TIDMJDT
RNS Number : 0623X
Jupiter Dividend & Growth Trust PLC
25 August 2015
Jupiter Dividend & Growth Trust PLC
Half Yearly Financial Report for the six months to 30 June 2015
(unaudited)
Financial Highlights
Performance
30.06.15 31.12.14 % Change
Total assets less current
liabilities (GBP'000) 52,869 50,465 +4.8
FTSE All-Share Index
(Capital) 3,570.58 3,532.74 +1.1
FTSE All-Share Index
(Total Return) 5,613.54 5,449.09 +3.0
Share Performance
30.06.15 31.12.14 % Change
Zero Dividend Preference
shares
Mid-market price (pence) 111.63 111.13 +0.4
Net Asset Value (pence) 127.30 123.10 +3.4
Discount (%) (12.3) (9.7) -
Ordinary Income shares
Mid-market price (pence) 4.58 4.50 +1.8
Net Asset Value (pence) 1.88 1.10 +70.9
Premium (%) 143.6 307.2 -
Common shares
Mid-market price (pence) 121.50 111.25 +9.2
Net Asset Value (pence) 130.09 124.48 +4.5
Discount (%) (6.6) (10.6) -
Revenue Performance
Six months Six months
to 30.06.15 to 30.06.14 % Change
Revenue after taxation
due to Ordinary
Income shareholders
(GBP'000) 784 441 +77.8
Return per Ordinary
Income share (p) 0.85 0.48 +77.1
Return per Common share
(p)
(shown within revenue
finance costs) 2.46 1.33 +85.0
Chairman's Statement
Performance
The total assets less current liabilities of your Company rose
by 4.8 per cent during the six months to 30 June 2015 to
GBP52,869,000. By comparison, the Company's benchmark index, the
FTSE All-Share Index, rose by 3.0 per cent (Total Return) during
the same period.
Share Price Performance
The Net Asset Value of the Common shares increased by 4.5 per
cent during the period under review from 124.48p to 130.09p
(including income and expenses).
The Net Asset Value of the Zero Dividend Preference shares
increased by 3.4 per cent during the period under review from
123.10p to 127.30p*, while the discount on the Zero Dividend
Preference shares widened from 9.7 per cent to 12.3 per cent over
the period.
Due to the Company's geared capital structure, any fall in the
Company's total assets is borne first by the Ordinary Income
shares. The effect of gearing is that in rising markets the asset
value of the Ordinary Income shares benefits from any
outperformance of the Company's investment portfolio over and above
the cost of the fixed entitlements of the Company's Zero Dividend
Preference shares and Common shares.
Conversely, when the Company's total assets fall, the Ordinary
Income shares suffer to the extent of any shortfall between the
return on the Company's investment portfolio and the cost of the
fixed entitlements of the Company's Zero Dividend Preference shares
and Common shares. Furthermore, when the value of the assets falls
severely, the fixed entitlements of the Company's Zero Dividend
Preference shares and Common shares may not be entirely
covered.
The annual hurdle rate required to repay the Zero Dividend
Preference shares on 30 November 2017 was 5.9 per cent at 30 June
2015. The Zero Dividend Preference shares were covered by a factor
of 0.9.
There is currently a small capital value of 0.66p per share
accrued to the Company's Ordinary Income shares as at 30 June 2015,
due to the revenue reserves attributable to the Company which are
available for distribution as future dividends.
* The notional accrued entitlement of the ZDP shares at 30 June
2015 was 127.30p.
Hurdle rates between now and the end of the Company's planned
life
Between 21 August 2015 and the end of the Company's planned life
on 30 November 2017, the Investment Adviser estimates that the
Company's investment portfolio (total assets) would need to grow by
approximately 10.2 per cent (annualised, after meeting the cost of
the accruing entitlements of the Company's Zero Dividend Preference
Shareholders and the operating expenses of the Company) in order
for the Company's Ordinary Income Shareholders to expect a final
entitlement on that date equal to their Net Asset Value, as at 21
August 2015, of 0.28p.
The hurdle rate refers to capital growth only and does not take
into account any further dividends payable to Ordinary Income
shareholders which may be declared between now and 30 November
2017.
Revenue and Dividends
The Company's revenues after tax for the period amounted to
GBP784,000. The revenue return per Ordinary Income share and Common
share was 0.85p and 2.46p respectively.
