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RNS

Half-year Report

Released 09:35 19-Jun-2018

RNS Number : 8398R
Henderson Opportunities Trust PLC
19 June 2018
 

HENDERSON INVESTMENT FUNDS LIMITED

 

HENDERSON OPPORTUNITIES TRUST PLC

 

LEGAL ENTITY IDENTIFIER (LEI):  2138005D884NPGHFQS77

 

19 June 2018

 

 

HENDERSON OPPORTUNITIES TRUST PLC

Unaudited Results for the half year ended 30 April 2018

 

This announcement contains regulated information.

 

Investment Objective

The Company aims to achieve capital growth in excess of the FTSE All-Share Index from a portfolio of UK investments.

 

Performance Highlights

 

 

(Unaudited)

30 April 2018

(Unaudited)

30 April 2017

(Audited)

 31 October 2017

Net Asset Value (NAV) per ordinary share

1,246.7p

1,131.9p

1,269.9p

Ordinary share price

1,032.5p

962.5p

1,066.0p

Discount

17.2%

15.0%

16.1%

Total return per ordinary share

(9.1p)

148.2p

292.2p

Revenue return per ordinary share - basic and diluted

10.0p

10.1p

21.8p

Dividends per ordinary share

6.5p

6.0p

20.0p

Net Gearing¹

13.4%

15.9%

13.3%

 

1 The net gearing percentage reflects the amount of borrowings (bank loans or overdrafts) the Company has used to invest in the market less cash and investment cash funds, divided by net assets multiplied by 100.

 

 

Total Return Performance to 30 April 2018

(including dividends reinvested and excluding transaction costs)

 

 

6 Months

%

 

1 Year

%

 

3 Years

%

 

5 Years

%

NAV per ordinary share 1

-0.7

12.0

25.0

84.2

Benchmark2

2.1

8.2

22.6

45.6

Share price 3

-1.9

9.4

18.9

93.9

Sector average NAV4

1.9

4.1

24.0

58.3

           

 

Sources: Morningstar Direct, Datastream and Janus Henderson

 

1. Net Asset Value (NAV) total return per ordinary share with income reinvested

2. FTSE All-Share Index total return

3. Share price total return using mid-market closing price

4. Average NAV of the AIC UK All Companies Sector with income reinvested

 

 

For further information please contact:

 

 

James Henderson

Fund Manager

Janus Henderson Investors

Telephone: 020 7818 4370

Peter Jones

Chairman

Henderson Opportunities Trust plc

Telephone: 020 7818 4082

 

 

INTERIM MANAGEMENT REPORT

 

CHAIRMAN'S STATEMENT

 

Performance

 

Following a year of outperformance in 2017, the Company's net asset value (NAV) fell 0.7% in the six months to 30 April 2018, whereas the FTSE All-Share Index (the Company's benchmark) rose by 2.1%, both on a total return basis.  This underperformance in the first half of the current financial year was largely attributable to the write off of our holding in Conviviality, valued at £2,714,000 at the year end but at £601,000 on 14 March 2018 immediately before its shares were suspended and subsequently written down to zero at 30 April 2018.  The company has since entered into administration and it is unlikely that shareholders will receive any return on their investment.

 

Over the longer term the Company has a record of strong outperformance against our benchmark, as the following table illustrates:

 

 

1 year

%

3 years

%

5 years

%

10 years

%

NAV (total return)

12.0

25.0

84.2

154.0

FTSE All-Share (total return)

8.2

22.6

45.6

90.9

Outperformance (+)/ Underperformance (-)

+3.8

+2.4

+38.6

+63.1

 

Notwithstanding this consistent track record, the Company's shares continue to trade at a substantial discount to NAV.  In the first half year there was a slight widening in our discount to NAV, from 16.1% at 31 October 2017 to 17.2% at 30 April 2018.

