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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Henderson Eurotrust Plc | LSE:HNE | London | Ordinary Share | GB00BP6QR382 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.00 | 0.66% | 153.50 | 152.50 | 154.00 | 153.50 | 152.00 | 152.00 | 60,893 | 10:05:17 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 52.76M | 48.84M | 0.2305 | 6.66 | 325.2M |
From Apr 2019 to Apr 2024
TIDMHNE
RNS Number : 9758S
Henderson Eurotrust PLC
06 October 2017
HERSON INVESTMENT FUNDS LIMITED
HERSON EUROTRUST PLC
LEGAL ENTITY IDENTIFIER: 213800DAFFNXRBWOEF12
6 October 2017
HERSON EUROTRUST PLC
Annual Financial Results for the year ended 31 July 2017
This announcement contains regulated information
Investment objective
Henderson EuroTrust plc ("the Company") aims to achieve a superior total return from a portfolio of high quality European (excluding the UK) investments.
Performance highlights
-- The net asset value ("NAV") per share total return (including dividends reinvested and excluding transaction costs) was 24.3% compared to a total return from the benchmark index, the FTSE World Europe (ex UK) Index of 24.6%.
-- Increased proposed annual dividend: final dividend 18.0p, (2016: 14.0p) producing a total dividend to be paid from revenue for the year of 25.0p (2016: 20.0p), an increase of 25% on the previous year.
-- As at 31 July 2017 the Company's shares were trading at a discount to NAV of 3.3%, in comparison to trading at a discount of 8.1% at the prior year end.
Hot Features
Premium
Total return performance (including dividends
reinvested and excluding transaction costs)
1 year 3 years 5 years 10 years
% % % %
------------------- ------- -------- -------- ---------
Net asset value
per ordinary
share(1) 24.3 58.1 129.3 164.2
Share price(2) 30.9 54.5 155.2 180.5
AIC Europe Sector
(Peer Group)
Average - net
asset value(3) 22.7 52.5 114.0 112.0
FTSE World Europe
(ex UK) Index 24.6 46.3 107.2 89.3
1 Source: Morningstar for the AIC using cum income fair value NAV for one, three and five years and capital NAV plus income reinvested for 10 years
2 Based on the mid-market share price
3 Size weighted average (shareholders' funds)
Source: Morningstar for the AIC
Financial Information
31 July 31 July
2017 2016
pence per pence
share per share
----------------------- ------------ ------------
Net Asset Value 1,192.8 979.0
Revenue Return 27.5 23.5
Dividends 25.0 20.0
CHAIRMAN'S STATEMENT
25th Anniversary
I hope that shareholders enjoy our 25th Anniversary booklet, which gives some longer term insights into the markets in which we invest and the approach followed by your Fund Manager, Tim Stevenson. Tim has been the Fund Manager of the Company's portfolio for all but the first two years of the Company's lifespan, and the Board strongly believes that the consistency of approach over more than two decades has been a key factor in the strong performance of the Company. Since inception the shares have provided a return of 14% per annum to investors, as compared with a return on the benchmark index of 10% per annum. Over 25 years, this means that (with income re-invested, but excluding re-investment costs) an investment of GBP1,000 in the Company would now be worth more than GBP26,000; an equivalent investment in the relevant index would be valued at over GBP10,000. The underlying portfolio has outperformed the benchmark in 20 of the 25 years, of which nine have been in the last decade. I hope shareholders will agree that this is indeed an impressive long term record.
It is worthwhile to look in a little more detail about what it means to take a consistent approach to investment decisions. "Buy and hold" investors, who stick by their decisions through the ups and downs in the market, are often lauded for their refusal to be swayed by market sentiment and their aversion to trading. But does such an approach really make sense? A portfolio compiled twenty years ago would necessarily omit all of the companies which were not listed at that time. Whilst many of the companies in the Company's portfolio have been in existence for many decades - L'Oréal in France or ING in the Netherlands, for example - others have not; at the end of the latest financial year, the portfolio included at least 15 companies which, in 1995, were not listed companies, such as Deutsche Post or Infineon (spun out of Siemens in 1999) or did not exist at all, such as Partners Group (the private markets investment manager).
The investment approach followed by your Fund Manager, both in the past and today, is to identify companies with sustainable businesses which have the potential to produce consistent dividend growth. We seek to do this on a "live" basis, assessing the investment opportunities of today, not just those of previous years; in addition, we seek to avoid over-concentration in industries, and to ensure that each holding is significant enough to contribute materially to performance. This means that, whilst the investment focus of the Company is very much on the long term, the Fund Manager is constantly seeking to adapt the portfolio to current opportunities. Two statistics spell out the Company's long-term investment view combined with short-term adaptability. 15 holdings in today's portfolio were first introduced in the 1990's. Seven positions have been in the portfolio for more than a decade. However, all but one of these holdings (Inditex) have been sold out of the portfolio at one time or another.
