19th May 2016 13:00
HENDERSON ALTERNATIVE STRATEGIES TRUST PLC
Unaudited Results for the half-year ended 31 March 2016
This announcement contains regulated information
Investment Objective
The Company exploits global opportunities to provide long-term growth to shareholders via a diversified, international, multi-strategy portfolio which offers access also to specialist funds including hedge and private equity. The Company aims to outperform the FTSE World Total Return Index.
Performance |
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|
| 31 March 2016 | 30 September 2015 |
NAV per ordinary share | 266.6p | 275.6p |
Share price per ordinary share | 210.0p | 221.0p |
Total Return Performance to 31 March (including dividends reinvested and excluding transaction costs) | |||||
| 6 months % | 1 year % | 3 years % | 5 years % | 10 years % |
NAV1 | -2.3 | -6.4 | -5.8 | -22.7 | -20.0 |
Share price2 | -3.5 | -6.4 | -13.0 | -26.4 | -34.0 |
FTSE World Total Return Index3 | 11.5 | 0.0 | 27.9 | 50.9 | 93.2 |
FTSE Developed/EM 75/25 Composite4 | 11.5 | -1.9 | 20.8 | 37.7 | 91.9 |
1 Net asset value total return per ordinary share with income reinvested for 6 months, 1, 3 and 5 years and capital NAV plus income reinvested for 10 years
2 Share price total return using mid-market share price
3 FTSE World Total Return Index in sterling terms - the Company's benchmark
4 FTSE Developed Total Return Index (75%) / FTSE Emerging Markets Total Return Index (25%) - a composite index introduced as an additional informal performance measure
Sources: Morningstar Direct, Datastream, Henderson
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Performance
The Company delivered a NAV total return of -2.3% during the half-year to 31 March 2016 compared to a rise of 11.5% in its FTSE World Total Return Index global equity benchmark. Whilst the Company tends to outperform in testing markets (e.g. for the six-month period to 30 September 2015) it tends equally to underperform in rising markets. The extent of the recent underperformance is unsatisfactory, as is the fact that the fund made a negative absolute return. The Fund Managers' Report explains some of the reasons for this trend, reviews portfolio activity and performance during the half-year and describes the Company's prospects for the second half of the financial year.
Your Board appointed Henderson as Fund Manager in April 2013 in order to address a preceding period of unsatisfactory investment performance and to reposition the Company for future growth. In doing so, it considered it necessary to give Henderson sufficient time to complete its portfolio restructuring with a view to achieving attractive long-term returns for shareholders. The Board also recognises, however, that the Company must now begin to demonstrate that performance is indeed improving and is sustainable longer term.
The Company's share price total return of -3.5% during the half-year did not reflect the Company's commitment to deliver stronger returns. It is similarly clear that improved performance is required to increase demand for the Company's shares which, in turn, should help to reduce its persistent share price discount to NAV per share. During the half-year the discount widened slightly from 19.8% to 21.2%.
Second 10% Tender Offer
In January 2015 the Company completed a tender offer for up to 10% of its ordinary shares. As announced previously, a second 10% tender offer will be made available to shareholders towards the end of 2016 if the Company's discount averages more than 10% during the financial year-ended 30 September 2016. It is now very likely that the second tender offer will take place.
Outlook
Whilst the Board remains confident that the Company's restructured portfolio now has the potential to generate attractive long-term returns, it continues to regard improved near-term investment performance as the Company's key priority during the second half of the financial year. This is particularly important as the Board, Henderson and the Company's broker engage in further marketing activities over the coming months.
It is now almost 18 months since our shareholders gave the Company the mandate to continue with its identified strategy. The Company is therefore at a critical point as it strives to re-establish itself as a compelling vehicle for investors seeking exposure to a high-quality diverse portfolio of alternative asset and specialist funds. Although significant progress has been made towards creating such a portfolio, the Board is fully aware of the importance of engaging with shareholders regarding the Company's future direction if improved investment performance continues to be elusive during 2016. The Board will continue to keep under consideration other potential means of enhancing shareholder value, including additional discount control mechanisms.
At the time of writing, there are a number of more encouraging signs of improvement in the value of some of the Company's underlying investments and, as you will also note in the Fund Managers' Report, the fund management team believes that such signs should translate into better performance over the remainder of 2016.
Richard Gubbins
Chairman
FUND MANAGERS' REPORT
Market Review and Performance against Benchmark
Global stock markets were volatile during the half-year to 31 March 2016. Between October and December investors recovered their poise, following August's sharp declines, reflecting an increased acceptance of China's slowing growth rate, an apparent resolution to the Greek crisis and the end to speculation regarding the timing of the much anticipated increase in US interest rates. This improved sentiment was shattered in January and early February as renewed concerns regarding a slowdown in global growth and possible recession in the US led to severe market falls. This was then followed, as these concerns receded, by a strong rally from mid-February through to the end of March. Over the half-year period these market gyrations resulted in an overall increase of 11.5% in the Company's FTSE World Total Return Index global equity benchmark.
