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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Henderson Smaller Companies Investment Trust Plc | LSE:HSL | London | Ordinary Share | GB0009065060 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 10.00 | 1.29% | 785.00 | 782.00 | 784.00 | 784.00 | 777.00 | 777.00 | 164,268 | 16:35:08 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -102.86M | -109.29M | -1.4630 | -5.36 | 585.66M |
From Apr 2019 to Apr 2024
TIDMHSL
RNS Number : 1824C
Henderson Smaller Cos Inv Tst PLC
17 January 2018
Legal Entity Identifier: 213800NE2NCQ67M2M998
THE HERSON SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Results for the Half-Year Ended 30 November 2017
This announcement contains regulated information
INVESTMENT OBJECTIVE
The Company aims to maximise shareholders' total returns (capital and income) by investing in smaller companies that are quoted in the United Kingdom.
PERFORMANCE HIGHLIGHTS
-- Net asset value ('NAV') total return(1) of +5.8% compared to a total return from the benchmark(2) of +2.2%
-- Share price(3) total return of +5.8% -- Interim dividend(4) increase of +20% to 6.0p (2017:5.0p)
TOTAL RETURN PERFORMANCE (including dividends reinvested)
Hot Features
Premium
6 Months 1 Year 3 Years 5 Years 10 Years
% % % % %
NAV(1) 5.8 34.7 64.8 144.2 245.8
Benchmark(2) 2.2 21.3 44.2 97.6 169.8
Share price(3) 5.8 37.8 63.4 159.6 304.4
Average Sector NAV(5) 3.7 27.3 57.6 126.6 222.4
Average Sector Share price(6) 5.3 33.9 58.1 130.3 233.0
FTSE All-Share Index -0.2 13.4 25.2 57.1 76.5
Sources: Morningstar Direct, Janus Henderson
1 Net asset value per ordinary share total return with income reinvested for 6 months, 1, 3 and 5 years and Capital NAV plus income for 10 years
2 Numis Smaller Companies Index (excluding investment companies) total return
3 Share price total return using mid-market closing price
4 Interim dividend of 6.0p (2017: 5.0p) to be paid to shareholders on 9 March 2018
5 Average NAV total return of the AIC UK Smaller Companies sector
6 Average share price total return of the AIC UK Smaller Companies sector
FINANCIAL HIGHLIGHTS
(Unaudited) (Unaudited) (Audited)
30 November 30 November 31 May
2017 2016 2017
Net assets GBP718.4 million GBP544.1 million GBP688.5 million
NAV per ordinary share 961.7p 728.3p 921.6p
Share price per ordinary share 831.5p 617.5p 799.0p
Total return per ordinary
share 53.1p 8.3p 206.6p
Revenue return per ordinary
share 9.1p 8.9p 19.6p
Dividend per ordinary share 6.0p 5.0p 18.0p
Gearing 8.7% 7.8% 9.2%
For further information please contact:
Neil Hermon Nathan Brown / David Benda Fund Manager Corporate Broking The Henderson Smaller Companies Investment Numis Securities Trust plc Telephone: 020 7260 1426/1275 Telephone: 020 7818 4351 James de Sausmarez Sarah Gibbons-Cook Director and Head of Investment Trusts Investor Relations and PR Manager Janus Henderson Investors Janus Henderson Investors Telephone: 020 7818 3349 Telephone: 020 7818 3198
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Half-Year ended 30 November 2017
You could be forgiven if you are feeling a little blue. After all, during this period you will have been exposed to a barrage of noise: economists bemoaning the United Kingdom's low productivity and politicians speaking of little else bar Brexit. Mute these distractions, though, and things seem a little better. For a start, we have many very successful smaller companies here in the United Kingdom and your Fund Manager, Neil Hermon, and his team have continued to successfully seek them out. Your Board believes that smaller companies remain a good investment for the long-term investor: they have materially outperformed markets as a whole over the past ten years. What is more, I am pleased to report that Neil has outperformed the benchmark in thirteen of the last fourteen financial years.