During the period under review the following quarterly dividends
were declared in respect of the year ending 31 December 2015:
Date Record Pay
declared Rate date date
Shares 2015 (net) 2015 2015
Common shares 14 April 0.56p 24 April 22 May
Ordinary Income
shares 14 April 0.20p 24 April 22 May
Following the period under review the following quarterly
dividends were declared in respect of the year ending 31 December
2015:
Common shares 14 July 0.56p 24 July 21 August
Ordinary Income 24 July 21 August
shares 14 July 0.20p
The Board anticipates that future dividends will continue to
reflect the reduced size of the Company and may vary over time with
the distributable revenues generated from the Company's investment
portfolio.
Dividends on the Ordinary Income and Common shares are paid in
Sterling, quarterly in arrears. From time to time, subject to the
requirements of the Corporation Tax Act 2010 the Directors may
retain income in the revenue reserves of the Company with a view to
producing a consistent level of dividend for Ordinary Income and
Common shareholders in subsequent accounting periods.
Outlook
The UK economy looks set for solid growth over the next 12-18
months, notwithstanding any EU referendum anxiety next year. We
therefore expect a positive environment for your Company's
companies to operate in. They are well positioned for further
growth and have the potential to deliver good returns and rising
dividends.
However, a prolonged period of ultra-low interest rates
supercharged with quantitative easing has boosted asset prices both
directly and indirectly, triggering a search for yield.
As assets become more fully valued their prices can become more
susceptible to shifts in market sentiment, particular if, as
finally seems likely, the UK and US central banks feel confident
enough to make a token increase in interest rates in the face of
inflation rates well below their targets.
Thus, we think a benign outlook for the UK economy is not
incompatible with higher levels of volatility. In particular, when
bond yields are ultra-low, capital values can fluctuate more widely
than in normal circumstances. That is likely one reason why Mario
Draghi told debt markets to "get used to" higher volatility.
Martin Boase
Chairman
25 August 2015
Investment Adviser's Review
Market Review
In the period under review, the FTSE All-Share and the FTSE 350
indices returned 3.0 per cent and 2.8 per cent respectively while
the total assets of your Company rose by 4.8 per cent.
The year got off to a turbulent start, although equities made
positive returns over the period. In January, the Swiss National
Bank's surprise abandonment of its three-year franc-euro peg led to
the largest intraday movement of a currency in the Bretton Woods
era. In Greece, the anti-austerity Syriza party secured power.
However, the most significant catalyst for financial markets came
when the European Central Bank commenced its own version of
quantitative easing: buying eligible assets to the tune of EUR60bn
per month until September 2016 or even later. This and a weaker
euro boosted equity markets across continental Europe and the UK on
the back of global capital inflows from the US. However, the move
also exacerbated the perennial search for yield from financial
assets. The yield on many European government bonds turned negative
while the yield on 10-year gilts touched an all-time low of 1.33
per cent at the end of January.
The Bank of England remained optimistic about the outlook for
growth. It lifted the medium-term inflation outlook to reflect a
better growth outlook and shrinking 'slack' in the economy. In the
short term however, the sharp fall in the price of oil helped put
the brakes on inflation via lower food and petrol prices. CPI
inflation fell to zero in February where it broadly remained.
To the surprise of pollsters the general election delivered a
clear result in early May. Government bond yields returned to where
they had been before, the pound strengthened and the political risk
overhanging certain shares began to unwind. In contrast, as bond
yields moved higher in May, this also affected certain blue chip
equities with chunky dividends, the so-called 'bond proxies' -
which sold off in tandem. The period ended with an escalation of
the Greek debt crisis and a speculative boom and bust cycle on
China's stock market.
Policy Review
(MORE TO FOLLOW) Dow Jones Newswires
August 25, 2015 11:02 ET (15:02 GMT)
In the period under review, your Company enjoyed strong
contributions from house builders Crest Nicolson and Galliford Try,
who both benefitted from strong demand in the face of limited
supply. International packaging group Mondi rose on gains due to
improved efficiency in its plants, some profitable investments and
a stronger pricing environment. Underwriters such as esure and
Direct Line rose in anticipation of an upturn in the motor
insurance pricing cycle. These companies, along with airlines
International Consolidated Airlines and Ryanair, have all
demonstrated a capacity discipline that has enabled them to achieve
pricing power and in several cases reward shareholders with special
dividends.
