Henderson
Opportunities
Trust plc
Annual Report 2024
JHI9216/2024Henderson Opportunities Trust plc – Annual Report 2024
Henderson Opportunities Trust plc
Registered as an investment company in England and Wales
Registration number 01940906
Registered office: 201 Bishopsgate, London EC2M 3AE
SEDOL/ISIN number: BSHRGN4/GB00BSHRGN41
London Stock Exchange (TIDM) Code: HOT
Legal Entity Identifier (LEI): 2138005D884NPGHFQS77
Global Intermediary Identification Number (GIIN): LVAHJH.99999.SL.826
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.hendersonopportunitiestrust.com
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Henderson Opportunities Trust plc Annual Report 2024
Strategic Report
Performance highlights 1
Chairman’s statement 3-4
Fund Managers’ report 5-7
Twenty largest holdings 9-10
Investment portfolio 11-12
Portfolio information 13
Historical record 14
Key performance indicators 15
Business model 16-26
Our approach to ESG matters 27-28
Governance
Board of Directors 30
Corporate governance
report 31-37
Audit and Risk Committee
report 38-40
Directors’ remuneration
report 41-43
Directors’ report 44-45
Statement of Directors’
responsibilities 46
Financial Statements
Independent Auditor’s Report 48-53
Income Statement 54
Statement of Changes in Equity 55
Statement of Financial Position 56
Statement of Cash Flows 57
Notes to the Financial
Statements 58-72
Additional information
Glossary 74-75
Alternative performance
measures 76-77
Securities financing
transactions 78-79
General shareholder
information 80
Corporate information 81
Strategic
Report
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Janus Henderson
Investment
Objective
The Company aims to achieve
capital growth in excess of
the FTSE All-Share Index from
a portfolio of primarily UK
investments.
Henderson Opportunities Trust plc Annual Report 2024
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 very persistent and extremely
persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount
or offers of free company reports.
Please note that it is very unlikely that either the Company or the Company’s Registrar, Computershare Investor Services
plc, would make unsolicited telephone calls to shareholders and that 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 81. You can also check the FCA Warning List at #BeScamSmart https://www.fca.org.uk/scamsmart.
Registered office
201 Bishopsgate
London EC2M 3AE
Service providers
Alternative Investment Fund Manager
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
Email: itsecretariat@janushenderson.com
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Broker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Registrar
Computershare Investor Services plc
The Pavillions
Bridgewater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1059
Email: WebCorres@computershare.co.uk
Investors with share certificates (i.e. not those in
ashareplanor ISA) can check their holdings at
www.investorcentre.co.uk.
Independent auditor
BDO LLP
55 Baker Street
London W1U 7EU
Financial calendar
Annual results announced February 2025
Fourth interim dividend ex dividend date 20 February 2025
Fourth Interim dividend record date 21 February 2025
First General Meeting 21 February 2025
Fourth interim dividend payable on 11 March 2025
Second General Meeting 14 March 2025
Information sources
For more information about Henderson Opportunities Trust plc,
visit the website atwww.hendersonopportunitiestrust.com.
To receive regular insights on investment trusts from the
Manager, visit: https://www.janushenderson.com/en-gb/
investor/subscriptions/ or scan the QR code and register
with Janus Henderson.
Follow Janus Henderson Investment Trusts LinkedIn –
Janus Henderson Investment Trusts, UK.
Investing
Shares can be purchased in the market via a stockbroker
orthrough 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 receive back the full amount invested.
Taxbenefits may vary as a result of statutory changes and
their value will depend onindividual circumstances.
Corporate information
81
Year to 31 October
NAV per share at year end
5
2024 2023*
235.5p 207.0 p
Total return per share
5
2024 2023*
35.5p (20.7p)
Discount at year end
5, 6
2024 2023
10.0% 16.4%
Dividend for year
7
2024 2023*
7.1p 7.1p
Share price at year end
2024 2023*
212.0p 173.0p
Net assets
2024 2023
£93.0m £81.8m
Ongoing charge
2024 2023
1.03% 1.02%
Performance highlights
Total return performance to 31 October 2024
1 year
%
3 years
%
5 years
%
10 years
%
NAV
1, 5
17.1 -21.8 14.7 60.9
Share price
2
26.9 -16.1 31.5 56.1
Benchmark
3
16.3 19.7 31.9 81.9
Peer group NAV
4
23.4 -1.6 27.7 79.8
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary share of 25p into five ordinary shares of 5p
each on 11 March 2024.
1 Net asset value (“NAV”) per ordinary share total return (including dividends reinvested)
2 Share price total return (including dividends reinvested)
3 FTSE All-Share Index
4 AIC UK All Companies simple average
5 Alternative performance measure
6 Calculated based on the NAV per share and share price at year end
7 This represents three interim dividends of 1.5p each, and one interim dividend of 2.6p, to be paid on 11 March 2025. See page 4 for more details. The dividend yield
5
for
the year ended 31 October 2024 was 3.3% (2023: 4.1%) based on the share price atthe year end
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
A glossary of terms can be found on pages 74 and 75 and alternative performance measures can be found on pages 76 and 77
Henderson Opportunities Trust plc Annual Report 2024
1
Chairman’s
statement
Strategic Report
Chairman’s statement
Result of the Requisitioned General
Meeting
In December 2024, the Company received a requisition notice
from Saba Capital Management L.P. (“Saba”), requesting the
convening of a general meeting to consider resolutions to
remove the current directors and to appoint two new directors
to the Board. The requisitioned general meeting was held
on4February 2025 and the resolutions put forward were
defeated on a poll (approximately 65% of the total votes cast
were voted against the resolutions).
The Board was very pleased to see a voting turnout of
approximately 73.4%. The Board would like to extend its
gratitude to all of the Company’s shareholders for their
support and participation inthe vote.
Scheme of Reconstruction
At the Company’s annual general meeting in March 2023,
although shareholders voted in favour of the triennial
resolution for the continuation of the Company, 24.2 per cent.
of the votes cast were voted against. In response to
shareholder feedback around the Company’s size, its
longer-term NAV and share price performance, the discount
at which the shares traded and the limited share liquidity,
theBoard took various steps with a view to creating additional
demand for the shares and enhancing value for shareholders.
These included removing the performance fee, effecting
ashare split, reducing gearing and increasing the focus on
marketing. Working with the Fund Managers, the Board also
undertook a detailed review of the portfolio scrutinising risk,
volatility and allocation. Thisresulted in a reduction in gearing
and in the Company’s exposure to AIM stocks.
Following the last continuation vote, the Board also started
exploring strategic options for the future of the Company.
Theseincluded a possible combination with another
investment trust or a change of mandate. In November 2024,
the Board concluded that, although in the most recent
financial year ended 31 October 2024 the Company had seen
some recovery and had modestly outperformed its
benchmark, in the Board’s view and taking into account the
various challenges the Company continued to face,
shareholders’ interests would be best served through pursuit
of a strategic option. Having assessed all available choices,
the Board then determined that proposing a scheme of
reconstruction – offering a full cash exit at NAV and/or the
opportunity to roll into an open-ended fund – was the best
achievable option.
The work to deliver this scheme had commenced prior to the
receipt by the Company of the requisition notice from Saba
and the Company published the circular relating to the
Scheme of Reconstruction on 3 February 2025 (the “Circular”).
The Circular sets out proposals to shareholders for the
winding-up of the Company by way of a scheme of
reconstruction pursuant to Section 110 of the Insolvency Act
1986 (the “Scheme”). Under the terms ofthe Scheme,
shareholders will be offered the opportunity toroll over their
investment into Janus Henderson UK Equity Income & Growth
Fund (the “OEIC Sub-Fund”), asub-fund of Janus Henderson
UK & Europe Funds whose portfolio is also managed by
Janus Henderson Investors UK Limited, or to receive cash in
respect of their investment in the Company, ora combination
ofboth (the “Proposals”).
The OEIC Sub-Fund’s individual fund managers are Laura Foll
and James Henderson (who also currently manage the
Company’s portfolio). The OEIC Sub-Fund aims to provide a
dividend income, with prospects for both income and capital
growth over the long term (5 years or more). It invests at least
80 per cent. of its assets in shares of companies, in any
industry, in the UK and will typically have a bias towards small
and medium-sized companies. The OEIC Sub-Fund is larger
than the Company, with net assets ofaround £165.56 million
(as at 31 December 2024).
Full details of the Proposals are set out in the Circular which
can be found at www.hendersonopportunitiestrust.com.
As part of its campaign, Saba has publicly stated its aim
todeliver substantial liquidity options for shareholders.
TheScheme is designed to deliver full liquidity for
shareholders. However, given Saba’s current interest in
over25% of the Company’s issued share capital Saba will
beable to block the Scheme by voting against the Scheme
resolutions should it decide to do so.
In the event that the resolutions required to approve the
Scheme and the winding-up of the Company are not passed
andthe Scheme does not become effective, the Board will
need to consider alternative proposals for the future of the
Company that are in the best interests of shareholders as
awhole.
Board Recommendation
Two general meetings will be held on 21February 2025 at
9.00am and on 14March 2025 at 9.30am at Janus Henderson’s
offices at 201 Bishopsgate, London EC2M3AE to approve the
Scheme and the winding up of the Company respectively.
Fulldetails are set out in the Notices of Meetings in the Circular.
The Board is unanimously of the opinion that the proposals
set out in the Circular are in the best interests of shareholders
as a whole. Accordingly, the Board unanimously recommends
that shareholders vote in favour of all of the resolutions to be
proposed at the Scheme general meetings.
Shareholders on the main register should complete the Forms
of Proxy sent to them on 3 February 2025. To be valid, the
Forms of Proxy should be completed, signed and returned
tothe Company’s Registrar, Computershare Investor
ServicesPLC by post to The Pavilions, Bridgwater Road,
Henderson Opportunities Trust plc Annual Report 2024
3
Chairman’s statement (continued)
Bristol BS99 6AH as soon aspossible but in any event
theymust arrive no later than 9.00am on 19 February 2025
inrespect of the first Scheme general meeting and 9.30am
on12March 2025 in respect of the secondScheme general
meeting. Alternatively, shareholders can submit their
voteelectronically by visiting Computershare’s website
(www.investorcentre.co.uk/eproxy). CREST members
mayutilise the CREST electronic proxy appointment service
inaccordance with the procedures set out in the notes to
theNotices of General Meeting contained in the Circular.
If you are an institutional investor, you may be able toappoint
a proxy electronically viathe Proxymity platform, aprocess
which has been agreedby the Company and approved by the
Registrar. Forfurther information regarding Proxymity, please
go to www.proxymity.io.
Shareholders who hold their shares through an investment
platform or other nominee service are encouraged to contact
their investment platform provider or nominee as soon as
possible to arrange for votes to be lodged on their behalf.
Appointment of a proxy does not preclude you from attending
the meeting and voting in person.
Performance review
As mentioned above, the year saw some recovery from the
depressed levels of lastyear and the Company modestly
outperformed its Benchmark, the FTSE All-Share Index.
Overthe longer term the Company lags the Benchmark and
the Fund Managers’ report looks at the reasons. The problem
has been the over weight position in smaller companies
compared to the Benchmark with much of the upward
momentum of the Index coming from a select number of very
large companies. The reasons for this are partly technical.
Traditional shareholders have for a number of years been
selling down their UK holdings. This has been particularly
thecase with pension funds that have reduced their equity
exposure to derisk their portfolios and other shareholders
withconcerns about the UK economy moving funds overseas.
The remaining buyers of UK stock tend to be large
international investors who concentrate their interest in large
international based UK companies. This trend has left a
dearth of investors for UK smaller companies. The pick-up in
takeover activity during the year as overseas companies made
bids for UK-based companies and the realisation that the UK
recession at the end of last year was short-lived both helped
the portfolio. Both the Fund Managers and the Board
recognised that, ahead of the October 2024 Budget, the AIM
market was facing considerable uncertainty from tax changes.
As a result of this uncertainty it was felt prudent to apply
greater scrutiny to AIM holdings in particular, and a few were
reduced and in asmall number of cases, sold.
Dividend
A fourth interim dividend of 2.6p per share for the year ended
31 October 2024 and a first interim dividend of 1.5p per share
for the year ended 31 October 2025 will be paid on 11March
2025, to shareholders on the register at the close of business
on 21February 2025. The shares will go ex-dividend on
20February 2025.
Gearing
Gearing was a modest positive contributor to returns during
the financial year, as the Fund Managers show in the
‘Attribution’ section of their report. The Board continued to
view gearing as one of the key advantages of the investment
trust structure and gearing has, over the long term (as well as
over one year), positively contributed to the Company’s
performance.
The Fund Managers, following discussion with the Board,
reduced the gearing during the year, with the Company
finishing the year with 5.3% gearing compared to 9.6% at
theprevious financial year end.
The discount level
During the year the discount relative to the Company’s net
asset value fluctuated between 5.9% and 17.8%, finishing the
year at 10.0%. This was a lower discount than the 16.4% at
theprevious financial year end. The average discount for the
Company during the year was 12.2%, compared to 10.5% for
the AIC UK All Companies peer group and 15.4% for the AIC
UK Smaller Companies group.
There were no shares bought back or issued during the
financial year.
Annual General Meeting
The Company’s 2025 AGM will only be scheduled in the
eventthat shareholders do not approve the Scheme and it
does not become effective. In this event, aseparate notice of
meeting for the AGM will be sent to shareholders in or around
March 2025.
Wendy Colquhoun
Chairman
12 February 2025
Henderson Opportunities Trust plc Annual Report 2024
4
Fund
Managers’
report
Strategic Report
Overview
It was a difficult year for investors to have a clear view of what
the economy had in store for companies. The last few months
of 2023 saw the UK economy slip into recession, but it was
shallow and the economy was back growing in early 2024.
Rosier projections, however, proved short-lived and interest
rates did not fall as fast as had been hoped, resulting in
anaemic economic growth for much of the period.
Performance in the medium and smaller company area of the
market was very mixed. Low valuations led to takeover
approaches for a few companies and this buoyed some share
prices, but there was no real pick-up in investor flows to the
sector. Redemptions in trust portfolios investing in this sector
continued, which meant there was a lack of real demand for
shares. The demand there was would evaporate on the
smallest concern about an individual company. This resulted
in little appetite to take on risk so potential high growth
early-stage companies were savagely sold down. The reliable,
slower growing but cash generative business fared better as it
was the sort of stock that could attract bid attention.
Attribution
While we are reporting on a year of strong absolute
performance and modest relative outperformance, the
majority of this has been driven by the holdings in larger
companies (we go into more detail on the stock specific
drivers below). The Company’s weighting in AIM has
continued to be a detractor from performance, with AIM
underperforming the broader UK market. This means that
over a three-year period, AIM has underperformed the FTSE
All-Share by a staggering 55%, as the chart below shows:
AIM performance over 3 years
FTSE All-Share FTSE AIM All-Share
Nov
2021
May
2023
May
2024
Nov
2022
Nov
2023
May
2022
0
20
40
60
80
100
120
140
Source: Bloomberg, total return, GBP, rebased to 100 as at 1 November 2021
In our view the material underperformance of the AIM market
has come about for a number of reasons including fund
managers’ increasing desire for liquidity, weak sentiment
resulting in outflows from UK equities and, increasingly ahead
of the Budget in October 2024, concern about the future of
inheritance tax relief on AIM shares.
As the table below shows, the Company’s holdings in the
FTSE 100 substantially outperformed (the FTSE 250 was
approximately in line), while the holdings in AIM and the FTSE
Small Cap Index underperformed (comparing the fourth and
fifth columns of the table below).
Index:
Company
weighting
(%)
Benchmark
weighting
(%)
Company
total return
(%)
Benchmark
total return
(%)
FTSE 100 34.3 84.9 45.1 15.0
FTSE 250 19.5 13.1 23.1 23.4
FTSE SmallCap 8.8 1.9 2.9 24.1
FTSE AIM All-Share 32.9 – -0.1 10.5
Company and Benchmark weights are as at financial year end (31 October 2024)
Source: Factset, Morningstar Direct
When viewed though a different lens, stock selection has,
overall, been positive (driven by the FTSE 100) but size
allocation, and in particular the weight on AIM, has been a
substantial detractor. In a rising market, the use of gearing
was a modest positive contributor during the year:
Attribution returns
Benchmark Size
allocation
Stock
selection
Gearing Fees Company
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
%
16.3
-6.9
7.7
1.0
-1.0
17.1
Source: Janus Henderson
Turning to stocks, three of the top ten absolute contributors to
performance during the year were banks, as higher interest
rates aided lending margins at a time when loan losses
remained subdued.
Of the other best contributors, two (Rolls-Royce and
Marks& Spencer) were driven by ongoing recovery. In the
case of Rolls-Royce, under a new management team they
have reduced costs and improved commercial delivery. Inthe
case of Marks & Spencer, they are taking market share in both
food and clothing under a new management team anda
Fund Managers’ report
Henderson Opportunities Trust plc Annual Report 2024
6
refreshed (and more competitively priced) offering.
Smallercompanies that performed well included Scottish
housebuilder Springfield Properties, which has been
successfully undertaking disposals in order to strengthen
itsbalance sheet. Defence equipment provider Cohort
benefited from a rising defence spending environment,
whiletelecoms and utilities software provider IQGeo was
taken over by private equity.
The top ten contributors to absolute return were:
Company name
Contribution to
absolute return (%)
Share price
total return (%)
1. Rolls-Royce 3.0 126.3
2. Barclays 2.7 90.2
3. Springfield Properties 2.0 90.4
4. Natwest 1.5 120.0
5. Cohort 1.4 89.2
6. IQGeo 1.3 133.0
7. Marks & Spencer 1.3 75.4
8. Standard Chartered 1.2 46.5
9. Boku 1.1 31.0
10. Marshalls 1.0 66.9
Examining the detractors in more detail, three of the top ten
were exposed to the North Sea (Jersey Oil & Gas, Serica
and Deltic Energy). In our view, the share price falls in this
area were largely as a result of uncertainty around the future
fiscal regime. The lack of clarity around, for example, the
ability to offset taxation with capital spend meant that it was
difficult for large projects (such as the Buchan field) to reach
final investment decision. This impacted the share price of
Jersey Oil & Gas in particular. Elsewhere, the detractors
tended to be early-stage companies (Surface Transforms,
ITM Power, AFC Energy and Creo Medical) where in some
cases, such as Surface Transforms, there have been
operational issues with scaling to meet demand.
The top ten detractors from absolute return were:
Company name
Contribution to
absolute return (%)
Share price
total return (%)
1. Jersey Oil & Gas -1.6 -64.0
2. Surface Transforms -1.4 -98.9
3. Serica Energy -0.8 -27.4
4. ITM Power -0.5 -36.6
5. Vanquis Banking -0.5 -60.4
6. AFC Energy -0.4 -37.3
7. Marks Electrical -0.4 -34.7
8. Creo Medical -0.4 -39.6
9. Deltic Energy -0.4 -68.5
10. TT Electronics -0.4 -48.1
Portfolio activity
During the year a diverse mix of large, medium and small
companies were purchased. Within larger companies, new
holdings included BP, Sainsbury (J) and Glencore. These
holdings bring ballast to the portfolio at sensible valuations.
Within small and medium sized companies, new purchases
included Shaftesbury Capital which is a portfolio of iconic
London properties. It is seeing rental growth with high levels
of occupancy, yet the shares trade at a substantial discount
tothe asset value.
The largest disposal was the holding in Rolls-Royce, the
aerospace business. The company has made a remarkable
recovery in operational share price returns over the last couple
of years and its strengths are now better reflected in the
shareprice.
Other large disposals were the result of the investee company
being taken over, namely IQGeo and International
Distribution Services. In smaller company investing, if a
company does not grow over time as we thought it would at
purchase, a hard decision needs to be made. We need to
realise the mistake and the position should be sold. The sales
of ZOO Digital and Dianomi were examples of this discipline.
Certain small company holdings were reduced after strong
share price appreciation for the overall balance of the
portfolio. Examples of this would be Vertu Motors, Boku and
Redde Northgate.
Income
Earnings per share fell during the year to 6.3p, down from
6.7p the previous year (adjusted for the 5 for 1 share split).
Within this figure is a contribution of £229,000 from securities
lending income (2023: £183,000). Investment income levels
were impacted by the reduction in gearing of the Company
(some of which consisted of reductions in some of the higher
dividend yield shares, such as financials) as well as a trend
across the UK market for companies to undertake share
buybacks rather than pay special dividends.
Outlook
The Company announced a Scheme of Reconstruction on
3February 2025 and the Company’s future will be determined
byshareholders at the Scheme General Meetings. Please see
the Chairman’s Statement on page 3 for more information.
James Henderson and Laura Foll
Fund Managers
12 February 2025
Fund Managers’ report (continued)
Henderson Opportunities Trust plc Annual Report 2024
7
Portfolio
information
Strategic Report
Twenty largest holdings at 31 October 2024
The stocks in the portfolio are a diverse mix of businesses operating in a wide range of end markets.
Ranking
2024
(2023) Company
% of
portfolio
Approximate
market
capitalisation
Valuation
2023
£’000
Purchases
£’000
Sales
£’000
Appreciation/
(depreciation)
£’000
Valuation
2024
£’000
1 (7)
Standard Chartered
A global bank that provides international
banking and financial services. Their lending
margins have benefited in recent years from
higher interest rates.
3.5 £22bn 2,426 – – 1,040 3,466
2 (6)
HSBC
A global bank that provides international
banking and financial services. Their lending
margins have benefited in recent years from
higher interest rates.
3.1 £129bn 2,550 – (71) 585 3,064
3 (3)
Boku¹
A mobile payments company which allows
customers including Apple and Spotify to
charge for their services via an individual’s
mobile phone bill.
3.1 £541m 2,857 – (714) 860 3,003
4 (1)
Barclays
A leading retail, commercial and investment
bank. Earnings have benefited in recent years
from higher interest rates, and the Barclays
management team is committed to improving
returns from the investment bank.
2.7 £34bn 3,224 – (2,890) 2,278 2,612
5 (5)
Rio Tinto
A diversified miner with exposure to
commodities including iron ore and copper.
It operates at the lower end of the cost
curve, enabling attractive cash generation.
2.6 £85bn 2,627 – – (119) 2,508
6 (15)
Springfield Properties¹
A Scottish housebuilder of both private and
affordable housing. It trades at a valuation
discount to much of the housebuilding sector
and has a large land bank.
2.4 £118m 1,713 82 (1,114) 1,680 2,361
7 (11)
Anglo American
A diversified miner with exposure including
copper and iron ore, operating good quality
assets from a relatively low cost base.
2.4 £32bn 2,044 – – 296 2,340
8 (17)
Cohort¹
A provider of equipment and services for the
defence and security sector. They have
benefited in recent years from a higher defence
spending environment.
2.4 £371m 1,497 – (417) 1,251 2,331
9 (12)
Tesco
The largest food retailer in the UK. In recent
years it has re-set its price competitiveness
relative to the discounters and this is enabling
it to gain market share.
2.4 £23bn 1,820 – – 490 2,310
10 *
Shaftesbury Capital
An owner of mixed use property across much
of London’s West End (such as Carnaby
Street). The shares trade at a discount to net
asset value with good prospects for rental
growth.
2.1 £3bn – 1,860 – 176 2,036
* Not in the top 20 largest investments last year
1 Quoted on AIM
9
Henderson Opportunities Trust plc Annual Report 2024
Ranking
2024
(2023) Company
% of
portfolio
Approximate
market
capitalisation
Valuation
2023
£’000
Purchases
£’000
Sales
£’000
Appreciation/
(depreciation)
£’000
Valuation
2024
£’000
11 (14)
Marks & Spencer
A clothing and food retailer. Under a new
management team they have refreshed their
clothing offering and become more price
competitive across both sides of the business.
They have seen a good earnings recovery as a
result of the changes made.
2.0 £8bn 1,734 – (950) 1,186 1,970
12 (20)
SigmaRoc¹
A heavy building materials company with
exposure to the UK and Continental Europe.
Thecompany has grown well via acquisitions
inrecent years and trades at an attractive
valuation.
2.0 £870m 1,458 – (346) 835 1,947
13 (2)
Vertu Motors¹
A UK car dealer with brands including Ford
andVauxhall. The management team has a
successful track record and the balance sheet
isstrong.
2.0 £225m 3,120 – (1,035) (158) 1,927
14 *
Flutter Entertainment
A global provider of gambling services. They
have grown successfully in the US and are one
of the market leaders in a fast growing market.
