TIDM75AS
RNS Number : 6269U
HGI Group Limited
26 June 2009
HGI Group Limited
2008 Report and Financial Statements: Listing Rule 17.3.4 and Disclosure and
Transparency Rule 6.3.5
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE
UNITED STATES, CANADA OR JAPAN.
26 June 2009
HGI Group Limited ("the Company"), which has GBP175,000,000 6.50 per cent Notes
in issue due May 2012 and is a wholly owned subsidiary of Henderson Group plc,
releases its Report and Financial Statements for the year end 31 December 2008,
in accordance with Listing Rule 17.3.4 and Disclosure and Transparency Rule
6.3.5.References to "the Group" refer to HGI Group Limited and its controlled
entities and references to "the Henderson Group" refer to Henderson Group plc
and its controlled entities.
Business review
+-----------------------------------------------------+---------+-----------+-----------+
| | | 2008 | 2007 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | GBPm | GBPm |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Income | | 273.9 | 351.6 |
+-----------------------------------------------------+---------+-----------+-----------+
| Expenses | | (179.9) | (236.9) |
+-----------------------------------------------------+---------+-----------+-----------+
| Finance costs | | (13.7) | (8.0) |
+-----------------------------------------------------+---------+-----------+-----------+
| Profit before non-recurring items and tax | | 80.3 | 106.7 |
+-----------------------------------------------------+---------+-----------+-----------+
| Non-recurring items before tax | | (15.2) | 40.5 |
+-----------------------------------------------------+---------+-----------+-----------+
| Profit before tax | | 65.1 | 147.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| Taxation - recurring operations | | (8.6) | (12.4) |
+-----------------------------------------------------+---------+-----------+-----------+
| Taxation - non-recurring items | | 4.8 | (2.6) |
+-----------------------------------------------------+---------+-----------+-----------+
| Total taxation | | (3.8) | (15.0) |
+-----------------------------------------------------+---------+-----------+-----------+
| Profit after tax | | 61.3 | 132.2 |
+-----------------------------------------------------+---------+-----------+-----------+
The Group's profit before non-recurring items and tax for FY08 was GBP80.3m, a
decrease of GBP26.4m (25%) on FY07 (GBP106.7m).
The decrease in income by GBP77.7m (22.1%) to GBP273.9m in FY08 (FY07:
GBP351.6m) reflects the subdued market conditions which impacted on management
and performance fees during the year. Average management fees and net margins in
FY08 were 41.3bps (FY07: 42.2bps) and 18.6bps (FY07: 17.9bps) respectively.
Total fee margin decreased from 53.3bps in FY07 to 48.0bps in FY08, largely due
to lower net performance fees.
A reduction in costs was achieved in all expense categories, apart from
investment administration, which showed a slight increase compared to FY07,
mainly due to a higher level of institutional client assets, particularly fixed
income assets taken on in the year. In particular, significant reductions were
made in both fixed and variable staff costs primarily as a result of the profit
protection exercise carried out during the year.
The increase in finance costs reflects the full year impact of interest costs
associated with the debt instrument issued in May 2007.
The following non-recurring items before tax were recognised in FY08:
* a GBP34.2m profit on Henderson Group restructuring;
* a charge of GBP20.9m in respect of the write down of a loan to a fellow
subsidiary;
* a GBP1.5m profit on the unwinding of an interest rate swap on the Corporate
debt;
* a GBP7.2m impairment of an investment in a Henderson structured product;
* a charge of GBP15.7m in respect of business restructuring;
* a charge of GBP4.5m in respect of the scheme of arrangement; and
* a charge of GBP2.6m in respect of a review of most of the Group's third party
administration arrangements.
There were two non-recurring items before tax recognised in FY07:
* an accounting gain of GBP31.8m on the Group's investment in BP; and
* a GBP8.7m past service credit relating to the Henderson Group Pension Scheme.
Further details of the non-recurring items are given in note 7 to the financial
statements.
Group taxation
The tax charge on recurring operations in FY08 was GBP8.6m (FY07: GBP12.4m),
giving an effective tax rate of 10.7% (FY07: 11.7%). The primary reasons for the
effective tax rate on recurring operations being less than the current UK
statutory rate of 28.5% (prorata) were the recognition of previously
unrecognised deferred tax assets and the release of surplus provisions in
respect of prior years.
Scheme of arrangement
As announced on 31 October 2008, a scheme of arrangement under sections 895 to
899 of the UK Companies Act (the Scheme) became effective on 31 October 2008
following shareholder and UK Court approval.
The Scheme and associated corporate restructure is designed to help achieve a
more efficient taxation position for the Group and should deliver an effective
corporate tax rate on profits before non-recurring items of approximately 20%
per annum from 2009 onwards.
The cost of implementing the Scheme was approximately GBP4.5m, as previously
disclosed, and is reflected as a non-recurring item in the consolidated income
statement for 2008.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and Accounts. The
Directors are required to prepare Group financial statements in accordance with
International Financial Reporting Standards as adopted by the European Union
(IFRSs) and have elected to prepare the Company financial statements in
accordance with IFRSs. UK Company Law requires the Directors to prepare such
financial statements in accordance with IFRSs, the Companies Act 1985 and
Article 4 of the IAS regulation.
International Accounting Standard (IAS) 1 Presentation of Financial Statements
requires that financial statements present fairly for each financial year the
Group's and Company's financial position, financial performance and cash flows.
In preparing the Group and Company financial statements, the Directors are also
required to:
* select suitable accounting policies in accordance with IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors and then apply them
consistently;
* present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information;
* provide additional disclosures when compliance with the specific requirements of
IFRSs is insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Group's and Company's financial
position and financial performance; and
* state that the Group and Company have complied with IFRSs, subject to any
material departures disclosed and explained in the financial statements.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy, at any time, the financial position of the
Group and Company, for safeguarding the assets, and for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2008
+-----------------------------------------------------+---------+-----------+-----------+
| | | 2008 | 2007 |
+-----------------------------------------------------+---------+-----------+-----------+
| | Notes | GBPm | GBPm |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Income | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Gross fee income and commission receivable on sales | | 323.5 | 430.2 |
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Finance income | | 13.6 | 25.7 |
+-----------------------------------------------------+---------+-----------+-----------+
| Total income | | 337.1 | 455.9 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Commissions and fees payable against income | | (63.2) | (104.3) |
+-----------------------------------------------------+---------+-----------+-----------+
| Net fee and commission income | 1 | 273.9 | 351.6 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Expenses | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Operating costs | | (177.5) | (234.4) |
+-----------------------------------------------------+---------+-----------+-----------+
| Other charges | | (2.4) | (2.5) |
+-----------------------------------------------------+---------+-----------+-----------+
| Total expenses before finance costs and | | (179.9) | (236.9) |
| non-recurring items | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| | | (13.7) | (8.0) |
+-----------------------------------------------------+---------+ + +
| Finance costs | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Profit before non-recurring items and tax | | 80.3 | 106.7 |
+-----------------------------------------------------+---------+-----------+-----------+
| Non-recurring items before tax | 2 | (15.2) | 40.5 |
+-----------------------------------------------------+---------+-----------+-----------+
| Profit before tax | | 65.1 | 147.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| Taxation | 3 | (3.8) | (15.0) |
+-----------------------------------------------------+---------+-----------+-----------+
| Profit after tax | | 61.3 | 132.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Attributable to: | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Equity holders of the parent | | 61.2 | 132.1 |
+-----------------------------------------------------+---------+-----------+-----------+
| Minority interests | | 0.1 | 0.1 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | 61.3 | 132.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| Dividends | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Dividends declared and charged to equity in the | | 42.9 | 264.8 |
| year | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Dividends proposed | | - | 32.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the year ended 31 December 2008
+------------------------------------------------------+--------+-----------+-----------+
| | | 2008 | 2007 |
+------------------------------------------------------+--------+-----------+-----------+
| | | GBPm | GBPm |
+------------------------------------------------------+--------+-----------+-----------+
| Exchange differences on translation of foreign | | 6.9 | 1.5 |
| operations | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Exchange differences on translation of | | 4.4 | 0.7 |
| available-for-sale financial assets | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Translation reserve transfer on sale of | | - | 0.8 |
| available-for-sale financial assets | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Revaluation reserve transfer on sale of | | 3.6 | (28.6) |
| available-for-sale financial assets | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Revaluation reserve transfer on impairment of | | 7.2 | - |
| available-for-sale financial assets | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Losses on revaluation of available-for-sale | | (51.4) | (17.6) |
| financial assets | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Actuarial gains on defined benefit pension schemes | | 65.0 | 34.7 |
+------------------------------------------------------+--------+-----------+-----------+
| Tax charge on items taken directly to equity | | (15.9) | (11.5) |
