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TIDMHNE
RNS Number : 8153Z
Henderson Eurotrust PLC
21 March 2012
HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
This announcement contains regulated information.
Financial Highlights
(Unaudited) (Unaudited) (Audited)
Half year Half year Year
ended ended ended
31 January 31 January 31 July
2012 2011 2011
Net asset value per ordinary
share 570.1p 618.0p 624.7p
Revenue return per ordinary
share 0.2p 0.8p 17.6p
Dividends per ordinary
share 5.0p 4.0p 15.0p
Price per ordinary share 495.3p 557.0p 542.0p
Discount 13.1% 9.9% 13.2%
Total Return Performance (base 100)
6 months 1 year 3 years 5 years
Net assets per ordinary
share 93.1 94.7 133.6 118.7
Average Continental European
investment trust* 89.6 89.1 140.7 105.0
FTSE World Europe (ex UK)
Index
('the benchmark index') 87.9 86.5 130.9 98.4
Source: Morningstar and AIC
* Arithmetic average net asset value total return for the Europe sector.
Total return is the return on the share price or NAV taking into account both the rise and fall of share prices and dividends paid to shareholders. Dividends received are assumed to have been reinvested.
Interim Management Report
Chairman's Statement
Half year ended 31 January 2012
The Company's net asset value ('NAV') fell in absolute terms over the six months to 31 January 2012, but by less than the benchmark index. I can add also that it fell by less than the average of our peer group, and that at the time of writing, markets have recovered partially.
Continental Europe continues to be a controversial area for some global investors, many of whom are reluctant to take on an equity exposure to the region. Whilst not wishing to underestimate the problems facing some of the region's countries, it is indeed ironic that the IMF was unable to agree a major support programme earlier this year, precisely because on average the region is not weak, but economically strong.
Discount Management
In the first half of our financial year, the Company re-purchased in the market some 126,134 shares. We re-iterate the Board's wish to see a low and stable discount, consistent only with our not shrinking the size of the Company to a level that would threaten its long-term viability. We believe that our current policy is in the long term interests of our shareholders in general, even if some would prefer to see a much narrower discount at virtually any cost.
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Dividends
Your Board has decided to increase the interim dividend from 4p to 5p per share. Dividend increases on our holdings remain strong, and at this relatively early stage in the dividend paying season we anticipate being able to at least hold the final dividend. Our aim in making this increase is to begin to move back towards the traditional ratio between interim and final dividends, from which we have drifted away in recent years.
Outlook
From the end of July 2011 until early December 2011 the region's equity markets were in a febrile state. The recovery since then appears to be linked to the European Central Bank's Long Term Refinancing Operation ('LTRO') which our Portfolio Manager describes in more detail in his commentary. The manoeuvre has given a breathing space for the systemically important Spanish and Italian governments to reform their economies and put themselves on to a growth path. Your Board believes that LTRO is positive for the region's outlook. Monetary policy is now loose virtually around the world. As we write, this monetary stance is successfully off-setting the fiscal tightness forced upon many of the governments in the region, to the benefit of the companies in which we invest.
Mark Tapley
Chairman
21 March 2012
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
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 to 31 July 2011. In the view of the Board these principal risks and uncertainties were unchanged over the last six months and 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 July 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) this 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) this report includes a fair review of the information required by the Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
For and on behalf of the Board
Mark Tapley
Chairman
21 March 2012
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Portfolio Manager's Commentary
The six months to the end of January saw European markets fall sharply, with a decline of 12.1%. Over the same period the net asset value total return of the Company fell by 6.9%. This significantly better relative performance has once again been primarily a reflection of the higher quality of our investments (soundly financed, resilient growth companies). We have also continued to take a very cautious attitude towards banking stocks, which have been highly volatile. The Euro slipped in value by just over 5% against Sterling, the Company's base currency, and this has been an additional headwind for markets.
We have made a few changes to the portfolio in the first six months of our financial year, with the sale of Lufthansa, Siemens, Kabel Deutschland, Henkel and Commerzbank, which has reduced our weighting a little in the German market, even though we have added BMW. We have also reduced by a small amount our exposure to some of the more economically sensitive names with these changes, which reflects a more sombre economic outlook for the European area in 2012. We have added another medical technology stock, Elekta in Sweden, which is a market leader in radiotherapy products. Having been cautious on financial stocks for some time, in January we added two banks to the portfolio - ING and Banco Santander. We remain quite underweight relative to the index in banks overall (but overweight in the insurance names which have rallied recently). There is an urgent need for most banks to both increase capital and reduce gearing, and both these processes will take a very long time, and leave banks ultimately achieving lower levels of profitability compared with the past. As such we will remain very careful with our banks' exposure, preferring instead to concentrate on other areas of the market where quality, which has served us so well over many years, continues to be readily available at attractive valuations.