1.8 £32bn 1,290 – – 524 1,814
15 *
BP
A vertically integrated oil and gas business.
Atthe current oil price it remains highly cash
generative, much of which is being returned to
shareholders via an attractive dividend yield
and ongoing share buyback.
1.8 £61bn – 1,930 – (141) 1,789
16 (16)
Van Elle¹
A provider of ground services such as piling to
the UK construction industry. They would be
well placed were housebuilding volumes to
recover.
1.8 £46m 1,607 – – 169 1,776
17 (19)
Babcock
A provider of services such as submarine
maintenance, predominantly to the UK defence
industry. Under a new management team they
have re-focused the business and improved the
balance sheet.
1.8 £2bn 1,466 – – 304 1,770
18 *
GlaxoSmithKline
A global pharmaceutical company. The shares
trade at a substantial valuation discount to peers
despite being world leading in areas such as HIV
treatment and vaccines.
1.8 £58bn 1,341 562 – (135) 1,768
19 *
Entain
A global provider of gambling services. Under a
new management team performance is showing
signs of improvement, while there is potentially
underappreciated value in their US business.
1.8 £5bn – 1,472 – 278 1,750
20 *
NatWest
The company is a leading commercial and retail
bank in the UK. Conservative lending practises
have meant loan losses have remained low,
while higher interest rates have enabled better
returns and an attractive dividend yield paid to
shareholders.
1.7 £31bn 1,260 – (768) 1,188 1,680
At 31 October 2024 these investments totalled £44,222,000 or 45.0% of the portfolio.
Twenty largest holdings at 31 October 2024 (continued)
* Not in the top 20 largest investments last year
1 Quoted on AIM
10
Henderson Opportunities Trust plc Annual Report 2024
Ranking
2024
Company Main activity
Valuation 2024
£’000
1 Standard Chartered Banking 3,466
2 HSBC Banking 3,064
3 Boku¹ Mobile payment software provider 3,003
4 Barclays Retail, commercial and investment banking services 2,612
5 Rio Tinto General mining 2,508
6 Springfield Properties¹ Scottish housebuilder 2,361
7 Anglo American Diversified miner 2,340
8 Cohort¹ Military products and services 2,331
9 Tesco Food retailer 2,310
10 Shaftesbury Capital Mixed use London property owner 2,036
10 largest 26,031
11 Marks & Spencer Clothing and food retailer 1,970
12 SigmaRoc¹ Construction materials 1,947
13 Vertu Motors¹ Motor retailer 1,927
14 Flutter Entertainment Global gambling services 1,814
15 BP Integrated oil and gas producer 1,789
16 Van Elle¹ Construction services 1,776
17 Babcock Defence services 1,770
18 GlaxoSmithKline Global pharmaceuticals 1,768
19 Entain Global gambling services 1,750
20 NatWest UK retail and corporate bank 1,680
20 largest 44,222
21 Serica Energy¹ Oil and gas exploration and production 1,646
22 Aviva General insurance 1,636
23 Redcentric¹ IT managed services 1,623
24 Tracsis¹ Logistics software and services 1,612
25 Kier Group Construction services 1,598
26 Renold¹ Industrial chains 1,542
27 Morgan Advanced Materials Specialist materials producer 1,533
28 Marshalls Building materials producer 1,530
29 Oxford Instruments Scientific instruments 1,497
30 Prudential Insurance 1,450
30 largest 59,889
31 Ceres Power Fuel cell technology 1,401
32 STV Scottish free-to-air TV broadcaster 1,386
33 Workspace London office real estate investment trust 1,357
34 IntegraFin Holdings Advisor platform 1,351
35 BT Group Fixed and mobile telecommunications 1,313
36 The Gym Group Affordable gyms 1,287
37 GB Group¹ Identity data intelligence 1,276
38 Sainsbury (J) Food retail 1,264
39 ITM Power¹ Green energy technology 1,248
40 International Personal Finance Sub prime and digital lending 1,197
40 largest 72,969
Investment portfolio at 31 October 2024
1 Quoted on AIM
2 Unlisted
Henderson Opportunities Trust plc Annual Report 2024
11
Ranking
2024
Company Main activity
Valuation 2024
£’000
41 Oxford Nanopore Technology DNA sequencing technology 1,164
42 Senior Aerospace and industrial engineer 1,133
43 Premier Miton Group¹ Fund management 1,072
44 Next 15 Group¹ Digital marketing agency 1,067
45 M&G UK financial services 1,066
46 Zigup Flexible vehicle hire 1,051
47 Glencore Diversified miner 1,016
48 Halfords Group Auto parts and cycling retailer 1,004
49 Jersey Oil & Gas¹ Oil and gas exploration and production 935
50 Johnson Matthey Advanced materials technology 893
50 largest 83,370
51 RWS Holdings¹ Patent translation services 829
52 Dowlais Automotive components 806
53 Ricardo Automotive technology consultancy 799
54 Marks Electrical Online electricals retailer 794
55 International Consolidated Airlines Airline 791
56 CML Microsystems Specialist semiconductors 786
57 XP Power Electrical power components 752
58 AFC Energy¹ Fuel cell technology 690
59 Vanquis Banking Sub prime lending 677
60 DFS Furniture Furniture retailer 660
60 largest 90,954
61 IP Group Portfolio of early stage companies from universities 634
62 Alfa Financial Software Asset finance software and consultancy 630
63 Creo Medical¹ Surgical devices 557
64 Reach News publisher 528
65 Accsys Technologies¹ Wood treatment technology 492
66 Oxford Sciences Enterprises
2
Portfolio of companies from Oxford University 490
67 Westminister¹ Security services 490
68 Jubilee Metals¹ Platinum metals producer 405
69 Jadestone Energy Oil and gas production 392
70 Invinity Energy Systems¹ Next generation batteries 388
70 largest 95,960
71 TT Electronics Industrial components 356
72 Ilika¹ Advanced materials 342
73 Tribal Group¹ Educational sector software and services 326
74 I3 Energy¹ Predominantly Canadian oil and gas 299
75 Deltic Energy Oil and gas exploration 214
76 Deltex Medical¹ Medical monitoring equipment 141
77 KRM22¹ Risk monitoring system 139
78 Chamberlin Iron casting 106
79 Atlantis Resources¹ Renewable energy generation 103
80 Reabold Resources¹ Oil and gas exploration 100
80 largest 98,086
81 IQE¹ Semiconductor components 90
82 Surface Transforms¹ Braking systems 13
83 Indus Gas¹ Gas production in India 8
84 Oxford Biodynamics¹ Drug and technology 5
Total Investments
98,202
1 Quoted on AIM
2 Unlisted
Investment portfolio at 31 October 2024 (continued)
12
Henderson Opportunities Trust plc Annual Report 2024
Portfolio information
Portfolio by sector at 31 October
As a percentage of the investment portfolio excluding cash
0
5
10
15
20
25
30
Tele-
communications
TechnologyReal
Estate
IndustrialsHealth
Care
FinancialsEnergyConsumer
Staples
Consumer
Discretionary
Basic
Materials
%
2024 2023
6.6
18.0
7.0
9.2
4.3
27.4
1.3
8.6
1.2
3.0
1.1
20.2
16.5
9.0
7.4
20.6
25.3
4.2
5.6
3.5
Portfolio by index at 31 October
As a percentage of the investment portfolio excluding cash
0
10
20
30
40
50
%
2024 2023
FTSE
100
FTSE
250
FTSE
SmallCap
FTSE AIM
Other
1
44.2
32.9
1.4
4.5
13.3
19.5
31.7
34.3
9.4
8.8
1 Other also includes AIM investments outside the FTSE AIM Index and shares listed on the main market which are not included in the FTSE All-Share Index
Market capitalisation of the portfolio at 31 October 2024
0
20
40
60
80
100
Greater than
£2b
£1b – £2b £500m – £1b £200m – £500m £100m – £200m £50m – £100m Less than £50m Other
Portfolio Weight
Benchmark Weight
40.9
90.5
5.5
4.8
17.3
2.5
15.1
1.7
0.4
3.2
0.6
5.6
0.1
0.0 0.0
11.8
%
A glossary of terms can be found on pages 74 and 75
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
13
Henderson Opportunities Trust plc Annual Report 2024
Total return performance over the last 10 years
%
NAV
1
Benchmark
3
Share Price
2
-20
0
20
40
60
80
100
120
140
Oct
2024
Oct
2023
Oct
2022
Oct
2014
Oct
2019
Oct
2020
Oct
2018
Oct
2017
Oct
2016
Oct
2015
Oct
2021
Dividend
4
Pence per share
Compound annual growth rate 7.8%
0
2
4
6
8
10
3.6
3.8
4.0
4.2
5.2
5.4
5.5
6.8
202420232022
2015 2016 2017 2018 2019 2020 2021
7.1
7.1
Financial information
Year ended 31 October
Total
net assets
£’000
Net asset value
4
per ordinary share
4
pence
4
Net revenue return
4
per ordinary share
4
pence
4
2015 81,007 202.5 4.5
2016 79,782 199.4 4.1
2017 101,599 254.0 4.4
2018 94,360 235.9 4.0
2019 91,798 232.4 6.0
2020 82,643 209.3 2.6
2021 128,497 325.4 4.9
2022 92,701 234.7 8.1
2023 81,765 207.0 6.7
2024 92,989 235.5 6.3
1 NAV per ordinary share total return (including dividends reinvested)
2 Share price total return (including dividends reinvested)
3 FTSE All-Share Index
4 Comparative figures have been restated due to the sub-division of each ordinary share of 25p into five ordinary shares of 5p each on 11 March 2024
A glossary of terms can be found on pages 74 and 75 and alternative performance measures can be found on pages 76 and 77
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
Historical record
14
Henderson Opportunities Trust plc Annual Report 2024
Key performance indicators
Measuring our performance
To measure the success of the Company in meeting its objective and to evaluate the performance of the Manager, the Directors
take into account the following key performance indicators (“KPIs”).
The Chairman’s statement and Fund Managers’ report (on pages 3 to 7) and the charts, tables and data on pages 1 and 13
provide information on how the Company has performed against those KPIs, and a glossary of terms and alternative
performance measures is included on pages 74 to 77.
KPI Action
Absolute
performance
The Board reviews, at each of its meetings, the performance of the portfolio, gearing levels, the net asset
value per share and the Company’s share price.
Performance
measured against
the Benchmark
The Board reviews at each of its meetings, the performance of the portfolio as well as the net asset value
and share price for the Company and compares them with the performance of the Company’s Benchmark,
the FTSE All-Share Index.
Performance
against the
Company’s peer
group
The Company is included in the AIC’s UK All Companies Sector, which represents the Company’s peer
group. In addition to comparison against the stated Benchmark, the Board also considers the performance
against the peer group at each Board meeting.
Discount/premium
to the NAV per
share*
The Board monitors the level of the Company’s share price discount/premium to NAV and looks at ways of
managing this. The Board reviews the average discount/premium of the peer group companies in the AIC
UK All Companies Sector.
In accordance with the authority granted at the last AGM, the Company retains the flexibility to repurchase
shares when it sees fit.
The Fund Managers consider whether to use share buybacks to enhance shareholder value. Shares are
only bought back at a price below the prevailing NAV, thereby increasing the NAV for the remaining
shareholders. The Fund Managers would instruct purchases under authority given by the Board asrequired
and in accordance with the authority granted.
The Company publishes its NAV per share figure on a daily basis, through the official newswire of the
London Stock Exchange. This figure is calculated in accordance with the AIC formula and includes current
financial year revenue, the same basis as that calculated for the Financial Statements.
Earnings per
sharegrowth
The Board reviews and compares at each of its meetings the progression of the earnings per share over
the course of the year and uses this information to declare dividends to shareholders.
* Alternative performance measure. Details of alternative performance measures can be found on pages 76 and 77
Henderson Opportunities Trust plc Annual Report 2024
15
Strategic Report
Business
model
Strategy
The purpose of Henderson Opportunities Trust plc (the
“Company”) is to achieve capital growth in excess of the
FTSEAll-Share Index for the Company’s shareholders from
aportfolio of primarily UK investments. This is achieved through
the Company’s operation as an investment company with a
Board of Directors that delegates investment and operational
matters to specialist third-party service providers. The
Manager operates in accordance with the Company’s
Investment Policy following a disciplined process of investment,
controlling costs and using borrowings to enhance returns.
Theirperformance is monitored and challenged by the Board
which retains oversight of the Company’s operations.
The framework of delegation provides a cost-effective
mechanism for achieving the Company’s obligations as an
investment trust under Section 1158/9 of the Corporation Tax
Act 2010, as amended (“Section 1158”).
The Company’s status
The Company is an investment company as defined in Section
833 of the Companies Act 2006 (the “Act”). The Company
operates as an investment trust in accordance with Section
1158. The Company has obtained approval from HM Revenue
& Customs (“HMRC”) of its status as an investment trust under
Section 1158; the Directors are of the opinion that the
Company has conducted its affairs in compliance with Section
1158 since approval was granted and intends to continue to do
so. TheCompany is liable to corporation tax on its net revenue
profits but is exempt from corporation tax on capital gains if it
has complied at all times with Section 1158.
The Company and the Board are governed by the Articles of
Association, amendments to which must be approved by
shareholders by way of a special resolution. TheBoard is
comprised entirely of non-executive directors who are
accountable to the Company’s shareholders. TheCompany is
not a close company.
The Company has a listing in the closed-ended investment
funds category of the FCA’s UK Listing Rules and trades on
the main market of the London Stock Exchange. The
Company must comply with the UK Listing, Prospectus
Regulation and Disclosure Guidance and Transparency Rules
of the FCA. The Company is a member of the Association of
Investment Companies (“AIC”).
Investment Objective
The Company aims to achieve capital growth in excess of
the FTSE All-Share Index from a portfolio of primarily UK
investments.
Investment Policy
Asset allocation
The following investment ranges apply:
Equities: 70% to 100%;
Fixed Income and Cash: 0% to 30%
Stock selection is not constrained by the FTSE All-Share Index
and there are no limits on investment by sector or market
capitalisation. Therefore, the makeup and weighting of the
portfolio will differ materially from the FTSE All-Share Index.
Investment restrictions
There will be at least 60 individual holdings in the portfolio.
No more than 10% of the Company’s gross assets will be
invested in companies outside of the UK.
No single investment will represent more than 10% of gross
assets (at the time of investment).
The Company can, but normally will not, invest up to 15% of
its gross assets in investment companies (including listed
investment trusts).
The Company may invest up to a maximum of 10% of its
gross assets in private securities not quoted on an exchange
(at the time of investment).
Dividend
Income growth is a secondary objective to capital growth.
However, the Company does seek dividend growth over time.
Derivatives
The Company may use financial instruments known as
derivatives for the purpose of efficient portfolio management
while maintaining a level of risk consistent with the risk profile
of the Company.
Gearing
Net gearing (defined as all borrowings less cash balances and
investments in cash funds) is limited by the Board to a
maximum of 25% of the Company’s net assets.
Other restrictions
As noted In the Investment Policy above, it is the Company’s
policy to invest no more than 15% of its gross assets in other
listed closed-ended investment funds. Accordingly, the
Company’s shares are an eligible investment under UK Listing
Rule 11.2.6(R) for other listed closed-ended investment funds.
Business model
Henderson Opportunities Trust plc Annual Report 2024
17
Business model (continued)
Management
The Company is an Alternative Investment Fund
inaccordance with the Alternative Investment Fund Managers
Directive (“AIFMD”).
The Company does not have any employees. The Board has
appointed Janus Henderson Fund Management UK Limited
toact as itsAlternative Investment Fund Manager. The Board
entered into an updated and restated management
agreement with Janus Henderson Fund Management UK
Limited as Manager effective from 25 June 2024. The updates
reflect current regulation and industry standards since the
previous agreement was implemented in July 2014. There
were no changes to terms affecting the relationship with the
Manager. JanusHenderson Fund Management UK Limited
delegates investment management services to Janus
Henderson UK Limited in accordance with that agreement.
Theagreement with JanusHenderson Fund Management UK
Limited is reviewed annually by the Management Engagement
Committee (see page 36), and can be terminated on six
months’ notice. Both entities areauthorised and regulated by
the FCA. References to the Manager within this report refer to
the services provided by Janus Henderson Fund Management
UK Limited and Janus Henderson UK Limited. Both entities
are wholly owned subsidiaries of Janus Henderson Group plc,
referred to as Janus Henderson.
Janus Henderson and its subsidiaries also provide accounting,
corporate secretarial and general administrative services.
Some ofthe administration, accounting and cash management
services arecarried out, on behalf of JanusHenderson,
byBNP Paribas. Melanie Stoner (Fellow ofthe Chartered
Governance Institute) acts as Company Secretary on behalf
ofthe Corporate Secretary, Janus Henderson Secretarial
Services UK Limited.
Fund Managers
The portfolio is managed by James Henderson and Laura Foll.
James was appointed as a joint Fund Manager of the
Company’s portfolio in 2007. He joined Janus Henderson in
1984 and has been involved with investment trusts throughout
his career. He has been the fund manager of Lowland
Investment Company plc since 1990 and has been
responsible for the investment portfolio of The Law Debenture
Corporation plc since 2003. He is also deputy fund manager
of theJanus Henderson UK Equity Income & Growth Fund.
Laura was appointed as a joint Fund Manager of the
Company’s portfolio in September 2018. She joined
JanusHenderson in 2009 as part of the graduate scheme.
During this time, she worked in various teams including fixed
income, performance, marketing and equities. Laura then
became a global analyst in the value and income team and
later an assistant fund manager. In 2013 she became deputy
fund manager of Lowland Investment Company plc and joint
fund manager in November 2016. She was appointed as
co-manager of the Janus Henderson UK Equity Income
&Growth Fund in 2014 and became lead manager of that
fundin September 2020.
Fees
The management agreement provides for the payment of
abase management fee which is calculated and paid
quarterly inarrears. The base management fee is charged
at0.55% of net assets per annum payable quarterly at a
rateof 0.1375% based onnet assets at the end of the
previous quarter.
Performance fee arrangements were removed with effect
from 20 October 2023.
Dividend approach
The Company pays quarterly dividends.
Ongoing charges
Ongoing charges are those expenses of a type which are
likely torecur in the foreseeable future, whether charged to
capital or revenue, and which relate to the operation of the
investment company as a collective fund, excluding the costs
of acquisition ordisposal of investments, financing costs and
gains or losses arising on investments. The ongoing charge is
based on actual costs incurred in the year as being the best
estimate of future costs. TheBoard reviews the ongoing
charges and monitors the expenses incurred by the Company
on a regular basis.
Borrowings
The Company has an unsecured loan facility in place which
allows it to borrow asand when appropriate. £20m(2023:£30m)
isavailable under the facility. Net gearing islimited by the
Board to 25% ofnet assets. Themaximum amount drawn
down in the period under review was £18.0m (2023:£18.2m),
with borrowing costs fortheyear totalling £674,000
(2023:£817,000). £7.0m (2023:£10.2m) of the facility was in
use at the year end. Netgearing at 31October 2024 was 5.3%
(2023:9.6%) of netassetvalue.
Section 172 statement
The Directors refer to section 172 of the Act (“Section 172”)
and the factors for consideration when making decisions.
Inparticular, that the Directors must act in the way they
consider, in good faith, would be most likely to promote
thesuccess of the Company for the benefit of its members
asa whole, and in doing so have regard (amongst other
matters) to:
●
The likely consequences of any decision in the long term;
●
The interests of the Company’s employees (the Company
has no employees);
●
The need to foster the Company’s business relationships
with suppliers, customers and others;
Henderson Opportunities Trust plc Annual Report 2024
18
●
The impact of the Company’s operations on the
community and the environment;
●
The desirability of the Company maintaining a reputation
for high standards of business conduct;
●
The need to act fairly as between members of the Company.
The Board is responsible for approving the Company’s
long-term objectives and commercial strategy and for
promoting the Company’s success. The Board devotes time
in at least one of its meetings each year to reviewing overall
strategy and progress is monitored throughout the year.
TheDirectors’ overarching duty is to promote the success
of the Company for the benefit of investors, with
consideration of stakeholders’ interests, as set out in
Section 172. The Board regards a well governed business
model as essential for the successful delivery of
itsinvestment proposition. The Directors consider the likely
consequences of their decisions in the longer term and how
they have taken wider stakeholders’ needs into account.
The Company manages shareholders’ assets with constant
awareness of the Company’s stakeholders and their
interests. The Board uses a map to support the Directors
inidentifying and understanding the Company’s
stakeholders and fostering theappropriate level and
formofinteraction with them. TheDirectors regard the
Company’s key stakeholders to be the Company’s
shareholders and potential investors, the Manager and
otherkey third-party service providers.
The Board engages reputable third-party suppliers with
established track records to deliver the day-to-day
operations. The most important of these is the Manager,
andin particular the Fund Managers, who are responsible
for the management of the Company’s assets in line with
theInvestment Objective and Investment Policy. TheBoard
maintains a close working relationship with the Manager and
holds it to account for the smooth running of theCompany’s
day-to-day business. The Board retains responsibility for
decisions regarding corporate strategy, corporate
governance, risk andinternal control assessment,
determining the overall limits and restrictions for the portfolio
and in respect of gearing and asset allocation, investment
performance monitoring and setting marketing budgets.
To ensure the chosen service providers continue to deliver
theexpected level of service, the Board receives regular
reporting from them, evaluates the control environments in
place at each service provider and formally assesses their
appointment annually. By doing so the Board seeks to ensure
that the key service providers continue to be appropriately
remunerated to deliver the expected level ofservice.
Business model (continued)
Henderson Opportunities Trust plc Annual Report 2024
19
Business model (continued)
Engagement with key stakeholders
The Company’s key stakeholders are listed below and on the next page with examples of the way the Board and the Company
has interacted with them in the year under review.
Stakeholders Engagement Outcome
Shareholders and
potential investors
The Board is committed to maintaining open channels of
communication with shareholders in a manner which they find most
meaningful. Unlike trading companies, the Board appreciates that
this often takes the form of shareholders meeting with the Fund
Managers rather than members of the Board. The Manager
provides information on the Company, press releases and videos
ofthe Fund Managers on the Company’s website and via LinkedIn.
Feedback from all meetings between the Fund Managers and
shareholders is shared with the Board. The Chairman is available to
meet with shareholders to understand their views on governance
and the Company’s performance where they wish to do so. With
assistance from the Manager, the Chairman seeks meetings with
shareholders who might wish to meet with her.
The annual report and half-year results are circulated to
shareholders and made available on the Company’s website. These
provide shareholders with a clear understanding of the Company’s
portfolio and financial position. This information is supplemented by
the daily calculation and publication of the NAV per share and a
monthly factsheet which is available on the website.
The Fund Managers provide presentations to shareholders and
analysts following the publication of the annual and half year
financial results. TheFund Managers attend the AGM and provide a
presentation onthe Company’s performance and the future
outlook. The Board encourages shareholders to attend
andparticipate in the AGM which is also available to watch live and
shareholders have the opportunity to address questions to the
Chairman ofthe Board, theFund Managers and all Directors.
The Fund Managers promote the Company with the support of the
Manager’s dedicated investment trust sales team and the Board
makes additional spend available to support marketing activities aimed
at raising the profile of the Company among retail investors in the UK.
Clear communication of the
Company’s strategy and
performance against its
objective helps shareholders to
make informed decisions about
their investments.
Close interaction with
shareholders enables the Board
to run the Company in line with
shareholders’ interests as a
whole and for the Company’s
long-term success.
In the event shareholders wish
to raise issues or concerns with
the Directors, they are welcome
to do so at any time by writing
to the Chairman at the
registered office or by email to
itsecretariat@
janushenderson.com.
Correspondence from
shareholders is shared with the
Chairman and the Board. Other
members of the Board are also
available to shareholders if they
have concerns that have not
been addressed through the
normal channels.
Henderson Opportunities Trust plc Annual Report 2024
20
Stakeholders Engagement Outcome
Janus Henderson as
Manager
●
Fund Manager
●
Sales and
marketing
●
Corporate
secretarial
●
Financial reporting
●
Internal controls
functions
●
Internal audit
●
Investment
accounting and
administration
(outsourced by
Janus Henderson
to BNPParibas)
The most important of the Company’s third-party
service providers is the Manager, and in particular
the Fund Managers, who are responsible for the
management of the Company’s assets in line with
the Investment Objective and Investment Policy.
