Half Yearly Report

RNS Number : 9159V

Henderson Smaller Cos Inv Tst PLC

20 January 2012

 



 Page 1 of 13

20 January 2012

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

This announcement contains regulated information

FINANCIAL HIGHLIGHTS

	(Unaudited) 30 November 2011	(Unaudited) 30 November 2010	(Audited) 31 May 2011
Total net assets	£252 million	£247 million	£298 million
Net asset value per ordinary share	335.8p	330.4p	398.1p
Net asset value per ordinary share on an alternative basis*	329.2p	323.3p	392.5p
Market price per ordinary share	250.8p	265.0p	319.4p
Total (loss)/return per ordinary share	(58.0)p	56.9p	124.6p
Revenue return per ordinary share	2.3p	1.5p	4.9p
Gearing†	10.3%	8.3%	8.7%

* calculated by deducting from the net assets the debt at its market value.

^† defined here as the total market value of the group's investments less shareholders' funds as a percentage of     shareholders' funds.

PERFORMANCE: comparative total return figures for periods ended 30 November 2011

	6 months %	1 year %	2 years %	3 years %	5 years %	10 years %
The Henderson Smaller Companies Investment Trust plc: net asset value per ordinary share	-15.11	3.04	39.86	132.90	9.80	59.39
The Henderson Smaller Companies Investment Trust plc: ordinary share price	-20.38	-4.04	31.49	181.87	-1.49	46.33
Hoare Govett Smaller Companies Index (excluding investment companies)	-13.33	1.81	23.15	97.49	10.50	128.52
FTSE SmallCap Index (excluding investment companies)	-17.91	-7.93	-0.15	58.58	-28.12	11.05
FTSE All-Share Index	-7.44	2.57	14.39	47.89	8.78	58.87

Source: AIC and Datastream

Page 2 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

INTERIM MANAGEMENT REPORT

CHAIRMAN'S STATEMENT 

Half-Year ended 30 November 2011

Introduction

I would like to open my first Chairman's Statement by paying tribute to Dudley Fishburn who stepped down as Chairman at our AGM in September. He was appointed to the board in 1996 and took the Chair in 2003. During the course of Dudley's chairmanship the NAV (total return^*) of the Company rose 246% while the Company's share price (total return^*) rose 302%. It is also my pleasure to introduce to you this new style of reporting: hopefully you will find the Half-Year Update a relevant and interesting document.

^*Source: Datastream

Markets

The two questions on many people's lips are; how bad is it going to get and are the politicians helping or hindering our recovery? The newly formed Office for Budget Responsibility (OBR) has forecast that Britain will narrowly avoid a second dip into recession. However, it has assumed that the Euro crisis can be easily resolved, a view not shared by many. We also have France and the US in election mode, so stable, far-sighted leadership is unlikely to be forthcoming there. In short there are no simple answers. At least in Britain, we have a stable government that is prepared to make difficult and unpopular but necessary decisions. So far David Cameron has kept his head when all about him in Europe are losing theirs and blaming it on him and the City.  To me it feels a little more comfortable sitting on this side of the English Channel.

What is in store for the equity markets in 2012? For those who want equity exposure, liquidity and income are now more important than ever, which means that the smaller companies' sector feels unloved and has been outperformed by the large companies' sector. But good small companies can and have reacted quickly to the financial conditions and many are in rude health. Combine this with the depressed state of the market and the long-term value investor is presented with some eye-catching investment opportunities. During the period under review, the Company's discount has widened, which creates an attractive buying opportunity and the Company bought back some shares just after the period under review.

Results and Performance

The results for the half-year ended 30 November 2011 were, on an absolute basis, disappointing; however, on a relative performance basis they were broadly in line with the sector. The net asset value per share declined from 398.1p to 335.8p, a total loss for the period of 15.1% on a total return basis. By comparison, the total loss of the benchmark index was 13.3%. On 7 October 2011 the Company paid a final dividend of 4.2p per share, in respect of the year ended 31 May 2011. The share price fall over the period was 20.4% on a total return basis.

Continuation Vote

The next continuation vote of the Company will be held at the annual general meeting in 2013.

Outlook

Britain does face tough times, and the markets are going to continue to be volatile. Value investing with a long-term view in a sector that has dynamic and well-run companies is a logical place to be. In the short term, there will be days, weeks, or even months when you will not be rewarded, but those periods will produce opportunities when we should be seeding not harvesting your capital. 