He outperformed in this period too. Our Company's net asset value rose on a total return basis by 5.8% for the period under review, 3.6% ahead of the Numis Smaller Companies Index (excluding investment companies), which rose by 2.2%. Our Company's share price rose by 5.8% on a total return basis for the period, when its peer group were on average up by 5.3%. The Company's discount has widened slightly from 13.3% at 31 May 2017 to 13.5% at 30 November 2017. I am glad to say that over the past five years, the Company's share price has risen by 160% on a total return basis, giving an annualised return to shareholders of 21.1%.
The Board has decided to increase the interim dividend by 20% to 6.0p per share. This reflects the continuing strong growth in the dividend payments from our portfolio companies. Absent of any unforeseen circumstances, it is expected the Board will also increase the final dividend. The final dividend for the year ended 31 May 2017 was 13.0p.
Along with all Investment Companies, we are required by new regulations introduced at the start of the year to provide investors with specific past performance scenarios, the calculation of which is prescribed by the regulation and is derived from the recent past performance of the trust. However, we do not believe that this is an appropriate or helpful way to estimate future returns and for this reason the results shown in the new documents should not be used for this purpose.
Finally, the merger of the Henderson Group with Janus Capital Group Inc. has successfully transacted with no discernible impact on our Company.
Jamie Cayzer-Colvin
Chairman
17 January 2018
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties associated with the Company's business fall broadly under the following categories:
-- Investment activity and strategy;
-- Accounting, legal and regulatory;
-- Operational risk; and
-- Financial instruments and the management of risk.
Detailed information on these risks is given in the Strategic Report and in the Notes to the financial statements in the Company's Annual Report for the year ended 31 May 2017.
In the view of the Board these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were to the six months under review.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge:
-- the condensed set of financial statements has been prepared in accordance with "IAS34 Interim Financial Reporting";
-- the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of the principal risks and uncertainties for the remaining six months of the year); and
-- the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
For and on behalf of the Board
Jamie Cayzer-Colvin
Chairman
17 January 2018
FUND MANAGER'S REVIEW
Half-Year ended 30 November 2017
Market Review - Six months to 30 November 2017
During the period under review a snap UK general election saw the Conservative Party lose its overall majority, the Bank of England raised interest rates for the first time in 10 years, the Federal Reserve started to shrink its balance sheet. Geopolitical tensions between North Korea and USA escalated sharply. Notwithstanding these events, UK equity markets held steady, aided by good earnings growth from corporates, helped by the devaluation of sterling and its positive effect on overseas profits.
Smaller companies outperformed larger companies over the period. This was driven principally by faster earnings growth and the mild recent appreciation of sterling versus the US$ having a negative impact on the large international earners in the FTSE 100.
Fund Performance
The Company outperformed the benchmark in the period. The net asset value rose 5.8%, on a total return basis. This compares with a rise of 2.2% (total return) in the Numis Smaller Companies Index (excluding investment companies). The outperformance came from a combination of underlying positive portfolio performance and a positive contribution from gearing in the Company.
Attribution Analysis
The tables below show the top five contributors to, and the bottom five detractors from, the Company's relative performance. Some of the following stocks are included in the benchmark index but not held by the Company. These have an effect on relative performance.