Speaking of active management, we hear much about the failure of the active management industry to outperform relevant benchmark indices, and the consequent shift to passive, or index investment. Some funds, albeit a minority, do outperform over a given period, as the Company has done in the majority of years since inception; however, one of the challenges in knowing how to assess such outperformance is that often the investment approach being followed today has changed beyond recognition, or some or all of the team which produced the performance are no longer in place. As the history in our Anniversary booklet mentions, this happened at the Company, with a change of both mandate and Fund Manager soon after launch. Since 1994, however, shareholders have benefited from consistent management and investment thinking - a steadying fact during periods of great swings in political change. Of course, there is always the risk of hubris in any recognition of investment success; I can assure shareholders that the Board is wholly aware of this, and that we remain focused on assessing and managing all of the risks facing the Company - whether in respect of the markets, the Manager, or the Fund Manager.
Annual performance
Turning to the year under review, whilst the discount narrowed post the sharp increase suffered by all European trusts in the wake of the Brexit vote in June 2016, and hence the share price materially outperformed the benchmark, the underlying portfolio was a little behind the index, with an increase in the NAV of 24.3% compared with 24.6%. In the first half of the last financial year there was a change in market leadership, as German and other bond yields rose, and political risk increased leading up to the US presidential election and elections in major European countries. More cyclical companies and banks saw quite sharp recoveries, and relative performance of our portfolio suffered for a short period; however, elections in the Netherlands, Austria and France resulted in more continuity than had been feared, the "reflation trade" following the election of Donald Trump largely failed to materialise, and by the year end virtually all of the underperformance had been recouped. The absolute return record is very satisfactory. The Company has achieved a return (both on the NAV and share price) ahead of the index and the peer group over 3, 5 and 10 years. Over ten years, AIC statistics indicate that the NAV performance of 164.2% was 74.9% ahead of the FTSE World Europe (ex UK) Index, while the share price performance of 180.5% was even better, reflecting a reduction in the discount to NAV over the period. This represents truly substantial value to shareholders, both in absolute terms, and relative to the benchmark index, net of all costs.
Fees
Following a formal review of the management fee arrangements, I am pleased to report that the Board has agreed a revised, and more favourable fee basis with the Manager which has taken effect from 1 August 2017. A tiered basis is being introduced to the base management fee such that the existing fee of 0.65% will only apply to the first GBP250m of net assets with the balance above that charged at a reduced rate of 0.55%. The performance fee arrangements have been amended such that no performance fee will be payable in respect of a period where either the share price or the net asset value per ordinary share are lower at the end of the period than at the beginning. In addition, there will be a new cap on the performance fee payable of 0.35% of average net assets over the period meaning the maximum total fees that can be paid in a period will be 1.0% rather than the current 1.3%. Details of these new fee arrangements are set out in the Annual Report.
Dividends
The Board proposes a final dividend to be paid from revenue of 18.0p, taking the total distribution for the year to 25.0p, an increase of 25% on last year and yet we are still increasing the revenue reserve. The Board were pleased to be able to increase the level of both the interim and final dividends. Dividends have been raised every year - by an average annual 8.9% - since 2005 (excluding special dividends).
Share issues and buybacks
No shares were issued or bought back during the year. In the aftermath of the EU Referendum vote, the Company's shares traded at a discount to NAV of over 10% on several occasions in the early part of the financial year. However, since the start of the calendar year, greater enthusiasm for European equities, coupled with a perceived increase in risk in respect of some other markets, resulted in a significant narrowing of the discount to NAV, which we very much welcome. Your Board continues to monitor the discount/premium actively and will take action to issue, or buyback shares, where it believes it is in the best interests of shareholders to do so.
Gearing
A modest level of gearing was maintained for most of the year under review; this added value. At the year-end, gearing was materially lower than the average for the year, at a very marginal 0.1% of assets. We continue to take an active approach to the use of gearing, and to keep the issue of longer term debt under consideration.
Board
As part of the Board's succession plan, John Cornish will be retiring as a Director at the Annual General Meeting. Over his ten year tenure as Director and Chairman of the Audit Committee, John has made a huge contribution to the Company; on a small Board such as ours, every individual's contribution is significant, but John's experience, availability and support have been much appreciated. We shall all miss him. I am, however, pleased to welcome Katya Thomson, who was appointed as a Director on 17 May 2017. With a first class honours degree in Economics and Political Economy, Katya is a Chartered Accountant, and has financial and commercial experience in both the UK and Russia. She is already making a positive contribution to your Board's deliberations; Katya will become Audit Chair following John's retirement at the conclusion of the Annual General Meeting.
