3rd Apr 2014 14:41
HENDERSON GLOBAL TRUST plc
Annual Financial Report for the year ended 31 January 2014
This announcement contains regulated information
Investment objective
The Company seeks long-term capital growth from a concentrated portfolio of international equities with a secondary objective to increase dividends over the longer term. The Manager generally holds stocks of large and medium sized companies quoted on major equity markets.
Performance Highlights
· The net asset value ("NAV") total return (including dividends reinvested) was 4.7% compared to a total return from the benchmark index(1) of 9.2%. (Sources: Morningstar FundData and Thomson Reuters Datastream)
· The share price total return (including dividends reinvested) was -1.2%.
· Maintained annual dividend per ordinary share of 10.0p per share.
Structural Highlights
· The discount(2) widened from 3.8% to 9.4% as the share price (excluding dividends reinvested) fell by 3.9%.
· The average discount for the year was 8.6% compared with an average for the AIC Global Growth sector of 8.5%. (Source: Thomson Reuters Datastream - including revenue, debt at par)
· 49,310 shares were repurchased and are held in treasury.
Total return performance (including dividends reinvested)
| ||||
1 year % | 3 years % | 5 years % | 10 years % | |
Net asset value per share | 4.7 | 14.9 | 80.7 | 145.2 |
Mid-market price per ordinary share | -1.2 | 7.4 | 80.4 | 193.5 |
Benchmark index(1) | 9.2 | 26.4 | 94.0 | 122.8 |
Sources: Morningstar FundData using fair value NAV with income reinvested for 1, 3 and 5 years and capital NAV plus income reinvested for 10 years. Benchmark returns are sourced from Thomson Reuters Datastream.
(1) Comprising 50% FTSE All-Share Index and 50% MSCI World Index ex UK (in sterling terms) to 31 May 2013 and the MSCI All Country World Index (in sterling terms, total return) thereafter.
(2) The discount is calculated using published daily net asset values with debt at par and excluding current year revenue.
Financial Highlights
At 31 January2014 | At 31 January2013 | |
Shareholders' funds | ||
Net assets attributable to ordinary shareholders (£'000) |
152,993 |
150,098 |
Net asset value ("NAV") per ordinary share with debt(1) at par with debt at fair value |
385.8p 386.8p |
378.0p 378.8p |
Mid-market price per ordinary share | 349.5p | 363.6p |
Discount(2) | ||
with debt at par | 9.4% | 3.8% |
with debt at fair value | 9.6% | 4.0% |
average for the year(3) | 8.6% | 9.6% |
Year ended 31 January 2014 | Year ended 31 January 2013 | |
Total return to equity shareholders | ||
Revenue return after taxation (£'000) Capital return after taxation (£'000) | 3,710 3,332 | 3,807 12,543 |
----------- | ----------- | |
7,042 | 16,350 | |
====== | ====== | |
Total return per ordinary share | ||
Revenue | 9.35p | 9.57p |
Capital | 8.40p | 31.55p |
----------- | ----------- | |
17.75p | 41.12p | |
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Dividends per ordinary share | 10.0p | 10.0p |
Ongoing charges | 0.92% | 0.98% |
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(1) Debt comprises the Company's cumulative preference stock.
(2) The discount is calculated using published daily net asset values that exclude current year revenue.
(3) Source: Thomson Reuters Datastream based on NAV including revenue with debt at par value.
For further information contact:
James de Sausmarez Director of Investment Trusts Henderson Global Investors Tel: 020 7818 3349 | Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Tel: 020 7818 3198 |
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
Chairman's Statement
Performance
2013 was a challenging year and one of change for the Company, with the appointment of a new Portfolio Manager and the introduction of a new investment policy and benchmark. The low risk investment style of our Manager has resulted in underperformance against the benchmark.
Shareholders approved a change to our investment objective and policy at the annual general meeting in May 2013. This included a switch to a single benchmark, the MSCI All Country World Index (in sterling terms, total return) ("the New Benchmark") with effect from 1 June 2013. The old benchmark was made up of a composite of 50% FTSE All-Share Index and 50% MSCI World Index ex UK (in sterling terms). During the year to 31 January 2014 the net asset value ("NAV") per ordinary share total return was 4.7% compared to a total return of 9.2% from a combination of the old benchmark to 31 May 2013 and the New Benchmark thereafter. The share price total return of-1.2% was clearly disappointing, explained by the double impact of underperforming net asset performance and the discount widening from 3.8% to 9.4% over the year. The average discount (excluding revenue) of 8.6% was, however, comparable to the sector average of 8.5%.
