Henderson European Trust plc
Accessing another world of growth in Europe
Annual Report 2024
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Contents
Strategic report
01 Henderson European Trust
at a glance
02 Performance highlights
04 Chair’s statement
08 Fund managers’ report
12 A snapshot of our portfolio
14 Case studies
16 How we build our portfolio
17 Business model
19 Key performance indicators
21 Managing risks
24 The Company’s viability
25 Engaging with our stakeholders
30 ESG report
Governance
36 Board of directors
and fund managers
39 Corporate governance report
44 Audit and Risk Committee report
49 Management Engagement
Committee report
50 Nominations Committee report
53 Directors’ remuneration report
57 Directors’ report
59 Statement of
directors’ responsibilities
Financial statements
61 Independent Auditor’s report
68 Income statement
69 Statement of changes in equity
70 Statement of financial position
71 Cash flow statement
72 Notes to the financial statements
Additional information
89 Notice of AGM
94 Glossary
96 Alternative performance measures
98 General shareholder information
100 Corporate information
www.hendersoneuropeantrust.com
More information
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insights and factsheets
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this year’s Annual General
Meeting by webinar:
The Board also welcomes you in person to the AGM.
Please see more details about the AGM, attending in
person or by webinar, in the Chair’s Statement.
Please send your general enquiries about the Company to
the Company Secretary at: itsecretariat@janushenderson.com.
p.2–3 Performance highlights
Henderson European Trust at a glance
The Company invests in a concentrated portfolio of 35 to 45 stocks
predominantly listed in Europe (excluding the UK). The portfolio has
a bias towards large-cap companies but may, within limits, invest in
small or mid-cap companies or companies listed outside Europe.
Average portfolio holdings
43
41 (2023)
Investment focus
Total return
Regional focus
Europe (ex UK)
Global champions listed in Europe
p.13 Portfolio listing
p.12 Portfolio snapshot
Ongoing charge
1
0.70%
As at 30/09/2024
0.80% (2023)
Net Assets
£663.5M
As at 30/09/2024
£379.0M (2023)
Dividend yield
2
2.4%
As at 30/09/2024
2.8% (2023)
1 Alternative performance measure, explained on pages 96–97. This figure has been calculated on a forward-looking basis which differs from the
standard Association of Investment Companies methodology.
2 Based on the dividends paid or recommended for the year and the share price at the year end, being the interim of 3.05p and final dividend of 1.30p.
See also alternative performance measures on pages 96–97.
Sources: Janus Henderson. A glossary of terms and alternative performance measures are included on pages 94–97.
Industrials 27.3%
Health Care 17.4%
Technology 13.7%
Financials 13.2%
Consumer Discretionary 9.6%
Consumer Staples 7.0%
Energy 3.5%
Basic Materials 2.5%
Utilities 2.3%
Telecommunications 1.9%
Real Estate 1.6%
Strategic report Governance
Financial
statements
Additional
information
01
Henderson European Trust plc Annual Report 2024
Strategic report
Performance highlights
Year to 30 September 2024
Total return
Dividends
p.8–11 Fund Manager’s report
1 Net asset value (“NAV”) per ordinary share with dividends reinvested and excluding reinvestment costs. See alternative performance measures
on pages 96–97.
2 Calculated using mid-market closing price(s). See alternative performance measures on pages 96–97.
3 Comprising an interim dividend of 3.05p paid in June 2024 and a recommended final dividend of 1.30p due for payment on 3 February 2025.
4 Based on an interim dividend of 3.05p paid in June 2024 and a recommended final dividend of 1.30p due for payment on 3 February 2025.
See alternative performance measures on pages 96–97.
5 Relative to the FTSE World Europe (ex UK) Index for the year
6 Assets of £310m were transferred to the Company from Henderson EuroTrust plc on 4 July 2024. Further details about the contribution from
Janus Henderson (“JHI”) are in note 23 to the Financial Statements.
NAV per share
1
Total return 2024
16.6%
(2023) 24.1%
NAV per share
1
At year end 2024
201.4p
(2023) 178.1p
Share price
2
Total return 2024
20.5%
(2023) 27.7%
Share price
2
At year end 2024
183.0p
(2023) 157.0p
Discount
3
Debt at par 2024
9.1%
(2023) 11.9%
This indicates a key performance
indicator (KPI). KPIs are used to measure
the success of your Company in meeting
its objective and by the directors to
evaluate the performance of the Manager.
p.19–20 Key performance indicators
Dividend
3
2024
4.35p
(2023) 4.35p
Dividend yield
4
2024
2.4%
(2023) 2.8%
p.5 Chair’s Statement
Performance attribution
Key performance influences over the year to 30 September
5
2024
%
2023
%
Return of the portfolio investments
from sector allocation (ex cash) –1.5 –1.9
from stock selection (ex cash) 2.4 5.5
from currency effect 0.3 0.6
Impact of gearing (net) 0.4 0.2
Impact of share buybacks and tender offer 0.5 0.0
Impact of costs of combination with HNE
6
–0.2 n/a
Impact of contribution from JHI
6
0.2 n/a
Impact of expenses –0.8 –0.8
NAV return relative to the benchmark 1.3 3.6
02
Henderson European Trust plc Annual Report
Performance highlights continued
Total return performance
Total performance return for 10 years
Total return performance to 30 September 2024
1 year
%
3 years
%
5 years
%
10 years
%
Company NAV
1
16.6 25.8 63.3 167.6
Benchmark
2
15.3 21.2 48.4 136.4
Company share price
3
20.5 25.8 68.1 146.2
AIC Europe sector NAV
4
15.4 11.3 50.1 154.5
AIC Europe sector share price
5
15.2 8.5 50.8 148.4
IA OEIC Europe ex-UK sector average
6
14.6 14.5 44.7 126.5
Total performance return for 10 years to 30 September 2024
300
250
Sep
2014
Sep
2015
Sep
2016
Sep
2017
Sep
2018
Sep
2019
Sep
2020
Sep
2021
Sep
2022
Sep
2023
Sep
2024
200
150
100
50
0
NAV
1
Benchmark
2
Share price
3
Source: NAV and Price from Morningstar Direct; Benchmark from LSEG Datastream
1 NAV per ordinary share with dividends reinvested and excluding reinvestment costs. See alternative performance measures on pages 96–97.
2 FTSE World Europe (ex UK) Index in Sterling terms
3 Share price using mid-market closing prices. See alternative performance measures on pages 96–97.
4 Simple average NAV for the AIC Europe sector which currently comprises six investment trusts
5 Average share price total return of the AIC Europe sector
6 Investment Association (“IA”) Europe (ex-UK) sector for open-ended investment companies (“OEICs”), which comprised 138 funds at the year end
Sources: Janus Henderson, Morningstar Direct and LSEG Datastream
A glossary of terms and alternative performance measures are on pages 94–97.
Strategic report Governance
Financial
statements
Additional
information
03
Henderson European Trust plc Annual Report 2024
Strategic report
Summary
• These are the first results following the
successful combination of Henderson
EuroTrust and Henderson European Focus
Trust to form Henderson European Trust
(“HET”). The combination has created
a trust with combined assets of £664m,
FTSE 250 membership and a lowered
management fee.
• Despite challenging market conditions,
including interest rate volatility and
geopolitical concerns, the Company
recorded a strong NAV total return of
16.6%, above the benchmark FTSE World
Europe (ex UK) index.
• The Board is actively seeking to address
the trust’s recently widened discount
through share buybacks, alongside
new discount control mechanisms
introduced as part of the combination.
Chair’s statement
Dear Shareholder,
This has been an eventful year for the Company and
I would like to begin by welcoming former Henderson
EuroTrust plc (“HNE”) shareholders to Henderson European
Trust plc (“HET”) and to thank shareholders of both HNE
and Henderson European Focus Trust plc (“HEFT”) for
their support in combining the two companies in early
July, effected by way of a scheme of reconstruction
(the “HEFT/HNE combination”). With circa £663.5 million
in assets, promotion to the FTSE250 Index, proven stock
picking skills supplied by Co-Fund Managers Tom O’Hara
and Jamie Ross, improved liquidity in our shares and a
lowered management fee for shareholders, the Board
believes the Company is well positioned for its purpose
of generating a good total return from investing in Europe.
It is critical that investment companies evolve and are
‘fit for purpose’ to meet investor requirements – this was
a driving force for boards of both HEFT and HNE and
remains at the heart of what we hope to achieve for
HET’s shareholders.
Reporting on our performance, it is notable that whilst we
outperformed peers and the index over 12 months (see
comparative figures below), our performance was earned
in the first six months of our financial year. The gyrations in
the markets since we reported our interim results in May
have been harder to navigate: heightened interest rate
volatility amid concerns about global politics, potential
impact from a greater slowdown in the US economy and
problems in the Chinese property markets all ensured
that the rotation between stocks was cautious in nature,
with the shares of ‘defensive’ companies (those whose
earnings prospects tend not to suffer much in recessions)
vastly outperforming those of the more economically
sensitive companies. Added to this, an episode of
‘AI-angst’ by investors after a period of exceptional
returns led to a correction in the European semiconductor
equipment shares that had been such strong long-term
contributors to your Company’s returns.
It is critical that investment
companies evolve and
are ‘fit for purpose’ to meet
investor requirements.”
A new chapter for Henderson European Trust
04
Henderson European Trust plc Annual Report
Performance
Investment performance for the year was good: NAV
total return was 16.6%, outperforming the Company’s
benchmark index total return of 15.3% with the share
price total return higher again at 20.5% reflecting a
small narrowing of the discount.
The long-term track record (which is that of HEFT, now HET)
continues to be strong, with NAV and share price total
return outperforming the benchmark over one, three,
five, seven and ten years. Our results compare favourably
with our competitors, be they in the investment trust
sector or the IA OEIC (open-ended funds) sector. The
average NAV total return of the AIC Europe investment
company sector (comprising six companies) was 15.4%
in this period, and the OEIC Europe ex-UK sector average
(comprising 138 funds) was 14.6%.
Combination with Henderson EuroTrust plc
Having formally combined on 4 July 2024 (see page 28
for details of the combination), the Board would like to
thank all those involved in the transaction, including
Janus Henderson for their financial support to ensure no
costs to shareholders of either company, a reduction in
ongoing management fee rates and support in promoting
the Company as a flagship European investment trust.
As part of this transaction, the Company’s name
changed from ‘Henderson European Focus Trust plc’
to ‘Henderson European Trust plc’. The management
fee was reduced and more attractive tiered rates put
in place (see page 18 for more details). As a result, the
expenses for the year to 30 September 2024 were 0.75%,
compared to 0.80% for HEFT and 0.79% for HNE in the year
prior to the combination, and the estimated ongoing
charge for the year to 30 September 2025 is 0.70%, as
detailed on pages 96–97.
Dividends
The Board is recommending a final dividend for the year
of 1.30p per share which, subject to shareholder approval
at the Annual General Meeting (“AGM”), will be paid on
3 February 2025 to shareholders on the register on
3 January 2025. When added to the interim dividend
paid in June 2024, this will bring the full-year dividend
to 4.35p per share, which is the same total dividend
as that paid by HEFT for the 2023 full-year distribution.
This proposed distribution provides a yield of 2.4% on
the year end share price of 183p.
HEFT declared a higher-than-normal dividend of 3.05p
per share at the interim stage. We explained that due to
the HEFT/HNE combination, we needed to ensure that all
HEFT shareholders received the income which had been
generated during their tenure, and that the final dividend
would be smaller to reflect the lower amount of income
received by the Company in the second half of the
financial year and the larger number of shares in issue
following the combination.
We expect that dividends will return to a pattern of smaller
interim and larger final dividends in the future.
Share rating and discount management policy
Our discount to NAV at the end of the financial year of 9.1%
was a small but noteworthy improvement from the end of
the previous year (30 September 2023: 11.9%). The average
discount over the 12 months was 10.9%.
However, the discount at which the shares have traded
to NAV in recent weeks has been at the wider end of our
12-month range. We believe this reflects a broader malaise
affecting the whole investment company sector which,
while we very much hope will be temporary, continues to be
driven by a variety of macro factors that present challenges
to buying demand. The Board considers share buybacks
when the discount is deemed excessive, which is assessed
on absolute and relative bases, and to that end 2,376,191
shares were bought back during the financial year, to
be held in treasury (representing 0.7% of share capital).
Since the year end (and as at 9 December 2024) a further
5,780,287 shares have been bought back (representing
1.6% of share capital), partly in response to increased
selling pressure driven by investors’ concerns around
changes to capital gains tax ahead of the UK budget
at the end of October.
The Board also reviewed the Company’s discount
management policy for the medium term. In addition
to potentially using share buybacks, the Board has now
introduced a five-yearly conditional performance-related
tender of up to 25% of issued share capital, excluding
treasury shares.
This will be made at a 2% discount to NAV less costs if, over
the five years to 30 September 2029 (and over subsequent
five-year periods to 30 September 2034 and beyond), the
NAV per share total return does not equal or exceed the
total return of the benchmark index. Any conditional
tender offer would be subject to shareholder approval
and prevailing legal and regulatory requirements.
Chair’s statement continued
Our results compare favourably
with our competitors, be they in the
investment trust or the Investment
Association OEIC (open-ended
funds) sector.”
Strategic report Governance
Financial
statements
Additional
information
05
Henderson European Trust plc Annual Report 2024
Strategic report
Chair’s statement continued
Finally, after the initial three-year period following the
combination of assets, the Board will consider whether
it would be in the interests of shareholders to offer
additional opportunities to realise some of their
investment, irrespective of net asset value return compared
to benchmark, and will exercise discretion on what form
these might take, subject to market circumstances at
the time.
Capital structure and use of debt
The Company’s total borrowing capacity remains at
EUR 35 million in long-term structural debt by way of
private placement loan notes with a weighted average
interest rate of 1.57%, and an HSBC Bank overdraft facility
of £30 million (or 10% of net assets if lower). At the year
end the Company had not drawn on the overdraft and
net gearing was approximately 4% of net assets.
We provide the Fund Managers with flexibility to manage
actual gearing levels in light of their view on the prevailing
investment opportunity. The Fund Managers’ Report
explains how they consider gearing, and the chart on
page 99 provides further detail on month end gearing
levels over the course of the year.
Fund management changes
John Bennet retired during the year, not only from his
portfolio management role at HEFT, but also from leading
the highly successful European team at Janus Henderson
and indeed from a lengthy and distinguished fund
management career. The Board would like to thank
John for his tremendous stewardship of HEFT over a
ten-year period, his mentorship and development role
of a now 11-strong team of portfolio managers, and for
instilling in Tom and Jamie a style and approach to
active management in Europe that we expect to
continue to serve HET so well.
Board changes
The combination of HNE and HEFT required considerable
oversight by both boards. I would like to welcome
Stephen King and Rutger Koopmans to the Board of HET,
previously directors at HNE. Stephen, as an economist,
brings macroeconomic expertise and market insight,
and Rutger brings European perspective as well as
corporate governance expertise from a long career
in financial services.
As part of the transition, Stephen Macklow-Smith from
HEFT and Stephen White from HNE stood down when
the transaction completed, and Katya Thomson (ex HNE)
stood down shortly after completion; Robin Archibald
(ex HEFT), having completed almost nine years, will not
stand for re-election at the forthcoming AGM. I would
like to thank all respective directors for their significant
contributions, both during their tenure, and especially
in the months leading up to the combination.
Particularly noteworthy, Robin has been involved in HET
since the early 1990s, originally as an advisor and latterly
as a non-executive director, Audit and Risk Committee
(“ARC”) Chairman and Senior Independent Director (“SID”).
We are deeply grateful for Robin’s tireless and valuable
commitment to the Company and the Board over the last
nine years, with his wise counsel, extensive knowledge of
accounting and corporate issues and familiarity with the
investment trust sector.
Melanie Blake will be appointed ARC Chair when Robin
Archibald stands down, and an appointment of a SID will
follow during the next year.
Governance, shareholder
engagement and AGM
We are pleased to invite shareholders to attend the
AGM in person at our registered office on Wednesday,
29 January 2025 at 11.30 am and to join us afterwards
for refreshments. This is an opportunity to meet the Fund
Managers and the Board. Shareholders who prefer to join
virtually may do so via Zoom. There will be live voting only
for those physically present at the AGM and we would
encourage all shareholders to have their say and vote
their shares on all resolutions put forward. All the
resolutions are recommended and supported by your
directors. Shareholders holding their shares through
investor platforms are also encouraged to attend, and
to vote, ahead of the proxy voting deadline of Monday,
27 January 2025 through their nominee platforms.
The HEFT/HNE combination created a large amount
of share premium through the issuance of new shares.
Shareholder approval is being sought at the AGM to
reclassify the share premium account as a distributable
reserve. This will provide greater flexibility in the future.
Please see pages 89–93 for the AGM Notice, more
information on all the resolutions, and on joining and voting.
06
Henderson European Trust plc Annual Report
Chair’s statement continued
If you have questions for either the Board or the Fund
Management team in advance of the AGM – or indeed
at any time of the year – please get in touch. Visit our
website at www.hendersoneuropeantrust.com where
you can subscribe for updates.
Outlook
As 2024 draws to a close, market conditions are unusually
volatile. The US 10-year Treasury yield – the benchmark for
borrowing costs worldwide – is midway between the last
12 months’ high (4.7%) and low (3.6%). Fears associated
with a sustained outbreak of ‘tariff wars’ are higher than in
many a year. For European investors, additional challenges
include Germany’s ‘sick man of Europe’ status, the war in
Ukraine and the emergence of new, more populist,
political movements.
Yet Europe is replete with world-class companies. As Tom
and Jamie, your Fund Managers, highlight in their report,
the companies in the Henderson European Trust portfolio
draw their revenues from geographically diversified sources.
Europe may be out of favour among many investors but,
in circumstances where European companies look
remarkably cheap relative to their international rivals,
we believe, for those willing to recognise that corporate
Europe is not the same as the European economy,
exposure to the region will reap benefits.
Vicky Hastings
Chair of the Board
11 December 2024
We believe, for those willing to
recognise that corporate Europe
is not the same as the European
economy, exposure to the region
will reap benefits.”
Strategic report Governance
Financial
statements
Additional
information
07
Henderson European Trust plc Annual Report 2024
Strategic report
Fund managers’ report
Seismic shifts in stock markets
Summary
• HET achieved NAV growth of over 16%
for the year to 30 September 2024,
outperforming its benchmark despite a
period of underperformance in the latter
half of the year. Effective use of gearing
and the impact of the strategic portfolio
reorganisation as part of the combination
of Henderson European Focus Trust and
Henderson EuroTrust underscored the
benefits of the transaction.
• Global markets were marked by volatility
over the year to 30 September 2024,
as inflation began to normalise in most
economies. Three core trends emerged
that have impacted our thinking over
the year.
• Looking forward, Chinese economic
policy efforts, the normalisation of
interest rates and positive indicators
from the US economy will provide
opportunities for cyclical areas of
the market we anticipate.
The combination of Henderson European Focus Trust plc
(“HEFT”) and Henderson EuroTrust plc (“HNE”) completed
successfully in July 2024. The environment since then has
been anything but benign. We have navigated a market
that seems to be agitating for change; notably, a sudden
sell-off in technology shares over the summer and the
corresponding race into the smaller and medium-sized
companies that would be expected to benefit from looming
interest rate cuts. Several big themes – and the uncertainty
surrounding them – have dominated share price behaviour.
In our view, the events of the last year can be broadly
organised into three core challenges:
1. An increasingly price-sensitive consumer
2. The structural challenges facing China’s economy
3. A changeable interest rate cycle
We will also discuss how the participation of passive and
short-termist investors is impacting our market as a whole
– spoiler: we believe it is a positive for long-term, active
investors like ourselves and it directly informed our
response to the market turnover in the summer.
Performance
The Company generated NAV growth of 16.6% in the
year to 30 September 2024, 1.3% ahead of the performance
of the benchmark, the FTSE World Europe (ex UK) Index.
Readers of the 2024 half-year report will recall a robust
performance period. For the second half of 2024
specifically (1 April to 30 September), we gave back some
of this outperformance, lagging the +0.3% benchmark
return by 1.5%. This short period of underperformance will
be evaluated in the context of the themes outlined above.
Net gearing stood at 4.2% at the end of September,
effectively a full deployment of the long-term loan notes
placed by HEFT in January 2022 at a very favourable
average interest rate of 1.57%. Over the year gearing was
mildly accretive to our performance (see the performance
attribution table on page 2). We have the flexibility to take
gearing higher through use of an overdraft facility, when
we perceive a compelling stock, sector or market
opportunity. We consider our neutral stance to be our
current position of fully deploying our low-cost loan notes.
Finally, the combination of two companies required the
two respective portfolios be focused into one and that we
raise cash to fund two partial tender offers. As such, there
is optically a significantly higher level of portfolio activity
during the period. However, the direct trading costs of
reorganising two portfolios into one formed of our ‘best
ideas’ were minimal. We consider that this was achieved
08
Henderson European Trust plc Annual Report
successfully without adverse financial impact on either
company and demonstrated one of the key benefits of
the combination of the companies: the drawing together
of two similar approaches to obtaining returns from
Continental European stocks.
A more selective consumer
As a rule, stocks tend to matter more than sectors in our
investment process. Nonetheless, at times events outside
of our control can necessitate taking a top-down view.
Over the last year, the travails of the consumer have
been one such event.
The effects of inflation, following Covid and the Ukraine
war, have continued to impact both consumer and
corporate behaviour.
The impact on pricing, though, has varied widely within the
consumer space. This variation has framed our perspective
on consumer companies. We have chosen to specifically
focus on ‘cumulative pricing’ since pre-Covid, as a metric
through which we can usefully analyse how aggressive
companies have been with pricing and the tolerance of
consumers to accept these price hikes. The chart below
offers an illustration of the level of variation across a range
of consumer product categories.
Category EQ Price Change – 2023 vs 2020
%
50
40
Sports Drinks
Carbonated Beverages
Salty Snacks
Vegetables – Frozen
Source: NielsenIQ and TD Cowen
Cookies
Bread & Baked Goods – Fresh
Dinners & Entrees – Frozen
Sparkling & Still Flavoured Water
Chocolate Candy
Juices & Drinks – Shelf Stable
Pizza – Frozen
Cereal – Ready To Eat
Sweet Snacks
Sliced Lunchmeat – Refrigerated
Yoghurt
Tea – Liquid
Snack and Nutrition Bars
Total Food
Cakes and Cupcakes
Juices & Drinks – Refrigerated
Baking Staples
Meat & Seafood – Frozen
Soup – Shelf Stable
Spices, Seasonings, Extract
Beer
Ground Coffee – Single Serve
Bacon – Refrigerated
Snacking Nuts & Seeds
30
10
20
0
In addition to the product categories above, we have
observed luxury goods companies pushing through
significant price increases, of up to 40-60% for core
product lines. Yet, roughly-speaking, economy-wide
inflation – measured by CPI and wage growth – was closer
to 15%. Consumers have demonstrably been squeezed,
and they know it.
A second metric we consider is gross profit margin, a
company’s revenues minus the direct costs involved in
production like ingredients, energy, factory labour and
so on. In LVMH’s case, gross profit margins actually rose
during the inflationary spike. Many of its peers broadly
maintained profitability. This suggested to us that the
price increases may be excessive and could prompt a
significant and lasting shift in consumer behaviour. We
reduced our luxury goods exposure and the sector fell
around 14% over the second half of our financial year.
On the contrary, beer companies were considerably,
cheeringly kinder to their consumers. We invest in global
behemoth Anheuser-Busch InBev, which is currently circa
2.7% of the portfolio. The company saw its gross margin
decline from over 60% pre-Covid to a low of less than 54%
in 2024, due to its costs rising in excess of its price increases.
While this is a short-term challenge to profitability, they
should be able to raise prices and profit margins steadily
over the longer term – having avoided alienating
consumers. Of course, there is a level of loyalty to beer
brands and taste profiles which is a further positive for
us as investors – people tend not to feel too enticed by
supermarket-branded beers, whatever the price.
Fund managers’ report continued
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statements
Additional
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09
Henderson European Trust plc Annual Report 2024
Strategic report
Fund managers’ report continued
Of course, not all consumer trends can be captured by
the relationship between profit margin and price increases.
The streaming companies have been universally hit by
a surprise slowdown in music subscriptions earlier in the
year, despite prices barely rising over the last few years.
This in turn hit shares in Universal Music Group (“UMG”) in
dramatic fashion in July. While the streamers are intending
a rare moment of collaboration to reignite growth, the
uncertainty was not tenable given UMG’s share price
and we have fully exited the stock.
China’s economic challenges
Chinese companies and consumers have been a
notable source of revenues for European businesses over
the last decade and a half. With that in mind, a series of
speedbumps in the road of Chinese growth has caused
some concern for investors. This has been most evident
in the failure of ‘cylical’ stock prices to recover even as
interest rates began to fall (historically, cyclical stocks –
those most sensitive to economic growth – have seen
their fortunes move in lockstep with rates).
At the same time, the Chinese government has made
concerted efforts to establish a presence in premium
export markets – notably electric vehicles, solar panels
and wind turbines. These efforts have had the explicit
goal of counteracting the slowdown in growth driven
by a faltering consumer market. The prospect of further
protectionism from Europe and the US therefore prompted
a direct response from the Chinese authorities in the form
of late September’s stimulus package.
How do we navigate such a critical theme for the global
economy? We have generally avoided European
automakers as the structural challenges from an efficient,
competitive Chinese auto-complex look genuine. As
already mentioned, we reduced our luxury goods
exposure, where so much growth in recent years has
depended on Chinese wealth-creation. However, we took
a contrarian stance in buying elevator company, KONE, in
January. The company has been viewed as a China-proxy
– but selling new elevators to China is now only 15% of its
profit (down from 50% in 2016). That means its share price
can reflect changes in sentiment regarding the Chinese
economy, even as its financial performance doesn’t.
Instead, the company derives revenue from servicing
elevators and is using new technology to anticipate
future servicing needs.
Legacy HEFT readers may be familiar with the term ‘Big is
Beautiful’, our framework for assessing the ability of large
incumbents to further bolster their market-leadership
through scale and expertise. KONE is a classic example
in this niche.
As for China, we expect it to be a key determinant
of market behaviour in 2025. We lean towards an
improvement in sentiment, which should benefit those
cyclical companies we own across industrials and
materials, some of which have been the biggest laggards
in the 2024 financial year due to their direct or indirect
exposure to the country. We note some encouraging
datapoints suggesting there may be sizeable stimulus
ammunition already in the pipeline. Watch this space.
A changeable interest rate cycle
The catalyst for the summer turmoil in markets, or the
‘rotation’ to use the market vernacular, started with the
US Federal Reserve more overtly indicating that interest
rates could soon start coming down. Lower interest rates
tend to be taken as good news for markets, increasing
risk appetite.
It is reckless to chase short-term momentum in the
markets, especially when so much of it is driven by
short-term speculation, but we were certainly cognisant
of the potential for lower interest rates to fundamentally
improve the outlook for certain business models: those in
which the cost of debt is a key determinant of profitability
and equity value. This environment informed our decision
to buy Spanish-listed telecommunication towers operator
Cellnex and UK-listed utility company National Grid.
The latter appealed in part due to the increased policy
stability in the UK and the fact the company derives
half its revenues from the US.
Legacy HNE readers may recognise Cellnex as a previous
holding: the pressure on the share price of this company
when interest rates started to rise in 2022 remains a vivid
memory, but also reminds us that a similar reversal is
possible as rates start to ease again. It is also helpful
that during the interim, Cellnex has, in our view, seen an
upgrade to its management, governance and strategy.
We expect it to be a very shareholder-friendly company
in the months ahead, through the initiation of
share buybacks.
There is rampant speculation on the impact on the US
interest rate cycle of the recent re-election of Donald
Trump as US president. We believe that his sparse policy
programme during campaigning provides limited
evidence on which to base assumptions. Instead, we will
be watching, along with the world, to see what emerges
as his policy agenda in the early days of his presidency.
There is much geopolitical
uncertainty across the globe,
but sombre as it may sound,
that has been a constant in
recent years and one that has,
thus far, not constrained strong
equity market performance.”
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Henderson European Trust plc Annual Report
Fund managers’ report continued
How today’s market structure
informs our thinking
Fundamental active investors now account for only
10-20% of daily traded volumes in the European equity
market. As such, we are minority participants in a market
which is dominated by passive funds and hedge funds
with very short-term strategies. Neither of these are
equipped to take the long-term view, to take the other
side of the trade when panic sets in. The result is outsized
reactions to economic, market or company news that are
not reflective of long-term prospects or value. Conversely
though, that means there is opportunity for those of us
with the ability – the luxury – to express a long-term view.
Our summer purchase of Ryanair is a case in point. We
bought shares on the days when the numbers of sellers
vastly outweighed the buyers.
We also believe that this is the lens through which we
should view the changeable fortunes of technology shares
over the summer. For example, shares in ASML – a major
player in the AI supply chain and one of Europe’s largest
companies – suddenly declined by 30%. This was despite
so-called ‘hyperscalers’, the technology giants like
Microsoft and Alphabet ploughing billions into AI, indicating
that they are planning to maintain or even grow their
expenditure on the technology.
As such, a narrative emerged explaining that the sell-off
stemmed from concern over a lack of return on investment
for the hyperscalers. Our simple view is: it is too early to
tell what the return will be, but either way we do not expect
them to stop investing. That alone is sufficient to ensure
plentiful revenues flow to the supply chain, such as our
investments across semiconductor capital equipment,
building materials and industrial equipment (which
collectively add up to over 15% of the Company’s NAV).
As for that summer sell-off, it reaffirmed the ‘blunt tool’
that is the short-termism of a majority of participants
in the market.
Outlook
We believe that we are seeing the conditions for a
catch-up in those underperforming cyclical areas of
the equity market thanks to: 1) China’s recent efforts to
stabilise its economy, 2) lower interest rates filtering
through the global economy, and 3) encouraging
datapoints suggesting ongoing vigour in the US economy.
There is much geopolitical uncertainty across the globe,
but, sombre as it may sound, that has been a constant in
recent years and one that has, thus far, not constrained
strong equity market performance.
Finally, a word on our home continent, which is suffering
an identity crisis of sorts relating to its role in the world,
its poor demographics, its high public debt levels and
its lagging economic growth. While you may have
expected us to dwell in this commentary on the state
of the European political landscape at a time of great
uncertainty, the impact of this on our portfolio is relatively
limited. This reflects the very nature of the companies
we invest in – global operators that happen to be listed
in Europe. The most pertinent factor is the geographies
from which they draw revenues, which are happily very
diversified. As such, your Company is positioned to benefit
from any improvement in economic sentiment and activity.
Tom O’Hara and Jamie Ross
Fund Managers
11 December 2024
We believe that we are seeing the conditions for a catch-up in those
underperforming cyclical areas of the equity market.”