+------------------------------------------------------+--------+-----------+-----------+
| Net income/(expense) recognised directly in equity | | 19.8 | (20.0) |
+------------------------------------------------------+--------+-----------+-----------+
| Profit after tax | | 61.3 | 132.2 |
+------------------------------------------------------+--------+-----------+-----------+
| Total recognised income and expense | | 81.1 | 112.2 |
+------------------------------------------------------+--------+-----------+-----------+
| | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Attributable to: | | | |
+------------------------------------------------------+--------+-----------+-----------+
| Equity holders of the parent | | 81.0 | 112.1 |
+------------------------------------------------------+--------+-----------+-----------+
| Minority interests | | 0.1 | 0.1 |
+------------------------------------------------------+--------+-----------+-----------+
| | | 81.1 | 112.2 |
+------------------------------------------------------+--------+-----------+-----------+
CONSOLIDATED BALANCE SHEET
As at 31 December 2008
+-----------------------------------------------------+---------+-----------+-----------+
| | | 2008 | 2007 |
+-----------------------------------------------------+---------+-----------+-----------+
| | Notes | GBPm | GBPm |
+-----------------------------------------------------+---------+-----------+-----------+
| Non-current assets | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Intangible assets | | 226.1 | 224.3 |
+-----------------------------------------------------+---------+-----------+-----------+
| Investments accounted for using the equity method | | 5.5 | 3.8 |
+-----------------------------------------------------+---------+-----------+-----------+
| Plant and equipment | | 22.5 | 5.7 |
+-----------------------------------------------------+---------+-----------+-----------+
| Retirement benefit assets | 7 | 152.5 | 62.3 |
+-----------------------------------------------------+---------+-----------+-----------+
| Deferred tax assets | | 5.4 | 6.9 |
+-----------------------------------------------------+---------+-----------+-----------+
| Deferred acquisition and commission costs | | 16.9 | 14.5 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | 428.9 | 317.5 |
+-----------------------------------------------------+---------+-----------+-----------+
| Current assets | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Available-for-sale financial assets | | 48.2 | 101.7 |
+-----------------------------------------------------+---------+-----------+-----------+
| Financial assets at fair value through profit or | | 0.4 | 0.6 |
| loss | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Trade and other receivables | 4 | 379.0 | 97.1 |
+-----------------------------------------------------+---------+-----------+-----------+
| Deferred acquisition and commission costs | 5 | 17.7 | 17.3 |
+-----------------------------------------------------+---------+-----------+-----------+
| Cash and cash equivalents | | 132.7 | 248.0 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | 578.0 | 464.7 |
+-----------------------------------------------------+---------+-----------+-----------+
| Total assets | | 1,006.9 | 782.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Non-current liabilities | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Debt instrument in issue | 6 | 184.5 | 178.0 |
+-----------------------------------------------------+---------+-----------+-----------+
| Retirement benefit obligations | 7 | 4.7 | 5.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| Provisions | | 20.1 | 26.4 |
+-----------------------------------------------------+---------+-----------+-----------+
| Deferred tax liabilities | | 44.7 | 15.8 |
+-----------------------------------------------------+---------+-----------+-----------+
| Deferred income | | 15.7 | 14.4 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | 269.7 | 239.8 |
+-----------------------------------------------------+---------+-----------+-----------+
| Current liabilities | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Trade and other payables | | 234.7 | 203.3 |
+-----------------------------------------------------+---------+-----------+-----------+
| Provisions | | 7.7 | 5.7 |
+-----------------------------------------------------+---------+-----------+-----------+
| Deferred income | | 17.0 | 18.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| Current tax liabilities | | 23.5 | 41.1 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | 282.9 | 268.3 |
+-----------------------------------------------------+---------+-----------+-----------+
| Total liabilities | | 552.6 | 508.1 |
+-----------------------------------------------------+---------+-----------+-----------+
| Net assets | | 454.3 | 274.1 |
+-----------------------------------------------------+---------+-----------+-----------+
| | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Capital and reserves | | | |
+-----------------------------------------------------+---------+-----------+-----------+
| Share capital | 8 | 90.6 | 90.6 |
+-----------------------------------------------------+---------+-----------+-----------+
| Share premium | | 195.1 | 194.6 |
+-----------------------------------------------------+---------+-----------+-----------+
| Treasury shares | | - | (6.7) |
+-----------------------------------------------------+---------+-----------+-----------+
| Own shares held | | - | (85.5) |
+-----------------------------------------------------+---------+-----------+-----------+
| Translation reserve | | 5.9 | (1.8) |
+-----------------------------------------------------+---------+-----------+-----------+
| Revaluation reserve | | (2.1) | (16.3) |
+-----------------------------------------------------+---------+-----------+-----------+
| Profit and loss account | | 111.5 | 99.0 |
+-----------------------------------------------------+---------+-----------+-----------+
| Shareholders' equity | | 401.0 | 273.9 |
+-----------------------------------------------------+---------+-----------+-----------+
| Minority interests | | 53.3 | 0.2 |
+-----------------------------------------------------+---------+-----------+-----------+
| Total equity | 9 | 454.3 | 274.1 |
+-----------------------------------------------------+---------+-----------+-----------+
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2008
+--------------------------------------------------------+-------+-----------+-----------+
| | | 2008 | 2007 |
+--------------------------------------------------------+-------+-----------+-----------+
| | Notes | GBPm | GBPm |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from operating activities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Profit before tax | | 65.1 | 147.2 |
+--------------------------------------------------------+-------+-----------+-----------+
| Adjustments to reconcile (loss)/profit before tax to | | | |
| net cash flows from operating activities: | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - depreciation of plant and equipment and amortisation | | 2.4 | 2.5 |
| of computer software | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - net loss on disposal of plant and equipment | | 2.3 | - |
+--------------------------------------------------------+-------+-----------+-----------+
| - net profit on group restructuring | | (34.2) | - |
+--------------------------------------------------------+-------+-----------+-----------+
| - share-based payments | | 22.3 | 23.6 |
+--------------------------------------------------------+-------+-----------+-----------+
| - net deferred acquisition and commission costs and | | (0.1) | (5.5) |
| deferred income amortisation | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - fair value losses/(gains) on available-for-sale | | 17.0 | (27.0) |
| financial assets | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - profit on disposal of available-for-sale financial | | (3.9) | - |
| assets | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - defined benefit service credit | | (0.2) | (8.2) |
+--------------------------------------------------------+-------+-----------+-----------+
| - contributions to the Henderson Group Pension Scheme | | (25.5) | (24.6) |
+--------------------------------------------------------+-------+-----------+-----------+
| - share of profit of associates and joint ventures | | (2.4) | (2.0) |
+--------------------------------------------------------+-------+-----------+-----------+
| - movement in minority interests | | 0.1 | 0.1 |
+--------------------------------------------------------+-------+-----------+-----------+
| - profit on unwinding of an interest rate swap on | | (1.5) | - |
| Corporate debt | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - debt instrument interest expense | | 12.3 | 8.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from operating activities before changes in | | 53.7 | 114.1 |
| operating assets and liabilities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Changes in operating assets and liabilities | 5 | (51.1) | 12.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Tax (paid)/received | | (8.0) | 1.6 |
+--------------------------------------------------------+-------+-----------+-----------+
| Net cash flows from operating activities | | (5.4) | 127.7 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from investing activities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Proceeds from sale of available-for-sale financial | | 26.9 | 37.5 |
| assets | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash transferred on group restructuring | | (30.7) | - |
+--------------------------------------------------------+-------+-----------+-----------+
| Dividends from associates and distributions from joint | | 1.4 | 0.8 |
| ventures | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Purchases of: | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - plant and equipment and intangible assets | | (22.3) | (1.6) |
+--------------------------------------------------------+-------+-----------+-----------+
| - debt or equity instruments and investments in | | (31.8) | (37.2) |
| associates and joint ventures | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Net cash flows from investing activities | | (56.5) | (0.5) |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from financing activities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Proceeds from issue of shares or other equity | | 0.2 | 0.9 |
| instruments | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Proceeds from short and long-term borrowings | | - | 174.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash payments to owners to acquire or redeem treasury | | - | (6.7) |
| shares | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash payments to owners to acquire or redeem own | | (16.2) | (87.1) |
| shares | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Dividends paid to equity shareholders | | (42.9) | (264.8) |
+--------------------------------------------------------+-------+-----------+-----------+
| Proceeds from unwinding of an interest rate swap on | | 11.4 | - |