Construction company CRH continued to benefit from strong
trading while the acquisition of assets from Lafarge-Holcim at the
bottom of the cycle should help drive growth further, as many of
CRH's end markets are at an early stage in recovery. Our media
holdings in ITV and WPP benefitted from a boost in advertising
spend on the back of a recovering economy. Other areas of strength
came from computer software companies such as Playtech (a key B2B
partner providing the IT platform for European-based online
gambling operators and currency trading operators) and Micro Focus
International (software to improve companies' own systems). Your
company also benefitted from a tailwind arising from its
participation in a number of IPOs including Autotrader, fund
administrator Sanne Group and Ranger Direct Lending Fund. The
latter targets a yield of around 10per cent from short-term loans
to US SMEs, an area underserved by mainstream banks.
Set against this, there were lacklustre performances from some
high-yielding blue chip companies (AstraZeneca, GlaxoSmithKline,
British American Tobacco) for reasons described above, while shares
in BP and Royal Dutch Shell suffered from the low oil price arising
from Saudi Arabia's attempt to crush US shale frackers.
There was one stock disappointment when shares in Plus 500 fell
sharply after it was obliged to suspend UK customer trading
accounts pending stricter anti-money laundering controls; we sold
our entire holding and subsequently added to Playtech after it made
an opportunistic bid for the online CFD trader. That said, we did
make around three times our initial investment. Assuming the bid
completes as expected, we believe it should be a source of further
value creation for your Company.
Portfolio activity was moderate during the period under review.
We opened a new position in AbbVie, which we consider to be an
attractively-valued pharmaceutical relative to its global peers,
with a strong balance sheet, a good pipeline of drugs to diversify
its income stream and strong cash flows. Other new positions were:
computer chip designer Imagination Technologies and technology
testing business Spirent Communications both of whom have seen
their margins decimated but offer scope for recovery while NAHL
Group is a highly-cash generative personal injury marketing
services company with an attractive yield.
Following the takeover of Lloyd's underwriter BRIT we recycled
the gain into motor underwriter Direct Line. We took profits in
engineering consultancy Ricardo and UK specialty pharmaceutical
Sinclair Pharma after very strong performances by their shares; we
recycled the gains into new opportunities.
We sold our holdings in Aga Rangemaster (as weak sales and a
sizeable pension deficit had become a risk to shareholders), Amec
Foster Wheeler (as demand for oils services suffered from the low
oil price), BBA Aviation (sluggish activity in its US business jet
operations) and Tate & Lyle (weak trading in its sweetener
business).
In the past we had little exposure to banks but have added
substantially to our holding in Barclays which looks attractively
valued, has dealt with the majority of its regulatory risks and
aims to improve dividends. Its new chairman is well regarded for
the way he turned around Aviva. In July, he informed staff at
Barclays HQ of his intention to double the share price over the
next three to four years. We expect further management changes are
likely to lead to deeper restructuring activity. We also opened a
new position in Lloyds Banking Group after it returned to the
dividend register. We think low valuations combined with
potentially strong dividend growth could provide a big boost for
banks whose operations are predominantly domestic.
Outlook
Up until 7 May 2015, there was a universal expectation for the
general election to return a government hostile to business
alongside months of uncertainty and horse-trading from various
political parties. This has all been avoided, while the July Budget
has reassured the majority of consumers and businesses. We would
therefore expect the UK economy to regain momentum as business
investment plans are reinstated. Consumer confidence looks set to
rise further against a background of lower food and fuel prices,
higher employment and the prospect of a modest increase in the real
value of wages.
As such, we can expect the domestic economy to continue to tick
along well enough for now, albeit against headwinds which include
comparatively slow growth in the eurozone and Asia. We continue to
avoid those companies (e.g. miners) exposed to China where the
authorities are trying hard to support a slowing economy. We are
also avoiding companies whose growth prospects depend upon emerging
markets because we think the likelihood of higher interest rates in
the US is likely to be a net negative for those economies. We also
expect the pace and extent of any interest rate rises in the UK and
US to be limited by the fact that falling commodity prices and
lower food costs have resulted in unusually low inflation,
particularly in the UK. This should provide a benign background for
consumers.
In the past eighteen months we have reduced your Company's
exposure to large cap oils and pharmaceuticals in order to be
positioned for the growth and cyclical recovery we anticipated. We
have a variety of investment themes based around companies that
have demonstrated the capacity discipline necessary to achieve
pricing power and reward shareholders. In addition, we hold media
companies that should benefit from a cyclical upturn in advertising
spend as the recovery continues. We also hold some of the stronger
motor insurers who should gain from higher rates as the insurance
underwriting cycle turns up. In the meantime, shareholders are paid
to wait with an attractive level of dividends.