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Henderson European Trust plc Annual Report 2024
Strategic report
A snapshot of our portfolio
Classification of investments and portfolio weighting as at 30 September 2024
Sector breakdown
Sector exposure at 30 September
As a percentage of the investment portfolio excluding cash
2024
%
Sector over /
underweight
1
%
2023
%
Industrials
27.3 8.7 26.7
Health Care
17.4 0.8 11.6
Technology
13.7 3.9 8.9
Financials
13.2 -6.3 6.2
Consumer Discretionary
9.6 -2.5 12.0
Consumer Staples
7.0 -0.3 6.5
Energy
3.5 0.1 8.9
Basic Materials
2.5 -1.9 14.1
Utilities
2.3 -1.7 –
Telecommunications
1.9 -1.2 –
Real Estate
1.6 0.4 –
UK Govt bonds
– – 5.1
Regional breakdown
Geographic exposure at 30 September
As a percentage of the investment portfolio excluding cash
2024
%
Country over /
underweight
1
%
2023
%
France
22.4 1.2 30.5
Germany
20.8 3.5 16.8
Switzerland
13.8 -5.3 5.0
Netherlands
7.8 -1.1 11.2
Denmark
7.4 1.2 6.0
United Kingdom
7.4 7.4 6.8
Ireland
6.1 5.5 –
Belgium
4.0 2.0 6.2
Spain
3.6 -2.0 1.4
Italy
3.3 -2.5 1.4
Finland
1.8 -0.2 8.4
Austria
1.6 1.1 –
Norway
– -1.2 2.9
Sweden
– -6.7 3.4
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sector 00%
Sources: Janus Henderson and Factset
1 Relative to the FTSE World Europe (ex UK) Index at 30 September 2024, excluding cash
1 Relative to the FTSE World Europe (ex UK) Index at 30 September 2024, excluding cash
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Henderson European Trust plc Annual Report
A snapshot of our portfolio continued
Investment portfolio as at 30 September 2024
Ranking
Company Sector
Country
of listing
Valuation
2024
£'000
% of
portfolio2024 2023
1 2 Novo Nordisk Pharmaceuticals and Biotechnology Denmark 41,930 6.07
2 – ASML Technology Hardware and Equipment Netherlands 34,798 5.03
3 17 SAP Software and Computer Services Germany 31,184 4.51
4 4 TotalEnergies Oil, Gas and Coal France 24,622 3.56
5 19 Siemens General Industrials Germany 23,147 3.35
6 – UniCredit Banks Italy 23,012 3.33
7 25 Deutsche Boerse Investment Banking and Brokerage Services Germany 19,999 2.89
8 – Munich Re Non-life Insurance Germany 19,512 2.82
9 24 Anheuser-Busch InBev Beverages Belgium 18,885 2.73
10 – CRH Construction and Materials Ireland 18,877 2.73
11 – Sanofi Pharmaceuticals and Biotechnology France 18,857 2.73
12 – BNP Paribas Banks France 17,815 2.58
13 10 Schneider Electric Electronic and Electrical Equipment France 17,192 2.49
14 – Novartis Pharmaceuticals and Biotechnology Switzerland 17,036 2.46
15 – Alcon Medical Equipment and Services Switzerland 16,833 2.43
16 6 Safran Aerospace and Defence France 16,448 2.38
17
– National Grid Gas, Water and Multi-utilities
United Kingdom 16,195 2.34
18 7 Airbus Aerospace and Defence France 15,578 2.25
19
– Compass Travel and Leisure
United Kingdom 15,493 2.24
20
8 LVMH Moët Hennessy
Louis Vuitton Personal Goods France 15,141 2.19
21 34 Infineon Technology Hardware and Equipment Germany 14,905 2.15
22 – SGS Industrial Support Services Switzerland 14,327 2.07
23 35 ASM International Technology Hardware and Equipment Netherlands 13,782 1.99
24 – Cellnex Telecom Telecommunications Service Providers Spain 12,982 1.88
25 – Aena Industrial Transportation Spain 12,179 1.76
26 – KONE Industrial Engineering Finland 12,163 1.76
27 – Ryanair Travel and Leisure Ireland 11,974 1.73
28 16 Danone Food Producers France 11,697 1.69
29 – Roche Pharmaceuticals and Biotechnology Switzerland 11,592 1.68
30 9 Holcim Construction and Materials Switzerland 11,387 1.65
31
– British Land Real Estate Investment Trusts
United Kingdom 11,252 1.63
32 – Smurfit Westrock General Industrials Ireland 11,087 1.60
33 – BAWAG Banks Austria 10,607 1.54
34 13 Adidas Personal Goods Germany 10,392 1.50
35 – Beiersdorf Personal Care, Drug and Grocery Stores Germany 10,390 1.50
36 – VAT Group Electronic and Electrical Equipment Switzerland 10,143 1.47
37 5 Saint-Gobain Construction and Materials France 9,829 1.42
38 – DSV Industrial Transportation Denmark 9,267 1.34
39 – Syensqo Chemicals Belgium 8,991 1.30
40
– Anglo American Industrial Metals and Mining
United Kingdom 8,085 1.17
41 – Hermès Personal Goods France 7,529 1.09
42 – Rheinmetall Aerospace and Defence Germany 7,456 1.08
43 – Nestlé Food Producers Switzerland 7,222 1.04
44 – Galderma Pharmaceuticals and Biotechnology Switzerland 7,028 1.02
45 – Bayer Pharmaceuticals and Biotechnology Germany 6,988 1.01
46 – Stellantis Automobiles and Parts Netherlands 5,689 0.82
Total listed equity investments at fair value 691,497 100.00
The number of stocks held may increase above 45 for a limited time period if necessary to enable operational settlement of sales and purchases in the
portfolio. For this reason the portfolio temporarily held 46 stocks as at 30 September 2024.
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Case studies
Travel & Leisure
Country of listing
Ireland
Proportion of portfolio
1.73%
What do they do?
Ryanair operates low-fares/no-frills short-haul routes in Europe. In
operation since 1985, and based in Dublin, Ryanair began to introduce the
low-fares operating model between Ireland and the United Kingdom in 1991.
Investment case
We are cautious about prospects for companies selling consumer
products including food, luxury goods, spirits and so on, especially those
that appear to have pushed hard on pricing. However, we also need to
be aware that lower interest rates could improve consumer sentiment,
particularly amongst lower-income households. Our logic is that as
inflation eases, wage growth catches up and mortgage and loan rates
come down, consumers might feel more inclined toward the odd treat.
A meal and drinks out, some clothing, a holiday, or perhaps all three
in combination. We think the companies selling these more modest
‘discretionary’ items could be first to see the benefit of improving
consumer sentiment. This notion prompted our purchase of Ryanair
in the wake of its profit warning in July (when it indicated summer ticket
prices would be down on the prior year). Ryanair is a high-quality
business in a tough sector, the lowest cost operator in short-haul
European flights, in which ‘value for money’ is a key competitive edge.
There are some important features to its business model: it uses
‘dynamic pricing’ algorithms, meaning ticket prices change in response
to consumer demand on its website. It also sells around 50% of the seats
for a flight around 4-6 weeks before take-off. In other words, consumer
sentiment is rapidly reflected in Ryanair’s revenue and operating profits.
The panic-stricken sell-off presented us with a great opportunity to buy a
long-term winner in anticipation of brighter days for the consumer. It also
helped that, as Ryanair is solely European-focused, we were not required
to take a view on the Chinese economy.
Ryanair
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Henderson European Trust plc Annual Report
Case studies continued
Industrial Support Services
Country of listing
Switzerland
Proportion of portfolio
2.07%
What do they do?
SGS is the world leader in inspection, verification, testing and certification,
in industries such as resources, consumer companies and agriculture.
SGS’s business is operated across 11 major industries through five
business lines. The group has a network of over 2,600 offices and
laboratories in 116 countries and employs around 99,600 people.
Investment case
SGS shows the importance of company management in our investment
decisions. SGS is undoubtedly a high-quality company. It is a clear
beneficiary of increasingly complex regulatory compliance across a
raft of industries. Over the last decade, SGS has produced near best-in-
class organic growth, but has moved from earning among the highest
margins in the industry to among the lowest. In our view, this suggests
a period of undermanagement; we believe that the company can
significantly improve its operational performance over time. The catalyst
for improvement arrived in December 2023 when Geraldine Picaud
joined the company, becoming CEO in March this year. Her prior track
record (as CFO) was exceptional, especially given that her previous
industry is renowned as difficult to navigate with strong competitive
pressures. Since joining SGS, she has made significant changes to the
management team, has improved the financial incentive structure, laid
out a credible plan for improving cost efficiency and has refocused the
organisation on structural growth. We expect this to be rewarding for
shareholders over time.
SGS
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Henderson European Trust plc Annual Report 2024
Strategic report
How we build our portfolio
Fundamental stock picking approach
We are stock pickers; most of our analytical effort is spent trying to find the right businesses to
back. Over time, much of our outperformance has been driven by picking the right companies,
and in Europe we have an excellent, varied and reasonably valued universe within which to
search for ideas. Typically, we like companies that generate enough cash to self-fund their
growth but we try to avoid overpaying for this, and other quality characteristics.
Sectors and themes also matter
In addition to picking the right stocks, we also spend time thinking about how we should be
positioning the portfolio on a sectoral and thematic basis. Often, our sector and thematic
exposure is driven by our stock picking approach rather than the other way around. We aim
to generate outperformance through these decisions as well as through our stock selection.
We believe in cycles and will often look to invest at points of positive inflection.
Style is an output, not an input
We see ourselves as a core proposition. At times we may look ‘value’ in nature, and at times
‘growth’ or ‘quality’ in nature. We deliberately do not have a fixed style – any overall style
characteristics at any given time are determined by the underlying investments within
the portfolio.
Company access, varied sources of research
Meeting with management teams is crucial; we conduct over 1,300 meetings every year.
We try to identify compelling leaders and look for a history of strong capital allocation.
Spreadsheet-based analysis only gets you so far. We also produce our own research,
we speak to experts, we use AI-powered functionality to improve our own productivity.
An open minded and flexible approach.
Be ready to be wrong, manage risk
You cannot invest successfully without being willing to be wrong. We do not focus on trying
to get everything right; instead, we focus on trying to minimise the damage caused by the
mistakes that we inevitably do make. Thesis creep is not tolerated, position sizing is closely
monitored, and overall exposures are carefully analysed.
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Henderson European Trust plc Annual Report
Business model
Investment objective
The Company aims to maximise total return from a portfolio of stocks
predominantly listed in Europe (excluding the UK).
Purpose
The Company’s purpose is to provide shareholders with long-term growth in income and capital through
investing in a portfolio of stocks listed in Europe and to make this form of investment widely accessible to
investors large and small.
Investment policy
Asset allocation
The portfolio is predominantly invested in stocks listed
in Europe (excluding the UK) and has a bias to larger
capitalised companies but may, within limits, be invested
in the stocks of mid and smaller capitalised companies
or in companies listed elsewhere, including the UK.
Stock selection is not constrained by the benchmark
and the stock weighting in the portfolio may be materially
higher or lower than the weighting of any index used for
performance comparisons, including in respect of
geographical allocation.
Actual weightings of stocks held in the Company’s portfolio
are based upon the Investment Manager’s views of total
return prospects.
The Company has adopted the following limits:
• The portfolio will contain between 35 and 45 stocks.
• European (excluding the UK) listed stocks will consist of
not less than 80% of net asset value (“NAV”) at the time
of investment.
• The Company will not hold more than 10% of the share
capital of any company at the time of investment.
• The portfolio has a maximum single stock weighting
of 10% of NAV of the portfolio at the time of investment.
• Exposure to smaller companies (with a market
capitalisation of less than €1 billion) is limited to
10% of NAV at the time of investment.
• The portfolio is not constructed with a yield target.
The Company may use financial instruments, known
as derivatives, for the purpose of investment and for
efficient portfolio management for up to 10% of NAV
at the time of entering the contract.
Gearing
The Company can borrow with the aim of achieving
a return that is greater than the cost of the borrowing.
The Company can borrow up to 20% of NAV at the
time the borrowing is assumed.
Other restrictions
It is the Company’s policy to invest no more than 15% of its
total assets in other listed closed-ended investment funds.
Structure
The Company fulfils its purpose by doing business as an
investment company under s833 Companies Act 2006,
and as a closed-ended investment vehicle, approved by
HMRC as an investment trust under s1158/59 Corporation
Tax Act 2010. The Company is also a public limited
company listed on the main market of the London Stock
Exchange, and as such is subject to the UK Listing Rules,
Prospectus Regulation Rules, Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority
(“FCA”) and the provisions of the City Code on Takeovers
and Mergers. A board of independent non-executive
directors governs the Company, delegates management
of the Company’s investments to the Manager, and
controls costs. The Company’s day-to-day functions,
including administrative, financial and share registration
services, are carried out by reputable third-party service
providers with established track records to deliver the
necessary services to the Company.
The framework of delegation provides the Company
with a cost-effective mechanism for delivering operations
whilst allowing the Company to benefit from the capital
gains treatment afforded to investment trusts. The closed-
ended nature of the Company permits the Fund Managers
to hold a longer-term view on investments and remain
fully invested while taking advantage of any illiquidity in
normal and volatile market conditions, as redemptions
do not arise in the way they would for an open-ended
vehicle. A significant advantage over other investment
fund structures is the ability to use leverage to potentially
increase returns for shareholders.
The Board is accountable to the Company’s shareholders
and directors are independent of the Manager.
Shareholders vote annually on the re-election of directors.
Stock selection
The Fund Managers use rigorous research to identify
high quality, attractively valued companies with strong
balance sheet and cash flow potential. Free cash flow
yields are an important valuation metric, rather than
simply price/earnings ratios or other performance
measures. The benchmark is the FTSE World Europe
(ex UK) Index in Sterling terms.
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Henderson European Trust plc Annual Report 2024
Strategic report
Business model continued
Values and culture
The board of directors follows high standards of
governance, with a culture based on openness
and integrity, combined with constructive challenge,
informed enquiry and a strong focus on shareholder
interests. The Board seeks to act in the best interests
of shareholders, making the most effective use possible
of the diversity of skills and experience of its members,
with consideration of the wider stakeholders’ interests.
This culture of openness and constructive challenge
extends to the Board’s interaction with the Manager,
being the Company’s most important service provider.
The Board expects the Manager and all other service
providers to hold values which align with the high
standards promoted by the Board.
The Company has policies and procedures in place to
maintain a culture of good governance, including regular
scheduled board meetings using wide-ranging agendas,
committee meetings on specific areas such as audit and
risk, and directorial activities such as conflicts of interest,
dealings in the Company’s shares, bribery and tax evasion.
At the date of this report, the Board comprises six directors,
four of whom are male and two are female. All directors
seek to properly discharge their responsibilities and meet
shareholder expectations in a transparent manner with
commitment of time and effort as required.
Apart from focusing on experience and collective
competence to task, the Board welcomes diversity
of views and experiences. The Board considers the
culture of the Manager and other service providers
through regular reporting and presentations to ensure
constructive engagement and challenge. The Board
recognises that the Manager fosters and maintains
an environment that values the talents and contributions
of individuals, and strives to cultivate and practise
inclusiveness for the long-term success of the
business and for the benefit of its employees,
investors and stakeholders more generally.
Management
The Company is an alternative investment fund in
accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”). The Board has appointed
Janus Henderson Fund Management UK Limited (“JHFM”)
to act as its alternative investment fund manager (“AIFM”).
JHFM delegates investment management services to
Janus Henderson Investors UK Limited (“JHUK”) in
accordance with an agreement effective from July 2014.
The management agreement with JHFM is reviewed
annually and can be terminated on six months’ notice.
During the year to 30 September 2024, the management
agreement was reviewed and the fee rates reduced as
part of the combination of assets of Henderson European
Focus Trust plc (“HEFT”) and Henderson EuroTrust plc
(“HNE”), referred to in this Annual Report as the
“HEFT/HNE combination”.
JHFM and JHUK are authorised and regulated by the FCA
and are part of the Janus Henderson Investors group of
companies. References to ‘Janus Henderson’, ‘JHI’ or the
‘Manager’ refer to the services provided to the Company
by the Janus Henderson Investors’ group of companies.
The Fund Managers are Tom O’Hara and Jamie Ross, who
draw on the resources of a wider European team at JHI.
The Fund Managers’ combined shareholding in the
Company at the year end comprised 186,500 shares.
The management agreement provides for the payment
of a composite management fee. Until 3 July 2024, the
fee was charged at 0.65% per annum of net assets up to
£300 million, and 0.55% of net assets above £300 million.
From 4 July 2024, on completion of the HEFT/HNE
combination, the management fee was reduced to 0.60%
of net assets up to £500 million, 0.475% of net assets from
£500 million up to £ 1 billion, and 0.45% of net assets equal
to and above £1 billion. Any holdings in funds managed by
Janus Henderson, of which there were none in the year,
are excluded from calculation of the management fee.
There are no performance fees and no separate
administration charges payable to Janus Henderson.
Ongoing charges
The Board believes that the forward-looking ongoing
charge ratio of 0.70% (2023: 0.80%) represents a
competitive cost for shareholders. As an alternative
performance measure, the calculation of the ongoing
charge is explained on page 97. The Board scrutinises
costs borne by the Company and compares the ongoing
charge ratio to that of its immediate peers in the AIC
Europe sector, against which it is competitive. The expected
decrease from the HEFT/HNE combination is only partially
reflected in the year ended 30 September 2024, as shown
by the 0.75% impact of expenses that is set out on page
97. The combination took place in the final quarter and
the Board expects the full impact in line with the 0.70%
ongoing charge to be reflected in 2025.
Borrowings
The Company has borrowings of EUR 35 million through
privately placed loan notes as well as access to a multi-
currency overdraft facility with HSBC Bank plc which
allows borrowings up to the lesser of £30 million and
10% of custody assets. At the year end, no borrowings
were drawn under the HSBC overdraft facility (2023: zero).
The Company may use leverage to increase returns
for shareholders, which provides a significant advantage
over other investment fund structures. The Board has
delegated responsibility to the Fund Managers for
deciding on the currency mix of the borrowings.
The Company may also ‘de-gear’ its investment
exposure by investing part of the portfolio in cash
or cash equivalents, if it is thought appropriate to
do so given the market circumstances at the time.
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Henderson European Trust plc Annual Report
Key performance indicators
To measure the success of the Company in meeting its objective and to
evaluate the performance of the Manager, the directors consider the following
key performance indicators (“KPIs”):
KPI Action
Performance
measurement
NAV total return
outperformance
During the year
1.3%
( compared to
the benchmark)
1.2%
(compared
to AIC Europe)
2.0%
(compared to
IA OEIC Europe)
Whilst portfolio construction is not constrained by the benchmark, the Board measures
performance of net asset value (“NAV”) total return and share price total return against
the FTSE World Europe (ex UK) Index (in Sterling) and against both the AIC Europe sector
and IA Europe ex-UK sector for open-ended investment companies (“OEICs”) as its peer
groups. The portfolio is not constructed with a yield target.
During the year under review, the Company’s NAV outperformed the benchmark
by 1.3% on a total return basis. Over five years, the Company’s NAV outperformed
the benchmark by 14.9%.
NAV total return against benchmark
190
170
150
130
110
90
70
50
Company NAV
Benchmark
Sep
2019
Sep
2020
Sep
2021
Sep
2022
Sep
2023
Sep
2024
During the year under review, the Company’s NAV outperformed the AIC and OEIC
Europe sectors by 1.2% and 2.0% respectively. Over five years, the Company’s NAV
outperformed the AIC and OEIC Europe sectors by 13.2% and 18.6% respectively.
NAV total return against peers
GBP
Sep
2019
Sep
2020
Sep
2021
Sep
2022
Sep
2023
Sep
2024
Company NAV
AIC Europe
1
IA Europe ex UK
200
150
100
50
1 Simple average NAV for the AIC Europe sector
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Henderson European Trust plc Annual Report 2024
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Key performance indicators continued
KPI Action
Performance
measurement
continued
During the year under review, the Company’s share price outperformed the AIC Europe
sector by 5.3% on a total return basis. Over five years, the Company’s share price
outperformed the AIC Europe sector by 17.3%, as shown in the graph below.
Share price total return performance
1
%
200
150
100
50
Sep
2019
Sep
2020
Sep
2021
Sep
2022
Sep
2023
Sep
2024
Company average
AIC Europe
sector average
Discount or
premium of
share price to
NAV per share
2
Repurchased
shares
2,376,191
(0.7% of issued
share capital)
This is the level of discount or premium at which the ordinary shares trade relative
to NAV per share. The Board has a pragmatic approach to both allotting shares and to
share buybacks and keeps its policy under review. The Board’s objective is to support
an orderly market in the Company’s shares in a manner beneficial to the long-term
interests of shareholders. The directors review the level of the Company’s discount to
NAV per share and average discount for the AIC sector at each board meeting and
regularly between meetings.
At 30 September 2024, the Company’s shares were trading at a discount to NAV of 9.1%.
Discount over 5 years against AIC sector weighted average
%
Sep
2019
Sep
2020
Sep
2021
Sep
2022
Sep
2023
Sep
2024
-4
-7
-10
-16
-13
Company
AIC Europe sector
In the year under review, the Company bought back 2,376,191 shares, being 0.7%
of issued share capital as at 30 September 2024.
3
Ongoing charge
The ongoing charge calculation is explained on pages 96–97. The Board presents an
alternative calculation to represent forward-looking costs of 0.70%, compared to the
impact of expenses on the current year of 0.75%, due to the HEFT/HNE combination
taking place during the year and the traditional calculation not being representative
of costs on an ongoing basis. The 2023 ongoing charge was 0.80%.
The charts and data on pages 1–3 also show how the Company has performed against these KPIs. These KPIs are
also explained in the alternative performance measures on pages 96–97.
1 Share price using mid-market closing prices
2 Calculated using mid-market closing prices
3 This figure does not include the 31,915,217 shares repurchased as part of the HEFT/HNE combination.
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Managing risks
The Board, with the assistance of the Manager, has carried
out a robust assessment of the principal risks facing the
Company, including those which would threaten its
business model, future performance, solvency, liquidity
in its shares and reputation. The assessment includes
consideration of economic and political risks, most of
which are outside the Board’s direct control. The Board
has drawn up a detailed matrix of risks facing the
Company, together with a strategic heat map charting
the top ten risks, which it has distilled into six categories
of principal risks, as shown on pages 21–23. To assist in
mitigating the decision-taking risks as far as practicable,
the Board has also put in place a schedule of investment
limits and restrictions, appropriate to the Company’s
investment objective and policy, which it reviews at
each board meeting.
Emerging risks
The Board considers closely changes to the risk profile
of the Company, arising from both internal and external
triggers, and examines emerging risks as part of its regular
review of the Company’s risk profile. The Board defines
emerging risks as potential trends, sudden events or
changing risks which are characterised by a high degree
of uncertainty in terms of occurrence probability and
possible effects on the Company. Once the emerging risks
become sufficiently clear, they may be treated as specific
risks and enter the Company’s matrix of risks.
For example, during the last 12 months the combination
of Henderson Eurotrust plc assets into the Company
constituted a specific risk to costs and performance.
The transaction was monitored very closely, managed
effectively and is no longer considered a specific
operational or performance risk.
The recent changes in the fiscal environment in the UK
are however considered a general risk of a heightened
nature, over which the Company has no direct control
but may have to engage in mitigating actions. Previously,
a perceived key risk was the transition of the lead fund
manager for the Company. With the retirement of John
Bennett, the transition to co-fund manager Tom O’Hara,
and latterly the addition of Jamie Ross as co-fund
manager, this has been managed successfully over
the last 18 months or more.
The Board receives regular and detailed reporting on
specific and emerging risks from the Manager and other
service providers. In addition, the Board receives reports
on specialist topics from professional advisers, including
lawyers and tax agents. These reports, as well as the
directors’ own experience, enable effective monitoring
of the risk landscape and changes to it. The Board
encourages a culture of anticipating and scanning
for direct and indirect market events and constructive
challenge to identify and manage risk, where it can,
including external risks which may need a rapid response.
The Board has concluded that the portfolio, investment
approach and operational requirements of the
Company have, to date, proven resilient and the
investment approach remains unchanged. The impacts
of geopolitical tensions affect the investment landscape,
as do borrowing levels in economies, relatively low growth
in developed economies and the threat of inflation, all of
which are factored into investment decisions. There are
specific risks in the UK environment that might impact on
investors and demand for the Company’s shares which
are also taken into consideration in managing the
Company’s share price rating, where possible.
The Company’s principal risks and mitigating steps are as follows:
Risk Controls and mitigation
Market
The Company’s absolute performance in terms
of NAV total return and share price total return is
dependent on the performance of the investee
companies and markets in which the Company
invests. Performance is also impacted by
currency and interest rate movements, as well
as by political and economic events, including
changes to the fiscal environment for
UK investors.
Investment risk is spread by holding a diversified portfolio of investee
companies, typically with strong balance sheets and good growth
prospects. The Company does not currently undertake any currency
or market movement hedging strategies, though it has the ability
to do so.
The Company’s investment strategy is reviewed formally by the
Board at least annually, and takes into account shareholder views,
developments in the marketplace and how the structure of the
Company is positioned to meet them.
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Financial
statements
Additional
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Strategic report
Managing risks continued
Risk Controls and mitigation
Investment performance
The relative performance of the Company
against its benchmark and European open
and closed-ended peers depends principally
on asset allocation and stock selection, which,
in turn, require investment skills. In exercising
these skills, the Manager is responsible
for adhering to the investment policy and
investment guideline restrictions set by the
Board and amended from time to time.
The Board is responsible for ensuring that the investment policy
is met. The day-to-day management of the Company’s assets is
delegated to the Manager under investment guidelines, with close
monitoring of the guidelines.
The Board meets the Manager on a regular basis and keeps
investment performance, in terms of both capital and income returns,
under close review. The Management Engagement Committee
reviews the Manager’s performance annually. Although the Company
is not invested against any income criteria, the net income of the
Company and the revenue reserves are monitored against dividend
pay-outs and anticipated future net income.
Investment performance is monitored over the short, medium and
longer term against the Company’s benchmark and against a wider
peer group of open and closed-ended investment vehicles investing
in listed European equities.
The Board also reviews the performance attribution analysis against
benchmark in detail, to understand the main drivers of performance
in reporting periods. The Fund Managers keep the global political and
economic picture under review as part of the investment process and
provide the Board with frequent updates to enable the directors to
monitor and manage risks of geopolitical disruption and global
economic risks. Climate risk is assessed within the individual stock
selection process and is reported within quarterly Fund Manager
board reports.
Business strategy and market rating
A number of factors, including the setting of an
appropriate investment proposition, changing
investor demand or investment performance
may lead to an increase or decrease in
demand for and/or supply of the Company’s
shares and will impact how the shares are
priced in relation to the Company’s underlying
NAV per share.
The Board monitors the Company’s ordinary share price relative to
NAV per share and reviews changes in shareholdings in the Company
to understand short or longer-term trends in supply of and demand
for the shares.
The Company is able, when appropriate, to issue or to buy back
shares to help maintain an orderly secondary market in the
Company’s shares, but not against any prescribed discount or
premium levels, other than avoiding dilution to existing shareholders’
interests through share issuance at a discount or buybacks at a
premium. The Board also monitors the rating of the Company’s
shares against other closed-ended investment companies in
the sector.
The liquidity of the portfolio is monitored and is considered sufficient
for the purposes of a closed-ended fund, including where the
Company buys back its own shares. During the year and since the
year end, the Company has bought back shares to help manage
the demand for and supply of shares and the market rating.
As part of the HEFT/HNE combination in 2024, the Company has
introduced the prospect of a periodic tender offer to shareholders
in the event that the Company underperforms its benchmark.
There will also be consideration of how the Company’s rating has
performed relative to the market in three years’ time. See pages
28–29 for more details.
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Risk Controls and mitigation
Gearing
The Fund Managers have authority to use
gearing in line with the Company’s investment
policy. In the event of a significant or prolonged
fall in equity markets, any gearing in place
would exacerbate the effect of the falling
market on the Company’s NAV and,
consequently, its share price. Gearing would
have the opposite effect in the event of
a significant or prolonged rise in equity
markets in which the Company is invested.
The Company’s investment policy sets a limit on borrowing of 20%
of net assets at the time the borrowing is assumed, and the Board
monitors the level of gearing at each meeting.
The Manager makes active use of the Company’s gearing with
close oversight of borrowings and cash management from the
Board when gearing is extended or contracted in relation to
different market conditions and as applied to different investment
and disinvestment opportunities.
Operational
The Company is reliant on third-party service
providers for all its operational activities,
including reliance on Janus Henderson as
investment manager, corporate secretary
and administrator to the Company.
The Company depends on the diligence, skill
and judgement of the Manager’s investment
team. Continuity of service of the team and
individuals in the team could impact the future
success of the Company.
Failure of third parties’ operational or internal
control systems could prevent the accurate
reporting or monitoring of the Company’s
financial position. Janus Henderson
subcontracts some of the operational functions
(principally those relating to trade processing,
investment administration and accounting)
to BNP Paribas.
Failure of controls could also impact the
Company meeting its regulatory obligations.
The Management Engagement Committee reviews each service
provider at least annually, and, in conjunction with the Audit and
Risk Committee, considers reports on internal controls, including any
reported breaches, throughout the year, from all the service providers.
This reporting covers such matters as business resilience and cyber
security risk as well as matters that are subject to review as part of
the annual audit of the Company.
Janus Henderson has a strong European Equities team, which
supports the Fund Managers in the management of the Company’s
portfolio. Constructive challenge, succession and continuity planning
are key elements of the management of the team and are reported
closely to the Board with consultation on any major changes.
The Board reviews the internal control structure and reporting for
the Company from all agents and meets with their representatives
throughout the year to make enquiry on the systems and controls.
The Board considers climate and environmental risks in respect of
operational capability in its review meetings with service providers.
Regulatory and reporting
The Company operates in a highly regulated
environment which could inter alia affect the
listing of the Company’s shares and the
Company’s tax status, as well as how the
Company conducts its affairs in the market
more generally.
The Company has strict reporting requirements
that need to be adhered to both internally and
externally to the market.
The Board is apprised regularly of impending regulatory and
reporting changes and monitors closely, through its various agents,
the Company’s adherence to existing requirements, including
maintaining investment trust and listed company status. The Board
is also kept aware of fiscal and other developments that might affect
shareholders’ interests.
The Board is kept informed of corporate governance developments
and, as far as practicable, adheres to corporate governance
guidelines that are applicable to an investment company.
Details of how the Board monitors the services provided by Janus Henderson and its other suppliers, and the key
elements designed to provide effective internal control, are explained further on pages 43–48. Note 15 contains further
details on the Company’s exposure to market risk (including market price risk, currency risk and interest rate risk),
liquidity risk, credit risk and how they are managed.
Managing risks continued
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Financial
statements
Additional
information
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Henderson European Trust plc Annual Report 2024
Strategic report
The Company’s viability
The AIC Code of Corporate Governance includes a
requirement for the Board to assess future prospects for
the Company, and to report on that assessment within
the Annual Report. The Board considers that certain
characteristics of the Company’s business model and
strategy are relevant to this assessment:
• the Board aims for the Company to deliver
long-term performance;
• the Company’s investment objective, strategy and
policy, which are subject to regular Board monitoring,
mean that the Company is invested mainly in readily
realisable, listed securities and that the level of
borrowings is restricted; and
• the Company is a closed-ended investment company
and therefore does not suffer from liquidity issues
arising from unexpected redemptions.
Also relevant are a number of aspects of the Company’s
operational agreements:
• the Company retains title to all assets held by the
custodian under the terms of formal agreements
with the custodian and depositary;
• revenue and expenditure forecasts are reviewed
by the directors at each board meeting; and
• cash is held with approved banks.
In addition, the directors have carried out a robust
assessment of the principal risks and uncertainties which
could threaten the Company’s business model, including
future performance, liquidity and solvency, and climate
change, and considered emerging risks that could have
a future impact on the Company. The Board takes into
account the liquidity of the portfolio, short-term and
structural gearing, the income stream from the portfolio,
and the Company’s ability to meet its liabilities as they
fall due. This includes consideration of how the forecast
income stream, expenditure and levels of reserves could
impact the Company’s ability to pay dividends to
shareholders. Detailed income and expense forecasts
are made over a shorter time frame. The nature of the
Company’s business means that such forecasts are
equally valid to be considered over the longer five-year
period as a means of assessing whether the Company
can continue in operation.
The directors assess viability over five-year rolling periods,
taking account of foreseeable severe but plausible
scenarios. This includes consideration of the duration of
the Company’s loan notes and borrowing facility and how
a breach of any covenants could impact the Company’s
NAV and share price. The Board has assessed the risks
associated with geopolitical, economic and health crises
in recent years, including the escalating conflict in the
Middle East and the ongoing war in Ukraine, and has
concluded that these events have not affected the
long-term viability of the Company, and its ability to
continue in operation, notwithstanding any short-term
uncertainty they have caused in the markets.
In common with investment companies generally, the
viability statement does not take into account corporate
events which might be initiated by the Company or to
which the Company might be subject, and where the
Company’s circumstances might be dramatically
changed. An investment company has relatively liquid
assets, compared to industrial or commercial companies,
and can, therefore, be subject to major and unexpected
strategic change. No such event or change affecting the
Company’s viability is known or currently in contemplation
by the Company and the application of periodic tender
offers does not affect that assessment.
The directors believe that a rolling five-year period best
balances the Company’s long-term objective, its financial
flexibility and scope with the difficulty in forecasting
economic conditions affecting the Company and
its shareholders.
Following completion of the HEFT/HNE combination
in July 2024, the Board has introduced a five-yearly
conditional performance-related tender offer,
and an additional discretionary tender mechanism
following the year ended 30 September 2027.
See pages 28–29 for more details.
Based on their assessment, and in the context of the
Company’s business model, strategy and operational
arrangements above, the directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
five-year period to September 2029.
The directors have also concluded that the Company has
adequate resources to continue in operational existence
for at least 12 months from the date of approval of these
financial statements being 31 December 2025, and it is
therefore appropriate to prepare these financial
statements on a going concern basis.
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Henderson European Trust plc Annual Report
Engaging with our stakeholders
Section 172 statement
The directors have the success of the Company for the benefit of members as a whole foremost in mind when making
decisions. Decisions are taken with the aim of achieving the Company’s objective and are based on information
provided by a range of sources. The impact on stakeholders is assessed as part of the deliberations, and different
stakeholders may be affected differently by each decision.
The table below sets out the primary ways in which the Board has engaged with the Company’s key stakeholders
during the year under review, in line with directors’ duties under s172 Companies Act 2006.
Stakeholder Engagement Outcome
Shareholders
The Board communicates with shareholders through
the annual and half-yearly reports, factsheets
and monthly commentary, press releases, videos
recorded by the Fund Managers and articles,
all made available on the Company’s website.
The Company also publishes regulatory
announcements which are linked through its website.
The directors meet with shareholders at the AGM,
which provides a forum for face-to-face debate
with the Board and Fund Managers as well as
online access to view the AGM.
The Board addresses shareholder correspondence
and reviews voting patterns at general meetings.
The Chair and other directors meet with
shareholders at their request, and always
welcome conversations.
The Fund Managers discuss the Company’s results
and performance during the year in a video
available at www.hendersoneuropeantrust.com and
are regular contributors to investor and joint broker
forums. The Fund Managers also have a programme
of investor (and potential investor) meetings with
institutions and wealth managers throughout the
year as well as being available on certain retail
investor forums.
The Chair invites shareholders and other
stakeholders to make contact directly.
Shareholders can write to the Chair at the
registered office (see page 100), or by email
to itsecretariat@janushenderson.com with any
feedback, queries or concerns. The Board reviews
all shareholder correspondence addressed to it.
The Board is pleased to invite shareholders to attend
the AGM and Fund Managers’ presentation for the
year ended 30 September 2024. More details are on
page 58, and in the AGM Notice on pages 89–93.
Clear communication of strategy and
the Company’s performance against
its objective helps shareholders make
informed decisions about their
investments, based on information on
short, medium and longer-term aspects
of the Company and its performance.
This should also help support
a consistent rating in the secondary
market for the Company’s shares.
Close interaction with shareholders
enables the Board to operate the
Company aligned with shareholders’
interests as a whole and for the
Company’s long-term success.