Representatives of the Manager attend Board
meetings, providing the opportunity for the Manager
and the Board to reinforce further their mutual
understanding of what is expected from allparties.
Through receipt of timely and accurate information
(including monthly performance and compliance
reporting against a schedule of investment limits
and restrictions determined by the Board and
Fund Managers) and regular engagement with
representatives of the Manager, the Board is able
to provide timely and constructive feedback to the
Manager in order that the Manager can meet the
Company’s Investment Objective to the best ofits
ability and thereby ensuring that the interests of
the Manager are alsoprotected.
The Board and the Manager operate in a
supportive, co-operative and open
environment, resulting in an effective and
strong working relationship. The Fund
Managers execute the Investment Objective
and deliver returns for shareholders, and the
Board places great value on the Manager’s
internal controls and risk management.
The Board is in regular contact with the
Manager, receiving updates from the Fund
Managers on areas such as portfolio activity
(to manage the volatility in the market and to
take advantage of opportunities), gearing and
the ability to meet the ongoing income
requirements of shareholders.
The Board’s engagement with the Manager is
necessary to evaluate the Company’s portfolio’s
performance against the stated strategy and
benchmark and to understand any risks or
opportunities this may present to the Company.
Other third-party
service providers
As an investment company, all services are
outsourced to third-party service providers.
The Board relies on the Manager to provide the
third-party service providers with the information
required to meet the Company’s requirements.
TheManager maintains and oversees the day-to-
day relationship with third party service providers
and theCompany’s third-party service suppliers’
performance is assessed in detail at least annually
by the Management Engagement Committee.
TheCorporate Secretary and Financial Reporting
Senior Manager for Investment Trusts, in particular,
engage with the key suppliers on a regular and
continuous basis and the Manager provides the
third-party service providers with feedback from
the Board about the day-to-day service provided.
The Audit and Risk Committee meets directly
with representatives of the Depositary and
Custodian on an annual basis and with other
service providers as and when considered
necessary. The Audit and Risk Committee
reviews the internal controls and risk
management systems in place at BNP Paribas,
the Registrar, Depositary and Custodian
predominantly through the assessment of each
supplier’s internal controls and assurance reports.
This regular interaction provides an
environment where day-to-day matters, issues
and business development needs can be dealt
with efficiently and effectively.
Board discussions and decision-making
The Board is aware that not all decisions made by the Board
willresult in a positive outcome for all of the Company’s
stakeholders. The Board takes into consideration the Company’s
purpose, Investment Objective and Investment Policy as well
asthe interests of the Company’s stakeholders when discussing
matters and making decisions. The following are examples
ofthe key discussions held and decisions madeby the Board
during the financial year ended 31October2024:
●
Engagement with Fund Managers
Our engagement with the Fund Managers about
investment process, assessing allocation across the
market segments, stock selection and gearing has
assisted the Board in coming to the conclusion that the
proposed Scheme of Reconstruction is in the best
interests of shareholders as a whole.
●
General Meeting
Directors are required to act in a way they consider to be
for the benefit of the Company’s members as a whole.
Consideration and approval of the resolutions put to
shareholders at the AGM in2024 and to be put to
shareholders in2025, including the dividend payment
(providing income to investors) and the Scheme of
Reconstruction and the recommendation made to
shareholders to vote against theresolutions put to the
Requisitioned General Meeting inFebruary 2025 were
considered by the Directors to be for the benefit of the
Company’s members as a whole.
Business model (continued)
Henderson Opportunities Trust plc Annual Report 2024
21
●
Shareholder information
Through the presentation of the Company’s half-year and
annual results, announcements via the London Stock
Exchange and circulars sent to shareholders and by
meeting with shareholders, the Company has provided
information in order that shareholders and potential
investors are able tomake informed decisions about their
investment in theCompany.
●
The Directors use shareholder feedback and act in a way
they consider to be for the benefit of the Company’s
members as a whole.
Culture
As explained in the Section 172 statement on page 19, the
Directors’ overarching duty is to promote the success of the
Company for the benefit of investors, with consideration
ofstakeholders’ interests.
The Board applies various policies, practices and behaviour
toensure that the Board’s culture is in line with the Company’s
purpose, values and strategy. The Directors promote and
encourage a culture of transparency and honesty between the
Board and the Manager. The Manager is considered by the
Board to be the Company’s most significant third-party
service provider therefore the relationship with key individuals,
in particular the Fund Managers, the Company Secretary,
theHead of Investment Trusts and the Financial Reporting
Senior Manager for Investment Trusts, are paramount tothe
success of the Company. There is continuous engagement
and dialogue between these key individuals and the Directors
between Board meetings (in particular with the Chairman and
Chairman ofthe Audit and Risk Committee). Communication
channels are open and information, ideas andadvice flow
between the Board and the Manager with theaim of delivering
better results for shareholders and other stakeholders and
ultimately driving the Company’s long-term success. The
need to foster, maintain and continually evolve corporate
culture is taken into account when making decisions and is
therefore integral to the Company’s policies and practices.
The Company has a number of policies and procedures in
placeto assist with maintaining a culture of good governance
including those relating to Directors’ conflicts of interest and
Directors’ dealings in the Company’s shares, as well as those
related to bribery and tax evasion. The Board assesses and
monitors compliance with these policies regularly through
Board meetings and the annual evaluation process.
The Board appoints appropriate service providers and
evaluates their service on a regular basis as described on
page 36. The Board considers the culture of theManager
andother service providers through regular reporting and
byreceiving regular presentations from these stakeholders.
TheBoard has been advised that the Manager fosters and
maintains an environment that values the unique talents and
contributions of individuals, and strives to cultivate and
practice inclusiveness for the long-term success of the
business and for the benefit of its own employees and
shareholders. The Board also seeks to control the Company’s
costs, thereby enhancing performance and returns for the
Company’s shareholders (see Ongoing charge on page 18
and Other administrative expenses (see Note 6 on page 62).
Board diversity policy
It is the Company’s aim to have an appropriate level of diversity in
the boardroom. The current Directors are broad in their
experience and skills, bringing knowledge of investment markets,
business, financial services and stakeholder expertise to
discussions on the Company’s business. TheBoard recognises
that having a diverse and inclusive culture is essential to its
long-term success. The Board discusses matters in such a way
as to facilitate a culture of inclusivity among Board members and
encourages active contributions from all Directors. The Directors
regularly consider the leadership needs and specific skills
required to achieve the Company’s Investment Objective.
The Nominations Committee considers diversity when making
recommendations for appointments to the Board, taking into
account gender, social and ethnic backgrounds, cognitive and
personal strengths, and experience. The Board uses search
firms that access talent from wide and diverse pools and
whose values and approach in identifying and proposing
suitable candidates is aligned with the Board’s aims.
The FCA’s UK Listing Rules require companies to report on
whether they have met the following targets on board diversity:
that at least 40% of the individuals on the board are women;
atleast one of the senior positions on the board is held by a
woman; and that at least one individual on the board is from
aminority ethnic background.
At 31 October 2024, three out of the four Directors (75%) were
women. As an investment company with a Board of only
non-executive Directors, the Company has no employees and
therefore does not have senior executive positions, such as
achief executive officer or chief financial officer. Accordingly,
there are no disclosures about executive management
positions to be included.
Given the size of the Company, the Board is small, focused
and experienced. None of the four Directors, as at 31 October
2024, were from a minority ethnic background. The Board’s
prime responsibility is the strength of the Board and its
overriding aim in making any new appointments upon rotation
of Directors is to select the best candidate based on objective
criteria and merit, which it did at the time the current Directors
were selected. When it recruits, the Board requests the
relevant search firm retained provides a diverse list of potential
candidates.
Business model (continued)
Henderson Opportunities Trust plc Annual Report 2024
22
Business model (continued)
The following tables show the breakdown of the Board in
terms of gender and ethnic background:
Gender identity
Number of
Directors
Percentage
of the Board
Number of
senior
positions on
the Board
1
Men 1 25 –
Women 3 75 2
Ethnic diversity
White British or other
White (including
minority white groups) 4 100 2
1 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. However the Board considers that chairing the Board, its
permanent committees and the role of Chairman of the Audit and Risk
Committee are senior positions in an investment company context. The
positions of Chairman of the Board and Chairman of the Audit and Risk
Committee are both women and these individuals consider themselves
“White British or Other White (including minority white groups)”
The information in the tables was provided by individual
Directors in response to a request from the Company.
There have been no changes to the Board or the roles of
theDirectors between 31 October 2024 and the date of
publication of this report.
The Board takes a keen interest in the diversity initiatives in
place at its service providers and in particular, supports and
encourages the Manager’s diversity training and initiatives to
improve any imbalances. These include Janus Henderson’s
gender and ethnicity pay gap analysis, trainee, apprenticeship
and internship programmes, such as the Greenwood Project,
Investment 2020 and #10,000 Black Interns.
Managing our risks
The Board, with the assistance of the Manager, has carried
out a robust assessment of the principal risks and
uncertainties facing the Company, including those that would
threaten its business model, future performance, solvency,
liquidity and reputation. The principal risks and uncertainties
facing the Company relate primarily to investing in the shares
of companies that are listed in the UK, including small
companies. Although the Company invests almost entirely in
securities that are listed on recognised markets, share prices
may move rapidly, whether upwards ordownwards, and it
may not be possible to realise an investment at the
Manager’s assessment of its value. Fallsinthe value of the
Company’s investments can be caused byunexpected
external events. The companies inwhich investments are
made may operate unsuccessfully, or fail entirely, such that
shareholder value is lost. The Company isalso exposed
tothe operational risk that one ormore ofitscontractors or
sub-contractors may not provide the required level of service.
The Board considers regularly the principal and emerging risks
facing theCompany in order to mitigate them as far as
practicable. TheBoard monitors the Manager, its other service
providers and the internal and external environments in which
the Company operates toidentify new and emerging risks.
TheBoard’s policy on risk management has not materially
changed from last year. “Shareholder base and voting on
platforms” was added as a new category. “Decline in popularity
of the investment trust sector and the UK equity market” was
moved from emerging risks to a principal risk. The risk that
shareholders may not approve the proposed Scheme of
Reconstruction has been added as a newcategory of risk.
The Board has drawn up arisk map which identifies the
substantial risks to which the Company is exposed.
TheBoard has also put in place a schedule of investment
limits and restrictions, appropriate to the Company’s
Investment Objective and Investment Policy. These principal
risks fall broadly under the following categories:
Risk Trend Controls and mitigation
Shareholders may not approve the
proposed Scheme of Reconstruction
Having considered the advice of the Company’s
professional advisers the Board has put forward
a proposal for a Scheme of Reconstruction (see
the Chairman’s Statement on page 3 for more
information). The proposals will be voted on by
shareholders at general meetings to be held on
21 February 2025 at 9.00am and 14 March
2025 at 9.30am.
There is a risk that at least 75% of
shareholders voting do not vote in favour
ofthe proposals.
New In the event that the Scheme of Reconstruction is not approved
by shareholders, the Board will consider alternative proposals
for the future of the Company that are in the best interests of
shareholders as a whole.
Henderson Opportunities Trust plc Annual Report 2024
23
Business model (continued)
Risk Trend Controls and mitigation
Decline in popularity of the investment trust
sector and the UK equity market
Interest rate rises and external pressures have
had an impact on the popularity of the investment
trust sector and the UK equity market.
New The Manager, Board and Fund Managers sought ways of
promoting the investment trust sector and the Company’s profile,
including initiatives such as using an external marketing firm to
promote the Company and updating the Company’s website to
provide more information for stakeholders.
Investment activity and strategy
An inappropriate investment strategy (for
example, in terms of asset allocation, stock
selection, failure to anticipate external shocks
or the level of gearing) may lead to a reduction
in NAV and/or underperformance against the
Company’s benchmark and the Company’s
peer group; it may also result in the Company’s
shares trading on a wider discount to NAV.
The Manager provides the Directors with management information
including performance data reports and portfolio analyses on a
monthly basis. The Board monitors the implementation and results
of the investment process with the Fund Managers, who attend all
Board meetings, and reviews regularly data that monitors risk
factors in respect of the portfolio. The Manager operates in
accordance with investment limits and restrictions determined by
the Board; these include limits on the extent to which borrowings
may be used. The Board reviews its investment limits and
restrictions regularly and the Manager confirms its compliance with
them each month. The Board reviews investment strategy at each
Board meeting.
The Board seeks to manage these risks by ensuring
adiversification of investments. The Board has regular meetings
with the Fund Managers to review performance and the extent of
borrowings.
In light of the Company’s longer term NAV and share price
performance, its size, the discount at which its shares track and
the limited liquidity in its shares, the Board decided in November
2024 that shareholder interests would best be served by
proposing a Scheme of Reconstruction (see the Chairman’s
Statement on page 3 for more information).
Shareholder base and voting on platforms
The Company has a large number of retail
shareholders, many of whom hold their shares
via platforms. The Company has no easy way
of communicating directly with these
shareholders or encouraging them to vote at
general meetings. If these shareholders do not
vote, there is a risk that the outcome of any
votes may represent the views of a relatively
small number of shareholders and that the
decision reached may not reflect the views of,
or be in the best interests of, the majority of
the Company’s shareholders
The Manager, Board and Fund Managers regularly consider
shareholder views and look to implement initiatives that
benefitallshareholders. Through general communications in
Company documents they also seek to identify ways of
assistingshareholders with voting through platforms, for
example,by referring shareholders to guidance made
availablebythe Association of Investment Companies and
provided information in relation to how to vote ahead of the
Requisitioned General Meeting held in February 2025.
Financial instruments and the management
of risk
By its nature as an investment trust, the
Company is exposed in varying degrees to
market risk, interest rate risk, liquidity risk,
currency risk and credit and counterparty risk.
An analysis of these financial risks, including liquidity and gearing,
and the Company’s policies for managing them are set out inNote
15 on pages 65 to 69.
Henderson Opportunities Trust plc Annual Report 2024
24
Risk Trend Controls and mitigation
Operational and cyber
Disruption to, or failure of, the Manager’s
accounting, dealing or payment systems or the
Custodian or the Depositary’s records could
prevent the accurate reporting and monitoring
of theCompany’s financial position. The
Company is also exposed to the operational
risk that one or more of its services providers
may not provide the required level of service or
be exposed to the risk of cyber-attack on its
service providers.
The Board monitors the services provided by the Manager and its
other suppliers and receives reports on the key elements in place
to provide effective internal control. During the year the Board
received reports on the Manager’s approach to information
security and cyber attack defence.
Accounting, legal and regulatory
A breach of Section 1158 could lead to a loss
of investment trust status, resulting in capital
gains realised within the portfolio being
subject to corporation tax. A breach of the
FCA’s UK Listing Rules could result in
suspension of the Company’s shares, while a
breach of the Companies Act 2006 could lead
to legal proceedings, or financial or
reputational damage.
The Manager is contracted to provide investment, corporate
secretarial, administration and accounting services through
qualified professionals. TheBoard receives internal controls reports
produced by Janus Henderson on a quarterly basis, which confirm
regulatory compliance.
Failure of Janus Henderson
A failure of the Manager’s business, whether or
not as a result of regulatory failure, cyber risk
or other failure could result in the Manager
being unable to meet its obligations and its
duty of care tothe Company.
The Board meets regularly with representatives of the Manager’s
Investment Management, Risk, Compliance, Internal Audit and
Investment Trust teams and reviews internal control reports from
the Manager on a quarterly basis. The failure of the Manager would
not necessarily lead to aloss of the Company’s assets, however,
and this risk is mitigated by the Company’s ability to change its
investment manager if necessary, subject tothe terms of
itsmanagement agreement.
Details of how the Board monitors the services provided byJanus Henderson and its other suppliers, and the key
elementsdesigned to provide effective internal control, areexplained further in the internal controls section of the Corporate
Governance report on page 35 and the Audit and Risk Committee report on pages 40 and 41.
Emerging risks
In addition to the principal risks facing the Company, the
Board also regularly considers potential emerging risks,
which are defined as potential trends, sudden events or
changing risks which are characterised by a high degree of
uncertainty in terms of the probability of them happening and
the possible effects on the Company. Should an emerging
risk become sufficiently clear, it may be moved to a
substantial risk as was the case with the ‘decline in popularity
of the investment trust sector and the UK equity market’.
The Board has identified the following as potential emerging risks:
●
Demographic change
Increasing financial inequality, lack of knowledge, trend of
passive investment and new trends in social attitudes.
●
Technological change
Artificial intelligence, sector disruption, changes to
existingjob roles, ethical oversight of technological
change, autonomous vehicles, electrification and
healthcare impact.
●
Environmental sustainability
Climate change, decarbonisation, extreme bad weather
events, increasing legislation/political action, resource
scarcity and reputational consequences.
●
Political and economic change
Tax risk (including impact on dividends paid by the
Company to shareholders) and impact on performance
ifthe UK were to remain out of favour.
Business model (continued)
Henderson Opportunities Trust plc Annual Report 2024
25
Business model (continued)
The Company’s emerging risks are macro-economic and
political in nature and the Company has no control over these.
These include ongoing heightened macro-economic
uncertainty from political events such as Russia’s invasion
ofUkraine and the conflict in the Middle East. TheBoard
monitors these emerging risks and, if specific action relating
to the investments, or the Company’s marketing approach
were to arise, the Board would take appropriate action.
Viability statement and going concern
The Directors have assessed the viability of the Company
taking account of the Company’s current position and the
potential impact of the principal risks and uncertainties
documented in this Strategic Report on pages 23 to 25.
The assessment considered the impact and likelihood of
theprincipal risks and uncertainties facing the Company.
Keyareas of focus were the shareholder base and voting on
platforms in the light of the Requisitioned General Meeting,
shareholders not approving the proposed Scheme of
Reconstruction which the Directors believe is in the best
interests of shareholders as a whole, investment strategy and
performance against benchmark, including a consideration of
the risks around asset allocation, stock selection and gearing.
Marketrisk was also assessed in terms of the impact of
severe but plausible scenarios and the effectiveness of the
mitigating controls in place.
The Directors took into account the liquidity of the portfolio
and the borrowings in place when considering the viability of
the Company over the next five years and its ability to meet
liabilities as they fall due. This included consideration of the
duration of the Company’s borrowing facilities and the ability
to renew such facilities, consideration of the impact of rising
interest rates and how a breach of any covenants could
impact the Company’s net asset value and share price.
TheBoard has reviewed three additional model scenarios
which evaluate the impact on the revenue forecast and
reserves. These range from a worst case scenario which
includes a 5% reduction in income and net assets, through to
a scenario where there is no income growth and no reduction
in income or net assets. Increasing dividends to shareholders
could continue under all three scenarios, although the
Company would need to use its capital reserves in some
cases. None of the results of the scenarios used would
therefore threaten the viability of the Company.
The Directors do not expect there to be any significant change
to the principal risks and adequacy of the mitigating controls
in place. Large cap stocks are held as ballast for the portfolio
and for liquidity, and the percentage of the portfolio holding
ofthese stocks generally exceeds the gearing percentage.
The Board actively monitors investment performance and
considers factors such as significant falls in the NAV, ongoing
heightened macro-economic uncertainty from political events
such as Russia’s invasion of Ukraine and the conflict inthe
Middle East. Any recent experience has not materially affected
the long-term viability of the Company. The Board is therefore
confident that significant market collapses would not impact
the Company’s viability. Also, the Directors do not envisage
any change in strategy or objectives or any events that would
prevent the Company from continuing to operate over that
period as the majority of the Company’s assets are liquid,
itscommitments are limited, and, subject to the outcome of
the Scheme (referred to below), the Company intends to
continue to operate as an investment trust. In coming to
thisconclusion, the Board has considered the factors
aforementioned and does not believe that they will have a
long-term impact on the viability of the Company and its ability
to continue in operation, notwithstanding the short-term
uncertainty they have caused in the markets.
The Directors recognise that a circular relating to a Scheme
ofReconstruction has been issued to shareholders. The
Directors currently believe that the Company will continue to
exist for the foreseeable future, and at least for the period of
assessment if the shareholders were not to approve the
Scheme of Reconstruction (subject to the outcome of a
continuation vote that is due to take place at the AGM in
2026). If the Scheme were to be approved, then the Directors
have a reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they fall due
until such date that the Company is put into liquidation and
the Scheme is completed.
Based on this assessment, the Board has a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
nextfive-year period.
Due to the uncertainty arising from the proposed Scheme
ofReconstruction, the Directors have disclosed a material
uncertainty in respect of adopting the going concern basis
ofaccounting in preparing the Financial Statements
(seepage58 for further details).
Approval
The Strategic Report has been approved by the Board.
On behalf of the Board
Wendy Colquhoun
Chairman
12 February 2025
Henderson Opportunities Trust plc Annual Report 2024
26
Our approach to ESG matters
The Company integrates Environmental, Social and
Governance (“ESG”) but does not pursue 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 ofportfolios. ESG
related research is one of many factors considered within the
investment process.
Defining ESG
●
Environmental factors include climate change,
energyefficiency, resource depletion and water and
wastemanagement.
●
Social factors include employee and community
relations,diversity, quality of life, enhancements in
knowledge and advances in supportive technology
forimproved resilience.
●
Governance factors include mitigation of risks such as
bribery and corruption, board diversity, executive pay,
accounting standards and shareholder rights, and
corporate behaviour.
ESG policy
Investment approach and ESG engagement
Responsible Investment is the term used to cover the
Manager’s work on ESG issues in the Company’s investee
companies. It is very wide ranging and all investment
decisions are made with consideration of the ESG context.
In some ESG areas the issues are easily measurable and
considerable progress can be seen.
The governance of many businesses has improved. Board
composition has become more diverse and gender equality is
gradually being tackled by the business community.
Remuneration packages are (broadly) being set with careful
consideration in dialogue with shareholders, and many of the
investee companies within the Company’s portfolio have good
levels of management ownership so shareholders and
management teams are well aligned.
There are, however, some ESG issues that are more
subjective and as a result progress is difficult to monitor.
Theenvironmental area is particularly challenging. We prefer
dialogue with, rather than the exclusion of, companies or
sectors that do not score as highly in environmental screening
so as to try and understand the issues. For example, the
portfolio continues to hold companies with exposure to fossil
fuels. It is our view that in the current stage of the energy
transition there is a need for fossil fuels, particularly lower
carbon emission fuels such as natural gas.
One of the ways an awareness of these issues colours
investment decisions is in the search for companies that
arehelping to provide answers. When viewed in this context,
ESG issues are both a challenge and also potential investment
opportunity. For example, some of the early-stage companies
held within the portfolio are addressing the need for de-
carbonisation through a variety of technologies including solid
state batteries, renewable energy and fuel cells. There are also
companies held within the portfolio where their end products
could have a societal benefit if they become fully
commercialised. For example, companies developing less
invasive surgical tools, or low-cost gene sequencing that would
allow more personalised medicine. Janus Henderson seeks to
protect and enhance value for the Company’s shareholders
through active management, integration of ESG factors into
investment decision making, company engagement and voting.
Voting and the Stewardship Code
The Board believes that voting at general meetings is an
important aspect of corporate stewardship and a means of
signalling shareholder views on board policy, practices and
performance. The Board has chosen to delegate responsibility
tothe Manager for voting the rights attached to the shares held
inthe Company’s portfolio, and the Manager actively votes at
shareholder meetings and engages with companies as part of the
voting process. Voting decisions are guided by the best interests
of the investee companies’ shareholders and made in
consultation with the Fund Managers, who have an in-depth
understanding of the respective companies’ operations. On
occasion, the Manager might make a voting decision following
consultation with the Chairman of the Board. Voting decisions are
taken in keeping with the provisions of the Manager’s Responsible
Investment Policy (see www. janushenderson.com) which sets
out the Manager’s approach to corporate governance and
compliance with the Stewardship Code (see www.frc.org.uk).
TheManager is also asignatory to the Principles for Responsible
Investment (seewww.unpri.org) and an active member of a wide
range of organisations and initiatives that work to promote
ESG integration and responsible investment.
In the year to 31 October 2024, investee companies held
106general meetings and the shares held in the Company’s
portfolio were voted at these meetings. The level of
governance in the companies held in the portfolio is generally
of a high standard which meant support in favour of the
majority of resolutions proposed by management was
warranted and the Company voted with management on the
majority of occasions (1,299 resolutions). However, in respect
of 1.5% of the resolutions proposed, the Fund Managers
believed that support in line with management
recommendation was not warranted so the shares were voted
against management recommendation on 20 resolutions.
