Source - RNS
RNS Number : 1629M
Henderson Eurotrust PLC
10 October 2016
 

The issuer advises that the following replaces the Final Results announcement released on 10 October 2016 at 16:34pm under RNS number 1585M.

 

The ex-dividend date should have been 20 October 2016 and not 17 October 2016 and the record date should have been 21 October 2016 and not 18 October 2016.

 

All other details remain unchanged. The full amended text appears below.

 

 

HENDERSON EUROTRUST PLC

Annual Report for the year ended 31 July 2016

 

Investment objective

The objective of Henderson EuroTrust plc ("the Company") is to invest 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 aims to achieve a superior total return from a portfolio of high quality European investments.

 

Performance highlights

•           The net asset value ("NAV") per share total return (including dividends reinvested and excluding transaction costs) was 11.7% compared to a total return from the benchmark index, the FTSE World Europe (ex UK) Index of 7.1%.

•           Increased proposed annual dividend: final dividend 14.0p, (2015: 13.0p) producing a total dividend for the year of 20.0p (2015: 18.50p), an increase of 8.1% on the previous year.

•           As at 31 July 2016 the Company's shares were trading at a discount to NAV of 8.1%, in comparison to trading at a small premium of 0.7% at the prior year end.

 

 

Total return performance (including dividends reinvested and excluding transaction costs)


1 year

%

3 years

%

5 years

%

10 years

%

Net asset value per ordinary share1

11.7

34.1

76.3

150.4

Share price2

2.0

32.5

87.9

154.2

AIC Europe Sector (Peer Group) Average - net asset value3

7.6

28.7

65.2

116.4

FTSE World Europe (ex UK) Index

7.1

22.2

45.0

84.5



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)

 

 

 

 

 

 

Chairman's Statement

 

The year under review has been challenging, particularly just prior to and after the Brexit referendum. The vote to leave came as a big surprise to markets and, while the share price discount has widened as a consequence, stock markets have held up well and the portfolio has benefited from being invested entirely outside the UK.

 

Performance

Against this background, I am pleased to report that the net assets of the Company rose by 11.7% on a total return basis, outperforming our benchmark, the FTSE World Europe (ex UK) Index by 4.6% in sterling terms, a very considerable margin.  This is the ninth consecutive year of outperformance of the benchmark and is welcome evidence of the strength of our Fund Manager's investment approach. As a consequence of this strong performance, a performance fee has again been earned. Your Board continues to believe that a combination of a lower base fee and a performance fee arrangement is in the best interests of shareholders. The ongoing charge for the year, being the management fee and other non-interest expenses as a percentage of shareholders' funds, was 0.87% (2015: 0.84%) excluding the performance fee and 1.49% (2015: 1.35%) including the performance fee. 

 

Dividends

The Board proposes a final dividend of 14.0p, taking the total distribution for the year to 20.0p, an  increase of 8.1% on last year following significant rises in distributions from our companies and benefitting from the depreciation in Sterling during the year. The Board were pleased to be able to increase the level of both the interim and final dividends and will continue to keep the balance between the two under review. Although the yield on our portfolio, at approximately 2.2%, is not high in absolute terms, it is materially above the level available on cash deposits, and we recognise that dividend growth is important to shareholders. Dividends have been raised every year - by an average annual 13.9% - since 2005 (excluding special dividends).

 

Share Issues and Buybacks

Your Company's shares have traded consistently at a better rating than most of its peer group. In the early part of the year, demand was such that the shares traded close to net asset value and at times at a premium, which enabled us to issue 450,000 shares in total. We had hoped to continue to issue stock, and expand the assets and hence the liquidity of the Company's shares. In the immediate pre and post Brexit environment, however, significant discounts to Net Asset Value have again become a feature: the discount on the European investment trust sector (in which the Company is categorised), was over 1% at the end of 2015, but briefly rose to over 13% post the Brexit vote. Your shares ended the year at an 8.1% discount, slightly below the discount of nearly 10% for the sector. Given the good performance of Net Asset Value, both in absolute terms and relative to its benchmark index, it is disappointing to see the shares again trading at a significant discount to Net Assets. However, your Board continues to monitor the discount/premium actively and will take action to issue, or to buy back shares where it believes it is in the best interests of shareholders to do so. A small share buy-back of 20,000 shares was completed just prior to the year end at a discount of 12.2%. 