During the year there was discussion
with shareholders in connection with the
HEFT/HNE combination, and amongst
directors and advisers on how the
Company could be best positioned
following the transaction. This included a
reduced cost ratio, amendments to
liquidity provisions and a review of
investment policy and style, all designed
to give the Company an improved
platform going forward.
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information
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Henderson European Trust plc Annual Report 2024
Strategic report
Engaging with our stakeholders continued
Stakeholder Engagement Outcome
Fund management
group Janus
Henderson
Investors,
providing:
• investment
management
• accounting
administration
• professional
sales and retail
marketing
• corporate
secretarial
services
The Board regularly reviews performance against
the investment objective, policy and guidelines,
and receives presentations from the Fund Managers
and other representatives of the Manager at each
board meeting to exercise effective oversight of
the portfolio, performance and strategic objectives.
The Manager’s performance in all respects
is reviewed formally by the Management
Engagement Committee (“MEC”) each year.
The directors work closely with JHI outside scheduled
board meetings on matters relating to portfolio
management, administration and governance
oversight, including relationships with third parties
and engagement with other stakeholders. They meet
to develop strategy, including a sales and marketing
plan to promote the Company with the aim of
raising its profile which in turn helps raise its rating.
There was considerable activity during the year with
JHI in reviewing strategy against the backdrop
of the HEFT/HNE combination.
The Company is managed well and
receives appropriate and timely advice
and guidance for a competitive cost,
which was reduced during the year.
The directors monitor succession
planning within JHI for all key positions
supporting the Company. At the MEC
meeting in 2024, the directors assessed
the Manager’s performance and
service to the Board during the year,
its management of the HEFT/HNE
combination, as well as how fund
management responsibilities would
be shared following the combination.
The Board is pleased with the joint fund
management provided by Tom O’Hara
and Jamie Ross, supported by JHI’s
well-regarded European Equities team,
following completion of the combination
in July 2024. John Bennett, Fund
Manager of the Company since 2010,
retired from asset management during
the year, having been of considerable
assistance in the transition of
management responsibilities.
After thorough consideration and review
of the ongoing management of the
Company, the directors were satisfied
with the resource being applied
to a successful investment process.
The Manager’s portfolio activities and
the impact of the Fund Managers’
decisions are set out in the Fund
Managers’ Report on pages 8–11.
Other service
providers,
including:
• BNP Paribas as
accountant and
administrator
(outsourced by
the Manager)
• HSBC Bank plc
as custodian
and depositary
• Equiniti Limited
as registrar
• Winterflood
Securities Limited
and Deutsche
Numis as joint
corporate brokers
• Kepler Partners LLP
as independent
research provider
Representatives of all the main service provider
functions present regularly to the Board. The Company
contracts directly with certain service providers for
custodian, depositary and registrar services, and
indirectly with BNP Paribas for fund administration
and accounting services. The Manager maintains
the day-to-day relationship with all service providers.
Deutsche Numis was appointed as joint broker
during the year, alongside Winterflood Securities,
to add to corporate advisory and professional
investor support to the Company and as part of
the HEFT/HNE combination.
The Board and Manager work with the joint brokers,
including their research and sales teams, to provide
access to the market and liquidity in the Company’s
shares. The Board invites representatives of the joint
brokers, research provider and the Manager’s
marketing and sales teams, to provide regular
updates on shareholders and is provided with
analyses of shareholder movements.
All service providers are subject to an annual
performance review at the MEC.
The Company presents as a well-
supported investment company
with a good performance record.
Experienced and capable third
parties provide the services required
to be a well-functioning Company.
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Henderson European Trust plc Annual Report
Stakeholder Engagement Outcome
Investee
companies
The Board sets the investment objective, with
shareholder approval, and discusses stock selection,
asset allocation, performance and prospects
pertaining to investee companies, including strategy,
current trading and stewardship issues, with the
Fund Managers at each board meeting.
The Manager has a dedicated Responsible
Investment and Governance Team, which supports
the Fund Managers in the investment process and
engages with investee companies on behalf of the
Company to exercise good stewardship practices
on matters including stewardship and voting
at company meetings.
The Fund Managers have conducted
meetings with all portfolio companies’
management teams in the past year
to enable them to interrogate current
trading and prospects for their
businesses and engage over any issues.
In this way the Company is a responsible
and engaged investor. The Company
votes its holdings in most circumstances
when a shareholder vote arises.
Lenders
• Loan noteholder
• HSBC Bank
The Company maintains borrowings at low rates
through the use of privately placed loan notes and
an overdraft facility with HSBC to enhance returns.
The Company confirms compliance with the
covenants and restrictions of its gearing facilities
each month.
JHI provides the Board with regular financial
covenant compliance validation and financial
reports. The Company maintains a good
relationship with its lenders.
The Board monitors borrowing, and
through its financial reporting to
stakeholders, provides validation of
compliance with lending limits. The
Company holds loan notes at a blended
rate of 1.57%, as the directors believe this
financing provides very attractively
priced, long-term capital for the benefit
of shareholders (see page 18 for
more details).
Following the HEFT/HNE combination,
no additional structural borrowing
was assumed.
Communities and
the environment
The Board mandates the Manager, supported by
its governance function, to engage with investee
companies, when and where appropriate on ESG
matters in line with good stewardship practices, and
with an approach agreed with the Board. The Board
is also conscious of the importance of providing
an investment product which meets the need
of its investors, including retail investors.
The Board is conscious of the need to
take appropriate account of broader
stewardship concerns and for the
Company to act as a good corporate
citizen. An investment approach that
meets the needs of investors provides
a service valuable to the communities
in which the Company operates.
See the company engagement section
on pages 30–34 for more details.
Engaging with our stakeholders continued
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statements
Additional
information
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Henderson European Trust plc Annual Report 2024
Strategic report
Stakeholder Engagement Outcome
Potential investors
The Board and Manager liaise to engage with the
wider investor community through various forums
to understand their requirements in addition to
those of the current shareholders.
The material made available to current
shareholders, as set out at the top of this table on
page 25, is also publicly available for the benefit
of potential investors.
By understanding the Company’s
activities, performance, risks and
prospects, potential investors will
be able to make informed decisions
about their investments.
Legislators,
regulators,
stock exchanges,
Association of
Investment
Companies (“AIC”)
Where required, the Board, or its agents on behalf
of the Company, consult or seek clearance from
the appropriate regulatory authority.
The Company is a member of the AIC, as
representative body for investment companies.
The AIC supports members by providing guidance
on issues specific to investment companies,
including on accounting and company law matters,
and running events for directors and company
secretaries of its member companies. The directors
also participate in AIC consultations on key industry
topics that may affect the Company and AIC
work programmes.
The Company conducts its business
as a good and active corporate citizen
meeting its regulatory obligations as
well as voluntary governance guidance.
The AIC’s support to members assists
the Board in its discussions and decision
making, and helps disseminate information
about the Company more widely, e.g.
forthcoming investment company AGMs:
www.theaic.co.uk/upcoming-meetings
During the year, the Board worked
with the Manager and industry peers
to participate in the PRIIPs consultation,
giving the Company a voice in the
regulatory environment.
The HEFT/HNE combination, publication
of a prospectus and associated
documentation for the Company
required close review and scrutiny by
the UK Listing Authority, as is typical for
transactions of this type and substantial
share issuance.
Board decision making
The Board aims to act in the best interests of shareholders
as a whole and to have regard to other factors which
have a broader impact on stakeholders and the wider
community. The Board takes into consideration the
Company’s purpose, investment objective and investment
policy as well as the interests of the Company’s
stakeholders when discussing matters and making
decisions. In addition to regular, detailed discussions
about the Company’s investment portfolio, strategy and
market performance. The following are examples of the
key discussions held and decisions made by the Board
during the financial year ended 30 September 2024:
• HEFT/HNE combination
On 14 March 2024, the Company announced that it had
agreed terms with the Board of HNE for a proposed
combination of the assets of the two companies. The
scheme of reconstruction completed on 4 July 2024.
Further details of the transaction and the benefits to
shareholders are in the Chair’s Statement, including
lower management fees, a five-yearly performance-
related tender, the possibility of an additional
opportunity to realise some investment after three
years, a lower ongoing charges ratio with fixed costs
spread over the larger asset base, and enhanced
liquidity, as the scale of the Company should improve
the attractiveness of its shares. The Board believes
that the combined fund management style of the two
Fund Managers Tom O’Hara and Jamie Ross, and new
investment objective and policy, provide Janus Henderson
with greater flexibility to achieve the Company’s
objective and is, therefore, in the best interests
of shareholders.
In its discussions and negotiations with the Manager,
the Board of both companies focused on optimal
financial terms to ensure they were in the best interests
of their respective shareholders. In particular, the
directors arranged for the shares issued to be at
formula asset value (“FAV”) as defined in the scheme
documents and for the transaction costs to be paid
by the Manager under any level of rollover, thereby
ensuring that shareholders would be protected and
there would be no dilution to the Company’s NAV per
share or income paying capacity. The HEFT/HNE
combination followed from months of preparation and
detailed examination of potential outcomes, risks of
transition and with the objective of improved
circumstances for both sets of continuing shareholders,
as well as the opportunity to exit the companies for
cash at relatively close to NAV for a proportion of the
share registers. The market commentary was positive,
as well as the support obtained from shareholders to
approve the transaction.
Engaging with our stakeholders continued
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Henderson European Trust plc Annual Report
• Share buybacks
As set out in the Chair’s Statement, the Board’s aim
is to have the the Company’s share price subject to
reduced volatility and to encourage an orderly and
liquid market in the Company’s shares, both for those
wishing to buy and for those wishing to sell. The Board
keeps the level of discount and make up of ownership
under regular review, and this was part of the
assessment of the amount of stock that should be
made available under the cash exits when the HEFT/
HNE combination was transacted. The Company’s
discount, that of its immediate competitors in the AIC
Europe sector and the discount of the investment trust
sector as a whole are considered at each meeting.
Recent discussions and advice have resulted in the
repurchase of 2.4 million shares during the year under
review, excluding those repurchased pursuant to
the HEFT/HNE combination tender offer. The discount
narrowed from 11.9% at the start of the financial year
to 9.1% at the end of it. The buyback of shares has
continued post year end, as explained in the Directors’
Report on page 57.
• Marketing and promotion
The Board approved an increase in the Company’s
marketing budget to promote the Company to a wider
audience, primarily through targeted digital advertising.
The Board also negotiated a significant additional
contribution from JHI to paid advertising over the
coming year. With a clear messaging framework
initiated after the HEFT/HNE combination and a fresh
redesign of the Company’s website and annual report
template, the marketing activities are intended to
increase understanding of the Company among
its stakeholders as well as endeavouring to reach
new investors.
• Dividends paid to shareholders
The amount of final and interim dividends to be paid
are an important part of Board decision taking, both
for the current year and looking ahead, with revenue
reserves to provide for sustainability of dividends paid.
The Company’s normal dividend cycle was changed
during the year to take account of the HEFT/HNE
combination and to result in broadly the same amount
received by shareholders in the Company throughout
the period. The directors assessed the quantum of the
dividends proposed at interim and final stages and the
strength of the Company’s income generation based
on net income forecasting. This change in dividend
cycle helped to ensure that the total dividend payable
for the year will be covered by current-year income
based on the number of shares in issue, excluding
those held in treasury. Earnings per share were 4.4p
in the year under review (2023: 4.3p).
Further considerations around the total dividend
are set out in the Chair’s Statement on page 5.
• Reclassification of reserves
In January 2024, the Company sought shareholder
approval to cancel its share premium account and
capital redemption reserve to provide the Company
with greater distributable reserves. This was particularly
important with the possibility of future buybacks of
share capital or tender offers where distributable
reserves were required, leaving the revenue reserves to
meet the needs of dividend payments. The Board has
decided to seek shareholder approval again in January
2025 to cancel the share premium account, created
through the issue of new shares, as a distributable
reserve, as this will provide greater flexibility in the future
including for any tender offers or returns of capital.
• Discount management policy
As explained in the Prospectus released in May 2024,
the Board has established a five-yearly performance-
related conditional tender for up to 25% of share capital
as part of the HEFT/HNE combination. The tender will
exclude shares held in treasury and be made at a 2%
discount to NAV less costs if, over the five years to
30 September 2029 (and over subsequent five-year
periods), the NAV per share total return does not equal
or exceed the total return of the benchmark index.
Any conditional tender offer would be subject to
shareholder approval at the relevant time and
prevailing legal and regulatory requirements.
Additionally, the Board will consider whether it would
be in shareholders’ interests to be offered an additional
opportunity to realise some of their investment after an
initial three-year period. These measures are designed
to give shareholders confidence on liquidity for those
who want to sell their shares and also to provide those
who want to buy shares some confidence on share
price volatility not being too extreme.
Engaging with our stakeholders continued
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Strategic report
It is during the in-depth research stage of the investment
process where the Fund Managers will make an assessment
on ESG considerations for each stock or sector, where
material. Their analysis tends to focus on the rate of
change rather than existing scores. They want to gain a
good understanding of what procedures and initiatives
the company is putting in place to improve its ESG
practices. This research is often far ranging, including
topics such as board composition and staff remuneration
as well as carbon targets.
Whilst headline ratings from external providers can be a
useful starting point, the Fund Managers caution investors
from giving them too much significance. They are often
backward looking and external providers face huge
difficulties in aligning subjective topics contained within
the ESG arena with a scoring system used to compare
stocks. This has resulted in a high level of dispersion in
ratings depending on the agency.
These are just a few of the reasons why the Fund
Managers choose to focus on the delta as well as
the absolute when it comes to ESG integration in stock
selection. The Company integrates ESG but does not
pursue a sustainable investment strategy or have a
sustainable investment objective or otherwise take ESG
factors into account in a binding manner. ESG integration
is the practice of incorporating material environmental,
social and governance information or insights in a
non-binding manner alongside traditional measures into
the investment decision process to improve long-term
financial outcomes of portfolios. ESG-related research is
one of many factors considered within the investment
process and in this report we seek to show why it is
financially relevant.
Voting
The Board believes that voting at general meetings
is an integral part of exercising responsible corporate
stewardship and provides an effective means of signalling
shareholder views on board policy, practices and
performance. Voting responsibility has been delegated
to the Manager for the rights attached to the shares held
in the Company’s portfolio. The Manager votes actively
at shareholder meetings and engages with companies
as part of the voting process.
The decision on how to vote is guided by the best interests
of investors and based on an in-depth understanding of
the respective companies’ operations. Voting decisions
are made in keeping with the provisions of the Manager’s
Responsible Investment Policy which is publicly available
at www.janushenderson.com. To retain oversight of the
process, the directors receive reporting at each board
meeting on how the Manager has voted the shares
held in the Company’s portfolio. The directors review
the Manager’s Responsible Investment Policy,
Proxy Voting Policy and Procedures at least annually.
Defining ESG
Environment
Environmental factors include climate
change, energy efficiency, resource
depletion, water and waste management.
Social
Social factors include employee and
community relations, diversity, quality
of life, enhancements in knowledge
and advances in supportive technology
for improved sustainability.
Governance
Governance factors include mitigating
risks such as bribery and corruption,
questioning board diversity, executive
pay, accounting standards, shareholder
rights, and positively influencing
corporate behaviour.
ESG report
Company engagement
The Janus Henderson European Equities team’s
experience in the European market has created a
deep knowledge base. Management analysis is further
supplemented by a body of increasingly sophisticated
data related to environmental, social and governance
(“ESG”) factors, brokers’ research and company meetings.
The European Equities team works closely with the
in-house Responsible Investment and Governance Team
to screen portfolios for ESG issues and to identify broader
themes for discussion in making and holding investments.
The Fund Managers believe that if they were to invest
in companies they judged to be systemically low
scoring or failing businesses from an ESG perspective,
this would detract from investment performance.
They consider there to be a clear link between good
corporate governance – in each of the E, S and G –
and the cost of capital applied by global investors.
The Fund Managers’ approach is built upon fundamental
stockpicking blended with sector themes. This allows them
to isolate investment decisions from market noise;
however, the resulting approach can be contrarian, and
can lead to investing in change. ESG factors can play a
role in identifying these trends in corporate change and
sector development.
30
Henderson European Trust plc Annual Report
ESG report continued
The Fund Managers have a strong focus on good
governance practice and an active approach to voting.
To influence decision making at board level where
appropriate, the Fund Managers participate in
consultations with our portfolio companies ahead of or
after contentious AGM resolutions. Where appropriate, the
Manager will vote against resolutions at general meetings.
In total, the Company voted at 46 shareholder meetings
during the year, being 97.9% of portfolio companies’
general meetings. At 12 of these meetings (25.5%), the
Company placed a vote against management.
The Company voted against 46 resolutions in total,
being 5.2% of all resolutions voted on during the year.
Voting record
Meetings with
one or more
votes against
management 26%
Meetings where
all resolutions were
voted in favour 74%
In terms of resolutions not supported in the year to
30 September 2024, the key issues which the Fund
Managers voted against concerned compensation
and director re-election due to overboarding, diversity
and independence.
Director-related 62%
Compensation 20%
Other business
1
6%
Takeover-related 6%
Capitalisation 4%
Audit-related 2%
Source: Janus Henderson using Institutional Shareholder Services
(“ISS”) categories
Note: Some meetings had more than one vote against management.
1 The Manager routinely votes against proposals labelled ‘other business’.
Several European companies put forward proposals labelled ‘other
business’ which is a request to allow the board and shareholders to
raise issues not included in the notice of meeting and address them
at the meeting. As it could potentially lead to subsequent approval
of items without prior disclosure to minority shareholders, JHI routinely
votes against these items.
Stewardship
Stewardship is an integral and natural part of JHI’s
long-term, active approach to investment management.
Strong ownership practices, such as management
engagement and proxy voting, can help protect and
enhance long-term shareholder value. JHI supports
stewardship codes and broader initiatives around the
world, including being a founder signatory of the
UN Principles for Responsible Investment, and is a
signatory of the UK Stewardship Code. The intensive
research by fund managers and analysts involves
conducting thousands of interviews with senior executives
and chairs of companies throughout the world each year.
These teams develop long-term relationships with the
management of firms in which they invest. Should
concerns arise over a firm’s practices or performance,
they seek to leverage these constructive relationships
by engaging with company management or expressing
their views through voting on management or shareholder
proposals. Escalation of the engagement activities
depends on a company’s individual circumstances.
The environment
The European Equities team engages with portfolio
companies on environmental matters where relevant.
As an investment trust, the Company’s own direct
environmental impact is minimal. The Company has no
greenhouse gas emissions to report from its operations,
nor does it have responsibility for any other emissions-
producing sources under the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations 2013.
The Company’s indirect impact occurs through its
investments and the Fund Managers monitor the carbon
footprint of the portfolio as a measure of its carbon
intensity. For these reasons, the Board considers that the
Company is a low-energy user under the Streamlined
Energy & Carbon Reporting regulations (“SECR”) and is
not required to disclose energy and carbon information.
The Manager recognises the importance of managing
its operational activities in a sustainable way and
minimising any adverse impact on the environment.
In 2021, JHI reached its three-year target to reduce its
carbon footprint by 15% per full-time employee (“FTE”)
from 2018 levels. In 2022, using guidance from the
Science-Based Target Initiative, JHI set ambitious new
five-year reduction targets versus a 2019 baseline and
per FTE:
• reduction target of 29.4% in Scope 1 (fuel) and Scope 2
(electricity) emissions;
• reduction target of 17.5% in Scope 3 (business travel,
freight, paper, water, waste) emissions; and
• reduction target of 17.5% on water and waste
consumption by FTEs.
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Strategic report
Water usage amongst the
beverage companies
Earlier in the year, JHI’s Responsible Investment and
Governance Team conducted a piece of thematic
research on the issue of water risk within the brewery
and spirits industry. This work involved engaging
with several companies across the globe, including
Anheuser-Busch InBev, a long-standing investment
in the Company’s investment portfolio.
The aim of the thematic research was to establish
how these companies think about water usage,
and how they deal with the issue of water as a
diminishing resource. Water is extremely important
to these companies and as well as being used in
many processes in the production of beverages, water
forms a significant portion of the beverage itself. In the
case of beer, which is most relevant to Anheuser-Busch
InBev, it takes up to 6 litres of water to make each litre
of beer.
Water usage in beer production
Litres of water per litre of beer
1
0
1
2
3
5
4
6
7
Service
Boiler fed
General purpose
Site maintenance and hygiene
Process
• Washing and sterilising
vessels and pipes
• Refrigeration
Brewing
Direct water content of beer
Source: Brewer World and JHI 2023
1 Range = 2–8 litres
All major European listed brewers were engaged with
and the team observed strong performances from
these companies in setting site-specific water targets,
conducting robust scenario analysis and in engaging
closely with their supply chains.
By the nature of being the largest brewing company in
the world, with a greater than average skew towards the
developing world, it was no surprise to see that Anheuser-
Busch InBev used more water than Heineken and
Carlsberg and also had a much higher exposure to water-
scarce regions. However, on measures of water efficiency,
the three companies had similar statistics.
• Anheuser-Busch InBev withdraws more water than
Heineken & Carlsberg combined (almost twice as
much as Heineken), this is across all water sources –
surface water, groundwater, third-party water sources,
and all volumes have a higher growth trajectory due
to higher levels of production growth.
• Anheuser-Busch InBev also has a much higher
exposure to water-scarce regions vs peers, with 39
facilities in water-scarce regions compared to 31 for
Heineken (5 in Mexico classified as high risk) and 16 for
Carlsberg. In terms of exposure, Anheuser-Busch InBev
(as well as Diageo and Molson Coors Brewing) stated
between 26-50% of water was withdrawn from areas
with water stress, compared to peers with less than
25% exposure to areas with water stress.
• In terms of water efficiency (revenue/withdrawal
volumes), all three companies were quite similar,
with Anheuser-Busch InBev (0.9), then Heineken (1.1)
then Carlsberg (1.2) However using revenue as the
baseline is probably not as useful as using production
output – i.e. understanding water withdrawal per litre
of beer. The three brewers have all set targets for this
(using a water efficiency ratio of hectolitres of water
used per hectolitre of production):
– Heineken have set a 2030 target of 2.9hl/hl and
2.6hl/hl at water-stressed sites (down from 2.8hl)
– Anheuser-Busch InBev have a 2025 target to achieve
2.5hl/hl and 2.0hl/hl at high water-stressed sites
– Carlsberg have set the most ambitious target of
reaching 1.7hl/hl across water-stressed areas by 2030
– increasing efficiency by 50% from 2015 baseline
Case study
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Henderson European Trust plc Annual Report
Case study
Once the team had established how much water these
companies were using and how efficient their water
usage was, they turned their attention to the question
of what these companies were doing to try to mitigate
water-related risks.
• Carlsberg has flagged a high risk of regulatory
change (policy-based water restrictions) in certain
markets that they operate in, namely China, India, Laos
and Cambodia. The company is a leader in operational
efficiencies as well as having strong water
replenishment programmes.
• Heineken has identified extended droughts in Mexico,
Spain and Nigeria as representing high operational
risk with the potential for more sites to become
water-stressed. The company is focusing on
collective action to improve water stress resilience,
investing in public/private partnerships to support
local communities.
• Anheuser-Busch InBev is focused on both barley
supply chains and assets in countries such as
Mexico, South Africa and Brazil. The company’s
yield models predict that by 2040 water stress may
reduce barley yields in India, South Africa and Mexico
by 20-40%, with climate regulations and compliance
costs for water expected to accelerate. Anheuser-
Busch InBev is investing in water efficiencies
(using reverse osmosis across 80 facilities),
increasing R&D in high yielding, climate resilient
crops (for example through a partnership with
Colorado university), and the agronomy teams
are working closely with farmers to build resilience.
This case study is a good example of how ESG issues
have relevance to the Fund Managers’ investment
views on companies. Without secure, sustainable
and responsible sourcing of water, beverage
companies will struggle to serve the markets that
they operate in. An ESG issue has very real investment
consequences and with the help of JHI’s Responsible
Investment and Governance Team, the Fund Managers
can be on top of these issues to the best of their ability.
Global water stress map
Diageo site located in
water-stressed area
Overall Water Risk
Low risk
Low to medium risk
Medium to high risk
High risk
Extremely high risk
Source: Diageo 2022 ESG Report, Wine and Spirit Education Trust, World Resources Institute
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Strategic report
In addition to this, JHI has maintained a CarbonNetural®
certification since 2007 and offsets all its operational
Scope 1, Scope 2 and Scope 3 operational emissions each
year. Through this process, JHI has invested in a variety
of offset projects around the world, delivering financial
support to essential renewable energy, forestry and
resource conservation projects that support reductions
in greenhouse gas emissions. All projects JHI supports
have been classified as ‘additional’ by an independent
third party, meaning they would not happen without
the sale of carbon credits.
JHI discloses its carbon emissions annually through
regulatory and voluntary reporting frameworks,
including the Carbon Disclosure Project (“CDP”),
as well as in its 2023 Responsibility Report, which
provides more information.
JHI produces product-level Task Force on Climate-
Related Financial Disclosures (“TCFD”) reports. These
reports include an overview of the climate-related
governance, strategy, risk management, metrics
and targets of JHI and its portfolios. Product-level
metrics include absolute carbon emissions, carbon
footprint, weighted average carbon intensity,
implied temperature rise and climate scenario
analysis (Climate Value at Risk). JHI’s TCFD Report
specific to the Company is available
at www.hendersoneuropeantrust.com.
Business ethics
As the Company’s operations are delegated to third-party
service providers, the Board seeks assurances from its
service providers, at least annually, that they comply
with the provisions of the UK Modern Slavery Act 2015
and maintain adequate safeguards in keeping with the
provisions of the Bribery Act 2010, Criminal Finances Act
2017, and the sanctions element of the Economic Crime
(Transparency and Enforcement) Act 2022. The Company
has received assurances from its main suppliers that they
maintain a zero-tolerance policy towards the provision of
illegal services.
The Strategic Report, set out on pages 1–34, has been
approved by the Board.
On behalf of the Board
Vicky Hastings
Chair of the Board
11 December 2024
ESG report continued
34
Henderson European Trust plc Annual Report
Governance
In this section
36 Board of directors and fund managers
39 Corporate governance report
44 Audit and Risk Committee report
49 Management Engagement
Committee report
50 Nominations Committee report
53 Directors’ remuneration report
57 Directors’ report
59 Statement of directors’ responsibilities
Image: Downtown district Frankfurt, Germany
Strategic report Governance
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statements
Additional
informationGovernance
Henderson European Trust plc Annual Report 2024
35
Board of directors and fund managers
Ensuring effective governance
Victoria (Vicky)
Hastings
Position: Chair of the Board
Date of appointment: 1 September
2018 (Chair from 25 September 2020)
Skills and experience
Vicky has over 35 years’ experience in
the investment management industry
in both executive and non-executive
roles. She is an experienced finance
professional and board director,
who brings a deep understanding
of investment process and oversight,
corporate governance and investment
company expertise to the Board. Over
the last 20 years Vicky has served on a
number of investment company boards,
most recently Edinburgh Investment Trust
plc and Impax Environmental Markets plc,
as well as JPMorgan Asset Management
UK Limited and JPMorgan Asset
Management International Limited.
In her executive career, Vicky was a
European equity fund manager and
held investment leadership roles at
Merrill Lynch Investment Managers
and JO Hambro Capital Management.
External appointments
Vicky is a non-executive director of
Alliance Witan Plc and a trustee of
the Mountbatten Isle of Wight and
Hampshire charity group.
Robin
Archibald
Position: Senior Independent
Director (“SID”)
Date of appointment: 1 March 2016
(SID from 10 February 2021, Audit
and Risk Committee Chairman
from 1 June 2023)
Skills and experience
Robin brings in-depth knowledge,
specialist expertise and extensive
senior-level experience in all areas
of the UK closed-ended funds sector.
Robin’s executive career spanned over
30 years as a corporate financier and
chartered accountant, and now over
ten years as a non-executive director
on investment companies. Robin was
Head of the corporate team at
Winterflood Investment Trusts until 2014
and has worked for other advisory firms,
including Samuel Montagu, SG Warburg
Securities and NatWest Markets. Robin
retired from chairing Albion Technology
and General VCT plc, and from being
SID and audit chairman of Ediston
Property Investment Company plc in
2023 and of Capital Gearing Trust plc
earlier in 2024.
External appointments
Robin is chairman of Shires Income PLC
and of AEW UK REIT plc, both of which
are investment companies.
Marco Maria
Bianconi
Position: Director
Date of appointment: 1 June 2022
Skills and experience
Marco brings a wealth of asset
management and corporate leadership
expertise, having been portfolio manager
at Fidelity International UK Ltd and
having served as a non-executive
on the boards of banks (Banca
Antonveneta), industrial companies,
a public utility (ACEA) and a wide range
of financial services firms. As an Italian
national, Marco also contributes a
European perspective.
External appointments
Marco is Group Chief M&A and Investor
Relations Officer at Cementir Holding
N.V., a Dutch multinational listed on
Euronext Milan, and is a non-executive
director of Cimentas SA, a subsidiary
of Cementir Holding forming part of
his executive role. Marco is the audit
committee chairman at Gabelli Merger
Plus+ Trust Plc.
Board of directors
The directors appointed to the Board at the date of this report are:
36
Henderson European Trust plc Annual Report
Board of directors and fund managers continued
Chair of committee
Audit and Risk Committee
Management Engagement Committee
Nominations Committee
p.39 Corporate Governance
Melanie
Blake
Position: Director
Date of appointment: 3 July 2023
Skills and experience
Melanie is a chartered accountant and
risk and compliance professional with
over 20 years’ experience in the asset
management industry. Melanie brings a
deep understanding of governance, risk,
compliance and financial reporting to
Board deliberations. Melanie audited
asset management companies and
investment funds at KPMG in Cape
Town, before moving to KPMG in London,
where she advised the asset
management sector on financial
reporting, risk and compliance matters
for nine years. Melanie worked in senior
risk and compliance roles with Barclays
Wealth and Investment Management
and most recently, Aberforth Partners.
External appointments
Melanie is a trustee of the Hemat Gryffe
Women’s Aid charity.
Stephen
King
Position: Director
Date of appointment: 4 July 2024
Skills and experience
Stephen was HSBC chief economist for
17 years until 2015, starting his career as
an economist for the Treasury and later
becoming private secretary to the chief
economic adviser. He was specialist
advisor to the House of Commons’
Treasury Committee between 2015
and 2017. He is a fellow of the Society
of Professional Economists and of the
Academy of Social Sciences. Stephen
has written four books: “Losing Control:
The Emerging Threats to Western
Prosperity® (2010); “When the Money
Runs Out: The End of Western Affluence”
(2013); “Grave New World: The End of
Globalization, the Return of History”
(2017); and “We need to talk about
inflation: 14 urgent lessons from the last
2000 years” (2023).
External appointments
Stephen is a director of The National
Institute of Economic and Social
Research and senior economic
adviser to HSBC on a part-time basis.
Rutger
Koopmans
Position: Director
Date of appointment: 4 July 2024
Skills and experience
Rutger is a senior finance professional.
He started his career at MeesPierson NV
(formerly Bank Mees & Hope NV), before
moving to ING, where he served as a
managing director until 2008. Since then,
he has run an independent strategic
advisory practice and manages PIT
Self-Placement BV, a professional
training and coaching enterprise. Rutger
is also the author of “Your Life Your Rules,
taking charge of your working life”. As a
Dutch national, Rutger also contributes
a European perspective.
External appointments
Rutger is a non-executive director
of Vollenhoven Groep and Stichting
Reizigerstegoeden, and managing
director of PIT Self-Placement BV,
which are all unlisted Dutch entities.
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Henderson European Trust plc Annual Report 2024
Governance
Tom O’Hara
Position: Portfolio Manager
Skills and experience
Tom O’Hara is a Portfolio Manager
on the European Equities Team at
Janus Henderson Investors, a
position he has held since 2020.
Before joining the firm as a research
analyst in 2018, Tom was an equity
research analyst specialising in
metals and mining with Exane BNP
Paribas from 2016. He held similar
mining and steel sector positions
with Redburn (Europe) Limited from
2013 and with Citigroup Global
Markets from 2010. Before Citigroup,
Tom was a metals analyst with
Metal Bulletin Research from 2008.
He began his career in 2006 in the
treasury team of Northern Rock plc.
Tom received his BA (Hons) degree
in economics from Newcastle
University. He has 18 years of
financial industry experience.
Jamie Ross
Position: Portfolio Manager
Skills and experience
Jamie Ross is a Portfolio Manager
on the European Equities Team
at Janus Henderson Investors,
a position he has held since 2016.
He was appointed as a joint
Portfolio Manager for Henderson
EuroTrust plc in 2018 and became
sole manager in 2019. Prior to this,
he was a portfolio manager on
the UK Equities Team, where he
co-managed a UK equities
pooled fund. Before that, he was
an assistant portfolio manager on
the Pan European Equities Team.
He started his career with Henderson
in 2007. Jamie graduated with a
BA (Hons) degree in economics
from Durham University. He holds
the Chartered Financial Analyst
designation and has 17 years of
financial industry experience.
Board of directors and fund managers continued
p.8–11 Fund manager’s report
Fund managers
The fund managers at the date of this report are:
38
Henderson European Trust plc Annual Report
Corporate governance report
Corporate governance structure
The Board is accountable to shareholders for the governance of the Company’s day-to-day affairs and is pleased to
report to shareholders on the Company’s governance arrangements and how the Company has applied the principles
of the Code of Corporate Governance published by the Association of Investment Companies.
