REG - Henderson Euro Trust - Results for the half-year ended 31 March 2025
30/06/2025 07:00
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RNS Number : 8338O Henderson European Trust Plc 30 June 2025
JANUS HENDERSON FUND MANAGEMENT UK LIMITED
LEGAL ENTITY IDENITIFIER: 213800GS89AL1DK3IN50
HENDERSON EUROPEAN TRUST PLC (the "Company")
Unaudited results for the half-year ended 31 March 2025
Henderson European Trust plc (the "Company") hereby submits its half-year
results for the six months ended 31 March 2025, as required by the FCA's
Disclosure Guidance and Transparency Rule 4.2.
Investment objective
The Company aims to maximise total return from a portfolio of stocks
predominantly listed in Europe (excluding the UK).
Performance summary
* Net asset value ("NAV") per share total return(1) was -0.2%, below the
benchmark(2) return of 3.5%, and outperforming the AIC sector(4) average by
2.5%
* Share price total return(3) was -0.3%
* Interim dividend of 1.4p per share declared
Total return performance to 31 March
6 months 1 year 3 years 5 years 7 years 10 years
% % % % % %
NAV(1) -0.2 -1.4 30.4 92.9 82.6 134.4
Benchmark index(2) 3.5 3.8 28.4 84.4 74.1 122.5
AIC Europe sector NAV(4) -2.7 -4.9 16.9 71.7 66.4 117.4
IA OEIC Europe sector(5) 1.2 0.9 20.9 76.1 57.9 104.1
Share price -0.3 2.6 32.8 107.2 70.1 109.9
Financial highlights
At 31 March 2025 At 30 September 2024
(unaudited) (audited)
Shareholders' funds
Net assets £618.0m £663.5m
NAV per ordinary share (debt at par) 199.7p 201.4p
Share price 181.0p 183.0p
Gearing at period end(6) 1.5% 4.2%
Half-year ended Year ended
31 March 2025 30 September 2024
(unaudited) (audited)
Total (loss)/return to equity shareholders
Revenue return after taxation (£'000) 3,354 10,711
Capital (loss)/return after taxation (£'000) (8,095) 44,590
Total (loss)/return (£'000) (4,741) 55,301
Total (loss)/return per ordinary share
Revenue 1.05p 4.43p
Capital (loss)/return (2.53p) 18.45p
Total (loss)/return (1.48p) 22.88p
(1) Net asset value ("NAV") total return per ordinary share (with dividends
reinvested)
(2) FTSE World Europe (ex UK) Index on a total return basis in sterling terms
(3) Share price total return (with dividends reinvested) using mid-market
closing price
(4) Average for the Association of Investment Companies ("AIC") Europe sector
of six companies
(5) Investment Association ("IA") open-ended investment company ("OEIC")
Europe ex UK Equity sector average NAV, comprising 130 OEICs at 31 March 2025
(6) Net gearing, as defined in the alternative performance measures in the
Annual Report for the year ended 30 September 2024
Sources: Morningstar Direct, LSEG Datastream and Janus Henderson
INTERIM MANAGEMENT STATEMENT
CHAIR'S STATEMENT
Departure of co-portfolio managers, board review of options and proposed
combination with Fidelity European Trust PLC ("FEV")
I am frustrated to write that this year has seen further change for
shareholders in Henderson European Trust ("HET") prompted by the unexpected
resignation of our Co-Fund Managers, Tom O'Hara and Jamie Ross. Following our
announcement of this news on 3 February 2025
(https://www.londonstockexchange.com/news-article/HET/portfolio-management-arrangements/16880542)
we provided shareholders with a further update on 13 May 2025
(https://www.londonstockexchange.com/news-article/HET/update-on-board-review/17033889)
culminating with the announcement on 19 June 2025
(https://www.londonstockexchange.com/news-article/HET/result-of-board-review/17093505)
that the Board had concluded its review for the strategic direction of the
Company and would be recommending a proposed combination with FEV. Throughout
this period the portfolio has been managed by Robert Schramm-Fuchs and Nick
Sheridan on an interim basis, maintaining its investment objective - to seek
to maximise total return from a portfolio of stocks predominantly listed in
Europe (excluding the UK).
Given the material impact to the Company of this change, the Board, via its
broker and corporate advisor, Deutsche Numis, solicited shareholder views
which clearly called for a comprehensive review. To aid the Board with this
review of the Company's options, we engaged Deutsche Numis to provide advice
and manage the process along with WTW, the investment consultant, to provide
analysis, perspective and opinion on the investment component.
Once these reports had been compiled, reviewed and discussed over a period of
weeks the situation that emerged saw the Board receiving a range of proposals
from (i) staying with our incumbent manager, JHI, under new investment
leadership (ii) existing investment companies looking to consolidate and (iii)
other investment management firms proposing to manage the Company.
After a comprehensive RFP and pitch process and further discussions with
potential candidates, the Board has now concluded that a combination with FEV
provides a highly compelling and the best long-term option for shareholders.
The benefits to shareholders include a 'best in class' investment team, scale
benefits both in terms of enhanced liquidity and forecast lower ongoing costs
ratio, expected reduced volatility of the share price relative to NAV as a
result of the new enhanced discount management policy, all at zero cost to the
shareholder given the 12-month fee waiver on transferring assets, as well as
the option for a cash exit alternative of up to 33.3%. Full details of this
proposed combination, including all the benefits to shareholders can be found
here
(https://www.janushenderson.com/en-gb/uk-investment-trusts/trust/henderson-european-trust-plc/)
.
Shareholders should look out for documentation on the proposed combination
which we expect to send out by the end of August. This documentation will set
out the Board's recommendation to vote in favour of the proposed combination,
the dates of the shareholder meeting and how shareholders can vote.