 

Gearing

 

During the period, gearing averaged 14.6%, trending up from 13.3% at the year end to 13.4% at 30 April 2018.  In periods of robust market growth, gearing has been significantly beneficial to the Company's performance and the Board's current policy is to allow the Fund Managers to gear up to 25% of net assets at the time of drawdown.  However, a more cautious approach is preferred during periods of market uncertainty and volatility, and the current level of gearing reflects the market risk that is likely to persist until Brexit negotiations are finalised.  Our current borrowing facility allows for up to £20 million of debt, so that we have capacity to respond to any market opportunities that might arise, and we do not anticipate any requirement to adjust this limit in the near term.

 

Earnings and Dividend

 

The revenue return in the period was £797,000, compared with £810,000 in the first half of last year.  An interim dividend of 6.5 pence per ordinary share (2017: 6.0 pence) has been declared payable on 21 September 2018 to shareholders on the register of the Company on 17 August 2018.

 

Share Capital

 

As at 30 April 2018 there were 8,000,858 shares in issue, there having been no change in share capital in the period under review.  Notwithstanding the discount to NAV we have not engaged in any share buy-backs as we believe this would reduce demand over the long term.

 

Fund Manager

 

Colin Hughes will retire from Janus Henderson Investors on 30 June 2018. He has been involved in the management of the Company's portfolio since 2002 and has been at Janus Henderson Investors or the companies that are in the group for 46 years.  We thank him for his contribution to your Company and wish him a happy retirement.  James Henderson continues as the lead Fund Manager for the Company assisted by Laura Foll and Charlotte Greville. Laura Foll will become joint Fund Manager when she returns from maternity leave in September.

 

Outlook

 

Since the period end to the close of business on 13 June 2018, the Company has again performed strongly, with the NAV increasing by 6.5%, compared with a 3.5% rise in our benchmark, both on a total return basis.  Although growth in the UK economy appears sluggish, the companies in our portfolio are generally international in their outlook and offer excellence in their products and services.  The Board shares the Fund Manager's view that a blend of such exciting young enterprises with large growing companies will continue to deliver strong investment returns.

 

 

Peter Jones

Chairman

19 June 2018

 

FUND MANAGERS' REPORT

 

Review

 

The NAV total return is virtually unchanged over the six months, whilst the FTSE All-Share was up 2.1% on a total return basis.  Performance in the previous six months had been strong with the NAV rising 12.7%, whilst the FTSE All-Share was up 5.9%.  Some of the shares that had been strong in the early period gave up some of their advance this year. 

 

The UK economy has had a period of subdued activity with growth in the first quarter of this calendar year slower than expected.  Some of this was weather related but consumer spending was also constrained by a lack of growth in real wages.  In this environment, corporate performance has been very mixed; some of the online retailers have shown very strong advances while the traditional High Street operators have experienced severe declines.

 

Portfolio Attribution Analysis

 

The largest single stock detractor for the Company has been Conviviality, the holding in which has been written off costing 2.3% of net asset value.  We had taken some profits earlier in the year but we still had a sizeable holding when it went into administration.  It was the largest drink distribution company in the country and also owned the Bargain Booze chain.  The lack of proper internal financial controls led to its downfall rather than the business environment.  We had to relearn the lesson that rapid expansion in a low margin industry is a risky strategy unless the financial controls are rigorous. Even then the quality of the earnings must be regarded as low quality.

 

Positive contributors came from a wide variety of companies.  This diversity of the activities in the underlying companies brings some consistency to the long term capital growth; for instance the oil exploration companies such as Serica Energy and Faroe Petroleum had been out of favour but, as the oil price recovered and operational progress was made, the share prices have responded positively.

 

Data illustrating the Faroe Petroleum Share Price is set out below:

 

 

22 May 2015

April 2016

April 2017

April 2018

Share Price

81.7p

79.0p

94.3p

132.8p

 

Source: Datastream

 

AIM

 

The Company's holdings in AIM companies now accounts for approximately 55% of the portfolio.  This is an increase of around 20% over the last five years.  The reason is that the AIM market has grown and the number of strong companies has increased.  The main stock contributors to the Company's outperformance of recent years are AIM quoted companies.  Smaller companies with good prospects have gravitated towards AIM and away from the main market because of the greater access to capital and lighter regulation. The AIM weighting is mixed with mature fully listed companies to give the portfolio both balance and exciting prospects.