Alastair Gunn
Fund Manager
Jupiter Asset Management Limited
25 August 2015
Investment Portfolio as at 30 June 2015
Market
value Percentage
Company Sector GBP'000 of Portfolio
BT Group Telecommunications 2,206 4.2
GlaxoSmithKline Health Care 2,116 4.1
AstraZeneca Health Care 2,009 3.9
Crest Nicholson Consumer Goods 1,965 3.8
Vodafone Group Telecommunications 1,954 3.8
WPP Consumer Services 1,924 3.7
BP Oil & Gas 1,890 3.6
Barclays Financials 1,758 3.4
HSBC Holdings Financials 1,712 3.3
Galliford Try Industrials 1,650 3.2
Cineworld Group Consumer Services 1,613 3.1
Aviva Financials 1,603 3.1
Imperial Tobacco
Group Consumer Goods 1,533 2.9
Royal Dutch Shell
'B' Oil & Gas 1,446 2.8
Playtech Consumer Services 1,428 2.7
esure Group Financials 1,331 2.6
Mondi Basic Materials 1,233 2.4
ITV Consumer Services 1,185 2.3
CRH Industrials 1,161 2.2
Abbvie Health Care 1,132 2.2
Ryanair Holdings Consumer Services 1,088 2.1
Lloyds Banking Group Financials 1,023 2.0
International Consolidated
Airlines Consumer Services 977 1.9
Next Consumer Services 931 1.8
Babcock International
Group Industrials 918 1.8
Micro Focus International Technology 906 1.7
British American
Tobacco Consumer Goods 854 1.6
Prudential Financials 766 1.5
Legal & General Group Financials 746 1.4
Halfords Group Consumer Services 739 1.4
William Hill Consumer Services 705 1.4
Greencore Group Consumer Goods 705 1.4
IMI Industrials 674 1.3
GKN Consumer Goods 669 1.3
Verizon Communications Telecommunications 594 1.1
NAHL Group Consumer Services 555 1.1
Tullett Prebon Financials 550 1.1
Sanne Group Industrials 540 1.0
Centrica Utilities 528 1.0
KCOM Group Telecommunications 514 1.0
Direct Line Insurance
Group Financials 508 1.0
(MORE TO FOLLOW) Dow Jones Newswires
August 25, 2015 11:02 ET (15:02 GMT)
ISG Industrials 499 1.0
Melrose Industries Industrials 495 1.0
Brown(N.) Group Consumer Services 462 0.9
Imagination Technologies
Group Technology 443 0.8
Conviviality Retail Consumer Services 441 0.8
Royal Mail Industrials 417 0.8
Balfour Beatty Industrials 363 0.7
Ranger Direct Lending
Fund Financials 274 0.5
Spirent Communications Technology 181 0.3
---------------------------- --------------------- ------- ------------
Total Investments 51,914 100.0
--------------------------------------------------- ------- ------------
Cross Holdings in other Investment Companies
As at 30 June 2015, none of the Company's total assets were
invested in listed closed-ended investment funds. It is the
Company's stated policy that this exposure should not be permitted
to exceed 15 per cent of total assets.
Interim Management Report
Related Party Transactions
During the first six months of the current financial year no
transactions with related parties have taken place which have
materially affected the financial position or performance of the
Company during the period.
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the
Company's business can be divided into the following areas:
-- investment policy and process
-- market movements
-- legal and regulatory compliance
-- gearing
-- operational, and
-- financial, such as market price risk, interest rate risk, liability risk and credit risk.
Information on these risks is set out in the 2014 Annual Report
& Accounts.
In the view of the Board these principal risks and uncertainties
are applicable to the remaining six months of the financial year as
they were to the six months under review.
Going Concern
The Half-Yearly Financial Report has been prepared on a going
concern basis. The Directors consider that this is the appropriate
basis as they have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future. In considering this, the Directors took into
account the Company's investment objective, risk management
policies and capital management policies, the diversified portfolio
of readily realisable securities which can be used to meet
short-term funding commitments and the ability of the Company to
meet all of its liabilities and ongoing expenses. Thus the
Directors continue to adopt the going concern basis of accounting
in preparing the financial statements.
Directors' Responsibility Statement
The Board of Directors of Jupiter Dividend & Growth Trust
PLC confirms that, to the best of its knowledge:
(a) The condensed set of financial statements have been prepared
in accordance with the Financial Reporting Council's statement
'Interim Financial Reporting' and give a true and fair view of the
assets, liabilities, financial position and profit of the Company
for the period ended 30 June 2015;
(b) The Chairman's Statement, the Investment Adviser's Review
and the Interim Management Report include a fair review of the
information required by Disclosure and Transparency Rule 4.2.7R;
and
(c) The Interim Management Report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.8R on
related party transactions.
