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Half Yearly Report

18th Aug 2010 07:00

RNS Number : 2311R

Henderson Group plc

18 August 2010

HENDERSON GROUP PLC 2010 HALF YEAR RESULTS

18 August 2010

Financial highlights

Amounts in £m unless otherwise stated	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited

Underlying profit before tax1	48.5	27.1	73.7
Intangible amortisation and void property finance charge	(6.9)	(3.5)	(10.7)
Recurring profit before tax	41.6	23.6	63.0
Non-recurring items	-	(26.5)	(47.5)
Profit/(loss) before tax	41.6	(2.9)	15.5
Taxation on recurring operations	(8.6)	(4.7)	(13.3)
Taxation on non-recurring items	-	7.0	12.3
Total taxation	(8.6)	2.3	(1.0)
Profit/(loss) after tax	33.0	(0.6)	14.5

Operating margin2	29.1%	25.1%	27.6%
Assets under management (AUM) at period end (£bn)	56.4	53.0	58.1
Earnings per share (EPS)3
Basic4	4.7p	2.9p	7.5p
Diluted5	4.5p	2.7p	7.0p
Ordinary dividend per share	1.85p	1.85p	6.1p

Notes

1 Recurring profit before intangible amortisation and void property finance charge.

2 Total fee income less operating costs, divided by total fee income.

3 Based on underlying profit after tax attributable to equity holders of the parent.

4 Based on weighted average number of shares in issue less weighted average number of own shares held during the period.

5 Based on weighted average number of shares in issue less weighted average number of own shares held during the period relating to conditional awards and adjusted for the dilutive potential of share options.

Commenting on the 2010 half year results Chief Executive, Andrew Formica said:

"Henderson has delivered a strong first half, despite market volatility and fragile investor confidence, with revenues growing by 50% and underlying profits by some 80% compared to 1H09.

Our competitive investment performance, our skilled sales teams, improved brand awareness and a proven ability to capitalise on diverse investment opportunities have all contributed to this good result.

We expect market volatility to continue in the second half, though the business trends seen so far this year remain intact. We are also alert to the potential impact of regulatory changes on our business as regulators and governments seek to rebuild trust and confidence.

Notwithstanding the challenges faced by markets and by the industry, we are well positioned to launch new products and to continue to grow our business in all the channels and geographies where we operate."

Henderson Group plc

47 Esplanade

St Helier

Jersey JE1 0BD

Registered in Jersey

Company No. 101484

ABN 67 133 992 766

Key highlights

·; Underlying profit before tax has increased 79% to £48.5m in 1H10 (1H09: £27.1m).

·; Average AUM has increased by 19% to £58.2bn in 1H10 (1H09: £49.1bn). AUM at 30 June 2010 was £56.4bn (31 December 2009: £58.1bn).

·; Net inflows of £1.0bn in higher margin products in 1H10 (1H09: net outflows of £0.6bn).

·; Investment performance remains good in most areas with 72% of Fixed Income and 69% of Equity funds achieving or beating their benchmarks over one year.

·; Operating margin increased by 16% to 29.1% in 1H10 (1H09: 25.1%), due to higher market levels, the benefits of the New Star acquisition in April 2009 and continued cost control.

·; Compensation ratio increased by 4% to 44.5% in 1H10 (1H09: 42.9%), in line with remuneration policies linked to improved profitability of the Group.

·; Basic EPS on underlying profit increased by 62% to 4.7p in 1H10 (1H09: 2.9p).

·; The Board of Directors has declared an interim dividend of 1.85 pence per share (1H09: 1.85 pence per share).

To view the full details of the 2010 Interim Report and Accounts (ASX Appendix 4D), paste the following link into your web browser:

http://www.rns-pdf.londonstockexchange.com/rns/2311R_1-2010-8-17.pdf

To view the full details of the 2010 half year results presentation, paste the following link into your web browser:

http://www.rns-pdf.londonstockexchange.com/rns/2311R_2-2010-8-17.pdf

Market briefing

Management will present these results on 18 August 2010 at 6.00pm (Sydney time)/9.00am (London time).

Teleconference details

We recommend participants start dialling in 5-10 minutes prior to the start of the presentation. To telephone link-up to the briefing, dial one of the following numbers from 5.50pm (Sydney time)/8.50am (London time):

From:
United Kingdom	0500 1016 30 (free call)
Australia	1800 9889 41 (free call)
All other countries	+44 (0) 20 7162 0025 (This is not a free call number)
Conference title	Henderson Group, Half Year Results Briefing
Chairperson	Andrew Formica
Reference	870963

Replay number from:
United Kingdom	+44 (0) 20 7031 4064 Access code: 870963
Australia	+61 (0) 2 8223 9748 Access code: 870963
	(available from 18 August to 25 August 2010).

Webcast details

You can logon to a webcast of the results briefing which will start at 6.00pm (Sydney time)/9.00am (London time). Go to www.henderson.com/group and click on the relevant link on the homepage. An archive of the webcast will be available shortly after the event.

Further information www.henderson.com
or
Investor enquiries	Media enquiries
Mav Wynn, Head of Investor Relations	Richard Acworth, Head of Corporate Communications
+44 (0) 20 7818 5135 or +44 (0) 20 7818 5310	+44 (0) 20 7818 3010
[email protected] or [email protected]	[email protected]

	Australia: Cannings Luis Garcia	United Kingdom: Maitland George Trefgarne/Rebecca Mitchell
	+61 (0) 2 8284 9990	+44 (0) 20 7379 5151

Incorporating the requirements of ASX Appendix 4D

The information contained in this document should be read in conjunction with the Henderson Group plc Annual Report and Accounts for the year ended 31 December 2009 and any public announcements made by Henderson Group plc and its controlled entities (the Group) during the period in accordance with the continuous disclosure obligations arising under the Australian Corporations Act 2001 and the Australian Securities Exchange (ASX) Listing Rules. This report includes the interim information required to be provided to the ASX under Listing Rule 4.2A.

Results for Announcement to the Market

The half year results of Henderson Group plc for announcement to the market are as follows:

	6 months to 30 June 2010 Unaudited £m	6 months to 30 June 2009 Unaudited £m	Movement %

Revenue from recurring activities	236.2	148.5	59.1
Underlying profit after tax attributable to equity holders of the parent1	37.3	21.4	74.3
Profit/(loss) after tax attributable to equity holders of the parent1	32.3	(0.6)	n/a

Note

1 Excluding minority interest of £0.7m (1H09: nil).

Dividends

On 17 August 2010, the Board of Directors (the Board) declared an interim dividend in respect of the six months ended 30 June 2010 of 1.85 pence per share (1H09: 1.85 pence per share). Henderson Group plc does not offer a dividend reinvestment plan.

A final dividend of 4.25 pence per share was paid on 28 May 2010 in respect of the year ended 31 December 2009.


2010 interim dividend per share (0% franked)	1.85p

Record date	3 September 2010
Payment date	24 September 2010

Net tangible assets per ordinary share

30 June 2010

pence

30 June 2009

pence

Net tangible assets per ordinary share

(7.9)

(10.7)

"Net tangible assets" are defined by the ASX as being total assets less intangible assets less total liabilities ranking ahead of, or equally with, claims of ordinary shares.

The Interim Condensed Consolidated Financial Statements included within the Interim Report and Accounts have been subject to an independent review by Ernst & Young LLP.

Directors' Report

The Directors of Henderson Group plc (the Company) present their report for the six months ended 30 June 2010. The Board of Directors approved the financial results for the six months ended 30 June 2010 on 17 August 2010.

Directors

The Directors who served during the six months ended 30 June 2010 and up to the date of this report are shown below:

Rupert Pennant-Rea (Chairman)

Andrew Formica (Chief Executive)

Shirley Garrood (Chief Financial Officer)

Gerald Aherne

Duncan Ferguson

Tim How

Robert Jeens

Business review and results

Henderson Group's results for the six months ended 30 June 2010 are shown in the Interim Condensed Consolidated Income Statement on page 20. A review of the six months ended 30 June 2010 and future developments is covered in the Business Review on pages 7 to 18.

Rounding

In accordance with the Australian Securities and Investments Commission Class Order 98/0100, amounts in the Interim Report and Accounts have been rounded to the nearest £0.1m sterling, unless stated otherwise.

Directors' declaration

In the opinion of the Directors:

·; the Interim Condensed Consolidated Financial Statements and accompanying notes set out on pages 20 to 35:

- give a true and fair view (as set out in section 305 of the Australian Corporations Act 2001) of the Group's consolidated financial position as at 30 June 2010 and of its performance for the six months ended on that date; and

- have been prepared in accordance with the Disclosure and Transparency Rules of the FSA which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed; and

·; there are reasonable grounds to believe that the Group will be able to pay its debts as and when they fall due.

Signed in accordance with a resolution of the Directors:

Andrew Formica Shirley Garrood

Chief Executive Chief Financial Officer

17 August 2010 17 August 2010

Statement of Directors' Responsibilities

The Directors confirm that to the best of their knowledge, in relation to the Interim Condensed Consolidated Financial Statements; that

·; the Interim Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union;

·; the Interim Report and Accounts include a fair review of the information required by Disclosure and Transparency Rule 4.2.7R, being an indication of important events that have occurred during the first six months of the current financial year, and their impact on the Interim Condensed Consolidated Financial Statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·; the Interim Report and Accounts include a fair review of the information required by Disclosure and Transparency Rule 4.2.8R, being disclosure of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period and of any changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.