Performance
Investment performance for the six months to 31 March 2025 was disappointing
but we were far from alone in finding the gyrations difficult. As we wrote
last December, "fears associated with a sustained outbreak of 'tariff wars'
are higher than in many a year", and how true that prophecy has proved. Much
of our underperformance came in March, as leaks from the White House stoked
market fears and in particular prompted earnings and valuation reappraisals
(downward) for some of the more growth and consumer-oriented companies in
which we were overweight. After a strong multi year period for returns it is
probably inevitable we had a weaker period with NAV total return of -0.2%,
underperforming the Company's benchmark index total return of 3.5%, and a
share price total return of -0.3% as the discount widened marginally.
I don't want to dwell on too short a time period - the long-term track record
remains strong, with NAV and share price total return outperforming the
benchmark over three, five, seven and ten years. For once, our competitors in
the open-ended IA Europe ex-UK sector experienced better performance (+1.2%
unit price total return), while our results compare favourably with our
competitors in the investment trust sector: the average NAV total return of
the AIC Europe sector (comprising six companies) was -2.7% in this period,
reflecting the growth-style biases of many of our competitors.
Dividends
On 19 May 2025 the Board declared an interim dividend for the year of 1.40p
per share which was paid on 27 June 2025 to shareholders on the register at 30
May 2025. Following the conclusion of our review and the recommended
combination with FEV, the Board anticipates making a pre-liquidation
distribution to HET's shareholders in respect of income accrued from the end
of March 2025, subject to the passing of the required resolutions at the
forthcoming general meetings. This will be detailed in the documentation due
to be published by the end of August 2025.
Share rating and discount management policy
Our discount to NAV at the end of the six months was 9.4%, and the average
discount over the 6 months was 10.2%.
When we announced the Fund Manager changes on 3 February 2025, the Board also
committed to maintain a single-digit discount (under normal market
conditions). We recognised that the uncertainty over future management
arrangements might weigh on the shares which seemed wholly at odds with our
aim of mitigating shareholders' exposure to volatility in the share price
discount to NAV. 20,036,988 shares were bought back during the six months
ended 31 March 2025 representing 5.5% of share capital (and held in treasury)
and since the period end, and as at 26 June 2025, a further 332,122 shares
have been bought back, representing 0.1% of share capital.
Board changes
As reported in our 2024 Annual Report, Robin Archibald retired from the Board
following the AGM on 29 January 2025, and Melanie Blake took over as Audit
and Risk Committee Chair on the same day.
Outlook
Clearly the return of President Trump and his "MAGA" policies - including huge
uncertainty over tariffs - is rapidly accelerating the trends that had started
to emerge even before COVID: a move away from the hyper-globalisation and 'off
shoring' that we had seen over the previous three decades, towards
protectionism and prioritisation of domestic policies. Coupled with the
increase in hostilities in both Ukraine and the Middle East, geopolitical
risks have not been higher for generations. At this time, however - as our
Fund Managers highlight - there is encouraging change afoot among European
governments with - belated - acknowledgement that regulation in the region has
become stultifying. Meanwhile, we have always said that investing in European
companies is not the same as investing in European economies and, amongst our
portfolio of companies, we have global leaders operating in sectors
experiencing double digit growth: inter alia, data centres, electrification,
industrial automation and digitalisation. From world leading luxury brands to
drug delivery systems, European companies continue to offer robust returns for
their shareholders and yet even today remain valued at a discount to their US
counterparts.
In the weeks ahead of the shareholder meeting to approve our combination with
FEV, the Board notes the professionalism and rigour of the team at Janus
Henderson Investors, and thanks them for their ongoing support of the Company.
Vicky Hastings
Chair of the Board
Fund Managers' Report
We were appointed as Interim Fund Managers of the Company on 3 February 2025
following the departure of Tom O'Hara and Jamie Ross from Janus Henderson
Investors. Our report below covers the full six-month period.
The Company registered a NAV total return of -0.2% in the six months to 31
March 2025, in comparison with the benchmark, the FTSE World Europe (ex UK)
Index, which achieved a return of +3.5%. This short-term relative
underperformance is disappointing, and we discuss this in greater detail
below. However, the relative outperformance of European equities against other
developed equity markets such as those in the US and Japan, as well as
emerging markets, provides a silver lining.
We have historically recognised the attractiveness of high-quality European
companies that are trading at favourable valuations relative to other regions.
This differential reduced over the course of the half year. This recent shift
has been influenced by several factors: 1) President Trump's trade policy,
which initially seems more detrimental to domestic US growth than to its
trading partners, 2) fiscal reforms in Germany that could rejuvenate Europe's
sluggish GDP growth, and 3) relaxed borrowing conditions facilitated by
subdued inflation in Europe, allowing the European Central Bank (ECB) to
continue reducing interest rates, and 4) raised prospects of a ceasefire in
Ukraine, which would diminish energy costs for European businesses and
generally improve risk sentiment. The former two factors, in particular,
represent significant shifts with both immediate and enduring implications for
global equity markets and the stocks within your trust portfolio, which we
will discuss in more detail below.
Performance
The majority of the relative underperformance for the period occurred in March
2025 as market participants became increasingly apprehensive of what the Trump
tariffs might hold in store and individual stock moves were significant. HET's
portfolio had enough of a growth tilt that it suffered in a period when growth
stocks significantly lagged value stocks.
