Henderson High Income – Half Year Report

HENDERSON HIGH INCOME TRUST PLC

Unaudited results for the half-year ended 30 June 2025

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.

Performance for the six months to 30 June 2025

• Net asset value (NAV) total return (debt at fair value)¹ of 11.9% compared with a total return from the benchmark² of 8.0%

• Mid-market share price total return (including dividends reinvested) of 14.4%

Financial highlights

	at 30 June 2025	at 31 December 2024
NAV per share3	190.0p	174.7p
Mid-market price per share	180.3p	162.5p
Net assets	£327.2m	£303.2m
Dividends paid/payable	5.35p	10.60p
Dividend yield	6.0%	6.5%
Gearing	18.2%	21.0%
(Discount)/premium to NAV (debt at fair value)	(5.1%)	(7.0%)

Total return performance (including dividends reinvested and excluding transaction costs)

	6 months %	1 year %	3 years %	5 years %	10 years %
NAV total return (debt at fair value)1	11.9	14.9	40.4	70.8	90.5
Share price total return4	14.4	22.6	35.8	71.1	79.4
Benchmark2	8.0	10.0	29.7	50.2	78.4
FTSE All-Share Index	9.1	11.2	35.5	67.3	92.7
ICE BofA Sterling Non-Gilts Index	3.4	5.3	7.3	-4.8	24.2

1.  Net asset value with debt at fair value per ordinary share total return (including dividends reinvested and excluding transaction costs)    

2.  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

3.  Net asset value per share with debt at fair value as published by the Association of Investment Companies (AIC)

4.  The mid-market share price total return (including dividends reinvested)

CHAIRMAN’S STATEMENT

Markets/Performance

The first half of 2025 has seen financial markets deliver positive returns. A global backdrop of easing inflation and lower interest rates, combined with robust corporate results has enabled equity markets to move higher with UK equities also benefitting from a historically low relative valuation.

Against this backdrop the Company has also achieved a positive relative performance versus its benchmark (80% of the FTSE All-Share Index and 20% of the ICE BofA Sterling Non-Gilts Index) with a net asset value total return of 11.9% versus the benchmark return of 8.0%, outperformance of 3.9%. The Company’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.

Gearing/Asset Allocation

The Company’s asset allocation did not change significantly during the first half of the year with a clear bias towards equities at the expense of fixed interest investments versus the benchmark. During the period the Company had approximately 90% of its assets invested in equities and 10% in bonds. Gearing reduced a little in the period with the Company ending the first half with a gearing level of approximately 18% (versus approximately 21% at the start of 2025).

Dividends

The first interim dividend of 2.675 pence per share was paid on 25 April 2025 and the second interim dividend for the same amount was paid on 25 July 2025. A third interim dividend, to be paid from the Company’s revenue account, of 2.775 pence per share was announced on 7 July 2025 and this dividend will be paid on 24 October 2025 to shareholders registered at the close of business on 12 September 2025 (with the shares being quoted ex-dividend on 11 September 2025).

Dividend payouts from UK companies have continued to be positive with overall levels of corporate profitability remaining healthy. In particular the UK banking sector has exhibited very solid dividend growth whilst the UK miners have seen payout levels more constrained.

The Board continues to regularly review prospective income levels from the Company’s portfolio and it remains confident in the Company’s ability to provide shareholders with a high income return.

Outlook

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 although the US Federal Reserve appears reluctant to reduce rates for the moment. 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.