At the end of January there were 52 holdings in the portfolio compared with 50 at 31 July 2011.
Outlook
At the end of December 2011 the European Central Bank ('ECB') launched the 'LTRO' or 'Long Term Refinancing Option' which allowed banks to borrow from the ECB for three years at a rate of 1%, followed at the end of February by 'Act 2' adding a combined EUR1 trillion of liquidity. Without wanting to get drawn into the complex (but interesting) debate about the merits of this, the effects are relatively straightforward: it buys time for the banks and adds liquidity. The seemingly never ending debate about Greece continues, but we believe the Euro will survive and eventually there will be closer fiscal integration. With markets perhaps tired of the "gloomy" scenario, they more recently have decided to focus on the "not so gloomy" possibilities, and the low valuation of European equities (a point we made in the Annual Report a few months ago). This trend could continue, particularly given the low weighting to European equities by most institutions. As ever there are bound to be nervous days, but at the time of writing we have moved to a small geared position utilising some of our borrowing facility.
Tim Stevenson
Portfolio Manager
21 March 2012
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Twenty Largest Holdings
These twenty investments total GBP58,207,000 representing 50.9% by value of the total investments.
% of
Valuation Total
Name of Investment Country Sector GBP'000 Portfolio
1 Deutsche Post Germany Industrials 5,567 4.9
2 Fresenius Germany Healthcare 4,640 4.1
3 Elekta Sweden Healthcare 3,423 3.0
4 Amadeus Spain Technology 3,239 2.8
5 Linde Germany Industrials 3,148 2.7
6 Sandvik Sweden Industrials 3,059 2.7
7 Saipem Italy Energy 2,949 2.6
8 BIC France Consumer Staples 2,938 2.6
9 Sodexo France Industrials 2,842 2.5
10 Total France Energy 2,681 2.3
11 Swedish Match Sweden Consumer Staples 2,645 2.3
12 Brenntag Germany Industrials 2,573 2.2
13 ENI Italy Energy 2,516 2.2
14 A P Moller-Maersk Denmark Industrials 2,470 2.2
15 Statoil Norway Energy 2,419 2.1
16 Deutsche Boerse Germany Financials 2,365 2.1
17 Zurich Financial Switzerland Financials 2,234 1.9
18 SGS Switzerland Industrials 2,183 1.9
19 Nestle Switzerland Consumer Staples 2,159 1.9
20 Deutsche Telekom Germany Telecommunications 2,157 1.9
--------- ------
Total 58,207 50.9
Sector Analysis Country Analysis
Index*
31 Jan 31 Jan 31 Jan 31 Jan 31 Jan
2012 2011 2012 2012 2011
Name of Sector % % % Name of Country % %
Basic Materials 5.0 6.6 8.2 Denmark 2.2 -
Consumer Goods 11.0 13.8 18.4 Finland 2.8 2.1
Consumer Services 7.7 9.8 5.1 France 24.5 21.8
Financials 13.5 10.2 20.5 Germany 25.7 33.0
Health Care 16.0 11.3 11.4 Italy 4.8 2.2
Industrials 26.7 30.2 14.6 The Netherlands 2.8 3.6
Oil & Gas 9.3 6.1 7.5 Norway 2.1 1.6
Technology 7.6 8.8 3.5 Spain 5.8 4.3
Telecommunications 3.2 3.2 5.4 Sweden 12.4 8.1
Utilities - - 5.4 Switzerland 16.9 23.3
------- ------ ------- ------- ------
Total 100.0 100.0 100.0 Total 100.0 100.0
* FTSE World Europe (ex UK) Index
Source: Morningstar and Henderson
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Income Statement
for the half year ended 31 January 2012
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
31 January 2012 31 January 2011 31 July 2011
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- --------- --------- --------- --------- --------- ---------- --------- ----------
(Losses)/gains
from
investments
held at fair
value through
profit or loss - (7,828) (7,828) - 15,966 15,966 - 15,604 15,604
Investment
income 324 - 324 414 - 414 4,546 - 4,546
Other interest
receivable and
similar income - - - 1 - 1 2 - 2
-------- -------- -------- -------- -------- -------- --------- -------- -------
Gross revenue
and capital
(losses)/gains 324 (7,828) (7,504) 415 15,966 16,381 4,548 15,604 20,152
Management and
performance
fees
