HENDERSON HIGH INCOME TRUST PLC
Unaudited results for the half-year ended 30 June 2023
This announcement contains regulated information
Investment Objective
The Company invests in a prudently diversified selection of both well-known and smaller companies to provide investors with a high dividend income stream while also maintaining the prospect of capital growth.
Performance for the six months to 30 June 2023
· Net asset value (NAV) total return (debt at fair value)1 of 3.0% compared with a total return from the benchmark2 of
1.9%
· Mid-market share price total return (including dividends reinvested) of 2.0%
| Financial highlights | at 30 June 2023 | at 31 December 2022 |
| NAV per share3 | 164.1p | 164.2p |
| Mid-market price per share | 163.5p | 165.3p |
| Net assets | £213.6m | £214.3m |
| Dividends paid/payable | 5.15p | 10.15p |
| Dividend yield | 6.2% | 6.1% |
| Gearing | 21.3% | 21.4% |
| (Discount)/premium to NAV (debt at fair value) | (0.4%) | 0.6% |
| Total return performance (including dividends reinvested and excluding transaction costs) | |||||
| 6 months% | 1 year% | 3 years% | 5 years% | 10 years% | |
| NAV total return (debt at fair value)1 | 3.0 | 7.7 | 30.9 | 17.9 | 86.9 |
| Share price total return4 | 2.0 | 8.3 | 36.4 | 23.1 | 78.9 |
| Benchmark2 | 1.9 | 5.0 | 21.6 | 12.5 | 67.4 |
| FTSE All-Share Index | 2.6 | 7.9 | 33.2 | 16.5 | 78.0 |
| ICE BofA Sterling Non-Gilts Index | -1.1 | -7.1 | -17.6 | -7.0 | 22.4 |
| 1. Net asset value with debt at fair value per ordinary share total return (including dividends reinvested and excluding transaction costs) 2. The benchmark is a composite of 80% of the FTSE All-Share Index (total return) and 20% of the ICE BofA Sterling Non-Gilts Index (total return) rebalanced annually3. Net asset value per share with debt at fair value as published by the Association of Investment Companies (AIC)4. The mid-market share price total return (including dividends reinvested) Sources: Morningstar Direct and Janus Henderson | |||||
| INTERIM MANAGEMENT REPORT CHAIRMAN’S STATEMENT Markets/Performance The first half of 2023 has been a volatile period for financial markets. With high inflation globally, policy makers have continued to raise interest rates in an attempt to cool economic activity and reduce price increases. Investors are focused on how much further rates will rise and trying to assess the impact on corporate profitability from increased borrowing costs. From a global perspective, there are some signs that the UK economy might see inflationary pressure take a little longer to abate, not least due to the very tight labour market in the UK and the pressure in particular from recent public and private sector pay settlements. Against this backdrop the Company has made modest positive progress in the first half of 2023 achieving a net asset value total return of +3.0% compared with a benchmark return of +1.9%, outperformance of 1.1%. The Company’s share price total return has been in line with the benchmark at +2.0%. Gearing/Asset Allocation The Company started 2023 with an overweight position in equities and an underweight position in fixed interest investments compared with its benchmark (80% equities, 20% bonds). This position has not changed markedly during the first half of 2023 and the Company’s gearing is also largely unchanged at 21.3% as at 30 June 2023 (21.4% as at 31 December 2022). The Board regularly reviews the level of gearing with the Company’s Fund Manager, and this has continued to be the case not least due to the increase in interest rates which impact the Company’s overall borrowing costs, notwithstanding the fact that a proportion of the Company’s borrowings are at fixed rates. Dividends The first interim dividend of 2.575 pence per share was paid on 28 April 2023 and a second interim dividend of the same amount was paid on 28 July 2023. A third interim dividend, to be paid from the Company’s revenue account, of 2.575 pence per share was announced on 17 July 2023 and this dividend will be paid on 27 October 2023 to shareholders registered at the close of business on 15 September 2023 (with the shares being quoted ex-dividend on 14 September 2023). Looking across the corporate sector at recent results announcements it is encouraging that dividend payout levels continue to be relatively healthy and, notwithstanding the impact of higher borrowing costs on end demand and corporate profitability, UK corporate balance sheets remain in generally good health. David Smith continues to regularly update the Board on prospective income levels from the Company’s portfolio of investments and combined with the Company’s current dividend reserves, the Board continues to have confidence in the Company’s ability to deliver a high income return to shareholders. Outlook In the near term the outlook for markets will be driven by inflation expectations and the impact this will have on monetary policy. There are certainly some signs that inflation is easing a little, particularly in the US and across Europe. However, inflation in the UK is proving more problematic, and although the Bank of England has increased interest rates significantly in the first half of 2023, the expectation in the market is that they may have to rise a little further. The UK corporate sector is in the midst of the interim results season and whilst there are certainly pockets of weakness, corporate results are for the most part holding up well. In particular, UK banks have announced positive updates showing relatively little sign of corporate and personal sector weakness, and capital levels within the banks are at very positive levels. In addition, the UK housing market, which is very important to the UK economy, is holding up reasonably well at this stage. UK companies, where the majority of the Company’s assets remain invested, still appear to be relatively attractively valued in a global context and are still delivering the income levels which will assist the Company’s Fund Manager to deliver a high income return for shareholders whilst also retaining exposure to longer term capital growth. Jeremy RiggChairman12 September 2023 |