Henderson HighIncome - Half-year Report
27/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240927:nRSa8956Fa&default-theme=true
RNS Number : 8956F Henderson High Income Trust PLC 27 September 2024
LEGAL ENTITY IDENTIFIER: 213800OEXAGFSF7Y6G11
HENDERSON HIGH INCOME TRUST PLC
Unaudited results for the half-year ended 30 June 2024
This announcement contains regulated information
Investment Objective
The Company invests in a prudently diversified selection of both well-known
and smaller companies to provide investors with a high dividend income stream
while also maintaining the prospect of capital growth.
Performance for the six months to 30 June 2024
· Net asset value (NAV) total return (debt at fair value)(1) of 6.5%
compared with a total return from the benchmark(2) of 5.9%
· Mid-market share price total return (including dividends reinvested) of
3.4%
Financial highlights
at 30 June 2024 at 31 December 2023
NAV per share(3) 175.2p 169.6p
Mid-market price per share 156.5p 156.5p
Net assets £304.2m £222.3m
Dividends paid/payable 5.25p 10.35p
Dividend yield 6.8% 6.6%
Gearing 21.5% 21.4%
(Discount)/premium to NAV (debt at fair value) (10.7%) (7.7%)
Total return performance (including dividends reinvested and excluding
transaction costs)
6 months 1 year 3 years 5 years 10 years
% % % % %
NAV total return (debt at fair value)(1) 6.5 13.5 22.3 32.2 81.3
Share price total return(4) 3.4 2.3 8.3 21.4 57.8
Benchmark(2) 5.9 12.4 16.5 24.3 67.9
FTSE All-Share Index 7.4 13.0 23.9 30.9 77.8
ICE BofA Sterling Non-Gilts Index -0.1 9.7 -11.2 -3.8 25.6
1. Net asset value with debt at fair value per ordinary share total return
(including dividends reinvested and excluding transaction costs)
2. The benchmark is a composite of 80% of the FTSE All-Share Index (total
return) and 20% of the ICE BofA Sterling Non-Gilts Index (total return)
rebalanced annually
3. Net asset value per share with debt at fair value as published by the
Association of Investment Companies (AIC)
4. The mid-market share price total return (including dividends reinvested)
Sources: Morningstar Direct and Janus Henderson
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Markets/Performance
The first half of 2024 has been a generally positive period for financial
markets. With softer inflation globally, policy makers are focusing on
lowering interest rates and investors have responded accordingly by increasing
exposure to financial assets. Geopolitical tensions remain elevated however,
particularly in Ukraine and the Middle East and the US presidential election
campaign is proving eventful. Closer to home in the UK, July saw an earlier
than expected general election and of course a change in government.
Against this backdrop the Company made positive progress in the first half of
2024 achieving a net asset value total return of +6.5% compared with a
benchmark return of +5.9%, outperformance of 0.6%. The Company's share price
total return was lower at +3.4%.
Gearing/Asset Allocation
The Company started 2024 with an overweight position in equities and an
underweight position in fixed interest investments compared with its benchmark
(80% equities, 20% bonds). This position has not changed markedly during the
first half of 2024 and the Company's gearing is also largely unchanged (21.5%
as at 30 June 2024).
The Board has continued to regularly review the level of gearing with the
Company's Fund Manager during the current period of higher borrowing costs
notwithstanding the fact that a proportion of the Company's borrowings are at
fixed rates.
Combination with Henderson Diversified Income Trust plc
As highlighted in the 2023 Report and Accounts, the Company was able to issue
£72.1 million of new shares in January 2024 following the successful
combination with Henderson Diversified Income Trust plc. This will help to
improve the liquidity and marketability in the Company's shares and also help
to spread the Company's fixed costs across a larger shareholder base which is
in the interests of all our shareholders.
Dividends
The first interim dividend of 2.625 pence per share was paid on 26 April 2024
and the second interim dividend for the same amount was paid on 26 July 2024.
A third interim dividend, to be paid from the Company's revenue account, of
2.675 pence per share was announced on 4 July 2024 and this dividend will be
paid on 25 October 2024 to shareholders registered at the close of business on
13 September 2024 (with the shares being quoted ex-dividend on 12 September
2024).
The UK equity market is delivering growth in dividend payouts during 2024 as
UK corporates remain in relatively robust financial health. Within the market
UK banks in particular have increased payout levels although this has been
offset to some degree by lower dividends from the UK mining sector where
weaker metals prices globally have impacted profitability.