Novo Nordisk was the most notable single stock detractor. This Danish
pharmaceutical company, known for its diabetes treatments and more recently,
its weight loss drug Ozempic, saw its shares decline due to supply issues in
the US, disappointing trial results for its new weight loss drug, CagriSema,
and heightened competition. While we continue to recognise the substantial
market potential and broader health benefits of its weight loss treatment, we
reduced our holding from 6.4% at the beginning of the period to 2.7% at the
end, acknowledging the near-term growth risks. Overweight positions in
semiconductor stocks like ASM International and ASML also hurt performance,
affected by geopolitical tensions and uncertainties in the artificial
intelligence supply chain, spurred by the release of the low-cost,
Chinese-developed AI model, DeepSeek. Although this release has shocked the
markets, we believe it will ultimately drive greater demand for AI (the
so-called Jevons paradox), supporting capital expenditure linked to these
stocks, and we remain invested in them.
On the positive side, the largest sector contribution came from financials.
When we took over management, we significantly increased exposure by
initiating new holdings in four European financial stocks, including two
banks: BBVA and Erste Group. Over the last two decades EU banks have been
consistent underperformers, but they now present a more compelling investment
proposition. After adequately rebuilding their balance sheets post-financial
crisis, these banks are poised to enhance shareholder returns through
dividends and buybacks. Moreover, ongoing consolidation in Spain, and more
recently Italy, is reducing competition and allowing for more rational loan
pricing. Despite these improvements, their valuations still reflect a bleaker
fundamental outlook.
Our holding in SAP also performed well. The German software giant released
strong results that reassured the market of robust demand for its cloud-based
enterprise resource planning (ERP) software, which helps integrate AI into
corporate processes.
Activity
During this period, 12 new holdings were added to the portfolio and 16
divested. Beyond the banking sector, the Company's exposure to the IT sector
has slightly reduced. This followed the Chinese AI company, Deepseek's,
well-received release of its latest model which we believe will likely act as
a limiting factor on the valuation ascribed to some of the AI capex
beneficiary stocks, particularly in the technology sector.
Notable additions included Amundi, an asset management firm offering a range
of financial instruments and investment solutions. We appreciate its broad
product pipeline, scalable business model, and capital optionality. We also
initiated a position in Publicis, a French advertising agency. The successful
integration of acquisitions Epsilon and Sapient, in digital advertising and
data, has provided Publicis with a competitive edge that has translated into
consistent superior growth compared to its peers. We do not believe that this
advantage is fully reflected in its valuation. Additionally, we added Ahold
Delhaize, a food retailer and wholesaler in the US and Netherlands. We also
opened a position in Sandoz. Sandoz is a global leader in generic and
biosimilar medicines, which are off-patent drugs. The company was separated
from Novartis in October 2023.
Finally, we reduced our exposure to 'falling rate beneficiaries' due to the
less certain rate outlook spurred by US tariffs and persistent US inflation.
This led to a reduction in holdings such as National Grid & British Land,
and a complete sale of Cellnex Telecom. Other activities involved reducing
holdings in Alcon, ABInbev, and Daimler Trucks to decrease the trust's
exposure to cyclical US revenues.
Net gearing averaged 3.8% over the period, a near full deployment of the
long-term loan notes placed by HEFT in January 2022 at a very favourable
average interest rate of 1.57%. Towards period end, gearing was reduced in
response to the greater uncertainty and volatility brought about by the
current geopolitical upheaval.
The big picture - A re-ordering of global trade by the US administration
Much has been discussed regarding the tariffs introduced by the Trump
administration on what has been termed 'Liberation Day'. Although this
announcement was made just after the close of the Trust's interim period, its
significance warrants discussion in this report. We are likely witnessing a
stark decoupling of the US economy from China and its sphere of influence,
including countries like Vietnam which serve as indirect conduits for Chinese
exports.
Implications for Europe
In the upcoming months, EU Trade Ministers and the Eurogroup are expected to
commence trade negotiations with the US, wherein they will need to decide
their strategic alignment vis-à-vis the US and China. Europe has found itself
disadvantaged under the previous trade frameworks, running a substantial
annual trade deficit with China that has increased significantly, even turning
former export leader Germany into a net importer from China over the last four
years. Rapid deindustrialisation has occurred, with the transfer of
manufacturing bases and intellectual property advantages to China, which
continues to subsidise its industries heavily.
While some suggest that the EU could retaliate against US tariffs, we deem
this unlikely to happen in any significant way due to the limited fiscal
leeway across European nations, except perhaps Germany. Moreover, Europe
should focus on diminishing its dependencies and ties with China rather than
increasing them. Unprepared for a potential influx of Chinese goods initially
destined for the US market, Europe faces a strategic decision: aligning closer
with the US might entail losing some trade battles but aligning with China
could risk losing a larger economic war. The direct exposure of the European
stock market to the 20% tariffs is manageable, concentrated within a few
industries such as consumer discretionary sectors and freight, where the
Trust's exposure is very selective.
A trade agreement with the US might form part of a broader Mar-a-Lago Accord
over the next six months. This accord could address numerous outstanding
issues including defence spending and the security framework under US
leadership, with a commitment to maintaining the US Dollar as the sole reserve
currency. This could represent a significant reordering of global economics,
comparable to historical agreements like the Bretton Woods, the Treaty of
Versailles, or the Plaza & Louvre Accords, outlined by Secretary Bessent
in 2024. The objective is clear: to establish a new commonwealth of trade,
defence, and prosperity as a counterbalance to China and its sphere of
influence.
A more competitive and higher growth Europe
It is now widely acknowledged that Europe has spent many years prioritising
incorrectly, becoming the world leader in bureaucracy and regulation without
adequate focus on maintaining competitiveness. This trajectory needed to
shift, with the US tariffs acting as a catalyst for EU-wide deregulation.