The Half-Yearly Financial Report has not been audited or
reviewed by the Company's auditors.
For and on behalf of the Board
Martin Boase
Chairman
25 August 2015
Income Statement
For the six months to 30 June 2015 (unaudited)
Six months to 30.06.15 Six months to 30.06.14
------------------------- -------------------------- --------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------- -------- ------- -------- ------- -------
Gains/(losses)
from investments
held at fair
value through
profit
or loss (Note
2) - 1,964 1,964 - (289) (289)
------------------------- ------- -------- ------- -------- ------- -------
Net foreign
currency gains/(losses) - 4 4 - (5) (5)
------------------------- ------- -------- ------- -------- ------- -------
Income 1,359 - 1,359 925 - 925
========================= ======= ======== ======= ======== ======= =======
Gross return/(loss) 1,359 1,968 3,327 925 (294) 631
------------------------- ------- -------- ------- -------- ------- -------
Investment
management
fee (200) - (200) (190) - (190)
------------------------- ------- -------- ------- -------- ------- -------
Other expenses (147) - (147) (176) - (176)
========================= ======= ======== ======= ======== ======= =======
Net return/(loss)
on ordinary activities
before finance
costs and
taxation 1,012 1,968 2,980 559 (294) 265
------------------------- ------- -------- ------- -------- ------- -------
Finance costs (198) (1,690) (1,888) (107) (1,579) (1,686)
========================= ======= ======== ======= ======== ======= =======
Net return/(loss)
on ordinary
activities
before taxation 814 278 1,092 452 (1,873) (1,421)
------------------------- ------- -------- ------- -------- ------- -------
Tax on ordinary
activities (30) - (30) (11) - (11)
------------------------- ------- -------- ------- -------- ------- -------
Net return/(loss)
on ordinary
activities
after taxation 784 278 1,062 441 (1,873) (1,432)
------------------------- ------- -------- ------- -------- ------- -------
Net return/(loss)
per Ordinary
Income share
(Note 3) 0.85p 0.30p 1.15p 0.48p (2.04)p (1.56)p
------------------------- ------- -------- ------- -------- ------- -------
Net return
per Common
share
(Note 3) 2.46p 4.21p 6.67p 1.33p 3.93p 5.26p
------------------------- ------- -------- ------- -------- ------- -------
The total column of this statement is the profit and loss
account of the Company prepared in accordance with UK Generally
Accepted Accounting Practice ('UK GAAP').
All revenue and capital items in the above statement derive from
continuing operations.
No operations were acquired or discontinued in the period
The financial information does not constitute 'accounts' as
defined in section 434 of the Companies Act 2006.
Balance Sheet
As at 30 June 2015
30.06.15 31.12.14
(unaudited) (audited)
GBP'000 GBP'000
------------------------------ ----------- ---------
Fixed asset investments
------------------------------ ----------- ---------
Investments at fair value
through profit or loss 51,914 48,914
============================== =========== =========
Total Portfolio 51,914 48,914
------------------------------ ----------- ---------
Current assets
------------------------------ ----------- ---------
Debtors 868 148
------------------------------ ----------- ---------
Cash and cash equivalents 522 1,757
============================== =========== =========
1,390 1,905
------------------------------ ----------- ---------
Creditors: amounts falling
due within one year (435) (354)
============================== =========== =========
Net current assets 955 1,551
------------------------------ ----------- ---------
Total assets less current
liabilities 52,869 50,465
------------------------------ ----------- ---------
Creditors: amounts falling
due after more than one year
------------------------------ ----------- ---------
Zero Dividend Preference
shares and Common shares (51,142) (49,452)
------------------------------ ----------- ---------
Total net assets 1,727 1,013
------------------------------ ----------- ---------
Capital and reserves
------------------------------ ----------- ---------
Called up share capital 8,235 8,235
------------------------------ ----------- ---------
Share premium 21,864 21,864
------------------------------ ----------- ---------
Special reserve 62,062 62,062
------------------------------ ----------- ---------
Capital reserve* (91,294) (91,572)
------------------------------ ----------- ---------
Revenue reserve** 860 424
------------------------------ ----------- ---------
Total shareholders' funds 1,727 1,013
------------------------------ ----------- ---------
Net Asset Value per Ordinary
Income share (Note 6) 1.88p 1.10p
------------------------------ ----------- ---------
(MORE TO FOLLOW) Dow Jones Newswires
August 25, 2015 11:02 ET (15:02 GMT)
* These reserves are subject to restrictions in terms of their
distributability. Details of the restrictions are as follows:
Distributions would only be made to holders of Common shares from
the revenue reserve included in the capital reserve figure.