 

Portfolio Activity

 

We have taken some profit in the larger, successful investments in the portfolio so as to restore balance.  Examples of this would be the reduction of Blue Prism and the sale of Senior.  One of the most successful investments in the portfolio over the years has been Fidessa which  has been in the portfolio since it came to the market in 1997.  The position had been reduced with profits being taken.  It recently received a full cash offer and as a result we sold our remaining holding. 

 

Data illustrating the Fidessa Share Price is set out below:

 

 

6 Jun 1997

April 2000

April 2003

April 2006

April 2009

April 2012

Share Price

170.0p

1,345.0p

342.5p

901.0p

1,099.0p

1,550.0p

 

 

April 2015

April 2018

Share Price

2,234.0p

3,930.0p

 

Source: Datastream

 

The portfolio has been refreshed with new purchases.  These include companies such as Learning Technologies (an e-learning services company), Morses Club (an unsecured lender) and Mirriad Advertising (an in video advertising company).

 

Outlook

 

The next generation of successful UK companies will continue to emerge from AIM. The AIM holdings in aggregate have outperformed our holdings on the main market over the last five years. We will continue to look across the spectrum of quoted UK companies for opportunities to make worthwhile investments and value is emerging, especially in those that have taken actions to improve their businesses. The AIM holdings in the portfolio are dynamic companies whose growth can be substantial in the coming periods.

 

James Henderson and Colin Hughes

Fund Managers             

19 June 2018

 

 

PRINCIPAL RISKS AND UNCERTAINTIES

 

The principal risks and uncertainties associated with the Company's business can be divided into the following main areas:

 

•           Investment activity and strategy;

•           Financial instruments and the management of risk;

•           Operational;

•           Accounting, legal and regulatory;

•           Liquidity;

•           Net gearing; and

•           Failure of Janus Henderson.

 

Detailed information on these risks is given in the Strategic Report and in the Notes to the Financial Statements in the Company's latest Annual Report for the year to 31 October 2017.

 

In the view of the Board these principal risks and uncertainties were unchanged over the last six months and are as applicable to the remaining six months of the financial year as they were to the six months under review.

 

  

DIRECTORS' RESPONSIBILITY STATEMENT

 

The Directors confirm that, to the best of their knowledge:

 

(a)       the condensed financial statements for the half year ended 30 April 2018 have been prepared in accordance with "FRS 104 Interim Financial Reporting";

 

(b)       this report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

 

(c)       this report and the condensed financial statements include a fair review of the information required by the Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

 

 

 

For and on behalf of the Board

Peter Jones

Chairman

19 June 2018

 

 

 INVESTMENT PORTFOLIO at 30 April 2018

Company

Valuation

£'000

Portfolio %

 

  Company

Valuation

£'000

Portfolio %

 

Keyword Studios¹

4,999

4.4

 

NAHL¹

889

0.8

 

Blue Prism¹

4,774

4.2

 

Countryside Properties

853

0.8

 

RWS¹

3,761

3.3

 

Integrafin

837

0.7

 

Serica Energy¹

3,465

3.1

 

IG Group

830

0.7

 

Loopup¹

3,165

2.8

 

Van Elle¹

810

0.7

 

HSBC

2,942

2.6

 

Morses Club¹

802

0.7

 

Tracsis¹

2,744

2.4

 

Sigmaroc¹

799

0.7

 

Ricardo

2,666

2.4

 

Ebiquity¹

799

0.7

 

XP Power

2,625

2.3

 

IQE¹

789

0.7

 

Learning Technologies¹

2,584

2.3

 

Atlantis¹

788

0.7

 

10 Largest

33,725

29.8

 