Although not as radical as the changes seen in the US, the shift is
nonetheless significant. European Commission President Von der Leyen,
re-elected in July 2024, has committed her second term to rapid deregulation,
presenting the first of two Omnibus packages in February 2025. These packages
aim to streamline sustainability reporting, simplify due diligence for
responsible business practices, and strengthen the carbon border tax
mechanism, collectively aiming to reduce administrative burdens significantly
by the end of her mandate in 2029.
In addition, the new German government has announced a €1 trillion
infrastructure and defence package, effectively releasing the country's
self-imposed fiscal debt break. This has the potential to lift economic growth
materially with it approximately equating to 22% of GDP deployed over the next
ten years. We are also hopeful of more to come from the new German
government, with reforms to the labour market and pensions on their agenda,
although the parliamentary arithmetic in Germany may see these watered down.
Where to invest in this world?
As outlined, our positive view on European stocks is certainly not without
risks, but we believe the upside prospects outweigh the downside risks. And
those views extend to different sectors and industries in the region. We
favour European banks, which seem very undervalued relative to the wider
European market, US banks and their own (chequered) history. We currently own
eight financial stocks equating to 24% of the portfolio. We also see value in
certain more cyclical (economically sensitive) stocks, for example those
benefiting from the wider electrification thematic, or those positioned to
participate in any upside from Germany's planned infrastructure investments.
These include stocks such as Schneider Electric and Siemens AG, each with
business units exposed to structural growth sectors, such as data centres,
electrification, industrial automation and digitalisation.
Moreover, our portfolio is bolstered by global leaders with robust business
models, making them perennial components of our investment strategy. These
include Compass Group, one of the foremost contract-catering companies
globally; LVMH in the luxury goods sector, which, despite potential
vulnerability to trade tariffs, presents a valuation and growth outlook that
fully accounts for such factors; Roche, a leader in cancer therapies; and SAP
in the software industry.
As always, we see active stock selection as key to positioning favourably for
the improved sentiment towards European equities.
Robert Schramm-Fuchs and Nick Sheridan
Interim Fund Managers
INVESTMENT PORTFOLIO at 31 March 2025
Company Sector Country of listing Valuation % of portfolio
£'000
UniCredit Banks Italy 30,274 4.8
TotalEnergies Oil Gas and Coal France 28,661 4.6
ASML Technology Hardware and Equipment Netherlands 28,447 4.5
SAP Software and Computer Services Germany 27,394 4.4
Siemens General Industrials Germany 27,215 4.3
Munich Re Non-life Insurance Germany 23,198 3.7
Deutsche Boerse Investment Banking and Brokerage Services Germany 22,626 3.6
BNP Paribas Banks France 22,391 3.6
Roche Pharmaceuticals and Biotechnology Switzerland 20,159 3.2
Safran Aerospace and Defence France 18,957 3.0
10 largest 249,322 39.7
Compass Travel and Leisure United Kingdom 18,578 3.0
LVMH Moët Hennessy Louis Vuitton Personal Goods France 18,199 2.9
Banco Bilbao Vizcaya Argentaria Banks Spain 17,899 2.9
Deutsche Telekom Telecommunications Service Providers Germany 17,780 2.8
Novo Nordisk Pharmaceuticals and Biotechnology Denmark 16,738 2.7
Sanofi Pharmaceuticals and Biotechnology France 16,708 2.7
Saint-Gobain Construction and Materials France 16,331 2.6
DSV Industrial Transportation Denmark 15,539 2.5
Schneider Electric Electronic and Electrical Equipment France 15,435 2.5
Allianz SE Non-life Insurance Germany 14,678 2.3
20 largest 417,207 66.6
CRH Construction and Materials Ireland 13,858 2.2
Koninklijke Ahold Delhaize Personal Care Drug and Grocery Stores Netherlands 13,586 2.2
Publicis Media France 13,375 2.1
SGS Industrial Support Services Switzerland 13,235 2.1
Danone Food Producers France 12,756 2.0
Ryanair Travel and Leisure Ireland 11,664 1.9
Holcim Construction and Materials Switzerland 10,913 1.7
Aena Industrial Transportation Spain 10,352 1.6
Smurfit Westrock General Industrials Ireland 10,262 1.6
ASM International Technology Hardware and Equipment Netherlands 9,798 1.6
30 largest 537,006 85.6
Erste Bank Banks Austria 9,668 1.5
Alcon Medical Equipment and Services Switzerland 9,320 1.5
Sandoz Pharmaceuticals and Biotechnology Switzerland 8,822 1.4
Industria De Diseno Textil Retailers Spain 8,613 1.4
Hermes Personal Goods France 8,276 1.3
Amundi Investment Banking and Brokerage Services France 8,096 1.3
National Grid Gas Water and Multi-utilities United Kingdom 7,854 1.3
British Land Real Estate Investment Trusts United Kingdom 6,500 1.0
International Consolidated Airline Travel and Leisure Spain 6,082 1.0
Anglo American Industrial Metals and Mining United Kingdom 5,942 0.9
40 largest 616,179 98.2
Daimler Truck Holdings Industrial Transportation Germany 5,707 0.9
IMCD Chemicals Netherlands 5,530 0.9
Total investments at fair value 627,416 100.0
COUNTRY OF LISTING (as a percentage of the portfolio excluding cash)
31 March 2025 31 March 2024
% %
France 28.6 30.9
Germany 22.0 18.5
Switzerland 9.9 5.7
Netherlands 9.2 15.6
Spain 6.9 -
United Kingdom 6.2 3.2
Ireland 5.7 2.0
Denmark 5.2 6.9
Italy 4.8 3.7
Austria 1.5 -
Finland - 5.8
Belgium - 4.0
Sweden - 2.1
Norway - 1.6
100.0 100.0
SECTOR EXPOSURE (as a percentage of the portfolio excluding cash)
31 March 2025 31 March 2024
% %
Industrials 25.2 30.2
Financials 23.7 8.3
Consumer Discretionary 13.5 13.6
Health Care 11.4 11.6
Technology 10.5 15.9
Energy 4.6 6.6
Consumer Staples 4.2 4.9
Telecommunications 2.8 -
Basic Materials 1.8 8.9
Utilities 1.3 -
Real Estate 1.0 -
100.0 100.0
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the Company's business
can be divided into the following main areas:
· Market
· Investment performance
· Business strategy and market rating
· Gearing
· Operational
· Regulatory and reporting
Information on these risks and how they are managed is given in the Annual
Report for the year ended 30 September 2024. In the view of the Board, these
principal risks and uncertainties at the year end are as applicable to the
remaining six months of the financial year (whilst also acknowledging the
going concern and material uncertainty statement below) as they were to the
six months under review.