Top five contributors 6 month return Relative contribution
% %
-------------------------------- --------------- ----------------------
Renishaw +44.8 +0.9
-------------------------------- --------------- ----------------------
NMC Health +25.1 +0.8
-------------------------------- --------------- ----------------------
Bellway +25.4 +0.7
-------------------------------- --------------- ----------------------
Carillion(1) -91.8 +0.5
-------------------------------- --------------- ----------------------
Intermediate Capital +23.5 +0.5
-------------------------------- --------------- ----------------------
Top five detractors 6 month return Relative contribution
% %
-------------------------------- --------------- ----------------------
AA -33.8 -0.5
-------------------------------- --------------- ----------------------
Melrose -15.9 -0.5
-------------------------------- --------------- ----------------------
Wizz Air(1) +46.7 -0.4
-------------------------------- --------------- ----------------------
Interserve -65.2 -0.3
-------------------------------- --------------- ----------------------
Cineworld -22.9 -0.3
-------------------------------- --------------- ----------------------
(1) in benchmark index but not
held by the Company
Principal Contributors
Renishaw is a high technology precision measuring, calibration and additive manufacturing group; NMC Health is a diversified healthcare provider operating mainly in the Middle East; Bellway is a national UK housebuilder; Carillion is a UK construction and support services group; and Intermediate Capital is a provider and asset manager of specialised debt and alternative credit.
Principal Detractors
AA is a provider of roadside assistance and insurance services; Melrose is a turnaround specialist whose principal activities are currently in US ventilation and security; Wizz Air is an Eastern European based budget airline; Interserve is an international construction and support services group; and Cineworld is a UK and European cinema chain.
Portfolio Activity
Our approach is to consider our investments as long-term in nature and to avoid unnecessary turnover. The focus has been on adding stocks to the portfolio that have good growth prospects, sound financial characteristics and strong management, at a valuation level that does not reflect these strengths. Likewise we have been employing strong sell disciplines to dispose of stocks that fail to meet these criteria.
In the period we have added to a number of positions in our portfolio and increased exposure to those stocks we feel have further catalysts to drive strong performance.
New additions to the portfolio include Alpha Financial Markets, a consultant to the asset management industry; Arrow Capital, a debt management and purchase company; FootAsylum, a specialist sportswear retailer; IQE, a compound semiconductor company; Just Group, an enhanced annuity company; TI Fluid Systems, an automotive supplier; and Ultra Electronics, a defence company.
To balance the additions to our portfolio we have disposed of positions in companies which we felt were set for poor price performance or where the valuation had become extended, including the holdings of Abcam, Dunelm, Interserve, RPC, Spire Healthcare and Vectura. Additionally we sold our holdings in Imagination Technologies, Aldermore and Paysafe, all positions where the company has received an agreed takeover bid.
Market Outlook
Politically the environment in the UK remains uncertain. We have a hung parliament and a minority government, supported by a 'confidence and supply' arrangement with the DUP.
At the same time, the UK government is involved in Brexit negotiations with the EU. There is clearly a range of outcomes from these negotiations but what 'deal' the UK will end up with - if any - is, at this point, unclear. This uncertainty will probably cause some caution in the mind-set of UK consumers. At the same time they are facing the pressure of the rising cost of imported goods. This is squeezing consumers' net disposable income as wage inflation fails to match the cost of price inflation.
Outside the UK, economic conditions are strong, and if anything getting better, particularly in the US and Europe. With around half of the portfolios earnings from outside the UK we are well placed to benefit from this trend. The recent rises in US and UK interest rates have flagged to investors that loose global monetary conditions will at some stage reverse. However, the 'normalisation' of monetary policy should be a slow and measured process.
In the corporate sector, conditions are intrinsically stronger than they were during the financial crisis of 2008/2009. Balance sheets are more robust and dividends are growing.
In terms of valuations, the equity market is roughly in line with long-term averages. Merger and acquisition (M&A) activity remains a supportive feature for smaller companies. If corporate confidence improves, M&A is likely to increase. Indeed we have recently seen a number of bids for companies in our portfolio including Paysafe, Quantum Pharmaceutical, Aldermore, Servelec and SQS.
In this environment, and with a positive perspective on likely future medium-term returns from our portfolio we retain a moderate level of gearing, which stood at 8.7% at 30 November 2017.