60 Largest

96,616

85.3

 

Clinigen¹

2,398

2.1

 

Eurocell

779

0.7

 

Faroe Petroleum¹

2,354

2.1

 

Mirriad Advertising¹

760

0.7

 

Assura

2,080

1.8

 

Footasylum¹

742

0.7

 

Rio Tinto

1,973

1.7

 

Xafinity

732

0.7

 

Vertu Motors¹

1,878

1.7

 

Be Heard¹

720

0.6

 

Royal Dutch Shell 'B' shares

1,821

1.6

 

Alfa Financial Software

696

0.6

 

Johnson Matthey

1,812

1.6

 

Alpha FX¹

696

0.6

 

Redde¹

1,730

1.5

 

Alpha Financial¹

687

0.6

 

Workspace

1,663

1.5

 

Dairy Crest

678

0.6

 

Tarsus

1,596

1.4

 

Revolution Bars

673

0.6

 

20 Largest

53,030

46.8

 

70 Largest

103,779

91.7

 

Standard Chartered

1,534

1.4

 

Remaining

9,423

8.3

 

ITV

1,516

1.4

 

Total

113,202

100.0

 

The Gym Group

1,463

1.3

 

 

 

 

 

Eland Oil & Gas¹

1,448

1.3

 

 

 

 

 

Aveva

1,400

1.2

 

 

 

 

 

Burberry

1,368

1.2

 

 

 

 

 

Tribal¹

1,360

1.2

 

 

 

 

 

Gateley¹

1,326

1.2

 

 

 

 

 

Ubisense¹

1,272

1.1

 

 

 

 

 

Vodafone

1,270

1.1

 

 

 

 

 

30 Largest

66,987

59.2

 

 

 

 

 

Rolls Royce

1,260

1.1

 

 

 

 

 

Cohort¹

1,251

1.1

 

 

 

 

 

GRC International¹

1,202

1.1

 

 

 

 

 

Flowtech¹

1,185

1.0

 

 

 

 

 

Oxford Instruments

1,183

1.0

 

 

 

 

 

Character¹

1,151

1.0

 

 

 

 

 

Joules¹

1,134

1.0

 

 

 

 

 

IDOX¹

1,122

1.0

 

 

 

 

 

SDL

1,119

1.0

 

 

 

 

 

IP Group

1,113

1.0

 

 

 

 

 

40 Largest

78,707

69.5

 

 

 

 

 

4D Pharma¹

1,063

0.9

 

 

 

 

 

Keystone Law¹

1,058

0.9

 

 

 

 

 

GB Group¹

990

0.9

 

 

 

 

 

Oxford Biodynamics¹

962

0.9

 

 

 

 

 

CML Microsystems

952

0.9

 

 

 

 

 

Miton¹

950

0.9

 

 

 

 

 

Victoria¹

949

0.8         

 

 

 

 

Redcentric¹

940

0.8         

 

 

Prudential

937

0.8

 

 

Hollywood Bowl

912

0.8

 

 

 

 

 

50 Largest

88,420

78.1

 

 

 

 

 

 

 

1 Quoted on the Alternative Investment Market ('AIM')           

 

                                   

Attribution Analysis to 30 April 2018

 

The table below sets out the top five contributors and bottom five detractors to NAV.

 

Top Five Contributors                            

Share Price

Return %

Contribution

to NAV %

Serica Energy

+223.9

+2.1

Loopup

+47.4

+0.9

GRC

+175.1

+0.8

Learning Technologies

+61.4

+0.7

Keyword Studios

+13.8

+0.6

       

 

Bottom Five Detractors                      

Share Price

Return %

Contribution

to NAV %

Conviviality Retail

-100.0

-2.3

4D Pharma

-64.4

-1.7

Micro Focus

-49.7

-0.7

Clinigen

-25.1

-0.7

Safestyle

-73.0

-0.7

 

Source: Janus Henderson

 

Portfolio by Index at 30 April 2018

As a percentage of the investment portfolio excluding cash

 

