Henderson
High Income
Trust plc
Annual Report 2024
JHI9212/2024Henderson High Income Trust plc – Annual Report 2024
Henderson High Income Trust plc
Registered as an investment company in England and Wales
with registration number 02422514
Registered office: 201 Bishopsgate, London EC2M 3AE
SEDOL number: 0958057
ISIN number: GB0009580571
London Stock Exchange (TIDM) Code: HHI
Global Intermediary Identification Number (GIIN): JBA08I.99999.SL.826
Legal Entity Identifier Number (LEI): 213800OEXAGFSF7Y6G11
www.hendersonhighincome.com
JHI9212/2024Designed 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).
Seeking superior
income generation
and long-term
capital growth
Henderson High Income Trust plc Annual Report 2024
Strategic Report
Performance Highlights 5
Chairman’s Statement 8
Fund Manager’s Report 12
Portfolio and
Financial Information 17
Business Model 23
Managing Risks 27
Viability Statement 29
Key Performance
Indicators 30
Governance
Board of Directors 36
Corporate Governance
Report 38
Audit and Risk
Committee Report 43
Management Engagement
Committee Report 46
Nominations and
Remuneration
Committee Report 47
Directors’ Remuneration
Report 48
Directors’ Report 51
Statement of Directors’
Responsibilities 52
Financial
Statements
Independent Auditor’s
Report 54
Income Statement 61
Statement of Changes
inEquity 62
Statement of Financial
Position 63
Statement of Cash
Flows 64
Notes to the Financial
Statements 65
Additional
Shareholder
Information
Glossary 82
Alternative Performance
Measures 83
General Shareholder
Information 85
Corporate Information 86
Objective
The Company invests in a prudently
diversified selection of both well-
known and smaller companies to
provide investors with a high dividend
income stream while also maintaining
the prospect of capital growth.
The Henderson
High Income
Story
1
The Company invests in a prudently diversified selection of both well-known and smaller companies to provide investors with
ahigh dividend income stream while also maintaining the prospect of capital growth. To gain a full understanding of these
companies, the stock selection process places emphasis on examining what each company does, its market position and
thedynamics of that market. Combining this with analysis of the company’s financial health provides valuable insight into the
company’s ability to not only sustain its dividend but grow it in the long-term, a crucial element for generating total returns for
shareholders. The stock selection process is broken down into three key component parts: fundamentals, financials and valuation.
Fundamentals
Understanding a
company’s key
attributes
Financials
Analysing its
financial health
Valuation
Assessing whether
those qualities are
discounted in
share prices
Fundamentals
Analysing a company’s fundamentals is the starting point to
understanding its qualities and whether its business is robust
in the long-term. Emphasis is placed on assessing the
company’s strength of industry position, barriers to entry,
senior management and their ability to sustain or improve a
company’s performance. Greater weight is given to long-term
views over short-term considerations andtrends in the market
or sector.
The following key attributes are typically looked for:
●
Robust and understandable business models
●
Good earnings visibility
●
High barriers to entry
●
Market leadership
●
Strong franchise
●
Good Environmental, Social and Governance (ESG)
riskmanagement
●
Proven management teams
Financials
The second step is to gain a clear understanding of the
company’s financial health and its ability to invest for future
growth, sustain profitability and return value to shareholders.
In particular, focus is given to:
●
Sustainability of profits
●
Robust balance sheets
●
Well-invested asset base
●
Strong cash generation
●
Sensible dividend policy
Valuation
Valuation is the final part of analysing a company but
underpins the whole process. Even when companies with
strong fundamentals and financials are found, their valuations
also need to be attractive, otherwise capital appreciation may
be limited. Various valuation metrics are used, such as price
to earnings ratios, to assess whether the qualities we have
identified in acompany are already discounted in the current
shareprice.
By applying this disciplined stock selection process, the
Company benefits from a well-diversified portfolio of good
quality companies in strong financial health that can pay and
grow their dividends, but also offer the potential for capital
growth over the long term.
What we look for in companies
Henderson High Income Trust plc Annual Report 2024
2
Source: Henderson High Income Trust plc’s Annual Reports
1 Computershare UK Dividend Monitor
Challenges for UK income investors
Overall market dividends fell by 0.4% in 2024 on an underlying
basis
1
(ex special dividends and at constant currency).
Despite77% of companies in the UK market either growing their
dividends or holding them flat, this was offset by the large
mining companies reducing their dividends during the year.
Thishighlights the concentration challenge for UK income
investors. The top 20 dividend payers in the UK produced 73%
of the FTSE 100 Index’s income in 2024. This becomes a
problem if the dividends of those top 20 companies are
unsustainable. The Company deals with this concentration issue
by constructing a well-diversified portfolio, making sure that the
revenue account is not overly reliant on any one company or
sector for income. This materially lowers income concentration
for the Company, with those same top 20 companies only
contributing around 34% of aggregate income for the Company.
Concentration of income
Henderson High Income
Contribution to income from top 20
paying companies in FTSE 100 Index
Dividend
Yield (RHS)
(%) (%)
0
10
20
30
40
50
60
70
80
FTSE 100 Index
0
1
2
3
4
5
6
7
Source: Janus Henderson and LSEG Datastream
Utilising Henderson High Income’s
unique structure
Henderson High
Income
Bonds
Alternative
Income
Trusts
Gearing
Overseas
Diversified
Portfolio
Revenue
Reserves
Mid-cap
exposure
While maintaining a diversified portfolio is key, the Company
can also utilise its unique structure and invest in fixed interest
securities to diversify further its income generation. Bond
interest paid by companies is usually more sustainable than
dividends during times of economic stress, hence having the
ability to allocate towards bonds provides a valuable source
ofdifferentiated income.
The Company also has a number of other ways to diversify its
income by utilising its structure:
●
It can invest 30% of gross assets in overseas markets.
●
It can invest in listed alternative income investment trusts,
such as renewables infrastructure funds.
●
It can invest a larger proportion in medium sized
companies given its size relative to much larger
competitors.
Revenue reserves
One of the main advantages of investment trusts is the
abilityto retain surplus income to create revenue reserves.
TheCompany can add to these reserves in profitable years
and pay them out in the leaner years, thereby smoothing
thelevel of dividend payments when appropriate.
TheCompany was able to utilise its reserves in 2020 and
2021to continue to pay and grow its own dividend despite the
significant dividend cuts and suspensions experienced across
the UK market during the pandemic.
In 2024 the Company paid dividends totalling 10.6p, growth
of2.4% on 2023, its twelfth consecutive year of dividend
growth. The Company fully covered the dividend from
earningswith a small surplus carried to revenue reserves,
which increased to £10.2 million. With a diversified portfolio
and healthy level of revenue reserves, the Company is in a
good position goingforward.
Twelve years of consecutive dividend growth
18 19 20 21 22 24231712 13 14 15 16
(Pence per share)
2.1% CAGR
Dividend
6
7
8
9
10
11
12
Source: Janus Henderson
Diversification of income
Henderson High Income Trust plc Annual Report 2024
3
Performance
Highlights
4
Total return performance to 31December 2024
One year
(%)
0
2
4
6
8
10
12
Benchmark¹ NAV² Share price
3
7.9
10.8
9.4
Premium/discount over 5 years to 31December 2024
4
-12
-10
-8
-6
-4
-2
0
2
4
31 Dec
2020
31 Dec
2024
31 Dec
2021
31 Dec
2023
31 Dec
2022
(%)
Five years
0
5
10
15
20
25
30
Benchmark¹ NAV² Share price
3
25.1
16.5
20.6
(%)
Dividend yields as at 31December 2024
5
(%)
0
1
2
3
4
5
6
7
FTSE
All-Share
Index
ICE BofA
Sterling
Non-Gilt
Index
6
10 Year
Gilts
6
Cash
7
Henderson
High Income
4.6
5.4
6.5
3.6
4.7
Attribution
8
– explanation of movement in net asset value (total return) in 2024
12.0
10.0
8.0
6.0
4.0
2.0
0.0
(%)
Benchmark
1
Asset
Allocation
Stock
Selection –
Equities
Stock
Selection –
Fixed Income
Gearing Ongoing
Charges
Share
Issuance
Performance
of Net Asset Value
2
7.9
0.8
0.6
1.5
0.4
-0.7
9.4
-0.5
Strategic Report: Performance Highlights
1 The benchmark is a composite of 80% of the FTSE All-Share Index (total return) and 20% of the ICE BofA Sterling Non-Gilts Index (total return) rebalanced annually
2 Net asset value with debt at fair value per ordinary share total return (including dividends reinvested and excluding transaction costs)
3 Includes dividends reinvested
4 Premium/discount based on net asset value with debt at fair value
5 Alternative Performance Measure, see page 84
6 Gross redemption yield
7 Cash based on SONIA (Sterling Overnight Index Average) Interest Rate Benchmark
8 Geometric returns
A Glossary of Terms and Alternative Performance Measures can be found on page 82 and pages 83 to 84 respectively
Sources: Morningstar Direct, Janus Henderson. All data is either as at 31 December 2024 or for the year-ended 31 December 2024
Henderson High Income Trust plc Annual Report 2024
5
NAV per share
1,4
2024174.72p
2023 169.58p
Revenue return per share
2024 10.74p
2023 10.39p
Dividend for the year
2024 10.60p
2023 10.35p
Ongoing charge for the year
3,4
2024 0.74%
2023 0.86%
Mid-market price per share
2024 162.50p
2023 156.50p
Net assets
2024 £303.2m
2023 £222.3m
Dividend yield
2,4
2024 6.5%
2023 6.6%
Gearing
4
2024 21.0%
2023 21.4%
1 Net asset value with debt at fair value as published by the Association of Investment Companies (AIC)
2 Based on the dividends paid or announced for the year and the share price at the year-end
3 Calculated using the methodology prescribed by the AIC
4 Alternative Performance Measure, see pages 83 to 84
A Glossary of Terms and Alternative Performance Measures can be found on page 82 and pages 83 to 84 respectively
Sources: Morningstar Direct, Janus Henderson. All data is either as at 31 December 2024 or for the year-ended 31 December 2024
Strategic Report: Performance Highlights (continued)
Henderson High Income Trust plc Annual Report 2024
6
Chairman’s
Statement
7
Strategic Report: Chairman’s Statement
Performance
I am pleased to be reporting on a positive year of investment
performance for Henderson High Income Trust. In 2024,
theCompany’s Net Asset Value (NAV) total return was
+9.4%compared with the benchmark return of +7.9%,
outperformance of +1.5%. The Company’s share price total
return was a little higher at +10.8% with the share price ending
the year at a discount of 7.0% to NAV, compared with the
average discount for the UK equity income sector of 5.6% at
the end of 2024.
The year was characterised by continuing volatility in financial
markets, ongoing geopolitical turmoil and of course the
outcome of both the UK general election in July and the
USPresidential Election in November. Global inflationary
pressures abated as the year progressed which enabled policy
makers to lower interest rates and provide a boost to financial
asset valuations. Overall equity returns were better than bond
returns although from a geographical perspective the returns
from UK equities were lower than those from theUS.
The Company’s outperformance during 2024 versus the
benchmark (80% FTSE All-Share Index, 20% ICE BofA Sterling
Non-Gilts Index) was mainly due to asset allocation, gearing
and a good relative return from the fixed interest portfolio.
Dividends
The Company’s investment objective is to provide investors
with a high dividend income stream while also maintaining
theprospect of capital growth. In 2024, company dividend
payouts remained robust given the strength of corporate
balance sheets and healthy ongoing profitability. I am pleased
to report that the Company’s overall earnings during the year
were sufficient to cover the full year dividend and a small
amount was added to the revenue reserves. At the year-end
reserves were sufficient to cover approximately six months
ofthe full year dividend.
During 2024 the Board recommended the payment of
dividends totalling 10.6 pence per share, an increase of 2.4%
over the payment in 2023. This increase represented the
12thconsecutive year of dividend growth from the Company.
As usual the Board focused carefully on the revenue
projections provided by the Fund Manager throughout the
year and as we look forward the Board remains confident that
the Company’s portfolio will be able to generate a continuing
high level of income for shareholders.
Gearing
The Company’s policy on gearing is provided on page 23 ofthe
Annual Report. Given higher interest rates and the increased
cost of borrowing, the Board spent a good deal of time during
the year discussing and evaluating with the Fund Manager the
appropriate level of gearing to reflect the increased cost burden
whilst ensuring that the overall capital structure could continue
to deliver the required levels of income.
During 2024 the overall level of gearing remained in line with the
level prevailing at the end of 2023 although the absolute level of
borrowings increased due to the growth in the Company’s size
following the combination with Henderson Diversified Income
Trust plc in January 2024 (see below). As a percentage of net
assets, gearing finished the year at 21.0% which was a little
lower than the level at the start of 2024, and gearing is
expected to remain around this level in the near term.
Overall, asset allocation saw the Company continue to prefer
equities over fixed interest investments with approximately
89% in equities and 11% in bonds at the year end (compared
with the benchmark of 80% equities/20% bonds).
In December 2024 the Company renewed its loan facility of up
to £85 million with BNP Paribas, London Branch. The facility
has a duration of 12 months and the terms on which the
facility was renewed remain competitive.
Combination with Henderson Diversified
Income Trust plc (HDIV)
As previously reported the Company was able to issue some
£72.1 million of new shares in January 2024 to shareholders
inHDIV. The increase in size of the Company will help to improve
the liquidity and marketability in the Company’s shares and help
to spread the Company’s fixed costs across a larger shareholder
base which is in the interests of all ourshareholders.
In this respect I am pleased to say that the ongoing charge
ratio for 2024 reflects the benefits of the Company’s larger
size at 0.74% versus the ongoing charge of 0.86% in 2023.
Continuation Vote
The Company’s Articles of Association provide that
shareholders should have the opportunity every fifth year to
vote on whether they wish to continue the life of the Company
or to wind it up. Shareholders will, therefore, be asked to vote
on this at the forthcoming AGM, as an ordinary resolution,
which requires a majority vote in favour to pass. The Board
strongly recommends that you vote in favour so the Company
can continue its objective of providing a regular high level of
income while maintaining the prospect of capital growth over
time. If the resolution fails to pass, the Board would be
required to wind up the Company. If you are in any doubt as
to what action you should take, please consult your financial
advisor. The Directors will be voting their own holdings in
favour and encourage all other shareholders to do the same.
Jeremy Rigg
Chairman
Henderson High Income Trust plc Annual Report 2024
8
Strategic Report: Chairman’s Statement (continued)
Management Fee Arrangements
The Board regularly reviews the fee arrangements with
theCompany’s Fund Manager to ensure that they remain
competitive, particularly in the context of fees payable by
similar UK equity income focused trusts.
In this respect the Company has agreed with the Manager
that the fee scale will be lowered to a flat 0.45% of average
adjusted gross assets per annum (previously 0.5% on the first
£325 million of assets, 0.45% on assets above £325 million).
The amended fee scale will apply from 1 January 2025.
Share buybacks
During the course of 2024 the Board regularly reviewed the
Company’s share price discount to NAV, particularly in the
context of discounts prevailing across the wider UK equity
income sector. The Company’s discount at the start of 2024 was
7.7% and finished the year at 7.0%, compared with the average
discount at the end of 2024 of 5.6% for the UK equity income
sector. During the course of the year the discount widened,
then narrowed in as the year drew to a close, but in the early
part of 2025 had widened out again. In line with other trusts
inthe sector the Board has commenced buying back shares
and as at 24 March 2025 the Company has purchased
960,130 shares representing 0.56% of the issued share
capital. Theshares will be held in treasury. The Board will
continue to monitor closely the prevailing discount to NAV and
the Company will continue to buy back shares if in the opinion
of the Board it is appropriate to do so in the best interests of
shareholders.
The Board
Zoe King will be retiring as a Director in May at the conclusion
of the Company’s AGM. Zoe joined the Board in April 2016
and has served as the Senior Independent Director since
June 2020. During that time the Company has undertaken
two successful corporate transactions with Threadneedle UK
Select in 2017 and the recent HDIV combination in 2024 and
of course has negotiated the challenging COVID period.
Onbehalf of shareholders and directors past and present
Iwould like to thank Zoe for her commitment, diligence and
wise counsel during her tenure and we wish her well in her
future endeavours. Francesca Ecsery who joined the Board in
December 2022 will become the Senior Independent Director
and Chairman of the Nominations and Remuneration
Committee on Zoe’s departure.
At the end of 2024 the Company welcomed Preeti Rathi
asaDirector. Preeti has 15 years’ experience in wealth
management as an Investment Director/Discretionary Portfolio
Manager with Bank of America Merrill Lynch, Kleinwort
Benson Private Bank and Investec Wealth & Investment
across a broad range of asset classes. Her appointment will
ensure that the Board retains the right balance of skills and
expertise to successfully administer the Company’s business.
Responsible investing
Responsible investing relates to how environmental, social
and corporate governance (ESG) factors impact a company
over the long term. Analysis of the resilience of a business
andits profits has always been at the core of the Company’s
investment strategy, and ESG factors are integrated into the
investment processes employed by the Fund Manager.
The Board believes that voting the Company’s shareholdings
at general meetings is essential to good corporate stewardship
and is an effective means of expressing its views on the
policies and practices of its investee companies. Voting
decisions reflect the provisions of Janus Henderson’s
Responsibility Report and Responsible Investment Policy
which are publicly available at www.janushenderson.com
and records the high standards of corporate behaviour that are
expected. Ultimately, however, our Fund Manager makes the
final decision after consultation with the Board, as necessary.
Janus Henderson will actively engage with those companies
that fall below such expectations to encourage improvement
over time. The final sanction is the divestment of those
holdings that fail to make an acceptable transition and adapt
sufficiently. The Board monitors the process by reviewing a
report on the Company’s voting pattern on an annual basis.
For an overview on how Janus Henderson engaged with
companies in which the Company is invested, please refer to
the ESG Section in the Annual Report.
AGM
We look forward to seeing as many of our shareholders
aspossible at our AGM which will be held at 12 noon on
Tuesday, 13 May 2025 at the offices of Janus Henderson
at201 Bishopsgate, London EC2M 3AE.
David Smith, the Company’s Fund Manager, will give a
presentation on the Company’s portfolio and performance,
and you will, as usual, have the opportunity to talk to the
Board, David and other Janus Henderson representatives.
Wevery much welcome your comments and questions
attheAGM and we would encourage those of you who
areunable to attend in person to use your proxy votes
andtowatch the AGM live by logging onto
www.janushenderson.com/hhi-agm.
Prospects and outlook
As we entered 2025 with continuing volatility in financial
markets, the re-election of President Trump to the White
House has provided a rather unpredictable backdrop to the
global economy. In particular, the widespread imposition of
tariffs on America’s trading partners has caused inflation and
interest rate expectations to remain higher with a potentially
negative impact on global economic activity and there has
been a significant financial impact across Europe from the
decision to substantially increase defence spending
commitments in light of the situation in Ukraine.
Henderson High Income Trust plc Annual Report 2024
9
Closer to home in the UK, the growth mantra of the recently
elected Labour government appears at odds with the
substantial tax increase for the corporate sector announced
inthe Budget, and the cost of government borrowing has
increased as investors worry about higher debt levels to fund
investment and spending amid a further decline in productivity.
The Bank of England has continued to trim interest rates in
the early part of 2025 to support the economy as growth
prospects have been lowered but they will have to tread a fine
line between lowering interest rates further and keeping
inflationary pressures under control.
Whilst the backdrop remains challenging, there is some good
news for UK listed companies which retain healthy balance
sheets and many are buying back their own shares,
highlighting the relatively attractive valuation of UK companies
versus their overseas peers. It is also important to remember
that quoted UK companies derive a substantial proportion of
their earnings from overseas activities providing good
protection against the risk of weaker UK activity. Within the
Company’s portfolio, there continues to be a good balance
between larger companies with more international exposure
and attractively valued smaller and medium sized companies
where our Fund Manager believes the share prices are
reflecting too pessimistic a view of future prospects.
Overall, and as usual, the Board and the Company’s Fund
Manager remain steadfast in the commitment and objective
ofcontinuing to deliver the high level of income required by
shareholders whilst also mindful of the longer term target of
delivering capital growth.
Jeremy Rigg
Chairman
26 March 2025
Strategic Report: Chairman’s Statement (continued)
Henderson High Income Trust plc Annual Report 2024
10
Fund
Manager’s
Report
11
Market review
The UK equity market made positive gains during the year,
with the FTSE All-Share Index increasing by 9.5% on a total
return basis. Easing inflation prompted major central banks,
including the Bank of England (BoE), to reduce interest rates
globally. TheBoE cut UK interest rates by 25 basis points in
both August and November to end the year at 4.75%.
UK inflation fell during the year prompting the Bank
of England to start reducing interest rates
UK Consumer Price Index (year-on-year % change)
Bank of England Base Interest Rate (RHS)
0
2
4
6
8
10
12
(%) (%)
Apr 23 Aug 23 Dec 23 Aug 24Apr 24Dec 22 Dec 24
0
1
2
3
4
5
6
Source: LSEG DataStream as at 31 December 2024
The equity market gains were skewed to the first half of the
year as UK economic growth generally proved better than
expected. However, the negative rhetoric over the state of the
country’s finances the new Labour government had inherited,
post July’s General Election, saw markets consolidate in the
second half of the year. Domestic companies were also
impacted by the large tax increases announced by the new
Chancellor in her first Budget. Businesses will be expected to
fund a significant portion of the bill given the rise in employer
National Insurance contributions, although the government
also unveiled plans for a large rise in investment spending.
Consumer and business confidence fell towards the end of
the year while UK economic growth weakened with almost
nogrowth in the second half of the year.
Larger companies outperformed medium sized businesses
with the FTSE 100 Index returning +9.7% versus the more
domestic orientated FTSE 250 Index’s return of +8.1%.
Thebest performing sectors were financials (led by banks),
consumer staples and industrials, while energy, basic
materials and real estate underperformed. While the
consumer discretionary sector outperformed there was a
large dispersion of performances, with travel and media
companies performing well but the more interest rate sensitive
sectors, such as retail and housebuilders, underperforming.
The UK equity market initially performed well before
giving back gains towards the end of the year
FTSE 250FTSE 100
Feb 24 Apr 24 Jun 24 Oct 24Aug 24
Dec 23 Dec 24
95
99
103
107
111
115
(%)
Source: LSEG DataStream as at 31 December 2024
Notes: Rebased to 100 as at 31 December 2023
Banks and tobacco significantly outperformed
while mining and real estate lagged
Tobacco Metals and mining Real estateBanks
Feb 24 Apr 24 Jun 24 Oct 24Aug 24
Dec 23 Dec 24
70
80
90
100
110
120
130
140
(%)
Source: LSEG DataStream as at 31 December 2024
Notes: Sector performance based on MSCI UK sector indicies. Rebased to 100
as at 31 December 2023
Government bonds were weak during the year as initially
investors pared back their expectations over interest rate cuts
as inflation, albeit falling, generally remained above central
bank targets. Bond yields rose significantly in the fourth
quarter globally, led by the US given fears over inflation from
some of president-elect Donald Trump’s proposed policies.
The move in the UK was further exacerbated by the scale
ofgovernment spending revealed in the Budget, along
withconcerns over the impact on inflation from tax hikes,
Strategic Report: Fund Manager’s Report
David Smith
Fund Manager
Henderson High Income Trust plc Annual Report 2024
12
increases to the minimum wage and further falls in
productivity. The UK 10-year gilt yield rose from 3.6% at
thestart of the year to reach 4.6% at the endof December.
Credit spreads tightened during the year which helped
corporate bonds, both investment grade and high yield bonds,
post positive returns and outperform government bonds.
Bond yields rose significantly after the UK Budget
Mar 24Dec 23
(%)
Jun 24 Sep 24
Dec 24
UK 10-year Gilt Yield
3.0
3.5
4.0
4.5
5.0
Source: LSEG DataStream as at 31 December 2024
Performance review
The Company’s NAV (debt at fair value) returned 9.4% on
atotal return basis, outperforming the benchmark’s gain of
7.9%. Given the Company’s overweight position to equities
relative to bonds against the benchmark, asset allocation
hada positive impact on performance due to equities
outperforming. Gearing also aided performance given the
positive market backdrop.
The equity portfolio gained 8.7% on a total return basis during
the year, behind the 9.5% return from the FTSE All-Share
Index. Within financials, the portfolio’s holdings in NatWest,
3iand Intermediate Capital were positive for performance.
NatWest delivered strong profit growth in the period
benefitting from higher interest rates in the UK and stronger
margins given the benign competitive environment, especially
within savings and mortgage products. The company’s robust
capital position and strong cash flow also led to good
dividend growth and a directed buyback which significantly
reduced the government stake. Private equity group 3i has
been a very strong performer for the Company over the longer
term, driven by the success of its portfolio holding Action, the
European discount retailer. Last year was another good year
for the business given the strong profit growth delivered.
Alternative asset manager Intermediate Capital, which
specialises in private credit markets, performed well over the
year as new fund raisings for its strategies beat expectations.
Within the consumer staples sector, the portfolio’s positions
intobacco companies, Imperial Brands and British American
Tobacco, and soft drink manufacturer Britvic were positive
forperformance. Both Imperial Brands and British American
Tobacco benefitted in the period from delivering resilient
earnings but also buying back their own shares at very
attractive valuations. Britvic produced strong results in the
period and then was subject to a bid approach from
Carlsberg, as it looked to diversify away from beer and
consolidate its European Pepsi bottling operations.
On the negative side the portfolio’s holdings in
Burberry,PageGroup and MONY Group (owner of
MoneySuperMarket.com) detracted from returns. Burberry’s
profits were significantly impacted from a slowdown in luxury
goods demand and a failed strategy to elevate the brand.