In conclusion, the period under review has been a neutral one for the UK equity market. The Company's performance has been strong, with an absolute gain and outperformance compared to our benchmark. This has been principally due to good stock selection and, in general, our investments are trading well, are soundly financed and attractively valued. Additionally the smaller companies universe continues to throw up exciting growth opportunities in which the Company can invest.
Neil Hermon
Fund Manager
17 January 2018
INVESTMENT PORTFOLIO
at 30 November 2017
Valuation Portfolio Valuation Portfolio
Company GBP'000 % Company GBP'000 %
Bellway 27,696 3.55 Alfa Financial Software 8,001 1.03
Renishaw 21,579 2.76 Hunting 7,844 1.01
NMC Health 21,367 2.74 Oxford Instruments 7,594 0.97
Intermediate Capital 20,103 2.57 Just Group 7,531 0.96
Clinigen(1) 19,485 2.49 NCC 7,531 0.96
Paragon 17,308 2.22 Accesso(1) 7,470 0.96
Euromoney Institutional
Melrose Industries 16,592 2.12 Investor 7,456 0.95
Victrex 14,424 1.85 Ascential 7,436 0.95
Dechra Pharmaceuticals 12,354 1.58 Consort Medical 7,435 0.95
RWS(1) 11,336 1.45 Victoria(1) 7,159 0.92
---------- ---------- ---------- ----------
10 largest 182,244 23.33 40 largest 452,983 57.99
Scapa(1) 11,316 1.45 Fenner 7,132 0.91
Aveva 11,182 1.43 Grainger 7,100 0.91
Playtech 10,933 1.40 Coats 7,093 0.91
Sanne 10,768 1.38 GB Group(1) 6,992 0.90
Balfour Beatty 10,592 1.36 CLS 6,951 0.89
Burford Capital(1) 10,472 1.34 Convivialty(1) 6,826 0.87
Jupiter Fund Management 10,324 1.32 Tarsus Group 6,825 0.87
St Modwen Properties 10,258 1.31 Midwich(1) 6,750 0.86
Spectris 10,016 1.28 AA 6,699 0.86
John Laing 9,940 1.27 Gamma Communications(1) 6,633 0.85
---------- ---------- ---------- ----------
20 largest 288,045 36.87 50 largest 521,984 66.82
Ibstock 9,873 1.26 Equiniti 6,332 0.81
Synthomer 9,425 1.21 Ted Baker 6,310 0.81
Vesuvius 9,248 1.19 Cairn Energy 6,134 0.79
Northgate 9,229 1.18 Capital & Regional 6,120 0.78
OneSavings Bank 9,193 1.18 SuperGroup 5,916 0.76
SIG 9,128 1.17 Eurocell 5,805 0.74
Cineworld 8,387 1.08 TI Fluid Systems 5,753 0.74
Countryside 8,383 1.07 Alpha Financial Markets(1) 5,641 0.72
Brewin Dolphin 8,308 1.06 Tyman 5,564 0.71
Ultra Electronic 8,307 1.06 Bodycote 5,549 0.71
---------- ---------- ---------- ----------
30 largest 377,526 48.33 60 largest 581,108 74.39
---------- ----------
Remaining 53 200,031 25.61
---------- ----------
Total 781,139 100.00
====== ======
(1) Listed on the Alternative Investment Market (AIM)
STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
30 November 2017 30 November 2016 31 May 2017
Revenue Capital Total Revenue Capital Total Revenue Capital Total
return return return return return return return return return
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- ---------- -------- --------- ---------- -------- --------- ---------- ---------
Investment income 7,657 - 7,657 7,186 - 7,186 15,988 - 15,988
Other income 15 - 15 148 - 148 172 - 172
Gains on
investments
held at fair
value through
profit or loss - 38,158 38,158 - 649 649 - 145,291 145,291
--------- ---------- -------- --------- ---------- -------- --------- ---------- --------