Against this backdrop, the Company's NAV total return during the half-year was -2.3%, again demonstrating that the Company's short-term investment performance diverges significantly from its global equities benchmark. As we have outlined in previous reports, this should not be a surprise to shareholders given the specialist nature of the Company's flexible and differentiated investment mandate. The benchmark is, however, an important yardstick for measuring whether the Company's investment strategy, focused mainly on alternative asset and specialist fund investment, is capable of generating long-term returns above those of global equity markets. By 'long-term' we mean periods of at least five years.
There are a number of reasons why the Company's short-term performance diverges from its benchmark. For example, at the half-year 17% of the Company's total investments comprised unlisted holdings that reprice monthly, quarterly, semi-annually or annually. In addition, a further 5% consisted of illiquid listed investments that reprice irregularly. As a result, these parts of the portfolio tend not to reflect short-term movements in global equity indices, but may still be perfectly capable of generating the necessary long-term returns. Another reason for short-term divergence is that some of our most significant areas of investment focus, such as specialist credit funds and long/short absolute return hedge fund strategies, exhibit limited correlation to global equity markets. They do, however, have the potential to outperform those markets in the long-term.
Portfolio Activity
We were active across all five of the Company's investment categories during the period under review. These are Specialist Sector, Specialist Geography, Private Equity, Hedge and Property. The significant portfolio changes are outlined below.
In the Specialist Sector category we increased our exposure to the floating rate senior bank loan asset class. We did this to take advantage of attractive pricing arising from what we considered to be overdone investor concerns regarding the health of the US high-yield market and the risk of US recession. We therefore invested in Voya Prime Rate Trust, a US-listed senior loan fund, and Carador Income Fund PLC, a UK-listed fund that trades senior, mezzanine and equity securities issued by Collateralised Loan Obligation vehicles.
The Specialist Geography sleeve saw two material disposals as we reduced country-specific emerging market risk by selling the Company's remaining positions in Value Partners China Greenchip Fund Limited and Weiss Korea Opportunity Fund Limited. Some of the proceeds were reinvested into Genesis Emerging Markets Fund Limited, a good-quality UK-listed fund with well-diversified geographic exposure. We also took advantage of the overly pessimistic market mood in January to purchase a position in Euro Stoxx 50 Index Dividend Futures (December 2017) at an attractive valuation.
Activity in the Private Equity category was limited, although we were pleased to fund a further drawdown under our USD 10.0 million commitment to Mantra Secondary Opportunities, a small unlisted vehicle which invests in mature private equity limited partnerships. We also added to the Company's holding in Riverstone Energy Limited, a UK-listed fund which has been investing in the North American shale oil and gas sector since the oil price collapse towards the end of 2014.
In the Hedge category our extended search for a suitable long/short listed equities fund focused on Asia reached a conclusion when we invested in Indus PacifiChoice Asia. This fund is run by an experienced management team and has a good track record. After the half-year end we also invested in the Majedie Asset Management Tortoise Fund, a successful long/short global listed equities vehicle. We believe such funds are well-equipped to deal with what is likely to be a volatile equity market environment given that the era of market-friendly accommodative central bank monetary policy is now past its peak. These two investments were funded partly by a significant reduction in the Company's position in Pershing Square Holdings Limited, an activist US hedge fund which experienced a major blemish against its hitherto excellent track record following well-publicised problems at its largest portfolio investment, Valeant Pharmaceuticals International Inc.
Finally, the Property sleeve benefited from a short-lived investment in Japan Residential Property Company Limited, a UK-listed fund investing in Japanese residential property. Having obtained approximately one-third of our target holding, the fund's shareholders accepted a cash bid at a considerable premium to our entry price. We also opened a position in Summit Germany Limited, a UK-listed fund which invests in the German commercial property sector. This, in our view, is one of the few significantly undervalued parts of the European property market.
Portfolio Prospects
When we assumed management of the Company's problematic, poor-performing and relatively illiquid investment portfolio on 1 April 2013, we made it clear that we thought a properly managed restructuring would take up to three years. This has proved to be the case, but the process is now complete and we are confident that the portfolio, subject to a normal level of turnover, now contains a significant number of good-quality investments which are capable of generating attractive NAV growth over the next few years.
