Henderson High Income Trust plc (HHI) has announced its half-year financial results for the six months to 30 June 2025.
HHI achieved a positive relative performance with a Net Asset Value (NAV) total return of 11.9% versus the benchmark return of 8.0%, an outperformance of 3.9%.
HHI’s share price total return was higher still at 14.4% as the discount the share price has traded at relative to the Company’s net asset value reduced during the period. Net assets stood at £327.2m (£303.2m at 31/12/24). Meanwhile, the Board recommended the payment of dividends totalling 5.35p per share, giving a 6% yield.
HHI aims to invest 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. During the period, asset allocation did not change with a clear bias towards equities at the expense of fixed interest investments versus the benchmark (90% equities, 10% bonds). Meanwhile, gearing reduced to approximately 18% (c. 21% at the start of 2025).
New holdings were established in overseas companies BNP Paribas and AXA. The Company exited Mobico at the beginning of the year on fears over the balance sheet and the company’s ability to sell assets to reduce leverage. Finally, Sabre Insurance was sold after a recovery from its share price lows given margins had recovered back to more normalised levels.
Jeremy Rigg, Chairman of Henderson High Income Trust plc, said: “Whilst markets have made good progress in the first half of the year investors remain focused on the impact of ongoing tariff negotiations between the US and its trading partners and the impact that this may have on economic activity. With global inflationary pressures having eased a little there is some scope for monetary policy to become a little less restrictive. In the UK, although inflation has picked up a little, the Bank of England has lowered the UK interest rate to 4 percent due to signs that the labour market is cooling off and evidence that pay settlements at least in the private sector have begun to reduce.”
“The UK equity market has made good progress in the early part of the year, aided by strong company results and significant share buyback activity. There is a clear divergence between the apparent health of the corporate sector and government finances which remain under significant pressure due to public spending commitments. It is important to remember that a significant proportion of UK company profitability is derived from activities outside the UK and the UK market continues to trade at an attractive valuation relative to other global markets.
“As usual, the Company’s Fund Manager will continue to focus on delivering the high level of income which our shareholders expect while also mindful of the requirement to target longer term capital growth.”
David Smith, Fund Manager of Henderson High Income Trust plc, said: “The UK equity market made strong returns during the first half of the year with the FTSE All-Share Index up 9.1% on a total return basis. Within the equity portfolio, holdings in life insurance companies Phoenix and M&G were positive for performance, with overseas equity holdings Nordic telecommunications company Tele2 and French utility Engie also performing strongly.
“Valuations in the UK remain attractive with the equity market trading at a discount to its long term average and overseas indices. The portfolio maintains a balanced approach owning more resilient businesses as well as cyclical companies that are attractively valued.”
