Last checked at 
23 Jun 2022 14:31
JANUS HENDERSON FUND MANAGEMENT UK LIMITED
HENDERSON OPPORTUNITIES TRUST PLC
LEGAL ENTITY IDENTIFIER (LEI): 2138005D884NPGHFQS77
23 June 2022
HENDERSON OPPORTUNITIES TRUST PLC
(the "Company")
Unaudited results for the half year ended 30 April 2022
This announcement contains regulated information.
Investment Objective
The Company aims to achieve capital growth in excess of the FTSE All-Share Index from a portfolio of primarily UK investments.
Performance summary
| (Unaudited) 30 April 2022 | (Unaudited) 30 April 2021 | (Audited) 31 October 2021 |
Net Asset Value ('NAV') per share | 1,471.5p | 1,624.5p | 1,626.9p |
Share price | 1,237.5p | 1,590.0p | 1,382.5p |
Net assets | £116.2m | £128.3m | £128.5m |
Discount1 to NAV | 15.9% | 2.1% | 15.0% |
Total return per share | -140.9p | 592.1p | 607.5p |
Share price total return | -9.5% | 81.8% | 59.5% |
Revenue return per share - basic and diluted | 19.5p | 11.6p | 24.7p |
Dividends per share2 | 14.0p | 13.0p | 27.5p |
Net gearing3 | 15.2% | 13.1% | 13.2% |
Total Return Performance to 30 April 2022 | |||||
|
6 Months % |
1 Year % |
3 Years % |
5 Years % |
10 Years % |
NAV4 | -8.7 | -7.8 | 27.1 | 43.2 | 207.6 |
Benchmark5 | 3.2 | 8.7 | 14.1 | 26.6 | 100.8 |
Share price6 | -9.5 | -20.6 | 32.2 | 44.1 | 249.8 |
Peer group average NAV7 | -13.2 | -10.0 | 11.3 | 23.2 | 139.6 |
Sources: Morningstar Direct, Refinitiv Datastream and Janus Henderson
1. Calculated based on the NAV per ordinary share and share price at period end
2. The dividends per ordinary share for the period 1 November 2021 to 30 April 2022 include a first interim dividend payment of 7.0p per ordinary share payable on 24 June 2022 and a second interim dividend payment of 7.0p per ordinary share payable on 23 September 2022. See the Chairman's Statement and Note 3 for further details
3. Net gearing reflects the amount of borrowings (bank loans or overdrafts) the Company has used to invest in the market less cash and investment cash funds, as a percentage of net assets
4. NAV per ordinary share total return (including dividends reinvested)
5. FTSE All-Share Index
6. Share price total return (including dividends reinvested)
7. Association of Investment Companies ('AIC') UK All Companies Sector
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Performance
It is disappointing to be reporting on a period of net asset value ("NAV") decline of 8.7% for the Company, particularly when the Company's FTSE All-Share Index benchmark rose modestly, by 3.2%, over the same time horizon. On a longer-term basis (3, 5 and 10 years) the Company has outperformed its benchmark (see table above).
The six months to the end of April were characterised by higher-than-expected inflation and economic uncertainty, particularly towards the end of the six months after the war in Ukraine began. From a UK stock market perspective this had a 'de-risking' effect as markets sought the relative certainty of either defensive sectors or those with an earnings uplift from rising commodity prices. While the Company's portfolio saw some benefit from its holdings in natural resource companies, this was more than offset by the significant de-rating of many small and medium sized companies. This size differential in how companies performed was among the key drivers of the Company's underperformance. In this respect we are, to a degree, comforted that the decline in the Company's NAV of 8.7% was less than that of the AIM All-Share Index at 16.0% where just over half of the Company's portfolio was invested at the period end.
Earnings and dividends
The revenue return in the period was £1,543,000, compared to £915,000 in the same period last year. We were encouraged to see dividends continue their recovery, with some companies returning to dividend payments for the first time since the COVID-19 pandemic began. During the previous two financial years we chose to continue with the Company's existing dividend trajectory by using a small amount of the Company's revenue reserve. It is our expectation (barring unforeseen circumstances) that the dividend this financial year will be covered by current year earnings. We are therefore pleased to declare a second interim dividend of 7.0p per ordinary share for the financial year ending 31 October 2022 in respect of the quarter to 30 April 2022. This will be payable on 23 September 2022 to shareholders registered at the close of business on 19 August 2022. The Company's shares will be quoted ex-dividend on 18 August 2022. The first interim dividend for the financial year ending 31 October 2022 was declared on 10 March 2022 and will be paid on 24 June 2022.
