Interim Results
Henderson TR Pacific Inv. Trust PLC
06 August 2002
5 August 2002
HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
Henderson TR Pacific Investment Trust plc, one of the largest investment trusts
specialising in the Far East, announces interim results for the half year ended
30 June 2002.
Attractive valuations relative to other stock markets drew renewed interest from
international investors. Concerns over the health of global equity markets led
to stock market setbacks towards the end of the period which caused much of the
early strength to be lost but the scene is now set for an improved performance
in Asia relative to developed markets, provided the cyclical upturn in the
global economy is sustained.
Key Points:
• Positive net asset value total return of 4.5% - significantly
outperforming benchmark index.
• US$30 million five year loan repaid during March; new more flexible
borrowing facilities currently being negotiated.
• Succession planning - Board seeking to recruit new directors; Wallace
Clapperton to retire in 2003.
(Unaudited) (Audited) (Unaudited)
30 June 2002 31 Dec 2001 30 June 2001
Net asset value 82.3p 79.0p 86.4p
Share Price 72.5p 64.3p 74.0p
Discount 11.9% 18.6% 14.4%
Performance to 30 June 2002
Total returns 6 months 12 months
Net asset value (1) 4.5% -4.0%
Share price (1) 13.2% -1.8%
Peer group (1) and (2) 3.1% 0.8%
Benchmark Index (3) 0.7% 1.1%
(1) Source: AITC Services Ltd (net dividends reinvested).
(2) The company's performance is compared against a group of leading investment trust competitors.
Source: AITC Services Ltd (net dividends reinvested).
(3) MSCI AC Far East Free ex Japan Index. Source: Datastream (gross dividends reinvested).
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
Regarding prospects, Iain Dale, the Chairman, commented:
' Five years on from the Asian financial crisis, the region's economies are
looking much more soundly based... There is pent up domestic demand in many
economies with signs of a consumer revival in several countries.'
' Stock market valuations are attractive relative to other countries. Interest
rates remain low and liquidity conditions are favourable... We continue to hold
a positive stance.'
Extract from the Chairman's Half Year Statement:-
Far East stock markets began the year on a positive note as investors' sentiment
continued to improve following the low points reached after last year's
terrorist attacks in the USA. There were clear signs of recovery in some of the
region's domestic economies after almost five years of gloom following Asia's
financial crisis in 1997. Attractive valuations relative to other stock markets
drew renewed interest from international investors, especially towards South
Korea, which began to see strong growth throughout the economy. Concerns over
the health of global equity markets led to stock market setbacks towards the end
of the period which caused much of the early strength to be lost but the scene
is now set for an improved performance in Asia relative to developed markets,
provided the cyclical upturn in the global economy is sustained.
Performance
Over the half year ended 30 June 2002 we achieved an increase in net assets per
share of 4.2% to 82.3p, compared with a value of 79.0p at the end of December
2001. On a total return basis, an increase of 4.5% was achieved for the company,
compared to a positive total return of 0.7% for the benchmark index, the MSCI AC
Far East ex Japan Index, and 3.1% for our peer group of investment trusts.
Borrowings
The company's US$30 million five year loan matured and was repaid during March.
This had been rarely fully invested and had proved to be unattractive with a
high interest cost of 7% and a denomination in US dollars, which strengthened
significantly against most Far Eastern assets. Looking forward we believe a
flexible approach is more appropriate. A temporary multi-currency borrowing
facility for £15 million is in place through the Royal Bank of Scotland PLC and
negotiations are in hand for additional facilities, which will secure the
availability of funds in any freely traded currency at comparatively low cost.
Directors
It is almost fifteen years since the formation of this company in its present
form and I am proud to say it has been well served over this time by dedicated,
knowledgeable and energetic external directors. Over the next three years we
expect to see considerable change in the composition of the Board. This process
will begin in 2003 with the retirement of Wallace Clapperton who will have given
ten years of substantial service and will not seek re-election at the Annual
General Meeting in April. In consequence, to secure a longer term succession, we
are recruiting new directors who will be responsible for helping to oversee the
company on your behalf over the years ahead.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
Share Repurchases
There were no share repurchases in the half year ended 30 June 2002. Sentiment
towards Far East investment trusts improved and the sector generally traded at
lower discounts to the value of assets. At the end of June the shares traded at
a discount of 11.9% to their net asset value.
Dividend
As usual no dividend has been declared at the interim stage. Our focus on
capital growth opportunities means that shareholders should not expect more than
a token dividend payment at the year end.
Outlook
Five years on from the Asian financial crisis the region's economies are looking
much more soundly based having survived widespread devaluation and considerable
structural reform. There is pent up domestic demand in many economies with signs
of a consumer revival in several countries. Exporters too have become extremely
competitive and continue to build market share at the expense of the developed
world. Stock market valuations are attractive relative to other countries.