As usual David Smith, the Company's Fund Manager, regularly updates the Board
on prospective income levels from the Company's portfolio of investments and
the Board continues to have confidence in the Company's ability to deliver a
high income return to shareholders.
Outlook
The immediate outlook for markets is dominated by speculation over the timing
of interest rate cuts with the US Federal Reserve having just instigated its
first reduction. The Bank of England has made its first cut from 5.25% to 5%
and there have been a number of reductions across Europe. Inflationary
pressures are abating and with early signs of weaker labour markets across the
globe it is now likely that monetary policy will loosen further over the
remainder of 2024.
The UK equity market continues to look relatively attractively priced in a
global context and is currently in the midst of the half year results season;
generally it is showing the UK economy in robust shape compared with other
European neighbours and UK banks in particular are seeing low levels of
distress across both the corporate and personal sectors although there are
undoubted pockets of weaker activity, particularly in UK construction and
housebuilding. Overall, however, with real wage growth and expectations that
monetary policy is on a downward trajectory, the outlook for UK equities
appears to be positive and within the Company's portfolio the Fund Manager has
increased exposure to the mid cap sector which should benefit from lower
interest rates.
There are of course continuing geopolitical tensions to be mindful of and as
we near the US presidential election in November we should expect further
volatility. The first Labour government budget at the end of October may also
result in higher levels of personal taxation which could prove a headwind, but
the new government has made positive noises around focusing on growing the
economy.
Against this backdrop the Company will continue to focus on the primary
objective of delivering a high level of income to shareholders whilst seeking
to deliver longer term capital growth.
Jeremy Rigg
Chairman
26 September 2024
Fund Manager's Report
Markets
The UK equity market made good returns during the first half of the year with
the FTSE All-Share Index up 7.4% on a total return basis. Although the Bank of
England (BoE) kept its benchmark interest rate on hold at 5.25% during the
first half of the year, slowing inflation raised optimism towards the end of
the period that interest rates may be cut, and this was confirmed by the BoE's
first cut in interest rates on 1(st) August. Indeed, annual inflation
moderated to 2.0% in May - the first time it had reached the BoE's target in
three years, although it may increase again as we head towards the end of the
year in response to the proposed rise in the energy price cap and renewed
upward pressure on wages as a result of above-inflation pay settlements in the
public sector. UK GDP growth expanded by 0.7% over the first quarter as the
economy emerged from the technical recession it entered at the end of last
year. UK government bond yields rose during the period as expectations over
imminent interest rate cuts from central banks at the start of the year were
pushed out to the second half. The 10-year gilt yield increased to 4.2% at the
end of June, from 3.5% at the beginning of the period.
Larger cap companies continued to outperform mid-caps with the FTSE 100 Index
up 7.9% versus the 4.8% gain from the FTSE 250 Index. Sectors such as health
care, industrials and financials performed best, while utilities, basic
materials and real estate lagged.
Performance
The Company's NAV (with debt at fair value) rose by 6.5% during the period,
outperforming the Company's benchmark return of 5.9%. Within the equity
portfolio, holdings in Britvic, NatWest and Intermediate Capital were positive
for performance. Britvic announced strong results during the period before
being subject to a bid approach from Carlsberg. NatWest reported good results
with net interest margins ahead of expectations and a 15% increase in the
dividend. Alternative asset manager Intermediate Capital announced solid
trading with better than expected fund raisings which should lead to future
profit growth. Elsewhere the portfolio's positions in Burberry and Mony Group
(owner of MoneySuperMarket.com) detracted from returns. Mony Group's share
price was weak as investors feared that an easing in insurance premium price
inflation would lead to fewer consumers switching their insurance providers.
Burberry reported poor results and cautioned on the outlook given the
challenging demand environment for luxury goods. After period end the company
announced a further deterioration in trading and a suspension of the dividend,
hence the position was sold.
Portfolio Activity
At the start of the year the Company completed the proposed combination with
Henderson Diversified Income Trust plc (HDIV). The £72.1 million of new
assets taken on as part of the transaction were invested in line with the
existing portfolio at the time. The bond allocation remained relatively stable
through the period and ended June at 14.0% of net assets.
