CHAIRMAN'S STATEMENT

Markets/Performance

The first half of 2026 has seen financial markets deliver positive returns. Despite a difficult and volatile backdrop given the hostilities in the Middle East, which has exerted upwards pressure on energy prices and inflation, companies have generally been able to weather the storm and monetary policy has been supportive. Overall corporate profitability has remained robust and dividend payout rates have continued to be positive.

The Company's performance in the first half of the year versus its benchmark (80% of the FTSE All-Share Index and 20% of the ICE BofA Sterling Non-Gilts Index) has been a touch ahead with a net asset value total return of 6.3% versus the benchmark return of 6.0%. The Company's share price total return was higher at 8.7% as the discount at which the Company's share price has traded at relative to net asset value reduced during the period.

Gearing/Asset Allocation

The Company's asset allocation has continued to favour equities over fixed interest investments. During the first half of the year approximately 90% of the Company's assets were invested in equities and 10% in bonds. Gearing through the first half of the year remained stable, commencing at 17.5% and ending at 17.9%.

Dividends

The first interim dividend of 2.775 pence per share was paid on 24 April 2026 and the second interim dividend for the same amount was paid on 24 July 2026. A third interim dividend of 2.8 pence per share was announced on 6 July 2026 and this dividend will be paid on 30 October 2026 to shareholders registered at the close of business on 11 September 2026.

Dividend payouts from UK companies have continued to be positive although there have been pockets of weakness with the UK housebuilding sector being a notable casualty.

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

Board of Directors

Having chaired the Board since May 2021 and having been appointed to the Board in 2018, I will be stepping down at the Annual General Meeting in 2027. I am very pleased that Richard Cranfield, who was appointed as a Director in March 2020, will succeed me as Chairman. Richard is the current Chairman of IntegraFin Holdings plc, a FTSE 250 Company.

The Board has commenced a search for a new Director to join the Board in early 2027.

Investment Management Arrangements

The Board regularly reviews arrangements with Janus Henderson to ensure that they are in the best interests of shareholders. In line with other Janus Henderson investment trusts and indeed other competitor investment trusts, we have agreed that it would be prudent to have more formalised additional investment cover.

In this respect I am pleased to say that Andrew Jones, a member of the Janus Henderson Global Equity Income Team who has 30 years investment experience, has been appointed as Deputy Fund Manager to Henderson High Income. Andrew works closely with David Smith, who has been the Company's Fund Manager since 2014 and Andrew has been the effective deputy fund manager for some time. The Board does not anticipate any change to the management of the Company's portfolio.

Outlook

Arguably the performance of financial markets during the first half of 2026 has been better than expected given the difficult geopolitical backdrop. High energy prices, supply chain issues and higher price inflation have provided a challenging mix. The on-off nature of the current ceasefire in the Middle East provides an unstable environment as we look forward to the rest of the year.

Within the UK, corporate performance has been generally encouraging and whilst there are undoubtedly pockets of weakness in the domestic economy, with the outlook for the construction and housebuilding sector looking particularly challenging, larger companies appear to be more resilient due to their balanced activities across the globe. There has been a notable increase in corporate takeover activity with international companies and investors recognising the inherent value of UK quoted companies. In addition, monetary policy should remain supportive of equity markets with the Bank of England unlikely to tighten too significantly whilst overall economic growth prospects remain muted.

As usual David Smith, the Company's Fund Manager, will continue to look for those companies which can offer higher levels of income generation whilst also providing the scope to deliver capital growth over the medium term.

Jeremy Rigg

Chairman

8 September 2026

Fund Manager's Report

Markets

The FTSE All-Share Index returned 7.2% during the first six months of the year, as thawing global trade tensions, an initial peace agreement in the Middle East and positive corporate results helped support global equity markets. In March, the escalation of the conflict in the Middle East caused a slump in global stocks as surging oil and gas prices boosted inflation expectations and raised the possibility of tighter monetary policy. Equities then rebounded as a ceasefire largely held, despite occasional flare-ups in tensions, while the US and Iran later signed an initial peace deal. Shifting sentiment around artificial intelligence (AI) also caused volatility. Worries about technology companies' significant investment in AI, along with anxiety about potential AI-led disruption to traditional business models, unnerved investors. In June, Prime Minister Keir Starmer announced his resignation following the Labour Party's large losses in May's local elections. During the period the Bank of England kept its benchmark rate at 3.75% while UK CPI inflation (Consumer Price Index) cooled to 2.6% in June from 3.0% in January.

