Henderson Opport Tst - Annual Financial Report
02/02/2023 12:14
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RNS Number : 7654O Henderson Opportunities Trust PLC 02 February 2023
JANUS HENDERSON FUND MANAGEMENT UK LIMITED
HENDERSON OPPORTUNITIES TRUST PLC
LEGAL ENTITY INDENTIFIER (LEI): 2138005D884NPGHFQS77
2 February 2023
HENDERSON OPPORTUNITIES TRUST PLC
Annual Financial Report for the year ended 31 October 2022
This announcement contains regulated information
Investment Objective
The Company aims to achieve capital growth in excess of the FTSE All-Share
Index from a portfolio of primarily UK investments.
PERFORMANCE HIGHLIGHTS
Total Return Performance to 31 October 2022
1 year 3 years 5 years 10 years
% % % %
NAV¹ -26.4 8.0 2.4 130.3
Share price² -24.7 18.0 7.6 161.9
Benchmark³ -2.8 7.1 12.7 83.2
Peer group NAV(4) -24.6 -2.2 -0.3 92.3
Year ended Year ended
31 October 31 October
2022 2021
NAV per share at year end(5) 1,173.7p 1,626.9p
Share price at year end 1,018.0p 1,382.5p
Total return per share(5) (424.7p) 607.5p
Net assets £92.7m £128.5m
Discount at year end(5, 6) 13.3% 15.0%
Ongoing charge (excluding performance fee)(5) 0.90% 0.87%
Ongoing charge (including performance fee) (5, 7) 0.90% 1.85%
Dividend for year(8) 34.0p 27.5p
1 Net Asset Value ("NAV") per ordinary share total return (including dividends
reinvested)
2 Share price total return (including dividends reinvested)
3 FTSE All-Share Index
4 AIC UK All Companies simple average
5 Alternative performance measure
6 Calculated based on the NAV per share and share price at year end
7 No performance fee was payable in the year ended 31 October 2022 (2021:
£1.2m)
8 This represents three interim dividends of 7.0p each and a proposed final
dividend of 13.0p which will be put to shareholders for approval at the Annual
General Meeting on 8 March 2023. See the Chaiman's statement for more
details. The dividend yield(5) for the year ended 31 October 2022 was 3.3%
(2021: 2.0%) based on the share price at the year end
Sources: Morningstar Direct, Janus Henderson, Refinitiv Datastream
A glossary of terms and alternative performance measures can be found in the
Annual Report
CHAIRMAN'S STATEMENT
Performance review
Against a backdrop of considerable uncertainty, caused in particular by
Russia's war in Ukraine and by a rapid acceleration in inflation, it was a
very difficult year for absolute and relative performance of this portfolio.
During periods of growing investor caution, it is often smaller companies that
fall quickest and most steeply. This year was no exception. While the FTSE
All-Share Index, the Company's benchmark index, fell a modest 2.8% (as seen in
the table below), the FTSE 250 Index of medium sized companies fell 20.5%, the
FTSE Small-Cap Index fell 18.6% and the AIM All-Share Index of the smallest
listed UK businesses fell 33.2%. The Company has always looked across the
whole of the UK market for the best return opportunities. This breadth of
investment universe has often led the Fund Managers to invest more than the
Company's benchmark in AIM where, in their view, some of the large companies
of tomorrow can be found. While this approach has driven good absolute and
relative performance over the long term (see 10 year figures below), the
portfolio has historically had years of sharp drawdown, driven by volatility
in smaller company share prices, on the route to good performance. It is the
Fund Managers' view (shared by the Board) that steep falls in UK smaller
company share prices have left valuations at attractive levels. Therefore,
despite the current uncertainty, it is these low valuation levels and the
belief that the companies held can grow over the long term that lead us to
think there is currently considerable opportunity for the patient investor.
Percentage change in 1 year 3 years 5 years 10 years
(%) (%) (%) (%)
NAV -26.4 8.0 2.4 130.3
Share price -24.7 18.0 7.6 161.9
Benchmark -2.8 7.1 12.7 83.2
Peer group NAV -24.6 -2.2 -0.3 92.3
Income review
While it was a challenging year in capital terms, we are pleased to report an
ongoing strong recovery in investment income. Revenue return per share rose
64% to 40.6p. This compares to 24.7p last year and is above the 29.9p achieved
in 2019 pre the pandemic. The 40.6p revenue return per share comfortably
covers the Company's full year dividend of 34.0p, allowing the Company to add
£523,000 to its revenue reserves.
Fees and expenses
The ongoing charge for the year was 0.90%. This is notably lower than 1.85%
the previous year, with the fall due to no performance fee being paid during
the year. As a reminder, no performance fee will be paid if either the share
price or net asset value is lower than their value at the preceding financial
year end. The Board continues to monitor fees and other costs closely.
Continuation vote
Following the three year cycle, prescribed under the Company's Articles of
Association ("Articles"), there will be a continuation vote at this year's
Annual General Meeting ("AGM") (please see AGM details below). The NAV total
return of the Company over the last three years has been 8.0%, while the FTSE
All-Share total return was 7.1% and the AIC UK All Companies sector returned
-2.2%. The dividend per share over the last three years has grown 30.8%,
equivalent to compound annual growth of 9.3%.
It is the Fund Manager's view (shared by the Board) that the valuations of the
stocks held within the portfolio are low, and that there is an attractive
return opportunity particularly within UK smaller companies. The Directors
recommend a vote in favour of continuation of the Company, and the Directors
and Fund Managers will be voting their shares accordingly. If shareholders
vote in favour, the next continuation vote will be in Spring 2026.
The discount level and share buybacks
During the year the Company's shares remained at a discount to net asset
value, with the discount ranging from 8.6% to 20.5% and finishing the year at
13.3%. While it is frustrating for the shares to be trading at a persistent
(albeit fluctuating) discount, weak sentiment towards UK equities (and in
particular smaller companies) led to the AIC UK All Companies sector finishing
the year at an average discount of 10.0%, and the AIC UK Smaller Companies
sector finishing at an average discount of 14.5%.
There was no share issuance and no shares were bought back during the
financial year. It remains the Board's position that were buybacks to be
considered, this would be with the aim of enhancing the NAV for existing
shareholders rather than seeking to maintain the discount at any specific
level. The Board and the Fund Managers believe that the discount situation
will improve once investor sentiment towards the UK equity market becomes more
positive.
Gearing
Gearing was roughly unchanged over the year, finishing at 13.9% of net assets
compared to 13.2% at the start of the year. Within this the Fund Managers were
modest net sellers, with purchasing activity over the year being low partially
as a result of the very limited Initial Public Offering ("IPO") activity in
the UK market. The gearing level remains approximately in line with the
Company's long-term average and reflects the fact that the Fund Managers
continue to find good value opportunities within the UK equity market, and in
particular within UK smaller companies, following the substantial
underperformance seen in this area recently.
