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Henderson Smllr Cos (HSL)

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Monday 23 July, 2007

Henderson Smllr Cos

Final Results

Henderson Smaller Cos Inv Tst PLC
23 July 2007

                                                                     Page 1 of 9



23 July 2007



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007



KEY POINTS



•         Excellent performance

          -    NAV total return 40.6%

          -    Benchmark total return 32.7%

•         Proposed dividend increased by 25.9% to 1.70p per share

•         Continued confidence in the long term outlook for UK smaller companies
          and in the ability of the Trust to outperform



Extracts from the Chairman's Statement:



I am delighted to report a further year of excellent investment performance.
The net asset value per share at our year end was 392.1p.  This amount, which is
net of all our expenses for the year, is 39.8% higher than the figure of 280.4p
reported a year ago.  In addition, shareholders received a dividend of 1.35p in
October 2006.  These figures represent a total return of 40.6%.  By comparison,
our benchmark index returned 32.7%.  The attribution of our performance is
estimated as follows:


                                                                                   Year ended

                                                                                  31 May 2007

Net asset value per share total return                                                  40.6%
Benchmark total return (note)                                                           32.7%
                                                                                     --------
Relative performance                                                                     7.9%
                                                                                     --------
Made up:
Stock selection                                                                          3.2%
Gearing                                                                                  3.6%
Share buy-backs                                                                          2.4%
Expenses
(including management and performance fees)                                             -1.3%
                                                                                    ---------
                                                                                         7.9%
                                                                                    ---------

Note:

The benchmark is the Hoare Govett Smaller Companies (excluding investment
companies) Index.



In summary, the outperformance of the benchmark is attributed in almost equal
measure to stock selection and to the impact of gearing.  The enhancement to the
net asset value per share arising      from the buying in of our own shares more
than covered the expenses of running the Company.


                                                                     Page 2 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007





Extracts from the Chairman's Statement, continued



The revenue account has continued to strengthen.  The revenue return per share
rose by 15.8% to 2.12p, reflecting the level of dividend growth from our
investment portfolio.  All our expenses, including borrowing costs but excluding
the performance fee, are allocated prudently to revenue.  Because the
performance fee is attributable to capital performance, the accounting rules
require us to allocate the figure against the capital return.  We propose a
single and final dividend for the year of 1.70p per share, an increase of 25.9%
on that paid last year.



During the year we bought back and cancelled 13.6 million shares, equivalent to
about 13.5% of those in issue at 31 May 2006, at an average discount (calculated
by valuing the debenture stock at par) of just under 14%.  Despite the volume of
share buy-backs, our Company remains one of the larger constituents of its
sector.



The stock market has moved ahead much further than most investors expected a
year ago, a result in part of a high level of corporate activity, and to that
extent a degree of caution is advisable.    Nevertheless, valuations are
reasonable and companies' profitability, cash flows and balance sheets are in
good order.  We consider that the Company has demonstrated again that active
investment management, well-executed within the transparent structure of an
investment trust company, can offer investors an attractive and efficient means
of adding value to their portfolio.  We shall therefore be recommending our
shareholders to vote, at the Annual General Meeting in September,
for the Company to continue.










                                                                     Page 3 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007



Consolidated Income Statement

for the year ended 31 May 2007




                                        Year ended 31 May 2007          Year ended 31 May 2006
                                      Revenue    Capital               Revenue    Capital

                                       return     return      Total     return     return     Total
                                        £'000      £'000      £'000      £'000      £'000     £'000
Investment income                       6,654          -      6,654      5,743          -     5,743
Other income                              148          -        148        151          -       151
Gains on investments held at fair
value                                       -     97,162     97,162          -     65,745    65,745
   through profit or loss
                                   ---------- ---------- ---------- ---------- ---------- ---------
Total income                            6,802     97,162    103,964      5,894     65,745    71,639

Expenses
Management and performance fees       (1,342)    (2,350)    (3,692)    (1,120)      (583)   (1,703)
Other expenses                          (371)          -      (371)      (377)          -     (377)
                                    --------- ---------- ---------   --------- ---------- ---------
Profit before finance costs and
taxation                                5,089     94,812     99,901      4,397     65,162    69,559

Finance costs                         (3,133)          -    (3,133)    (2,554)          -   (2,554)
                                    ---------   --------   --------  ---------   --------  --------
Profit before taxation                  1,956     94,812     96,768      1,843     65,162    67,005
Taxation                                    -          -          -          -          -         -
                                    ---------   --------   --------  ---------   --------  --------
Profit for the year                     1,956     94,812     96,768      1,843     65,162    67,005
                                       ======     ======      =====     ======     ======     =====

Earnings per ordinary share (note       2.12p    102.59p    104.71p      1.83p     64.62p    66.45p
2)
                                       ======     ======      =====     ======     ======     =====



The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS.