Gearing
Gearing ended the period at 15.2% of net assets, up modestly from 13.2% at the financial year end. In a period where the Company's net asset value fell, gearing detracted from returns. The upward movement in gearing was driven by the decline in the Company's net asset value, as the Fund Managers were small net sellers during the period.
Share Capital
The discount to net asset value stayed approximately flat; as at the end of April the Company's discount to NAV was 15.9%, compared to 15.0% at financial year end. No shares were issued or bought back and as at the end of April 2022 the financial year end position was therefore unchanged with 8,000,858 shares in issue (of which 102,483 are currently held in treasury).
Outlook
The current period is one of great uncertainty. War, inflation and possible recession make for a problematic backdrop. However, stock markets are always looking to the future and it may be that these difficulties are already reflected to a degree in the valuations of many companies.
Investing in sound companies with good management teams can be the way to preserve and grow capital in these uncertain times. We would expect inflation to rise further before falling back next year. Companies with real pricing power can provide their investors some protection and a return to growth in the economy will enhance corporate margins as the sales advance. This may be a story for 2023 and the portfolio is positioned to benefit.
Wendy Colquhoun
Chairman
FUND MANAGERS' REPORT
Overview
During the six months to the end of April the Company's net asset value fell 8.7% while the FTSE All-Share Index benchmark rose 3.2% (both on a total return basis). Over this period smaller companies materially underperformed larger ones. The FTSE AIM All-Share index (where 54% of the portfolio was invested at the end of April) fell 16.0% while the FTSE 100 rose 6.2%. As inflation rapidly surged and economic growth expectations were revised downwards, the best performing sectors were either positively exposed to rising commodity prices or defensive sectors such as utilities and pharmaceuticals. This meant the FTSE 100, with its higher share of defensive sectors and significant weighting in commodity companies, performed well, while on average the more domestic and more cyclical smaller companies underperformed.
As the market began to price in the possibility of stagflation, the 'stabilisers' held in the portfolio (see definition in the table below) provided diversification and performed well. This helped to partially offset weakness in 'tomorrow's leaders' as the market chose to assign a greater value to relative certainty and cash generation today rather than earnings potential in the future. This caused the greatest de-rating within the early-stage company 'bucket', where companies are at an early stage of their life cycle and the majority of companies held are pre profitability. We had been steadily adding to the 'stabilisers' while reducing some of 'tomorrow's leaders' on strength going into this financial year. While this was the correct direction of travel, as is often the case in hindsight, the scale of the move was not enough to offset the headwind from smaller company underperformance.
| Total (gross assets) % | Indicative range % |
Stabilisers | ||
Large cap (£1bn +) These stocks are usually familiar to all investors. They are ballast for the portfolio but as individual companies we believe they remain capable of long-term earnings growth.
| 22 | 10-30 |
Natural Resources These are companies that will benefit from rising commodity prices. The majority of this classification are smaller companies (outside of the FTSE 100) that are less well understood and where, in our view, we can add more value by paying close attention.
| 16 | 5-15 |
Tomorrow's Leaders |
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Growth small cap These are companies that in our view can be substantially larger businesses in time. They have strong management capability and they operate in fast growing end markets or are disruptors within more established markets. | 18 | 20-40 |
Recovery Some of these companies, for example those exposed to the aerospace industry, have fallen into the recovery classification as a result of the pandemic. However, as the global economy recovers earnings should be able to grow from current suppressed levels. | 10 | 0-30 |
Early-stage companies/university spin-outs These are companies that could serve large end markets with potentially disruptive technologies, however they are at an early stage of their life cycle and whether the technology becomes fully commercialised remains, to a degree, binary. They should perform largely independently of the broader economic cycle. | 11 | 0-20 |
Small & mid cap compounders These are good quality, long-term holdings with experienced management teams. Over time we expect them to steadily grow sales and earnings. | 23 | 20-40 |
Source: Janus Henderson Investors at 30 April 2022.