While it was the correct decision for the company to change
strategy and Chief Executive Officer, the turnaround is likely to
be protracted and with the suspension of the dividend we
decided to exit the holding. Recruiter PageGroup was weak
during the year as profits came under pressure from a
lacklustre global employment market with low candidate
confidence impacting job turnover. MONY Group’s share price
was weak as investors feared that an easing in insurance
premium price inflation would lead to fewer consumers
switching their insurance providers. Elsewhere, not holding
Rolls-Royce was detrimental to relative performance. Rolls-
Royce is a large constituent of the benchmark and performed
strongly in 2024 meaning not holding the company, due to the
lack of a dividend, contributed negatively to relative
performance against the benchmark.
The fixed income portfolio rose 6.7% on a total return basis
during the year, outperforming the 1.7% return from the ICE
BofA Sterling Non-Gilts Index. The portfolio’s exposure to
short duration bonds aided relative performance given these
bonds are typically less vulnerable to rising bond yields. Also,
the holdings in high yield bonds aided returns given spreads
in this area of the bond market tightened significantly as global
economic growth improved. In particular, holdings in bonds
issued by Bupa, Center Parcs, the Co-op and Ziggo were
positive, while bonds in Direct Line rose significantly after the
bid approach from Aviva.
Income review
On an underlying basis, UK market dividends fell 0.4% in 2024
(according to the Computershare UK Dividend Monitor) driven
by reductions in dividends from the mining sector as
commodity prices fell during the year. Dividend growth
excluding this sector was 4.0%, supported by good dividend
increases from banks, insurers and food retailers.
The income return for the Company increased 3.4% to
10.74pence per share in 2024, up from 10.39 pence in 2023.
Within the equity portfolio there was good dividend growth
from some of the largest holdings including 3i (+15.6%), HSBC
(+15.1%), Tesco (+14.7%) and NatWest (+12.9%). Along with the
miners, the portfolio experienced dividend cuts from holdings in
the utilities sector: National Grid rebased its dividend lower as
part of its equity raise to fund future investment, while SSE also
Strategic Report: Fund Manager’s Report (continued)
Henderson High Income Trust plc Annual Report 2024
13
Strategic Report: Fund Manager’s Report (continued)
reduced its dividend during the year to support higher capital
investment, albeit this had been well flagged to the market.
There has been a trend over the last couple of years for UK
companies to return excess cash to shareholders via share
buybacks, a recognition by management teams of the
attractive valuations of their companies’ shares. Thishas
generally come at the expense of special dividends, hence,
income earned from specials for the Company was relatively
low versus previous years. The portfolio in total earned
£347,000 in special dividends with payments from Dunelm,
B&M and Sabre.
UK market underlying dividends modestly fell
during the year
(£bn)
Regular Dividends
2012 2015 201620142013 2017 2018 2019 2022 202
4
202320212020
0
20
40
60
80
100
120
Special Dividends
Source: Computershare UK Dividend monitor as at 31 December 2024
During the year the Board declared a full year dividend of
10.6p which was fully covered by earnings. This was an
increase of 2.4% over the dividend in 2023 (10.35p) and
represents the 12th consecutive year of dividend growth,
maintaining the Company’s status as an AIC Next Generation
Dividend Hero. The dividend has grown at a compound annual
growth rate of 2.1% over those 12 years. Revenue reserves
asat 31 December 2024 were £10.2 million, providing
approximately 56% cover over the Company’s dividend.
Portfolio activity
At the start of the year the Company completed the
combination with Henderson Diversified Income Trust plc
(HDIV). The £72.1 million of new assets taken on as part of the
transaction were invested in line with the existing portfolio.
Gearing at the end of December was 21.0%, down slightly
from the end of 2023 (21.4%). The bond portfolio was reduced
by approximately £2 million through the year. Although
all-in-yields remain attractive, credit spreads have tightened to
historically low levels. New positions were initiated in both
investment grade and high yield bonds but in typically higher
quality, non-cyclical businesses such as Iliad (European
telecommunications), Aviva and Teva Pharmaceuticals.
Funding came from the sale of the short-dated US Treasury
bond the Company held ahead of its maturity. Holdings in
bonds issued by EDF (French utility) and Centene (US
healthcare) were also sold. The bond portfolio represented
10.7% and 13.1% of gross and net assets respectively as at
the end of December.
New positions were initiated in the equity portfolio in Reckitt
Benckiser, Aviva and Tele2. Reckitt Benckiser is a global
household goods and personal care business which has
market leading brands in attractive categories. The new
strategy to divest lower growth businesses to become more
focused on its core faster growing products is sensible.
Also,while there continues to be uncertainties around
litigation in its instant milk formula division, we believe these
are more than discounted in the current valuation. After a
period of restructuring, Aviva is now a much simpler business
with good market positions in its core operations in the UK
and Canada. It is well diversified across both life and general
insurance and generates good cash flow. Tele2 is the no.2
telecommunications operator in Sweden, with mobile and
fixed networks, and is the market leading mobile operator in
the Baltic countries. These regions should be able to generate
stable growth, while continued cost savings and peaking
capex is likely to lead to stronger cash generation which
supports an attractive dividend yield.
Within the aerospace and defence sector, new positions were
established in BAE Systems and Chemring towards the end
ofthe year. Although there is a potential for a ceasefire in
Ukraine, given rising geopolitical tensions governments across
the world are likely to increase defence spending over the
longer term, which should underpin future profit growth for the
sector. BAE is well-diversified both globally and across
product platforms. The valuation is attractive given the strong
organic growth potential, high visibility on earnings given the
size of the order backlog, and good cash flow generation.
Chemring has strong market positions in specialised niche
areas of defence. The company is split into two divisions:
Countermeasures and Energetics, which manufactures
products such as explosive materials and missile parts, and
Sensors and Information, which develops technologies that
detect threats whether explosive, biological, chemical, radio
or cyber.
Within the retail sector we switched our holding in B&M
European Value Retail into Dunelm at the beginning of the
year. This was due to concerns that B&M was being run too
aggressively to maintain its low pricing in a competitive space.
Dunelm is the UK’s leading homewares retailer in a fragmented
market where it continues to invest to improve efficiencies and
product offering. The broadening out of its product range into
new categories and price points, while still offering value for
money to customers, should drive further profitable growth.
The company also has a robust balance sheet and high free
cash flow that supports attractive dividends.
Henderson High Income Trust plc Annual Report 2024
14
Elsewhere the holdings in overseas companies Woodside
Energy and E.ON were also sold. With the Liquefied Natural
Gas (LNG) market likely to be in surplus over the next couple
of years as new supply comes on stream, we took the
decision to exit our holding in Woodside given 50% of the
business is exposed to LNG. Also, the management team
hassignificantly increased the capex guidance and recently
bid for peer Santos. Although the proposed acquisition
wasultimately dropped it highlighted that cash returns to
shareholders were likely to be less of a priority going forward.
E.ON had performed well last year and re-rated to reflect the
qualities of its electricity distribution assets. With the valuation
now fairly full and the dividend yield one of the lowest in the
European utilities sector, we sold the position. Finally,
theposition in Britvic was also sold post the bid approach
from Carlsberg.
Outlook
Over the last couple of years there has been a change in
themacroeconomic and political regime. Globalisation has
moved to protectionism and the return of inflation has led
to‘higher for longer’ interest rates. The global economic
outlook now seems more uncertain given the threat of a
global trade war while governments are prioritising fiscal
spending on defence.
Although we expect further interest rates cuts this year, the
impact of the UK Budget and Donald Trump’s presidency will
likely keep inflation above central banks’ targets hence we
believe there will be a more protracted pathway to normalised
interest rates. Also, corporate margins in the UK are likely to
come under some pressure for domestic companies from the
increase in National Insurance contributions and minimum
wage. However, consumers and companies have proved adept
at dealing withsignificant cost inflation in the last few years, with
UK economic growth in both 2023 and 2024 proving more
resilient than originally expected. A function of this has been
robust wage growth, as imbalances in the labour market
continue, and the strength of personal finances and corporate
balance sheets along with a very well capitalised banking
system. Although UK economic growth isforecast to be
lacklustre this year, strong balance sheets should continue
tohelp support it from downside risks, while a pickup in
confidence isprobably needed for a better than
expectedoutcome.
The UK market is attractively valued
2002 2006 20101998 2018 20222014
Price Earnings Ratio based on 12 month forward earnings
consensus estimates
6
8
10
12
14
16
18
20
22
24
Source: LSEG DataStream as at 31 December 2024
Sentiment towards UK equities remains bearish and while the
UK economic outlook is subdued, the UK equity market is not
necessarily a good proxy for the UK economy with 75% of
revenues derived overseas. Interestingly, since interest rates
started to increase at the end of 2021, the FTSE All-Share
Index has returned 26.7% to the end of February 2025.
Although this is behind the return of the US equity market over
the same time period (+31.2%), it is still a reasonable
performance given the economic and inflationary backdrop
and the negative rhetoric surrounding UK equities. Despite this
return, valuations are still attractive in the UK market, both
compared to their own history and relative to global indices,
hence we remain cautiously optimistic that UK equities can
continue to make reasonable gains this year. As ever the focus
remains on finding good quality businesses at a compelling
valuation that can pay and grow an attractive dividend.
David Smith
Fund Manager
26 March 2025
Strategic Report: Fund Manager’s Report (continued)
Henderson High Income Trust plc Annual Report 2024
15
Portfolio and
Financial
Information
16
Investments: Fixed Interest
PREFERENCE SHARES
Total
31December
2024
£’000
General Accident 8.875% 1,068
National Westminster Bank 9% 348
Nationwide Building Society 10.25% 2,857
Total Preference Shares 4,273
OTHER FIXED INTEREST
Allwyn Entertainment 7.25% 2030 1,017
Amazon 4.8% 2034 (USA) 1,075
Anheuser-Busch 4% 2025 497
Anheuser-Busch 4.75% 2029 (USA) 878
Aviva 4% 2055 230
Aviva 5.125% 2050 481
Aviva 6.125% 2054 983
B&M European Value Retail 8.125% 2030 1,065
Banijay Entertainment 7% 2029 (France) 1,088
Boost Newco Borrower 8.5% 2031 192
Broadcom 4.15% 2030 (USA) 244
Broadcom 4.926% 2037 (USA) 783
Bupa Finance 4.125% 2035 1,439
Bupa Finance 5% 2026 1,015
Charter Communications 5.05% 2029 (USA) 781
Co-operative Group 6.25% 2026 1,117
CPUK Finance 4.5% 2027 1,160
Deuce Finco 5.5% 2027 1,035
Direct Line Insurance 4% 2032 612
Direct Line Insurance 4.75% Variable Perpetual 456
Gartner 3.75% 2030 (USA) 1,605
GLP 5.3% 2029 (USA) 634
GLP 5.625% 2034 (USA) 550
Iliad 5.375% 2031 885
Iliad 7% 2032 (USA) 674
Iron Mountain 4.5% 2031 (USA) 679
MSCI 3.875% 2031 (USA) 688
Scottish Widows 7% 2043 876
Service Corp Intl 4.625% 2027 (USA) 1,301
Service Corp Intl 5.75% 2032 (USA) 639
Tesco Property Finance 5.744% 2040 862
Tesco Property Finance 6.0517% 2039 718
Teva Pharmaceuticals 6.75% 2028 (USA) 326
UK Treasury 5% 2025 4,903
VICI Properties 4.95% 2030 (USA) 391
VICI Properties 5.125% 2032 (USA) 544
Virgin Media 4.125% 2030 1,471
Virgin Media 4.875% 2028 951
Ziggo 4.875% 2030 (USA) 733
Total Other Fixed Interest 35,578
TOTAL FIXED INTEREST 39,851
Investments: Equities
(including investment funds)
ENERGY
Total
31December
2024
£’000
Oil, Gas and Coal
BP 7,953
Shell 9,569
Total Energy 17,522
BASIC MATERIALS
Chemicals
Johnson Matthey 3,606
Victrex 2,740
Industrial Metals and Mining
Anglo American 5,068
Rio Tinto 10,542
Total Basic Materials 21,956
INDUSTRIALS
Aerospace and Defence
BAE Systems 4,218
Chemring 2,885
Construction and Materials
Genuit 2,560
Electronic and Electrical Equipment
Spectris 1,984
General Industrials
Bunzl 3,706
Mondi 2,864
Industrial Engineering
Vesuvius 2,855
Industrial Support Services
DCC 3,865
PageGroup 3,677
Total Industrials 28,614
CONSUMER DISCRETIONARY
Consumer Services
Compass 6,547
Household Goods and Home Construction
Taylor Wimpey 3,769
Media
RELX (Netherlands) 9,798
Retailers
Dunelm 4,436
Next 3,955
Travel & Leisure
Mobico 1,468
Sodexo (France) 5,369
Whitbread 3,290
Total Consumer Discretionary 38,632
Strategic Report: Investment Portfolio
Henderson High Income Trust plc Annual Report 2024
17
Investments: Equities
(including investment funds)
HEALTHCARE
Total
31December
2024
£’000
Pharmaceuticals and Biotechnology
AstraZeneca 4,264
GlaxoSmithKline 4,883
Sanofi (France) 3,056
Total Healthcare 12,203
CONSUMER STAPLES
Beverages
Coca-Cola HBC 3,632
Diageo 3,703
Food Producers
Cranswick 4,657
Hilton Food Group 6,024
Personal Care, Drug and Grocery Stores
Reckitt Benckiser 7,029
Tesco 7,535
Unilever 10,544
Tobacco
British American Tobacco 17,709
Imperial Brands 11,761
Total Consumer Staples 72,594
UTILITIES
Electricity
SSE 3,386
Gas, Water and Multiutilities
Engie (France) 3,948
National Grid 7,449
Severn Trent 6,023
Total Utilities 20,806
FINANCIALS
Banks
HSBC 12,546
Lloyds Banking 6,114
NatWest 8,112
Non-life Insurance
ASR Nederland (Netherlands) 3,266
Conduit Re 3,046
Sabre Insurance 2,203
Life Insurance
Aviva 4,846
Chesnara 4,096
Phoenix 7,836
Investment Banking and Brokerage Services
3i 8,102
Ashmore 3,727
IG Group 2,932
Intermediate Capital 5,920
FINANCIALS
Total
31December
2024
£’000
M&G 6,796
Schroders 3,194
Finance and Credit Services
Paragon Banking Group 3,346
Closed End Investments
Greencoat UK Wind 3,550
Tufton Oceanic Assets 2,733
Total Financials 92,365
REAL ESTATE
Real Estate Investment Trusts
Big Yellow 2,957
British Land 4,803
Land Securities 3,416
Total Real Estate 11,176
TECHNOLOGY
Software and Computer Services
MONY Group 3,641
Technology Hardware and Equipment
Texas Instruments (USA) 3,114
Total Technology 6,755
TELECOMMUNICATIONS
Telecommunications Service Providers
Tele2 (Sweden) 4,316
Total Telecommunications 4,316
TOTAL EQUITIES 326,939
TOTAL 366,790
Strategic Report: Investment Portfolio (continued)
Henderson High Income Trust plc Annual Report 2024
18
Strategic Report: Investment Portfolio (continued)
FIXED INTEREST
Total
31December
2024
%
Total
31December
2023
%
Preference shares 1.2 1.7
Other fixed interest 9.7 10.6
Total Fixed Interest 10.9 12.3
EQUITIES
Energy
Oil, gas and coal 4.8 5.6
Total Energy 4.8 5.6
Basic Materials
Chemicals 1.7 1.7
Industrial metals and mining 4.3 4.5
Total Basic Materials 6.0 6.2
Industrials
Aerospace and defence 1.9 –
Construction and materials 0.7 0.8
Electronic and electrical
equipment 0.5 1.0
General industrials 1.8 1.3
Industrial engineering 0.8 0.9
Industrial support services 2.1 2.7
Total Industrials 7.8 6.7
Consumer Discretionary
Consumer services 1.8 1.7
Household goods and home
construction 1.0 1.3
Media 2.7 3.0
Personal goods – 1.2
Retailers 2.3 2.3
Travel and leisure 2.7 1.7
Total Consumer Discretionary 10.5 11.2
Healthcare
Pharmaceuticals and
biotechnology 3.3 4.0
Total Healthcare 3.3 4.0
Consumer Staples
Beverages 2.0 4.4
Food producers 2.9 3.0
Personal care, drug and
grocery stores 6.9 5.2
Tobacco 8.0 5.8
Total Consumer Staples 19.8 18.4
Utilities
Electricity 0.9 1.3
Gas, water and multiutilities 4.8 5.7
Total Utilities 5.7 7.0
FIXED INTEREST
Total
31December
2024
%
Total
31December
2023
%
Financials
Banks 7.3 5.5
Closed end investments 1.8 2.3
Finance and credit services 0.9 1.1
Investment banking and
brokerage services 8.4 8.7
Life insurance 4.5 3.0
Non-life insurance 2.3 2.5
Total Financials 25.2 23.1
Technology
Software and computer services 1.0 1.0
Technology hardware and
equipment 0.8 0.9
Total Technology 1.8 1.9
Real Estate
Real estate investment trusts 3.0 3.6
Total Real Estate 3.0 3.6
Telecommunications
Telecommunications service
providers 1.2 –
Total Telecommunications 1.2 –
TOTAL INVESTMENTS 100.0 100.0
Distribution of the UK equity portfolio holdings
at31December
2024
2023
%
%
Large companies: 68.2
65.6
Medium-sized companies: 28.3
30.1
Small companies: 3.5
4.3
2
0
2
3
2
0
2
4
Large companies = Market Cap of >£5bn
Medium-sized companies = Market Cap of <£5bn and >£500m
Small companies = Market Cap of <£500m
Source: Janus Henderson
Percentage breakdown of investments by sector
Henderson High Income Trust plc Annual Report 2024
19
Sector exposure at 31December
Excluding cash
Sector
2024
£’000
2024
% of portfolio
2023
£’000
2023
% of portfolio
Preference shares 4,273 1.2 4,470 1.7
Other fixed interest 35,578 9.7 28,744 10.6
Total Fixed Interest 39,851 10.9 33,214 12.3
Financials 92,365 25.2 62,309 23.1
Consumer Staples 72,594 19.8 49,625 18.4
Consumer Discretionary 38,632 10.5 30,344 11.2
Industrials 28,614 7.8 18,179 6.7
Basic Materials 21,956 6.0 16,710 6.2
Utilities 20,806 5.7 18,893 7.0
Energy 17,522 4.8 14,987 5.6
Healthcare 12,203 3.3 10,922 4.0
Real Estate 11,176 3.0 9,742 3.6
Technology 6,755 1.8 5,082 1.9
Telecommunications 4,316 1.2 – –
Total Equities 326,939 89.1 236,793 87.7
Total 366,790 100.0 270,007 100.0
Equity portfolio sector weightings at 31December 2024
0510 15 20 25 30
Telecommunications
Technology
Real Estate
Healthcare
Energy
Utilities
Basic Materials
Industrials
Consumer Discretionary
Consumer Staples
Financials
Company FTSE All-Share Index
Ten largest investments at 31December
1
Position Company Sector
2024
£’000
2024
% of portfolio
2023
£’000
2023
% of portfolio
1 British American Tobacco Consumer Staples 17,709 4.8 9,545 3.5
2 HSBC Financials 12,546 3.4 7,737 2.9
3 Imperial Brands Consumer Staples 11,761 3.2 5,927 2.2
4 Unilever Consumer Staples 10,544 2.9 8,747 3.2
5 Rio Tinto Basic Materials 10,542 2.9 8,025 3.0
6 RELX (Netherlands) Consumer Discretionary 9,798 2.7 8,221 3.0
7 Shell Energy 9,569 2.6 6,310 2.3
8 NatWest Financials 8,112 2.2 3,026 1.1
9 3i Financials 8,102 2.2 5,602 2.1
10 BP Energy 7,953 2.2 6,399 2.4
Total 106,636 29.1 69,539 25.7
1 The increases for 2024 reflect the additional value invested following the completion of the HDIV transaction. See note 23 for further details
Strategic Report: Portfolio Information
20
Henderson High Income Trust plc Annual Report 2024
Total return performance to 31December
1 year
%
3 years
%
5 years
%
10 years
%
NAV
1
+9.4 +17.8 +25.1 +77.2
Share Price
2
+10.8 +10.6 +16.5 +62.8
Benchmark
3
+7.9 +12.8 +20.6 +69.0
ICE BofA Sterling Non-Gilts Index +1.7 -9.1 -4.8 +19.2
FTSE All-Share Index +9.5 +18.5 +26.5 +81.9
Total return performance over 10 years to 31December 2024
NAV
1
Share Price
2
Benchmark
3
(%)
20242015 2016 2017 2021 20232022202020192018
-20
-10
0
10
20
30
40
50
60
70
80
90
Financial information as at 31 December
Net assets
£m
NAV per
ordinary share
4
p
Mid-market price per
ordinary share
p
Dividends
per ordinary share
p
2015 197.1 175.3 180.5 8.90
2016 207.7 181.3 183.6 9.15
2017 257.2 195.7 190.0 9.40
2018 210.8 159.5 159.5 9.60
2019 251.1 189.8 191.8 9.80
2020 211.4 157.3 147.0 9.90
2021 236.2 177.9 177.5 9.95
2022 214.3 164.2 165.3 10.15
2023 222.3 169.6 156.5 10.35
2024
5
303.2 174.7 162.5 10.60
1 Net asset value with debt at fair value total return (including dividends reinvested and excluding transaction costs)
2 Includes dividends reinvested
3 A composite of 80% of the FTSE All-Share Index (total return) and 20% of the ICE BofA Sterling Non-Gilts Index (total return) rebalanced annually
4 Based on net assets with debt at fair value as published by the AIC
5 2024 includes the increase in assets following the completion of the HDIV transaction. See note 23 for further details
Source: Janus Henderson, Morningstar Direct and LSEG Datastream
Strategic Report: Historical Performance and
Financial Information
21
Henderson High Income Trust plc Annual Report 2024
Business Model
22
Purpose and Strategy
The Company’s purpose is to deliver consistently to
shareholders a high level of income on a regular basis while
seeking capital growth over the longer term by investing
primarily in UK equities. This purpose is fulfilled by achieving
the investment objective and applying the investment policy.
The investment strategy is delegated to the Manager,
JanusHenderson, within the parameters determinedby
theBoard and approved by shareholders.
Investment Objective
The Company invests in a prudently diversified selection of
both well-known and smaller companies to provide investors
with a high dividend income stream while also maintaining the
prospect of capital growth.
Investment Policy
In normal circumstances the Company will invest up to 80%
of its gross assets in equities and up to 20% of its gross
assets in fixed income (in companies of any size that are either
listed in, registered in, or whose principal business is in the
UK). Within these limits a maximum of 30% of gross assets
may be invested outside of the UK.
No single investment will exceed 15% of total gross assets at
the time of investment and no more than 15% of gross assets
may be invested in other listed investment companies
(including investment trusts) or collective investment
schemes. The Company may from time to time use financial
instruments known as derivatives for the purpose of efficient
portfolio management or to generate additional income while
maintaining a level of risk consistent with the risk profile of
theCompany.
Investment Selection
The selection process seeks to identify companies with strong
balance sheets that are capable of paying dividends. There is
a focus on well-managed companies whose qualities may
have been temporarily overlooked and which offer potential
for capital appreciation over the medium term.
Gearing
1
The Company has an active policy of using appropriate levels
of gearing, both in the form of bank and longer-term
borrowings, with the objective of enhancing income returns
and also achieving capital growth over time. A portion of
gearing is usually employed with respect to the Company’s
fixed interest securities to generate additional income.
The Company can borrow up to 40% of gross assets. The
drawdown of floating rate borrowings can be in non-sterling
currencies, provided that these borrowings do not exceed the
market value of non-sterling assets.
Gearing as at 31 December 2024 was 21.0% (2023: 21.4%).
Company Structure
The Company operates as an investment company with a
Board of Directors who delegate investment and operational
matters to specialist third-party service providers. Their
performance is monitored and challenged by the Board who
retain oversight of the Company’s operations. The Board is
comprised entirely of non-executive directors accountable to
shareholders, who have the ability to remove a director from
office where they deem it to be in the interests of the Company.
The framework of delegation provides a cost-effective
mechanism for achieving the Company’s objectives under
s.1158/9 of the Corporation Tax Act 2010. The closed-end
nature of the Company enables the Fund Manager to take a
longer-term view on investments. It also supports a fully invested
portfolio as the Company does not have to maintain or create
sufficient cash balances to satisfy investor redemptions.
Investment trusts have two significant advantages over other
investment fund structures: firstly, the ability to pay dividends
out of revenue reserves to support the provision of income to
shareholders, as necessary, and secondly, the ability to
borrow to increase potential returns for shareholders.
Income
The investment objective underpins the Company’s dividend
policy, which is to pay quarterly interim dividends from current
revenue and add to the revenue reserve where possible each
year. The purpose of this reserve is to enable the Company to
support dividend payments in difficult market conditions.
When deciding on whether to pay each quarterly interim
dividend, the Board has regard to a variety of factors,
including current and forecast levels of income (including any
special dividends received) and the historic dividend
schedule. The Board also considers a range of stress tests
which forecast revenue under different scenarios in order to
form a view on the sustainability of the Company’s dividends.
Borrowings
During the year under review, following the transaction with
HDIV, the Company increased its committed loan facility from
£45 million to £60 million with BNP Paribas, London Branch.
This facility matured on 19 December 2024 and on that date
the Company renewed the facility for a further 12 months.