Signed in accordance with a resolution of the Directors:

Andrew Formica Shirley Garrood

Chief Executive Chief Financial Officer

17 August 2010 17 August 2010

Business Review

The Board and senior management team use a number of key indicators to monitor the performance of the Group. A history of these key performance indicators is shown below:

Investment performance

Fixed Income and Equity funds continued to perform well with 72% and 69%, respectively, of assets achieving or beating their benchmarks over one year and 76% and 70%, respectively, over three years1.

Fee margin

Total fee margin improved in 1H10 due to higher transaction and performance fees together with a full six months of revenue from New Star. Improving management fee margin illustrates the shift from lower to higher margin business. Net margins have improved as underlying profits improve in better market conditions.

Fund flows excluding Pearl

Horizon, US and UK Wholesale and Hedge funds had net inflows of £1.0bn in 1H10. Property net inflows of only £0.2bn in 1H10 reflect the difficulty of finding quality assets at suitable prices to invest client funds. There were net outflows from lower margin Cash funds and New Star Institutional Managers (NSIM) in 1H10.

Note

1 Following the consolidation and rebranding of the UK Wholesale range, 3 year investment performance in 1H10 includes legacy New Star funds. Excluding these funds, 87% of Fixed Income funds and 75% of Equity funds would have been at or above benchmark.

Operating margin and compensation ratio

Operating margin improved in 1H10 to 29.1% from 25.1% in 1H09 (FY09: 27.6%) due to the increase in market levels, a full six months of revenue from funds post the New Star acquisition and the Group's continued cost control. The compensation ratio increased to 44.5% in 1H10 from 42.9% in 1H09, in line with remuneration policies linked to improved Group profitability, but remains in line with 2H09.

Earnings per share

EPS on underlying profit increased in 1H10 due to higher earnings although this was offset by the issue of shares to fund the New Star acquisition.

Treating customers fairly

We are committed to the highest standards of customer care.

We believe the Treating Customers Fairly (TCF) initiative promoted by the FSA is embedded within the culture and procedures of the Group. TCF, among other priorities, is intended to promote fair treatment of customers by regulated firms throughout the product life cycle, from design to post-sales support. We always aim to:

·; treat our clients fairly;

·; ensure that any information provided in respect of a product is clear, fair and not misleading; and

·; align our interests with those of our clients.

The results of the Group for the six months ended 30 June 2010 are summarised below, with comparatives:

	6 months to 30 June 2010 Unaudited	6 months to 30 June 20091 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Management fees (net of commissions)	137.4	98.2	226.8
Transaction fees	16.6	10.4	24.9
Performance fees	24.6	8.3	31.6
Total fee income	178.6	116.9	283.3
Finance income	0.9	2.2	4.3
Total income	179.5	119.1	287.6

Operating costs	(126.6)	(87.6)	(205.0)
Finance costs	(4.4)	(4.4)	(8.9)
Total expenses	(131.0)	(92.0)	(213.9)
Underlying profit before tax	48.5	27.1	73.7

Intangible amortisation	(5.8)	(2.9)	(8.7)
Void property finance charge	(1.1)	(0.6)	(2.0)
Recurring profit before tax	41.6	23.6	63.0

Non-recurring items	-	(26.5)	(47.5)
Profit/(loss) before tax	41.6	(2.9)	15.5

Taxation on underlying profit	(10.5)	(5.7)	(16.3)
Taxation on intangible amortisation and void property finance charge	1.9	1.0	3.0
Taxation on non-recurring items	-	7.0	12.3
Total taxation	(8.6)	2.3	(1.0)
Profit/(loss) after tax	33.0	(0.6)	14.5

Attributable to:
Equity holders of the parent	32.3	(0.6)	13.8
Minority interests	0.7	-	0.7
	33.0	(0.6)	14.5

Operating margin2	29.1%	25.1%	27.6%
Compensation ratio	44.5%	42.9%	43.9%
Assets under management (AUM) at period end (£bn)	56.4	53.0	58.1
Average AUM for the period (£bn)	58.2	49.1	53.0

Margins on average AUM
Total fee margin (bps)	61.4	47.6	53.5
Management fee margin (bps)	47.2	40.0	42.8
Net margin (bps)3	16.7	11.0	13.9

Basic and diluted earnings per share (pence)
Basic on underlying profit after tax attributable to equity holders of the parent	4.7	2.9	7.5
Basic	4.1	(0.1)	1.8
Diluted on underlying profit after tax attributable to equity holders of the parent	4.5	2.7	7.0
Diluted	3.9	(0.1)	1.7

Ordinary dividend per share (pence)	1.85	1.85	6.1

Notes

1 Certain comparatives have been restated to conform with the current period's presentation. This relates to the recognition of performance fee bonuses as an operating cost, which were previously netted off against performance fees, and the elimination of Corporate Office and its resultant impact on finance income and total expenses.

2 Total fee income less operating costs, divided by total fee income.

3 Based on underlying profit before tax.

Half year result

Underlying profit before tax in 1H10 was £48.5m, an increase of 79% on 1H09 (£27.1m). Profit before tax was £41.6m compared to a loss of £2.9m in 1H09.

Revenue and fee margins

Total fee income increased by £61.7m (53%) in 1H10 to £178.6m from £116.9m in 1H09. Management fee income increased by 40% to £137.4m in 1H10 from £98.2m in 1H09, due to a full six month period of revenues on New Star assets (acquired in April 2009) and the impact of both higher margin net inflows of £1.3bn in 2H09 and £1.0bn in 1H10 along with higher market levels. The FTSE 100 Index averaged 30% higher in 1H10 than in 1H09. Transaction fees increased 60% to £16.6m in 1H10 from £10.4m in 1H09, primarily due to fees earned on UK Wholesale funds (including the impact of New Star) and our Property business. Performance fees increased by £16.3m (196%) to £24.6m in 1H10 from £8.3m in 1H09, primarily due to institutional mandates.

Total fee margin increased to 61.4bps in 1H10 from 47.6bps in 1H09, primarily due to higher transaction and performance fees and improving management fee margins following the New Star acquisition. Average management fee and net margins in 1H10 were 47.2bps (1H09: 40.0bps) and 16.7bps (1H09: 11.0bps) respectively. Over the past 18 months, the Group has seen a shift in AUM to higher margin assets which now represent 59% of total AUM (31 December 2009: 56%, 31 December 2008: 48%).

Finance income

Finance income in 1H10 decreased by £1.3m to £0.9m, primarily due to lower post-acquisition cash balances and lower interest rates.

Operating costs

Operating costs increased by £39.0m to £126.6m in 1H10. The main components are shown in the table below:

	6 months to 30 June 2010 Unaudited £m	6 months to 30 June 20091 Unaudited £m	12 months to 31 December 2009 Audited £m
Employee compensation and benefits	(79.9)	(51.1)	(126.3)
Investment administration	(11.6)	(10.2)	(22.6)
Information technology	(6.1)	(5.4)	(11.5)
Office expenses	(8.3)	(7.7)	(16.2)
Depreciation	(1.7)	(1.6)	(3.2)
Other expenses	(19.0)	(11.6)	(25.2)
Operating costs	(126.6)	(87.6)	(205.0)

Operating margin	29.1%	25.1%	27.6%
Compensation ratio	44.5%	42.9%	43.9%

Note

Employee compensation and benefits increased £28.8m to £79.9m in 1H10 compared to 1H09. Within this, fixed staff costs increased by £2.0m, reflecting the impact of New Star for a full six month period and variable staff costs increased by £26.8m, driven by improved market conditions and Group profitability. The average number of full-time employees in 1H10 was 928, compared to 912 in 1H09. The compensation ratio increased to 44.5% in 1H10 from 42.9% in 1H09, as shown in the graph below, mainly as a result of higher variable staff costs.

Investment administration costs increased by £1.4m to £11.6m in 1H10, primarily due to the increased number of funds following the New Star acquisition.

Information technology costs increased by £0.7m to £6.1m in 1H10, primarily due to the New Star acquisition.

Office expenses increased by £0.6m to £8.3m in 1H10, primarily due to a business rates rebate received in 1H09, not repeated in 1H10 and the impact of inflation.

Other expenses increased by £7.4m in 1H10 compared to 1H09, of which £3m represents costs incurred in relation to the potential acquisition of RidgeWorth Capital Management Inc. (RidgeWorth) on which the Group terminated discussions in June 2010. In addition, the Group has continued to invest in targeted strategic business development, in particular, relating to the UK Wholesale business, through marketing, events and promotions, with an impact of £3.8m.

Finance costs

Finance costs in 1H10 were £4.4m, unchanged from 1H09, and continue to include the amortisation of the profit arising from the unwind of an interest rate swap on debt in December 2008. The remaining profit on the interest rate swap (30 June 2010: £5.7m) will be amortised over the residual term of the debt, which matures on 2 May 2012.

Non-recurring items

There were no non-recurring items in 1H10. Non-recurring costs in 1H09 of £26.5m related to the integration of New Star.

Taxation

The tax charge on recurring profit for the period was £8.6m, giving an effective tax rate of 20.7% (1H09: £4.7m, 19.7%). The effective tax rate on recurring profit is less than the UK corporation tax statutory rate of 28%, primarily as a result of the net favourable effect of different statutory tax rates applying to profits generated by non-UK subsidiaries.

Assets under management

Total AUM at 30 June 2010 were £56.4bn, £1.7bn or 3% below AUM at 31 December 2009, whilst the FTSE 100 closed 9% lower at 30 June 2010 than at 31 December 2009. Average AUM in 1H10 was 19% above 1H09. The Group generated higher margin net inflows of £1.0bn, offset by lower margin outflows from Cash funds (£0.2bn), NSIM (£0.5bn) and Pearl (£1.6bn). Outflows from Pearl will have no material impact on expected future revenues due to the fee compensation arrangements in place with this client.