Within the equity portfolio new holdings were established in Dunelm, Mondi and
Aviva. Dunelm is the UK's leading homewares retailer with a strong business
model which supports its competitive price position that has driven market
share gains. The company also has a robust balance sheet, high free cash flow
and an attractive dividend yield. Mondi is an integrated European packaging
and paper company where we believe cyclical pressures that had constrained
profits in recent years are now easing. Current investment in new capacity
should also produce value accretive growth for the company over the medium
term. After a period of restructuring, Aviva is now a much simpler business
with good market positions in its core operations in the UK and Canada. It is
well diversified across both life and general insurance and generates good
cash flow. Funding came from the sale of B&M European Value Retail and
Woodside Energy. B&M was sold on concerns that the business was being run
too aggressively, while fears regarding the oversupplied LNG (Liquefied
Natural Gas) market led us to exit the position in Woodside Energy.
David Smith
Fund Manager
26 September 2024
INVESTMENT PORTFOLIO
Classification of Investments by Sector
Company Total Total
30 June 2024 31 December 2023
% %
FIXED INTEREST
Preference shares 1.6 1.7
Other fixed interest 10.0 10.6
------ ------
Total Fixed Interest 11.6 12.3
------ ------
EQUITIES
Energy
Oil, gas and coal 5.7 5.6
------ ------
Total Energy 5.7 5.6
------ ------
Basic Materials
Chemicals 1.8 1.7
Industrial metals and mining 4.4 4.5
------ ------
Total Basic Materials 6.2 6.2
------ ------
Industrials
Aerospace and defence 0.9 -
Construction and materials 0.9 0.8
Electronic and electrical equipment 0.6 1.0
General industrials 1.8 1.3
Industrial engineering 0.8 0.9
Industrial support services 2.4 2.7
------ ------
Total Industrials 7.4 6.7
------ ------
Consumer Discretionary
Consumer services 1.4 1.7
Household goods and home construction 1.1 1.3
Media 2.8 3.0
Personal goods 0.7 1.2
Retailers 2.3 2.3
Travel and leisure 1.0 1.7
------ ------
Total Consumer Discretionary 9.3 11.2
------ ------
Health Care
Pharmaceuticals and biotechnology 3.5 4.0
------ ------
Total Health Care 3.5 4.0
------ ------
Consumer Staples
Beverages 4.0 4.4
Food producers 2.8 3.0
Personal care, drug and grocery stores 6.1 5.2
Tobacco 6.6 5.8
------ ------
Total Consumer Staples 19.5 18.4
------ ------
Utilities
Electricity 1.1 1.3
Gas, water and multi-utilities 5.6 5.7
------ ------
Total Utilities 6.7 7.0
------ ------
Financials
Banks 7.4 5.5
Closed end investments 2.1 2.3
Finance and credit services 1.0 1.1
Investment banking and brokerage services 7.5 8.7
Life insurance 4.1 3.0
Non-life insurance 2.8 2.5
------ ------
Total Financials 24.9 23.1
------ ------
Technology
Software and computer services 1.1 1.0
Technology hardware and equipment 0.9 0.9
------ ------
Total Technology 2.0 1.9
------ ------
Real Estate
Real estate investment trusts 3.2 3.6
------ ------
Total Real Estate 3.2 3.6
-------- --------
Total investments 100.0 100.0
===== =====
TWENTY LARGEST INVESTMENTS
Company Sector Fair value % Fair value %
as at of portfolio as at of portfolio
30 June 2024 31 December 2023 2023
2024 £'000
£'000
British American Tobacco Consumer Staples 14,948 4.0 9,545 3.5
Unilever Consumer Staples 14,411 3.9 8,747 3.2
HSBC Financials 12,762 3.5 7,737 2.9
Rio Tinto Basic Materials 11,590 3.1 8,025 3.0
BP Energy 10,761 2.9 6,399 2.4
Shell Energy 10,283 2.8 6,310 2.3
RELX (Netherlands) Consumer Discretionary 10,166 8,221 3.0
2.8
Imperial Brands Consumer Staples 9,319 2.5 5,927 2.2
3i Financials 8,523 2.3 5,602 2.1
Tesco Consumer Staples 8,099 2.2 5,374 2.0
NatWest Financials 7,748 2.1 3,026 1.1
National Grid Utilities 7,741 2.1 5,407 2.0
Britvic Consumer Staples 7,513 2.0 4,282 1.6
Phoenix Financials 7,448 2.0 5,379 2.0
Lloyds Banking Group Financials 6,985 1.9 3,958 1.5
Intermediate Capital Financials 6,561 1.8 5,323 2.0
M&G Financials 6,397 1.7 5,085 1.9
Hilton Food Group Consumer Staples 5,970 1.6 4,406 1.6
Compass Consumer Discretionary 5,319 1.4 4,579 1.7
AstraZeneca Health Care 5,034 1.4 4,584 1.7
------------ ------------ ------------ ------------
Total 177,578 48.0 117,916 43.7
======= ======= ======= =======
The increase in value of the twenty largest investments reflects the
additional value invested following the completion of the HDIV transaction.