Thisfacility has an accordion of £25 million allowing the
Company to borrow up to £85 million.
The Company also has a 19-year £20 million fixed rate senior
unsecured loan note with a sterling coupon of 3.67% which
will mature on 8 July 2034.
Ongoing Charge
The Board regularly reviews the ongoing charge and monitors
all Company expenses, with a detailed schedule of expenses
reviewed twice a year in conjunction with the half year and full
year financial results. The ongoing charge for the year-ended
31 December 2024 was 0.74% (2023: 0.86%).
Strategic Report: Business Model
1 Alternative Performance Measure, see page 83
Henderson High Income Trust plc Annual Report 2024
23
Strategic Report: Business Model (continued)
Promoting the Company’s success
The Directors’ overarching duty is to promote the success of the Company for the benefit of investors with consideration of
stakeholders’ interests. The Directors use their experience and knowledge to select and engage reputable organisations to carry
out operations on behalf of the Company.
Values and culture
The Board expects all Directors to act with integrity and to apply their skill, care, due diligence and professional experience in
theboardroom. The culture of the Board is one that promotes integrity and openness which is reciprocated by the Manager.
TheBoard expects the Company’s third-party service providers to uphold the same values and high standard of conduct as
theBoard. To this end, the Board considered the Manager’s corporate culture and values as part of its overall assessment of
theservice provided by them in the year under review. The Board and the Manager operate in a supportive, co-operative and
open environment.
Engaging with stakeholders (s.172 Companies Act 2006)
The table below sets out the ways in which the Board engages with the Company’s key stakeholders.
Stakeholder Engagement
Shareholders
and potential
investors
Purpose:
●
To allow investors to make informed investment decisions.
●
To retain existing shareholders and attract new investors.
●
To understand investors’ requirements and expectations.
How we engage:
●
The annual report and half-year report are published to keep shareholders informed on the Company’s
financial performance, governance framework and any current issues.
●
Information on the Company, sponsored research notes and video updates from the Fund Manager are
made available on the website to keep shareholders informed on the positioning of the portfolio.
●
Daily NAVs and monthly factsheets are published to keep shareholders up to date with the value of the
portfolio.
●
Shareholders are encouraged to attend the annual general meeting where they can meet and speak with
the Directors and Fund Manager.
●
The Board receives shareholder feedback from its corporate broker, the Manager’s Investment Trust Sales
and Marketing Teams and the Fund Manager to keep the Board informed of shareholders’ views.
●
The Board and the Fund Manager meet with shareholders when requested.
Outcome:
●
Shareholders are informed and there is regular demand for the Company’s shares.
Service
Providers
●
Auditor
●
Corporate
broker
●
Custodian
●
Depositary
●
Fund
administrator
●
Registrar
Purpose:
●
To monitor the quality and cost effectiveness of the services provided.
How we engage:
●
Biannual service review meetings with the depositary and registrar.
●
Self-assessment reports provided to the Board annually.
●
Review and discussion of reports on the effectiveness of internal controls and risk management.
●
Review of proposed audit plan and audit fee each year, as well as any audit findings, the auditor’s letter
of engagement and terms of business.
●
Regular attendance at meetings throughout the year with specialist input provided.
Outcome:
●
The Board maintains effective oversight of the Company’s operations and the services provided by its
third-party service providers.
Henderson High Income Trust plc Annual Report 2024
24
Strategic Report: Business Model (continued)
Stakeholder Engagement
Investment
manager
Purpose
●
To ensure that the investments in the portfolio and the administration of the Company are well-managed.
●
To ensure that the Company complies with the AIFMD regulation.
How we engage:
●
The Fund Manager and Company Secretary attend all meetings and provide specific reports.
●
Representatives of the AIFM regularly attend meetings.
●
The AIFM confirms compliance with investment limits and restrictions each month.
●
Quarterly internal controls reports provide the Board with regular reporting on the Manager’s internal
controls in operation over the services delivered to the Company.
●
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
andinternship programmes, such as Greenwood Project, Investment 2020 and #100 Black Interns.
TheBoard monitors the culture at the Manager and appreciates how it fosters and maintains an
environment that values the unique talents and contributions of individuals and strives to cultivate and
practise inclusiveness for the long-term success of the business and for the benefit of its employees,
investors and shareholders.
Outcome:
●
The Board is confident that the Company’s assets are managed in line with the investment objective and
policy, and the parameters established by the Board.
●
The Board has a good understanding of how the Company is perceived in the market and whether the
investment objective remains relevant in prevailing market conditions.
Investee
companies and
the environment
Purpose:
●
The Fund Manager’s investment decisions are key to the Company achieving its investment objective
andpolicy. Direct communication with investee companies can lead to more informed decisions.
How we engage:
●
The Manager votes at shareholder meetings of the portfolio holdings on behalf of the Company, engaging
with companies as appropriate prior to voting e.g. on ESG matters/contentious resolutions.
●
The Fund Manager regularly engages with investee companies.
Outcome:
●
The Company is a responsible investor.
Lenders Purpose:
●
The Company has an active policy of using appropriate levels of gearing, both in the form of bank and
longer-term borrowings, with the objective of enhancing income returns and also achieving capital
growth over time.
How we engage:
●
The Manager confirms compliance with the loan covenants (to both the short-term and long-term
lenders) each month.
●
The Manager responds to audit requests from its lenders.
Outcome:
●
The Company can use gearing to enhance long-term returns to shareholders.
Henderson High Income Trust plc Annual Report 2024
25
Board discussions and decision making
The following paragraphs provide some examples of the key
discussions held and decisions made by the Board and its
Committees during the year ended 31 December 2024.
Marketing: The Board approved a significant increase in the
Company’s marketing budget to promote the Company to a
wider audience, primarily through targeted digital advertising.
Using a clear messaging framework, this was initiated in
February 2024 and is intended, in conjunction with a redesign
of the Company’s website, to increase understanding of the
Company among its stakeholders as well as raising
awareness of the Company among potential new investors.
Dividends paid to shareholders: The Company’s investment
objective is to provide investors with a high dividend income
stream while also maintaining the prospect of capital growth.
At each meeting, the Board carefully reviews the level of
revenue income received and forecast as well as the available
distributable reserves. For the year under review, dividends
amounting to 10.60p have been declared, compared to
10.35p in 2023, an increase of 2.4% and the Company’s
twelfth consecutive annual increase.
Short-term debt: The Board reviewed the Company’s
borrowing position. Taking into consideration the advantages
of gearing for an investment trust, the Company’s
performance record over the longer term, and that the
Company’s £20 million fixed rate senior unsecured note is due
to be repaid in 2034, the Board approved the renewal of the
loan facility agreement with BNP Paribas, London Branch,
fora further year after considering a number of indicative
quotations from potential lenders, to take advantage of the
most competitive rates and terms on offer.
Liquidity and discount management
The Board’s aim is for the Company’s share price to reflect
closely its underlying net asset value, and for the market in its
shares to be liquid. The ability of the Company to influence
this meaningfully over the longer term is, of course, limited
since it is dependent on the market supply of, and demand
for, the Company’s shares. However, the Board considers the
issuance and buyback of the Company’s shares where
prudent, subject always to the overall impact on the portfolio,
the pricing of other comparable investment companies and
overall market conditions. The Board believes that flexibility is
important and that it is not in shareholders’ interests to set
specific levels of premium and discount for its issuance and
buyback policies.
Arrangements with the Manager
The Company is an Alternative Investment Fund and has
appointed Janus Henderson Fund Management UK Limited
(JHFM) to act as its Alternative Investment Fund Manager
(AIFM). JHFM delegates investment management services to
Janus Henderson Investors UK Limited. Both entities are
authorised and regulated by the Financial Conduct Authority
(FCA) and are part of the Janus Henderson group of
companies. References to Janus Henderson refer to the
services provided to the Company by the Manager’s group.
The Manager is engaged under the terms of an agreement
effective from 28 August 2024. The previous agreement dated
July 2014 has been amended and restated to reflect current
regulation and industry standards, with no changes to terms
affecting the relationship with the Manager. The agreement is
terminable on six months’ notice.
The fund management team is led by David Smith, who has
been the Company’s Fund Manager since July 2015.
Janus Henderson and its subsidiaries also provide
accounting, company secretarial and general administrative
services. Some of the administration and accounting services
are carried out, on behalf of the Manager, by BNP Paribas.
Janus Henderson Secretarial Services UK Limited, a
subsidiary of Janus Henderson Group plc, acts as the
Corporate Secretary. It has its own reporting lines and audited
internal controls. There are processes and controls in place to
ensure that there is a clear distinction between the Corporate
Secretary and Janus Henderson, particularly when dealing
with any conflicts or issues between the Company and
JanusHenderson.
Correspondence from shareholders addressed to the
Chairman or the Board received at the registered office is
forwarded to the Chairman in line with the audited procedures
in place. Correspondence is provided to the Board at the next
meeting with any urgent or important correspondence
circulated promptly at the request of the Chairman.
Management fee
With effect from 1 January 2025, the management fee is
charged at 0.45% of average adjusted gross assets per
annum. Prior to this, the management fee was charged at
0.50% of average adjusted gross assets up to £325 million
and a reduced management fee of 0.45% was applied to
average adjusted gross assets above £325 million.
This average value is calculated by using the values on the
last day of each of the two calendar years preceding the
reporting year. Average adjusted gross assets are gross
assets less current liabilities and less any Janus Henderson
managed funds or Janus Henderson Group plc shares within
the portfolio. Any debt used for investment purposes,
including that recorded in current liabilities, is not deducted
from gross assets.
The management fee is payable quarterly in arrears. In addition,
a supplemental management fee is paid on any new funds in
relation to share issues in the year they were raised, at the
pro-rata annual rate. For the following year any funds raised
are added to prior year assets for the purposes of calculating
the management fee.
Strategic Report: Business Model (continued)
Henderson High Income Trust plc Annual Report 2024
26
Strategic Report: Business Model (continued)
Managing risks
The Board, with the assistance of the Manager, regularly carries out a robust assessment of the principal and emerging risks
facing the Company and seeks assurance that the risks are appropriately evaluated and that effective mitigating controls are in
place, where possible. The Company’s principal risks are considered to be those that would threaten its business model, future
performance, solvency, liquidity and reputation. To aid the process, the Company has drawn up a detailed risk matrix, where the
individual risks and the application of any relevant controls are described. Such safeguarding measures may be established by
the Board itself, for example, the Board has put in place a schedule of investment limits and restrictions, appropriate to the
Company’s investment objective and policy, to which the Manager must adhere and report upon monthly. In addition, the design
and application of controls may be delegated by the Board to the Company’s third-party service providers, who report regularly
to the Board on the effectiveness of their control environments. Using a colour coded traffic light system, each risk within the
matrix is assessed, scored and prioritised according to the severity of its potential impact on the Company and its likelihood of
occurrence. The principal risks which have been identified as part of this process, and the steps taken by the Board to mitigate
these, are set out in the table below.
The Board does not consider these principal risks to have changed during the year under review and up to the date of this report.
Principal Risk Mitigating Measures
Climate Change Risk
Risk that investee companies within the
Company’s portfolio fail to respond to the
pressures of the growing climate
emergency and fail to limit their carbon
footprint to regulated targets, resulting in
reduced investor demand for their shares
and falling market values.
ESG considerations are a fully integrated component of the investment process.
TheFund Manager seeks to understand how a company is managing ESG risks
through its policies and processes and where its investments are targeted, to ensure
that its business model remains sustainable over the longer term.
Please refer to Environmental, Social and Governance Matters on page 31 for
furtherdetails.
Investment Risk
Risk of long-term underperformance of
the Company against the benchmark
and/or peer group. This could result in
the shares of the Company trading at a
persistent discount to net asset value
and/or reduced liquidity in the
Company’s shares.
Risk that insufficient income generation
could lead to a cut in the dividend.
The Manager provides the Board with regular investment performance statistics
against the benchmark and the peer group. The implementation of the investment
strategy and results of the investment process, for which the Fund Manager is
responsible, are discussed with the Manager and reviewed at each Board meeting.
The premium/discount to net asset value and the trading volume of the Company’s
shares are also regularly reviewed, taking account of market conditions.
The Board regularly reviews and monitors the investment in marketing activities
withthe Manager. Both the Manager and the Board maintain close contact with
theCompany’s Broker to understand the supply of and demand for the
Company’sshares.
The Board reviews the Income Statement and revenue forecasts at each meeting
and continually monitors the Company’s revenue reserves.
Market/Financial Risk
Risk that market conditions lead to a fall
in the value of the portfolio (magnified by
any gearing) and/or a reduction of
income.
Risks associated with interest rates and
its impact on the broader financial
system.
This could result in loss of capital value
for shareholders and/or a cut in the
dividend payment.
The Board reviews the Company’s compliance with its loan covenants (for both the
short-term and long-term facilities) on a monthly basis and additional covenant
testing is undertaken in extreme market conditions to give comfort that the
Company can meet its financial liabilities.
The portfolio is diverse, containing a sufficient range of investments to ensure that
no single investment puts undue risk on the sustainability of the income generated
by the portfolio or indeed the capital value. Regard is also given to having a broad
mix of companies in the portfolio, as well as a spread across a range of economic
sectors. The Board reviews the portfolio on a monthly basis.
The Manager operates within investment limits and restrictions set by the Board,
including limits for gearing and derivatives and confirms compliance with these each
month. Any particularly high risks are highlighted and discussed, and appropriate
follow up action is taken where necessary.
A detailed analysis of the Company’s financial risk management policies and
procedures can be found in the Financial Risk Management Policies and Procedures
note on pages 72 to 77.
The Board reviews the Income Statement and revenue forecasts at each meeting
and continually monitors the Company’s revenue reserves.
Henderson High Income Trust plc Annual Report 2024
27
Strategic Report: Business Model (continued)
Principal Risk Mitigating Measures
Operational Risks including cyber
risks, pandemic risks and epidemic
risks and risks relating to terrorism
and international conflicts
Risk of loss through inadequate or failed
internal procedures, policies, processes,
systems or human error. This includes
risk of loss to the Company’s third-party
service providers.
Risk of financial loss, disruption or
damage to the reputation of the
Company, the Manager and the
Company’s other key third-party service
providers, as a result of failure of
information technology systems.
Risk of loss as a result of external events
outside of the Board’s control such as
pandemic and/or epidemic risks and
risks relating to terrorism and/or
international conflicts that disrupt and
impact the global economy. This includes
the risk of loss to the Company’s
third-party service providers that are also
disrupted and impacted by such events.
The Board receives a quarterly internal control report from the Manager to assist
with the ongoing review and monitoring of the internal control and risk management
systems it has in place.
The Board regularly receives reports from the Manager’s Internal Audit, Risk,
Compliance, Information Security and Business Continuity teams. This provides
assurance that the Manager has appropriate policies and procedures in place to be
able to continue in operation and maintain stability in times of such risks.
In particular, the Board asks the Manager to confirm that the Fund Manager can
continue to manage the portfolio in these circumstances.
The Board makes similar enquiries of its other key third-party service providers to
gain assurance that they too have appropriate policies and procedures in place to
be able to continue in operation and maintain stability in times of such risks.
Tax, Legal and Regulatory Risk
Risk that a breach of, or a change in laws
and regulations, could materially affect
the viability and appeal of the Company,
in particular section 1158/9 of the
Corporation Tax Act 2010 which exempts
capital gains from being taxed within
investment trusts.
The Manager has been contracted to provide investment, company secretarial,
administration and accounting services through qualified professionals.
The Board receives internal control reports produced by the Manager on a quarterly
basis, which confirm tax, legal and regulatory compliance.
Emerging Risks
With the help of the Manager’s research resources and using its own market intelligence, the Board continually monitors the
changing risk landscape and any emerging and increasing threats to the Company’s business model. Such emerging risks could
cause disruption for the Company if ignored, but if identified could provide business opportunities. Should an emerging risk
become sufficiently clear, it may be moved to a principal risk.
Henderson High Income Trust plc Annual Report 2024
28
Strategic Report: Business Model (continued)
Viability Statement
The Company seeks to provide superior income generation
and long-term capital growth for its shareholders. The Board
aims to achieve this by implementing the Company’s business
model and strategy through the investment objective and
policy. The Board will continue to consider and assess how it
can adapt the business model and strategy of the Company
to ensure its long-term viability in relation to its principal and
emerging risks. The Board also considers:
●
the prospects for the Company including the liquidity of
the portfolio (which is mainly invested in readily realisable
listed securities);
●
the level of borrowings (which are restricted);
●
the closed-end nature as an investment company
(therefore there are no issues arising from unexpected
redemptions);
●
the ongoing charge ratio (0.74% for the year ended
31December 2024 (2023: 0.86%)); and
●
long-term borrowings in place in the form of the 3.67%
senior unsecured loan note which matures in July 2034
(the value of this long-term borrowing is at 6.6% of net
assets as at 31 December 2024, relatively small in
comparison to the value of total net assets).
Furthermore, the Company retains title to all assets held by
the Custodian (under the terms of the formal agreement with
the Depositary), cash is held with approved banks and
revenue and expenditure forecasts are reviewed at each
Board meeting. The Fund Manager provides an additional,
conservative stress-tested revenue forecast at least once a
year to assist the Board with its dividend decision making.
The Company’s revenue reserves remain strong with
approximately six months’ worth of dividend cover, which
gives additional comfort for any difficult years that may arise
inthe future.
The Board believes it is appropriate to assess the Company’s
viability over a five-year period in recognition of its long-term
horizon and taking account of the Company’s current position
and the assessment factors detailed above.
When assessing the viability of the Company over the next
five years the Directors considered its ability to meet liabilities
as they fall due. This included consideration of the duration of
the Company’s borrowing facilities and how a breach of any
loan covenants could impact on the Company’s net asset
value and share price. The Directors also considered the
impact of a global recession, inflation and risks associated
with geopolitical conflicts. Whilst these currently present
uncertainty and volatility in financial markets, they do not
threaten the Company’s viability.
The Board does not envisage any change in strategy or
investment objective, or any events that would prevent the
Company from continuing to operate over the next five years
as the Company’s assets are liquid, its commitments are
limited, and the Company intends to continue to operate as
aninvestment trust.
In 2024 the Board received feedback from the Fund Manager
and the Janus Henderson Investment Trust Sales Team on
meetings held with shareholders. The feedback suggested
that the shareholders were supportive of the Company
continuing in operation. The Board recognises that there is a
continuation vote due totake place at the AGM in May 2025.
In light of the above consideration of the Company’s viability
and going concern and as no shareholders have indicated
that they will not support the continuation vote, the Board
remains confident that shareholders remain supportive of
theCompany.
The Board takes comfort in the robustness of the Company’s
position, performance, liquidity and the well-diversified
portfolio, as well as the Fund Manager’s monitoring of the
portfolio and therefore has a reasonable expectation that the
Company will continue in operation and meet its liabilities as
they fall due up to and including the year-ending
31December 2029.
Henderson High Income Trust plc Annual Report 2024
29
Strategic Report: Business Model (continued)
Key Performance Indicators
Measuring performance
The Board monitors the performance of the Manager by
reviewing several key performance indicators at each meeting
in order to measure the success of the Company in meeting
its objectives.
Dividend per share
1
1st Interim 2nd Interim 3rd Interim 4th Interim
2023202220212020
2024
(Pence)
2.15
2.20
2.25
2.30
2.35
2.40
2.45
2.50
2.55
2.60
2.65
2.70
1 Based on the dividends paid or announced for the year
See Alternative Performance Measures on page 84
Source: Henderson High Income Trust plc Annual Reports
The Board places a high level of importance on maintaining
the Company’s quarterly dividend payments. The aim is to
maintain a suitable asset allocation that will permit a
sustainable high level of dividend distributions to shareholders
with the potential to grow the capital value in the longer term.
The Board reviews the Company’s revenue account at each
meeting, along with the appropriateness of its dividend
payments. The Board also compares the yield on the
Company’s shares to other relevant sectors of the AIC.
Shareholders must, however, recognise that dividend
payments can never be guaranteed, and that circumstances
could arise when it would be necessary to reduce or pass a
dividend payment. In 2024 £1.3 million was added to revenue
reserves. The Company has built up revenue reserves of
around £10.2 million at the end of the year under review,
which equates to approximately six months’ worth of cover
over the full year dividend on the enlarged shareholder base
following the issue of equity due to the combination with HDIV
in January 2024. Equally, there may be instances when the
level of payment must be increased in order to comply with
section 1158/9 of the Corporation Tax Act 2010 which
requires an investment trust not to retain more than 15% of its
total income. Where such instances would result in a payment
going beyond the Board’s policy, one-off special dividend
payments could be announced and paid.
NAV
1
and Share Price per share
Share price (p)NAV per share (p)
31 Dec
2020
31 Dec
2022
31 Dec
2021
31 Dec
2024
31 Dec
2023
(Pence)
120
140
160
180
200
1 Net asset value with debt at fair value as published by the AIC
At each meeting, the Board reviews the performance of the
portfolio as well as the Company’s NAV (with debt at par value
and fair value) and share price. The Board also compares the
performance of the Company against its benchmark.
Premium/discount over 5 years to 31December 2024
1
-12
-10
-8
-6
-4
-2
0
2
4
31 Dec
2020
31 Dec
2024
31 Dec
2021
31 Dec
2023
31 Dec
2022
(%)
1 Premium/discount based on net asset value with debt at fair value
At each meeting, the Board monitors the level of the
Company’s premium or discount to net asset value per share
and reviews the average premium or discount for other
companies from the AIC Equity Income sector.
Approval
The Strategic Report, set out on pages 2 to 34 has been
approved by the Board.
On behalf of the Board
Jeremy Rigg
Chairman
26 March 2025
Henderson High Income Trust plc Annual Report 2024
30
Our Approach to Environmental, Social
and Governance Matters
The Board believes that integrating environmental, social and
governance (ESG) factors into the investment decision making
and ownership practices is an important element in delivering
the Company’s investment objective. ESG considerations are
an integrated component of the investment processes
employed by the Fund Manager and the wider investment
teams at Janus Henderson. The Company integrates ESG
butdoes 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 of portfolios. ESG related research is one
of many factors considered within the investment process.
Defining ESG
●
Environmental factors include climate change, energy
efficiency, resource depletion and water and waste
management.
●
Social factors include employee and community relations,
diversity, quality of life, enhancements in knowledge and
advances in supportive technology for improved sustainability.
●
Governance factors include mitigating risks such as
bribery and corruption, questioning board diversity,
executive pay, accounting standards and shareholder
rights, and positively influencing corporate behaviour.
Investment Considerations
Companies that have a resilient business model is at the core
of the investment strategy of the Company and it is important
to understand how ESG considerations impact those
business models. An important part of the investment
process is identifying factors, including ESG factors, which
may impact profits, cash flow and dividends and ensuring that
investee companies have robust policies and processes in
place to manage these.
While no company is specifically excluded from investment on
ESG considerations, the Fund Manager would seek to avoid
companies where ESG risks are not sufficiently considered or
managed. As the Fund Manager strives to understand all
drivers of company performance, he also strives to understand
the risks. An evaluation of ESG factors is integral to this.
Governance is a key part of fundamental factor analysis with
good corporate governance supportive of long-term decision
making and investment returns. The significance of
environmental and social factors can vary depending on
thesector and the region in which a company operates.
Nonetheless, each ESG factor, in addition to the quantitative
and qualitative assessments, is an important consideration
when evaluating the opportunity in an equity investment.
ESG Ratings
Janus Henderson engages MSCI
1
, an independent leading
firmresearching and rating ESG factors globally, to support
investment research. MSCI can also be used to monitor the
holdings within the Company and analyse its overall ESG risk
exposure. The Company’s portfolio as at 31 December 2024
exhibited the following factors, as defined by MSCI’s analysis.
Overall MSCI ESG quality score
Portfolio
Benchmark
012345678
7.67
7.64
Source: MSCI as at 31 December 2024
ESG Quality Score measures the ability of underlying
holdings to manage key medium to long-term risks and
opportunities arising from environmental, social, and
governance factors. It is based on MSCI ESG Ratings and
ismeasured on a scale of 0 to 10 (worst to best).
ESG Rating Distribution
Laggard Average
Leader
CCC B A AA AAABB BBB
CCC B A AA AAABB BBB
Portfolio
29%
5%
Not rated
Not rated
30%
28%
7%
1%
0%0%
Benchmark
1
Laggard Average Leader
23%
7%
39%
24%
6%
1%
0%0%
1 The benchmark is a composite of 80% of the FTSE All-Share Index (total
return) and 20% of the ICE BofA Sterling Non-Gilts Index (total return)
rebalanced annually
Source: MSCI as at 31 December 2024
ESG Ratings Distribution represents the percentage of a
portfolio’s market value coming from holdings classified as
ESG Ratings Leaders (AAA and AA), Average (A, BBB and
Environmental, Social and Governance Matters
Henderson High Income Trust plc Annual Report 2024
31
Environmental, Social and Governance Matters
(continued)
BB), and Laggards (B and CCC). ESG ratings are calculated
based upon each company’s exposure to key ESG risks
across different components of a business’s value chain:
including core product/business segments, the locations of its
operations, and other relevant measures such as outsourced
production or reliance on government contracts. MSCI
conducts systematic monitoring and quality review of
information, as well as a formal committee review. There are
35 key metrics underlying the rating, each of which is centred
on the intersection between a company’s unique material
issues and industry-specific issues. This means that the MSCI
ESG ratings assess companies on their performance relative
to peers within their industry.