Summary of movements in AUM

	Opening AUM 1 January 2010 £bn	Net flows 1H10 £bn	Market/FX 1H10 £bn	Closing AUM 30 June 2010 £bn	Management fees11H10 £m	Management fees11H09 £m
Higher margin
Investment Trusts	3.5	(0.1)	(0.1)	3.3	7.6	5.4
Horizon funds	3.4	0.6	0.1	4.1	17.1	9.8
UK Wholesale	10.3	0.1	(0.5)	9.9	39.2	22.3
US Wholesale	3.2	0.1	(0.1)	3.2	13.9	8.3
Hedge funds	0.9	0.2	-	1.1	8.7	4.7
Property (non-US)2	7.6	0.2	-	7.8	18.5	15.4
Property (US)	1.3	-	0.1	1.4	2.8	3.2
Private Equity3	0.6	-	0.1	0.7	2.8	5.9
Structured Products	1.8	(0.1)	(0.1)	1.6	1.5	1.8
Higher margin total	32.6	1.0	(0.5)	33.1	112.1	76.8

Lower margin and Pearl4
Institutional clients	13.2	-	(0.1)	13.1	-	-
Cash funds	2.3	(0.2)	-	2.1	-	-
NSIM	2.0	(0.5)	-	1.5	-	-
Lower margin total	17.5	(0.7)	(0.1)	16.7	-	-
Pearl	8.0	(1.6)	0.2	6.6	-	-
Lower margin and Pearl total	25.5	(2.3)	0.1	23.3	25.3	21.4
Total	58.1	(1.3)	(0.4)	56.4	137.4	98.2

Notes

1 Net of commission expense.

2 Property AUM (at 30 June 2010) excludes £1.0bn of UK Wholesale funds and £0.4bn of Pearl Property managed funds.

3 Private Equity AUM (based on 31 March 2010 valuations) excludes £0.2bn of Pearl Private Equity managed funds.

4 The composition of lower margin and Pearl management fees by category is not shown due to client confidentiality.

AUM by asset class

	30 June 2010 Unaudited	31 December 2009 Audited
	£bn	£bn
Equities	28.9	26.9
Fixed Income	17.0	21.0
Property	9.6	9.4
Private Equity	0.9	0.8
Total AUM	56.4	58.1

The table above shows AUM by asset class and includes cash holdings within products in Fixed Income AUM and fund of fund holdings in Equities AUM. Within Fixed Income, £2.1bn (FY09: £2.3bn) relates to Cash funds. Property asset class AUM excludes £0.5bn of cash holdings (FY09: £0.3bn) and £0.5bn of fund of fund holdings (FY09: £0.6bn) held in Property related products.

Summary of Investment performance

Funds at/above benchmark1	1 year %	3 years %
Summary:
Equities	69	70
Fixed Income	72	76
Property2	22	10
Total	62	63

Higher margin
Investment Trusts	56	33
Horizon funds	80	87
UK Wholesale3	91	49
US Wholesale	15	98
Hedge funds	41	77
Property2	22	10
Total higher margin	55	49

Lower margin
Institutional
Enhanced index	100	90
Fixed Income	71	68
Balanced/active equity	79	81
Total lower margin	83	82
New Star Institutional Managers	99	69

Notes

1 Asset weighted of funds measured over one and three years to 30 June 2010.

2 UK/Europe Property performance is based on 2009 IPD Annual benchmarks. For consistency US Property performance is based on the same periods.

3 Following the consolidation and rebranding of the UK Wholesale range, 3 year investment performance includes legacy New Star funds.

The Group's one year investment performance continues to be good with 69% of Equity and 72% of Fixed Income funds achieving or beating their benchmarks. UK Wholesale performance has improved with 91% of assets outperforming over one year. Three year UK Wholesale performance of 49% of assets outperforming has been adversely impacted by legacy New Star funds. Excluding these funds, 80% of UK Wholesale assets would have been at or above benchmark. Horizon performance has also improved with 80% and 87% of assets outperforming over one and three years respectively. The US Wholesale fund range has maintained its excellent track record with 98% of assets outperforming over three years. However, one year performance is disappointing with 15% of assets outperforming, where the Henderson International Opportunities fund, representing 68% of US Wholesale assets, underperformed. In the Institutional business, all fund classes continued to perform well over one and three years, with 100% of enhanced index funds outperforming over one year and more than 70% of Fixed Income funds outperforming over one year. Hedge fund performance suffered in 1H10 causing the one year numbers to drop, however three year performance remains good with 77% of funds outperforming.

In 1H10 the 2009 IPD Annual Benchmarks were published for Pan-European Property funds. The published results did not differ from the Group's estimates at year end, which are included in the table above. For relative benchmarked assets the scores were 49% and 21% over one and three years respectively, but reducing to 22% and 10% over one and three years respectively when including funds with absolute return benchmarks. The scores are disproportionately impacted by falling markets making it difficult to outperform absolute return benchmarks. The 1H10 results are not yet available, however a marked improvement in 2010 is anticipated.

New Star Institutional Managers performance has improved significantly during the period with 99% and 69% of assets outperforming over one and three years respectively.

The number of buy rated products increased by 19 to 142 during the period. In addition, the Group won a total of 35 investment performance awards during 1H10 (1H09: 29), including:

·; Pensions and Investment Provider Award - Best UK Fixed Income Manager of the Year;

·; Professional Pensions Award - Best Fixed Income Manager of the Year;

·; Investment Week Investment Trust of the Year Awards - Best Group of the Year; and

·; Lipper Equity Sector Information Technology category Award (UK) - Global Technology Fund as Best Fund over 10 years.

Business management

The Group is a single segment investment management business governed by the Board, with sole discretion for setting the strategic direction of the business. Whilst the Group's Executive Directors and key management are responsible for, and have discretion over, the day to day management of the business and support functions, all strategic, financial management and key operational decisions are taken centrally by the Board. The Board receives reports across product lines, distribution channels and geographic regions; however, financial performance and allocation of capital are determined and reported centrally.

Business strategy

The Group continues to focus on its strategy of growing its existing business through organic growth and, where there are attractive opportunities, through acquisitions and partnerships in markets where the Group is looking to build its distribution or investment capabilities. During 1H10 the Group entered into discussions with SunTrust Banks, Inc. regarding the potential acquisition of RidgeWorth. Even though these discussions did not result in the acquisition of RidgeWorth, the Group will continue to look at opportunities which meet its strategic and financial objectives.

Global Listed Assets

This team comprises 378 people, 125 of whom are investment professionals primarily located in London, with some investment staff in Edinburgh, Singapore and Amsterdam. Distribution professionals are centred in London (and regionally within the UK), across Continental Europe, North America and Asia.

The product range consists of Wholesale funds (Luxembourg SICAVs, US Mutual funds, UK OEICs and Unit Trusts), Hedge funds, Investment Trusts, Institutional segregated and pooled funds (including Pearl assets), Cash funds and Structured Products.

The Group distributes its products across geographies and business teams. Whilst each sales team focuses on their core products, they are structured to capitalise on opportunities for cross selling. This reduces the Group's exposure to individual product lines and enables the business to deliver attractive, streamlined and client focused product solutions in differing market conditions and geographies.

The Board continues to regard the Group's core markets as the UK and Europe, with growing businesses in North America and Asia. The New Star acquisition has added significantly to Henderson's market share in the UK and has provided a scalable platform for growth in the UK Wholesale market, offering higher margin products in core equity, fixed income, multi-manager and alternative investment capabilities.

The Horizon SICAV range has also seen strong net inflows across a series of funds, most notably into Global Technology and Pan European Equity. In order to further capitalise on the strong investment performance across the SICAV range, our distribution capability across Europe is being expanded to both enhance existing regional coverage and to develop opportunities in new territories. During this period we have also expanded our distribution capabilities into new regions such as the Nordic countries and Chile.

The UK Wholesale range has undergone a number of changes during the period. Administration platforms for the Henderson and New Star funds were successfully consolidated to a single platform and all New Star funds were rebranded as Henderson in April 2010. In addition, the product range, particularly UK Equity, Fixed Income and multi-manager, has been rationalised and refocused in order to deliver clear client propositions. Several fund mergers and changes to fund strategies, names and investment powers have been implemented, with a number of further changes due in 2H10, subject to client consent and regulatory approval. The marketing campaign focused on the UK Wholesale market continues with media-wide, product specific promotions for Strategic Bond, Asian Dividend Income and Multi-Manager Income and Growth. This continued investment in both product and marketing has generated positive net inflows in 1H10. Funds recording strong net inflows include Strategic Bond, European Special Situations and multi-manager funds.

With net inflows into the Hedge fund range, we continue to build on the sales delivered in 2H09.

In North America, distribution resources, focused on Institutional and Hedge funds, have been increased with the resultant impact feeding into net flows in 1H10 and an increased pipeline in this region.

We continue to improve our distribution capabilities in China and Japan by developing regional distribution agreements and building core products for these markets.

At 30 June 2010, the net pipeline of new institutional mandates won but not yet funded was £0.3bn, mainly relating to new Fixed Income mandates. Pearl notified withdrawals at 30 June 2010 were £1.4bn; however, these will have no material impact on expected future revenues due to the fee compensation arrangements in place with this client.