** These reserves form the distributable reserves of the Company
and may be used to fund distribution of profits to investors via
dividend payments.
Statement of Changes in Equity
For the six months to 30 June 2015 (unaudited)
Share Share Special Capital Revenue
For the six months Capital Premium Reserve Reserve Reserve Total
to 30 June 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- ------- ------- -------- ------- -------
Balance at 1 January
2015 8,235 21,864 62,062 (91,572) 424 1,013
--------------------- ------- ------- ------- -------- ------- -------
Net return from
ordinary activities - - - 278 784 1,062
--------------------- ------- ------- ------- -------- ------- -------
Equity dividends
paid and declared* - - - - (348) (348)
--------------------- ------- ------- ------- -------- ------- -------
Balance at 30 June
2015 8,235 21,864 62,062 (91,294) 860 1,727
--------------------- ------- ------- ------- -------- ------- -------
Share Share Special Capital Revenue
For the six months Capital Premium Reserve Reserve Reserve Total
to 30 June 2014 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- ------- ------- -------- ------- -------
Balance at 1 January
2014 8,235 21,864 62,062 (89,396) 336 3,101
--------------------- ------- ------- ------- -------- ------- -------
Net return from
ordinary activities - - - (1,873) 441 (1,432)
--------------------- ------- ------- ------- -------- ------- -------
Equity dividends
paid and declared - - - - (330) (330)
--------------------- ------- ------- ------- -------- ------- -------
Balance at 30 June
2014 8,235 21,864 62,062 (91,269) 447 1,339
--------------------- ------- ------- ------- -------- ------- -------
* For the dividends paid and declared:
Fourth quarterly dividend of 0.18p (2014: 0.18p) has been paid
out of revenue profits.
First quarterly dividend of 0.20p (2014: 0.18p) has been paid
out of revenue profits.
Cash Flow Statement
For the six months to 30 June 2015 (unaudited)
Six months Six months
to to
30.06.15 30.06.14
GBP'000 GBP'000
-------------------------------- ---------- ----------
Operating activities
-------------------------------- ---------- ----------
Cash flow from operations 861 496
-------------------------------- ---------- ----------
Net tax (paid)/received (30) 4
================================ ========== ==========
Net cash inflow from operating
activities 831 500
-------------------------------- ---------- ----------
Investing activities
-------------------------------- ---------- ----------
Purchase of investments (8,766) (10,219)
-------------------------------- ---------- ----------
Sale of investments 7,133 9,297
================================ ========== ==========
Net cash outflow from investing
activities (1,633) (922)
-------------------------------- ---------- ----------
Financing activities (802) (422)
-------------------------------- ---------- ----------
Equity dividends paid (348) (330)
-------------------------------- ---------- ----------
Finance costs (dividends)
on Common shares (85) (80)
================================ ========== ==========
Net cash outflow from financial
activities (1,235) (832)
-------------------------------- ---------- ----------
Decrease in cash and cash
equivalents
-------------------------------- ---------- ----------
Cash and cash equivalents
at the start of the period 1,757 1,588
-------------------------------- ---------- ----------
Cash and cash equivalents
at the end of the period 522 756
================================ ========== ==========
(1,235) (832)
-------------------------------- ---------- ----------
Cash and cash equivalents
consist of:
-------------------------------- ---------- ----------
Cash at bank and in hand 522 756
================================ ========== ==========
522 756
-------------------------------- ---------- ----------
Notes to the Accounts
1. Accounting Policies
A summary of the principal accounting policies all of which have
been applied consistently throughout the period are set out
below.
(a) Basis of Preparation
The Financial Statements for the six months to 30 June 2015 have
been prepared in accordance with UK Generally Accepted Accounting
Principles ('UK GAAP') and with the Statement of Recommended
Practice ('SORP') for Investment Trust Companies issued by the
Association of Investment Companies ('AIC') in November 2014. FRS
104, 'Interim Financial Reporting', issued by the FRC in March 2015
has been applied in preparing the financial statements included in
this half-yearly report. The Company continues to adopt the going
concern basis in the preparation of the financial statements.
(b) Revenue Recognition
Dividends on investments are included in revenue when the
investment is quoted ex-dividend. UK dividends are shown net of tax
credits. Interest on deposits is accounted for on an accruals
basis. The fixed return on a debt security is recognised on a time
apportionment basis so as to reflect the effective yield on the
debt security. Where the Company has elected to receive its
dividends in the form of additional shares rather than in cash, the
amount of the cash dividend is recognised as income. Any excess in
the value of the shares received over the amount of the cash
dividend is recognised in capital reserves.