Revenue and dividends
The Group revenue return per ordinary share for the year to 31 January 2014 was 9.35p per ordinary share compared with 9.57p per ordinary share for 2013. Your Board declared four interim dividends of 2.5p each, making a total for the year of 10.0p, the same as for the previous year. As per last year, the Board utilised a small amount of the Company's substantial revenue reserves to fund part of the dividend.
Discount and share buy-backs
In order to ensure that shareholders do not suffer from too much discount volatility the Board keeps the absolute level of the discount in comparison to its peer group of investment trusts under regular review, with the aim of restricting the discount from rising much above 8% in normal market circumstances. Consequently, we are seeking to renew the authority to buy back ordinary shares at the forthcoming annual general meeting. The Company bought back 49,310 shares in the year under review. All of the repurchased shares are held in treasury and we hope to be able to reissue them in due course. We are therefore seeking renewal of our authorisation from shareholders to re-issue shares bought into treasury at a discount, providing it is at a narrower discount than that at which the shares were previously bought in, and in any case at a discount of no more than 3%. I do encourage you to support these resolutions.
Personnel changes
As previously announced, Wouter Volckaert took over from Brian O'Neill as Portfolio Manager with effect from 1 February 2014. The change in Portfolio Manager has not resulted in any substantial change in investment objective, policy or philosophy. More information on Wouter's background and investment style is included on the website www.hendersonglobaltrust.com. Brian remains a member of the Henderson global equities team and has been closely involved in the transfer of responsibilities for the management of the portfolio to Wouter in order to provide continuity of investment approach. The Board would like to thank Brian for his major contribution to the Company over his 30 years as our Portfolio Manager.
Miriam Greenwood has indicated her intention to retire at the conclusion of the Company's 2014 annual general meeting ("AGM"). The Board would also like to thank Miriam for her contribution to the Board over the nine years of her tenure. Succession planning will be considered over the course of 2014.
Fee structure
With effect from 1 February 2014, the Board has agreed with its Manager a revised fee structure. With effect from that date, the fee will be charged at 0.6% per annum on the value of the Group's total assets. The previous structure provided that the fee be reduced to 0.35% on assets over £200 million. However, the separate company secretarial fee of £80,000 has been abolished as part of this change in fee structure.
Regulatory developments
The Alternative Investment Fund Managers ("AIFM") Directive is a European wide directive aimed at providing oversight and transparency of non-UCITS funds managed, domiciled and/or distributed in the European Economic Area; it was transposed into UK law on 22 July 2013. There is a one year transition period for the Company to comply with the provisions of this directive, which includes appointing an alternative investment fund manager and a depositary, that will provide an independent monitoring role to ensure the Company complies with the regulations. The Board has agreed in principle that Henderson, its Manager, will be appointed as the AIFM and that HSBC Bank plc, the Company's current custodian, will be appointed as depositary. The Board anticipates no problem in relation to the Company being in a position to comply with the implications of this legislation.
The Board proposes to make certain amendments to the Company's articles of association in response to the AIFM Regulations coming into force. In particular, the Board proposes an amendment that will permit the Board to authorise a depositary, appointed on the terms and conditions prescribed in the AIFM Regulations, together with any further requirements that may be prescribed by the Board, to discharge itself of liability where the Company holds assets in a country other than the United Kingdom, and where the law of that country does not satisfy certain delegatory requirements specified in the AIFM Regulations. This proposed amendment will provide the Company with commercial flexibility in terms of its investments and the Board will exercise its discretion in the usual way in determining whether or not to provide such a discharge. Certain other minor amendments to the Company's articles of association are also proposed to reflect the implementation of the AIFM Directive and AIFM Regulations. Full details are included in the separate letter to shareholders.
Outlook
Five years into the market recovery that started in 2009, we remain constructive on equities. Our view is supported by improving economic data, reasonable valuation levels, and the ability of central banks to continue to provide ample liquidity.
Richard Stone
Chairman
3 April 2014
Principal Risks and Uncertainties
The main areas of risk, in the opinion of the Board, are summarised below.