Listed Asset performance fees of £24.3m in 1H10 are significantly higher than the £6.8m recognised in 1H09, mainly due to Fixed Income Institutional client mandates, a number of which significantly outperformed their benchmarks over the relevant measurement period. The Fixed Income business has received several awards over the period including Professional Pensions Fixed Income Manager of the Year, and the Pension and Investment Provider Award - Best UK Fixed Income Manager of the Year.

Following a review of the UK Wholesale range, investment management of the £0.2bn Henderson International Property Fund (previously named the New Star International Property Fund) was transferred to Aviva Investors on 2 August 2010.

Consistent with our client-focused objectives, we have recently appointed Arno Kitts, who has responsibility for large parts of our distribution footprint, to the senior management team to ensure that our distribution strategies, centred around our clients, help drive the future success of the business.

Equity and fixed income products returned strong performance in 1H10. Key institutional highlights were the strong performance in EAFE along with enhanced equity. The retail Horizon funds (particularly European equity, technology, property equity securities) were well ahead of benchmark, and in the UK, multi-manager continued to deliver good performance. Hedge fund performance was somewhat disappointing, and performance in the US mutual fund range was more volatile than usual. Fixed Income funds had a more challenging 2Q10, whilst longer term performance remains strong across almost all product ranges.

Global Property

This team comprises 198 people, 80 of whom are investment professionals located in London, Madrid, Paris, Frankfurt, Vienna, Milan, Singapore, Hong Kong, Beijing, Chicago and Hartford. Distribution professionals are centred in London, Frankfurt, Singapore and Hartford. These offices also distribute to other markets e.g. Netherlands and Australia.

Global Property AUM, comprising institutional client assets and the UK Wholesale funds, rose from £10.3bn to £10.6bn in 1H10. AUM as at 30 June 2010 includes investments by Pearl in closed-ended Property funds of £0.4bn (31 December 2009: £0.4bn) and £1.0bn of UK Wholesale assets. Net inflows were £0.2bn, excluding net outflows of £0.1bn from UK Wholesale funds. The Property product range consists of closed-ended funds, segregated accounts, open-ended funds and UK Wholesale funds. The majority of funds are closed-ended and have seven to ten year life spans with early exit only possible on a matched bargain basis.

At 30 June 2010, the pipeline of client committed, but uninvested, capital was £1.4bn (FY09: £1.4bn). During 1H10, £0.3bn of capital has been invested, with £0.3bn being added to the pipeline through new fund launches. Property markets have generally started to improve, however the Property investment team continues to be very selective in determining those properties in which they choose to invest, given the shortage of good quality investment grade properties on the market. While this is good for performance it does mean that utilisation of the current pipeline will continue into 2011.

During 1H10, the Central London Office Fund II was launched with a first close of £90m. Investment of this commitment is expected to start in 2H10. In addition, a significant segregated mandate with a Canadian investor was won with the first investment made in 1H10. Further, in 1H10 the Henderson Indirect Property Fund (Europe) was reopened.

Whilst there have been positive market valuation movements across most markets during 1H10, similar rises in 2H10 are not expected, particularly in the UK and European markets, as these stabilise.

Global Private Equity

The team comprises 25 people located in London, Singapore, Hong Kong, Beijing and New Delhi.

The product range consists of Infrastructure, Asia Private Equity and Private Equity Fund of Funds. Total AUM grew by £0.1bn in 1H10 to £0.7bn¹, as a result of increases in the value of the funds.

In the infrastructure business a number of initiatives were successfully concluded in 2009, and during 2010 the team has continued to implement further initiatives that should contribute to rises in portfolio values. Over the last two quarterly valuations the two funds invested in this sector have both increased in value. Henderson PFI Secondary Fund L.P. ("Fund I") has grown by 4.6% and is valued at 1.0x². Henderson PFI Secondary Fund II L.P. ("Fund II") has grown by 23.1% and is valued at 0.4x³.

Despite the recent improvements, the performance since inception of Fund II in particular remains below expectations. A number of investors have raised with us certain concerns specific to their particular funds and we continue to correspond with them on these issues. Some clients invested in Fund II have written to us threatening litigation, although, as at today's date, no legal proceedings have been served. The Group has thoroughly investigated the issues raised and is confident that it has no legal liability in respect of these issues and will vigorously defend any proceedings which may be brought. We continue to communicate regularly with clients on our progress on the restoration of performance in these funds.

Other parts of the Private Equity business continue to perform well. The first Asia fund has delivered a net internal rate of return (IRR) of 15% per annum over a nine year period. The remaining investments of that fund, which are all listed companies in India, have on average increased in value by 5% in 1H10.

The Fund of Funds business has continued its good performance. The unlisted Global Fund of Funds, which was fully invested by the end of 2003, has now delivered a net IRR of 13% per annum. The listed Fund of Funds vehicle, Henderson Private Equity Investment Trust plc, has performed steadily during 1H10.

Notes

1 As at 30 June 2010, based on 31 March 2010 valuations.

2 As at 31 March 2010. Total client commitments to this fund are £330m.

3 As at 31 March 2010. Total client commitments to this fund are £573.5m.

Pension schemes

The Group has three types of pension schemes. A defined benefit scheme and a defined contribution scheme, together forming the Henderson Group Pension Scheme (the Pension Scheme), and a number of smaller unapproved pension top-up schemes for previous executives.

There was a net surplus in the Pension Scheme of £113.8m at 30 June 2010 (31 December 2009: £90.0m). The increase in the Pension Scheme surplus during 1H10 is due to better than expected returns on the Pension Scheme asset portfolio and a lower assumption for future price inflation, based on the Bank of England's published price inflation curve, set at 3.5% per annum. (31 December 2009: 3.7% per annum). These increases were partially offset by a lower discount rate used to value the Pension Scheme's liabilities for accounting purposes, set by reference to AA-rated corporate bonds with approximately 21 years duration, down to 5.5% per annum from 5.6% per annum.

The Group has reached agreement with the Pension Scheme trustee regarding the results of the 2008 triennial valuation, the statement of funding principles and the schedule of contributions. The triennial valuation has resulted in no deficit funding contributions (being made or to be made) by the Group.

The liability in respect of the Group's unapproved pension schemes amounted to £6.3m at 30 June 2010 (31 December 2009: £6.1m).

Regulatory requirements

The Group is subject to regulatory oversight and inspection by the FSA and other international regulatory bodies. Consequently, the Group's internal controls, governance, procedures and capital are reviewed on a continuous basis. Both management and the Board ensure that the Group is compliant with its regulatory obligations at all times. The Group has a waiver from consolidated supervision in place, valid until April 2014. The regulatory capital surplus of the Group under the Parent Financial Holding Company test amounted to £306m at 30 June 2010 (31 December 2009: £323m).

Related party transactions

No related party transactions that materially affect the financial position or performance of the Group have taken place during the period, and there have been no changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the six months ended 30 June 2010.

Dividends

The Board has declared an interim dividend of 1.85 pence per share (1H09: 1.85 pence per share), in line with the stated formula where the interim dividend equates to 30% of the total dividend for the previous year, assuming the Group has sufficient resources to fund the dividend. The interim dividend will be paid on 24 September 2010 to shareholders on the register on 3 September 2010.

Outlook

Although the Group expects continued volatility in 2H10, it is optimistic about market returns in the medium term. The Group will remain alert to the potential impact of regulatory changes on its business as regulators and governments seek to rebuild trust and confidence. Notwithstanding the challenges faced by markets and the industry, the Group is well positioned to launch new products and to continue to grow its business in all the channels and geographies where it operates.

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial condition, results and business of the Group. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in the future. The Group's actual future results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

Risk management

The Board regards the effective management of its risks as being central to the successful achievement of the Group's business strategy and has therefore taken the decision to establish a separate Board Committee for the management of risk. In addition, to ensure the Group has in place an effective framework to enable the management of risk at all levels within the organisation, the Board has appointed a Chief Risk Officer reporting directly to the Board Risk Committee and on a day to day basis to the Chief Executive.

This framework will continue to ensure that business objectives are met without exceeding the Group's risk appetite, and be subject to continuous review ensuring the Board recognises both new and emerging risks in the business.

The Group's risk management and capital disclosures are in accordance with chapter 11 of the FSA's Prudential Sourcebook for Banks, Building Societies and Investment Firms (Pillar 3 disclosures) and are available on the Group's website at www.henderson.com.

Key risks and their mitigation

The key risks within the Group fall into a number of distinct categories and the means adopted to mitigate them is both varied and always relevant to the particular risk concerned. Information regarding the key risks and their mitigation in 2009 is set out in the Annual Report and Accounts as at 31 December 2009.

Whilst the Group's risk framework is designed to ensure that risks are mitigated appropriately, it is recognised within the framework that it is both necessary and desirable that the business accepts a level of risk if it is to successfully achieve the corporate strategy. However, it is also recognised that the Group must operate within boundaries that are set so as to ensure that the level of risk is appropriate in terms of both the nature of Henderson's business and its financial strength.

The Board Risk Committee has therefore put in place a Group risk appetite statement (RAS), which addresses all of the key risks in the business. The RAS establishes quantified limits for those risks where such an approach is appropriate; and it sets the tone for the risk culture that the Board wishes to operate within the Group.

The RAS is based on the seven main themes which are regarded as essential to the successful delivery of the corporate strategy: performance and growth, covering sustainable investment performance and long-term growth in both revenues and AUM; client focus, covering our commitment to providing our clients with service that meets their expectations; people, the employment of talented and committed people, appropriately rewarded and motivated; operational excellence, delivering the highest standards of service; financial stability, maintaining financial strength, which is essential in delivering shareholders an acceptable return; trust, being trusted by our clients as a reliable and respected investment manager; andregulatory and legal compliance, ensuring the business, which operates in a number of different countries, at all times meets the laws and regulatory rules of the countries concerned. Each of the key risks covered within the RAS is associated with one of these seven themes.