Although overall portfolio performance was unsatisfactory during the half-year, we believe there are grounds for optimism over the coming months and that there are multiple growth opportunities embedded within the Company's investment portfolio. For example, we think there are good prospects for both NAV growth and discount narrowing across our extensive listed private equity and specialist credit holdings which were oversold during January and February as concerns regarding global growth came to the fore. Also, our long/short listed equity hedge fund investments are delivering improved returns following a challenging few months. Furthermore, we expect attractive NAV uplifts from some of our illiquid unlisted holdings such as CEIBA Investment Limited (Cuban property) and Mantra Secondary Opportunities.
We therefore look forward to the coming months with confidence.
Ian Barrass and James de Bunsen
Fund Managers
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the Company are market related and include market price, foreign exchange, interest rate, liquidity and credit risk.
Information on these risks is given in the Annual Report for the year ended 30 September 2015. In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the financial year as they were to the six months under review.
Statement of Directors' Responsibilities
The Directors confirm that, to the best of their knowledge:
a) the financial statements for the half-year ended 31 March 2016 have been prepared in accordance with FRS 104 Interim Financial Reporting;
b) the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c) the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
For and on behalf of the Board
Richard Gubbins
Chairman
INVESTMENT PORTFOLIO at 31 March 2016 | |||||
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|
| Market Value | Portfolio | |
Investments (excluding CFDs) | Focus |
| £'000 | % | |
BlackRock European Hedge Fund Limited3 | Hedge |
| 7,531 | 7.2 | |
Riverstone Energy Limited2 | Private Equity |
| 4,680 | 4.5 | |
Indus PacifiChoice Asia Fund3 | Specialist Geography |
| 4,608 | 4.4 | |
CT Investment Fund - A Non Restricted Shares3 | Hedge |
| 4,556 | 4.4 | |
CEIBA Investments Limited4 | Property |
| 4,383 | 4.1 | |
Blackstone/GSO Loan Financing Limited2 | Specialist Sector |
| 4,223 | 4.1 | |
Princess Private Equity Holding Limited2 | Private Equity |
| 4,123 | 4.0 | |
Polar Capital Global Financials Trust plc2 | Specialist Sector |
| 3,962 | 3.8 | |
Eurovestech plc1 | Private Equity |
| 3,954 | 3.8 | |
Oryx International Growth Fund Limited2 | Specialist Sector |
| 3,913 | 3.8 | |
Ten largest |
|
| 45,933 | 44.1 | |
Ediston Property Investment Company Plc2 | Property |
| 3,608 | 3.5 | |
Toro Limited2 | Specialist Sector |
| 3,591 | 3.4 | |
Genesis Emerging Markets Fund Limited2 | Specialist Geography |
| 3,510 | 3.4 | |
NB Private Equity Partners Limited2 | Private Equity |
| 3,393 | 3.3 | |
Voya Prime Rate Trust Fund2 | Specialist Sector |
| 3,242 | 3.1 | |
NB Distressed Debt Investment Fund Limited - Global Shares2 | Specialist Sector |
| 3,136 | 3.0 | |
Firebird Republics Fund Limited3 | Specialist Geography |
| 3,020 | 2.9 | |
Ishares V MSCI Japan GBP Hedged UCITS2 | Specialist Geography |
| 3,010 | 2.9 | |
Baring Vostok Investments Limited core1 | Private Equity |
| 2,929 | 2.8 | |
Standard Life European Private Equity Trust Plc2 | Private Equity |
| 2,829 | 2.7 | |
Twenty largest |
|
| 78,201 | 75.1 | |
Carador Income Fund Plc2 | Specialist Sector |
| 2,585 | 2.5 | |
Apax Global Alpha Limited2 | Private Equity |
| 2,300 | 2.2 | |
Mantra Secondary Opportunities4 | Private Equity |
| 2,219 | 2.1 | |
Renewable Energy and Infrastructure Fund II4 | Specialist Sector |
| 2,141 | 2.1 | |
Tetragon Financial Group Limited2 | Specialist Sector |
| 1,975 | 1.9 | |
Century Capital Partners IV L.P.4 | Private Equity |
| 1,552 | 1.5 | |
Chenavari Capital Solutions Limited2 | Specialist Sector |
| 1,517 | 1.5 | |
NB Distressed Debt Investment Fund Limited - Extended Life Shares2 | Specialist Sector |
| 1,341 | 1.2 | |
ASM Asian Recovery Fund4 | Hedge |
| 1,299 | 1.2 | |
Amber Trust SCA4 | Private Equity |
| 1,215 | 1.1 | |
Thirty largest |
|
| 96,345 | 92.4 | |
Ishares European Property Yield2 | Property |
| 1,165 | 1.1 | |
Pershing Square Holdings Limited2 | Hedge |
| 970 | 0.9 | |
Summit Germany Limited2 | Property |
| 761 | 0.7 | |
EPE Special Opportunities plc Ordinary2 | Private Equity |
| 747 | 0.7 | |
Firebird Republics Fund SPV4 | Specialist Geography |
| 740 | 0.7 | |
Metage Emerging Markets Opportunities Fund3 | Hedge |
| 697 | 0.7 | |
Baring Vostok Investments Limited cell1 | Private Equity |
| 697 | 0.7 | |
Ludgate Environmental Fund Limited2 | Specialist Sector |
| 691 | 0.7 | |
Acheron Portfolio Corporation (A Shares)1 | Specialist Sector |
| 600 | 0.6 | |
South African Property Opportunities plc2 | Property |
| 243 | 0.2 | |