Board of directors
Comprises independent non-executive directors
Chair: Vicky Hastings
Senior Independent Director: Robin Archibald
Third-party service providers appointed by the Board
Janus Henderson Investors
Fund Management: European Equities team with Tom O’Hara and Jamie Ross
as the Company’s appointed Fund Managers
Sales, Marketing, Administration
Corporate Secretary: Janus Henderson Secretarial Services UK Limited
Alternative Investment Fund Manager: Janus Henderson Fund Management UK Limited
Ernst &
Young LLP
Auditor
HSBC
Bank plc
Custodian
and depositary
Equiniti
Limited
Registrar
Winterflood
Securities
Limited
Corporate
broker
Kepler
Partners LLP
Third-party
research
provider
Numis
Securities
Limited
Corporate
broker
Nominations
Committee
Chair: Vicky Hastings
Purpose: Ensures the Board has
a balance of skills, experience
and diversity, oversees
effectiveness reviews of the
Board and its committees,
reviews directors’ fees and
maintains an effective
framework for succession
planning, with a formal approach
to the appointment of directors
Management
Engagement Committee
Chair: Vicky Hastings
Purpose: Ensures that the
performance of the Manager
and other service providers
meets expectations and their
terms of engagement
remain appropriate
Audit and Risk
Committee
Chair: Robin Archibald
Purpose: Ensures the integrity
of financial reporting, evaluates
the effectiveness of systems
of internal control and risk
management, and oversees
the relationship with
external auditors
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information
39
Henderson European Trust plc Annual Report 2024
Governance
Corporate governance report continued
Corporate governance codes
By virtue of the Company’s listing on the London Stock
Exchange, the Board is required to report on how the
principles of the 2018 UK Corporate Governance Code
(“UK Code”) have been applied.
Being an investment company, certain provisions of
the UK Code are not applicable as the Company has no
executive directors or internal operations and all day-to-
day activities are outsourced to external service providers.
The Board has therefore considered the principles and
recommendations of the Code of Corporate Governance
published by the Association of Investment Companies in
February 2019 (“AIC Code”). The AIC Code addresses the
principles set out in the UK Code as well as additional
principles and recommendations on issues that are of
specific relevance to investment companies. The Financial
Reporting Council (“FRC”) has endorsed the AIC Code and
confirmed that, by following it, the boards of investment
companies should fully meet their obligations in relation
to the UK Code and UK Listing Rule 6.6.6. The Board considers
that reporting against the principles and provisions of the
AIC Code provides more relevant information to
shareholders about its governance arrangements.
The AIC Code and the UK Code can be found on the
respective organisations’ websites: www.theaic.co.uk and
www.frc.org.uk. The AIC Code includes an explanation of
how it adapts the principles and provisions set out in the
UK Code to make them relevant for investment companies.
A new UK Code was published in January 2024, with an
updated AIC Code published in August 2024. The new
Codes will be applicable to financial years beginning on
or after 1 January 2025.
Statement of compliance
The Board confirms that the Company has applied the
principles and adhered to the provisions of the AIC Code
throughout the year under review and to the date of this
report, except as set out below.
The Company has no chief executive or other executive
directors and therefore does not consider executive
remuneration. As a fully managed investment company,
the Company has no internal operations so does not
maintain an internal audit function, although the Audit
and Risk Committee regularly considers the need for
it (see page 48).
A separate remuneration committee has not been
established as the Company has no employees and has
a small Board of solely non-executive directors. The Board
has expanded the remit of the Nominations Committee
to include review of remuneration (see the Nominations
Committee Report on pages 50 to 52). The Board Chair
does not act as Chair of the Nominations Committee
when it considers matters relating to the performance,
succession or remuneration of the Chair.
The AIC Code includes two deviations from the UK Code
permitting the Chair of the Board to be a member of
the Audit and Risk Committee and for his or her tenure
to exceed nine years. The Company has not taken
advantage of these provisions and continues to comply
with the provisions of the UK Code in this respect.
Leadership and division of responsibilities
The Board has overall responsibility for the Company’s affairs and for promoting the long-term success of the
Company. The Board is collectively responsible for providing leadership, setting the investment objective and policy,
appointing the Company’s third-party service providers, establishing a robust internal control and risk management
system and monitoring the performance delivered by service providers within the established control framework. It is
also responsible for setting the Company’s standards and values and for ensuring that its obligations to its shareholders
and other stakeholders are understood and met. Information on the Company’s purpose and values can be found on
page 18 and on the Board’s engagement with stakeholders on pages 25–29.
Role Primary responsibilities
Shareholders/
investors
• Approving material changes to the Company’s investment policy
• Making decisions regarding changes to the Company’s constitution
• Electing and re-electing directors to the Board, or removing them from office if deemed appropriate
• Approving Board remuneration policy
• Approving significant transactions or changes to the Company, where shareholder approval
is required
• Communicating directly with the Board, or through the Manager, on issues which affect
shareholders and where they want to express their views or concerns
40
Henderson European Trust plc Annual Report
Role Primary responsibilities
Board
• Responsible for providing leadership of the Company’s affairs
• Setting the Company’s investment objective, policy and strategy
• Establishing a robust internal control framework enabling effective risk management
• Appointing and monitoring the performance of service providers within the parameters
of the control framework
• Setting the Company’s culture and values
• Providing constructive challenge to how the Company and its agents operate
• Ensuring that obligations to shareholders and other stakeholders are understood and met
• All directors are non-executive and independent of the Manager
Chair
• Leading and managing Board business and ensuring the timely flow of information from service
providers to the Board
• Providing effective leadership of the Board, including setting its agenda and determining its
governance framework, culture and values, with the support of other directors, particularly the
Senior Independent Director and the Corporate Secretary
• Leading the Board’s relationship and engagement with shareholders and other stakeholders
• Managing the relationship with the Manager and other service providers
• As Chair, Vicky Hastings was independent on appointment in accordance with the AIC Code
criteria and has no relationships that may create a conflict between her interests and those
of shareholders
Committee
Chairs
• The leadership and governance of each committee
• Maintaining the relationships with specialist service providers delivering services within the remit
of each committee
• Reporting on the activities of each committee to the Board
• Seeking approval from the Board for the responsibilities set out in the respective committee’s
terms of reference
Senior
Independent
Director
• Fulfilling the role of sounding board and support for the Chair and intermediary for the other
directors as necessary
• Leading the effectiveness review of the Chair
• Acting as a channel of communication for shareholders if contact through the Chair is
deemed inappropriate
Independent
non-executive
directors
• Providing constructive and effective challenge, especially to the decisions of the Manager
• Scrutinising and holding to account the performance of:
– the Fund Managers in meeting the investment objective and policy
– Janus Henderson in the promotion of the Company and day-to-day operations of the
Company’s business, including administration, secretarial and financial reporting
• Providing strategic guidance and offering specialist advice based on their career experiences
Manager (AIFM)
• Promoting the Company’s investment proposition to professional and retail investors
• Making the necessary reporting to the FCA regarding the Company’s status as an AIF
• Providing accounting, company secretarial and administrative services to the Company
ensuring compliance with the applicable statutory, regulatory and governance provisions
• Coordinating the delivery of services provided by the Company’s other third-party
service providers
Fund Managers
• Selecting the stocks held within the portfolio, and changes thereto
• Diversification and risk management through stock selection, size of investment and regional
or industry concentrations
• Determining the volume and timing of acquisitions and disposals
• Determining the frequency and level of gearing and cash management within the overall limits
set by the Board
Corporate governance report continued
Strategic report Governance
Financial
statements
Additional
information
41
Henderson European Trust plc Annual Report 2024
Governance
Operation of the Board
The Board meets formally at least six times a year,
with additional board or committee meetings arranged
when required. The directors have regular interaction
with the Fund Managers, representatives of the corporate
secretary and other employees of the Manager between
formal meetings. The Board has a formal schedule of
matters specifically reserved for its decision, which
includes setting strategy and providing oversight of
performance against agreed measures. All matters
that are not delegated to the Manager under the
management agreement are reserved for the Board’s
decision. The Board approves any changes to the
structure and capital arrangements for the Company,
including any corporate events, has oversight of financial
reporting and assesses the effectiveness of the internal
control framework. The Board approves annual and
half-year results, communications with shareholders,
the appointment of new directors, oversees corporate
governance matters and is responsible for determining
the remuneration of directors.
The Board keeps its schedule of matters reserved
and terms of reference for each committee
under regular review, and these are available at
www.hendersoneuropeantrust.com. Reports on the
activities undertaken by each committee during the
reporting period are set out on pages 44–52.
Each board meeting follows a formal agenda,
which includes a review of the Company’s investment
performance, financial position, compliance with
the investment parameters, a review of shareholder
movements along with any sales and marketing activities
undertaken and any other relevant business matters to
ensure that control is maintained over the Company’s
affairs. Employees of the Manager attend relevant
sections of board meetings enabling the directors to
discuss the affairs of the Company and to probe further
on any matters of concern. The Board receives and
considers regular reports from the Manager and ad hoc
reports and information from other parties as required.
The Board has engaged third-party service providers to
deliver the operations of the Company. Janus Henderson
has been appointed to manage the investment portfolio,
and provides the day-to-day accounting, company
secretarial, administrative, sales and marketing activities.
The Company has appointed a depositary, HSBC Bank plc,
which in turn appoints the custodian for the safe custody
of the Company’s assets. The Company has appointed
a registrar, Equiniti Limited, to maintain the register of
members and assist shareholders with queries about
their holdings. Each of these principal contracts was
entered into after full and proper consideration by the
Board of the quality and cost of the services offered,
including the control systems in operation in so far
as they relate to the affairs of the Company. The Board
and its committees maintain oversight of the third-party
service providers through regular and ad hoc reporting.
The Board meets annually with representatives of service
providers to discuss amongst other matters performance,
service levels, their value for money, information security
and business resilience. The Manager ensures that
all directors receive, in a timely manner, relevant
management, regulatory and financial information, to
allow them to discharge their responsibilities and enable
smooth functioning of the Board and its committees.
The Board has direct access to the advice and services
of the nominated chartered secretary who represents
the Corporate Secretary, Janus Henderson Secretarial
Services UK Limited, a subsidiary of Janus Henderson
with its own reporting lines and audited internal controls.
There are processes and controls in place to ensure that
there is a clear distinction between the two entities,
particularly when dealing with any conflicts or issues
between the Company and Janus Henderson. The
Corporate Secretary is responsible to the Board for
ensuring compliance with Board and committee
procedures and applicable rules and regulations.
The proceedings at all board and committee meetings
are minuted, with any director’s concerns recorded in
the minutes. The Board has the power to appoint or
remove the Secretary in accordance with the terms
of the management agreement.
Any correspondence from shareholders addressed to
the Chair or to the Company received by Janus Henderson
is forwarded to the Chair in line with the established
procedures in place and is submitted to the next board
meeting or earlier, as appropriate. The Board, the Fund
Managers and the Corporate Secretary operate in a
supportive, cooperative and open environment.
Arrangements with directors
Appointment, tenure and retirement
The Board may appoint directors at any time. Any director
so appointed stands for election by shareholders at the
next annual general meeting in accordance with the
provisions of the Company’s articles of association
(the “Articles”).
The Board considers a potential candidate’s other
commitments on appointment and then annually
through the performance evaluation process to ensure
that directors have sufficient time to commit to the
Company. A schedule of directors’ other commitments
is reviewed at each board meeting and directors are
required to seek the Chair’s approval prior to accepting
further appointments. The Chair seeks the Senior
Independent Director’s approval before accepting
further appointments.
The directors, including the Chair of the Board, are
generally expected to serve for no more than nine years,
other than in exceptional circumstances, subject to a
satisfactory Board effectiveness review. This ensures the
regular refreshment of the Board and its committees and
forms an integral part of the Board’s succession planning.
All directors stand for re-election by shareholders annually
in keeping with the provisions of the AIC Code.
The Articles permit shareholders to remove a director
before the end of their term by passing an ordinary
resolution at a general meeting. An appointment may be
terminated by either party giving written notice without
compensation payable.
Corporate governance report continued
42
Henderson European Trust plc Annual Report
Independence
The Board reviews the independence of each director
annually by reference to the AIC Code. Each director’s
external commitments are considered, as well as tenure
of service and any connections to the Manager. The Board
ensures that no directors are linked via any other
directorships. Following completion of the annual Board
effectiveness review and assessment by the Nominations
Committee, the Board has concluded that all directors
continue to be independent in character and judgement.
Induction and ongoing training
Newly appointed directors are offered an induction
programme bespoke to their role which covers the legal
and regulatory framework for investment companies
and the operations of the Manager, including the portfolio
management, compliance and risk management
frameworks, accounting, sales and marketing, and
other administrative services.
Directors are provided with the Company’s policies,
regulatory and statutory requirements affecting the
Company, as well as changes to the directors’
responsibilities as they arise. Directors are encouraged
to attend bespoke training provided by the Manager,
as well as external training and industry seminars.
Relevant external training may be undertaken at
the expense of the Company.
The Chair attends meetings of all the chairs of the
investment trust companies managed by Janus Henderson
which provide a forum to discuss industry matters.
The Company has a procedure for directors to take
independent professional advice in the furtherance of
their duties at the expense of the Company, if required.
Directors’ insurance and indemnification
Directors’ and officers’ liability insurance cover is in place
which indemnifies the directors against certain liabilities
when carrying out their duties. The Company’s Articles
provide for an indemnity in respect of costs which directors
may incur for the defence of any proceedings brought
against them arising from their position as directors,
where they are acquitted or judgment is given in their
favour. The Company has granted an indemnity to each
director to the extent permitted by law regarding their
potential liabilities as directors of the Company.
Directors’ conflicts of interest
The Articles permit the Board to consider and, if it sees fit,
to authorise situations where a director has an interest
that conflicts, or may conflict, with the interests of the
Company (“situational conflicts”). Directors are required
to declare situational conflicts for authorisation by those
directors who have no interest in the matter being
considered. In deciding whether to authorise a situational
conflict, the non-conflicted directors must act honestly
and in good faith with a view to the best interests of the
Company. The directors may impose limits or conditions
when giving the authorisation, or subsequently, if they
think this is appropriate. Any conflicts are recorded in
the minutes and reviewed at each board meeting.
Attendance at meetings
The table below sets out the number of scheduled board
and committee meetings held during the year under
review and attended by each director. Each director
attended every board and committee meeting to which
they were entitled to attend throughout the year.
Board
Audit & Risk
Committee
Nominations
Committee
Management
Engagement
Committee
Vicky
Hastings
1
6 3 1 1
Robin
Archibald 6 3 1 1
Marco
Bianconi 6 3 1 1
Melanie Blake 6 3 1 1
Stephen
King
2
2 1 1 1
Rutger
Koopmans
2
2 1 1 1
Stephen
Macklow–
Smith
3
4 2 0 0
Katya
Thomson
4
2 0 0 1
1 Vicky Hastings attended each of the meetings of the Audit and Risk
Committee during the year by invitation.
2 Appointed as directors on 4 July 2024
3 Resigned as director on 4 July 2024
4 Served as a director from 4 July 2024 to 30 September 2024
All directors in office in January 2024 attended the Annual
General Meeting. Outside the formal meetings identified
above, the Board or its committees had regular interaction
over the year on various corporate activities. The Board
and its committees held an additional 11 ad hoc meetings
to undertake business relating to the HEFT/HNE combination
and the approval of the Company’s results and dividends.
Audit, risk and internal control
The Board has overall responsibility for the Company’s
system of internal control and for reviewing its effectiveness,
as set out in the chart on page 47. The Board has reviewed
the effectiveness of the Company’s system of internal
controls for the year ended 30 September 2024, and did
not identify and was not advised of any significant failings
or weaknesses. The Audit and Risk Committee supports the
Board in the continuous monitoring of the internal controls
and risk management framework. Its considerations in
this respect, including why the Company does not have
its own internal audit function, are set out on page 48.
The depositary has confirmed that in all material respects,
the Company has been managed in accordance with
the FCA’s Investment Funds Sourcebook, the Company’s
articles of association and as required by the Alternative
Investment Fund Managers Directive.
Corporate governance report continued
Strategic report Governance
Financial
statements
Additional
information
43
Henderson European Trust plc Annual Report 2024
Governance
Audit and Risk Committee report
The Chairman of the Audit and Risk
Committee (the “Committee”), Robin
Archibald, reports to shareholders on
the year to 30 September 2024.
Membership
The members of the Committee are Robin Archibald,
Marco Bianconi, Melanie Blake, Stephen King and
Rutger Koopmans. Vicky Hastings as Chair of the
Board attends the Committee’s meetings by
invitation only, in accordance with the AIC Code.
The Committee is chaired by Robin Archibald, who
is a chartered accountant and corporate financier
by profession, as well as an experienced audit
committee chair and senior independent director
from a number of other investment company roles.
The Committee as a whole has competence relevant
to the sector in which the Company operates and to
the Company as an investment trust.
Meetings
The Committee met formally three times during the
year under review: in advance of publication of the
annual and of the half-year results, and to focus on
its broader risk and internal control responsibilities.
The Company’s auditor is invited to attend meetings
as appropriate. Representatives of the Manager attend
at least on an annual basis, including the Financial
Reporting Senior Manager and representatives of the
Operational Risk, Internal Audit and Business Resilience
functions and the Chief Information Security Officer.
The Committee Chairman also meets with the
Company’s auditors as part of the audit planning
process and during the audit, and to keep the audit
firm up to date with corporate developments, as well
as being informed of any accounting or reporting
changes envisaged.
The Committee was closely engaged in the HEFT/
HNE combination with particular emphasis on the
commercial and financial dynamics of the
transaction and how it was accounted for
and reported.
Roles and responsibilities
The Committee is responsible for ensuring the
integrity of the Company’s financial reporting, the
appropriateness of service providers’ systems of
internal control and risk management, and the
effectiveness and objectivity of the external auditor.
The Committee oversees the relationship with the
external auditor, recommending the terms of their
appointment or their removal.
The Committee Chair formally reports to the Board
after each audit and risk committee meeting and
makes recommendations for approval where relevant.
The Committee’s responsibilities are set out in formal
terms of reference, available on the Company’s
website, which are reviewed at each meeting.
Committee effectiveness review
The activities of the Committee were considered as
part of the external Board effectiveness review, with the
conclusion that the Committee continues to be effective
in its operation.
Activities during the year
In discharging its duties over the course of the year,
the Committee considered:
Annual and half-year reports
• accounting policies and the quality and effectiveness
of the accounting records and management
information maintained on behalf of the Company;
• half-year and annual results and the Annual Report;
• appropriate level of dividends to be paid by the
Company, including sufficiency of revenue reserves,
for recommendation to the Board;
• appropriateness of the allocation of the management
fee and finance costs between revenue and capital;
• the independence and effectiveness of the statutory
auditor in conducting the year-end audit;
• accounting impact of the cancellation of the share
premium account and capital redemption reserve
in March 2024 to release £77 million of distributable
reserves, subsequently used to fund the tender offer
as part of the HEFT/HNE combination; and
• a redesign of the Company’s Annual Report.
Internal controls and risk management
• internal controls and the resilience of operations at JHI,
BNP Paribas, HSBC Bank and Equiniti;
• JHI’s policies and activities regarding information security
and business resilience, meeting with representatives
of JHI’s Internal Audit, Information Security, Business
Resilience and Operational Risk departments;
• the risk register, risk management systems and the
Company’s strategic risk heat map as modified to
reflect changes to the risk environment and any
emerging risks;
• the Company’s Anti-Bribery Policy, approach to tax
evasion, and confirmations from service providers that
they have appropriate procedures in these respects;
• any need for an internal audit function;
• the Manager’s and other key service providers’
whistleblowing policies for staff to raise concerns about
possible improprieties, in confidence; and
• the depositary’s confirmation that the Company has
been managed in accordance with the Investment Funds
Sourcebook, the Company’s Articles and the AIFMD.
44
Henderson European Trust plc Annual Report
Audit and Risk Committee report continued
Terms of reference, financial reserves,
accounting for the HEFT/HNE combination
and taxation
• revisions to the Committee’s terms of reference to
incorporate the expectations of the FRC’s ‘Audit
Committees and the External Audit: Minimum Standard’
in the Committee’s activities;
• the Company’s taxation affairs, including withholding
tax recoverability and registration of the Company for
the Economic Crime Levy;
• management fee calculations, including changes to
the basis of management fees and contribution
granted as part of the HEFT/HNE combination;
• appropriate accounting for the HEFT/HNE combination
and a detailed analysis of its costs and financial
impact. The analysis showed that after accounting
for these costs and financial contributions to the
combination, the combination provided a modest
increase to net asset value and did not erode revenue
reserves of the Company. The combination also
resulted in a material reduction in the Company’s
ongoing charges figure;
• redemption reserve in March 2024 to release £77 million
of distributable reserves and used to fund the tender
offer as part of the HEFT/HNE combination; and
• planning of further consolidation of non-distributable
reserves to increase flexibility in the use of reserves
– see page 6 in the Chair’s Statement on a proposal
to cancel the share premium account to create
additional distributable reserves.
Audit appointment and tender
Regulations require the Company to rotate audit firms
after a period of ten years, which may be extended where
audit tenders are carried out or where more than one
audit firm is appointed to carry out the audit. The
Committee last carried out a formal audit tender process
in 2023 and re-appointed Ernst & Young LLP (“EY”) as
external auditor. EY has been the Company’s auditor since
2014 following the previous formal tender process, prior to
which Grant Thornton UK LLP had been in office as auditor.
The auditor is required to rotate partners every five years,
and the year under review is the first year audit partner
Caroline Mercer has been in office. The Company
complies with the requirements of The Statutory Audit
Services for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order 2014. This order
relates to the frequency and governance of tenders for
the appointment of the external auditors and setting
policy on the provision of non-audit services. The audit
firm did not provide any advice or services to the
Company in connection with the HEFT/HNE combination.
Auditor’s independence
The Committee monitors the auditor’s independence
through three aspects of its work:
• approval of a policy regulating the non-audit services
that may be provided by the auditor to the Company;
• assessing the appropriateness of the fees paid to the
auditor for their work; and
• reviewing the information and assurances provided
by the auditor on their compliance with the relevant
ethical standards.
For the year ended 30 September 2024, EY confirmed that
all its partners and staff involved with the audit were
independent of any links to the Company, and that these
individuals complied with their ethics and independence
policies and procedures, which are fully consistent with
the FRC’s ethical standards. Having considered these
assurances and EY’s performance and behaviour during
the audit process, the Committee is satisfied that auditor
independence and objectivity are safeguarded.
Audit fees
The fees payable to EY for audit services during the year
(excluding VAT) were £54,500 (2023: £52,000) and a
one-off fee of £4,000 for the auditor’s additional work
in reviewing and auditing the financial impact of the
HEFT/HNE combination for this Annual Report.
Policy on non-audit services
The Committee regularly reviews its policy for the provision
of non-audit services by the auditor. The policy sets out
that the Company’s auditor will only be considered for
non-audit work where permitted by current regulations
and where it would not affect the auditor’s independence
and objectivity.
The provision of any non-audit services by the auditor
is not permitted to exceed 70% of the average annual
statutory audit fee for the three consecutive financial
years preceding the financial year to which the cap
applies. Such services require approval in advance
by the Committee, or Committee Chairman, following
due consideration of the proposed services. No non-audit
services were provided in the year under review or in
the previous year.
Strategic report Governance
Financial
statements
Additional
information
45
Henderson European Trust plc Annual Report 2024
Governance
Audit and Risk Committee report continued
Audit for the year ended 30 September 2024
In respect of the Annual Report for the year ended 30 September 2024, the following significant issues were considered
by the Committee:
Significant issue How the issue was addressed
Valuation and ownership of
the Company’s investments
There is a risk that assets are incorrectly valued or ownership of assets is not
secured. Actively traded investments are valued using stock exchange prices
provided by third-party pricing providers and the portfolio valuation is
reviewed at each meeting of the Board. Ownership of listed investments
is verified by BNP Paribas via reconciliation to the custodian’s records and
the Board receives quarterly reports from the depositary.
Recognition of income
Income received is accounted for in line with the Company’s accounting
policies (as set out on page 73). The Committee considered the treatment
of the special dividends received in the year and foreign withholding
tax recoverability.
Compliance with s1158
Corporation Tax Act 2010
The Committee reviews the Manager’s procedures for ensuring compliance
with relevant regulations so the Company maintains its investment trust status,
and regularly seeks confirmation of compliance with the relevant regulations.
Maintaining internal controls
The Committee carries out the annual assessment of the effectiveness of the
Company’s internal control and risk management systems by reviewing the
framework and summary of the reporting received from its service providers
throughout the financial year. All assurance reports were unqualified by their
service auditors.
s110 Insolvency Act 1986
scheme of reconstruction
and transfer of assets
The Committee reviewed the Manager’s accounting treatment and analysis
of the costs of the HEFT/HNE combination to ensure a fair and understandable
representation in the Annual Report. This included a review of the amendments
to the management agreement affecting the Company’s operating costs
following the transaction.
Viability and going concern
The Committee scrutinised assumptions around the viability and going concern
statements respectively, as set out on pages 24 and 72, to satisfy itself of the
Company’s resilience over the five-year timeframe.
In the year under review, EY challenged both the Manager’s
and the Board’s judgements and exercised professional
scepticism in its enquiries. The audit team required detailed
evidence of all metrics, numbers and disclosures made
in the Annual Report to support a robust assessment and
evaluation of its financial information. As an example, the
Manager provided the Committee and auditor with an
analysis of special dividends and the rationale for whether
these should be treated as income or capital. The auditor’s
review included challenge to the Manager to provide
additional justification and background to the dividends
before confirming whether they concurred with the
proposed treatment.
As an investment trust investing in listed equities,
management has limited areas of judgement. Areas
where the Committee challenged the Manager included
the likelihood of recoverability of withholding tax in other
European jurisdictions, stress testing of the revenue
forecast to support the dividend payment policy,
particularly as a result of the substantial increase in the
number of shares in issue following the HEFT/HNE
combination, and the assumptions included in making
the viability statement. Other than the financial impact
and reporting of the combination, the Committee did not
consider it necessary to request the auditors to look at
any specific areas in relation to the audit for the year
ended 30 September 2024.
The Committee is satisfied that the Annual Report for the
year ended 30 September 2024, taken as a whole, is fair,
balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
Effectiveness of the external audit
The Committee’s process for evaluating the effectiveness
of the external audit comprises two components: scrutiny
of the FRC’s latest Audit Quality Inspection Report and
a post-audit assessment led by the Committee Chair.
The auditor attended two meetings of the Committee
in the year to present their audit plan and present the
findings from their annual audit. The Committee Chairman
and Committee Chair designate also had the opportunity
to meet with the audit partner to review the audit results
prior to these being presented to the Committee. The
auditor presented and discussed the findings of the latest
Audit Quality Inspection Report to the Committee and
reported on the progress made by the firm in addressing
the areas identified for improvement in the prior
year’s report.
46
Henderson European Trust plc Annual Report
The Committee Chairman invited views from the directors,
Fund Managers and other members of the Manager’s
staff to support the Committee’s assessment of the
robustness of the audit, level of challenge offered by
the audit team, quality of the audit team, timeliness of
delivering the tasks required for the audit and reporting
to the Committee. The Committee also met privately
with the audit partner to discuss how the audit operated
from her perspective.
Overall, the Committee considers that the audit quality
for the year ended 30 September 2024 has been high and
that the Manager and EY have worked together effectively.
Following completion of the assessment, the Committee
remained satisfied with the effectiveness of the audit
provided by EY.
Internal controls and risk management
The Board has overall responsibility for the Company’s system of internal control and for reviewing its effectiveness.
The Committee supports the Board in the continuous monitoring of the internal control and risk management framework.
Audit and Risk Committee report continued
Board of Directors
Comprises independent non-executive directors
Ernst & Young LLP
Statutory auditor
Janus Henderson
Investment
management,
company secretarial,
sales, marketing, PR
and administration
Reporting
Investment
performance update
(at each meeting)
Compliance with
investment limits and
restrictions (monthly)
Internal controls
report (quarterly)
Effectiveness of
control environment
(annually)
HSBC Bank plc
Custodian
and depositary
Reporting
Depositary report
(quarterly)
Presentation from the
depositary and
custodian (annually)
Effectiveness of
control environment
(semi-annually)
BNP Paribas
Administration and
accounting services
engaged by
the Manager
Reporting
Balance sheet
Liquidity and gearing
Revenue forecasts
Portfolio valuation
Portfolio transactions
Effectiveness of
control environment
(annually)
Equiniti Limited
Registrar
Reporting
Voting and scrutineer
reports pre- and
post-shareholder
meetings
Shareholder
correspondence
Operational service
updates
Effectiveness of
control environment
(annually)
How the system of internal controls operates
The Board delegates contractually to third-party service providers for all the Company’s operational
requirements. It maintains oversight of these providers throughout the year by receiving regular reporting
on their activities. All are considered key stakeholders.
The Management Engagement Committee formally evaluates the pertormance and service delivery of all
service providers annually.
The Audit and Risk Committee evaluates the performance of the auditor on completion of each audit cycle,
and monitors the effectiveness of the control environment of the Manager, Equiniti, HSBC and BNP Paribas on
an annual basis through review of their annual assurance reports, supplemented by the view of the Manager’s
Operational Risk team.
System of internal controls
Strategic report Governance
Financial
statements
Additional
information
47
Henderson European Trust plc Annual Report 2024
Governance
The Board has established an ongoing process for
identifying, evaluating and managing the principal and
new or emerging risks faced by the Company, as set
out on pages 21–23. The process accords with the FRC’s
guidance on Risk Management, Internal Control and
Related Business and Financial Reporting published in
September 2014. The system was in operation throughout
the period and up to the date of this report and is
designed to mitigate the specific risks faced by the
Company, taking account of the nature of the Company’s
reliance on its service providers and their internal controls.
The system therefore manages rather than eliminates the
risk of failure to achieve the Company’s business
objectives and provides reasonable, but not absolute
assurance against material misstatement or loss.
The key components of the internal control
framework include:
• clearly defined investment criteria which specify
levels of authority and exposure limits. The Board
reviews reports on compliance with the criteria on
a monthly basis;
• regular reporting which allows the Board to assess
the Company’s financial position. The management
accounts and forecasts are reviewed by the Board
at each meeting;
• contractual agreements with the Manager and other
service providers, including in connection with the
HEFT/HNE combination. The Management Engagement
Committee reviews performance levels and adherence
to relevant provisions of the agreements on a regular
basis through reports received and conducts a formal
evaluation of the overall level of service provided at
least annually;
• review of controls at the Manager and other third-party
service providers, complementing the review of their
performance and contracts by the Management
Engagement Committee, as set out on page 49.
The Board receives quarterly reporting from the
Manager and depositary and reviews annual assurance
reports on the effectiveness of the control environments
at the Company’s key service providers; and
• review of additional reporting provided by:
– the Manager’s Operational Risk team on the control
environment in operation at the Manager and their
view of the control environments in place at the
third-party service providers used by the
Company; and
– the Manager’s Internal Audit team on areas of
operation which are relevant to the Company.
The Committee has reviewed the Company’s system of
internal controls for the year ended 30 September 2024.
Following its review, it determined and reported to the
Board that it had not identified any failings or weaknesses
relating to the Company that were determined
as significant.
Internal audit function
Systems are in operation to safeguard the Company’s
assets and shareholders’ investments, to maintain
proper accounting records and to ensure that financial
information used within the business, or published,
is reliable. Being an investment company with no
employees, all executive activities are delegated to
service providers, principally among them, the Manager,
Janus Henderson. The Board places reliance on the
Company’s framework of internal control and the
Committee’s view on reporting received from specific
second and third line of defence teams at the Manager.
The Manager’s Operational Risk team supports the
Committee in considering the independently audited
reports on the effectiveness of internal controls in place at
the Company’s service providers. The Manager’s Internal
Audit department provides regular reporting to the Board
on operations at the Manager and presents at least
annually to the Committee. The Board has therefore
concluded that it is not necessary at the present time
for the Company to have its own internal audit function.
As this will be my final Audit and Risk Committee Report,
I would like to express my thanks to my Board colleagues
and the various agents to the Company in fulfilling the
functions of the Committee and in ensuring both a good
reporting structure and control over the risk environment
for the Company.
Robin Archibald
Chairman of the Audit and Risk Committee
11 December 2024
Audit and Risk Committee report continued
48
Henderson European Trust plc Annual Report
Management Engagement Committee report
The Chair of the Management
Engagement Committee (“MEC”),
Vicky Hastings, reports to shareholders
on the year to 30 September 2024.
Membership
All directors are members of the MEC, which is chaired
by the Chair of the Board.
Meetings
The MEC met formally once during the year.
Roles and responsibilities
The MEC reviews the management agreement and
monitors the performance of the Manager in respect
of its investment, company secretarial, financial
reporting, administration, sales, marketing and
support services and how those impact the
performance of the Company. The MEC is also
responsible for evaluating the overall performance
of the Company’s third-party service providers.
The MEC’s purpose is to ensure the services
and fees paid to the Manager and other service
providers are consistent with the successful delivery
of the Company’s long-term strategy and that each
service provider’s continuing appointment is in
the best interests of the Company.
The MEC reports to the Board and its responsibilities
are set out in formal terms of reference which
are reviewed at least annually and amended
as appropriate.