Carbon intensity
Portfolio
Benchmark
01020304050607
08
0
65.8
73.2
tCO
2
e/USD million
Source: MSCI as at 31 December 2024
Carbon intensity (Scope 1 and 2) is a metric used to compare
company emissions across industries. MSCI divides the
absolute emissions by total revenue, meaning the figure is
expressed in tonnes of carbon dioxide equivalent per US
Dollar million of total revenue. The Company’s overall portfolio
is 10.1% less carbon intensive than the benchmark.
Stewardship
Stewardship is an integral and natural part of JanusHenderson’s
long-term, active approach to investment management.
Strong ownership practices, such as management engagement
and proxy voting, can help protect and enhance long-term
shareholder value. Janus Henderson entities support a
number of stewardship codes and broader initiatives around
the world including being a founder signatory of the UN
Principles for Responsible Investment. The intensive research
of the portfolio managers and analysts involves conducting
onan annual basis thousands of interviews with senior
executives and chairmen of companies throughout the world.
These teams naturally develop long-term relationships with
the management of firms in which theyinvest. Should
concerns arise over a firm’s practices or performance, they
seek to leverage these constructive relationships by engaging
with company management or expressing their views through
voting on management or shareholder proposals. Escalation
of the engagement activities depends upon a company’s
individual circumstances.
Company engagement
Company engagement
2
incorporates a wide range of topics
including business strategy, capital allocation, remuneration
incentives, business risks and management succession as
well asESG issues.
The centralised Janus Henderson Responsible Investment &
Governance Team (the RIG Team) also assists with specific
engagement matters, including those of an ESG nature, in
respect of the positions held across the portfolio. The RIG
Team screens portfolios for major ESG issues and works to
highlight important ESG engagement topics ahead of
company meetings or any communications with companies.
In addition, the RIG Team directly engages with companies
with or on behalf of the Fund Manager on a wide range of
ESG themes including key topics such as climate change,
social considerations, and natural resource consumption.
Engagement is an ongoing process between the team and
senior management with the team monitoring the progress
made on issues raised.
During the year Janus Henderson conducted 44 meetings
with portfolio companies on dedicated ESG issues. These
engagements were separate to the more regular meetings with
management focusing on financials and business strategy.
Examples of engagement during 2024 are below:
1) UK Life insurers – Consumer Duty regulations
The Financial Conduct Authority has introduced Consumer
Duty regulations with the aim of setting higher standards for
retail financial services customers. The Duty came into force
for closed book products (those financial products still in
existence but no longer being sold) in July 2024. Engagement
between Janus Henderson and executives from investee
companies with exposure to closed life insurance products,
specifically Phoenix, Aviva, M&G and Chesnara were held
ahead of the Duty coming into force. The aim was to
understand how the companies had been preparing for the
deadline and assessing their products to ensure they aligned
with the regulation. This entailed evaluating products on
pricing as well as on the clarity of communications with
customers. From this engagement we gained comfort that the
larger companies were as best prepared as possible and
could articulate clear frameworks for assessing their products
and service levels with a sufficient time frame for remediation.
2) Genuit – Climate targets, Future Homes Standard and
other environmental topics
We engaged with Genuit on various topics including climate
targets, the Future Homes Standard (FHS), recycling
practices, and chemical use. Genuit is making strides in
environmental sustainability, notably by moving towards
science-based climate targets, engaging with the Carbon
Disclosure Project for improved transparency, and utilising
91% renewable energy with an aim for 100%. Their focus on
recycled polymers, alongside explorations into chemical
recycling and biopolymers, demonstrates a commitment to
Henderson High Income Trust plc Annual Report 2024
32
emission reduction. Genuit’s alignment with FHS and
Biodiversity Net Gain regulations, through innovative products
like heat pumps, and rigorous chemical management
practices, underscores their progress in environmental
stewardship and product safety.
3) Severn Trent – Governance, company culture and
regulatory landscape
We hosted a meeting with the Chair of Severn Trent to discuss
the current management team, the company’s culture, issues
faced by the sector given the current political and regulatory
landscape and its latest business plan submissions to the
regulator Ofwat. The company maintains high employee
engagement, outperforming UK and global utilities.
Thecompany’s focus on addressing industry challenges is
supported by proactive management and engagement
initiatives. Its business plan, approved by a significant
proportion of surveyed customers, emphasises financial
feasibility and customer-endorsed bill increases. Continuous
dialogue with regulators, environmental agencies, and political
parties ensures alignment on investment, bill management,
and sewer overflow improvements, positioning Severn Trent
favourably among stakeholders.
Voting
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 appointed the Manager to vote
the rights attached to the shares held in the Company’s equity
portfolio and the Manager actively votes at shareholder meetings
and engages with companies as part of the voting process.
Voting decisions are taken in keeping with the provisions of
the Manager’s Responsible Investment Policy. This can be
found on the Manager’s website www.janushenderson.com.
Corporate governance regimes vary significantly as a function
of factors such as the relevant legal system, extent of
shareholder rights and level of dispersed ownership. Thevoting
and engagement activities vary according to the market and
pay close attention to local market codes of bestpractice.
However, there are certain core principles that are universal:
disclosure and transparency; board responsibilities;
shareholder rights; and audit and internal controls.
A key element of the Board’s approach to proxy voting is to
support these principles and to foster the long-term interests
of the Company’s shareholders. In order to retain oversight of
the process, the Board receives an annual report on how the
Manager has voted the shares held in the Company’s equity
portfolio and reviews at least annually the Manager’s
Responsibility Report and Responsible Investment Policy.
In the period under review, investee companies held 69
general meetings. The shares held in the Company’s equity
portfolio were voted in respect of 95.7% of these meetings.
4.3% of the shares held were not voted due to voting
impediments. The level of governance in leading global
companies is generally of a high standard in terms of best
practice which has meant that support in favour of the
resolutions proposed by management was warranted.
However, out of the 66 meetings voted there were eight where
theManager voted against or abstained from at least one
resolution. In terms of the resolutions not supported, the
majority of these related to approval of director elections.
2024 voting record
Number of votable meetings 69
Number of meetings voted 66
Number of resolutions voted 1,279
Number of meetings voted 95.7%
Percentage of votes for 99.3%
Percentage of votes against 0.5%
Percentage of votes abstain 0.2%
Number of meetings with at least 1 vote
against, withheld or abstain
11.6%
Voting record for the period 1 January to 31 December 2024
Source: Janus Henderson
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, nordoes
it have responsibility for any other emissions producing sources
under the Companies Act 2006 (Strategic Report and Directors’
Reports) Regulations 2013. For the same reasons, the Company
considers itself to be a low energy user under the Streamlined
Energy & Carbon Reporting regulations and therefore is not
required to discloseenergy and carbon information.
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, JHI set ambitious new five-year reduction
targets versus a 2019 baseline and per FTE:
●
reduction target of 29.4% in Scope 1 (fuel) and Scope 2
(electricity) emissions;
●
reduction target of 17.5% in Scope 3 (business travel,
freight, paper, water, waste) emissions; and
●
reduction target of 17.5% on water and waste
consumption by FTEs.
In addition to this, JHI 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, JHI has invested in a variety of offset
projects around the world, delivering financial support to
essential renewable energy, forestry and resource
Environmental, Social and Governance Matters
(continued)
Henderson High Income Trust plc Annual Report 2024
33
conservation projects that support reductions in greenhouse
gas emissions. All projects JHI supports have been classified
as ‘additional’ by an independent third party, meaning they
would not happen without the sale of carbon credits.
JHI discloses its carbon emissions annually through regulatory
and voluntary reporting frameworks, including the Carbon
Disclosure Project (CDP), as well as in its 2023 Annual Report
and 2023 Responsibility Report, which provide more information.
JHI produces product-level Task Force on Climate-Related
Financial Disclosures (TCFD) reports. These reports include
an overview of the climate-related governance, strategy, risk
management, and metrics and targets of JHI and its portfolios.
Product-level metrics include absolute carbon emissions,
carbon footprint, weighted average carbon intensity, implied
temperature rise and climate scenario analysis (Climate Value
at Risk). JHI’s TCFD Report specific to the Company is
available at www.hendersonhighincome.com.
Environmental, Social and Governance Matters
(continued)
1
Certain information contained herein (the “Information”) is sourced from/copyright of MSCI Inc, MSCI ESG Research LLC, or their affiliates (“MSCI”), or information
providers (together the “MSCI Parties”) and may have been used to calculate scores, signals, or other indicators. The Information is for internal use only and may not
be reproduced or disseminated in whole or part without prior written permission. The Information may not be used for, nor does it constitute, an offer to buy or sell,
or a promotion or recommendation of, any security, financial instrument or product, trading strategy, or index, nor should it be taken as an indication or guarantee of
any future performance. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management or
other measures. MSCI has established an information barrier between index research and certain Information. None of the Information in and of itself can be used to
determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user assumes the entire risk of any use it may make
or permit to be made of the Information. No MSCI Party warrants or guarantees the originality, accuracy and/or completeness of the Information and each expressly
disclaims all express or implied warranties. No MSCI Party shall have any liability for any errors or omissions in connection with any Information herein, or any liability
for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages
2
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
beassumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned
Henderson High Income Trust plc Annual Report 2024
34
Governance
35
Jeremy Rigg
(Chairman)
Date of appointment: 1 April 2018
(appointed Chairman of the Board and
Management Engagement Committee on
24 May 2021).
Committees: Chairman of the
Management Engagement Committee
and Member of the Nominations &
Remuneration Committee and Audit &
RiskCommittee.
External appointments: Jeremy is a
Director of Moorland Green Properties
Limited.
Background: Jeremy was a Director of
Schroder Investment Management (UK)
Ltd and a Senior Investment Manager at
Investec Asset Management Limited.
In2004, he was a Founding Partner of
Origin Asset Management LLP, a boutique
equity investment manager which grew
successfully and was acquired by
Principal Global Investors Limited in 2011.
Jeremy graduated from St Andrews
University in 1989.
Skills and experience: Jeremy provides
an objective and broad view to board
discussions and challenges the Manager
on investment decisions. Jeremy has over
25 years’ experience in the investment
management industry and has proven
himself as a key member of the Board.
Richard Cranfield
(Independent Non-Executive
Director)
Date of appointment: 1 March 2020.
Committees: Member of the Nominations
& Remuneration Committee, Management
Engagement Committee and Audit &
RiskCommittee.
External appointments: Richard is Chair
of IntegraFin Holdings plc.
Background: Richard retired as a partner
in law firm Allen & Overy LLP in October
2021 and became Senior Adviser, a role he
held until April 2022. He was previously
Global Chairman of the Corporate Practice
and Co-Head of its Financial Institutions
Group. Richard had been with Allen &
Overy LLP since he joined them from
university in 1978. In 2000, Richard was
appointed Global Head of Corporate and in
2010 took a step back from management
to focus on client relationships. In June
2019, Richard was appointed to the board
of IntegraFin Holdings plc and became
Chair in October 2019. IntegraFin Holdings
plc is a FTSE 250 company, the ultimate
owner of the investment platform provider
Transact.
Skills and experience: Richard has spent
40 years at the highest levels of legal
practice. He has extensive understanding
of corporate governance and understands
financial institutions from his career at
Allen & Overy LLP and as the Chair of
IntegraFin Holdings plc. This has also
given him a good understanding of the
workings of investment platforms which
the Board believes is important as more of
the Company’s shareholders choose to
hold their shares through platforms.
Zoe King
(Senior Independent Director)
Date of appointment: 1 April 2016
(appointed Senior Independent Director
on 23 June 2020).
Committees: Chairman of the
Nominations & Remuneration Committee,
Member of the Management Engagement
Committee and Audit & Risk Committee.
External appointments: Zoe is a director
of Evelyn Partners Investment
Management Limited, specialising in the
management of private client portfolios.
She is also a non-executive director at
The Global Smaller Companies Trust PLC
and a member of the Trinity College
Oxford Investment Committee, the
Carvetian Capital Fund Investment
Committee and the Stramongate S.A
Shareholder AdvisoryCommittee.
Background: Zoe was formerly Vice
President at Merrill Lynch Mercury Asset
Management and a Fund Manager at
Foreign & Colonial Investment
Management. She graduated from
OxfordUniversity in 1994.
Skills and experience: Zoe is an
experienced investment professional and
a director of Evelyn Partners Investment
Management Limited, which ensures that
her fund management skills and
knowledge remain up to date. Zoe utilises
her fund management background to
bring an objective view to the Manager’s
investment strategy and to challenge the
Manager on investment decisions, while
her years of experience in looking after the
capital of individuals bring a shareholder’s
perspective to Board discussions.
Board of Directors
The right balance of skills and experience
Henderson High Income Trust plc Annual Report 2024
36
Board of Directors (continued)
All Directors are members of the Insider Committee that meets when required in accordance with the Market Abuse Regulation.
Francesca Ecsery
(Independent Non-Executive
Director)
Date of appointment: 31 December
2022.
Committees: Member of the Nominations
&Remuneration Committee, Management
Engagement Committee and Audit &
RiskCommittee.
External appointments: Francesca is a
non-executive director at the Association
of Investment Companies (AIC), Haffner
Energy SA and Air France S.A.
Background: Francesca was previously a
non-executive director at F&C Investment
Trust PLC, Marshall Motor Holdings PLC,
CT Automotive PLC, Share PLC and Good
Energy Group PLC and has held various
senior positions in consumer-focused
industries including the digital, retail,
leisure and travel sectors. Her previous
executive roles include McKinsey,
PepsiCo, Thorn EMI, Thomas Cook
andSTA Travel.
Skills and experience: Francesca has
over 30years’ experience working in both
blue-chip companies and start-ups and
has special expertise in multiplatform
consumer marketing, branding and
commercial strategies.
Jonathan Silver
(Chairman of the Audit
andRisk Committee)
Date of appointment: 2 January 2019
(appointed as Chairman of the Audit &
Risk Committee on 8 May 2019).
Committees: Chairman of the Audit &
Risk Committee, Member of the
Nominations & Remuneration Committee
and Management Engagement
Committee.
External appointments: Jonathan is a
non-executive director of Baillie Gifford
China Growth Trust plc and a non-
executive director and Chairman of the
Audit Committee of Spirent
Communications plc, a position he has
held since 2015.
Background: Jonathan is a member of
the Institute of Chartered Accountants of
Scotland. He has held various senior
financial positions throughout his career,
including 21 years as Chief Financial
Officer on the main Board of Laird plc
from 1994 until 2015.
Skills and experience: Jonathan is a
qualified accountant and therefore brings
financial and accounting skills and
experience to the Board. He is an
experienced non-executive director and in
particular brings previous investment trust
experience and leadership skills to the
Board from his former and current roles
as Chief Financial Officer of Laird plc, and
as Audit Committee Chairman of Invesco
Income and Growth Trust plc, Spirent
Communications plc and East and North
Hertfordshire NHS Trust. Jonathan has
recent and relevant financial experience, a
principal requirement for the composition
of an Audit Committee under the UK
Corporate Governance Code. The Board
also believes this experience is
fundamental to an effective Board.
Preeti Rathi
(Independent Non-Executive
Director)
Date of appointment: 31 December
2024.
Committees: Member of the Nominations
& Remuneration Committee, Management
Engagement Committee and Audit & Risk
Committee.
External appointments: Preeti has been
a Senior Investment Director at Investec
for over nine years, specialising in the
management of bespoke global
investment strategies for high net worth
private clients, offshore trusts and
corporates. She also acts as an adviser
toseveral charities.
Background: Preeti was formerly a
Director of TIE London Limited and a
Discretionary Portfolio Manager at
Kleinwort Benson Private Bank.
Skills and experience: Preeti has 15
years’ experience in wealth management
as an Investment Director/Discretionary
Portfolio Manager with Bank of America
Merrill Lynch, Kleinwort Benson Private
Bank and Investec Wealth & Investment
across a broad range of asset classes
including inter alia bonds, equities, unit
trusts, investment trusts and ETFs.
Henderson High Income Trust plc Annual Report 2024
37
Corporate Governance Report
Division of responsibilities
Role Primary responsibilities
Shareholders/investors The Company’s shareholders are responsible for:
●
approving the Company’s investment objective and policy;
●
making decisions regarding changes to the Company’s constitution;
●
appointing and re-appointing Directors to the Board, or removing them from office if deemed
appropriate; and
●
determining the overall limit for Directors’ remuneration.
Chairman The Chairman of the Board is responsible for:
●
leading and managing Board business and ensuring the timely flow of information from service
providers to the Board. He facilitates open, honest and constructive debate among directors;
●
leading the Board in developing succession planning;
●
leading the Board in determining its governance framework, culture and values;
●
representing the Company, alongside the Fund Manager, externally; and
●
managing the relationship with the Manager.
Senior Independent
Director
The senior independent director:
●
acts as a sounding board to the Chairman;
●
serves as an intermediary for the other directors and shareholders; and
●
is responsible for leading the performance evaluation of the Chairman.
Independent
non-executive directors
The independent non-executive directors are responsible for:
●
providing constructive and effective challenge, especially to the decisions of the Manager;
●
scrutinising and holding to account the performance of the
– fund management team in meeting the investment objective;
– Manager in the promotion of the Company and day-to-day smooth operations of the
Company’s business; and
●
providing strategic guidance and offering specialist advice.
Committee Chairmen The Committee Chairmen are responsible for:
●
the leadership and governance of their committee;
●
maintaining the relationships with specialist service providers delivering services within the
remit of their committees;
●
reporting on the activities of their committee to the Board; and
●
seeking approval from the Board for the responsibilities set out in their respective terms of
reference.
Manager The Manager is the Company’s appointed Alternative Investment Fund Manager and is responsible for:
●
promoting the Company’s investment proposition to professional and retail investors;
●
making the necessary reporting to the FCA regarding the Company’s status as an Alternative
Investment Fund;
●
providing accounting, company secretarial and other administrative services to the Company
ensuring compliance with the applicable statutory and regulatory provisions; and
●
coordinating the delivery of services provided by the Company’s other third-party service
providers.
Fund Manager The Fund Manager and his team are responsible for:
●
selecting the stocks held within the portfolio;
●
diversification and risk management through stock selection and size of investment;
●
determining the volume and timing of acquisitions and disposals; and
●
determining the day-to-day level of gearing within the overall limits set by the Board.
Henderson High Income Trust plc Annual Report 2024
38
Corporate Governance Report (continued)
Applicable Corporate Governance Codes
By virtue of the Company’s listing on the London Stock
Exchange, the Board is required to report on how the
principles of the UK Corporate Governance Code have been
applied. The AIC Code of Corporate Governance published in
January 2019 has been endorsed by the Financial Reporting
Council. This enables investment company boards to report
against the AIC Code and still meet their obligations in relation
to the UK Code and UK Listing Rule 6.6.6.
Closed-end investment companies have particular factors
which have an impact on their governance arrangements and
the AIC Code adopts the principles and provisions of the UK
Code to make them relevant for investment companies.
The Board has therefore chosen to report under the AIC Code.
The Company is governed entirely by a Board of non-executive
Directors; therefore, the Company has no executive directors
or senior management remuneration packages.
Copies of the AIC Code and the UK Code can be found on
www.theaic.co.uk and www.frc.org.uk.
A new UK Code was published in January 2024, with an
updated AIC Code published in August 2024. The new
Codeswill be applicable to financial years beginning on or
after 1January 2025.
Statement of compliance
For the year-ended 31 December 2024 the Company has
complied with all the provisions of the AIC Code with the
exception of provision 9.2.37 to establish a separate
Remuneration Committee. Given the Board has a simple
remuneration structure and does not need to consider
executive remuneration, the Board has a combined
Nominations and Remuneration Committee comprising all
theindependent non-executive Directors.
The Board
Overview
The Articles of Association provide that the total number of
Directors shall not be less than two nor more than ten in
number. The Board currently consists of six non-executive
Directors. The biographies of the Directors holding office at
the date of this report demonstrate the breadth of investment,
commercial, legal, financial and other professional experience
relevant to their positions as Directors.
The Board meets formally at least six times a year, with
additional Board or Committee meetings arranged when
required. The Directors have regular contact with the Manager
between formal meetings. The Board has a formal Schedule
of Matters Reserved for its decision and the terms of
reference for each of the Committees of the Board are kept
under regular review. These documents are available to view
at www.hendersonhighincome.com.
Board leadership and purpose
The Board is responsible for providing leadership, setting the
investment objective and policy, appointing the Company’s
third-party service providers, establishing a robust internal
control and risk management system and monitoring the
performance delivered by its service providers within the
established control framework.
At each meeting the Board reviews the Company’s investment
performance and considers financial analyses and other
reports of an operational nature. The Board monitors
compliance with the Company’s investment objective and
policy, and is responsible for setting investment limits and
restrictions, including gearing limits, within which the Manager
has discretion to act. The Board has responsibility for the
approval of any investments in in-house funds managed or
advised by the Manager.
The Company has a procedure for Directors to take
independent professional advice at the expense of the
Company in the furtherance of their duties. In order to enable
them to discharge their responsibilities, all Directors have full
and timely access to relevant information.
The Board has engaged specialist third-party service
providers to deliver the operations of the Company.
Management of the investment portfolio has been delegated
contractually to Janus Henderson, which also provides the
day-to-day accounting, company secretarial, administrative
and sales and marketing activities. The Company has
appointed a depositary, who in turn appoints the custodian
who is responsible for the safe custody of the Company’s
assets. The Company has appointed a registrar to maintain
the Register of Members and assist shareholders with queries
in respect of their holdings. The Company entered into each
of these principal contracts after full and proper consideration
of the quality and cost of the services offered, including the
operation of their control systems in relation to the affairs of
the Company. The Board and its Committees maintain
oversight of the third-party service providers through regular
and ad hoc reporting, in addition to ongoing monitoring by
theManager.
The Chairman is able to attend meetings of all the chairmen of
the investment trust companies managed by Janus Henderson
which provide a forum to discuss industry matters which are
then reported to the Board as necessary.
The Manager takes decisions as to the purchase and sale
ofindividual investments. The Manager also ensures that all
Directors receive all relevant management, regulatory and
financial information in a timely manner. Representatives of
theManager attend each Board meeting enabling the
Directors to probe further on matters of interest or concern.
The proceedings of all Board and committee meetings are
minuted, with any concerns raised by the Directors
appropriately recorded.
Henderson High Income Trust plc Annual Report 2024
39
Corporate Governance Report (continued)
Board composition
Appointment, tenure and retirement of directors
No Director is expected to serve for more than nine years
unless particular circumstances warrant it, for example to
facilitate effective succession planning, or promote diversity.
There may be occasions when the Board may decide to
extend the tenure of the Chairman for the sake of continuity
and/or historical knowledge of the Company. This may be so
particularly if an existing non-executive Director is appointed
as Chairman of the Board. In these exceptional cases an
explanation for such a decision will be given to shareholders.
Diversity
As at 31 December 2024, three out of the six Directors (50%)
were women with the role of Senior Independent Director
being held by a woman. The Board also met the UK Listing
Rules recommendation that at least one Director is from an
ethnic minority background.
It is the Company’s aim to have a diverse Board. The
Nominations and Remuneration Committee considers
diversity generally when making recommendations for
appointments to the Board, taking into account gender, social
and ethnic backgrounds, cognitive and personal strengths
and experience. All Board appointments are subject to a
formal, rigorous and transparent procedure. 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.
Gender identity
Number of
Board
members
% of the
Board
Number of
senior
positions on
the Board
1
Men 3 50 2
Women 3 50 1
Ethnic background
White British or other White
(including minority white
groups) 5 83.3 3
Asian/Asian British 1 16.7 –
1 As an externally managed investment company, the Company does not have
a CEO or CFO. Accordingly, only the roles of Chairman, Audit and Risk
Committee Chairman and Senior Independent Director are applicable to this
disclosure. The information in the table was provided by individual Directors
in response to a request from the Company
There have been no changes to the Board or the roles
oftheDirectors between 31 December 2024 and the date
ofthisreport.
Directors’ independence
The independence of the Directors is determined with
reference to the AIC Code. The Nominations & Remuneration
Committee considers the independence of each Director at
least annually by reviewing the Directors’ other appointments
and commitments, as well as their tenure of service and any
connection they may have with the Manager. The Board does
not believe that length of service on the Board necessarily
compromises a director’s independence nor that it should
necessarily disqualify a director from seeking re-appointment.
There were no contracts subsisting during or at the end of the
year in which any Director is or was materially interested and
which is or was significant in relation to the Company’s
business. No Director has a contract of service with the
Company and there are no agreements between the Company
and its Directors concerning compensation for loss of office.
In the year under review, the Nominations and Remuneration
Committee determined that all Directors continued to be
independent in character and judgment. The Committee
believed that the Directors’ skills, broad business experience
and knowledge and understanding of the Company were of
benefit to shareholders and its long-term sustainable success.
Directors’ conflicts of interest
The Company’s Articles of Association permit the Board to
consider and, if it sees 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 to be considered for authorisation
by those Directors who have no interest in the matter being
considered. In deciding whether to authorise a situational
conflict, the non-conflicted Directors must act honestly and in
good faith with a view to the best interests of the Company
and they may impose limits or conditions when giving the
authorisation, or subsequently, if they think this is appropriate.
Any situational conflicts considered, and any authorisations
given, are recorded in the relevant meetings’ minutes. The
prescribed procedures have been followed in deciding
whether, and on what terms, to authorise situational conflicts
and the Board believes that the systems it has in place for
reporting and considering situational conflicts continue to
operate effectively. Furthermore, no conflicts of interest have
been identified that would allow third parties to influence or
compromise the individual Director’s independent judgment.