Historical Financial Summary

Consolidated financial results

	1H10	1H09	FY09	FY08	FY07	FY06
	Unaudited	Unaudited	Audited	Audited	Audited	Audited
	£m	£m	£m	£m	£m	£m
Income
Management fees (net of commissions)	137.4	98.2	226.8	221.9	258.0	221.2
Transaction fees	16.6	10.4	24.9	16.5	17.8	24.6
Performance fees	24.6	8.3	31.6	32.0	86.9	65.1
Total fee income	178.6	116.9	283.3	270.4	362.7	310.9
Finance income	0.9	2.2	4.3	15.3	25.7	25.2
Total income	179.5	119.1	287.6	285.7	388.4	336.1
Operating costs	(126.6)	(87.6)	(205.0)	(193.0)	(273.7)	(253.9)
Finance costs	(4.4)	(4.4)	(8.9)	(12.3)	(8.0)	-
Total expenses	(131.0)	(92.0)	(213.9)	(205.3)	(281.7)	(253.9)
Underlying profit before tax	48.5	27.1	73.7	80.4	106.7	82.2
Intangible amortisation and void property finance charge	(6.9)	(3.5)	(10.7)	(0.1)	-	-
Recurring profit before tax	41.6	23.6	63.0	80.3	106.7	82.2
Non-recurring items	-	(26.5)	(47.5)	(97.3)	40.5	(7.8)
Discontinued items	-	-	-	-	-	(2.0)
Profit/(loss) before tax	41.6	(2.9)	15.5	(17.0)	147.2	72.4
Taxation on underlying profit	(10.5)	(5.7)	(16.3)	(8.6)	(12.4)	(11.1)
Taxation on intangible amortisation and void property finance charge	1.9	1.0	3.0	-	-	-
Taxation on non-recurring items	-	7.0	12.3	4.8	(2.6)	-
Taxation on discontinued items	-	-	-	-	-	(0.1)
Total taxation	(8.6)	2.3	(1.0)	(3.8)	(15.0)	(11.2)
Profit/(loss) after tax	33.0	(0.6)	14.5	(20.8)	132.2	61.2


Financial ratios and metrics
Operating margin1	29.1%	25.1%	27.6%	28.6%	24.5%	18.3%
Compensation ratio2	44.5%	42.9%	43.9%	44.3%	49.8%	51.4%
Average number of full-time employees	928	912	933	920	921	893
Assets under management (AUM) at period end (£bn)	56.4	53.0	58.1	49.5	59.2	61.9
Average AUM for the period (£bn)	58.2	49.1	53.0	53.7	61.1	65.1
Total fee margin (bps)	61.4	47.6	53.5	50.4	59.4	47.7
Management fee margin (bps)	47.2	40.0	42.8	41.3	42.2	33.9
Net margin3 (bps)	16.7	11.0	13.9	15.0	17.5	12.6

Basic and diluted earnings per share (EPS)
Weighted average number of ordinary shares for basic EPS (m)	788.1	739.0	759.3	660.6	804.6	1,085.2
Weighted average number of ordinary shares for diluted EPS (m)	827.0	791.4	809.4	715.0	847.5	1,102.6
Basic on underlying profit after tax attributable to equity holders of the parent (pence)	4.7	2.9	7.5	10.8	11.7	6.4
Basic (pence)	4.1	(0.1)	1.8	(3.2)	16.4	5.6
Diluted on underlying profit after tax attributable to equity holders of the parent (pence)	4.5	2.7	7.0	10.0	11.1	6.3
Diluted (pence)	3.9	(0.1)	1.7	(3.2)	15.6	5.5

Ordinary dividend per share (pence)	1.85	1.85	6.1	6.1	6.1	3.15

Investment performance4
Funds at or exceeding benchmark over 1 year	62%	62%	70%	41%	48%	60%
Funds at or exceeding benchmark over 3 years	63%	66%	64%	49%	54%	45%

Notes

1 Total fee income less operating costs, divided by total fee income.

2 Employee compensation and benefits divided by total income.

3 Based on underlying profit before tax.

4 Asset weighted of funds measured over one and three years to 30 June or 31 December, as appropriate (except Property funds in 1H10 where FY09 data is used).

Independent Review Report to the members of Henderson Group plc

Introduction

We have been engaged by Henderson Group plc (the Company) to review the condensed set of financial statements in the Interim Report and Accounts for the six months ended 30 June 2010 which comprises the Interim Condensed Consolidated Income Statement, Interim Condensed Consolidated Statement of Comprehensive Income, Interim Condensed Consolidated Statement of Financial Position, Interim Condensed Consolidated Statement of Changes in Equity, Interim Condensed Consolidated Statement of Cash Flows and the notes to the Interim Condensed Consolidated Financial Statements from pages 20 to 35. We have read the other information contained in the Interim Report and Accounts and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in the International Standard on Review Engagements (ISRE) 2410 (UK and Ireland), "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The Interim Report and Accounts is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Interim Report and Accounts in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this Interim Report and Accounts has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Interim Report and Accounts based on our review.

Review work performed

We conducted our review in accordance with ISRE 2410 (UK and Ireland), "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and therefore does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Review conclusion

On the basis of our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Interim Report and Accounts for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

17 August 2010

Interim Condensed Consolidated Income Statement

For the six months ended 30 June 2010

		6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	Notes	£m	£m	£m

Income
Gross fee income and commissions	3	236.2	148.5	362.0
Finance income		0.9	2.2	4.3
Gross income		237.1	150.7	366.3
Commissions and fees payable		(57.6)	(31.6)	(78.7)
Total income		179.5	119.1	287.6

Expenses
Operating costs		(124.9)	(86.0)	(201.8)
Depreciation		(1.7)	(1.6)	(3.2)
Total expenses before finance costs		(126.6)	(87.6)	(205.0)
Finance costs		(4.4)	(4.4)	(8.9)
Total expenses		(131.0)	(92.0)	(213.9)

Underlying profit before tax		48.5	27.1	73.7
Intangible amortisation	9	(5.8)	(2.9)	(8.7)
Void property finance charge		(1.1)	(0.6)	(2.0)
Recurring profit before tax		41.6	23.6	63.0
Non-recurring items	5	-	(26.5)	(47.5)
Profit/(loss) before tax		41.6	(2.9)	15.5
Taxation	6	(8.6)	2.3	(1.0)
Profit/(loss) after tax		33.0	(0.6)	14.5

Attributable to:
Equity holders of the parent		32.3	(0.6)	13.8
Minority interests		0.7	-	0.7
		33.0	(0.6)	14.5
Dividends
Dividends declared and charged to equity in the period	7	34.1	33.6	48.3
Dividends declared post balance sheet date	7	15.3	15.3	35.1

Basic and diluted earnings per share (pence)
Basic	8.2.2	4.1	(0.1)	1.8
Diluted	8.2.2	3.9	(0.1)	1.7

Interim Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2010

		6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	Notes	£m	£m	£m

Profit/(loss) after tax		33.0	(0.6)	14.5

Other comprehensive income
Exchange differences on translation of foreign operations		0.5	(2.1)	(1.2)
Available-for-sale financial assets:
Net gains/(losses) on revaluation		1.1	(7.4)	(8.2)
Taxation effect of movements	6	(0.2)	-	(0.6)
Exchange differences on translation		-	(2.9)	(3.2)
Translation reserve transfer on sale		-	(1.1)	(1.1)
Translation reserve transfer on impairment		-	-	0.5
Revaluation reserve transfer on sale		-	5.6	5.6
Revaluation reserve transfer on impairment		-	-	6.8
Actuarial gains/(losses):
Actuarial gains/(losses) on defined benefit pension schemes	10	19.1	(52.7)	(69.7)
Taxation effect of actuarial (gains)/losses	6	(5.4)	14.7	19.4
Actuarial gains on post-retirement medical benefits		-	-	0.1
Other comprehensive income/(loss) after tax		15.1	(45.9)	(51.6)
Total comprehensive income/(loss)		48.1	(46.5)	(37.1)

Attributable to:
Equity holders of the parent		47.4	(46.5)	(37.8)
Minority interests		0.7	-	0.7
		48.1	(46.5)	(37.1)

Interim Condensed Consolidated Statement of Financial Position

As at 30 June 2010

		30 June 2010 Unaudited	30 June 2009 Unaudited	31 December 2009 Audited
	Notes	£m	£m	£m

Non-current assets
Intangible assets	9	360.4	371.9	366.2
Investments accounted for using the equity method	15	5.7	6.1	6.4
Plant and equipment		22.2	23.9	23.0
Retirement benefit asset	10.1	113.8	102.7	90.0
Deferred tax assets		14.4	12.4	15.4
Deferred acquisition and commission costs		54.7	20.9	43.6
		571.2	537.9	544.6

Current assets
Available-for-sale financial assets		44.1	37.3	41.7
Financial assets at fair value through profit and loss		1.2	0.7	0.9
Trade and other receivables		161.9	238.5	146.8
Deferred acquisition and commission costs		45.3	19.1	33.4
Cash and cash equivalents		100.5	92.9	119.0
		353.0	388.5	341.8

Total assets		924.2	926.4	886.4

Non-current liabilities
Debt instrument in issue	11	180.5	183.3	181.9
Retirement benefit obligations	10.2	6.3	4.9	6.1
Provisions	12	30.1	37.7	35.0
Deferred tax liabilities		63.6	62.2	51.6
Deferred income		54.1	18.6	42.0
		334.6	306.7	316.6
Current liabilities
Trade and other payables		201.8	290.0	211.5
Provisions	12	22.0	14.5	19.5
Deferred income		45.7	19.9	34.1
Current tax liabilities		24.7	11.5	22.5
		294.2	335.9	287.6

Total liabilities		628.8	642.6	604.2

Net assets		295.4	283.8	282.2

Capital and reserves
Share capital		103.3	103.1	103.1
Share premium		252.3	250.5	250.7
Own shares held		(42.5)	(49.9)	(51.6)
Translation reserve		6.7	5.1	6.2
Revaluation reserve		3.1	(4.0)	2.0
Profit and loss reserve		(29.2)	(21.3)	(29.2)
Shareholders' equity		293.7	283.5	281.2
Minority interests		1.7	0.3	1.0
Total equity		295.4	283.8	282.2

Approved by the Board of Directors on 17 August 2010.