I would also like to thank David Marsh CBE, who is Managing Director and Co-Founder of OMFIF (the Official Monetary and Financial Institutions Forum) for contributing his fascinating article on the European scene for our 25th Anniversary booklet. David will also be speaking at our special 25 year AGM in November.
Janus Henderson Investors
A merger between Henderson Group plc and Janus Capital Group, Inc. was announced in October 2016 and completed on 30 May 2017. The European investment team remains in the UK, and is indeed unchanged over the last year. As you would expect, the Board monitors such developments closely, and will continue to do so.
Annual General Meeting ("AGM")
Our meeting will be held on Wednesday 15 November 2017 at 12.00 noon at Janus Henderson Investors' offices at 201 Bishopsgate, London EC2M 3AE. Full details are set out in the Notice which has been sent to shareholders with this report. Marking the 25th Anniversary the AGM will be starting earlier than usual; Fund Manager, Tim Stevenson, and Director, David Marsh, will be giving special presentations at the AGM, providing a longer term perspective on the region and the portfolio. I hope as many shareholders as possible will be able to attend to take the opportunity to meet the Board and to hear the presentations. The AGM will be followed by a buffet lunch. Please see important details regarding attendance set out in my letter accompanying the Notice.
The Company's AGM, including the special presentations, will be broadcast live on the internet. If you are unable to attend in person, you can watch the meeting as it happens by visiting www.janushenderson.com/trustslive.
Outlook
For once, Europe is surprisingly fashionable as a destination for investors. Some of the political and economic difficulties predicted to beset Europe over the last financial year have failed to materialise, whilst risk is perceived to have risen elsewhere. Whether or not this greater enthusiasm continues, we intend to continue our policy of seeking out reliable growth companies, including those not necessarily in "conventional" growth sectors, and with a blend of some quality economic recovery companies where these meet our criteria. Political risk is higher than in the previous decade. This makes for a fluctuating environment where long-term judgement and experience will be essential prerequisites for stock-picking. As we enter our second quarter century the Company will face fresh challenges. We believe we are well equipped to meet them.
Nicola Ralston
Chairman
6 October 2017
PRINCIPAL RISKS AND UNCERTAINTIES
The Board, with the assistance of the Manager, has carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. In carrying out this assessment, the Board considered the market uncertainty arising from the result of the UK referendum to leave the European Union.
With the assistance of the Manager, the Board has drawn up a risk map facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objective and policy, in order to mitigate these risks as far as practicable. The Board policy on risk management has not materially changed from last year. The principal risks which have been identified and the steps taken by the Board to mitigate these are as follows:
-- Investment activity and performance
An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may result in underperformance against the Company's benchmark index and the companies in its peer group. The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings.
-- Portfolio and market
Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move rapidly. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on shareholders' funds. The Board reviews the portfolio at each meeting and mitigates risk through diversification of investments in the portfolio.
-- Regulatory
A breach of Section 1158 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage. The Manager is contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal controls reports produced by Janus Henderson on a quarterly basis, which confirm regulatory compliance.
-- Operational
Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its service providers may not provide the required level of service.
Details of how the Board monitors the services provided by Janus Henderson and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal controls section of the Corporate Governance Statement in the Annual Report. Further details of the Company's exposure to market risk (including market price risk, currency risk and interest rate risk), liquidity risk and credit and counterparty risk and how they are managed are contained in Notes to the Annual Report.
Borrowings
The Company has in place an unsecured loan facility which allows it to borrow as and when appropriate. GBP20 million is available under the facility. The maximum amount drawn down in the year under review was GBP20.0 million (2016: GBP15.0 million), with borrowing costs for the year totalling GBP50,000 (2016: GBP47,000). GBP2.9 million (2016: GBP1.3 million) of the facility was in use at the year end. Actual gearing at 31 July 2017 was 0.1% (2016: 0.6%) of net asset value.
Viability Statement
The Company is a long term investor; the Board believes it is appropriate to assess the Company's viability over a five year period in recognition of our long term horizon and what the Board believes to be investors' horizons, taking account of the Company's current position and the potential impact of the principal risks and uncertainties as documented in the Strategic Report contained in the Annual Report.
The assessment has considered the impact of the likelihood of the principal risks and uncertainties facing the Company, in particular investment strategy and performance against benchmark, whether from asset allocation or the level of gearing, and market risk, in severe but plausible scenarios, and the effectiveness of any mitigating controls in place.