 

Gearing

A modest level of gearing was maintained for most of the year under review; this added value, but the gearing was largely taken off following the Brexit referendum result. At the year-end, gearing was 0.6% 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, Joop Feilzer will be retiring as a director at the Annual General Meeting. Joop's extensive business experience and his first-hand knowledge of Continental Europe has been invaluable for both the Board and the Fund Manager. We shall miss his wise counsel and advice. I am delighted that Rutger Koopmans has joined the Board in his place. Rutger has widespread experience in Europe in international corporate banking, project finance and corporate finance, as well as insurance, and is already making a positive contribution to your Board's deliberations.

 

Annual General Meeting

Our meeting will be held on Wednesday 16 November 2016 at 2.30pm at Henderson's offices at 201 Bishopsgate, London EC2M 3AE. Full details of the business of the meeting are set out in the Notice which has been sent to shareholders with the Annual Report. We would encourage as many shareholders as possible to attend for the opportunity to meet the Board and to watch a presentation from Tim Stevenson reviewing the year and looking forward to the year ahead.

 

The Company's AGM 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.henderson.com/trustslive.

 

Outlook

As the Company is dedicated to invest in European companies outside the UK,  we inevitably take a close interest in the consequences of the vote by the UK to leave the European Union, not simply from a UK perspective, but also in respect of potential reform of the Union by the remaining members. The unexpected outcome has focussed attention on the financial stresses associated with ultra-low, or negative, bond yields across Europe and the political consequences of such a low-growth environment. European economies also face a wide range of non-financial pressures, including the continuing migrant crisis and the risk of terrorist attacks.   These issues can be resolved only over the medium to long term, if at all, and in the meantime there is plenty of scope for political upheaval in the markets in which we are invested. 

 

Despite these challenges, however, I believe there are a number of reasons for us to have confidence in the outlook for the Company. First, in Tim Stevenson, we have a proven and outstanding Fund Manager, who has been in charge of the Company's investments for over twenty years, and has a track record to be very proud of. Tim and his team's deep knowledge of European companies, and his commitment to seeking out those companies able to achieve consistent growth remain reasons for optimism. Second, many outstanding global businesses are based in Europe, and are in the portfolio on the underlying strength of their product offering regardless of geography. Third, there are good reasons for thinking that growth in Europe will rise over the next two years, partly because of fiscal expansion on top of already considerable monetary easing. Finally, although the valuation of the companies in our portfolio is higher than that of the market as a whole the low or, in some cases, negative yields available on supposedly "low risk" investments seem likely to support equities capable of generating a growing income to shareholders. These are the companies which remain the focus of our portfolio.

 

 

Nicola Ralston

Chairman

10 October 2016

 

 

 

Principal risks and uncertainties

The Board, with the assistance of Henderson, 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 on leaving the European Union.

 

The Board has drawn up a matrix of risks 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 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. Henderson is contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal controls reports produced by 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 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.

 

Related Party Transactions

The Company's transactions with related parties in the year were with its Directors, and Henderson. 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.

 

In relation to the provision of services by Henderson, 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 Henderson affecting the financial position of the Company during the year under review. More details on transactions with Henderson, including amounts outstanding at the year end, are given in the Notes to the Annual Report.

 

Borrowing

The Company has in place an unsecured loan facility which allows it to borrow as and when appropriate. £15 million is available under the facility. The maximum amount drawn down in the year under review was £15.0 million (2015: £14.9 million), with borrowing costs for the year totalling £47,000 (2015: £56,000). £1.3 million (2015: £8.0 million) of the facility was in use at the year end. Actual gearing at 31 July 2016 was 0.6% (2015: 3.5%) of net asset value.