· Market risk
Since the Company is an investment company its performance is dependent on the performance of the companies and stock markets in which it invests and will also be affected by the strength of currencies in the regions in which it invests, relative to sterling. Although the Manager seeks to maintain a diversified portfolio, country and sector weightings may diverge significantly as the portfolio is not modelled on any particular investment index. The Company does not currently carry out currency hedging.
At their regular meetings, the Directors and the Manager review the Company's activities and performance and determine investment strategy. Investment risk is spread by holding a diversified portfolio in line with the Company's investment objective and policy.
· Performance risk
An inappropriate investment strategy (for example poor stock selection or asset allocation) may result in underperformance against the Company's peers or its Benchmark. The Board monitors performance at each Board meeting.
· Gearing
The Company has the ability under existing covenants to gear up to 25% of the Group's net assets, but in normal circumstances gearing would not be expected to exceed 15% and the borrowing facility currently available from HSBC Bank plc is limited to the lesser of £20 million and 25% of custody assets. In the event of a significant or prolonged fall in equity markets gearing would exacerbate the effect of the falling market on the Company's NAV per share and, consequently, its share price.
· Other financial risks
The Company minimises its risk associated with a counterparty failing to deliver securities or cash by dealing through organisations that have undergone rigorous due diligence by the Manager. Liquid funds are held almost entirely in UK interest bearing bank accounts or on short-term deposit. This, together with the portfolio mainly comprising investments in large and medium sized companies quoted on major equity markets, mitigates the exposure to liquidity risk.
· Internal control
The Board, in conjunction with the Audit Committee, regularly reviews the system of internal controls. These include controls to ensure that the Company's assets are safeguarded.
· Discount control
The Board utilises the Company's buy-back powers to enhance net asset value ("NAV") per share and limit the risk to shareholders and potential investors of a volatile discount. The Board keeps the absolute level of the discount in comparison to its peer group of investment trusts under regular review, with the aim of restricting the discount from rising much above 8% in mornal market circumstances.
Statement under DTR 4.1.12
Each of the Directors confirms that, to the best of his or her knowledge:
· the Group and Parent Company financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union on a going concern basis, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and
· the annual report and financial statements include a fair review of the development and performance of the business and the position of the Group and Parent Company, together with a description of the principal risks and uncertainties that it faces.
Principal investments
as at 31 January 2014
Ranking 2014 2013 | Company | Principal activities | Geographical area | Valuation 2014 £'000 | Percentage of portfolio | |
1 | 7 | Novartis | Pharmaceuticals | Switzerland | 4,580 | 3.0 |
2 | 13 | Macy's | General retailers | United States | 4,045 | 2.6 |
3 | 12 | Japan Tobacco | Tobacco | Japan | 3,604 | 2.4 |
4 | 10 | Oracle | Software & computer services | United States | 3,590 | 2.4 |
5 | 2 | Nestlé | Food producers | Switzerland | 3,424 | 2.3 |
6 | 28 | BorgWarner | Auto parts | United States | 3,267 | 2.1 |
7 | 15 | Pfizer | Pharmaceuticals & biotechnology | United States | 3,236 | 2.1 |
8 | 3 | HSBC | Banks | United Kingdom | 3,135 | 2.1 |
9 | - | Crown Holdings | Diversified metals & mining | United States | 3,134 | 2.1 |
10 | - | Software & computer services | United States | 3,018 | 2.0 | |
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10 largest | 35,033 | 23.1 | ||||