• the quality of the company secretarial service and
independence of the corporate secretary from the
Manager, noting the processes and procedures in
place to separate functions within the Manager;
• the quality of other services provided by the Manager,
including shareholder relations, promotional activities
and fund accounting;
• the quality and experience of the teams involved in
managing all aspects of the Company’s business,
including sub-contracted administration, reporting
services and internal controls;
• total fees and costs incurred by the Company in
comparison with the fee structures of its competitors
in the AIC peer group, other JHI investment companies
as well as JHI open-ended funds investing in Europe
as a benchmarking exercise;
• the key clauses of the management agreement,
how the Manager had fulfilled these and whether they
continued to be appropriate. The MEC’s review of the
terms of the agreement covered the services rendered,
level and structure of fees payable, length of notice
period and general best practice provisions; and
• the performance and fees of the Company’s other
third-party service providers, including the joint brokers,
depositary, custodian, registrar, research provider,
lawyers, and any instructions for ad hoc work from
external professional agents.
During the year, Deutsche Numis was contracted as a
joint corporate broker alongside Winterflood Securities.
The Committee gave close attention to the new
partnership of Tom O’Hara and Jamie Ross as joint
portfolio managers, following completion of the HEFT/HNE
combination, their support from the JHI European Equities
team, as well as the prior transition of lead fund manager
arising from John Bennett’s retirement. The purpose was
to provide confidence and assurance of the strength of
the new investment process and the sustainability of
combined investment performance delivered by the
new portfolio management team.
Continued appointment of the
Manager and other service providers
The Board considers the arrangements for the provision
of investment management and other services to the
Company on an ongoing basis. Following completion
of the annual review and on the MEC’s recommendation,
it is the Board’s opinion that the continuing appointment
of the Manager and other service providers on the
existing terms, as amended for purposes of the HEFT/
HNE combination, is in the interests of the Company
and its shareholders as a whole.
Vicky Hastings
Chair of the Management Engagement Committee
11 December 2024
MEC effectiveness review
The activities of the MEC were considered as part of
the Board effectiveness review, with the conclusion
that the MEC continues to be effective in its operation.
Activities during the year
In discharging its duties over the course of the year,
the MEC considered:
• the Company’s investment performance over the short,
medium and longer term, taking account of the
benchmark and performance of competitors in the AIC
and IA OEIC peer groups, the Company’s share price
total return, NAV total return, dividend growth, dividend
yield and discount versus the peer group and wider
universe of European funds;
• risk and attribution analysis to assess the Manager’s
performance, and the skill of the Fund Managers, in
managing the portfolio;
• the performance of all advisors engaged in
the transaction;
• management of the HEFT/HNE combination, including
the transitioning of the portfolio;
Strategic report Governance
Financial
statements
Additional
information
49
Henderson European Trust plc Annual Report 2024
Governance
Nominations Committee report
The Chair of the Nominations Committee
(“NC”), Vicky Hastings, reports to shareholders
on the year to 30 September 2024.
Membership
The NC is chaired by the Chair of the Board, except
when the Chair’s effectiveness, successor or fees are
being considered. All directors are members of
the NC.
Meetings
The NC meets at least annually, with further
meetings scheduled when required. In the
year under review the NC held one meeting.
Roles and responsibilities
The NC is responsible for reviewing Board succession
planning, diversity and tenure policy, ensuring
annual effectiveness reviews are carried out,
discussing the outcomes from those reviews and
making recommendations to the Board accordingly,
advising the Board on the proposed election and
re-election of directors ahead of AGMs, reviewing
Board composition and leading the search for
candidates to fill roles, taking into consideration the
balance of skills, knowledge, experience and diversity
of the Board.
The NC is also responsible for reviewing Board
remuneration, which includes the costs and
expenses associated with the Board, reporting
of Board remuneration and policy and future
directors’ fees.
• independence of the directors, taking account of the
directors’ other commitments, in line with the guidelines
established by the AIC Code;
• time commitment required of the directors, in the
context of their other business commitments and
appointments, and whether this had been sufficient
over the course of the year to meet the time
commitments required of the Company;
• reviewing the directors’ remuneration policy to
be included in the directors’ remuneration report;
• reviewing directors’ fees for the financial year ahead
and considering the directors’ expenses policy and
how expenses should be recovered;
• succession planning for appointments to the Board
which in the year was in the context of the HEFT/HNE
combination and drawing on directorial resource from
both boards to ensure a balance of expertise during
and following transition;
• the criteria for future Board appointments and the
methods of recruitment, selection and appointment;
• review of the diversity policy; and
• the effectiveness and contribution of the directors
standing for election and re-election at the
forthcoming AGM.
Succession planning and
diversity policy
When considering tenure policy and succession, the NC
bears in mind the balance of skills, knowledge, experience
and diversity of the Board. The aim is to achieve a non-
executive board with the competence and engagement
to oversee the Company’s investment objective and
operations, whilst aligning with various governance
guidelines. Individual performance and the contribution
of each director remain an integral element of the
Company’s approach.
The NC also reviews and recommends to the Board the
directors seeking re-election. Re-election is not automatic
and follows a process of evaluation of each director’s
performance and consideration of the director’s
independence, as well as the mix of skills and experience
of the current Board members. As part of this process,
the NC considers the time commitment of the directors,
including other business commitments and appointments.
Consideration is given to diversity of gender, social and
ethnic backgrounds, cognitive and personal strengths
and experience in the collective board make-up and in
agreeing future appointments.
The major role changes during the year, considered by
the NC, as explained in the Chair’s Statement on page 6,
were the changes to Board composition arising from the
HEFT/HNE combination:
• the appointments of Stephen King, Rutger Koopmans
and Katya Thomson as non-executive directors on
4 July 2024, previously HNE directors;
NC effectiveness review
The activities of the NC were considered as part of
the Board effectiveness review, with the conclusion
that the NC continues to be effective in its operation.
Activities during the year
In discharging its duties over the course of the year,
the NC considered and made recommendations for
approval by the Board as appropriate:
• composition of the Board and each of its committees,
taking account of the contribution of the skills,
experience and knowledge of each director to the
success of the Company, and using the Board’s skills
matrix as a guide to collective competencies and
experiences on the Board;
• directors’ and the Chair’s tenure policy, giving
consideration as to whether the Board retained
a sufficient balance of tenure and rotation without
losing the collective experience of the Company
and its activities;
50
Henderson European Trust plc Annual Report
Nominations Committee report continued
• Stephen Macklow-Smith’s resignation on 4 July 2024
as part of the arrangements made in establishing a
combined Board following the HEFT/HNE combination
(with one HNE board member similarly standing down
and another retiring following a nine-year term);
• Katya Thomson’s resignation on 30 September 2024
having assisted in the HEFT/HNE combination; and
• the pending retirement of Robin Archibald, who will
have served on the Board for just short of nine years
at the forthcoming AGM, handing over his audit and
risk committee chair responsibilities to Melanie Blake.
The appointment of a new Senior Independent Director
will be made in 2025.
These changes and the combination of the boards were
accomplished in an orderly way to achieve a balance
of skills, meeting governance requirements and taking
account of cohesion through substantial change to
continue with a competent Board, with the requisite
skills to fulfil its duties into the future, which is what the
NC believes has been achieved.
Board effectiveness review
The Chair of the NC led the annual performance review.
The evaluation was conducted by way of a discussion
between the Chair and each individual director on a
variety of topics, and the outcomes were presented to
the NC. The evaluation addressed board and committee
meetings, board composition, board dynamics and
culture, individual contribution, priorities for the future
and relationship with key service providers. The Senior
Independent Director undertook the review of the Chair
and discussed the leadership and effectiveness of the
Chair with each director.
Since the year end, an external advisor has been engaged
to assist in the Board transition process, following the
HEFT/HNE combination. This engagement is to help in
succession planning, with the forthcoming retirement
of certain Board members, in identifying skills that should
be replaced on the Board and the balance of the Board.
In the meantime, all directors remain independent in
character and judgement and there is a good balance
of skills and experience on a Board that encourages
diversity of thought and competencies. There is an orderly
succession plan for appointments going forward to
maintain an appropriate balance of skills and experience.
External commitments
Each director’s external interests and appointments were
carefully considered in respect of the time available and
their commitment to the Company, and no concerns were
identified for any of the non-executive directors,
including those with accentuated roles.
NC recommendations to the Board
On the basis of the NC’s recommendations, the Board
concluded that:
• each director provides a constructive contribution
to the affairs of the Company and brings different
qualities to the Board;
• the Board has an effective devolved committee
structure and the committees continue to support
the Board efficiently in fulfilling its duties;
• no director is ‘overboarded’ under the FRC’s guidelines
or in any practical way, and each director continues to
dedicate the time required to fulfil their duties to the
Company effectively, including for any non-standard
activities such as the recent corporate transaction
which took up substantial additional time and effort;
• the Board’s size and composition remain appropriate
for the Company and the Board retains, and will retain,
a good balance of skills and business experience,
as set out on page 36–37;
• following the HEFT/HNE combination, the Board
continues to operate effectively; and
• each director merits nomination for election or
re-election by shareholders as appropriate and
was duly recommended for shareholder election/
re-election at the forthcoming AGM.
Strategic report Governance
Financial
statements
Additional
information
51
Henderson European Trust plc Annual Report 2024
Governance
Board diversity at 30 September 2024
With regard to the FCA diversity targets on gender in
UK LR 6.6.6R(9)(a), the percentage of female directors
was 40% during the period 1 October 2023 to 4 July 2024,
when the HEFT/HNE combination completed. Since
Mrs Thomson’s resignation on 30 September 2024,
the proportion of female directors has been 33%.
The percentage of female directors is projected to rise
again to 40% when Robin Archibald retires from the Board
on conclusion of the January 2025 AGM, as the number of
directors would reduce to five. Throughout the year under
review and to the date of the Annual Report, one Board
member is from a non-white minority ethnic background.
In accordance with UK Listing Rule 6 Annex 1R(1) and (2),
and using the AIC’s definitions, the Board provides the
following information about its diversity:
Gender identity and sex
at 30 September 2024
Number of
directors
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Men 4 67%
Not applicable
– see note*
Women 2 33%
Total 6 100%
Ethnic background
at 30 September 2024
Number of
directors
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
White British
or other White
(including minority
white groups) 5 83%
Not applicable
– see note*
Mixed/Multiple
Ethnic Groups 1 17%
Total 6 100%
Notes:
* This column is not applicable as the Company is externally managed
and does not have executive management functions, specifically the
roles of CEO and CFO. The Board considers that chairing the Board,
its permanent committees and the role of senior independent director
are all senior positions in an investment company context. Accordingly,
the Chair of the Board and of the Nominations and Management
Engagement Committees is a woman. The Audit and Risk Committee
Chairman and Senior Independent Director is a man. These positions
are currently held by individuals who consider themselves ‘White British
or Other White (including minority white groups)’.
The information included in the above tables has been obtained through
questionnaires completed by the individual directors. The categories for
ethnic groups which are not represented on the Board are not included
in the ethnic background table.
The Board will aim to ensure it comprises individuals with
diverse and complementary thought, skills and experience
to meet the Company’s objectives. The directors confirm
that, in all the activities of the Board and its committees,
there will be no discrimination on the grounds of gender,
race, ethnicity, religion, sexual orientation, age, physical
ability or socioeconomic background.
Vicky Hastings
Chair of the Management Engagement Committee
11 December 2024
Nominations Committee report continued
52
Henderson European Trust plc Annual Report
The Directors’ Remuneration Report
(the “Report”) is prepared in accordance
with Schedule 8 of The Large and Medium-
sized Companies and Groups (Accounts
and Reports) Regulations 2008 as amended
(the “Regulations”). An ordinary resolution
to approve the Report will be put to
shareholders at the January 2025 AGM.
The Remuneration Policy (the “Policy”) sets out the
principles applied in the remuneration of the Company’s
directors. Shareholders last approved the Remuneration
Policy at the January 2024 AGM and will be asked to
approve the Policy again at the January 2027 AGM,
being a triennial vote. The Board may amend the level of
remuneration paid to individual directors only within the
parameters of the Policy. In determining the Remuneration
Policy, the Board takes account of factors which it deems
necessary including relevant legal and regulatory
requirements, and the provisions and recommendations
of the AIC Code of Corporate Governance.
The Board’s approach is that fees payable to the
directors should:
• reflect the time spent by them on the
Company’s affairs;
• reflect the responsibilities borne by them as directors;
• be sufficient to promote the long-term success of the
Company and comparable to the remuneration paid
by other investment trusts of a similar size with a similar
capital structure and investment objective; and
• not exceed a current aggregate remuneration limit
of £250,000 per annum.
Annual report on implementation
As the Company has no employees and the Board
comprises entirely non-executive directors, the Board
has not established a separate remuneration committee.
Directors’ remuneration is determined by the entire
Board within the parameters of the Policy approved
by shareholders. The Nominations Committee reviews
directors’ fees and makes recommendations to the
Board for its decision as to the appropriate level of fees.
During the year the directors reviewed the fees paid
by other investment companies in the AIC Europe
sector (the Company’s peer group), fees paid to
similar-sized investment companies and those paid by
other investment trusts managed by Janus Henderson.
The directors also took into consideration the time
commitment required of the role which has grown
substantially in recent years, as a result of regulation,
governance practice and level of corporate activity.
Directors’ remuneration report
Remuneration policy
Directors are remunerated in the form of fees
which are payable quarterly in arrears. No director
is eligible to receive bonuses, pension benefits,
share options or other benefits and no long-term
incentive schemes are in place. The directors may
be reimbursed for all reasonable and properly
documented expenses incurred in the performance
of their duties and may be eligible to receive
additional remuneration, in specific circumstances,
for services which go beyond the ordinary duties of
a non-executive director. The level of remuneration
paid to each director is reviewed annually,
particularly in terms of whether the Policy supports
the Company’s long-term sustainable success,
though such review will not necessarily result in a
change to the rates. The review incorporates analysis
of up-to-date information about remuneration
in other companies of comparable scale and
complexity, in order to avoid and manage conflicts
of interest in determining fee levels and reflects the
actual responsibilities and roles borne by directors.
Shareholders’ views
Any feedback from shareholders on the fees paid to
directors would be taken into account by the Board
when reviewing remuneration policy and levels.
Letters of appointment
All directors are appointed under a letter of
appointment, which is an engagement for
services and not a contract for employment.
The appointment may be terminated at any time
by written notice, with no compensation payable.
The Company has no executive directors
or employees.
Recruitment principles
All directors, including any new appointments to the
Board, are paid at the same rate. The Chair of the
Board, Senior Independent Director and the Chair
of the Audit and Risk Committee are paid a higher
fee in recognition of their additional responsibilities.
When the roles of Senior Independent Director and
Chair of the Audit and Risk Committee are carried
out by the same individual, remuneration is paid
accordingly to reflect the duties of both roles.
The Chair of the Board, the Senior Independent
Director and Audit and Risk Committee Chair
do not participate in decisions to determine
their own remuneration.
Strategic report Governance
Financial
statements
Additional
information
53
Henderson European Trust plc Annual Report 2024
Governance
Directors’ remuneration report continued
Following careful consideration, the Board agreed an
increase in directors’ fees as set out in the table below.
Role
From 1 Oct
2024
£
At 30 Sept
2024
£
At 30 Sept
2023
£
Chair of the Board 46,000 43,000 40,000
Chair of Audit and Risk
Committee and Senior
Independent Director
(combined role) 42,000 39,000 36,000
Chair of Audit and
Risk Committee
(separate role) 40,000
n/a n/a
Senior Independent
Director (separate role) 34,000 n/a n/a
Director 32,000 30,000 28,000
The Board believes that both the individual remuneration
and the aggregate fee levels take account of the needs
of an engaged non-executive board of experienced
practitioners in the sector with broad, relevant experience
for the Company.
There have been no other major decisions on directors’
remuneration or any other changes to the remuneration
paid to each individual director in the year under review.
There will be no significant change in the way that the
remuneration policy will be implemented in the course
of the new financial year.
Directors’ interests in shares (audited)
The interests of the directors in the shares of the Company
at the beginning and end of the financial year are shown
in the table below. Directors are not required to hold
shares of the Company by way of qualification.
Ordinary shares of 5p each
30 September
2024
30 September
2023
Vicky Hastings 75,000 75,000
Robin Archibald 26,030 26,030
Marco Bianconi 3,000 3,000
Melanie Blake 5,839 3,058
Stephen King
1
13,439 n/a
Rutger Koopmans
1
41,088 n/a
Stephen Macklow-Smith
2
n/a 3,947
Katya Thomson
3
37,733 n/a
1 Appointed on 4 July 2024
2 Resigned on 4 July 2024
3 Director from 4 July 2024 to 30 September 2024
Since the year end, Marco Bianconi has purchased
an additional 1,000 shares in the Company.
Performance of the Company
The graph below compares the share price total return of the Company’s shares over the ten-year period ended
30 September 2024 with the return from the FTSE World Europe (ex UK) Index on the same basis in Sterling terms,
assuming the investment of £100 on 30 September 2014 and reinvestment of all dividends and income (excluding
dealing expenses). During the 10-year period the net assets of the Company increased from £171 million to £664 million,
and dividends increased from 2.345p per share (with the subdivision of shares in February 2022 taken into account)
to 4.350p per share, if approved by shareholders for the year ended 30 September 2024.
Total performance return for 10 years to 30 September 2024
300
250
Sep
2014
Sep
2015
Sep
2016
Sep
2017
Sep
2018
Sep
2019
Sep
2020
Sep
2021
Sep
2022
Sep
2023
Sep
2024
200
150
100
50
0
Share price total return Benchmark total return
Sources: Morningstar Direct and LSEG Datastream
54
Henderson European Trust plc Annual Report
Directors’ remuneration report continued
Directors’ remuneration (audited)
The remuneration paid to the directors who served during the years ended 30 September 2024 and 30 September 2023
is as follows:
Year ended
30 Sept 2024
Total fees
£
Year ended
30 Sept 2023
Total fees
£
Year ended
30 Sept 2024
Taxable
benefits
†
£
Year ended
30 Sept 2023
Taxable
benefits
†
£
Year ended
30 Sept 2024
Total fees
and benefits
£
Year ended
30 Sept 2023
Total fees
and benefits
£
Vicky Hastings
1
43,000 40,000 – – 43,000 40,000
Robin Archibald
2
39,833 30,167 715 1,165 40,548 31,332
Stephen Macklow-Smith
3
22,823 28,000 – – 22,823 28,000
Marco Bianconi 30,000 28,000 4,385 6,813 34,385 34,813
Melanie Blake
4
30,000 7,000 2,974 370 32,974 7,370
Stephen King
5
7,258 – – – 7,258 –
Rutger Koopmans
5
7,258 – – – 7,258 –
Katya Thomson
5, 6
7,258 – – – 7,258 –
Eliza Dungworth
7
– 22,333 – 1,731 – 24,064
Total 187,430 155,500 8,074 10,079 195,504 165,579
Notes:
The table above omits other columns set out in the relevant regulations because no payments of other types such as performance related pay, vesting
performance related pay and pension-related benefits were made.
1 Chair and highest paid director
2 SID and ARC Chairman – combined role since 1 June 2023. An additional £833 is reflected in the 2024 fee total, being backdated consideration of the
higher increment paid to Robin Archibald following his additional appointment as ARC Chairman.
3 Retired from the Board on 4 July 2024
4 Appointed as director on 3 July 2023
5 Appointed as director on 4 July 2024
6 Retired from the board on 30 September 2024
7 Retired from the Board on 31 May 2023
† Reimbursement of travel expenses to attend board business. The expenses are reimbursed through payroll and in certain circumstances are subject to
personal taxation and national insurance which are ‘grossed up’. No other remuneration or compensation was paid or payable by the Company during
the year to any of the current or former directors or third parties specified by any of them.
Annual change in directors’ remuneration
The table below sets out the annual percentage change in fees over the previous five years for each Company director
who has served for at least two complete financial years.
Director
Year to
30 Sept 2024
1
%
Year to
30 Sept 2023
1
%
Year to
30 Sept 2022
%
Year to
30 Sept 2021
1
%
Year to
30 Sept 2020
%
Vicky Hastings
2
7.5 5.3 0 46.6 3.7
Robin Archibald
3
29.3 2.3 2.9 14.6 0
Stephen Macklow-Smith
4
n/a 3.7 n/a n/a n/a
Marco Bianconi
5
7.1 n/a n/a n/a n/a
1 The increases in the years to 2024, 2023 and 2021 reflect the fee rises for all directors from 1 October 2023, 2022 and 2020 respectively.
2 The increase in Vicky Hastings’ fees in the year to 2021 incorporates the fee change following her appointment as Chair of the Board on 25 September 2020.
3 The increase in Robin Archibald’s fees in the year to 2021 includes the fee change arising from Robin’s appointment as Senior Independent Director on
10 February 2021. The increase in Robin’s fees in the year to 2024 includes the fee change following his appointment as combined Senior Independent
Director and Audit and Risk Committee Chairman on 1 June 2023.
4 Appointed as director on 9 July 2021. The increase reflects the fee increase for all directors from 1 October 2022. Resigned as director on 4 July 2024.
5 Appointed as director on 1 June 2022
Strategic report Governance
Financial
statements
Additional
information
55
Henderson European Trust plc Annual Report 2024
Governance
Directors’ remuneration report continued
Relative importance of spend on pay
To show the relative importance of spend on pay, the table below sets out the total level of remuneration compared
to the distributions to shareholders by way of dividends. In the year to 30 September 2024, the Company bought
back 34,291,408 into treasury, including those bought back as part of the HEFT/HNE combination. There were no
other significant distributions, payments or other uses of the Company’s profit or cash flow deemed to assist in
the understanding of the relative importance of spend on pay.
Year to
30 Sept 2024
£
Year to
30 Sept 2023
£
Change
£
Change
%
Total remuneration 195,504 165,579 29,925 18.1
Dividends paid 12,978,855 10,532,022 2,446,833 23.2
Note: Total remuneration paid will fluctuate due to the number of directors in office in any one year.
Statement of voting at annual general meeting
At the Company’s annual general meeting held on 25 January 2024, shareholders approved the Remuneration Policy
and the Directors’ Remuneration Report in respect of the year ended 30 September 2023. The following votes were
received on the two resolutions, both of which were held on a poll:
Resolution
For
(incl discretionary)
% of votes
(excl votes
withheld) Against
% of votes
(excl votes
withheld) Withheld
Remuneration policy 107,761,278 99.93 70,146 0.07 57,640
Remuneration report 107,759,018 99.93 76,266 0.07 53,780
On behalf of the Board
Vicky Hastings
Chair
11 December 2024
56
Henderson European Trust plc Annual Report
Directors’ report
The directors present their report
and the audited financial statements
of the Company for the year ended
30 September 2024. The Company is
a public limited company registered
and domiciled in England & Wales with
company number 427958. It was active
throughout the year. The Snapshot of
our Portfolio on pages 12–13, Corporate
Governance Report and each committee’s
report on pages 36–52, Statement of
Directors’ Responsibilities on page 59
and the additional information on pages
94–100 form part of the Directors’ Report.
Share capital
As at 30 September 2024 the Company’s paid-up share
capital comprised 367,390,497 ordinary shares of 5p each,
of which 37,913,196 shares were held in treasury. Holders of
the Company’s shares are entitled to one vote for every
share. Shares in treasury do not carry voting rights. The
number of voting rights in the Company was therefore
329,477,301 as at 30 September 2024. At the start of the
year under review, share capital comprised 216,389,910
ordinary shares with 3,621,788 in treasury.
The directors seek annual authority from shareholders to
allot new shares, to disapply pre-emption rights of existing
shareholders and to buy back shares for cancellation or
to be held in treasury. At the AGM held on 25 January 2024,
shareholders authorised the directors to allot up to
21,276,800 ordinary shares (with a nominal value of
£1,063,840 and representing 10% of issued share capital)
for cash, and to repurchase up to 31,893,941 shares (with
a nominal value of £1,594,697 and representing 14.99%
of issued share capital) for cancellation or to be held in
treasury, where the Company’s shares trade at a discount
to NAV. The authority to allot and repurchase shares expires
at the earlier of 15 months from the date of the passing of
the resolution and the next AGM in January 2025. No shares
have been issued under this authority.
During the year to 30 September 2024, the Company
repurchased 2,376,191 shares with a nominal value of
£118,810 to hold in treasury under such AGM authority at
a total cost including expenses of £4,279,000, constituting
1.1% of issued share capital at the beginning of the year
(excluding treasury shares). As at 9 December 2024,
being the latest practicable date prior to publication of
the Annual Report, a total of 8,156,478 shares have been
bought back under this AGM authority, with a nominal
value of £407,824.
As part of the HEFT/HNE combination, the Company issued
151,000,587 shares with a nominal value of £7,550,029 to
HNE shareholders for total proceeds (net of costs) of
£308,850,000, and repurchased 31,915,217 shares with
a nominal value of £1,595,761 from the Company’s
shareholders on 4 July 2024 pursuant to the authority
granted at the general meeting on 19 June 2024, at a
cost of £63,907,000. Shareholder authority was obtained
to purchase HEFT shares by means of a tender offer for
up to 15% of the shares in issue (excluding shares held
in treasury). This authority was fully deployed.
Since the year end and as at 9 December 2024,
5,780,287 shares have been repurchased to be held
in treasury, with a nominal value of £289,014. A total of
43,693,483 shares are held in treasury and total share
capital remains at 367,390,497 ordinary shares.
The Company’s articles of association permit the
Company to purchase its own shares and to fund such
purchases from its accumulated realised capital reserves.
There are no restrictions concerning the transfer of
securities in the Company, no special rights with regard
to control attached to securities, no restrictions on voting,
no agreements between holders of securities regarding
their transfer known to the Company and no agreement
to which the Company is party that affects its control
following a takeover bid. Where they exist, the revenue
profits of the Company (including accumulated revenue
reserves) are available for distribution by way of dividends
to the holders of the shares. Upon a winding up, after
meeting the liabilities of the Company, the surplus assets
would be distributed to the shareholders pro rata to their
holding of shares.
Holdings in the Company’s shares
Declarations of interests in the voting rights of the
Company as at 30 September 2024 in accordance with
the Disclosure Guidance and Transparency Rules were
as follows:
% of voting
rights
1607 Capital Partners LLC 9.9
Allspring Global Investments 9.3
Rathbones Group
8.1
City of London Investment Management 6.8
Evelyn Partners 6.2
Additionally, holdings of the Company’s shares on
execution-only stockbroking platforms which form
over 3% in size at 30 September 2024 were as follows:
% of voting
rights
Hargreaves Lansdown 6.7
Interactive Investor 6.6
HSDL 4.3
In respect of notified changes since the year end,
1607 Capital Partners, LLC reported to the Company its
increased holding from 9.9% to 10.1% on 15 October 2024.
Strategic report Governance
Financial
statements
Additional
information
57
Henderson European Trust plc Annual Report 2024
Governance
Directors’ report continued
Related-party transactions
The Company’s transactions with related parties in the
year were with the directors and the Manager. There were
no material transactions between the Company and its
directors during the year other than amounts paid to
them in respect of remuneration and expenses, for which
there were no outstanding amounts payable at the year
end. Directors’ shareholdings in the Company are
disclosed on page 54.
In respect of the provision of services by Janus Henderson,
other than fees payable by the Company in the ordinary
course of business, the facilitation of marketing activities
with third parties, and the HEFT/HNE combination, there
were no material transactions with the Manager affecting
the financial position of the Company during the year
under review. More details on transactions with the
Manager, including amounts outstanding at the year end,
are given in note 23 on pages 86 and 87.
Other information and
future developments
Information is detailed in the Strategic Report regarding
the recommended final dividend, future developments,
financial risks and instruments. The principal financial
risks and the Company’s policies and procedures for
managing these risks are set out in note 15 to the
financial statements on pages 80-84. The Company’s
environmental statements are set out in the Strategic
Report on pages 30–34.
The directors of the Company and their other
appointments are listed on pages 36–37. All directors
in office at the date of this Annual Report are standing
for re-election at the AGM on 29 January 2025, with the
exception of Robin Archibald. Information on directors’
insurance and indemnification is given on page 43.
Directors’ beneficial interests and those of their connected
persons in the securities of the Company are on page 54.
Each director in office at the date of approval of this
report confirms that to the best of their knowledge and
belief, there is no information relevant to the preparation
of the Annual Report of which the Company’s auditor is
unaware and that they have taken all the steps a director
might reasonably be expected to have taken to be aware
of relevant audit information and to establish that the
Company’s auditor is aware of that information.
UK Listing Rule 6.6.4 requires the Company to include
certain information in a single identifiable section of the
Annual Report or a cross-reference table indicating where
the information is set out. There are no disclosures to be
made in this regard.
There are no post-balance sheet events to report.
Annual general meeting (“AGM”)
Shareholders are invited to attend our AGM at 11.30 am
on Wednesday, 29 January 2025 at 201 Bishopsgate,
London EC2M 3AE. If shareholders prefer to attend virtually,
we welcome you to join by conferencing software Zoom.
Attending either in person or by Zoom will allow you to
watch a presentation from your Fund Managers and
ask questions. To join the AGM by videoconference,
please visit www.janushenderson.com/het-agm to register.
Voting will be carried out on a poll among those physically
present at the meeting. We are not able to offer live voting by
Zoom, so we encourage all shareholders, particularly those
who are not able to attend in person, to submit their votes
via proxy, ahead of the deadline of 11.30 am on Monday,
27 January 2025. Voting on a poll gives all shareholders
the opportunity to participate in the decision-making of the
Company and have their votes recorded in proportion to
the number of shares they own. The results of the poll will
be published on the Company’s website later in the day.
The Board is keen to have as high a voting participation
as possible, including from private investors. Investors
holding shares through share dealing platforms,
such as Hargreaves Lansdown, Halifax Share Dealing
and Interactive Investor, may find this link, which
outlines how you can vote your shares, useful:
www.theaic.co.uk/how-to-vote-your-shares.
If you are an institutional investor, you may be able to
appoint a proxy electronically via the Proxymity platform.
For further information regarding Proxymity, please
go to www.proxymity.io. Your proxy must be lodged
by 11.30 am on Monday, 27 January 2025 to be valid.
The Notice of AGM is on pages 89–93, together with
an explanation of each resolution. If shareholders would
like to submit any questions in advance of the AGM,
you are welcome to send these to the corporate
secretary at itsecretariat@janushenderson.com.
Reappointment of auditor
Ernst & Young LLP has indicated willingness to continue
in office as auditor to the Company, and resolutions 9
and 10 proposing their reappointment and authorising
the Audit and Risk Committee to determine their
remuneration for the ensuing year will be put to
shareholders at the AGM. Further information about
their reappointment can be found in the Audit and
Risk Committee Report on pages 44–48.
Voting recommendation
Your Board considers that the resolutions to be proposed
at the AGM are in the best interests of the shareholders as
a whole. The Board recommends that shareholders vote
in favour of each resolution, as the directors intend to do
in respect of their own beneficial holdings.
This Directors’ Report has been approved by the Board.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
11 December 2024
58
Henderson European Trust plc Annual Report
Statement of directors’ responsibilities
The directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. The directors have
prepared the financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards comprising FRS
102, the financial reporting standard applicable in the
United Kingdom and Republic of Ireland and applicable
law). Under company law the directors must not approve
the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for
that year.
In preparing these financial statements, the directors are
required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that
are reasonable and prudent;
• state whether applicable UK accounting standards
have been followed, subject to any material departures
disclosed and explained in the financial
statements; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the financial
statements and Directors’ Remuneration Report comply
with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors consider that the Annual Report, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
Directors’ responsibility statement
Each director, as listed on pages 36–37, confirms that, to
the best of their knowledge:
• the financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards comprising FRS 102 and applicable law)
give a true and fair view of the assets, liabilities,
financial position and return of the Company; and
• the Strategic Report includes a fair review of the
development and performance of the business and
the position of the Company, together with a description
of the principal risks and uncertainties that it faces.
On behalf of the Board
Vicky Hastings
Chair of the Board
11 December 2024
Strategic report Governance
Financial
statements
Additional
information
59
Henderson European Trust plc Annual Report 2024
Governance
Financial statements
In this section
61 Independent Auditor’s report
68 Income statement
69 Statement of changes in equity
70 Statement of financial position
71 Cash flow statement
72 Notes to the financial statements
Image: City skyline, Basel, Switzerland
60
Henderson European Trust plc Annual Report
Independent Auditor’s report to the
members of Henderson European Trust plc
Opinion
We have audited the financial statements of Henderson European Trust plc (“the Company”) for the year ended
30 September 2024 which comprise Income Statement, Statement of Changes in Equity, Statement of Financial
Position and Cash Flow Statement and the related notes 1 to 25, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom
Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”
(United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
• give a true and fair view of the Company’s affairs as at 30 September 2024 and of its profit for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
as applied to public interest entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Company’s
ability to continue to adopt the going concern basis of accounting included the following procedures:
• We confirmed our understanding of the Company’s going concern assessment process and engaged with the
directors and the Company Secretary to determine if all key factors that we have become aware of during our
audit were considered in their assessment.
• We inspected the directors’ assessment of going concern, including the revenue forecast. In preparing the revenue
forecast, the Company has concluded that it is able to continue to meet its ongoing costs as they fall due.
• We have reviewed the factors and assumptions, including the impact of the current economic environment, as
applied to the revenue forecast and the liquidity assessment of the investments. We considered the appropriateness
of the methods used to calculate the revenue forecast and the liquidity assessment and determined, through testing
of the methodology and calculations, that the methods, inputs and assumptions utilised were appropriate to be able
to make an assessment of the Company.
• We assessed the risk of breaching the debt covenants applicable to the Company’s debt arrangements as a result
of a reduction in the value of the Company’s investment portfolio. We calculated the Company’s compliance with
debt covenants and performed reverse stress testing in order to identify what factors would lead to the Company
breaching those covenants.