Interest rates remain low and liquidity conditions are favourable.
At present most of the problems are external. There are concerns that the
expected economic recovery in the USA will be weak and that the global economic
environment will remain deflationary, thus hitting Far East economies, which
continue to be highly sensitive to export demand. Data from the leading
indicators is supportive of the recovery, however, and we continue to hold a
positive stance.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
STATEMENT OF TOTAL RETURN (incorporating the revenue account)
for the half year ended 30 June 2002
(Unaudited) (Unaudited) (Audited)
Half year ended 30 June 2002 Half year ended 30 June 2001 Year ended 31 December 2001
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
-------- -------- -------- --------- -------- -------- -------- -------- --------
Total capital gains/(losses)
on investments - 6,424 6,424 - 844 844 - (12,899) (12,899)
Income from fixed asset 2,012 - 2,012 2,470 - 2,470 3,791 - 3,791
investments
Other interest receivable
and similar income 70 - 70 370 - 370 560 - 560
-------- -------- -------- -------- -------- -------- -------- -------- --------
Gross revenue and capital
gains/(losses) 2,082 6,424 8,506 2,840 844 3,684 4,351 (12,899) (8,548)
Management fee (424) (425) (849) (537) (537) (1,074) (1,075) (1,075) (2,150)
Other administrative (273) - (273) (228) - (228) (450) - (450)
expenses
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on
ordinary activities before
interest payable
and taxation 1,385 5,999 7,384 2,075 307 2,382 2,826 (13,974) (11,148)
Interest payable (111) (331) (442) (190) (570) (760) (370) (1,111) (1,481)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on
ordinary activities before 1,274 5,668 6,942 1,885 (263) 1,622 2,456 (15,085) (12,629)
taxation
Taxation on net return on
ordinary activities (334) 180 (154) (481) 274 (207) (923) 577 (346)
-------- -------- -------- --------- --------- --------- -------- -------- --------
Net return/(loss) on
ordinary activities after 940 5,848 6,788 1,404 11 1,415 1,533 (14,508) (12,975)
taxation
-------- -------- -------- --------- --------- --------- -------- -------- --------
Final dividend 2001: 0.25p - - - - - - (510) - (510)
Special Dividend 2001: 0.25p - - - - - - (510) - (510)
-------- -------- -------- --------- ---------- ---------- --------- -------- ---------
- - - - - - (1,020) - (1,020)
-------- -------- -------- --------- --------- --------- -------- -------- --------
Transfer to/(from) reserves 940 5,848 6,788 1,404 11 1,415 513 (14,508) (13,995)
===== ===== ===== ===== ===== ===== ===== ===== =====
Return/(loss) per ordinary
share (Note 1) 0.46p 2.86p 3.32p 0.68p 0.01p 0.69p 0.75p (7.08)p (6.33)p
The revenue columns of this statement represent the revenue accounts of the company.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
Balance Sheet
As at 30 June 2002
(Unaudited) (Unaudited) (Audited)
At 30 June At 30 June At 31 December
2002 2001 2001
£'000 £'000 £'000
------------- ------------- -------------
Fixed assets investments:
Listed at market value - overseas 179,327 185,175 167,079
Unlisted - directors' valuation 154 167 161
---------- ---------- ----------
179,481 185,342 167,240
---------- ---------- ----------
Current assets
Debtors 1,139 1,295 2,114
Bank balances and short term deposits 4,478 19,225 14,204
---------- ---------- ----------
5,617 20,520 16,318
Creditors: amounts falling due within one year (16,976) (28,345) (22,224)
---------- ---------- ----------
Net current liabilities (11,359) (7,825) (5,906)
---------- ---------- ----------
Total net assets 168,122 177,517 161,334
---------- ---------- ----------
Capital and reserves
Called-up share capital 10,210 10,277 10,210
Capital redemption reserve 5,696 5,629 5,696
Special reserve 99,800 100,573 99,800
Other capital reserves 46,550 55,221 40,702
Revenue reserve 5,866 5,817 4,926
---------- ---------- ----------
Equity shareholders' funds 168,122 177,517 161,334
====== ====== ======
Net asset value per ordinary share (note 2) 82.3p 86.4p 79.0p
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
Cash Flow Statement