11 | - | Twenty First Century Fox | Media | United States | 2,938 | 2.0 |
12 | 14 | ANZ Banking | Banks | Australia | 2,798 | 1.8 |
13 | 17 | Singapore Telecom | Fixed line telecommunications | Singapore | 2,798 | 1.8 |
14 | 20 | DBS | Banks | Singapore | 2,789 | 1.8 |
15 | - | Lockheed Martin | Aerospace & defence | United States | 2,736 | 1.8 |
16 | - | Softbank | Mobile telecommunications | Japan | 2,734 | 1.8 |
17 | 8 | Wharf Holdings | Real estate investment services | Hong Kong | 2,603 | 1.7 |
18 | 45 | Lloyds Banking | Banks | United Kingdom | 2,573 | 1.7 |
19 | 6 | Syngenta | Chemicals | Switzerland | 2,373 | 1.6 |
20 | - | Rentokil Initial | Industrial transportation | United Kingdom | 2,372 | 1.6 |
---------- | ---------- | |||||
20 largest | 61,747 | 40.7 | ||||
21 | 29 | JP Morgan Chase | Banks | United States | 2,358 | 1.6 |
22 | 35 | Volkswagen | Automobile & parts | Germany | 2,352 | 1.5 |
23 | 16 | GKN | Auto parts | United Kingdom | 2,348 | 1.5 |
24 | 9 | GlaxoSmithKline | Pharmaceuticals & biotechnology | United Kingdom | 2,346 | 1.5 |
25 | - | IBM | Software & computer services | United States | 2,289 | 1.5 |
26 | - | Sumitomo Mitsui Financial | Banks | Japan | 2,285 | 1.5 |
27 | - | Bristol-Myers Squibb | Pharmaceuticals & biotechnology | United States | 2,280 | 1.5 |
28 | - | Walgreen | Food & drug retailers | United States | 2,251 | 1.5 |
29 | 1 | Royal Dutch Shell | Oil & gas producers | United Kingdom | 2,225 | 1.5 |
30 | 33 | Thomson Reuters | Media | Canada | 2,191 | 1.4 |
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30 largest | 84,672 | 55.7 | ||||
31 | 39 | Citigroup | Banks | United States | 2,165 | 1.4 |
32 | - | Wells Fargo & Co | Banks | United States | 2,162 | 1.4 |
33 | 24 | Philip Morris International | Tobacco | United States | 2,116 | 1.4 |
34 | - | Legrand | Electronic & electrical equipment | France | 2,115 | 1.4 |
35 | 59 | Apple | Technology hardware & equipment | United States | 2,102 | 1.4 |
36 | 32 | United Continental | Airlines | United States | 2,078 | 1.4 |
37 | - | General Electric | General industrials | United States | 2,065 | 1.4 |
38 | 37 | Telstra | Fixed line telecommunications | Australia | 2,050 | 1.3 |
39 | - | AIA Group | Life insurance | Hong Kong | 2,008 | 1.3 |
40 | 23 | Prada | Personal goods | Italy | 1,968 | 1.3 |
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40 largest | 105,501 | 69.4 | ||||
Other listed investments (31 stocks) | 45,769 | 30.0 | ||||
Unquoted investments (4 stocks) | 846 | 0.6 | ||||
---------- | ---------- | |||||
Total investments | 152,116 | 100.0 | ||||
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Consolidated Statement of Comprehensive Income
for the year ended 31 January 2014
Year ended 31 January 2014 | Year ended 31 January 2013 | |||||
Revenuereturn£'000 | Capitalreturn £'000 | Total£'000 | Revenue return£'000 | Capital return £'000 | Total £'000 | |
Dividends and other income | 4,736 | - | 4,736 | 4,846 | 13 | 4,859 |
Gains on investments held at fair value through profit or loss | - | 3,843 | 3,843 | - | 13,129 | 13,129 |
Net exchange gain | - | 239 | 239 | - | 26 | 26 |
Net dealing profit | 126 | - | 126 | 16 | - | 16 |
--------- | ---------- | ----------- | --------- | ---------- | ----------- | |
Total income | 4,862 | 4,082 | 8,944 | 4,862 | 13,168 | 18,030 |
Expenses | ||||||
Management fee | (314) | (627) | (941) | (279) | (557) | (836) |
Other expenses | (508) | (53) | (561) | (533) | (30) | (563) |
--------- | ---------- | ----------- | --------- | ---------- | ----------- | |
Profit before finance costs and taxation | 4,040 | 3,402 | 7,442 | 4,050 | 12,581 | 16,631 |
Finance costs | ||||||
Interest payable and similar charges | (23) | (45) | (68) | (7) | (13) | (20) |
Dividends on preference stock | (13) | (25) | (38) | (13) | (25) | (38) |
--------- | ---------- | ----------- | --------- | ---------- | ----------- | |
Total finance costs | (36) | (70) | (106) | (20) | (38) | (58) |
===== | ===== | ===== | ===== | ===== | ===== | |
Profit before taxation | 4,004 | 3,332 | 7,336 | 4,030 | 12,543 | 16,573 |
Taxation | (294) | - | (294) | (223) | - | (223) |