Forty largest |
|
| 103,656 | 99.4 | |
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| |
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| Market Value | Portfolio | |
Investments (excluding CFDs) | Focus |
| £'000 | % | |
Zouk Solar Opportunities Limited4 | Specialist Sector |
| 151 | 0.1 | |
Prosperity Voskhod Fund Limited4 | Specialist Geography |
| 118 | 0.1 | |
Armadillo Investments Limited4 | Liquidation |
| 87 | 0.1 | |
Value Catalyst Fund Limited4 | Specialist Sector |
| 82 | 0.1 | |
Strathdon Investments Plc4 | Specialist Sector |
| 67 | 0.1 | |
Low Carbon Accelerator Limited4 | Liquidation |
| 36 | 0.0 | |
Polar Capital Global Financials Trust plc - Subscription Shares2 | Specialist Sector |
|
10 |
0.0 | |
China CDM Exchange Centre Limited1 | Specialist Sector |
| 1 | 0.0 | |
Buena Vista Latin America Fund Limited4 | Property |
| - | 0.0 | |
Buena Vista Latin America Fund (CULS)4 | Property |
| - | 0.0 | |
Fifty largest |
|
| 104,208 | 99.9 | |
Denholm Hall Russia Arbitrage Fund B - Redemption4 | Hedge |
| - | 0.0 | |
Denholm Hall Russia Arbitrage Fund B - Investment4 | Hedge |
| - | 0.0 | |
International Oil & Gas Technology Limited2 | Specialist Sector |
| - | 0.0 | |
iO Adria Limited1 | Property |
| - | 0.0 | |
PSource Structured Debt Limited4 | Liquidation |
| - | 0.0 | |
Thompson Clive Investments Plc4 | Liquidation |
| - | 0.0 | |
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| |
Total Investments (excluding CFDs and Futures) |
|
| 104,208 | 99.9 | |
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| |
|
| Gross Market Exposure | Fair Value | Portfolio | |
CFD Assets | Focus | £000 | £'000 | % | |
Ecofin Water and Power Opportunities plc | Specialist Sector | 2,407 | (117) | -0.1 | |
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| |
Futures |
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|
| |
Eux SX5E Div Dec 17 Future (Exp 15/12/17) |
| 3,810 | 178 | 0.2 | |
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Total Investments |
|
| 104,269 | 100.0 | |
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1 Listed on Minor Market (includes: Luxembourg Stock Exchange, Channel Islands Stock Exchange, ISDX and LMMX) | |||||
2 Listed on Major Market (includes: London Stock Exchange (full listing and AIM) and Euronext) | |||||
3 Unlisted investment - with Redemption Rights |
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4 Unlisted investment - without Redemption Rights |
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Investment by geography on a look through basis
| ||
| 31 March | |
| 2016 | 2015 |
| % | % |
West Europe | 32 | 34 |
North America | 27 | 20 |
Cash | 16 | 12 |
Japan,Australia,New Zealand | 7 | 2 |
Other BRICS | 5 | 9 |
Eastern Europe | 4 | 5 |
Frontier | 4 | 3 |
Russia | 3 | 6 |
Miscellaneous | 1 | 3 |
Asia Emerging | 1 | 6 |
| 100 | 100 |
Investment by sector on a look through basis
| ||
| 31 March | |
| 2016 | 2015 |
| % | % |
Cash | 16 | 12 |
Property | 15 | 17 |
Miscellaneous | 12 | 13 |
Technology and Media | 12 | 13 |
Personal Goods and Retail | 9 | 6 |
Financial Services and Banks | 8 | 9 |
Industrial Goods and Services | 6 | 4 |
Healthcare and Education | 6 | 5 |
Infrastructure and Transport | 5 | 4 |
Utilities and Telecoms | 4 | 5 |
Oil & Gas | 3 | 4 |
Insurance | 2 | 5 |
Basic Resources | 1 | 2 |
Food & Beverage | 1 | 1 |
| 100 | 100 |
Value of investments by vehicle type | ||
| 31 March | |
| 2016 | 2015 |
Category of Listing | % | % |
Listed - Major Exchange | 59 | 54 |
Listed - Minor Exchange | 8 | 10 |
Unlisted - with redemption rights | 17 | 22 |
Unlisted - without redemption rights | 16 | 14 |
Liquidation | 0 | 0 |
| 100 | 100 |
Value of investments by classification | ||
| 31 March | |
| 2016 | 2015 |
Investment Focus | % | % |
Specialist Sector | 32 | 31 |
Private Equity | 30 | 25 |
Specialist Geography | 14 | 18 |
Hedge | 14 | 18 |
Property | 10 | 8 |
Liquidation | 0 | 0 |
| 100 | 100 |
Condensed Income Statement |
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| (Unaudited) | (Unaudited) | (Audited) | |||||||
| Half-year ended | Half-year ended | Year ended | |||||||
| 31 March 2016 | 31 March 2015 | 30 September 2015 | |||||||
| Revenue | Capital |
| Revenue | Capital |
| Revenue | Capital |
| |
| return | return | Total | return | return | Total | return | return | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Investment income | 1,364 | - | 1,364 | 1,023 | - | 1,023 | 2,090 | - | 2,090 | |
Exchange differences | - | (40) | (40) | - | 6 | 6 | - | 61 | 61 | |
Losses on investments held at fair value through profit or loss1 | - | (3,195) | (3,195) | - | (1,816) | (1,816) | - | (7,509) | (7,509) | |
Total income/(loss) | 1,364 | (3,235) | (1,871) | 1,023 | (1,810) | (787) | 2,090 | (7,448) | (5,358) | |
Expenses (Note 2) |
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Management fees | (41) | (368) | (409) | (45) | (403) | (448) | (86) | (782) | (868) | |