Interim Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2010

	Share capital	Share premium	Own shares held	Translation reserve	Revaluation reserve	Profit and loss reserve	Minority interests	Total equity
	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2009	90.7	195.1	(74.2)	11.2	(2.2)	72.2	0.3	293.1
Total comprehensive loss	-	-	-	(6.1)	(1.8)	(38.6)	-	(46.5)
Dividends paid to equity shareholders	-	-	-	-	-	(33.6)	-	(33.6)
Purchase of own shares	-	-	(5.3)	-	-	-	-	(5.3)
Vesting of share schemes	-	-	29.6	-	-	(29.6)	-	-
Share placing	9.1	38.0	-	-	-	-	-	47.1
Share issue costs	-	(1.3)	-	-	-	-	-	(1.3)
Shares issued on acquisition of New Star	3.2	18.0	-	-	-	-	-	21.2
Issue of shares for Sharesave Scheme (SAYE)	0.1	0.4	-	-	-	-	-	0.5
Issue of shares for Buy As You Earn Share Plan (BAYE)	-	0.3	-	-	-	(0.3)	-	-
Movement in equity-settled share scheme expenses	-	-	-	-	-	8.6	-	8.6
At 30 June 2009	103.1	250.5	(49.9)	5.1	(4.0)	(21.3)	0.3	283.8
Total comprehensive income	-	-	-	1.1	6.0	1.6	0.7	9.4
Dividends paid to equity shareholders	-	-	-	-	-	(14.7)	-	(14.7)
Purchase of own shares	-	-	(3.7)	-	-	-	-	(3.7)
Vesting of share schemes	-	-	2.0	-	-	(2.0)	-	-
Issue of shares for SAYE	-	0.1	-	-	-	-	-	0.1
Issue of shares for BAYE	-	0.1	-	-	-	(0.1)	-	-
Movement in equity-settled share scheme expenses	-	-	-	-	-	7.3	-	7.3
At 31 December 2009	103.1	250.7	(51.6)	6.2	2.0	(29.2)	1.0	282.2
Total comprehensive income	-	-	-	0.5	1.1	45.8	0.7	48.1
Dividends paid to equity shareholders	-	-	-	-	-	(34.1)	-	(34.1)
Purchase of own shares	-	-	(11.1)	-	-	-	-	(11.1)
Vesting of share schemes	-	-	20.2	-	-	(20.2)	-	-
Issue of shares for SAYE	-	0.1	-	-	-	-	-	0.1
Issue of shares for BAYE	0.2	1.5	-	-	-	(0.8)	-	0.9
Movement in equity-settled share scheme expenses	-	-	-	-	-	9.3	-	9.3
At 30 June 2010	103.3	252.3	(42.5)	6.7	3.1	(29.2)	1.7	295.4

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2010

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m
Cash flows from operating activities
Profit/(loss) before tax	41.6	(2.9)	15.5
Adjustments to reconcile profit/(loss) before tax to net cash flows from operating activities:
- depreciation of plant and equipment	1.7	1.6	3.2
- intangible amortisation	5.8	2.9	8.7
- share-based payment charges	7.9	8.6	15.9
- net deferred acquisition and commission costs and deferred income amortisation	0.2	(1.4)	(1.7)
- contributions to the Henderson Group Pension Scheme in excess of costs recognised	(4.5)	(2.7)	(5.6)
- share of profit of associates and joint ventures	(1.2)	(0.4)	(1.4)
- void property finance charge	1.1	0.6	2.0
- debt instrument in issue interest expense	4.2	4.4	8.8
- impairment of available-for-sale financial assets	-	-	7.5
- loss on disposal of available-for-sale financial assets	-	1.7	2.0
Cash flows from operating activities before changes in operating assets and liabilities	56.8	12.4	54.9
Changes in operating assets and liabilities	(28.5)	(42.8)	(27.7)
Net tax received/(paid)	3.1	(0.1)	(1.0)
Net cash flows from operating activities	31.4	(30.5)	26.2

Cash flows from investing activities
Proceeds from sale of available-for-sale financial assets	7.7	29.8	35.1
Dividends from associates and distributions from joint ventures	1.8	0.7	1.3
Purchases of:
- available-for-sale financial assets	(6.8)	(2.6)	(12.5)
- plant and equipment	(0.5)	(1.9)	(3.6)
- intangible assets	-	(0.4)	(0.5)
Acquisition of subsidiaries, net of cash acquired	-	(52.9)	(54.5)
Investments in associates and joint ventures	-	(0.4)	(0.4)
Net cash flows from investing activities	2.2	(27.7)	(35.1)

Cash flows from financing activities
Proceeds from issue of shares	0.1	46.3	46.4
Purchase of own shares	(11.1)	(5.3)	(9.0)
Dividends paid to equity shareholders	(34.1)	(33.6)	(48.3)
Interest paid on debt instrument in issue	(5.7)	(5.7)	(11.4)
Net cash flows from financing activities	(50.8)	1.7	(22.3)
Effects of exchange rate changes	(1.3)	(2.7)	(1.9)
Net decrease in cash and cash equivalents	(18.5)	(59.2)	(33.1)
Cash and cash equivalents at beginning of period	119.0	152.1	152.1
Cash and cash equivalents at end of period	100.5	92.9	119.0

Notes to the Interim Condensed Consolidated Financial Statements

1 Corporate information

The Company is a public limited company incorporated in Jersey and tax resident in the Republic of Ireland. The Company's ordinary shares are traded on the London Stock Exchange and CHESS Depositary Interests are traded on the ASX.

The Interim Condensed Consolidated Financial Statements of the Group for the six months ended 30 June 2010 were authorised for issue by the Board of Directors on 17 August 2010.

The results for the six months ended 30 June 2010 and the six months ended 30 June 2009 are unaudited but have been reviewed by the auditors, Ernst & Young LLP. These do not constitute statutory accounts.

The results for the full year ended 31 December 2009 have been taken from the Henderson Group plc Annual Report and Accounts, prepared under International Financial Reporting Standards as adopted by the European Union and IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB). The auditors have reported on the 2009 financial statements in the Annual Report and Accounts and their report was unqualified. The Henderson Group plc Annual Report and Accounts for the year ended 31 December 2009 has been filed with the Jersey Financial Services Commission Companies Registry.

2 Basis of preparation and significant accounting policies

Basis of preparation

The Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2010 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

The Interim Condensed Consolidated Financial Statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with Henderson Group plc's Annual Report and Accounts for the year ended 31 December 2009.

The Directors are satisfied that the Company has and will maintain sufficient financial resources to enable it to continue operating in the foreseeable future and, therefore, they continue to adopt the going concern basis in preparing the Interim Report and Accounts.

Significant accounting policies

The accounting policies adopted in the preparation of the Interim Condensed Consolidated Financial Statements are consistent with those followed in the preparation of Henderson Group plc's Annual Report and Accounts for the year ended 31 December 2009.

The following amended standards were approved by the IASB and are mandatory for all financial statements with periods ended on or after 1 July 2009:

·; IFRS 3 Business Combinations; and

·; IAS 27 Consolidated and Separate Financial Statements.

The adoption of the amended standards in the period has not had any impact on the Interim Condensed Consolidated Financial Statements or performance of the Group.

Change in presentation

Certain comparatives in the Interim Condensed Consolidated Income Statement have been restated. The change relates to performance fee bonuses which have been disclosed in employee compensation and benefits. The performance fee bonuses had previously been deducted in determining total income.

3 Segmental information

Group operating income and net assets

The Group is an investment manager, operating throughout Europe with operations in North America and Asia. It manages a broad range of actively managed investment products for institutional and retail investors, across multiple asset classes, including equities, fixed income, property, cash, hedge and private equity. Management operates across product lines, distribution channels and geographic regions. All investment product types are sold in most, if not all, of these regions, and are managed in various locations.

Information is reported to the chief operating decision maker, being the Board, on an aggregated basis. Strategic and financial management decisions are determined centrally by the Board and, on this basis, the Group is a single segment investment management business.

Entity-wide disclosures

Gross fee income and commissions by product

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m
UK Wholesale	89.3	47.3	121.5
Institutional and Cash funds	35.0	13.4	41.7
Horizon funds	28.7	16.3	39.7
Property	28.2	27.7	52.6
US Wholesale	17.0	11.2	25.3
Hedge funds	10.9	7.3	19.4
Other	27.1	25.3	61.8
	236.2	148.5	362.0

Geographic information

Gross fee income and commissions from clients

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m
UK	186.0	111.4	281.5
Luxembourg	23.7	9.6	22.6
US	14.6	10.8	26.0
Singapore	3.4	2.9	7.0
Ireland	1.2	1.2	3.0
Other	7.3	12.6	21.9
	236.2	148.5	362.0

The geographical revenue information is split according to the country in which the revenue is generated, not necessarily where the client is based.