For further details please refer to note 10.
EQUITY PORTFOLIO SECTOR EXPOSURE AS AT 30 JUNE 2024
Equity portfolio weight FTSE All-Share Index
% %
Financials 29.4 24.5
Consumer Staples 21.7 13.4
Consumer Discretionary 10.3 10.8
Industrials 8.2 12.3
Utilities 7.5 3.6
Basic Materials 6.9 7.1
Energy 6.3 11.2
Health Care 3.9 12.0
Real Estate 3.6 2.6
Technology 2.2 1.3
Telecommunications 0.0 1.2
Total -------- --------
100.0 100.0
===== =====
Source: Janus Henderson
EQUITY PORTFOLIO SECTOR EXPOSURE AS AT 30 JUNE 2024
Equity portfolio weight
%
FTSE All-Share Index
%
Financials
29.4
24.5
Consumer Staples
21.7
13.4
Consumer Discretionary
10.3
10.8
Industrials
8.2
12.3
Utilities
7.5
3.6
Basic Materials
6.9
7.1
Energy
6.3
11.2
Health Care
3.9
12.0
Real Estate
3.6
2.6
Technology
2.2
1.3
Telecommunications
0.0
1.2
Total
--------
100.0
=====
--------
100.0
=====
Source: Janus Henderson
Principal Risks and Uncertainties
The principal risks associated with the Company's business can be divided into
the following main areas:
· Climate change risk
· Investment risk
· Market/financial risk
· Operational risks including cyber risks, pandemic risks and epidemic risks and
risks relating to terrorism and international conflicts
· Tax, legal and regulatory risk
Information on these risks and how they are managed is given in the Company's
Annual Report for the year-ended 31 December 2023. The Board has completed a
thorough review of the principal risks and considers that these risks have not
changed over the past six months and are as applicable to the remaining six
months of the financial year as they were to the six months under review.
Statement OF Directors' ResponsibilitIES
The Directors (listed in note 13) confirm that, to the best of their
knowledge:
a) the condensed set of financial statements has been prepared in accordance with
FRS 104 Interim Financial Reporting issued by the Financial Reporting Council;
b) this report includes a fair review of the information required by Disclosure
Guidance and Transparency Rule 4.2.7R (indication of important events during
the first six months and description of principal risks and uncertainties for
the remaining six months of the year); and
c) this report includes a fair review of the information required by Disclosure
Guidance and Transparency Rule 4.2.8R (disclosure of related party
transactions and changes therein).
For and on behalf of the Board
Jeremy Rigg
Chairman
26 September 2024
Condensed Statement of Comprehensive Income
Half-year ended Half-year ended Year-ended
30 June 2024 30 June 2023 31 December 2023
(Unaudited) (Unaudited) (Audited)
Revenue Capital Total Revenue return Capital return £'000 Total Revenue Capital return Total
return return return £'000 return return £'000 return
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments held at fair value through profit or loss - 8,900 8,900 - (420) (420) - 10,620 10,620
Income from investments held at fair value through profit or loss 11,917 - 11,917 8,415 - 8,415 14,859 - 14,859
Other interest receivable and similar income 44 - 44 275 - 275 538 - 538
----------- --------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Gross revenue and capital gains/(losses) 11,961 8,900 20,861 8,690 (420) 8,270 15,397 10,620 26,017
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Expenses
Management fees (note 2) (327) (490) (817) (282) (422) (704) (565) (846) (1,411)
Other administrative expenses (307) - (307) (227) - (227) (456) - (456)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net return before finance costs and taxation 11,327 8,410 19,737 8,181 (842) 7,339 14,376 9,774 24,150
Finance costs (442) (1,327) (1,769) (304) (914) (1,218) (646) (1,938) (2,584)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net return before taxation 10,885 7,083 17,968 7,877 (1,756) 6,121 13,730 7,836 21,566
Taxation on net return (179) 94 (85) (157) - (157) (247) 101 (146)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net return after taxation 10,706 7,177 17,883 7,720 (1,756) 5,964 13,483 7,937 21,420
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Return/(loss) per ordinary share (note 3) 6.35p 4.25p 10.60p 5.94p (1.35p) 4.59p 10.39p 6.11p 16.50p
======= ======= ======= ======= ======= ======= ======= ======= =======
The total columns of this statement represent the Company's Income Statement,
prepared in accordance with FRS 104. The revenue and capital columns are
supplementary to this and are published under guidance from the Association of
Investment Companies.