| Corporate debt | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Interest paid on long-term borrowings | | (12.2) | (5.7) |
+--------------------------------------------------------+-------+-----------+-----------+
| Net cash flows from financing activities | | (59.7) | (189.4) |
+--------------------------------------------------------+-------+-----------+-----------+
| Effects of exchange rate changes | | 6.3 | 1.1 |
+--------------------------------------------------------+-------+-----------+-----------+
| Net decrease in cash and cash equivalents | | (115.3) | (61.1) |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash and cash equivalents at beginning of year | | 248.0 | 309.1 |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash and cash equivalents at end of year | 5 | 132.7 | 248.0 |
+--------------------------------------------------------+-------+-----------+-----------+
COMPANY STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the year ended 31 December 2008
+--------------------------------------------------------+-------+-----------+-----------+
| | | 2008 | 2007 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | GBPm | GBPm |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Actuarial gains/(losses) on defined benefit pension | | 63.9 | 33.9 |
| schemes | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Tax charge on items taken directly to equity | | (17.9) | (9.6) |
+--------------------------------------------------------+-------+-----------+-----------+
| Income recognised directly in equity | | 46.0 | 24.3 |
+--------------------------------------------------------+-------+-----------+-----------+
| (Loss)/profit after tax | | (26.3) | 21.5 |
+--------------------------------------------------------+-------+-----------+-----------+
| Total recognised income and expense | | 19.7 | 45.8 |
+--------------------------------------------------------+-------+-----------+-----------+
COMPANY BALANCE SHEET
As at 31 December 2008
+--------------------------------------------------------+-------+-----------+-----------+
| | | 2008 | 2008 |
+--------------------------------------------------------+-------+-----------+-----------+
| | Notes | GBPm | GBPm |
+--------------------------------------------------------+-------+-----------+-----------+
| Non-current assets | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Investment in subsidiaries | | 825.2 | 1,872.7 |
+--------------------------------------------------------+-------+-----------+-----------+
| Retirement benefit assets | 7 | 152.5 | 62.3 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | 977.7 | 1,935.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Current assets | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Available-for-sale financial assets | | - | 6.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Current tax assets | | 29.5 | 22.9 |
+--------------------------------------------------------+-------+-----------+-----------+
| Trade and other receivables | 4 | 330.4 | 233.4 |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash and cash equivalents | 5 | 11.2 | 18.4 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | 371.1 | 280.7 |
+--------------------------------------------------------+-------+-----------+-----------+
| Total assets | | 1,348.8 | 2,215.7 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Non-current liabilities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Debt instrument in issue | 6 | 184.5 | 178.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Provisions | | 4.2 | 6.3 |
+--------------------------------------------------------+-------+-----------+-----------+
| Deferred tax liabilities | | 25.2 | 16.7 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | 213.9 | 201.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Current liabilities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Borrowings | | 422.0 | 422.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Trade and other payables | | 266.6 | 1,209.8 |
+--------------------------------------------------------+-------+-----------+-----------+
| Provisions | | 2.1 | 4.4 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | 690.7 | 1,636.2 |
+--------------------------------------------------------+-------+-----------+-----------+
| Total liabilities | | 904.6 | 1,837.2 |
+--------------------------------------------------------+-------+-----------+-----------+
| Net assets | | 444.2 | 378.5 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Capital and reserves | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Share capital | 8 | 90.6 | 90.6 |
+--------------------------------------------------------+-------+-----------+-----------+
| Share premium | | 195.1 | 194.6 |
+--------------------------------------------------------+-------+-----------+-----------+
| Treasury shares | | - | (6.7) |
+--------------------------------------------------------+-------+-----------+-----------+
| Own shares held | | - | (85.5) |
+--------------------------------------------------------+-------+-----------+-----------+
| Profit and loss account | | 158.5 | 185.5 |
+--------------------------------------------------------+-------+-----------+-----------+
| Total equity | 9 | 444.2 | 378.5 |
+--------------------------------------------------------+-------+-----------+-----------+
COMPANY CASH FLOW STATEMENT
For the year ended 31 December 2008
+--------------------------------------------------------+-------+-----------+-----------+
| | | 2008 | 2007 |
+--------------------------------------------------------+-------+-----------+-----------+
| | Notes | GBPm | GBPm |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from operating activities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| (Loss)/profit before tax | | (42.2) | 11.5 |
+--------------------------------------------------------+-------+-----------+-----------+
| Adjustments to reconcile profit before tax to net cash | | | |
| flows from operating activities: | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - fair value gains on financial assets | | - | (46.4) |
+--------------------------------------------------------+-------+-----------+-----------+
| - Impairment of available-for sale financial assets | | 6.0 | - |
+--------------------------------------------------------+-------+-----------+-----------+
| - defined benefit service credit | | - | 8.7 |
+--------------------------------------------------------+-------+-----------+-----------+
| - contributions to the Henderson Group Pension Scheme | | (25.5) | (24.6) |
+--------------------------------------------------------+-------+-----------+-----------+
| - profit on unwinding of an interest rate swap on | | (1.5) | - |
| Corporate debt | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| - finance costs | | 38.7 | 62.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from operating activities before changes in | | (24.5) | 11.2 |
| operating assets and liabilities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Changes in operating assets and liabilities | 5 | 75.6 | 90.4 |
+--------------------------------------------------------+-------+-----------+-----------+
| Tax received | | - | 7.1 |
+--------------------------------------------------------+-------+-----------+-----------+
| Net cash flows from operating activities | | 51.1 | 108.7 |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from investing activities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Purchases of debt or equity instruments | | - | (11.0) |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash flows from financing activities | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Proceeds from issue of shares | | 0.2 | 0.9 |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash payments to owners to acquire or redeem treasury | | - | (6.7) |
| shares | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash payments to owners to acquire or redeem own | | (14.8) | (87.1) |
| shares | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Proceeds from long-term borrowings | | - | 174.0 |
+--------------------------------------------------------+-------+-----------+-----------+
| Dividends paid to equity shareholders | | (42.9) | (264.8) |
+--------------------------------------------------------+-------+-----------+-----------+
| Proceeds from unwinding of an interest rate swap on | | 11.4 | - |
| Corporate debt | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Interest paid on long-term borrowings | | (12.2) | (5.7) |
+--------------------------------------------------------+-------+-----------+-----------+
| Net cash flows from financing activities | | (58.3) | (189.4) |
+--------------------------------------------------------+-------+-----------+-----------+
| | | | |
+--------------------------------------------------------+-------+-----------+-----------+
| Net decrease in cash and cash equivalents | | (7.2) | (91.7) |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash and cash equivalents at beginning of year | | 18.4 | 110.1 |
+--------------------------------------------------------+-------+-----------+-----------+
| Cash and cash equivalents at end of year | 5 | 11.2 | 18.4 |
+--------------------------------------------------------+-------+-----------+-----------+
Basis of preparation
The Group's and Company's financial statements have been prepared on the
historical cost basis, except for certain financial instruments that have been
measured at fair value.
The Group's and Company's financial statements are presented in pounds sterling
and all values are rounded to the nearest one hundred thousand pounds (GBP0.1m),
except when otherwise indicated.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Henderson Group plc and its subsidiaries as at 31 December each year.
The financial statements of all the Group's subsidiaries are prepared to the
same year end date as that of the holding company. The subsidiary accounts are
not all prepared under IFRS. However, the accounts of all the material entities
are prepared under either IFRS or UK GAAP. Where prepared under UK GAAP,
balances reported by subsidiaries are adjusted to meet IFRS requirements for the
purposes of the consolidated financial statements.
The results of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition or
up to the effective date of disposal, as appropriate. Where there is a loss of
control of a subsidiary, the consolidated financial statements include the
results for the part of the reporting year during which the Group had control.
Minority interests represent the equity interests in subsidiaries not fully held
by the Group.
Interests in property close-ended funds, private equity infrastructure funds,
Open-Ended Investment Companies (OEICs) and unit trusts are accounted for as
subsidiaries, associates, joint ventures or other financial investments
depending on the holdings of the Group and on the level of influence and control
that the Group exercises. Strategic shareholder investments in associates, where
the Group has the ability to exercise significant influence, as well as joint
ventures where there is joint control, are accounted for using the equity
method.