Total income 7,672 38,158 45,830 7,334 649 7,983 16,160 145,291 161,451
Expenses
Management and
performance
fees (347) (4,773) (5,120) (270) (631) (901) (579) (4,674) (5,253)
Other expenses (309) - (309) (268) (5) (273) (566) - (566)
--------- ---------- -------- --------- ---------- -------- --------- ---------- --------
Profit before
finance
costs and
taxation 7,016 33,385 40,401 6,796 13 6,809 15,015 140,617 155,632
Finance costs (212) (495) (707) (182) (424) (606) (387) (903) (1,290)
--------- ---------- -------- --------- ---------- -------- --------- ---------- --------
Profit/(loss)
before
taxation 6,804 32,890 39,694 6,614 (411) 6,203 14,628 139,714 154,342
Taxation - - - - - - (10) - (10)
--------- ---------- -------- --------- ---------- -------- --------- ---------- --------
Profit/(loss) for
the
period and total
comprehensive
income 6,804 32,890 39,694 6,614 (411) 6,203 14,618 139,714 154,332
===== ====== ===== ===== ====== ===== ===== ====== =====
Earnings per
ordinary
share (note 3) 9.11p 44.03p 53.14p 8.85p (0.55)p 8.30p 19.57p 187.03p 206.60p
===== ====== ===== ===== ====== ===== ===== ====== ======
The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
(Unaudited)
Half-year ended 30 November 2017
Capital Other
Share redemption capital Revenue Total
capital reserve reserves reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----------------- ------------- ----------- ----------- -----------------
Total equity at 1 June
2017 18,676 26,745 623,009 20,030 688,460
Total comprehensive income:
Profit for the period - - 32,890 6,804 39,694
Transactions with owners,
recorded directly to equity:
Ordinary dividend paid - - - (9,711) (9,711)
---------- ---------- ---------- -------- -----------
Total equity at 30 November
2017 18,676 26,745 655,899 17,123 718,443
====== ====== ====== ===== ======
(Unaudited)
Half-year ended 30 November 2016
Capital Other
Share redemption capital Revenue Total
capital reserve reserves reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----------------- ------------- ----------- ----------- -----------------
Total equity at 1 June
2016 18,676 26,745 483,295 17,364 546,080
Total comprehensive income:
(Loss)/profit for the
period - - (411) 6,614 6,203
Transactions with owners,
recorded directly to equity:
Ordinary dividend paid - - - (8,217) (8,217)
---------- ---------- ---------- -------- -----------
Total equity at 30 November
2016 18,676 26,745 482,884 15,761 544,066
====== ====== ====== ===== ======
(Audited)
Year ended 31 May 2017
Capital Other
Share redemption capital Revenue Total
capital reserve reserves reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----------------- ------------- ----------- ----------- -----------------
Total equity at 1 June
2016 18,676 26,745 483,295 17,364 546,080
Total comprehensive income:
Profit for the period - - 139,714 14,618 154,332
Transactions with owners,
recorded directly to equity:
Ordinary dividend paid - - - (11,952) (11,952)
---------- ---------- ---------- --------- ----------
Total equity at 31 May
2017 18,676 26,745 623,009 20,030 688,460
====== ====== ====== ===== ======
The accompanying notes are an integral part of these financial statements.