(note 4) (75) (1,278) (1,353) (88) (355) (443) (184) (1,371) (1,555)
Other
administrative
expenses (140) - (140) (140) - (140) (325) - (325)
-------- -------- -------- -------- -------- -------- --------- -------- ---------
Net
return/(loss)
on ordinary
activities
before finance
costs and
taxation 109 (9,106) (8,997) 187 15,611 15,798 4,039 14,233 18,272
Finance costs (1) (2) (3) (2) (6) (8) (9) (35) (44)
-------- -------- -------- -------- -------- -------- --------- ------- -------
Net
return/(loss)
on ordinary
activities
before taxation 108 (9,108) (9,000) 185 15,605 15,790 4,030 14,198 18,228
Taxation on net
return on
ordinary
activities (66) - (66) (15) - (15) (373) - (373)
-------- -------- -------- -------- -------- -------- --------- -------- ---------
Net
return/(loss)
on ordinary
activities
after taxation 42 (9,108) (9,066) 170 15,605 15,775 3,657 14,198 17,855
====== ======= ====== ===== ===== ===== ====== ====== =====
Return/(loss)
per ordinary
share (note 2) 0.2p (44.5)p (44.3)p 0.8p 75.0p 75.8p 17.6p 68.5p 86.1p
==== ====== ===== ===== ===== ===== ===== ====== =====
The total columns of this statement represent the Income Statement of the Company.
All revenue and capital returns in the above statement derive from continuing operations.
No operations were acquired or discontinued during the half year ended 31 January 2012. The Company has no recognised gains or losses other than those recognised in the Income Statement and the Reconciliation of Movements in Shareholders' Funds.
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Reconciliation of Movements in Shareholders' Funds
for the half year ended 31 January 2012
Share
Called Other
up share premium capital
Capital
Half year ended 31 January redemption Revenue
2012 capital account reserve reserves reserve Total
(Unaudited) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ---------- ----------- ------------- ----------- ----------- -----------
As at 31 July 2011 1,026 33,814 257 88,774 4,327 128,198
Net (loss)/return on ordinary
activities after taxation - - - (9,108) 42 (9,066)
Repurchase of ordinary shares (6) - 6 (607) - (607)
Final dividend for 2011 paid - - - - (2,253) (2,253)
-------- -------- -------- -------- --------- ---------
As at 31 January 2012 1,020 33,814 263 79,059 2,116 116,272
===== ===== ===== ===== ===== =====
Half year ended 31 January
2011 (Unaudited)
----------------------------------- ---------- ----------- ------------- ----------- ----------- -----------
As at 31 July 2010 1,044 33,814 239 76,555 2,958 114,610
Net return on ordinary activities
after taxation - - - 15,605 170 15,775
Repurchase of ordinary shares (6) - 6 (634) - (634)
Final dividend for 2010 paid - - - - (1,459) (1,459)
-------- -------- -------- -------- --------- ---------
As at 31 January 2011 1,038 33,814 245 91,526 1,669 128,292
===== ===== ===== ===== ===== =====
Year ended 31 July 2011 (Audited)
----------------------------------- ---------- ----------- ------------- ----------- ----------- -----------
As at 31 July 2010 1,044 33,814 239 76,555 2,958 114,610
Net return on ordinary activities
after taxation - - - 14,198 3,657 17,855
Repurchase of ordinary shares (18) - 18 (1,979) - (1,979)
Final dividend for 2010 paid - - - - (1,460) (1,460)
Interim dividend for 2011
paid - - - - (828) (828)
--------- ---------- ---------- ---------- ---------- ----------
As at 31 July 2011 1,026 33,814 257 88,774 4,327 128,198
===== ====== ====== ====== ====== ======
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Balance Sheet
as at 31 January 2012
(Unaudited) (Unaudited) (Audited)
31 January 31 January 31 July
2012 2011 2011
GBP'000 GBP'000 GBP'000
------------------------------ ---------------------- ---------------------- ----------------------
Investments held at fair
value through profit or loss 114,297 127,053 126,907
----------- ---------- ----------
Current assets
Debtors 430 1,107 1,194
Cash at bank and short term