Notes to the consolidated financial statements
1. Income
+----------------------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+----------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+----------------------------------------------------------------+-----------+-----------+
| Gross fee income and commission receivable on sales | | |
+----------------------------------------------------------------+-----------+-----------+
| Gross fee income and commission receivable on sales | 323.5 | 430.2 |
+----------------------------------------------------------------+-----------+-----------+
| | | |
+----------------------------------------------------------------+-----------+-----------+
| Finance income | | |
+----------------------------------------------------------------+-----------+-----------+
| Interest on deposits with credit institutions | 7.1 | 24.0 |
+----------------------------------------------------------------+-----------+-----------+
| Interest on loans to fellow subsidiaries | 0.7 | - |
+----------------------------------------------------------------+-----------+-----------+
| Income from available-for-sale financial assets | 5.7 | 2.3 |
+----------------------------------------------------------------+-----------+-----------+
| Losses arising on derivatives in a designated fair value hedge | (8.2) | (3.7) |
| accounting relationship | | |
+----------------------------------------------------------------+-----------+-----------+
| Gains arising on adjustment for the hedged item in a | 8.3 | 3.1 |
| designated fair value hedge accounting relationship | | |
+----------------------------------------------------------------+-----------+-----------+
| | 13.6 | 25.7 |
+----------------------------------------------------------------+-----------+-----------+
| | | |
+----------------------------------------------------------------+-----------+-----------+
| Total income | 337.1 | 455.9 |
+----------------------------------------------------------------+-----------+-----------+
| | | |
+----------------------------------------------------------------+-----------+-----------+
| Commission and fees payable against income | | |
+----------------------------------------------------------------+-----------+-----------+
| Amortisation of deferred acquisition and commission costs | (23.4) | (15.2) |
+----------------------------------------------------------------+-----------+-----------+
| Other commissions and fees payable against income | (39.8) | (89.1) |
+----------------------------------------------------------------+-----------+-----------+
| | (63.2) | (104.3) |
+----------------------------------------------------------------+-----------+-----------+
| | | |
+----------------------------------------------------------------+-----------+-----------+
| Net fee income and commission income | 273.9 | 351.6 |
+----------------------------------------------------------------+-----------+-----------+
2. Non-recurring items before tax
The non-recurring items before tax recorded in the consolidated income statement
comprise the following:
+---------------------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------------+-----------+-----------+
| Profit on Henderson Group restructuring | 34.2 | - |
+---------------------------------------------------------------+-----------+-----------+
| Loss on write down of loan to fellow subsidiary | (20.9) | |
+---------------------------------------------------------------+-----------+-----------+
| Profit on unwinding of an interest rate swap on Corporate | 1.5 | - |
| debt | | |
+---------------------------------------------------------------+-----------+-----------+
| Impairment of available-for-sale financial assets | (7.2) | - |
+---------------------------------------------------------------+-----------+-----------+
| Business restructuring costs | (15.7) | - |
+---------------------------------------------------------------+-----------+-----------+
| Scheme costs | (4.5) | - |
+---------------------------------------------------------------+-----------+-----------+
| Third party administration review costs | (2.6) | - |
+---------------------------------------------------------------+-----------+-----------+
| Realised gain on deemed disposal of available-for-sale | - | 31.8 |
| financial asset | | |
+---------------------------------------------------------------+-----------+-----------+
| Past service credit on the Henderson Group Pension Scheme | - | 8.7 |
+---------------------------------------------------------------+-----------+-----------+
| | (15.2) | 40.5 |
+---------------------------------------------------------------+-----------+-----------+
Profit on Henderson Group restructuring
On 27 November 2008, the Group completed the sale of the following companies to
Henderson Holdings Group BV, a fellow subsidiary, as part of a Group
restructuring exercise resulting from the implementation of the Scheme:
Henderson Funds Management (Jersey) Limited,
Henderson Global Investors (Ireland) Limited,
Henderson Management SA,
Henderson Fund Management (Luxembourg) SA,
Henderson Equity Partners Funds Limited,
Henderson Global Investors (Hong Kong) Limited,
Henderson Global Investors (Singapore) Limited,
Henderson Property Management Company (Luxembourg) No.1 sarl, and
Henderson International Finances Limited.
The profit on the group restructuring was calculated as the proceeds, left
outstanding, less the net assets transferred which resulted in a profit of
GBP34.2m in the consolidated income statement.
Loss on write down of loan to fellow subsidiary
As a result of the Scheme a loan was entered into with a fellow subsidiary of
Henderson Group plc due to the transfer of a limited recourse loan related to
the investment in BPSC. During December 2008, the investment in BPSC was
impaired and as a result the related loans were written down to the recoverable
amount of the investment. This resulted in a loss of GBP20.9m in the
consolidated income statement.
Profit on unwinding of an interest rate swap on Corporate debt
An interest rate swap was entered into at the time of the debt issue in May
2007, to swap the fixed coupon of 6.5% per annum into six month sterling LIBOR
plus 85.75bps per annum. The swap was unwound on 9 December 2008 and realised a
profit of GBP1.5m before tax, which has been recognised in the consolidated
income statement as a non-recurring item. The cumulative fair value adjustment
to the debt carrying value, attributable to the hedged interest rate risk up to
the date of unwinding, GBP10.5m, will be released over the remaining term of the
debt to maturity on 2 May 2012. During the year GBP0.2m was credited to finance
costs in the consolidated income statement.
Impairment of available-for-sale financial assets
In accordance with the impairment tests applicable under IAS 39, an
available-for-sale financial asset was impaired during 2008. A seed investment
in a Henderson structured product was impaired to GBPnil at the end of the year,
resulting in an impairment charge in the consolidated income statement of
GBP7.2m.
Business restructuring costs
A restructure charge of GBP15.7m before tax relief has been recognised in the
consolidated income statement, as a result of headcount and related cost
reductions carried out in response to prevailing market conditions. Of this,
GBP4.9m has been paid in 2008, GBP7.1m is accrued for in trade and other
payables and GBP3.7m is included within provisions.
Scheme costs
The Group undertook a scheme of arrangement during the year which involved
reorganising the Group into a more tax and financially efficient structure.
Costs of approximately GBP4.5m were incurred on this project.
Third party administration review costs
An expense of GBP2.6m before tax relief was incurred in connection with a review
of most of the Group's third party investment administration arrangements during
2008.
Realised gain on deemed disposal of available-for-sale financial asset
The merger between Banco Popolare Italiana and Banco Popolare di Verona e Novara
into the newly incorporated BP on 1 July 2007 gave rise to a new investment
holding by the Group which, for accounting purposes, was deemed to be a disposal
of the previous holding. This resulted in a realised gain of GBP31.8m in 2007.
Past service credit on the Henderson Group Pension Scheme
The past service credit of GBP8.7m on the Group's defined benefit scheme
reflected a reduction in future service benefits which came into effect on 1
April 2007, following a period of staff consultation and agreement with the
Pension Scheme's trustee.
3. Taxation
Tax recognised in the consolidated income statement
+---------------------------------------------------------------+------------+-----------+
| | 2008 | 2007 |
+---------------------------------------------------------------+------------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+------------+-----------+
| Current tax: | | |
+---------------------------------------------------------------+------------+-----------+
| - charge for the year | 2.1 | 15.7 |
+---------------------------------------------------------------+------------+-----------+
| - prior periods adjustments | (12.8) | (11.3) |
+---------------------------------------------------------------+------------+-----------+
| | | |
+---------------------------------------------------------------+------------+-----------+
| Deferred tax: | | |
+---------------------------------------------------------------+------------+-----------+
| - charge for the year | 14.5 | 14.6 |
+---------------------------------------------------------------+------------+-----------+
| - prior periods adjustments | - | (4.0) |
+---------------------------------------------------------------+------------+-----------+
| | | |
+---------------------------------------------------------------+------------+-----------+
| Total tax charged to the consolidated income statement | 3.8 | 15.0 |
+---------------------------------------------------------------+------------+-----------+
Tax recognised in equity
+---------------------------------------------------------------+------------+-----------+
| | 2008 | 2007 |
+---------------------------------------------------------------+------------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+------------+-----------+
| Deferred tax charged to equity | 15.9 | 11.5 |
+---------------------------------------------------------------+------------+-----------+
| Total tax charged directly to equity | 15.9 | 11.5 |
+---------------------------------------------------------------+------------+-----------+
Reconciliation of (loss)/profit before tax to tax expense
The tax charge for the year can be reconciled to the profit before tax in the
consolidated income statement as follows:
Group
+--------------------------------------------------------------+------------+-----------+
| | 2008 | 2007 |
+--------------------------------------------------------------+------------+-----------+
| | GBPm | GBPm |
+--------------------------------------------------------------+------------+-----------+
| | | |
+--------------------------------------------------------------+------------+-----------+
| Profit before tax | 65.1 | 147.2 |
+--------------------------------------------------------------+------------+-----------+
| | | |
+--------------------------------------------------------------+------------+-----------+
| Tax charge at the UK corporation tax rate (prorata) of 28.5% | 18.6 | 44.2 |
| (2007: 30%) | | |
+--------------------------------------------------------------+------------+-----------+
| Factors affecting the tax charge: | | |
+--------------------------------------------------------------+------------+-----------+
| Non-allowable losses/(non-taxable gains) in respect of the | (9.8) | (9.7) |
| investment in BP | | |
+--------------------------------------------------------------+------------+-----------+
| Other disallowable expenditure and non-taxable income | 4.7 | 4.3 |
+--------------------------------------------------------------+------------+-----------+
| Adjustments in respect of prior periods | (12.8) | (15.3) |
+--------------------------------------------------------------+------------+-----------+
| Differences in effective tax rates on overseas earnings | 6.4 | 0.2 |
+--------------------------------------------------------------+------------+-----------+
| Changes in applicable statutory tax rates | (0.3) | (0.2) |
+--------------------------------------------------------------+------------+-----------+
| Recognition of previously unrecognised temporary differences | (2.4) | - |
+--------------------------------------------------------------+------------+-----------+
| Utilisation of previously unrecognised tax losses | (0.2) | (8.5) |
+--------------------------------------------------------------+------------+-----------+
| Other items | (0.4) | - |
+--------------------------------------------------------------+------------+-----------+
| Total tax charge in the consolidated income statement | 3.8 | 15.0 |
+--------------------------------------------------------------+------------+-----------+
4. Trade and other receivables
+------------------------------------------+-----------+-----------+-----------+-----------+
| | Group | Company |
+------------------------------------------+-----------------------+-----------------------+
| | 2008 | 2007 | 2008 | 2007 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| | GBPm | GBPm | GBPm | GBPm |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Amounts owed by subsidiaries | - | - | 329.9 | 228.6 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Loans owed by fellow subsidiaries | 131.0 | - | - | - |
+------------------------------------------+-----------+-----------+-----------+-----------+
| OEIC and unit trust debtors | 52.6 | 26.6 | - | - |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Derivative financial instruments | - | 3.4 | - | 3.4 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Accrued income | 41.0 | 51.2 | 0.5 | 1.4 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Other debtors | 150.6 | 11.1 | - | - |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Prepayments | 3.8 | 4.8 | - | - |
+------------------------------------------+-----------+-----------+-----------+-----------+
| | 379.0 | 97.1 | 330.4 | 233.4 |
+------------------------------------------+-----------+-----------+-----------+-----------+
The loans to fellow subsidiaries of GBP131m shown above attract annual interest
at a flat rate linked to sterling LIBOR (six months) and are repayable on
demand.