During the year the Manager and Fund Managers engaged
with management and non-executives of companies held by
the Company to discuss corporate governance issues and to
help shape their policies on such matters. We go into three
case studies of recent engagements on the next page.
References made to individual securities do not constitute a
recommendation to buy, sell or hold any security, investment
strategy or market sector, and should not be assumed to be
Henderson Opportunities Trust plc Annual Report 2024
27
Our approach to ESG matters (continued)
profitable. Janus Henderson, its affiliated advisor, or its
employees, may have a position in the securities mentioned.
These engagements have taken place either directly via
theFund Management team and/or via the Responsible
Investment & Governance team at Janus Henderson.
Marks & Spencer Group
We engaged with senior management to discuss progress
on supply chain management and specifically on human
rights issues. This was a follow-up meeting to a call we had
in November 2022 to check on progress in increasing
monitoring of tier 2 suppliers. M&S provided excellent detail
on progress made and showed a strong level of pro-active
monitoring of suppliers across both clothing and food.
International Distribution Services
Following news of their takeover approach we engaged
withthe chairman several times to fully understand the
implications of the deal and any concerns among the
relevant parties (for example the views of the regulator, the
government and the trade union). We also worked with the
chairman (alongside the CEO) to better understand what
reform to the universal service obligation could look like,
which in turn helped us to better understand what the
appropriate valuation of the UK business was within the
scope of any takeover offer.
IP Group
We have met several times to discuss strategy.
Weencouraged them to abandon their dividend policy and
said if they really wanted to return money to shareholders it
would be better to buy back shares instead. The reason for
this is that the shares trade on a 40% discount to NAV. This
may seem strange given Henderson Opportunities Trust
plc seeks to offer itsown shareholders a steady income,
but it is important not to be dogmatic and treat every case
individually. IP Group arenot an appropriate vehicle from
which to get regulardividends.
Climate change/the environment
As an investment company, 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 or the Companies
(Directors’ Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018.
The Company itself is also not required to report against the
recommendations of the Task Force on Climate-Related Financial
Disclosures (“TCFD”). Many of these recommendations are
relevant to “trading” companies, buttheCompany acknowledges
that it has a look-through responsibility in assessing how its
investee companies approach ESG matters. Janus Henderson
produces product-level TCFD reports. These reports include
an overview of the climate-related governance, strategy, risk
management, and metrics and targets of Janus Henderson
and its portfolios. Product-level metrics include absolute
carbon emissions, carbon footprint, weighted average
carbonintensity, implied temperature rise and climate
scenarioanalysis (Climate Value at Risk). Janus Henderson’s
TCFD Report specific to the Company is available at
www.hendersonopportunitiestrust.com.
The Fund Managers engage with investee companies on
environmental matters where they arise. The Company’s
indirect impact occurs through the investments it makes.
Janus Henderson as Manager recognises the importance of
managing its operational activities in a sustainable way and
minimising any adverse impact on the environment. In 2021,
Janus Henderson 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, Janus Henderson 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.
In addition to this, Janus Henderson has maintained a
CarbonNeutral
®
certification since 2007 and offsets all its
operational Scope 1, Scope 2 and Scope 3 operational
emissions each year.
Through this process, Janus Henderson has invested in
avariety of offset projects around the world, delivering
financial support to essential renewable energy, forestry
andresource conservation projects that support reductions
in greenhouse gas emissions. All projects Janus Henderson
supports have been classified as ‘additional’ by an
independent third party, meaning they would not happen
without the sale of carbon credits.
Business ethics
As the Company’s operations are delegated to third-party
service providers, the Board seeks assurances, at least
annually, from its suppliers 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 2023. The Company has received
assurances from its main suppliers that they maintain a
zero-tolerance policy towards the provision of illegal services.
Henderson Opportunities Trust plc Annual Report 2024
28
Governance
Wendy Colquhoun
Position: Chairman
Date of appointment: 1 September 2018 (Chairman 11 March 2021)
Relevant skills and experience: Wendy was previously a senior
corporatepartner at international law firm CMS Cameron McKenna
Nabarro Olswang LLP and advised investment trust boards for over
25 years on advisory and transactional matters. She has also
previously held positions at Dickson Minto and Linklaters.
External appointments: Wendy is the senior independent director
for Schroder UK Mid Cap Fund plc and Capital Gearing Trust plc and
a non-executive director of Murray International Trust plc.
Davina Curling
Position: Independent non-executive Director
Date of appointment: 1 November 2019
Relevant skills and experience: Davina has over 25 years of fund
management experience. Davina was managing director and head
ofPan European equities at Russell Investments. Prior to that she
was head of European equities at F&C, ISIS and Royal & SunAlliance.
Davina has also previously held positions at Nikko Capital
Management (UK) and Kleinwort Benson. Davina was a non-
executive director of BlackRock Greater Europe Investment Trust plc
(until December 2023) and Invesco Global Equity Income Trust plc
(until November 2024) and a member of the investment committee
ofSt James’s Place (until December 2024).
External appointments: Davina is currently the senior independent
director for abrdn Asia Focus plc and a non-executive director of
Baillie Gifford European Growth Trust plc.
Board of Directors
Frances Daley
Position: Audit and Risk Committee Chairman
Date of appointment: 18 June 2015
Relevant skills and experience: Frances is a Chartered Accountant
(FCA) with significant financial and commercial experience having
held several senior finance and general management positions in
accountancy, investment banking and corporate sector companies
over the last 30 years.
External appointments: Frances is the chairman of Barings
Emerging EMEA Opportunities PLC and a non-executive director
ofRegional REIT Limited.
Harry Morgan
Position: Independent non-executive Director
Date of appointment: 1 August 2021
Relevant skills and experience: Harry has over 30 years’
experience of investment management for private clients, financial
advisers and charities. Harry was previously a director of investment
management and head of key clients (Scotland) for Tilney and a
non-executive director of Mid Wynd International Investment Trust plc
and the Association of Investment Companies. Harry has also held
senior investment management positions at Adam & Company,
Newton and Edinburgh Fund Managers. He is aFellow of the
Chartered Institute for Securities and Investment, andholds an MBA
from the Edinburgh Business School.
External appointments: Harry is a member of the investment
committees of the Robertson Trust and the National Trust for Scotland.
The Directors appointed to the Board at the date of this Annual Report are:
All Directors are non-executive and independent of Janus Henderson. All are members of the Audit and Risk Committee,
chaired by Frances Daley, and the Insider Committee, Management Engagement Committee and Nominations Committee,
chaired by Wendy Colquhoun.
Henderson Opportunities Trust plc Annual Report 2024
30
Corporate governance report
Corporate governance
The Board is accountable to shareholders for the governance
of the Company’s day-to-day affairs and is pleased to report
on the Company’s governance arrangements and how the
principles of the applicable codes have been applied during
the year under review.
Applicable corporate governance codes
The Company maintains a premium listing on the London
Stock Exchange and is therefore required to report on how
the principles of the 2018 UK Corporate Governance Code
(“UK Code”) issued by the Financial Reporting Council (“FRC”)
have been applied. Being an investment company, a number
of the provisions of the UK Code are not applicable as the
Company has no executive directors or internal operations
and all day-to-day activities areoutsourced to external service
providers. The Board has therefore considered the principles
and provisions of the AICCode of Corporate Governance
(“AIC Code”) issued in February 2019. The AIC Code
addresses the principles and provisions set out in the UK
Code, as well as setting out additional provisions and
recommendations on issues that are of specific relevance to
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.
The Board considers that reporting against the principles
and provisions of the AIC Code, which has been endorsed
by the FRC, provides more relevant information to
shareholders about the Company’s governance
arrangements, and that by reporting against the AIC Code
the Company has met its obligations in relation to the UK
Code and associated disclosure requirements under
paragraph 6.6.6(5) of the UK Listing Rules.
The UK Code is available on the FRC website
(www.frc.org.uk). The AIC Code is available on the
AICwebsite (www.theaic.co.uk) and includes an
explanationof how the AIC Code adapts the UK Code’s
principles and provisions for investment companies.
Statement of compliance
No senior independent director has been appointed;
theChairman of the Audit and Risk Committee leads
theannual evaluation of the Chairman’s performance and
shareholders are invited to raise any concerns with either
theChairman of the Audit and Risk Committee or with any
ofthe other Directors, each of whom has areas of expertise
on which they lead.
TheCompany has no chief executive or other executive
directors and has therefore not reported further in respect
ofthese provisions.
In addition, the Company does not have any internal
operations and therefore does not maintain an internal audit
function. However, the Audit and Risk Committee considers
the need for such a function at least annually (seepages 39
and 40 forfurther information).
As the Company has no employees and has a small Board of
solely non-executive Directors, the Board has not established
a separate Remuneration Committee. The remuneration of
Directors is dealt with by the Board as a whole.
The Company has complied with all other principles and
provisions of the AIC Code throughout the year to
31October2024.
Directors
The Board has set, and each Director has agreed to adopt,
generic terms and conditions of appointment of non-executive
Directors of the Company.
Any shareholder wishing to inspect the terms and conditions
can doso by making a request to the Corporate Secretary at
itsecretariat@janushenderson.com.
Appointment and retirement
The Board may appoint Directors to the Board without
shareholder approval. Any Director so appointed must stand
for appointment bythe shareholders at the next AGM in
accordance with the Articles.
In accordance with the AIC Code, all Directors stand for
re-appointment annually.
The contribution and performance of the Directors seeking
re-appointment was reviewed by the Nominations Committee
at its meeting in November 2024, which recommended their
continuing appointment to the Board.
Under the Articles shareholders may remove aDirector
beforethe end of his or her term by passing a special
resolution ata general meeting. A special resolution is passed
if more than 75% of thevotes cast, in person or by proxy, are
in favour of the resolution. Alternatively, pursuant to section
168(1) of the Companies Act 2006 a company may by
ordinary resolution at a meeting remove a director before the
expiration of his or her period of office.
Tenure
Whilst there is no requirement to implement a formal tenure
policy for Directors (other than the Chairman), it is not
anticipated that any of the Directors would normally serve in
excess of nine years. In exceptional circumstances, which
would be fully explained to shareholders at the time, a one
ortwo year extension might be necessary.
Henderson Opportunities Trust plc Annual Report 2024
31
Corporate governance report (continued)
Frances Daley has been on the Board since June 2015 and
inlight of the Scheme of Reconstruction it is proposed for
continuity purposes that she will remain on the Board until the
date on which the Scheme becomes effective or, if later, the
date on which any alternative strategic proposals for the future
of the Company have been implemented.
Chairman tenure policy
Given the entirely non-executive nature of the Board and as
the Chairman may not be appointed as such at the time of
their initial appointment as a Director, the Chairman’s tenure
may be longer than nine years where this is considered by the
Board to be inthe best interests of the Company. As with all
Directors, thecontinuing appointment of the Chairman is
subject to satisfactory performance evaluation and annual
re-appointment byshareholders and may be further subject
tothe particular circumstances of the Company at the time
heor she intends toretire from the Board. The Directors are
cognisant of the benefits of Board diversity and the regular
refreshment of the Board’s membership and seek to refresh
the Board while retaining a balance of knowledge of the
Company, diversity and the relationship with the
FundManagers.
Directors’ independence
All Directors are non-executive and have a range of other
interests. At theNominations Committee meeting in
November 2024, the Directors reviewed their independence
and confirmed thatall Directors remain wholly independent
ofthe Manager. The Board has determined that all Directors
areindependent incharacter and judgement and that their
individual skills, broadbusiness experience and high degree
of knowledge andunderstanding oftheCompany are ofgreat
benefit toshareholders.
There were no contracts in force during or at the end of the
year in which a Director ofthe Company is or was materially
interested and which is or was significant in relation to the
Company’s business. NoDirector has a contract of service
with the Company and there are no agreements between
theCompany and itsDirectors concerning compensation
forlossof office.
Directors’ conflicts of interest
The Company’s Articles permit the Board to consider and,
ifitsees fit, to authorise situations where a Director has an
interest that conflicts, or may possibly conflict, with the
interests of the Company (“situational conflicts”). The Board
has a formal system in place for Directors to declare
situational conflicts for consideration by those Directors who
have no interest in the matter. In deciding whether to authorise
the situational conflict, the non-conflicted Directors must act
honestly and in good faith in the best interests of the
Company and they may impose limits or conditions when
giving the authorisation, or subsequently, ifthey think this is
appropriate. Any situational conflicts considered, and any
authorisations given, are recorded in theminutes of the
relevant meeting and the register of directors’ interests.
Theprescribed procedures would be followed in deciding
whether, and on what terms, to authorise situational conflicts
and the Board believes that the system it has in place for
reporting and considering situational conflicts continues to
operate effectively. The Chairman has had no relationships
that may have created a conflict between her interests and
those ofthe Company’s shareholders.
Directors’ professional development
When a new Director is appointed he or she attends an
induction seminar which is held by the Manager. Directors are
also provided on a regular basis with key information on the
Company’s policies, regulatory and statutory requirements
and internal controls. Changes affecting Directors’
responsibilities are advised to the Board as they arise.
Directors arealso able to attend external training facilities and
industry seminars at the expense of the Company and each
Director’s individual training requirements are considered as
part of the annual performance evaluation.
Directors’ insurance and indemnification
Directors’ and officers’ liability insurance cover was in place
throughout the financial year and remains inplace at the date
of this report. The Company’s Articles provide, subject to the
provisions of UKlegislation, an indemnity for Directors in
respect of costs which they may incur relating to the defence
of any proceedings brought against them arising from their
positions as Directors, in which they are acquitted or
judgement is given in their favour by the Court.
Henderson Opportunities Trust plc Annual Report 2024
32
Corporate governance report (continued)
Board of Directors
comprises four independent non-executive directors
Chairman: Wendy Colquhoun
Nominations Committee
Chairman: Wendy Colquhoun
Purpose: Ensure the Board has a
balance of skills, experience and
diversity, oversee performance
evaluations of the Board and its
Committees, aformal approach to the
appointment of directors andensure
the maintenance of an effective
framework for succession planning
Audit and Risk Committee
Chairman: Frances Daley
Purpose: Ensure the integrity of the
financial reporting, evaluate the
effectiveness of the systems of internal
control and risk management and
oversee the relationship with the external
auditor
HSBC Bank plc
Depositary and Custodian
J.P. Morgan Cazenove
Corporate Broker
Computershare Investor
Services plc
Registrar
Management Engagement
Committee
Chairman: Wendy Colquhoun
Purpose: Ensure that the performance
of the Manager and other third-party
service providers meet expectations
and consider whether their continuing
appointment is in the interests of
shareholders and their terms of
engagement remain appropriate
Third-party service providers appointed by the Board
Janus Henderson
Fund Managers: James Henderson and Laura Foll
Investment Management, Sales, Marketing,
Corporate Secretary
Alternative Investment Fund Manager:
Janus Henderson Fund Management UK Limited
Janus Henderson has contracted with BNP Paribas
to provide accounting and administration services
The Board’s Committees
The Board has three principal Committees: the Audit and Risk Committee, the Management Engagement Committee and the
NominationsCommittee.
The Board has also constituted an Insider Committee which meets when required to assist the Board in discharging its
responsibilities under the Market Abuse Regulations and the FCA’s UK Listing Rules and Disclosure Guidance and Transparency
Rules. All Directors are members of the Insider Committee, which is chaired by the Chairman of the Board.
The terms of reference for each Committee are kept under regular review by the Board and are available on the Company’s
website www.hendersonopportunitiestrust.com. The reports on the activities of each of the Board’s principal Committees are
setout on pages 36 to 40.
Henderson Opportunities Trust plc Annual Report 2024
33
Corporate governance report (continued)
Board of Directors
The Board comprises four non-executive Directors.
Theirbiographies areincluded on page 30. Those details
demonstrate the breadth ofinvestment, commercial and
professional experience relevant to theirposition as Directors.
All of the currentDirectors served throughout the year.
AllDirectors are resident in the UK.
Role of the Board
The Board is collectively responsible for the success of the
Company. Its role is to provide leadership within a framework
of prudent and effective controls that enables risk to be
assessed and managed. The Board is responsible for setting
the Company’s standards and values and for ensuring that its
obligations to its shareholders and others are understood and
met. The Board sets the Company’s strategic aims (subject to
the Company’s Articles, and to such approval of the
shareholders in general meeting as may be required from time
to time) and ensures that the necessary resources are in place
to enable the Company’s objectives to be met.
The Board meets formally at least five times a year, with
additional Board or Committee meetings arranged when
required. The Directors have regular contact with the Fund
Managers and representatives of the Corporate Secretary
between formal meetings.
The Chairman is responsible for leading the Board and for
ensuring that itcontinues to deal effectively with all aspects
ofits responsibilities. Further detail on the Role of the
Chairman is available on the Company’s website
www.hendersonopportunitiestrust.com.
The Board has a formal schedule of matters specifically
reserved forits decision, which include: strategy and
management; structure and capital; financial reporting and
controls; internal controls and risk management; contracts;
communications and public relations; Board membership
and other appointments; delegation of authority;
remuneration; corporate governance; and policies. The
schedule of matters reservedfor theBoard is available
onthe website www.hendersonopportunitiestrust.com.
The Board is responsible for the approval of annual and half
year results and other public documents and for ensuring that
such documents provide a fair, balanced and understandable
assessment of the Company’s position and prospects.
At each meeting the Directors follow a formal agenda, which
includes a review of the Company’s NAV, shareprice,
discount, financial position, gearing levels, peer group
performance, investment performance, asset allocation and
transactions and any other relevant business matters to
ensure control is maintained over the affairs of the Company.
The Board monitors compliance with the Company’s
Investment Objective and is responsible for setting asset
allocation, investment and gearing limits within which the
Manager has discretion to act, and regularly reviews
investment strategy. The Board receives regular reports from
the Manager on marketing and investor relations.
The Board has adopted a procedure for Directors to take
independent professional advice in thefurtherance oftheir
duties at the expense of the Company. To enable them to
discharge their responsibilities, all Directors have full and
timely access to relevant information.
Board attendance
The table below sets out the number of scheduled Board and
Committee meetings held during the year under review and
the numberof meetings attended by each Director. All
Directors attended the AGM in March 2024.
Board ARC MEC NC
Number of meetings
Wendy Colquhoun 5/5 3/3 1/1 1/1
Davina Curling 5/5 3/3 1/1 1/1
Frances Daley 5/5 3/3 1/1 1/1
Harry Morgan 5/5 3/3 1/1 1/1
ARC: Audit and Risk Committee
MEC: Management Engagement Committee
NC: Nominations Committee
The Insider Committee did not meet during the year.
The Directors and Committees of the Board also met during
the year to undertake business such as the approval of the
Company’s results and dividends and to consider other ad
hoc matters.
Performance evaluation
The Nominations Committee has conducted a review of the
Board’s performance, together withthat ofitsCommittees,
the Chairman and each individual Director for the year under
review. The Nominations Committee met without the
Chairman present to discuss the performance of the
Chairman. Theevaluation of the Board, itsCommittees and
each individual Director was conducted by way of an
evaluation questionnaire. The results of the questionnaires
were supplied to the Chairman who collated the results and
provided a summary to the Board. The Chairman of the Audit
and Risk Committee led the Chairman’s evaluation. It was
concluded that the performance of the Board, its Committees,
the Chairman and each individual Director was satisfactory
and the Board has a good balance of skills and experience.
Inparticular, itis considered that each Director makes a
significant contribution to the affairs of the Company, the
Chairman continues to display effective leadership and
Directors seeking re-appointment at an AGM merit re-
appointment byshareholders.
Henderson Opportunities Trust plc Annual Report 2024
34
Corporate governance report (continued)
Audit, risk and internal control
The Board has established an Audit and Risk Committee,
whose report is on pages 38 to 40. The report explains why
the Company does not have its owninternal audit function,
how the independence and effectiveness of the external
auditor is assessed, and how the Board satisfies itself on the
integrity of the financial statements. The report covers the
process bywhich the Board satisfied itself that the Annual
Report presents a fair, balanced and understandable
assessment of the Company’s position and prospects.
Italso describes risk management procedures, as well as
how the Board oversees the internal control framework and
determines the nature and extent of the principal risks the
Company is willing to take in order to achieve its long-term
strategic objectives.
Relationship with Janus Henderson
The Board has contractually delegated to external third parties
the management of the investment portfolio, the custodial
services (which include the safeguarding of the assets delegated
through the appointment of the Depositary as explained on page
74), the day-to-day accounting and cash management, corporate
secretarial and administration requirements and registration
services. Each of these 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
insofar as they relate to the affairs of the Company.
The Board receives and considers regular reports from the
Manager and ad hoc reports and information are supplied to
the Board as required. In addition, the Chairman is invited to
attend meetings of allthe chairmen of the investment trust
companies managed by Janus Henderson. This provides a
forum to discuss industry matters which are then reported
tothe Board.
The Manager takes decisions as to the purchase and sale of
individual investments. The Manager also ensures that all
Directors receive, in a timely manner, all relevant management,
regulatory and financial information. Representatives of
JanusHenderson attend Board meetings enabling
theDirectors to probe further on matters of concern.
TheDirectors have access to the advice and services of
theCorporate Secretary through its appointed representative
whois responsible to the Board for ensuring that Board and
Committee procedures are followed and that applicable rules
and regulations are complied with. Theproceedings at all
Board and Committee meetings are minuted, ensuring that
any Director’s concerns are recorded. The Board and
theManager operate in a supportive, co-operative and
openenvironment.
The Corporate Secretary, Janus Henderson Secretarial
Services UK Limited, isa subsidiary of Janus Henderson
withits own reporting lines and audited internal controls.
There are processes and controls in place to ensure that
thereis a cleardistinction between Janus Henderson
Secretarial Services UK Limited and Janus Henderson,
particularly whendealing withany conflicts or issues
betweenthe Company and JanusHenderson.
Any correspondence from shareholders addressed to the
Chairman or the Company receivedat JanusHenderson’s
offices is forwarded to the Chairman of the Company in line
with the established procedures in place.
Janus Henderson and BNP Paribas, which acts for
JanusHenderson, have arrangementsin place by which their
staff may, in confidence, raiseconcerns about possible
improprieties in relation tofinancial reporting orothermatters.
Continuing appointment of the Manager
The Board considers the arrangements for the provision of
investment management and other services to the Company
on an ongoing basis. The principal contents of the agreement
with the Manager can be found on pages 18 and 19.
In addition to the monitoring of investment performance at
each Board meeting, the Management Engagement
Committee undertakes an annual review of the Company’s
investment performance over both the short and longer term,
together with the quality of other services provided by the
Manager including corporate secretarial and accounting.
Following the annual review (see Management Engagement
Committee on page 36 for more detail), it is the Directors’
opinion that the continuing appointment of the Manager on
the existing terms is in the best interests of the Company and
the shareholders as awhole.
Henderson Opportunities Trust plc Annual Report 2024
35
Corporate governance report (continued)
Management Engagement Committee
The Management Engagement Committee is responsible
forreviewing the management contract on a regular basis,
ensuring that the terms are fair and reasonable and that its
continuance, given the Company’s performance over both
short and longer terms, is in the best interests of the Company
and its shareholders. It is also responsible for reviewing the
performance and cost effectiveness of the Company’s
otherservice providers.
Membership
All Directors are members of the Management Engagement
Committee, which is chaired by the Chairman of the Board.
Meetings
The Committee meets at least annually, with additional
meetings scheduled when required.
Role and responsibilities
In discharging its duties over the course of the year, the
Committee considered:
●
the investment performance of the Company, taking
account of the benchmark and performance of competitors
in the AIC peer group, the share price total return, NAV
total return, dividend growth and dividend yield;
●
the quality and experience of the team involved in
managing all aspects of the Company’s business;
●
the fee structures of its competitors in the AIC peer
groupand other Janus Henderson managed
investmenttrusts;
●
the key clauses of the management agreement, how the
Manager had fulfilled these and whether these continued
to be appropriate; and
●
the performance and fees of the Company’s other
third-party service providers, including the Broker,
Depositary, Custodian, Registrar, research providers,
auditors, legal counsel and the Company’s accountants.
Continuing appointment of the Manager
Following completion of its annual review of the Manager in
September 2024, the Committee concluded that the
continued appointment of the Manager remained in the best
interests of the Company and the shareholders, andtherefore
recommended to the Board the continued appointment of
Janus Henderson. Moredetail can be found on page 36.