Annual General Meeting
Our AGM will be held on Wednesday 8 March 2023 at 2.30pm at Janus Henderson
Investors' offices at 201 Bishopsgate, London EC2M 3AE. I hope as many
shareholders as possible will be able to attend to take the opportunity to
meet the Board and to hear a presentation from James Henderson. However, if
you are unable to attend in person, you can watch the Meeting live by visiting
www.janushenderson.com/trustslive (http://www.janushenderson.com/trustslive) .
Full details are set out in the Notice of Meeting which has been sent to
shareholders with this report and both are also available online at
www.hendersonopportunitiestrust.com
(http://www.hendersonopportunitiestrust.com) .
If shareholders would like to submit any questions in advance of the AGM, you
are welcome to send these to the Corporate Secretary at
itsecretariat@janushenderson.com (mailto:itsecretariat@janushenderson.com) .
Outlook
This portfolio should not be seen as a proxy for the UK economy. Within the
breadth of the Company's investment universe there are many companies that are
capable of growing substantially despite the wider backdrop. It is the Fund
Managers' view that a significant number of these growth opportunities can be
found in the smaller company area (and in particular on AIM), where current
investor caution has resulted in very attractive valuations. In our view, for
those like the Company who can invest flexibly across these opportunities and
who continue to pay close attention to individual company fundamentals and
dynamics, patience will be rewarded.
Wendy Colquhoun
Chairman
2 February 2023
FUND MANAGERS' REPORT
Investment backdrop
Russia's invasion of Ukraine has had a very considerable impact on the economy
and therefore on equities. It has put upward pressure on prices, most notably
energy. The upward move in oil and gas reverberates around the whole economy.
The consumer has less to spend, and manufacturers find their costs going up.
There is no escaping the havoc it causes. It should be understood that some
inflationary problems were already becoming apparent before Russia's invasion
of Ukraine. For example, the belated ending of quantitative easing and the
ending of lockdown restrictions saw a rise in supply chain problems. Some of
the problems were obvious and were therefore rapidly discounted. Others were a
surprise: for instance, towards the end of the period the Bank of England had
to step in and intervene as some in the pension fund industry had failed
correctly to model what would happen to their portfolios on a rapid rise in
bond yields. This led them to become forced sellers of UK Government bonds
until the Bank of England provided liquidity. By the end of the period some
calm had returned helped by a change of personnel at the Treasury.
Through all this economic noise many companies in the portfolio continued to
increase their profits and dividends. Evidence of this can be seen in the jump
in earnings of the portfolio. However, the share prices of companies seen as
sensitive to the economy fell sharply. Smaller companies are especially
vulnerable to a swing in investor sentiment. The fear is how long and deep the
recession will be and for this to be answered how far interest rates will rise
needs to be understood. In the meantime, companies with able management teams
and a robust business model have fallen to very low valuations and this
provides real opportunity to the patient investor.
Attribution
It was a very difficult year for managing a multi-cap fund relative to a
concentrated index made up of predominantly large companies. As can be seen in
the table below (Index total return column), larger companies in the FTSE 100
significantly outperformed smaller companies, with a difference in relative
returns of more than 20% between the FTSE 100 and small/ medium sized
companies (and more than 30% underperformance in the case of AIM stocks).
Percentage change in Company weighting Benchmark weighting Index total return
(%) (%) (%)
FTSE 100 27.9 83.3 1.7
FTSE 250 10.5 14.1 -20.5
FTSE Small-Cap 7.8 2.6 -18.6
FTSE AIM All-Share 52.6 n/a -33.2
Note portfolio and index weights are as at financial year end, 31 October
2022. The portfolio weights do not add up to 100% as a small portion of the
portfolio sits outside of major UK indices
The key reason for the size differential in performance this year was the
make-up of the FTSE 100 Index, with its significant weighting in natural
resources stocks that benefitted from rising commodity prices, as well as more
defensive sectors such as consumer staples, utilities and pharmaceuticals
(where there are significant economies of scale therefore these types of
defensive companies tend mostly to exist as very large companies). For this
portfolio, with its significant weighting in smaller companies and
particularly those on AIM, the size distribution of the portfolio was
therefore a significant headwind to performance. On our estimates, the size of
the companies held within the portfolio drove the majority of the Company's
underperformance relative to its benchmark this year.
Before looking in more detail at the stock-specific elements of performance,
it is also worth noting the effect of gearing on underperformance. On our
estimates gearing detracted 3.0% from NAV total return during the year and
therefore drove a notable, though minority, portion of the underperformance.
From a longer-term perspective gearing has been a positive contributor to
returns and we continue to see its use as one of the key advantages of the
investment trust structure.
Turning to stocks, it is notable that three of the top five performers came
from the natural resources sector as energy prices (and particularly natural
gas) prices rose. Outside of this, the best performers were companies with
stock-specific drivers of earnings growth. For example, ZOO Digital (see share
price table since first purchase below), which provides subtitling and dubbing
services to content producers such as Disney, grew sales and earnings
materially as the market for global content continues to grow. IQGeo also grew
sales substantially (both organically and via acquisitions) and this allowed
it to become EBITDA (earnings before interest, taxes, depreciation, and
amortisation) positive in the first half of this year.
Data illustrating the ZOO Digital share price since first purchase (pence)
chart in the Annual Report is set out below:
Date Share price in pence
17 July 2018 165.0
31 January 2019 85.5
31 July 2019 79.5
31 January 2020 72.5
31 July 2020 61.5
29 January 2021 97.0
30 July 2021 137.0
31 January 2022 145.0
29 July 2022 127.5
31 October 2022 165.0
Source: Bloomberg. Share price shown since first purchase on 16 July 2018.