for the half year ended 30 June 2002
(Unaudited) (Unaudited) (Audited)
Half year Half year Year ended
ended ended 31 December
30 June 2002 30 June 2001 2001
£'000 £'000 £'000
----------- ----------- -----------
Net cash inflow from operating activities 542 1,038 1,334
Interest paid (861) (732) (1,465)
Net tax recovered - - 198
Net cash (outflow)/inflow from financial investments (3,682) 4,458 804
Equity dividends paid (1,020) (1,131) (1,131)
Cash withdrawn from/(placed on) short term deposit 9,133 (4,801) (5,872)
---------- ---------- ----------
Net cash inflow/(outflow) before financing 4,112 (1,168) (6,132)
Net cash outflow from financing (5,707) - (773)
---------- ---------- ----------
Decrease in cash (1,595) (1,168) (6,905)
====== ====== ======
Reconciliation of operating revenue to net cash inflow from
operating activities
Net revenue before interest payable and taxation 1,385 2,075 2,826
(Increase)/decrease in accrued income (286) (175) 42
Decrease/(increase) in other debtors 36 (33) (16)
Decrease in creditors (14) (58) (69)
Management charge taken to other capital reserves (425) (537) (1,075)
UK income tax deducted at source - (27) (28)
Overseas withholding tax (154) (207) (346)
---------- ---------- ----------
Net cash inflow from operating activities 542 1,038 1,334
====== ====== ======
Reconciliation of net cash inflow to movement in net debt
Decrease in cash as above (1,595) (1,168) (6,905)
Cash (inflow)/outflow from short term deposits (9,133) 4,801 5,872
Cash outflow from financing 5,707 - -
---------- ---------- ----------
Change in net debt resulting from cash flows (5,021) 3,633 (1,033)
Exchange movements 879 (658) (295)
---------- ---------- ----------
Movement in net debt during the period (4,142) 2,975 (1,328)
Net debt at beginning of the period (6,409) (5,081) (5,081)
----------- ----------- ----------
Net debt at the end of the period (10,551) (2,106) (6,409)
====== ====== ======
Represented by:
Cash at bank and short term deposits less bank overdrafts 3,882 19,225 14,204
Debt falling due within one year (14,433) (21,331) (20,613)
---------- ---------- ----------
(10,551) (2,106) (6,409)
====== ====== ======
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
Notes
1. Return/(loss) per ordinary share
Revenue return per ordinary share is based on earnings of £940,000 (half year ended 30 June 2001: £1,404,000;
year ended 31 December 2001: £1,533,000) and on the weighted average number of ordinary shares in issue during
the period of 204,193,359 (half year ended 30 June 2001: 205,540,359; year ended 31 December 2001: 205,129,214).
Capital return per ordinary share is based on net capital gains of £5,848,000 (half year ended 30 June 2001:
gains of £11,000; year ended 31 December 2001: losses of £14,508,000) and on the weighted average number of
ordinary shares in issue during the period of 204,193,359 (half year ended 30 June 2001: 205,540,359; and year
ended 31 December 2001: 205,129,214).
2. Net asset value per ordinary share
Net asset value per ordinary share is calculated on the basis of shareholders' funds attributable to ordinary
shares divided by the number of ordinary shares in issue at 30 June 2002, being 204,193,359 (30 June 2001:
205,540,359; 31 December 2001: 204,193,359).
3. Share Buy-Backs
The company was granted authority to repurchase up to 30,424,810 ordinary shares at the Annual General Meeting
held on 8 April 2002. As at 5 August 2002, being the last practicable date prior to this announcement, no shares
had been repurchased under this authority.
4. 2001 Accounts
The figures and financial information for the year ended 31 December 2001 are extracted from the latest published
accounts of the company and do not constitute statutory accounts for that year. Those accounts have been
delivered to the Registrar of Companies and include the report of the auditors which was unqualified and did not
contain a statement under either section 237(2) or 237(3) of the Companies Act 1985.
5. Interim Report
The Interim Report will be posted to shareholders in mid-August and thereafter copies will be available from the
registered office - 4 Broadgate, London EC2M 2DA.