• We considered the mitigating factors included in the revenue forecasts and covenant calculations that are within
the control of the Company. We reviewed the Company’s assessment of the liquidity of investments held and
evaluated the Company’s ability to sell those investments in order to cover working capital requirements should
revenue decline significantly.
• We reviewed the Company’s going concern disclosures included in the annual report in order to assess that the
disclosures were appropriate and in conformity with the reporting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going
concern to 31 December 2025, which is a period of at least twelve months from the date the financial statements are
authorised for issue.
In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report. However, because not all future events or conditions can be predicted, this statement is not a
guarantee as to the Company’s ability to continue as a going concern.
Strategic report Governance
Financial
statements
Additional
information
61
Henderson European Trust plc Annual Report 2024
Financial
statements
Independent Auditor’s report continued
Overview of our audit approach
Key audit matters
• Risk of incomplete or inaccurate revenue recognition, including classification
of special dividends as revenue or capital items in the Income Statement
• Risk of incorrect valuation or ownership of the investment portfolio
• Risk of incorrect accounting for the combination with Henderson EuroTrust plc
Materiality
• Overall materiality of £6.64m which represents 1% of net assets
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our
audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size,
risk profile, the organisation of the Company and effectiveness of controls, including controls and changes in the
business environment when assessing the level of work to be performed.
Climate change
Stakeholders are increasingly interested in how climate change will impact the Company. The Company has
determined that the most significant future impacts from climate change on its operations will be from how climate
change could affect the Company’s investments and overall investment process. This is explained on pages 21–23 in
the principal risks and uncertainties. This disclosure forms part of the “Other information,” rather than the audited
financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether
they are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or
otherwise appear to be materially misstated, in line with our responsibilities on “Other information”.
Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the
financial statements as set out in Note 1m and conclusion that there was no further impact of climate change to be
taken into account as the investments are valued based on market pricing as required by United Kingdom Generally
Accepted Accounting Practice. We also challenged the directors’ considerations of climate change in their assessment
of viability and associated disclosures.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon,
and we do not provide a separate opinion on these matters.
62
Henderson European Trust plc Annual Report
Independent Auditor’s report continued
Risk Our response to the risk
Key observations
communicated to the
Audit and Risk Committee
Incomplete or inaccurate revenue
recognition, including the
classification of special dividends
as revenue or capital items in the
Income Statement (as described
on page 46 in the Report of the
Audit and Risk Committee and
as per the accounting policy
set out on page 73).
The total revenue for the year to
30 September 2024 was £12.07m
(2023: £11.43m), consisting primarily
of dividend income from listed
equity investments.
The investment income receivable
by the Company during the year
directly affects the Company’s
revenue return. There is therefore
a risk of incomplete or inaccurate
recognition of revenue through the
failure to recognise proper income
entitlements or to apply an
appropriate accounting treatment.
In addition to the above, the directors
may be required to exercise
judgement in determining whether
income receivable in the form of
special dividends should be classified
as ‘revenue’ or ‘capital’ in the
Income Statement.
We have performed the following procedures:
We obtained an understanding of the processes
and controls surrounding revenue recognition,
including the classification of special dividends,
by performing walkthrough procedures.
For 100% of dividends received and accrued,
we recalculated the income by multiplying the
investment holdings at the ex-dividend date,
traced from the accounting records, by the
dividend per share, which was agreed to an
independent data vendor. We also agreed a
sample of dividends received and accrued to
bank statements.
Where dividends were received or accrued in
foreign currency, we translated the amount into
the reporting currency of the Company using
exchange rates sourced from an independence
data vendor.
For all dividends accrued, we reviewed the
investee Company announcements to assess
whether the dividend entitlements arose prior
to 30 September 2024.
To test completeness of recorded income,
we verified that expected dividends for each
investee Company held during the year had
been recorded as income with reference to
investee Company announcements obtained
from an independent data vendor.
For all investments held during the year,
we reviewed the type of dividends paid with
reference to an external data vendor to identify
those which were special. Based on the work
performed, we identified one special dividend
received during the year, classified as revenue.
We assessed the appropriateness of
management’s classification as revenue
by reviewing the underlying rationale for
the distribution.
The results of our
procedures identified
no material misstatement
in relation to the risk of
incomplete or inaccurate
revenue recognition,
including incorrect
classification of special
dividends as revenue
or capital items in the
Income Statement.
Strategic report Governance
Financial
statements
Additional
information
63
Henderson European Trust plc Annual Report 2024
Financial
statements
Independent Auditor’s report continued
Risk Our response to the risk
Key observations
communicated to the
Audit and Risk Committee
Incorrect valuation or ownership
of the investment portfolio
(as described on page 46 in
the Report of the Audit and
Risk Committee and as per
the accounting policy set
out on page 72).
The valuation of the investment
portfolio at 30 September 2024 was
£691.50m (2023: £384.25m) consisting
of listed investments.
The fair value of investments is
determined by reference to stock
exchange quoted market bid prices
at the close of business on the
reporting date.
The valuation of the assets held in the
investment portfolio is the primary
driver of the Company’s net asset
value and total return. Incorrect
investment pricing, or a failure to
maintain proper legal title of the
assets held by the Company could
have a significant impact on the
portfolio valuation and the return
generated for shareholders.
We have performed the following procedures:
We obtained an understanding of the processes
and controls surrounding investment valuation
and legal title of investments by performing
walkthrough procedures.
For all investments in the portfolio, we
compared the market prices and exchange
rates applied to an independent pricing vendor
and recalculated the investment valuations as
at the year-end.
For all investments in the portfolio, we obtained
the market prices from an independent pricing
vendor for five business days pre and post the
year end date and calculated the day-on-day
movements to identify any stale prices.
We verified that the listed prices are valid
fair values through review of trading activity.
We compared the Company’s investment
holdings at 30 September 2024 to an
independent confirmation received directly
from the Company’s custodian.
The results of our
procedures identified
no material misstatement
in relation to the risk of
incorrect valuation or
ownership of the
investment portfolio.
Risk of incorrect accounting for
the combination with Henderson
EuroTrust plc (as described on
page 46 in the Report of the Audit
and Risk Committee and as per
the accounting policy set out on
page 72).
During the year the board of
Henderson EuroTrust plc agreed
heads of terms with the Company
for a transfer of assets of Henderson
EuroTrust plc with the Company by
means of a section 110 scheme of
reconstruction and winding up. The
transfer of assets was completed on
4 July 2024 in exchange for the issue
of new shares.
There is a risk that assets and
liabilities transferred from Henderson
EuroTrust plc to the Company were
not complete or recorded correctly.
There is also a risk that the issuance
of shares related to the transaction
is incorrectly accounted for or
incorrectly disclosed in the financial
statements of the Company.
We have performed the following procedures:
We obtained the combination calculation and
compared this calculation to the scheme of
reconstruction documents.
We agreed the number of shares issued
pursuant to the transaction to the London Stock
Exchange announcements and compared
these to accounting records of the Company.
We agreed the cash and investments
transferred to the Company as part of the
transaction to the accounting records of
the Company.
We obtained a breakdown of costs incurred
by the Company related to the transaction
and tested that they have been appropriately
accounting for and disclosed in the Statement
of Changes in Equity in accordance with FRS 102.
We reviewed the disclosures in the annual
report and financial statements and ensured
the strategic report, s172 statement and
financial statements provide details of the
combination and the contribution received
from Janus Henderson in relation to the costs
related to the combination.
The results of our
procedures identified no
material misstatements
in relation to the risk of
incorrect accounting for
the combination with
Henderson EuroTrust plc.
In the current year we have added a key audit matter on ‘Risk of incorrect accounting for the combination with
Henderson EuroTrust plc’ as it is a significant event that has occurred during the period and has a significant impact
on the financial statements of the Company.
64
Henderson European Trust plc Annual Report
Independent Auditor’s report continued
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to
influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining
the nature and extent of our audit procedures.
We determined materiality for the Company to be £6.64 million (2023: £3.79 million), which is 1% (2023: 1%) of net assets.
We believe that net assets provides us with materiality aligned to the key measure of the Company’s performance.
During the course of our audit, we reassessed initial materiality and found no reason to alter the basis of calculation
at year end
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Company’s overall control environment,
our judgement was that performance materiality was 75% (2023: 75%) of our planning materiality, namely £4.98m
(2023: £2.84m).
Given the importance of the distinction between revenue and capital for investment trusts, we have also applied
a separate testing threshold for the revenue column of the Income Statement of £0.56m (2023: £0.50m) being 5%
(2023: 5%) of the revenue profit before taxation.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess
of £0.33m (2023: £0.19m), which is set at 5% of planning materiality, as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above
and in light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of the other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the strategic report and directors’ report have been prepared in accordance with applicable legal requirements.
Strategic report Governance
Financial
statements
Additional
information
65
Henderson European Trust plc Annual Report 2024
Financial
statements
Independent Auditor’s report continued
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
• the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the
UK Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained
during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and
any material uncertainties identified set out on page 59;
• Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and
why the period is appropriate set out on page 24;
• Directors’ statement on fair, balanced and understandable set out on page 24;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on
page 24;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 43; and
• The section describing the work of the audit and risk committee set out on page 44 and 45.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 59, the Directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
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Henderson European Trust plc Annual Report
Independent Auditor’s report continued
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined below, to detect irregularities, including fraud. The risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent
to which our procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the Company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and
determined that the most significant are United Kingdom Generally Accepted Accounting Practice, the Companies
Act 2006, the Listing Rules, UK Corporate Governance Code, the Association of Investment Companies’ Code and
Statement of Recommended Practice, Section 1158 of the Corporation Tax Act 2010 and the Companies
(Miscellaneous Reporting) Regulations 2018.
• We understood how the Company is complying with these frameworks through discussions with the Audit and
Risk Committee and the Company Secretary and review of Board minutes and the Company’s documented
policies and procedures.
• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud
might occur by considering the key risks impacting the financial statements. We identified a fraud risk with respect
to the incomplete or inaccurate revenue recognition through the incorrect classification of special dividends in the
Income Statement. Further discussion of our approach is set out in the section on key audit matters above.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and
regulations. Our procedures involved review of the reporting to the Directors with respect to the application of the
documented policies and procedures and review of the financial statements to ensure compliance with the
reporting requirements of the Company.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the audit and risk committee, we were appointed by the Company on 25 July 2014
to audit the financial statements for the year ending 30 September 2024 and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is 11 years, covering
the years ending 30 September 2014 to 30 September 2024.
• The audit opinion is consistent with the additional report to the audit and risk committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members
as a body, for our audit work, for this report, or for the opinions we have formed.
Caroline Mercer (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Edinburgh
11 December 2024
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Henderson European Trust plc Annual Report 2024
Financial
statements
Income statement
Notes
Year ended 30 September 2024 Year ended 30 September 2023
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
2 Gains on investments held at fair value
through profit or loss – 46,078 46,078 – 68,293 68,293
Exchange gains/(losses) on
currency transactions – 1,093 1,093 – (5) (5)
3
Income from investments 11,558 – 11,558 11,206 – 11,206
4
Other income 515 – 515 224 – 224
Gross revenue and capital gains 12,073 47,171 59,244 11,430 68,288 79,718
5
Management fee (735) (2,204) (2,939) (587) (1,762) (2,349)
6
Other administration expenses (656) (22) (678) (639) – (639)
Net return before finance costs
and taxation 10,682 44,945 55,627 10,204 66,526 76,730
7
Finance costs (118) (355) (473) (129) (385) (514)
Net return before taxation 10,564 44,590 55,154 10,075 66,141 76,216
8
Taxation on net return 147 – 147 (887) (36) (923)
Net return after taxation 10,711 44,590 55,301 9,188 66,105 75,293
9
Return per ordinary share 4.43p 18.45p 22.88p 4.32p 31.07p 35.39p
The ‘Total’ columns of this statement represent the Income Statement of the Company.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published
by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The Company had no recognised gains or losses other than those disclosed in the Income Statement.
The notes on pages 72–87 form part of these financial statements.
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Henderson European Trust plc Annual Report
Statement of changes in equity
Notes Year ended 30 September 2024
Called-up
share
capital
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Other
Reserves
£’000
Total
£’000
At 30 September 2023 10,819 41,995 217,076 12,496 96,611 378,997
Cancellation of share premium account – (41,995) – – 41,995 –
16, 17 Issue of ordinary shares
on HEFT/HNE combination 7,550 302,753 – – – 310,303
17 Issue costs in respect of
the HEFT/HNE combination – (1,453) – – – (1,453)
18 Contribution from JHI towards
the HEFT/HNE combination – – 1,550 – – 1,550
20 Tender offer of ordinary shares for
treasury – – – – (63,907) (63,907)
Net return after taxation – – 44,590 10,711 – 55,301
20
Buyback of ordinary shares for treasury – – – – (4,279) (4,279)
10
Ordinary dividends paid – – – (12,978) – (12,978)
At 30 September 2024 18,369 301,300 263,216 10,229 70,420 663,534
Notes Year ended 30 September 2023
Called-up
share
capital
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Other
Reserves
£’000
Total
£’000
At 30 September 2022 10,819 41,995 151,154 13,840 96,611 314,419
Net return after taxation – – 66,105 9,188 – 75,293
Buyback of ordinary shares for treasury – – (183) – – (183)
10 Ordinary dividends paid – – – (10,532) – (10,532)
At 30 September 2023 10,819 41,995 217,076 12,496 96,611 378,997
The notes on pages 72–87 form part of these financial statements.
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Henderson European Trust plc Annual Report 2024
Financial
statements
Statement of financial position
Notes
2024
£’000
2023
£’000
Fixed assets
11
Investments held at fair value through profit or loss 691,497 384,249
Current assets
12
Debtors 14,032 11,745
Cash at bank 3,113 15,857
17,145 27,602
13
Creditors: amounts falling due within one year (16,143) (2,655)
Net current assets 1,002 24,947
Total assets less current liabilities 692,499 409,196
14
Creditors: amounts falling due after one year (28,965) (30,199)
Net assets 663,534 378,997
Capital and reserves
16
Called-up share capital 18,369 10,819
17
Share premium account 301,300 41,995
18
Capital reserve 263,216 217,076
19
Revenue reserve 10,229 12,496
20
Other reserves 70,420 96,611
Shareholders’ funds 663,534 378,997
21
Net asset value per ordinary share 201.39p 178.13p
These financial statements were approved and authorised for issue by the Board of Directors on 11 December 2024 and
were signed on its behalf by:
Vicky Hastings
Chair of the Board
The notes on pages 72–87 form part of these financial statements.
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Henderson European Trust plc Annual Report
Cash flow statement
Year ended
30 September
2024
£’000
Year ended
30 September
2023
£’000
Cash flows from operating activities
Net return before taxation 55,154 76,216
Add back: finance costs 473 514
Gains on investments held at fair value through profit or loss (46,078) (68,293)
(Gains)/losses on foreign exchange (1,093) 5
Taxation paid (257) (1,389)
Increase in debtors (232) (163)
Increase in creditors 438 1,099
Net cash inflow from operating activities
1
8,405 7,989
Cash flows from investing activities
Sales of investments held at fair value through profit or loss 461,678 288,351
Purchases of investments held at fair value through profit or loss (405,566) (290,172)
Net cash inflow/(outflow) from investing activities 56,112 (1,821)
Cash flows from financing activities
Buyback of ordinary shares for treasury (3,044) (183)
Equity dividends paid (12,978) (10,532)
Costs associated with the HEFT/HNE combination (1,225) –
Net cash acquired and received following the HEFT/HNE combination 4,512 –
Total cash paid for the tender offer (including costs) (63,907) –
Interest paid (471) (863)
Net cash outflow from financing activities (77,113) (11,578)
Net decrease in cash and equivalents (12,596) (5,410)
Cash and cash equivalents at beginning of period 15,857 21,272
Losses on foreign exchange (148) (5)
Cash at bank at end of period 3,113 15,857
Comprising:
Cash at bank 3,113 15,857
1 Cash inflow from dividends was £10,442,000 (2023: £9,394,000) and cash inflow from interest was £535,000 (2023: £213,000).
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Henderson European Trust plc Annual Report 2024
Financial
statements
1 Accounting policies
(a) Basis of preparation
The Company is a registered investment company as defined in s833 Companies Act 2006 and is incorporated in the
United Kingdom. It operates in the United Kingdom and is registered at the address on page 100.
The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 – The Financial
Reporting Standard applicable in the UK and Republic of Ireland and with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts (the “SORP”) amended in July 2022
by the Association of Investment Companies.
The principal accounting policies applied in the presentation of these financial statements are set out below.
These policies have been consistently applied to all the years presented.
The financial statements have been prepared under the historical cost basis except for the measurement of investments
at fair value. In applying FRS102, financial instruments have been accounted for in accordance with s11 and s12 of the
Standard. All Company’s operations are of a continuing nature.
Issue of shares pursuant to the HEFT/HNE combination
On 4 July 2024, the Company issued new ordinary shares to shareholders of HNE in consideration for the receipt by the
Company of assets pursuant to a scheme of reconstruction and liquidation of HNE. The directors have considered the
substance of the assets and activities of HNE in determining whether this represents the acquisition of a business. In this
case the combination is not judged to be an acquisition of a business, and therefore has not been treated as a business
combination in accounting terms. Rather, the cost to acquire the assets and liabilities of HNE has been allocated
between the acquired identifiable assets and liabilities based on their relative fair values on the acquisition date without
attributing any amount to goodwill or to deferred taxes. Investments and cash were transferred from HNE. All assets were
acquired at their fair value. The value of the assets received, in exchange for shares issued by the Company, have been
recognised in share capital and share premium, as shown in the Statement of Changes in Equity. Direct costs, including
professional costs, in respect of the shares issued have been recognised in the share premium account. As part of
the HEFT/HNE combination, JHI contributed £1.55m to the costs of the proposals and further details are included in
note 23.
(b) Going concern
The assets of the Company consist of securities that are readily realisable and, 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 these financial statements being 31 December 2025. In coming to this conclusion, the directors have
considered the nature of the portfolio, being that the securities held are readily realisable, the strength of its
distributable reserves, and the ongoing costs of the Company. The directors have also reviewed the revenue forecast
and size of the Company’s long-term debt and stress-tested its financial covenants.
As part of their usual assessment of risks facing the Company, the directors have further considered the continued
macroeconomic and geopolitical uncertainty with the escalating conflict in the Middle East, the ongoing war in Ukraine,
heightened tensions between the US and China, the impact of these on supply chains and the possible impact of
climate change risk on the value of the portfolio. The directors have concluded that the Company is able to meet its
financial obligations, including the interest payments for its loan notes, as they fall due for a period of at least twelve
months from the date of this report.
(c) Investments held at fair value through profit or loss
Investment purchases are accounted for and initially recognised at the trade date of the acquisition. All investments
are measured upon initial recognition as held at fair value through profit or loss. Sales of investments are accounted for
at the trade date of the disposal. Proceeds are measured at fair value, which are regarded as the proceeds of sale less
any transaction costs. The fair value of the investments is based on their quoted bid price at the Statement of Financial
Position date, without deduction of the estimated future selling costs.
Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are
recognised in the Income Statement as gains or losses from investments held at fair value through profit or loss. Also
included in this caption are transaction costs incurred on the purchase and disposal of assets.
Notes to the financial statements
For the year ended 30 September 2024
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Henderson European Trust plc Annual Report
1 Accounting policies continued
(d) Foreign currency
The results and financial position of the Company are expressed in pounds Sterling, which is the functional and
presentational currency of the Company. Sterling is the functional currency of the primary economic environment
in which the Company operates.
Transactions recorded in overseas currencies during the year are translated into Sterling at the appropriate daily
exchange rates. Monetary assets and liabilities and equity investments held at fair value through profit or loss which
are denominated in foreign currencies at the Statement of Financial Position date are translated into Sterling at the
exchange rates ruling at that date.
Any gains or losses on translation of foreign currency balances, whether realised or unrealised, are taken to the
capital or to the revenue return of the Income Statement depending on whether the gain or loss is of a capital or
revenue nature.
(e) Income
Dividends receivable from equity shares are taken to the revenue return on an ex-dividend basis except where, in the
opinion of directors, the dividend is capital in nature in which case it is taken to the capital return. The ordinary element
of scrip dividends received in lieu of cash dividends is recognised as revenue. Any enhancement above the cash
dividend is treated as capital.
Bank interest is accounted for on an accruals basis.
(f) Management and administrative expenses and finance costs
All expenses and finance costs are accounted for on an accruals basis. The annual management fee and borrowing
interest charges are allocated 75% to capital and 25% to revenue in line with the Board’s expected long-term split of
returns in the form of capital and income profits respectively. All the other administrative expenses are charged to the
revenue return of the Income Statement.
(g) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. Primarily this relates to overseas
irrecoverable withholding tax.
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in
the Income Statement because it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated
using the applicable tax rate of corporation tax for the accounting period.
In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented
against capital returns in the supplementary information in the Income Statement is the marginal basis. Under this
basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of
the Income Statement, then no tax relief is transferred to the capital return column.
Deferred taxation is provided on all timing differences that have originated but not reversed by the Statement of
Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than
not that there will be suitable profits from which the future reversal of timing differences can be deducted. Any liability
to deferred tax is provided at the tax rates expected to apply based on laws that have been enacted or substantially
enacted at the Statement of Financial Position date. Deferred tax assets and liabilities are not discounted to reflect
the time value of money.
(h) Borrowings
Interest bearing bank loans, overdrafts and unsecured loan notes are recorded initially at fair value, being the proceeds
received, less direct issue costs. They are subsequently remeasured at amortised cost. Amortised cost is calculated
by taking into account any costs that are an integral part of the effective interest rate. Such costs, including interest
payable, premiums on settlement or redemption and direct issue costs, are accounted for on an accruals basis in
the Income Statement using the effective interest rate method.
Notes to the financial statements continued
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Additional
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Henderson European Trust plc Annual Report 2024
Financial
statements
1 Accounting policies continued
(i) Dividends payable to shareholders
Dividends payable to shareholders are recognised in the financial statements when they are paid, or in the case of
final dividends, when they are approved by shareholders. Dividends are dealt with in the Statement of Changes in Equity.
(j) Issue and repurchase of ordinary shares and associated costs
The proceeds from issuing ordinary shares less issue costs are taken to equity and the costs of repurchasing
ordinary shares, including related stamp duty and transaction costs, are taken directly to equity and reported through
the Statement of Changes in Equity, with the cost of repurchase being charged to a capital distributable reserve.
Share issues and repurchase transactions are accounted for on a trade date basis. The nominal value of ordinary
share capital repurchased and cancelled is transferred out of called-up share capital and into the capital redemption
reserve, in accordance with s733 Companies Act 2006. Where shares are repurchased and held in treasury, the transfer
to the capital redemption reserve is made if and when such shares are subsequently cancelled.
(k) Capital and reserves
Called-up share capital represents the nominal value of ordinary shares issued.
The share premium account represents the excess received (subsequent to 11 July 2007) where treasury shares are
sold for more than the Company paid to purchase the shares placed in treasury and the excess over the nominal value
for new ordinary shares issued, less the costs of issue. The amount standing to the value of the share premium account
as at 13 March 2024, being £41,995,000, was cancelled and transferred to ‘Other reserves’.
The capital reserves are split into two components: the capital reserve arising on investments sold and the capital
reserve arising on investments held. The following analyses what is accounted for in each of these components.
Capital reserve arising on investments sold
The following are accounted for in this reserve:
• gains and losses on the disposals of investments;
• other capital charges and credits charged to this account in accordance with the above policies on Income
and expenditure;
• realised foreign exchange differences of a capital nature; and
• cost of repurchasing ordinary share capital.
Capital reserve arising on investments held
The following are accounted for in this reserve:
• increases and decreases in the valuation of investments held at the year end; and
• unrealised foreign exchange differences of a capital nature.
The revenue reserve represents accumulated revenue profits retained by the Company that have not been distributed
to shareholders as a dividend.
Other reserves comprise the following reserves:
• The special distributable reserve was created on 11 July 2007 following the cancellation of the share premium
account and the capital redemption reserve and is available to fund market purchases and the subsequent
cancellation of own shares.
• The merger reserve represents the premium over the nominal value of ordinary shares issued in March 1997
in connection with the acquisitions of The German Investment Trust plc and Aberdeen European Investment Trust plc.
• The capital redemption reserve represents the nominal value of ordinary shares that have been repurchased
and cancelled. This was reclassified to the additional special distributable reserve on 12 March 2024.
• The additional special distributable reserve was created on 12 March 2024 following the cancellation of the share
premium account and the capital redemption reserve and is available to fund market purchases and the
subsequent cancellation of own shares.
(l) Distributable reserves
The Company’s special distributable reserve, capital reserve arising on investments sold and revenue reserve may
be distributed by way of dividends or used for share buybacks.
Notes to the financial statements continued
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Henderson European Trust plc Annual Report
1 Accounting policies continued
(m) Judgements, assumptions and estimates
The preparation of the Company’s financial statements requires the directors to make judgements, estimates and
assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures.
These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount
of assets or liabilities affected in the current and future periods depending on circumstances.
The directors do not believe that any accounting judgements or estimates have been applied to this set of financial
statements that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.
Nor do they believe that there are any estimates that have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities within the next financial year. In line with FRS 102, the fair values of investments
are used, whereby quoted prices are used to value the investments in active markets and thereby reflect participants’
views of climate change risk.
2 Gains on investments held at fair value through profit or loss
2024
£’000
2023
£’000
Gains on the sale of investments based on historical cost 49,984 22,854
Revaluation (losses)/gains recognised in previous years (5,592) 16,663
Gains on investments sold in the year based on carrying value at previous Statement
of Financial Position date 44,392 39,517
Revaluation gains on investments held at 30 September 1,686 28,776
Gains on investments held at fair value through profit or loss 46,078 68,293
3 Income from investment
2024
£’000
2023
£’000
Listed investments:
Overseas dividends 10,746 10,143
UK dividends 481 969
UK fixed-interest income 331 94
11,558 11,206
Special dividends received in the year amounted to £104,000 (2023: £358,000), of which £104,000 is classified as revenue
(2023: £358,000) and nil (2023: nil) classified as capital.
4 Other income
2024
£’000
2023
£’000
Deposit interest 512 224
Interest received on withholding tax refunds 3 –
515 224
5 Management fee
2024 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Management fee 735 2,204 2,939 587 1,762 2,349
A description of the basis for calculating the management fee is given in the Business Model on page 18.
Management fees are allocated 25% to revenue and 75% to capital in the Income Statement.
Notes to the financial statements continued
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Henderson European Trust plc Annual Report 2024
Financial
statements
6 Other administration expenses
2024
£’000
2023
£’000
Revenue:
Directors’ fees and taxable benefits (see Directors’ Remuneration Report on page 55) 196 166
Directors’ and officers’ liability insurance 13 14
Marketing expenses recharged by Janus Henderson 72 84
Custody charges 63 67
Legal and professional fees 67 67
Fees payable to the Company’s auditors – for audit services (excluding VAT) 59 52
Depositary charges 42 40
Registrar’s fees 45 38
Printing and postage 19 30
Listing fees 39 29
AIC subscriptions 21 21
Other expenses 20 31
656 639
Capital:
Legal and professional fees in connection with reclassification of the share premium account
and capital redemption reserve 22 –
22 –
7 Finance costs
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
On bank overdrafts payable within one year 2 5 7 8 24 32
On unsecured loan notes – after 5 years
1
116 350 466 121 361 482
118 355 473 129 385 514
1 Includes amortisation of issue costs and may therefore vary from year to year
Interest payable is allocated 25% to revenue and 75% to capital in the Income Statement. Interest rates are set at
the time drawings are made based on the bank’s base rate, plus a margin of 1.25% per annum.
In January 2022, the Company issued EUR 35,000,000 of unsecured loan notes, with interest payable on EUR 25,000,000
at 1.53% and interest payable on EUR10,000,000 at 1.66%. Please see note 14 for further details.
Notes to the financial statements continued
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Henderson European Trust plc Annual Report
8 Taxation
(a) Analysis of charge for the year
Year ended 30 September 2024 Year ended 30 September 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Overseas tax (received)/suffered (147) – (147) 887 36 923
Total taxation for the year (147) – (147) 887 36 923
(b) Factors affecting the tax charge for the year
Year ended 30 September 2024 Year ended 30 September 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Return before taxation 10,564 44,590 55,154 10,075 66,141 76,216
Corporation tax at an effective rate of 25.0%
(2023: 22.0%) 2,641 11,148 13,789 2,217 14,551 16,768
Effects of:
Non-taxable capital profits – (11,793) (11,793) – (15,023) (15,023)
Non-taxable overseas income (2,807) – (2,807) (2,445) – (2,445)
Expenses not deductible for tax purposes 1 5 6 – – –
Current-year expenses not utilised 165 640 805 228 472 700
Overseas tax (147) – (147) 887 36 923
(147) – (147) 887 36 923
The UK corporation tax rate is an effective rate of 25.00% (2023: 22.00%). The tax charge for the year is lower than the
corporation tax rate.
No provision for deferred tax has been made in the current or prior accounting year. At the period end, after offset
against income taxable on receipt, there is a potential deferred tax asset of £9,199,000 (2023: £8,389,000) in relation
to surplus management expenses. It is unlikely that the Company will generate sufficient taxable profits in the future
to utilise these amounts and therefore no deferred tax asset has been recognised.
9 Return per ordinary share
The return per ordinary share is based on the net return attributable to the ordinary shares of £55,301,000
(2023: £75,293,000) and on 241,688,916 ordinary shares (2023: 212,776,067) being the weighted average number
of ordinary shares in issue during the year excluding shares held in treasury.
The return per ordinary share can be further analysed between revenue and capital as below.
2024
£’000
2023
£’000
Net revenue return 10,711 9,188
Net capital return 44,590 66,105
Net total return 55,301 75,293
Weighted average number of ordinary shares in issue during the year 241,688,916 212,776,067
Revenue return per ordinary share 4.43p 4.32p
Capital return per ordinary share 18.45p 31.07p
Total return per ordinary share 22.88p 35.39p
The Company does not have any dilutive securities and therefore the basic and diluted returns per share are the same.
Notes to the financial statements continued
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statements
Additional
information
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Financial
statements
10 Dividends paid and payable on the ordinary shares
Dividends on ordinary shares Record date Payment date
2024
£’000
2023
£’000
Final dividend (3.15p) for the year ended 30 September 2022 6 January 2023 6 February 2023 – 6,702
Special dividend (0.50p) for the year ended 30 September 2022 6 January 2023 6 February 2023 – 1,064
Interim dividend (1.30p) for the year ended 30 September 2023 2 June 2023 27 June 2023 – 2,766
Final dividend (3.05p) for the year ended 30 September 2023 5 January 2024 5 February 2024 6,489 –
Interim dividend (3.05p) for the year ended 30 September 2024 7 June 2024 28 June 2024 6,489 –
12,978 10,532
The final dividend for the year ended 30 September 2024 has not been included as a liability in these financial
statements. The total dividend payable in respect of the financial year, which forms the basis of the retention test
under s1158 Corporation Tax Act, is set out below.
2024
£’000
2023
£’000
Revenue available for distribution by way of dividend for the year 10,711 9,188
Interim dividend (3.05p) for the year ended 30 September 2024
(based on 212,768,122 ordinary shares in issue at 7 June 2024) (6,489) –
Final dividend (1.30p) for the year ended 30 September 2024
(based on 323,697,014 ordinary shares in issue at 9 December 2024) (4,208) –
Interim dividend (1.30p) for the year ended 30 September 2023
(based on 212,768,122 ordinary shares in issue at 2 June 2023) – (2,766)
Final dividend (3.05p) for the year ended 30 September 2023
(based on 212,768,122 ordinary shares in issue at 5 January 2024) – (6,489)
Undistributed revenue for s1158 purposes/(transfer from revenue reserves) 14 (67)
All dividends have been paid or will be paid out of revenue profits or revenue reserves.
11 Investments held at fair value through profit or loss
2024
£’000
2023
£’000
Valuation at 1 October 384,249 320,289
Investment holding gains at 30 September (49,225) (3,786)
Cost at 1 October 335,024 316,503
Assets acquired in respect of the HEFT/HNE combination 305,791 –
Additions at cost 418,707 287,856
Disposals at cost (413,344) (269,335)
Cost at 30 September 646,178 335,024
Investment holding gains at 30 September 45,319 49,225
Valuation at 30 September 691,497 384,249
The Company received £463,250,000 (2023: £292,189,000) from investments sold in the year. The book cost of these
investments when they were purchased was £413,344,000 (2023: £269,335,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included in the fair value of investments.
The Company’s investments are registered in the name of nominees of, and held to the order of, HSBC Bank plc,
as custodian to the Company. There were no contingent liabilities in respect of the investments held at the year end.
Purchase transaction costs for the year ended 30 September 2024 were £925,000 (2023: £325,000). These comprise
mainly stamp duty and commission. Sale transaction costs for the year ended 30 September 2024 were £144,000
(2023: £114,000).
Notes to the financial statements continued
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Henderson European Trust plc Annual Report
12 Debtors
2024
£’000
2023
£’000
Amounts receivable within one year:
Investments sold awaiting settlement 9,159 7,587
Accrued income 333 175
Prepaid expenses 33 51
Overseas withholding tax recoverable 3,908 3,534
Other receivables 599 398
14,032 11,745
Overseas withholding tax recoverable, may be recovered in more than one year due to the claim and recovery process
in place with overseas tax authorities. As this recovery is expected within the normal course of repayment for those
jurisdictions, these balances are classified as current assets.