deposits 3,136 1,339 2,044
-------- ---------- ----------
3,566 2,446 3,238
Creditors: amounts falling
due
within one year (1,591) (1,207) (1,947)
--------- ---------- ----------
Net current assets 1,975 1,239 1,291
------------ ---------- ----------
Total net assets 116,272 128,292 128,198
======= ====== ======
Capital and reserves
Called up share capital 1,020 1,038 1,026
Share premium account 33,814 33,814 33,814
Capital redemption reserve 263 245 257
Other capital reserves 79,059 91,526 88,774
Revenue reserve 2,116 1,669 4,327
-------- ---------- ----------
Equity shareholders' funds 116,272 128,292 128,198
====== ====== ======
Net asset value per ordinary
share (note 3) 570.1p 618.0p 624.7p
====== ====== ======
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Cash Flow Statement
for the half year ended 31 January 2012
(Unaudited) (Unaudited)
Half year Half year
ended ended (Audited)
31 January 31 January Year ended
2012 2011 31 July 2011
GBP'000 GBP'000 GBP'000
----------------------------------- ------------------ -------------------- -------------
Net cash (outflow)/inflow from
operating activities (931) (749) 2,169
Servicing of finance (4) (10) (45)
Overseas tax recovered 55 301 302
Net cash inflow from financial
investment 5,631 1,234 607
Equity dividends paid (2,253) (1,459) (2,288)
---------- ---------- -----------
Net cash inflow/(outflow)before
financing 2,498 (683) 745
Net cash outflow from financing (1,132) (1,965) (2,785)
----------- ----------- -----------
Increase/(decrease) in cash 1,366 (2,648) (2,040)
======= ======= =======
Reconciliation of operating revenue to net cash
(outflow)/inflow from operating activities
Net (loss)/gain before finance
costs
and taxation (8,997) 15,798 18,272
Capital loss/(gain) before finance
costs
and taxation 9,106 (15,611) (14,233)
Increase in prepayments, accrued
income
and other debtors (4) (8) -
Increase/(decrease) in creditors
and accruals 286 (558) 79
Expenses charged to capital (1,278) (355) (1,371)
Tax on unfranked investment income
deducted at source (44) (15) (578)
---------- ----------- -----------
Net cash (outflow)/inflow from
operating activities (931) (749) 2,169
====== ======= =======
Reconciliation of net cash flow to movements
in net funds
Increase/(decrease) in cash as
above 1,366 (2,648) (2,040)
Cash outflow from decrease in
loans 525 1,331 806
Exchange movements (274) 179 276
-------- ---------- -----------
Movement in net funds 1,617 (1,138) (958)
Net funds at start of the period 1,519 2,477 2,477
-------- ---------- -----------
Net funds at end of the period 3,136 1,339 1,519
====== ====== =======
Represented by:
Cash at bank 3,136 1,339 2,044
Bank loans - - (525)
---------- --------- ---------
3,136 1,339 1,519
======= ===== =====
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
Notes
1. Accounting policies
The accounts have been prepared on a going concern basis and
under the historical cost convention, modified to include
the revaluation of investments at fair value and in accordance
with applicable accounting standards, pronouncements on interim
reporting issued by the Accounting Standards Board and with
the Statement of Recommended Practice for Investment Trusts
('SORP') dated January 2009.
For the period under review the Company's accounting policies
have not varied from those described in the Annual Report
and Financial Statements for the year ended 31 July 2011.
The Financial Statements have not been either audited or reviewed
by the Company's auditors.
2. Return/(loss) per ordinary share
Return/(loss) per ordinary share is based on the net loss
attributable to the ordinary shares of GBP9,066,000 (half
year ended 31 January 2011: return of GBP15,775,000; year
ended 31 July 2011: return of GBP17,855,000) and on the 20,467,717
weighted average number of shares (half year ended 31 January
2011: 20,822,816; year ended 31 July 2011: 20,737,127) in
issue.