The revenue return and capital return columns are supplementary to this and are
prepared under guidance published by the Association of Investment Companies.



All items in the above statement derive from the 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 4 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007



Consolidated and Parent Company Statements of Changes in Equity

for the year ended 31 May 2007


                                                                   Consolidated

                                                              Year ended 31 May 2007
                                           Called up         Capital         Other
                                               share
                                                          redemption       capital     Revenue
                                             capital
                                                             reserve      reserves     reserve       Total
                                               £'000
                                                               £'000         £'000       £'000       £'000
Balance at 31 May 2006                        25,047          20,369       229,525       6,012     280,953
Buy-backs of ordinary shares                 (3,390)           3,390      (36,687)           -    (36,687)
Profit for the year                                -               -        94,812       1,956      96,768
Ordinary dividend paid                             -               -             -     (1,334)     (1,334)
                                          ----------      ----------    ----------  ----------  ----------
Balance at 31 May 2007                        21,657          23,759       287,650       6,634     339,700
                                              ======          ======        ======      ======      ======
                                                                   Consolidated

                                                              Year ended 31 May 2006
                                           Called up         Capital         Other
                                               share
                                                          redemption       capital     Revenue
                                             capital
                                                             reserve      reserves     reserve       Total
                                               £'000
                                                               £'000         £'000       £'000       £'000
Balance at 31 May 2005                        25,414          20,002       167,325       5,330     218,071
Buy-backs of ordinary shares                   (367)             367       (2,962)           -     (2,962)
Profit for the year                                -               -        65,162       1,843      67,005
Ordinary dividend paid                             -               -             -     (1,161)     (1,161)
                                          ----------      ----------    ----------  ----------  ----------
Balance at 31 May 2006                        25,047          20,369       229,525       6,012     280,953
                                              ======          ======        ======      ======      ======
                                                                     Company

                                                              Year ended 31 May 2007
                                           Called up         Capital         Other
                                               share
                                                          redemption       capital     Revenue
                                             capital
                                                             reserve      reserves     reserve       Total
                                               £'000
                                                               £'000         £'000       £'000       £'000
Balance at 31 May 2006                        25,047          20,369       231,792       3,745     280,953
Buy-backs of ordinary shares                 (3,390)           3,390      (36,687)           -    (36,687)
Profit for the year                                -               -        94,812       1,956      96,768
Ordinary dividend paid                             -               -             -     (1,334)     (1,334)
                                          ----------      ----------    ----------  ----------  ----------
Balance at 31 May 2007                        21,657          23,759       289,917       4,367     339,700
                                              ======          ======        ======      ======      ======
                                                                     Company

                                                              Year ended 31 May 2006
                                           Called up         Capital         Other
                                               share
                                                          redemption       capital     Revenue
                                             capital
                                                             reserve      reserves     reserve       Total
                                               £'000
                                                               £'000         £'000       £'000       £'000
Balance at 31 May 2005                        25,414          20,002       169,594       3,061     218,071
Buy-backs of ordinary shares                   (367)             367       (2,962)           -     (2,962)
Profit for the year                                -               -        65,160       1,845      67,005
Ordinary dividend paid                             -               -             -     (1,161)     (1,161)
                                          ----------      ----------    ----------  ----------  ----------
Balance at 31 May 2006                        25,047          20,369       231,792       3,745     280,953
                                              ======          ======        ======      ======      ======


                                                                     Page 5 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007



Consolidated and Parent Company Balance Sheets

at 31 May 2007






                                                  Consolidated    Consolidated       Company  Company 2006

                                                          2007            2006          2007         £'000

                                                         £'000           £'000         £'000
Non current assets
Investments held at fair value
   through profit or loss                              380,616         317,663       382,883       319,930
                                                   -----------     -----------   -----------   -----------