The top 10 contributors to relative return during the financial year were:
Company name Contribution to relative return (%) Share price total return (%) Portfolio Classification
Serica Energy 1.9 54.8 Natural resources
Jersey Oil & Gas 1.5 101.0 Natural resources
ZOO Digital 0.6 30.4 Growth small cap
Deltic Energy 0.4 36.0 Natural resources
Scottish Mortgage Investment Trust (not held) 0.4 -51.3 n/a
IQGeo 0.4 26.2 Growth small cap
NatWest 0.3 10.9 Large cap
Ashtead Group (not held) 0.3 -24.7 n/a
Ocado Group (not held) 0.3 -73.8 n/a
Flutter Entertainment* 0.3 -16.1 Large cap
*Positive contribution relates to timing of purchases, with shares
underperforming for the financial year as a whole
The top 10 detractors from relative return during the financial year were:
Company name Contribution to relative return (%) Share price total return (%) Portfolio Classification
Shell (underweight) -1.7 48.2 Natural resources
Ceres Power -1.4 -73.7 Early stage
AFC Energy -1.2 -64.6 Early stage
Springfield Properties -1.2 -34.1 Small & mid cap compounders
Studio Retail -1.2 -100.0 Small & mid cap compounders
SigmaRoc -1.1 -50.6 Small & mid cap compounders
BP (not held) -1.1 43.2 n/a
British American Tobacco (not held) -1.0 44.4 n/a
Mirriad Advertising -1.0 -83.4 Early stage
RWS Holdings -1.0 -49.4 Small & mid cap compounders
In contrast to natural resources, a number of the largest underperformers were
in the alternative energy area such as fuel cell companies Ceres Power and AFC
Energy. Neither company has had material operational disappointments (Ceres
has had some licence fee revenue from a joint venture deferred to early 2023
rather than late 2022, but this is a timing issue rather than a permanent loss
of sales). The reason for the share price falls this year has been (in our
view) related to a broader reduction in risk appetite in the market at the
same time as a rise in interest rates is shifting investor focus towards
companies producing cash today rather than those potentially capable of
producing sizeable amounts of cash in the future. The alternative energy
sector (which sits within the Company's 'early stage' allocation) is now a
less than 2% aggregate weight in the portfolio. We believe that there will,
for example, be a role for hydrogen to play in the energy transition in 'hard
to electrify' areas such as heavy transportation. We therefore continue to
think it is right to have a foothold in the area with companies that have the
potential to become market leaders across different sectors (for example AFC
Energy could become one of the market leaders in a fuel cell replacement for
diesel generators).
Outside of alternative energy, the underperformers during the year tended to
be cyclically exposed companies such as Scottish housebuilder Springfield
Properties and European building materials company SigmaRoc. In both cases we
think the businesses have good scope to grow sales and earnings over the
medium term driven by, in Springfield's case, a sizeable landbank to work
through and in SigmaRoc's case rising infrastructure spend (as well as the
potential for further acquisitions). In the short term, however, the share
prices of both have fallen materially on concerns of an economic slowdown
impacting demand for their products.
Portfolio review
For a number of years, we have divided the portfolio into the classifications
in the table below. This serves a dual purpose. Firstly, the guidance ranges
around the percentage of the portfolio held in each classification help to
ensure diversity, with different classifications expected to perform well in
different economic backdrops. Secondly, we have found the classifications help
our shareholders to understand the broad nature of the portfolio, with very
different fundamental drivers depending on which classification the companies
are in.
At the beginning of this financial year, we decided to go a step further and
split the portfolio into two broader classifications of 'tomorrow's leaders'
and 'stabilisers', which are split out in the table below. Tomorrow's leaders
are companies which, in our view, have the capacity to grow sales and earnings
materially over the long term. These companies exist across all stages of the
company lifecycle, spanning from early-stage businesses operating in nascent
but structurally growing end markets to companies which have existed for a
long time but which we think have the potential to recover (whether through
their own 'self-help' or an end market recovery). Stabilisers, on the other
hand, span large companies and natural resource businesses. These are held
with the aim of smoothing volatility in the overall portfolio (as well as
generating an attractive total return), as we recognise that smaller
companies, while on average good performers over the long term, go through
periods of large drawdowns as we have seen this financial year. The
stabilisers therefore provide exposure to different end markets, whether it is
more defensive exposure as is often the case with larger companies or
commodity-price exposure with the natural resource companies. The current
split of the portfolio across classifications is shown below:
Total Indicative range % Largest three holdings
(gross assets)(1) %
Stabilisers
Large cap (£1b +) 24 (+3) 10-30 Barclays, NatWest,
These stocks are usually familiar to all investors. They are ballast for the
portfolio and often generators of income as individual companies. We believe HSBC
they remain capable of long-term earnings growth.
Natural resources 17 (+6) 5-15 Jersey Oil & Gas,
These are companies that will benefit from rising commodity prices. The
majority of this classification are smaller companies (outside of the FTSE Serica Energy,
100) that are less well understood and where, in our view, we can add more
value by paying close attention. Anglo American
Tomorrow's Leaders
Growth small cap 17 (-3) 20-40 ZOO Digital,
These are companies that in our view can be substantially larger businesses in
time. They have strong management capability and they Next Fifteen
operate in fast growing end markets or are disruptors within more established Communications,
markets.
Boku
Recovery 10 (-1) 0-30 Redcentric, STV,
Some of these companies, for example those exposed to the aerospace industry,
have fallen into the recovery classification as a result of the pandemic. Babcock
However, as the global economy recovers, earnings should be able to grow from
current suppressed levels.
Early stage companies 7 (-6) 0-20 Surface Transforms,
These are companies that could serve large end markets with potentially
disruptive technologies, however they are at an early stage of their life Ilika, AFC Energy
cycle and whether the technology becomes fully commercialised remains, to a
degree, binary. They should perform largely independently of the broader
economic cycle.
Small & mid cap compounders 25 (+1) 20-40 Springfield
These are good quality, long-term holdings with experienced management teams.
Over time we expect them to steadily grow sales and earnings. Properties,
Vertu Motors,
Van Elle
( )
(1) The number in brackets is the change in percentage compared to the
previous financial year end
This financial year, the stabilisers substantially outperformed tomorrow's
leaders. While the position in stabilisers provided some cushion to the
Company's performance relative to, for example, the FTSE AIM All-Share Index,
this exposure was not enough to offset the Company's significantly larger than
benchmark holding in smaller companies (which tend to fall within tomorrow's
leaders from the Company's portfolio perspective).
During the previous financial year, we added to the holdings in stabilisers,
which consisted largely of adding to holdings in large banks such as Barclays
as well as a number of natural resource companies such as Jersey Oil & Gas
(these are described in more detail on page 7 of last year's annual report).
While these additions were helpful for relative performance in the current
financial year, in hindsight (as is often the case) we should have gone
further in this portfolio rotation. This financial year, given the scale of
performance difference between the two broader classifications, additions have
largely been focused in the opposite direction (in other words adding to
tomorrow's leaders) given the scale of de-rating we have seen in this area. We
go into more detail on this in the section below.
Portfolio activity
During the year we were modest net sellers, purchasing £15.8m in aggregate
and selling £20.6m. As a result of the fall in the Company's net asset value,
this kept gearing approximately flat during the year, ending at 13.9% net
assets relative to 13.2% at the previous year end. Purchasing activity was
modest relative to the previous year (when we purchased £35.5m). This was
partly a result of very subdued IPO activity in the UK, with the Company
participating in only one IPO during the year in domestic appliance retailer
Marks Electrical.