GOING CONCERN AND MATERIAL UNCERTAINTY
The Board announced a proposed combination of the assets of the Company with
the assets of FEV subject to shareholder approval, through a tax efficient
scheme of reconstruction under s110 Insolvency Act 1986 (the "Proposals").
More detail can be found above in the Chair's Statement and in the separate
RNS announcement dated 19 June 2025.
The Board believes that the Proposals are in the best interests of
shareholders as a whole and recommends that shareholders vote in favour of the
resolutions required to effect the Proposals. The Proposals will be effected
by way of a scheme of reconstruction and winding up of the Company under s110
Insolvency Act 1986, and the associated transfer of the Company's assets to
FEV in exchange for the issue of new shares in FEV under the recommended
scheme. This would result in the voluntary liquidation of the Company. Due to
the requirement for the Proposals to receive approval from the shareholders of
both the Company and FEV, there remains material uncertainty as to the future
of the Company.
However, should the Proposals not receive the necessary shareholder approvals
or any of the other conditions to the Proposals not be satisfied, the Board
believes that the Company would remain a going concern. Accordingly, the Board
has prepared the financial statements in this report for the half year ended
31 March 2025 on a going concern basis.
Related-Party Transactions
The Company's transactions with related parties in the period under review
were with the directors and the Manager, Janus Henderson. There have been no
material transactions between the Company and its directors during the period
other than amounts paid to them in respect of remuneration and expenses, for
which there were no outstanding amounts payable at the period end.
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 facilitation
of marketing activities with third parties, there have been no material
transactions with the Manager affecting the financial position of the Company
during the period under review.
Statement of Directors' Responsibilities
The directors (as listed in note 14) confirm that, to the best of their
knowledge:
a) the condensed financial statements for the half-year ended 31 March
2025 have been prepared in accordance with FRS 104 Interim Financial
Reporting, and give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company;
b) the Interim Management Report and condensed financial statements include
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 principal risks and uncertainties for the remaining
six months of the year); and
c) the Interim Management Report includes a fair review of the information
required by the Disclosure Guidance and Transparency Rule 4.2.8R (disclosure
of related-party transactions and changes therein).
On behalf of the Board
Vicky Hastings
Chair of the Board
CONDENSED INCOME STATEMENT
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
31 March 2025 31 March 2024 30 September 2024
Revenue return £'000 Capital return £'000 Total return £'000 Revenue return £'000 Capital return £'000 Total return £'000 Revenue return £'000 Capital return £'000 Total return £'000
(Losses)/gains on investments held at fair value through profit or loss - (6,505) (6,505) - 65,315 65,315 - 46,078 46,078
Exchange (losses)/gains on currency transactions - (63) (63) - 572 572 - 1,093 1,093
Income from investments (note 2) 4,731 - 4,731 3,476 - 3,476 11,558 - 11,558
Other income 56 - 56 248 - 248 515 - 515
Gross revenue and capital (losses)/ gains 4,787 (6,568) (1,781) 3,724 65,887 69,611 12,073 47,171 59,244
Management fees (note 7) (446) (1,336) (1,782) (332) (997) (1,329) (735) (2,204) (2,939)
Other fees and expenses (473) (12) (485) (312) - (312) (22) (678)
(656)
Net return/(loss) before finance costs and taxation 3,868 (7,916) (4,048) 3,080 64,890 67,970 10,682 44,945 55,627
Finance costs (60) (179) (239) (59) (175) (234) (118) (355) (473)
Net return/(loss) before taxation 3,808 (8,095) (4,287) 3,021 64,715 67,736 10,564 44,590 55,154
Taxation on net return (454) - (454) (180) - (180) 147 - 147
Net return/(loss) after taxation 3,354 (8,095) (4,741) 2,841 64,715 67,556 10,711 44,590 55,301
Return/(loss) per ordinary share (note 3) 1.05p (2.53p) (1.48p) 1.34p 30.41p 31.75p 4.43p 18.45p 22.88p
The total columns of this statement represent the Income Statement of the
Company prepared in accordance with FRS 104.
The revenue return and capital return columns are supplementary to this and
are prepared under guidance published by the Association of Investment
Companies.
All revenue and capital items in the above statement derive from continuing
operations. The Company had no recognised gains or losses other than those
disclosed in the Income Statement and the Statement of Changes in
Equity.
The accompanying notes are an integral part of the condensed financial
statements.