 

Viability Statement

The Company is a long term investor; we believe it is appropriate to assess the Company's viability over a three year period in recognition of our long term horizon and what we believe to be investors' horizons, taking account of the Company's current position and the potential impact of the principal risks and uncertainties as documented above in this Strategic 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 three 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 following the UK referendum result to leave the European Union, the Directors do 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 Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next three year period.

 

Statement of Directors' Responsibilities

In accordance with Disclosure 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 on a going concern basis, 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

10 October 2016

 

 

 

Fund Manager's Report

 

Overview and performance

It has been an eventful year for European markets. The Company has performed better than the benchmark index ("Index"), with an appreciation of 11.7% compared with the Index against which we are measured showing an appreciation of 7.1%. While in local currency terms European markets have made scant gains, the 16% depreciation in Sterling (€:£ from 1.42 to 1.18) has helped the value of our holdings. The year-end NAV was close to an all-time high, but given the increase in uncertainty the shares traded at a discount of 8.1% having traded at a premium for much of the year.

The income achieved from our holdings has also risen sharply (flattered by the aforementioned depreciation in Sterling), but driven also by profits from our companies which have tended to rise by more than the market average. These higher earnings have in many cases been passed on to shareholders through increased dividends. As a result the Company is proposing to raise the dividend (subject to approval by the shareholders) by 8.1%, giving shareholders a dividend yield of 2.2%. We have now increased the dividend for the last 12 years.

In very simple terms, our policy of investing in "good quality, consistent, reliable companies that can increase their return to us as shareholders" has really paid off over the last twelve and indeed twenty-four months. The result has been a portfolio that has appreciated in value while also paying an income which is well ahead of bank interest rates.

Both performance and income have been enhanced by the utilisation of most of our                   £15million borrowing facility since January this year. With the cost of borrowing so low (total cost throughout the year, including the non-utilisation fee, has been £58,000), there is an obvious benefit to being invested in companies that are increasing their earnings and paying a dividend to shareholders.  At the end of the year we decided to remove this gearing in the light of the outcome of the UK's referendum vote to leave the European Union ("EU Referendum"). I will add more on this later in this report; one indirect impact has been an increase in the level of turnover in the portfolio to 45.6% (43.6% in the previous year).

Each year for the last few years, when writing this report in August just after the Company's financial year-end, I have referred to the ever longer list of worries facing markets. This year is no exception. The outcome of the EU referendum undoubtedly increases the level of uncertainty throughout Europe. There are likely to be further periods of waning confidence in the Euro, with critical voices emanating from the UK as well as from within the Euro area itself. As I have mentioned in the past, the UK press tends to have an overwhelmingly pro-British / anti-European view, and, in my opinion, that bias understates the economic recovery in Europe and over-estimates the resilience of the UK. The weakness in Sterling over the last twelve months does indicate that currency traders share some concern about the UK's vulnerability. The UK Government meanwhile seems willing to use the competitive devaluation tool.

Notwithstanding those comments, there is growing frustration at low growth in Europe, and high unemployment in many countries. Recent trends have nevertheless been better, with unemployment declining in those areas worst affected.  Industrial production and retail sales are improving and government debt is stabilising or even declining. Bearing in mind my long-held view that we are stuck in an environment of low growth, there is at least some solace in looking at a small trend of improvement - the glass is as half full as it is half empty.

The next eighteen months will see a number of political uncertainties, including the presidential elections in the USA. However, the elections in France will be stressful and criticism of Chancellor Merkel is increasing as well. Before that, the referendum called on electoral reform in Italy (which makes complete sense) risks being hijacked and turned into a referendum on Prime Minister Renzi.