--------- | ---------- | ----------- | --------- | ---------- | ----------- | |
Net profit for the year and total comprehensive income | 3,710 | 3,332 | 7,042 | 3,807 | 12,543 | 16,350 |
===== | ===== | ===== | ===== | ===== | ===== | |
Return per ordinary share (basic and diluted) | 9.35p | 8.40p | 17.75p | 9.57p | 31.55p | 41.12p |
===== | ===== | ===== | ===== | ===== | ===== | |
The total column of this statement represents the Consolidated Statement of Comprehensive Income, prepared in accordance with IFRSs as adopted by the European Union.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
Consolidated Statement of Changes in Equity
Year ended 31 January 2014 | Called upshare capital £'000 | Share premium account£'000 | Capital redemption reserve £'000 | Retained earnings | ||
Capitalreserve £'000 | Revenue reserve(1)£'000 | Total£'000 | ||||
Total equity at 1 February 2013 | 10,389 | 13,410 | 33,966 | 81,039 | 11,294 | 150,098 |
Total comprehensive income: | ||||||
Profit for the year | - | - | - | 3,332 | 3,710 | 7,042 |
Transactions with owners, recorded directly to equity: | ||||||
Equity dividends paid | - | - | - | - | (3,968) | (3,968) |
Buy-backs of ordinary shares and held in treasury | - | - | - | (179) | - | (179) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
Total equity at 31 January 2014 | 10,389 | 13,410 | 33,966 | 84,192 | 11,036 | 152,993 |
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Year ended 31 January 2013 | Called upshare capital £'000 | Share premium account£'000 | Capital redemption reserve £'000 | Retained earnings | |||||
Capitalreserve £'000 | Revenue reserve(1)£'000 | Total £'000 | |||||||
Total equity at 1 February 2012 | 10,389 | 13,410 | 33,966 | 69,187 | 13,201 | 140,153 | |||
Total comprehensive income: | |||||||||
Profit for the year | - | - | - | 12,543 | 3,807 | 16,350 | |||
Transactions with owners, recorded directly to equity: | |||||||||
Equity dividends paid | - | - | - | - | (5,714) | (5,714) | |||
Buy-backs of ordinary shares and held in treasury | - | - | - | (691) | - | (691) | |||
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ||||
Total equity at 31 January 2013 | 10,389 | 13,410 | 33,966 | 81,039 | 11,294 | 150,098 | |||
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(1) The revenue reserve represents the amount of reserves distributable by way of dividend.
Parent Company Statement of Changes in Equity
Year ended 31 January 2014 | Called upshare capital £'000 | Share premium account£'000 | Capital redemption reserve £'000 | Retained earnings | ||
Capitalreserve £'000 | Revenue reserve(1)£'000 | Total £'000 | ||||
Total equity at 1 February 2013 | 10,389 | 13,410 | 33,966 | 81,930 | 10,403 | 150,098 |
Total comprehensive income: | ||||||
Profit for the year | - | - | - | 3,458 | 3,584 | 7,042 |
Transactions with owners, recorded directly to equity: | ||||||
Equity dividends paid | - | - | - | - | (3,968) | (3,968) |
Buy-backs of ordinary shares and held in treasury | - | - | - | (179) | - | (179) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
Total equity at 31 January 2014 | 10,389 | 13,410 | 33,966 | 85,209 | 10,019 | 152,993 |
====== | ====== | ====== | ====== | ====== | ====== | |
Year ended 31 January 2013 | Called upshare capital £'000 | Share premium account£'000 | Capital redemption reserve £'000 | Retained earnings | |||||
Capitalreserve £'000 | Revenue reserve(1)£'000 | Total £'000 | |||||||
Total equity at 1 February 2012 | 10,389 | 13,410 | 33,966 | 70,062 | 12,326 | 140,153 | |||
Total comprehensive income: | |||||||||
Profit for the year | - | - | - | 12,559 | 3,791 | 16,350 | |||
Transactions with owners, recorded directly to equity: | |||||||||
Equity dividends paid | - | - | - | - | (5,714) | (5,714) | |||
Buy-backs of ordinary shares and held in treasury | - | - | - | (691) | - | (691) | |||
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ||||
Total equity at 31 January 2013 | 10,389 | 13,410 | 33,966 | 81,930 | 10,403 | 150,098 | |||
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(1) The revenue reserve represents the amount of reserves distributable by way of dividend.