CONDENSED Statement of Changes in Equity
Half-year ended Revenue reserve Other reserves £'000 Total
31 March 2025 Called-up Share £'000 shareholders' funds
(Unaudited) share premium account Capital reserve £'000
capital £'000 £'000
£'000
At 30 September 2024 18,369 301,300 263,216 10,229 70,420 663,534
Net return after taxation - - (8,095) 3,354 - (4,741)
Buyback of ordinary shares for treasury - (27,492) - (9,076) (36,568)
Ordinary dividend paid - - - (4,179) - (4,179)
Cancellation of share premium account (note 5) - (301,300) - - 301,300 -
At 31 March 2025 18,369 - 227,629 9,404 362,644 618,046
Half-year ended Revenue reserve Other reserves £'000 Total
31 March 2024 Called-up Share £'000 shareholders' funds
(Unaudited)
share premium account Capital reserve £'000
capital £'000 £'000
£'000
At 30 September 2023 10,819 41,995 217,076 12,496 96,611 378,997
Net return after taxation - - 64,715 2,841 - 67,556
Ordinary dividend paid - - - (6,489) - (6,489)
Cancellation of share premium account (note 5) - (41,995) - - 41,995 -
At 31 March 2024 10,819 - 281,791 8,848 138,606 440,064
Year ended Called-up Share premium account Capital reserve Revenue reserve Other Total
30 September 2024 share £'000 £'000 £'000 reserves £'000 shareholders'
(Audited) capital funds £'000
£'000
At 30 September 2023 10,819 41,995 217,076 12,496 96,611 378,997
Cancellation of share premium account - (41,995) - - 41,995 -
Issue of ordinary shares on HEFT/HNE combination 7,550 302,753 - - - 310,303
Issue costs in respect of the HEFT/HNE combination - (1,453) - - - (1,453)
Contribution from JHI towards the HEFT/HNE combination - - 1,550 - - 1,550
Tender offer of ordinary shares for treasury - - - - (63,907) (63,907)
Net return after taxation - - 44,590 10,711 - 55,301
Buyback of ordinary shares for treasury - - - - (4,279) (4,279)
Ordinary dividends paid - - - (12,978) - (12,978)
At 30 September 2024 18,369 301,300 263,216 10,229 70,420 663,534
The accompanying notes are an integral part of the condensed financial
statements.
CONDENSED Statement of Financial Position
(Unaudited) (Unaudited) (Audited)
31 March 31 March 30 September
2025 2024 2024
£'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 627,416 450,209 691,497
Current assets
Debtors 5,034 12,418 14,032
Cash at bank 16,827 24,519 3,113
21,861 36,937 17,145
Creditors: amounts falling due within one year (2,094) (17,317) (16,143)
Net current assets 19,767 19,620 1,002
Total assets less current liabilities 647,183 469,829 692,499
Creditors: amounts falling due after one year (29,137) (29,765) (28,965)
Net assets 618,046 440,064 663,534
Capital and reserves
Called-up share capital 18,369 10,819 18,369
Share premium account - - 301,300
Capital reserve 227,629 281,791 263,216
Revenue reserve 9,404 8,848 10,229
Other reserves (note 5) 362,644 138,606 70,420
Total shareholders' funds 618,046 440,064 663,534
Net asset value per ordinary share (note 6) 199.73p 206.83p 201.39p
The accompanying notes are an integral part of the condensed financial
statements.
CONDENSED cash flow statement
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended 30 September 2024
31 March 2025 31 March 2024 £'000
£'000 £'000
Cash flows from operating activities
Net (loss)/return before taxation (4,287) 67,736 55,154
Add back: finance costs 239 234 473
Losses/(gains) on investments held at fair value through profit or loss (65,315) (46,078)
6,505
Losses/(gains) on foreign exchange 63 (572) (1,093)
Taxation paid (87) (292) (257)
Increase in debtors (528) (492) (232)
Increase/(decrease) in creditors 822 (535) 438
Net cash inflow from operating activities 2,727 764 8,405
Cash flows from investing activities
Sales of investments held at fair value through profit or loss 255,690 104,450 461,678
Purchases of investments held at fair value through profit or loss (202,365) (89,965) (405,566)
Net cash inflow from investing activities 53,325 14,485 56,112
Cash flows from financing activities
Buyback of shares for treasury (37,802) - (3,044)
Equity dividends paid (net of refund of unclaimed distributions) (4,179) (6,489) (12,978)
Costs associated with the HEFT/HNE combination (226) - (1,225)
Net cash acquired and received following the HEFT/HNE combination - - 4,512
Total cash paid for the tender offer (including costs) - - (63,907)
Interest paid (237) (234) (471)
Net cash outflow from financing activities (42,444) (6,723) (77,113)
Net increase/(decrease) in cash and equivalents 13,608 8,526 (12,596)
Cash and cash equivalents at beginning of period 3,113 15,857 15,857
Gains/(losses) on foreign exchange 106 136 (148)
Cash and cash equivalents at end of period 16,827 24,519 3,113
Comprising:
Cash at bank 16,827 24,519 3,113
The accompanying notes are an integral part of the condensed financial
statements
.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. Accounting policies
The condensed set of financial statements has been prepared in accordance
with: FRS 104, Interim Financial Reporting; FRS 102, the Financial Reporting
Standard applicable in the UK and Republic of Ireland; and the Statement of
Recommended Practice for 'Financial Statements of Investment Trust Companies
and Venture Capital Trusts', which was updated by the Association of
Investment Companies in July 2022.
For the period under review, the Company's accounting policies have not varied
from those described in the Annual Report for the year ended 30 September
2024. The condensed set of financial statements has been neither audited nor
reviewed by the Company's auditor.