There continues to be an underlying tension in the markets, which has continued for some years but at some stage may reach a level which could cause a sharp correction. That tension is the ever lower interest rates as the ECB holds rates at a negative level, forcing many ten year bond yields to fall into negative territory, balanced against investors looking for any place to gain an income. These lower interest rates are supporting a large part of the market, as companies that can reliably compound their earnings and dividends do just that and get revalued, while some areas such as banks look ever weaker. If governments decide to move down a more fiscally expansive route (bearing in mind that many are better positioned than a few years ago, albeit a "less bad" rather than a "good" situation), then bond prices may decline as interest rates start to rise, even by a small amount. This may have repercussions on the equity market, but I believe these are manageable and ultimately positive. 

 

Portfolio Changes and Approach

We have allowed the number of holdings to expand to 56 (excluding derivatives and unquoted investments) over the last year, slightly above our usual 50 - 55 holdings. There have been thirteen total sales (Atlantia, SCA, Bayer, Aareal Bank, Smurfit kappa, Pro Sieben, Brembo, Swatch, Telefonica, Lundin Petroleum, Maersk, Legrand and Continental). Some of these have been a switch to a preferred stock in the same sector, for example Lundin Petroleum was sold and Total replaced it, a more mature company which pays a dividend. Also Sunrise in Switzerland replaced Telefonica. Other reasons for sales have been the prospect of weak earnings for some time to come, (Swatch, Maersk) due to the nature of the business they are in.

Additions have included names which we have held in the past, such as SAP where we feel the heavy investment over the last few years will start to show returns in the next few years.  We have also added a holding in Geberit, a Swiss listed maker of what is delightfully known as "bathroom furniture". The shares had fallen back after a recent large acquisition, providing a good opportunity to invest in a superb cash-generating company. We have returned to Ryanair, where the company is now generating plenty of cash after many years of expansion, and dividends have returned to the agenda. We are often encouraged by a company that can expand their business while also offering an income to shareholders.

Other holdings new to the portfolio are Elis in textile services in Europe, and Amundi which listed last year and is one of Europe's largest fund management companies. I remain convinced that offering a cost-efficient, reliable and robust savings product to the mass of savers in Europe will be a huge market. Every government in the West cannot continue to pay pensions from tax revenue as is currently the case. Simply put, governments are doing their best to shift the burden of funding pensions from the State to the individual.  We have also returned to adhesives group Henkel in Germany, giving us a slightly more cyclical element in the Company. 

A defining factor is under-exposure to the banking sector where we remain concerned that low interest rates merely accentuate the problems of low demand for loans. We are overweight in Industrials; although the truly economically sensitive names are limited to Atlas Copco, which I am pleased has returned to the portfolio after an absence of some years, and Deutsche Post.

 

Outlook

I continue to believe that economic growth will remain slow on a worldwide basis.  Emerging Markets are also growing at slower rates than in the past. Low inflation/no inflation has meant that pricing power is dependent on innovation or scarcity. With extremely low or even negative interest rates, merger and acquisition activity is already picking up, and companies are (at the risk of generalising) redirecting more cash to shareholders and less to investment. There is good and bad in this, but this is the world we live in. As I have mentioned so often in these reports, we must try to remain patient and vigilant with our holdings, and participate in their future.

I suspect that we will be hearing more on fiscal expansion and hear of governments trying to stimulate economic growth more dynamically, as far as their finances permit. With crucial elections in Germany and France, political uncertainty in Spain and a significant referendum on electoral reform in Italy, politics will inevitably play a role in the year ahead. In the context of the UK, we continue to be one of the few remaining Investment Trusts concentrating purely on Europe excluding the UK, and as such have benefited from the devaluation of Sterling. With inflation likely to rise sharply in the UK over the next year, we are alert to the risk that Sterling may rally if the Bank of England decides that rates must rise.

It remains a difficult and complex world, with the contradictions of ever lower bond yields potentially causing strains in the bond markets if and when inflation starts to increase in Europe. While much remains unpredictable, I am confident that we are invested in some of the best companies in Europe and, in many cases, the world.