(c) Expenses
Expenses are accounted for on an accruals basis. Management
fees, administration and other expenses are charged fully to the
revenue column of the Income Statement. That part of any investment
performance fee which is deemed by the Directors to relate to the
capital outperformance of the Company's investments will be charged
to capital and that part relating to revenue outperformance will be
charged to revenue. Expenses which are incidental to the purchase
or sale of an investment are charged to capital.
(d) Finance Costs
Finance costs are accounted for on an accruals basis and in
accordance with the effective interest rate. Common share revenue
return is charged in full to the revenue column of the Income
Statement. In accordance with the provisions of Financial Reporting
Standard 102 'The Financial Reporting Standard applicable in the UK
and Republic of Ireland' the Zero Dividend Preference shares and
Common shares are classified as liabilities in the accounts and
held at amortised cost and finance costs of Zero Dividend
Preference shares and Common shares are charged to the capital
column of the Income Statement.
(e) Taxation
-- Withholding tax deducted at source from income received is
treated as part of the taxation charge in the income account, in
instances where it cannot be recovered.
-- Deferred tax is recognised in respect of all timing
differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an
obligation to pay more, or right to pay less, tax in the future
have occurred at the balance sheet date. This is subject to
deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the
future reversal of the underlying timing differences can be
deducted. Timing differences are differences between the Company's
taxable profits and its results as stated in the financial
statements which are capable of reversal in one or more subsequent
periods.
(f) Foreign Currency
-- Assets and liabilities denominated in foreign currencies are
translated at the rates of exchange ruling at the balance sheet
date.
-- Foreign currency transactions are translated at the rates of
exchange applicable at the transaction date.
-- Foreign currency differences are dealt with in the capital reserve.
(g) Capital Reserve
The following are accounted for in this reserve:
-- gains and losses on the realisation of investments
-- changes in fair value of investments held at the period end
-- performance fee relating to capital outperformance
-- finance costs of Zero Dividend Preference shares and Common shares
-- transaction costs and reconstruction costs
-- foreign currency difference
The capital reserve is not available for the payment of
dividends.
(h) Special reserve
This reserve is used to finance the Company's share buy back
facility.
(i) Investments
Investments are recognised and derecognised on the trade date
where a purchase and sale of an investment is under a contract
whose terms require delivery of the investment within the timeframe
established by the market concerned and are initially measured at
cost, being the consideration given.
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All investments are classified as held at fair value through
profit or loss. Changes in the fair value of investments listed at
fair value through profit or loss and gains and losses on disposal
are recognised in the Income Statement as 'Gains/(losses) on
investments at fair value through profit or loss'. The fair value
of listed investments is based on their quoted bid market price at
the balance sheet date without any deduction for estimated future
selling costs.
Foreign exchange gains and losses on fair value through profit
or loss investments are included within the changes in the fair
value of the investment.
2. Gains/(losses) on investments
Six months
Six months to to
30.06.15 30.06.14
----------------------------------------- ----------
GBP'000 GBP'000
-------------------------------- ------- ----------
Net gains/(losses) realised
on sale of investments 1,902 (383)
-------------------------------- ------- ----------
Movement in investment holdings
gains 62 94
-------------------------------- ------- ----------
Gains/(losses) on investments 1,964 (289)
-------------------------------- ------- ----------
3. Return per share
Return per Ordinary Income share
Six months
Six months to to
30.06.15 30.06.14
GBP'000 GBP'000
------------------------------------------------ ---------------------- ----------
Net revenue return applicable
to Ordinary
Income shares 784 441
------------------------------------------------ ---------------------- ----------
Net capital return applicable
to Ordinary
Income shares 278 (1,873)
================================================ ====================== ==========
Net total return 1,062 (1,432)
------------------------------------------------ ---------------------- ----------
Number of Ordinary Income
shares in issue
during the period 91,675,333 91,675,333
------------------------------------------------ ---------------------- ----------
Net revenue return per Ordinary
Income share 0.85p 0.48p
------------------------------------------------ ---------------------- ----------
Net capital return per Ordinary
Income share 0.30p (2.04)p
================================================ ====================== ==========
Net return per Ordinary Income
share 1.15p (1.56)p
------------------------------------------------ ---------------------- ----------
Revenue return per Common
share
------------------------------------------------ ---------------------- ----------
Number of Common shares in
issue during the period 8,054,045 8,054,045
------------------------------------------------ ---------------------- ----------
Net revenue return applicable
to Common shares 2.46p 1.33p
------------------------------------------------ ---------------------- ----------
Net capital return applicable
to Common shares 4.21p 3.93p
================================================ ====================== ==========
Net return per Common share 6.67p 5.26p
------------------------------------------------ ---------------------- ----------
4. Transaction Costs
During the period expenses were incurred in acquiring or
disposing of investments classified as fair value through profit or
loss. These have been expensed through capital and are included
within gains/losses on investments in the Income Statement. The
total costs were as follows:
Six months
Six months to
to 30.06.15 30.06.14
---------- ------------ ----------
GBP'000 GBP'000
---------- ------------ ----------
Purchases 38 21
---------- ------------ ----------
Sales 7 -
---------- ------------ ----------
Total 45 21
---------- ------------ ----------
5. Comparative Information
The financial information contained in this interim report does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The financial information for the six months to