Revenue return per ordinary share is based on the net revenue
return attributable to the ordinary shares of GBP42,000 (half
year ended 31 January 2011: GBP170,000; year ended 31 July
2011: GBP3,657,000) and on the 20,467,717 weighted average
number of shares (half year ended 31 January 2011: 20,822,816;
year ended 31 July 2011: 20,737,127) in issue.
Capital loss per ordinary share is based on the net capital
loss attributable to the ordinary shares of GBP9,108,000 (half
year ended 31 January 2011: return of GBP15,605,000; year
ended 31 July 2011: return of GBP14,198,000) and on the 20,467,717
weighted average number of shares (half year ended 31 January
2011: 20,822,816; year ended 31 July 2011: 20,737,127) in
issue.
3. Net asset value per ordinary share
Net asset value per ordinary share is based on the 20,395,541
(half year ended 31 January 2011: 20,758,425; year ended 31
July 2011: 20,521,675) ordinary shares in issue. During the
period ended 31 January 2012, 126,134 (half year ended 31
January 2011: 118,500; year ended 31 July 2011: 355,250) ordinary
shares were repurchased for cancellation at a total cost of
GBP607,000 (half year ended 31 January 2010: GBP634,000; year
ended 31 July 2011: GBP1,979,000). Since the period end a
further 5,000 shares have been repurchased for cash.
4. Management and performance fees
Management and performance fees are charged in accordance
with the terms of the management agreement. Performance fees
are provided for, based on the out-performance of the Company's
net asset value against the FTSE World Europe (ex UK) Index.
For the half year ended 31 January 2012, there was a performance
fee provision of GBP978,000 (half year ended 31 January 2011:
GBPnil and year ended 31 July 2011: GBP637,000).
5. Going concern
The Directors believe that it is appropriate to adopt the
going concern basis in preparing the financial statements.
The assets of the Company consist mainly of securities that
are readily realisable and, accordingly, the Company has adequate
financial resources to continue in operational existence for
the foreseeable future.
6. Interim dividend
An interim dividend of 5.0p per ordinary share will be paid
on 27 April 2012 to shareholders on the Register of Members
on 30 March 2012. The Company's shares will be quoted ex-dividend
on 28 March 2012. Based on the number of shares in issue on
21 March 2012, the cost of this dividend will be GBP1,020,000.
7. Comparative information
The financial information contained in this half year report
does not constitute statutory accounts as defined in section
434 of the Companies Act 2006. The financial information for
the half years ended 31 January 2011 and 31 January 2012 has
not been audited or reviewed by the Company's auditors. The
figures and financial information for the year ended 31 July
2011 are an extract based on the latest published accounts
and do not constitute 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 498(2)
or 498(3) of the Companies Act 2006.
8. General Information
a) Company Objective and Investment Style
Invests predominantly in large and medium sized companies
which are perceived to be undervalued in view of their growth
prospects or on account of a significant change in management
or structure. The Company's aim is to achieve a superior total
return from a portfolio of high quality European investments.
b) Company Status
Henderson EuroTrust plc is registered in England, No. 2718241,
has its registered office at 201 Bishopsgate, London EC2M
3AE and is listed on the London Stock Exchange. The SEDOL/ISIN
number is GB0004199294. The London Stock Exchange (EPIC) Code
is HNE.
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HENDERSON EUROTRUST PLC
Unaudited Results for the half year ended 31 January 2012
8. General Information (continued)
c) Directors and Secretary
The Directors of the Company are Mark Tapley (Chairman), John
Cornish, Joop Feilzer and David Marsh. The Secretary is Henderson
Secretarial Services Limited, represented by Ruth Saunders.
d) Website
Details of the Company's share price and net asset value,
together with general information about the Company, monthly
factsheets and data, profiles of the Board, copies of announcements,
reports and details of general meetings can be found at www.hendersoneurotrust.com
9. Half Year Report
The Half Year Report will be available in typed format on
the Company's website (www.hendersoneurotrust.com) or from
the Company's registered office, 201 Bishopsgate, London EC2M
3AE. An abbreviated version, the 'Update', will be circulated
to shareholders in late March.
For further information please contact:
Tim Stevenson
Portfolio Manager James de Sausmarez Sarah Gibbons-Cook
Henderson EuroTrust Director and Head of Investment Investor Relations and
plc Trusts PR Manager
Telephone: 020 7818 Henderson Global Investors Henderson Global Investors
4342 Telephone: 020 7818 3349 Telephone: 020 7818 3198
- ENDS -
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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