Other expenses | (174) | - | (174) | (162) | - | (162) | (351) | - | (351) | |
Net return/(loss) before interest and taxation | 1,149 | (3,603) | (2,454) | 816 | (2,213) | (1,397) | 1,653 | (8,230) | (6,577) | |
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Finance costs | - | (3) | (3) | (2) | (20) | (22) | (3) | (26) | (29) | |
Net return/(loss) on ordinary activities before taxation | 1,149 | (3,606) | (2,457) | 814 | (2,233) | (1,419) | 1,650 | (8,256) | (6,606) | |
Taxation | (10) | - | (10) | - | - | - | - | - | - | |
Net return/(loss) on ordinary activities after taxation | 1,139 | (3,606) | (2,467) | 814 | (2,233) | (1,419) | 1,650 | (8,256) | (6,606) | |
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Return/(loss) per ordinary share (Note 3) | 2.65p | (8.39p) | (5.74p) | 1.78p | (4.88p) | (3.10p) | 3.72p | (18.61p) | (14.89p) | |
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The total columns of this statement represent the Income Statement of the Company, prepared in accordance with FRS 104. The revenue and capital columns are supplementary to this and are published under guidance from the Association of Investment Companies. | ||||||||||
All revenue and capital returns in the above statement derive from continuing operations. | ||||||||||
No operations were acquired or discontinued during the half-year ended 31 March 2016. The Company has no recognised gains or losses other than those recognised in the Income Statement and the Statement of Changes in Equity. | ||||||||||
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The accompanying notes are an integral part of these condensed financial statements.
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1 Restated net of transaction costs (see Note 1) | ||||||||||
Condensed Statement of Changes in Equity |
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| (Unaudited) | ||||||
| Half-year ended 31 March 2016 | ||||||
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| Capital | Other |
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| |
| Share | Share | redemption | capital | Revenue |
| |
| capital | premium | reserve | reserves | reserve | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 October 2015 | 10,744 | 10,966 | 7,709 | 87,108 | 1,917 | 118,444 | |
Return attributable to shareholders | - | - | - | (3,606) | 1,139 | (2,467) | |
Ordinary dividends | - | - | - | - | (1,418) | (1,418) | |
Balance at 31 March 2016 | 10,744 | 10,966 | 7,709 | 83,502 | 1,638 | 114,559 | |
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| (Unaudited) | ||||||
| Half-year ended 31 March 2015 | ||||||
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| Capital | Other |
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| Share | Share | redemption | capital | Revenue |
| |
| capital | premium | reserve | reserves | reserve | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 October 2014 | 11,938 | 10,966 | 6,515 | 108,289 | 1,700 | 139,408 | |
Return attributable to shareholders | - | - | - | (2,233) | 814 | (1,419) | |
Shares bought back - Tender Offer | (1,194) | - | 1,194 | (12,922) | - | (12,922) | |
Ordinary dividends | - | - | - | - | (1,433) | (1,433) | |
Balance at 31 March 2015 | 10,744 | 10,966 | 7,709 | 93,134 | 1,081 | 123,634 | |
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| (Audited) | ||||||
| Year ended 30 September 2015 | ||||||
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| Capital | Other |
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| Share | Share | redemption | capital | Revenue |
| |
| capital | premium | reserve | reserves | reserve | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 October 2014 | 11,938 | 10,966 | 6,515 | 108,289 | 1,700 | 139,408 | |
Return attributable to shareholders | - | - | - | (8,256) | 1,650 | (6,606) | |
Shares bought back - Tender Offer | (1,194) | - | 1,194 | (12,925) | - | (12,925) | |
Ordinary dividends | - | - | - | - | (1,433) | (1,433) | |
Balance at 30 September 2015 | 10,744 | 10,966 | 7,709 | 87,108 | 1,917 | 118,444 | |
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The accompanying notes are an integral part of these condensed financial statements. | |||||||
Condensed Statement of Financial Position |
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| (Unaudited) | (Unaudited) | (Audited) | |
| Half-year ended | Half-year ended | Year ended | |
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| 31 March 2016 | 31 March 2016 | 30 September 2015 |
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| £'000 | £'000 | £'000 |
| Fixed assets |
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| Investments held at fair value through profit or loss | 104,208 | 117,228 | 106,982 |
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| Current assets |