The Directors took into account the liquidity of the portfolio and the borrowings in place when considering the viability of the Company over the next five years and its ability to meet liabilities as they fall due. This included consideration of the duration of the Company's borrowing facilities and how a breach of any covenants could impact on the Company's net asset value and share price.
The Directors do not expect there to be any significant change in the current principal risks and adequacy of the mitigating controls in place. Also the Directors do not envisage any change in strategy or objectives or any events that would prevent the Company from continuing to operate over that period as the Company's assets are liquid, its commitments are limited and the Company intends to continue to operate as an investment trust. Only a substantial financial crisis affecting the global economy could have an impact on this assessment. Whilst there is currently uncertainty in the markets due to the UK's negotiations to leave the European Union following last year's referendum result, the Board does not believe that this will have a long term impact on the viability of the Company and its ability to continue in operation.
Based on this assessment, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five year period.
Related Party Transactions
The Company's transactions with related parties in the year were with its Directors, and the Manager. There have been no material transactions between the Company and its Directors during the year and the only amounts paid to them were in respect of expenses and remuneration for which there were no outstanding amounts payable at the year end. Directors' shareholdings are disclosed in the Annual Report.
In relation to the provision of services by the Manager, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services there have been no material transactions with the Manager affecting the financial position of the Company during the year under review. More details on transactions with the Manager, including amounts outstanding at the year end, are given in the Notes to the Annual Report.
Statement of Directors' Responsibilities
In accordance with Disclosure Guidance and Transparency Rule 4.1.12, each of the Directors confirms that, to the best of his or her knowledge:
(a) the Company's Financial Statements, which have been prepared in accordance with UK Accounting Standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and
(b) the Strategic Report and Financial Statements include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
Nicola Ralston
Chairman
6 October 2017
FUND MANAGER'S REPORT
Overview and performance
It has, once again, been an interesting year for European markets. From the starting point a year ago characterised by apprehension about potential political turmoil if a "Brexit" snowball swept through Europe, to economic uncertainty as growth remained too sluggish, we have moved to a far more stable political and economic situation in Europe excluding the UK. Earnings growth has also finally begun to come through, and these factors combined have led to an increase in the index of 24.6%. Part of this has been the further fall of about 5.5% in Sterling, as the political and economic uncertainty in the UK post Brexit becomes more obvious. The Company has almost kept pace with the market performance and has shown a return of 24.3%.
Performance was marginally behind the index in our first six months as markets enthusiastically pursued economically sensitive names and also banks with potential for recovery, in preference to previous reliable growth companies. The market has been broader in our second half, and our exposure to some recovering banks such as Crédit Agricole has been increased. The table included in the Annual Report shows our main contributors and detractors (in terms of absolute contribution to performance). Amundi and ING, both held throughout the year, made a large contribution as did our position in Rubis. On the negative side one of our long standing holdings - BIC - was a laggard as the market expressed disappointment in a slower period of growth, which we believe will be transient. Nokia and Pandora also detracted from performance, but we see their problems as being more deep seated and we have sold both of these holdings.
Dividend income from our holdings has also been good over the year, rising by 19.3%. This increase is quite a bit higher than the overall estimated average earnings growth in European markets over the year, and reflects the strong income from some of our financial holdings, the decline in Sterling (adding to the value of the dividends received when translated back to Sterling) and the continuation of a higher pay-out ratio from many of our investments.
During the year we increased the size of the loan facility from GBP15m to GBP20m and have used most of that facility at times (see chart in the Annual Report), and this has enhanced returns. At the end of July very little of the facility was being used due to a short term concern about market levels. The total cost of borrowing (excluding the non-utilisation fee) during the year was GBP50,000 (2016: GBP47,000).
Portfolio changes and approach
In line with our expectations, bond yields have risen from a negative level to a small positive level (when measured by the German 10 year bond yield) as European economies have extended their recovery and as politics has moved away from the top of the agenda. One implication of this is that Financials should gradually be able to earn a positive interest margin, and this, combined with lower bad debt provisions and more demand for loans, should help banks see a recovery in earnings. The Company's exposure to Financials has increased from 17.0% at the end of July 2016 to 26.7% this year, mainly by increasing our exposure to existing holdings such as Crédit Agricole, Amundi, ING and UBS. Remember also that we have a number of investments in "non bank" financials, such as Munich Re., Deutsche Börse, Partners Group and Amundi, and the latter has been increased significantly over the year. In addition to this all our Bank holdings have appreciated markedly. After the French Presidential and Parliamentary Elections were completed, and given the increasing evidence of better growth and lower unemployment, it was, and still is, to be expected that the European Central Bank ("ECB") will begin to consider how to move to a more normal positive interest environment in an exceedingly cautious manner. This will help improve the financial sector earnings further.