30 June 2015 and 30 June 2014 has not been audited.
The information for the year ended 31 December 2014 has been
extracted from the latest published audited financial statements.
The audited financial statements for the year ended 31 December
2014 have been filed with the Registrar of Companies. The report of
the auditors on those accounts contained no qualification or
statement under section 498(2) or (3) of the Companies Act
2006.
6. Net Asset Value per Ordinary Income share
The Net Asset Value per Ordinary Income share as at 30 June
2015, calculated in accordance with the Articles of Association,
was as follows:
30.06.15 31.12.14
------------------------- ------------ ------------ ------------ ------------
Net Net
Asset Value Asset Value
per share Asset Value per share Asset Value
attributable attributable attributable attributable
(p) GBP'000 (p) GBP'000
------------------------- ------------ ------------ ------------ ------------
Ordinary Income
shares 1.88 1,727 1.10 1,013
========================= ============ ============ ============ ============
Common shares 130.09 10,477 124.48 10,025
========================= ============ ============ ============ ============
Zero Dividend Preference
shares 127.30 40,889 123.10 39,538
========================= ============ ============ ============ ============
Net Asset Value per Ordinary Income shares on the balance sheet
is based on net assets of GBP1,727,000 (31 December 2014:
GBP1,013,000) and on 91,675,333 (31 December 2014: 91,675,333)
Ordinary Income shares, being the number of Ordinary Income shares
in issue at the end of the period.
7. Fair valuation of investments
The fair value hierarchy analysis for investments held at fair
value at the period end is as follows:
30.06.15 31.12.14
--------------------------- ------- ----------- ------- -----------
Assets Liabilities Assets Liabilities
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------- ----------- ------- -----------
Quoted prices for
identical instruments
in active markets 51,914 - 48,914 -
=========================== ======= =========== ======= ===========
Total value of investments 51,914 - 48,914 -
--------------------------- ------- ----------- ------- -----------
8. Related Parties
With effect from 27 February 2015, Reef Hogg retired as a
director of Jupiter Investment Management Group Limited and Jupiter
Asset Management Limited ('JAM'), companies within the same group
as Jupiter Unit Trust Managers Limited ('JUTM'), the Alternative
Investment Fund Manager ('AIFM').
JUTM is contracted to provide investment management services to
the Company (subject to termination by not less than twelve months'
notice by either party) for an annual fee of 0.75 per cent of total
assets less current liabilities payable quarterly in arrears.
Management fees of GBP99,904 were outstanding as at 30 June 2015
(30 June 2014: GBP95,940).
JUTM is also entitled to receive a performance fee of 15 per
cent of the amount by which audited total assets less current
liabilities on the last day of each accounting period exceed the
higher of (a) 110 per cent of the total assets less current
liabilities at the end of the immediately preceding accounting
period and
(b) the total assets less current liabilities at the end of the
last accounting period for which a performance fee was paid ('the
high water mark'). In the event of, inter alia, a reduction of
capital or bonus issue the calculation of the performance fee shall
be adjusted in such a manner as the Company's auditors shall
determine is appropriate to take account of such events.
A copy of the Half-Yearly Financial Report has been submitted to
the National Storage Mechanism and will shortly be available for
inspection at www.morningstar.co.uk/uk/NSM
The Half-Yearly Financial Report will also shortly be available
for download from the Company's website
(www.jupiteram.com/JDT).
For further information, please contact:
Richard Pavry
Head of Investment Trusts
Jupiter Asset Management Limited, Company Secretary
investmentcompanies@jupiteram.com
020 3817 1496
25 August 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
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