Directors’ re-appointment/appointment
Each of the Directors, being eligible, have stated that they will
offer themselves for re-appointment at the AGM in 2025, with
the exception of Zoe King who is to retire at the conclusion of
the AGM. Preeti Rathi, who was appointed to the Board on
31December 2024, will stand for appointment by
shareholders at the 2025 AGM.
Recommendation for re-appointment is not automatic and
follows a process led by the Nominations & Remuneration
Committee of each Director’s performance and consideration
of the Director’s independence, skills and experience. See
page 47 for details of the Board evaluation process.
Henderson High Income Trust plc Annual Report 2024
40
Corporate Governance Report (continued)
Under the Articles of Association, shareholders may remove
adirector before the end of his or her term by passing an
ordinary resolution at a general meeting.
Directors’ professional development
Newly appointed directors are offered a bespoke induction
programme which covers the legal and regulatory framework
for investment companies and the operations of the Manager,
including risk, compliance and internal audit, financial
reporting oversight and bespoke sales and marketing specific
to the Janus Henderson managed investment trusts.
Directors are also provided on a regular basis with key
information on the Company’s policies, regulatory and
statutory requirements and internal controls. Directors’
individual training requirements are considered as part of
theannual Board evaluation process which is led by the
Nominations and Remuneration Committee Chairman.
Directors’ insurance and indemnification
Directors’ and officers’ liability insurance cover is in place
which indemnifies the Directors against certain liabilities arising
from carrying out their duties. Under the Company’s Articles of
Association and subject to the provisions of UK legislation, a
qualifying third-party provision indemnity may be provided to
directors in respect of costs which they may incur relating to
the defence of any proceedings brought against them arising
out of their positions as directors, in which they are acquitted,
or judgment is given in their favour by the Court. No indemnity
was given during the year or up to the date of this report.
Meeting attendance
The table below sets out the number of formal Board and
Committee meetings held during the year under review and
the number of meetings attended by each Director. All
Directors, except for Preeti Rathi who joined the Board on
31December 2024, attended the AGM on 14 May 2024.
TheInsider Committee did not meet during the year.
Board ARC NRC MEC
Number of Meetings 6 3 2 1
Jeremy Rigg 6 3 2 1
Jonathan Silver 6 3 2 1
Zoe King 6 3 2 1
Richard Cranfield 6 3 2 1
Francesca Ecsery 6 3 2 1
ARC: Audit and Risk Committee
NRC: Nominations and Remuneration Committee
MEC: Management Engagement Committee
An additional meeting of a Committee of the Board was held
to approve the Company’s year-end results.
There were also three ad hoc Board meetings and two ad hoc
Nominations & Remuneration Committee meetings held
during the year to undertake business in relation to:
●
the scheme of reconstruction and winding up of
Henderson Diversified Income Trust plc (HDIV) under
section 110 of the Insolvency Act 1986 and the associated
transfer of part of the assets and undertaking of HDIV to
the Company in exchange for the issue of new ordinary
shares in the Company; and
●
the appointment of Preeti Rathi as a Director of the
Company.
Henderson High Income Trust plc Annual Report 2024
41
Framework of internal controls
Board of Directors
(comprised entirely of independent non-executive Directors)
Principal third-party
service providers
The Directors:
●
receive regular
reporting at meetings;
●
review the annual
assurance report
produced by each
organisation;
●
receive additional
reporting on the
control environment
from the Manager’s
Operational Risk
Team;
●
receive reporting from
the Manager’s Internal
Audit Team on areas
relevant to investment
trusts; and
●
formally evaluate the
performance on an
annual basis.
Secondary third-party
service providers
The Directors:
●
receive regular
reporting on their
activities at meetings;
and
●
formally evaluate their
performance on an
annual basis.
How the system of internal
control operates
The Board delegates contractually
to third-party service providers for
all of the Company’s operational
requirements. It maintains oversight
of these providers throughout the
year by receiving regular reporting
on their activities.
The Company’s principal third-
party service providers are the
Manager (Janus Henderson); the
Depositary/Custodian (HSBC) and
the accountants and administrators
(BNP Paribas).
In respect of its principal providers,
the Board receives quarterly
reporting on compliance with the
control environment and assesses
the effectiveness of the control
environment through review of the
annual assurance reports (usually
ISAE 3402) from each organisation.
This reporting is supplemented by
the view of the Manager’s
Operational Risk Team regarding
the control environments in
operation at the providers.
The Company’s secondary
third-party providers report
regularly to the Board. A failing in
their services is deemed to have a
minimal impact on the Company’s
value and therefore less stringent
reporting isrequired.
The Management Engagement
Committee formally evaluates the
performance and service delivery
of all third-party service providers
at least annually.
The Audit and Risk Committee
evaluates the performance of the
statutory auditor on completion of
each audit cycle.
J.P. Morgan
Cazenove Limited
(Corporate Broker)
Janus
Henderson
(Investment
management,
company
secretarial,
sales, marketing,
PR and
administration)
Reporting
• Investment
performance
update at
each meeting
• Investment
limits and
restrictions
(monthly)
• Internal
control report
(quarterly)
• Effectiveness
of control
environment
(annually)
HSBC
(Depositary/
Custodian)
Reporting
• Depositary’s
report
(quarterly)
• Presentation
from the
Depositary
and
Custodian
(annually)
• Effectiveness
of control
environment
(biannually)
BNP Paribas
(Accounting and
administration
services
engaged by the
Manager)
Reporting
• Balance sheet
• Liquidity and
gearing
• Income
forecasts
• Portfolio
valuation
• Portfolio
transactions
• Portfolio
attribution
• Effectiveness
of control
environment
(annually)
Marten & Co
Limited
1
(Sponsored Research)
Computershare
Investor Services PLC
(Registrar)
1 Kepler Partners LLP were appointed as the Company’s Sponsored Research provider for 12 months with effect from 1January 2025
PricewaterhouseCoopers LLP was appointed as the Company’s statutory auditor for the year ended 31December 2024.
Seepages 54 to 60 for further details.
Corporate Governance Report (continued)
Henderson High Income Trust plc Annual Report 2024
42
Role
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 monitoring the effectiveness and objectivity
of the external auditor.
Membership
The Committee is chaired by Jonathan Silver, who is
considered by the Board to have recent and relevant
financialexperience, and the Committee as a whole has
competence relevant to the sector in which the Company
operates and to the Company as an investment trust.
All Directors are members of the Committee, including the
Chairman of the Board. Taking account of the size of the
Board as a whole, the absence of any executive directors
andthe collaborative manner in which the Board and its
Committees work, it was not considered practical or
constructive to exclude the Chairman from being a member
ofthe Committee. The Chairman of the Board was
determined to be independent at the time of his appointment.
Meetings
The Committee met three times in the year under review.
TheCompany’s auditor, the Fund Manager and the Manager’s
Financial Reporting Senior Manager forInvestment Trusts are
invited to attend meetings of the Committee on a regular basis.
Other representatives of the Manager may also be invited to
attend meetings if deemed necessary by the Committee.
Responsibilities
In discharging its duties over the course of the year the
Committee considered:
Financial Reporting
●
the Company’s annual report and half-year financial
statements, appropriateness of the accounting policies
applied and the use of the going concern basis for their
preparation;
●
the significant financial reporting issues and areas of
judgement in the financial statements, taking into account
the views of the auditor and challenging the Manager
where necessary on the consistency of, and any changes
to, accounting policies both on a year-on-year basis and
across the Company;
●
the methods used to account for significant or unusual
transactions where different approaches are possible;
●
the clarity and completeness of disclosures in the
Company’s financial statements and the context in which
these statements were made;
●
all material information presented within the Annual Report
insofar as it relates to audit and risk management;
●
the Company’s statement on Internal Control and Risk
Management and Internal Audit Function prior to
endorsement by the Board; and
●
whether the information presented in the Annual Report
is,in the Committee’s view, fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position and
performance, business model and strategy.
Internal Controls and Risk Management Systems
●
the assessment of the principal and emerging risks facing
the Company and the long-term viability statement in light
of these risks;
●
the adequacy and effectiveness of the Company’s internal
controls and risk management systems, including a review
of the Company’s key third-party suppliers’ assurance
reports and risk management systems;
●
monitoring and evaluating the effectiveness of the
Company’s system of internal control and assessing the
need for a separate internal audit function;
●
the use of artificial intelligence (AI) technology and
effectiveness of cyber security controls in place at the
Manager; and
●
the remit and effectiveness of the Manager’s Internal
Audit, Compliance, Risk, Information Security and
Business Resilience functions in the context of the
Manager’s overall risk management systems.
TheCommittee met representatives of the Manager’s
Riskand Internal Audit Teams, at the half year and full
yearreporting stage and with representatives of the
Manager’s Compliance, Information Security and
BusinessResilience Teams.
External Audit
●
the appointment and evaluation of the effectiveness and
objectivity of the auditor, approval of their terms of
engagement, and determining their remuneration;
●
agreeing the nature and scope of the statutory audit,
meeting regularly with the auditor to discuss any issues
arising, and reviewing the auditor’s findings;
●
the policy on the provision of non-audit services by the
auditor and the auditor’s independence;
●
the need to include the risk of the withdrawal of the auditor
from the market in the Board’s risk evaluation and
planning; and
●
meeting regularly with the auditor to discuss the auditors’
remit and any issues arising from the audit (including at
least once a year without representatives of the Manager
being present).
Compliance, whistleblowing and fraud
●
the whistleblowing arrangements in place at the Manager
and other service providers enabling staff to raise concerns
about possible improprieties in confidence and that these
arrangements allow proportionate and independent
investigation of such matters and appropriate follow up action;
●
the Manager’s procedures for detecting fraud; and
●
confirmations from the Manager and the Company’s
third-party service providers of their adherence to the UK
Audit and Risk Committee Report
Henderson High Income Trust plc Annual Report 2024
43
Bribery Act 2010, the Modern Slavery Act 2015, the Criminal
Finances Act 2017 and sanctions element of the Economic
Crime (Transparency and Enforcement) Act 2022.
Risk management and internal control
The Board has overall responsibility for the Company’s system
of internal control and for reviewing its effectiveness. The
Audit & Risk Committee supports the Board in the continuous
monitoring of the Company’s internal control and risk
management framework and that of its key service providers.
The diagram on page 42 illustrates the Company’s internal
control framework.
The Audit & Risk Committee uses an ongoing process for
identifying, evaluating and managing the principal risks faced
by the Company. The process accords with the FRC’s
Guidance on Risk Management, Internal Control and Related
Business and Financial Reporting published in September
2014. The system is designed to meet the specific risks faced
by the Company and takes account of the nature of the
Company’s reliance on its service providers and their internal
controls and risk management systems. 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, specifying levels of
authority and exposure limits. The Board reviews reports
on compliance with the criteria at each meeting;
●
regular financial reporting which allows the Board to
assess the Company’s financial position. The
management accounts and forecasts are reviewed by
theBoard at each meeting;
●
contractual agreements with the Manager and all other
third-party service providers. The Board reviews
performance levels and adherence to relevant provisions
of the agreements on a regular basis through reporting to
the Board and the Management Engagement Committee
conducts a formal evaluation of the overall level of service
provided at least annually;
●
the review of internal controls (including financial, operational
and compliance controls) at the Manager and other third-
party service providers. The Board receives quarterly
reporting from the Manager and the depositary, and reviews
assurance reports on the effectiveness of the control
environments at the Company’s key service providers.
●
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 Global Head of Internal Audit at the full
year and half year stage to obtain comfort that the high
standards of internal control and the risk management
systems in place at the Manager were satisfactory. In
particular, the Committee asked questions relating
specifically to areas of the Manager’s business that
directly or indirectly affected investment trusts.
The Board has reviewed the effectiveness of the Company’s
system of internal controls for the year ended 31 December
2024 and is satisfied that it has not identified or been advised
of any failings or weaknesses that have been determined as
significant. The Committee is therefore satisfied that the
internal control and risk management systems in place at the
Manager and its key service providers remain effective.
Internal Audit
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. The Company is an
investment company, has no employees and delegates all
executive activities to third-party service providers, principally
among them, the Manager. The Board places reliance on the
Company’s framework of internal control and the Committee’s
view on reporting received from specific second and third line
of defence teams at the Manager.
The Manager’s Operational Risk Team supports the Committee
in considering the independently audited assurance reports
on the effectiveness of internal controls in place at the
Company’s third-party service providers. The Manager’s
Internal Audit Team provides regular reporting to the Board on
the operations at the Manager and presents to the Committee
at the full year and half year reporting stage. The Committee
therefore concluded that it is not necessary at the present
time for the Company to have its own internal audit function.
External audit
Appointment and tenure of the auditor
Regulations currently in force require the Company to tender
the statutory audit every ten years and rotate audit firms every
20 years. PwC was appointed as the auditor in 2016 following
a formal tender process and presented their first report in
respect of the year ended 31 December 2016. Jennifer March
is the audit partner and has been in place for four years.
Subject to the continuing agreement from shareholders on the
appointment of the auditor, the Committee envisages carrying
out an audit tender process in respect of the year-ending
31December 2026 at the latest.
Auditor’s independence
The Committee monitors the auditor’s independence through
three aspects of its work: the approval of a policy regulating
the non-audit services that may be provided by the auditor
tothe Company, assessing the appropriateness of the fees
paid to the auditor and reviewing the information and
assurances provided by the auditor on their compliance with
the relevant ethical standards. PwC has confirmed that all of
its partners and staff involved with the audit were independent
of any links to the Company, and that these individuals had
complied with their ethics and independence policies and
procedures which are fully consistent with the FRC’s
EthicalStandards.
Audit and Risk Committee Report (continued)
Henderson High Income Trust plc Annual Report 2024
44
Audit and Risk Committee Report (continued)
Policy on the provision of non-auditservices
The Committee has approved, and keeps under regular review,
the policy on the provision of non-audit services by the auditor.
The policy sets out that the Company’s auditor will not be
considered for non-audit work where this is prohibited by the
current regulations and where it appears to affect their
independence, effectiveness and objectivity.
In addition, the provision of any non-audit services by the
auditor is not permitted to exceed 70% of the average annual
statutory audit fee for the three consecutive financial periods
preceding the financial period to which the cap applies.
Suchservices require approval in advance by the Committee,
or the Committee Chairman, following due consideration of
the proposed services. Since the appointment of PwC in
2016, the auditor has not provided any non-audit services
tothe Company.
Directors’ statement as to disclosure of information
to the auditor
Each of the Directors who were members of the Board at the
date of approval 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.
Significant issues
In relation to the annual report for the year-ended 31December 2024 the following significant issues were considered by
theCommittee:
Significant issues and audit matters How it was addressed
Valuation and ownership
of investments
The Directors have appointed the Manager, who outsources some of
theadministration and accounting services to BNP Paribas, to perform the valuation
of the assets of the Company in accordance with its responsibilities under the
AIFMDrules. As required under the AIFMD rules, the Manager has adopted a written
valuation policy, which may be modified from time to time. Actively traded investments
are valued using stock exchange prices provided by third-party pricing vendors.
Recognition of income Income received has been accounted for in line with the Company’s accounting
policies. The Board reviews revenue forecasts in support of the Company’s future
dividends at every meeting and reviews the allocation between revenue and capital
for special dividends as necessary.
Investment trust status The Committee reviews the Manager’s procedures for complying with relevant
regulations so as to ensure that the Company maintains its investment trust status
and regularly seeks confirmation of compliance with the relevant regulations.
Maintaining internal controls The Committee receives regular reports on internal controls from its key third party
service providers and has access to the relevant personnel of the Manager who have
a responsibility for risk management and internal audit. The Committee is satisfied
that these key stakeholders have appropriate and effective internal control and risk
management systems in place.
Accounting for transaction with HDIV The Committee considered the appropriateness of the accounting and disclosures in
respect of the Company’s combination with HDIV.
Ability to continue as a going concern
(continuation vote)
The Committee considered the Company’s ability to continue as a going concern in
relation to the upcoming continuation vote at the AGM in May 2025.
Audit for the year-ended 31 December 2024
In the year under review the auditor challenged both the Manager’s and the Board’s judgments and exercised professional
scepticism. The auditor required detailed evidence of all material metrics, numbers and disclosures made within the annual
report to support a robust assessment and evaluation of the financial information contained therein. Overall the Committee
considers that the audit quality has been high and is satisfied that the annual report for the year-ended 31 December 2024,
takenas a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the
Company’s position and performance, business model and strategy.
Jonathan Silver
Chairman of the Audit and Risk Committee
26 March 2025
Henderson High Income Trust plc Annual Report 2024
45
Role
The Management Engagement Committee is responsible for
formally evaluating the overall performance and continuing
appointment of the Manager and other third-party service
providers engaged by the Company.
Membership
The Committee is chaired by the Chairman of the Board.
Allthe independent non-executive Directors are members
oftheCommittee.
Meetings
The Committee meets at least once a year.
Responsibilities
In discharging its duties over the course of the year, the
Committee assessed:
●
the investment performance of the Company, taking
account of the benchmark and performance of
competitors;
●
the quality and experience of the team involved in
managing all aspects of the Company’s business;
●
the fee structures of its closed-end competitors and other,
similar sized investment companies;
●
the key clauses of the investment 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 brokers,
depositary, custodian, registrar, legal counsel and
accountants.
Re-appointment of the Manager
Following completion of its reviews, the Committee concluded
that the continued appointment of the incumbent Manager
remained in the best interests of the Company and the
shareholders, and therefore recommended to the Board the
re-appointment of JHI for a further year.
Management Engagement Committee Report
Henderson High Income Trust plc Annual Report 2024
46
Nominations & Remuneration Committee Report
Role
The Committee advises the Board on the composition of the
Board and its Committees, ensuring suitable succession
plans are in place for the Directors and Fund Manager, and
has a formal, rigorous and transparent approach to the
appointment of Directors to the Board.
The Committee also has responsibility for setting the
Remuneration Policy and determining the remuneration for all
the independent non-executive Directors within the
parameters determined byshareholders.
Membership
The Committee is chaired by Zoe King, the Senior
Independent Director. All the independent non-executive
Directors are members of the Committee.
Meetings
The Committee meets twice annually, with additional
meetings scheduled when required.
Responsibilities
In discharging its duties over the course of the year, the
Committee considered:
Nominations
●
the composition of the Board and each of its committees,
taking account of the skills, experience and knowledge of
each Director and whether they continued to contribute to
the success of the Company;
●
the outcomes 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 tenure of each of the Directors, giving consideration
asto whether the Board retained a sufficient balance of
length of service without becoming complacent;
●
the independence of the Directors taking account of the
guidelines established by the AIC Code as well as the
Directors’ other commitments;
●
the time commitment of the Directors and whether this
had been sufficient over the course of the year;
●
succession planning for appointments to the Board taking
account of the tenure of the current Directors and
recommendations of the AIC Code;
●
the recruitment of a new non-executive Director; and
●
the performance and contribution of the Directors standing
for re-appointment at the 2025 Annual General Meeting.
Remuneration
●
the Company’s remuneration policy with a view to
ensuring this continued to reflect market practice and
enable the Company to attract and retain an appropriate
calibre of director; and
●
the individual remuneration of the Chairman, Chairman
ofthe Audit and Risk Committee, Senior Independent
Director and the other Directors, making appropriate
recommendations to the Board based on their findings.
The changes to the Directors’ fees are set out in the
Remuneration Report on page 49.
Annual performance evaluation
The Committee Chairman led the review of the annual
performance evaluation process, including the review of the
Chairman. The evaluation was conducted by way of a
questionnaire circulated to each individual Director and the
outcomes were presented to theCommittee. In addition, the
Chairman and Senior Independent Director held separate
private discussions witheach Director individually.
The evaluation addressed board and committee meetings,
board composition, board dynamics and culture, directors’
remuneration and training and development. The Directors
considered that meetings were constructive and collaborative
in nature and each Director made a valuable contribution to
the Board and its discussions.
All Directors remained independent in character and judgment
and there was a goodbalance of skills and experience on the
Board that encouraged diversity of thought.
There is an orderly succession plan for appointments going
forward to maintain an appropriate balance of skills and
experience.
Director recruitment
Zoe King has reached nine years of service as a Director and,
in accordance with the Company’s tenure policy, will be
retiring at the conclusion of the 2025 AGM. A search has
therefore taken place for a new non-executive Director.
Following a review of several specialist recruitment agencies,
Cornforth Consulting Limited was appointed to assist in the
search. No open advertising was used as the Committee
believes that targeted recruitment is the optimal way of
recruiting. Cornforth does not undertake any other services for
the Company and has no connection with any of the Directors.
The specification was for a candidate with a strong background
in investment management, as well as a demonstrable
understanding of UK listed company governance.
The Committee discussed the long list provided by Cornforth,
and thepreferred candidates were invited for interviews with
the Board. The candidates’ other commitments were
considered as part of the process.
Following the conclusion of the process, the Committee
recommended to the Board the appointment of Preeti Rathi
as a non-executive Director.
Preetiwas appointed with effect from 31 December 2024
andis deemed to be independent of the Manager.
Henderson High Income Trust plc Annual Report 2024
47
Directors’ Remuneration Report
Annual Report on remuneration
This report is submitted in accordance with Schedule 8 of
TheLarge and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 as amended
(“theRegulations”).
The report also meets the relevant requirements of the
Companies Act 2006 (“the Act”) and the UK Listing Rules
ofthe FCA and describes how the Board has applied the
principles relating to Directors’ remuneration.
As required by section 439 of the Act, an ordinary resolution
to approve the Directors’ Remuneration Policy was proposed
at the 2023 AGM and was subsequently approved by
shareholders.
The Company’s auditor is required to report on certain
information contained within this report: where information
setout below has been audited it is indicated as such.
All Directors are non-executive and the Company has no
chief executive officer or employees. As such 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 has established a Nominations and Remuneration
Committee with responsibility for determining the
Remuneration Policy and setting the individual remuneration
of all Directors in accordance with the Articles of
Association. Zoe King, the Senior Independent Director, is
Chairman of the Nominations and Remuneration Committee.
The Board has not been provided with advice or services
byany person in respect of its consideration of Directors’
remuneration (although the Directors review annually the
feespaid to the boards of directors of other comparable
investment companies).
Remuneration Policy
Shareholders last approved the Remuneration Policy at the
AGM in 2023. In accordance with section 439A of the Act,
shareholders will next be asked to approve the
Remuneration Policy at the 2026 AGM.
In determining the Remuneration Policy, the Board takes
intoaccount all factors which it deems necessary including
relevant legal and regulatory requirements and the provisions
and recommendations of the UK Code and the AIC Code.
The objective of the Remuneration Policy is to attract, retain
and motivate non-executive Directors of the quality required
to manage the Company successfully without paying more
than is necessary, having regard to the views of
shareholders and other stakeholders.
The Board obtains up-to-date information about
remuneration in other companies of comparable scale and
complexity in order to avoid and manage conflicts of interest
in determining remuneration levels. The appropriateness and
relevance of the Remuneration Policy is reviewed at least
annually, particularly in terms of whether it supports the
Company’s long-term sustainable success.
Directors are remunerated in the form of fees, payable
quarterly in arrears. In accordance with the Company’s
Articles of Association the aggregate remuneration of the
Directors may not exceed £250,000 per annum.
All Directors, including any new appointments to the Board,
are paid at the same rate, apart from the Chairman of the
Board, the Chairman of the Audit and Risk Committee and
theSenior Independent Director, whoare paid a higher fee
inrecognition of their additionalresponsibilities.
From time to time the Board may approve one-off payments
toDirectors for specific work undertaken in addition to their
regular responsibilities. Any feedback from shareholders
wouldbe taken into account when setting remuneration levels.
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 no compensation payable. No Director is
eligible to receive bonuses, pension benefits, share options
or other benefits and no long-term incentive schemes are
inplace.
Statement from the Chairman
Zoe King, Chairman of the Nominations and Remuneration
Committee, reports that the Committee carried out its
annual review of the fees being paid to the Directors and
aspart of this it reviewed the fees paid to other investment
companies in the AIC UK Equity Income Sector for
companies with total assets under management of between
£200 million and £700 million, the fees paid in other
investment company sectors and the other JanusHenderson
managed investment trusts. The Committee also considered
the changes in the retail prices index and the consumer
prices index since the last fee increase in July 2023.
Following consideration, it was agreed that an increase of
approximately 5.3% should be made with effect from 1 July
2024 to ensure that the Directors are properly remunerated
for their services to the Company and so that the Company
can remain competitive when seeking new directors.
TheBoard agreed that the Senior Independent Director
should be paid an additional fee with effect from 1 July 2024
to reflect the responsibility of the role.
The new rates are set out on the following page. The Board
is satisfied that the changes to the remuneration of the
Directors are compliant with the Directors’ Remuneration
Policy approved by shareholders atthe 2023 AGM.
Therewillbe no significant change in the way that the
Remuneration Policy will be implemented in the course
ofthenext financial year.
Henderson High Income Trust plc Annual Report 2024
48
Directors’ Remuneration Report (continued)
Directors’ remuneration (audited)
The total remuneration paid to the Directors who served during the years-ended 31 December 2024 and 31 December 2023 was
as follows:
Year-ended
31December
2024
Total fees
£
Year-ended
31December
2023
Total fees
£
Year-ended
31 December
2024
Expenses and
taxable benefits
£
Year-ended
31 December
2023
Expenses and
taxable benefits
£
Year-ended
31 December
2024
Total
£
Year-ended
31 December
2023
Total
£
Jeremy Rigg
(Chairman of the Board) 43,875 41,625 3,311 – 47,186 41,625
Jonathan Silver
(Chairman of the Audit
and Risk Committee) 35,100 33,300 – – 35,100 33,300
Zoe King (Senior
Independent Director) 30,750 27,750 – – 30,750 27,750
Richard Cranfield 29,250 27,750 689 – 29,939 27,750
FrancescaEcsery 29,250 27,824 190 – 29,440 27,824
Total 168,225 158,249 4,190 – 172,415 158,249
The table above omits other columns because no payments of other types such as performance related pay, vesting performance related pay and pension related
benefits were made. Taxable benefits – Directors are entitled to be reimbursed for reasonable expenses incurred by them in connection with the performance of their
duties and attendance at Board and General Meetings
No other remuneration or compensation was paid or payable by the Company during the year to any of the current or former
Directors or third parties specified by any of them.