Portfolio Attribution
In a period of rising commodity prices, the top five absolute contributors to performance during the six months were commodity producers (Serica Energy, Jersey Oil & Gas, Anglo American, Shell and Rio Tinto). It has always been our view that, for portfolio balance reasons, the portfolio should maintain a minimum 5% weighting in natural resources. This is to provide a counterbalance against companies held (such as industrials) that are heavy commodity consumers at times of rising commodity prices. As at the end of the period the portfolio's weighting in the area was 16.0%. While we have been modest net sellers in recent months, we continue to hold a sizable weighting. This is because in our view there is a realistic possibility of a prolonged period of higher commodity prices following several years of low investment in the industry.
In a reversal of performance in the previous financial year, several of the early-stage companies held (such as fuel cell companies AFC Energy and Ceres Power) were among the largest absolute detractors from performance. The de-rating in the area was not on the back of material disappointments at the company level. Valuations, however, had become high towards the end of 2020 (at which point we made material reductions) and we were not, therefore, surprised to see a degree of retrenchment. We continue to think that the potential end markets for these companies is large and the calibre of their commercial partnerships suggests they are among the leaders in the area. We therefore continue to hold an 11% weight in early-stage companies, of which 3% is held in alternative energy companies.
Outside of early-stage companies, the most material disappointment was online value retailer Studio Retail, which was written down to zero after entering administration. This was an extremely unusual situation as the company had been materially profitable the previous financial year, however supply chain disruptions (with, for example, some stock not arriving in time for Christmas) led to a working capital outflow. This meant Studio Retail reached the limits of their lending facilities and the banks were not willing to extend further lending. Due to the short time frames involved shareholders were not given the option to inject money into the business via a rights issue.
Activity
The largest new position purchased in the period was Shell, which was bought in December 2021. It had previously been our view that smaller oil and gas companies presented better opportunities for us to add value as they were less well known and often traded at material valuation discounts. At the time of investment, however, Shell was trading at what we saw as an attractive valuation relative to its cash generation. It also had a breadth of assets, such as its retail distribution network and sizable gas assets, that in our view positioned it well for the energy transition. Other new positions during the six months included Halfords (purchased in March), which has significantly improved its business in recent years with a greater focus on services and a stronger balance sheet.
The largest sale during the period was Blue Prism following a recommended takeover offer from a US peer. We also materially reduced the position in Serica Energy on share price strength, aiming to limit the holding to approximately 4% of gross assets.
Outlook
The portfolio is a selection of shares in UK companies that have management teams we believe will navigate their companies through the current turbulent period. It is a diverse list of companies and good businesses can be found in all fields of economic life. The valuations of the stocks in the portfolio appear undemanding; the growth we expect is not reflected in the share prices. It may require a more certain economic backdrop for the strengths of these companies to be recognised, in the meantime we will be monitoring them and buying when the share price falls unduly. We will finance this through selling down holdings in companies where the share price seems to more accurately reflect prospects and by modestly increasing the gearing.
James Henderson and Laura Foll
Fund Managers
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 and cyber;
• accounting, legal and regulatory; 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 Annual Report for the year ended 31 October 2021.
In the view of the Board, these principal risks and uncertainties at the year-end remain and are as applicable to the remaining six months of the financial year as they were to the six months under review.
The risks associated with the war in Ukraine and the economic sanctions on Russia fall into the "financial instruments and the management of risk" risk category, relating to political and economic risks, including global military emergencies, interest rates and inflationary pressures. Expectations for economic growth have been substantially reduced whilst at the same time inflation is running at generational highs exacerbated by supply side shortages and burgeoning energy costs. Any of these factors will have an impact on equity market levels and the Company's investments.
Directors' Responsibility Statement
The Directors (as listed in note 12) confirm that, to the best of their knowledge:
a) | the condensed financial statements for the half year ended 30 April 2022 have been prepared in accordance with Financial Reporting Standard 104 Interim Financial Reporting and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;
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b) | this Interim Management Report and condensed financial statements include a fair review of the information required by the 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
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c) | this Interim Management Report includes 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).