The Company has no other comprehensive income items recognised other than
those disclosed in the Income Statement.
All items in the above statement derive from continuing operations. Although
no operations were acquired or discontinued during the period, please refer to
note 10 for further details on the HDIV transaction.
The accompanying notes are an integral part of the condensed financial
statements.
Condensed Statement of Changes in Equity
Half-year ended 30 June 2024 (Unaudited) Called up Share premium account Capital Other capital reserves Revenue reserve Total
redemption
share capital £'000
reserve £'000 £'000 £'000
£'000
£'000
At 1 January 2024 6,490 128,827 26,302 51,807 8,916 222,342
Net return after taxation - - - 7,177 10,706 17,883
Issue of shares on the HDIV transaction 2,117 69,949 - - - 72,066
Listing fees in respect of new shares issued following the HDIV transaction - (146) - - - (146)
Fourth interim dividend (2.625p per share) for the year-ended 31 December - - - - (3,407) (3,407)
2023, paid 26 January 2024
First interim dividend (2.625p per share) for the year-ending 31 December - - - - (4,519) (4,519)
2024, paid
26 April 2024
Refund of unclaimed dividends - - - - 19 19
------------ ------------ ------------ ------------ ------------ ------------
At 30 June 2024 8,607 198,630 26,302 58,984 11,715 304,238
======= ======= ======= ======= ======= =======
Half-year ended 30 June 2023 (Unaudited) Called up Share premium account Capital Other capital reserves Revenue reserve Total
redemption
share capital £'000
reserve £'000 £'000 £'000
£'000
£'000
At 1 January 2023 6,490 128,827 26,302 43,870 8,788 214,277
Net return after taxation - - - (1,756) 7,720 5,964
Fourth interim dividend (2.575p per share) for the year-ended 31 December - - - - (3,342) (3,342)
2022, paid 27 January 2023
First interim dividend (2.575p per share) for the year-ending 31 December - - - - (3,342) (3,342)
2023, paid
28 April 2023
Refund of unclaimed dividends - - - - 14 14
------------ ------------ ------------ ------------ ------------ ------------
At 30 June 2023 6,490 128,827 26,302 42,114 9,838 213,571
======= ======= ======= ======= ======= =======
Year-ended 31 December 2023 (Audited) Called up Share premium account Capital Other capital reserves Revenue reserve Total
redemption
share capital £'000
reserve £'000 £'000 £'000
£'000
£'000
At 1 January 2023 6,490 128,827 26,302 43,870 8,788 214,277
Net return after taxation - - - 7,937 13,483 21,420
Fourth interim dividend (2.575p per share) for the year-ended 31 December - - - - (3,342) (3,342)
2022, paid
27 January 2023
First interim dividend (2.575p per share) for the year-ended 31 December 2023, - - - - (3,342) (3,342)
paid 28 April 2023
Second interim dividend (2.575p per share) for the year-ended 31 December - - - - (3,342) (3,342)
2023, paid 28 July 2023
Third interim dividend (2.575p per share) for the year-ended 31 December 2023, - - - - (3,342) (3,342)
paid
27 October 2023
Refund of unclaimed dividends - - - - 13 13
------------ ------------ ------------ ------------ ------------ ------------
At 31 December 2023 6,490 128,827 26,302 51,807 8,916 222,342
======= ======= ======= ======= ======= =======
The accompanying notes are an integral part of the condensed financial
statements.
Condensed STATEMENT OF FINANCIAL POSITION
30 June 2024 30 June 2023 31 December 2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Non-current assets
Investments held at fair value through profit or loss (note 4) 369,785 259,000 270,007
------------ ------------ ------------
Current assets
Debtors 3,064 4,496 2,092
Cash at bank and in hand 4,047 2,843 1,990
------------ ------------ ------------
7,111 7,339 4,082
------------ ------------ ------------
Creditors: amounts falling due within one year (52,785) (32,906) (31,880)
------------ ------------ ------------
Net current liabilities (45,674) (25,567) (27,798)
------------ ------------ ------------
Creditors: amounts falling due after more than one year (19,873) (19,862) (19,867)
------------ ------------ ------------
Net assets 304,238 213,571 222,342
======= ======= =======
Capital and reserves
Called up share capital (note 6) 8,607 6,490 6,490
Share premium account 198,630 128,827 128,827
Capital redemption reserve 26,302 26,302 26,302
Other capital reserves 58,984 42,114 51,807
Revenue reserve 11,715 9,838 8,916
------------ ------------ ------------
Total shareholders' funds 304,238 213,571 222,342
======= ======= =======
Net asset value per ordinary share (note 5) 176.74p 164.54p 171.30p
======= ======= =======
The accompanying notes are an integral part of the condensed financial
statements.