BALANCE SHEET
(Unaudited)
Half-year (Unaudited) (Audited)
ended Half-year Year ended
30 November ended 30 November 31 May
2017 2016 2017
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------- ------------------- ------------
Non current assets
Investments held at fair value
through
profit or loss 781,139 586,553 751,736
----------- ----------- ----------
Current assets
Securities sold for future settlement 505 3 1,061
Taxation recoverable 19 11 19
Prepayments and accrued income 2,163 1,149 2,700
Cash and cash equivalents 201 2,209 3,829
----------- ----------- ----------
2,888 3,372 7,609
----------- ----------- ----------
Total assets 784,027 589,925 759,345
----------- ----------- ----------
Current liabilities
Securities purchased for future
settlement (691) (578) (5,830)
Accruals and deferred income (549) (477) (160)
Performance fee (3,965) - (3,324)
Bank loans (30,571) (15,012) (31,769)
----------- ----------- ----------
(35,776) (16,067) (41,083)
----------- ----------- ----------
Total assets less current liabilities 748,251 573,858 718,262
Non current liabilities (29,808) (29,792) (29,802)
----------- ----------- ----------
Net assets 718,443 544,066 688,460
====== ====== ======
Equity attributable to equity
shareholders
Called up share capital (note
5) 18,676 18,676 18,676
Capital redemption reserve 26,745 26,745 26,745
Retained earnings:
Capital reserves 655,899 482,884 623,009
Revenue reserve 17,123 15,761 20,030
----------- ----------- ----------
Total equity 718,443 544,066 688,460
====== ====== ======
Net asset value per ordinary share
(note 6) 961.7p 728.3p 921.6p
====== ====== ======
The accompanying notes are an integral part of these financial
statements.
STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited)
Half-year Half-year (Audited)
ended ended Year ended
30 November 30 November 31 May
2017 2016 2017
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------------- ------------- ------------
Profit before taxation 39,694 6,203 154,342
Interest payable 707 606 1,290
Gains on investments held at fair
value through profit or loss (38,158) (649) (145,291)
Purchases of investments (99,941) (64,299) (156,105)
Sales of investments 107,799 74,322 145,587
(Increase)/decrease in receivables (6) 145 (55)
(Decrease)/increase in amounts due
from brokers 556 667 (391)
Decrease/(increase) in accrued income 1,262 648 (703)
Increase in payables 1,200 134 3,132
Decrease/(increase) in amounts due
to brokers (5,139) 142 5,393
Taxation on investment income - 11 (6)
----------- ----------- -----------
Net cash inflow from operating activities
before interest and taxation 7,974 17,930 7,193
----------- ----------- -----------
Interest paid (693) (634) (1,298)
----------- ----------- -----------
Net cash inflow from operating activities 7,281 17,296 5,895
====== ====== ======
Financing activities
Equity dividends paid (9,711) (8,217) (11,952)
Repayment of bank loans (1,198) (17,094) (338)
----------- ----------- -----------
Net cash outflow from financing activities (10,909) (25,311) (12,290)
Decrease in cash and cash equivalents (3,628) (8,015) (6,395)
Cash and cash equivalents at the start
of the period 3,829 10,224 10,224
----------- ----------- -----------
Cash and cash equivalents at the period
end 201 2,209 3,829
====== ====== ======
The accompanying notes are an integral part of these financial statements.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. Accounting policies - basis of preparation
The Henderson Smaller Companies Investment Trust plc ('the Company')
is a company incorporated and domiciled in the United Kingdom
under the Companies Act 2006.
These condensed financial statements comprise the unaudited results
of the Company for the half-year ended 30 November 2017. They
have been prepared on a going concern basis and in accordance
with International Accounting Standard 34, "Interim Financial
Reporting", as adopted by the European Union and with the Statement
of Recommended Practice for Investment Trusts ("SORP") dated November
2014 and updated in January 2017 with consequential amendments,
where the SORP is consistent with the requirements of IFRS.
For the period under review the Company's accounting policies
have not varied from those described in the Annual Report for
the year ended 31 May 2017.
These financial statements have not been either audited or reviewed
by the Company's Auditor.
2. Expenses
Expenses, finance costs and taxation include provision for a performance
fee when the relevant criteria have been met. For the six months
to 30 November 2017 the performance fee provision is GBP3,965,000
(30 November 2016: GBPnil; 31 May 2017: GBP3,324,000). Any provision
for a performance fee is charged 100% to capital. The actual performance
fee, if any, payable to Janus Henderson for the year to 31 May
2018 will depend on outperformance over the full financial year,
subject to a cap on the total fees paid to Janus Henderson of
0.9% of the average value of the net assets of the Company during
the year. No performance fee is payable if on the last day of
the accounting year the Company's share price or NAV is lower
than the share price and NAV at the preceding year end. Details
of the performance fee arrangements are set out in the Annual
Report for the year ended 31 May 2017.