5. Cash and cash equivalents
+------------------------------------------+-----------+-----------+-----------+-----------+
| | Group | Company |
+------------------------------------------+-----------------------+-----------------------+
| | 2008 | 2007 | 2008 | 2007 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| | GBPm | GBPm | GBPm | GBPm |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Cash at bank and in hand | 42.7 | 79.5 | 0.1 | 3.1 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Cash equivalents | 90.0 | 168.5 | 11.1 | 15.3 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Cash and cash equivalents | 132.7 | 248.0 | 11.2 | 18.4 |
+------------------------------------------+-----------+-----------+-----------+-----------+
Cash and cash equivalents consist of cash in hand, cash at bank and short-term
investments with financial institutions with original maturity periods of three
months or less.
Included within cash and cash equivalents as at 31 December 2008 was GBP5.3m
(2007: GBP10.1m) held in escrow, representing amounts owed to the Pension Scheme
(GBP4.7m) and outstanding obligations of Towry Law International following an
agreement with the Hong Kong Securities and Futures Commission (GBP0.6m).
Group changes in operating assets and liabilities
+------------------------------------------+-----------+-----------+-----------+-----------+
| | Group | Company |
+------------------------------------------+-----------------------+-----------------------+
| | 2008 | 2007 | 2008 | 2007 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| | GBPm | GBPm | GBPm | GBPm |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Increase in holdings in OEICs/unit | (19.3) | (0.4) | - | - |
| trusts | | | | |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Increase in deferred acquisition and | (24.4) | (26.3) | - | - |
| commission costs | | | | |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Decrease in other assets | (34.1) | 63.3 | 1,023.7 | 101.3 |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Increase in deferred income | 23.7 | 23.6 | - | - |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Decrease in provisions and other | 3.0 | (48.2) | (948.1) | (10.9) |
| liabilities | | | | |
+------------------------------------------+-----------+-----------+-----------+-----------+
| Changes in operating assets and | (51.1) | 12.0 | 75.6 | 90.4 |
| liabilities | | | | |
+------------------------------------------+-----------+-----------+-----------+-----------+
6. Debt instrument in issue
+------------------------------------------+-----------+-----------+-----------+----------+
| | Group | Company |
+------------------------------------------+-----------------------+----------------------+
| | 2008 | 2007 | 2008 | 2007 |
+------------------------------------------+-----------+-----------+-----------+----------+
| | GBPm | GBPm | GBPm | GBPm |
+------------------------------------------+-----------+-----------+-----------+----------+
| Debt instrument in issue | 184.5 | 178.0 | 184.5 | 178.0 |
+------------------------------------------+-----------+-----------+-----------+----------+
The debt instrument in issue represents GBP175m senior, unrated, fixed rate
notes listed on the London Stock Exchange. The debt instrument is unsecured,
repayable in full on 2 May 2012 and bears interest at a fixed rate of 6.5% per
annum payable every six months.
The Group swapped the fixed interest coupon into a floating rate on issue of the
debt. The swap was unwound on 9 December 2008 and realised a profit of GBP1.5m
before tax, recognised as a non-recurring item in the consolidated income
statement. The fair value adjustment to the debt carrying value, attributable to
the hedged interest rate risk up to the date of unwinding the swap, GBP10.5m, is
being released over the remaining term of the debt to maturity on 20 May 2012.
During the year, GBP0.2m was credited to finance costs in the consolidated
income statement.
The fair value of the debt instrument at the balance sheet date was GBP126.0m
(2007: GBP173.4m).
7. Retirement benefits
Retirement benefit assets recognised in the balance sheet
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| | | Group | Company |
+-------------------------------------+------+-----------------------+-----------------------+
| | Note | 2008 | 2007 | 2008 | 2007 |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| | | GBPm | GBPm | GBPm | GBPm |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| | | | | | |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| Henderson Group Pension Scheme | 21.1 | 152.5 | 62.3 | 152.5 | 62.3 |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
Retirement benefit obligations recognised in the balance sheet
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| | | Group | Company |
+-------------------------------------+------+-----------------------+-----------------------+
| | Note | 2008 | 2007 | 2008 | 2007 |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| | | GBPm | GBPm | GBPm | GBPm |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| | | | | | |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
| Henderson Group unapproved pension | 21.2 | 4.7 | 5.2 | - | - |
| schemes | | | | | |
+-------------------------------------+------+-----------+-----------+-----------+-----------+
Pension service cost/(credit) recognised in the income statement
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| | | Group | Company |
+------------------------------------+---------+-----------------------+-----------------------+
| | Notes | 2008 | 2007 | 2008 | 2007 |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| | | GBPm | GBPm | GBPm | GBPm |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| | | | | | |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| Henderson Group Pension Scheme | 21.1 | (0.8) | (0.1) | (0.8) | (0.1) |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| Money Purchase Scheme | | 4.5 | 4.6 | 4.5 | 4.6 |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| Henderson Group unapproved pension | 21.2 | 0.6 | 0.6 | - | - |
| schemes | | | | | |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| Recurring service cost | | 4.3 | 5.1 | 3.7 | 4.5 |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| Past service credit included as a | 2, 21.1 | - | (8.7) | - | (8.7) |
| non-recurring item | | | | | |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
| | | 4.3 | (3.6) | 3.7 | (4.2) |
+------------------------------------+---------+-----------+-----------+-----------+-----------+
Amounts recognised in the statement of recognised income and expense (SORIE)
+------------------------------------+-------+-----------+-----------+-----------+-----------+
| | | Group | Company |
+------------------------------------+-------+-----------------------+-----------------------+
| | Notes | 2008 | 2007 | 2008 | 2007 |
+------------------------------------+-------+-----------+-----------+-----------+-----------+
| | | GBPm | GBPm | GBPm | GBPm |
+------------------------------------+-------+-----------+-----------+-----------+-----------+
| | | | | | |
+------------------------------------+-------+-----------+-----------+-----------+-----------+
| Henderson Group Pension Scheme | 21.1 | (63.9) | (33.9) | (63.9) | (33.9) |
+------------------------------------+-------+-----------+-----------+-----------+-----------+
| Henderson Group unapproved pension | 21.2 | (1.1) | (0.8) | - | - |
| schemes | | | | | |
+------------------------------------+-------+-----------+-----------+-----------+-----------+
| Actuarial gains recognised in the | | (65.0) | (34.7) | (63.9) | (33.9) |
| SORIE | | | | | |
+------------------------------------+-------+-----------+-----------+-----------+-----------+
7.1 Henderson Group Pension Scheme - Final Salary Scheme
Company and Group
The Final Salary Scheme represents the defined benefit section of the Henderson
Group Pension Scheme (Pension Scheme), which closed to new members on 15
November 1999. The sponsor and principal employer of the Pension Scheme is the
Company and the participating company is Henderson Administration Limited. The
appointed investment manager for the final salary scheme is Henderson Global
Investors Limited. The Final Salary Scheme is funded by contributions to a
separately administered fund. The actuarial advisers to the Pension Scheme are
Watson Wyatt LLP.
The liability assumptions used for the 2008 and 2007 IAS 19 Employee Benefits
disclosures are based on the last full valuation of the Pension Scheme as at 31
December 2005, updated by the Company's actuarial advisers, Lane Clark & Peacock
LLP. The Pension Scheme assets are stated at their fair value at 31 December
2008 and 31 December 2007. The Pension Scheme is due to undergo its next
triennial valuation during 2009 based on the facts and circumstances as at 31
December 2008.