Condensed Statement of Cash Flows
Half-year ended Half-year ended
30 June 2024 30 June 2023 Year-ended
(Unaudited) (Unaudited) 31 December 2023
£'000 £'000 (Audited)
£'000
Cash flows from operating activities
Net return before taxation 17,968 6,121 21,566
Add back: finance costs 1,769 1,218 2,584
Add: (gains)/losses on investments held at fair value through profit or loss (8,900) 420 (10,620)
Withholding tax on dividends deducted at source (85) (157) (146)
Increase in debtors (972) (189) (164)
Decrease in creditors (235) (292) (337)
-------------- -------------- --------------
Net cash inflow from operating activities 9,545 7,121 12,883
-------------- -------------- --------------
Cash flows from investing activities
Sales of investments held at fair value through profit or loss 53,912 28,282 66,925
Purchases of investments held at fair value through profit or loss (105,535) (31,134) (67,282)
-------------- -------------- --------------
Net cash outflow from investing activities (51,623) (2,852) 357
-------------- -------------- --------------
Cash flows from financing activities
Net cash acquired and received following the HDIV transaction 32,586 - -
Listing fees in respect of new shares issued following the HDIV transaction (146) - -
Equity dividends paid (net of refund of unclaimed distributions) (7,907) (6,670) (13,355)
Drawdown of loans 21,070 2,837 1,649
Interest paid (1,764) (1,213) (2,575)
-------------- -------------- --------------
Net cash inflow/(outflow) from financing activities 43,839 (5,046) (14,281)
-------------- -------------- --------------
Net increase/(decrease) in cash and cash equivalents 1,761 (777) (1,755)
Cash and cash equivalents at beginning of period 1,990 2,873 2,873
Exchange movements 296 747 872
-------------- -------------- --------------
Cash and cash equivalents at end of period 4,047 2,843 1,990
Comprising: -------------- -------------- --------------
Cash at bank 4,047 2,843 1,990
======== ======== ========
The accompanying notes are an integral part of the condensed financial
statements.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. Accounting policies: basis of accounting
The Company is a registered investment company as defined by Section 833 of
the Companies Act 2006 and operates as an investment trust in accordance with
Section 1158 of the Corporation Tax Act 2010.
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 31 December 2023.
The condensed set of financial statements has been neither audited nor
reviewed by the Company's auditor.
2. Management fees
Management fees are charged in accordance with the terms of the management
agreement which are set out in the Company's Annual Report for the year-ended
31 December 2023.
3. Revenue return per ordinary share
The revenue return per ordinary share is based on the following figures:
Half-year ended Half-year ended Year-ended
30 June 2024 (Unaudited) 30 June 2023 (Unaudited) 31 December 2023
£'000 £'000 (Audited)
£'000
Net revenue return 10,706 7,720 13,483
Net capital return 7,177 (1,756) 7,937
Total return 17,883 5,964 21,420
Weighted average number of ordinary shares 168,651,693 129,796,278 129,796,278
Pence
Pence Pence
Revenue return per ordinary share 6.35 5.94 10.39
Capital return/(loss) per ordinary share 4.25 (1.35) 6.11
Total return per ordinary share 10.60 4.59 16.50
The Company does not have any dilutive securities therefore the basic and
diluted returns per share are the same.
4. Fair values of financial assets and financial liabilities
The fair values of the financial assets and liabilities are either carried in
the Statement of Financial Position at their fair value (investments and
derivatives), or the statement of financial position amount is a reasonable
approximation of fair value (due from brokers, dividends, and interest
receivable, due to brokers, accruals, cash at bank, bank overdrafts and
amounts due under the multi-currency loan facility). At 30 June 2024 the fair
value of the senior unsecured note has been estimated to be £18,095,000 (30
June 2023: £17,043,000; 31 December 2023: £18,696,000) and is categorised as
Level 3 in the fair value hierarchy.