Unusually for this portfolio, which has a low average turnover, the largest
new purchase for the year was also among the largest sales. Shell was
purchased in December 2021 at approximately £17 per share and sold between
March and September 2022 at between £19 and £22 per share. The purchase was
driven by a combination of attractive cash generation and thinking the Shell
integrated portfolio looked well placed during the period of energy
transition. While both of these attributes still exist, the scale of the
de-rating seen elsewhere in the UK equity market means that (in our view)
there are better opportunities available. We also trimmed the natural
resources exposure elsewhere, with Serica Energy being the largest individual
sale during the year (despite this it remained a top five holding at the year
end). As can be seen in the attribution tables set out earlier in this report,
while Shell was a good performer in absolute terms for the portfolio, from a
relative perspective it was the single largest detractor. This is because
Shell forms such a significant weight in the FTSE All-Share Index, averaging
6.6% during the financial year and serves to highlight the challenge in
managing a broad multi-cap fund relative to a concentrated benchmark.
Outside of Shell and Marks Electrical, the other new positions established
during the year were Finsbury Food, Flutter Entertainment, Haleon (which was
inherited from the holding in GlaxoSmithKline), Halfords, i3 Energy, Reckitt
Benckiser and Renold. There were also sizable additions to existing positions
such as Morgan Advanced Materials and Springfield Properties. Of these, all
but two of the active additions were outside of larger companies (the
exceptions being Flutter Entertainment and Reckitt Benckiser), as we sought to
take advantage of the sharp underperformance and subsequent de-rating in the
smaller company area. While these additions have no common attributes in terms
of their end markets (they span areas as broad as food production,
housebuilding, retailing and industrial components), what they share is having
a degree of 'self help' that can help to offset often challenging end markets
and a path to becoming substantially larger businesses in time.
Including Shell, six positions were sold in full during the year (the other
five being Blue Prism, Franchise Brands, Sensyne Health, Lloyds Banking and
Quixant). Of these the largest individual sale was Blue Prism which was sold
following a bid approach from US peer SS&C. We also took profits in some
long held smaller company positions such as transportation software provider
Tracsis and utilities/telecommunications software provider IQGeo. In both
cases we continue to see a visible pathway to future sales and earnings growth
but they had performed strongly so were reduced for portfolio balance reasons.
Income
This financial year saw a marked recovery in investment income, with earnings
per share rising to 40.6p compared to 24.7p last year (and 29.9p in the 2019
financial year to provide a pre-pandemic context). This rise in investment
income was helped by material special dividends received during the year, the
largest of which was NatWest as it chose to distribute a portion of its excess
capital. Excluding special dividends, the earnings per share figure was 37.1p.
Stock lending also continued to be a good contributor to income, providing
£197,000 income (net of fees) during the year (which compares to £267,000
last year).
Outlook
There are about a thousand companies quoted on the main list and AIM that we
could invest in. Some of them over the next few years will become
substantially larger regardless of the economic backdrop. The successes will
come from many different areas of activity. They will have two things in
common - dynamic management and strong business propositions. They will seize
the opportunities that come along as well as having long-term strategies.
There will also be many corporate failures. The current low valuation of the
average company suggests the balance of probabilities is very much in the
investors' favour as the corporate successes have current share prices that do
not price in the prize of success. This is because despondency is high among
investors with general concerns about the economy colouring appraisal of
individual companies. The portfolio is a mixture of individual companies all
with real growth potential. We need to pay attention to the individual
companies and what they are achieving. We will keep with the approach of
investing in UK companies of all sizes. We will buy companies when the
valuation does not reflect their potential and recycle into the emerging
success stories by selling those that have a valuation that appears to reflect
the prospects.
James Henderson and Laura Foll
Fund Managers
2 February 2023
MANAGING OUR RISKS
The Board, with the assistance of the Manager, has carried out a robust
assessment of the principal risks and uncertainties facing the Company,
including those that would threaten its business model, future performance,
solvency, liquidity and reputation. The principal risks and uncertainties
facing the Company relate to investing in the shares of companies that are
listed in the United Kingdom, including small companies. Although the Company
invests almost entirely in securities that are listed on recognised markets,
share prices may move rapidly, whether upwards or downwards, and it may not be
possible to realise an investment at the Manager's assessment of its value.
Falls in the value of the Company's investments can be caused by unexpected
external events. The companies in which investments are made may operate
unsuccessfully, or fail entirely, such that shareholder value is lost. The
Company is also exposed to the operational risk that one or more of its
contractors or sub-contractors may not provide the required level of service.
The Board considers regularly the principal risks facing the Company in order
to mitigate them as far as practicable. The Board monitors the Manager, its
other service providers and the internal and external environments in which
the Company operates to identify new and emerging risks. The Board's policy on
risk management has not materially changed from last year.
The Board has drawn up a risk map which identifies the substantial risks to
which the Company is exposed. The Board has also put in place a schedule of
investment limits and restrictions, appropriate to the Company's Investment
Objective and Investment Policy. These principal risks fall broadly under the
following categories:
Risk Trend Controls and mitigation
Investment activity and strategy ↑ The Manager provides the Directors with management information including
performance data reports and portfolio analyses on a monthly basis. The Board
An inappropriate investment strategy (for monitors the implementation and results of the investment process with the
Fund Managers, who attend all Board meetings, and reviews regularly data that
example, in terms of asset allocation, stock selection, failure to anticipate monitors risk factors in respect of the portfolio. The Manager operates in
external shocks or the level of gearing) may lead to a reduction in NAV, accordance with investment limits and restrictions determined by the Board;
underperformance against the Company's benchmark and the Company's peer group; these include limits on the extent to which borrowings may be used. The Board
it may also result in the Company's shares trading on a wider discount to NAV. reviews its investment limits and restrictions regularly and the Manager
confirms its compliance with them each month. The Board reviews investment
strategy at each
Board meeting.
The Board seeks to manage these risks by ensuring a diversification of
investments. The Board has regular meetings with the Fund Managers to review
performance and the extent of borrowings.
Financial instruments and the ↔ An analysis of these financial risks, including liquidity and gearing, and the
Company's policies for managing them are set out in the Annual Report.
management of risk
By its nature as an investment trust, the Company is exposed in varying
degrees to market risk, interest rate risk, liquidity risk, currency risk and
credit and counterparty risk. Market risk arises from uncertainty about the
future prices of the Company's investments.
Operational and cyber ↔ The Manager has contracted some of its operational functions, principally
those relating to trade processing, investment administration, accounting and
Disruption to, or failure of, the Manager's accounting, dealing or payment cash management, to BNP Paribas.
systems or the Custodian or the Depositary'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
services providers may not provide the required level of service. The Company The Board monitors the services provided by the Manager and its other
may also be exposed to the risk of cyber-attack on its service providers. suppliers and receives reports on the key elements in place to provide
effective internal control. During the year the Board received reports on the
Manager's approach to information security and cyber attack defence.