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On behalf of the Board
Wendy Colquhoun
Chairman
Investment portfolio at 30 April 2022
Company | Valuation £'000 | % of portfolio |
Serica Energy¹ | 4,826 | 3.6 |
Springfield Properties¹ | 4,703 | 3.5 |
Next Fifteen Communications¹ | 4,309 | 3.2 |
Tracsis¹ | 3,900 | 2.9 |
Barclays | 3,630 | 2.7 |
Anglo American | 3,496 | 2.6 |
HSBC | 3,161 | 2.4 |
Rio Tinto | 2,853 | 2.2 |
Vertu Motors¹ | 2,852 | 2.1 |
Jersey Oil & Gas¹ | 2,835 | 2.1 |
10 largest | 36,565 | 27.3 |
NatWest | 2,834 | 2.1 |
Shell | 2,825 | 2.1 |
IQGeo¹ | 2,633 | 2.0 |
SigmaRoc¹ | 2,405 | 1.8 |
Lloyds Banking | 2,386 | 1.8 |
Boku¹ | 2,301 | 1.7 |
Zoo Digital¹ | 2,216 | 1.7 |
Standard Chartered | 2,124 | 1.6 |
Surface Transforms¹ | 2,089 | 1.6 |
GlaxoSmithKline | 2,066 | 1.5 |
20 largest | 60,444 | 45.2 |
Aviva | 2,058 | 1.5 |
Ilika¹ | 1,995 | 1.5 |
RWS Holdings¹ | 1,923 | 1.5 |
Van Elle¹ | 1,903 | 1.4 |
Cohort¹ | 1,836 | 1.4 |
Tesco | 1,835 | 1.4 |
Direct Line Insurance | 1,776 | 1.3 |
Flowtech¹ | 1,743 | 1.3 |
Morgan Advanced Materials | 1,692 | 1.3 |
Redde Northgate | 1,653 | 1.2 |
30 largest | 78,858 | 59.0 |
Vodafone | 1,641 | 1.2 |
Oxford Instruments | 1,622 | 1.2 |
Tribal Group¹ | 1,547 | 1.2 |
Redcentric¹ | 1,544 | 1.1 |
BT Group | 1,507 | 1.1 |
Ceres Power¹ | 1,490 | 1.1 |
Jadestone Energy¹ | 1,476 | 1.1 |
Deltic Energy¹ | 1,457 | 1.1 |
AFC Energy¹ | 1,423 | 1.1 |
The Gym Group | 1,421 | 1.1 |
40 largest | 93,986 | 70.3 |
STV | 1,373 | 1.0 |
Integrafin Holdings | 1,324 | 1.0 |
GB Group¹ | 1,313 | 1.0 |
Prudential | 1,262 | 0.9 |
Jubilee Metals¹ | 1,214 | 0.9 |
Mirriad Advertising¹ | 1,212 | 0.9 |
K3 Capital¹ | 1,212 | 0.9 |
M&G | 1,177 | 0.9 |
Workspace | 1,136 | 0.9 |
Halfords | 1,131 | 0.8 |
50 largest | 106,340 | 79.5 |
Johnson Matthey | 1,112 | 0.8 |
IP Group | 1,111 | 0.8 |
Marks & Spencer | 1,102 | 0.8 |
XP Power | 1,063 | 0.8 |
Hollywood Bowl | 1,007 | 0.8 |
Babcock | 996 | 0.7 |
Reckitt Benckiser | 936 | 0.7 |
Rolls-Royce | 902 | 0.7 |
Kier Group | 887 | 0.7 |
International Personal Finance | 864 | 0.7 |
60 largest | 116,320 | 87.0 |
Orcadian Energy¹ | 860 | 0.6 |
Dianomi¹ | 842 | 0.6 |
Ricardo | 837 | 0.6 |
Marks Electrical¹ | 818 | 0.6 |
Premier Miton Group¹ | 811 | 0.6 |
Senior | 808 | 0.6 |
CML Microsystems | 800 | 0.6 |
Creo Medical¹ | 788 | 0.6 |
Accsys Technologies¹ | 770 | 0.6 |
Mondi | 755 | 0.6 |
70 largest | 124,409 | 93.0 |
24 remaining (excluding cash and investments written down to zero) | 9,350 | 7.0 |
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Total | 133,759 | 100.0 |
1 Quoted on the Alternative Investment Market ('AIM')
Attribution analysis to 30 April 2022
The table below sets out the top five contributors and top five detractors to NAV:
Top five contributors | Total return % | Contribution to NAV % |
Serica Energy | +71.3 | +2.4 |
Jersey Oil & Gas | +59.8 | +0.9 |
Anglo American | +33.4 | +0.7 |
Shell | +30.4 | +0.6 |
Rio Tinto | +33.1 | +0.6 |
Top five detractors | Total return % | Contribution to NAV % |
Studio Retail | -100.0 | -1.2 |
Boku | -37.5 | -1.1 |
Barclays | -25.0 | -1.0 |
AFC Energy | -43.5 | -0.8 |
Ceres Power | -40.0 | -0.6 |
Source: Janus Henderson
Portfolio by index at 30 April 2022
As a percentage of the portfolio excluding cash
Index | FTSE All-Share Index % | Portfolio % |
FTSE 100 | 81.9 | 28.2 |
FTSE 250 | 15.1 | 11.5 |
FTSE SmallCap | 3.0 | 6.2 |
FTSE AIM | 0.0 | 53.3 |
Other | 0.0 | 0.8 |
Total | 100.0 | 100.0 |
Source: Factset
Portfolio by market capitalisation at 30 April 2022
As a percentage of the portfolio excluding cash
Index | FTSE All-Share Index % | Portfolio % |
|
Greater than £2b | 89.6 | 31.6 | |
£1b - £2b | 5.3 | 11.0 | |
£500m - £1b | 3.0 | 8.8 | |
£200m - £500m | 1.8 | 17.2 | |