The Group does not have a single client which accounts for more than 10% of revenues.

Non-current assets

	30 June 2010 Unaudited	30 June 2009 Unaudited	31 December 2009 Audited
	£m	£m	£m
UK	433.2	413.9	428.6
Ireland	-	-	-
Other	9.8	8.9	10.6
	443.0	422.8	439.2

Non-current assets for this purpose consist of intangible assets, investments accounted for using the equity method, plant and equipment and deferred acquisition and commission costs.

4 Seasonality of operations

The Group's revenue streams are not generally seasonal in nature, with management fee and investment income accruing evenly during the year. Performance fees are recognised when the prescribed performance hurdles have been achieved and it is probable that the fee will crystallise as a result. The hurdles coincide with the underlying fund year ends which are spread throughout the year.

5 Non-recurring items

The non-recurring items recorded in the consolidated income statement comprise the following:

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Insurance recoveries	-	-	14.3
New Star integration costs	-	(26.5)	(33.8)
Infrastructure fund charge	-	-	(20.7)
Impairment of available-for-sale financial assets - property seed capital	-	-	(7.3)
	-	(26.5)	(47.5)

Six months to 30 June 2010

There have been no non-recurring items incurred in the six months ended 30 June 2010.

Six months to 30 June 2009

New Star integration costs

On 9 April 2009, the Group's acquisition of New Star was completed. An expense of £26.5m was incurred in relation to the integration of New Star during 1H09. These integration costs included costs in respect of fund mergers, rebranding, office relocation and reorganisation, transition of outsourced retail and investment operations and staff related expenses.

12 months to 31 December 2009

Insurance recoveries

During 2009, the Group reached an agreement with insurers regarding a number of insurance claims made by Towry Law International and Henderson Global Investors in 2003 and 2004 under an AMP Limited run-off insurance policy, resulting in a net receivable of £14.3m.

New Star integration costs

On 9 April 2009, the Group's acquisition of New Star was completed. An expense of £33.8m was incurred in relation to the integration of New Star during 2009. These integration costs included costs in respect of fund mergers, rebranding, office relocation and reorganisation, transition of outsourced retail and investment operations and staff related expenses.

Infrastructure fund charge

During 2009, the Group recognised an exceptional charge of £20.7m in respect of management fees on one of its infrastructure funds.

Impairment of available-for-sale financial assets - property seed capital

In accordance with the impairment tests under IAS 39, three available-for-sale financial assets invested in property funds were impaired during 2009. These were written down to their fair values at 31 December 2009, resulting in a charge to the consolidated income statement of £7.3m.

6 Taxation

Tax recognised in the consolidated income statement

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Current tax:
- charge/(credit) for the period	1.2	(11.9)	(1.0)
- prior period adjustments	(0.7)	0.7	2.6

Deferred tax:
- charge for the period	8.5	8.9	6.0
- prior period adjustments	(0.4)	-	(6.6)
Total tax charged/(credited) to the consolidated income statement	8.6	(2.3)	1.0

Tax recognised in the consolidated statement of comprehensive income

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Tax charged in relation to available-for-sale financial assets movements	0.2	-	0.6
Tax charged/(credited) in relation to actuarial gains/(losses)	5.4	(14.7)	(19.4)
Total tax charged/(credited) to the consolidated statement of comprehensive income	5.6	(14.7)	(18.8)

Reconciliation of profit/(loss) before tax to tax expense

The tax charge for the period is reconciled to the profit/(loss) before tax in the consolidated income statement as follows:

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Profit/(loss) before tax	41.6	(2.9)	15.5

Tax charge/(credit) at the UK corporation tax rate of 28% (1H09 and FY09: 28%)	11.7	(0.8)	4.3

Factors affecting the tax charge/(credit):
Disallowable expenditure and non-taxable income	1.2	1.5	5.6
Other taxable income	2.0	-	-
Prior period adjustments	(1.1)	0.7	(4.0)
Differences in effective tax rates on overseas earnings	(5.3)	(3.7)	(4.4)
Utilisation of previously unrecognised tax losses	-	-	(0.5)
Other items	0.1	-	-
Total tax charged/(credited) in the consolidated income statement	8.6	(2.3)	1.0

7 Dividends

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Dividends on ordinary shares declared and paid in the period:
Final dividend in respect of 2H08	-	33.6	33.6
Interim dividend in respect of 1H09	-	-	14.7
Final dividend in respect of 2H09	34.1	-	-
Total dividends paid and charged to equity	34.1	33.6	48.3

Dividends on ordinary shares declared post balance sheet date:
Interim dividend in respect of 1H10 profits: 1.85 pence per share payable in 2H10	15.3	-	-

An interim dividend of £15.3m (1.85 pence per share) was declared by the Board of Directors on 17 August 2010. This will be payable on 24 September 2010, to shareholders on the register on 3 September 2010.

The difference of £1.0m between the 2H09 dividend declared in the 2009 Annual Report and Accounts of £35.1m and the dividend paid on 28 May 2010 of £34.1m represents a decrease of £1.0m due to dividends waived by employee benefit trusts on Henderson Group plc shares held in trust on behalf of Group employees.

8 Earnings per share

Weighted average number of shares

The weighted average number of shares for the purpose of calculating earnings per share is as follows:

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	m	m	m
Weighted average
Issued share capital	825.5	795.2	810.0
Less: own shares (unconditional awards)	(31.6)	(51.3)	(45.8)
Less: own shares (conditional awards)	(5.8)	(4.9)	(4.9)
Weighted average number of ordinary shares for the purpose of basic earnings per share	788.1	739.0	759.3
Add back: own shares (unconditional awards)	31.6	51.3	45.8
Add: dilutive potential of share options	7.3	1.1	4.3
Weighted average number of ordinary shares for the purpose of diluted earnings per share	827.0	791.4	809.4

Basic and diluted earnings per share have been calculated on the profit/(loss) attributable to equity shareholders. The difference between the weighted average number of shares used in the basic earnings per share and the diluted earnings per share calculations reflects the dilutive impact of options under the Group's SAYE and the Company Share Option Plan, and unconditional awards primarily relating to matching shares or awards granted under the Deferred Equity Plan, the Employee Share Ownership Plan and the Restricted Share Plan.

8.1 On underlying profit after tax attributable to equity holders of the parent

8.1.1 Earnings

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Profit/(loss) after tax attributable to equity holders of the parent	32.3	(0.6)	13.8
Add back: intangible amortisation and void property finance charge adjusted for taxation effect	5.0	2.5	7.7
Add back: non-recurring items adjusted for taxation effect	-	19.5	35.2
Underlying profit after tax attributable to equity holders of the parent	37.3	21.4	56.7

8.1.2 Earnings per share

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	pence	pence	pence

Basic	4.7	2.9	7.5
Diluted	4.5	2.7	7.0

8.2 On profit/(loss) after tax attributable to equity holders of the parent

8.2.1 Earnings

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Profit/(loss) after tax attributable to equity holders of the parent	32.3	(0.6)	13.8

8.2.2 Earnings per share

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	pence	pence	pence

Basic	4.1	(0.1)	1.8
Diluted	3.9	(0.1)	1.7

9 Intangible assets

Intangible assets are made up as follows:

	Goodwill	Investment management contracts	Computer software	Total
	£m	£m	£m	£m
Cost
At 1 January 2009	226.4	-	1.9	228.3
Assets arising on business combinations	61.4	86.9	-	148.3
Additions	-	-	0.4	0.4
At 30 June 2009	287.8	86.9	2.3	377.0
Additions	-	-	0.1	0.1
At 31 December 2009	287.8	86.9	2.4	377.1
At 30 June 2010	287.8	86.9	2.4	377.1

Amortisation and impairment losses
At 1 January 2009	(2.1)	-	(0.1)	(2.2)
Amortisation charge	-	(2.8)	(0.1)	(2.9)
At 30 June 2009	(2.1)	(2.8)	(0.2)	(5.1)
Amortisation charge	-	(5.6)	(0.2)	(5.8)
At 31 December 2009	(2.1)	(8.4)	(0.4)	(10.9)
Amortisation charge	-	(5.6)	(0.2)	(5.8)
At 30 June 2010	(2.1)	(14.0)	(0.6)	(16.7)

Carrying value at 30 June 2009	285.7	84.1	2.1	371.9
Carrying value at 31 December 2009	285.7	78.5	2.0	366.2
Carrying value at 30 June 2010	285.7	72.9	1.8	360.4

The Directors have reviewed the intangible assets for indications of impairment and are satisfied that there are none.

10 Retirement benefits

10.1 Retirement benefit asset recognised in the consolidated statement of financial position

	30 June 2010 Unaudited	30 June 2009 Unaudited	31 December 2009 Audited
	£m	£m	£m

Henderson Group Pension Scheme	113.8	102.7	90.0

The retirement benefit asset in respect of the Pension Scheme, before deferred tax provisions, was £113.8m at 30 June 2010. The increase in the Pension Scheme asset of £23.8m during 1H10 is primarily due to actuarial gains of £19.1m. These actuarial gains resulted from a combination of:

·; an increase in the market value of Pension Scheme assets above expected returns;

·; the effect on liabilities of a decrease in the discount rate from 5.6% per annum at 31 December 2009 to 5.5% per annum at 30 June 2010; and

·; the effect on liabilities of a decrease in the long-term inflation rate from 3.7% per annum at 31 December 2009 to 3.5% per annum at 30 June 2010.