During the year we have added eight new positions (Novo-Nordisk (Novo), Legrand, Siemens, Bayer, Vestas Wind Systems (Vestas), Vivendi, Koninklijke DSM and Philips Lighting).
Our focus continues to be on companies which have the ability to adapt to change in the face of what is likely to remain a relatively low growth environment. Novo's growth is driven by innovation and demographics as they remain world leader in Insulin and also have launched an obesity drug (Saxenda), and the shares are now markedly cheaper than they were a few years ago. Bayer is buying crop protection leader Monsanto and the drive for more efficient food production should enable steady growth. Vestas provides an investment in the world's leading manufacturer of wind power generators and there is an obvious need to reduce carbon emissions worldwide. We are also looking to make sure that we participate in the move to electric vehicles, and our investment in Infineon made a few years ago gives us access to energy and battery management systems.
Along with Financials mentioned above, we have also increased exposure to those companies which are poised to benefit from the much better economic environment in Europe currently. With the expectation that quantitative easing will be tapered over the next year or so, we believe it quite likely that European governments will increase expenditure on Infrastructure related projects, particularly those involving more efficient power generation and distribution. Obviously Vestas fits this from a wind generation point of view, but Siemens and Legrand also are likely to play a major role.
13 positions have been sold, bringing us back to well within our normal range of 50 to 55 holdings. The sales have been driven by fears of lower growth in the future (notably Nokia and Pandora) or by a feeling that a share was pricing in high expectations (such as Elis, Dufry, Nexity and Sunrise Communications). In selling Valeo and Autoliv we have moved totally away from any direct exposure to car manufacturing, as we feel that expectations here are too high in the short term. Turnover, as expressed by the lower of purchases or sales as a percentage of average assets, was 48.8% (45.6% and 43.6% in the two previous respective years).
Outlook
European equity markets have been drifting down since the results of the French elections. Once again the old adage of "travel and arrive" has proved true, as markets had perhaps jumped too quickly ahead of political calm and economic improvement. The headwinds in the next few months are likely to be the sharp rebound in the Euro against the US Dollar (Sterling is a sideshow although relevant as the base currency of the Company), as well as exaggerated fears about a tapering of the huge amount of quantitative easing undertaken in recent years by the ECB. Valuations of European equity markets are not high when seen through the lens of bond market valuations, and while I would not be surprised to see German 10 year bond yields rise towards 0.8%, I would see that as a healthy sign of relative normality rather than anything more ominous. Dividend yields remain very supportive of equities, as does a steady increase of around 10% in earnings predicted for 2017 and 2018 (even if the latter year may see some reduction due to Euro strength).
Overall I continue to feel that we are in a low growth era, and as such we shall continue our focus on reliable growth names, and remain wary of valuation levels which become too high relative to those growth expectations. This steady growth, combined with a reasonable pay-out of earnings to shareholders should enable us to continue the trend of a growing dividend as seen in the last few years.
Tim Stevenson
Fund Manager
6 October 2017
TWENTY LARGEST INVESTMENTS AS AT 31 JULY 2017
Market Percentage
Value of Portfolio
2017 2017
Company Country Sector GBP'000
--- -------------------- -------------- ------------------------- --------- --------------
Crédit
1 Agricole France Banks 9,931 3.93
Pharmaceuticals
2 Novo-Nordisk Denmark & Biotechnology 8,611 3.40
Bank and Asset
3 Amundi France Manager 8,442 3.34
4 Geberit Switzerland Toilet Systems 8,098 3.20
Deutsche Air Freight
5 Post Germany & Logistics 8,072 3.19
Fresenius
Medical
6 Care Germany Health Care 8,047 3.18
7 SAP Germany Enterprise Software 7,523 2.97
8 ING Netherlands Banks 6,920 2.74
Partners Private Equity
9 Group Switzerland Asset Manager 6,678 2.64
10 Rubis France Gas & Multiutilities 6,518 2.58
--- -------------------- -------------- ------------------------- --------- --------------
Top 10 78,840 31.17
-------------------------------------------------------------------- --------- --------------
Deutsche
11 Börse Germany Financial Services 6,494 2.57
Vestas Wind
12 Systems Denmark Wind Turbines 6,291 2.49
13 AXA France Insurance 6,252 2.47
14 Hermès France Luxury Goods 6,055 2.39
Channel Tunnel
15 Groupe Eurotunnel France Concession 6,038 2.39
16 Fresenius Germany Health Care 5,997 2.37