Reconciliation of present value of defined benefit obligations
+---------------------------------------------------------------+-----------+-----------+
| | Group and Company |
+---------------------------------------------------------------+-----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| At 1 January | 282.4 | 311.8 |
+---------------------------------------------------------------+-----------+-----------+
| Current service cost | 3.6 | 3.8 |
+---------------------------------------------------------------+-----------+-----------+
| Interest cost | 16.3 | 15.7 |
+---------------------------------------------------------------+-----------+-----------+
| Past service cost | 0.1 | - |
+---------------------------------------------------------------+-----------+-----------+
| Past service credit | - | (8.7) |
+---------------------------------------------------------------+-----------+-----------+
| Actuarial gains | (43.3) | (32.7) |
+---------------------------------------------------------------+-----------+-----------+
| Actual benefit payments | (7.2) | (7.7) |
+---------------------------------------------------------------+-----------+-----------+
| Gains on curtailments | - | 0.2 |
+---------------------------------------------------------------+-----------+-----------+
| At 31 December | 251.9 | 282.4 |
+---------------------------------------------------------------+-----------+-----------+
Reconciliation of the fair value of defined benefit scheme assets
+---------------------------------------------------------------+-----------+-----------+
| | Group and Company |
+---------------------------------------------------------------+-----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| At 1 January | 344.7 | 306.8 |
+---------------------------------------------------------------+-----------+-----------+
| Expected return on scheme assets | 20.8 | 19.8 |
+---------------------------------------------------------------+-----------+-----------+
| Actuarial gains | 20.6 | 1.2 |
+---------------------------------------------------------------+-----------+-----------+
| Group contributions | 25.5 | 24.6 |
+---------------------------------------------------------------+-----------+-----------+
| Actual benefit payments | (7.2) | (7.7) |
+---------------------------------------------------------------+-----------+-----------+
| At 31 December | 404.4 | 344.7 |
+---------------------------------------------------------------+-----------+-----------+
The Group contributions of GBP25.5m (2007: GBP24.6m) include a special
contribution of GBP20.0m (2007: GBP20.0m) paid to the Pension Scheme to reduce
the defined benefit liability. No further special contributions are expected to
be made in the foreseeable future.
Reconciliation of defined benefit asset recognised in the consolidated balance
sheet
+----------------------------------------------------------+------+-----------+-----------+
| | | Group and Company |
+----------------------------------------------------------+------+-----------------------+
| | | 2008 | 2007 |
+----------------------------------------------------------+------+-----------+-----------+
| | | GBPm | GBPm |
+----------------------------------------------------------+------+-----------+-----------+
| Present value of defined benefit obligations | | (251.9) | (282.4) |
+----------------------------------------------------------+------+-----------+-----------+
| Fair value of scheme assets | | 404.4 | 344.7 |
+----------------------------------------------------------+------+-----------+-----------+
| Net asset at 31 December | | 152.5 | 62.3 |
+----------------------------------------------------------+------+-----------+-----------+
Pension service credit recognised in the income statement
+----------------------------------------------------------+------+-----------+-----------+
| | | Group and Company |
+----------------------------------------------------------+------+-----------------------+
| | | 2008 | 2007 |
+----------------------------------------------------------+------+-----------+-----------+
| | Note | GBPm | GBPm |
+----------------------------------------------------------+------+-----------+-----------+
| Current service cost | | 3.6 | 3.8 |
+----------------------------------------------------------+------+-----------+-----------+
| Interest cost | | 16.3 | 15.7 |
+----------------------------------------------------------+------+-----------+-----------+
| Expected return on scheme assets | | (20.8) | (19.8) |
+----------------------------------------------------------+------+-----------+-----------+
| Past service cost | | 0.1 | - |
+----------------------------------------------------------+------+-----------+-----------+
| Past service credit | 2 | - | (8.7) |
+----------------------------------------------------------+------+-----------+-----------+
| Gains on curtailments | | - | 0.2 |
+----------------------------------------------------------+------+-----------+-----------+
| | | (0.8) | (8.8) |
+----------------------------------------------------------+------+-----------+-----------+
Amounts recognised in the SORIE
+---------------------------------------------------------------+-----------+-----------+
| | Group and Company |
+---------------------------------------------------------------+-----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| At 1 January | (12.2) | 21.7 |
+---------------------------------------------------------------+-----------+-----------+
| Actuarial gains recognised in the SORIE | (63.9) | (33.9) |
+---------------------------------------------------------------+-----------+-----------+
| At 31 December | (76.1) | (12.2) |
+---------------------------------------------------------------+-----------+-----------+
Movements in net asset recognised in the balance sheet
+---------------------------------------------------------------+-----------+-----------+
| | Group and Company |
+---------------------------------------------------------------+-----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| At 1 January | 62.3 | (5.0) |
+---------------------------------------------------------------+-----------+-----------+
| Pension service credit recognised in the income statement | 0.8 | 8.8 |
+---------------------------------------------------------------+-----------+-----------+
| Group contributions | 25.5 | 24.6 |
+---------------------------------------------------------------+-----------+-----------+
| Actuarial gains recognised in the SORIE | 63.9 | 33.9 |
+---------------------------------------------------------------+-----------+-----------+
| Net asset at 31 December | 152.5 | 62.3 |
+---------------------------------------------------------------+-----------+-----------+
Pension Scheme assets
The major categories of assets in the final salary section of the Pension
Scheme, were as follows:
Fair value of the defined benefit assets
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| | Group and Company |
+----------------------+---------------------------------------------------------------------+
| | Market value | % as a total of | Expected rate of |
| | | assets | return |
+----------------------+---------------------+-----------------------+-----------------------+
| | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| | GBPm | GBPm | % | % | % | % |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| Final salary section | | | | | | |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| Equities | 77.7 | 108.6 | 19 | 32 | 7.5 | 8.4 |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| Bonds | 235.0 | 202.7 | 58 | 59 | 4.0 | 4.8 |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| Cash | 32.1 | 8.7 | 8 | 2 | 3.8 | 5.4 |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| Property | 8.5 | 1.7 | 2 | - | 6.0 | 6.4 |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| Other | 51.1 | 23.0 | 13 | 7 | 2.8 | 6.0 |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
| Total | 404.4 | 344.7 | 100 | 100 | 4.5 | 6.0 |
+----------------------+----------+----------+-----------+-----------+-----------+-----------+
The Pension Scheme does not hold any investments in employer related companies.
The overall expected return on assets assumption is derived from the weighted
average of the expected returns from each of the main asset classes. The
expected return on assets is based on long-term expectations as at 31 December
2008. The expected return on bonds has been set by reference to market
redemption yields as at the measurement date. The returns for the equities,
property and cash asset classes have been based on the Group's realistic
expectations of investment returns over the longer term.
Actual return on defined benefit assets
+---------------------------------------------------------------+----------+-----------+
| | Group and Company |
+---------------------------------------------------------------+----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+----------+-----------+
| Actual return on scheme assets | 41.4 | 21.0 |
+---------------------------------------------------------------+----------+-----------+
Principal actuarial assumptions
(a) Financial assumptions
+---------------------------------------------------------------+----------+-----------+
| | Group and Company |
+---------------------------------------------------------------+----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+----------+-----------+
| | % per | % per |
| | annum | annum |
+---------------------------------------------------------------+----------+-----------+
| Discount rate | 6.4 | 5.8 |
+---------------------------------------------------------------+----------+-----------+
| Expected rate of return on scheme assets | 4.5 | 6.0 |
+---------------------------------------------------------------+----------+-----------+
| Salary increases | 2.5 | 2.5 |
+---------------------------------------------------------------+----------+-----------+
| Pension increases: | | |
+---------------------------------------------------------------+----------+-----------+
| - where guarantee is the Retail Price Index capped at 5% per | 3.0 | 3.5 |
| annum | | |
+---------------------------------------------------------------+----------+-----------+
| - where guarantee is the Retail Price Index capped at 2.5% | 2.2 | 2.5 |
| per annum | | |
+---------------------------------------------------------------+----------+-----------+
| - where guarantee is fixed | At fixed | At fixed |
| | rate | rate |
+---------------------------------------------------------------+----------+-----------+
| Inflation | 3.0 | 3.5 |
+---------------------------------------------------------------+----------+-----------+
(b) Demographic assumptions
The demographic assumptions used are those underlying the last actuarial
valuation of the Pension Scheme as at 31 December 2005. Post-retirement
mortality was assumed to follow the standard tables PMA/PFA92 (C = 2020) with an
allowance for future mortality improvements in line with 'medium cohort'
effects. The table below demonstrates the changes in implied life expectancies
as at 31 December 2005 using the aforementioned mortality tables:
+---------------------------------------------------------------+-----------+------------+
| | Group and Company |
+---------------------------------------------------------------+------------------------+
| | Male | Female |
+---------------------------------------------------------------+-----------+------------+
| | no. | no. |
| | of | of |
| | years | years |
+---------------------------------------------------------------+-----------+------------+
| Life expectancy for a member who is currently 60 | 26.5 | 29.5 |
+---------------------------------------------------------------+-----------+------------+
| Life expectancy at 60 for a member who is currently 45 | 27.5 | 30.5 |
+---------------------------------------------------------------+-----------+------------+
(c) Historical amounts
+----------------------------------------+------------+------------+-----------+-----------+
| | Group and Company |
+----------------------------------------+-------------------------------------------------+
| | 2008 | 2007 | 2006 | 2005 |
+----------------------------------------+------------+------------+-----------+-----------+
| | GBPm | GBPm | GBPm | GBPm |
+----------------------------------------+------------+------------+-----------+-----------+
| | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
| Defined benefit obligations | (251.9) | (282.4) | (311.8) | (296.2) |
+----------------------------------------+------------+------------+-----------+-----------+
| Scheme assets | 404.4 | 344.7 | 306.8 | 256.1 |
+----------------------------------------+------------+------------+-----------+-----------+
| Surplus/(deficit) in the Pension | 152.5 | 62.3 | (5.0) | (40.1) |
| Scheme | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
| | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
| Experience (losses)/gains on scheme | (1.2) | (0.5) | 8.5 | (31.6) |
| liabilities | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
| Experience gains/(losses) on scheme | 20.6 | 1.2 | (3.7) | 18.9 |
| assets | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
Employer contributions
The Company and Group expect to contribute GBP8.2m to the Pension Scheme in the
year ending 31 December 2009.