10.2 Retirement benefit obligations recognised in the consolidated statement of financial position

	30 June 2010 Unaudited	30 June 2009 Unaudited	31 December 2009 Audited
	£m	£m	£m

Henderson Group unapproved pension schemes	6.3	4.9	6.1

The net liability in respect of the Group's unapproved retirement benefit obligations was £6.3m at 30 June 2010. The increase in the liability of £0.2m during 1H10 was due to the interest costs on these schemes.

10.3 Pension service (credit)/cost recognised in the consolidated income statement

The pension expense recognised in the consolidated income statement comprises the following:

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m

Henderson Group Pension Scheme	(1.1)	(0.3)	(0.7)
Money Purchase Scheme	2.3	2.3	4.7
Henderson Group unapproved pension schemes	0.2	0.2	0.4
	1.4	2.2	4.4

10.4 Actuarial gains/(losses) recognised in the consolidated statement of comprehensive income

	6 months to 30 June 2010 Unaudited	6 months to 30 June 2009 Unaudited	12 months to 31 December 2009 Audited
	£m	£m	£m
Henderson Group Pension Scheme	19.1	(52.7)	(68.5)
Henderson Group unapproved pension schemes	-	-	(1.2)
Actuarial gains/(losses) recognised in the consolidated statement of comprehensive income	19.1	(52.7)	(69.7)

11 Debt instrument in issue

	30 June 2010 Unaudited	30 June 2009 Unaudited	31 December 2009 Audited
	£m	£m	£m

Carrying value	180.5	183.3	181.9

Fair value	176.5	149.0	173.5

The debt instrument in issue represents £175m senior, unrated, fixed rate notes listed on the London Stock Exchange. The debt instrument is unsecured and repayable in full on 2 May 2012 and bears interest at a fixed rate of 6.5% per annum payable every six months. The debt instrument was issued by HGI Group Limited, a subsidiary of the Company.

The Group swapped the fixed interest coupon into a floating rate on issue of the debt. The swap was unwound on 9 December 2008. The fair value adjustment to the debt carrying value, attributable to the hedged interest rate risk up to the date of unwinding the swap, £10.5m, is being amortised over the remaining term of the debt.

On 30 January 2009, the Group entered into a revolving credit facility agreement with a syndicate of banks. The facility limit is £25m and terminates on 31 March 2012. The Group has not drawn on the facility since entering into the agreement.

12 Provisions

	Void properties	Staff related	Other	Total
	£m	£m	£m	£m
At 1 January 2010	19.1	4.1	31.3	54.5
Additions	-	-	0.1	0.1
Finance charge	1.1	-	-	1.1
Provisions utilised	(3.3)	(0.2)	(0.3)	(3.8)
Foreign exchange movements	-	0.2	-	0.2
At 30 June 2010	16.9	4.1	31.1	52.1

Non-current	13.8	-	16.3	30.1
Current	3.1	4.1	14.8	22.0
At 30 June 2010	16.9	4.1	31.1	52.1

Void properties

The void properties provision reflects the net present value of the excess of lease rentals and other payments on New Star properties onerous contracts that were acquired on the acquisition of New Star, over the amounts expected to be recovered from subletting these properties. The discounting of expected net cash outflows will be unwound during the term of the underlying leases (maximum of 12 years) as a void property finance charge in the consolidated income statement.

Staff related

Staff related provisions have been recognised in respect of a business restructure and New Star staff legacy issues.

Other

Other provisions relate to issues which have arisen as a result of litigation and obligations during the course of the Group's business activities.

The provisions reflect the current estimates of amounts and timings.

13 Contingent liabilities

The following contingent liabilities existed or may exist at 30 June 2010:

·; in the normal course of business, the Group is exposed to certain legal issues, which can involve litigation and arbitration, and may result in contingent liabilities;

·; in the normal course of business, the Group enters into foreign exchange contracts for Group hedging purposes and for facilitating foreign currency transactions for its clients. Such contracts can give rise to contingent liabilities;

·; on 2 May 2006, the Hong Kong Securities and Futures Commission announced that it had reached a settlement with UKFP (Asia) HK Limited (formerly part of Towry Law International) regarding certain legacy products sold by Towry Law International. Significant payments have subsequently been made to investors in line with accounting provisions made for that purpose. The Directors are of the opinion that the provisions remaining at the reporting date are adequate to cover any future payments;

·; under the Towry Law UK sale agreement, normal tax related warranties and indemnities given by the Group expire up to six years from the disposal date of 3 May 2006.

·; under the sale agreement with Pearl Group Limited, tax related warranties and indemnities given by the Group expire up to six years from the disposal date of 13 April 2005.

As at the approval date of the Interim Condensed Consolidated Statement of Financial Position, the Group neither foresees nor has it been notified of any claims under outstanding warranties and indemnities from the abovementioned sale agreements.

14 Movements in controlled entities

The Group did not acquire or dispose of any subsidiaries during the six months to 30 June 2010.

15 Associates and joint ventures

The Group holds interests in the following associates and joint ventures:

	Country of incorporation and principal place of operation	Functional currency	Percentage owned 30 June 2010	Percentage owned 30 June 2009	Percentage owned 31 December 2009
Asia Real Estate Fund Management Limited	Singapore	SGD	50%	50%	50%
Asia Real Estate Fund Management BVI	British Virgin Islands	USD	50%	-	50%
Attunga Capital Pty Limited	Australia	AUD	30%	30%	30%
Henderson-mfi Shopping Centre Verwaltungs GmbH	Germany	EUR	50%	50%	50%
HGI Immobilien GmbH	Germany	EUR	50%	50%	50%
New Star Canada Inc	Canada	CAD	50%	50%	50%
Warburg-Henderson Kapitalanlagegesellschaft für Immobilien mbH	Germany	EUR	50%	50%	50%

			30 June 2010	30 June 2009	31 December 2009
			£m	£m	£m
Share of aggregate net assets			5.7	6.1	6.4
Share of profit for the period			1.2	0.4	1.4

The Group's investments in associates and joint ventures are accounted for under the equity method. The investments are carried at cost adjusted for the post-acquisition share of profits and losses and other changes in equity. Dividends from associates and distributions from joint ventures received during the period are deducted from the carrying value of the investment.

16 Related parties

Disclosures relating to the Henderson Group Pension Scheme are covered in note 10.

Compensation of key management personnel

	6 months ended 30 June 2010 Unaudited	6 months ended 30 June 2009 Unaudited	12 months ended 31 December 2009 Audited
	£m	£m	£m
Short-term employee benefits	1.0	1.1	5.2
Post-employment benefits	0.1	0.1	0.2
Share-based payments	3.7	3.2	4.1
	4.8	4.4	9.5

IAS 24 defines related parties to include key management personnel. Key management personnel of the Group are the Executive Directors and the five highest earning members of the senior management team.

17 Events after the balance sheet date

The Board has not, as at 17 August 2010, being the date the financial statements were approved, received any information concerning significant conditions in existence at the balance sheet date, which have not been reflected in the financial statements as presented. However, the Board has given due regard to the events described below which occurred after the balance sheet date.

On 6 July 2010, the Group signed an indemnity agreement with Aviva Investors relating to undertakings on matters given as part of the transfer of the Henderson International Property Fund to Aviva Investors on 2 August 2010.

On 17 August 2010, an interim dividend of 1.85 pence per share was declared by the Board of Directors payable on 24 September 2010, to shareholders on the register on 3 September 2010.

Glossary

ASX

Australian Securities Exchange

AUM

Assets under management

BAYE

Buy As You Earn Share Plan

Board

The board of directors of Henderson Group plc

bps

Basis points

Company

Henderson Group plc

Compensation ratio

Employee compensation and benefits divided by total income

Corporate office

Henderson Group excluding Henderson Global Investors

Directors

The directors of Henderson Group plc

EPS

Earnings per share

FSA

The UK Financial Services Authority

Foreign exchange

Hedge funds

Hedge funds including absolute return funds

Henderson Global Investors or Henderson

Controlled entities of Henderson Group plc carrying out core investment management activities

Henderson Group or Group

Henderson Group plc and its controlled entities

IAS

International Accounting Standard

IFRS

International Financial Reporting Standard

IRR

Internal rate of return

Management fee margin

Annualised management fees divided by average AUM

Net margin

Annualised underlying profit before tax divided by average AUM

Net tangible assets

Total assets less intangible assets less total liabilities ranking ahead of, or equally with, claims of ordinary shares

New Star

New Star Asset Management Group PLC

OEIC

Open-ended investment company

Operating margin

Total fee income less operating costs, divided by total fee income

Pearl

Pearl Group Limited and its subsidiaries

Pension scheme

The Henderson Group Pension Scheme

RAS

The Group risk appetite statement

SAYE

Sharesave scheme

SICAV

Société d'investissement à capital variable (collective investment scheme)

Total fee margin

Annualised total fee income divided by average AUM

Towry Law International

The international division (now closed) of Towry Law plc

Towry Law UK

Towry Law plc and its controlled entities, which was sold to JS&P Holdings Limited

UK or United Kingdom

United Kingdom of Great Britain and Northern Ireland

Underlying profit

Recurring profit before intangible amortisation and void property finance charge

United States of America

This information is provided by RNS

The company news service from the London Stock Exchange

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