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
APPENDIX 1
Geographical Distribution of the Investment Portfolio
As at 30 June 2002 As at 31 December 2001
Company Index* Company Index*
South Korea 32.1% 29.6% 28.2% 23.1%
Taiwan 15.7% 18.1% 17.0% 20.4%
China 12.2% 7.7% 13.9% 8.4%
Hong Kong 12.9% 21.6% 22.5% 24.3%
Thailand 8.1% 2.3% 3.7% 2.1%
The Philippines 0.9% 0.7% 0.0% 0.9%
Malaysia 8.3% 6.8% 3.4% 8.8%
Singapore 8.5% 11.7% 10.0% 11.0%
Indonesia 0.0% 1.5% 0.0% 1.0%
Vietnam 1.3% --- 1.3% ---
--------- --------- --------- ---------
100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
* MSCI AC Far East Free ex Japan Index Country Weightings
APPENDIX 2
Stock Market Performance
Half year to 30 June 2002
Local Currency Sterling Adjusted
South Korea 7.1% 11.6%
Taiwan -7.2% -7.2%
China -10.5% -14.6%
Hong Kong -7.0% -11.2%
Thailand 28.1% 30.2%
The Philippines -1.0% -3.1%
Malaysia 4.2% -0.5%
Singapore -2.0% -2.2%
Indonesia 28.8% 46.8%
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
APPENDIX 3
Sector Analysis of Investments at 30 June 2002
As at 30 June 2002 As at 31 December 2001
Company Index* Company Index*
Collective Investment 4.2% 0.0% 3.5% 0.0%
Vehicles
Computers & Peripherals 4.2% 3.4% 4.8% 4.1%
Consumption 22.0% 8.6% 20.3% 7.3%
Electrical Equipment 1.4% 1.1% 1.4% 1.5%
Finance & Real Estate 25.9% 30.0% 22.0% 29.6%
Resources & Heavy Industrial 10.9% 16.9% 7.9% 16.6%
Semiconductors & Electronics 12.1% 19.6% 14.0% 19.5%
Software Services 1.0% 0.3% 3.0% 0.3%
Telecommunications 6.1% 9.5% 9.6% 10.8%
Transport & Distribution 8.4% 4.0% 9.1% 4.0%
Utilities 3.8% 6.6% 4.4% 6.3%
--------- --------- --------- --------
100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
* MSCI AC Far East Free ex Japan Index Sector Weightings
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
APPENDIX 4
List and Valuation of Investments as at 30 June 2002
% of Market % of Market
Investments Value Investments Value
£'000 £'000
CHINA 12.2 21,828 VIETNAM 1.3 2,290
Beijing Capital International Airport 1,882 The Vietnam Fund 234
China Heartland Fund 1,901 Vietnam Enterprise Investment Fund 2,056
China Resources Enterprise 3,232
China Shipping Development 1,842 SOUTH KOREA 32.1 57,688
China Travel 1,836
CNOOC 3,168 Atlantis Kosdaq Fund 1,189
Global Bio-Chem Technology 3,528 Cheil Communications 2,743
Huaneng Power International 4,439 Good Morning Securities 2,511
Kangwon Land 2,104
TAIWAN 15.7 28,151 Kookmin Bank 6,375
Korea Electric Power 2,397
Ambit Microsystems 2,504 KT Freetel 2,766
Asustek Computer 1,973 KT Corporation 2,963
Nan Ya Plastic 3,431 LG Chemical 3,798
Premier Image Technology 2,378 LG Electronics 5,657
President Chain Store 2,647 NC Soft 1,891
Pros Mos Technologies 2,180 POSCO 1,725
Realtek Semiconductor 1,738 Samsung Electronics 5,378
Synnex Technology International 2,953 Samsung Fire and Marine Insurance 3,877
Taiwan Cellular 2,217 Shinhan Financial 4,622
Taiwan Semiconductor Manufacturing 2,350 Shinsegae 4,445
United Microelectronics 3,780 SK Telecom 3,247
HONG KONG 12.9 23,126 SINGAPORE 8.5 15,342
ChinaVest Partnership* 154 CapitaLand 2,718
Computer & Technologies 927 Datacraft Asia 658
Henderson Land Development 2,725 Great Eastern Holdings 2,450
I-Cable Communications 2,890 Neptune Orient Lines 2,638
Johnson Electric 2,483 Oversea-Chinese Banking Corporation 3,207
Li & Fung 5,720 SembCorp Industries 1,044
Sun Hung Kai Properties 2,497 Venture Corporation 2,627
Swire Pacific 3,360
Television Broadcasts 2,370 THAILAND 8.1 14,495
MALAYSIA 8.3 14,981 BEC World 2,025
Hana Microelectronics 907
AMMB Holdings 2,970 Minor Food 449
Commerce Asset-Holding 1,567 PTT Exploration and Production 1,485
Magnum 1,947 Shin Corporation 1,776
Maxis Communications 1,772 Siam Cement 3,362
Resorts World 2,900 Siam Commercial Bank 2,189
Road Builder 1,771 Thai Farmers Bank 2,302
SP Setia 2,054
----------
PHILIPPINES 0.9 1,580 TOTAL INVESTMENTS 100.0 179,481
======
Ayala Corporation 1,580 * Unlisted Investment
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HENDERSON TR PACIFIC INVESTMENT TRUST PLC
Unaudited Preliminary Interim Results
for the half year ended 30 June 2002
- ENDS -
For further information contact:
Michael Watt, Director and Manager
Iain Dale, Chairman
Tel: 020 7818 4100
David Hardy
Binns & Co. PR
Tel: 020 7786 9600
Stephen Westwood
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 5517
Stephen Phillips
Investor Relations Manager
Henderson Global Investors
Telephone: 020 7818 6417
or
Mark Vickery
Henderson Press Office
Telephone: 020 7818 4222
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