Current assets
Other receivables                                        1,932           2,266         1,932         2,266
Cash and cash equivalents                                1,360             958         1,360           958
                                                    ----------      ----------    ----------    ----------
                                                         3,292           3,224         3,292         3,224
                                                    ----------      ----------    ----------    ----------

Total assets                                           383,908         320,887       386,175       323,154
                                                    ----------      ----------    ----------    ----------

Current liabilities
Other payables                                         (4,153)           (925)       (6,420)       (3,192)
Bank loans                                            (20,046)        (19,000)      (20,046)      (19,000)
                                                    ----------      ----------    ----------    ----------
                                                      (24,199)        (19,925)      (26,466)      (22,192)
                                                    ----------      ----------    ----------    ----------


Total assets less current liabilities                  359,709         300,962       359,709       300,962



Non current liabilities
Financial liabilities                                 (20,009)        (20,009)      (20,009)      (20,009)
                                                    ----------      ----------    ----------    ----------

Net assets                                             339,700         280,953       339,700       280,953

                                                        ======          ======        ======        ======

Equity attributable to equity shareholders

Called up share capital                                 21,657          25,047        21,657        25,047
Capital redemption reserve                              23,759          20,369        23,759        20,369
Retained earnings
   Other capital reserves                              287,650         229,525       289,917       231,792
   Revenue reserve                                       6,634           6,012         4,367         3,745
                                                    ----------      ----------   -----------   -----------
Total equity                                           339,700         280,953       339,700       280,953
                                                        ======          ======        ======        ======

Net asset value per
  ordinary share                                        392.1p          280.4p        392.1p        280.4p
                                                        ======          ======        ======        ======




                                                                     Page 6 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007



Consolidated and Parent Company Cash Flow Statements

for the year ended 31 May 2007


                                                                    Year ended                Year ended

                                                                   31 May 2007               31 May 2006
                                                              Consolidated     Company  Consolidated    Company

                                                                     £'000       £'000         £'000      £'000
Operating activities
Profit before taxation                                              96,768      96,768        67,005     67,005
Add:  interest paid                                                  3,128       3,128         2,557      2,557
Less: gains on investments held at fair value
   through profit or loss                                         (97,162)    (97,162)      (65,745)   (65,743)
Less: net sales/(purchases) of investments held
   at fair value though profit or loss                              34,213      34,213       (6,860)    (6,860)
Increase in other receivables                                        (158)       (158)         (423)      (423)
Decrease/(increase) in amounts due from brokers                        494         494         (690)      (690)
Increase in other payables                                           1,793       1,793           412        410
Increase/(decrease) in amounts due to brokers                        1,363       1,363          (47)       (47)

                                                                ----------   ---------    ----------  ---------
Net cash inflow/(outflow) from operating
activities before interest and taxation                             40,439      40,439       (3,791)    (3,791)

Interest paid                                                      (3,128)     (3,128)       (2,557)    (2,557)
Taxation on investment income                                          (2)         (2)           (7)        (7)
                                                                 ---------  ----------     --------- ----------
Net cash inflow/(outflow) from operating activities                 37,309      37,309       (6,355)    (6,355)
                                                                     =====       =====         =====      =====
Financing activities
Equity dividend paid                                               (1,334)     (1,334)       (1,150)    (1,150)
Buy-backs of ordinary shares                                      (36,615)    (36,615)       (2,962)    (2,962)
Drawn down of loans                                                  1,046       1,046        11,786     11,786
                                                                 ---------    --------     ---------   --------
Net cash (outflow)/inflow from financing                          (36,903)    (36,903)         7,674      7,674
                                                                     =====       =====         =====      =====
Increase in cash and cash equivalents                                  406         406         1,319      1,319
Cash and cash equivalents at the start of the year                     958         958         (361)      (361)
Exchange movements                                                     (4)         (4)             -          -
                                                                 ---------    --------     ---------   --------
Cash and cash equivalents at
  the end of the year                                                1,360       1,360           958        958
                                                                     =====       =====         =====      =====




                                                                     Page 7 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007



Notes to the Accounts


1.     Accounting Policies


      (a)   Basis of preparation

            The consolidated financial information for the year ended 31 May 2007 has been prepared in
            accordance with International Financial Reporting Standards ('IFRS'), and with those parts of the
            Companies Act 1985 applicable to companies reporting under IFRS. These comprise standards and
            interpretations approved by the International Accounting Standards Board ('IASB'), together with
            interpretations of the International Accounting Standards and Standing Interpretations Committee
            approved by the International Accounting Standards Committee ('IASC') that remain in effect, to
            the extent that IFRS have been adopted by the European Union.