£100m - £200m | 0.3 | 15.3 | |
£50m - £100m | 0.0 | 9.5 | |
Less than £50m | 0.0 | 6.2 | |
Other | 0.0 | 0.4 | |
Total | 100.0 | 100.0 |
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Source: Factset
CONDENSED INCOME STATEMENT
(Unaudited) Half Year ended 30 April 2022 | (Unaudited) Half Year ended 30 April 2021 | (Audited) Year ended 31 October 2021 | |||||||
Revenue return £'000 | Capital return £'000 | Total return £'000 | Revenue return £'000 | Capital return £'000 | Total return £'000 | Revenue return £'000 | Capital return £'000 | Total return £'000 | |
(Losses)/gains from investments held at fair value through profit or loss | - | (12,350) | (12,350) | - | 47,311 | 47,311 | - | 47,667 | 47,667 |
Gain on foreign exchange | - | - | - | - | - | - | - | 1 | 1 |
Investment income held at fair value through profit or loss | 1,773 | - | 1,773 | 1,100 | - | 1,100 | 2,317 | 108 | 2,425 |
Interest receivable and other income | 109 | - | 109 | 100 | - | 100 | 268 | - | 268 |
Gross revenue and capital (losses)/gain | 1,882 | (12,350) | (10,468) | 1,200 | 47,311 | 48,511 | 2,585 | 47,776 | 50,361 |
Management fee (note 2) | (99) | (230) | (329) | (99) | (232) | (331) | (203) | (474) | (677) |
Performance fee (note 2) | - | - | - | - | (1,180) | (1,180) | - | (1,168) | (1,168) |
Administrative expenses | (199) | - | (199) | (165) | - | (165) | (379) | - | (379) |
Net return/(loss) before finance costs and taxation | 1,584 | (12,580) | (10,996) | 936 | 45,899 | 46,835 | 2,003 | 46,134 | 48,137 |
Finance costs | (40) | (93) | (133) | (19) | (45) | (64) | (45) | (105) | (150) |
Net return/(loss) before taxation | 1,544 | (12,673) | (11,129) | 917 | 45,854 | 46,771 | 1,958 | 46,029 | 47,987 |
Taxation on net return | (1) | - | (1) | (2) | - | (2) | (4) | - | (4) |
Net return/(loss) after taxation | 1,543 | (12,673) | (11,130) | 915 | 45,854 | 46,769 | 1,954 | 46,029 | 47,983 |
Return/(loss) per ordinary share - basic and diluted (note 4) | 19.54p | (160.45p) | (140.91p) | 11.58p | 580.55p | 592.13p | 24.74p | 582.77p | 607.51p |
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 2022 | ||||||
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 2021 | 2,000 | 14,838 | 2,431 | 107,496 | 1,732 | 128,497 |
Ordinary dividends paid | - | - | - | - | (1,145) | (1,145) |
Return of unclaimed dividends | - | - | - | - | 4 | 4 |
Net (loss)/return after taxation | - | - | - | (12,673) | 1,543 | (11,130) |
At 30 April 2022 | 2,000 | 14,838 | 2,431 | 94,823 | 2,134 | 116,226 |
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(Unaudited) Half Year ended 30 April 2021 | ||||||
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 2020 | 2,000 | 14,838 | 2,431 | 61,467 | 1,907 | 82,643 |
Ordinary dividends paid | - | - | - | - | (1,106) | (1,106) |
Return of unclaimed dividends | - | - | - | - | 3 | 3 |
Net return after taxation | - | - | - | 45,854 | 915 | 46,769 |
At 30 April 2021 | 2,000 | 14,838 | 2,431 | 107,321 | 1,719 | 128,309 |
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(Audited) Year ended 31 October 2021 | ||||||
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 2020 | 2,000 | 14,838 | 2,431 | 61,467 | 1,907 | 82,643 |
Ordinary dividends paid | - | - | - | - | (2,131) | (2,131) |
Return of unclaimed dividends | - | - | - | - | 2 | 2 |
Net return after taxation | - | - | - | 46,029 | 1,954 | 47,983 |
At 31 October 2021 | 2,000 | 14,838 | 2,431 | 107,496 | 1,732 | 128,497 |
The accompanying notes are an integral part of these condensed financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) Half year ended 30 April 2022 £'000 | (Unaudited) Half year ended 30 April 2021 £'000 | (Audited) Year ended 31 October 2021 £'000 | |