 

Tim Stevenson

Fund Manager

10 October 2016

 

 

Twenty Largest Holdings as at 31 July

 

 


 

Company

 

Country

 

Sector

2016

Valuation

£'000

2016

Percentage of Portfolio

 

1

Fresenius Medical Care            

Germany

Health Care        

 7,823

3.75

2

Nestlé                     

Switzerland

Food Producers                             

 7,464

3.58

3

Fresenius

Germany

Health Care        

 7,045

3.38

4

Deutsche Post

Germany

Air Freight & Logistics

 5,923

2.84

5

SAP

Germany

Software & Computer Services               

 5,564

2.66

6

Elis

France

Support Services                           

 5,507

2.64

7

SGS

Switzerland

Support Services                           

 5,480

2.63

8

Geberit

Switzerland

Construction & Materials                   

 5,434

2.60

9

Partners Group                       

Switzerland

Financial Services                         

 5,367

2.57

10

Groupe Eurotunnel         

France

Industrial Transportation                  

 5,262

2.52

 

Top Ten Investments

 60,869

29.17

 

The Top Ten Investments total £60,869,000 representing by value 29.17% (2015: 33.54%) of the total value of investments.

 

 


 

Company

 

Country

Sector

2016

Valuation

£'000

 

2016

Percentage of Portfolio







11

Essilor       

France

Opthamology

 5,262

2.52

12

Amadeus

Spain

Support Services                           

 5,237

2.51

13

Infineon

Germany

Technology Hardware & Equipment            

 5,185

2.49

14

Deutsche Telekom                      

Germany

Telecommunications                  

 5,036

2.41

15

Publicis Groupe                          

France

Media                                      

 4,863

2.33

16

L'Oréal                                

France

Personal Goods                             

 4,411

2.11

17

Henkel

Germany

Chemicals                                  

 4,258

2.04

18

BIC

France

Commercial Supplies

 4,194

2.01

19

Rubis                   

France

Gas Water & Multiutilities                 

 4,108

1.97

20

Heineken

Netherlands

Beverages                                  

 4,065

1.95

 

Top Twenty  Investments

 107,488

51.51

 

The Top Twenty investments total £107,488,000 representing 51.51% by value (2015: 55.83 of the total investments.

 

 

 

 

Sector exposure at 31 July

 

As a percentage of the investment portfolio excluding cash

 


31 July

2016

31 July

2015

Basic Materials

3.1

3.7

Consumer Goods

15.8

19.6

Consumer Services

9.2

9.0

Financials

17.0

23.1

Health Care

13.8

16.5

Industrials

21.6

18.8

Oil & Gas

2.8

2.6

Technology

8.2

1.3

Telecommunications

5.3

5.4

Utilities

3.1

0.0

Index Derivatives

0.1

0.0

 

 

Geographic exposure at 31 July

 

As a percentage of the investment portfolio excluding cash

                                                                                                                                                                


31 July

2016

31 July

2015

Denmark

1.5

2.5

Finland

1.8

0.0

France

33.5

29.9

Germany

23.5

23.8

Ireland

2.1

1.5

Italy

2.4

7.1

Netherlands

7.3

4.0

Norway

1.4

1.3

Spain

5.0

5.6

Sweden

4.0

7.3

Switzerland

17.5

17.0

 

 

 

Market capitalisation of the portfolio at 31 July

 

 

Market cap

% of portfolio

at 31 July 2016

% Benchmark weight

                        at 31 July 2016

>£20bn

54.6

59.4

£10bn - £20bn

23.8

20.2

£5bn - £10bn

9.1

12.2

£1bn - £5bn

10.8

8.1

<£1bn

1.7

0.1

 

 

 

 

 

 

 

 

 

 

 

Audited Income Statement

for the year ended 31 July


Year ended 31 July 2016

Year ended 31 July 2015


Revenue

return

£'000

Capital

return

£'000

 

Total

£'000

Revenue

    return

£'000

Capital

 return

£'000

 

Total

£'000

Gains on investments held

at fair value through profit or loss

(note 2)

-

19,120

19,120

-

20,419

20,419

Investment income (note 3)