Consolidated and Parent Company Balance Sheets
at 31 January 2014
Consolidated2014£'000 | Consolidated2013£'000 | Company2014 £'000 | Company2013 £'000 | |
Non-current assets | ||||
Investments held at fair value through profit or loss | 152,116 | 144,608 | 152,116 | 144,608 |
Investment in subsidiary | - | - | 1,027 | 901 |
---------- | ---------- | ---------- | ---------- | |
152,116 | 144,608 | 153,143 | 145,509 | |
---------- | ---------- | ---------- | ---------- | |
Current assets | ||||
Investments held for trading | - | 103 | - | - |
Balances due from brokers | - | 68 | - | 68 |
Taxation recoverable | 28 | 109 | 28 | 109 |
Other recievables | 145 | 215 | 145 | 215 |
Cash and cash equivalents | 2,188 | 7,040 | 1,463 | 6,441 |
---------- | ---------- | ---------- | ---------- | |
2,361 | 7,535 | 1,636 | 6,833 | |
---------- | ---------- | ---------- | ---------- | |
Total assets | 154,477 | 152,143 | 154,779 | 152,342 |
---------- | ---------- | ---------- | ---------- | |
Current liabilities | ||||
Balances due to brokers | - | (539) | - | (436) |
Other payables | (484) | (506) | (786) | (808) |
---------- | ---------- | ---------- | ---------- | |
(484) | (1,045) | (786) | (1,244) | |
---------- | ---------- | ---------- | ---------- | |
Non-current liabilities | ||||
3.75% cumulative preference stock | (1,000) | (1,000) | (1,000) | (1,000) |
---------- | ---------- | ---------- | ---------- | |
Net assets | 152,993 | 150,098 | 152,993 | 150,098 |
====== | ====== | ====== | ====== | |
Equity attributable to equityshareholders | ||||
Called up share capital | 10,389 | 10,389 | 10,389 | 10,389 |
Share premium account | 13,410 | 13,410 | 13,410 | 13,410 |
Capital redemption reserve | 33,966 | 33,966 | 33,966 | 33,966 |
Capital reserve | 84,192 | 81,039 | 85,209 | 81,930 |
Revenue reserve | 11,036 | 11,294 | 10,019 | 10,403 |
---------- | ---------- | ---------- | ---------- | |
Total equity | 152,993 | 150,098 | 152,993 | 150,098 |
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Net asset value per ordinary share (basic and diluted) | 385.8p | 378.0p | 385.8p | 378.0p |
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Consolidated and Parent Company Cash Flow Statements
for the year ended 31 January 2014
Consolidated 2014£'000 | Consolidated 2013 £'000 | Company 2014 £'000 | Company 2013 £'000 | |
Operating activities | ||||
Profit before finance costs and taxation | 7,442 | 16,631 | 7,442 | 16,631 |
Increase in investments | (8,115) | (11,549) | (8,241) | (11,462) |
Decrease in receivables | 70 | 331 | 70 | 331 |
(Decrease) / increase in payables | (22) | 620 | (22) | 517 |
Taxation on investment income | (213) | (167) | (213) | (167) |
---------- | ---------- | ---------- | ---------- | |
Net cash (outflow) / inflow from operating activities | (838) | 5,866 | (964) | 5,850 |
---------- | ---------- | ---------- | ---------- | |
Financing activities | ||||
Buy-backs of ordinary shares and held in treasury | (179) | (772) | (179) | (772) |
Cumulative preference stock dividends paid | (38) | (38) | (38) | (38) |
Equity dividends paid | (3,968) | (5,714) | (3,968) | (5,714) |
Overdraft arrangement fee and interest paid | (68) | (20) | (68) | (20) |
---------- | ---------- | ---------- | ---------- | |
Net cash outflow from financing | (4,253) | (6,544) | (4,253) | (6,544) |
---------- | ---------- | ---------- | ---------- | |
Decrease in cash and cash equivalents | (5,091) | (678) | (5,217) | (694) |
Cash and cash equivalents at the start of the year | 7,040 | 7,692 | 6,441 | 7,109 |
Effect of foreign exchange rate changes | 239 | 26 | 239 | 26 |
---------- | ---------- | ---------- | ---------- | |
Cash and cash equivalents at the end of the year | 2,188 | 7,040 | 1,463 | 6,441 |
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Notes to the Financial Statements
1. | Accounting policies Henderson Global Trust plc ("the Company") is a company incorporated and domiciled in the United Kingdom under the Companies Act 2006 ("the Act"). The consolidated financial statements of the Company for the year ended 31 January 2014 comprise the Company and its subsidiary, Engandscot Limited, together referred to as the "Group".