17 Munich Re. Germany Insurance 5,894 2.33
18 UBS Switzerland Banks 5,212 2.06
19 Legrand France Electrical Installations 5,156 2.04
20 Amadeus Spain Travel Software 5,150 2.04
--- ------------------ -------------- --------------------------- --------- --------------
Top 20 137,379 54.32
-------------------------------------------------------------------- --------- --------------
Sector exposure
As a percentage of the investment portfolio excluding cash
31 July 31 July
2017 2016
-------------------- -------- --------
Basic Materials 4.3 3.1
Consumer Goods 10.2 15.8
Consumer Services 8.3 9.2
Financials 26.7 17.0
Health Care 14.2 13.8
Industrials 18.7 21.6
Oil & Gas 5.8 2.8
Technology 6.0 8.2
Telecommunications 3.2 5.3
Utilities 2.6 3.1
Index Derivatives 0.0 0.1
Geographic exposure
As a percentage of the investment portfolio excluding cash
31 July 31 July
2017 2016
------------- -------- --------
Denmark 5.9 1.5
Finland 0.0 1.8
France 32.0 33.5
Germany 25.1 23.5
Ireland 1.4 2.1
Italy 1.9 2.4
Netherlands 12.3 7.3
Norway 2.0 1.4
Spain 4.6 5.0
Sweden 2.5 4.0
Switzerland 12.3 17.5
Market capitalisation of the portfolio
% Portfolio weight % Benchmark weight
Market cap at 31 July 2017 at 31 July 2017
------------------- ------------------- -------------------
>EUR20bn 62.7 65.9
EUR10bn - EUR20bn 26.1 16.7
EUR5bn - EUR10bn 1.8 12.4
EUR1bn - EUR5bn 7.7 4.9
<EUR1bn 1.7 0.1
------------------- ------------------- -------------------
AUDITED INCOME STATEMENT
Year ended 31 Year ended 31
July 2017 July 2016
Revenue Capital Total Revenue Capital Total
return return return return return return
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on investments
held
at fair value through
profit or loss
(note 2) - 45,190 45,190 - 19,120 19,120
Investment income
(note 3) 7,407 - 7,407 6,206 - 6,206
--------- ---------- --------- --------- ---------- ---------
Gross revenue and
capital
gains 7,407 45,190 52,597 6,206 19,120 25,326
Management and performance
fees (306) (1,222) (1,528) (248) (2,131) (2,379)
Other administrative
expenses (463) - (463) (389) - (389)
--------- ---------- --------- --------- ---------- ---------
Net return on ordinary
activities before
finance costs and
taxation 6,638 43,968 50,606 5,569 16,989 22,558
Finance costs (10) (40) (50) (9) (38) (47)
--------- ---------- --------- --------- ---------- ---------
Net return on ordinary
activities before
taxation 6,628 43,928 50,556 5,560 16,951 22,511
Taxation on net return
on ordinary activities (811) - (811) (601) - (601)
--------- ---------- --------- --------- ---------- ---------
Net return on ordinary
activities after
taxation 5,817 43,928 49,745 4,959 16,951 21,910
===== ===== ===== ===== ===== =====
Return per ordinary
share-
basic and diluted
(note 4) 27.5p 207.3p 234.8p 23.5p 80.1p 103.6p
===== ===== ===== ===== ===== =====
The total return column of this statement represents the Income Statement of the Company.
All revenue and capital items in the above statement derive from continuing operations.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
The Company had no recognised gains or losses other than those disclosed in the Income Statement.
AUDITED STATEMENT OF CHANGES IN EQUITY
Called
up Share Capital Total
share premium redemption Capital Revenue Shareholders'
Year ended 31 capital account reserve reserves reserve funds
July 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 August 2016 1,060 41,032 263 159,236 5,823 207,414
Net return on
ordinary activities
after taxation - - - 43,928 5,817 49,745
Final dividend
paid in respect
of
the year ended
31 July 2016
(paid 23 November
2016) - - - - (2,966) (2,966)
Interim dividend
paid in respect
of
the year ended
31 July 2017
(paid 28 April
2017) - - - - (1,483) (1,483)
---------- ----------- ---------- ----------- ---------- ------------
At 31 July 2017 1,060 41,032 263 203,164 7,191 252,710
====== ====== ====== ======= ====== =======
Called
up Share Capital Total
share premium redemption Capital Revenue Shareholders'
Year ended 31 capital account reserve reserves reserve funds
July 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 August 2015 1,038 37,114 263 142,454 4,886 185,755
Net return on
ordinary activities
after taxation - - - 16,951 4,959 21,910
Ordinary shares
issued 22 3,926 - - - 3,948
Issue cost - (8) - - - (8)
Buyback of 20,000
ordinary shares
held in treasury - - - (169) - (169)
Final dividend
paid in respect
of
the year ended
31 July 2015
(paid 23 November
2015) - - - - (2,750) (2,750)
Interim dividend
paid in respect
of
the year ended
31 July 2016
(paid 29 April
2016) - - - - (1,272) (1,272)
---------- ----------- ---------- ----------- ---------- ------------
At 31 July 2016 1,060 41,032 263 159,236 5,823 207,414
====== ====== ====== ======= ====== =======
AUDITED STATEMENT OF FINANCIAL POSITION
As at 31 July
2017 2016
GBP'000 GBP'000
----------------------------------- --------------------- ---------------------
Fixed assets
Fixed asset investments held
at fair value through