7.2 Henderson Group unapproved pension schemes
Group
The Group operates a number of unapproved pension schemes, the details of which
are provided below:
The Pearl Executive Scheme. Members of this scheme are also members of the
Pension Scheme. However, pensionable earnings under the Pension Scheme are
limited to 1/60th for each year of service and the earnings cap. The Pearl
Executive Scheme provides benefits at 1/30th for each year of service with a
maximum of two thirds of salary after 20 years' service based on pensionable
earnings above the earnings cap, on an unfunded basis.
The Henderson Top Up Scheme. Members of this scheme are also members of the
Pension Scheme. However, pensionable earnings under the Pension Scheme are
limited to the earnings cap, and the Henderson Top Up Scheme enables benefits to
be based on pensionable earnings without restriction of the earnings cap. These
additional uncapped benefits are generally provided for on an unfunded basis.
There is an unfunded liability in respect of one member, to whom the Group has
made a contractual promise to pay a fixed pension from age 60.
Reconciliation of present value of defined benefit obligations
+---------------------------------------------------------------+-----------+-----------+
| | Group |
+---------------------------------------------------------------+-----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| At 1 January | 5.2 | 5.5 |
+---------------------------------------------------------------+-----------+-----------+
| Current service cost | 0.3 | 0.3 |
+---------------------------------------------------------------+-----------+-----------+
| Interest cost | 0.3 | 0.3 |
+---------------------------------------------------------------+-----------+-----------+
| Actuarial gains | (1.1) | (0.8) |
+---------------------------------------------------------------+-----------+-----------+
| Actual benefit payments | - | (0.1) |
+---------------------------------------------------------------+-----------+-----------+
| At 31 December | 4.7 | 5.2 |
+---------------------------------------------------------------+-----------+-----------+
The defined benefit obligations at 31 December are split as follows:
+---------------------------------------------------------------+----------+-----------+
| | Group |
+---------------------------------------------------------------+----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+----------+-----------+
| Pearl Executive Scheme | 3.7 | 4.0 |
+---------------------------------------------------------------+----------+-----------+
| Henderson Top Up Scheme | 0.8 | 0.9 |
+---------------------------------------------------------------+----------+-----------+
| Individual contractual promise | 0.2 | 0.3 |
+---------------------------------------------------------------+----------+-----------+
| Total | 4.7 | 5.2 |
+---------------------------------------------------------------+----------+-----------+
Reconciliation of the fair value of defined benefit scheme assets
+---------------------------------------------------------------+----------+-----------+
| | Group |
+---------------------------------------------------------------+----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+----------+-----------+
| At 1 January | - | 0.1 |
+---------------------------------------------------------------+----------+-----------+
| Actual benefit payments | - | (0.1) |
+---------------------------------------------------------------+----------+-----------+
| At 31 December | - | - |
+---------------------------------------------------------------+----------+-----------+
Reconciliation of defined benefit liability
+---------------------------------------------------------------+----------+-----------+
| | Group |
+---------------------------------------------------------------+----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+----------+-----------+
| Present value of defined benefit obligations | 4.7 | 5.2 |
+---------------------------------------------------------------+----------+-----------+
| Fair value of scheme assets | - | - |
+---------------------------------------------------------------+----------+-----------+
| Net liability at 31 December | 4.7 | 5.2 |
+---------------------------------------------------------------+----------+-----------+
Pension service cost recognised in the consolidated income statement
+---------------------------------------------------------------+----------+-----------+
| | Group |
+---------------------------------------------------------------+----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+----------+-----------+
| Current service cost | 0.3 | 0.3 |
+---------------------------------------------------------------+----------+-----------+
| Interest cost | 0.3 | 0.3 |
+---------------------------------------------------------------+----------+-----------+
| | 0.6 | 0.6 |
+---------------------------------------------------------------+----------+-----------+
Amounts recognised in the consolidated SORIE
+---------------------------------------------------------------+----------+-----------+
| | Group |
+---------------------------------------------------------------+----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+----------+-----------+
| At 1 January | (1.9) | (1.1) |
+---------------------------------------------------------------+----------+-----------+
| Actuarial gains | (1.1) | (0.8) |
+---------------------------------------------------------------+----------+-----------+
| At 31 December | (3.0) | (1.9) |
+---------------------------------------------------------------+----------+-----------+
Movements in net liability recognised in the consolidated balance sheet
+---------------------------------------------------------------+-----------+-----------+
| | Group |
+---------------------------------------------------------------+-----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| At 1 January | 5.2 | 5.4 |
+---------------------------------------------------------------+-----------+-----------+
| Expense recognised in the consolidated income statement | 0.6 | 0.6 |
+---------------------------------------------------------------+-----------+-----------+
| Actuarial gains recognised in the consolidated SORIE | (1.1) | (0.8) |
+---------------------------------------------------------------+-----------+-----------+
| At 31 December | 4.7 | 5.2 |
+---------------------------------------------------------------+-----------+-----------+
Principal actuarial assumptions
(a) Financial assumptions
+---------------------------------------------------------------+-----------+-----------+
| | Group |
+---------------------------------------------------------------+-----------------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | % per | % per |
| | annum | annum |
+---------------------------------------------------------------+-----------+-----------+
| Discount rate | 6.4 | 5.8 |
+---------------------------------------------------------------+-----------+-----------+
| Expected rate of return on scheme assets | - | 8.4 |
+---------------------------------------------------------------+-----------+-----------+
| Salary increases | 4.5 | 5.0 |
+---------------------------------------------------------------+-----------+-----------+
| Pension increases: | | |
+---------------------------------------------------------------+-----------+-----------+
| - where guarantee is the Retail Price Index | 3.0 | 3.5 |
+---------------------------------------------------------------+-----------+-----------+
| - where guarantee is fixed | At fixed | At fixed |
| | rate | rate |
+---------------------------------------------------------------+-----------+-----------+
| Inflation | 3.0 | 3.5 |
+---------------------------------------------------------------+-----------+-----------+
(b) Demographic assumptions
The demographic assumptions used are the same as those in the last actuarial
valuation of the unapproved schemes as at 31 December 2005. Post-retirement
mortality was assumed to follow the standard tables PMA/PFA92 (C = 2020) with an
allowance for future mortality improvements in line with medium cohort
projections.The table below demonstrates the changes in implied life
expectancies as at 31 December 2005 using the aforementioned mortality tables:
+---------------------------------------------------------------+-----------+-----------+
| | Group |
+---------------------------------------------------------------+-----------------------+
| | Male | Female |
+---------------------------------------------------------------+-----------+-----------+
| | no. | no. |
| | of | of |
| | years | years |
+---------------------------------------------------------------+-----------+-----------+
| Life expectancy for a member who is currently 60 | 26.5 | 29.5 |
+---------------------------------------------------------------+-----------+-----------+
| Life expectancy at 60 for a member who is currently 45 | 27.5 | 30.5 |
+---------------------------------------------------------------+-----------+-----------+
(c) Historical amounts
+----------------------------------------+------------+------------+-----------+-----------+
| | Group |
+----------------------------------------+-------------------------------------------------+
| | 2008 | 2007 | 2006 | 2005 |
+----------------------------------------+------------+------------+-----------+-----------+
| | GBPm | GBPm | GBPm | GBPm |
+----------------------------------------+------------+------------+-----------+-----------+
| | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
| Defined benefit obligations | 4.7 | 5.2 | 5.5 | 5.7 |
+----------------------------------------+------------+------------+-----------+-----------+
| Scheme assets | - | - | (0.1) | (0.2) |
+----------------------------------------+------------+------------+-----------+-----------+
| Deficit in the pension schemes | 4.7 | 5.2 | 5.4 | 5.5 |
+----------------------------------------+------------+------------+-----------+-----------+
| | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
| Experience (losses)/gains on scheme | (0.1) | 0.2 | 0.5 | 1.5 |
| liabilities | | | | |
+----------------------------------------+------------+------------+-----------+-----------+
Employer contributions
The Group does not expect to contribute to the unapproved pension arrangements
in the year ending 31 December 2009.