Index

FTSE All-Share Index %

Portfolio

 %

FTSE 100

80.1

15.0

FTSE 250

16.2

8.8

FTSE SMALLCAP

3.7

12.5

FTSE FLEDGLING

-

0.7

FTSE AIM

-

59.0

OTHER

-

4.0

 

 

 

Total

100.0

100.0

 

Source: Factset

 

Portfolio by Market Capitalisation at 30 April 2018

As a percentage of the investment portfolio excluding cash

 

Index

FTSE All-Share Index %

Portfolio

%

Greater than £2bn

89.2

15.7

£1bn - £2bn

5.5

14.0

£500m - £1bn

3.0

20.7

£200m - £500m

2.0

13.5

£100m - £200m

0.3

21.9

£50m - £100m

-

7.8

Less than £50m

-

5.3

Other

-

1.1

 

 

 

Total

100.0

100.0

 

Source: Factset

 

 

CONDENSED INCOME STATEMENT

 

 

(Unaudited)

Half Year ended

30 April 2018

(Unaudited)

Half Year ended

30 April 2017

(Audited)

Year ended

31 October 2017

 

Revenue  return £'000

Capital return £'000

Total £'000

Revenue  return £'000

Capital return £'000

Total £'000

Revenue return £'000

Capital return £'000

Total £'000

(Losses)/gains from investments held at fair value through profit or loss                        

-

(1,256)

(1,256)

-

11,283

11,283

23,029

23,029

Investment income

held at fair value through

profit or loss        

1,058

-

1,058

1,053

-

1,053

2,246

-

2,246

Interest receivable

and other income               

9

-

9

12

-

12

14

-

14

Gross revenue and

capital (losses)/gains

1,067

(1,256)

(189)

1,065

11,283

12,348

2,260

23,029

25,289

 

Management fee (note 2)

(80)

(185)

(265)

(71)

(166)

(237)

(148)

(344)

(492)

 

Performance fee (note 2)

-

-

-

-

-

-

-

(913)

(913)

Administrative expenses

(153)

-

(153)

(153)

-

(153)

(302)

-

(302)

Net return/(loss) before finance costs and taxation

834

(1,441)

(607)

841

11,117

11,958

21,772

23,582

Finance costs

(36)

(85)

(121)

(29)

(67)

(96)

(60)

(140)

(200)

Net return/(loss) before taxation  

798

(1,526)

(728)

812

11,050

11,862

21,632

23,382

Taxation on net return

(1)

-

(1)

(2)

-

(2)

(5)

-

(5)

Net return/(loss)  after taxation

797

(1,526)

(729)

810

11,050

11,860

1,745

21,632

23,377

Return/(loss) per ordinary share - basic and diluted (note 4)

9.96p

(19.07p)

(9.11p)

10.12p

138.11p

148.23p

21.81p

270.37p

292.18p

 

The total columns of this statement represent the Income Statement of the Company, prepared in accordance with FRS 104.

 

All revenue and capital items in the above statement derive from continuing operations.  The revenue and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.  The Company had no recognised gains or losses other than those disclosed in the Income Statement and Statement of Changes in Equity.  The accompanying notes are an integral part of the condensed financial statements.

CONDENSED STATEMENT OF CHANGES IN EQUITY

 

 

(Unaudited)

Half Year ended 30 April 2018

 

Called up share capital  £'000

 

Share premium account £'000

 

Capital redemption reserve £'000

 

 

Other capital reserves

£'000

 

 

Revenue reserve £'000

 

Total shareholders' funds

£'000

At 1 November 2017

2,000

14,838

2,431

79,549

2,781

101,599

Dividends paid on the ordinary shares

-

-

-

-

(1,120)

(1,120)

Net return after taxation

-

-

-

(1,526)

797

(729)

At 30 April 2018

2,000

14,838

2,431

78,023

2,458

99,750

 

 

 

(Unaudited)

Half Year ended 30 April 2017

 