3. Earnings per ordinary share
The earnings per ordinary share figure is based on the net profit
for the half-year of GBP39,694,000 (30 November 2016: net profit
of GBP6,203,000; 31 May 2017: net profit of GBP154,332,000) and
on 74,701,796 (30 November 2016: 74,701,796; 31 May 2017: 74,701,796)
ordinary shares, being the weighted average number of ordinary
shares in issue during the period.
The earnings per ordinary share figure detailed above can be further
analysed between revenue and capital, as below.
(Unaudited) (Audited)
30 November (Unaudited) 31 May
30 November
2017 2016 2017
GBP'000 GBP'000 GBP'000
Net revenue profit 6,804 6,614 14,618
Net capital gain/(loss) 32,890 (411) 139,714
----------- ----------- -----------
Net total profit 39,694 6,203 154,332
====== ====== ======
Weighted average number
of
ordinary shares in issue
during
the period 74,701,796 74,701,796 74,701,796
Pence Pence Pence
---------------------------- ------------ -------------------- ----------------------- -------------------
Revenue profit per ordinary
share 9.11 8.85 19.57
Capital profit/(loss) per
ordinary share 44.03 (0.55) 187.03
--------- --------- ---------
Total earnings per ordinary
share 53.14 8.30 206.60
===== ===== ======
4. Dividends
The Board has declared an interim dividend of 6.0p (2017: 5.0p)
to be paid on 9 March 2018 to shareholders on the register at
the close of business on 16 February 2018. The ex dividend date
will be 15 February 2018. No provision has been made for the interim
dividend in these condensed financial statements.
The final dividend of 13.0p per ordinary share, paid on 9 October
2017, in respect of the year ended 31 May 2017, has been recognised
as a distribution in the period.
5. Share Capital
At 30 November 2017 there were 74,701,796 ordinary shares in issue
(30 November 2016: 74,701,796; 31 May 2017: 74,701,796). No shares
have been bought back or issued in the period ended 30 November
2017 (30 November 2016: nil; 31 May 2017: nil) or since the period
end.
6. Net Asset Value per Ordinary Share
The net asset value per ordinary share is based on the net assets
attributable to the equity shareholders of GBP718,443,000 (30
November 2016: GBP544,066,000; 31 May 2017: GBP688,460,000) and
on 74,701,796 (30 November 2016: 74,701,796; 31 May 2017: 74,701,796)
ordinary shares, being the number of ordinary shares in issue
at the period end.
7. Transaction Costs
Purchase transaction costs for the half-year ended 30 November
2017 were GBP313,000 (30 November 2016: GBP236,000; 31 May 2017:
GBP616,000). These comprise mainly stamp duty and commission.
Sale transaction costs for the half-year ended 30 November 2017
were GBP63,000 (30 November 2016: GBP78,000; 31 May 2017: GBP135,000).
8. Financial Instruments
The investments are held at fair value through profit or loss.
All the net current liabilities are held in the Balance Sheet
at a reasonable approximation of fair value. At 30 November 2017
the fair value of the Preference Stock was GBP4,000 (30 November
2016: GBP4,000; 31 May 2017: GBP4,000). The fair value of the
Preference Stock is estimated using the prices quoted on the exchange
on which the investment trades. The Preference Stock is carried
in the Balance Sheet at par.
The unsecured loan notes are carried in the Balance Sheet at par
less the issue expenses which are amortised over the life of the
notes. The fair value of the Unsecured Loan Notes is estimated
to be its par value.
The Preference Stock are categorised as level 1 in the fair value
hierarchy (see below for definitions). The unsecured loan notes
are categorised as level 3 in the fair value hierarchy.