The consolidated and parent company financial statements for the year ended 31 January 2014 have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and with those parts of the Act applicable to companies reporting under IFRSs and IFRIC guidance. These comprise standards and interpretations approved by the International Accounting Standards Board, together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Financial Reporting Standards Committee that remain in effect, to the extent that IFRSs have been adopted by the European Union.
The financial statements have been prepared on a going concern basis and on the historical cost basis, as modified by the revaluation of investments at fair value through profit or loss. Where presentational guidance set out in the AIC SORP is consistent with the requirements of IFRSs, the Directors have sought to prepare the financial statements on a basis consistent with the recommendations of the AIC SORP.
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2. | Fourth interim dividend |
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A fourth interim dividend of 2.5p per ordinary share, in lieu of a final dividend, in respect of the year ended 31 January 2014 was declared on 26 February 2014. The shares were marked ex-dividend on 5 March 2014 and the dividend was paid on 1 April 2014 to shareholders on the register on 7 March 2014. |
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3. | Dividends and other income | 2014 £'000 | 2013 £'000 |
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Revenue Income from quoted investments: |
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Franked UK dividends | 1,695 | 2,430 |
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UK property income distributions | 75 | 58 |
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Overseas dividends | 2,963 | 2,351 |
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4,733 | 4,839 |
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Other income: |
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Interest on deposits | 3 | 7 |
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---------- | ---------- |
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4,736 | 4,846 |
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Capital |
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Special dividend from UK quoted investment, allocated to capital | - | 13 |
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4. | Management fee | Revenue return £'000 | 2014 Capital return £'000 |
Total £'000 | Revenue return £'000 | 2013 Capital return £'000 | Total £'000 |
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| Management fee | 314 | 627 | 941 | 279 | 557 | 836 |
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Management fees are allocated one-third to revenue and two-thirds to capital. | ||||||||
5. | Taxation | Revenue return£'000 | 2014 Capital return£'000 | Total £'000 | Revenue return £'000 | 2013 Capital return £'000 |
Total £'000 |
| (a) Analysis of charge for the year | ||||||
Overseas tax suffered | 294 | - | 294 | 223 | - | 223 | |
----------- | ---------- | ----------- | ----------- | ---------- | ----------- | ||
Current and total tax charge for the year | 294 | - | 294 | 223 | - | 223 | |
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(b) Factors affecting tax charge for the year | |||||||
The standard rate of corporation tax in the UK changed with effect from 1 April 2013. Accordingly, the Group's profits for this accounting period are taxed at an effective rate of 23.17%.
The tax assessed for the year is lower (2013: lower) than the standard rate of 23% (2013: 24%) of corporation tax in the UK for a medium or large company. The differences are explained below. | |||||||
Revenue return £'000 | 2014 Capital return £'000 | Total £'000 | Revenue return £'000 | 2013 Capital return £'000 | Total £'000 | |
Net profit on ordinary activities before taxation | 4,004 | 3,332 | 7,336 | 4,030 | 12,543 | 16,573 |
----------- | --------- | --------- | ----------- | ---------- | ---------- | |
Corporation tax at 23.17%(1) (2013: 24.33%) | 928 | 772 | 1,700 | 981 | 3,052 | 4,033 |
Effects of: | ||||||
Capital profits not subject to corporation tax | - | (946) | (946) | - | (3,201) | (3,201) |
Non-taxable income | (1,101) | - | (1,101) | (1,158) | (3) | (1,161) |
Expenses not deductible for tax purposes | 3 | 18 | 21 | 3 | 13 | 16 |
Current year expenses not utilised | 170 | 156 | 326 | 175 | 139 | 314 |
Overseas tax suffered | 294 | - | 294 | 223 | - | 223 |
Tax relief on overseas tax suffered | - | - | - | (1) | - | (1) |
----------- | --------- | --------- | ----------- | ---------- | ---------- | |
Tax charge | 294 | - | 294 | 223 | - | 223 |
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(1) Under the Finance Act 2011 the rate of corporation tax lowered to 23% from 1 April 2013.