Accounting, legal and regulatory ↔ The Manager is contracted to provide investment, company secretarial,
administration and accounting services through qualified professionals. The
A breach of Section 1158/9 of the Corporation Tax Act 2010 could lead to a Board receives internal controls reports produced by Janus Henderson on a
loss of investment trust status, resulting in capital gains realised within quarterly basis, which confirm regulatory compliance.
the portfolio being subject to corporation tax. A breach of the FCA's 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.
Failure of Janus Henderson ↔ The Board meets regularly with representatives of the Manager's Investment
Management, Risk, Compliance, Internal Audit and Investment Trust teams and
A failure of the Manager's business, whether or not as a result of regulatory reviews internal control reports from the Manager on a quarterly basis. The
failure, cyber risk or other failure could result in the Manager being unable failure of the Manager would not necessarily lead to a loss of the Company's
to meet its obligations and its duty of care to the Company. assets, however, this risk is mitigated by the Company's ability to change its
investment manager if necessary, subject to the terms of its management
agreement.
Details of how the Board monitors the services provided by Janus Henderson and
its other suppliers, and the key elements designed to provide effective
internal control, are explained further in the internal controls section of
the Corporate Governance report and the Audit and Risk Committee report in
the Annual Report.
Emerging risks
In addition to the principal risks facing the Company, the Board also
regularly considers potential emerging risks, which are defined as potential
trends, sudden events or changing risks which are characterised by a high
degree of uncertainty in terms of the probability of them happening and the
possible effects on the Company. Should an emerging risk become sufficiently
clear, it may be moved to a significant risk.
The Board has identified the following as potential emerging risks:
Demographic change
Ageing population, increasing financial inequality and new trends in social
attitudes.
Technological change
Artificial intelligence, sector disruption, changes to existing job roles,
ethical oversight of technological change, autonomous vehicles,
electrification and healthcare impact.
Environmental sustainability
Climate change, decarbonisation, extreme bad weather events, increasing
legislation/political action, resource scarcity and reputational consequences.
Political change
Tax risk (including impact on dividends paid by the Company to shareholders)
and impact on performance if the UK were to remain out of favour.
The Company's emerging risks are macro-economic and political in nature and
over which the Company has no control. The Board monitors these emerging risks
and, if specific action relating to the investments, or the Company's
marketing approach were to arise, the Board would take appropriate action.
BORROWINGS
The Company has an unsecured loan facility in place which allows it to borrow
as and when appropriate. £30m (2021: £30m) is available under the facility.
Net gearing is limited by the Board to 25% of net assets. The maximum amount
drawn down in the period under review was £21.4m (2021: £19.8m), with
borrowing costs for the year totalling £345,000 (2021: £150,000). £14.1m
(2021: £18.4m) of the facility was in use at the year end. Net gearing at 31
October 2022 was 13.9% (2021: 13.2%) of net asset value.
VIABILITY STATEMENT AND GOING CONCERN
The Company is a long-term investor. The Board believes it is appropriate to
assess the Company's viability over a five year period in recognition of its
long-term investment horizon and what the Board believes to be investors'
investment horizons, taking account of the Company's current position and the
potential impact of the principal risks and uncertainties as documented in the
Strategic Report in the Annual Report.
The assessment considered the impact and likelihood of the principal risks and
uncertainties facing the Company. Key areas of focus were investment strategy
and performance against benchmark, including a consideration of the risks
around asset allocation, stock selection and gearing. Market risk was also
assessed in terms of the impact of severe but plausible scenarios and the
effectiveness of the mitigating controls in place.
The Directors took into account the liquidity of the portfolio and the
borrowings in place when considering the viability of the Company over the
next five years and its ability to meet liabilities as they fall due. This
included consideration of the duration of the Company's borrowing facilities,
consideration of the impact of rising interest rates and how a breach of any
covenants could impact the Company's net asset value and share price.
The Directors do not expect there to be any significant change to the
principal risks and adequacy of the mitigating controls in place. Large cap
stocks are held as ballast for the portfolio and for liquidity, and the
percentage of the portfolio holding of these stocks generally exceeds the
gearing percentage. The Board actively monitors investment performance and
even with the significant falls in the NAV at the height of the COVID-19
pandemic (which exceeded 25% in March 2020), liquidity requirements and
covenant restrictions were all met. Other recent factors, for example Brexit
and the heightened macroeconomic uncertainty following Russia's invasion of
Ukraine, have not materially affected the long-term viability of the Company.
The Board is therefore confident that significant market collapses would not
impact the Company's viability. 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 majority of the Company's assets
are liquid, its commitments are limited and the Company intends to continue to
operate as an investment trust. In coming to this conclusion, the Board has
considered the residual impact of COVID-19, Russia's ongoing invasion of
Ukraine and the rise in interest rates. Indications are that income has
recovered to historic income levels. The Board does not believe that the
factors aforementioned will have a long-term impact on the viability of the
Company and its ability to continue in operation, notwithstanding the
short-term uncertainty they have caused in the markets.
The Directors recognise that there is a continuation vote that is due to take
place at the AGM in March 2023. In the light of the above consideration of the
Company's viability and going concern and as no shareholders have indicated
that they will not support the continuation vote, the Directors currently
believe that the Company will continue to exist for the foreseeable future,
and at least for the period of assessment.
Based on this assessment, the Board has a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they
fall due over the next five year period.
The Directors consider it appropriate to adopt the going concern basis of
accounting in preparing the Financial Statements (see the Annual Report for
further details).
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were with its
Directors and the Manager. There have been no material transactions between
the Company and its Directors during the year and the only amounts paid to
them were in respect of expenses and remuneration for which there were no
outstanding amounts payable at the year end. Directors' shareholdings are
disclosed in the Annual Report.
In relation to the provision of services by the Manager, other than fees
payable by the Company in the ordinary course of business and the 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 year under review. More details on transactions with the Manager,
including amounts outstanding at the year end, are given in the Notes to the
Financial Statements in the Annual Report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
In accordance with Disclosure Guidance and Transparency Rule 4.1.12, each of
the Directors, who are listed in note 13, confirms that, to the best of his or
her knowledge:
• the Company's Financial Statements, which have been prepared in accordance
with UK Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and loss of the Company; and
• the Annual 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.
On behalf of the Board
Wendy Colquhoun
Chairman
2 February 2023
Twenty largest holdings at 31 October 2022
The stocks in the portfolio are a diverse mix of businesses operating in a
wide range of end markets.