Jamie Cayzer-Colvin

Chairman

Page 3 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

INTERIM MANAGEMENT REPORT (continued)

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties associated with the Company's business can be divided into the following main areas:

• Investment activity and performance risk

• Financial risk

• Regulatory risk

• Operational risk

Information on these risks and how they are managed is given in the Annual Report. In the view of the Board these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were to the six months under review.

RELATED PARTY TRANSACTIONS

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or performance of the Company during the period. Details of related party transactions are contained in the Report and Financial Statements for the year ended 31 May 2011.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that, to the best of their knowledge:

a)  the condensed set of financial statements has been prepared in accordance with the Accounting Standards Board's statement "Half-Yearly Financial Reports";

b)  the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c)  the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

For and on behalf of the Board

Jamie Cayzer-Colvin

Chairman

20 January 2012

Page 4 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

FUND MANAGER'S REVIEW

Half-Year ended 30 November 2011

Market Review - Six months to 30 November 2011

The period under review was a very difficult one for equity markets. After remaining resilient throughout the early months of summer a combination of a rating downgrade in the US, continued political wrangling over the US budget deficit and the mounting European sovereign credit crisis pushed the market sharply down in August. Since then the market has been volatile but range-bound with movements up and down affected by the degree of confidence the equity market has had in politicians' ability to find a lasting and workable solution to the Eurozone crisis.

Smaller companies underperformed larger companies over the period. This reverses the trend that has been in place over the last three years but given underlying market conditions is not a surprise. In times of economic uncertainty and weak equity markets, smaller companies tend to lag as investors seek the relative security and liquidity of larger companies.

Fund Performance

The Company underperformed the benchmark in the period. The net asset value fell 15.1%, on a total return basis. This compares to a decline of 13.3% (total return) from the Hoare Govett Smaller Companies Index (ex Investment Companies) and a decline of 17.9% (total return) from the FT Smaller Companies Index (ex Investment Companies). The under performance was mostly due to the negative effect of gearing in the Company.

Attribution Analysis

The table below shows the top five contributors to and the bottom five detractors from the Company's relative performance. Some of the following stocks are held in the benchmark index but not by the Company, these have an effect on relative performance.

Top five contributors to relative performance	6 month return %	Relative percent contribution %
Oxford Instruments	+28.7	+0.7
Ocado*	-60.0	+0.4
Interserve	+14.2	+0.4
Premier Foods*	-82.8	+0.4
Croda International	-5.1	+0.4
Top five detractors to relative performance	6 month return %	Relative percent contribution %
WSP	-39.3	-0.8
Berkeley Group*	+13.2	-0.3
Kofax	-48.0	-0.3
Domino Printing Sciences	-25.0	-0.3
Lancashire*	+22.4	-0.3

* in benchmark index but not owned by the Company

Principal Contributors

Oxford Instruments produces advanced instrumentation equipment for industrial and scientific research markets; Ocado is a distributor of food products to a retail customer base, while the Company had no

Page 5 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

holding in this company its share price decline helped our relative performance; Interserve is an international building contractor with significant interests in the Middle East and in particular Qatar; Premier Foods is a branded food manufacturer; and Croda International is a speciality chemical producer.

Principal Detractors

WSP is an international engineering consultant principally in the built environment; Berkeley Group is a South East focused land developer and housebuilder; Kofax supplies software, products and services for use in electronic data and document capture; Domino Printing Sciences is a manufacturer of ink-jet and laser printers for commercial use; and Lancashire is a global provider of speciality insurance products.

Portfolio Activity

Our approach is to consider our investments as long term in nature and to avoid unnecessary turnover. The focus has been on adding stocks to the portfolio that have good growth prospects, sound financial characteristics and strong management, at a valuation level that does not reflect these strengths. Likewise we have been employing strong sell disciplines to cut out stocks that fail to meet these criteria.

In the period we have added to a number of positions in our portfolio and increased exposure to those stocks we feel are set to improve or will continue with strong performance.

New additions to the portfolio include Spirit Pub Company, the managed house operation of Punch Taverns, RPC, a manufacturer and seller of rigid plastic packaging, and WYG Group, an international consultant engineer.  To balance the additions to our portfolio we have disposed of positions in companies which we felt were set for poor price performance, including the holding in Hansteen, Halfords, Topps Tiles, Phoenix IT and Meggitt.