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(c) Provision for deferred taxation | |||
2014 £'000 | 2013 £'000 | ||
There is an unrecognised deferred tax asset comprising: | |||
Unrelieved management expenses(1) | 2,540 | 2,608 | |
Non-trading loan relationship deficits(1) | 3,758 | 4,315 | |
--------- | --------- | ||
6,298 | 6,923 | ||
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(1) In addition to the reduction in the rate of corporation tax disclosed above, a further reduction to 21% has applied from 1 April 2014. Accordingly, the potential deferred tax asset has been calculated using the 20% rate (2013: 23%).
It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and deficits and therefore no deferred tax asset has been recognised.
Investment trusts are exempt from corporation tax on capital gains provided that they meet the tests under Section 1158 of the Corporation Tax Act 2010.
Due to the Company's tax status as an investment trust and the intention to continue meeting the conditions required to obtain approval of such status in the foreseeable future, the Company has not provided deferred tax on any capital gains arising on the revaluation or disposal of investments. | |||
6. | Return per ordinary share | ||
The return per ordinary share figure is based on the net profit for the year of £7,042,000 (2013: profit of £16,350,000) and on 39,686,814 (2013: 39,760,853) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no shares with a dilutive effect.
The return per ordinary share figure detailed above can be further analysed between revenue and capital, as below. | |||
2014 £'000 | 2013 £'000 | ||
Net revenue profit | 3,710 | 3,807 | |
Net capital profit | 3,332 | 12,543 | |
--------- | --------- | ||
Net total profit | 7,042 | 16,350 | |
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Weighted average number of ordinary shares in issue during the year | 39,686,814 | 39,760,853 | |
Pence | Pence | ||
Revenue return per ordinary share | 9.35 | 9.57 | |
Capital return per ordinary share | 8.40 | 31.55 | |
--------- | --------- | ||
Total return per ordinary share | 17.75 | 41.12 | |
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7. | Net asset value ("NAV") per ordinary share (Group and Company) The NAV per ordinary share is based on the net assets attributable to the ordinary shares of £152,993,000 (2013: £150,098,000) and on the 39,660,381 ordinary shares in issue at 31 January 2014 (2013: 39,709,691). | ||
8. | Transactions with the management company Under the terms of agreements dated 18 July 2011 the Company has appointed subsidiaries of Henderson Group plc ("Henderson") to provide investment management, accounting, secretarial and administrative services. Henderson has contracted with BNP Paribas Securities Services to provide accounting and administration services.
The total of the management and secretarial fees paid or payable to Henderson under these agreements in respect of the year ended 31 January 2014 was £1,021,000 (2013: £916,000). The amount outstanding at 31 January 2014 was £344,000 (2013: £317,000).
In addition to the above services, Henderson has provided the Company with marketing services. The total fees paid or payable for these services for the year ended 31 January 2014 was £55,000, excluding VAT (2013: £76,000) of which £4,000 was outstanding at 31 January 2014 (2013: £25,000).
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9. | Going concern Having considered the Company's investment objective, the nature and liquidity of the Company's investment portfolio and income and expenditure projections, the Directors believe it is appropriate for the Company to continue to prepare its financial statements on a going concern basis. The assets of the Company consist almost entirely of securities that are readily realisable and the value of the Company's assets is greater than its liabilities. Cash is held with banks approved and regularly reviewed by the Manager. Accordingly, the Company has adequate financial resources to continue in operational existence for the foreseeable future.
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10. | 2014 financial information The figures and financial information for 2014 are extracted from the annual report and financial statements for that period and do not constitute the statutory accounts. The Company's annual report and financial statements for the year ended 31 January 2014 have been audited but have not yet been delivered to the Registrar of Companies. The Independent Auditors' Report on the 2014 annual 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 section 498 of the Act.
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11. | 2013 financial information The figures and financial information for 2013 are extracted from the published annual report and financial statements for the year ended 31 January 2013 and do not constitute the statutory accounts for that year. The 2013 annual report and financial statements have been delivered to the Registrar of Companies and included the Independent Auditors' Report which was unqualified and did not contain a statement under section 498 of the Act. |
12. | Annual report and financial statements Copies of the annual report and financial statements will be posted to shareholders shortly and will be available on the Company's website www.hendersonglobaltrust.com or in hard copy format from the registered office, 201 Bishopsgate, London EC2M 3AE. |
13. | Annual general meeting ("AGM") The Company's AGM will be held on Tuesday 13 May 2014 at 2.30 p.m. at the Company's registered office, 201 Bishopsgate, London EC2M 3AE.
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Related Shares:
HGL.L