Fair Value Hierarchy
The table below sets out the fair value measurements using the
IFRS 13 fair value hierarchy.
Categorisation within the hierarchy has been determined on the
basis of the lowest level of input that is significant to the
fair value measurement of the relevant asset as follows:
Level 1: quoted (unadjusted) market prices in active markets for
identical assets or liabilities;
Level 2: valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly
or indirectly observable; and
Level 3: valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
As at 30 Note Level 1 Level 2 Level 3 Total
November 2017
GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- ------------ -------------------- ----------------------- -------------------
Equity
investments a) 781,139 - - 781,139
----------- ----------- ----------- -----------
781,139 - - 781,139
====== ====== ====== ======
As at 30
November 2016 Note Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- ------------ -------------------- ----------------------- -------------------
Equity
investments a) 586,553 - - 586,553
----------- ----------- ----------- -----------
586,553 - - 586,553
====== ====== ====== ======
As at 31 May Note Level 1 Level 2 Level 3 Total
2017
GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- ------------ -------------------- ----------------------- -------------------
Equity
investments a) 751,736 - - 751,736
----------- ----------- ----------- -----------
751,736 - - 751,736
====== ====== ====== ======
a) Equity investments:
The fair value of the Company's investments in quoted equities
has been determined by reference to their quoted bid prices at
the reporting date. Quoted equities included in Fair Value Level
1 are actively traded on recognised stock exchanges.
The valuation techniques used by the Company are explained in
the accounting policies note 1(c) of the Annual Report for the
year ended 31 May 2017.
9. Going Concern
Having reassessed the principal risks and uncertainties, the Directors
consider that it is appropriate to continue to adopt the going
concern basis in preparing the financial statements. The assets
of the Company consist almost entirely of securities that are
readily realisable and, accordingly, the Company has adequate
financial resources to continue in existence for the foreseeable
future.
10. 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 of the Company during
the period. Details of related party transactions are contained
in the Annual Report for the year ended 31 May 2017.
11. Comparative Information
The financial information contained in this half-yearly financial
report does not constitute statutory accounts as defined in section
434 of the Companies Act 2006. The financial information for the
half-year periods ended 30 November 2017 and 30 November 2016
has not been audited.
The information for the year ended 31 May 2017 has been extracted
from the statutory accounts for that year, which have been filed
with the Registrar of Companies. The report of the auditors on
those accounts was unqualified and contained no statement under
either section 498(2) or section 498(3) of the Companies Act 2006.
12. General Information
The Henderson Smaller Companies Investment Trust plc is registered
in England and Wales, Company Number 00025526.
Registered office at 201 Bishopsgate, London EC2M 3AE
London Stock Exchange (TIDM) Code: HSL
SEDOL Number: 090650
Global Intermediary Identification Number (GIIN): WZD8S7.99999.SL.826
Legal Entity Identifier (LEI): 213800NE2NCQ67M2M998
Directors and Corporate Secretary
The Directors of the Company are Jamie Cayzer-Colvin (Chairman
of the Board), Beatrice Hollond (Chairman of the Audit Committee),
David Lamb, Victoria Sant and Mary Ann Sieghart (Senior Independent
Director).
The Corporate Secretary is Henderson Secretarial Services Limited,
represented by Rachel Peat FCIS.
Website
Details of the Company's share price and net asset value, together
with general information about the Company, monthly factsheets
and data, copies of announcements, reports and details of general
meetings can be found at www.hendersonsmallercompanies.com
13. Financial Report for the Half-Year ended 30 November 2017
The Half-Year Report will shortly be available in typed format
on the Company's website or from the Company's registered office.
An abbreviated version, the 'Update', will be circulated to shareholders
in January 2018 and will be available from the Corporate Secretary
at the Company's Registered Office, 201 Bishopsgate, London EC2M
3AE.
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
IR QDLFFVFFBBBL
(END) Dow Jones Newswires
January 17, 2018 11:05 ET (16:05 GMT)
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