8. Share capital
Share capital authorised
+-----------------------------------------------------------------+----------+----------+
| | Group and Company |
+-----------------------------------------------------------------+---------------------+
| | 2008 | 2007 |
+-----------------------------------------------------------------+----------+----------+
| | GBPm | GBPm |
+-----------------------------------------------------------------+----------+----------+
| 1 A ordinary share of 12.5 pence | - | - |
+-----------------------------------------------------------------+----------+----------+
| 1,949,910,776 ordinary shares of 12.5 pence each | 243.7 | 243.7 |
+-----------------------------------------------------------------+----------+----------+
Share capital allotted
Allotted, called up and fully paid shares:
+----------------------------------------------------+---------------+-------------+------+
| | Group and Company |
+----------------------------------------------------+------------------------------------+
| | 10 pence | 12.5 pence | |
| | shares | shares | |
+----------------------------------------------------+---------------+-------------+------+
| | no. | no. | GBPm |
+----------------------------------------------------+---------------+-------------+------+
| A Ordinary shares | | | |
+----------------------------------------------------+---------------+-------------+------+
| Shares in issue at 31 December 2007 | - | - | - |
+----------------------------------------------------+---------------+-------------+------+
| Issue of share prior to implementation of Scheme | - | 1 | - |
+----------------------------------------------------+---------------+-------------+------+
| Shares in issue at 31 December 2008 | - | 1 | - |
+----------------------------------------------------+---------------+-------------+------+
| | | | |
+----------------------------------------------------+---------------+-------------+------+
| Ordinary shares | | | |
+----------------------------------------------------+---------------+-------------+------+
| Shares in issue at 1 January 2007 | 902,004,831 | | 90.2 |
+----------------------------------------------------+---------------+-------------+------+
| Issue of shares for SAYE | 3,373,947 | | 0.4 |
+----------------------------------------------------+---------------+-------------+------+
| Issue of shares for BAYE | 213,362 | 30,861 | - |
+----------------------------------------------------+---------------+-------------+------+
| Share consolidation | (905,592,140) | 724,473,712 | - |
+----------------------------------------------------+---------------+-------------+------+
| Shares in issue at 31 December 2007 | - | 724,504,573 | 90.6 |
+----------------------------------------------------+---------------+-------------+------+
| Issue of shares for SAYE | | 316,273 | - |
+----------------------------------------------------+---------------+-------------+------+
| Issue of shares for BAYE | | 372,123 | - |
+----------------------------------------------------+---------------+-------------+------+
| Shares in issue at 31 December 2008 | | 725,192,969 | 90.6 |
+----------------------------------------------------+---------------+-------------+------+
All of the ordinary shares in issue carry the same right to receive dividends
and other distributions declared, made or paid by the Company.
On 20 October 2008, one 12.5 pence A ordinary share was issued to new Henderson
Group plc in order to maintain continuity of ownership of the Company during the
implementation of the Scheme. The A ordinary share does not entitle the holder
to receive notice of, attend or vote at any general meeting of the Company.
On 31 October 2008, the Scheme effective date, the shares of the Company were
cancelled by way of a reduction of capital. The shareholders of the Company on
the same date were issued shares in new Henderson Group plc on a one for one
basis in consideration for the cancellation of their shares in the Company. New
ordinary shares in the Company were then issued to new Henderson Group plc,
which then became the ultimate holding company of the Henderson Group.
Pursuant to the restructure of the Henderson Group the shareholding of the
Company, including the A ordinary share, was transferred from Henderson Group
plc to Henderson Holdings Group Limited.
Following approval of a share consolidation by the Company's shareholders at an
Extraordinary General Meeting on 9 October 2007, ordinary shares of 10 pence
each were replaced with new ordinary shares of 12.5 pence each. On 19 October
2007, being the record date, 905,592,140 ordinary shares of 10 pence each were
replaced with 724,473,712 new ordinary shares of 12.5 pence each.
The Directors consider shareholders' equity to represent Group capital.
9. Reconciliation of movement in equity
Group
+---------------------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| Equity at 1 January | 274.1 | 495.9 |
+---------------------------------------------------------------+-----------+-----------+
| Total recognised income and expense attributable to equity | 81.1 | 112.1 |
| holders of the parent | | |
+---------------------------------------------------------------+-----------+-----------+
| Dividends paid to equity holders | (42.9) | (264.8) |
+---------------------------------------------------------------+-----------+-----------+
| Purchase of own shares | (14.8) | (87.1) |
+---------------------------------------------------------------+-----------+-----------+
| Purchase of treasury shares | - | (6.7) |
+---------------------------------------------------------------+-----------+-----------+
| Issue of shares for SAYE | 0.2 | 1.4 |
+---------------------------------------------------------------+-----------+-----------+
| Issue of shares for BAYE | (0.1) | - |
+---------------------------------------------------------------+-----------+-----------+
| Costs of share consolidation | - | (0.4) |
+---------------------------------------------------------------+-----------+-----------+
| Movement in equity-settled share scheme expenses | 18.7 | 23.6 |
+---------------------------------------------------------------+-----------+-----------+
| Movement in minority interests | 53.1 | 0.1 |
+---------------------------------------------------------------+-----------+-----------+
| Novation of share schemes on implementation of scheme of | 84.9 | - |
| arrangement | | |
+---------------------------------------------------------------+-----------+-----------+
| Equity at 31 December | 454.3 | 274.1 |
+---------------------------------------------------------------+-----------+-----------+
Company
+---------------------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-----------+-----------+
| | GBPm | GBPm |
+---------------------------------------------------------------+-----------+-----------+
| Equity at 1 January | 378.5 | 666.7 |
+---------------------------------------------------------------+-----------+-----------+
| Total recognised income and expense | 19.7 | 45.8 |
+---------------------------------------------------------------+-----------+-----------+
| Costs of share consolidation | - | (0.4) |
+---------------------------------------------------------------+-----------+-----------+
| Dividends paid to equity holders | (42.9) | (264.8) |
+---------------------------------------------------------------+-----------+-----------+
| Purchase of own shares | (14.8) | (87.1) |
+---------------------------------------------------------------+-----------+-----------+
| Purchase of treasury shares | - | (6.7) |
+---------------------------------------------------------------+-----------+-----------+
| Issue of shares for the SAYE | 0.2 | 1.4 |
+---------------------------------------------------------------+-----------+-----------+
| Issue of shares for the BAYE | (0.1) | |
+---------------------------------------------------------------+-----------+-----------+
| Movement in equity-settled share scheme expenses | 18.7 | 23.6 |
+---------------------------------------------------------------+-----------+-----------+
| Novation of share schemes on implementation of scheme of | 84.9 | |
| arrangement | | |
+---------------------------------------------------------------+-----------+-----------+
| Equity at 31 December | 444.2 | 378.5 |
+---------------------------------------------------------------+-----------+-----------+
Forward-looking statements
This announcement contains forward-looking statements with respect to the
financial condition, results and business of Henderson Group. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events, and depend on circumstances, that will occur in the future. Henderson
Group's actual future results may differ materially from the results expressed
or implied in these forward-looking statements.
For further detail, please see the Report and Financial Statements for the year
ended 31 December 2008, lodged together with this announcement.
To view the full details of the 2008 Report and Financial Statements, paste the
following link into your web browser:
http://www.rns-pdf.londonstockexchange.com/rns/6269U_-2009-6-26.pdf
Copies of Report and Financial Statements for the year ended 31 December 2008
have today been submitted to the UK Listing Authority and will shortly be
available for inspection at the UK Listing Authority's Document Viewing
Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary
Wharf
London
E14 5HS
Telephone: +44(0) 20 7066 1000.
Copies can also be found on the Henderson Group plc website at
www.henderson.com.
HGI Group Limited
201 Bishopsgate
London
EC2M 3AE
No. 2072534
This information is provided by RNS
The company news service from the London Stock Exchange
END
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