RNS No 1196t
HENDERSON TECHNOLOGY TRUST PLC
16th December 1998
HENDERSON TECHNOLOGY TRUST PLC
Unaudited Interim Results for the six months
ended 31 October 1998
* Group Net Assets fell by 7.0% over the half year but
have subsequently shown a sharp recovery back towards the
peak levels of July.
* Exceptional stock market volatility reflected in
dramatic swings in technology share prices.
* Early October appears to have marked a major low for
the technology sector. Subsequent price performance is
evidence of increasing investor awareness of the
industry's secular growth prospects.
Review
Share prices over the half year displayed an exceptional
degree of volatility. The crisis in Asian and eastern
European markets produced remarkable fluctuations in both
bond and currency markets with the massive losses
incurred by both banks and hedge funds raising fears of a
liquidity crunch. However, coordinated efforts by
monetary authorities across the world have helped to
stabilise the financial situation. Share prices
bottomed in early October and have since clawed back a
substantial part of their earlier losses. Nevertheless,
the half year still generated negative returns for
investors with the Company's assets falling by 7.0%, the
FT/S&P World Index falling by 4.8% (in sterling terms)
and both Europe and Asia producing double digit falls.
The technology sector amplified the stock market's
volatility. At one stage, the PSE (USA) Technology Index
had fallen by 26% from its peak, the Russell 2000
Technology Index of small US companies by 44% and the
European Technology Index by close to 50%. Since the
market lows, technology shares have produced a dramatic
rebound.
We expressed reservations about investor exuberance in
our last annual report and, as a consequence, raised
liquidity during the late spring and early summer. We
entered the correction with cash of around 15%. However,
we were slow to neutralise this position in October,
particularly so as we had intended to use our cash for
share repurchases but received approval from the Inland
Revenue too late in the half year to effect any
purchases. Nevertheless, by early November, most of
our liquidity had been invested with a particular
emphasis on the USA and on the more cyclical areas within
the technology sector.
HENDERSON TECHNOLOGY TRUST PLC
Unaudited Interim Results for the six months
ended 31 October 1998
Outlook
The speed with which markets have recovered over the last
few months suggests that a pause is likely.
Nevertheless, we are optimistic that there will be a
second leg to this upward move. Confidence is being
rebuilt, demand appears to be firming in certain end
markets and valuations are not too extended relative to
interest rates. There has been some encouraging data
which suggests that the impact of the Year 2000 issue
will be to concentrate technology spending into the first
half of next year. This may lead to a stronger than
generally anticipated first few months of 1999.
Consequently, we expect to remain fairly fully invested
through next spring and will focus on those more cyclical
areas of the technology industry that should be the
biggest beneficiaries of any acceleration in capital
spending plans.
HENDERSON TECHNOLOGY TRUST PLC
Unaudited Interim Results for the six months
ended 31 October 1998
Group Statement of Total Return (incorporating the revenue
account) for the half-year ended 31 October 1998
Half-year ended 31 Half-year ended 31
October 1998 October 1998
Unaudited Unaudited
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Total capital - (14,303) (14,303) - 25,423 25,423
(losses)/gains from
investments
Income from fixed asset 444 - 444 183 - 183
investments
Other interest receivable 850 - 850 322 - 322
and similar income
------ ------ ----- ------ ------ ---- -----
Gross revenue and capital 1,294 (14,303)(13,009) 505 25,423 25,928
(losses)/gains
1 Management fee (915) - (915) (1,350) - (1,350)
Other administrative (112) - (112) (86) - (86)
expenses
------ ------ ----- ------ ------ ---- -----
Net return/(loss) on
ordinary activities before
interest
payable and taxation 267 (14,303)(14,036) (931) 25,423 24,491
Interest payable (54) - (54) (1) - (1)
------ ------ ----- ------ ------ ---- ---
Net return/(loss) on 213 (14,303)(14,090) (932) 25,423 25,491
ordinary activities before
taxation
Taxation on net return on (61) - (61) 2 - 2
ordinary activities
------ ------ ----- ------ ------ ----
Net return/(loss) on 152 (14,303)(14,151) (930) 25,423 24,493
ordinary activities after
taxation
====== ====== ===== ====== ====== ====
2 Return/(Loss) per ordinary 0.10p (9.71p)(9.61p)(0.63p) 17.27p 16.64p
share (undiluted)
====== ====== ===== ====== ====== ====
Summary of Group Net Assets
(as at 31 October 1998)
(unaudited) (unaudited) (audited)
31 31 30 April
October October 1998
1998 1997 #'000
#'000 #'000
Fixed asset Investments 184,865 163,069 207,861
Net current 10,069 3,000 (5,970)
assets/(liabilities)
194,934 166,069 201,891
Creditors: amounts falling
due after more than one year (7,174) 0 0
-
bank loan
187,760 166,069 201,891
3 Net assets per ordinary 127.54p 112.82p 137.16p
share (undiluted)
3 Net assets per ordinary 122.97p 110.69p 130.98p
share (fully diluted)
Number of ordinary shares 147,219,206 147,198,305 147,198,305
in issue
Number of warrants in issue 29,296,615 29,317,516 29,317,516
HENDERSON TECHNOLOGY TRUST PLC
Unaudited Interim Results for the six months
ended 31 October 1998
Notes:
1 Management Fee
Half year Half year ended
ended 31 October 1997
31 October #'000
1998
#'000
Regular management 881 377
fee
Performance related - 914
fee
Irrecoverable VAT 34 59
_______ _______
915 1,350
_______ _______
The performance related fee is based on the extent to
which the aggregate net asset value of the ordinary
shares exceeds the FT/S&P Actuaries World Index over
the relevant performance period. No provision has
been made for the half year ended 31 October 1998
since net assets are below the level at 30 April
1998, when the last performance fee was calculated.