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| Investments held at fair value through profit or loss | 4,511 | 2,672 | 6,995 |
| Securities sold for future settlement | 569 | - | 1,934 |
| Taxation recoverable | 51 | 12 | 33 |
| Prepayments and other receivables | 97 | 67 | 23 |
| Cash at bank | 3,878 | 1,806 | 220 |
| Unrealised gains on future contracts | 178 | - | - |
| Cash held as CFD and futures margin deposit | 2,859 | 2,872 | 2,692 |
| Total current assets | 12,143 | 7,429 | 11,897 |
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| Current liabilities |
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| Securities purchased for future settlement | 1,178 | 439 | - |
| CFD liabilities held at fair value through profit and loss | 117 | - | 101 |
| Accruals and deferred income | 497 | 584 | 334 |
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| 1,792 | 1,023 | 435 |
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| Net current assets | 10,351 | 6,406 | 11,462 |
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| Total assets less current liabilities | 114,559 | 123,634 | 118,444 |
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| Equity attributable to equity shareholders: |
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| Called up share capital (Note 5) | 10,744 | 10,744 | 10,744 |
| Share premium | 10,966 | 10,966 | 10,966 |
| Capital redemption reserve | 7,709 | 7,709 | 7,709 |
| Capital reserves | 83,502 | 93,134 | 87,108 |
| Revenue reserve | 1,638 | 1,081 | 1,917 |
| Total equity shareholders' funds | 114,559 | 123,634 | 118,444 |
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| Net asset value per ordinary share (pence) (Note 6) | 266.56 | 287.68 | 275.60 |
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| The accompanying notes are an integral part of these condensed financial statements. | |||
Condensed Cash Flow Statement |
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| (Unaudited) | (Unaudited and restated1) | (Audited and restated1) |
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| Half-year ended 31 March 2016 | Half-year ended 31 March 2015 | Year ended 30 September 2015 |
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| £'000 | £'000 | £'000 |
Cash flows from operating activities |
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Net return on ordinary activities before taxation | (2,457) | (1,419) | (6,606) | |
Add back: finance costs | 3 | 22 | 29 | |
Add losses on investments held at fair value through profit or loss | 3,195 | 1,816 | 7,509 | |
Unrealised gains on future contracts | (178) | - | - | |
Withholding tax on dividends deducted at source | (10) | - | - | |
(Increase) / decrease in prepayments and accrued income | (90) | (6) | 17 | |
Increase / (decrease) in accruals and deferred income | 164 | 2 | (248) | |
Increase / (decrease) in amounts due to brokers | 2,543 | 1,403 | (970) | |
Exchange movements : cash and cash equivalents | (26) | (32) | (2) | |
Net cash inflow / (outflow)from operating activities | 3,144 | 1,786 | (271) | |
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Cash flows from investing activities |
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Purchases of investments held at fair value through profit or loss | (20,940) | (16,591) | (38,057) | |
Sales of investments held at fair value through profit or loss | 20,532 | 17,480 | 43,600 | |
Purchases of current asset investments held at fair value through profit or loss | (17,053) | (16,002) | (40,699) | |
Sales of current asset investments held at fair value through profit or loss | 19,537 | 29,580 | 49,954 | |
Net cash inflow from investing activities | 2,076 | 14,467 | 14,798 | |
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Cash flows from financing activities |
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Share buybacks | - | (12,922) | (12,925) | |
Equity dividends paid | (1,418) | (1,433) | (1,433) | |
Interest paid | (3) | (22) | (29) | |
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Net cash outflow from financing activities | (1,421) | (14,377) | (14,387) | |
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Net increase in cash and equivalents | 3,799 | 1,876 | 140 | |
Cash and cash equivalents at beginning of period | 2,912 | 2,770 | 2,770 | |
Exchange movements | 26 | 32 | 2 | |
Cash and cash equivalents at end of period | 6,737 | 4,678 | 2,912 | |
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Comprising: |
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Cash at bank | 3,878 | 1,806 | 220 | |
Cash held as CFD and futures margin deposits | 2,859 | 2,872 | 2,692 | |
| 6,737 | 4,678 | 2,912 | |
1 The Cash Flow Statements previously reported have been restated to comply with the new disclosure requirements of FRS 102 and the re-classification of money market funds as current asset investments. For more details see Note 1.