2. Income from investments
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
31 March 31 March 30 September
2025 2024 2024
£'000 £'000 £'000
Listed investments:
Overseas dividends 4,260 2,864 10,7
46
UK dividends 471 203 481
UK fixed-interest income - 409 331
4,731 3,476 11,558
3. (Loss)/return per ordinary share
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
31 March 31 March 30 September
2025 2024 2024
£'000 £'000 £'000
The return per ordinary share is based on the following figures:
Net revenue return 3,354 2,841 10,711
Net capital (loss)/return (8,095) 64,715 44,590
Net total (loss)/return (4,741) 67,556 55,301
Weighted average number of ordinary 320,776,267 212,768,122 241,688,916
shares in issue for each period
Revenue return per ordinary share 1.05p 1.34p 4.43p
Capital (loss)/return per ordinary share (2.53p) 30.41p 18.45p
Total (loss)/return per ordinary share (1.48p) 31.75p 22.88p
The Company has no securities in issue that could dilute the return per
ordinary share. Therefore, the basic and diluted returns per share are the
same.
4. Called-up share capital
At 31 March 2025, there were 367,390,497 shares in issue, of which 57,950,184
were held in treasury. During the half-year period ended 31 March 2025,
20,036,988 shares were repurchased for treasury at a cost of £36,568,000
(half-year ended 31 March 2024: no shares issued or repurchased, and year
ended 30 September 2024: 2,376,191 shares repurchased for treasury at a cost
of £4,279,000). Since the period end and as at 26 June 2025, 332,122 shares
have been repurchased to be held in treasury. As at 26 June 2025,
309,108,191 shares were entitled to a dividend.
5. Other reserves
31 March 2025 31 March 2024 30 September 2024
£'000 £'000 £'000
Special distributable reserve - 25,846 -
Additional special distributable reserve - 51,416 9,076
Merger reserve 61,344 61,344 61,344
Additional distributable reserve 301,300 - -
Total 362,644 138,606 70,420
The share premium account (£301,300,000) was cancelled on 11 March 2025 to
create a new additional distributable reserve of £301,300,000. The new
reserve will be available to the Company for buybacks of the Company's shares,
dividend distributions and other corporate purposes as permitted under the
Company's articles of association. The merger reserve is not distributable,
and nor was the share premium account in prior periods. As at 31 March 2025,
the total distributable reserves within 'other reserves' are £301,300,000 (31
March 2024: £77,262,000; 30 September 2024: £9,076,000). The realised
capital proportion of the capital reserve is also distributable.
6. Net asset value per share - basic and diluted
The net asset value per ordinary share is based on the 309,440,313 ordinary
shares in issue (excluding treasury shares) at 31 March 2025 (half year ended
31 March 2024: 212,768,122, year ended 30 September 2024: 329,477,301).
7. Management fees
Janus Henderson Fund Management UK Limited ("JHFM") is appointed to act as the
Company's alternative investment fund manager. JHFM delegates investment
management services to Janus Henderson Investors UK Limited ("JHIUK").
References to 'Janus Henderson' or the 'Manager' within these results refer to
the services provided by both JHFM Ltd and JHIUK.
Management fees are charged in accordance with the terms of the management
agreement. From 4 July 2024, on completion of the HEFT/HNE combination, the
management fee was reduced to 0.60% of net assets up to £500 million, 0.475%
of net assets from £500 million up to £1 billion, and 0.45% of net assets
equal to and above £1 billion. Previously, the Manager received a fee of
0.65% per annum of net assets up to £300 million and 0.55% of net assets
above £300 million. Any holdings in funds managed by Janus Henderson (of
which there are none) would be excluded from the calculation of the management
fee. There is no performance fee.
Management fees and finance costs are allocated 25% to revenue and 75% to
capital in the Condensed Income Statement.
8. Investments held at fair value through profit or loss
The table below analyses fair value measurements for investments held at fair
value through profit or loss. These fair value measurements are categorised
into different levels in the fair value hierarchy based on the valuation
techniques used and are defined as follows under FRS 102:
Level 1: the unadjusted quoted price in an active market for identical assets or
liabilities that the entity can access at the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable
(i.e. developed using market data) for the asset or liability, either directly
or indirectly.
Level 3: inputs are unobservable (i.e. for which market data is unavailable) for the
asset or liability.
Financial assets held at fair value through profit or loss at 31 March 2025 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Quoted equities 627,416 - - 627,416
Total 627,416 - - 627,416
Financial assets held at fair value through profit or loss at 31 March 2024 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Quoted equities 450,209 - - 450,209
Total 450,209 - - 450,209
Financial assets held at fair value through profit or loss at 30 September Level 1 Level 2 Level 3 Total
2024
£'000 £'000 £'000 £'000
Quoted equities 691,497 - - 691,497
Total 691,497 - - 691,497
There have been no transfers between levels of fair value hierarchy during the
period.
The valuation techniques used by the Company are explained in the accounting
policies note 1(c) in the Company's Annual Report for the year ended 30
September 2024.
9. Borrowings
As at 31 March 2025, the Company's bank overdraft included in "Creditors:
amounts falling due within one year" was £nil (31 March 2024: nil; 30
September 2024: £nil).
On 31 January
2022, the Company
issued €35m long
term fixed-rate
unsecured
loan notes in two
tranches:
· €25m unsecured loan notes maturing on 31 January 2047 with a fixed
coupon of 1.53%; and
· €10m unsecured loan notes maturing on 31 January 2052 with a fixed
coupon of 1.66%.
Total proceeds from the issue of the notes were £29,275,000 less £174,000
issue costs.
The unsecured loan notes are carried in the Statement of Financial Position at
par less the issue costs which are amortised over the life of the notes. In
order to comply with fair value accounting disclosures only, the fair value of
the unsecured loan notes has been estimated to be £17,203,000 (31 March 2024:
£19,221,000; 30 September 2024: £18,863,000), and is categorised as Level 3
in the fair value hierarchy. However, for the purpose of the daily NAV
announcements, the unsecured loan notes are valued at par in the fair value
NAV because they are not traded and the directors have assessed that par value
is the most appropriate value to be applied for this purpose. The Board is in
discussions with the loan noteholder and FEV as to the treatment of the loan
notes in view of the proposed combination.