13 Creditors: amounts falling due within one year
2024
£’000
2023
£’000
Amounts payable within one year:
Investments purchased awaiting settlement 13,410 269
Amounts due to brokers for buy back of ordinary shares for treasury 1,217 –
Accrued expenses 1,439 2,305
Interest on loan notes 77 81
16,143 2,655
The Company has an uncommitted, secured multi-currency overdraft facility equal to the lesser of £30,000,000
and 10% of custody assets with HSBC Bank plc. Interest is charged at the bank’s fluctuating base rate, plus a margin
of 1.25% per annum. Borrowings are repayable on demand. There are no amounts drawn down under this facility as
at 30 September 2024 (2023: £nil).
14 Creditors: amounts falling due after more than one year
2024
£’000
2023
£’000
Borrowings: Loan notes (unsecured)
1.53% unsecured loan notes 2047 (EUR) 20,689 21,572
1.66% unsecured loan notes 2052 (EUR) 8,276 8,627
28,965 30,199
The EUR 25,000,000 1.53% unsecured loan notes 2047 were issued on 31 January 2022 and are redeemable at par on
31 January 2047. They are shown on the balance sheet on the effective interest basis. The unsecured loan notes were
issued net of costs totalling £124,000.
The EUR 10,000,000 1.66% unsecured loan notes 2052 were issued on 31 January 2022 and are redeemable at par on
31 January 2052. They are shown on the balance sheet on the effective interest basis. The unsecured loan notes were
issued net of costs totalling £50,000.
The issue costs on both series of loan notes will be amortised over the life of the notes. Please see note 15.4 for more
details on the estimate of the fair value of the unsecured loan notes.
Notes to the financial statements continued
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Financial
statements
Additional
information
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Financial
statements
15 Financial risk management policies and procedures
As an investment trust, the Company invests in equities and other investments for the long term so as to secure its
investment objective and policy as stated on page 17. In pursuing its investment objective and policy, the Company
is exposed to a variety of financial risks that could result in either a reduction in the Company’s net assets or a reduction
in the profits available for distribution by way of dividends.
These financial risks, being market risk (comprising market price risk, currency risk and interest rate risk), credit risk,
liquidity risk and gearing, and the directors’ approach to the management of these risks, are set out below and have
not changed from the previous accounting period. The Board and Janus Henderson coordinate the Company’s risk
management and there are various risk management systems in place.
The Board determines the objectives, policies and processes for managing risks, and these are set out below under the
relevant risk category. The policies for the management of risk have not changed from the previous accounting period.
15.1 Market risk
The fair value of a financial instrument held by the Company may fluctuate due to changes in market prices.
This market risk comprises market price risk (see note 15.1.1), currency risk (see note 15.1.2) and interest rate risk
(see note 15.1.3). The Board reviews and agrees policies for managing these risks. The Manager assesses the exposure
to market risk when making each investment decision and monitors the overall level of market risk on the whole of
the investment portfolio on an ongoing basis.
15.1.1 Market price risk
The Company is an investment company and as such its performance is dependant on the valuation of its investments.
Consequently, market price risk is the most significant risk to which the Company is exposed. The Company’s investment
objective and policy require it to invest predominantly in stocks listed in Europe (excluding the UK).
At 30 September 2024 the fair value of the Company’s assets exposed to market price risk was £691,497,000
(2023: £384,249,000). The fair value of the investments in the portfolio is normally their quoted bid price. The market
price of investee companies’ shares is subject to their performance, supply and demand for the shares and investor
sentiment regarding the companies, their industry sectors and the countries in which they operate.
The Company invests in a diversified portfolio of investments. In accordance with the Company’s investment objective
and policy the portfolio contains between 35 and 45 stocks, with a maximum single stock weighting of 10% of the net
asset value (“NAV”) of the portfolio at the time of investment. The Company may use derivative instruments (such as
futures and options) for the purpose of efficient portfolio management up to 10% of net assets. As at 30 September 2024
the Company had no exposure to such instruments (2023: same).
The level of risk relative to the benchmark is increased by over or underweighting industry sectors and, to a lesser
extent, country exposures and stock exposures relative to the benchmark, which tends to concentrate risk in those over
and underweighted areas. Likewise, adding structural debt adds market price risk to the extent that the Fund Managers
take full advantage of that debt to have a net geared portfolio.
To illustrate the Company’s sensitivity to market prices, a 10% change to the market value (in Sterling terms) of the
equity portfolio at 30 September 2024 would generate a corresponding increase or decrease in the NAV per ordinary
share of 10.4% or £69.1 million (2023: 10.1% or £38.4 million).
Notes to the financial statements continued
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15 Financial risk management policies and procedures continued
15.1.2 Currency risk
The majority of the Company’s assets are denominated in currencies other than Sterling so the Company’s total return
and Statement of Financial Position can be significantly affected by currency fluctuations. No hedging of the currency
exposure is currently undertaken. Revenue received in currencies other than Sterling is converted into Sterling on, or
shortly after, the date of receipt. Whilst the Board and the Fund Managers monitor geographical and currency exposures,
it is not a key determinant of investment decisions. At the year end 87.7% (2023: 89.4%) of the Company’s net assets were
denominated in currencies other than Sterling, the largest proportion being Euro, at 63.6% (2023: 70.4%) of net assets.
The table below shows, by currency, the split of the Company’s non-Sterling monetary assets and investments at the
year end:
2024
£’000
2023
£’000
Monetary assets
Cash and short-term receivables:
Norwegian Krone 12 81
Euro 12,287 10,254
Swiss Franc 829 822
Danish Krone 246 280
US Dollar 104 9
Monetary liabilities
Short-term payables:
Euro (12,850) (350)
Long-term payables:
Euro (28,965) (30,199)
Non-monetary assets
Non-current asset investments held at fair value:
Euro 451,768 286,994
Swiss Franc 95,568 12,684
Danish Krone 51,197 23,175
Swedish Krona – 13,202
Norwegian Krone – 11,087
US Dollar 11,974 10,860
Total 582,170 338,899
The level of assets exposed to currency risk increased by 71.78% during the year, primarily as a result of the Company’s
increase in assets following the HEFT/HNE combination. The relative levels of exposure to currencies at the beginning
and end of the year were broadly representative of levels through the period.
As can be seen from the table above, the most significant currency exposures are to the Euro and Swiss Franc.
Overall currency exposure at 30 September was as follows:
2024
%
2023
%
Euro 63.6 70.4
Swiss Franc 14.5 3.5
Sterling 12.3 10.6
Danish Krone 7.8 6.2
US Dollar 1.8 2.9
Swedish Krona – 3.5
Norwegian Krone – 2.9
Notes to the financial statements continued
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Additional
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Financial
statements
15 Financial risk management policies and procedures continued
The following table illustrates the Company’s sensitivity to movements in exchange rates relative to Sterling.
The sensitivity analysis is based on the Company’s non-Sterling monetary assets and investments held at the
Statement of Financial Position date and assumes a 10% appreciation or depreciation of Sterling against each
of the currencies to which the Company is exposed, with all other variables held constant. If Sterling depreciated
against the currencies shown, the net assets and revenue would have increased by these amounts. If Sterling
appreciated against the currencies shown, the net assets and revenue would have decreased by these amounts.
2024
Net assets
£’000
2024
Revenue
£’000
2023
Net assets
£’000
2023
Revenue
£’000
Euro 38,385 869 24,245 860
Danish Krona 4,677 44 2,132 25
Swiss Francs – – 1,228 45
Other currencies 9,863 96 2,217 88
52,925 1,009 29,822 1,018
The effect on capital return would be materially the same as the effect on net assets.
It should be noted that a number of investee companies derive a proportion of their profits from markets subject to
currencies other than that in which their shares are denominated, so changes in the relevant currency exchange rates
relative to each other are also likely to have an indirect impact. The above illustration is based on exposures at the year
end. Exposures may be subject to change during the year as a result of investment decisions.
15.1.3 Interest rate risk
The Company finances part of its activities through the use of a secured uncommitted multi-currency overdraft facility
provided by HSBC Bank plc equal to the lesser of £30,000,000 and 10% of net assets. Interest rates are set at the time
drawings are made based on the bank’s base rate, plus a margin of 1.25% per annum. During the year, there was nothing
drawn under the facility (2023: nothing was drawn) and the weighted average interest rate for the period was nil
(2023: nil). Interest is received on the cash and short-term deposits. Overdraft drawings and deposits are rarely fixed for
periods of more than one week.
To illustrate the potential sensitivity to changes in interest rates, if £30 million was drawn from the uncommitted multi-
currency overdraft facility (based on the maximum overdraft limit set by the Board), a change of 1.0% in the rate of
interest charged would, over the course of a year, amount to £300,000 (ignoring any exchange rate movements),
less than 0.1% of year end net assets.
In January 2022, the Company issued EUR 35,000,000 of unsecured loan notes, with interest payable on EUR 25,000,000
at 1.53% and interest payable on EUR 10,000,000 at 1.66%. As the interest rates are fixed, there is no sensitivity to changes
in rates.
15.2 Credit risk
Credit risk is the Company’s exposure to financial loss from failure of a counterparty to deliver securities or cash for
acquisitions or disposals of investments or to repay deposits, or the failure of the Company’s custodian. The Company
manages credit risk by using brokers from a database of approved financial institutions who have undergone rigorous
due diligence tests by the Manager’s risk management team and by dealing through Janus Henderson with banks
authorised by the Financial Conduct Authority.
At 30 September 2024, the maximum exposure to credit risk was as follows:
2024
£’000
2023
£’000
Cash at bank 3,113 15,857
Debtors (see note 12) 14,032 11,745
The Company is exposed to credit risk through its cash position. Bankruptcy or insolvency of banks may cause the
Company’s rights with respect to cash held by banks to be delayed or limited. The Company’s cash balances are
held by its custodian, HSBC Bank Plc. The directors believe the counterparty is of high credit quality and, therefore,
the Company has minimal exposure to credit risk. Exposure to debtors is primarily exposure to outstanding trades
and overseas withholding tax recoverable.
All of the above financial assets are current, their fair values are considered to be the same as the values shown
and the likelihood of default is considered to be low.
Notes to the financial statements continued
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Henderson European Trust plc Annual Report
15 Financial risk management policies and procedures continued
15.3 Liquidity risk
Liquidity risk is the possibility of the Company failing to realise sufficient assets to meet its financial obligations. The
Company minimises this risk by having a bias to larger capitalised companies, by investing in listed companies and by
ensuring that it has adequate cash and credit facilities in place to meet its obligations. Exposure to debtors is primarily
exposure to outstanding trades and overseas withholding tax recoverable. Deposits are rarely fixed for terms in excess
of one week and are limited to 10% of net assets with any one bank or institution. Cash requirements are monitored on a
regular basis by the Manager.
At 30 September 2024, the fair value of short-term liabilities was £16,143,000 and long-term liabilities of £28,965,000
(2023: £2,655,000 and £30,199,000).
The table below analyses the Company’s contractual liabilities.
2024 2023
Within
one year
Between
one and
five years
More than
five years
Within
one year
Between
one and
five years
More than
five years
£’000 £’000 £’000 £’000 £’000 £’000
Unsecured loan notes
1
456 1,824 37,571 476 1,904 39,644
Other creditors and accruals 16,143 – – 2,655 – –
16,599 1,824 37,571 3,131 1,904 39,644
1 The above figures show interest payable over the remaining term of the secured notes. The figures in the “more than 5 years” column also include the
capital to be repaid. Details of repayment are set out in note 14.
15.4 Fair value hierarchy
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 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access
at the measurement date.
• Level 2 – inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market
data) for the asset or liability, either directly or indirectly.
• Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Financial assets at fair value through profit or loss:
Quoted equities 691,497 – – 691,497
Total 691,497 – – 691,497
2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Financial assets at fair value through profit or loss:
Quoted equities 364,567 – – 364,567
Short-dated government bonds 19,682 – – 19,682
Total 384,249 – – 384,249
The fair value of the Company’s investments in quoted equities has been determined by reference to their quoted bid
prices at the reporting date. Quoted equities and short-dated government bonds included in Level 1 are actively traded
on recognised stock exchanges. Short-term balances are excluded as their carrying value at the reporting date
approximates their fair value.
Notes to the financial statements continued
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Financial
statements
15 Financial risk management policies and procedures continued
In order to comply with fair value accounting disclosures only, the fair value of the unsecured loan notes has been
estimated to be £18,863,000 (2023: £17,508,000) and is categorised as Level 3 in the fair value hierarchy as described
below. However, for the purpose of the daily NAV announcements, the unsecured loan notes are valued at par in the
NAV because they are not traded and the directors expect them to be held to maturity and, accordingly, the directors
have assessed that this is the most appropriate value to be applied for this purpose.
The estimate of the fair value of each unsecured loan note is calculated by aggregating the discounted value of future
cash flows, being the contractual interest payments and the repayment of capital at maturity as each note falls due.
The discount rate used for each note is based on the yield of the reference instrument that was used in the pricing of
the loans note plus the same credit spread applied at the issue. The net assets including the loan notes at fair value
would have been £673,636,000 at 30 September 2024 (compared to £663,534,000 with the loan notes at par value),
equivalent to a net asset value per ordinary share of 204.45p (compared to 201.39p with loan notes at par value).
In the event that the Company decided to pay back the loan notes earlier than the maturity date, the loan note
agreements include certain clauses that may require additional payments to be made. These clauses are primarily
to protect the lender from any losses suffered from early repayment. Such ‘make-whole amounts’ are based on any
excess of the discounted value of the remaining scheduled payments over the life of the loan notes above the value
of the principal. The make-whole amount cannot be less than zero. The directors have assessed that the likelihood of
early repayment is considered to be highly unlikely to occur.
15.5 Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern and
to maximise the revenue and capital return to its equity shareholders. This is achieved through an appropriate balance
of equity capital and debt.
The Company’s total capital at 30 September 2024 was of £663,534,000 (2023: £378,997,000) comprising equity share
capital of £18,369,000 (2023: £10,819,000) and reserves of £645,165,000 (2023: £368,178,000).
The Board, with the assistance of Janus Henderson, monitors and reviews the broad structure of the Company’s capital
on an ongoing basis. This review includes:
• the planned level of gearing, which takes into account the Fund Managers’ view on the market;
• review of distributable reserves for purposes of dividend distributions and share buyback, including any tender offers;
• the need to buy back equity shares, either for cancellation or to hold in treasury, which takes account of the
difference between the NAV per share and the share price (i.e. the level of share price discount or premium)
as well as the discount of the peer group and the level of the equity market;
• the need for new issues of equity shares, including sales from treasury; and
• the extent to which revenue in excess of that which is required to be distributed should be retained.
The Company is subject to several externally imposed capital requirements:
• borrowings under the overdraft facility are not to exceed the lesser of £30 million and 10% of custody assets;
• as a public company, the Company has a minimum share capital of £50,000;
• in order to be able to pay dividends out of profits available for distribution by way of dividends, the Company
has to be able to meet the capital restriction tests imposed on investment companies by company law; and
• financial covenants of the secured notes in relation to the level of borrowings.
The Company has complied with these requirements.
The Company’s objectives, policies and procedures for managing capital are unchanged from last year.
16 Called up share capital
Number
of shares
entitled to
dividend
Shares
held in
treasury
Total number
of shares
Nominal
value of
shares
£’000
At 30 September 2023 212,768,122 3,621,788 216,389,910 10,819
Issue of new ordinary shares 151,000,587 – 151,000,587 7,550
Tender offer of ordinary shares for treasury (31,915,217) 31,915,217 – –
Buyback into treasury of 2,376,191 shares (2,376,191) 2,376,191 – –
At 30 September 2024 329,477,301 37,913,196 367,390,497 18,369
Notes to the financial statements continued
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16 Called up share capital continued
Number
of shares
entitled to
dividend
Shares
held in
treasury
Total number
of shares
Nominal
value of
shares
£’000
At 30 September 2022 212,913,122 3,476,788 216,389,910 10,819
Buy back into treasury of 145,000 shares (145,000) 145,000 – –
At 30 September 2023 212,768,122 3,621,788 216,389,910 10,819
On 4 July 2024 the Company issued 151,000,587 new shares to HNE shareholders in consideration of the £310,303,000 of
net assets acquired from HNE in accordance with the HEFT/HNE combination. As announced on 25 June 2024, 31,915,217
shares were bought back pursuant to the tender offer at a total cost of £63,907,000 representing 198.846970p per share
paid to shareholders plus stamp duty and commission. All shares repurchased will be held in treasury.
During the year to 30 September 2024, the Company repurchased 2,376,191 (2023: 145,000) ordinary shares at a cost
of £4,279,000 including expenses (2023: £183,000). Since the year end and as at 9 December 2024, 5,780,287 shares have
been repurchased to be held in treasury. The ordinary shares held in treasury total 43,693,483 as at 9 December 2024
and have no voting rights and are not entitled to dividends.
17 Share premium account
2024
£’000
2023
£’000
Balance brought forward 41,995 41,995
Cancellation of share premium account (41,995) –
Issue of new ordinary shares on HEFT/HNE combination 302,753 –
Costs in respect of the HEFT/HNE combination (1,453) –
Balance at 30 September 301,300 41,995
18 Capital reserves
2024 2023
Capital reserve
arising on
investments
sold
£’000
Capital reserve
arising on
investments
held
£’000
Capital
reserves
total
£’000
Capital reserve
arising on
investments
sold
£’000
Capital reserve
arising on
investments
held
£’000
Capital
reserves
total
£’000
Balance brought forward 167,937 49,139 217,076 147,454 3,700 151,154
Transfer on disposal of investments 5,592 (5,592) – (16,663) 16,663 –
Movement in fair value of investments 44,392 1,686 46,078 39,517 28,776 68,293
Exchange gains/(losses) on currency
transactions 1,093 – 1,093 (5) – (5)
Management fee allocated to capital (2,204) – (2,204) (1,762) – (1,762)
Interest payable allocated to capital (355) – (355) (385) – (385)
Contribution from JHI towards the
HEFT/HNE combination 1,550 – 1,550 – – –
Costs associated with the cancellation
of share premium account (22) – (22) – – –
Buyback of ordinary shares for treasury – – – (183) – (183)
Irrecoverable withholding tax deducted
at source – – – (36) – (36)
Balance at 30 September 217,983 45,233 263,216 167,937 49,139 217,076
19 Revenue reserve
2024
£’000
2023
£’000
Balance brought forward 12,496 13,840
Net revenue return for the year after tax 10,711 9,188
Dividends paid (note 10) (12,978) (10,532)
Balance at 30 September 10,229 12,496
Notes to the financial statements continued
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Additional
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Henderson European Trust plc Annual Report 2024
Financial
statements
20 Other reserves
2024 2023
Special
distributable
reserve
£’000
Additional
special
distributable
reserve
£’000
Merger
reserve
£’000
Capital
redemption
reserve
£’000
Total
£’000
Special
distributable
reserve
£’000
Additional
special
distributable
reserve
£’000
Merger
reserve
£’000
Capital
redemption
reserve
£’000
Total
£’000
Balance
brought
forward 25,846 – 61,344 9,421 96,611 25,846 – 61,344 9,421 96,611
Cancellation of
share premium
account
and capital
redemption
reserve – 51,416 – (9,421) 41,995 – – – – –
Tender offer of
ordinary shares
for treasury (25,846) (38,061) – – (63,907) – – – – –
Buyback of
ordinary shares
for treasury – (4,279) – – (4,279) – – – – –
Balance at
30 September – 9,076 61,344 – 70,420 25,846 – 61,344 9,421 96,611
21 Net asset value per ordinary share
The NAV per ordinary share is based on the net assets attributable to the ordinary shares of £663,534,000
(2023: £378,997,000) and on 329,477,301 (2023: 212,768,122) shares in issue on 30 September 2024, excluding treasury shares.
The movements during the year of the assets attributable to the ordinary shares were as follows:
2024
£’000
2023
£’000
Total net assets at start of year 378,997 314,419
Net return for the year after tax 55,301 75,293
Buyback of ordinary shares for treasury (4,279) (183)
Dividends paid on ordinary shares (12,978) (10,532)
Issues of ordinary shares on HEFT/HNE combination 310,303 –
Issue costs in respect of the HEFT/HNE combination (1,453) –
Contribution from JHI towards the HEFT/HNE combination 1,550 –
Tender offer of ordinary shares for treasury (63,907) –
Net assets attributable to the ordinary shares at 30 September 663,534 378,997
22 Capital commitments and contingent liabilities
There were no capital commitments or contingent liabilities as at 30 September 2024 (2023: nil).
23 Transactions with the Manager and related parties
Under the terms of an agreement effective from 22 July 2014 the Company has appointed a wholly owned subsidiary
of Janus Henderson Group plc to provide investment management, accounting, secretarial and administrative services.
Janus Henderson has contracted with BNP Paribas to provide accounting and administration services.
For the prior year and for the period to 3 July 2024, the management fee was charged at 0.65% per annum of net assets
up to £300 million, and 0.55% of net assets above £300 million. From 4 July 2024, following the HEFT/HNE combination, the
management fee will be charged at 0.60% on net assets up to £500 million, 0.475% on net assets from £500 million and
up to £1 billion and 0.45% on net assets equal to above £1 billion. Any holdings in funds managed by Janus Henderson, of
which there were none in the year, would be excluded from the calculation of the management fees. The management
fees payable to Janus Henderson under the agreement in respect of the year ended 30 September 2024 were
£2,939,000 (2023: £2,349,000). The amount outstanding at 30 September 2024 was £60,000 payable to Janus Henderson
(2023: £1,189,000). As part of the HEFT/HNE combination, the Manager made a contribution of £1,550,000 to the costs.
See note 18 on page 85.
Notes to the financial statements continued
86
Henderson European Trust plc Annual Report
23 Transactions with the Manager and related parties continued
In addition to the above services, Janus Henderson facilitates marketing activities with third parties which are recharged
to the Company. Total amounts paid to Janus Henderson in respect of sales and marketing, including VAT, for the period
ended 30 September 2024 amounted to £48,000 (2023: £84,000). As part of the HEFT/HNE combination, the Manager has
committed to additional spend on marketing activities in the year following the closure of the transaction.
Details of fees paid to directors are included in the Directors’ Remuneration Report on page 55 and in note 6 on page 76.
The Company and HNE both bore their own costs in relation to the combination. These were reflected in the formula
applied to the respective net asset values of the two companies when they were compared to calculate the number
of shares in HET to be issued to HNE shareholders.
Janus Henderson contributed £1.55m to the costs of the proposals to make sure that they were cost neutral for
shareholders continuing, irrespective of the results of the combination. Direct costs borne by both HNE and HET were fully
covered by both the contribution by Janus Henderson, and the financial impact of the tender offer in the Company and
the cash exit in HNE, both being at a small discount to the prevailing net asset values when the HEFT/HNE combination
completed. Those discounts resulted in a modest asset uplift for ongoing shareholders. The adjustment to the dividend
payment profile for the Company during the year protected the Company’s existing shareholders from the impact of the
issuance of shares and the relatively short period to earn income on the enlarged share capital. As a result, shareholders
were protected from any adverse capital or income impact arising from the combination. Janus Henderson had also
agreed to protect the Company from any costs, had the transaction not proceeded to completion.
24 Changes in cash and financial liabilities
The following table shows the movements during the period of net debt in the statement of financial position:
At
1 October
2023
£’000
Cash
flows
£’000
Non-cash changes
At
30 September
2024
£’000
Amortisation
of issue costs
£’000
Foreign
exchange
movement
£’000
Cash at bank 15,857 (12,596) – (148) 3,113
Unsecured loan notes (30,199) – (5) 1,239 (28,965)
Total (14,342) (12,596) (5) 1,091 (25,852)
At
1 October
2022
£’000
Cash
flows
£’000
Non-cash changes
At
30 September
2023
£’000
Amortisation
of issue costs
£’000
Foreign
exchange
movement
£’000
Cash at bank 21,272 (5,410) – (5) 15,857
Unsecured loan notes (30,548) – (5) 354 (30,199)
Total (9,276) (5,410) (5) 349 (14,342)
25 Transaction with Henderson EuroTrust plc (“HNE”)
On 4 July 2024, the Company announced that it had acquired £310,303,000 of net assets from HNE in consideration for
the issue of 151,000,587 new ordinary shares calculated in accordance with the terms of the HEFT/HNE combination.
Net assets acquired £’000
Investments 305,791
Cash 4,512
Net assets 310,303
Satisfied by the value of new ordinary shares issued 310,303
There were no fair value adjustments required or made on completion of the HEFT/HNE combination to the above figures.
Notes to the financial statements continued
Strategic report Governance
Financial
statements
Additional
information
87
Henderson European Trust plc Annual Report 2024
Financial
statements
Additional information
In this section
89 Notice of Annual General Meeting
94 Glossary
96 Alternative performance measures
98 General shareholder information
100 Corporate Information
Image: Canary Wharf, London United Kingdom
Henderson European Trust plc Annual Report88
Notice is hereby given that the Annual General Meeting
(“AGM”) of Henderson European Trust plc will be held
at 11.30 am on Wednesday, 29 January 2025 at 201
Bishopsgate, London EC2M 3AE for the purpose of
considering and, if thought fit, passing the following
resolutions, which will be proposed, in the case of
resolutions 1 to 11, as ordinary resolutions, and in the
case of resolutions 12 to 15, as special resolutions.
Ordinary resolutions
1. To receive the Annual Report and the audited financial
statements for the year ended 30 September 2024.
2. To approve the Directors’ Remuneration Report for the
year ended 30 September 2024.
3. To approve a final dividend of 1.30p per ordinary share.
4. To elect Stephen King as a director of the Company.
5. To elect Rutger Koopmans as a director of
the Company.
6. To re-elect Victoria (Vicky) Hastings as a director of
the Company.
7. To re-elect Marco Maria Bianconi as a director of
the Company.
8. To re-elect Melanie Blake as a director of the Company.
9. To re-appoint Ernst & Young LLP as the statutory auditor
of the Company.
10. To authorise the Audit and Risk Committee to
determine the statutory auditor’s remuneration.
11. THAT in substitution for all existing authorities, the
directors be generally and unconditionally authorised
pursuant to s551 Companies Act 2006 to exercise all the
powers of the Company to allot ordinary shares of 5p
each in the capital of the Company (“ordinary shares”)
and to grant rights to subscribe for, or to convert any
security into, ordinary shares up to an aggregate
nominal amount of £1,618,485 (or such other amount
representing 10% of the issued share capital (excluding
treasury shares) as at the date of the passing of this
resolution) for a period expiring (unless previously
renewed, varied or revoked by the Company in general
meeting) on the earlier of the date falling 15 months
after the passing of this resolution and the conclusion
of the AGM of the Company in 2026, save that the
directors may make an offer or agreement which
would or might require ordinary shares to be allotted or
rights to be granted after expiry of this authority and
the directors may allot ordinary shares and grant rights
in pursuance of that offer or agreement as if the
authority conferred hereby had not expired.
Special resolutions
12. THAT in substitution for all existing authorities and,
subject to the passing of resolution 11, the directors
be empowered pursuant to s570 and s573 Companies
Act 2006 to allot ordinary shares or make offers or
agreements to allot ordinary shares (within the
meaning of s560 of that Act) for cash, and to sell
ordinary shares which are held by the Company in
treasury, as if s561(1) Companies Act 2006 did not apply
to any such allotments or sale. This power shall be
limited to the allotment or sale of ordinary shares:
a) whether by way of a rights issue, open offer or
otherwise to ordinary shareholders on the Register
of Members at such record date(s) as the directors
may determine where the ordinary shares
respectively attributable to the interests of all
ordinary shareholders are proportionate (or as
nearly as may be) to the respective numbers of
ordinary shares held by them (or are otherwise
allotted in accordance with the rights attaching to
such ordinary shares) subject in either case to such
exclusions or other arrangements as the directors
may deem necessary or expedient in relation to
treasury shares, fractional entitlements or local or
practical problems under the laws of, or the
requirements of, any regulatory body or any stock
exchange in any territory or otherwise howsoever;
b) up to a maximum aggregate nominal value of
£1,618,485 (or such other amount representing 10%
of the Company’s issued ordinary share capital
(excluding treasury shares) as at the date of
the passing of this resolution);
c) at a price not less than the net asset value per
ordinary share as at the latest practicable date
before such allotment of ordinary shares as
determined by the directors in their reasonable
discretion; and
d) shall expire at the earlier of the date falling 15
months after the passing of this resolution and the
conclusion of the AGM of the Company in 2026
unless previously renewed, varied or revoked by the
Company in general meeting, save that the directors
may before such expiry make an offer or agreement
which would or might require ordinary shares to be
allotted or sold after such expiry and the directors
may allot or sell ordinary shares in pursuance of
such an offer or agreement as if the power
conferred hereby had not expired.
13. THAT in substitution for all existing authorities, the
Company be generally and unconditionally authorised
in accordance with s701 Companies Act 2006 to make
market purchases (within the meaning of s693(4) of
that Act) of ordinary shares on such terms and in such
manner as the directors may from time to time
determine, provided that:
a) the maximum aggregate number of ordinary shares
authorised to be purchased is 14.99% of the
Company’s issued ordinary share capital at the date
of the resolution (equivalent to 48,522,182 ordinary
shares (excluding treasury shares) as at 9 December
2024 being the latest practicable date prior to
publication of this Notice);
Notice of Annual General Meeting
Strategic report Governance
Financial
statements
Additional
information
89
Henderson European Trust plc Annual Report 2024
Additional
information
Notice of Annual General Meeting continued
b) the maximum price (exclusive of expenses) which
may be paid for an ordinary share shall not exceed
the higher of:
i. 105% of the average of the middle market
quotations for an ordinary share as taken from
the London Stock Exchange Daily Official List for
the five business days immediately preceding
the date of purchase; and
ii. the higher of the price of the last independent
trade and the highest current independent bid
on the London Stock Exchange when the
purchase is carried out;
c) the minimum price (exclusive of expenses) which
may be paid for an ordinary share shall be 5 pence,
being the nominal value per share;
d) the authority hereby conferred shall expire at the
earlier of the date falling 15 months after the date
of the passing of this resolution and the conclusion
of the AGM of the Company in 2026, unless such
authority is renewed before that expiry;
e) the Company may make a contract to purchase
ordinary shares under the authority hereby conferred
which will or may be executed wholly or partly after
the expiration of such authority, and may make a
purchase of ordinary shares pursuant to any such
contract; and
f) any ordinary shares so purchased shall be cancelled,
or in accordance with the provisions of the Act, if the
directors so determine, be held, sold, transferred or
otherwise dealt with as treasury shares.
14. THAT a general meeting other than an AGM may be
called on not less than 14 clear days’ notice, such
authority to expire on conclusion of the AGM of the
Company in 2026.
15. THAT, subject to the sanction of the High Court, the
amount standing to the credit of the share premium
account of the Company, at the date an order is made
confirming such cancellation by the Court, be and
hereby is cancelled, and the amount by which the
share capital is so reduced be credited to a reserve
of the Company.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
11 December 2024
Registered office:
201 Bishopsgate, London EC2M 3AE
MOORGATE
BISHOPSGATE
PRIMROSE ST.
WORSHIP STREET
201 Bishopsgate
London EC2M 3AE
LIVERPOOL
STREET
STATION
APPOLD ST.
SUN STREET
BROADGATE
CIRCLE
FINSBURY PAVE.
EARL ST.
WORSHIP STREET
ROPEMAKER STREET
LIVERPOOL ST
LONDON WALL
WILSON ST.
BISHOPSGATE
GREAT EASTERN ST.
COMMERCIAL ST.
SHOREDITCH
HOUNDSDITCH
ALDGATE
MIDDLESEX
STREET
CHISWELL STREET
SOUTH PLACE
ELDON ST.
FINSBURY
CIRCUS
CITY ROAD
FINSBURY SQ.
FINSBURY SQ.
CLIFTON ST.
SPITALFIELDS
MARKET
FOLGATE ST.
NORTON
MIDDLESEX ST.
BRUSHFIELD STREET
APPOLD ST.
The AGM will be held at 201 Bishopsgate, London EC2M 3AE.
It is a few minutes’ walk from Liverpool Street Station and
from Moorgate Station.
Explanation of resolutions
The information set out below is an explanation of the
business to be considered at the 2025 Annual General
Meeting (“AGM”). You are welcome to join the AGM in person
or by conferencing software Zoom. If you wish to join by
Zoom, please visit www.janushenderson.com/het-agm
to register.
Resolutions 1 to 11 are proposed as ordinary resolutions.
This means that for each of those resolutions to be passed,
more than half of the votes cast must be in favour of the
resolution. Resolutions 12 to 15 are proposed as special
resolutions. This means that for each of those resolutions
to be passed, at least three quarters of the votes cast
must be in favour of the resolution.
Resolution 1: Annual Report and
audited financial statements
The directors must present the audited financial
statements, Strategic Report, Directors’ Report and the
Independent Auditor’s Report for the previous financial
period to shareholders at the AGM. Shareholders will have
the opportunity to ask questions and at the end of the
discussion, shareholders will be invited to receive the
Annual Report and audited financial statements.
Resolution 2: Approval of the
Directors’ Remuneration Report
Shareholders are asked to approve the Remuneration
Report (see pages 53–56). The vote on the Remuneration
Report is advisory and does not affect the remuneration
payable to any individual director, though the Board
welcomes feedback from shareholders and will
incorporate this into future remuneration discussions.
90
Henderson European Trust plc Annual Report
Notice of Annual General Meeting continued
Resolution 3: Final Dividend
The directors propose a final dividend of 1.30p per ordinary
share. The payment of a final dividend is subject to the
approval of shareholders, although the scope to pay a
lesser amount would be restricted by the Company’s
status as an investment trust. If approved, the dividend will
be paid on 3 February 2025 to shareholders on the register
on 3 January 2025. The shares will be quoted ex-dividend
on 2 January 2025.