Committee evaluation
The activities of the Management Engagement Committee
were considered as part of the Board appraisal process.
Nominations Committee
The Nominations Committee is responsible for Board succession
planning and tenure policy, the performance of the Board as a
whole and the Board Committees and any recommendation to
the Board on theappointment of new Directors through an
established formal procedure.
Membership
The Committee is chaired by the Chairman of the Board, except
when the Chairman’s performance or successor isbeing
considered. All Directors are members of the Committee; the
Board believes that this is appropriate as theBoard comprises
only four directors, and to lose the contribution of any Director to
the Committee’s deliberations would not be in the best interests
of shareholders.
Meetings
The Committee meets at least annually, with additional
meetings scheduled when required.
Role and responsibilities
In discharging its duties over the course of the year, the
Committee considered:
●
the composition of the Board and each of its Committees,
taking account of the skills, experience and knowledge of
each Director, and the contribution of the Directors to the
success of the Company (see also Board diversity policy
on pages 22 and 23);
●
the outcome of the Board performance evaluation with
aview as to whether adjustments should be made to the
number of Directors or knowledge and skills represented
on the Board;
●
the use of an independent external facilitator for the Board
evaluation, concluding that it was not necessary for the
year under review;
●
the tenure of each of the Directors, giving consideration
asto whether the Board retained a sufficient balance of
tenure without becoming complacent;
●
the independence of the Directors taking account of the
Directors’ other commitments, in line with the guidelines
established by the AIC Code;
●
the time commitment of the Directors, in the context of
their other business commitments and appointments,
andwhether thishadbeen sufficient over the course of
the year;
●
succession planning for appointments and the
recommendations of the AIC Code in respect of the
lengthof service ofDirectors and the Chairman; and
●
the performance and contribution of the individual Directors.
Henderson Opportunities Trust plc Annual Report 2024
36
Corporate governance report (continued)
Following completion of its reviews, the Committee
concludedthat the Board continued to operate effectively.
NoDirector was considered to be “overboarded”.
When considering succession planning and tenure policy,
theNominations Committee bears in mind the balance of
skills, knowledge, experience, gender and diversity of
Directors, the achievement of the Company’s Investment
Objective and compliance with the Company’s Articles and
the AIC Code. Individual performance and the contribution
ofeach Director remain a key element of theCompany’s
approach in making determinations on tenure.
The Nominations Committee considers diversity as part of the
annual performance evaluation and it is considered that there
is a broad range of backgrounds, and that each Director
brings different qualities to the Board and its discussions.
Given the small size of the Board, it is not considered
appropriate for the Company to have set targets for gender
diversity; candidates are assessed in relation to the relevant
needs of the Company at the time of appointment.
In all the Committee’s activities there will be no discrimination
on the grounds of gender, race, ethnicity, religion, sexual
orientation, age or physical ability.
The Company may use external agencies if recruitment
becomes necessary. No such agency was used during the
year ended 31 October 2024.
The Nominations Committee also reviews any Directors
seeking appointment or re-appointment and makes
recommendations to the Board as to whether this is
appropriate. Recommendation is not automatic and will
followa process of evaluation of each Director’s performance
and consideration of the Director’s independence.
TheNominations Committee also takes into account the
mixof skills and experience of the current Board members.
TheCommittee considers the time commitment of the
Directors including other business commitments and
appointments. Having considered the performance of
individual Directors, theCommittee recommended to the
Board that it should support the re-appointment of the
Directors.
The Nominations Committee meets in December each
yeartocarry out its annual review of the Board and its
Committees. The results of the performance evaluation
aredetailed on page 34.
Committee evaluation
The activities of the Nominations Committee were considered
as part of the Board appraisal process.
Henderson Opportunities Trust plc Annual Report 2024
37
The Audit and Risk Committee is responsible for ensuring
the integrity of the Company’s financial reporting, evaluating
the effectiveness of the systems of internal control and risk
management and overseeing the relationship with the
externalauditor.
Composition
The Audit and Risk Committee comprises all Directors and
ischaired by Frances Daley, who is a Chartered Accountant.
Theother Audit and Risk Committee members have a
combination of financial, investment and other experience
gained throughout their careers and the Board is satisfied that
at least one of the Audit and Risk Committee members has
recent and relevant financial experience. TheAudit and Risk
Committee as a whole is considered to have competence
relevant to the financial services sector. The biographies of the
Audit and Risk Committee members are shown on page 30.
All members of the Audit and Risk Committee are
independent. The Board believes that it is appropriate for the
Chairman of the Board tobe a member of the Audit and Risk
Committee. This is because the Board comprises only four
directors, and to losethe Chairman’s contribution to the Audit
and Risk Committee’s deliberations would not be in the best
interests of shareholders, given her experience and expertise.
The Audit and Risk Committee will monitor the situation and
take into account shareholder views on the matter.
Meetings
The Audit and Risk Committee met formally three times during
the year under review: in advance of the publication of both the
annual and the half year results and on one other occasion
with an agenda that was focused on its broader
responsibilities. TheCompany’s auditor is invited to attend
meetings as necessary. Representatives of the Manager
(including representatives of the Operational Risk, Internal
Audit and Business Resilience functions, and the Chief
Information Security Officer), BNPParibas and the Depositary/
Custodian may also be invited.
Role and responsibilities
The role of the Audit and Risk Committee is to assist the
Board in applying the financial reporting and internal controls
and to maintain an appropriate relationship with theauditor.
In the year under review the main duties undertaken were:
●
consideration of the appropriateness of the Company’s
accounting policies and of the quality and effectiveness of
the accounting records and management information
maintained on behalf of the Company, relying on meetings
with and reports from JanusHenderson;
●
a review of the half year results and the Annual Report,
including the disclosures made therein in relation to internal
controls and risk management, viability, going concern and
related parties and consideration of whether the report is
fair, balanced and understandable and provides the
information necessary for shareholders toassess the
Company’s position and performance, business model,
strategy and continued operation (including advising the
Board on whether the Company is able to meet its liabilities
as they fall due) in order to make recommendations to the
Board. In assessing whether the report is fair, balanced and
understandable, each Director reviewed the disclosures
made, applying their respective knowledge and expertise.
The internal controls over financial reporting were also
considered, together with feedback from the Company’s
auditor, the Manager and the Corporate Secretary;
●
consideration of the valuation of the Company’s
unquotedand nil value investments for recommendation
tothe Board;
●
consideration of the appropriate level of dividend to be
paid bytheCompany for recommendation to the Board;
●
consideration of the internal controls in place at
JanusHenderson and the Company’s other principal
third-party service providers;
●
consideration of Janus Henderson’s policies in relation to
Information Security and Business Resilience, meeting
with representatives of Janus Henderson’s Internal Audit,
Information Security and Risk departments periodically;
●
consideration of the key risks faced by the Company, risk
management systems in place and the Company’s risk map;
●
consideration of the Company’s Anti-Bribery Policy and the
policies and procedures in place to prevent tax evasion;
●
annual consideration of whether there is a need for an
internal audit function;
●
consideration of the appointment of the auditor, the
auditor’s independence, objectivity, effectiveness, provision
of any non-audit services and tenure of appointment;
●
consideration of the audit plan, including the principal
areas offocus;
●
consideration of the nature, scope and cost of the external
audit and the findings therefrom;
●
consideration of Janus Henderson’s whistleblowing
policyfor its staff to raise concerns about possible
improprieties, including in relation to the Company,
inconfidence;
●
consideration of the management fee calculations; and
●
consideration of the annual confirmation from the
Company’s Depositary in respect of the safe-keeping
ofthe Company’s assets.
Committee evaluation
The Committee’s responsibilities are set out in formal termsof
reference which are reviewed at least annually. The Committee
formally reports to the Board after each of itsmeetings and
the Committee’s activities were considered as part of the
Board appraisal process.
Audit and Risk Committee report
Henderson Opportunities Trust plc Annual Report 2024
38
Annual report for the year ended 31October 2024
In relation to the Annual Report for the year ended 31 October 2024 the following significant issues were considered by the
Auditand Risk Committee:
Significant issue How the issue was addressed
Valuation and ownership of
the Company’s investments
Actively traded investments are valued using stock exchange prices provided by third
party pricing vendors. Ownership of listed investments is verified by reconciliation to the
Custodian’s records and the Directors have received quarterly reports and an annual
confirmation from the Depositary who has responsibility foroverseeing operations of
theCompany, including verification of ownership and valuation.
Recognition of income Income received is accounted for in line with the Company’s accounting policies, as set
out on page 59, and is reviewed by the Committee.
Compliance with Section 1158 of
the Corporation Tax Act 2010
The Committee regularly considers the controls in place to ensure that the regulations
for ensuring investment trust status are observed at all times, receiving supporting
documentation from Janus Henderson and BNP Paribas.
Maintaining internal controls The Committee receives regular reports on internal controls from Janus Henderson and
itsdelegates and has access to the relevant personnel of Janus Henderson who have
aresponsibility for risk management and internal audit. The assurance report for one of
the Company’s service providers was qualified by their service auditor. The Committee
reviewed the instances giving rise to the qualification and received confirmation that the
exceptions identified had no impact on the Company.
Material Uncertainty Related
toGoing Concern
In light of the proposed Scheme of Reconstruction, the Committee considered the description
for the Company’s viability statement and going concern, as set out on page 26.
The Committee is satisfied that the annual report for the year
ended 31 October 2024, taken as a whole, is fair, balanced
and understandable and provides the information necessary
for shareholders to assess the Company’s performance,
business model and strategy.
Internal control and risk management
The Board has overall responsibility for the Company’s system
of internal control and for reviewing its effectiveness. The Audit
and Risk Committee supports the Board in the continuous
monitoring of the internal control and risk management
framework (see Managing our risks on pages 23to 25).
The Board has established an ongoing process for identifying,
evaluating and managing the principal and new or emerging risks
faced by the Company. The process accords with the FRC’s UK
Corporate Governance Code. The system was in operation
throughout theperiod and up to the date of this report.
Thesystem is designed to meet the specific risks faced by the
Company andtakes account of the nature of the Company’s
reliance onits 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 at each meeting;
●
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;
●
the contractual agreements with the Manager and other
third-party service providers. The Board reviews
performance levels and adherence to relevant provisions
of the agreements on a regular basis through reports
received and the Management Engagement Committee
conducts a formal evaluation of the overall level of service
provided at least annually (see Management Engagement
Committee on page 36);
●
the review of controls at the Manager and other
third-party service providers. 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 Board has reviewed the Company’s system of internal
controls for the year ended 31 October 2024. During the course
of its review the Board has not identified or been advised of any
failings or weaknesses relating to the Company’s portfolio that
have been 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.
Audit and Risk Committee report (continued)
Henderson Opportunities Trust plc Annual Report 2024
39
The Company is an investment company, has no employees and
delegates all executive activities to third-party service providers,
principally among them, the Manager, Janus Henderson.
The Board places reliance on the Company’s framework
ofinternal control and the Audit and Risk Committee’s view
onreporting received from specific second and third line
ofdefence teams at the Manager.
The Manager’s Operational Risk team supports the Audit and
Risk Committee in considering the independently audited
reports on the effectiveness of internal controls in place at
theCompany’s third-party service providers. The Manager’s
Internal Audit department provides regular reporting to the
Board on the operations at the Manager and presents at least
annually to the Audit and Risk Committee. The Board has
therefore concluded that it is not necessary at the present
timefor the Company to have its own internal audit function.
Auditor appointment and tenure
Regulations currently in force 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
an audit tender process in 2017 which led to the appointment of
BDO LLP (“BDO”) for the statutory audit for the financial year
ended 31 October 2018 and the audits since that date.
The auditor is required to rotate partners every five years. Thisis
the second year that the current audit partner has been inplace.
Auditor review and independence
The Committee monitors the auditor’s objectivity and
independence through the approval of a policy regulating the
non-audit services that may be provided by the auditor to the
Company, assessing the appropriateness of audit fees paid and
by reviewing the information and assurances provided by the
auditor on their compliance with the relevant ethical standards.
BDO confirmed that all its partners and staff involved with the
audit were independent of any links to theCompany, and that
these individuals had complied withtheir ethics and
independence policies and procedures which are fully
consistent with the FRC’s Ethical Standards.
Non-audit services policy
The Audit and Risk Committee has approved, and keeps
under regular review, the policy on the provision of non-audit
services by theauditor. The Audit and Risk Committee has
determined that the statutory auditor will not be engaged to
provide any non-audit services without the approval of the
Audit and Risk Committee. The statutory auditor is not
pre-approved to provide any non-audit services. The Audit
and Risk Committee may approve the provision of non-audit
services if they consider such services to be:
●
relevant to the statutory audit work;
●
more efficiently provided by the statutory audit firm than
bya third party; and
●
at low risk of impairing the independence, objectivity and
effectiveness of the audit.
The Audit and Risk Committee will refer to the Board any
engagement with a cost or potential cost greater than £10,000.
All engagements for non-audit services will be determined on a
case-by-case basis. In addition, the provision of any non-audit
services by the auditors is not permitted to exceed 70% of the
average annual statutory audit fee for the three consecutive financial
periods preceding the financial period to which the cap applies.
No non-audit services have been provided by BDO since their
appointment.
Effectiveness and quality of the
external audit
The auditors attended one Committee meeting in the year,
when the Committee considered the annual results.
Thisincluded a review of BDO’s policies and procedures,
including an assessment of their quality assurance procedures
and independence, which the Committee concluded were
satisfactory. The Audit and Risk Committee has the
opportunity to discuss the audit process with the auditor
without representatives of the Manager present.
The Committee considers the effectiveness and quality of
theaudit process after each audit including how the auditor
demonstrated professional scepticism and challenge of
management’s assumptions, where necessary. Following
review of the plan for the audit for the year ended 31 October
2024 the Audit and Risk Committee Chairman agreed that the
auditors should also focus on the material uncertainty related
to going concern. TheCommittee reviewed and discussed the
findings of the FRC’s recent 2024 Audit Quality Report on the
quality of audits performed by BDO LLP and has satisfied
itself that none of the shortcomings as identified in the Audit
Quality Report were materially relevant to the audit of the
Company.
The Audit and Risk Committee remained satisfied with the
performance of BDO and the effectiveness of the audit for
theyear ended 31 October 2024 andrecommended their
continuing appointment to the Board. Aresolution to
re-appoint BDO as statutory auditor will be put shareholders
atthe next AGM (which will be convened in the event that
shareholders do not approve the Scheme of Reconstruction
and it does not become effective (see Chairman’s statement
on page 4 for more information)).
Fees
Fees paid or payable to the auditor are detailed in Note 6 on
page 62.
Frances Daley
Audit and Risk Committee Chairman
12 February 2025
Audit and Risk Committee report (continued)
Henderson Opportunities Trust plc Annual Report 2024
40
Directors’ remuneration report
Annual statement
As Chairman, Wendy Colquhoun reports that following an annual
review of fees in June 2024, Directors’ fees were increased with
effect from 1 July 2024 to £38,500 for the Chairman, £33,500 for
the Audit and Risk Committee Chairman and £27,500 for other
Directors. When making the decision to increase remuneration
the Directors had reviewed the fees paid to the boards of
directors of other comparable investment trust companies
and considered independent research.
The Directors consider a relatively small but focused Board to
be appropriate given the size of the Company and since the
conclusion of the AGM in March 2022 there have been four
Directors on the Board. The Company’s Articles of Association
state that the aggregate remuneration of the Directors may not
exceed £165,000 per annum.
As required by Section 439 of the Act, an ordinary resolution
to approve the Directors’ remuneration report will be proposed
at the next AGM (which will be convened in the event that
shareholders do not approve the Scheme of Reconstruction
and it does not become effective (see Chairman’s statement
on page 4 for more information). Thevote is advisory.
The Company’s remuneration policy was last approved by
shareholders at the AGM in 2023. Other than the change
tothe increase in the aggregate fee limit to £165,000, as
approved by shareholders in March 2024, there have been no
changes to the policy since March 2023. No changes to the
policy are proposed and there will be no significant change in
the way that the remuneration policy willbe implemented.
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.
Report on implementation
This report is submitted in accordance with Schedule 8
ofTheLarge and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 as amended
(the“Regulations”). Thereport also meets the relevant
requirements of the Act and the UK Listing Rules ofthe FCA
and describes how the Board has applied the principles
relating toDirectors’ remuneration.
The Board may amend the level of remuneration paid to
individual Directors within the parameters of the
remuneration policy.
The Board has agreed that the Directors can currently claim
expenses (see Remuneration Policy for more detail) up to
£500 per Director per Board or other meeting in respect of
travel and accommodation expenses. The cap on expenses
was increased from £250 to £500 in September 2024 due to
the significant rise in travel and accommodation costs and in
order not to disincentivise Directors from serving on the
Board, whilst ensuring that costs are monitored appropriately.
The Company’s auditor is required to report on certain
information contained within this report; where information
setout has been audited it is indicated as such.
All Directors are non-executive and the Company has no
chiefexecutive officer or employees; therefore some of the
reporting requirements contained in the Regulations are not
applicable and have not been reported on, including the
requirement for a future policy table and an illustrative
representation of the level of remuneration that could be
received by each individual Director. It is believed that all
relevant information is disclosed within this report in an
appropriate format.
The Board as a whole considers the Directors’ remuneration.
TheBoard has not appointed a remuneration committee to
consider such matters. The Board has not been provided
withadvice or servicesby any person in respect of its
consideration of the Directors’ remuneration (although the
Directors review annually the fees paid todirectors of other
comparable investment trustcompanies).
Indetermining the remuneration policy, the Board takes into
account all factors which it deems necessary including
relevant legal and regulatory requirements, the AIC Code
andwhether the policy supports the Company’s success.
Remuneration policy
Directors are remunerated in the form of fees, payable
quarterly in arrears. The Company’s Articles limit the fees
payable to the Directors in aggregate to £165,000 per annum.
Subject to the overall limit, the Company’s policy is that the
fees payable to the Directors should reflect the time spent by
the Board on the Company’s affairs and the responsibilities
borne by the Directors and should be sufficient to promote
thelong-term success of theCompany.
All Directors, including any new appointments to the Board,
are paid at the same rate, apart from the Chairman of the
Board and the Chairman of the Audit and Risk Committee
who are paida higher fee in recognition of their additional
responsibilities. The policy is to review fee rates annually,
although such review will not necessarily result in any change
to the rates, and account is taken of fees paid to the directors
of other investment trust companies.
Directors are authorised to claim reasonable expenses from
the Company in relation to the performance of their duties.
No Director has a service contract with the Company.
Directors’ appointments may be terminated at any time by
written notice with nocompensation payable.
No Director is eligible to receive bonuses, pension benefits,
share options or other benefits and no long-term incentive
schemes are inplace.
Henderson Opportunities Trust plc Annual Report 2024
41
Directors’ remuneration report (continued)
Directors’ interests in shares (audited)
The interests of the Directors in the ordinary shares of the
Company at the beginning and end of the financial year are
shown in the table below.
Ordinary shares of 5p
31 October 2024 1 November 2023*
Wendy Colquhoun 10,000 10,000
Davina Curling 4,000 4,000
Frances Daley 10,000 10,000
Harry Morgan 10,492 10,185
* Comparative figures have been restated due to the sub-division of each ordinary
share of 25p into five ordinary shares of 5p each on 11 March 2024
There have been nochanges to the Directors’ holdingsin the
period 1November 2024 to the date of this Annual Report.
In accordance with the Company’s Articles no Director is
required to hold any shares in the Company by way of
qualification.
Directors’ remuneration (audited)
The remuneration paid to the Directors who served during theyears ended 31 October 2024 and 31 October 2023 was
asfollows:
Year ended
31 October 2024
Total salary
and fees
£
Year ended
31 October 2023
Total salary
and fees
£
Year ended
31 October 2024
Expenses and
taxable benefits
£
Year ended
31 October 2023
Expenses and
taxable benefits
£
Year ended
31 October 2024
Total
£
Year ended
31 October 2023
Total
£
Wendy Colquhoun¹ 37,501 35,868 1,733 1,931 39,234 37,799
Davina Curling 26,168 24,635 384 369 26,552 25,004
Frances Daley² 32,501 30,535 – – 32,501 30,535
Harry Morgan 26,168 24,634 216 286 26,384 24,920
Total 122,338 115,672 2,333 2,586 124,671 118,258
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 Chairman and Highest Paid Director
2 Audit and Risk Committee Chairman
For the years ended 31 October 2024 and 31 October 2023, the fees paid to Directors were:
Period
Chairman
(per annum)
Audit and Risk
Committee
Chairman
(per annum)
Directors
(per annum)
1 July 2022 to 30 June 2023 £35,300 £29,800 £24,200
1 July 2023 to 30 June 2024 £37,000 £32,000 £25,500
from 1 July 2024 £38,500 £33,500 £27,500
Henderson Opportunities Trust plc Annual Report 2024
42
Directors’ remuneration report (continued)
Relative importance of spend on pay
Annual percentage change in Directors’ remuneration
The table below sets out the annual percentage change in fees (excluding expenses) for each Director who served during the
year ended 31October2024:
Year to
31October
2024
%
Year to
31 October
2023
%
Year to
31 October
2022
%
Year to
31 October
2021
%
Year to
31 October
2020
%
Wendy Colquhoun
1
4.6 8.1 23.5 34.3 0.0
Davina Curling 6.2 8.4 10.0 3.3 n/a
2
Frances Daley 6.4 9.1 10.0 3.4 0.0
Harry Morgan 6.2 8.4 n/a
2
n/a
2
n/a
2
1 Became Chairman on 11 March 2021
2 Percentages not calculated as joined the Board during the previous year
Expenditure by the Company on remuneration and distributions to shareholders
The table below compares the total level of remuneration paid to Directors to the distributions made to shareholders in each year.
There were no share buybacks during the year ended 31 October 2024. There were no other significant distributions, payments or
other uses of the Company’s net return or cash flow deemed to assist in the understanding of the relative importance of spend on pay.
Year ended
31 October
2024
Year ended
31 October
2023 Change
£ £ £ %
Total remuneration paid to Directors¹ 124,671 118,258 6,413 5.4
Ordinary dividend paid during the year 2,803,923 2,764,431 39,492 1.4
1 Amounts paid will fluctuate due to the number of Directors in any one year
Performance
The graph below compares the mid-market price of the
Company’s ordinary shares over the ten year period ended
31October 2024 with the return from the benchmark, the
FTSE All-Share Index, over the same period.
0
50
100
150
200
250
£
Henderson Opportunities Trust plc share price total return, assuming
the investment of £100 on 31 October 2014 and the reinvestment of
all dividends (excluding dealing expenses)
(source: Morningstar Direct)
FTSE All-Share Index total return, assuming the notional investment
of £100 on 31 October 2014 and the reinvestment of all income
(excluding dealing expenses) (source: Morningstar Direct)
Oct
2024
Oct
2023
Oct
2021
Oct
2020
Oct
2019
Oct
2018
Oct
2017
Oct
2016
Oct
2015
Oct
2014
Oct
2022
Statement of voting at AGM
At the 2024 AGM 1,788,874 votes (98.90%) were received in
favour of theresolution seeking approval of the Directors’
Remuneration Report, 19,838 (1.10%) were against and
12,047 were withheld. Inrelation to the approval of the
Remuneration Policy, last voted on at the 2023 AGM,
2,032,720 votes (99.34%) were infavour of the resolution,
13,506 (0.66%) were against and 35,461 were withheld.
Allpercentages of votes exclude votes withheld.
Approval
The Directors’ remuneration report has been approved by
theBoard.
On behalf of the Board
Wendy Colquhoun
Chairman
12 February 2025
Henderson Opportunities Trust plc Annual Report 2024
43
The Directors present the audited Financial Statements of
Henderson Opportunities Trust plc (the “Company”) and their
report for the year from 1 November 2023 to 31October
2024. The Company (a public limited company registered
anddomiciled in England & Wales with company registration
number 01940906) was active throughout the year under
review and was not dormant.
The corporate governance statement (see pages 31 to 43)
and viability statement and going concern (see page 26)
formpart of the Directors’ report.
Directors
Details of the Directors and their appointments can be
found on page 30. All Directors served throughout the
period under review.