Investments held at fair value through profit or loss |
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Listed at market value | 62,981 | 61,123 | 65,075 |
Quoted on AIM at market value | 70,286 | 85,758 | 81,536 |
Unlisted at market value | 492 | 483 | 493 |
133,759 | 147,364 | 147,104 | |
Current assets |
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Investments held at fair value through profit or loss | 2 | 2 | 2 |
Debtors | 619 | 406 | 90 |
Cash at bank and in hand | 1,829 | 1,252 | 1,360 |
2,450 | 1,660 | 1,452 | |
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Creditors: amounts falling due within one year |
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Bank loans | (19,492) | (18,083) | (18,367) |
Other creditors | (491) | (2,632) | (1,692) |
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Net current liabilities | (17,533) | (19,055) | (18,607) |
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Net assets | 116,226 | 128,309 | 128,497 |
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Capital and reserves |
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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 | 94,823 | 107,321 | 107,496 |
Revenue reserves | 2,134 | 1,719 | 1,732 |
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Total shareholders' funds | 116,226 | 128,309 | 128,497 |
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Net asset value per ordinary share - basic and diluted (note 7) | 1,471.5p | 1,624.5p | 1,626.9p |
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The accompanying notes are an integral part of these condensed financial statements.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) Half Year ended 30 April 2022 £'000 | (Unaudited) Half Year ended 30 April 2021 £'000 | (Audited) Year ended 31 October 2021 £'000 | |
Cash flows from operating activities |
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Net (loss)/return before taxation | (11,129) | 46,771 | 47,987 |
Add back: finance costs | 133 | 64 | 150 |
Add: losses/(gains) on investments held at fair value through profit or loss | 12,350 | (47,311) | (47,667) |
Add: gains on foreign exchange | - | - | 1 |
Increase in debtors | (530) | (312) | (28) |
(Decrease)/Increase in creditors | (1,195) | 1,130 | 1,295 |
Net cash (outflow)/inflow from operating activities | (371) | 342 | 1,738 |
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Cash flows from investing activities |
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Purchase of investments | (11,340) | (22,288) | (36,086) |
Sale of investments | 12,336 | 17,494 | 30,812 |
Net cash inflow/(outflow) from investing activities | 996 | (4,794) | (5,274) |
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Cash flows from financing activities |
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Equity dividends paid (net of refund or unclaimed distributions and reclaimed distributions) | (1,141) | (1,103) | (2,129) |
Net loans drawn down | 1,125 | 3,979 | 4,263 |
Interest paid | (140) | (54) | (120) |
Net cash (outflow)/inflow from financing activities | (156) | 2,822 | 2,014 |
Net increase/(decrease) in cash and cash equivalents | 469 | (1,630) | (1,522) |
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Cash and cash equivalents at start of year | 1,360 | 2,882 | 2,882 |
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Cash and cash equivalents at end of period | 1,829 | 1,252 | 1,360 |
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Comprising: |
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Cash at bank | 1,829 | 1,252 | 1,360 |
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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 April 2021.