Resolutions 4 to 8: Election
and re-election of directors
As is governance best practice, directors are expected
to stand for election by shareholders at the first AGM
following their appointment by the board of directors,
and for re-election by shareholders at subsequent AGMs
annually.. During the year, the Nominations Committee
reviewed the performance, contribution and commitment
of the members of the Board and concluded that each
director standing for election and re-election brought
extensive, current and relevant business experience that
allows them to contribute effectively to the stewardship
of the Company, in terms of both performance
and time commitment.
The biographies of each director, including their skills,
experience and qualifications relevant for the success
of the Company are set out on pages 36–37. All directors
standing for re-election held office throughout the year
under review. Stephen King and Rutger Koopmans, from
the board of Henderson EuroTrust plc, are standing for
election for the first time by shareholders, having
taken office as directors on 4 July 2024 following the
HEFT/HNE combination. As explained in the Nominations
Committee Report on pages 50–52, the Board has
confirmed that all directors have sufficient time available
and have demonstrated clear commitment and expertise
for their role as director of the Company.
Resolutions 9 and 10: Statutory auditor
Shareholders are required to re-appoint an auditor at
each general meeting at which accounts are presented.
Resolution 9 proposes the re-appointment of Ernst & Young
LLP (“EY”) as the Company’s auditor. The Board is pleased to
ask shareholders to re-appoint EY as the Company’s auditor
for what would be their eleventh year in office. Resolution 10
gives the Audit and Risk Committee authority to determine
the remuneration of the auditor. See the Audit and Risk
Committee Report on pages 44–48 for the background
to the decision to recommend EY for re-election.
Resolutions 11 and 12: Authority to issue
new shares and disapply pre-emption rights
If the directors wish to issue new shares or sell shares from
treasury for cash, company law requires these shares be
offered first to existing shareholders in proportion to their
current holdings (known as ‘pre-emptive’ rights). At the
2024 AGM, the directors were granted authority either
to issue from treasury or to allot up to 21,276,812 ordinary
shares with a nominal value of £1,063,840 on a non-pre-
emptive basis. No shares have been issued under these
authorities, which will expire at the forthcoming AGM.
Resolutions 11 and 12 seek to renew the directors’ authority
either to issue from treasury or to allot shares with a
nominal value of up to £1,618,485 (or such other amount
being 10% of the issued share capital (excluding shares
held in treasury) as at the date of the passing of this
resolution) on a non-pre-emptive basis.
The directors intend to use the authority to issue ordinary
shares only if they believe it to be advantageous to the
Company’s existing shareholders to do so. In particular,
shares, whether new shares or shares held in treasury,
will never be allotted or sold other than at a premium to
the net asset value per ordinary share. If renewed, these
authorities will expire at the earlier of the date falling
15 months after the passing of this resolution and the
conclusion of the AGM in 2026.
Resolution 13: Repurchase of
the Company’s ordinary shares
This resolution seeks authority for the Company to
make market purchases of its own ordinary shares for
cancellation or to be held in treasury, and is proposed
as a special resolution. Of the authority to repurchase
up to 31,893,941 shares granted at the 2024 AGM,
8,156,478 shares have been bought back, giving a
remaining authority of 11.17% as at 9 December 2024.
If the resolution is passed, it will allow the Company
to purchase up to 48,522,182 of its ordinary shares,
representing 14.99% of the Company’s issued ordinary
share capital as at 9 December 2024, excluding shares
held in treasury. The directors believe that the ability of
the Company to purchase its own ordinary shares in
the market will potentially benefit all shareholders of the
Company, giving the Company more flexibility to manage
any discount and to help balance supply and demand.
The purchase of shares at a discount to the underlying net
asset value (“NAV”) would enhance the NAV per share of
the remaining shares. The Company will only sell shares
from treasury at prices greater than the prevailing NAV
per share at the date of issue.
The resolution specifies the minimum and maximum
prices which may be paid for any ordinary shares
purchased under this authority. The authority will expire on
the earlier of 15 months after the passing of this resolution
and the Company’s AGM that will be held in 2026. The
directors will only exercise the authority to purchase
ordinary shares where they consider that such purchases
will be in the best interests of shareholders generally and
consider the effect will be to increase NAV per share.
Resolution 14: Notice of general meetings
The Board believes that it is in the best interests of
shareholders of the Company to have the ability to call
meetings on 14 clear days’ notice should a matter require
urgency. Under the Companies (Shareholders’ Rights)
Regulations 2009, companies are only able to opt for a
notice period of 14 days in respect of general meetings
other than AGMs if authorised annually by shareholders,
and if shareholders have the opportunity to vote at such
a meeting by electronic means.
Strategic report Governance
Financial
statements
Additional
information
91
Henderson European Trust plc Annual Report 2024
Additional
information
Notice of Annual General Meeting continued
The Board will therefore, as last year, propose a resolution
at the AGM to approve the reduction in the minimum
notice period from 21 clear days to 14 clear days for all
general meetings other than AGMs. The directors do not
intend to use the authority unless immediate action
is required.
Resolution 15: Cancellation of share
premium account
Resolution 15 is a special resolution to cancel the entire
amount standing to the credit of the Company’s share
premium account (“Share Premium Account”). The
cancellation of the Share Premium Account is proposed
to be completed by means of a Court-approved capital
reduction (the “Capital Reduction”). The share premium
account was created through the issuance of new
ordinary shares in connection with the HNE/HEFT
combination. Creating more distributable reserves
provides more flexibility for the Company in how
it might deploy its capital, particularly in respect
of share buyback or tender offers, both of which
require distributable reserves.
If the special resolution to approve the Capital Reduction
is not passed at the AGM or Court approval is not
obtained, the Capital Reduction will not proceed.
The directors also retain the right not to proceed
with the Capital Reduction, at their sole discretion, in
circumstances where they consider that to do so would
be inappropriate or inadvisable or no longer in the best
interests of shareholders, including where any unforeseen
event arises or in circumstances where the Court imposes
conditions on the confirmation of the Capital Reduction
that are not satisfactory to the Company. In these
circumstance the distributable reserves intended to be
created by the Capital Reduction will not be available for
use by the Company for the purposes described above.
Notes to the Notice of AGM
1. Voting record date
Only shareholders registered in the register of members
of the Company at close of business on Monday,
27 January 2025 (the “voting record date”) shall be
entitled to attend, speak and vote at the AGM in respect
of the number of voting rights registered in their name at
that time. Changes to entries on the register of members
after that time shall be disregarded in determining the
rights of any person to attend, speak and vote at the AGM.
If the AGM is adjourned for no more than 48 hours after
the original time, the same voting record date will also
apply for the purpose of determining the entitlement of
members to attend, speak and vote (and for the purpose
of determining the number of votes they may cast) at
the adjourned meeting. If the AGM is adjourned for more
than 48 hours then the voting record date will be close
of business on the day which is two days (excluding
non-working days) before the day of the adjourned
meeting or, if the Company gives notice of the adjourned
meeting, at any time specified in that notice.
In the case of joint holders of a voting right, the vote
of the senior who tenders a vote shall be accepted to
the exclusion of the votes of the other joint holders and,
for this purpose, seniority shall be determined by the order
in which the names stand in the register of members in
respect of the joint holding.
2. Right to attend and vote
Holders of ordinary shares are entitled to attend, speak
and vote at the AGM or at any adjournment(s) thereof.
On a poll vote, each ordinary shareholder has one vote
for each share held. On a vote on a show of hands, each
ordinary shareholder or proxy has one vote.
If a proxy is appointed by more than one member and
all such members have instructed the proxy to vote in
the same way, the proxy will only be entitled on a show
of hands to vote ‘for’ or ‘against’ as applicable. If a proxy is
appointed by more than one member, but such members
have given different voting instructions, the proxy may on
a show of hands vote both ‘for’ and ‘against’ in order to
reflect the different voting instructions.
On a poll all or any of the voting rights of the members
may be exercised by one or more duly appointed proxies.
However, where a member appoints more than one proxy,
s285(4) of the Companies Act 2006 (the “Act”) does not
authorise the exercise by the proxies taken together of
more extensive voting rights than could be exercised by
the member in person.
3. Voting by corporate representation
Corporate representatives are entitled to attend and vote
on behalf of the corporate member in accordance with
s323 Companies Act 2006. Shareholders are invited to
send their letters of corporate representation in advance
of the AGM to itsecretariat@janushenderson.com.
4. Votes withheld
A vote withheld on any resolution is not a vote in law.
This means that the vote will not be counted in the
votes cast ‘for’ or ‘against’ the respective resolution.
5. Right to appoint proxies
Pursuant to s324 Companies Act 2006, a member entitled
to attend and vote at the AGM may appoint more than
one proxy, provided that each proxy is appointed to
exercise the rights attached to different shares held
by him or her. A proxy need not be a member of the
Company. A form of proxy is enclosed. The completion
of the form of proxy or any CREST proxy instruction
(described below) will not preclude a shareholder
from attending and voting in person at the meeting.
6. Nominated persons
The right to appoint a proxy does not apply to persons
whose ordinary shares are held on their behalf by
another person and who have been nominated to
receive communications from the Company in accordance
with s146 Companies Act 2006 (“Nominated Persons”).
Nominated Persons may have a right under an agreement
with the member who holds the ordinary shares on their
behalf to be appointed (or to have someone else
appointed) as a proxy. Alternatively, if Nominated Persons
92
Henderson European Trust plc Annual Report
Notice of Annual General Meeting continued
do not have such a right, or do not wish to exercise it,
they may have a right under such an agreement to give
instructions to the person holding the ordinary shares as
to the exercise of voting rights. Any statement of the rights
of shareholders in relation to the appointment of proxies
does not apply to Nominated Persons as these rights
can only be exercised by shareholders of the Company.
7. Receipt and termination of proxies
A form of proxy is enclosed and to be valid must be
lodged with the Company’s registrar, Equiniti, before
11.30 am on Monday, 27 January 2025. You may appoint
a proxy (or proxies) electronically to exercise all or any of
your rights to attend, to speak and to vote on your behalf
at the meeting through the website of our registrar,
EQ at www.shareview.co.uk. If you have registered for a
Shareview portfolio, please log onto your portfolio using
your usual user ID and password. Once logged in simply
click “View” on the “My Investments” page, click on the link
to vote then follow the on-screen instructions.
A member may terminate a proxy’s authority at any time
before the commencement of the AGM. Termination must
be provided in writing and submitted to the Company’s
registrar. In accordance with the Company’s articles of
association, in determining the time for delivery of proxies,
no account shall be taken of any part of a day that is not
a working day.
8. Electronic receipt of proxies
To appoint your proxy or give an instruction to a proxy
(whether previously appointed or otherwise) via the
CREST system, CREST messages must be received by the
Company’s agent (ID number RA19) no later than 11.30 am
on Monday, 27 January 2025. For this purpose, the time
of receipt will be taken to be the time (as determined by
the timestamp generated by the CREST system) from
which the issuer’s agent is able to retrieve the message.
The Company may treat as invalid a proxy appointment
sent by CREST in the circumstances set out in Regulation
35(5)(a) of the Uncertified Securities Regulations 2001.
Instructions on how to vote through CREST can be
found at www.euroclear.com.
9. Proxymity
If you are an institutional investor you may also
be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed
by the Company and approved by the Registrar.
For further information regarding Proxymity, please
go to www.proxymity.io. Your proxy must be lodged by
11.30 am on Monday, 27 January 2025 to be considered
valid. Before you can appoint a proxy via this process
you will need to have agreed to Proxymity’s associated
terms and conditions. It is important that you read these
carefully as you will be bound by them and they will
govern the electronic appointment of your proxy.
10. Communication with the Company
Members may not use any electronic address provided
either in the Notice of AGM or any related documents to
communicate with the Company for any purpose other
than those expressly stated.
11. Questions at the AGM
S319A Companies Act 2006 requires the directors to
answer any question raised at the AGM which relates to
the business of the AGM, though no answer need be given:
a) if to do so would interfere unduly with the preparation of
the AGM or involve disclosure of confidential information;
b) if the answer has already been given on the Company’s
website; or
c) if it is undesirable in the best interests of the Company
or the good order of the AGM that the question
be answered.
Shareholders are welcome to ask questions in advance
of the AGM by contacting the corporate secretary at
itsecretariat@janushenderson.com.
12. Members’ statement of audit concerns
Members satisfying the thresholds in s527 Companies Act
2006 can oblige the Company to publish a statement on
its website setting out any matter relating to:
a) the audit of the Company’s accounts (including the
auditor’s report and the conduct of the audit) that
are to be laid before the AGM; or
b) any circumstances connected with an auditor of the
Company ceasing to hold office since the last AGM,
that the members propose to raise at the AGM.
The Company cannot require the members requesting
the publication to pay its expenses. Any statement placed
on the website must also be sent to the Company’s
auditor no later than the time at which it makes its
statement available on the website. The business which
may be dealt with at the AGM includes any statement that
the Company has been required to publish on its website.
13. Total voting rights
As at 9 December 2024 (being the last practicable date
prior to the publication of this Notice) the Company’s
issued share capital consisted of 367,390,497 ordinary
shares. The total number of voting rights on that date was
323,697,014 (43,693,483 shares being held in treasury).
Each share carries one vote, other than those held
in treasury.
14. Documents available for inspection
The directors’ letters of appointment may be inspected
at the registered office of the Company, 201 Bishopsgate,
London EC2M 3AE, during normal business hours on any
business day and will be available at the AGM from
15 minutes prior to its commencement until its conclusion.
No director has a contract of service with the Company.
15. Website
The Company’s Annual Report, which contains this Notice
of AGM, is available at www.hendersoneuropeantrust.com,
together with these explanatory notes.
16. Filming
By attending the AGM, you agree to be filmed and note
that the event will be broadcast online.
Strategic report Governance
Financial
statements
Additional
information
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Henderson European Trust plc Annual Report 2024
Additional
information
Glossary
Term Definition
Alternative Investment
Fund Managers Directive
(“AIFMD”)
The AIFMD classifies certain investment vehicles, including investment companies,
as alternative investment funds (“AIFs”) and requires them to appoint an alternative
investment fund manager (“AIFM”) and depositary to manage and oversee the
operations of the investment vehicle. The Board retains responsibility for strategy,
operations and compliance. The directors retain a fiduciary duty to shareholders.
Association of
Investment Companies
The Company is a member of the AIC which is the trade body for investment companies
and represents the industry on matters which impact the regulation of such entities.
The Company is a constituent of the AIC Europe sector.
Benchmark
An index against which performance is compared. For the Company this is the FTSE
World Europe (ex UK) Index on a total return basis in Sterling terms.
Custodian
The custodian is responsible for ensuring the safe custody of the Company’s assets
and that all transactions in the underlying holdings are transacted in an accurate
and timely manner.
Depositary
As an AIF, the Company is required to appoint a depositary which has responsibility
for overseeing the operations of the Company including safekeeping, cash monitoring
and verification of ownership and valuation of the underlying holdings and is responsible
for the appointment of a custodian. The depositary is strictly liable for the loss of any
investments or other assets in its custody unless it has notified that it has discharged
its liability in certain markets.
Dividend dates
When declared or recommended, each dividend will have three key dates applied to it.
The payment date is the date on which shareholders will receive their dividend, either
by BACS transfer or by receipt of a dividend cheque. The record date applied to the
dividend is used as a cut-off for the Company’s registrars to know which shareholders
should be paid a dividend. Only shareholders on the Register of Members at the close
of business on the record date will receive the dividend. The ex-dividend date is the
business day before the record date and is the date on which the Company’s net asset
value per ordinary share will be disclosed ex-dividend.
Gearing
Gearing reflects the amount of borrowings that the Company has invested and indicates
the extra amount by which net assets, or shareholders’ funds, would move if the value
of a company’s investments were to rise or fall. This can be positive and would indicate
the extent to which net assets are geared; nil gearing shows a company is ungeared.
Negative gearing would indicate that a company is not fully invested and is holding net
cash as described below. There are several methods of calculating gearing, such as:
Gross gearing
This reflects the amount of gross borrowings (bank overdraft and loan notes) used by
a company and takes no account of any cash balances, as a percentage of net assets.
Net gearing
Net gearing represents the excess amount above shareholders’ funds of total
investments (less short-dated government bonds which are classified as cash
equivalents for this purpose), expressed as a percentage of the shareholders’ funds.
If the amount calculated is negative, this is a ‘net cash’ position and there is no gearing.
For further details please see the alternative performance measures on pages 96–97.
HEFT/HNE combination
The merger of interests of Henderson European Focus Trust plc (“HEFT”) with Henderson
EuroTrust plc (“HNE”) to form Henderson European Trust plc is referred to as the “HEFT/
HNE combination” in this Annual Report. Heads of terms were announced on 14 March
2024 and on 14 May 2024. The combination was effected by way of a scheme of
reconstruction and members’ voluntary winding-up of HNE under s110 Insolvency Act
1986 and the associated transfer of substantially all of the cash and other assets of
HNE to the Company in exchange for the issue of new shares in HEFT, effective from
4 July 2024. All historic performance data in this Annual Report takes into account the
recent HEFT/HNE combination but does not take account of HNE’s own performance
record, as assets were acquired, rather than the company.
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Henderson European Trust plc Annual Report
Term Definition
Investment trusts/
investment companies
Investment trusts are public limited companies, listed on the London Stock Exchange,
which provide shareholders with a professionally managed portfolio of investments.
Investment trusts are exempt from tax on the capital gains arising on their investments
subject to meeting certain criteria. Income, net of expenses and tax, is substantially
distributed to shareholders. Investment trusts are also known as investment companies,
although the tax legislation retains the reference to investment trusts.
Liquidity
In the context of the liquidity of shares in the stock market, this refers to the availability
of buyers and sellers in the market for the share in question. Where the market in a
particular share is described as liquid, that share will be in demand and holders wishing
to sell their shares should find ready buyers. Conversely, where the market in a share is
illiquid, the difficulty of finding a buyer or seller may depress or increase the price that
might be negotiated for a sale or purchase.
Investment companies can use allotment or buyback powers to assist market liquidity
in their shares.
Market capitalisation
(“market cap”)
The market value of a company, calculated by multiplying the mid-market price per
share by the number of shares in issue.
Treasury shares
Shares repurchased by the Company, but not cancelled, carrying no voting rights and
available for re-issue under the appropriate circumstances.
Glossary continued
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Henderson European Trust plc Annual Report 2024
Additional
information
Alternative performance measures
The Company uses the following Alternative Performance Measures (“APMs”) throughout the Annual Report, Financial
Statements and Notes to the Financial Statements. The APMs are reconciled to the Financial Statements through the
narrative below. The Board believes that each of the APMs, which are typically used within the investment trust sector,
provide additional useful information to shareholders to help assess the Company’s performance against its
peer group.
Capital return per share
The capital return per share is the capital profit for the year (see Income Statement) divided by the weighted average
number of ordinary shares in issue during the year (see note 9 on page 77).
Discount or premium
The amount by which the market price per share of an investment trust is either higher (premium) or lower (discount)
than the NAV per share, expressed as a percentage of the NAV per share.
30 September
2024
30 September
2023
Net asset value per share (pence) (A) 201.39 178.13
Price per share (pence) (B) 183.00 157.00
(Discount) or Premium (C=(B-A)/A) (%) (C) (9.1%) (11.9%)
Net gearing
Net gearing relfects the Company’s borrowings as a percentage of net assets as defined on page 94.
2024 2023
Investments held at fair value through profit or loss (page 70) (£’000) (A) 691,497 384,249
Less:
Investment in short-dated government bonds (£’000) (B) – 19,682
Net investment portfolio (£’000) (C=A-B) (C) 691,497 364,567
Net assets (see page 70) (£’000) (D) 663,534 378,997
Gearing (E=((C/D)-1 (%) (E) 4.2 (3.8)
Net Asset Value (“NAV”) per ordinary share
The value of the Company’s assets less any liabilities for which the Company is responsible, divided by the number of
ordinary shares in issue, excluding shares held in treasury (see note 16) and calculated with debt at par. The aggregate
NAV is also referred to as shareholders’ funds in the Statement of Financial Position. The NAV per ordinary share is
published daily and the year end NAV can be found on page 70 and further information is available on page 86
in note 21 within the Notes to the Financial Statements. The basis of preparation of the Statement of Financial Position
on page 70 is to recognise the value of the debt liability as the nominal amount that will be repaid at maturity (or NAV
with debt at par). For the EUR 35 million of unsecured loan notes, this recognises a liability of EUR 35 million. However,
we also provide an estimate of the NAV with debt at fair value in the interim and year end financial statements to
provide further information to shareholders. This NAV with debt at fair value estimates the current value of the debt
liability rather than the amount to be repaid at maturity. Further detail of the valuation method is set out in note 15.4
on pages 83–84.
Ongoing charge
Under the AIC methodology, the ongoing charge is usually calculated as expenses incurred during the year divided by
average net assets for the year, and represents both the impact of the Company’s expenses during the current year
and a measure of the Company’s expected costs during the following year.
Due to the HEFT/HNE combination and change of management fee rate part-way through the year, the traditional
method for calculating is not representative of expected costs going forwards, although it is representative of costs
incurred during the year to 30 September 2024. The AIC guidance does however allow for alternative calculations and
methodologies where there have been material changes and the AIC methodology may not be appropriate.
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Henderson European Trust plc Annual Report
Ongoing charge continued
The information below shows both the impact of expenses in the current year (following the standard AIC methodology)
and a rebased forward-looking cost figure. This forward-looking cost figure has been disclosed as the Company’s
ongoing charge because this represents the directors’ view of the best estimate of costs for the coming year. The actual
ongoing charge that will be disclosed in the 2025 Annual Report may differ from this figure as a result of actual expenses
that are incurred and any movements in the value of net assets during the year to 30 September 2025.
Impact of expenses
2024
£’000
2023
£’000
Management fee (note 5) 2,939 2,349
Other administrative expenses (note 6) 656 639
Less: non-recurring expenses (24) (31)
Total 3,571 2,957
Average net assets
1
478,582 371,700
Impact of expenses (%) 0.75 0.80
1 Calculated using the average daily net asset value.
Estimated ongoing charge
The estimated ongoing charge is 0.70%. This has been calculated with a management fee based on the net assets as
at 30 September 2024 and certain other administrative expenses rebased for the combined company, divided by the
Company’s net assets as at 30 September 2024.
As explained above, this departs from the AIC methodology for calculating the ongoing charge.
Revenue return per share
The revenue earnings per share is the revenue return for the year (see Income Statement) divided by the weighted
average number of ordinary shares in issue during the year (page 77).
Total return performance
The total return performance on the NAV or share price taking into account both the rise and/or fall of NAV/share prices
and dividends paid to shareholders. Any dividends received by a shareholder are assumed to have been reinvested in
either additional shares (for share price total return) or the Company’s assets (for NAV total return). Dividends paid and
payable are set out in note 10 on page 78.
NAV per
share Share price
NAV per share/share price per share at 30 September 2023 (pence) 178.13 157.00
NAV per share/share price per share at 30 September 2024 (pence) 201.39 183.00
Change in the year (%) 13.1 16.6
Impact of dividends reinvested (%) 3.1 3.4
Total return for the year (%) 16.6 20.5
The returns in the table above are calculated on a geometric rather than an arithmetic basis and therefore do not give
an arithmetic total.
Dividend yield
The dividend yield is the annual dividend expressed as a percentage of the year-end share price.
30 September
2024
30 September
2023
Annual dividend (pence) (A) 4.35 4.35
Share price (pence) (B) 183.0 157.0
Yield (C=A/B) (%) (C) 2.4% 2.8%
Alternative performance measures continued
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Henderson European Trust plc Annual Report 2024
Additional
information
General shareholder information
AIFMD disclosures and remuneration
In accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”), information about the
Company’s leverage and remuneration policy of
Janus Henderson Investment Fund Management
UK Limited, as the Company’s alternative investment
fund manager (“AIFM”), are available to investors.
These disclosures are provided in the AIFMD
disclosure document, which can be found
at www.hendersoneuropeantrust.com.
BACS
Dividends can be paid via BACS, and mandate forms for
this purpose are available from the registrar. Alternatively,
shareholders can write to the registrar Equiniti (“EQ”) at the
address on page 100 to give their instructions, which must
include the bank account details to which payments are
to be made.
Common Reporting Standard and FATCA
Tax legislation under the OECD’s Common Reporting
Standard for Automatic Exchange of Financial Account
Information requires the Company to provide personal
information to HMRC on certain investors who purchase
shares in investment trusts. This information is provided
annually to the local tax authority of non-UK-based
certificated shareholders and corporate entities.
FATCA is a United States law which requires investment
trusts to monitor the trading volume and frequency of
their securities to assess whether they have financial
accounts for US persons. The Company makes an annual
assessment to determine if the shares represent financial
accounts and would report any US accounts to HMRC.
Company names
References made to individual securities in the
Strategic Report do not constitute a recommendation
to buy, sell or hold any security, investment strategy
or market sector, and should not be assumed to be
profitable. Janus Henderson Investors and its employees
may have a position in the securities mentioned.
Equality Act 2010
This Annual Report and other documents issued by the
Company are available from the corporate secretary and
can be provided in alternative formats, including Braille or
larger type, as appropriate. For deaf and speech-impaired
customers, we welcome calls via Relay UK. Please see
www.relayuk.bt.com for more information. Alternatively,
if you prefer to go through a ‘typetalk’ operator (provided
by the Royal National Institute for Deaf People), dial 18001
followed by the number you wish to dial.
GDPR
A privacy statement can be found at
www.janushenderson.com.
ISA
The Company manages its affairs in order to qualify as
an eligible investment for holdings through a stocks and
shares ISA.
Non-mainstream pooled investments
(“NMPI”) status
The Company currently conducts its affairs so that its
ordinary shares of 5p each can be recommended by
independent financial advisors to ordinary retail investors
in accordance with the Financial Conduct Authority’s rules
about non-mainstream investment products and intends
to do so for the foreseeable future. The shares are
excluded from the FCA’s restrictions which apply to
non-mainstream investment products because they
are shares in an investment trust.
Key Information Document (“KID”)
This disclosure has been prepared with reference
to the FCA’s statement on 19 September 2024 that
investment trusts are excluded from Packaged Retail
and Insurance-based Investment Products regulations
(“PRIIPs”) and elements of cost disclosure under the
Markets in Financial Instruments Directive (“MiFID”).
As a listed company, the Company’s operating costs
are disclosed in the annual report and accounts.
The AIC recommends that investment trusts disclose
an ongoing charges figure (“OCF”), which is explained
in the alternative performance measures on page 96–97.
For the avoidance of doubt, the OCF does not represent
an additional fee that shareholders must pay directly to
the Company. Instead, the operating costs are paid by
the Company and are reflected in the Company’s net
asset value.
Performance/share price publication
The Company’s NAV is published daily. Details of the
Company’s share price and NAV per share can be found
on the website www.hendersoneuropeantrust.com, on the
London Stock Exchange Daily Official List, in the Financial
Times and on Trustnet.
Shareholder details
Shareholders who hold their shares in certificated form
can check their shareholding with the registrar, Equiniti,
via www.shareview.co.uk. To access to your details on the
Equiniti site, you will need the holder reference number
shown on your share certificate.
Taxonomy Regulation
Regulation (EU) 2020/852 (“Taxonomy Regulation”)
establishes the basis for the EU taxonomy. The EU
taxonomy is a classification system, establishing a list
of environmentally sustainable economic activities to
provide companies, investors and policymakers with
appropriate definitions about which economic activities
can be considered environmentally sustainable.
In accordance with the Taxonomy Regulation, the
Company states that the investments underlying this
financial product do not take into account the EU criteria
for environmentally sustainable economic activities.
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Henderson European Trust plc Annual Report
Warning to shareholders
Many companies are aware that their shareholders have received unsolicited phone calls or correspondence
concerning investment matters. These are typically from overseas based ‘brokers’ who target UK shareholders offering
to sell them what often turn out to be worthless or high-risk shares in US or UK investments. They can be persistent and
extremely persuasive. Shareholders are therefore advised to be wary of any unsolicited advice, offers to buy shares at
a discount or offers of free company reports. Please note that it is unlikely that either the Company or the Company’s
registrar, Equiniti, would make unsolicited telephone calls to shareholders. Any such calls would relate only to official
documentation already circulated to shareholders and never in respect of investment ‘advice’. If you are in any
doubt about the veracity of an unsolicited phone call, please call the Corporate Secretary at the number provided
on page 100. You can also check the FCA Warning List at #BeScamSmart / www.fca.org.uk/scamsmart.
General shareholder information continued
Historic financial Information
At 30
September
Net assets
£’000
NAV*
p
Mid-
market
price per
ordinary
share*
p
Profit/
(loss) for
year
£’000
Revenue
return per
share*
p
Capital
return per
share*
p
Total
return per
share*
p
Dividend*
p
Expenses
1
%
2015 194,914 98.2 98.78 7,459 2.36 1.64 3.99 2.47 0.89
2016 237,551 115.3 104.55 40,186 2.69 16.91 19.59 2.64 0.90
2017 292,398 137.1 138.90 50,559 3.38 20.96 24.34 2.95
2
0.87
2018 293,790 136.7 124.00 5,822 3.16 (0.45) 2.71 3.10 0.84
2019 299,010 139.1 124.50 11,906 2.68 2.86 5.54 3.13 0.84
2020 308,166 144.1 126.00 17,330 2.41 5.65 8.07 3.13 0.82
2021 370,736 173.4 159.00 69,182 3.31 29.05 32.36 3.31 0.80
2022 314,419 147.7 127.00 (47,428) 5.11 (27.32) (22.21) 4.35
3
0.77
2023 378,997 178.1 157.00 75,293 4.32 31.07 35.39 4.35 0.80
2024 663,534 201.4 183.00 55,301 4.43 22.88 27.31 4.35 0.75
* Comparative figure for the years to 2021 have been restated due to the subdivision of each ordinary share of 50p into ten ordinary shares
of 5p each on 7 February 2022.
1 Using the ongoing charge methodology prescribed by the Association of Investment Companies
2 Excludes the special dividend of 1.40p per ordinary share in respect of the year ended 30 September 2017
3 Excludes the special dividend of 0.50p per ordinary share in respect of the year ended 30 September 2022
Net gearing levels in the year to 30 September 2024
1
%
10
5
Nov JanOct Dec Mar JunFeb Apr May Jul Aug Sep
0
-10
-5
-20
-15
1 Net gearing at each month end. See definition in alternative performance measures on pages 96–97. There was a significant positive cash
figure on 30 June 2024 due to the tender offer paid on 4 July 2024 as part of the HEFT/HNE combination.
Strategic report Governance
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information
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Henderson European Trust plc Annual Report 2024
Additional
information
Corporate information
Registered office
201 Bishopsgate
London EC2M 3AE
Service providers
Alternative investment fund manager
(“AIFM”)
Janus Henderson Fund Management UK Limited
201 Bishopsgate
London EC2M 3AE
Corporate secretary
Janus Henderson Secretarial Services UK Limited
201 Bishopsgate
London EC2M 3AE
Telephone: 020 7818 1818
itsecretariat@janushenderson.com
Depositary and custodian
HSBC Bank Plc
8 Canada Square
London E14 5HQ
Corporate brokers
Winterflood Securities Limited
Riverbank House
2 Swan Lane
London EC4R 3GA
Numis Securities Limited (trading as Deutsche Numis)
45 Gresham Street
London EC2V 7BF
Registrar
Equiniti Limited (“EQ”)
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Telephone: +44 (0)371 384 2457
Lines are open 8.30 am to 5.30 pm UK time,
Monday to Friday.
There is a range of shareholder information online.
You can check your holding and find practical help
on transferring shares or updating your details at:
www.shareview.co.uk
Independent auditor
Ernst & Young LLP
25 Churchill Place
London E14 5EY
Financial calendar
Annual results announced December 2024
Ex-dividend date 2 January 2025
Dividend record date 3 January 2025
Annual General Meeting 29 January 2025
Final dividend payable 3 February 2025
Half-year results announced May 2025
Interim dividend payable June 2025
Information sources
For more information about the Company, visit
the Company’s website. This includes factsheets,
interviews, up-to-date share price and net asset value
details, and other insights.
www.hendersoneuropeantrust.com
To receive regular insights on investment trusts from
the Manager, visit:
www.janushenderson.com/en-gb/uk-investment-trusts/subscribe/
Follow Janus Henderson Investment Trusts
on LinkedIn: – Janus Henderson Investment Trusts, UK
Investing
Shares can be purchased in the market via a stockbroker
or through share dealing platforms. They can also be held
through share plans, ISAs or pensions, and links to various
providers are included on the website.
Potential investors are reminded that the value of
investments and the income from them may go down
as well as up and investors may not get back the full
amount invested. Tax benefits may vary as a result
of statutory changes and their value will depend on
individual circumstances.
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Henderson European Trust plc Annual Report
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.hendersoneuropeantrust.com
Henderson European Trust plc is registered as an investment company
in England and Wales
Registered office
201 Bishopsgate,
London EC2M 3AE
SEDOL/ISIN number
Ordinary Shares:
BLSNGB0/GB00BLSNGB01
Companies House
registration number
00427958
London Stock Exchange
(TIDM) Code
HET
Global Intermediary
Identification Number
(GIIN)
THMNPN.99999.SL.826
Legal Entity Identifier (LEI)
213800GS89AL1DK3IN50
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Front cover image: La Defense, Paris, France
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