Share capital
At the AGM in March 2024, shareholders approved the
sub-division of each ordinary share of 25p each into 5 new
ordinary shares of 5p each. The Company’s share capital
currently comprises ordinary shares with a nominal value of
5p each. The voting rights of the shares on a poll are one vote
for every share held. There are no restrictions on the transfer
of the Company’s ordinary shares or voting rights, no shares
which carry specific rights with regard to the control of the
Company and no agreement which the Company is party to
that affects its control following a takeover bid. To the extent
that they exist, the revenue profits of the Company (including
accumulated revenue reserves and capital reserves) are
available for distribution by way of dividends to the holders of
the ordinary 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
ordinary shares.
At 31 October 2023 and 31 October 2024 there were
40,004,290
1
ordinary shares in issue (of which 512,415
1
were
held in treasury). Noshares were issued (outside of the shares
issued in relation to the share split) or bought back during the
year or inthe period from 1November 2024 to 12 February
2025. Shares in treasury do not carry voting rights, therefore,
as at 31October 2024 and 12 February 2025 the number of
shares inissue with voting rights was 39,491,875.
The Directors seek annual authority from shareholders to allot
new ordinary shares, to disapply pre-emption rights of existing
shareholders and to buyback ordinary shares for cancellation
or to be held in treasury. At the AGM held in March 2024 the
Directors were granted authority to allot relevant securities up
to an aggregate nominal amount of £197,459 and buyback
5,919,832 shares (being 10% and 14.99% respectively of the
issued ordinary share capital, excluding treasury shares, as at
7March 2024). No shares have been issued or bought back
under these authorities. These authorities will expire on
6June 2025 or at the conclusion of the 2025 AGM, if the
Company remains in existence and an AGM is duly convened.
TheDirectors would intend to renew these authorities subject
to shareholder approval.
Fund Managers’ interests
James Henderson has a beneficial interest in 429,750
(2023:429,750
1
) ordinary shares. Laura Foll has a beneficial
interestin 10,810 (2023: 10,810
1
)ordinary shares.
Five largest shareholders
As at 31 October 2024 the Company’s five largest
shareholders were:
% of
voting rights
Hargreaves Lansdown 12.5
Interactive Investor 12.2
Halifax Share Dealing 11.1
Cazenove Capital Management 6.1
Janus Henderson 5.7
Source: RD:IR
Holdings in the Company’s shares
Declarations of interests in the voting rights of the Company
as at 31October 2024 in accordance with the Disclosure
Guidance and Transparency Rules were as follows:
% of
voting rights
Janus Henderson 5.7
Saba Capital Management L.P. 4.9
2
Declarations of interests in the voting rights of the Company
as at 12 February 2025 in accordance with the Disclosure
Guidance and Transparency Rules were as follows:
% of
voting rights
Jefferies Financial Group Inc. 0.5
3
Janus Henderson 5.7
Saba Capital Management L.P. 29.1
Directors’ report
1 Comparative figures have been restated due to the sub-division of each ordinary share of 25p into five ordinary shares of 5p each on 11 March 2024
2 With an additional 11.7% held through economically equivalent swaps
3 With an additional 4.1% held through economically equivalent swaps
Henderson Opportunities Trust plc Annual Report 2024
44
Directors’ report (continued)
Related party transactions
The Company’s transactions with related parties in the year
were with its Directors and the Manager. There have been no
material transactions between the Company and its Directors
during the year and the only amounts paid to them were in
respect of expenses and remuneration for which there were
no outstanding amounts payable at the year end. Directors’
shareholdings are disclosed on page 42.
In relation to the provision of services by the Manager, other
than fees payable by the Company in the ordinary course of
business andthe facilitation of marketing activities with third
parties, there have been 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 atthe year
end, are given in Note 21 on page 71.
Dividend
See Note 10 on pages 63 and 64 to the Financial Statements
which sets out details relating to the dividends paid on the
ordinary shares for the year ended 31October 2024.
Energy and carbon reporting
Details of the Company’s disclosures with regard to energy
and carbon reporting can be found on pages 27 and 28.
Post balance sheet events and
futuredevelopments
Details of the post balance sheet events can be found in
Note22 on page 72.
Annual General Meeting
The Company’s 2025 AGM will only be scheduled in the
eventthat shareholders do not approve the Scheme of
Reconstruction and it does not become effective. In this
case,a separate notice of meeting for the AGM will be sent
toshareholders in or around March 2025.
Re-appointment of auditor
BDO were appointed as auditor at the AGM on 15 March
2018. BDO have indicated their willingness to continue in
office as auditor to the Company and a resolution proposing
their re-appointment and authorising the directors to
determine their remuneration forthe ensuing year will be put
to shareholders at the next AGM, if the Company remains in
existence and an AGM is duly convened. Further information
in relation to their re-appointment can be found in the Audit
andRisk Committee report on page 40.
Directors’ statement as to disclosure of
information to auditors
Each of the Directors who was a member of the Board at the
date ofapproval of this Report confirms that to the best of his
or her knowledge and belief, there is no information relevant to
the preparation of the Annual Report of which the Company’s
auditor is unaware and he or she has 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
UK Listing Rule 6.6.4 requires the Company to include certain
information in a single identifiable section of the Annual Report
or across reference table indicating where the information is
set out. The Directors confirm that there are no disclosures to
be made in this regard.
Securities financing transactions
As the Company undertakes securities lending it is required
toreport on securities financing transactions (as defined in
Article 3 of Regulation (EU) 2015/2365, securities financing
transactions include repurchase transactions, securities or
commodities lending and securities or commodities
borrowing, buy-sell back transactions or sell-buy back
transactions and margin lending transactions). In accordance
with Article 13 of the Regulation, the Company’s involvement
in and exposures related to securities lending for the
accounting period ended 31 October 2024 are detailed on
pages 78 and 79.
Other information
Information on financial risk management is detailed in
Note15 to the Financial Statements on pages 65 to 69.
Approval
The Directors’ report has been approved by the Board.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
12 February 2025
Henderson Opportunities Trust plc Annual Report 2024
45
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. Under that law the
Directors have prepared the Company’s 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 UK and the 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 net return 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;
●
prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business; and
●
prepare a Director’s report, a Strategic Report and
Director’s remuneration report which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
theCompany’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
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 and Financial
Statements, taken as a whole, are fair, balanced and
understandable and provide theinformation necessary for
shareholders to assess the Company’s position, performance,
business model andstrategy.
Website publication
The Directors are responsible for ensuring the Annual Report
and the Financial Statements are made available on a website.
The Financial Statements are published on the Company’s
website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial
statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
Financial Statements contained therein.
Statement under Disclosure Guidance
and Transparency Rule 4.1.12
Each of the Directors, who are listed on page 30, confirms
that, to the best of his or her knowledge:
●
the Company’s Financial Statements, which have been
prepared in accordance with UK Accounting Standards,
give a true and fair view of the assets, liabilities, financial
position and returns of the Company; and
●
the Annual Report and Financial Statements include 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
Wendy Colquhoun
Chairman
12 February 2025
Henderson Opportunities Trust plc Annual Report 2024
46
Financial
Statements
Opinion on the financial statements
In our opinion the financial statements:
●
give a true and fair view of the state of the Company’s affairs as at 31 October 2024 and of its return 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.
We have audited the financial statements of Henderson Opportunities Trust plc (the “Company”) for the year ended 31 October
2024 which comprise the Income Statement, the Statement of Changes in Equity, the Statement of Financial Position, the
Statement of Cash Flows and Notes to the Financial Statements, including a summary of significant accounting policies.
Thefinancial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of
Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Ourresponsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion. Our audit opinion is consistent with the additional report to the Audit and Risk Committee.
Independence
Following the recommendation of the Audit and Risk Committee, we were appointed by the shareholders at the Annual
General Meeting on 15 March 2018 to audit the financial statements for the year ended 31 October 2018 and subsequent
financial periods. Theperiod of total uninterrupted engagement including reappointments is seven years, covering the years
ended 31 October 2018 to 31 October 2024. We remain 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 listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services prohibited by that standard were not provided to the Company.
Material uncertainty related to going concern
We draw attention to Note 1b to the financial statements, which indicates that the Company’s ability to continue as a going
concern is dependent on whether the shareholders approve the proposed scheme of reconstruction and subsequent liquidation
at the upcoming general meetings. This approval is not guaranteed. As stated in Note 1b, these events or conditions, along with
other matters as set forth in Note 1b, indicate that a material uncertainty exists that may cast significant doubt on the Company’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Given the material uncertainty noted above and in our assessment, we considered going concern to be a key audit matter.
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting
and in response to the key audit matter included the following:
●
Considering the appropriateness of the Directors’ conclusion in relation to the upcoming shareholder vote in relation to a
scheme of reconstruction;
●
Evaluating the appropriateness of the Directors’ method of assessing the going concern in the light of economic and market
conditions by reviewing the information used by the Directors in completing their assessment;
●
Assessing the appropriateness of the Directors’ assumptions and judgements made by comparing the prior year forecasted
costs to the actual costs incurred to check that the projected costs are reasonable;
●
Assessing the projected management fees for the year to check that it was in line with the current assets under management
levels and the projected market growth forecasts for the following year;
●
Assessing the appropriateness of the Directors’ assumptions and judgements made in their base case and stress tested
forecasts including consideration of the available cash resources relative to forecast expenditure and commitments; and
●
Challenging the Directors’ assumptions and judgements made in their forecasts including performing an independent
analysis of the liquidity of the portfolio.
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.
Independent Auditor’s Report to the Members
ofHenderson Opportunities Trust plc
48
Henderson Opportunities Trust plc Annual Report 2024
In relation to the Company’s reporting on how it has 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.
Overview
Key audit matters
Valuation and ownership of quoted investments
Going concern
2024
✓
✓
2023
✓
Materiality Company financial statements as a whole
£0.93m (2023: £0.82m) based on 1% (2023: 1%) of net assets
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system
of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
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, including 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. This matter was addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
In addition to the matter described in the “material uncertainty related to going concern” above, we have determined the matter
below to also be a key audit matter to be communicated in our report.
Key audit matter How the scope of our audit addressed the key audit matter
Valuation and ownership of quoted investments
(Note 11 on Page 64)
The investment portfolio at the year-end comprised
of equity investments held at fair value through profit
or loss of which 99% is quoted.
We considered the valuation and ownership of
investments to be the most significant audit area as
investments represent the most significant balance
in the financial statements and underpins the
principal activity of the entity.
There is a risk that the bid price used as a proxy for
fair value of investments held at the reporting date is
inappropriate. Given the nature of the portfolio is
such that it comprises predominantly listed level 1
investments, we do not consider the use of bid price
to be subject to significant estimation uncertainty.
There is also a risk of error in the recording of
investment holdings such that those recorded do
not appropriate reflect the property of the Company.
For these reasons and the materiality to the financial
statements as a whole, they are considered to be a
key area of our overall audit strategy and allocation
of our resources and hence a Key Audit Matter.
We have responded to this matter by testing the valuation and
ownership of 100% of the portfolio of quoted investments.
Weperformed the following procedures:
●
Confirmed the year-end bid price was used by agreeing to externally
quoted prices:
●
Assessed if there were contra indicators, such as liquidity
considerations, to suggest bid price was not the most appropriate
indication of fair value by considering the theoretical realisation
period for individual holdings;
●
Obtained direct confirmation of the number of shares held per equity
investment from the custodian regarding all investments held at the
balance sheet date; and
●
Recalculated the valuation by multiplying the number of shares
heldper the statement obtained from the custodian by the valuation
per share.
Key observations:
Based on our procedures performed we found that the valuation and
ownership of quoted investments to be appropriate.
Independent Auditor’s Report to the Members
ofHenderson Opportunities Trust plc
(continued)
49
Henderson Opportunities Trust plc Annual Report 2024
Independent Auditor’s Report to the Members
ofHenderson Opportunities Trust plc
(continued)
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and
the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
2024 2023
Materiality £0.93m £0.82m
Basis for determining materiality 1% of net assets
Rationale for the benchmark applied As an investment trust, the net asset value is the key measure
of performance for users of the financial statements.
Performance materiality £0.70m £0.62m
Basis for determining performance materiality 75% of materiality
Rationale for the percentage applied for
performance materiality
The level of performance materiality applied was set after having considered a
number of factors including the expected total value of known and likely
misstatements and the level of transactions in the year.
Reporting threshold
We agreed with the Audit and Risk Committee that we would report to them all individual audit differences in excess of
£46,000 (2023:£40,000) for the financial statements as a whole. We also agreed to report differences below this threshold
that, inourview, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual
report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in our 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
tobe materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to 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 this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The UK 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 Code 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.
Going concern and longer-term viability
●
The Directors’ statement with regards to the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified set out on page 58; and
●
The Directors’ explanation as to their assessment of the Company’s
prospects, the period this assessment covers and why the period is
appropriate set out on page 26.
50
Henderson Opportunities Trust plc Annual Report 2024
Independent Auditor’s Report to the Members
ofHenderson Opportunities Trust plc
(continued)
Other Code provisions
●
Directors’ statement on fair, balanced and understandable set out on page 46;
●
Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 23;
●
The section of the annual report that describes the review of effectiveness
of risk management and internal control systems set out on pages 39 and
40; and
●
The section describing the work of the Audit and Risk Committee set out
on pages 38 to 40.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic Report and Directors’ Report 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 the Directors’ Report have been prepared in
accordance with applicable legal requirements.
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 the Directors’ Report.
Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
Matters on which we are required to report
by exception
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.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, 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.
51
Henderson Opportunities Trust plc Annual Report 2024
Independent Auditor’s Report to the Members
ofHenderson Opportunities Trust plc
(continued)
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.
Extent to which the audit was 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 above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
●
Our understanding of the Company and the industry in which it operates;
●
Discussion with the Investment Manager, and those charged with governance;
●
Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be the Companies Act 2006, the FCA’s UK Listing and DTR rules, the
principles of the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting
framework, and qualification as an Investment Trust under UK tax legislation as any non-compliance of this would lead to the
Company losing various deductions and exemptions from corporation tax.
Our procedures in respect of the above included:
●
Agreement of the financial statement disclosures to underlying supporting documentation;
●
Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws
and regulations;
●
Reviewing minutes of meetings of those charged with governance throughout the period for instances of non-compliance
with laws and regulations; and
●
Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its
requirements to retain their Investment Trust Status.
Fraud
We assessed the susceptibility of the financial statement to material misstatement including fraud.
Our risk assessment procedures included:
●
Enquiry with the Investment Manager and those charged with governance regarding any known or suspected instances of fraud;
●
Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud; and
●
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements.
Based on our risk assessment we considered the fraud risk areas to be management override of controls.
Our procedures in respect of the above included:
●
In addressing the risk of management override of control, we:
– Performed a review of estimates and judgements applied by management in the financial statements to assess their
appropriateness and the existence of any systematic bias;
– Considered the opportunity and incentive to manipulate accounting entries and reviewed the appropriateness of any
adjustments made in the period end financial reporting process;
– Reviewed for significant transactions outside the normal course of business; and
– Performed a review of unadjusted audit differences, if any, for indications of bias or deliberate misstatement.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
52
Henderson Opportunities Trust plc Annual Report 2024
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that
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, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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.
Chris Meyrick (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
12 February 2025
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent Auditor’s Report to the Members
ofHenderson Opportunities Trust plc
(continued)
53
Henderson Opportunities Trust plc Annual Report 2024
Income Statement
Year ended 31 October 2024 Year ended 31 October 2023
Notes
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
2 Gains/(losses) on investments held
at fair value through profit or loss – 12,384 12,384 – (9,892) (9,892)
3 Income from investments held at
fair value through profit or loss 2,998 – 2,998 3,269 – 3,269
4 Other interest receivable and other
income 288 – 288 242 – 242
Gross revenue and capital
gains/(losses) 3,286 12,384 15,670 3,511 (9,892) (6,381)
5 Management fees (154) (360) (514) (151) (351) (502)
6 Other administrative expenses (452) (6) (458) (466) – (466)
Net return/(loss) before finance
costs and taxation 2,680 12,018 14,698 2,894 (10,243) (7,349)
7 Finance costs (202) (472) (674) (245) (572) (817)
Net return/(loss) before taxation 2,478 11,546 14,024 2,649 (10,815) (8,166)
8 Ta xation (2) – (2) (6) – (6)
Net return/(loss) after taxation 2,476 11,546 14,022 2,643 (10,815) (8,172)
9 Net return/(loss) per ordinary
share – basic and diluted 6.27p 29.24p 35.51p 6.70p* (27.40p)* (20.70p)*
* Comparative figures have been restated due to the sub-division of each ordinary share of 25p into five ordinary shares of 5p
each on 11 March 2024.
The total columns of this statement represent the Profit and Loss Account 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.
Allrevenue 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 58 to 72 form part of these financial statements
54
Henderson Opportunities Trust plc Annual Report 2024
Statement of Changes in Equity
Notes Year ended 31 October 2024
Called up
share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other capital
reserves
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
At 1 November 2023 2,000 14,838 2,431 59,924 2,572 81,765
10 Ordinary dividends paid – – – – (2,803) (2,803)
10 Refund of unclaimed dividends
over 12 years old – – – – 5 5
Net return after taxation – – – 11,546 2,476 14,022
At 31 October 2024 2,000 14,838 2,431 71,470 2,250 92,989
Notes Year ended 31 October 2023
Called up
share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other capital
reserves
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
At 1 November 2022 2,000 14,838 2,431 70,739 2,693 92,701
10 Ordinary dividends paid – – – – (2,764) (2,764)
Net (loss)/return after taxation – – – (10,815) 2,643 (8,172)
At 31 October 2023 2,000 14,838 2,431 59,924 2,572 81,765
The notes on pages 58 to 72 form part of these financial statements
55
Henderson Opportunities Trust plc Annual Report 2024
Statement of Financial Position
Notes
31 October
2024
£’000
31 October
2023
£’000
Fixed assets
11 Investments held at fair value through profit or loss
Listed at market value 64,477 50,270
Quoted on AIM at market value 33,235 38,703
Unlisted 490 513
98,202 89,486
Current assets
12 Investment held at fair value through profit or loss 2 2
13 Debtors 347 487
Cash at bank and in hand 2,091 2,315
2,440 2,804
14 Creditors: amounts falling due within one year (7,653) (10,525)
Net current liabilities (5,213) (7,721)
Total assets less current liabilities 92,989 81,765
Net assets 92,989 81,765
Capital and reserves
16 Called up share capital 2,000 2,000
Share premium account 14,838 14,838
17 Capital redemption reserve 2,431 2,431
17 Other capital reserves 71,470 59,924
Revenue reserve 2,250 2,572
Total shareholders’ funds 92,989 81,765
19 Net asset value per ordinary share – basic and diluted 235.5p 207.0p*
* Comparative figure for the period ended 31 October 2023 has been restated due to the sub-division of each ordinary share of
25p into five ordinary shares of 5p each on 11 March 2024.
These financial statements on pages 54 to 72 were approved and authorised for issue by the Board of Directors on 12 February
2025 and were signed on their behalf by:
Wendy Colquhoun
Chairman
The notes on pages 58 to 72 form part of these financial statements
56
Henderson Opportunities Trust plc Annual Report 2024
Statement of Cash Flows
Year ended
31 October 2024
£’000
Year ended
31 October 2023
£’000
Cash flows from operating activities
Net return/(loss) before taxation 14,024 (8,166)
Add: finance costs 674 817
(Less)/add: (gains)/losses on investments held at fair value through profit or loss (12,384) 9,892
Withholding tax on dividends deducted at source (2) –
Increase in other debtors (56) (81)
Increase/(decrease) in creditors 332 (12)
Net cash inflow from operating activities
1
2,588 2,450
Cash flows from investing activities
Purchase of investments (21,452) (7,527)
Sale of investments 25,244 13,647
Proceeds from capital dividends 72 –
Net cash inflow from investing activities 3,864 6,120
Cash flows from financing activities
Equity dividends paid (2,798) (2,764)
Net loans repaid (3,168) (3,937)
Interest paid (710) (773)
Net cash outflow from financing activities (6,676) (7,474)
Net (decrease)/increase in cash and cash equivalents (224) 1,096
Cash at bank and in hand at start of year 2,315 1,219
Cash at bank and in hand at end of year 2,091 2,315
Comprising:
Cash at bank and in hand 2,091 2,315
1 Cash inflow from dividends was £2,942,000 (2023: £3,211,000) and cash inflow from interest was £57,000 (2023: £52,000)
The notes on pages 58 to 72 form part of these financial statements
57
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements
1 Accounting policies
(a) Basis of accounting
The Company is a registered investment company as defined in Section 833 of the Companies Act 2006 and is
incorporated in the United Kingdom. It operates in the United Kingdom and is registered at the address on page 81.
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”) issued 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 fair value of investments. In applying FRS 102, financial
instruments have been accounted for in accordance with Sections 11 and 12 of the standard. All of the Company’s
operations are of a continuing nature.
b) Going concern
The Directors acknowledge that they have proposed a Scheme of Reconstruction, which is subject to the shareholders’
approval at General Meetings scheduled for 21 February 2025 and 14 March 2025. If the resolutions approving the
Scheme and placing the Company into liquidation are passed, the Company will not continue as a going concern beyond
14 March 2025.
If the resolutions are not passed, the Directors having considered the Company’s financial position, the principal risks, and
broader macroeconomic factors outlined in the viability statement on page 26, are satisfied that the Company could
continue in operational existence for at least 12 months from the date of approval of the financial statements.
In coming to this conclusion, the following matters have been considered. The assets of the Company consist primarily of
securities that are listed (or quoted on AIM), which are readily realisable. The net current liabilities position is primarily due to
borrowings under the loan facility, and the Company’s portfolio is sufficiently liquid to meet the net current liabilities in the
event that the loan needs to be fully repaid. The securities lending programme entered into by the Company (see Note 15.3
on page 68 for more information) is supported by indemnification and therefore does not impact the liquidity of the portfolio
or the Company’s ability to continue as a going concern. Accordingly, the Directors believe that the Company has
adequate resources to continue in operational existence for at least twelve months from the date of approval of the
Financial Statements.
The Company’s ability to continue as a going concern is dependent on whether the shareholders approve the proposed
Scheme of Reconstruction and subsequent liquidation at the upcoming general meetings. Thisapproval is not guaranteed
and therefore indicates that a material uncertainty exists that may cast significant doubt onthe Company’s ability to
continue as a going concern.
The Company’s Articles of Association also require that at every third AGM, an ordinary resolution be put to shareholders
to approve the continuation of the Company. The resolution was last put to the AGM in 2023 and was duly passed, and
should the Company continue in existence, the next triennial continuation resolution will next be put to the shareholders at
the AGM in 2026.
Based on this assessment, the Directors consider that, although there is material uncertainty due to the upcoming
shareholder votes in respect of the Scheme, the Company would otherwise remain a going concern for a period of at least
12 months from the date of approval of the financial statements and have therefore prepared the Financial Statements on a
going concern basis. The financial statements do not include any adjustments that would result from the basis of
preparation being inappropriate.
c) Significant judgements and areas of estimation uncertainty
Considerations in respect of the classification of any dividends as revenue or capital are set out in accounting policy f) and
the valuation policy of any unlisted investments is set out in accounting policy d). There have been no other significant
judgements or estimations applied to the Financial Statements.
d) Investments held at fair value through profit or loss
Listed investments, including quoted AIM stocks, are held at fair value through profit or loss and accordingly are valued at
fair value, deemed to be bid prices or the last trade price depending on the convention of the exchange on which the
investment is quoted.
Unlisted investments are held at fair value through profit or loss and are valued by the Directors with regard to the International
Private Equity and Venture Capital Guidelines (“IPEV”) using primary valuation techniques such as recent transactions and net
assets. Where fair value cannot reliably be measured the investment will be carried at the previous reporting date value unless
there is evidence that the investment has since been impaired, in which case the value will be reduced. All such valuations are
reviewed by both Janus Henderson’s EMEA & APAC Pricing Committee and by the Directors.
Changes in the 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 on investments held at fair value through profit or loss”. Transaction costs in
relation to the purchase or sale of investments are also expensed within this line. All purchases and sales are accounted for
on a trade date basis. Investments on loan under the Company’s stock lending agreement are held on the balance sheet
and not derecognised because the Company is still exposed to the risks and rewards of holding the investments.