Ranking % of Approximate market capitalisation Valuation Purchases Sales Appreciation/ Valuation
2022 (2021) portfolio 2021 £'000 £'000 (depreciation) 2022
Company £'000 £'000 £'000
1 (1) Barclays 3.4 £23.4b 4,955 - - (1,335) 3,620
2 * Jersey Oil & Gas¹ 3.3 £95.2m 1,762 - (102) 1,817 3,477
3 (2) Serica Energy¹ 3.3 £818.4m 4,635 - (3,444) 2,253 3,444
4 (17) ZOO Digital¹ 2.9 £146.5m 2,388 - - 706 3,094
5 (3) Springfield Properties¹ 2.9 £110.8m 4,226 678 - (1,814) 3,090
6 (4) Next Fifteen Communications¹ 2.9 £864.1m 3,981 205 - (1,113) 3,073
7 (6) NatWest 2.7 £22.7b 3,538 - (699) (4) 2,835
8 (11) HSBC 2.7 £89.3b 2,784 - - 37 2,821
9 (7) Boku¹ 2.5 £390.6m 3,490 - - (845) 2,645
10 (13) Anglo American 2.4 £32.0b 2,713 - - (170) 2,543
11 (5) Vertu Motors¹ 2.4 £159.3m 3,968 - (690) (773) 2,505
12 (20) Rio Tinto 2.2 £74.9b 2,280 - - (11) 2,269
13 (8) Tracsis¹ 2.1 £255.6m 3,413 - (1,095) (108) 2,210
14 * Standard Chartered 1.9 £15.1b 1,905 - - 98 2,003
15 * Deltic Energy¹ 1.8 £61.6m 1,427 - - 516 1,943
16 (18) IQGeo¹ 1.7 £102.9m 2,347 - (995) 449 1,801
17 (19) Surface Transforms¹ 1.6 £102.1m 2,330 - - (643) 1,687
18 * Direct Line Insurance 1.5 £2.6b 1,754 457 - (597) 1,614
19 * K3 Capital¹ 1.5 £204.0m 1,597 291 - (322) 1,566
20 * Van Elle¹ 1.4 £40.5m 1,987 - - (465) 1,522
At 31 October 2022 these investments totalled £49,762,000 or 47.1% of the
portfolio.
* Not in the top 20 largest investments last year
(1) Quoted on AIM
( )
Portfolio by sector
As a percentage of the investment portfolio excluding cash
31 October 2022 31 October 2021
% %
Basic Materials 6.7 5.4
Consumer Discretionary 17.1 17.3
Consumer Staples 3.1 1.0
Energy 13.1 11.5
Financials 20.6 21.1
Health Care 3.4 4.1
Industrials 21.1 22.1
Real Estate 0.9 1.0
Technology 11.7 13.7
Telecommunications 2.3 1.8
Utilities 0.0 1.0
100.0 100.0
Portfolio by index
As a percentage of the investment portfolio excluding cash
31 October 2022 31 October 2021
% %
FTSE 100 27.9 21.8
FTSE 250 10.5 11.1
FTSE SmallCap 7.8 6.7
FTSE AIM 52.6 55.5
Other(1) 1.2 4.9
100.0 100.0
( )
(1)Other also includes AIM investments outside the FTSE AIM Index and shares
listed on the main market which are not included in the FTSE All-Share Index
Market capitalisation of the portfolio at 31 October 2022
Portfolio Weight Benchmark Weight
% %
Greater than £2b 31.4 88.9
£1b - £2b 3.5 5.3
£500m - £1b 13.6 3.3
£200m - £500m 15.8 2.1
£100m - £200m 16.4 0.4
£50m - £100m 11.0 0.0
Less than £50m 7.8 0.0
Other 0.5 0.0
100.0 100.0
A glossary of terms can be found in the Annual Report
Sources: Morningstar Direct, Janus Henderson, Refinitiv Datastream
AUDITED INCOME STATEMENT
Year ended 31 October 2022 Year ended 31 October 2021
Notes Revenue Capital Revenue Capital
return return Total return return Total
£'000 £'000 return £'000 £'000 return
£'000 £'000
2 (Losses)/gains on investments held at fair value through profit or loss - (36,112) (36,112) - 47,667 47,667
Gain on foreign exchange - - - - 1 1
3 Income from investments held at fair value through profit or loss 3,715 - 3,715 2,317 108 2,425
4 Other interest receivable and other income 205 - 205 268 - 268
--------- ---------- ---------- --------- ---------- ----------
Gross revenue and capital gains/(losses) 3,920 (36,112) (32,192) 2,585 47,776 50,361
5 Management and performance fees (173) (404) (577) (203) (1,642) (1,845)
Other administrative expenses (433) - (433) (379) - (379)
--------- ---------- ---------- --------- ---------- ----------
Net return/(loss) before finance costs and taxation 3,314 (36,516) (33,202) 2,003 46,134 48,137
(104) (241) (345) (45) (105) (150)
Finance costs
----------- ---------- ---------- ----------- ---------- ----------
Net return/(loss) before taxation 3,210 (36,757) (33,547) 1,958 46,029 47,987
(1) - (1) (4) - (4)
Taxation
----------- ---------- ---------- ----------- ---------- ----------
Net return/(loss) after taxation 3,209 (36,757) (33,548) 1,954 46,029 47,983
====== ====== ====== ====== ====== ======
6 Net return/(loss) per ordinary share -
basic and diluted 40.63p (465.37p) (424.74p) 24.74p 582.77p 607.51p
====== ======= ====== ====== ======= ======
The total columns of this statement represent the Profit and Loss Account of
the Company. 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.