Called up share capital  £'000

 

Share premium account

£'000

 

Capital redemption reserve

£'000

 

Other capital reserves

£'000

 

 

Revenue reserve £'000

 

Total shareholders' funds

£'000

At 1 November 2016

2,000

14,838

2,431

57,917

2,596

79,782

Dividends paid on the ordinary shares

-

-

-

-

(1,080)

(1,080)

Net return after taxation

-

-

-

11,050

810

11,860

At 30 April 2017

2,000

14,838

2,431

68,967

2,326

90,562

 

 

 

(Audited)

Year ended 31 October 2017

 

Called up share capital  £'000

 

Share premium account

£'000

 

Capital redemption reserve

£'000

 

Other capital reserves  £'000

 

 

Revenue reserve £'000

 

Total shareholders' funds

£'000

At 1 November 2016

2,000

14,838

2,431

57,917

2,596

79,782

Dividends paid on the ordinary shares

-

-

-

-

(1,560)

(1,560)

Net return after taxation

-

-

-

21,632

1,745

23,377

At 31 October 2017

2,000

14,838

2,431

79,549

2,781

101,599

  

The accompanying notes are an integral part of these condensed financial statements.

 

CONDENSED STATEMENT OF FINANCIAL POSITION

 

 

(Unaudited)

30 April 2018

£'000

(Unaudited)

30 April 2017

£'000

(Audited)

31 October 2017 £'000

Investments held at fair value through profit or loss

 

 

 

Listed at market value

44,665

50,984

54,693

Quoted on AIM at market value

68,137

53,588

61,119

Unlisted at market value

400

333

400

 

113,202

104,905

116,212

Current assets

 

 

 

Investments held at fair value through profit or loss

2

2

2

Debtors

254

311

1,089

Cash at bank and in hand

212

482

1,123

 

468

795

2,214

 

 

 

 

Creditors: amounts falling due within one year

 

 

 

Bank loans

(13,540)

(14,873)

(14,625)

Other creditors

(380)

(265)

(2,202)

 

 

 

 

Net current liabilities

(13,452)

(14,343)

(14,613)

 

 

 

 

Net assets

99,750

90,562

101,599

 

 

 

 

Capital and reserves

 

 

 

Called up share capital (note 6)

2,000

2,000

2,000

Share premium account

14,838

14,838

14,838

Capital redemption reserve

2,431

2,431

2,431

Other capital reserves

78,023

68,967

79,549

Revenue reserves

2,458

2,326

2,781

 

 

 

 

 

Total shareholders' funds

 

                      99,750

 

                      90,562

101,599

 

 

 

 

Net asset value per ordinary share - basic and diluted (note 7)

 

1,246.7p

 

1,131.9p

1,269.9p

 

 

 

 

 The accompanying notes are an integral part of these condensed financial statements.  

 

CONDENSED STATEMENT OF CASH FLOWS

 

 

(Unaudited)

Half Year ended

30 April 2018

£'000

(Unaudited)

Half Year ended

30 April 2017

£'000

(Audited)

 

Year ended

31 October 2017

£'000

Cash flows from operating activities

 

 

 

Net return before taxation

(728)

11,862

23,382

Add back: finance costs

121

96

200

Add/(less) (gains)/losses on investments held at fair value through profit or loss

1,256

(11,283)

(23,029)

Withholding tax on dividends deducted at source

(2)

-

(11)

Increase in debtors

(43)

(120)

(14)

(Decrease)/increase in creditors

(918)

(36)

885

 

 

 

 

Net cash (outflow)/inflow from operating activities

(314)

519

1,413

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of investments

(13,304)

(9,533)

(15,650)

Sale of investments

15,021

6,994

13,702

Net cash inflow/(outflow) from investing activities

1,717

(2,539)

(1,948)

 

 

 

 

Cash flows from financing activities

 

 

 

Equity dividends paid (net of refund of unclaimed distributions and reclaimed distributions)

(1,120)

(1,080)

(1,560)

Net loans (repaid)/drawn down

(1,085)

3,062

2,814

Interest paid

(109)

(85)

(201)

Net cash (outflow)/inflow from financing activities

(2,314)

1,897

1,053

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

(911)

(123)

518

 

 

 

 

Cash and cash equivalents at start of year

1,123

605

605

 

 

 

 

Cash and cash equivalents at end of year

212

482

1,123

 

 

 

 

 

 

 

 

Comprising:

 

 

 

Cash at Bank

212

482

1,123

 

 

 

 

 The accompanying notes are an integral part of these condensed financial statements.