The FTSE 100 (+7.6%) outperformed the FTSE 250 (+4.3%) and FTSE Small Cap (+7.1%) indices.  Sectors such as mining, banks and aerospace & defence outperformed, while software & computer services, housebuilders and financial services lagged.

Performance

The Company's NAV (with debt at fair value) total return was 6.3% over the period, modestly outperforming the benchmark return of 6.0%. Within the equity portfolio, holdings in Schroders and DCC Energy were positive for performance. Schroders was subject to an agreed bid approach from Nuveen, while DCC Energy received its own approach from a private equity consortium. Some of the overseas holdings, such as Texas Instruments and Engie, also performed well. Semiconductor manufacturer Texas Instruments reported strong trading, benefiting from robust demand from the build-out of data centres in the US. Engie's agreed acquisition of UK Power Networks was well received by investors.

Holdings in Dunelm, Michael Page and Imperial Brands detracted from returns.  Dunelm reported softer trading due to subdued underlying market conditions.  Recruiter Michael Page suffered from a lacklustre recruitment market while fears over the impact of AI on employment also weighed on the shares. Imperial Brands announced a mixed trading statement, with modest market share losses across its five main countries.

Portfolio Activity

Within the equity portfolio, new holdings were established in Bodycote and Carlsberg. Bodycote is a global provider of heat treatment and specialist metallurgy services with margin expansion potential as the business shifts towards higher‑value specialist technologies. Carlsberg is a global beer and soft drink manufacturer with potential for organic volume recovery across its beer portfolio, as well as margin expansion following the acquisition of Britvic.  Elsewhere, we added to our existing holdings in RELX and BP. RELX's share price fall on AI concerns presented an attractive buying opportunity as we believe the business is well protected from AI-related threats, given its data analytics are based on proprietary data. BP's strategic shift towards a simpler, more focused oil and gas business, combined with tighter capital discipline, should drive improved returns and cash generation over the medium term.

Sales for the period included Mondi and MONY Group. We sold Mondi given our concerns on oversupply in the European paper and packaging industry which is putting pressure on pricing in an environment of subdued demand.  While MONY's short-term cash flows are unlikely to be impacted from agentic AI, we feel they could be over the medium term, which is likely to depress the valuation, hence we exited the position.

David Smith

Fund Manager

8 September 2026

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1. Accounting policies: basis of accounting

The Company is a registered investment company as defined in section 833 of the Companies Act 2006 and operates as an investment trust in accordance with section 1158 of the Corporation Tax Act 2010.

The condensed financial statements have been prepared in accordance with FRS 104 Interim Financial Reporting, FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts, which was updated by the Association of Investment Companies in December 2025.

The accounting policies applied during the period are consistent with those set out in the Annual Report for the year ended 31 December 2025. The condensed financial statements have not been audited or reviewed by the Company's auditor.

2. Management fees

Management fees are charged in accordance with the terms of the management agreement which are set out in the Company's Annual Report for the year-ended 31 December 2025. With effect from 1 January 2026, the management fee is charged at 0.45% of net assets payable quarterly, based on the level of net assets at the relevant quarter end.

3. Revenue return per ordinary share

The revenue return per ordinary share is based on the following figures:

The Company does not have any dilutive securities therefore the basic and diluted returns per share are the same.

4. Fair values of financial assets and financial liabilities

The fair values of the financial assets and liabilities are either carried in the Statement of Financial Position at their fair value (investments and derivatives), or the statement of financial position amount is a reasonable approximation of fair value (due from brokers, dividends, and interest receivable, due to brokers, accruals, cash at bank, bank overdrafts and amounts due under the multi-currency loan facility). The senior unsecured note is held in the Statement of Financial Position at amortised cost in line with the Company's accounting policies.

Categorisation within the fair value hierarchy for those assets and liabilities held at fair value in the Statement of Financial Position has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset:

·      Level 1: the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

·      Level 2: valued by reference to valuation techniques using observable inputs other than quoted prices included in Level 1.

