Henderson High Income

Henderson High Income (HHI) has recently announced that Henderson Diversified Income will be merged into it, subject to shareholder approval, which would add advantages of scale to HHI in the coming months. HHI’s manager David Smith believes that for the new HHI shareholders the timing of this merger may be fortuitous, as he feels that a number of key risks facing the UK equity market are reducing: it is likely to avoid a material recession, inflationary pressures have diminished, and political

Henderson High Income

Henderson High Income (HHI) has recently announced that Henderson Diversified Income will be merged into it, subject to shareholder approval, which will add advantages of scale to HHI in the coming months. For the new HHI shareholders, the timing of this merger may be fortuitous, as HHI’s manager David Smith believes that a number of key risks facing the UK equity market are reducing: it is likely to avoid a material recession, inflationary pressures have diminished, and political risk should fa

Henderson High Income / Henderson Diversified Income – Merger terms agreed

Henderson Diversified Income (HDIV) has agreed heads of terms for a combination with Henderson High Income (HHI). As part of the deal, shareholders in HDIV will have the option to take cash for all or part of their holding if they choose. In July 2023, HDIV’s chairman noted (see our news story here) that the trust had shrunk through share buybacks, and that this was inflating its average running costs and affecting liquidity. More importantly, he also made some observations about the fund’s inv

Henderson High Income – There’s value in value

Thanks to its combination of both high-yielding stocks and debt, Henderson High Income (HHI) gives its manager, David Smith, more capacity to adapt to the higher inflationary environment that has dictated the fortunes of the UK stock market. David believes that despite the recent macroeconomic uncertainty, the current market outlook could be supportive for HHI’s value-biased portfolio. Historical data appears to suggest that a combination of high inflation and a resilient UK economy may be a boo

Henderson High Income – There’s value in value

Thanks to its combination of both high-yielding stocks and debt, Henderson High Income (HHI) gives its manager, David Smith, the toolkit he needs to navigate the higher inflationary environment that has dictated the fortunes of the UK stock market. David believes that despite the recent macroeconomic uncertainty, the current market outlook could be supportive for HHI’s value-biased portfolio. History suggests that the combination of high inflation and a resilient UK economy may be a boon for the

Henderson High Income – Does what it says on the tin

Whilst 2022 has been a harrowing year for many trusts, Henderson High Income Trust (HHI) has generated a positive 12-month NAV return and still offers a yield that ranks as one of the highest amongst its peers. Manager David Smith remains quietly confident about the medium-term prospects for the UK, believing that the country will experience a mild recession, and has begun to rotate HHI’s portfolio into cyclical companies, where valuations are particularly attractive. While David is underweight

Henderson High Income – Does what it says on the tin

Whilst 2022 has been a harrowing year for many trusts, Henderson High Income Trust (HHI) has generated a positive 12-month NAV return and still offers an attractive yield, one of the highest amongst its peers. Manager David Smith remains quietly confident about the medium-term prospects for the UK, believing that the country will experience a mild recession, and has begun to rotate HHI’s portfolio into cyclical companies, where valuations are particularly attractive. While David is underweight t

Inflation & Investment Trusts - Sep 2022

Inflation has now persisted beyond most people's 2021 expectations for a “short term blip” following the COVID crisis, and investors are increasingly under pressure to generate positive real returns in the first highly inflationary (i.e., >5%) environment since 1991. We expect a degree of asset price volatility to continue across all asset classes for quite some time. In this note we look at the factors behind the current inflationary environment, evaluate which ones are likely to persist and

Henderson High Income - Last man standing

Henderson High Income (HHI) has enjoyed something of a UK revival for a year now, boosted by a recovery from the pandemic and a game of catch-up among dividend-paying companies, which manager David Smith says still have further to go. Concerns around inflation, and now the Russo-Ukrainian conflict, linger – but the trust’s focus on high quality companies and its ability to invest across both equities and bonds means that it has more scope to prepare for any uncertainty on the horizon. Following

Henderson High Income - Last man standing

Henderson High Income (HHI) has enjoyed something of a UK revival for a year now, boosted by the pandemic recovery and a game of catchup among dividend-paying companies, which manager David Smith says still have further to go. Concerns around inflation, and now the Russo-Ukrainian conflict, linger – but the trust’s focus on high quality companies and its ability to invest across both equities and bonds means that it has more scope to prepare for any uncertainty on the horizon. Following the liqu

A taste of more to come

The UK market has been making somewhat of a comeback since the start of 2021, after years of uncertainty, volatility and being outright unloved. As we show on page 9, Henderson High Income (HHI) has been a beneficiary of the recovery in the UK’s fortunes, outperforming its benchmark and putting its NAV ahead of comparable indices over all time periods. Manager David Smith is positive about UK equity markets going forward and believes there is plenty more upside to come in the form of economic re

A taste of more to come

The UK market has been making somewhat of a comeback since the start of 2021, after years of uncertainty, volatility and being outright unloved. As we show on page 10, Henderson High Income (HHI) has been a beneficiary of the recovery in the UK’s fortunes, outperforming its performance benchmark and putting its NAV ahead of comparable indices over all time periods. Investment manager David Smith is positive about UK equity markets going forward and believes there is plenty more upside to come in

Robust high yield

Henderson High Income’s (HHI‘s) dividend income proved relatively resilient in the face of COVID-19. It will likely dip into its revenue reserves to maintain its dividend this year and perhaps next, but having avoided the worst of the crisis, HHI manager David Smith sees little danger of these being exhausted. HHI is trading on a yield close to 7%. This could prove an attractive entry point. On previous occasions where the trust has traded at similar yield levels, it has delivered high returns s

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

Bluefield Solar Income Fund – Fundamentals shine despite discount

The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual

LSL Property Services (LSL LN) - Transformation & market recovery

2023 results are, as indicated in its February pre-close update, “slightly ahead of market expectations”. Current trading continues to improve, with 1Q24 underlying operating profit up yoy, “reflecting the benefits of the Group’s transformation programme completed in 2023 as well as improving market conditions.” With net cash of £35m at end 2023, the Board approved 7.4p final DPS and £7m buy back.

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Henderson Far East Income - Repositioning to raise total returns

Henderson Far East Income (HFEL) has consistently delivered on its objective to provide a rising dividend. However, like many investors, HFEL’s managers overestimated the potential for a post-pandemic rebound in China. The trust’s resultant overweight to Chinese consumer and other cyclicals led to a fall in portfolio revenues and underperformance in the financial year ended 31 August 2023 (FY23). With a view to improving future returns, HFEL’s board has since indicated an increased willingness t

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PensionBee: Strong start to the new financial year

International Public Partnerships - Consistently and responsibly delivering

International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th

LIBERUM: NewRiver: Q4 trading update: Continued operational momentum

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

Witan

Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26