The current estimated fair value of the senior unsecured note is calculated
using a discount rate based on the redemption yield of the relevant existing
reference UK Gilt plus a suitable estimated credit spread. The estimated
credit spread is based on the spread between the yield of the ICE BofA 10-15
Year A Sterling Non-Gilt Index and the redemption yield of the ICE BofA 10-15
Year UK Gilt Index. The discount rate is calculated and updated at each month
end and applied daily to determine the Company's published fair value NAVs.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset:
· 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: valued by reference to valuation techniques using
observable inputs other than quoted prices included in Level 1.
· Level 3: valued by reference to valuation techniques using inputs
that are not based on observable market data.
Financial assets and financial liabilities at fair value through profit or Level 1 Level 2 Level 3 Total
loss at 30 June 2024
£'000 £'000 £'000 £'000
Equity investments 327,067 - - 327,067
Fixed interest investments:
- Preference shares 5,748 - - 5,748
- Other 36,970 - - 36,970
Total 369,785 - - 369,785
Financial assets and financial liabilities at fair value through profit or Level 1 Level 2 Level 3 Total
loss at 30 June 2023
£'000 £'000 £'000 £'000
Equity investments 229,312 - - 229,312
Fixed interest investments:
- Preference shares 3,870 - - 3,870
- Other 25,818 - - 25,818
- Options - (5) - (5)
Total 259,000 (5) - 258,995
Level 1 Level 2 Level 3 Total
Financial assets and financial liabilities at fair value through profit or £'000 £'000 £'000 £'000
loss at 31 December 2023
Equity investments 236,793 - - 236,793
Fixed interest investments:
- Preference shares 4,470 - - 4,470
- Other 28,744 - - 28,744
Total 270,007 - - 270,007
The Company's holdings in options are included within Level 2 and are included
in creditors amounts falling due within one year in the Statement of Financial
Position.
Premiums from written options during the half-year ended 30 June 2024 were
£nil (half-year ended 30 June 2023: £239,000; year-ended 31 December 2023:
£454,000).
5. Net asset value per ordinary share
The net asset value per ordinary share is based on the net assets attributable
to the ordinary shares of £304,238,000 (half-year ended 30 June 2023:
£213,571,000; year ended 31 December 2023: £222,342,000) and on the
172,141,700 ordinary shares in issue at 30 June 2024 (30 June 2023:
129,796,278; 31 December 2023: 129,796,278).
6. Share capital
On 17 January 2024 the Company issued 42,345,422 new shares to HDIV
shareholders in consideration of the £72.1 million of net assets acquired
from HDIV in accordance with the scheme of reconstruction and winding up of
HDIV under section 110 of the Insolvency Act 1986. No further shares were
issued during the six months under review (half-year ended 30 June 2023: nil;
year-ended 31 December 2023: nil).
At 30 June 2024 there were 172,141,700 ordinary shares of 5p nominal value in
issue. Between 1 July and 26 September 2024, no shares have been issued. The
Company has no shares held in Treasury.
7. Dividends
The Company pays dividends on a quarterly basis. In respect of the year ended
31 December 2023, a fourth interim dividend of 2.625p per share (2022: 2.575p)
was paid on 26 January 2024 to shareholders on the register at close of
business on 8 December 2023. In respect of the year ending 31 December 2024, a
first interim dividend of 2.625p per share (2023: 2.575p) was paid on 26 April
2024 to shareholders on the register at close of business on 5 April 2024.
These dividends are reflected in the half-year financial statements.
A second interim dividend of 2.625p per share (2023: 2.575p) for the year
ending 31 December 2024 was paid on 26 July 2024 to shareholders on the
register at close of business on 14 June 2024. A third interim dividend of
2.675p per share (2023: 2.575p) for the year ending 31 December 2024 will be
paid on 25 October 2024 to shareholders on the register at close of business
on 13 September 2024. The shares will be quoted ex-dividend on 12 September
2024.
In accordance with FRS 102, the second and third interim dividends have not
been accrued for in the half-year financial statements as they will be paid
after the period end.