AUDITED STATEMENT OF CHANGES IN EQUITY
Year ended 31 October 2022 Called up Share Capital Other Total shareholders' funds
share premium redemption capital Revenue £'000
capital account reserve reserves reserve
£'000 £'000 £'000 £'000 £'000
At 1 November 2021 2,000 14,838 2,431 107,496 1,732 128,497
Ordinary dividends paid - - - - (2,251) (2,251)
Refund of unclaimed dividends over 12 years old - - - - 3 3
Net (loss)/return after taxation - - - (36,757) 3,209 (33,548)
-------- ---------- ---------- ---------- ----------- ---------
At 31 October 2022 2,000 14,838 2,431 70,739 2,693 92,701
===== ====== ====== ====== ====== =====
Called up Share Capital Other Revenue Total shareholders' funds
Year ended 31 October 2021 share premium redemption capital reserve £'000
capital account reserve reserves £'000
£'000 £'000 £'000 £'000
At 1 November 2020 2,000 14,838 2,431 61,467 1,907 82,643
Ordinary dividends paid - - - - (2,131) (2,131)
Refund of unclaimed dividends over 12 years old - - - - 2 2
Net return after taxation - - - 46,029 1,954 47,983
-------- ---------- ---------- ---------- ----------- ---------
At 31 October 2021 2,000 14,838 2,431 107,496 1,732 128,497
===== ====== ====== ====== ====== =====
AUDITED STATEMENT OF FINANCIAL POSITION
31 October 2022 31 October 2021
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss
Listed at market value 50,786 65,075
Quoted on AIM at market value 54,392 81,536
Unlisted at market value 517 493
------------ ------------
105,695 147,104
------------ ------------
Current assets
Investment held at fair value through profit or loss 2 2
Debtors 216 90
Cash at bank and in hand 1,219 1,360
------------ ------------
1,437 1,452
Creditors: amounts falling due within one year (14,431) (20,059)
----------- -----------
Net current liabilities (12,994) (18,607)
----------- -----------
Total assets less current liabilities 92,701 128,497
----------- -----------
Net assets 92,701 128,497
======= =======
Capital and reserves
Called up share capital 2,000 2,000
Share premium account 14,838 14,838
Capital redemption reserve 2,431 2,431
Other capital reserves 70,739 107,496
Revenue reserve 2,693 1,732
------------ ------------
Total shareholders' funds 92,701 128,497
======= =======
Net asset value per ordinary share - basic and diluted 1,173.7p 1,626.9p
======= =======
AUDITED STATEMENT OF CASH FLOWS
Year ended Year ended
31 October 31 October
2022 2021
£'000 £'000
Cash flows from operating activities
Net (loss)/return before taxation (33,547) 47,987
Add: finance costs 345 150
Add/(less): losses/(gains) on investments held at fair value through profit or 36,112 (47,667)
loss
Add: gains on foreign exchange - 1
Increase in other debtors (127) (28)
(Decrease)/increase in creditors (1,361) 1,295
---------- ----------
Net cash inflow from operating activities 1,422 1,738
---------- ----------
Cash flows from investing activities
Purchase of investments (15,811) (36,086)
Sale of investments 20,625 30,812
Proceeds from capital dividends 483 -
------------ ------------
Net cash inflow/(outflow) from investing activities 5,297 (5,274)
------------ ------------
Cash flows from financing activities
Equity dividends paid (2,248) (2,129)
Net loans (repaid)/drawn down (4,261) 4,263
Interest paid (351) (120)
----------- -----------
Net cash (outflow)/inflow from financing activities (6,860) 2,014
----------- -----------
Net decrease in cash and cash equivalents (141) (1,522)
Cash and cash equivalents at start of year 1,360 2,882
---------- ----------
Cash and cash equivalents at end of year 1,219 1,360
====== ======
Comprising:
Cash at bank 1,219 1,360
====== ======
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
(a) Basis of accounting
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 201 Bishopsgate, London EC2M 3AE.
The Financial Statements have been prepared in accordance with the Companies
Act 2006, FRS 102 - The Financial Reporting Standard applicable in the UK and
Republic of Ireland and with the Statement of Recommended Practice: Financial
Statements of Investment Trust Companies and Venture Capital Trusts (the
"SORP") issued in April 2021.
The principal accounting policies applied in the presentation of these
Financial Statements are set out in the Annual Report. These policies have
been consistently applied to all the years presented.
The Financial Statements have been prepared under the historical cost basis
except for the measurement of fair value of investments. In applying FRS 102,
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.
(b) Going concern
The Company's Articles of Association require that at the AGM of the Company
held in 2008, and every third year thereafter, an ordinary resolution be put
to approve the continuation of the Company. The resolution put to the AGM in
2020 was duly passed. The next triennial continuation resolution will be put
to the AGM in 2023. In the light of the Directors' consideration of the
Company's viability and going concern and as no shareholders have indicated
that they will not support the continuation vote, the Directors believe that
the Company will continue to exist for the foreseeable future. The assets of
the Company consist almost entirely of securities that are listed (or quoted
on AIM) and are readily realisable. The net current liabilities are primarily
due to borrowings under the loan facility, and the Company's portfolio is
sufficiently liquid to meet the net current liabilities in the unlikely event
that the loan needed to be fully repaid. The Board has considered the
portfolio's liquidity and covenant compliance in event of significant and
prolonged market falls. The securities lending programme entered into by the
Company is supported by indemnification and therefore does not impact the
liquidity of the portfolio or the Company's going concern. 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 and the principal
risks, as well as considering the residual impact of COVID-19, Russia's
ongoing invasion of Ukraine and the rise in interest rates, the Directors
considered it appropriate to adopt the going concern basis of accounting in
preparing the financial statements.
2. (Losses)/gains on investments held at fair value through profit or loss 2022 2021
£'000 £'000
Gains on the sale of investments based on historical cost 8,286 11,553
Revaluation losses recognised in previous years (6,736) (1,075)
---------- ----------
Gains on investments sold in the year based on carrying value at previous 1,550 10,478
Statement of Financial Position date
Revaluation (losses)/gains on investments held at 31 October (37,662) 37,189
---------- ----------
(36,112) 47,667
====== ======
Included within (losses)/gains on investments are special capital dividends of
£483,000 (2021: £149,000). These are accounted for in accordance with
accounting policy 1f) (see Annual Report for more detail)
3. Income from investments held at fair value through profit or loss 2022 2021
£'000 £'000
UK:
Dividends from listed investments 2,668 1,737
Dividends from AIM investments 979 518
------- -------
3,647 2,255
------- -------
Non-UK:
Dividends from listed investments 68 62
------- -------
68 62
------- -------
3,715 2,317
==== ====
4. Other interest receivable and other income 2022 2021
£'000 £'000
Deposit interest 7 -
Stock lending commission 197 267
Underwriting commission (allocated to revenue) 1 1
------- -------
205 268
==== ====
At 31 October 2022, the total value of securities on loan by the Company for
stock lending purposes was £9,691,000 (2021: £14,011,000). The maximum
aggregate value of securities on loan at any one time during the year ended 31
October 2022 was £17,350,000 (2021: £27,450,000). The Company's agent holds
collateral at 31 October 2022 with the value of £10,203,000 (2021:
£14,789,000) in respect of securities on loan, the value of which is reviewed
on a daily basis and comprises CREST Delivery By Value ("DBVs") and Government
Bonds with a market value of 105% (2021: 106%) of the market value of any
securities on loan.
During the year the Company was not required to take up shares in respect of
underwriting commission; no commission was taken to capital (2021: same).
5. Management and performance fees
2022 2021
Revenue Capital Total Revenue Capital Total
return return return return return return
£'000 £'000 £'000 £'000 £'000 £'000
Management fee 173 404 577 203 474 677
Performance fee - - - - 1,168 1,168
-------- --------- --------- -------- --------- ---------
173 404 577 203 1,642 1,845
===== ===== ===== ===== ===== =====
The basis on which the management fee is calculated is set out in the
Strategic Report contained in the Annual Report. The performance fee is
accrued as a liability throughout the year whenever the criteria for a
performance fee to be payable are met. The performance fee crystallises and
becomes payable at the Company's year end. The allocation between revenue
return and capital return is explained in the Notes to the Financial
Statements within the Annual Report.
6. Net (loss)/return per ordinary share - basic and diluted
The total loss per ordinary share is based on the total loss attributable to
the ordinary shares of £33,548,000 (2021: total return of £47,983,000) and
on 7,898,375 ordinary shares (2021: 7,898,375) being the weighted average
number of shares in issue during the year.
