseas tax recovered - 1
------------- -------------
Net tax recovered - 5
Financial investment
Purchases of investments (70,843) (69,041)
Sales of investments 63,807 96,294
------------- -------------
Net cash (outflow)/inflow from financial (7,036) 27,253
investment
Equity dividends paid (585) (656)
Financing
Purchase of own shares (3,109) (17,560)
Drawdown/(repayment) of loans 7,500 (8,000)
------------- -------------
Net cash inflow/(outflow) from financing 4,391 (25,560)
------------- -------------
(Decrease)/increase in cash (2,231) 2,678
======== ========
Reconciliation of net cash flow to movements in net debt
(Decrease)/increase in cash as above (2,231) 2,678
Cash (inflow)/outflow from debt financing (7,500) 8,000
------------- -------------
Change in net debt resulting from cash flows (9,731) 10,678
Exchange movements - 1
------------- -------------
Movement in net debt in the year (9,731) 10,679
Net debt at 1 June (17,281) (27,960)
------------- -------------
Net debt at 31 May (27,012) (17,281)
======== ========
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THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2004
Notes:
1. Return per ordinary share
The revenue return per ordinary share is based on the earnings
attributable to the ordinary shares of £1,371,000 (2003: £245,000) and
on the weighted average number of ordinary shares in issue during the
year of 116,695,187 (2003: 123,856,800).
The capital return per ordinary share is based on the net capital gains
for the year of £57,939,000 (2003: losses of £85,899,000) and on the
weighted average number of ordinary shares in issue during the year of
116,695,187 (2003: 123,856,800).
2. Issued share capital
There were 114,761,840 ordinary shares in issue at 31 May 2004 (31 May
2003: 116,956,840).
3. Dividend
The recommended final dividend of 1.00p per ordinary share, subject to
approval at the annual general meeting, will be paid on 1 October 2004
to shareholders on the register of members at the close of business on 3
September 2004.
The final dividend accrued in respect of the year ended 31 May 2003, at
0.50p per ordinary share, amounted to £585,000. The buy-backs of the
Company's ordinary shares, after 31 May 2002 but before the record date
of the final dividend for the year ended on that date, resulted in a
write-back of £24,000 for dividends accrued in respect of the year ended
31 May 2002 but not in the event payable. The comparative figure of
£561,000 shown is the sum of these two amounts.
4. Basis of consolidation
The Group accounts consolidate the accounts of the Company and of its
wholly owned subsidiary undertaking, Henderson Smaller Companies Finance
Limited.
5. 2004 accounts
The preliminary figures for the year ended 31 May 2004 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.
6. 2003 accounts
The figures and financial information for the year ended 31 May 2003 are
an extract of the latest published accounts 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.
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THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May 2004
7. Annual General Meeting
The full annual report and accounts will be posted to shareholders in
late July 2004 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 24 September 2004
at 2.00 pm.
- ENDS -
For further information please contact :
Neil Hermon
Fund Manager
The Henderson Smaller Companies Investment Trust plc
Telephone: 020 7818 4351
Theresa Wat
Deputy Fund Manager
The Henderson Smaller Companies Investment Trust plc
Telephone: 020 7818 4644
Stephen Westwood
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 5517
Stephen Phillips
Associate Director
Henderson Global Investors
Telephone: 020 7818 6417
Vicki Staveacre
Director of Corporate Affairs
Henderson Global Investors
Telephone: 020 7818 4222
This information is provided by RNS
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