Market Outlook

The period under review has seen equity markets struggle with concerns over the European sovereign credit crisis and the consequent impact on global economic growth. Although corporates have so far coped well, the current situation remains volatile and there is little confidence in the ability of politicians to come up with a workable solution to the problems facing the Eurozone.

The UK economy has made a modest recovery from recession but is now facing a period of, at best, low growth and, at worst, a double-dip recession. The need to rein in public spending and reduce the public sector deficit is forcing large cuts in government spending. The strength of the UK consumer and housing market is being tested in this environment.

Even so there are plenty of reasons to be positive about equity markets. Valuations are low by historic standards and compare well to other asset classes. Balance sheets are in very good order with strong cash generation and the equity issues of 2009 have left the corporate sector in rude financial strength.  M&A continues, albeit at a modest pace, with foreign corporates prominent in attempting to pick up cheap UK assets. This is a trend which will help smaller companies in particular as M&A activity tends to be focused in this area.

In conclusion, the period under review has been a difficult one for the equity market and the Company. Performance was behind the benchmark. However I believe our investments are generally trading soundly, are well financed and attractively valued. Additionally the small cap market continues to throw up exciting growth opportunities in which the Company can invest.                                 

Neil Hermon

Fund Manager

Page 6 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Investment Portfolio

at 30 November 2011

	Valuation at 30 November 2011 £'000	% of portfolio			Valuation at 30 November 2011 £'000	% of portfolio
Croda	9,748	3.51		Aveva	3,152	1.14
Informa	8,671	3.12		Fidessa	3,091	1.12
Spectris	8,388	3.02		Ultra Electronic	3,061	1.10
Oxford Instruments	7,363	2.65		Synergy Health	3,050	1.10
e2v Technologies	6,868	2.48		Persimmon	3,033	1.09
Bellway	6,704	2.42		Shaftesbury	3,009	1.08
Victrex	6,340	2.29		Howden Joinery	2,945	1.06
Domino Printing	6,001	2.16		Greene King	2,896	1.04
Interserve	5,640	2.03		RWS*	2,834	1.02
WSP	5,446	1.96		NCC	2,788	1.01
	----------	--------			----------	----------
Ten largest	71,169	25.64		Forty largest	186,449	67.17
Taylor Wimpey	5,404	1.95		Laird	2,777	1.00
Intermediate Capital	5,171	1.86		Kentz	2,622	0.94
WS Atkins	5,149	1.86		Spirent Communications	2,585	0.93
Senior	5,089	1.83		Renishaw	2,575	0.93
Paragon	4,916	1.77		Chemring	2,551	0.92
Rotork	4,882	1.76		Carphone Warehouse	2,516	0.91
Melrose	4,841	1.74		ITE	2,420	0.87
Premier Oil	4,446	1.60		Dunelm	2,356	0.85
Carillion	4,347	1.57		LSL Property Services	2,340	0.84
Restaurant Group	4,276	1.54		Hyder Consulting	2,323	0.84
	---------	--------			------------	-----------
Twenty largest	119,690	43.12		Fifty largest	211,514	76.20
Babock International	4,227	1.52		Aberdeen Asset Management	2,248	0.81
Northgate	3,990	1.44		Costain	2,204	0.79
John Menzies	3,829	1.38		Capital & Regional	2,169	0.78
AZ Electronic Materials	3,717	1.34		Chime Communications	2,099	0.76
Ashtead	3,598	1.29		SIG	2,004	0.72
Anite	3,578	1.29		GlobeOp Financial Services	1,929	0.69
Grainger	3,535	1.27		London Mining*	1,911	0.69
Balfour Beatty	3,515	1.27		CPP	1,878	0.68
Euromoney Institutional   Investor	3,515	1.27		Debenhams	1,830	0.66
Filtrona	3,396	1.22		Lupus Capital*	1,782	0.64
	-----------	----------			-----------	-----------
Thirty largest	156,590	56.41		Sixty largest	231,568	83.42
					-----------	-----------
				Remaining 48	46,005	16.58
					-----------	-----------
				Total	277,573	100.00
					======	======