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 2021.
These financial statements have been neither audited nor reviewed by the Company's auditor.
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2 | Management and performance fees |
Janus Henderson Fund Management UK Limited is appointed to act as the Company's Alternative Investment Fund Manager. Janus Henderson Fund Management UK Limited delegates investment management services to Janus Henderson Investors UK Limited. References to Janus Henderson or the Manager within these results refer to the services provided by both Janus Henderson Fund Management UK Limited and Janus Henderson Investors UK Limited.
Management and performance fees are charged in accordance with the terms of the management agreement and provided for when due. The base management fee is charged at 0.55% of net assets per annum payable quarterly at a rate of 0.1375% based on net assets at the end of the previous quarter. The management agreement also provides for the payment of a performance fee, calculated as 15% of any outperformance of the NAV over the benchmark, subject to a limit on the total management and performance fees payable in any one year of 1.5% of the average net assets (calculated quarterly) during the year. No performance fee will be paid if either the share price or net asset value is lower than their value at the preceding financial year end. Any underperformance relative to the benchmark, or any unrewarded outperformance (for example, as a result of the cap), will be carried forward and set against any outperformance or underperformance respectively in subsequent years. A performance fee of £nil has been accrued as at 30 April 2022 (30 April 2021: £1,180,000 and 31 October 2021: £1,168,000).
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.
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3 | Dividends |
On 10 March 2022, the Board declared a first interim dividend of 7.0p (2021: 6.5p) per ordinary share, to be paid out of revenue on 24 June 2022 to shareholders on the register of the Company at the close of business on 20 May 2022. The cost of this dividend will be £553,000 (2021: £513,000).
The Board has declared a second interim dividend of 7.0p (2021: 6.5p) per ordinary share, to be paid out of revenue on 23 September 2022 to shareholders on the register of the Company at the close of business on 19 August 2022. The ex-dividend date will be 18 August 2022. Based on the number of ordinary shares in issue on 30 June 2022, the cost of this dividend will be £553,000 (2021: £513,000).
No provision has been made for the interim dividends in these condensed financial statements. The third interim dividend of 6.5p per ordinary share, paid on 17 December 2021 and the final dividend of 8.0p per ordinary share, paid on 25 March 2022 in respect of the year ended 31 October 2021, have been recognised as a distribution in this period. |
4 | Return/(loss) per ordinary share - basic and diluted The return/(loss) per ordinary share is based on the following figures:
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(Unaudited) Half Year ended 30 April 2022 £'000 | (Unaudited) Half Year ended 30 April 2021 £'000 | (Audited) Year ended 31 October 2021 £'000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue return | 1,543 | 915 | 1,954 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital (loss)/return | (12,673) | 45,854 | 46,029 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total (loss)/return | (11,130) | 46,769 | 47,983 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Weighted average number of ordinary shares in issue for the period | 7,898,375 | 7,898,375 | 7,898,375 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue return per ordinary share | 19.54p | 11.58p | 24.74p | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital (loss)/return per ordinary share | (160.45p) | 580.55p | 582.77p | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total (loss)/return per ordinary share | (140.91p) | 592.13p | 607.51p | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The Company has no securities in issue that could dilute the return per ordinary share. Therefore, the basic and diluted returns per share are the same.
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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:
There have been no transfers between levels of the fair value hierarchy during the period.