The accompanying notes are an integral part of the condensed financial statements.
The accompanying notes are an integral part of the condensed financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. | Accounting Policies The condensed set of financial statements has been prepared in accordance with FRS 104, Interim Financial Reporting, issued in March 2015, the revised reporting standard for half-year reporting that was issued following the introduction of FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland, which is effective for periods commencing on or after 1 January 2015. The Statement of Recommended Practice for "Financial Statements of Investment Trust Companies and Venture Capital Trusts", in accordance with which the Company's financial statements are also prepared, was re-issued by the Association of Investment Companies in November 2014 to comply with the revised reporting standards. The Company has early adopted the amendments to FRS 102 in respect of fair value hierarchy disclosures issued in March 2016.
Following the application of the revised reporting standards, there have been no changes to the accounting policies set out in the Company's Annual Report for the year ended 30 September 2015.
The condensed financial statements for the year ended 30 September 2015 and the six months ended 31 March 2016 have been restated where necessary to comply with the new standards and disclosure requirements.
In line with FRS 102 and the revised SORP, transaction costs incidental to the purchase and sale of investments have been reclassified and included as part of the loss on investments held at fair value through profit or loss instead of being shown separately on the face of the income statement as a capital expense.
The Cash Flow Statements previously reported have been restated to comply with the new disclosure requirements and the re-classification of money market funds as current asset investments. The Statement of Financial Position for each period also reflect the re-classification.
There has been no other impact on the Company's Income Statement, Statement of Financial Position (previously called the Balance Sheet or Statement of Changes in Equity (previously called the Reconciliation of Movements in Shareholders' Funds) for periods previously reported.
The condensed set of financial statements has been neither audited nor reviewed by the Company's auditors.
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2. | Expenses and Management Fees Henderson Investment Funds Limited ('Henderson') receives a management fee of 0.7% per annum, payable quarterly in arrears based on the level of net chargeable assets at the relevant quarter end. Management fees are allocated 90% to capital and 10% to revenue.
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3. | Return/(loss) per Ordinary Share The return/loss per ordinary share figure is based on the following figures: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| (Unaudited) Half-year ended 31 March 2016 £'000 | (Unaudited) Half-year ended 31 March 2015 £'000 | (Audited) Year ended 30 September 2015 £'000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue profit | 1,139 | 814 | 1,650 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net capital (loss)/profit | (3,606) | (2,233) | (8,256) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total (loss)/profit | (2,467) | (1,419) | (6,606) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Weighted average number of ordinary shares in issue during the period | 42,976,264 | 45,757,389 | 44,363,017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Revenue profit per ordinary share | 2.65 | 1.78 | 3.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital (loss)/profit per ordinary share | (8.39) | (4.88) | (18.61) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total (loss)/profit per ordinary share | (5.74) | (3.10) | (14.89) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4. |
Dividends The Company has not declared an interim dividend (2015: nil).
The final dividend of 3.3p per ordinary share, paid on 26 February 2016, in respect of the year ended 30 September 2015, has been recognised as a distribution in the period.
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5. | Called up Share Capital At 31 March 2016 there were 42,976,264 ordinary shares in issue (31 March 2015: 42,976,264; 30 September 2015: 42,976,264).
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6. | Net Asset Value per Ordinary Share The net asset value per ordinary share is based on the net assets attributable to the equity shareholders of £114,559,000 (31 March 2015: £123,634,000; 30 September 2015: £118,444,000) and on 42,976,264 (31 March 2015: 42,976,264; 30 September 2015: 42,976,264) ordinary shares, being the number of ordinary shares (excluding treasury shares) in issue at the period end.