6,206

-

6,206

4,842

-

4,842

Other income

-

-

-

-

-

-


---------

----------

---------

---------

----------

---------








Gross revenue and capital

gains

6,206

19,120

25,326

4,842

20,419

25,261








Management and performance fees

 

(248)

2,131)

(2,379)

(226)

(1,784)

(2,010)








Other administrative expenses

 

(389)

-

(389)

(362)

-

(362)


---------

----------

---------

---------

----------

---------

Net return on ordinary activities before finance costs and taxation

5,569

16,989

22,558

4,254

18,635

22,889








Finance costs

(9)

(38)

(47)

(11)

(45)

(56)


---------

----------

---------

---------

----------

---------

Net return on ordinary

activities before taxation

5,560

16,951

22,511

4,243

18,590

22,833








Taxation on net return on ordinary activities

(601)

-

(601)

(489)

-

(489)


---------

----------

---------

---------

----------

---------

Net return on ordinary

activities after taxation

4,959

16,951

21,910

3,754

18,590

22,344


=====

=====

=====

=====

=====

=====








Return per ordinary share-

basic and diluted (note 4)

23.5p

80.1p

103.6

18.3p

90.7p

109.0p


=====

=====

=====

=====

=====

=====

 

The total 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

for the year ended 31 July 

 

Year ended 31 July 2016

Called up

share

capital

£'000

 

Share

premium

account

£'000

 

Capital

redemption reserve

£'000

 

Capital

reserves

£'000

 

 

Revenue

reserve

£'000

 

Shareholders'

funds

total

£'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)

Buy-back 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


======

======

======

=======

======

=======















Year ended 31 July 2015

Called up

share

capital

£'000

 

Share

premium

account

£'000

 

Capital

redemption reserve

£'000

 

Capital

reserves

£'000

 

 

Revenue

reserve

£'000

 

Shareholders'

funds

total

£'000

 

At 1 August 2014

1,020

33,814

263

123,864

4,810

163,771

Net return on ordinary activities

  after taxation

-

-

-

18,590

3,754

22,344

Ordinary shares issued

18

3,335

-

-

-

3,353

Issue cost

-

(35)

-

-

-

(35)

Final dividend paid in respect of

  the year ended 31 July 2014

  (paid 21 November 2014)

-

-

-

-

(2,549)

(2,549)

Interim dividend paid in respect of

  the year ended 31 July 2015

  (paid 24 April 2015)

-

-

-

-

(1,129)

(1,129)


----------

-----------

----------

-----------

----------

------------

At 31 July 2015

1,038

37,114

263

142,454

4,886

185,755


======

======

======

=======

======

=======

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Audited Statement of Financial Position

At 31 July


2016

£'000

2015

£'000

Fixed asset investments held at fair value through

profit or loss



Listed at market value  -  overseas

208,660

192,294


----------

----------




Current assets



Debtors

1,066

465

Cash and cash equivalents

624

2,561


---------

---------


1,690

3,026




Creditors: amounts falling due within one year

(2,936)

(9,565)


---------

---------

Net current liabilities

(1,246)

(6,539)


---------

---------




Net assets 

207,414

185,755


======

======




Capital and reserves



Called up share capital

1,060

1,038

Share premium account

41,032

37,114

Capital redemption reserve

263

263

Capital reserves

159,236

142,454

Revenue reserve

5,823

4,886


-----------

-----------

Total shareholders' funds

207,414

185,755


======

======




Net asset value per ordinary share

  (basic and diluted)

979.0p

 

895.0p


======

======

 

 

 

 

 

 

 

Notes:

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. The date of transition to FRS 102 was 1 August 2014. 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 preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented. Following the application of the revised reporting standards 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 2015.

 

There has been no impact on the Company's Income Statement, Statement of Financial Position (previously called the Balance Sheet) or Statement of Changes in Equity (previously called the Reconciliation of Movements in Shareholders' Funds) for periods previously reported.