The next actual fee payable, if any, for the year
ending 30 April 1999 will be determined by the
relative outperformance to 30 April 1999.
2 Return / (Loss) per share
The basic capital return per share is based on net
capital losses of #14,303,000 (1997 - gains of
#25,423,000) and on 147,201,826 ordinary shares being
the weighted average number of shares in issue for
the period (1997 - 147,152,013 ordinary shares).
Revenue per ordinary share is based on net revenue
after taxation attributable to the ordinary shares of
#152,000 (1997 - loss of #930,000) and on the number
of ordinary shares stated above.
3 Net asset value per share
Basic net asset value per ordinary share is based on
net assets attributable to ordinary shares of
#187,760,000 (31 October 1997 - #166,069,000; 30
April 1998 - #201,891,000) and on 147,219,206 (31
October 1997 and 30 April 1998 - 147,198,305)
ordinary shares, being the number of ordinary shares
in issue at the end of the period.
HENDERSON TECHNOLOGY TRUST PLC
Unaudited Interim Results for the six months
ended 31 October 1998
Diluted net asset value per share is calculated on
the assumption that the 29,296,615 warrants in issue
at 31 October 1998 (31 October 1997 and 30 April 1998
- 29,317,516) were converted into ordinary shares at
the exercise price of 100p. Dilution is assumed to
occur only if the undiluted net asset value is
greater than the conversion price of 100p.
4 Dividend
In accordance with stated policy no interim dividend
has been declared for the period (1997 - nil).
5 Accounts for the period ended 30 April 1998
The figures and financial information for the period
ended 30 April 1998 are extracted from the latest
published accounts of the Group and do not constitute
statutory accounts for that year. These 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 237(2) or 237(3) of the Companies Act
1985.
6 Year 2000
Henderson plc and its subsidiaries ("Henderson")
which provides investment management, UK custodial,
accounting, administrative and company secretarial
services to Henderson Technology Trust PLC, has
instigated a corporate action programme, under
Henderson board supervision, to establish the precise
scope of the risks posed to Henderson Technology
Trust PLC by the consequences of the Year 2000 date
change and to address those risks. Henderson's
strategy is to validate that its computer systems
achieve Year 200 conformity (as defined by the
British Standards Institute in its paper DISC PD2000-
1), and to require both its suppliers and the
suppliers to Henderson Technology Trust PLC to ensure
that their computer systems achieve the same or an
equivalent standard. Costs relating to the Year 2000
project are to be borne by Henderson.
7 Investment Company Status
During the period, the trust ceased to be an
investment company within the meaning of s266,
Companies Act 1985. However, it continued to conduct
its affairs as an investment trust for taxation
purposes under s842 of the Income and Corporation
Taxes Act 1988, and the Articles of the Company
prohibit capital profits from being distributed by
way of dividend.
HENDERSON TECHNOLOGY TRUST PLC
Unaudited Interim Results for the six months
ended 31 October 1998
8 Interim Report
The interim report will be posted to shareholders on
14 January 1999 and will be available thereafter from
the Secretary at the Registered Office, 3 Finsbury
Avenue, London, EC2M 2PA.
HENDERSON TECHNOLOGY TRUST PLC
Appendix to the Unaudited Interim Results for the six
months
ended 31 October 1998
Largest Investments at 31 October 1998
The 30 largest equity investments at 31 October 1998 are
shown below:
Valuation
Stock #'000
Sherwood International 4,613
Psion 3,789
Admiral 3,571
Microsoft 3,540
America Online 3,080
Teradyne 2,911
RM 2,860
Texas Instruments 2,672
Quintiles 2,561
Dell 2,542
Isotron 2,490
MMT Computing 2,470
Filtronic Comtek 2,407
CMG 2,380
Yahoo 2,344
Galen 2,343
Centocor 2,297
EMC 2,268
Logica 2,260
Druid 2,229
SCI Systems 2,123
Network Appliance 1,962
NTL 1,949
Jabil Circuits 1,936
Qwest Communications 1,869
Intel 1,843
Seagate 1,818
Galileo 1,812
Nokia 1,794
Applied Materials 1,764
The valuation of these investments total #74,497,000 or
40.3% of the fixed assets of the Company.
Also included in the portfolio are UK Treasury Bills with a
total value of #16,852,000.
At 31 October 1998 the value of the Company's investments in
TR Technology PLC (in liquidation) A ordinary shares was
#3,410,000.
For further information please contact :
Brian Ashford-Russell
Henderson Technology Trust PLC
Tel : 0171 410 4100
Issued on behalf of Henderson Technology Trust PLC
END
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