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Henderson Smllr Cos (HSL)

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Monday 12 July, 2004

Henderson Smllr Cos

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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                                     - 2 -

              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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                                     - 3 -


                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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                                    - 4 -


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
            The company news service from the London Stock Exchange