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8. | Current asset investments The Company has a holding in Deutsche Global Liquidity Managed Platinum Income Fund, a money market fund which is viewed as a readily disposable store of value and which is used to invest cash balances that would otherwise be placed on short term deposit. At 31 March 2016 this holding had a value of £4,511,000 (31 March 2015: £2,672,000: 30 September 2015: £6,995,000). As FRS 102 states that an investment normally qualifies as a cash equivalent only when it has a short maturity of, say, three months or less from the date of acquisition, it has been considered that the money market fund should be reclassified as a current asset investment instead of a cash equivalent within the Statement of Financial Position (previously called the Balance Sheet) and Cash Flow Statement.
Investments held at Fair Value Through Profit or Loss The table below analyses fair value measurements for investments held at fair value through profit or loss. These fair value measurements are categorised into different levels in the fair value hierarchy based on the valuation techniques used and are defined as follows under FRS 102: Level 1: valued using quoted prices in active markets for identical assets. Level 2: valued by reference to valuation techniques using observable inputs other than quoted prices included in Level 1. Level 3: valued by reference to valuation techniques using inputs that are not based on observable market data.
The total valuations shown above include investments held at fair value through profit and loss, the CFD and Future held at fair value through profit or loss and the current asset investment that was previously classified as a cash equivalent.
The investments were previously reported as Level 1, Level 2 or Level 3 investments under the FRS 29 fair value hierarchy and are now reported as Level 1, Level 2 or Level 3 investments under the FRS 102 classifications as amended in March 2016 by the amendments to the fair value hierarchy. This results in there being no change to the classifications under FRS 102 compared to previous periods.
There have been no transfers between the levels of the fair value hierarchy during the period.
The valuation techniques used by the Company are explained in the accounting policies note in the Company's Annual Report for the year ended 30 September 2015 and are equally applicable under both FRS 29 and FRS 102.
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9. | Transaction Costs Purchase transaction costs for the half-year ended 31 March 2016 were £16,000 (31 March 2015: £9,000; 30 September 2015: £14,000). These comprise mainly stamp duty and commission. Sale transaction costs for the half-year ended 31 March 2016 were £8,000 (31 March 2015: £7,000; 30 September 2015: £13,000).
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10. | Comparative Information The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the half-years ended 31 March 2016 and 31 March 2015 has not been audited.
The information for the year ended 30 September 2015 has been extracted from the statutory accounts for that year, which have been filed with the Registrar of Companies. The report of the auditors on those accounts was unqualified and contained no statement under either section 498(2) or section 498(3) of the Companies Act 2006.
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11. | Related Party Transactions Other than the relationship between the Company and its Directors, the provision of services by Henderson is the only related party arrangement currently in place as defined in the Listing Rules. Other than fees payable by the Company in the ordinary course of business, there have been no material transactions with the Company's related parties affecting the financial position or performance and the provision of sales and marketing services, of the Company during the period under review.
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12. | Going Concern Having reassessed the principal risks and uncertainties the Directors believe that it is appropriate to adopt the going concern basis in preparing the financial statements.
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13. | General information
Company Status The Company is an investment trust company, registered in Scotland with company registration number SC015905.
The SEDOL/ISIN number is GB0001216000. The London Stock Exchange (TIDM) Code is HAST. The Company's Legal Entity Identifier (LEI) is 213800J6LLOCA3CUDF69. The Company's Global Intermediary Identification Number (GIIN) is AEFUI2.99999.SL.826.
Directors, Secretary and Registered Office The Directors of the Company are Richard Gubbins (Chairman), Graham Oldroyd (Audit Committee Chairman), Graham Fuller (Senior Independent Director) and Jamie Korner.
The Corporate Secretary is Henderson Secretarial Services Limited, represented by Rachel Peat, ACIS.
The registered office is Leven House, 10 Lochside Place, Edinburgh Park, Edinburgh EH12 9DF.
The correspondence address is Henderson Global Investors, 201 Bishopsgate, London EC2M 3AE.
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.hendersonalternativestrategies.com
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14. | Half-Year Report The Half-Year Report will shortly be available in typed format on the Company's website. An abbreviated version, the Half-Year Update, will be circulated to shareholders in June and will be available on the website thereafter. Both the Half-Year Report and the Half-Year Update will be available from the Corporate Secretary at the Company's correspondence address: 201 Bishopsgate, London EC2M 3AE.
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For further information please contact:
Ian Barrass Fund Manager Henderson Alternative Strategies Trust plc Telephone: 020 7818 2964
| James de Bunsen Fund Manager Henderson Alternative Strategies Trust plc Telephone: 020 7818 3869 |
Richard Gubbins Chairman Henderson Alternative Strategies Trust plc Telephone: 07818 454 175 | Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Investment Funds Limited Telephone: 020 7818 3198
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James de Sausmarez Director and Head of Investment Trusts Henderson Investment Funds Limited Tel: 020 7818 3349 |
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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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