Henderson Opportunities Trust up 68%

Henderson Opportunities Trust today said that its net asset value (NAV) total return rose 47.1% last year against the FTSE All-Share index's 22.8%.

It added that its excellent consistent performance has been recognised in a substantial reduction in the discount, resulting in a 68.4% increase in the share price.

NAV per ordinary share was 884.3p, up from 608.8p in 2012. Gearing dropped to 14.5% from 16.2%.

Chairman George Burnett said real earnings in the UK, which have been falling since 2008, may be on the turn, and should help to sustain the recovery in consumer confidence.

During the year the trust has been active in 58 companies, selling out completely in 11 cases and starting new investments in 18, with a strong bias towards industrial and technology stocks and also FTSE 100-listed international mining and oil and gas names following their significant underperformance over the last two years.

The company disposed of satellite broadband service provider Avanti Communications, budget airline easyJet, chocolate confectionary and snacks producer Zetar and support services and construction group Interserve where it refreshingly admitted that shares have continued to perform since it sold out and that it should have been more patient.

The trust also sold down a portion of its investment in Retroscreen Virology, the biomedical services company, its largest holding.

IPOs

The manager said a striking feature of 2013 was the increase in the number of initial public offerings. They bought and sold the most high-profile issue, Royal Mail, and London-based estate agency Foxtons, but retained Conviviality Retail, the convenience store retailer, and Keyword Studios, a video gaming language services provider which they think have scope for growth over the coming years.

The biggest purchase in the year was BHP Billiton, the international resources group with operations in iron ore, coal and aluminium, on the basis that major cultural changes are underway focusing on capital discipline and it is returning "to sustained profitable growth without the risk of break-neck expansion".

The manager highlighted in particular the replacement of "various executives among the leading resource businesses" which also encouraged it to invest in Rio Tinto, and Royal Dutch Shell.

Other new investments included Advanced Computer Software, the business and healthcare IT solutions provider, run by the "energetic" Vin Murria, and Monitise, which provides technology for mobile applications in banking with customers such as Royal Bank of Scotland and Visa.

The managers are optimistic that their holdings are well placed to weather the inevitable rise in interest rates as they have low levels of debt and provide competitive products and services.