            The accounts have been prepared on the historical cost basis, except for the revaluation of
            certain financial instruments.  The principal accounting policies adopted are those used for the
            year ended 31 May 2006.  Where presentational guidance set out in the Statement of Recommended
            Practice ('the SORP') for investment trusts issued by the Association of Investment Companies ('
            the AIC') in December 2005 is consistent with the requirements of IFRS, the directors have sought
            to prepare the financial statements on a basis consistent with the recommendations of the SORP.




1.    (b)   Basis of consolidation

            The Group accounts consolidate the accounts of the Company and of its wholly owned subsidiary
            undertaking, Henderson Smaller Companies Finance Limited.  The inter-group balances are eliminated on
            consolidation.















                                                            Page 8 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007



Notes to the Accounts, continued


2.     Earnings per ordinary share

       The earnings per ordinary share figure is based on the net gains for the year of £96,768,000 (2006:
       £67,005,000) and on 92,418,217 (2006: 100,827,720) ordinary shares, being the weighted average number of
       ordinary shares in issue during the year.



       The earnings per ordinary share figure detailed above can be further analysed between revenue and
       capital, as below.



       The Company has no securities in issue that could dilute the return per ordinary share.  Therefore the
       basic and diluted earnings per ordinary share are the same.




                                                                       31 May                 31 May
                                                                         2007                   2006
                                                                        £'000                  £'000
        Net revenue profit                                              1,956                  1,843
        Net capital profit                                             94,812                 65,162
                                                                     --------               --------
        Net total profit                                               96,768                 67,005
                                                                        =====                  =====
        Weighed average number of
        ordinary shares in issue during
        the year                                                   92,418,217            100,827,720

                                                                        pence                  pence
        Revenue earnings per ordinary
          share                                                          2.12                   1.83
        Capital earnings per ordinary
         share                                                         102.59                  64.62
                                                                    ---------              ---------
        Total earnings per
          ordinary share                                               104.71                  66.45
                                                                        =====                  =====


3.     Ordinary share capital

       At 31 May 2007 there were 86,626,030 ordinary shares in issue (2006: 100,186,282). During the year ended
       31 May 2007 the Company bought 13,560,252 of its own issued ordinary shares in the market for
       cancellation (2006: 1,470,000).

4.     Net asset value per share

       The net asset value per ordinary share is based on the net assets attributed to the ordinary shares of
       £339,700,000 (2006: £280,953,000) and on the 86,626,030 ordinary shares in issue at 31 May 2007 (2006:
       100,186,282).







                                                    Page 9 of 9



              THE HENDERSON SMALLER COMPANIES INVESTMENT TRUST PLC

       Unaudited Preliminary Group Results for the year ended 31 May 2007


5.     Dividend

       Subject to approval at the annual general meeting, the recommended final dividend of 1.70p per ordinary
       share will be paid on 5 October 2007 to shareholders on the register of members at the close of business
       on 31 August 2007.


6.     2007 accounts

       The preliminary figures for the year ended 31 May 2007, which do not constitute statutory accounts, are an
       extract from the Group's draft accounts for the year.  These accounts have not yet been delivered to the
       Registrar of Companies, nor have the auditors yet reported on them.


7.     2006 accounts

       The figures and financial information for the year ended 31 May 2006 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.


8.     Annual report and AGM
       The full annual report and accounts will be posted to shareholders in mid-August 2007 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 2007 at 2.00 pm.







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



James de Sausmarez

Head of Investment Trusts

Henderson Global Investors

Telephone: 020 7818 3349



Sarah Gibbons-Cook

Investor Relations and PR Manager

Henderson Global Investors

Telephone: 020 7818 3198




                      This information is provided by RNS
            The company news service from the London Stock Exchange