The valuation techniques used by the Company are explained in the accounting policies note 1(d) in the Company's Annual Report for the year ended 31 October 2021.
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6 | Called-up share capital | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
During the half year ended 30 April 2022, no shares were issued or repurchased (half year ended 30 April 2021 and year ended 31 October 2021: no shares issued or repurchased). At 30 April 2022 there were 8,000,858 ordinary shares of 25p each in issue (30 April 2021 and 31 October 2021: 8,000,858) of which 102,483 were held in treasury (30 April 2021 and 31 October 2021: 102,483 shares held in treasury) resulting in 7,898,375 shares being entitled to a dividend (30 April 2021 and 31 October 2021: 7,898,375).
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7 | Net asset value per ordinary share - basic and diluted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £116,226,000 (30 April 2021: £128,309,000; 31 October 2021: £128,497,000) and on the 7,898,375 ordinary shares of 25p each in issue at 30 April 2022 (half year ended 30 April 2021 and year ended 31 October 2021: 7,898,375).
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8 | Transaction costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase transaction costs for the half year ended 30 April 2022 were £41,000 (30 April 2021: £80,000; 31 October 2021: £114,000); these comprise mainly stamp duty and commissions. Sale transaction costs for the half year ended 30 April 2022 were £6,000 (30 April 2021: £8,000; 31 October 2021: £14,000); these comprise mainly commissions.
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9 | Related party transactions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company's transactions with related parties in the period under review were with the Directors and the Manager. There were no material transactions between the Company and its Directors during the half year other than amounts paid to them in respect of expenses and remuneration for which there are no outstanding amounts payable at the half year period end. Directors' shareholdings as at 31 October 2021 are disclosed in the Annual Report.
In relation to the provision of services by the Manager, other than fees payable by the Company in the ordinary course of business and the facilitation of marketing activities with third parties, there were no material transactions with the Manager affecting the financial position of the Company during the half-year period.
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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 next triennial continuation resolution will be put to the Annual General Meeting in 2023. The assets of the Company consist almost entirely of securities that are listed (or quoted on AIM) and are readily realisable. Having assessed these factors and the principal risks the directors consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements. 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.
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11 | Net debt reconciliation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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12 | General information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company Status: Henderson Opportunities Trust plc is registered in England and Wales (No. 01940906), has its registered office at 201 Bishopsgate, London EC2M 3AE and is listed on the London Stock Exchange.
SEDOL/ISIN: 0853657/GB0008536574 London Stock Exchange (TIDM) Code: HOT Global Intermediary Identification Number (GIIN): LVAHJH.99999.SL.826 Legal Entity Identifier (LEI): 2138005D884NPGHFQS77
Directors and Corporate Secretary: The Directors of the Company are Wendy Colquhoun (Chairman), Frances Daley (Audit and Risk Committee Chairman), Davina Curling and Harry Morgan. The Corporate Secretary is Janus Henderson Secretarial Services UK Limited, represented by Melanie Stoner (Fellow of the Chartered Governance Institute).
Website: Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at www.hendersonopportunitiestrust.com.
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13 | 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-year periods ended 30 April 2022 and 30 April 2021 has not been audited or reviewed by the Company's auditors. The figures and financial information for the year ended 31 October 2021 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 Independent Auditor's Report which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.
A glossary of terms and details of alternative performance measures can be found in the Annual Report for the year ended 31 October 2021.
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14 | Half-Year Report | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The half-year report will shortly be available on the Company's website or from the Company's registered office. An abbreviated version, the 'Update', will be posted to shareholders in July 2022. The Update will also be posted on the Company's website, and hard copies will be available from the Company's registered office. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For further information, please contact:
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James Henderson Fund Manager Janus Henderson Investors Telephone: 020 7818 4370 | Laura Foll Fund Manager Janus Henderson Investors Telephone: 020 7818 6364 |
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Wendy Colquhoun Chairman Henderson Opportunities Trust plc Telephone: 020 7818 4082 | James de Sausmarez Director and Head of Investment Trusts Janus Henderson Fund Management UK Limited Tel: 020 7818 3349
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Harriet Hall Investment Trust PR Manager Janus Henderson Investors Telephone: 020 7818 2919 |
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Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) are incorporated into, or form part of, this announcement.