  

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

 

1

Accounting policies - basis of preparation

 

The condensed set of financial statements has been prepared in accordance with FRS 104, Interim Financial Reporting, FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland and the Statement of Recommended Practice for "Financial Statements of Investment Trust Companies and Venture Capital Trusts", which was updated by the Association of Investment Companies in November 2014 and in February 2018 with consequential amendments.

 

For the period under review the Company's accounting policies have not varied from those described in the annual report for the year ended 31 October 2017. These financial statements have been neither audited nor reviewed by the Company's auditors.

 

2

Expenses: management fees and performance fees

 

Henderson Investment Funds Limited ("HIFL") is appointed to act as the Company's Alternative Investment Fund Manager. HIFL delegates investment management services to Henderson Global Investors Limited. References to the Manager within these results refer to the services provided by both entities. The management fee is calculated, quarterly in arrears, as 0.55% per annum on the net assets. Arrangements are in place for the Manager to earn a performance fee. The cap on total fees that can be earned in a financial year is 1.5% of the average net assets over the year. There is no performance fee accrual for the current period (30 April 2017: £nil; 31 October 2017: £913,000). Since 1 November 2013, the Company has allocated 70% of its management fees and finance costs to the capital return of the Income Statement with the remaining 30% being allocated to the revenue return. Performance fees payable are allocated 100% to the capital return.

 

3

Dividends

 

The Board has declared an interim dividend of 6.5p per ordinary share (2017: 6.0p), to be paid on 21 September 2018 to shareholders on the Register at the close of business on 17 August 2018. The ex-dividend date will be 16 August 2018. Based on the number of ordinary shares in issue on 19 June 2018 of 8,000,858, the cost of this dividend will be £520,000.

 

No provision has been made for the interim dividend in these condensed financial statements. The final dividend of 14.0p per ordinary share, paid on 23 March 2018 in respect of the year ended 31 October 2017, has been recognised as a distribution in this period.

 

4

Return per ordinary share - basic and diluted

 

(Unaudited)

Half Year ended

30 April 2018

£'000

(Unaudited)

Half Year ended

30 April 2017

£'000

(Audited)

Year ended

31 October 2017

£'000

The return per ordinary share is based on the following figures:

 

 

 

 

Revenue return

797

810

1,745

Capital return

(1,526)

11,050

21,632

Total return

(729)

11,860

23,377

 

 

 

 

Weighted average number of ordinary shares in issue for the period

8,000,858

8,000,858

8,000,858

 

 

 

 

Revenue return per ordinary share

9.96p

10.12p

21.81p

Capital return per ordinary share

(19.07p)

138.11p

270.37p

Total return per ordinary share

(9.11p)

148.23p

292.18p

 

  

5

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 date

                       

Investments held at fair value through profit or loss at 30 April 2018 (unaudited)

Level 1

£'000

Level 2

£'000

Level 3

£'000

Total

£'000

Investments

112,802

-

400

113,202

Current asset investments

2

-

-

2

Total

112,804

-

400

113,204

 

Investments held at fair value through profit or loss at 30 April 2017 (unaudited)

Level 1

£'000

Level 2

£'000

Level 3

£'000

Total

£'000

Investments

104,572

-

333

104,905

Current asset investments

2

-

-

2

Total

104,574

-

333

104,907

 

Investments held at fair value through profit or loss at 31 October 2017 (audited)

Level 1

£'000

Level 2

£'000

Level 3

£'000

Total

£'000

Investments

115,812

-

400

116,212

Current asset investments

2

-

-

2

Total

115,814

-

400

116,214

 

 

 

 

 

 A reconciliation of movements within Level 3 is set out below:

 

2018

 

£'000

Opening balance

400

Transfers in

601

Total loss included in the Income Statement

 

- on investments written off

(601)

Closing balance

400

 

 

The transfer in relates to the Company's holding in Conviviality which has subsequently been written down to zero.