 

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



2016

£'000

2015

£'000


Gains on sale of investments based on historical cost

11,725

6,114


Less: revaluation gains recognised in previous years

(15,555)

(6,244)



----------

----------






(Losses) on investments sold in the year based on carrying value at the previous statement of financial position date

(3,830)

(130)


Revaluation of investments held at 31 July

23,293

19,857


Exchange (losses)/ gains

(343)

692



----------

----------



19,120

20,419



======

======





3.

Investment income

2016

£'000

2015

£'000


Overseas dividend income

6,018

4,842


Overseas stock dividend income

188

-



6,206

4,842



=====

=====





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 £21,910,000 (2015: £22,344,000) and on 21,149,557 ordinary shares (2015: 20,501,199) being the weighted average number of shares in issue during the year.




The total return can be further analysed as follows:







2016

£'000

2015

£'000


Revenue return

4,959

3,754


Capital return

16,951

18,590



----------

----------


Total return

21,910

22,344



======

======


Weighted average number of ordinary shares

21,149,557

20,501,199






Revenue return per ordinary share

23.5p

18.3p


Capital return per ordinary share

80.1p

90.7p



----------

----------


Total return per ordinary share

103.6p

109.0p



======

======






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





2016

£'000


Revenue available for distribution by way of dividend for the year

4,959


Interim dividend of 6.0p paid 29 April 2016

(1,272)


Proposed final dividend for the year ended 31 July 2016 of 14.0p

(based on 21,185,541 ordinary shares in issue at 10 October 2016)

(2,966)



-----------


Undistributed revenue for section 1158 purposes*

721



======


*Undistributed revenue comprises 11.6% of the total income of £6,206,000.

 

The proposed final dividend of 14.0p per share for the year ended 31 July 2016 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 14.0p per ordinary share will be paid on 23 November 2016 to shareholders on the register of members at the close of business on 21 October 2016. The shares will be quoted ex-dividend on 20 October 2016.

 

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 979.0p (2015: 895.0p) is based on the net assets attributable to ordinary shares of £207,414,000(2015: £185,755,000) and on 21,185,541 (2015: 20,755,541) ordinary shares in issue at the year end.  There were 20,000 shares held in Treasury at the year end (2015: nil).



7.

Called up share capital




 

Number of shares entitled to dividend

 

Total number of shares

Nominal value of shares

£'000


Ordinary shares of 5p each - authorised



75,000,000

3,750





========

=====








Balance at the start and end of the year ended 31 July 2015


20,755,541

20,755,541

1,038


New shares issued in the year


450,000

450,000

22


Shares Bought back in the year: held in treasury


(20,000)

-

-










---------------

---------------

----------


At 31 July 2015


21,185,541

21,205,541

1,060




========

========

=====








During the year 20,000 ordinary shares were repurchased (2015: none). Since 31 July 2016, no further shares have been issued or repurchased.



8.

Going Concern Statement


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.

 

 

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 but have not yet been 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.

2015 Financial information


The figures and financial information for the year ended 31 July 2015 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 2015 have been audited but have not yet been delivered to the Registrar of Companies. The Independent Auditors' Report on the 2015 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.



11.

Annual Report and Annual General Meeting


The Annual Report for the year ended 31 July 2016 will be posted to shareholders in October 2016 and copies will be available on the Company's website (www.hendersoneurotrust.com) or in hard copy format from the Company's Registered Office, 201 Bishopsgate, London EC2M 3AE.

 

The Annual General Meeting will be held at the registered office on Wednesday 16 November 2015 at 2.30 pm. The Notice of the Annual General Meeting will be posted to shareholders with the Annual Report.

 

 

 

 

For further information please contact:

 

Tim Stevenson

Fund Manager, Henderson EuroTrust plc

Telephone: 020 7818 4342

 

James de Sausmarez

Head of Investment Trusts, Henderson Global Investors

Telephone: 020 7818 3349

 

Sarah Gibbons-Cook

Investor Relations and PR Manager, Henderson Global Investors

Telephone: 020 7818 3198


 

 

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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