Relative importance of spend on pay
In order to show the relative importance of expenditure on pay, the table below sets out the total level of remuneration compared
to the distributions to shareholders by way of dividends. There were no share buybacks during the year. 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.
2024
£
2023
£
2019
£
1 year
change
£
1 year
change
%
5 year
change
£
5 year
change
%
Total remuneration paid to Directors
1
168,225 158,249 146,662 9,976 6.3% 21,563 14.7%
Ordinary dividends paid during the year 17,049,382 13,369,017 12,538,137 3,680,365 27.5% 4,511,245 36.0%
1 Remuneration will fluctuate due to the number of directors in any one year
Directors’ interests in shares (audited)
Ordinary shares of 5p
31December 2024 1 January 2024
Beneficial
Jeremy Rigg 27,000 27,000
Jonathan Silver 30,000 30,000
Zoe King 9,000 9,000
Francesca Ecsery 6,655 3,481
Preeti Rathi
1
– n/a
Non-Beneficial
Richard Cranfield 40,000 30,000
1 Preeti Rathi was appointed to the Board on 31 December 2024
Since the Company’s year-end Francesca Ecsery purchased
107 shares in the Company bringing her total beneficial
holding to 6,762 shares. There have been no further changes
reported since the year end to the date of this Annual Report.
No Director is required to hold shares of the Company by way
of qualification.
Table of Directors’ annual fees
The current fees for specific responsibilities are set out in the
table below.
Rate from
1 July 2024
Rate from
1 July 2023
%
increase
Chairman of the Board £45,000 £42,750 5.3%
Chairman of the Audit &
Risk Committee £36,000 £34,200 5.3%
Senior Independent
Director
1
£33,000 n/a –
Directors £30,000 £28,500 5.3%
1 The Board agreed that the Senior Independent Director should be paid
anadditional fee with effect from 1 July 2024 to reflect the responsibility of
therole
Henderson High Income Trust plc Annual Report 2024
49
Directors’ Remuneration Report (continued)
Annual percentage change in Directors’ remuneration
The table below sets out the annual percentage change in Directors’ fees (excluding expenses paid) for the Directors for the last
five years in respect of each Director who has served for a minimum of two financial years.
Year to
31 December 2024
%
Year to
31 December 2023
%
Year to
31 December 2022
%
Year to
31 December 2021
%
Year to
31 December 2020
%
Jeremy Rigg
1
5.4 6.7 20.8 31.8 1.0
Jonathan Silver 5.4 6.7 5.1 1.0 7.6
Zoe King
2
10.8 6.7 5.1 1.0 1.0
Richard Cranfield
3
5.4 6.7 5.1 21.0 n/a
Francesca Ecsery
4
5.1 n/a n/a n/a n/a
1 Appointed Chairman of the Board on 24 May 2021. The increase in Mr Rigg’s remuneration reflects this appointment part way through the year to 31 December 2021
and the additional remuneration associated with this role. The year to 31 December 2022 was his first full year in this role
2 The increase in Mrs King’s remuneration reflects the additional fee that the Board agreed should be paid for the role of Senior Independent Director with effect from
1July 2024
3 Appointed to the Board on 1 March 2020
4 Appointed to the Board on 31 December 2022
Performance
The Company’s performance has been measured against the benchmark for the ten-year period ended 31 December 2024
onatotal return basis in sterling terms. The graph compares the mid-market price of the Company’s ordinary shares with the
benchmark over the same period, assuming a notional investment of £1,000 on 31 December 2014 and the reinvestment of
alldividends.
Benchmark
1
Share price total return
1000
1500
2000
(£)
2020 2022 202320182016 20212019201720152014 2024
1 The benchmark is a composite of 80% of the FTSE All-Share Index and 20% of the ICE BofA Sterling Non-Gilts Index
Source: Morningstar Direct
Statement of voting at AGM
At the Company’s last AGM held on 14 May 2024, shareholders approved the Directors’ Remuneration Report in respect of the year
ended 31 December 2023. Shareholders approved the Directors Remuneration Policy at the AGM held on 16 May 2023 (shareholder
approval of the policy is required every three years). The following proxy votes were received on the respective resolutions:
Resolution
For (including
discretionary)
% of total
votes
1
Against
% of total
votes
1
Withheld
To receive the Directors’ Remuneration Report 18,296,523 98.8 224,580 1.2 189,387
To approve the Directors’ Remuneration Policy 10,349,367 98.4 171,388 1.6 250,498
1 Excluding votes withheld
For and on behalf of the Board
Zoe King
Chairman of the Nominations and Remuneration Committee
26 March 2025
Henderson High Income Trust plc Annual Report 2024
50
The Directors present their report and the Company’s audited
financial statements for the year-ended 31 December 2024.
The Corporate Governance Report, committee reports and
additional information on pages 38 to 47 and 82 to 86, form
part of the Directors’ Report.
Share capital
The Company’s share capital comprises ordinary shares with
a nominal value of 5p. The voting rights of the shares on a poll
are one vote for every share held. There are no restrictions
concerning the transfer of securities in the Company, no
special rights with regard to control attached to securities,
noagreements between holders of securities regarding their
transfer known to 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
and capital of the Company (including accumulated revenue
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 the beginning of the year, there were 129,796,278 ordinary
shares in issue. On 17 January 2024 the Company issued
42,345,422 new shares at a price of 170.25p per share to
Henderson Diversified Income Trust plc (HDIV) shareholders
inconsideration for the £72.1 million of net assets acquired
from HDIV in accordance with the scheme of reconstruction
and winding up of HDIV under section 110 of the Insolvency
Act 1986. See note 23 on page 80 for further details.
During the year no further shares were issued or bought
back.Therefore, at 31 December 2024 the number of
ordinaryshares in issue with voting rights was 172,141,700.
Between 1 January 2025 and 24 March 2025, being the last
practicable date prior to the publication of this annual report,
960,130 shares were bought back and held in treasury.
Accordingly, thenumber of shares in issue as at 24 March
2025 was 172,141,700, of which 960,130 were held in treasury.
Therefore, the total voting rights in the Company at that date
was 171,181,570.
The Company will seek authority from its shareholders at
the2025 AGM to renew its authority to allot shares up to
10%of the issued share capital and to buy back shares up to
14.99% of its issued share capital, in each case excluding
treasury shares, as at the date of the 2025 AGM. Please refer
to the Notice ofMeeting that has been sent to shareholders
with this reportfor further details. It is also available at
www.hendersonhighincome.com.
Holdings in the Company’s shares
In accordance with the Disclosure Guidance and
Transparency Rules there were no declarations of interest
inthe voting rights of the Company in the year under review.
No changes have been notified in the period 1 January 2025
to the date of this report.
Related party transactions
The Company’s transactions with related parties in the year
were with the Directors and the Manager. There have been no
material transactions between the Company and its Directors
during the year. The only amounts paid to them were in
respect of remuneration for which there were nooutstanding
amounts payable at the year-end. Directors’ interests in
shares are disclosed in the Directors’ Remuneration Report
on page 49. In relation to the provision of services by the
Manager (other than fees payable by the Company in the
ordinary course of business and the provision of marketing
services) there have been no material transactions with the
Manager affecting the financial position or performance of the
Company during the year under review. More details on
Transactions with Janus Henderson and Related Parties,
including amounts outstanding at the year-end, are given in
Note 21 on page 80.
Future developments
While the future performance of the Company is mainly
dependent on the performance of financial markets which are
subject to various external factors, the Board’s intention is that
the Company will continue to pursue its stated investment
objective and policy. The Chairman’s Statement and Fund
Manager’s Report provide commentary on the outlook for
theCompany.
Annual General Meeting
The Annual General Meeting will be held on Tuesday,
13May2025 at 12 noon at 201 Bishopsgate, London
EC2M3AE. The Notice of Meeting and details of the
resolutions to be put to the AGM are contained in the separate
document being sent to shareholders with this Annual Report.
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 a cross reference table indicating where the information is
set out. The Directors confirm that there are no disclosures to
be made in this regard other than in accordance with UK
Listing Rule 6.6.1(6), the information of which is detailed in the
adjacent column under Share Capital.
Other information
Information on dividends and financial risks are detailed in the
Strategic Report.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
26 March 2025
Directors’ Report
Henderson High Income Trust plc Annual Report 2024
51
Statement of Directors’ Responsibilities in
Respect of the Financial Statements
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, comprising FRS 102
– The Financial Reporting Standard applicable in the UK and
Republic of Ireland, and applicable law).
Under company law, directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the company and of the profit
or loss of the company for that period. In preparing the
financial statements, the Directors are required to:
●
select suitable accounting policies and then apply them
consistently;
●
state whether applicable United Kingdom Accounting
Standards, comprising FRS 102 have been followed,
subject to any material departures disclosed and
explained in the financial statements;
●
make judgments and accounting estimates that are
reasonable and prudent; and
●
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business.
The Directors are responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are also 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 and
the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the Company’s financial statements published
onthe Company’s website. This responsibility is delegated
toJanus Henderson as Manager. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
Directors’ confirmations
Each of the Directors, whose names and functions are listed
on pages 36 to 37, confirm that, to the best of their
knowledge:
●
the Company’s financial statements, which have been
prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 102, give a true and fair view
of the assets, liabilities, financial position and profit of the
Company; and
●
the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Company, together with a description of
theprincipal risks and uncertainties that it faces.
On behalf of the Board
Jeremy Rigg
Chairman
26 March 2025
Henderson High Income Trust plc Annual Report 2024
52
Financial
Statements
53
Report on the audit of the financial statements
Opinion
In our opinion, Henderson High Income Trust plc’s financial statements:
●
give a true and fair view of the state of the Company’s affairs as at 31 December 2024 and of its return and cash flows for the
year then ended;
●
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”,
and applicable law); and
●
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report 2024 (the “Annual Report”), which comprise: the
Statement of Financial Position as at 31 December 2024; the Income Statement, the Statement of Changes in Equity, the
Statement of Cash Flows for the year then ended; and the notes to the financial statements, which include a description of the
significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Ourresponsibilities under ISAs (UK) are further described in the Auditors’ 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
abasis for our opinion.
Independence
We remained independent of the Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and
wehave fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
notprovided.
We have provided no non-audit services to the Company in the period under audit.
Our audit approach
Overview
Audit scope
●
The Company is a standalone Investment Trust Company and engages Janus Henderson Fund Management UK Limited (the
“Manager”) to manage its assets.
●
We conducted our audit of the financial statements using information from BNP Paribas (the “Administrator”) to whom the
Directors have delegated the provision of all administrative functions.
●
We tailored the scope of our audit taking into account the types of investments within the Company, the involvement of the
third parties referred to above, the accounting processes and controls, and the industry in which the Company operates.
●
We obtained an understanding of the control environment in place at the Manager and Administrator and adopted a fully
substantive testing approach using reports obtained from the Manager and Administrator.
Key audit matters
●
Valuation and existence of investments.
●
Accuracy, occurrence and completeness of income from investments.
●
Ability to continue as a going concern (Continuation Vote).
●
Accounting treatment applied on initial recognition of the acquisition of assets from Henderson
Diversified Income Trust plc.
Materiality
●
Overall materiality: £3,032,070 (2023: £2,223,420) based on 1% of Net Assets.
●
Performance materiality: £2,274,053 (2023: £1,667,565).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Independent Auditor’s Report to the Members
ofHenderson High Income Trust plc
54
Henderson High Income Trust plc Annual Report 2024
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, 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. These matters, and any comments we
make on the results of our procedures thereon, were 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 these matters.
This is not a complete list of all risks identified by our audit.
Ability to continue as a going concern (Continuation Vote) and Accounting treatment applied on initial recognition of the
acquisition of assets from Henderson Diversified Income Trust plc are new key audit matters this year. Otherwise, the key audit
matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Valuation and existence of investments
Refer to the Report of the Audit and Risk Committee,
Accounting Policies and the Notes to the Financial
Statements.
The investment portfolio at 31 December 2024
comprised equity investments of £326.9 million and
fixed interest instruments valued at £39.8 million
(£366.8 million in total).
We focused on the valuation and existence of
investments because investments represent the
principal element of the net asset value as disclosed
on the Statement of Financial Position within the
Financial Statements.
Our audit work on the valuation and existence of investments included the
following:
●
We tested the valuation of 100% of the equity investments and fixed
interest instruments by agreeing the prices used in the valuation to
independent third-party sources; and
●
We tested the existence of all investments, by agreeing investment
holdings at 31 December 2024 to an independent custodian
confirmation.
No material misstatements were identified from this testing.
Accuracy, occurrence and
completeness of income
frominvestments
Refer to the Report of the Audit and Risk Committee,
Accounting Policies and the Notes to the Financial
Statements.
We focused on the accuracy, completeness and
occurrence of dividend income and fixed interest
income recognition as incomplete or inaccurate
income could have a material impact on the
Company’s net asset value and dividend cover.
In addition, the Directors are required to exercise
judgement in determining whether income receivable
in the form of special dividends should be classified
as ‘revenue’ or ‘capital’ in the Statement of
Comprehensive Income.
We also focused on the accounting policy for income
recognition and its presentation in the Income
Statement as set out in the requirements of The
Association of Investment Companies Statement of
Recommended Practice (the ‘AIC SORP’) as
incorrect application could indicate a misstatement in
income recognition.
We understood and assessed the design and implementation of key
controls surrounding income recognition.
We performed the below audit procedures for a sample of dividends
recorded by the Company:
●
We tested the accuracy of dividend income by agreeing the dividend
rates from investments to independent third party sources;
●
We tested occurrence of dividend income, by testing that dividend
income recorded in the year had been declared in the market by
investment holdings and we traced a sample of dividends received to
bank statements; and
●
To test for completeness, we tested, for a sample of investment
holdings in the portfolio, that all dividends declared in the market for
these holdings had been recorded.
We have no matters to report as a result of this testing.
For fixed interest income recorded by the Company, we have tested a
sample of interest income for the year by obtaining the bond standing data
and completing the below;
●
We tested the accuracy of fixed-interest income by agreeing a sample
of coupon rates and maturity dates to third-party sources; and
●
We have recalculated the income received as well as tracing a sample
of receipts to bank statements.
We have no matters to report as a result of this testing.
We assessed the accounting policy for income recognition for compliance
with accounting standards and the AIC SORP and performed testing to
check that income had been accounted for in accordance with this stated
accounting policy. We have no matters to report as a result of this testing.
Independent Auditor’s Report to the Members
ofHenderson High Income Trust plc
(continued)
55
Henderson High Income Trust plc Annual Report 2024
Independent Auditor’s Report to the Members
ofHenderson High Income Trust plc
(continued)
Key audit matter How our audit addressed the key audit matter
Ability to continue as a going concern
(Continuation Vote)
Refer to the Going Concern section in the Directors’
Report and the Viability Statement in the Strategic
Report.
A Continuation Vote is due to take place at the 2025
Annual General Meeting, which, if passed, will allow
the Company to continue as an investment trust for a
further five years. The Directors have considered and
assessed the potential impact of the Continuation
Vote on the ability of the Company to continue as a
going concern.
The Directors have concluded, based on their
assessment and discussions with key investors, that
they have no reason to believe that the shareholders
will not vote for continuation. As such, they are
satisfied that the Company will be able to continue
itsoperations and meet its liabilities as they fall due
for a period of at least 12 months from the date of
approving the financial statements.
The procedures we performed and our conclusions on going concern are
included in the Conclusions relating to going concern section below.
Accounting treatment applied on initial
recognition of the acquisition of assets
from Henderson Diversified Income
Trust plc
Refer to the Strategic Report, Directors’ Report and
Notes to the financial statements.
There is an inherent risk due to the significant size
and one off nature of the merger with Henderson
Diversified Income Trust plc that the accounting on
initial recognition is not in compliance with FRS 102
or does not reflect the approved agreement between
the Company and Henderson Diversified Income
Trust plc.
We assessed the accounting treatment to confirm the appropriateness as
an acquisition of assets rather than a Business combination under section
19 of FRS 102.
We reviewed the supporting documents and relevant board approvals,
which included Board minutes, Circulars and Regulatory News Service
(RNS) announcements per the London Stock Exchange, for consistency
with the disclosures in the financial statements.
We verified the accuracy of the number of shares expected to have been
issued based on the agreed upon method per the circular and ‘Companies
Act s593 report’.
We tested a sample of purchases of investments made as part of the
transfer of assets to agree the existence of shares held at the transfer
date and to confirm the price paid on the transfer date to verify the
relevant book cost.
We tested a sample of costs incurred (where material) as part of the transfer
of assets to assess accounting treatment as at year end.
Based on the audit procedures performed and evidence obtained, we
concluded that the acquisition of assets from Henderson Diversified
Income Trust plc has been appropriately accounted for.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the
industry in which it operates.
The Company’s accounting is delegated to the Administrator who maintains the Company’s accounting records and who has
implemented controls over those accounting records. We obtained our audit evidence from substantive tests. However, as part of our
risk assessment, we understood and assessed the internal controls in place at both the Manager and the Administrator to the extent
relevant to our audit. This assessment of the operating and accounting structure in place at both organisations involved obtaining and
analysing the relevant controls reports issued by the independent service auditor of the Manager and the Administrator in accordance
56
Henderson High Income Trust plc Annual Report 2024
Independent Auditor’s Report to the Members
ofHenderson High Income Trust plc
(continued)
with generally accepted assurance standards for such work. Following this assessment, we applied professional judgement to
determine the extent of testing required over each balance in the financial statements.
The impact of climate risk on our audit
As part of our audit, we made enquiries of management to understand the extent of the potential impact of climate risk on the
Company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of
climate risk. Our procedures did not identify any material impact as a result of climate risk on the Company’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Company materiality £3,032,070 (2023: £2,223,420).
How we determined it 1% of Net Assets.
Rationale for benchmark applied We believe that net assets is the primary measure used by the
shareholders in assessing the performance of the entity, and is a
generally accepted auditing benchmark. This benchmark provides an
appropriate and consistent year on year basis.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
ouraudit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to £2,274,053
(2023:£1,667,565) for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range
wasappropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above
£152,000 (2023: £111,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included:
●
evaluating the Directors’ updated risk assessment and considering whether it addressed relevant threats including the wider
macroeconomic uncertainty;
●
evaluating the Directors’ assessment of potential operational impacts, considering their consistency with other available
information and our understanding of the business and assessed the potential impact on the financial statements;
●
reviewing the Directors’ assessment of the Company’s financial position in the context of its ability to meet future expected
operating expenses and debt repayments, their assessment of liquidity as well as their review of the operational resilience of
the Company and oversight of key third-party service providers; and
●
reviewing the Directors’ assessment of going concern in relation to the passing of the continuation vote, including assessing
the stability of the shareholder register, engagement with key shareholders with regards to shareholders voting intentions, the
financial performance of the Company compared to its benchmark and the result of previous continuation votes.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Company’s
ability to continue as a going concern.
57
Henderson High Income Trust plc Annual Report 2024
Independent Auditor’s Report to the Members
ofHenderson High Income Trust plc
(continued)
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in
this report, any form of assurance thereon.
In connection with our audit of the financial statements, 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 audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. 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 based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report 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
Directors’ Report for the year ended 31 December 2024 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic Report and 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.
Corporate Governance Statement
The Listing Rules require us to review the Directors’ statements 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. Our additional responsibilities with respect to the corporate governance statement as other
information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement, included within the Corporate Governance Report is materially consistent with the financial statements
and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:
●
The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
●
The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
●
The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the Company’s ability to
continue to do so over a period of at least twelve months from the date of approval of the financial statements;
●
The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why
the period is appropriate; and
58
Henderson High Income Trust plc Annual Report 2024
●
The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Company was substantially less in scope than an
audit and only consisted of making inquiries and considering the Directors’ process supporting their statement; checking that
the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the financial statements and our knowledge and understanding of the Company and its environment
obtained in the course of the audit.
In addition, 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 and our knowledge obtained during the audit:
●
The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable,
andprovides the information necessary for the members to assess the Company’s position, performance, business model
and strategy;
●
The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems;and
●
The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the
financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.
TheDirectors are also responsible for such internal control as they 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.
Auditors’ 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 auditors’ report that includes our opinion. Reasonable assurance
isa 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
inthe aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
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.
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and
regulations related to breaches of section 1158 of the Corporation Tax Act 2010, and we considered the extent to which non-
compliance might have a material effect on the financial statements. We also considered those laws and regulations that have
adirect impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined
that the principal risks were related to posting of inappropriate journal entries to increase income or to overstate the value of
investments and increase the net asset value of the Company. Audit procedures performed by the engagement team included:
●
discussions with the Directors, the Manager and the Administrator, including consideration of known or suspected instances
of non-compliance with laws and regulation and fraud where applicable;
●
reviewing relevant meeting minutes, including those of the Audit and Risk Committee and the Board of Directors;
●
assessing of the Company’s compliance with the requirements of section 1158 of the Corporation Tax Act 2010, including
recalculation of numerical aspects of the eligibility conditions; and
Independent Auditor’s Report to the Members
ofHenderson High Income Trust plc
(continued)
59
Henderson High Income Trust plc Annual Report 2024
●
identifying and testing year-end journal entries, in particular any material manual journal entries posted during the preparation
of the financial statements.
●
designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.
●
reviewing relevant meeting minutes, including those of the Audit and Risk Committee.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 Exception Reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
●
we have not obtained all the information and explanations we require for our audit; or
●
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received
from branches not visited by us; or
●
certain disclosures of Directors’ remuneration specified by law are not made; 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.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the Directors on 14 December 2016 to
audit the financial statements for the year ended 31 December 2016 and subsequent financial periods. The period of total
uninterrupted engagement is nine years, covering the years ended 31 December 2016 to 31 December 2024.
Jennifer March (Senior Statutory Auditor)
For and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
26 March 2025
Independent Auditor’s Report to the Members
ofHenderson High Income Trust plc
(continued)
60
Henderson High Income Trust plc Annual Report 2024
Income Statement
Year-ended 31December 2024 Year-ended 31December 2023
Notes
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
2 Gains on investments held at fair
value through profit or loss – 11,155 11,155 – 10,620 10,620
3 Income from investments held at
fair value through profit or loss 20,513 – 20,513 14,859 – 14,859
4 Other interest receivable and
similar income 313 – 313 538 – 538
Gross revenue and capital gains 20,826 11,155 31,981 15,397 10,620 26,017
5 Management fee (666) (999) (1,665) (565) (846) (1,411)
6 Other administrative expenses (618) – (618) (456) – (456)
Net return before finance costs
and taxation 19,542 10,156 29,698 14,376 9,774 24,150
7 Finance costs (903) (2,709) (3,612) (646) (1,938) (2,584)
Net return before taxation 18,639 7,447 26,086 13,730 7,836 21,566
8 Taxation on net return (338) 229 (109) (247) 101 (146)
Net return after taxation 18,301 7,676 25,977 13,483 7,937 21,420
9 Return per ordinary share 10.74p 4.50p 15.24p 10.39p 6.11p 16.50p
The total columns of this statement represent the Income Statement of the Company.
All capital and revenue items derive from continuing operations. Although no operations were acquired or discontinued during
the period, see note 23 for further details on the HDIV transaction.
The Company has no other comprehensive income other than those items recognised in the Income Statement.