58
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
1 Accounting policies (continued)
e) Foreign currency
The results and financial position of the Company are expressed in sterling, which is the functional and presentational
currency of the Company. Sterling is the functional currency because it is the 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 the translation of foreign currency balances, whether realised or unrealised, are taken to the capital return
or to the revenue return of the Income Statement, depending on whether the gain or loss is of a capital or revenue nature.
f) Income
Dividends receivable from equity shares are taken to the revenue return on an ex-dividend basis except where, in the opinion
of the Directors, the dividend is capital in nature, in which case it is taken to the capital return. When a dividend received is
capital in nature, the associated proportion of the investment’s underlying book cost relating to the capital reduction of the
investment is allocated to the dividend and the book cost adjusted accordingly. This results in the realised profits from the
capital dividend being the value of the dividend received less the underlying book cost allocated to the dividend. Income from
fixed interest debt securities and preference shares is recognised using the effective interest rate method in accordance with
the SORP. 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 and shown in the revenue return based on amounts to which the
Company is entitled.
Fees earned from stock lending are accounted for on an accruals basis and shown in the revenue return based on amounts to
which the Company is entitled. This is after deduction of amounts withheld by the counterparty arranging the stock lending facility.
The stock lending accounting policy is set out in note 15.3.
Where the Company enters into a commitment to sub-underwrite an issue of securities, in exchange for the receipt of
commission, a derivative financial instrument is recognised initially at fair value. The derivative is re-measured subsequently
at fair value, with the related gains and losses being reflected in the Income Statement. Net losses arising from these
derivatives, where the actual or expected loss from taking up the securities underwritten exceeds the commission income,
are allocated to the capital return. Net gains are allocated to the revenue return.
g) Management fee, administrative expenses and finance costs
All expenses and finance costs are accounted for on an accruals basis.
The Board has determined that the capital return should reflect the indirect costs of earning capital returns. The Company
allocates 70% of its management fee and finance costs to the capital return of the Income Statement with the remaining
30% being allocated to the revenue return.
The management fee is calculated quarterly in arrears, as 0.55% per annum of the net assets. Performance fee provisions
were removed with effect from 20 October 2023.
All other administrative expenses are charged to the revenue return of the Income Statement.
Expenses which are incidental to the purchase or sale of an investment are recognised immediately in the capital return of
the Income Statement, and are included within the gains/losses from investments held at fair value through profit or loss.
h) Taxation
The tax expense represents the sum of the tax currently payable and deferred 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 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,
iftaxable 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 average rate of tax expected to apply based on tax rates and laws that have been enacted or substantively enacted at
the Statement of Financial Position date. Deferred tax assets and liabilities are not discounted to reflect the time value of money.
59
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
1 Accounting policies (continued)
i) Bank borrowings
Interest bearing bank loans and overdrafts are recorded initially at fair value, being the proceeds received, less direct issue
costs. They are subsequently remeasured at amortised cost. Finance 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 and are added to the carrying amount of the instrument to the extent that they are not settled
in the period in which they arise.
j) Cash and liquid resources
For the purposes of the Statement of Cash Flows, cash comprises bank deposits that are repayable on demand and
bankoverdrafts. Liquid resources comprise readily disposable shares of value that do not qualify as cash, and include
investments in money market funds as explained more fully in Note 12.
k) 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 recognised within the Statement of Changes in Equity.
l) The issue and repurchase of ordinary shares and the associated costs
The proceeds from the issue of new ordinary shares (including those relating to the sale of shares out of treasury), and the
aggregate cost of repurchasing ordinary shares (including those to be held in treasury) are taken directly to equity. Issue
costs incurred in respect of new ordinary shares are offset against the proceeds received and dealt with in the share
premium account. Issue costs incurred in respect of shares sold out of treasury are offset against proceeds received and
dealt with in the share premium account. Share issue and repurchase transactions are accounted for on a trade date basis.
m) Capital reserves
Called up share capital represents the nominal value of ordinary shares issued.
The share premium account represents the premium above nominal value received by the Company on issuing shares net
of issue costs.
The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been
distributed to shareholders as a dividend.
The capital redemption reserve represents the nominal value of ordinary shares that have been repurchased and cancelled.
Other 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;
●
expenses and finance costs allocated to capital net of tax relief;
●
realised foreign exchange differences of a capital nature; and
●
cost of repurchasing ordinary share capital.
Capital reserve arising on revaluation of 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.
n) Distributions
Distributions can be made from the revenue reserve and from realised gains in other capital reserves, for further details in
respect to the other capital reserves please see note 17. Distributions cannot be made from the share premium account or
the capital redemption reserve.
60
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
2 Gains/(losses) on investments held at fair value through profit or loss
2024
£’000
2023
£’000
Gains/(losses) on the sale of investments based on historical cost 5,224 (3,497)
Revaluation losses recognised in previous years 3,270 4,342
Gains on investments sold in the year based on carrying value at previous Statement of
Financial Position date 8,494 845
Revaluation gains/(losses) on investments held at 31 October 3,890 (10,737)
12,384 (9,892)
Included within gains/(losses) on investments are special capital dividends of £72,000 (2023: £nil). These are accounted for
in accordance with accounting policy 1f).
3 Income from investments held at fair value through profit or loss
2024
£’000
2023
£’000
UK:
Dividends from listed investments
2,096 1,384
Dividends from AIM investments
809 1,795
2,905 3,179
Non-UK:
Dividends from listed investments 93 90
93 90
2,998 3,269
4 Other interest receivable and other income
2024
£’000
2023
£’000
Deposit interest 56 56
Stock lending commission 229 183
Underwriting commission (allocated to revenue) 3 3
288 242
Stock lending commission has been shown net of brokerage fees of £57,000 (2023: £46,000).
During the year the Company was not required to take up shares in respect of underwriting commission; no commission
was taken to capital (2023: same).
5 Management fee
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Management fee 154 360 514 151 351 502
154 360 514 151 351 502
The basis on which the management fee is calculated is set out on page 18 in the Strategic Report. Performance fee
provisions were removed with effect from 20 October 2023.
61
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
6 Other administrative expenses
2024
£’000
2023
£’000
Auditor’s remuneration for audit services 49 45
Directors’ fees and expenses (see the Directors’ remuneration report on page 42) 125 118
Directors’ and officers’ liability insurance 13 14
Listing and regulatory fees 19 17
Custody fees (2) 17
Depositary fees 9 9
Printing and postage 14 18
Registrar’s fees 18 15
Marketing expenses recharged by Janus Henderson 13 20
Bank facilities: arrangement and non-utilisation fees 73 79
Other expenses 87 80
Irrecoverable VAT 34 34
452 466
All transactions with Directors are disclosed in the Directors’ remuneration report and are related party transactions.
7 Finance costs
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
On bank loans and overdrafts 202 472 674 245 572 817
The allocation between revenue return and capital return is explained in Note 1(g) on page 59.
8 Ta xation
Approved investment trusts are exempt from tax on capital gains.
The effective rate of UK corporation tax for the year was 25% (2023: effective rate of 22.5%). The tax charge for the year is
lower than the corporation tax rate of 25%.
The tax charge for the year ended 31 October 2024 is £2,000 (2023: £6,000).
The differences are explained below:
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Net return/(loss) before taxation 2,478 11,546 14,024 2,649 (10,815) (8,166)
Corporation tax at 25% (2023: 22.5%) 620 2,887 3,507 596 (2,433) (1,837)
Non-taxable UK dividends (721) – (721) (715) – (715)
Non-taxable overseas dividends (5) – (5) (7) – (7)
Excess management expenses 106 209 315 126 207 333
Irrecoverable overseas withholding tax 2 – 2 6 – 6
Capital (gains)/losses not subject to tax – (3,096) (3,096) – 2,226 2,226
Total tax charge 2 – 2 6 – 6
No provision for deferred taxation has been made in the current or prior accounting year. The Company has not provided
for deferred tax on capital gains or losses arising on the revaluation and disposal of investments as it is exempt from tax
onthese items because of its investment trust status. The Company can offset management fees, other administrative
expenses and interest costs against taxable income to eliminate any tax charge on such income. The tax legislation refers
62
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
8 Taxation (continued)
to these as management expenses (management fees and other administrative expenses) and non-trade loan relationship
deficits (interest costs) and these are captured together under the heading “Excess management expenses” in the table on
the previous page. Where these are not fully utilised, they can be carried forward to future years. As the Company is
unlikely to generate future taxable profits to utilise these amounts, the Company cannot recognise an asset to reflect
them,but must still disclose the deferred tax amount carried forward arising from any unutilised amounts. Consequently,
the Company hasnot recognised a deferred tax asset totalling £6,910,000 (2023: £6,593,000) arising as a result of
havingunutilised management expenses and unutilised non-trade loan relationship deficits totalling £27,639,000
(2023:£26,374,000), and based on a prospective tax rate of 25% (2023: 25%).
9 Net return/(loss) per ordinary share – basic and diluted
The total return per ordinary share is based on the total profit attributable to the ordinary shares of £14,022,000 (2023:total
loss of £8,172,000) and on 39,491,875 ordinary shares (2023: 39,491,875*) being the weighted average number
ofsharesinissue during the year.
The return/(loss) per ordinary share can be further analysed as follows:
2024
£’000
2023
£’000
Revenue return 2,476 2,643
Capital return/(loss) 11,546 (10,815)
Total return/(loss) 14,022 (8,172)
Weighted average number of ordinary shares 39,491,875 39,491,875*
2024 2023
Revenue return per ordinary share 6.27p 6.69p*
Capital return/(loss) per ordinary share 29.24p (27.39p)*
Total return/(loss) per ordinary share – basic and diluted 35.51p (20.70p)*
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary
share of 25p into five ordinary shares of 5p each on 11 March 2024.
10 Ordinary dividends paid
Record date Payment date
2024
£’000
2023
£’000
Amounts recognised as distributions to equity
holders in the year:
Third Interim dividend for the year ended
31October 2022 of 1.4p* 18 November 2022 16 December 2022 – 553
Final dividend for the year ended 31 October 2022
of 2.6p* 17 February 2023 24 March 2023 – 1,027
First Interim dividend for the year ended
31October 2023 of 1.5p* 19 May 2023 23 June 2023 – 592
Second Interim dividend for the year ended
31October 2023 of 1.5p* 18 August 2023 22 September 2023 – 592
Third Interim dividend for the year ended
31October 2023 of 1.5p* 17 November 2023 15 December 2023 592 –
Final dividend for the year ended 31 October 2023
of 2.6p* 16 February 2024 22 March 2024 1,027 –
First Interim dividend for the year ended
31October 2024 of 1.5p 17 May 2024 20 June 2024 592 –
Second Interim dividend for the year ended
31October 2024 of 1.5p 16 August 2024 20 September 2024 592 –
Refund of unclaimed dividends over 12 years old (5) –
2,798 2,764
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary
share of 25p into five ordinary shares of 5p each on 11 March 2024.
63
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
10 Ordinary dividends paid (continued)
The Board declared a third interim dividend of 1.5p per ordinary share, paid on 13 December 2024 to shareholders on the
register of the Company at the close of business on 15 November 2024. The ex-dividend date was 14 November 2024.
Based on the number of ordinary shares in issue on 31 October 2024, the cost of this dividend was £592,000.
A fourth interim dividend for the year ended 31 October 2024 of 2.6p per ordinary share will be paid on 11March 2025
toshareholders on the register of members at the close of business on 21 February 2025. The shares will be quoted
ex-dividend on 20 February 2025.
The total dividends payable in respect of the financial year, which form the basis of the test under Section 1158 of the
Corporation Tax Act 2010, are set out below:
Year ended
31October
2024
£’000
Year ended
31October
2023
£’000
Revenue available for distribution by way of dividends for the year 2,476 2,643
First interim dividend for the year ended 31 October 2024: 1.5p (2023: 1.5p*) (592) (592)
Second interim dividend for the year ended 31 October 2024: 1.5p (2023: 1.5p*) (592) (592)
Third interim dividend for the year ended 31 October 2024: 1.5p (2023: 1.5p*) (592) (592)
Declared fourth interim dividend for the year ended 31 October 2024: 2.6p (based on
the 39,491,875 ordinary shares in issue at 12 February 2025) (2023: 2.6p* on
39,491,875* ordinary shares) (1,027) (1,027)
Transferred from revenue reserve
1
(327) (160)
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary
share of 25p into five ordinary shares of 5p each on 11 March 2024.
All dividends have been paid or will be paid out of revenue profit and the revenue reserve.
1 Undistributed revenue comprises nil% of income from investments (2023: nil)
11 Investments held at fair value through profit or loss
2024
£’000
2023
£’000
Valuation at 1 November 89,486 105,695
Investment holding losses at 1 November 17,095 10,699
Cost at 1 November 106,581 116,394
Purchases at cost 21,452 7,527
Sales at cost (19,824) (17,340)
Cost allocated to capital dividends (72) –
Cost at 31 October 108,137 106,581
Investment holding losses at 31 October (9,935) (17,095)
Valuation of investments at 31 October 98,202 89,486
The Company received £25,120,000 (2023: £13,843,000) from investments sold in the year. The book cost of these
investments when they were purchased was £19,824,000 (2023: £17,340,000). These investments have been revalued
overtime and until they were sold. Any unrealised gains/losses were included in the fair value of the investments.
All the investments were equity investments (2023: same). At 31 October 2024, the total value of securities on loan by the
Company for stock lending purposes was £14,833,000 (2023: £11,760,000). The maximum aggregate value of securities
on loan at any one time during the year ended 31 October 2024 was £17,990,000 (2023: £19,850,000). The Company’s
agent holds collateral at 31 October 2024 with the value of £15,646,000 (2023: £12,380,000) in respect of securities on
loan, the value of which is reviewed on a daily basis and comprises CREST Delivery By Value (“DBVs”) and Government
Bonds with a market value of 105% (2023: 105%) of the market value of any securities on loan.
Total transaction costs amounted to £90,000 (2023: £29,000) of which purchase transaction costs for the year ended
31October 2024 were £81,000 (2023: £24,000). These comprise mainly stamp duty and commissions. Sale transaction
costs for the year ended 31 October 2024 were £9,000 (2023: £5,000).
64
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
11 Investments held at fair value through profit or loss (continued)
Substantial interests in investments
As at 31 October 2024 the Company holds 3% or more of any class of capital in 6 investee companies (2023: 6). Within the
6, there was 1 whose valuation represented more than 1% of the value of the total investment portfolio held by the
Company, which is:
2024
Valuation
£’000
2024
% of
voting
2023
Valuation
£’000
2023
% of
voting
Van Elle 1,776 3.9 1,607 4.0
12 Current asset investment held at fair value through profit or loss
The Company has a holding in Deutsche Global Managed Platinum Income Fund, a money market fund which is viewed as
a readily disposable store of value and which is used to invest cash balances that would otherwise be placed on short-term
deposit. At 31 October 2024 this holding had a value of £2,000 (2023: £2,000).
13 Debtors
2024
£’000
2023
£’000
Sales for future settlement – 196
Prepayments and accrued income 347 291
347 487
14 Creditors: amounts falling due within one year
2024
£’000
2023
£’000
Unsecured sterling bank loans (see Note 15.6) 7,001 10,169
Bank loan interest payable 36 72
Other creditors 616 284
7,653 10,525
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 Investment Policy as stated on page 17. In pursuing its Investment Objective and Investment
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 inthe profits available for distribution by way of dividends.
These financial risks: market risk (comprising market price risk, currency risk and interest rate risk), liquidity risk and credit
and counterparty risk, 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 co-ordinate 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 management of risk have not changed from the previous accounting period and are
the same for the Company except where separate disclosures are made.
15.1 Market risk
The fair value of a financial instrument held by the Company will fluctuate due to changes in market prices. This market
riskcomprises market price risk (see Note 15.1.1), currency risk (see Note 15.1.2) and interest rate risk (see Note 15.1.3). TheBoard
reviews and agrees policies for managing these risks. The Fund Managers assess the exposure to market risk when making each
investment decision, and monitor the overall level of market risk on the whole of the investment portfolio on an ongoing basis.
15.1.1 Market price risk
Market price risk (i.e. changes in market prices other than those arising from interest rate risk or currency risk) will affect the
fair value of investments.
The Company’s exposure to market price risk at 31 October 2024 and at 31 October 2023, is represented by the
investments it holds, as shown on the Statement of Financial Position on page 56 under the heading “Investments held
atfair value through profit or loss”.
65
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Financial risk management policies and procedures (continued)
15.1.1 Market price risk (continued)
Management of the risk
The Board manages the risks inherent in the investment portfolio by ensuring full and timely access to relevant information
from Janus Henderson. The Board meets regularly and at each meeting reviews investment performance. The Board
monitors Janus Henderson’s compliance with the Company’s objective and is responsible for investment strategy and
asset allocation.
Concentration of exposure to market price risk
An analysis of the Company’s investment portfolio is shown on pages 11 to 12. This shows that the value of the
investments is primarily in companies that are listed in the UK. Accordingly, there is a concentration of exposure to market
price risk in the UK, although it is recognised that an investment’s country of domicile or of listing does not necessarily
equate to its exposure to the economic conditions in that country.
Market price risk sensitivity
The table below illustrates the sensitivity of the total return after taxation for the year and the net assets to an increase
ordecrease of 20% in the fair values of the Company’s investments. This level of change is considered to be reasonable
based on historic market conditions.
Sensitivity analysis
2024 2023
If prices go
up20%
£’000
If prices go
down 20%
£’000
If prices go
up20%
£’000
If prices go
down 20%
£’000
Investments (excluding investments in money market funds) 98,202 98,202 89,486 89,486
Impact on the income statement:
Revenue return (32) 32 (29) 29
Capital return 19,564 (19,564) 17,828 (17,828)
Impact on net assets and total return 19,532 (19,532) 17,799 (17,799)
15.1.2 Currency risk
A small proportion of the Company’s assets, liabilities and income are denominated in currencies other than sterling
(theCompany’s functional currency and presentational currency). As a result, movements in exchange rates may affect
thesterling value of those items. The Company had no cash at bank and in hand at 31 October 2024 (2023: none)
denominated in foreign currency.
Management of the risk
Janus Henderson monitors the Company’s exposure to foreign currencies and reports any significant changes to the
Board. Janus Henderson measures the risk to the Company of the foreign currency exposure by considering the effect on
the Company’s net asset value and total return of a movement in the exchange rate to which the Company’s assets,
liabilities, income and expenses are exposed.
Investment income denominated in foreign currencies is converted into sterling on receipt. The Company does not use
financial instruments to mitigate the currency exposure in the period between the time that income is included in the
financial statements and its receipt.
Foreign currency exposure and sensitivity
The Company’s investments are predominately in sterling-based securities and its exposure to currency risk is not
considered material.
15.1.3 Interest rate risk
Interest rate movements may affect:
●
the level of income receivable from interest-bearing securities, money market funds and cash at bank and in hand and on
deposit; and
●
the interest payable on the Company’s variable rate borrowings.
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into
account when making investment decisions and borrowing under the Company’s bank loan facility. The Company,
generally, may make use of money market fund placings and does not hold significant cash balances; it uses short-term
borrowings when required. The Company may finance part of its activities through borrowings at levels approved and
monitored by the Board. Derivative contracts are not used to hedge against the exposure to interest rate risk.
66
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Financial risk management policies and procedures (continued)
15.1.3 Interest rate risk (continued)
Management of the risk
Interest rate exposure
The Company’s exposure at 31 October 2024 and at 31 October 2023 of financial assets and financial liabilities to interest
rate risk is shown by reference to floating interest rates – when the interest rate is due to be reset.
2024
Within
one year
£’000
2023
Within
one year
£’000
Exposure to floating interest rates:
Cash at bank and in hand 2,091 2,315
Money market funds 2 2
Creditors – amounts falling due within one year:
Borrowings under loan facility (7,001) (10,169)
Total exposure to interest rates (4,908) (7,852)
Interest receivable and finance costs are at the following rates:
●
interest received on cash balances and money market funds, or paid on bank overdrafts, is at a margin linked to
interest rates (2023: same); and
●
interest paid on borrowings under the loan facility is at a margin over SONIA in line with the terms of the agreement.
The weighted average interest rate of these is 6.2% as at 31 October 2024 (2023: 6.2%).
Interest rate risk sensitivity
The Company is exposed to interest rate risk primarily through its loan facility with The Royal Bank of Scotland International
Limited (London Branch) and money market funds balances. The sensitivity is as follows: borrowings vary throughout the
year as a result of the Board’s borrowing policy. Net borrowings at the year end were £4,908,000 (2023: £7,852,000) andif
that level of borrowings was maintained for a full year, then a 200 basis points change in interest rates (up or down) would
decrease or increase total net return after taxation and shareholders’ funds by £98,000 (2023: £157,000).
15.2 Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Management of the risk
Liquidity risk is not significant as the majority of the Company’s assets are investments in listed securities that are readily
realisable. The Company had unsecured sterling loan facilities totalling £20m (2023: £30m) and an overdraft facility with
thesub custodian, the extent of which is determined by the Custodian on a regular basis by the value of the securities
heldbyit on behalf of the Company. The facilities are subject to regular review.
The Board gives guidance to Janus Henderson as to the maximum amount of the Company’s resources that should be
invested in any one company. The policy is that the Company’s assets should generally remain fully invested in equities.
Any short term cash requirements will generally be met by short term borrowings.
The Board monitors the Company’s exposure to smaller companies on a monthly basis and reviews this in detail at Board
meetings. The liquidity of the whole portfolio is also considered at Board meetings.
The contractual maturities of the financial liabilities at 31 October based on the earliest date on which payment can be
required are as follows:
2024 2023
Due
within
onemonth
£’000
Due between
one and
three months
£’000
Due
within
onemonth
£’000
Due between
one and
three months
£’000
Bank overdraft, loans and interest 7,037 – 4,123 6,118
Other creditors 616 – 284 –
7,653 – 4,407 6,118
67
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Financial risk management policies and procedures (continued)
15.3 Credit and counterparty risk
The failure of the counterparty to a transaction to discharge its obligations under that transaction could result in the
Company suffering a loss.
Management of the risk
The risk is managed as follows:
●
investment transactions are carried out with a large number of brokers, whose credit standard is reviewed regularly by
Janus Henderson, and limits are set on the amount that may be due from any one broker; and
●
cash at bank is held only with reputable banks with high quality external credit ratings or through a money market
fund that uses such banks.
Stock lending transactions are carried out with a number of approved counterparties, whose credit rating is reviewed
regularly by Janus Henderson and limits are set on the amount that may be lent to any one counterparty. Stock lending
isthe temporary transfer of securities by a lender to a borrower, with an agreement by the borrower to return equivalent
securities to the lender at an agreed future date. Stock lending revenue is received for making the investments available
tothe borrower, which increases the returns on the portfolio. In all cases securities lent continue to be recognised in the
Statement of Financial Position. Details of the value of securities on loan at the year end, and the collateral held, can be
found in Note 11.
HSBC’s Securities Lending Programme provides broad market access supported by indemnification. This indemnification
covers replacement of loaned securities (and all ancillary benefits such as outstanding income and fees) in the event of a
borrower default. HSBC will make whole any shortfall between the value realised out of selling collateral and value of the
loaned securities.
In summary, the exposure to credit risk at 31 October 2024 was to cash at bank and in hand and money market funds of
£2,093,000 (2023: £2,317,000) and to debtors of £347,000 (2023: £487,000) (see Note 13).
15.4 Fair values of financial assets and financial liabilities
The financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value
(investments) or the Statement of Financial Position amount is a reasonable approximation of fair value (sales for future
settlement, dividends and interest receivable, purchases for future settlement, accruals, cash at bank and in hand, bank
overdrafts and amounts due under the loan facility).
15.5 Fair value hierarchy disclosures
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 technique used and
are defined as follows:
Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair
value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets;
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included in Level 1; and
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
Fair value hierarchy at 31 October 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 97,712 – 490 98,202
Current asset investments 2 – – 2
97,714 – 490 98,204
Fair value hierarchy at 31 October 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 88,973 – 513 89,486
Current asset investments 2 – – 2
88,975 – 513 89,488
There have been no transfers during the year between any of the levels.
68
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Financial risk management policies and procedures (continued)
15.5 Fair value hierarchy disclosures (continued)
The total carrying value of receivables, as stated in Note 13, is a reasonable approximation of their fair value as at the year
end date. The total carrying value of financial liabilities, as disclosed in Note 14, is a reasonable approximation of their fair
value at the year end date.