 

The valuation techniques used by the Company are explained in the accounting policies note in the Company's Annual Report for the year ended 31 October 2017.

 

6

Called up share capital

 

There were 8,000,858 ordinary shares of 25p each in issue at 30 April 2018 (30 April 2017 and 31 October 2017: 8,000,858).  No shares were bought back or issued during the period.

 

7

Net asset value per ordinary share - basic and diluted

 

The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £99,750,000 (30 April 2017: £90,562,000; 31 October 2017: £101,599,000) and on the 8,000,858 ordinary shares of 25p each in issue at 30 April 2018 (30 April 2017: 8,000,858 and 31 October 2017: 8,000,858).

 

8

Transaction costs

 

Purchase transaction costs for the half-year ended 30 April 2018 were £11,000 (30 April 2017: £16,000; 31 October 2017: £21,000); these comprise mainly stamp duty and commissions. Sale transaction costs for the half-year ended 30 April 2018 were £6,000 (30 April 2017: £4,000; 31 October 2017: £90,000); these comprise mainly commissions.

 

9

Related party transactions

 

The Company's transactions with related parties for the period were with the Directors, and the Manager.  There have been no material transactions between the Company and its Directors during the half year and the only amounts paid to them were in respect of expenses and remuneration for which there are no outstanding amounts payable at the half year period end.  In relation to the provision of services by the Manager, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services there have been no material transactions with the Manager affecting the financial position of the Company during the half year period.

 

10

Going concern

 

The Company's Articles of Association require that at the Annual General Meeting of the Company held in 2008, and every third year thereafter, an ordinary resolution be put to approve the continuation of the Company. The resolutions put to the Annual General Meetings in 2011, 2014 and in 2017 were duly passed. The next triennial continuation resolution will be put to the Annual General Meeting in 2020.  The assets of the Company consist almost entirely of securities that are listed (or quoted on AIM) and are readily realisable.  Accordingly, the Directors believe that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. Having assessed these factors and the principal risks, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements. 

 

11

General information

 

Company Status:

Henderson Opportunities Trust plc is registered in England and Wales No. 01940906, has its registered office at 201 Bishopsgate, London EC2M 3AE and is listed on the London Stock Exchange.

 

SEDOL/ISIN: 0853657

London Stock Exchange (TIDM) Code: HOT

Global Intermediary Identification Number (GIIN): LVAHJH.99999.SL.826

Legal Entity Identifier (LEI): 2138005D884NPGHFQS77

 

Directors and Corporate Secretary:

The Directors of the Company are Peter Jones (Chairman), Frances Daley (Audit Committee Chairman), Chris Hills and Malcolm King. The Corporate Secretary is Henderson Secretarial Services Limited, represented by Melanie Stoner, FCIS.

 

Website:

Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at www.hendersonopportunitiestrust.com.

 

12

Comparative information

 

The financial information contained in the half-year report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the half years ended 30 April 2018 and 30 April 2017 has not been audited or reviewed by the Company's auditors. The figures and financial information for the year ended 31 October 2017 are an extract based on the latest published accounts and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

 

13

Half Year Report

 

The Half Year Report will be available in typed format on the Company's website, www.hendersonopportunitiestrust.com or from the Company's registered office, 201 Bishopsgate, London EC2M 3AE. An abbreviated version, the 'Update', will be circulated to shareholders in June.

         

 

 

Neither the contents of the Company's website not 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.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Half-year Report - RNS