*listed on the Alternative Investment Market

Page 7 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Consolidated Statement of Comprehensive Income

for the half-year ended 30 November 2011

	(Unaudited) Half-year ended 30 November 2011			(Unaudited) Half-year ended 30 November 2010			(Audited) Year ended 31 May 2011
	Revenue return	Capital return	Total	Revenue return	Capital return	Total	Revenue return	Capital return	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Investment income	3,621	-	3,621	2,772	-	2,772	7,088	-	7,088
Other income	2	-	2	4	-	4	35	-	35
(Losses)/gains on investments       held at fair value through    profit or loss	-	(45,199)	(45,199)	-	42,537	42,537	-	91,312	91,312
	----------	----------	----------	----------	----------	----------	----------	----------	---------
Total income	3,623	(45,199)	(41,576)	2,776	42,537	45,313	7,123	91,312	98,435
Expenses
Management fees	(521)	-	(521)	(413)	-	(413)	(906)	-	(906)
Performance fee	-	-	-	-	(1,008)	(1,008)	-	(1,644)	(1,644)
Other expenses	(228)	-	(228)	(194)	-	(194)	(407)	-	(407)
	---------	----------	----------	---------	----------	----------	----------	----------	----------
Profit/(loss) before finance costs and taxation	2,874	(45,199)	(42,325)	2,169	41,529	43,698	5,810	89,668	95,478
Finance costs	(1,137)	-	(1,137)	(1,056)	-	(1,056)	(2,132)	-	(2,132)
	---------	----------	----------	---------	----------	----------	----------	----------	---------
Profit/(loss) before taxation	1,737	(45,199)	(43,462)	1,113	41,529	42,642	3,678	89,668	93,346
Taxation	(2)	-	(2)	(1)	-	(1)	(4)	-	(4)
	---------	----------	----------	---------	----------	----------	---------	---------	---------
Profit/(loss) for the period and   total comprehensive income	1,735	(45,199)	(43,464)	1,112	41,529	42,641	3,674	89,668	93,342
	=====	======	======	=====	======	======	=====	=====	======
Earnings per ordinary   share (note 3)	2.32p	(60.34)p	(58.02)p	1.48p	55.44p	56.92p	4.91p	119.70p	124.61p
	=====	======	======	=====	======	======	======	======	======

The total column of this statement represents the Group's Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union.  The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

The Group does not have any Other Comprehensive Income and hence the net profit, as disclosed above, is the same as the Group's Total Comprehensive Income.

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of The Henderson Smaller Companies Investment Trust plc, the parent company.

There are no minority interests.

Page 8 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Consolidated Statement of Changes in Equity

for the half-year ended 30 November 2011

	(Unaudited) Half-year ended 30 November 2011
	Called up share capital	Capital  redemption reserve	Other capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000
Total equity at 31 May 2011	18,727	26,694	241,538	11,225	298,184
Total comprehensive income:   (Loss)/profit for the period	-	-	(45,199)	1,735	(43,464)
Transactions with owners,   recorded directly to equity:
Ordinary dividend paid	-	-	-	(3,146)	(3,146)
	----------	----------	----------	--------	-----------
Total equity at 30 November 2011	18,727	26,694	196,339	9,814	251,574
	======	======	======	=====	======

	(Unaudited) Half-year ended 30 November 2010
	Called up share capital	Capital  redemption reserve	Other capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000
Total equity at 31 May 2010	18,727	26,694	151,870	10,242	207,533
Total comprehensive income:   Profit for the period	-	-	41,529	1,112	42,641
Transactions with owners,   recorded directly to equity:
Ordinary dividend paid	-	-	-	(2,696)	(2,696)
	----------	----------	----------	--------	-----------
Total equity at 30 November 2010	18,727	26,694	193,399	8,658	247,478
	======	======	======	=====	======
	(Audited) Year ended 31 May 2011
	Called up share capital	Capital  redemption reserve	Other capital reserves	Revenue  reserve	Total
	£'000	£'000	£'000	£'000	£'000
Total equity at 31 May 2010	18,727	26,694	151,870	10,242	207,533
Total comprehensive income:     Profit for the year	-	-	89,668	3,674	93,342
Transactions with owners,   recorded directly to equity:   Ordinary dividend paid	-	-	-	(2,696)	(2,696)
Dividends unclaimed after 12 years	-	-	-	5	5
	----------	----------	----------	---------	----------
Total equity at 31 May 2011	18,727	26,694	241,538	11,225	298,184
	======	======	======	=====	======