A reconciliation of movements within Level 3 is set out below:
2024
£’000
2023
£’000
Opening balance at 1 November 513 517
Revaluation (23) (4)
Closing balance at 31 October 490 513
The investment valuation of the Company’s holding in Oxford Science Enterprises has been reviewed and revalued
accordingly.
15.6 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 through an appropriate balance of equity capital
and debt.
The Company’s capital at 31 October 2024 comprised its equity share capital, reserves and loans (as shown in Note 14)
that are included in the Statement of Financial Position at a total of £99,990,000 (2023: £91,934,000).
The Board, with the assistance of Janus Henderson, monitors and reviews the structure of the Company’s capital on an
ongoing basis. This review includes:
●
the planned level of gearing, which takes into account Janus Henderson’s view on the market;
●
the need to buy back equity shares, either for cancellation or to hold in treasury, which takes account of the difference
between the net asset value 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 allotments 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 externally imposed capital requirements:
●
borrowings under the loan facility must not exceed 30% of the adjusted investment portfolio value (as defined by the
bank providing the loan facility) and the consolidated net tangible asset value must not be less than £70m at any time;
●
as a public company, the Company has a minimum share capital of £50,000; and
●
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.
The Company has complied with these requirements.
The Company’s loan facility has a £20m limit and is with The Royal Bank of Scotland International Limited (London Branch).
The maximum drawn down position in the year was £17,990,000 and the lowest position in the year was £7,001,000.
Thefacility is due to expire in March 2027 and the Board has secured pricing for its renewal.
The Board reviews the level of net gearing at each Board meeting in the light of the liquidity of the portfolio and ensures
that it is well within the covenants so that the risk of breaching the covenants or the gearing range determined by the Board
leading the Company to become a forced seller of investments with possible losses for shareholders is unlikely to arise.
69
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
16 Called up share capital
2024
£’000
2023
£’000
Allotted and issued ordinary shares of 5p each 39,491,875 (2023: 39,491,875*) 1,974 1,974
Ordinary shares of 5p each held in treasury 512,415 (2023: 512,415*) 26 26
2,000 2,000
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary
share of 25p into five ordinary shares of 5p each on 11 March 2024.
During the year ended 31 October 2024 no ordinary shares were issued or repurchased by the Company (outside of the
shares issued in relation to the share split) (2023:no shares issued or repurchased). Shares held in treasury do not carry
aright to receive dividends or vote.
17 Capital redemption reserve and other capital reserves
Capital
redemption
reserve
£’000
Capital
reserve
arising
on
investments
sold
£’000
Capital
reserve
arising on
revaluation of
investments
held
£’000
Other capital
reserves total
£’000
At 1 November 2023 2,431 77,009 (17,085) 59,924
Transfer on disposal of investments – (3,270) 3,270 –
Net gains on investments – 8,494 3,890 12,384
Expenses and finance costs allocated to capital – (838) – (838)
At 31 October 2024 2,431 81,395 (9,925) 71,470
Capital
redemption
reserve
£’000
Capital
reserve
arising
on
investments
sold
£’000
Capital
reserve
arising on
revaluation of
investments
held
£’000
Other capital
reserves total
£’000
At 1 November 2022 2,431 81,429 (10,690) 70,739
Transfer on disposal of investments – (4,342) 4,342 –
Net gains/(losses) on investments – 845 (10,737) (9,892)
Expenses and finance costs allocated to capital – (923) – (923)
At 31 October 2023 2,431 77,009 (17,085) 59,924
The capital reserve arising on revaluation of investments held includes £3,151,000 of unrealised losses on nil valued investments
(2023: £3,151,000). Any distributions from capital reserve arising on investments sold would be restricted by this amount.
18 Net debt reconciliation
Cash at
bankand
inhand
£’000
Bank loans
and overdraft
repayable
within one
year
£’000
Total
£’000
Net debt as at 31 October 2023 2,315 (10,169) (7,854)
Cash flows (224) 3,168 2,944
Net debt as at 31 October 2024 2,091 (7,001) (4,910)
70
Henderson Opportunities Trust plc Annual Report 2024
18 Net debt reconciliation (continued)
Cash at
bankand
inhand
£’000
Bank loans
and overdraft
repayable
within one
year
£’000
Total
£’000
Net debt as at 31 October 2022 1,219 (14,106) (12,887)
Cash flows 1,096 3,937 5,033
Net debt as at 31 October 2023 2,315 (10,169) (7,854)
19 Net asset value per ordinary share – basic and diluted
The net asset value per ordinary share at the year end was 235.46p (2023: 207.04p*). The net asset value per ordinary
share is based on the net assets attributable to the ordinary shares of £92,989,000 (2023: £81,765,000) and on the
39,491,875 ordinary shares in issue at 31 October 2024 (2023: 39,491,875*). There are no dilutive securities so the basic
anddiluted net asset value per ordinary share are the same.
The movements during the year of the assets attributable to the ordinary shares were as follows:
2024
£’000
2023
£’000
Total net assets at 1 November 81,765 92,701
Total net profit/(loss) 14,022 (8,172)
Dividends paid in the year (2,798) (2,764)
Total net assets at 31 October 92,989 81,765
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary
share of 25p into five ordinary shares of 5p each on 11 March 2024.
20 Capital commitments and contingent commitments
Capital commitments
There were no capital commitments at 31 October 2024 (2023: none).
Contingent commitments
As at 31 October 2024 there were no contingent commitments (2023: none).
21 Transactions with Janus Henderson
The Board entered into an updated and restated management agreement with Janus Henderson Fund Management
UK Limited as Manager effective from 25 June 2024. The updates reflect current regulation and industry standards
since the previous agreement was implemented in July 2014. There were no changes to terms affecting the relationship
with the Manager. Under the terms of the agreement, the Company appointed a wholly owned subsidiary company of
JanusHenderson to provide investment management, accounting, administrative and corporate secretarial services.
Janus Henderson has contracted with BNP Paribas to provide accounting and administration services.
Details of the management fee arrangements for these services are given in the Strategic Report on page 18.
Thetotalof the management fees paid or payable under this agreement to Janus Henderson in respect of the year
ended 31October 2024 was £514,000 (2023: £502,000) of which £302,000 was outstanding at 31 October 2024
(2023:£161,000). With effect from 20 October 2023, the performance fee was removed.
Janus Henderson also provides certain sales and marketing services for which there is no separate charge.
In addition to the above, Janus Henderson facilitates marketing activities with third parties which are recharged
byJanus Henderson to the Company. The total amount in respect of these third party marketing activities for the year
ended 31October 2024 amounted to £13,000 (2023: £20,000) of which £5,000 was outstanding at 31 October 2024
(2023:£10,000).
Details of fees paid to Directors are included in the Directors’ remuneration report on page 42 and in Note 6 on
page62.
Notes to the Financial Statements (continued)
71
Henderson Opportunities Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
22 Subsequent events
Subsequent to the year end, on 18 December 2024, the Company received a requisition notice in respect of shares
beneficially owned by Saba Capital Management, L.P. The resolutions to be put to shareholders at the Requisitioned
General Meeting, which was subsequently held on 4 February 2025, comprised the removal of all four of the
independent directors of the Company and the appointment of two new directors proposed by Saba. The majority
ofshareholders voted against the Resolutions proposed by Saba on 4 February 2025.
Before the Requisition was received, the Board, in light of the Company’s longer-term NAV and share price
performance, as well as size, had already instructed advisers to commence work on putting forward a scheme of
reconstruction to give all shareholders the choice between ongoing investment in an open-ended investment company
managed by Janus Henderson, and an unlimited cash exit at NAV. The Board subsequently published a circular on
3February 2025 including details of the proposed reconstruction and members’ voluntary winding-up of the Company,
through a scheme of reconstruction under Section 110 of the Insolvency Act 1986, with general meetings to be held in
respect of the Scheme on 21 February 2025 and 14 March 2025.
72
Henderson Opportunities Trust plc Annual Report 2024
Additional
information
Alternative Investment Fund Managers
Directive (“AIFMD”)
Agreed by the European Parliament and the Council of the
European Union and adopted into UK legislation, 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
theoperations of the investment vehicle. The Board of the
Company retains responsibility for strategy, operations and
compliance and the Directors retain a fiduciary duty to
shareholders.
Alternative performance measures
A glossary of alternative performance measures (including
discount, premium, net gearing, NAV per ordinary share,
ongoing charge, revenue return per share, total return and
dividend yield) can be found on pages 76 and 77.
Association of Investment Companies
(“AIC”)
The Company is a member of the AIC which is the trade body
for investment companies and represents the industry in
relation to various matters which impact the regulation of such
entities. The Company is in the UK All Companies Sector.
Benchmark
An index against which performance is compared. For the
Company this is the FTSE All-Share Index.
Custodian
The Custodian is responsible for ensuring the safe custody
ofthe Company’s assets and that all transactions in the
underlying holdings are transacted in an accurate and
timelymanner.
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 isresponsible 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 ithas
discharged its liability in certain markets. TheDepositary has
confirmed that it did not discharge liability inrelation to any of
the Company’s assets in the year under review.
Derivative
A contract between two or more parties in relation to an
underlying security. The value of a derivative will fluctuate in
accordance with the value of the security and is a form of
gearing as the fluctuations in value are usually greater than the
fluctuations in the underlying security’s value. Examples of
derivatives are put and call options, swap contracts, futures
and contracts for difference. Foreign exchange, interest rates
and commodities may also be traded usingderivative
contracts.
Dividend dates
When declared or announced, each dividend will have three
keydates 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
Registrar 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 upon which the Company’s NAV and
share price will be disclosed ex-dividend.
Investment trusts
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 fromtax on the capital gains arising on
theirinvestments subject tomeeting 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 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 will tend to depress the price that might be
negotiated for a sale.
Glossary
Henderson Opportunities Trust plc Annual Report 2024
74
Market capitalisation
The market value of a company, calculated by multiplying the
mid-market price per share by the number of shares in issue.
Securities financing transactions
Securities financing transactions include activities such as
repurchase agreements, securities or commodities lending,
securities or commodities borrowing, buy or sell back
transactions and margin lending transactions. When a
company carries out such activities, there are disclosures
thatare required to be made under Regulation (EU) 2015-
2365. The Company carries out stock lending activities, so
needs todisclose the following under these regulations: the
value of securities as a proportion of total lendable assets
andnet assets (“Global Data”), the ten largest collateral
issuersand counterparties (“Concentration Data”), a summary
by counterparty of collateral received from securities on
loan(“Aggregate Transaction Data”), whether any re-use of
collateral is carried out and the gross income and costs
fromsecurities lending (“Return and Cost”).
Treasury shares
Shares repurchased by the Company but not cancelled.
Glossary (continued)
Henderson Opportunities Trust plc Annual Report 2024
75
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 and benchmark.
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 ordinary share.
31 October
2024
31 October
2023
Net asset value per ordinary share (pence) (A) 235.5 207.0*
Share price per share (pence) (B) 212.0 173.0*
(Discount) or premium (C=(B-A)/A) (%) (C) (10.0) (16.4)
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary share of
25p into five ordinary shares of 5p each on 11 March 2024.
Net gearing
The net gearing reflects the amount of borrowings (see Note 14) (i.e. bank loans or overdrafts) the Company has used to invest in
the market less cash and investment in cash funds (see Statement of Financial Position), divided by net assets.
2024 2023
Bank loans or overdrafts (Note 14) (£’000) (A) 7,001 10,169
Less:
Cash at bank and in hand (B) (2,091) (2,315)
Investment in cash funds (C) (2) (2)
Net gearing (£’000) (D) 4,908 7,852
Net assets (see page 56) (£’000) (E) 92,989 81,765
Gearing (F=D/E) (%) (F) 5.3 9.6
NAV per ordinary share
The value of the Company’s assets (i.e. investments held at fair value through profit or loss (see Note 11) and cash held (see
Statement of Financial Position)) less any liabilities (i.e. bank borrowings (see Note 14)) for which the Company is responsible
divided by the number of shares in issue (see Note 16). The aggregate NAV is also referred to as total 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 page1
and further information is available on page 71 in Note 19 within the Notes to the Financial Statements.
Alternative performance measures (unaudited)
76
Henderson Opportunities Trust plc Annual Report 2024
Alternative performance measures (unaudited)
(continued)
Ongoing charges
2024
£’000
2023
£’000
Management fee (Note 5) 514 502
Other administrative expenses (Note 6) 452 466
Less non-recurring administrative expenses (3) –
Total 963 968
Average net assets
1
93,721 94,737
Ongoing charge ratio 1.03% 1.02%
1 Calculated using the average daily net asset value
Revenue return per share
The revenue return 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 (see Note 9 on page 63).
Total return
The return on the share price or NAV taking into account both the rise and 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 pages 63
and 64.
NAV per share Share price
NAV/share price per share at 31 October 2023 (pence) 207.0 173.0*
NAV/share price per share at 31 October 2024 (pence) 235.5 212.0*
Change in the year (%) 13.8 22.5
Impact of dividends reinvested (%) 3.1 3.6
Total return for the year (%) 17.1 26.9
Dividend yield
The yield is the annual dividend expressed as a percentage of the year end share price.
31 October
2024
31 October
2023
Annual dividend (pence) (A) 7.1 7.1*
Share price (pence) (B) 212.0 173.0*
Yield (C=A/B) (%) (C) 3.3 4.1
* Comparative figures for the period ended 31 October 2023 have been restated due to the sub-division of each ordinary share
of 25p into five ordinary shares of 5p each on 11 March 2024.
77
Henderson Opportunities Trust plc Annual Report 2024
The Company engages in securities financing transactions (as defined in Article 3 of Regulation (EU) 2015-2365, securities
financing transactions include repurchase transactions, securities or commodities lending and securities or commodities
borrowing, buy-sell back transactions or sell-buy back transactions and margin lending transactions). In accordance with Article
13 of the Regulation, the Company’s involvement in and exposures related to securities lending for the year ended 31 October
2024 are detailed below.
Global data
The amount of securities on loan as a proportion of total lendable assets and the Company’s net assets as at 31 October 2024
are disclosed below:
Stocklending
Market value of securities on loan £’000 % of lendable assets % of assets under management
14,833 15.10 15.95
Concentration data
The ten largest collateral issuers across all the securities financing transactions as at 31 October 2024 are disclosed below:
Issuer
Market value of
collateral
received
£’000
Government of Japan 8,365
UK Treasury 5,370
Imperial Tobacco 153
Microsoft 147
Barratt Developments 115
Halma 115
Hargreaves Lansdown 115
Shopify 115
Restaurant Brand 115
Brookfield 115
14,725
The top ten counterparties of each type of securities financing transactions as at 31 October 2024 are disclosed below:
Counterparty
Market value of
securities on
loan
£’000
Goldman Sachs 5,114
Barclays 2,430
Merrill Lynch International 2,100
Morgan Stanley 1,728
Citi Group 1,684
Bank of Nova Scotia 1,087
JP Morgan 392
UBS 145
BNP Paribas 128
HSBC 25
14,833
All counterparties have been included.
Securities financing transactions (unaudited)
78
Henderson Opportunities Trust plc Annual Report 2024
Aggregate transaction data
The following table discloses a summary of aggregate transaction data related to the collateral received from securities on loan
as at 31October 2024:
Stock lending
Counterparty
Counterparty
country of origin Type Quality
Collateral
currency
Settlement
basis Custodian
Market value of
collateral
received
£’000
BNP Paribas France Equity Main Market Listing HKD Tri-par ty HSBC 14
Equity Main Market Listing JPY Tri-party HSBC 68
Equity Main Market Listing EUR Tri-par ty HSBC 54
Barclays United Kingdom Government Debt Investment Grade JPY Tri-party HSBC 2,574
Citi Group United Kingdom Government Debt Main Market Listing JPY Tri-par t y HSBC 1,769
Goldman Sachs United Kingdom UK Gilts Main Market Listing GBP Tri-par ty HSBC 5,370
HSBC Hong Kong Equity Main Market Listing GBP Tri-par t y HSBC 26
UK Gilts Main Market Listing GBP Tri-par ty HSBC 26
JP Morgan United Kingdom Equity Main Market Listing GBP Tri-par t y HSBC 213
Equity Main Market Listing USD Tri-par ty HSBC 124
Equity Main Market Listing EUR Tri-par ty HSBC 78
Merrill Lynch United Kingdom Government Debt Main Market Listing JPY Tri-par ty HSBC 2,207
Morgan Stanley United Kingdom Government Debt Investment Grade JPY Tri-party HSBC 1,815
Bank of Nova
Scotia Canada Equity Main Market Listing USD Tri-party HSBC 230
Equity Main Market Listing CAD Tri-party HSBC 461
Equity Main Market Listing GBP Tri-par t y HSBC 462
UBS Switzerland Equity Main Market Listing HKD Tri-par ty HSBC 31
Equity Main Market Listing USD Tri-par ty HSBC 46
Equity Main Market Listing EUR Tri-par ty HSBC 31
Equity Main Market Listing JPY Tri-party HSBC 5
Equity Main Market Listing SGD Tri-par ty HSBC 12
Equity Main Market Listing AUD Tri-par t y HSBC 30
15,646
Re-use of collateral
The Company does not engage in any re-use of collateral.
Return and cost
The return and cost of engaging in securities lending by the Company and the securities lending agent in absolute terms and as
a percentage of overall returns are disclosed below:
Total gross amount of
securities lending income
£’000
Direct and indirect costs and
fees deducted by securities
lending agent
£’000
% return of the securities
lending agent
Net securities lending
income retained by the
Company
£’000 % return of the Company
286 57 20 229 80
Securities financing transactions (unaudited)
(continued)
79
Henderson Opportunities Trust plc Annual Report 2024
General shareholder information
AIFMD disclosures and remuneration
In accordance with the AIFMD, information in relation to the
Company’s leverage and remuneration of Janus Henderson
Fund Management UK Limited, as the Company’s AIFM is
required to be made available to investors. These disclosures,
including those onthe AIFM’s remuneration policy, are
contained inaseparatedocument “AIFMD Disclosure” which
canbefound onthe Company’s website
www.hendersonopportunitiestrust.com.
BACS
Dividends can be paid to shareholders by means of BACS
(Bankers’ Automated Clearing Services); mandate forms for
this purpose areavailable from the Registrar. Alternatively,
shareholders can writeto the Registrar (the address is given
on page 81) to give their instructions; these must include the
bank account number, the bank account title and the sort
code of the bank to which payments are tobe made.
Common Reporting Standard (“CRS”)
Tax legislation requires the Company toprovide personal
information to HMRC on certain investors whopurchase
shares in investment trusts. This information has to be
provided annually to the local tax authority of the tax
residencies ofanumber of non-UK based certificated
shareholders and corporate entities.
Equality Act
Copies of this report and other documents issued by the
Company are available from the Corporate Secretary. If
needed, copies can be made available in a variety of formats,
including Braille or larger type as appropriate.
A `typetalk’ operator, provided by the Royal National Institute
for Deaf People, is available to support speech and hearing-
impaired people to make telephone calls. Please dial 18001
followed by the number you wish to dial.
Foreign Account Tax Compliance
Act(“FATCA”)
FATCA is a United States federal law with the purpose of
enforcing the requirement for United States persons (including
those living outside the USA) to file yearly reports on their non-
USA financial accounts. Investment trusts need to monitor
each year the trading volume and frequency of their shares
and securities to assess whether they have financial accounts.
The Company makes an annual assessment, before the
FATCA return is due, to determine if the shares represent
financial accounts and, where they do, identify and
reportUSA reportable accounts to HMRC, as required.
General Data Protection Regulation
(“GDPR”)
A privacy statement can be found on the website
www.janushenderson.com.
ISA
The Company intends to continue to manage its affairs in
order to qualify as an eligible investment for a stocks and
shares ISA.
Non-Mainstream Pooled Investment
(“NMPI”) status
The Company currently conducts its affairs so that its ordinary
shares of 5p each can be recommended by IFAs and wealth
managers to ordinary retail investors in accordance with the
FCA’s rules in relation to non-mainstream investment products
and intends to continue 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.
Performance details/share price
information
Details of the Company’s share price and NAV per
sharecanbefoundon the website. The address is
www.hendersonopportunitiestrust.com.
TheCompany’s NAV is published daily.
The market price of the Company’s shares can also be found
in the London Stock Exchange Daily Official List.
Shareholder details
Shareholders who hold their shares in certificated form
cancheck their shareholding with the Registrar via
www.investorcentre.co.uk.
Please note that to gain access to your details on the
Computershare 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 for
which economic activities can be considered environmentally
sustainable. In accordance with the Taxonomy Regulation,
theCompany states that the investments underlying this
financial product do not take into account the EU criteria for
environmentally sustainable economic activities.
Henderson Opportunities Trust plc Annual Report 2024
80
Henderson Opportunities Trust plc Annual Report 2024
Strategic Report
Performance highlights 1
Chairman’s statement 3-4
Fund Managers’ report 5-7
Twenty largest holdings 9-10
Investment portfolio 11-12
Portfolio information 13
Historical record 14
Key performance indicators 15
Business model 16-26
Our approach to ESG matters 27-28
Governance
Board of Directors 30
Corporate governance
report 31-37
Audit and Risk Committee
report 38-40
Directors’ remuneration
report 41-43
Directors’ report 44-45
Statement of Directors’
responsibilities 46
Financial Statements
Independent Auditor’s Report 48-53
Income Statement 54
Statement of Changes in Equity 55
Statement of Financial Position 56
Statement of Cash Flows 57
Notes to the Financial
Statements 58-72
Additional information
Glossary 74-75
Alternative performance
measures 76-77
Securities financing
transactions 78-79
General shareholder
information 80
Corporate information 81
Strategic
Report
To receive insights into the Company
scan the QR code and register with
Janus Henderson
Investment
Objective
The Company aims to achieve
capital growth in excess of
the FTSE All-Share Index from
a portfolio of primarily UK
investments.
Henderson Opportunities Trust plc Annual Report 2024
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 very persistent and extremely
persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount
or offers of free company reports.
Please note that it is very unlikely that either the Company or the Company’s Registrar, Computershare Investor Services
plc, would make unsolicited telephone calls to shareholders and that 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 81. You can also check the FCA Warning List at #BeScamSmart https://www.fca.org.uk/scamsmart.
Registered office
201 Bishopsgate
London EC2M 3AE
Service providers
Alternative Investment Fund Manager
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
Email: itsecretariat@janushenderson.com
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Broker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Registrar
Computershare Investor Services plc
The Pavillions
Bridgewater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1059
Email: WebCorres@computershare.co.uk
Investors with share certificates (i.e. not those in
ashareplanor ISA) can check their holdings at
www.investorcentre.co.uk.
Independent auditor
BDO LLP
55 Baker Street
London W1U 7EU
Financial calendar
Annual results announced February 2025
Fourth interim dividend ex dividend date 20 February 2025
Fourth Interim dividend record date 21 February 2025
First General Meeting 21 February 2025
Fourth interim dividend payable on 11 March 2025
Second General Meeting 14 March 2025
Information sources
For more information about Henderson Opportunities Trust plc,
visit the website atwww.hendersonopportunitiestrust.com.
To receive regular insights on investment trusts from the
Manager, visit: https://www.janushenderson.com/en-gb/
investor/subscriptions/ or scan the QR code and register
with Janus Henderson.
Follow Janus Henderson Investment Trusts LinkedIn –
Janus Henderson Investment Trusts, UK.
Investing
Shares can be purchased in the market via a stockbroker
orthrough 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 receive back the full amount invested.
Taxbenefits may vary as a result of statutory changes and
their value will depend onindividual circumstances.
Corporate information
81
Henderson
Opportunities
Trust plc
Annual Report 2024
JHI9216/2024Henderson Opportunities Trust plc – Annual Report 2024
Henderson Opportunities Trust plc
Registered as an investment company in England and Wales
Registration number 01940906
Registered office: 201 Bishopsgate, London EC2M 3AE
SEDOL/ISIN number: BSHRGN4/GB00BSHRGN41
London Stock Exchange (TIDM) Code: HOT
Legal Entity Identifier (LEI): 2138005D884NPGHFQS77
Global Intermediary Identification Number (GIIN): LVAHJH.99999.SL.826
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.hendersonopportunitiestrust.com
JHI9216/2024Designed and typeset by 2112 Communications, London Printed by Paragon, London.
This report is printed on Revive silk 100% recycled, contains 100% recycled waste and
ismanufactured at a mill certified with ISO 14001 environmental management standard.
The pulp used in this product is bleached using an Elemental Chlorine Free process (ECF).