10. Changes in net debt
The following table shows the movements during the period of net debt in the
statement of financial position:
At 1 October 2024 Cash flows Amortisationof issue Currency differences At 31 March
£'000 £'000 costs £'000 2025
£'000 £'000
Financing activities
Unsecured loan notes (28,965) - (3) (169) (29,137)
(28,965) - (3) (169) (29,137)
Non-financing activities
Cash and cash equivalents 3,113 13,608 - 106 16,827
3,113 13,608 - 106 16,827
Total (25,852) 13,608 (3) (63) (12,310)
At 1 October 2023 Cash flows Amortisation of issue costs Currency differences At 31 March
£'000 £'000 £'000 £'000 2024
£'000
Financing activities
Unsecured loan notes (30,199) - (2) 436 (29,765)
(30,199) - (2) 436 (29,765)
Non-financing activities
Cash and cash equivalents 15,857 8,526 - 136 24,519
15,857 8,526 - 136 24,519
Total (14,342) 8,526 (2) 572 (5,246)
At 1 October 2023 Cash flows Amortisation of issue costs Currency differences At 30 September
£'000 £'000 £'000 £'000 2024
£'000
Financing activities
Unsecured loan notes (30,199) - (5) 1,239 (28,965)
(30,199) - (5) 1,239 (28,965)
Non-financing activities
Cash and cash equivalents 15,857 (12,596) - (148) 3,113
15,857 (12,596) - (148) 3,113
Total (14,342) (12,596) (5) 1,091 (25,852)
11. Going concern and material uncertainty
The assets of the Company consist of securities that are primarily readily
realisable and, accordingly, the directors believe that the Company has
adequate resources to continue in operational existence for at least 12 months
from the date of approval of the financial statements in this Half-Year
Report. The Board has also assessed the principal risks (set out in the Annual
Report for the year ended 30 September 2024), as well as the impact of the
ongoing geopolitical events on the Company.
As detailed in Principal Risks and Uncertainties, the Board has announced a
proposed combination of the assets of the Company with the assets of FEV,
subject to, amongst other things, shareholder approval, through a tax
efficient scheme of reconstruction under s110 Insolvency Act 1986 (the
"Proposals"). This would result in the voluntary liquidation of the Company.
Due to the requirement for the Proposals to receive approval from the
shareholders of both the Company and FEV, there remains a material uncertainty
as to the future of the Company. More detail on the Proposals can be found in
the Chair's Statement above and in the separate RNS announcement dated 19 June
2025.
However, should the Proposals not receive the necessary shareholder approvals
or the conditions to the Proposals not be satisfied, the Board believes that
the Company would remain a going concern. Accordingly, the Board has prepared
the financial statements in this Half-Year Report on a going concern basis.
12. Dividends
On 19 May 2025, the directors declared an interim dividend of 1.40p per
ordinary share (2024: 3.05p), paid on 27 June 2025 to shareholders on the
register of members on 30 May 2025. The shares were quoted ex-dividend on 29
May 2025. Based on the 309,108,191 ordinary shares in issue (excluding
treasury shares) at 30 May 2025, the cost of this dividend was £4,328,000
(2024 interim dividend: £6,489,000). A further pre-liquidation dividend may
be paid in light of the proposed combination with FEV, subject to the passing
of the required shareholder resolutions to combine the Company with FEV by way
of a proposed scheme of reconstruction and members' voluntary winding up of
the Company under s110 Insolvency Act 1986.
13. Comparative information
The financial information contained in this half-year report does not
constitute statutory accounts as defined in section 434 of the Companies Act
2006. The financial information for the half years ended 31 March 2025 and 31
March 2024 has not been audited nor reviewed by the Company's auditor. The
figures and financial information for the year ended 30 September 2024 are an
extract based on the latest published accounts and do not constitute statutory
accounts for that year. Those accounts have been delivered to the Registrar of
Companies and included the Independent Auditor's Report which was unqualified
and did not contain a statement under either s498(2) or s498(3) of the
Companies Act 2006. A glossary of terms and details of alternative performance
measures can be found in the Annual Report for the year ended
30 September 2024.
14. General information
Company status
Henderson European Trust plc is registered as an investment company in England
and Wales, has its registered office at 201 Bishopsgate, London EC2M 3AE and
is listed on the main market of the London Stock Exchange.
Company number: 00427958
SEDOL/ISIN: BLSNGB0/GB00BLSNGB01
London Stock Exchange ("TIDM") code: HET
Global Intermediary Identification Number ("GIIN"): THMNPN.99999.SL.826
Legal Entity Identifier ("LEI") number: 213800GS89AL1DK3IN50
Directors and secretary
The directors of the Company are Vicky Hastings (Chair), Melanie Blake (Chair
of the Audit and Risk Committee), Marco Bianconi, Stephen King and Rutger
Koopmans. The corporate secretary is Janus Henderson Secretarial Services UK
Limited.
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.hendersoneuropeantrust.com (http://www.hendersoneuropeantrust.com) .
For further information, please contact:
Vicky Hastings Greenbrook, PR Adviser
Chair of the Board Peter Hewer
Henderson European Trust plc Rob White
Tel: 020 7818 2220 Tel. 020 7952 2000
HendersonEuropeanTrust@greenbrookadvisory.com
Deutsche Numis, Corporate Broker
Nathan Brown
Telephone: 020 7547 0569
E. nathan.brown@db.com
Matt Goss
Telephone: 020 7260 1642
E. matt.goss@db.com
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) are
incorporated into, or form part of, this announcement.
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.
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