Page 9 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Consolidated Balance Sheet

at 30 November 2011

	(Unaudited) 30 November 2011	(Unaudited) 30 November 2010	(Audited) 31 May 2011
	£'000	£'000	£'000
Non current assets
Investments held at fair value through   profit or loss	277,573	267,978	324,143
	-----------	-----------	-----------
Current assets
Securities sold for future settlement	1,012	1,055	-
Taxation recoverable	39	39	33
Prepayments and accrued income	655	323	1,600
Cash and cash equivalents	309	2,090	642
	----------	----------	----------
	2,015	3,507	2,275
	----------	----------	----------
Total assets	279,588	271,485	326,418
	----------	----------	----------
Current liabilities
Securities purchased for future settlement	(427)	(1,783)	(502)
Accruals and deferred income	(69)	(1,220)	(1,728)
Bank loans	(7,514)	(1,000)	(6,000)
	----------	----------	----------
	(8,010)	(4,003)	(8,230)
	----------	----------	----------
Total assets less current liabilities	271,578	267,482	318,188
Non current liabilities	(20,004)	(20,004)	(20,004)
	----------	----------	-----------
Net assets	251,574	247,478	298,184
	======	======	======
Equity attributable to equity shareholders
Called up share capital (note 5)	18,727	18,727	18,727
Capital redemption reserve	26,694	26,694	26,694
Retained earnings:
Capital reserves	196,339	193,399	241,538
Revenue reserve	9,814	8,658	11,225
	----------	----------	----------
Total equity	251,574	247,478	298,184
	======	======	======
Net asset value per ordinary share (note 6)	335.8p	330.4p	398.1p
	======	======	======

Page 10 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Consolidated Cash Flow Statement

for the half-year ended 30 November 2011

		(Unaudited) Half-year ended 30 November 2011	(Unaudited) Half-year ended 30 November 2010	(Audited) Year ended 31 May 2011
		£'000	£'000	£'000
Net cash inflow/(outflow) from operating activities (note 7)		1,299	4,692	(1,761)
		----------	----------	----------
Net cash inflow/(outflow) before use of financing		1,299	4,692	(1,761)
Net cash (outflow)/inflow from financing activities		(1,632)	(3,699)	1,306
		----------	----------	-----------
Net (decrease)/increase in cash   and cash equivalents		(333)	993	(455)
Cash and cash equivalents at the start   of the period		642	1,097	1,097
		--------	--------	--------
Cash and cash equivalents at the period end		309	2,090	642
		=====	=====	=====

Page 11 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Notes to the Condensed Financial Statements

1.	Accounting policies - basis of preparation The condensed set of financial statements has been prepared using the same accounting policies as are set out in the Company's Report and Financial Statements for the year ended 31 May 2011 and in accordance with IAS 34. The condensed set of financial statements has not been either audited or reviewed by the Company's auditors.
2.	VAT on management fees As at 31 May 2011 the Company had received back from HM Revenue & Customs all of the VAT on investment management fees that had been borne by the Company in respect of the periods 1990 to 1996 and 2000 to 2007, as well as simple interest on those amounts. There remain outstanding claims relating to the period 1996 to 2000 and claims for compound interest from 1990 onwards.  No amounts have been recognised as it is uncertain whether any further amounts will be recovered.
3.	Earnings per ordinary share The earnings per ordinary share figure is based on the net loss for the half-year of £43,464,000 (half-year ended 30 November 2010: profit of £42,641,000; year ended 31 May 2011: profit of £93,342,000) and on 74,906,796 (half-year ended 30 November 2010: 74,906,796; year ended 31 May 2011: 74,906,796) ordinary shares, being the weighted average number of ordinary shares in issue during the period. The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below.
		(Unaudited) 30 November 2011	(Unaudited) 30 November 2010	(Audited) 31 May 2011
		£'000	£'000	£'000
	Net revenue profit	1,735	1,112	3,674
	Net capital (loss)/profit	(45,199)	41,529	89,668
		-----------	-----------	-----------
	Net total (loss)/profit	(43,464)	42,641	93,342
		======	======	======
	Weighted average number of   ordinary shares in issue during   the period	74,906,796	74,906,796	74,906,796
		Pence	Pence	Pence
	Revenue profit per ordinary share	2.32	1.48	4.91
	Capital (loss)/profit per ordinary share	(60.34)	55.44	119.70
		---------	---------	---------
	Total (loss)/profit per ordinary share	(58.02)	56.92	124.61
		=====	=====	======