The notes on pages 65 to 80 form part of these financial statements
61
Henderson High Income Trust plc Annual Report 2024
Statement of Changes in Equity
Notes Year-ended 31December 2024
Called up
share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other
capital
reserves
£’000
Revenue
reserve
£’000
Total
£’000
At 1 January 2024 6,490 128,827 26,302 51,807 8,916 222,342
Net return after taxation – – – 7,676 18,301 25,977
10 Dividends paid – – – – (17,031) (17,031)
16, 17 Issue of shares on the HDIV transaction 2,117 69,949 – – – 72,066
17 Issue costs of HDIV transaction – (3) – – – (3)
17 Listing fees in respect of the new shares issued
following the HDIV transaction – (144) – – – (144)
At 31 December 2024 8,607 198,629 26,302 59,483 10,186 303,207
Notes Year-ended 31December 2023
Called up
share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other
capital
reserves
£’000
Revenue
reserve
£’000
Total
£’000
At 1 January 2023 6,490 128,827 26,302 43,870 8,788 214,277
Net return after taxation – – – 7,937 13,483 21,420
10 Dividends paid – – – – (13,355) (13,355)
At 31 December 2023 6,490 128,827 26,302 51,807 8,916 222,342
The notes on pages 65 to 80 form part of these financial statements
62
Henderson High Income Trust plc Annual Report 2024
Statement of Financial Position
Notes
At 31December 2024
£’000
At 31December 2023
£’000
Fixed assets
11 Investments held at fair value through profit or loss 366,790 270,007
Current assets
12 Debtors 2,323 2,092
Cash at bank and in hand 2,493 1,990
4,816 4,082
13 Creditors: amounts falling due within one year (48,520) (31,880)
Net current liabilities (43,704) (27,798)
Total assets less current liabilities 323,086 242,209
14 Creditors: amounts falling due after more than one year (19,879) (19,867)
Net assets 303,207 222,342
Capital and reserves
16 Called up share capital 8,607 6,490
17 Share premium account 198,629 128,827
17 Capital redemption reserve 26,302 26,302
17 Other capital reserves 59,483 51,807
17 Revenue reserve 10,186 8,916
Total shareholders’ funds 303,207 222,342
18 Net asset value per ordinary share 176.14p 171.30p
The financial statements and corresponding notes on pages 61 to 80 were approved by the Board on 26 March 2025 and signed on
its behalf by:
Jeremy Rigg
Chairman
The notes on pages 65 to 80 form part of these financial statements
63
Henderson High Income Trust plc Annual Report 2024
Statement of Cash Flows
Year-ended
31December 2024
£’000
Year-ended
31December 2023
£’000
Cash flows from operating activities
Net return before taxation 26,086 21,566
Add back: finance costs 3,612 2,584
Less gains on investments held at fair value through profit or loss (11,155) (10,620)
Withholding tax on dividends deducted at source (109) (146)
Increase in debtors (231) (164)
Decrease in creditors (282) (337)
Net cash inflow from operating activities
1
17,921 12,883
Cash flows from investing activities
Sales of investments held at fair value through profit or loss 101,287 66,925
Purchases of investments held at fair value through profit or loss (147,956) (67,282)
Net cash outflow from investing activities (46,669) (357)
Cash flows from financing activities
Net cash acquired and received following the HDIV transaction 32,586 –
Listing fees in respect of the new shares issued following the HDIV transaction (144) –
Issue costs in respect of the HDIV transaction (3) –
Equity dividends paid (17,031) (13,355)
Drawdown of loans 17,932 1,649
Interest paid (3,600) (2,575)
Net cash inflow/(outflow) from financing activities 29,740 (14,281)
Net increase/(decrease) in cash and cash equivalents 992 (1,755)
Cash and cash equivalents at beginning of year 1,990 2,873
Exchange movements (489) 872
Cash and cash equivalents at end of year 2,493 1,990
Comprising:
Cash at bank 2,493 1,990
1 Cash inflow from dividends was £18,236,000 (2023: £13,528,000) and cash inflow from interest was £1,904,000 (2023: £1,395,000)
The notes on pages 65 to 80 form part of these financial statements
64
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements
1 Accounting policies
a) Basis of accounting
The Company is an investment company as defined in section 833 of the Companies Act 2006 and is incorporated in the
UK. It operates in England andWales and is registered at 201 Bishopsgate, London EC2M 3AE. 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 AIC Statement of Recommended Practice: Financial Statements of
Investment Trust Companies and Venture Capital Trusts (SORP).
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 at 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) Significant judgments and estimates
The decision to allocate special dividends as income or capital is a judgment but not deemed to be material. The allocation
ofexpenses as income or capital is not material but has an impact on distributable reserves. The Directors do not consider
these to be significant judgments or estimates and do not believe any accounting judgments or estimates have been
applied to this set of financial statements that have a significant risk of causing a material adjustment to the carrying
amount of assets and liabilities within the next financial year. The Directors have considered the substance of the
combination with HDIV in determining whether this represents the acquisition of a business. In this case the combination is
not judged to be an acquisition of a business, and therefore has not been treated as a business combination in accounting
terms. Investments and cash were transferred from HDIV in exchange for shares issued by the Company, which have been
recognised in share capital and share premium, as shown in the Statement of Changes in Equity. Further detail is set out in
note 23.
c) Going concern
The Directors have considered the liquidity of the portfolio and concluded that the assets of the Company consist of
securities that are readily realisable. They have also considered the impact of the risks associated with interest rates and its
impact on the broader financial system, as well as the risks arising from the wider ramifications of geopolitical conflicts,
including cash flow forecasting, a review of covenant compliance including the headroom above the most restrictive
covenants and an assessment of the liquidity of the portfolio. They have concluded that the Company is able to meet its
financial obligations, including the repayment of the bank loan, as they fall due for a period to 26 March 2026, which is at
least 12 months from the date of the approval of the financial statements.
The Company’s shareholders are asked every five years to vote on the continuation of the Company. An ordinary resolution
to this effect will be put to shareholders at the AGM in 2025 and the Board has no reason to believe that this resolution will
not be passed. Having assessed these factors, the principal risks and other matters discussed in connection with the
viability statement, the Board has determined that it is it appropriate to adopt the going concern basis of accounting in
preparing the financial statements.
d) Valuation of investments
The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income
and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in
accordance with a documented investment strategy, and information about the portfolio is provided internally on that basis
to the Company’s Directors. Accordingly, upon initial recognition the investments are included initially at fair value, which is
taken to be their cost. Subsequently, the investments are valued at fair value, which is deemed to be the bid market prices
or the last traded price as at close of business on the last business day of the accounting period depending on the
convention of the exchange on which the investment is quoted.
All fair value movements in investments are taken to the Income Statement. In accordance with the SORP, the Company’s
profit and loss account is split between revenue and capital returns columns as can be seen in the Income Statement.
Fairvalue movements on investments are taken to the capital column in the Income Statement.
65
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
1 Accounting policies (continued)
e) Capital gains and losses
Profits or losses on disposal on investments and investment holding gains and losses are taken to the capital column in the
Income Statement and transferred to other capital reserves.
The Company’s capital reserves arising on investments sold and revenue reserve may be distributed by way of a dividend.
The portion of the capital reserve arising on investments held is wholly non-distributable. There may be factors that restrict
the value of reserves that can be distributed and these factors may be complex to determine. Amounts fully distributable
may therefore not be the total of the revenue and the portion of capital reserve arising on investments sold.
f) Income
Dividends receivable on equity shares are taken to the revenue return of the Income Statement on an ex-dividend basis
except where, in the opinion of the Directors, based on the facts and circumstances the dividend is capital in nature in
which case it is taken to the capital return. Income from fixed interest debt securities and preference shares with no fixed
maturity date is recognised on a time-apportioned basis. Income from other fixed interest securities is recognised so as to
reflect the effective interest rate on these securities.
g) Expenses
All expenses and finance costs are accounted for on an accruals basis. The Board’s expectation is that over the long term
three quarters of the Company’s investment returns will be in the form of capital gains. The Directors have determined that
the proportion of the annual management fees that relates to the maintenance or enhancement of the valuation of
investments is 80%. On this basis, the Company charges to capital 60% of total management fees (i.e. 75% of 80%) and
75% of its finance costs. The balance of the management fees is charged to revenue. Expenses which are incidental to
theacquisition of an investment are charged to the Income Statement and included within gains/losses on investments.
Expenses which are incidental to the disposal of an investment are deducted from sale proceeds and go to the Income
Statement indirectly.
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 tax rate of corporation tax for the accounting period.
The tax effect of different items of expenditure is allocated between the capital return and revenue return using the
Company’s applicable rate of tax for the year. In line with the recommendations of the SORP, the allocation method used to
calculate tax relief on expenses presented against capital returns on the Income Statement is the ‘marginal basis’. Under
this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue 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 been reversed by the Statement of
Financial Position date, other than those differences regarded as permanent. Timing differences arise from the inclusion of
items of income and expenditure in taxation computations in periods different from those in which they are included in the
financial statements. Any liability to deferred tax is provided at the average rate of tax expected to apply. Deferred tax
assets and liabilities are not discounted to reflect the time value of money. The carrying amount of deferred tax assets is
reviewed at each Statement of Financial Position date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.
i) 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 the Company is listed in the UK with a predominantly
UK shareholder base.
Transactions denominated in overseas currencies during the year are translated into sterling at the appropriate daily
exchange rate.
Assets and liabilities denominated in overseas currencies at the Statement of Financial Position date are translated into
sterling at the exchange rate ruling at that date. Differences arising from translation at this rate of exchange are included
within the Income Statement as a capital item and then transferred to capital reserves.
66
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
1 Accounting policies (continued)
j) Borrowings
Interest-bearing bank loans, overdrafts and the senior unsecured note are recorded as proceeds received, net of direct
issue costs.
They are subsequently measured at amortised cost. Finance costs, including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals basis in the Income Statement, using the effective
interest 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.
k) Derivative financial instruments
The Company does not use derivative financial instruments for speculative purposes.
Derivative transactions which the Company may enter into comprise forward exchange contracts (the purpose of which is
to hedge foreign currency exposure) and futures contracts on indices appropriate to sections of the portfolio (one purpose
for which may be to provide protection against falls in the capital values of the holdings). The Company may also write
options on shares represented in the portfolio where such options are priced attractively relative to Janus Henderson’s
expectations for the relevant share prices and to generate additional return for shareholders. The use of financial derivatives
is governed by the Company’s policies as approved by the Board.
Changes in the fair value of derivative financial instruments are recognised in the Income Statement as they arise. If based
on circumstances and motive they are capital in nature, the associated change in value is presented as a capital item in the
Income Statement.
Where options are written for the purpose of generating revenue, applicable premiums are recognised evenly over the life
of the option and shown in the revenue return, with the appropriate amount shown as a capital return such that the total
return reflects the overall change in the fair value of the option.
l) Dividends payable to shareholders
Interim dividends payable to shareholders are recognised in the financial statements when they are paid. The Company
does not pay a final dividend.
Details of dividends provided are in the Statement of Changes in Equity on page 62 and Note 10 on pages 70 to 71.
m) Capital and reserves
Share capital represents the nominal value of 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 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
●
gains and losses on disposals of investments;
●
realised foreign exchange differences of a capital nature;
●
cost of repurchasing ordinary share capital; and
●
other capital charges and credits charged to this account in accordance with the above policies.
Capital reserve arising on investments held
●
increases and decreases in the valuation of investments held at the year end; and
●
unrealised foreign exchange differences of a capital nature.
n) Distributable reserves
The Company’s capital reserve arising on investments sold and revenue reserve may be distributed by way of a dividend.
The portion of the capital reserve arising on investments held is wholly non-distributable. There may be factors that restrict
the value of reserves that can be distributed and these factors may be complex to determine. Amounts fully distributable
may therefore not be the total of the revenue reserve and the portion of capital reserve arising on investments sold.
67
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
2 Gains on investments held at fair value through profit or loss
2024
£’000
2023
£’000
Gains on the sale of investments based on historical cost 5,815 4,360
Revaluation gains recognised in previous years (2,211) (2,523)
Gains on investments sold in the year based on carrying value at previous Statement
of Financial Position date 3,604 1,837
Net movement on revaluation of investments 7,046 7,722
Effective yield movement (16) 38
Exchange gains 521 1,023
11,155 10,620
3 Income from investments held at fair value through profit or loss
2024
£’000
2023
£’000
UK dividend income – listed 14,946 10,612
UK dividend income – special dividends 189 119
15,135 10,731
Interest income – listed 2,058 1,328
Overseas and other dividend income – listed 3,162 2,678
Overseas and other dividend income – special dividends 158 122
5,378 4,128
20,513 14,859
4 Other interest receivable and similar income
2024
£’000
2023
£’000
Deposit interest 96 84
Traded option premiums 202 454
Underwriting commission 15 –
313 538
5 Management fee
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Management fee 666 999 1,665 565 846 1,411
A summary of the terms of the Investment Management Agreement is on page 26. An explanation of the split between
revenue and capital is contained in Note 1g on page 66.
68
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
6 Other administrative expenses
2024
£’000
2023
£’000
Directors’ fees (please refer to the Directors’ Remuneration Report on page 49) 168 158
Auditor’s remuneration – for audit services (excluding VAT) 54 45
Depositary fees 33 23
Registrar fees 23 22
Sales and marketing expenses payable to the Manager 114 44
Listing fees 39 35
Printing and postage fees 22 24
Legal and professional fees 96 46
AIC subscriptions 19 17
Other expenses 50 42
618 456
7 Finance costs
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Interest on bank loans repayable within one year 717 2,150 2,867 461 1,383 1,844
Interest on senior unsecured note 186 559 745 185 555 740
903 2,709 3,612 646 1,938 2,584
8 Taxation on net return
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Overseas withholding tax 109 – 109 146 – 146
Tax relief on management expenses allocated to capital 229 (229) – 101 (101) –
Total current tax charge for the year 338 (229) 109 247 (101) 146
a) Factors affecting tax charge for the year
The UK corporation tax rate is 25% (2023 – effective rate 23.5%). The tax charge for the year is lower than the corporation
tax rate. The differences are explained below:
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Net revenue before taxation 18,639 7,447 26,086 13,730 7,836 21,566
Corporation tax of 25% (2023: 23.5%) 4,660 1,862 6,522 3,227 1,841 5,068
Effects of:
– UK dividends (3,733) – (3,733) (2,500) – (2,500)
– Non–taxable overseas dividends (698) – (698) (554) – (554)
– Utilised excess management expenses (229) 927 698 (173) 654 481
– Tax relief on management expenses allocated to capital 229 (229) – 101 (101) –
– Irrecoverable overseas withholding tax 109 – 109 146 – 146
– Gains on investments held at fair value – (2,789) (2,789) – (2,495) (2,495)
Total current tax charge for the year 338 (229) 109 247 (101) 146
The Company is an investment trust and therefore its capital gains are not taxable.
69
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
8 Taxation on net return (continued)
b) Factors that may affect future tax charges
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 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 “Utilised excess management expenses” in the table above. 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 has not recognised a deferred tax asset totalling £6,816,000 (2023: £6,118,000) based on
aprospective tax rate of 25% (2023: 25%) arising as a result of having unutilised management expenses and unutilised
non-trade loan relationship deficits. These expenses will only be utilised, to any material extent if changes are made either
to the tax treatment of the capital gains made by investment trusts or to the Company’s investment profile which require
them to be used.
9 Profit for the year
Profit attributable per ordinary share figure is based on the return attributable to the ordinary shares of £25,977,000
(2023:£21,420,000) and on the 170,406,232 weighted average number of ordinary shares in issue during the year
(2023:129,796,278).
The Company had no securities in issue that could dilute the return per ordinary share. The return per ordinary share can
be analysed between revenue and capital as shown below:
2024
£’000
2023
£’000
Net revenue return 18,301 13,483
Net capital return 7,676 7,937
Profit for the year 25,977 21,420
Weighted average number of ordinary shares 170,406,232 129,796,278
Revenue return per ordinary share 10.74p 10.39p
Capital return per ordinary share 4.50p 6.11p
Profit attributable per ordinary share 15.24p 16.50p
10 Dividends paid on ordinary shares
Payment date
2024
£’000
2023
£’000
Fourth interim dividend (2.575p per share) for the year ended 31 December 2022 27 January 2023 – 3,342
First interim dividend (2.575p per share) for the year ended 31 December 2023 28 April 2023 – 3,342
Second interim dividend (2.575p per share) for the year ended 31 December 2023 28 July 2023 – 3,342
Third interim dividend (2.575p per share) for the year ended 31 December 2023 27 October 2023 – 3,342
Fourth interim dividend (2.625p per share) for the year ended 31 December 2023 26 January 2024 3,407 –
First interim dividend (2.625p per share) for the year ended 31 December 2024 26 April 2024 4,519 –
Second interim dividend (2.625p per share) for the year ended 31 December 2024 26 July 2024 4,519 –
Third interim dividend (2.675p per share) for the year ended 31 December 2024 25 October 2024 4,605 –
Unclaimed dividends (19) (13)
17,031 13,355
70
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
10 Dividends paid on ordinary shares (continued)
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, which sets out the maximum income that an investment trust can retain in any financial year,
areset out below:
2024
£’000
2023
£’000
Revenue available for distribution by way of dividend for the year 18,301 13,483
First interim dividend of 2.625p (2023: 2.575p) (4,519) (3,342)
Second interim dividend of 2.625p (2023: 2.575p) (4,519) (3,342)
Third interim dividend of 2.675p (2023: 2.575p) (4,605) (3,342)
Fourth interim dividend 2.675p (2023: 2.625p) (4,605) (3,407)
Transfer to revenue reserve 53 50
In accordance with FRS 102, interim dividends payable to equity shareholders are recognised in the Statement of Changes
in Equity when they have been paid to shareholders. All dividends have been paid out of revenue reserves or current year
revenue profits and at no point during the year did the revenue reserve move to a negative position.
11 Investments held at fair value through profit or loss
2024
£’000
2023
£’000
Valuation at 1 January 270,007 260,053
Investment holding gains at 1 January (30,933) (25,734)
Cost at 1 January 239,074 234,319
Purchases at cost 147,956 67,282
Assets acquired in relation to the HDIV transaction 39,480 –
Sales at cost (95,488) (62,527)
Cost at 31 December 331,022 239,074
Investment holding gains at 31 December 35,768 30,933
Valuation of investments at 31 December 366,790 270,007
Total transaction costs amounted to £677,000 (2023: £257,000) of which purchase transaction costs for the year-ended
31December 2024 were £654,000 (2023: £238,000). Sale transaction costs for the year-ended 31 December 2024 were
£23,000 (2023: £19,000). These comprise mainly stamp duty (purchases only) and commissions. The increased level of
transaction costs was due to the transaction with HDIV and the investment of the £72.1 million of net assets acquired from
HDIV in accordance with the scheme of reconstruction and winding up of HDIV under section 110 of the Insolvency Act
1986. See note 23 on page 80 for further details.
The Company received £101,288,000 (2023: £66,925,000) from investments sold in the year. The book cost of these
investments when they were purchased was £95,488,000 (2023: £62,527,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
12 Debtors
2024
£’000
2023
£’000
Taxation recoverable 532 565
Prepayments and accrued income 1,791 1,527
2,323 2,092
71
Henderson High Income Trust plc Annual Report 2024
13 Creditors: amounts falling due within one year
2024
£’000
2023
£’000
Bank loans 47,561 30,639
Accruals and deferred income 959 1,241
48,520 31,880
As at 31 December 2024 the Company had short term multi-currency loans under the BNP Paribas, London Branch loan
facility amounting to £47,561,000, repayable in January and February 2025 (2023: £30,639,000, repayable January and
February 2024).
The average interest rate payable on these loans was 4.91% (2023: 5.61%). Please refer to the Financial Calendar on page
86 for the senior unsecured note interest payment dates.
14 Creditors: amounts falling due after more than one year
2024
£’000
2023
£’000
Senior unsecured note 19,879 19,867
19,879 19,867
On 8 July 2015 the Company issued £20 million (nominal) 3.67% senior unsecured note due 2034, net of issue costs
totalling £204,000. The issue costs will be amortised over the life of the senior unsecured note by way of an effective
interest rate method. The fair value methodology of the senior unsecured note is detailed in note 15.4 on page 76. See the
Financial Calendar on page 86 for the senior unsecured note interest payment dates.
15 Financial risk management policies and procedures
As an investment trust, the Company invests in equities and other investments for the long-term so as to secure its
investment objective and policy (see page 23). In pursuing its investment objective and policy, the Company is exposed to
avariety of financial risks that could result in either a reduction in the Company’s net assets or a reduction in the profits
available for distribution by way of dividends.
These financial risks are: market risk (comprising market price risk, currency risk and interest rate risk), credit risk, liquidity
risk and gearing. Details of these risks and the Directors’ approach to the management of these risks are set out below and
have not changed from the previous accounting year. The Board receives regular financial and other reporting to enable it
to measure these risks. The Board and Janus Henderson co-ordinate the Company’s risk management and there are
various risk management systems in place as detailed below.
●
Listed securities, exchange-traded derivatives and over the counter (OTC) derivatives contracts are processed,
confirmed and reconciled using automated systems linked to counterparties and clearing houses;
●
Portfolio modelling and investment management functions (including order-raising, dealing and trade execution) are
performed using one of, or a combination of, third-party software applications; and
●
Fund pricing and accounting services are outsourced to a third-party administrator (currently BNP Paribas).
Janus Henderson Risk, Compliance and Operations Teams have access to and use a variety of in-house and third party
databases and applications for independent monitoring and risk measurement and compliance purposes.
15.1 Market risk
The fair value of a financial instrument held by the Company may fluctuate due to changes in market prices. This market
risk comprises currency risk (see note 15.1.1), interest rate risk (see note 15.1.2) and other price risk (see note 15.1.3), in
particular the risk of fluctuations in prices of securities. The Board reviews and agrees policies for managing these risks
and agrees investment guidelines and restrictions for managing the portfolio; these have remained substantially unchanged
from those applying in the previous year. The Fund Manager assesses the exposure to market risk when making each
investment decision, and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing
basis. This risk is mitigated through diversification of investments in the portfolio.
Notes to the Financial Statements (continued)
72
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Financial risk management policies and procedures (continued)
15.1.1 Currency risk
A proportion of the Company’s assets and income is denominated in currencies other than sterling (the Company’s
functional currency and the one in which it reports its results). Therefore, movements in exchange rates may affect the
sterling value of these items. This may be partially offset by borrowing in foreign currencies. The Board regularly reviews
currency risk.
Foreign currency exposure
The fair values of the Company’s monetary items that have foreign currency exposure as at 31 December 2024 and 2023
are shown below. Where the Company’s investments which are not monetary items are denominated in a foreign currency,
they have been included separately in the analysis so as to show the overall level of exposure.
2024
EUR
£’000
US$
£’000
SEK
£’000
Cash and cash equivalents 69 50 –
Bank loans (15,160) (8,161) –
Total foreign currency exposure on net monetary items (15,091) (8,111) –
Investments at fair value through profit or loss that are equities 28,427 15,639 4,316
Total net foreign currency exposures 13,336 7,528 4,316
2023
EUR
£’000
US$
£’000
SEK
£’000
Cash and cash equivalents 50 13 –
Bank loans (11,412) (9,727) –
Total foreign currency exposure on net monetary items (11,362) (9,714) –
Investments at fair value through profit or loss that are equities 23,012 19,408 –
Total net foreign currency exposures 11,650 9,694 –
The above amounts are not necessarily representative of the exposure to risk during the year as levels of monetary foreign
currency exposure may have changed significantly throughout the year.
If sterling depreciates against the currencies shown by 10%, the impact on the total return and net assets would be
£3,378,000 (2023: £2,844,000). If sterling appreciates against the currencies shown by 10%, the impact on the total return
and net assets would be (£2,764,000) (2023: (£2,327,000)).
15.1.2 Interest rate risk
Interest rate movements may affect:
●
the fair value of investments on fixed interest securities;
●
the level of income receivable from interest-bearing securities and cash at bank and on deposit; and
●
the interest payable on the Company’s variable rate borrowings.
Management of the risk
The possible effects of 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 multi-currency loan facility. The Company generally
does not hold significant cash balances; short term borrowings are used when required. The Company finances part of its
activities through borrowings at levels approved by the Board. Derivative contracts may sometimes be used to hedge
against the exposure to interest rate risk.
Interest rate exposure
The exposure at 31 December 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 re-set; and
●
fixed interest rates: when the financial instrument is due for repayment.
See the Financial Calendar on page 86 for the senior unsecured note interest repayment dates.
73
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Financial risk management policies and procedures (continued)
15.1.2 Interest rate risk (continued)
2024 2023
Within
one year
£’000
More than
one year
£’000
Total
£’000
Within
one year
£’000
More than
one year
£’000
Total
£’000
Exposure to floating interest rates:
Cash at bank 2,493 – 2,493 1,990 – 1,990
Creditors – within one year:
Borrowings under multi-currency loan facility (47,715) – (47,715) (30,771) – (30,771)
(45,222) – (45,222) (28,781) – (28,781)
Exposure to fixed interest rates:
Investments held at fair value through profit or loss 5,400 34,451 39,851 4,904 28,310 33,214
Creditors – more than one year:
Senior unsecured note
1
(745) (26,595) (27,340) (740) (27,334) (28,074)
Total exposure to interest rates (40,567) 7,856 (32,711) (24,617) 976 (23,641)
1 The above figures show interest payable over the remaining term of the senior unsecured note. The figures in the ‘more than one year’ column also include
the capital to be repaid
Interest receivable and finance costs are at the following rates:
●
interest received on cash balances, or paid on bank overdrafts, is at a margin linked to SONIA or its foreign currency
equivalent (2023: same);
●
interest paid on borrowings under the multi-currency loan facility is at a margin over SONIA or its foreign currency
equivalent for the type of loan. The weighted average interest rate of these was 4.91% at 31 December 2024
(2023:5.61%);
●
interest paid on the senior unsecured note is at a rate of 3.67% (2023: 3.67%); and
●
the nominal interest rates on the investments held at fair value through profit and loss are shown above.
Interest rate risk sensitivity
The Company is primarily exposed to interest rate risk through its loan facility with BNP Paribas, London Branch and its
fixed interest investment portfolio. The sensitivity of each exposure is as follows:
●
loan sensitivity: borrowings vary throughout the year as a result of the Board’s borrowing policy. Borrowings at the
year end were £47,561,000 (2023: £30,639,000) (see note 13 on page 72) and if that level of borrowings were
maintained for a full year, then a 100 basis points change in SONIA (up or down) would decrease or increase total
return after taxation by approximately £476,000 (2023: £306,000); and
●
Senior unsecured note: the senior unsecured note is at a fixed rate of interest so will not be impacted by any changes
in SONIA or short term interest rates; and
●
fixed interest investment sensitivity: the Company’s fixed interest portfolio at the year end was valued at £39,851,000
(2023: £33,214,000), and it has a modified duration (interest rate sensitivity) of approximately 8.0 years (2023: 5.8 years).
A 100 basis points change in short term interest rates (up or down), which is mirrored by an equivalent change in long
term interest rates, would be expected to decrease or increase this portfolio’s value by approximately £3,985,000
(2023: £3,321,000), all other factors being equal.