·      Level 3: valued by reference to valuation techniques using inputs that are not based on observable market data.

The Company's holdings in options are included within Level 2 and are included in creditors amounts falling due within one year in the Statement of Financial Position. 

Premiums from written options during the half year ended 30 June 2026 were £238,000 (half year ended 30 June 2025: £160,000; year-ended 31 December 2025: £160,000).

At 30 June 2026 the fair value of the senior unsecured note has been estimated to be £18,328,000 (30 June 2025: £18,066,000; 31 December 2025: £18,394,000) and would be categorised as Level 3 in the fair value hierarchy.

The current estimated fair value of the senior unsecured note is calculated using a discount rate based on the redemption yield of the relevant existing reference UK Gilt plus a suitable estimated credit spread. The estimated credit spread is based on the spread between the yield of the ICE BofA 5-10 Year A Sterling Non-Gilt Index and the redemption yield of the ICE BofA 5-10 Year UK Gilt Index. The discount rate is calculated and updated at each month end and applied daily to determine the Company's published fair value NAVs.

5. Net asset value per ordinary share

The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £351,814,000 (half year ended 30 June 2025: £327,206,000; year ended 31 December 2025: £340,193,000) and on the 169,519,008 ordinary shares in issue (excluding treasury shares) at 30 June 2026 (30 June 2025: 170,705,636; 31 December 2025: 169,519,008).

6. Share capital

7. Dividends

9. Going concern

The Directors have considered the Company's financial position, including the liquidity of its investment portfolio, its cash flow forecasts and its ability to comply with its borrowing covenants, with regard to the headroom available under the most restrictive covenants. The Directors have also considered the potential impact of elevated interest rates on the broader financial system and the continuing wider ramifications of geopolitical conflicts.

The Directors are satisfied that the Company's portfolio consists predominantly of readily realisable securities and that the Company has adequate resources to meet its financial obligations, including the repayment of borrowings as they fall due, for a period of at least 12 months from the date of approval of these half-year results. Having also taken account of the principal risks and uncertainties, the Board therefore considers it appropriate for the condensed financial statements to be prepared on a going concern basis.

The Company's shareholders are asked every five years to vote on the continuation of the Company. An ordinary resolution approving the continuation of the Company was passed by shareholders at the annual general meeting held on 13 May 2025.

10. Related party transactions

The Company's related parties are its Directors and Janus Henderson. There were no material transactions between the Company and its Directors during the period. Amounts paid to the Directors related only to expenses and remuneration, and there were no amounts outstanding at the period end.

In respect of services provided by Janus Henderson, other than fees payable by the Company in the ordinary course of business and the provision of marketing services, there were no material transactions with Janus Henderson that affected the financial position of the Company during the period under review.

11. Half Year Report

The Half Year Report for the six months ended 30 June 2026 will shortly be available on the Company's website at www.hendersonhighincome.com. An abridged extract from the Half Year Report, the 'Update', will also be available shortly on the Company's website and copies will be sent to shareholders in September 2026. Both documents will also be available from the Corporate Secretary at the Company's registered office, 201 Bishopsgate, London, EC2M 3AE. The Update will be submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

12. General information

a) Company Status

The Company is a UK domiciled investment trust company with registered number 02422514.

SEDOL/ISIN number: 0958057/GB0009580571

London Stock Exchange (TIDM) code: HHI

Global Intermediary Identification Number (GIIN): JBA08I.99999.SL.826

Legal Entity Identifier (LEI): 213800OEXAGFSF7Y6G11

b) Directors, Corporate Secretary and Registered Office

The Directors of the Company are Jeremy Rigg (Chairman), Jonathan Silver (Chairman of the Audit & Risk Committee), Francesca Ecsery (Senior Independent Director), Richard Cranfield and Preeti Rathi. The Corporate Secretary is Janus Henderson Secretarial Services UK Limited and the Company's registered office is 201 Bishopsgate, London EC2M 3AE.

c) Website

Information on the Company, including its share price and net asset value, monthly factsheets and data, announcements, reports and details of general meetings, is available at www.hendersonhighincome.com.