Page 12 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Notes to the Condensed Financial Statements, continued

4.	Dividends The Company has not declared an interim dividend (2010: nil). The final dividend of 4.20p per ordinary share, paid on 7 October 2011, in respect of the year ended 31 May 2011, has been recognised as a distribution in the period.
5.	Called up share capital At 30 November 2011 there were 74,906,796 ordinary shares in issue (30 November 2010: 74,906,796; 31 May 2011: 74,906,796).  During the half-year ended 30 November 2011 the Company did not buy back any of its own issued ordinary shares in the market for cancellation (half-year ended 30 November 2010: nil; year ended 31 May 2011: nil). In the period since the year end and to 20 January 2012 the Company bought back a total of 35,000 ordinary shares in the market at an average price of 246.5p per share and average discount to net asset value of 49.1%. As a result the Company had 74,871,796 ordinary shares in issue.
6.	Net asset value per share The net asset value per ordinary share is based on the net assets attributable to the equity shareholders of £251,574,000 (30 November 2010: £247,478,000; 31 May 2011: £298,184,000) and on 74,906,796 (30 November 2010: 74,906,796; 31 May 2011: 74,906,796) ordinary shares, being the number of ordinary shares in issue at the period end.
7.	Reconciliation of the (loss)/profit before taxation to the net cash inflow/(outflow) from operating activities
			(Unaudited) Half-year ended 30 November 2011	(Unaudited) Half-year ended 30 November 2010	(Audited) Year ended 31 May 2011
			£'000	£'000	£'000
	(Loss)/profit before taxation		(43,462)	42,642	93,346
	Loss/(profit) on investments held   at fair value through profit or loss		45,199	(42,537)	(91,312)
	(Decrease)/increase in purchases for   future settlement creditor		(75)	1,676	395
	(Increase)/decrease in sales for   future settlement debtor		(1,012)	(492)	563
	Net sales of investments		1,371	1,882	(5,508)
	Decrease/(increase) in other receivables		930	505	(675)
	Decrease/(increase) in other debtors		15	9	(88)
	(Decrease)/increase in accruals		(1,659)	1,016	1,524
	Taxation on investment income		(8)	(9)	(6)
			---------	---------	---------
			1,299	4,692	(1,761)
			=====	=====	=====

Page 13 of 13

THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

Financial Report for the half-year ended 30 November 2011

Notes to the Condensed Financial Statements, continued

8.	Transaction costs Purchase transaction costs for the half-year ended 30 November 2011 were £63,000 (half-year ended 30 November 2010: £139,000; year ended 31 May 2011: £259,000). These comprise mainly stamp duty and commission.  Sale transaction costs for the half-year ended 30 November 2011 were £14,000 (half-year ended 30 November 2010: £40,000; year ended 31 May 2011: £66,000).
9.	Going concern The directors consider that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.  The assets of the Company consist almost entirely of securities that are readily realisable and, accordingly, the Company has adequate financial resources to continue in existence for the foreseeable future.
10.	Comparative information The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The financial information for the half-years ended 30 November 2011 and 30 November 2010 has not been audited. The information for the year ended 31 May 2011 has been extracted from the statutory accounts for that year, which have been filed with the Registrar of Companies.  The report of the auditors on those accounts was unqualified and contained no statement under either section 498(2) or section 498(3) of the Companies Act 2006.
11.	Financial Report for the half-year ended 30 November 2011 The Half-Year Report will shortly be available in typed format on the Company's website or from the Company's registered office. An abbreviated version, the 'Update', will be circulated to shareholders in late January and will be available from the Secretary at the Company's Registered Office, 201 Bishopsgate, London EC2M 3AE.

For further information please contact:

Neil Hermon Fund Manager The Henderson Smaller Companies Investment Trust plc Telephone: [phone]
James de Sausmarez Director Head of Investment Trusts Henderson Global Investors Telephone: [phone]	Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

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Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

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