profit or loss
Listed at market value - overseas 252,926 208,660
---------- ----------
Current assets
Debtors 865 1,066
Cash and cash equivalents 2,494 624
--------- ---------
3,359 1,690
Creditors: amounts falling
due within one year (3,575) (2,936)
--------- ---------
Net current liabilities (216) (1,246)
--------- ---------
Total assets less current
liabilities 252,710 207,414
--------- ---------
Net assets 252,710 207,414
====== ======
Capital and reserves
Called up share capital 1,060 1,060
Share premium account 41,032 41,032
Capital redemption reserve 263 263
Capital reserves 203,164 159,236
Revenue reserve 7,191 5,823
----------- -----------
Total shareholders' funds 252,710 207,414
====== ======
Net asset value per ordinary
share
(basic and diluted) 1,192.8p 979.0p
====== ======
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
Basis of preparation
The Company is a registered investment company
as defined in Section 833 of the Companies
Act 2006 and is incorporated in the United
Kingdom. It operates in the United Kingdom
and is registered at the address in the Annual
Report.
The Financial Statements have been prepared
in accordance with Companies Act 2006, FRS102,
The Financial Reporting Standard applicable
in the UK and Republic of Ireland (which is
effective for periods commencing on or after
1 January 2015) and with the Statement of
Recommended Practice: Financial Statements
of Investment Trust Companies and Venture
Capital Trusts ("the SORP") issued in November
2014 and updated in January 2017 with consequential
amendments.
The Company has early adopted the amendments
to FRS 102 in respect of fair value hierarchy
disclosures as published in March 2016.
The principal accounting policies applied
in the presentation of these Financial Statements
are set out below. These policies have been
consistently applied to all the years presented.
There have been no significant changes to
the accounting policies compared to those
set out in the Company's Annual Report for
the year ended 31 July 2016.
As an investment fund the Company has the
option, which it has taken, not to present
a cash flow statement. A cash flow statement
is not required when an investment fund meets
all the following conditions: substantially
all of the entity's investments are highly
liquid, substantially all of the entity's
investments are carried at market value, and
the entity provides a statement of changes
in equity. The Directors have assessed that
the Company meets all of these conditions.
The Financial Statements have been prepared
under the historical cost basis except for
the measurement at fair value of investments.
In applying FRS102, financial instruments
have been accounted for in accordance with
Section 11 and 12 of the standard. All of
the Company's operations are of a continuing
nature.
Going concern
The assets of the Company consist of securities
that are readily realisable and, accordingly,
the Directors believe that the Company has
adequate resources to continue in operational
existence for at least twelve months from
the date of approval of the Financial Statements.
Having assessed these factors, the principal
risks and other matters discussed in connection
with the viability statement, the Board has
determined that it is appropriate for the
Financial Statements to be prepared on a going
concern basis.
2. Gains on investments held at fair value through
profit or loss
2017 2016
GBP'000 GBP'000
Gains on sale of investments
based on historical cost 26,010 11,725
Less: Revaluation gains recognised
in previous years (20,233) (15,555)
---------- ----------
Gains/(losses) on investments
sold in the year based on carrying
value at previous statement
of financial position date 5,777 (3,830)
Revaluation of investments held
at 31 July 40,020 23,293
Exchange losses (607) (343)
---------- ----------
45,190 19,120
====== ======
3. Investment income 2017 2016
GBP'000 GBP'000
------------------------------------- ----------- -----------
Overseas dividend income 7,407 6,018
Overseas stock dividend income - 188
---------- ----------
7,407 6,206
===== =====
4. Return per ordinary share - basic and diluted
The total return per ordinary share is based
on the net return attributable to the ordinary
shares of GBP49,745,000 (2016: GBP21,910,000)
and on 21,185,541 ordinary shares (2016: 21,149,557)
being the weighted average number of shares
in issue during the year.
The total return can be further analysed as
follows:
2017 2016
GBP'000 GBP'000
------------------------------------- ----------- -----------
Revenue return 5,817 4,959
Capital return 43,928 16,951
---------- ----------
Total return 49,745 21,910
====== ======
Weighted average number of ordinary
shares 21,185,541 21,149,557
Revenue return per ordinary
share 27.5p 23.5p
Capital return per ordinary
share 207.3p 80.1p
---------- ----------
Total return per ordinary share 234.8p 103.6p
====== ======
The Company has no securities in issue that
could dilute the return per ordinary share.