15.1.3 Other price risk
Other price risks (changes in market prices other than those arising from interest rate risk or currency risk) may affect the
value of quoted and unquoted investments.
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 objectives, and is directly responsible for investment strategy
and ultimately for asset allocation.
When appropriate, the Company may buy/sell put or call options or futures on indices and on equity investments in its
portfolio to manage its exposure to price risk or to generate income. At 31 December 2024 the Company had no open
positions (2023: no open positions).
74
Henderson High Income Trust plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Financial risk management policies and procedures (continued)
15.1.3 Other price risk (continued)
Concentration of exposure to other price risks
An analysis of the Company’s investment portfolio is shown on pages 17 to 19. The majority of the investments are in UK
companies. Accordingly, there is a concentration of exposure to the UK, particularly to financials and consumer staples
(see page 18). 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.
Other price risk sensitivity
The following table illustrates the sensitivity of the net return after taxation for the year and the equity shareholders’ funds to
an increase or decrease in the fair values of the Company’s investments. The level of change used in the table below is
considered to be reasonably possible based on observation of current market conditions. The sensitivity analysis is based
on the Company’s equities at each Statement of Financial Position date, with all other variables held constant.
2024 2023
10% increase
in fair value
£’000
10% decrease
in fair value
£’000
10% increase
in fair value
£’000
10% decrease
in fair value
£’000
Income Statement – net return after tax
Revenue return (55) 55 (40) 40
Capital return 36,551 (36,551) 26,906 (26,906)
Net return after tax for the year 36,496 (36,496) 26,866 (26,866)
Equity shareholders’ funds 36,496 (36,496) 26,866 (26,866)
15.2 Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with the financial liabilities.
Management of the risk
Liquidity risk is not significant as the majority of the Company’s assets are investments in quoted securities that are readily
realisable. The Company has a one year multi-currency loan facility of £60 million with BNP Paribas, London Branch which
will expire on 19 December 2025 (2023: £45 million) This facility has an accordion of £25 million allowing the Company to
borrow up to £85 million.
Liquidity risk exposure
The contractual maturities of the financial liabilities at 31 December, based on the earliest date on which payment can be
required, were as follows:
2024
Due within
three months
£’000
2023
Due within
three months
£’000
Bank loans 47,561 30,639
Other creditors and accruals 959 1,241
48,520 31,880
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
●
transactions involving derivatives are entered into only with investment banks, whose creditworthiness is carefully
assessed so as to minimise the risk to the Company of default;
●
investment transactions are carried out with a large number of brokers, whose credit standard is reviewed periodically
by the Manager, and limits are set on the amount that may be due from any one broker;
●
the Company’s trades are usually on a delivery versus payment (DVP) settlement basis. This process mitigates the risk
of loss during the settlement process;
75
Henderson High Income 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 (continued)
Management of the risk (continued)
●
Janus Henderson and the Board monitor the Company’s risk by reviewing the Depositary’s biannual assurance
report. The Manager’s Operational Risk Team also reports to the Board on these reports. They also engage with the
Depositary to ensure that follow up action arising from any exceptions identified in the report are completed, and
report back to the Board where necessary;
●
cash at bank is held only with banks considered to be creditworthy; and
●
with regards to the corporate bonds in the portfolio, there is a credit risk that the borrowers do not repay principal or
make interest payments. This is managed through careful selection, supported by monitoring of credit ratings, and is
reviewed regularly.
The percentages below represent the value of fixed interest investments included in the Statement of Financial Position
which are exposed to credit and counterparty risk by credit rating.
Rating
2024
%
2023
%
AA 15.0 32.9
A 3.4 6.7
BBB 33.7 22.3
BB 25.7 20.8
B 12.3 4.8
Not rated 9.9 12.5
Total 100.0 100.0
Source: Bloomberg composite rating
None of the Company’s financial assets or financial liabilities is secured by collateral or other credit enhancements. None of
the Company’s financial assets are past due or impaired, and any expected credit loss has not had a material impact on
the Company.
15.4 Fair values of financial assets and financial liabilities
The fair values of the financial assets and liabilities are either carried in the Statement of Financial Position at their fair value
(investments and derivatives) or the Statement of Financial Position amount is a reasonable approximation of fair value
(duefrom brokers, dividends, and interest receivable, due to brokers, accruals, cash at bank and amounts due under the
multi-currency loan facility). At 31 December 2024 the fair value of the senior unsecured note has been estimated to be
£17,722,000 (2023: £18,696,000) and is categorised as level 3 (see note 15.5 below) in the fair value hierarchy.
The current estimated fair value of the senior unsecured note is calculated using a discount rate based on the redemption
yield of the relevant existing reference UK Gilt plus a suitable estimated credit spread. The estimated credit spread is based
on the spread between the yield of the ICE BofA 5-10 Year A Sterling Non-Gilt Index and the redemption yield of the ICE
BofA 5-10 Year UK Gilt Index. The discount rate is calculated and updated at each month end and applied daily to
determine the Company’s published fair value NAVs.
15.5 Fair value hierarchy disclosures
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair
value measurement of the relevant asset:
Level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the
measurement date;
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within
Level 1; and
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
The valuation techniques used by the Company are explained in note 1d on page 65.
There have been no transfers during the year between levels.
The table overleaf sets out fair value measurements using the FRS 102 fair value hierarchy. Fixed interest investments have
been included in level 1 because they are considered to be highly liquid and therefore trade in an active market.
76
Henderson High Income 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)
Financial assets at fair value through profit or loss at 31 December 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 326,939 – – 326,939
Fixed interest instruments:
Preference shares 4,273 – – 4,273
Other 35,578 – – 35,578
Total 366,790 – – 366,790
Financial assets at fair value through profit or loss at 31 December 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 236,793 – – 236,793
Fixed interest instruments:
Preference shares 4,470 – – 4,470
Other 28,744 – – 28,744
Total 270,007 – – 270,007
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 provide investors with a high dividend income while also maintaining the prospect of capital growth.
The Company’s capital is its equity share capital, reserves and debt that are shown in the Statement of Financial Position
at a total of £370,647,000 (2023: £272,848,000).
The Board, with assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an
ongoing basis. This review includes:
●
the planned level of gearing, which takes into account 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 ordinary share and the share price (i.e. the level of share price discount);
●
the need for new issues of equity shares, including sales from treasury; and
●
the extent to which revenue in excess of that which is required to be distributed should be retained.
The Company is subject to several externally imposed capital requirements:
●
under the multi-currency loan facility and the senior unsecured note agreement the total of these borrowings may
notexceed one third of adjusted total assets (as defined in the facility agreement) and net assets must be more than
£90 million;
●
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 one of the two capital retention tests imposed on investment companies by company law and cannot
retain more than 15% of income.
The Company has complied with these requirements in the year under review and the prior year.
77
Henderson High Income Trust plc Annual Report 2024
16 Called up share capital
Shares entitled
to dividend
Total shares
in issue
Nominal value
in issue
£’000
Issued ordinary shares of 5p each
At 1 January 2024 129,796,278 129,796,278 6,490
Issued during the year 42,345,422 42,345,422 2,117
At 31 December 2024 172,141,700 172,141,700 8,607
Shares entitled
to dividend
Total shares
in issue
Nominal value in
issue
£’000
Issued ordinary shares of 5p each
At 1 January 2023 129,796,278 129,796,278 6,490
At 31 December 2023 129,796,278 129,796,278 6,490
On 17 January 2024 the Company issued 42,345,422 new shares to Henderson Diversified Income Trust plc (HDIV)
shareholders in consideration of the £72.1 million of net assets acquired from HDIV in accordance with the scheme of
reconstruction and winding up of HDIV under section 110 of the Insolvency Act 1986.
No further shares were issued during the year under review (year-ended 31 December 2023: nil). At 31 December 2024
there were 172,141,700 ordinary shares of 5p nominal value in issue. Between 1 January 2025 and 24 March 2025, being
the last practicable date prior to the publication of this annual report, 960,130 shares were bought back and held in
treasury. Accordingly, the number of shares in issue as at 24 March 2025 was 172,141,700, of which 960,130 were held in
treasury. Therefore, the total voting rights in the Company at that date was 171,181,570.
17 Reserves
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
arising on
investments
sold
£’000
Capital reserve
arising on
revaluation of
investments
held
£’000
Revenue
reserve
£’000
At 1 January 2024 128,827 26,302 20,897 30,910 8,916
Transfer on disposal of investments – – 2,211 (2,211) –
Net profit on investments – – 3,604 7,030 –
Foreign exchange gains – – 521 – –
Management fee and finance costs charged
tocapital – – (3,708) – –
Tax relief thereon – – 229 – –
Net return after taxation – – – – 18,301
Dividends paid – – – – (17,031)
Issue of shares on the HDIV transaction 69,949 – – – –
Issue costs in respect of the HDIV transaction (3) – – – –
Listing fees in respect of the new shares issued
following the HDIV transaction (144) – – – –
At 31 December 2024 198,269 26,302 23,754 35,729 10,186
Notes to the Financial Statements (continued)
78
Henderson High Income Trust plc Annual Report 2024
17 Reserves (continued)
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
arising on
investments
sold
£’000
Capital reserve
arising on
revaluation of
investments
held
£’000
Revenue
reserve
£’000
At 1 January 2023 128,827 26,302 18,197 25,673 8,788
Transfer on disposal of investments – – 2,523 (2,523) –
Net profit on investments – – 1,837 7,760 –
Foreign exchange gains – – 1,023 – –
Management fee and finance costs
charged to capital – – (2,784) – –
Tax relief thereon – – 101 – –
Net return after taxation – – – – 13,483
Dividends paid – – – – (13,355)
At 31 December 2023 128,827 26,302 20,897 30,910 8,916
The capital reserve arising on investments sold is distributable. The amount of the capital reserve that is distributable is
complex to determine and is not necessarily the full amount of the reserve as disclosed within these financial statements of
£23,754,000 as at 31 December 2024 (2023: £20,897,000). The portion of the capital reserve arising on revaluation of
investments held is wholly non-distributable.
The revenue reserve is distributable. The amount of the revenue reserve that is distributable is not necessarily the full amount
of the reserve as disclosed within these financial statements of £10,186,000 as at 31 December 2024 (2023: £8,916,000).
18 Net asset value per ordinary share
The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £303,207,000
(2023: £222,342,000) and on the 172,141,700 ordinary shares in issue at 31 December 2024 (2023: 129,796,278).
The movements during the year of the assets attributable to the ordinary shares were as follows:
2024
£’000
2023
£’000
Net assets at start of year 222,342 214,277
Total net return after taxation 25,977 21,420
Dividends paid in the year (17,031) (13,355)
Issue of shares on the HDIV transaction 72,066 –
Issue costs in respect of the HDIV transaction (3) –
Listing fees in respect of the new shares issued following the HDIV transaction (144) –
303,207 222,342
19 Contingent liabilities
There were no partly paid shares or underwriting commitments or any other contingent liabilities at 31 December 2024
(2023: nil).
20 Net debt reconciliation
Cash and cash
equivalents
£’000
Bank loans
repayable within
one year
£’000
Other debt
repayable after
more than one year
£’000
Total
£’000
Net debt as at 1 January 2024 1,990 (30,639) (19,867) (48,516)
Cash flows 992 (17,932) – (16,940)
Exchange movements (489) 1,010 – 521
Non cash flow:
Effective interest movements – – (12) (12)
Net debt as at 31 December 2024 2,493 (47,561) (19,879) (64,947)
Notes to the Financial Statements (continued)
79
Henderson High Income Trust plc Annual Report 2024
20 Net debt reconciliation (continued)
Cash and
cash equivalents
£’000
Bank loans
repayable within
one year
£’000
Other debt
repayable after
more than one year
£’000
Total
£’000
Net debt as at 1 January 2023 2,873 (29,141) (19,858) (46,126)
Cash flows (1,755) (1,649) – (3,404)
Exchange movements 872 151 – 1,023
Non cash flow:
Effective interest movements – – (9) (9)
Net debt as at 31 December 2023 1,990 (30,639) (19,867) (48,516)
21 Transactions with JanusHenderson and related parties
Under the terms of an agreement effective from 28 August 2024 the Company has appointed wholly owned subsidiaries
ofJanus Henderson to provide investment management, accounting, administrative and company 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 26.
The total fees paid or payable under this agreement to Janus Henderson in respect of the year ended 31 December 2024
were £1,665,000 (2023: £1,411,000), of which £421,000 was outstanding as at 31 December 2024 (2023: £715,000).
Seethe Directors’ Remuneration Report on page 49 and Note 6 on page 69 for the fees paid to the Directors.
During the period Janus Henderson contributed £442,000 towards the costs incurred in relation to the transaction with HDIV.
In addition to the above, Janus Henderson facilitates marketing activities with third parties which are recharged to the Company.
22 Subsequent events
Since the year-end, the Board announced a first interim dividend of 2.675p per ordinary share, in respect of the year
ending31 December 2025. This will be paid on 25 April 2025 to holders registered at the close of business on 4 April 2025.
This dividend is to be paid from the Company’s revenue account. The Company’s shares will become ex-dividend on
3April 2025.
23 Transaction with Henderson Diversified Income Trust plc (HDIV)
On 16 January 2024, the Company announced that it had acquired £72.1 million of net assets from HDIV in consideration
for the issue of 42,345,422 new ordinary shares as part of a recommended section 110 scheme under the Insolvency
Act1986.
£’000
Net assets acquired
Investments and accrued income 39,480
Cash 32,586
Net assets 72,066
Satisfied by the value of new ordinary shares issued 72,066
There were no fair value adjustments of the combination made to the above figures.
Notes to the Financial Statements (continued)
80
Henderson High Income Trust plc Annual Report 2024
Additional
Shareholder
Information
81
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 the operations of the
investment vehicle. TheBoard of Directors retains responsibility
for strategy, operations and compliance and the Directors retain
a fiduciary dutyto shareholders.
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.
Benchmark
An index against which performance is compared. For the
Company this is a composite of 80% of the FTSE All-Share
Index (total return) and 20% of the ICE BofA Sterling Non-Gilts
Index (total return) and is rebalanced annually.
Compounding
Compounding is the process whereby interest is credited to an
existing principal amount as well as to interest already paid.
Custodian
The Custodian is responsible for ensuring the safe custody of
theCompany’s assets and that all transactions in the underlying
holdings are transacted in an accurate and timely manner.
Depositary
As an AIF the Company is required to appoint a Depositary
which has responsibility for overseeing the operations of the
Company, including safekeeping, cash monitoring and
verification ofownership and valuation of the underlying
holdings and is responsible for the appointment of a
Custodian. The Depositary is strictly liable for the loss of any
investments or other assets in its custody unless it hasnotified
that it has discharged its liability in certain markets.
TheDepositary has confirmed that it has not discharged
liability inrelationto any of the Company’s assets.
Derivative
A contract between two or more parties in relation to an
underlying security. The value of a derivative will fluctuate
inaccordance with the value of the security and is a form
ofgearing as the fluctuations invalue are usually greater than
the fluctuations in the underlying security’s value. Examples
ofderivatives are put and call options, swap contracts, futures
and contracts for difference.
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 byreceipt of a dividend cheque. The record date
applied to the dividend is used as a cut-off for the Company’s
Registrars to know which shareholders should be paid a
dividend. Only shareholders on the Register of Members at the
close of business on the record date will receive the dividend.
The ex-dividend date is the business day before the record
date and is the date upon which the Company’s net asset
value per share and share price will be disclosed ex-dividend.
Effective interest rate method
The effective interest rate is a method used by a bond buyer
to calculate the total yield to maturity including any capital loss
if the bond is purchased above par, or capital gain if
purchased at a discount to par.
Geometric returns
A method for aggregating percentage returns over a holding
period to include the impact of compounding.
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 from tax on the capital gains arising on
their investments subject to meeting certain criteria. Income,
net of expenses and tax, is substantially distributed to
shareholders. Investment trusts are also known as
investment companies although the tax legislation retains
the reference to investment trusts.
Liquidity
In the context of the liquidity of shares in the stock market, this
refers to the availability of buyers 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.
Market capitalisation
The market value of a company calculated by multiplying the
mid-market price per share by the number of shares in issue.
Mid-market price
The middle (or mid) market price is the price between the best
offered price and the best bid price. It can simply be defined as
the average of the current bid and offer prices being quoted.
Treasury shares
Shares repurchased by the Company but not cancelled.
Glossary
Henderson High Income Trust plc Annual Report 2024
82
The Company uses the following Alternative Performance Measures (APMs) throughout the Annual Report and 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.
Discount or Premium to NAV
The NAV per ordinary share used in this calculation is the NAV published by the London Stock Exchange and by the AIC with the
interim dividends deducted on the corresponding ex-dividend date and with debt at fair value, as defined below.
The amount by which the market price per share of an investment trust is either higher (premium) or lower (discount) than the
NAV per ordinary share, expressed as a percentage of the NAV per ordinary share.
NAV
pence
Share price
pence
(Discount)/
premium to NAV
%
At 31 December 2024 174.72 162.50 (6.99)
At 31 December 2023 169.58 156.50 (7.71)
Gearing/(Net Cash)
Gearing means borrowing money to buy assets with the expectation that the return on investments bought will exceed the interest
cost of the borrowings. The gearing percentage reflects the amount of borrowings (e.g. bank loans and senior unsecured notes)
the Company has used to invest in the market and also takes into account the exposure to hedging and derivatives which have
agearing effect. It is calculated by taking the difference between total investments (see Note 11 on page 71) and equity
shareholders’ funds (see Statement of Financial Position) and dividing by equity shareholders’ funds and multiplying by 100.
2024 2023
Investments held at fair value through profit or loss (£’000) (page 71) (A) 366,790 270,007
Net assets (£’000) (page 63) (B) 303,207 222,342
Gearing (C = A/B -1) (%) (C) 21.0 21.4
NAV with debt at par and fair value
2024
£’000
2023
£’000
Investments held at fair value through profit or loss (see note 11) 366,790 270,007
Current assets (see page 63) 4,816 4,082
Creditors: amounts falling due within one year (see note 13) (48,520) (31,880)
Creditors: amounts falling due after more than one year (see note 14) (19,879) (19,867)
NAV with debt at par (A) 303,207 222,342
Less: fair value of senior unsecured note (see note 15.4) (17,722) (18,696)
Add back: amortised cost of senior unsecured note 19,879 19,867
NAV with debt at fair value (B) 305,364 223,513
Ordinary shares in issue (see note 16) (C) 172,141,700 129,796,278
NAV per ordinary share with debt at par (see page 63) (A/C x 100) (p) 176.14 171.30
NAV per ordinary share with debt at fair value (B/C x 100) (p) 177.39 172.20
The NAV per share is published daily and the year-end NAV as published by the AIC can be found on page 6. The NAV
publishedto the London Stock Exchange and by the AIC will deduct interim dividends on the corresponding ex-dividend date.
The NAV in the Company’s financial statements will deduct the interim dividends on the corresponding dividend payment date.
TheCompany currently publishes two NAVs, one with debt at par and the other with debt at fair value and further information
isavailable in Note 18.
Alternative Performance Measures (Unaudited)
83
Henderson High Income Trust plc Annual Report 2024
Alternative Performance Measures (Unaudited)
(continued)
Ongoing Charge
The ongoing charges ratio has been calculated in accordance with the guidance issued by the AIC as the total investment
management fees and administrative expenses and expressed as a percentage of the net asset values throughout the year.
2024
£’000
2023
£’000
Management fee 1,665 1,411
Other administrative expenses (note 6) 618 456
Less: non-recurring expenses (59) (4)
Ongoing charge 2,224 1,863
Average net assets
1
300,583 217,464
Ongoing charge ratio 0.74% 0.86%
1 Calculated using the average daily net asset value (with debt at fair value)
Total Return
The total return on the share price or NAV (with debt at fair value) takes into account both the rise and fall of NAVs/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 with debt at fair value total return). Dividends paid
and payable are set out in note 10 on page 70.
NAV (with debt
at fair value)
Share
price
NAV/Share price per share at 31 December 2023 (pence) 169.58 156.50
NAV/Share price per share at 31 December 2024 (pence) 174.72 162.50
Change in the year (%) 3.0 3.8
Impact of dividends reinvested (%) 6.2 6.7
Total return for the year (%)
1
9.4 10.8
1 Geometric returns
Income/Dividend Yield
The yield is the annual dividend (paid or announced for the year) expressed as a percentage of the year-end share price.
31 December
2024
31 December
2023
Annual dividend (pence) (A) 10.60 10.35
Share price (pence) (B) 162.50 156.50
Yield (C=A/B) (%) (C) 6.5 6.6
84
Henderson High Income 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 JanusHenderson,
as the Company’s AIFM is required to be made available to
investors. These disclosures, including those on the AIFM’s
remuneration policy, are contained in a separate document
called ‘AIFMD Disclosures’ which can be found on the
Company’s website.
BACS
Dividends can be paid by means of BACS (Bankers’
Automated Clearing Services); mandate forms for this purpose
are available from the Registrar, Computershare Investor
Services PLC. Alternatively, shareholders can write to the
Registrar (the address isgiven on page 86), to give their
instructions; these must include thebank account number,
the bank account title and the sort code ofthe bank to which
payments are to be made.
Common Reporting Standard
Tax legislation requires the Company to provide personal
information to HMRC on certain investors who purchase
shares in investment trusts. This information is provided
annually to thelocal tax authority of the tax residencies of
anumber ofnon-UK based certificated shareholders and
corporateentities.
Equality Act 2010
Copies of this Annual Report and other documents issued by
the Company are available from the Corporate Secretary.
Ifneeded, 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 enacted in 2010 intended
to enforce the requirement for United States persons
(including those living outside the US) to file yearly reports on
their non-US financial accounts. The Company makes an
annual assessment, before the FATCA return is due, to
determine whether the shares represent financial accounts.
Where they do, US reportable accounts are notified to the
local tax authority as required.
General Data Protection Regulation (GDPR)
A privacy statement can be found at 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 Investments
(NMPI)Status
The Company currently conducts its affairs so that its ordinary
shares of 5p each can be recommended by IFAs to ordinary
retail investors in accordance with the FCA 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.
Share price information
Details of the Company’s share price and NAV per share
canbefound at www.hendersonhighincome.com.
TheCompany’s NAV is published daily and the market prices
of the Company’s shares are published daily in the Financial
Times, the Daily Telegraph and the London Stock Exchange
Daily Official List.
Shareholder details
Shareholders who hold their shares in certificated form can
check their shareholding with the Registrar, Computershare
Investor Services PLC, 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 establishes the basis for the
EUtaxonomy. 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, the Company
states that the investments underlying this financial product
do not take into account the EU criteria for environmentally
sustainable economic activities.
Henderson High Income Trust plc Annual Report 2024
85
Corporate Information
Registered Office
201 Bishopsgate
London
EC2M 3AE
Telephone: 020 7818 1818
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
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London
E14 5HQ
Stockbrokers
J.P. Morgan Cazenove Limited
25 Bank Street
London
E14 5JP
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Telephone: 0370 707 1039
Email: WebCorres@computershare.co.uk
Investors with share certificates (i.e. not those in a share plan or
ISA) can check their holdings at www.investorcentre.co.uk.
Independent Auditor
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
Financial Calendar
Annual General Meeting Tuesday, 13 May 2025
First interim dividend payment Friday, 25 April 2025
Second interim dividend payment Friday, 25 July 2025
Third interim dividend payment Friday, 24 October 2025
Fourth interim dividend payment Friday, 30 January 2026
Half year results announced September 2025
Senior unsecured note interest payment dates 8 July 2025
8 January 2026
Information Sources
For more information about the Company, visit:
www.hendersonhighincome.com
To receive regular insights on investment trusts from the
investment manager, visit:
www.janushenderson.com/en-gb/investor/subscriptions/
Follow the Janus Henderson Investment Trusts on 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.
Henderson High Income Trust plc Annual Report 2024
86
Henderson High Income Trust plc Annual Report 2024
Strategic Report
Performance Highlights 5
Chairman’s Statement 8
Fund Manager’s Report 12
Portfolio and
Financial Information 17
Business Model 23
Managing Risks 27
Viability Statement 29
Key Performance
Indicators 30
Governance
Board of Directors 36
Corporate Governance
Report 38
Audit and Risk
Committee Report 43
Management Engagement
Committee Report 46
Nominations and
Remuneration
Committee Report 47
Directors’ Remuneration
Report 48
Directors’ Report 51
Statement of Directors’
Responsibilities 52
Financial
Statements
Independent Auditor’s
Report 54
Income Statement 61
Statement of Changes
inEquity 62
Statement of Financial
Position 63
Statement of Cash
Flows 64
Notes to the Financial
Statements 65
Additional
Shareholder
Information
Glossary 82
Alternative Performance
Measures 83
General Shareholder
Information 85
Corporate Information 86
Objective
The Company invests in a prudently
diversified selection of both well-
known and smaller companies to
provide investors with a high dividend
income stream while also maintaining
the prospect of capital growth.
Henderson
High Income
Trust plc
Annual Report 2024
JHI9212/2024Henderson High Income Trust plc – Annual Report 2024
Henderson High Income Trust plc
Registered as an investment company in England and Wales
with registration number 02422514
Registered office: 201 Bishopsgate, London EC2M 3AE
SEDOL number: 0958057
ISIN number: GB0009580571
London Stock Exchange (TIDM) Code: HHI
Global Intermediary Identification Number (GIIN): JBA08I.99999.SL.826
Legal Entity Identifier Number (LEI): 213800OEXAGFSF7Y6G11
www.hendersonhighincome.com
JHI9212/2024Designed 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).
Seeking superior
income generation
and long-term
capital growth