8. Net debt reconciliation
Cash Bank loans repayable within one year Other debt repayable after more than one year Total
and cash
equivalents £'000 £'000 £'000
£'000
Net debt as at 1 January 2024 1,990 (30,639) (19,867) (48,516)
Cash flows 1,761 (21,070) - (19,309)
Non cash flows:
Exchange movements 296 (69) - 227
Effective interest movements - - (6) (6)
Net debt as at 30 June 2024 4,047 (51,778) (19,873) (67,604)
Cash Bank loans repayable within one year Other debt repayable after more Total
and cash
equivalents £'000 than one year £'000
£'000
£'000
Net debt as at 1 January 2023 2,873 (29,141) (19,858) (46,126)
Cash flows (777) (2,837) - (3,614)
Non cash flows:
Exchange movements 747 257 - 1,004
Effective interest movements - - (4) (4)
Net debt as at 30 June 2023 2,843 (31,721) (19,862) (48,740)
Cash Bank loans repayable within one year Other debt repayable after more Total
and cash
equivalents £'000 than one year £'000
£'000
£'000
Net debt as at 1 January 2023 2,873 (29,141) (19,858) (46,126)
Cash flows (1,755) (1,649) - (3,404)
Non cash flows:
Exchange movements 872 151 - 1,023
Effective interest movements - - (9) (9)
Net debt as at 31 December 2023 1,990 (30,639) (19,867) (48,516)
9. 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.
The Company's shareholders are asked every five years to vote for the
continuation of the Company. An ordinary resolution to this effect was passed
by the shareholders at the annual general meeting held on 23 June 2020.
The Directors have considered the risks associated with global interest rates
that continue to remain at higher levels despite recent cuts and the continued
impact on the broader financial system, as well as the risks arising from the
wider ramifications of geopolitical conflicts, including cash flow
forecasting, a review of covenant compliance including the headroom above the
most restrictive covenants and an assessment of the liquidity of the
portfolio. They have concluded that they are able to meet their financial
obligations, including the repayment of the bank loan, as they fall due for a
period of at least twelve months from the date of issuance. 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.
10. Transaction with Henderson Diversified Income Trust plc (HDIV)
On 16 January 2024, the Company announced that it had acquired £72.1 million
of net assets from HDIV in consideration for the issue of 42,345,422 new
Ordinary shares as part of a recommended s110 Scheme under the Insolvency Act.
Net assets acquired £'000
Investments and accrued income 39,480
Cash 32,586
Net assets 72,066
Satisfied by the value of new ordinary shares issued 72,066
11. Related party transactions
The Company's current related parties are its Directors and Janus Henderson.
There have been no material transactions between the Company and its Directors
during the period and the only amounts paid to them were in respect of
expenses and remuneration, for which there were no outstanding amounts payable
at the period end.
In relation to the provision of services by Janus Henderson, other than fees
payable by the Company in the ordinary course of business and the provision of
marketing services, there have been no material transactions with Janus
Henderson affecting the financial position of the Company during the period
under review.
During the period the Company received £442,000 from Janus Henderson to cover
project costs paid or payable in relation to the transaction with HDIV.
12. Half Year Report
The half-year report is available at www.hendersonhighincome.com or in hard
copy from the Corporate Secretary by emailing itsecretariat@janushenderson.com
(mailto:itsecretariat@janushenderson.com) . An abbreviated version of this
half-year report, the 'Update', will be circulated to shareholders in
September 2024.
13. General information
a) Company Status
The Company is a UK domiciled investment trust company with registered number
02422514.
SEDOL/ISIN number: 0958057
London Stock Exchange (TIDM) code: HHI
Global Intermediary Identification Number (GIIN): JBA08I.99999.SL.826
Legal Entity Identifier (LEI): 213800OEXAGFSF7Y6G11
b) Directors, Corporate Secretary and Registered Office
The Directors of the Company are Jeremy Rigg (Chairman), Jonathan Silver
(Chairman of the Audit & Risk Committee), Zoe King (Senior Independent
Director), Richard Cranfield and Francesca Ecsery. The Corporate Secretary is
Janus Henderson Secretarial Services UK Limited. The registered office is 201
Bishopsgate, London EC2M 3AE.
c) 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.hendersonhighincome.com
For further information please contact:
David Smith Dan Howe
Fund Manager Head of Investment Trusts
Janus Henderson Investors Janus Henderson Investors
Telephone: 020 7818 4443 Telephone: 020 7818 4458
Harriet Hall
PR Director, Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 2919
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BIGDCIGDDGSL
Recent news on Henderson High Income Trust
See all newsBrief: Henderson High Income Trust Says Jeremy Rigg To Step Down As Chairman At AGM In 2027
Henderson HighIncome - Half-year Financial Report
Henderson HighIncome - Director/PDMR Shareholding
RCS - Henderson HighIncome - Kepler Trust Intelligence: New Research
Henderson HighIncome - Director/PDMR Shareholding