Therefore the basic and diluted return per
ordinary share are the same.
5. Dividends on ordinary shares
2017
GBP'000
------------------------------------------------------------------ ------------
Revenue available for distribution by
way of dividend for the year 5,817
Interim dividend of 7.0p paid 28 April
2017 (1,483)
Proposed final dividend for the year ended
31 July 2017 of 18.0p
(based on 21,185,541 ordinary shares in
issue at 6 October 2017) (3,813)
-----------
Undistributed revenue for section 1158
purposes* 521
======
*Undistributed revenue comprises 7.0% (2016:
11.6%) of the total income of GBP7,407,000 (2016:
GBP6,206,000).
The proposed final dividend of 18.0p per share
for the year ended 31 July 2017 is subject to
approval by shareholders at the Annual General
Meeting and has not been included as a liability
in these financial statements. The proposed
final dividend of 18.0p per ordinary share will
be paid on 22 November 2017 to shareholders
on the register of members at the close of business
on 20 October 2017. The shares will be quoted
ex-dividend on 19 October 2017.
All dividends have been paid or will be paid
out of revenue profits.
6. Net asset value per ordinary share (basic and
diluted)
The net asset value per ordinary share of 1,192.8p
(2016: 979.0p) is based on the net assets attributable
to ordinary shares of GBP252,710,000 (2016:
GBP207,414,000) and on 21,185,541 (2016: 21,185,541)
ordinary shares in issue at the year end. There
were 20,000 shares held in Treasury at the year
end (2016: 20,000).
7. Called up share capital
Number Nominal
of shares Total value
entitled number of shares
to dividend of shares GBP'000
----------------------------- ---------------- ---------------- ------------
Ordinary shares of 5p
each authorised - 75,000,000 3,750
======== =====
Balance at the end of
the year ended 31 July
2016 21,185,541 21,205,541 1,060
New shares issued in
the year - - -
Shares bought back in
the year: held in treasury - - -
--------------- --------------- ----------
At 31 July 2017 21,185,541 21,205,541 1,060
======== ======== =====
During the year no ordinary shares were issued
(2016: 450,000) or repurchased (2016: 20,000).
Since 31 July 2017, no further shares have been
issued or repurchased.
8. 2017 Financial information
The figures and financial information for the
year ended 31 July 2017 are extracted from the
Company's Annual Financial Statements for that
period and do not constitute statutory financial
statements for that period. The Company's Annual
Financial Statements for the year ended 31 July
2017 have been audited but have not yet been
delivered to the Registrar of Companies. The
Independent Auditors' Report on the 2017 Financial
Statements was unqualified, did not include
a reference to any matter to which the Auditors
drew attention without qualifying the report,
and did not contain any statements under sections
498(2) and 498(3) of the Companies Act 2006.
9. 2016 Financial information
The figures and financial information for the
year ended 31 July 2016 are extracted from the
Company's Annual Financial Statements for that
period and do not constitute statutory financial
statements for that period. The Company's Annual
Financial Statements for the year ended 31 July
2016 have been audited and delivered to the
Registrar of Companies. The Independent Auditors'
Report on the 2016 Financial Statements was
unqualified, did not include a reference to
any matter to which the Auditors drew attention
without qualifying the report, and did not contain
any statements under sections 498(2) and 498(3)
of the Companies Act 2006.
10. Annual Report and Annual General Meeting
The Annual Report for the year ended 31 July
2017 will be posted to shareholders in October
2017 and copies will be available from the Corporate
Secretary at the Company's Registered Office,
201 Bishopsgate, London EC2M 3AE.
The Annual General Meeting will be held at the
registered office on Wednesday 15 November 2017
at 12.00 noon. The Notice of the Annual General
Meeting will be posted to shareholders with
the Annual Report.
11. Website
This document, and the Annual Report for the
year ended 31 July 2017, will be available on
the following website: www.hendersoneurotrust.com.
For further information please contact:
Tim Stevenson James de Sausmarez
Fund Manager, Henderson Director and Head of Investment
EuroTrust plc Trusts,
Telephone: 020 7818 4342 Janus Henderson Investors
Telephone: 020 7818 3349
Sarah Gibbons-Cook
Investor Relations and
PR Manager,
Janus Henderson Investors
Telephone: 020 7818 3198
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
FR OKADNNBDDAKK
(END) Dow Jones Newswires
October 06, 2017 09:38 ET (13:38 GMT)
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