The (loss)/return per ordinary share can be further analysed as follows:
2022 2021
£'000 £'000
Revenue return 3,209 1,954
Capital (loss)/return (36,757) 46,029
----------- -----------
Total (loss)/return (33,548) 47,983
====== ======
7,898,375 7,898,375
Weighted average number of ordinary shares
====== ======
2022 2021
Revenue return per ordinary share 40.63p 24.74p
Capital (loss)/return per ordinary share (465.37p) 582.77p
----------- -----------
Total (loss)/return per ordinary share - basic and diluted (424.74p) 607.51p
====== ======
7. Net asset value per ordinary share - basic and diluted
The net asset value per ordinary share at the year end was 1,173.7p (2021:
1,626.9p). The net asset value per ordinary share is based on the net assets
attributable to the ordinary shares of £92,701,000 (2021: £128,497,000) and
on the 7,898,375 ordinary shares in issue at 31 October 2022 (2021:
7,898,375). There are no dilutive securities so the basic and diluted net
asset value per ordinary share are the same.
The movements during the year of the assets attributable to the ordinary
shares were as follows:
2022 2021
£'000 £'000
Total net assets at 1 November 128,497 82,643
Total net (loss)/return (33,548) 47,983
Dividends paid in the year (2,248) (2,129)
----------- -----------
Total net assets at 31 October 92,701 128,497
====== ======
8. Called up share capital 2022 2021
£'000 £'000
Allotted and issued ordinary shares of 25p each 7,898,375
(2021: 7,898,375) 1,974 1,974
Ordinary shares of 25p each held in treasury 102,483 (2021: 102,483) 26 26
---------- ----------
2,000 2,000
====== ======
During the year ended 31 October 2022 no ordinary shares of 25p each were
issued or repurchased by the Company (2021: none). Shares held in treasury do
not carry a right to receive dividends.
9. Ordinary dividends paid Record date Payment date 2022 2021
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
Third Interim dividend for the year ended 31 October 2020 of 6.5p 20 November 2020 18 December 2020 - 513
Final dividend for the year ended 31 October 2020 of 7.5p 19 February 2021 26 March 2021 - 592
First Interim dividend for the year ended 31 October 2021 of 6.5p 21 May 2021 25 June 2021 - 513
Second Interim dividend for the year ended 31 October 2021 of 6.5p 20 August 2021 24 September 2021 - 513
Third Interim dividend for the year ended 31 October 2021 of 6.5p 19 November 2021 17 December 2021 513 -
Final dividend for the year ended 31 October 2021 of 8.0p 18 February 2022 25 March 2022 632 -
First Interim dividend for the year ended 31 October 2022 of 7.0p 20 May 2022 24 June 2022 553 -
Second Interim dividend for the year ended 31 October 2022 of 7.0p 19 August 2022 23 September 2022 553
Unclaimed dividends (3) (2)
--------- ---------
2,248 2,129
===== =====
The Board declared a third interim dividend of 7.0p per ordinary share, paid
on 16 December 2022 to shareholders on the register of the Company at the
close of business on 18 November 2022. The ex-dividend date was 17 November
2022. Based on the number of ordinary shares in issue on 31 October 2022, the
cost of this dividend was £553,000.
Subject to approval at the AGM, the proposed final dividend of 13.0p per
ordinary share will be paid on 24 March 2023 to shareholders on the register
of members at the close of business on 17 February 2023. The shares will be
quoted ex-dividend on 16 February 2023.
The total dividends payable in respect of the financial year, which form the
basis of the test under Section 1158 of the Corporation Tax Act 2010, are set
out below:
Year Year
ended ended
31 October 31 October
2022 2021
£'000 £'000
Revenue available for distribution by way of dividends for the year 3,209 1,954
First interim dividend for the year ended 31 October 2022: 7.0p (2021: 6.5p) (553) (513)
Second interim dividend for the year ended 31 October 2022: 7.0p (2021: 6.5p) (553) (513)
Third interim dividend for the year ended 31 October 2022: 7.0p (2021: 6.5p) (553) (513)
Proposed final dividend for the year ended 31 October 2022: 13.0p (based on (1,027) (632)
the 7,898,375 ordinary shares in issue at 2 February 2023) (2021: 8.0p on
7,898,375 ordinary shares)
----------- -----------
Transferred to/(from) revenue reserve(1) 523 (217)
======= =======
( )
All dividends have been paid or will be paid out of revenue profit and the
revenue reserve.
( )
(1) Undistributed revenue comprises 13.3% of income from investments (2021: no
undistributed revenue)
10. 2022 Financial Information
The figures and financial information for the year ended 31 October 2022 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 October 2022 have
been audited but have not yet been delivered to the Registrar of Companies.
The Independent Auditor's Report on the 2022 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. 2021 Financial Information
The figures and financial information for the year ended 31 October 2021 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 October 2021 have
been audited and delivered to the Registrar of Companies. The Independent
Auditor's Report on the 2020 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.
12. Annual Report and Annual General Meeting
The Annual Report for the year ended 31 October 2022 will be posted to
shareholders in February 2023 and will be available on the Company's website
www.hendersonopportunitiestrust.com
(http://www.hendersonopportunitiestrust.com) or from the Corporate Secretary
at the Company's Registered Office, 201 Bishopsgate, London EC2M 3AE.
The Annual General Meeting will be held on Wednesday 8 March 2023 at 2.30pm at
201 Bishopsgate, London, EC2M 3AE. The Notice of the Annual General Meeting
will be posted to shareholders with the Annual Report and will be available on
the Company's website.
13. General Information
Company Status:
Henderson Opportunities Trust plc is registered in England and Wales (No.
01940906), has its registered office at 201 Bishopsgate, London EC2M 3AE and
is listed on the London Stock Exchange.
SEDOL/ISIN: 0853657/GB0008536574
London Stock Exchange (TIDM) Code: HOT
Global Intermediary Identification Number (GIIN): LVAHJH.99999.SL.826
Legal Entity Identifier (LEI): 2138005D884NPGHFQS77
Directors and Corporate Secretary:
The Directors of the Company are Wendy Colquhoun (Chairman), Frances Daley
(Audit and Risk Committee Chairman), Davina Curling and Harry Morgan. The
Corporate Secretary is Janus Henderson Secretarial Services UK Limited,
represented by Melanie Stoner (Fellow of the Chartered Governance Institute).
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.hendersonopportunitiestrust.com.
For further information, please contact:
James Henderson Harriet Hall
Fund Manager Investment Trust PR Manager
Henderson Opportunities Trust plc Janus Henderson Investors
Telephone: 020 7818 4370 Telephone: 020 7818 2919
Dan Howe
Head of Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 4458
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.
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